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The Political Economy of Olive Oil
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Moneylending, Taxation, and Olive-Based Villages

Elizabeth Anne Finn, wife of the British Consul of Jerusalem at midcentury, related the story of a woman from Bayt Jala—a village near Bethlehem—whose family turned to a soap merchant, Sulayman Asali, when it could not pay its taxes:

He [the woman’s father-in-law] pledged his olive trees for 500 piasters and wrote a bond upon himself to pay fifteen jars of oil to Sulaiman Assali; and if there is any deficient, he has to pay two jars of oil next year for every one. That year was also a bad one, and our olives were stolen, and we had only three jars of oil; so Sulaiman wrote a bond upon my father-in-law for twenty-four jars of oil for the next harvest, and if any were deficient, two were to be given for every one.…We now owe him eighty jars of oil.[33]

This story was probably exaggerated, both by an informant who hoped to elicit the sympathies and help of a European consular couple who earned a reputation for interference in local affairs and by the writer, who prided herself (and her husband) on being dedicated to giving “succour to the weak.”[34] It does reveal, however, the vicious circle that can be created when the forces of taxation and moneylending intertwine.

The potentially devastating consequences of these combined forces have been a recurrent theme in peasant lore all over the world for centuries. But by the first half of the nineteenth century, a confluence of circumstances posed a serious dilemma for the olive-based villages in the central highlands of Palestine, even though, historically, they have been less vulnerable to the combined impact of moneylending and taxation than have the coastal villages, where the government’s presence has always been stronger. First, a more aggressive and intrusive Ottoman state made tax collection more efficient and inflexible in the interior regions than it had been during most of the eighteenth century. Second, olive-based villages were especially hard hit because the timing of the increasingly predictable and rigorously enforced tax-collection season was based on the grain harvest, which fell months before olives matured in the late fall. To pay their taxes, peasants who depended primarily on the olive crop needed to have money saved from the previous season, or else they had to borrow money. Third, the peasants’ patron-client relationship with once-powerful rural ruling families had become progressively frayed; hence their autonomy and ability to maneuver around the tax season were undermined. Fourth, Nabulsi olive oil merchants and soap-factory owners came to wield considerable political power in the nineteenth century, a development that only accelerated the already ongoing process of urban-rural integration. Fifth, as mentioned previously, these merchants became much more aggressive in ensuring future supplies of olive oil, due to the vigorous expansion of soap manufacturing at this time and due to the increased regional and international trade in this commodity.

Unlike foreign or coastal merchants, Nabulsi oil merchants and soap manufacturers did not need to lure peasants with high prices, profit sharing, and other incentives. Rather, they used their intimate knowledge of local conditions and their growing political clout to draw up highly unfavorable salam contracts not just with individuals but also with entire villages. An oil merchant, for example, would pay the taxes of a village and consider the sum a loan in the form of a salam contract. When the olives were harvested and pressed for oil, the village was then to deliver a formerly agreed upon number of olive oil jars to the soap factory specified by the merchant.[35] The following two documents from the Jerusalem Islamic Court records show that the story told by Elizabeth Finn would not have come as a surprise to the residents of Bayt Jala. In the 1830s and 1840s, this village was battered by the political, social, and economic tensions generated by the combined forces of taxes and moneylending.

The first is a somewhat unusual salam contract negotiated between the government and the elders of Bayt Jala. On September 6, 1833, an agent of the Nabulsi Shaykh Husayn Abd al-Hadi (then the Egyptian government’s right-hand man in southern Syria) signed a contract in the Jerusalem Islamic Court with a number of peasants representing the entire population of Bayt Jala village.[36] The contract specified that in return for 30,000 piasters the peasants were to deliver four months hence (that is, at the end of the olive harvest season) a total of 1,000 jars of good-quality, unadulterated olive oil as measured by the jar of soap factories in Jerusalem.

What was unusual about the case, and probably the reason it was publicly registered in the Jerusalem Islamic Court in the first place, was that the capital advance was paid from the city’s treasury. It was also specifically stipulated that the oil was to be delivered to the local government. Most likely, Bayt Jala was chosen because it had been behind in its tax payments for some time (see below) and because Shaykh Abd al-Hadi, no stranger to salam contracts, took the opportunity to gain access to its olive oil surplus. It is also probable that the olive oil was to be used to cook batches of soap for the Egyptian military forces then in Palestine; hence the use of public moneys. Shaykh Abd al-Hadi, who was soon to become the owner of a soap factory in Nablus, was probably commissioned to produce this soap, and he used his political position and Bayt Jala’s vulnerability to secure his supplies. This arrangement brings to mind the early monopoly practices of Muhammad Ali Pasha in Egypt. Ken Cuno, for example, relates how government officials in the al-Mansura region in Egypt usurped the role of merchant-creditors by purchasing the harvest of entire villages beforehand and/or credited the future delivery of crops at fixed prices against taxes.[37]

The second case concerning Bayt Jala illustrates how this situation was further complicated by tensions arising from the growing social differentiation within the village itself. On March 15, 1835, Salama son of Issa Makhluf stood in front of the Jerusalem Islamic Court judge and testified that seven years earlier he had been imprisoned by the governor of Jerusalem because his village had not paid the 2,675 piasters it owed in taxes to the city’s treasury.[38] He continued that when he was released shortly thereafter, he went to the leaders of Bayt Jala’s clans and asked them to come up with the tax moneys (so he would not be imprisoned again). He then pointed his finger at three shaykhs from his village who had been summoned earlier to the court and accused them of having “ordered” him to write up a salam contract with the people of Bayt Jala so that the taxes could be paid. Salama went on to say that he had advanced his fellow villagers the sum of 1,500 piasters for the future delivery of 128 jars of oil, and he also paid the rest of the tax due (1,175 piasters) to the government in cash on their behalf. He further claimed that for the past seven years he had been asking the defendants to pay him back the oil in kind, according to the conditions of the salam, as well as the cash he had paid on their behalf, but to no avail.

The defendants denied that they had ordered the plaintiff to draw up a salam contract or to cover the rest of the taxes in cash. They argued, instead, that his imprisonment was a simple case of extortion. The governor, they said, “deprived him of this money as a matter of personal dispossession.” When the presiding judge asked the plaintiff to prove his allegations, Salama Makhluf left the court for Bayt Jala and brought back two witnesses who corroborated his story. The judge accepted the witnesses’ testimony as valid and ordered the shaykhs of Bayt Jala to pay back 128 jars of olive oil to the plaintiff, as well as 1,175 piasters in cash.

The fact that Salama Makhluf waited seven years to take his grievance to court provides a very important clue as to the complicated interactions among taxation, moneylending, and peasant differentiation. He was a well-to-do middle peasant whose wealth made him a target of both the government and fellow Bayt Jala villagers. No doubt the governor chose him because he had the money to pay Bayt Jala’s taxes, and it was inconsequential to the governor whether Salama chose or was forced (depending on whose testimony one believed) to translate this payment into a moneylending arrangement whereby part of the village’s olive harvest would be pledged to him in advance as reimbursement. The only difference was that the supplier of capital was not an outsider but, rather, a person who actually lived in the village itself. Salama probably waited this long because he was exposed to immense pressures from many of his fellow villagers to drop his claims, and it might have been very difficult for him to recruit two witnesses willing to testify on his behalf in the face of concerted opposition from the clan elders. Indeed, it must have taken some courage to pursue the enforcement of the salam contract in an urban court, because this involved crossing the boundaries of village solidarity and humiliating the village elders in public.

The vaunted collective ethos of this and other villages, if it ever existed in the manner described by nationalists who would romanticize the Palestinian peasantry, was certainly vulnerable to the triple blows of taxation, moneylending, and internal differentiation, all of which could not but be accompanied by painful and divisive political struggles. In this particular case, the conflict between a middle peasant and established village leaders, who based their authority on the twin pillars of kinship and seniority, can be seen as a symbol for the tensions that wracked the rural sphere during the nineteenth century.

The Bayt Jala cases were not unique. The following example from Jabal Nablus shows that by the mid-nineteenth century it became quite common for entire villages to enter into salam contracts with urban oil merchants in order to pay their taxes and that this situation combined with internal divisions to heighten tensions between villagers. Sometime during the olive harvest season in the fall of 1851, the inhabitants of Jaba village in Jabal Nablus sent a petition directly to the governor of Jerusalem, Hafiz Pasha, in which they complained bitterly against their own elders. The governor promptly passed it on to the Nablus Advisory Council, then headed by Mahmud Beik Abd al-Hadi, qa’immaqam of Nablus and son of Shaykh Husayn, who concluded the salam contract with the village of Bayt Jala mentioned earlier.

On December 28 of that year Mahmud Beik Abd al-Hadi wrote the following reply to the governor of Jerusalem:

[I] have relayed to the council your Noble order containing the petition of the people of Jaba of Jabal Nablus in which they accuse the shaykhs of their own village of forcing them to sign promissory notes for this year worth 1,200 jars [of oil] and for next year, 1,400 jars. [The people of Jaba further claim] that this constitutes treachery against them because their shaykhs’ motivation was no more than their own personal aggrandizement. In carrying out your…order that their complaint be relayed to the council and a report be written explaining the truth of the matter, and [in order] to prevent the recurrence of such unlawful behavior, the respected and wise men of the village, who are relatives of the petitioners, were called in to the council [premises]. When…this case was examined, we found that the villagers’ claim that this oil was only for the benefit of the shaykhs is untrue. Instead, what was ascertained from the report of the old and wise men of…Jaba, who were appointed by the people of the village to pursue their case, is that when the tax [miri] [season] opened, they could not pay the taxes owed by their village because the olive harvest was not yet at hand. Consequently, and as is the usual practice among people of the villages, they were forced to sell their future crop of olive oil in advance for reduced prices through a salam [contract] for the amount of taxes due from their village. It is well known that the oil season does not come until the middle or just after the middle of the [fiscal] year. They received from one of the merchants an advance sum of 34,966.3 piasters for 953 jars of oil [in order to pay] the 1266 [1849–1850] dues, and the oil was to be delivered to the aforementioned merchant from the oil harvest of 1267. Similarly, they received from the same merchant an advance sum of 30,511.3 piasters for 1,330 jars of oil. This money had already been used to pay the 1267 [1850–1851] taxes, and the aforementioned oil was to be delivered the aforementioned merchant during the 1268 [1851–1852] harvest. Yet 130 jars of oil are still owed by the villagers for the 1267 taxes, and they have yet to be paid. After clarifying this matter through receipts and vouchers presented in the council, and [after] persuading the people of the village of this, they made up and shook hands with each other. Accusations and counteraccusations were dropped, and each went his own way after they were warned not to cause such disturbance and to be loving and peaceful with each other. The shaykhs of the village were also warned that from now on they are not to draw up salam [contracts] without the knowledge of the entire village, so that such confusion and recrimination will be avoided.[39]

Before analyzing the implications of this document, it is important to point out that the same oil merchant paid the village’s taxes two years in a row in return for a set number of olive oil jars to be delivered in two consecutive seasons. In a manner reminiscent of the predicament described by the woman of Bayt Jala to Elizabeth Anne Finn, the per-unit price given to the peasants went down by one-third, while the amounts owed went up. Thus the first salam contract specified 953 jars of oil at 36.7 piasters per jar, whereas the second involved 1,330 jars of oil at approximately 23 piasters per jar. There is no doubt here that a hidden interest was calculated into the price.

The council’s statement that the village’s collective resort to salam contracts in order to pay their taxes was the “usual practice” leaves no doubt as to the pervasiveness of this combined dynamic in mid-nineteenth-century Jabal Nablus. It is possible that entire villages entered into such contracts long before the first half of the nineteenth century, but the new elements here were the involvement of urban merchants, as opposed to ruling families, the more efficient tax-collection measures, and the clear political backing for the oil merchant by a new governing institution staffed by other merchants. Also new was the fact that these peasants challenged their elders and the entire Nabulsi political structure by petitioning the governor of Jerusalem directly.

The council’s explanation that the timing of the tax season created the inexorable chain of circumstances must be qualified. As already argued, the collective resort to moneylending in order to pay taxes was not the outcome of an age-old technical problem but the result of the relatively recent political, social, and economic processes. In addition, the words “usual” and, more often, “customary” were frequently used in the council’s correspondence with their superiors in order to justify practices that might actually be recent in origin—such as the “old way” of measuring of grains in storehouses discussed in Chapter 3. The argument of “tradition” was also often used as a weapon against those innovations of Ottoman reform policies that the council members deemed not to be in their favor (they did not complain about innovations they approved of, even those that did in fact challenge established practices). Indeed, the council consciously arrogated to itself a monopoly in the meanings of tradition—hence the position of interpreter of local realities—in order to strengthen its hand in dealings with the central authorities. This is because, as explained in Chapter 3, the fluid political boundaries between central and local forces during the era of reforms were negotiated one conflict at a time.

Another qualification to the meaning of “usual practice” was the complicated political background of this specific petition. Jaba was the seat village of the Jarrar clan, which split into two factions in 1848—that is, just before the first salam contract was signed.[40] Mahmud Beik Abd al-Hadi, who supported one of the Jarrar factions, was appointed qa’immaqam of Nablus in place of Sulayman Beik Tuqan, who supported the second faction, just six weeks before he received the peasants’ petition from the governor of Jerusalem.[41] These events might well be related to the “misunderstanding” between the Jaba villagers and their elders—that is, the political balance was altered and the peasants seized the opportunity to go over the heads not only of their own shaykhs but also of the Nablus Council itself. By sending their petition directly to the governor of Jerusalem they, in effect, were asserting a more inclusive political identity for themselves that went beyond the borders of Jabal Nablus. The implications of this assertion for the issues of citizenship, sources of political authority, class tensions, and notions of justice will be addressed in more detail in the last section of this chapter.

The council’s quick and paternalistic dismissal of this conflict was no doubt an attempt to close the door to further interference by the central government that the peasants’ petition opened. Thus the council’s report ignored political ramifications and presented the conflict in terms of a moneylending agreement gone awry. The manner in which the clearly unfavorable terms of the salam contract were negotiated was also left intentionally vague, and the council’s letter raises many questions that cannot be easily answered: Was it possible that the Jaba shaykhs could have either forced their relatives into a salam contract or secretly negotiated this contract without the knowledge of members of their own clan and village? Who exactly were the “respected and wise men of the village” who allegedly represented the petitioners, if not the accused shaykhs themselves? Why was the oil merchant not named? Could he be one of the council members? And, finally, why were the villagers so easily persuaded, if they were at all, that this entire affair was only a simple misunderstanding?

The one person who escaped recrimination was the oil merchant/moneylender. The vagueness of the council members’ letter, therefore, was the result not only of the strategy of selective feeding of information to their superiors but also of their unwillingness to question the modes of operations of moneylenders, much less the legitimacy of moneylending itself. All of them, it will be recalled, were engaged in soap manufacturing, and they relied on a steady supply of cheap olive oil in order to maintain their rates of profit. Any fundamental challenge to moneylending by the peasantry threatened to undermine the council members’ economic interests no matter what their internal political differences were. The reasons for and consequences of the emergence of this new “notable” elite, dominated mostly by merchants, will be addressed in more detail in Chapter 5. For now, we turn to the impact of moneylending on the peasants’ relationships to the land, to the city, and to each other during the nineteenth century.

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The Political Economy of Olive Oil
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