Soap and the Economy

Three elements made soap production in Nablus a capital-intensive industry. First, the fixed assets—the huge building, the wells where the oil was stored, and the large copper vat in which the soap was cooked—were expensive to purchase, construct, and maintain. Second, soap was cooked in large amounts, necessitating a substantial initial investment in raw materials. Third, anywhere from two to three years could pass before soap merchants received returns on their investment: raw materials had to be secured one year in advance in order to ensure adequate supplies, and cooking, drying, packing, shipping, and selling the soap took at least another year.^[18]

Consequently, capital had to be accumulated and pooled on a number of levels in order to raise the amounts necessary for all of the stages of production. With rare exceptions, the basic division of labor in terms of capital input until the early nineteenth century was between merchants who commissioned soap and made available the most expensive raw material, oil, and soap-factory owners who provided the premises, labor, and other raw materials. Within each camp, partnerships also prevailed. Soap factories were, more often than not, jointly owned, and outside investors were recruited to cover the costs of production. Similarly, oil merchants usually combined their resources in order to contract a single batch of soap (each batch consumed more than five tons of olive oil).

No later than the mid-nineteenth century, as shall be seen in a case study of two soap factories, a process of concentration of wealth in Nablus led to the vertical integration of this industry, whereby single individuals came to finance all of the stages of production. This development did not lead to qualitative changes in the process of production, which remained remarkably the same throughout the entire Ottoman era and, to a large extent, until today (see Appendix 3). More indicative were the increases in the number and prices of soap factories, as well as in the volume of production. What needs to be addressed at this juncture are the phases of expansion and their effect on the organization of production in terms of capital input, ownership, and profits.

Expansion

The Yusufiyya is one of the oldest extant soap factories in Nablus, and it was still being operated in 1994. Located in the Habala quarter next to the Nimr family compound, it was named after Yusuf son of Abdullah Pasha Nimr (d. A.H.1097/A.D.1685–1686), the founding member of the Nimr clan in Nablus. Yusuf was a sipahi officer, a government official, and, later on, an active trader and soap manufacturer.^[19] In January 18, 1729, his grandson, Hajj Umar Agha (d. A.H.1182/A.D.1768–1769), endowed one-fourth of the factory as a waqfahli (family endowment). He also endowed one-half of another factory, the Sawwariyya,^[20] as well as the Yusufiyya’s copper vat (due to their expense, the large copper vats merited mention as items distinct from each soap factory).^[21] As mentioned in Chapter 2, endowing the family’s major residential and revenue-producing properties in perpetuity for the future descendants usually signaled the consolidation of a substantial leap in that family’s fortunes. It also helped protect these properties from arbitrary confiscation, sudden economic downturn in the family’s fortunes, and fragmentation due to inheritance and marriage.

In endowing his share of this property as waqf,Hajj Umar made a choice typical of both previous and future soap-factory owners during the Ottoman period: all, without exception, used this legal mechanism to protect this important form of property from the vicissitudes of political and economic upheavals. Among Hajj Umar’s conditions in the waqf endowment was one which stated that only his sons and their male offspring could benefit from the waqf. His clear intention was to prevent the fragmentation of this property due to inheritance laws and to make sure that other families would not be able to gain shares through marriage to his female descendants. The immediate timing, however, was triggered by an attempt to assassinate him shortly before he endowed the waqf. No doubt he felt an urgent need to protect the Yusufiyya from possible confiscation or internal bickering after his death.^[22]

Hajj Umar was the mutasallim of Nablus at the time. He also served as the mutasallim of Jerusalem and Ramla.^[23] The other partners in the Yusufiyya were his father, who owned one-half, and his brother Muhammad, who owned the remaining quarter.^[24] The copper vat he owned outright. Most soap-factory owners during the seventeenth, eighteenth, and early nineteenth centuries were like the Nimrs: ruling families that could afford the substantial capital investment and that could forge the necessary political and social connections to bring together the various forces and factors of production.

Over the next century the Yusufiyya was consolidated in a single waqf, but we are told that it had fallen into disrepair. In August 1825 Hajj Umar’s grandson, Ahmad Agha, now the superintendent (mutawwali) of the waqf, went to court to ask for permission to renovate the soap factory. He testified that due to lack of maintenance and the ravages of time, the roof of the al-mafrash (the second floor, where the liquid soap was spread to dry) had collapsed, the copper vat was useless, and the building was so full of dirt that it had become “a refuge for dogs.”^[25] As standard legal procedure for waqfs dictated, this account was verified through a field visit by the judge, head of the builder’s guild, and other experts. Then, after a formal court hearing, permission was granted for renovation and for the conversion of the expenses into a right-of-use deposit (khuluw mursad), from which the usual rent payment of 15 piasters to the waqf was to be deducted annually.

The application for permission to renovate as well as the inspection were, in reality, only formalities. A detailed work-expense report in the Nimr family papers shows that the repair work actually began two months before the request was put before the court,^[26] and the “repairs” included the costly construction of two new storage wells for olive oil.^[27] The application, therefore, was a technical step designed to facilitate the legal deduction of the renovation costs from future rent and a political move designed to reaffirm Ahmad Agha’s status as superintendent of the waqf. The primary motivation behind the renovations, however, was an economic one: the desire to expand production through a capital investment.

The investment was substantial. According to the expense report, renovation costs reached approximately 20,000 piasters, many times the average price of an entire soap factory just two decades earlier. The investment was also efficient and profitable: renovations were finished by late January 1825, just in time for the end of the olive-harvest season.^[28] By April of 1826 the factory had already made 10,000 piasters in profit from the commission of 21 cooked tabkhas of soap.^[29] To put the Yusufiyya’s production during these three short months into perspective, 21 tabkhas amounted to 20 percent more than what had been produced in all of Damascus, a city many times the size of Nablus, ten years later (see Appendix 3, Table 12).

How did Ahmad Agha finance this expansion? Where did he raise the capital to pay for the labor and raw materials necessary to cook so many batches of soap, and why did he decide to expand his production facilities at this time, not before or after? In part the expansion took advantage of a changed political environment. Just two years before Ahmad Agha made his investment, Musa Beik Tuqan had been poisoned, and his long reign finally came to an end.^[30] The Nimrs had opposed Musa Tuqan’s centralizing efforts for most of this period and suffered greatly as a result (they were evicted from the city in the early 1820s, though not for very long). Only after Musa Tuqan’s death in 1823, therefore, could the Nimrs (and others) divert their capital to more productive projects. Also, Ahmad Agha’s political position was strengthened in 1825, when he was appointed deputy (wakil) to the mutasallim of Nablus and elected by the local sipahis and za‘ims as their chief (mir’alay).^[31]

Economic factors were also at work. Ahmad Agha was neither alone nor a visionary: roughly half of Nablus’s soap factories were renovated by leading families during the 1820s. Their endeavors suggest that in addition to the improved political atmosphere, the market for Nablus soap was expanding and large profits were to be made. In most cases the capital for this investment drive was raised through multiple partnerships. For example, three soap manufacturers from the Akhrami, Amr, and Qaddumi families applied for permission to renovate the Bashawiyya factory (Habala quarter) in exactly the same month and year (August 1825) as Ahmad Agha Nimr’s application.^[32] Not as rich or as powerful as the Nimr ruling family, they shared the costs equally, as is apparent from an expense report they submitted five months later (February 1826).^[33]

The system of multiple ownerships and partnerships in most soap factories was reproduced here in one of its many forms. On the one hand, the Bashawiyya factory was, as per the usual pattern, completely endowed as waqf. Half of this waqf was part of a larger charitable endowment (waqfkhayri), which supported the Prophet Abraham (nabi Ibrahim ) mosque in Hebron. Two of the partners, Shaykh Amr son of Ahmad Amr and Shaykh Hamid son of Hajj Ahmad Qaddumi, had rented this half in 1820–1821.^[34] The other half of the Bashawiyya was part of a family waqf controlled by Sayyid Ahmad Fakhr al-Din Akhrami, a member of the old elite of Nablus. Sayyid Ahmad Fakhr al-Din had also applied for permission to renovate his share of this factory. In fact, three months before this application, in May 1825, he had bought out his brother’s share in the Bashawiyya—that is, the entire matter was planned beforehand to coincide with the efforts of his partners.^[35] In addition, he controlled shares in the Uthmaniyya factory (Qaryun quarter), in which he was partners with the Tuqan family.^[36] Half of this factory was part of his family’s waqf, and in January 1826 he submitted another application for renovation in his capacity as superintendent.^[37]

Another example of expansion at this time, and of how it was financed by multilayered ownership and access rights, is the case of the Sawwariyya factory. In December 1825 Isma‘il son of Muhammad Beik Sawwar, the superintendent of the family’s waqf properties, received permission from the judge to exchange part of these properties (one-third of a garden and a water pool) for 600 piasters in cash for the express purpose of renovating this factory.^[38] His partners included Sayyid Ahmad Fakhr al-Din, whose family’s waqf encompassed a share of this factory, and members of the Nimr family who also had a share in their waqf portfolio.^[39] Each one of these activities, it remains to be mentioned, was timed to coincide with the olive harvest of that year.

From this first vigorous revival beginning in the latter half of the 1820s, investment in soap factories gathered steam at a steady pace until the early twentieth century. Above-average growth could be detected during the late 1830s/early 1840s and during the 1860s. The first witnessed a strong push by the Abd al-Hadi family and its allies into soap production as they gained control of some factories and rebuilt others. The second period was notable for the building of new factories and the expansion of existing ones by merchants (see below).

Organization and Profits

In addition to joint ownerships of single soap factories, each shareholder often formed partnerships with wealthy individuals (akin to venture capitalists) who, in return for a percentage of the profit, financed the cost of labor, equipment, and all the raw materials except olive oil. This pattern of organization is illustrated by the 1826 expense and income account sheet of the Yusufiyya soap factory found among the Nimr FamilyPapers.^[40]

This document shows that Ahmad Agha Nimr formed a partnership with Sayyid Hasan Fakhr al-Din Akhrami, almost certainly the brother of Sayyid Ahmad Fakhr al-Din Akhrami, whom we met before. Sayyid Hasan advanced 21,500 piasters for the purchase of qilw, lime, and jift (crushed olive pits used as fuel to cook the soap), as well as labor and other miscellaneous expenses, for 21 batches (tabkhas) of soap. Oil is not listed among the expenses, which means that it was supplied by the merchants who commissioned the tabkhas. This amount corresponds roughly to the total sum (20,000 piasters) paid by Ahmad Agha Nimr to renovate and expand the factory that year. No doubt, therefore, this partnership was concluded before the renovations began.

Of the 21,500 piasters invested by Sayyid Hasan, approximately 70 percent were spent on qilw. By comparison, the cost of lime amounted to 4.5 percent; jift, 4 percent; taxes, 5 percent; labor, 4 percent; and equipment and miscellaneous expenses, 12.5 percent. These figures generally agree with those calculated from a much briefer account sheet for the Yusufiyya factory for the year 1855–1856. Of the total capital invested in that year, 64 percent went toward the purchase of qilw; jift cost 6.6 percent; lime, 4.3 percent; labor, 10.6 percent; rent, 3 percent; and miscellaneous expenses, 11.5 percent.^[41]

In 1826 Ahmad Agha and Hasan Fakhr al-Din charged oil merchants 1500 piasters for each cooked batch, making a profit of roughly 476 piasters per tabkha after the costs of labor and raw materials were deducted. The profits were then split evenly: half to Ahmad Agha for renovating the waqf property of which he was the superintendent and half to Sayyid Hasan for supplying the additional capital. Their return on their initial investment (over and above the renovations), after only three months’ work, was a respectable 30 percent.

This partnership was political as well as economic, in the sense that Ahmad Agha’s connections were important for securing the needed supplies; that is, some merchants during this period still found it easier to back a large venture by an established ruling family than to bear the entire risk themselves. One needs to consider, for example, the sources of the raw materials purchased by Sayyid Hasan for the Yusufiyya factory. First, 147 out of the 166 qintars of qilw purchased came from the Salt region: consistent supplies of this raw material depended primarily on the relationship between Nablus and the bedouins of the eastern bank of the River Jordan, especially members of the Bani-Sakhr tribe. Second, the lime came from three villages east of Nablus: Awarta, Salim, and Bayt Furik.^[42] As discussed in Chapter 4, these villages had been closely connected to the Nimr family since the seventeenth century as part of their timar and, later on, their tax-farming holdings.

The fact that patronage, official position, and political power defined the relationship between the Nimr family and the peasants of these villages throughout the last three centuries of Ottoman rule does not mean, however, that this relationship did not change dramatically over time. The Nimrs shifted from being sipahis, or military officers with rights to a percentage of the surplus, to becoming tax collectors (multazims) and, finally, entrepreneurs who simply took advantage of previous connections but no longer had the political influence to enforce them. It was only in the last phase of this changing relationship that merchants could begin to make major inroads into the hinterland, successfully compete with old ruling families, and eventually be able to directly decide what was produced, to whom it was sold, and for how much.

The 1855–1856 account sheet of expenses and income for the Yusufiyya factory shows that the division of labor in financing the production of soap was somewhat similar. Ahmad Agha’s son, Abd al-Fattah, put up one-quarter of the capital, and three partners put up the rest.^[43] They contracted an unspecified number of tabkhas, making a profit of 20.1 percent, or a third less than in 1825–1826. Because costs averaged roughly the same percentages as in the previous account sheet, it is not clear what the reasons for the decline in profit were. Perhaps greater competition from a rising number of soap factories encouraged merchants to offer a lower fee for each tabkha. In any case, profit margins of 20–30 percent for just the short-term production stage of the soap industry are not only impressive but also similar to the figures given by Tamimi and Bahjat more than six decades later, suggesting that a steady high profit was one of the factors behind the expansion of the soap industry during the second half of the nineteenth century.^[44]

As for the soap merchants, it is not known how much profit they made on the soap, but it must have been considerable. After all, it was the soap merchants who bore the brunt of capital investment in soap production. The cost of oil alone for the 21 tabkhas in 1825–1826 was more than 120,000 piasters, or more than three times the joint investment by the soap-factory owner and his partner.^[45] This is not to mention the rent for storing the oil, the 1,500 piasters’ fee for each batch, the export taxes and transportation,^[46] and the long waiting period while the soap was dried, packaged, and shipped. Not surprisingly, therefore, soap merchants also formed partnerships in order to defray the high costs of production.

Concentration and Integration

Closely connected to the expansion of soap production was the concentration of wealth within the merchant community, a process that led to the vertical integration of production by the mid-nineteenth century. The inheritance estate of two merchants—Sayyid As‘ad son of Yusuf Bishtawi and his brother Sayyid Sa‘id—dated July 2, 1857, provides a rare look into the organization of soap production. As it happened, Sayyid As‘ad died while the al-mafrash was still full of recently cooked soap that had not yet been distributed to the various merchants.^[47] Consequently, the court’s inventory had to take account of business arrangements that were left suspended.

The income and expense columns in the inheritance estate show that the Bishtawi brothers headed what can only be described as a highly centralized family firm or, put more precisely, a corporate three-generational patrilocal household the resources of which were monopolized and concentrated by two brothers. Thus, even though only one died, the court had to take into account the estates of both because they jointly owned both commercial and personal property. For instance, they jointly financed the construction of the soap factory and evenly split all business expenses and profits. They also held equal shares in the family’s residence, shops, warehouses, agricultural lands, olive groves, fruit orchards, miscellaneous goods, cash reserves, and outstanding loans. They even jointly owned furniture, copper kitchen utensils, and the clothes they wore.^[48] Putting into and eating out of the same pot, so to speak, lent itself to capital accumulation and concentration in ways far better suited to large-scale investments than if each adult family member managed his or her separate income and expenses.

The forces behind this concentration did not dissipate as a result of Sayyid As‘ad’s death, for the deceased’s oldest son, Hajj Yusuf, quickly moved to take his father’s place. In fact, Hajj Yusuf secured his appointment as the legal guardian (wasi) over his male siblings—all in their legal minority—before his father died. He also became the legal agent for his two sisters, who were in their legal majority, and represented them in court. With the competition out of the way and his father’s half of the family firm’s resources intact and centralized in his own hands, the fast-paced accumulation of property and wealth interrupted by his father’s death continued without delay. Only a few days after the estate was settled in court, Hajj Yusuf and his uncle resumed in earnest the purchase of dozens of olive groves, shops, oil presses, and houses, each paying half the cost.^[49]

This reconstitution of the family firm was consolidated through an orchestrated set of appearances before the court by Hajj Yusuf’s relatives. Only four days after the settlement was recorded, his mother went to court and testified that she was entitled to nothing from the property of her husband, other than what she had received when the estate was divided.^[50] That same day Hajj Yusuf bought all of her shares in twenty parcels of agricultural land—mostly olive groves and fruit orchards located just outside the city—in addition to her shares in three shops inside the city.^[51] None of these shares included property in the soap factory, residence, warehouses, olive presses, or other such real estate. Because none of these properties was mentioned in the inheritance estate, one can safely assume that she (in)voluntarily excluded herself from the bulk of the revenue-producing immovable properties that the Bishtawi brothers had accumulated. This, in itself, was not an unusual situation. Women in corporate households, as Deniz Kandiyoti has persuasively argued, consider sons their most critical resource, and “ensuring their life-long loyalty is an enduring preoccupation.”^[52] If a woman was to enjoy protection as well as exercise control and authority, especially over other women and certainly over her daughters-in-law, the support of her sons was absolutely essential. Handing over inherited commercial properties to her sons, therefore, could enhance both their status in the household and their loyalty to her.

A few months later Hajj Yusuf also bought one of his sister’s shares in exactly the same properties that their mother had sold. Two days after that, his other sister went to court and testified that she had no claims against her brother. Even the extended family was not spared this quest for centralization: Hajj Yusuf and his uncle put up equal capital to buy parcels of agricultural land, mostly olive groves on the outskirts of Nablus, from less wealthy relatives.^[53]

The concentration of wealth was paralleled by the vertical integration of soap production. Sayyids As‘ad and Sa‘id financed the construction of their own soap factory by converting a building of warehouses and shops in the Wikala Asaliyya.^[54] They also purchased shares in another soap factory.^[55] Not content to cook soap for merchants in return for a fee, profitable as that arrangement was, they also cooked soap for their own account—that is, they combined the role of soap merchants with that of factory owners.

At the time of Sayyid As‘ad’s death 80 percent of the soap left on the floor of their factory’s al-mafrash was commissioned by other merchants. As illustrated in Table 8, the amount of soap commissioned varied from merchant to merchant and was measured in terms of the oil provided.

Each of these items was recorded as “To [name of merchant], oil cooked into soap [zayt matbukh sabun],” which shows that the merchant’s share of soap was measured by the amount of oil he provided. Except for the Sadder brothers, there were no joint commissions for soap production, but some merchants only commissioned parts of one tabkha.

The key point here is that the Bishtawi brothers cooked for their own account 20 percent of the factory’s entire output for that cycle (each cycle filled the al-mafrash and, as soon as the soap was dry enough to be cut and stacked, another cycle was started). This meant an investment of 40,000 piasters in this particular cycle (there were 180,000 piasters’ worth of uncut soap still lying on the mafrash floor). This was a sizable investment, but only part of the whole: still left in the storage rooms inside their factory were 297 qintars of qilw, 375 qintars of lime, and 644 piasters’ worth of jift. These amounts of raw materials were adequate for at least 28 to 30 more tabkhas of soap, or three and a half times as much as had already been cooked.

In order to secure the large amounts of olive oil they needed every year, the Bishtawi brothers pursued a two-track strategy: landownership and moneylending. They acquired numerous olive groves outside the city, along with olive-oil presses, and they established a network of salam moneylending contracts with individual peasants to cover the shortfall. At the time of Sayyid As‘ad’s death, a number of salam loans were left outstanding with peasants from eight villages: Asira, Rafidya, Aqraba, Bayta, Adhmut, Salim, Ajansinya, and Bayt Dajan. All but one are located in a single subdistrict. The geographic concentration of moneylending patterns fits with the usual practice of urban merchant networks that sought to carve out spheres of influence in the hinterland.

In short, the Bishtawi brothers had the capital and political influence to finance and organize the production of soap from the ground up. They were at one and the same time moneylenders, oil merchants, soap manufacturers, and large landowners. Their estate also showed that they traded in rice, coffee, grain, and other goods. As mentioned in Chapter 2, labels such as “merchant,” “manufacturer,” and “landowner” should not be thought of as separate categories or as denoting discrete classes. Most wealthy Nabulsi households engaged in all of these activities simultaneously, though they rarely divided their resources equally among them. Patterns of investment strategies, therefore, are important indicators of larger political and economic developments. In this particular case, the Bishtawi brothers’ heavy emphasis on soap production illustrates the shifting investment strategies that laid the material basis for the entry of merchants into the formerly exclusive club of soap-factory owners and, indirectly, the crystallization of a new ruling elite by the mid-nineteenth century.