The Tax Strike

The most serious conflict between soap merchants and the central government revolved around the imposition of new and increased taxes on the manufacture and export of soap. The root causes of the conflict were threefold: structural changes in the Ottoman system of customs regulations after the free-trade Anglo-Turkish Commercial Convention was signed in 1838; the systematic campaign by the Ottoman government to centralize its control over historically semiautonomous regions such as Jabal Nablus after the Egyptian occupation; and the simultaneous consolidation of a cohesive ruling elite in Jabal Nablus led by the Advisory Council members.

The new customs regulations reflected the weak position of the Ottoman government as it was further integrated into the world capitalist economy and revealed the serious dilemma it faced. These regulations opened internal markets by lowering taxes on foreign imports and by exacting a higher tax on exports. At the same time, they aimed at increasing revenue through tighter control of the circulation of locally produced raw and manufactured goods. Ironically, this policy—allowing freer trade opportunities for Europeans while taxing local production and trade more efficiently—only served to undermine the government’s fiscal basis. Worse, the high profits to be made from the smuggling of locally produced commodities to overseas destinations encouraged many merchants to circumvent the government’s attempts to control the flow of commodities.^[135] In short, the new regulations reduced the government’s access to the very surplus it badly needed as a source of revenue, and they were certainly a factor in the eventual bankruptcy of the Ottoman Empire in 1876.

But this puts us ahead of the story. Over the next two decades after the signing of the treaty, the government faced considerable difficulties in its attempts to enforce these new regulations, especially in semiautonomous regions of Greater Syria. Smuggling and resistance by local merchants were not the only problems. The government also suffered from lack of an adequate infrastructure in terms of port facilities and efficiently staffed customs bureaus that could track and streamline the large variety of local conditions, tax arrangements, and networks of trade.

Throughout the 1840s, therefore, all the government could do was to continuously reaffirm these new regulations and to take concrete and incremental steps to slowly enforce them by appointing nonlocal customs officials.^[136] For example, on February 27, 1846, copies of a firman were sent to the all of the high officials of Damascus and Sidon provinces.^[137] This firman reiterated the key elements of the trade regulations issued in 1838 and indicated the government’s main concern: namely, that the agricultural commodities collected as taxes-in-kind must start flowing back into the government storehouses instead of finding their way overseas. Specifically, the movement of basic grains needed by the mass of consumers within the empire, such as wheat, barley, and corn, were not to be taxed unless they were to be shipped overseas. Then they would be subject to a total of 12 percent in taxes (9 percent entry [amed] and export [kharaj] tax upon arriving at the ports, plus a 3 percent exit [reft] tax upon being loaded on ships and exiting the port).

Other firmans further detailed the customs regulations for other goods. For example, semiprocessed commodities, such as clarified butter (samn), cheese, molasses (dibs), honey, rice, and sesame oil, were also exempt from taxes on local movement, but not when they were traded between one province and another, such as between Egypt and Damascus. Finally, processed goods, such as textiles made from cotton or soap made from olive oil, that were imported into or exported from a locality must pay the three basic customs taxes: amed,reft, and kharaj.^[138] Key to all of these goals was greater central government control of the movement of goods overland from the interior regions to the port cities and the interception of smuggling networks that took advantage of inadequate customs facilities between the provinces.

These guidelines or, more accurately, the enforcement of these guidelines, signaled a major erosion in local control of the movement of commodities. Yet, and despite repeated clarifications and explanations by the central authorities over the years, this new system was still meeting resistance from merchants in Jabal Nablus in the early 1850s.^[139] The spotlight fell on soap merchants and manufacturers for a number of reasons. Soap manufacturing and trade generated, relative to other economic activities in Nablus, a substantial portion of the overall revenues—that is, this sector was a tempting target for Ottoman customs officials. Soap manufacturers and merchants, moreover, were the wealthiest elements in Nabulsi society, as well as the most prominent socially and politically. Because they also dominated the Advisory Council and were outspoken about defending their interests, their actions reverberated in the political atmosphere of Jabal Nablus as a whole.

Soap merchants and manufacturers keenly felt the burden of the new regulations. If enforced, they would mean a large increase in taxation over the trade of soap, especially the export trade with Egypt which, until recently, had been virtually exempt from taxation. These new regulations also meant a significant increase in the cost of production. Not surprisingly, the council searched for loopholes in the new regulations, and it arrived at an interpretation of their meaning that was significantly different from what the central government intended. The conflicting interpretations sparked a tax strike by soap manufacturers and merchants that remained partially unresolved when the available records ended in 1853.^[140]

During this time the soap merchants and the governors of Sidon and Jerusalem exchanged a number of letters and petitions through the offices of the Nablus Advisory Council. Usually the council presented itself as a neutral vehicle that simply passed communications back and forth. But at the critical junctures it showed its true colors by openly supporting the tax strike and labeling the merchants’ position as fair and just.^[141] Tensions reached such a point that the newly appointed non-Nabulsi head of the customs bureau retaliated against the strike by closing the gates and forbidding the exit of manufactured soap from the city.^[142]

Two sets of economic issues were of grave concern to the soap merchants and manufacturers. The first set revolved around the most important raw material: oil. Prior to enforcement of the new customs regulations at the beginning of the 1851/1852 fiscal year,^[143] all oil entering the city paid an entry (amed) tax, and all of the soap leaving the city paid only the exit (reft) tax. Now merchants had to pay both the entry and the exit taxes on soap exported from the city. In other words, oil produced in the hinterland of Jabal Nablus was not to be taxed upon entering the city, but that portion of the oil which was consumed in the soap-manufacturing process was now to be subject to taxation when it left the city in the form of soap. This tax would be collected in addition to the normal exit taxes on soap.^[144]

There were three connected problems in this first set of issues. Because most of the oil that entered the city was stored in the wells of soap-factory owners, a method had to be found to calculate how much oil to tax.^[145] More important, because much of the soap in the 1852/1853 fiscal year was made from oil that had already paid the entry tax the year before, soap merchants wanted those taxes reimbursed before going along with the new arrangement.^[146] Furthermore, not all of the oil for soap production came from the hinterland of Nablus. Soap merchants also imported oil from Jabal Ajlun on the east bank of the River Jordan.^[147] Because Jabal Ajlun was not officially part of Jabal Nablus and because oil was no longer considered one of the basic commodities exempt from interregional taxation, merchants who imported it had to pay the entry tax when it passed through the city gates. Therefore, soap made with Ajluni oil had only to pay the normal exit tax when leaving the city because the entry tax on the oil used to make this soap had already been assessed and collected.

This created further complications. Apparently, some soap merchants and manufacturers attempted to avoid paying the entry and exit taxes on oil altogether by secretly smuggling it into the city and then claiming that all their soap was made from Ajluni oil.^[148] At least that was the charge made by Haqqi Afandi and Khawaja Qasbar, the newly appointed non-Nabulsi customs officials. Both the soap merchants and the Nablus Council, on the other hand, complained that the customs officials were disobeying the Sultan’s firman by continuing to charge entry taxes on all oil entering the city and, at the same time, also charging both the entry and the exit taxes on all soap leaving the city.^[149] The council members complained repeatedly that the customs officials were not cooperating with them or providing information on the amount of entry taxes collected in the 1850–1851 fiscal year. They threatened that unless they received such cooperation, they could not be expected to pay both entry and exit taxes on outgoing soap.^[150]

The second major set of issues concerned the export (kharaj) tax on soap destined for Egypt, Damascus, the Hijaz, Anatolia, and other regions. The Nablus soap merchants insisted that the new regulations did not necessitate their paying the kharaj tax unless the soap was to be shipped out by sea from port cities such as Jaffa and Haifa. They based this position on a literal interpretation of the third article of the new customs regulations, which specified sea transport but did not mention ground transport. They argued that if the sultan meant all exports he would not have specified port cities. Furthermore, they continued, ground transport was not mentioned in any of the fourteen articles of the new regulations.^[151]

The customs officials, of course, insisted that the kharaj tax be applied to all exports regardless of the form of transportation. They knew, as did the merchants, that the major markets for Nabulsi soap—Egypt, Damascus, and Jerusalem—were accessible by land. They also knew that Nabulsi merchants paid only half of the kharaj tax when soap was shipped through the ports (export merchants in Jaffa and Acre paid the other half), whereas they would have to pay the entire amount for soap exported by land. In other words, they knew that the soap merchants wanted to avoid export taxes, especially those on land routes, at any cost.

The willingness of soap merchants and producers to challenge directly the most important of government priorities—the collection of taxes—as well as their ability to form and sustain a united front for a long period of time, underline the seriousness with which they treated this matter. In part their actions reflect their resentment over the loss of past privileges. In a firman regulating customs fees on commodities entering and leaving Nablus registered in the Islamic court records in late May 1820, for example, soap exported to Jaffa, Egypt, and Gaza was the only one out of 40 commodities listed not subject to customs fees.^[152] The newly proposed taxes, in short, would cut into the profit margin of soap manufacturers and merchants, complicate their business, and slow down the expansion of this industry.

The strength and determination of soap merchants can be gauged from the fact that twelve years after the signing of the 1838 commercial convention, the customs bureau in Nablus, manned by local officials, was still, for the most part, operating according to the old system. Even those new taxes that were being assessed on oil and soap were unusually light: 4 piasters and 20 paras entry tax on each jar of oil, and only 9.5 piasters exit tax on each qintar of soap. In fact, the council members felt obligated to explain to the provincial governor why these fees were not higher.^[153]

There is little doubt that it was the blatant incongruity and uniqueness of customs collection in Nablus that precipitated the appointment of new non-Nabulsi officials and, in the final analysis, sustained an equal, if not greater, show of stubbornness and determination on part of the governors in Sidon and Jerusalem. Soon after their arrival, these customs officials began to log a myriad of complaints against the soap merchants in memorandums to their superiors and to the Nablus Advisory Council. In one such letter they claimed that Nablus was the only city in which soap merchants did not pay the taxes due from them.^[154]

Another economic factor that sustained the strike was the amount of money involved. In a document detailing the tax structure of Nablus, dated June 24, 1841, revenues from soap production far surpassed any other source—such as taxes on shops, olive and sesame presses, weaving establishments, tanneries, and the import of cheese and tobacco into the city—with the exception of the head tax.^[155] Taxes on meat brought into the city was the only revenue source that came close. Just five months’ worth of entry and exit fees on soap leaving Nablus in 1852, for example, amounted to more than 184,000 piasters.^[156]

Ironically, the council cited the large sums involved as one reason why the merchants would not pay their taxes to the head customs official. This person, they said, simply could not be trusted with so much money. Rather, they suggested that the 500–600 purses of money (250,000–300,000 piasters) be deposited in the Nablus treasury or sent directly to Jerusalem.^[157] Meanwhile, Haqqi Afandi and Khawaja Qasbar accused the soap merchants of fomenting a tax strike so that they could invest the large sums of extra capital remaining in their hands and “enjoy its profits.”^[158]

Finally, one must point out again that the battle over the interpretation of new customs taxes on soap and oil was only one of many similar battles which pitted a centralizing government against a new merchant-dominated elite struggling to consolidate its control over the rural surplus. For example, customs officials wrote angry letters accusing the council members of undermining the bidding process on tax-farming (iltizam) to such an extent that, in their words, “tax farms had become akin to individual malikanes [life-time grants].” They also accused the council members of, among other things, embezzlement and interference.^[159] The council members, on the other hand, made no secret of their opinion that it was the customs officials who were out of line and that most of the problems would be solved if it were not for the obstinacy of these officials. On more than one occasion they accused them of extortion and lack of cooperation.^[160]

The running argument between the council members and the customs officials underscored the political dimension of the conflict. Essentially, their arguments were a microcosm of the larger battle over the boundaries of power, privilege, and jurisdiction between the Ottoman government and the council members who, technically, were that government’s employees. Thus the battle over customs taxes expanded to include the role of the new non-Nabulsi customs employees appointed by the central government and the extent of their jurisdiction. For example, arguments broke out as to who had the right to control the local employees of the customs bureau, whether they be gatekeepers, inspectors, or accountants. On this and other matters, each side repeatedly accused the other of imposing its will.^[161]

Although the final outcome of these disagreements is not known, indications are that it was the soap merchants and the council members who had to give in. Sensing this disturbing trend, the council members, on more than one occasion, appealed to the governor of Sidon province, urging him, in effect, to decide whose cooperation he valued more: theirs or the customs officials’. To their dismay, the governor consistently came down on the side of the customs officials. Even then, the soap merchants still withheld payment. When they were finally and directly ordered to pay up, they resisted yet again.

On May 1, 1853, the soap merchants handed a petition to the council in which they feigned obedience while actually raising the stakes by challenging the authority of the governor and casting doubt on his intentions:

Today we were called in to the council [premises]…and the Noble Order…was read to us concerning the decision of the Provincial Council that we are obligated to pay for what was and will be due in the kharaj [tax] on the soap exported from our city to all areas.…Your wish is our command…and we are ready to obey the orders of the…government at any time. But, what we know is that the government…made the new customs laws, procedures, and regulations and organized them into articles and sections that no one can transcend or change. We appeal to you once again that the [new regulations] do not mention, in any one of the articles, that the kharaj is to be paid except on goods sent to seaports. This is shown clearly in the third article.…So by what proof or argument can we be convinced that we have to pay the kharaj on all shipments to all destinations? If this is to be so just because you [arbitrarily] order it, then, in any case, we, our money, and all that our hands own are…ready to obey our superiors. But, if this is to be so because that is what the new law…[intends] then we beg clarification of the phrase in this article that says that we have to pay, and where we can find it so we can obey it.…As long as our superiors are not forcing us to behave except as outlined in the customs regulations, then please convince us [of your interpretation] of this law so we can begin to comply.^[162]

This petition was turned down. The last recorded attempt of council members to hold off the final showdown was yet another petition, in which they requested that demands for payment be postponed until August 8, 1853, so that they could send a representative to Beirut to argue their case one last time. They added that they would abide by the decision regardless of the outcome.^[163]

Nevertheless, there were limits to the maneuvering power of the council and the soap merchants. Gone were the days when control of the movement of oil and soap was left largely in the hands of local forces and when their immediate predecessors paid little or no taxes. Already, in April 1850, the council agreed that all oil entering the city would have to be inspected, then accompanied by an official to the soap factories.^[164] They also agreed that oil destined for soap production was to be put into special wells that were closed with a wooden door and locked by the customs official, who kept the key. The door, in addition, was to be sealed by that same official and could be opened again only when he was present.

Only two days before the last petition mentioned above—that is, July 30, 1853—they also agreed that special wells were to be set aside for Ajluni oil and that these wells would be sealed according to the same procedures. Finally, the tax strike lost much of its punch once the first of the two major areas of conflict—taxes over oil processed into soap—was settled when soap merchants agreed to pay entry and exit taxes on soap leaving the city gates.^[165] True, they still did not pay the kharaj taxes, but these accounted for a small portion of the total amount that had been long withheld.

The fact that the Nablus soap merchants were not able to gain any concessions from the central government in return for their partial compliance signaled the turning of the tide in favor of the latter. By the early 1860s, and after a successful military campaign to end the factional conflict that gripped Jabal Nablus during the Crimean War, the Ottoman authorities were able, for the first time, to impose a non-Nabulsi as the effective qa’immaqam of Jabal Nablus.

This does not mean that an unbridgeable gap was created between the leading Nabulsi families and the Ottoman government. In fact, the government all along viewed the local notables, including the leaders of the merchant community, as their natural local allies in the region. By the same token, these same leading families reinforced their power and political legitimacy by joining the ranks of the Ottoman government’s bureaucracy, particularly the newly established Advisory Council. The battles of will between the council members and the provincial governors, therefore, were not informed by black-and-white dichotomies that pitted, as nationalists would have it, independence versus colonial occupation, or, as modernization theorists would have it, traditional feudal leaders versus a modernizing state. On the contrary, the most striking dimension of the bidding and customs battles was the fact that both sides spoke the same language. Their discourse, in other words, was built on a shared set of assumptions, such as the primacy of market forces, and the sources of political legitimacy, though not necessarily the boundaries of political power. In their last challenge to the governor about the interpretation of the third article of the new customs regulations, for example, soap merchants did not explicitly question the government’s position on international trade or its right to collect taxes on that trade. Rather, they cited the sultan as the supreme authority on customs regulations but considered the provincial governor’s view of the meanings of these regulations as just an opinion that was no more and nor less valid than their own. In other words, they claimed equal rights before the law, like all other servants of the sultan, regardless of rank.

By the same token, these conflicts were not mere tempests in teapots. On the contrary, they went to the heart of the material interests of the local merchant community and directly affected what they considered to be their legitimate efforts to mold the ways in which state power affected the particulars of their daily existence. Being part of the state, in other words, conferred on them both advantages and drawbacks. Their discourse with the provincial governor constantly aimed at maximizing the former and minimizing the latter. The soap merchants and manufacturers in Nablus consistently underscored their obedience to higher authorities as a general principle, but, just as consistently, they also tried to exploit the permeable and porous boundaries that long characterized the relations between the Ottoman state and the leaders of semiautonomous regions by emphasizing their superior knowledge of local conditions and citing the precedent of customary practices. They used this argument, it is important to emphasize, not as objective observers or as loyal bureaucrats but as creators of meanings—that is, they chose to emphasize only those aspects of tradition that suited their purposes, then recast or reinvented them in the context of the new economic and political realities of which they themselves were a product.

What these merchants objected to the most was the Ottoman government’s attempt to harden these boundaries in a manner that cut into their material base without providing any real protection against growing European hegemony or arbitrary exactions by their superiors. True, some aspects of the government’s reforms offered merchants a place at the political table in return (the Advisory Council), and this did increase their ability to manipulate local economic forces in their favor. But other aspects of the reforms—such as the encouragement of bids by foreign merchants, the imposition of nonlocal governors and customs officials bent on squeezing the merchant’s margin of profit, and minute control over the movement of commodities—all undermined the basic pillars of this interdependent relationship between the government and its local allies. As the century progressed and new technological innovations such as railroads and telegraph lines greatly increased central government control, many in the merchant community must have felt a growing need to reconsider the advantages of Ottoman rule and to search for alternatives.