Chapter 54: Matters of State
Athens: the Political, Economical, and Cultural Capital of Greece
The early 1840’s would be a rather mixed period in Greek history as while the Greek state certainly prospered as a whole, the
Kapodistriakoi Government of Andreas Metaxas suffered from no shortages of problems throughout its existence. Despite his efforts to form a United Government, the Metaxa Ministry would be anything but as the
Koléttikoi and the
Mavrokordátikoi frequently made life difficult for the new Prime Minister and his supporters.
[1] Named after their respective leaders, Ioannis Kolettis and Alexandros Mavrokordatos, the “
Kollétikoi” and the “
Mavrokordátikoi” emerged from the nebulous
Anti-Kapodistriakoi of the 1830’s to become the primary opposition parties to Metaxas and the
Kapodistrians. While there was some overlap between the three in terms of political leanings and interests, each group had their own distinct differences that would bring them into conflict with one another over the next few years.
In most regards, the
Koléttikoi were generally defined as an ideologically disparate group in Greek politics, although they tended to lean liberal more than they did conservative. They supported initiatives for egalitarian land reform, the centralization of the state, and a degree of government intervention in the economy. They also favored more progressive issues such as the freedom of the press and government support for public education, but by far their most famous platform would be the rapid expansion of the Greek state to include all traditionally Greek territories by any means necessary. The
Koléttikoi generally drew their support from the Roumeliotes of Central Greece, the Greeks of Euboea, and several of the land owning Kodjabashis (Primates) of the Morea providing them with 19 seats in the Vouli (Lower Chamber of the Greek Parliament).
In comparison, the
Mavrokordátikoi were a relatively liberal group. They supported a laissez faire economic policy, limited government, and the empowerment of the regional Nomoi at the expense of the central authority in Athens. Their main platform was the enforcement and protection of the Constitution of 1831 which had occasionally brought them into conflict with Ioannis Kapodistrias and his supporters in the past. While they generally supported the modernizing policies of the
Kapodistriakoi, they also pushed for the freedom of the press alongside the
Koléttikoi. The
Mavrokordátikoi were mainly derived from the Phanariotes, the Morean Primates, and the wealthy ship owners of the Aegean islands earning them 16 seats in the Vouli.
Lastly, the
Kapodistriakoi were generally considered to be the most conservative of three by the standards of the time. They strongly supported the Greek Orthodox Church, the agriculture industry, and they generally resisted any efforts to weaken the institution of the monarchy and Central Government. Yet the
Kapodistriakoi were also committed to Ioannis Kapodistrias’ initiatives and reforms that had favored the small farmers over the large plantation owners, and had helped modernize and industrialize the country. Of the three, the
Kapodistriakoi held the largest degree of support among the peoples of Crete, the Morea, and Attica-Boeotia given the popularity of their de facto founder Ioannis Kapodistrias and their strong association with the revolution and independence of Greece. Because of their strong popular support, the
Kapodistriakoi would enjoy a 59-seat majority in the Vouli at the start of 1841.
Unfortunately for Andreas Metaxas, the differences between the parties would come into play almost immediately as he was soon faced with his first major roadblock as Prime Minister less than a week into the role. When his proposed budget for the 1841-1842 fiscal year was brought to the Vouli’s floor for a vote in early April, the bill met with stern opposition from a coalition of his political opponents and a few of his supposed allies in the chamber. Though the
Kapodistriakoi officially held a 59 to 35 majority in the lower chamber, the
Koléttikoi and the
Mavrokordátikoi still maintained a large enough block to impede the Prime Minister’s agenda, especially when they were aided by some members of the
Kapodistriakoi.
Ultimately, the budget would pass following some revisions to several important provisions in the bill, allocating additional funds to various regions of the country. The most notable amendments to the budget were the inclusion of another 1,000,000 Phoenixes which would be split between the islands of Chios, Crete, Euboea, and Psara to help them recover from some lingering wounds that had been inflicted during the War for Independence. A further 200,000 Phoenixes would be allocated to the municipalities of Arta and Agrinion to improve their infrastructure, while an additional 400,000 Phoenixes would be granted to the municipalities of Preveza and Nafpaktos to expand their ports and commercial facilities. Finally, several restrictions on the press enacted under Ioannis Kapodistrias’ Premiership were to be rolled back, establishing the media as a protected entity in Greece, free from the persecution of the government.
The Port Town of Preveza
These concessions would earn Andreas Metaxas a brief respite from the partisan gridlock in the Vouli. That is until the next major piece of legislation came to the House floor in early May when the National Bank of Greece’s charter came up for renewal. While the measure would narrowly pass, several
Kapodistriakoi had sided against the bill making the vote much closer than anticipated. The Military Expansion Act of 1841 - which increased the combined active and reserve forces of the Hellenic Army from a nominal strength of 64 Battalions to 72 - was also approved by a razor thin margin in June. The permit for the Lake Copais Company to begin work on draining the lake was tentatively approved after receiving surprisingly bipartisan support from the
Koléttikoi in late August 1841. Similarly, the measure establishing the Ministry of Education and Religious Affairs was met with some opposition in the Vouli as well. Yet despite the gridlock which seemed to constantly grip the Hellenic Parliament, the people of Greece generally went about their daily lives as their basic needs were usually taken care of regardless of politics. The country was at peace, the people were safe, and their families were spared from the tragedy of famine or exposure to the elements, all of which was due in large part to the resurgence of the Greek economy in 1841.
The last year of Ioannis Kapodistrias’ Premiership had been marred by a noticeable downturn in the Greek economy. Despite its brevity, the Second Syrian War had thoroughly disrupted trade in the region as numerous merchant ships remained locked away in port for months on end in fear of privateering, harassment, or blockade. Though the attack on Alexandria by the Ottoman Navy at the beginning of the conflict is often considered to be the most famous and the most devastating naval engagement in the war, there were in fact over one hundred raids and counterraids from the Nile Delta in Egypt to the Levantine and Anatolian coasts. The Egyptians even attempted a daring attack of their own on the port of Smyrna, but they were thwarted when their fleet was discovered prematurely by a small Rhodian fishing boat. Despite their neutrality in the conflict, Greek ships denied access any ports in the contested region depriving them of their markets in the East.
However, while some avenues of trade were now closed to them, others quickly became available. As the Ottomans and Egyptians were largely distracted by their war, an opening began to emerge which the Greeks quickly moved to fill. Soon, vessels bearing the Greek ensign would appear in every port and every harbor from Odessa and Sevastopol in Russia to Venice and Ancona in Italy, capably filling the role that the Ottomans and Egyptians had once held themselves. Over the months Greek goods slowly replaced Turkish and Egyptian goods in Western European markets. Even the distant banks of the mighty Danube River would see a greater number of vessels bearing the Azure and White rather than the Star and the Crescent. When the Egyptian and Ottoman merchants finally returned to the sea after several months of fighting, they found that they had been almost entirely replaced by the Greek Merchant Marine.
The Greeks were also aided by the redirection of a large portion of foreign shipping to Greek ports as a result of the war in the Orient. Foreign vessels bound for the ravaged and ruined ports of Alexandria, Acre, Beirut, Alexandretta, and Icel would instead layover at the peaceful Greek ports of Piraeus, Preveza, Patras, Chania, Rethymno, and Heraklion to escape the risks of the war. This rise in traffic ultimately resulted in the rapid development of these harbors into major centers of commerce in the region. New warehouses were constructed, docks were expanded, and harbors were dredged to make way for the Austrian, British, French, Italian, and Spanish ships which now began to appear in these ports. Piraeus in particular would experience a massive boom in its population thanks to this increase in activity, growing from a small town of several hundred people after the Greek War for Independence to a city of several thousand at the end of the Second Syrian War in 1841.
Another important cause for the growth in the Greek shipping during this time can be attributed to the harmonious relations the Kingdom of Greece shared with many countries across Europe. Even before the end of the War for Independence and the signing of the Treaty of London in May 1830, Greece had opened formal diplomatic relations with Britain, France, and Russia. These diplomatic relations were quickly followed by commercial relations, as Greece would sign the Anglo-Hellenic Shipping and Trade Treaty in June 1831, establishing an official trade agreement between the two nations. Under the terms of the agreement Greece would provide Britain with its most favored nation status in return for lower tariffs on Greek goods bound for British markets. This treaty would also be the first of many trade and shipping agreements signed between Greece and the countries of Europe, Asia, Africa, North America, and South America in the coming years.
The influx of foreign capital would lead the Government of Greece, as well as several private interests, to begin investing into other industries which began to emerge at the start of the 1840’s, such as the lucrative Hydriot sponge industry, the Cretan texile industry, and the shipbuilding industry in Syros. On the mainland, coal deposits were discovered near the city of Megalopolis in Arcadia spurring debate on the construction of a mine in the area. The silver industry in Greece began to elicit a large degree of interest that would lead to the formation of 11 different silversmiths across of the country. In addition to foreign capital, Greece would also see an influx of immigrants from the German and Italian states during the late 1830’s and early 1840’s, providing the Greek economy with a desperately needed source of skilled craftsmen and engineers who aided in the development of Greece’s nascent industrial and manufacturing sectors.
Many of the internal trade barriers between the regions of Greece had also been eliminated furthering domestic trade and development. More importantly, the road network on land was finally beginning to show signs of improvement as the isolated villages of the Greek interior began exporting their products to a larger global market. Mules and horses, which had traditionally borne their master’s products to the coastal cities in the past, were gradually being replaced by carts and wagons as the country’s roads continued to improve. This enabled a higher quantity of goods to make the long journey from the inland of the country to the various ports on the coast at a much faster pace than before. Moreover, with the easier and faster transportation of these products from the interior, the high price of transportation gradually fell, which in turn reduced their final prices dramatically, making them more competitive with foreign goods in Greek and foreign markets. And compete it did.
Despite its small size, Greece would quickly become the world’s third largest producer of olive oil behind only the Kingdom of Spain and the Ottoman Empire, and with the Kingdom of Two-Sicilies in a close fourth. Olive groves had existed in Greece since ancient times and remained a prominent feature of the countryside ever since. They could be found everywhere from Aetolia and Crete to Macedonia and Asia Minor, but by far the most famous and plentiful olive groves were found near Athens which produced thousands of tonnes of olives every year. After they were harvested, most olives were generally converted into oils, although a sizeable portion would remain as a fruit for local and foreign consumption. In total, olives and olive oils were the single largest export of Greece, constituting nearly 35% of all exports in 1839 alone. Greece also boasted a high number of fig farms in the Morea, a sizeable citrus industry on Crete, a moderate cotton industry spread between Aetolia-Acarnania and Phocis-Phthiotis. But it would be the Greek raisin industry which would prove to be the most popular and the most profitable.
As part of the broader Philhellenic craze that swept across Western Europe following the Greek War for Independence, numerous Europeans were eager to experience Greek cuisine and delicacies, one of which was the Corinthian raisin, also known as the Zante currant. With its sweet taste and convenient size, Corinthian raisins made for a delicious snack to Western European consumers whose ate them up at an incredible rate which would continue to climb ever higher year after year. Demand for these raisins would reach such heights that numerous farmers throughout Greece would convert their entire crops into raisins, developing a monoculture in some parts of the Morea to meet the demand. Panarition, a small farming town to the west of Corinth, would become a particularly infamous example of this phenomenon as raisins would form the entirety of the village’s economy as early as 1835. While the Government certainly enjoyed the high demand for raisins, and the money they earned off them, they also encouraged farmers to diversify their crops in an effort to prevent what was quickly becoming an oversupply of raisins on the market.
A Raisin Vineyard on Zakynthos
The agricultural boom in Greece was so great, that the total agricultural production had increased from 45,000,000 Phoenixes in 1831 to 80,000,000 Phoenixes in 1841.
[2] As a result of the economic development, the tax and tariff revenue collected by the Government also grew exponentially from 7,101,915 Phoenixes (£255,465) in 1831 to 22,389,400 Phoenixes (£805,374) in 1840. Yet despite more than tripling their annual revenue, the Governments’ budget had barely increased over the past ten years. In fact, throughout much of the 1830’s, the Greek government was forced to make sharp cuts to their military, civil service, and bureaucracy in order to pay their bills, specifically the interest on their loans.
During the War for Independence, Greece had developed a massive debt well in excess of £3,000,000 as it was frequently forced to borrow money from various distributors to finance their war effort against the Ottoman Empire. The lion’s share of this amount would come from two loans worth £800,000 and £2,000,000 respectively, which had been donated to the Greeks by British Philhellenes, investors, and bankers. The Greeks would also take out additional loans from various other sources like the Philhellenes Lord Byron and Tsar Nicholas of Russia. Following the war, Greece would take out another loan from the Powers, which amounted to £2,500,000, bringing their total debt to nearly £6 million in 1831.
Paid out over three installments in 1831, 1832, and 1833, the Post War Loan would aid in the reconstruction and rebuilding of the country after the devastation it had endured during the war. Some of the money would be lent to Greek families, refugees, and veterans enabling them to purchase land, farm tools, and crops. Some would be used to build roads and markets, it went towards the dredging of ports and harbors, as well as the mending of ruined docks and the purchasing of new merchant ships. It also helped establish much needed government institutions like the various ministries and it was used to hire numerous government employees and civil servants like tax collectors, lawyers, administrators, and accountants. However, a significant portion of the loan would go towards the interest payments on their debt which amounted to over 8,400,000 Phoenixes or £300,000 every year.
It is fortunate then that Greece’s economy grew as quickly as it did because Post War Loan was spent rapidly and by the Summer of 1834 it was entirely exhausted. Within weeks, the Greek state would burn through its meagre savings, leading it to make some difficult decisions in order to meet their fiscal requirements. For obvious reasons, the Greek Government would have to pay the interest on their debt, lest they run the risk of bankruptcy or a worsening of their credit. Nor could they refuse to pay the rest of their bills lest they lose faith with their own people. As such the solution to their financial shortfalls would have to come from budget cuts, tax/tariff increases, or taking out further loans to pay for the military, the government bureaucracy, and the various ongoing government projects. Ultimately, the Government would be forced to do a little bit of everything to make ends meet.
While they refused to directly cut down on the size of the army, the Government would not actively seek to refill their ranks following retirements, deaths, and other discharges from the Army. As was to be expected attrition began to take its toll as the true strength of the Army dropped from 14,521 men in 1834 to its nadir of 11,910 men in 1838. The Navy also experienced some cutbacks as the Flagship
Hellas was mothballed in 1835 along with the
Kronos. The steamships
Epichiris and
Karteria were also removed from active duty due to their frequent engine problems and the high maintenance costs needed to repair them. Some ships ran on skeleton crews, while others were reduced to port duty. Several of state employees were furloughed indefinitely and many others had their pay slashed, even King Leopold cut down his own annual subsidy from 400,000 Phoenixes to 300,000 in solidarity with the soldiers, sailors, and civil servants who lost their jobs or their incomes because of the debt crisis. Unfortunately, this would still not be enough and the Greek Government which was then forced to take out additional loans with the Zosimades of Ioannina and the Romaniote Jews of Thessaloniki to make up the difference in 1835 and 1836.
[3]
The Greek Government would attempt to address their debt issue through diplomacy with the Powers, yet because of financial and political reasons these efforts would fall on deaf ears in Paris and St. Petersburg. Their efforts with London would prove to be more complicated however. In 1834, the Government of Greece approached the British Government regarding various discrepancies in their financial records of the two loans issued to Greece during the war, the London Greek Committee loan of 1824 and the Ricardo Banking House loan of 1825. While the two loans were nominally recorded as £800,000 and £2,000,000 respectively, Greece had only ever received £536,000 and £1,125,000, far short of the £2.8 Million they had been charged with. The British Government of Sir Arthur Wellesley and King William IV however, proved indifferent to the Greeks complaints, believing they had simply wasted the missing funds in their corruption and kleptocracy. As such they refused to speak of the matter any further and compelled the Greeks to continue paying their debts as they were currently constructed.
The matter would remain unresolved until the Spring of 1838, when King Leopold of Greece traveled to Britain for the coronation of his niece Queen Victoria. During his stay in London, Leopold made every effort at convincing the new Prime Minister Sir Charles Grey to readdress the Wartime loans. While Earl Grey proved receptive to King Leopold’s concerns, he did little to advance the issue beyond simple platitudes and vague promises. So it was that when Leopold returned to Britain in February 1840 for the marriage of Victoria and Albert, he did so with an army of accountants, financiers, lawyers, and diplomats at his back. After several meetings and the personal intervention of Queen Victoria, Grey would finally agree to an investigation of the Greek Government’s complaints on the matter of their debt.
In his investigation, Earl Grey would discover reports of corruption, embezzlement, and malpractice on the parts of the loans promoters. It quickly became apparent that numerous bankers, accountants, and financiers had used the loan to inflate their own fortunes while the Greeks were ladened with an enormous debt and the British people were robbed of their money. While the Greek agents Andreas Louriotis and Ioannis Orlandos were also criticized for their role in the contracting of the loans and for the rather sizeable commissions they had taken from the loans, the brunt of the criticism would be directed at the London Greek Committee and its former Secretary Sir John Bowring. Bowring’s actions in particular were especially scandalous as he effectively lined his pockets with the charitable donations of beguiled Londoners who earnestly believed they were the Greeks. The investigation would unfortunately take several months to fully root out the extent of the corruption, but with the discovery of the unscrupulous behavior of the London Greek Committee and Sir Bowring it was only a matter of time. Finally, by the Summer of 1841, the British Government announced that they would reduce the nominal amount loaned of £2.8 Million to better reflect the actual amount of £1,686,000.
[4]
The announcement was a huge victory for the newly appointed Metaxa Ministry which was now able to gradually draw down the various austerity measures that had been enacted during the mid- 1830’s. Together with the burgeoning economy, Andreas Metaxas and the Kapodistrians would win 57 of the 94 seats in the Vouli during the 1841 National Elections. Though this was far shorter than the 63 seats Ioannis Kapodistrias had secured in the 1837 elections, Metaxas had still managed to hold onto a solid majority in the Vouli, enabling him to begin work on a number of new projects, initiatives, and expansions that had been downsized or delayed over the past few years because of the financial crisis.
Next Time: Ethos and Mythos
[1] These “parties” are essentially this timeline’s equivalent of the English, French, and Russian Parties of OTL. There are a few differences however, most notably the reduced influence of the English, French, and Russians in the parties.
[2] This is probably a conservative estimate on my part considering the development of the Greek Agricultural Sector in OTL grew from 30 million Drachma in 1833 to 50 million in 1849. Considering TTL’s Greece has managed to avoid a lot of the destruction of OTL’s war, its under better management with Kapodistrias and Leopold, and it has Crete, which has a pretty good agricultural industry, I think a growth of 77.78% is a relatively fair increase over OTL’s 66.7%. Then again the OTL growth took place over 16 years while this was only 10 so it may actually be too much of an increase all things considered.
[3] The Zosimades were a family of Greek bankers and traders from the city of Ioannina. They were one of the single largest financial supporters of the Greeks during the Greek War for Independence. After the war, they continued to support the Kingdom of Greece through additional loans prior to the reinstitution of the National Bank of Greece in 1841. They were also involved in various charitable activities and were strong advocates of education both in Greece and the Ottoman Empire.
[4] The British would do something similar to this in 1878, albeit with a very different set of circumstances.