The Financial Fragility of the Makhzen and the Road to the Protectorate

Introduction to Moroccan Sovereignty in the 19th Century

The Treaty of Wad Ras, signed on April 26, 1860, following Morocco’s defeat in the Hispano-Moroccan War, marked the beginning of a series of events that would lead to the erosion of Moroccan sovereignty. This treaty forced Morocco to pay an indemnity of 100 million pesetas (20 million duros) to Spain, an amount that exceeded the entire annual revenue of the Moroccan treasury [1]. To pay this indemnity, Morocco was compelled to take its first major foreign loan from British banks in 1862, secured against 50% of the country’s customs duties. This not only led to a significant loss of revenue for the Makhzen but also marked the beginning of Morocco’s dependence on foreign loans.

The Expansion of the Protégé System and Its Impact

The Anglo-Moroccan Treaty of 1856 had already imposed a free-trade regime on Morocco, limiting import duties to a maximum of 10%. However, it was the Madrid Convention of 1880 that formalized and expanded the ‘Protégé System’, allowing foreign powers to grant legal immunity to Moroccan subjects, thereby exempting them from Makhzen taxes. This system drastically eroded Morocco’s tax base and sovereignty, as a significant portion of the population was no longer subject to the Makhzen’s fiscal authority.

Military Modernization Efforts and Financial Insolvency

Sultan Moulay Hassan I (r. 1873–1894) attempted to modernize the military, recognizing the need for a stronger defense against foreign encroachment. However, these efforts were hampered by the lack of a reliable domestic arms industry and the financial insolvency of the Makhzen. The devaluation of the Moroccan currency, the Hassani rial, against European currencies like the Franc and Sterling further exacerbated the financial crisis, making it even more challenging for Morocco to service its foreign debt.

The Algeciras Conference and the Final Steps to the Protectorate

The 1906 Algeciras Conference placed Moroccan finances and police under international (mostly French and Spanish) control, effectively stripping the Makhzen of its last vestiges of sovereignty. The 1904 Entente Cordiale between Britain and France signaled the end of British support for Moroccan independence, paving the way for French dominance. By 1904, the French-owned ‘Banque de Paris et des Pays-Bas’ had orchestrated a massive loan that essentially placed the Moroccan customs under French receivership, culminating in the Treaty of Fez on March 30, 1912, which officially established the French Protectorate over Morocco.

Conclusion

The road to the Protectorate was paved by a combination of internal and external factors, including the financial fragility of the Makhzen, the expansion of the Protégé System, failed military modernization efforts, and the machinations of European powers. The Treaty of Wad Ras and subsequent events set in motion a chain of dependencies and erosions of sovereignty that Morocco could not recover from, ultimately leading to the loss of its independence.

Sources

[1] Pennell, C. R. (2000). Morocco since 1830: A History. New York University Press.