Thus, as Abdulhamid estimated, in Berlin major states had put into practice their plans to share Ottoman Empire. The Cyprus concession Abdulhamid personally made for the hope of prevention of such plans did not work and a strategically important island was left to British. Abdulhamid played no role in development of incidents until that time, but these events provided the conditions that allowed him to establish monarchical government and taking full control of the government as from late 1881. Abdulhamid the second who believed that sharing governance brought about disasters for the country and who could not even stand remarks against himself took full control of the government, scholars and army.
Then he put into practice step by step his plans and opinions for revival of the Ottoman Empire in his mind. However, Abdulhamid who was described as pro-Islamic and who benefited from the advantages of caliphate encountered a strange option. His greatest supporter for preparing serious reform plans is British Ambassador Layord.
However, Abdulhamid the second who was blamed for establishing a despotic government, drew the country near to western standards via several reforms and regulations such as judicial reform, educational reform, environmental arrangement, construction of railways, modernization of defense system. So much that the architects and infrastructure of the Republic was revealed.
However, the bill for these reforms was heavy. The credibility of the state had dropped due to problems experienced during repayment of debts from Abdulaziz Period. And Abdulhamid the second did not have much to overcome this problem. Customs policy did not work due to Imperial Capitulations blocking the import rights. Farming system was no longer efficient as it had been. The taxes could not be collected because of the attitudes of landowners.
Abdulhamid the 2nd started working to correct this situation in economic field. First he had an agreement with bankers for correction of foreign debt credibility (22 November 1880). Then, with another regulation for foreign debts, attempted to discharge foreign debts consuming more than half of the annual incomes of the state and harming the prestige of the country.
He signed an agreement with the representatives of European creditors on 20 December 1881. This agreement known as Muharrem Kararnamesi (Muharrem Agreement) granted the privilege to establish Düyûn-u Umumiyye (Public Debts) organization for collection of certain state incomes to the creditor countries. Abdulhamid the 2nd was much criticized by Turkish historians because of this agreement and caused a polemic in our history.
However, such condition provided a provisional easiness. Abdulhamid the 2nd, having corrected the financial portrait, allotted for the first time a Sultan Appropriation in order to increase his influence in the government and the country. This means allocation of a portion of the budget for his and his familys personal use. However, this practice was doubtlessly in no way used for personal purposes.
Abdulhamid the 2nd spent sultan appropriations for investments, purchasing of agricultural lands, and buying soils in Mesopotamia especially after 1879. A research by Albertine Juvaideh notes that the sultan, by this way, possessed 1/3 of the plantable soil near Baghdad, for instance. The situation is no different in Palestine, Musul, Basra and some other provinces. Although all aspects of this policy called Royal lands requires further investigation, there is no doubt that it came out successful as a means of strengthening the authority of the sultan. Another aspect of Public Debts organization is foreign capital incoming which should be evaluated as a whole with its positive and negative aspects. After Duyûn-u Umumiye (Public Debts organization), the number of countries increased but the Ottoman state left rights of running underground and aboveground Ottoman resources to French, British and German companies and banks.
These banks and their connections, the leading bank being Osmanlı Bank (Ottoman Bank) tried to establish privilege areas in Ottoman territories and caused division of the country as economical influence regions between other countries. The competition especially on railroad field ended in the victory of Germany and resulting excessive influence of Germany in the country. The sultan, by deciding to have railroad constructed between Istanbul and Baghdad (1902), caused German foreign policy enter Iraq. Such decision would provide a background for closer relations between German Empire and Ottomans.
All such diplomatic activities and maneuvers were perceived differently by the historians. While some people claim that he followed a brilliant foreign policy, other claim the contrary. Bayram Kodaman, depicting that the foreign policy goal of Abdülbamid the 2nd was to protect the territorial integrity and interests of the country, states that he adopted a peaceful foreign policy maintaining the status quo, being aware of the equilibrium between the power and goals of the state. Abdülhamid the 2nd, believing that he can do this by means of diplomatic but not military ways, attached much importance to diplomacy and intelligence.