The great powers of Europe were competing fiercely to get more out of the failing Ottoman Empire. As the capitulations incapacitated the Ottomans, the state wasn’t even able to regulate its own taxes. The Turks were levied, but foreign merchants were exempt from taxes. Foreigners who lived on Turkish land weren’t subjected to Turkish law, and couldn’t be taken to Turkish courts. In other words, these people were living in a completely isolated manner in the country; in an incredibly privileged status, they were practicing their own laws in the Ottoman Empire. They made more money out of the same trade as the local merchants did but still didn’t pay tax. Even the health-care sector offered extraordinary concessions to them.
Capitulations turned into a bleeding wound for the Ottomans, and naturally many Ottoman administrators undertook initiatives to stop the bleeding.
The first debate in the Ottoman Cabinet on the abolishment of the capitulations took place on September 2, 1914, which resulted in the decision to draw up a memorandum to do away with these concessions.
As a result, a commission led by Nazır Pirizade İbrahim Bey was set up in the Ministry of Justice.(SOURCE) The Commission drafted the official communication to be sent to the Grand Vizier on September 4, and sent it the next day. The government, during the meeting of the Council of Ministers on September 5, decided to abolish all capitulations, economical and judicial alike.
On September 8, the government reconvened, read the official communication and decided that the approved text be sent to the ambassadors in the capital on September 9. The Sultan approved the abolishment of the capitulations on September 8. The text read as follows:
Upon the agreement of the Parliament Members, various financial, administrative, economical and judicial concessions and all privileges, previously granted to foreigners residing at the Ottoman Empire, known as the ‘capitulations’, as well as their associated permits and privileges are hereby abolished. This resolution, upon the orders of the Sultan, will come into effect on September 18, 1330 [October 1, 1914 in the Gregorian calendar].(SOURCE)