The Imperial Ottoman Bank
The Imperial Ottoman Bank is one of the most fascinating banking institutions of the modern era. Foreign yet at the same time Ottoman, private yet holding the privileges and duties of a state bank, its complex history is intimately linked to that of the Ottoman Empire, but also to that of the Turkish Republic after the collapse of the empire.
The Imperial Ottoman Bank was borne out of a contract dated February 4, 1863 between the British and French shareholders and the Ottoman government. Sultan Abdulaziz immediately ratified it, hoping to mitigate the economic crisis in the Empire. Taking over the branches and the staff of the Ottoman Bank founded in 1856, the Imperial Ottoman Bank, opened its doors on June 1, 1863.
During its first years, the bank’s principal function was to provide the Treasury with the necessary funding and to play an intermediary role with international loans. Its right of issue was extended for twenty years with a new convention signed on February 17, 1875, which also endowed the bank with the title and function of the Treasurer. Thus, the position of the Imperial Ottoman Bank as a state bank was fully confirmed.
The history of the Imperial Ottoman Bank is closely linked to the economic and social history of the Ottoman Empire. Following the heavy debt burden and the decrease in fiscal revenue due to a bad harvest season, the Ottoman state had to postpone its debt payments. The Imperial Ottoman Bank financed the Ottoman-Russian War of 1877-1878 with advances at its own risk, which worsened the situation. The restructuring of Ottoman debt would only be realized in 1881 with the creation of the Ottoman Public Debt Administration.
In 1886, the re-establishment of the Ottoman Empire’s credit and partial relief from the debt service allowed the bank to increase its market-oriented activities and to develop a branch network throughout the Empire. New products and services of Western capitalism such as securities were introduced into the financial market. Following its modest and volatile beginnings, the Galata Stock Exchange finally attracted a growing number of investors. The bank soon began to offer more new services such as stocks and bonds deposits. Craftsmen, families, and dignitaries invested in securities. The bank would rapidly acquire a substantial portfolio of customers as evidenced by custody cards dated between 1903 and 1918, as well as stocks and bonds, both kept at the Ottoman Bank Archives.
Archival documents on the bank employees suggest the personnel of the bank—a mirror of the Ottoman society itself—was composed of different ethnic and socioeconomic backgrounds. These holdings include the photographic albums of the Head Office personnel and those at the provincial branches. They also include full body portraits requested during the time of their recruitment to enable the management to keep a close watch on the employees. These photographs portray an Empire at the intersection of East and West through garments and other visual details.
At the end of the First World War, the bank could not easily adapt itself to the nationalist agenda. During the war, the bank had survived by negotiating the demands of the Sultan’s government and still following its interest. A compromise was negotiated in 1924, which approved the extension of the bank’s concession, while paving the road to the founding of an independent Turkish central bank. Thus, the Imperial Ottoman Bank became the only institution of the Empire which was able to maintain its “Ottoman” denomination, albeit without its “imperial” attribute. With the establishment of the Central Bank of the Republic of Turkey, the Ottoman Bank abandoned its last prerogatives in 1933. It thus became and remained for a long time the only foreign bank operating in Turkey. Kept at the SALT Research, its archives depict an institution with many dimensions and allow researchers to carry out detailed studies about a world which still remains largely unknown.
Image caption : Beyrouth. Liban. La banque de Syrie. [Nouveau siège de la Banque Ottomane]. 1920