Act of concession

The year of the Hegira 1279, the 16th of Chaban, or the 4th of February 1863.Between their Highnesses the Grand Vizier, the Minister of Foreign Affairs, the President of the Grand Council, the Minister of Finance, and His Excellency the President of the Court of Accounts, on behalf of the Government of His Imperial Majesty the Sultan, on the one part.And on the other part- 1st. Sir William Clay, Baronet 2d. Mr. Pascoe du Pré Grenfell.All three acting as well on behalf of themselves as in the name of the Ottoman Bank, having its office in London. 4th. Mr. William Richard Drake, acting in his own name. Messrs. John Stewart and Edward Gilbertson represent founders in London of the Imperial Ottoman Bank, in virtue of their full powers lodged at the Imperial Divan, having been passed in due form before William Webb Venn, public notary in London, and Lentaigne notary in Paris. 5th. Messrs. Isaac Pereire, President of the Administrative Council of the Société de Crédit Mobilier, and Casimir Salvador, director of the same society, both acting as well on behalf of themselves as in the name and as directors of the Société Générale de Crédit Mobilier, having its seat in Paris. 6th. Monsieur Émile Pereire, acting as well on behalf of himself as in the name and as director of the Société Générale de Crédit Mobilier Espagnol, having its seat at Madrid. 7th. Monsieur Eugène Pereire, propriétaire, acting on behalf of himself. 8th. Monsieur Philippe Hottinguer, banker, acting in the name of and as one of the partners having the firm's signature of the banking house of Hottinguer and Company, of which the seat is at Paris.9th. Monsieur Ernest Adolphe Fould, banker, acting in the name and as one of the partners having the firm's signature of the banking house established at Paris under the firm of Fould and Company. 10th. Monsieur Charles Mallet, banker, acting in the name and as one of the partners having the firm's signature of the banking house of Mallet Brothers and Company, having its seat in Paris. 11th. Monsieur Pillet-Will, banker, acting in the name and as one of the partners having the firm's signature of the banking house established at Paris under the firm of Pillet-Will and Company. 12th. Monsieur Florentin Achille Baron Seillière, banker at Paris, acting for himself. 13th. Monsieur Antoine Jacob Stern, banker, acting in the name and as having the firm's signature of the banking house of Stern and Company, Paris. 14th. Monsieur Raphael de Ferrari Duke of Galliéra, propriétaire, acting for himself. 15th. Monsieur Hippolyte Guillaume Biesta, director of the Comptoir d'Escompte of Paris, acting on his own behalf. 16th. Monsieur Jean Charles Mussard, banker, acting in the name and as one of the partners having the firm's signature of the banking house established at Paris under the firm of Mussard Audéoud and Company. Messrs. FrédéricGrieninger, Vincent Buffarini, and RodolpheHottinguer represent founders in Paris, by virtue of their full powers passed in due form before Péan de Saint Gilles, a notary of Paris, and also lodged at the Imperial Divan. Messrs. Grieninger and Buffarini, acting also on behalf of themselves. It has been agreed as follows: Art. 1: The Government of His Imperial Majesty the Sultan grants to the aforesaid concessionaires the privilege of establishing a State Bank in the Ottoman Empire. This Bank shall bear the name of the Imperial Ottoman Bank. Art. 2: The Bank shall be under the high protection of His Imperial Majesty the Sultan, and the inspection of his Government, in order that the principles of this concession and the general laws of the Empire may be respected and maintained in all its operations. Art. 3: The Imperial Government shall exercise its control over the Bank by means of a chief commissioner (Nazir) selected by it, who shall be empowered to overlook the working of the institution, without the right to interfere in its administration, and who shall look to the faithful execution of the statutes.The Imperial Government shall also nominate an inspector (Mohassebedji), who shall be specially charged to control the financial operation of the Treasury with the Bank. Art. 4: The capital of the Bank shall for the present be 2,700,000 sterling, or 67,500,000 francs, represented by 135,000 shares of 500 francs, upon which 250 francs, or 33,750,000 francs, shall be paid on the aforesaid Bank commencing operations. The shares, with 250 francs paid, shall be to bearer. This capital shall be capable of increase by means of the creation and issue of new shares. Art. 5: The concession shall be granted for 30 years, to commence at the expiration of the term of six months, fixed by Article 21 for its definite constitution, and one year before the expiration of the concession. The Imperial Government shall have the right to announce its intention of dissolving this Bank, paying to it in full all the sums which it may owe to it, principal and interest at the expiration of this concession. The Bank engages on its part to liquidate all its debts and to retire all its notes in circulation, by paying them in coin of proper fineness. Art. 6: The seat of the Bank shall be at Constantinople. With the authority of the Government, it shall establish as many branch establishments and agencies as it may judge convenient. Art. 7: The Bank shall be managed at Constantinople by a board of directors of two or three members and by and administrative council of three members. Both shall be nominated by a committee, chosen by the founders at London and Paris. This committee shall have full power conformably with the statutes of guiding, controlling, and overlooking the operations of the Bank. At the expiration of the first five years the general meeting of shareholders, after previous understanding with the Imperial Government, shall have the right of modifying and reconstructing the administration conformably with the statutes. Art. 8: The Bank shall have the right of making advances upon share, bills, warrants, bills of lading, and upon deposit of goods under the control and superintendence of the Bank, of discounting commercial paper, of receiving deposits, of buying and selling bills, of undertaking the purchase and sale of goods on account of third parties, and, in short, of performing every operation pertaining to the function of a banking institution. Art. 9: The Bank shall have the exclusive privilege of issuing notes to bearer repayable on demand; their payment shall only be demandable at the place where they are issued. Nevertheless, the notes of the branch establishments may be repaid at Constantinople, when the administration of the at the branch establishments with the authority of the administration and have legal currency in the districts in which they are issued, and where the branches are established, everywhere else they shall be received in the public Treasury offices after coming to an understanding with the Government on that subject. Art. 10: The notes of the Bank shall be in the Turkish language. They shall not be issued of any amount less than 200 piastres without the consent of the Government. They shall bear the seal of the chief commissioner nominated by the Imperial Government, and be signed by an administrator especially appointed by the committee of control, and by the principal cashier or the controller of the establishment from which they shall be issued. Art. 11: The Bank for the space of two years from the date of its opening shall keep a reserve in hand equal in amount to at least half its notes in circulation, and after that period of two years has elapsed to the amount at least of one third. Art. 12. The Government undertakes to issue no kind of paper money during the period of this concession, and to authorise the establishment of no other Bank or establishment having such a privilege. Art. 13: The Bank shall be charged at Constantinople with all the Treasury operation of the Government, that is to say, of receiving on the one part all the revenues of the Empire coming into the Imperial Treasury offices in that capital, and on the other part of paying the drafts drawn upon it by the minister of finance. It may also be charged at Smyrna, Trébizonde, Beyrout and Salonica, where it may, after obtaining the concession establish branches, with receiving the revenues which shall be assigned to it by the minister of finance in these eyalets (provinces). The Government shall also intrust to it the same service in the other place where it may establish branches at a later period.The Bank shall discount the serghis which the minister of finance alone shall issue. These serghis shall be payable at a fixed date, not exceeding ninety day, and shall bear interest not exceeding six per cent. per annum. The Bank shall cover their value when they shall fall due by the receipts through state revenues, and should these revenues prove insufficient shall receive the remainder from the credit of 500,000 l. sterling, which is open to the Government by the 16th. article herein-after contained.Every month the minister of finance shall fix the total amount of serghis at a fixed date discountable by the Bank, which he shall put into circulation, but he must not issue them except after having come to a previous understanding with the Bank. The Bank shall in no case be bound by the issue of these serghis beyond the limits of the credit of 500,000 l. sterling and the sums it shall have in hand on account of the Government. Art. 14: The Bank shall be specially charged with the payment of the interest and sinking fund of the internal loan and of the transmission of funds for the payment of interest and of the sinking fund of the external loan. In each case the Bank shall receive a commission of one per cent. Council.Finance.