Agreement

In the year twelve hundred and ninety-two, on the the eleventh of the month of Muharrem of the Muslim calendar or the fifth/seventeenth of February, eighteen hundred and seventy five, between His Highness Hussein Avni Pasha, Grand Vizier and Chief Commander of the Imperial Army, and his Excellency Yusuf Pasha, Minister of Finance of His Imperial Majesty the Sultan, acting in the name and on behalf of the Ottoman government,and on the other, Messieurs H. Foster, Director General, and Émile Deveaux, Director of the Imperial Ottoman Bank, acting in the name and on behalf of the said Bank, it has been agreed and convened that:given the agreement passed ad referendum in Paris, on the eighteenth of May, eighteen hundred and seventy-four, between the Imperial Government, represented by his Excellency Sadık Pasha and the Imperial Ottoman Bank, represented by Mr. Charles Mallet, President of the Paris Committee and Count Adrien de Germiny, administrator; considering that the principles of this agreement have been ratified by the Imperial Government and approved by the general assembly of shareholders of the Imperial Ottoman Bank on the twelfth and thirty first of August, eighteen hundred and seventy-four the act of concession of the Imperial Ottoman Bank is revised and modified in the following manner: Article 3: The Imperial Ottoman government shall exercise its high surveillance on the Bank through a High Commissioner appointed by itself, with the prior consent of the Bank's board of directors.The High Commissioner shall have the right to be informed about the management of the Bank and to ensure that the Act of Concession, the statutes and the special regulations established by the Imperial Government and the Bank to this day are strictly implemented.He shall have the right to be present at the general meetings as well as at the meetings of the board of directors in Constantinople, and to oppose any resolution he sees as violating or transgressing the afore-mentioned dispositions of the Act of Concession, statutes and regulations.In the case of an opposition, the resolution will not be applicable until a legal and regular decision declares the opposition irrelevant. The Imperial High Commissioner shall have the right to exercise control over the issue of banknotes; he shall ensure the strict observation of the dispositions of the concession decree and of the statutes related to it.The High Commissioner shall sign or affix his seal on each banknote.He shall be in charge of monitoring the relations of the Bank with the Imperial Treasury. He shall not interfere in the administration and management of the Bank.The Imperial Government shall also appoint an a ccountant who will be specifically entrusted with the control of financial operations between the Treasury and the Bank.Article 4: The Bank's capital is raised to £ 10,000,000 (ten million sterling). Accordingly, 297,500 (two hundred and ninety-seven thousand and five hundred) new shares each worth twenty pounds sterling-shall be created. A sum of £ 10 shall be drawn on each new share. The newly issued shares shall be to the bearer, as the previous ones.Article 5. The Bank's concession and privilege period is prolonged by twenty years.Article 6: The Bank will be legally established in Constantinople. The Ottoman Bank shall act in accordance with the Ottoman Government to set up branches in all the provincial capitals located in the Ottoman domains and the necessary land for these branches will be allocated free of charge by the Government to the Bank. To the same effect, and in agreement with the Government, the Ottoman Bank, with a view to providing for its own needs and acting in accordance with the Treasury‘s interests, shall also be able to set up agencies, counters and liaison offices in other cities of the Ottoman Empire, and also with a view to providing for its own needs and acting in accordance with the Treasury's interests, shall be able to set up branches, agencies, counters and liaison offices in Paris, London, Vienna and other central places in Europe.Article 7: The Bank shall be administered in Constantinople by a board of directors made up of seven members, including four directors appointed by the Bank's committees in Europe, and three administrators chosen among bankers, merchants or capitalists of Constantinople. These three administrators are to be appointed by the committees in agreement with the Government.One of the directors shall receive the title of Director-General and shall act as chairman of the board of directors.The committees established in Europe will have full power to manage and monitor the Bank's operations.The rights and responsibilities of the board of directors in Constantinople shall be defined by the European committees, on the basis of the provisions determined by the domestic regulations. The Bank shall be fully represented in the budget commission by one of its administrators or directors. Article 13: The Bank shall fulfill the duty of Treasurer and Paymaster of the Empire, in conformity with the dispositions of the special regulations established on this day.Every year, at least one month before the 1/13 March, the Bank will receive a detailed copy of the budget for the following accounting period.The government pledges its word to transfer all of the Empire's common revenues of any kind, title or form, and however they may be perceived, to the Bank's coffers, without the intervention of any other financial establishment, in Constantinople as in the provinces, according to the dispositions of the above-mentioned special regulations.The government commits itself to take all the necessary measures to ensure that the totality of the revenues of the Empire shall be transferred to the Bank's coffers in accordance with the special regulations mentioned above.The bank shall be entrusted with the payment of all public expenditures made under any title and of any kind, be it inside the Empire or abroad, within the limits of budget forecasts and resources, and in conformity with the dispositions of the above-mentioned regulations, without the intervention of any other financial establishment, except, however, the vested interests of other parties for the servicing of different loans, but with the clear understanding that the transfer of the sums to these parties shall take place through its agency. It shall not be possible to go beyond these forecasts, except in urgent or extraordinary cases mentioned in the fundamental regulations of the budget, a copy of which shall be delivered to the Bank.The Bank shall ensure that the public debt service is carried out by deducting the funds necessary for this task from the monies it calls in. Article 14: The Bank shall be entrusted on behalf of the State, regarding anynegotiations, in Turkey or abroad, without the intervention of any other financial establishments of Treasury bonds and other Treasury securities that might be issued by the government to compensate for delays in the collection of revenues. An annual financial regulation, published together with the budget shall fix the amount of Treasury bonds and other Treasury securities that will be possible to issue. Only the Minister of Finance shall be entitled to issue these bonds. If, as specified in the preceding article, an urgent and extraordinary need should occur outside the expenditures provided for in the budget, or if deficits should occur due to deficiencies or miscounts during collection, this would be taken care of through the extension of extraordinary budgetary credits. The Bank shall not have the possibility to oppose these credits, however, they shall have to be approved by the Budget Commission, and covered by the attribution of new and special resources. These credits, which should never result in carrying the Bank's advances beyond the maximum amount declared in Art. 16, will have to be raised by the bank on behalf of the State, either through a supplementary issue of Treasury bonds or other Treasury securities authorised by a special law-which will have been made public or through the issue of a public loan, also authorised by a law. The Bank shall raise a ½ per cent. commission on the totality of its encashments, be they in cash, in spending documents as well as on any payments and fund transfers realised for the State, directly or through its correspondents. This commission rate will be modifiable, with the common accord of the Government and of the Bank, after a six-year period beginning with the signature of the present document. For each of the ten branches which have already been or will be set up by the Ottoman Bank, a fixed annual sum of five thousand liras has been allocated as an indemnity. And no compensation whatsoever shall be paid for any of the branches to be established by the Ottoman Bank after the setting up of the previously mentioned ones. In case the ½ per cent. commission mentioned above should cover a sum superior to £50,000,000 (fifty million) within a year, be it in receipts or in expenditure, the indemnity allotted for the first ten local branches would be suspended for that year, and the government would have nothing more to pay under that heading. A 1 per cent. commission shall also be allotted to the Bank in the amount of Treasury bonds and other securities it will have negotiated on behalf of the State. It is clearly understood that the above mentioned ½ per cent. commission shall not be charged on the receipts of the earnings made from these securities. Article 15. The Bank shall act as the financial agent of the government, both domestically and abroad. This should not impede the Government from addressing other banking or financial institutions for the issuance of public loans. However, under equal conditions, the Bank shall benefit from a preferential status over all other banking or financial institutions for any negotiation or issuance of Treasury bonds or other securities, be it by way of discount or final bid. It remains understood however that negotiations held on behalf of the State over all these securities shall be lead by the Bank, as specified in Art. 14.In order to encourage the propagation of banknotes, both in the capital and in the provinces, the government shall create a country-wide metallic currency, while withdrawing and demonetising all base money (beshliks etc.) within a period of three years. Article 16. The Bank shall extend current account advances to the Government on account of Treasury revenues to the amount of £ 2,700,000 (two million seven hundred thousand) at a rate of eight per cent. Over the average discount rate of the Banque de France and of the Bank of England. As guarantee for the reimbursement of both the capital and the interest of these advances, the Government shall pay the Bank a sum of seven million nominal pounds sterling in 5 per cent. General Debt bonds. In case of breaches of these engagements and of liquidation, the Bank will have the right to realise its funded debts securities, following a one-month formal notice, unless the Government prefers in the mean time to free itself from its engagements to the Bank in cash. In so far as the credit amount and the interest rate are concerned, the present article shall be subject to revision during the six-year period beginning with the date of signature of the present document. The Imperial Ottoman Bank is from now on authorised to introduce all the corrections to its statutes, including the present revision and modifications. All the provisions of the, Act of Concession dated 4 February 1863, which are not specifically abrogated or modified in the present additional act, shall remain effective. Two copies made in Constantinople, on the day, month and year specified above.(Signed)HUSSEIN AVNI.(Signed)YUSSUF ZIA.(Signed)M. H. FOSTER.(Signed)E.DEVEAUX.