1881 - 1894

OTTOMAN BANK MUSEUM - REDRESSING THE SITUATION

SALT

“A chronological selection from the archives of the Ottoman Bank”

The Ottoman Bank Archives, one of the collections at SALT Research, not only shed light on the history of the Ottoman Bank, formerly the central bank and the treasurer of the Ottoman Empire, but also offer a representation of life during this period. The archives narrate the story of the little-known world of the late Ottoman and Early Republican period in which the bank played a central role.

These archival documents presented in four different exhibitions in the Google Cultural Institute display the significant changes, developments and crises experienced over an 80 year period, from the Ottoman Bank's founding until 1933, when it gained a private bank status.

 Ottoman Bank Museum - 1856-1880 - The Founding Years / The Difficult Times

Ottoman Bank Museum - 1881-1894 - Redressing the Situation

Ottoman Bank Museum - 1895-1894 - The Expansion Period

Ottoman Bank Museum - 1914-1931 - War / A New Balance / Epilogue

1881-1894 REDRESSING THE SITUATION

The financial chaos of the Empire was finally rectified in 1881. Under the leadership of the Ottoman Bank, once again the interests of all the creditors of the Empire were brought together under the Administration of the Ottoman Public Debt. This administration, functioning as a kind of trustee, gained control of a large portion of state revenues in order to guarantee the repayment of the debt. Despite their severity, the conditions made it possible for the Empire to resort once again to foreign loans. The Ottoman Bank won on both sides: on the one hand, it ensured the repayment of its claims, and on the other, since foreign loans were once again on the agenda, it reduced the amount of advance payments made to the Treasury. This was an opportunity for the bank to shift its attention and resources towards commercial banking and establish a growing control over the real markets. Sir Edgar Vincent's appointment as general manager in 1889 brought a new momentum to this process. The new headquarters, built between the years of 1890 and 1892, stood high on the skyline of Galata, the modern business district of Istanbul.

Osman Hamdi Bey's Debts

An important share of the Ottoman Bank's early commercial activity involved individual credit operations. The beneficiaries of such operations were mostly members of the upper crust of society, either by wealth or by social standing. A typical example of the latter case was painter, archaeologist and museum director Osman Hamdi Bey, a prominent figure of the intellectual milieu of the time. In 1879, Osman Hamdi Bey had first obtained a cash advance from the bank. A few years later, he had sent a personal letter to the general manager, requesting another advance of 150 liras for the marriage of his daughter, with the guarantee of his salary vouchers. In 1889, he mortgaged his house for a bank credit of 1,500 liras, and some ten years later, in 1900, he was still indebted to the bank.

Osman Hamdi Bey (1842-1910), wearing the oriental garb he often used to depict himself in one of his oriental(ist) paintings
A promissory note signed by Osman Hamdi Bey for an advance of 80 liras. 23 September, 1879.
A letter by Osman Hamdi Bey addressed to the bank's general manager, Morgan Hugh Foster, and requesting a cash advance of 150 liras.
Osman Hamdi Bey's salary voucher attached to his request for credit in 1883.
Osman Hamdi Bey's mortgage deed for his mansion in Kuruçeşme, on the Bosphorus, as a security for a loan from the bank.
A declaration signed by Osman Hamdi Bey and his mother Fatma Hanım, acknowledging a debt of 220 liras dating back to 1895. 16 August, 1900.

The Administration of the Ottoman Public Debt

Since the Administration of the Six Indirect Taxes established in 1879 had not satisfied the expectations of small bondholders, policy makers of the time tried to find an alternative and more equitable solution. The Ottoman Bank was particularly active in this respect; with Germany’s support, it had started a series of negotiations involving a wider base of creditors. A solution was finally reached on 20 December 1881 with the issuance of the Muharrem Decree. It foresaw the reduction of the Ottoman debt by half along with the establishment of the Administration of the Ottoman Public Debt, to which a sizeable portion of state revenues would be surrendered as a guarantee for debt repayments. Thanks to this new system, the Ottoman Bank was able to disengage itself from making advance payments to the government, and concentrate on real banking activities, while the government itself was able to resume its foreign loan operations, the last of which dated back to 1874.

The new building of the Administration of the Ottoman Public Debt, symbolising the power of this institution, was designed in 1897 by Alexandre Vallauri, architect of the Ottoman Bank head office
A bond from the 4% interest-bearing £4,545,000 1890 loan, launched by the Ottoman Bank and the Public Debt Administration under the name of "Osmaniye 1890" upon insistance of the Minister of Finance, Agop Pasha, following the successfull conversion of the 1881 preferential bonds.
The proportion of advances to the Treasury to total advances by the Ottoman Bank from its foundation to World War I (%). The proportion decreases sharply following the establishment of the Ottoman Public Debt and will no longer exceed 20 % from 1886 on

Halid Ziya Uşaklıgil at the Ottoman Bank

In 1886, at the age of twenty-one, Halid Ziya Bey- son of the prominent Uşakizade family of Izmir and the future novelist Halid Ziya Uşaklıgil-had started working at the Turkish correspondence service of the Izmir branch of the Ottoman Bank. In his memoirs, published much later under the title Kırk Yıl (Forty Years), Halid Ziya Bey would reflect on those years spent at the bank, describing his first day at the office, events he witnessed there, as well as the experience of being the only Turkish employee. In 1892, when the governor of Izmir offered an administrative position to Halid Ziya Bey, he resigned from the bank. Yet, he kept a fond memory of those years, arguing that his own experience should be followed by future generations of Turkish youths. Such was his admiration for this career that he offered to be replaced by his cousin Muammer Bey–the future father-in-law of Mustafa Kemal Atatürk–and much later, made sure that both his sons, Halil Vedad and Ahmed Bülend, would spend at least a few years at the Ottoman Bank.

Halid Ziya Bey at the age of forty, from the inside cover of his autobiographical Kırk Yıl (Forty Years)
Halid Ziya Bey's Personnel File
A copy of Halid Ziya Bey's letter to the branch management, informing them of his resignation. 29 December, 1892
Halid Ziya Bey's recollection of his recruitment by the bank
Halid Ziya Bey's recollection of his feelings as the only Turkish employee of the branch
The perseonnel movement sheet of Uşakizade Mahmud Muammer Bey, Halid Ziya Bey's cousin and Mustafa Kemal Pasha's future father-in-law
Halid Vedad and Ahmed Bülend Uşakizade, sons of Halid Ziya Bey, who entered the bank's service upon their father's recommendation

Sir Edgar Vincent's Management of the Bank

Sir Edgar Vincent, appointed general manager to the Ottoman Bank in 1889, was a perfect choice for furthering the expansion of the bank's commercial activity. He came from Cairo with an aura of commercial genius and with a determination to radically change the bank's marketing policies. Under his management, the bank experimented with novel techniques that varied from offering profitable checking and commercial accounts to widening credit opportunities and opening accounts such as the “Family Savings,” designed to attract a broadening clientele. In this vein, Vincent also paid particular attention to the development of the bank's branch network. However, this dynamic manager's ambition proved to be fatal, when in 1895, a speculative bubble of his own making burst into a stock exchange crisis that nearly swept away the Ottoman Bank itself.

Sir Edgar Vincent (1857-1941), general manager of the Ottoman Bank from 1889 to 1897
A group photograph, dated 1895, of the Adana and Konya branches, both opened in 1889
A group photograph, dated 1895, of the Sofia and Pera branches, opened in 1890 and 1891, respectively
A group photograph, dated 1895, of the Baghdad and Mersin branches, both opened in 1892
A group photograph, dated 1895, of the Ankara branch, opened in 1893 and a view of the branch building.

The New Headquarters

As the Ottoman Bank developed, Sir Edgar Vincent envisioned a new building as the headquarters, matching the institution's recently acquired power. The plans for this new building, located on Voyvoda Street in Galata, were commissioned to Alexandre Vallauri, one of the most outstanding local architects of the time. The world-famous safe manufacturer Samuel Chatwood of London undertook the construction of a ‘steel fort' housing various safe rooms that belonged to the building, which was inaugurated on 27 May 1892. A few days later, the bank's gold reserve was transferred from the bank's former vault in Saint-Pierre Han to its new location. The building's massive structure dominated Galata, symbolizing its distinct position between East and West by employing neo-classical style on its front façade, and neo-orientalist on the rear façade facing the Golden Horn.

A letter sent by Sir Edgar Vincent to the Paris Committee, arguing in favour of his project of a new building. 7 February, 1890
A newspaper report on the shipping of the new building's safe rooms from London. Sabah, 16 May, 1891
A report in the daily Sabah of the inauguration ceremony held at the Ottoman Bank's new head office. 28 May, 1892
The Daily Sabah reports on the transfer of the bank's gold reserve from the old building to the new. 1 June, 1892
A postcard of the period shows the massive presence of the Ottoman Bank building dominating the business district of Galata
The cover of Servet-i Fünun magazine, showing the rear façade of the new Ottoman Bank building. 11 August 1892
The cover of Servet-i Fünun magazine, showing the front façade of the new Ottoman Bank building. 18 August 1892
Credits: Story

Kurgu ve anlatım / Concept and narrative — Edhem Eldem, Boğaziçi Üniversitesi

Credits: All media
The story featured may in some cases have been created by an independent third party and may not always represent the views of the institutions (listed below) who have supplied the content.
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