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 five 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 - 1914-1920 – War and Crisis
Ottoman Bank Museum - 1921-1931 - A New Balance & Epilogue
1914-1920 WAR AND CRISIS
Although, the Imperial Ottoman Bank's financial and economic power had reached its peak by 1910, the political and ideological changes of the time were a constant threat to its standing. Particularly, the newly growing ideology of nationalism led to a serious questioning of the bank's position and allegiances. Projects were being developed to replace this strange and hybrid institution with national banks. Yet, what really struck a serious blow to the bank was World War I. With its shareholders and the empire it operated under standing on opposite sides of the conflict, the bank was caught between two fronts. During the four years of warfare, the Ottoman Bank found itself almost in the position of a hostage, and under the effect of the economic crisis and extraordinary war conditions, its operations nearly came to a halt. Although, the Ottoman defeat brought the situation back to normal in some ways, it was obvious that the bank had lost its most valuable asset: the territories it had flourished in.
A Bank of Questionable Allegiances 1908 - 1914
The Second Constitution, proclaimed in 1908, and the ideological turmoil it triggered brought about a questioning of the Ottoman Bank's identity. The bank had initially thought that the Constitution would bring political and financial stability to the Empire and had pressured the London and Paris committees to obtain support for the Young Turk regime. Yet, in the eyes of nationalist circles, the notion of a state bank run by British and French interests was perceived as an unacceptable contradiction. Moreover, the Young Turks were more and more drawn into the sphere of German influence. By 1914, Finance Minister Cavid Bey, one of the moderate members of the government, was probably one of the last politicians who remained in favor of the Ottoman Bank.
The Divorce of World War 1914 - 1915
The tension between the Ottoman Bank and the government turned into a crisis when the Ottoman Empire entered the world conflict in November 1914. Upon the refusal by the London and Paris committees to satisfy the demand made by the government for an advance payment in the amount of 2,000,000 liras on 31 December 1914, Talat Bey sent an ultimatum to the bank's general manager Nias and his deputy Steeg. The minister demanded that all French and British managers of the bank resign from their offices. There was little the management could do, therefore, French and British officials withdrew and transferred the bank's administration to managers of Ottoman nationality. The compliance with ministerial orders and the continuing support from Cavid Bey saved the bank from confiscation; however, it was not difficult to imagine the conditions under which the bank would be allowed to remain in business. In fact, a similar situation awaited the bank on the other side of the conflict. A license issued by the British government had limited the bank's activities in accordance with the reduced status of “friendly” countries, banning it from any transaction with its branches in the Ottoman Empire. Virtually split into two, and stripped from its former power, the Ottoman Bank could only hope to survive the war.
The Bank During the War 1914-1918
One of the greatest difficulties the bank faced during the war was preserving the gold stocks despite the pressing demands of the army. Believing that the Ottoman Bank was not fulfilling its duties as a state bank, most government officials put an increasing pressure on its administration. In the fall of 1918, when the Ottoman Empire was finally defeated and occupied by Allied forces, life was back to normal for the Ottoman Bank. The exiled managers returned and reclaimed the administration of the bank. Nevertheless, it was obvious to all that the situation had not regained its former stability. Taking into consideration the possible success of the resistance movement in Anatolia, the bank's management took precaution by making some advances to the Kemalist troops, thus trying to act with as much foresight as possible with regards to the uncertain future of the country.
Paper Money, Again 1915-1918
The Ottoman government had hastily entered the war and was unprepared to meet the financial burden of the war effort. As it became clear that the Ottoman Bank could not, or in better terms, would not offer its support, once again, issuing paper money appeared to be the only solution. The Ottoman Bank surrendered its privilege to the government. The first series of Treasury bills were printed in July 1915. As a precaution, the first series was backed by its gold equivalent, however, from the second series on, this measure was abandoned. There followed an ever-increasing quantity of issue of Treasury bills in several denominations. The notes were printed in Germany and were of a mediocre quality, and when coupled with the chaotic situation of the financial market, it encouraged all sorts of fraud and forgery. Until the end of war, a depreciation of up to 80% of the currency against gold was taken place.
Kurgu ve anlatım / Concept and narrative — Edhem Eldem, Boğaziçi Üniversitesi