OTTOMAN BANK MUSEUM- A NEW BALANCE AND EPILOGUE

Strained Relations 1923 - 1925

By offering some services to the nationalist forces throughout the War of Independence, the Ottoman Bank had increased its chances of making a smooth transition into the new regime. However, it was clear that the adaptation process would be rough. The institution appeared to certain circles in Ankara as contradictory to the Republic’s foundation due to its foreign capital, its imperial past, and close ties to its non-Muslim clientele and staff. Such elements were bound to create zones of friction with the new power structure emerging in Ankara. A number of articles in the press voiced the animosity felt by these circles. More realistic analyses stressed the need to reach a compromise. Until the state was able to establish its own central bank, Turkey had to work with the Ottoman Bank, which was ready to comply with the new conditions at hand. The bank management believed that yielding to some of the demands would help survive in this new political climate. Although, the bank suffered from occasional political pressure and arbitrary measures, it was evident that the institution's future depended on its capacity to remain active in Turkey.

Agreements with the Ankara Government 1924 - 1925

Despite considerable opposition, the state signed an agreement with the Ottoman Bank. The government was in no position to sacrifice an institution that still constituted one of its most solid financial and economic links to the West. Negotiations between the bank management and bureaucrats in Ankara were finalized on 10 March 1924. According to the agreement, the Ottoman Bank's concession was prolonged, including its privilege of issue, and in return, the bank agreed to extend its financial support to the government, mostly through credits opened to the government and state banks. The greatest change to be undertaken by the bank was increasing the number of its Muslim-Turkish personnel. However, because of the opponents interference, the 1924 National Assembly did not ratify the agreement. Following another year of negotiations, a supplemental agreement was authorized on 22 April 1925, and the bank's status acquired some certainty. Consequently, the bank was able to maintain its status as the state bank, however, as Prime Minister Ismet Pasha confirmed, this was only a temporary solution, until the day a real state bank was established.

Adjustment Efforts 1924 - 1931

Implementing the requirements of the 1925 agreement began by raising the Muslim-Turk population among its staff together with their salaries, and the obligation to use Turkish as the official language instead of French in the bank's accounting and administrative documents. The bank opened Turkish language classes for its non-Turcophone staff, and began systematically favoring Muslims over non-Muslims in its recruitment of Turkish citizens. The results satisfied the Ankara government, since from 1927 to 1933, the proportion of Muslim employees rose from 30% to 60%, and their salaries from 23% to 40%. The bank also saw to the immediate fulfillment of its other duties under the terms of the new agreement. In the fall of 1925, it opened credit lines of 750,000 liras and 2,000,000 liras to İş (Business) and Ziraat (Agriculture) Banks, respectively, thus enabling these institutions to acquire additional funding for their growing operations.