OTTOMAN BANK MUSEUM - REDRESSING THE SITUATION

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.

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.

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.

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.

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.