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The Origins of Modern Banking in the Levant: The Branch Network of the Imperial Ottoman Bank, 1890–1914

Published online by Cambridge University Press:  23 April 2009

Christopher Clay
Christopher Clay
Affiliation:
Department of Historical Studies, University of Bristol, 13-15 Woodland Road, Bristol BS8 1TB, U.K.
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Extract

Historically, the development of modern banking has been an important component of economic change, but it has not always been so clear whether it has been a factor in the genesis of growth or a response to and a consequence of it. In the case of the Ottoman Empire, corporate banks—wholly or partly financed with Western capital—had established themselves in strength in Istanbul after the Crimean War, especially in the decade 1863–72 when no less than eight opened there. All, however, concentrated to varying degrees on meeting the financial needs of the government at a time when the Porte was borrowing almost continuously, both short-term and long-term, a fact that explains the eclipse of several of them around the time of the bankruptcy of 1875.

Type
Articles
Information
International Journal of Middle East Studies , Volume 26 , Issue 4 , November 1994 , pp. 589 - 614
Copyright
Copyright © Cambridge University Press 1994

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References

NOTES

1 Velay, A. du, Essai sur l'histoire financière de la Turquie (Paris, 1903), 175–204.Google Scholar The eight were the Banque Impéiiale Ottomane, Société Générate de l'Empire Ottomane, Crédit Général Ottoman, Banque de Constantinople, Banque Austro-Ottomane, Crédit Austro-Turque, Société Ottomane de Change et des Valeurs, and the Crédit Lyonnais.

2 Farley, J. Lewis, Banking in Turkey (London, 1863)Google Scholar.

3 Annuaire orientate de commerce, published yearly from 1880 (Istanbul, 1913).Google Scholar See also Figure 1 and Table 2.

4 The research upon which this article is based is part of a larger project on the history of the BIO, based upon its surviving archives, access to which has been by the kind permission of Compagnie Financière Ottomane S. A. (formerly the Ottoman Bank). The BIO's Paris archives are now mostly in the Archives Nationales in Paris (AN, 207/AQ), its London archives in the Guildhall Library (MSS. 23,961–24,041)Google Scholar, and its Istanbul archives in the custody of the Osmanli Bankasi at the Bulgur Palas (BPA).

5 Throughout this article U.K. £ represents pounds sterling, T £ Turkish pounds. The value of thelatter was stable over the period: it was worth approximately U.K. £0.9.

6 Existing accounts of the BIO are by Biliotti, A., La Banque Impériale Ottomane (Paris, 1909)Google Scholar; Velay, A. du, Histoire financère, 175–96Google Scholar; Baster, A. S. J., The International Banks (1935, repr. New York, 1977), 78–112Google Scholar; Thobie, J., Inérêts et impérialisme français dans I'empire Ottoman 1895–1914 (Paris, 1977), 81–89, 449–59,Google Scholar and passim; Autheman, A., History of the Ottoman Bank (Istanbul [?], 1988)Google Scholar; and Clay, C. G. A., “The Imperial Ottoman Bank in the Later Nineteenth Century: A Multinational ‘National’ Bank?” in Banks as Multinationals, ed. Jones, G. (London, 1990), 142–59Google Scholar.

7 The terms “branches” and “agencies” are used interchangeably throughout this article.

8 AN, 207 AQ/167, annual reports for 1863–1871Google Scholar.

9 AN, 207 AQ/1, “acte de concession” and “réglement” of 18 05 1874 and 17 02 1875Google Scholar.

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11 See pp. 596–98.

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13 Okyar, , “A New Look,” 46Google Scholar; Quataert, , Ottoman Manufacturing, 2Google Scholar.

14 Pamuk, , Ottoman Empire and European Capitalism, 149Google Scholar, Table AI.I.

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16 There seems to be little literature available on the financing of Ottoman trade in the late 19th and early 20th centuries, but for a slightly earlier period, see Kasaba, R., The Ottoman Empire and the World Economy in the Nineteenth Century (Albany, N.Y., 1988), 75 et seq., and chap. 4Google Scholar.

17 AN, 207 AQ/118, 119, direction générale to Paris Committee, 4 11 1903 and 16 08 1905Google Scholar (encl. reports on Eskişehir), 17 July 1905 (encl. report on Kütahya), and 15 April 1908 (end. Report on Kayseri).

18 BPA, Proés verbaux du comité de direction (PVCD), 15 07 1898Google Scholar, 7 August 1902, 24 June 1903, and 17 July 1905. AN, 207 AQ/119, directiongéiérale to Paris Committee, 3 07 1905Google Scholar (encl. report on Erzurum), 17 July 1905 (see n. 17), and 2 August 1909 (encl. report on Tekirdağ).

19 Annuaire orientate de commerce, esp. 1889/1990, 1896, 1908, and 1912Google Scholar. This publication provides an overview of the modern banking facilities available in the Levant throughout the period; see also Thobie, , Intérêts et impérialisme 459–68Google Scholar; Diouritch, G., L'Expansion des banques allemandes à I'étranger (Paris and Berlin, 1909), 701–34Google Scholar.

20 See pp. 602–3.

21 AN, 207 AQ/118, direction générale to Paris Committee, 22 04 1904Google Scholar (and encl.), 30 June 1904, and 31 March 1905 (and encl.).

22 AN, 207 AQ/119, directiong énérale to Paris Committee, 11 March 1905Google Scholar; BPA, PVCD 8 March and 17 July 1905; Comptes rendus hebdomadaires des séances du comité de direction (CRH), 12–1807 1907Google Scholar (report on Mosul); lettres à Londres, 17 04 1904Google Scholar; lettres reçues (Paris), 19 05 1906Google Scholar.

23 AN, 207 AQ/167, annual reports for 1864–1872Google Scholar.

24 The BIO also employed a few Jews but never, it seems, Muslims, except as interpreters or in subordinate capacities.

25 AN, 207 AQ/1, “Ètat du personnel supérieur de la Banque Impériale Ottomane,” undated but ca. 1875Google Scholar.

26 Volumes marked “Registre du personnel. Agences. A,” and “Ètat du personnel,” for 1902 and 1914Google Scholar. These were formerly part of the BIO archives in the Bulgur Palas but were apparently destroyed in 1986: notes in author's possessionGoogle Scholar.

27 For an instance where provision of staff was seen as a constraint, see BPA, lettres à Londres, 17 07 1905Google Scholar.

28 The Imperial Bank of Persia, for instance, did not employ local staff in responsible positions at this time; Jones, G., Banking and Empire in Iran (Cambridge, Eng., 1986), 34, 139, 143Google Scholar.

29 See p. 607.

30 The establishments of the BIO in 1889 were (besides head office): in Egypt, Alexandria, Cairo, and Port Said; in Cyprus, Larnaca, Limassol, and Nicosia; in Bulgaria, Philippopoli (Plovdiv); in the empire proper, Stambul, Salonica, Edirne, Izmir, Aydīn (s), Manisa (s), Antalya, Bursa, Nazilli (s), Konya, Adana, Beirut, and Damascus (those marked ‘s’ were subagencies; they were dependent on full branches and did not perform the complete range of banking functions).

31 AN, 207 AQ/169, 170, annual reports for 1885–88 and 1890Google Scholar.

32 On Sir Edgar Vincent, see Clay, “The Imperial Ottoman Bank.”

33 AN, 207 AQ/187, Vincent, to Mallet, 3 12 1889Google Scholar and encl.

34 BPA, Banque Impériale Ottomane. Gouvernement Impérial Ottoman. Controls demprunts et davances (le receuil, n.d.), 9–12Google Scholar

35 AN, 207 AQ/113, Fuente, La to Paris Committee, 31 07 1891Google Scholar.

36 AN, 207 AQ/170, annual report for 1892Google Scholar.

37 AN, 207 AQ/5, “Étude sur le rôle de Banque d'État…,” part 2, sec. 3, n.

38 AN; 207 AQ/170, annual report for 1892Google Scholar.

39 AN, 207 AQ/5, “Étude sur le rôle de Banque d'État.…,” part 2, sec. 7.

40 AN, 207 AQ/171–2, annual reports for 1892–1994Google Scholar, and for first semester of 1895Google Scholar.

41 The Levant Herald, 4 11 1895Google Scholar.

42 AN, 207 AQ/172, annual report for 1895Google Scholar.

43 BPA, CRH, 21–26 August and 4–10 12 1897Google Scholar; AN, 207 AQ/115, direction générate to Paris Committee, 6 01 and 16 February 1898Google Scholar; Compagnie Financiere Ottomane (Paris), procès verbaux du comité de Paris, 11 02 1898Google Scholar.

44 AN, 207 AQ/115, direction générate to Paris Committee, 1 03 1898 (encl. summary of new commercial code)Google Scholar; 207 AQ/173, annual report for 1898Google Scholar; BPA, lettres à Londres, 9 02 1899Google Scholar.

45 AN, 207 AQ/172 et seq., annual reports; Pamuk, , Ottoman Empire and European Capitalism, 34–36Google Scholar.

46 BPA, CRH, 20–26 11 1897Google Scholar.

47 Milgrim, M. R., “An Overlooked Problem in Turkish-Russian Relations: The 1878 War Indemnity,” International Journal of Middle East Studies 9 (1978): 519–37CrossRefGoogle Scholar.

48 AN, 207 AQ/116, direction générale to Paris Committee, 9 03 and 29 April 1899Google Scholar; 207 AQ/173, annual report for 1899Google Scholar, and for first semester of 1900Google Scholar; BPA, PVCD, 26 04 1899Google Scholar.

49 AN, 207 AQ/175, annual report for 1903Google Scholar; BPA, lettres à Paris, 27 02 1903Google Scholar; lettres reçues (Paris), 14 03 1903Google Scholar; PVCD, 1 04 1903Google Scholar.

50 BPA, PVCD, 15 07 1898, 12Google Scholar and 20 04 1900Google Scholar, 5 07 1900Google Scholar, 5 02 1901Google Scholar, and 7 08 1902Google Scholar; lettres aux agences, 18 07 1901Google Scholar.

51 BPA, PVCD, 28 07 and 7 08. 1899Google Scholar.

52 Ibid., 21 February, 7 April, 9 August, and 13 10 1899Google Scholar; AN, 207 AQ/174, annual report for 1900Google Scholar.

53 BPA, lettres à Paris, 2 06 1900Google Scholar; lettres reçues (London), 13 06 1900Google Scholar; PVCD, 16 07 1900Google Scholar; AN, 207 AQ/116, direction géiérale to Paris Committee, 2 06 1900Google Scholar.

54 Pamuk, Ottoman Empire and European Capitalism, Table AM.

55 BPA, lettres aux agences, 18 07 1901Google Scholar.

56 AN, 207 AQ/175, annual report for 1902Google Scholar.

57 See, for instance, the response of the direction généfrale to proposals for new establishments at Mudanya, Akşehir, Giresun, Kavalla, Malatya, Dedeağaç, Vathy, Basra, and Eskiş.ehir: BPA, PVCD, 29 May, 15 and 24 June, 15 October, and 27 11 1903Google Scholar; lettres à Londres, 2 12 1903,Google Scholar 25 January, and 5 03 1904Google Scholar; AN, 207 AQ/117, direction générale to Paris Committee, 4 12 and report enclosedGoogle Scholar.

58 BPA, lettres à Londres, 30 06 1904Google Scholar.

59 AN, 207 AQ/175, annual report for 1903Google Scholar.

60 BPA, CRH, 1896–1911; this series contains a complete series of yearly and half-yearly agency profits until World War I.

61 BPA, PVCD, 29 10 1903Google Scholar and 16 10 1905Google Scholar.

62 AN, 207 AQ/117, 118, direction générate to Paris Committee, 2 12 1903Google Scholar, 4 March and 22 04 1904Google Scholar (and encl.), and report on Tripoli dated 25 04 1904Google Scholar; BPA, PVCD, 27 02 1901Google Scholar, 15 October and 3 11 1903Google Scholar, 20 and 25 06 1904Google Scholar.

63 AN, 207 AQ/118, direction générale to Paris Committee, 17 03 and 4 04 1904Google Scholar (and ends, to both); BPA, PVCD, 7 08 1902Google Scholar, 24 06 1903Google Scholar, 4 March, 20 June, 14 September and 5 10 1904Google Scholar, 23 February, 8 and 10 March, and 17 07 1905Google Scholar, 11 09 1906Google Scholar; CRH, 12–18 01 1907Google Scholar (report on Mosul); and lettres à Londres, 17 04 1906Google Scholar.

64 AN, 207 AQ/118, 119, direction générate to Paris Committee, 30 06 1904Google Scholar and 21 12 1905Google Scholar (and encl.).

65 AN, 207 AQ/176, annual report for 1905Google Scholar.

66 AN, 207 AQ/119, 120, direction générate to Paris Committee, 3 07 1905Google Scholar (and encl.), 17 07 1905Google Scholar and 12 01 1906Google Scholar.

67 AN, 207 AQ/177, report for 1907Google Scholar.

68 BPA, PVCD, 25 February and 31 03 1908Google Scholar.

69 AN, 207 AQ/121, direction générale to Paris Committee, 12 02 1908Google Scholar (recte 1909).

70 Ibid. (encl. report on Gömülcine); ibid., 2 August 1909 (and ends.) and 22 01 1910Google Scholar. BPA, PVCD, 31 07 1909Google Scholar.

71 AN, 207 AQ/122, direction générale to Paris Committee, 22 01 1910Google Scholar (and encl.).

72 See n. 60.

73 AN, 207 AQ/122, direction générale to Paris Committee, 22 01 1910Google Scholar (and encl.).

74 For two examples, out of many, see official requests that the bank should open in Niğde, Isparta, Burdur, and Nevşehir (1910); and in Bolu, Gerede, Bartin, Zonguldak, Tokat, and Amasya (1911): BPA, PVCD, 21 02 1910Google Scholar, 19 06 1911Google Scholar, and 27 05 1913Google Scholar.

75 AN, 207 AQ/121, direction générale to Paris Committee, 30 05 1908Google Scholar (encl. report on Benghazi); BPA, PVCD, 31 07 1909Google Scholar; lettres à Londres, 13 02 1909Google Scholar.

76 BPA, PVCD, 12 04 1910Google Scholar and 6 10 1913Google Scholar.

77 Ibid., 18 and 23 01 1911Google Scholar; lettres à divers, 14 02 1911Google Scholar; Banque Impériale Ottomane: Gouvernement Impérial Ottoman. Contrats demprunts et d'avances (3e receuil, n.d.), convention of 1- 14 02 1911Google Scholar.

78 BPA, PVCD, 23 10 1905Google Scholar, 16 and 20 August, and 3 12 1906Google Scholar, 25 03 1907Google Scholar, 24 11 1909Google Scholar; lettres à Londres, 15 04 1908Google Scholar.

79 AN, 207 AQ/123, direction générale to Paris Committee, 29 03 1912Google Scholar; BPA, PVCD, 20 February and 19 03 1912Google Scholar, 1 and 25 10 1913Google Scholar; lettres reçues (Paris), 12 April and 15 06 1912Google Scholar.

80 BPA, PVCD, 29 March, 5 and 27 07 1911, 1 May, 5 June, 3 SeptemberGoogle Scholar, and 24 12 1912, 23 April and 29 May 1913Google Scholar.

81 BPA, CRH, 20–25 05 1912Google Scholar; lettres à Paris et Londres, 28 February and 11 07 1912Google Scholar.

82 CRH, 15 September and 16 12 1913, 26 January 1914Google Scholar.

83 CRH, 23 02 1914Google Scholar; lettres reçues (Paris), 20 03 1914Google Scholar.

84 BPA, PVCD, 26 January, 25 February, 3 March, 22 May, 24 June and 13 July.

85 Ibid., 26 August 1914.

86 AN, 207/177, 178, annual reports for 1907 and 1908Google Scholar; BPA, annual reports for 1909 and 1910 (destroyed in 1986?); Compagnie Financière Ottomane, Paris, cave 19, box 87, dossier relating to head office 1910–12, letter to Barry, 23 04 1912 and enclGoogle Scholar.

87 Annuaire orientale de commerce, 1889/1990, 1908, 1912, and 1913Google Scholar. Statistics compiled from this source are undoubtedly flawed and incomplete, but are nevertheless suggestive. In 1889/90, 302 “bankers” and ”money changers” are listed in 49 different towns, whereas by 1913 around 760 in 121 different places are named.

88 AN, 207 AQ/120, direction générate to Paris Committee, 27 08 1907Google Scholar; BPA, lettres à Paris et Londres, 7 05 1914 and “note” enclosedGoogle Scholar.

89 Pamuk, Ottoman Empire and European Capitalism, Table AI.I.