Excerpts about the Ottoman Bank and Armenians– 1

-The following can be unequivocally said about the Ottoman Bank:

1. The Ottoman Bank was Ottoman by name only.  Greeks and Armenians used it as a metaphor, being Ottoman by name only but otherwise disfranchised. It was a European conglomerate. 

2. The Ottoman Bank put an end to the glorious era of the Armenian Amiras, the rothschilds of the Ottoman Empire who oversaw the financing of the Sultan’s Ottoman Empire.

3. And, quoting Wikipedia, “On Wednesday, 26 August 1896, 13:00 o'clock, 26 Armenians from the Armenian Revolutionary Federation, armed with pistols and grenades and led by Papken Siuni, attacked and occupied the Ottoman Bank of Constantinople. The men entered the great hall of the Ottoman Bank armed with revolvers, daggers and dynamite bombs.”

 During my early youth, as member of Papken Siuni Badanegan (Youth) Myoutyoun (Association), every year, may be more than once, we had a debate whether Papken Siuni occupation of the Ottoman Bank was justified or it was a reckless act. None of us wanted to be in the team that debated against the occupation. Those who did were assigned to that team by the ARF Zavarian Student Association member who oversaw our group.

I have put together the many excerpts about the Ottoman Bank and Armenians dealing with the Ottoman bank,  Mano Chil posted on his Facebook page. They give an interesting and fascinating insight about the Ottoman Armenian relations with the Ottoman Bank and and the banking of the Ottoman Empire. They are reproduced it here randomly.   Vahe H Apelian

The Ottoman Bank 

Administering the Ottoman Empire before the establishment of the Ottoman Bank.

I quote: “The Amiras were a powerful class of Armenian commercial, industrial, and professional elites in the Ottoman capital between the 18th and 19th centuries. They ran the treasury, mint and armaments factories, built palaces, mosques and public buildings, and operated many monopolies. Because of their unique position, they had good relations with Ottoman Sultans and administrators, and played an important role in the development of the Armenian and Armenian Catholic millets.” (The Amiras: Lord of Ottoman Empire, Pascal Carmont).

The American missionary Rev. Williiam Goodell, claims he was the first American missionary to set foot in the Ottoman Empire in 1823. He played a decisive role in the establishemen to of the Armenian Evangelical community in Constantinopel in 1846. He said the following about the Armenians of the Ottoman Empire. 

He wrote the following in his memoir: “The Armenians were an enterprising people, and the great wealth of the bankers, who were nearly all Armenians, made them very influential throughout the empire, even with the Turkish officials, who were largely dependent upon them for pecuniary advances and assistance. The various connections of this people with different parts of the country, and the influence which they were in a position to exert, in promoting the spread of the Gospel in Turkey, made it exceedingly desirable that they should embrace the truth."

The Ottoman Bank put the Amiras out of commission. Much like East India Company snatched the far East trade from the Armenian khojas, the Ottoman Bank, a European conglomerate, snatched the administration of the Ottoman Empire away from the Amiras, who were mostly Armenians from Agn. See the link below.

Vahe H Apelian

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Did the Ottoman Bank ruin the lives of Armenian money changers? ( Mano Chil posted on July 2, 2022)

Abraham Pasha, originally Abraham Eramyan, (Istanbul, 1833 - Istanbul, 1918) was an Ottoman civil servant and diplomat of Armenian origin.

The son of an Armenian banker family, he was a close friend of Sultan Abdülaziz. He spoke fluently Turkish, Arabic and French, and was a prominent figure of Pera high society in Istanbul.

The mansion built by Abraham Pasha in Beyoğlu and rented to the Cercle d'Orient Club and the Kocataş Mansion in Büyükdere are among the most magnificent structures of the period.

1883 marked the beginning of Pasha's financial decline, he was financially ruined and unable to repay his debts. Abraham Pasha was forced to surrender his investments on the Bourse and all his properties to the Ottoman Bank in 1898. His personal properties were sold by the bank in 1919 to a stockbroker named Manouk Manoukian. 

— Mesut Kara (translated from Turkish)

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When was the Ottoman Bank Established? (Mano Chil posted it on November 15, 203)

In 1856, (Vahe: 10 years after the establishment of the Armenian Evangelical community),  Sultan Abdulmejid called for modern banks to be established in the Ottoman Empire. He hoped that creating the institutions would improve the empire’s financial system and foster economic development. The sultan’s call was heeded by European bankers who, seeing opportunity, flocked to Constantinople.

The Ottoman authorities gave a group of English and French suitors permission to establish a bank that would operate under the name “The Imperial Ottoman Bank.” Negotiations between the Ottoman authorities and European stakeholders on the bank’s governance resulted in the latter group receiving great influence.

As per the agreed-upon terms, the position of general manager had to be occupied by a European. The manager reported to two committees. One committee was based in London and was accountable to British shareholders. The other was based in Paris and was accountable to French shareholders. Decisions made by one committee became effective once ratified by the other committee.

The Ottoman Authorities agreed to have limited influence over the bank’s governance because of the perceived benefits the bank would grant them. For example, the Ottoman authorities could borrow from the newly established Imperial Ottoman Bank at a time when many creditors started to doubt their creditworthiness as a debtor.

The Imperial Ottoman Bank was to serve as the empire’s central bank. It would execute all financial operations of the Ottoman Treasury in Constantinople and would be the government’s financial agent both domestically and abroad. The Ottoman authorities also granted the institution the exclusive right to issue bank notes.

The negotiations over the Imperial Ottoman Bank were indicative of a trend that saw the Ottoman government surrender authority over economic matters to foreigners in exchange for financial services and access to funds.

Many of the loans that the Ottoman authorities had taken since 1854 were obtained under stern conditions. The interest on domestic and foreign loans was often over 6 percent, with some loans having an interest rate exceeding 10 percent.

On many occasions, the Ottoman government was not able to repay a loan in time. These delays strengthened rumors of bankruptcy, causing Ottoman bonds to become nearly unsellable.

The empire’s economic outlook worsened in 1873 when the European stock market crashed. A financial crisis that became known as the “Panic of 1873” followed. As a result, it became even harder for the Ottoman Government to procure new credit.

Economic circumstances were so dire that in 1874 Galata bankers refused to lend to the government even if the interest rates would be set at 25 percent.

By 1875, the situation had become untenable. The Ottoman authorities announced they would pay back their debt, half in cash and half in 5 percent yielding treasury bonds. As a result of this implicit admission of bankruptcy, the Ottoman State’s credit plummeted. The empire formally defaulted shortly thereafter.

The economic crisis was felt throughout the whole empire. Ismail Pasha, the Khedive of Egypt, was in such dire need of money that he sold his shares in the Suez Canal to the British government.

The proposed solution involved the state surrendering tax revenues to repay loans. The state agreed to earmark the revenues from its stamp, spirits, fishing taxes, silk tithe, salt, and tobacco monopolies.

The plan worked as intended. The tax proceeds proved sufficient to meet the installments of the debt. Foreign creditors, seeing that domestic loans were being repaid, felt left out of a good deal. They opened negotiations with the Ottoman government in the hopes of securing a similar arrangement. The talks resulted in an agreement signed in 1881, known as the Muharrem Decree, which gave foreign creditors claims to Ottoman tax revenues.

In return for ceding the tax revenues irrevocably, the outstanding debt of the empire was reduced by almost 40 percent. In addition, the yearly charges on the debt were cut by over 80 percent.

In the years following 1881, the tax revenues specified in the Decree of Muharrem were brought under the control of the OPDA (Ottoman Public Debt Administration). The institution’s primary functions were collecting taxes and distributing them to foreign bondholders.

The OPDA also served as an intermediary for European companies seeking to invest in the Ottoman Empire. As such, the institution helped foreign companies secure lucrative contracts for railway development. These contracts sometimes included rights of ownership of mineral deposits and forests near the to-be-constructed railways.

To act out its mandate, the OPDA employed thousands of people. At its peak, the institution had 9000 employees, which was more than the Ottoman finance ministry.

The Ottoman Public Debt Administration was successful in paying out the debt owed to foreign creditors. Between 1882 and 1914, the OPDA paid out the equivalent of 113 million British pounds in debt.

As time passed, the Ottoman Empire slowly began recovering from its precarious economic situation. With the establishment of the Republic of Turkey in 1929, a third of the outstanding debt was forgiven.

Turkey paid the last installment of its debt to the OPDA in 1954, exactly a century after the Ottoman Empire had taken on its first foreign loan.

--  Ilias Luursema

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Berch Kererteliyan became general manager of the Ottoman Bank. (Mano Chil posted it on June 16, 2024)

Berch Kerestejiyan (Türker) was born in 1870 in Istanbul. He first attended Galatasaray Lycee, a French-language public school, and later transferred to Robert College, an American private school. After graduation, he served for two years at the Ministry of Finance and was later employed by the Ottoman Bank. He was the co-founder of the Ottoman Red Crescent, which was established in 1911.

During World War I, he became the general manager of the Ottoman Bank. During the Armistice years, he actively participated in the National Movement by organising aid campaigns through the Ottoman Red Crescent and providing loans to the Nationalists through his position at the bank. 

Following the surname reform, Mustafa Kemal bestowed on him the family name Türker (Turk man) in recognition of his patriotism and support for the Nationalist cause. 

An anecdote is being told about his contribution to save the life of Mustafa Kemal Atatürk, as he informed Atatürk's lawyer about a British plot to sink his ship SS Bandırma in the Black Sea, on which Atatürk left Constantinople in 1919 to initiate the Turkish War of Independence. He was awarded the white stripe Medal of Independence after the war.

Encouraged and supported by Atatürk, he run as an independent candidate for a deputy seat from Afyonkarahisar at the 1935 general elections and became a member of the Turkish Grand National Assembly on March 7, 1935 as the first Armenian and one of the four non-Muslims in total.

— Ari Şekeryan

The Armenian Amiras: http://vhapelian.blogspot.com/2018/08/agn-and-agnetsis_9.html