ABSTRACT
The succession of Ottoman ministers who, between the beginning of 1856 and the winter of 1862-3, attempted to secure the establishment in Istanbul of a ‘national’ or state bank envisaged a number of functions for the new institution. These certainly included the transmission of tax revenues from the provinces to the capital and the provision of short-term financial accommodation on more favourable terms than were available in Galata. However they also included a convenient means of access to the money markets of the West for the raising of long-term loans, which at this stage it was still envisaged would be used primarily for railway building and other forms of infrastructural development rather than (as turned out to be the case) to make good constantly recurring budget deficits. Indeed it was this question of money markets which, in late 1862, inclined the Porte to favour an Anglo-French national bank in the form of the Imperial Ottoman Bank (BIO) rather than an exclusively English or an exclusively French one, since this would secure them access to both the London Stock Exchange and the Paris bourse. And the same thinking lay behind the insistence of the Ottoman government in 1874 when an extension of the BIO’s functions was under discussion, that its capital base be enlarged by the incorporation of the Vienna-based Banque austro-ottomane. The various groups of financiers who competed against each other for the national bank concession (and in both 18567 and again in 1862-3 they were numerous) likewise hoped to obtain a range of different advantages from it. These included a monopoly on the issue of banknotes, which was, in the event wrongly, thought certain to prove extremely lucrative. They also included the receipt of taxes and the making of payments on the government’s behalf; the transmission abroad of the funds required for the servicing of the foreign debt; preference in the awarding of public-works contracts; and, as the government’s financial agent abroad, the contracts for the issuing of loans on its behalf on the foreign money markets.1