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172-714: The Banque Franco-Serbe was created in 1910 by a group of French-linked financial institutions, mainly the Imperial Ottoman Bank of Constantinople (known by its French acronym BIO), the Banque de l'Union parisienne (BUP) of Paris , and the Société financière d’Orient of Brussels , the latter of which had been created by the BIO in 1896 to support markets for Ottoman securities in which it had troubled exposures. The Paris-based Société Générale and Bardac family bank also participated. While

344-511: A Bosnian Serb named Gavrilo Princip assassinated Archduke Franz Ferdinand , heir to the Austro-Hungarian throne. Austria-Hungary held Serbia responsible, and declared war on 28 July. After Russia mobilised in Serbia's defence, Germany declared war on Russia and France , who had an alliance . The United Kingdom entered after Germany invaded Belgium , whose neutrality it guaranteed, and

516-630: A blue-water navy was vital for global power projection; Tirpitz had his books translated into German, while Wilhelm made them required reading for his advisors and senior military personnel. However, it was also an emotional decision, driven by Wilhelm's simultaneous admiration for the Royal Navy and desire to surpass it. Bismarck thought that the British would not interfere in Europe, as long as its maritime supremacy remained secure, but his dismissal in 1890 led to

688-583: A grenade at the Archduke's car and injured two of his aides. The other assassins were also unsuccessful. An hour later, as Ferdinand was returning from visiting the injured officers in hospital, his car took a wrong turn into a street where Gavrilo Princip was standing. He fired two pistol shots, fatally wounding Ferdinand and his wife Sophie . According to historian Zbyněk Zeman , in Vienna "the event almost failed to make any impression whatsoever. On 28 and 29 June,

860-536: A guerrilla warfare campaign and only surrendered two weeks after the armistice took effect in Europe. Before the war, Germany had attempted to use Indian nationalism and pan-Islamism to its advantage, a policy continued post-1914 by instigating uprisings in India , while the Niedermayer–Hentig Expedition urged Afghanistan to join the war on the side of Central Powers. However, contrary to British fears of

1032-508: A British institution chartered in London, and reorganized in 1863 as a French–British venture with head office in Constantinople , on a principle of strict equality between British and French stakeholders. It soon became dominated by French interests, however, primarily because of the greater success of its offerings among French savers than British ones. In its early years, the BIO was principally

1204-534: A French passenger ship. The bank was able to reopen on a nearby location on 1 May 1903. In 1903, the Cairo Stock Exchange was first established under leadership of businessman Moïse Yacoub (Moussa) Cattaui, in the former BIO branch building on what is now Adly Street. From 1904 on, the BIO was able to accelerate the expansion of its branch network, including in Egypt. One of the BIO's aims in opening new branches

1376-768: A bifurcation of the Ottoman Bank into two mutually autonomous groups. World War I World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War , was a global conflict between two coalitions: the Allies (or Entente) and the Central Powers . Fighting took place mainly in Europe and the Middle East , as well as in parts of Africa and

1548-797: A branch office in Khan Antoun Bey  [ ar ] , then the main building in the Beirut Souks . It also had a branch in Galaţi in Moldavia , complemented by Bucharest in Wallachia from 1861. The bank made some poor credit allocation decisions, suffered from the 1860 civil conflict in Mount Lebanon and a financial crisis in 1861, and met hostility from the Galata bankers. By early 1862, circumstances favored

1720-408: A change in policy and an Anglo-German naval arms race began. Despite the vast sums spent by Tirpitz, the launch of HMS  Dreadnought in 1906 gave the British a technological advantage. Ultimately, the race diverted huge resources into creating a German navy large enough to antagonise Britain, but not defeat it; in 1911, Chancellor Theobald von Bethmann Hollweg acknowledged defeat, leading to

1892-592: A direct threat. The 1908–1909 Bosnian Crisis began when Austria annexed the former Ottoman territory of Bosnia and Herzegovina , which it had occupied since 1878. Timed to coincide with the Bulgarian Declaration of Independence from the Ottoman Empire, this unilateral action was denounced by the European powers, but accepted as there was no consensus on how to resolve the situation. Some historians see this as

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2064-467: A gap between the German armies as they closed on Paris. The French army, reinforced by the British expeditionary corps, seized this opportunity to counter-attack and pushed the German army 40 to 80 km back. Both armies were then so exhausted that no decisive move could be implemented, so they settled in trenches, with the vain hope of breaking through as soon as they could build local superiority. In 1911,

2236-526: A group of British and French representatives, supported by the two countries' embassies, and the Ottoman authorities. As Layard had suspected in late 1856, and in spite of the replacement of Fuad by Yusuf Kamil Pasha as Grand Vizier, the compromise that was found on the new bank's governance stipulated that its formal head office, board of directors and general manager would be located in Constantinople, but that

2408-660: A leading role for Egypt. The BIO opened a branch in Tunis in 1920, and three branches in Persia , namely Kermanshah (1920), Hamadan and Tehran (both in 1922). Between 1919 and 1923, it made an abortive attempt to expand into the South Caucasus region with branches in Baku , Batumi , and Tbilisi . The BIO, however, declined in May 1920 the suggestion to be the anchor investor in a new state bank of

2580-483: A lender to the Ottoman government with a monopoly on banknote issuance and other public-interest roles, including all treasury operations of the Ottoman state under an agreement ratified in February 1875 that was however never fully implemented. In the 1890s, it pivoted to a greater emphasis on commercial and investment banking, which it developed with lasting success despite a serious crisis in 1895. Following World War I ,

2752-742: A limited number of locations such as Bursa, Damascus, Edirne, Salonica, and Smyrna. It restarted distributing dividends from 1880. During the turmoil of the 1870s, and despite French hostility to Germany following defeat in the Franco-Prussian War , the BIO started reaching out to Austrian and German partners. Its acquisition of the Austro-Ottoman Bank in 1874 had given it connections in Vienna , and in 1881 it entered an informal partnership with banks Creditanstalt of Vienna and S. Bleichröder of Berlin to invest in joint projects, which became known as

2924-408: A market downturn in London, but that was promptly put to an end by a show of support by the Ottoman government including a 12-year extension of the BIO's convention term, from 1913 to 1925. The BIO subsequently reorganized its management to make it less centralized, placing the branch network under deputy general manager Gaston Auboyneau, and sharply reduced its exposures to railway projects and those in

3096-724: A network in Bulgaria beyond the branch in Philippopoli that had opened in 1878, opening in Sofia in 1890 and (once again) in Ruse in 1892. From 1891, the BIO started opening savings accounts for retail customers in Turkey (and a bit earlier in Egypt). The 1890s were the time when the BIO's banknotes started circulating widely throughout the empire, instead of being largely confined to use in Constantinople as had been

3268-525: A new organization on the model of the Caisse de la Dette that had been established in 1876 for Egypt, but with greater consideration of Ottoman sensitivities. The Treaty of Berlin of 13 July 1878 partly addressed the debt challenge by establishing revenue flows from the newly independent territories ( Bulgaria , Montenegro , Eastern Rumelia and Serbia ), thus supporting the payment of the Ottoman public debt and war reparations . By convention of 22 November 1879

3440-409: A number of branches. The late-1895 liquidity crisis was the most severe experienced by the BIO so far, but also eliminated many of its local competitors including several of the remaining Galata bankers. In the 1900s, the bank was continuously involved in efforts to work out the Ottoman public debt, including the negotiation of a restructuring enshrined in the decree of 14 September 1903 together with

3612-540: A possibility. This was accentuated by British and Russian support for France against Germany during the 1911 Agadir Crisis . German economic and industrial strength continued to expand rapidly post-1871. Backed by Wilhelm II, Admiral Alfred von Tirpitz sought to use this growth to build an Imperial German Navy , that could compete with the British Royal Navy . This policy was based on the work of US naval author Alfred Thayer Mahan , who argued that possession of

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3784-799: A revolt in India, the outbreak of the war saw a reduction in nationalist activity. Leaders from the Indian National Congress and other groups believed support for the British war effort would hasten Indian Home Rule , a promise allegedly made explicit in 1917 by Edwin Montagu , the Secretary of State for India . In 1914, the British Indian Army was larger than the British Army itself, and between 1914 and 1918 an estimated 1.3 million Indian soldiers and labourers served in Europe, Africa, and

3956-515: A significant block of BIO shares from a group of investors who had tried and failed to force the creation of an Italian constituency in the BIO's governance. After initial misgivings in both Paris and London, the BPPB thus became the BIO's controlling shareholder. It would maintain that position until 1996. In the BIO's core area of operations, the Turkish War of Independence disrupted its business until

4128-504: A significant escalation, ending any chance of Austria cooperating with Russia in the Balkans, while also damaging diplomatic relations between Serbia and Italy. Tensions increased after the 1911–1912 Italo-Turkish War demonstrated Ottoman weakness and led to the formation of the Balkan League , an alliance of Serbia, Bulgaria, Montenegro , and Greece . The League quickly overran most of

4300-471: A war on two fronts; the Schlieffen Plan envisaged using 80% of the army to defeat France, then switching to Russia. Since this required them to move quickly, mobilisation orders were issued that afternoon. Once the German ultimatum to Russia expired on the morning of 1 August, the two countries were at war. At a meeting on 29 July, the British cabinet had narrowly decided its obligations to Belgium under

4472-402: A weak Ottoman government, rather than an ambitious Slav power like Bulgaria . Russia had ambitions in northeastern Anatolia while its clients had overlapping claims in the Balkans. These competing interests divided Russian policy-makers and added to regional instability. Austrian statesmen viewed the Balkans as essential for the continued existence of their Empire and saw Serbian expansion as

4644-451: A whole, the Somme offensive led to an estimated 420,000 British casualties, along with 200,000 French and 500,000 Germans. The diseases that emerged in the trenches were a major killer on both sides. The living conditions led to disease and infection, such as trench foot , lice , typhus , trench fever , and the ' Spanish flu '. At the start of the war, German cruisers were scattered across

4816-453: Is known, however, that from 1908 to 1913, military spending by the six major European powers increased by over 50% in real terms. The years before 1914 were marked by a series of crises in the Balkans, as other powers sought to benefit from the Ottoman decline. While Pan-Slavic and Orthodox Russia considered itself the protector of Serbia and other Slav states, they preferred the strategically vital Bosporus straits to be controlled by

4988-558: The Schutzkorps was established, and carried out the persecution of Serbs. The assassination initiated the July Crisis, a month of diplomatic manoeuvring between Austria-Hungary, Germany, Russia, France and Britain. Believing that Serbian intelligence helped organise Franz Ferdinand's murder, Austrian officials wanted to use the opportunity to end their interference in Bosnia and saw war as

5160-626: The World War . In August 1914, the magazine The Independent wrote "This is the Great War. It names itself". In October 1914, the Canadian magazine Maclean's similarly wrote, "Some wars name themselves. This is the Great War". Contemporary Europeans also referred to it as " the war to end war " and it was also described as "the war to end all wars" due to their perception of its unparalleled scale, devastation, and loss of life. The first recorded use of

5332-511: The Asia-Pacific , and in Europe was characterised by trench warfare ; the widespread use of artillery , machine guns, and chemical weapons (gas); and the introductions of tanks and aircraft . World War I was one of the deadliest conflicts in history , resulting in an estimated 10 million military dead and more than 20 million wounded , plus some 10 million civilian dead from causes including genocide . The movement of large numbers of people

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5504-665: The Australian Naval and Military Expeditionary Force landed on the island of New Britain , then part of German New Guinea . On 28 October, the German cruiser SMS  Emden sank the Russian cruiser Zhemchug in the Battle of Penang . Japan declared war on Germany before seizing territories in the Pacific, which later became the South Seas Mandate , as well as German Treaty ports on

5676-408: The Banque de Paris et des Pays-Bas (known since the 1980s as Paribas ) took control of the BIO, and renamed it Ottoman Bank in 1925. The bank's remaining public-interest privileges and monopolies were phased out. Its operations outside Turkey were gradually dismantled, a process that was completed in 1975. The Ottoman Bank became Turkish-owned when Garanti Bank purchased it from Paribas in 1996, and

5848-734: The Battle of Kars and the Siege of Plevna . During that turbulent period, the BIO reduced its activity and cost base and suspended dividends, while its claims on the Ottoman state ballooned. In the spring of 1878, following the Treaty of San Stefano and cessation of hostilities, the BIO lobbied for a resolution of the Ottoman public debt situation to be considered at the Congress of Berlin . The chairman of its Paris committee, Charles Mallet  [ fr ] , suggested to French foreign minister William Waddington

6020-646: The Burning of Smyrna . Some branches such as Aydın , Afyonkarahisar , Erzurum and Kütahya only reopened in late 1923. Following its victory of the Turkish War of Independence , the Republic of Turkey signed a convention with the BIO on 10 March 1924, under which it provided credit to the new Republican government in Ankara as well as its two banking champions, Ziraat Bank and the newly established İşbank . The BIO did not resume note issuance but agreed to continue servicing

6192-603: The Comptoir National d'Escompte de Paris and the Banque Française pour le Commerce et l'Industrie . The deterioration of security in the three Ottoman provinces of Macedonia (Salonica, Monastir and Üsküb ) during the period of Macedonian Struggle led the Western powers to request administrative reforms in the region. Rather than having to countenance yet more foreign intervention, Sultan Abdul Hamid II in early 1905 asked

6364-753: The First Republic of Armenia , promoted by Calouste Gulbenkian . In Cyprus and the near east the BIO further opened branches in Paphos (1918), Kirkuk (1920), and Troödos (1921), Bethlehem , Ramallah , and Nablus (1922), in the Musky neighborhood of Cairo and in Ismailia (1924), Amman (1925), and Tel Aviv (1931). Conversely, it had to close both its branches in Arabia (Jeddah and Hodeida) and many in Albania, northern Greece and

6536-587: The Geneva -based Société Financière Franco-Suisse in 1892 (joint venture with Union Financière de Genève ), and the Brussels -registered Société Financière d'Orient in 1896, which was actually managed from Paris. Starting in 1894, the BIO invested in South African gold mines. The rapid expansion of these and other BIO exposures led to an incipient bank run at Constantinople in early November 1895, following

6708-461: The Imperial Ottoman Bank ( French : Banque Impériale Ottomane , Ottoman Turkish : بانق عثمانی شاهانه ) and correspondingly referred to by its French acronym BIO , was a bank that played a major role in the financial history of the Ottoman Empire . By the early 20th century, it was the dominant bank in the Ottoman Empire, and one of the largest in the world. It was founded in 1856 as

6880-651: The Khedivate of Egypt , the BIO opened a branch in Cairo in early 1881, and its main branch in Alexandria withstood the riots during the ʻUrabi revolt in 1882. Negotiations on the Ottoman debt eventually started in Constantinople on 13 September 1881, and led to the agreement known by its ratification instrument, the Decree of Muharram of 20 December 1881, which closed the period of financial distress that had started in 1875. It created

7052-415: The Ottoman Public Debt Administration under a council of seven members, of which one was to be appointed by the BIO and to represent the signatories of the convention of November 1879, whose claims were reduced in line with the decree's general debt restructuring. Meanwhile, the BIO endeavored to implement its role of treasurer under the convention of February 1875, which in principle was still applicable, in

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7224-440: The Pereire brothers , Alexis Pillet-Will , Casimir Salvador, and Antoine Jacob Stern  [ fr ] . Alexandre de Plœuc  [ fr ] became the first general manager in Constantinople, with Edward Gilbertson as his deputy and the local board being otherwise composed of John Stewart, representing the London and Paris committees, and local bankers Antoine Alléon and Charles Simpson Hanson. The early activity of

7396-432: The Rothschild family (in London, Paris and Vienna), the Pereire brothers (in Paris), and a group of British financiers around Austen Henry Layard and the private bank Glyn, Mills & Co. The Ottoman government opted for the latter, which it identified as better preserving the country's independence from western financiers in comparison with the assertive approaches of the Rothschilds and Pereires. The British project

7568-591: The Rüstungswende or 'armaments turning point', when he switched expenditure from the navy to the army. This decision was not driven by a reduction in political tensions but by German concern over Russia's quick recovery from its defeat in the Russo-Japanese War and subsequent 1905 Russian Revolution . Economic reforms led to a significant post-1908 expansion of railways and transportation infrastructure, particularly in its western border regions. Since Germany and Austria-Hungary relied on faster mobilisation to compensate for their numerical inferiority compared to Russia,

7740-403: The United States entered the war on the Allied side following Germany's resumption of unrestricted submarine warfare against Atlantic shipping. Later that year, the Bolsheviks seized power in the Russian October Revolution , and Soviet Russia signed an armistice with the Central Powers in December, followed by a separate peace in March 1918. That month, Germany launched an offensive in

7912-423: The hydrophone and depth charges were introduced, destroyers could potentially successfully attack a submerged submarine. Convoys slowed the flow of supplies since ships had to wait as convoys were assembled; the solution was an extensive program of building new freighters. Troopships were too fast for the submarines and did not travel the North Atlantic in convoys. The U-boats sunk more than 5,000 Allied ships, at

8084-442: The tank . After the First Battle of the Marne in September 1914, Allied and German forces unsuccessfully tried to outflank each other, a series of manoeuvres later known as the " Race to the Sea ". By the end of 1914, the opposing forces confronted each other along an uninterrupted line of entrenched positions from the Channel to the Swiss border. Since the Germans were normally able to choose where to stand, they generally held

8256-424: The "Consortium". Their first venture was to form a company to sell tobacco products, for which they obtained assent from the Ottoman Public Debt Administration which held rights over tobacco revenue, formed an entity known as Régie in 1883, and secured a thirty-year monopoly from 1884. The Régie or Ottoman Tobacco Company had a difficult start fighting smuggling, but became prominent enough that it shared half of

8428-588: The 1839 Treaty of London did not require it to oppose a German invasion with military force; however, Prime Minister Asquith and his senior Cabinet ministers were already committed to supporting France, the Royal Navy had been mobilised, and public opinion was strongly in favour of intervention. On 31 July, Britain sent notes to Germany and France, asking them to respect Belgian neutrality; France pledged to do so, but Germany did not reply. Aware of German plans to attack through Belgium, French Commander-in-Chief Joseph Joffre asked his government for permission to cross

8600-405: The 1870s the BIO had cut most of its exposure to the SGEO, which was eventually liquidated at the expiration of its initial 30-year term in 1893, at the time when the BIO was starting to develop its own commercial and retail banking operations throughout the Empire. Also in 1864, the BIO opened a branch in Salonica , the main Ottoman port city where it was not already present, and another one in

8772-431: The 1879 Dual Alliance , which became the Triple Alliance when Italy joined in 1882. For Bismarck, the purpose of these agreements was to isolate France by ensuring the three Empires resolve any disputes between themselves. In 1887, Bismarck set up the Reinsurance Treaty , a secret agreement between Germany and Russia to remain neutral if either were attacked by France or Austria-Hungary. For Bismarck, peace with Russia

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8944-441: The 1913 Treaty of London , which had created an independent Albania while enlarging the territories of Bulgaria, Serbia, Montenegro and Greece. However, disputes between the victors sparked the 33-day Second Balkan War , when Bulgaria attacked Serbia and Greece on 16 June 1913; it was defeated, losing most of Macedonia to Serbia and Greece, and Southern Dobruja to Romania. The result was that even countries which benefited from

9116-519: The Aegean (Shkodër, Ioannina, Serres, Drama, Komotini, Mytilene, and Rhodes). In the Levant, following the secret Sykes–Picot Agreement of 1916, the French authorities pressured the BIO to transform its branches in the territories under French influence into a separate subsidiary. On 2 January 1919, the BIO consequently sponsored the establishment of a new Banque de Syrie , of which it initially held 94.45 percent ownership and which opened operations in Marseille and Beirut in April 1919. The situation in

9288-417: The Asian side of Constantinople, to Anatolia and ultimately to Baghdad , which would later be known as part of the Berlin–Baghdad railway . In 1888, it formed a group of investors to this effect together with Bleichröder and the Disconto-Gesellschaft in Berlin, but Deutsche Bank won a competing concession later that year and the BIO redirected its focus to railway projects in the Levant and Syria. From 1888,

9460-409: The Austrians and Serbs clashed at the battles of the Cer and Kolubara ; over the next two weeks, Austrian attacks were repulsed with heavy losses. As a result, Austria had to keep sizeable forces on the Serbian front, weakening their efforts against Russia. Serbia's victory against Austria-Hungary in the 1914 invasion has been called one of the major upset victories of the twentieth century. In 1915,

9632-593: The Austrians briefly occupied the Serbian capital, Belgrade . A Serbian counter-attack in the Battle of Kolubara succeeded in driving them from the country by the end of 1914. For the first 10 months of 1915, Austria-Hungary used most of its military reserves to fight Italy. German and Austro-Hungarian diplomats scored a coup by persuading Bulgaria to join the attack on Serbia. The Austro-Hungarian provinces of Slovenia , Croatia and Bosnia provided troops for Austria-Hungary. Montenegro allied itself with Serbia. Bulgaria declared war on Serbia on 14 October 1915 and joined in

9804-564: The Austro-Ottoman Bank ( French : Banque austro-ottomane , German : Austro-Ottomanische Bank ) sponsored by the Anglo-Austrian Bank and Wiener Bankverein in 1871, and the Austro-Turkish Bank ( French : Banque austro-turque , sometimes Société de crédit austro-turque ) in 1872. Neither survived the financial turmoil of the 1870s; the Austro-Ottoman Bank was merged into the BIO in 1874. The Ottoman state's continued financial challenges led successive grand viziers Mehmed Rushdi Pasha and Hüseyin Avni Pasha to seek an expansion of

9976-519: The Axis invasion of Yugoslavia in 1941, its activities withered and it lost its significant business in Macedonia. The operations of the BFS in Yugoslavia were nationalized by the Communist authorities by December 1946, together with all other banks in the country, and merged into the National Bank of Yugoslavia . The French entity kept existing until at least the 1970s as a subsidiary of the BPPB. Imperial Ottoman Bank The Ottoman Bank ( Turkish : Osmanlı Bankası ), known from 1863 to 1925 as

10148-400: The BFS's registered head office was in Paris , its general management was located at the branch in Belgrade from the start; it also soon opened an office in London . At its creation, it was the only significant commercial bank in Serbia (even though the state-run Uprava Fondova was larger) and played a central role in the foreign funding of Serbia's war effort during the Balkan Wars . In

10320-433: The BIO and eventually liquidated by 1872. In October 1867, the BIO opened a branch in Alexandria , its first in the Khedivate of Egypt . In 1868, a commercial branch was opened in Paris, first at 30, boulevard Haussmann; in 1870 it moved to the prestigious address of 7, rue Meyerbeer, facing the Palais Garnier , where it would remain for more than a century. In 1868, the Ottoman Bank faced its first serious competitor with

10492-400: The BIO and the Deutsche Bank agreed on a joint approach for the railway project toward Baghdad, which would unfold and unravel in subsequent years. On 18 February 1903 in Paris, the two institutions agreed to form a financing syndicate, an operating company and a construction company to execute the project. On 5 March 1903, a final act of concession was signed in Constantinople. But the project

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10664-424: The BIO decided to leverage its international identity and to re-emphasize the complementarity between London and Paris in its governance, even though by then only about a tenth of its shareholding base was British. It even envisaged co-opting some American nationals into its London and Paris committees. It regrouped the direction of its activities in Cyprus, Palestine, Mesopotamia and Arabia in London, which already had

10836-408: The BIO sought a new impetus by appointing Edgar Vincent as managing director for a term of five years. In March 1890, the BIO accepted a new restructuring of its lending to the government, and went on to work out other segments of the Ottoman debt legacy under favorable credit conditions in the early 1890s. It sponsored financial affiliates in third countries for purposes of financial arbitrage, namely

11008-477: The BIO to take over the full treasury service in the three Macedonian provinces along the terms of the convention of February 1875, which had never been formally abrogated. Simultaneously as he led the financial relationship with the Ottoman government in the early 1890s, Edgar Vincent initiated a program of opening new branch offices, particularly in Anatolia and beyond, as previously considered in 1865 and 1874 but never before implemented at scale. The BIO restarted

11180-408: The BIO was again the target of an action intended to shock Western European public opinion, this time by Bulgarian nationalists participating in the Macedonian Struggle . The Boatmen of Thessaloniki , an anarchist group, bombed the bank's branch in Salonica and adjacent buildings on 29 April 1903, killing a night guard, as part of a two-day campaign of terrorist attacks that also damaged railways and

11352-426: The BIO was given a 25 percent stake, most of which it sold on to other investors including the Comptoir d'Escompte de Paris and Société Générale . This initiated an informal partnership between the BIO and Deutsche Bank, which gradually replaced the Consortium especially after Gerson von Bleichröder passed away in 1893. The BIO was involved in early considerations of a railway from Haydarpaşa railway station , on

11524-422: The BIO was involved in the creation of the Compagnie du port de Beyrouth to develop the Port of Beirut together with the Compagnie de la route de Beyrouth à Damas led by Edmond de Perthuis. This was the first time the BIO acted in close coordination with the French government, which promoted the project. Construction works were completed in 1894, including the demolition of the ancient Beirut Castle , and

11696-484: The BIO was mostly about providing financing to the Ottoman government, even though as early as August 1865 the bank's staff was concerned about the creditworthiness of its main debtor, and the BIO was by no means the only player on that market. The BIO was not entirely oblivious of the broader financing needs of the Ottoman economy, however. As a complement to its own activity of lending to the Imperial government and international financial transactions, it sponsored in 1864

11868-464: The BIO were generally allowed to keep their jobs. A later attempt by Talaat Bey to nationalize the BIO failed in July 1915, in part due to opposition from Deutsche Bank with which the BIO had a longstanding partnership, and to advocacy by Mehmed Cavid that the BIO's survival as a credible institution was in the Ottoman state's longer-term interest. The ways the war affected individual branches were extremely diverse. In eastern Anatolia and elsewhere,

12040-543: The BIO's leadership led by Cartali managed to obtain exemptions for many of its Armenian staff from the Armenian genocide . The BIO's staff in Syria and Mesopotamia were also able to provide some financial services to deported Armenians despite the hostile environment. Throughout the war, the BIO kept processing the local financial transactions of the Ottoman government through its unparalleled network of branches, which made it easier to secure protection for its staff. It mostly refrained, however, from new lending business to either

12212-558: The BIO, by then controlled by the Banque de Paris et des Pays-Bas (BPPB), became the BFS's majority owner through a capital restructuring in 1928. The BFS's Parisian head office was initially established in a building that had been acquired by the BUP in 1905 at 14, rue Le Peletier, and moved in the early 1920s to a new building at 100, rue de la Victoire. By the late 1930s, the BFS was the only foreign-headquartered bank with large direct operations in Yugoslavia. It had branches in Bitola , Kosovska Mitrovica , Niš , and Skopje . Following

12384-405: The BIO, some £40,000, which would have been lost had the bank been forced to close. In Constantinople, the BIO declined to further finance the government, and unilaterally renounced its issuance privilege, leaving the Ottoman authorities to issue paper money as they had already done in the late 1870s. On 31 December 1914, with no hope of receiving more credit from the BIO, Talaat Bey requested

12556-545: The Balkan Wars, such as Serbia and Greece, felt cheated of their "rightful gains", while for Austria it demonstrated the apparent indifference with which other powers viewed their concerns, including Germany. This complex mix of resentment, nationalism and insecurity helps explain why the pre-1914 Balkans became known as the " powder keg of Europe ". On 28 June 1914, Archduke Franz Ferdinand of Austria , heir presumptive to Emperor Franz Joseph I of Austria , visited Sarajevo ,

12728-435: The British and French shareholders. Contrary to the desires of the Ottoman authorities, however, Layard insisted that they should not control the bank's management, only conceding a "supervisor" role for a high-ranking Ottoman official. In contrast to Layard, a competing British investor group led by Joseph Paxton presented a project to establish a "Bank of Turkey" with a Governor and Vice Governor who would be both appointed by

12900-510: The Central Powers. However, the pro-German King Constantine I dismissed the pro-Allied government of Eleftherios Venizelos before the Allied expeditionary force arrived. The Macedonian front was at first mostly static. French and Serbian forces retook limited areas of Macedonia by recapturing Bitola on 19 November 1916 following the costly Monastir offensive , which brought stabilisation of

13072-625: The Chinese Shandong peninsula at Tsingtao . After Vienna refused to withdraw its cruiser SMS  Kaiserin Elisabeth from Tsingtao, Japan declared war on Austria-Hungary, and the ship was sunk in November 1914. Within a few months, Allied forces had seized all German territories in the Pacific, leaving only isolated commerce raiders and a few holdouts in New Guinea. Some of the first clashes of

13244-524: The Cypriot port city of Larnaca . In November 1865, however, the shareholders rejected plans for more ambitious branch network expansion. In 1866, political developments in the newly formed United Principalities of Moldavia and Wallachia led the BIO to transform its two branches there, in Galaţi (est. 1856) and Bucharest (est. 1861) to a local subsidiary, the Bank of Romania , while their bad assets were retained by

13416-597: The French government to counter the German-sponsored Berlin–Baghdad railway. The rebranded Société ottomane des chemins de fer Damas–Hamah et prolongements eventually built a line to Hama in 1902, prolonged to Aleppo in 1906 and completed by an east–west branch between Homs and Tripoli in 1911. In 1906, the BIO relocated its Beirut branch to a new building on the port's waterfront. In May 1899 in Berlin,

13588-613: The German High Seas Fleet was confined to port. German U-boats attempted to cut the supply lines between North America and Britain. The nature of submarine warfare meant that attacks often came without warning, giving the crews of the merchant ships little hope of survival. The United States launched a protest, and Germany changed its rules of engagement. After the sinking of the passenger ship RMS Lusitania in 1915, Germany promised not to target passenger liners, while Britain armed its merchant ships, placing them beyond

13760-623: The German Army increased in size from 1908 to 1914, he changed the allocation of forces between the two wings to 70:30. He also considered Dutch neutrality essential for German trade and cancelled the incursion into the Netherlands, which meant any delays in Belgium threatened the viability of the plan. Historian Richard Holmes argues that these changes meant the right wing was not strong enough to achieve decisive success. The initial German advance in

13932-723: The German right wing would sweep through the Netherlands and Belgium , then swing south, encircling Paris and trapping the French army against the Swiss border. The plan's creator, Alfred von Schlieffen , head of the German General Staff from 1891 to 1906, estimated that this would take six weeks, after which the German army would transfer to the East and defeat the Russians. The plan was substantially modified by his successor, Helmuth von Moltke

14104-530: The Germans bled heavily as well, with anywhere from 700,000 to 975,000 casualties between the two combatants. Verdun became a symbol of French determination and self-sacrifice. The Battle of the Somme was an Anglo-French offensive from July to November 1916. The opening day on 1 July 1916 was the bloodiest single day in the history of the British Army , which suffered 57,500 casualties, including 19,200 dead. As

14276-675: The Middle East. In all, 140,000 soldiers served on the Western Front and nearly 700,000 in the Middle East, with 47,746 killed and 65,126 wounded. The suffering engendered by the war, as well as the failure of the British government to grant self-government to India afterward, bred disillusionment, resulting in the campaign for full independence led by Mahatma Gandhi . Pre-war military tactics that had emphasised open warfare and individual riflemen proved obsolete when confronted with conditions prevailing in 1914. Technological advances allowed

14448-494: The Ottoman Bank started its operations and opened its first branches, Layard soon understood that a different scheme would be needed to secure the issuance privilege. In a communication to Grand Vizier Mustafa Reşid Pasha in December 1856, he outlined what would eventually be the concept of the still-to-come BIO: a head office in Constantinople, but governance by two parallel committees in London and Paris that would be accountable to

14620-409: The Ottoman authorities farmed out six revenue streams to a BIO-led syndicate for a duration of ten years, namely stamp duty , taxes on alcohols, on fishing in Constantinople, on silk in four provinces, and the salt and tobacco monopolies, the latter two being by far the largest. This pledging of the so-called six contributions was widely understood as a stopgap measure pending a comprehensive solution to

14792-526: The Ottoman declaration of war in November 1914. A run left the BIO's local operation with less than £4,000 in its vaults, and no means of replenishing its reserves from the head office in Constantinople. The bank was briefly closed by the island's British authorities and then allowed to re-open effectively as a separate semi-state company. In part this compromise seems to have been reached as the British authorities in Cyprus had themselves deposited their entire funds at

14964-566: The Ottoman government, but the latter temporized as it preferred a solution that would combine British and French stakeholders, mirroring the Crimean War coalition. As high-ranking official Mehmed Fuad Pasha put it in May 1856 to French Ambassador Thouvenel, the Sublime Porte 's wish "was to perpetuate as much as possible the spirit of alliance that saved Turkey during the war, namely providing equal shares to French and English interests." Even as

15136-761: The Ottomans joined the Central Powers in November. Germany's strategy in 1914 was to quickly defeat France, then to transfer its forces to the east, but its advance was halted in September , and by the end of the year the Western Front consisted of a continuous line of trenches stretching from the English Channel to Switzerland. The Eastern Front was more dynamic, but neither side gained a decisive advantage, despite costly offensives. Italy , Bulgaria , Romania , Greece and others joined in from 1915 onward. In April 1917,

15308-521: The Ottomans such as Basra from February 1915, Mytilene from June 1917, and Palestine from January 1918, as well as Trabzon during its occupation by Russian forces. The BIO opened a branch in Marseille in 1916 to centralize the relations with France of its branches in Egypt and Greece. In Cyprus , nominally an Ottoman province but administered by the UK since 1878, the island was annexed in immediate response to

15480-598: The Ottomans' territory in the Balkans during the 1912–1913 First Balkan War , much to the surprise of outside observers. The Serbian capture of ports on the Adriatic resulted in partial Austrian mobilisation, starting on 21 November 1912, including units along the Russian border in Galicia . The Russian government decided not to mobilise in response, unprepared to precipitate a war. The Great Powers sought to re-assert control through

15652-606: The Russian Stavka agreed with the French to attack Germany within fifteen days of mobilisation, ten days before the Germans had anticipated, although it meant the two Russian armies that entered East Prussia on 17 August did so without many of their support elements. By the end of 1914, German troops held strong defensive positions inside France, controlled the bulk of France's domestic coalfields, and inflicted 230,000 more casualties than it lost itself. However, communications problems and questionable command decisions cost Germany

15824-631: The Serbian retreat toward the Adriatic coast in the Battle of Mojkovac on 6–7 January 1916, but ultimately the Austrians also conquered Montenegro. The surviving Serbian soldiers were evacuated to Greece. After the conquest, Serbia was divided between Austro-Hungary and Bulgaria. In late 1915, a Franco-British force landed at Salonica in Greece to offer assistance and to pressure its government to declare war against

15996-637: The Sublime Porte. Paxton's project was endorsed by the Ottoman government in March 1857 but, as Layard had anticipated, it failed to raise investor interest in London. A follow-up effort by some of Paxton's associates under the same name of "Bank of Turkey" started operations in 1858, but had to be placed into liquidation in 1861. Without the issuance privilege, the Ottoman Bank had modest beginnings with six staff in Constantinople (12 in 1858) and four in Smyrna as well as

16168-508: The UK. By then, three-quarters of the BIO's shareholders were French, the rest were mostly British, and its most senior managers were nationals from the two countries. Its seats in London and Paris were not treated harshly by the respective governments, but they were forbidden from transacting with the head office which was now in enemy territory. Conversely, London and Paris kept control of the bank's operations on allied ground, including Egypt, Cyprus, northern Greece, and territories conquered from

16340-639: The Varna branch closed in 1882. Meanwhile, immediately after the Berlin Congress created Eastern Rumelia in 1878, the BIO opened a branch in the capital Philippopoli (later Plovdiv ). As Cyprus came under British rule, the BIO promptly opened branches in Nicosia and Limassol in 1879 to serve the new authorities on the island, with a dominant position despite local competition from the Anglo-Egyptian Bank . In

16512-629: The West was very successful. By the end of August, the Allied left, which included the British Expeditionary Force (BEF), was in full retreat , and the French offensive in Alsace-Lorraine was a disastrous failure, with casualties exceeding 260,000. German planning provided broad strategic instructions while allowing army commanders considerable freedom in carrying them out at the front, but von Kluck used this freedom to disobey orders, opening

16684-480: The Younger . Under Schlieffen, 85% of German forces in the west were assigned to the right wing, with the remainder holding along the frontier. By keeping his left-wing deliberately weak, he hoped to lure the French into an offensive into the "lost provinces" of Alsace-Lorraine , which was the strategy envisaged by their Plan XVII . However, Moltke grew concerned that the French might push too hard on his left flank and as

16856-496: The Zafiropoulo & Zafiri partnership, and Christakis Zografos , as well as international partners Bischoffheim & Goldschmidt (Paris and London), Frühling & Göschen (London and Leipzig ), Oppenheim, Alberti et Cie (Paris), Augustus Ralli ( Marseille ), Stern Brothers (London), and Siegmund Sulzbach  [ de ] ( Frankfurt ). After a few years, however, the relations within that group deteriorated, and by

17028-446: The aggressor, German Chancellor Bethmann Hollweg delayed the commencement of war preparations until 31 July. That afternoon, the Russian government were handed a note requiring them to "cease all war measures against Germany and Austria-Hungary" within 12 hours. A further German demand for neutrality was refused by the French who ordered general mobilisation but delayed declaring war. The German General Staff had long assumed they faced

17200-526: The agreement was ratified by firman of Sultan Abdulaziz . On 5 March 1863, the Ottoman government registered the new Imperial Ottoman Bank which could then start its operations. That same day in London, the shareholders of the English-chartered Ottoman Bank voted to liquidate it in accordance with the November 1862 agreement, a process that was only finalized in June 1865. Meanwhile, the transfer of

17372-466: The attack by the Austro-Hungarian army under Mackensen's army of 250,000 that was already underway. Serbia was conquered in a little more than a month, as the Central Powers, now including Bulgaria, sent in 600,000 troops in total. The Serbian army, fighting on two fronts and facing certain defeat, retreated into northern Albania . The Serbs suffered defeat in the Battle of Kosovo . Montenegro covered

17544-585: The attack left eight dead and fourteen wounded among the Armenian activists, the Ottoman police, the bank's staff and clients. In the late 1890s, the Bulgarian government requested the transformation of the BIO's branches in the country into a fully fledged local bank. The BIO attempted to create a "Bank of Sofia" with support from Bleichröder and Berliner Disconto-Gesellschaft, but that did not succeed and all three Bulgarian locations were liquidated in 1899. In 1903,

17716-577: The authorities fueled inflation by issuing new Ottoman liras in the form of paper currency or kaime , as they had done during the Crimean War, which were later repurchased at a depreciated rate. On 24 April 1877, Russia in turn declared war on the Ottoman empire. Following protracted negotiations in London, the BIO led a new loan backed by the tribute from the Khedivate of Egypt , which was partly released from its pledging as collateral for prior Ottoman borrowing in 1854 and 1871, but its placement failed in December 1877 following Ottoman military setbacks at

17888-512: The bank would operate the Ottoman treasury in all provinces where it had a branch, and would open new branches where it was not already present. The BIO would receive a fee of 0.75 percent on all government financial transactions, and 1 percent on short-term government debt issuance. The BIO subsequently absorbed the Austro-Ottoman Bank at the Porte's request, and led a major Ottoman bond issuance in several phases, later in 1874 and early 1875. Nevertheless,

18060-535: The best way of achieving this. However, the Foreign Ministry had no solid proof of Serbian involvement. On 23   July, Austria delivered an ultimatum to Serbia, listing ten demands made intentionally unacceptable to provide an excuse for starting hostilities. Serbia ordered general mobilisation on 25   July, but accepted all the terms, except for those empowering Austrian representatives to suppress "subversive elements" inside Serbia, and take part in

18232-483: The border and pre-empt such a move. To avoid violating Belgian neutrality, he was told any advance could come only after a German invasion. Instead, the French cabinet ordered its Army to withdraw 10 km behind the German frontier, to avoid provoking war. On 2 August, Germany occupied Luxembourg and exchanged fire with French units when German patrols entered French territory; on 3   August, they declared war on France and demanded free passage across Belgium, which

18404-737: The branch in Shkodër in October 1914 following local turmoil. Some of the bank's branches hosted other public services. For example, the BIO branch in the eastern Anatolian city of Van also served as the local office of the Ottoman Tobacco Company , the Ottoman Public Debt Administration , and the Ottoman Post Office  [ tr ] . On 1 November 1914, the Ottoman Empire entered World War I against France and

18576-480: The campaign saw the first use of anti-aircraft warfare after an Austrian plane was shot down with ground-to-air fire, as well as the first medical evacuation by the Serbian army. Upon mobilisation, in accordance with the Schlieffen Plan , 80% of the German Army was located on the Western Front, with the remainder acting as a screening force in the East. Rather than a direct attack across their shared frontier,

18748-636: The capital of the recently annexed Bosnia and Herzegovina . Cvjetko Popović , Gavrilo Princip , Nedeljko Čabrinović , Trifko Grabež , Vaso Čubrilović ( Bosnian Serbs ) and Muhamed Mehmedbašić (from the Bosniaks community), from the movement known as Young Bosnia , took up positions along the Archduke's motorcade route, to assassinate him. Supplied with arms by extremists within the Serbian Black Hand intelligence organisation, they hoped his death would free Bosnia from Austrian rule. Čabrinović threw

18920-665: The case until then. On 26 August 1896, the BIO's new head office in Galata , inaugurated on 27 May 1892, was the scene of a dramatic episode, remembered as the occupation of the Ottoman Bank . Activists of the Armenian Revolutionary Federation stormed the building to draw international attention to the plight of Armenians in the Ottoman Empire that were the targets of the Hamidian massacres . The bank's managers negotiated their safe exit and transfer to Marseille . Even so,

19092-568: The chance of a decisive outcome, while it had failed to achieve the primary objective of avoiding a long, two-front war. As was apparent to several German leaders, this amounted to a strategic defeat; shortly after the First Battle of the Marne , Crown Prince Wilhelm told an American reporter "We have lost the war. It will go on for a long time but lost it is already". On 30 August 1914, New Zealand occupied German Samoa (now Samoa ). On 11 September,

19264-561: The convention of May 1874 became an object of controversy in Constantinople, not least among foreign powers other than France and the UK, namely the German Empire and especially the Russian Empire . It was renegotiated into an amended version, which was signed on 17 February 1875 and promptly ratified by Sultan Abdulaziz, with a reduction of the BIO's commission on treasury operations from 0.75 to 0.5 percent. The creation of new branches

19436-511: The cost of 199 submarines. World War I also saw the first use of aircraft carriers in combat, with HMS  Furious launching Sopwith Camels in a successful raid against the Zeppelin hangars at Tondern in July 1918, as well as blimps for antisubmarine patrol. Faced with Russia in the east, Austria-Hungary could spare only one-third of its army to attack Serbia. After suffering heavy losses,

19608-559: The creation of Crédit Général Ottoman , a rival institution sponsored by France's Société Générale and several Galata bankers including the Tubini family but also Christakis Zografos and Stefanos Zafiropoulo, who had been the BIO's partners in the SGEO venture. The Crédit Général Ottoman was a major underwriter of Ottoman treasury bonds, but ceased to operate in 1899. Two other competitors were promoted soon afterwards by Austria-Hungary , namely

19780-515: The creation of a separate bank that would focus on lending to local businessmen and local government. That "younger sister", named the Société Générale de l'Empire Ottoman (SGEO, "General Company of the Ottoman Empire"), had as initial shareholders the BIO itself together with a number of Galata bankers such as Aristide Baltazzi  [ de ] , the Camondo family bank , Boghos Mısırlıoğlu,

19952-513: The creation of new independent states, including Poland , Finland , the Baltic states , Czechoslovakia , and Yugoslavia . The League of Nations was established to maintain world peace, but its failure to manage instability during the interwar period contributed to the outbreak of World War II in 1939. Before World War II , the events of 1914–1918 were generally known as the Great War or simply

20124-449: The creation of strong defensive systems largely impervious to massed infantry advances, such as barbed wire , machine guns and above all far more powerful artillery , which dominated the battlefield and made crossing open ground extremely difficult. Both sides struggled to develop tactics for breaching entrenched positions without heavy casualties. In time, technology enabled the production of new offensive weapons, such as gas warfare and

20296-948: The crowds listened to music and drank wine, as if nothing had happened". Nevertheless, the impact of the murder of the heir to the throne was significant, and has been described by historian Christopher Clark as a " 9/11 effect, a terrorist event charged with historic meaning, transforming the political chemistry in Vienna". Austro-Hungarian authorities encouraged subsequent anti-Serb riots in Sarajevo . Violent actions against ethnic Serbs were also organised outside Sarajevo, in other cities in Austro-Hungarian-controlled Bosnia and Herzegovina, Croatia and Slovenia. Austro-Hungarian authorities in Bosnia and Herzegovina imprisoned approximately 5,500 prominent Serbs, 700 to 2,200 of whom died in prison. A further 460 Serbs were sentenced to death. A predominantly Bosniak special militia known as

20468-523: The debt problem, which the BIO kept advocating. The war and its aftermath affected the BIO's network. In Bulgaria, the recently created branch in Ruscuk was transferred in May 1877 to Varna . Its activity restarted in 1878 but was then again transferred to Varna. The BIO considered building it up into a national bank, as it had done in Romania in 1866, but that project failed given the new country's instability, and

20640-571: The dismissal in late April 1875 of its champion Hüseyin Avni Pasha. The BIO syndicated a number of new loans throughout 1875 but retained little of them on its own balance sheet. Starting with the Herzegovina uprising in July 1875, the Great Eastern Crisis resulted in renewed financial stress. On 6 October 1875, grand vizier Mahmud Nedim Pasha unilaterally decided and announced a change in

20812-476: The early 19th century, prominent sarraf families had coalesced into a community mainly based in the Galata neighborhood of Constantinople , known as the Galata bankers  [ tr ] which operated as family businesses. The first formal banking establishment that was not strictly family-controlled was a joint venture between the Ottoman state and two prominent Leventine Galata bankers, Jacques Alléon and Theodore Baltazzi  [ de ] , which took

20984-671: The expansion of the French colonial empire . In 1873, Bismarck negotiated the League of the Three Emperors , which included Austria-Hungary , Russia and Germany. After the 1877–1878 Russo-Turkish War , the League was dissolved due to Austrian concerns over the expansion of Russian influence in the Balkans , an area they considered to be of vital strategic interest. Germany and Austria-Hungary then formed

21156-543: The financial operations of the public treasury, pending the creation of a new national bank, which only came in 1931 with the establishment of the Central Bank of the Republic of Turkey . In line with the new circumstances, the bank's name was changed back to Ottoman Bank in May 1925; even so, it was the only institution allowed to keep the word "Ottoman" in its name. Two other conventions, respectively in 1933 and 1952, led to

21328-421: The financing of the Ottoman government, but reduced the exposures it retained on its own balance sheet. In 1886, it agreed on a restructuring of its outstanding loans to the government. It subsequently restarted short-term lending to the Ottoman treasury, but attempted to limit the corresponding amounts, which generated serious friction with finance minister Hagop Kazazian Pasha in the late 1880s. In October 1889,

21500-400: The first time on the Western Front. Several types of gas soon became widely used by both sides and though it never proved a decisive, battle-winning weapon, it became one of the most feared and best-remembered horrors of the war. In February 1916, the Germans attacked French defensive positions at the Battle of Verdun , lasting until December 1916. Casualties were greater for the French, but

21672-534: The front. Serbian and French troops finally made a breakthrough in September 1918 in the Vardar offensive , after most German and Austro-Hungarian troops had been withdrawn. The Bulgarians were defeated at the Battle of Dobro Pole , and by 25 September British and French troops had crossed the border into Bulgaria proper as the Bulgarian army collapsed. Bulgaria capitulated four days later, on 29 September 1918. The German high command responded by despatching troops to hold

21844-426: The full normalization of the Ottoman Bank's status as a commercial bank. In 1947, it redeemed its last circulating banknotes (all issued before 1914) and reimbursed them in gold at par, an achievement unmatched by any other note-issuing bank since the beginning of World War I. Under the direction of the BPPB, the Ottoman Bank kept its dual British–French structure with individual country operations allocated to one or

22016-408: The globe, some of which were subsequently used to attack Allied merchant shipping . These were systematically hunted down by the Royal Navy, though not before causing considerable damage. One of the most successful was the SMS  Emden , part of the German East Asia Squadron stationed at Qingdao , which seized or sank 15 merchantmen, a Russian cruiser and a French destroyer. Most of the squadron

22188-425: The government or the private sector, which led to a considerable erosion of its market share. Following the end of World War I, the BIO determined that its former activity as a state bank had limited prospects, and that its future lay in the expansion of retail, commercial and investment banking services in the eastern Mediterranean. Instead of relocating its head office to France as it had briefly considered in 1918,

22360-470: The government's financial agent both domestically and abroad. The bank would thus provide services of a central bank with simultaneous commercial operations, a combination that was not unusual at the time. These arrangements were enshrined in a concession agreement which Kamil signed on 27 January 1863 together with Fuad, foreign minister Mehmed Emin Âli Pasha , finance minister Mustafa Fazıl Pasha , and chief auditor Ahmed Vefik Pasha . On 4 February 1863,

22532-421: The high ground, while their trenches tended to be better built; those constructed by the French and English were initially considered "temporary", only needed until an offensive would destroy the German defences. Both sides tried to break the stalemate using scientific and technological advances. On 22 April 1915, at the Second Battle of Ypres , the Germans (violating the Hague Convention ) used chlorine gas for

22704-512: The imposition of war reparations on the Empire in the treaties of Bucharest and Constantinople , but did not obtain a reduction of the Ottoman debt in proportion to the Empire's territorial losses. The early years of the war period did not interrupt the rapid expansion of the BIO's branch network, with 31 openings from 1908 to 1914, despite the closing of Benghazi and Tripoli following Italy's victory in Libya . An advert of early 1914 lists 83 branches, sub-branches and offices, in addition to

22876-422: The investigation and trial of Serbians linked to the assassination. Claiming this amounted to rejection, Austria broke off diplomatic relations and ordered partial mobilisation the next day; on 28 July, they declared war on Serbia and began shelling Belgrade . Russia ordered general mobilization in support of Serbia on 30 July. Anxious to ensure backing from the SPD political opposition by presenting Russia as

23048-435: The issuance privilege. In response, the Ottoman bank reached out to the Pereire brothers and their Crédit Mobilier , who assembled a group of distinguished French investors. On 16 November 1862 in Paris, the British and French negotiators reached an agreement that foresaw the winding up of the Ottoman Bank and transfer of its business to a newly created institution. Negotiations in Constantinople followed in December 1862 between

23220-413: The latter would be a foreign national and ultimately report to the committees to be formed in London and Paris. The Porte would only appoint a Commissioner with limited powers of oversight. The issuance privilege would be initially granted for a duration of thirty years, and came with a full tax exemption. The bank would execute all financial operations of the Ottoman Treasury in Constantinople, and would be

23392-439: The line would not be profitable. From 1894 to 1897 it led the development of the railway from Smyrna to Afyonkarahisar , known as Smyrne Cassaba & Prolongements . In 1896, the BIO played a major role in the establishment of a coal mining company in Heraclea on the Black Sea shore, now Karadeniz Ereğli , the main coal mine in Asia Minor. During the 1880s, 1890s and 1900s, the BIO kept its dominant role in orchestrating

23564-422: The many languages of the Ottoman Empire . In Turkey after 1925, the bank increasingly operated under its Turkish name Osmanlı Bankası . The Ottoman Empire had traditionally relied on credit from individual financiers known as sarraf , which included not only Muslims but also Armenians , Greeks , Jews , and Levantines (long-established, mostly Catholic or Jewish families of western European descent). In

23736-405: The name of Banque de Constantinople in 1847 but was wound up in 1852. Another project, proposed as the Banque Nationale de Turquie by French entrepreneur Ariste Jacques Trouvé-Chauvel , was considered by the Ottoman government in 1853 but not implemented. During the Crimean War that started in October 1853, France and Great Britain were allied in support of the Ottoman Empire. In 1855,

23908-426: The new head office building that the BIO had erected for itself in Galata in 1892. From 1882, the Consortium sought to develop railways in the European part of the Ottoman Empire, or Rumelia , with the aim to connect Constantinople to Vienna. The Ottoman government in 1869 had granted the concession for what was known as the Chemins de fer Orientaux to international financier Maurice de Hirsch , who did not start

24080-464: The new port facility started operations on 1 January 1895. In 1891, the BIO participated in the creation of the Société des Chemins de fer ottomans économiques de Damas–Beyrouth–Hauran to build a railway connecting Beirut with Damascus and the Hauran region to its south, with the main Beirut–Damascus branch completed in June 1895. Further northwards extensions, however, turned out to be commercially and financially problematic, despite pressure from

24252-409: The ocean, even to neutral ships. Since there was limited response to this tactic, Germany expected a similar response to its unrestricted submarine warfare. The Battle of Jutland in May/June 1916 was the only full-scale clash of battleships during the war, and one of the largest in history. The clash was indecisive, though the Germans inflicted more damage than they received; thereafter the bulk of

24424-865: The old bank's operations in Constantinople to the new one had been completed on 1 June 1863. The governance concept of the BIO was unique and unprecedented. The two committees in London and Paris were not expected to meet jointly; instead, decisions by one committee became effective once ratified by the other committee. The annual general meetings of its shareholders were held in London. The original committees included: in London, Sir William Clay (chair), James Alexander, John Anderson, Thomas Charles Bruce , George T. Clark, William Richard Drake, Pascoe St Leger Grenfell , Augustus Edward Hobart-Hampden , John W. Larking, Lachlan Mackintosh Rate, and John Stewart; and in Paris, Charles Mallet  [ fr ] (chair), A. André, Vincent Buffarini, Raffaele de Ferrari , Achille Fould , Frédéric Greininger, Jean–Henri Hottinguer ,

24596-418: The other of the two committees. The Turkish bank itself and its subsidiaries in Syria, Lebanon and Yugoslavia remained under the Paris Committee. The London Committee managed the existing network in Cyprus and Egypt, and led new developments in Jordan (1925), Sudan (1949), Qatar (1956), Kenya , Uganda , Tanzania and Rhodesia (1958), Abu Dhabi (1962), and Oman (1969). Increasingly, this resulted in

24768-681: The protection of the " cruiser rules ", which demanded warning and movement of crews to "a place of safety" (a standard that lifeboats did not meet). Finally, in early 1917, Germany adopted a policy of unrestricted submarine warfare , realising the Americans would eventually enter the war. Germany sought to strangle Allied sea lanes before the United States could transport a large army overseas, but, after initial successes, eventually failed to do so. The U-boat threat lessened in 1917, when merchant ships began travelling in convoys , escorted by destroyers . This tactic made it difficult for U-boats to find targets, which significantly lessened losses; after

24940-425: The reconsideration of the Ottoman Bank project. Foreign investors had grown more confident about the reforming intent of the Porte. Mehmed Fuad Pasha had become Grand Vizier and was eager to see a bank emerge with an effective banknote issuance capacity. In line with the insistent position of France's ambassador, he made clear that British–French equality of participation would remain a necessary condition for granting

25112-515: The region remained uncertain, however, until the French authorities expelled Emir Faisal from Syria in July 1920. Subsequently in 1921, the Banque de Syrie acquired from the BIO all its branches in the region, while the BIO sold some of its shares to local business leaders. In October 1920, the Banque de Paris et des Pays-Bas (BPPB), together with the Banque Industrielle de Chine , the Crédit Foncier d'Algérie et de Tunisie , and Basil Zaharoff 's Banque Commerciale de la Méditerranée , acquired

25284-422: The replacement of the three French senior executives (namely Arthur Nias, Louis Steeg, and Isidore Dupuis) with their most senior colleagues who were Ottoman nationals, namely Georges Cartali, Marius Hanemoglou, and Berch Kerestejian . Nias instructed the latter to act as a collegial leadership, before traveling back to France together with Dupuis and Steeg. The other British, French, Italian and Russian employees of

25456-444: The return of peace with the Treaty of Lausanne in July 1923. During the war, the BIO endeavored to keep a position of neutrality and instructed its branches to cooperate with whichever forces were in control of the territory, while temporarily closing them if the local conditions made business entirely impossible. Its branch building in Smyrna, by then located on the waterfront, was entirely destroyed by fire on 15 September 1922 during

25628-446: The role of the BIO by making it the operator of all imperial treasury operations, including all revenue collection, expenditures, and short-term funding, with the aim to restore confidence in the state's financial discipline and thus improve its access to credit. The Porte sent senior official Mehmed Sadık Pasha to Paris to negotiate the new convention in April 1874, and the text was promptly signed there on 18 May 1874. It stipulated that

25800-454: The state's financing became less central, in part because of rising competition from the Banque de Salonique (despite the acquisition by the BIO of a minority stake in 1911), the Deutsche Orientbank , created in 1906 by three German competitors of Deutsche Bank, and the National Bank of Turkey , created in 1909 by financier Ernest Cassel . Following Ottoman setbacks in the Balkan Wars , the BIO and Deutsche Bank successfully lobbied to avoid

25972-488: The tense relationship between the two countries, that was refused by both governments later in June. The railway to Baghdad ended up dominated by German and affiliated interests, with only limited participation by the BIO. The BIO participated in the construction of the railway from Constantinople to Salonica from 1892 to 1896 (the greater part of which later became the Thessaloniki–Alexandroupoli railway ), but with no large financial commitment as it correctly anticipated that

26144-415: The term First World War was in September 1914 by German biologist and philosopher Ernst Haeckel who stated, "There is no doubt that the course and character of the feared 'European War' ... will become the first world war in the full sense of the word". For much of the 19th century, the major European powers maintained a tenuous balance of power , known as the Concert of Europe . After 1848, this

26316-509: The terms of reimbursement of the recent loans, without consulting the BIO, and later in 1875 the Ottoman authorities suspended the implementation of the February convention altogether. The Empire's security situation kept deteriorating with the April Uprising of 1876 in Bulgaria and the declaration of Serbian–Ottoman War in June 1876, as well as the successive depositions of Sultan Abdulaziz on 30 May 1876 and of his nephew and short-lived successor Murad V on 31 August 1876. In 1876 and 1877,

26488-584: The threat posed by the closing of this gap was more important than competing with the Royal Navy. After Germany expanded its standing army by 170,000 troops in 1913, France extended compulsory military service from two to three years; similar measures were taken by the Balkan powers and Italy, which led to increased expenditure by the Ottomans and Austria-Hungary. Absolute figures are difficult to calculate due to differences in categorising expenditure since they often omit civilian infrastructure projects like railways which had logistical importance and military use. It

26660-420: The three head office locations of Galata, London and Paris: In April 1914, the BIO sold its Macedonian branches of Monastir/ Bitola and Üsküb/ Skopje to the Banque Franco-Serbe (BFS), established in 1910 and in which the BIO had an equity interest. Facing hostility from the Bulgarian government which had taken over Dedeagac , Gyumyurdjina and Xanthi , it had to liquidate all three branches. It also closed

26832-519: The two nations sent a joint mission to assess Ottoman finances, led by Alexandre de Plœuc  [ fr ] for France and Augustus Edward Hobart-Hampden for the UK, who would later become respectively the first and second General Managers of the Imperial Ottoman Bank in Constantinople. In early 1856, Sultan Abdulmejid I called for modern banks to be created in the Empire to improve its financial system and foster economic development. Three main projects emerged in response, respectively promoted by

27004-449: The wake of the Serbian territorial gains at the Treaty of Bucharest (1913) , the BFS in 1914 took over the former BIO branches in Bitola and Skopje . During World War I , its activity in Serbia was suspended and its local gold reserves were shipped by the French Navy to Marseille via Thessaloniki . By 1925, it had additional branches in Fiume , Thessaloniki , and Zagreb , and by 1930 also in Niš . Following financial difficulties,

27176-429: The war ended with the Armistice of 11 November 1918 . The Paris Peace Conference of 1919–1920 imposed settlements on the defeated powers, most notably the Treaty of Versailles , by which Germany lost significant territories, was disarmed, and was required to pay large war reparations to the Allies. The dissolution of the Russian, German, Austro-Hungarian, and Ottoman Empires redrew national boundaries and resulted in

27348-413: The war involved British, French, and German colonial forces in Africa. On 6–7 August, French and British troops invaded the German protectorates of Togoland and Kamerun . On 10 August, German forces in South-West Africa attacked South Africa; sporadic and fierce fighting continued for the rest of the war. The German colonial forces in German East Africa , led by Colonel Paul von Lettow-Vorbeck , fought

27520-418: The west , which despite initial successes left the German Army exhausted and demoralised. A successful Allied counter-offensive from August 1918 caused a collapse of the German front line. By early November, Bulgaria, the Ottoman Empire and Austria-Hungary had each signed armistices with the Allies, leaving Germany isolated. Facing a revolution at home , Kaiser Wilhelm   II abdicated on 9 November, and

27692-444: The works and in 1882 approached the BIO with the aim to exit the venture. After several years of negotiations, the BIO in 1885 led the formation of the Société de construction des lignes de raccordement des chemins de fer de Roumélie , which pledged to build railway lines to the respective borders of Bulgaria and Serbia. Eventually, Hirsch sold his concession in 1890 to a group formed by Deutsche Bank and Wiener Bankverein in which

27864-436: Was a generally loss-making proposition for the BIO and consequently fell well short of the convention's stated ambitions, with only three new locations opened in 1875 in Bursa , Edirne and Ruscuk plus a sub-office of the Beirut branch in Damascus . More generally, the implementation of the convention and of the BIO's new role quickly ran into practical difficulties and opposition from local government officials, compounded by

28036-432: Was a major factor in the deadly Spanish flu pandemic. The causes of World War I included the rise of Germany and decline of the Ottoman Empire , which disturbed the long-standing balance of power in Europe, as well as economic competition between nations triggered by industrialisation and imperialism . Growing tensions between the great powers and in the Balkans reached a breaking point on 28 June 1914, when

28208-403: Was challenged by Britain's withdrawal into so-called splendid isolation , the decline of the Ottoman Empire , New Imperialism , and the rise of Prussia under Otto von Bismarck . Victory in the 1870–1871 Franco-Prussian War allowed Bismarck to consolidate a German Empire . Post-1871, the primary aim of French policy was to avenge this defeat, but by the early 1890s, this had switched to

28380-404: Was conditional on attracting an international set of investors including a group from the UK, which failed to materialized in April 1903 because of negative British public perceptions about participation in a German-led endeavor. Through negotiations in Berlin in June, the BIO and Deutsche Bank produced a revised concept that maintained the appearance of equality between France and Germany, but given

28552-426: Was eventually subsumed in 2001 into the Garanti Bank operations and corporate identity, in turn rebranded Garanti BBVA in 2019. During its heyday between 1863 and 1925 the bank was generally referred to using its French name, banque impériale ottomane (BIO), even in English-speaking contexts. This was because French was the international language of the era and especially prominent in the business community among

28724-409: Was initially conceived by two businessmen, Peter Pasquali et Stephen Sleight, who had participated earlier in 1856 in the creation of the Bank of Egypt, the first Egyptian joint-stock bank. The project benefited from the support of such influential diplomats as George Villiers, 4th Earl of Clarendon and Stratford Canning, 1st Viscount Stratford de Redcliffe , in contrast to the Pereire initiative that

28896-585: Was not much supported by French ambassador Édouard Thouvenel . As was customary at the time for an enterprise that would operate abroad, the British authorities sought approval from the Ottoman government, and once that was confirmed in April 1856, the bank was chartered on 24 May 1856 as an English entity with seat at 26, Old Broad Street in London. The group of financiers that supported it also included Thomas Charles Bruce , William Richard Drake, Pascoe Du Pré Grenfell, Lachlan Mackintosh Rate, and John Stewart. The Ottoman Bank then sought an issuance privilege from

29068-654: Was refused. Early on the morning of 4   August, the Germans invaded, and Albert I of Belgium called for assistance under the Treaty of London . Britain sent Germany an ultimatum demanding they withdraw from Belgium; when this expired at midnight, without a response, the two empires were at war. Germany promised to support Austria-Hungary's invasion of Serbia, but interpretations of what this meant differed. Previously tested deployment plans had been replaced early in 1914, but those had never been tested in exercises. Austro-Hungarian leaders believed Germany would cover its northern flank against Russia. Beginning on 12 August,

29240-600: Was returning to Germany when it sank two British armoured cruisers at the Battle of Coronel in November 1914, before being virtually destroyed at the Battle of the Falkland Islands in December. The SMS Dresden escaped with a few auxiliaries, but after the Battle of Más a Tierra , these too were either destroyed or interned. Soon after the outbreak of hostilities, Britain began a naval blockade of Germany . This proved effective in cutting off vital supplies, though it violated accepted international law. Britain also mined international waters which closed off entire sections of

29412-586: Was the foundation of German foreign policy but in 1890, he was forced to retire by Wilhelm II . The latter was persuaded not to renew the Reinsurance Treaty by his new Chancellor , Leo von Caprivi . This gave France an opening to agree the Franco-Russian Alliance in 1894, which was then followed by the 1904 Entente Cordiale with Britain. The Triple Entente was completed by the 1907 Anglo-Russian Convention . While not formal alliances, by settling long-standing colonial disputes in Asia and Africa, British support for France or Russia in any future conflict became

29584-463: Was to preempt competition from new peers such as the Banque de Salonique in Macedonia. Unlike in the past, the new branches quickly generated profits, and the BIO's commercial banking operations became increasingly dominant in its overall activity. From the start of the Italo-Turkish War in September 1911, the Ottoman Empire entered a protracted period of near-continuous military engagements which put yet more strain on its finances. The BIO's role in

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