The Sun.
London, England, 1856-08-28 00:00:00

AN IMPERIAL OTTOMAN

BANK.

The particulars published to-day in the advices
from Constantinople of the terms proposed by the
Turkish Government for the establishment of a
National Bank exactly confirm the telegraphic in-
formation given in the Tiinms of the 9th inst. Some
farther details are at the same time added which

tend to increase the objectionable and unbusiness-
like features of the scheme. The general conditions
are as follows :—The Bank is to have a capital of
3,000,0001., of which 600,0001. is to be paid up
immediately and deposited in the Bank of England
or the Bank of France ; the institution, within the
limits of its statutes, is to be entirely independent,
but a certain number of the directors are to be
Turkish subjects, and the nomination of the Go-
vernor is to be in the hands of the Government ;
the central establishment is to be at Constantino-
ple, but such branches may be opened as the Go-
vernment may designate. No money is to be lent
to the Government, but, in order to aid agriculture
advances are to be made both upon fixed and
available property, under a mortgage law to be
framed for the purpose ; the Bank will be confined
to a maximum rate of discount, and also to a
maximum rate of allowance forloans or deposits, it
is to have an exclusive right to issue notes, pay-
able on demand, to the amount of 3,000,0001.,
which are to be a legal tender ; and the Govern-
ment are to withdraw all their existing paper
money, and to bind themselves never to resort to a
new issue, or thenceforth alter their monetary sys-
tem. Accounts are to be published periodically,
and the charter is to exist for 25 years. In return
the Bank are to invite subscriptions for a Five
per Cent. loan for 5,000,0001. at 90, to be employed
in the redemption of the depreciated currency.
A proportion of this loan must be taken by
the Bank, it being a condition that the con-
cession for its establishment shall be granted
to such persons as may offer to take thelargest
sum. The loan is to be specially secured by the
tribute of the Principalities, and the instalments
paid are to be employed in the purchase of Turkish
bonds when they are not immediately required for
the extinction of the debased currency, which must
necessarily be a work of time. Some of these regu-
lations are not only unexceptionable, but are such
as must necessarily be stipulated before any persons
would entertain the idea of committing themselves.
to the undertaking. Among these, the provision
that no money is to be lent to the Government, or
any of its departments, is most essential. The main
defects of the scheme consist in the attempt to con-
trol the value of money, by fixing the maximum
rates at which the bank shall either lend or borrow
(a feature which, together with the nomination of
the Governor by the State, seems iu harmony with
French rather than English ideas), and the offer
to grant :the concession to any persons who will
make the most reckless bidding for it, instead of
selecting the most solid financial names that could
be attracted. It is believed, however, that since
the issue of these proposals the Turkish Govern-
ment have seen the necessity of modifying them,
and that, as was mentioned in the Times of the
13th, a leading European house, in conjunction
with other capitalists, native and foreign, is now
seriously negotiating on the subject. Should the
concession ultimately he adjudicated to inferior
persons, it is to be hoped all London capitalists will
shun the undertaking, since, notwithstanding the
provision that no advances are to be made to the
Government or its officers, any set of people not
sufficiently honest or independent to resist impro-
per influences would soon evade the precaution by
discounting Treasury bills without limit, and treat-
ing the notes of Government functionaries as if
they were commercial 'paper. Reasons for regard-
ing all Turkish projects with caution have been
furnished moreover by the conduct of the Go-
vernment in the preliminaries of this scheme,
which above all others should have been scru-
pulously managed, but which is alleged to have
served for the display of an amount of bad
faith that must retard for some time the revival of
that confidence which was originally broken by the
intrigues connected with the first loan. It is
rumoured, likewise, although nothing yet has pub-
licly transpired on the subject, that the most re-
spectable contractors and capitalists who have
lately entered into negotiations for Turkish rail-
roads are experiencing the impossibility of relying
even upon the most unqualified and definite assur-
ances proceeding from Constantinople.—Times'
City Article.