The Sun.
London, England, 1857-01-10 00:00:00

THE TURKISH NATION,iL BANK.

(From a Correspondent of the Times.)
CONSTANTINOPLE, Dec. 29.

I wrote to you in one of my last letters that the
affair of the National Bank had been more vigor-
ously taken up, and that orders had been given by
the Grand Vizier to the commission which was
named for this purpose by the late Ministry to do
something decisive. This has been attempted,
with what success you will see. As was expected,
the commission, after a rather stormy discussion,
came out the day before yesterday with a new pro-
ject. All the competitors were summoned to the
Porte, called in separately, and each received a
copy of the new project.

The project says chat the Government, desirous
of establishing a bank, will grant an exclusive pri-
vilege for 30 years for the formation of an Imperial
and National Bank. The capital of the bank is to
consist of from 10,000,0001. to 12,000,0001. ster-
ling, of which 8,000,0001. will be appropriated to
the redeeming of kaimes' sahims, and beshliks
(paper money and debased currency), and the rest
for purposes of commerce, industry, and agricul-
ture.

The statutes of the bank are to be framed after
the model of similar banks in France and England.

Adopting the principle of fusion, the contractors
oblige th3mselves to open subscriptions in England,
France, Germany, and Turkey, and leave these lists
open and free to everybody in those countries for a
certain time.

For all the advances which the bank may make
to the Government for the above-named purposes,
namely, the redeeming of the paper money and of
the debased currency, the Government will pay 6
per cent, at par and no commission.
The Government is to appoint the governor of
the bank and a limited number of directors ; the
rest of the directors are to be appointed by the
subscribers, in proportion to the sum subscribed by
each of the above-named four countries.

The contractors are to deposit 200,0001. sterling
as a guarantee.

Tlie bank is to begin its functions six months
after the delivery of the firman.
I suppose it will not surprise you to hear that
the proposal was received with almost unanimous
astonishment. Indeed, three of the competitors,
the Ottoman Bank, the agents of the house of
Rothschild, and the representatives of the native
association, declared immediately that they could
not for one moment entertain the proposal. Messrs.
Wilkins alone, I hear, gave no decided refusal, and
promised to consider the project.
The first thing which must strike every one who
reads the project is, that the men who conceived it
must live in a far more remote fable land, secluded
entirely from the rest of the world, and certainly
totally ignorant of what is passing in the money
market of Europe; for, unless they suppose that
the title and privilege of an lmperialßank in Tur-
key will lend the possessors the magic wand which
gilds everthing which it touches, they could not ask
the fortunate company to begin its life only with
a capital of 10,000,0001. to 12,000,0001. You
will know far better than we can here how im-
possible this would be even with the most favour-
able conditions; how much less, then with the
burdens with which the Imperial and National
Bank is to be charged, especially as the mode of
raising this large capital is the very way calculated
to prevent capitalists from embarking in the enter-
prise 1

- There would be, perhaps, capitalists willing to
advance, under guarantee, to the Turkish Govern-
ment the sums required for the withdrawal of the
debased currency and other purposes, but if these
sums are to form part of the capital of the bank
the thing becomes different, and I believe that
there will be not many who will lend their money
under the condition of being obliged to enter into
a commercial speculation of the nature of a bank,
and to identify themselves with its ups and downs.
Then, to oblige the contractors to take upon
themselves from the first moment the withdrawal
of the paper money and debased currency to the
amount of two-thirds of the entire capital before
even this capital is got together, is making the
bank, so to say, insolvent before it is constituted.
Another not less important objection is the 6 per
cent. interest, which the Government promises
to pay at par and without a guarantee to the
bank for the advances made for the withdrawal
of the paper currency. Even with a Turkish
guarantee, very few will be fool 3 enough to
place their money in an enterprise where the
greater part of the capital is to be invested
at 6 per cent., when they can get 6i per cent.
anywhere in Europe. The fact is, the Turks see
that Russia gives only 5 per cent. for railways, but
they don't see, it seems, that 16,000/. are promised
per mile on a road which on an average will cer-
tainly not cost more than 10,0001.
But the most absurd thing is the idea of fusion,
as understood by the commission, prescribing to
the company where to get their capital, as if it was
not enough to let them try whether they can get it
at all.

There would be perhaps no objection to have a
governor or commission appointed to see that the
statutes of the bank are exequted ; but how can a
company agree to have " the limited" number of
directors appointed by the Government, who, igno-
rant of the a, b, c of finance, would be voting on
affairs which " their philosophy never dreamt of ?"
Thus it seems to me there is not an article in the
project which is not open to the strongest objec-
tion, and the whole is a valuable, or rather in-
valuable, specimen of Turkish financial wisdom.
The commission seems to think that financial
reform may be blown up as suddenly as soap
bubbles, instead of understanding that in a country
in which such financial disorder exists there must
be a moderate beginning.