Persian Empire 1845

Chapter 574 The Ottoman Financial System

Furthermore, Aziz's invitation to the Iranian Crown Prince was also an attempt to win them over as allies in the fight against Europe. No matter how bad things are, Iran is still one of their own, better than those infidels in Europe.

Moreover, their old friend France was defeated by Germany, which also affected their trade.

Trade with France accounted for half of Ottoman trade, and this impact directly brought trade to a standstill. The situation was dire in various regions; the port of Izmir was overflowing with goods destined for France. Only Iran had the capacity to absorb this demand.

“In Sudan, there are large quantities of goods piling up everywhere. And most of them have a very short shelf life and must be exported immediately.”

Grand Vizier's words pulled Aziz out of his anger. Ottoman agricultural products had to be exported as soon as possible. The farmers were already unstable, and if this route was cut off, they would surely rebel.

Moreover, Austria coveted Bosnia. Russia rekindled its ambitions for the Ottoman Empire, supporting Serbian and Greek uprisings and destabilizing the Ottoman Balkans. At this juncture, Iranian support was essential.

"Is this country... is this country beyond saving?!"

After saying that, Aziz looked around. Where was his finance minister?
Despite his anger and anxiety, Aziz had no choice but to patiently appease the Iranian delegation, while Murad went directly to the Iranian quarter of Constantinople after the banquet to meet with local Iranian businessmen.

This area was once an important commercial district in Constantinople, dominated by the French and Ottomans, but now largely occupied by Iran. Constantinople is also filled with Iranian goods, and the artisans have become employees of Iranian industry and commerce.

Sargsyan and Bayar stood at the front to welcome the prince. As royal property, the Sepa Trading Company received unparalleled attention elsewhere.

“Your Highness’s presence here shows how much the Shah values ​​us. We are deeply moved.”

Murad responded to Sargsyan's words, saying that Iranian merchants in the Ottoman Empire had made great sacrifices to maintain trade between the two countries, and that the Shah had sent him to express his condolences.

"Long live the Shah! Long live Iran!"

The deafening shouts echoed throughout the block, and the Ottomans, witnessing this scene, felt not only anger but also sorrow. They were no match for their arch-enemy; what could they do?
Murad entered the lobby of the Sepa Trading Company and saw the Golden Horn painting on the wall. He then spoke with the staff for a few minutes, learning about their work and daily routines. Afterward, he went to the lounge at the back of the trading company, where someone was already waiting for him.

“Shah, this is Kamil Pasha, in charge of the Ottoman’s finances.”

Kamil Pasha gripped Murad's hand tightly. His future was now firmly tied to Iran. The Ottoman Empire was finished; they had to abandon ship!

"Hello, Camille Pasha."

"Hello, Your Highness."

Camille chose to meet here for security reasons; the Sudanese wouldn't dare enter. This was necessary for the transaction to proceed.

"I had long heard that Camille Pasha had devoted himself to the Ottoman Empire's finances, even taking out loans with exorbitant interest rates."

"There's nothing we can do, Your Highness. Ottomans haven't had much income in recent years; what they have has been wasted elsewhere."

The Ottoman Empire is now over £1 million in debt, and even three years' worth of revenue wouldn't be enough to pay it off. Every Chancellor of the Exchequer faces this situation; the Ottoman Empire's financial crisis has persisted for decades. It's a cycle of robbing Peter to pay Paul, constantly borrowing to cover existing debts. Furthermore, due to tariff agreements with Europe, the Ottoman Empire is unable to generate revenue through increased tariffs, naturally leading to a worsening economy. Among these debts is a loan of 2300 million rials to Iran.

"We are aware of Camille Pasha's difficulties, but our country cannot provide loans..."

“It’s not a loan,” Camille quickly interrupted, rubbing his hands together. “Your Highness, what I mean is… could you provide my family with some kind of security?”

Murad understood; this was an attempt to align with Iran. He said, "But your position in the Ottoman Empire is quite high; are you really willing to give it up?"

“I’m willing! You don’t know how troublesome it is here. We have to raise enough funds to cover the expenses, and we also have to consider the impact of tax increases and loans on the country. If we’re not careful, we can be accused of being traitors.”

Sudan and others are unwilling to fight for even the slightest benefit for the country; they only think about how to get more money.

Camille was about to pour out all the grievances she had suffered over the years. She had been Chancellor of the Exchequer for five years, and she exclaimed, "Do you know how I've lived these past five years? It's been hell!"

Murad felt a pang of sympathy at these words; how could things be so dire? If it were on their side, the position of finance minister would be something everyone would want.

Beyond simply complaining, Camille also provided some crucial intelligence. Most importantly, he revealed details about the Ottoman banking system.

Ottoman banking was at a critical juncture in its transition from traditional to modern, its system comprised of a few landmark modern banks and traditional financial entities. The main banks included three.

First was the Ottoman Bank, the most important and core bank, essentially acting as a central bank. Established by a British and French consortium and granted a charter by the Ottoman government, it was the absolute pillar of the financial system.

Then there was Credit Ottoman, a purely French bank primarily focused on financing public works and infrastructure projects for the Ottoman government, while also engaging in some commercial banking activities. It was a major competitor of Bank Ottoman.

Finally, there was the Ottoman Discount Bank, also a foreign bank, but much smaller than the previous two. These banks operated under the protection of the European "surrender treaty" system, enjoying privileges such as tax exemption and extraterritoriality, and were virtually unaffected by Ottoman law.

“Hmm, do we have a bank in the Ottoman Empire?” Murad asked Rabbani.

"Yes, Your Highness, the Industrial Bank and the Trade Bank have branches in Ottoman. In addition, the Golden Lion Bank and the Banque de l'Indochine have branches in Constantinople."

The current situation is this: mainstream Ottoman finance is controlled by these European banks, with Iran holding only a small portion. If the banks could be brought under control, no matter how much Europe protests, it would be futile.

How is this credit bank doing lately?

"I'm not entirely sure, but they are French banks, which were significantly affected by the war."

Murad's eyes lit up; he decided to intervene from there.

(End of this chapter)