Mohamed Talaat Pasha Harb Contributions to Egypts National Development and Banking System

Contributions of Mohamed Talaat Pasha Harb to Egypt’s National Development and Banking System Brief Biography Born on 25th November, 1867 in Cairo’s El- Gammalia, Mohamed Talaat Pasha Harb is considered one among the greatest personalities who contributed to Egypt’s overall national growth and development. He studied art, science, economics, literature, and French. After acquiring a law degree, he commenced his career in the role of translator in the Royal Circuits’ Lawsuits Section, responsible for state- owned farmland.

Though favoring free enterprise, he was quick to climb the rungs of the career ladder, landing the position of lawsuits section manager (53-75)3. His subsequent posts as manager were at various organizations including Kom Ombo Company (a firm that actively reclaimed and sold land) and the Egyptian Real- Estate Company (where he ensured citizens of Egypt held most of the shares).

He penned numerous books, including “The Economic Remedy of Egypt and Creating the bank for Egyptians or the Nation’s Bank” (November 1911), wherein he states that: “We need a genuine Egyptian bank…” to function alongside extant banks, aimed at aiding Egyptians by motivating them to take up commercial and industrial activities, advising them to consider saving, and employing progressively popular financial activities (189-196)2. This concept was published a number of times in numerous national newspapers, prior to disappearing.

Mohamed Talaat Pasha Harb seized at his chance to articulate his idea of setting up an Egyptian national bank at the foremost Egyptian Conference which had several influential national personalities in attendance, as well as the Conference Committee (84-96)4. A unanimous decision was reached to implement this plan, and Mohamed Talaat Pasha Harb was chosen to go to Europe and undertake an in- depth research of European national banks (including how they operated).

After the publication of his book on banking, all citizens of Egypt became confident that the idea would work, and pushed for its adoption. But the onset of the First World War (on 4th August, 1914), meant the idea remained an idea.

Impact on Egypt's National Independence With the culmination of the war in the year 1918 and Egypt’s revolution the following year came the first incentive to create BANQUE MISR, in order for the nation to attain economic independence, which would reinforce its newly- acquired political freedom.

Mohamed Talaat Pasha Harb began re- advocating for the aforementioned venture in front of influential entities. Occupation authorities had resorted to every means possible to cast doubts on the project’s value, even hinting that the people of Egypt lacked the necessary qualifications and competency to carry out such an initiative successfully (53-75)3. Contributions to Egypt's Banking Sector Mohamed Talaat Pasha Harb successfully convinced a total of 126 countrymen to chip and help institute BANQUE MISR. A total of 80,000 pounds were collected (20,000 shares, with 4 pounds for each share).

Abdel Azeem El- Masry Bek, a Maghagha notary, bought the largest number of shares (1,000 in number). On Tuesday, 13th April, 1920, the nation’s official newspaper ‘Al-Waqaae Al-Masriya’ issued the decree to establish “BANQUE MISR” – a joint-stock national firm whose articles of association were formulated by 8 shareholders: Abdel Azeem El- Masry Bek, Ahmed Medhat Yakan Pasha, Mohamed Talat Harb Bek, Yousef Aslan Qatawy Pasha, Abdel Hameed El- Sioufy Effendi, Dr. Fouad Sultan, Abbas Basiouny El- Khateeb Effendi, and Eskandar Messiha Effendi.

The above 8 individuals represent all three major religions of the country – proof that a genuine sense of national unity united citizens in the era of revolution (189-196)2. An informal deed was made on 8th March, 1920, one year following the landmark Egyptian revolution. It was registered in under 30 days (i.e., on 3rd April, 1920) (84-96)4.

According to the company’s preliminary deed, the goal of the organization was performing every kind of banking operation, like accepting deposits, credit allowance against goods, exchange, securities, documents, commission, deductions, opening credits and accounts, participation in bond issuance, purchase and sale of securities and bonds, and other such banking activities.

Furthermore, the deed declared that the capital of the bank could be increased if the general shareholder assembly agreed, and the responsibility for the bank’s management would be delegated to a directorial board comprising of 9 general assembly- voted members, at the least, and 15 members, at most. The initial directorial board of the company, comprising of the following members, was a unique exception of the above- stated rule: Abdel Azeem El- Masry Bek, Mohamed Talat Harb Bek, Ahmed Medhat Yakan Pasha, Dr.

Fouad Sultan, Yousef Aslan Qatawy Pasha, Aly Maher Bek, Abbas Basiouny El- Khateeb Affandi, Yousef Cicurel Bek, and Abdel Hameed El- Sioufy Affandi (53-75)3. Ahmed Medhat Yakan Pasha was chosen by the remaining board members as the company’s Chairman, with Mohamed Talat Harb Bek selected as Managing Director and Vice Chairman (a post he held until the year 1939). According to the deed, a minimum of 250 shares were to be held by members of the directorial board throughout their tenure as board members.

Additionally, the deed declared that shareholders possessing less than 5 shares would not be made general assembly members (234-255)5. On Friday evening (7th May, 1920), the BANQUE MISR’s institution was marked with a celebration (189-196)2. The basic aims of the company were: 1) Establishing a national bank having an all- Egyptian management, capital, and workforce, and using Arabic as its official language; and 2) Moving national economic development from agrarian investment to investment in industry and proving that Egyptians were competent (234-255)5.

Impacts on the National Economy According to Mohamed Talaat Pasha Harb, prior industrial undertakings didn’t fail because of Egyptians’ incompetence or the fact that it was an agrarian economy. He held a definite vision of setting up a national industrial sector that employed citizens’ savings channeled via its national bank – BANQUE MISR (84-96)4. This would serve to make the public understand the significance of judicious saving for future lucrative investment.

BANQUE MISR’s goals were clearly articulated, to connect society and the nation’s diverse economic sectors. The presence of a national industrial sector would prove highly valuable to other sectors like commerce, finance, and transportation, helping them operate more effectively. Mohamed Talaat Pasha Harb came up with a superior planning strategy grounded in his faith in BANQUE MISR’s value, which he instituted as the holding firm for numerous independent organizations that would ultimately result in the bank’s as well as other economic areas’ progress (189-196)2.

Mohamed Talaat Pasha Harb’ ingenious strategy resulted in major national economic developments that were greatly connected to BANQUE MISR activities or those of its companies. In a short time span (1920-1938, to be precise), he successfully instituted a large number of organizations (53-75)3.

To achieve this, he relied on an innovative strategy of allocating BANQUE MISR’s partial yearly profits (those funds earmarked, within the company’s balance sheet, for establishing or developing Egyptian trading and industrial companies) towards the capitals of organizations for enabling control of their policies. Meanwhile, the remaining capital was offered to the public. Mohamed Talaat Pasha Harb’s BANQUE MISR was no ordinary commercial banking organization.

To its founders, the company represented a means of collecting citizens’ savings and wisely investing them in the establishment of Egyptian organizations that were then able to manufacture affordably- priced, superior- quality products to meet all the myriad needs of Egyptian citizen. Therefore, BANQUE MISR became a holding firm through other firms’ establishment, all of which shared the objective of complementing one another (an integrated economic activity, in economic terms) (189-196)2.

The abovementioned organizations weren’t mere financial organizations that solely aimed for material profits; rather, they were industrial establishments which attempted at meeting basic local market needs and were also, simultaneously, technical training institutes for students in diverse arenas including finance, industry and economics (33-67)10. BANQUE MISR continually performed its noble national mission, spreading across the nation and offering the citizens of Egypt what foreign banks failed to offer (84-96)4.

BANQUE MISR faced a crisis, orchestrated by the National Bank of Egypt (NBE) and British occupation, denying the bank credit against its securities portfolio; to make matters worse was the government’s negative stance, allowing withdrawal of all Postal Savings Fund (PSF) deposits from the bank (53-75)3.

The brains behind the bank, the great Mohamed Talaat Pasha Harb, requested a meeting with Finance Minister, Hussain Serry Pasha, seeking approval of any of the following alternatives: 1) Issuance of a statement by the government guaranteeing customers’ deposits with the bank; 2) Order- freezing PSF deposits withdrawal; or 3) Instructing the NBE to offer BANQUE MISR credit against its portfolio (189-196)2. The Finance Minister agreed, though.