Girdap
Encyclopedia
Girdap or Ghirdap was the first privately-owned Bulgaria
n bank. Established in Ruse in 1881, until its closure in 1925 it was one of the two large Bulgarian banks which relied on capital that was both private and local, along with the Bulgarian Commercial Bank. Prior to the Balkan Wars
and World War I
, Girdap was among the six largest banks in Bulgaria, and during the wars its financial group was the most influential in the country.
from Ottoman
rule and the establishment of the Principality of Bulgaria
. At the time, the northeastern Bulgarian city of Ruse was a major economic hub. Ruse prospered due to its role as a major port on the Danube
, its rapid industrial development and its well-established ties with Central Europe
along that river. Banking, however, was a new concept, as most people employed the services of money lenders and entrusted their savings to people they knew personally. The founders of Girdap sought to "liberate the population of money lenders", in the words of later bank director Boncho Boev. Due to an overall lack of capital in the country, interest rates of loans given by Girdap were nonetheless high: 15–18% as compared to the over 20–30% interest rate of money lenders. The bank officially commenced operations on 1 January 1882. It took its name from the Girdap neighbourhood of Ruse where the constituent assembly was held.
The capital of Girdap at the time of its foundation amounted to 1,380 Bulgarian gold leva
, though by the end of 1882 it had increased fivefold to 6,900 gold leva. In 1886, the capital of Girdap amounted to 70,300 leva; in that year, the bank hired a clerk for the first time. In the year of the company's 10th anniversary, 1891, it disposed of 300,000 leva, and in 1894 its capital had increased to 1,000,000 leva. Founded as a depositor's company, it was transformed into a joint-stock credit company
in 1894. In 1898, Girdap's capital was 1,500,000 leva and a new company statute was approved, which extended the board of managers to 12 members. These included Ruse's wealthiest and most eminent people, most notably the chairman Stefan Simeonov. In the autumn of 1902, Girdap opened its first branch offices outside Ruse: in the port of Varna
on the Black Sea
coast, in the Dobruja
n city of Dobrich
and in Istanbul
(Constantinople
), the capital of the Ottoman Empire and largest city of the Balkans
. In Istanbul, the bank was known under a French
name, Société de Crédit Ghirdap, though the branch only existed for 18 months and was closed down due to political pressure. An office in Silistra
was opened on 1 August 1910.
Ever since its establishment Girdap served political interests, and it was later tied to the Popular Liberal Party of Stefan Stambolov
. On the other hand, the Bulgarian Commercial Bank (Balgarska targovska banka), which was also founded in Ruse in 1885, was close to the Popular Party. The two banks competed for lending municipal loans and regularly used their political ties in their competition. These relations were often damaging to the Bulgarian treasury, as politicians who were also bank shareholders or somehow related to Girdap awarded contracts based on their personal interest rather than that of the state. As the Bulgarian economy
consolidated in the first decade of the 20th century and the emerging industry required increasing funds, local banks grew in importance. In 1911 Girdap had a capital of 2 million leva and by 1912 it was the third-largest private bank in the Kingdom of Bulgaria
after the Bulgarian Commercial Bank and the Deutsche Bank
-related Credit Bank (Kreditna banka). However, Bulgaria's privately-owned banking sector remained comparatively small.
and World War I
(1912–1918), when it became the leading financial group in the kingdom and remained close to the government. It controlled some 83.97 million leva of invested capital, which put it ahead of the General Credit Society, the Balkan Bank and the Bulgarian Commercial Bank financial group. During the wars, Bulgarian banks established filial companies or invested in new enterprises. Girdap was no exception to that trend.
One of Girdap's notable enterprises was the international transport company Transbalkania which had a capital of 100,000 leva. Of the company's 500 shares, 200 were owned by Girdap and another 170 were owned by three of the bank's managers or employees. Liquidated after World War I
, Transbalkania was active as a carrier from Bulgaria to Edirne
, Alexandroupoli
, Thessaloniki
and Niš
and along the Danube. During the wars, Girdap was involved in tobacco
trade and had warehouses in modern Dupnitsa, Blagoevgrad
and Xanthi
. This led to the establishment of another Girdap venture, the Bulgarian Macedonian Bank (Balgarska makedonska banka), on 21 May 1916. The Bulgarian Macedonian Bank was mostly active as a commercial bank, which is indicated by its capital of 46.95 million leva as opposed to only 13.31 million leva of deposits. Other banks more or less related to Girdap included the Sofia Bank (Sofiyska banka, established in 1906), the Bulgarian Forest Commercial Bank (Balgarska gorsko-targovska banka, established in 1917), and the Bulgarian Surety Bank (Balgarska garantsionna banka, established in 1912). The Pleven
-based Lev cement
factory was founded in 1917 with Girdap board of managers member Ivan Kovachev as chief shareholder. Ninety percent of the capital of the Kurilo
mine in the Iskar Gorge
was controlled by Girdap or its head figures Ivan Kovachev and Boncho Boev. Despite Girdap's active involvement in assistance to national industry, it failed to make a significant contribution and gradually minimized its participation due to insufficient profits.
After World War I, Girdap was deprived of its government protections, as it had no links to the new agrarian government of Aleksandar Stamboliyski
. In 1919 Boncho Bonev was imprisoned in Berkovitsa
for eight months before he was acquitted, Ivan Kovachev was put on trial, and the bank's funds were sealed. In 1922, the Bulgarian National Bank
closed Girdap's account, causing 38 million leva of deposits in Girdap to be withdrawn by 1923 and its debtors (including members of Girdap's management) to protest their bills. While at the time the Bulgarian National Bank, Girdap's most important creditor, was opposed to Girdap's declaration of bankruptcy
, it reversed its stance two years later. Girdap was declared bankrupt on 3 February 1925 and its managers Boncho Boev, Ivan Kovachev and Nikola Kovachev were arrested.
) or by Samuil Danailov, at the time still an architecture student. Together with the opposing building owned by wine
merchant Petar Petrov and built in 1897 under Viennese
architect Georg Lang, the Girdap headquarters are part of an architectural ensemble highlighting the entrance to Ruse's commercial street from Liberty Square, the location of the Monument of Liberty
.
The building's attic was damaged in a fire in 1913. An additional storey was constructed in 1935 under the engineer Todor Tonev, turning the headquarters into a three-storey edifice. The trademark clock was added in the late 19th century. In 1964–1967, the building's interior was refurbished so it could accommodate the City People's Council. Today, it houses the administration of Ruse's Chamber of Control.
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
n bank. Established in Ruse in 1881, until its closure in 1925 it was one of the two large Bulgarian banks which relied on capital that was both private and local, along with the Bulgarian Commercial Bank. Prior to the Balkan Wars
Balkan Wars
The Balkan Wars were two conflicts that took place in the Balkans in south-eastern Europe in 1912 and 1913.By the early 20th century, Montenegro, Bulgaria, Greece and Serbia, the countries of the Balkan League, had achieved their independence from the Ottoman Empire, but large parts of their ethnic...
and World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, Girdap was among the six largest banks in Bulgaria, and during the wars its financial group was the most influential in the country.
Early years
Girdap's constituent assembly was held on 1 December 1881, less than four years after the Liberation of BulgariaLiberation of Bulgaria
In Bulgarian historiography, the term Liberation of Bulgaria is used to denote the events of the Russo-Turkish War of 1877-78 that led to the re-establishment of Bulgarian state with the Treaty of San Stefano of March 3, 1878, after the complete conquest of the Second Bulgarian Empire, which...
from Ottoman
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
rule and the establishment of the Principality of Bulgaria
Principality of Bulgaria
The Principality of Bulgaria was a self-governing entity created as a vassal of the Ottoman Empire by the Treaty of Berlin in 1878. The preliminary treaty of San Stefano between the Russian Empire and the Porte , on March 3, had originally proposed a significantly larger Bulgarian territory: its...
. At the time, the northeastern Bulgarian city of Ruse was a major economic hub. Ruse prospered due to its role as a major port on the Danube
Danube
The Danube is a river in the Central Europe and the Europe's second longest river after the Volga. It is classified as an international waterway....
, its rapid industrial development and its well-established ties with Central Europe
Central Europe
Central Europe or alternatively Middle Europe is a region of the European continent lying between the variously defined areas of Eastern and Western Europe...
along that river. Banking, however, was a new concept, as most people employed the services of money lenders and entrusted their savings to people they knew personally. The founders of Girdap sought to "liberate the population of money lenders", in the words of later bank director Boncho Boev. Due to an overall lack of capital in the country, interest rates of loans given by Girdap were nonetheless high: 15–18% as compared to the over 20–30% interest rate of money lenders. The bank officially commenced operations on 1 January 1882. It took its name from the Girdap neighbourhood of Ruse where the constituent assembly was held.
The capital of Girdap at the time of its foundation amounted to 1,380 Bulgarian gold leva
Bulgarian lev
The lev is the currency of Bulgaria. It is divided in 100 stotinki . In archaic Bulgarian the word "lev" meant "lion".It is speculated that Bulgaria, as a member of the European Union will adopt the Euro in 2015 .- First lev, 1881–1952 :...
, though by the end of 1882 it had increased fivefold to 6,900 gold leva. In 1886, the capital of Girdap amounted to 70,300 leva; in that year, the bank hired a clerk for the first time. In the year of the company's 10th anniversary, 1891, it disposed of 300,000 leva, and in 1894 its capital had increased to 1,000,000 leva. Founded as a depositor's company, it was transformed into a joint-stock credit company
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...
in 1894. In 1898, Girdap's capital was 1,500,000 leva and a new company statute was approved, which extended the board of managers to 12 members. These included Ruse's wealthiest and most eminent people, most notably the chairman Stefan Simeonov. In the autumn of 1902, Girdap opened its first branch offices outside Ruse: in the port of Varna
Varna
Varna is the largest city and seaside resort on the Bulgarian Black Sea Coast and third-largest in Bulgaria after Sofia and Plovdiv, with a population of 334,870 inhabitants according to Census 2011...
on the Black Sea
Black Sea
The Black Sea is bounded by Europe, Anatolia and the Caucasus and is ultimately connected to the Atlantic Ocean via the Mediterranean and the Aegean seas and various straits. The Bosphorus strait connects it to the Sea of Marmara, and the strait of the Dardanelles connects that sea to the Aegean...
coast, in the Dobruja
Dobruja
Dobruja is a historical region shared by Bulgaria and Romania, located between the lower Danube river and the Black Sea, including the Danube Delta, Romanian coast and the northernmost part of the Bulgarian coast...
n city of Dobrich
Dobrich
Dobrich is a town in northeastern Bulgaria, the administrative centre of Dobrich Province. With 91,030 inhabitants, as of February 2011, Dobrich is the ninth most populated town in Bulgaria, being the centre of the historical region of Southern Dobruja...
and in Istanbul
Istanbul
Istanbul , historically known as Byzantium and Constantinople , is the largest city of Turkey. Istanbul metropolitan province had 13.26 million people living in it as of December, 2010, which is 18% of Turkey's population and the 3rd largest metropolitan area in Europe after London and...
(Constantinople
Constantinople
Constantinople was the capital of the Roman, Eastern Roman, Byzantine, Latin, and Ottoman Empires. Throughout most of the Middle Ages, Constantinople was Europe's largest and wealthiest city.-Names:...
), the capital of the Ottoman Empire and largest city of the Balkans
Balkans
The Balkans is a geopolitical and cultural region of southeastern Europe...
. In Istanbul, the bank was known under a French
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
name, Société de Crédit Ghirdap, though the branch only existed for 18 months and was closed down due to political pressure. An office in Silistra
Silistra
Silistra is a port city of northeastern Bulgaria, lying on the southern bank of the lower Danube at the country's border with Romania. Silistra is the administrative centre of Silistra Province and one of the important cities of the historical region of Southern Dobrudzha...
was opened on 1 August 1910.
Ever since its establishment Girdap served political interests, and it was later tied to the Popular Liberal Party of Stefan Stambolov
Stefan Stambolov
Stefan Nikolov Stambolov was a Bulgarian politician, who served as Prime Minister and regent. He is considered one of the most important and popular "Founders of Modern Bulgaria", and is sometimes referred to as "the Bulgarian Bismarck".- Early years :Stambolov was born in Veliko Tarnovo...
. On the other hand, the Bulgarian Commercial Bank (Balgarska targovska banka), which was also founded in Ruse in 1885, was close to the Popular Party. The two banks competed for lending municipal loans and regularly used their political ties in their competition. These relations were often damaging to the Bulgarian treasury, as politicians who were also bank shareholders or somehow related to Girdap awarded contracts based on their personal interest rather than that of the state. As the Bulgarian economy
Economy of Bulgaria
The economy of Bulgaria functions on the principles of the free market, having a large private sector and a small, but strong public sector. Bulgaria is an industrialised upper-middle-income country according to the World Bank with a gross national income per capita of US$ 5,490 in 2008...
consolidated in the first decade of the 20th century and the emerging industry required increasing funds, local banks grew in importance. In 1911 Girdap had a capital of 2 million leva and by 1912 it was the third-largest private bank in the Kingdom of Bulgaria
Kingdom of Bulgaria
The Kingdom of Bulgaria was established as an independent state when the Principality of Bulgaria, an Ottoman vassal, officially proclaimed itself independent on October 5, 1908 . This move also formalised the annexation of the Ottoman province of Eastern Rumelia, which had been under the control...
after the Bulgarian Commercial Bank and the Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
-related Credit Bank (Kreditna banka). However, Bulgaria's privately-owned banking sector remained comparatively small.
Heyday and bankruptcy
Girdap's heyday was during the Balkan WarsBalkan Wars
The Balkan Wars were two conflicts that took place in the Balkans in south-eastern Europe in 1912 and 1913.By the early 20th century, Montenegro, Bulgaria, Greece and Serbia, the countries of the Balkan League, had achieved their independence from the Ottoman Empire, but large parts of their ethnic...
and World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
(1912–1918), when it became the leading financial group in the kingdom and remained close to the government. It controlled some 83.97 million leva of invested capital, which put it ahead of the General Credit Society, the Balkan Bank and the Bulgarian Commercial Bank financial group. During the wars, Bulgarian banks established filial companies or invested in new enterprises. Girdap was no exception to that trend.
One of Girdap's notable enterprises was the international transport company Transbalkania which had a capital of 100,000 leva. Of the company's 500 shares, 200 were owned by Girdap and another 170 were owned by three of the bank's managers or employees. Liquidated after World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, Transbalkania was active as a carrier from Bulgaria to Edirne
Edirne
Edirne is a city in Eastern Thrace, the northwestern part of Turkey, close to the borders with Greece and Bulgaria. Edirne served as the capital city of the Ottoman Empire from 1365 to 1453, before Constantinople became the empire's new capital. At present, Edirne is the capital of the Edirne...
, Alexandroupoli
Alexandroupoli
Alexandroupoli , is a city of Greece and the capital of the Evros peripheral unit in Thrace. Named after King Alexander, it is an important port and commercial center of northeastern Greece.-Name:...
, Thessaloniki
Thessaloniki
Thessaloniki , historically also known as Thessalonica, Salonika or Salonica, is the second-largest city in Greece and the capital of the region of Central Macedonia as well as the capital of the Decentralized Administration of Macedonia and Thrace...
and Niš
Niš
Niš is the largest city of southern Serbia and third-largest city in Serbia . According to the data from 2011, the city of Niš has a population of 177,972 inhabitants, while the city municipality has a population of 257,867. The city covers an area of about 597 km2, including the urban area,...
and along the Danube. During the wars, Girdap was involved in tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
trade and had warehouses in modern Dupnitsa, Blagoevgrad
Blagoevgrad
Blagoevgrad is а city in southwestern Bulgaria, the administrative centre of Blagoevgrad Province, with a population of about 74,302 . It lies on the banks of the Blagoevgradska Bistritsa River....
and Xanthi
Xanthi
Xanthi ; is a city in Thrace, northeastern Greece. It is the capital of the Xanthi peripheral unit of the periphery of East Macedonia and Thrace.-History:...
. This led to the establishment of another Girdap venture, the Bulgarian Macedonian Bank (Balgarska makedonska banka), on 21 May 1916. The Bulgarian Macedonian Bank was mostly active as a commercial bank, which is indicated by its capital of 46.95 million leva as opposed to only 13.31 million leva of deposits. Other banks more or less related to Girdap included the Sofia Bank (Sofiyska banka, established in 1906), the Bulgarian Forest Commercial Bank (Balgarska gorsko-targovska banka, established in 1917), and the Bulgarian Surety Bank (Balgarska garantsionna banka, established in 1912). The Pleven
Pleven
Pleven is the seventh most populous city in Bulgaria. Located in the northern part of the country, it is the administrative centre of Pleven Province, as well as of the subordinate Pleven municipality...
-based Lev cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
factory was founded in 1917 with Girdap board of managers member Ivan Kovachev as chief shareholder. Ninety percent of the capital of the Kurilo
Novi Iskar
Novi Iskar is a town in western Bulgaria, located in Sofia City Province and the Capital Municipality. It is often regarded as a suburb of Sofia and lies in the northern part of the Sofia Valley, with the Iskar Gorge beginning just north of the town.Novi Iskar was formed through the merging of...
mine in the Iskar Gorge
Iskar Gorge
The Iskar Gorge is a gorge passing through the Balkan Mountains in Bulgaria. It connects Sofia and Mezdra.The road and railroad follow the course of the Iskar River through a winding, scenic canyon.-References:*...
was controlled by Girdap or its head figures Ivan Kovachev and Boncho Boev. Despite Girdap's active involvement in assistance to national industry, it failed to make a significant contribution and gradually minimized its participation due to insufficient profits.
After World War I, Girdap was deprived of its government protections, as it had no links to the new agrarian government of Aleksandar Stamboliyski
Aleksandar Stamboliyski
Aleksandar Stamboliyski was the prime minister of Bulgaria from 1919 until 1923. Stamboliyski was a member of the Agrarian Union, an agrarian peasant movement which was not allied to the monarchy, and edited their newspaper...
. In 1919 Boncho Bonev was imprisoned in Berkovitsa
Berkovitsa
Berkovitsa is a town and ski resort in northwestern Bulgaria. It is the administrative centre of the homonymous Berkovitsa Municipality, Montana Province and is close to the town of Varshets...
for eight months before he was acquitted, Ivan Kovachev was put on trial, and the bank's funds were sealed. In 1922, the Bulgarian National Bank
Bulgarian National Bank
The Bulgarian National Bank is the central bank of the Republic of Bulgaria with its headquarters in Sofia. The BNB has been established on 25 January 1879. It is an independent institution responsible for issuing all banknotes and coins in the country, overseeing and regulating the banking sector...
closed Girdap's account, causing 38 million leva of deposits in Girdap to be withdrawn by 1923 and its debtors (including members of Girdap's management) to protest their bills. While at the time the Bulgarian National Bank, Girdap's most important creditor, was opposed to Girdap's declaration of bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, it reversed its stance two years later. Girdap was declared bankrupt on 3 February 1925 and its managers Boncho Boev, Ivan Kovachev and Nikola Kovachev were arrested.
Headquarters in Ruse
Girdap's central office in Ruse was located in a historic edifice at 2 Aleksandrovska Street that takes up 260 square metres (2,798.6 sq ft). It was finished in 1896 and designed either by Stoyan Zolotov and Udo Ribau (architect of what is known as Ruse's Old High School of MusicOld High School of Music, Rousse
The Old High School of Music is a currently abandoned historic building in Ruse, Bulgaria, located at 33 Borisova Street, which is to become a private cultural and arts centre....
) or by Samuil Danailov, at the time still an architecture student. Together with the opposing building owned by wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
merchant Petar Petrov and built in 1897 under Viennese
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
architect Georg Lang, the Girdap headquarters are part of an architectural ensemble highlighting the entrance to Ruse's commercial street from Liberty Square, the location of the Monument of Liberty
Monument of Liberty, Rousse
The Monument of Liberty in Rousse, Bulgaria, was built at the beginning of the 20th century by the Italian sculptor Arnoldo Zocchi. As time went by, it gained significance as one of the city's symbols, and now forms a part of her coat of arms.- Design :The structure is a pyramidal one...
.
The building's attic was damaged in a fire in 1913. An additional storey was constructed in 1935 under the engineer Todor Tonev, turning the headquarters into a three-storey edifice. The trademark clock was added in the late 19th century. In 1964–1967, the building's interior was refurbished so it could accommodate the City People's Council. Today, it houses the administration of Ruse's Chamber of Control.