The Allocation of Capital in the Early Republic:The Credit and Participation Policies of Türkiye İş Bankası, 1924-1933

This article analyzes the mechanisms of capital allocation in the early Republican period through an examination of Türkiye İş Bankası’s credit and participation policies between 1924 and 1933. Its central argument is that, during this period, İş Bankası functioned not merely as a commercial bank that collected deposits and extended loans, but as an active institutional actor that shaped the direction of private capital. The study interprets early Republican economic policies not as a sharp rupture between the liberalism of the 1920s and the statism of the 1930s, but within the continuity of the idea of milli iktisat (national economy). In this sense, the bank is treated as one of the institutional instruments through which the milli iktisat tradition inherited from the Second Constitutional Period was reformulated under Republican conditions. By reading the annual reports and balance sheets for 1924-1933 both quantitatively and qualitatively, the article draws an analytical distinction between credit policy and participation policy. Accordingly, while credit policy served a broader financing function directed especially toward commercial circulation, participation policy reflected the bank’s preference for committing capital directly to fields it regarded as more selective, long-term, and strategic. The article further argues that the Great Depression of 1929 and the subsequent shift toward statism did not constitute a rupture that rendered İş Bankası obsolete; rather, they redefined its function in line with new objectives of industrialization and capital direction. Consequently, Türkiye İş Bankası is evaluated as a hybrid institution of capital allocation, situated in the permeable space between the state and private enterprise, and as an actor that influenced the sectoral and institutional distribution of capital in accordance with the principles of milli iktisat.