Your .bashrc is not read by xterm; it is read by the bash that xterm runs if you don't supply a command with -e. You can tell Bash not to read /etc/bash.bashrc and ~/.bashrc by giving it the --norc option:
xterm -e bash --norc You may, of course, want to source /etc/bash.bashrc but not ~/.bashrc; I suggest you simply do that from within your new shell:
. /etc/bash.bashrc but you may instead tell Bash to use that as your one and only initialization file:
xterm -e bash --rcfile /etc/bash.bashrc Full details of those Bash options are of course in the man page.