War and Peace in Qajar Persia: Implications Past and ... - Oguzlar.az

The politics of concession 217Shah, the currency remained bi-metallic, but by the time Nasser-edin mountedthe throne, there was insufficient gold to continue convertibility and the kranwas eventually pegged only to silver. The timing was unfortunate, as by the1890s, both India and Russia suspended minting silver, while much of theWest and Japan gradually took the same route. As noted by Avery andSimmons in their groundbreaking study of this issue: “The end of 1893 sawPersia’s silver practically isolated”. 13 The value of the kran against the poundin the course of 26 years, from 1863 to 1889, for example, almost halved,and closely followed the drop in the market value of silver. Only the US dollarcontinued as a bi-metallic currency, the US Treasury propping up theprice of silver through huge monthly purchases after several large American(as well as Argentine) mines were discovered and silver flooded the market.An exception to the otherwise uninterrupted decline in Persia’s currencyvalue was a short rally in 1872 that took place when de Reuter was awardeda staggeringly large concession according to terms which, unlike previousconcessions, and due to the Shah’s “shrewdness”, according to GrahamStorey, de Reuter’s biographer, “switched the real security from the Persiangovernment to the profits of the enterprise itself ”. 14 The concession, whichincluded railway and tramway construction and public works, includingtelegraphs, was cancelled a year later, and the kran resumed its fall. Thelesson gleaned by Nasser-edin Shah and his ministers from the de Reutersconcession, however, could not have been clearer. As noted by Avery andSimmons:The very fact that the silver kran had bounced upwards, for however abrief period, indicates that flirting with a scheme for attracting capitalfrom England ...was by no means an unrealistic way of trying to copewith the [fiscal] crisis. The de Reuter concession promised the introductionof Western technology on an extensive scale, but it promised more.It promised unprecedented new sources of revenue: in hard currency. 15CONCESSIONS AS A SOLUTION TOFINANCIAL DISTRESSAnalysis of subsequent concessionary awards granted on Nasser-edin’s secondvisit to England, indicates growing sophistication on the part of the Persiangovernment in hammering out terms, even as it had to balance the demandsof the Russians against those of the British. In addition, from Tehran’s viewpoint,the terms were not always so disadvantageous to Persia as they mightoriginally appear. Granting a general concession for navigation by ships ofall nations on the Karun, for example, enabled the Nasiri Company, a Persiansteamship corporation, to become established as well. The Imperial Bank,which de Reuter salvaged out of his original concession, offered a neededvehicle for foreign investment. Other concessions promised exports that