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

218 Roxane Farmanfarmaianwould bring in hard currency. These bolstered confidence in the kran, whichappreciated in value against the pound and then stayed steady. However,conditions would conspire to dash all the gains brought by the new concessions.An excess of imports, based on what was viewed as a favourable exchangerate and bought on credit, coupled with the passage of the Sherman SilverPurchase Act by the US Congress, which effectively dropped the bottom outof the silver market, caused the kran to plummet. The Persian economy washit by both inflation and depression. Hoarding of silver became widespread,and the government was forced to turn to copper, the infamous pul-e siah,or black money, making the destruction of Persia’s monetary system complete.It was against this backdrop that Nasser-edin Shah was assassinated.By the time Mozzafar-edin Shah mounted the throne, it seemed thatPersia had sold all there was to sell. Only oil apparently remained, and severalconcessionaries, including Baron de Reuter, had already tried and failedto locate and produce oil in any quantity. When a concession was signed in1903, this time with William Knox D’Arcy, it reflected many of the lessonsalready learned by the Court in negotiating concessionary terms for otherproducts and services, as well as the caution that ensued from the TobaccoConcession fiasco in 1985. In addition, the Russians’ experience in Baku onthe Caspian, where oil was being exploited in quantity, was not lost on theQajar negotiators, who included Amin-o Soltan, the powerful premier. Theresult was a very good concession, with terms that included a significant royaltyof 16 per cent, based on profits; profits from any and all companies associatedwith the extraction, production and sale of Persia’s oil; the sale of oiland its by-products anywhere, not just on Persian soil; and a clause thatrefrained from committing the Persian government to responsibility forsecurity in the field or of the company’s operations. The Persian governmentnegotiated the right to 20,000 shares and a cash payment of £20,000. WhenD’Arcy formed the First Exploitation Co. on May 21, 1903, £500,000 in £1shares were issued; 30,000 were presented to the Shah, and 20,000 to “otherleading personalities”, while £450,000 was floated in London. The extrashares were viewed by D’Arcy’s management team as being equivalent tothe cash payment, and hence, no cash ever was transferred to Mozzafar-edinShah, although Antoine Ketabji Khan, who helped arrange the concession,was paid £50,000. Nonetheless, these terms were considered fair on both sides,until oil was struck in a huge gusher on 26 May 26 1908 at Masjed Suleiman. 16THE SEEDS OF CONFLICT IN THE BRITISH TAKEOVEROF SOVEREIGN AND FINANCIAL RIGHTSIt was at this point that British interest focused on what immediately promisedto be a significant commercial venture in Persia. It was perhaps too early toimagine it as the financial and security successor to the East India Company,but the government power brought to focus on this development, the men