Trade and Enterprise: The Muslim Tujjar in the Ottoman Empire and Qajar Iran, 1860-1914 (Variorum Collected Studies) 2022019540, 2022019541, 9781032011592, 9781032011608, 1032011599

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Trade and Enterprise

Until recently, the historiography of Middle Eastern economic elites during the first globalization has ignored the significant role played by Muslim tujjār (big merchant-entrepreneurs). Foreign firms and local minorities were considered the prime agents of economic change and the initiators of economic growth. The 12 studies in this volume show that the Muslim tujjār played a major economic role in various regions of the Middle East during the late nineteenth and early twentieth centuries. Their investments, mainly in commercial agriculture, resulted in economic growth and changed economic structures and social relations in many Middle Eastern communities. They were also involved in political developments, some of which had a dramatic effect on the history of their countries, as for instance in late Qajar Iran. They also played a unique role in the process of cultural change. Although they supported the ʿulamāʾ financially, they also contributed to the establishment of new educational and cultural institutions. The story of the tujjār is unique in the sense that it was the only indigenous elite group in the pre-World War I Middle East to bridge between traditional forces and concepts and Western attitudes and practices. Gad G. Gilbar is Professor Emeritus of Economic History of the Middle East in Modern Times at the University of Haifa, Israel. His publications include: The Economic Development of the Modern Middle East (Hebrew, 1990); (ed.), Ottoman Palestine, 1800–1914: Studies in Economic and Social History (1990); Population Dilemmas in the Middle East (1997); The Middle East Oil Decade and Beyond (1998); (co-ed.), The Baha’is of Iran, Transcaspia and the Caucasus, 2 vols. (2011).

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Trade and Enterprise

The Muslim Tujjār in the Ottoman Empire and Qajar Iran, 1860–1914 Gad G. Gilbar

VARIORUM COLLECTED STUDIES

First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 Gad G. Gilbar The right of Gad G. Gilbar to be identified as author of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Gilbar, Gad G., author. Title: Trade and enterprise : the Muslim tujjar in the Ottoman Empire and Qajar Iran, 1860–1914 / Gad G. Gilbar. Description: Abingdon, Oxon ; New York, NY : Routledge, 2023. | Series: Variorum collected studies | Includes bibliographical references and index. Identifiers: LCCN 2022019540 (print) | LCCN 2022019541 (ebook) | ISBN 9781032011592 (hardback) | ISBN 9781032011608 (paperback) | ISBN 9781003177425 (ebook) Subjects: LCSH: Muslim merchants—Middle East--History. | Middle East— Commerce—History. | Middle East—Economic conditions—19th century. | Middle East—Economic conditions—20th century. Classification: LCC HF3756.Z5 G55 2023 (print) | LCC HF3756.Z5 (ebook) | DDC 381.0956—dc23/eng/20220421 LC record available at https://lccn.loc.gov/2022019540 LC ebook record available at https://lccn.loc.gov/2022019541 ISBN: 978-1-032-01159-2 (hbk) ISBN: 978-1-032-01160-8 (pbk) ISBN: 978-1-003-17742-5 (ebk) DOI: 10.4324/9781003177425 Typeset in Times New Roman by Apex CoVantage, LLC VARIORUM COLLECTED STUDIES SERIES CS1108

In memory of Ora Striving for light to come in

CONTENTS

Preface Acknowledgements List of Abbreviations List of Tables

ix xii xiii xiv

PART 1

1

1 The Muslim Big Merchant-Entrepreneurs of the Middle East, 1860–1914

3

Die Welt Des Islams, 43 (2003): 1–36 2 Muslim Tujjār of the Middle East and Their Commercial Networks in the Long Nineteenth Century

31

Studia Islamica, 100/101 (2005): 183–202 3 The Qadi, the Big Merchant and Forbidden Interest (Ribā)

47

British Journal of Middle Eastern Studies, 39 (2012): 115–136 4 Images of Tujjār: Between Shechrazad and Ibn Khaldūn

74

Not Previously Published PART 2

93

5 Paradigms of Trade and Finance in Ottoman Historiography Russia and the Arab World, St. Petersburg: St. Petersburg State University, 2010: 202–214

vii

95

CONTENTS

6 Changing Patterns of Economic Ties: The Syrian and Iraqi Provinces in the Long 19th Century

107

The Syrian Land in the 18th and 19th Century, ed. Thomas Philipp, Stuttgart: Franz Steiner Verlag, 1992: 55–66 7 The Growing Economic Involvement of Palestine With the West, 1865–1914

119

Palestine in the Late Ottoman Period, ed. David Kushner, Jerusalem and Leiden: Yad Izhak Ben-Zvi and E.J. Brill, 1986: 188–210 PART 3

143

8 The Opening Up of Qajar Iran: Some Economic and Social Aspects

145

Bulletin of the School of Oriental and African Studies, 49 (1986): 76–89 9 Resistance to Economic Penetration: The Kārguzār and Foreign Firms in Qajar Iran

162

International Journal of Middle East Studies, 43 (2011): 5–23 10 The Mysterious Death of a Commercial Agent and the Kārguzār of Mashhad, 1890

184

Iran and the Caucasus, 15 (2011): 79–98 11 The Rise and Fall of the Tujjār Councils of Representatives in Iran, 1884–85

201

Journal of the Economic and Social History of the Orient, 51 (2008): 639–674 12 The Tujjār and the Persian Constitutional Revolution of 1906

225

Asian and African Studies, 11 (1976/77): 275–303 Bibliography Index

247 277

viii

P R E FA C E

The six decades that preceded the First World War were a unique period in the economic history of the Middle East. These years correspond to a time of great prosperity for the tujjār – the local Muslim big merchants-entrepreneurs – in parts of the Ottoman Empire and Qajar Iran. During this period, the tujjār played an important role as agents of economic growth and the initiators of social and political changes. Some were dramatic and had far-reaching consequences. The twelve chapters comprising this volume explore the rise, activities, and influence of the Muslim tujjār. The tujjār stand out in the sense that they were an unusual group of major local economic players in the Ottoman Empire and Qajar Iran during the first era of globalization who were exposed to European economic and cultural developments and were influenced by these contacts, but who at the same time remained devoted to their Islamic way of life and were regarded as the pillars of the Islamic communities to which they belonged. In many ways, they were the most effective channel for the changes adopted by their society. This is one key aspect in which the Muslim tujjār differed from foreign trading firms and non-Muslim big merchants. The fascinating story of the tujjār first drew my attention in the 1970s when there was hardly any scholarship on this topic. The articles in this volume were published between 1976 and 2011 and are divided into three parts: developments and issues relating to tujjār in the Middle East, the tujjār in the Ottoman Empire, and the tujjār in Qajar Iran. The first chapter presents the growing economic role of the tujjār in the Ottoman Empire and Iran during this period. The next three chapters focus on major aspects and dilemmas related to the tujjār. The characteristics of the commercial networks of the tujjār and the reasons why most of them avoided setting up their own branches in European commercial centers are dealt with in Chapter 2. Their role as money lenders in markets where the rates of interest (ribā) were not final is explored in Chapter 3. This chapter discusses the impact of this situation and the implications of unbinding agreements between lenders and borrowers on the eventuality of creating banking institutions along the European model by Muslim tujjār. The fourth Chapter turns to the question of the image of the tujjār in the upper echelons of the Ottoman and Qajar societies. Two very different works, ix

P R E FA C E

Alf layla wa-layla and Ibn Khaldūn’s al-Muqaddima discuss the tujjār’s personal qualities and the impact of their activities on society in general and rulers in particular. A link seems to have existed between the image of the tujjār as portrayed in these two works, and the attitude of Ottoman and Qajar rulers toward Muslim big merchants. Part Two of the volume opens with Chapter 5 which is devoted to the study of the crystallization of paradigms describing the role of minority groups in the Ottoman Empire’s international trade, and the inability of Muslims to play a role in the Empire’s foreign trade. It also shows how these paradigms were integrated into the dominant narratives on late Ottoman economic and social history. Chapter 6 examines the theme of the changes in trade routes and trade relations between Ottoman Syrian and Iraqi provinces and their impact on the rise and growth of the tujjār of Baghdad and Beirut. The Palestinian economy and the rise of the tujjār in the citrus industry and markets are explored in Chapter 7. Both Arab Christians and local Muslims were prominent merchants in Jaffa. The story of the growth of the citrus industry and the rapid expansion of Jaffa during the last phase of Ottoman rule in Palestine are striking examples of economic changes that were followed by social and cultural developments. The articles in Part Three are devoted to the unprecedented role Muslim big merchants played in late Qajar Iran. Chapter 8 provides an overview of the processes that changed the Iranian economy and paved the way for new economic opportunities for the tujjār. Chapters 9 and 10 focus on one of the most effective tools – the kārguzār’s majlis (court) – which the Qajars successfully leveraged to hinder the commercial activities of foreign firms in Iran, thereby strengthening the abilities of the tujjār to compete successfully with them. Chapters 11 and 12 discuss the radical shift in relations between the tujjār and the Qajars. Chapter 11 describes the joint initiative by the tujjār and Nāsir al-Dīn Shāh to establish representative councils of tujjār (majālis-i wukalā-yi tujjār). These councils were to decide on a wide range of issues concerning trade and economic development in the major urban centers and ports of the country. The fierce opposition to the existence of these councils on the part of both ʿulamāʾ and provincial governors brought the activities of the councils to an end, and they were abolished by the Shah. The last phase in the relations between the tujjār and the Qajars discussed in this volume concerns their crucial role in the Constitutional Revolution of 1906. When my first study on the tujjār was published in 1976 it was one of the very few publications on any group of tujjār in the first globalization era in Qajar Iran or the Ottoman Empire. Since then, the tujjār in the late nineteenth century have been the subject of many excellent studies. Some are based on private family archives, while the majority of them draw on documentation scattered in foreign and local public archives. Today, the tujjār’s story is acknowledged as an important segment of late nineteenth and early twentieth century Middle Eastern economic, social, and political history. Yet, much still needs to be done, and future studies will depend primarily on access to the private archives of Muslim tujjār families in urban centers of Turkey, Iran, and other Arab countries. A comprehensive work x

P R E FA C E

on the Muslim tujjār remains to be written, and I hope that the publication of this volume will contribute its share to this endeavor. The articles included in this volume appear here as they were first published, with minor changes. The house styles of the original publishers with respect to references and transliteration were kept as is. However, the bibliography at the end of the volume that includes all the works cited in the articles has been unified according to the International Journal of Middle East Studies transliteration guide. Haifa July 2022

xi

ACKNOWLEDGEMENTS

I wish to thank the following publishers for permission to reprint articles in this volume: Cambridge University Press (8, 9), Franz Steiner Verlag (6), Koninklijke Brill NV (1, 2, 7, 10, 11), The Middle East & Islamic Studies Association of Israel (12), Routledge (3), St. Petersburg State University (5), and Yad Izhzak Ben-Zvi (7). I am most grateful to Dr. Jeannine Horowitz for her indispensable help with the preparation of this volume. For many years Nira Azkiel and Dr. Boris Morozov assisted me in my research and I cannot thank them enough. I am also indebted to Michael Greenwood and Louis Nicholson-Pallet for their unfailing advice and support. The research for the articles included in this book was variously supported by grants from Israel Science Foundation (grants 865/06 and 101/09); the School of Oriental and African Studies, the University of London, and the University of Haifa, Research Authority.

xii

A B B R E V I AT I O N S

A&P BBME

Accounts and Papers The British Bank of the Middle East Records (The Imperial Bank of Persia) BCF Bulletin Consulaire Français DCR U.K., Foreign Office, Diplomatic and Consular Reports AS Annual Series CR Commercial Reports MS Miscellaneous Series EB Encyclopaedia Britannica EI Encyclopaedia of Islam EIr Encyclopaedia Iranica FO U.K., Foreign Office GI U.K., Government of India FDP Foreign Department Proceedings GP Army Head Quarters, Gazeteer of Persia HHStA Haus-, Hof- und Staatsarchiv, Vienna IOR India Office Records, London MAE Archives du Ministère des Affaires Etrangères, Quai d’Orsay, Paris MCI Ministère du Commerce et de l’Industrie, France NAUK The National Archives, United Kingdom, London PP United Kingdom, House of Commons, Parliamentary Papers (Sessional Papers) PRO Public Record Office, London RC Rapports commerciaux des agents diplomatiques et consulaires de France RGIA Russiiski gosudarstvennyi istoricheskii arkhiv, St. Petersburg RRC Recueil des Rapports Commerciaux SKD Sbornik Konsul’skikh Donesenii USNA United States National Archives, Washington, DC RC Record Group

xiii

TA B L E S

7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14

Tonnage of Sailboats and Steamships (entered), Jaffa Port, 1879–1913 Visible Imports and Exports by Countries, Jaffa Port, 1885 and 1913 Visible Imports and Exports Through the Ports of Jaffa, Haifa and Gaza, 1873–1913 The Three Major Import Items, Jaffa Port, 1879–1913 The Three Major Export Items, Jaffa Port, 1879–1913 Acreage of Citrus Orchards, 1880, 1900 and 1914 Exports of Oranges, Jaffa Port, 1879–1913 Tonnage of Steamships Cleared at Principal Ports of Syria and Palestine, 1910–1913 Centers of Soap Production in Syria and Palestine, 1908 Exports of Major Handicrafts and Industrial Goods, Jaffa Port 1904–1913 Merchandise Transported by Train, Jaffa-Jerusalem Railway, 1906–1913 Major “Provincial” Roads, 1910 Modern Banks in Palestine, 1914 Imports of Coffee, Sugar and Tobacco, Jaffa Port, 1900–1913

xiv

120 121 122 123 125 128 128 130 134 135 138 138 139 140

Part 1

1 THE MUSLIM BIG M E R C H A N T- E N T R E P R E N E U R S O F T H E M I D D L E E A S T, 1860–1914

Introduction The Middle East in the second half of the nineteenth century and the early twentieth century witnessed several significant economic and social changes, one of which was the emergence in the Ottoman Empire and Iran1 of small groups of Muslim big merchants (tujjār)2 who became economic entrepreneurs3 and as such contributed significantly to economic growth and modernization in the regions where they operated. The unprecedented increase in the volume and value of foreign trade in the Middle East during this period4 was engendered entirely by the private sector. The * Earlier versions of this study were presented at conferences in Friedrich-Alexander-Universität, Erlangen, July 1995 and at Ankara University, October 1999. 1 The regions discussed in this study include Anatolia, the Fertile Crescent, Arabia, Iran, Egypt and Sudan. 2 The term tujjār (sing. tājir) denotes merchants who were mainly engaged in the import/export trade and in the wholesale trade. These big merchants stood at the very top of the ladder of the commercial community. What distinguished the tujjār from other local groups that lived on commerce was the scope of their enterprises and hence their sizable incomes and profits. They were the only local group within the Muslim communities of the second half of the nineteenth century that possessed large sums of liquid assets. This enabled them to initiate new economic enterprises. Both Muslim and non-Muslim communities in the Ottoman Empire, Iran and Egypt referred to these big businessmen by the title tujjār. In the Arab lands the term occasionally referred to retail traders as well. 3 I use the term entrepreneur in this study in the Schumpeterian sense: entrepreneur as innovator in one or more of the following areas: new goods, new method/s of production, new market/s, new source/s of raw material, and new industrial organization. See Joseph A. Schumpeter, The Theory of Economic Development, Cambridge, Mass.: Harvard University Press, [1934] 1961, pp. 65–66. See also Elizabeth Chell, Jean Haworth and Sally Brearley, The Entrepreneurial Personality, London: Routledge, 1991, pp. 12–28; Richard Swedberg, “The Social Science View of Entrepreneurship: Introduction and Practical Applications,” in idem (ed.), Entrepreneurship: The Social Science View, Oxford: Oxford University Press, 2000, pp. 7–39. 4 The late 1860s mark the beginning of the rapid growth in economic integration between the western and central European economics and the colonial world (the “first globalization”). At the core of this process, which lasted until the outbreak of the First World War, was an unprecedented increase in both the volume and value of foreign trade. Thus, for example, total exports of 12 west and central European countries grew from 30.4 billion US dollars in 1870 to 119.5 billion US dollars in 1913 DOI: 10.4324/9781003177425-2

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Ottoman authorities in Anatolia and the Fertile Crescent, and the Qajar rulers in Iran showed little interest in the growth of foreign trade, their involvement in this sector being limited to the supervision of goods permitted to be imported and exported, and to the collection of customs duties and other imposts.5 One result was that most of the profits derived from transactions in foreign trade went to the private sector, namely local and foreign big merchants. Just how large these profits were requires additional research. Still, the few studies that focus on the role and performance of the big merchants in several major trading centers in the Middle East indicate that profits were, in the context of the period under discussion, very high. Thus, big merchants in various parts of the region succeeded within two to three generations, and in some cases even less, in amassing huge assets. The value of these assets, as estimated by their contemporaries, would amount in many cases to several million pounds sterling in late twentieth century terms.6 (both figures in 1990 prices). Britain’s exports rose from 12.2 to 39.3 billion US dollars and France’s from 3.5 to 11.3 billion US dollars (all figures in 1990 prices). Middle Eastern economies were involved in this process. The exports of Anatolia (Turkey) rose from 49 to 94 million US dollars between 1872 and 1913 and those of Egypt from 66 to 156 million US dollars between 1874 and 1913 (all figures in 1990 prices at current exchange rates). See Angus Maddison, The World Economy: A Millennial Perspective, Paris: Development Centre OECD, 2001, pp. 360–61 tables F-1 and F-2. See also Charles Issawi, An Economic History of the Middle East and North Africa, New York: Columbia University Press, 1982, pp. 23–25 table 2.1 (hereafter: Issawi, Economic History); Şevket Pamuk, The Ottoman Empire and European Capitalism, 1820–1913, Cambridge: Cambridge University Press, 1987, pp. 18–40, 148–67. Cf. Roger Owen, The Middle East in the World Economy, 1800–1914, London: Methuen, 1981, p. 191 table 35, p. 241 table 57. 5 See, e.g., Gad G. Gilbar, “Persian Agriculture in the Late Qajar Period, 1860–1906: Some Economic and Social Aspects,” Asian and African Studies, 12 (1978), pp. 317–18 (hereafter: Gilbar, “Persian Agriculture”); Fattah, “The Politics of Grain Trade in Iraq, c. 1840–1917,” New Perspectives on Turkey, 5–6 (1991), pp. 162–63 (hereafter: Fattah, “Politics of Grain”); Charles Issawi, Cross-Cultural Encounters and Conflicts, New York: Oxford University Press, 1998, pp. 91–92. 6 For details see, e.g., Muḥammad Rafīq and Muḥammad Bahjat, Vilāyat Bayrūt, vol. 1 (al-qism al-janūbī), Beirut: Maṭbaʿat al-Iqbāl, 1335/1916, p. 120 (hereafter: Rafīq and Bahjat, Bayrūt); “Hajji Muhammad Hassan, Amin ez Zarb,” in H. Picot, “Biographical Notices of Members of the Royal Family, Notables, Merchants and Clergy,” [Tehran] December 1897, FO 60/592, NAUK (hereafter: “Biographical Notices,” FO 60/592); Yūsuf Ibn ʿīsā al-Qināʿī, Ṣafaḥāt min taʾrīkh al-Kuwayt, Kuwait: Government Printing House, 1968, pp. 60–62; Hanna Batatu, The Old Social Classes and the Revolutionary Movements of Iraq, Princeton: Princeton University Press, 1978, pp. 244, 260 (hereafter: Batatu, Old Social Classes); Aḥmad Ashraf, Mawāniʿ-i taʾrīkh-yi rushd-i sarmāyah dārī dar Īrān: dawrah-yi Qājāriyyah, Tehran: Intishārāt-i Zamīna, 1359/1980, p. 74 (hereafter: Ashraf, Mawāniʿ-i taʾrīkh); Leila Tarazi Fawaz, Merchants and Migrants in Nineteenth Century Beirut, Cambridge: Harvard University Press, 1983, pp. 93, 97 (hereafter: Fawaz, Merchants); Michael Johnson, Class & Client in Beirut, London: Ithaca Press, 1986, pp. 67–68 (hereafter: Johnson, Class); Reşat Kasaba, The Ottoman Empire and the World Economy, Albany: State University of New York Press, 1988, p. 101 (hereafter: Kasaba, Ottoman Empire); Anders Bjørkelo, Prelude to the Mahdiyya. Peasants and Traders in the Shendi Region, 1821–1885, Cambridge: Cambridge University Press, 1989, p. 128 (hereafter: Bjørkelo, Prelude); Eugene L. Rogan, “Moneylending and Capital Flows from Nāblus, Damascus and Jerusalem to Qada’ al-Salt in the Last Decades of Ottoman Rule,” in Thomas Philipp (ed.), The Syrian Land in the 18th and 19th Century, Stuttgart: Franz Steiner Verlag, 1992 (hereafter: Philipp, Syrian Land), pp. 255, 256 n. 29 (hereafter: Rogan, “Moneylending”).

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The big merchants who operated in the Middle East in the latter nineteenth century may be divided into three separate groups: (i) Local Muslim merchants; (ii) Local non-Muslim merchants (Greek Orthodox, Armenians, Jews and others), many of whom were under the protection of foreign states; and (iii) Foreign merchants, mostly subjects of neighboring countries or of states with which the foreign trade of the Middle East was conducted. It has been claimed that foreign trade in the Middle East in the period under discussion was controlled by foreign and by non-Muslim merchants.7 A new look at the activities of the Muslim tujjār, however, reveals a different picture. Muslim big merchants in various parts of the Middle East – in Iran, Syria, Palestine, eastern Arabia, Kuwait and Sudan – played a central, or a significant, role in the foreign trade sector. They maintained trade relations with consumers and suppliers abroad, mainly in the large markets in Europe (England and France) and in south and east Asia (India and China). They exported and imported goods through foreign firms, and in many cases they established their own agencies or branches in the countries with which they traded. Furthermore, the Muslim big merchants played a leading role, at times acquiring actual control, with regard to a wide range of export goods. Several examples substantiate this conclusion: (1) Iran’s main export items at the end of the nineteenth century included opium and carpets. Opium exports were almost totally controlled by the Muslim big merchants operating in the large trading centers of Iran – Isfahān, Shīrāz, Yazd, Būshahr and others. These merchants also played an important, though not

7 A.J. Sussnitzki, wrote in 1917: “ . . . in wholesale internal trade, import and external trade, and in the high finance of Turkey [the Ottoman Empire], the Greeks and Armenians . . . have played the decisive role. Thus we find two nationalities . . . exercising in trade a preponderant influence . . . almost everywhere.” “Zur Gliederung wirtschaftslicher Arbeit nach Nationalitäten in der Türkei,” Archiv für Wirtschaftsforschung im Orient, 2 (1917), p. 397. English translation Charles Issawi (ed.), The Economic History of the Middle East 1800–1914, Chicago: University of Chicago Press, 1966, p. 121. See further Chapter 5 in this volume. See also Albert Hourani, “Ottoman Reform and the Politics of Notables,” in William R. Polk and Richard L. Chambers (eds.), The Beginnings of Modernization in the Middle East: The Nineteenth Century, Chicago: University of Chicago Press, 1968, pp. 61, 67 (hereafter: Hourani, “Ottoman Reform”). In his A History of the Arab Peoples, published in 1991, Albert Hourani writes: “The main share of the trade [in 1860–1914] was in the hands of European companies and merchants, primarily British and French, with a growing share for Germans. . . . But indigenous merchant groups also played a considerable part in international trade, and a dominant one in local trade: in the Middle East, Syrian and Lebanese Christians, Syrian and Iraqi Jews, and Egyptian Copts in the Nile trade . . .” (London: Faber and Faber, pp. 286–87; hereafter: Hourani, History). For a more balanced approach, see Charles Issawi, “The Transformation of the Economic Position of the Millets in the Nineteenth Century,” in Benjamin Braude and Bernard Lewis (eds.), Christians and Jews in the Ottoman Empire, New York: Holmes and Meier, 1982 (hereafter: Braude and Lewis, Christians and Jews), vol. 1, pp. 263, 267–68 (hereafter: Issawi, “Transformation”); Donald Quataert, “Commerce,” in Halil İnalcık and Donald Quataert (eds.), An Economic and Social History of the Ottoman Empire 1300–1914, Cambridge: Cambridge University Press, 1994, pp. 839–40 (hereafter: Quataert, “Commerce”).

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exclusive, role in the export of carpets. European trading companies and Armenian and Zoroastrian big merchants were also active in this area.8 (2) The most important export item of the eastern basin of the Persian Gulf, namely Kuwait, Arabia, Bahrain, Abu Dhabi and Sharjah, in the period under discussion, was pearls. Most of the pearls were exported to one of the world’s major trading centers for this product, Ceylon. Muslim tujjār controlled pearl exports from the Persian Gulf almost exclusively.9 (3) Gum-arabic and indigo, in great demand by the textile and other industries in Europe, especially Britain, were among the main exports of Sudan during this period. The Muslim big merchants of Kordofan and northern Sudan were predominant in the export of these goods, although European merchants made considerable efforts to acquire a substantive share in this field.10 (4) One of the major export items of southern Iraq was dates, which in addition to being marketed within the Middle East itself were exported to Europe and south Asia. Muslim big merchants, mainly from Baṣra, dominated this export trade.11

8 M. L. Tomara, Ekonomickeskoe polozhenie Persii, St. Petersburg: Ministerstvo Finansov, 1895, pp. 106–16 (hereafter: Tomara, Ekonomickeskoe); Z.Z. Abdullaev, Promyshlennost’i zarozhdenie rabochego klassa Irana v kontse xix-nachale xx vv., Baku: Akademiya Nauk Azerbaidzhanshkoi, 1963, pp. 59, 158 (hereafter: Abdullaev, Promyshlennost’i zarozhdenie). Gilbar, “Persian Agriculture,” pp. 340–42; V.F. Nowshirvani, “The Beginnings of Commercialized Agriculture in Iran,” in A.L. Udovitch (ed.), The Islamic Middle East, 700–1900: Studies in Economic and Social History, Princeton: Darwin Press, 1981, pp. 572, 575 (hereafter: Nowshirvani, “Beginnings”); Roger T. Olson, “Persian Gulf Trade and the Agricultural Economy of Southern Iran in the Nineteenth Century,” in Michael E. Bonine and Nikki R. Keddie (eds.), Continuity and Change in Modern Iran, Albany: State University of New York Press, 1981, pp. 151, 155, 157. The conclusion that Muslim big merchants controlled a certain commercial branch or were prominent in the export or import of a given item is not based in most cases on detailed quantitative data. Statistics on international (or regional) trade according to the nationality and/or religious affiliation of the merchants concerned hardly exist for most nineteenth-century Middle Eastern regions. Primary sources, however, provide details about the activities of individual or groups of big merchants and general statements that were based in many cases on good or even intimate knowledge of the tujjār and their position in the market. 9 J. G. Lorimer, Gazetteer of the Persian Gulf, Oman and Central Arabia, Calcutta: Government Printing, 1915, vol. 1, pt. 2, p. 2236 (hereafter: Lorimer, Gazetteer); Michael Field, The Merchants: The Big Business Families of Saudi Arabia and the Gulf States, Woodstock: Overlook Press, 1985, p. 24 (hereafter: Field, Merchants); Gérard Naulleau, “Islam et affaires: le cas des familles marchandes du Golfe,” in Denys Lombard and Jean Aubin (eds.), Marchands et hommes d’affaires asiatiques dans l’Océan Indien et la Mer de Chine, 13e -20e siècles, Paris: Éditions de l’école des Hautes Etudes en Sciences Sociales, 1988, pp. 298, 299, 302 (hereafter: Lombard and Aubin, Marchands). 10 Fatima Babiker Mahmoud, The Sudanese Bourgeoisie, London and Khartoum: Zed and Khartoum University Press, 1984, pp. 34–36; Bjørkelo, Prelude, p. 125. 11 Lorimer, Gazetteer, vol. 1, pt. 2, pp. 2302–3; Alan Villiers, Sons of Sinbad, London: Hodder & Stoughton, 1940, p. 341 (hereafter: Villiers, Sons); Muḥammad Salmān Ḥasan, al-Taṭawwur al-iqtiṣādī fī al-ʿIrāq, Beirut [n.d.], pp. 139–52; Hala Fattah, The Politics of Regional Trade in

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(5) Syria was an important exporter of grains during this period, principally to central and western Europe. Part of this trade was under the control of a group of Muslim tujjār in Damascus, who established an agency at Izmir, the main Ottoman port in the eastern Mediterranean, to promote this export.12 (6) Citrus was one of the three main export items from Palestine in the last decades of the nineteenth century. Muslim big merchants in Jaffa and Jerusalem were active in this export trade.13 Additionally, the Muslim tujjār were involved in the export of a range of other goods in commercial centers where local non-Muslim or foreign merchants were dominant. Muslim big merchants in Beirut exported silk; in Aleppo wool; in Baghdad wheat and silk; in Ḥudayda skins and hides; in Istanbul tobacco; in Izmir dried fruit; and in Alexandria cotton and cottonseed.14 These activities of the Muslim big merchants were additional to the major role they played in domestic wholesale trade as purchasers of goods in the countryside and conveyers to the large trading centers, in particular the port cities. They were also prominent in regional trade between various parts of the Middle East itself: between Iran and the Fertile Crescent, the Fertile Crescent and Arabia, Syria and Anatolia, Egypt and Syria, and elsewhere. Iraq, Arabia, and the Gulf, 1745–1900, Albany: State University of New York Press, 1997, p. 80 (hereafter: Fattah, Regional Trade). 12 Muḥammad Adīb āl Taqī al-Dīn al-Ḥiṣnī, Kitāb muntakhabāt al-tawārīkh li-Dimashq, Beirut: Dār al-āfāq al-jadīda, 1979, vol. 2, pp. 864, 883, 885 (hereafter: al-Ḥiṣnī, Kitāb). 13 Consul John Dickson, “Report on Irrigation and Orange Growing at Jaffa,” FO, DCR MS 300 (1893), pp. 2–4; Ya‘aqov Shim‘oni, ‘Arvey Eretz-Yisra’el, Tel Aviv: ‘Am Oved, 5707 [1947], pp. 224–25 (hereafter: Shim‘oni, ‘Arvey); Iris Agmon, “Saḥar ha-ḥutz ke-gorem li-tmurot be-‘anfei ha-mesheq ha-‘Arvi be-Eretz Yisra’el (1897–1914),” Cathedra, 41 (1986), p. 113. 14 Consul Devey, “Report on the Trade of Jeddah and Hodeida for the Years 1899–1901,” FO, DCR AS 2926 (1903), p. 20; Ernest Weakley, Report upon the Conditions and Prospects of British Trade in Syria, U.K., Board of Trade, Commercial Intelligence Committee, London: H.M.’s Stationary Office, 1911, p. 204 (hereafter: Weakley, Report); Ibrāhīm al-Durūbī, al-Baghdādiyyūn, akhbāruhum wa-majālisuhum, Baghdad: Maṭbaʿat al-Rābiṭa, 1377/1958, pp. 83, 159–60, 197, 222 (hereafter: al-Durūbī, al-Baghdādiyyūn); al-Ḥiṣnī, Kitāb, vol. 2, pp. 902, 909; Fawaz, Merchants, p. 97; Eric Davis, Challenging Colonialism: Bank Misr and Egyptian Industrialization, 1920– 1941, Princeton: Princeton University Press, 1983, pp. 78–79 (hereafter: Davis, Colonialism); J.R.L. Carter, Merchant Families of Saudi Arabia, 2nd ed., London: Scorpion Books, 1984, p. 49 (hereafter: Carter, Saudi Arabia); idem, Merchant Families of Kuwait, London: Scorpion Books, 1984, pp. 49–50 (hereafter: Carter, Kuwait); Mishary Abdalrahman Al-Nuaim, “State Building in a Non-Capitalist Social Formation: The Dialectics of Two Modes of Production and the Role of the Merchant Class, Saudi Arabia 1902–1932,” Ph.D. Dissertation, University of California, Los Angeles, 1987, p. 309 (hereafter: Al-Nuaim, “State Building”); “Report on Wool,” Baghdad 1860, in Charles Issawi, The Fertile Crescent 1800–1914, New York: Oxford University Press, 1988, pp. 344–46 (hereafter: Issawi, Fertile Crescent); Muḥammad Rāghib al-Ṭabbākh, Iʿlām al-nubalāʾ bi-taʾrīkh Ḥalab al-shahbāʾ, 2nd ed., Ḥalab: Dār al-qalam al-ʿArabī, 1988, vol. 7, p. 467 (hereafter: al-Ṭabbākh, Iʿlām); Robert Vitalis, When Capitalists Collide. Business Conflict and the End of Empire in Egypt, Berkeley: University of California Press, 1995, p. 234 n. 6 (hereafter: Vitalis, Capitalists).

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Indeed, the Muslim big merchants had been dominant in domestic and regional trade long before the economic changes of the nineteenth century began.15 What merits emphasis in the present context is that by the second half of the nineteenth century, these merchants were active not only in domestic and regional trade, but also in international trade (mainly with Europe and east Asia), which had proliferated rapidly in the aftermath of the first industrial revolution. The growth of foreign trade in the late nineteenth century resulted in far greater profits to its players than those accrued from domestic and regional trade.

The Muslim Big Merchants as Entrepreneurs The most important characteristic differentiating the Muslim big merchants from the other groups that made up the elite in Muslim society of the Middle East in the nineteenth century (i.e., high-ranking bureaucrats, ʿulamāʾ, big landowners, tribal leaders and others) is that the source of their wealth and property lay in profits from commerce and credit. Modest beginnings in trade (domestic, regional and foreign) and small-scale money-lending in the early nineteenth century and later led to the attainment by these merchants of a significant position in foreign trade as well as in traditional banking within several decades.16 Consequent to the growth of their income and profits, the big merchants began to purchase agricultural land,17 15 Faruk Tabak, “Local Merchants in Peripheral Areas of the Empire: The Fertile Crescent during the Long Nineteenth Century,” Review, 11 (1988), pp. 200–5. On the decline of local Muslim big merchants in international trade in Anatolia, the Levant and Egypt during the eighteenth century, see André Raymond, Artisans et commerçants au Caire au XVIIIe siècle, Damascus: Institut Français, 1973–74, vol. 1, pp. 249–50, 273–79; Halıl İnalcık, “Osmanlı Pamuklu Pazarı Hindistan ve İngiltere: Pazar Rekabetinde Emek Maliyetinin Rolü,” Middle Eastern Technical University Studies in Development, Ankara, 1979, p. 6; Bruce Masters, The Origins of Western Economic Dominance in the Middle East: Mercantilism and the Islamic Economy in Aleppo, 1600–1750, New York: New York University Press, 1988, pp. 100–5. 16 Up until the opening of branches of foreign banks and the establishment of local private and government banks, the Muslim big merchants were the main source of loans to rulers, elite groups and the commercial communities in many urban centers in the “eastern crescent,” and to a lesser extent in other regions as well. See, e.g., Ann Lambton, “Persian Society under the Qājārs,” Journal of the Royal Central Asian Society, 48 (1961), p. 137; William Ochsenwald, “The Financial Basis of Ottoman Rule in the Hijaz, 1840–1877,” in William W. Haddad and William Ochsenwald (eds.), Nationalism in a Non-National State, Columbus: Ohio State University Press, 1977, pp. 135–38; Batatu, Old Social Classes, pp. 292–93; Ashraf, Mawāniʿ-i taʾrīkh, p. 27; Abdul-Karim Rafeq, “The Impact of Europe on a Traditional Economy: The Case of Damascus, 1840–1870,” in JeanLouis Bacqué-Grammont and Paul Dumont (eds.), Économie et Sociétés dans l’Empire Ottoman, Paris: CNRS, 1983, p. 431; Al-Nuaim, “State Building,” pp. 252, 254, 295–96, 309–10; Bjørkelo, Prelude, p. 126; Jill Crystal, Oil and Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar, Cambridge: Cambridge University Press, 1990, pp. 24–25 (hereafter: Crystal, Oil); Rogan, “Money-lending,” pp. 251–52. 17 Gabriel Baer, A History of Landownership in Modern Egypt, 1800–1950, London: Oxford University Press, 1962, p. 140; Abdulleav, Promyshlennost’i zorozhdenie, p. 35; Batatu, Old Social Classes, p. 241; Nowshirvani, “Beginnings,” p. 578; Johnson, Class, p. 68; Bjørkelo, Prelude, pp. 127–28; David Fred Sterling-Decker, “Politics and Profits: The Development of Merchant

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whether to spread out risks or to maximize profits, in addition to acquiring higher social status. Nevertheless, the tujjār who became big landowners still remained essentially commercial players. In every case where their main source of income or the focus of their business activity was commerce, the big merchants continued to identify themselves as such. Similarly, large landowners who acquired their landed property by virtue of holding high public office (whether administrative and/or military), and at a certain stage invested money in commercial transactions, remained, in their economic and social orientation, part of the landed elite and lacked the predominant features of the upper layer of the commercial community.18 Most significantly, the Muslim big merchants of the last decades of the nineteenth century moved beyond commerce, finance and the acquisition of land. They became important entrepreneurs, investing money in commercial agriculture, manufacture (handicrafts), modern industries, transportation and social services (mainly education). Several spheres of investment demonstrate the initiative of the Muslim big merchants. One is the domain of commercial agriculture, namely investment in expanding the cultivation of export crops. Such was the investment in opium growing in Iran, indigo in Sudan, citrus in Palestine, grain in Syria, pearl fishing in the Persian Gulf, wool in northern Iraq, and other crops.19 For the most part, the Muslim big merchants who were involved in the export of a particular commodity were those who invested in the expansion of its production. Another sphere of big merchant investment was infrastructure aimed at increasing production, which involved the introduction of new technologies.20 While openness to technological Capitalism and Its Impact on the Political Economy of Korodfan, 1820–1898,” Ph.D. Dissertation, Michigan State University, 1990, p. 245 (hereafter: Sterling-Decker, “Politics and Profits”); James A. Reilly, “Damascus Merchants and Trade in the Transition to Capitalism,” Canadian Journal of History, 27 (1992), pp. 24–25 (hereafter: Reilly, “Damascus Merchants”); Eugène L. Rogan, “Ottomans, Merchants and Tribes in the Syrian Frontier (1867–1900),” in Daniel Panzac (ed.), Histoire économique et sociale de l’Empire Ottoman et de la Turquie, Paris: Peeters, 1995, (hereafter: Panzac, Histoire), pp. 254–55 (hereafter: Rogan, “Ottomans”); James A. Reilly, “Urban Hegemony in the Hinterland of Ottoman Damascus: Villages, Estates and Farms in the Nineteenth Century,” in Panzac, Histoire, pp. 463, 466. 18 Big merchants also managed to become large landowners, particularly in cases when the traditional landowning families (“notables”), or the rulers, were in need of sizable amounts of liquid funds and hence had to sell rural or urban lands. See, e.g., Gad G. Gilbar, “Economic and Social Consequences of the Opening of New Markets: The Case of Nāblus, 1870–1914,” in Thomas Philipp and Brigit Schaebler (eds.), The Syrian Land: Processes of Integration and Fragmentation in Bilād al-Shām from the 18th to the 20th Century, Stuttgart: Franz Steiner Verlag, 1998, p. 289; Shireen Mahdavi, For God, Mammon, and Country, Boulder: Westview Press, 1999, pp. 82–85 (hereafter: Mahdavi, For God). 19 Gilbar, “Persian Agriculture,” p. 340; Batatu, Old Social Classes, pp. 292–93; Bjørkelo, Prelude, p. 215; Sarah D. Shields, “Regional Trade and Nineteenth-Century Mosul: Revising the Role of Europe in the Middle East Economy,” International Journal of Middle East Studies, 23 (1991), p. 28 (hereafter: Shields, “Regional Trade”). 20 Consul Richards, “Report on the Trade of Damascus for the Year 1903,” FO, DCR AS 3266 (1904), p. 12; Weakley, Report, p. 127; Gilbar, “Persian Agriculture,” p. 363; Bjørkelo, Prelude, p. 129.

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innovation was not exclusive to the Muslim big merchants, in no other Muslim elite group was it linked to a complex of activities that nurtured and influenced domestic and foreign commerce as it was among the tujjār. The investment of the Muslim big merchants in handicrafts helped to turn several products into export goods at a time when the total output of local handicrafts was in decline. The greatest influence of this investment was in carpet weaving.21 In several areas in the Middle East, principally Iran, the contribution of this economic branch to employment, income and export was considerable. The Muslim big merchants played an important role in increasing output in this field, since expansion required intermediate financing. Carpets, especially large ones, took many months (sometimes years) to weave. The tujjār, by virtue of the liquid capital at their disposal, were able to finance the cost of the raw materials and pay advances to the weavers. Muslim big merchants were also involved in the production of silk and cotton fabrics (Damascus and Baghdad), shawls (Aleppo and Baghdad) and soap (Nāblus, Gaza and Damascus), both for domestic consumption and export, mainly to the markets of central Asia and India.22 In the last decades of the nineteenth century, Muslim big merchants formed part of the small group of foreign and local entrepreneurs who tried to establish industrial enterprises along the lines that had emerged during the first industrial revolution in Europe. The areas in which Muslim big merchants invested capital were typical of the first stage of modern industrialization, namely, factories for the manufacture of textiles, glass, porcelain, paper and cigarettes.23 Their awareness of new technologies was

21 Consul Barnham, “Report on the Trade and Commerce of the Vilayets of Aleppo and Adana for the year 1903,” FO, DCR AS 3154 (1904), pp. 3–4; Abdullaev, Promyshlennost’i zarozhdenie, p. 59; A. Cecil Edwards, The Persian Carpet: A Survey of the Carpet-Weaving Industry of Persia, London: Gerald Duckworth [1953] 1967, pp. 56, 201; Orhan Kurmuş, “The Role of British Capital in the Economic Development of Western Anatolia, 1850–1913,” Ph.D. Dissertation, University of London, 1974, pp. 180, 183, 186–87; Annette Ittig, “The Kirmani Boom – A Study in Carpet Entrepreneurship,” Oriental Carpet & Textile Studies, 2, 1985, pp. 116, 119–20; idem, “Carpets xi. Qajar Period,” EIr, vol. 4, pp. 879–80. 22 al-Durūbī, al-Baghdādiyyūn, p. 191; Batatu, Old Social Classes, p. 260; al-Ḥiṣnī, Kitāb, vol. 2, pp. 888, 889; Gad G. Gilbar, “The Growing Economic Involvement of Palestine with the West, 1865–1914,” in David Kushner (ed.), Palestine in the Late Ottoman Period, Jerusalem and Leiden: Yad Izhak Ben-Zvi and E.J. Brill, 1986, pp. 199, 201 (hereafter: Gilbar, “Growing Economic Involvement”); See Chapter 7 in this volume. See also Alexander Schölch, Palästina im Umbruch, 1856–1882: Untersuchungen zur wirtschaftlichen und sozio-politischen Entwicklung, Stuttgart: Franz Steiner Verlag, 1986, p. 154; al-Ṭabbākh, Iʿlām, vol. 7, pp. 405–8. 23 Mohammad Saʾīd Kalla, “The Role of Foreign Trade in the Economic Development of Syria, 1831–1914,” Ph.D. Dissertation, The American University, 1969, p. 200; Ashraf, Mawāniʿ-i taʾrīkh, pp. 82–86, 98; Gad G. Gilbar, “The Opening up of Qājār Iran: Some Economic and Social Aspects,” Bulletin of the School of Oriental and African Studies, 49 (1986), p. 83 (hereafter: Gilbar, “Opening up”); See Chapter 8 in this volume. See also “Report on the Trade of Alexandretta,” Alep 1871, in Issawi, Fertile Crescent, p. 387; Reilly, “Damascus Merchants,” pp. 23–24.

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evident in their ventures.24 As with earlier efforts of this kind in the Middle East, only a few of these enterprises overcame the difficulties they faced in the first years of their operation and continued to produce for many decades. In the services sector, tujjār invested mainly in the development of transportation, motivated by their interest in promoting export and ensuring control of the various stages connected with it (a sort of vertical expansion). Muslim big merchants in important commercial centers in Iran, Iraq and Syria were owners of sailing ships and steamers for the transport of goods in the Mediterranean basin and the Indian Ocean. Some founded shipping companies.25 Others, from Kuwait, Bahrain and other principalities in the Persian Gulf, invested sizable sums in the building and operation of diving dhows for pearl fishing and the transport of various cargoes in the Gulf and beyond.26 Investment by the tujjār in the field of land transportation was mostly limited to traditional means and patterns: ownership of pack animals and financing trade caravans, usually from inland regions to port cities on the Mediterranean coast, the Persian Gulf and the Indian Ocean.27 Not all the initiatives and investments of the Muslim big merchants were business-oriented. They also invested in social services, transcending the quest for profits. Their efforts in the area of education were exceptional in scope and quality. During the period under consideration, tujjār, sometimes together with other elite groups, established at their own initiative and expense educational institutions that went beyond traditional patterns in the lands of Islam. These were primary and secondary schools in which secular subjects were taught. They also financed the translation of scientific textbooks from English and French into Arabic or Persian, and funded students’ studies at educational institutions in Europe.28 Additionally they allocated funds to Islamic educational institutions through 24 See, e.g., Consul-General Cumberbatch, “Report on the Trade, Commerce and Navigation of Beirut and the Coast of Syria for the Year 1907,” FO, DCR AS 4142 (1908), p. 6; Weakley, Report, p. 127. 25 “Name of the owner of the ship [Nada] . . .,” enclosure no. 3 in dispatch no. 33, Pelly to Alison, Bushire, 24 November 1870, FO 248/267, NAUK; al-Durūbī, al-Baghdādiyyūn, pp. 83, 159–60; Batatu, Old Social Classes, p. 260; al-Ḥiṣnī, Kitāb, vol. 2, p. 875; Gilbar, “Opening up,” pp. 83–84; Fattah, Regional Trade, p. 83. 26 Lorimer, Gazetteer, vol. 1, pt. 2, p. 2227; Villiers, Sons, p. 341. 27 In Iran the tujjār also invested in the construction of new bridges, caravanserais and a small section of railway. See Ḥājjī Mīrzā Ḥasan Fasāʾī, Fārs nāma-i Nāṣirī, lith., Tehran, 1313/1895–96, vol. 2, pp. 26, 163–64, 205; Gilbar, “Persian Agriculture,” pp. 341–42; Ashraf, Mawāniʿ-i taʾrīkh, p. 79; Mahdavi, For God, pp. 108–14; 126–34. See also Shields, “Regional Trade,” p. 31. 28 al-Durūbī, al-Baghdādiyyūn, p. 103; al-Ḥiṣnī, Kitāb, vol. 2, p. 904; Ashraf, Mawāniʿ-i taʾrīkh, p. 28; Mohammad Yadegari, “The Iranian Settlement in Egypt as seen through the Pages of the Community Paper – Chihrinima (1904–1966),” in E. Kedourie and S.G. Haim (eds.), Modern Egypt: Studies in Politics and Society, London: Frank Cass, 1980, pp. 100, 109; Field, Merchants, pp. 23, 31; Johnson, Class, pp. 63, 67–70; Crystal, Oil, p. 25. Big merchants also supported the publication of newspapers and journals. See Shaul Bakhash, Iran: Monarchy, Bureauracy & Reform under the Qajars, 1858–1896, London: Ithaca Press, 1978, pp. 313–14; Edhem Eldem, Daniel Goffman and Bruce Masters (eds.), The Ottoman City between East and West: Aleppo, Izmir, and Istanbul, Cambridge: Cambridge University Press, 1999, p. 76.

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direct contributions or the establishment of awqāf to cover the running expenses of madrasas.29 These initiatives in the field of education demonstrate that the tujjār were associated closely with Islamic traditions yet at the same time were open to new ideas. A strong thread connected their economic initiatives and those in the field of education: affinity to the world beyond their own society and culture. While their economic investments were intended to strengthen ties with external systems primarily by means of expanding exports, their investments in education were designed to build bridges in the domains of science and culture between the local society and European countries, with which the Muslim big merchants were in direct contact.

Prominent Tujjār Profiles of several Muslim big merchants from various parts of the Middle East may serve to illuminate the observations made above. Of the growing number of biographies of tujjār reconstructed in recent studies or located in collections of biographies, only a few portraits are sketched in below. They do not represent all groups of Muslim tujjār throughout the Middle East. Still, they exemplify some of the characteristics of Muslim big merchants active in the period under discussion. In light of the scope of their business interests, their wealth and their economic power, these tujjār were regarded in their communities as prominent and influential personalities. (1) Ḥājj Muḥammad Ḥasan Iṣfahāni Amīn al-Ḍarb (1834–1898). Amīn al-Ḍarb represents the best known case of an unremitting rise from the status of small trader to big merchant, with the acquisition of great wealth and influence that went with it. A member of a family of ṣarrāfs (money changers and lenders) and small traders in Iṣfahān, Amīn al-Ḍarb became one of the richest merchants in Iran within two to three decades of embarking on his business career. Estimates of the value of the property he left behind vary, and their reliability is doubtful. A modest estimate quoted by members of his family is 800,000 tūmāns (about £3.5 million in current prices). A shrewd and bold businessman, Amīn al-Ḍarb amassed this enormous wealth through a series of highly gainful transactions. He also displayed remarkable entrepreneurial qualities: openness to innovation, a readiness to take commercial risks, long-term planning, and forbearance in profittaking. His initiative was reflected in the founding of a sailing company to transport goods from the Iranian ports in the Persian Gulf to harbors in 29 Iḥsān al-Nimr, Taʾrīkh Jabal Nāblus waʾl-Balqāʾ, vol. 2, Nāblus: Maṭbaʿat al-naṣr al-tijāriyya, 1380/1961, p. 294; ʿĀdil Mannāʾ, Aʿlām Filasṭīn fī awākhir al-ʿahd al-ʿuthmānī, (1800–1918), 2nd ed., Beirut: Muʾassasat al-Dirāsāt al-Filasṭīniyya, 1995, p. 234; Meir Litvak, Shiʿi Scholars of Nineteenth-Century Iraq. The ʿUlamāʾ of Najaf and Karbala’, Cambridge: Cambridge University Press, 1998, pp. 36, 84, 92, 182.

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India and China; the establishment of factories in Iran, France and Russia; and the construction of a railway line in Māzandarān (Iran). He was also involved in political developments in Iran as a firm supporter of the reform movement in that country. His son, Hājj Muḥammad Ḥusayn (Amīn al-Ḍarb II, 1872–1933), further entrenched his father’s business concerns and continued his many economic enterprises. He funded innovative educational projects (schools, a public library, newspapers, etc.), and was one of the political and financial supporters of the movement for the introduction of a constitution and the establishment in 1906 of the majlis in which he became a leading member.30 (2) Muḥammad ʿAlī ʿAlīriżā (c. 1880–1969). One of the most enterprising merchants of the period, Muḥammad ʿAlī was the son of Zayn Ibn ʿAlīriżā who migrated from southern Iran to Jidda in 1840 and established his businesses there. Muḥammad ʿAlī became a pearl merchant and one of the largest exporters of pearls in the Persian Gulf region. Realizing that he could increase his profits if he expanded his operations to cover all stages of marketing (vertical expansion), he opened offices and a store in Paris, selling pearls directly to Parisian customers. The most remarkable aspect of this big merchant, however, was his commitment to promoting education. Using his own resources as well as contributions he elicited from his family and other tujjār families in Jidda and elsewhere in Arabia, he established new schools first in Jidda and Mecca and later in Bahrain, Dubai and Bombay, and devoted a substantial portion of his capital to funding them over a long period. These schools exerted a great influence on the development of the youngsters who attended them and who in time occupied key positions in Saudi Arabia and other Gulf states.31 (3) ʿAbdallāh Ḥamza ([1824?]–1940). This Muslim big merchant was based in the town al-Matamma, north of Khartoum. ʿAbdallāh’s father, Ḥamza, had laid the foundations of the family enterprises by investing in the cultivation of indigo in the early 1840s and by acquiring land which, in addition to its economic advantages, accrued social prestige to the family. ʿAbdallāh himself focused on the export of gum-arabic and grain from the late 1860s onward, and at the same time imported finished industrial goods, mainly textiles. As a big merchant he was also active in money-lending and exchange. Like his father, ʿAbdallāh bought land in various regions in Sudan and in Egypt. By the closing decades of the nineteenth century, ʿAbdallāh had become one of the most prominent Muslim big merchants in northern Sudan,

30 Mihdī Bāmdād, “Muḥammad Hasan,” Sharḥ-i ḥāl-i rijāl-i Īrān dar qarn 12, 13, 14 hijrī, Tehran: Kitābfurūshī-i Zawwār, 1966, vol. 3, pp. 348–62 (hereafter: Bāmdād, Rijāl-i Īrān); Ashraf, Mawāniʿ-i taʿrīkh, p. 74; A. Enayat, “Amīn al-Żarb,” EIr, vol. 1, pp. 951–53; Mangol Bayat, Iran’s First Revolution, New York: Oxford University Press, 1991, p. 49 (hereafter: Bayat, First Revolution); Mahdavi, For God, pp. 68 ff. 31 Field, Merchants, pp. 22–24.

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concentrating on the export and import of goods via Egypt and maintaining agencies, together with his brothers and other relatives, in the main commercial centers of Sudan and Egypt. Amenable to technological innovation, he was among the first to import steam-powered irrigation pumps (wābūr) from Britain. Before the emergence of the Mahdist state (1885), he owned extensive assets, including houses, warehouses, freighters and livestock, throughout the Dongola, Kordofan, and Dār Fūr regions in Sudan and in al-Rammādī in Upper Egypt. A sizable part of ʿAbdallāh’s property in Sudan was confiscated by the Mahdists, but he continued his extensive business activities from Egypt.32 (4) Ḥusayn (al-ʿĪtānī) Bayhum. A Beirut merchant who engaged in foreign trade as early as the first half of the nineteenth century, Ḥusayn, who adopted the name Bayhum, is regarded as the founder of a powerful Muslim family of big merchants and entrepreneurs. His sons and other members of his family specialized in silk and wool exports from Lebanon and imports of finished industrial goods from European countries. The Bayhums were also involved in finance, namely, moneylending, and, additionally, bought agricultural and urban lands in Lebanon. The scope of their business activity and their wealth made the Bayhums the most influential Sunni family in Beirut in the late nineteenth and early twentieth centuries. Members of the family were renowned for their economic initiative. They invested in silk production, an economic branch controlled by foreign and local Christian big merchants, becoming silk exporters. They also invested in the transport sector, namely, in the construction of the Beirut-Damascus carriage road. Additionally, the Bayhums invested in the development of the educational system in Beirut. Ḥasan Bayhum, a leading member of the family, was one of the founders of the jamʿiyyat al-maqāṣid al-khayriyya al-Islāmiyya, established in 1878 to promote Arab educational institutions in Beirut. Other members of the family were also active in this society in the pre- and post-First World War period.33 (5) ʿAbd al-Qādir al-Khuḍayrī. The most prosperous son of a family of Muslim big merchants in Baghdad and Baṣra in the second half of the nineteenth

32 Bjørkelo, Prelude, pp. 124–30; idem and Mustafa A. Ali, “A Sudanese Merchant’s Career Based on His Papers. A Research Project,” History in Africa, 17 (1990), pp. 33–34. 33 Consul Moore to Mr. Bidwell, “List of Syrian mercantile houses at Beyrout which trade direct with England,” enclosure no. 3 in dispatch no. 20, Beyrout, 27 December 1848, FO 83/111, NAUK; Jacques Thobie, Intérêts et imperialisme français dans l’empire ottoman (1895–1914), Paris: Imprimerie nationale, 1977, pp. 165, 167; Fawaz, Merchants, pp. 96–97; Boutros Labaki, Introduction à l’histoire économique du Liban: soie et commerce extérieur en fin de période ottomane (1840–1914), Beirut: Publications de l’université libanaise, 1984, pp. 49, 54–57; Johnson, Class, pp. 60–65; Kais M. Firro, “Silk and Agrarian Changes in Lebanon 1860–1914,” International Journal of Middle East Studies, 22 (1990), p. 166; Shaykh Ṭarālawlī, Bayrūt fī al-taʿrīkh wa-l-ḥaḍāra wa-l-ʿumrān, Beirut: Dār al-ʿilm lil-malāyīn, 1993, pp. 299, 316 (hereafter: Ṭarālawlī, Bayrūt).

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century, ʿAbd al-Qādir reached his zenith at the end of that century when he controlled a substantial share of several export commodities in Iraq, namely, barley, wool and dates. He became a powerful economic entrepreneur by virtue of his ownership of several ships plying the Baghdad-Baṣra route. This gave him an important advantage over other big merchants, both Muslim and non-Muslim, engaged in foreign trade. ʿAbd al-Qādir channeled part of his huge profits into land purchases in the vilayets of Baghdad and Baṣra, a move that allowed him to expand the cultivation of export products. As part of his diverse activities, he established close ties with the court of ʿAbd al-Ḥamīd II in Istanbul and with that of Muẓaffar al-Dīn in Tehran, and probably provided loans to these two rulers.34 (6) ʿAbd al-Raḥmān al-Nābulsī and his sons. Merchants from Nāblus, they combined industrial with intensive commercial activity, making them one of the foremost tujjār families of Palestine at the end of the nineteenth century. Owners of soap factories in Nāblus, they exported the finished product to neighboring countries, especially Egypt. Their involvement in this trade led to the export and import of other goods and the opening of a branch office in Jaffa, where they conducted their foreign trade dealings. They also invested sizable sums in land purchases in Nāblus and adjacent areas and later in the Maʿān district. The Nābulsīs were among the founders in the early 1900s of the al-Najāḥ school in Nāblus, which was to become a prestigious institution of secondary education in Mandatory Palestine.35 (7) The Maydān grain merchants of Damascus. This group of tujjār in the second half of the nineteenth century included members of the ʿĀbid, Mahāyinī, Ḥibāb, Ṣabbāgh, Nūrī and Sukkar families who invested capital in expanding grain cultivation in the Hawrān region during the last decades of the nineteenth century. The resultant increase in grain yields and the large profits that accrued from grain exports permitted these tujjār to purchase agricultural lands in the Hawrān and other regions in Syria. As a result of their control of considerable economic resources, they became part of the Damascene elite of the late Ottoman period.36

34 al-Durūbī, al-Baghdādiyyūn, pp. 83–84; ʿAbbās Baghdādī, Liʾallā nansa: Baghdād fī al-ʿishrīnāt, Beirut: al-Muʾassasa al-ʿArabiyya lil-dirāsāt wa’l-nashr, 1998, p. 278. 35 Rafīq and Bahjat, Bayrūt, vol. 1, pp. 119–20; Antonin Joseph Jaussen, Coutumes Palestiniennes, I. Naplouse et son district, Paris: Paul Geuthner, 1927, pp. 134–35; Shimoni, ‘Arvey, p. 231; Raouf Sa‘d Abujaber, Pioneers over Jordan, London: I.B. Tauris, 1989, pp. 159, 286 n. 51; Beshara Doumani, Rediscovering Palestine: Merchants and Peasants in Jabal Nablus, 1700–1900, Berkeley: University of California Press, 1995, p. 214. 36 al-Ḥiṣnī, Kitāb, vol. 2, pp. 863–64, 883; Reilly, “Damascus Merchants,” p. 21. On other Maydān grain merchants, see Philip S. Khoury, Urban Notables and Arab Nationalism: The Politics of Damascus, 1860–1920, Cambridge: Cambridge University Press, 1983, pp. 37–39; Linda Schatkowski Schilcher, Families in Politics: Damascene Factions and Estates of the 18th and 19th Centuries, Stuttgart: Franz Steiner Verlag, 1985, pp. 153–55 (hereafter: Schatkowski Schilcher, Families).

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New Patterns of Enterprise On the basis of what is known about the mode of activity of the Muslim big merchants,37 four factors may be posited to explain the transformation that they engendered from traditional to new patterns of economic enterprise: (1) The tujjār acquired large profits from their activities over a prolonged period, from the 1860s or 1870s until the First World War. (2) They were exposed to the rapid economic growth in Europe during the late nineteenth century, manifested particularly in foreign trade. The tujjār soon realized that their own activity constituted a contributory factor to the process of economic growth in their countries. They invested considerable sums in a number of fields, notably the development and expansion of commercial agriculture. It would appear that, more than any other social group in Muslim society in the Middle East, the tujjār were significantly affected by the economic forces that underlay the capitalist economies of the West, stimulating high rates of growth and thereby accumulating considerable wealth. (3) Commerce assured the big merchants a high level of liquidity, i.e., large and continuous cash flows, part of which were in foreign currencies. In this respect, too, the tujjār were an exceptional group in Muslim society. While other groups within the political and social elites also had substantial incomes, they faced chronic liquidity difficulties, or, worse, were deeply in debt, in part to the Muslim big merchants themselves.38 Liquidity afforded the big merchants a broad spectrum of investment alternatives in various areas. (4) The Muslim big merchants were caught in the “traders’ dilemma.”39 Their public standing within their respective communities was complex. The perception by the public that the tujjār manipulated the prices of basic commodities or charged excessive interest rates was not uncommon and in many cases not unfounded.40 This dilemma was especially troubling to the

37 For details on other Muslim big merchants, see, e.g., al-Durūbī, al-Baghdādiyyūn, pp. 99–100, 102–3, 104–5, 157–58, 159–60, 189, 191, 197, 198, 221–22; Bāmdād, Rijāl-i Īrān, vol. 3, pp. 141– 45, 299, 321–22; al-Ṭabbakh, Iʿlām, vol. 7, pp. 405–8; Fattah, Regional Trade, pp. 77–80, 82–83. 38 Abdullaev, Promyshlennost’i zarozhdenie, p. 159; Ashraf, Mawāniʿ-i taʾrīkh, p. 27; Al-Nuaim, “State Building,” pp. 252, 254, 295–96, 309–10; Bjørkelo, Prelude, p. 126; Mahdavi, For God, p. 117. 39 Hans-Dieter Evers, “The Traders’ Dilemma: A Theory of the Social Transformation of Markets and Society,” in idem and Heiko Schrader (eds.), The Moral Economy of Trade: Ethnicity and Developing Markets, London: Routledge, 1994, pp. 7–14. See also Tilman Schiel, “The Traders’ Dilemma: The Perspective of the longue durée,” in ibid., pp. 15–26. 40 Expressions of hostility toward big merchants, particularly against those who traded in basic foodstuffs (flour, oil), were evident in periods of scarcity and rising prices. Merchants were accused by officials and consumers of holding back stocks in order to push up prices and obtain greater profits. See S.G. Wilson, Persian Life and Customs, 3rd ed., New York: Fleming H. Revell, 1900, p. 180; Feroz Ahmad, “Vanguard of a Nascent Bourgeoisie: The Social and Economic Policy of the Young Turks 1908–1918,” in Osman Okyar and Halil İnalcık (eds.), Social and Economic History

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big merchants because, in an atmosphere of antagonism, the temptation of those in power to fine them or seize their property became greater. Cases of property confiscation of Muslim big merchants by rulers of the countries under consideration, although rare, did occur during the nineteenth century.41 Against this background, Muslim big merchants seemed to take care not to spend extravagantly and not to arouse the resentment of those in power.42 Accounts of the appearance of Muslim big merchants attest that many of them displayed a measure of self-restraint.43 Hence, considerable fluid funds of Turkey (1071–1920), Ankara: Meteksan, 1980, pp. 338–39 (hereafter: Ahmad, “Vanguard”); Zafer Toprak, Türkiye’de “Milli İktisat” (1908–1918), Ankara: Yurt Yayınları, 1981, p. 301; SterlingDecker, “Politics and Profits,” p. 259. On tujjār and the indebtedness of peasants, see Mrs. [Elizabeth Anne] Finn, Home in the Holy Land: A Tale Illustrating Customs and Incidents in Modern Jerusalem, London: James Nisbet, 1866, pp. 350–53; Rafīq and Bahjat, Bayrūt, p. 122. ʿUlamāʾ continued in recent centuries to condemn tujjār and other Muslim money-lenders for charging interest. See, e.g., Muḥammad Amīn Ibn ʿĀbidīn, Radd al-muḥtār ʿalā al-durr al-mukhtār, [Cairo] Beirut, Dār iḥyāʿ al-turāth al-ʿArabī, [1272/1855–6] 1407/1987, vol. 4, p. 175; idem, al-ʿUqūd aldurriyya fī tanqīḥ al-fatāwā al-Ḥāmidiyya, [Cairo] Beirut: Dār al-maʿrifa, [1301/1883–4] n.d., vol. 2, pp. 204–5; Timur Kuran, “The Economic System in Contemporary Islamic Thought: Interpretation and Assessment,” International Journal of Middle East Studies, 18 (1986), pp. 149–50; Juan R.I. Cole, “Ideology, Ethics, and Philosophical Discourse in Eighteenth Century Iran,” Iranian Studies, 22 (1989), pp. 25–27. See also idem, Roots of North Indian Shīʿism in Iran and Iraq: Religion and State in Awadh, 1722–1859, Berkeley: University of California Press, 1988, pp. 258–59. See further Chapter 3 in this volume. 41 See, e.g., Tomara, Ekonomickeskoe, pp. 106–16; “Hajji Ali Akbar Shirazi,” in “Biographical Notices,” FO 60/592; Al-Nuaim, “State Building,” p. 307; Fatma Müge Göçek, Rise of the Bourgeoisie, Demise of Empire, New York: Oxford University Press, 1996, pp. 92, 171 n. 46; 175 n. 85 (hereafter: Göçek, Bourgeoisie); Mahdavi, For God, pp. 152–54. The cases discussed by Göçek relate to the eighteenth and early nineteenth centuries. 42 Batatu writes of the big merchants of Baghdad: “ . . . the merchants, at least before the 1908 Young Turk Revolution, were reluctant to draw attention to themselves or to the fact that they were wealthy, for fear of attracting the greed of arbitrary rulers.” Old Social Classes, p. 226. Al-Nuaim writes on the tujjār of Riyadh: “ . . . they kept a low financial and commercial profile to avoid the embarrassment of political request for a lot of support.” See “State Building,” p. 291. Not all tujjār adopted this attitude. al-Ḥiṣnī mentions big merchants in Damascus who owned “impressive” houses. Kitāb, vol. 2, p. 889. Writing about Aleppo in the eighteenth century, André Raymond notes that “the most important houses belonged to the merchant bourgeoisie . . .” The Great Arab Cities in the 16th -18th Centuries: An Introduction, New York: New York University Press, 1984, p. 77. Kamal Salibi wrote that the big merchants of Beirut (both Christian and Muslim) lived “in large Italianate mansions.” The Modern History of Lebanon, London: Weidenfeld and Nicolson, 1965, p. 142. See also Eugene L. Rogan, Frontiers of the State in the Late Ottoman Empire: Transjordan, 1850–1921, Cambridge: Cambridge University Press, 1999, pp. 96–97, 116–19 (hereafter: Rogan, Frontiers). 43 The impression one gets from photographs and paintings of tujjār of the late nineteenth century is that they were not ostentatious in appearance. See, e.g., photographs of Muḥammad Ḥasan Amīn al-Ḍarb in Bāmdād, Rijāl-i Īrān, vol. 3, pp. 348, 349; Mahdavi, For God, pp. 46, 67. See also paintings by European artists (some of these pictures also include merchants of lower standing), Chahine Gallery, Les Orientalistes au Liban, Beirut: Editions Richard A. Chahine, n.d., p. 224 no. 295; Lynne Thornton, The Orientalists Painter-Travellers, 1828–1908, Paris, ACR Edition, 1983, pp. 155, 220–21, 232; The Mathaf Gallery (London), Lands without Shade: The Orient

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remained at their disposal. These were used in part to improve their public image. Charity was given to the needy and contributions were made to Islamic institutions and to the ʿulamāʾ.44 Most of their savings, however, were channeled into new economic initiatives. Their restraint regarding conspicuous consumption may have contributed to their emergence as significant investors and entrepreneurs. Despite the complexity of the relationships between the tujjār and the various strata in society, the entrenchment of the Muslim big merchants in their local communities gave them the confidence to invest their profits in their environs. The choices made by the Muslim tujjār as to where to invest their capital differentiated them both from their foreign counterparts and from some of their colleagues in the local minority communities. Foreign trading houses and banks which financed trade in the region streamed part of their profits elsewhere. For example, Ralli Brothers, Sassoon & Co., Credit Lyonnais and Ernest Cassel, operating in Istanbul, Izmir, Alexandria or Beirut, heavily invested in other parts of the world, primarily in Europe and eastern Asia.45 Likewise, some of the non-Muslim big merchants diverted large proportions of their profits to enterprises outside the Middle East, as, for example, the Armenian merchants in Istanbul and the Jewish merchants in Baghdad.46 The reasons for this divergence in investment patterns47

44

45 46

47

through Western Eyes, London: Mathaf Gallery, 1985, illustrations no. 16, 19; Briony Llewellyn, The Orient Observed: Images of the Middle East from the Searight Collection, London: Victoria and Albert Museum, 1989, p. 88. See also Abdollah Mostofi (Mustawfī), The Administrative and Social History of the Qajar Period, tr. Nayer Mostofi Glenn, Costa Mesa: Mazda Publishers, 1997, vol. 1, p. 317. Close though complex relations existed between many tujjār and leading ʿulamāʾ. Intermarriages between tujjār and ʿulamāʾ families were not uncommon. ʿulamāʾ sons became merchants, and in some cases ʿulamāʾ themselves were engaged, directly or indirectly, in commerce. See al-Durūbī, al-Baghdādiyyūn, p. 191; al-Ḥiṣnī, Kitāb, vol. 2, pp. 883, 886; Ṭarālawlī, Bayrūt, pp. 301–2; Schatkowski Schilcher, Families, pp. 177–84; James A. Reilly, “Property, Status, and Class in Ottoman Damascus: Case Studies from the Nineteenth Century,” Journal of the American Oriental Society, 112 (1992), pp. 12, 14–15, 20; Mahmoud Yazbak, “Strife among the Social Elite in Haifa, 1870– 1914: The Traditional Elite versus a New Rising Elite,” in Panzac, Histoire pp. 547–48; Mahdavi, For God, p. 160. See also Fattah, Regional Trade, p. 79; Dina Rizk Khoury, State and Provincial Society in the Ottoman Empire: Mosul, 1540–1834, Cambridge: Cambridge University Press, 1997, p. 152; James L. Gelvin, Divided Loyalties: Nationalism and Mass Politics in Syria at the Close of Empire, Berkeley: University of California Press, 1998, pp. 114–16 (hereafter: Gelvin, Loyalties). A.E. Crouchley, The Investment of Foreign Capital in Egyptian Companies and Public Debt, Cairo: Ministry of Finance, 1936, pp. 149–50, 158–59. Vartan Artinian, “A Study of the Historical Development of the Armenian Constitutional System in the Ottoman Empire, 1839–1863,” Ph.D. Dissertation, Brandeis University, 1970, p. 7; Batatu, Old Social Classes, pp. 252–54; Avraham Ben-Ya‘aqov, Yehudey Bavel ba-tfutzot, Jerusalem: Reuven Mass, 1985, pp. 74–76, 80–84, 366–68; Nissim Kazzaz, ha-Yehudim be-Iraq ba-me’ah ha-esrim, Jerusalem: Yad Izhak Ben-Zvi, 1991, pp. 94–95. Only rarely did Muslim big merchants invest abroad, namely in European and east Asian economies. Ḥājj Muḥammad Ḥasan Amīn al-Ḍarb was one of the only Muslim big merchants who owned factories in Europe. See “Biographical Notices,” FO 60/592.

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lay, inter alia, in the high profitability of commercial and industrial investments in those regions, and also the growing tensions between the Muslim population at large and the non-Muslim communities during the second half of the nineteenth century, which undermined the confidence of Christian and Jewish big merchants in the ability of the authorities to protect them and their property.48 No less significant was the political aspect. As a group, Muslim tujjār could, in theory and in practice, make more effective use of their economic strength in local politics. Indeed, Muslim big merchants played a significant role in the political developments of Middle Eastern countries in the early twentieth century.

Regions of Activity Muslim tujjār were not prominent in all large commercial centers of the Middle East. Their great impact was evident in the commercial centers of Iran, Syria, Palestine, eastern Arabia and Sudan. By contrast, their role in the foreign trade of western and northern Anatolia and Egypt was limited. In other words, the Muslim tujjār were preeminent in large-scale foreign and inland trade in the “eastern crescent” of the Middle East, i.e., most of Iran, the inland regions of bilād al-shām and northern Iraq, the eastern regions of the Arabian Peninsula, and Sudan. By contrast, in the “western crescent” along the shores of the eastern Mediterranean, the Aegean and the Black Sea, where port cities were the main commercial centers, foreign trade was dominated by non-Muslim big merchants and European trading firms. Each of these two regions, the eastern and the western, had an urban center that was in some way an exception: in the “eastern crescent” it was Baghdad, and in the “western crescent” – Beirut. Baghdad was the only city in the “eastern crescent” where non-Muslim tujjār – Jewish merchants – played a central role in large-scale commerce, including foreign trade. This is not to say that important Muslim big merchants were not active in Baghdad. However, the leaders in the business world of this city during the last decades of the nineteenth century were Jewish big merchants (Kadoori, Gabbai, Ezra and others).49 Beirut was the exception in the “western crescent” for a different reason. It was the only large port city and commercial center in this region in which, alongside local Christian big merchants (mostly Greek Orthodox, Maronite and Armenian) and foreign merchants, a small group of Muslim big merchants (Bayhum, Barbir, Salām and others) also flourished. These tujjār played a significant role in Beirut’s foreign

48 Quataert, “Commerce,” p. 841. 49 Batatu, Old Social Classes, p. 256 n. 176; Issawi, “Transformation,” p. 270; Mīr Baṣrī, Aʿlām al-Yahūd fī al-ʿIrāq al-ḥadīth, Jerusalem: Rābiṭat al-jāmiʿiyyūn al-Yahūd al-nāziḥīn min al-ʿIrāq fī Isrāʾīl, 1983, pp. 90–94; Gad G. Gilbar, “Changing Patterns of Economic Ties: The Syrian and Iraqi Provinces in the 18th and 19th Centuries,” in Philipp, Syrian Land, p. 61. See Chapter 6 in this volume.

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trade.50 The uniqueness of both Baghdad and Beirut in this context lay in the special status of the community of Jewish merchants (Baghdad) and Muslim merchants (Beirut) in the economic life of these cities prior to the onset of the rapid expansion of foreign trade in the Middle East in the late 1860s. The relative economic strength of these groups before the second half of the nineteenth century allowed them to play an important role in foreign trade in the boom years of the late nineteenth century. Within the “eastern crescent,” the extent of the Muslim big merchants’ operations and the degree of their control of the commercial and economic systems varied. These tujjār may be divided into two sub-groups. The first consisted of big merchants in the commercial centers of Iran, most of eastern Arabia, and northern Sudan. These were centers where the Muslim tujjār acquired control in the field of commerce and displayed the most evident economic initiative. They also enjoyed considerable financial power in these centers. Of all the Muslim big merchants, the Iranian tujjār stand out as a singularly powerful group, achieving the greatest economic influence of all their counterparts in the Middle East. Notably, conditions in Iran in the latter half of the nineteenth century encouraged commercial activity: available lands for expanding agricultural cultivation, a central government that for most of the period did not interfere in the economic activity of the tujjār, and elite groups, especially the ʿulamāʾ, who more often than not legitimized the merchants’ practices. This contrasted with the manifold difficulties confronting foreign trading companies operating in Iran. The Iranian picture also contrasted with that in Arabia and Sudan, where the Muslim big merchants did not attain a similar economic position as that of their colleagues in Iran. Demographic and economic conditions in these countries did not allow for economic growth on a similar scale. However, while both in Iran and Sudan, foreign trading companies as well as local non-Muslim big merchants had a share in foreign trade, it was smaller than the share of the local Muslim tujjār.51 The second sub-group in the “eastern crescent” consisted of Muslim tujjār in most of the commercial centers in the Arab provinces of the Ottoman Empire in the Fertile Crescent and western Arabia, primarily Damascus and Aleppo, Haifa and Jaffa, Mawṣil and Baṣra, and Jidda and Ḥudayda, where they played an important role in foreign trade. However, while the tujjār of these communities amassed significant economic power, conditions and circumstances in these centers differed from those in Iran, eastern Arabia and Sudan in two domains. First, several commercial centers in the Fertile Crescent, such as Acre and Tripoli, diminished in significance during the second half of the nineteenth century, losing

50 Fawaz, Merchants, pp. 95–98; Johnson, Class, pp. 60–65, 67–72. 51 Gilbar, “Opening up,” pp. 76–77, 82, 89. For a different view, see W.M. Floor, “The Merchants (tujjār) in Qājār Iran,” Zeitschrift der Deutschen Morgenlandischen Gesellschaft, 126 (1976), pp. 119–25, 133; Jean Calmard, “Les marchands iraniens: formation et montée d’un groupe de pression, 16e–20e siècles,” in Lombard and Aubin, Marchands, pp. 103–4; John Foran, Fragile Resistance, Boulder: Westview Press, 1993, p. 124 (hereafter: Foran, Resistance).

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their commercial importance to other towns better located along the new international trade routes. Secondly, the foreign merchants, and especially the nonMuslim tujjār, played an important role in those centers that grew commercially. Christian big merchants were active in Aleppo, Jaffa and Haifa, and Jewish big merchants in Baṣra. Hence, in most trade centers in the Fertile Crescent, Muslim big merchants did not control commercial activity. The one exception was Nāblus, where Muslim tujjār controlled large-scale trade.52 As for the major commercial centers of the “western crescent” – Istanbul, Izmir and Alexandria – only a small number of Muslim tujjār managed to attain a share of foreign trade there (in some cases their enterprises were impressive).53 NonMuslim big merchants and foreign trading houses were predominant in these major port cities of the Mediterranean and Aegean, for three reasons: (1) Foreign merchants preferred to base themselves in the main port cities of the Middle East. The ports of western and northern Anatolia, the Levant and Egypt, most of whose trade in the nineteenth century was with Europe, naturally attracted foreign merchants, who were well-established in such cities as

52 On the rise of Muslim tujjār families in Nāblus, see Gilbar, “Nāblus,” pp. 287–91. On Muslim big merchants in several other towns in the Fertile Crescent in the late nineteenth century, see Batatu, Old Social Classes, pp. 289–93; Linda Schilcher, “The Grain Economy of Late Ottoman Syria and the Issue of Large-Scale Commercialization,” in Çağlar Keyder and Faruk Tabak (eds.), Landholding and Commercial Agriculture in the Middle East, Albany: State University of New York Press, 1991, pp. 189–90 (hereafter: Schilcher, “Grain Economy”); Sarah D. Shields, “Sheep, Nomads and Merchants in Nineteenth Century Mosul: Creating Transformations in an Ottoman Society,” Journal of Social History, 25 (1992), pp. 776–78; Mahmoud Yazbak, Haifa in the Late Ottoman Period, 1864–1914, Brill: Leiden, 1998, pp. 149–51; Rogan, Frontiers, pp. 95–120. 53 On Muslim tujjār in Istanbul, Izmir, Alexandria and Cairo, see, e.g., Franz Wertheim, Verzeichnisse der bekanntesten Handels – und Gewerbsfirmen, welche in folgenden Städten der Levante und Egyptens etablirt sind, Vienna: Leopold Sommer, 1860, p. 5; Donald Quataert, “Ottoman Reform and Agriculture in Anatolia, 1876–1908,” Ph.D. Dissertation, University of California – Los Angeles, 1973, pp. 67–68, 426 n. 15; al-Ḥiṣnī, Kitāb, vol. 2, pp. 884, 885; A. Üner Turgay, “Trade and Merchants in Nineteenth-Century Trabzon: Elements of Ethnic Conflict,” in Braude and Lewis, Christians and Jews, vol. 1, pp. 294, 300 (hereafter: Turgay, “Trade”); Donald Quataert, Social Disintegration and Popular Resistance in the Ottoman Empire, 1881–1908: Reactions to European Economic Penetration, New York: New York University Press, 1983, pp. 127, 137; Juan R.I. Cole, Colonialism and Revolution in the Middle East: Social and Cultural Origins of Egypt’s ʿUrabi Movement, Princeton: Princeton University Press, 1993, pp. 171–73; Vitalis, Capitalists, pp. 41, 234 n. 6; Michael J. Reimer, Colonial Bridgehead: Government and Society in Alexandria, 1807–1882, Boulder: Westview Press, 1997, pp. 162–63; Uri M. Kupferschmidt, Henri Naus Bey: Retrieving the Biography of a Belgian Industrialist in Egypt, Brussels: Koninklijke Academic voor Overzeese Wetenschappen, 1999, pp. 58, 74, 87, 96. In his work Cotton and the Egyptian Economy, 1820–1914 (Oxford: Oxford University Press, 1969), Roger Owen does not mention any major Muslim exporter/importer in the last decades of the nineteenth and the early twentieth centuries, not even Aḥmad Yaḥyā (b. 1840) and his son Amīn Yaḥyā (1866–1936). Writing on the economic development of Egypt in the years 1880–1914, Owen emphasizes that “. . . it was foreigners who provided nearly all of the expertise and managerial ability necessary to market the cotton crop and to create and run the country’s banks and other commercial institutions” (p. 321).

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Izmir and Istanbul by the early nineteenth century when foreign trade began to expand.54 (2) The port cities attracted local non-Muslim communities who assisted the foreign merchants in advancing their business transactions with various segments of the local population.55 (3) Overall, the foreign and non-Muslim big merchants enjoyed certain advantages over their Muslim counterparts. One was an exemption from various taxes (although not customs) imposed on local subjects engaged in trade. Another stemmed from the fact that treaties signed between foreign states and the Ottoman Empire limited the ability of the latter to intervene in or hinder the activities of foreign trading companies or of non-Muslims who had acquired the protection of a foreign state (berat holders).56 Yet another advantage lay in the foreign merchants’ commercial ties with their countries of origin. In exporting products from the Middle East, they had the advantage of familiarity with patterns of demand and marketing in the European countries, an advantage they also enjoyed with regard to importing goods from those economies to markets in the region. Ostensibly, Muslim big merchants had an advantage as well – their ties with a wide range of local sectors – producers, consumers and the local authorities. This, however, was not exclusive, as non-Muslim big merchants, too, succeeded in forging effective relations with the local population and its leaders.57 Given the advantages of the foreign and non-Muslim big merchants, why, it may be asked, did they fail to acquire control of the large-scale trade in the “eastern crescent” as well, especially in the commercial centers based along the sea or the rivers (e.g., Būshahr, Baṣra, Kuwait and Khartoum). Even though foreigners

54 Avedis K. Sanjian, The Armenian Communities in Syria under Ottoman Dominion, Cambridge, Mass.: Harvard University Press, 1965, pp. 64, 334 n. 61; Andreas Birken, “Die Wirtschaftsbeziehungen zwischen Europa und dem Vorderen Orient im ausgehenden 19. Jahrhundert,” Beihefte zum Tübinger Atlas des Vorderen Orients, B/37, Wiesbaden: Dr. Ludwig Reichert Verlag, 1980, pp. 45–47; Elena Frangakis-Syrett, “British Economic Activities in Izmir in the Second Half of the Nineteenth and Early Twentieth Centuries,” New Perspectives on Turkey, 5–6 (1991), p. 192 (hereafter: Frangakis-Syrett, “British Economic Activities”); Gerasimos Augustinos, The Greeks of Asia Minor, Kent: Kent State University Press, 1992, p. 105 (hereafter: Augustinos, Greeks). 55 Turgay, “Trade,” pp. 294, 308–10; Frangakis-Syrett, “British Economic Activities,” pp. 196–99; Augustinos, Greeks, p. 106; Vitalis, Capitalists, pp. 33–38; Göçek, Bourgeoisie, pp. 96–97. Notably, while there are many examples of close cooperation between foreign and local non-Muslim merchants, there were also cases of fierce competition between these two groups. See, e.g., Batatu, Old Social Classes, pp. 248–49; Fawaz, Merchants, p. 84; Turgay, “Trade,” p. 302; Kasaba, Ottoman Empire, pp. 73–75; Frangakis-Syrett, “British Economic Activities,” pp. 198–99, 203. 56 G. Baer, “Imtiyāzāt. iv-Modern Egypt,” EI 2nd ed., vol. 3, pp. 1193–95; H. İnalcık, “Imtiyāzāt, ii – The Ottoman Empire,” ibid., pp. 1179–88; A.K.S. Lambton, “Imtiyāzāt, iii – Persia,” ibid., pp. 1189–93; Issawi, “Transformation,” pp. 275–77. 57 Batatu, Old Social Classes, p. 247; Fawaz, Merchants, p. 93; Kasaba, Ottoman Empire, p. 80; Frangakis-Syrett, “British Economic Activities,” p. 194; Vitalis, Capitalists, pp. 33–37.

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showed less interest in trading in the inland regions more remote from the Mediterranean basin, trade with the eastern regions was not regarded as unimportant or unpromising. Indeed, foreign and non-Muslim trading companies did operate in such commercial centers as Būshahr, Tabrīz, Baṣra and Sawākin, where they competed intensely with local Muslim tujjār.58 However, the latter were generally more successful in those places and maintained control over a significant share of both foreign and inland trade. Their success stemmed from their greater capacity to overcome difficult local conditions, or the reluctance of the local population and the local authorities to have foreigners or non-Muslims in control of commerce and trade.59 Moreover, just as the familiarity of the foreign merchants with the European economies served as an advantage to them in the main port cities, the long-standing experience of the Muslim tujjār in the commercial centers of the “eastern crescent” aided them in retaining their position there. Egypt was an exception to the other regions discussed so far. It was the only country in which the central government fostered the growth of foreign commercial establishments and local non-Muslim big merchants and entrepreneurs. Notably, foreign merchants there enjoyed preferential conditions even before 1882, when British rule over Egypt was consolidated. However, from then until the First World War, Egypt was a virtual hothouse for the commercial and economic activity of foreigners and their non-Muslim associates, unequaled in the Middle East.60 By contrast, the central government of the Ottoman Empire did not encourage the commercial or other economic enterprises of foreign and non-Muslim big merchants. It is also true that prior to the Young Turk revolution in 1908, the Ottomans made only limited efforts to assist, and still less to nurture, the activities of Muslim tujjār. An Ottoman decision of the late eighteenth or early nineteenth century to maintain a degree of supervision over the non-Muslim merchants, a policy the Porte tried to implement during the first decades of the nineteenth century, had hardly any impact on the structure of the mercantile community by the closing decades of the century.61 One of the explanations put forward for the 58 Stanley Jackson, The Sassoons, London: Heinemann, 1968, pp. 107–8; Ashraf, Mawāniʿ-i ta’rīkh, pp. 50–56; Bjørkelo, Prelude, pp. 122–23; Sterling-Decker, “Politics and Profits,” pp. 138–39. 59 In May 1890 E.C. Ross, Britain’s consul-general in Būshahr, referred in a trade report to the difficulties experienced by foreign merchants in Iran. He wrote: “. . . when a . . . Persian debtor decides to free himself from his liabilities to foreign traders on easy terms, he finds his own officials ready with sympathising . . . assistance. In such cases, and unfortunately they are common, all efforts to obtain full justice must fail, for you find the judge leagued with the accused and ‘custodian quis custodiet’?” “Report on the Trade of Southern Persia and the Persian Gulf for the Year 1889,” Bushire, 20 May 1890, FO 248/502, NAUK. See also Lorimer, Gazetteer, vol. 1, pt. 2, pp. 2244–49; Bjørkelo, Prelude, p. 106; Crystal, Oil, pp. 31–32; Fattah, “Politics of Grain Trade,” pp. 162–63; Sarah D. Shields, Mosul before Iraq: Like Bees Making Five-Sided Cells, Albany: State University of New York Press, 2000, pp. 113–14. 60 Robert L. Tignor, Modernization and British Colonial Rule in Egypt, 1882–1914, Princeton: Princeton University Press, 1966, pp. 366–69; Vitalis, Capitalists, pp. 38–39. 61 On Ottoman taxation of exports, see Quataert, “Commerce,” pp. 826–27. For more details on the attempt to regain control over the non-Muslim merchants, see Ali Ihsan Bağiş, Osmanlı Ticaretinde

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inaction of Ottoman governments in the face of the dominance of non-Muslim and foreign merchants in international trade in Istanbul and Izmir is that it did not wish to encourage the emergence of a strong Muslim bourgeoisie power base.62 The Young Turks differed in their attitude. Upon taking power in 1908, and more especially during the First World War, they actively fostered Muslim tujjār, with the result that the non-Muslim big merchants began to lose their pre-dominance in foreign trade. However, the relatively brief period of Young Turk rule did not permit the maturation of significant results in this sphere.63 Matters developed differently in Iran during this period, especially in the 1890s and the early years of the twentieth century. After a long period in which the Qajars barely interfered in private enterprise, measures were adopted which, if not intended to impair the freedom of commercial activity of the Muslim big merchants, were liable to have that effect. In 1890 Nāṣir al-Dīn Shāh granted foreign entrepreneurs a monopolistic concession in the tobacco trade, and in 1899 the administration of Iran’s customs-houses was placed in the hands of Belgian officials. These steps elicited protest by the Muslim tujjār together with leading ʿulamāʾ and other urban groups in the major towns. The threat to the tujjār’s status and sources of economic power impelled them to assume a leading role in the mashrūṭiyyat – the reform movement that demanded limiting the authority of the shāh and the bureaucracy through the establishment of an elected council of representatives and the drawing up of a constitution that would curtail the ruler’s powers.64 Significantly, the first majlis to be convened, in October 1906, included leading tujjār among its delegates.

A Comparative Note An assessment of the role played by the Muslim tujjār in the economic development of the Middle East in the late nineteenth century may benefit from a comparison with certain aspects of the roles of merchants and government during the commercial revolution in Britain (1675–1775). The growth in Britain’s

Gayrı Müslimler, Kapitülasyonlar, Avrupa Tüccarları, Berath Tüccarlar, Hayriye Tüccarları, Ankara: Turhan Kitabevi, 1983, pp. 39–70; Bruce Masters, “The Sultan’s Entrepreneurs: The Avrupa tüccarıs and the hayriye tüccarıs in Syria,” International Journal of Middle East Studies, 24 (1992), pp. 579–97. 62 Ilkay Sunar, “State and Economy in the Ottoman Empire,” in Huri İslamoğlu-İnan (ed.), The Ottoman Empire and the World Economy, Cambridge: Cambridge University Press, 1987, pp. 80–81. 63 Ahmad, “Vanguard,” pp. 337–44; Çağlar Keyder, State and Class in Turkey: A Study in Capitalist Development, London: Verso, 1987, pp. 62–65 (hereafter: Keyder, State). 64 Ann K.S. Lambton, “The Tobacco Régie: Prelude to Revolution,” Studia Islamica, 22 (1965), pp. 124–42; Gilbar, “Big Merchants,” pp. 288–303; Ashraf, Mawāniʿ-i taʾrīkh, pp. 106–23; Vanessa Martin, Islam and Modernism. The Iranian Revolution of 1906, London: I.B. Tauris, 1989, pp. 52–55, 89–100, 108–9 (hereafter: Martin, Islam); Janet Afary, The Iranian Constitutional Revolution, 1906–1911: Grassroots Democracy, Social Democracy, and the Origins of Feminism, New York: Columbia University Press, 1996, pp. 29–33.

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foreign trade at the end of the seventeenth century was one of the main factors to foster the advent of the industrial revolution in that country. British merchants played a leading role in the establishment of new banking and insurance institutions, which not only helped finance large trading companies but also made capital available to entrepreneurs who built industrial plants during the early stages of the industrial revolution.65 Furthermore, merchants themselves established new factories, especially in the textile and iron industries.66 While most of these merchants did not come from the foreign trade sector but were inland wholesale merchants who concentrated on domestic trade,67 they were able to extend capital deriving from their commercial enterprises to the factories they established either alone or in partnership. In light of this development, economic historians of eighteenth- and nineteenth-century Britain regard the growth of foreign trade, and the role that the merchants played in the initial stages of the industrial revolution, as major factors in the advent of modern industrialization.68 Certain similarities are apparent in the mode of operation of the merchants in Britain from the late seventeenth to the mid-nineteenth centuries and that of the Muslim tujjār in the Middle East during the latter nineteenth to the early twentieth centuries. In both cases it was the merchants, not the governments or the political elites, who capitalized on the economic potential created by technological innovations. No less importantly, they invested the capital they had accumulated in developing economic sectors that made the expansion of domestic and foreign trade possible, namely banking, insurance and transportation in Britain, and commercial agriculture and transportation in the Middle East. Moreover, both in Britain and the Middle East merchants invested in new industries. While in Britain their pioneering role in the process of economic modernization was incomparably greater than in the Middle East, the phenomenon of Muslim big merchants who became entrepreneurs in the industrial sector was significant.69

65 Stanley Chapman, The Rise of Merchant Banking, London: George Allen and Unwin, 1984, pp. 5–15; Jacob M. Price, “What Did Merchants Do? Reflections on British Overseas Trade, 1660–1790,” Journal of Economic History, 49 (1989), p. 272 (hereafter: Price, “Merchants”). 66 Francois Crouzet, The First Industrialists: The Problem of Origins, Cambridge: Cambridge University Press, 1985, pp. 104–7, 116, 147 table 2, 149 table 4 (hereafter: Crouzet, First Industrialists). Cf. T.M. Devine, The Tobacco Lords: A Study of the Tobacco Merchants of Glasgow and their Trading Activities, c. 1740–90, Edinburgh: J. Donald, 1975, pp. 37, 40–41; Katrina Honeyman, Origins of Enterprise: Business Leadership in the Industrial Revolution, Manchester: Manchester University Press, 1982, pp. 60–61. 67 Crouzet, First Industrialists, pp. 104–7, 116, 147, 149. 68 Price, “Merchants,” pp. 278–84. See also Phyllis Deane, The First Industrial Revolution, 2nd ed., Cambridge: Cambridge University Press, 1979, pp. 69–71. 69 Charles Issawi, “The Entrepreneurial Class,” in Sydney N. Fisher (ed.), Social Forces in the Middle East, Ithaca: Cornell University Press, 1955, pp. 122, 131; Mohammad Salman Hasan, “The Role of Foreign Trade in the Economic Development of Iraq, 1864–1964: A Study in the Growth of a Dependent Economy,” in M.A. Cook (ed.), Studies in the Economic History of the Middle East,

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Why, then, didn’t the entrepreneurship of the Muslim tujjār ultimately bring about structural changes that would lead to the emergence of an advanced industrial sector in those regions where they were prominent? Two main reasons are apparent. First, the primacy of the foreign and non-Muslim big merchants in various major commercial centers in the Middle East limited the scope of activity of the Muslim tujjār there and precluded control by them over an important share of the foreign trade sector and its profits. Put another way, the scope of the economic ventures of the tujjār was limited in places that were most ripe for the development of industry. Secondly, the time span available to the Muslim tujjār to exercise economic initiative in the “eastern crescent,” where they were dominant, was too brief to bring about structural change. The closing of this window of opportunity to local private enterprise was engendered by the emergence of the state as a major player in the economic system from the 1920s onward. So long as the state was not deeply involved in economic activity, and especially as it did not interfere bureaucratically in trade or increase fiscal demands, the tujjār could retain most of the profits from their transactions. Even more important, so long as the state itself did not become a major economic entrepreneur, the tujjār had sufficient maneuverability to operate and prosper. However, these conditions, which prevailed for about sixty years, came to an end after the First World War, first in Turkey and Iran and later in most of the Arab states. In Turkey70 and Iran,71 statist policies (étatism) that involved governmental intervention in various economic sectors were introduced in the 1930s. In the mandatory states of the Fertile Crescent, the economic policies of the European powers – Britain and France – favored the interests of the landed classes on the one hand and foreign firms on the other.72 In Kuwait and Saudi Arabia, once largescale oil production began and considerable income flowed in to the local rulers, the tujjār, as a power group, lost the great influence they had had on economic development in the peninsula.73 The involvement of the state in economic affairs in the Middle East after the First World War stemmed from several factors, most importantly the impetus to

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London: Oxford University Press, 1970, pp. 364–65 (hereafter: Hasan, “Role of Foreign Trade”); Batatu, Old Social Classes, pp. 276–81, 316 table 9–13; Johnson, Class, pp. 63, 68. Z.Y. Hershlag, Turkey: The Challenge of Growth, Leiden: E.J. Brill, 1968, pp. 61–127; Korkut Boratav, “Kemalist Economic Policies and Étatism,” in Ali Kazancıgil and Ergun Özbudun (eds.), Atatürk: Founder of a Modern State, Hamden, Conn.: Archon Books, 1981, pp. 165–90; Faruk Birtek, “The Rise and Fall of Etatism in Turkey, 1932–1950,” Review, 8 (1985), pp. 407–22; Keyder, State, pp. 101–2. Homa Katouzian, The Political Economy of Modern Iran, New York: New York University Press, 1981, pp. 107–17; Massoud Karshenas, Oil, State and Industrialization in Iran, Cambridge: Cambridge University Press, 1990, pp. 69–80. Sa‘id B. Himadeh, “Industry,” in idem (ed.), Economic Organization of Palestine, Beirut: The American Press, 1938, p. 297; Hasan, “Role of Foreign Trade,” pp. 354–55. Al-Nuaim, “State Building,” p. 332; Crystal, Oil, pp. 6–10.

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accelerate modernization processes. The result, in the present context, was that the initiative of the private sector, which was based on high profits deriving from foreign and domestic trade, lost its momentum. Thus, at first, competition by foreign and non-Muslim merchants, and later, intervention by the state restricted the scope of Muslim private entrepreneurship.

Conclusion The most significant aspect of the rise of Muslim tujjār in the Middle East in the late nineteenth and early twentieth centuries was that this development occurred neither as a result of protection granted by foreign states nor of special prerogatives conferred by central governments. Rather, the Muslim tujjār, who sprang from the majority community in the population, managed to accumulate capital as a result of their own successful operations in large-scale trade, and used it to develop other economic enterprises. In light of this, three generalizations should be reconsidered. The first holds that Middle Eastern society was devoid of entrepreneurship and local entrepreneurs,74 and that this lack accounts for the structural rigidity of Middle Eastern economies in the nineteenth century. The ample evidence presented above of the activity of Muslim tujjār in a wide range of economic sectors seems to invalidate this generalization. The second generalization relates to the type of activity of the local big merchants (both Muslim and non-Muslim) and holds that in the Middle East, as in other areas of the colonial world of the nineteenth and early twentieth centuries, local merchants functioned primarily as compradores, namely, they operated in the service of foreign commercial companies and devoted themselves to advancing the interests of these firms, often at the expense of local or national interests.75

74 Ḥalīl Shā’ul, “Asbāb taʾakhkhur al-ṣināʿa fī Sūriyya,” al-Muqtaṭaf, 9 (November 1884), pp. 85–88; A.J. Meyer, “Entrepreneurship: The Missing Link in the Arab States?” Middle East Economic Papers, 1 (1954), pp. 121–43; idem, Middle Eastern Capitalism, Cambridge, Mass.: Harvard University Press, 1959, pp. 32–46. The second article (1959) is an expanded and corrected version of the first (1954). 75 On the use of this label to characterize communities of Muslim and non-Muslim merchants in various parts of the Middle East in the late nineteenth and/or early twentieth century, see Bernard Lewis, The Emergence of Modern Turkey, London: Oxford University Press, [1961] 1965, pp. 448, 450; Ahmad, “Vanguard,” pp. 329–31; Davis, Colonialism, pp. 78 table 3–6, 120; Pamela Ann Smith, Palestine and the Palestinians, 1876–1983, London: Croom Helm, 1984, p. 25; Robert L. Tignor, State, Private Enterprise, and Economic Change in Egypt, 1918–1952, Princeton: Princeton University Press, 1984, p. 137; Al-Nuaim, “State Building,” p. 332; Reilly, “Damascus Merchants,” p. 21; Foran, Resistance, p. 178. Some writers have pointed out that applying this term to all the mercantile communities in the Middle East is erroneous. See Reşat Kasaba, “Was There a Compradore Bourgeoisie in Mid-Nineteenth Century Western Anatolia?” Review, 11 (1988), pp. 215–28; Robert Vitalis, “On the Theory and Practice of Compradors: The Role of ʿAbbud Pasha in the Egyptian Political Economy,” International Journal of Middle East Studies, 22 (1990), p. 309 n. 3; Haris Exertzoglou, “The Development of a Greek Ottoman Bourgeoisie: Investment Patterns in the Ottoman Empire, 1850–1914,” in Dimitri Gondicas and Charles Issawi (eds.), Ottoman

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While it is true that in the large port cities, and to a lesser extent in other commercial centers, some local merchant represented foreign trading houses, this was not the case for the majority of the Muslim tujjār, while not all Christian or Jewish big merchants were primarily agents or middlemen for foreign trading houses. Further, most Muslim tujjār viewed the foreign merchants as their rivals and tried to restrict their spheres of activity. Not surprisingly, Muslim tujjār supported the national movements (Egyptian, Iranian, Turkish and Arab) financially and otherwise in their struggle against foreign control and for independence.76 The third generalization that requires amendment relates to a broader issue: the accepted perception of the structure and characteristics of the urban elite in the Fertile Crescent during the era of reform and westernization, namely from the end of the eighteenth century to the start of the twentieth. Albert Hourani discerned within what became known as the “notables’ paradigm” three groups which together constituted the urban notables (aʿyān) in the Ottoman Arab provinces: the ʿulamāʾ, the leaders of the local garrisons, and the secular notables. By exploiting changes in the balance of power within the provincial administration and in regulations concerning ownership rights of agricultural land, the secular notables managed to register large areas of land in their names and hence became big landowners. According to Hourani, the aʿyān served as local intermediaries between the central government in Istanbul, including its provincial representatives, and the population at large.77 The sources of power and legitimacy of the local elite lay in the senior positions they held in the administrative/military system of the Ottoman state or in the acquisition of high standing in the Islamic world of learning. These sources were augmented by socioeconomic power stemming from de facto land ownership. The economic sources of power of the Muslim urban elite other than agrarian ownership, Hourani implies, were marginal. He mentions commercial interests, especially those of ʿulamāʾ families, only in passing. Greeks in the Age of Nationalism: Politics, Economy and Society in the Nineteenth Century, Princeton: Darwin Press, 1999, pp. 98–99. 76 On the role and contribution of Muslim big merchants to the emerging national movements in the Middle East, see, e.g., al-Durūbī, al-Baghdādiyyūn, pp. 83, 104–5; Kamal S. Salibi, “Beirut under the Young Turks: As Depicted in the Political Memoirs of Salīm ʿAlī Salām (1868–1938),” in Jacques Bergue and Dominique Chevallier (eds.), Les Arabes par leurs archives (xvie -xxe siècles), Paris: Éditions du CNRS, 1976, pp. 204–15; Batatu, Old Social Classes, pp. 293–97ff; Ashraf, Mawāniʿ-i taʿrīkh, pp. 112–15; Laṭīfa Muḥammad Sālim, al-Quwā al-ijtimāʿiyya fī althawra al-ʿUrābīyya, Cairo: al-Hayʾa al-Miṣriyya al-ʿāmma lil-kitāb, 1981, pp. 344–51; Johnson, Class, pp. 63–64; Al-Nuaim, “State Building,” pp. 262–78; Keyder, State, p. 65; Martin, Islam, pp. 89–112; Gelvin, Loyalties, pp. 108, 116–17. 77 Hourani, “Ottoman Reform,” pp. 48–49, 60–64. See also idem, History, pp. 295–97, where the author reemphasizes that the urban notables consisted of large landowners and non-Muslim big merchants. For critics of the “notables paradigm,” see Philip S. Khoury, “The Urban Notables Paradigm Revisited,” Revue du Monde Musulman et de la Méditerranée, 55–56 (1990–2), pp. 215–22; Ruth Roded, “The Syrian Urban Notables: Elite, Estates, Class?” Asian and African Studies, 20 (1986), p. 380.

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This analysis of the composition of the local urban elite, however, ignores the component of newly incorporated Muslim families whose source of power was large-scale commerce and economic enterprise, and whose rise did not result from holding high-ranking administrative/military positions. According to the “notable paradigm,” the heads of such merchant families as Bayhum and Salām in Beirut, Khuḍayrī and Shāhbandar in Baghdad, and Nābulsī and Shakʿa in Nāblus would not be included in the local urban elite of the late nineteenth and early twentieth centuries. Yet, from the end of the nineteenth century, the venerable aʿyān families themselves clearly regarded the Muslim tujjār as part of the local elite. This was manifested in an extensive array of social ties, including matrimonial, and in the participation of the tujjār in formal and informal political institutions where the affairs of the community were decided. Furthermore, Ottoman authorities involved the tujjār in their dealings with the local elite. The fact that Muslim tujjār families were accepted as members of the aʿyān from the end of the nineteenth century had its imprint on the position of the notables regarding social and political issues, such as the demand for representative government and their support of pan-Arabism. What then was the significance of the ascent of the Muslim big merchants within the time span of two to three generations? First, they made an important contribution in the latter nineteenth century to the economic growth of several sectors in the Middle East. This applies particularly to the impact of their investments on the growth of the export sector in Iran, the eastern regions of the Arabian Peninsula, northern Sudan and the Fertile Crescent. Not only did these investments generate an increase in the scope and volume of exports, but they set off chain reactions leading to investment in other fields, such as crafts and services. Additionally, the expansion of commercial agriculture led to a rise in the level of income of social groups besides the big merchants: bazaaris, peasants and tribesmen in several regions. As in other cases of rapid economic change, however, these developments also exacted a heavy social and economic toll, for example when peasants sank into deep debts and lost their rights over the land they toiled, or when artisans could not compete with the low prices of imported goods, especially textiles, and lost their source of income. Secondly, the rise of the tujjār also had a “qualitative” implication, especially in the context of the history of economic enterprise in the Middle East. Despite nonencouraging political conditions, and with no institutional domestic or foreign support, the Muslim tujjār succeeded in attaining economic power and effecting economic and social change in wide areas. Some displayed distinct entrepreneurial talents. They invested their money in new fields, incurring great financial risks. Indeed, some of their investments failed, notably in modern industries, and they suffered heavy losses. Yet, the tujjār showed great amenability to technological innovation in agriculture, manufacture and services, and many of them supported social reform, primarily in education. The ability of the tujjār to accumulate and administer assets of various kinds on a large scale attests to management ability and skills. They also evinced knowledge 29

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and an awareness of current political and economic developments in various parts of the world. Rising rapidly, they had to be wary of evoking hostility on the part of rulers and other elite groups – ʿulamāʾ, high-ranking officials and army officers. They often walked a thin line between the acceptable and the intolerable according to the norms of their society. Ultimately, the endeavors of the Muslim big merchants over a period of some sixty years were insufficient to bring about a major structural change in the Middle Eastern economies. Still, the performance of the tujjār shows that the potential for change in the realm of private enterprise existed, and that the realization of this potential depended, to a great extent, on the attitude and policies of the state vis-à-vis private enterprise.

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2 MUSLIM TUJJĀR OF THE MIDDLE EAST AND THEIR COMMERCIAL NETWORKS IN THE LONG NINETEENTH C E N T U RY

I The historiography of the networks of merchants and entrepreneurs in the Middle East in the nineteenth century barely deals with Muslim merchants. The impression gained from the research literature in this field is that Muslim merchant networks asserted an entirely marginal influence. It would appear that the important development of the emergence and prosperity of networks was the province of Ottoman Greek, Jewish, Armenian and Arab-Christian merchant families alone. Put another way, in the context of nineteenth-century Middle Eastern society, networks of local merchants and entrepreneurs were considered a distinctive phenomenon of the religious minority communities.1 Such a presentation of the economic history of the Middle East has received support and grounding on the theoretical level, especially regarding theories of the link between the particular condition of minorities and the undertaking of * Sections of this study were presented at the International Conference “Competing Networks: Greek and Other Commercial Houses in the Mediterranean during the Long Nineteenth Century,” University of Haifa, June 2006, and at the XIV International Economic History Congress, University of Helsinki, August 2006. 1 Greek and Jewish (Baghdadi) trading networks have been the subject of extensive research in recent years. See, e.g., Ina Baghdiantz McCabe, Gelina Harlaftis & Ioanna Pepelasis Minoglou (eds.), Diaspora Entrepreneurial Networks: Four Centuries of History, Oxford: Berg, 2005, pp. 147–171, 173–189, 269–285, 371 382; Maria Christina Chatziioannou and Gelina Harlaftis (eds.), Following the Nereids: Sea Routes and Maritime Business, 16th-20th Centuries, Athens: Kerkyra Publications, 2006, pp. 87–135 (hereafter: Chatziioannou & Harlaftis, Nereids); J. C. Roland, “Baghdadi Jews in India and China in the Nineteenth Century: A Comparison of Economic Roles,” in Jonathan Goldstein (ed.), The Jews of China: Historical and Comparative Perspectives, vol. 1, Armonk, NY: M.E. Sharpe, 1999, pp. 141–153; Chiara Betta, “The Baghdadi Jewish Diaspora in Shanghai: Community, Commerce and Identities,” Sino-Judaica, vol. 4 (2003), pp. 81–104.

DOI: 10.4324/9781003177425-3

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economic ventures,2 and between the formation of diasporas and the building of networks of merchants and entrepreneurs.3 In short, the appearance of networks of merchants and entrepreneurs has been ascribed to the special position and condition of minorities, and is explained by the social, economic, cultural and political characteristics of these societies. This applies particularly to minorities that endured discrimination and repression.4 While my research on the Muslim tujjār of the Middle East in the long nineteenth century is not yet in its final stages, what has already become clear is that the approach that removes these merchants from the context of international trading networks is mistaken. Evidence from primary sources in public and private archives, as well as accounts, sometimes detailed, in the secondary literature, attest to the activity of networks of Muslim big merchants and entrepreneurs who operated both within and outside the region. Of the many cases mentioned in the sources, I shall present a few that substantiate the point I am making: (1) Ḥājj Muḥammad Ḥasan Iṣfahānī Amīn al-Ḍarb, who was considered the leading merchant-entrepreneur in Iran in the late nineteenth century, already established branches and agencies of the firms that he owned in the early stages of his business activity in the 1870s. Operating from his head office in Tehran, with the help of family members and relatives, he opened branches in important trading centers in Iran itself (Yazd, Mashhad, Iṣfahān, Tabrīz and others), as well as in cities that served as main markets for goods that he imported/exported: Cairo, Beirut, Damascus, Aleppo, Istanbul, Trebizon, Astrakhan, Moscow, Nizhnii Novgorod, Odessa, Warsaw, Marseilles, Paris, London, Manchester and others. In addition to the branches under his control, he had representatives in the major centers of international commerce, including Brussels and Hong Kong. Amīn al-Ḍarb’s archive in Tehran contains his correspondence with the heads of his branches, his agents and his representatives in various locations. Some of the letters and cables have been published, and constitute an important source for understanding the method of operation of this outstanding entrepreneur.5 2 Everett Hagen, On the Theory of Social Change: How Economic Growth Begins, Homewood IL: Dorsey Press, 1962. Hagen argues that people who grew up in certain minorities developed a much stronger psychological propensity for entrepreneurship than those who did not. This approach has been questioned by several historians, including Alexander Gerschenkron. 3 Janet Tai Landa, Trust, Ethnicity and Identity, Ann Arbor: University of Michigan Press, 1994, pp. 101–113. 4 Anthony Reid, “Entrepreneurial Minorities, Nationalism, and the State,” in Daniel Chirot and Anthony Reid (eds.), Essential Outsiders: Chinese and Jews in the Modern Transformation of Southeast Asia and Central Europe, Seattle: University of Washington Press, 1997, pp. 33–48. 5 For his business correspondence, see Aṣghar Mahdawī and Īrāj Afshār, Asnād-i tijārat-i Īrān dar sāl 1287 qamrī, Tehran: ʿIlmī wa-Farhangī, 1380/2001, pp. 10ff.; for additional details about Amīn al-Ḍarb’s network, see id., Yazd dar asnād Amīn al-Ḍarb, Tehran: Farhang-i Irān Zamīn, 1380/2001,

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(2) The Nābulsīs were among the most illustrious aʿyān families in the city of Nablus from the eighteenth century onward. For generations, members of the family had engaged in the manufacture and export of soap made from olive oil. In the mid-nineteenth century, the family, led by ʿAbd al-Raḥmān al-Nābulsī, took advantage of the opportunity that presented itself to local entrepreneurs and expanded the areas and range of its concerns. Relying on family members, branches were opened or enlarged in Jaffa, Karak, Damascus and Cairo. Commercial representatives were stationed in Istanbul, Jiddah, Baghdad and elsewhere. This network was a central factor in the expansion of the export of soap produced at the family’s workshops in Nablus. The family archive in Nablus, and the sijill of the maḥkama of this town, contain a wealth of evidence showing the extensive activity of the Nābulsī network.6 (3) Muḥammad Aḥmad al-Suyūfī, born into a venerable merchant family in Egypt, established the Suyūfī company, with offices inaugurated in Cairo in 1860. From there his company set up agencies and branches throughout Egypt. He also opened a branch in Manchester, and maintained agencies and representatives in India and the Red Sea ports. As merchants who specialized in “Sudanese goods” (along with the export of cotton and the import of textiles), Wright and Cartwright noted, “in their own department they enjoy practically a monopoly of the Red Sea Trade.”7 (4) Muslim pearl merchants in the Persian Gulf region established branches in Bombay and other commercial centers in India in the course of the nineteenth century. These branches were meant to promote the sale of pearls in markets where demand for them was especially high, but soon served other commercial purposes as well. Especially noteworthy in the domain of establishing an effective network was the ʿAlīrizā family, operating from the Ḥijaz. One of

pp. 20, 36, 50ff. See also H. Picot, Biographical Notices of Members of the Royal Family, Notables, Merchants, and Clergy in Persia, Confidential, December 1897, pp. 65–66, FO 881/7028, NAUK (hereafter: Picot, Biographical Notices); Z.Z. Abdullaev, Promyshlennostʾ I zaro zhdenie rabochego klassa Irana v kontse xix-nachale xx vv., Baku: Akademiia Nauk Azerbaidzhanskoi, 1963, p. 158 (hereafter: Abdullaev, Promyshlenost); Shireen Mahdavi, For God, Mammon, and Country, Boulder: Westview Press, 1999, pp. 69–71 (hereafter: Mahdavi, For God). 6 Antonin Joseph Jaussen, Coutumes Palestiniennes, I. Naplouse et son District, Paris: Paul Geuthner, 1927, pp. 134–35; Raouf Saʿd Abujaber, Pioneers over Jordan, London: I.B. Tauris, 1989, pp. 159, 286 n. 51; Iḥsan al-Nimr, Tārīkh Jabal Nablus waʾl-Balqāʾ, vol. 2, Nablus: Maṭbaʿa al-naṣr al-tijāriyya, 1380/1961, p. 294; Ruba Kana’an, Patronage and Style in Mercantile Residential Architecture of Ottoman Bilad al-Sham: The Nablus Region in the Nineteenth Century, MA Thesis, Oxford University, 1993, p. 100 (Appendix 1); Eugene L. Rogan, Frontiers of the State in the Late Ottoman Empire: Transjordan, 1850–1921, Cambridge: Cambridge University Press, 1999, pp. 101–102. 7 Arnold Wright and H.A. Cartwright, Twentieth Century Impressions of Egypt, London: Lloyds Greater Britain Publishing Company, 1909, p. 375; see also Robert Vitalis, When Capitalists Collide: Business Conflict and the End of Empire in Egypt, Berkeley: University of California Press, 1995, pp. 41, 234 n. 8.

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its members, Muḥammad ʿAlī, opened a retail shop selling pearls and other jewelry on the Champs Elysees in Paris.8 (5) The network established by Aḥmad Ibn ʿAbd al-Raḥmān al-Saqqāf is interesting in many respects. This entrepreneur, a member of a Hadhramaut family that migrated to Singapore, established the Singapore Steamship Company in the early 1870s, specializing in ferrying Muslim pilgrims from the large communities of Southeast Asia to the holy cities in the Ḥijaz. Despite fierce competition by Dutch and other steamship companies, the al-Saqqāfs managed to maintain their maritime operations on the Singapore-Ḥijaz route until 1940. Integral to the firm’s activity from the start were branches set up in Jiddah and Mecca, run by family members.9 Obviously, these examples do not cover the many variants of the Muslim merchant networks. Other instances include the networks founded by the great wheat merchants of Damascus in Istanbul and Izmir;10 the networks of Muslim merchants in Salonika, especially the “Egyptian network”;11 the networks of Iraqi, Hijazi and Bahraini merchants in the Red Sea and East Africa regions;12 8 “Haji Zeinal Ali Reza,” in “Arab Personalities,” Enclosure in no. 1, Stonehewer-Bird to Austin Chamberlain, Jeddah, 20 April 1928, L/PS/12/2107, IOR; Michael Field, The Merchants: The Big Business Families of Saudi Arabia and the Gulf States, Woodstock: Overlook Press, 1985, pp. 22–24; Saif Marzooq al-Shamlan, Pearling in the Arabian Gulf: A Kuwaiti Memoir, London: London Center for Arab Studies, 2000, p. 164; Joshua Teitelbaum, The Rise and Fall of the Hashemite Kingdom of Arabia, London: Hurst, 2001, pp. 26–27. On Hilāl al-Muṭayrī, the leading Kuwaiti pearl merchant, and his network, see Ḥamad Muḥammad al-Saʿīdān, al-Mawsuʿa al-Kuwaytiyya al mukhtaṣira, Kuwait: al-Maṭbaʿa al-ʿiṣriyya, 1972, vol. 3, p. 1446. See also “Hilal al-Mutairi” in H.R.P. Dickson, “Note on Kuwait Principality at the end of . . . 1933,” R/15/5/179, IOR. 9 C.B. Buckley, An Anecdotal History of Old Times in Singapore, 2nd. ed., Kuala Lumpur: University of Malaya Press, 1965, pp. 564–565; Edwin Lee, The British as Rulers: Governing Multiracial Singapore, 1867–1914, Singapore: Singapore University Press, 1991, pp. 165–166; Janet Ewald and William G. Clarence Smith, “The Economic Role of the Hadhrami Diaspora in the Red Sea and Gulf of Aden, 1820s to 1930s,” in Ulrike Freitag and William G. Clarence-Smith (eds.), Hadhrami Traders, Scholars and Statesmen in the Indian Ocean, 1750s–1960s, Leiden: Brill, 1997, p. 288. 10 Muhammad Adīb Āl Taqī al-Dīn al-Ḥisnī, Kitāb muntakhabāt al-tawārīkh li-Dimashq, Beirut: Dār al-āfāq al-jadīd, 1979, vol. 2, pp. 864, 883, 885. 11 Eyal Ginio, “A Forgotten Balkan Elite: The Muslim Merchants and the Egyptian Commerce,” in Kemal Ҫiҫek (ed.), The Great Ottoman-Turkish Civilization, vol. 2: Economy and Society, Ankara: Yeni Türkiye, 2000, p. 77; id., “When Coffee Brought about Wealth and Prestige: The Impact of Egyptian Trade on Salonica,” Oriente Moderno, vol. 25 n.s. (2006), pp. 99–100. 12 William Ochsenwald, Religion, Society and the State in Arabia, Columbus: Ohio State University Press, 1984, pp. 109–110; Hala Fattah, The Politics of Regional Trade in Iraq, Arabia and the Gulf, 1745–1900, Albany: SUNY Press, 1997, pp. 77–83; Khalid M. Kanoo, The House of Kanoo: A Century of Arabian Family Business, London: London Centre of Arab Studies, 1997, pp. 2–12, 21–24; for a detailed account on the al-Safar family, an Iranian-Bahraini tujjār family of Bushehr and Manamah, see James Onley, “Transnational Merchants in the Nineteenth-Century Gulf: The Case of the Safar Family,” in Madawi Al-Rasheed (ed.), Transnational Connections and the Arab Gulf, London: Routledge, 2005, pp. 63–71.

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and the networks of Iranian merchants in Transcaspia and Central Asia.13 All these show that Muslim merchants were part of a wide circle of commercial networks in the countries of the Near and Middle East, and that they played an important role in terms of their contribution to the economic development of the region.

II Four conclusions regarding the tujjār networks emerge from the primary and secondary sources: (1) The establishment of international commercial networks was more prevalent in Muslim big merchant families hailing from the eastern and southern parts of the Middle East than from its western and northern parts. This stems from the greater presence and influence of the Muslim tujjār in Iran, Arabia and the Persian Gulf than in Anatolia and the Nile Valley. Notably, in this context, the Iranian big merchants, more than any other community of Muslim tujjār, founded colonies in the main trading centers of the Middle East and the Indian Ocean: Istanbul, Trebizon, Cairo, Baghdad, Basra, Aleppo, Bombay, Calcutta and others. (2) The Muslim tujjār networks consisted mostly of a few cells or otherwise sparse networks, i.e., a center with two or three branches. Only rarely did these networks have more than five units. (3) The Muslim tujjār families rarely seemed to have set up partnerships with each other in the process of establishing or expanding international networks. The practice of strengthening and expanding networks through marriage ties was quite rare among tujjār families, which is one of the possible reasons for the sparsity of the networks. (4) Although within the framework of their networks the Muslim tujjār established several branches and agencies in the commercial centers of Europe, including Manchester, London, Paris, Marseilles, Moscow and Odessa, this type of network was somewhat of an exception. More commonly, Muslim networks spread out into the Middle Eastern countries, the Red Sea basin, several commercial centers in India, and Central and East Asia. Clearly, the Muslim networks concentrated in cities with a Muslim majority or a large local Muslim community. Presumably, the Muslim tujjār would have worked toward establishing branches in the commercial centers of Europe, as trade between the Middle East and Europe carried a greater potential for profits at higher rates. As noted, most of the foreign

13 The Head of the Civil Administration in the Caucasus, 4 August 1901, N. 159, 821/8/845, RGIA.

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trade of Middle Eastern countries in the nineteenth century was conducted with European economies – England, France, Russia, Austro-Hungary and others.14 Trade with the economies of East Asia was important, but was not of the order of magnitude of trade with Europe. However, while the Muslim big merchants conducted far-flung transactions with both suppliers and consumers of the European markets, they did so indirectly, through European trading houses or by way of the networks of non-Muslim merchants. They thus forfeited the lion’s share of the profits that accrued from the transactions in which they themselves played an important role. The following two cases illustrate the tujjār’s reluctance to set up branches of their networks in Europe: (1) ʿAbdallah al-Kaḥḥāl (1840–1914) was one of the big merchants in Egypt during the last decades of the nineteenth century. The commercial network he established embraced trading centers in Sudan, Hijaz, Tripolitania and Syria. He made huge profits in trade with the Sudan. Yet, like other Muslim big merchants, he too did not expand his activity to the commercial centers in Europe.15 al-Kaḥḥāl belonged to the community of “Syrian” merchants in Egypt, that is, those who were born in Syrian territory, more precisely in Shām, and migrated to Egypt during the nineteenth century or before. This group was highly active in the commercial life of Egypt. In terms of religious origin, the Syrian merchants were divided into two main groups – Muslims and Christians. An analysis of the venues of their activity is instructive for our discussion: the Muslims created networks in the markets of the Nile Valley, the Red Sea basin, the Levant and North Africa, whereas the Syrian Christian merchants focused on the markets of Europe, especially in the second half of the nineteenth century, establishing branches in London, Manchester, Paris and Marseilles. Their networks also covered Sudan and the Red Sea basin, but in many cases, they were not the main arenas of their activity.16 (2) The role played by the Iranian big merchants, particularly the Tabrizis, in the development of the carpet weaving industry into one of Iran’s major export branches in the last third of the nineteenth century has been discussed in several sources.17 One of the most reliable is by Cecil A. Edwards, a noted expert on Persian carpets who lived in Iran for many years during the early

14 Charles Issawi, An Economic History of the Middle East and North Africa, New York: Columbia University Press, 1982, pp. 37–38; Şevket Pamuk, The Ottoman Empire and European Capitalism, 1820–1913, Cambridge: Cambridge University Press, 1987, pp. 31–32, tables 2.3 & 2.4. 15 Thomas Philipp, The Syrians in Egypt, 1725–1975, Stuttgart: Franz Steiner, 1985, pp. 120–121. 16 Ibid. 17 See, e.g., Leonard M. Helfgott, Ties that Bind: A Social History of the Iranian Carpet, Washington: Smithsonian Institute, 1994, pp. 198–200.

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twentieth century. Edwards aptly describes the process whereby the tujjār of Tabriz became important entrepreneurs and exporters in this economic field: It was not until the middle of the nineteenth century, however, that Persian carpets began to find their way into the West in appreciable quantities. The trade was in the hands of Tabrizi merchants – men of credit and renown. They had branch offices in Istanbul, where their principal business was to buy the manufactures of the West and ship them home via Trebizond. They had their agents, too, in the important towns of Persia, who collected carpets from the houses and in the bazaars. Most of these pieces had been long in service. . . . These pieces invariably realized a higher price after ten to forty years of service than their owners had paid for them in the first instance. . . . Thus, there issued from the houses, into every bazaar in Persia, a constant stream of antique or semi-antique pieces. The agents of the Tabrizi merchants collected as many of these old carpets as they could find in the houses and bazaars of the more important towns, and sent them by caravan to Tabriz. There they were sorted, baled and dispatched . . . to Constantinople – which became the world’s market for carpets. Buyers from Britain, from the United States and from France . . . visited the Turkish capital in increasing numbers [and] the demand continued to grow; but as it grew, the supply of old carpets steadily diminished. What was to be done? The enterprising merchants of Tabriz were faced with the danger of the extinction of their profitable trade. They resolved to meet the crisis by producing new carpets, to be specially woven for export, in sizes and colours which they believed would appeal to Western taste. Thus, about the year 1880, the weaving industry of Persia – which since the Afghan invasion had dwindled into an insignificant village craft – received from the merchants of Tabriz a stimulus which has placed it today [ca.1950] in the forefront of Persia’s commercial activities.18 Edwards’ statement that the carpets manufactured by Tabrizi tujjār were transported to Istanbul is corroborated by other sources.19 In the latter half of the nineteenth century, the Ottoman capital became the leading international market of Oriental carpets and rugs, and the community of Iranians in Istanbul grew in the 1860s and 1870s accordingly. Estimates by nineteenth-century observers suggest that some 16,000 Iranians lived there in the 1880s.20 This community developed

18 Cecil Edwards, The Persian Carpet: A Survey of the Carpet-Weaving Industry of Persia, London: Gerald Duckworth, [1953] 1967, p. 56 (hereafter: Edwards, Carpet). 19 Muhammad ʿAlī Jamālzāda, Ganj-i shāygān, Berlin: Kāwah, 1335/1917, p. 21. 20 Khān Malik Sāsānī, Yādbudha-yi safārat-i Istānbul, Tehran: Bābak, 1345/1966, p. 94.

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its own social, welfare and cultural institutions: newspapers, schools, a hospital, cemetery and so on. Clearly, big merchants formed a very important segment of the community, and in fact constituted the leadership of the Iranian colony on the Bosphorus.21 Among the Iranian big merchants, those in the carpet trade were by far the wealthiest and the most influential. According to a survey of occupations in the capital carried out in 1913 by the Istanbul municipality, all Iranian wholesale merchants were involved in the carpet trade.22 Many of these merchants had their offices and warehouses in the Vâlide Hani caravanserai.23 By the last decades of the nineteenth century, Vâlide Hani had become the center of Iranian business in the Ottoman capital. Cairo, too, had a colony of Iranian merchants, and the carpet merchants, known for their assiduousness, played a prominent role in this trading junction as well.24 In Anatolia, likewise, local Muslim merchants showed marked enterprise in the carpet manufacturing field. Uṣak (western Anatolia) was an important carpet production site. The huge demand for carpets in Europe and North America brought about unprecedented prosperity in the carpet manufacture branch in the city and its surroundings. Local Muslim entrepreneurs played a major role in this development. They invested in the establishment of spinning mills for wool, the basic raw material in carpet weaving in the region.25 One of the foremost local entrepreneurs in this field was Tiritoǧlu Mehmet, who also engaged in other commercial sectors (e.g., wheat exports) in partnership with foreign merchants.26 Despite their entrepreneurship and their evident dominance in the carpet manufacturing branch in Iran and in Anatolia, Muslim big merchants, whether individually or as a group, did not develop networks to sell these products in the European markets, where the demand for them was particularly high. Rather, foreign trading houses – British, French, Italian, Greek, German and American – opened agencies in Istanbul and Izmir, and through them conducted the large-scale marketing of carpets.27 Thus, the huge profits from one of the major export branches of Iran 21 Ibid., pp. 94–95, 103, 105–107. 22 1330 senesi Īstanbul Belediyesi Ihsiâiyât mecmuası, Īstanbul, 1331/1914. 23 Raphael C. Cervati, Indicateur ottoman illustré. Annuaire-almanach du commerce, de l’industrie, de l’administration et de la magistrature, Année 4, 1883/1300, Istanbul: Cervati Frères & D. Fatzea, 1883, p. 466; id., Annuaire oriental du commerce, de l’industrie, de l’administration et de la magistrature, Année 9, 1889–90/1306, Istanbul: Cervati Frères, 1890, pp. 483–484; id., Annuaire oriental, Année 14, 1896/1313–14, Istanbul: Cervati Frères, 1896, pp. 714–715. 24 Mohammad Yadegari, “The Iranian Settlement in Egypt as seen through the Pages of the Community Paper – Chihrinima (1904–1966),” in Elie Kedourie and Sylvia G. Haim (eds.), Modern Egypt: Studies in Politics and Society, London: Frank Cass, 1980, pp. 98–114; Anja W.M. Luesink, “The Iranian Community in Cairo at the Turn of the Century,” in Th. Zarcone and F. Zarinebaf (eds.), Les Iraniens d’Istanbul, Paris: IFRI and IFÉA, 1993, pp. 193–200. 25 Donald Quataert, Ottoman Manufacturing in the Age of the Industrial Revolution, Cambridge: Cambridge University Press, 1993, p. 150 (hereafter: Quataert, Ottoman Manufacturing). 26 Dahiliye Nezareti Mektubî Kalemi, 1586/22, 19 Jumada I 1306/31 January 1888, BOA. 27 Quataert, Ottoman Manufacturing, p. 151.

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and Anatolia went to trading houses owned by foreign entrepreneurs. The intense competition for the spoils was carried on between the foreign networks themselves. Muslim big merchants were hardly in evidence.

III A study of the experience of Muslim big merchants who did sojourn over time in European cities in preceding centuries may help explain the conduct of the Muslim tujjār with regard to those venues in the nineteenth century. Historiographic research so far has reconstructed only a few cases of active, busy colonies of Muslim merchants in Christian Europe in the course of three centuries (sixteenth-eighteenth), most notably in Ancona, Trieste, Venice, Split and Candia (till 1669).28 Of these, the history of the Fondaco dei Turchi in Venice is of particular interest in the context of this study. Ottoman Muslim merchants were active in Venice from the first decades of the sixteenth century until the second half of the eighteenth century. The colony of these merchants flourished for a considerable number of years during this period: the number of Muslim merchants increased, the volume of their business expanded, and their profits rose.29 Documents in Venetian archives provide a key to understanding the special nature of this phenomenon, and, indirectly, why this development was not replicated in the other great commercial centers of Europe. Hence, several aspects in the history of the “Turkish funduq” in Venice merit our attention. The funduq was an edifice that served as a business center, office site and storage facility for a group of foreign merchants, usually of the same ethno-linguistic origin. Groups of merchants concentrated in one precinct enjoyed significant advantages. They could share such fixed costs as guarding, ongoing care and maintenance of goods, tending animals, and joint purchases of food. Furthermore, they acquired a sense of security and protection from hostile elements. Such an arrangement also ensured that potential customers would be drawn to a place identified not only with certain merchants but also with particular commodities. In addition, such proximity lowered the cost of transactions among the merchants of the funduq themselves. The establishment of the funduq required the assent of the Venetian authorities, who were also aware of the advantages of a concentration of foreign traders in one area, namely easier supervision of them and their dealings, and easier protection of their property in the event of harassment on the part of the local population.

28 For Ancona, see Cemal Kafadar, “A Death in Venice (1575): Anatolian Muslim Merchants Trading in the Serenissima,” Journal of Turkish Studies, vol. 10 (1986), pp. 195–198 (hereafter: Kafadar, “Death”); on Muslim merchants in Candia, see Mooly Greene, Christians and Muslims in the Early Modern Mediterranean, Princeton: Princeton University Press, 2000, pp. 146–147. 29 Paolo Preto, Venezia e i turchi, Florence: G.C. Sansoni, 1975, pp. 128–139 (hereafter: Preto, Venezia); G. Verecellin, “Mercanti Turchi a Venezia alia fine del Cinquecento,” Il Veltor: Rivista della Civilta Italiana, vol. 23, nos. 2–4 (1979), pp. 243–275; Kafadar, “Death,” pp. 198–204.

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In August 1573, the Ottoman merchants in Venice requested the authorities to grant them a place where they could transact their business. Six years later, the Osteria del Angelo was earmarked as the funduq of the Ottoman merchants (“the Turks”). Over the next two hundred years or so, this merchants’ colony knew both good times and bad. Most important for our concern is the picture that emerges from the Venetian sources of opposition and deep enmity by various groups in local society to the presence and activity of Muslim merchants generally, and to the presence of their funduq in particular. The arguments raised against “the Turks” were religious, ethical, economic and political. These complaints, against both Muslims and Jews, recurred in different versions elsewhere in Europe. In Venice of the late sixteenth and early seventeenth centuries the Turks were accused of being corrupt; “robbed the public, turned youth to evil ways and abused Christian women” (rubbar, il condur via garzoni, usar con donne christiane);30 their funduq would become “a den of vice and a cesspit of filth” (redotto de viziosi et sentina de sporchezzi);31 and they intended to erect a mosque and to pray there to their prophet Muhammad, which, of course, would be an intolerable scandal. Economically, the goods they brought from Istanbul were considered of little value, while politically, their presence in the city endangered Venice, in light of the territorial aspirations of the Ottoman sultans. Sometimes, the annoyance, harm and harassment of the Ottoman merchants by the Venetian populace reached such levels that the authorities stepped in forcefully in their defense. For example, in August 1594 a declaration was published by the republic’s legal authorities stating that whoever harmed the Turkish merchants was liable to heavy penalties: exile, imprisonment and even death by hanging. In January 1612 another law was passed allowing the imposition of weighty punishment on anyone who harmed the foreign merchants operating in Venice in any manner.32 It is not clear how effective these measures were in ending incitement and injury to the Muslim merchants. Still, there is no doubt that for many years the Venetian authorities had a clear interest in ensuring the personal safety, property and ongoing activity of these merchants. This was in the interest of a power whose might lay in the existence of an international commercial system. This required conditions of personal safety and security of property for all who were part of it. Clearly, this was the perception of the fathers of the Venetian state, and they adhered to it consistently, with only a few exceptions related to the military campaigns in which the republic was involved. Venice was exceptional in the European political system in the protection it afforded the Muslim merchants who resided there. In no other state in Europe in the sixteenth, seventeenth and eighteenth centuries did rulers and governments adopt a policy of protecting non-Christian, let alone Muslim, merchant 30 Preto, Venezia, p. 130. 31 Ibid., pp. 132, 134. 32 Ibid., pp. 132, 134.

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communities. The attitude in the various European states ranged from an explicit ban against the presence of Muslims to passive acceptance of their presence while displaying indifference to injury against them by the local population. To put it mildly, the states of Europe until well into the nineteenth century did not offer fertile ground for Muslim enterprise to flourish.

IV Several causes can be suggested for the absence of colonies of Muslim merchants in the commercial centers of the European states in the nineteenth century – or why the Muslim big merchants eschewed developing broad commercial networks in those countries. These causes may be divided into two groups: (a) political, social and economic conditions in the European countries; and (b) conditions and circumstances in the home countries of the Muslim big merchants. Regarding conditions in the European markets, three factors stand out: (1) Large groups in Christian Europe looked askance at the presence and economic activity of Muslim nationals. In the nineteenth century, as in earlier times, such a presence aroused varying degrees of rejection, opposition and hostility to Muslim businesses. Muslim merchants encountered this attitude on the part of customers, suppliers and commercial competitors. Such attitudes had deep historical roots, nourished by economic, social and cultural factors. Despite significant developments in the direction of secularization in many European societies during the nineteenth century, the basic attitude toward the presence of Muslim merchants remained almost unchanged among large strata. For many centuries, these attitudes were also held by central governments in Europe. From the twelfth to the eighteenth centuries, most European countries promulgated laws forbidding the lengthy sojourn, permanent settlement or engagement in commerce by non-Christian nationals. It has been suggested that this governmental posture in the European states was a significant factor in the absence of Muslim merchant colonies in Christian lands.33 Thus, when the dramatic economic development of the nineteenth century occurred – the first globalization, as it were – Muslim merchants had no strongholds in the European markets. (2) Many Muslim merchants felt a sense of alienation in their contacts with foreign firms and merchants, and all the more so in extended stays in Christian countries. While some merchants did acquire sufficient mastery of one or two European languages, the cultural divide, including different patterns of conducting commercial transactions and formulating contracts and obligations, created misunderstandings and ultimately serious disputes. In this inauspi-

33 Bernard Lewis, The Muslim Discovery of Europe, London: Weidenfeld and Nicolson, 1982, p. 124.

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cious situation, no machinery was devised in the nineteenth century (and certainly not earlier) that might protect the Muslim merchants or grant them any chance of fair representation in the local courts in cases of commercial disputes with local merchants or customers. Obviously, Muslim merchants in European countries did not enjoy the same facilitating and protective conditions that the Ottomans, the Qajars and the Khedives of Egypt extended contractually (the capitulations/imtiyāzāt) to most European states. (3) In light of the prevailing attitude to foreign Muslim nationals, and the specific condition of the Muslim merchants in the lands of the West, clearly, the position of Muslims in commercial competition with local merchants, or with merchants belonging to one of the minority Christian groups of the Middle East who enjoyed European protection, was inferior. For example, British companies importing carpets from Istanbul and Izmir, through their branches in those cities, to London, Paris and New York had a competitive edge over Muslim merchants who exported carpets manufactured in Anatolia or Iran. Of the various agencies – in any case few – that Muslim firms or merchants, who were subjects of the Ottoman Empire, Iran or Egypt, established in the nineteenth century in the centers of European commerce, not a single Muslim commercial house is known to have flourished or to have succeeded, on the basis of its commercial activity in Europe, in expanding its businesses or attaining international standing in any branch of commerce. In the few cases where Muslim merchants invested their capital in European economies (such as Muḥammad Ḥasan Amīn al-Ḍarb, who invested in Russia and France), they did so with profits made from their enterprises in their countries of origin. Regarding conditions in the home countries of the Muslim merchants, or the circumstances arising from their cultural sphere, three additional factors may be cited: (4) In a competitive system in which central governments in the European countries encouraged, backed and supported merchants and entrepreneurs who were their citizens/subjects, the fact that the rulers of the Middle Eastern countries in the nineteenth century did not view the protection of merchants who were their subjects and who operated outside the boundaries of their countries as a matter worthy of their attention was of major importance. Rarely do we find an Ottoman or Qajari ruler involved in furthering the economic interests of his subjects in Europe, or anywhere else.34 The fiscal foundations 34 For an interesting case in which Fatḥ ʿAlī Shah tried to help an Iranian merchant claiming a huge debt in Awadh, see Bengal Political Consultations, Fort William, 14 October 1806, P/l 17/57, IOR; J.R.I. Cole, Roots of North Indian Shīʿism in Iran and Iraq: Religion and State in Awadh, 1722–1859, Berkeley: University of California Press, 1988, pp. 259–260.

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of the economic policy of local governments in the Middle East viewed no advantage in the activity of individuals abroad, since this yielded no revenues for the central treasury. The message, then, to local entrepreneurs operating abroad was clear: the state was indifferent to their activity and hence no backing or protection was granted them when they needed it. (5) Several ʿulamāʾ, who held great sway among the community of the faithful, discouraged business activity in Christian countries. Abū Muḥammad ʿAlī b. Aḥmad Ibn Ḥazm (994–1064) opposed the prolonged sojourn of Muslim merchants in dār al-ḥarb for the purpose of furthering their affairs.35 These attitudes did not emanate from ʿulamāʾ who a priori were antagonistic in their attitude to the mercantile vocation, but from those who held a positive view of commerce and praised those who dealt in it, on condition that their activity remained within the framework of dār al-Islām. (6) Muslim merchants who wished to expand the boundaries of their business and operate in foreign lands had an enticing and attractive alternative: the economies in which the population was mostly Muslim, or in which large Muslim communities existed. This option allowed Muslim merchants to operate within the social, legal, cultural and sometimes even political frameworks known to them, and which were not a priori alien or hostile. The Muslim big merchants of the Middle East could operate in the Muslim populations of Central Asia, India, China, Indonesia, and East and North Africa. These were economies with considerable total purchasing power; offering raw materials and goods for which there was a demand in the Middle East; and consuming products exported by the economies of the Middle East. Indeed, enterprising Muslim merchants worked vigorously in these parts of the world, and prospered. They found familiar, or partially familiar patterns of conduct in these places, and legal institutions similar to those in their home countries (the maḥkama and sharʿī law). Naturally, there were disputes and quarrels, some harsh and bitter, between foreign and local Muslim merchants, or between them and their clients. However, the relevant aspect for our concern is that foreign Muslim merchants were not subject to discrimination from the outset in the sharʿī or civil courts in Karachi, Bombay, Batavia, Massawa or Zanzibar. True, in these places, too, the authorities and the courts may have tended to accept the version of the local party in the case of disputes, but they were not imbued with an excessive measure of opposition to foreign litigants. The commercial activity of Muslim merchants in the lands around the Indian Ocean had deep historic roots going back to the first Islamic empires.36 Muslim 35 ʿAbd al-Ḥalīm ʿUways, Ibn Ḥazm al-Andalusī wa juhūdahu fī al-baḥth al taʾrīkhī wa al-ḥaḍarī, Cairo: al-Zahrāʾ lʾl-iʿlām al-ʿarabī, 1979, pp. 323–324, 387. 36 Maurice Lombard, L’Islam dans sa première grandeur, Paris: Flammarion, 1971, pp. 221–222; Jean Aubin, “Marchands de la Mer Rouge et du Golfe Persique au tournant des 15e et 16e siècles,” in Denys Lombard and Jean Aubin (eds.), Marchands et hommes d’affaires asiatiques dans

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merchants from the Middle East who wished to intensify their activity in commercial centers in Southeast Asia in the second half of the nineteenth century could rely on the cumulative experience and knowledge of their predecessors, sometimes members of their own families. Not surprisingly, Muslim merchants in the nineteenth century who wanted to operate in the international arena preferred to direct their energies and initiative, and channel their fortunes, toward markets where not only did they feel more at ease, but, more importantly, where their chances of reaping profits were more assured. Their targets, therefore, were the markets to the south and southeast of the Middle East. If on the macroeconomic level commercial activity in the European domain might indeed have greater potential for profit than in the Afro-Asian domain, from the standpoint of the individual Muslim merchant, this greater potential was of little significance so long as the actual likelihood of attaining high profits was, ultimately, low. Lastly, one factor resulted from the limited Muslim commercial presence in the Western markets, and became more marked in the last decades of the nineteenth century: Muslim entrepreneurs and merchants who were not sufficiently exposed to methods of business management that had developed in the Western economies were hard pressed to withstand competition not only from European commercial houses but also from those owned by Greek and Jewish entrepreneurs from the Near and Middle East who had adjusted their business orientation to changing economic circumstances.37 The case of the merchant and entrepreneur ʿAlī Akbar Shīrāzī may shed additional light on this discussion. He was one of the leading tujjār in Iran in the closing decades of the nineteenth century. His commercial network extended from Tehran to shops and warehouses in Isfahan, Shiraz, Kashan and elsewhere. Renowned for his industrial initiative, he also owned carpet weaving workshops near Tabriz. ʿAlī Akbar was one of the few Muslim tujjār who also had offices in England – one in Manchester and another in London. His son managed the family business in England, working together with the Imperial Bank of Persia.38 A collection of biographical sketches of outstanding personalities in Iran at the end of the century, compiled in 1897 by H. Picot, secretary of the British Embassy in Tehran, includes an entry on ʿAlī Akbar Shīrāzī, which records that in 1856 the government confiscated all his landed property in Fārs.39 Did this traumatic l’Océan Indien et la Mer de Chine, 13e-20e siècles, Paris: EHESS, 1988, pp. 83–90; André Wink, al-Hind: The Making of the lndo-Islamic World, vol. 1, Leiden: E.J. Brill, 1990, pp. 67–86; Patricia Risso, Merchants and Faith: Muslim Commerce and Culture in the Indian Ocean, Boulder: Westview Press, 1995, pp. 9–75. 37 See, e.g., Katerina Vourkatioti, “The House of Ralli Bros (c. 1814–1961),” in Charziioannou and Harlaftis (eds.), Nereids, pp. 104–105. 38 E. Beyens, Commerce et Industrie de la Perse, Extrait du Recueil Consulaire Belge, Brussels: P. Weissenbruch, 1898, p. 38; Hadji Ali Akbar & Sons, Letters regarding the Signatures of the Company, Letters File (1891–1918), no. 728, BBMER; Abdullaev, Promyshlenostʾ, p. 68. 39 Picot, Biographical Notices, p. 63.

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personal experience, and the conclusion he drew that private property was not protected in Qajar Iran, impel Alī Akbar to establish an additional business base in a state where the right of private property was hallowed? Apparently, there had to be a powerful driving force of this kind to have prompted him to become involved in the British business world.

V The fact that Muslim merchant-entrepreneurs did not establish extensive business networks in European countries had far-reaching economic, social and political consequences. Three merit particular attention: (1) International trade by the countries of the Middle East during the course of the nineteenth century was with the European markets, with the large incomes and profits that emanated from this trade accruing to whoever specialized in this field. Generally, the Muslim big merchants in the Middle East had a relatively small share of this bonanza, since marketing in the European economies themselves was not in their hands. Greek, British, French, Italian and other trading houses reaped the benefits of the most productive last stage of the export of goods from the Middle Eastern lands. The significance of this was that the actual rates of savings and investments by the tujjār were smaller than the rates they could have attained. In other words, it is reasonable to assume that the absence of large-scale Muslim merchant networks in the European markets had a negative effect on the investment rates in Middle Eastern economies. A great deal of theoretical and empirical research is still needed to try to assess the probable incomes and investments concerned in quantitative terms. (2) As we know, the Muslim big merchants were one of the important groups in Muslim societies in the Middle East, from the first centuries of Islam to the modern period, who were open to technological and cultural change, and did not refrain from passing innovations on to the public at large in their countries of origin. Whereas in the Middle Ages the most important source of innovation were the civilizations in South and Southwest Asia, in the nineteenth century Western societies were the main sources of innovation conveyed to Islamic societies, and not only in the domain of technology. The extent of the exposure of the tujjār to these various innovations was a central factor in this process of transfer, determined, inter alia, by the duration of their stay in European societies. The fact that only a few of the tujjār were exposed directly to Western societies and economies, therefore, was significant in the transfer process throughout the nineteenth century. Additionally, more than any other socioeconomic group in the countries of Islam, the tujjār were potentially those who might have fathomed the full significance of the industrial revolution that Western societies experienced in the eighteenth and nineteenth centuries. A small minority of them who were exposed to economic development 45

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in Central and Western Europe indeed tried to heighten the awareness of their own people regarding the depth of the change that the West had undergone. However, these tujjār constituted a very small group, whose voice and influence were lost in the welter of forces that acted on Middle Eastern societies in those years. (3) In the long term, the absence of a tradition of Muslim commercial networks at the foci of world trade was critical when, later, the Middle Eastern economies once again played an important role in the world economic system following the Second World War (the second globalization period). In the absence of foci of Muslim enterprises in the Western economy, those who made the connection between the external economic systems and the local economies in the Middle East were a new stratum of businessmen representing, and under the aegis of, the state. With few exceptions, they were state officials themselves, or cronies of dominant politicians, or members of the ruling families. The strength of these businessmen was mainly in the mobilization of political resources or political power to obtain advantages in the economic sphere.40 Not surprisingly, the achievements of this stratum in the field of economic enterprise in its Schumpeterian sense were extremely limited: they were not innovators, trail-blazers or builders of economic empires with the stamina to compete and endure in the international arena. With hindsight, it would appear that this was the heaviest price Middle Eastern society would pay for the weakness of the Muslim big merchants’ networks throughout the long nineteenth century.

40 Robert Springborg, Mubarak’s Egypt: Fragmentation of the Political Order, Boulder: Westview Press, 1989, pp. 38–39, 117–118; Raymond William Baker, Sadat and After: Struggles for Egypt’s Political Soul, London: LB. Tauris, 1990, pp. 18–45; Nazih N. Ayubi, The State and Public Policies in Egypt since Sadat, Reading: Ithaca Press, 1991, pp. 12–20.

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3 THE QADI, THE BIG MERCHANT AND FORBIDDEN INTEREST (RIBĀ)

Introduction Muslim big merchant-entrepreneurs (tujjār) played a key role in the financial activity of Muslim communities in the Ottoman Empire and Iran, providing credit and interest-bearing loans to both Muslims and non-Muslims. For prolonged periods from the sixteenth century, and certainly during the nineteenth century, in most parts of the Ottoman Empire and Iran they alone in the Muslim communities possessed large amounts of fluid capital which they were able to place at the disposal of borrowers in need of cash. Obviously, the Muslim tujjār were not the only players in the Ottoman and Iranian money markets. Two other significant groups were also active and influential in the banking sector. The first of these were wealthy non-Muslim families that specialised in money-lending. In the Ottoman Empire these families came mainly from the Greek, Armenian and Jewish millets, and in Iran mainly from the Armenian and Zoroastrian (Parsee) communities.1 The second group were the European banks established during the nineteenth century in the commercial and financial centres of the Ottoman Empire and Iran. These banks were either financial institutions specialising in the Ottoman Empire or Iran (the ‘foreign-local’ banks, of which the most prominent were the Ottoman 1 Research on the role of non-Muslims in the financial sector concentrates almost exclusively on developments in Istanbul/Constantinople. See Vartan Artinian, A Study of the Historical Development of the Armenian Constitutional System in the Ottoman Empire, 1839–1863, (PhD thesis, Brandeis University, 1970), pp. 18–19; Haris H.A. Exertzoglou, Greek Banking in Constantinople, 1850–1881 (PhD thesis, King’s College, University of London, 1986); Nora Seni, ‘The Camondos and their Imprint on 19th-Century Istanbul’, International Journal of Middle East Studies, 26 (1994), pp. 663–675; Araks Şahiner, The Sarrafs of Istanbul: Financiers of the Empire (MA thesis, Boğaziçi University, 1995); Haris Exertzoglou, ‘The Development of a Greek Ottoman Bourgeoisie: Investment Patterns in the Ottoman Empire, 1850–1914’, in Dimitri Gondicas and Charles Issawi (eds.), Ottoman Greeks in the Age of Nationalism: Politics, Economy, and Society in the Nineteenth Century (Princeton, NJ: Darwin Press, 1999), pp. 89–114; Yehoshu’a Ecker, ha-Bazargiyan shel ojaq ha-yenicherim – biyographya shel tafqid (MA thesis, Tel Aviv University, 2002); Yavuz Cezar, ‘The Role of the Sarrafs in Ottoman Finance and Economy in the Eighteenth and Nineteenth Centuries’, in Colin Imber and Keiko Kiyotaki (eds.), Frontiers of Ottoman Studies: State, Province and the West (London: I.B. Tauris, 2005), vol. 1, pp. 61–76.

DOI: 10.4324/9781003177425-4

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Imperial Bank, the Imperial Bank of Persia, and the Discount and Loan Bank of Persia),2 or branches of European banks (for example, Crédit Lyonnais, Deutsche Bank, Deutsche Orientbank, Wiener Bankverein, Banque d’Athènes, and Banco di Roma). Each of these banks had branches in the Ottoman Empire but none in Iran.3 Unlike the non-Muslim moneylenders and the European banks, the Muslim tujjār functioned under a unique condition: the dominant normative framework – Muslim law – prohibited the imposition of interest (ribā) on loans. In this context a number of questions arise. What was the deeper meaning for most Muslims of the contradiction between the practice of lending money and the Quranic prohibition? How did the Islamic religious courts (mahkama) deal with a financial system in which countless transactions (loans) bearing interest, often at extremely high rates, were in fact conducted? Against the backdrop of a normative prohibition, how were the special circumstances of intensive financial activity likely to affect the tujjār’s modi operandi in the credit market? To what degree did the tension between the prohibition and its constraints create conditions of uncertainty4 for the

2 On the leading ‘foreign-local’ banks, see L.F. Tigranov, Iz obshchestvenno-ekonomicheskikh otnoshenii v Persii (St. Petersburg: Anker, 1909), pp. 153–157; L.A. Sobotsinskii, Persiia: Statistikoekonomicheskii ocherk (St. Petersburg: Krovitskii, 1913), pp. 167–180; G.I. Ter-Gukasov, Politicheskie i ekonomicheskie interesy Rossii v. Persii (St. Petersburg: Ministerstvo Finansov, 1916), pp. 112–116; Marvin L. Entner, Russo-Persian. Commercial Relations, 1828–1914 (Gainesville, FL: University of Florida Press, 1965), pp. 39–80; Geoffrey Jones, Banking and Empire in Iran (Cambridge: Cambridge University Press, 1986), vol. 1, pp. 3–159; Christopher Clay, ‘The Origins of Modern Banking in the Levant: The Branch Network of the Imperial Ottoman Bank, 1890–1914’, International Journal of Middle East Studies, 26 (1994), pp. 589–614; Edhem Eldem, A History of the Ottoman Bank (Istanbul: Ottoman Bank Historical Research Center, 1999), pp. 29–335; André Autheman and J.A. Underwood, The Imperial Ottoman Bank (Istanbul: Ottoman Bank Archives and Research Centre, 2002). 3 For lists of foreign banks in Istanbul and in the provinces, see P. Marouche and G. Sarantis, Annuaire Financier de Turquie (Pèra (Istanbul]: Levant Herald, 1912), pp. 138–143. On the role of the European banks in the Ottoman economy, see Jacques Thobie, ‘European Banks in the Middle East’, in Rondo E. Cameron et al. (eds.), International Banking 1870–1914 (New York: Oxford University Press, 1991), pp. 406–440, 607–611; Jacques Thobie, ‘Les banques étrangères à la fin de L’Empire ottoman’, in Jacques Thobie and Salgur Kançal (eds), Système bancaire turc et réseaux financiers internationaux (Paris: L’Harmattan, 1995), pp. 11–26; Elena Frangakis-Syrett, ‘The Role of European Banks in the Ottoman Empire in the Second Half of the Nineteenth and Early Twentieth Centuries’, in Alice Teichova, Ginette Kurgan-van Hentenryk and Dieter Ziegler (eds.), Banking, Trade and Industry: Europe, America and Asia from the Thirteenth to the Twentieth Century (Cambridge: Cambridge University Press, 1997), pp. 263–276; Philip L. Cottrell, ‘A Survey of European Investment in Turkey, 1854–1914: Banks and the Finance of the State and Railway Construction’, in Philip L. Cottrell, M.P. Fraser and I.L. Fraser (eds.), East Meets West: Banking, Commerce and Investment in the Ottoman Empire (Aldershot: Ashgate, 2008), pp. 59–95. 4 The term ‘uncertainty’ in economic theory was coined by Frank H. Knight, who contended that uncertainty in business relates to developments or events whose probability can be assessed or estimated only subjectively. This contrasts with ‘risk’, which relates to events that recurred in the past and whose incidence can be estimated. In the context of loans, the possibility that a borrower will go bankrupt and not repay the loan is a known risk that the lender can take into account (for instance

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lenders? Lastly, to what extent did this tension affect the rise of capitalism in the Ottoman Empire and Iran in the nineteenth century? These issues are at the core of the discussion in the present article.

Between Prohibition and Constraint Beyond the various approaches and differences of opinion on the question of ribā, most Sunni and Shi‘i jurists (fuqahāʾ), from the earliest generations of Islam to the present day, are of one mind: the imposition of ribā on loans is totally forbidden by the Quran, and is regarded as a grave sin.5 This abiding concept held by the fuqahāʾ down through the ages is based on various verses in four different chapters (suras) of the Quran.6 The wording in these suras seems to reflect a gradual development in the stance regarding ribā, from a latent to a limited proscription and, finally, to a complete and absolute one. Verses 280–281 and 283–284 of sura 2, which apparently represent the later conception of ribā, constitute a response to questions that arose in this regard among the faithful in al-Madina, and it was these verses that determined the orthodox position: Those who take usury will not rise up except like those maddened by Satan’s touch. For they claim that trading is like usury, whereas Allah has made trading lawful and prohibited usury . . . those who revert [to by obtaining guarantees and even by taking out insurance against this eventuality). By contrast, a new tax retroactively levied on loans that makes many loans unprofitable is a development in the uncertainty category, against which a lender is unable to take measures in advance. Knight notes that from the entrepreneur’s standpoint there is an essential difference between risk and uncertainty. Whereas the entrepreneur can pass risk damage onto others, such as insurance companies, he is forced to deal with a situation of uncertainty and its concomitant outcomes on his own. In Knight’s view, this latter distinction is central to understanding the nature of economic entrepreneurship. See Frank H. Knight, Risk, Uncertainty and Profit (Boston, MA: Houghton Miffin, [l921] 1933), pp. 197–263; Mark Casson, The Entrepreneur: An Economic Theory (Totowa, NJ: Barnes & Noble, 1982), pp. 370–372. 5 The issue of ribā has been examined by numerous Muslim and non-Muslim scholars. Scores of studies devoted either wholly or partially to this subject have been published in recent decades. See, inter alia: David Santillana, Instituzioni di diritto musulmano malichita con riguardo anche al sistema sciafiita (Rome: Instituto per l’Oriente, 1938), vol. 2, pp. 60–66; Shaikh Draz, ‘L’usure en droit musulman’, in Louis Milliot (ed.), Travaux de la Semaine internationale de droit musulman (1951) (Paris: Recueil Sirey, 1953), pp. 143–157; J. Schacht, ‘Ribā’, Encyclopaedia of Islam, 2nd ed., 6 (1995), pp. 491–493; Fazlur Rahman, ‘Ribā and Interest’, Islamic Studies, 3 (1964), pp. 1–43; Robert Brunschvig, ‘Conceptions monétaires chez les jurists musulmans’, Arabica, 14 (1967), pp. 113–143; Anwar Iqbal Qureshi, Islam and the Theory of Interest (Lahore: Muhammad Ashraf, n.d. [1947?]), pp. 44–122; M. Abu Zahra, Buhuth fi al-ribā (Kuwait: dar al-buhuth alIslamiyya, 1970), pp. 53–54; Nur al-Din ‘Atr, al-Mu‘amala al-masrifiyya wa al-ribāwiyya (Beirut: Risala, 1977), pp. 53–80; M. Umer Chapra, Towards a Just Monetary System (Leicester: The Islamic Foundation, 1985), pp. 55–66; Nabil A. Saleh, Unlawful Gain and Legitimate Profit in Islamic Law, 2nd ed. (London: Graham & Trotman, 1992), pp. 11–39. 6 See verse 39, sura 30; verse 161, sura 4; verse 130, sura 3; and verses 280–284, sura 2. On the stages in the development of the Prophet Muhammad’s position on ribā, see Schacht, ‘Ribā’, p. 491.

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interest] – those are the people of the fire in which they shall abide forever. (280) Allah prohibits usury and does not bless it . . . . (281) O believers, fear Allah and forgo what is still due from usury . . . . (283) But if you fail to do that, take note of a war [waged] by Allah and His Apostle. (284)7 The Quranic concept of ribā is broader than the prevailing terminology in European languages (e.g., interest, intérêt, Zinsen, Interesse – the addition of money to the principal given as a loan), although there is a consensus among scholars of Islamic law and economics that this narrower meaning is also part of the concept of ribā. The total rejection of interest in the Quran was explained by the fuqahāʾin the following way: 1.

2.

There is no justification for profiting from barter. In this regard the jurists cite the noted hadith (a formal tradition) in which the Prophet is quoted as saying: ‘Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt . . . ’.8 If there is no justification for profiting from barter, then this is all the more applicable with regard to cash transactions. Moreover, time (as an autonomous factor) does not justify any addition whatsoever to the value of any item or product, including money (cash). The value of a given sum of money today is equivalent in all respects to its value at a future date, and a number of hadiths served to establish this central point.

It therefore appears that the Prophet did not acknowledge any factors whatsoever that would justify receiving a recompense for the giving of a loan, whether this be the lender waiving income from an alternative investment; the risk of losing the principal; or a possible decline in the real value of the loan.9 According to the majority of the fuqahāʾ, the explanations justifying the prohibition of interest reflect a central motif in the Prophet’s perception: the establishment of justice (‘iqāmat al-‘adil) in the community. Inasmuch as interest first and foremost harms the weaker strata of society, exacerbates poverty and intensifies distress, while at the same time benefiting the affluent and powerful, it should not be permitted. In other words, interest heightens socioeconomic inequality in the community and is therefore inappropriate and forbidden.10 7 The Quran: A Modern English Version, trans. Majid Fakhry (Reading: Garnet Publishing, 1998), pp. 32–33. 8 Abdulkader Thomas, ‘What is ribā?’, in idem (ed.), Interest in Islamic Economics: Understanding ribā (London: Routledge, 2006), p. 128. 9 Ibid., p. 131. 10 M. Umer Chapra, ‘Why has Islam prohibited interest? Rationale behind the prohibition of interest’, in Thomas, Interest in Islamic Economics, pp. 96–98. Nasr Abu Zaid has a similar explanation. See

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The demand for loans, however, is unavoidable in certain circumstances. For example, the case of a farmer left without seeds before the sowing season; an artisan whose tools and raw materials were lost in a fire; a ruler who had insufficient funds to arm and feed his army in the face of an enemy at the gates of his capital, and so forth. There were those in the Muslim communities who had fluid resources at their disposal which could be used for the provision of loans, and since providing a loan embodies elements of relinquishment and risk, the potential lender expects to be recompensed by the borrower. The lender relinquishes the alternative uses of the loaned money, whether they be for immediate consumption or for investment, from which he can reap profits. From the standpoint of the lender, a loan has a price, while the borrower can use the sum he has borrowed to increase his own income by investing it. Moreover, providing a loan entails risk and uncertainty, as there is always the possibility that the borrower will be unable or unwilling to repay the loan, and there is also the danger of a decline in the value of the money (inflationary processes). For these as well as other reasons it is reasonable that the lender expects a reward in the form of interest for providing a loan.11 It was at the convergence of the borrower’s constraints and needs and the lender’s demand for an appropriate consideration that interest was born. The logic behind the existence of interest explains the fact that this economic practice was well developed in ancient societies. There is evidence of interest-bearing loans in Mesopotamia of the third century BC.12 Hammurabic law (ca 1800 BC) contains detailed ordinances that address maximal interest rates, loan repayment arrears, assets that can be expropriated for non-repayment of the principal and interest, etc.13 Interestbearing loans were also prevalent in the classical Hellenistic and Roman cultures.14 A radical change in attitude towards interest first became evident in the world view of Judaism and then in early Christianity. In the formative generations of the two monotheistic religions there was no real distinction between interest and usury; any addition to the principal was considered to be usury and was forbidden.15 It was

11

12

13

14

15

Nasr Abu Zaid with Esther R. Nelson, Voice of an Exile: Reflections on Islam (Westport: Praeger, 2004), pp. 110, 168–169. The theoretical literature on the various economic aspects of interest and its effect on economic activity is extensive. See the comprehensive review by Friedrich A. Lutz, The Theory of Interest (Dordrecht: D. Reidel, 1968), pp. 3–229. Steven J. Garfinkle, ‘Shepherds, Merchants, and Credit: Some Observations on Lending Practices in Ur III Mesopotamia’, Journal of the Economic and Social History of the Orient, 47 (2004), pp. 9–10. Marc van de Mieroop, ‘Old Babylonian Interest Rates: Were They Annual?’, in K. van Lerberghe and A. Schoors (eds.), Immigration and Emigration within the Ancient Near East: Festschrift E. Lipinski (Leuven: Peeters, 1995), pp. 357–358; Martha T. Roth, Law Collections from Mesopotamia and Asia Minor (Atlanta: Scholars Press, 1995), pp. 97–99, 103. Sidney Homer, A History of Interest Rates (2nd ed.) (New Brunswick: Rutgers University Press, 1977), pp. 32–55; Edward E. Cohen, Athenian Economy and Society: A Banking Perspective (Princeton, NJ: Princeton University Press, 1992), pp. 44–46, 207–216. Jewish religious law permitted the charging of interest on loans given to non-Jews but prohibited the imposition of interest on loans given by Jews to their coreligionists. In the sixteenth century a

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only in the twelfth century that the Catholic Church gradually began to accept an approach permitting the selective imposition of interest.16 Obviously, the institution of interest was present in Hijaz society in the preIslamic period;17 its concomitant harsh socioeconomic results explain the Prophet’s bitter attack against ribā. Yet, despite the Quranic prohibition, the Islamic communities were unable to manage without interest-bearing loans. From the first centuries of Islam to the present, Muslims of all classes, in rural and urban societies alike, borrowed and loaned at various rates of interest, ranging from a few per cent to hundreds of per cent per annum. Not surprisingly, the interestbearing loan market in the Muslim communities flourished, particularly in locations and periods of wide-ranging economic and trade activity and with concomitant high rates of economic growth. There is clear evidence that in Muslim societies down through the generations, from the Umayyid state and the ‘Abbasid caliphate to the Qajar kingdom and the Ottoman Empire, interest-bearing transactions involving Muslim moneylenders played an important and sometimes dominant role.18 The Quranic commandment created internal tension in the Muslim communities at varying levels of intensity, from uneasiness to outright contempt, condemnation and humiliation, particularly in the attitude of the ulema towards Muslims who charged interest on loans. A degree of cognitive dissonance19 appears to have existed among Muslims who were involved in providing, receiving, registering

16 17

18

19

standard form of legalisation of interest imposed on Jewish borrowers was established. See Siegfried Stein, ‘The Development of Jewish Law on Interest from the Biblical Period to the Expulsion of the Jews from England’, Historia Judaica, 17 (1955), pp. 4–5; John T. Noonan, Jr., The Scholastic Analysis of Usury (Cambridge, Mass: Harvard University Press, 1957), pp. 1–37; ‘Usury’, Encyclopaedia Judaica, 16 (1971), pp. 28–34. On the attitude of Jewish religious authorities toward cambio and interest in the sixteenth and seventeenth centuries, see Benjamin Arbel, ‘Yehudim, tzmihat ha-qapitalizm ve-cambio’, Zion, 69 (1994), pp. 174–192. Noonan, Scholastic Analysis, pp. 193–195. M.J. Kister, ‘Some Reports concerning Mecca from Jāhiliyya to Islam’, Journal of the Economic and Social History of the Orient, 15 (1972), p. 78; Mahmood Ibrahim, Merchant Capital and Islam (Austin: University of Texas Press, 1990), pp. 61–62. For details on interest-bearing loans among Muslims during the eighth to fifteenth centuries, see Sobhi Labib, ‘Geld und Kredit: Studien zur wirtschaftsgeschichte Aegyptens im Mittelalter’, Journal of the Economic and Social History of the Orient, 2 (1959), pp. 236–237; J. Schacht, ‘Hiyal’, Encyclopaedia of Islam, 2nd ed., 3 (1971), p. 511; E. Ashtor, A Social and Economic History of the Near East in the Middle Ages (London: Collins, 1976), p. 86; idem, ‘Le taux d’intérêt dans l’Orient médieval’, in Fatti e idée di storia economica nei secoli XII-XX: Studi dedicati a Franco Borlandi (Bologna: n. pbr., 1977), pp. 198–204. According to cognitive dissonance theory, a person will experience dissonance when he is conscious of doing what he perceives to be a foolish or unethical act. This situation is bound up with emotions of varying intensity, discomfort and distress. He will therefore try to avoid such a situation, or, alternatively, activate various defense mechanisms. See Leon Festinger, A Theory of Cognitive Dissonance (London: Tavistock Publications, [1959] 1962), pp. 9–29; Elliot A. Aronson, ‘The Return of the Repressed: Dissonance Theory Makes a Comeback’, Psychological Inquiry, 3 (1992), pp. 304–306.

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or adjudicating in disputes over interest-bearing loans.20 To resolve this dilemma, several fuqahāʾ attempted to construct a bridge between the prohibition and the daily needs of the community in order to free it from the tension deriving from unavoidable sinfulness.21 Of all the solutions proposed and accepted, often by only part of the community, two had the greatest influence. The first was interpretation, the hermeneutic tool generally employed in such situations, and the second was bypassing the issue by employing legal stratagems. In the first category, the debate focused on the interpretation of the concept of ribā. Over the generations, two interpretations were most dominant: 1.

Senior fuqahāʾ of the Hanafi school argued that by the term ribā the Prophet meant usury – exorbitant, unreasonable and unfair rates of interest that were blatantly unjust and would inevitably bring about the impoverishment of the borrower, the loss of his property, and even the loss of his liberty. Ribā of this kind causes severe damage to the entire community of the faithful and was therefore totally forbidden. In contrast to usury, however, there is interest at a low rate – the addition of a few per cent to the principal – known as ribā,22 which according to Hanafi jurists was permitted. They emphasised that ribh is not explicitly mentioned in the Quran and it did not cause the same injustice as usury. Moreover, it is unreasonable that the Prophet forbade the use of ribh, since he understood the needs of the faithful and the importance of arrangements that would facilitate the provision of loans to those in need of them. Hence, ribh is legitimate. According to the Hanafis, the distinction between the concepts of ribh and ribā was of vital importance. This is especially pertinent with regard to the monetary system of the Ottoman Empire, whose rulers

20 For an evident case of cognitive dissonance on the part of the imam of Haifa in the early twentieth century, see Mahmoud Yazbak, Haifa in the Late Ottoman Period: A Muslim Town in Transition (Leiden: Brill, 1998), p. 185. 21 Muhammad Rashid Rida, Fatawa al-imam Muhammad Rashid Rida (Beirut: Dar al-kitab al-jadid, 1970), vol. 2, pp. 606, 608–609; ‘Abd al-Razzaq Ahmad al-Sanhuri, Masadir al-haq fi al-fiqh al-Islami (Cairo: Dar ihya al-turath al-‘Arabi, 1968), vol. 3, pp. 4ff.; Neş’et Çağatay, ‘Ribā and Interest Concept and Banking in the Ottoman Empire’, Studia Islamica, 32 (1970), pp. 63–64. 22 There were a number of other terms denoting interest in addition to the concept of ribā. In mahkama hearings, in fatwas, and in the writings of fuqahā’ in the various districts of the Ottoman Empire in Anatolia and the Arab provinces from the sixteenth century onward, fā’ida, murābaha, istirbāh, mu‘āmala, istighlāl and several other terms were used instead of ribā or ribh. In Iran the terms sūd, bahra, and tanzīl were prevalent. See James Greenfield, Das Handelsrecht . . . von Persien in die Handelsgesetze des Erdballs (Berlin: R. v. Decker’s Verlag, n.d. [1909]), vol. 4, p. 54; Ter-Gukasov, Politicheskie, p. 90; Ömer Lütfi Barkan and Ekrem Hakkı Ayverdi, İstanbul Vakıfları Tahrir Defteri, 953 (1546) Tarihli (Istanbul: Istanbul Fetih Cemiyeti Istanbul Ensitusu, 1970), p. xxxv; Çağatay, ‘Ribā and Interest Concept and Banking’, p. 64; Ronald C. Jennings, ‘Loans and Credit in Early 17th Century Ottoman Judicial Records: The Sharia Court of Anatolian Kayseri’, Journal of the Economic and Social History of the Orient, 16 (1973), p. 187; Haim Gerber, Economy and Society in an Ottoman City: Bursa, 1600–1700 (Jerusalem: The Hebrew University, 1988), pp. 128–129; Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East (Princeton, NJ: Princeton University Press, 2011), p. 150.

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turned ribh into a legitimate practice in the sixteenth century by giving it an official seal of approval as part of Sultan Sulayman Qanuni’s code of criminal law.23 The other dominant interpretation, attributed to ‘Abdallah Ibn ‘Abbas, the Prophet’s cousin, holds that the concept of ribā bears different meanings over time. Thus, the period preceding Muhammad’s appearance and the period following the formulation of his dogma reveal an essential shift in the meaning of the concept. The interest used in the former period was known as ribā al-jāhiliyya and was characterized by very high rates of interest. When a loan was not repaid on time, a fine was imposed on the borrower in the form of incremental rates of interest that reached scores and even hundreds of per cent.24 This practice aroused the Prophet’s ire, as first and foremost it exploited and impoverished the poor and needy, so that not only did he oppose it vehemently, he forbade it completely. By contrast, according to an interpretation by Ibn ’Abbas, ribā in the early generations of Islam did not include fines in the form of exorbitant rates.25

These means of evading the Quranic proscription were not universally accepted. They were rejected in particular by Hanbali fuqahāʾ, meaning other solutions were needed to bridge the gap between proscription and necessity. As noted above, another way was to disguise interest by means of a legal device (hīla, pl. hiyal)26 which enabled the imposition and payment of interest by concealing it, so that neither lender nor borrower were in prima facie breach of the Quranic commandment. Two stratagems were most favoured: 1.

Interest was disguised by a ‘double sale’ (‘īna, or mukhātra) based on two sequential fictitious sales. First, the lender sold an item (cloth, soap, books, etc.) to the borrower for a sum equivalent to the principal plus the interest. The borrower undertook (either verbally or in writing) to repay the value of the item at the end of a mutually agreed period. At the conclusion of this ‘transaction’, the second fictitious sale took place: the borrower sold the same item back to the lender for the sum of the principal alone. In effect, the lender gave the borrower the agreed sum up front. At the conclusion of the ‘double sale’, the lender was left with the borrower’s undertaking to repay the principal

23 Uriel Heyd, Studies in Old Ottoman Criminal Law, (ed.) V.L. Ménage (Oxford: Oxford University Press, 1973), p. 122; N. Çağatay, ‘An Outline of Islamic Law and Development of Ottoman Traditional Law’, in Abdeljelil Temimi (ed.), La vie économique des provinces arabes et leurs sources documentaires à l’époque ottomane, vol. 3 (Zaghouan: CERPAO, 1986), p. 257. 24 Saleh, Unlawful Gain, pp. 35–36. 25 Ibid., p. 34. 26 Numerous studies have been conducted on hiyal. See, e.g., Joseph Schacht, An Introduction to Islamic Law (Oxford: Oxford University Press, 1964), pp. 78–82; idem, ‘Hiyal’, pp. 510–513; and Rafiq Yunis al-Masri, al-Jami‘ fi usul al-ribā (Damascus: Dar al-qalam, 1991), pp. 172–179, which details the various types of stratagems.

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2.

and the interest, while the borrower had the sum of the loan (the principal) in hand. From a shar‘i standpoint there is nothing invalid in these two ‘transactions’.27 Delayed payment for the purchase of an item is indisputably permissible. The matter of interest is of course not mentioned in the borrower’s agreement or in his undertaking to repay the debt. Interest was disguised by a ‘sale with the right of repurchase’ (bay‘ bi’lwafā‘), whereby the borrower sells an asset to the lender and receives its value in cash (the principal). On completion of this transaction, the borrower leases or rents the asset from the lender (a payment equivalent to the interest on the sum he received). Subsequently, as agreed between the parties, the borrower exercises his right to reacquire the asset and pays its value to the lender (i.e., he repays the principal).28

The fuqahāʾ were divided over the legal and moral propriety of these stratagems. While Hanafi jurists found no flaw in hiyal, and approved them,29 their Shafi‘i colleagues felt some discomfiture with regard to their ethical aspect. The Malikis and the Hanbalis condemned the use of hiyal outright.30 This, perhaps, is the reason why the parties to the provision or taking of a loan quite often used several means simultaneously. By way of example, the records of the shar‘i courts show that in a loan agreement the interest is called fā’ida or murābaha (hermeneutic means), with the lender and borrower also using the ‘double sale’ ploy (‘īna) or some other legal stratagem.31 Were these ways and means able to free the faithful from unease regarding the Quranic prohibition, dissipate the angst of the dissonance and, in short, turn interest into a valid and legitimate measure from the standpoint of Muslim religious law? It would seem that with regard to many ulema, they could not.32 Throughout

27 For the Hanafi ulema’s approval of this method, see Muhammad Amin b. ‘Abidin, Hashiyat radd al-mukhtar ‘ala al-durr al-mukhtar: Sharh tanwir al-abshar fi fiqh madhhab al-imam Abi Hanifa al-Nu‘man (Cairo: Mustafa Babi al-Halabi, 1966), vol. 5, p. 273; al-Fatawa al-Hindiyya (Beirut: Dar al-ihya al-turath al-‘Arabi, 1980), vol. 3, p. 208. For the attitude of the other three schools toward ‘double sale’, see Y. Linant de Bellefonds, ‘Volonté interne et volonté déclarée en droit musulman’, Revue internationale de droit comparé, 10 (1958), pp. 520–521. 28 For an example of approval of the use of bay‘ bi’l-wafā‘, see al-Fatawa al-Hindiyya, vol. 3, p. 209. 29 Noel J. Coulson suggested that the Hanafi school endorsed hiyal ‘largely because of the formalism which was one of its distinctive characteristics’. See A History of Islamic Law (Edinburgh: Edinburgh University Press, [1964] 1978), pp. 140–141. 30 Ibid., p. 100. 31 On the simultaneous use of both means, see, e.g., Abdul-Karim Rafeq, ‘Land Tenure Problems and their Social Impact in Syria around the Middle of the Nineteenth Century’, in Tarif Khalidi (ed.), Land Tenure and Social Transformation in the Middle East (Beirut: American University of Beirut, 1984), p. 389. 32 Of particular importance, due to their great influence, are the writings of Abu Hamid al-Ghazali (1058–1111), who totally rejected interest. See Ihya ‘ulum al-din (Beirut: Dar al-kitab al-‘ilmiyya, 1995), vol. 2, pp. 78–79. See also S.M. Ghazanfar (ed.), Medieval Islamic Economic Thought (London: RoutledgeCurzon, 2003), pp. 36–37.

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the generations, and no less in recent centuries than in earlier ones, senior Sunni and Shi‘i ulema continued to repudiate interest-bearing loans. Thus, for example, in the eighteenth century ulema in Syria’s main cities, such as Damascus, Aleppo and Hama, disapproved of taking interest (fā’ida or murābaha), despite the guidelines or instructions of the central government in Istanbul approving it,33 and ulema in Iran continued to issue treatises condemning both ribā and those who accumulated wealth from it.34 A clear reflection of the tension existing between the position of the state and that of the clerics is apparent in the conduct of ulema and qadis in Syria during the eighteenth and nineteenth centuries. While in their treatises many of them rejected the taking of interest, the shar‘i courts repeatedly approved loans bearing interest at a wide range of rates,35 including exorbitant rates of hundreds of per cent per annum.36

Interest Rates A central question in the context of the prohibition of interest and the ongoing dissonance that resulted is whether the circumstances of providing loans in Islamic communities actually affected interest rate levels. An answer to this question mandates an examination of what we know of the interest rates actually charged. Varied sources provide numerous data on interest rates, and although the range of the rates is found to be wide, even in a given city over a short period, the most notable finding is that in most instances interest rates ranged between 10 and 20 per cent. These rates appear at a high incidence both in internal sources – mainly sijillāt (court registers) – and external ones, mainly British and French consular trade reports. A recurring phenomenon is that these rates appear in documents dating from the sixteenth to the early twentieth centuries, and from numerous and

33 Abdul-Karim Rafeq, ‘The Syrian ‘Ulamā, Ottoman Law and Islamic Sharī‘a’, Turcica, 26 (1994), pp. 16–22. On the substantial reservations of qadis in Syria regarding the charging of interest, see idem, ‘Relations between the Syrian ‘Ulamā’ and the Ottoman State in the Eighteenth Century’, Oriente Moderno, n.s. 18 (79) (1999), pp. 82–83; Dick Douwes, The Ottomans in Syria: A History of Justice and Oppression (London: I.B. Tauris, 2000), p. 79; Abdul-Karim Rafeq, ‘Making a Living or Making a Fortune in Ottoman Syria’, in Nelly Hanna (ed.), Money, Land and Trade: An Economic History of the Muslim Mediterranean (London: I.B. Tauris, 2002), p. 115. 34 See, e.g., the attitude of Muhammad Mahdi Niraqi to gaining wealth through charging interest, in Juan R.I. Cole, ‘Ideology, Ethics, and Philosophical Discourse in Eighteenth Century Iran’, Iranian Studies, 22 (1989), p. 26. 35 See the cases cited in the following studies: Abdul-Karim Rafeq, ‘Economic Relations between Damascus and the Dependent Countryside, 1743–71’, in A.L. Udovitch (ed.), The Islamic Middle East, 700–1900: Studies in Economic and Social History (Princeton, NJ: Darwin Press, 1981), pp. 674–675. Cf. idem, ‘The Impact of Europe on a Traditional Economy: The Case of Damascus, 1840–1870’, in Jean-Louis Bacqué-Grammont and Paul Dumont (eds.), Économie et sociétés dans l’Empire ottoman (fin du XVIIIe – début du XXe siècle) (Paris: CNRS, 1983), p. 431; idem, ‘Land Tenure Problems’, pp. 388–389. 36 Abraham Marcus, The Middle East on the Eve of Modernity: Aleppo in the Eighteenth Century (New York: Columbia University Press, 1989), p. 185.

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wide-ranging provinces in the Ottoman Empire (Anatolia, the Balkans, the Fertile Crescent, the Arabian Peninsula and Egypt) as well as in Safavid and Qajar Iran. It seems that these rates were fixed for loans of small and large sums alike.37 Nevertheless, there were instances in which Muslim lenders debited borrowers with higher interest rates, from a few tens of per cent to two or three hundred per cent per annum.38

37 Numerous cases are found in the sources. The following are examples covering various regions in the Ottoman Empire and Iran at different periods. The sources cited are in chronological order of data from the sixteenth to the early twentieth centuries: Ö.L. Barkan, ‘Edirne Askeri Kasamina Ait Tereke Defterleri (1545–1659)’, Belgeler, vol. 3 (1966), p. 34, cited by Gerber, Economy and Society, p. 130; Çağatay, ‘Ribā and Interest’, p. 65; Rafeq, ‘The Syrian ‘Ulamā’, p. 17; Jennings, ‘Loans and Credit’, pp. 184, 188–190; Bistra A. Cvetkova, ‘Le crédit dans les Balkans, XVIe-XVIIe siècles’, in Jean-Louis Bacqué-Grammont and Paul Dumont (eds.), Contributions à l’histoire économique et sociale de l’Empire ottoman (Leuven: Editions Peeters, 1983), p. 306; Bruce Masters, The Origins of Western Economic Dominance in the Middle East (New York: New York University Press, 1988), p. 161; André Raymond, Artisans et commerçants au Caire au XVIIIe siècle (Damas: Institut Français de Damas, 1974), vol. 1, p. 281; A.K.S. Lambton, ‘The Case of Hājjī ‘Abd al-Karīm: A Study in the Role of the Merchant in mid-Nineteenth-Century Persia’, in C.E. Bosworth (ed.), Iran and Islam (Edinburgh: Edinburgh University Press, 1971), p. 337; Charles Issawi, The Economic History of Turkey 1800–1914 (Chicago: University of Chicago Press, 1980), pp. 341, 343; Sarah D. Shields, Mosul before Iraq: Like Bees Making Five-Sided Cells (Albany: SUNY, 2000), p. 137; [Thomas S.] Jago, ‘Report . . . on the Trade and Commerce of Damascus for the Year 1879’, UK, FO, Consular Reports, Commercial No. 26 (1880), p. 1007; ‘Report by Consul [C. Beresford] Lovett on the Trade and Commerce of the Province of Asterbad for the Year 1881’, BPP, A&P, Commercial Reports, 71 (1882), p. 1067; Charles Issawi, The Fertile Crescent, 1800–1914: A Documentary Economic History (New York: Oxford University Press, 1988), p. 234; Dr. de Fournoux, ‘L’Industrie, le commerce et l’agriculture en Perse’ (part 2), Bulletin de la société de géographie commerciale de Bordeaux, 10 (1887), 17 January 1887, p. 35; Yazbak, Haifa, p. 185; Thomas S. Jago, ‘Report on the Trade and Commerce of Aleppo for the Year 1891’, UK, FO, DCR, AS, 1017 (1892), p. 14; Jamal al-Din al-Qasimi and Khalil al-‘Azim, Qamus al-sina‘at al-Sha’miyya (Paris: Mouton, 1960), vol. 2, p. 429; S.G. Wilson, Persian Life and Customs (New York: Fleming H. Revell, 1900), p. 283; Greenfield, Das Handelsrecht . . . von Persien, p. 54. See also the data on interest rates in the Ottoman Empire, particularly Istanbul and Bursa, from the seventeenth till the nineteenth centuries, in the following studies: Murat Çizakça, ‘Cash Waqfs of Bursa, 1555–1823’, Journal of the Economic and Social History of the Orient, 38 (1995), p. 347; Şahiner, ‘Sarrafs’, p. 45. Interest rates charged by foreign banks that operated in the Ottoman Empire and Iran were generally lower than those demanded by local Muslim lenders. See M.L. Tomar, Economicheskoe polozhenie Persii (St. Petersburg: Ministerstvo Finansov, 1895), p. 118; [Agreement between the Discount and Loan Bank and Aqa ‘Abd al-Mahmud], Tehran, 23 July 1897, pp. 26–27, fond 600, opis 2, delo 337, RGIA; [Minutes of the meeting of the Board of the Bank], [St. Petersburg], 20 January 1912, p. 57, fond 600, opis 9, delo 1060, RGIA; [Minutes of the meeting of the Board of the Bank], [St. Petersburg], 19 April 1914, p. 2, fond 600, opis 9, delo 1039, RGIA; Ernest Weakley, Report upon the Conditions and Prospects of British Trade in Syria (London: Board of Trade, Commercial Intelligence Committee, 1911), pp. 23, 24–25; Arthur Guy, ‘Situation économique de la région de Caïffa et de Saint-Jean-d’Acre, années 1909–1910’, France, MCI, RC 1058 (1913), p. 53; L.A. Sobotsinskii, Persiia: Statistiko-economicheskii ocherk, pp. 176–177; Eldem, The Ottoman Bank, p. 278. 38 Loans at an annual interest rate ranging from 20 to 40 per cent were less common. The factors explaining this level of interest rates are related to the risk and uncertainty in granting credit. For

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Clearly, a series of economic, social, cultural and political factors determined the actual level of interest rates. In the context of this study it should be emphasised that the positions taken by the ulema as judges (qadis) in the courts, in cases of loans and interest, had a considerable influence on the level of interest rates. As will be shown below,39 at times and in places where qadis who opposed the charging of interest from a religio-judicial standpoint heard cases in court, lenders were faced with uncertainty regarding the return on their investment. In dealing with this uncertainty, it is reasonable to assume that the lenders raised interest rates over and above the existing levels.

The Tujjār as Lenders Like their non-Muslim counterparts, big Muslim merchants held cash reserves and ingots of precious metals to facilitate their transactions, and were sought out by potential borrowers.40 The demand for loans increased in the second half of the nineteenth century as economic systems in the Middle East underwent a process of monetisation, legal arrangements for the mortgage of assets became institutionalised, and economic relations between the countries of the Middle East and the global economic system expanded. The demand for loans came mostly from examples of these rates, see Cvetkova, ‘Le crédit dans les Balkans’, p. 306; Şevket Pamuk, A Monetary History of the Ottoman Empire (Cambridge: Cambridge University Press, 2000), p. 81; Issawi, The Economic History of Turkey, p. 343; Jakob Eduard Polak, Persien: Das Land und seine Bewohner (Leipzig: F. A. Brockhaus, 1865), vol. 2, p. 188; ‘Report by Consul [Keith E.] Abbott on the Trade and Resources of the Province of Gilan for the Year 1865’, BPP, A&P, CR 67 (1867), p. 109; ‘Report by Vice-Consul Jago on the Trade and Commerce, and Agriculture of the Vilayet of Syria and on the Trade and Commerce of Beyrout, Lattakia, Tripoli, and Sidon, during the year 1871’, BPP, A&P, CR 58 (1872), p. 853; Issawi, The Fertile Crescent, p. 65; Heinrich Brugsch, Im Lande der Sonne: Wanderungen in Persien (Berlin: Allgemeiner Verein fur Deutsche Literature, 1886), p. 241; George Lloyd, Report upon the Conditions and Prospects of British Trade in Mesopotamia (London: Board of Trade, Commercial Intelligence Committee, 1908), p. 66; M. Nikol’skii, ‘Torgovlia Giliana v 1908 godu’, SKD (1909), vol. 2, pp. 120–121; Raymond, Artisans et commerçants au Caire, vol. 1, p. 282. The sources, including the sijill records, also reveal evidence of annual interest rates in excess of 40 per cent, some even reaching 100 per cent and over. It appears, however, that these cases were rare and apparently stemmed from circumstances in which giving loans entailed particularly high risk. See F. Stolze and F.C. Andreas, Die Handelsverhältnisse Persiens: mit besondere Berücksichtigung der deutschen Interessen (Gotha: Justus Perthes, 1885), p. 39; Şevket Pamuk, The Ottoman Empire and European Capitalism, 1820–1913: Trade, Investment and Production (Cambridge: Cambridge University Press, 1987), pp. 89, 189; Wilson, Persian Life and Customs, p. 283; al-Qasimi and al-‘Azam, Qamus al-sina‘at al-Sha’miyya, vol. 2, p. 429; Abraham Marcus, ‘Real Property and Society in the Premodern Middle East: A Case Study’, in Ann Elizabeth Mayer (ed.), Property, Social Structure, and Law in the Modern Middle East (Albany: SUNY Press, 1985), p. 118. 39 See later pp. 61–67. 40 Muslim big merchants were not the only ones who gave loans. Muslim lenders in the Middle East also included rulers and senior bureaucrats in the center and the provinces, Janissaries, ulema, big landowners, sarrāfūn (money changers) and even artisans. Yet, as a group, the big merchants were by far the dominant factor in this sector.

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rulers, senior officials, ulema, big landowners and tribal leaders, but also from sarrāfūn,41 retail merchants, artisans and fellaheen from various regions of the Ottoman Empire and Iran.42 Unfortunately, there is no way to quantify the relative share of loans provided by the Muslim tujjār within the total amount of loans given in various periods and places by the three components of the banking system (Muslim, non-Muslim and foreign lenders) in the Ottoman Empire and Iran. Nevertheless, it is clear from the innumerable cases mentioned in the sources, primarily in sijillāt but also in other local and foreign documents, that interest-bearing loans granted by Muslims were a common practice and that in many regions, particularly in the rural areas, there was hardly any other available source of loans. Even in the late nineteenth century after European banks had been established in Ottoman and Iranian commercial centres, Muslim lenders were still more accessible to peasants, artisans, traders and the lower ranks of the local bureaucracy than the other financial sources, while the upper echelons of Ottoman and Iranian society continued to rely heavily on funds furnished by the local Muslim tujjār, especially in periods of financial stringency. Aside from providing interest-bearing loans, the big Muslim merchants were also active in futures, known as salam or bay‘ salam arrangements.43 In accordance 41 The sarrāfūn, who were members of the money changers guild, only gave small loans. Ottomans and Persian documents, however, sometimes used the terms sarrāf/ūn and tājir/tujjār interchangeably. For the different roles and practices of sarrāfūn and tujjār in the Ottoman Empire, see Cezar, ‘The Role of the Sarrafs’, pp. 62–63. On tujjār and sarrāfūn in late Qajar Iran, see Mansura Ittihadiyya (Nizam Mafi), Inja Tihran ‘Ast . . . Majmua‘-i Maqalat darbarah-i Tihran 1269–1344 H.Q. (Tehran: Nashr-i Ta’rikh-i Iran, 1998), pp. 337–352. 42 The range of loans given by the tujjār is extensive. See, e.g., J.G. Lorimer, Gazetteer of the Persian Gulf, ’Omān and Central Arabia, (Calcutta: Government Printing, 1915), vol. 1, pt. 2, pp. 2227, 2232–2236; Lambton, ‘The Case of Hājjī ‘Abd al-Karīm’, pp. 333ff.; Hanna Batatu, The Old Social Classes and the Revolutionary Movements of Iraq (Princeton, NJ: Princeton University Press, 1978), pp. 292–293; Ahmad Ashraf, Mawani‘i tarikh-yi rushd-i sarmaya-dari dar Iran: dawrah-yi Qajariyya (Tehran: Intisharat-i zamina, 1359/1980), p. 59; Stephen R. Grummon, ‘The Rise and Fall of the Arab Shykhdom of Bushire, 1750–1850’, Ph.D. dissertation, Johns Hopkins University, 1985, p. 245; Marcus, ‘Real Property and Society in the Premodern Middle East’, p. 119; Mishary Abdalrahman al-Nuaim, ‘State Building in a Non-Capitalist Social Formation: The Dialectics of Two Modes of Production and the Role of the Merchant Class, Saudi Arabia, 1902– 1932’, Ph.D. dissertation, University of California, Los Angeles, 1987, pp. 252, 254, 295–296, 309–310; Anders Bjørkelo, Prelude to the Mahdiyya: Peasants and Traders in the Shendi Region, 1821–1885 (Cambridge: Cambridge University Press, 1989), p. 126; Asghar Mahdawi and Iraj Afshar, Asnad-i tijarat-i Iran dar sal 1287 qamri (Tehran: ‘Ilmi wa-farhangi, 1380/2001), p. 134. 43 For cases of salam arrangements in various agricultural and craft branches, see H.W. Maclean, Report on the Condition and Prospects of British Trade in Persia (London: Board of Trade, Commercial Intelligence Committee, 1904), pp. 45, 63; A. Ias, ‘Khlopkovodstvo v Khorosane’, SKD, vol. 5 (1905), pp. 349–350; Lloyd, Report upon the Conditions and Prospects of British Trade in Mesopotamia, 45; Greenfield, Das Handelsrecht . . . von Persien, pp. 47–48; Ahmad Ahmad al-Hitta, Ta’rikh al-zira‘a fi Misr fi ‘ahd Muhammad ‘Ali al-kabir (Cairo: Dar al-ma‘arif, 1950), pp. 100–101; (on the issue described by al-Hitta, see also Kenneth M. Cuno, ‘Commercial Relations between Town and Village in Eighteenth and Early Nineteenth-Century Egypt’, Annales

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with these arrangements, the merchant or his agent reached an agreement with the manufacturer or supplier for the purchase of future commodities, which at the time the agreement was drawn up were still non-existent. The parties agreed on the quantity to be supplied and on the commodity unit price. On drawing up the agreement (either verbally or in writing), the merchant paid the agreed sum in cash, and the payment accorded the transaction binding validity.44 Although most Sunni and Shi‘i fuqahā’ did not consider salam transactions to include interest, provided that the rules laid down by each school were observed,45 in effect, interest was hidden in these transactions, and the parties involved in them were aware of it.46 Interest was included in the salam transaction when the parties agreed on the price of the future commodity unit, since the price was considerably lower than the estimated market price. While the future price was indeed an estimate, it may be reasonably assumed that the merchants were sufficiently experienced in making decisions that would minimise potential losses. A cautious conclusion to be drawn from the hearings held in the various shar‘i courts is that the merchants did not usually err, and there was a considerable positive difference – of tens of per cent – between the agreed price by the merchant and peasant, and the price actually obtained in the markets after the crop had ripened.47 A clear manifestation of the presence of interest in salam transactions can be found in agreements drawn up in various Middle Eastern regions. In Iran, for instance, agreements for the purchase of wool from tribesmen explicitly stipulated that in cases in which the seller or supplier was unable to supply the product, or for some reason did not want to do so, he had the right to cancel the salam agreement on the condition that he returned the sum he received (the principal) with a 12 per cent addition.48 It is therefore no wonder that some borrowers thought that the difference between the two prices was synonymous with interest.49

44

45 46 47

48 49

Islamologiques, 24 [1988], p. 130); Batatu, The Old Social Classes, p. 293; Issawi, The Economic History of Turkey, p. 341; Shields, Mosul, pp. 137–139; James A. Reilly, A Small Town in Syria: Ottoman Hama in the Eighteenth and Nineteenth Centuries (Oxford: Peter Lang, 2002), p. 118 n. 7; Beshara Doumani, ‘Le contrat salam et les relations ville-campagne dans la Palestine ottomane’, Annales, Histoire, Sciences Socials, 61 (2006), pp. 901–924; Kenneth M. Cuno, ‘Contrat salam et transformations agricoles en basse Égypte à l’époque ottomane’, Annales, Histoire, Sciences Socials, 61 (2006), pp. 925–940. See al-Masri, al-Jami‘ fi usul al-ribā, pp. 358–359, 364–365, 369–370; J.D. Latham, ‘Salam’, Encyclopaedia of Islam, 2nd edition, 8 (1995), pp. 914–915; Shaykh ‘Ali al-Khafif, Ahkam almu‘amalat al-shar‘iyya (Cairo: Dar al-fikr al-‘Arabi, 1966), pp. 428–430. For arguments on the legitimacy of the salam arrangement from a shar‘i viewpoint, see Saleh, Unlawful Gain, p. 89. Saleh, Unlawful Gain, pp. 89–96. Consul-General Charles MacLean, ‘Report on the Trade of Khorassan and Seistan for the Year 1890–91’, UK, FO, DCR, AS 976 (1892), p. 6. Barkan and Ayverdi, Istanbul Vakıfları Tahrir Defteri, pp. xxxvii–xxxviii; see also Beshara Doumani, Rediscovering Palestine: Merchants and Peasants in Jabal Nablus, 1700–1900 (Berkeley, CA: University of California Press, 1995), pp. 137–138. Maclean, Report on the Condition, p. 63. Doumani, Rediscovering Palestine, pp. 137–138.

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The Mahkama Faces Interest and Salam Loan agreements are prone to misunderstandings and their execution is often bound up with numerous difficulties, since repayment is sometimes akin to drawing blood from a stone. The court played a leading role in upholding the contractual element of the financial system. Borrowers who did not meet their obligations were brought before a qadi for a hearing after other means had been attempted. The mahkama also heard borrowers’ claims against lenders pertaining to disputes over interest rate levels or over the amounts that had already been paid (or not) to the lender. Disguised interest was not the only reason for misunderstandings and disputes between the parties, but it undoubtedly was a contributory factor, since it was fertile ground for each party’s understanding or interpretation of the agreement as it saw fit. Hence, the sijillāt include numerous descriptions of litigation and rulings by the qadis on matters of loans and interest. Details of these rulings have been provided by historians who studied sijill documents and other sources. A selection of these rulings, relating to litigation heard mainly in shar‘i courts throughout the Ottoman Empire from the end of the sixteenth to the early twentieth centuries, is presented below.50 Obviously, this selection does not constitute a representative sample of all the litigations heard on interest in the various mahkamas. They, however, shed light on issues touching on the conditions of Muslim tujjār business activity, as well as on an important facet of their relations with the ulema.51 Al-Quds, 159952 At the end of March or the beginning of April 1599, Shams al-Din b. Hasan submitted a claim to the mahkama in al-Quds against three of the city’s Jewish residents. He testified that he had loaned them a sum equivalent to 360 gold sultānī coins and demanded that the borrowers repay, on the account of the principal, a sum equivalent to 50 gold sultānī. Shams al-Din did not respond to the qadi’s request that he provide the court with evidence of his claim regarding the sum of the principal (360 gold sultānī). The three borrowers (the respondents) told a different story. According to them, four years before the mahkama hearing they had

50 This selection of cases does not contain any hearings from mahkamas in Qajar Iran, since thus far no nineteenth-century shar‘i court records have been found. James Greenfield, who had extensive knowledge of the Iranian legal system and lived in Iran at the beginning of the twentieth century, wrote that although judges were expected to record court proceedings, in fact there were no legal archives (‘Gerichtsarchive fehlen’) in the country. See Das Handelsrecht . . . von Persien, p. 13. 51 Notably, the focus of the works citing these cases is not the issue of ribā. It seems that no sijill research so far has focused on rulings by qadis regarding interest. 52 According to the sijill of al-Quds. See Amnon Cohen and Elisheva Simon-Pikali, Yehudim be-veit ha-mishpat ha-Muslemi: Hevra, kalkala ve-irgun qehilati bi-Yerushalayim ha-‘Othmanit, hame’ah ha-shesh-‘esrei (Jerusalem: Yad Izhak Ben-Zvi, 1993), p. 32.

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borrowed a sum equivalent to only 120 gold sultānī from Shams al-Din. Later in the hearing, according to the court records, they said that “Each year he would calculate 13 [coins] for 10 [coins that they borrowed from him] and take [this] from them [as] interest”.53 Hence, the lender charged the borrowers interest at an annual rate of 30 per cent. The borrowers, too, had no evidence on which to base their case. At the qadi’s behest, the three “swore by Allah the magnified”54 to the veracity of their statement. Shams al-Din’s testimony that he gave a substantial loan to non-Muslims for a protracted period without charging interest did not appear credible to the qadi, and therefore he accepted the version of the three borrowers. Once the question of the size of the principal was clarified, the borrowers attacked the rate of interest, claiming that the lender charged them an annual interest rate of 30 per cent. Although they did not specifically state that the lender charged them compound interest on the debt, a calculation using this formula for a four-year period comes to a total of 360 gold sultānī (a principal of 120 plus 240 interest). Notably, it is clear from the hearing that the lender did not contend that he never demanded monies originating in interest payments. The borrowers, who had prepared their appearance before the qadi properly, presented a copy of a fatwa written by the mufti Jarallah b. Abu Lutf on the prohibition of charging interest. That ‘ālim reiterated the basic approach of the majority of fuqahā’, i.e., any addition to the principal is expressly forbidden: “ . . . [the qadi] will order the man [the lender] to take the sum of his principal [only], since the addition is forbidden; should he [the lender] not do so, then he [the qadi] will have him flogged, punished and humiliated . . . ”.55 Despite these unambiguous terms, the qadi could have approved an interest rate of 10 or even 15 per cent, since the Ottoman criminal code promulgated throughout the provinces of the Ottoman Empire over 50 years earlier permitted the collection of such rates.56 At the conclusion of the hearing, however, the qadi ruled that the borrowers were obliged to repay only the principal. He exempted them from any additional payment and even stipulated that if the lender “had taken more than this [the sum of the principal], he must return it to them”.57 From the information imparted by the lender, it appears that over the years preceding the mahkama hearing he had indeed collected substantial sums as interest. If the borrowers ultimately managed to compel him to implement the verdict, then for him this transaction was not a success. He surely did not expect this ruling by the qadi when he decided to take the three borrowers to court.

53 54 55 56 57

Ibid. Ibid. The brackets appear in the Hebrew translation, ibid., p. 33. Heyd, Studies in Old Ottoman Criminal Law, p. 25. Cohen and Simon-Pikali, Yehudim be-veit ha-mishpat ha-Muslemi, p. 33.

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Trabzon, 163958 In May 1639, a number of peasants from the district (qadā) of Maçuka filed a claim in the Trabzon mahkama against Mehmet, also known as Zorbaci. According to the peasants, they borrowed 10 kurūş from Mehmet but when they came to repay the loan (the elapsed time is unclear) he demanded 24 kurūş. The borrowers gave him this sum (the principal plus interest), but later approached the qadi claiming that the interest demanded and received by Mehmet contravened shar‘i law and that the entire affair constituted an act of oppression (ta‘addī). In his defence, Mehmet denied the charge and claimed that he had loaned them 24 kurūş from the outset, i.e., he had received only the principal and that in fact he had not collected any sum whatsoever as interest. Mehmet had no evidence proving that he had loaned them the sum he cited. The qadi, for his part, was persuaded that the peasants had told the truth and obliged him to give them back 12 kurās. In other words, by accepting the borrowers’ version, the qadi approved the principal and the payment of interest of 2 kurūş to the lender. The interest rate allowed by the qadi is unknown, since the time elapsed until the repayment of the loan is unclear. Assuming that it was repaid after a year, the interest rate approved amounted to 20 per cent, which as far as is known was the prevailing rate in a number of Anatolian provinces at the time. According to the criminal code of 1541, the qadi could have imposed a heavy penalty on the lender because of his rapacity. It does not appear that such a penalty was imposed. Aleppo, 164159 In January 1641, before the Aleppo mahkama, Safa bint ‘Abdallah filed a suit against Mustafa Çavus b. Darvis Mehmet Effendi for a debt of 120 kurūş – the balance of the principal of 200 kurūş. In the course of the hearing before the qadi, it transpired that Mustafa had already repaid the sum of 140 kurūş to Safa. She did not deny this but claimed that of this sum only 80 kurūş were used for the repayment of the principal, and that the balance paid to her by Mustafa, 60 kurūş, was interest on the loan. Hence, according to her, the balance of the debt stood at 120 kurūş. As the time that elapsed from the date of the loan is unknown, the interest rate cannot be determined. The qadi totally rejected the charging of interest and obliged the borrower to repay only the balance of the principal – 60 kurūş – i.e., he recognised the whole sum that had been transferred to the lender as repayment of the principal. Safa bint ‘Abdallah was not awarded any consideration for the 58 Trabzon sijill cited in Ronald Jennings, ‘The Society and Economy of Maçuka in the Ottoman Judicial Registers of Trabzon, 1560–1640’, in Anthony Bryer and Heath Lowry (eds.), Continuity and Change in Late Byzantine and Early Ottoman Society (Birmingham: The University of Birmingham Centre for Byzantine Studies, 1986), p. 146. Referring to cases in the mahkamas of Istanbul and Galata in the seventeenth century, Kuran writes: ‘An independent-minded judge could invalidate an interest-based contract.’ See The Long Divergence, p. 150. 59 Aleppo sijill cited in Masters, The Origins of Western Economic Dominance, p. 160.

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loan she provided, and actually incurred a loss, as the suit entailed both direct and indirect expenses. Aleppo, 1749–177160 Between 1749 and 1771, at least five different borrowers approached the Aleppo mahkama with complaints of interest payments they had been charged, and which had in fact been handed over to the lenders. The annual interest rates ranged from 17 or 20 per cent, through to 33 or 45 per cent, through to an incredible 224 or 300 per cent. In all these cases, including the loan bearing 20 per cent, the court rejected the charging of interest and demanded that the lenders return the entire sum collected as interest payments to the borrowers. It is unclear what caused the borrowers to approach the mahkama after they had already paid the interest. Perhaps they knew or assumed that the particular qadi/s sitting in judgement at that time systematically rejected claims for payment of interest and could be expected to order the return of the sums collected, especially in cases in which the lenders went too far in their rapacity. Lucknow, 180661 In 1806, the mahkama in Lucknow, the capital of Awadh, heard a prolonged and wearying suit pertaining to a particularly large loan, its repayment and the accumulated interest. The case went back to the end of the 1780s when one of Iran’s biggest merchants of the time, Hajji Karbala’i Muhammad Tihrani,62 loaned a sum of 228,436 rupees to Hasan Riza Khan, chief minister of Awadh. This sum was part of a donation totalling 700,000 rupees by the government of Awadh to finance the excavation of a canal between the central Euphrates and the city of Najaf. The canal was indeed excavated and water flowed through it to the benefit of the citizens of Najaf, but the loan, which should have been repaid in 1792, was not redeemed. It was a large sum and the merchant-lender repeatedly entreated the chief minister of Awadh to uphold his undertaking, but to no avail. In time, both the merchant, Hajji Tihrani, and the chief minister, Hasan Riza Khan, passed away, and the huge debt remained. In 1806, 14 years after the loan should have been repaid, and after an approach was made by the ruler of Iran, Fath ‘Ali Shah, to the nawab of Awadh, Sa‘adat ‘Ali Khan, requesting him to act on the repayment

60 Aleppo sijill cited in Marcus, The Middle East on the Eve of Modernity, p. 185. 61 See Juan R.I. Cole, ‘‘Indian Money’ and the Shi‘i Shrine Cities of Iraq, 1786–1850’, Middle Eastern Studies, 22 (1986), pp. 463–464. 62 The 1780s witnessed increased commercial activity by Iranian Muslim merchants in a number of regions of India, and communities of these merchants were established or grew considerably in Bombay, Madras, Calcutta and other cities. In 1830, the tujjār of Calcutta petitioned the ruler of Iran, Fath ‘Ali Shah, to appoint a malik al-tujjār from among them. See Grummon, ‘The Rise and Fall of the Arab Shaykhdom of Bushire’, pp. 232–234.

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of the loan, the affair was brought before the shar‘i court in Lucknow. In addition to the principal, Mirza Riza, son of the Iranian merchant, claimed 150,010 rupees as interest on the principal accrued over nearly two decades. This sum represents an average nominal interest rate of about 3 per cent, low by any yardstick. The judge (the mufti of Lucknow) denied the suit, including the demand for repayment of the principal, for several reasons, one of which was that the taking of interest was prohibited by the shari‘a.63 As far as Mirza Riza was concerned, the qadi had deprived him of 378,446 rupees (the principal plus interest), to which he believed he was entitled. Whether or not he or his heirs pursued the struggle to obtain this sum is unclear. There can be no doubt, however, that the judge imposed a heavy penalty on Tihrani’s heirs, inter alia, for the transgression of the father who provided a loan with forbidden interest.64 Beirut, 184665 In December 1846 a claim for the payment of the balance of a loan in the sum of 87,029 kurūş was filed in the Beirut mahkama on behalf of ’Amir Khalil b. Bashir Shihab (the claimant) against the Dumani family (the respondents). From the sijill records it transpires that the claimant provided the respondents with a loan in the sum of 110,000 (or 100,000) kurūş. When the agreement between them was drawn up, both parties agreed on an addition to the principal of 87,029 kurūş. Needless to

63 Cole’s version is based on documents he found in archives in New Delhi. A different version of the reasons for denying the demand for repayment of the principal and interest is given in a dispatch of November 1806 from the Awadh chief minister to the British authorities in Fort William, deposited in the India Office Records in London. It states: ‘ . . . the year before last [1804] the cause [sic] was brought forward in the Court . . . the Haujee’s Vakeels [representatives of the late Hajji Karbala’i Tihrani] having failed to produce the Documents which are necessary to establish the validity of the Haujee’s Claim according to Law, the proceedings of the cause have been suspended.’ Apart from this, the chief minister states that the lender’s heirs cannot be compensated since the borrower’s debts were several times greater than the value of the assets he left on his death, which had already been divided among other creditors, and no property remained with which to compensate the lender. It is most likely that in addition to the mufti’s ruling there were other reasons for the loan not being repaid. See: The Nabob Vizier to John Monckton (received 14 November 1806), no. 30 in Fort William, 11 December 1806, P/117/58, India Office Records. 64 Senior ulema manifested their objection to ribā also while sitting in non-shar‘i courts. In late 1909, the mujtahid of al-Khariqan (Iran), appointed as an assessor at the kārguzār’s majlis in Bushire, refused to approve a debt of 1,436 pounds sterling, charged as interest (Dixons & Co. against the Shabankara brothers), because it is ‘contrary to the law of Islam’. See: ‘Judgment Order’ [translation, enclosure no. 2], in Arthur Trevor to George Barcley, no. 4/164, Bushire, 14 January 1910, FO 248/990, NAUK. For a detailed analysis of the Shabankara case, see Morteza Nouraei and Vanessa Martin, ‘The Role of the Karguzar in the Foreign Relations of State and Society of Iran from the mid-nineteenth century to 1921. Part III: The Karguzar and Disputes over Foreign Trade’, Journal of the Royal Asiatic Society, 16 (2006), pp. 154–157. 65 Beirut sijill cited by Zouhair Ghazzal, The Grammars of Adjudication: The Economics of Judicial Decision Making in fin-de-siècle Ottoman Beirut and Damascus (Beirut: Institut Francais du Proche-Orient, 2007), pp. 187–193.

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say, this amount was in fact the interest on the loan, and the matter was arranged in the accepted form of a ‘dual sale’. Obviously, the term ribā, or any of its legitimate forms, was not mentioned in the court’s records. Unfortunately, because the time span of the loan is not mentioned in the documents, it is impossible to calculate the interest rate. The borrowers (the Dumanis) did not deny their agreement to pay the additional sum at the time the contract was drawn up. However, while they repaid the principal, they adamantly refused to pay any sum whatsoever on account of the interest. For this reason the lender, ’Amir Khalil b. Bashir, petitioned the court to compel the borrowers to honour the agreement. The affair did not end with the qadi’s ruling. It transpires from the sijill records that both parties agreed that the lender would receive, in addition to the principal, the sum of 30,000 kurūş only (instead of 87,029 kurūş), i.e., a third of the claimed amount. The chain of events inside or outside the mahkama that led the parties to reach this compromise agreement is unknown. It may be assumed that both lender and borrowers realised that the qadi would not approve the full sum claimed by the lender, but also that he would not completely acquit the borrowers. It is conceivable that the qadi himself acted, either directly or indirectly, to reach the compromise. Whatever the proceeding, in the end the qadi did not compel the borrowers to honour the agreement undertaken by them, and the lender had to accept an interest rate on the loan far lower than that agreed upon by the parties when the transaction was made. Nablus, 186266 In January 1862 the mahkama of Nablus was called upon to resolve the question of whether the difference between the quantity of produce agreed upon in a salam agreement, and the quantity that the owner of the yield actually transferred to the purchaser after the crop had ripened, constituted interest. On the face of it, the details revealed to the qadi were simple: after receiving payment on account for olive oil, a fellah from the village of Awarta undertook to supply 68 jars of olive oil, once the crop had ripened, to a buyer who paid the advance. The peasant supplied only 42.5 jars and another three uqiyyas and argued in court that the difference between the two quantities, some 25 jars, was in fact interest. Since salam arrangements do not openly include interest charges, it is reasonable to assume that the borrower translated the advance into units of olive oil in accordance with market prices at the time the crop ripened, and reached a quantity of 42.5 jars. The difference between the quantities, according to the borrower, exceeded the principal and should therefore be regarded as interest. Since interest is forbidden, he was, in his view, exempted from supplying additional olive oil. The qadi denied the fellah’s claim and accepted the purchaser’s position, despite the significant

66 Nablus sijill cited in Beshara Doumani, Rediscovering Palestine, pp. 137–138.

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difference between the agreed price and the price actually obtained on the market. He did not view this difference as interest, and therefore ruled that the buyer was entitled to the full quantity of olive oil as agreed between the parties when the agreement between them was drawn up. Al-Quds, 188767 In September 1887 a claim was filed before the al-Quds mahkama against the heirs of ‘Abd al-Rahman Hadutha, who had died some time earlier, concerning a loan that was given to the deceased in June 1884 by Ya‘aqub b. Malka al-Mughrabi, a subject of France. The heirs were sued for repayment of the loan, in the amount of 25 Ottoman gold līras and 126 French gold liras. The latter sum included the interest on the loan: 2.5 French gold līras. It appears that this last amount represented the balance of interest charges and not the full charge, so it is impossible to accurately calculate the interest rate. Three Muslim witnesses were summoned before the court and confirmed the lender’s version. The qadi ruled that the heirs must repay the principal in full. However, although more than three years had elapsed from the time the loan was given, he exempted the heirs from paying the interest (or more precisely, the balance of the interest) claimed by the lender. It is unclear whether the lender was obliged to pass on to the heirs sums paid on account of the interest in previous years. Al-Salt, 190268 In February 1902, Maryam al-Fakhuri, a widow, petitioned the mahkama in al-Salt concerning a loan that her late husband had taken from Mafdi al-‘Id, a merchant, four years earlier. The loan totalled 60 riyāl majīdī and was originally given as an advance against a quantity of raisins that al-Fakhuri was to supply to the merchant at a later date. Two years after the borrower’s death, and after part of the raisins had been supplied to the lender, the parties agreed that the balance of the debt would be paid in cash, and indeed, up to the date of the hearing the widow had repaid 90 per cent of the agreed sum. The lender, however, demanded that in addition to repayment of the principal, a further cash payment should be made. As revealed in the widow’s testimony, the additional payment was in fact interest at a rate of 40 per cent in annual terms (an additional 6 riyāl majīdī every six months on a debt of 30 riyāl

67 al-Quds sijill cited in Amnon Cohen, Elisheva Ben-Shimon-Pikali and Eyal Ginio, Yehudim be-veit ha-mishpat ha-Muslemi: Hevra, kalkala ve-irgun qehilati bi-Yerushlayim ha-‘Othmanit: ha-me’a ha-tsha‘-‘esrei (Jerusalem: Yad Izhak Ben-Zvi, 2003), p. 435 n. 2. 68 al-Salt sijill cited in Eugene L. Rogan, ‘Moneylending and Capital Flows from Nablus, Damascus and Jerusalem to Qadā’ al-Salt in the Last Decades of Ottoman Rule’, in Thomas Philipp (ed.), The Syrian Land in the 18th and 19th Century: The Common and the Specific in the Historical Experience (Stuttgart: Franz Steiner Verlag, 1992), pp. 254–255.

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majīdī). The lender admitted that the additional sum was a substitute for the raisins he was supposed to receive together with the repayment of the principal. The qadi accepted the argument that the additional sum was interest and was therefore prohibited. He obliged the widow to pay the cash balance to the lender and relieved her of any additional payment, i.e., he did not approve payment of the interest. The qadi went even further and obliged the lender to return to the widow, in cash, the value of the produce he had received over the years as interest. In the end, four years after the agreement between the parties had been drawn up, the merchant, Mafdi al-‘Id, was left with the value of the advance he had given, partly in kind and partly in cash. It seems that he did not gain any positive return from this transaction, and if the direct and indirect costs connected with the court hearing are included, his return was in fact negative (negative interest).

The Mahkama, the Tujjār and Uncertainty Despite the limitations of the sample,69 one major conclusion may be drawn: from the lenders’ standpoint, giving a loan entailed an element of uncertainty originating in the rulings of qadis who rejected the charging of interest. An examination of the various aspects of uncertainty in the sphere of Islamic moneylending leads to the following conclusions: 1.

Of the various possible factors of uncertainty in moneylending in Muslim communities, a qadi’s rejection of interest was a most threatening possibility for the lender, as it was likely to have the far-reaching effect of causing a chain reaction among borrowers. In the wake of a ruling negating interest, borrowers would be likely to stop payment of the interest and perhaps even repayment of the principal. With regard to loans already given, borrowers in the Ottoman Empire had no means of appealing against the ruling, as an appeal instance did not exist. Only in Iran did the lender have the option of

69 The question of what a researcher is permitted to conclude from an isolated case, or ‘small-N cases,’ has engaged a number of comparative sociologists. In contrast to conventional wisdom, these researchers showed that there are a considerable number of subjects and fields in which an isolated case can make an important contribution in refuting the validity of prevailing theories, or in laying the foundations for new theories or generalizations. Particularly enlightening in the present context is Dietrich Rueschemeyer’s analysis of three well known studies by historians and sociologists (E.P. Thompson, The Making of the English Working Class [1978]; Robert Michels, Political Parties . . . [1911/1999]; Seymour M. Lipset, Martin Trow and James Coleman, Union Democracy . . . [1956]), whose focus on a single case or issue changed commonly held perceptions or approaches among historians and sociologists alike. See Dietrich Rueschemeyer, ‘Can One or a Few Cases Yield Theoretical Gains?’, in James Mahoney and Dietrich Rueschemeyer (eds.), Comparative Historical Analysis in the Social Sciences (Cambridge: Cambridge University Press, 2003), pp. 305–336. See also Rebecca Jean Emigh, ‘The Power of Negative Thinking: The Use of Negative Case Methodology in the Development of Sociological Theory’, Theory and Society, 26 (1997), pp. 649–684. Additionally, it is reasonable to assume that the sijillāt contain a considerable number of cases of invalidation of interest that have yet to be uncovered.

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2.

3.

4.

taking the case to an ‛urfī court70 after a decision had been handed down in the shar‘i mahkama.71 Clearly, in some cases the lenders were taken by surprise by the position of the qadi before whom they appeared. It is unreasonable to assume that they would have submitted their claim to a judge who was known to view the charging of interest as a grave religious transgression. Surprise is one of the elements characterising a situation of uncertainty. Lenders realised that in many cases the qadis did not deny the charging of interest per se, but only that which was over and above the rates set by the Ottoman authorities, and which were also prevalent in Iran (10–20 per cent). It would seem that this position of approving the charging of interest, but not above ‘reasonable’ rates, was widespread among the qadis. Its aim was to curb rapacious lenders and protect borrowers.72 Conceivably, the qadis approved these interest rates because they realised they had no other choice but to adopt a compromise on interest, since the public was unable to uphold the shar‘i prohibition; or, they followed central government regulations, particularly in those periods when the government was able to impose its authority. These two factors surely played a role in the qadis’ decisionmaking process. Moreover, in the Ottoman provinces in Anatolia in which the Hanafi school held sway, these factors were reinforced by the more liberal Hanafi attitude towards the charging of interest. No information is available regarding the lenders’ reaction once they heard they had lost the return on their investment either wholly or partially. We can presume, however, that if they continued providing loans to all comers, then the loan terms would now be different. The lenders could have compensated themselves for the damages they incurred due to the reduction or cancellation of past interest charges and the possible cancellation of future charges by raising interest rates above the level that existed up to the time of the cancellation.73 On the face of it, this might be a self-defeating reaction,

70 Rulings of the ‘urfī court were based on customary laws, and the judge was a high-ranking bureaucrat (e.g., governor of a province or a major town). 71 On the two legal systems in Iran, shar‘i and ‘urfī, see A. Sepsis, ‘Quelques mots sur l’état religieux actuel de la Perse’, Revue de l’Orient, de l’Algérie et des colonies, 3 (1844), p. 104; James Basset, Persia: The Land of the Imams (New York: Charles Scribner’s Sons, 1886), p. 281; H. Picot, ‘Notes on Persian Administration’, Tehran, 31 August 1895, Appendix 1 in ‘Memorandum by Sir M. Durand on the Situation in Persia’, Confidential, Tehran, 27 September 1895, FO 881/6704, NAUK; Tomar, Ekonomicheskoe polozhenie Persii, p. 115; Greenfield, Das Handelsrechet . . . von Persien, pp. 10–13. 72 Qadis who protected borrowers from exorbitant interest rates were honoured by the people. For an example with respect to an Ottoman qadi who served in Damascus in the late sixteenth century, see Michael Winter, ‘Ottoman Qadis in Damascus in the 16th–18th Centuries’, in Ron Shaham (ed.), Law, Custom, and Statute in the Muslim World (Leiden: Brill, 2007), p. 97. 73 For a similar conclusion, see Kuran, The Long Divergence, pp. 150–151

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5.

for once the interest rates were raised, the borrowers would return to the mahkama, and with a vengeance, fully expecting the qadi to cancel the high charges.74 Yet, recurring cancellations of interest charges would, in the end, cause the diminishment of the supply of loans by Muslim and perhaps even non-Muslim lenders, or arrangements bypassing the mahkama ruling between lender and borrower would be put in place, which in turn would protect the lender from the qadi’s ruling. Indeed, it would seem that certain lender-borrower arrangements which included devices to disguise interest charges were intended to protect the lender against cancellation. One example is the persistence of some lenders at mahkama hearings who claimed the equivalent of the principal from the borrowers, while in fact they included the interest in the sum of the original loan. It is probable, therefore, that the mahkama’s struggle against interest that was intended, inter alia, to warn lenders against imposing exorbitant interest rates, resulted in rates which were in fact higher than those prior to the rulings against interest. Conceivably, the campaign against interest achieved the opposite result to that sought by the anti-interest qadis. The contention between lenders and borrowers at the mahkama was not the only struggle in which ribā played a central role. Though on a different level, another battle was being conducted between ulema and tujjār. This struggle was ambivalent and mainly covert, inasmuch as in many matters not touching upon interest the ulema and tujjār were in accord and had considerable interests in common. On the matter of interest, however, the tujjār evoked sharp criticism on the part of senior ulema for the sin of robbing the poor. Yet the ulema could not ignore the reality that the donations made by the tujjār to the institutions run by them, and the khayrī waqfs (blocked properties whose usufruct financed public institutions or services) they established, relied, inter alia, on profits from interest-bearing loans. The conduct of the qadis in ribā hearings, therefore, must be examined in the context of this tension between ulema and tujjār. In the arena of a mahkama hearing on matters of interest, the ulema held the upper hand. Were the harsh rulings on interest a way to indicate the high dependence of the tujjār on the ulema’s goodwill? Did the qadis exploit these cases to settle accounts with the tujjār against a backdrop of disputes on other matters?75

74 To simplify the discussion here I have assumed that each population group had similar access to the shar‘i courts. However, the accessibility of different groups was surely not identical. For instance, the access of urban populations to the mahkama was immeasurably easier than that of rural populations. Moreover, it may also be assumed that the level of the interest rates themselves was similarly influenced by the degree of accessibility to the court. 75 Along with common interests, on the one hand, and mutual dependency on the other, the relations between senior ulema and the tujjār were sometimes tense and even hostile. For an example of bitter confrontation between the two groups, see Gad G. Gilbar, ‘The Rise and Fall of the Tujjār Councils of Representatives in Iran, 1884–85’, Journal of the Economic and Social History of the Orient, 51 (2008), pp. 661–665. See Chapter 11.

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To conclude this discussion of uncertainty in financial transactions, a reference to Max Weber’s comments on Muslim law is instructive. Weber made a distinction between rational-formal legal systems and those that do not fit these definitions (‘substantive’ systems, in Weber’s terminology). Rational systems are built upon a comprehensive and extensive formal and logical legal corpus, such as that of Roman law. Significantly, they are not open to casual influences of any kind. According to Weber, Muslim law does not meet these criteria; it is characterised by ‘Kadijustiz’ (qadi’s justice), i.e., rulings that are influenced by the conditions and circumstances in which the hearing is held. Such a system allows considerable space for the judge’s discretion, for in making his decision he does not have a clear, comprehensive and binding corpus of law at his disposal.76 Weber’s analysis of the dichotomy between rational-formal legal systems and substantive-irrational systems, and his perception of the Muslim legal world and how qadis functioned, are conceptually weak and are based on a slim body of research about Islamic law that was available when his ideas on economy and law were crystallised in the 1910s. Weber’s approach and conclusions regarding Kadijustiz have been discussed and criticised extensively in recent decades from varied historical (positivist, Marxist, post-colonial, and Saidist) and anthropological points of departure.77 In the context of this study the works of Ronald Jennings, David Powers and Irene Schneider are particularly relevant. Based on mahkama and other documents, these historians have shown that decisions by qadis in given places and periods were consistent and were based on precedents and judicial deliberations.78 Abraham Udovitch added an important aspect to this discussion 76 Max Weber, Wirtschaft und Gesellschaft: grundriss der verstehenden Soziologie, (ed.) J. Winckelmann, 4th ed. (Tübingen: J.C.B. Mohr, 1956), vol. 2, pp. 471, 571–572. 77 See, inter alia, Maxime Rodinson, Islam et capitalisme (Paris: Editions du Seuil, 1966), pp. 117– 119; Bryan S. Turner, Weber and Islam: A Critical Study (London: Routledge and Kegan Paul, 1974), pp. 107–121; Ronald C. Jennings, ‘Kadi, Court and Legal Procedure in 17th C. Ottoman Kayseri’, Studia Islamica, 48 (1978), pp. 137 n. 1, 139–140 n. 1; A. Udovitch, ‘Islamic Law and the Social Context of Exchange in the Medieval Middle East’, History and Anthropology, 1 (1985), pp. 462–464; Lawrence Rosen, The Anthropology of Justice: Law as Culture in Islamic Society (Cambridge: Cambridge University Press, 1989), pp. 17–19, 44–45, 55, 66; David S. Powers, ‘Fatwās as Sources for Legal and Social History: A Dispute over Endowment Revenues from Fourteenth-Century Fez’, al-Qantara, 11 (1990), pp. 326–330; Irene Schneider, ‘Die Merkmale der idealtypischen qādī-Justiz-Kritische Anmerkungen zu Max Webers Kategorisierung der islamischen Rechtsprechung’, Der Islam, 70 (1993), pp. 145–159; Haim Gerber, State, Society and Law in Islam: Ottoman Law in Comparative Perspective (Albany: SUNY Press, 1994), pp. 25ff.; David Powers, ‘Kadijustiz or Qādī-Justice? A Paternity Dispute from FourteenthCentury Morocco’, Islamic Law and Society, 1 (1994), pp. 365–366; Patricia Crone, ‘Weber, Islamic Law, and the Rise of Capitalism’, in Toby E. Huff and Wolfgang Schluchter (eds.), Max Weber and Islam (New Brunswick: Transaction Publishers, 1999), pp. 247–272; Leslie Peirce, Morality Tales: Law and Gender in the Ottoman Court of Aintab (Berkeley: University of California Press, 2003), pp. 121–122; Iris Agmon, Family & Court: Legal Culture and Modernity in Late Ottoman Palestine (Syracuse: Syracuse University Press, 2006), pp. 169–171. 78 Jennings, ‘Kadi, Court and Legal Procedure’, pp. 137 n. 1, 139–140. n. 1; Powers. ‘Kadijustiz or Qadf-Iustice?’, pp. 365–366; Schneider, ‘Die Merkmale’, pp. 145–159.

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when he pointed out the significant role of local custom as a source of law in medieval Muslim communities.79 With regard to shar‘i court rulings on the charging of interest, it is not the absence of a binding law that may explain the wide range of rulings, but the deepseated tension created by the existing religious law for a considerable number of qadis – tension between a normative ultimate commandment on the one hand, and a non-shar‘i corpus (the Ottoman qānūn) or customary law, along with the constraints of everyday life, on the other. The wide range of rulings by the qadis resulted not from the absence of a mandatory precept, but, on the contrary, from its totality and severity. Thus, the wide range of rulings ought not to be ascribed to arbitrariness on the part of the qadis. For many of them, the dilemma they faced from a religious, ethical and practical standpoint was akin to a millstone. However, on a matter relevant to the present discussion on interest, Weber made an important, if implied, contribution. The heightened element of uncertainty among Muslim lenders in given periods and places may have discouraged local Muslim investors from developing modern credit institutions, a process integral to the growth of capitalism in the modern era. In the context of qadis’ rulings on interest and their implications for the development of capitalist institutions, there is greater insight in Weber’s observation and analysis than has been recognised.

Summary The financial activities of the Muslim big merchant-entrepreneurs were conducted despite the Quranic prohibition against imposing interest on loans. Muslims, primarily the ulema, encountered a certain cognitive dissonance: while charging ribā is a grave sin, taking interest-bearing loans was frequently an unavoidable necessity, and, moreover, interest was permitted by non-shar‘i legal systems such as the Ottoman qānūn and the Iranian ‘urfi courts. Qadis had to decide whether their aversion to interest charges would influence their rulings, while echoes of the desperate financial needs of both commoners and high-ranking officials could be clearly heard in the mahkama courtroom. Along with those judges who approved interest charges and high interest rates in their rulings, there were qadis who, when sitting in judgement, wished to adhere to the Quranic prohibition and ordered a reduction in the interest rate. Even though the number of cases of reduced interest charges found in the sources thus far is relatively small, they reveal that giving loans was connected with a degree of uncertainty that went beyond the common risks that lenders take upon themselves when granting loans. This uncertainty regarding return on investment (interest) seems to have caused the raising of interest rates. If great uncertainty is added to the familiar risks, the lenders reckoned, it is only proper that they compensate themselves by setting

79 Udovitch, ‘Islamic Law and the Social Context of Exchange’, pp. 462–464.

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higher interest rates. Thus, it is possible that the outcome of the ulema’s struggle against interest was an inevitable rise in the interest rates imposed by the lenders on the borrowers. While during prolonged periods, including most of the first half of the nineteenth century, the main threat against the property and incomes acquired by the big merchant-entrepreneurs came from the central government, a certain degree of harm to their assets was imposed by the ulema as well, and although it was limited to fluid investments (loans and credit), it touched on a vital aspect of the business world of the tujjār.

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4 IMAGES OF TUJJĀR Between Shechrazad and Ibn Khaldūn

Introduction: Images and Merchants What was the image of the Muslim big merchant in Iran and the Ottoman Empire in the second half of the nineteenth century? More particularly, how were they and their occupation perceived by the rulers and upper echelons of the bureaucracy in those countries, since to a large degree the scope of wholesale and long-distance trade was influenced by the rulers’ decisions? While nothing spoken or written by the Qajar or Ottoman rulers regarding how they perceived the tujjār is available to the researcher, nevertheless, we are not completely in the dark. Works written in the Islamic countries for a wide audience of listeners or for selected groups of readers referred, inter alia, to the tujjār. These works were written or formulated mainly during the fourteenth and fifteenth centuries, but were well known in succeeding centuries, including in the second half of the nineteenth century. I refer to a well-known story in Alf Layla wa-Layla1 and to several chapters in Ibn Khaldūn’s al-Muqaddima.2 These texts are unique in the way they constructed the tujjār’s image, and might constitute the best means we have of learning about the image of the Muslim big merchants in recent centuries. Historically, big merchants ascribed great importance to their public image, not only because image could determine socio-economic status, but also – and perhaps mainly – because image could determine the fate of the big merchant’s business. To a large extent, his ability to close transactions was conditional upon the faith his partners, suppliers and clients had in him. A merchant with a tarnished 1 Alf layla wa-Layla, Cairo: XXX, The history of the various editions of Alf Layla wa-Layla is a fascinating story in itself. See “Textual History” in Ulrich Marzolph and Richard van Leeuwen (eds.), The Arabian Nights Encyclopedia, Santa Barbara: ABC-Clio, 2004, vol. 2, pp. 713–716; Robert Irwin, The Arabian Nights: A Companion, London: Tauris Parke, 2005, 1–62. 2 Ibn Khaldūn, Muqaddimat Ibn Khaldūn, Ṣaydā: al-Maktaba al-‘Aṣriyya, 1995 (hereafter: Ibn Khaldūn). English translation: Ibn Khaldūn, The Muqaddimah: An Introduction to History, translated from the Arabic by Franz Rosenthal, 3 vols., Routledge, Kegan Paul, 1958 (hereafter: Rosenthal trans.).

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image would encounter difficulties in maintaining – not to mention developing – his business. Big merchants thus cultivated their good name and labored to maintain it.3 The big merchants’ awareness of the importance of a positive image, however, placed them on the horns of what is known as ‘the traders’ dilemma’.4 On the one hand, to succeed in business in the long term, merchants charge their customers a substantial additional sum to the price they paid for the product. This addition is supposed to compensate them for losses incurred in their business, for the high risks they take, and for the high costs of closing complex deals. This difference – the ‘jobber’s turn’ – is often resented by the consumers, who view it as a reflection of the merchants’ avarice, especially when it reaches many tens or even hundreds of percent. Still, the merchants are aware of the importance of a positive public image, on which their business largely depends. The crux of the dilemma, therefore, is that the merchant strives to attain two contradictory objectives: large profits, while maintaining a positive public image of honesty and integrity. The dilemma intensifies further when a main function of the big merchants is added (before the appearance of private and public modern banks): extending credit and providing interest-bearing loans. Aware of the dilemma, the big merchants initiated various measures to enhance their image. One was to donate a relatively small part of their profits either directly, or by setting up trusts, for public causes. Another way was to furnish substantial loans to elite groups that held political and social power. In other words, the merchants believed that by channeling a small part of their capital as donations or loans to various social groups they could ease the dilemma that beset them. Yet another way of molding a positive image was through support of the arts. The merchants directly or indirectly supported the production of works which ascribed noble qualities to them. In some cases merchants themselves wrote about their enterprises and their contribution to society.5 This does not mean that the big merchants’ image was necessarily uniform – or negative – in all cultures. Perceptions of trade and merchants in the Islamic tradition (in the Qur’an and hadīth) and in works of the fuqahā’ are varied. On the one hand, a number of sūras reflect a positive attitude to those engaged in commerce.

3 The attitude that a good reputation is preferable to great wealth, or that maintaining one’s good name is preferable to completing a dubious transaction is manifested in maxims and proverbs in many cultures (e.g., “al-sīt khayr min duhn al-tayyib” and “Bona opinio hominum tutior pecunia est”). 4 Hans-Dieter Evers, “The Traders’ Dilemma: A Theory of the Social Transformation of Markets and Society” in idem and Heiko Scharder (eds.), The Moral Economy of Trade: Ethnicity and Developing Markets, London: Routledge, 1994, pp. 7–14. See also Tilman Schiel, “The Traders’ Dilemma: The Perspective of the longue durée” in ibid, pp. 15–26. 5 See, for example, Christian Bec, Les marchands écrivains, affaires et humanisme à Florence, 1375– 1434, Paris-La Haye: Mouton & Co., 1967, pp. 53 ff. Bec discusses the various works written by the merchants of Florence between 1375 and 1434.

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The fact that the Prophet permitted trade during the hajj and did not demand the closure of markets on Fridays is perceived as attesting to this positive spirit.6 In formulating the attitude to merchants in the Muslim tradition, great weight was also accorded to the fact that the Prophet himself, his first wife Khādija, and several notable ashāb, such as Abū Bakir and ‘Umar bin al-Khattāb, were merchants for many years and were au fait with the world of commerce. Several fuqahā’ in the ninth and tenth centuries, among them Abū ‘Uthman al-Jāhiz (781–869), ascribed great importance to engaging in trade and noted that merchants were respected due to their occupation.7 On the other hand, both in the Islamic tradition itself and in the writings of several leading ‘ulamā’, trenchant criticism was leveled at merchants based, inter alia, on negative images. Criticism in the Qur’an regarding commerce focuses on the allegation that merchants are liable to transgress by deceiving their customers, particularly with respect to weights and measures, and that engaging in commerce is liable to lead to non-observance of important commandments such as prayer and giving charity.8 A graver allegation appears in a hadīth which attributes the saying that merchants are liars to the Prophet.9 Among the fuqahā’, Abū Hāmid Muhammad al-Ghazālī (1058–1111) was clear in his reservations about the tujjār’s conduct, casting doubt on the moral legitimacy of their quest for maximal profits. He believed that the goal of attaining maximal profit from transactions was implicitly equivalent to avarice.10 The broad spectrum of attitudes toward images of the tujjār in Muslim culture is clearly manifested in two works that had great influence on listeners and readers in recent centuries. At one end of this spectrum is Alf Layla wa-Layla, which contains a number of stories featuring tujjār as the protagonists.11 Although there is no prototypical big merchant in these stories, there are a number of positive attributes that characterize tujjār generally: business initiative, risk-taking, arduous journeys, support of colleagues in times of trouble, and generosity, though also cunning and recklessness. Of all the stories, “The Tale of ‘Alī, the Cairene Merchant” best illuminates several of these attributes and creates an image worthy of detailed discussion. At the other end of the spectrum of attitudes and images is Ibn Khaldūn’s al-Muqaddima. While only a small part of this work is devoted to a discussion of the tujjār, his negative attitude to them is closely tied to his perceptions of society and history generally. 6 H. Heffening, “Tijāra”, EI 2nd ed., 10: 466. 7 Abū ‘Uthmān ‘Umar al-Jāhiz, al-Tabbasur bi’l tijāra, Cairo: Matba‘a al-Rahmāniyya, 1935, p. 40; idem, Rasā’il al-Jāhiz, XXX, 1987, pp. 241–242. 8 Heffening, “Tijāra,” 466. 9 Heffening (quoting Ahmad b. Hanbal), “Tijāra,” 467. 10 Abū Hāmid al-Ghazālī, Ihyā ‘ulūm al-Dīn, vol. 2, p. 73. 11 See “Merchant” in The Arabian Nights Encyclopedia, vol. 2, pp. 642–646.

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Alf Layla Wa-Layla: The Tale of ‘Alī, the Cairene Merchant12 The main points of this instructive tale may be summarized as follows: Hasan, a successful precious-stone merchant in Cairo, possessed great wealth and considerable property. His son ‘Alī was given a fine education. Before his death Hasan adjured his son to observe the religious commandments strictly, give generously to charity, and associate with honest men. But ‘Alī, upon inheriting his father’s property, joined up with the sons of wealthy merchants who spent their time enjoying the pleasures of this world. In a few years ‘Alī had squandered the great wealth he had inherited, and he, his wife and children were left destitute. His request for help from his wealthy philandering friends was turned down. In the depths of crisis, he decided to make a sharp turnabout in his life. Penniless, he left his home to seek his fortune outside Egypt. From Bulaq he sailed for Damietta, and thence to Damascus. In the course of his long journey he was supported and aided by merchants whom he did not know. In Damascus he joined a caravan to Baghdad. When it was some distance from the city, the caravan was attacked by thieves, and many of the travelers were killed. ‘Ali managed to escape and reach Baghdad, where he posed as a wealthy merchant whose caravan of merchandise was on its way to the city. Until his merchandise arrived, one of Baghdad’s wealthy merchants, who did not know ‘Alī, cared for all his needs and invited him to lodge in one of the houses he owned. The house Alī chose was, however, cursed: anyone lodging there was found dead. Undeterred by this danger, he lay down to sleep, whereupon a jinn appeared, addressed him by name, and asked him if he should send down gold. When ‘Alī replied “Where is this gold?” pieces of gold rained down, filling the room. ‘Alī now devoted himself to business, and within a short time became one of Baghdad’s wealthiest and most respected merchants. The story of his amazing success reached the kingdom’s ruler, the sultān, and ‘Alī was invited to the palace. The ruler and the merchant became close friends, and ‘Alī’s son, Hasan, married the sultān’s daughter. Subsequently the sultān fell ill, and before his death named his son-in-law, Hasan, as his successor. Hasan became a successful ruler. He managed the kingdom’s affairs wisely and was well liked by his subjects. After his death he was succeeded by his sons as rulers of the kingdom. 12 The main motifs of the story appear in somewhat different versions in the Bulaq, Breslau, and Calcutta editions. See Alf layla wa-layla, ed. ‘Abd al-Rahmān al-Saftī al-Sharqāwī, Cairo, Būlāq: 1252/1835, vol. 1, pp. 603–612; Tausend und Eine Nacht. Arabisch, ed. Maximilian Habicht, Breslau: Josef Max, 1825–1838, vol. 8, pp. 314–350; Book of the Thousand Nights and One Night, Commonly Known as ‘The Arabian Nights’ Entertainments’, ed. W.H. Macnaughten, Calcutta: W. Thacker, 1839–1842, vol. 2, pp. 466–487. The story has several English translations. A recent translation can be found in The Arabian Nights. Tales of 1001 Nights, trans. Malcolm C. Lyons with Ursula Lyons, London: Penguin Books, 2010, pp. 255–273.

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The tale about ‘Alī embodies several motifs related to the image of big merchants which the storyteller/s sought to emphasize: 1.

2.

3.

4.

5.

A successful, prosperous big merchant maintains a modest Islamic lifestyle. Hasan, ‘Alī’s father, was a decent Muslim and, not surprisingly, his business flourished. The young ‘Alī, who inherited great wealth, did not follow in his father’s footsteps and within a short time was left penniless, destitute and marginalized by society. Tujjār generously aided a fellow merchant in difficulty. Prominent throughout the story is the point that those who came to ‘Alī’s aid in his distress in Bulaq, Damietta, Beirut, Damascus and Baghdad were tujjār. In some cases, the tujjār who helped him thought that he too was a merchant, but not all of them were aware of it. The descriptions of offers of help reveal collegiality and a spirit of mutual concern within the tujjār community and, moreover, demonstrated the tujjār’s innate generosity and magnanimity. The story lauds an attribute whose importance in the context of the tujjār cannot be overstated: the readiness and ability to show initiative, especially in situations of crisis. At the lowest point of his wretchedness, when he is humiliated and destitute, ‘Alī decides to leave his home and family and travels to foreign lands to try his luck there. Without money or friends on whose support he could rely, he reached Baghdad after many tribulations, and prospered. The protagonist’s readiness to take great risks is emphasized. These include not only anticipated business risks, but risks to life. ‘Alī was prepared to face the jinn, who in this story represents risk in its most dangerous form, with the knowledge that people in a similar situation had not emerged from such an encounter alive. He is presented as a brave man who does not flinch from danger. His reward for these two attributes – showing initiative and the readiness to take a huge risk – is immediate. He becomes one of the wealthiest merchants in Baghdad, a city renowned for its merchants’ wealth. The big merchant and his offspring possessed abilities far beyond the running of a successful business. They were blessed with the ability to manage affairs of state – another talent whose importance cannot be overstated. Of all the attributes and abilities the story ascribes to big merchants, this one is exceptional. Qualities of political leadership were not viewed as part of the acknowledged talents of Muslim big merchants, not even of the most successful ones. Moreover, an important point in the story is that this ability of the merchant was recognized by the kingdom’s most powerful group – the Mamluk amīrs, and was backed by the senior ʿulamāʾ. Whereas the other attributes and abilities ascribed to merchants in this story appear in various forms in other stories in Alf Layla wa-Layla, the situation of a merchant becoming the ruler of the kingdom is unique.

The story of ‘Alī is one of several stories in Alf Layla wa-Layla in which big merchants are the leading protagonists. Nevertheless, no other story presents such 78

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a meteoric rise as that of ‘Alī: from the gutter, after his downfall, to the peak of wealth, prestige and power in a Muslim kingdom. It is an extraordinary tale that glorifies the big merchant’s multifaceted abilities. ‘Alī is not free of sin: he stumbled, lapsed and fell, but is blessed with the ability to recover. He is resourceful, daring and intelligent. He is portrayed as a powerful personality – a figure to be admired by anyone who has erred and has been brought low but did not give up and strived to attain greatness. What are the messages that the writers of the story sought to convey to their listeners/readers? Above all, the story reflects a perception that the tujjār – by virtue of their attributes, talents and experience – possess important abilities that transcend the world of business. When given the opportunity to prove these abilities in managing affairs of state, their achievements are great. Thus, there is nothing to prevent a person born into a merchant family, who for years was engaged in commerce and finance, from attaining worthy achievements as well in the political sphere. The merchant’s achievements are no less than those who acquired military and/or administrative training and experience. According to this story, managing affairs of state is not the exclusive domain of the militarybureaucratic elites. Notably, the approach holding that tujjār were worthy of rule was nonexistent in mainstream Islamic political thought.13 It is doubtful that prior to the twentieth century the tujjār themselves aspired to stand at the head of a state. Conceivably, reading the tale of the merchant ‘Alī in the historical context in which it was written might explain its unique narrative. Patrice Coussonnet, who in the late 1980s studied the three written versions of the story – the 1835 Bulaq version, the 1825–1838 Habicht version, and the 1839–1842 Macnaughten version – reached the conclusion that the tale had been written in Mamluk Egypt in the fifteenth century, and that certain details were added (though not to the main thread of the plot) in the sixteenth century following the conquest of Egypt by the Ottomans.14 The dating suggested by Coussonnet is based, inter alia, on the following details: (i) the houses and living conditions described in the story are compatible with the knowledge gleaned in several studies on the living conditions of the Mamluk elites in the fifteenth century; (ii) the locations in Egypt mentioned as commercial centers and ports, such as Bulaq and Damietta, played a leading role in commercial and maritime life during the late Mamluk period; (iii) the political arena alluded to in the story is compatible with the political system in fifteenth-century Mamluk Egypt; (iv) certain details in the story regarding consumption, particularly the consumption of coffee, show that the final version of the story could not have been written prior to the early

13 See Ann K.S. Lambton, State and Government in Medieval Islam: An Introduction to the Study of Islamic Political Thought: The Jurists, Oxford: Oxford University Press, 1981, passim. 14 Patrice Coussonnet, Pensée mythique, idéologie et aspirations sociales dans un conte des mille et une nuits, Cairo: IFAO, 1989, pp. 33–41.

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sixteenth century, since coffee-drinking in Egyptian cities only began in that century;15 and (v) the appellation hawāga that appears in the tale as a title of respect for a big merchant is not mentioned in the sources prior to the end of the fourteenth century, but it gradually became common for all the big merchants from the fifteenth century onward.16 Conceivably, economic developments, and especially the changes that took place in the relations between the Mamluk rulers and the tujjār in the fifteenth century, form the background of the story’s main message. Egypt witnessed economic prosperity in the thirteenth and the first half of the fourteenth centuries. One of the central factors in this prosperity was the growth of international and transit trade in which Egypt was a central link. An important place in this commercial traffic was reserved for the spice trade and a number of other branches of commerce, such as precious stones, which were held by Egyptian Muslim tujjār, primarily the Kārimīs.17 Until the late fourteenth century a reasonable understanding existed between the rulers and the tujjār: the state enjoyed economic prosperity and high tax revenues from the traffic of merchandise, and it limited its interference in the tujjār’s businesses. Furthermore, the Mamluk rulers protected the interests of the Muslim tujjār in their competition with foreign merchants.18 This situation changed fundamentally in the fifteenth century when the Egyptian economy was drawn into a deep crisis. Severe epidemics led to a steep decline in the domestic product and in the treasury’s tax revenues.19 According to al-Maqrīzī, the number of villages in Egypt fell sharply in the first decades of the fifteenth century, standing at 2,710 in 1434 compared with 10,000 at the end of the fourteenth century.20 Even if this figure seems exaggerated and the decline in the number of villages was lower, the descriptions of the crisis-stricken economy and society seem to be reliable.

15 On the spread of coffee consumption in Egypt, see Nelly Hanna, Making Big Money in 1600: The Life and Times of Isma‘il Abu Taqiyya, Egyptian Merchant, Syracuse: Syracuse University Press, 1998, pp. 79–80. 16 The appellation “hawāga trade” appears only in the Breslau edition. 17 On the growth of the Kārimī merchants, see Subhi Labib, Handelsgeschichte Ägyptens der Spätmittelalter (1171–1517), Wiesbaden: Franz Steiner, 1965, pp. 165–168. Studies on the Kārimī merchants include Gaston Wiet, “Les marchands d’épices sous les sultans mamelouks”, Cahiers d’Histoire Égyptienne, 7/2 (1955): 81–147; Subhi Y. Labib, “Kārimī,” EI 2nd ed., 4 (1978), pp. 640–643; John Wansbrough, “The Medieval Kárim: An Ancient Near Eastern Paradigm?” in G.R. Hawting, J.A. Mojaddedi and A. Samely (eds.), Studies in Islamic and Middle Eastern Texts and Traditions in Memory of Norman Calder, Oxford: Oxford University Press, 2000, pp. 297–306. 18 Ira Marvin Lapidus, Muslim Cities in the Later Middle Ages, Cambridge, Mass.: Harvard University Press, 1967, p. 125. 19 Michael W. Dols, The Black Death in the Middle East, Princeton: Princeton University Press, 1977, p. 218. 20 al-Maqrīzī, Kitāb al-sulūk li-ma‘rifat duwwal al-mulūk, ed. Sa‘īd ‘Abd al-Fattāh, ‘Āshūr, Cairo: Lajnat al- Ta’līf waʾl-Tarjama waʾl-Nashr, vol. 4, p. 912.

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Against this backdrop, a sharp change was made in the rulers’ policies vis-àvis the tujjār. At the end of the 1420s or in the early 1430s, the Mamluk Sultān Barsbāy (1422–1438) decided to impose a state monopoly on the spice and sugar trade.21 In effect, the spice and sugar trade, which was the cornerstone of the activity and revenues of the tujjār, was nationalized by the ruler for both fiscal and political reasons.22 The change in Barsbāy’s commercial-fiscal policy was one of the significant factors – albeit not the only one – in the decline of the Kārimīs and other tujjār during the course of the fifteenth century. The economic historian Subhi Labib, describing the lethal blow dealt to the tujjār by the Mamluk ruler, pondered why the merchants did not attempt to seize rule from the Mamluks.23 Illuminating the degree to which Barsbāy’s measures were destructive, Labib implies that an attempt by the tujjār to seize power might have succeeded. He argues that the tujjār did not take this course of action because their mind-set precluded them from contemplating such a move.24 They were in thrall to the traditional Islamic perception that rule is reserved for the military elite, and this elite was closed to them, whatever their wealth and socioeconomic power.25 This adherence to the ruling notions of the political order caused them to be passive even in the face of a sharp and painful decline. Assuming that the story about ‘Alī reflects prevailing attitudes of Egypt’s tujjār in the fifteenth century, it seems to express their frustration with the decline in their economic and social situation, and their helplessness vis-à-vis Barsbāy’s commercial policy. Attaining rule was thus a fantasy, a wishful dream to allay the harsh diminishment of their status in the late Mamluk period.

Ibn Khaldūn on the Big Merchants Ibn Khaldūn (1332–1406) devotes six chapters in the fifth part of his al-Muqaddima – the part devoted to economic matters (“On the various aspects of making a living, such as profit and the crafts . . .”) to a discussion of commerce and merchants.26 Commerce, he asserts, is “a natural way of making a living”, and engaging in it is intended to obtain profit. However, unlike the two other ways of making a living – agriculture and crafts – in commerce, Ibn Khaldūn writes, “. . . most of its practices and methods are tricky and designed to obtain the (profit) margin 21 There is no agreement between historians of Mamluk Egypt regarding the date in which the monopoly was imposed. See John L. Meloy, “Imperial Strategy and Political Exigency: The Red Sea Spice Trade and the Mamluk Sultanate in the Fifteenth Century”, Journal of the American Oriental Society, 123 (2003): 2. 22 For a detailed analysis of Barsbāy’s commercial strategic policy, see Meloy, “Imperial Strategy,” pp. 2ff. 23 Labib, Handelsgeschichte, p. 491. 24 Ibid. 25 Ibid, p. 493. 26 Ibn Khaldūn, pp. 366–371; Rosenthal trans., vol. 2, pp. 336–345. He also discusses the nature of commerce in chapter 2 of part 5. See below.

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between purchase prices and sales prices”.27 He returns, in a number of contexts, to the notion that commerce is nothing but mediation between producer and consumer, and that the profits obtained are the margin between purchase and sales price. In discussing the conduct of merchants, he writes: “It is unavoidable that there should be cheating, tampering with the merchandise. . . . There will also be non-acknowledgment or denial of obligations . . .”28 Elsewhere he explains that since the merchant’s efforts are aimed at enlarging the margin between the two elements of any transaction – buying and selling – cunning becomes an inseparable part of his personality: . . . because merchants are mostly occupied with buying and selling . . . this necessarily requires cunning. If a merchant always practices cunning, it becomes his dominant character quality. . . . If the character of (the merchant) then adopts the bad qualities that follow from (cunning) in low-class merchants, such as quarrelsomeness, cheating, defrauding, as well as (the inclination to) commit perjury . . . his character can be expected to be one of the lowest sort.29 In light of the negative qualities characterizing those engaged in commerce, Ibn Khaldūn holds firmly to the position that rulers must abstain from doing business. He explains that the ruler would be making a serious mistake by engaging in commerce, since it would breach the appropriate economic and political order and cause great harm to his subjects. He cites three reasons for this: (i) competition between the ruler and his subjects for a given quantity of merchandise cannot be fair, since the ruler has far larger reserves of money than his subjects. In this competition his subjects have almost no chance of obtaining the merchandise they seek; (ii) by virtue of his position, the ruler can purchase merchandise from his subjects at lower than market price; and (iii) similarly, the ruler can force his subjects to purchase his merchandise at higher than market price.30 Thus, a ruler who enters the world of commerce, and to all intents and purposes acts as a merchant, disrupts market forces, and by means of his political and financial power determines fictitious prices – either lower or higher than market prices – all in accordance with his personal interests. Ibn Khaldūn predicts extremely grave economic, social and political consequences resulting from the disruption of the market’s price system and the impairment of the subjects’ income. He describes a destructive chain reaction: the fellahin’s income from the sale of their produce would be diminished, since the ruler would pay less for it; the peasants would have no interest in tilling their land beyond their own needs, while the merchants would be left idle since the ruler-merchant would leave them no room for their activity. 27 28 29 30

Ibn Khaldūn, p. 356; Rosenthal trans., vol. 2, p. 317. Ibn Khaldūn, p. 366; Rosenthal trans., vol. 2, p. 342. Rosenthal trans., vol. 2, pp. 344–345. Ibn Khaldūn, p. 367. Ibn Khaldūn, pp. 257–259; Rosenthal trans., vol. 2, pp. 93–95.

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Consequently, the economy’s product would decrease, and the ruler’s ability to collect taxes from the population would be reduced accordingly. This reduction of the ruler’s revenue, while his expenses remain unaffected, would ultimately lead to his fall.31 Ibn Khaldūn shows, in this cyclical analysis, that instead of enriching and strengthening him, the ruler’s engagement in commerce would impoverish him and eventually lead to his downfall. Ibn Khaldūn also cautions the ruler not to become indirectly involved in commerce either. He should not be led into business partnerships by merchants trying to tempt him. The ruler must know that the merchants’ sole interest is large profits, and they will use partnerships with the ruler to obtain exemptions from paying taxes.32 These are business partnerships whose motives are injurious. Although Ibn Khaldūn does not ignore the tujjār’s beneficial service to their customers – their willingness to undertake dangerous and arduous journeys to purchase rare merchandise,33 this does not dampen his harsh criticism of their conduct. The explanation for Ibn Khaldūn’s negative attitude toward the tujjār may lie in the broad context of his socio-historical analysis, namely a sharp distinction which he drew between nomads and city dwellers; a cyclical model which he developed regarding the rise and fall of dynasties and kingdoms; and the notion of social cohesion or solidarity (‘asabiyya).34 These three concepts/theories are interconnected and are linked to his attitude toward the tujjār. Ibn Khaldūn defines two principal sectors in society in terms of way of life and social structure: nomads and permanent city dwellers. Although each category has complex and multifaceted characteristics, in terms of the kingdom’s vitality he favors the nomads because of their fighting spirit. This is in contrast to the urban population which aspires to material abundance and luxury. Urban culture, Ibn Khaldūn writes, is the main goal of civilization, but it leads to corruption, and hence it is “the stopping point in the life of civilization and dynasties.”35 Urban culture plays a major role in the process of decline described in Ibn Khaldūn’s cyclical model of dynasties and kingdoms. Following the first two generations of a new dynasty – the generations that consolidate and stabilize the new kingdom – the third and fourth generations, accustomed by then to a life of ease and luxury, bring about the weakening of the kingdom. This weakness is intensified in the fifth generation and enables new forces to take over the kingdom: the existing dynasty falls and a new one is founded. Cardinal importance is ascribed to social cohesion in these socio-political processes. Such cohesion is manifested in the mutual responsibility of the group, mutual loyalty and self-sacrifice. The great test of cohesion comes in times of grave crisis. Cohesion, asserts Ibn Khaldūn, has greater potency among the nomads and is weaker among city dwellers. The more 31 32 33 34 35

Ibn Khaldūn, p. 258; Rosenthal trans., vol. 2, p. 95. Ibn Khaldūn, pp. 258–259; Rosenthal trans., vol. 2, p. 96. Ibn Khaldūn, p. 368; Rosenthal trans., vol. 2, p. 338. Ibn Khaldūn, pp. 244–247; Rosenthal trans., vol. 2, pp. 291–297. Ibn Khaldūn, pp. 346–347; Rosenthal trans., vol. 2, pp. 296–297.

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developed urban culture becomes, with its pleasures and luxuries, the more lax the sense of cohesion between its residents, until it fades entirely. This absence of cohesion characterizes the fifth generation of urban society in the cyclical model – the generation that is no longer able to prevent the fall of the dynasty and the collapse of the existing social and political order.36 Ibn Khaldūn’s three theories have a common basis, namely: pleasure and gratification corrupt urban society and strip it of its solidarity and potency. This process of corruption is linked to the tujjār, as the provision of luxury goods is one of their specialties. They travel to distant lands to bring exotic goods for the pleasure and gratification of the rulers and upper classes, who soon neglect affairs of state. Hence, Ibn Khaldūn believes that the tujjār play a significant role in the deterioration and decline of their society. The traumatic events experienced by a large part of the Islamic world in the thirteenth and fourteenth centuries may have provided the background for Ibn Khaldūn’s socio-political insights. The thirteenth century was a period of colossal political upheavals in many parts of the Islamic world. The middle of that century witnessed the Mongol invasion in the east, which decimated kingdoms and dynasties, bringing destruction and ruin in its wake to many of the main centers of Islam in Asia, including Baghdad, capital of the Abbasid caliphate. The Islamic stronghold in Andalusia also suffered a harsh blow in the thirteenth century. Christian forces – the houses of Castilla and Léon – conquered Cordoba in 1236 and Sevilla in 1248. These conquests led to large waves of Muslim migration to the North African countries. Ibn Khaldūn’s ancestors were affected by these traumatic events. The family, which had lived in Andalusia since the eighth century, left Sevilla before the fall of the city and moved to Tunis.37 From the mid-1350s to the mid-1370s, Ibn Khaldūn served in various posts in the courts of the rulers of Morocco and Tunis, and was exposed to the bitter struggles between them. He also served Muhammad V, ruler of Granada for about four years (1362–1365), and became familiar with the political conditions created in Spain following the conquests of the Christian kingdoms.38 By the time he completed dictating the first version of al-Muqaddima (1377), he had acquired wide political experience that enabled him to gain profound insights on the nature of long-term political and social processes and the connection between them. His close knowledge of the world of commerce and the tujjār came later, after he completed the first version of al-Muqaddima, when he served for several short periods – from 1384 until his death in 1406 – as the supreme judge of the Mālikī mahkama in Cairo.39 36 37 38 39

Ibn Khaldūn, pp. 130–136, 160–165; Rosenthal trans., vol. 1, pp. 284–298; 347–356. Franz Rosenthal, “Ibn Khaldūn’s Life” in Rosenthal trans., vol. I, pp. xxxiii–xxxv. Ibid., pp. xlvii–liii. Since the early version of the work has not survived, it is impossible to know what Ibn Khaldūn added or amended in the chapters on the tujjār in the later versions that have been preserved (1394–1402).

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Exposure to Alf Layla Wa-Layla and Al-Muqaddima in Tehran and Istanbul in the Nineteenth Century Considering the disparities in the image of the tujjār, an exploration of the degree to which rulers and high-ranking bureaucrats in Iran and the Ottoman Empire were exposed to the two works under discussion during the nineteenth century is illuminating. The interest shown in these works by the ruling elites in Tehran and Istanbul differed greatly. In Iran, Nāsir al-Dīn (1848–1896) was a devoted follower of the stories of Alf Layla wa-Layla in their Persian translation before he was crowned shāh.40 His affection for them was manifested a short time after his succession to the throne when, in 1852, he initiated the publication of an illustrated edition at a relatively high cost. The palace recruited a team of over forty artists who worked under the renowned artist Abu ‘l-Hasan Khān Ghaffārī Sanī‘ al-Mulk. The team labored on the illustrations of the stories for seven years until six volumes comprising 2,279 pages were completed in 1859. The cost of the project was 6,850 tūmān, a truly princely sum for the publication of a literary work.41 The edition is considered a masterpiece of the Persian art of book illustration during the Qajar era. Other illustrated editions were prepared by various artists during Nāsir al-Dīn reign and were kept in the Gulistān Palace library in Tehran.42 It appears, therefore, that the first decades of Nāsir al-Dīn reign were years of exposure to, and a nurturing of the tradition of the Alf Layla wa-Layla stories in the Qajar court. It may be assumed that such interest in the stories elicited familiarity with those that centered on the tujjār as well. Interest in and exposure to the Alf Layla wa-Layla stories in the Ottoman Empire apparently preceded that in Iran, and there were periods in the empire in which the palace itself displayed particular interest in them. Thus, for example, Sultān Murad IV (1623–1640) ordered the translation of Alf Layla wa-Layla from Arabic into Turkish, an enterprise completed in 1636, comprising ten volumes.43 However, the attitude toward the stories of Alf Layla wa-Layla among the Ottoman ruling and cultural elites underwent a sharp change in the nineteenth century, especially from the Tanzīmāt period to the last days of the empire. Influenced by prominent Ottoman intellectuals, and against the background of a changing political and cultural orientation on the part of senior bureaucrats, the stories fell out of favor in government circles. Significantly, during a period of over half a century – from 1852 to 1910 – no new translation or illustrated edition, or even

40 Abbas Amanat, Pivot of the Universe: Nasir al-Din Shah Qajar and the Iranian Monarchy, 1831– 1896, Berkeley: University of California Press, 1997, p. 66. 41 Ulrich Marzolph, “The Persian Nights: Links between the Arabian Nights and Iranian Culture,” Fabula 45 (2004): 283–284. 42 Marzolph, “Persian Nights”: 283–284. 43 Hande A. Birkalan, “The Thousand and One Nights in Turkish: Translations, Adaptations, and Issues,” Fabula 45 (2004): 225.

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selected stories from Alf Layla wa-Layla were published in the Ottoman-Turkish Arabic script.44 Two developments in the cultural sphere can explain the disinterest in Alf Layla wa-Layla stories that took place in Istanbul. The first and more important factor is connected with the awakening of a consciousness of Turkish identity in the second half of the nineteenth century, and in this context a growing interest in the Turkish language, literature and folklore among intellectuals, most prominently Ibrahim Şinasi (1826–1871), Riza Tevfik (1868–1949) and Ziya Gökalp (1876–1924).45 In their view, the spirit of the nation was embodied in Turkish folklore – folktales, epos, proverbs, fables, folksongs and so forth, whose originality and authenticity was stressed in particular by Gökalp.46 The cultural wave that sanctified the Turkish identity in language and literature in the latter nineteenth and early twentieth centuries rejected the literary influences that played an important role in the high Ottoman culture of earlier periods – first and foremost the Iranian and Arab influences. Those influences, which are dominant in the Alf Layla wa-Layla stories, appeared foreign and detached during the later period. In the view of the “folklorist” school of thought, according the Alf Layla wa-Layla stories a central place was neither worthy nor appropriate in the new Ottoman cultural approach.47 The second factor is connected with the Westernization process both during and after the Tanzīmāt period. The concepts and attitudes that underlay Westernization, such as the empirical-positivist approach, did not accord with the perceptions of Alf Layla wa-Layla storytellers, who gave free rein to their imagination in constructing the plot and its protagonists. The Ottomans of the Tanzīmāt sought to create a very different conceptual model from that conveyed by the stories. By contrast, the interest shown in al-Muqaddima by intellectuals and bureaucrats in the empire did not wane. On the contrary, up to and including the nineteenth century it grew. The ideas in al-Muqaddima first influenced Ottoman intellectuals and bureaucrats in the mid-seventeenth century and perhaps even earlier. Geographer and historian Katib Çelebi (1609–1657), who called for farreaching administrative reform in the empire, may have been the first Ottoman scholar to state specifically that he was influenced by reading al-Muqaddima.48 The dissemination of Ibn Khaldūn’s ideas was greatly enhanced by the Ottoman 44 The last comprehensive translation during the above-mentioned period was published in 1841 (vol. 1) and 1852 (five additional volumes). See Birkalan, “Thousand and One”: 225. 45 Birkalan, “Thousand and One”: 227. 46 Ziya Gökalp, Principles of Turkism, trans. Robert Devereux, Leiden: Brill, 1968, p. 69. 47 Birkalan, “Thousand and One”: 226–227. 48 Cornell Fleischer, “Royal Authority, Dynastic Cyclism, and ‘Ibn Khaldūnism’ in Sixteenth-Century Ottoman Letters”, Journal of Asian and African Studies, 18 (1983): 199. Cf. Rosenthal, “Ibn Khaldun’s Life,” p. lxvii.

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historian Mustafa Naima (1665–1716) who embraced both Ibn Khaldūn’s “Circle of Equity”49 as well as his theory of the rise and decline of states and dynasties.50 Naima’s work was widely read by Ottoman bureaucrats and intellectuals.51 In the second half of the eighteenth century, Istanbul’s ambassador to Vienna and later to Berlin, Ahmed Resmi (1700–1783), noted that he was influenced by Ibn Khaldūn’s philosophy.52 The second half of the nineteenth century saw the publication of the first editions of al-Muqaddima in Turkish translation (appearing both in Bulaq and Istanbul), a clear indication of the interest generated by the work in government and other circles.53 Unlike in the Ottoman Empire, al-Muqaddima did not arouse any particular interest in nineteenth-century Iranian bureaucracy. The dilemmas that troubled Ottoman intellectuals and bureaucrats regarding the situation of the empire, to which they found original and important reference in Ibn Khaldūn’s thought, did not seem relevant to the Qajar political elite, and hence the attraction to his ideas that existed in Istanbul was not replicated in Tehran.

Qajar and Ottoman Attitudes Toward the Tujjār While there is no way of knowing the extent to which Qajar and Ottoman rulers were influenced by the images contained in the works discussed above, the actual attitudes of these rulers towards the tujjār can be examined, and the role of images in this process can be evaluated. In the second half of the nineteenth century the Qajar attitude toward the Muslim tujjār was complex, yet for most of that period the tujjār enjoyed the support of the shāh and his court. This was clearly manifested during the 1870s and 1880s when the prevalent approach in Tehran was against opening the Iranian economy to foreign investors and entrepreneurs. Nāsir al-Dīn was concerned that foreign economic penetration would endanger the country’s political sovereignty. In his view, the benefits that Iran might reap from foreign investment did not justify the inherent political risk.54 Instead, he expected that the tujjār would play an important role in the development of the Iranian economy. In this “golden age” in

49 The central point in the “Circle of Equity” is that without a strong state there can be no justice. See Lewis V. Thomas, A Study of Naima, ed. Norman Itzkowitz, New York: New York University Press, 1972, p. 78. 50 Bernard Lewis, “Ibn Khaldun in Turkey” in Moshe Sharon (ed.), Studies in Islamic History and Civilization in Honour of Professor David Ayalon, Leiden: E.J. Brill, 1986, pp. 528–529. 51 Thomas, Naima, pp. 1–2. 52 Virginia H. Aksan, “Ottoman Political Writing, 1768–1808”, International Journal of Middle East Studies 25 (1993): 58; Lewis, “Ibn Khaldun in Turkey”, pp. 529–530. 53 Lewis, “Ibn Khaldun in Turkey”, pp. 529–530. 54 Gad G. Gilbar, “Resistance to Economic Penetration: The Kārguzār and Foreign Firms in Qajar Iran”, IJMES 43 (2011): 9–10. Chapter 9 in this volume.

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the relationship between the Qajars and the tujjār, Nāsir al-Dīn also hoped that he would be able to rely on tujjār support in his struggle with domestic opponents, and he attempted to buttress their status as a power group in the Qajar political arena.55 Moreover, close personal relationships existed between Nāsir al-Dīn and some of the leading tujjār, such as Haj Muhammad Hasan Amīn al-Darb and Āqā Muhammad Mu‘īn al-Tujjār Bushihrī. These big merchants advised him on economic matters, provided him with various commercial and financial services, and proffered valuable gifts to him.56 In the late 1880s the positions of the central government regarding the tujjār changed, mainly as a result of the fiscal deterioration of the central treasury. Nāsir al-Dīn, and later his son Muzaffar al-Dīn, made decisions aimed at increasing the government’s revenues, such as the reform of the customs administration, and while this was not an a-priori policy designed to weaken the tujjār, these measures in fact damaged their economic position and their status.57 Yet, even during later years of conflict between the tujjār and the central government, including in the early stages of the constitutional revolution (1906), the rulers continued to maintain close contact with the leading tujjār.58 The considerations that motivated Nāsir al-Dīn to view the rise of the tujjār positively were, as noted above, economic and political. The positive image of the tujjār, as it emerges from a number of stories in Alf Layla wa-Layla, accorded with the central government’s supportive policy toward them. During most of the second half of the nineteenth century, image and policy flowed in the same direction. Hence, it may be suggested that during the greater part of the second half of the nineteenth century a congruence existed between the tujjār’s image and Qajar policy toward them. By contrast, the Ottoman rulers did not encourage the Muslim tujjār during the nineteenth century, whether economically or politically. They did not assign these merchants a special role or position in the empire’s commercial or fiscal sectors. Moreover, in several aspects, mainly with regard to fiscal demands and security of property, the foreign competitors of the tujjār were in a better position. This situation was not new. Its foundations lay in sixteenth- and seventeenthcentury economic and political developments, and in some respects it intensified in the nineteenth century. The increased political and economic influence of the 55 Gad G. Gilbar, “The Rise and Fall of the Tujjār Councils of Representatives in Iran, 1884–85”, Journal of the Economic and Social History of the Orient 51 (2008): 666. Chapter 11 in this volume. 56 Shireen Mahdavi, For God, Mammon and Country: A Nineteenth-Century Persian Merchant, Haj Muhammad Hassan Amin al-Zarb (1834–1898), Boulder: Westview Press, 1999, pp. 73, 94–95, 166–167. 57 Gad G. Gilbar, “The Big Merchants (tujjār) and the Persian Constitutional Revolution of 1906”, Asian and African Studies 11 (1976/77): 293–295. 58 Y. Dawlatabadī, Tarīkh-i mu’asir yā hayāt-i Yahyā, Tehran: XX, 1337S./1958, vol. 2, pp. 75–76; M. Malikzada, Tarīkh-i inqilāb-i mashrutiyyāt-i Īrān, Tehran: XX, 1328S./1949, vol. 2, pp. 170–172.

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European powers in Istanbul strengthened the status and power of foreign merchants and investors and their local protégés – mainly Greeks and Armenians.59 A significant example of this process was the establishment of mixed courts in Istanbul, Izmir and Beirut in the 1840s and 1850s.60 Additionally, to a greater extent than their counterparts in Iran, the Muslim big merchants in the Ottoman Empire suffered from sequestration of their property (in the framework of the müsadere) by the sultān.61 This dealt a harsh blow to Muslim merchant families’ ability to accumulate large amounts of capital, and obliged them to undertake inefficient business measures, such as establishing family endowments (waqf ahlī), in order to protect their property from the rulers’ rapacity.62 While in the last years of the reign of Sultān Mahmud II (1808–1839), müsadere was almost completely discontinued, this important development was not the result of a change in government policy toward the tujjār. Its foundations lay in a completely different cause – the success of senior bureaucrats, who were also badly hurt by the sequestration of property, in compelling the sultān to cease this practice.63 A profound change in the central government’s attitude towards the Muslim merchant-entrepreneurs was, however, initiated by the Young Turks during 1908–1918,64 but the new policy did not fundamentally change the economic position of the Muslim tujjār. The reform came too late and by then the merchants were faced with a new group of competitors: high-ranking members of the Ottoman bureaucracy who took advantage of the new policy. Apparently, the background to the alienation between the central government in Istanbul and the Muslim tujjār was the government’s aim to prevent the growth of a Muslim economic elite that might also become a strong political power group.65 In the view of the Ottoman rulers, the ability to control such an elite was far more limited than their ability to control a foreign, non-Muslim economic elite. The central government viewed the rise of economically powerful domestic elites as a serious threat to its position, and it acted to thwart this possibility. A number of developments, such as the impressive strengthening of the derebeys in the second 59 The protégé population in several major commercial centers grew rapidly during the nineteenth century. See Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East, Princeton: Princeton University Press, 2011, p. 201. 60 Gilbar, “Resistance”: 7. 61 Fatma Müge Göçek, Rise of the Bourgeoisie, Demise of Empire: Ottoman Westernization and Social Change, New York: Oxford University Press, 1996, pp. 58, 92, 171 n46. 62 Rifa‘at ‘Ali Abou-El-Haj, Formation of the Modern State: The Ottoman Empire, Sixteenth to Eighteenth Centuries, Albany: SUNY Press, 1991, p. 122 n58. 63 See government order of 1826 to the qadis forbidding sequestration of private property, Sadaret Mektubi no. 1880/76, 29Z 1241; Cevdet Adliye no. 1485, 29 Za 1241. 64 Feroz Ahmad, “Vanguard of a Nascent Bourgeoisie: The Social and Economic Policy of the Young Turks 1908–1918” in Osman Okyar and Halil Inacik (eds.), Türkiye’nin Sosyal ve Ekonomic Tarihi (1071–1920), Ankara: Meteksan, 1980, pp. 337–345. 65 Mehmet Genç, Osmanli imparatorlugunda Devlet ve Economi, Istanbul: Ötüken, 2000, pp. 84–85; Gad G. Gilbar, “The Muslim Big Merchant-Entrepreneurs of the Middle East, 1860–1914”, Die Welt des Islams 43 (2003): 27.

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half of the eighteenth century, whose increased revenues from their economic entrepreneurship was a significant factor in their ability to challenge the authority of the center,66 confirmed the approach of the central government that the rise of local economic elites must be nipped in the bud. Hence, the Muslim tujjār, whose economic power base was not anchored in the central government, could not be encouraged. Ibn Khaldūn’s view of the tujjār, and the negative image that emerged from his writings, fell into line with Ottoman policy toward this group. In this case, too, there was a congruence between policy and image.

Conclusion A study of the image of Muslim big merchants in two Islamic societies, and the possible influence of these images on the positions of the ruling elites toward tujjār in Iran and the Ottoman Empire in the latter half of the nineteenth century, reveals three sets of dichotomies. First, there is a deep divide between the image of the Muslim tujjār in Muslim sources. Works formulated or written in the fourteenth and fifteenth centuries – “‘Alī, the Cairene Merchant” from Alf Layla wa-Layla, and the chapters on trade and merchants in al-Muqaddima – mark two poles of tujjār images. The contradictory images in these two texts are almost absolute. First, whereas according to the story in Alf Layla wa-Layla the merchant possesses worthy attributes to such a degree that even the military commanders welcomed him as ruler of the kingdom, in Ibn Khaldūn’s view the conduct of the tujjār was so negative that the very fact of their connection with the ruler endangered both him and his kingdom. Second, there is great variance in the degree of exposure and influence of the two sources in which the images appear in Qajar Iran and the Ottoman Empire in the second half of the nineteenth century. Whereas in Iran the stories of Alf Layla wa-Layla prompted sustained interest and admiration by Nāsir al-Dīn Shāh, and during his reign the collected stories were published in a number of new translations and illustrated printed editions, in the capital of the Ottoman Empire interest in the stories of Shahrazad among the upper echelons of the bureaucracy was greatly diminished due to new perceptions prevailing in Ottoman culture in the second half of the nineteenth century. New translations or illustrations were not published, and neither the sultān nor senior bureaucrats initiated projects to promote interest in the stories. With regard to Ibn Khaldūn’s work, too, there was a marked difference between the attitudes of Istanbul and Tehran. Whereas Ottoman high officials displayed great interest in the ideas embodied in al-Muqaddima, in Iran these ideas hardly gained any credence. Third, there was a deep difference in the attitude and policy of the central government toward the Muslim tujjār in the two countries under discussion. The

66 Deena R. Sadat, “Rumeli Ayanlari: The Eighteenth Century”, The Journal of Modern History 44 (1972): 346–363.

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central government in Iran viewed the tujjār as an important component of the country’s economic system, and for many years during his reign Nāsir al-Dīn gave precedence to their activities and entrepreneurship over that of European merchants and investors. The attitude toward the tujjār in the Ottoman Empire was very different. In the capital and in other commercial centers foreign merchants and investors and their non-Muslim protégés enjoyed a pronounced advantage over their Muslim counterparts in matters pertaining to the advancement of their business. Furthermore, up until the end of the nineteenth century the Ottoman government did not initiate any significant measures to encourage the Muslim tujjār. These three sets of dichotomies create two vertical continua that in turn form a positive correlation between image and policy. One indicates a correlation between the Shahrzadian image of the tujjār and their high social status, and their position in Iran’s socio-economic elite during the late Qajar period. The other connects the Ibn Khaldūnian image of the tujjār with the problematic position of the Muslim big merchants in major commercial centers of the Ottoman Empire, such as Istanbul, Izmir and Beirut. Studying the image of the tujjār in Iran and the Ottoman Empire alongside the two works discussed in the present study clarifies why an all-embracing negative stereotype of the big merchant was not created in the Muslim venue – a situation that contributed to the flourishing of the tujjār in the eastern region of the Middle East in the second half of the nineteenth century.

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5 PA R A D I G M S O F T R A D E AND FINANCE IN OTTOMAN HISTORIOGRAPHY

Introduction Scholars are attracted by the notion of paradigms. It holds great power. Once paradigms are established, they become scientific foundations of a given field of study. The idea underlying this term emerged in the context of the history of the natural sciences, but it is also applied in various disciplines of the social sciences, and even the protégés of Clio have adopted it. Historians attach different meanings to the term, but there is a common denominator: it addresses a generalization embracing a broad historical phenomenon from both a thematic and a chronological standpoint. The importance of a historical paradigm is that it offers an explanation for developments or phenomena which show a degree of regularity or pattern, and which have extensive meanings and implications. The terms “thesis” or “theory,” which are also to be found in the studies of historians when discussing an extensive historical phenomenon, differ from a paradigm in that they are “softer”. They denote a narrower idea, or one that has not yet been accepted as valid by the research community. The present article is devoted to an examination of the formulation of a particular paradigm that to a great extent shaped the way students of the history of the Ottoman Empire perceived the empire’s economic development in the long 19th century. The beginnings of the formulation of the paradigm, which may be termed “the paradigm of the economic predominance of non-Muslim minorities” (hereafter “the economic predominance paradigm”), took place in the first half of the 19th century. At the beginning of the 20th century, and particularly during the First World War, an important element was added to this paradigm, which would later be known as “the paradigm of the ethnic division of labor” (hereafter “the ethnic division of labor paradigm”). Both the paradigm and its variant flourished during the last four or five decades of the 20th century. However, some 120 years after this paradigm began to coalesce, from the 1970s onward, new studies began to cast doubt, explicitly or implicitly, on its validity.

DOI: 10.4324/9781003177425-7

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The Economic Predominance Paradigm The emergence of this paradigm was related to domination over the most dynamic economic branch in the Ottoman Empire – foreign trade. The perception that gained credence during the first half of the 19th century was that the Ottoman Empire’s Greek and Armenian subjects dominated the international trade of the entire empire, almost unchallenged. Furthermore, they controlled the financial sector and thus dominated all other branches of the economy. The Muslim subjects, who constituted about 80 percent of the empire’s population in the Asiatic provinces, played no real role in these economic sectors, according to the paradigm. It held that economic entrepreneurship and all it entailed was the exclusive domain of the Greeks and Armenians. By contrast, the Muslims, according to this perception, lacked interest in commercial and financial activity and also lacked the ability required in these economic branches. At the basis of the initial paradigm lay a positive appreciation of the activity of the Greeks and Armenians, since by their initiative they contributed to the advancement of the Ottoman state and all its subjects. This generalization was formulated and disseminated by European travelers, journalists and diplomats, chiefly British, French and German. Among the many works written on this subject I shall cite extracts from four, since each appears to have made an important contribution to the formulation and dissemination of this paradigm. In 1854, a work by the French historian and journalist, Jean-Henri-Abdolonyme Ubicini, Lettres sur la Turquie,1 was published and within a short time became an authoritative source of current developments and everyday life in the Ottoman major urban centers during the first half of the 19th century. Writing about the times of Sultan Selim III (1789–1807), Ubicini discussed the authorities’ attempt to curb the allocation of berats (imperial deed of grant) by foreign embassies – mainly the Russian, British and French – to Greek subjects and members of other minority groups. Since berats accorded significant economic and judicial privileges to their holders, the demand was great, and the feeling in the upper echelons of the Ottoman government was that the state was losing control over those of its subjects who were engaged in foreign trade. Selim III decided to change the system of issuing berats, and from 1802 onwards, the berats were to be granted to non-Muslim Ottoman merchants (avrupa tüccarları) engaged in international trade by the sultan himself.2 Ubicini quotes a contemporary Greek historian, Rizos 1 Jean-Henri-Abdolonyme Ubicini, Lettres sur la Turquie, 2 vols., Paris: Guillaume, 1851–54; For an English translation see, Letters on Turkey: An Account of the Religious, Political, Social and Commercial Conditions of Ottoman Empire, 2 vols., trans. by Lady Easthope, London: John Murray, 1856. 2 Ali İhsan Bağış, Osmanlı Ticaretinde Gayri Müslimler, Kapitülasyonlar, Avrupa Tüccarları, Beratlı Tüccarlar, Hayriye Tüccarları, Ankara: Turhan Kitabevi, 1983, pp. 39–70; Bruce Masters, “The Sultan’s Entrepreneurs: The Avrupa Tüccaris and the Hayriye Tüccari in Syria,” International Journal of Middle East Studies 24 (1992): 579–97.

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Neroulus, who wrote about the effects of the new licensing system on the status of the Greek merchants: The [Greek] merchants, having found the advantages of this [new] system . . . joined themselves to this corporation which increased and prospered till the rich commerce of the Levant became almost entirely at its disposal.3 Ubicini gave a number of additional reasons that explain the great success of the Greek merchants in foreign trade, and also why the foreign community in Istanbul began to perceive Greek predominance over this branch, forcing both Muslim merchants and European trading houses aside.4 Mention of the predominance of both Greeks and Armenians in Ottoman commerce and finance repeatedly appeared in books written by European travelers and diplomats in the second half of the 19th and the early 20th centuries. Alongside praise for the commercial and financial talents of the Greek and Armenian subjects as accounting for their business success, several writers dwelt on the incapacity of the “Turks” (Turkish-speaking Muslims, residents of Anatolia) in commerce and banking. These generalizations about the Muslim subjects were diametrically opposite to portrayals of the Greeks and Armenians. In 1859 the British economist Nassau W. Senior published A Journal Kept in Turkey and Greece,5 which included his impressions of the city of Izmir. The book acquired a wide readership and was cited many years after its appearance. Senior related that in the course of his visit to Izmir he met Y., an English physician resident in the city. Their conversation focused on the causes of the empire’s weakness and on the reforms (tanzīmāt) initiated by the central government in the 1840s and 1850s: “It is a fact,” said Y., “that while their [the Ottoman] institutions have improved, their wealth and population have diminished. Many causes have contributed to this deterioration. The first and great one is, that they are not producers. . . . His [the Turk’s] only professions are shop-keeping and service. He cannot engage in any foreign commerce, as he speaks no language but his own. No one ever hears of a Turkish house of business, or of a Turkish banker, or merchant, or manufacturer. If he has lands or houses, he lives on their rent; if he has money, he spends it, or employs it in stocking a shop. . . . The only considerable enterprise in which he ever engages is the farming of some branch of the public revenue.”6 3 Ubicini, Letters on Turkey, 1856, vol. 2, p. 75, n. 3. 4 Ibid., vol. 2, pp. 73–74, 216–17. 5 Nassau W. Senior, A Journal Kept in Turkey and Greece in the Autumn of 1857 and the Beginning of 1858, London: Longman, Brown, Green, Longmans and Roberts, 1859. 6 Ibid., pp. 210–11.

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Another book, Turkey in Europe, that gained a wide readership and was extensively quoted, was written by Charles Eliot7 between 1893 and 1898, when he served as a secretary at the British Embassy in Istanbul. Eliot devotes numerous pages to a description of the character and qualities of the osmanlı.8 With regard to their professional dispositions, he wrote: In fact, all occupations except agriculture and military service are distasteful to the true Osmanli. He is not much of a merchant: he may keep a stall in a bazaar, but his operations are rarely conducted on a scale which merits the name of commerce or finance. It is strange to observe how, when trade becomes active in any seaport or along a railway line, the Osmanli retires and disappears, while Greeks, Armenians, and Levantines thrive in his place. . . . The true Turk has three spheres of activity. First he is a government official. . . . Secondly, he is an agriculturalist and a breeder of animals. . . . Thirdly, the Turk is a soldier . . .9 What is the origin of this generalization? As mentioned, it was formed by Europeans residing in or visiting the main Mediterranean and Aegean port cities. The expansion of these cities in the second half of the 19th century was rapid, and one of the main characteristics of this process was an increase in the number of foreign and non-Muslim residents there and the substantial influence these two groups had on the economic development of those areas. In the early stages of the emergence of the generalization, it referred, first and foremost, to Istanbul and Izmir, whether explicitly or implicitly in the context of the narrative. With the passage of time, the generalization was applied to the entire Ottoman Empire. Hence, at its inception the generalization was the outcome of an ungrounded inductive impression. A further fallacy in this generalization was that the impression gained by outward appearances was deceptive, since it was easier to identify foreign and nonMuslim big merchants, bankers and investors than their Muslim counterparts. The latter generally did not expose their wealth, as they had no confidence that the authorities would respect private property rights. Although the müsadere (expropriation of property by the authorities) had been abrogated in 1837, and the imperial decree (khatt-i sherif Gülkhane) of 1839 determined that the authorities would respect private property rights with regard to all Ottoman subjects, the Muslim merchants’ concern over the expropriation of property did not wane for decades thereafter. During the period in which the generalization was formulated, foreign visitors, some of whom were not conversant in the local language, and who had only a casual knowledge of Ottoman society, could not have known that only 7 Odysseus (Charles Eliot), Turkey in Europe, 2nd ed., London: Edward Arnold, 1900. 8 In the late 19th century the term osmanlı denoted all subjects of the Ottoman Empire. Eliot, however, referred in the chapter discussed above to Turkish-speaking Muslim subjects only. 9 Ibid., p. 95.

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a short distance from the offices of Greek or Armenian big merchants, Muslim tujjār had their offices, and the scope of their business did not fall short of that of the non-Muslims. Hence, two fallacies (an inductive and a deductive one) underlay the very basis of the paradigm. The acceptance of this generalization by Europeans was facilitated by the way Ottomans were perceived in Europe generally. In the 16th century, the time of the great conquests in the Balkans and Central Europe, the prevailing image of the Ottomans was of fearless and ruthless soldiers. The Ottomans themselves unintentionally reinforced this image in ways that were perceived by Europeans as a lack of interest on the part of the Ottoman rulers in economic matters generally and trade in particular. The world of images and symbols in various cultures includes reverse or converse relations between soldiers and merchants, or between the battlefield and the marketplace. All of the above were congruent with 19thcentury reports from Istanbul and Izmir about the continued concentration of “the Turks” in the army and in administration, and their lack of interest in commerce and finance. Lastly, it would appear that there was an “Orientalistic” dimension in the formulation and dissemination of the generalization. From the 1840s onward, the influence of the European powers on the empire’s economy intensified, and from the 1870s until the outbreak of the First World War, important commercial and financial developments in the Ottoman state were in fact controlled by British and French bankers and merchants. It is therefore hardly surprising that nationals of these two countries justified this situation by highlighting “the Turks’” lack of interest and ability in all matters pertaining to the most dynamic economic sectors. From this point of view, the generalization legitimized the control of the Ottoman economy by foreigners and their Greek and Armenian protégés.

The Ethnic Division of Labor Paradigm During the First World War, a variant of the paradigm under discussion emerged. It contained distinctive additional elements, and is known as “the ethnic division of labor.” This new generalization was presented by Alphons J. Sussnitzki in an article published in 1917.10 Sussnitzki, a German journalist, contended that the non-Muslim ethnic groups in the Ottoman Empire at the end of the 19th and the beginning of the 20th century possessed unique occupational characteristics when examined in the context of the principal economic sectors (agriculture, industry and services). According to Sussnitzki, the “Turks” were mainly engaged in agriculture and were almost totally absent from the commercial and financial branches. He wrote: 10 Alphons J. Sussnitzki, “Zur Gliederung wirtschaftlicher Arbeit nach Nationalitäten in der Turkei,” Archiv für Wirtschaftsforschung im Orient, 2 (1917): 382–407. For the English translation, see Charles Issawi (ed.), The Economic History of the Middle East, 1800–1914, Chicago: University of Chicago Press, 1966, pp. 115–25.

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. . . trade is characterized by a very significant absence of the largest of the Turkish ethnic groups . . . . until the outbreak of the [First] World War the Ottoman Turks could not be counted among the mercantile elements of Turkey [emphasis in the original] . . . [they] have neither played a leading part in trade nor in general engaged in it on a large scale.11 Unlike the Turks, he continued, the Greek and Armenian subjects were in almost complete control of the commercial and financial branches. They were engaged in agriculture and industry as well, but their principal economic power lay in the economy’s dynamic branches: We first note the fact that in nearly every form of trade Armenians and Greeks dominate the field . . . in petty trade and petty credit activities, but also in wholesale internal trade, import and external trade, and in the high finance of Turkey, the Greeks and Armenians . . . have played the decisive role. Thus we find two nationalities which neither in agriculture nor in industry have such a great importance, exercising in trade a preponderant influence. . . . Neither the [Christian] Arabs and Persians, who are able traders, nor by and large the Jews, can compete with them.12 In explaining the abstinence from commerce of the Muslim population in Anatolia, Sussnitzki focused on two main factors. First, “The talents of the Turks suit them for all kinds of work that demand strength and dexterity, and thus in particular agriculture.” Second: The straightforward mind of the Turk, immediately directed towards its goal, is relatively far removed from the spirit of capitalism with its subtle profit-speculations and its practical methods of observation . . . they [the Turks] keep away from all activities which presuppose the speculative thinking of the capitalist entrepreneur . . . the special kind of purely commercial thinking and any inherent inclination toward trade are almost completely absent . . .13 Sussnitzki’s views regarding the influence of the Greeks, Armenians and Turks on the state of the Ottoman economy are ambivalent. On the one hand, he valued the economic contribution of the non-Muslim minorities, and his portrayal of their entrepreneurial qualities was written in a positive spirit. Articles on the role and contribution of private enterprise in the development of a modern economy were an important component in the discourse of social scientists in Germany at the time Sussnitzki wrote his article. Indirectly, he indicated that the key to progress 11 Sussnitzki, pp. 394–95; Issawi, p. 120. 12 Sussnitzki, pp. 396–97; Issawi, pp. 120–21. 13 Sussnitzki, pp. 400, 403; Issawi, pp. 122–23.

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was in the hands of non-Muslim businessmen. Yet, the article also contained racist comments about the Armenians and Greeks. He claims that their business success was achieved through deceit and fraud and their entrepreneurship was speculative – assertions that were worded to embrace all Armenians and all Greeks. In contrast to these non-Muslim communities, he emphasized the honesty, sincerity and good faith of the Turks.14 Conceivably, Sussnitzki sought to lead the reader to the conclusion that if these were the character traits of the Armenians and Greeks, who controlled such important economic branches as commerce and finance, it was hardly surprising that the Ottoman Empire found itself in a deep economic crisis. Two developments led to the formulation of this new variant, and both are connected with perceptions and attitudes prevailing in the public discourse in imperial Germany in the two decades preceding the First World War and during the war years themselves: (1) Scholars, journalists and writers of travelogues whose focus of interest was on the archeology, anthropology and history of Anatolia or the Ottoman Empire joined forces to support a significant aspect of Germany’s policy towards the Ottoman Empire in the period under discussion. This policy included support, to varying degrees, for the attitude of the Ottoman government toward the Armenian population of Anatolia and Istanbul. German writers accused the Armenians, and to a lesser extent the Greeks, of causing grave economic damage to the Ottoman economy and were to blame for the crisis in which the empire found itself. These accusations were accompanied by racist aspersions. Norbert Saupp15 and Hilmar Kaiser,16 who studied this subject, provide numerous examples of this attitude toward the non-Muslims. For example, Alfred Körte, a renowned German archeologist, published a number of articles in 1894 and 1895 in which he claimed that the Armenians were guilty of exploiting the Turkish farmers. Moreover, the Armenians were accused of cheating: “Wherever there is cheating in Anatolia it is connected with the Armenians” (“. . . wo man in Anatolia betrogen wirt, hat man es mit Armeniern zu thun”).17 Körte warned German businessmen who had investments in the Ottoman Empire of acts of cheating by the Armenians. They were an obstacle to advancing German economic and commercial interests in the East, and should consequently be weakened, he held. Articles written in German publications during the first decade of the 20th century and later, during the First World War, intensified their attacks on the Armenians. They were reported to exact exorbitant interest and to extort their borrowers, and,

14 Sussnitzki, ibid.; Issawi, ibid. 15 Norbert Saupp, “Das Deutsche Reich und die Armenische Frage, 1878–1914,” PhD dissertation, University of Köln, 1990. 16 Hilmar Kaiser, Imperialism, Racism, and Development Theories: The Construction of a Dominant Paradigm on Ottoman Armenians, Ann Arbor: Gomidas Institute, 1997. 17 Quoted by Kaiser, p. 11, n. 5.

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moreover, to serve the economic interests of Great Britain while harming the interests of their own country and of Germany. In an article written in 1917, Edward Banse went even further in justifying the persecution of the Armenians because they constituted a threat to the existence of the Ottoman Empire.18 (2) The negative attitude towards the Armenians was nurtured by another source that became increasingly popular in Germany at the end of the 19th and the beginning of the 20th centuries: “the racial theory.” According to this theory, negative qualities such as a proclivity for fraud, deceit and theft were inborn and common to entire ethnic communities, hence the conclusion that action must be taken against them. It was within the framework of this discourse in Germany that Sussnitzki’s article on the ethnic division of labor in the empire was written. It was presented to the reader as a study that to all intents and purposes was scientific, and as such it was accepted by scholars not only at the time of its publication but also decades later.19 Yet, does this article meet the threshold requirements of a scientific study? It appears that at least from two standpoints the answer is negative. First, Sussnitzki’s central thesis that the commercial and financial sectors were controlled by the Greeks and Armenians is unfounded and uncorroborated in the article itself. He did not provide any data or descriptive information that could validate his arguments. In the section in which he discussed commerce, he referred the reader to three sources20 which ostensibly address the control of the Greeks and Armenians over specific spheres of commerce, yet only one of the three is relevant to the thesis (a study of the fur trade in Istanbul and Asia Minor). Second, the article contains racist slurs against Ottoman Armenian subjects, and to a lesser degree against Greek subjects. Third, according to the criteria prevailing at the time, not to mention in later periods, the journal in which the article was published could not be considered a scientific publication. The Archiv für Wirtschaftsforschung im Orient was in fact an organ of the Deutsch-Türkische Vereinigung, which was founded in 1914 with the support and encouragement of the German foreign ministry. Among the founders and members of the association were representatives of German firms active in the Ottoman Empire, such as the Orient Bank, the Deutsche Bank and the Anatolische Eisenbahn-Gesellschaft. Together with the German foreign ministry, these firms financed an important part of the association’s activities. From the outset, the association’s main goal was to advance the dissemination of German culture and language in the Ottoman Empire. In time, additional roles were assigned to it, the most important of which was advancing German economic interests in the Ottoman Empire. To this end, in October 1915 the Association opened an office in 18 Ibid., p. 20, n. 36. 19 Issawi, pp. 114–15. 20 Sussnitzki, p. 396, n. 2; p. 398, n. 2.

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Berlin with the aim of providing up-to-date information to German businessmen on matters relevant to their activity, which would further their business interests in the Orient. In this context, a journal was founded to publish facts and figures about the Ottoman economy. Its articles were aimed at broadening the knowledge and understanding of German investors regarding Ottoman economics, politics and culture.

Refutation of the Paradigm Indisputably, the predominant paradigm and its variant have become part of the main narrative of the economic history of the Ottoman Empire in the long 19th century. This narrative is shared by historians from various schools of thought. It is therefore not surprising that the paradigm is to be found in academic textbooks, entries in professional encyclopedias, and books written by historians for a wide readership.21 Yet, along with the continued influence of the paradigm, there has been a new development in recent decades. From the 1970s onward, an increasing number of studies have been published pointing to the important role played by Ottoman Muslims in commerce, including foreign trade, and finance in various regions of Anatolia, the Fertile Crescent, the Arabian Peninsula and the Sudan. In the wake of scattered studies referring to the Muslim tujjār, published in the 1970s,22 a veritable tide of publications on this subject has appeared from the 1980s until the present.23 In the past thirty years, some fifty studies have been

21 See, e.g., Indzhikian Oganes Grigor’evich, Burzhuaziia osmanskoi imperii, Yerevan: Academy of Science of Armenian SSR, 1977, pp. 157, 159; Kireev Nikolai Gavrilovich, Razvitie kapitlizma v Turtsii: K kritike teorii “smeshannoi ekonomiki,” Moscow: Nauka, 1982, pp. 87–88; Charles Issawi, An Economic History of the Middle East and North Africa, New York: Columbia University Press, 1982, p. 89; Albert Hourani, A History of the Arab Peoples, London: Faber and Faber, 1992, pp. 286–87; Bernard Lewis, The Middle East: 2000 Years of History from the Rise of Christianity to the Present Day, London: Weidenfeld & Nicolson, 1995, p. 293. 22 See, for example, Hanna Batatu, The Old Social Classes and the Revolutionary Movements of Iraq, Princeton: Princeton University Press, 1978, pp. 266–81, 289–93. 23 See, e.g., Bağış, ibid.; Leila Tarazi Fawaz, Merchants and Migrants in Nineteenth-Century Beirut, Cambridge: Harvard University Press, 1983, pp. 95–97; Michael Field, The Merchants: The Big Business Families of Saudi Arabia and the Gulf States, Woodstock: Overlook Press, 1985, pp. 21–24; Gad G. Gilbar, “The Growing Economic Involvement of Palestine with the West, 1865– 1914,” in David Kushner (ed.), Palestine in the Late Ottoman Period, Jerusalem and Leiden: Yad Izhak Ben-Zvi and E.J. Brill, 1986, pp. 193, 201, 205, and Chapter 6 in this volume; Anders Bjørkelo, Prelude to the Mahdiyya. Peasants and Traders in the Shendi Region, 1821–1885, Cambridge: Cambridge University Press, 1989, pp. 124–30; James A. Reilly, “Damascus Merchants and Trade in the Transition to Capitalism,” Canadian Journal of History 27 (1992): 21–25; Donald Quataert, Ottoman Manufacturing in the Age of the Industrial Revolution, Cambridge: Cambridge University Press, 1993, pp. 149–50; Beshara Doumani, Rediscovering Palestine: Merchants and Peasants in Jabal Nablus, 1700–1900, Berkeley: University of California Press, 1995, pp. 61–81, 214–15; Hala Fattah, The Politics of Regional Trade in Iraq, Arabia, and the Gulf, 1745–1900, Albany, NY: State University of New York Press, 1997, pp. 77–83; Eugene L. Rogan, Frontiers of the State in the Late Ottoman Empire: Transjordan, 1850–1921, Cambridge: Cambridge University

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published in Western and Middle Eastern languages, wholly or partially devoted to the varied activities of the Muslim tujjār in the Ottoman provinces in Asia. These studies have focused on such topics as the activities and enterprises of the Muslim big merchants, their relations with the authorities, their investments in social services, and their perceptions of the world of trade. The broad scope of themes in the study of the Muslim tujjār was made possible, inter alia, by the use of a wide variety of new sources. Historians have employed five main categories of primary sources: (1) The private archives of tujjār families; (2) Documents in public archives (including records of shar‘ī courts) in Middle Eastern countries; (3) State archives of the European countries that had extensive trade relations with the Ottoman Empire, particularly Great Britain, France and Russia; (4) The archives of European trading houses and banks that were active in the region; and (5) Printed primary sources such as local newspapers, travelogues and memoirs. The picture emerging from this array of studies is that the Muslim tujjār played an important economic role in the long 19th century – especially in its latter part – in many cities and the rural hinterland.24 They were involved in foreign trade, regional (intra-Ottoman), and local trade. There were cities in which they played a central role in various types of trade (for instance in Sivas, Uşak, Damascus, Hama, Mosul, Nablus and Jiddah); cities in which they were active alongside with Greek, Armenian, Christian Arab and Jewish merchants (for instance in Basra, Aleppo, Jaffa, Baghdad and Erzurum); and cities, including the three biggest Ottoman Mediterranean and Aegean port cities – Istanbul, Izmir and Beirut, where the non-Muslim merchants were dominant but where the Muslim merchants played a distinct role in international and regional trade.25 Studies on the Muslim tujjār show that a considerable number were entrepreneurs. Thus, for example, they invested in expanding the cultivation of agricultural produce, including fruit, tobacco and wool in Anatolia, cereal and fruit in Syria, citrus in Palestine, dates in southern Iraq, pearl fishing in the Persian Gulf, and indigo in the Sudan. Muslim tujjār also invested in the production of craft and industrial products. Their initiatives in expanding carpet weaving in Anatolia, shipbuilding in Kuwait and soap production in Palestine and Syria are well known examples of their entrepreneurship. Many of these products, whether agricultural or industrial, were exported to the Asian and European markets. The tujjār also left their mark in the services sector, especially in traditional banking and overland, river and maritime transportation.26 In all of these activities the tujjār took great business risks that resulted in many cases heavy losses, but also huge profits. They constituted a significant element in Muslim Ottoman communities that was

Press, 1999, pp. 95–120; Sarah D. Shields, Mosul before Iraq: Like Bees Making Five-Sided Cells, Albany, NY: State University of New York Press, 2000, pp. 93–122. 24 Gad G. Gilbar, “The Muslim Big Merchant-Entrepreneurs of the Middle East, 1860–1914,” Die Welt des Islams, 43 (2003): 3–28. See Chapter 1 in this volume. 25 Ibid., pp. 21–24. 26 Ibid., pp. 7–11.

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open to change. The innovations they initiated or imported were not restricted to the economic sphere. Their investments in education, from elementary to the highest level, were particularly notable.27 The plethora of sources on the Muslim tujjār provides us with considerable information about the business careers of Muslim big merchant-entrepreneurs in Istanbul, Izmir, Bursa, Salonika, Damascus, Aleppo, Beirut, Baghdad, Mosul, Basra, Kuwait, Nablus, Jaffa, Jiddah and al-Matamma, among other locations. There were also tujjār families who went into politics and whose role in this sphere has become part of the national histories of Middle Eastern countries. The Sabancı family in Turkey, Quwatli in Syria, Bayhum and Salam in Lebanon, Khudayri in Iraq, Nabulsi and Masri in Jordan, Ghanim in Kuwait and Alireza in Saudi Arabia are well known examples. Tujjār families were part of the local elite in many communities in the Ottoman Empire and later in the Turkish and Arab states. In view of these studies, it is clear that the paradigm of the economic predominance of the non-Muslims in the Ottoman Empire, along with its variant, is no longer valid.

Conclusion Some thirty years after the publication of the first studies on the Muslim tujjār in the Ottoman lands in the long 19th century, the generalizations about non-Muslim predominance in the Empire’s economy are still common. The change of attitude toward this dominant paradigm has been slow thus far. The assimilation of the findings regarding the Muslim tujjār in the economic history of the Ottoman Empire has become apparent only recently, toward the end of the first decade of the present century. Why is the rejection of the paradigm so plodding? According to Thomas Kuhn this is not necessarily a long period, for the decline of a paradigm is usually a protracted process. Only when the gap between the theory (the generalization or paradigm) and the facts (historical evidence in our case) widens and deepens, does it become increasingly difficult for scientists (historians) to continue adhering to the old paradigm. The key question in this context refers to the duration of the process. In the history of science, there have been cases in which this process continued for many decades and even generations.28 With regard to the predominance paradigm, a number of factors may be mentioned that possibly influenced the potency and pace of change. Thus, for example, the public discourse in the West on the weakness of Muslim private enterprise in most Islamic countries in our generation was probably projected onto approaches and perceptions regarding the existence and functioning of Muslim entrepreneurship in the Mediterranean region in the last two centuries. Globalization and the 27 Ibid., p. 12. 28 Thomas S. Kuhn, The Structure of Scientific Revolutions, 2nd ed., Chicago: University of Chicago Press, 1970, pp. 150–52.

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significant role played by multinationals in the economic development of several Middle Eastern economies in recent decades accentuated the role played by foreign and non-Muslim entrepreneurs in the local economies. Yet, it is reasonable to assume that continued research on the Muslim tujjār, and, particularly, new quantitative studies on their enterprises and their impact on economic growth, will finally send the old paradigm and its variant to the graveyard of historiography.

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6 C H A N G I N G PAT T E R N S OF ECONOMIC TIES The Syrian and Iraqi Provinces in the Long 19th Century

Introduction Among different provinces, or more precisely, among different regions across the Ottoman Empire, economic relations of varied nature and scope existed in the eighteenth and nineteenth centuries. For example, there was the movement of manpower between Sudan and Egypt (Nubians), between Egypt and Palestine (the flight and settlement of fellahs), between Lebanon and Egypt (the migration of Christians and Muslims), and more. Obviously, capital flowed from most of the provinces to the centre, Istanbul, in the framework of payment of taxes to the central government. Nor was the transfer of new technologies lacking: methods of cultivation and irrigation in agriculture developed by Muḥammad ‛Alī in Egypt were applied (with limited success) by his son Ibrāhīm in several regions of Palestine and Syria when these areas were subject to his rule. Above all, there were lively commercial relations – direct trade and transit trade – between proximate and distant provinces and regions. Of notable importance, particularly in the last decades of the nineteenth century, was the direct trade between Palestine and Syria and Egypt, and between Anatolia and the Balkan provinces, or the transit trade between Egypt and southern Arabia. Finally, in several regions, most markedly western Anatolia and the Nile Valley, the wide-ranging movement of goods led to substantial investment in new means of transport, primarily railways. Between the Syrian provinces (especially Aleppo and Damascus) and the Iraqi provinces (Mosul, Baghdad and Basra) considerable trade relations had existed for lengthy periods since ancient times. Firm trade relations existed between the western and eastern parts of the Fertile Crescent from the first centuries of Ottoman rule. These relations underwent significant change in the course of the early phases of the modern age in the Middle East. This article addresses these trade relations, the changes that took place in them, and their influence on several aspects of the development of infrastructure as well as on social relations in the two regions – the Syrian and the Iraqi provinces.

DOI: 10.4324/9781003177425-8

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Direct Trade and Transit Trade The caravan route or the overland route between Aleppo and Baghdad was a section of one of the most important axes of international commerce in the Middle Ages linking the centres of production and trade in Europe to those of the Middle East and Far East (the “silk road”). It experienced many vicissitudes between the start of the sixteenth century, when the territory that it traversed came under Ottoman control, and the beginning of the twentieth. According to existing sources, the movement of goods along the Aleppo-Baghdad caravan route grew and flourished in the course of the sixteenth and seventeenth centuries. At the beginning of the latter there were “factories” of Venetian, French, British and Dutch merchants in Aleppo. Most of the trade on the route was in goods in transit. Woolen, silk and brocade cloths made their way from the west to Aleppo and thence to Baghdad and beyond, to the trading centres of Iran and India. Goods carried in the opposite direction were raw silk, indigo, galls, nuts, spices and pistachios.1 It is widely held that the discovery of the sea route to India via the Cape of Good Hope and the increase of commercial traffic from Europe to India adversely affected the volume of trade on the overland route, including the Aleppo-Baghdad section. It is likewise asserted that the use of the Alexandria-Suez overland route in Egypt also caused a decline in the use of the caravan route across the Syrian desert.2 It is also claimed that the deterioration in conditions of safety in the Syrian desert in the second half of the seventeenth century led to a steep fall in the use of this route.3 All these propositions require extensive research before they may be accepted as well-founded conclusions, for at the end of the seventeenth century and the beginning of the eighteenth, twice yearly a caravan numbering from 2,000 to 5,000 camels set out from Aleppo to Baghdad and in the opposite direction.4 Interest in the route grew in the second half of the eighteenth century, when the East India Company established a permanent postal route with fast riding camels.5 At the beginning of the nineteenth century there was still a very substantial movement of goods between Aleppo and Baghdad. From a detailed report by the French consul in Aleppo J.B.L.J. Rousseau for 1812, goods worth 5.9 million Ottoman ghurūsh (about ₤300,000) reached Aleppo from Baghdad via the overland route, a considerable sum in terms of that period. The main items were indigo from Lahore (2.0 million ghurūsh), and cloths (muslin, silk, cotton) from Bengal (1.4 million ghurūsh). The goods originating in Baghdad were fewer and their proportion in the total was small: tobacco (320,000 ghurūsh), cotton yarns 1 E. Weakley, “Report upon the Conditions and Prospects of British Trade in Syria,” PP, A&P 87 (1911), p. 40. 2 Charles Issawi, (ed.), The Economic History of the Middle East, 1800–1914, Chicago and London, 1966, p. 131; Weakley, p. 41. 3 C. P. Grant, The Syrian Desert, London, 1937, p. 50. 4 E. Elath, Britanya u-Netiveha le-Hodu, Jerusalem, 1971, p. 20. 5 Grant, p. 77.

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(40,000 ghurūsh), and cloths (whose value could not be determined accurately). In parallel goods were carried from Aleppo to Baghdad worth 1.5 million ghurūsh; these were locally manufactured cloths. The balance (or payment) for this “import surplus” was made through the transfer of cash from Baghdad to Aleppo.6 There is much evidence that from 1830 onwards the volume of trade fell off. Several factors combined to give rise to this process, but the most important was apparently the opening in 1869 of the Suez Canal to shipping. A decade after the opening of the canal, the British consul in Aleppo wrote: The gradual decline of the import trade during the ten years preceding 1876 [sic] was attributed to the cessation and diversion to other channels of the formerly large and flourishing transit trade. The opening of the Suez Canal undoubtedly inflicted a severe blow not only on the trade of Aleppo but on that of all Syria.7 About a year after this was written, the British vice-consul in Damascus reported the following: Damascus, it will be remembered, having now [1880] lost the chief sources of her formerly great wealth by the practical extinction of the overland route to Baghdad and Persia by the opening of the Suez Canal . . .8 The trend of developments reported by these sources was correct, but they possibly exaggerated their gravity. Trade on the overland route did not cease; it declined, but certainly continued. In 1911 Ernest Weakley submitted his report,9 which since its publication has become an important source for the study of the economic development of Syria in the years preceding the First World War. Dealing with the end of the first decade of the 20th century, Weakley refers to the passage of goods and travellers along the two main routes that connected the commercial centres of Syria with those of Iraq. 1. The Damascus-Baghdad route. In the early 20th century each year six caravans left Damascus for Baghdad, and a similar number set out in the opposite direction. The duration of the journey in each direction was 24 to 30 days (205 6 E. Wirth, Aleppo im I9. Jahrhundert. Ein Beispiel für Stabilität und Dynamik spätosmanischer Wirtschaft, lnstitut für Geographie Erlangen, 1986, pp. 17–18, table 3. See also H. Gaube, and E. Wirth, Aleppo. Historische und geographische Beiträge zur baulichen Gestaltung, zur sozialen Organisation und zur wirtschaftlichen Dynamik einer vorderasiatischen Fernhandelsmetropole, Wiesbaden, 1984, pp. 250–251. 7 “Report by Consul Henderson on the Trade and Commerce of Aleppo for the Year 1878,” PP, CR 19 (1879), p. 982. 8 “Report by Vice-Consul Jago on the Trade and Commerce of Damascus for the Year 1879,” PP, CR 26 (1880), p. 998. 9 PP, A&P 87.

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hours’ travel), and was made by camel or mule.10 The main goods that left Baghdad for Damascus were Persian carpets (Shirazi, Hamadani, Tabriai, etc.), which had been brought to Baghdad from Iran by way of Bushire. Some of them were sold in Damascus and the remainder were exported to Izmir, Istanbul, and beyond, to Europe. The value of the carpets that reached Damascus from Baghdad each year was estimated at ₤20,000 to ₤30,000. Another product that accounted for a major part of this trade was cloaks and ʿabayas. These items were manufactured in Iraq itself and they were acquired mainly by the nomads of Syria and Palestine. The value of these goods was estimated at ₤15,000 to ₤20,000 a year.11 Baghdad also exported dates to Damascus. Weakley gives no estimate of the total value of the goods sent from Baghdad to Damascus. A reasonable assumption is that they amounted to ₤50,000 or more annually.12 This figure constituted about 6 percent of the total goods imported to Damascus from abroad (that is, from outside the Syrian provinces) in the closing years of the first decade of the 20th century. The chief products exported from Damascus to Baghdad on the overland route were string and cotton goods and locally manufactured silk. The value of the string was estimated at approximately ₤20,000. Weakley was unable to obtain evaluations of the worth of the other goods transported by the caravans that departed for Damascus. However, he was told that the figures involved were considerable. The inauguration of the Hejaz Railway (Damascus-Medina) led in its turn to a rise in the number of passengers on the overland route from Baghdad to Damascus and back. This was because many pilgrims from the Iraqi provinces (particularly Baghdad) preferred the Baghdad-Damascus route (the caravan route) and the Damascus-Medina route (railway) to the alternative routes. From 3,000 to 4,000 people crossed the Syrian desert yearly from Baghdad to Damascus en-route to the holy cities of Islam in the Hejaz. To this traffic was added the pilgrimage in the other direction, from Damascus to Baghdad: the wealthier members of the Shi‛ite community in Lebanon journeying to the Shi‘a holy places in Iraq.13 2. The Aleppo-Baghdad route: This historic route had two tracks at the beginning of the 20th century: the ancient overland track (a journey totalling 177 hours) or the overland track in combination with a river voyage down the Euphrates (a journey of 23–24 days). The Aleppo merchants supplied local and imported goods to the settled and nomadic populations located along the course of the Euphrates down to Baghdad itself. The caravans that left Aleppo carried soap and native and imported textiles. At the beginning of the 20th century Aleppo annually exported 800,000 okas of soap and 1,000 bales of cotton cloth.14 The source does not state the value of these goods, nor does it note which goods were sent from Baghdad to Aleppo. 10 11 12 13 14

Weakley, p. 79. Ibid., p. 34. Ibid., p. 33. Ibid. Ibid., p. 80. 1 Ottoman oka = 2.82 lbs.

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In addition to these two main tracks there was also goods traffic on the AleppoMosul route. The caravans leaving Aleppo for Mosul (20 days in winter and 50 days in summer) carried locally made soap and cotton goods, coffee and even oil (the TPC had not yet been established).15 Weakley gives no details of the goods transported from Mosul to Aleppo. The values of all the goods imported in the years 1906–08 via Alexandretta, the greater part of which were directed to Aleppo, amounted to approximately ₤2 million, and the value of goods exported was ₤1.4 million.16 Hence, even with the little information at our disposal on the volume of trade between Aleppo and the Iraqi provinces, there is no doubt that its share of the city’s trade was very small. Clearly, therefore, commerce at the start of the 20th century between Damascus and Aleppo and Baghdad was most circumscribed. It consisted partially of the transit trade – carpets from Baghdad to Damascus, oil from Aleppo to Mosul – a mere shadow of the abundance of traffic in the days that preceded the use of the passage around the Cape of Good Hope, the Erzerum-Tabriz route, and the Suez Canal.

Integration Into the World Economic System In the same period as the decline of the transit trade in the course of the 19th century and the restrictive effect on the economic development of Aleppo and Damascus, there occurred a process whose magnitude and influence were incomparably greater, namely, the “economic integration” of the Middle East into the world economic system. Syria and Iraq almost ceased to be areas through which goods passed but areas that produced increasingly large quantities of goods that they exported directly by sea to consumer economies to their west and east. The scale of the process was unprecedented. The growth rates in volume and value of foreign trade of Syria and Iraq were extremely high, in both absolute and relative terms. However, there is no way of determining the growth rates precisely. The data on sea-borne trade, and all the more on overland trade, are very sketchy, and they include transit trade with the provinces in Anatolia and the Arabian Peninsula. Also, there is the difficulty of translating values in current prices into values in fixed prices. Clearly, the figures given below are no more than estimates expressing magnitudes in rough outline. Charles Issawi, on the basis of the figures supplied by Paul Masson, John MacGregor and others, gives the sum of ₤500,000 as the total sea-borne foreign trade (imports and exports) of Syria (including Palestine) in 1820.17 In the 1860s the figure according to Issawi’s sources was ₤4.5 million, and in 1910 it was ₤10 million.18 In current prices this was a twenty-fold increase in the value of trade. In fixed prices the increase between 1820 and 1910 was still greater – thirty-fold 15 16 17 18

Ibid. Ibid., p. 42. Issawi, p. 208. Ibid.

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(prices in 1820 were 1.5 to 2.0 times higher than prices in 1860 and 1910).19 As for the later part of the period under discussion, Mohammad Sa’id Kalla gives the following estimates, based on figures of the British Commercial Reports (a series published by the Foreign Office and the Board of Trade) for total sea-borne trade: In the 1880s it was ₤6.3 million and in 1913 it was ₤ 10.6 million. Kalla also provides separate data for exports and imports: exports increased from ₤2.3 million in 1883 to ₤3.8 million in 1913, and imports rose from ₤4.0 million to ₤6.9 million in the same period.20 The sea-borne trade of Iraq also grew considerably, but no estimate can be given as to the rates of this growth in the period before the 1860s, owing to the absence of figures. But the data of the 50 years prior to World War I are enough to confirm that there was a very substantial growth, which in relative terms was far higher than the growth rates in Syria. According to the study of M.S. Hasan, the total sea-borne foreign trade of Iraq increased from ₤438,000 in 1864–71 (annual average) to ₤6.4 million in 1912–13,21 that is, a fifteen-fold increase in current prices and a similar increase in fixed prices. Unlike Syria, in Iraq the import surplus was smaller: total exports amounted to ₤3.5 million in 1912–13.22 This great growth in the volume of foreign trade became possible primarily as a result of the vast expansion of agricultural production. The Syrian provinces exported mainly cocoons and raw silk, animal and pastoral products (wool, hides) and fruit (principally oranges). The chief exports of the Iraqi provinces were dates, wool, wheat and barley. As for imports, in both the Syrian and Iraqi provinces these mostly consisted of diverse textiles, intermediary products (such as cotton yarn, metals and wood), and foodstuffs such as sugar (Syria and Iraq) and tobacco (Syria).23 In parallel with the growth in volume of trade, a change occurred in the destinations of the exports and of the sources of the imports. In respect of the Syrian provinces, the commercial and economic ties with France became stronger; most of the exports were directed to that country, and also to Britain, which at the end of the period under study became the most important source of imports. Regarding the Iraqi provinces, Britain and India were the main partners in both the export and the import trade.24 In this context an important fact is that this trade was all sea-borne, implemented by means of cargo vessels or freighters. Transport was mostly direct from the producing (exporting) economy to the consumer (importing) economy. The destinations of this trade by steamer along the old and new sea routes pushed aside the Baghdad-Aleppo overland route for the transport of transit

19 Ibid. 20 M.S. Kalla, “The Role of Foreign Trade in the Economic Development of Syria, 1831–1914,” Ph.D. dissertation, The American University, Washington D.C., 1969, table I, pp. 254–259. 21 Issawi, p. 132. 22 Ibid. 23 Based on Kalla, tables II and IV, pp. 260–263, 266–272; M.S. Hasan, “Foreign Trade in the Economic Development of Iraq, 1869–1939,” D. Phil. thesis, Oxford University, 1958, pp. 304–354. 24 Issawi, pp. 132, 209.

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goods or locally made products in the commercial and economic circumstances of the Fertile Crescent in the 19th and early 20th centuries. It is not surprising that the change in the dimensions and directions of the trade led to the growth or expansion and flourishing of most port cities in the Syrian and Iraqi provinces. These cities grew rapidly in the number of their residents and their built-up area. They attracted foreign investments. New educational and health institutions developed in them. And perhaps most important of all in this context, a group of big merchants developed in them, specialists in foreign trade, who set up branches in other large trading centres in the region itself, in the Far East, and in Europe. From the substantial profits of this activity the big merchants accumulated great wealth, and they became an important element of the economic elite both in Syria and Iraq.

The Big Merchant Elites The commercial elites of Baghdad and Beirut were especially influential in their economic power and the range of their activities. Baghdad: The group of big merchants in Baghdad in the 18th and 19th centuries consisted mostly of Jews. But while in the 18th century their main activity had centred on the transit trade, and they had firm connections with Jewish and Muslim merchants in Aleppo and Damascus, in the nineteenth century an acute change took place. Their operations became increasingly engaged in expanding commercial ties with the trading centres in India and the Far East, as well as with the large commercial centres of the west, mainly Britain. Trading with the countries to the east of Iraq involved the establishment of Jewish merchant communities in the important urban centres of southeast Asia. The Jewish merchant communities of Bombay and Calcutta, Hongkong and Shanghai were especially prominent. The Sassoon, Gabbai, Ezra (Bahar), Yehuda and Benjamin families became renowned for the scale of their business activities and their status in these cities. They controlled a considerable part of the trade in textiles, indigo, and opium in Iraq, Iran, India and China. In time they expanded their operations and set up business links in the Far East for the British market. It is not surprising that after the First World War these merchant families transferred their administrative and financial headquarters to London and other business centres in western Europe. At the same time, some of these and other families developed wide-ranging banking activities. In this sphere the Sassoon family (who founded the Exchange Bank for East Indian Business) and the Khedoury family were outstanding.25

25 There is extensive literature on the rise of Jewish merchant and banking families. See, e.g., C. Roth, The Sassoon Dynasty, London, 1941, pp. 38–64, 72–93; D.S. Sassoon, A History of the Jews in Baghdad, Letchworth, 1949, pp. 203ff.; N. Rejwan, The Jews of Iraq, London, 1985, pp. 182–184; A. Ben-Ya‘akov, Yehudei Bavel ba-Tfuzot, Jerusalem, 1985, pp. 67–70, 74–110, 128–135, 141– 160, 172–191, 213–225; K. Grunwald, “ha-Banqa‘im ha-Yehudim be-Iraq,” Hamizrah Hehadash, 11 (1961): 163–165.

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A striking fact is that in the advanced stages of the business activities of these merchant families, when they had branches and offices in many of the commercial junctions of China, India, Egypt, and Turkey, the majority of them did not open branches in Aleppo or Damascus. This was because the scope of their commercial connections and the dimensions of their economic activity in Syria did not warrant the establishment of branches there. Beirut: The primacy of Beirut as the largest commercial centre of the Syrian provinces was evident at the beginning of the 20th century. The foreign trade of this city was to a great extent in the hands of Christian merchant families, although big Muslim and Jewish merchant families were not wanting. Christian merchants were especially prominent in the most important export branch of Syria, namely, silk. The Bassūl, Farʿūn, Fayyād, Ṣabbāgh, and Lahūd families controlled the export of silk through the port of Beirut. These families had firm connections with the silk trading houses in France, particularly in the city of Lyon. The strong connection with the French business world did not of course begin in the middle of the 19th century, but it expanded, as did the commercial links between the merchants of Beirut and their colleagues in France. Economic ties of many of the Beirut big merchants with suppliers in the Far East were also maintained in the setting of the business world and trade ties of France. For example, silk from China was imported to Beirut through French companies and was transported by sea. Not surprisingly, direct trade with the commercial centres of Iraq was very small; this was true of the transit trade as well.26 There were no noteworthy business connections between the commercial elites of Baghdad and Beirut themselves and even fewer social ties. Commercial orientation and economic activity were not directed from one to the other. These were no longer elites located along an international trade artery, but families of merchants, each individually connecting local producers and local demand to the regional and international economic systems. In parallel with these developments in Baghdad and Beirut, the steep drop in the share of the transit trade and direct Syrian-Iraqi commerce caused a decrease in the economic power of the big Muslim merchant families in Aleppo and Damascus,27 who for prolonged periods had maintained firm business connections with the merchants of Baghdad and Basra.

Railway Projects Regional and international caravan trade routes benefitted by the partial or complete laying of railway lines, depending on their course. Like other major trade routes, the Aleppo-Baghdad “silk road” attracted the attention of European 26 On the Christian merchant families who specialized in silk exports see G. Ducousso, L’industrie de la soie en Syrie, Paris-Beyrouth, 1913, pp. 233–235; D. Chevallier, “Lyon et la Syrie en 1919, les bases d‘une intervention,” Revue Historique, 214 (1960), pp. 296–297. 27 On the decline of the Muslim merchants in Aleppo see Kāmil al-Ghāzzi, Nahr al-zahab fī tārikh Ḥalab, Aleppo, 1923, vol. 1, pp. 361ff.

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entrepreneurs and investors, even in the relatively early stages of the race to lay railways across the colonial world. Many plans were drawn up. Some were elaborated in detail and others went into preliminary implementation stages. The first initiative to elicit a real response was the project of the Association for the Promotion of the Euphrates Valley of 1856. The leading spirit behind this project was William Patrick Andrew, who had acquired much experience of railway construction in India and who in those years was the chairman of the Sind, Punjab and Delhi Railway, one of the most important rail companies in the 19th century on the Indian subcontinent. Andrew’s plan was to lay a railway from the port of Salwaqiyya near Antioch on the Mediterranean to Aleppo and thence to Qasir Ga‘bar on the Euphrates, Hit and Baghdad, with its terminal at Qarna or Basra. According to Andrew’s calculations, the length of the line between the Mediterranean Sea and the Persian Gulf would reach 900 miles. Construction, according to estimates deemed at the time highly optimistic, was priced at ₤16 million (in prices of the mid-1850s). The project aroused great interest in London and won wide support. Queen Victoria gave the scheme her blessing; Lord Clarendon, the Foreign Secretary, announced that the government supported the establishment of the railway; and the City welcomed this investment with great optimism, so that there was great demand to purchase the company’s shares – and all this before the company had legally obtained the concession from the Ottoman government. The British ambassador in Istanbul took energetic steps to obtain the concession, and in January 1857 the sultan’s seal was applied to the firmān that granted it. Land required for the construction of the railway was leased free of charge to the company for a period of 99 years and a guarantee was given by the Ottoman government of a minimum return on investment of six percent annually.28 To the surprise of the initiators of the project and to the bitter disappointment of the company’s shareholders, the British government refused in August 1857 to give its own guarantee.29 In the absence of such a guarantee, the enterprise lost its credibility, and the company found it no longer possible to raise capital. The entire project was doomed. Attempts in the 1860s and 1870s to win British government financial backing for the Syrian-Iraqi railway scheme all failed.30 So when the Ottoman period came to a close there was no direct rail link from Aleppo or Damascus to Baghdad or Basra. We may ask why, despite the repeated efforts to obtain the required firmāns in Istanbul, despite extensive preparations, work on the site, mobilization of funds, and efforts to gain political support, all the initiatives to lay the railway utterly failed. Historians attribute great importance to the refusal of the British government to guarantee a minimum return of six percent annually on capital invested in the

28 Elath, pp. 113, 118–119, 123–125. 29 Ibid., p. 131. 30 Ibid., pp. 141–151, 157–180.

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railway.31 It may be asked why the British government – first that of Lord Palmerston and later that of Gladstone – refused to guarantee the project. Three reasons emerge from examination of the sources. The first is the British government’s position, firmly maintained in the second half of the 19th century, not to become involved directly in the business of private investors overseas. A world view and practical considerations underlay this attitude. The reluctance to be involved in the Euphrates Valley Railway project was especially great, because the guarantee that the entrepreneurs wanted might have had to be realized in a short time on account of the financial difficulties of the Ottoman government, which in those years were growing steadily worse. In view of the many successes of private British companies in completing major projects (including the laying of railways) without British government financial protection, neither Palmerston nor Gladstone believed that there was any justification for government support of the Syria-Iraq railway. The second reason concerned the complex relations between Britain and France in the second half of the 19th century and the start of the 20th. The rivalry between these two powers over influence in Egypt and the Levant was fierce. In the 1850s and 1860s tension between them mounted as a result of friction over the cutting of the Suez Canal. While Napoleon III supported the plans of de Lesseps, Palmerston was opposed to them. The latter wished to reduce the points of disagreement with the French, and because they were against the Euphrates Valley Railway project Palmerston refused to support it. Thirdly, from the time of the opening of the Suez Canal to shipping, especially after preparations for the passage of large vessels were completed in 1872, interest in the railway project declined considerably. As the years passed and the Suez Canal served the military and economic needs of Britain far beyond expectations prior to its construction, interest faded both among government circles and among entrepreneurs and investors in the railway project. To these reasons the economic factor must be added. It seems that hesitation over the economic advantages, in other words the profit potential of the railway line, was present from the earliest stages, already in 1856, many years before the Suez Canal had become a reality. In view of the uncertainty of how profitable the project might prove, it was important, indeed an essential condition for successfully raising funds from private investors, to ensure a government guarantee (British, naturally) of a minimum return on capital invested in the railway project. But like the investors, the statesmen too had little faith in the likelihood of this project bearing fruit, and so refused to proffer the guarantee. The contemporaries of the scheme appear not to have been mistaken in their cautious estimates. Analysis in the light of hindsight, with the perspective of four or five generations, makes it manifestly clear that there was no economic justification for laying a railway between Syria and Iraq in the late Ottoman period owing to the small volume of all varieties of trade between the western Fertile Crescent and the eastern. 31 Issawi, p. 137; Elath, pp. 131ff.

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Conclusion When the Supreme Council of the Allies convened at San Remo in April 1920 to formally determine the political fate of the Ottoman territories in the Fertile Crescent, the economic realities of the Syrian and Iraqi provinces did not constitute factors or forces capable of impeding, certainly not preventing, the establishment, among others, of two separate political entities or units – mandatory Syria and Iraq. There was no movement of workers, capital or technology between these provinces. Even the movement of goods (direct and transit trade) and travellers was very limited in scope. Rapid, safe and cheap means of transport (in early 20-century terms) connecting the two regions did not exist. There were no other factors, such as joint exploitation of or dependency on any resources whatsoever (water, oil, etc.), that might necessitate a firm link between the two regions. It is not surprising therefore that there did not arise in the Syrian and Iraqi provinces social groups with a common interest, in the existence of a physical and political infrastructure that would facilitate direct, undisturbed, profitable and convenient economic relations between them. Otherwise stated, no evidence has so far been found to show that urban classes, primarily the group of big merchants, acted energetically and decisively against the creation of two separate political entities along the Aleppo-Damascus-Baghdad-Basra axes for economic reasons. It should be remembered that separate frameworks meant customs, trade restrictions, a variety of different laws and regulations, different currencies, etc. As stated, the merchant elites developed a “global” orientation (commercial links with the leading economies in Europe and the “colonial world” attached to them). Intra-regional links in the Fertile Crescent itself played no real part in the expansion and prosperity of these merchant elites. From the viewpoint of this study it seems that the division of the Ottoman Fertile Crescent by Britain and France at the beginning of the 20th century was greatly facilitated by the economic developments that had made their appearance in the 18th century and had matured in the second half of the 19th. In other words, the political partition of the region by the Western Powers was preceded by a weakening of the economic ties between the two main parts of the Fertile Crescent, a process set off by economic forces originating in the western states themselves – Britain and France. A comparison naturally emerges of the economic ties between Syria and Iraq in the generations preceding the political division of the Fertile Crescent with the development of economic relations among the political units of Germany and of Italy in the period before their unification in the last generation of the 19th century. In both European countries economic processes were of extreme importance in the complex of factors that led to unification. In both, particularly Germany, economic and merchant elites played a significant role in breaking down barriers and in weakening several traditional political elites that opposed unification. However, it should not be inferred from the way events progressed in Germany and Italy that only the tenuousness of the economic links and the lack of interest

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in them on the part of the economic and commercial elites of Syria and Iraq led to the loss of unity of the Fertile Crescent from the days of San Remo. The causes of the division of the Fertile Crescent were many and complex, and certainly the economic component was not predominant among them. All we can say is that the forces operating in favour of the division of the Fertile Crescent were not offset by economic and social factors.

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7 THE GROWING ECONOMIC I N V O LV E M E N T O F PA L E S T I N E W I T H T H E W E S T, 1 8 6 5 – 1 9 1 4

I The late 1860s mark the beginning of a new period in the economic and social development of Ottoman Palestine. During the 45–50 years prior to World War I Palestine’s economy underwent a process of modernization and growth surpassing both in force and scope anything it had experienced during the first seven decades of the 19th century and perhaps ever since the Ottoman conquest of the country. Nor did Palestine lag behind other economies in the Middle East, such as those of Syria, Anatolia and Iran, in the thrust of the economic changes that it underwent during the period under discussion.1 The modernization and growth that resulted from the increase of inputs of the factors of production, including technological changes, were not only expressed in an increase in the national product, but in important structural changes as well in the sectors of agriculture, manufacture and services, in the patterns of consumption and savings, and in the distribution of capital and incomes. These economic processes helped to generate a number of important social changes, the most outstanding of which was the emergence of a new layer among the elite of Palestinian Arab society. At the root of these economic and social developments was a factor that was exogenous to the economy and society of Palestine. It was not Ottoman reforms, nor Templar settlement, nor the first Jewish waves of immigration, nor even foreign activity in Palestine in general that had caused them, but the fact that at the time Palestine’s economy became increasingly linked to the world economic system, and particularly to the economies of Europe (see Tables 7.1 and 7.2). This connection exposed Palestine’s economy to the influence of the changes taking place in the economies of Europe, and generated new forces and processes within it. However, though the moving factor was external, the bearers of this growth were primarily local Arab-speaking Muslims and Christians. 1 For a different conclusion see Gabriel Baer, “The Impact of Economic Change on Traditional Society in Nineteenth Century Palestine” in Moshe Ma’oz (ed.), Studies on Palestine during the 0ttoman Period (Jerusalem, 1975), pp. 495–498. DOI: 10.4324/9781003177425-9

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Table 7.1 Tonnage of Sailboats and Steamships (entered), Jaffa Port, 1879–1913 Sailboats 1879 1881 1882 1884 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

Steamships

25,821 29,337 17,362 24,146 21,167 20,396 21,467 17,395 – 20,445 17,186 23,807 – 15,934 17,362 14,003 20,994 17,118 15,955 15,188 11,161 12,429 13,711 15,653 18,277 16,885 21,815 15,648 21,379 23,630 12,079 16,166

188,016 195,798 – 192,872 438,177 441,306 439,039 393,352 – 379,721 422,171 513,775 – 587,734 493,973 500,499 510,844 412,326 507,575 617,645 503,926 576,820 704,936 803,325 907,680 912,076 1,014,557 1,154,771 1,115,391 1,025,461 1,014,084 1,160,315

Total 213,837 225,135 – 217,018 459,344 461,702 460,506 410,747 454,254 400,166 439,357 573,582 536,959 603,668 511,335 514,502 531,838 429,444 523,530 632,833 515,087 589,249 718,647 818,978 925,957 928,961 1,036,372 1,170,419 1,136,770 1,049,091 1,026,163 1,176,481

Sources: 1879 Amzalak, “Jaffa, 1879,” CR 26, pp. 1016–1017. 1881 Amzalak, “Jaffa, 1881,” CR 36, pp. 1157–1158. 1882 Amzalak, “Jaffa, 1882,” CR 20, pp. 633–634. 1884 Amzalak, “Jaffa, 1884,” CR 19, pp. 970–971. 1886 Moore, “Jaffa, 1886,” DCR 164, p. 2. 1887 Moore, “Jerusalem, 1887,” DCR 363, p. 3. 1888 Moore, “Jaffa, 1888,” DCR 529, p. 2. 1889 Kayat, “Jaffa, 1889,” DCR 773, p. 2. 1890–1891 Dickson, “Palestine, 1890–91,” DCR 1023, p. 7. 1892 Dickson, “Palestine, 1892,” DCR 1186, p. 6. 1893 Dickson, “Jerusalem, 1893,” DCR 1350, p. 8. 1894–1895 Dickson, “Jerusalem, 1895,” DCR 1698, p. 9. 1896 Dickson, “Jerusalem, 1896,” DCR 1872, p. 9.

(Continued)

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Table 7.1 (Continued) 1897 Dickson, “Jerusalem, 1897,” DCR 2050, p. 12. 1898 Dickson, “Jerusalem, 1898,” DCR 2217, p. 10. 1899 Dickson, “ Palestine, 1899,” DCR 2405, p. 9. 1900 Dickson, “Palestine, 1900,” DCR 2584, p. 10. 1901 Dickson, “Palestine, 1901,” DCR 2822, p. 9. 1902 Dickson, “Palestine, 1902,” DCR 2962, p. 10. 1903–1907 Blech, “Palestine, 1907,” DCR 3974, p. 21. 1908–1910 Satow, “Jerusalem, 1910,” DCR 4697, p. 13. 1911–1913 McGregor, “Jerusalem, 1913,” DCR 5339, p. 16.

Table 7.2 Visible Imports and Exports by Countries, Jaffa Port, 1885 and 1913 Imports1

Exports

1855 £’000 Great Britain2 France Austria Russia Germany Italy Egypt Turkey Total

52 63 64 18 5 3 41 26 288

1913

1855

%

£’000

%

18 22 22 6 2 1 14 9 100

195 112 114 108 74 20 72 325 1,313

15 9 9 8 6 2 5 25 100

£’000 24 29 7 7 – 17 30 18 133

1913 % 18 22 5 5 – 13 23 14 100

£’000 208 48 28 48 23 10 265 80 745

% 28 6 4 6 3 1 36 11 100

Notes: 1 Including transit trade. 2 Including British Colonies. Sources: 1885 Moore, “Jaffa, 1886,” DCR 164, p. 3. 1913 McGregor, “Jerusalem, 1913,” DCR 5339, pp. 15–16.

II Growth in the volume of Palestine’s foreign trade was apparent in the period under discussion. The available data are insufficient to enable us to reconstruct comprehensive periodical series of the visible imports and exports, let alone of the invisible imports and exports. However, they do give us an indication of the main trends. It seems that from the late 1860s onwards, visible imports grew in absolute terms at ever-increasing rates. These rates were particularly high in the years 1906–1913. Thus, for example, visible imports through Jaffa port rose in current prices from £137 thousand in 1873 to £460 thousand in 1905 and to £1.313 million in 1913. The total visible imports through the three main ports of Palestine (Jaffa, Haifa and Gaza) amounted to £1.951 million in 1913 (see Table 7.3). The main import items (Jaffa port) were cotton goods and foodstuffs – i.e., coffee, sugar, rice, flour and tobacco (see Table 7.4). 121

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Table 7.3 Visible Imports and Exports Through the Ports of Jaffa, Haifa and Gaza, 1873– 1913 (in £ at current prices) Imports Jaffa 1873 1874 1875 1876 1877 1879 1881 1882 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

137,000 113,871 110,668 230,822 198,596 231,079 246,178 281,298 271,440 287,740 240,880 232,045 253,065 275,622 259,811 287,700 342,597 349,540 273,233 275,990 256,090 306,630 322,430 390,260 382,405 426,310 405,550 439,775 473,320 460,000 660,000 809,000 803,400 973,143 1,002,450 1,169,910 1,090,019 1,312,695

Exports Haifa1

– 199,000 284,500 – 399,100 375,100 460,400 530,000

Gaza

65,500 62,200 105,150 78,060 62,315 53,250 96,495 108,230

Total

Jaffa

Haifa1

Gaza

Total

– 1,070,200 1,193,050 – 1,463,865 1,598,260 1,646,914 1,950,925

247,000 207,516 258,156 436,257 119,314 188,414 248,538 280,028 117,034 132,579 119,555 186,371 204,315 244,561 447,010 400,530 258,466 332,628 285,604 282,906 373,447 309,389 306,780 316,158 264,950 277,635 203,390 322,335 295,300 370,000 500,000 484,340 556,370 560,935 636,145 710,660 774,162 745,413

– 272,700 371,700 – 70,500 90,000 346,700 200,000

205,100 9,200 206,240 49,760 10,162 77,150 67,000 161,120

– 766,240 1,134,310 716,807 877,810 1,187,862 1,106,533

Note: 1 Data include Acre Sources: 1873–1877 Avitsur, Nemal Yafo, Appendix, Table 9. 1879 Amzalak, “Jaffa, 1879,” CR 26, pp. 1012, 1014.

(Continued)

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Table 7.3 (Continued) 1881 Amzalak, “Jaffa, 1881,” CR 36, pp. 1153, 1155. 1882 Amzalak, “Jaffa, 1882,” CR 20, pp. 629, 631. 1884 Amzalak, “Jaffa, 1884,” CR 19, pp. 966, 968. 1885–1886 Moore, “Jaffa, 1886,” DCR 164, pp. 2–3. 1887–1888 Moore, “Jaffa, 1888,” DCR 529, pp. 1–2. 1889 Kayat, “Jaffa, 1889,” DCR 773, pp. 1–2. 1890–1891 Dickson, “Palestine, 1890–91,” DCR 1023, pp. 5–6. 1892–1893 Dickson, “Jerusalem, 1893,” DCR 1350, p. 7. 1894–1895 Dickson, “Jerusalem, 1895,” DCR 1698, pp. 7–8. 1896–1897 Dickson, “Jerusalem, 1897,” DCR 2050, p. 11. 1898–1899 Dickson, “Palestine, 1899,” DCR 2405, p. 8. 1900–1901 Dickson, “Palestine, 1901,” DCR 2822, p. 8. 1902 Dickson, “Palestine, 1902,” DCR 2962, pp. 8–9. 1906 Freeman, “Palestine, 1906,” DCR 3771, p. 11. 1903–1907 Blech, “Palestine, 1907,” DCR 3974, pp. 19–20, 24. 1907–1908 Heard, “Beirut, 1908,” DCR 4329, p. 25. 1908–1910 Salow, “Jerusalem, 1910,” DCR 4697, pp. 11–12, 19–20. 1909–1912 Husaynī, p. 149. 1911–1913 McGregor, “Jerusalem, 1913,” DCR 5339, pp. 14–15, 19–20. 1913 Kalla, “Foreign Trade, “ p. 257.

Table 7.4 The Three Major Import Items, Jaffa Port, 1879–1913 (in £ at current prices and percents)

1879 1881 1882 1884 1885 1886 1887 1888 1889 1890 1891 1892

I

II

III

Total

73,333 sugar 31.7 75,000 sugar 30.5 77,197 sugar 27.4 62.868 sugar 23.2 68,960 sugar 24.0 46,080 cotton goods 19.1 48,60 0 cotton goods 20.9 66,500 cotton goods 26.3 90,800 cloth 32.9 77,000 cotton goods 29.6 71,500 cotton goods 24.9 78,850 cotton goods 230

29,574 rice 12.8 44,333 fancy goods 18.0 49,506 rice 17.6 46,506 rice 17.1 42,300 rice 14.7 36,000 sugar 14.9 33,750 sugar 14.5 43,300 rice 17.1 74,000 cotton goods 268 27,300 fancy goods 10.5 61,500 timber 21.4 77,500 timber 22.6

27,852 coffee 12.1 30,367 rice 12.3 41,321 fancy goods 14.7 39,600 cotton goods 14.6 41,850 cotton goods 14.5 22,400 fancy goods 9.3 25,400 fancy goods 10.9 23,900 fancy goods 9.4 46,200 rice 168 22,000 rice 8.5 28,000 iron 9.7 30,240 rice 8.8

231,079 100 246,178 100 281,298 100 271,440 100 287,740 100 240,880 100 232,045 100 253,065 100 275,622 100 259,811 100 287,700 100 342,597 100 (Continued)

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Table 7.4 (Continued)

1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 191 3

I

II

III

Total

74,900 cotton goods 21.4 60,550 cotton goods 22.2 61,125 cotton goods 22.1 59,250 cotton goods 23.1 59,700 cotton goods 19.5 56,600 cotton goods 17.6 61,500 cotton goods 15.8 15,050 cotton goods 30.1 100,600 cotton goods 23.6 112,900 cotton goods 27.8 175,000 cotton goods 39.8 160,000 cotton goods 33.8 1 80,000 cotton goods 39.1 259,000 cotton goods 39.2 267,670 cotton goods 33.1 231,750 cotton goods 288 261, 785 cotton goods 26.9 244,550 cotton good s 24.4 262,340 cotton goods 22.4 243,080 cotton goods 22.3 240,800 cotton goods 18.3

60,200 timber 17.2 35,500 rice 13.0 36,000 sugar 13.0 35,750 sugar 14.0 43,105 coffee 14.1 41,600 sugar 12.9 51,200 coffee 13.1 36,440 rice 9.5 53,500 flour 12.6 62,500 flour 15.4 39,600 tobacco 9.0 47,000 tobacco 9.9 40,200 tobacco 8.7 48,000 sugar 7.3 53,325 tobacco 6.6 58,510 tobacco 7.3 70,615 rice 7.3 91,110 flour 9.1 122,700 nour 10.5 100,000 timber 9.2 150,625 flour 11.5

42.600 rice 12.2 35,200 sugar 12.9 32,500 rice 11.8 20,200 cloth 7.9 32,000 sugar 10.4 35,500 rice 11.0 33,000 sugar 85 30,080 coffee 7.9 45,400 rice 107 42,800 tobacco 10.6 37,300 rice 8.5 38,800 rice 8.2 33,100 sugar 7.2 43,000 tobacco 6.5 51,725 hardware 6.4 55,210 rice 6.9 61,345 sugar 6.3 67,555 sugar 6.7 80,400 timber 6.9 50,000 tobacco 4.6 107,000 timber 8.2

349,540 100 273,233 100 275,990 100 256,090 100 306,630 100 322,430 100 390,260 100 382,405 100 426,310 100 405,550 100 439,775 100 473,320 100 460,000 100 660,000 100 809,000 100 803,400 100 973, 143 100 1,002,450 100 1,169,910 100 1,090,019 100 1,312,695 100

Sources: See CR and DCR for Jaffa, Jerusalem and Palestine, Table 7.3 above.

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Generally, it would seem that, until the end of the 19th century, visible exports grew at rates comparable to those of visible imports. But from 1899 onwards the growth of visible exports lagged behind that of visible imports. Thus, for example, visible exports through Jaffa port grew from £172 thousand to about £307 thousand in 1898, and to £745 thousand in 1913. The total visible exports through the three main ports of Palestine amounted to £1.253 million in 1913 (see Table 7.3). The main export items (Jaffa port) were oranges, soap, sesame and wines (see Table 7.5). Data on the flow of merchandise through the country’s three main ports show that an ever-growing deficit in both absolute and relative terms existed in Palestine’s balance of visible trade during the 15 years which preceded World War I. Since no data are available about the transit component in visible imports and exports, nor any on the visible trade of Palestine through other ports (primarily that of Beirut) and via overland routes, it is impossible at this stage to determine the exact sizes of visible imports and exports, or whether a deficit in the balance of visible trade did exist at the end of the Ottoman period. Table 7.5 The Three Major Export Items, Jaffa Port, 1879–1913 (in £ at current prices and percents)

1879 1881 1882 1884 1885 1886 1887 1888 1889 1890 1891 1892

I

II

III

Total

74,074 olive oil 39.3 81,348 wheat 26.2 73,330 wheat 32.7 37,132 sesame 31.7 32,000 sesame 24.1 45,530 sesame 38.1 42,500 sesame 228 55,000 oranges 269 62,669 sesame 25.6 109,320 sesame 24.5 124,000 soap 31.0 69,350 sesame 26.8

55,000 soap 29.2 50,520 oranges 21.5 60.330 oranges 203 17,202 oranges 14.7 26,500 oranges 200 29,400 oranges 246 38,400 soap 206 45,000 soap 22.0 51, 200 oranges 20.9 83,120 oranges 18.6 108,400 oranges 27.1 62,000 oranges 24.0

26,250 oranges 13.9 37,778 soap 16.4 45,794 soap 15.2 13,296 soap 11.4 13,722 soap 10.4 9.000 maize 7.5 36,000 oranges 19.3 28, 125 sesame 13 8 33,600 soap 13.7 44,700 soap 10 0 30,800 sesame 7. 7 46,800 soap 18. 1

188,414 100 248,538 100 280,028 100 117,034 100 132,579 100 119,555 100 186,371 100 204,315 100 244, 561 100 447,010 100 400,530 100 258,466 100 (Continued)

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Table 7.5 (Continued)

1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

I

II

III

Total

112,000 soap 33.7 114,000 soap 39.9 93,240 soap 33.0 113,114 soap 30. 3 81,900 soap 26.5 82,500 oranges 26.9 125,750 soap 39.8 74,215 oranges 28.0 86,525 oranges 31.2 86,500 oranges 42.5 93,435 oranges 29.0 103,950 oranges 35.2 114,650 oranges 31.0 162,000 oranges 32.4 179,185 oranges 37.0 168,945 oranges 30.4 185,815 oranges 33.1 235,605 oranges 37.0 217,500 oranges 30.6 283,600 oranges 36.6 297,700 oranges 39.9

69,500 oranges 20.9 51,000 oranges 17.9 65,000 oranges 230 72,600 oranges 19.4 75,800 oranges 24.5 62,000 soap 20.2 77,000 oranges 24.4 44,550 soap 16.8 57,000 soap 20.5 29,260 sesame 14.4 77,650 soap 24.1 62,000 soap 21.0 59,910 soap 16.2 100,000 soap 20.0 88,870 soap 18.3 141,385 soap 25.4 145,425 soap 25.9 157,959 soap 24.8 144,300 soap 20.3 254,000 soap 32.4 200,000 soap 26.8

52,940 sesame 15.9 42,153 sesame 14.8 42,750 sesame 15. 1 59,800 sesame 16.0 40,000 sesame 12.9 28,000 sesame 9.1 26,100 watermelons 8.3 30,560 sesame 11. 5 35,350 wines 12.7 18,720 soap 9.2 30,350 wines 9.4 37,860 wines 12 8 47,020 wines 12.7 60,000 sesame 12.0 47,325 sesame 9.8 54,745 sesame 9.8 50,481 sesame 9.0 60,925 wines 9.6 98,000 sesame 138 60,400 wines 7.8 60,530 wines 8.1

332,628 100 285,604 100 282,906 100 37,447 100 309,389 100 306,780 100 316,158 100 264,950 100 277,635 100 203,390 100 322,335 100 295,300 100 370,000 100 500,000 100 484,340 100 556,370 100 560,935 100 636,145 100 710,660 100 774,162 100 745,413 100

Sources: See CR and DCR for Jaffa, Jerusalem and Palestine, Table 7.3 above

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Despite the poor quality of the data, we have enough to go on in order to conclude that there was an impressive growth in Palestine’s visible foreign trade, and particularly sea trade. Even if we were to assume that total visible imports and exports together in the early 1860s amounted to some £1 million – data which are assuredly not an underestimation – and assuming as well that total visible imports and exports together in 1913 amounted to only £3.2 million (i.e., the visible foreign trade through Jaffa, Haifa and Gaza), then visible foreign trade in current prices more than tripled over a span of about 50 years. It is interesting to note that sea-borne visible foreign trade of Ottoman Syria, excluding Palestine, had hardly doubled (from £3.5 million to £6.8 million) during the same period.2 The composition of both visible imports and exports clearly indicates that the increase in the country’s visible foreign trade occurred as a result of the rise in the standard of living in the European economies as well as in the Palestinian one.

III The new demands and supplies of goods and services, created as a result of growing economic links between Palestine and the world economic system, brought about significant changes in the structure and output of each of the three sectors of production. In agriculture there was a growth in the contribution of cash crops to the total agricultural output. This growth stemmed mainly from an expansion of the cultivation of citrus. Oranges and lemons had been cultivated in Palestine and exported from the country already before the 1870s. However, it was only in that decade that large-scale expansion occurred in both orchard acreage and the size of crops. This expansion was particularly apparent from the second half of the 1890s until the outbreak of World War I. Orchard acreage increased from 7,500 dunams in 1880 to 33–35 thousand dunams in 1913 (see Table 7.6).3 Since the crop involved was an export product there was a marked increase in the quantity of oranges exported and in the income accruing therefrom. Exports through Jaffa port increased from 50 thousand cases in 1862 to 200 thousand cases in 1890, and to some 1.609 million cases in 1913. Income rose from about £5 thousand in 1862 to £83 thousand in 1890, and £298 thousand in 1913 (see Table 7.7). This development made citrus the major export product of the economy in the years 1904–1913, when income from citrus exports constituted about one-third of the total income from exports shipped through the port of Jaffa (see Table 7.5).

2 For data on visible imports and exports through the various Syrian ports see Mohammad Sa’id Kalla, “The Role of Foreign Trade in the Economic Development of Syria, 1831–1914,” Ph.D. dissertation, The American University, Washington D.C. (1969), p. 32, t. VI; pp. 254–257, t. I (appendix). See also Ch. Issawi, An Economic History of the Middle East and North Africa (New York, 1982), p. 24, t. 2.1. 3 See also Shmuel Avitsur, Tmurot be-ḥaḳla’ut Eretz-Yisra’el, 1875–1975 (Tel Aviv, 1977), pp. 182–183.

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Table 7.6 Acreage of Citrus Orchards, 1880, 1900 and 1914 (in dunams)

1880 1900 1914

Arab sector

Jewish sector

7,500 12,000 23,000

– 2,000 10–12,000

Total 7,500 14,000 33–35,000

Sources: Weakley, “Syria,” p. 193; D. Gurevitch and A. Gretz, pp. 42–44; Tolkowski, ‘Etz hadar, p. 254.

Table 7.7 Exports of Oranges, Jaffa Port, 1879–1913 Cases 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

£ 26,250

170,500 116,350

500,520 60,330

78,885 106,000 98,000 180,000 221,000 205,000 200,000 270,000 248,000 278,000 280,000 260,000 242,000 290,000 230,000 310,000 251,000 361,450 304,090 447,675 467,500 456,152 548,718 630,512 675,926 744,463 835,767 869,850 1,418,000 1,608,570

17,202 26,500 29,400 36,000 55,000 51,200 83,120 108,400 62,000 69,500 51,000 65,000 72,600 75,800 82,500 77,000 74,215 86,525 86,500 93,435 103,950 114,650 162,000 179,185 168,945 185,815 235,605 217,500 283,600 297,700

Sources: See CR and DCR for Jaffa, Jerusalem and Palestine, Table 7.3 above

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The expansion of citrus cultivation was made possible not only by the growth in inputs of land and capital, but by technological innovations as well. These innovations account, at least partially, for the significant differences between the growth rate of orchard acreage and the growth rate of the quantity of crop exported in the years 1890–1913. While orchard acreage rose by about four times, the quantity of crop exported increased by more than eight times (see Tables 7.6 and 7.7). The expansion of citrus cultivation was initiated from the outset by the Arab private sector in Palestine.4 The Ottoman authorities did not play a role in this development and their sole contribution consisted of levying a custom’s duty of only 1 percent on citrus exports, at a time when custom duties on agricultural exports normally ranged from 8 to 11 percent.5 The Jewish sector began to invest in the cultivation of citrus on a significant scale only towards the end of the century. A rapid expansion in orchard acreage in Jewish settlements took place in the decade prior to World War I. This acreage grew from 5,840 dunams in 1905 to about 10,000 dunams in 1914.6 Thus, on the eve of World War I, some 30 percent of the total citrus acreage was Jewish-owned, and about 70 percent was owned by Arabs (see Table 7.6 ). The expansion of citrus cultivation to the extent of the crop becoming one of the most important agricultural products in the economy stemmed from its high profitability, which was not only greater than the profitability of subsistence crops, such as wheat and barley, but also greater than that of crops such as grapes, almonds and olives.7 This high profitability was the consequence of the high quality of Jaffa oranges, an absence of competitors and the growing demand for citrus in the British market, to which most of the crop was exported. All of this ensured high prices and profits. The rise of the citrus branch had many consequences. It gave great impetus to the development of Jaffa, which within one generation grew from a small town to the second largest city in Palestine, with some 50 thousand inhabitants at the end of the Ottoman period.8 The expansion of citrus was one of the important factors in the development of the port of Jaffa which grew from being a minor port in 1860 to the main port of Palestine in 1914. Of all the ports in the Levant only Beirut surpassed it in the volume of imports and exports (see Table 7.8). 4 Consul John Dickson, “Report on Irrigation and Orange Growing at Jaffa,” FO, DCR MS 300 (1893), p. 2. 5 Ibid. 6 See further, Shmuel Tolkovski, Pri ‘etz-hadar (Jerusalem, 1966), p. 254; Avitsur, Tmurot be-ḥaḳla’ut, p. 184; cf. Arthur Ruppin, Syria: An Economic Survey (New York, 1918), pp. 27, 31–32. 7 Dickson, “Orange Growing,” DCR, 300, pp. 3–4; “Report by Consular Agent Amzalak on the Trade and Commerce of Jaffa for the Year 1881,” FO, CR 36 (1882), p. 1159; Consul Dickson”, Report on the Trade and Commerce of Palestine for the Year 1900,” FO, DCR AS 2584 (1901), p. 6; Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1905,” FO, DCR AS 3561 (1906), p. 5; Consul Blech, “Report on the Trade of Palestine for the Year 1907,” FO, DCR AS 3974 (1908), pp. 12–14; Consul E.C. Blech, “Report on the Trade of the Consular District of Jerusalem for the Year 1908,” FO, DCR AS 4222 (1909), p. 17. 8 This figure is given by Consul P.J.C. McGregor in his “Report on the Trade of the Consular District of Jerusalem for the Year 1913,” FO, DCR AS 5339 (1914), p. 11.

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Table 7.8 Tonnage of Steamships Cleared at Principal Ports of Syria and Palestine, 1910–1913 1910 tons’000 Beirut Jaffa Tripoli Haifa Alexandretta Latakia Sidon Gaza Total

1,701 1,115 896 771 632 170 61 – 5,346

1911 % 32 21 17 14 12 3 1 100

1912

tons’000 1,535 1,025 824 750 573 120 23 9 4,859

% 32 21 17 15 12 2

100

tons’000 1,233 1,014 859 685 556 128 26 7 4,508

1913 % 27 22 19 15 12 3 1 100

tons’000 1,748 1,160 1,092 793 676 181 50 8 5,708

% 31 20 19 14 12 3 1 100

Note: Percents may not total because of rounding. Source: U.K., FO, Syria and Palestine. Handbook no. 60 (London, 1920), pp. 148–150.

Furthermore, the development of this branch contributed greatly to the emergence of a new region of economic activity in Palestine. Until the period under discussion, the economic importance of the central coastal region was very limited. By 1914 it was one of the major regions of economic activity. As we have already observed, the development of this branch resulted in an increase of cultivated area, in a growth in capital formation and in technological improvements. The influence of developments in the areas of capital formation and technology was felt in other agricultural branches as well. Ultimately the development of the citrus branch provided an impetus for developments in other economic sectors, such as handicrafts (the manufacture of wooden cases), commerce, banking and transportation.9 Three additional cash crops underwent a process of expansion in cultivation: olives, sesame and grapes. The acreage of olives, for centuries one of the primary agricultural branches in Palestine, increased by thousands of dunams in the four or five decades prior to World War I; by 1914 it totaled 475 thousand dunams.10 There are no data at our disposal on the growth rates in the olive crops, but there is no doubt that these rates did increase. This can be ascertained from the rapid growth in the soap output of Palestine, olive oil being the main raw material in the manufacture of soap. Like citrus, the olive was a major factor in the growth of visible exports. As of the 1870s the export of olives, in their primary state as oil, gradually decreased. This was due to the fact that most of the crop was used in the 9 Ernest Weakley, “Report upon the Conditions and Prospects of British Trade in Syria,” PP, A&P 87 (1911), p. 193. 10 Avitsur, Tmurot be-ḥaḳla’ut, p. 153. See also V. Cuinet, Syrie, Liban et Palestine (Paris, 1895), pp. 98–115. Cf. Weakley, “Syria,” p. 58.

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production of soap, a commodity which underwent a striking increase in volume of exports and accrued income during the last decades of Ottoman rule. Cultivation of olives was almost entirely in the hands of the Arab sector in Palestine. Of the total of olive orchards in the country in 1914, only some 11 thousand dunams, or only 2.3 percent, were owned by Jewish farmers.11 Unlike citrus, olive cultivation continued to be centered in the traditional geographic areas of economic activity, namely in the country’s hilly regions, and this branch did not undergo significant technological improvements; nor did it generate a chain of changes in other branches, apart from the manufacture of soap. Sesame, another important traditional cash crop in Palestine, expanded in its cultivation following the sharp fall in the prices of raw cotton on the world market in the second half of the 1860s. Areas allocated to cotton growing in the 1850s and the beginning of the 1860s were sown with sesame after the Civil War in the United States.12 During most of the period under discussion, the greater part of the crop was exported, and sesame often constituted the primary export product of the economy (see Table 7.5).13 Sesame was cultivated almost entirely by the Arab sector, and thus was the only cash crop to whose expansion the Jewish sector hardly contributed. The increase in sesame crops brought about the establishment of several halwa factories.14 The fourth cash crop to undergo rapid expansion was grapes. This too, was one of Palestine’s traditional crops. But, unlike olives and other cash crops, its expansion took place for the most part in the Jewish sector and, to a lesser degree, in the Templar settlements. As is well known, vineyards were the major agricultural branch in the Jewish settlement that had been established with the support of Baron Edmond de Rothschild. Vineyard acreage in the Jewish sector grew apace during the last 15 years of the 19th century. In 1890 this acreage totaled some 11 thousand dunams and in 1900 some 25 or 26 thousand dunams.15 The grape crop was used in the Jewish wine industry, whose exports grew steadily. In 1903 wine constituted the country’s third-largest export item and continued to be a major export item in the decade prior to World War I (see Table 7.5). The expansion of this crop came to a halt and even declined at the beginning of the 20th century as a consequence of the crisis experienced by the wine industry throughout the world in those years. Because of the crisis, vineyard acreage in the Jewish settlements shrank, and in 1914 totaled only some 14 thousand dunams.16 Despite this, wine continued to be one of Palestine’s main 11 Avitsur, Tmurot be-ḥaḳla’ut, p. 154; Cf. Ruppin, pp. 31–32. 12 Shmuel Avitsur, Ḥayey yom-yom be-Eretz-Yisra’el ba-me’a ha-tesha’-’esre (Tel Aviv, 1972), p. 254. 13 See also Weakley, “Syria,” p. 198. 14 Ruppin, pp. 47–48; Avitsur, Ḥayey yom-yom, p. 255. 15 Simon Shama, Two Rothschilds and the Land of Israel (London, 1978), pp. 120–129; Avitsur, Tmurot be-ḥaḳla’ut, p. 157. 16 Blech, “Palestine 1907,” DCR 3974, p. 11; Ruppin, pp. 31–32; Avitsur, Tmurot be-ḥaḳla’ut, p. 157.

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export items. But development in the agricultural sector was not solely in the direction of growth. At least one crop, namely cotton, which had experienced very rapid growth in the first half of the 1860s, subsequently found itself in deep crisis as a result of the end of the American Civil War. In the period under discussion cotton was a marginal crop whose contribution to the agricultural output of Palestine was very low.17 In the last decades of the 19th century there was also a decline in the export of wheat.18 However, it should not be assumed that this necessarily resulted in a decline of grain crops. The decline in exports resulted from a decline in the price of grain on the world market during the second half of the 19th century that had taken place because of the increasing supply of wheat and barley from the United States. The decline in prices on the export markets of Palestine’s wheat made its export unprofitable. Concurrently, Palestine’s population increased from 450 thousand in 1875 to about 700 thousand in 1914,19 and its standard of living rose.20 Therefore, it is possible that surpluses, which had been exported in the 1850s and 1860s, were consumed locally to an ever-increasing extent from the 1870s and onwards. In other words, total output of wheat and barley did not necessarily decrease during this period. To conclude, though there are apparently no estimates for the value added of the agricultural sector in the last 40–50 years of Ottoman rule in Palestine, it seems that the growth that characterized the four cash crops described above more than offset the decline in other agricultural products, and created a significant real growth in the total agricultural product – and perhaps an increase, as well, in the real agricultural product per capita. It would also appear that in the breakdown of the agricultural product into subsistence crops and cash crops, the relative share of the latter increased. These developments not only explain the growth in agricultural exports, but also had an important impact on developments in the handicrafts, industry and services sectors.

17 Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1903,” FO, DCR AS 3223 (1904), pp. 6–7. 18 Exports of wheat through Jaffa port decreased from £81,348 and £3,330 in 1881 and 1882 respectively to £3,560 and £1,920 in 1896 and 1896 respectively. See Amzalak, “Jaffa, 1881,” CR 36, p. 1153; “Report by Consular Agent Amzalak [sic] on the Trade and Commerce of Jaffa for the Year 1882,” FO, CR 20 (1883), p. 629; Consul John Dickson, “Report on the Trade and Commerce of the Consular District of Jerusalem for the Year 1896,” FO, DCR AS 1872 (1897), p. 8. 19 For data on the size of the population in the various districts of Palestine, see and compare, Muḥammad Rafīḳ and Muḥammad Bahjat, Wilāyat Bayrūt, vol. I (al-ḳism al-janūbī), (Beirut, 1335H.), pp. 8, 171–172, 181, 231, 274, 352, 364, 380. Cuinet, pp. 93, 179, 520–521, 627–628, 663, 667, 677; McGregor, “Jerusalem, 1913,” DCR 5339, p. 2; Ruppin, pp. 6–7; Fred M. Gottheil, “The Population of Palestine, circa 1875,” Middle Eastern Studies, 15, 3 (1979), pp. 310–318; Justin McCarthy, “The Population of Ottoman Syria and Palestine, 1878–1914,” in Gad G. Gilbar (ed.), Studies in the Economic and Social History of the Middle East, 1800–1914. Asian and African Studies, 15, 1 (1981), pp. 18–29. 20 See below pp. 140–141.

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IV In Palestine, as in other economies in the Middle East, growing imports of cheap industrial products from Europe hit the country’s traditional handicrafts, of which the most important were the weaving and spinning of textile, glassblowing, tanning and pottery. The decline of these handicrafts, a process that had already started in the first half of the 19th century, became more pronounced in the period under consideration. Particularly hard-hit were textile weaving and spinning, whose producers were unable to compete with rising textile imports, which had grown from about £28 thousand in 1879 to about £260 thousand in 1913 (in current prices; see Table 7.4). Against this development it is no wonder that there was a marked decline in the number of looms in the centers for these crafts, such as Gaza, Nablus (Rafidiya), Hebron and Ramallah.21 However, we should not conclude from this that all traditional handicrafts declined sharply and disappeared. Several handicrafts declined slightly, while others registered a growth.22 This can be explained by three main factors. The first of these was the adjustment of handicrafts to new local demand patterns i.e., the demand for cheap industrial products. So, for example, when weaving with imported cotton threads began in Palestine, workers no longer paid as strict attention to the quality of their product as they had in the past.23 The growth of textile output in Majdal, which occurred at the end of the period under discussion, resulted from the production of cheaper quality, low-priced cloth that could compete successfully with imported textile on the local market. Secondly, there was the factor of increased demand in neighboring countries (that of Egypt in particular) for handicraft products manufactured in Palestine, especially for soap made from olive oil. The result was an increase in output. The growth in demand for soap was affected by a rise in the level of income in neighboring economies and by the preference of Muslim consumers for soap manufactured by their coreligionists from olive oil, which would ensure its meeting the requirements set down by Islamic religious law. The impressive growth in the output and export of soap was made possible by the channeling of olives away from being exported as oil to being used by the local soap industry, and as a result of an increase in the olive crop. The growth in exports was also brought about by improvements that took place in the trade routes between Palestine and its neighboring countries. 21 Acting Consul Freeman, “Report on the Trade and Commerce of Palestine for the Year 1906,” FO, DCR AS 3771 (1907), p. 3; Avitsur, Ḥayey yom-yom, pp. 266–267. 22 See Dickson, “Palestine, 1905,” DCR 3561, p. 8; Blech, “Jerusalem, 1908,” DCR 4222, pp. 18–19; H.E. Satow, “Report on the Trade of the Consular District of Jerusalem for the Year 1910,” FO, DCR AS 4697 (1911), p. 16; H.E. Satow, “Report on the Trade of the Consular District of Jerusalem for the year 1911,” FO, DCR AS 4850 (1912), p. 16. 23 Dickson, “Palestine, 1905,” DCR 3561, p. 8; Blech, “Jerusalem, 1908,” DCR 4222, p. 19; Satow, “Jerusalem, 1910,” DCR 4697, p. 16.

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Table 7.9 Centers of Soap Production in Syria and Palestine, 1908 ’000 okes Nablus Jaffa al -Bakā’ Tripoli Aleppo Antakya Nezib Damascus Beirut Other Total Palestine Total

4,000 3,000 2,000 2,000 1,400 1,220 1,000 600 500 910 7,250 16,630

% 24 18 12 12 8 7 6 3 3 6 44 100

Note: Percents do not total because of rounding. Source: Weakley, “Syria,” p. 63.

The total output of soap grew from less than one thousand tons in the 1870s to some 10 thousand tons in 1913.24 Export of soap through Jaffa port increased from £55 thousand at the end of the 1870s to £254 thousand in 1912, which was a peak year in incomes from soap exports during the late Ottoman period. In the period under discussion soap was one of the three main export items of the economy, and for a number of years in the 1890s it was the most important export item, with a relative share of one-third of total exports (see Table 7.5). Though it is possible to point to other economies in the Middle East in which a traditional handicraft contributed at high rates to the total income from exports,25 the case of Palestine would seem to be unique, for the end of the 19th century and the beginning of the 20th were a period during which traditional handicrafts were generally on the decline, and industrial products were the most important, or at least among the most important, items of import. The increase in soap production was almost entirely the result of private initiative in the Arab sector.26 The centers of production in Palestine were in Nablus and Jaffa, and to a lesser degree in Gaza, Lydda, Ramle and Haifa (see Table 7.9). However, it is interesting to note that the prosperity which this branch enjoyed at the end of the Ottoman period did not bring about technological changes in the process of production.27 24 Rafīḳ and Bahjat, 1, pp. 119–121; Iḥsan al-Nimr, Ta’rīkh Jabal Nāblus wa’l-Balḳā’, 2 (Nablus, 1962), pp. 288–293; Weakley, “Syria,” pp. 60–63. 25 Exports of carpets in the years preceding World War I accounted for 12–13 percent of Iran’s total visible exports. See SY 1907, pp. 1307–1308; 1908, p. 1345; 1909, p. 1092. 26 The relative share by the Templars and the Jewish sector in soap production was very small. See Weakley, “Syria,” pp. 60, 62–63. 27 al-Nimr, 4 (Nablus, 1970), p. 207; Weakley, “Syria,” p. 61.

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Table 7.10 Exports of Major Handicrafts and Industrial Goods, Jaffa Port 1904–1913 (in £ at current prices) Soap 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

62,000 59,910 100,000 88,870 141,385 145,425 157,959 144,300 254,000 200,000

Wines & spirits

Religious ornaments

37,860 47,020 36,000 33,850 42,200 33,535 60,925 77,600 60,400 60,530

9,000 12,580 20,000 23,040 26,750 8,687 12,205 19,150 22,000 20,800

Total 108,860 119,510 156,000 145,760 210,335 187,645 231,089 241,050 336,400 281,330

% of total exports 39 32 31 30 38 33 36 34 43 38

Source: See DCR for Jerusalem and Palestine, Table 7.3 above.

The third and final factor that contributed to the growth in output of the country’s handicraft sector, and to the increase of exports in this category, was the expansion of demand in the West for handcrafted goods from Palestine, primarily articles of religious ornament. The increase in demand for religious ornaments received an impetus from the rise in the number of pilgrims and tourists visiting Palestine.28 At the beginning of the 20th century private entrepreneurs from Bethlehem, Jerusalem and Jaffa began to export religious ornaments for the use of Christians and Jews alike, and in the years 1906–1908 and 1912–1913 these exports through the port of Jaffa totaled some £20 thousand or more per annum (see Table 7.10). In contrast to the situation in the manufacture of soap, in this handicraft Jewish entrepreneurs and craftsmen were prominent as well.29 Numerous attempts were made in the period under discussion to develop a modern industry in Palestine. Modern factories were established for the production of textiles, oils, glass, building materials, iron products and other industrial goods.30 Of all these experiments only the wineries established by Baron Edmond de Rothschild at Rishon le-Tziyon and Zikhron Ya’akov significantly contributed to the local economy. Production in the winery at Rishon le-Tziyon began in 1890 and, two years later, at Zikhron Ya’akov.31 Less than 20 years later, in 1911,

28 Consul John Dickson, “Report on the Trade and Commerce of the Consular District of Jerusalem for the Year 1895,” FO, DCR AS 1698 (1896), pp. 3, 6. 29 Weakley, “Syria,” p. 52; Avitsur, Ḥayey yom-yom, pp. 272–274. 30 Ruppin, p. 52; Avitsur, Ḥayey yom-yom, pp. 317–345. 31 Consul John Dickson, “Report on the Trade and Commerce of Palestine for 1890–91,” FO, DCR AS 1023 (1892), p. 4; Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1904,” FO, DCR AS 3410 (1905), p. 8; Schama, pp. 121–124.

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exports of wine and spirits from these wineries amounted to about £78 thousand.32 However, even these ventures did not succeed in preventing the accumulation of deficits in their balances, and had it not been for Baron Rothschild’s financial assistance, it is doubtful whether the wineries would have continued producing at all.33 The insufficiency of data on changes that took place in the aggregate value added in the handicrafts and industrial sector makes it impossible to determine if this sector also underwent a process of growth in aggregate terms. However, this sector did not necessarily undergo a process of decline; it is possible that those handicrafts and industries that registered growth offset the decline in the branches that were hurt by European competition. In this context it is worth noting that in the decade prior to World War I, handicrafts and industrial goods were often two of the three main export items through Jaffa port, and that these goods constituted about 36 percent on the average, of the total income from visible exports (see Table 7.10).

V The last decades of Ottoman rule in Palestine saw substantial investments in construction. These investments were mostly in the private sector i.e., building for housing and business, and, to a lesser degree, of a public nature, undertaken by the Ottoman administration, by the waqf and by local and foreign communal organizations and institutions; the latter category included construction of government offices, edifices for religious rites (mosques, churches and synagogues), schools and hospitals.34 Housing construction was prominent in the cities (outside the city walls of Jerusalem, Jaffa, Nablus, Haifa and other towns), but also existed in the rural areas.35 These investments were made by the Arab and the Jewish populations and by foreigners, and they brought about a change in the settlement landscape of the country. Impetus to growth in this sector was given by a 32 Consul P.J.C. McGregor, “Report on the Trade of the Consular District of Jerusalem for the Year 1912,” FO, DCR AS 5107 (1913), p. 12. 33 Schama, p. 154; Avitsur, Ḥayey yom-yom, pp. 341–342. 34 See, for example, Dickson, “Jerusalem, 1895,” DCR 1698, p. 7; Dickson, “Palestine, 1905,” DCR 3561, p. 9; Blech, “Jerusalem, 1908,” DCR, 4222, p. 19; Salow, “Jerusalem, 1911,” DCR, 4850, p. 15. 35 al-Nimr, 3, pp. 65–66; “Report by Vice-Consul Schmidt on the German Colony at Caiffa [August 1879[,” FO, CR 2 (1880), p. 127; Amzalak, “Jaffa, 1881,” CR 36, p. 1159; Consul Noel Temple Moore, “Report on the Trade and Commerce of Jaffa for the Year 1886,” FO, DCR AS 164 (1887), p. 1; Consul John Dickson, “Report on the Trade and Commerce of the Consular District of Jerusalem for the Year 1893,” FO, DCR AS 1350 (1894), pp. 4, 6; Consul-General Drummond-Hay, “Report on the Trade and Commerce of Beirut and the Coast of Syria for the Year 1900,” FO, DCR AS 2662 (1901), p. 12; Consul General Drummond-Hay, “Report on the Trade and Commerce of Beirut and the Coast of Syria for the Year 1901,” FO, DCR AS 2836 (1902), p. 15; Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1902,” FO, DCR AS 2962 (1903), p. 6; Dickson, “Palestine, 1903,” DCR 3223, p. 3; Nahum Gross, “Tmurot kalkaliyot be-Eretz Yisrae’l be-sof ha-teḳufa ha-’Othmanit,” Cathedra, 2 (1976), p. 112; Ruth Kark, “The Rise and Decline of Coastal Towns in Palestine” in Gad G. Gilbar (ed.), Ottoman Palestine. 1800–1914: Studies in Economic and Social History (Leiden, 1990), pp. 83–85.

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population increase, both natural and the result of immigration, and by a process of urbanization in Palestinian society.36 This growth was made possible by capital imports of immigrants and a variety of foreign institutions, societies and firms.37 It seems that investments in this sector were one of the important components in the economic growth of Palestine in the period under discussion. Growth and modernization also characterized the majority of the services. For the first time in many decades public and private investments were made for the development of the economy’s physical infrastructure, both in the field of energy production and water supply, and in that of transportation and communication networks. Thus, for example, a number of windmills were constructed in Jerusalem and Haifa, and the water mills in the Galilee were improved.38 There was a steady increase in the use of the steam engine, and later on the internal combustion engine, in various branches of the economy. In turn, the growth in the number of internal combustion engines made possible an increase in the number of deep water wells and in the supply of water for agriculture.39 In the field of transportation and communication, railways were built for the first time in Palestine, first running east to west and later north to south as well.40 In addition roads were paved along the major commercial arteries (see Table 7.12) and passenger carriages came into use.41 The Ottoman administration also invested in the development of the ports at Jaffa and Haifa, though on a small scale.42 In the second half of the 1860s construction of a telegraph network began linking Palestine to the capitals of Europe through Beirut and Istanbul.43 In 1869 the first post office was opened in Palestine. It was established by the Austro-Hungarian Post in Jerusalem. In time, other foreign governments, as well as the Ottoman government, also

36 For figures on the size of the population in towns see and cf. Rafīḳ and Bahjat, vol. 1, pp. 113–114, 231–232, 352, 382; Yehoshua Ben-Arieh, “The Population of the Large Towns in Palestine during the First Eighty Years of the Nineteenth Century, according to Western Sources” in Ma’oz, p. 68; Gottheil, “Population,” pp. 315–317. 37 See Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1899,” FO, DCR AS 2405 (1900), p. 3; Satow, “Jerusalem, 1911,” DCR 4850, p. 5; Ruppin, p. 12; Nahum Gross, “Sof ha-teḳufa ha-’Othmanit, 1902–1913” in Banḳa’i le-uma be-hitḥadshutah (Tel Aviv, 1977), pp. 31, 101 (n. 21). 38 Avitsur, Ḥayey yom-yom, pp. 321–322, and idem, “Wind Power in the Technological Development in Palestine,” in David Kushner (ed.), Palestine in the Late Ottoman Period (Yad Izhak Ben-Zvi and E.J. Brill), pp. 231–244. 39 Consul Dickson, “Report on the Trade and Commerce of Palestine for the Year 1901,” FO, DCR AS 2822 (1902), p. 4; Dickson, “Palestine, 1902,” DCR 2962, pp. 4–5; Avitsur, Ḥayey yom-yom, pp. 333–334, 339–340. 40 See further, Weakley, “Syria,” pp. 97–109; Walter Pinhas Pick, “Meissner Pasha and the Construction of Railway in Palestine and Neighboring Countries,” in Gilbar, Palestine, pp. 179–218. 41 Weakley, “Syria,” pp. 82, 84–85; See also Table 11. 42 Consul Moore, “Trade and Industries of Jerusalem for the Year 1887,” FO, DCR AS 363 (1888), p. 5; Consul Noel Temple Moore, “Report on the Trade and Commerce of Jaffa for the Year 1888,” FO, DCR AS 529 (1889), p. 3; Alex Carmel, Toldot Ḥaifa bi-yemey ha-Turkim (Haifa, 1969), pp. 153–154; Shmuel Avitsur, Nemal Yafo bege’uto u-ve-shki’ato (Tel Aviv, 1972), pp. 107–108. 43 Avitsur, Ḥayey yom-yom, p. 307.

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Table 7.11 Merchandise Transported by Train, Jaffa-Jerusalem Railway, 1906–1913 (in tons) Jaffa-Jerusalem

Jerusalem-Jaffa

33,942 35,685 32,196 32,000 36,000 40,000 33,750 43,500

4,000 4,500 3,500 5,300 6,000 6,400 4,000 4,300

1906 1907 1908 1909 1910 1911 1912 1913

Total 37,942 40,185 35,696 37,300 42,000 46,400 37,750 47,800

Sources: Weakley, “Syria,” p. 98; Satow, “Jerusalem, 1910,” DCR 4697, p. 10; McGregor, “Jerusalem, 1913,” DCR 5339, p. 10.

Table 7.12 Major “Provincial” Roads, 1910 Width (meters)

Length (km.)

6–8 6–8 6 7–8 6–7 6 5–6

140 70 18 61 120 42 11

Beirut-Acre-Haifa Haifa-Nazareth-Tiberias Jenin-ʽAfula Jerusalem-Jaffa Jerusalem-Hebron-Gaza Jerusalem-Jericho Bayt Jālā-Bethlehem Source: Weakley, “Syria,” pp. 84–85.

opened post offices in the country.44 There was also a marked increase in hotel construction, particularly in Jerusalem and Jaffa.45 The development of the transportation and communication networks was one of the few fields in which investments by the public sector played a prominent part. However, private foreign investors and foreign governments, too, contributed to this development. Developments described above in agriculture, handicrafts, industry and transportation affected an increase in the commercial activity. There was a rise in the number of big importers and exporters, and of wholesale and retail merchants.46 At the same time there was an increase in the scope of commercial transactions, particularly in foreign trade. Specialization in this branch began to take place, and trading firms started to emerge among the big Arab merchant families.47

44 Ibid., p. 308. 45 Dickson, “Jerusalem, 1895,” DCR 1698, p. 6; Karl Baedeker (ed.), Palestine and Syria. Handbook for Travellers (Leipzig, 1912), pp. 19, 22. 46 See further Iris Agmon, “Palestine’s Foreign Trade, 1878–1914,” M.A. thesis, University of Haifa (1984). 47 See, for example, al-Nimr, 2, pp. 296–298; Blech, “Palestine, 1907,” DCR 3974, p. 12.

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Table 7.13 Modern Banks in Palestine, 1914 (in ’000)

Banque Impériale Ottomane Crédit Lyonnais Deutsche PalästinaBank Anglo-Palestine Company

Founded Seat of Firm Capital

Branches in Palestine

1863

Istanbul

FF 250,000

Jerusalem, Jaffa, Haifa

1863 1899

Lyon Berlin

FF 250,000 DM 20,000

1902

London

£ 120

Jerusalem

T£ 50

Jaffa, Jerusalem Jaffa, Jerusalem Haifa, Nablus Nazareth, Gaza Jaffa, Jerusalem, Haifa, Tiberias, Safed, Hebron, Gaza Jerusalem, Jaffa, Haifa

Banque Commerciale 1911 de Palestine Source: Ruppin, Syria, p. 67.

Changes also occurred in banking. For the first time large European banks established branches in Palestine. On the eve of World War I, branches of the Banque Impériale Ottomane, Crédit Lyonnais, Deutsche-Palästina Bank and the Anglo-Palestine Company were operating in Palestine. In 1914 these banks had 18 branches in the country (see Table 7.13).48 There seems also to have been a substantial growth in the scope of the activity of traditional banking. The role of the big merchants in awarding credit to the fellaheen and other strata in the society grew at an ever-increasing rate.49 Finally, at the end of the Ottoman period, there was an increase in investments in human resources. The educational system underwent a quantitative expansion. The Ottoman authorities, waḳf funds, the minority communities and foreign institutions – Jewish as well as Christian – all contributed their share to this development.50 There was also a qualitative change in education, resulting from both the adoption of Western methods and the establishment of general and vocational secondary schools.51 Investments of the missionary institutions in Palestine, the Jewish community, the Templars, the waḳf funds and the authorities brought about an improvement in health and sanitation services. On the eve of World War I there were some 19 hospitals in the three major cities of Jerusalem, Jaffa and Haifa,52 and during the period under discussion a number of municipalities began to provide sanitary services.53 48 See further, Ruppin, pp. 66–69; Gross, “Sof ha-teḳufa,” pp. 67–70. 49 Satow, “Jerusalem, 1911,” DCR 4850, p. 16; McGregor, “Jerusalem, 1913,” DCR 5339, p. 18; Ruppin, pp. 69–70. 50 al-Nimr, 3, pp. 87, 129; Cuinet, p. 564; Satow, “Jerusalem, 1911,” DCR 4850, p. 15; Ruppin, p. 83. 51 Jacob Landau, “The Educational Impact of Western Culture on Traditional Society in Nineteenth Century Palestine” in Maʽoz, pp. 499–506. Cf. Shimon Shamir, “The Impact of Western Ideas on Traditional Society in Ottoman Palestine” in Maʽoz, pp. 507–511. 52 Baedeker, 1912, pp. 8, 22–23, 229. 53 Rafīḳ and Bahjat, vol. 1, pp. 136–138; al-Nimr, 3, pp. 32–33; Carmel, pp. 164–166; Ruth Kark, “The Jerusalem Municipality at the End of Ottoman Rule,” Asian and African Studies, 14, 2 (1980), pp. 128–131.

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Table 7.14 Imports of Coffee, Sugar and Tobacco, Jaffa Port, 1900–1913 (in ₤ at current prices)

1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

Coffee

Sugar

30,080 18,350 9,250 14,150 8,385 7,850 17,000 18,715 26,365 24,560 21,600 22,060 30,000 51,900

28,890 26,800 19,200 22,070 33,140 33,100 48,000 40,960 38,620 61,345 67,555 64,840 41,600 53,600

Tobacco

42,800 39,600 47,000 40,200 43,000 53,325 58,510 54,400 67,000 72,200 50,000 67,300

Total 58,970 45,150 71,250 75,820 88,525 81,150 108,000 113,000 123,495 140,305 156,155 159,100 120,600 172,800

Sources: See DCR for Palestine and Jerusalem, Table 7.3 above.

To sum up the development in the services sector, it seems that this sector, too, underwent important changes that included a real increase in the aggregate value added accruing from it.

VI The growth and modernization of Palestine’s economy appears to have brought about an increase in the average real income and in the standard of living. There is evidence to support this conclusion. First, throughout the period under discussion there was an increase in imports of “luxury goods” for local consumption, such as sugar, coffee and tobacco, at rates that were higher than the increase in the population (see Table 7.14). Secondly, it seems that there was an increase in per capita grain and rice consumption.54 Thirdly, there was an increase in the acquisition of durable goods, such as hardware and furniture.55 Fourthly and finally, foreigners residing in Palestine for prolonged periods in the final decade of the 19th century and the beginning of the 20th century reported that a rise in the urban and, possibly, the rural standard of living did in fact occur.56

54 Avitsur, Nemnal Yafo, pp. 55–56. Cf. Gross, “Sof ha-teḳufa,” pp. 43–44; idem, “Tmurot kalkaliyot,” pp. 122–123. 55 Imports of hardware through Jaffa port increased from £15,483 in the years 1901–1905 (average) to £31,300 in 1911–1913 (average). See Dickson, “Palestine, 1905,” DCR 3561, p. 11; McGregor, “Jerusalem, 1913,” DCR 5339, p. 14. See also Freeman, “Palestine, 1906,” DCR 3771, p. 4. 56 Dickson, “Report on the Trade and Commerce of the Consular District of Jerusalem for the Year 1898,” FO, DCR AS 2217 (1899), p. 6; Dickson, “Palestine, 1904,” DCR 3410, p. 5; Freeman, “Palestine, 1906,” DCR 3771, p. 6. Cf. Kalla, pp. 219–220; Gross, “Sof ha-teḳufa,” p. 57.

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However, not all strata of society seem to have benefited equally from the country’s economic growth. There is reason to suppose that the income of those employed in branches that were closely tied to export – and particularly big merchants, and the owners of orchards and soap factories – rose at higher rates than that of the other strata in the population, especially of the fellaheen who cultivated subsistence crops and of craftsmen whose products were no longer in high demand. It seems, therefore, that the process of growth – along with other processes taking place in Palestine’s economy and society, such as the usurpation by the local elite of mīrī land and waqf assets – heightened the extent of inequality in the distribution of capital and income in the Palestinian Arab society, a process that intensified after World War I.

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8 THE OPENING UP OF QAJAR IRAN Some Economic and Social Aspects

The Iranian economy underwent impressive growth in the value and volume of foreign trade during the nineteenth century. The combined figures for imports and exports show the widening of commercial links and economic interrelations between Iran and the rest of the world, particularly Europe. Between 1800 and 1914 total visible trade at current prices rose from £2.5 million to £20 million. The implication of these figures is that in real terms visible trade increased about 12 folds.1 The greater portion of this increase occurred during the last decades of the nineteenth century. A deficit in Iran’s balance of trade was an almost constant phenomenon in the period which followed the silk-worm disease of 1865 up to 1914. In the period after the great famine (1869–1872) and until 1894, the rate of import surplus was relatively low, some 12 to 15 per cent of total visible imports. But from 1865 to 1874 and from 1895 to 1904 this rate was considerably higher: 33 per cent and 20 to 25 per cent respectively. Small deficits, both in absolute and relative terms, occurred during the years 1875 to 1894, in spite of a large import surplus in the preceding decade, because exports rose at higher rates than imports. Unfortunately, because of lack of sufficient data, it is impossible to discuss in quantitative terms major developments in Iran’s invisible balance of trade. It is, however, obvious that during the greater part of the 1880s and 1890s, income from invisible exports was much higher than expenditure on invisible imports. This derives from the fact that during the last two decades of the nineteenth century the exchange rate of the qirān was lower by 5 to 10 per cent than its intrinsic value. In other words, in view of the deficit in the country’s visible balance of trade there must have been a surplus in the invisible items, which more than offset the deficit in the visible balance. It was only in the late 1860s and early 1870s, and from 1 The figures on Iran’s foreign trade and its composition are based on British and French diplomatic and consular reports, 1860–1909; see also: Ministère des Douanes et des Postes, Statistique commerciale: tableau général du commerce avec les pays étrangèrs, Tehran, 1900–17; Almanach de Gotha, Gotha, 1861–1911; The statesman’s year-book, London, 1861–1911; George N. Curzon, Persia and the Persian Question, vol. 2, London, 1892, 559, 561. Cf. Marvin L. Entner, RussoPersian commercial relations, 1828–1914, Gainesville, Florida, 1965, 8–11, 22, 57, 59, tables 1–6; Charles Issawi (ed.), The economic history of Iran 1800–1914, Chicago and London, 1971, 130– 132, 135–136; idem, ‘Iranian trade, 1800–1914’, Iranian Studies, XVI, 3–4, 1983, 230–31. DOI: 10.4324/9781003177425-11

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1904 to 1906 that the deficit in the visible balance was not offset by the invisible items, and hence it was during these years that Iran suffered from a deficit in her current account, and had to export large quantities of bullion in order to finance her import surplus. In spite of the growth in foreign trade, the direct involvement of foreigners in general and Europeans in particular in the Iranian economy was limited. The number of Europeans residing in Iran was very small. Their number was estimated at some 150 persons in the 1850s and some 1,000 in 1901.2 The scope of direct investments made by Europeans in Iran was of limited magnitude3 and very few economic enterprises were initiated by Western companies. On the whole, it seems that indirect European economic penetration into Iran was greater by far than direct penetration. The growing commercial links of Iran with foreign markets had a profound effect on the structure of the economy. The increasing industrial imports from European markets resulted in a sharp decline in the country’s major handicrafts. Not much was left of the traditional industries at the beginning of the twentieth century.4 Iran’s handicraft history in the latter half of the nineteenth century was not, however, totally a story of decline. At least one branch of traditional industry, namely, carpet-weaving, not only did not decline but enjoyed substantial growth during the last thirty years of the century. Accounts of Iran’s industries in the 1850s and 1860s do not consider carpet-weaving as one of the major handicrafts of the country.5 It was only in the early 1870s that the inputs of work, capital and entrepreneurship considerably increased. Whereas in the 1860s only a few thousands were employed in carpet-weaving, by the end of the century no less than 65,000 were employed. The number of carpet looms increased from a few hundred in the midnineteenth century to at least 17,000 at the end of the century.6 2 Gad G. Gilbar, ‘Demographic developments in late Qājār Persia, 1870–1906’, Asian and African Studies, XI, 2, 1976/7, 154. 3 Esfandiar Bahram Yaganegi, Recent financial and monetary history of Persia, New York, 1934, 18–28. 4 For a detailed account of the process of decline of Iran’s traditional industries see Mīrzā Ḥusayn Khān b. Muḥammad Ibrāhīm Khān, Taḥwīldār-i Iṣfahān, Jughrāfiyāyi Iṣfahān, ed. Manūchihr Sutūda, Tehran, 1342/1963, 93–104. See also ‘Shirāz’, GP, III, Simla, 1910, 848–9; Gen. A. HoutumSchindler, ‘Persia, I. Geography and statistics’, EB 10th ed., XXXI, 623; Ḍiyā al-Dīn Ṣadrzāda, Ṣādirāt-i Irān, Tehran, 1346/1927–28, 8–9. For details on the competition in the Iranian market between British and Russian goods see ‘Report on the trade of Khorassan and Seistan for the year 1890–91’, by J. MacLean, FO, DCR AS 976, p. 4; ‘Report on the trade and commerce of Ispahan and Yezd for the year 1894–95’, by John R. Preece, FO, DCR, AS 1662 (1896), 5; ‘Report on the trade and commerce of Khorasan for the financial year 1895–96’, by Ney Elias, FO, DCR AS 1800 (1896), 8, 17–20; ‘Report on the trade, commerce and agriculture of Khorasan for the year 1896–97’, by Charles E. Yate, FO, DCR AS 2008 (1897), 6–7; ‘Report on the trade and commerce of Azerbaijan for the year 1898–99’, by Cecil G. Wood, FO, DCR AS 2291 (1899), 6; Lloyd C. Griscome to John Hay, Teheran, 25 November 1902, M 223/10, RG 59, USNA. 5 E[dward] B. E[astwick], ‘Persia’, EB 8th ed., XVII, 424; Jacob E. Polak, Persien: Das Land und seine Bewohner, Ethnographische Schilderungen, II, Leipzig, 1865, 168–9. 6 Z. Z. Abdullaev, Promyshlenost‘ i zarozhdenie rabochego klassa Irana v kontse xix-nachale xx vv., Baku, 1963, 58, 78; Issawi, Iran, 261. See also ‘Report on the trade of Khorassan for the year 1904–05 by P. Molesworth Sykes’, FO, DCR AS 3499 (1905), 4; Curzon, II, 524, n. 1.

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The increase in inputs of labour, capital and entrepreneurship resulted in a rapid growth of output. This is evident from figures for the export of carpets from the country. In 1871–72 the total value of carpets exported amounted to some £30,000. In the late 1880s it stood at around £90,000. During the next ten years it more than doubled, and in 1901–2 the export of woollen carpets alone amounted to at least £251,000. The early 1900s was a period of still more rapid growth. So much so that in 1906–7 which was a peak year in the carpet industry, the sum of about £881,000 was earned by the exporters of Persian carpets. In the years 1904 to 1906 carpets were one of the major export items of the country, and constituted 12.8 per cent of Iran’s total visible exports.7 The reason for the remarkable growth of the carpet industry at a time when most other handicrafts were declining lies first in the fact that European industries did not compete with this Iranian manufactured product, and secondly that there was a growth in the demand for these goods in Western countries, especially in the United States and England.8 Foreign and local trading firms in Iran were looking for exportable products that could increase their imports into the country and found in the carpet industry additional means to further their business.9 Thus, the growing commercial links of Iran with foreign countries, which were bringing about a decline in many of the traditional handicrafts, were at the same time stimulating the growth of the carpet industry, since one and the same trading firm was often implicated in both processes.10 It seems that part of those engaged in the carpet-weaving industry, whether rural or urban, witnessed an improvement in their economic conditions. No less important, from the social point of view, was the effect of the spread of this industry on the nomads: it allowed for closer economic links between them and the settled population.11 Changes in agriculture, namely, the striking expansion in the cultivation of cash crops, such as opium, cotton and fruits, were also closely connected with the widening commercial relations of Iran with the West and the rest of the world. The increase of imports and the growing deficits in the balance of trade resulted in efforts made by merchants who were engaged in foreign trade to find commodities that would offset the deficit and enable them to continue with their import

7 See and compare ‘Report by Consul-General [Henry M.] Jones on the trade and commerce of Tabreez for the year 1873’, PP, A&P LXXV (1875), 205–6; Curzon, II, 525, 559; SY 1904, 967; 1905, 988; 1906, 1245; 1907, 1307–8; 1908, 1345; 1909, 1092. 8 ‘Report by Mr. [William J.] Dickson on the trade of Persia’, PP, A&P LXIX (1882), 499; ‘Report by Mr. [Arthur J.] Herbert on the trade and industries of Persia [for the Year 1886–87]’, FO, DCR AS 113 (1887), 6; ‘Report on the trade of Tabreez for the financial year 1886–87’, by William G. Abbott, FO, DCR AS 241 (1888), 5. 9 ‘Report by Consul-General [Henry M.] Jones on the state of trade in the province of Azerbijan during the year 1872’, PP, A &P LXV (1873), 968. 10 ‘Azerbaijan’, GP, II, Simla, 1905, 62–3. 11 ‘Report for the years 1892–93 and 1893–94 on the Trade &c. of the Consular District of Ispahan’, by John R. Preece, FO, DCR AS 1376, 30–2, 55, 57–9.

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business. No crop could better suit these merchants than opium in the southern provinces, cotton in Khurāsān, and fruits in Āzerbāijān.12 These and other structural developments in the agriculture sector had several important consequences. The changes in the production of the major crops altered the rural economy of the country to some extent. Until the 1860s rural economic activity was marked by a lack of diversity. The majority of the peasants in most provinces concentrated on the cultivation of wheat and barley, while a limited number of agriculturists produced the second significant crop – raw silk. In the early 1900s the rural economy became far more diversified. Not only did the number of major crops increase, but their cultivation spread to various regions. Thus, for example, in Āzerbāijān, where until the 1860s grain production had been the main activity, in the 1900s a great deal of fruit and tobacco was cultivated in addition to wheat and barley; in Khurāsān opium and cotton were added to the list of major crops during the last forty years of the nineteenth century; in Gīlān, rice and tobacco besides silk; and in Iṣfahān, opium, tobacco and cotton were added to wheat and barley. The diversification of agricultural production brought about greater economic integration within the different parts of the country. This was evident particularly in the central and southern provinces where the towns of Iṣfahān, Yazd and Shīrāz respectively served as economic centres for larger rural areas, and in the north and north-western provinces, where Tābriz, Tehran and Rasht played a greater role in the economic life of the northern region. However, the long-existing economic disintegration between north and south was affected only to a limited extent by the structural changes in agricultural output. The one significant exception was the increasing ties between Khurāsān and the central and southern provinces of Yazd, Kirmān and Fārs. Another major change in the nature of agricultural production and one of the main effects of the growth of the country’s economic ties with the rest of the world was the increase in the relative share of cash crops in the total agricultural output. And it was this process that enabled the country to continue increasing the volume and value of imports. At the same time it made the economic welfare of Iran more dependent than in earlier periods on economic developments in other countries. However, because of the increased diversification of agricultural production, the country was saved from severe crises due to exogenous factors, which characterized monoculture economies such as nineteenth-century Egypt (cotton), Ceylon (tea) and Cuba (sugar), and which, to some extent, had been the case with Iran too until the 1860s (raw silk in the northern provinces). As a result of the growing concentration in the production of cash crops, resources used in agricultural production were increasingly diverted away from wheat and barley, which continued, however, to form the most important crops. Thus, the southern and central provinces, which were the major opium-growing 12 For a description of the structural changes in the Iranian agriculture, see Gad G. Gilbar ‘Persian agriculture in the late Qājār period, 1860–1906: some economic and social aspects’, Asian and African Studies, XII, 3, 1978, 323–57.

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areas in the 1880s became net importers of cereals and at the turn of the century Iran as a whole became a net importer of wheat and barley. This change had a far-reaching effect on the country’s monetary development as well as on its social stability. The cultivation of cash crops stimulated growth in the inputs of labour, land and capital. (i) An increase of labour occurred in spite of the decrease in the number of the total population during the great famine years and despite the migratory movement of peasants to urban settlements. This was due to two factors. First, there was a certain increase in the total labour force that was active in settled agricultural production. Women, who had been mainly active in rural industries, joined the men in their field work, as certain home-industries such as clothing, became less profitable when inexpensive European industrial goods reached the rural population. In addition to women, tribesmen who had formerly participated in settled agricultural production to only a small extent, increased their participation, particularly in the cultivation of cash crops which gave high profits. Secondly, inputs of labour increased as a result of a certain decrease in disguised unemployment among peasants in various regions due, in part, to an improvement in security. In the Caspian provinces and in Khurāsān, for example, peasants were able to extend their activities beyond the limited area around their walled villages and thus reduce the periods during which they were idle. Similarly, the diversification of crops under cultivation in many areas reduced the periods during which the peasants were not employed. (ii) The amount of land that was brought under cultivation increased during the period under discussion. In some areas, this took place by means of only small inputs of labour and capital. In Gilan it was enough to cut down the jungle; in Khurāsān and Astarābād the pacification of the Turkomans enabled lands which had been abandoned in the first half of the century to be brought back into cultivation; in Kirmānshāh, Khūzistān and Sīstān the revival of old trade routes and the establishment of new ones were accompanied by the imposition or by the strengthening of government control, which brought some law and order to these areas. Thus, for instance, the fertile districts along the Kārūn river which were still neglected and depopulated in the first decades of Nāṣir al-Dīn’s rule (1848–96) were repopulated and recultivated after the opening of the Kārūn to international navigation and the establishment of a closer control on the part of the central and provincial governments.13 The increase of the cultivated area was, however, also combined with capital investment, particularly in the construction of new qanāts and the repair of old 13 See, for example, ‘Report by Major-General T. E. Gordon on a journey from Tehran to Karun and Mohamrah, viâ Kum, Sultanabad, Burujird, Khoremabad, Dizful, and Ahwaz’, FO, DCR MS 207 (1891), 10.

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ones. Besides the increase in the cultivated area, some of those lands that were already under cultivation began to be more intensively exploited. The output of crown lands (khāliṣa) which had often been greatly neglected and mismanaged increased upon their sale to private owners. The spread of various cash crops also brought about an increase in the total crop area, as spring and summer crops (rice, cotton, etc.) were increasingly added to the cycle of agricultural production. (iii) Increased capital inputs in agricultural production came mainly from private investors, of whom the Iranian big merchants (tujjār) were very significant. Foreign trading firms, landlords and a few provincial governors also invested capital in agricultural production. The main object of investment was the improvement of the irrigation system. Not only were new qanāts constructed, but there were cases in which big merchants and landlords undertook to repair or construct new dams. Undoubtedly the most significant economic outcome of the growth in the cultivation of cash crops was the growth in the total agricultural product. There are even several indications that up to the end of the nineteenth century the increase in agricultural production brought about an increase in the real income of some sections of the settled rural population, and that a certain improvement in the standard of living of the peasants took place. First, there are various pieces of evidence to show that peasants in many areas had a more diversified daily diet, consuming commodities which they could have hardly afforded before. Rice, sugar, tea and tobacco are perhaps the best examples of articles which peasants consumed in large quantities in the late nineteenth century. Secondly, their consumption of both locally made and foreign industrial goods increased, as part of the growing import of textiles that found its way into the villages.14 Thirdly, it seems that in some areas peasants were able to accumulate small savings. Writing on the conditions of the peasantry before the constitutional revolution of 1906, Percy M. Sykes, who held various consular appointments between 1894 and 1919 in Kirmān, Sīstān and Mashhad points out that a peasant ‘manages to save about £1 a year, but if he is single his savings are sometimes higher’.15 This amount, equal to qn 50–60 at the turn of the nineteenth century, could buy in Tehran some 70 kgs. of bread, or 35 kgs. of rice.16 14 ‘Report on the trade and commerce of the Province of Ghilan for the Year 1891’ by Harry L. Churchill, FO, DCR AS 1189 (1893), 4. (hereafter Churchill, ‘Ghilan’, 1891, DCR, 1189); see also MacLean, ‘Khorassan’, 1890–91, DCR 976, 14; ‘Report on the trade of Khorasan and Sistan for the financial year 1892–93 by E. C. Ringler Thomson’, FO, DCR AS 1268 (1893), 4; ‘Report on the trade and commerce of the consular districts of Kerman and Persian Beluchistan from March, 1894, to March 1895’, by Percy M. Sykes, FO, DCR AS 1671 (1896), 2–3, 12; Percy Sykes, A History of Persia, 3rd edition, II, London, 1969, 391. 15 Sykes, History, II, 391. See also Gordon ‘Journey’, 1891, DCR 207, 10; Elias, ‘Khorasan’, 1895– 96, DCR 1800, 23. 16 Coujet to Delcasse, Téhéran, 14 May 1900, Téhéran, V (1897–1901), CC, MAE.

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That peasants were able to save a portion of their income is also evident from the fact that ‘an ordinary peasant’ was able to spend some qn 350 (£6–7) on the marriage of his children without having to borrow this sum from the moneylender.17 This is also corroborated by Lorimer’s statement that when drought in the late nineteenth century caused a severe shortage of basic food-stuffs, the population in the south did not starve, because the increase of prosperity among the people during the last decades of the century had enabled them to buy large quantities of imported food-stuffs.18 Fourthly, there are no indications that the indebtedness of the peasants increased during the last thirty years of the nineteenth century. Fifthly and finally, there are several descriptive pieces of information which also point to an improvement in the economic welfare of part of the peasant population. Percy Sykes, having in mind what he saw in the Punjab province, one of the most fertile regions in the Indian subcontinent, writes: . . . the peasant in Persia, and especially in the cold parts of the country, is certainly better housed, better clad and better fed than people of the same class in the Panjab. The household comforts, too, are greater. In the Panjab the peasants are in the hands of the money-lenders to a considerable extent, whereas in Persia this is rarely the case.19 Thomas E. Gordon, who served as an oriental and military secretary at the British legation in Tehran in the years 1889–93 and re-visited the country in 1896, writes in his Persia revisited: . . . improvement in the circumstances of the cultivators had taken place more or less all over the country. There was then little demand for products which are now exported and paid for in gold [i.e., cash crops], thus giving a high price in the silver currency of the country. . . . Formerly insecurity and want of confidence confined cultivation and stock-breeding to the barest limits, but it is evident now [1896] that the inhabitants can look to enjoy fruits of their labour, and they are extending their fields of exertion. In the course of my journeying in Persia, I generally found excellent quarters in the village houses. The rather mean outer appearance of the dwellings conveys the idea of poor accommodation within, but the reality is a pleasing disclosure of plain but well-carpeted rooms, with dados of matting or felt for the backs of the sitters by the wall. . . . On the whole, it may be said that the peasantry and labouring classes in

17 Sykes, History, II, 391–2. V. A. Zhukovski quotes a popular song of the late nineteenth century which says that both peasants and merchants in the opium-growing areas became wealthy. See Obraztsy Persidskago Norodnago Tvorchestva, St. Petersburg, 1902, 104. 18 J. G. Lorimer, Gazetteer of the Persian Gulf, ‘Omān, and Central Arabia, I/2, Calcutta, 1915, 2132. 19 Sykes, History, II, 392. Although Sykes wrote in general terms, he was presumably referring primarily to those places in Persia of which he had personal experience.

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Persia are fairly well off, and I think their condition can bear a favourable comparison with that of the same classes in other countries.20 Most other sectors of the economy also underwent a process of growth. This occurred to a large extent as a result of developments in agriculture. An increasing number of the economically active population, in absolute and relative terms, was engaged in commerce. Real incomes derived from services, mainly commerce and banking, also increased to a great extent.21 Foreign and, to a lesser extent, local investments resulted in a modernization of the banking and transport systems. In 1888 the New Oriental Bank Corporation (London) was established and a year later, in 1889, another British Bank, the Imperial Bank of Persia (IBP), was founded. By the late 1890s the IBP had branches, agencies and correspondents in almost all the major towns of the country. In 1890 Iran’s first bank-notes were issued by the IBP, after exclusive rights for the issue of notes had been granted to the Bank by the central government. As far as transportation is concerned, in 1888 the first railway line of 8 miles was constructed, and by the end of the century over 500 miles of metalled roads had been built, mainly with Russian finance. In Tehran’s main streets a tramway line was laid, and various additional works to improve the country’s land-transport system were carried out by British and Russian firms as well as by the Iranian central and provincial governments. As to water communication, in 1888 the Kārūn river was opened to international commercial navigation; installations at the ports of Enzeli and Bushire were improved, and the Iranian commercial fleet expanded. Other means of communication were developed already in the late 1860s, when the Iranian government constructed a telegraph network of some 4,000 miles, an addition to the lines that had been constructed by the Indo-European Telegraph Company. These lines linked the capital to almost all urban centres in the various provinces. In 1874 the foundations of a modern postal service were laid, and three years later Iran joined the International Postal Union.22 Hence, the widening connections between the Iranian economy and the West generated structural changes in the economy, renewed the process of economic growth and resulted in an increase in the real income of various sections of the society. The question of the ‘agents and bearers’ of economic growth and modernization is, of course, of great significance. It is obvious that the central government played only a marginal role in affecting these developments. The activities of foreigners, particularly Europeans, were of some importance. But, the modernizers of the economy were a small group of Iranian nationals, most of whom were Muslims and big merchants by profession. The big merchants played a central role 20 Thomas E. Gordon, Persia revisited (1895), London, 1896, 39–40. 21 Preece, ‘Ispahan’, 1894–95, DCR 1662, 24; ‘Report on the trade and general condition of the city and province of Kermanshah’ by H. L. Rabino, FO, DCR MS 590 (1903), 13–14. 22 A. Houtum-Schindler, ‘Persia (Geography and Statistics)’, EB 11th ed., XXI, 194–6; SY 1906, 1247–8.

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in bringing about growth in certain sections of agriculture, traditional and modern industry, transportation and other services. In most cases their investments in these branches of the economy were closely linked to their commercial activities. The structural changes in agriculture, particularly the expansion of opium cultivation, were to a large extent a direct result of their enterprise.23 By financing the costs of opium cultivation and by increasingly buying land they managed to acquire control over production itself. Perhaps the best example to illustrate this statement is the sale of the Shūlistān Khāliṣa lands (north of Kāzirūn) in Fārs to the big merchant Ḥājjī Āqā Muḥammad Mu’īn al-Tujjār Būshihrī, one of the wealthiest persons in Iran in the late nineteenth century. In 1901–2 the ṣadr-i a’ẓam, Mīrzā ‘All Aṣghar Khān Amīn al-Sulṭān, in an attempt to ease the central government’s financial stringency, arranged the sale of the major part of the Shūlistān lands to the Mu’īn al-Tujjār Būshihrī, who, inter alia, was one of the private bankers of the Shah. The area, populated by the Mamassanī tribesmen, was famous for the excellent opium that was grown there. Mu’īn al-Tujjār, who was interested in bringing more arable land under cultivation, sought and received a farmān which ‘gives him right of “haute et basse justice” over the lands and tribes purchased by him; and over which the Governor-General of Fārs has no right of jurisdiction or taxation’.24 After Mu’īn al-Tujjār Būshihrī had managed to obtain a full control over the Shūlistān Khāliṣa and its population, by using his economic influence and with the cooperation of the Mamassanīs, he brought fallow lands under cultivation, mainly of opium poppy.25 So far as industry is concerned, it was primarily due to the big merchants’ investments and entrepreneurship that carpet-weaving increased in many rural areas, particularly among the tribal population.26 The tujjār were also active in the late nineteenth century and early twentieth century in introducing modern industrial enterprises into the country. For example, glass and porcelain factories were established by the merchant Ḥājjī Muḥammad Ḥasan Amīn al-Ḍarb in Tehran. Later he opened a modern silk reeling factory in Rasht. Two other merchants, Ḥājjī ‘Abbās ‘Alī and Ḥājjī Riḍā, erected a porcelain factory in Tabriz. By the turn of the century Ḥājjī Raḥīm Āqā Qazwīnī established a cotton spinning mill in Tabriz, and Ḥājjī Mīrzā ‘Alī Muḥammad Iṣfahānī founded a cotton ginning plant in Sabzawār.27 In the 1900s Iranian merchants also constructed

23 ‘Memorandum on the opium of Persia’ in ‘Reports by Consul-General [Edward Charles] Ross on the trade and commerce of the Persian Gulf for the years 1873–78’, PP, A &P LXXIII (1880), 255; ‘Report on the trade and commerce of the consular district of Bushire for the year 1892’, by Adelbert C. Talbot, FO, DCR AS 1252 (1893), 5; ‘Chatrut’, GP, IV, Calcutta, 1892, 89–90. 24 ‘Momassanī’, GP, III, Simla, 1910, 653. 25 ‘Kāzarūn’, GP, II, Simla, 1910, 503. 26 Abdullaev, 59. 27 Mīrzā Muḥammad Ḥasan Khān I’timād al-Salṭana [Sanī’ al-Dawla], Tārīkh-i muntaẓam-i Nāṣirī, lith., II, Tehran, 1300/1883, 271, 281; idem, Kitāb al-ma’āthir wa al-āthār, lith., Tehran, 1306/1888–9, 82, 95–6, 102; idem, Mir’āt al-buldān-i Nāṣirī, II, Tehran, 1294/1877, 254, 282; Muḥammad ‘Alī Jamālzāda, Gandī-yi Shāygān, Berlin, 1335/1917, 93–5; Churchill, ‘Ghilan’, 1891, DCR 1189, p. 3.

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several small electric power stations. Amīn al-Ḍarb II, for example, opened an electric plant in Tehran in 1907–8 and supplied electric power to light the capital’s main streets and the shops on these major arteries.28 The big merchants also played an important role in improving means of transport in the country. The establishment and growth of the Nāṣirī navigation company is a relevant example. At the end of 1888, after the lower Kārūn river had been opened to international traffic, a special concession was given by Nāṣir al-Dīn Shāh to a local syndicate, the Nāṣirī navigation company, of which the most prominent members were two wealthy merchants, the Malik al-Tujjār Ḥājjī Muḥammad Mihdī Mu’tamid al-Sulṭān and the Mu’īn al-Tujjār Ḥājjī Āqā Muhammad Būshihrī. The company was given exclusive rights of navigation on the Kārūn and its branches above Ahwāz. By 1891–92 the company’s steamers carried about four-fifths of the river cargo. In 1891 the company constructed a carriage tramway from Nāṣirī to Ahwāz, and in 1893 the owners of the Nāṣirī company announced the opening of the Dīz river to traffic. The big merchants also financed the foundation of the Shāhanshāhī Company, the second Iranian navigation concern which ran steamers on the Kārūn.29 The tujjār also invested in constructing new caravanserais and in breeding beasts of burden.30 It seems that the phenomenon of the big merchants in Iran – a local group playing a central role in the process of economic growth – was unique in the history of nineteenth-century Middle Eastern economies. During the 1880s and 1890s inflation prevailed in almost all of the main towns of the country, to a great extent a result of the country’s surplus in its current account. The prices of basic necessities increased by 2 to 3 times.31 By contrast, wages and salaries increased, in nominal terms, at much lower rates. Thus, artisans, labourers, government officials, and other groups which lived on wages and salaries were hard hit by inflation. All the same, as often occurs in periods of inflation, peasants, tribesmen who were engaged in agricultural and export-oriented industrial production, and merchants not only did not suffer from this development but rather enjoyed an increase in terms of their real income at a rate higher than it would have been, had the country not been suffering from an inflationary process. This was particularly true with respect to the big wholesale merchants who took advantage of their increasing control over the supply of basic foodstuffs, to the extent that they were able to fix prices of such commodities as wheat and barley, at a level still higher than the market forces would have established. The growing economic involvement of Iran with the West also affected the financial position of the central government and the ruling classes in general. Two

28 Jamālzāda, 94–5. 29 Lorimer, I/2, 1726–8. 30 For details see ‘Agda’, GP, II, Simla, 1905, 12–13; ‘Gilak’, GP, II, 1914, 186; Gordon, ‘Journey’, 1891, DCR 207, 8–9; Curzon, I, 559–619. 31 Gad G. Gilbar, ‘Trends in the development of prices in late Qājār Iran, 1870–1906’, Iranian Studies, XVI, 3–4, 1983, 180–6, 188–97.

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fiscal processes began in the late 1860s and early 1870s: on the one hand, in real terms, central government expenditure increased, while on the other its revenue, in real terms, decreased. In nominal terms, expenditure increased in the period from 1867 to 1906 from qn 42.5 million to qn 105 million, while revenue increased in the same period from qn 48.4 million to only qn 75 million.32 The increase in expenditure was affected by a rapid increase in consumption by both the court and the central administration. Nāṣir al-Dīn and Muẓaffar al-Dīn’s various trips to Europe, the increase in allowances and pensions both to members of the royal family and the upper echelon of the bureaucracy were, to a great extent, responsible for this development.33 There was also a considerable increase in the expenditure of the central government on defence, subsequent to the formation of the Persian Cossack Brigade in 1879 and to naval developments in the 1880s.34 The decrease in revenue, in real terms, was the result of both economic and administrative developments. First, the central fiscal administration was unable to keep pace with the structural changes which were taking place in the economy. This is evident from the fact that the central government’s land tax assessments were not properly adjusted during the 1880s and 1890s to the growth in agricultural production which occurred in many regions. Secondly, of still greater significance is the fact that the land tax assessments were not fully adjusted to the fall in the real value of the qirān in the capital and most other major urban centres of the country. Thirdly and finally, the central government was in the last three decades of the nineteenth century unable to enforce its fiscal demands throughout the country. In contrast to earlier decades, provincial governors more frequently refrained from remitting all but a fraction of the taxes due from their respective provinces to the central government, while the latter rarely had recourse to the use of military force to collect arrears. Even such classes as the merchants were, until the end of the century, strong enough vis-a-vis the government to prevent any change in the system and rates of taxation which would have affected them.35 Consequent upon these developments the government revenue from direct taxes, in constant prices, was in the late 1890s, if not earlier, lower by at least 50 per cent in comparison with the years before the great famine. During this period total revenue (both direct and indirect taxes) fell, in constant prices, by at least 30 per 32 See and compare ‘Report by Mr. [Ronald F.] Thomson, Her Majesty’s Secretary of Legation, on the Population, Revenue, Military Force, and Trade of Persia’ PP, A&P LXIX (1867–68), 250–2, 258; Almanach de Gotha, 1909, 1026. Mihdī Malikzāda, Tārīkh-i inqilāb-i mashrūṭiyyat-i Īrān, III, Tehran, 1328/1949, 92; Edward G. Browne, The Persian revolution of 1905–1909, Cambridge, 1910, 240. 33 For an example on the cost of these trips see Browne, Persian revolution, 105. The annual allowance of Shu’ā’ al-Salṭana, the second son of Muẓaffar al-Dīn Shāh, amounted in 1906 to qn 1,115,000. Malikzāda, III, 92. See also Shaul Bakhash, Iran: monarchy, bureaucracy and reform under the Qajars 1858–1896, London, 1978, 263. 34 Thomas E. Gordon, A varied life, London, 1906, 315–6; SY 1888, 875; Bakhash, 276. 35 Gordon, Persia, 39; W. Morgan Shuster, The strangling of Persia, London, 1912, 247–9; Ann K. S. Lambton, ‘Ḍarība (5)-Persia’, EI, 2nd ed., II, 151.

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cent. It thus appears that already by the mid-1870s the government was facing a permanent deficit in its ‘budget’. The various economic developments described above brought about or contributed to the evolution of several social changes. Of particular significance were developments in the ecological distribution of the population. There was a certain movement from nomadism to sedentarization. Certain tribes established themselves in villages while others migrated to towns. The gradual increase in the cultivation of cash crops, resulting in higher returns for settled agricultural activity, affected the attitude of certain tribes, especially those which had been greatly weakened and impoverished by the great famine, and led them to a settled life. Some tribesmen, particularly certain sections of Lurs in Fārs, established new villages and began to cultivate cash and subsistence crops on their own initiative. Others, such as Mamassanīs in Khūzistān, were persuaded by large wholesale merchants and landlords, who furnished them with the necessary funds to cultivate cash crops, to engage in settled agricultural production.36 Iran also underwent a process of urbanization during the second half of the nineteenth century and the early twentieth century. Whereas in 1868 the country had apparently only 30 towns (settlements with 10,000 inhabitants or more) which together had some 850,000 inhabitants, in the early twentieth century, there were apparently 58 towns in which about 1.8 million people dwelt. In other words, the population of townsmen increased from 8 or 9 per cent in the mid-nineteenth century to some 18 per cent of the total population in the early 1900s. Three towns numbered in the early twentieth century 100,000 inhabitants or more: Tehran had about 280,000 inhabitants, Tabrīz 200,000 and Iṣfahān 100,000; Kirmān and Shīrāz had each 60,000, and Yazd 50,000. Of the seven largest towns Tehran alone grew at a rapid rate. From the probable 70,000 inhabitants residing in the capital after the great famine its population rose to 280,000 in 1908. The implication of these figures is that the population in the capital increased at an average annual rate of 8.6 per cent during the years 1873– 1908. The rapid growth of Tehran was consequent upon the development works carried out in the town in the 1870s and the growth of its commercial importance so that it became in the late nineteenth century the country’s most important commercial and services centre. The bulk of the increased population was accounted for by newcomers from the rural areas. Thus, a class of unskilled labourers, most of whom had been peasants and nomads (known as the kulāh namadī), grew up in the capital. Of the other major towns the growth of Iṣfahān on the one hand and that of Tabrīz on the other are of some interest. In the period under discussion the long process of decline in the number of Iṣfahān’s inhabitants finally came to an end. In the years from 1873 to 1891 the town grew at an average annual rate of 4.4 per cent, from some 50,000 inhabitants to 90,000. This increase slackened in the

36 See further Gilbar, ‘Demographic developments’, 146–7.

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1890s and the early years of the twentieth century, when the town grew at an average annual rate of only 0.7 per cent. The growth of Iṣfahān during the eighteen years which followed the great famine is a clear indication of its growing commercial functions which resulted from the introduction of opium cultivation in the central and southern provinces, and the growth in the volume of Iran’s foreign trade through the Persian Gulf ports. By contrast, Tabrīz grew in the years from 1873 to 1891 at an average annual rate of only 1.0 per cent. This was hardly higher than the natural growth rate of its inhabitants. The lack of migration to Tabrīz was an obvious outcome of the decline in its commercial importance subsequent upon the decline of the Trebizond-Tabrīz trade route. The average annual growth rate of the other major towns bears witness to a substantial growth in their commercial activity. In spite of the decline of traditional industries, these towns which had previously been important industrial centres, grew at a higher rate than the natural growth rate of their respective inhabitants.37 Emigration to certain urban centres of the Middle East and India, such as Istanbul, Cairo, Damascus, Karachi, Bombay and Calcutta, was also on the increase. Most emigrants to these places were merchants or people who became engaged in commerce after they had established themselves in their new places of residence. To a great extent they were agents and representatives of large Iranian import and export trading firms.38 In view of the deteriorating fiscal position of the central government, steps were taken to change the distribution of wealth in Iranian society, especially in regard to the public sector as against the private sector. This policy resulted in a major confrontation between the central government and various sections of the population, particularly the big merchants. The first attempts to reform the fiscal administration and the collection of direct taxes were carried out in 1872 and in 1875–76, then in 1878, in 1885–86 and in 1889–90.39 However, none of these efforts resulted in a substantial increase, even in nominal terms, in the central government’s revenue. Various steps that had been taken to bring about an increase in the revenue from customs were, by 1900, only partially successful.40 Against this background the Shah and the government tried to effect an increase in revenue in other ways. The sale of offices and functions spread; greater use of pīshkash was made; and concessions for the establishment of monopolies in 37 Ibid., 147–51. On the development and growth of Tehran see Mansoureh Ettehadieh, ‘Patterns in urban development: the growth of Tehran (1852–1903)’ in C. E. Bosworth and C. Hillenbrand (eds.), Qajar Iran, political, social and cultural change, Edinburgh, 1983, 201–3. 38 Gilbar, ‘Demographic developments’, 153–4. 39 William G. Abbott to W[illia]m Taylor Thomson, no. 8, Resht, 31 March 1875, enclosure no. 2 in William G. Abbott to the Earl of Derby, no. 6, Resht, 6 April 1875, FO 60/374, NAUK; Ḥājjī Mīrzā Ḥasan Fasā’i, Fārs nāma-i Nāṣirī, lith., I, Tehran, 1313/1895, 337; ‘Report by Consul [Henry Adrian] Churchill on the trade and commerce of the province of Ghilan for the Year 1878’, PP, A &P LXX (1878–79), 473–4; Ann K. S. Lambton, Landlord and peasant in Persia, London, 1953, 167–70; Bakhash, 102–4. 40 SY 1888, 876.

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various fields and for the development of the country’s resources were granted both to local and foreign nationals.41 But the gap between revenue and expenditure was becoming so large during the 1880s and 1890s that the income derived from these expedients was not sufficient to offset the budgetary deficit. Loans from local big merchants were taken to an increasing extent, but this was only a short-term solution. It seems that as early as the mid-1870s the government considered soliciting a loan from foreign banks. According to rumours in Tehran a special government envoy went to European financial centres to check the terms on which it would be possible to borrow money from European banks.42 Fiscal developments in the 1870s in both the Ottoman Empire and Egypt seem to have had a great effect on the Persian government’s attitude towards foreign loans, and the issue was dropped. Consequently, Nāṣir al-Dīn began to use gold and silver reserves which had been accumulated in the royal treasury, and during the 1870s and 1880s these reserves decreased by some 66 per cent: from £1.5 million in 1868 to about £0.5 million in 1888.43 The £500,000 that the Iranian government borrowed in 1892 from the Imperial Bank of Persia for the payment of compensation to the holders of the tobacco concession after the Régie had been abolished, was borrowed at a time when there had already been a decrease in the royal reserves and when there were no longer large funds in the Shah’s treasury. Such reserves as remained were entirely eaten up within a few months after Muẓaffar al-Dīn’s accession to the throne.44 Thus, by the late 1890s the Shah and his government were faced with a situation in which only two possibilities were open to them if a financial break-down of the central administration was to be avoided: (i) to cut drastically the expenditure of the Shah, the court and the central administration, or (ii) to take out loans from foreign governments and banks. In 1897–98 the ṣadr-i a’ẓam Mīrza ‘Alī Khān Amīn

41 F. Stolze and F. C. Andreas, Die Handelsverhältnisse Persiens, mit besonderer Berücksichtigung der deutschen Interessen, Petermanns Mitteilungen, Ergänzungsheft, no. 77, Gotha, 1885, 2–3; Curzon, I, 438–40. In 1888–90 to 1900–1 the central government revenue from rents and leases of monopolies and concessions increased from qn 1,070,000 to qn 5,775,000. See Curzon, II, 477 and Houtum-Schindler, EB, 10th ed., xxxi, 621. 42 W[illia]m Taylour Thomson to the Earl of Derby, no. 159, Tehran, 2 November 1876, FO 60/381, NAUK. These rumours were strongly denied by the Iranian ambassador in Paris. In a letter which was published in both Le Figaro and The Times, he writes: ‘. . . in the course of the present month [April 1876] several journals have affirmed, accompanying the assertion with sundry malevolent insinuations, that Persia is upon the point of negotiating a loan. After seeking instructions from my Government, I am authorized formally to deny this statement, and to declare that Persia has never entertained the intention of entering upon that path of money-borrowing which she would consider as fatal, both to her present interests and her future prospects’. The Times (London), 26 April 1876; Le Figaro (Paris), 25 April 1876. 43 Thomson, ‘Report’, 1868, 259; Curzon, II, 484, n. 1. 44 Sykes, History, II, 374; Valentine Chirol, The Middle Eastern question or some political problems of Indian defence, London, 1903, 51. Cf. Spring Rice to Salisbury, no. 110 (89), Gulahek, 18 September 1900, FO 416/4, NAUK.

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al-Dawla and his minister of finance Abū ‘l-Qāsim Khān Naṣir al-Mulk made a final attempt to restrict the Shah’s and the government’s expenditures. This failed because of strong opposition on the part of both Muẓaffar al-Dīn and prominent members of the court, who were not prepared to reduce their level of consumption, or to give up future plans which demanded large funds.45 Because all the measures which had previously been taken to eliminate the deficit failed, getting loans from foreign governments and banks became inevitable. But the use to which the borrowed money would be put – to finance consumption – made the loans a short-term remedy. The first loan to finance the repayment of current debts and proposed expenditure was granted by the Russian government in January 1900. It amounted to 22.5 million roubles (£2,370,000) at an interest rate of 5 per cent per annum. In 1901 the Iranian government took a loan of qn 10 million (£251,000) from the Imperial Bank of Persia at an interest rate of 12 per cent per annum. The Russian government authorized another loan in 1902 of 10 million roubles (£1,063,000) at an interest rate of 5 per cent per annum. In 1903–4 the Imperial Bank of Persia made a further loan of £300,000 at an interest rate of 5 per cent per annum. In addition to these loans both the Russian Discount and Loan Bank and the British Imperial Bank of Persia made it possible for the government to have a considerable credit in its current account, and by 1906 the government’s debt in this respect was not less than £761,000.46 In order to obtain these loans the Iranian government had to offer a reliable guarantee, namely, a source of revenue which was sufficiently large to secure the payment of the interest and the principal. Both foreign banks and governments which were asked to make substantial loans considered customs revenue to be, in principle, a suitable guarantee. But the actual amount that was transferred to the central government by the lessees of the custom-houses was not big enough to secure the sums for which the Iranian government was asking; nor was the control of the central government over the collection of customs duties satisfactory. In short, a fundamental reform of the customs administration and collection was required in order to obtain substantial loans from foreign institutions. It was mainly for this reason that the central government in 1898 invited Belgian customs experts to come to Iran, and it was only after the government handed to them the administration of the custom-houses of Āzerbāijān that the first Russian loan was given.47 The Belgian customs reform did not result in a basic change in the government’s fiscal condition. Although the Belgian officials managed within two or three years to double the government revenue from customs duties, the budgetary deficit became larger, not smaller. The main significance of the customs reform, from the 45 Browne, Persian revolution, 99, 417. Cf. Gordon, Life, 322. 46 See Memorandum on ‘Persian loans and finances’, Enclosure no. 1 in C. Spring Rice to Edward Grey, ‘General report on Persia for the year 1906’, no. 45 (8914), Tehran, 28 February 1907, FO 371/306, NAUK. 47 Lorimer, I/2, 2595.

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central government’s point of view, was that it made possible the negotiation of additional loans, since the government could point to the improved administration of the customs and the great increase in customs revenue. The political price of the reform of customs was, however, heavy. It has already been pointed out that the reform in the customs collection and regulations adversely affected various sections of the population, such as the bāzārīs, the artisans, and certain groups of the religious classes, and in particular the big merchants. The reform brought about a major change in commercial relations, and deprived the big merchants of possibilities which had hitherto contributed to their growth and prosperity. Further fiscal reforms threatened to bring to an end those conditions that had enabled them to become one of the most economically powerful groups in society.48 Whereas the greater part of the population in the major commercial centres, in their struggle with the government, sought to bring an end to these reforms, the big merchants realized the wider economic implications of fiscal reform in general and the unfavourable effect the presence of the Belgian officials was likely to have on their own economic position. For them, the dismissal of the Minister of Customs, Posts and Telegraphs, the Belgian Joseph Naus, was not enough: what they sought was to maintain or exert some degree of control over the fiscal administration. Hence their decision towards the end of 1905 or early in 1906 to create the circumstances in which the government would have no alternative but to grant a constitution and to establish a representative assembly. In the accomplishment of these two aims the big merchants used their economic power and social influence with other groups of the population, and turned to their advantage the general economic distress which had affected large sections of the urban population. It seems that largely as a result of the activities of the big merchants, the demand for a constitution (qānūn-i asāsī) was put forward and accepted by Muẓaffar al-Dīn Shāh.49 To conclude, the economic penetration of the West into Iran in the nineteenth century was to a large extent an asymmetrical development. While there was an impressive increase in the value and volume of European exports to and imports from Iran, there was no corresponding increase in Western direct economic involvement (manpower, capital and economic enterprise) in the Iranian economy. In other words, the indirect economic penetration of the West into Iran created new economic forces and new opportunities calling for economic enterprise. Iran was not flooded by foreign investors. Local enterprise, run by the big merchants,

48 Gad G. Gilbar, ‘The big merchants (tujjār) and the Persian constitutional revolution of 1906’, Asian and African Studies, XI, 3, 1976–7, 293–5. Chapter 12 in this volume. 49 See further ibid., 295–303. See also Ann K. S. Lambton, ‘The Persian constitutional revolution of 1905–6’ in P. J. Vatikiotis (ed.), Revolution in the Middle East, London, 1972, 175–82. For different approaches see W. M. Floor, ‘The merchants (tujjār) in Qājār Iran’, ZDMG, cxxvi, 1 (1976), 133–4; Aḥmad Ashraf, Mawāni ‘-i tārīkh-i rushd-i sarmāyah-dārī dar Īrān dawra-yi Qājāriyya’, Tehran, 1359/1980, 112–6; Mohammad Reza Afshari, ‘The pīshivarān and merchants in precapitalist Iranian society: an essay on the background and causes of the constitutional revolution’, IJMES, xv, 1983, 148–53.

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was able to emerge. Thus, the big merchants, by their various activities, were in fact the agents and bearers of economic growth in nineteenth-century Iran. Interestingly enough, the economic penetration of the West into Iran further weakened the ability of the central government to rule. Because of their growing economic and political weakness, the Qajars were ready to accept an increase in the direct involvement of Europeans in the economy of Iran. The possibility of a symmetrical European economic involvement aroused strong opposition on the part of those who benefited from the asymmetrical situation, namely the big merchants. Other sections of the Iranian society were also hostile to more direct European penetration, but for different reasons. The conflict that evolved between these groups and the government greatly contributed to the fall of the Qajars.

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9 R E S I S TA N C E T O E C O N O M I C P E N E T R AT I O N The Kārguzār and Foreign Firms in Qajar Iran

Wolfgang Mommsen aptly notes that “Europeans who settled or traded in distant lands overseas took their own laws with them, rather than let themselves be subjected to alien laws and legal institutions. . . . [They] expected their legal disputes to be conducted according to the laws valid in their countries of origin.”1 This certainly reflects the worldview of European merchants, entrepreneurs, and investors operating overseas, who expected their governments to create conditions that from their point of view would support doing business in the colonial or semicolonial world. A case in point was the struggle to establish a judicial system attuned to the aspirations of European capitalists who came to the major urban centers of the Middle East during the long 19th century. From the perspective of European merchants and entrepreneurs, shariʿa or ʿurfī laws in the Ottoman Empire and Qajar Iran were far from satisfactory in a number of vital areas, including the protection of property, honoring written or oral contracts, the settlement of debts, and dealing with bankruptcies. They repeatedly complained to the diplomatic representatives of their countries, or pleaded their case before senior government officials and politicians in their home countries, regarding the intolerable ease, from their standpoint, with which both Muslim and non-Muslim merchants who were subjects of the host countries evaded their commercial and/or financial commitments. They contended that local judicial systems did not grant them, or were perhaps incapable of granting them, the necessary legal protection and that they thus incurred heavy financial losses. From the standpoint of European business people, the solution was to be found in the establishment of special European judicial frameworks for “mixed cases” in which both foreign residents and local subjects were involved. The aim was not the imposition of European codes of law on the entire population but rather the creation of “legal islands” that would satisfy their needs and in which their * The last sections of this article were presented at the XXV International Conference on the Historiography of Asia and Africa, St. Petersburg State University, April 2009. 1 Wolfgang J. Mommsen, “Introduction,” in European Expansion and Law: The Encounter of European and Indigenous Law in 19th- and 20th-Century Africa and Asia, ed. W. J. Mommsen and J. A. de Moor (Oxford: Berg Publishers, 1992), 3.

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claims against local subjects would be heard. In the Ottoman Empire, Egypt, and a number of countries outside the Middle East (Morocco, French Indochina, and Siam) this notion of judicial “islands” took shape during the 19th and early 20th centuries in the form of “mixed courts,” where local and foreign (mainly European) judges sat side by side, in varying proportions, and administered justice in mixed cases in accordance with foreign (European) legal codices. On the face of it, the rulers of the Ottoman Empire and Egypt should have rejected the establishment of mixed courts, since the very principle of it constituted a violation of an important element of judicial sovereignty.2 Yet, over the course of the 19th century the rulers of both the Ottoman Empire and Egypt either supported or initiated the establishment of these judicial islands, as the extant situation prior to the establishment of the mixed courts was, from their point of view, worse. In actuality, mixed courts were meant to check the violation by foreign consuls of Ottoman or Egyptian judicial sovereignty. Such courts, however, were never established in Qajar Iran even though European, especially British, merchants and entrepreneurs urged their governments to form legal islands to meet their expectations and needs. Like the rulers of the Ottoman Empire and Egypt, the Qajars were unable to ignore these pressures, but they adopted a different approach, unique to Iran. They established an institution – that of the kārguzār (agent; pl. kārguzārān) and his majlis (court) – that served as a sort of substitute for mixed courts. To understand the uniqueness of the Qajar solution to the mixed-cases dilemma, I shall first briefly examine the evolution of the mixed courts in the Ottoman Empire and Egypt, followed by a discussion of the very different institution of the kārguzār and his court in Iran.

Mixed Courts in the Ottoman Empire and Egypt The Ottoman Empire entered the 19th century in a state similar to that of Qajar Iran regarding mixed cases. Such cases were brought to the shariʿa courts, where qadis tried the cases in accordance with Muslim law.3 However, treaties signed by the Ottoman sultans with foreign rulers as far back as the 16th century stipulated that cases of foreign nationals heard in the maḥkama (shariʿa court) required the presence of the respective consul or the consulate’s dragoman.4 Over hundreds of years, from the 16th to the 19th centuries, the Ottoman authorities scrupulously upheld two basic principles: (1) the preeminence of the local subject’s legal rights 2 Judicial sovereignty is a component of “Westphalian/Vattelian Sovereignty.” For the three main categories of sovereignty, see Stephen D. Krasner, “The Hole in the Whole: Sovereignty, Shared Sovereignty, and International Law,” Michigan Journal of International Law 25 (2004): 3–4. The establishment of mixed courts in Egypt violated Ottoman-Egyptian judicial sovereignty. 3 The fundamental approach of the Ottomans to mixed cases is to be found in Article 42 of the Final Treaty of Capitulations: The Ottoman Empire and England, September 1675. See J. C. Hurewitz, The Middle East and North Africa in World Politics: A Documentary Record, vol. 1, European Expansion 1535–1914, 2nd ed. (New Haven, Conn.: Yale University Press, 1975), 37. 4 H. Inalcık, “Imtiyāzāt,” EI, 2nd ed., 3: 1180.

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over those of the foreign national in instances of mixed cases, in that the hearing would be in a local court before a local judge and that judgment would be in accordance with Muslim law; and (2) that the case of a foreign national would be heard under fair conditions, namely, that an authorized person would be present in the courtroom who understood the language in which the hearing was held, was familiar with the legal procedures, and was capable of providing legal assistance to the foreign national, whether plaintiff or defendant. During the 19th century, the first principle was eroded in both the Ottoman Empire and Egypt. Underlying this development was the dramatic rise in the number of foreigners residing in the major port cities, the increased economic activity of European firms there, and the intensive involvement of the European powers in the political and economic affairs of Istanbul and Cairo. To this should be added two further developments: the growing unease of foreign subjects with maḥkama proceedings due to the a priori inferior legal status of a non-Muslim’s testimony5 and the beginnings of a practice, mainly by British consuls, of hearing mixed cases in consular courts in which they served as judges.6 This last development was evident in commercial and criminal cases alike and was an obvious violation of the Capitulation treaties. Not surprisingly, it was a contentious issue within the British diplomatic network and created tension between the British and the Ottoman authorities.7 Faced with this state of affairs, the Ottoman government was prepared to adopt the mixed-court model as the lesser of two evils. Unlike the consular court, the mixed court was an Ottoman court under the state’s control and supervision, and a majority of its judges were Ottoman subjects. The first mixed tribunal was established in Istanbul in 1841, becoming a formal court in 1848.8 By 1860, permanent mixed courts had also been established in Izmir, Beirut, and Alexandria. In that year the Ottomans reformed the institution, mandating that five judges sit in each of the courts – three (including the president of the court) who were Ottoman subjects and two who were foreign nationals.9 In the following two decades, the central government initiated a number of changes in the procedures of the mixed courts with the aim of curtailing the dragomans’ growing influence in the 5 On the status of non-Muslims in the maḥkama, see Joseph Schacht, An Introduction to Islamic Law (Oxford: Clarendon Press, 1982 [1965]), 132. 6 See, for example, Young to Canning, copy, no. 17, Jerusalem, 3 September 1845, FO 195/210, NAUK. 7 Black to Young, Beirut, 26 June 1845, copy, inclosure no. 6 in Young to Canning, no. 17; and Rose to Young, Beirut, 6 August 1845, copy, inclosure no. 14 in Young to Canning, no. 17, FO 195/210, NAUK. 8 Amable-André Sibille, Jurisprudence et doctrine en matière d’abordage, ou Commentaire pratique des articles 407, 435 et 436 du code de commerce. (Nantes: Imprimerie deVincent Forest, 1853), 385–86; and George Young, Corps de droit Ottoman: recueil des codes, Lois [etc.] du droit intérieur, et d’études sur le droit coutumier de l’Empire Ottoman (Oxford: Clarendon Press, 1905), 1: 240. 9 André Mandelstam, La justice ottomane dans ses rapports avec les puissances étrangères (Paris: Librairie de la cour d’appel et de l’ordre des Avocats, 1908), 123, 67–68; James Harry Scott, The Law Affecting Foreigners in Egypt (Edinburgh: William Green and Sons, 1907), 193; and Jasper Yeates Brinton, The Mixed Courts of Egypt, rev. ed. (New Haven, Conn.: Yale University Press, 1968), 6.

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courtroom.10 Yet despite the Ottoman government’s abiding efforts to restrict the legal privileges of subjects of the Capitulatory states, its success in the context of mixed cases appears to have been limited,11 and up to the abrogation of the Capitulation agreements in 1914 by the Young Turk government, foreign firms operating in the empire made effective use of the mixed courts. In Egypt, developments were more far reaching. By the 1850s and 1860s the consuls of the Capitulatory states were in fact in control of mixed cases. Egyptian subjects sued by foreign nationals found themselves in British, French, Italian, Greek, or other consular courts. No less than fifteen countries maintained consular courts, which tried Egyptian subjects in accordance with various legal codes.12 To address this legal chaos, the Egyptian authorities sought to curb the grave deterioration in the country’s judicial sovereignty.13 Nubar Pasha, one of Egypt’s most prominent statesmen in the 1860s and 1870s, initiated the establishment of a new legal structure with the encouragement of Khedive Ismaʿil. In 1876, after eight years of complex preparation, a “progressive” version of mixed civil and commercial courts was inaugurated in Cairo and Alexandria.14 The judges in these courts, who relied mainly on French legal codes, were experienced senior jurists. In both the first and the appellate instances, foreign judges were in the majority (four of seven in the first instance and seven of eleven in the appellate). The appointment of judges was made in consultation with the Capitulatory governments.15 Some of the foreign judges had previously served their own governments as senior jurists and apparently viewed themselves as representatives of their home governments rather than as an integral part of the Egyptian judiciary.16 Mixed courts operated in Egypt for over seventy years and were dissolved only in 1949. Although an analysis of the costs and benefits of these institutions to the Egyptian economy and to Egyptian local entrepreneurs has still to be made, there is little question that mixed courts made an important contribution to foreign 10 See “Réglement relatif aux Consulats Étrangers,” 1 août 1863 and “Circulaire aux Gouverneurs Généraux,” décembre 1865, in Great Britain, FO, British and Foreign State Papers, 1812–1934 (London: His Majesty’s Stationery Office, 1941), 68, 1048–52. 11 Mandelstam, La justice ottomane, 196–209, 267–68. 12 Brinton, The Mixed Courts, 6. See also Byron Cannon, Politics of Law and the Court in NineteenthCentury Egypt (Salt Lake City, Utah: University of Utah Press, 1988), 44. 13 Ahmad Fathi Zaghlul, Taʾrikh al-Muhama (Cairo: Matbaʿat al-Maʿarif, 1900), 31–42. 14 Brinton, The Mixed Courts, 8–24; F. Robert Hunter, Egypt under the Khedives, 1805–1879: From Household Government to Modern Bureaucracy (Pittsburgh, Pa.: University of Pittsburgh Press, 1984), 174–76; Cannon, Politics of Law, 45–54; and Mark S. W. Hoyle, Mixed Courts of Egypt (London: Graham & Trotman, 1991), 9–11. See also Konrad Zweigert and Hein Kötz, Introduction to Comparative Law, 3rd ed. (Oxford: Clarendon Press, 1998), 110. Cf. Gabriel M. Wilner, “The Mixed Courts of Egypt: A Study of the Use of Natural Law and Equity,” Georgia Journal of International and Comparative Law 5 (1975): 407–30. 15 Brinton, The Mixed Courts, 44. 16 Nathan J. Brown, The Rule of Law in the Arab World: Courts in Egypt and the Gulf (Cambridge: Cambridge University Press, 1997), 50, n. 72.

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economic penetration and economic control of Egypt during the late 19th and early 20th centuries.17

The Formal and Informal Roles of the Kārguzār The foundations of foreigners’ privileges in 19th-century Iran were laid down in the Treaty of Turkmanchai signed between Russia and Iran in February 1828.18 Iran, which had been defeated on the battlefield, was compelled to accept the terms of the treaty imposed by Russia. These terms were similar in many respects to the Capitulation agreements that Russia had signed with the Ottoman Empire in the 18th century. Article 7 of the commercial treaty stipulates that “suits or differences” between Russian and Iranian subjects would be brought before the hakim, or governor, for his decision,19 signifying that the hearing in mixed cases would be before an ʿurfī, not a shariʿa, court. This article also stipulates that the hearing must be held in the presence of the dragoman of the embassy or consulate of the country of the foreign national.20 With the passage of time, additional countries, first and foremost Britain,21 signed trade agreements with Iran that granted their subjects rights identical to those set out in the Treaty of Turkmanchai. It is not clear whether the establishment of the function of the kārguzār by the Qajar authorities was an outcome of Article 7.22 In any case, this function is not mentioned in either the Russian or the British commercial treaties with Iran. Important aspects of the history of the kārguzār have already been discussed in a comprehensive study by Vanessa Martin and Morteza Nouraei23 and in Willem

17 Idem, “The Precarious Life and Slow Death of the Mixed Courts of Egypt,” International Journal of Middle East Studies 25 (1993): 36; and Juan R. I. Cole, Colonialism and Revolution in the Middle East Social and Cultural Origins of Egypt’s ʿUrabi Movement (Princeton, N.J.: Princeton University Press, 1993), 66. 18 “Treaties of Peace and Commerce (Turkmanchay): Persia and Russia,” in Hurewitz, The Middle East and North Africa, 1, 231–37. 19 Ibid., 237. 20 Ibid. 21 “Treaty of Commerce: The United Kingdom and Persia, 28 October 1841,” in Hurewitz, The Middle East and North Africa, 1, 280. 22 William Taylor Thomson, Britain’s ambassador in Tehran (1872–79), wrote in December 1873 that in “cases between foreign and Persian subjects . . . usage has superseded the terms of the treaty in question [Turkmanchai].” Other British diplomats in Iran, as well as officials at the India Office and the FO, endorsed Thomson’s view. See Haworth to Clive, Bushire, 6 August 1927, inclosure in no. 109, Clive to Chamberlain, Gulhek, 7 September 1927, E 4106/526/34, FO 416/81, NAUK. 23 Vanessa Martin and Morteza Nouraei, “The Role of the Karguzar in the Foreign Relations of State and Society of Iran from the Mid-Nineteenth Century to 1921. Part I: Diplomatic Relations,” Journal of the Royal Asiatic Society 15 (2005): 261–77; Morteza Nouraei and Vanessa Martin, “Part II: The Karguzar and Security, the Trade Routes of Iran and Foreign Subjects, 1900–1921,” Journal of the Royal Asiatic Society 16 (2006): 29–41; idem, “Part III: The Karguzar and Disputes over Foreign Trade,” Journal of the Royal Asiatic Society 16 (2006): 151–63.

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Floor’s articles.24 An aspect that has not been explored to date, however, is the demand of British consuls and merchants to introduce mixed courts into Iran. To clarify this issue, an outline of the development and main characteristics of the office of the kārguzār and his court must first be presented. The kārguzār was an official of the Ministry of Foreign Affairs (dīwān-i ummūr-i khārija) answerable directly to the ministry in Tehran. He may have been an upgraded bureaucratic functionary, the dabīr-i mahāmm-i khārija, as he had a number of responsibilities similar to existing functions before the treaty of 1828.25 Both Iranian and British documents reveal evidence of the activity of kārguzārān in several northern and southern provinces in the 1830s and 1840s.26 During the 1880s and 1890s, with the growing number of foreigners and their economic activities in Iran, and the consequent increase in the number of foreign consulates, additional kārguzār offices were opened in many urban centers and in the Persian Gulf ports. By the beginning of the 20th century there were thirty-six kārguzār offices throughout the country, most of which had several employees to assist the kārguzār in discharging his duties.27 The kārguzār had three main roles. First, he dealt with applications from foreigners residing in the city or province in which he sat, which usually reached him through the various consuls, in all matters pertaining to the settlement of claims or commercial and other disputes between foreigners and locals. Foreign consuls also expected the kārguzār to assist them whenever they faced difficulties in their relations with local inhabitants.28 Second, he served as an important conduit for conveying the authorities’ instructions to foreign nationals and reporting to superiors in the foreign ministry in Tehran on events involving foreigners. Third, he performed additional tasks assigned by the authorities that were directly or indirectly connected with the activities of foreigners or of individuals or groups connected with the Capitulatory states. In sum, the network of kārguzār offices

24 W. M. Floor, “Bankruptcy in Qajar Iran,” Zeitschrift der Deutschen Morgenlandischen Gesellschaft 127 (1977): 71–76; idem, “Change and Development in the Judicial System of Qajar Iran (1800–1925)” in Qajar Iran: Political, Social and Cultural Change, 1800–1925, eds. Edmund Bosworth and Carole Hillenbrand (Edinburgh: Edinburgh University Press, 1983), 133–37. 25 As late as March 1856 the term dabīr to designate the agent of the Iranian FO was still in use in Tabriz. See Abbott to Murray, Tabriz, 22 March 1856, FO 248/163, NAUK. 26 See Martin and Nouraei, “Kārguzār. I: Diplomatic Relations,” 263, n. 15; and Vanessa Martin, The Qajar Pact: Bargaining, Protest and the State in Nineteenth-Century Persia (London: I. B. Tauris, 2005), 38. 27 For lists of the cities/provinces that had kārguzār offices in the early 1880s, see Muhammad Hasan Khan Sani ʿal-Dawla Iʿtimad al-Saltana, Mirʾat al-Buldan-i Nasiri, 4 vols. (Tehran: n.p., 1881–84), 2: appendix, 21, 3: appendix, 37; and F. Stolze and F. C. Andreas, Die Handelsverhältnisse Persiens, mit besonderer Berücksichtigung der deutschen Interessen (Gotha: Justus Perthes, 1885), 66. Between the late 1880s and the early 1900s the number of kārguzār offices almost doubled. See Morteza Nouraei, “Kārgozār,” EIr, 15: 559. 28 Barclay to Grey, telegram no. 696, Tehran, 14 December 1911; Barclay to Grey, telegram no. 705, Tehran, 15 December 1911; Barclay to Grey, telegram no. 708, Tehran, 16 December 1911; Barclay to Grey, telegram no. 713, Tehran, 17 December 1911, FO 371/1181, NAUK.

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provided the central government in general and the foreign ministry in particular with an important means of monitoring and controlling developments in the foreign communities in the provinces. In order to settle business disputes between foreign firms or individuals and local subjects, the kārguzār was given the authority to summon foreigners and locals to his office (kārguzārī) to examine their complaints or claims, interrogate the parties to a dispute, and adjudicate mixed cases in his majlis. His judicial authority also included the imposition of small fines and the imprisonment of local subjects for short periods. The kārguzār’s judgment was based broadly on shariʿa law, although he was not obliged to have an Islamic legal education and was not bound to judge in accordance with this law. An additional source for his judgments was local custom (ʿurf).29 Yet another important difference between the shariʿa maḥkama and the kārguzār’s majlis was the greater reliance on written documents in the majlis’ deliberations.30 The judicial position of the kārguzār should be viewed as part of the ʿurfī legal system in which provincial governors played a central role as judges. Evidence of the kārguzār’s activities and methods of operation clearly show that in dealing with claims and disputes between foreigners and locals, he did his best to find an agreed solution between the two parties. More than a judicial authority, he was an arbitrator and mediator who strove to bring the litigants to a compromise.31 In many cases, the arbitration process was protracted and exhausting, and the compromise was unsatisfactory to the plaintiff (generally, foreign merchant houses) but was accepted purely out of resignation: the plaintiff realized that nothing better could be achieved than the proposal worked out by the kārguzār.32 The central government accorded a relatively high status to the office of kārguzār. In more than one case, members of Qajar elite families were chosen for the position, including tujjār and members of their families,33 and it appears that 29 On the sources of ʿurfī jurisdiction, see A. Sepsis, “Quelques mots sur l’état religieux actuel de la Perse,” Revue de l’Orient, de l’Algérie et des colonies 3 (1844): 104; George N. Curzon, Persia and the Persian Question (London: Longmans, Green & Co., 1892), 1: 454–55; M. L. Tomar, Economicheskoe polozhenie Persii (St. Petersburg: Ministerstvo Finansov, 1895), 115; James Greenfield, Das Handelsrecht einschliesslich des Obligationen-und Pfandrechtes, das Urkundenrecht, Konkursrecht und das Fremdenrecht von Persien (Berlin: R.v. Decker’s Verlag, n.d. [1909]), 11; and L. A. Sobotsinskii, Persiia: Statistiko-ekonomicheskii ocherk (St. Petersburg: Krovitskii, 1913), 301. For an interesting case demonstrating the great difference between shariʿa and ʿurfī jurisdiction, see Herbert Busse’s remark in History of Persia under Qajar Rule: Hasan-e Fasāʾi’s Farsnama-yi Nāseri (New York: Columbia University Press, 1972), 408, n. 475. 30 Greenfield, Handelsrecht, 11. 31 Ibid., 24. 32 John G. Wishard, Twenty Years in Persia: A Narrative of Life under the Last Three Shahs (New York: Fleming H. Revell, 1908), 277. 33 The kārguzār of Bushihr in the early 1870s was a merchant, and his son held the same office in Bandar ʿAbbas. See Mirza Hasan Fasaʾi, Farsnama-yi Nasiri, lith. (Tehran: n.p., 1895–96), 2: 43–45.

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relative to the pay scale of the Qajar bureaucracy the kārguzār enjoyed a high salary.34 This status is not surprising: the institution of the kārguzār served the Qajars well, providing a reasonable framework, from their point of view, for nationals of the Capitulatory states in matters pertaining to mixed cases. Because foreign consuls in Iran avoided violating Capitulation agreements insofar as mixed cases were concerned, and because the kārguzār was accessible – a fact that the foreign consuls did not deny – the central government was not motivated to establish mixed courts. Thus, the institution of the kārguzār was a convenient means of safeguarding the judicial sovereignty of the state. Moreover, the way in which the kārguzār carried out his functions accorded with Nasir al-Din Shah’s policy, until the late 1880s, regarding European economic penetration into Iran. Until October 1888, the shah did not support the opening of the Iranian economy to European investors and entrepreneurs. It seems that in 1885 he even considered prohibiting the importation of foreign goods into Iran.35 The main reason for this attitude was strategic. Opening the Iranian economy to foreigners, he believed, would prepare the ground for the total domination of the country by the great powers.36 Another reason was his reluctance to adopt European social and economic innovations because they did not suit Iranian society.37 Hundreds of files in the British, Russian, French, Austrian, Italian, and U.S. state archives tell the story in various forms of the failure of European entrepreneurs, with or without the support of their respective governments, to receive the shah’s permission to initiate new enterprises in Iran. There were very few exceptions to this pattern: between 1848 and 1888 only a negligible number of economic concessions were granted by Nasir al-Din.38 There seems to have been one major exception to this generalization, the abortive Reuter concession (granted in July

34 C. E. Yate, Khurasan and Sistan (Edinburgh: William Blackwood and Sons, 1900), 44. 35 “Muhammad Hasan,” in Mihdi Bamdad, Sharh-i Hal-i Rijal-i Iran, dar Qurun-i 12, 13 wa 14 Hijri (Tehran: Kitabfurushi-yi Zawwar, 1968–69), 3: 354. 36 Nasir al-Din’s long-standing refusal to open the Karun River to international navigation is perhaps the best known example of his negative attitude toward foreign “economic” penetration for strategic reasons. He was not impressed by arguments made by British representatives in Iran that opening the Karun would contribute to the economic prosperity of the southern provinces. See Firuz Kazemzadeh, Russia and Britain in Persia, 1864–1914: A Study in Imperialism (New Haven, Conn.: Yale University Press, 1968), 160–61; and Heidi A. Walcher, In the Shadow of the King: Zill al-Sultān and Isfahān under the Qājārs (London: I.B. Tauris, 2008), 60. Similarly, the shah did not permit the development of a harbor at Giz on the Caspian Sea lest it strengthen Russian influence in Astarabad. See “Report by Consul [Henry Adrian] Churchill on the Trade and Commerce of Ghilan, Mazenderan, and Asterabad for the Year 1876,” PP, A&P 82 (1877): 761. 37 Abbas Amanat, Pivot of the Universe: Nasir al-Din Shah Qajar and the Iranian Monarchy, 1831– 1896 (Berkeley, Calif.: University of California Press, 1997), 425. 38 For the complex chapter in Iran’s history on granting concessions to foreigners, see Muhammad ʿAli Jamalzada, Ganj-i Shaygan (Berlin: Kawa, 1917), 101–104, 106, 112–15; Ibrahim Taymuri, ʿAsr-i Bikhabari ya Tarikh-i Imtiyazat dar Iran, 4th ed. (Tehran: Chap-i Iqbal, 1984), 97–364; Kazemzadeh, Russia and Britain, 100ff.; and Mansoureh Ettehadieh (Nezam Mafi), “Concessions. ii- in the Qajar Period,” EIr, 6: 120–21.

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1872, canceled in November 1873). Regrettably, little is known about the considerations that led the shah to grant this unprecedented concession. Nasir al-Din was not opposed to economic change, but in view of the country’s military weakness he wanted economic investments to be made at the initiative of local groups, first and foremost the Iranian big merchants.39 In comparison to Muhammad ʿAli’s successors in Egypt, and the bureaucratic elite of the Ottoman Empire in the late 19th century, Nasir al-Din was considerably more fearful of the outcome – namely, the loss of political sovereignty – of increased European economic activity in Iran, especially by subjects of Russia and Britain. The institution of the kārguzār, with its approach to handling business disputes and claims of damages by foreign merchants and investors through a long and exhausting process of arbitration, served Nasir al-Din’s policy well until the late 1880s. During the last years of his rule (1888–96) a dramatic change in his attitude toward foreign economic penetration took place,40 but by that time the pattern of kārguzār conduct was firmly established. Evidence of bitter complaints, especially by British merchant houses, regarding the difficulties of collecting debts from local merchants, and protests about the unsatisfactory functioning of the kārguzār’s court, which from the foreigners’ standpoint was inefficient and one-sided, can be found in numerous commercial reports written mostly by British consuls41 and in detailed transcripts of sessions of the kārguzār’s majlis.42 H.G. Chick, who served in various consular positions first in Bushihr and then in Shiraz from 1906 to 1929, wrote in May 1927: 39 This position was clearly manifested in the case of the majālis-i wukalā-yi tujjār. See Firidun Adamiyat and Huma Natiq, Afkar-i Ijtimaʿi wa Siyasi wa Iqtisadi dar Athar-i Muntashir Nashudayi Dawra-yi Qajar (Tehran: Intisharat-i Agha, 1977), 299–371; and Gad G. Gilbar, “The Rise and Fall of the Tujjār Councils of Representatives in Iran, 1884–85,” Journal of the Economic and Social History of the Orient 51 (2008): 639–74. Chapter 11 in this volume. 40 Gilbar, “Rise and Fall,” 668. 41 See, for example, “Report by Consul General [Henry M.] Jones,” Tabriz, November 1872, PP, A&P 67 (1873): 377; Edward Charles Ross, “Reports . . . on the Trade and Commerce of the Persian Gulf for the Years 1873–78,” PP, A&P 73 (1880): 249; Edward Charles Ross, “Report on the Trade of Southern Persia and the Persian Gulf for the year 1889,” DCR, AS 760 (1890), 5; “Report on the Trade and Commerce of the Persian Gulf for the Year 1900 by Lieut.-Colonel C. A. Kemball,” DCR AS 2631 (1901), 7–8; “Report on the Trade of the Consular District of Resht for the year 1902–03 by Acting Vice-Consul [Alfred F.] Churchill,” DCR AS 3109 (1908), 8; “Report on the Trade and Commerce of Bushire for the Year 1906–07, by Vice-Consul H. G. Chick,” DCR AS 3951 (1908), 5; “Report on the Trade of the Provinces of Seistan and Kain for the Year ending February 19, 1907, by Major R. L. Kennion,” DCR AS 3970 (1908), 10; “Report on the Trade and Commerce of the Province of Arabistan for the Year ended March 20, 1908, by Consul W. McDouall,” DCR AS 4134 (1908), 4; “Report on the Trade of the Consular District of Bushire for the Persian Fiscal Year March 22, 1909, to March 21, 1910, by Mr. N. Worrall . . . ,” DCR AS 4606 (1910), 7; M. Nikol’skii, “Torgovlia Giliana v 1908 godu,” Rossiiskaia Imperiia, Ministerstvo Inostramykh Del, SKD 1909, N2: 120–21; Suprunov to the board of the Discount and Loan Bank of Persia (review of the foreign trade of Khorasan), Mashhad, undated (1911 or 1912), 600/10/215, RGIA; and J. G. Lorimer, Gazetteer of the Persian Gulf, ʿOmān and Central Arabia (Calcutta: Government Printing, 1915), 1/2: 2142. 42 See in particular “the Suleiman (Karikoor) case” and “the Shabankara case.” For the first case, see “Kārguzār’s Report” (translation), Mashhad, 27 June 1890, inclosure no. 36 in “Documents

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Over twenty years’ practice in Karguzarate Courts has shown me that it is enough for any Persian trader to decline to pay a debt, or for goods ordered; he may not have a title of right, and be merely out to defraud, yet the other Persian merchants nominated by him and the complainant to arrange a settlement, or act as “assessors” [at the kārguzār’s court], will, in 99 cases out of the 100, suggest payment of half the indebtedness, more or less, as a compromise.43 No wonder, then, that British consuls in Tabriz, Bushihr, and other towns or ports reported losses of many thousands of pounds sterling incurred by British and other European firms due to unsettled debts of Iranian merchants.44 Similarly, a Russian official – the head of the Mashhad branch of the Discount and Loan Bank – complained in 1911 or 1912 that Persian merchants acting as members of the kārguzār’s court always “defended” their co-religionists in disputes with Russian merchants and that the latter paid dearly for this situation.45 While the central government made various attempts at administrative reform,46 the institution of the kārguzār remained unchanged, as reform was not in the government’s interest. Thus, although the idea behind the establishment of the kārguzār’s office was, inter alia, to settle disputes between foreigners and Iranians, de facto it became an effective hindrance to European economic activity in Iran, a development that accorded with the central government’s policy.

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showing the result of the official inquiry into the death of Suliman . . .,” MacLean to Wolff, Mashhad, 19 July 1890, FO 248/504, NAUK. For the Shabankara case, see “Judgment Order, 14th Zi Hijje, 1327,” “Note, 18/12/09,” and “Note, 22/12/09,” inclosure no. 3 in no. 4/164, Trevor to Barckay, Bushire, 14 January 1909, FO 248/990, NAUK. For an illuminating discussion of the Shabankara case, see Nouraei and Martin, “Karguzar. III: Disputes,” 154–57. For an analysis of the Suleiman (Karikoor) case, see Gad G. Gilbar, “The Mysterious Death of a Commercial Agent and the Kārguzār of Mashhad, 1890,” Iran and the Caucasus 15 (2011): 79–91. Chapter 10 in this volume. Consul Chick to Sir R. Clive, Shiraz, 5 May 1927, inclosure 5 in Sir R. Clive to Sir Austen Chamberlain, Tehran, 20 May 1927, no. 167, FO 416/80, NAUK. For an earlier version of the same conclusion, see H. G. Chick, “Report on the Trade of the Consular District of Bushire for the Persian Fiscal Year March 21, 1911, to March 20, 1912,” DCR AS 5093 (1913), 24. Henry M. Jones wrote in 1871 that “ . . . losses sustained by the European houses here [Tabriz] amount to 40,000l . . . ” See “Report . . . on the Trade and Commerce of Tabreez for the Year 1870,” PP, A&P 65 (1871): 241. John Lorimer wrote in 1914: “When an account of outstanding British and quasi-British claims was made, at the beginning of 1900, for the Persian Coast and Islands, ʿArabistan, and Persian Makran, it was found that there were no less than 105 cases calling for joint investigation and settlement, and that some of them were as much as eight years old. The total of the compensation claimed in the whole of the cases was £27,597 . . . ” See Lorimer, Gazetteer of the Persian Gulf 1/2: 2142. See also Floor, “Bankruptcy,” 75. Suprunov to the board of the Discount and Loan Bank of Persia, (review of the foreign trade of Khorasan), Mashhad, undated (1911 or 1912), 600/10/215, RGIA. For Nasir al-Din’s endeavors to reform the administration, see Shaul Bakhash, Iran, Monarchy, Bureaucracy and Reform under the Qajars: 1858–1896 (London: Ithaca Press, 1978), 166–70, 281–82.

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The Quest for Mixed Courts in Iran The complaints of British representatives in Iran not only focused on the performance of the kārguzār and his majlis but also included criticism of the institution itself and a demand to establish a different legal institution – mixed courts. Given developments in the Ottoman Empire, namely, the opening of mixed courts in Istanbul and other cities, British representatives in Iran may have demanded the establishment of mixed courts as early as the 1850s, and it seems that a mixed court heard cases in Tabriz in the mid-1850s.47 It was, however, a short-lived experiment. The court soon ceased its activity, apparently as a result of grave differences between its Muslim and non-Muslim members regarding the admissibility of testimony by dhimmī witnesses.48 In fact, the experiment failed because there was no a priori understanding between the local (Muslim) and foreign (non-Muslim) judges regarding the legal procedure to be adopted by the court. Nevertheless, British representatives in Iran continued to advocate the establishment of mixed-judicial frameworks. Since the economic interests and activities of British merchants and investors were concentrated in the southern and central provinces during the late Qajar period,49 it was mainly the consuls serving in these regions who called for change. Noteworthy among the many cases attesting to dissatisfaction with the existing situation, and advocating the formation of mixed courts, is an 1872 proposal by the British political resident in Bushihr, Lewis Pelly, who “strongly urged the establishment of a mixed tribunal for the adjudication of cases in which British subjects are plaintiffs and Persians are defendants.”50 It seems that during the 1870s the idea of mixed courts was prevalent at the Bushihr residency,51 and in the late 1870s, Edward Charles Ross, the British consul general in Bushihr, reiterated Pelly’s proposal:

47 Otto E. Blau, Commercielle Zustände Persiens. Aus den Erfahrungen einer Reise im Sommer 1857 dargestellt (Berlin: Verlag der Königlichen geheimen ober-hofbuchdrukerei, 1858), 56. Unlike Tabriz, Tehran did not have a mixed court in the mid-1850s. This is evident from memos written by ambassadors Charles Murray and Justin Sheil in January 1856 and March 1857, respectively. See Ann K. S. Lambton, “The Case of Hājjī ‘Abd al-Karīm. A Study on the Role of the Merchant in Mid-Nineteenth-Century Persia,” in Iran and Islam, ed. C. E. Bosworth (Edinburgh: Edinburgh University Press, 1971), 346. 48 Blau, Commercielle Zustände Persiens, 56. 49 On the development of British trade and investments in southern Persia, see Shahbaz Shahnavaz, Britain and the Opening up of South-West Persia, 1880–1914 (London: RoutledgeCurzon, 2005), 75, 85–93, 96–116, 135–37, 163–68. 50 Prideaux to Thornton, Bushire, 22 June 1876, inclosure no. 4 in Hamilton to Tenterden, India Office, 11 April 1877, FO 881/3538, NAUK. Pelly’s proposal was supported by the government of India in early 1873. See Haworth to Clive, Bushire, 6 August 1927, E 4106/526/34, FO 416/81, NAUK. 51 Edwards to Ross, Bushire, 24 February 1873, FO 248/290, NAUK; Ross to Thornton, Bushire, 11 April 1876, inclosure no. 2, and Prideaux to Thornton, Bushire, 22 June 1876, inclosure no. 4, in Hamilton to Tenterden, India Office, 11 April 1877, FO 881/3538, NAUK.

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At the larger ports of the Persian Gulf the administrative system [i.e., the kārguzār’s court] does not provide adequately for efficient, speedy, and authoritative hearing and decision of suits brought by British or other foreign subjects. Recourse is invariably had to a council of merchants [majlis-i tujjār],52 but this arrangement is on no formal basis, and responsibility is not sufficiently determined. The establishment of mixed commercial courts has been suggested, and would probably best meet [the] requirement.53 The question of mixed courts in Iran was considered by both the Foreign Office and the India Office during the 1870s. It was discussed in connection with the judicial authority (The Foreign Jurisdiction Act) of British consuls in Iran, particularly in the Persian Gulf region.54 It was clear, however, that a move to initiate the establishment of mixed courts would require a new commercial treaty between Britain and Iran.55 Lord Salisbury, the secretary of state for India (1874–78), whose opinions regarding Britain’s policy in Iran had great influence in the government, discouraged such an initiative in 1877. A dispatch from the India Office explains his views on this matter: . . . without denying that advantage might be expected to result from the establishment in Persia as in Turkey of consular and mixed tribunals to which every class of case might be referred . . . [Salisbury] is not satisfied that the necessity for such tribunals is so urgent as to justify the commencement of a negotiation with the Persian Government which would certainly be lengthy, could not fail to raise difficult and delicate questions affecting not only our relations but other questions with Persia which might be made a pretext for troublesome counter-claims and pretensions on her part and might after all prove abortive.56 Salisbury had substantial knowledge about Iran in 1877, and it is reasonable to assume that he knew about the crisis that the Reuter concession had caused in 52 The majlis (or ijlās) was an informal institution convened and headed by the malik al-tujjār in the main urban centers with the aim of settling disputes among the tujjār and between them and other members of the commercial and financial community (dallālān, bunakdārān, ṣarrāfān) as well as between merchants and their clients and suppliers. In consultation with the disputing sides, the malik invited prominent merchants to join the majlis and work out an acceptable compromise. The majlis had no formal authority and derived its standing from the preference of the tujjār for a process of arbitration rather than a court decision. See Greenfield, Das Handelsrecht, 27; Gad G. Gilbar, “Malik al-Tudjdjār,” EI, 2nd ed., 6: 276–77. 53 Ross, “Commerce of the Persian Gulf,” PP, A&P 73 (1880): 249. 54 Haworth to Clive, Bushire, 6 August 1927, E 4106/526/34, FO 416/81, NAUK. 55 The Government of India to Salisbury, Fort William, 15 December 1876, inclosure no. 1 in Hamilton to Tenterden, India Office, 11 April 1877, FO 881/3538, NAUK. 56 George Hamilton to the FO, 4 April 1877, in Haworth to Clive, Bushire, 6 August 1927, E 4106/526/34, FO 416/81, NAUK.

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Tehran and about the great influence that several leading ʿulamāʾ, particularly Mulla ʿAli Kani, had on the people in the capital. Moreover, it seems that by 1877 Salisbury intended to include Iran in his plans for the defense of India, and he did not wish to create new areas of tension. Salisbury could assume that Nasir al-Din, as well as the leading ʿulamāʾ, would vehemently oppose the introduction of mixed courts in Iran, since neither party would see any reason why Iran should surrender a significant component of its sovereignty. He also took into account the many other issues under negotiation between London and Tehran, including the opening of the Karun River to international (i.e., British) navigation.57 These negotiations were strained in the mid-1870s, as Nasir al-Din resented Britain’s pressure to strengthen its presence and influence in southern Iran. In Salisbury’s view, imperial strategic considerations outweighed arguments in favor of British commercial and economic interests in Iran. Ultimately, the Foreign Office adopted his approach regarding the question of mixed courts,58 and despite continued reports from representatives in Iran emphasizing the damage sustained by British firms at the hands of the existing judicial institutions, the upper echelons of the Foreign Office, the India Office, and the government of India never proposed reconsidering the issue. In the late 1870s, British diplomats in Iran, unaware of the decision made at Whitehall, continued in vain to stress the need for a suitable framework for hearings involving British and Persian subjects.59 The reform of the Iranian customs administration in the late 1890s and the transfer of the collection of customs dues in Persian Gulf ports to Belgian officials in 1900 raised the expectations of British representatives in Iran for a fundamental change in the adjudication of mixed cases. Charles A. Kemball, consul general in Bushihr, wrote in his commercial report for 1900: Now that the customs administration has been organized on a proper basis . . . the Persian Government would be well advised if it went a step further, and established a regular [mixed] court for the administration of justice. The absence of such a court is keenly felt by the British mercantile community when they have any claims to recover from Persian subjects. If prompt justice could be obtained, one of the difficulties which British merchants encounter in their dealings with Persians would be overcome . . .60 57 Kazemzadeh, Russia and Britain, 154–55. 58 Terrington to India Office, 11 July 1877, quoted in Haworth to Clive, Bushire, 6 August 1927, E 4106/526/34, FO 416/81, NAUK. 59 Edward Charles Ross, “Report on the Trade and Commerce of the Persian Gulf for the Year 1879,” PP, A&P 75 (1880): 1733; and Ross, “Southern Persia,” DCR 760 (1890), 5. 60 Kemball, DCR 2631 (1900), 7. A year later Kemball was less optimistic regarding the likelihood of change in the administration of justice in mixed cases. He quoted a leading (British?) merchant with extensive experience in Iran who “advises British merchants to exercise more caution in their

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Indeed, a Belgian official (the legal advisor of the new customs administration) prepared a scheme in 1904 “ . . . for a regular gradation of original and Appellate Tribunals, which were to decide mixed suits by the application of a fairly simple commercial code, based on that now existing in Turkey.”61 Obviously, the shah did not approve the proposed reform nor did he have to invest great efforts in rejecting it. According to the British ambassador in Tehran, two powerful players, the ʿulamāʾ and the Russians, opposed the legal advisor’s proposal. The ʿulamāʾ objected to any change that would weaken the standing of the shariʿa courts, and the Russians negated any amendments in the Treaty of Turkmanchai.62 Nevertheless, this abortive attempt to reform the adjudication of mixed cases did not prevent British consuls from continuing to advocate the establishment of mixed courts.63 The Constitutional Revolution of 1906 did not alter the judicial position of foreigners in Iran, and during the years preceding World War I the British business and diplomatic communities in Iran accepted the fact that a new judicial institution more amenable to them would not be established. They thus concentrated their efforts on persuading the Iranian authorities to implement a number of reforms in the functioning of the kārguzār.64 Reform was indeed initiated but in a direction different from that expected by British diplomats and merchants. The Iranian Majlis decided in 1910 to transfer some of the kārguzār’s judicial roles to the new ʿadliya courts under the Ministry of Justice.65 This measure was part of the central government’s efforts to gain greater control of the entire judicial system, and it obviously weakened the position of the kārguzār.66 Various attempts by Tehran to abolish the institution of the kārguzār in the closing years of the Qajar era failed, and only in 1927 did the Pahlavi authorities announce that all the kārguzār’s judicial functions would be transferred to the ʿadliya courts. Several British consuls observed that foreign merchants would not lose much by this move.67 The institution of the kārguzār was in fact annulled in 1928, the year the Capitulation treaties were finally abrogated.68

61 62 63

64 65 66 67 68

dealings and to avoid giving indiscriminate credit.” See “Report on the Trade and Commerce of the Persian Gulf for the Year 1901 by Lieut.-Colonel C. A. Kemball,” DCR AS 2803 (1902), 6. Arthur Hardinge to Edward Grey, separate and confidential, London, 23 December 1905, no. 9 [381], 22, FO 416/26, NAUK. Ibid. See, for example, R. L. Kennion, “Report on the Trade of Khorassan for the Year 1905–06 . . . ,” DCR AS 3724 (1906), 8. For a similar approach of a Russian observer, see G. I. Ter-Gukasov, Politicheskie i ekonomicheskie interesy Rossii v Persii (St. Petersburg: Ministerstvo Finansov, 1916), 95. Chick, DCR 5093 (1913), 24. Chick to Clive, Shiraz, 5 May 1927, inclosure 5 in R. Clive to Austen Chamberlain, Tehran, 20 May 1927, no. 167, E 2523/526/34, FO 416/80, NAUK. Ibid. Ibid.; Haworth to Clive, Bushire, 6 August 1927, E 4106/526/34, FO 416/81. Iran unilaterally abolished the Capitulations by notifying the foreign powers in May 1927 that all exterritorial agreements were to terminate after a period of one year. Abdollah Moazzami, Essai sur la condition des étrangers en Iran (Paris: Librairie du Recueil Sirey, 1937), 72–75.

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The Kārguzār and Russian Economic Activity The experience of Russian merchants, bankers, and diplomats with kārguzār offices was apparently less frustrating and disappointing than that of their British counterparts. The commercial reports written by Russian consuls and other consular officials in Iran scarcely mention matters related to kārguzārān. The correspondence of both Russian and British consuls reveals that Russian merchants did not intensively require the services of the kārguzārān, because the management of their business with Iranian merchants was quite different from that of their British colleagues: Russian merchants were not inclined to grant long- or medium-term credit to their customers and generally required payment in cash on delivery. In 1896, Ney Elias, the British consul in Mashhad, who closely followed the operation of Russian trading houses in Khurasan, wrote: “while the system of long credit is the invariable custom in the Meshhed bazaars among Persians in dealings with each other . . . the Russians will have nothing to do with it and sell for ready money only, except in rare cases, when they give credit for two to five months.”69 Another way Russian merchants reduced their risk in providing credit was to make barter deals with the Iranian merchants. This was the advice of the head of the Russian consulate in Bushihr, G. Ovseenko, in a 1903 report on the import of sugar.70 Employing these methods probably limited the number of Iranian merchants who defaulted on their financial commitments to Russian merchants. Moreover, it seems that Russian bureaucrats succeeded in enlisting the goodwill of several kārguzārān to promote Russian financial and commercial interests in Iran. This point is illustrated by the following two cases detailed in the files of the Russian Discount and Loan Bank of Persia (Uchetno-ssudnyi bank Persii).71 The first concerns a loan of 100,000 rubles (about 55,000 tūmāns or 10,000 pounds sterling [796,000 pounds sterling in 2009 retail prices]) given in 1903 to Hajji ʿAbd al-Husayn Tabrizi Zawwar, a prominent tājir in Mashhad,72 by the bank’s branch in that city. Zawwar did not repay the loan by the agreed date, and by 1907 the sum of the principal and interest he owed the bank had risen to 56,792 tūmāns and 17,300 rubles (9,515 tūmāns). The bank, seeking to realize the sureties he had deposited with it – primarily his mansion – involved the kārguzār of Mashhad in this complex case. Zawwar, who had been sentenced to imprisonment, presumably by the kārguzār, agreed to transfer the ownership of his mansion to the bank. The bank, however, was concerned that by the time 69 N. Elias, “Report on the Trade and Commerce of Khorasan for the Financial Year 1895–96,” DCR AS 1800 (1896), 8. 70 G. Ovseenko, “Vvoz sahara v porty Persidskogo zaliva,” SKD, 1903, 1: 32–33. 71 On the Discount and Loan Bank of Persia, see Sobotsinskii, Persiia, 167–80; and Marvin L. Entner, Russo – Persian Commercial Relations, 1828–1914 (Gainesville, Fla.: University of Florida Press, 1965), 39–45. 72 See Government of India, General Staff Headquarters, “Meshed” in Gazetteer of Persia (Simla: Government Monotype Press, 1910), 1: 539.

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the transfer went through, Zawwar would succeed in mortgaging the property to a third party. At this point, the kārguzār came into the picture. He suggested that Zawwar undertake not to make any changes in the status of the property without the approval of the bank and the kārguzār himself. Both parties consented to the proposal, whose significance was that the kārguzār had assured the Russian bank that its right to the ownership of the property would be honored and that he would not enable Zawwar to violate his commitments.73 The second case concerned Hajji Muhammad Riza Raʾis al-Tujjar, one of the wealthiest merchants in Mashhad and a large landed proprietor.74 In 1905 the Mashhad branch of the Russian Discount and Loan Bank of Persia granted him a loan of 179,080 tūmāns (about 32,560 pounds sterling [about 2,590,000 pounds sterling in 2009 retail prices]). As in the previous case, Raʾis al-Tujjar failed to repay the loan, and in January 1913, when the debt (principal and interest) reached 260,113 tūmāns (about 47,293 pounds sterling), the bank pressed for an arrangement outside the kārguzār’s court for repayment of the loan. Raʾis al-Tujjar was prepared for the bank to realize part of the assets he had given as surety when he took the loan, but, as in the case of Zawwar some years earlier, the bank feared that the borrower would dupe it and that no sooner would the bank accept the proposed arrangement of the debt then the assets transferred to it would be remortgaged by Raʾis al-Tujjar for a loan from another source. In this case, too, the kārguzār of Mashhad proposed that the lender undertake not to make any changes in the status of the assets without the kārguzār’s and the bank’s approval. The bank viewed this proposal as an acceptable solution and agreed to the repayment arrangement undertaken by Raʾis al-Tujjar.75 So pleased was the manager of the Mashhad branch of the bank with the assistance of the kārguzār that in June 1914 he wrote the bank’s board in St. Petersburg requesting it to approve a special personal grant of 750 tūmāns to the kārguzār for his vital assistance in reaching

73 The head of the Mashhad branch to the board of the Discount and Loan Bank of Persia, Mashhad, 4 August 1909, 600/9/1060, RGIA; “Report,” The head of the Mashhad branch, Mashhad, 9 August 1909, 600/9/1060, RGIA; “Report,” The head of the Mashhad branch, Mashhad, no date, 600/9/1060, RGIA; The head of the Mashhad branch to the board, Mashhad, 17 December 1911, 600/9/1060, RGIA; The head of the Mashhad branch to the board, Mashhad, 22 March 1914, 600/9/1060, RGIA; and “The New Agreement between Zawwar and the Bank,” Persian text and Russian translation, Mashad, 4 February 1914, 600/9/1060, RGIA. 74 Muhammad Riza was a cousin of Hajji Muhammad Hasan Amin al-Darb. See “Rais-ut-Tujjar II, Muhammad Raza Khan of Meshed,” in George P. Churchill, Biographical Notices of Persian Statesmen and Notables, September 1909 (Calcutta: Government Printing, 1910), 88; and Government of India, “Meshed,” Gazetteer of Persia, 1: 539. 75 The head of Mashhad branch to the board, Mashhad, 27 January 1914, 600/10/281, RGIA; The first mīrzā of the consulate to the director of the bank in Tehran, telegram, Mashhad, 3 March 1914, 600/10/281, RGIA; The consul general in Mashhad to the Ministry of Foreign Affairs, telegram, Mashhad, 12 March 1914, 600/10/281, RGIA; The head of the Mashhad branch to the board, Mashhad, 14 April 1914, 600/10/281, RGIA; Mashhad branch to the board, Mashhad, 29 April 1914, 600/10/281, RGIA; and the kārguzār of Mashhad to the head of the Mashhad branch, translation, Mashhad, 24 May 1914, 600/10/281, RGIA.

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the repayment arrangement for Raʾis al-Tujjar; the request noted that the Russian consulate would require the kārguzār’s good offices in the future. The board, with the approval of the Russian minister of finance (the bank was state owned), made the grant.76 In 1915 the same kārguzār was asked by the Russian consul in Mashhad and the manager of the branch there to be involved in new arrangements for the repayment of Raʾis al-Tujjar’s debts to the bank.77 Close relations between kārguzārān and Russian consuls developed in other towns in the northern provinces as well. When the kārguzār of Astrabad was arrested by the nationalists in 1909, the Russian consul in the city made efforts to obtain his release.78 In sum, it seems that during the first two decades of the 20th century Russian diplomats and officials found ways to enlist the support and cooperation of kārguzārān serving in the northern provinces. This, however, should not be taken as a rule, since they also complained about instances of improper and unjust treatment of Russian merchants in the kārguzār’s court.79

Why Were Mixed Courts Not Established in Iran? Three factors explain why Iran’s history differed from that of the Ottoman Empire and Egypt as far as the establishment of mixed courts was concerned. The first is connected with the scope of the economic activity of nationals of the Capitulatory states in these three diverse regions during the long 19th century. Whereas the number of foreigners in Iran in the years that preceded World War I was estimated at about 1,200 souls,80 in Istanbul alone their number was estimated at 130,00081 and in Egypt approximately 221,000.82 Similarly, the number of European trading houses active in Iran at the beginning of the 20th century did not exceed a few dozen,83 while there were several hundred in both the Ottoman Empire and

76 The head of the Mashhad branch to the board, Mashhad, 19 June 1914, 600/10/281, RGIA; “Decision of the Board of the Discount and Loan Bank,” St. Petersburg, 5 July 1914, 600/10/281, RGIA. 77 The consul general in Mashhad to the Ministry of Foreign Affairs, telegram, Mashhad, 25 April 1915, 600/10/281, RGIA. 78 Edward G. Browne, The Persian Revolution of 1905–1909 (Cambridge: Cambridge University Press, 1910), 296. 79 Suprunov to the board of the Discount and Loan Bank of Persia (review of the foreign trade of Khorasan), Mashhad, undated (1911 or 1912), 600/10/215, RGIA. 80 Gad G. Gilbar, “Demographic Developments in Late Qājār Persia, 1870–1906,” Asian and African Studies 11 (1976/77): 154. The figure for Iran is a crude estimate for 1904. 81 Zafer Toprak, “Nüfus, Fetih’ten 1950’ye,” Dünden Bugüne İstanbul Ansiklopedisi (Istanbul: Kültür Bakanlığı ve Tarih Vakfı, 1993–95), 6: 110. 82 The figure for Egypt is based on the 1907 population census. See Charles Issawi, An Economic History of the Middle East and North Africa (New York: Columbia University Press, 1982), 80. 83 See Wilhelm Litten’s lists in The Economic History of Iran, 1800–1914, ed. Charles Issawi (Chicago: University of Chicago Press, 1971), 356–61; Ahmad Ashraf, Mawaniʿ-i Tarikhi-yi Rushd-i Sarmaya-dari dar Iran: Dawra-yi Qajariyya (Tehran: Intisharat-i Zamina, 1359/1980), 50–57.

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Egypt.84 The scope of foreign investment capital in Iran totaled a few million pounds,85 while in both the Ottoman Empire and Egypt it amounted to hundreds of millions.86 The influence of foreign entrepreneurs on the economic development of Iran during the long 19th century was quite limited, whereas they had great influence in the Ottoman Empire and immense influence in Egypt, particularly during the last decades of the period under discussion. The causes of these significant differences between Iran and the Ottoman Empire and Egypt are to be found in the highly varied entrepreneurial environment in the three economies and the dissimilar business potential for European capital in each of them. Egypt, with its vast growth in the cultivation and export of cotton among other economic processes in the second half of the 19th century, was extremely attractive to European – especially British and French – investors. Similarly, albeit to a lesser degree, regions adjacent to the Mediterranean and other areas within the Ottoman Empire attracted European investors and trading houses because of the high returns on investment yielded by commercial agriculture, banking, and transport. Iran’s business potential, in foreign eyes, was also considerable, but for reasons to be discussed, foreign investments did not match those of the Ottoman Empire or Egypt. The commercial activity of nationals of the Capitulatory states was accompanied by intensive involvement of those states in creating favorable conditions for their enterprises. The instructions of foreign ministries in London, Paris, Vienna, St. Petersburg, Berlin, and Rome to their representatives in the region in the late 19th and early 20th centuries operated on a similar principle: firms and individuals should be backed and assisted in their business ventures. Ambassadors and consuls invested a considerable amount of time in doing just that. A vicious cycle developed, in which increasing business activity by the subjects of the European states led to greater involvement by European governments in protecting the interests of these merchants and investors, which encouraged additional entrepreneurs and investors to embark on economic activity there. Embassy and consulate archives, especially those of Britain, France, and Russia, contain a large number of documents relating to requests by merchant houses and investment firms to their countries’ representatives for assistance and support in competition with other European firms and in their negotiations with the local authorities. The latter type of requests concern the cancellation of levies, compensation for stolen property, collecting debts from customers, winning concessions for exploiting natural 84 For details of foreign firms and businesses in the Ottoman Empire’s major urban centers, see Annuaire oriental du commerce, de l’industrie, de l’administration et de la magistrature, 14e année (1896) (Constantinople: Cervati Frères, 1896), 661–65, 713–15 et passim. For Cairo and Alexandria, see Arnold Wright and H. A. Cartwright, Twentieth Century Impressions of Egypt (London: Lloyd’s Greater Britain Publishing Company, 1909), 164–74, 289–92 et passim; and Mercure égyptien: Moniteur, commercial et industriel (Cairo: F. Diemer, 1914), 865–84. 85 Esfandiar Bahram Yaganegi, Recent Financial and Monetary History of Persia (New York: n.p., 1938), 18–28; and Issawi, The Economic History of Iran, 16. 86 Issawi, An Economic History of the Middle East, 68–71.

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resources, cultivating agricultural products, manufacturing industrial goods, and providing services (mainly transportation and banking). Ambassadors and consuls were barely able to cope with mounting pressure by the foreign business communities active in Egypt, the Ottoman Empire, and Iran, but their governments instructed them to do their utmost to assist their fellow countrymen. This situation prompted the consuls and dragomans in the Ottoman Empire and Egypt to exceed the authority granted them by the Capitulation agreements. In Iran, too, the diplomatic corps of the European powers were instructed to assist and protect entrepreneurs and investors from their countries, but the scope of these commercial activities was considerably smaller. Hence, the judicial deviations witnessed in the empire and Egypt were unknown in Iran, and the constraints that led the rulers in Istanbul and Cairo to establish mixed courts were nonexistent in Tehran. The second factor accounting for the absence of mixed courts in Iran relates to the stance of the rulers in Egypt, the Ottoman Empire, and Iran regarding the economic and commercial activity of foreign nationals and particularly the application of extraterritorial legal rights. The Egyptian khedive Ismaʿil Pasha viewed the economic activity of European firms in Egypt favorably, and investments by British, French, Belgian, Italian, and other European nationals were welcomed. In his view, these investments advanced Egypt and its elite economically.87 Hence, he acceded to the establishment of a judicial framework that would create better conditions for the flow of foreign investment into the country. The relinquishing of an important element of the country’s judicial sovereignty was perceived as an unavoidable price to pay for Egypt’s economic progress. There were probably also more immediate reasons to acquiesce, resulting from specific developments in Egypt in the 1860s and 1870s, such as Ismaʿil’s wish to prevent legal claims against him in the consular courts or Nubar Pasha’s aspiration to curb the khedive’s private business transactions. During the Tanzimat period, the position of the upper echelon of the Ottoman bureaucracy toward European economic penetration was more moderate and nuanced than that of the Egyptian khedives, but on the whole the Ottoman leaders were in favor of this development.88 Moreover, the establishment of mixed courts was probably considered by Istanbul to be one of the political and economic prices the empire had to pay for British and French diplomatic support. The attitude of the Qajar rulers, especially Nasir al-Din Shah, to the economic activity of European merchants and investors differed significantly from that of their counterparts in Egypt and the Ottoman Empire. While sometimes inconsistent in this policy, the attitude of the Qajars toward foreign economic penetration was characterized by suspicion and grave concern lest this activity lead to increased political involvement of the European powers and serious damage to Iranian sovereignty far beyond that which the country had already endured.89 Not 87 Hunter, Egypt, 38–40. 88 Carter Vaughn Findley, “The Tanzimat,” in The Cambridge History of Turkey, vol. IV. Turkey in the Modern World, ed. Reşat Kasaba (Cambridge: Cambridge University Press, 2008), 36–37. 89 See Nasir al-Din’s letter to his minister of foreign affairs, summarized and partly quoted in Thomson to Salisbury, Tehran, 26 January 1879, no. 38, FO 539/13, NAUK.

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only were they averse to encouraging foreign economic activity, but also they tried to curb it and slow its pace. Hence, mixed courts were not an institution the Qajars were ready to consider. The third factor is connected to the stance of the religious leadership in Iran regarding foreign economic penetration. In this, too, Qajar Iran differed from the Ottoman Empire and Egypt. To a far greater degree than the senior ʿulamāʾ in the other two countries, the ʿulamāʾ in Iran were vehemently opposed to European economic penetration, maintaining that it posed a serious threat to the Islamic character of Iranian society. More than once they mounted campaigns, or supported struggles by the tujjār, ṣarrāfān, and bāzāriyān, against concessions granted by the government to foreign entrepreneurs (well-known cases are the Reuter concession, the tobacco concession, and the Imperial Bank concession to issue bank notes)90 and against the import of European manufactured products, especially textiles.91 Apart from their general opposition to foreign involvement in Iranian life, the ʿulamāʾ opposed the formation of any new judicial framework that would weaken their dominant status in the Iranian legal system. A relevant example is Nasir al-Din’s attempt in 1884 to grant judicial powers in the sphere of commerce to the tujjār councils of representatives (majālis-i wukalā-yi tujjār), which prompted fierce opposition by the leading mujtahid of Tabriz and his ṭullāb, resulting in the dissolution of the councils.92 It is conceivable that one of the reasons British representatives in Iran did not doggedly press for the establishment of mixed courts was that they had foreseen the fierce and hostile response of the ʿulamāʾ and their followers.

Conclusion Frustration and disappointment with the functioning of the kārguzār were shared by most British firms operating in Iran in the late Qajar period. Many of these firms incurred heavy losses due to unpaid debts and/or goods that were not supplied. No

90 Taymuri, ʿAsr-i Bikhabari, 124–26; idem,Qarardad-i Rizhi, Tahrim-i Tanbaku, Awwalin Muqawamat-i Manfi dar Iran (Tehran: Shirkat-i Sahami-yi Kitabha-yi Jibi, 1983); Ann K. S. Lambton, “The Tobacco Régie: Prelude to Revolution,” Studia Islamica 22 (1965): 119–57; 23 (1966): 71–90; Nikki R. Keddie, Religion and Rebellion in Iran: The Tobacco Protest of 1891–1892 (London: Frank Cass, 1966); and V. A. Kosogovskii, Iz tegeranskogo dnevnika polkovnika V.A. Kosogovskogo, ed. G. M. Petrov (Moscow: Akademiia Nauk SSSR, 1960), 139–42. 91 The ʿulamāʾ of Isfahan played a central role in the campaign to refrain from buying foreign (mainly British) textiles and in the establishment of the Iranian joint stock textile company Shirkat-i Islamiyi in 1899. See Jamalzada, Ganj-i Shaygan, 98; Ann K. S. Lambton, “Secret Societies and the Persian Revolution of 1905–6,” St. Antony’s Papers: Middle Eastern Affairs 1 (1957): 51; Anja Pistor Hatam, “Islamic Trading Companies as a Prerequisite for Progress: The Case of the šerkat-e eslamiyeh of Isfahan,” in Matériaux pour l’histoire économique du monde Iranien, ed. Rika Gyselen and Maria Szuppe (Paris: Association pour l’avancement des études Iraniennes, 1999), 322–23; and Walcher, In the Shadow of the King, 200–202. 92 On the fierce opposition of Hajj Mirza Jawad Aqa Mujtahid, see Adamiyat and Natiq, Afkar-i Ijtimaʿi, 356–61; and Gilbar, “Rise and Fall,” 661–65.

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wonder, then, that some firms were unable to sustain their operations in Iran.93 A considerable number of British merchants and their consuls held that this situation was the outcome of the absence of an effective judicial system for dealing with mixed cases. The limited economic influence of European firms in Iran during the Qajar period, in contrast to the situation in the Ottoman Empire and Egypt, had a number of significant causes.94 One was the absence of a supportive judicial system in the form of mixed courts. On a more basic level, the negative position of the central government and of the ʿulamāʾ regarding foreign economic and commercial activity, which underlay the failure to establish a mixed-judicial framework, played a major role in curbing foreign economic activity in Iran. European merchants and investors found it difficult to prosper in an environment where the rules of the game differed vastly from the modus operandi to which they were accustomed. The absence of a judicial system that would satisfy foreign merchants was a situation the central government was unwilling to change. The institution of the kārguzār, with its slow and cumbersome procedures, its interminable efforts to reach a compromise between the parties, and its tendency to favor local litigants, was illustrative of the authorities’ attitude toward dealing with mixed cases. Ultimately, the office of the kārguzār, which was ostensibly intended to assist foreigners in their economic ventures in Iran, in fact curbed and restrained foreign merchants and entrepreneurs. The British consuls viewed the kārguzār and his majlis as another manifestation of the weakness, laxity, and corruption of the Qajar bureaucracy. It did not occur to them that the functioning of the kārguzār was largely the result of a conception, an approach, and perhaps even a policy projected by the central government to its agents in the provinces. The performance of the kārguzār suited the interests of the Iranian tujjār,95 who more often than not were the defendants. Morteza Nouraei and Vanessa Martin have pointed out that the tujjār exploited their power and status in Iranian society to create a supportive attitude toward their suits in the kārguzār’s majlis 93 “Report by Consul-General [Henry M.] Jones on the Trade of the Province of Azerbijan for the Year 1870,” PP, A&P 66 (1871): 961; “Report by Consul-General [Henry M.] Jones on the State of Trade in the Province of Azerbijan during the Year 1872,” PP, A&P 65 (1873): 969; and “Report on the Trade and Commerce of Bunder Abbas and Lingah for the Year 1907–08 by Lieutenant C. H. Gabriel . . . ,” DCR AS 4076 (1908), 7. 94 For a discussion of the difficulties British firms faced in Qajar Iran, see Frances Bostock and Geoffrey Jones, “British Business in Iran, 1860s–1970s,” in British Business in Asia since 1860, ed. R. P. T. Davenport-Hines and Geoffrey Jones (Cambridge: Cambridge University Press, 1989), 40–45. The authors did not, however, touch upon the judicial factor in their study. 95 On the attitude of the Iranian tujjār toward foreign firms and banks and their relations with foreign merchants and investors, see Ashraf, Mawaniʿ-i Taʾrikh, 50, 55; Huma Natiq, Bazarganan dar Dad wa-Sitad ba Bank-i Shahi wa-Rizhi Tanbaku (Paris: Intisharat-i Khawaran, 1992), 163–75; Mansura Ittihadiyya (Nizam Mafi), Inja Tihran ʾAst . . . Majmuaʿ-i Maqalat darbarah-i Tihran 1269–1344 H.Q. (Tehran: Nashr-i Taʾrikh-i Iran, 1998), 337–52; and Shireen Mahdavi, For God, Mammon, and Country: A Nineteenth Century Persian Merchant, Haj Muhammad Hassan Amin al-Zarb (1834–1898) (Boulder, Colo.: Westview Press, 1999), 39–42.

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in the face of claims by foreign firms.96 This is an insightful observation. To this I would add that in their disputes with foreign merchants in the judicial space the tujjār received important direct or indirect support from both the central government and the ʿulamāʾ. This cooperation between the three elite groups – highranking government bureaucrats, senior ʿulamāʾ, and prominent tujjār – though rare, was not surprising. They shared a common purpose: to halt foreign economic penetration. It was a struggle carried on in a well-defined space, and it proved to be quite effective. From a business standpoint, the Iranian tujjār reaped handsome benefits from the extant system of dealing with mixed cases. Weakening the foreign firms’ competitiveness obviously reinforced the tujjār’s commercial standing, maneuverability, and bargaining position. Foreign merchants and investors, aware that they would not gain effective assistance from the Qajar judicial system, were perhaps open to reaching compromises favorable to the local tujjār outside the kārguzār’s court. Furthermore, in view of their disappointment with what they regarded as the ineffectiveness of the kārguzār’s court, foreign firms sometimes preferred to bring their disputes with local merchants to the majālis-i al-tujjār.97 Most significantly, in the hearings at the kārguzār’s majlis, tujjār who were in dispute with a European merchant or entrepreneur did not feel that they were in an inferior position or would be discriminated against. On the contrary, they held an effective advantage over foreign merchants and investors. It would not be too far reaching to conclude that the absence of mixed courts was a contributing factor to the prosperity of local Muslim entrepreneurs in late Qajar Iran.

96 Nouraei and Martin, “Karguzar. III: Disputes,” 162–63. 97 See, for example, Qawwam al-Dawla to Wolff, [Tehran], 11 Jumada ʾl-ukhra 1306/12 February 1889, FO 248/488, NAUK.

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10 T H E M Y S T E R I O U S D E AT H OF A COMMERCIAL AGENT AND THE KĀRGUZĀR OF MASHHAD, 1890

I In the late evening of the 21st of April 1890 or the early hours of the 22nd, Gregory Karikoor, known as “Suleiman”, was found dead in his home in the Bala Khiyaban quarter of Mashhad.1 Suleiman,2 an Iranian subject of Armenian extraction, was an experienced commercial agent employed by Messrs. Ziegler & Co. in Mashhad for some two decades, from the early 1870s until the time of his death. Among his various responsibilities – perhaps the main one – was purchasing high quality raw wool for Ziegler & Co.3 The records relating to Suleiman’s death4 are of singular historiographic value, since they include the verbatim proceedings of the kārguzār’s court (majlis) of Mashhad. Rarely are the details of the mode in which the kārguzār functioned revealed to the historian. The context in which the kārguzār’s court met, the nature of its inquiry, and the consequence of the process as revealed by the proceedings are the focus of this article. The lessons that can be derived from the role played by the kārguzār in the attempt to discover what had happened on the night of the 21st of April are relevant to the broader issue of the attitude of the Qajars to foreign economic penetration into Iran. The kārguzār (agent), an official of 1 “Dr. Woolbert’s [Medical] Report” (copy), 23 April 1890, inclosure no. 2 in “Documents showing the result of the official inquiry into the death of Suliman, late Meshed Agent of Messrs. Ziegler & Co. Tehran”, in C. MacLean to H. Drummond Wolff, Mashhad, 19 July 1890, FO 248/504, NAUK (hereafter: “Official Inquiry”). 2 I have used the spelling “Suleiman”, which is used in most of the documents, rather than the formal transliteration Sulayman. 3 Suleiman was involved in commercial affairs in Khorasan and was well informed about major business transactions. George Curzon who visited Persia and arrived at Mashhad in late 1889 or early 1890, writes: “While I was in Meshed, I took such steps as were open to me, by consulting the best authorities, including Messrs. Ziegler’s agent . . . to ascertain the true state of affairs . . .”. Persia and the Persian Question, London, 1892: 208 (hereafter: Curzon). 4 For the documents relating to the Suleiman (Karikoor) case, see inclosures nos. 1–38 (copies) in “Official Inquiry”.

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DOI: 10.4324/9781003177425-13

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the ministry of foreign affairs, played a significant role in the complex relations between the Qajar government and the foreign communities in Iran.5 The first kārguzārīs (kārguzār offices) were established in the 1830s and 1840s, growing rapidly in the last two decades of the century. By the beginning of the 20th century there were thirty-six kārguzār offices in urban centres and ports throughout the country.6 Clearly, the network of kārguzārīs was an effective means of controlling the activities of foreigners and a tool to enhance government policies with regard to European economic penetration into the country. Among the varied functions of the kārguzār, the settlement of commercial disputes between foreign firms or individuals and local subjects was of key importance. In this context he was given the authority to summon foreigners and Iranians to his court, to interrogate the parties, and to mediate between them or adjudicate the case. Foreign firms, mainly British, who were dependent on the services of the kārguzār, were dissatisfied with the way he and his majlis functioned. They complained that the conduct of the kārguzārs was responsible for the heavy losses they had incurred in their operations in Iran.7 In fact, the consequences of the kārguzārs’ conduct conformed with the policy of Nasir al-Din Shah (r. 1848–96) until the late 1880s regarding European economic activity, namely the shah’s unfavourable attitude towards the opening of the Iranian economy to European entrepreneurs.8 The Suleiman case should be viewed in the context of the growing tension that surrounded the activities of foreign firms in the late 1880s and early 1890s.

II At the time of Suleiman’s death, Ziegler & Co. was one of the most enterprising foreign trading houses in Iran and the only European firm to have a commercial agent in Mashhad. The firm was established in Switzerland, the home country of its founders, and was registered in Manchester, England, in 1855. As a British firm, Ziegler & Co. was entitled to British protection in Iran. In its early days the firm’s activities were concentrated in the Ottoman Empire, primarily in the Black 5 The institution of the kārguzār has been studied recently in great detail. For the history of the institution, its functions and its social and economic roles in Qajar Iran, see particularly Vanessa Martin and Nouraei Morteza, “The Role of the Karguzar in the Foreign Relations of State and Society of Iran from the mid-Nineteenth Century to 1921. Part I: Diplomatic Relations”, Journal of the Royal Asiatic Society 15, 2005: 261–277; Nouraei Morteza and Vanessa Martin, “Part II: The Karguzar and Security, the Trade Routes of Iran and Foreign Subjects, 1900–1921”, Journal of the Royal Asiatic Society 16, 2006: 29–41; idem & idem, “Part III: The Karguzar and Disputes over Foreign Trade”, Journal of the Royal Asiatic Society 16, 2006: 151–163; Morteza Nouraei, “Kārgozār”, EIr, 15: 558–560 (hereafter: Nouraei, “Kārgozār”); Gad G. Gilbar, “Resistance to Economic Penetration: The Karguzar and Foreign Firms in Qajar Iran”, International Journal of Middle East Studies, 43, 2011: 5–23. Chapter 9 in this volume. See also W. M. Floor, “Bankruptcy in Qajar Iran”, Zeitschrift der Deutschen Morgenländischen Gesellschaft 127, 1977: 71–76. 6 Nouraei, “Kārgozār,” EIr, 15: 559. 7 Ibid.: 10. 8 Ibid.: 9–10.

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Sea ports, and in Tunis. In the late 1860s Ziegler acquired another Swiss firm, Dinner, Hanhart & Co., which was in financial difficulty but had active branches in Tabriz and Rasht. This acquisition marked the start of the firm’s intensive commercial and entrepreneurial activity in Iran, which continued until the 1930s. Over the years, the firm opened additional agencies in Tehran, Isfahan, Shiraz, Bushihr, Yazd, Kirmanshah, Mashhad, and Sultanabad. It imported British textiles to Iran, while exporting Iranian raw materials, mainly silk, cotton, wool and opium.9 However, Ziegler’s importance in the context of the economic history of Iran was connected first and foremost with its initiative in the carpet weaving industry. In the early 1870s, the firm identified a growing demand in Britain and the United States for handwoven Persian carpets and rugs. It began purchasing these items in 1874, mainly in the Sultanabad region, and exporting them to Europe. Shortly afterward, and in light of the lively demand for Persian carpets in Europe, on the one hand, and the limited supply of locally woven carpets in Iran on the other, the firm’s directors decided that Ziegler & Co. would no longer limit its activity to traditional cottage carpet production, but would also weave carpets in a factory, which it would establish. In 1876, with government approval, the firm purchased a large tract of land in a Sultanabad suburb, built workshops (weaving rooms), offices and warehouses, and within three or four years from the start of construction began weaving carpets at its own site.10 At the same time the firm operated some 2,500 looms in the villages around Sultanabad.11 By the beginning of the 20th century, Ziegler & Co. was exporting carpets from Iran worth 310,000 tūmāns (about ₤59,615 [₤4.8 million in 2009 retail prices]) annually.12 The main raw material for the carpets woven by Ziegler & Co. and other carpet weavers was wool. From the 1860s, when Iran became an important exporter of carpets to the West, the demand for high-quality wool increased considerably. The wool supplied by the tribes of Khurasan, especially the Baluchis, was of superior quality,13 and competition between the carpet manufacturers and other local and foreign firms to obtain it mounted. In this situation, considerable importance was attached to forward buying (salaf or salam), transactions that were common in 9 For the history of Ziegler & Co. in Iran, see Annette Ittig, “Ziegler’s Sultanabad Carpet Enterprise,” Iranian Studies 25, 1992: 104–110 (hereafter: Ittig); see also F. Stolze and F.C. Andreas, Die Handelsverhältnisse Persiens mit besonderer Berücksichtigung der deutschen Interessen, Gotha: J. Perthes, 1885: 49; William G. Abbott, “Report,” Resht, 20 August 1872, PP, A&P 67 (1873): 363; Persischen Ausstellungs-Commission, Special- Catalog der Ausstellung des Persischen Reiches, Weltausstellung 1873 in Wien, Vienna 1873: 81; Curzon, 2: 573; Henry Savage Landor, Across Coveted Lands, New York: Charles Scribner’s Sons, 1903: 152–153; Leonard M. Helfgott, Ties that Bind: A Social History of the Iranian Carpet, Washington, 1994: 213–219. 10 John R. Preece, “Report for the Years 1892–93 and 1893–94 on the Trade & Commerce of the Consular District of Ispahan”, DCR, AS 1376 (1894): 57–59; Cecil A. Edwards, The Persian Carpet: A Survey of the Carpet-Weaving Industry of Persia, London, 1953: 135–136; Ittig: 110–111. 11 Edwards 1953: 136. 12 Ittig, 113. The exchange rate in 1900/1 was ₤1=c.52 qirāns. 13 Elias 1892: 7; MacLean 1904: 32.

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various production branches, particularly agriculture, since they met the needs of purchaser and supplier alike.14 In the salaf transaction the commercial agent would visit the tribesmen several months before the shearing season, which took place twice a year – in April and October – and settle on the terms of purchase, namely quantities, quality and price. Once the parties reached an agreement, the agent paid the supplier an advance whose percentage of the total transaction, while not fixed, was invariably sizeable. Payment of the advance made the agreement between the parties binding. Only rarely was the agreement drawn up in writing.15 Clearly, this system was based on a high degree of mutual trust. In order to close these forward transactions, the commercial agents had to hold large sums of cash, usually transferred to them by the trading firms, whether local or foreign, which employed them. Negotiating the terms of salaf, and, thereafter, examining the wool supplied to ascertain that it met the high standards agreed upon mandated a good knowledge of the product and close familiarity with the suppliers. Most prominent in conducting these transactions in the northern and north-eastern provinces were Armenians, either Iranian or Russian subjects, who were gifted commercial agents with proven achievements.16 A large portion of the Khurasan wool trade was in their hands, and it was only natural for Ziegler & Co. to decide in the early 1870s, when it began purchasing wool for export and later for its carpet weaving operation, to employ an experienced merchant in the wool trade as its commercial agent – Suleiman.

III Suleiman became well known in the Mashhad mercantile community as Ziegler’s agent and was also in contact with the British consulate general, founded in early 1889. Thus, on the morning of the 22nd of April 1890, a few hours after a fire in Suleiman’s home broke out, the British consulate in Mashhad was informed of his death. The vice consul, E.C.R. Thomson, and the consulate medical officer, Dr. H.R. Woolbert, left immediately for the commercial agent’s home, where they found his body. On the basis of what they saw, they wrote separate reports and submitted them to the consul general, Major General Charles MacLean. Their conclusion was that Suleiman had died in a fire that had started in his bedroom.17 The consul general visited the home of the deceased that same day and consequently 14 Ias 1905: 349–350; Čirkin 1905: 439–440; Greenfield 1909: 47–49. 15 E. F. Law, “Notes . . . on the Wool Trade in Persia and Trans-Caucasia”, PP, A&P 77 (1889): 750; Charles S. MacLean, “Report on the Trade of Khorassan and Seistan for the Year 1890–91”, FO, DCR AS 976 (1892): 6 (hereafter: MacLean “Khorassan”); idem, “Report on the Condition and Prospects of British Trade in Persia”, PP, A&P (1904) 95: 63. 16 E. F. Law, “Notes . . . on the Wool Trade in Persia and Trans-Caucasia [1888]”, FO, DCR MS 114 (1889): 1; idem, “Notes . . . on British Trade and Foreign Competition in North Persia [1888]”, FO, DCR MS 119 (1889): 2–3; idem, “Notes on the Wool Trade”, PP, A&P 77 (1889): 749; MacLean, “Khorassan”: 6. 17 “Dr. Woolbert’s [Medical] Report” in “Official Inquiry”; “Report by Vice Consul E. C. R. Thomson” (copy), inclosure no. 3 in “Official Inquiry”.

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endorsed his subordinates’ conclusions. As far as he was concerned, the case of the commercial agent’s death was closed: Suleiman had been accidentally burned to death in his home during the night. The flames of his charcoal heater (kursī)18 had caught the blanket covering him. This conclusion was telegraphed to the British Embassy in Tehran a short time after his visit to the scene.19 The news of Suleiman’s death was conveyed to Ziegler & Co. head office in the capital by the British Embassy. Mr. J. Broglie, who was in charge of this office, was unconvinced by the Mashhad consulate’s version of the accident. In a detailed letter he sent to MacLean about a week after the event, he noted a significant detail that was unknown to the consul general and his staff: a few days before his death, Suleiman had received a relatively large sum of money (about ₤571 [₤46,600 in 2009 retail prices]) from the firm’s office in Tehran. The money had not been found among the deceased’s possessions. Furthermore, no documents were found that might indicate how Suleiman may have used the money. Broglie asked MacLean if it were possible that documents concerning the money transfers to Suleiman from Tehran had been destroyed in the fire.20 When MacLean replied that it did not appear to be so, Broglie began suspecting that the commercial agent had not died in the fire, but rather that he had been robbed and murdered. Broglie might have been influenced by rumours of murder, which had spread in Mashhad a short time after Suleiman’s death, and had reached him.21 On the basis of all this he approached the British ambassador in Tehran, Henry Drummond Wolff, with a request that a thorough inquiry into the matter be conducted in Mashhad. Consequently, the ambassador instructed the consulate to resume its investigation.22 Broglie did not stop there. A short time after he was informed of the death, he wrote to Ziegler’s commercial agent in Tabriz, Moses Nercissian – also an Iranian subject of Armenian extraction – instructing him to leave for Mashhad without delay, gather information about Suleiman’s death, and try to find out what had become of the money he had sent.23 On arriving in the city, Nercissian was able to 18 Edward B. Eastwick, a secretary and translator at the British Legation in Tehran in the early 1860s, wrote: “[In winter 1862] we lodged at Ashraf [north-west Iran] in a neat cottage. . . . In the centre of the largest room was an economical contrivance called a Kursi. . . . A cavity in the ground three feet deep is bricked round, and is covered by a square wooden seat. A charcoal fire is lighted below, and the family place themselves on the seat, and are toasted to a convenient warmth.” See Journal of a Diplomate’s Three Years’ Residence in Persia, London, 1864: 1, 72. 19 MacLean to Minister (telegram, copy), Mashhad, 22 April 1890, inclosure no. 5 in “Official Inquiry”; see also “Memorandum by General MacLean” (copy), [Mashhad, 24 April, 1890], inclosure no. 4 in “Official Inquiry”. 20 J. Broglie to General MacLean (copy), Tehran, 29 April 1890, inclosure no. 14 in “Official Inquiry”. 21 General MacLean to Minister (telegram, copy), Tehran, 13 June 1890, inclosure no. 21 in “Official Inquiry”. 22 Minister to General MacLean (telegram, copy), Tehran, 11 June 1890, inclosure no. 19 in “Official Inquiry”. 23 J. Broglie to General MacLean (copy), Tehran, 29 April 1890, inclosure no. 14 in “Official Inquiry”; see also J. Broglie to General MacLean (copy), Tehran, 8 May 1890, inclosure no. 16 in “Official Inquiry”.

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confirm the information in Broglie’s possession: not only was there no trace of the money, but there were also no documents that might shed light on how it had been used. As Broglie’s suspicions grew that Suleiman had been robbed and murdered, he instructed Nercissian, at the same time as his request was sent to Wolff, to submit a formal request to the consul general in Mashhad on behalf of Ziegler & Co. to conduct an investigation into Suleiman’s death and the missing sum of money.24 MacLean, who was convinced that Suleiman had died by accident, was not eager to reopen the investigation, and tried to persuade Wolff that the rumours of the murder were unfounded.25 This effort failed, inter alia because Nercissian, who had concluded his private inquiry, had reached a conclusion that seemed to have confirmed Broglie’s suspicions. Nercissian managed to reconstruct Suleiman’s accounts. According to his calculations, a sum of approximately 2,000 tūmāns (about ₤571) was missing from the agent’s cash box.26 He also found that some of the documents that should have been in Suleiman’s office in the caravanserai were missing. In his report Nercissian reiterated the rumors that Suleiman had been murdered. He also pointed to the possibility of a connection between the missing money and the death of the agent.27 In light of all the above, on 19 June 1890 Nercissian, acting on behalf of Ziegler & Co., requested consul general MacLean that five groups of people be investigated at the kārguzārī: (1) Suleiman’s neighbours in his residence; (2) his neighbours at his office in the caravanserai; (3) the persons in charge of order and security in the caravanserai; (4) the deceased’s servants; and (5) the sarrāfs (bankers) with whom Suleiman had deposited various sums of money.28

IV The inquiry was conducted in two stages. The first was held at the British consulate general on the 24th of June 1890 and was devoted to reconstructing Suleiman’s transactions with the leading sarrāfs of Mashhad in order to find out what had become of the money transfers he had received from Ziegler’s office in Tehran. The second stage took place three days later at the offices of the kārguzār, who summoned the people who worked for Suleiman or were supposed to know him well in order to reach conclusions with regard to the suspicions of robbery and murder. The examination of Suleiman’s transactions, which took place at the consulate, was attended by the consul general, several of his aides, Moses Nercissian, 24 Messrs. Ziegler & Co. to their Meshed Agent M. Nercissian (telegram, copy), Tehran, 11 June 1890, inclosure no. 28 in “Official Inquiry”. 25 General MacLean to Minister (telegram, copy), Mashhad, 12 June 1890, inclosure no. 20 in “Official Inquiry”; same to same (telegram, copy), Mashhad, 13 June 1890, inclosure no. 21 in “Official Inquiry.” 26 A letter from M. Nercissian (to General MacLean), (translation, copy), Mashhad, 19 June 1890, inclosure no. 27 in “Official Inquiry.” The exchange rate at Mashhad in 1890: ₤1=c.35 qirāns. 27 Ibid. 28 Ibid.

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and five local businessmen, of whom three were prominent sarrāfs and two were well known tujjār (big merchants).29 Among Suleiman’s papers, Nercissian found data on cash flows up to the end of 1889. No report was found that related to the four months prior to his death. However, Nercissian reconstructed the balance sheet for these months on the basis of weekly reports that Suleiman had sent to the office in Tehran, and a list of payments left by him. Based on this information, Nercissian reached the conclusion that a sum of 1,964 tūmāns, 6 qirāns and 13 shāhīs should have been kept in Suleiman’s office or home on the day he died30 – a sum similar to that noted by Broglie a short time after he heard of the death in Mashhad. Summonses were issued to the local sarrāfs and tujjār to appear at the consulate, first, to corroborate Nercissian’s calculations, and second, to examine whether the sarrāfs and merchants with whom Suleiman worked owed him money for deposits or forward payments he had concluded before the 21st of April. The sarrāfs arrived at the consulate offices with their ledgers, which they opened for the inspection of those present.31 The books showed that Suleiman had deposited hundreds of tūmāns with the sarrāfs. They also showed that these sums had been withdrawn by him prior to his death and that the sarrāfs did not owe him any money.32 By the end of that day, Ziegler & Co. had managed to lay factual grounds for its demand that a thorough investigation of the circumstances of its commercial agent’s death be carried out, and particularly the question of where the vanished money had gone. In light of this development, the kārguzār of Mashhad, Nazim al-Mulk, decided to accept MacLean’s request to hold a formal inquiry in his majlis.33 On the afternoon of the 27th of June, over four months after the death of Suleiman, the inquiry at the kārguzārī was held in the presence of four office-holders: Nazim al-Mulk, the kārguzār of Mashhad; Sarhang Husayn Khan, the kārguzār’s first (senior) assistant; Baba Mawla Bakhsh, attaché from the British consulate general in Mashhad representing the consul general; and Moses Nercissian,

29 Inquiry into the circumstances connected with the death of Suliman (copy), [Mashhad, no date], inclosure no. 33 in “Official Inquiry”. Two of the three sarrāfs mentioned in the document – ‘Ali Akbar Sarraf and Muhammad Hasan – are also mentioned in the list of Mashhad’s major tujjār and sarrāfs that appeared in the Gazetteer of Persia, 1910 edition. See “Meshed”, GP, Simla 1910, 1: 539. For details on ‘Ali Akbar’s property, see “Report of the Inspection: The Mashhad Branch”, Mashhad, 18 June 1915, fond 600, opis 9, delo 946, RGIA. 30 “Compoir Mesched (Mirza Gregor), [Summary of Suleiman’s accounts furnished by Messrs. Ziegler & Co.]” (copy), Tehran, 31 May 1890, inclosure no. 30 in “Official Inquiry”; “Statement of Karikur’s Accounts prepared by M. Nercissian” (copy), Mashhad, 31 May 1890, inclosure no. 31 in “Official Inquiry”; “Examination of Mr. Nercissian [proceedings]” reported by MacLean (copy), Mashhad, 24 June 1890, inclosure no. 32 in “Official Inquiry”. 31 “Examination of Mr. Nercissian” in “Official Inquiry”. 32 Ibid. 33 General MacLean to the Karguzar (copy), Mashhad, 25 June 1890, inclosure no. 34 in “Official Inquiry.”

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Ziegler & Co.’s commercial agent.34 Seven Iranian subjects were questioned at the kārguzārī, three of whom were in the employ of Suleiman and four who held various positions in the city Administration (see Appendix).35 Of those responsible for public order in Mashhad, the first to be questioned was Mirza Kuchak, the kadkhudā (overseer) of the quarter in which Suleiman lived. Kuchak was expected to have known what went on in his quarter and so he was asked to relate all he knew about the matter: who had been with Suleiman on the night of the fire, who was the last person to leave the house before Suleiman’s death, and so on. It seems that Kuchak was not well informed. He had heard a few things from Mihdi, Suleiman’s personal servant, and had also picked up scraps of information from the commercial agent’s closest neighbours. It was understood from his testimony that Mihdi usually spent the night in Suleiman’s house, but on the night in question (the first night of Ramadan 1307 A.H.), according to what Mihdi had told Kuchak, Suleiman had dismissed him after supper. Some time later Mihdi had returned to Suleiman’s house and found his master dead. Only towards midnight did the servant report the disaster to the kadkhudā. The latter then sent the servant to the scene together with one of his own men to prevent the people gathered there from entering the premises and looting it. To the question of whether, in his opinion, the fire was the result of arson or an accident, the kadkhudā replied that “nobody had any motive whatsoever for committing such an act”. He did not think it was a case of premeditated murder.36 Of all those questioned at the kārguzārī, the most significant testimony was given by Mihdi, Suleiman’s servant, who had been with him a few hours before the fire broke out. Mihdi told the court that on the night of the fire he had been with Suleiman for two hours after sunset. After preparing his master’s meal, he had gone home and then to the mosque. He related that when he left Suleiman, the man had been drunk. Moreover, during the three days prior to the event (18–20 April), Suleiman had stayed at home and had not gone to his office in the caravanserai. Upon the servant’s return to the agent’s house, the flames consuming the building were at their height. He called the neighbours to break down the doors and hurried to inform the dahbāshī (headman) and then the kadkhudā about the disaster. Only then did he return to Suleiman’s house to help extinguish the flames.37 The testimonies of the kadkhudā, the servant, and the five other witnesses should have raised numerous questions regarding what actually happened on the night of the 21st and in the early hours of the 22nd of April. However, none of these questions was put to them for the simple reason that no further sessions were set by the kārguzār. A week after the testimony was heard, on the 3rd of July 1890, the kārguzār sent an English translation of the proceedings of the meeting to consul general MacLean. In so far as the kārguzār was concerned, the inquiry into the 34 35 36 37

“Karguzar’s Report” (translation, copy), Mashhad, 27 June 1890, inclosure no. 36 in “Official Inquiry.” Ibid. Ibid. Ibid.

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death of Suleiman and the disappearance of the 2,000 tūmāns had been concluded, and “the Suleiman case” was closed.38 He did not append to the proceedings his own opinion on the case – i.e., whether there had been a robbery and a murder in Bala Khiyaban or not.

V The meeting at the kārguzārī was not a regular session of the court. There was no formal plaintiff and defendant. Rather, it was a formal inquiry carried out according to the institution’s regulations. The documents, however, do not supply information with regard to several significant issues, such as who presented the questions to the witnesses; whether the proceedings were a verbatim transcription of the meeting; whether the English version of the proceedings constituted a complete and correct translation of the original Persian text, etc. Still, the procedure, text and context give us reasonable clues to resolve some of these questions. First, it is clear that the meeting was chaired by the kārguzār and that he was in charge of the investigation and presented the questions to the witnesses. This was his responsibility. Second, the style of the text indicates that the proceedings are a verbatim or almost a verbatim text of what was said in the meeting. Third, while it is impossible to comment on the precision of the translation from Persian to English, it should be noted that in cases of errors in the translation of important documents, officials at the British embassy with a high degree of proficiency in both languages spotted and corrected such mistakes.

VI Ziegler & Co. must have been dissatisfied with the results of the inquiry. It appears that following the kārguzār’s letter of the 3rd of July to MacLean, the firm did not succeed in instigating any additional inquiries or investigations by the kārguzār or any other Iranian authority. Yet, from the company’s standpoint, the death of its commercial agent had not been solved and the 2,000 tūmāns had not been recovered. A short while after the inquiry of late June, Ziegler & Co. decided it would no longer employ a commercial agent in Mashhad, and its commercial activities in Khursan were cut back.39 The inquiry at the kārguzārī appeared to be inadequate. A number of important questions were not asked. For example, why did the servant, Mihdi, uncharacteristically leave Suleiman that night, and why did he decide to return to the house some time later? If Suleiman had indeed been drunk, why did his servant leave him with the kursī burning in the room? Why had he not called for medical assistance (the consulate’s physician, for example) immediately upon discovering that Suleiman had been severely injured in the fire? Why had he not first tried to put 38 The Karguzar to General MacLean (translation, copy), Mashhad, 3 July 1890, inclosure no. 37 in “Official Inquiry.” 39 Elias 1896: 30.

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out the fire before running to report the event to the kadkhudā? Furthermore, a number of other issues were not examined at all, such as Mihdi’s claim that Suleiman had not been at his office in the caravanserai during the three days prior to his death. Additionally, a number of contradictions between various versions of the events were not examined. For example, Mihdi testified that the dahbāshī had come to the scene of the fire, whereas the kadkhudā did not say this. The kadkhudā mentioned that he had sent one of his men with Mihdi after learning from him about what had happened at Suleiman’s house, whereas Mihdi testified that he had returned from the kadkhudā’s house on his own. The kārguzār did not call any additional witnesses who might have shed light on obscure points, namely the dahbāshī, who was among the first on the scene, the grocer, who according to Mihdi had sold him a bottle of araq on the night of the fire, and finally the grocer’s mother and other neighbours who were familiar with Mihdi and with Suleiman’s habits (was he indeed a drunkard?) and who were in the vicinity of the house when the fire broke out.40 The transcript of the inquiry at the kārguzārī conveys the impression that the kārguzār was not overly keen to get to the bottom of the events on the night of the 21st of April. He was asked to question witnesses to the event and did so without delay, but reaching conclusions about suspects, or with regard to continuing the inquiry and summoning additional witnesses, went beyond what was expected of him in his own perception and that of his organisational environment (the Qajar bureaucracy). It is also clear that he had no interest in providing Ziegler & Co. with any grounds for claiming compensation for the missing money from the authorities, or at the very least grounds for demanding a further investigation. At the end of the day the kārguzār in this case served as a formal functionary absorbing pressure from a foreign company in its efforts to retrieve its financial losses, but without offering effective assistance to attain this objective. In this he was successful. The performance of the kārguzār of Mashhad was in line with the attitude of Nasir al-Din Shah towards the economic activity of European merchant houses and investors during most of the 1870s and 1880s. While sometimes inconsistent in this policy, his attitude toward foreign economic penetration into Iran was characterized by suspicion and grave concern lest this activity lead to increased political interference by the European powers – primarily Russia and Britain – in Iranian affairs and serious damage to Iranian sovereignty far beyond that which the country had already endured. It may be assumed that foreign merchants and diplomats who attempted to promote the establishment of mixed courts in Iran41 would have probably claimed that an inquiry in such a case, were it conducted in a mixed court by professional judges, would have constituted the beginning of a thorough hearing and not the end of a perfunctory process. 40 “Karguzar’s Report” in “Official Inquiry”. 41 For the efforts of British consuls and merchants to have mixed courts established in Iran, see Chapter 9 in this volume.

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Karguzar’s Report42 A meeting was held, consisting of the following persons, on the 27th June 1890, in the Karguzar’s court to investigate the affairs of the late Suleiman, and the following necessary enquiries were made. Mirza Moses Nercissian’s Statement Witness stated that some time before the burning of Suleiman, sums of money were remitted to him, and after his death about 2000 Tumans of the said money is missing, and cannot be accounted for. It is not clear what has become of it. According to the Teheran accounts, and accounts of the bankers of this place, which have been examined and found to agree, it has been discovered, that this amount is missing. Mirza Kuchek, “Katkhuda” Was Questioned Question: On the night that Suleiman was burnt, who was with him; before he was burnt who went to him; who was the last person who came away from him; after he was burnt, who went into his room, and who were at variance with him? Answer: Nobody was with him, and on that night his own man Mirza Mehdi was with him, and had left him, and the last person was the same Mirza Mehdi. Question: Why do you say that the said Mirza Mehdi was the last man who went to him? Answer: It is according to his own statement. He told me that he had the key. Question: How do you know that there was no other man with him besides his own servant, and the last man was the same Mirza Mehdi? Answer: I say this from information gleaned from the neighbours.

42 “Karguzar’s Report” (translation, copy), Mashhad, 27 June 1890, inclosure no. 36 in “Official Inquiry”.

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Question: How long was his servant with him at night, and at what time did he leave? Answer: I don’t know. According to what the neighbours say, every night his servant used to attend upon him. The servant, Mirza Mehdi, gives me the following particulars: “I was with him up to dinner time. Afterwards he told me that if I wished to go, I might go and sleep. I put the bottle of arrack on the table, and the lamp was on the “kursi”. I closed the door and went away. After a while I came back. I heard the noise of people and smoke was issuing (from the house). We opened the door and saw that Suleiman was burnt. As the door was shut the people could not enter the room. I opened the door”. Question: When did Mirza Mehdi inform you that Suleiman was burnt, and after receiving the information did you go there, that is, on the same night or not? Answer: It was nearly midnight when he gave me the information. I did not go, and I told him to go and take care that the property was not stolen, and not to allow anyone to come there. Question: Did your men go with him there or not? Answer: Yes. One man went to keep the people away from the place. Question: What is your opinion, that Suleiman was burnt intentionally, or accidentally? Answer: As far as the investigation goes, he burnt himself. No one had any motive in doing such a thing. Mirza Mehdi’s Statement (Suleiman’s Servt) Question: On the night that Suleiman was burnt were you near him? Answer: I was with him for two hours after sunset, and afterwards went to my own house, which is near his place. Question: Was anyone else there besides you? Answer: No, no one else was there besides me. Question: As you say that you left Suleiman two hours after sunset, when you left in what state was Suleiman? Answer: I roasted a piece of meat for him, and the arrack was also placed before him. He was intoxicated. I left, and he came himself, and shut the courtyard door. Question: When did you return again? Answer: From there I went to my house and from thence to the Shrine. It was about 1½ hours before *dawn, when I was going to my house with some ice. When I reached there, the mother of Reza Kuli, grocer, who has a shop there, asked me where I had been, as the house of Suleiman had taken fire. I went to Suleiman’s place and saw about 20 people assembled there, who had gone over the roof and opened the street door, but they had not made up their minds as yet to enter the room. 195

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Question: Who opened the door of the room? Answer: When I went inside I was [saw] the room was burnt. I forced open the passage door and entered the room. The smoke almost suffocated me, and I beat a retreat, and cried out “come here, you people, and break open the doors”. I myself ent and informed the “dahbashi” of the quarter. He came and I asked him to go and inform the “kat khuda”, but he said that I ought to go myself. The “dahbashi” was there among the crowd. I went and told the “kat-khuda”. The kat-khuda said that the “dahbashi” was there and, therefore, it was not necessary he should go there, and said that I should tell the “dahbashi” from him to investigate the affair. Question: Did the “kat khuda” send a man with you or not? Answer: No, he did not send any one with me. Question: On your return what happened, and what was done? Answer: I went there and extinguished the fire until day break. I turned the people out, shut the courtyard door from the outside, put the key in my pocket, accompanied the “dahbashi” to the “kat-khuda”, and asked him what was to be done. The kat-khuda wrote a letter to the “Khanbashi”, and sent us to him. The “Khanbashi” dispatched me with a man to the Karguzari. From The Karguzari a man took me to the house of Mirza Nasrullah Khan. Mirza Nasrullah Khan took me to the British Consulate General. Then Mr. Thomson and Dr. Woolbert came to Suleiman’s house. I opened the door and they entered. Question: On that night how much money did Suleiman have with him? Answer: That night, when I wanted to bring arrack for him, he had no money. He had a 5 Krán piece, which had been given as a deposit several times before. He gave me that 5 Krán piece, and I took it to Reza Kuli, grocer, and deposited it with him, and took 3 Kráns, and that 5 Krán piece is still with Reza Kuli. Suleiman never kept money in his house, and had none. Question: When you left Suleiman where were his watch, silver belt and the keys of his shop and house. When you returned where were they, and how were they place [sic]? Answer: For several days his watch had been out of order, and he wanted to give it to the watchmaker. I don’t know whether he sent it or not, but it was not with him, and I did not see it. He always gave his watch to the watchmaker himself. I don’t know anything about the watch. The belt was with him. On my return I did not notice it. The keys were with him. He had tied the key of the box with a separate blue tape and he used to hang it on his belt, or put it in his pocket. Question: Before this accident took place, how long was Suleiman staying at home? Answer: That day, on the night of which the accident took place, he had been to his shop, but before that day he was in his house for 3 days, and did not go to his shop. Question: Do you know how much money Suleiman had in his shop on the night he was burnt? 196

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Answer: No, I don’t know. Question: Who used to go and return with him from the shop? Answer: I used to go with him and open the door in the morning in his presence, and when returning, he stood and saw the door closed and took the key from me, but for the last 8 or 10 days he kept me at the house to superintend the repairing of the tank, and Amir used to go with him, but on the last day I accompanied him to his shop. Question: With whom of the caravanserai merchants was he connected and on friendly terms, and with whom did he do business, and with whom was he on the most friendly terms? Answer: His connection and business was principally with Haji Ali Akbar and Mohd Hassan, bankers, and in the caravanserai he was on friendly terms with Haji Mahmud, and always visited his shop. Question: Lately before his death did he give money to anybody, and do you know anything about it or not? Answer: I don’t know that he gave money to anyone. Question: How long before this accident occurred did Amir leave Suleiman’s service? Answer: Five or six days previously. Question: When you came to Suleiman’s house and opened the door, who took up his silver belt, and who took out the keys from his pocket? Answer: When I went with Mr. Thomson and Dr. Woolbert, I was sent for a carpenter. I went, and I don’t know who took the keys out of his pocket. * Note. This was during the month of Ramazan. Amir (Suleiman’s former servt) examined Question: Were you a servant of Suleiman: how long were you with him, and when did you leave his service? Answer: I served him for 5 days, and it was 14 days before the 1st of Ramazan when I left his service, and he did not give me anything for those 5 days. Question: What work did he assign to you during those 5 days, and did you use to go with him to his shop or not? Answer: I was in the habit of cooking. He used to bring meat and rice and give it to me. I took it to my house and cooked it for him. When I went to the caravanserai he gave me money at the door, or he used to give me meat and rice, which I took to my house. He never sent me anywhere for money except once to Kerbelai Ghulam Reza, banker, who has a shop in the “Sangī arashha” Bazaar, and sent a message, asking why he did not settle the remainder of his accounts. Question: During those 5 days in which you went there did you not see him transacting business with anybody, or give or take money from anyone? 197

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Answer: No, I did not, except one day, when I saw Kerbelai Ghulam Reza making over some money to him. I don’t know how much it was. I did not see anything else. Mirza Mehdi recalled and questioned in the presence of Amir Question: How many days was Amir in Suleiman’s service, and how many days before his death did he leave him? Answer: He was in his service for about 14 or 15 days, and left him 5 days before his death. (Note. As the statements of Mirza Mehdi and Amir differed on these points, the members of the meeting wish it to be placed on record that Amir did not seem to have a proper memory, and no importance should be attached to his statement.) Mirza Hussein, contractor of the caravanserai, next called in Question: Did Suleiman go to his shop the day preceding the night he was burnt? Answer: Yes, he came to his shop the same day. Question: Did anyone come to the caravanserai and open his shop during the night he was burnt? Answer: No. No one came to his shop during that night. I was there. I heard from the man on duty that the next morning about 8 o’clock the officials of the British Consulate General came to the caravanserai, opened his shop, closed and sealed it and went away. Afterwards the British Consul-General came himself. Question: During the time you were in the caravanserai, especially during the few days before his death, did you see with what men he had dealings, or with whom he was on friendly terms? Answer: I know nothing. The “Caravanserai-dar” was then called in Question: What is your name? Answer: Ismail. Question: Were you in the caravanserai the night Suleiman was burnt? Answer: No, I was at home and my companion Mirza Ali was on duty. Question: Did it ever happen that Suleiman came to his shop at night, or did any of his servants in his absence, during the few days before his death come and open his shop in the daytime or at night? Answer: No he never gave the keys of his shop to anyone. He used to stand by while his servants locked the shop and then take the keys and put them in his pocket, and go away. No one else used to come to his shop and he himself never used to come to his shop at night.

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Mirza Baba was then called in Question: What connection had you with Suleiman? Answer: I was in the service of Baran George. Afterwards I left him and engaged in business. Suleiman came and said to me, “as you have dealings in the bazaar, and know all the merchants and bankers, come and do some work for me at times, and I will pay you for your trouble”. I agreed to the arrangement and used to do some work for him at times. Sometimes he used to come to my shop, and send me to ask some merchants to come to his shop to endorse his cheque, or to ask some banker to come and visit him on business. Sometimes I used to find out the price of new Kráns for him. This is the kind of work I did for him. Question: During the time you were working for him did you ever come to know with which merchants and bankers he had dealings, transactions or friendly connections? Answer: No, I was not always with him to see and know these things. Once he sent me to tell Haji Ali Askar, that if he had any accounts with Haji Mahmud to give a cheque on him, which Suleiman would accept. I conveyed the message to Haji Ali Askar. He replied that if he had known this a few days previously he could have complied, as he had some accounts with Haji Mahmud, but at that time he had none. He said that after a few days he might be able to obtain a cheque. Question: Did you not see, during the few days previous to his death, that somebody made over, or took cash from him? Answer: No, I did not. But once I saw Sadik, Jadid, banker, sitting in his shop and counting some money. I don’t know whether Mohammed Sadik made over money to Suleiman, or the latter to the former. Mirza Ali, “caravanserai-dar”, called in Question: The night Suleiman was burnt were you on duty in the caravanserai? Answer: Yes. That night it was my turn, and I was on duty. Question: Did you see Suleiman come to his shop the previous day? If so, at what time did he come, and at what time did he go? Answer: No, I did not see him, as I and my companion relieved each other at sunset. My companion was on duty in the daytime, and I relieved him at sunset to remain on duty during the night. I don’t know what happened in the daytime. Question: Between the time you took over the [sic] your duties from your companion and the next morning, when the officials of the British Consulate-General came, did no one come to his shop, and open it? Answer: No, I was awake the whole night until morning. Agha Mohammed Ismail, Kashmiri, came and several other men were in the caravanserai. No one came at all except the following morning, when the officials of the British Consulate-General came.

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Question: During this period, especially during the few days before this event occurred, did anybody come and open Suleiman’s shop in his absence, and with whom had he money or other dealings. Answer: No, I know nothing. No one came and opened his shop, and I don’t know if he had dealings with anybody. Note. The original document was signed by the following persons: The Nazam-ul-Mulk the Karguzar, Attaché Baba Maula Bakhsh, (the representative deputed from the British Consulate-General, Meshed), Sarhang Mirza Hossein Khan (1st Assistant at the Karguzari), M. Moses Nercissian (Agent of Messrs. Ziegler & Co. Tehran) df Meshed. 27th June 1890

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11 T H E R I S E A N D FA L L OF THE TUJJĀR COUNCILS O F R E P R E S E N TAT I V E S IN IRAN, 1884–85

Introduction In Shawwāl 1301/July 1884 Nāṣir al-Dīn Shāh issued instructions that councils of representatives of the tujjār (big merchants) were to be established in the major cities and commercial centers of Iran. At special assemblies the merchants were to elect the representatives who would constitute their local council (majlis-i wukalā-yi tujjār). The instructions, issued through the ṣadr aʿẓam (prime minister) to all the provincial governors, conveyed the clear message that the provincial authorities had to recognize the councils and the powers invested in them by the shah. These powers were extensive and covered the administration of all matters pertaining to trade, including the settlement of disputes among the merchants, and between them and their suppliers and/or customers. The issuing of licenses and permits was also transferred to the council’s jurisdiction. Underlying this initiative was an expectation that the councils would contribute to the initiation of new economic projects on a local and national level. This exceptional move by the shah was preceded by a correspondence between the ruler, his prime minister, and the tujjār, particularly Ḥājj Muḥammad Ḥasan Khān Iṣfahānī Amīn al-Ḍarb. It had been the merchants of Tehran who had, on their own initiative, prepared a detailed proposal for the new institution, outlining its aims, functions, structure, and powers. After reviewing the merchants’ suggestions the shah endorsed them and decreed their implementation. Although councils of merchants (majlis, pl. majālis) had met from time to time in the major urban centers throughout the Qajar period, Nāṣir al-Dīn’s decree was unprecedented for Iran. The councils were headed by a respected and influential merchant – malik al-tujjār – in each of those places. They mainly dealt with business disputes among the tujjār themselves, and between them and other trading and business groups (dallāls, ṣarrāfs, foreign merchants, etc.). In several ways these councils were the forerunners of the councils of representatives, but there was nevertheless a fundamental difference between these two institutions. While the former body basically functioned as a framework for settling cases of debts,

DOI: 10.4324/9781003177425-14

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bankruptcies, and other mercantile disputes between the merchants,1 the latter were expected to play an important role in the process of economic policy-making and in the initiation of new economic enterprises. In other words, the councils of representatives of the tujjār were to turn the big merchants, who had principally constituted an economic elite until then, into a political force with powers far greater than any they had ever wielded in the country’s political system. In the summer and autumn of 1301/1884 councils of merchants’ representatives were formed throughout Iran. The first one was the Central Council of Merchants of the Capital. Its founding assembly took place in Tehran on 7 Shawwāl 1301/31 July 1884 under the leadership of Amīn al-Ḍarb, the driving force behind the initiative. At least seventeen other councils were established during the summer months of that year: in Iṣfahān, Kazwīn, Tabrīz, Kirmān, Zanjān, Bārfurūsh, Mashhad, Kirmānshāh, Sārī, Bushihr, Bandar ʿAbbās, Bandar Langa, Urūmiya, Rasht, Shīrāz, Kāshān, and Hamādān, and apparently in several other towns. It seems that the central government was not involved in the process of the election. Tujjār councils were further formed in large trade centers outside Iran where substantial communities of Iranian merchants operated, i.e. in Baghdad, Istanbul, and Baku. Each council consisted of four to fifteen members. The councils of representatives started their work immediately, thus implementing the powers invested in them by the central government. However, within weeks council members from several towns reported hostilities from the provincial governors and their officials. Particularly the governors of Gīlān, Bārfurūsh, Kazwīn, Yazd, and Iṣfahān deliberately set out to hinder the councils’ work. Of even greater significance was the opposition of the chief mujtahid and the ṭullāb in Tabrīz. By late 1301 and early 1302/1884–5, the clerics and provincial governors had so successfully thwarted the councils that their members despaired of their ability to conduct their work. In Tabrīz they soon resigned, and council members in other towns followed. In the capital government ministers who had opposed the new policy from the outset but had kept silent until then, now came out and openly demanded that the councils be abolished. In Rabīʿ II or Jumādā I 1302/February or March 1885, only some eight months after he had decreed the institution of the councils, Nāṣir al-Dīn rescinded the decree. The episode of the rise and fall of the merchant councils has remained absent from the historiography of the late Qajar period for a long time. Only in 1977 did a seminal study on the tujjār councils by Firīdūn Ādamīyat and Humā Nāṭiq appear which was principally based on correspondence kept in the private archive of Amīn al-Ḍarb.2 They argued that the period preceding the establishment of the 1 Albert Houtum-Schindler, “Persia, I. Geography and Statistics.” EB10, 31 (1902): 619; James Greenfield, Die Verfassung der persischen Staates (Berlin: Franz Vahlen Verlag, 1904): 143–4; James Greenfield, Das Handelsrecht . . . von Persian in die Handelsgesetze des Erdballs (Berlin: R. v. Decker’s Verlag, n.d. [1909]): vol. 4: 22, 27; Gad G. Gilbar, “Malik al-Tudjdjār.” EI 2nd ed., 6 (Leiden, 1991): 276–7. 2 Firīdūn Ādamīyat and Humā Nāṭiq, Afkār-i ijtimāʿī wa sīyāsī wa iqtiṣādī dar āthār-i muntashir nashuda-yi dawra-i Qājār (Tehran: Intishārāt-i Āgāh, 1356/1977): 299–371.

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councils was one of economic deterioration. They further claimed that even the well-established export of opium and carpets suffered from a severe drop in the international markets. Particularly harmful, according to them, was the growing penetration of foreign goods into the Iranian market. In response to these developments the tujjār launched an initiative to establish councils of representatives.3 In the late 1990s Shireen Mahdavi made a significant contribution to the study of this period by publishing several documents from Amīn al-Ḍarb’s archive that revealed the attitude of the tujjār toward the authorities on the eve of the establishment of the councils.4 In the late 1980s Vanessa Martin and then during the 1990s Mangol Bayat, Janet Afary, and Shireen Mahdavi put the story of the majālis into the broader context of the tujjār-state relationship.5 The story of the rise and collapse of the councils raises several issues which this article seeks to explore. Which factors led the tujjār to present their proposal to the shah to establish these councils, and what prompted Nāṣir al-Dīn Shāh to adopt it as a nation-wide policy? What made persons of power and influence in the various cities, particularly Iṣfahān and Tabrīz, oppose the policy so fiercely? And did these events have any significance for the development of Iran at the end of the nineteenth century and in the twentieth? In order to answer these questions we must first examine the economic developments in Iran in the period preceding the initiative.

Economic Growth Alongside Fiscal Stagnation The establishment of the tujjār councils in 1301/1884 occurred a decade after one of the harshest and most tragic periods of economic depression experienced by Iran in the nineteenth century, the Great Famine which lasted from 1869 to 1872. An indication of the dimensions of this catastrophe is provided by the estimate that between one and one-and-a-half million people died of starvation or illness during this period.6 Nevertheless, the Iranian economy recovered remarkably well. Wide areas witnessed a significant economic growth between 1874 and 1884. There are indications that Iran’s gross national product rose in those years, and a substantial increase was recorded in the foreign trade balance, both in exports and imports. 3 Ibid: 302–3. 4 Shireen Mahdavi, For God, Mammon, and Country: A Nineteenth-Century Persian Merchant, Haj Muhammad Hassan Amin al-Zarb (1834–1898) (Boulder: Westview Press, 1999): 91–2. 5 Vanessa Martin, Islam and Modernism. The Iranian Revolution of 1906 (London: I.B. Tauris, 1989): 53; Mangol Bayat, Iran’s First Revolution: Shiʿism and the Constitutional Revolution of 1905–1909 (New York: Oxford University Press, 1991): 47–8; Janet Afary, The Iranian Constitutional Revolution, 1906–1911: Grassroots Democracy, Social Democracy, and the Origins of Feminism (New York: Columbia University Press, 1996): 30–1, 347 n. 54; Mahdavi, For God: 92–4. 6 Gad G. Gilbar, “Demographic Developments in Late Qājār Persia.” Asian and African Studies 11 (1976–7): 143–4; Shoko Okazaki, “The Great Persian Famine of 1870–71.” Bulletin of the School of Oriental and African Studies 49 (1986): 183–92.

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Due to the absence of systematic and reliable data which would allow for the calculation of indices over time for the gross domestic product, taxation, and private consumption for the nineteenth century, only tentative conclusions can be drawn. Even the figures on commercial imports and exports are partial, and their reliability – at least until 1903 – remains problematic.7 Nevertheless, considerable parts of the Iranian economy appear to have grown and even flourished in the second half of the 1870s and the early 1880s. For example, both Iranian and foreign sources (principally British, Russian, and French) report a rapid expansion in the cultivation and export of opium8 and an impressive rise in the weaving and export of carpets.9 Visible exports seem to have increased from 40 million qirāns in 1877–80 to 100 million qirāns in 1881–5. In other words, during this period visible exports increased by 150 percent.10 These developments were accompanied by a growth in factors of production, mainly in cultivated land and capital stock. One would expect that the central treasury in Tehran and the shah’s private purse would have benefitted from such growth, as it presumably led to higher revenues from direct taxes, mainly from agricultural produce, and an upsurge in income from indirect taxes, particularly customs duties. After all, in both these areas, tax payments were – in theory – proportional to the size of the crop (agriculture) or the value of the goods (customs). Nevertheless, the data regarding fiscal development in the late Qajar period suggest that, despite economic growth, the revenues of the central treasury did not rise in real terms, and in certain years may have actually fallen. Two relatively detailed reports on sources of income of the central treasury are particularly revealing regarding fiscal development in the period under review. Both reports were drawn up by British diplomats. The first was compiled by the secretary at the British legation in Tehran, Ronald F. Thomson, and concerns the Iranian fiscal year 1868–9 (21 March 1868–20 March 1869). In his cover letter to London the ambassador hinted that Thomson made use of internal informants 7 The best available estimates of Iran’s balance of trade in the last decades of the nineteenth century are still those made by Esfandiar Bahram Yaganegi, Recent Financial and Monetary History of Persia (New York: no pbl., 1934): 89. 8 Gad G. Gilbar, “Persian Agriculture in the Late Qājār Period, 1860–1906: Some Economic and Social Aspects.” Asian and African Studies 12 (1978): 324–30; Ahmad Seyf, “Commercialization of Agriculture: Production and Trade of Opium in Persia, 1850–1906.” International Journal of Middle East Studies 16 (1984): 240–6; Manfred Schneider, Beiträge zur Wirtschaftsstruktur und Wirtschaftsentwicklung Persiens 1850–1900 (Stuttgart: Franz Steiner, 1990): 210–26; Willem Floor, Agriculture in Qājār Iran (Washington DC: Mage Publishers, 2003): 435–42; Shahbaz Shahnavaz, Britain and the Opening up of South-West Persia 1880–1914: A Study in Imperialism and Economic Dependence (London: Routledge-Curzon, 2005): 81–2. 9 Cecil A. Edwards, The Persian Carpet: A Survey of the Carpet-Weaving of Persia (London: Gerald Duckworth, 1953): 56; Annette Ittig, “Carpets. XI Qājār Period.” Elr 4 (1990): 879–80; Schneider, Beiträge: 321–37; Leonard M. Helfgott, Ties that Bind: A Social History of the Iranian Carpet (Washington: Smithsonian Institution Press, 1994): 198–200. 10 Yaganegi, Recent Financial and Monetary History: 89. All figures are annual averages at current prices.

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among the staff of the fiscal administration in the capital.11 The second report was written 18 years later by Arthur J. Herbert, the secretary at the British embassy in Tehran. This document similarly appears to have been based on his connections with high-ranking courtiers and senior officials in the fiscal administration. Herbert’s report refers to the Iranian fiscal year 1885–6, focuses entirely on fiscal issues, and provides considerably more detail than the earlier document.12 It is difficult to imagine that such detailed figures could have been obtained from other than top-level sources in the Qajar administration.13 The data in both reports concern assessments of direct taxes (māliyāt) that were imposed on the provinces, and gross sums that the provincial governors were required to remit to the state treasury in Tehran during the financial year from the collection of māliyāt. These assessments were prepared by officials of the fiscal administration (mustawfīs) in the capital, presumably with the assistance of their colleagues in the provinces. It should be noted, however, that the expenses of the provincial administration, once confirmed by the central treasury, were deducted from these sums. Furthermore, the shah allowed special outlays for unexpected developments on a provincial level, which were, for example, related to military operations or natural disasters. In other words, the center did not actually receive the amounts that appeared in the gross tax assessments in Thomson’s report, nor even necessarily the net sums recorded in Herbert’s account. Nevertheless, the two lists of estimates give us an indication of the central treasury’s evaluation of the size of taxable agricultural production in the various provinces, and hence the total regular direct taxes that the treasury imposed on agricultural crops – the main source of governmental revenues. These sources suggest that the central treasury increased the assessments between 1868–9, the year before the onset of the Great Famine, and 1885–6, the year after the establishment of the tujjār councils, by very small sums in nominal terms. The total assessment in 1868–9 amounted to 3.825 million tūmān,14 and in 1885–6 it was 4.443 million tūmān (current prices).15 The treasury thus increased the overall assessment in nominal terms by only 16 percent. In the years between the two reports, the qirān lost value against foreign currencies, and its purchasing power in the Iranian economy dropped as well. For example, between 1868 and 1885, the qirān fell by 20 percent relative to the British Pound Sterling (from 25 qirāns to 30 qirāns to the pound).16 Thus, the gross assessments of direct taxes in Pounds 11 “Report by Mr. [Ronald F.] Thomson . . . on the Population, Revenue, Military Force, and Trade of Persia,” enclosed in Mr. Alison to Lord Stanley, Tehran, 29 April 1868, PP, A&P 69 (1867–68): 247–69. 12 “Report by Mr. A. Herbert on the Revenue and Expenditure of Persia,” enclosure 2 in Nicolson to the Earl of Rosebery, Tehran, 2 April 1886, no. 47, Confidential, FO 881/5250, NAUK. 13 In the cover letter to his report Herbert pleads: “ . . . should this report be printed, it should not be made public, at any rate not for the present, as I have obtained these data from a confidential source.” Ibid: 2. 14 Thomson, “Report”: 250–1. 15 Herbert, “Revenue and Expenditure”: 3–18. 16 For exchange rates, see Thomson, “Report”: 250; Arthur Herbert, “Report on the Present State of Persia and her Mineral Sources . . .,” Tehran, May 1886, PP, A&P 67 (1886): 300.

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Sterling fell from £1.53 million in 1868–9 to £1.48 million in 1885–6. The central Iranian treasury thus did not raise, but in real terms actually lowered the assessment of direct taxes. If the total assessment did not grow, clearly the remittances of regular direct taxes from the provinces to the central treasury did not either. In real terms (fixed prices), the remittances therefore almost certainly diminished. Nāṣir al-Dīn was aware of the economic developments in his country. In the company of courtiers and officials, he made lengthy tours of various parts of the country. For example, in 1883, the year before the establishment of the councils, he toured the province of Khurāsān. The account of his journey and of his meetings with landowners, merchants, and tribesmen indicates that he was fairly well-informed about the changes in the economy in the 1870s and early 1880s.17 Although there was an increase in the gross national product and the income of certain groups in society rose, the resources of the central treasury stagnated or even declined, and this must have been unsatisfactory to the ruler. The shah indeed did not acquiesce to this situation, if only because a tight budget constrained his power and ultimately his control over the country. This is illustrated by the fact that although the shah’s army was not properly equipped or trained, the forces his eldest son – Masʿud Mīrzā Ẓill al-Sulṭān, who was governor of Iṣfahān and other provinces – had at his disposal were better equipped, armed, and trained than those of the central army and at least equal in number.18 The relatively small amount of resources mobilized by the central treasury was therefore not merely of economic importance. Aware that the boom in part of the economy did not benefit the state treasury, Nāṣir al-Dīn made plans to improve the situation of the central fisc in the late 1870s and early 1880s. As part of this effort, in 1882 he employed Carl von Töfenstein, an Austrian expert on taxation, to set up a more effective tax-collection system. The shah put the tax collection of Sāwa, a small province southeast of Tehran, in von Töfenstein’s hands, thus granting the Austrian expert the powers of a provincial governor. If successful, this province would serve as a model for tax collection throughout the kingdom. The measure failed, however, because the ʿulamāʾ and the senior bureaucracy in Sāwa were implacably opposed to the presence of the foreign specialist, the authority he had been granted, the information he wished to gather, and the expected results of his investigation. In a short time, the shah abandoned the Sāwa project and recalled von Töfenstein to Tehran.19 The shah also attempted to introduce changes in the collection of indirect taxes, mainly customs duties and highway tolls (rāhdārī). For instance, in 1880 he approved several reforms in the customs administration. These included subjecting all customs houses throughout Iran, including those in private hands, to

17 See, e.g., The Meshed Agent to Mr. Thomson (translation), 8 September 1883, enclosed in no. 172, Mr. Thomson to Earl Granville, Tehran, 28 September 1883, FO 539/22, NAUK. 18 George N. Curzon, Persia and the Persian Question (London: Longmans, Green & Co., 1892): vol. 1: 416. See also S. G. W. Benjamin, Persia and the Persians (London: John Murray, 1887): 186. 19 “Report by Mr. [William J.] Dickson on the Trade of Persia,” Tehran, 30 August 1882, PP, A&P, CR 69 (1882): 502; Herbert, “Present State”: 312.

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the jurisdiction of the ministry of customs; unifying the collection of customs and highway tolls; and equalizing customs rates for local merchants with those for foreign merchants.20 Although this tax reform also failed – due to the opposition of the customs houses’ lessees and because the new measures were unacceptable to the Iranian big merchants21 – the minister of customs, Āqā Ibrāhīm Amīn al-Sulṭān, was nevertheless able to increase customs revenues by hundreds of thousands of tūmān in a short time. Aware of the growth of foreign trade, and of the increase in the revenues of many customs house lessees, Āqā Ibrāhīm simply raised the amounts demanded of them substantially. According to one source, he was able to increase the customs’ revenues within a year or two by 50 percent (from 600,000 to 900,000 tūmān).22 Although it is not clear how much of this sum went to the central treasury, Nāṣir al-Dīn must have been aware of the great increase in revenues from this source in the early 1880s. It also seems likely that the shah knew that the foreign trade sector was dynamic and that it yielded large incomes to almost anyone who engaged in it. He also knew that the tujjār were probably the greatest beneficiaries from the new economic prosperity. The shah learned of the great profits and the huge capital that the tujjār were accumulating through several sources. For example, he had been acquainted with Ḥājj Muḥammad Ḥasan (Amīn al-Ḍarb) personally as far back as the late 1860s or the early 1870s when the latter supplied the palace with imported goods at the ruler’s request.23 Ḥājj Muḥammad Ḥasan’s acquaintance with the courtiers deepened in the 1870s as a result of the extensive business ties he developed with Āqā Ibrāhīm Amīn al-Sulṭān. In 1879, at the latter’s recommendation, the shah awarded Ḥājj Muḥammad Ḥasan the post of director of the mint (Amīn al-Ḍarb), a position of great importance in the monetary domain.24 The connections between the successful tājir and the shah, who sought to remedy the government’s fiscal situation, grew increasingly stronger in the following years, with Amīn al-Ḍarb providing the palace with a variety of financial services (loans, currency exchange, transfers abroad, etc.). Moreover, his association with Āqā Ibrāhīm, and later with his son, Mīrzā Aṣghar, enhanced his ties with Nāṣir al-Dīn.25

20 F. Stolze and F. C. Andreas, Die Handelsverhältnisse Persiens, mit besonderer Berücksichtigung der deutschen Interessen (Gotha: Justus Perthes, 1885): 43. 21 “Report by Consul [C. Beresford] Lovett on the Trade and Commerce of the Province of Asterabad for the Year 1881,” PP, A&P, CR 71 (1882): 1066; from Astrabad Agent (translation), 3 June 1884, enclosed in Ronald Thomson to the Earl Granville, no. 89, FO 60/460, NAUK. 22 H. Picot, “Notes on Persian Administration,” Tehran, 31 August 1895, Appendix 1 in “Memorandum by Sir M. Durand on the Situation in Persia,” Confidential, Tehran, 27 September 1895: 20, FO 60/581 and FO 881/6704, NAUK. 23 Aṣghar Mahdawī and Īraj Afshār, Asnād-i tijārat-i Īrān dar sāl-i 1287 qamarī (Tehran: ʿIlmī wa-Farhangī, 1380/2001): 101. 24 Ḥusayn Maḥbūbī Ardakānī, Taʾrīkh-i muʾassasāt-i tammadunī-yi jadīd dar Īrān (Tehran: Dānishgāh-i Tihran 1357/1978): vol. 2: 52; H. L. Rabino di Borgomale, Coins, Medals, and Seals of the Shâhs of Îrân (1500–1941) (Hertford: Stephen Austin and Sons, 1945): 19. 25 Ardakānī, Taʾrīkh: vol. 2: 51–2; Mahdavi, For God: 71–4, 78–9, 89–90.

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By 1301/1884 all the shah’s attempts to improve the financial condition of the central government had failed. Changing tactics, at the end of June 1884 he decided to strengthen the position of the person who stood at the head of the fiscal system. He appointed Mīrzā Yūsuf Khān Mustawfī al-Mamālik as the prime minister, granting him the highest title possible for the bearer of that office, ṣadr aʿẓam. The appointment was apparently prompted by the court’s perception that the authority of the shah and the central government was eroding. This was particularly evident in the disdain shown by some provincial governors for orders and instructions from the capital. As ṣadr aʿẓam, Yūsuf Khān, a seasoned, old-school bureaucrat who had close relations with many of the governors, was expected to restore the center’s authority in the provinces and further the implementation of new reforms.26 A few weeks after appointing Yūsuf Khān, the shah accepted Amīn al-Ḍarb’s suggestion to create merchants’ councils throughout Iran. What did the shah expect from these councils? Did he envisage them as agents of economic change only, or did he also hope to be able to use the tujjār to rein in the governors and strengthen the status of the central government in the provinces? The key to these questions seems to lie in the change that occurred in the position of the Iranian tujjār in the decade preceding the founding of the councils of representatives.

The Burgeoning of the Tujjār The big merchants had been of great importance for Iran’s economic development well before the 1870s, the decade which is widely considered as the beginning of the first period of economic globalization. The tujjār had already enjoyed high prestige in Iranian society in pre-Qajar times and their elevated status in the nineteenth century is reflected in descriptions of them by Iranian as well as European observers.27 Global and regional developments that improved transportation to Iran lowered the cost for both outside manufacturers and local consumers. The tujjār detected the new commercial opportunities and seized them successfully. In this way they became involved in the emerging global market.

26 See Ronald Thomson to Earl Granville, no. 102, Tehran, 28 June 1884, FO 60/461; Thomson to Earl Granville, no. 249, Tehran, 25 June 1884, FO 539/23, NAUK. 27 Muḥammad b. Sulaymān Tunikābunī, Qiṣāṣ al-ʿUlamāʾ (Tehran: [no pbl.], 1320/1902): 194; ʿAlī Aṣghar Shamīm, Īrān dar dawra-yi Salṭanat-i Qājār (Tehran: Ibn Sīnā, 1342/1963): 294; Jakob Eduard Polak, Persien. Das Land und seine Bewohner: Ethnographische Schilderungen (Leipzig: F. A. Brockhaus, 1865): vol. 2: 186–7; J. de Rochechouart, Souvenirs d’un voyage en Perse (Paris: Challamel, 1867): 168–9; Heinrich Brugsch, Im Lande der Sonne: Wanderungen in Persien (Berlin: Allgemeiner Verein für Deutsche Literatur, 1886): 239; M. L. Tomar, Ekonomicheskoe polozhenie Persii (St. Petersburg: Ministerstvo Finansov, 1895): 107; “Letters from General A. HoutumSchindler to Baron Julius de Reuter,” Tehran, 4 February 1889, Letters File no. 761, BBME; Greenfield, Handelsrecht: 26. Obviously, there were foreign observers who were critical of the tujjār and their mode of operation. See Herbert Coxon, Oriental Carpets: How They Are Made and Conveyed to Europe (London: T. Fisher Unwin, 1884): 67–8, 70–3; C. J. Wills, In the Land of the Lion and Sun (new edition, London: Ward, Lock & Co., 1891): 188, 192.

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The role of the Iranian big merchants in the development of the carpet-weaving industry and its growth into one of the major production and export branches in Iran in the last third of the nineteenth century has been described in several sources.28 The most comprehensive is the account by Cecil A. Edwards, an expert on Persian carpets who traded in this commodity from the late nineteenth to the mid-twentieth century, and who lived in Iran for many years during this period.29 Edwards describes the process by which the merchants of Tabrīz transformed themselves from carpet exporters to entrepreneurs and manufacturers in the same branch. In Edwards’s words: It was not until the middle of the nineteenth century, however, that Persian carpets began to find their way into the West in appreciable quantities. The trade was in the hands of Tabrīzi merchants – men of credit and renown. The agents of the Tabrīzi merchants collected as many of [the] old carpets as they could find in the houses and bazaars of the more important towns, and sent them by caravan to Tabrīz. There they were sorted, baled and dispatched . . . to Constantinople. . . . The demand continued to grow; but as it grew the supply of old carpets steadily diminished. What was to be done? The enterprising merchants of Tabrīz were faced with the danger of the extinction of their profitable trade. They resolved to meet the crisis by producing new carpets, to be specially woven for export. . . . Thus, about the year 1880, the weaving industry of Persia . . . received from the merchants of Tabrīz a stimulus which has placed it today [ca. 1950] in the forefront of Persia’s commercial activities. The Tabrīzi merchants were not content merely to place orders with the village weavers and leave it at that. They soon established small factories of a few looms in the towns. The movement began in Tabrīz itself; but they extended it before long to Meshed, Kermán and Kashán. In each locality the moving spirit was the Tabrīzi merchant.30 Edwards mentions the names of ten well-known Tabrīzi tujjār families who specialized in carpet manufacture and trade in his days.31 28 Aḥmad ʿAlī Khān Wazīrī, Jughrāfiyā-yi Kirmān, ed. Muḥammad Ibrāhīm Bāstānī Pārīzī (Tehran: Bahman, 1346/1967): 36, 189; M. G. de Vries, “Persian Carpet Weaving.” Journal of the Society of Arts 39/2018 (24 July 1891): 732. P. A. Rittikh, a Russian officer who visited Iran in 1900, noted that Kirmān’s carpet merchants had their own agents in India and Europe, and that these agents “collect orders and send to Kirmān pictures for implementation.” Otchet o poezdke v Persiiu i Persidskii Beludzhistan v 1900 (St. Petersburg: Voennaia Tipografiia, 1901): 210. See also A. H. Gleadowe-Newcomen, Report on the British Indian Commercial Mission to South-Eastern Persia during 1904–1905 (Calcutta: Government Printing, 1906): 94; “Report on the Trade of the Kerman Consular District for the Year 1905–06 by Lt.-Colonel W. Stewart . . .,” FO, DCR, AS 3682 (1906): 4. On Ḥājj ʿAlī Akbar, a prominent merchant who owned workshops for the production of carpets, see Z. Z. Abdullaev, Promyshlennost’i zarozhdenie rabochego klasa Irana v kontse xix – nachale xx vv (Baku: Akademiya Nauk Azerbaidzhanshkoi SSR, 1963); E. Beyens, Commerce et Industrie de la Perse, Extrait du Recueil Consulaire Belge (Bruxelles: P. Weissenbruch, 1898): 38. 29 Edwards, Persian Carpet: v. 30 Ibid: 55–6. 31 Ibid: 56, n. 2.

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While the Tabrīzi tujjār were the driving force behind the growth of carpet production, the merchants of Iṣfahān, Yazd, and Shīrāz played a central role in the expansion of another dynamic branch of the economy in the last third of the nineteenth century, the opium trade.32 A leading role in the cultivation, processing, and export of this crop was played by the big merchant and entrepreneur, Āqā Muḥammad Mihdī Arbāb Iṣfahānī Malik al-Tujjār. In the course of business trips to India, he recognized the enormous potential of the opium trade and invested part of his fortune in poppy cultivation in Iran. He also introduced Indian methods for processing raw opium and preparing it for export. Although he had close connections with foreign trading houses, especially David Sassoon & Co., he exported the opium directly to Bombay and Hong Kong through a company he owned himself, Kumpanī-yi Taryāk-i Iṣfahān. Āqā Muḥammad Mihdī amassed a huge fortune in this branch, and by the end of the nineteenth century was considered to be the wealthiest and most influential merchant in Iṣfahān and one of the foremost tujjār in Iran.33 Among other things, he was elected by the Iṣfahān big merchants to chair their council in 1884 with the aim of making it an influential institution.34 Investments in opium production and export became a lodestone for Iran’s big businessmen. However, such dealings were highly speculative, with low demand elasticity for the product on the one hand, and sharp fluctuations in supply to the major markets on the other.35 The opium trade was a field in which investors 32 Walter Baring, “Report on Trade and Cultivation of Opium in Persia,” Tehran, 23 September 1881, FO 60/449, NAUK; Edward Stack, Six Months in Persia (London: Sampson, Low, Marston, Searle and Rivington, 1882): vol. 1: 263–5; Benjamin, Persia: 414; Adelbert C. Talbot, “Report on the Trade and Commerce of the Consular District of Bushire for the Year 1892,” FO, DCR, AS 1252 (1893): 5; John R. Preece, “Report on the Trade and Commerce of Ispahan and Yezd for the Year 1894–95,” FO, DCR, AS 1662 (1896): 8, 21; P. Molesworth Sykes, “Report on the Trade and Commerce of the Consular Districts of Kerman and Persian Beluchistan from March 1894, to March 1895,” FO, DCR, AS 1671 (1896): 12; John R. Preece, “Report on the Trade of the Consular District of Ispahan for the Years 1897–98 and 1898–99,” FO, DCR, AS 2260 (1899): 8–9, 11. French commercial reports portray a different picture. See Roqueferrier, “Le commerce du sud de la Perse en 1884,” Tehran, 1 September 1886, MCI, BCF, RRC 13 (1 semestre) 1887: 92–3; H. Guès, “Mouvement commercial des principaux ports persans du golfe Persique en 1892–93,” MCI, RC 174 (1894): 16. French diplomats were clearly not well informed with regard to economic developments in the southern provinces. 33 Mīrzā Muḥammad Ḥasan Khān, Iʿtimād al-Salṭana, Mirʾāt al-buldān, eds. ʿAbd al-Ḥusayn Nawāʾī and Mir Hāshim Muḥaddith (Tehran: Dānishgāh-i Tihrān, 1368/1989): vol. 2: 1386; Mīrzā Muḥammad Ḥasan Khān, I‘timād al-Salṭana, Kitāb al-maʾāthir wa al-āthār (Tehran, lith., 1306/1888–9): 105; Muḥammad Mihdī b. Muḥammad Riḍā al-Iṣfahānī, Niṣf-i jahān fī taʿrīf-i Iṣfahān, ed. Manūčihr Satūda (Tehran: Amīr Kabīr, 1340/1961): 125; ‘Abd al-Ja‘fār Najm al-Mulk, Safarnāma-i Khūzistān, ed. M. Dabir Siyāqī (Tehran: ʿIlmī, 1341/1962): 177; Mīrzā Ḥusayn Khān, Taḥwīldār-i Iṣfahān, Jughrāfiyā-yi Iṣfahān, ed. Manūčihr Satūda (Tehran: Dānishgāh-i Tihrān, 1342/1963): 92; Henry Picot, “Biographical Notices of Members of the Royal Family, Notables, Merchants, and Clergy in Persia,” Confidential, Tehran, December1897: 90, FO 881/7028, NAUK. 34 Ādamīyat and Nāṭiq, Afkār-i ijtimāʿī: 336. 35 Opium is a commodity whose market price is sharply influenced by changes in supply. In terms of price theory, the “demand elasticity” for opium is less than 1, that is, a change in the amount supplied of a given commodity brings about a greater change in relative terms in the market price. Hence, the price

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with ample liquid funds enjoyed a great advantage over others. If, in addition, the merchant had a reliable network which kept him informed about developments in the relevant external markets, and if he was willing to take large risks, he could make colossal profits in a short time. Opium exports thus appear to have been one of the major sources of the rapid rise in capital accumulation by an influential group of tujjār in the last third of the nineteenth century.36 Generally speaking, private businessmen did not reveal details about their large transactions, and certainly not about commercial coups that brought in gigantic profits, as this might expose them to attempts at extortion or even confiscation of their property by powerful officials. Wealthy tujjār preferred to play down big gains, even if they were legally entirely permissible. A rare exception relates to the opium exports by Amīn al-Ḍarb in the mid-1870s. In a biography of his father, Muḥammad Ḥusayn (Amīn al-Ḍarb II), he is quoted as having said: I sought guidance from God (istikhara) concerning whether I should buy opium for export to Hong Kong and the answer was positive, so I started buying. Simultaneously with my attempt at purchasing opium, the price of opium fell drastically in Hong Kong and all the people [tujjār] in Iṣfahān, Burujird, Kirmanshahan, and Shīrāz who bought opium annually refrained from doing so that year. All the merchants criticized me for this purchase. Finally, I bought all that I could myself and borrowed money from people at high interest rates and sent it to the provinces for the purchase of opium. All in all, I made one thousand two hundred cases of opium in Persian ports ready for shipment to Hong Kong.37 Amīn al-Ḍarb also told about two merchants in Tehran who offered to sell him opium they had ready for export. They were so desperate to sell their merchandise of opium on the world market was subject to sharp fluctuations as a result of the increase/decrease in its output in the main cultivation regions, particularly India. These fluctuations, which amounted to tens of percents, caused considerable losses and bankruptcies to merchants who allocated a good part of their capital to this branch and did not keep financial reserves for times of great losses. Alternatively, those who survived, and hit a time of sky-rocketing prices, scooped up enormous profits. Jacob E. Polak wrote about the speculative aspect of the opium trade and its results in the early 1880s. See “Das persische Opium.” Österreichische Monatsschrift für den Orient 9/7 (15 July 1883): 125. 36 Writing in 1902–3 on the export of opium from the province of Kirmānshāh, Hyacinth L. Rabino noted that “Opium . . . gave a very good profit to exporting merchants, some of whom doubled and even trebled their capital in the course of four or five months.” “Report on the Trade of Kermanshah for the Year 1902–03 by Mr. H. L. Rabino,” FO, DCR, AS 3043 (1903): 6. See also “Report on the Trade of Kermanshah and District for the Year 1903–04 by Mr. H. L. Rabino,” FO, DCR, AS 3189 (1904): 25. In his anthology V. A. Zhukovskii quotes a folk song he heard in Iṣfahān in the mid1880s in which the cultivation of opium was praised, since it enriched both peasants and merchants. See Obraztsy Persidskogo narodnogo tvorchestva (St. Petersburg: Boraganskii, 1902): 104. See also Jane Dieulafoy, La Perse: la Chaldé et la Susiane (Paris: Librairie Hachette et Cie, 1887): 230. 37 The biography was first published in Yaghmā in 1962, and was later translated into English by Shireen Mahdavi. See “Memento of a Life, by Ḥāj Muḥammad Ḥusayn Amīn al-Żarb II.” Iran 30 (1992): 107–21; and For God: 171–85. The quotation above is from For God: 177.

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that they were willing to sell it for just 100 tūmāns a case and agreed to payment by a promissory note due a year later.38 Being now in possession of 1,340 cases of opium (about 87 tons of processed opium), but deeply in debt as a result, Amīn al-Ḍarb sent the cases to Hong Kong, the main opium market in Southeast Asia. He goes on to relate what happened there: As luck would have it, the price of opium [in Hong Kong] increased daily until it reached three hundred and fifty tūmāns per case. I instructed them [Amīn al-Ḍarb’s agents] to sell. After the sale, taking into account all the necessary expenditure and the interest on the borrowed money paid to the lenders, I made a profit of roughly three hundred thousand tūmāns.39 Amīn al-Ḍarb took an enormous business risk when he decided to buy this huge amount of opium.40 In the event, however, the profits were handsome. Making 300,000 tūmāns, or £111,000, on a total investment of 169,000 tūmāns, or £63,000, his net profit amounted to 178 percent in a period of just a few months. In the late nineteenth-century business world generally, this was a highly successful transaction, and in the context of the Iranian economy it was stunning.41

The Travails of the Tujjār Concluding the account of his successful opium transaction, Amīn al-Ḍarb relates that the shah, having heard from a third party about his sizable profits, called him in, ostensibly to verify that what he had heard was true, but probably to receive a fitting pīshkash. When Amīn al-Ḍarb confirmed that the transaction had indeed yielded a profit of 300,000 tūmāns, the shah reportedly replied: “I am delighted that during my reign merchants have the freedom and confidence to buy merchandise, that they have learned the ropes of commerce with Europe and that in one transaction they made a profit of three hundred thousand tūmāns.”42 Although it is uncertain whether these were indeed the words of Nāṣir al-Dīn, or if Amīn al-Ḍarb merely ascribed them to him, they nevertheless seem to reflect the view among the leading tujjār in the 1870s that the central government left them an almost unimpeded field for commercial operations and that it rarely interfered in their business matters. Moreover, the government did not impose any direct taxes on them. Unlike the guilds of artisans and retail traders, the tujjār, along with the bureaucracy and the ʿulamāʾ, belonged to a privileged category that was exempt 38 Ibid. 39 Ibid: 178. 40 Although Amīn al-Ḍarb had commercial agents in Hong Kong and he was connected to them by telegraph, the agents could not have foreseen so sharp a rise in the opium prices in the Chinese market. For Amīn al-Ḍarb’s extensive network of branches and agents outside Iran, see Gad G. Gilbar, “Muslim tujjār of the Middle East and their Commercial Networks in the Long Nineteenth Century.” Studia Islamica 100–101 (2005): 184–5. See Chapter 2 in this volume. 41 Mahdavi, For God: Ibid. 42 Ibid.

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from the payment of direct taxes. They did, however, pay indirect taxes, such as highway tolls and customs duties on most imported and exported goods. Although customs duties were relatively low, some of the tujjār managed, in sundry ways, to evade their payment.43 The central government’s supportive attitude toward the tujjār in the 1870s and 1880s was undoubtedly one of the main factors in their burgeoning and prosperity in those years. But as the tujjār’s activities expanded, they also began to encounter difficulties which, although not new to them, intensified to the point of becoming disruptive to their business. These difficulties involved the violation of the right of private property, namely, seizure by the authorities of the big merchants’ private assets by various means. The shah was not allowed, either by Islamic law (sharīʿa) or customary law (ʿurf), to confiscate his subjects’ assets without just cause. Although in general the right of private property was secure, there were nevertheless cases in which private assets were confiscated by the authorities. Such confiscations appear to have been carried out on the instructions of the shah himself, a government minister, or a provincial governor. Three categories of confiscation can be distinguished: that of the estates of senior bureaucrats (including ministers) who had died;44 that of property belonging to an individual against whom a legal charge was pending, a situation that was reportedly exploited by the authorities to remove the property of the accused prior to trial;45 and the confiscation of private property based on loopholes or ambiguities in the law or accepted practice.46 Although there are only few records of cases from the latter category, even a small number was enough to undermine trust in the security of private property. If the authorities violated it once or twice, who could guarantee that they would not do so again in the future?47 However, questionable confiscations did not take 43 See, e.g., “Memorandum from the Persian Minister for Foreign Affairs,” Tehran, 5 March 1876, enclosed in W[illia]m Taylour Thomson to the Earl of Derby, Commercial no. 2, Tehran, 10 March 1876, FO 60/382, NAUK; “Report by Consul [Henry Adrian] Churchill on the Trade and Commerce of the Persian Caspian Provinces of Ghilan, Mazanderan and Asterabad for the year 1879,” PP, A&P 74 (1880): 841; Lovett, “Asterabad,” 1881, CR 71: 1068; Durand, “Memorandum”: 14, note; Picot, “Persian Administration”: 21. 44 Muḥammad Ḥasan Khān, Iʿtimād al-Salṭana, Rūznāma-yi khāṭirāt-i Iʿtimād al-Salṭana, ed. Īraj Afshār (Tehran: Amīr Kabīr, 1345/1966): 541, 708; “Muayyir el Mamalik, Dúst Muḥammad Khan,” Picot, “Biographical Notices”: 47. 45 See, e.g., “Ḥajji ʿAlī Akbar Shīrāzī,” Ibid: 63; Tomar, Ekonomicheskoe: 107. A well-known case was the confiscation of some 800,000 tūmāns of Amīn al-Ḍarb’s liquid assets in December 1896 without being preceded by a due legal process. Although the authorities had approached the leading mujtahid of Tehran, Mīrzā Ḥasan Āshtiyānī, who according to one source issued a fatwā allowing the authorities to fine Amīn al-Ḍarb because of his excessive minting of copper coins, no legal procedure was initiated either in a sharʿī maḥkama or in an ʿurfī court. See A. Enayat, “Amīn(-e dār)-al-Żarb.” EIr 1 (1985): 952–3; Mahdavi, For God: 152–4. 46 On the confiscation of cultivated lands and the alteration of their legal status from arbābī (privately owned lands by large proprietors) to khāliṣa lands (crown lands), see Ann K. S. Lambton, Landlord and Peasant in Persia (London: Oxford University Press, 1953): 153–4. 47 Heinrich Brugsch ascribed the big merchants’ efforts to get their capital out of Iran – mainly to the principal trading centers in the Caspian region within the domain of tsarist Russia – to their fear

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place on a large scale in the period under review. As we have seen, a sizeable group of merchants managed to amass great fortunes in a relatively short time, and although this was known to the government, most of the tujjār were able to preserve their wealth and bequeath it to their heirs. Nevertheless, the threat of confiscation increasingly hovered over the Iranian business world during the Qajar period.48 This is illustrated by the description of Samuel Benjamin, the first ambassador of the United States to Iran from 1882 to 1885, of the maltreatment of one of the respected tujjār of Iṣfahān at the hands of Ẓill al-Sulṭān.49 Its significance for our argument is that the story became known in Iṣfahān and in other commercial centers in Iran. Did Ẓill al-Sulṭān himself have an interest in publicizing the affair? Did the tujjār spread the news on purpose? Whatever may have been the case, it warned the public that private property was not inviolate, and even the personal safety could not be taken for granted. By the late nineteenth century, with the rapid increase of their assets, the merchants were troubled by the growing risk that they could be stripped of their possessions. The procedures of proving ownership, meeting obligations in supplying goods, proving that loans had been taken, etc., were “soft,” i.e. subject to deceit and the caprices of the powerful.50 For example, in his autobiography ʿAbdallāh Mustawfī described an incident that demonstrated how the right of private property of the heirs of a big merchant could be made subordinate to the whims of a high-level bureaucrat.51 A practice that severely impaired the right to private property was the necessity to give pīshkash to government officials on countless occasions and in varied circumstances. The pīshkash was originally a voluntary gift of a valuable object (including cash), which was not part of a transaction. However, the pīshkash that the tujjār had to cede to high-ranking officials had entirely lost its voluntary

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of confiscation of their property by the authorities, see Lande der Sonne: 180–1. Noteworthy in this context is a report by M. Nikol’skii, the acting secretary of the Russian consulate at Rasht. See “Torgovlia Giliana v 1908 godu.” SKD 2, 1909: 121. James B. Fraser, who stayed in Iran for long periods in the 1820s and 1830s, documented what seems to be a folk tale about a big merchant’s fear of arbitrary confiscation of his property by the government. See An Historical and Descriptive Account of Persia . . ., 2nd ed. (Edinburgh: Oliver, Boyd, Tweedale Court, 1834): 312–3. Benjamin’s account concerned a wealthy merchant from Iṣfahān who complained to Nāṣir al-Dīn that Ẓill al-Sulṭān had mulcted him of a large sum. Consequently, the shah wrote to the governor to restore the property to the merchant. When the merchant appeared before Ẓill al-Sulṭān the governor told him: “ ‘ . . . you thought to frighten your Prince by reporting me to the Shah? You are indeed a brave man! . . . I must see your heart and learn courage from you!’ Then in a louder tone the Prince cried to his servants, ‘Tear out his heart!’ The menials seized the thunder-stricken merchant, cut him open on the spot . . .” Benjamin, Persia: 187. In view of the widespread practice of forging ownership deeds, the tujjār recommended the establishment of a special bureau under the control of the shah for registering those deeds. See Ādamīyat and Nāṭiq, Afkār-i ijtimā‘ī: 315. Abdallah Mostofi, The Administrative and Social History of the Qājār Period [The Story of My Life], translated by Nayer Mostofi Glenn (Costa Mesa: Mazda Publishers, 1997): vol. 1: 248–51.

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component. In fact officials in the public sector imposed the pīshkash on private entrepreneurs as a condition for rendering their service.52 During the period under consideration, pīshkash had all the characteristics of a tax. It was no longer a voluntary gift, but had become an obligatory payment. It thus functioned as an irregular tax, the rate of which was variable and impossible to know in advance. The absence of clear rules regarding the frequency and rate of such payments made the “pīshkash tax” intolerable for the tujjār.53 The lack of clarity and the inability to reckon the costs of obtaining the authorities’ services in advance impeded the conduct of business significantly. This was added to the uncertainty and the builtin difficulty of estimating the costs of transactions in advance. In late nineteenthcentury Iran the level of risks and uncertainty was extremely high in view of thefts of merchandise on the main trade routes, sharp shifts in costs and prices of finished goods in both the local and international markets, fluctuations in exchange rates, customer bankruptcies, difficulties in collecting debts especially from the highly placed, and the lack of an effective system of law enforcement.54 With commercial activity steadily on the rise, the tujjār felt a greater need than before for a mechanism that would minimize risks to their property and reduce bureaucratic hindrance. The councils were intended, inter alia, to achieve these goals.

The Tujjār Confront Their Foes From the start the councils of representatives sparked fierce resistance from two elite groups, the provincial governors and the senior ʿulamāʾ. The most powerful figures in both groups embarked on an open struggle to block the initiative and compel the shah to rescind his decision. The first stage of the struggle was principally launched by the provincial governors. Documents in Amīn al-Ḍarb’s archive attest to the resistance of the governors of the provinces of Gīlān, Bārfurūsh, Yazd, Qazwīn, and Iṣfahān. Among these, the most determined opponent to the councils was Ẓill al-Sulṭān, the shah’s eldest son and the governor of Iṣfahān and, in the early 1880s, fifteen other provinces. In 1884 Ẓill al-Sulṭān was at the summit of his power and the shah valued his abilities as a governor highly. Not only did the shah put a large number of provinces in the center, west, and south of Iran under Ẓill al-Sulṭān’s rule,55 but he also allowed him to build up an impressive military 52 Ann K. S. Lambton, “Pīshkash: Present or Tribute?” Bulletin of the School of Oriental and African Studies 57 (1994): 157–8. 53 The important distinction made by Mancur Olson between two kinds of bandits, the “settled” and the “roving,” helps to understand the merchants’ negative attitude toward “pīshkash as a tax.” Olson explains the importance of regularity in taxation, including taxes that are manifestly arbitrary. See “Autocracy, Democracy and Prosperity.” In Strategy and Choice, ed. Richard J. Zeckhauser (Cambridge, Mass.: MIT Press, 1993): 136–7. 54 Mahdawī and Afshār, Asnād-i tijārat: 19, 134. 55 Among the provinces under Ẓill al-Sulṭān’s rule were Fārs, Iṣfahān, Yazd, Arāk, Kirmānshāh, ʿArabistān, and Kurdistān. According to one estimate, “. . . two-thirds of all the [government] taxes were collected by his agents.” See A. Reza Sheikholeslami, The Structure of Central Authority in

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force. Second only to the shah himself, Ẓill al-Sulṭān wielded the greatest political power in Iran, and his behavior in relation to the merchant councils reflected his self-confidence. For example, the complaints of the tujjār council in Iṣfahān suggest that the governor instructed his officials not to deal with applications that demanded immediate attention and to reject requests from tujjār who were council members. A complaint about Ẓill al-Sulṭān’s attitude toward the work of the council appeared in a report submitted by Amīn al-Ḍarb to Nāṣir al-Dīn several weeks after the founding of the first councils. Subsequently, the ṣadr aʿẓam, Mīrzā Yūsuf Khān, approached Ẓill al-Sulṭān demanding him to explain these complaints. The governor’s reply to the prime minister on 3 Dhū ’l-Ḥijja 1301/24 September 1884 must indirectly have been meant for the shah. Denying any blame in obstructing the council, Ẓill al-Sulṭān instead rebuked the tujjār. “Order them,” Ẓill al-Sulṭān wrote to the prime minister, “to send their declarations directly [to the central government in Tehran], this band of cloth-mongering peddlers who call themselves merchants. I have a better reputation than all the merchants of Iran. If I did not engage in business myself, I would be completely ruined today.”56 Ẓill al-Sulṭān thus discloses what must have been one of his reasons for opposing the creation of the councils in the provinces that he governed: he was also active in business himself. For example, he bought vast tracts of agricultural land, acquired ownership of a large number of villages and qanāts, and was thus able to order the farmers to concentrate on cash crops. The total agricultural land and real estate that he owned in the early twentieth century was valued, according to one conservative estimate, at £250,000 (about 1.4 million tūmāns at the 1900 exchange rate).57 He also invested in international trade and the construction of caravanserais. In his wide-ranging business activities, Ẓill al-Sulṭān competed with the tujjār both in commerce and in transportation, especially in the provinces under his rule.58 In this rivalry he made use of his powers in the administrative and legal domains as well as his connections with influential persons in the court and government in Tehran and with representatives of foreign states, especially Britain. In this context, the establishment of the tujjār councils and the powers granted to them greatly restricted the governor’s room to maneuver and the advantages

Qājār Iran, 1871–1896 (Atlanta: Scholars Press, 1997): 131. Herbert’s figures for the fiscal year 1885 indicate a lower proportion: 36 percent only, see “Revenue and Expenditure”: 19–20. 56 Ādamīyat and Nāṭiq, Afkār-i ijtimāʿī: 349. 57 “Zill-us-Sultán, Masʿúd Mírzá.” In George P. Churchill, Biographical Notices of Persian Statesmen and Notables. August 1905 (Calcutta: Government Printing, 1906): 91. 58 A serious controversy arose between Ẓill al-Sulṭān and the tujjār over the construction of a wagon road on the Dizfūl-Muḥammara route, see Ādamīyat and Nāṭiq, Afkār-i ijtimāʿī: 349–50. Notably, along with commercial competition with the tujjār, Ẓill al-Sulṭān maintained joint business ventures with several of them. For example, together with Ḥājj Muḥammad Ḥusayn Kāzirūnī, a leading merchant-entrepreneur in southern Iran, he established a trading-company, the Shirkat-i Masʿūdiyya, in the early 1890s. See Heidi Walcher, “Face of the Seven Spheres: The Urban Morphology and Architecture of Nineteenth-Century Iṣfahān (Part Two).” Iranian Studies 34 (2001): 136, n. 66.

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that his office afforded him in competing with the merchants. Starting in Shawwāl 1301/August 1884, many powers heretofore under his sole authority were shifted to the councils’ purview. For example, the approval of new economic enterprises in the areas of infrastructure and production, and the settlement of disputes between officials in the provincial administration and merchants over matters of commerce, would now be either handled by the local merchants’ council or by the central merchants’ council in Tehran. For Ẓill al-Sulṭān, who was at the height of his administrative and political career, such restrictions were impossible to accept. As a governor, Ẓill al-Sulṭān also had considerable legal powers. Two legal systems were in use in Iran in the period under discussion: the sharʿī and the ʿurfī systems. In the former, the judge (qāḍī) was an ʿālim (scholar) and the sharīʿa in theory covered all legal areas. Nevertheless, especially in criminal and commercial matters, an alternative legal system existed in the ʿurfī court, in which governors or high-ranking officials served as judges. For various reasons, merchants often preferred bringing their suits before the governor, rather than requesting a hearing in a maḥkama (Islamic court) before the qāḍī.59 This legal capacity gave the provincial governor additional power, influence, and prestige, as well as revenues because the legal proceedings involved an (often informal) payment by the litigants. With the creation of the councils, some of these resources were taken away from the governor. Ẓill al-Sulṭān was joined by several other governors in resisting the curtailment of their juridical powers. Ẓill al-Sulṭān thus had a great deal to lose from the establishment of the council in Iṣfahān, which explains why his opposition to it was so fierce. Despite the protests of the governor of Iṣfahān and his colleagues, the merchant councils managed to continue their work for some time. The shah’s demonstrative support for the councils carried great weight, and even Ẓill al-Sulṭān could not ignore it entirely. Opposition to the shah beyond certain limits was dangerous, as Ẓill al-Sulṭān was to learn later on in another context. In late 1885 the shah decided to curtail his son’s powers and drastically weaken his position.60 In the event, the decisive blow to the councils came from a different direction, namely the opposition of ʿulamāʾ and ṭullāb, and more precisely the campaign

59 Tomar, Ekonomicheskoe: 115; Greenfield, Handelsrecht: 10–1; Willem Floor, “Change and Development in the Judicial System of Qajar Iran (1800–1925).” In Qajar Iran: Political, Social and Cutural Change, 1800–1925, eds. C. Edmund Bosworth and Carole Hillenbrand (Edinburgh: Edinburgh University Press, 1983): 114–5; Irene Schneider, “Religious and State Jurisdiction during Nāṣir al-Dīn Shāh’s Reign.” In Religion and Society in Qajar Iran, ed. Robert Gleave (London: RoutledgeCurzon, 2005): 84–6. On the tension between the sharʿī and ʿurfī courts, see A. Sepsis, “Quelques mots sur l’état religieux actuel de la Perse.” Revue de l’Orient, de l’Algérie et des colonies 3 (1844): 104; see also James Bassett, Persia: The Land of the Imams (New York: Charles Scribner’s Sons, 1886): 281; Picot, “Persian Administration”: 22–3. 60 In late 1885, the shah removed Ẓill al-Sulṭān from the governorship of several provinces, and in 1887 he ordered the governor to cut his military forces; Sheikholeslami, Structure: 133–4; Shaul Bakhash, Iran: Monarchy, Bureaucracy & Reform under the Qajars: 1858–1896 (London: Ithaca Press, 1978): 224–5.

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led by Ḥājj Mīrzā Jawād Āqā Mujtahid, the chief mujtahid of Tabrīz, against the council in that city. Developments in Tabrīz were of great importance because of the city’s central role in the economy of Iran. In the 1880s Tabrīz was still one of the two largest cities (with Tehran) in Iran, and one of the three most important commercial centers in the kingdom (with Tehran and Iṣfahān).61 It was home to prominent tujjār families with great wealth and widespread international connections.62 The formation of the council in Tabrīz caused considerable tension and friction within the entrenched and intricate network of tujjār, ṣarrāfs, and dallāls.63 It was in these muddy waters that Mīrzā Jawād cast his net. Throughout the nineteenth century a small number of senior ʿulamāʾ in Iran managed to accumulate immense economic power and great political influence. Muḥammad Bāqir Shaftī in Iṣfahān in the 1830s, Mullā ʿAlī Kanī in Tehran in the 1870s and 1880s, and Āqā Najafī in Iṣfahān in the 1890s are well-known examples.64 Like them, Mīrzā Jawād emerged as a leading personality in the political life of Tabrīz in the 1880s and early 1890s and was capable of mobilizing large masses for active support in any matter he advocated or opposed. One of the sources of Mīrzā Jawād’s power was his vast property and large income. Mīrzā Jawād was a very wealthy ʿālim, said by his contemporaries to have owned 200 villages.65 He was also an active businessman, and his activity in the grain trade was particularly well known. The sources refer to his involvement in the manipulation of wheat storage during periods of shortages in order to bring about an increase in cereal prices, thereby enlarging his profits.66 These and other acts earned him a tainted reputation.67 Mīrzā Jawād’s status as a senior mujtahid in Tabrīz, his office as imām jum‘a, his incumbency as a senior qāḍī, and his financial means enabled him to promote his personal interests, which he blended with public causes that conformed to his beliefs and positions. He also made use of the great influence he wielded over other

61 L. A. Sobotsinskii, Persiia: Statistiko-ekonomicheskii ocherk (St. Petersburg: Krovitskii, 1913): 14; Gilbar, “Demographic Developments”: 150, t. 3. 62 For details on the big merchant families of Tabrīz, see Picot, “Biographical Notices”: 113–7; Ādamīyat and Nāṭiq, Afkar-i ijtimāʿi: 336–7, n. 4; Edwards, Persian Carpets: 56, n. 2. 63 Ādamīyat and Nāṭiq, Afkār-i ijtimāʿī: 354–6; Manṣūra Ittiḥādiyya (Niẓām Māfī), Īnjā Ṭihrān ast . . . majmūʿa-yi maqālāt-i darbārih-yi Ṭihrān 1269–1344 H.Q. (Tehran: Nashr-i Tāʾrīkh-i Īrān, 1377/1998): 323–4. 64 Tunikābunī, Qiṣāṣ: 141–2, 149; Hamid Algar, Religion and State in Iran, 1785–1906: The Role of the Ulama in the Qajar Period (Berkeley: University of California Press, 1969): 16, 60–1, 172–3, 220; Abbas Amanat, “In between the Madrasa and the Marketplace: The Designation of Clerical Leadership in Modern Shiʿism.” In Authority and Political Culture in Shi‘ism, ed. S. A. Arjomand (Albany: SUNY Press, 1988): 106, 128. 65 Nādir Mīrzā Shāhzādah, Taʾrīkh wa-Jughrāfīya-yi dār al-Salṭana-yi Tabrīz, ed. M. Mushīrī (Tehran: no. pbl., 1351/1972): 119. 66 Mīrzā Muḥammad Nāẓim al-Islām Kirmānī, Taʾrīkh-i bīdārī-yi Īrāniyān (Tehran: Intishārāt-i Bunyād-i Farhang-i Īran, 1346/1967): vol. 1: 195. 67 See Thomas Edward Gordon, Persia Revisited (1895) (London: Edward Arnold, 1896): 24; Iʿtimād al-Salṭana, Rūznāma: 1001.

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ʿulamāʾ and the students at the religious colleges in the city. They immediately responded to his direct or implied appeals in matters that required support and they did not shy away from the use of physical force. Mīrzā Jawād had no qualms about openly defying the authorities because he could count on solid public support.68 Mīrzā Jawād had opposed the establishment of the merchant councils from the beginning. The orderly functioning of this institution would have impinged on his status as a judge and arbitrator in commercial and economic matters, and the tujjār’s dependence on him would be reduced, as would their contributions to the institutions he headed. This would translate into a loss of status and influence in Tabrīz. Mīrzā Jawād was therefore determined to eliminate this new institution before it could take root. The mujtahid’s strategy began with his support for a group of dallāls who had gone bankrupt. One of the functions of the council was to deal with bankruptcy, so that under the council’s aegis the parties involved (the debtor merchant and the creditors) would reach an acceptable settlement. However, instead of taking part in these negotiations, the bankrupt dallāls fled to Mīrzā Jawād’s house, requesting refuge (bast) there. As long as they lodged in the home of the mujtahid, their property and businesses would be safe from sanctions. Both the provincial governor (and heir apparent to the throne), Muẓaffar al-Dīn, and later the ṣadr aʿẓam, tried to persuade Mīrzā Jawād to cooperate, but he refused to advise the bankrupt debtors to enter into negotiations with the council and with the representatives of the creditors. Later, he raised theological arguments that undermined the sharʿī validity of the tujjār’s current practices regarding debt conversion (taqāṣṣ) and promissory notes (barāt).69 His ruling that some of these practices were not in conformity with Islamic law (ghayr-sharʿī) could have harmed many of the merchants and posed an uncomfortable challenge to the council, as it undermined the legality of its work. An even more serious development was Mīrzā Jawād’s incitement of madrasa students in Tabrīz against members of the council. Accounts of a clash between the ṭullāb and the tujjār in Muḥarram 1302/October-November 1884 are found in French, British, and Austrian sources. These accounts match the reconstruction of the Tabrīz events by Ādamīyat and Nāṭiq on the basis of documents deposited in Amīn al-Ḍarb’s archive, while providing several important additional details. Four dispatches, devoted in part to the subject under consideration, were written 68 Samuel Graham Wilson, Persian Life and Customs, 3rd ed. (New York, Fleming H. Revell, 1900): 204. Mīrzā Jawād attained the pinnacle of his power and influence in late 1891 and early 1892. At that time he led the opposition movement in Tabrīz to the tobacco concession. See Paton to R. J. Kennedy, Tabrīz, 15 August 1891, Inclosure no. 1 in Mr. R. J. Kennedy to the Marquis of Salisbury, no. 83 Gulahek, 3 September 1891, and R. J. Kennedy to the Marquis of Salisbury, no. 231 Confidential, Tehran, 30 October 1891, FO 539/54, NAUK; Mīhdī Bāmdād, “Jawād.” Sharḥ-i ḥāl-i rijāl-i Īrān dar qarn 12, 13, 14 hijrī (Tehran: Kitābfurūshī-yi Zawwār, 1345/1966): vol. 1: 296. 69 Ādamīyat and Nāṭiq, Afkār-i i jtimaʿī: 356–7. On the use of barāt by both foreign and local merchants, see Greenfield, Handelsrecht: 101. Cf. J. R. Preece, “Report on the Trade and Commerce of the Consular District of Ispahan for the Year 1896,” FO, DCR, AS 1953: 10–2.

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by the French consul in Tabrīz, E. Bernay, on 3, 5, and 6 November 1884.70 Bernay, a veteran French diplomat in Iran who knew Persian well, served first in Tehran and then in Tabrīz for many years.71 From his dispatches, corroborated by cables from the chairman of the merchants’ council in Tabrīz to Amīn al-Ḍarb, it becomes clear that on 7 Muḥarram 1302/27 October 1884, one of the ṭullāb who studied at a madrasa located near a caravanserai accosted Mīrzā ʿAlī Akbar Bāshī, a prominent Tabrīz merchant and a council member. According to Bernay’s report, the student shouted at ʿAlī Akbar Bāshī that “you [the merchants] want to abolish the Qur’ān; you are infidels!”72 Then the student, joined by other ṭullāb, attacked the merchant. Other merchants and workers at the caravanserai who heard the cries and the uproar hurried to the aid of ʿAlī Akbar Bāshī, who was wounded in the assault. The people of the caravanserai, who were armed, fell upon the madrasa students, who fled for their lives into nearby streets. Fearing the reaction of the tujjār and their retainers, some 200 or 300 madrasa students sought refuge in Mīrzā Jawād’s residence.73 Mīrzā Jawād, taking care not to associate himself directly with the violent event, sent the ṭullāb to the residence of the governor of the province (Āzarbāyjān) to lodge a complaint against the tujjār. Consul Bernay relates that the governor, Muẓaffar al-Dīn, received them with open arms and assured them that he would handle the affair.74 Whether Mīrzā Jawād actually encouraged the ṭullāb to injure the tujjār yet again is unknown. However, four days after the incident at 70 Bernay’s four reports are to be found in three state archives. The dispatches of the 3rd and 6th of November 1884 are located in the British National Archives. See E. Bernay to Ronald Thomson, Tauris, 3 November 1884, and same to same, Tauris, 6 November 1884, enclosures in Ronald Thomson to Lord Granville, draft, no. 173, Tehran, 27 November 1884, FO 248/411, NAUK. These dispatches were included, with a few omissions, in Ronald Thomson to the FO, Tehran, 27 November 1884, FO 60/461, NAUK. A somewhat different version of the first dispatch of the 3rd of November was sent by Bernay (possibly on his own initiative) to the Austro-Hungarian ambassador in Tehran, Baron von Kosjek. See von Kosjek to Kálnoky von Köröspatak, Politischer Gegenstand no. 26, Téhéran, 14 November 1884, Rapports de Téhéran 1884, Kt. 9, Berichte 1880– 1885, P. A. XXVIII Persien, HHStA. Bernay’s report of the 5th of November was directed to the French ambassador in Tehran. See E. Barnay to Jules Ferry, Tauris, 5 November 1884, Direction politique no. 5, Correspondance politique des consuls, Perse/Tauris, tome 3 (1882–1892), MAE. It seems that no copies of this report were sent either to the British or to the Austro-Hungarian embassies. The report of the 5th of November is the only document concerning the events in Tabrīz that was found in relevant files (volumes) in the archives of the French Ministry of Foreign Affairs. Notably, no reference to the Jawād-tujjār conflict is to be found in the reports of the Russian consul-general in Tabrīz, A. Petrov, and it seems that there is no mention of the tujjār councils in the files of the Russian Tehran Embassy, deposited in the Archive of Foreign Policy of the Russian Empire (Moscow). 71 Bernay served for several months in late 1884 as Britain’s acting consul-general in Tabrīz, replacing the British permanent consul-general there, William G. Abbott, who was granted an extended leave of absence. 72 Bernay to Thomson, Tauris, 3 November 1884: Ibid. 73 Ibid; von Kosjek to von Köröspatak, Téhéran, 14 November 1884: Ibid; Bernay to Ferry, Tauris, 5 November 1884: Ibid. See also Ādamīyat and Nāṭiq, Afkār-i ijtimaʿī: 358–9. 74 Bernay to Thomson, Tauris, 3 November 1884: Ibid.

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the caravanserai, on Saturday 12 Muḥarram/1 November, several ṭullāb entered the alleyways of the bazaar carrying arms, with the intent of attacking the merchants. The ṭullāb’s plan, however, was conveyed to the tujjār in time, and they were able to escape unhurt. Undeterred, the ṭullāb then went to the residence of the city governor, Amīr-i Niẓām, on 13 Muḥarram/2 November, demanding that he punish the merchants and their aides for beating them at the caravanserai. In an attempt to appease Mīrzā Jawād, the city governor decided to punish some of the men who had assaulted the ṭullāb. Summing up the episode, on 6 November 1884, Bernay wrote: “The clerics who wanted to abolish the merchants’ bureau [council] achieved their goal. This important institution has disappeared.”75 The “important institution,” however, did not disappear at precisely that time. Despite the violence, members of the merchant council resolved to continue with their work. Mīrzā Jawād and the ṭullāb, for their part, persisted in harassing and threatening them. Tension in the city rose again, and relations between the two sides reached the point of explosion. About two months after the first confrontation between the ṭullāb and the tujjār, on 6 Rabīʿ I 1302/24 December 1884, the chairman of the council in Tabrīz, Muḥammad Taqī Ṭabāṭabāʾī Nāẓim al-Tujjār, informed the chairman of the central council in Tehran, Amīn al-Ḍarb, that “the clerics do not agree to the establishment of the merchants’ council. Before new riots (fitna) break out, I resign. I shall not appear at the council [any longer].”76 When the Tabrīz council stopped functioning at the end of December 1884, its collapse created a domino effect, with other councils soon dispersing as well. Meanwhile, in Tehran, influential ministers, including the prime minister, who until then had not openly opposed the shah’s policy, now voiced their objection to the continued existence of the councils. By then, even though the central council in Tehran continued to function, the shah himself despaired of the chances that the initiative would succeed, or that the councils would overcome the harsh resistance of such strong local powers as the provincial governors and senior ʿulamāʾ. In Rabīʾ II or Jumādā I February or March 1885, some eight months after the orders to establish the councils had been issued, the shah nullified them. The initiative to create merchant councils in Iran was dead and buried.

Conclusion The establishment of the network of merchant councils in the commercial centers of Iran in the second half of 1884 was an exceptional development, not only in the history of Iran but in the entire Middle East of the nineteenth century. The economic and social ascendance of the tujjār on the one hand, and the shah’s fear that the central government was losing its grip on the provinces on the other, created 75 Bernay to Thomson, Tauris, 6 November 1884: Ibid. Cf. Bernay to Ferry, Tauris, 5 November 1884: Ibid. 76 Ādamīyat and Nāṭiq, Afkār-i ijtimāʿī: 361. Fitna in this context could also mean anarchy and widespread bloody clashes amongst the inhabitants of Tabrīz.

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the circumstances in which Nāṣir al-Dīn embraced the proposals of the most successful merchant-entrepreneur in Iran in the 1870s and 1880s, Amīn al-Ḍarb. The shah accepted his idea of allowing the big merchants to manage their commercial and financial affairs, and their other investments in Iran, in administrative bodies with certain legal powers that they themselves would establish and administer. The shah’s adoption of this initiative marked a far-reaching deviation from the dominant perceptions of government and state in Qajar Iran in two major respects. Firstly, the councils were not subject to the provincial or the central administration. Moreover, the authorities were obliged to follow decisions made by the majālis. Formally, the councils did not have to answer to anyone except the tujjār who had elected them. Undoubtedly, this was a departure from the prevailing administrative and governmental norms not only in Iran but in other Islamic societies as well. Secondly, the shah was ready to grant substantial power to a group of subjects who were not part of the ruling elite. The merchants were not of Qajar origin, nor from the landed/bureaucratic aristocracy, and were not connected to the leaders of the major tribes. The fact that a group of subjects without such pedigrees had been able to amass great fortunes in a relatively short time was deemed insufficient, by the norms prevailing in Iranian society, to join the power elite.77 The shah’s decision to support the tujjār involved weighty considerations. He probably assumed that he could increase the revenues of the central treasury and of his private purse by means of the councils. Beyond this, it appears that the shah, who evidently sensed that his position vis-à-vis the provincial governors was weakening, intended to increase his authority by creating an additional power group which, by its very existence, would serve to weaken the governors and the senior ʿulamāʾ. This intention was grasped early on by leading members of those two elite groups, and against this background they pondered how to frustrate the move. In just a few months they managed to succeed. The shah along with several ministers may well have believed that the tujjār could bring about a significant change in the Iranian economy, and that they were capable of introducing economic modernization. After other attempts to reform certain sections of the economy had failed, the shah appears to have tried to accomplish his goal by means of the local tujjār, thereby, at the same time, limiting foreign economic penetration, especially in the domain of investments in infrastructure. Until the late 1880s, opposition and even hostility to any comprehensive economic investment by foreign (European) entrepreneurs was ingrained not only in the shah and the tujjār but also in the senior ʿulamāʾ and most of the provincial governors. This was perhaps the only area of unanimity between the shah and the other elite groups. In their opposition to foreign investors the ʿulamāʾ were no less determined than the tujjār. Nevertheless, the ʿulamāʾ were unwilling to 77 A popular representation of the hierarchy of the three elite groups of Iranian society is given by ʿAbd al-Raḥīm Kalāntar Ḍarrabī, Taʾrīkh-i Kāshān, ed. Īraj Afshār (Tehran: Farhang-i Īrān Zamīn, 1341/1962): 242.

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allow the tujjār to build a power base of their own, because they believed that this would constitute an even greater threat to their own position than the infiltration of foreigners. This was also true for the provincial governors. Moreover, these entrenched elites were able to make effective use of the loosening control of the political center in the 1870s and 1880s for their own benefit, financial and other, and they were determined not to forego their growing power. The shah was thus caught in a vicious cycle. Against the background of the weakening of the central government, he adopted an extraordinary measure – the establishment of merchant councils – which, from his own point of view, could improve his position. However, he lacked the power to implement this reform, which therefore failed. Admittedly, Nāṣir al-Dīn faced a rare coalition of opponents, including leading ministers in the government and at the court, powerful governors, and influential ʿulamāʾ. By early 1885, the shah must have come to the conclusion that he was unable to overcome this opposition. Moreover, the tujjār themselves did not show the required determination or resilience. In much the same way as the collapse of the council at Tabrīz played a decisive role in the disintegration of the entire initiative, Mīrzā Jawād and his students must be largely held responsible for the failure of the councils. Moreover, because the abolition of the councils had far-reaching consequences, Mīrzā Jawād’s success must be considered as a significant event in the history of the power struggles between the ʿulamāʾ and the Qajar rulers. However, this conflict differed notably from other, well-documented challenges posed by the ʿulamāʾ to decisions by Qajar rulers, such as their struggles to cancel the Reuters concession, the tobacco monopoly, and the transfer of the customs administration to Belgian hands. In those cases, the ʿulamāʾ’s intention was to frustrate the growing involvement, influence, and control by European individuals and firms in Iran’s economy.78 By contrast, their fight in 1884–5 was against a move that held out the possibility of expanding the influence and power of Iranian subjects, namely the tujjār, who were in many respects close to the clerics themselves.79 When Nāṣir al-Dīn signed the order that brought about the formal abolition of the councils in the winter of 1885, he could not have anticipated that both he, and the tujjār as a group, would pay a heavy price for the failure of their joint initiative. The period of the latter 1880s was characterized by increasing pressure by European investors and entrepreneurs to operate in Iran, augmented by Russian and British demands to open the Iranian economy to economic activity by their subjects. Nāṣir al-Dīn had to face these pressures alone, as his relations with 78 See Algar, Religion: 266; Ann K. S. Lambton, “The Persian ‘Ulamā and Constitutional Reform.” In Le Shîʿism imamite, [ed. T. Fahd] (Paris: Presses Universitaires de France, 1970): 262–5; Ann K. S. Lambton, “The Tobacco Régie: Prelude to Revolution.” Studia Islamica 22 (1965): 131 ff.; Nikki R. Keddie, Religion and Rebellion in Iran: The Tobacco Protest of 1891–1892 (London: Frank Cass, 1966): 57, 65 ff.; Vanessa Martin, Islam and Modernism: 41, 47–9. 79 On the close though complex relationships between the tujjār and leading ‘ulamā see Lambton, “Persian ‘Ulama”: 251; Gad G. Gilbar, “The Muslim Big Merchant-Entrepreneurs of the Middle East, 1860–1914.” Die Welt des Islams 43 (2003): 20, n. 40. See Chapter 1 in this volume.

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influential governors and ʿulamāʾ remained strained. Ultimately, he was unable to muster sufficient strength to repel these external pressures, especially those concerning the opening of the Kārūn River to international navigation. On 24 Ṣafar 1306/30 October 1888, an official circular announced the opening of the river to “commercial steamers of all nations.”80 This decision marked a watershed in Nāṣir al-Dīn’s relations with foreign investors on the one hand, and with the local tujjār on the other. He had come to terms with the fact that he was no longer strong enough to prevent massive economic penetration by Europeans into the Iranian economy. Most of the concessions did not directly harm the tujjār, but there was one exception, namely the tobacco monopoly granted in March 1890. This measure opened a deep and ill-fated rift between Nāṣir al-Dīn and the big merchants, with the shah’s obduracy in upholding the concession eventually prompting the tujjār to challenge his authority.81 The time that elapsed between the tobacco protest of 1891–2 and the constitutional revolution of 1906 witnessed a further deterioration in the tujjār’s relations with the central government. From a sector supported by and supportive of the central government, the big merchants shifted to become a group that sought to limit the power and influence of the Qajar ruler, and in this aim they found the ʿulamāʾ to be enthusiastic allies.

80 For the English text of the circular that declared the opening of the Kārūn, see The Persian Minister for Foreign Affairs to Sir H. Drummond Wolff (translation), [Tehran] 30 October 1888, Inclosure no. 1 in no. 122, H. Drummond Wolff to the Marquis of Salisbury, Tehran, 31 October 1888, FO 539/40, NAUK. 81 Muḥammad Ḥasan Khān Iʿtimād al-Salṭana, Khalṣa mashhūr bī khwābnāma, ed. M. Katirāʾī (Tehran: Kitābkhāna-i Ṭahūrī 1348/1969): 122–5. For the central role that the tujjār played in the events that led to the tobacco boycott, see Gad G. Gilbar, “The Big Merchants (tujjār) and the Persian Constitutional Revolution of 1906.” Asian and African Studies 11 (1976–7): 290; See Chapter 12 in this volume. Mansoor Moaddel, “Shiʿi Political Discourse and Class Mobilization in the Tobacco Movement of 1890–1892.” Sociological Forum 7 (1992): 459; Humā Nāṭiq, Bāzargānān dar dādwa-sitad ba Bānk-i Shāhī wa-rijī-yi tanbākū (Paris: Intishārāt-i Khāwarān, 1371/1992): 175.

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I On 8 Jumādī II 1324/30 July 1906 the committee of the bastīs, numbering 12,000 or 14,000, encamped in the grounds of the British legation in Tehran, sent an ultimatum to Muẓaffar al-Dīn Shāh (1896–1907) that they would not return to their homes or resume their work until a constitution (qānūn-i asāsi) and a national consultative assembly (maḏjlis-i shawrā-yi millī) were granted. This brought three long and complex developments to their climax. These were concerned with (i) the spread of liberal thought in Persia; (ii) the revolt of the majority of the religious classes against both the increasing encroachment of European customs, patterns and institutions upon the Persian Islamic community, and the growing political interference of European Powers in Persia’s internal affairs; and (iii) the growing opposition of the Persian trading community in general and the big merchants (tujjār) in particular to the central government’s fiscal policy which threatened to weaken their economic power and diminish their wealth greatly. The first two developments, which played a significant role in the formation of the constitutional movement, have already been subject to extensive research. Hence, only certain points which are of major significance in the context of this study will be mentioned.1 1 For a detailed description and analysis of the various aspects of these two developments, see the following works: Ann K.S. Lambton, ‘Dustūr, iv. – Īran’, EI 2nd ed., vol. 2, pp. 649–51; idem, ‘Djam’iyya. (iii) -Persia’, EI 2nd ed., vol. 2, pp. 433–34; idem, ‘Ḥukūma, ii. – Persia’, EI 2nd ed., vol. 2, pp. 554–36; idem, ‘Secret societies and the Persian Revolution of 1905–6’, St. Antony’s Papers, no. 4, Middle Eastern Affairs, no. 1, London, 1958, pp. 43–60; idem, ‘The Persian ‘Ulamā and Constitutional Reform’ in Le Shî’isme Imâmite, Paris, 1970, pp. 245–69; idem, ‘The Tobacco Regie: Prelude to Revolution’, Studia Islamica, vol. 22, 1965, pp. 119–57; vol. 23, 1965, pp. 71–90; idem, Islamic society in Persia, School of Oriental and African Studies, London, 1954, pp. 28–29; idem, ‘Persia: The Breakdown of Society’ in P.M. Holt, Ann K.S. Lambton and Bernard Lewis (eds.), The Cambridge History of Islam, vol. I, The central Islamic lands, Cambridge, 1970, pp. 459–67; idem, ‘The Persian Constitutional Revolution of 1905–6’, in P.J. Vatikiotis (ed.), Revolution in the Middle East and other case studies, London, 1972, pp. 175–82. Of the many Persian works, see particularly Mihdī Malikzāda, Tārīkh-i inqilāb-i mashrūṭiyyat-i Īrān, vol. 1, Tehrān, 1328 and Nāẓim al-Islām Kirmānī, Tārīkh-i bīdārī-yi Īrānīyān, Tehrān, 1332/1953. See also Nikki R. Keddie, Religion and rebellion in Iran, the Tobacco Protest of 1891/1892, London, 1966; idem,

DOI: 10.4324/9781003177425-15

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Western liberal political ideas and methods began to be advocated in Persia early in the reign of Nāṣir al-Dīn Shāh (1848–96). For the first time the practice of absolute government was questioned, and the separation of the executive from the legislature, in the spirit of the political philosophy of Montesquieu, was advocated. From the early 1880s various Persian liberals placed strong emphasis in their writings on the need to formulate a code of laws which would guarantee equality to all citizens and to which government officials should be subject. In the early 1890s Mīrzā Malkum Khān, and for some time also Jamāl al-Dīn Afghānī (Asadābādī), propagated in the Persian paper, Qānūn (published in London), and in other publications the idea that a constitutional regime with a national consultative assembly should be established in Persia. The growth of liberal ideas among Persian intellectuals was due more to an awakening of nationalist feelings than mere enthusiasm for Western liberal philosophy. It was the military strength and material achievements of European countries, particularly those with established constitutional systems of government, rather than the personal freedom the individual enjoyed, which was envied and which produced the climate of opinion in which Western liberal ideas spread. At the turn of the century, direct Western interference in the country’s internal affairs was growing. This was partly the result of increasing misgovernment and arbitrary rule on the part of the Shāh and his cabinet. This in turn led to wider support for liberal ideas, which had previously been largely confined to a tiny group of intellectuals, most of whom lived abroad. This trend found political expression in the formation of secret or semi-secret societies, later known as anjumanhā-yi millī (popular or nationalist societies), which became the main political focus for those advocating reform in the country’s political system. In their formative phase, during the last years of Nāṣir al-Dīn’s reign, the anjumans confined their activities to general discussions on the desirability of liberating the people from absolute government, the benefits of introducing justice to the country and similar topics. After the assassination of Nāṣir al-Dīn (18 Dhū’lQa’da 1313/1 May 1896) the secret societies intensified their activities, and their members started advocating reform more openly. Emphasis was placed on the importance of encouraging modern education, which was considered the major means of awakening the people to the benefits of freedom, and of arousing their opposition to despotism. The anjumans did not, however, begin to formulate their final aims in concrete political terms until 1903–4. At a meeting of various secret groups held on 12 Rabī’ I 1322/28 May 1904 all those present agreed to take an oath on the Qur’ān that they would strive for the establishment of a code of laws and the rule of justice in the country. About a year later, on 2 Muharram 1323/9 ‘The roots of the ulama’s power in modern Iran’, Studia Islamica, vol. 29, 1969, p. 50; idem, ‘Religion and irreligion in early Iranian nationalism’, Comparative Studies in Society and History, vol. 4, 1962, pp. 265–95; idem, ‘Iranian politics 1900–1905: background to revolution’, Middle Eastern Studies, vol. 5 (1969), pp. 3–31, 151–67, 234–50; Hamid Algar, Religion and state in Iran 1785–1906, Berkeley and Los Angeles, 1969, pp. 240–56.

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March 1905, at a gathering of the Anjuman-i Makhfī (the Secret Society), which in the following months was to become one of the most influential secret societies, the demand for the codification of the law was again put forward. The Society’s political programme also included some details as to the nature of the code it envisaged. The duties of cabinet ministers were to be determined; limits to the authority and powers of the provincial governors were to be set; and the rights of all citizens, Muslims and non-Muslims, Persians and foreigners, were to be protected. Two months later the Anjuman-i Makhfī decided to express its demands openly. On 3 Rabī’ I 1323/8 May 1905 the Society published a public address to the prime minister, the Atābak ‘Ayn al-Dawla, which included the demand for a formulation of a code of laws and for the establishment of a Ministry of Justice. Thus, for the first time such demands were expressed in Persia openly and definitely. There is no evidence in published works that during the period which followed this address to the Atābak and which ended with the bast in the British legation in Qulhak, that this demand was repeated openly inside Persia or that any new or additional demand was openly made to reform the political system. Moreover, there is no evidence that until July 1906 any political organization or group, whether secret or not, included in its written programme for reform any more radical changes than those expressed by the Anjuman-i Makhfī. It is, however, known that copies of Malkum Khān’s essays, in which the establishment of a constitutional monarchy was advocated, and various European and Persian papers (published outside the country) were circulated, read and discussed by members of the secret societies as well as by other Persians. It is also asserted that these ideas strongly influenced many of those who wished to see political reforms in the country. An explanation of the fact that the demand for the establishment of a constitutional régime was not voiced until the summer of 1906 is probably to be sought in the character of the membership of the anjumans – the predominance of the ‘ulamā’ and the artisans – and the minor impact of Western political ideas on society at large. Western political ideas and concepts came to Persia through various channels: direct contact through diplomacy, travel, commerce and education, and indirect contact through translations of Western books and newspapers, and through the new educational institutions established in Persia, in which ‘European sciences’ were taught. But as the scope and extent of these contacts were very limited until the beginning of the twentieth century the number of Persians who were influenced by Western political thought remained very small. And unlike other Islamic countries in the Middle East which were in closer contact with the West, no distinct and defined social group which regarded political reform according to Western models as its primary political object emerged in Persia. The result was that those who advocated liberal reforms were constrained not only to avoid alienating the traditional political forces, the religious classes, but also to create a basis for political cooperation with them. By formulating their demands and programmes in Islamic terms and by not advocating reforms of too radical a nature, such as 227

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the establishment of a constitutional regime, the liberal intellectuals managed to mobilize the support of many ‘ulamā’ for a modified programme of reform, as expressed by the secret societies.

II While contact with the West was on the one hand fostering liberal thought in Persia, on the other hand it was giving rise to a contrary movement which demanded the restoration of the true government of Islam, and a reassertion of the political power of the ‘ulamā’. Reforms based simply on Western models and practices aroused strong opposition among the great majority of the ‘ulamā’ and were rejected outright by many. The military reform of ‘Abbās Mīrzā – the creation of the niẓām-i jadīd – at the outset of the nineteenth century, although clearly aimed at the strengthening of the country’s military power vis-à-vis the northern Christian enemy, Russia, were met even then by the opposition of many of the leading ‘ulamā’. In the 1840s the attempts of Ḥajjī Mīrzā Aqāsī and later of Mīrzā Taqī Khān Amīr Kabīr to reform the legal system aroused even greater opposition on the part of the religious classes. Later there was opposition to the introduction of Westernized educational institutions, the adoption of certain European fashions which had become popular with the ruling class, the construction of the telegraph and railways, and various other Western innovations. From the early 1870s, simultaneously with the growing process of Westernization, there was increasing European intervention in the internal affairs of the country. Prior to this the ‘ulamā’’s opposition to the introduction of Western institutions and practices had primarily had a religious basis: the Islamic way of life was seen to be threatened by the new trends. It was only later that the preservation of the country’s political independence became the main concern of the ‘ulamā’. The policy of Nāṣir al-Dīn’s and his successor Muẓaffar al-Dīn while making possible the development of certain economic resources of the country, also brought about increasing interference by Europeans in the daily economic activities of the Persian community. As a result, the ‘ulamā’ felt that it was not only the Islamic way of life which was in danger, but they believed the granting of concessions to foreigners to be tantamount to selling out the country to infidels, and certain to lead sooner or later to the subjection of the Muslim community in Persia to foreign rule. Thus their opposition to Westernization and the encroachment of foreigners developed into open and bitter strife with the régime. During the thirty odd years prior to ‘the great exodus’ (hijrat-i kubrā) of Jumādī II 1324/July 1906, the conflict came to a head on three occasions: (i) the granting of what came to be known as the Reuter concession in 1872–3, (ii) the granting of the tobacco concession in 1890–2 and (iii) in the years 1899–1906 consequent upon the reform of the customs administration and regulations and the loans from Russia and Great Britain. 228

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Several additional factors contributed to the ‘ulamā’’s hostile attitude towards the régime. On ideological grounds they regarded with distaste the measures taken by the State to strengthen the control of the central government. Ithnā ‘asharī theory held that the mujtahidīn were the only true representatives of the hidden Imām on earth. The Qajars could not claim, in order to legitimize their rule, that they were descended from the Imāms, as had the Ṣafawids. Hence their rule was regarded by the ‘ulamā’ as an illegitimate usurpation of power. In these circumstances they expected that the Qajars would, at least, be ready to follow their spiritual guidance, or in the words of Mīrzā Ḥasan Shīrāzī: ‘to see the Kings at the gates of the ‘ulamā’.2 Any steps aimed at strengthening the State, whose rulers did not follow the guidance of the representatives of the source of power, were therefore regarded by the ‘ulamā’ as the strengthening of an illegitimate and unjust government. Finally, when the conflict between the government and the ‘ulamā’ deepened after the granting of the tobacco concession, and the government took severe measures against some of the religious leaders, the latter, who were always regarded and treated with great respect by almost all sections of society, including the ruling class, accused the government of being increasingly unjust, arbitrary and despotic. By the beginning of the twentieth century, as a result of these various developments, the majority of the ‘ulamā’ and the mullās in the major towns were not only strongly hostile to the regime, but were also becoming open to moderate suggestions aimed at the reform of the political system of the country. But the political response of the ‘ulamā’ was not accompanied by any reform in political thinking. No new ideas on how to cope with the new political, social and cultural conditions evolved. There was not even a strong call to rely on the Qur’ān and the sharī’a. They merely demanded just rule and expressed their opposition to arbitrary government, but they did not formulate any programme to secure and maintain the establishment of a just or righteous régime. From the beginning of their confrontation with the government, the ‘ulamā’ directed their efforts toward the repeal of certain governmental acts and the dismissal of those officials and ministers whom they held responsible for these deeds. Even the approximately seven years (1899–1906) of unavailing struggle to force the government to give up its policy of reforming the fiscal administration through the employment of foreigners and the complete failure to prevent the Shāh from taking foreign loans did not lead to the formulation of any concrete suggestions that, just rule could be permanently established. Nor did the emergence of Western ideas concerning the reform of governmental methods stimulate the ‘ulamā’ to formulate their own programme until December 1905. 2 This is a quotation from a ḥadīth which reads: ‘If you see the ‘ulamā’ at the gates of the Kings, say, they are bad ‘ulamā’ and bad Kings. [But] if you see the Kings at the gates of the ‘ulamā’ say they are good ‘ulamā’ and good Kings.’ Quoted in Muḥammad Ḥusayn Ādamiyyat, Dānishmandān wa sukhansarāyan-i Fārs, Tehran, 1338/1959, vol. 4. p. 324, and in Algar, Religion, p. 22.

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Only in the last phase of their conflict with the government before the granting of the constitution (December 1905–July 1906) does one find in the ‘ulamā’’s ad hoc demands mention of the establishment of an ‘adālat khāna (house of justice). However, it is not clear whether this demand was incorporated in the ‘ulamā’’s ‘list of reforms’ on their own initiative, or whether most of them even knew about it or had consented to its inclusion.3 Moreover, the ‘ulamā’ did not clarify what in fact they meant by their demand for an ‘adālat khāna. There are no details as to how they visualized the nature of this institution, and it is doubtful whether they gave any deep thought to this question. But it is clear that the ‘adālat khāna was not intended to become a representative assembly, and that until August 1906 the ‘ulamā’ as a body did not demand a constitution and a majlis, nor advocate the establishment of such institutions before the constitution was in fact granted. This was apparently the main reason why the liberals in the secret societies, many members of which were ‘ulamā’, did not insist on including the demand for the establishment of a constitutional régime in the societies’ political programme. Neither liberal ideas, which had been spreading in Persia in the second half of the nineteenth century nor the opposition of the ‘ulamā’ to the government which had been growing in the same period, were by themselves sufficient to generate a strong movement for constitutional reform. Meanwhile, however, pressure for reform was building up in other quarters also, and an examination of the relations between the central government and the big merchants (tujjār) and the latter’s attitude towards the government’s fiscal policy during the two decades prior to the outbreak of the revolution will show how these various groups joined forces so that the movement for reform finally became articulate in 1906.

III Up to the late 1880s close cooperation had existed between the central government and many of the big merchants. This was based on an understanding which had grown during the second half of the nineteenth century. The government, which had neither the interest nor the ability to play a major role in the country’s economy,4 gave almost complete freedom to the big merchants in their economic

3 Nāẓim al-Islām Kirmānī states that the ‘ulamā’ had intended to incorporate the demand for the establishment of an adālat khāna in their petition to Muẓaffar al-Dīn Shāh. formulated during their bast at Shah ‘Abd al-’Aẓīm in December 1905 but that they in fact forgot to include it. Also Yaḥyā Dawlatābādī claims that the ‘ulamā’’s list of demands did not include the establishment of an adālat khāna, and he adds that it was he who inserted it. See Kirmānī, Tārīkh-i bīdārī-yi Īrānīyān, pp. 297– 98; Yaḥyā Dawlatābādī, Tārīkh-i mu’āṣir yā havāt-i Yaḥyā, vol. 2, Tehrān, n.d., pp. 21–23. 4 Mihdī Malikzāda, Tārīkh-i inqilāb-i mashrūṭiyyat-i Īrān, vol. 1, 172. For specific examples showing the indifference or the incompetence of the central government with regard to economic affairs, see ‘Report by Mr. Consul [William G.] Abbott on the Trade and Resources of the Province of Gilan for the Year 1865’, PP, A&P 67 (1867), p. 110; ‘Report by Mr. Acting-Consul Henry H. Ongley on the Trade and Commerce of Ghilan for the Year 1866’, PP, A&P 68 (1867–8), p. 300; ‘Report upon the Trade and Resources of the Province of Ghilan for the Year 1869’ by William G. Abbott,

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activities, making no effective attempt to interfere with their economic enterprises. The property of the big merchants, generally speaking, remained intact.5 So far as its fiscal demands were concerned, the central government gave special treatment to the merchant classes in general and the big merchants in particular. The latter did not pay any direct taxes on income deriving from commercial or banking activity,6 while the customs duties levied on the goods they imported and exported were very low.7 Until the late 1880s the government did not encourage expansion in the activities of foreign trading-firms. The latter were not allowed to purchase land; they were liable to higher customs duties than local merchants, and were not, in fact, exempted from internal duties, such as octroi and rāhdārī.8 In return for this freedom of action, the big merchants had by custom to give a share of their profits to the ruling classes. Presents (pīshkash) were made in various forms both to the Shāh and the court, and to high officials in the central as well as in the provincial administration. The giving of pīshkash was not a novelty. From Ṣafawid times onwards, if not before, the making of pīshkash on occasions such as the new year (nawrūz) or when the Shāh visited the residence or the business

5 6

7

8

PP, A&P 65 (1871), pp. 235–36; ‘Report by Consul [William G.) Abbott [on the Trade and Commerce of  ] Resht’, 20 August 1872, PP, A&P, 67 (1873), pp. 362–63; Ḥabl al-Matīn (Calcutta) 19 June 1905: Ḍiyā al-Dīn Ṣadrzāda, Ṣādirāt-i Īrān, Tehran, 1346/1927–8, pp. 8–9; George N. Curzon, Persia and the Persian Question, vol. 2, London, 1892, p. 499. See, for example, Jakob E. Polak, Persien: Das Land und seine Bewohner, Ethnographische Schilderungen, vol. 2, Leipzig, 1865, p. 186. Comte A. de Gobineau, Trois ans en Asie de 1855 à 1858, Paris, 1859, p. 394; Heinrich Brugsch, lm Lande der Sonne, Wanderungen in Persien. Berlin, 1886, p. 239; Ann K.S. Lambton, ‘Ḍarība, (5) -Persia’, EI 2nd ed., vol. 2. pp. 151–52. Consul Preece writes: ‘The custom duties supposed to be payable for imports and exports alike at the port of entry are very various for Persians; they do not pay ad valorem either for imports or exports, but so much per package, which varies on articles of different character but not according to the value. There is a certain amount levied per package at Bushire and a further sum per package payable in Shiraz, lspahan, & c . . . a 5 per cent all around duty . . . would be against the native merchants of Bushire, Shiraz, Kermanshah, & c. . . . A few cases which I quote will show more clearly how this system of charges helps the Persian merchant. The Persian duty on indigo in Bushire is 12 krans; in Shiraz 20 krans; and in Ispahan 40 krans: equals 72 krans per package, but importers pay only 50 krans actually. Therefore, indigo imported for sale in Bushire by Persians pays 1/3 per cent duty; for sale in Shiraz not quite 1 per cent duty; and for sale in lspahan, say 1 1/4 per cent duty. If imported by Europeans for sale, whether in Bushire, Shiraz, or lspahan, 5 per cent duty has to be paid.’ See Consul [John R.] Preece. ‘Report on the Trade of the Consular District of lspahan for the years 1897–98 and 1898–99’, FO, DCR, AS 2260 (1899), pp. 11–12. William G. Abbott to C. Alison, Resht, 7 December 1870, enclosure no. 2 in C. Alison to the Earl of Granville, no. 3, Tehran, 2 January 1871, FO 60/333, NAUK; C. Alison to the Earl of Granville, Gulahek, 8 August 1871, FO 60/337, NAUK; Henry Jones to the Secretary of State, Tabris, 9 July 1871, FO 60/338, NAUK; ‘Revision of Commercial Treaty with Persia’, Gl, FDP, Political, nos. 50–56. February 1877, P/1034, IOR; Report by Consul-General [Henry M.] Jones [on the Trade of Tabrīz], Tabreez, PP, A&P 67 (1873), pp. 374–76; ‘Report by Consul-General [E.C.] Ross, on the Trade and Commerce of the Persian Gulf for the year I879’, PP, A&P 75 (1880), pp. 1732–33; J.G. Lorimer, Gazetteer of the Persian Gulf, ‘Omān. and Central Arabia, vol. 1. Historical, Pt. 2, Calcutta, 1915, p. 2596, note.

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premises of a wealthy merchant or a high official was expected.9 Such presents were in fact an obligation, and can be regarded as a form of taxation. What stands out during the second half of the nineteenth century is the greater frequency with which money was transferred in this way from individuals to the Shāh’s private treasury and to high officials, and the larger amounts involved.10 But as the incomes of the big merchants increased at a high rate during the last decades of the century they appear to have accepted the situation. The government also expected the big merchants to support it when it was confronted by opposition from other sections of the population or foreigners. Perhaps the best example to illustrate this is the almost complete failure of the merchants to support campaigns of the ‘ulamā’ against the various attempts at educational and judicial reform taken by the central government during the early 1850s11 and early 1870s12 which were bound to weaken the economic power and social influence of the religious classes. Further, in the events which led to the abolition of the Reuter Concession in 1873, the merchants as a body took no part.13 Also when foreigners pressed the government to invest capital in developing the country’s transportation system, the big merchants did not add their voice to this demand, although such an improvement was greatly in their interest. It seems that the big merchants clearly understood that the nature of the relations which developed between them and the government did not go together with demands for greater governmental activity in the economic field. Increased public expenditure was bound to result in enlarged fiscal demands on those sectors 9 See, for example, Tadhkirat al-Mulūk, translated and explained by Y. Minorsky, London & Leyden, 1943, p. 61; E[ward) B. E[astwick), ‘Persia’, EB 8th ed., vol. 17, p. 428. 10 See, for example, H.L. Rabino di Borgomale, Coins, medals, and seals of the Shâhs of Îrân, 1500– 1941, n.pb., 1945, p. 19; ‘Ma’dan’, GP, Simla, 1910, vol. 1, p. 503. The Times (London) published the following news item on 18 September 1875: ‘A Teheran correspondent, writing on the 13th of July, says: on the 16th ult. Mirza Hussein Khan had the honour of entertaining the Shah at his house for a whole day. His Majesty breakfasted there, and received many presents, £12,000 in cash for himself and jewels and 100 Cashmir shawls for his ladies. The entertainment cost Hussein Khan £20.000. The Shah never visits anyone without expecting to receive presents’. In a letter to the editor of The Times, G(eorge) S(tevens?), writes: ‘Having lived in Persia many years, and being familiar with the customs of the Court and the people . . . I am sorry to say that the Shah’s expectation of costly presents from those wealthy subjects whom he visits is . . . true. His Majesty, with a view to augment his private exchequer from Royal visits, keeps private diplomatic agents to work among rich citizens to encourage them to avail themselves of the honour of a Royal visit, so that the Shah’s purse may be refreshed’. The Times (London), 20 September 1875. 11 Firīdūn Ādamiyyat, Amīr Kabīr wa Īrān, Tehrān, 1334/1955, pp. 133–34, 136; ‘Abbās Iqbāl, Mīrzā Taqī Khān Amīr Kabīr, Tehrān, 1340/1961, pp. 168–69; Lady M. Sheil, Glimpses of life and manners in Persia, London. 1856. p. 166. 12 Maḥmud Farhād Mu’tamid, Tārīkh-i siyāsī-i dawra-i ṣadārat-i Mīrzā Ḥusayn Khān Mushīr alDawla Sipahsālār-i Aẓam, Tehrān, 1326/1947, p. 38; Mīrzā Muḥammad Ḥasan Khān I’timād al-Salṭana [Sanī al-Dawla], Mir’āt al-buldān-i Nāṣirī, vol. 3. Tehrān, 1297/1880, pp. 6–9; ‘Abd Allah Mustawfī, Tārīkh-i ijtimā’ī wa idārī-yi dawra-yi Qajāriyya, ya sharḥ-i zindaganī-yi man, vol. 1, Tehrān, 1326/1947, p. 115. 13 Sir Henry Rawlinson, England and Russia in the East, London, 1875, pp. 133–44; Mu’tamid, pp. 184, 189.

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of the population which had previously contributed very little to the state revenue. Moreover, if the government were to become more enterprising, the freedom of action of private enterprise was likely to be curtailed. The relationship between the government and the big merchants was manifested in a certain delegation of power to the big merchants. This development is connected with the changes in the position of the office of malik al-tujjār. This office existed at least as early as Ṣafawid times,14 but it is not clear precisely what his functions were at that period, how he was nominated, or to what extent the office existed in the various commercial centres of the country. It is, however, obvious that in the first half of the nineteenth century there was not a malik al-tujjār in all major towns. A farmān issued by Muḥammad Shāh (1834–48) in Jumādī I I260/ May-June 1844 ordered, inter alia, that Since from the transaction of mercantile affairs a (Mulikoot-Toojjar) or chief of merchants is in every place necessary, accordingly the Ministers of the Persian Government will appoint a Mulikoot-Toojjar in every place in Persia where extended commerce is carried on . . .15 By the second half of the nineteenth century big merchants acting as malik al-tujjār were to be found in most major commercial centres.16 In Nāsir al-Dīn’s reign the malik al-tujjār of Tehran was officially recognized as the superior malik al-tujjār of the country, and received the title malik al-tujjār al-mamālik.17 It seems that the prominent merchants of each main town chose one of their ranks and recommended his name to the authorities, which would then nominate him to that office.18 It would appear that the office almost always fell into the hands of one of the most prominent and wealthy merchants of any given commercial centre,19

14 J. Chardin. Journal de voyages du Chevalier Chardin, en Perse et autres lieux de l’Orient . . ., ed. L. Langlès, Paris, 1811, vol. 5, p. 262. 15 See ‘Firman relating to bankruptcies, issued by the Persian Government for the protection of British merchants . . . ’, U.K., Lewis Hertslet (ed.), A Complete collection of the treaties and conventions . . . between Great Britain and Foreign Powers, vol. 9, London, 1856, p. 614, par. 18. 16 I’timād al-Salṭana, Mir’āt, vol. 2, p. 270, vol. 3, pp. 2, 4–5, 25, 33, 120; Ḥajjī Mīrzā Ḥasan Fasā’ī, Fārs nāma-i Naṣirī, lith., Tehrān, 1313/1895–6, vol. 1, pp. 308–9, vol. 2, p. 205; Tehrān, no. 486, 2 Ramaḍān 1277/14 March 1861 and 16 Dhū’l-Ḥijja 1280/2 June 1864; Aḥmad ‘Alī Khān Wazīrī, Jughrāfiyā-yi Kirmān. ed. Bāstānī Pārīzī, Tehrān, 1346/1967, pp. 67, 159; Polak, vol. 2, p. 188; Edward G. Browne, A Year amongst the Persians, London, 1893, p. 372. 17 Mīrzā Muḥammad Ḥasan Khān I’timād al-Salṭana [Sanī al-Dawla], Tārīkh-i muntaẓam-i Nāṣirī, lith., Tehrān, 1300/1883, vol. 3, p. 231; Rūznāma-i Dawlat-i ‘Aliyya-i Īrān, no. 642, 16 Rabī’ I 1287/16 June 1870. 18 Polak, vol. 1, p. 188; Rūznāma-i Dawlat-i ‘Aliyya-i Īrān, no. 486, 2 Ramaḍān 1277/14 March 1861; 26 Dhū’l-Ḥijja 1280/2 June 1864. 19 Dr. [Jean-Baptiste) Feuvrier, Trois ans à la Cour de Perse, Paris, 1906, p. 284; Lorimer, Persian Gulf, vol. 1, pt. 2, p. 2618; ‘Ma’dan’, GP, Simla, 1910, vol. 1, pp. 497–98, 502–3; ‘Shīrāz’, GP, Simla, 1910, vol. 3, p. 852; James Greenfield, Die Verfassung des persischen Staates, Berlin, 1904, p. 143.

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and that a strong hereditary tendency developed in the holders of the office.20 The malik al-tujjār was not a government official. He did not receive any payment for holding the office, nor was he officially a member of any government department. He had two main functions: (i) he was the merchants’ representative, or better, the link between the trading community of a given town and the authorities; and (ii) he was entrusted with authority to settle disputes between the Persian merchants themselves and between local and foreign merchants.21 It was the latter function, especially insofar as it concerned the claims of foreign merchants in cases of the bankruptcies of Persian merchants, that provoked the issue of Muḥammad Shāh’s farmān ordering the appointment of a malik al-tujjār in all the commercial centres of the country. Nāṣir al-Dīn Shāh extended the functions of the malik al-tujjār to include, in collaboration with the provincial official in charge of trade and commerce (ra’īs tujjārat),22 the encouragement of commercial activity in particular and of the economy of the country in general.23 In Tehrān the malik al-tujjār was consulted by the government on commercial and various other economic issues. He was asked by Nāṣir al-Dīn to form a council of the prominent merchants of the capital which would hold regular meetings, in which the question of developing and encouraging trade and commerce and apparently also public finance should be discussed, and the results of its deliberations communicated to the government.24

IV The economic developments of the 1870s and 1880s which changed the distribution of wealth in Persian society, especially in regard to the public sector as against the private sector, were bound to change the relationship which had existed between the government and the big merchants. While the central government found itself faced with growing fiscal difficulties the private sector, particularly the big merchants, became wealthier. However, the scope of the assistance the latter were prepared to give the government in its financial position was no longer adequate in the new circumstances. As all attempts to reform the fiscal 20 Rūznāma-i Dawlat-i ‘Aliyya-i Īrān, no. 642, 16 Rabī’ I 1287/16 June 1870. 21 Polak, vol. 2, p. 188; J.M. de Rochechouart, Souvenir d’un voyage en Perse, Paris, 1867, p. 176; Greenfield, p. 143. Houtum-Schindler writes: ‘For commercial cases, not paying a bill in time, bankruptcies, & c., a kind of jurisdiction is exercised by the Minister of Commerce, or a board of merchants, but the decisions of the minister, or those of the board, are rarely final. In Teherán the board of merchants is presided over by the malik ut tujjár, “King of Merchants”, in the provincial cities by a person called malik amīn, and muīn of merchants’. See Houtum-Schindler, ‘Persia, I. Geography and statistics’, EB 10th ed., vol. 31, p. 619; idem, ‘Persia (Geography & statistics)’, EB 11th ed., vol. 21, p. 201. 22 According to Hyacinth L. Rabino the ra’īs tujjārat was a member of the provincial dīwān. See ‘Report on the Trade and General Condition of the City and Province of Kermanshah, by Mr. H.L. Rabino . . .’, 1903, FO, DCR, MS 590 (1903), pp. 11–12; idem, Gazetteer of Kermanshah, Simla, 1907, p. 202. 23 Greenfield, p. 143. 24 I’timād al-Salṭana, Tārīkh, vol. 3, p. 231.

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administration and to bring about a substantial increase in the revenue from the land taxes had failed,25 the central government sought other means. On 16 Rajab 1307/8 March 1890 a monopoly of the domestic as well as the foreign trade of tobacco and control over its production was granted for fifty years to a British subject, Major Gerald F. Talbot. In return the central treasury was to receive £15,000 per annum and 25 per cent of the net profits after the deduction by the concessionaires of a dividend of 5 per cent on their capital (arts. 1 and 3).26 This development completely changed the conditions in which the merchant classes had been accustomed to operate. The economic position of four groups of merchants was adversely affected by the granting of this concession. The first group consisted of thousands of retail tobacco dealers who according to the terms of the concession were not allowed to buy tobacco directly from the cultivators or from the wholesale merchants, as they had always done, but were obliged to purchase it from the Régie at whatever price it fixed (art. 2). The inevitable outcome of the abolition of unrestricted trade would have been a rise in the wholesale price of this commodity and consequently a probable reduction in the net profit of the retail dealer. The second group were the wholesale tobacco merchants and exporters. This group would have suffered the severest blow of all had the Régie exercised its monopolistic rights, as no Persian merchant would have been allowed to purchase tobacco directly from the cultivators or to export it (art. 5). Thus, the wholesale tobacco merchants and exporters would have found themselves completely out of business. The two other groups were merchants and other entrepreneurs who had invested money in the cultivation of tobacco or in its processing. In both cases they would have been bound by the purchase and sale prices as fixed by the Régie. It was quite natural, therefore, that these merchants should be concerned that the establishment of the Régie would result in a loss of income. Finally, merchants who had financed the cultivation of tobacco had misgivings about the Régie’s intention to furnish all the financial facilities which the cultivators might need (art. 11). Merchants who did not trade in tobacco were not directly affected by the establishment of the 25 Naṣir al-Dīn Shāh made during the 1870s and 1880s several attempts to reform the fiscal administration and the collection of direct taxes. The first of these attempts was carried out in 1875–6, then in 1878, in 1885–6 and in 1889–90. For details, see William G. Abbott to W[ilia]m Taylour Thomson, no. 8, Resht, 31 March 1875, enclosure no. 2, in William G. Abbott to the Earl of Derby, no. 6. Resht, 6 April 1875, FO 60/374, NAUK; Mīrzā Ḥasan Fasā’ī, vol. 1, p. 337; ‘Report by Consul [Henry Adrian] Churchill on the Trade and Commerce of the Province of Ghilan for the Year 1878’, PP, A&P 70 (1878–9), pp. 473–74; Ann K.S. Lambton, Landlord and peasant in Persia, London, 1953, pp. 167–70. 26 For the text of the tobacco concession, see enclosure in Wolff to Salisbury, no. 104, Tehran, 3 April 1890, FO 60/553, NAUK; enclosure in same to same. no. 3 (104), Tehran, 3 April 1890, FO 539/60, NAUK. The conditions of the concession are also given in Edward G. Browne, The Persian Revolution of 1905–1909, Cambridge, 1910, pp. 33–35. Lambton. ‘Tobacco’, pt. 1, pp. 120–21; Firuz Kazemzadeh, Russia and Britain in Persia, 1864–1914, New Haven and London, 1968, p. 248. See also ‘Prospectus of the Imperial Tobacco Corporation of Persia’, enclosure in Truxtun Beale to James J. Blaine, Diplomatic Series, no. 22, Teheran, 18 October 1891, M 223/5, RG 59, USNA.

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Régie. But it would have been surprising if they had not seen the full implications of a policy which encouraged the establishment of monopolies. The tobacco concession gave the Régie the right of making advances for the cultivation of other crops,27 and there was no reason to believe that what had happened to tobacco merchants would not be repeated with regard to the trade and cultivation of opium, silk, cotton, or even rice and wheat. Outwardly, the ‘ulamā’ led the protest movement of 1891–2 which set out to repeal the concession, but it was the merchant classes who played a central role in the movement and gave it its character and decided its final aim. The first petition, addressed to the Shāh, protesting against the Régie was prepared by Tehrān’s tobacco merchants as early as February 1891.28 In March and April the tobacco merchants were the most active opponents of the concession in the country.29 In April, the first evidence of a movement of serious proportions against the concession began in Shīrāz,30 and it was the large Lārī merchants and Qawām al-Mulk, the kalāntar and himself a leading merchant who owned large tobacco fields, who were behind the movement.31 Later, in the spring and summer of 1891, merchants in Tabrīz, Mashhad, Iṣfahān and other towns joined the protest movement.32 In most places the religious classes on their own initiative supported the merchants’ demand to have the concession cancelled, but this was not always the case. In July 1891, Tabrīz merchants had to appeal to the ‘ulamā’, and to convince them of the importance of taking action before the latter’s support was obtained,33 and in Mashhad tobacco dealers tried in September-October to force the mujtahidīn and ‘ulamā’ who had refused to take any action against the Régie, to support them.34 When the deadline for the end 27 Wolff to Salisbury, no. 104, Tehran, 3 April 1890, FO 60/553, and same to same, no. 3 (104), Tehran, 3 April 1890, FO 539/60, NAUK. 28 Kennedy to Salisbury, Telegram, decipher, no. 25, Tehran, 23 February 1891, FO 60/553, and same to same, Telegraphic, no. 9 (25), Tehran, 23 February 1891, FO 539/60, NAUK. In a later dispatch Kennedy reports that when the Shāh granted an audience to the merchants, they denied that they had any grievance and repudiated their seal which had been affixed to the petition. Kennedy to Salisbury, no. 50, Tehran, 25 February 1891, FO 60/553, and same to same, no. 12 (50), Tehran, 25 February 1891, FO 539/60, NAUK; Lambton, ‘Tobacco’, pt. 1, p. 124; Keddie, Religion, pp. 49–50; Kazemzadeh, p. 254. 29 Kennedy to Salisbury, Telegram, no. 85, Tehran, 22 April 1891, FO 60/553, and same to same, Tehran, 23 April 1891, FO 60/553, NAUK. See also Lambton, ‘Tobacco’, pt. 1, p. 126; Keddie, Religion, pp. 52–53. 30 Malikzāda, vol. 1, p. 128; Ibrāhīm Taymūrī, Taḥrīm-i tanbākū yā awwalīn muqāwamat-i manfī dar Īrān, Tehrān, 1328/1949, pp. 68–73; Lambton, ‘Tobacco’, pt.1, p. 127; Keddie, Religion, pp. 67–69. 31 ‘Report from Shiraz agent’, Confidential, enclosure in Kennedy to Salisbury, no. 143, Tehran, 10 June 1891, FO 60/553, NAUK. 32 Malikzāda, vol. 1, p. 128; Kennedy to Salisbury, Private, Gulhek, 4 September 1891, FO 60/553, and same to same, no. 210, Gulhek, 19 September 1891, FO 60/553, NAUK; See also Lambton, ‘Tobacco’, pt. 1, pp. 131–42; Keddie, Religion, pp. 85, 90–91. 33 Kennedy to Salisbury, Confidential, no. 180 and enclosures, Gulhek, 27 July 1891, FO 60/553, NAUK. 34 Kennedy to Salisbury, private, Gulhek. 4 September 1891, FO 60/553, NAUK; Dispatches from P. Vlassow, the Russian consul-general in Mashhad, quoted in L. V. Stroeva, ‘Borba iranskogo naroda

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of unrestricted trade in tobacco approached in November, merchants who had hitherto confined their actions to such moderate forms of protest as petitions and demonstrations, began to express their opposition in a more extreme way. In lṣfahān merchants and ‘ulamā’ took an oath to stop smoking tobacco until the concession was repealed. About the same time Ḥājjī Mīrzā Aḥmad Bunakdār, a leading Iṣfahānī merchant, burned all his tobacco stock rather than sell it to the Régie at their prices.35 In December 1891 merchants in Tehrān and lṣfahān were active in the group which appealed to Mīrzā Ḥasan Shīrāzī and asked him to issue a fatwā prohibiting smoking.36 The prominent role of merchants in the protest movement was clearly manifested when the government announced in January 1892 that it would cancel the concession. Their final aim having thus been achieved, the merchants did not support attempts made by both ‘ulamā’ and liberals to use the protest movement to achieve other goals which had no connection with the tobacco concession. The appeals of Mīrzā Ḥasan Shīrāzī, Sayyid Jamāl al-Dīn Afghānī (Asadābādī), and Malkum Khān to the people to continue opposing the Government until further changes were secured,37 were not heeded. The merchants, satisfied with the repeal of the Régie, returned to their normal occupations, assuming that the government would not venture to grant further concessions for the establishment of an administrative monopoly. But the merchants did not realize that the government’s pressing need for money would force upon them new economic measures which would once again affect their economic position.

V Having failed to establish the tobacco monopoly, the government, in an effort to increase its revenue, turned its attention to a reform of the customs regulations. In 1895 merchants throughout the country were informed that the customs duties levied on opium exports would be equalized, and that all exporters, both foreign

protiv angliiskoi tabachnoi monopolii v lrane v 1891–1892 gg.’, Problemy istorii natsional’noosvoboditel’nogo dvizheniia v stranakh Azii, Leningrad, 1963, pp. 171–74. 35 Preece to Kennedy, lspahan, 20 November 1891, enclosure in Lascelles to Salisbury, no. 241, Tehran, 23 November 1891, FO 60/553, NAUK; Taymūrī, pp. 78–79; Shaykh Ḥasan Karbalā’ī, Qarārdad-i rizḥī 1890m., ed. Ibrāhīm Dihgan, Arāk. n.d., pp. 51ff. 36 Several sources claim that the original copy of the fatwā was, in fact, forged by Ḥājjī Muḥammad Kāẓim, the malik al-tujjār of Tehrān. See Mīrzā ‘Alī Khān Amīn al-Dawla, Khāṭirāt-i siyāsī-yi Mīrzā ‘Alī Khān Amīn al-Dawla, ed. Ḥafiẓ Farmānfarmāyān, Tehrān, 1341/1962, p. 155; Dawlatābādī, vol. 1, p. 108. Cf. Taymūrī, p. 112; Mustawfī, vol. 1, pp. 470, 633. For different versions, see Kirmānī, p. 12; Karbalā’ī, pp. 51–60; Malikzāda, vol. 1, pp. 129–30; V.A. Kosogovskii, Iz tegeranskogo dnevnika polkovnika V.A. Kosogovskogo, ed. G.M. Petrov, Moscow, 1960, p. 142; Browne, Revolution, p. 22, and n. 1. 37 See, for example, Lascelles to Salisbury, Secret and Confidential, no. 28 and enclosures, Tehran, 11 February 1892, FO 60/554, and same to same, no. 82 and enclosures, Tehran, 11 May 1892, FO 60/594, NAUK; Qānūn (London), no. 20, n.d. [1892], pp. 1–2.

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and local, would have to pay a uniform rate of 5 per cent ad valorem.38 Till that year foreign opium exporters had to pay 5 per cent ad valorem duty whereas Persian exporters paid ‘a nominal duty’ only.39 The foreign merchants naturally welcomed this resolution, while the local merchant generally objected to it. In Shirāz the bazaars were closed and all transport to and from the town was stopped by force. This compelled the government to rescind its order,40 and it was not until early in 1898, after Belgian customs experts had arrived in Persia at the government’s invitation, that a new move towards the reorganization of the customs administration was begun.41 Already a short time after their arrival, as Cecil G. Wood, the British consul-general in Tabrīz between 1892 and 1903, reports, the Belgians suggested that ‘native merchants . . . will be charged 5 percent on all goods, just as foreign firms now pay on their goods, but all “rahdarie”, or road tolls, all so far authorized demands, or such as lax custom has introduced in the shape of perquisites of employés, among which a fine called “sālamāti”, or safe arrival or welcome, are to be abolished’.42 But when in late 1898 a farmān was issued and circulated throughout the country that a 5 per cent ad valorem duty was to be paid on all goods exported and imported by Persian and foreign merchants alike, certain sections of the local trading community objected to the change, and the farmān was not enforced.43 It was only after March 1899 that the position of the Persian merchant classes, especially the big merchants, was adversely affected. The administration of the custom-houses in Persia was handed over to the Belgian officials,44 who changed the customs tariff and regulations, first in March 1901,45 then in February 190346 and lastly in September 1904.47 This harmed the merchants in five ways. First, 38 ‘Report on the Trade and Commerce of lspahan and Yezd for the Year 1894–95 [by John R. Preece]’, FO, DCR, AS 1662 (896), pp. 8–9; Preece, ‘Ispahan’, 1897–9, 2260, p. 11. 39 Preece, ‘Ispahan’, 1894–5, 1662, p. 8. 40 Idem, ‘Ispahan’, 1897–9, 2260, p. 11. 41 Lorimer, Persian Gulf, vol. 1, pt. 2, p. 2595. 42 ‘Report on the Trade and Commerce of Azerbaijan for the Year 1898–99, by Consul-General C[ecil] G. Wood’, FO, DCR, AS 2291 (1899), p. 11. 43 Preece, ‘Ispahan,’ 1897–9, 2260, p. 11. 44 Lorimer, Persian Gulf, vol. 1, pt. 2, pp. 2595–96. 45 See ‘Persian Law of 9th Zilhadjeh, 1318 (31st March, 1901)’, U.K., Richard W. Brant and Godfrey E.P. Hertslet (eds.), A complete collection of the treaties and conventions . . . between Great Britain and Foreign Powers, vol. 24, London, 1907, pp. 816–17. 46 See ‘Convention between the Emperor of Russia and the Shah of Persia regulating their commercial Relations . . .’, U.K., Richard W. Brant and Willoughby Maycock (eds.), British and Foreign State Papers, vol. 96 (1902–03), London, 1906, pp. 1279–82; ‘Commercial Convention between Great Britain and Persia, . . . February 9, 1903’, U.K., Augustus H. Oakes and Richard W. Brant (eds.), A complete collection of the treaties and conventions . . . between Great Britain and Foreign Powers, vol. 23, London, 1905, pp. 1213–37; also in State Papers, vol. 96, pp. 51–81. 47 See ‘Code of Regulations for the Levying of Customs Duties on Goods entering or leaving Persia . . .’, FO, DCR, MS 646 (1906), pp. 3–103; also in Treaties and Conventions, vol. 24, pp. 825–925, and in U.K., Richard W. Brant and Willoughby Maycock (eds.), British and Foreign State Papers, vol. 98 (1904–5), London, 1909, pp. 1146–79.

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certain big merchants were deprived of their custom-house farms from which they had derived high profits.48 Secondly, Persian importers and exporters had to pay higher customs duties, because the rate on the major articles they imported and exported had considerably increased,49 and also because evasion of payment50 became more difficult.51 Thirdly, the new method by which the levy of customs duties was made, namely by weight, was found by the big Persian merchants to be a great inconvenience.52 Fourthly, the Belgian administration introduced a great many formalities which made the clearance of goods from the custom-houses a complicated, expensive and time-consuming matter.53 Fifthly and finally, whereas before the tariff changes of 1901 and 1903 Persian merchants paid lower duties than foreign merchants, they were now on equal terms.

48 In the last decades of the 19th century big merchants acquired leases for the customs of whole provinces. For example, during the greater part of the 1870s Ḥājjī Raḥīm Khān Iṣfahānī and Ḥājjī Muḥammad Bāqir Khān were alternately the farmers of all the custom-houses in Bushire, Linga, Bandar ‘Abbās, Shīrāz, Yazd and lṣfahān. Similarly, the influential merchant and banker of Kirmānshāh, Ḥājjī ‘Abd al-Raḥīm WakīI al-Dawla, was in the late 19th century the contractor of all the custom-houses in Kirmānshāh. See Lorimer, Persian Gulf, vol. 1, pt. 2, p. 2617; ‘Kirmānshāh (Town)’, GP, Simla, 1914, vol. 2, p. 359. 49 For example, the customs duty levied on the import of indigo increased from some 1–2 per cent ad valorem in 1900 to 31 per cent ad valorem in 1903, and on Indian tea from some 2–2.5 per cent to about 92.5 per cent. The duty levied on the export of wheat increased from some 2 per cent in 1900 to 15–20 per cent in 1903, on barley from 1.5–2 per cent to 30–40 per cent, and on opium from some 2.5 per cent to 20 per cent. See ‘Report on the Trade and Commerce of the Persian Gulf for the Year 1903 by Lt. Col. C[harles) A. Kemball . . .’, FO, DCR, AS 3182 (1904), pp. 4, 9; ‘Report on the Trade and Commerce of Bushire for the Year 1905 by Mr. Vice-Consul [Herbert A.] Richards’, FO, DCR, AS 3581 (1906), pp. 5, 7. 50 For details on customs evasions by local merchants in the period prior to the reforms of 1899–1904, see for example, ‘Memorandum from the Persian Minister for Foreign Affairs [to W. Taylour Thomson]’, translated by J. Ibraheem, (Tehran) 5 March 1876, enclosure no. 1 in W[illia]m Taylour Thomson to the Earl of Derby, Commercial no. 2, Tehran, 10 March 1876, FO 60/382, NAUK; ‘Report on the Trade and Commerce of the Consular District of Ispahan for the Year 1896 [by Consul John R. Preece]’, FO, DCR, AS 1953 (1897), p. 4; Preece, ‘Ispahan’. 1897–9, 2260. p. 15; ‘Report on the Trade and Commerce of the Persian Gulf for the Year 1898 by Colonel M[alcolm] J. Meade . . .’, FO, DCR, AS 2346 (1899), pp. 4–5; ‘Report on the Trade and Commerce of the Persian Gulf for the Year 1900 by Lieut.-Colonel C[harles] A. Kemball . . .’, FO, DCR, AS 2631 (1901), p. 6; ‘Report by Consul [Henry Adrian] Churchill on the Trade and Commerce of the Provinces of Ghilan and Asterabad for the years 1874 and 1875’, PP, A&P 76 (1876), p. 1500; ‘Report by Consul [Henry Adrian) Churchill on the Trade and Commerce of the Persian Caspian Provinces of Ghilan, Mazanderan and Asterabad for the year 1879’, PP, A&P 74 (1880), p. 841; Curzon, Persia, vol. 2, pp. 475–6. 51 ‘Report on the Trade of Khorassan for the year 1901–2 by Lieutenant-Colonel T[sic] [John] F. Whyte . . .’, FO, DCR, AS 2921 (1902–3), p. 4; Kemball, Persian Gulf, 1900, 2631, p. 6; ConsulGeneral Wratislaw, ‘Report on the Trade of Azerbaijan for the Two Years ending March 20, 1904’, FO, DCR, AS 3308 (1904), p. 3. 52 Kemball, ‘Persian Gulf’, 1903, 3182, p. 3. 53 ‘Report on the Trade and Commerce of Bunder Abbas and Lingah for the year 1905 by Lieutenant W[illiam] Shakespear . . .’, FO, DCR, AS 3702 (1906), p. 4; Lorimer, Persian Gulf, vol. 1, pt. 2, pp. 2611, 2615.

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Against this background, the attitude of the Persian merchants to the Belgian officials and to the central government which employed them became increasingly hostile. Merchants held public protests against the reforms in the customs administration and regulations in May 1900 in Shīrāz, in July in Tehrān, Iṣahān and once again in Shīrāz, and in November in most major commercial centres of the country. At the beginning of 1901 there were riots in Tabrīz, Tehrān and Kāshān. The protest movement was intensified after the enforcement of the new tariff of 1901, and again after the announcement in March 1903 of further changes in the customs tariff. In March 1903 there were demonstrations in Rasht, in June in Tabrīz, in August in Tehran and lṣfahan, in January 1904 in Mashhad, in April in Tabrīz, Kirmānshah and several other towns, and in January 1905 once again in Tabrīz.54 During all these acts of protest the major demand of the merchants was that the Minister of Customs, Posts and Telegraphs, the Belgian Joseph Naus, be dismissed from his office. This demand became more violent after the Belgian officials had begun in April 1905 to enforce all the articles of the new customs regulations of September 1904.55 Subsequently, on 19 Ṣafar 1323/26 April 1905 a group of bunakdārs, ṣarrāfs and bāzārīs of Tehrān closed their shops and offices and took bast in the shrine of Shāh ‘Abd al-’Aẓīm, declaring that they would not return to the town unless Naus was dismissed. The bastīs agreed to disperse only after Muḥammad ‘Alī Mīrzā, who had been appointed regent when his father left on a visit to Europe early in May 1905, promised that the Belgian Minister would be dismissed on the Shāh’s return to the country.56 The demand to ‘clean up’ the customs administration was also made in an open address of 3 Rabī’ I 1323/8 May 1905 issued by one of the leading secret societies in the capital to the ṣadr-i a’ẓam ‘Ayn al-Dawla.57

54 Malikzāda, vol. 1, pp. 278–79; Browne, Revolution, pp. 101, 111; Richards, ‘Bushire’, 1905, 3581, p. 3; Lorimer, Persian Gulf, vol. 1, pt. 2, pp. 2596, 2602, 2615: Keddie, ‘Iranian Politics’, pt. 1, pp. 7, 12; pt. 2, pp. 155–56, 163: pt. 3, pp. 236, 240, 243. 55 In Bushire, for example, M. Heynssens, the director-general of the customs, ‘insisted . . . on consignees appearing in person to declare their goods . . . [and] visited with a penalty the slightest discrepancy between invoices and goods, and . . . tried to prohibit the use of private wharves . . .’. See Lorimer, Persian Gulf, vol. 1, pt. 2, p. 2615. Consul W. Shakespear gives the two following examples: ‘. . . an unfortunate consignee had to pay a very large sum on a big consignment as warehouse dues simply because he received the bill of lading two days after the period of grace granted by the customs department had expired, and he was unable to take lading without the bill of lading; and in another [instance] a consignee ran a grave risk of being labelled a smuggler for declaring his consignment as shown on the bill of lading without waiting for the invoice in order to save the demurrage which a delay for this document would have entailed.’ See Shakespear, ‘Bunder Abbas’, 1905, 3702, p. 4. 56 Hardinge to Lansdowne, no. 119 (101), Tehran. 12 May 1905, and enclosure, FO 416/23, NAUK; Lambton, ‘Dustūr’, p. 650; Aḥmad Kasrawī, Tārīkh-i mashrūṭa-i Īrān, Tehrān, 1340/1961, pp. 51–52; Keddie, ‘Iranian Politics’, pt. 3, pp. 243–44. Cf. Browne, Revolution. p. 111; Kirmānī, pp. 217–19. 57 Lambton, ‘Secret Societies’, pp. 56–57.

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Naus, in view of the increasing opposition to him, was said to be thinking of resigning.58 His resignation, however, did not materialize.59 When Muẓaffar al-Dīn returned from Europe in August 1905 he felt that he needed Naus’ services more than ever as the government was faced once again by a severe financial crisis.60 At the same time, the government did not ignore the potential power of the trading community, and especially the big merchants, and tried to conciliate them by a compromise. The Shāh ordered the formation of a committee of fifteen prominent merchants to advise the Ministry of Trade (wizārat-i tijārat) on major policy decisions.61 The committee was appointed,62 but there is no evidence that it had any effect on decision-making in commercial or economic affairs.

VI Having failed to bring about the dismissal of Naus and to secure that no further fiscal reforms would adversely affect their economic position, the leading merchants of the country embarked upon a more radical plan to secure their interests. After they had decided to organize a massive bast in the grounds of the British legation at Qulhak near Tehrān, the big merchants together with several heads of the guilds and leading members of the reform movement began to plan and prepare this bast.63 It seems that these developments had already taken place before the hijrat-i kubrā of the ‘ulamā’ to Qumm occurred (24 Jumādī I 1324/16 July 1906).64 After the organizers of the bast had been assured by Evelyn M. Grant-Duff, the British chargé d’affaires, that if the people took bast in the grounds of the legation no force would be used to expel them,65 the ground was prepared. According to Mihdī Malikzāda, who was apparently an eyewitness to the final stages of the preparations for the great bast, the aim of the organizers had been crystallized in advance. He states that it was decided to demand the establishment of a constitutional government.66 Other sources, both Persian and Western, claim that this demand evolved only during the period of the bast itself, and only after a 58 Lorimer, Persian Gulf, vol. 1, pt. 2, p. 2615. 59 Ibid. 60 Hardinge to Lansdowne, Confidential. no. 106 (183), Tehran, 22 August 1906, FO 416/24, NAUK; ‘Persian loan and finances’, enclosure no. 1 in ‘General Report on Persia for the year 1906’, C. Spring-Rice to Edward Grey, no. 45 (8914), Tehran, 28 February 1907, FO 371/306, NAUK; also in FO 416/30, NAUK. 61 Ḥabl al-Matīn (Calcutta), 17 August 1905. 62 Ibid. 63 Malikzāda, vol. 2, p. 168. 64 Ibid.; ‘Reform Movement in Persia, 1906’, enclosure no. 2 in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK. 65 This assurance was given on 26 Jumādī I 1324/18 July 1906. See U.K., FO, Correspondence respecting the affairs of Persia, London, 1909, vol. 1, no. 1, pp. 3–4. Earlier attempts to obtain it failed. See Malikzāda, vol. 2, pp. 168–69: ‘Reform Movement in Persia, 1906’, enclosure no. 2 in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK. 66 Malikzāda, vol. 2, p. 170.

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small group of liberals among the bastīs had persuaded the committee which the bastīs had set up that at that stage of their relations with the government it would be a mistake not to demand a constitution.67 These two versions do not necessarily contradict each other if one accepts Malikzāda’s account of the way the big merchants had planned the bast and the achievement of a constitution. He writes that several big merchants of Tehrān, namely Ḥājjī Āqā Muḥammad Mu’īn al-Tujjār Būshihrī, Ḥājjī Muḥammad Taqī Bunakdār and others deliberately avoided joining the bast at Qulhak, and remained in the capital. After the bast had become a massive movement and economic activity in Tehrān had ceased, a small group of big merchants went to see Muẓaffar al-Dīn Shāh and his ṣadr-i a’ẓam ‘Ayn al-Dawla falsely expressing their loyalty to the Crown, denying that they had any connection with the bastis. The Shāh, knowing their great influence over the bāzārīs, asked them to go to the British legation grounds and bring an end to the bast. After receiving specific orders from ‘Ayn al-Dawla and Mushīr al-Dawla, the big merchants set out for the British legation. At Qulhak they hardly spoke with the committee of the bastīs, but returned to the palace to report to ‘Ayn al-Dawla that they had failed to persuade the people to return to their homes. They were ready, however, to tell the ṣadr-i a’ẓam what the people wanted, and Ḥājjī Āqā Muḥammad Mu’īn al-Tujjār Būshihrī told ‘Ayn al-Dawla that the bastīs were demanding a majlis, and that the big merchants shared their view.68 It was only after this event that Grant-Duff was asked by the committee of the bastīs, which was apparently informed of the abovementioned developments in the palace, to hand to the Shāh their list of demands.69 These included, inter alia: (i) the establishment of a constitutional government and a representative assembly; (ii) the dismissal of ‘Ayn al-Dawla, the ṣadr-i a’ẓam;

67 Browne writes: ‘Taqí-záda told me that a Commission was formed among the bastís in the Legation. . . . When the Sháh promised to dismiss ‘Aynu’d-Dawla . . . some of the more simple-minded bastís wished to leave the shelter of the Legation, but this Commission induced them to remain, pointing out that only a fundamental reform of the methods of government would guarantee them against the tyranny and mal-administration of other ministers as bad as the ‘Aynu’d-Dawla. Thus the demand for a “House of Justice” (‘Adalat-khana) developed into the demand for a Parliament or National Assembly (Majlis-i-Millî)’. See Revolution, p. 122, note. See also FO, Correspondence, vol. 1, no. 1, p. 4; Sir Percy Sykes, A History of Persia, 3rd ed., vol. 2, London, 1969, p. 403; Kasrawī, pp. 58, 100ff. In the notice on Şani’ al-Dawla, who subsequently became president of the majlis, in the ‘Biographical summary, 1906’, enclosure no. 32, in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK, it is stated that ‘when the British Legation was invaded by refugees [i.e. bastis] in July, deputations were sent secretly to Sani-ed-Dowleh, who formulated for them the idea which they had only vaguely formed of a Constitution with the object of reform’. I am indebted to Professor Ann K.S. Lambton for this reference. Cf. Browne, Revolution, p. 129; ‘Reform Movement in Persia, 1906’, enclosure no. 2 in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK. 68 Malikzāda, vol. 2, pp. 171–72. 69 ‘General Report on Persia for the year 1906’, C. Spring-Rice to Edward Grey, no. 18, Tehran, 29 January 1907, FO 371/306. NAUK; Malikzāda, vol. 2, p. 172; Kasrawī. p. 58.

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and (iii) the return of the ‘ulamā’ from Qumm, and other exiles including Sa’d al-Dawla, to Tehrān.70 The big merchants also played a major part in ensuring that the bastīs would have the material means to pursue their protest to a successful conclusion. It is clear that a bast of some 14,000 men, about a third of the total labour force of Tehran in 1906, lasting for 22 days (19 July-10 August 1906), could not have taken place without some financial support to supply their material needs and those of their families. This was provided by certain big merchants, particularly by the wealthy banker Ḥājjī Muḥammad Taqī Bunakdār.71 Certain big merchants also played a major part in ensuring participation in the bast by the trading community of Tehrān on a large scale. Prior to the events of July-August 1906 they had used their economic power and influence in the bazaars of Tehrān to secure widespread support for their reform movement from the bāzārīs.72 Malikzāda, for example, claims that the big merchant Ḥājjī Muḥammad ‘Alī Shālfurūsh, sold merchandise at a reduced price to those bazaar dealers who had shown their support for the reform movement.73 Other economic developments which played a role in the formation of a massive opposition movement to the government, are also significant in understanding the big merchants’ part in the constitutional movement. First, in many provinces the early years of the twentieth century were a period of economic depression.74 In the capital the unemployment rate rose sharply.75 In these circumstances any increase in the price of basic commodities was likely to arouse disturbances. When sporadic rises in prices of wheat and sugar occurred,76 the people attributed this to the changes in the customs tariff, and blamed Joseph Naus and the government for their growing economic distress.77 Secondly, in the early twentieth century the artisans were in difficult economic straits as a result of the growth in the import of cheap foreign industrial goods.78 The dumping practices of the Russian government and

70 ‘Reform Movement in Persia, 1906’, enclosure no. 2 in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK; Malikzāda, vol. 2, p. 172; Kasrawī, p. 58. 71 Malikzāda, vol. 2, p. 170. See also Browne, Revolution, p. 120, note. 72 Malikzāda, vol. 2, p. 28. 73 Ibid. 74 Data on prices of basic commodities indicate that deflation was rampant in several major towns such as Tehrān, Tabrīz and Rasht during the early years of the 20th century. See ‘Report on the Trade and Commerce of Resht for the year 1897, by Mr. Consul H[arry] L. Churchill’, FO, DCR, AS 2128 (1898), p. 11, NAUK; Eteocle Lorini, La Persia economica contemporanea et la sua questione monetaria, Rome, 1900, p. 394. t. 17; Houtum-Schindler, EB 10th ed., p. 617; Gad G. Gilbar, “Trends in the Development of Prices in Late Qājār Iran, 1870–1906”, Iranian Studies, 16 (1983): 177–198. 75 Houtum-Schindler, EB 10th, p. 617; idem, EB 11th ed., p. 192. 76 Ḥ. ‘A. Qudsī, Kitāb-i khāṭirāt-i man, vol. 1, Tehrān, 1342/1963, p. 106; Browne, Revolution, p. 112. 77 Ḥabl al-Matīn (Calcutta), 9 and 23 March 1905. 78 The increase in the supply of foreign industrial goods in the Persian market during the last decades of the 19th century coincided with the growth of competition between British and Russian goods,

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the new customs tariff of February 1903, which reduced the customs rate on certain imported industrial goods,79 brought the artisans’ grievances to a head. According to the Ḥabl al-Matīn’s correspondent in Tehrān, the aim of those who protested against the government in April 1905 was, inter alia, to force the government to encourage home industries and to protect them against growing competition from Russian industrial production.80 Thirdly, the ṣarrāfs of Tehrān were in a difficult economic condition because the repayment of debts and bills to them by the central treasury was several years in arrears.81 In addition, the bāzārīs were greatly affected by the economic depression of the early twentieth century, as the level of economic activity fell, and incomes from commercial transactions sharply declined.82 When their profits were further reduced with the introduction of new customs tariffs and regulations, they held the central government responsible for their economic hardship.83 Furthermore, the attitude of certain sections of the ‘ulamā’ towards the government was also affected by economic factors. Those ‘ulamā’ who were also

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83

mainly in the northern, and to a lesser extent, in the central and southern provinces. This competition resulted, to a degree not experienced in other Middle Eastern countries, in a price level for industrial goods lower than in some of the major industrial countries, including Britain and Russia. Lloyd C. Griscome, the American ambassador in Tehran, noted in 1902 that Russian goods imported into the Persian market were cheaper by some 15 to 20 per cent than in Russia, due to the bounty system initiated by the Russian government with regard to exports directed to Persia. For details see ‘Report on the Trade of Khorassan and Seistan for the year 1890–91 [by Consul-General Charles S. MacLean]’, FO, DCR, AS 976 (1892), p. 4; ‘Report on the Trade of Khorasan and Sistan for the Financial year 1892–93, [by E.C. Ringler Thomson]’, FO, DCR, AS 1268 (1893), pp. 3–4; Preece, ‘Ispahan’, 1894–5, 1662, p. 5; ‘Report on the Trade and Commerce of Khorasan for the Financial Year 1895–96 [by Ney Elias]’, FO, DCR, AS 1800 (1896), pp. 8, 17–20: Preece, ‘Ispahan’, 1896, 1953, p. 9; ‘Report on the Trade, Commerce and Agriculture of Khorasan for the Year 1896–97 [by Charles E. Yate]’, FO, DCR, AS 2008 (1897), pp. 6–7; Report on the Trade and Commerce of Khorassan for the Year 1897–98 by Lieut.-Colonel [Henry M.] Temple’, FO, DCR, AS 2202 (1899), pp. 3–4; Preece, ‘Ispahan’, 1897–9, 2260, p. 7; Wood, ‘Azerbaijan’, 1898–9, 2291, p. 6; Captain J.F. Whyte, ‘Report on the Trade and Commerce of Khorassan for the Year 1898–99’, FO, DCR, AS 2368 (1899), pp. 3–4; ‘Report on the Trade Conditions of Persia’, Lloyd C. Griscome to John Hay, Diplomatic Series 25, Teheran, 25 November 1902, M 223/10, RG 59, USNA. A.A. Zonnenshtral-Piskorskii, Mezhdunarodnye torgovye dogovory Persii, Moscow, 1931, pp. 181–83. Ḥabl al-Matīn (Calcutta), 19 June 1905. Ibid. ‘Report on the Trade of Ispahan and District for the years 1901–03, by Consul-General [John R.] Preece’, FO, DCR, AS 3305, (1904), pp. 4–5; ‘Report on the Trade and Commerce of Arabistan for the year 1905, by Consul [William] McDouall’, FO, DCR, AS 3579 (1906), p. 3; Richards, ‘Bushire’, 1905, 3581, p. 6; ‘Report on the Trade of the Provinces of Kermanshah, Hamadan, Kurdistan and Malayar for the year ended March 20, 1906, by Captain H[ugh A.K.] Gough . . .’, FO, DCR. AS 3683 (1906), p. 3; Shakespear, ‘Bunder Abbas’, 1905, 3702, pp. 3, 14; ‘Report on the Trade of Ispahan and Yezd for the year 1905–06 by Dr. [Minas S.P.] Aganoor . . .’, FO, DCR, AS 3748 (1907), pp. 3–4, 6–7, 10; ‘Report on the Trade of the Consular District of Resht and Astarabad from March 20, 1903, to March 20, 1907, by Vice-Consul H[yacinth] L. Rabino, FO, DCR, AS 3864 (1907), pp. 5–6. See, for example, Hardinge to Lansdowne, and enclosures, Confidential, no. 119 (101), Tehran, 12 May 1905, FO 416/23, NAUK.

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engaged in wholesale commercial activity84 were in the same position as the big merchants, while those who had become big landowners during the last decades of the nineteenth century were concerned about Naus’ proposals to reform the collection of the land taxes.85 ‘Ulamā’ and mullās who were dependent on pensions from the central treasury were becoming hostile to the government because for three successive years their pensions had been in arrears.86 Another important factor influencing their attitude to the government was the rumours in the capital that Naus intended, within his proposed fiscal reforms, to cut drastically the amount of pensions and allowances paid by the central treasury, a great part of which went to ‘ulamā’ and mullās.87 Finally, the religious classes as a body were concerned that Naus might try to establish tight control over awqāf and their management, and perhaps to tax them.88 These factors made it possible for the big merchants and other leaders of the reform movement to bring about the massive bast against the government, and to convince the 14,000 bastīs not to be satisfied with the dismissal of a certain high official or minister, but to hold out for more drastic means to control the administration.

VII The position of the big merchants in Persian society – their close relations with both the ‘ulamā’ and the liberals, made them the only possible link between those who advocated the establishment of a constitutional government and those who were in a position to give the necessary legitimization to such a reform. When the bast and the ultimatum to the Shāh demanding the grant of a constitution occurred, the leading ‘ulamā’ and mullās of Tehrān were in Qumm. It is not clear whether they were fully informed of all the developments which took place in the capital during their absence.89 But after they had returned to Tehrān on 27 Jumadī II 1324/18 August 1906 many of them expressed their support for the establishment of a constitutional government,90 even though the ‘ulamā’ as a body had not advocated such a reform before, and until early in July 1906 some of their leaders rejected the desirability of establishing a constitutional government.91

84 Preece, ‘Ispahan’, 1894–5, 1662, p. 6. 85 ‘Extract from Meshed Diary’, enclosure no. 9 in Hardinge to Lansdowne, no. 77 (26), Tehran, 3 March 1903, FO 416/13, NAUK. 86 Richmond Pearson to Elihu Root, no. 137, Tehran, 22 August 1906, case 1039, vol. 138, Numerical File, RG 59, USNA. 87 Hardinge to Lansdowne, Very Confidential, no. 41, Tehran, 30 March 1903, FO 60/665, NAUK. 88 ‘Mujteheds of Attabat to Shah’, enclosure no. 2 in Hardinge to Lansdowne, Confidential, no. 119, Gulahek, 7 August 1903, FO 60/666, NAUK. 89 On the basis of information supplied by Taqīzāda, Browne states that the committee of the bastīs was ‘in communication with the ecclesiastical leaders at Qum’. See Revolution, p. 122, note. 90 Malikzāda, vol. 2, pp. 182–84; Browne, Revolution, p. 123. 91 Kirmāni, pp. 374 ff.

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At least for a certain period after the constitution was granted, the big merchants benefited from the change they had been so active in effecting. Naus and his senior assistant Priem were dismissed from office in February 1907, although many of the leading members of the first majlis, such as Ṣanī’ al-Dawla, opposed this step,92 and the customs department was brought under the official control of a Persian national.93 The reforms in the administration and collection of land taxes which Naus had begun were not pursued. Instead, the first majlis abolished the system of tuyūl and ordered these lands to be brought under the direct control of the government.94 The expenditure of both the central and provincial administration and the court was cut down,95 and most importantly, the national budget was made subject to the approval of the majlis.96

92 C. Spring-Rice to Edward Grey, no. 1 (35), Tehran, 24 February 1907, FO 371/305, NAUK; Richard Pearson to Elihu Root, Confidential, Tehran, 15 February 1907, case 1039/3–5, vol. 138, Numerical File, RG 59, USNA. 93 C. Spring-Rice to Edward Grey, no. 1 (54), Tehran, 25 March 1907, FO 371/305, NAUK; ‘Agitation against Belgian Customs Administration’, enclosure no. 16, in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK. 94 Malikzāda, vol. 3, p. 93; Lambton, Landlord, p. 178. 95 Malikzāda, vol. 3, pp. 92–93; Lambton, Landlord, p. 178. 96 As early as in October 1906 ‘the Assembly gave the Grand Vizier to understand that no loans, internal or foreign, could be contracted without their approval, and the Mushir-ed-Dowleh has in consequence not dared to accept the proposed Anglo-Russian advance’. See ‘Reform Movement in Persia, 1906’, enclosure no. 2 in Spring-Rice, ‘General Report’, 1906, FO 371/306, NAUK.

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276

INDEX

‛Abbasid caliphate 52, 84 ‘Abbās Mīrzā 228 Abbud Pacha 27 ʿAbd al Hamid II, sultan 15 Acre/Akko 20, 57, 122 adālat khāna 230, 242 Ādamīyat, Firīdūn 170, 202, 232 ʿadliya courts 175 Afary, Janet 24, 203 Afghānī (Asadābādī), Jamāl al-Dīn 226, 237 agriculture 4, 5, 9, 11, 16, 21, 25, 29, 57–8, 81, 98–100, 107, 119, 127, 137, 138, 146–8, 152–3, 179, 201, 218, 250, 252 Ahwāz 149, 154, 250 Akbar Bāshī, Mīrzā ʿAlī 220 Aleppo 7, 10, 11, 17, 20, 21, 32, 35, 56–7, 63–4, 104–5, 107–17, 134, 248, 250 Alexandretta 10, 111, 130 Alexandria 7, 18, 21, 108, 164–5, 179 Alf Layla wa-Layla 74, 76–78, 85–6, 88, 90 ʿAlī Kanī, Mullā 174, 218 ʿAlīriżā, Muḥammad ʿAlī 13, 33 American civil war 132 Amīn al-Ḍarb, Ḥājjī Muḥammad Ḥasan Khān Iṣfahānī 12–13, 17–18, 32, 42, 88, 153–4, 177, 201–3, 207, 211–12, 212n40, 213n45, 216, 221–2 Amīn al-Ḍarb II, Ḥājjī Muḥammad Husayn 13, 154, 211 Amīn al-Dawla, Mīrza ‘Alī Khān 158, 237 Amīn al-Sulṭān, Āqā Ibrāhīm 153, 207 Amīr Kabīr, Mīrzā Taqī Khān 228 Antioch 115 Anatolia 3, 4, 7, 8, 10, 19, 21, 27, 35, 38–9, 42, 53, 57, 63, 69, 97, 100–1, 103–4, 107, 111, 119 Anatolische Eisenbahn-Gesellschaft 102 Andalusia 34

Andrew, William Patrick 115 anjuman/s 226–7 Anjuman-i Makhfī 227 Arabia 3, 5–7, 13, 19–20, 26, 29, 34–5, 57, 59, 74, 77, 85, 103, 105, 107, 111, 123, 151, 170 Arbāb Iṣfahānī, Āqā Muḥammad Mihdī Malik al-Tujjār 210 Archiv für Wirtschaftsforschung im Orient 5, 99, 102 Armenian/s 5, 6, 18–19, 22, 31, 47, 89, 96–104, 184, 187–8 ‘asabiyya 83 Asia 5, 6, 8, 10, 18, 22, 32, 34–6, 43–5, 48, 51 Astarābād 149, 169, 244 Astrakhan 32 asymmetrical economic penetration 160–1 Atābak, ‘Ayn al-Dawla 227, 240–2 Austro-Hungaria 137, 220 avrupa tüccarları 24, 96 a‘yān/Notables 5, 9, 28–9, 33, 177, 210, 216 Āzerbāijān 146–8, 159, 220, 238–9, 244 Baghdad 7, 10, 14–15, 17–20, 28–9, 31, 33, 35, 77–8, 84, 104–5, 107, 115, 117, 202 Bahrain 6, 11, 13, 34 Baku 202 Balkans 57, 99 Banco di Roma 48 Bandar ‘Abbās 202 Bandar Langa 202 bank/s 18, 47–8, 59, 113, 139, 152, 158–9, 231 Banque d’Athènes 48 Banse, Edward 102

277

INDEX

Bāqir Khān, Hajji Muhammad 239n48 Barbir family 19 Bārfurūsh 202, 215 barley 15, 50, 112, 129, 132, 148–9, 154, 159, 209 Barsbāy, sultan 81 Baṣra 6, 14–15, 20–3, 49, 104–5, 107, 114, 117 Bassūl family 114 bastīs 240, 242–3, 245 Batavia 43 Bayat, Mangol 203 Bayhum Ḥusayn (al-ʿĪtānī) 14, 19, 29, 105 bāzārīs/ bāzāriyān 160, 181, 240, 242–4 Beirut 7, 14, 18–20, 29, 32, 65, 78, 89, 91, 104–5, 113–14, 125, 129, 134, 137–8, 164 Benjamin, Samuel 214 Benjamin family 113 berat 22, 96 Bernay, Emile, consul 220–1 Bethlehem 135, 138 big merchant/s, Christians 14, 19, 21, 28, 31, 36, 39–43, 84, 100, 104, 107, 114, 119, 135, 139, 228 big merchants, Jewish 18–21, 28, 31, 44, 104, 113–14, 135 big merchants, Muslim 3–30, 32, 35–6, 38–9, 41, 43, 45–6, 58, 74–5, 78, 80–1, 89–91, 98–9, 102, 104, 113–14, 117, 139, 141, 150, 152–4, 157–8, 160–1, 170, 190, 201–2, 207–10, 213, 222, 224–5, 230–4, 238–9, 241–3, 245–6; see also tujjār, Muslim Bombay 13, 33, 35, 43, 113, 157, 210 Broglie, J. 188, 190 Brussels 32 Bunakdār, Ḥājjī Mīrzā Aḥmad 237 Bunakdār, Ḥājjī Muḥammad Taqī 242–3 Būshahr 5, 22, 23 Cairo 32–33, 35, 38, 77, 84, 157, 164–5, 180 Calcutta 35, 113, 157 capitalism 49, 72, 100 capitulations 42, 164–6, 169, 175n68, 180; see also imtiyāzāt caravan route/s 11, 37, 77, 108–11, 114, 209 caravanserai 38, 154, 189, 191, 193, 197–9, 216, 220–1 caravanserai-dar 198–200

carpet weaving 10, 36, 38, 44, 104, 146–7, 153, 186, 187, 223; exports 147 cash crops 127, 130–2, 147–51, 156, 216 Cassel, Ernest 18 Caspian provinces 149, 169 Çelebi, Kātib 86 Ceylon 6, 14 Chick, H.G., consul 170 China 5, 13, 43, 113–14, 163 circle of equity 87 citrus 7, 9, 104, 127–31 Clarendon, Lord 115 coffee 79, 80, 111, 121, 123–4, 140 cognitive dissonance 52, 72 commerce 8–10, 16, 19–20, 23, 29, 32, 41–3, 75–6, 79–84, 97–8, 100–3, 108, 111, 114, 130, 152, 157, 181, 212, 216–17, 227, 233–4; and ruler 4, 15, 17, 24, 26, 30, 40, 42, 53, 59, 64, 74, 77–8, 80–4, 87–90, 99 confiscation 17, 211, 213nn45–47, 214n48 constitution 13, 24, 160, 225–8, 230, 241–2, 245–6 Constitutional Revolution (1906) 88, 150, 175, 224–5, 242n67, 243 Cordoba 84 cotton (import /export) 7, 10, 33, 108, 110–2, 121, 123–4, 131–3, 147–8, 150, 153, 179, 186, 236 council of representatives of the tujjār 181, 201–3, 208, 215; see also majlis-i wukalā-yi tujjār court/s (shari‛) 42–3, 48, 55–6, 58, 60–2, 64–8, 70, 72, 89, 104, 163–7, 169–70, 172–5, 178, 180–3, 193, 217 credit 8, 18, 37, 47–8, 72–3, 75, 100, 139, 159, 176, 209, 219 Crédit Lyonnais 18, 48, 139 Cuba 148 customs 4, 22, 24, 88, 117, 157, 159, 160, 174–5, 204, 206–7, 213, 223, 225, 228, 231n7, 237–40, 240n50, 243–4, 246 dahbāshī 191, 193 dallāl/s 201, 218–19 Damascus 7, 10, 14–15, 20, 32–4, 56, 77–8, 104–5, 107, 109–11, 113–15, 117, 134, 157 dār al-ḥarb 43 dār al-Islām 43 date/s 6, 15, 50, 104, 110, 112 deficit 125, 136, 145–7, 156, 158–9

278

INDEX

deflation 243n74 derebey 89 Deutsche Bank 48 Discount and Loan Bank of Persia 48, 159, 171, 176–7 Dīz (river) 154 Dubai 13 economic competition: U.K. and Russia 243n78 economic conditions 20, 41, 147 economic integration 3, 111, 148 Edwards, Cecil A. 36–7, 209 Elias, Ney, consul 176 Eliot Charles (Odysseus) 98 elite/s 8–11, 15–16, 20, 25, 28–30, 75, 79, 81, 85, 87, 89–91, 105, 113–14, 117–19, 141, 168, 170, 180, 183, 202, 215, 222–3 emigration 157 England 5, 36, 44, 147, 185 Egypt 7, 13–15, 19, 21, 23, 28, 33–4, 36, 42, 57, 77, 79–81, 107, 114, 116, 121, 133, 148, 158, 163–6, 170, 178–82 entrepreneur/s 3, 8–10, 14–15, 18, 23–7, 29, 31–4, 37–9, 42–5, 47, 72–3, 87, 89–91, 96, 100–1, 104–6, 115–16, 135, 146–7, 153, 162–3, 165, 169, 179–83, 185, 209–10, 215, 222–3, 235 étatism 26 Euphrates 64, 110, 115–6 European/ foreign investments 11–12, 19, 29, 45, 73, 101, 104–5, 113, 136–9, 146, 152–3, 170, 179–80, 210, 222 Exchange Bank for East Indian Business 113 expenditure, government 145, 155, 158–9, 212, 232, 246 Ezra family 19, 113 famine/s 145, 149, 155–7, 203, 205 Fārs 44, 148, 153, 156 Far‘ūn family 114 Fatḥ ʿAlī Shah 42n34, 64 fatwā 237 Fayyād family 114 fellah/in 59, 66, 82, 107, 139, 141 Fertile Crescent 4, 7, 20–1, 26, 28–9, 57, 103, 107, 113, 116–18 finance 9, 10, 14, 25, 64, 70, 79, 95, 97–9, 100–3, 105, 146, 152, 159, 178, 234

firmān / farmān 115, 153, 157, 233–4, 238, 252 fiscal administration/reforms (Iran) 155, 157, 160, 205, 229, 234, 235 Floor, Willem 167 foreign trade 3–5, 8, 14–16, 19–22, 24–6, 39, 96–7, 103–4, 111–14, 121, 127, 138, 145–7, 157, 203, 207, 235 foreign trading firms/merchants 19, 147, 150, 179–80, 231 France 5, 13, 26, 36–7, 42, 67, 104, 112, 114, 116–17, 121, 179 funduq 39–40 fuqahā’ 53, 60, 62, 75, 76 Gabbai family 19, 113 Galilee 137 Gaza 10, 121–2, 127, 130, 133–4, 138–9 al-Ghazālī, Abū Hāmid Muḥammad 55n32, 76 Gīlān 148–9, 202, 215 Gladstone, William Evert 116 glass 10, 133, 135, 153 globalization 3, 41, 46, 105, 208 Gökalp, Ziya 86 Gordon, Thomas E. 151 grain 9, 13, 15, 132, 140, 148, 218 Grant-Duff, Evelyn M. 241–2 Greek Orthodox 5, 19 Greek/s 31, 38, 44–5, 47, 89, 96–9, 100–2, 104, 165 Granada 84 gum-arabic 6, 13 Ḥabl al-Matīn 244 Hadhramaut 34 hadīth 50, 75–6 Haifa 20–1, 121–2, 127, 130, 134, 136–9 Hamādān 110, 202 Hammurabic law 51 Ḥamza, ʿAbdallāh 13 Ḥanafī school 53, 69 handicraft/s 9–10, 130, 132–6, 138, 146, 147 ḥawāga 80 Hawrān 15 Hebron 133, 138–9 Hejaz railway 110 Herbert, Arthur J. 205 Hijaz 33–4, 36, 52 hijrat-i kubrā 228, 241 historiography 31, 95, 106, 202

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I’timād al-Salṭana, Muḥammad Ḥasan Khān Ṣanī’ al-Dawla 246 Izmir 7, 18, 21–2, 24, 34, 38, 42, 89, 91, 97–9, 104–5, 110, 164

Hong Kong 32, 210–12 Hourani, Albert 5n7, 28 Ḥudayda 7, 20 Ibn Khaldūn: and big merchants 81, 83–4, 90–1; civilisation 74, 76, 86–7; commerce 82–3; and social cohesion 84; and urban culture 83; see also al-Muqaddima imām 218, 229 imām jum‘a 218 Imperial Bank of Persia (IBP) 44, 48, 152, 158–9 imtiyāzāt 42 India 5, 10–11, 13, 33, 35, 43, 108, 112–15, 151, 157, 173–4, 210 indigo 6, 9, 13, 104, 108, 113, 231, 239 Indonesia 43 industrialization 10, 25 industry 26, 36–7, 99–100, 131–3, 135, 138, 146–7, 153, 186, 209 inflation 51, 154 interest 47–8, 50–72, 75, 159, 176, 177, 212; rate/s 16, 51–58, 62–70, 72–3, 159, 211; and salam 60–1, 66; see also ribā International Postal Union 152 investment/s 9–12, 16, 18–19, 29, 45, 50–1, 58, 69, 72–3, 87, 101, 104–5, 107, 113, 115, 136–9, 146, 149, 150, 152–3, 170, 179–80, 210, 212, 222 ‘iqāmat al-‘adil 50 irrigation 14, 107, 150 Iran: agricultural production 157–60; carpet weaving 146–7; demographic developments 156; fiscal developments and reforms 154–6, 157–60; inflation 154; living standard of peasants 150–2; tujjār and economic development 152–4 Iraq 6, 9, 11, 15, 19, 104–5, 108–14, 116–18 Iṣfahān 5, 12, 32, 44 Iṣfahānī, Āqā Najafī 218 Iṣfahānī, Ḥājjī Muḥammad Ḥasan Khān see Amīn al-Ḍarb, Ḥājjī Muḥammad Ḥasan Khān Iṣfahānī Iṣfahānī, Ḥājjī Raḥim Khān 239n48 Iṣfahānī, Mīrzā ‘Alī Muḥammad 32, 153, 237 Ismaʿil Pasha 180 Issawi, Charles 111 Istanbul 7, 15, 18, 21–2, 24, 28, 32–5, 37–8, 40, 42, 56, 85–7, 89–91, 97–9, 101–2, 104–5, 107, 110, 115, 137, 139, 157, 164, 172, 178, 180, 202

Jaffa 7, 15, 20–1, 33, 104–5, 120–3, 125, 127–30, 134–40 Jawād Aqa Mujtahid, Ḥajji Mīrzā 218–21, 223 Jennings, Ronald 71 Jerusalem 7, 135–9 Jews 47, 51, 61, 119, 128–9, 131, 136 Jidda 13, 20, 33–4, 104–5 Kadijustiz 71–2 kadkhudā 191, 193 Kadoori/Khedoury family 19, 113 al-Kaḥḥāl, ʿAbdallah 36 Kaiser, Hilmar 101 kalāntar 236 Kalla, Mohammad Sa’id 112 Karachi 43, 157 kārguzār: and British complaints 170–1, 171n44, 173–4, 185; and government policy 169, 170; inquiry of Suleiman’s death 189–93, 194–200; roles of 167–8; and Russia 176–8; and Tujjār 182–3; see also majlis-i kārguzār Kārimī merchants 80–1 Kārūn, river 149, 152, 154, 174, 224 Kāshān 44, 202, 209, 240 Kāẓim, Ḥājjī Muḥammad Malik al-Tujjār 237n36 Kāzirūni, Ḥājjī Muḥammad Husayn 216n58 Kazwīn 202 Kemball, Charles A., consul 174 khāliṣa 150, 153 Khartoum 13, 22 al-Khuḍayrī,ʿAbd al-Qādir 14 Khurāsān 148–9, 176, 186–7, 206 Khūzistān 149, 156 Kirmān 148, 150, 156, 202 Kirmānshāh 149, 186, 202, 211, 240 Knight, Frank H. 48n4 Kordofan 6, 14 Körte, Alfred 101 Kuhn, Thomas 105 kulāh namadī 156 Kumpanī-yi Taryāk-i Iṣfahān 210 Kuran, Timur 63n58 kursī 188n18 Kuwait 5, 6, 11, 22, 26, 104–5

280

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labour, in agriculture 147, 149, 151, 243 Lahūd family 114 land tax assessments 155 Lebanon 14, 105, 107, 110 Lesseps, Ferdinand de 116 Levant 21, 36, 97–8, 116, 129 loan/s: from foreign governments 158–60, 171, 176–7, 207, 228–9; from local merchants 15, 47–56, 58–9, 61–70, 72–3, 75, 158, 214 London 32, 35–6, 42, 44, 113, 115, 139, 152, 174, 179, 204, 226 Lorimer, J.G. 151 Lucknow 64–5 Lurs, tribe 156 Lydda 134 Lyon 114, 139 MacLean, Charles, consul 187–92 madrasa 12, 219, 220 Mahdavi, Shireen 203 maḥkama 33, 43, 48, 61–72, 84, 163–4, 168 Mahmud II, sultan 89 Majdal 133 majlis-i kārguzār 163, 168, 170, 172, 173, 175, 182–5, 190 majlis-i shawrā-yi millī 13, 24, 175, 225, 230, 242, 246 majlis-i tujjār 173 majlis-i wukalā-yi tujjār 201, 203–7, 215–21 malik al-tujjār 64n62, 154, 173n52, 201, 210, 233–5 Malikzāda, Mihdī 241–3 māliyāt 205 Malkum Khān 226–7, 237 Mamassanī, tribe 153, 156 Mamluk 78–81 Manchester 32–3, 35–6, 44, 185 al-Maqrīzī, Aḥmad Ibn Alī 80 market/s 5, 6, 10, 13, 22, 32–3, 36–8, 41, 44–5, 47–8, 52, 60, 66–7, 76, 82, 99, 104, 113, 129, 131–3, 146, 154, 203, 208, 210–15 Maronite/s 19 Marseille 32, 35–6 Martin, Vanessa 166, 182, 203 Mashhad 32, 150, 171, 176–8, 184–93, 202, 236, 240 mashrūṭiyyāt 24 Maydān grain merchants 15 Māzandarān 13 Mecca 13, 34

merchants 24, 27, 29, 31–4, 36–40, 42, 59, 60, 74–83, 99, 110, 138, 157, 171, 197, 199, 206–7, 212, 216–17, 219–20; Muslim (see tujjār); Non-Muslims 5–7, 18–25, 27, 28, 38–40, 80, 88–91, 97, 99, 104, 108, 113–14, 162–3, 167, 170, 172, 174–6, 178–80, 182–3, 193, 201, 207, 234, 238–9 metalled roads 152 migration/s 84, 107, 119, 137, 157 millet 47 mixed courts: in Egypt 165–6; in the Ottoman Empire 163–5; quest for (in Iran) 172–5 Mommsen, Wolfgang 162 moneylending 8, 12–14, 47–8, 51–2, 58n40, 68, 151 Mongol 84 Moscow 32, 35 Mosul 104–5, 107, 111 Muḥammad ‛Alī, wali of Egypt 107 Mu’īn al-Tujjār Būshihrī, Ḥājjī Āqā Muḥammad 88, 153–4, 242 Mujtahid/s 181, 202, 218–19, 229, 236 al-Muqaddima 74, 76, 81, 84–7, 90 Murad IV, sultan 85 müsadere 89, 98 Mushīr al-Dawla, Mīrzā Ḥusayn Khān 242 Mustawfī ‘Abdallāh 205, 214 Mustawfī al-Mamālik, Mīrzā Yūsuf Khān 208 Mu’tamid al-Sulṭān, Ḥājjī Muḥammad Mihdī, Malik al-Tujjār 154 Muẓaffar al-Dīn Shāh 15, 88, 155, 158–9, 160, 225, 228, 241 Nablus 10, 15, 21, 29, 33, 66, 104–5, 133–4, 136, 139 al-Nābulsī,ʿAbd al-Raḥmān 15, 33 Naima, Mustafa 87 al-Najāḥ school 15 Napoleon III 116 Nāṣir al-Dīn Shāh 24, 85, 87–8, 90–1, 149, 154–5, 158, 169–70, 174, 180–1, 185, 193, 223–4, 226, 228, 233–5 Naṣir al-Mulk, Abū ‘l-Qāsim Khān 159 Nāṣirī, navigation company 154 Nāṭiq, Humā 202 Naus, Joseph 160, 240–1, 243, 245–6 Nāzim al-Tujjār Ṭabaṭabā’ī, Muḥammad Taqī 221 network/s of merchants 31–7, 39, 41, 44–6, 137–8, 152, 164, 167, 185, 211, 218, 221

281

INDEX

qānūn-i asāsī 160, 225 Qawām al-Mulk, ‛Alī Akbar 236 Qazwīnī, Ḥājjī Raḥīm Āqā 153 al-Quds 61, 67 Qumm 241, 243, 245 Quran 48–9, 50, 52–5, 72

New Oriental Bank Corporation (London) 152 niẓām-i jadīd 228 Nizhnii Novgorod 32 nomads 83, 110, 147, 156 notables paradigm 28 Nouraei, Morteza 166, 182 Nubar Pasha 165, 180 Odessa 32, 35 oil 26, 33, 66–7, 111, 117, 125, 130, 133, 135 olive 33, 66–7, 125, 129, 130–1, 133 Olson, Mancur 215n53 Opium 5, 9, 113, 147–8, 153, 157, 186, 203–4, 210–12, 236–8 oranges 112, 125–6, 127–9 osmanli 98 Ottoman Empire 3, 20, 22–3, 42, 47–9, 52–3, 57, 59, 61–2, 68, 74–5, 87, 89–91, 95–6, 98–9, 101–5, 107, 158, 162–4, 166, 170, 172, 178–82, 185 Ovseenko G., consul 176 Palestine 5, 7, 9, 15, 19, 104, 107, 110–11, 119; cash crops 127–32; citrus cultivation 127–30; foreign trade 121–7; infrastructure 137–8 Palmerston, Lord 116 Panjab 151 paradigm/s 28–9; change of 105–6; economic predominance 96–9; ethnic division of labor 99–103; refutation of 105–6 Paris 13, 32, 34–6, 42, 179 pattern/s 11, 16, 18, 22, 41, 43, 95, 107, 119, 133, 169, 170, 225 pearl/s 6, 9, 11, 13, 33–4, 104 Pelly, Lewis 172 Persian Gulf 6, 9, 11–13, 33, 35, 104, 115, 157, 167, 173–4 Picot, Henry 44 pilgrimage 110 pīshkash 157, 212, 214–15, 231, 232n10 Powers, David 71 Prophet Muḥammad 40, 50, 52–4, 76 provincial governors 150, 155, 168, 201–2, 205, 208, 215, 221–3, 227 qadi 56, 58, 61–72, 163 Qajar dynasty 4, 24, 42, 45, 52, 57, 74, 85, 87–8, 90–1, 161–3, 166, 168–9, 172, 175, 180–5, 193, 201–2, 204–5, 208, 214, 222–4, 229 qanāt/s 216

rāhdārī 206, 231, 238 railways 107, 114–16, 137, 228 raʾīs al-tujjār 177–8 ra’īs tujjārat 234 Raʾīs al-Tujjār Rizā, Hājjī Muḥammad 177 Ralli brothers 18 Ramallah 133 Rasht 148, 153, 186, 202, 240 Red Sea 33–5, 36 reserves, government 82, 158 Reuter concession 169, 173, 181, 223, 228, 232 revenues, government 43, 80–1, 88, 204–5, 207, 217, 222 ribā: attitude of ‘ulamā’ 70; and cognitive dissonance 52–3; and hiyal 54–5; interest rates 56–7; interpretation of 53–4; and Kadijustiz 71–2; and qadis 61–8, 72; rulings of mahkama 61–8; terms 53n22 rice 121, 123, 140, 148, 150, 197, 235–6 Rishon Le-Tsiyon 135 risk 9, 12, 29, 48, 50–1, 57, 72, 75–6, 78, 87, 104, 176, 211–12, 214–15; see also uncertainty Ross, Edward Charles, consul 172 Rothschild, Edmond de 131, 135–6 Rousseau, J.B.L.J., consul 108 rural: economy 59, 104, 147–50, 153, 156; standard of living 52, 136, 140 Russia 13, 36, 42, 96, 104, 121, 152, 159, 166, 169, 170–1, 175–9, 187, 193, 204, 213, 223, 228, 243–4 Ṣabbāgh family 15, 114 ṣadr-i a’ẓam 153, 158, 240, 242 Ṣafawids 229 salaf 186–7 salam 59 Salisbury, Lord 173–4 Salonika 34, 105 al-Salt 67 Ṣanī’ al-Dawla see I’timād al-Salṭana, Muḥammad Ḥasan Khān San Remo 117–18 al-Saqqāf, Aḥmad Ibn ʿAbd al-Raḥmān 34 Sārī 202

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ṣarrāfs / ṣarrāfūn 59, 181, 190 Sassoon, David 18, 113, 210 Saudi Arabia 13, 26, 105 Saupp, Norbert 101 Schneider, Irene 71 sedentarization 156 Selim III, sultan 96 Senior, Nassau W. 97 sesame 125–6, 130–1 Sevilla 84 Shabankara case 65n64, 170n42 Shaftī, Muḥammad Bāqir 218 Shāhanshāhī company 154 Shālfurūsh, Hājjī Muhammad ‛Alī 243 sharʿī law 43, 217, 219 Sharjah 6 Shechrazad 74 shipping 11, 109, 116 Shīrāz 5, 44, 148, 156, 170, 186, 210–11, 216, 236, 238, 240 Shīrāzī, ‘Alī Akbar 44 Shīrāzī, Mīrzā Hassan 237 Shirkat-i Islamiyi 181n91 Shirkat-i Mas‛ūdiya 216n58 Shūlistān Khāliṣa lands 150, 153 sijill 33, 56, 59, 61, 65–6 silk 7, 10, 14, 108, 110, 112, 114, 145, 148, 153, 186, 236; silk road 108, 114 Şinasi, Ibrahim 86 Singapore 34 Sīstān 149–50 soap: exports 33, 110–11, 125, 126, 133–4; production 10, 15, 33, 54, 104, 130–1, 133–5, 141 socio-economic status 74, 91 spice trade 80–1, 108 standard of living (Iran) 127, 132, 140, 150 Sudan 5, 6, 9, 13–14, 19–20, 29, 33, 36, 103–4, 107 Suez canal 108–9, 111, 116 Sulayman I Qanuni, sultan 54 Suleiman (Karikoor) case 184–5, 187–200 Sultanabad 186 Sussnitzki, Alphons J. 99–101 al-Suyūfī, Muḥammad Aḥmad 33 Sykes, Percy M. 150–1 Syria 5, 7, 9, 11, 15, 19, 36, 56, 104–5, 107–19, 127, 130, 134 Tabrīz 23, 32, 36–7, 44, 111, 148, 153, 156–7, 171–2, 181, 186, 188, 202–3, 209–10, 218–23, 236, 238, 240 Talbot, Gerald F. 235

Tale of the merchant ‘Alī 79 tanzīmāt 86, 97, 180 Tehran 15, 32, 44, 85, 87, 90, 148, 150–4, 156, 158, 167, 174–5, 180, 186, 188–202, 204–6, 211, 216–18, 220–1, 225, 233–4, 236–7, 240–5 telegraph network 137, 152, 228 Templars 139 Tevfik, Riza 86 textile/s 6, 10, 13, 25, 29, 33, 110, 112–13, 133, 135, 150, 181, 186 Thomson, E.C.R., consul 187, 196 Thomson, Ronald F., consul 204–5 Tiritoǧlu, Mehmet 38 tobacco 7, 24, 104, 108, 112, 121, 124, 140, 148, 150, 158, 181, 223–4, 228–9, 235–7 tobacco Regie 158, 235–7 Töfenstein, Carl von 206 trade routes: Aleppo-Baghdad 110, 112–13; Aleppo-Mosul 111; Damascus-Baghdad 109–10 Transcaspia 35 Trebizon 32, 35, 37, 157 Tripolitania 36 Tujjār, Muslim: in African and Asian countries 43–4; and Alf Layla wa-Layla 76; attitude of central government 23–4; branches in Europe 36–9, 41–6; burgeoning of 208–11; and carpet weaving 10; as compradores 27–8; and confiscation of property 213–14; and constitutional revolution 241–3; and creation of Syria and Iraq 117; and decline of Aleppo and Damascus 114; definition of 3n2; and domestic/regional trade 7; and economic development in Iran 152–4; and education 11–12; as entrepreneurs 9; and exports 5–8; and factories 10–11; as farmers of custom-houses 239n48; and handicrafts 10; historiography of 103–5; hostility towards 16n40; Ibn Khaldūn’s attitude 76, 81–3; images in Tale of ‛Alī 78–9; images of in the Qu’ran 75–6; and income (Palestine) 141; and kārguzār 182–3; as land owners 8–9; and long term changes 26–7; and Mamluk rulers 80–1; as money lenders 58–60, 139; and Nāṣir al-Dīn Shāh 223–4; Ottoman attitude 88–90; and patterns of investment 18–19; and pīshkash 214–15; prominent 12–15; prominent

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networks 32–5; and Qajar attitude 87–8; regions of activity 19–23; relations with central government (Iran) 230–40; relations with ‘ulamā’ 70, 222–3; and salam 59–60; and technological innovations 9–10; and traders’ dilemma 75; and transportation 11; and uncertainty 68–70; and urban elite 28–9; and Venice 40; and Ẓill al-Sulṭān 216n58 tullāb 181 Turkey 26, 97–8, 100, 105, 114, 121, 173, 175 Turkmanchai, Treaty of 166, 175 Turkomans 149 tuyūl 246 Ubicini, Jean-Henri-Abdolonyme 96–7 Udovitch, Abraham 71 ‘ulamā’: attitude to European penetration 181, 206; attitude towards central government 244–5; and the constitutional revolution 230n3; objections to ribā 65n64; relations with Qajars 228–30; relations with tujjār 70n75, 222–3 Umayyid state 52 uncertainty 48, 51, 58, 68–9, 71–2, 116, 215; see also risk United States 37, 131–2, 147, 186, 214 urban centers 14, 19, 24, 28–9, 52, 83–4, 96, 113, 117, 140, 147, 149, 152, 155, 157, 160, 162, 167, 185, 201, 216 urbanization 137, 156 ‛urfī court 69, 72, 162, 166, 168, 217 Urūmiya 202

Uṣak 38, 104 usury 49–51, 53 Venice 39–40 vilayet 15, 58 vineyard 131 Wakīl al-Dawla, Hājjī ‛Abd al-Raḥīm 239n48 waqf /awqāf 12, 70, 89, 245 Warsaw 32 water 64, 117, 137, 152 Weakley, Ernest 109–11 Weber, Max 71–2 Westphalian/Vattelian Sovereignty 163n2 wheat 7, 34, 38, 50, 112, 125, 129, 132, 148–9, 154, 218, 236, 243 Wiener Bankverein 48 wine 125–6, 131, 135–6 Wizarat-i Tijarat 241 Wolff, Henry Drummond 188–9 women 40, 149 wool 7, 9, 14–15, 38, 60, 104, 108, 112, 147, 184, 186–7 Yazd 5, 32, 148, 156, 186, 202, 210, 215 Young Turk/s 23–4, 89, 165 Yūsuf Khān 208, 216 Zanjān 202 Zanzibar 43 Zawwar, ‘Abd al-Husayn Tabrizi 176 Ziegler & Co. 184–93, 200 Zikhron Ya’akov 135 Ẓill al-Sulṭān, Mas‛ūd Mīrzā 206–7, 214–17 Zoroastrians 6, 47

284