Persian Empire 1845

Chapter 109 Budget Adjustment
After sending his brother to a hotel to rest, Lawrence began writing to the Shah, thanking him for his trust and care over the years. Now that he was going to Mexico to pursue his career, he would soon set off for Tehran to speak with him in person.

"Mr. Lawrence, you wanted to see me?"

When his deputy Zarif approached him, Lawrence immediately said, "I will go to Tehran to report to the Shah and will resign from my current position to recommend you to take over the company."

This sudden news stunned Zarif; he thought it would take several years to rise to power, but he didn't expect it to be so quick.

"But I'm not sure if I'm up to the task..."

"Remember, if you believe you can do it, then you can. You are in charge of the company, so don't think about anything else."

After giving Zarif some advice, Lawrence prepared to take the earliest ship to Iran. He still had a lot of things to do in Mexico and needed to get everything sorted out quickly.

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Blacksmiths in Tehran have been busy these past few days, melting down the royal family's gold into gold bars, which will then be placed in the central bank's vault and the Shah's private treasury. According to previous allocations, gold worth 1500 million rials will enter the central bank.

The rest is all Nasser al-Din's private property. With such a large sum of money, he naturally wants to invest it in the latest things. For example, expanding Iran's secular education system and spending money on intelligence gathering against Russia.

These expenses all need to be discussed with the government. Amir doesn't know where Shah got such a large sum of money, but judging from his assurances, he probably hasn't done anything heinous. Although the government isn't short of money right now, that doesn't prevent it from implementing expansionary fiscal policies.

A contract has been signed with Britain to order two warships for a total of 170 million riyals, and a naval officer has also been hired for training. This should be the largest naval military expenditure, but it is still negligible compared to the army's expenditure.

Molch's earlier plan to train 19 regular troops and 20 reservists was a top priority for the government, in addition to establishing a broad mobilization system. In the event of war, Iran could quickly mobilize 50 people into the military. This ratio is already the result of extreme exploitation, not to mention that Iran's national strength still needs to be improved.

“Shah, we spend 450 million every year to reorganize the army, and we need to spend even more money on other things. I think this is the limit of the government. We must wait for industrial development so that we can collect more taxes.”

Finance Minister Ibrahim, a conservative, is deeply concerned about the damage the deficit will cause to Iran. While it could be addressed by issuing national bonds, it's important to remember they already have over 3000 million in foreign debt; how can they afford to further increase that debt?
“I say, Chancellor of the Exchequer, you’re being a bit too conservative. Right now, both Britain and France are making up for their fiscal deficits by issuing national bonds and raising taxes, and we have so much to do. Our national strength is far inferior to that of the Ottomans, not to mention that we need money right now.”

He, as the minister, was well aware of Shah's statement, but the eastern region was becoming somewhat disaffected by the abolition of the slave trade, and they might launch a protest movement if financial issues arose.

Despite public opposition, the plan to abolish the slave trade has been announced. From this day forward, Iran will completely cease the slave trade, both by sea and land. Meanwhile, slave owners are encouraged to release slaves, and slaves can also gain their freedom by paying a sum of money, which can be done on credit, with the option to repay the debt by renting land or working elsewhere in the future.

This proposal did indeed compensate the slave owners to the greatest extent possible, but they were still somewhat dissatisfied. However, if they remained unsatisfied, Mashhad's army might very well launch an attack.

The finance minister wanted to say something more, but Naserdin had already given up on the matter. He turned to Pezeshkian and asked, "What is the situation in Khiva and Bukhara?" "The monarch of Khiva has borrowed another 10 rials from our country for his own enjoyment, and their army has not fought a war in a long time. I think it is time to bring Khiva under our protection."

As the weakest of the three Central Asian states, Khiva lacks the population and economy to become a large nation. Its former glory is long gone, and Russia's aggressive stance leaves it with no choice but to consider Iran, which at least recognizes the privileges of its rulers and nobility, and is also religiously based.

At this time, Khiva Khan borrowed more than 30 rials from Iran, an amount that Khiva, with a population of only 70, could not repay. To this end, Khiva Khan signed a series of agreements with Iran, gradually transferring control of Khiva to Iran.

Trade between Iran and Khiva was also booming, with Iranian merchants using their privileges to expand their business in the region. It seemed the situation had reached its final stage.

"Khiva and Bukhara are a barrier for us to stop the Russian army from advancing south. Protecting them is a last resort. If we cannot unite, we will only be swallowed up by this madman."

Iran must go all out to counter Russia, this madman, which is why it has taken the lead over Russia in Central Asia. Especially in the struggle for key transportation routes, Iran has also stationed a military force in Mashhad, ready to deter the country to the north.

"Alright, it's all a bit unbelievable to say anything now. But I hope everyone will do their jobs well, as your decisions will affect Iran's future. Meeting adjourned!"

All the members left the meeting room, except for Amir.

“Teacher, do you think we can defeat Russia?” Naserdin asked.

Amir thought for a moment and said firmly, "It's definitely possible, Shah. As long as Iran is united, we will definitely defeat Russia."

Shah nodded in agreement.

"The government is currently facing financial difficulties, and the royal family will not stand idly by. If possible, the royal family will purchase 2500 million in government bonds. We hope you will use this money wisely."

Such kindness brought tears to Amir's eyes, and he quickly said, "Thank you for Shah's kindness, we will not let you down."

Why not just give it directly? Naserdin felt that giving it directly would make him appear to be doing charity, and would also make people think he was a puppet of the Shah controlled by the government.

Purchasing government bonds not only solves the government's funding shortage but also increases the royal family's income. Why not do it?

Soon, the government introduced a new national debt issuance plan. A total of 1000 million riyals of ten-year bonds were issued, with an annual interest rate of 3%. The Shah kept his promise and directly purchased 700 million riyals of bonds. The remainder would be purchased when fighting Russia, and Amir felt that he already had plenty of funds.

(End of this chapter)