Persian Empire 1845

Chapter 138 When the cannons roar, gold flows like water.
As the Iranian flag flew over the walls of Yerevan, soldiers began a frenzied reprisal against the remaining Russian and Armenian defenders, killing over seven hundred wounded, beheading them, and dismembering their bodies, while Iranian officers stood by and watched.

Most Armenians fled Yerevan with the Russian troops, hastily packing their belongings and pushing carts behind them as the Russians retreated north.

The Russian general told the Armenians that if they wished, they could join the Russian army and march north to become subjects of the Tsar. No sooner had he spoken than the entire village sprang into action, each person bringing their wife, children, and livestock to the bridge to cross the river.

Chaos was also seen in villages near Yerevan. Many disloyal Russian soldiers took advantage of the chaos to desert and hide in the city, issuing proclamations threatening residents to hand over the deserters. The volunteers who had joined the Russian army had vanished; they had fled to various places, as long as there were no Russian troops around.

Osterman also said his farewell: "Gentlemen, we are leaving here for now, but I hope to return soon—just like in 1828."

Of Yerevan's 60,000 inhabitants, only one-fifth remained! Only a few houses were still intact, and thieves reappeared, not content with looting homes, they also robbed several churches.

The retaliatory actions had a distinct religious undertone. However, there were also some Armenians in the Iranian army who stopped their comrades from killing and only looted local property. This was the final line they crossed.

After Osterman fled, the garrison troops in the surrounding towns also fled. The officers had failed, and they were not going to turn the tide, so what were they doing here?

Britain and France, in their involvement in the war in Iran, heavily promoted Iran's participation as a defense of civilization, with even The Times singing its praises. They lauded Iranian society as harmonious and its people as warm and welcoming, making Iran appear as if it were a friend of Europe.

At the time, many British parliamentarians believed that the war was intended to curb Russia's aggressive ambitions. Britain's primary objective in participating in the war was not to defend Sudan and the Ottoman Empire, but rather to prevent Russian intervention.

Both Britain and France support Iran's actions, but their actual support is minimal, aside from discounts and early delivery of goods ordered by Iran. And Iran's coffers are also facing problems.

“Shah, we have underestimated the cost of the war. At the current rate of expenditure, the government will need to spend 1500 million riyals by the end of the year, and 2200 million riyals next year to keep it going.”

As expected, war is very expensive, costing 3700 million in less than two years. This money was mainly used for manufacturing supplies, paying soldiers' and laborers' wages, and expanding factories.

"Let's leave it at that for now. We'll see if we can save some money from other sources in next year's budget. If all else fails, we can take out loans from Britain and France or issue government bonds."

Nasserdin had no better options; the saying goes, "When the cannons roar, gold pours in." It was quite remarkable that Iran, a country with just over 1000 million people, could raise 4500 million. This was even worse than Japan, which had vast gold and silver mines, while Iran had yet to discover any.

However, war wasn't all bad; industrial investment in Iran doubled after the war began. The textile industry, in particular, saw 20 textile factories registered with the Ministry of Industry and Commerce, as profit margins for cotton yarn and fabric had exceeded 120%.

Besides textiles, the food industry was also thriving. Due to the impact of the war, applications for bank loans to start factories increased significantly, and with huge profits at hand, people naturally followed suit and invested.

The Finance Minister could only thank the Shah and leave; such matters had to be resolved by them. However, he was losing a lot of hair.

Naserdin quickly instructed Saeed to write to Bahram and Nasser, telling them that no matter what, they had to earn £1000 million.

A knocking sound interrupted the Shah's reverie.

"Come in." At Nasser al-Din's command, a guard entered, bowed to the Shah and the steward, and said, "British Ambassador Wallace requests an audience."

Nasserdin was prepared when he heard that the British ambassador was requesting an audience. Since Iran declared war on Russia, the British and French ambassadors had been meeting with this minister and then holding parties, but had refused to see the Shah. Now that he had finally arrived, he said to the guard, "Please let him in."

A short while later, Ambassador Wallace entered the Shah's office. He bowed and greeted Nasser al-Din.

"I wonder what business the Ambassador has with me?"

Wallace, ignoring Nasserdin's obvious rhetoric, continued, "Your Highness, the British government takes this war very seriously. Your country's participation in the war against Russia is the right thing to do. My country hopes to discuss the situation with your country beforehand regarding the aftermath of the war."

Goodness, the war has only been going on for a few months and you're already saying it's over. However, this war has already attracted other countries to join or take sides.

Greece would definitely side with Russia, as both are Orthodox Christians and still yearn for Constantinople. Sardinia, on the other hand, sided with Britain and France, believing this would secure French support for unifying the Italian peninsula.

To the relief of Britain and France, Prussia chose neutrality between the two powers. This was a diplomatic victory, avoiding the risk of a major European war.

Downing Street's policy toward Iran is to prevent its downfall. They need Iran to contain Russian forces in the Caucasus, and for this purpose, they have prepared an important contract.

"Your Excellency Shah, in order to show our support, our country is willing to lend money to your country. This is the contract."

Nasserdin looked at the terms of the contract with some surprise. Britain was willing to lend £500 million to Iran at an interest rate of 2.5%, to be repaid over 20 years.

These terms are quite favorable, and the interest rate is proactively set below 3%. This saves a lot of interest.

From Britain's perspective, as long as Iran can hold out, a lower interest rate is acceptable. Moreover, if Iran cannot repay, Britain can take the opportunity to penetrate deeper into Iran and control all aspects of its affairs.

"Thank you for your kind offer, but our country does not need a loan at present. However, if there is a need in the future, our country will give this priority."

Since the Shah disagreed, Wallace couldn't force him to agree. He had no choice but to leave.

Nasserdin was reluctant to borrow money, especially from Britain and France; it was practically digging a pit for him to fall into. If he couldn't repay it, he'd be in big trouble.

Nasserdin is now pinning his hopes on the East, where, according to the timeline, civil war has broken out. If he can sell some assets during this period, he could alleviate Iran's financial situation.

(End of this chapter)