Persian Empire 1845

Chapter 149 Economic Expansion
The outcome of the Battle of Gyumri not only affected European perceptions of Iran, but also the internal situation.

Omar Street in Tehran is the most concentrated area for industry and commerce. Most of the founders of modern factories conducted their business here.

"How's business lately?"

"Great! The cotton fabric produced is being sold directly, and cities everywhere are scrambling to buy it. We're preparing to expand production."

The profits from the war boosted Iranian industry, with investment in Tehran's textile sector doubling. Profit margins even exceeded 100%. This prompted Iranian businessmen to invest their capital in machinery production, and industrial loans from banks surpassed 700 million rials.

However, the bank isn't worried about their inability to repay. As things stand, the factory's profits are enough to cover their monthly loan payments. And the business owners no longer need to resort to loan sharks; banks are safe, and the interest rates are low—isn't that perfect?
"The government says it's going to invest in Yerevan and Baku, but the war isn't over yet. I think we should be careful," a man said worriedly, looking at the newspaper.

But this was countered by another person, "Don't worry, didn't you see those Russian prisoners? I originally thought they were very tough, but they looked so vulnerable."

Yes, as newspapers filled with reports of the prisoners, the illusion surrounding the Russian army gradually shattered. It turned out they weren't invincible. As a result, the Russians still in Iran had to find ways to leave, and their belongings, even at half price, were unwanted. Ultimately, they could only be sold for 30% of their original value or even less.

To better regulate investment, the Iranian government has introduced various policies to promote industrial development. The Federation of Industries has also played a significant role, sending industrial delegations to countries such as the UK, France, Prussia, and the Netherlands to learn about industries like textiles and mining. They have also established industrial expos and launched the "Business Daily" to explain new industries to the public.

Driven by its government and various organizations, Iran's industrial development is better than any other country in West Asia. Particularly among the three Crescent powers—the Ottoman Empire, Iran, and Egypt—Iran boasts the best industrial sector.

Everyone was enthusiastically cheering for the economic recovery, while high-ranking officials, including Larijani, president of the Federation of Industries, were discussing new investment directions. War was indeed one way to stimulate the economy, but their eyes were already turned to the East.

After the Shah agreed to establish the Banque de l'Indochine and the government contributed 200 million riyals, the remaining 300 million riyals had to be contributed jointly by them. This was a joint-stock bank, so naturally they had to contribute capital.

Of this money, the Iranian Chamber of Commerce will contribute 140 million, and these individuals will contribute 160 million. Once they have raised 500 million, they will conduct business in China. If all goes well, they will be able to receive a dividend every year.

"Everyone, since there are no problems, let's all chip in. I'll contribute 25."

"I'll pay 15"

"I have 8."

The 160 million was raised quickly, and the money would be sent to Dongfang as principal for the bank.

"I never expected the Shah would approve this; I thought there was no hope." "This is also to open up sales channels; otherwise, how can we govern a place seized from thousands of miles away?"

Some goods produced by Iranian industry began to be sold in the East, and Iranian merchants in the East were responsible for the sales. However, the two regions are too far apart, and Iranian local banks currently have no reach in the area, so an Eastern Bank was established to handle local finances.

At this time, the millions of people in Cambodia and Cochinchina became targets for Iranian goods. In the very first year of the colony's establishment, Iran exported 30 rials of cloth, and this figure increased year by year. After Arab tribes, the Ottomans, and Europe, Iran found its fourth export destination.

Iran attaches great importance to this region, and the governor plans to develop Saigon into an important transshipment port. This has attracted many people, including those from Britain and France. It is believed that the region will soon prosper.

Larijani thought for a moment, then continued, "Gentlemen, this investment is our first step into Qing China. The British have been there for over a decade, and we must seize this opportunity."

But let's not forget, Iran is our homeland. We build factories not just to make money, but to build a more advanced country. Only with a strong government can we preserve everything we have.

Everyone agreed with this statement; they didn't have the courage of British and French merchants to challenge the government. Besides, look at Prussia, isn't it quite good? At least it wasn't as oppressive as Russia.

At the same time, in order to gain more government support, they also did their best to repay the government. For example, to counter Russia's first batch of 500 million bonds, they purchased 300 million. This money could be made up for by exports.

This winter has been quite lively in Iran, with people from all walks of life celebrating. After all, of all the countries, Iran has achieved the greatest results, while the Russian army can only hold its ground in Georgia, waiting for reinforcements to arrive.

But trouble followed in the North Caucasus. The Chechens had already taken control of many areas, and their leader, Shamil, declared independence, establishing Grozny as the capital.

The Chechens captured Grozny after a two-month siege, at the cost of 4000 lives, but gained a vital fortified city. Shamil established Divan (government) there and built a defensive line in the north to prevent Russian troops from advancing south from the Astrakhan region.

At this time, Chechnya controlled a population of over 30, mostly Christians. Shamil declared that this was their revenge against infidel Russia, and that men, women, and children should all join in; if they failed, death would be their only fate.

Even the Circassians and other Caucasians in the Ottoman Empire were preparing to return to their homelands via Iran. Who would willingly leave their homeland if they couldn't survive?
Now that they've finally gained momentum, they absolutely must go back; even if it means death, it's worth it.

The unrest in the Caucasus forced St. Petersburg to adopt even harsher policies while continuing to conscript soldiers from the countryside. At this time, Russian bonds were in dire straits on the Prussian financial market, sometimes selling for as much as 60% of their face value. Bankers were raking in profits, but the Russian government remained short of funds.

Finance Minister Blok attempted to cover the deficit through two external loans totaling 1 million rubles, issuing bonds worth over 4.2 million rubles, and borrowing from state-owned banks. However, the current situation necessitates interest rates above 4.5% to attract buyers. At times, rates have even reached 6%, as many believe Russia is doomed and defeat is inevitable unless General Winter continues his powerful influence.

(End of this chapter)