Persian Empire 1845

Chapter 606 New Year
Thanks to the efforts of the Iranian government and the Shah, Iran began to recover from the economic crisis. Factories produced goods in large quantities and exported them to countries such as Austria and Spain through trade agreements. The existence of numerous colonies directly led to the decline of local handicrafts.

The agreement with the Far East was reached in the past few months, allowing Iran to export a large amount of goods to the Far East. Meanwhile, Iran also secretly negotiated with local officials to help them build several factories, such as the Tianjin Machinery Bureau and the Lanzhou Machinery Bureau.

While the 4.5% annual interest rate offered by Iran is relatively high, it's still incredibly reasonable compared to the 6% or higher rates often charged by Britain and France. And there are absolutely no strings attached.

Iran's good relations with the Far East have directly strained Britain's defenses. Did they really acquire what they gained through several wars with the Far East, and then use that to their advantage? It's like they're the good guy and the bad guy—how can that be reasonable?

The UK imposes particularly high tariffs on Iran, as outlined in the latest parliamentary approval. These tariffs are 37% on Iranian textiles, coal, and iron; 49% on chemical dyes; and 55% on petroleum products.

France is not far behind, imposing tariffs of around 40% on Iranian goods. In retaliation, Iran has also significantly increased tariffs on major exports from both countries, but has offered preferential treatment to Austria.

Trade between the two countries reached 1.2 million riyals last year, a surge of 18%. Some Austrian businessmen, taking advantage of varying tariffs on Iranian goods in different countries, are importing large quantities, rebranding them, and then re-exporting them to other nations. This is because Iranian goods are genuinely of high quality.

Take, for example, an Austrian businessman who was removing the original labels from Iranian cotton fabric, replacing them with a new "Made under the supervision of the Vienna Textile Factory" label, and then shipping it to Marseille, France. There, the tariff on Austrian goods is only 12%, far lower than the 40% tariff on Iranian goods. This arbitrage alone earned Cohen 20 francs in the first half of the year.

The trade war continues to rage across Europe. In July, the British Parliament passed a new tariff bill, raising the tariff on Iranian textiles from 35% to 52%, citing "Iranian oil impacting British domestic industries." In retaliation, Iran announced a 45% tariff on British cotton yarn and reduced import tariffs on Austrian steel to 8%. This move directly boosted Austrian exports to Iran by 23% in the third quarter, and steel mills in Vienna even established a dedicated "Iran-specific production line" to produce rails that meet Iranian standards.

France retaliated by imposing a 30% tariff on Iranian chemical dyes, but unexpectedly, Iran switched to supplying dyes through Austria and Spain, then relabeling and exporting them, causing French businesses to lose orders worth nearly a million francs.

The Ottoman Empire also moved closer to Iran, forcing Sudan to sign the Istanbul Trade Agreement with Iran, which significantly reduced import tariffs on Iranian industrial goods. Furthermore, it allowed Iranian merchant ships to use ports such as Izmir and Beirut on more favorable terms in exchange for Iranian investment in the modernization of Ottoman ports.

The Eurasian United Bank opened branches in major Ottoman cities. It not only provided settlement services for trade between the two countries, but also increasingly offered loans to the Ottoman government and local businesses, gradually replacing the functions of European banks.

Regions bordering Iran, such as Anatolia, experienced a brief period of prosperity due to trade routes and infrastructure investment. Businessmen with close ties to Iran seized this opportunity to make a fortune.

The natural disaster exacerbated the situation; the Anatolian drought that began last year was accompanied by a widespread locust plague, with locusts devouring crops and grasslands already withered by the drought. Food prices began to soar.

Disasters are calamities for the people, but also opportunities for other countries to infiltrate. Shia mosques and clergy began distributing flour and other food to the people, leading them to believe that the Shia were better, and that the Sunni masters didn't treat them like human beings. Ottomans who had the opportunity to work in Iran brought back the novel concept of mutual aid societies, saying that they could receive relief by paying a small fee. Even if someone died in an accident, their family could receive a sum of money.

This is quite unusual, as they've never done this before. Waqf are generally the private property of mosques and are rarely used for charity. Even after being taken over by the government, they've never seen the government use a single penny for them. The fact that Iran can do this makes the resentment even deeper.

The mutual aid society in Iran is making rapid progress in ten cities. Even in Najaf, Qom, and Mashhad, where the religious atmosphere is strongest, the membership rate has reached 60%, 55%, and 51%, respectively. There's no other way; joining at least provides some security, while not joining means nothing.

Mutual aid societies typically distribute goods. Members can receive a fixed amount of flour, beans, fuel, cloth, or medicine by presenting relief coupons. This is generally enough to sustain a family until they find employment.

The policy was best implemented in Baghdad and Tabriz, because one was the capital and the other the most industrialized city. Their large worker populations meant they needed the most relief. In Tabriz alone, over 100,000 people required assistance.

Such relief also requires financial support, so the Wakov Committee, responsible for management, sorted out and invested its assets. On one hand, it was responsible for revitalizing the "dead assets" such as Wakov land and buildings under its trusteeship to generate stable rental income. On the other hand, it leased abandoned Wakov farmland to landless farmers or agricultural companies on a long-term basis, collecting rent in kind or in cash. It also leased Wakov shops and inns within the city to merchants.

In Isfahan, over 30,000 acres of land have been leased to farmers under 20-year agreements. 15% of the annual harvest is paid as rent to the committee. The committee then allocates 70% of this cash equivalent to local mutual aid societies for relief. The remaining 30% is deposited into a "reinvestment pool." Farmers receive the majority of the income and begin to increase the value of their land.

For orchards, date palm groves, etc., the committee provides the land, the farmers provide the labor, and the harvest is divided according to a pre-agreed ratio. This is entirely in accordance with Islamic law.

The mutual aid society prepaid funds to large caravans to purchase necessities such as grain, cotton, and medicine. After the goods were sold, the mutual aid society recovered its principal and received a share of the profits. This guaranteed returns and also helped to stabilize prices.

The result is that barren land becomes valuable, farmers gain a livelihood, relief funds are generated, and the fund increases in value. Everyone benefits from this, except for the mosque.

Those clergy members have been transformed from independent individuals into salaried government employees, and there are even rumors that the government plans to implement a single-status system for clergy, prohibiting them from marrying and having children, supposedly to ensure their loyalty to the prophets. While the veracity of this is unknown, if it were implemented, they would likely have even less say.

(End of this chapter)