viii. “Big Merchants” in the Late Qajar Period
This entry deals with the economic, social, and political life of the Iranian “big merchants” (tojjār-e bozorg) and entrepreneurs (estimated at 250-350 in number) in the late Qajar period (1870-1914). Big merchants, most of them Muslims, with a few Zoroastrians, Armenians, and Bahais, constituted Iran's local economic elite (aʿyān) in the first globalization era. They reached the height of their influence in the late 19th and early 20th centuries. The tojjār made a major contribution to the country’s economic growth and had a significant impact on key political developments in the late Qajar period (for brief biographies of tojjār, see Bāmdād, I-VI, passim; Picot, pp. 63 ff.; Churchill, 1905, pp. 10 ff.; idem, 1909, pp. 7-8). This entry is divided into sections: (1) economic aspects; (2) social and cultural aspects; (3) political aspects.
(1) ECONOMIC ASPECTS
The focus of the tojjār’s economic activities was foreign trade; they were major exporters and importers. Their concentration in foreign trade distinguished them from other groups of merchants, mainly the brokers (dallāls) and wholesale dealers (bonakdārs). Iran’s foreign trade grew rapidly during the 19th century. Between 1800 and 1914, total visible trade (combined figures for imports and exports) is likely to have risen from some 2.5 million to 20 million pounds sterling (in current prices). Most of this increase, in both relative and absolute terms, occurred during the second part of the period; between 1860 and 1914 total foreign trade grew from some 4 or 5 million to 20 million pounds, a fourfold or fivefold increase in real terms (Gilbar, 1986, p. 76; Issawi, 1971, pp. 130-32). The emergence of the global economy, Iran’s growing involvement with the world economy, and internal economic and social changes explain this impressive growth. The structure of foreign trade had also undergone drastic changes. During the course of the 19th century, Iran became a major importer of textiles and “colonial goods” (mainly tea and sugar), which constituted about 66-70 percent of total visible imports in the latter half of the 19th and the early 20th centuries. Changes in the composition of exports were no less striking. Hand-woven carpets, opium, and raw cotton, three products that were barely exported in the first half of the century, became leading items in Iran’s exports (about 38 percent) in the late 19th and early 20th centuries (Issawi, 1971, pp. 135-36; see ECONOMY viii). Two groups of merchants specializing in international trade were involved in this growing trade, the Iranian tojjār and foreign merchant houses. Though it is impossible, for lack of quantitative data, to calculate the relative share of the tojjār in Iran’s foreign trade transactions, it is, nevertheless, evident from numerous Iranian accounts and foreign (British, Russian, French, Belgian, Italian, and American) consular and trade reports that in the latter half of the century significant export and import commodities were totally or partially controlled by them. This was particularly evident with regard to several major export items: carpets, opium, and raw cotton (Abdullaev, p. 33; Edwards, pp. 55-56; Gilbar, 1978, pp. 340-41; Walcher, pp. 19-20). There is also no doubt that the Iranian tojjār were in control of most wholesale trade. As a result of their international and domestic commercial activity, the tojjār enjoyed high rates of profitability in the last decades of the 19th and the beginning of the 20th centuries. These were the golden years of the tojjār. Notably, on the basis of partial information published by European observers of the late 19th and early 20th centuries (Curzon, II, p. 572; Litten, pp. 102, 185), it has been claimed in recent years that foreigners (mainly Russian and British merchants) controlled the bulk of Iran’s foreign trade in the period under discussion (Issawi, 1971, p. 104; idem, 1991, p. 600; Floor, p. 133; Abrahamian, p. 37). These assertions, however, do not take into account the great amount of information on the commercial activity of the Iranian big merchants to be found in primary sources.
Most of the tojjār specialized in the export or import of certain goods, and only a few traded in a wide variety of both exported and imported commodities. Within the framework of their international commercial activity, the tojjār established several joint stock export-import companies, of which the Fars Trading Company (Kompani-e Fars), founded in Shiraz in 1890, was perhaps the most profitable (Forṣat, p. 537; Lorini, pp. 350-51; Jamālzāda, p. 98; Abdullaev, p. 36). The tojjār were also known for their success in building effective networks both in Iran and abroad. Domestically, these networks secured the flow of raw materials as well as finished goods for export, while guaranteeing ready markets for imported goods. Abroad, these networks consisted of branches or agents in the major commercial centers in the Middle East (Istanbul, Trebizond, Cairo, Aleppo, Baghdad, Basra, etc.), Russia (Baku, Moscow, Odessa), India (Bombay, Calcutta), and China (Hong Kong, Shanghai). Several tojjār also had agents in a few commercial and industrial cities in Central and Western Europe (Manchester, London, Berlin, Paris, Marseilles, etc.), but on the whole, their presence and involvement in European markets were limited (Fasāʾi, 1894-96, II, pp. 52, 60, 131; Polak, II, p. 190; Gilbar, 2005, pp. 184-85, 187-89).
Besides foreign trade, the tojjār played an active role in most other sectors of the economy. They were particularly involved in the cultivation and production of export goods. In agriculture they were especially active in the expansion of opium cultivation. The tojjār of Isfahan, Yazd, and Shiraz were known specifically for their investments and enterprises in this area. Āqā Moḥammad-Mahdi Arbāb Eṣfahāni, the founder of Kompāni-e teryāk-e Eṣfahān, is a well-known example of a merchant-entrepreneur who showed impressive initiative in the introduction of the cultivation of opium into Isfahan and other provinces (Arbāb Eṣfahāni, p. 125; Taḥwildār Eṣfahāni, p. 58). The tojjār were also prominent in the development of the hand-woven carpet industry. Tojjār of Tabriz and Kerman were especially enterprising in this field (de Vries, p. 732; Beyens, p. 30; Rittikh, p. 210; Edwards, pp. 55-56; Waziri, pp. 36, 189; Ittig, pp. 119-21; see KERMAN xv. CARPET INDUSTRY). Investments were also made by the tojjār in modern industries: cotton mills were established in Tehran, Tabriz, Isfahan, and Sari, porcelain factories in Tehran and Tabriz, a sugar refinery in Mazandaran, a paper mill in Isfahan, a silk reeling factory in Rasht, etc. (Jamālzāda, pp. 93-96; Abdullaev, p. 127; Ashraf, 1980, pp. 82-86; Gilbar, 1986, p. 83; Kazembeyki, p. 85). The first electrical plants in Iran (Tehran, Tabriz, Mashad, and Rasht) were built as a result of tojjār’s initiatives. Further, the big merchants made considerable investments in the development of transportation. An interesting example was the Nasiri Company (Kompāni-e nāṣeri), established in late 1888 by the Bušehri brothers (Āqā Moḥammad Moʿin-al-Tojjār and Ḥāji Moḥammad-Mahdi Malek-al-Tojjār) together with several other big merchants and notables. The company operated steamers on the lower and upper Kārun River during the 1890s and 1900s, and also laid a tramway in Ahwaz in 1890 (Lorimer, I, pt. 2, pp. 1726-28; Jamālzāda, p. 99; Shahnavaz, pp. 171-73; Walcher, pp. 75-76). The first Iranian-owned railway line was initiated and financed by Ḥāji Moḥammad-Ḥasan Amin-al-Żarb. Inaugurated in 1890, it ran from Maḥmudābād on the Caspian Sea to Āmol (some 21 km)(W. Olson, pp. 38-55; Sh. Mahdavi, 1999, pp. 133-34). Lastly, the tojjār constituted the most significant component in the small group of principal traditional bankers in Iran. They made loans to the shah, the upper echelons of the administration, landowners, and senior ulama, while also supplying the ṣarrāfs (money exchangers and lenders) of the bazaars with cash, which they in turn would lend to small borrowers. Together with prominent ṣarrāfs, the tojjār established several credit companies, for example the Etteḥadiya and the Masʿudiya companies (Greenfield, 1909, p. 61; Jāmālzāda, pp. 98-99; Abdullaev, pp. 36-37; Floor, pp. 127-28; Ashraf, 1980, pp. 77-78; Etteḥādiya, pp. 311-12;). Some of these companies were formed as a response to the establishment of European banks in Iran, namely The British Imperial Bank of Persia (Bānk-e šāhi-e Irān; 1889) and the Russian Loan Bank of Persia (Bānk-e esteqrāżi-e Rus; 1890).
The tojjār’s initiatives and investments, particularly in foreign trade, yielded enormous profits within a relatively short span of time. Many tojjār of the late 19th century were born to established big merchants families (e.g., Moḥammad-Kāẓem Malek-al-Tojjār, Moḥammad Moʿin-al-Tojjār Bušehri, Arbāb Jamšid, ʿAli-Akbar Širāzi), but others sprang from lesser merchant, ṣarrāf or artisan families, starting their businesses with very limited capital. Perhaps the most striking example of a “self-made” big merchant-entrepreneur is Moḥammad-Ḥasan Amin-al-Żarb. He was born to a low or middle rank sarrāf family in Isfahan and started his career with hardly any operating capital (Sh. Mahdavi, 1999, p. 19). No doubt, entrepreneurship in foreign trade was an effective channel for socio-economic mobility in late Qajar society. Within two or three decades, the tojjār, whatever their background, acquired immense property. The assets of most tojjār were estimated at between 500 thousand and one million qerāns (in the late 1890s and early 1900s, 50-55 qerāns were equal to 1 pound sterling). The most prominent tojjār (e.g., Moḥammad-Ḥasan Amin-al-Żarb, Moḥammad Moʿin-al-Tojjār Bušehri, Moḥammad-Taqi Sāhrudi, Moḥammad-Kāẓem Malek-al-Tojjār [Tehran], Moḥammad-Ḥosayn Kāzeruni, Moḥammad-Ebrāhim Malekal-Tojjār [Isfahan], Moḥammad-Esmāʿil Maḡāzaʾi Tabrizi, the Tumāniān Brothers, Arbāb Jamšid and Mirzā Moḥammad-Taqi Wakil-al-Dawla) possessed assets valued by their contemporaries at many millions of qerāns; guesstimates ranged between 19 and 250 million qerāns for each of these merchant-entrepreneurs (Waziri, p. 159; Moḵber-al-Salṭana, p. 100; Stolze and Andreas, p. 50; Picot, pp. 63-67, 90, 91; Churchill, 1906, p. 41; Abdullaev, pp. 34-35; Ashraf, 1980, pp. 74-75). In addition to stocks of raw materials and finished goods, their investments included real estate (both rural and urban lands), various means of production (subterranean canals [qanāt], bridges, workshops, factories, and shops) and means of transportation and distribution (caravanserais, beasts of burden, sailing vessels, and steamers; Fasāʾi, 1894-96, II, pp. 26, 27, 76; Gazetteer of Persia, 1905 ed., II, pp. 12-13; idem, 1914 ed., II, p. 186; Nāder Mirzā, pp. 55-56; Floor, p. 104; Ashraf, 1980, p. 28). In the last decades of the century, the tojjār channeled a growing portion of their income to the purchase of agricultural lands, and several of them became major landowners with hundreds of villages in their possession (Gilbar, 1978, p. 340; Nowshirvani, pp. 578-79). Several prominent tojjār also invested part of their capital outside Iran, in the Ottoman empire, Egypt, India, Russia, France, and England. These patterns of investment had an economic rationale, but social considerations and safeguarding property rights also played an important role (Picot, p. 63; Abdullaev, pp. 34, 177-78). Significantly, the tojjār kept large reserves in cash for a high degree of liquidity; for example, Moḥamad-Ḥasan Amin-al-Żarb transferred a huge amount (all in all 8 million qerāns) in cash at short notice from his personal reserves to the central government coffers in order to terminate his arrest in 1896 (Kosogovskii, p. 119). Other elite groups in Iranian society, such as large landowners, high-ranking bureaucrats, and senior ulama, also possessed property of huge value, but most of them were short of liquid funds. To cover their expenses, they were dependent on loans that the tojjār were in a position to grant. The tojjār’s ready supply of cash thus assured them unique influence and power.
Not all the initiatives and investments of the tojjār were purely business-oriented. They also invested in social services, transcending the quest for profits. Their endeavors in the area of education were particularly notable. They established or contributed to the upkeep of secondary schools, including one for girls in the capital, and public libraries. At the same time, they also allocated funds to Islamic educational institutions and to various welfare bodies through direct contributions or through the establishment of awqaf (Fasāʾi, 1894-96, II, p. 60; Dawlatābādi, I, pp. 249-50; Ashraf, 1980, p. 28; Martin, p. 54; Litvak, pp. 36, 84, 92, 182; Linton, p. 73).
While on the whole there is no doubt that the tojjār made an important contribution to economic growth and modernization, as well as to social development, certain areas of their activities were associated with negative effects, two of which were particularly harmful: (1) the cultivation of opium, which resulted, inter alia, in the great increase of the number of Iranians who consumed opium and became addicted to it (Gilbar, 1978, pp. 330-31); and (2) the expansion of hand-woven carpet production, which brought about the employment of very young children (sometimes 4 or 5 years old), mostly girls. Many of these children suffered from bone deformation as they grew up (Helfgot, pp. 258-62). Clearly, the tojjār did not propagate the consumption of opium or the employment of children in the carpet industry, but there is no evidence that they tried to prevent or limit these widespread phenomena.
(2) SOCIAL AND CULTURAL ASPECTS
Social control of the tojjār by the state was loose and less defined in comparison to most other sectors of Iranian society under the Qajars. The tojjār were not obliged to form guilds, and hence there was hardly any government control over their professional practices. The authorities were, however, assisted by the malek-al-tojjār in their relations with the tojjār. It seems that this office already existed before the 19th century, but only in 1844 did Moḥammad Shah (r. 1834-48) order that a malek-al-tojjār be appointed “in every place in Persia where extended commerce is carried on” (Hertslet, 9, p. 614). By the second half of the 19th century, big merchants acting as malek-al-tojjār were to be found in all or most major commercial centers of the country (Eʿtimād-al-Salṭana, 1886-89, II, p. 270; III, pp. 2, 4-5, 25, 33, 120; Fasāʾi, 1894-96, I, pp. 308-9; II, p. 205). During Nāṣer-al-Din Shah’s reign (r. 1848-96), the malek-al-tojjār of Tehran was recognized as the supreme “king of merchants,” holding the title malek-al-tojjār al-mamālek. The holder of the title was not a government official, and he did not receive any official payment for the services he rendered. He was nominated in a two-stage process, in which both the tojjār and the authorities were involved: the big merchants of a given town would recommend one of their colleagues to the authorities, who would then nominate him to the office and confer the title malek-al-tojjār upon him (Polak, II, p. 188; Greenfield, 1904, p. 143). In most cases he was a highly respected and influential member of the local tojjār. He had two main functions: (1) he represented the big merchants before the authorities, bringing their requests, complaints, etc., to government officials or ministers for their attention or approval; and (2) he was expected to settle business disputes among the tojjār themselves and between the tojjār and other groups in the commercial community, both local and foreign. In order to perform the latter function, he convened several prominent big merchants, who together formed an assembly (majles, ejlās) that heard the parties and sought to end the dispute by a compromise (Greenfield, , p. 27). Although the assembly was not a formal court with recognized judicial authority, it nevertheless enhanced the big merchants’ social standing.
The extended family in most cases formed the basis of the organizational structure of tojjār businesses in Iran and abroad. It was an informal organization based on loyalty and trust among its members. The involvement of brothers and sons of the leading member in the family business was of crucial significance. Clearly, there was a preference for marriages between tojjār families. Though commercial competition and business contention within tojjār communities were common and could be quite fierce, it seems that an ethos of tolerance and collegiality prevailed, manifested in the preference to solve business disputes by arbitration and compromise rather than a clear-cut judicial decision. The fundamental concept underlying the work of the Malek-al-Tojjār’s assembly was to avoid, in any way possible, a win-lose situation in which one side would leave the court deeply disappointed and embittered. No wonder, then, that when the tojjār were faced with a growing threat to their position from foreign merchants and investors in the 1880s and 1890s, they were able to join forces, and many of them invested large sums in local joint-stock companies. Moreover, in their disputes and struggles with government officials or with foreign subjects, more often than not the prominent tojjār backed each other (Gilbar, 2011). Hence, in spite of the individuality that characterized the mode and framework of their business activity, a high degree of group solidarity existed among the Iranian tojjār.
The world-view of the tojjār was a unique combination of traditional and modern attitudes. On the one hand, the tojjār were educated in Islamic educational institutions and led a conservative lifestyle. But, on the other hand, the international dimension of their businesses exposed them to economic, social, and political developments in foreign countries. Several tojjār spent long periods in European countries, while others made periodic business trips to France, England, Germany, Belgium, Russia, etc. These tojjār were impressed, not only by the European technological innovations and economic progress, but also by French, British and even Russian social and political norms and institutions, particularly the rule of law and the restraints to absolute power (Sh. Mahdavi, 2002, pp. 273-74). They came to believe that reforms in these areas in Iran were vital for safeguarding the sovereignty and furthering the prosperity of the country. It was no wonder then that tojjār invested in modern education. In the years preceding the Constitutional Revolution, they also supported Iranian newspapers abroad, such as Ḥabl al-matin (Calcutta), Aḵtar (Istanbul), Ṯorayyā and Parvareš (Cairo), and Qānun (London), which advocated economic and political reform (Algar, p. 236; Pistor-Hatam, 1995, pp. 570-74; idem, 1999, pp. 52-54). In this context tojjār also joined or supported the pro-reform secret societies (anjomanhā-ye melli) in the capital (Lambton, 1957, p. 53).
The tojjār enjoyed a high social status and were regarded by both the upper and the lower classes of society as part of the local elite. Moreover, both Iranian and European observers of the 19th and early 20th-century Iranian society expressed a high regard for the honesty and generosity of the tojjār (Šamim, p. 294; Polak, II, p. 187; de Rochechouart, pp. 168-69; Brugsch, p. 239; Tomar, p. 107; Greenfield, , p. 26). Naturally, not all held positive views about them (Wills, pp. 188, 192), and there were cases in which individual tojjār were blamed for breaching the trust of their partners, clients, or the public at large; for example, Moḥammad-Kāẓem Malek-al-Tojjār was accused of abusing the funds of ʿOmumi Company (Šerkat-e ʿmumi; Bāmdād, III, pp. 141-42), and Moḥammad-Ḥasam Amin-al-Żarb was held responsible by his contemporaries for the debasement of the copper šāhi coin (Afżal-al-Molk, p. 52).
The economic, social and political positions and roles of the tojjār were greatly influenced by their relations with three categories of institutions or social groups: (1) the government and the upper echelon of the central and provincial bureaucracy; (2) the Muslim religious leadership (the senior ulama); and (3) the foreign, mainly European, firms (merchant and investment houses and banks) active in Iran.
Relations with the government played a key role in the rise of the tojjār. These were based, until the early 1890s, on the following foundations. First, interference by the authorities in the tojjār’s commercial activity was minimal. There were hardly any state regulations, or any government control, over local large private enterprises. With very few exceptions, a license was not required to open a new wholesale or foreign trade enterprise (Greenfield, , p. 27). Second, the government did not levy direct taxes on the big merchants. They had to pay indirect taxes, mainly customs on both imports and exports, and road taxes (rāhdāri), but the rate of these taxes was relatively low (customs duties until the customs reform at the beginning of the 20th century ranged between 2 and 5 percent ad valorem; rāhdāri levies in most routes were usually higher). Third, the property rights of the tojjār were on the whole respected by the authorities, despite significant exceptions that vexed the tojjār. Notably, most of the big merchants managed to bequeath the property they had accumulated to their descendants. Fourth, the unfavorable and for many years negative attitude of Nāṣer-al-Din Shah (r. 1848-96) towards European economic penetration into Iran gave the tojjār a significant advantage over their foreign competitors (Bāmdād, III, p. 354; Gilbar, 2011a, p.16). Fifth, in various ways the shah was ready to support the tojjār in their efforts to expand their economic activities. He granted them lucrative concessions (Ashraf, 1980, pp. 78-79) and for a short period even encouraged them to play an active role in shaping Iran’s economic development (Ādamiyat and Nāṭeq, pp. 310-13, 346-47; Gilbar, 2008, p. 666). As long as these conditions were preserved, the tojjār served the rulers of the country faithfully. They granted them generous loans at agreeable interest rates; supplied the court and high-ranking officials with exclusive goods; and gave frequent “presents” (piškaš) which were in fact a sort of obligatory indirect tax (Lambton, 1994, pp. 157-58). Since the government did not play a central role in securing the supply of basic commodities, it was aware of the contribution of the big merchants to the stability of the markets. Moreover, the government could count on the commercial potential and ability of the big merchants in periods of logistic crisis (Picot, pp. 114-15; Afżal-al-Molk, pp. 288-89; Sh. Mahdavi, 1999, pp. 160-61). This pattern of relations underwent dramatic changes in the last decade of the 19th and the early years of the 20th centuries (see below).
The tojjār’s relations with senior ulama in the main cities were also of considerable importance. These relations had several facets. A close affinity existed between the two groups, as many ulama came from merchant families, and most tojjār received their formal education in Islamic institutions and shared norms and values with the ulama. Both groups also had common interests or common attitudes, in particular regarding their objection to, and rejection of, the growing economic penetration of European companies and foreign industrial products into the Iranian economy. In 1899, tojjār and ulama established the Islamiya Company (Šerkat-e eslāmiya) in Isfahan to produce inexpensive textiles as substitutes for imported goods (Abdullaev, pp. 133-34; Pistor-Hatam, 1999a, pp. 319-24; Walcher, pp. 200-202). In the late 19th century, both groups also opposed the Qajars’ fiscal policies, especially their practice of taking loans from British and Russian governments and banks. Moreover, ulama and tojjār were dependent on each other. The clerics depended on the big merchants’ financial support, while the tojjār relied on the goodwill of the ulama in order to maintain a respected public image. This did not preclude mutual criticism in certain areas. Lenders were accused by senior ulama of charging forbidden interest (rebā)(e.g., Gilbar, 2012, pp. 122-23). The ulama also complained about tojjār openness to such Western ideas as representative government. The tojjār, in turn, accused certain prominent ulama of dishonesty and of a lack of concern for the welfare of the people (Sh. Mahdavi, 1999, p. 160).
Several tojjār had close business connections with foreign companies, primarily British and Russian trading houses. British firms (or firms under British protection) such as H. C. Dixson, Gray, Paul and Co., Lynch Brothers, E. David Sassoon, Ziegler and Co., and Hotz and Son; and Russian companies, e.g., N. N. Konshin, Emil Tzindel, Nobel Brothers, and Sociétés des Manufactures Ludwig Rabenek traded with Iranian big merchants. A few tojjār acted as commercial agents of European firms (e.g., Mirzā Maḥmud Kāzeruni for David Sassoon, ʿAli-Akbar Yazdi for Ziegler and Hotz, and Mirzā Moḥammad-Ṣādeq Dehdašti for Gray, Paul and Co.), but certainly not all Iranian big merchants represented foreign companies in Iran. Rather, many tojjār developed their own export and import routes and channels. Their trade relations with customers and suppliers in South and Southeast Asia, Central Asia, and the Middle East were mostly run by their own networks or commercial agents (Fasāʾi, 1894-96, II, pp. 60, 65, 131; Picot, pp. 90, 91). This characteristic of their enterprises, as well as other facets such as their struggle to limit European economic penetration into the country (Nouraei and Martin, pp. 162-63; Gilbar, 2011a, pp. 17-18), demonstrate that the Iranian tojjār did not function as "compradores" in their society.
Fierce competition developed between the tojjār and several foreign investors and companies active in Iran (Kazembeyki, p. 142; Shahnavaz, pp. 168-73). The struggle within the banking sector was particularly harsh. Together with money exchangers (ṣarrāfs) and the ulama, the tojjār resisted the establishment of European banks, mainly the opening of the Imperial Bank of Persia (see BANKING, GREAT BRITAIN iii), and long before the concessions to open these banks were granted, they had proposed, first in 1879 and again in 1884, the establishment of a national bank (Kosogovskii, pp. 139-42; Adamiyat and Nāṭeq, p. 317; Bānk-i Melli-e Irān, p. 65; Sh. Mahdavi, 1999, pp. 80-81; Walcher, pp. 167-69). They also opposed several concessions which the Qajars had granted to foreign investors in the 1890s. Their struggle against the tobacco concession, joined by other groups within Iranian society, resulted in the cancellation of that monopoly (see below). European capital was prevented from taking control of the Iranian economy in the latter 19th century inter alia because a powerful local group of entrepreneurs stood in its way.
(3) THE TOJJĀR AND POLITICAL DEVELOPMENTS
The tojjār councils of representatives. The tojjār were deeply involved in several major political events and developments of the period, some of which had a strong impact on the history of Iran in the late Qajar period. The first important development in this context took place in 1884, after more than a decade of impressive growth in the tojjār’s various enterprises and following several years of close relations with the shah and the court. In July 1884, Nāṣer-al-Din Shah approved a proposal by a small group of tojjār, led by Ḥāji Moḥammad-Ḥasan Amin-al-Żarb, to establish councils of representatives of tojjār (majāles-e wokalā-ye tojjār) in Tehran and in most major cities and ports. Accepting the proposal, the shah granted unprecedented administrative and judicial authority and economic power to the councils. Underlying this move was the intention of both the shah and the leading tojjār to encourage burgeoning local capitalists to increase their investments in the economy. Moreover, the councils were expected to turn the tojjār into a significant power center in the Qajar state. At least eighteen councils were established during the latter half of 1884. However, the expectations for dramatic changes in the economy and in domestic politics did not materialize. Almost from the very beginning of the initiative, it faced fierce opposition from two powerful groups, namely, several provincial governors (primarily Prince Masʿud Mirzā Ẓell-al-Solṭān, the powerful governor of southern and central Iran), and senior ulama (especially Ḥāji Jawād Mojtahed, the popular religious leader of Tabriz). As a result, council members in Tabriz and then in other towns withdrew their membership in the councils, and the shah himself, facing growing opposition to the initiative from his ministers, issued a decree in the winter of 1885 to disperse all the councils. No such daring attempt was ever repeated in modern Iran (Adamiyat and Nāṭeq, pp. 299-371; Gilbar, 2008, pp. 639-74).
The tobacco protest movement. During the latter half of the 1880s, the British and Russian governments, together with private European companies, intensified pressure on Tehran to open the Iranian economy to foreign investment. These efforts did not yield very much until October 1888 when Nāṣer-al-Din Shah succumbed to British pressure and permitted “commercial steamers of all nations” to navigate the Kārun river (Gilbar, 2008, p. 608; Kazemzadeh, p.195; Amanat, pp. 420-21; see KARUN iii). At that point, the door to granting concessions to foreign investors opened wide. In March 1890, the shah handed British concessionaires a monopoly on both the domestic and foreign trade of Iranian tobacco, as well as control over its production for a period of fifty years (see text of the concession in Hurewitz, I, pp. 461-63). Tobacco was one of Iran’s main cash crops and was widely consumed by its people. Granting this concession signaled a departure by the government from its policy of non-interference in the commercial activity of the big merchant-entrepreneurs. Until then, most of the domestic wholesale tobacco trade, and its export, was under the tojjār’s control and constituted an important source of income and profits for many of these big merchants. For the first time since their rapid rise in the 1870s, they vehemently opposed the shah’s decision and began organizing a protest movement with the aim of rescinding the concession. Outwardly, the ulama led the protest movement of 1891-92, but it was the big merchants who, in fact, played the central role in it. A petition addressed to the shah protesting the concession was prepared by Tehran’s tobacco merchants in February 1891. Over the following months, the tojjār of Shiraz, Tabriz, Mashad, Isfahan, and other cities joined the protest movement. In November or December of that year Ḥāji Mirzā Aḥmad Bonakdār, a prominent Isfahani merchant, burned his tobacco stock rather than sell it to a British company (the Imperial Tobacco Corporation of Persia) at low prices. In most places the ulama joined the protest on their own initiative and supported the demand for the cancellation of the concession, although there were cases throughout the summer of 1891 in which big merchants had to convince ulama to assume an active role in the struggle. In late 1891, joint action by the tojjār and the ulama changed the course of the events; merchants and ulama in Isfahan took an oath to stop smoking tobacco until the concession was repealed, and shortly afterwards tojjār in Tehran and Isfahan played an important role in appealing to Mirzā Ḥasan Širāzi (the leading Shiʿite theologian in the ʿAtabāt) to issue a fatwā prohibiting smoking tobacco. The fatwā had a remarkable effect (it was observed even in the shah’s court), and in January 1892 Nāṣer-al-Din Shah finally cancelled the concession. The tojjār’s achievement was, however, only partial, as a deep breach between the shah and the tojjār had developed by then, best exemplified by the arrest and deportation from Tehran to Qazvin in December 1891 of Ḥāji Moḥammad-Ḥasan Amin-al-Żarb by the order of the shah (Gilbar, 1976-77, pp. 288-91; Ashraf, 1980, pp. 110-12; Ādamiyat, p. 55; Moaddel, p. 459).
The customs reforms. Growing government expenditure and the failure of several attempts to reform the collection of direct taxes, primarily taxes on agricultural production, had resulted, at the turn of the 19th century, in a fiscal reform of indirect taxation, namely the collection of customs levies. In the mid-1890s, receipts from customs amounted to some 20 percent of the total income of the central government, and, with the growth of Iran’s foreign trade, its absolute and relative contribution to the central budget was expected to rise. Against this background, the British and Russian governments and the foreign banks that were asked to furnish loans to the central government demanded custom receipts as collateral for the loans. In January 1898, senior Belgian customs officials were invited by the government to reform the customs administration, and between that year and 1904 the system underwent fundamental changes. Customs houses were put under the direct control of the government and the supervision of Belgian officials; new customs regulations were put into force; the system of leasing the customs was abolished; and the evasion of customs became very difficult. The results of these reforms in fiscal terms were quite remarkable. Within six years (1898-1903) receipts grew by 127 percent (from 15 million to 34 million qerāns), and by 1903 they constituted over 50 percent of total government income from taxes (The Statesman’s Year-Book, 1900, p. 875; idem, 1905, p. 985; Destrée, p. 145; see also BELGIAN-IRANIAN RELATIONS).
Far more than the tobacco concession, the customs reforms shattered the foundations of the business environment that enabled the tojjār to grow and prosper. The tojjār claimed that the reforms caused immeasurable harm to their businesses. Three components of the reforms were especially infuriating to them. First, certain big merchants were deprived of their custom-house farms from which they had derived high profits. Second, the rates of customs duties on many imported and exported goods increased considerably. For example, the duties on imported Indian tea were raised from 2 to 2.5 percent ad valorem in 1900 to about 92.5 percent ad valorem in 1903. The duty on the export of opium increased from some 2.5 to 20 percent, on wheat from some 2 to 15-20 percent, and on barley from 1.5-2 to 30-40 percent. Third, the new customs administration introduced formalities which made the clearance of goods a complicated, expensive, and time-consuming process (Gilbar, 1976-77, pp. 293-95).
The tojjār, together with other groups in the Iranian commercial community in the major urban centers, initiated a series of protests during 1900-05 in an effort to forestall the customs reforms. The first protests occurred in Shiraz, Tehran, and Isfahan in the summer of 1900, followed that winter by similar protests in almost all the major towns. In 1903-05, following the enforcement of the new customs tariffs of 1901 and 1903, demonstrations swept through all the commercial centers, including Rasht, Mashad, and Kermanshah. From the beginning of the protest movement, the big merchants had demanded the dismissal of the head of the new customs administration, Joseph Naus, who in 1903 became the government minister for customs and posts. The demand to remove Naus became more violent in 1905. In April of that year, a group of Tehran wholesale dealers, money exchangers (bonakdārs and ṣarrāfs), and bazaaris closed down their shops and offices and took asylum (bast) at the shrine of Shah ʿAbd-al-ʿAzim south of Tehran, declaring that they would not return to the city unless Naus was dismissed. Nevertheless, Moẓaffar-al-Din Shah (r. 1896-1907) retained the Belgian minister in his position, and five years of struggle to modify the new customs regulations, adjust the new administration to local practices, and remove Naus from office, failed (Nāẓem-al-Eslām, I, pp. 331 ff.; Destrée, pp. 33-133; Gilbar, 1976-77, pp. 295-97).
The Constitutional Revolution. In late 1905 or early 1906, a group of leading tojjār in Tehran sought more effective ways to influence the government’s fiscal and monetary policies. According to Mahdi Malekzāda (II, p. 168), it was they who prepared the ground for a major event that would change the entire picture. In July 1906 some 14,000 members of the guilds as well as seminary students (ṭollāb) in Tehran, with the financial backing of several tojjār, took an extraordinary step; they took asylum (bast) at the grounds of the British Legation in Tehran. The capital was paralyzed, and Qajar rule was seriously challenged (Nāẓem-al-Eslām, I, pp. 507-13). The big merchants of Tehran deliberately avoided joining the bastis. On 26 July, a week after the bast had started, a group of eight leading tojjār, among them Āqā Moḥammad Moʿin-al-Tojjār Bušehri, Moḥammad-Ḥosayn Amin-al-Żarb, Moḥammad-Taqi Šāhrudi, and Moḥammad-ʿAli Šālforuš, were summoned to see Możaffar-al-Din Shah (r. 1896-1907) and his grand vizier (ṣadr-e aʿẓam), ʿAyn-al-Dawla. The shah, aware of their high standing with the bazaaris, asked the tojjār to help the government bring an end to the bast. That same day, the tojjār went to the legation, met with the committee of the bastis, and heard their demands. These included the formation of an ʿadālat-ḵāna (house of justice). Notably, a demand to establish an elected assembly (majles) was not mentioned in that meeting. Upon returning to the palace, however, Moḥammad Moʿin-al-Tojjār Bušehri, who at that crucial stage spoke on behalf of the tojjār, took advantage of the plight of the shah and his prime minister and informed ʿAyn-al-Dawla that the bastis demanded an elected assembly, and that an ʿadālat-ḵāna would not satisfy them. A day later, on 27 July, the tojjār were again called to see ʿAyn-al-Dawla, who informed them that the request to establish a majles had been accepted. The context in which the grand vizier delivered this unprecedented decision to the tojjār contained a clear message that he expected that the establishment of the majles would cement cooperation between the government and the tojjār so that the ulama’s interference in state affairs would be restricted. Subsequently, the big merchants also played an important role in discussions that took place in early August regarding the final name of the majles. They insisted that the new institution be called Majles-e šawrā-ye melli (a national consultative assembly) and not Majles-e šawrā-ye eslāmi (an Islamic consultative assembly), and that the shah’s proclamation of the establishment of the majles must include that title. The struggle over this issue was intense, concluding at last with a revised decree signed by the shah on 9 August 1906 replacing eslāmi with melli (Malekzāda, II, pp. 170-72; Dawlatabādi, II, pp. 75-76; Nāẓem-al-Eslām, I, pp. 366-67, 444-53; 507 ff.; Gilbar, 1976-77, pp. 298-99; Ashraf, 1980, pp. 112-16; Martin, pp. 89-100; Bayat, pp. 136-38).
The first Majles, October 1906-June 1908. Of the 161 members of the first majles, 28 were tojjār. The most prominent among them exerted an important influence on the assembly’s work. Under the leadership of Moḥammad-Ḥosayn Amin-al-Żarb (deputy to the Majles speaker), Moḥammad Moʿin-al-Tojjār Bušehri, and Moḥammad-Esmāʿil Maḡāzaʾi, the tojjār contributed distinctively to the adoption of significant decisions, such as the dismissal of the heads of the customs administration, the rejection of the government plan to borrow 10 million tumans from Russia and Britain, and the approval of the establishment of a national bank. The tojjār were the moving spirit in drafting a new plan to reform the fiscal administration which included a program to substitute external loans with domestic borrowing. Their influence was crucial in other issues as well, most important of all in drafting the Supplementary fundamental law (Motammem-e qānun-e asāsi) of October 1907 (Malekzāda, II, p. 428; Ashraf, 1980, pp. 116-23; Bayat, p. 155; Afary, pp. 71-72; Farsani, p. 121).
Nevertheless, the tojjār’s contribution to decision making in economic issues failed to generate a pronounced change in the economy. Other developments, internal as well as external, prevented such changes from taking place. In the last months of the first majles (1908), the big merchants showed growing signs of disillusionment with a constitutional government and what it could in fact achieve (Malekzāda, IV, p. 25; Dawlatābādi, II, p. 303). From then on until the end of the Qajar era, they would no longer play a significant role in Iran’s national assemblies. Their commercial ventures, too, faced growing difficulties during the revolutionary period. The loss of governmental control and the breakdown of law and order in many parts of the country made the conduct of routine business, particularly big business, almost impossible. Big merchants, such as Moḥammad-Ḥosayn Amin-al-Żarb, went bankrupt and had to take asylum at the Russian embassy in Tehran. Developments in foreign markets also had an adverse effect on the tojjār’s enterprises. Above all, the tojjār failed to perceive the colossal economic potential of crude oil. Significantly, an oil concession granted to William Knox D’Arcy by the shah in May 1901, which formed the basis for the Anglo-Persian Oil Company; for the concession, see Hurewitz, I, pp. 482-84), had not elicited the kind of opposition or protest by the tojjār that some of the other concessions of lesser economic importance did.
Conclusion. The role played by a group of local merchant-entrepreneurs in the economic and political history of Iran in the late Qajar period is unique in the context of 19th-century Middle Eastern history. While there are many examples of local big merchant-entrepreneurs in various parts of the Middle East who contributed to the economic development of certain regions, nowhere did local entrepreneurs have such an intense economic and political impact as that of the tojjār in late Qajar Iran. The rise of the tojjār and the economic and political role they played in the late 19th century is one of the fascinating chapters in Qajar history. Three factors seem to explain this phenomenon. First, the Iranian tojjār were talented and nimble businessmen. They were quick to detect the new opportunities generated by foreign markets during the second half of the 19th century and were able to capitalize on them, taking great risks, making great profits in most cases, and investing them in new enterprises. Second, during the crucial years of their rapid growth (most of the 1870s and the 1880s), the central government, or, more precisely Nāṣer-al-Din Shah, did not block their way to prosperity. The attitude of the Qajars to private enterprise had certain elements of the French 18th-century laissez faire approach, without its theoretical basis. Third, the ulama, for their own reasons, opposed foreign economic penetration. This undoubtedly assisted the tojjār in their struggle against foreign competition and gave them greater latitude in their entrepreneurial thrust. The golden years of the tojjār came to an end when some of the conditions that made their success and prosperity possible changed or disappeared. Paradoxically, these negative changes commenced a short period after the great success of the summer 1906.
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(Gad G. Gilbar)
Originally Published: February 20, 2015
Last Updated: March 1, 2019Cite this entry:
Gad G. Gilbar, "QAJAR DYNASTY viii. “Big Merchants” in the Late Qajar Period," Encyclopædia Iranica, online edition, 2015, available at http://www.iranicaonline.org/articles/qajar-big-merchants (accessed on 20 February 2015).