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Beginning of a journey at a caravanserai:
"Every province is privileged with a mint of its own."

All about money
The birth of Iran's modern monetary system

September 6, , 2000
The Iranian

From "For God, Mammon, and Country : A Nineteenth Century Persian Merchant" by Shireen Mahdavi (2000, Westview Press). See photos here.

Mahdavi was born in Tehran and educated at the London School of Economics and Political Science, University of Utah and the University of London. Prior to the Iranian Revolution she taught at the Institute of Social Research in Tehran, was involved in research in the field of social affairs and served as an advisor to the government. She has written extensively on various aspects of Iranian history with special emphasis on the nineteenth century.

Haj Muhammad Hassan [Amin al-Zarb] became involved with the Mint in 1294/1877 in a decade of crisis for the Persian monetary system, which was on a bimetallic standard. This crisis was related to both internal and external causes as well as bimetallism. Prior to that date there were local Mints in all the major towns of Iran: Tehran, Tabriz, Rasht, Hamadan, Kirmanshah, Kashan, Isfahan, Shiraz, Yazd, Kirman, Mashhad and Mazanderan. The provincial Mints were farmed out by the governor to the highest bidder, and the Mint farmers were at liberty to mint coins of gold, silver and copper. The major monetary units were the gold tuman, the silver qiran, and the copper shahi, as follows:

Persian Monetary Denominations

-- 1 gold tuman.............equivalent 10 silver qirans
-- 1 silver qiran.............equivalent 20 copper shahis
-- 1 shahi......................equivalent 50 dinars
-- 4 shahis
also called abbasi..........equivalent of 200 dinars
-- 2 shahis
also called sannar.........equivalent of 100 dinars
-- 1 shahi
also called 2 pul...........equivalent of 50 dinars
-- 1/2 shahi
also called pul..............equivalent of 25 dinars
-- 1 pul.........................equivalent of 2 jandaks
-- 1 jandak
or 2 ghaz......................equivalent of 12 1/2 dinars
-- 1 ghaz.......................equivalent of 6.25 dinars

The basic coin of everyday use in Persia with which most daily transactions were carried out was the copper coin shahi and the unit of currency with which ordinary people dealt with daily was the dinar. The preponderance of the currency in circulation consisted of copper coins. However, these coins can not be considered as money, in the way the term is generally understood, but were more like convenient tokens as their exchange value into silver constantly declined and copper coins could not be redeemed at par.

There was a vast difference in value between coins minted in different towns. Rabino reported that in 1877 there was a difference of 17% in value between the qiran of Hamadan and that of Tehran. This disparity created difficulties in the financial system of the country as a whole.

The Money Market Review of February 24th 1866 commented on the situation thus:

It is especially to be remarked that every province (there are thirteen of them) is privileged with a mint of its own; and as each mint master invariably has to pay for his place to get back his money, and profit by speculation into the bargain, is of course his chief object. He, therefore, gives short weight, and, moreover the coin just struck is no sooner circulated in the bazaar than a host of clippers use their scissors to their advantage, and to the detriment of the public. This is the more easy as none of the present Persian coins have milled edges...

The copper coin was consequently, as can be seen from the above report, also the coin manipulated by provincial officials to subsidize their income. Not only in Gilan but in other places too frequently the copper coins were withdrawn and reissued after heavy taxation by changing the value of the new coin. This happened either at Naw Ruz or when the governor was changed. The best way of describing this process is with the old saying about "going to bed with a ten penny piece in one's breeches and finding only five there in the morning", since if a person had not turned in the old ones and obtained new ones, he woke up in the morning to discover the old ones worthless. Simultaneously, for every ten old coins returned only five new ones were received. In this way each time the authorities withdrew the old coins, they were left with a substantial number of additional new coins with which to pay for their bureaucratic expenses such as salaries. As a result people in any locality were forced to convert copper coins into gold or silver before their value changed. This fact also contributed to the preponderance of foreign bullion coins in circulation, primarily Russian coins in the north and Indian rupees in the south...

The chaotic internal monetary situation then consisted of the following: coins of differing value were struck at various mints throughout the country; as they did not have milled edges they were clipped, further reducing their value; and silver and gold were being exported whilst there was a large balance of trade deficit. All of the above factors combined to create inflation...


Haj Muhammad Hassan became involved with the Mint in 1294/1877-8. This involvement came about through Aqa Ibrahim Amin al-Sultan, a prominent courtier and already member of the Dar al-Shura-yi Kubra. head of the royal stables and other court departments and granaries of Tehran, who was to become head of the Mint. Haj Muhammad Hassan had a longstanding relationship with Aqa Ibrahim from the early days of his arrival in Tehran, and was in many ways considered his protégé. It was in this year that the nineteen provincial Mints were closed and a new automated plant installed in Tehran. It is of interest in understanding the functioning or lack thereof of the Qajar government system, to note that the new automated plant was bought in 1863, and stayed in Rasht for over a decade. In 1866 Mr. Dickson reported:

Some machinery purchased in France for remodeling the Persian currency has, since its arrival in Rasht, remained there embedded in the mud, those concerned in the matter protesting that owing to its weight and bulk it can not be transported. The truth, however, appears to be that the Mint authorities find that it suits their purpose better to continue their present system of issuing an uncertain coinage whereby they are said to make large profits.

The sources are not clear as to whether it was this old machinery which was repaired and brought to Tehran or whether new machinery was imported. `Abdullah Mustawfi says that Amin al-Sultan imported new machinery with the aid of Haj Muhammad Hassan, whereas Amin al-Dawla, who was the farmer of the Mint at this time, says that he offered to repair the old machinery which involved less cost, making the Shah happy and that it was the old machinery which was installed. In either case the Mint became centralized, with automatic machinery installed and new silver coins of 900 fineness struck. The supply of bullion for the new coins came both from newly imported silver bullion and remelting the provincial coins. After the departure of Herr Pechan the new Mint was farmed out to Aqa Ibrahim Amin al-Sultan but it was probably Haj Muhammad Hassan who was the overseer of technical matters, as traditionally sarrafs specialized in the assaying of metals and coins. It was thus that he was given the title Amin Ayyar (the Assayer General) in 1294/1878, and later in the same year the title of Amin al-Zarb (literally the Trustee of the Mint). It was not however until 1296/1879 that he was put in charge of the Mint. The decree of the Royal command of his appointment reads as follows:

Haj Muhammad Hassan Isfahani who has been looking after the regulation and the administration of the government Mint and the correct assay of its currency has been favoured with our grace due to the attestation and appeal of the loyal servant of the crown Amin al-Sultan. The aforesaid person has been appointed as the trustee of the government Mint and three hundred tumans from the one thousand tumans allocated to the assayers of the Mint we grant to the above-mentioned Haji conditional upon the fact that Amin al-Sultan acknowledges him as the trustee of the Mint and gives him the above mentioned salary. (30th Jamadi II 1296, 22 June 1879.)

Above the decree is the seal of Nasir al-Din Shah and in the right hand border his signature. According to the above decree Amin al-Zarb's salary was approximately 1 tuman per day.

From 1296/1879 onwards most sources foreign and native report that Amin al-Zarb was the Master of the Mint, which the Shah had farmed out to him for 25,000 tumans annually. However, both the above decree, the unfinished biography and Amin al-Dawla seem to contradict this assertion. According to the decree, it is Aqa Ibrahim Amin al-Sultan who is in charge of the Mint; according to Amin al-Dawla, it is Mirza `Ali Asghar Khan Amin al-Mulk (later Amin al-Sultan, Prime Minister and Atabak `Azam); and according to the unfinished biography both father and son. In reality there is no contradiction in the various statements as the Shah delegated responsibility for the Mint to the two Amin al-Sultans but Amin al-Zarb became responsible for the actual daily operation. Whatever the truth of the exact running of the Mint and the division of its profits, from this point onwards according to contemporary accounts, hostile to Amin al-Zarb and recorded for posterity, the whole onus of Persia's longstanding financial crisis fell upon the shoulders of Amin al-Zarb. This has been disputed by some present day writers and will be discussed later.

There can be no doubt that the only professional amongst the triangle of persons involved with the Mint was Amin al-Zarb. From generation to generation his forefathers had passed on the technique of assaying gold and silver and it was always Amin al-Zarb who was called upon when such a service was required.

The great yearning of all Persians involved in the country's finances was for the discovery of silver mines. From time to time reports accompanied by samples would come about the presence of silver in certain areas. On such an occasion the Shah and the whole court would come to the Mint and Amin al-Zarb would perform a public assaying.

Amin al-Zarb, being by this time the most prominent merchant, at the same time as being involved with the Mint, was in a unique position to have an overview of the problems associated with Persian methods of financial transactions, which were done through barats and sarrafs or through transporting cash in coins, there being no bank notes, from town to town. Aside from the insecurity of transporting cash due to robbers, the logistics of such a method are amazing. Rabino describes that a porter could carry about L 300 in silver, an ass about L 600, a mule L 800 and a camel L 900. Therefore the transportation of L 25,000 took 83 men, or 41 donkeys, or 31 mules or 28 camels. To count and check this sum of money it would take an expert moneychanger 16 days.

Amin al-Zarb, who was dealing with and conscious of these difficulties, proposed in a letter to the Shah in 1296 /1879 the formation of a national bank with private and public capital, a decade before the formation of the Imperial Bank of Iran. After the preliminary remarks as required by custom and court etiquette, he said in the letter;

...Obviously Your Majesty has observed the state of affairs in Europe. Previously the conditions in Europe were not as they are now; people lived in hardship accompanied by much inconvenience. [illegible] from adversity they produced many innovations. They thought of building steam ships. A few of them gathered together and built [them] and operated them. When they saw that there is profit in it, they built railways and telegraph lines. [Then] they turned to building factories for silk reeling, sugar making, crystal producing, brocade and felt making; to such an extent that finally they supplied all the needs of the people with steam factories. They know that it is [illegible] not to abandon the slightest technique they acquired and applied themselves daily so that the task would be accomplished. Thank God that there is nothing about the people of Iran which is any less than those of Europe.

Summing up the whole it can be said that everything about Iran is better than Europe. The main thing which has been the cause of European progress is the formation of a bank. First they established a bank. When people's money collected in the bank with the credit and capital of the bank they accomplished great feat. They entered into large commercial transactions, and important factories were built with money from the bank bringing about the development of the country. It is evident that one or two people do not have the capability to initiate and carry through great tasks. The co-operation of the government and the people is needed for the accomplishment of great works... The possibility of establishing a bank in Iran is better, easier and greater than anywhere else in the world. Should this bank be set up and credit established, from foreign countries they will give their money into the bank's keeping and everyone will put whatever they have into the bank, even the widows of Iran, each of whom has ten misqals of gold or silver, will turn it into money and put it in the bank.

The procedure for the establishment of the bank is that four prominent merchants should be the supervisors of this bank. And the bank should be a governmental bank and the government should deposit one hundred to two hundred thousand tumans in the bank as though it were being kept in the royal treasury. A royal decree should be issued [to the effect] that this bank belongs to the government, the debt of this bank is the debt of the government and the claim of this bank is the claim of the government. A special location should be assigned to this bank so that its special branches can take in money from the people [who when depositing] should receive an interest of one shahi per tuman and [when borrowing] they should pay an interest of one hundred dinars per tuman and [with the money] buy and sell merchandise. [The details] of its organization is lengthy and does not fit into this petition. After the bank is established and has been running for six months, shows profit, and it is noticed that it is a correct and valid venture, it will attract attention. After [illegible] passes this very same bank could start preparation for some important factories which would alleviate the needs of the people of Iran from some European goods. It can gradually and easily make preparation for railways and construct them.

Assuming that the bank in the course of one year makes a profit of fifty thousand tumans, preparation for a railway can be made in Europe. When the preparations are completed, the road from [illegible] to Rasht can be paved and with that fifty thousand tumans equipment a railway will be built. After it is constructed there will be an income from transport charges of 200 to 300 tumans daily. When people hear, see and understand that it is possible and is making progress then the bank can make an announcement that whoever wants to buy shares in the building of railways from Rasht to Qazvin, the bank will go into partnership with them. Anyone can give as much money as they want and accordingly the profits will be divided. There are people in Iran who have money.

They pay a thousand tumans for a country estate from which they do not even have an income of 500 tumans. How can they prevent themselves from participating in railways when they can make ten kurur more in participating in railways and the railway will be constructed by itself [without any effort on their part]. Whatever factories are needed will come by themselves. These things are not possible unless a reputable bank is founded. The formation of a reputable bank does not involve any work and is possible in the simplest and easiest manner. [All that is needed] is credit and security from those in charge of the government. Should the remarks of your humble devoted servant be acceptable to the blessed dust of the throne then the matter can be referred to the Majlis-i Darbar A`zam and should they in unison sign this petition, God willing a correct and reputable bank will be established. Command is the sacred command of His Imperial Majesty. This petition is that of the obedient devoted servant Haj Muhammad Hassan Amin dar al-Zarb. -- 15 Sha`ban 1296/4th August 1878.

This letter is of importance from many different points of view, and that is the reason why it has been produced in full. In the first place the fact that Amin al-Zarb took it upon himself to propose to the Shah projects of national importance suggests that by this time he had developed a close enough relation with the Shah to be in a position to dare to make proposals which the Shah might have thought of himself. It was the Shah who had gone to Europe and seen the functioning of the various institutions. Amin al-Zarb himself had not yet been to Europe. The letter presents the picture of a man of vision who although preoccupied in the extreme with private and public enterprises is concerned for the welfare and future fate of his country. His emphasis on the construction of railways sprang from his own personal experiences as a merchant, realizing that the greatest impediment to the development of commercial enterprises in the country was the lack of an efficient system of transport. Finally, his recognition of the fact that economic progress depended upon industrialization, which in turn like any other national venture depended on the participation of the people whilst being initiated by the government, is of major significance. See photos here.

Comment for The Iranian letters section
Comment for the writer Shireen Mahdavi

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