Download PDF | [Iran and the Persianate World] Rudi Matthee, Willem Floor, Patrick Clawson - The Monetary History of Iran_ From the Safavids to the Qajars, I.B. Tauris, 2013.
345 Pages
Rudi Matthee is John and Dorothy Munroe Professor of Middle East History at the University of Delaware. He is the author of Persia in Crisis: Safavid Decline and the Fall of Isfahan (I.B.Tauris, 2012); The Pursuit of Pleasure: Drugs and Stimulants in Iranian History, 1500–1900 (Princeton University Press, 2005); and The Politics of Trade in Safavid Iran: Silk for Silver, 1600–1730 (Cambridge University Press, 1999).
Willem Floor is an independent scholar specializing in the socio-economic history of Iran. His publications include A Social History of Sexual Relations in Iran; Iran and the World in the Safavid Age (with Edmund Herzig, eds, I.B.Tauris); Labor and Industry in Iran, 1850–1941 and The Persian Gulf: A Political and Economic History of Five Port Cities 1500–1730.
Patrick Clawson is Deputy Director of Research at the Washington Institute for Near East Policy and Senior Editor of Middle East Quarterly.
Preface
The history of Iran between 1500 and 1925 is the story of the rise, peak and fall of two major, relatively stable states – the Safavids in the sixteenth and seventeenth centuries and the Qajars in the nineteenth century – interspersed with the lifespan of various more ephemeral dynasties and more protracted periods of decentralized, tribal power frequently shading into chaos. The bookend dates of this long period are in part imposed by the nature of the available source material – for the period after 1500, foreign, mostly Western, documents supplement indigenous, Persian-language records – but arguably arise from an internal logic as well.
Whether or not one subscribes to the ‘early modern’ paradigm, the Safavid dynasty, while inheriting the patterns and practices from previous regimes, forged a new state-society relationship, intertwining territorial and religious identity, that carried over into the Qajar period and that still marks Iran as a unique country in the Islamic Middle East. As for the closing date, a good case can be made for the argument that the overthrow of the Qajars and the rise of Reza Shah mark the beginning of Iran’s full modernization and thus of modern Iranian history. One of the many threads that hold the period considered in this book together, giving it texture and contributing to its continuity, is the monetary system and the role it played in economic exchange – determining the ways in which the state collected revenue and remunerated its administrators and soldiers, subjects paid their taxes, and merchants made deals with their domestic and foreign partners.
Despite the many changes that took place in the ways money functioned and was handled in these four centuries, many features of the system remained the same or at least show strong elements of continuity. The use of coined money grew out of the desire to simplify exchange, by using standardized units instead of units that needed to be weighed and tested for quality on each occasion. This development received further impetus from governments wishing to simplify public finances, in particular the collection of taxes and tribute. Coins differ from earlier forms of media of exchange in that they are (1) standardized monetary units and (2) guaranteed by the state as a valid mode of payment. However, from 1500 – the approximate date for which we have substantially more information than the surviving coins – to 1925 – the onset of the reign of the Pahlavis and with it the introduction of a modern monetary system – Iranian money did not fully have either of these two characteristics; that is, the coins were not standardized units which could be seamlessly interchanged, and the state did not guarantee the value of coins as a medium of payment without discounts. In other words, the Iranian monetary system until 1925 was much more complicated and much less organized than what we are used to in modern times.
The disorganized and chaotic character of Iran’s money from 1500 to 1925 was exacerbated by three factors. First, three metals were used for coins. Copper was used for most local trade and silver for most longdistance trade, with gold playing a limited role. To make the system even more confusing, accounts were often kept in imaginary monetary units – that is, in ‘ghost monies’. Second, Iran experienced chronic shortages of money due to poor metal supply, large trade imbalances that had to be financed by substantial coin shipments, and stressed government finances. Transactions among people in rural areas were often conducted through barter. Third, Iran did not have much of a national economy. Moving money from one place to another was not cheap or easy.
The money system in use often varied considerably from city to city. Thus far, the obvious importance of this topic has not translated into a comprehensive study on the monetary system of pre-modern and early modern Iran. Adjacent states and empires have fared better in this regard. For the Ottoman Empire and Mughal India, not to mention China, important studies have appeared in the recent past. Until now, no comparable monograph existed for those interested in the monetary history of early modern Iran. H. L. Rabino de Borgomale’s Coins, Medals, and Seals of the Shahs of Iran. 1500–1941 (1945), while informative, is more a catalogue than an analytical study of the subject. Beyond that, only a handful of articles, mostly written by the authors of the present volume, addressed aspects of the subject in the Safavid and Qajar period. The present work is designed as a first and major attempt to fill this gap. We offer this study with the understanding that, in many ways, the monetary history of pre-modern Iran remains rudimentary in that many of its facets are yet to be studied or have only been partially examined.
This book presents Iran’s monetary history predominantly as a story of economic issues and questions in connection with the state and its policies. It does so chronologically. The second part of this preface offers an overview of Iran’s pre-modern monetary system, and of its enduring characteristics and peculiarities. The body of the study, comprising chapters 1 to 7, is divided into three parts. Part 1 covers the Safavid period; Part 2 deals with the eighteenth century – the reign of Nader Shah and the Zands; and Part 3 considers the Qajar period, 1779–1925. As the subsections in the table of contents indicate, each chapter considers the specific monetary conditions in a particular period, involving the use of ready money and its circulation, the quasi-trimetallic system involving gold, silver and copper coins, and the changing conditions of the country’s mints. Each chapter also addresses the role played by the state in managing money by way of striking coins and tampering with the coinage, either by lowering weight standards or through debasement – lowering the metal alloy of coins – for profit.
This book is about Iran yet its scope is expansive. Throughout, we look at Iran not as a self-contained unit but as part of a larger, regional, transregional and even global economic structure. Monetary sovereignty may have been a desideratum on the part of the central state but, as always, reality fell far short of the ideal. This is especially true in the case of Iran, a country which, devoid of gold and silver mines and chronically short on ready money, until the discovery of oil in the twentieth century, depended on the outside world for the influx of its precious metal. Because of its chronic trade imbalance, the land of the shah also saw much of its bullion disappear to India via the Persian Gulf ports.
The seventeenth-century French cleric and long-time resident of Isfahan Raphael du Mans famously summed this up by calling Iran a caravanserai with one gate open to the west and the other the east. Hence the attention this study pays to the interplay between domestic money and international bullion movements between Europe and India. The section on the Safavids thus engages with the vexed (and now somewhat hoary) question of whether the sixteenth-century Islamic world witnessed a ‘price revolution’. More importantly, each chapter pays particular attention to government attempts to prevent or at least curb the bullion flow toward India through bans or taxation.
Introduction
A note about weights: a common Iranian measure of weights which was unchanged for centuries was the nokhud (meaning pea), which weighed 192 milligrams. Also unchanging was the mesqal, which was 24 nokhud, i.e., 4.61 g. An additional term for weights was the man, which was often but not always 640 mesqal, i.e., 2.94 kg. A common way in which the monetary standard was calculated was how many nokhud there were to the (notional) tuman, e.g., an 800 nokhud standard, a 1,200 nokhud standard, and so on. And to remind the reader, ‘specie’ is ‘coined metal’, while ‘bullion’ is usually defined as ‘gold or silver considered as so much metal, specifically uncoined bars or ingots’, though the term will be used here to also cover uncoined copper. ‘Precious metal’ or ‘monetary metal’ is composed of both specie and bullion.
Copper, Silver and Gold As was the case in Mongol times, Iran from 1500 until 1925 had copper, silver and gold coins.1 The state typically kept its accounts and levied its taxes in silver, but the actual currency used for most ordinary transactions was copper. The copper coins were often issued by local authorities, especially provincial governors. Furthermore, the value of the copper coins was typically well in excess of the value of copper metal in those coins. The system of coins in three metals was not fully a ‘trimetallic’ system in which the value of coins of each metal is fixed relative to coins in the other two metals and the value of each coin is determined by the metal in it. The state typically established an official ratio for exchanging copper coins and gold coins into silver coins, but those ratios were not necessarily enforced rigidly: the typical practice was to require an ‘agio’, which is a discount on exchange from one coin to another. In other words, there was a certain looseness in how copper, silver and gold coins were exchanged one for the other, as well as a certain flexibility in how the value of the coin related to the value of the metal in the coin.2 Nevertheless, the system relied to some extent on official rates of conversion from coins in one metal to coins in the other metals.
Therefore, the system came under strain when the market prices of metals varied. In particular, Iran suffered from the problem that over time, the principal metal it was using – silver – declined in value relative to the main metal used for money in Europe and India, which was gold. Although the shahs coined gold, these gold coins served mainly a special use, such as to affirm the royal right of coinage; to be used as presents, in particular on Nowruz occasions; and to show off with heavy so-called presentation coins. Silver, however, was the high-quality currency for tax, administrative and trading purposes.
The silver coins had a fine alloy relative to coins of many other realms. When they melted European or Turkish coins, Iranian minters purified them before re-striking the metal as Iranian currency. European travelers were impressed with the fineness and weight of the silver currency of the Safavids. But despite the fact that generally Iranian currency was of good weight and fineness, in trade people never forgot to check this premise. Normally, the weight of coins was correct, so that for large payments, both merchants and government officials made use of bags containing a standard number of coins. Known as kiseh and bolsa in Safavid times, these bags contained a guaranteed value of 50 tuman.
A special inspector, the sarraf-bashi, was responsible for the quality of the coinage in the bags, which he sealed personally. This checking of money certainly held true until the end of the nineteenth century. Another complication in the monetary system was that accounts were often kept using ‘ghost monies’ – that is, units which did not correspond to any coin. That provided a constant method of recording monetary values even when over time the value of coins changed. From the beginning of the Muslim Empire, the dinar was the monetary unit.3 In 1260 the Mongols introduced the tuman, a word meaning 10,000. It was originally used to refer to 10,000 gold dinars. However, in the Safavid period, after 1500, the tuman was a unit of account, not a gold coin. Furthermore, in actual practice the value of the tuman also fluctuated and was not always equal to 10,000 dinars; al-`Omari, for instance, put the tuman at 20,000 dinars.4 Also, the Tabriz or Iraq tumans were often four times the value of the Khorasan tuman. Only in 1883, under Naser al-Din Shah, was an actual tuman coin minted, in silver.5 In general throughout this period, the value of the actual coins was expressed in relation to the dinar/tuman system.
There were several intermediate coins whose value changed depending on time and location. Often during the Safavid period, 50 dinars made a shahi, 4 shahis made an `abbasi, and 50 `abbasis made a tuman; there was often also a mahmudi, usually of 2 shahis. Often during the Qajar period, a riyal or qran was valued at 1,250 dinars or 25 shahis, with a tuman being 8 riyals or qrans, but this was by no means always the case. Especially for Europeans, a standard of reference was the Venetian gold ducat, whose weight and fineness remained unchanged from 1284 to 1914 at 3.49 g of 98.6 per cent gold.
Shortage of Coins Expanding the supply of money required (1) production of metal from mines; (2) acquisition of booty through conquest; or (3) a positive trade balance. Neither of the first two factors was particularly important during this time. Iran lacked significant gold and silver mines; a few mines were occasionally brought into operation, but their output invariably was more expensive than what was available in the market. While copper was mined, even that metal had to be imported throughout most of the period. Conquest brought only temporary relief. The fiscal effect was often negative, in that the cost of the conquest and the additional spending in the aftermath tended to exceed the booty seized. It would seem that the monetary effects were also often short-lived; that is, the additional spending led to additional imports such that the money went to finance a balance of trade deficit, and money was in as short a supply as before the conquest.6
Throughout this period, Iran, benefiting from its large exports of raw silk, apparently had a positive trade balance with Russia and the Ottoman Empire. Istanbul was evidently running a positive trade balance with the rest of Europe, with a considerable amount of specie flowing into Anatolia, and much of that in turn going to Iran.7 On the other hand, Iran had a trade deficit with the Indian Ocean lands, such as Mughal India, and this had to be paid for in precious metal. The two trade deficits – positive with the lands north and west of Iran, negative with the lands south and east of Iran – meant that large amounts of coin and bullion were flowing into and out of Iran. Sustaining this flow was a considerable strain; after all, moving so much metal was expensive and risky in unsettled times. In this system, transport expenses of specie and bullion were a vital factor, as was the profitability of alternative export articles. Another way to describe the trade pattern of the centuries in question is that the West received large amounts of silver and gold from the Americas, and that precious metal was being used in part to finance the West’s persistent balance of trade deficit with South and East Asia. Such a description highlights the intermediary role Iran played in the global flow of money.
Whereas we often think of gold when considering the bullion originating in the Americas, actually silver played a greater role. The exploitation of American deposits changed the centuries-old ratio between silver and gold, with silver becoming cheaper – at first gradually, then more rapidly during the late nineteenth century. Depending on transport costs and risks en route, the changing silver–gold ratio often made arbitrage profitable; that is, shipping silver from the west to the east in return for sending gold the other way. It is not clear how much of a role Iran played in arbitrage; the country does not seem to have shipped much gold to the West. The need to ship large amounts of metal over long distances gave extra importance to having good-quality coinage. The best coin for trade was a unit of high value, being both of elevated purity and substantial weight, which would retain these qualities and thus its value over time, issued by a ruler overseeing a sound economy, who would not be tempted to devalue the coin for temporary fiscal advantage.8 Such trade coins, widely recognized for their quality and enjoying prestige everywhere, were in high demand, dominated international trade and, as a rule, circulated at a premium over their metallic value.
The export of monetary metal from Iran followed maritime as well as overland routes through the nineteenth century, with most of the exports generally consisting of specie rather than bullion.9 Despite the trend for gold to retain its historically higher value relative to silver in India longer than it did in the West, gold was often favored for export to the subcontinent because at least until the 1670s it got a better rate in India, and especially in Coromandel. But silver was almost always preferred over merchandise in the trade with the east, although this naturally depended on prices for silver and for commodities in India. From time to time Iran’s rulers issued edicts against the exportation of coin from the kingdom, but only with temporary results, as merchants could easily evade these regulations indirectly, or even directly, by bribing the authorities. In Safavid times the first documented export ban on specie occurred in 1618, during the reign of Shah `Abbas I.
Similar bans were issued frequently thereafter by successive rulers. In Safavid Iran, many of the coins circulating were foreign, mainly European ones. Lacking any domestic source of precious metal coins, Safavid mints in practice functioned primarily by processing – melting and restriking – imported foreign coins. Consequently, the mint suffered if it established a price for a foreign coin which was lower than the market price. Much of the precious metal arriving from the Ottoman Empire came as bullion in the form of silver bars; some was specie, usually either Spanish reals of eight or Dutch rijksdaalders, which were approximately equal in value. On arrival in Iran these were often brought to the mints of Yerevan, Tabriz and Tiflis, to be melted and coined into `abbasis and mahmudis. The seignorage (vajebi) demanded by the state when metal was brought to the mint for coining was partly a tax and partly a fee for minting. With a good excuse a merchant could get a certificate allowing him to take the bullion to Isfahan. But this was not in the interest of the minter who stood to lose his seignorage share.
While most of the money entered Iran from the northwest, some came via Basra by caravan from Aleppo. The market price of Iranian coins therefore could not be too far out of line with the market price in Basra. The importance of the local mint of Hoveyzeh in Khuzestan and the concentration of mints in the region in the Safavid period is also explained by the proximity of Basra. The large-scale shipments of specie and bullion to and from Iran made the money supply dependent on factors over which the state had little control. War beyond the borders would keep the caravans from the north and west away and thus raise the price, for example.10 So would an increase in banditry in Anatolia.11 Similar circumstances affected the demand side in India, with war, unsafe roads, robberies or changes in the gold–silver ratio affecting prices.12 Also, the market was volatile because of rumors, which, simply by relating whether an expected specie caravan was about to arrive or not, might send the price up or down.13
Furthermore, the market was subject to strong seasonal pressures, ranging from the departure of annual pilgrim caravans to Mecca to seasonal fluctuations in trade.14 Besides Iran’s trade deficit with India and the needs of commercial life, the demand for money was also a function of the ‘hoarding’ habits of the rich, above all the shah himself. While the term ‘hoarding’ implies irrational behavior, in fact holding and hiding coins was one of the few secure ways of having liquid savings in an economy without a banking system. And such liquid savings were useful for large purchases or as a fallback in the event of hard times in the form of unrest, crop failure or epidemics. Rulers were often tempted to manipulate the coinage as a quick way of raising funds. Iran had a long tradition of maintaining the alloy percentage in its coinage.
When the government decided to devalue the coinage, the usual method was either to raise the accountancy value of the existing coins or to reduce the weight of coins, principally by clipping old coins. Such measures typically were accompanied by a ban of the export of good coins and the bullion these were made of. Clipping old coins was facilitated by the fact that Iranian coins were unmilled and hammer-struck, and that they tended to be small and thick. At times when many of the old coins had been clipped, new coins at reduced standards were introduced to reflect the general state of the coins in circulation. The practice of devaluing the coins was limited by the widespread use of foreign coins and the large-scale trade in bullion. Devaluation was also complicated by the use of coins of three different metals, which meant that if the coins of one metal (typically copper) were devalued, the working of Gresham’s Law might prompt merchants to switch to the use of coins of that metal at the expense of the use of coins of another metal (typically silver), with unintended consequences. Barter was common in Iran throughout this entire period. In many parts of the country much of commercial exchange took place outside the cash economy, so that for most of the population money played no or a limited role.
In most rural parts, production was anyhow not for the market. Money was mostly used in payments to the state, and even there, cash payments were often optional; although the tax burden was expressed in monetary units actual payments were settled in-kind. The state also often paid its officials with assignments on the produce of land, not in coin. According to Chardin most of the shah’s taxes were in-kind and consequently many of its payment orders were in-kind as well.15 The tas`ir, or system of conversion rates, was used to set a value for commodities when the state was collecting taxes or making payments; the rates fluctuated some with the demandsupply situation of the particular commodity.
Local Economies rather than a National Economy
The collapse of the Il-Khanid state in the 1330s led to a breakdown of political as well as monetary unity in Iran. In the late-fourteenth century Iran became divided into a series of distinct monetary zones, each with its own standards and its own sequence in weight reductions of its silver coinage. Album labeled these, after their principal cities, the Baghdadi, Tabrizi, Nishapuri, the Shirazi and the Lari zones.16 Some of this regionalism persisted into the Safavid and even the Qajar period.17 During much of this period, Iran had a proliferation of mints, in part because the shah would order the establishment of a mint in a newly conquered city to demonstrate his control. Rabino identified 124 mint cities, besides the treasury mint and the mints at army camps, that were operational between 1500 and 1877.18 At any one point in time, the number of operational mints was substantially smaller. Although shahs set up mints, they did not have full control over them.
The mints were typically farmed out, and the farmers were under varying degrees of control by the ruler. Until the establishment of one national mint in 1877, the weight and fineness of coins were based less on a national norm than on local practice. Throughout much of the period 1500 to 1925, there was a difference between Tabrizi or Iraqi tumans and those of Khorasan.For the period before 1877, it makes more sense to study the changes in weight and fineness of each mint rather than combining the results of several mints into a theoretical national average. For Iran such histories exist only for Tiflis, Rayy, Amul, Wasit and Azerbaijan.20 Because the coins from one mint were not necessarily equal to the coins from another mint, merchants and money-traders often demanded a discount to convert the coins from another mint into the local coins – the technical term is ‘agio’.
That discount could be due to many reasons, including differences in the reputation of certain coins (how much their actual metal content varied from the nominal amount), or changes in the demand and supply of currency at that location at that time. Differences in the relative value of different coins – for instance, in the ratio between copper and silver coins – from one area to another led to the shipment of coins from one town to another in order to capture the difference in their value. The relative value was monitored closely in each city by the sarrafs whose business it was to move metal and bullion.21
This system of regional diversity persisted until 1877, when a uniform national standard was imposed, based on the existence of one national central mint and one standard of currency. In Iran the state permitted governors the authority to issue token copper coins – that is, coins whose value is materially greater than the value of the metal of which it is composed. The state guaranteed their convertibility with full-bodied coins – coins whose value is equal to that of its component metal – in a limited area and for a limited time. This system stemmed in part from the fact that the cost of production of valuable coins was practically the same as that of petty coins. With the unit cost of petty coins being much higher relative to their value, the production of those petty coins was more attractive if the value of the petty coins exceeded their metallic content. Token coins tempted the counterfeiter, because of the large difference between metal and face value. Counterfeiting was most easy when minting technology was primitive and rough, as it often was at provincial mints. Governors issuing copper coins used no standard size or shape.
The folus differed in size, weight and value by area, also because the issuing authority, the local governor, decided on whether to strike copper and what its value would be. Each governorate had its own particular copper coinage and mark. The marks struck on copper coins by the Safavids, Afsharids, Zands and Qajars were old Iranian images as well as eponymous animals of the Zodiac and Tatar cycle, although this did not mean that the date of issuing these signs coincided with the calendar year indicated by the sign. Kuteliia, basing himself on the available coins studied by him, observed that on the obverse side of the Safavid copper coins some forty different presentations can be found. Often at the end of the year, the mark on the coin was changed.
Old coins were to be turned in at the mint, where they were melted, coined anew and given a new mark by Nowruz. Coins with an old mark were usually valid for only half the amount of coins with the current year’s mark. To that end, by the end of the year, around February, the old copper coins were cried down in value, a practice which hurt the poor considerably. However, existing coins are often badly worn, to the point where their marks on one or both sides are often obliterated. This heavy wear implies that these coins were in circulation for long periods. Thus, it would seem that the annual change was not as automatic as some have intimated, but that this varied per mint and per period.
The Transition to a Modern Monetary System
With the establishment of the Imperial Bank of Persia in 1889, Iran began to use paper money on a systematic basis. As the Qajar dynasty drew to an end in the 1920s, Iran was making the transition to a modern monetary system based primarily on paper money issued by a state-controlled bank, with a subordinate role for coins whose value is determined by state decree rather than by metal content. That was a fundamental break from the monetary system which had prevailed for many long centuries – the complicated and chaotic system we describe in this volume.
Link
Press Here
0 التعليقات :
إرسال تعليق