Imperial Bank of Persia
The Imperial Bank of Persia (
The bank was the first modern bank in Iran and introduced European banking ideas to a country in which they were previously unknown.
Background and history
Nineteenth-century Iran has been described as "one of the most backward countries in the world."[2] As usury was forbidden under Islam, the traditional money lenders in Iran were the Jewish sarrafs, who continued to dominate the field after the Imperial Bank's arrival due to greater loan flexibility and cultural ties.[3] At the time the only form of money in circulation was gold and silver coins.
Reuter was granted the Reuter concession in 1872 which granted him exclusive rights over virtually all the resources in the land of Persia. While the real reason Reuter wanted the concession was in order to develop the railroad in Persia, it also gave him monopoly over banking for sixty years.[4] The concession was hidden from the British government till the last minute, and alarmed both the British and Russian governments upon its revealing. The concession was resented by the local population, which protested that the Shah had granted all the resources of the land to a foreigner and by Russians who saw the British competing with their interest in Persia. Due to mounting pressure, the Shah subsequently cancelled the concession in 1873, citing the fact that Reuter failed to initiate the railway project within 15 months.
Reuter was not to go down without a fight. However it was not until 1889 that he was able to get exclusive banking and mining rights for sixty years. Although this new concession was not as immense as the first one, it still granted him valuable control over Persian banking and mining with the energetic support of British minister, Henry Drummond Wolff.[5]
The Imperial Bank of Persia was finally established in 1889 on the basis of the 1872 concession to Baron Julius De Reuter from the
There was a similar Russian bank known as the Loan and Discount Bank of Persia (Bānk-e Esteqrāżī-e Rūs) which was founded in 1890.[6] The Anglo-Russian Convention of 1907 split Iran into a Russian and British sphere of influence. It assigned to the Russian Loan and Discount Bank the revenues from the amortization of Persian debts in northern Iran, and the same for the British Imperial Bank in southern Iran.[7]
Between 1889 and 1928, the bank operated as the
The bank's high level contact in Tehran was general Albert Houtum-Schindler who was, like Reuter, a British subject of German origin. Schindler lived in Persia for many years and was the most informed member of the European community in Persia at the time. Henry Drummond Wolff liked him so much that he tried unsuccessfully to persuade the foreign office to engage him as a member of Legation staff. Reuter employed him instead. Schindler and Rabino were instrumental in increasing the bank's reputation.
The bank was instrumental in providing British loans to the Shah between 1892 and 1911. These loans were secured using Caspian fisheries and the custom dues of the Persian Gulf ports and raised the alarm of Persian nationalists.[14] By 1928 the bank had 24 branches in all major Iranian cities.[8]
Between 1928 and 1952, the Imperial Bank was subject to criticism and attack from the nationalistic Iranian governments.
In the late 1940s, the bank opened branches in the
Assessment
According to Jones, "the Bank was widely seen as an agent of British imperialism, and with reason".[16] Jones argues that during the two World Wars and in the early 1920s, the bank placed British diplomatic interests before those of Iran's elites.[16]
See also
- Banking and Insurance in Iran
- Central Bank of Iran
- Ottoman Bank
References
- ^ State Bank or Agent of Empire? The Imperial Bank of Persia's Loan Policy 1920-23 Frances Bostock Iran, Vol. 27, (1989), pp. 103-113 Published by: British Institute of Persian Studies Article Stable URL: https://www.jstor.org/stable/4299822
- ^ ISBN 978-1-78254-818-8.
- ^ a b c d e f g h i j k l m n "Archived copy" (PDF). Archived from the original (PDF) on 2013-05-14. Retrieved 2014-01-26.
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: CS1 maint: archived copy as title (link) - ISBN 9780897223379
- ^ The English Amongst the Persians: Imperial Lives in Nineteenth-Century Iran, Denis Wright, pp 103.
- ^ "ETTEHĀDĪYA, ŠERKAT-E". Encyclopedia Iranica. Retrieved 2021-08-22.
- ^ "ANGLO-RUSSIAN CONVENTION OF 1907". Encyclopedia Iranica. Retrieved 2021-08-22.
- ^ ISBN 978-1-78254-818-8.
- ISBN 978-0-595-61326-7.
- ^ B. V. Anan'ich, Rossikoe Samoderzhavi i Vyvoz Kapitalov (Leningrad: 1975).
- ^ The Imperial Bank of Iran and Iranian Economic Development, 1890-1952, Geoffrey Jones, page 75.
- JSTOR 23702627.
- ^ The English Amongst the Persians: Imperial Lives in Nineteenth-Century Iran, Denis Wright, pp 105.
- ^ The English Amongst the Persians: Imperial Lives in Nineteenth-Century Iran, Denis Wright, pp 106.
- ^ Project MUSE – Alfred Chandler and the Importance of Organization
- ^ ISBN 978-1-78254-818-8.