Persian Empire 1845

Chapter 65 Taking a Vacation and Still Working
Because Nasserdin was very busy with work recently, the Shah forced him to take a leave of absence.

Breathing in the fresh air and looking at the newspaper he had bought, Naserdin felt that life was nothing more than this.

The news right now is mostly domestic; there's not much interesting stuff from abroad. But things will be better next year; the great revolution that swept across Europe will have a profound impact.

"Your Highness," Amir said again as he arrived at Gulestan Palace, intending to present his proposal to the other party even though the latter was on vacation.

“Teacher, what is it that you need to give me personally?” Naserdin asked.

“It is so, Your Highness,” Amir explained, “Recently, there has been too much issuance of rials, prices have risen a lot, and having only one bank is a bit too monotonous, so I wanted to discuss this with you.”

Naserdin wasn't omnipotent either, and at this moment he wanted to hear his teacher's thoughts.

Amir didn't know much about finance, but he knew that a large amount of gold was needed as collateral to issue paper money; otherwise, too much paper money would become worthless.

"Your Highness, we urgently need a large amount of gold as collateral. If paper money continues to be issued like this, it will eventually become worthless. Prices in Tehran have already risen considerably, and it looks like this will continue for quite some time."

In addition, the Industrial and Commercial Bank of China (ICBC) has already established branches in cities such as Tehran. Some businessmen have also jointly petitioned to establish a bank.

Twenty-five merchants from Tabriz petitioned to establish a private bank with a capital of 2 million rials. Meanwhile, a dozen or so nobles from Tehran petitioned to establish a bank with an initial capital of 1.8 million rials.

"Send it all back. If you feel you have nowhere to spend the money, invest it in a factory. As for banks, don't even think about it."

The financial industry must not be allowed to be controlled by private individuals, especially banks and insurance companies. If this were to trigger a financial crisis, Iran might very well start protesting.

"However, having only one bank is indeed too few. It would be better to set up a few more, one to be responsible for agriculture and one for development."

Seeing the Crown Prince's attitude, Amir knew that the private bank plan was hopeless. However, he didn't think it was a big deal; now was the time to set up the factory.

"As for gold, let's see if there are any gold mines in the country. Importing gold bullion from other countries can also solve part of the problem, but the most important thing is to establish the exchange rate between the riyal and the pound."

Amir quickly said, "The setup of the central bank is about to be completed, and the terms are being discussed by Parliament."

In addition, trade figures for the first three months of this year have also been released. The total was 798 million riyals, which reflects the depreciation of the riyal, but also an increase in exports.

According to Iranian customs data, Iran exported 355 million rials and imported 443 million rials in the first three months of the year. Of the exports, carpets and other textiles accounted for nearly half, with the remainder including food and other handicrafts. Imports consisted mainly of various industrial goods and cotton, due to a recent surge in investment in the textile industry and an increase in machine-produced textiles.

However, the textile market is extremely competitive, forcing Iranian textile manufacturers to seek markets both domestically and internationally. Fortunately, trade treaties with several Central Asian countries proved invaluable. However, due to the long distances, long-distance traders began transshipping goods and resting near Ashgabat. Some found it appealing and established trading posts there, leading to its rapid prosperity. "How is our trade with the Ottomans?"

"Our main exports to the Ottomans are carpets, raw silk and fabrics, and we import cotton, which the factories in Tabriz need."

Every country seeking economic development needs vast colonies and protectorates. Britain had India, France had Africa, the United States had South America, and even Japan had Korea. So what about Iran? Relying on the three Central Asian republics is clearly insufficient, and even with Afghanistan, its population is only two-thirds that of North Korea. It has to settle for the Ottoman Empire, which, despite its smaller population, was a qualified semi-colony, nicknamed "Little Qing Dynasty of West Asia." How could it not be valued?

"The Ottoman ambassador has agreed to the original plan of establishing embassies in both countries. We will establish consulates in Trabisso, Izmir, Nicosia and Istanbul, where our merchants will also trade."

Naserdin nodded and then said, "Compared to Russia, the Ottomans could be more patient. They were mortal enemies for over 200 years, but now they have made peace."

Amir didn't like the Ottomans either, but compared to Russia, it was tolerable. Moreover, the Ottomans' industrial capacity didn't seem as good as Iran's, because the number of steam-powered factories in the Ottomans could be counted on one hand, and most of them were foreign-owned enterprises.

"And Your Highness, this is our plan for building a national enterprise. Please take a look."

Nasserdin took the document and began to read it. The contents were very detailed; the government had decided to make large-scale investments in the military, steel, mining, and shipbuilding sectors. These industries all required substantial funding to maintain, so the government would also invest in light industry to generate revenue. It was estimated that this would consume nearly £1000 million over ten years.

Naserdin frowned and asked Amir, "Teacher, isn't such a large-scale investment too risky? Right now, apart from Azerbaijan, which has some industry, other places are just starting out. Won't it cause problems if we invest rashly?"

Amir patiently explained to the Crown Prince that these industries require too much capital and have low profits, so ordinary people simply wouldn't invest; only the government can mobilize funds for such investment. This plan was a last resort; if the treasury were sufficient, things wouldn't be in this state.

"Your Highness, this is the current situation, but we can lay the railway first, so we can earn some money by transporting goods."

Coincidentally, Nasser al-Din thought the same thing. The railway connects the entire country, facilitating logistics and reducing travel time, which is beneficial for economic development.

"Okay, teacher, I'll look at these things later. You can go ahead and do your work."

"Alright, Your Highness, please rest well." Amir left Gulestan Palace.

Making money, making money, and more making money—that was all Nasser al-Din could think about. To raise funds, besides opening a carpet factory in Tabriz, he recently ventured into the trading industry, hoping to make money internationally. Nasser al-Din wanted to do business in India, but that was British territory and off-limits. East Asia was too far away; the Ottoman Empire was just beginning, and any trade required time to develop.

Nasser al-Din turned to the map. The world was vast, but theirs was only a tiny fraction. Looking at the Arab region separated from Iran by the strait, he wondered what the tribes there needed, and if they could sell anything.

(End of this chapter)