The Foreign Trade of Tabriz: 1800-1900

Abstract

Under the early Qajars, Tabriz rose from being a provincial backwater in ruins to the foremost commercial entrepôt of Iran. Initially, its insignificant foreign trade was limited to Turkey (mostly raw Gilani silk), but, when the major commercial southern and western supply routes of Iran became unsafe and costly, trade moved to the northern route. Moreover, after Russia opened its territory to European goods in 1821, these also flowed via Tiflis to Tabriz. When ten years later Russia revoked this permission, the Tiflis trade moved to Tabriz via Trabzon, gradually replacing not only the Tiflis route but also the Istanbul-Erzerum route. This turned Trabzon into a quasi-“Iranian” port, as initially most of its imports were destined for or coming from Iran. Four-fifths of imports to Tabriz were European fabrics. Initially these had come from Russia, but, as of the 1820s, such were replaced by British, German, French, and Swiss fabrics. By mid-century, Manchester fabrics dominated the import trade of Tabriz. Thus, Great Britain took Russia's place as its primary trading partner, although by 1900 the tables had turned. During the majority of the nineteenth century, Caucasian Armenian merchants dominated Tabriz's foreign trade, with European merchants playing an important but limited role in the import of Manchester goods and the export of raw silk. After 1870, the importance of Tabriz as the commercial hub of N.W. Iran decreased, due to various reasons such as the outbreak of the Gilan silk disease, Russia stopping the transit of non-Russian goods, and the opening of the Suez Canal, but also because it became cheaper to import goods via Bushehr and Baghdad-Kermanshah. Nevertheless, even with a diminished role as a financial center and less foreign trade, Tabriz continued to be Iran's major commercial center until WW I.

Introduction

The volume of Tabriz's foreign trade was influenced by a number of factors, both external and internal. External factors included countries’ rules and regulations, such as those of the Ottoman Empire and Russia, through which much of Tabriz's trade passed. Moreover, war, the threat of war, and security in those countries, either because of marauders or military operations, had an impact on trade, sometimes even a positive one for Tabriz; I speak more on this later.¹ Furthermore, whether foreign partners demanded cash, sold on credit, and/or agreed to barter also impacted trade. In 1839, the American consul reported:

Formerly, sales were to Persian merchants in Constantinople for cash, but now, gradually, 6 months credit is allowed. Last summer a caravan was robbed resulting in non-payment of the 6 month credit, so that there is now few or no sales for ready money.²

The value of the qran and local banking arrangements were also closely related to the issue of payment method.³

Internal factors included the rise and fall in the purchasing power of domestic demand not only in Azerbaijan, but also in other parts of Iran, as Tabriz was but an entrepôt and much of its trade was in transit.⁴ As 80 percent of Azerbaijan's population earned their livelihood in agriculture, their incomes rose and fell in harmony with the harvest. Poverty in Tabriz's hinterland, for whatever reason, was not good for trade, as people could not afford imported goods. This meant that weather conditions or agricultural plagues impacting agricultural production, oppression by landlords and government officials, famine, political developments with the potential to result in upheaval, and road security all had direct consequences on both the urban and rural population's purchasing power, and thus for sales.⁵ Azerbaijani peasants, on the whole, were “in a fairly well-to-do position.” Peasants suffered more from “the careless and unequal distribution of the fiscal burden” than from structural oppression by landlords.⁶ However, it would seem that the level and incidence of oppression increased in Azerbaijan.⁷ In the 1880s, the acting governor, Amir Nezam, abolished fiscal payments in kind, meaning payments all had to be in cash, and his successors continued this practice.⁸ In the 1890s, a British traveler observed: “In no other country in the world does poverty, due to the rotten state of the government, exist like in Azerbaijan; the peasants are held in a state of oppression and abject slavery.”⁹ The situation in Azerbaijan did not differ much from that in the rest of Iran, although there were local differences.¹⁰

Migration was a positive factor on trade. In the 1850s to 1860s, intra-rural migration began, in particular in the northern provinces of Azerbaijan and later, after 1880, in Khorasan. This was first due to demand for unskilled labor in the Caucasus and the Transcaspian regions, and second, to the fact that the agricultural season was too short to enable many of the landless workers in Azerbaijan to earn enough to feed their families. It was customary for the Nestorian Christians to go to work in Russia and, in this way, they earned some £100,000 per year.¹¹ Many Moslem Azerbaijanis also went to work in Russia, and “immediately [as] the harvest is completed and gathered they return, bringing their hardly-won earnings with them.”¹² This annual migration lasted until the Russian Revolution of 1917, after which it declined sharply, stopping completely around 1920.¹³ Finally, market behavior and developments––such as competing products, prices, and routes––all influenced the volume and composition of trade.¹⁴ More on this further on.

The Growth of Foreign Trade

A weak start: 1800–1820.

When, in 1798, the Qajars finally established their rule over the territory of Iran, the population of Tabriz, said to have numbered 500,000 in the 1670s, had dwindled to a mere 40,000. Devastating wars during the Afghan and Afsharid rule (1722–1750), civil war (1795–96), and two major earthquakes, which reduced the city to a heap of ruins, were responsible for this decline. In 1721, the first earthquake ruined about 75 percent of houses and damaged the large main buildings, and about 40,000 people lost their lives.¹⁵ The second earthquake in 1780 destroyed the city: all major buildings damaged by earlier shocks were ruined completely; all private houses, the fort, and the walls were totally destroyed; and some 50,000 people were killed, reducing the population to a mere 40,000 inhabitants. Also, the qanats and springs dried up.¹⁶ The city, however, did not receive much room to recover, as the Qajar ruler was not uncontested. In 1795, Sadeq Khan Shaqaqi challenged Fath Ali Shah's rule. Sadeq Khan appointed his brother, Mohammad Ali Soltan, as governor of Tabriz and, “supported by the lower classes, plunderers, profligates, dissolute characters, and bankrupts of the city,” he oppressed the people of Tabriz. The latter also forced the artisans and manufacturers of Tabriz and Qarajehdagh to march with his army on Khoy.¹⁷

Despite these events, foreign observers had a rather inflated idea of Tabriz's commercial importance. In 1801, for example, it was reported:

This place carries on a prodigious trade in cotton, cloth, silks, gold and silver brocades, and fine shawls. It is seated in a delightful plain, surrounded by mountains, whence a stream proceeds, which runs through the city.— The King's visit is said to be occasioned by some commercial matters which require regulation.¹⁸

There was trade passing through Tabriz, but there are no details of its nature. According to Pallas, the value of the export of raw silk from Iran to Turkey and Italy in the 1780s to 1790s amounted to 1,000,000 rubles. He argued that trade with Iran (imports: silk, fish, indigo, cotton, madder, galls plus 100,000 rubles in manufactured goods) was disappointing for Russia (exports: cochineal, sugar), as it ran a structural trade deficit.¹⁹

In 1804, after Qajar rule was reestablished over Tabriz and the province of Azerbaijan, Abbas Mirza was appointed the province governor. Instead of the young fifteen-year-old prince, however, Ja`farqoli Khan Donboli initially governed the city and province. Gradually, Abbas Mirza increased his control and continued the program of city renovation begun by Zand governors and provincial magnates after the 1780 earthquake.²⁰ While most of Abbas Mirza's construction activities were military in nature, as the war with Russia dominated public policy, some also had economic objectives.²¹ Housing was, of course, a private matter; after all, the state's role in the economy was and remained rather limited. According to Porter:

The Prince does not aim so much at adorning the city, as to strengthen it. The present fortifications were begun, and finished by him; and a maidan, or square, laid out, and surrounded with barracks, for the troops he is organizing according to European tactics. A palace also is under the masons’ hands, for his own residence.²²

The city was further surrounded by a thick wall, protected by towers, bastions, and a deep moat. Its total circumference was about 6,000 meters. Four gates gave access to the city, whose suburbs were still in ruins; in some parts, the wall extended to over three miles from the city. The had twenty caravanserais.²³ Despite these building activities, however, Morier was not impressed by the city:

Tabriz is no more the magnificent city described by Chardin: all its large buildings have been destroyed by earthquakes. I rode round the walls, and estimated the circumference at three miles. Three of the gates are ornamented with pillars, inlaid with green-lacquered bricks, and look very respectable; the other five are very small and mean. The walls are very weak, and here and there renewed with mud-bricks baked in the sun. The whole town is surrounded by gardens, which the Persians call Meewa-khonéh, or fruit-houses.²⁴

Houses were gradually rebuilt, but only one-story high. Also, allegedly, more timber and a construction technique called takht-e push, which supposedly withstood shocks better, were used.²⁵

In 1807, Jaubert believed that Tabriz had a population of 50,000 and its circumference some 10,000 meters, almost twice that given by Porter (see Table 1; and note 23). Its walls were high, with towers, and its gates were tiled in multi-variegated colors.²⁶ In 1809, Morier, estimated the population at 50,000 houses and 250,000 people, which is much too high.²⁷

Table 1: Population estimates of Tabriz

Due to Mohammad Agha's cruel suppression of the opposition, many inhabitants fled the province. When Abbas Mirza became governor of Azerbaijan, he tried to create circumstances to induce people to return.²⁸ In the 1820s, for example, Tabrizi inhabitants who lost property when a caravan was plundered in Shirvan received the equivalent in property from Abbas Mirza.²⁹ He also financially supported foreign trade.³⁰ But this was not the only sign that trade, like the city's population, was slowly growing. For example, the sarrafs of Tabriz had a relationship, presumably financial, with the governor of Khoy, who gave drafts on them for Jaubert.³¹ The latter further opined that, when he passed through Tabriz, the bazaars appeared well-kept and filled with goods from India and Iran.³² However, Klaproth wrote that after the first Iranian-Russian war of 1813, the limited trade that had existed between the two countries was reduced to nothing.³³ Soon after the end of the war, however, Freygang reported: “the silk manufactories [in Tabriz] are numerous, and their fabrics are of a perfect delicacy; indeed a spirit of industry pervades the people so generally, that they drive a busy trade.”³⁴ In fact, all European visitors submitted that, because of its size and trade, Tabriz was the kingdom's second city, although some found this hard to believe.

Tabriz is a large town; but at first view one can hardly believe it to be the second in Persia in rank, extent, wealth, manufactures, trade, and population, which, they say, amounts to a 100,000 souls. Were it not for the superb bazaar, and a multitude of churches, one should be included to look upon this vast mass of little dwellings as an immense village.³⁵

It is noteworthy that none of the travelers who visited Tabriz during the first two decades of the nineteenth century (e.g., Gardanne, Jaubert, Morier, Ouseley, Freygang, or Drouville) indicated the volume or composition of Tabriz's trade. In fact, most did not mention its trade at all. Dupré is the only one who provides some information in 1809, even though he exaggerates the city's commercial position and splendor, alleging that Tabriz was one of Iran's most commercial cities. Caravans from Erzerum, Baghdad, Rasht, Tiflis, Hamadan, Shiraz, and Isfahan carried goods there from Europe and India. Tabriz either distributed these goods to other parts of the country or offered them for sale in its well-covered and well-stocked bazaar. Tabriz also exported its own silk and cotton manufactures, as well as other fabrics such as dara'i.³⁶ While there is no doubt that Tabriz, like other cities, received caravans from various other cities, this did not necessarily make it a major commercial hub in terms of volume. After all, the province as a whole was still recovering from past devastations, military operations were still ongoing, and Tabriz itself had perhaps only 40,000 inhabitants and was in ruins. Also, Dupré observed that there were only a few, perhaps twenty, wealthy merchants in the whole of Iran, making it less likely that major trade was taking place. In fact, he submits that very little trade was happening between Iran and its neighbors (Russia and the Ottoman Empire).³⁷ Further, in 1817, von Kotzebue was rather dismissive of Tabriz as a trading town:

The bazaar here, which is reckoned the first in Persia, is nothing more than a narrow passage, the top of which is covered with rush mats, and it is lined with small shops. Here and there the passage opens into a spacious court, occupied by caravansarys, which are merely stone warehouses, where merchants deposit goods which they afterwards retail in the shops. …Very few of these tradesmen have shawls for sale, and when they have any, it is only in small numbers.³⁸

Trade with the Ottoman Empire consisted of the following exports: Kashmir and Kerman shawls, indigo, some Gilan silk, gall nuts, tobacco, Bokhara skins, pipe stems, and drugs. Imports consisted of: some European items and a range of fabrics, such as chintz, light cloth, silken stuffs, velvets, moirés, brocades, braids, sequins, ironmongery, crockery, and porcelain.³⁹

It was only around 1820 that Tabriz was slowly becoming a booming commercial entrepôt.⁴⁰ A French observer of Tabrizi trade in 1825, Eugène Desbassayns de Richemont, reported that, due to the Irano-Ottoman border conflict of 1821, the road to Istanbul was closed and Iranian merchants had thus diverted their trade to Tiflis.⁴¹ In that same year, additionally, the market share of Russian cotton fabrics had become so important that Iranian manufacturers petitioned Fath `Ali Shah (r. 1797–1834) to ban their further import.⁴² When, in 1824, peace was agreed between Iran and the Ottoman Empire, the Ottoman government reduced the customs rate for Iranian traders to four percent and exempted them from transit taxes in Kurdistan and Turkey proper; a move aimed at attracting Iranian merchants to the overland trading route to Istanbul and Izmir. Despite these fiscal incentives, however, trade did not increase. This is clear from the price paid for the customs tax farm, which amounted to 12,000 tumans before the war, but only 10,500 in 1824 and 7,000 in 1825. As a result, Abbas Mirza felt obliged to assume direct control over the Tabriz customs office.⁴³

Tabriz Becomes Iran's Premier Entrepôt

In the first three decades of the nineteenth century, Tabriz was supplied via Tiflis, Lenkoran, Rasht, Erzerum, Trabzon, Bushehr, and Baghdad. In the 1820s, according to a report from St. Petersburg, some 300 merchants traveled to Constantinople each year to buy European goods. To support this trade, Abbas Mirza invested 20,000 tumans in this endeavor. At Tabriz, ten to twelve caravans arrived annually from Constantinople via Erzerum, importing 400,000 tumans of English and French goods. In return, Iran exported silk, tobacco, shawls, indigo, and pepper. Very little trade came from Smyrna any longer, because goods had to be bought there with ready money. From Trabzon, 200–300 horses carried glassware, pottery, porcelain, and ordinary cloth to Tabriz annually. Also, via Tehran, goods such as coffee, shawls, indigo, sugar, cover lids, prints, and English cotton fabrics arrived from Bushehr, representing a value of one million tumans in trade to Tehran and Tabriz. Via Baghdad, Tabriz received at least 100,000 tumans in English and French goods.⁴⁵ It is difficult to assess the reliability of the above trade figures, as well as those presented by Fraser below (see Table 2). The latter's figures contradict the above, showing that trade with Turkey was only 200,000 tumans, not 400,000, assuming that one tuman equaled one British pound. Although a rough and inflated estimate, Fraser's data suggests that Tabriz's foreign trade amounted to some £400,000 (Tiflis + rest Turkey) in 1821 already, implying that it was already the most important entrepôt in Iran.⁴⁶ However, other contemporaries argued that Tabriz's commercial importance as an entrepôt only began in 1831.⁴⁷

Table 2: Rough estimate of Iran's foreign trade in 1820–21 (in £)⁴⁴

Before Tabriz's trade gained importance, most imports entered Iran via the Bushehr-Shiraz and Baghdad/Kermanshah routes. However, during the first three decades of the nineteenth century, insecurity on these routes increased. The Baghdad-Kermanshah route suffered both border raids and incursions into Iraq by the governor of Kermanshah, as well as the general unruliness in the Baghdad pashalik, while raids by the Mamasani tribe made the Bushehr-Shiraz route insecure.⁴⁸ Therefore, trade looked for safer and cheaper routes. As a result, the Turkish route via Erzerum-Khoy-Tabriz and the Tiflis-Tabriz route, promoted by the Russian government after its conquest of that part of the Caucasus, acquired prominence. As of 1812, several British authors and an 1825 French trade mission favored the development of the under-utilized Trabzon-Tabriz route, arguing that this shorter, cheaper route would enable not only the large-scale import of European goods to Tabriz, but also a more cost-effective export of raw Iranian silk and other products.⁴⁹ The main argument favoring Tabriz was “distance.” The Bushehr route was 1,930 km long with transportation costs of 10–13 tumans per load, while the Trabzon route was 965 km long and cost 5–6 tumans per load.⁵⁰

Where others talked and/or wrote, Sadeq Beg, an Armenian agent of Abbas Mirza, at his master's orders, acted, importing British goods directly from Great Britain via Trabzon for the first time in 1827.⁵¹ During his first voyage, he met Charles Burgess in London, whom he convinced to join Abbas Mirza's army as a military advisor. When, in 1829, the British military mission was let go due to financial problems, Charles Burgess established himself as a merchant––financed by his father––working, amongst others, with Sadeq Beg, who had been promoted to the rank of khan, and henceforth named Sa`id Khan. In 1830, Burgess claimed to have been the first European merchant to import goods directly from Europe to Iran. He sailed from England via Istanbul to Trabzon (4–10 days), and from there via Erzerum (10–11 days) to Tabriz (16 days). He paid his 3 percent duties at Istanbul and a small fee at Diyadin (Deeodeen), and found the road reasonable and safe. In winter, however, the road was rather dangerous.⁵²

The shift in trade with Iran via Tabriz was further enabled by the transfer of the staple from Izmir to Istanbul around 1820. Thereafter, Iranian merchants were able to buy European goods cheaper in Istanbul, which they first shipped via Scutari overland via Erzerum to Tabriz. This route was quite an improvement for channeling European goods via Turkey.⁵³ Foreign trading interests, however, argued that direct trade between West Europe and Iran, via the Trabzon-Tabriz route, offered better opportunities than indirect trade via Istanbul.⁵⁴ James Brandt, a British merchant and consul based in Trabzon, argued that only the establishment of European firms in Tabriz could make the Trabzon route a success, otherwise Iranian traders would prefer to order goods from Istanbul. Brandt echoed what Burgess had written in 1832: everywhere outside Tabriz, merchants urged British merchants to establish themselves in Iran and sell their goods directly to clients rather than the current system of sales via agents in Tabriz, Erzerum, and Istanbul. At that time, trade from Istanbul via Baghdad and Kermanshah, or via the desert through Khuzestan, had become impractical due to internal troubles in the Baghdad pashaliq, and thus caravans traveled via Erzerum and Tabriz.⁵⁵

Growing insecurity on the Bushehr-Shiraz and Baghdad-Kermanshah routes coincided with the sharp reduction in trade via the Redout-Kaleh-Tiflis-Erevan-Tabriz route after 1831.⁵⁶ This other commercial route was heavily favored by the Russian government, intended to stimulate the export of its own domestic manufactured goods. It was an alternative to the traditional route via Volga-Astrakhan-Caspian. In the 1790s, via the traditional route, according to Pallas, Russia imported between 6,000 to 8,000 pud of silk from Iran, paying over 1,000,000 rubles in goods and specie for both the silk and rent for Caspian fisheries. The value of other Iranian imports (spun and raw cotton, madder, galls, fabrics, pelts, and dried fruit) was small and amounted to some 100,000 rubles per year. Russia had a trade deficit with Iran and only exported a few goods, valuing about 220,000 rubles, part of which were foreign imports. The main export goods were cochineal, broadcloth, and velvet (180,000 rubles), and the remaining consisted of leather, sugar, paper, small mirrors, iron and copper ware, and spices (40,000 rubles). Russian merchants in Astrakhan could not compete with European merchants, who imported large quantities of West European goods at low prices. Although land transport via Aleppo was high, contrariwise customs duties were lower than at Izmir (5 percent) and Erzerum (10 percent). Russian merchants had to pay a 25 percent import duty on European goods in addition to the cost of sea and land transport. Thus, Pallas concluded:

As the balance, therefore, to trade with Persia is against us, it is worthy of investigation in what manner our commercial intercourse could be rendered, if not profitable, at least, less detrimental to the interest of the Empire, and in my opinion, we possess the means of affecting that desirable purpose.⁵⁷

While Pallas made a proposal for how to improve Russia's current account deficit with Iran, it was not pursued due to political changes in Russia and its partial conquest of the Caucasus, including the annexation of Georgia. Gamba, the French consul at Tiflis, wanted to develop Georgia and make its capital the entrepôt of the Caucasus for trade with Iran. Therefore, he convinced Yermolov, the governor-general of the Caucasus, to propose that the Tsar allow foreign merchants to import European goods via Tiflis. The Tsar immediately agreed and issued the relevant ukase on October 8, 1821. Gamba also urged the French government, and by extension French traders, to support this Tiflis route.⁵⁸ Already in 1826, Armenian trade between Tiflis, Gilan, and Tabriz allegedly amounted to some 1.6 million rubles of Russian goods, including glass, crystals, coarse calicoes, sugar, nankeens, prints, etc. This was a considerable increase compared to 1819, in which the total goods imported and exported at Tiflis amounted to 471,216 rubles and 28,954 rubles respectively.⁵⁹

Russia also carried on substantial trade via the Volga-Astrakhan route, shipping goods via the Caspian to Lenkoran and then by horse to Tabriz.⁶⁰ The Tabriz market was also supplied via other Caspian ports, such as Enzeli. In July 1829, it was reported:

Last year a manufacturer of Schuja sent printed calicoes and nankeens to the value of 300,000 rubles to the Persian port Zinzili [sic; Enzeli], on the Caspian. Part of his goods was sent to Tauris, where they were sold at 30 per ct. profit; the remainder was sold to advantage at Zinzili. The clerk who was sent with them is expected in a short time at Bacow [sic; Baku], to receive another consignment of the same value.⁶¹

The unintended drawback of the Tiflis-Tabriz route was that it allowed European goods to pass without heavy taxation, thus harming Russia's domestic industry. Despite the preponderant role of Russian trade with Iran (see below), it lost market share to West European goods. One reason for this was the opposition of Armenian merchants in Tabriz, who monopolized its foreign trade, to Tiflis developing into an entrepôt. Another reason was that Iranian consumers preferred West European goods, British in particular, if the price was right.⁶² Another contributing factor was that wearing silk clothes had fallen out of fashion among Iran's middle classes and more modest and cheaper fabrics had been adopted in harmony with their reduced means; as a result, people had generally adopted chintzes as their fabric of choice.⁶³ Despite the high cost of the Tiflis-Tabriz route, traders continued to engage in this speculative trade using this route because large profits were made on Leipzig wares––as much as 80 percent, but generally 30–40 percent.⁶⁴ In 1825, the situation was described as follows in a New York newspaper:

A German Paper contains the following interesting observations on the trade with Persia, as it is conducted by the Persian merchants, who attend the great fair at Leipsic: “The Persians who were here at the Easter Fair were here again at the close of the last fair, and gave us some hopes for the approaching Easter fair. They are men who are extremely well versed in trade and business, who are now visiting the manufactories in Germany and Alsace, in order to see what goods may be suitable for their own country, and which, according to the present Russian system, can pass in transit at the least expense by way of Leipsic. In future they will bring hither silk and Cachmere wool, and as they say, and give us reason to hope, will make considerable purchases: but the ornaments must be more in the oriental style than is usual in our goods. Those which they want will go farther into the interior of Asia, where German, English and French goods have not yet found their way; they also study the predominant taste at the Leipsic fair with respect to the manufactures of their own country, which may meet with a ready sale at Leipsic. The low duty on the transit of goods through Russia facilitates the trade by this channel, which may in time become important. On the other hand, the trade with Russian Poland is subject to many difficulties, but this is attended with the disadvantages to Russia, that its furs must be sold in the China market much lower than formerly, while ordinary Canada furs meet with a sale in Leipsic.⁶⁵

The Russian government was angry that its ukases did not have the desired effect, i.e., making Georgia the entrepôt between Istanbul and Iran.⁶⁶ By opening the transit of European goods through the Caucasus, Armenian merchants reacted to consumer preferences for West European products and began importing German and, above all, British cottons rather than Russian. When the increased prosperity promised for the Caucasus was less than expected, Russian manufacturers pushed the Russian government to decide to no longer favor the transit trade of European goods. Thus, the Russian government closed the Redout-Kaleh port to secure the supply of its own goods for the Caucasus and Iranian markets. Henceforth, these had to pay normal Russian customs duties, effectively closing this route to European goods.⁶⁷

The ukase of 1831 ruined the Redout-Kaleh-Tiflis-Tabriz trade.⁶⁸ The result was not what the Russian government had intended or hoped, as Armenian merchants continued to frequent the Leipzig and Hamburg fairs, but, rather than importing their goods via Russia, shipped them via Trieste and other Adriatic ports to Istanbul and on to Tabriz. Trabzon replaced Redout-Kaleh, despite the fact that its roadstead was not always secure. Iranian merchants preferred Trabzon to Scutari, and thus moved their business there. The establishment of a regular steamboat service between Istanbul and Trabzon made the latter prosper.⁶⁹ This new situation made the Trabzon road a more attractive one, despite its less attractive aspects (i.e., arbitrary fees and bad road).

1831 was the first year that a large shipment of goods from Trabzon came to Tabriz. From then, trade only increased due to Central Asian demand for European goods.⁷⁰ As a result, the Trabzon-Tabriz route quickly developed and fully displaced the import of West European commodities via the Tiflis-Tabriz route. There was still some import of prints and colored cottons from India via Bushehr, but it was a dwindling trade.⁷¹ Because the Trabzon route was quite attractive to British importers, words bandied about the subject for years were replaced by action, and Manchester goods flooded the Iranian market. In reaction to these developments and other pressures, the British government established a consulate in Trabzon in 1831.⁷² In 1836, 16 Armenian merchants from Tiflis and Qarabagh imported goods to the value of 2,959,892 rubles to Tabriz. This was a considerable increase from 1832 (960,000), 1833 (432,000), 1834 (478,000), and 1835 (2,124,000).⁷³

Trabzon Becomes Gateway to Tabriz.

Trade with Russia via Redout-Kaleh immediately fell off, although an immediate increase in trade with Iran via Erzerum did not materialize.⁷⁵ Table 3 shows an enormous increase in trade from 1833 to 1836, which I am unable to explain, as it is unlikely that trade immediately exploded via a hitherto barely used route. Even if one assumes that, for the years 1833–36, shipments from the Istanbul-Erzerum route were included, these figures are still very much at odds with the development of trade after 1836. Moreover, they are contradicted by import data for Trabzon (see Tables 4, 6, and 8), which, in bales, is considered more reliable than customs financial data. Also, it is more likely that the increase of trade via Trabzon, as shown in Table 3, developed at a more gradual pace, due to the use of the new route.⁷⁶ After all, without prior and proper organization of the logistical requirements (e.g., pack-animals, warehouses), a sudden increase in imports cannot take place.

Table 3: Imports into Tabriz by origin 1833-52 (in assignation rubles)⁷⁴

*plus 5,000 rubles from Hamburg. # includes also goods from Hamburg

Table 4: Imports and exports into and from Iran via Trabzon 1833–1842⁷⁷

The figures in Tables 3 to 8 are based on data that British and Russian consuls collected from the Customs-house. This means these figures only reflect trends in imports and exports rather than giving a completely truthful picture of Tabriz's foreign trade. This is due to a number of factors. First, the customs authorities did not want to present a true picture of trade, as this would give the authorities a better understanding how much money they were making and result in a higher customs price for the right to farm. Moreover,

no separate note is kept of the precise quantity of each description of merchandize that may reach or quit it. Customs-duties being levied at the rate of so much per horse-load, those goods that pay the same duty are noted under one head. Thus we have shawls, carpets, and dried-leather all jumbled together.⁷⁸

As for trade with Turkey, the situation was easier because the number of pack-animals was precisely recorded. Although the exact value of their loads was unknown, a fair estimate was arrived at with the help of knowledgeable merchants. Also, a significant share of imports never reached Tabriz, as they were channeled via Khoy and other western districts; such were not noted in Tabriz customs-house's returns. These districts also traded directly with the Caucasus region. It also happened that goods from Russia were imported via Ardabil or Rasht and paid customs duties there, and thus not shown in Tabriz customs records. Furthermore, there was much smuggling into Russia, mainly by natives of Qaradagh, in particular of higher-quality British prints, Swiss manufactures, and European and Iranian silks. In fact, about ten percent of all European fabrics imported were smuggled into Russia. In 1859, the amount smuggled was estimated at £400,000, even higher than official Iranian exports to Russia.⁷⁹

Henceforth, Russia traded mainly via Astrakhan; a trade carried on by Armenians from Tiflis and Qarabagh. In 1833, Russian imports had a value of 2,960,000 paper rubles, while Iranian exports of raw silk and other commodities amounted to 7,419,000 paper rubles. Tabriz had become the most commercial city of Iran.⁸⁰ In fact, Tabriz was the main market for European imports and even some Asian imports, such as sugar and tea.⁸¹ The abovementioned developments resulted in a considerable drop in imports via southern Iran, from which trade partly moved to the Trabzon-Tabriz route, establishing the dominance of this northern route for the next forty years. This not only held for textiles, the major article of import, but also sugar. A further factor was the introduction of steam navigation between Istanbul and Trabzon in 1826, which was expanded thereafter and reduced transportation cost significantly.⁸² By then, Tabriz had become more important than Bushehr, which offered a more expensive route for British goods than via Trabzon.⁸³

However, trade via Erzerum to Tabriz had not yet amounted to £750,000 per year, of which two-thirds was British, as Burgess claimed in 1832.⁸⁴ Burgess was not alone in his enthusiasm, as Fowler also reported that British imports increased from £10,000 to £1,000,000 in the 1830s.⁸⁵ According to a breakdown of Tabriz's trade in 1840, imports were only slightly above £600,000, rising to £831,000 in 1848, of which Great Britain supplied 90 percent.⁸⁶ However, another source estimated trade with Europe at about £1,400,000 in 1840, which seems too high given the trends shown in Tables 3 and 4. In that same year, Russian trade via the Volga and Caspian allegedly amounted to £360,000, consisting mostly of fabrics and manufactures, glassware, mirrors, porcelain and earthenware, etc. The value of British, French, German, and Belgian manufactures was estimated at £1,000,000 (25,000,000 francs), of which French fabrics represented 600,000 francs, almost 16 percent of total trade.⁸⁷

Between 1840 and 1880, as a consequence of Russian trade policy, British cottons from Manchester had a practical monopoly over the Iranian market.⁸⁸ This had not always been the case, however, because prior to 1830, Iran had mainly been supplied with textiles (and other goods) via Russia; textiles bought mainly by Armenian merchants (Russian subjects in many cases) at the annual Leipzig Fair and other European markets. Thus, such textiles were composed of German, Swiss, British, and other European fabrics.

By the 1840s, European fabric imports had become a real avalanche.⁸⁹ Iran did not have the means to create trade barriers, however, assuming it even had the capacity to enforce such barriers. The Treaty of Torkmanchai of 1828 determined a fixed ad valorem rate of five percent on Russian imports and pari passu on imports from European countries enjoying the “most-favored-nation” status. Russia, before Britain, had started to flood the Iranian market with its prints, broadcloth, and plated goods (ouvrages placqués). Russian chintzes were of mediocre colors and little solidity, and its designs were of inferior taste, but the cloth was almost always of good quality. Iranian consumers preferred to buy inferior textiles at low cost from Russia and India, rather than French and British ones, which were nicer and stronger, but also more expensive.⁹⁰ In fact, during the 1830s, Russia had the monopoly of this market segment and its merchants made considerable profits.⁹¹ Therefore, foreign trade in Tabriz in the 1830s was in Russian hands.

Brant argued that Great Britain needed to create an attractive environment for British trade, for its major competitor, Russia, carried on a considerable trade with northern Iran. Not only Russian goods, but also German goods bought at Nizhni Novgorod, were taken via Tiflis to Tabriz. Armenian merchants imported goods from Nizhni-Novgorod, where the fair ended at the end of August, arriving in Tabriz in November. This represented an annual commercial turnover of £1.5 million. The import of manufactures consisted

principally of Russian fabrics, brought down from Tiflis by the [Armenian] Georgian merchants, to the amount of nearly a million of ducats annually, paying an ad valorem duty of five per cent. These merchants were protected by a Russian consul.⁹²

As far as prints and colored cottons were concerned, Europeans realized that, to sell textiles in Iran, they had to cater to the tastes of the market. Fraser drew attention to the need for careful planning of both design and colors in the 1820s, and Burgess in the 1830s reported, “a great taste for British cottons prevails all over these countries,” alongside Burnes.⁹³ European exporters took heed. They imitated, as closely as possible, Persian designs, patterns, and fabrics. Some European manufacturers had draughtsmen in Iran to copy local designs, on the basis of which tissues were manufactured. British officials such as Burnes and Abbott were sent to reconnoiter the market and its demand. Russia had an advantage: its Moslem subjects had similar demands to the Persian ones. However, closer and more frequent contacts via the Istanbul market, Leipzig Fair, and other similar fairs led to a desire for the more modern West European goods. As a result, Persian consumers abandoned both local and Russian products.⁹⁴ By 1870, if not earlier,

the patterns of the printed cottons are designed in Paris expressly for the Persian market, and vary very frequently according to the caprice of the native dealers. The quality is inferior, but the low price secures for the fabrics of Manchester the monopoly of the market.⁹⁵

From the 1830s until 1870, the Trabzon-Tabriz trade route was the main channel for imported textiles. Tabriz supplied most of northern and western Iran throughout the entire period.⁹⁶ Consequently, Iran had an account deficit with the Ottoman Empire (see Tables 3 and 5) due to its import of European goods. This deficit was counterbalanced by an account surplus in trade with Russia. Due to smuggling, this surplus was higher than customs data indicates, as, at the end of the 1850s, smuggling amounted to £360,000 or more per year.⁹⁷ In any event, as it pertains to trade with Iran, Russia had a negative trade balance.

Table 5: Value of Annual Imports of Various Classes of Textiles and Total Imports into Tabriz (1837–1904) in British £

Source: Issawi 1971, pp. 106, 108, 114 (1837); MacGregor 1850, vol. 2, p. 636; AP 67 (1873), p. 36 (for 1837, 1839, 1844, 1848, 1850); AP 30 (1861), pp. 62-63; AP 30-1 (1864), p. 200; AP 32 (1866), pp. 475-76; AP 29 (1867-68), pp. 59-60; AP 29 (1867-68), pp. 501-02; AP 29 (1871), p. 237; AP 30 (1871), p. 960; AP 23 (1872), p. 1189; AP 34 (1875), p. 204; AP 30 (1878), p. 198; DCR 69 (Tabreez, 1885-86), p. 3; DCR 231 (Tabreez, 1886-87), p. 4; DCR 445 (Tabreez, 1887-88), p. 7; DCR 611 (Tabreez, 1888-89), p. 2; DCR 798 (Tabreez, 1889-90), p. 6; DCR 1440 (Azerbaijan, 1893-94), p. 3; DCR 1569 (Azerbaijan, 1894-95), p. 2; DCR 1968 (Azerbaijan, 1896-97), p. 2; DCR 2291 (Azerbaijan, 1898-99), p. 4; DCR 2685 (Azerbaijan, 1900-01), p. 4-7; DCR 3308 (Azerbaijan, 1902-04), p. 4; DCR 3507 (Azerbaijan, 1904-05), p. 4; DCR 3736 (Azerbaijan, 1905-06), p. 4.

* indicates that the total does not include Russian imports.

The data shows that the import of textiles was the most important branch of commercial activity. In fact, cottons dominated imports and, in value, were higher than all other goods imported into Tabriz together.⁹⁸ From the mid-1840s to mid-1850s, 70 percent of all goods imported via Trabzon were cottons, mostly English (80 percent), Swiss (15 percent), and German (5 percent).⁹⁹ Russia also exported some cottons, but such were of marginal importance in value terms. Switzerland and Germany only exported dyed and printed stuffs. British imports consisted of 65 percent dyed (long cloths, madapolams, muslins) and 35 percent plain cottons.¹⁰⁰ The latter were transformed in Iran for re-export to Russia, which represented about 10 percent of the imported volume.¹⁰¹ Textiles remained the single most important group of imported goods, even though the textiles’ share of Tabriz's total imports dropped from 74 to 32 percent (see Table 5).¹⁰² Other imports were mostly haberdasheries, glass and glassware, sugar, matches, metals, petroleum, tea, drugs, and sundries, whose volume changed over time.

In 1850, Abbott estimated that 90 percent of cotton imports were of British origin, certainly in northern and central Iran, and, as total imports were concerned, Great Britain was the main importer, comprising about 80 percent of total imports.¹⁰³ Blau, a contemporary Austrian government official, pointed out that Russia exported very few cottons (from Erevan and Tiflis), and what it did export was of inferior quality to those from West Europe. Therefore, only lower classes in the areas adjacent to the Russian border bought them.¹⁰⁴ Until the 1880s, Manchester cottons faced no serious competition from their Russian counterparts, despite the fact that, already since 1848, it had been noted that British cottons left much to be desired in terms of suitability and quality, especially over time. However, the existing network of commercial, financial, and transportation incentives proved an effective facilitator for the oft-well-connected, large West-European firms.¹⁰⁵ Also, despite Russia's proximity, its system of communications was underdeveloped and well-capitalized Russian merchants were absent from the Iranian market. Furthermore, Russian products, although cheap, were also of inferior quality.¹⁰⁶ By 1890, however, Russia changed its foreign trade policy and began an all-out attack on its competitors, whether Iranian or foreign. As a result, the British monopolistic market position came under severe attack all over the north. The Russians marketed colored goods only; all the plain ones remained British or Indian. In Tabriz in the 1890s, there was a steady demand for prints, which were imported via Trabzon, Khoy, or Baghdad.¹⁰⁷ In 1895, Harris reported: “the duties on goods crossing Russian territory being so exorbitant, all the trade of Northern Persia, with the exception of a very small quantity of Russian manufactured goods, arrives in the country by caravan from Trebizond.” By 1904, however, this was no longer true. British cottons, which only 20 years prior had monopolized the Tabriz market, lost the war against Russian imports. Russia held 65 percent and Britain only 19 percent of the market, the remainder being taken care of by other countries (France, Italy, Germany), whose market share had also been increasing in the preceding decade.¹⁰⁸

Table 6: Tabriz's Total Imports and Exports in £ (1837–1905)

Source: Gödel 1849, p. 64; AP 30 (1861) LXIII, p. 60 (*= +£400,000 smuggled); AP 30-31 (1864) LXI, p. 200; AP 25-26 (1865)m LIV-V, p. 268; AP 29 (1867-68) LXVIII, pp. 60-62; AP 29 (1867-68) LXVIII, pp. 501-02; AP 29 (1871) LXV, pp. 237-38; AP 30 (1871) LXVI, p. 960; AP 23 (1872) LXVIII, pp. 1189; AP 34 (1875) LXXV, pp. 204-05; AP 30 (1878) LXXV, p. 1698; DCR 69 (1886), p. 3 (*£60,000 waste silk); DCR 241 (1886-87), pp. 4-5; DCR 445 (1887-88), pp. 6-7; DCR 611 (1888-89), pp. 2-3; DCR 798 (1890-91), pp. 6-7; DCR 1440 (1894), pp. 2-3; DCR 1569 (1895), pp. 2-3; DCR 1968 (1896-97), pp. 2-4; DCR 2291 (1898-99), pp. 3-5; DCR 2685 (1899-1900), pp. 14-16; DCR 3308 (1902-04), pp. 4, 9; DCR 3507 (1904-05), pp. 3, 6, 7; DCR 3736 (1905-06), pp. 4-5, 8.

For exports from Iran, the situation was different. Russia had always held the position of the most important importer of Iranian goods and a negative trade balance with Iran. The same was true for Tabriz, where Russia was the most important country as far as exports from Tabriz were concerned. Great Britain held the second position, i.e., 10 to 12 percent of export trade with Tabriz, “while France, Austria, Hungary, and Germany bring up the rear.”¹⁰⁹ Until 1868, the major export commodity had been raw silk, but, due to the silk disease in Gilan, its share fell from 30 percent in 1865 to 7.7 percent in 1873 to 0.02 percent in 1898 (see Table 5). It was only in 1875 that carpets picked up some of the slack, and their share of exports increased as of the 1880s. Other export goods consisted of cotton, dried fruit, almonds, tobacco, silken stuff, shawls, rice, spices, furs, and sundries. After 1870, for the reasons mentioned above, Tabriz's foreign trade suffered a decline. This was particularly significant in 1893–94, when imports fell by £441,500 and exports by £189,834. This was due to the fact that Tehran was more cheaply supplied with Russian goods via the Caspian, caravan hire was cheaper in the south than through Ottoman territory, and the low exchange of silver, which fell 30 percent in a single year (1893–1894).¹¹⁰

Whereas imports started to rise again as of the mid-1890s, almost doubling after 1900, exports remained depressed until 1900, when they also doubled. As of 1904, exports even tripled in value compared with the 1890s (see Table 5).

Table 7: Destinations and Total of Export from Tabriz 1833–52 (in assignation rubles)¹¹²

Tabriz Market Downsized

After 1870, Tabriz lost its place as the main entrepôt for European goods headed for northern Iran. From 1866, a number of external disasters beyond the city's control caused this decline. These factors included the opening of the Suez Canal and the failure of the silk crop in Gilan due to the spreading silk worm disease, which reduced the province's purchasing power significantly. This disaster was followed by the general famine of 1871–73, which caused the death of thousands of humans and animals and resulted in reduced demand for imports and higher transportation costs due to lack of transport animals and high cost of fodder. These problems had barely run their course when the Russian-Turkish war of 1877 made the transportation of goods via Poti or Trabzon impossible, as both armies commandeered pack animals to ensure a steady supply of goods.

The rates of transport between Trebizond and Persia rose to 1,250 pias. per Kantar-Turkish, against 500 pias., at which they stood before the declaration of war; and muleteers were scarce, as they were engaged by the belligerents to convey stores for their respective armies.¹¹¹

Trade via this route was made even less attractive by the discouraging transit of European goods via the Caucasus.¹¹³ In 1846, the Caucasus transit trade had been re-opened to European goods, even liberalized in 1856, but when Russia decided to extend its commercial influence over northern Iran in 1877, transit trade was made difficult. It demanded “payment of deposits equal to the amount of customs that would have to be paid on imports to Russia; these were repaid when passage of the goods into Persia was verified by customs.” In 1883, transit trade was abolished; as a result, Russian exports increased and, by 1885, transit goods had all but disappeared.¹¹⁴ Therefore, major importers were forced to import goods via Baghdad and Kermanshah, which added to the cost and time required.¹¹⁵ Ending the transit of European goods through Russia meant that Gilan and Khorasan were directly supplied with Russian goods via Rasht and Astarabad, and via Ashqabad after 1882. The role of the Trabzon-Tabriz route was taken over by the Bushehr-Isfahan and Baghdad-Kermanshah-Hamadan routes, even though the latter meant greater expense and time. The diversion of trade from Tabriz to the southern route was not only due to the virtual ban on the transit of foreign goods through Russia, but, above all, due to the cheaper transportation costs from Europe to the Persian Gulf.¹¹⁷ Bushehr became another important point of entry around 1870; up to that time, textiles reached central Iran via Tabriz and Tehran. Bushehr mainly supplied the needs of Fars and central Iran. In 1873, the import of piece goods at Bushehr was estimated at 17½ lakhs of rupees. The Bushehr route had become more important than Trabzon-Tabriz, and goods that had formerly reached central Iran via Tabriz were now served by Bushehr (see Fig. 1).¹¹⁸

Figure 1: Various Routes and Distances, in Days Marching, by which Merchandise arrives in Persia¹¹⁶

It is interesting to note, in this vein, that merchants based their choice of trade route not merely on transport cost considerations. In the mid-1860s, for example, sugar, which had been carried through Trabzon-Erzerum for decades, was also being imported via Poti-Tiflis. This route was “favored by merchants, since Turkey abandoned again its plan for a carriage road from the Black Sea.”¹¹⁹ However, this trend did not last long, even after the Poti-Tiflis railway was finished and provided cheaper transport than via Turkey. Despite this cost advantage, trade did not move to Poti due to

the neglect and incompetence of the Russian transit agents entail a delay and loss to the Persian importers, more than sufficient to counterbalance the charge of one per cent. levied by the Turkish Government on all goods passing through its territory.¹²⁰

Of course, Russian trade used this route once the railway line from Tiflis to Jolfa had been extended. Also, while this route was faster and cheaper, the Russian tariff on competitive products was prohibitive. As a result, much of the transit trade––in particular of non-competitive goods, such as raisins and almonds––moved to the new railroad between Batum-Poti and Tiflis. This situation did not change in the following years, even though the Trabzon-Erzerum road had been macadamized and in reasonable condition in 1870.¹²¹ In 1897, according to the US consul in Trabzon, transport costs were $3.30 to $9 per 300 lbs. depending on the availability of camels. For camel owners, there was no insurance available against robbery. The Persian drivers only received $2.20 per trip and travel time was 35 days. The custom rates between Trabzon and the Persian border were $0.09 per bale in Trabzon and $0.13 per bale at Erzerum. An agent could be hired at $0.35 per bale to take care of the payment and handling of customs rates.¹²²

The British commercial commissioner, McLean, did a market analysis of the Persian market in 1903, which was more pessimistic than the American consul. He wrote in his report:

The construction of the Batoum-Baku Railway and the Akstafa-Julfa road opened to Odessa and Black Sea ports a trade route to Azerbaijan superior in time and cost of transport to the Trebizond route, from which European merchandise for Persia was quickly diverted to it; but this door was soon barred to imports not of Russian origin.*¹²³ The superiority of this route increases as the railway from Tiflis, now open to Erivan, extends to the frontier at Julfa, which it is expected to reach within two years. All these measures of improved communication have been justified by the development of the Russian territories which they have penetrated and benefited but they have equally served to facilitate both import and export trade with Persia. The merchandise which can be most quickly supplied to a depleted market reaps the best profit. There is also a saving of interest and a more rapid turn-over of capital when goods take a shorter time in transit. The improvement in communications with Russia has materially reduced the time occupied in transport, and Russian merchandise now arrives in the markets of northern Persia perhaps three months or less from date of order, whilst our goods can seldom reach the same destinations within five or even six months of order. … The most important exports to Russia are fruits, cotton and rice, representing a million sterling annually.¹²⁴

MacLean's pessimistic expectations did not materialize, as Tabriz-Erzerum-Trabzon trade increased during 1903–07 due to troubled conditions in Russia and the Caucasus. However, these gains were lost due to unrest in Azerbaijan after 1907. Nevertheless, by 1911, the British consul in Trabzon hoped that trade would pick up again on this route after the return to normal conditions in Azerbaijan.¹²⁵

Although the Trabzon-Tabriz route had lost its comparative advantage––i.e., lower transportation costs––the Iranian government did nothing to correct this situation. In 1886, the British consul in Tabriz, worried about the fall in trade in general and British goods in particular, wrote:

The diversion into other channels of merchandise formerly sent from Trebizond to this province, several districts formerly provided with goods through the Black Sea route now receiving them by the Persian Gulf; and lastly, the total absence of carriageable roads. Improved means of communication can only infuse vitality into this torpid mass, and by helping to balance the imports correct the pecuniary deficiency referred to above. The urgent necessity of the Persian Government constructing a road from this town to meet with one which is being carried from Erzeroum to Bayazid has been repeatedly pointed out; but it will be too late to do this after Russia, by the construction of a route from the Caspian littoral to Ardebil, has monopolized the trade with the north of Persia, and dealt a final death-blow to the commercial transit between Tabreez and the Trebizond seaboard.¹²⁶

The same complaint was voiced regarding the Ottoman government's lack of interest in road improvement. In particular, British observers pushed for the extension of the trunk railway in Asia Minor to Erzerum, “where it would be joined by a branch line from Rizeh or Trebizond.”¹²⁷ Such an extension would also enable the export of crops from high inland plateau Armenia that “so often [were] left to rot for lack of cheap transport.”¹²⁸

There were also other trade routes used to import textiles into Azerbaijan. Khoy was one, although it never threatened the role of Tabriz and remained an alternative importing station of mostly regional (western Azerbaijan) importance. Khoy's role is not surprising when one considers that it was a halting station between Trabzon and Tabriz and the natural outlet for northwest Azerbaijan. Customs duties had to be paid at Khoy, but more often at Tabriz.¹²⁹ In 1865, for example, there was an additional import of textiles via Khoy, Salmas, Ormiyeh, Oshnu, and Sowj Bulagh, which were sold across the Aras River in Caucasian markets. There seems to have been 6,815 packages, as compared to 37,652 packages in Tabriz, or about 15 percent of the total of 44,467 packages for northern Iran.¹³⁰ The Baghdad-Kermanshah trade route acquired some importance after the mid-1880s, with Hamadan as the main distribution center supplying central Iran.¹³¹ By 1900, in fact, Kermanshah––via Hamadan––also supplied Khorasan, Kurdistan, Tabriz, Garrus, Tehran, Ardabil, Qom, Kashan, Zenjan, and Isfahan.¹³² Towards the end of the nineteenth century, Bandar `Abbas acquired some importance as a conduit for textiles forwarded to Kerman, Mashhad, and Isfahan. This forwarding role was reduced when the export of British textiles to Russia came to an end. Russian woolens were only imported via Enzeli and destined for Tehran.¹³³ Meanwhile, the southern route remained cheaper. In 1894, the British consul in Tabriz reported:

The rates of transport on the Bushire route are also considerably cheaper than those of Trebizond-Erzeroom, where for the last year [1892–93] they have ruled at 3½ l., per kantar (500 lbs. weight) as against half the amount merchants were accustomed to pay.¹³⁴

Merchants of Tabriz

Trade in Tabriz was ruled by a range of external factors: the arrival of trade caravans, festivals, and, for some time, the annual presence of Fath Ali Shah's camp at Ujan, near Soltaniyeh. Tabriz's trading season lasted from September until March 20 (Nowruz). In the run up to Nowruz, goods had their best sales due to the Iranian custom of buying new clothes for themselves, family members, and servants for the New Year.¹³⁵ Furthermore, after Nowruz, it was necessary to arrive in Soltaniyeh in June––a ten-day journey by caravan––because Fath `Ali Shah and his court would be there. However, this annual custom ended with this shah, as his successors opted for other summer locations.¹³⁶ From April to August, there was hardly any trade in Tabriz at all. During this period, of the twenty-five to thirty types of chintzes sold in Tabriz, only muslins of one or two colors turned a profit. There would also be new life injected into the market when the hajjis returned from Mecca in July. These were mostly merchants, who bought chintzes and cloth before moving on to their final destination. After they left, the market would be dead for another two months.¹³⁷

Also, very important until around 1832, there were hardly any sales on credit. In fact,

This is the only town in Persia where goods are sold for cash, because there is no barter trade; at Tabriz, on the contrary the principal transactions are by barter. Expensive good such as gold-silver cloth are sold by cash.¹³⁸

However, this changed after 1832. Whereas “formerly sales were to Iranian merchants in Constantinople for cash, but now, gradually, 6 months credit is allowed.”¹³⁹ Ten years later, it was reported that credit periods were granted for eight to twelve months rather than the usual three to seven months.¹⁴⁰

In 1825, Armenian merchants were involved in foreign trade, importing broadcloth and silks from the Leipzig Fair.¹⁴¹ There were also at least three British merchants based in Odessa who participated in this trade.¹⁴² This so-called Tiflis trade was controlled by a small number of Tiflis's main merchants (“Armenians, Grusians, Persians”), collectively referred to as Persians in German sources, who collected orders from smaller merchants, bought goods at the Leipzig Eastern Fair, and then shipped them to Tabriz, all on behalf and at the risk of the smaller merchants. In 1835, there were fifteen such merchants, and eleven in 1836.¹⁴³ However, it would seem that these merchants’ role became insignificant by 1847, as the Leipzig Fair's “Oriental trade” was reportedly in the hands of Austrian Jewish merchants by that time.¹⁴⁴ The majority of merchants were Caucasian Armenians from Georgia and Qarabagh. Berezin estimated that there were 300–500 Russian subjects in Tabriz, forming the city's largest foreign community. Most of these merchants were small traders.¹⁴⁵ The number of Caucasian Russians subject was much higher than 500; ignoring Russian rules of compulsory registration, they came anyway and by 1850, their total number in Iran was estimated at 2,000 to 2,200.¹⁴⁶

There were also Iranian (Moslem and Armenian) merchants who traveled from Tabriz to Istanbul with silver to buy indiennes and cloth. They traded on their own account and for thirty to forty smaller or larger merchants in Tabriz on a commission basis. For them, transportation costs were lower than for Europeans. They never insured the goods, the packing was cheaper, and on arrival they just dumped the goods at the owner's doorstep. They only paid two rials per bale in road duties (rahdarlik) at Khoy.¹⁴⁷ These Tabriz wholesale merchants had been opposed to direct trade between Great Britain and Trabzon, because such would hurt their interests in Istanbul. In 1830, Burgess had therefore been forced to sell his goods to the higher class of people, as Tabriz merchants were uninterested in trading with him. However, Iranian merchants outside Tabriz did not have this problem, encouraging Burgess and others to continue direct trade.¹⁴⁸ There also were merchants of the Dilmanli and Lak tribes who packed the goods themselves, made economies wherever they could en route, and sold their goods immediately upon arrival, allegedly at only one percent profit, and then returned to Istanbul to buy more. If they were unable to sell their goods in Tabriz, they moved on to Tehran, Qazvin, Rasht, Isfahan, and other towns. Such merchants were a thorn in the side of Tabrizi merchants, undercutting their plans to control trade with Istanbul.¹⁴⁹ British goods had swept away all competition.

There were also many traveling peddlers, both for commercial purposes and those making pilgrimage to Mecca or Karbala: Iranian Moslems and Armenians, as well as Turkmen from Bokhara and Khiva. To pay for their travel, they would invest in Iranian goods such as arms, lacquer work, khatam, shawls, carpets, and silks. They traded while traveling, selling part of their goods in Erzerum or Trabzon, selling most in Istanbul, and selling the remainder in Alexandria and Smyrna. In return, they bought European goods, which they sold while traveling across the country. The total value of their goods amounted to several thousand piasters, but it was the sheer number of these people, rather than the volume of their trade, that was significant. There were also wealthy merchants who regularly traveled to Europe, including Armenians from Tabriz, Erevan, and Tiflis. They mostly exported shawls, pearls, and precious stones and took European goods in return. Most did business in Istanbul but also attended fairs in Vienna, Leipzig, Moscow, and Lyon and Manchester (as of the 1840s) to make purchases. Prior to the development of trade relations between Istanbul and Tabriz, all trade was in hands of Armenians, who still dominated the fabrics, glass, glassware, and haberdashery trades. Trabzon was the main transit place for trade to and from Iran, where all commercial houses in Istanbul and Tabriz had an agent forwarding their goods.¹⁵⁰ In short, there were a few big and many small Iranian merchants, but even the principal merchants of Tabriz did not have capital over 1,500 silver rubles; indeed, there were only five people in Tabriz with that much capital. Thus, credit was the lifeline of Iranian traders: without credit, trade could not function.¹⁵¹

This situation changed in 1837, when European merchants––notably, Ralli and Angelasto––established themselves in Tabriz. This move was likely the result of realizing that having a presence in Tabriz would be more profitable. As Smith and Dwight wrote in 1833:

A mercantile firm that shall extend its branches no farther east than Trebizond or Erzeroom, can expect nothing in the Persian trade. For the merchants of that country will never stop at a small magazine in either of those places, so long as a little more time, which they know not how top value, and the distance of a few hundred miles, which it costs them almost nothing to travel, will bring them to the extensive depots of Constantinople, which have so long furnished them with goods to the amount of many hundred thousand tomans annually.¹⁵²

Berezin wrote that Ralli came to Tabriz at a time when many Iranian merchants had overextended themselves, buying too many fabrics on credit for which there was no demand. As a result, many––as well as a few of their suppliers in Istanbul––went bankrupt. Moreover, their reputation had suffered, meaning that their credit rating in Istanbul dropped precipitously, even more so because there had also been intentional bankruptcies. At first, the principal merchants (binakdaran) of Tabriz forbade smaller traders from doing business with Ralli.¹⁵³ However, after a few months, the well-capitalized Ralli & Angelasto firm, which was under Russian protection, was able to change this hostility by extending credit to Iranian traders, while everyone else would only do business with Iranians for cash. With help of the Russian consul, Ralli's presence was embraced and trade in British goods in particular, the only ones Ralli had in stock, took off.¹⁵⁴ Thereafter, very few merchants in Tabriz ordered Russian chintzes anymore (see Table 7).¹⁵⁵ British goods had swept away all competition.

Table 8: Imports into Tabriz by origin 1833–41 (in assignation rubles)¹⁶²

In the 1850s, according to Blau, the Ralli firm controlled one-third of the trade in cottons and exported more than half of Gilan's raw silk crop. Other European firms and Russian wholesalers were also engaged in both import and export.¹⁵⁶ Although British imports dominated Tabriz's trade, there were only two British merchants in the city after 1830, Charles Burgess and Richard Bonham, the latter of whom was also a British consul.¹⁵⁷ Richard White Stevens, a former employee of Brandt in Trabzon and successor to Bonham as consul in 1844, promoted British trade in Tabriz through his consular status. To that end, he not only engaged in trade himself, but also accorded British protection to twenty local merchants. Furthermore, and likely imitating Ralli, Stevens arranged for large sums of credit for merchants in Tabriz to facilitate the import of British cottons.¹⁵⁸ Foreign consuls in Tabriz not only promoted their countries’ trade, but also extended their political influence to protect “their” merchants, sometimes even in cases of fraudulent behavior. For example, Georgian Armenians made much money through and were indeed well protected by the Russian consul in Tabriz. When one complained that an Iranian debtor was trying to defraud him, the consul immediately ordered the latter's property sequestered,

without referring at all to the Persian authorities. A “kavass,” or messenger, was immediately sent to the debtor's shop, the door was closed, the Russian seal put upon it, which even the Ameer, or Governor of Tabreez himself could not pull down; the claims of the Russian subject were then seized for, and the other creditors might help themselves to any thing that remained.¹⁵⁹

In reality, it was less easy to be reimbursed for one's losses, as cases of conflicts between foreigners and Iranians had to be heard by a special mixed court.¹⁶⁰

The increase in Tabriz's foreign trade was also evident from the growth in the number and importance of European commercial firms in Istanbul with agents in Tabriz. The same held for Moslem and Armenian merchants in Tabriz with agents in Istanbul, indicating that much of the trade with Europe was indirect in most cases.¹⁶¹ In the 1840s in Istanbul, the following European firms were trading with Iran: T. Ralli and Comp.; G. Stefanovich, Ionides and Comp.; E. Manuelovich and Radocanachi; Ralli and Mavrojani; C. Novico; N. Negroponti; P. Mavrocordato; and Fill. Jenidunia. Of these, the first three had direct contacts with Iran and branch offices in Tabriz, while the others only engaged in indirect trade by warehousing the goods bought by traveling merchants going to Iran and beyond. In Trabzon, the major transport companies were: T. Gerst; Charnaud Marcopoly and Comp; Calimachi; Hafez Agha; Sayyed Morteza; and Rahim Agha. In Erzerum, the major transporters included: F. Garibaldi; R. W. Calvert; Haji Hoseyn; Haji Ali Rahim; and Molla Hasan. In Tabriz, under Russian protection, there were: the Greek firms Ralli and Angelasto, a branch of T. Ralli in Istanbul; Stravachi Calduvachi and Comp., a branch of G. Stefanovich; and L. C. Sgutta and Comp., a branch of Ionides and Comp. There also was one Austrian firm: F. A. Gelalenz. The most important Russian subjects from Armenia and Georgia involved in the Tabriz trade were: Gabaret Shancusadoff, Agob Hadschiadanckoff, Marduros Hancucoff, Th. Masuneoff, and G. Gulioff. Armenians merchants from Erzerum included: Artin Hadschiadunian, Kasar Artin, and Gabaret. Iranian wholesalers who traded directly with Istanbul included: Hajj Mir Mohammad Hoseyn, Hajj Sayyed Hoseyn, and Hajj Rasul Damad. In Tehran, Russian Armenian merchants trading with Tabriz were: G. Manikonoff; Gabarat Sarafoglu; and A. Kusinoff. There was also one Austrian merchant, A. Töpfner, who was under Russian protection. While these were the most important merchants, there were also many smaller Iranian merchants who bought goods from Tabriz.¹⁶³ In 1859, there was one French, one Swiss, and five Greek commercial firms; of the latter, one was under British protection, two under Russian, and two under Turkish. They almost exclusively imported British manufactures from Manchester and exported raw silk.¹⁶⁴ In 1863, of the three Greek firms under British protection, only two remained.¹⁶⁵ Three years later, of the two Greek firms, only one remained; but in 1871, there were three Greek firms active in Tabriz again.¹⁶⁶

The Ralli firm grew in size and importance over the years, such that Abbott reported in 1865: “there are no very wealthy native participating in it [trade] and none can pretend to compete with the great Foreign House [Ralli].” Due to Ralli's position, it could ruin any Iranian trader. Indeed, after Ralli warned Iranian merchants not to engage in the textile trade, and they refused, he sold cottons below market price, at a loss, and ruined many of them. As a result, the bazaar closed down, meetings were held at the homes of merchants and religious leaders, and an appeal was made against Ralli to the governor. The local merchant community had enough clout to stop Ralli from recovering certain sums (notably from Nazem al-Tojjar) and force it to take back goods the firm had just sold on April 18, 1864.¹⁶⁷ This spot of trouble may have had a temporary impact on Ralli's expansion plans, for in 1865, Iranian merchants imported some forty percent and European merchants some sixty percent of textiles into Tabriz.¹⁶⁸ By 1870, however, the textile trade was almost completely monopolized by three Greek firms.¹⁶⁹

In 1865, there were some eighty small traders, all Russian subjects from the Caucasus, residing in Tabriz, but not a single “considerable merchant of Russia in this or any part of Persia,” which greatly impeded an increase in Russian trade.¹⁷⁰ Russian traders were “Georgians, Armenians, and the natives of Bakou and Dagestan who are seldom Stationary in any part of the Coast.”¹⁷¹ In 1870, five Russian firms operated in Tabriz trading directly with Great Britain, France, Austria, and Turkey.¹⁷² However, it is unclear whether they were newcomers or belonged to the group of small traders mentioned earlier. It is noteworthy that, in the 1860s, there were also no British merchants in Tabriz, although there were European merchants and an effective sales network that worked as a substitute.¹⁷³ In the 1880s, the Manchester firm of Ziegler––under British protection––set up looms in Tabriz and elsewhere in Iran (notably in Soltananad/Arak), which marked the rebirth of the carpet trade.¹⁷⁴ At that time, there were about nine major Iranian merchants and five foreign ones active in Tabriz.¹⁷⁵

The above-mentioned Greek and Iranian firms dealt almost exclusively in cottons. Armenians and Austrians, on the other hand, mainly dealt in cloths, silk and woolen shawl stuffs, glassware, hardware, and fashion accessories. In Istanbul, past sales had only been settled with cash, but now credit was increasingly used.¹⁷⁶

These cotton goods are not often sold for cash by the native merchants, but generally exchanged for Resht products, such as frisons [raw silk refuse or las] and rice. The Tabreez merchants who deal in this manner send the silk to Tabreez, where native factories exist, the frisons [refuse raw silk] to Constantinople, and the rice to Tabreez for local consumption.¹⁷⁷

The wool trade in Tabriz was carried on by some Armenians, likely Iranian subjects, as MacLean reported in 1903 that the wool trade was in the hands of Iranian merchants.¹⁷⁸

The description of how trade between Trabzon and Tabriz was organized in 1892 also reflects how the same trade was carried on in the preceding decades.¹⁷⁹

Most of the importers of Tabreez have correspondents residing at Constantinople, who look after the purchase and transmission of European merchandise for them.

The goods are sent direct to a commission agent at Trebizond. On arrival of the consignment at that place it is opened by the custom-house officials, who, after verification of the contents, deliver of ‘teskeré’ indicating their nature and value.

The commission agent then gives a guarantee that the said goods are destined for Persia, and engages at the same time to produce proof, after a reasonable delay, of their having passed over the Turkish frontier, for, on the non-production of such evidence, the goods are considered as having remained and been sold in contraband in Turkey, and in this case the commission agent is called upon to pay a double duty, amounting to 16 per cent.

The goods are then sealed and forwarded to Erzeroum, where the seals are examined and certificates given according to the exigencies of the case. Caravan drivers then take possession of them, accompanied by lusts.

In practice, of course, matters do not proceed so smoothly as the above would make it appear, for, during mid-winter, snows and storms interfere with the transport traffic, and merchandise often accumulates at such a rate at the Trebizond custom-house that on the re-opening of the roads, or rather tracks, it often happens that there are not sufficient beasts of burden for the purposes required of them, whence delay, much increased cost of transport, and consequent losses are entailed upon importers beyond the usual deficiencies by robbery or the negligence of the drivers.¹⁸⁰

Because of economic depression and political oppression in the 1890s,

Many native merchants of some standing, owing to [political and economic problems] and other circumstances, have retired either to Russia or Kerbela, and one of the foremost British firms, for many years importers of Bradford goods, have dropped importation, and have taken, to their greater profit and general comfort, to the banking business with branches in Persia and abroad.¹⁸¹

Business would look up again after 1900. Although Russia at that time, not Great Britain, dominated trade in Tabriz, there were still two foreign firms active in the city, specializing in the export of rugs. Moreover, around 1907, a German and Austrian firm began trading in Tabriz, thus indicating that commercial benefits also existed for non-Russian businesses.¹⁸² The list of foreign and Iranian firms active in Tabriz in 1910 shows that this was not a fluke; Tabriz was still an important commercial hub.¹⁸³ Trade with Iran was also very important for Erzerum and Trabzon, of course. In 1898, Lynch reported that, according to the Persian consul, 30,000–40,000 camels came to Erzerum per year, and their owners spent some £81,000 per year on provisions and sundries in Erzerum.¹⁸⁴ A decade later, however, the situation had changed for the worse. In the first quarter of 1910, Trabzon only received 3,674 pieces of cargo for Iran, 3,175 of which were from abroad. From Iran arrived a mere 200 bales of carpets, indicating that trade via this route had dropped significantly, almost coming to a standstill. This appears to have been due mainly to the bad financial situation of Iranian merchants, who had been unable to pay off their debts and thus could not get credit. This situation was peculiar to Tabriz, because Iran's overall foreign trade had continued to grow.¹⁸⁵

From Backwater to Major Hub

Along with the growth in trade, the city of Tabriz and its population also grew. In 1800, Tabriz had a population of some 40,000, but by 1848, it had 150,000 inhabitants, 18 large and several small caravanserais, and many well-supplied bazaars, mostly newly built. Gödel called it “Persia's most important trading center.”¹⁸⁶ However, other sources estimated the number of inhabitants in 1850 at 100,000, and it is only in 1890 that 170,000 to 200,000 inhabitants is listed.¹⁸⁷ The population in 1848 may indeed have been overestimated, as British Consul Abbott estimated the population to be 150,000 in 1864: in size it was “probably more superior to Isfahan” and “considerably larger than Tehran.” At that time, both the city and its trade had increased considerably since 1830. In fact, trade with Europe was estimated to have increased eight-fold.¹⁸⁸ Although the city had grown in size, it still displayed the features developed sixty years prior. Tabriz was still a walled city with a circumference of about 3.5 miles with extensive suburbs. By the 1860s, its walls and moat were dilapidated and full of breaches.¹⁸⁹ Its bazaars were extensive and well-supplied but meanly constructed. There were 3,100 shops of all kinds, 309 caravanserais for merchants and traders, and 40 others for muleteers. The city was the commercial center of Iran and “the mart from which nearly all the Northern and Midland Countries are supplied” with European goods, mainly by land from the Black Sea. In the 1860s, these imports via Trabzon were estimated at £1,750,000 per year via 87,000 packages of half-mule loads, 75 percent of which were British goods.¹⁹⁰ In 1888, the city was said to have about 200,000 inhabitants, of which no more than 4,000 Georgian Armenians.¹⁹¹

Even though after 1870 Tabriz lost its place as the foremost entrepôt of Iran, the city was not diminished in size, population, or commercial importance. In 1895, its population was estimated at about 200,000 and it was once again considered Iran's most important commercial center.¹⁹² However, due to the revolution of 1906 and the uprising of 1908, Tabriz's trade was greatly depressed. Many of its shops and houses were plundered and burnt; trade was at standstill for many months. Losses were estimated at $8,000,000. Many merchants lost much money and credit was not good.¹⁹³ Russian trade mainly came via Jolfa, and less so via Astara, while all non-Russian goods were brought via the Trabzon route, which remained the main trade artery of Tabriz for as long transit of such goods through Russia was banned.¹⁹⁴ In fact, in 1907, according to American Consul Jewett in Trabzon, “About 30 per cent of the commerce of Trebizond is credited to the imports and exports of Persia.”¹⁹⁶ Although Tehran had become the center of financial transactions and the money market, Tabriz still remained the real commercial center of Iran in 1910,¹⁹⁷ but not for long. After WWI this role was taken over by Kermanshah, and later by Bushehr (see Table 9).¹⁹⁸

Table 9: Import and Export by Major Customhouses (1920/21–1923/24) in qrans¹⁹⁵

*no data from Resht due to revolutionary activities.