Silver in Iran’s Early Modern State-building


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XIV International Economic History Congress, Helsinki 2006

Session 106

Silver in Iran’s Early Modern State-building

Ina Baghdiantz McCabe

Tufts University, Boston, USA

e-mail:

Persia is like a vast caravansarai which has but two doors, one is on the side of

Turkey through which silver from the the West come in, they are piastres which

come from the New World to Spain, go to France through Brittany, cross through

France to Marseilles, where they leave for Turkey; then they come here where they

are melted and made into abasis which is money equivalent to a teston or a quarter

of an écu. Some take their piastres all the way to India, there those Blacks don’t

rely on a touching stone, they brake them in half, if they are good they take them.

If not they give you back the coins…the Bagnans will sooner discover a fake

abassi among a thousand than a dog would chase a partridge in an open field,

since they are able sarraf and money testers. The other door is Bender Abassi or

Kommoron, on the Sinus Persicus, to go Surrat in the Indies, where all the money

in the Universe is unloaded as if into an abyss as it does not come out since it is

used for merchandise, you gain over Persia 5 or 6 per 100.1

As Sanjay Subrahmanyam and Muzzafar Alam have pointed out Shah Abbas’

reign(r.1587-1629) is given great importance in Safavid historiography, far surpassing even the

famous Mughal Emperor Akbar in Mughal historiography or Sultan Suleyman in the Ottoman

case.


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  Many transformations occurred during his rule that justify his lion’s share in Iran’s history,

but economic changes and the new European presence due to the international silk trade partly

explain Abbas’ visibility. Yet this visibility has been a political one and the economic aspects of his

reign are slowly being noticed. There is a body of literature on Safavid economic history, but those

writing it would be the first to admit, my self included, that it is a very incomplete picture and that

much remains to be done to highlight the sophistication of Iran’s economic position or its domestic

economy, be it under the rule of its best known monarch. The sophisticated studies that exist for

the Ottoman Empire and Mughal India are scarse.  This paper has no pretension to offer a remedy,

only to uncover a  part of the picture on the  role played by silver in Iran’s state-building.



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It is not only because of European observers that the first third of the seventeenth century,

Abbas’ reign  has drawn so much attention,  in fact most European observers like Rapahël du

Mans, who is quoted above wrote much later.  Abbas’ initiatives and those of his entourage

brought major transformations that are worthy of such attention and scrutiny.  A new capital with

splendid architectural buildings, the reform of the army, the flourishing of the arts all depended on

a new economic prosperity achieved under his reign.  This demanded cash, which agricultural

revenue did not bring. A new flow of imported silver bullion reached Iran under Shah Abbas

because of Iran’s silk trade with Europe via the Ottoman markets.

3

The usual prejudice that Iran’s



society remained entirely pre-capitalist runs through much of the scholarship  produced on Safavid

Iran’s.


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  Accepted views such as the one expressed by the Capuchin Raphaël du Mans’ that

Safavid Iran was simply a corridor for trade have cemented opinions that Iran was not a monetized

society and that silver flowed directly like a river to India, for a profit of around 5 percent.  Silver

in Iran’s state-building has been eclipsed by studies on foreign trade. The silver trade to India was

certainly crucial, India was Iran’s main trading partner, there is no question about it, but I have

strived to show, that in addition to foreign trade, silver played a role in the domestic realm, that it

was crucial to Iran’s political economy and state building.  Because of this influx of silver bullion

the first part of the seventeenth century was a uniquely prosperous and significant moment in

Iran’s early state building.

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Only less than a handful of people study the economy of Safavid Iran, there is no



equivalent for the Aligarh school, ior any other any other school for that matter, which has

successfully argued against similar notions of stagnation for the subcontinent, led by Irfan Habib’s

ideas a good number of scholars have shown  that India was monetized as early as the sixteenth

century.  Indeed  a whole school would be needed to argue effectively against seventeenth century

Iran being a stagnant and pre-capitalist state, but as a beginning  in several pieces of work I have

strived to do so, by concentrating on the Armenians in Safavid Iran.   Because the Christian

i

 See for student for this school The making of history : essays presented to Irfan Habib.  edited by K.N.



Panikkar, Terence J. Byres, Utsa Patnaik. London : Anthem Press, 2002.

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Armenians were the main importers of silver into Iran,

6

 and some Muslim Armenians both played a



crucial role in the economic administration of Iran.  Some of these Muslim Armenians were

ghulams or slaves of the shah

7

.  One finds both Mulim Armenians and ghulam Muslim Armenians



in the mints and together with their Christian counterparts were crucial to Iran early state buidling

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.



Today’s views on merchant diasporas and ethnic minorities and the projecting  back  of history

with the models of thought national histories have imposed have played no small part in some

resistance in accepting the major political role played by this group.  Another issue has also been

an avowed resistance among some scholars of Iran, shaped by views on oriental despotism, to

accept Iran’s Safavid rulers as administratively sophisticated planners.

Coins and Silver in Iran

Since most of us here are not specialists of Safavid Iran a brief introduction to coins and

silver in Iran is de rigueur. Currency was part of the many reforms undertaken by Shah Abbas.

Between 1615 and 1620 the shah made many monetary innovations.  He revised the entire

accounting system to impose uniform currency throughout his realm. The ‘abbäsï was the new

coinage that was aiming to become the standard one across the country.  This new coinage issued

by Shah Abbas existed both in silver and in gold.

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 Money and coins in Iran have been described in



passim in administrative manuals such as the Tazkirat al-muluk as well as by European travelers,

There are also Armenian sources: There were 50 ‘abbäsïs to the Persian tümän according to

Hovhannes’ account book, the tümäni n 1686 was equivalent to 306.4 grams of silver.  Numbers

and coins are rare for this period so his testimony is important,  by the time Hovhannes  was

writing between 1682-93, the silver content of the ‘abbäsïs had been altered, as it was 384 grams

under Shah Abbas.  Except for last years 13 years of the seventeenth century where it was hugely

devalued, the ‘abbäsï coins had remained  rather stable throughout the century.

10

  From 1629-42



all ‘abbäsïs, both gold and silver, weighed 120 grains, from 1642 to 1661 they were struck at 120

and 144 grains,  after 1666 the silver 144 grain ‘abbäsïs was discontinued and the 120 grain coins

remained.  Before the major devaluation of the ‘abbäsï in 1687 when it started being struck at 114


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grains,  Jean Baptiste Tavernier gives the equivalence of the  120 grain ‘abbäsï to French coinage:



réale or French ecu =  3 ‘abbäsï and one shähï (shähï or chayet is 1/4 of an ‘abbäsï réale= 60

sols and the ‘abbäsï = 18 sols and 6 deniers. If you go to Pierre Marteau’s well known site there is

a good converter established by Stephen Album that compares the ‘abbäsïs with smaller coinage,

the shahi and bisti

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.  The shahi was the main circulating silver coin.



The mints struck anything coming into the borders into‘abbäsïs  and other local coinage.

All the coins were round, and as is common to Islamic usage, none of them had the portrait of the

king in the manner of European coinage. They simply bore the shah’s name on one side, the town

of the mint and the date on the other.  What circulated most was copper. Copper money was more

oval, and was imprinted with a lion  in Isfahan  and a sun instead of the name of the Shah.

Olearius (1603-71)  leaves us the  best record of many local coins with different effigies” The

ordinary mark of it is a stag, a deer, a goat, a satyr, a fish, a serpent, or some such thing. At the

time of our travels, the kasbeki were marked at Isfahan with a lion, at Scamachie with a devil, at

Kaschan with a cock, and in Gilan with a fish”.

12

  The only dissertation  touching on silver



circulation in Iran studies the very end of the seventeenth century a period of silver penury on a

global scale.

13

Despite the persistence of ‘abbäsïs the throughout the seventeenth century goods rarely



were counted in ‘abbäsïs, but in larinsLarins were the currency of Basra. They were in the

shape of a doubled up thread of silver, about two fingers wide on which the name of the ruler

appears.

14

 Adam Olearius visited Isfahan in 1636, about the same time Tavernier made his first



trip to Persia  describes the money circulating within the domestic market, he sees silver and brass

but hardly any gold in circulation:

The ordinary money of Persia is of silver and brass, very little of gold. The Abbas, the garem-

Abbas, or half-Abbas (which they commonly call Chodabende), the scahi, and bistri, are of silver.

The former were so called from Shah Abbas, by whose command they were first made, being in

value about the third part of a rixdollar; so that they are about 18d. sterling though they do not

amount by weight to above 15d. Shah Chodabende gave his name to the half-Abbas. The scahi are


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worth about the fourth part of an Abbas, and two bistri and a half make a scahi. Shah Ismail had

coined in his time a kind of money which was called Lari, and it was made after the manner of a

thick Latin wire, flatted in the middle, to receive the impression of the characters, which showed

the value of the piece. The Persians call all sorts of copper or brass money, pul, but there is one

particular kind thereof, which they call kasbeki, where of forty make an Abbas. When they are to

name great sums, they accompt by tumains, each thereof is worth fifty Abbas. Not that there is any

piece of money amounting to that sum, but the term is only used for the convenience of accounting,

as in Muscovy they account by rubles and in Flanders by thousands of livers. They will receive

from foreigners no other money than rixdollars, or Spanish ryals, which they immediately convert

to Abbas, and gain a fourth part by the money. The king of Persia farms out the mint to private

persons, who gain most by it, and share stakes with the money-changers, whom the call xeraffi,

who have their shops, or offices, in the Maydan, and are obliged to bring all foreign money to the

public mint, which they call Serab-Chane.

15

The passage makes clear that the mints must collect all incoming silver bullion and convert them to



‘abbäsï, and that these mints are farmed out by the shah to individuals. Nevertheless he makes

clear that the shah himself profited from the mints, indeed  elsewhere I have studied these profits,

the were of 2%,  from the mints and this currency conversion.

16

 .  The shah collected profits even



from the craft of the money changers.  Apart from moneys brought in through trade taxation

brought in money, the deported Armenians of Julfa brought in a substantial amount of taxation;

They yearly pay the King 500 Tomans, and have an Armenian to Govern them, whom they

call Kelonter, that is to say the greatest, and he is put in and turned out by the King when

he pleases.  They address themselves to this Kelonter in all their Affairs, and

Controversies, and it is he that Taxes them for raising the five hundred Tomans, which

they yearly pay the King.  But besides the Kelonter they have another Royal Officer, who

is a Deroga, for judging their criminal affairs.

17

Yet this is not their biggest contribution, I have demonstrated elsewhere that thanks to the silk trade



they were the chief importers of gold and silver to Iran.

18

Tavernier writing in the 1670’s narrates that there were several mines of gold and silver in



Iran, but that their exploitation was so profitless that it had given rise to a general expression for

labor lost.  There was a paucity of gold and silver in circulation in Iran and much hoarding.  The

Armenians played a unique and crucial role in the economy of Safavid Persia—their trade with

Europe and the Ottomans was the only source for gold and silver,

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 as Europe was Iran’s main



source of gold and silver:

6

So all the gold and silver of Persia comes from foreign lands, and particularly from

Europe, as I have said in the chapter on moneys.  Since the reigh of Shah Abbas I to the

reign of Shah Abbas II, one saw more silver in Persia than presently; and the Armenian

merchants  brought  it  from  Europe  to  Persia  where  it  was  reduced  to  local  money.    But

since a few years they only bring ducats and sequins as being more portable.

20

The word


qurûsh

  is used for the silver  imported by the Armenians in an administrative manual

the

Tadhkirat al-Mulûk

. It refers to Turkish piastre, the most common coinage brought back by

the Armenian merchants from the Levant. During the second half of the century Iran went through

a silver scarcity that has been well studied by Rudi Matthee.  Iran was no exception as it is well

known to economic historians that this was a global situation.  Yet as we will see further in this

paper the Safavid administration took it upon itself to remedy this scarcity by taking some radical

domestic measures.

.

Iran’s political economy and a new elite

I have argued at length elsewhere that the Christian Armenians of Julfa renown exporters of

Iranian raw silk even before they came to Isfahan in 1604 became central to the shah’s state-

building as they were to become the chief importers of the silver into  Iran

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   In the seventeenth



century the Julfan Armenians imported glasses, telescopes, clocks and  glass beads and broadcloth

to Iran, but never enough to cover the cost of silk sold to Europe. Consequently, large quantities of

silver bullion were transported back into Iran after the sale of raw silk on the Ottoman markets.

22

This thirst for silver held true throughout the East, from Persia, to India and the Islands of South



East Asia, as well as China and it was a very profitable trade become more lucrative as bullion

traveled  East. It is for their established skills in the trade of silk for silver that they were settled in

Iran. A more obscure, but central  economic role was played by converted Armenian and Georgian

ghulams, the slaves of the  shah in this trade conjuction with the  Christian Julfan Armenians.

23

 



Both groups are central to Iran’s political economy and state building. This new elite

played both a political and economic role which lies at the heart of Iran’s political economy

between 1604 and 1661. I have demonstrated through Safavid sources that the silver obtained


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through Julfan Armenian  raw silk exports was important to the financing of the administration of

the Royal Household or khasse, which acquired unprecedented importance under Abbas I.   Most

of the silver which entered Iran was brought in by the Julfan Armenians once they arrived in the

borders of Iran.

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  Also clearly demonstrated elsewhere was that the Julfan Armenians and the



ghulams were both attached to the Royal Household, one branch of the Safavid government, the

trade of the first group helping to finance the salaries and incomes of the other.

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  Iran had no



major exploitable silver mines and needed to export silk in order to obtain cash. The key to the

political role of the New Julfans, is spelled out in Safavid

royal edicts.

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 The  Christian



New Julfans had an active role in the Safavid palace structure and formed an elite with the Muslim

Armenians and Georgians as they  too were attached to the same branch of the government.

 The

Royal Household  or (



khasse-i sharifeh )

was one of the two branches of Safavid

administration, the other being the Mamalek, sometimes called the State in opposition

to the Private Royal Household.

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.

The move to Iran provided the Julfan silk merchants with a small state within a state while



their commercial skill enriched the Safavids and helped them consolidate their power. It has been

demonstrates that in Iran the Julfans were also integrated into the political elite, within the court,

and had a very high rank as did some Armenian converts to Islam, the

 ghuläms,

 yet that

despite this the Christian Julfans remained the relatively independent political rulers of an

autonomous  small Armenian merchant oligarchy, an Armenian city-state granted to them as a

franchise, New Julfa. Isfahan  and New Julfa would become the hub of the international silk trade

in the seventeenth century, even though many scholars have contended that Abbas failed in his

initial plan of making Isfahan the capital of silk by not succeeding diverting it from  its Ottoman

route.


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   There is little proof, despite the Shirleys’ and other English testimony, that Abbas

actually wanted to avoid the  traditional Ottoman routes of the silk trade.

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 Silk was Iran’s main



export and almost the sole source of much needed import of silver bullion.  The Ottomans  were

long established customers  of raw silk themselves on the Ottoman markets where many European



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merchants, the Englsih, the Dutch, the French and the Italians bought Iran’s silk from the New

Julfans.

Studying silver brought in against silk holds the clue to this relationship between the shahs

and the New Julfans far better than silk does, silver also links the Armenians to the ghulams. The

silver imported by the Armenians was administered through the ghulams in charge of the mints.

Muslim Armenians seem to be predominant in the mints, handling the silver once it was within

Iran. The Provost of New Julfa participated with many important officials belonging to the Royal

Household in the organization of the silk for silver trade not only on the Ottoman markets but

within Iran. Ghulams were also Caucasian deportees like the Armenians of Julfa on the Aras,

mostly Georgian and Armenians, many of them had come to Iran in the successive deportations

that took place between 1530 and 1630,some were to become part of the ghulam elite.  Unlike the

Julfans, however, the Armenian ghulams were converts to Islam. The Christian Julfan Armenians

were settled in New Julfa, an entirely Armenian suburb of the capital,  where they  had thirteen

churches and were given the privilege of their own religion, which the shah even protected against

Catholicism. Looking for the way silver and gold brought in by Armenian traders were channeled

within Iran makes the tie between Iran’s early state building under the Safavids and the Armenian

“outsiders” clear. Abbas many reforms demanded cash flo.  It is significant to note as we have

earlier that his fiscal reform and his introduction of a new coin to impose common currency dates

between 1615-20, when the Armenian trade of Iran’s silk actually got etablished.

Jean Baptiste Tavernier, states  that Armenians prefer selling their merchandise to the

French rather than to the other nations of Europe because they pay in silver as

opposed to the English or the Dutch who obligate them to taking half of their payment

in cloth.  A little further he writes that:

As one is obliged in entering the kingdom, either in Erivan or in Tauris where currency is coined to

declare all the silver one has for it to be melted and coined in the kings name,  under penalty of a

heavy fine for the countering parties if they are to be discovered.  But if a merchants affairs do not

permit him to stop either in Erivan or in Tauris, and it is more practical for him to take his silver to



9

the mint in Isphahan, he can just take a bill from the master of the mint in Erivan or Tauris by

which it is attested that he has duly made his declaration

30

These major mints at the border, Erevan  and Tabriz in the capital mints played a major role in



imposing the abbasi  as coinage after  collecting all the silver and gold entering  Iran.

 There were

three main mints at the time in Iran, but  there were others,  all the silver entering the

kingdom absolutely had to be recoined with the king’s effigy under penalty of a heavy

fine for false declaration or failure to declare. The mint at Huwayza, close to the port of

Basra was  studied by Rudolph Matthee was especially active in the second part of the

century.

31

 Silk was a ready cash business, and the Europeans often had trouble obtaining silver, in



Iran measures were taken so that the Dutch would have to sell against goods and not require silver.

32

 The trade of silk for silver would be the specialty of the New Julfans in  seventeenth century



Iran. Safavid Iran and the Ottoman Empire both had a very important demand for raw silk for their

own weaving industries.  The Europeans were by no means the only consumers of silk.

Consumption of raw silk for the looms in Iran and in the Ottoman Empire  is often forgotten at the

expense of exports to Europe, mainly because of reliance on European sources in the study of the

silk trade.  For the silk  exports to Europe  the small Armenian town of Julfa on the Aras was so

important in the sixteenth century that it was marked on Ortelius’ 1570 Atlas of the World.

33

 . It


claimed its place on the map, quite anomalously,  among capitals and major towns like Jerusalem

and Istanbul  under the  Europeanized name of Chinla.

34

Abbas’  move was to secure the silk trade within Iran via the Julfans was not a small



victory, according to Halil Inalcik, the European demand for Iranian silk cannot be overestimated,

because profits from it  formed the structural basis of the development of both the Iranian and

Ottoman economies.  For this reason even during proclaimed blockades and during  Safavid

Ottoman wars silk continued to cross the Ottoman border,  and reached  the main Levant markets



10

of Aleppo, Bursa and later Izmir.

35

   Therefore the silver flow to Iran was not interrupted by war.



Julfan prominence in the silk trade, their knowledge of the Ottoman and European markets, their

established network, their ability to bring in gold and silver, made them important to Abbas’ state-

building ambitions. The Shah also took substantial measures as did most monarchs in the

seventeenth century to forbid silver and gold from leaving the borders of his realm.



The socio-political transformation brought about by European silver

In Iran the social basis of the ruling class was modified not by these massive deportations

from the Caucasus, but because of a new elite of Caucasian origin. Economic planning was part

and parcel of this reorganization of the elite in Iran as in turn  prosperity was a sine qua non for

the political planning that marks the reign of Abbas I.  The new Caucasian ghulam  governors of

provinces were an important element in establishing Safavid  royal control over the production of

silk from 1619 to 1629 and before that in the integration into crown lands, the khasse , of all of the

major silk-growing regions—the provinces of Guilan, Mazandaran, Qarabagh.  The rule of these

governor dependant on the shah  opened an era of unprecedented control over silk production.

Shirvan was conquered last in 1607 but never became crown land even though its governors

subsequently were ghulams like the rest of the silk producing provinces. The first  to have a

ghulam vizier, Mazendaran , had Aqa Muhammad Abhari appointed by Abbas in 1599, later the

famous Saru Taqi would govern Mazendaran and Guilan.

36

 Access to them and the whole region



was also a priority that was achieved by the construction of major roads for the transport of silk.

A 250 kilometer road ran from Kvar south of Teheran to the town of Farahabad and a 500

kilometer road was built to run the entire Caspian shore from Khurassan to Azerbaijan.

37

  Local



governors and feudal families were replaced by ghulams in a systematic fashion.

38

  The forced



settlement of scores of Armenian and Georgian silk workers to Guilan and Mazandaran in 1604

was another step to tighten control at the lower level, it established a foreign group of workers as a

device to disrupt the local feudal loyalties. The local peasants were resettled elsewhere, and skilled

and unskilled Armenian silk workers alike were installed in their place.

39

The status of merchants in Safavid Iran


11

Studies on Iranian merchants are sorely lacking. It is important to discuss the Mulsim merchants in

Iran, as there are some major changes for Iranian merchants that can be traced not by any work

done on Iran but by work done on Iranian migrating to  India or even Thailand,  more specifically

families have been studied in the Deccan and Golconda.  The term merchant itself may lead to

misinterpretation because of European models.  It has been argued  by Vladimir Minorksy and

others that the Armenian were a bourgeoisie.  That indeed would have been a major social

transformation, but it is an error of mirroring European  realities onto Asia. In Europe there was a

division between the landed warrior elite and he merchant bourgeoisie, in fact France made

substantial reforms under Richelieu so that its landed nobility, a traditional warrior class,  would

not lose their titles if they traded abroad in the new commercial companies he intiated.  The

European model was projected on scholarship on Asia, thereby dividing merchant and warriors and

landed nobility in different groups.  Again since Iran there is scant scholarship on  the matter we

have to turn to work done  on India that addresses the issue.  Nearly two decades ago, C.A. Bayly

and Sanjay Subrahmanyam wrote a seminal article about merchants in both Northern and Southern

India.


40

 In both regions they described wealthy merchants as “portfolio capitalists”,  importantly

they demonstrated that  in both regions the division between a warrior and merchant class, so dear

to European historiography does not hold true in India.  After a close scrutiny of the lives and

preoccupations of Armenian merchants in Iran, as well as a study of the economic role of the

ghulams, previously only seen as political administrators, I have argued the same thing after much

detailed scrutiny

41

. In Iran there was no clear division  between warrior landowners and



merchants, and that not only feudal lords were often merchant princes, but that the Armenian

merchant diaspora was also landed owning and armed, and sometimes maintained armies.

42

   The


traditional view that a  merchant diaspora could not play an political role has also attracted my

attention and elsewhere I have written at length about how it does not hold true for the Julfans in

Iran and how the model for diasporas was initially based on the Julfans by Philip Curtin should be

amended after we know more about their role in Iran.

43

  A precursor to my views about Iranian



merchants  can be found in the work of Jean Aubin on Azeri merchants, who were land owners,

12

warriors and merchants all at once.  What was true as a social reality for merchant networks in

India and Iran is equally true of the Armenians, whose provost was a prince.  He ruled the

networks both commercially and politically and  as I have demonstrated elsewhere he even bore the

Persian title of shah on top of his own Armenian princely title. Beyond the fact that they are

Christian little else differentiates the wealthiest New Julfans from the “portfolio capitalists” in

Asian networks studied by Subrahmanyam and Bayly working on India.  Ina Iran’s political

economy the Julfans played the same role as the “portfolio capitalists” found in India.

Wealthy Muslim merchants in Iran y have not been notice or studied within iran,  but those

who were displaced by this new elite of Caucasians have been noticed in the same article and

elsewhere. Since wealthy Iranian merchants were often feudal lords, their power was a threat the

Safavids as demonstrated by a ten year war of succession;  after 1590 the shah wary of feudal

opposition and rivalries relied on a new power base which had no ties to the Iranian lords.

44

 The



political use made by Abbas of these new comers, the Julfan Armenians, who rose to the highest

posts, as Sanjay Subrahmanyam has argued in another article was tied to the departure to

Thailand,  the Deccan and Golconda of important Iranian feudal families wh traded with India,

who at this juncture were deprived of power.

45

  He argued that the success of the Armenians might



be responsible for the departure of the Muslim Iranians to India a land of opportunity. Now in the

present state of our knowledge  it is clear that it is the political use made of this whole  new elite

and the shah’s use of these new arrivals that confirm the tie between the two events, the rise of a

new elite and departure of a previous one.  One example of such an exiled wealthy merchant and

feudal lord is  found in Golconda,  from a  ruling family, originally  dislodged from the Caspian

shore by Shah Abbas’ reforms and resettlement of the silk producing regions.

46

  Other major



Iranian families, who left and became “portofolio merchants in India” are discussed in some  detail

by C.A Bayly and Sanajay Subrahmanyam. It is hard to imagine they would start with nothing they

must have brought their wealth from  Iran.  Deaprture was not unique to Muslim merchants, all

who fialed to be in this protected new elite chose to go and explore better opportunities, one famous

Julfan Armenian provost who lost his bid for power in the administration in Iran left  for India, he


13

was many Armenian merchants who did so even in the first third of the seventeenth century.

47

Very little work has been done on Mulsim Iranian merchants in Iran for this period, leaving the



false impression that they were not important.  There existed a similar problem for Turkish

merchants who are beginning to be better studied after being equally invisible to scholarship.

48

Moreover, the merchants and the aristocrats were not two different groups in Iran, but one.



49

Describing an Armenian Iranian merchant a French document has to explain: “ he occupied himself

with the most considerable trade of the East Indies. This occupation is to his greatest advantage as

it is without exception that the nobility of Persia, Armenia and all of Asia is engaged in trade,

without it implying anything derogatory.’

50

 There existed no equivalent class to the European urban



bourgeoisie in Iran until the twentieth century, yet Iran had many merchants. Some were Muslim

merchants were prominent in the silk trade in the sixteenth century.

51

The shahs themselves engaged in trade.  There is a very clear example of the



shah iiacting as venture capitalist associating himself with other merchants.

  A


document, first described by Charles Melville defines the rules imposed by the shah in 1619 for a

royal monopoly on silk. It shows the clear tie there was between the appointed ghulams , the shah,

and the merchants in the silk trade.

52

  The edict states that no one is to be allowed to buy be it a



mann of silk without permission from the viziers and kalantars of the provinces.

53

  The royal



decree is addressed to the administrators of the provinces of Guilan, Shirvan, Ganja, Qarabagh,

Tabriz and Ardabil.

54

.  It is very precise as to  the shah’s prices of the next season’s production:  a



kharvar of silk (290 kilos) would be purchased from the producers for 30 Tabrizi Tumans.  This

decree proves the importance of the silver brought in from the Ottoman markets by the Armenians

and some other merchants from the Caucasus:  Wealthy Georgian and Armenian merchants were

given an advantage by this royal decree.  An entire region’s production of silk was clearly reserved

for them by the shah. The silk of Guilan was consigned by decree to a Georgian Jew, Khwaja

Lalazar Yahud, residing in Farahabad, but originally from Kakheti Geeorgia. The silk of Shirvan

and Qarabagh was consigned to Khwaja Safar and Khwaja Nazar of Julfa, now residing in  New

ii


14

Julfa.. Most interesting is the clear tie established in this  1028/1619 royal decree between Khwaja

Nazar , provost  and ruler of New Julfa, and the shah’s silk factor  Muhib Ali Beg Lalah.  The

decree clearly states that the silk reserved for  the Armenian Provost Khwaja  Nazar should be sold

in the realm of the Ottomans[ Dar al-Saltanah of Istanbul], Khwaja Nazar  was the appointed  the

treasurer of the cash raised for the silk sold. Once bought the equivalent in scarlet , gold, and

Turkish textiles Nazar should send the proceeds to Muhib Ail Beg ( Lala Beg) in Isfahan.

55

  Lala



beg was called the shah’s treasurer and silk factor  by  Pietro Della Valle.

56

  Lala Beg collected the



benefits of the silk trade from Khwaja Nazar for the shah, a lucrative post which was not without

its dangers.  Nazar was head of a highly organized network of Armenian merchants who employed

factors to travel and sell the silk for a commission.

57

 The permitted sale of silk to merchants



coming from Anatolia for forty six Tumans, sixteen Tumans higher than production price, shows

that the customary purchase of merchants coming in from the Ottoman Empire to the Caspian

shore remains an important source of silver.  Nevertheless the role played by the Armenians is

clear in European sources, mainly through observers like Tavernier and Della Valle.

 In his letters Pietro Della Valle summarizes the role of the New Julfans:

“[Gli Armeni] sono in somma al Re di Persia appunto come I Genovesi al Re di Spagna,

che né essi posson vivere senza il Re, né Re senza loro.”[“They are to the king of Persia

like the Genoese are to the King of Spain, neither can they live without the king, nor the

King live without them”]

58

That the Genoese were the bankers of the King of Spain is common knowledge



59

 but that

the New Julfan Armenians were the financiers of the Shahs has remained unnoticed because

scholars have been concentrating on their role as silk exporters and not as importers of silver and

gold. Even less noticed is the economic role of the ghulams. Many converted Armenians and

Georgians, in high administrative posts, would actively help Shah Abbas both in the mint and also

as intermediaries in the royal silk trade with Europe.

60

 The real protagonists in Iran for this



European silk trade were ghulams, they dictated the terms.  Govenors of provinces were also

 in a


position of intermediaries in the silk trade. Allaverdi Khan,  was the  famous general

who conquered the Caucasus for Abbas, he was made  governor of the province of



15

Fars, this was a mjor province for trade. He would leave a dynasty of ghulam  such as

Imaam-quli Khan and Davud Khan who continued to hold high positions not only

politically but posts that had crucial economic meaning to the silk for silver trade. Silk

had to be expedited through their territories of Fars and  Lar,.  A governor who was not

in the shah’s service could bring obstacles by demanding  fees, which he had the

authority to do and  slow down the trade.

61

 Therefore in addition to ghulams directly



involved in trading there were ghulam  governors of provinces whose role in taxation

and expedition was crucial to the shah’s monopoly and to the enrichment of his  royal

treasury.

Allaverdi Khan’s family in Fars were the authority that  the English  and Dutch factors

working for the Companies  had to deal with.

The Christian Armenians of the khassa

 played the role of financing the ghulam

administration and providing cash salaries. A Safavid royal decree make clear that the gold and

silver brought in by the silk trade is collected then delivered by the provost of the Armenians,

Khwaja Nazar, to the Royal Household, this remained true after Abbas’ death in 1629 after the

monopoly was broken.

62

The royal edict proceeds to renew the order by Abbas I to



Khwaja

Nazar,


still the provost and kalantar of New Julfa (r. 1618-36), to take all the gold and silver imported by

the Armenians and deliver it to the Royal Household, as dues.

63

  Most importantly,  it states that



the revenue of the silk exports, silver and gold  went  to pay of  the administration of the Royal

Household.  This essentially makes the Armenians exporter the financial wing of the khassa

administration to which they were themselves attached. The bullion imported by the Armenians

paid for the salaries of the some of the officials employed within the government as  a passage in

the

Tadhkirat al-Mulûk

 attests the bullion imported by the Armenians paid for the salaries of the

some of the officials employed within the government, as the following passage attests:

During the reign of former monarchs the whole of the profits from the

vâjibî

of the Mint



[was as follows]: in the best years, when merchants brought from outside masses of

qurûsh

coins and when, at the time of particular prosperity (



‘ayn-i ma‘mûrî

) of Isfahan,

400 workers, all present, were daily employed in the Nine Departments of the Mint, and

the fabrication of [plated] silver thread (



naqda-sâzi?

) and copper coins (



fulûskârî

?)was


farmed out (

ijâra)

 for 500 to 600, or 700



tumâns

the farm holder, on behalf of all the

farm [given to him by] the Divan used to send to the Treasury 1000

ashrafîs


 [silver coins]

16

and 100 dastaja kila [sic] [large



ashrafî

coins], which at the [given] rate were worth 250



tumâns

approximately, and moreover used to pay 350

tumâns

as salary to the M



u‘ayyir

,

the



Darrâbî-bâshî

 and other persons of the Private Household who were in possession of

drafts (

arbâb-i

avâlât

). Apart from the above mentioned sum, nothing else was sent to

the Treasury. From ancient times until now, one sixteenth of the sum entering the Private

Household had been assigned to the

Mu‘ayyir al-mamâlik

.

64

The above is excerpted from the



Tadhkirat al-Mulûk

 regarding the mint.,

65

After describing the silver brought in by Armeniana trade the manual states that it was  “used to



pay 350

tumâns


as  salary  to  the  M

u‘ayyir


, the

Darrâbî-bâshî

 and other persons of the Private

Household who were in possession of drafts (



arbâb-i

avâlât

). Apart from the above mentioned

sum, nothing else was sent to the Treasury. From ancient times until now, one sixteenth of the sum

entering the Private Household had been assigned to the

Mu‘ayyir al-mamâlik.

66

 The  mints  acted



as a central bank for salaries, drawn by ( havaleh)drafts. In addition to this direct  salary for the

administrators,  there are several commissions, given as a form of taxation on that money,  among

them the seignorage of the shah himself (usually 2% on the whole sum).

67

    The  fees  of  the



mu‘ayyir al-mamâlik

were also a commission, one-sixteenth of the whole sum that entered the

Royal Household, the profits from

farming

out the mint to private persons.  The salary of the



mu‘ayyir

, the


darrâbî-bâshî

 a are clearly named. Other salaries based on the drafts  held by

additional  members of the household are mentioned, although who thye were is not specified in the

passage.


Under Abbas the army was being paid in cash. Troops of

ghulâmân,

  never supplanted

the troops of the feudal

amîrs.

, but the  shahs sustained an army of their own.  Chardin writes of

twelve thousand soldiers with muskets which he calls mousquetaires thinking of the French

example but Abbas  the Ottoman model in mind: “ he thought that the Turcs had found it necessary

in their conquest to form a large infantry which they called Yengichery  or Jannissaries, which in

Turkish means new army, or new troops, that he would form a similar one to oppose

the.”

68

Dependent on the palace alone, they were paid directly in cash from the royal treasury of the



administration of the Royal Household.

69

 There were other revenues for the Household including



taxes, among them taxation on silk paid by the Armenians at five

tumâns

per load.

70

 However, the



17

author of the



Tadhkirat al-Mulûk

is correct in pinpointing  that the piastres brought in by the

Armenians,  was by far the largest source of cash. These Safavid sources establish beyond any

doubt the financing of the Safavid state by Armenian trade both under

Shâh ‘Abbâs

I and his

successor.

All of the gold and silver entering Iran had to be minted, the mint also being one of the departments

(

buyûtât

) under the Royal Household.  Under Abbas the head of the mint was a protegé of Lala

beg, a certain Mullayim Beg.

Mullayim


 Beg was the mint master and his mentor

Lala


 Beg also has

been called the treasurer of the shah.  Pietro Della Valle describes the great autonomy he had in

managing the silk trade, he wrote that the shah let Lala Beg, grow fat on the silk trade just so long

as he ran it well.

71

  As the 1619 decree demonstrates Lala Beg received the  proceeds of the Levant



silk trade from Khwaja Nazar of Julfa. They did not do the accounting , however which was done

through an elaborate administration and well recorded.

 Every Armenian Christmas the Armenian Provost received the Shah in his home and

offered him gifts.  After the feast came annual presents to the shah, worth at least four or five

thousand French écus a. If Tavernier is correct and twenty

tumâns

were equal to 300 écus, this

astronomical sum is the equivalent of 300 to 360

tumâns.

Grandees also received gifts, the

eunuchs in particular. Tavernier then tells us that this is nothing much compared to the principal

gift that goes to the shah’s mother on Christmas day. According to the



Tadhkirat al-Mulûk

, fees


and presents, called

pîshkash

, are counted as part of the salaries of the officials. One can attempt

to give these sums offered by the Armenians a sense of scale by comparing them to the salaries

given in the



Tadhkirat al-Mulûk

The vizier, the highest-ranking official, collected annual fees of

830


tumâns,

and the head of the



aram,

also of very high rank, earned 300



tumâns

per year,

although it was not the whole of their income as this passage makes clear..

72

 These wages were in



cash but there were other gifts in kind as the tradition of gifts is an important element in Safavid

economy.


73

 Every gift was also recorded in an elaborate and highly oranized system of accounting.



18

The Royal Treasury

The economic adminstration of the  Khassa has been explored elsewhere.

74

The royal



workshops, buyutat, and the artisans employed within them, were the also units of the

khasse.

All of the workshops were under the authority of the supervisor of the royal workshops (



Nazer-e

buyutat

 )with the exception of the mint, where the controller of the essay, also called mint master,

Mullayim Beg under Abbas,  reported directly to court.

75

 Samples of the goods the workshops



produced were put yearly under seal by the Nazer, so that what was consumed and paid for by the

Royal Household would conform to what had been approved. Each year expenditure for the Royal

Household were calculated for the six months to come The Nazer, although he kept accounts for it,

could not enter the royal  treasury but controlled all entries and debits, among the most important

of all the holdings of the royal treasury were textiles, and jewels.

The issue of the circulation of silver and silver scarcity is often thought about  with amounts of f

Spanish and Japanese silver obtained for the European Asian trade.  Issue of hording  really

impeded circulation.  Hording silver and gold was common in European courts as well as in Asia.

If we believe him  Chardin describes the great honor he had to have a rare and very rapid glimpse

of the treasury while  examining jewels for the shah.  He describes priceless pearls and rubies the

size of an egg  while visiting in 1673,  in a period which is not the height of silver entry into Iran,

he wrote the following: “When  I was at the Treasury, they drew a curtain  in front of a wall, which

I saw all covered up with bags, stacked upon each other all the way up to the ceiling. There could

have well been three thousand bags, that I  judged from their shape to be bags of silver.” He goes

on to say that he was told that all the walls were covered like this and that each bag contained  fifty

Tumans of silver which he counts as seven hundred and fifty  French écus. He was also told that

sometimes some of the bags were exchanged for ducats which he qualifies as the only gold that

entered Iran.

76

  Chardin’s contention that only one twentieth of what entered the shah’s treasury



ever  left  it,  and  that  it  was  a  “gouffre”,  a  cave,  that  swallowed  all  the  precious  metal  is  as  well

known as his affirmation that the Safavid shahs were richer than the Sultan and the Grand Mughal.



19

Nevertheless the royal treasury sustained the Royal Household, salaries were paid with it, the shah

with the monopoly engaged in trade himself and therefore invested,  and it is a cliché that no use

was  ever  made  of  it.    It  stems  perhaps  from  the  view  that  capitalism  could  no  grow  in  an  Asian

society  like Iran, as the  idea of  a surpluses being reinvested in trade or infrastructure does not fit

Marx’s much quoted views on the Asiatic mode of production, which imply an eternally stagnant

pre-capitalist phase for the continent of Asia.

Save for the very famous and visible Saru Taqi, who was not a eunuchs in the traditional

sense  but was punished into becoming one, the important  economic role played by the Eunuchs

has been overshadowed by the fantasies  engendered by the haram in European writing. The

Eunuchs played the foremost role in the treasury. Once again Chardin, who had better access to the

economic mechanisms of the Royal Household than other foreign, writes that the royal treasury

was the exclusive and reserved domain to Eunuchs, that in the accounting department of the

khasse, neither the Grand Vizier, nor the Nazer,  had any information about the contents of the

royal treasury because it was inaccessible to anyone but the Eunuchs.  “ The Nazir, or great

intendant of the Royal Household [khasse], is the Controller of the treasury, he has to know what

everything that enters it and everything that leaves it , but it is forbidden for him to set foot in the

different rooms reserved for the treasury.” He goes on to write that the treasury “ is guarded by a

Eunuch and all the officials that have the right to enter it are all Eunuchs.”

77

The black eunuch in charge of the treasury was called the Sahib-i jam and was equal in



rank to the chief of the haram.

78

  The important silver trade from Iran  to India, Safavid Iran’s



main trading partner, and the gem trade from India to Iran, both mostly in the hands of Indian and

Iranian and Armenian  merchants.  The Europeans di not penetrate it until well into the eighteenth

century.  This trade has prompted writer such as Raphaël du Mans to erroneously compare Iran to

a corridor for silver.

79

  Another erroneous image also prevails, that of the Indians as simple



moneychangers who were responsible for starving Iran by depriving it of its silver. Silver was

always said to disappear by the European travelers, into the “cave” of the royal treasury of in



20

India.  It has been said one in the treasury it never reappeared, yet, as demonstrated it went beyond

the  royal  treasury  and  was  a  great  use  was  made  of  silver  for  cash  payment    to  a ghulam

administration.  In Iran’s political economy as a whole this new service elite was now paid cash

salaries.

80

.



The Importance of Muslim Armenians in the Mint

The Armenian trade diaspora in Iran has always been looked at as if it were only

comprised of the Christian New Julfans in the silk trade.  Muslim Armenians should be included in

Armenian Diaspora, eventhough arguably very quickly after their conversions their intial identities

were not important.  I have argued elsewhere because of networks formed in the powerful elites

that rules Isfahan that this identity remained after conversion and similar work has been done on

the Georgians.  Mulim Armenians, sometimes ghulams, sometimes not,  played a major economic

role with the silver imports through the administration of the mints where silver had to be

depositedThe crucial role of the ghulams in the mints remains to be studied. As a preliminary

insight  is offered through one extraordinary career.   During the reign of Shah Abbas II illustrates

the many problems that concern us here, the preeminence of ghulams in the mint, the ties between

New  Julfa  and  the ghulams, and the importance of ghulam  economic power at court. Perhaps

better than any other example Mohammad Beg’s career may point to  the preeminence of Muslim

Armenian converts in the mints.  His destiny also highlights the previously unnoted importance of

the ghulams in the administration of Christian New Julfa.

The first part of Abbas II reign would have a strong Muslim Armenian component among

its high administrators.  The political ascendancy of a Muslim Armenian from Tabriz, the second

ghulam Grand Vizier of the century after Saru Taqi, is just as intriguing if not as colorful.  His

career owes much to another Armenian convert Allaverdi Khan from.

Son of the Armenian

ghulam Khusrau

Khan


,

Allahverdi Khan

 had been master of the hunt (

amir-shikarbashi)

 since


1644, when the shah was eleven years old. He is not to be mistaken for his famous namesake,

another Armenian, his namesake

Shah  Abbas

I’s general and governor of Fars. The master of



21

the hunt was an office that was held exclusively by Armenians in the seventeenth century.  This

member of the household had a direct link to the New Julfans, he represented their interests to the

shah.


81

   This link between the Christian suburb and a high  official of the palace has not been

stressed, but it is an important one. It once again highlights the interdependence of the ghulams and

the Armenians in the palace system.  This administrator  had a most privileged position for gaining

the  shah’s  ear  as  the  hunt  was  a  favorite  sport.  He    later  brought  the  strategic  skills  he  used  to

organize the royal hunt to the office of general (



qullar-aqasi

), which he held until his death in

1663. This high position as head of the army gave him the power to install at court a newly

converted Armenian protégé, who took the  Muslim name of

Muhammad Beg

.

Muhammad Beg



 was a Tabrizi Armenian who is often erroneously said to be of modest

origins, the son of a tailor.  He is always called a recent convert to Islam, however it seems his

father was already converted. He was from a ghulam family who had occupied high posts at court.

He himself occupied the post of head tailor in the royal workshops (qaychachi-bashi).

82

This


important post had also been occupied by another Armenian convert the  ghulam general

Qarachqay Khan.

83

  His very first political post , however, was within New Julfa.  His father’s



post must have helped get him to become the darugheh , or city vizier, of the Christian suburb of

New Julfa, the second highest post after the provost. It is not clear if this appointment was also due

to Allaverdi Khan, as the master of the hunt was close to New Julfa’s administration as the

intermediary between the suburb and the shah, or if this post marks the beginning of their

encounter. Mohammed Beg would rise through the intervention of his patron .  First he was the

harbor master of Banddar Abbas, an economically important post, then shortly after in 1648

occupies the high post of controller of the essay (mo’ayyer al-mamlek) where his accomplishments

led through Allaverdi Khan’s recommendation to the post of supervisor of the royal workshops or

(nazer-e-boyutat).

84

Next



Allaverdi Khan

 sponsored him to succeed his own rival at court: the orthodox

Grand Vizier

Sultan


 al-

Ulama


, and thanks to this in  1653, the Armenian convert became grand

vizier.


85

 The desperate demand for cash makes one wonder if any single reformer could have



22

changed the situation. When he was controller of the essay he had issued a new abbassi  coin,

lighter  in  weight  by  at  least  ten  percent,  in  great  part    because  cash  had  become  scarce.    His

appointment as a grand vizier was prompted by economic considerations and it was believed that

the  Muslim Armenian vizier , who had close ties with the mints as well as the New Julfans would

bring his economic expertise to court and solve some of the urgent need for silver.

The war with Mughals over Qandahar, the enormous architectural projects such as the expensive

construction of  many palaces and caravansaries had made Abbas II’s royal treasury desperate for

cash.  Abbas II investments truly argue againt the image of hording monarchs and a stagnating

economy, yet his ambitions caused a major crisis at a  time well know to economic historians as a

time of world wide silver scarcity.  Hailed as the official, who could come up with new reforms to

enhance the revenues of the royal treasury, he had a formidable task ahead. His new abbassi  coin

had changed little to the real situation.

86

As corporate manager would do today, he first  downsized, eliminating posts the



administration. His efforts to raise cash and curb expenditure involved eliminating some high posts

reserved to ghulams,  the army was paid in cash since Abbas I, such as the post of general

(Sepahsalar ) of the entire army, to save on those high cash salaries.  He tried to mine silver within

Iran, and even engaged a French charlatan by the name of Chapelle de Han , a self-styled

mineralogist to assess the resources of the mines in Iran. This was to no avail. He also instituted a

mercantilist policy of a ban on silver and gold exports, which was strictly supervised by the essayer

of the mint who was none other than is own son Mohammad Amin Beg.  To aquire control his

kinsmen were given the monopoly of two posts that  he had previously occupied himself, harbor

master at Bandar Abbas, a lucrative post for  tolls and controller of the essay where his son

succeeded his brother.

87

  Some of these measures only served to amplify to the difficult economic



situation that ensued from his mismanagement.

88

  Nevertheless, more importantly for our prupose



here, it is important to note that his family was now in the key posts that controlled the economy.

After he failed to compensate for the lack of silver by his measures,

Allahverdi Khan

,

put an end to his protégé’s administration in 1661. During this entire period, the orthodox



sharî’a

-


23

minded jurists greatly resented the rule at court of these Armenian converts to Islam at court. In the

course of their careers Muhammad Beg, his brother Hasan Beg and his son were all three

controllers of the essay, although there are several other examples, in this brief overview their

careers illustrate the preeminence of converted Armenian ghulams in the highest posts in the mints.

In Ottoman territory, the role of the Ottoman Armenians in the mint is well known. Much more

needs to be done on the mints in Iran  before the structure of power  that led to these successions

within Muslim Armenian families is uncovered.




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