Correspondence

Iran, Russia, and Debt

Historians are quick to recognize struggles among national powers, but they usually neglect the power of organized international finance, which has aims above and beyond those of its host countries.  In fact, during the Belle Époque, great powers such as Britain and France were simply the workhorses of the financial elite.  The same can be said for Russia—both then and now.  And then as now, Iran has been a tool of the financiers to manipulate Russia and acquire her assets.

In the 1870’s, international banking was colonizing Iran through the British, a situation that was detrimental to Russian interests in the Middle East.  The first financial emissary, Baron Julius de Reu-ters, was the scion of a Göttingen banking family who enjoyed a meteoric rise to wealth peddling information between the London and Paris stock exchanges.  Despite the Russians’ best efforts, he won the charter for Iran’s central bank (the Imperial Bank of Persia) in 1898.  The bank was floated in London, and David Sassoon took a controlling interest in the monopoly created by this arrangement.  The Russian government tried to counteract this influence with their own (less successful) bank in Iran, the Russian Loan and Development Bank.  During the ensuing struggle, Russia backed the interests of the shahdom with loans and troops, while British bankers focused on establishing economic...

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