From farrier to banker

In the upcoming Wannenens Auction in Milan on 7 June 2018, Lot 97, there is a Kerman carpet (circa 1900), size: 230x140, showcasing Hushang Shah (a prehistoric Iranian king that we discussed before). What interested me most was the cartouche on the top of the carpet mentioning that the carpet was made "By order of Jahanian". To understand my interest, I would need to take you back to the history of banking.

Banking in Iran has traces back to pre-Achaemenid times when money lending was done by temples and princes. Once Babylon became part of the Achaemenid Dynasty the Iranians learned some new banking skills from them and there are records indicating money sent from Babylon to Larsa. In Greece there were some banking laws permitting money lenders to charge interest. The Romans most probably learned banking from the Greeks and the Italians later had exchange bureaus in Lombardy and Venice, with transactions being conducted on small tables in the town squares. These tables were called banco's and thus the origin of the word "banks" came from it.

Historian Roman Girshman mentioned that during the Sassanid Era Iranian and Jews of the Empire conducted many monetary transactions with the Royal banks using documents that ordered the bank to pay a specific amount of money to the person in whose name the document was issued. These "notes" were called "cheques" and is the origin of the "cheque" as we know today. Another banking term originating in Iran is "barat" which was later exported by Syrian Christian Merchants to the west. Nasser Khosrow documented in the 11th century that there were 200 exchange bureaus in Isfahan. During Safavid times there were also many exchange bureaus in Qasvin and Isfahan with interest rates of 12% for merchants and 24% for ordinary citizens. In Safavid times the exchange bureau owners also issued a document that is similar to credit cards of today, called "bijak". The bearer of the bijak could exchange the bijak for cash at any time and anywhere in Iran. It was much safer to use than to carry actual cash. In Mongolian times the use of printed bank notes, called "chav", became compulsary in Tabriz and few other cities.

Around 140 years ago Hajj Muhammad Hossein Aminol Zarb, an exchange bureau owner, requested permission to open the first formal bank in Iran. Nasir din-Shah of Qajar, the reigning king at the time, however denied the request. Around 1880 in Yazd there were a few Zoroastrian businesses with the names Jamshidian, Yeganegi and Jehanian (the latter being the person who ordered the above mentioned carpet being auctioned), who were acting as bankers in communities in the absence of a more formal banking system. In 1894 Khosrowshah Jahan and four of his brothers: Parvis, Gudars, Rostam and Bahram - Zoroastrain landlords in Yazd - opened the Institute of Jahanian through which they conducted their general retail and also money exchange services. They had branches in Yazd, Tehran, Isfahan, Shiraz, Kerman, Bandar Abbas, Rafsanjan, Bombay, London and later New York. They were extremely successful and powerful and also supported the Constitutional Revolution in Qajar times. Unfortunately competition from banks outside Iran, no official government support from inside Iran, suspicious deaths of some their branch managers and some unsavory practices from competitors, caused the company to close their doors in 1911.

Another famous banking family in Iran at the same time was the Tumanian family. They were of Armenian origin. Around 1785 in the Armenian village, Vaiqan Arasbaran in Karadag county, lived a farrier (horse shoe maker) named Malik Sarkis. His horse shoes were of exceptional quality and soon he became well-known. After his death his son, Tuman, took over the father's business and with the family's fame for extraordinary workmanship reaching the city of Tabriz, Tuman realized that he could double his profits by exchanging his horse shoes for product from Tabriz that he would then sell in turn in his own and surrounding villages. When his son, Harotion Tumanian, joined the business they moved from Vaigan to Tabriz in 1840 where they purchased a house in Liliabad which was known as the Armenian suburb of Tabriz. They opened a small shop in the bazaar of Tabriz called the Tumaniants Brothers and were joined by two brothers-in-law of Harotion. After the death of Tuman, Harotion joined by his 4 sons and 4 sons-in-law expanded the business and opened branches in Urumieh, Bonab, Rasht, Ardabil, etc. They realized later on that they could also do business in Baku by exchanging wool, cotton, silk and nuts from Iran with gold and silver from Russia. This prompted them to open a branch in Moscow also run by family members. Sarkis Tumanian took the business to the next level when he ordered two ships from Sweden in 1889, that was used to transport goods exchanged between Iran and Russia. They later invested money in the oil companies for Russia and Iran and they became involved with coin production by supplying the gold and silver needed for this in Iran. In 1918 they were unofficially accepted as the semi-official bank of Iran in the absence of any official Iranian banks. Unfortunately during the Russian Revolution in 1917 they lost all their Russian assets and because of this, Iranians banking with them in Iran, fearful of losing their deposits rushed to withdraw their cash. Even though the Tumanian bank could return all the monies deposited by the people, they decided to close their doors in 1933.

Most of these banking families, including the Jahanians and Tumanians, spent much of their time and fortune to order and export Persian carpets across the globe. It was not just a symbol of their wealth, influence and importance but it was also a way to ensure the continuity of this ancient and native Iranian art form as well as ensuring that this art form will continue to be used as one of the safest commodities of all time.

After the Russian Revolution many Russian banks opened branches in Iran and Britain was also given rights to open the first official Royal bank in Iran. Other banks that were active in Iran were banks from Germany and despite Reza Shah's preference to deal with Germany, the Iranians never supported it. The Ottoman Empire Bank briefly opened branches in Iran in 1923 in Tehran, Hamadan and Kermanshah. The Sepah Bank was opened in 1926 supported by the government of Iran as the banker for the pension funds of army personnel of Iran. Three years later the National Bank opened and this gave an opening for many other banks to open in Iran resulting in 27 banks operating in Iran in 1959, 10 government banks and 17 privately owned banks. After the Iranian Revolution in 1979 all banks became state-owned and new banks were formed by merging some of these banks.