274. You always need to be … (#1)
“Yes, you always need to be a little more cunning. Otherwise, you'll be a little stupider...”
“When fools fight, smart people should make money!”
“A fool learns from his mistakes, a smart one learns from other people's luck!”
“No one contributes to the development of trade and banking as much as fools.”
Aphorisms of the unknown authors.
“The author devotes his article to one of the most serious threats to culture - the problem of fools… The trouble, among other things, is that both the active and inactive fools are dangerous for themselves and for the community.”
A.E. Zambuli “Fools in a human culture: Ethical aspect”
Iran.
Since the 1870s England and Russia began to apply new forms of exercise of their influence in Iran, consisting of financial and economic expansion. Since then, numerous agreements, concessions, and loans have been concluded.
Britain started with being more energetic. The first concession for the construction of a telegraph in Iran was signed in 1862. In 1862-1874, the British concluded four conventions with Iran that provided for a telegraph line through its territory to establish a connection between London and India. The telegraph line had been served by English officials who enjoyed broad extraterritorial rights.
From the British perspective this was a very good deal: the stupid Iranians had been cheated and Britain got what it needed.
From the Iranian perspective, the stupid Brits had been paying them one third of the profits for renting valueless land plus provided discount for the telegraph services within Iranian territory [1] and the whole extraterritoriality thing was pretty much meaningless: the unfortunate accidents always could be attributed to the unruly mob or the bandits.
Iran
seemingly made great economic and political concessions when its rulers granted the English Baron Y. Reuters in 1872. Reuters have a monopoly right to build railway and tram tracks, operate oil sources and a number of other minerals, develop forests, build irrigation facilities for a period of 70 years. In addition, he was given the management of all customs. According to the terms of the concession, Reuters, in return for the unlimited rights granted to him, had to deduct 15-20% of the net profit of concession enterprises to the Iranian government. It looked quite impressive instead for two tiny problems:
Nobody (including Iranian government) had a right to build the railroads in Iran according to the Russian-Iranian treaty of 1860 [2] which could be reviewed in 20 years. The reason on the Russian side was simple: until the CA railroads were fully integrated into the Russian rail network, construction of a railroad by the third party (Britain) could provide this party with an advantage of access to the area Russia was interested in - Northern Iran. In a meantime Russia had an advantage with access by the Caspian Sea. Funny as it may sound, the British government also was not supportive of the railroad idea because a railroad crossing Iran from North to South may simplify the Russian attack on India.
The concession had been concluded while the Shah was traveling in Europe and caused such a negative reaction that as soon as he was back it was cancelled.
Few years later the similar fate befell an attempt of another British entrepreneur to establish a monopoly on purchasing, processing and selling tobacco in Iran: the bribe was given, permission granted, the public outrage followed and concession was cancelled (but the Iranian government had to pay £500,000 of coomensation).
Much later Reuters had a much greater lack with founding a bank in Iran, a move that was balanced by opening of the Russian bank. Both were providing loans to the Iranian government and getting all types of concessions.
In one major area, road construction, the Brits proved to be considerably more successful due to their greater colonial experience. The main transportation means in Iran were camel caravans and the camels don’t like to go on the hard surfaces. The Brits were making their roads soft while the Russian concessioners were making them hard to accommodate pretty much non-existent carts and wagons. All these British and Russian roads were toll roads and the Russian ones were either a straightforward loss or a meager profit because the Iranians avoided them.
But taking control over all caviar production on the Caspian Sea definitely was a coup (the obvious morale is: don’t go into a business which you do not understand).
In general, situation looked as following:
- Britain wanted sphere of influence in the Southern Iran because of its oil.
- Russia wanted sphere of influence in more economically developed Northern Iran because it was a promising market.
- Neither of them cared about the Central Iran but both had been rather reluctant to make it free for all because a power filling the vacuum could become ambitious and try to screw any or both of them.
- Banking operations on both sides were mutually acceptable because they hardly overlapping.
In a rather rare show of the mutual understanding and cooperation the two Great Powers made an agreement satisfactory for both of them. It was expected that the combined diplomatic efforts plus geography would made serious penetration by the outsiders unlikely because they were controlling most of the entry points and OE controlled the rest and did not have any reason to spoil relations with any of them.
Of course, all these games became possible due to almost complete absence of a meaningful Iranian military force. Its irregular troops had been raised on a tribal principle and the last thing the Shah wanted was for any of their tribal leaders having in his disposal some serious force. One of them was foolish enough to promise Shah to raise 35,000 troops with the modern weapons. Most probably he was just bragging but Naser-ad Din ordered to strangle him, just in case. His son and successor kept working on the issue without a fanfare but managed to block a British concession which would encircle his territory with a highway. Shah diffused the tension by appointing him a governor and supreme commander in the region. But he was not alone…
The regular army
on paper amounted to 150 - 200,000 but in a reality hardly 50,000. As for quality of these troops, even Shah’s personal guards “
presented a sample of negative military discipline”. Artillery,
on paper, was numerous but it was armed with outdated, unusable guns of different samples and calibers, which significantly limited the possibility of their use. From the report of Russian traveller who visited arsenal in Tehran:
“
The artillery had about 200 guns, usually bronze, loaded from the muzzle; carriages, fronts, wheels, everything was in a deplorable state… All Persian artillery was unsuitable for live firing…. On the other hand, the arsenal contained up to 48 rapid-fire field and mountain guns of Schneider-Crezo, the Canne system, with a full combat kit, with harness, all spare parts, echelons of ammunition boxes (perfect weapons of that period). However, there was not a single person among the personnel of the artillery teams who could help disassemble all this equipment, dumped in a chaotic mess, without numbers on the boxes right in the courtyard of the Tehran Arsenal, which was located in the city center.”
Infantry was along the same lines. The appointments and promotions had been bought, majority of the officers had been ignorant beyond learning few commands and the government’s attempt to produce the better cadres by founding a military school did not produce noticeably positive results. The Sarbazas (soldiers) were not receiving salaries because government did not have money and had to provide for themselves. They were getting products and from time to time, uniforms. The whole regiments had been on a furlough to save money and training of the troops had been conducted only in Tehran camp, only in summers, only 2 hours per day except for the holidays, Fridays, Mondays or when the weather was bad. Discipline was weak and the weapons were all over the place. The Sarbazas were not engaged in fire training, did not disassemble or assemble tyeir weapons, did not clean them and did not know how to use them. Shooting, due to economy and inability to use weapons, was not carried out; any maneuvers were out of the question, as only a quarter of the available regimental numbers was often present, and sometimes less. When the soldiers left the barracks, they put on all the things they had (such as vests, sweatshirts, jackets, 3-4 pairs of pants, etc.) for fear that a friend could steal something and sell. They were generally despised by the population and subjects to a mockery. In turn, due to the absence of control, they felt themselves free to take whatever they can from a population.
“
Having loaded their useless guns on mules, soldiers spread on the sides of the road and simply rob gardens and vegetable gardens, stop passers-by, demanding tobacco, hashish, money. Seeing this army from afar, everyone is in a hurry to turn away from the road, and the unfortunate peasants stand helplessly and calmly watch the fruits of their labor trample and put them in bags.”
Small wonder that the
Cossack Brigade (later - Division) had been a factor with the influence going well beyond its numbers. And 4 modern guns presented by AIII to this brigade produced something of a shock.
Of course, besides presenting a good market for the Russian textiles and other items, Iran looked as a perfect dumping ground (for money, of course) for the obsolete Russian weapons of all types.
Germany and France.
The Austro-Prussian War left the independent states of the Southern Germany in something of an existential limbo. Even as some kind of a confederacy they were not strong enough to stand up either to newly-formed German Union or French Empire and Austria just proved its uselessness as a protector.
Of course, in the terms of preserving most of their independence, France was probably preferable because as a protector it would hardly have an intention to consume the protected ones. However, Emperor Charles I was viewing his potential role of a “protector” with a great degree of a skepticism. As a matter of a pure prestige such a role was tempting and probably it would be nice to have a buffer zone between France and Germany, but if it involved a face-to-face confrontation with Germany, this would be a high-risk encounter with no obvious gain and, if it comes to war, the huge expenses, human losses and a serious risk of losing popularity for getting France into a war for … what? The diplomatic option in which Germany agrees to such a scenario (taking into an account Bismarck’s statements of the 1840s this did not look implausible) was cautiously tested but it was easily found that, with the changing times and geopolitical realities, the Iron Chancellor seriously changed his views on the subject.
Indirect approach was tried: Russian Emperor AIII had been discretely approached through his Minister of Foreign Affairs, N.K.Girs, on a subject of some kind of the international guarantee for the Southern German states. The official answer was that the Emperor is not interested in getting involved into the German affairs, especially if such an involvement may result in a war. Unofficially, the French Ambassador was informed that the Emperor was unpleasantly surprised by the French refusal to join the Extradition Treaty which put into a serious doubt sincerity of the traditionally good Russian-French relations.
With such an information it was now up to Charles to figure out the further course of actions. The issue of the “protectorate” was taken off the table and Bismarck was informed that France does not have interests East of the Rhine. Not without the parliamentarian struggle, the Extradition Treaty had been pushed through and AIII was given an opportunity to benefit from certain recent development.
The Southern German states had been left with a single option: to form “voluntarily” a confederation with the German Union. Due to the family relations Hesse and Wurttemberg got the good deals and, being now in a generous mood, Bismarck granted the same deal to the rest. The states preserved their rulers, administration, postal services and military forces but these forces had to be remodeled along the Prussian lines and, in the case of war were going to act under the German command. The states will be sending their delegates into the federal German Parliament and the foreign policy was going to be a prerogative of the Union’s Chancellor.
To minimize the terminological confusion, Bismarck came with a long-awaited proposal to claim the resulting monstrosity an Empire with the imperial title going to Wilhelm I who now will be Kaiser Wilhelm I of the German Empire. There were no objections in Germany or abroad and Wilhelm’s status had been upgraded in a solemn ceremony involving most of the German rulers and top military commanders.
Well, actually some of the minor German rulers of the really ancient families never visited Berlin to avoid paying respects to a Hohenzollern parvenue. But this was mostly on a silly side due to their absolute unimportance.
Africa.
Finally, after 10 years of construction, and unknown numbers of dead (the estimates varied from under 1,000 to over 150,000 depending upon the political goals and other considerations) the Suez Canal was finally open. The canal opened under French control in November 1869. The opening ceremonies began at Port Said on the evening of 15 November, with illuminations, fireworks, and a banquet on the yacht of the
Khedive Isma'il Pasha of
Egypt and Sudan. The royal guests arrived the following morning: the
Emperor Franz Joseph I, the
French Empress, the
Crown Prince of
Prussia, and
Prince Louis of Hesse.
The ceremony was not without the accidents: the French ship, Péluse, run aground blocking the way so the following ships had to anchor in the canal itself until the Péluse was hauled clear the next morning, making it difficult for them to join that night's celebration in
Ismailia. But otherwise everything was fine with the fireworks, champaign and the Brits, who suddenly got interested, starting paying serious attention.
The interesting things started afterwards. The Brits, who were adamantly against the project, figured out the changes it meant to the foreign trade and opposition, led by Disraeli, was demanding to take control over the canal. Taking into an account that a military action would cause a joined response of France, Egypt, Ottoman Empire and Russia (all of which had been holding various amounts of shares), an attempt had been made to buy Khedive’s shares. Khedive, who was deeply in debt, would not mind to get £3,000,000 [3] but he could not sell his shares bypassing France. On one hand, the French government did not have enough cash to buy most of the offer but, OTOH, there was no intention to let the Brits to get anywhere close to controlling what promised to be a great cash cow in a near future. Emperor Charles was advised to accept an intermediate solution: to buy everything but arranging a preliminary agreement with the “non-competitive friendly powers” regarding them buying some parts of it.
The funny thing about the whole situation was that the British initial offer, the French counteroffer and the Russian purchase had been subsidized by the corresponding branches of the same House of Rothschild
. By the end of the complicated negotiations France ended up with 41% OE retained its 10%, RE got 10%, GB got 10% and GE 5%. The rest was still spread between the minor holders. The canal became truly international with too many Great Powers involved for any of them trying to grab an exclusive control.
Now, with the Suez Canal being completed, it was a good time to proceed with the long awaiting project of building railroad from Djibouti to Ethiopia to open its markets. Emperor Menelik II expressed interest in having it stretching all the way to his capital Addis-Ababa and Compagnie Impériale des Chemins de fer d'Éthiopie had been founded in 1871 [4].
Prior to the construction of the railway, it took six weeks to travel from the coast to Addis Ababa by camel and mule caravan. The Ethio-Djibouti Railway would made the Ethiopian Empire more accessible to the outside world, improving its economic and military competitiveness. For the “outside world” it would simplify export of the Ethiopian coffee and gold and, as far as some members of that “world” were involved, would impede the too fast expansion of some other members into what started looking as the important part of the African continent.
Menelik resisted putting any of his personal funds into the venture. Instead, the company received a 99-year concession to operate the railway, in return for giving Menelik shares in the company and half of all profits in excess of 3,000,000
francs. Furthermore, the firm was obliged to construct a
telegraph line along the route. Initially, the French government was planning to take charge but Menelik himself was irate at the involvement of the French government, which had offered to fund the line, and there were popular demonstrations against it. As a result, the company ended up as a public one with the international set of the shareholders including some Russian capital: Ethiopia was considered by default a friendly Orthodox state and dedicated effort had been made to establish closer relations with it. As soon as the railroad was completed Russian diplomatic (and military) mission had been sent to the court of Menelik II tasked with "
to gain the trust of Negus and, if possible, protect him from the intrigues of our political rivals, especially the British, pursuing such ambitious, predatory goals in Africa." The lack of pronounced political and economic interests in Ethiopia allowed Russia to take the place of a benevolent adviser under the Ethiopian emperor.
In addition, Russian officers, through their participation in military expeditions of Ethiopian troops, made a significant contribution to strengthening the territorial integrity of Ethiopia. Of course, in the real terms, Ethiopia remained quite peripheral to the Russian policy and economy with the amount of trade in both directions being limited and the absence of the Russian colonial interests in Africa making diplomacy rather passive.
However, the whole thing, due to the Orthodox factor (and minimal expenses) proved to be quite popular in Russia. A number of volunteers and scientists traveled there, a hospital was founded and there were expositions of the exotic items in Moscow and St-Petersburg, not to mention the lectures and the books written by the travelers.
Pacific coast.
Before completion of the Suez canal and even after that a route across the Atlantic and then up along the Pacific Coast of the Americas was quite popular way for the Russian ships to get to the Russian Far East. It was allowing to minimize dependence upon the British ports in India and Malaya for coaling while allowing to visit the Russian settlement in California and before that to make stops at Argentinian and then Chilean or Peruvian ports for some trade. Russia was not too interested in the ongoing disputes regarding guano and nitrites rights, which helped to maintain friendly relations with everybody.
For a time being the Spanish “Imperial Council” in which all former colonies had membership had been able to mitigate the disputes, which mostly boiled down to possession or taxation rights of the mineral resources but this does not mean that the participants were completely ignoring the alternative possibilities and neglected their armaments. Of course, their resources had been quite limited but, when you don’t have a developed metallurgy and heavy industry, you are forced to buy the weapons abroad because this is what your neighbor is doing anyway. And why not buy a reasonably high quality stock from a side that is not trying to make it into a package deal involving control of you natural resources? Even some warships delivery of which is not going to be a subject to any political conditions? If the Russians are making the ships going across two oceans, surely these ships will do fine in a potential conflict near the coast. Of course, the Brits still had reputation as far as the ironclads were involved but the smaller fast steam corvettes and frigates were another issue.
Mexico.
President Juarez had been holding to power all the way to his death in 1872 but this does not mean that his rule was peaceful. Rather to the contrary, it was anything but with the regular uprisings of his political opponents and former allies who got pissed off with his unwillingness to abide the constitution and cede the power.
And while the armies involved in these military activities usually were not big, they still required the weapons. Rather considerable amounts of them because these troops tended to be ill-trained and did not take a proper care of their arms. Unfortunately, the most obvious source of the weapons supply, the United States, was not available with its seemingly endless civil war [5].
Relations with Britain and France had been rather sour after they forced Mexico to return its debts and neither of them was excessively eager to deal with Juarez on any conditions.
Which was more or less leaving two potential suppliers, Russia and Germany. Both were ready to trade for cash and, with the major wars over, Mexican government did have some funds and in the case of Russia could offer some carrot in a form of a favorable treatment of the Russian businesses in California.
[
And Happy New Year to everybody ! 🍾🍾🍾]
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[1] In the earlier post I wrote that Iran paid for the construction but it seems that this was not the case.
[2] In OTL 1890 for 10 years.
[3] In OTL £4,000,000 for 44% share but ITTL he owns 30% and France has a preferential right of buying his shares. France (as a government) owns 35% and the rest is split between the governments of the OE (10% as befitting the sovereign) RE (5%) and individual holders. Lesseps sold most of his shares to France to avoid bankruptcy but left in charge of the Suez company.
[4] In OTL the company was founded in 1894, Menelik II became an emperor in 1889 and AA became capital the same year. ITTL when it would come to these years, I’d probably forget the whole thing so we are ahead of the schedule.
[5] On this probably later. Anyway, it keeps going on (sluggishly, but nonetheless) in the early 1870s.
