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W. Morgan Shuster – The Strangling of Persia (1912, The Century Co.; first editions and early reprints are rare collector items today)
In 1911, Iran’s parliament (the Majlis) hired a 34-year-old American financial expert, W. Morgan Shuster, as Treasurer-General. His mission: rescue the treasury from chaos and crushing foreign debt so a new constitutional government could actually function after the 1905–1911 Constitutional Revolution.
What he discovered and fought was a calculated campaign by Britain and Russia to financially and politically strangle Persia to keep 12 million people weak, indebted, and unable to control their own resources or destiny. Shuster wrote the explosive firsthand account after they forced him out.
Here’s the core of what the book lays out, stripped to the facts that still shock people who’ve never heard the story.
The Setup: Secret Partition Debt Trap
Britain and Russia had already secretly signed the Anglo-Russian Convention of 1907, carving Persia into spheres of influence without asking Persians: Russia got the wealthy north, Britain the south (including the emerging oil fields and the route to India). A neutral middle zone. This was pure great-power realpolitik dressed up as “stabilization.”
Persia was already drowning in debt from loans the previous Shahs had been pressured into taking from these same powers (Russian loans of 1899–1902 and others). Customs revenues and other key income streams were pledged as collateral. Foreign “advisors” (often Belgian officials tied to the lenders) effectively controlled collection and skimmed profits. Default or “disorder” gave the lenders leverage to tighten control.
Shuster and his small American team were brought in precisely because they were not European the Majlis wanted neutral experts to centralize finances, end corrupt tax-farming, collect revenues properly, pay debts legitimately, and build a real central government. Shuster got unprecedented authority from the Majlis. He centralized collection and disbursement, fought graft, and created the Treasury Gendarmerie an armed force to enforce tax collection in the provinces where the central government had almost no reach.
He even tried to hire a capable British officer, Major C.B. Stokes, to lead it. Britain blocked the appointment it might “offend” Russian interests in the north.
Success for Shuster meant Persia could pay its debts on its own terms, develop independently, and stop being a financial vassal. That was unacceptable to the powers who wanted the revenues and concessions flowing their way.
The Trigger: Crushing a Russian-Backed Coup… and the Backlash
When the deposed ex-Shah (Muhammad Ali), backed by Russian intrigue and arms funneled through Russian territory, tried to retake the throne in 1911, Shuster helped the constitutional government defeat the rebels. They put bounties on the ex-Shah and his brothers and moved to confiscate their estates (including one where the Russian Bank made a dubious/fraudulent claim).
Russia responded with ultimatums: Fire Shuster or face invasion.
Britain’s Foreign Secretary, Sir Edward Grey, advised Persia to submit “to avoid complications.”
The Defiance and the Crushing
Iran’s Majlis voted unanimously to reject the ultimatum and keep Shuster. Persian women marched on parliament, vowing they would rather see their families dead than submit to foreign dictation and lose their sovereignty.
Russia sent thousands of troops into northern Persia. They advanced, occupied key areas, and carried out massacres in Tabriz, Resht, and Enzeli bombarding cities, killing fighters (fidais) and civilians alike. A coup (involving elements bought off or aligned with the invaders) abolished the Majlis on December 24, 1911. Shuster was forced out in January 1912.
The constitutional experiment was strangled. Persia was left further “denationalized.”
Elite Bankers, Debt as a Weapon, and Motives…
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