The Economic History of Tehran, Iran
San José State University

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The Economic History of Tehran, Iran

Tehran, the very warm place (its literal meaning) on the slopes of the Elburz Mountains which separates the Caspian Sea and the Central Plateau of Iran. Tehran is located atan altitude of 3800 feet but it is only 44 miles from the snow-capped ancient volcano of Mount Damavend which is 18,624 feet high. Two rivers flow down the mountain slopes near Tehran. They are the Karaj and the Jajrud, on which there are dams supplying a major part of the power needs of Tehran.

Tehran came into prominence only after Rey, the capital of the Medes and Persians, was destroyed by the innvading Mongols in 1220 CE. The suvivors of the massacre at Rey fled to Tehran, one of the suburbs of Rey. So Tehran is simply a continuation of the older city of Rey.

Alexander of Macedonia stopped over in Rey in 330 BCE in his pursuit of Darius III, the Emperor of Persia.

Rey, under the name Rhages, was the main city of the Medes, a people who merged with the Persians. Before that Rhages had been the capital city of the Arsacid Empire. Moreover there is evidence of a human settlement in the area going back to six thousand BCE.

The rich Persian history, religion and culture were effectively destroyed when the Shi'ite Moslems conquered Persia in 632 CE and relaced them with Arab history, religion and culture.

After the destruction of Rey by the Mongols in 1220 CE the village of Tehran grew into a major city. In 1553 and 1554 a king of the Safavid dynasty of Persia had a wall built around Tehran. That wall included four gates and 114 towers. He also had a bazaar created for the city. In 1628 an English traveler estimated that there were three thousand houses in Tehran. Another king of the Safavid dynasty held court in Tehran in 1720 but was shortly afterward defeated by an invading Afghan army.

In 1785 the founder of the Qajar dynasty, Agha Mohammad Khan, captured Tehran and made it his capital. The Qajar dynasty lasted until 1925 when its last king was overthrown by Reza Shah Pahlavi.

The Allied leaders in 1941 suspected that Reza Shah Pahlavi was going to side with Nazi Germany in World War II so they invaded Iran with the Soviet Union occupying the northern half, including Tehran, and the United Kingdom occupying the southern half. At that time the Allies forced the abdication of Reza Shah Pahlavi and the coronation of his son as the Shahanahah (king of kings) of Iran. That shah, Mohammed Reza Pahlavi, proved to be a securalist and a modernizer. That aspect of his rule alienated the the Shi'ite religious establishment and they began to seek to replace him. There was also a communist movement organized from the Soviet Union that also wanted to replace him.

To secure favor from the peasants of Iran Mohammed Reza Pahlavi promoted a redistribution of large land holdings including his own. But that took away the properties of the relegist organizations, further toaising their opposition to him. His actions also alienated the owners of businesses resulting in their allying themselves with the relegist leaders to bring about the overthrow of Mohammed Reza Pahlavi. For more on this see Iran


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