By: Mir M.Hosseini
In the midst of the Constitutional Movement, the Iranian government which did not have any financial resources but Russia and Britain, accepted to give railway concessions to Russians in exchange for a loan. On Feb, 6, 1913, the cabinet of Alaossaltaneh signed an agreement with the Loan Bank of Russia granting the rights to construct and operate a railway from Jolfa to Tabriz and Urmia for a period of 75 years. The Russian bank also acquired mining rights in the area 100 km around the railroad. The bank was also exempt from any taxes.
The Loan Bank of Russia started in 1890 with a branch in Tehran. Its numbers of branches had reached 15 around Iran when its operations were terminated in 1921. The bank had accumulated a great amount of properties confiscated against its loans.
Only three days after giving railway concessions to Russia, Iran signed the Mohammerah-Khorramabad railway deal with a British entity named Iran Railways Syndicate.
In 1913 four loans in different amounts were granted to Iran with an interest rate of %7.