Introduction

Along with the Jews and Greeks, Armenians have been regarded since ancient times as a classical diasporic population, which likewise existed outside its so-called "historical homeland" in the South Caucasus. In East Anatolia, it maintained an extensive network of mercantile routes with settlements in a large number of cities of the Middle East, the Black Sea, and the Mediterranean region. Such trading networks can be understood as outposts of merchants of a certain ethnic, national and/or religious group in foreign cities that are connected by trade routes. Over time, merchant colonies emerged there, which were connected to each other through the continuous circulation of people, goods, capital, and information. In some cases, they were also connected to a central hub and starting point of the trading network. Often they were characterized by a certain degree of cultural autonomy or even inner autonomy vis-à-vis the surrounding community in the country of residence.

Such trade networks can be seen as the outcome of attempts to solve various technical problems through controlling certain (long-distance) trade branches by particular ethnic groups. Under the conditions of a pre-industrial society, specific difficulties went hand in hand with long-distance trade, such as ensuring a continuous and rapid exchange of information, the rate of turnover of goods and capital and the organization of credit and trust.¹ In particular, securing the communication flow between trading parties such as business partners and the building and maintenance of trust were fundamental functions of those pre-modern mercantile networks that were woven along ethnic, (homeland-) associational, and other community-building lines. The emergence of cross-regional, indeed global, networks of trading colonies was the culmination of a development that began with individual settlements in cities strategically located for trade outside of the original settlement area of the group in question. In its organization, this "interrelated net of commercial communities,"² with its strategically located communities within a possibly global trade and settlement network, combined structural stability with personnel mobility. This enabled the merchant diaspora³ to control or even monopolize certain branches of (long-distance) trade⁴ – although, in comparison to (semi-) state-organized trading companies, it had hardly any opportunity to exercise formal constraints on its members. The traders thus promoted the foreign trade relations of a city or a country and its integration into a constantly expanding world economy. As a consequence, the turnover of goods from ports as well as the customs and tax revenues associated with it increased and mediated techniques of trade and business management that until that point were still not widespread. In view of these advantages, the local political elite in many cases granted the merchants of such minority communities protection and privileges – not only in the economic sphere, but also, for example, in the area of religious practice or the more-or-less limited internal self-administration of their colonies.

One such global trading network was that of the Armenian merchants of New Julfa (Arm. Nor J̌owła) near Isfahan. From the 17th century until 1740s, the Armenian merchants of New Julfa dominated the Persian raw silk trade and were also prominently involved in international East-West trade - especially between India, Persia, and Europe - of silk, textiles, precious stones, and other luxury and consumer goods. Their trade and communications network stretched from Persia to India, and then on to Southeast Asia all the way to Manila, Canton, and Tibet in the east and across the Middle East, Anatolia and the Levant to the European ports of the Mediterranean Sea (in individual cases even to Mexico) in the west and across Russia as far as Sweden, Amsterdam and London in the north. In addition to the administrative, economic, and intellectual and cultural center in New Julfa, the network also had a large number of commercial branches or colonies. In the course of their development, they became center of attraction for Armenian migrants and sites of Armenian cultural, religious, and political life.

The following will introduce the origin and development as well as the structure and function of this early-modern transcontinental trade and communication network of the Armenians. Regional priorities are, on the one hand, the central hub of the network, New Julfa, and, on the other, the trade route via the Moscow state and the Russian Empire, which tried in the 17th and early 18th century to become a hub in the international raw silk trade.

The emergence of the Armenian trade network of New Julfa

The rise of Armenian merchants in international East-West trade took place even before the middle of the 16th century. On the one hand, they had benefited from the rising demand for luxury goods and raw materials in Europe and, on the other hand, from the obstruction of the direct European-Oriental trade by the expansion of the Ottomans. They became middlemen, especially in the silk trade between Persia and the Levant. At that time, especially the original Julfa (Arm. J̌owła) located on the Arax River, which was strategically situated on the Silk Road through the South Caucasus, experienced a rapid boom.⁵ The city and its inhabitants achieved great prosperity, which they owed primarily to the trade in raw silk. The Julfa merchants, for example, traded with the merchants of the Levant trade and with the English Muscovy Company.⁶ In the course of warlike conflicts between the Ottoman and Persian Empires, Shah Abbas' I (1571–1629)[] deported, in addition to the population of a number of regions of the historical Armenia, the inhabitants of Julfa and some of the surrounding trading towns. While the rural population was displaced to the silk-cultivation region, among other places Gilan, the Shah ordered the city dwellers and especially their wealthy upper class to settle in the new Persian capital of Isfahan. After their coexistence with the Muslims there had proved to be too difficult, the Armenian merchants finally found a place to settlein the suburb, the so-called New Julfa, which had been specially built for this purpose.⁷

Armenians played an important role both in the economy of the Persian Empire and in the political affairs of the Safavids. The Julfa Armenians were a kind of "service gentry" to Abbas',⁸ acting, for instance, as the Shah's envoy abroad. They also maintained relations with the Ghulams, Caucasian converts who controlled the silk growing areas in the north of the country.⁹ The monopolization of the Persian silk industry in favor of the crown was not only of special importance for Abbas' politics, but also formed the heart of his relations with the Armenians. In 1619, the Julfans were able tooutbid the English East India Company at an auction and thereby obtain control over the silk export. They subsequently lost their monopoly, however, under Abbas's successor Safi (d. 1624).¹⁰

The role of Armenian merchants in the international raw silk trade

Due to Persia's strategically favorable location between India and Europe, the country played an important economic role in the early modern period, especially in European-Oriental transit trade. In addition, Persia also exported its own products, above all raw silk from the cultivation areas in northern Iran. In a good year, Iran exported about 5.000 to 6.000 bales (100 kg each) of raw silk.¹¹ The main driver of the Safavids' export and transit trade was the chronic shortage of precious metals in Persia, which therefore depended on the exchange of its (re)exports for gold and silver with Europe. The Julfa Armenian merchants played a special role in this: According to one estimate, they brought about 200.000 gold ducats to Persia¹² with every caravan from the Levant.

The most important export route for Persian raw silk to Europe was the LevantPassage, which ran along various routes. One possibility was the overland route to Bursa and Istanbul and then through the Balkans or via the sea to the Adriatic. Another route led to Aleppo and from there to the Port of Iskanderun or, finally, over land to Izmir and from there across the Mediterranean Sea to Venice, Livorno, Marseille, and other European port cities. In the 16th century, Aleppo became the main hub for trading Persian raw silk, where Armenian merchants came into contact with European traders. Izmir, however, gained in importance in the following century. Over this period, the volume of Persian raw silk exports over the Levant route increased from an estimated several tens of thousands of kilograms by the year 1500 to about 200.000 kg by 1600. In the early 18th century, it was already up to 500.000 kg.¹³

The weakened Portuguese trade control over the Arabian Sea in the 1620s and the consolidated power of the Safavids in Persia and the Moguls in India created favorable conditions for the expansion of Armenian-Oriental trade.¹⁴ At that time, the Armenian export trade started through the Persian Gulf and around the Cape of Good Hope, which was of little importance due to the length of this route and the high transport costs.¹⁵ The Armenians continuously sold more Persian raw silk than the Europeans, whose sea trade in the Indian Ocean, around the Cape of Africa, and the Mediterranean did not significantly impact the Julfan caravan trade, which was largely conducted over land. In the 17th century, the latter achieved a de facto monopoly status in the Persian-European silk trade. Along the Russia route, for example, practically all the traders involved in this branch of the economy in the late 17th century were Armenians. Around the middle of the 18th century, their share in the transit trade in raw silk was still 60–70 percent.¹⁶ Through their trading activities, the Armenians not only promoted New Julfa's Indian-Persian-European silk trade, which became more and more important in the early modern period, but also contributed to the material and immaterial cultural transfer between Asia and Europe through their activities as merchants, translators, and diplomats.

Structure and functioning of the Armenian trade network

The structural basis of the social, political, and economic activities of the Julfans was the patriarchal extended family. This structure was also the basis for the administration of the municipality of New Julfa, which was privileged by the Shah and comprised some 10.000 to 30.000 people in the 17th and 18th centuries.¹⁷ It also underpinned the communication and trading system of New Julfa's merchants. This "central institution of pre-modern Armenian society",¹⁸ which was managed by the oldest living male member of the family, was able to accommodate several hundred people. As a result, it enabled some family businesses to survive for centuries. Furthermore, the high degree of social control and mutual trust as well as the concentration of capital within the extended family favored the success of the trading companies in a risky pre-modern long-distance trading business.

Nevertheless, the trading companies of the Julfans were not limited exclusively to the family business. They also made use of the commenda system in their long-distance trade, which in the Middle Ages and in the early modern period was widespread in large parts of Asia as well as Europe and probably came from the Islamic tradition. This system was based on the division of labor between a financier and a factor or commenda agent. The financier, who provided the capital and/or goods for the trade expedition, came from the elite of the Khawajas (Pers. xâje), i.e. the merchants and male heads of the wealthiest and most influential extended families. The factor or commenda agent was either a younger family member or another Julfan trader with little personal capital. According to the concluded commenda contract and the instructions of his "master" in New Julfa, he was trading in the latter's name in trading operations in Surat, Batavia, Venice, St. Petersburg, and elsewhere. At these branch offices of the family business, he essentially functioned as a subcontractor. In general, the factors were used globally rather than regionally. They were able to accumulate mercantile, linguistic, and regional knowledge through repeated rotations between the trading branches of the individual family companies scattered across Europe and Asia. This advantage made them serious competitors of even the European trading companies.¹⁹ A family business had over 80 to 100 factors operating in its name, which typically doubled the amount of capital available to it in the course of its commercial operations.²⁰ One of the most important tasks of the factor was the accurate accounting and settlement of his commercial activities within the scope of his trading journey. On his return, the factor had to present them to the Khawaja, whose instructions he had to follow in order to make financial investments and buy and sell goods abroad. The Khawaja and the commenda agent kept in touch via letters using an extensive courier system. This information network connected the commercial clients and financiers with their partners and employees. It also connected the numerous outposts and settlements of Julfan merchants all over the world with each other and, above all, with New Julfa, the main axis of capital, goods, information, and people.

The regular correspondence of the traders, but also of the Armenian clergymen, between the center and the periphery served not only to provide information about the current market situation and the political situation on-site, but also to spread rumors about other merchants and commenda agents, their behavior, their reliability, and their reputation. In light of this form of social surveillance, it was in the factor's self-interest to behave in accordance with his master's instructions, even far from home, and not to deceive him. Damage to his reputation would have jeopardized his future commercial activity.²¹ These commercial travelers received their training, on the one hand, from older family members; on the other, the Armenian community in New Julfa had a special commercial school. Located at the Monastery of the Redeemer and under the direction of the schoolmaster Kostand Jughayetsi, about 300 pupils were taught there in the 1680s.²² Jughayetsi's so-called handwritten "Trade Compendium" was not only used as a textbook at this school, but also served as a manual for Armenian merchants. This and other trade manuals in the Armenian language, some of them in printed form, provided Armenian merchants with information on weights, measures, duties, prices, trade practices, and legal conditions in a variety of European and Asian cities and in Egypt and East Africa.²³ The most famous of these works is probably the trade manual of Ġowkas Vanandec̕i (1650-1718), which was published in 1699 in Amsterdam.²⁴

The commenda system proved to be an ideal instrument for the global expansion of Julfan trade. By employing commenda agents, it was possible to expand the family business beyond the boundaries of kinship within the extended family.²⁵

The Khawajas controlled not only the economy of New Julfa, but also its political and social community life. The heads of the twenty districts of New Julfa recruited from their ranks, constituted, together with the Kalāntarān appointed by the Shah (Pers. kalāntar), a kind of mayor who was responsible for financial, policing, and other tasks and usually of Armenian descent.²⁶ The so-called merchants' assembly took over administrative tasks in the Armenian suburb and also acted as a jurisdictional and supervisory authority for the traditional trade and contract law of the Julfans. On the other hand, the municipal assembly, which was composed of secular and ecclesiastical authorities of New Julfa, decided on legal questions in non-commercial matters. In addition, as required, Julfan merchants convened in the branch offices scattered throughout Eurasia "mobile courts" consisting of members of the local Julfan merchant community. They decided on the legal disputes between merchants under Julfan commercial law and corresponded with the merchants' assembly in New Julfa.²⁷

The historical and social science literature on diaspora research has repeatedly stated that the economic success of a trading diaspora was essentially based on its socio-economic (ethnic, cultural and/or family) networks, its linguistic and cultural knowledge as well as on the mechanisms of inner solidarity and trust.²⁸ Rarely, however, has there been an examination of the foundation of the aforementioned trust or how it even came about. Indeed, the commonality of shared cultural practices, such as religion and language, does not seem to sufficiently explain the trust and cohesion within the Julfa merchant community.²⁹ In fact, the merchant and municipal assemblies as well as informal and semi-formal institutions in the form of a closed and dense network, in which commercial, family and church interpersonal relationships were interwoven, created the basis for mutual trust within the "coalition" of the Julfa merchants.³⁰ These institutions made long-distance trade possible by facilitating social control. Toward this end, there was a continuous flow of information between the center and the periphery, within which the merchants' assembly acted as a knowledge hub. The transmission of information about the reputation of an individual trader and the imposition of penalties³¹ in the case of any opportunistic behavior through the merchants' assembly in New Julfa or the "mobile courts" in the commercial branches, intensified the pressure to conform. This, in turn, increased the degree of cooperation and solidarity within the Julfa "coalition". As result, the Julfan merchants were able to reduce the transaction costs of their worldwide trading companies, which also gave them a competitive advantage over representatives of the European trading nations.

European trade networks and the Armenians of New Julfa

Intermittently, the Armenian merchants of New Julfa enjoyed intensive business contact with representatives of the European trading nations. Such relations could develop in the port cities of the eastern Mediterranean, where European merchants bought the goods brought by the Armenians from India and Persia by land and carried them further west (unless the Armenians themselves transported the goods on the ships of European trading companies), in the branch offices of the Armenians in Europe, or even as business partners engaged in joint ventures. One example is a merchant from Julfa who came to Marseille from Venice and entered into a partnership with one of the city's leading silk importers in 1629. He subsequently obtained a patent from Louis XIV (1638–1715)[]on the monopoly of trade brokerage for Armenian and Persian merchants in Marseille.³² Armenian merchants also emerged as money lenders, for example to the Dutch East India Company (VOC). The Julfans came into contact with representatives of the VOC for the first time in Aleppo in the early 17th century. The Dutch engaged the Armenians from the very beginning as translators, among other things.³³ Nonetheless, the VOC wanted to circumvent Armenian mediation in the Persian silk trade and gain direct access to the country's silk production areas, which they rarely succeeded in doing. The Armenians represented serious competition for the VOC and the English East India Company not only in the raw silk trade, but also in the indigo trade. As earlier as the 16th century, the Levant trade had become the stage of a bitter competition between representatives of different trading companies and nations. The Armenian merchants were also involved in this rivalry , which intensified in the second half of the 17th century, when the Armenians began to actively participate in maritime trade between Southeast Asia, India, and the Persian Gulf. As a consequence, the English and the Dutch saw their business being disrupted in this region. After the English failed in their attempt to redirect the Armenian-mediated trade via the Levant to the Cape route and to thus take control of it, the East India Company tried to cooperate with the Julfans. According to the agreement concluded in London in 1688 between the East India Company (EIC) and the New Julfan Khawaja Panos Kalantar, the Company granted Armenians in India the same privileges as English merchants. In return, the Armenian side promised to handle its trade in raw silk and textiles with the EIC in the future.³⁴ This agreement, however, was not advantageous for the English, since most Armenian traders were not willing to cooperate with the Company and abandon their traditional land trade route to the ports of the Levant in favor of English dominated maritime trade. The raw silk trade consequently remained in the hands of the Armenians. When the English domination of Bengal in the middle of the 18th century consolidated, the EIC began to restrict the privileges previously granted to the Armenians, leading many of them to leave the subcontinent.³⁵

A decisive contribution to the success or failure of the Armenian trade network thus came not only from "internal factors" such as an efficient communication network and the mutual trust within the Julfan "coalition", but also from the political circumstances on the ground and the opportunities they offered the Armenians.³⁶ Armenian merchants were repeatedly supported and protected by powerful interests in Europe and Asia and often preferred to other - even local - merchants. In the Safavid Empire, they were able to rise to become the economic elite and not only achieved the export monopoly on raw silk, but also played an important role in the budget of the court, which they sometimes financed. They even undertook diplomatic missions in the name of the Shah.

In some port cities of the Mediterranean region, Armenians as well as Jews and other "foreign" merchants at times benefited from the respective legal situation. One example is Livorno, which became a free port around year 1600 and thus a duty-free zone.³⁷ In Venice, where Armenian merchants had been selling their goods since the 12th century and had their own trading yard, their number increased after the introduction of tariff exemptions for the import of Persian raw silk in the 16th and 17th century. Further privileges followed, which were especially extended to the Armenian merchants of New Julfa. Venice, as the site of the oldest Armenian printing press, also gained great importance for the Armenian trade, information, and cultural network. One of the most famous Julfan families, the Schahrimanyans, granted the Republic of Venice a loan of 200,000 ducats to support its participation in the so-called Turkish War (1684–1699).³⁸ Armenian merchants also received trade privileges in France under Armand Jean du Plessis de Richelieu (1585–1642) and Jean-Baptiste Colbert (1619–1683), who declared Marseille a free port in 1669. Although the local merchants protested against the renewed arrival of Armenian and Jewish merchants in the city, both Colbert and Louis XIV believed that these foreign merchants contributed more to the good of France than the Marseillais themselves.³⁹ After Colbert's death the Armenians, like the Jews, faced repressive measures in France and the Armenian community of Marseilles – which besides merchants also housed craftsmen and translators – shrank.

The Russia route in the Armenian trade network

In the 17th century, the Julfan merchants looked for an alternative route for the export of raw silk and other oriental goods to Europe, mainly due to the repeated interruption of the Levant route by Venetian-Ottoman and Ottoman-Persian conflicts. The decision was then made to take the route via Russia, which crosses the Caspian Sea to Astrakhan, and continues up the Volga in the direction of Moscow, and from there to Archangelsk at the White Sea, the country's most important seaport for foreign trade with Europe at the time. As a result of the Julfans' negotiations with Swedish king Charles XI (1655–1697), the Baltic Narva served at the end of the 17th century above all as export port for Armenian traders on their way to Sweden, London, and especially Amsterdam. Around 1700, when the Volga trade route had become an important alternative in East-West trade with Persian raw silk, its export via Russia amounted to around 100.000 kg.⁴⁰

From the late 17th to the middle of the 18th century, the Armenian merchants held an almost unrivalled position in the Oriental trade of the empire. Here, far-reaching concessions in economic as well as legal fields played an essential role. They were based on the pacts of the Russian tsar Aleksej Michajlovic (1629–1676) with the Julfan merchants from the years 1667 and 1673. Therein, Russia granted the Armenian traders the monopoly on the raw-silk transit trade along with a number of advantages, which were in clear opposition to the "New Trade Statute". Likewise issued in 1667, this decree considerably restricted the activity of European merchants in Russia.⁴¹ As a motive for privileging the Julfan merchants, both the legislators and the Armenian representatives emphasized the growing tax and customs revenues that the state received through this trade.⁴² However, in the initial years after the conclusion of the agreements with the Armenians, their transit trade via Russia was quite limited. It was not until 1676 that the raw silk transit of the Armenians got under way. In this year, the Dutch-Russian merchant Koenraat van Klenck (1628–1691) was able, despite the protest of the Moscow merchants, to induce Tsar Fjodor III. (1661–1682) to restore the rights of transit granted to the Julfans in 1667 (especially Amsterdam) to Western Europe and to direct trade with Europeans in Archangelsk, which had been restricted in 1673.⁴³ Meanwhile, European powers also tried to profit from Armenian transit trade. First and foremost, this meant the Swedes, who had already tried to divert Persian trade from the White Sea to the Swedish Port of Narva at the Baltic Sea since the middle of the 16th century. Sweden did not succeed in this regard until 1687. Due to the missions of Ludvig Fabritius' (1648–1729), the country was able to obtain the right of transit via Narva for merchants from Persia. As a consequence, Julfa merchants became the pioneers of Russia's new foreign trade route. Around this time, the transit trade started via Narva, which was replaced as a transit port by St. Petersburg in 1708.

As a condition of their transit privilege, the Armenians were obliged to export all Persian raw silk in the future only via Russia and not to use the old trade route via Anatolia and the Mediterranean Sea. This also meant that the tsardom was to become the focal point of the international silk trade. Armenian merchants, however, never obeyed this provision. Moscow merchants repeatedly protested, claiming in their petitions the losses incurred by the Armenians in the activities of Russian merchants as well as the treasury.⁴⁴ The tsars, however, usually defended the Armenian merchants against the demands of the Russian merchants to restrict Armenian trade. After the Armenians continued to flout the provisions of the treaties of 1667 and 1673, however, the Julfan merchants were finally put on an equal legal footing with the other foreign traders in Russia in 1719. Nevertheless, in the course of the 18th century, the trade of Armenian merchants in the Orient grew considerably due to the Russian Empire. Where the average annual volume of raw silk in transit between 1676 and 1685 was 12.032 kg,⁴⁵ it rose to over 30.000 kg in the period between 1723 and 1734 and even to 79.673 kg between 1743 and 1747, before sinking sharply again in the middle of the century.⁴⁶ Armenians, though, still dominated the raw silk trade in and through the Russian Empire until at least the middle of the 18th century, even if their share of the silk traders decreased overall.⁴⁷

Especially from the 1730s onwards, the activity of Julfan merchants in the Russian silk trade declined in favor of the Armenians living in Astrakhan. The city had had an Armenian settlement since the Middle Ages in near the mouth of the Volga on the Caspian Sea. It grew after the Moscow conquest in the 16th and particularly in the course of the 18th century through the immigration of Armenians from the South Caucasus and the interior of Persia. In the course of Oriental trade, this port city developed into the most important center, not only for trading activities, but also for the cultural and political life of the Armenians in Russia.

From a legal point of view, the Armenians of Astrakhan enjoyed extensive economic privileges as well as freedom of religion and the self-government of their own colony.⁴⁸ In 1746/1747, they were granted permission to establish their own court, whose jurisdiction extended to other Armenian communities, before they received their own so-called "Armenian Magistrate". The Armenian court functioned on the basis of a book of statutes compiled in the middle of the 18th century. Combining elements of the medieval codex of the Mxit'ar Goš (1120–1213), as well as Armenian customary law and laws of Russian law, it regulated criminal cases and family and commercial law. Due to their special legal status, the Armenians were exempted from registering in the municipal estates and, in addition, from the poll tax, municipal and other fees as well as from the obligation to quarter soldiers in their homes.⁴⁹ Behind these privileges was the government's desire to promote Russia's Oriental trade and to attract additional Armenian migrants to Astrakhan, who made significant capital investments in this trade. In the late 19th century, an important part of the social, cultural and political elite of the Armenian diaspora of the Russian Empire still lived in Astrakhan, whereby many of the Armenian inhabitants belonged to the merchant class as well as to the civil servant class, the intelligentsia, and the nobility⁵⁰.

The downfall of the Armenian trade network of New Julfa

In the 18th century, the early modern Armenian trade network lost its importance and finally vanished altogether. On the one hand, this was due to increasing competition from local merchants and trading companies, which over time led to the disappearance of Armenian dominance in certain areas, in particular long-distance trade. On the other hand, the local economic and political situation also played an important role in the development of the network and its outposts. The trade and communication network of the Armenians of New Julfa never recovered from the demise of its central hubs. In 1746–1747, Shah Nader Afshar (1688–1747) bled the suburbs dry through astronomically high taxes and then plundered them with his soldiers. Beyond these events, the uncertain trade routes to and from Isfahan and the abuse by corrupt officials during Nader Shah's reign led to a massive exodus of New Julfan Armenian merchants. They left the region to the peripheries of their network such as India, the Mediterranean, and Russia.⁵¹ After the loss of its linchpin, this network proved to be untenable. Up until the 19th century, the activities of Armenian traders in many parts of the world were largely absorbed into the local economic structures.

Tamara Ganjalyan