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||Násiri'd-Dín Sháh entered into contract of 50 years duration with British interests that would provide him with an annual payment plus 25% of the profits for the production and sale of tobacco in Persia. Prior to this, in the 1870s and 1880s the country's telegraph and mail systems, its fisheries, and many of its mines were sold to Western, mostly British, interests to support an insolvent Qajar government.
Opposition to this measure, fomented by Russia, Britain's rival, came from merchants and shopkeepers who anticipated higher prices and feared being marginalized if the tobacco trade were to pass into the hands of foreigners. Many of the ulama supported the resistance, in part from fear of foreign influence and some because they owned land, either privately of on religious property, that grew tobacco. Articulated as a struggle in defense of Islam against foreign intrusion, the movement quickly became popular.
The movement first flared up in Shiraz, the centre of Iran's main tobacco-growing region and then Tabriz in the north of the country that was under heavy Russian influence. Isfahan and Mashhad soon followed in popular clergy-led agitation. The protest movement culminated when the ulama declared tobacco itself unclean and smoking religiously impermissible. Ordinary Iranians, frustrated at the mismanagement and misery prevalent in the country, massively heeded the call. People throughout the country gave up smoking. At that time about one-third of the population of 8 million used tobacco.
In January 1892 the shah rescinded the concession and was forced to compensate the tobacco company for its losses. The Qajar government had to take out a £500,000 loan to cover the cost.
The Tobacco Revolt is considered a landmark event in Iran's modern history. It is often seen as the first episode in which common people showed an awareness of a collective identity and were successful in mobilizing disparate groups around a common cause.
[Enyclopaedia Britannica; SUR45-46]