Considerable progress has been made in recent years in studying the economic history of Persia in the nineteenth and early twentieth centuries. However, scholars have continued to feel the paucity of adequate source materials for such studies. The papers of Amin al-Zarb, a leading member of one of the great merchant families of the nineteenth century, came to light in the 1960s, suggesting that family papers of the merchant houses, if they could be traced, could offer an enormously valuable window onto economic activities and developments in Persia during this period. Few such family collections have turned up, however. The papers of Hajj Rahim Ettehadieh, a member of a merchant family whose activities in Azerbaijan and Tehran can be traced back at least to the last quarter of the nineteenth century, are not as rich as the Amin al-Zarb papers. Nonetheless, if carefully utilized, they have the potential of offering some intriguing glimpses into the activities and attitudes of the merchant community.

The Arab conquest of the Sasanian empire (633-651 A.D.) provided the Iranian peoples with their first extensive contact with Islam. Prior to this, encounters between Zoroastrians and Muslims had generally been restricted to the lower reaches of the Mesopotamian plain. More importantly, this conquest installed Islam as the religion of the new rulers, replacing Zoroastrianism, referred to as the good religion (Phl. weh dēn) by its followers, which had enjoyed royal favor under the Sasanians. The conquest of the Sasanian empire resulted in large numbers of Arabs entering and eventually settling on Iranian territory. The presence of these Arabs on the Mesopotamian plain and Iranian plateau, and their eventual settlement there, naturally resulted in coexistence and social interaction between Muslims and the native Zoroastrians. This interaction would initially have been slow, as the Arab troops were confined to military garrisons (Ar. Amşār).

In the 18th century, rather remarkably, Iran formed a navy. Up to that time the shahs of Iran had relied on other powers to maintain security in the Persian Gulf. The dominant naval power in the gulf during the 16th century was Portugal, while the Dutch, and to a lesser extent the English, were supreme during the 17th and the beginning of the 18th centuries. Because Iran's southern borders were safe and secure after the conquest of Hormoz in 1622, it did not need a navy. Hence, Iran relied for a time on the Dutch and the English to maintain security in the gulf.

English naval assistance in the conquest of Hormoz set the pattern for the next century. This reliance on other powers for maintenance of security in the gulf proved to be a workable policy as long as there was no real threat to Iran's coastal borders in the south.

Mehdi Qoli Hedayat, Mokhber al-Saltaneh, was born in 1863 into an aristocratic family in Tehran. He was the son of Ali Qoli Khan, Mokhber al-Dowleh, the pioneer in Iranian telegraphy, and the grandson of Reza Qoli Khan Hedayat, the famous historian and teacher of the Qajar period.

Mehdi Qoli went to school at age seven. At fourteen he was sent, in the company of his brother, Morteza Qoli (Sane ‘ al-Dowleh), to study in Germany. His stay lasted a little more than two months. He had intended to study medicine but returned home with his brother when their sister died. Feeling nostalgic for home, he did not heed his father's advice to stay and study. Later, reflecting on this decision, he said, "Alas, that if I had studied medicine I would be a free man and, now, I am bound, bound to a people...." Thus, Mehdi Qoli's education in Europe was limited to learning the German language and sightseeing in Germany and Switzerland.