'File 60/20 I (C 93) Imperial Bank of Iran: Bahrain, etc' [‎97r] (194/409)

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V
XHIS DOCUMEN , i IS I HE PROPERT Y OF HIS BRITANNIC MAJESTY'S GOVERNMENT
PERSIA. January 16, 1934.
CONFIDENTIAL. ^ hj'hly S ection 7.
i E 356/356/34 ] No. 1.
Sir R. Hoare to Sir John Simon.—{Received January 16, 1934.)
(No. 612.)
Sir, Tehran, December 30, 1933.
I HAVE the honour to inform you that the chief manager of the Imperial
Bank of Persia has shown me copies of correspondence exchanged during the last
two or three months between the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. and the bank's London office
respecting the importation of silver into India across the Indo-Persian land
frontier.
2. The gist of this correspondence is to the effect that the bank have pointed
out to the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. that a large and lucrative trade is taking place across this
frontier in silver bullion, which thereby escapes the Indian customs duty; that
the National Bank and numerous firms engage freely in this trade; that they (the
Imperial Bank) have been invited to undertake this business on behalf of at least
one customer, and that they wish to know whether the Government of India
approve of their doing so. The replies from the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. , if I remember
aright, avoid any direct expression of either approval or disapproval, but simply
state that the bank should not rely upon the continuance of the conditions which
make this trade possible.
3. The anomalies and abuses which arise from the non-application of the
Indian customs tariff to goods imported over the Persian frontier are, of course,
onlv too well known to the Government of India, who have had under considera
tion for many years the question of establishing customs barriers upon the land
frontiers of 'India. During the past year His Majesty's consul-general for
Khorasan has drawn frequent attention to the use that is made of the Zahedan
route, and particularly of the parcel post service, for the entry into India of
goods and money that certainly do not originate in Persia. I have little to add
to the information that he has already supplied or that is already known to the
Government of India, except that it has come to my knowledge that at least one
Indian merchant (a copy of whose card I encloseC)) has found it woith his while
to set up in business in Tehran for no other real purpose than to undeitake the
importation of silver bars from Belgium by parcel post and their re-expedition
to India via Zahedan. . ± ± ±
4. I have at present no exact figures illustrating the extent oi this ti arnc,
but Mr Wilkinson is endeavouring to obtain some from the Persian Customs
Administration. These figures will, of course, only show the amount ot silver
re-exported from Persia. It is possible that a certain amount is also exported,
that is to say smuggled, out of the eountry. In the meanwhile, Major Daly s
diary for November states that consignments of 348,000 lb. and 4,550 lb
left Zahedan on the 7th and 19th November respectively. Even if oz. should
be read for " lb " in the case of the first consignment, as seems more probable, it
Is obvious that, with a duty on silver of 7 annas 6 pice an ounce, the Government
of India lost revenue amounting to over H lakhs One lakh is equal to one hundred thousand rupees of rupees Indian silver coin also widely used in the Persian Gulf. as the r®®™ ° f ®
single transaction. In addition, large quantities of si \ goo s aie ^ f,, nm
shipped to Bander Abbas, often out of bond at Bombay, and tra "ff ied
thereby road to India by way of Kerman and Zahedan The transport
by this route no doubt affects to some extent the profits to be gained by the ev ^
of customs duties, and at present it is perhaps only upon bullion «
of small bulk and high value that this profit can be earned, " ^ ^
transport conditions are rapidly improving in Persia and he mpeDHgof
railway between Zahedan and Nok Kundi, if it takes place, should make this loute
•n-ffiSMSL. ho. ,h. (JUMtion Of «»*, .1 .0 — ? »» »
the land frontiers of India has progressed since , f^e
discussed the question in their despatch to the Seci e ary
( 1 ) Not printed.
[15 q-7]