File 2410/1903 Pt 3 'Persia:- Financial Situation. Loans.' [‎12r] (28/1214)

[This Document is the Property of His Britannic Majesty s Government,]
PERSIA.
CONFIDENTIAL.
[June 20.]
Section 5 .
[ 21975 ]
No. 1.
Mr. Marling to Sir Edward Grey.—(Received June 20.)
(No. 86. Confidential.)
Sir, Tehran, June 3, 1910.
I CALLED on the Persian Minister for Foreign Affairs on the 28th ultimo, and
enquired what impression the joint declaration explaining the wishes of Great Britain
and Russia in regard to the grant of concessions affecting their political or strategic
interests had produced on the Cabinet, and gave his Excellency to understand very
clearly that His Majesty’s Government did not consider that the note required an
answer, and would, indeed, prefer that none should be sent.
Moavin-ed-Dowleh said that internal affairs had occupied the Government so much
that they had had no time to give the note proper consideration, but be thought
personally that they would wish to utilise the opportunity of replying to moot other
questions which they desired to discuss. His Excellency was obviously extremely
anxious not to commit himself, and I could extract nothing from him more definite
than the above, nor would he even hint at the nature of the other topics which the
Persian Government wish to bring forward. The impression produced on me was that
the Government’s attitude towards the two Powers was slightly less favourable than a
fortnight previously. There is nothing surprising in this, for it cannot be expected
that a heterogeneous Cabinet such as the present, with little internal cohesion and
divided on questions of external policy, should for long preserve a constant attitude in
its relations towards us ; hut I fear that a more immediate cause is to be found in the
three incidents which I have the honour to report in another despatch of this date, and
that although the Ministers themselves may recognise that direct responsibility for
these unfortunate occurrences cannot properly be laid at the door of the Russian
Government public opinion will and does take quite a different view, and the Govern
ment will not be strong enough to act in defiance of it. In these circumstances, I am
inclined to believe that it may require some little time before the Government will
think it opportune to approach the two Powers with a view to obtaining the financial
assistance of which the country is in so urgent need.
M. Poklewski, I admit, is not of this opinion, as he has had several occasions
recently of seeing the Minister of Finance, who has intimated that the Government
must have recourse to the assistance of the two Powers at an early date. M. Poklewski,
perhaps, hardly makes sufficient allowance for the strength of popular feeling which
the recent incidents have aroused, and I think that to some extent also the wish is
father to the thought, as he is convinced that our common interests make it desirable
that the Persian Government should be brought to recognise that they can look only to
the British and Russian Governments, and nowhere else, for monetary aid.
While I am disposed to agree generally with this view, it occurs to me that the
acceptance by the Persian Government of the views of the two Powers on the subject
of external financial operations by Persia, as expressed in the joint note of the 7th
April has very much diminished the necessity of preventing the Persian Government
from borrowing except from them, and I submit that there is no valid reason why, m
the event of the Persian Government showing reluctance to apply to the two Powers
for an advance, we should not allow them to obtain it from another quarter, unobjec
tionable on political grounds, such for instance as the financial group now represented
in Tehran by Mr. Preece. • i ; t x ± +
The contingency which I foresee may of course not arise, but I venture to suggest
that it is worth while ascertaining whether, in case it should occur, the Kussian
Government would see any objection to Mr. Preece’s approaching the Persian
Government with the proposals of his syndicate for an advance.
From what I can learn, the straits of the Persian Government for money are
such that the 400,0001. which the Strathcona Syndicate propose to advance will be a
mere “drop in the bucket,” and it will not be long before the Government would be
again looking for financial assistance, and they would then be forced to apply to the two
Governments.
[2781 u—5]