'P. 1. 2410/1903. Persia:- Financial Situation. Loans.' [‎75v] (155/1056)

9
own personal profits, so that the State will have to repay in
it lias gained in another. It must also be borne m mind that of the ai i
mentioned tire Postal revenue of 6,000/. is the only portion n^reveMeS
he forthcoming for the payment of interest at a fixed date, ^ 'Sed bv
always liable, like those paid by farmers, to delays, arrears, and leductions obtame
private influence. As a matter of fact, none of the interest paid to ns this year has
come out of either Postal or Telegraphic revenue. , ,-1 a tntp wnil i f i
If the svstem of farming the Telegraphs _were abandoned tbe /
eventuallv obtain an increased revenue, but during tbe first few years of the new
system its revenue would he diminished by the mitial expenditure necessary m order
to organize the service properly. M. Nans, who would, I believe, like o g
graphs as well as the Posts into his hands, tells me that with the Lmopean
administration which would he necessary to work them satisfactorily the net profits would
for a good many years fall short of the sum now paid by the Mnkhber-ed-Dov led.
Estimating, however, the future joint revenues of the Posts and Telegraphs at
16,000/. to 17,000/. a-year, which may now be taken as a rough, if variable, tignre, t is
smn would cover the interest and sinking fund of the loan oi 200,000/. made by us m
April 1903. , n _p , ,
The 8,000/. a-year which would represent the interest and sinking fund ior twenty
years on the remaining 100,000/. would, in view of the fact that the Caspian royalties
are not available for three years, and are threatened after that with ^ total or partia
destruction, almost of necessity have to come out of the customs receipts, and, mdee ,
the whole sum of 24,000/. due on the completed loan will probably, as a mat lei of fact,
continue to be paid out of that source of revenue. The Southern Customs, exclusive of
those of Arabistan, brought in last year a total revenue of 200,000/.
I am anxious, however, to make it clear to your Lordship that, while we should be
practically paid out of customs revenue, it is theoretically conceivable that we might be
paid entirely, or almost entirely, out of the proceeds of the fisheries (suppose the
Russians waive their right to impose duties on them), out of the Postal and Telegraph
revenues, or M. D’Arcy’s oil royalties, should these become lucrative, or even out of
the proceeds of the Maliat, if the land tax under the new reform scheme were to yield
a sufficient surplus. Thus the interest due to Russia is, as I had the honour to explain
in my despatch No. 133, often paid in part out of receipts on which the Russian Bank
have no lien, such as those of the customs of the Gulf. The interest on both debts is in
fact always liable to be paid out of such sources of general revenue as are most handy
at the particular moment when it falls due, the special securities mentioned being only
ear-marked with a view to default.
If, therefore, your Lordship wishes to make absolutely sure that the debt on the
remaining 100,000/. shall he paid out of the receipts of the Southern Customs rather
than out of any other source of revenue, a stipulation to that effect would have to be
inserted in the contract. The requirements of such a stipulation would render the
negotiations more difficult, and I am not sure that its practical advantage would be
great. The real value of the inscription of the Southern Customs as our ultimate
guarantee is that we have a certain and tangible asset, of political interest to ourselves,
on which we can easily foreclose in case of default. But until default we are not, I
imagine, entitled to require that our interest, so long as it is paid regularly, shall be
proved to have been derived by our debtor from one source of his general revenue
rather than another. I do not know if I have made myself plain ; what I would
respectfully desire to emphasize is the distinction between the money paid and the
guarantees on which its payment is secured, and the, fact that the only certain
sources of revenue of which M. Nans is now able to dispose in order to provide the
interest and sinking fund on the completed loan are the sum of 6,000/., representing
the receipts which he draws on account of the Posts administered by him, and that of
18,000/. which he will have to make up out of his customs receipts.
I inclose for convenience of reference a tabular statement showing the amount of
the various securities and distinguishing between those which are permanent and
certain, and those which are so fluctuating and uncertain as to be considered unreliable
or exhausted for purposes of an advance or loan on business lines.
The Agreement which will be signed, if the completion of the loan on the original
securities is, after these explanations, assented to by your Lordship, is the one of which
I had the honour to inclose a draft in my despatch No. 133 of the 19th ultimo. For the
present I have confined myself to informing M. Nans, confidentially, that I am hopeful
though not absolutely certain that his draft will be accepted by your Lordship, but that
until he is authorized to make me a definite proposal on the part of the Ain-ed-Dowleh,