'Second Memorandum as to Persian Government Loans' [‎54v] (2/6)

4. An important transaction that may next be
described was the issue in July 1911 by the
Imperial Bank of Persia on behalf of the Persian
Government of a public 5 per cent. Sterling Loan
of 1,250,000L
The Persian Government specially assigned to
this loan, subject only to the existing prior charges
in respect of the Anglo-Indian Loan,' 1 ' the full
net Customs receipts of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , including
those of Bushire, Bunder Abbas, Lingah, Moham
merah, and Ahwaz, agreeing at the same time that
these receipts should be made payable direct to the
Bank. In the event of the Customs receipts being
insufficient, the deficiency was to be made good
“ from other sources of Government revenue,” and
further from the telegraph receipts (subject to a
prior charge on those receipts up to 1928 on account
of the Anglo-Indian Loan). The loan, which was
issued to the public at 9Gi per cent.,! was redeem
able at par at any time after 191G after six months’
notice, and a cumulative sinking fund of one-half per
cent, was to be provided in respect of it commencing
in 191G, and extending over a period not exceeding
50 years.
It was stated in the prospectus that “ the annual
“ amount required for the service of the loan is for
“ interest and for the prior charges until March
“ 1913 the sum of 78,214L, and from thence until
“ 191G the sum of 92,779Z. Thereafter the annual
” amount required for interest, amortisation and
“prior charges is 99,029Z. until 1928 (when the
“ prior charges cease), and onwards front that date
“ the sum of 68,750Z.”
According to the contract with the Persian
Government, the Bank were authorised to pay off
their own debt out of the proceeds of this loan,
and to hold the remainder at the Government’s
disposal.
The arrangements generally were settled in
communication with this Office .and the Foreign
Office, and a letter from the Foreign Office
(Appendix II.), taking cognisance of the arrange
ments and promising a measure of diplomatic
support, was embodied in the prospectus.
5. In February 1912 after Mr. Morgan Shuster
had left Tehran, the position of affairs in Persia
being extremely critical, a proposal was once moref
brought forward for a joint Anglo Russian advance
to the Persian Government. It was uncertain at
first whether its amount would be 400,000?. or
200,000?., and the Secretary of State in Council
was prepared to advance from Indian revenues
sums of 100,000?. or 50,000?., whichever might
be found necessary. Ultimately the amount of the
joint advance was fixed at 200,000?., and a cheque
for 50,000?., the Indian portion, was sent to the
The Persian Government 5 Per Cent.
Loan of 1911 (£1,250,000).
Letter of Imperial Bank of Persia to
Foreign Office, 1st June 1911.
P. 3773/10.
* Viz., 15,714/. Is. 10(i. a year till 20th
March 1913, and 30,278/. 12,s. 7d. a year
from 21st March 1913 to 20th March 1928 ;
vide Appendix VIII. (2) of the Memorandum
dated the 17th October 1910.
Contract dated 8th May 1911.
P. 3773/11.
t It is quoted (16th November 1912)
at 90-92 xd.
Prospectus, dated 11th July 1911.
P. 3900a/11.
Anglo-Russian Advance (£200,000).
t Vide paragraphs 52, 53, 55 and 56 of
the Memorandum, dated the 17th October
1910.
Letter of 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. to Foreign Office,
7th February 1912.
P. 372/12.