'Adminisistration [Administration] Reports 1931-1935' [‎90r] (179/416)

They were however unable to dispose of their stocks of piece goods which
were ultimately transferred to Shiraz.
For six months before March when Vneshtorg interests were taken over by
the Bureau-Pearse their transactions had been insignificant and the rupture in
commercial relations with Persia had little effect in Bushire. Neither the
Russians nor their trading methods had ever enjoyed a great measure of popu
larity locally and the failure of yet another campaign was a matter of general
satisfaction.
The withdrawal of the Vneshtorg staff was cldsely followed by the closure of
the Russian Bank which had only been in operation for thirteen months.
Although the embargo on business with the Russians was withdrawn in
August and one or two representatives have visited the town since, they have
done practically no business beyond forwarding consignments up country and
retailers in town are experiencing difficulty in disposing of their Russian stocks.
(c) Italian .—The extent of Italian activities in Bushire has not so far been
serious and they have been confined to satteens, woollen goods and blankets.
Most of the goods have, until now T , been transhipped to British bottoms at Port-
Said. In recent months however, the Italians have declared their indention of
instituting a two monthly service in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. and the first steamer dis
charged goods at various ports during February 1934. In view of the well
known practice of the Italian Government to subsidise its shipping this invasion
constitutes a serious menace to the British lines which now carry the bulk of the
Gulf trade.
While the introduction of measures for the protection of British shipping
is primarilv a matter for agreement amongst the shipping interests themselves
it is also of national importance and it may therefore be useful to reiterate the
following points which appear to affect our interests adversely :—
( 1 ) Unrestricted Imperial Cabotage.
( 2 ) Unchallenged adverse international trade balances.
(3) The sale of old British shipping in serviceable condition to under
cutting competitors.
(4) The unrestricted engagement of foreign crews on ships flying the
British flag.
Financial .-—The disposal abroad of Persian produce at uneconomic prices
and the general stagnation in trade together with heavy import duty and taxa
tion on goods coming into the country rendered money consistently tight
throughout the year. The critical financial position of many of the merchants
led to the suspension of credits by the Banks except in isolated cases and as a
result of the general lack of confidence practically all transactions in town are
now conducted on a cash basis.
No bankruptcies were actually declared but the failure of several firms in
Shiraz inflicted loss on a number of Bushire merchants and the serious difficulties
experienced by one business house became a matter of grave concern to its
numerous local creditors.
The Imperial Bank of Persia and the National Bank of Persia continued
to operate under British and German management respectively. The high
reputation enjoyed by the former combined with its greater facilities for con
ducting foreign business are believed to have given it the advantage over its
rival, which however probably obtained the custom of German merchants,
shipping by Hansa Line steamships.
Communications and transport .—The post and telegraphs, sea, and air com
munications work efficiently to keep Bushire in touch with the outside world but
the poor state of the roads in the vicinity do much to preserve its isolation from
Persia.
Weather and wear are a strong combination against poor roads and the cost
of maintenance of long stretches is prohibitive.
The road from Bushire to Shiraz is the only real link with the interior and
attempts are occasionally made to keep it in repair. A commendable effort to