File 3874/1908 'Railways:-Trans-Persian Railway.' [‎190r] (381/536)

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2 Neither Persia nor Russia can participate in building railways by subscribing
capital but the Russian Government are ready to accept His Majesty’s
Government’s proposal, if the financial side of the question can be solved with
British assistance.
Public opinion would of course ridicule the idea of building a railway, of which
two-thirds would be in the Russian sphere, at British expense.
3. The question of a loan to the Persian Government is intimately connected with ' u
that of a Railway Concession.
Apparently the meaning of this is that a loan is to be made to Persia, on more
favourable terms than would otherwise be the case, in return for the grant of a Railway
Concession. The upshot of such a provision as this is that a proportionate addition
must be made to the cost of the railway, which is to be built at British expense. _
Mr. Marling has just reported that he is by no means convinced that the Persian
Government are in ileed of a considerable loan.
4. The lines in the Russian sphere should serve to maintain and develop Russian
interests (a) by the chronological order in vhich they are built; and (&) by
manipulation of Tariff rates on the Mohammerah line.
Assuming, solely for purposes of argument, that the financial difficulty had been
overcome, His Majesty’s Government might meet the Russian Government to a certain
extent by agreeing that construction should be carried out from north to south, and
not vice versd, thus affording prior opportunities to Russian commerce. ^ It would be
out of the question to assent to the discrimination of 1 ariff rates in favoui ol
Russian goods.
Moreover, the influx of British goods which the Russian Government appear to
contemplate with anxiety, would be more than outweighed by the advantages Russian
trade would derive through connection with the sea.
5. Russia would desire to build branches from Resht, Enzeli, and Tehran. The
necessity of a line from Askhabad to Meshed must likewise be considered.
It would perhaps be possible to induce the Russian Government to defer the
Askhabad-Meshed line for several years, as it would be sure to evoke great opposition
at present in India and Afghanistan. Eventually the Russian and Indian systems are
likely to be linked up, but precipitate action such as the construction of a line to
Meshed might have the opposite effect of that desired, and lead to a recrudescence of
mutual mistrust. As, however, the Russian Government have intimated their views in
regard to this line, we might, in replying, state that we consider there are serious
objections to raising the question of construction in Eastern Persia at present; that
when the time comes a British line might be made from Lingah or Bunder Abbas along
the important trade route to Kerman; but that this is an aspect of the question which
does not present itself in dealing with the proposals regarding a line from Julfa to
Mohammerah.
Perhaps it would be well to prepare a Memorandum for communication to
M. Isvolsky, showing the misunderstanding which has arisen, and setting forth the
financial difficulties involved in the Russian proposals.
Foreign Office, September 29, 1908.