File 1569/1913 'Trans-Persian Railway' [‎229r] (468/594)

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[This Docament is the Property of His Britannic Majesty's Government
[A]
PERSIA.
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CONFIDENTIAL.
[March 19. J
Section 8 .
[12708] No. 1.
Memorandum respecting Trans-Persian Bailway.—Communicated by Mr. Eddison
{Board of Trade).
A CONFERENCE took place on the 10th March, 1913, at the Board of Trade to
discuss with representatives of the British group of the Societe d’Etudes the questions
raised in Lord Errington’s memorandum of the 3rd March. There were present :
Sir H. Llewellyn Smith, Mr. Mar wood, and Mr. Stanley (Board of Trade), Mr. Parker
(Foreign Office), Sir A. Hirtzel and Mr. Brereton ( 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. ), and Lord Errington,
Sir William Bisset, and Mr. F. C. Harrison (representing the British group), together
with Mr. Cecil Baring.
L With regard to possible future continuation of a line beyond Bunder Abbas, so
as to afford through communication with India, it was explained to the representatives
of the British group (and particularly in answer to a question by Lord Errington
whether the portion east of Bunder Abbas would be international or British) that the
idea of foreign participation was probably not necessarily excluded from that section
on the main line so far as it might be within Persian territory, subject to the predomi
nance of British capital and control being secured. Mr. Parker said, however, that if
it was desired to convey some final statement to the Societe d’Etudes as an official
pronouncement the Foreign Office would prefer to have the question put to them in
writing with a view to an official answer.
The break of gauge would probably be made at Bunder Abbas, supposing the line
to be carried on towards India; but Mr. Parker stated that the Foreign Office con
sidered that the question of a connection between Indian and Russian lines should be
excluded from the present discussions, which had in view, in fact, simply a Trans-
Persian railway (and branches) from the Russian frontier to the sea, to be carried out
on their commercial merits.
2. The international distribution of capital and control in building and working
the line was then considered (points 2, 3, and 4 of Lord Errington’s memorandum).
Sir H. LI. Smith said that the practical problem was now a railway from Astara to the
Gulf, which, it was agreed, probably would be found to mean to Bunder Abbas, as
construction to Bushire would prove costly and probably less remunerative. He said
that what the Board of Trade hoped to see was the simultaneous construction of
railways starting from the two termini and meeting at a half-way point— e.g., at
Ispahan. Otherwise, if the construction began at the Russian end and worked south
wards Russian trade would follow it down, and British interests would suffer
immediately and also ultimately, as the Russians would have captured such markets
as there may be. The representatives of the British group agreed that simultaneous
construction was desirable, but doubted whether it could be arranged for.
The representatives of the British group asked wffiether His Majesty’s Government
contemplated two separate companies, with separate capitals and separate boards of
directors. Sir H. LI. Smith said that this was what was intended. He had some
doubt as to the desirability of the proposai to pool receipts on the whole line which the
group had in view. Lord Errington, Sir W. Bisset, and Mr. Harrison pointed out that,
owing partly to the smaller cost of construction of the northern section, and partly to
the greater wealth and importance and the more settled state of the district which
would be served by it, the Russian part of the undertaking was likely to be far the
more remunerative, having a smaller capitalisation per mile and higher receipts per
mile. This they regarded as a very grave objection to the proposed separation of
capital, an objection which would only be removed if a very large development of tiade
appeared in the south.
Sir H. LI. Smith said that the joint control by the central board was intended to
affect through traffic only, leaving the local traffic on each section to be looked after by
the respective companies.
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