File 523/1912 Pt 1 'Persia: Imperial Bank: mint contract' [‎140r] (275/386)

[This Document is the Property of His Britaimicr Majesty’s GovemmantJ
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PERSIA.
[October 2 .]
CONFIDENTIAL.
Section 4.
[44878]
No. 1 .
Imperial Haiih of Persia to Foreign Office.—(lieceived October 2.)
® ir » 25, Abchurch Lane, London, October 1 , 1913.
\V E have the honour to acknowledge receipt of your letter of the 25th September
enclosing copies of the note addressed to the Russian Ambassador on the 11 th August
and the reply from the Russian Charge d’Affaires on the subject of the mint contract
with the Persian Government.
I am directed by the board of directois to inform you that, with reference to the
concession to the two natives, it specially states that “ if it does not contravene the
arrangement made with the Imperial Bank.” This reference is to the minting
arrangements made by the Medjliss itself, which did not expire until the 20th March,
1912.
dhe Persian Government very properly passed the law in the year 1910 reserving
to itself the right to import silver for coinage, and, as that law as never been cancelled,
the granting of a concession to third parties, whereby the Persian Government gave
up to them profits properly pertaining to the State, was ultra vires, and cannot be
upheld. The maintenance to the Persian Government hitherto of this right has had
the eftect of preserving a stable rate of exchange, and putting an end to the disturbance
to trade caused by native speculation in exchange, and also to the unsatisfactory custom
of farming out the mint to the highest bidder.
The agreement made with the Treasurer-General oi Persia, dated November 1911,
took effect on the 21st March, 1912, so as to preserve the continuity of relations
between the Government and the Imperial Bank with regard to the better administra
tion of the mint to which their contracts for the importation of silver made with the
Imperial Bank had contributed so much.
The monopoly for a note issue granted to the Imperial Bank and its appointment
under its concession as the State Bank of Persia naturally carries with it the right to
be the medium through which minted coin would be passed into circulation ; this
right has been recognised on many previous occasions, e.g., in the substitution of nickel
for copper coinage and the reminting of the old silver coin at present being carried
out through the Imperial Bank.
The Russian Bank is fully aware of the impossibility of obtaining adequate supplies
of coin from interior collections and commercial operations to provide the reserves
required by a bank of issue, as is proved by the continuous supply of coin furnished
to it by the Imperial Bank in Tehran in exchange for notes.
The argument of equal rights and privileges is one implied in connection with I
the Anglo-Russian Convention of 1907, and is a matter which has no bearing on the ^
present question, inasmuch as the Imperial Bank of Persia was established in 1889
under the concession granted on the 30th January of that year. On the other hand,
the Convention of 1907 is pledged to respect all existing concessions irrespective of
the sphere in which they happen to be placed, and consequently the Russian Bank has j
no claim to equal rights or compensation for any privileges enjoyed by the Imperial
Bank of Persia.
Although a question apart from that of the mint contract, the right of the Imperial
Bank to concentrate in its hands the interior collections in the north of Persia cannot
for the above reason be disputed, nor can the Russian Bank be said to possess interests
that could be injured thereby, seeing that that bank holds no right for making interior
collections in the north of Persia, whereas the Imperial Bank of Persia by its concession
has the right of acting as a State Bank throughout the whole of Persia.
The directors cannot see on what grounds they can be called upon to in any way
revise the bank’s concession acquired by purchase twenty-live years ago from the
Persian Government.
I am, &c.
G. NEWELL, Manager.
jS’s.
V
[1898 6—4]
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Copy to hid 5 a
1/ OCT 1913
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