File 523/1912 Pt 1 'Persia: Imperial Bank: mint contract' [‎147r] (289/386)

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of His Britannic Majesty’s ]
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PERSIA.
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CONFIDENTIAL.
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[August II.]
Section 9.
No. 1 .
Si?’ Edward Grey to Count Benckendorff.
Your Excellency, ' Foreign Office, August 11, 1913.
WITH reference to the memoranda left here by you on the 10th June and 3rd July,
in which the hope was expressed that His Majesty’s Government would not support the
claim of the Imperial Bank of Persia to their minting contract with the Persian
Government, and the need was mentioned of the Banque d’Escompte obtaining the
contract as an equivalent for the privilege of issuing bank-notes enjoyed by the
Imperial Bank of Persia, I have the honour to bring the following facts to the notice
of your Excellency :—
In the former of those two documents it is contended that the contract of the
Imperial Bank was invalid on the ground that it was never ratified either by the
Medjliss or by the Persian Government, and in support of that contention it is alleged
that the Medjliss on the other hand granted a concession for the supply of a certain
quantity of silver to two Persian subjects.
It must, however, be borne in mind that no reason has yet been put forward for
holding that the Imperial Bank’s agreement either required ratification or was otherwise
invalid. On the contrary, the Medjliss only conferred the above-mentioned concession
on the two Persian subjects, if such concession did not contravene the Government’s
existing arrangements with the Imperial Bank ; and as that concession did actually
contravene the arrangements in question it was quashed, and the two natives have
never imported any silver. This cancellation of their concession amounted to a
recognition of the Imperial Bank’s minting agreement.
Turning now to the desire expressed by M. Sazonof in the second memorandum
under reference that the Banque d’Escompte should receive the contract in question, I
would call your Excellency’s attention to the fact that the grant to the Imperial Bank
of the monopoly of a note issue, coupled as it is with a provision for prohibiting the
circulation of the notes as soon as payment on a single note is refused, and with the
obligation to pay the whole of the notes forthwith, and also to keep one-third of the
reserve in cash, involves an implied grant of at least the right to import for minting
purposes sufficient silver to make possible the fulfilment of the obligation necessary to
secure the continued enjoyment of the monopoly of the note issue.
The grant, therefore, of a monopoly of minting silver to any other bank or firm
would manifestly prevent the Imperial Bank from being able to fulfil their obligations
and would thus be a violation of that bank’s concession. .
Moreover, even if the Imperial Bank had not, under the concession, any implied
grant of a right to import silver for minting, but such right remained exclusively m
the hands of the Persian Government, the latter could not divest themselves of the
right in favour of any third party to such an extent as would put it out of their power
to permit the Imperial Bank to import for minting purposes sufficient silver to enable
them to perform their concessionary obligations.. .
In view, however, of the sincere desire of His Majesty s Government to act, w hen
ever possible, in complete accord with the Russian Government, I have been in
correspondence with the Imperial Bank of Persia, wffiose clnectors have, at my request,
expressed their willingness to accept the following airangement .
That the right to import for minting purposes enough silver for the fulfilment
of the Imperial Bank’s concessionary obligation be assured to the Imperial Bank,
and that, subject to that right, the privilege of importing silver for coinage should be
shared by the Imperial Bank and the Banque de Prets et d Escompte.
J - I have, &c.
E, GREY.
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[1829 /—9]
Copy to fndia
5 SEP 1913
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