File 3839/1916 Pt 1 'Persia: - Incidence of expenditure in - question of revising the agreement of 1900' [‎330r] (672/880)

and preposterous, we agreed in June 1916 tliat we were prepared to
pay the usual share if His Majesty’s Government were satisfied as to
the necessity of this subsidy for the maintenance of a friendly and
effective Persian government, but we expressed our dissatisfaction
both with the policy and with the Persian Government that it pro
duced. The sums debited to us as our share of the moratorium were
£112,500 in 1915-16, £90,000 in 1916-17, £15,983 in 1917-18, £264,380
in 1918-19, £778,915 in 1919-20, and £795,900 in 1920-21.
Item No. 19—The proposal for a joint loan of two million sterling to the
Persian Government was referred to us for our opinion, and it is only
necessary to note here that the Government of India consistently
opposed the contemplated Anglo-Persian agreement, both on princi
ple and on grounds of expediency. With reference to the financial
aspect of the agreement we stated that ‘ we need say nothing beyond
repeating that it will be our duty to resist strenuously the extension
of the financial commitments of India.’ It was, however, decided
that India should share in the loan to Persia, and, although the agree
ment was not ratified and the loan therefore fell to the ground, we
were debited in 1919-20 with a sum of £65,573. This, we under
stand, was a payment made to Vossuk-ed-Dowleh in order to secure
his good services in regard to the agreement.
Item No. 20.—In view of the full correspondence which took place with your
predecessor on the subject of the financing of the South Persia Rifles,
it is unnecessary for us to refer at any length here to this expenditure.
The. last statement of our case was conveyed in our despatch No. 55,
dated the 13th February 1920. We may be pardoned for saying here
that in our opinion the objections of India to the payments on account
of the South Persia Rifles were not stated as fully as we could have
desired, when the question of the legality of these payments was
referred for legal opinion. In any case, however, that opinion merely
amounted to a statement that the question whether this expenditure
was in its essence military expenditure was really a question of fact,
< upon which the legal adviser himself was hardly competent to express
an opinion. We must reiterate our regret that, in spite of our protests,
it was decided to treat this expenditure as other than military, with
the result that India has been debited with over three and-a-half
million pounds.
4 . We have made these references to individual items of expenditure incurred
in Persia for two reasons. In the first place, we consider it our duty, even at this
late date, to protest against certain of these payments being admitted as a final debit
against Indian revenues. We were at one time hopeful of finding some common
formula which we could commend to you as suitable for adoption in reviewing the
whole of the Persian expenditure debited against us during the war years, with
a view to its redistribution on a more suitable basis. In this, however, we have not
succeeded. The multifarious nature of the items, and the fact that we have
ourselves admitted in more than *one case that our interests justified our taking
a share in the expenditure, seem to render it impossible to arrive at any general
principle of revision, and we consider that the items must be considered on their own
merits. We have, of course, no desire to reopen the question regarding expenditure