File 3839/1916 Pt 1 'Persia: - Incidence of expenditure in - question of revising the agreement of 1900' [‎392v] (801/880)

Morley's strong views in the contrary sense, hut considered that while the
war is on India is yitally interested in keeping Persia quiet and maintaining
an Anglophile Government, and that acceptance of the half-and-half rule
in the case then under discussion and in similar future cases would be
iustified. Mr. Chamberlain did not share Sir Thomas’s reservation. “ The
u true and the only ground, he saicl, for such subsidies, and one which is
quite conclusive in°the present case, is that it is of primary importance to
India that Persia should be sufficiently well governed to prevent her fiom
‘ becoming a danger to India through Afghanistan. - - • But if
1‘ India be so deeply concerned m Persian politics m a cus^, it cannot v\ash
tt its hands of Persian charges the moment the crisis is passed. Were it not
m for India, we should not to-day have a man in Persia or up the Gulf, and
“ India is fortunate m her bargain.
4. Such was the position when war broke out.
sums of money have been spent in Persia on
During the war large
(1) Operations of Indian Troops.
(2) Subsidies and Loans.
(3) Secret Service.
(4) Seistan Levies.
(5) South Persia Rifles.
5. As regards expenditure on the first of these categories, we obtained
the agreement of the Treasury to depart from the pre-war division of cost,
and to charge—as the Comptroller and Auditor-Geneial thinks we ought to
do in the case of the expenditure of the remaining categories—the whole of
the extraordinary outlay to the Imperial Government. Our action was
influenced by the fact that the cost of the Indian Expeditionary Forces in
various parte of the world is being shared on the basis of the Parliamentary
Resolutions, the ordinary outlay being borne by India, the extraordinary by
Ilis Majesty’s Government.
6. The considerations wdiich impelled us to preserve the half-and-half
division in the case of expenditure under category 2 [Subsidies and
Loans~\ have been set forth above in recording the discussion raised by
Mr. Newmarch.
7. We have proposed to the Foreign Office that outlay on category 3
[Secret Service] should be diyided according to the half-and-half rule, but
the matter has not yet been settled.
8. As regards category 4 [Seistan Levy Corps], I expressed the opinion in
a note of 7tli November 1916 that if the Seistan Levies formed a component
part of the troops in Seistan, and were not a body formed independently
and leading a separate existence, the Parliamentary Resolutions might
properly be applied to them. A proposal to this effect was put to the
Government of India in our telegram of 16th November ; it is this telegram
which has elicited the warm approval of the Government of India and the
Comptroller and Auditor-General, and has caused the latter to suggest that,
for the reasons given in their telegram under consideration, the expenditure
under categories 2, 3 and 5 should be divided in the same way. I venture
to differ for the following reasons
9. Subsidies and, Loans. —I share the view expressed by Mr. Chamberlain
(see paragraph 3). See also concluding paragraphs of what I say below
regarding South Persia Rifles.
10. Secret Service. —In so far as expenditure under this head is intimately
connected with the military operations, its incidence ought to follow that of
the cost of those operations. The Government of India recognises this
[Mr. Grant’s letter of 19th November 1915, Pol. 4586/15]. Otherwise, for
the reasons given in the notes evoked by Mr. Newmarch’s question, I think
that the half-and-half principle should clearly be followed.
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