'SUMMARY OF THE PRINCIPAL EVENTS AND MEASURES OF THE VICEROYALTY OF HIS EXCELLENCY LORD CURZON OF KEDLESTON, VICEROY AND GOVERNOR-GENERAL OF INDIA IN THE FOREIGN DEPARTMENT. I. JANUARY 1899-APRIL 1904. II. DECEMBER 1904-NOVEMBER 1905. VOLUME IV. PERSIA AND THE PERSIAN GULF.' [‎64r] (132/386)

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frank understanding in regard to Persian matters ; that they wished to maintain
the agreement existing between the two Powers for the maintenance of the inde
pendence and integrity of Persia; that for practical reasons they preferred to
abstain from any joint negotiations for simultaneous advances of money to the
Persian Government, but that, while they wished to keep separate the negotia
tions for a loan from Russian sources, they in no way objected to similar assist
ance being afforded from British sources. Accordingly the offer of an advance,
not exceeding £500,000, from the Indian Exchequer, was made on the condi
tions described above, and Sir A. Hardinge was further informed that if the
Persian Government desired it, His Majesty’s Government would not object
to making the advance through the Imperial Bank of Persia as their agent in
the matter. When, therefore, the Grand Vizier assigned as his reason for the
refusal of the offer that the Russian Government had refused their consent,
Sir C. Scott, the British Ambassador in St. Petersburg, was directed by the
Marquis of Lansdowne to inquire of Count Lamsdorff whether the Grand Vizier
had correctly apprehended the decision of the Russian Government, and, if so,
what were the grounds of their objection to the arrangement, as it did not seem
consistent either with M. de Witte’s language or with Count Lamsdorff’s
assurances of his desire to respect the perfect freedom of Persia, that the
Russian Government should make use of the engagement attached to the loan
of 1900 to prevent the acceptance of an advance of no great magnitude, on very
favourable terms, and secured on revenues which were not pledged in any w r ay
to Russian financial establishments. The reply of the Russian Eoreign Office,
given in February 1902, was to the effect that the former exchange of views
between Russia and Great Britain related only to joint Government assistance
to Persia, and not to a loan by a private Bank; that, as it was impossible
to dispute the right of the Persian Government to freedom of action, it was
consequently for the Shah’s Government alone to decide what obligations to
incur in its loan contract with the Russian Bank, and that the revenues
assigned as security for the 1909 loan were apparently not established on a
sufficiently firm b isis to admit of the Banque de Prets viewing with in*
difference, in its own interest, the assignment of other unalienated revenues
as security for a further foreign loan to Persia. This reply, Sir C. Scott was
instructed to point out, did not answer the question which had been asked.
If it were meant to be understood that the Russian Government had refused
their consent to the loan by Great Britain because the Banque de Prets had
represented that the security for the loan of 1900 was insufficient, His Majesty’s
Government were obliged to enquire how this statement could be reconciled
with the fact that the Bank was then, with the consent of the Russian
Government, negotiating for a further considerable loan to the Persian Govern
ment. The Russian Government had admitted that the renewed agreement
between the two Governments for the integrity and independence of Persia
included the freedom of Persia in regard to financial matters, and limitations
placed on her action without sound financial reasons were therefore incom
patible with their own construction of the agreement.
22. Comment on the merits of this controversy is unnecessary. The only
result was to prove, if further proof were required, the practical futility of the
Russian assurances to respect the independence and integrity of Persia, which
the Russian Eoreign Minister was only too anxious to reaffirm at the very time
when hjs colleague, the Financial Minister, for whose actions he conveniently
disclaimed responsibility, was openly engaged in reducing the Shah to a still
more complete state of bondage to Russia.
23. The loan contract was completed at St. Petersburg in April 1902,
M. de Witte having insisted that it should be signed there instead of at Tehran,
ostensibly on the ground that M. Grube, the Manager of the Banque de Pr£ts,
was not an official of sufficiently high rank to sign the contract, but with
the real object of preventing interference with the drafting of the agreement
in the interests of Persia. The Grand Vizier contented himself with instructing
the Persian Minister at St. Petersburg to sign the loan contract “ on the same
terms as those of 1900 ”, but it is believed that he secretly agreed with the
Russians to postpone repayment till 1912. The important differences between
he loan contracts of 1900 and 1902 were (1) a provision that the revenues of any