'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.' [‎14r] (32/386)

therefore, that the transaction should take the form of a purchase from
the Persian Government of the sole right to construct roads, railways, and
other commercial undertakings in Seistan and South-East Persia and in the
region between Mohammerah and Kermanshah. Eor the present, however,
the Russo-Persian Railway Agreement barred the way; and until such time,
therefore, as we could exercise the right of constructing railways, it was
proposed to provide that Persia should pay interest on the purchase money
secured on the Customs of Southern Persia. Lord Curzon welcomed the
suggestion. Eor so substantial a return, the Government of India were
prepared to lend any sum up to a million pounds sterling. It was suggested,
however, that the area of the monopoly to be of any value must extend across
the entire width of Southern Persia, and not be confined to the extreme east
and west. The Minister was instructed to endeavour to secure the grant of
privileges of the kind indicated in return for a loan of half a million sterling.
But Sir Arthur Hardinge was opposed to the demand of considerable concessions,
and eventually was authorised to advance the sum without direct return of any
kind. On the 4th Ap ril 1903, a sum of £200,000 was placed at the disposal
of the Persian Government. The interest
First British loan, 1903, wa s to be 5 per cent; the security
consisted of the Caspian Sea Eishery dues, the Post and Telegraph revenues,
and the Customs of Ears and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . The loan was repayable in
iwenty years. But the annual instalments were not fixed, nor was it definitely
agreed that the sum should not he repaid in a shorter period. The transaction
was effected through the Imperial Bank. Something had been gained. It
had been shown that Persia was not yet in complete financial bondage to the
Russian Government; and to enhance the value of the proof, the Grand
Vizier refused to consider a proposal which the Russian Minister hastened to
make of a further Russian loan to discharge the British debt.
Hardly had this sum been advanced, when the Grand Vizier expressed his
desire for further assistance ; and after lengthy discussions, an additional sum of
£100 000 was paid to the Persian Government on the 1st September 1904.
? It was definitely stipulated that this
Supplementary British loan, 1904. advance should form a part of that made
in the previous year, and that the whole should be repaid, capital and interest,
in twenty equal annual instalments.
Early in the following year the Shah was again in need of funds, and in
April 1905 His Majesty’s Minister was authorised to inform the Persian
Government that His Majesty’s Government were prepared to facilitate ^
further advance bv the Imperial Bank of Persia of £100,000 at 5 per cent on
the security of the customs of Ears and of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , on the sole condi
tion that in the event of the Xarun irrigation project eventually developing,
its execution should only be entrusted to agents approved by His Majesty’s
Government. The Persian Government objected to this condition, and the
proposal was abandoned and the offer withdrawn. In the following July, as
the result of further representations by the Persian Government, negotiations
were again opened, and an offer was made of an advance of £150,000 to be
made in the same manner and on the same terms as regards security and interest
as the two previous loans, on the understanding that the Persian Govern
ment should agree (1) to accept the interpretation attached by His Majesty’s
Government to the expression “ Ears and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. ”, as notified m
Sir A. Hardinge’s note to the Mushir-ed-Howleh of the oOth August 1904,
and (2) that all railway construction in Southern Persia (including Seistan)
should, in so far as foreign assistance was required, be carried out under . the
auspices of His Majesty’s Government. In October the Persian Minister
in London informed Lord Lansdowne that the Grand Vizier accepted all the
conditions attached to the proposed loan, and that he expected to
receive further formal instructions on the subject from Tehran. The hope was
expressed that the advance might be increased to £300,000.
Erequent reference has been made to the Customs revenues of Persia.
Prior to 1899 these revenues were regularly farmed by Persian subjects.
Einancial embarrassment soon brought the need for reform, of the-sole security
which could be offered for a foreign loan. Early m 1898 the Shah