'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.' [‎13r] (30/386)

Chapter II.
THE MAINTENANCE AND EXTENSION OP BRITISH INTERESTS,
1899—1905.
“ I am prepared to meet the Russian challenge at each
“ point, and to push the conflict with energy.”
— Extract from a Minute by Lord Curzon.
The manifestations of Persian decay are numerous : not the least notable
is that presented by the state of her exchequer. The financial conditions which
have marked the last decade are of recent growth. Writing in 1892, Lord
Curzon had estimated that the Shah enjoyed
Persian Finance- an annua l surplus of over £100,000. In
that year, however, the Persian Government had to issue their first large
loan. A sum of £500,000 was due as an indemnity to the Regie Company ;
and * the liability was discharged by raising a loan in London through the
Imperial Bank of Persia. Prom 1892 onwards Persia has been in a perpetual
state of need. Within the next few years, a sum of £200,000 was borrowed
from the Imperial Bank. In April 1898, a further advance of £50,000
was obtained from the same institution, the Customs of Bushire and
Kermanshah, which formed the security for the loan, being placed under
the direct management of the Bank’s Agents. The sums thus borrowed,
however were inadequate, and further assistance was sought from various
quarters, from England and from Russia, from Prance and from Belgium,
and from divers international banking companies. It was soon evident,
however, that it was vain to seek financial aid save from Russia, or Great
Britain In 1898 proposals were made for a loan of a million and a
quarter sterling to be floated in London by the Imperial Bank. But the
terms, which included a provision for direct control of the Customs, were
considered by the Grand Vizier to be unduly onerous; the amount was declared
to be insufficient; and the negotiations collapsed.
The endeavour to arrange a British loan having failed, His Majesty s
Government approached the Czar’s Ministers, with suggestions for joint action
in providing the Persian Government with funds. The Russian Government
professed to regard the idea with favour, and desultory discussions continued
till late in 1899. In September of that year, Count Mouravieff declared that no
negotiations for a Russian loan had taken place, and that, should any be
undertaken, they would be preceded by a frank exchange of views with
His Majesty’s Government. The value of the assurance was soon to be shown.
On the 30th January 1900, the Russian official gazette announced the
conclusion of a Persian loan of 22,500,000
First Russian loan, 1900. roubles at 5 per cent, the bonds to
issue at 85. The amount was secured on the entire Customs of Persia,
save only those of “ Pars and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. In case of default,
provision was made for direct control. Persia was debarred from obtaining
any fresh foreign loan until 1910, save with the previous consent of the Russian
Government. A portion of the loan was to be utilised to pay off the entirety
of the British debt of 1892 and of the various sums advanced by the Imperial
Bank. Among the more tangible political considerations for the loan may be
mentioned an understanding as to the construction of a line of telegraph from
Meshed to the south of Khorasan.