'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.' [‎62r] (128/386)

included in those assigned as security of the loan, but the interests of Her Majesty's Govern
ment in Persia cannot he considered as restricted to the coast or to the Peisian Gulf or to the
Province of Fare, etc.”
In a subsequent conversation M\ de Witte explained that the loan was a
private one, not undertaken by Government and was redeemable at any time.
11. Much time was not allowed to pass before the Persian Government
were very clearly reminded of the situation, for in March 1900 less than two
months after the loan was published, Lord Salisbury in intimating to the
Persian Government that no change in the customs administration at Moham-
raerah should be made without our consent, reminded the Persian Minister of
the written promise of October 2 Ird, 1897, and added “ Her Majesty’s Govern
ment must bold the Persian Government to the strict observance of this engage
ment, of which they were reminded in December last.” A pro-memoria em-
bodyin" Lord Salisbury’s message was read and communicated to the Musbir-ed-
P owl eh by Mr. Spring-Pice, but the Persian Minister avoided committing him
self to a definite opinion as to whether Mohammerah was or was not included in
the expression ** Pars and the ports of the Gulf of lars , and Lord Salisbuiy s
message was regarded as a verbal communication only.
] 2. So matters remained, the British Government claiming in the abstract
that the term “ Pars and the ports of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. ” must, in view of the
engagement of 1897, include Mohammerah, and the Persian Government
evadin 0, an official expression of opinion on the point, until in 1902, the second
loan was concluded on the same lines as the first. Sir A. Haidinge was then
authorised to place on formal record that no pledge in either of the Russian loan
contracts could alfect the earlier promise made to us by the Persian Government
that the customs, not merely of “Pars and the Gulf”, but of “Southern
Persia” would never be placed under foreign control. But the steps taken in
this direction belong to a subsequent period and will be narrated after the
negotiations relating to the second loan.
13. The first loan, obtained at the cost of closing for the future the English
and all other foreign markets save the Russian to the Persian Stale, was, as had
been foreseen by the Russian Government, quickly squandered by the Shah and
the Turkish c metiers. A great part of it was expended on the Royal journey to
Europe in 1900, in the course of which the Shah, with an immense and costly
retinue, visited all the great Courts of Europe except Berlin an 1 London, and
in 1901, the embarrassments of the State were as great as before the conclusion
of the loan. A second loan now became necessary to meet the annual deficit
of £300,000.
11. Three alternatives confronted the Grand Vizier: he might either aug
ment the laud tax and elTect simultaneous
economies in the administration; or he
migat increase indirect taxation by means
Negotiations for a Second Russian
Loan, 1902.
Abortive British Loan.
of higher customs duties; or lastly he might contract another foreign loan.
Prom the first course he recoiled as likely to alienate the Court party and the
upper classes generally. The second necessitated negotiations with Russia,
and also with Turkey, whose Treaties gave her a right to specific treatment for
her o-oods in Persia, and these were accordingly opened with both Govern
ments. Against the third the Amin-es-Sultan long struggled, but the Slnh
and his entourage had enjoyed their European tour too much not to wish to
repeat it and His Majesty’s decision to revisit Europe in 1902 forced the Grand
Vizier again to apply for foreign financial assistance without which the Royal
journey was impossible.
15. Recourse had already been had to the Imperial Bank, which in March
1901 advanced the Persian Government £200,000 plus a later payment of
£20 000, on the security of drafts on tho southern customs, which, being a mere
banking discount arrangement, did not conflict with the agreement of Persia
with the Russian Government not to raise a loan elsewhere, and in July it was
proposed to increase the Bank’s total advances to the Persian Go\ ernment to
£400,000. To this, however, there was the difficulty that the clause of the
Bank’s Concession would thereby be contravened, which limits such advniu es
to one-third of the paid-up capital. Accordingly it was suggested by tho Bank