File 4345/1912 'Trans-Persian Railway' [‎36r] (76/330)

[This Document is the Property of His Britannic Majesty’s Government.]
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PERSIA.
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9 ■ 1
[February 17.]
CONFIDENTIAL.
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Section 3.
[7681]
No. 1.
Board of Trade to Foreign Office.—{Received February 17.)
(Secret.)
Sir, Board of Trade, February 15, 1913.
WITH reference to yonr letter of the 6th February, transmitting copy of a letter
to Sir W. E. Garstin, and to recent informal communications relative to the Trans-
Persian Railway project, I am directed by the Board of Trade to state, for Sir E. Grey’s
information, that they have had under consideration Sir W. E. Garstin’s letter of the
15th January and the draft contained therein of a declaration proposed to be made by
the British and Russian groups with a view to safeguarding the interests of the
French group.
The Board observe that the draft declaration is to the effect that the agreement
between the Russian and British groups, which formed Enclosure B in Sir W. E.
Garstin’s letter of the 20th December, does not modify in any respect the rights of
the French group as they result from the international agreement ,as to principle, the
agreements annexed thereto, and the statutes of the Societe d’Etudes. The inter
national agreement as to principle lays down that:—
“ The realisation of the Trans-Persian line connecting the Russian system with
the Indo-British system shall be undertaken by mutual consent by an international
group, composed of Russian, French, and English elements, r upon a footing of equality.
“ The rights of the owners of shares of the Societe d’Etudes, of which mention is
made hereinafter^ such as they shall be defined by, and result from, the constitution
of the Societe d’Etudes, shall extend subsequently in the same proportions to all
companies which may be formed, with the object of rendering effectively valuable the
concessions secured in view of the construction of the said line or concessions arising
out of or connected with the working of the same. ,
The group is agreed to request the Societe d Etudes to lecommend the
companies, to be formed as above, to acquire the assistance of the technical elements
of their choice on the basis of the equal distribution above mentioned, this basis being
equallv applicable to the technical and industrial sections, to the construction, and to
the material and supplies.”
The application of the principle thus formulated would necessitate an equal
participation of the three national groups in any companies which may be formed for
the construction or working of any portions of the proposed line, or of any blanches
1 ere in the Foreign Office letter to Sir W. E. Garstin of the 4th February, it is stated
that the assent of His Majesty’s Government to the project of a trans-Persian railway
is subiect to the conditions {inter aha) that “ British control must predominate m t e
southern or Gulf section of any trans-Persian line, or of the branches, which may be
made, and that this control shall not be invalidated by any arrangement which may
be made in regard to the percentage of other {i.e., non-British) participation m tie
11Ilde These ^stipulations are undoubtedly at variance with the literal text of the inter
national agreement as to principle quoted above. Ihey do not however, appear to
necessitate any practical diminution of the right of the French group under t a
agreement to one-third participation in the capital of any company formed to work
concessions. „ . „ 0 . ^ > • i -•
In these circumstances the Board vrould suggest, foi bn E. Gie}- s consiceia ion,
that Sir W. E. Garstin might be informed that His Majesty s Government consider
that any declaration should be so worded as to make it clear that the ^ghte o t e
French group ” referred to therein mean the right to one-third share of the capital,
and not to absolute equality with each of the other participating countnes.
I am, <xc.
H. LLEWELLYN SMITH.
15,04 '- J] flrww' 3
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28 FEB 1013