Coll 29/86 'Diplomatic and consular expenditure: incidence; revision; general' [‎36r] (71/561)

5® Having thus disposed of the Residency An office of the East India Company and, later, of the British Raj, established in the provinces and regions considered part of, or under the influence of, British India. question I am
now to turn to the general problem. It is true that the cost
in actual cash of the Foreign Office proposals (based on
certain assumptions as to the extent of representation con-
sildered necessary for Indian interests in Iran) does not
greatly exceed that which would fail to be borne by the
Government of India under the proposals made in their letter
of the 12 th of November 1937. It is necessary to remember,
however, that in assessing the financial effect of any pro
posal not only the amount payable but also the return received
for that payment must be taken into consideration. The
Government of India* s offer, as is implied in paragraph 10
of the letter of the 12 th of November 1937, went very much
further than they considered could be justified on the ground
of Indian interests in Iran and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , but was put
forward with a view to securing two points of principle to each
of which considerable importance was attached, namely -
(a) a definition, limitation and stabilisation of
India 1 s financial commitments in Iran and the
Gulf, and
(b) the naintenance of the existing system of
administration and control over policy.
It is evident that under the Foreign Office proposals the
GovJernment of India fail to secure either of these objectives.
Any increase in expenditure on the Arabian side of the Gulf,
even though occasioned almost entirely by the expansion of
Imperial int»ej.ests on ^hao littoral, would fall wholly on
Indian revenues. In addition, the Government of India, to whom,
as