'Military report on Tehran and adjacent Provinces of North-West Persia (including the Caspian Littoral)' [‎15r] (34/610)

Russia, consequently, became the sole creditor of the Persian
state and riveted her control over the Government. The under
taking of Nasir-ud-DIn Shah in 1889 prohibiting the construc
tion for 10 years of railways in Persia without Russian consent
was also prolonged for a further 1 period. So far from being
devoted to any reproductive purposes the greater part of the
loan was squandered in the Shah’s journey to Europe a few
months later. In 1902 he borrowed £200,000 from the Imperial 2
Bank of Persia, and a second loan from Russia of
10,000,000 roubles, just over £1,000,000, granting in return a
concession for a road from Julfa to Tabriz and Tehran and for
some coal and petroleum mining rights. Modifications also
Avere to be introduced in the Persian Customs tariff in con
junction with Russia. This second loan enabled the Shah to
make a second journey to Europe.
In 1903 the Treasury was again empty. The conditions 3
on which Russia was prepared to advance loans were un
acceptable, and eventually £200,000 were borrowed from the
Imperial Bank on the security of the Posts and Telegraphs and
of the Customs of Ears and the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . A further £500,000
were offered, and it was suggested that the Shah might be
paid a subsidy provided he Avould grant no road, railway or
other political or commercial concession in Sistan or South
Persia to foreigners, other than British. As the Shah’s financial
embarrassments increased he thus took advantage of the
rivalry between Great Britain and Russia, which had become
extremely acute, to barter 4 away concessions to each power in
turn.
Popular agitation and disorders in the provinces caused
the fall of the Grand Vizir Amin-us-Sultan, 5 who found
himself in the uncomfortable position of being execrated by the
1 The agreement was secret and the number of years was not ascertained by
the British Legation. STo written record existed in Persia, as the only note on
the subject, which had been minuted by the Shah, was in the possession of the
Russian Government.
2 Owing to the Bank’s position as State Bank of Persia this loan was not
regarded as an infringement of the Shah’s obligation to contract no foreign loan
without the consent of the Russian Government.
3 Russia offered a loan of £1,000,000 on condition that she should be given
a concession for Construction of a railway from Trans-caspia across Persia to the
Indian Ocein near the British frontier. Subsequently she was prepared to offer
£100,000 in return for control of the Persian mint, which Avould have enabled
her to crush the Imperial Bank. These conditions of course were, directed against
England.
* At the beginning of 1906 in secret negotiations with the Shah, which did not
however mature, Russia demanded as a condition of a loan that the conduct of
Persian foreign relations should be placed under Russian guidance and no con
cessions or treaties should be made without Russian consent.
‘ In 1902 he was given the higher title of Atabak-i-a’zam for his presence of
mind when an attempt was made to assassinate the Shah in Paris.