'Volume I. MEMORANDA REGARDING PERSIA AND NORTH-WEST TRANS-FRONTIER. 1905.' [‎27v] (59/310)

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at St. Petersburgli was instructed to explain
that compliance with the Russian demands
would be inconsistent with Persian indepen
dence. A secret understanding was then
suggested, but the Mushir-ed-Dowleh stated
that, as His Britannic Majesty’s Legation had
obtained information about the negotiations,
such a proposal was out of the question.
34. On the 31st March, Sir A. Hardiuge
reported that M. Naus had been sent to
him to negotiate a loan of £200,000 and
bad been informed that, unless the Persian
Government were prepared to olfer some
political advantages, such as those suggested
to the late Grand Vizier in 1903, it was useless
on the Minister’s part to make such an appli
cation to His Majesty’s Government.
35. In response to an enquiry the Gov
ernment of India informed the Secretary of
State on the 13th April that they adhered to
the opinion expressed in 1903, and were agree
able to advance a sum, not exceeding £200,000,
on the security of the Southern Customs and
conditionally that, in case of the eventual
development of the Karun project, that under
taking should be entrusted only to an agency An office of the East India Company and, later, of the British Raj, headed by an agent.
approved by us.
36. In the meantime the Persian Gov
ernment had opened negotiations with the
Imperial Bank for a loan of £100,000, which
was really all they required to meet emergen
cies, by an agreement for the redemption of
the royalty of £t,000 a year paid by the
Bank in virtue of its concession.
37. On the 13th of April, Sir A. Hardinge
was instructed from London that he might
treat with the Persian Government on the
terms agreed on by the Government of India.
Sir A. Hardinge, however, whilst recognising
that he might possibly obtain all or some of
the conditions contemplated in 1903, suggested
as a simpler solution that the projected loan
should be held over until the Imperial Bank
negotiations were completed, and enquired
whether he might inform the Bank that our
financial proposals need not interfere with
their own, which we were disposed to view
favourably. But the Directors of the Bank in
London anticipated difficulty owing to the
terms of their Charter limiting the extent
of the Persian Government’s indebtedness to
them, and Sir A. Hardinge was informed that it
would be better to adhere to his previous
instructions.
38. On the 5th May he reported that
the Grand Vizier had objected to the Karun
irrigation clause as part of the loan agreement
and suggested a separate agreement, or ex
change of notes, but added that the matter
would be submitted to the Shah. In a tele
gram of the 10th May, Sir A. Hardinge stated