File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎94r] (192/1150)

)
[This Document is
PERSIA.
CONFIDENTIAL.
the Property of His Britannic Majesty’s GoYernment,]
July 2, 1929.
Section 4 .
3 3348/172/34] No. 1.
Sir R. Clive to Mr. A. Henderson.—{Received July 2.)
(No. 337. Confidential.)
Sir, Gulhek, June 15, 1929.
I HAD a conversation yesterday with the Minister of Court on the subject
of the railway which it may be of interest to record.
2 . The conversation arose out of a remark of his Highness that he was going
to spend the Muharrem vacation, i.e., from the 16th to 21st June, in Mazanderan to
see what progress was being made with the railway from the port of Bander-i-Gez.
I said that, as his Highness might know, I was a convinced sceptic about this railway,
and had always been. He said he was aware of this. I felt, I said, that it seemed
to me that Persia was spending a mass of money which she could ill afford for a
railway that would never pay—at least, not in our lifetime. Mr. Poland had
first estimated the cost at 75 million tomans 10,000 Persian dinars, or a gold coin of that value. . A year later Mr. Thomas Brown of
the German Syndicate had admitted to me that it could hardly be built for less
than 90 million. When I returned from leave last November the estimate had risen
to 100 million, and only last month Mr. Brown had again been to see me and when I
pressed him on the subject he had said that the railway could not be built for less
than 120 million. He further admitted that in his opinion the section from
Bander-i-Gez on the Caspian to Tehran with its 25 miles of solid tunnelling could
never pay.
3. There seemed to me, moreover, as I told his Highness, to be a certain cynical
indifference on the part of the railway syndicate, who took—and quite rightly from
their point of view—no risk at all. They only worked on a cash basis, i.e., cash
in advance of the work done. The moment the money was not forthcoming they
were prepared to clear out without loss.
4. I was quite prepared to admit, however, that the section in the south from
the new port of Khormusa across the plains to Dizful might be of great benefit to
the province of Khuzistan and might even in time prove remunerative. But how
about the next section from Dizful to Burujird, some 200 miles through uninhabited
limestone mountains, which could only be built at an enormous cost ? How was
Persia going to find the vast sums of money required which last month were
estimated at 120 million tomans 10,000 Persian dinars, or a gold coin of that value. (say £24 million) and which would probably in
the end be more nearly 150 million tomans 10,000 Persian dinars, or a gold coin of that value. (£30 million) ?
5. At present she was paying the bill out of the proceeds of the sugar and tea
monopoly, which was estimated to bring in about 6 million tomans 10,000 Persian dinars, or a gold coin of that value. a year. But Persia
was paying a heavy price for this monopoly which necessitated the taxation at an
exorbitant rate of two articles of prime necessity to every Persian. Moreover as
the direct result of this monopoly an organised contraband trade had developed
in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , and it was estimated that Persia was losing over 1 million
tomans 10,000 Persian dinars, or a gold coin of that value. a year in smuggled tea and sugar. In order to check this contraband trade
the Persian Government were now embarking on the luxury of a navy, and had
ordered six gunboats in Italy. What was this navy going to cost Persia in capital
expenditure and annual upkeep ? Finally as the direct result of the large purchases
abroad of railway material the kran exchange had fallen in the last few months
from 48 to 54 krans to the pound sterling, about 12 per cent., and there appeared to
be little prospect under present conditions of the kran appreciating.
6 . His Highness patiently listened to my remarks, the truth of which he did
not deny, nor attempt to controvert. He merely said the railway was necessary for
Persia. It was essential to find another outlet than Russia for the agricultural
products of Gilan and Mazanderan, rice, tea and tobacco. He went on to say that
the wealth of Persia was twofold, agricultural and mineral. If the former was
scientifically developed Persia could in time become a large exporter of agricultural
produce. The presence of mineral wealth (apart from oil) had now been proved;
copper, iron, coal had all been found in different parts of Persia, but without railway
communication the mineral wealth could not be developed. I enquired where had
[856 b—4]
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File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎94r] (192/1150)

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File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎94r] (192/1150)

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