File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎129v] (263/1150)

2
then^ed Ms news about finance the Pecans at
7. I their enquired nis v e ^ in in the bank in the railway fund fr om
had some 15 million tomans 10,000 Persian dinars, or a gold coin of that value. (£ ) J , the Persians expected that the
the sugar and tea monopoly. % th ^™ n 0t tomans 10,000 Persian dinars, or a gold coin of that value. (£4 million). On the basis of a
fund would have mGreased ™ from this SO urce for the next ten years, there
regular 5 million tomans 10,000 Persian dinars, or a gold coin of that value. (£ tomang (£14 m iU 10n ). On the somewhat
would be a total f und ot , h ilwav wou ld not cost more than 80 million tomana
“SSo. Ml •>» estimate, only 1.
tomans 10,000 Persian dinars, or a gold coin of that value.
construction.
for^^rniliion) ^additional money would have to be found for the actual
(01 ^ minion) u™™.™,. to take into consideration the
It was necessary, however, to take
aL __ _ uncertain
t 0 OTlnna , lo ,„ on running"the'sections which would be built and opened to
£8 S. rSSRS -»ssrs± -s'*"
would not be very heavy and f ould In no case exceed 5 m.llio^
Hereckoned about one and a half years Mr making detaUed^ffi^
was
to make a number of alternate^ surveys and let the Persians choose which alignmeat
thev Anally wanted. The really heavy expenditure would come m the fourth, fifth
tney nnany *v fll1QT '„ thp hu Idmff the Persians would have to hi
and sixth J vea7r when to finance the building the Persians wouM nave to borrow
outside At the same time, he told me that the Germans wou d be prepared to pa;
7 per cent interest on the accumulated fund (at present 15 million tomans 10,000 Persian dinars, or a gold coin of that value. ) lying a
the bank in Tehran if this money were transferred to Germany
8 In reply to my enquiry whether his group had come to any arrangement
with the Russians for the transit of material, he said that they had; and that the
Russians were prepared to give free transit for German material m return for a
guarantee that the Germans would buy any material which the Russians coud
provide at an equal or less cost. He said that on these terms there was undoubtedly
a good deal of material which the Russians would be able to supply.
& 9. Next, I enquired what he considered were the chief risks. He said there
were two main risks : (1) there might be a change in the political situation in Russia
whereby delivery of material might be delayed or even altogether stopped, and
(2) the death of the Shah and the elimination of Taimourtache, which might mean a
I change of policy in Persia towards the construction of the railway. _ However, he
was allowing for both these risks in his estimate of costs, I asked if he had any
objection to tell me what would be his estimated profit. He said, as he had come to
see me he would speak frankly, but he was telling me a great deal which he trusted
I would treat as confidential. He said that in a civilised country where ordinary
risks were reduced to the minimum he would estimate for a. profit of about 7 per
cent.; in Persia he was estimating for 16 per cent., and he had found, after talking
to Mr. Carrell, that the latter thought this too low, and he believed Liens were
estimating a 20 per cent, profit. He was determined, however, only to work on a
cash basis, that is to say, that the Persians would have to pay in advance 50 per cent,
of the cost of each section to be built, and the other 50 per cent, immediately tnat
section was built. The German group would do business on no other terms, and he
believed that this was the same with Liens. He was against the idea of the various
constructing firms, German, American, and possibly French, forming a ring to
squeeze the Persian Government unnecessarily; some arrangement was, however,
advisable between these groups; firstly, in regard to their estimated profits, and,
secondly, in regard to the system of payment by the Persian Government, e.g., if h
was to insist, as he intended, on 50 per cent, cash down, and Ulens were prepared to
take 25 per cent, cash down, this would only be playing into the hands of tk
Persians, Personally, I can see no very great difference between Mr. Browns pro
posal and what he calls forming a ring.
10. Finally, I asked him for how long he considered this railway would niereh
be a source of expense to the Persian Government; he said that was impossibieto
say, but it must be so for many years. At the same time he estimated that abou
70 ppr cent, of the cost of construction would be expended in this country, thereb}
putting hack into circulation the money collected by the monopoly which for the pad
"T^ ^ ^ ‘ .1.— Lit
<ir
A
lew years had been lying idle in the bank and withdrawn from circulation,
yv as also a great believer in the possible future of Khuzistan if the question ^
irrigation in that province was seriously undertaken.
11. He then asked me if I could tell him what was the view of the SriLj
oyernment m regard to this railway, and how far British finance would be hkG
o am an interest m it I said that my personal opinion, for what it was wo 1 ,’
agreec wi is m that the whole railway scheme appeared to be premature, and 1
iVLucrt
IjPP'
Mil W
|i»
enp
. sail in
lesitki
asm
Li

File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎129v] (263/1150)

Transcription

About this item

Copyright: How to use this content

File 357/1919 Pt 2 ‘RAILWAYS IN PERSIA’ [‎129v] (263/1150)

Transcription

About this item

Use and share this item

Copyright: How to use this content