"سكة حديد بغداد" [و‎‎٣‎٦] (١٢٩/٧١)

3
of all the western and eastern frontiers, contribute about 260,000/., and the southern
about 180,000/.
These revenues are charged with the payment of the interest and sinking fund of
the two Russian loans (of 3,200,000/.\ representing an annual payment of 176,000/.,
with the payment of 24,000/. a-year, representing the interest on the advance made at
12 per cent, in April 1901, by the Imperial Bank of Persia, and with a portion of the
interest on the advance ot 200,000/. made by His Majesty’s Government through the
Imperial Bank in April 1903, which though nominally also secured on the Caspian
fisheries and on the posts, will, however, as a matter of practical convenience, be entirely
paid out of the customs receipts.
The total annual charge on account of loans on the customs of Persia is therefore,
roughly, 216,000/., out of a total present estimated revenue of 410,000/., of which
176,000/. are paid to Russian and 40,000/. to British creditors.
There is therefore room for another loan at 5 per cent, of about ’2,000,000/. on the
northern, and of about 3,250,000/. (interest and sinking fund) on the southern
customs.
In practice, however, such large loans as those indicated above cannot safely be
made by the Persian Government. Its annual expenditure, including the charges on the
loans, has almost always exceeded, since the accession of the present Shah, by 200,000/.
or 300,000/. its annual receipts, and if it is to attempt to balance its Budget by reducing
its expenses and by reforming the “ maliat,” and is to continue paying the interest on
existing debts (failing which Russia forecloses on the northern customs), it cannot
venture to contract any further loan bearing interest of more than 80,00U/. a-year, i.e.,
of about 1,500,000/, or if the customs increase by another 100,000/., of 2,000,000/.
Even this would be most dangerous unless the money were employed remuneratively,
e.g., in order to provide a sufficient force to crush resistance to increased taxation and
to the abolition of ruinous abuses.
I append a Table illustrating the above statement by figures.
In connection with the above-described pecuniary liabilities, the Persian Govern
ment has entered into certain political engagements towards Russia and Great Britain
respectively, which, although already familiar to His Majesty’s Government, it may be
convenient that I should recapitulate, for convenience of reference, side by side.
1. Engagements towards Eussia.
The Persian Government has bound itself towards Russia—
(a.) To give the Russian Bank, in case of default, supervision, and if this is insuffi
cient to secure the regular payment of the interest due on the loans, control over the
customs pledged as security for the loans, i.e., all the Customs of Persia except those of
“ Ears and the Persian Gulf.”
(5.) .Not to redeem the Loan of 1901 till 1910, and not to redeem the Loan of
190-3 till 1912, giving six months’ notice in each case.
(c.) Till the loans are repaid or redeemed, to “ is-ue no foreign loan ” (Contract of
1901), and to “ contract no foreign loan tor a long term ” (Contract of 1903), without
the consent of the Russian Government. The Russians interpret this as meaning that
although Persia is free to accept advances from the Imperial Bank of Persia, which is in
a sense her State Bank, and with which her Government has an “ account current,” or
to discount royalties, such as those due on the Caspian Fisheries Concession, the D’Arcy
Petroleum Concession, and telegraph lines worked by the Indo-European Telegraph
Department and the Indo-European Telegraph Company, she cannot stipulate, or accept
a stipulation, that the advances made to her shall only be redeemable “ a longue
echeance.” The expression “ longue echeance ” has not been precisely defined, but I
suppose it might be reasonably contended that a term of twenty years, perhaps even of
ten, would constitute “longue echeance,” but that one of five would be “eourte
ech£ance.” The difficulty could probably be turned, supposing that we wished to lend
Persia a given sum for twenty years, by providing that our advance could be redeemed
in, say, five years, but that it it was redeemed before ten the interest would be doubled,
or substantially increased. In the case of the recent advance this was not necessary, as
the nominal security was a fixed sum, payable annually for a term of twenty years.
(d.) Persia has further undertaken, till the loan is repaid, not to lower her duties
without the consent of Russia, and this engagement has now been made independent of
the repayment of the loan by its incorporation in a secret Article attached to the new
Russo*Persian Commercial Treaty.