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             Gulf nnd lot me continue the discussion of the latter question, which has already made definite
             progress, till it is settled in the sense desired by you, independently of any financial negotia­
             tions. To this 1 attach great importance and I beg Your Lo:tlship to do me tho honour of
             trusting my local Unowlcdgo and judgment on the point. (2) To let mo do my best to frame,
            in conjunction with Monsieur Naus, a formula for tho completion of the advance, which whilst
            giving you what you desire will enable it to be arranged with a minimum of difiiculty. One
            way of doing this would be to add after Monsieur Naus's words “ que les garauties affecteca
            en vertu de l'acto ci-dcssus restont acquiscsau remboursement de la dito somme de 290,000/,’’
            tho words “ mnisqu’eu vue do 1’insufiisancc des deux premieres garanties y mentionncea &
            couvrir la totalitc do Favancc, la somme do 100,000/. qui la complete sera remboursce par le
            produit de la troisiiimo ct drenioro, garantic,” to which might be added, if absolutely necessary,
             tho words savoir, les Douanes du bars ot du Golfo Pcmque.’, Other ways have occurred
            to me of getting round the difficulty, but it is prematuro to discuss them at the present stage.
             (3) I should like to be able to encourage tho Ain-ed-Dowlch with the idea that llis Majesty's
            Government is propard to assist financially and thus acquire a finger in his Karun irrigation
            projects. I have given llerr von Itoggcn. in compliance with a request to that effect from
            him, a letter of introduction to Iiis Majesty’s Minister at The Hague whither he has just
            proceeded on leave. I feci sure that if we play tho game judiciously and with patience we
            may still be able to utilise the financial needs of Persia as advantageously to our interests  as
            our rivals have done fiom their own point of view in the past.”
                324. On these points tho following views were expressed by tho India
                                           Office on tho 25th August 1901;
              India Office to tbo Foreign Offico, dated 25tbAu-
            guit 1904.
                As regards the advance of 100,000/. to complete the sum of 300,000/ offered last year to
            the Persian Government, the Secretary of State iu Council is prepared to pay the sum to the
            Imperial Bank on learning that the draft agreement enclosed in Sir A. Ilardinge’s Despatch
            No. 133, of the 19th July last, which was summarised in his telegram of the 5th July, has
            been concluded. The money, I am to add, will be available after one day’s clear notice.
                As regards a further loan on the security of the Karun Irrigation Scheme, Mr. Brodrick
            is consulting the Government of India on the question of furnishing a sum of 200,000/. for tbe
            purpose from Indian revenues, on the understanding that His Majesty’s Government will
            guarantee India agaiust the half of any loss in respect of interest or capital.
                326.  The Government of India was asked to express their views, in the
            Secretary of State’s Despatch No. 38, dated 2Gtli August 1901.
                327.  There are further certain difficulties arising from vested interests
            of several parties that are likely to be affected by the projected irrigation works.
                328.  There werc> firstly, Nizam-cs-Sullaneh and Haji IToyun-ut-Tujjar,
            his co-adjutor, who has invested a largo capital into landed property on the
            Karun, which would be overflowed by carrying out the works. It would he
            necessary therefore to acquire their lands and compensate them.
                329.  Secondly, the Sheikh of Mohammerali -would be interested that tho
            territory round about Mohammerali would not he dried up by the re-building of
            tho Ahwaz Dam. He would bo moreover personally anxious to have a share in
            the works, and from Lieutenant Lorimor’s letter to Major Cox, No. 25, dated
            2nd July 1901, it appears that the Sheikh has three big schemes in view in
            which he would invest his money so far as he can, and for the rest of the cost
            would be glad to have aid from us. Tho schemos are—
                  (1)  the irrigation of part of Arabistan by 5 or 6 steam pump barges
                        placed on the Karun below Ahwaz ;
                  (2)  the construction of irrigation works on tho rapids at Ahwaz on the
                        site of the old “ Band ” ;
                  (3)  the purchase of certain land from the Nizam-us-Sultaneh.
                329-A. Tho 1st scheme is the same which Mr. Blunsum of the Basrah
            Trading Compauy had conceived and in carrying out which he would be glad to
             give his assistance, in consideration of being given a prcferonco in the purchase
             of the produce of the land irrigated. It is estimated to cost about £15,000 or
             £20,000, which the Sheikh is prepared to spend, but if it should cost more, he
            would seek British aid.
                329-13. The 2nd scheme would, it is estimated, cost about £500,000, for
             which the Sheikh would have wholly to depend upon us.
                The scheme, writes Lieutenant Lorimcr, is a very big and difficult one, but
             it would turn a largo part of Arabistan into a permanent garden, and, granted
                    [S9G9PD]                                        co
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