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          ed upon. Tho Porsian Minister said they would undertake to erect a light-
          house and thus establish a claim to port dues. This offer Mr. Mackenzie de­
          clined. Tho Persian Government, however, said they wore about to proclaim the    !
          opening of tho Karun to steam navigation on terms which would ho consider­
          ed and published later. Major Ohampain thought this arrangement was Bimply
          a subterfuge and a pretext for tho indefinite postponement of the whole ques­
          tion, and that tho idea of dues was suggested by the Russian Legation, who were
          fully alive to tho oCfoot which the cncouragcmont of southern trade would have
          on Russian commerce and political influence in Persia.
             73. About tho same timo as these raomoranda were received, copies of two
          letters, dated respectively, 4th and 5th February 1876, from Her Majesty’s Min­
          ister at Teheran, to the Earl of Derby, on tho same subject, were also received.
          In Mr. Thomson’s opinion, the advantages of tho Karun river route, as pointed
          out by Mr. Mackenzie, were correctly stated. Tho opening of the route
          from Shuster to Ispahan, he remarked, was dependent on the establishment
          of steam communication between Mohammerah aud Shuster, and this again de­
          pended upon the terms which might be conceded by tho -Persian Government
          for the river navigation. For some time past ho said he had been urging the
          Persian Government to grant such terms as would induce foreign merchants to
          run the risk of engaging in such a speculation. If the routes from Moham­
          merah by the Karun to Shuster and Ispahan were opened, Mr. Thomson con­
          sidered that it would be advantageous to British commercial interests that a      I
          Consul should be appointed either at Shuster or Ispahan. At the outset,
          especially, he thought that the appointment should be made at Shuster, instead
          of Ispahan, the Mission Agency at the latter place being still maintained
          there.
             74. The Government of India forwarded copies of Mr. Taylour Thomson’s
                                         letters and Sir Lewis Pelly’s and Major
           Secret, Jono 1676, No. 51.
                                         Champaiu’s memoranda to the Secretary
          of State for India, with the following observations :—
             ** The superiority of the Karun River over other lines of communication from the sea coast
          and the advantages which Persia, no less than England, would gain by the development of
          commerce between Mohammerah, Shus-ter, and Ispahan, arc well described by Major Champain;
          and we observe that Her Majesty’s Minister at Teheran, in his despatch to the Principal
          Secretary of State for Foreign Affairs, No. 4-, dated 24th February 1876, has recorded a similarly
          favorable opinion on the Karun River route.
             *' We desire, however, to invite special attention to Major Champain’s statement that, in
          recent proposals submitted to the Government of the Shah for establishing a line of steamers
          on the Karun, Mr. Maokenzie, on behalf of Messrs. Gray, Dawes (Paul) & Co., demanded no
          subsidy, but 6imply leave to work a line of steamers on the river.
             “ It will be perceived thnt Major Champain attributes the obstructive attitude of the
          Tertian Government lo the suggestions of the Russian Legation at Teheran. On this point, we
          commend to the notice of Her Majesty’s Government a letter from a correspondent in Persia
          which appeared in tho Journal de St. Petersbnrgh of the l8th (30th) March 1876. The writer
          enters at some length into the supposed details of tho project submitted by Messrs. Gray, Paul
          (Dawes) & Co., and dwells with scarcoly concealed satisfaction on the alleged definitive rejection
          of the project by the Shah’s Government.
             <r It is not within our province to suggest whether any, and if so what, measures should
          be taken to secure for Messrs. Gray, Paul (Dawes) & Co., a favorable hearing; but wo desire
          to commend the subject to the early consideration of Her Majesty’s Government, with special
          reference to tho commercial and political importance of suoh a highway for British traae in
          Southern Persia.”
              75. Lord Salisbury fully concurred in the views expressed by the Government
                                         of India. He suggested, for Lord Derby's
           Secret, October 1876, No. 64.
                                         consideration, that Her Majesty's Minister
          atTehoran should be instructed to use every effort to procure the withdrawal of
          the conditions which tho Persian Government had, at the last moment, decided
          to attach to the navigation of the Karun, and which, if maintained, might have
          the effect of indefinitely postponing the realization of a projeot, important alike
          from a commercial and political point of view. It was said that—
          “ Lord Salisbury would he glad that it should at the same time be clearly intimated to Mr.
          Taylour Thomson that Her Majesty’s Government attach great importance to an early and
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