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                         Khoramabad section of tbe road could be made practicable, it nppcare to me that the whole
                         lino from Dizful to Tehran might bo rendered fit for wheeled traffic at a coat which tho
                         Persian Government would, possibly, not object to incur. The distance to Tehran by this
                         route would be about 400 miles, or a lirilo over half tho distance that it is by tho present
                         caravan road from Buehiro to Tehran by Shiraz and Ispahan.
                            By the direct road from Shuster to Isfahan, a saving 160 miles would bo offcctod on tbe
                         whole distance to Tehran, but 360 miles would bo saved by following the Khoramabad
                         Burujird road. The trade of Ispahan would to some extent bo benefited by tho adoption of
                         the former route, n* it would be 100 miles shorter than tho road from Bushiro, to that place
                         by Shiraz, and 80 miles shorter than by Khoramabad and Burujird, but it seems that nothing
                         hotter than a mule-track could bo made by any route through tho Bukhtyafi mountains, and,
                         in ray opinion, no road can be considered satisfactory, even for mule traffic, unless mule
                         litters, on which all heavy packages have to bo conveyed, can, with case, be transported over it.
                         Supposing, however, that a good mule-road were established betwcon Shuster and Ispahan, it
                         could only servo our purposo for a fow years, and would not bo of any advantage in enabling
                         us to compote successfully in trado with Russia when the construction of a wagon road or a
                         railway from tbe Caspian to Tehran shall have afforded additional facilities for tho prosecu­
                         tion of her trado in the north of Porsia.
                            Russia has of late years, owing to tho development of steam communication on the Volga
                         and Caspian, and the construction of a railway in the Trans-Caucasian provinces, made great
                         progress in mpect to her commercial relations with this country. Wo, too, in the Persian
                         Gulf, have greatly increjsed our trade with the southern ports of Persia ; but the distance
                         which separate us from the central and important markets of the country and the difficulties
                         we  have to encounter in traversing formidable mountain ranges in tho southern provinces are
                         against us, and in favor of Russian commerce. The distance from tho nearest port on the
                         Caspian, Meshedi Ser, to Tehran, is only 130 miles. That from the port of Anzali by Kasvin
                         which is the road generally followed by caravans and travellers, is 200 miles. The latter is
                         now practicable for wheeled traffio from Tehran to Kasvin about 100 miles, and it is in
                         contemplation to complete the remaining portion, which is the only difficult part of the .oad,
                         nothiug has yet beoo finally settled as to commencing the work.
                            Sinoe the arrangement was made with Baron Reuter in 1872, the Persian Government
                         has granted several concessions to Europeans for tho construction of a line of railway from
                         Resht to Tehran. The last concession for this purpose was given to M. Boital in 1881. All
                         the previous concessions were revoked by the Shah before any work had been be^un, and it is
                         possible that the arrangement with M. Boital will before long be set aside also, as the Persian
                         Government has little faith in his ability to obtain the funds necessary for tho undertaking.
                            The construction of this line of railway, is however, merely a question of time. If not
                         carried out now, the project is certain to be taken up again, and railway communication
                         between Tehran and Anzali will doubtless be established beforo long, the feeling of the public
                         generally being very much in favor of the scheme. Wheu this object is accomplished, British
                         trade will be placed at a great disadvantage in this country, and unless railway communication
                         can also he extended from Tehran to the south, our goods will have grout risk of being
                         completely driven out of the principal and wealthy markets of Persia.
                            In view of the discussions which have recently taken place at St. Petersburgh as to tho
                         expediency of closing the transit trade through tbe Caucasus, I have urged upon tho Minister
                         for Foreign Affairs and the Min:ster of Commorce tho ad visibility of adopting effectual  mea-
                         ■ures to improve the existing communications with the southern provinces. They have both
                         promised to use every endeavour to attain this object, and the Minister for Commerce has sub­
                         mitted a Minute to the Shah pointing out that, if Persia desires to he independent of others, she
                         mui-t look to the Persian Gulf as tho proper ohannel for her trade, and recommending the
                         opening up of a new trade route from the coast by way nf Mohammerah, Dizful and Khoia-
                         mabad, for which he asked that every faoility and encouragement should be given by the
                         Persian Government inordor to induce native and foreign merchant to send their goods by that
                         route. In a note in tho Shah's own handwriting which I saw appended to this Minute, His
                         Majesty referred the matter to the favorable consideration of his Council, and expressed an
                         opinion that the'suggestions it contained were sound and practical. Tho proposal has since
                         been disoussed at the Council, but I fear that nothing will be done bv that assembly to secure
                         its adoption, objeotion having been made by them to the expense which it would entail upon
                         the Government.
                            In the memoranda by Sir H. Rawlinson and Sir O, St. John on the subject of the Karun,
                         it is, apparently, assumed that the Persian Government would not be disinclined to expend a very
                         considerable sura of money on the construction of a metalled road between Bushire and Shiraz,
                         and on further oosi ly works for impr >ving the navigation of tho Karun by digging a canal and
                         making locks by which the dam and rapids on the river might be avoided, the amount, for
                         instance, at which Sir O. St. John estimates the cost of making a cart-r. ad from Bushiro to
                         Shiraz beiog £200,000. It may be safely affirmed that there is not tho least chance of the
                         Shah's Ministers being persuaded to do anything of the kind. If the expenditure involved in
                         the construction of a good trade route from Tehran to the Persian Gulf would not exceed
                         £ 30,000 or £40,000, some arrangement might be made for the Shah to contribute a portion oi
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