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200. Tho Secretary of State thought that looking to the marked, though
slow, progress made in the increase of
Hid No. 1. traffic on the Karun and in tho develop­
ment of trade with south-west Persia by this ohannol, it. would he oxpediont in
tho interests of tho public, to continue tho subsidy to tho Company for
a further limited term : the thon state of tho enterprise afforded a prospect of
an extension of commeroo by this route, which would render tho Company
independent of Government aid.
201. Tho views of tho Govornor-Goneral in Council were oxnressod in
their despatch No. 3G-Ext., dated 20th
IbidHo,ia Pebruary 1885:—
“ Tho representation of tho Euphrates and Tigris Steam Navigation Company that they
will bo compelled to abandon their Steam Service on the Ivarun in couscqucnco of tho reduc­
tion in the subsidy paid from Indian funds towards their postal service on tho Tigris, points
to tho inforeneo that this payment has, in reality, operated as a contribution to tho Karun
service, which is subsidise d in tho interosts of tho prosccvatiou of British iulluonco in southern
Persia.
In fact, the Company naturally regards its total subsidies, whether from tho Indian or from
Hor Majesty a Government, as a contribution from State funds towards its operations ;
ond the question how far tho contributing Governments regard them as payment in
respect of postal s»rvicc9 or as payment in respect of promotion of British influence in
Persia, does not concern it. And the payment made to the Company out of Indian revenues is
as a matter of fact as wuoh spent on tho promotion of British influence, as upoo the actual
postal service.
We are therefore of opinion that, so long as the subsidy on account of the mail service
on the Tigris falls exclusively on the Indian finances, wo should not bo called upon to contri­
bute a moiety towards tho Karun servico. But wo should bp willing to do so if Her
Majesty’s Government would contribute tho sam^e proportion of the payment which we make
on account of the postal service on the Tigris."
202. Hor Majesty’s Government, however, declined to contribute anything
to the Tigris Service, and tho Govern­
External A., October 1895, Not. 73*91.
ment of India declined to continue the
Karun contribution, on the ground that the interests involved were purely
Imperial.
203. The Lynch Co. thon began to press tho Home Government for the
grant of the subsidy, or else threatened to
8ecr«t E., March 1896, No*. 79-96.
give up their enterprise on the Karun.
They informed the Foreign Office that the Sheikh of Mohammerah was. negotiat­
ing for the purchase of their steamer Malamir, plying on tho Lower Karun,
and that though he would have only to run it at a loss, the Sheikh was willing
to spend a considerable sum in order to get rid of the Persian officials, whose
presence was needed on account of the foreign enterprise. Tho giving up of
the Malamir would involve tho abandonment of the Shushaa plying on tho
Upper Karun. The Company represented that the Persian Government were
indebted to them to tho extent of £2,000, the out-of-pocket expenses they had
incurred for running the Shushan, that it had just begun to cover the working
expenses, and they hoped sooner or later to recoup tho debt; while if they gave
up the enterprise they would be obliged to press the Persian Government to pay
the debt, which would be undesirable in tho interests of the British. They also
pointed out that the commercial interests of India on the Karun were not in­
considerable, out of the total upward cargo for a year from July 1891 of 8,403
packages, 4,804 packages having been declared as through cargo from. India.
There was no doubt that the Indian trade on the Karun had gone on increas­
ing since at least 1892 ; the volurpe of the Indian articles transhipped from
Mohammerah had risen from £3,114 to 24,294. From tho obstructive tactics
still pursued by the Persian officers it was evident that Persia on her
side would view with satisfaction the collapse of European enterprise on tho
river.
204. Lord Salisbury thought that both Indian and Imperial interests
would be seriously affected by tho loss of influence, which would ensue if the
steam navigation on the river were abandoned.