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denunciation would be possible it was not desirable both because it would be
attributed to the influence of His Majesty’s Government and for other reasons.(”)
As a result of prolonged negotiations the French agreed to the increase of customs
duties to 25 per cent, on tobacco and liquor of a specified strength and 10 per cent,
on other goods. The Americans demanded most-favoured-nation treatment not
only for their goods but for their nationals, a condition which the Sultan was
unwilling to accept, and in these circumstances no approach was made to the Dutch.
In 1933 the Sultan was formally notified of the concurrence of His Majesty's
Government and the Government of the French Republic in the increases stated
above on the understanding (a) that a similar increase would apply to ships of all
other nations except those of the United States and the Netherlands and
(b) that if any ships of these two countries exploited their Treaty advantage to the
detriment of British or French trade the right of withdrawing their acquiescence
in the increase of duties was reserved to the Governments concerned.(2‘) Similar
notes were addressed to him on behalf of the Governments of the Irish Free State
and Canada.

16. The State’s finances have also been supported by subsidies from
Her Majesty’s Government and the Government of India. The Zanzibar subsidy
of Rs. 86,400 (£6,480) a year(”) is payable in perpetuity to the lawful Sultan of
Muscat provided he “ continues faithfully to fulfil his treaty engagements and
manifest his friendship towards the British Government.”!26) It was accordingly
held in 1938 that it was not feasible to use a threat to terminate the subsidy as
a lever for insisting on the Sultan’s consulting His Majesty’s Government in the
matter of his relations with foreign powers. The subsidy was previously paid by
the Government of India but His Majesty’s Government accepted responsibility
for it from April 1, 1947, when they took over charge of the Persian Gulf posts.
At the same time the Sultan asked that payments should be made to him in
Muscat instead of Bombay. Sa’id after his accession was informed that the
Zanzibar subsidy would be continued to him on the conditions stated and that
the arms traffic subsidy!27), although it was personal to the late Sultan, would be
continued for three years in order to prevent the financial collapse of the Stated3")
When the three years expired the Political Resident recommended that it should
be continued until the end of 1935 on condition that the money would be spent
on social services, such as sanitation and the building of a school and this
recommendation was accepted. The subsidy was discontinued with effect from
January 1, 1936, but the Sultan did not accept the situation and when he saw the
Viceroy in Delhi 1937 he pressed forjts renewal. The Government of India evaded
the issue for as long as possible but in 1939 the Sultan threatened to abdicate if
he were not given financial assistance and immediately after the outbreak of the
war the Viceroy wrote to him apologising for the delay in replying to his request
and promising its sympathetic consideration. As, however, a war subsidy of
£18,000 a year was shortly after this granted to him the question of the renewal
of the arms subsidy was dropped. After the war it was agreed that it should be
left to the Sultan to raise it again but he apparently never did so.(30) Under the
Civil Air Agreement of 1934 (paragraph 91 below) a payment of £500 a year was
granted to the Sultan for the lease of the aerodromes and for the privileges
enumerated in the agreement and was paid with retrospective effect from June 1929.
The amount was subsequently raised to £1,000 a year with effect from January 1,
1935 The agreement expired in 1938 and was not renewed and presumably the
annual payment under it ceased. Under the Civil Air Agreement of 1947
(paragraph 92 below) the Sultan receives £6,000 a year payable by the Air Ministry.
17 The Commercial Treaty of 1891 remained in force until February 1939.
Tt was then terminated at the request of the Sultan who was anxious to be freed
from the restrictions which it placed on his sovereignty and fiscal autonomy,
rr? hacj jn fact already been permitted to raise his tariffs (paragraph 15 above) and
also to apply certain municipal taxes to British subjects. The Commercial Treaty
^ TO toFO P.Z. 3146/32 of June 29. 1932 (E 3243/4/91 of 1932).
Jo ° fa P.Z. 6116/6126/33 of September 29. 1933 (E 5800/1015/91 of 1933).
Pan 6 at d 44 and para. 20 at p. 47, P.G. 13.
(■•) r.O lo F O P.Z. 1238/32 of March 4. 1932 (E 1125/4/91 of 1932).
(’’) ?na;nFOP' p7ZP5670/32 of September 24. 1932 (E 4879/4/91 of 1932).
£ };g; 1° rS: m 885/46 of February 15. 1946 (E 1441/86/91 of 1946).