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                           that three custom-houses would be maintained on the Karun, one at Mohammerah, the
                           second at Ahwaz, and the third at Shuster. It appears that lately the Persian customs
                           authorities determined to do away with inland custom-houses, and consequently two of
                           these were threatened with suppression. Well, persons interested in foreign trade
                           naturally protested. It was a great inconvenience to them that goods destined for one of
                           the upper ports should have to be taken out of the ship’s hold at Mohammerah and there
                            examined. Representations were made to the Persian Government; and I am glad to say
                           that the result has been that temporary arrangements have been made, or are about to
                           be made, under which our traders will be given customs facilities at these three ports as
                            was originally intended.”
                               160. This speech formed the subject of conversation between Lord
                             Secret, Jolr 1903, Nos   386-387, Proceeding Lansdowne and the Russian Ambassador,
                            No. >87.                     in which the former again asserted the
                            special interests of Great Britain in the Gulf, the south ports, and also in
                            Seistan:—
                                         The Marquess of Lansdowne to Sir C. Scott.
                            No. 112.
                                                                  Foreign Office, 6th May igoj.
                               11 The Russian Ambassador observed to me to-day that he had read with interest the
                           statement which I had made in the House of Lords last night on the subject of British
                           interest in Persia. He saw nothing in that statement to which exception could be taken.
                            His Excellency said that I had not mentioned Russia, although I probably had Russia in
                           my mind: that power, however, had no idea of establishing a naval base in the Persian
                           Gulf.
                              " I replied that I was under the impression that my speech did not contain much
                           that was new, and that 1 had merely reaffirmed propositions which had on previous
                           occasions been made or implied on behalf of the British Government. I had certainly
                           never heard that Russia or any other power contemplated the acquisition of a naval base
                           in the Gulf, but, as His Excellency was aware, there were many people who could not
                           be persuaded that she had not such designs.
                               “ His Excellency went on to say that, in his opinion, things were hardly ripe for a
                           discussion between our two Governments as to affairs in Persia. It would be difficult to
                           draw a hard-and-fast line between British and Russian interests without raising questions
                           which might give trouble. His instructions were to the effect that Russia accepted free
                           commercial competition in Persia, and that was all.
                              u I said I fully realised the difficulty of laying down spheres of influence, but that I
                           thought it would not be amiss that His Excellency and I should, if not to-day, perhaps on
                           some other occasion, consider whether it would not be possible to arrive at an understand­
                           ing upon certain points concerning the policy of the two countries in Persia.
                              “ We in this country recognized the preponderance of Russia in North Persia. On
                           the other hand, we had special interest in the Gulf, in the south ports, and also in Seistan.
                           With regard to the latter, I said that we should certainly regard with serious apprehension
                           any attempt on the part of Russia to construct a railway from the north, so as to threaten
                           the frontiers of India on the Baluchistan side.
                              "His Excellency said that he fully understood our feelings on the subjects, and that be
                           would be glad to discuss them with me unofficially whenever I liked. In the meanwhile,
                           he expressed the opinion that it was most unlikely that railway schemes of the kind which
                           1 had described would be undertaken by the Russian Government.
                               161. We may mention here also an important communication made by the
                                         A u „          Marquess of Lansdowne to the French
                                      jan. 1903,No. 45-.8   Ambassadar, as reported in the Foreign
                           Office letter, dated 19th March 1902, to Sir E. Monson :
                              During the course of a prolonged conversation with the French Ambassador to-day, he
                           referred to the attitude of the British, or as he put it, the Indian, Government towards
                           other Powers in the Persian Gulf. He regarded the pretensions of the Indian Government
                           as excessive, and attributed to them a desire to treat the Gulf as a British lake.
                           He thought it would be impossible for us to persist in a policy of this kind,  The Ana-
                           tolian Railway would have its terminus at some point upon the Gulf, which would then
                           become a highway for international commerce, and we must look this prospect in the face.
                              I replied that His Excellency was mistaken in attributing to us or to the Government
                           of India a desire to exclude the trade of other countries from Persian waters.. Our attUude
                           towards the Anatolian Railway project had been far from unfriendly. I had, indeed, within
                           the las^ few days, explained to the German Ambassador that we were quite prepared
                           to facilitate the. construction of the line, but that our support was not to be expected
                           unless we were given a share at least equal to that of any other Power in the capitalization
                           of the Company, in its management, and in the orders for materials and equipment.
                              M. Cambon observed that he could say confidently that there was no desire to deny
                           sufficient opportunities to British capitalists, but that when the project had been mooted in
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