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                       also the complaints made by the Banians at Bahrein. Mahomed Rahim gave me to
                       understand, in April last, that he was about to bring a suit against the firm, and I
                       was under the impression, when I wrote my report from Shiraz in July, that this had
                       been done Mohamed Rahim has informed me, however, that what he meant was that
                       he wished the settlement of the accounts between him and the firm for sale of arms at
                       Bahrein, as well as other transactions here and at Basrah, submitted to an “ Ijlas," or
                       Commercial Court, under the supervision of the Residency.
                          There is a civil suit between the parties going on in the Turkish Courts at Basrah,
                       and it is probable that the Agent was referring to it when he spoke to me in April.
                       The complaint brought by the syndicate of Banians at Bahrein was against Agha
                       Mohamed Rahim, and not directly against Messrs. Fracis, Times. They stated that
                       the agent was bringing in goods belonging to Mr. Fracis at the privileged rate allowed
                       to himself, and that they were suffering loss in consequence.
                          24. I would, in conclusion, offer the following observations, for the information
                                                    of Government, and to assist in the final
                               Ceuural obicrvations.  disposal of the arms attached by the Sheikh
                       and of the claim for compensation advanced by Messrs. Fracis, Times. My views
                       arc the result of a consideration of the evidence now before me, and they may be
                       modified, if I obtain more later on. They will not, further, prejudice any judicial inquiry
                       1 may be called ou to hold.
                          It appears to me that the Sheikh gave the concession with the object of getting a
                       few arms for himself, without realizing how it would be used or what it would lead to.
                       The condition (1) allowing the Vizier to return the concession, and (2) forbidden the sale
                       of arms in Bahrein and on the Arab Coast were, I think, inserted to enable the Sheikh
                       to stop the traffic if it became dangerous.
                          From a political point of view, he was, I consider, justified in endeavouring to
                       recall the concession when he found what was going on, and I am also of opinion
                       that it was liable to be withdrawn. On this point, however, legal advice will no doubt
                       be necessary, and we ought alsi to obtain further proofs of the fact that arms were
                       purchased from the concessionaires by persons living in places where sales were forbidden
                       in the concession.
                          This can only be done on the spot ; and I will, if so desired, visit Bahrein and
                       the Arab Coast shortly and collect evidence. I will also, at the same time, obtain an
                      explanation from the Sheikh as to the apparent discrepancy between the reasons he has
                      given to me for his attachment of the arms and that contained in his letter to Mr.
                      Fracis. As I have said, I think this can be explained ; but I will reserve a final
                      opinion till I have questioned Sheikh Esa himself.
                         The translation of the Concession was made in my office. Iam sending a copy of
                      the Arabic original, and would suggest that it may be carefully scrutinized by an
                      expert, and that a true translation may be sent to me, if the one I have is found
                      incorrect.
                         The Sheikh was no doubt encouraged to proceed against the arms traffic to
                      Bahrein by the knowledge that the British Government disapproved of it, and had
                      assisted in the confiscation of arms elsewhere. It is also possible that Messrs. Fracis,
                      Times & Co., might have found means to make the Sheikh withdraw his opposition, if he
                      had not known that we would support him.
                         Granting these possibilities, however, the fact remains that the Sheikh wished to
                      withdraw the concession long before the British Government moved in the matter of the
                      arms traffic, and that his granting the concession, his desire to stop the traffic, and, finally,
                      his attachment of the arms, were his own acts, without any advice or prompting on the
                      part of the British authorities. Whatever share Agha Mohamed Rahim took in these
                      transactions was as a private individual, and not as a British Agent at Bahrein.
                         The question of a robbery, or theft, of the arms has not been lost sight of, but will be
                      aulv investigated when the general question is settled; and I think that the arms them­
                      selves should be surveyed by an expert as soon as convenient—first, to establish their
                      origin, when many will, I think, be found to be of Belgian manufacture; and, second, to
                      check them and see if any deterioration or damage has really occurred since they were
                      attached. It will then have to be decided what should be done with the arms. I do not
                      think it is desirable that they should be left at Bahrein indefinitely, or until the question
                      between the firm and the Sheikh, cr between the firm and Agha Mohamed Rahim, are finally
                      disposed of.
                         These matters involve inquiries which may take some time, and may also involve
                      protracted legal proceedings ; and I doubt if it is safe to leave such a stock of arms at a
                      place like Bahrein, which might, under certain eventualities, such as the death of the pre­
                      sent Sheikh, etc., become the scene of trouble and disorder. In such an event it might
                      be possible to guaid the arms and they might pass into the hands of those who would
                      em ploy them against ourselves, for we are bound to protect our subjects at Bahrein, and
                      to maintain peace and order in the place.
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