Court, signed the treaty guaranteeing the integrity of Norway. As both documents had to be laid before the Storthing before the treaty was notified, it was agreed that neither should be published before notification.

CHAPTER V.

ASIA (SOUTHERN).

I. PERSIA.

So far neither the Shah Mahomed Ali Mirza nor his so-called Parliament has done anything to realise the hopes raised by the establishment of what was regarded as a new era in Persia. As observed last year, it is difficult to understand what power is even nominally given to the "Parliament," and it is impossible for any one who has not an intimate personal acquaintance with the state of things at Teheran to say with whom the actual power now rests. Only this seems certain, that as yet there has been little real improvement in the administration. Shortly after his accession the Shah abolished the reduction of 12 per cent. on Government salaries introduced by Belgian officials in 1904. Parliament met on March 21 and passed the Budget, in which the Revenue was estimated at 7,000,000l. sterling, and the Shah consented to the curtailment of his household expenses by two crores of tomans.

The Shah appointed his second son heir-apparent and accepted the resignation by his uncle Zill-es-Sultan of the governorship of Ispahan, which he had held for thirty-eight years. Mushir-ed-Dauleh, the Grand Vizier, resigned, and Amin-es-Sultan, the former Grand Vizier, accepted the post of President of the Council and Minister of the Interior. He was assassinated when leaving the Parliament on August 31. A new Ministry was then formed, but further changes were made in it in October.

On November 10, Parliament passed the Budget, by which the Shah's Civil List was reduced to 100,000l., and on the 12th the Shah visited the Parliament House in state and swore fidelity to the Constitution.

In the middle of December serious disturbances, originating in a fight between some soldiers and civilians, broke out at Teheran, and quickly developed into a political crisis. The Parliament issued a manifesto to the Powers in general, and to Great Britain and Russia in particular, alleging that the Shah, misled by the reactionaries, was intending to overthrow the Constitution, and calling on the Powers to protect the Persian people against his designs. Great Britain and Russia appear to have replied that they had no intention of interfering in the internal affairs of Persia, but that they would advise the Shah

to uphold the Constitution. A few days later the Shah sent a message to Parliament promising to do so, and agreeing to certain conditions proposed by it, the most important of which was that the whole of the Army should be placed under the control of the Minister of War. A new cabinet was formed under Nizam-es-Saltaneh, a man of great official experience, and at the close of the year tranquillity seems to have been restored. The Anglo-Russian Convention, and consequent harmonious working of the British and Russian representatives at Teheran, is generally believed to have greatly assisted in producing this result.

This Convention, which aimed at an amicable settlement of all questions likely to disturb the friendly relations of the two countries in Asia generally, and in Persia, Afghanistan and Tibet in particular, was signed on August 31 and officially communicated to the Powers in St. Petersburg on September 24. After reciting the desire of both Governments to maintain the integrity of Persia, and to allow all nations equal facilities for trade in that country, the Convention states that in certain parts, owing to their geographical proximity to their own territories, Great Britain and Russia have special interests. Accordingly (Art. I.): To the north of a line drawn from Kasr-i-Shirin, Ispahan, Yezd and Khakh to the junction of the Persian, Russian and Afghanistan frontiers, Great Britain agrees not to seek for itself or its own subjects or those of any other country any political or commercial concessions, such as railway, banking, telegraph, roads, transport or insurance, or to oppose the acquisition of such concessions by the Russian Government or its subjects. II. Russia gives a similar undertaking concerning the region to the south of a line extending from the Afghan frontier to Gazik, Birjand, Kerman and Bander Abbas. III. Russia and Great Britain agree not to oppose, without previous agreement, the granting of concessions to subjects of either country in the regions situated between the lines above mentioned. All existing concessions in the regions above designated are maintained. IV. The arrangements by which certain Persian revenues were pledged for the payment of the loans contracted by the Shah's Government with the Persian Banque d'Escompte and de Prêts and the Imperial Bank of Persia before the signing of the Convention are maintained. V. In the event of any irregularities in the redemption or service of these loans Russia may institute a control over the revenues situated within the zone defined by Article I. and Great Britain may do the same in the zone defined by Article II. But before instituting such a control the two Governments agree to a friendly exchange of ideas with a view to determining its nature, and avoiding any action in contravention of the principles of the Convention.

With the Convention a letter was published from Sir E. Grey to the British Ambassador at St. Petersburg, announcing

that the Persian Gulf lay outside its scope, but that the Russian Government had stated during the negotiations that it did not deny the special interests of Great Britain in the Gulf ; and it was intimated that Great Britain reasserted them.

Obviously this Convention is more favourable to Russia than to England in that the northern zone is of far greater commercial value than the southern one. But Russia's influence and commercial position in Northern Persia could hardly have been shaken or checked unless at the risk of war. On the other hand, although the southern zone is of much less commercial value its strategic importance is great, especially as it includes the port of Bander Abbas. There were further troubles on the Perso-Turkish frontier in the course of the summer, originating in election disputes at Kermanshah and aggravated by the raids of Sinjabi Kurds and looting by troops. A Turkish force then crossed the frontier and advanced on Urumiah, shelling by the way the Christian village of Mewan, many of whose inhabitants took refuge with the Russian Consul at Urumiah. Later they were told by the Turkish commander that they might return if they accepted Turkish rule.

II. BALUCHISTAN.

Nothing of political importance occurred during 1907. The report of trade with Seistan passing through Nushki for the year ending March, 1907, showed a net decline of just over three lakhs. There was a slight increase in imports but a great decrease in exports, ascribed to riots in Seistan and quarantine regulations. Also there is a considerable trade by camels not passing through Nushki and therefore not registered.

III. AFGHANISTAN.

The part of the Anglo-Russian Convention relating to Afghanistan is as follows: I. The British Government disclaims any intention of changing the political position in Afghanistan, and undertakes neither to take measures in Afghanistan, nor to encourage Afghanistan to take measures, threatening Russia. The Russian Government recognises Afghanistan as outside the Russian sphere of influence, and agrees to act in all political relations with Afghanistan through the British Government, and it also undertakes to send no agents to Afghanistan. II. Great Britain adheres to the provisions of the treaty of Kabul of March 21, 1905, and undertakes not to annex or to occupy, contrary to the said treaty, any part of Afghanistan, or to intervene in the internal administration. The reservation is made. that the Amir shall fulfil the engagements contracted by him in the aforementioned treaty. III. Russian and Afghan officials. especially appointed for that purpose on the frontier, or in the frontier provinces, may enter into direct relations in order to settle local questions of a non-political character. IV. Russia and Great Britain declare that they recognise the principle of

equality of treatment for commerce, and agree that all facilities acquired already or in the future for British and Anglo-Indian commerce and merchants shall be equally applied to Russian commerce and merchants. V. These arrangements are not to come into force until Great Britain has notified to Russia the Amir's assent to them. The general effect is merely to maintain the status quo; it is to the advantage of England that Russia should definitely renounce all right to treat directly with Afghanistan, while on the other hand the grant of commercial equality is a decided gain to Russia.

The Amir's visit to India (ANNUAL REGISTER, 1906, p. 371) had no political significance. He reached Landi Kotal on January 2 and Calcutta January 28, after witnessing a grand review of some 30,000 troops at Agra, with which he is said to have been much impressed. From Calcutta he proceeded to Bombay, where he arrived on February 12. He left by sea on February 25 for Karachi, landing on the 27th, and left Peshawur on his return home on March 7. The arrangement that no political questions should be discussed was strictly adhered to; the visit was purely for the exchange of personal courtesies and for enabling the Amir to gain as great a general knowledge of India as was possible in so short a time. He appears to have been most genuinely pleased with his reception, but it was said that on his return to Afghanistan the more fanatical of his subjects expressed great dissatisfaction at his eating with Europeans. Nothing however came of this, and if any outward signs of it were shown they were speedily suppressed.

IV. THE NORTH-WEST FRONTIER.

There was no outbreak or general misbehaviour by any of the tribes as a body, though small parties of Zakka Khels often gave trouble. From August to December there were several raids on both the Kohat and Peshawur Borders, of which the most serious was one on Pubbi on October 29, followed by another on November 20, mainly, it is believed, to revenge the losses inflicted on the Afridis in the Pubbi raid. All, however, were probably due in part to the great scarcity prevailing along the Border as well as in Upper India.

V. BRITISH INDIA.

(1) FINANCE.

The figures for the three years dealt with in the Financial Statement presented to the Council in March, 1907, are as follows:

Accounts for 1905-6.-The receipts from Railways, Opium and Land Revenue fell short of the Revised Estimates, the deficiency under Land Revenue amounting to as much as 166,531. On the other hand, practically all the other heads of revenue exceeded the estimate. The largest increase was one of 111,7967. in the Army receipts, of which 82,500l. represented a payment made by the War Office on account of the cost of five Native Infantry regiments employed in the Colonies. The net result was an increase of 168,1857. and there was a saving of 111,5631. in expenditure, due almost entirely to lapses in England of grants provided for the Army. There is thus a total improvement of 279,7487., to which must be added 56,4067., the sum by which the provincial and local surplus was less than the estimate, making a total of 336,154l. The estimated surplus of 1,755,700l. was thus raised to an actual surplus of 2,091,8541.

Revised Estimates, 1906-7.-The method recently adopted of showing under Railway Revenue net earnings only, necessitates a correction of the totals of Revenue and Expenditure given in the Budget Estimates presented in March, 1906, and these will now be: Revenue, 73,711,1001.; Expenditure, 72,837,000l.; giving a surplus of 874,100l. The actual results, as far as they were known in March, 1907, were more favourable than had been anticipated, and the figures of the Revised Estimates are-Revenue,75,626,9001; Expenditure, 74,300,800l., thus raising the surplus to 1,326,100.

The heads under which the Revised Estimates differ from the Budget by 50,000l. or more were as follows: Increases : Land Revenue, 135,300l.; Opium, 776,6007.; Stamps, 51,300l. ; Excise, 89,400l.; Assessed Taxes, 67,700l.; Interest, 95,800l.; Mint, 213,800l.; Miscellaneous, 306,700l.; Irrigation, 281,100%. Decreases: Customs, 157,1007.; Salt, 110,000l. The chief cause of the increase of Land Revenue was the extremely favourable character of the season in the Bombay Presidency which facilitated the collection of outstanding arrears as well as the current demand. There was also some increase in the Punjab, the North-West Frontier Province, Eastern Bengal and Madras; but in Burmah, mainly owing to floods, the collections fell somewhat short of the estimate. In consequence of the decline of prices in the early part of 1906, it was not considered safe to estimate the opium revenue for 1906-7 at more than Rs. 1,125 per chest, but prices recovered rapidly and the average rate obtained was Rs. 1,391 per chest. This accounts for an increase of 140:45 lakhs; on the other hand there was a falling off of 24:40 lakhs in the receipts from Malwa opium. The improvement under Stamps and Excise was fairly general, except in Burmah and the United Provinces. In the former province the probable growth of the Excise Revenue was overestimated. In the latter the shortage was mainly due to a large firm of distillers who, in anticipation of the increase of