was to make a demonstration in front of the Palace, or, as is now reported, to proceed to the Amin-es-Sultan's house to pillage it. But the gates leading to the square through which they had to pass were closed, and the crowd overflowed into the precincts of the Palace, some of the entrances to which had been left open.

The Naïb-es-Sultaneh, the Shah's son, who is the Minister of War and the Governor of the town, was sent by His Majesty to calm the people, but his appearance had the opposite effect, and he was himself threatened and insulted.

It is doubtful whether the Naïb-es-Sultaneh himself gave the order to fire, but it appears that the only troops who used their arms were his personal adherents. About fifty shots were fired, and the crowd, who apparently did not expect any active opposition, withdrew, taking with them the corpses of some of those who had fallen, the number of whom appears now to be considerably larger than was at first stated, and I am informed that at least ten persons were killed.

These events took place before noon.

On the following morning the Mirza Nizam called upon me by the Amin-es-Sultan's directions, to inform me of the negotiations which had taken place with Mirza Hassan, Ashtiani, the leading Mollah, and to urge me to persuade M. Ornstein to issue the Notice to which I referred in my telegram of the 5th instant.

I at once sent for M. Ornstein, and after a lengthy discussion, which, with its further developments, will form the subject of another despatch, induced him to agree to issue the Notice.

During this interview I had occasion to send a note to the Amin-es-Sultan, which I desired my messenger to deliver to his Highness himself. On arriving at the Palace my messenger was told that he could not see his Highness, and was asked to give up the letter, which should be delivered to his Highness. This my messenger very properly declined to do, and brought the letter back to the Legation. I therefore, on the suggestion of General Gordon, determined to go myself to the Palace and to ask for an interview with his Highness.

General Gordon and Mr. Churchill accompanied me to the Palace, and the scene was highly interesting and picturesque. The spacious courts of the Palace were crowded with every sort and condition of men. The ordinary soldiers, the Shah's own guard. the dignitaries of the Court who had been summoned to the Palace, and the Ministers in a body, were all to be seen. The Amin-esSultan came into one of the courts to meet me, and took me tɔ a private room.

Since then the agitation in the town has gradually subsided, and on the 7th instant the Shah, who had remained in his Palace since

4th instant, drove out into the country accompanied by a very e escort, which was estimated at 200 men.

The events which I have endeavoured to describe created conerable alarm among the European colony, several of whom took uge in the different Legations on the 4th instant, and subquently some of my colleagues deemed it right to hold a meeting, which I was present, to consult as to the best means of defence case of an attack being made on the Europeans. I am happy to y that no decision was arrived at, and I am bound to say that I ve failed to detect any symptom of an intention to attack the reign residents in Tehran. I have only heard of one case in hich a European was insulted in the bazaars, but I am told that e was in a state of intoxication, and was immediately taken under e protection of a passing Seyyed.

The Marquess of Salisbury.

I have, &c.,

FRANK C. LASCELLES.

No. 83.-Imperial Tobacco Corporation of Persia to Foreign Office.(Received February 29.)

SIR,

25, Austin Friars, London, February 28, 1892. Ir is known to you that the monopoly of buying, selling, and manufacturing all the tootoon and tobacco in the interior and exterior of the Kingdom of Persia granted by His Majesty the Shah to Major Talbot for fifty years from the 9th March, 1890, and duly transferred to the above-named Corporation, has recently been cancelled by the Persian Government under promise of compensation. It is further known to you that upon this latter subject that Government have put forward a suggestion which the Directors do not feel justified in placing before the shareholders owing to its inadequacy, having regard to the circumstances under which the Concession was granted, and to those under which the monopoly it conferred was withdrawn.

In order to make my meaning clear I must recapitulate those circumstances. The tobacco monopoly was granted to Major Talbot by the Shah in the capital of his dominions after long deliberation, with such assent as he needed from his own Ministers, and with the knowledge and approval of Her Majesty's Representative in Persia. Major Talbot disposed of it to an Association of Englishmen, entitled "The Eastern Concessions Syndicate (Limited)." Of this Association the Corporation purchased it for the sum of 300,000l., payable nominally in cash, but virtually and by agreement in shares to the maximum amount of a total capital which the rules of the Stock Exchange permit to be allotted to a vendor, viz.,

one-third, or in this case 217,000l. in round numbers, reducing the actual cash payment to 83,0001. Out of this the Syndicate paid the whole of the Corporation's preliminary expenses up to the allottment of shares, and these were no doubt unusually heavy owing to compliance with a wish expressed by the Shah that the issue should be international, that is to say, that the prospectus should be issued and the capital applied for simultaneously in London and in various other European capitals. I am informed that out of this cash there was paid, in addition, an underwriting commission of 6 per cent. pro ratâ to those who made themselves. or who directly influenced others to make themselves, responsibie for the capital required to work the Concession, but with this last transaction the Corporation itself had no concern.

The Agreement embodying the above-mentioned conditions of purchase on the one hand, and sale on the other, was dated the 3rd November, 1890, but it contained a further important stipulation the effect of which was that the Corporation were to pay nothing, either in the shape of cash or delivery of shares, until the Shab, in the face of his own people and of all others whom the proceeding might concern, had openly and conspicuously ratified, for the benefit of the Corporation, the engagements previously entered into with Major Talbot.

This ratification was officially proclaimed on the 28th February, 1891, and confirmed by the issue of Edicts from the Shah notifying to his people that the Corporation had commenced business, and commanding them to respect the privileges he had granted. When the text of those Edicts and Proclamations had been received and examined in England, and it was clear that their issue had given rise to no popular disturbance, the purchase of the Concession was proceeded with, and the work of organization, commenced meanwhile, was actively prosecuted. It will readily be understood that in a country like Persia, where distances are so great and means of communication so imperfect, the difficulty of effectual organization is only exceeded by its cost.

A large staff of Europeans had to be secured on terms very onerous to the Company, for no one with a character for ability and integrity will take up any post in Persia without a long engage ment, involving heavy penalties in case of rupture, and the scale of expenditure was aggravated by the Board's desire to comply with the advice emphatically impressed upon them by the Persian authorities to carry out their initial transactions on a scale of liberality calculated to conciliate all classes of the community. This advice, which, assuming the continuance of the business, was deemed to be good advice, the Board ungrudgingly followed, to the no small advantage of the Persian nation; but as soon as a hand was

tstretched to gather in the fruits of this liberality, the Persian iesthood, who from May to December must have been perfectly quainted with the Company's objects, suddenly discovered the righteousness of monopoly, while the Government simultaneously scovered its inability to cope with sacerdotal opposition. Thus e Régie, the prospects of which seemed brilliant in the early ys of December 1891, was practically extinguished before the ear had closed, and finally abolished a few days after-abolished ithout any serious attempt on the part of the Shah to act up > his engagements, but abolished under promise of compensation. During the rapid march of events which led up to this climax an mportant episode occurred. As soon as the General Manager calized that the Persian Government had no intention of exhibiting he firmness indispensable for the maintenance of the Régie, he elegraphed to the Board for permission to negotiate the terms f compensation upon the basis put forward by the Persian Governnent, viz., that of the loss involved by abolition. The reply of he Board was that he might negotiate upon that basis, but that all the rights of the Company were to be kept open pending the issue of the negotiations. The Persian Government, however, for their own protection apparently importuned the General Manager himself to announce the abolition of the Régie. The General Manager refused, stating that his instructions were definite, and that nothing short of force would induce him to depart from them, and to this attitude he adhered until urgent representations were made to him by Her Majesty's Representative at Tehran that perseverance in it would endanger all other European institutions in Persia, and even the lives of the European colony.

The General Manager, feeling that such representations from such a source would justify him in the eyes of the Board, then yielded. He issued a document admitting that the monopoly was abolished, and stating that the merchants from whom he had bought tobacco might have it restored to them on refunding the purchase-money. It is not clear why this proviso was couched in a permissive form. It seems to the Board that the General Manager would naturally have availed himself of the situation to obtain an undertaking from the Persian Government that the tobacco should be taken back and the money refunded, and the inference they draw is that Sir F. Lascelles represented the situation as too critical either for parley or for compromise. The General Manager, moreover, may have felt the more entitled to waive the point at that particular moment because the Persian Government had promised compensation on a basis which he deemed satisfactory, viz., upon the basis of the profits which would have been made if the business had been continued under the terms

of the Concession. A claim for indemnity founded upon this basis was forthwith prepared and furnished.

To this the Persian Government objected, attempting, in the first instance, to shelter themselves under the pretext of force majeure, but as this qualifying adjective in its comparative degree was clearly inapplicable to force with which no other had been brought into competition, the General Manager very properly refused to receive any official document containing that expression The Persian Government then pleaded "extraordinary events" a reason exempting them from liability for the profits which the Company has lost, disregarding the fact that these "extraordinary events" were not due to any failure of the Company to carry out its engagements, but were, on the contrary, the direct and natural consequence of that Government's vacillation and duplicity.

The Board, however, appreciating the difficulties of the situation, and prepared to make sacrifices in furtherance of a speedy settlement, formulated without prejudice, the following proposal of indemnity:

"That the Persian Government should restore in a lump sum the 650,000l. invested in the undertaking, with interest during the period of investment, and should pay such further sum as may be necessary to provide reasonable compensation for displaced officials, taking in exchange all the assets of the Company."

The Persian Government have replied with an offer to pay 300,000l. in cash for the satisfaction of all claims, leaving to the Company the responsibility of realizing its own assets, and holding out a vague promise of assistance to them in the liquidation of tobacco stocks.

Seeing that the above-mentioned sum in cash and the assets together would obviously not amount to the bare principal of the sum engaged in the undertaking, the Persian Government in making this offer have for the first time receded from the position of offering compensation on any basis, and reveal the desire to make their liability the subject of a composition with the victims of their faltering purpose. The sum of 300,0007. being equal to no more than the portion of the Company's capital invested in the purchase of the Concession, and invested, I may add, with the full knowledge of the Persian Government, to whom every detail of the transaction was submitted before they transferred the Concession to the Company, necessarily fails to provide for the large sum expended on organization, for the lesser but stil important sum which a long-drawn liquidation would absorb, for the item of interest during investment, and for that of reasonable compensation to officials displaced by no fault of their own; but even if an advance upon the offer were made sufficient to satisfy the