'File 60/20 I (C 93) Imperial Bank of Iran: Bahrain, etc' [‎70r] (141/409)

THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT.
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aJ rdl -:: PERSIA. May 28, 1930.
%i r?
'"rise i'' confidential. „ S ections.
Jje^[E 2747/697/34] No. 1.
Sir R, Clive to Mr, A. Hend — 28.) ^ l j ~l I ^
ateetljjL.JNo. 221.) ' 1 '
a ' Sir, , . 15, 1930.
80^1^. WITH reference to my recent telegrams ending with my telegram No. 128 of the
ite prolvlT' M a y> 011 subject of the negotiations between the Imperial Bank of Persia and
la conr' Pe rs i an Grovernment, I have the honour to transmit herewith copy of an additional
idedrv appendix (No. 5) to the bank's concession, which was signed on the 13th May by the
s rwmU ^ Prime Minister, in his capacity of Minister of Finance, and Messrs. Hogers and Wilkinson,
behalf of the Imperial Bank,
nonde ^ ^ seen : ^ rom d 0Cllmen t that the bank gives up its right of note issue
tution ' an ^ re ^ urn ' ls rece i ve on 20th March next the sum of £200,000 sterling in cash,
('egj; a ^ il '] At the same time tlie bank will cease to pay the 6 per cent, royalty on its net profits
j ® • e ,. and will be exempted from the control of the Persian high commissioner of the bank.
Sllr ,| 3. In addition to this appendix, the bank received a letter (Enclosure 2) signed
' K hy the Prime Minister in regard to the question of their future collaboration with the
... . Government and with the National Bank, and in regard to the latter point a
• ailX ^ memorandum (Enclosure 3) is attached to this letter setting forth certain details in
. . ' .^.regard to this collaboration. I understand that the method by which this is to be
i done is at present under discussion between the two banks. The main thing is that
1 ! the Imperial Bank is placed on an equality with the National Bank for ordinary
®7«ba,.king business.
J ; etsesperij ^ rp^ e se ^l em e n t embodied in the documents signed by the Prime Minister was
l OTffipte J^^ggQ^atgd. entirely with the Minister of Court, who merely informed the Council of
[e i m Pe ra lj /Ministers what he had arranged. Although I consider they have parted with their
^ernementi;; note j sslie ] am convinced that the bank were right in coming to a settlement,
m d liypottefp^ negotiations were conducted m a friendly atmosphere, and it was an excellent
me croire that the board decided to send out Mr. Rogers. It is too much to hope that
' 111011 ' :l!i1 .^ Mr. Wilkinson and Dr. Lindenblatt will establish cordial relations, but I trust that
que ce soit, • f u ture relations may be correct.
lavemr,lei The news of the renunciation by the bank of their right of note issue has been
)as ^ lie 11 - received by the Persian press, instigated no doubt by the Minister of Court, with paeans
erse. Jedirai 0 |> r 0p r p S ented as a ^reat triumph for the Government. It is also admitted
nciere indepft that without the right of note issue the Government's Gold Standard Law must have
'BSCrapports^ een r 0 n( } eref ] inoperative. It is satisfactory, however, that these articles conclude
, on a more friendly note towards the Imperial Bank and that the conciliatory attitude
rmetsdeleiv: 0 £ the j g commended. Satisfaction is also expressed at the arrangement concluded
:i de (although this has not been published) between the Imperial Bank and the National
line par " Bank with regard to future collaboration between these two institutions. I he leading
ist de toute d a rti c le j n the " Iran " concludes by saying that the general attitude of the Imperial
est ecnb i j^nk gain the sympathy of everyone in Persia.
6. It is of course far too early to surmise what will be the practical effect of this
it dans UD e ! l arrangement, b u t there is no doubt whatever that the Persian Government have
seul inovenpt 1 obtained the renunciation by the bank of their sole right of note issue at a very cheap
et qui " s; : u price, and, unless the Imperial Bank can regain the preponderance of exchange business,
it would seem inevitable that there will be in the future a very considerable drop in
R.H.UJ 1 their profits. I am hopeful, however, that if the Imperial Bank will only profit by
the lessons of the past eighteen months, they may yet maintain their position as the
leading bank in Persia. There is no doubt that the board ot the batik have for some
years past been far too conservative in their policy—I might even say reactionary and,
if it is not presumptuous on my part to express an opinion on the constitution of the
board, I am convinced that the introduction of a little new blood couid only be an
advantage. Since the abolition of the so-called Capitul ations in 19.:8 the wave of
Persian nationalism has been spreading. I am the first to admit that this is less a
genuine expression of national feeling than an artificially fosteied growth, but
nationalism is being preached in the army and in the press, and due allowance will
have to be made for this by all commercial institutions doing business in Persia. At
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