'File 3/8 Affairs of Sh. Khaz`als sons.' [‎195r] (389/508)

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1924—25. This loan was in respect of the erection of consular premises at Ahwaz,
the building of which had been commenced but had, after the fall of the Sheikh,
been abandoned owing to certain town-planning schemes. The Sheikh’s title to
the land in question was more than doubtful and he had none to the buildings
except for the foundations; and it was not considered that he had any legal claim
against either the Government of India or His Majesty’s Government in the
matter. But the Foreign Office successfully urged that the loan should be regarded
as a debt of honour and that it should be repaid on the grounds of His Majesty’s
Government’s moral responsibility for doing anything possible for our former
protege, who, in addition to his political fall, was now in grave financial straits.
51. The repayment of the loan in respect of the Ahwaz consular site was
of relatively minor importance although illustrative of His Majesty’s Govern
ment’s attitude. Of much greater importance, however, was the question of the
Sheikh’s date gardens in Iraq, regarding which assurances had been given in
1914 (see last paragraph of Document No. 6 in the Annex). A detailed account
of developments in this highly complicated question would be out of place in the
present memorandum, but very briefly the position was as follows. The assurance
to the Sheikh was fully implemented during the period when His Majesty’s
Government in the United Kingdom were responsible to the League of Nations
for the administration of Iraq, but successive Iraqi Governments refused to accept
the financial commitment in this assurance (and in a similar one given to the
Sheikh of Koweit) as binding upon Iraq after the establishment of the indepen
dence of that country in 1932. In that year the Iraqi Government altered their
system of taxation upon agricultural products by a measure known as the
Istihlak tax, as a result of which taxation was no longer levied on the land itself
but on such parts of the crop as were sold or exported. It was decided that, in the E 2649/18/93/
event of continued failure to persuade the Iraqi Government to accept the financial
commitment to the two Sheikhs, an obligation to compensate the latter must
rest upon His Majesty’s Government. The cases of the Sheikhs of Mohammerah
and Koweit differed in that the latter was nominally independent whereas the
former was not, and in any case the question arose whether Sheikh Khazal could
have a successor ” in the sense of the 1914 assurances. It was decided, however,
that in this matter the Sheikh should be treated during his life-time on the same
basis as the Sheikh of Koweit and the whole question of compensation was under
active consideration when Khazal died. The decision was then reached that pay
ment of compensation for losses in respect of Istihlak taxation should be made to
tlhe Sheikh’s heirs on an ex-gratia basis, and in 1940/41 the sum of £15,218 was ei365/iio/
distributed among them in full and final settlement of past losses on account of 93/1940.
this taxation since 1932 and of prospective further losses from this or alternative E456, E 1836 /
forms of taxation on the land or its produce; in return, the heirs (or their trustees 456 / 93 / 1941
in the case of minors) were required to sign documents accepting payment as a
full settlement of any claims against His Majesty’s Government under the pledge
given to the Sheikh of Mohammerah in 1914 in this particular regard.
The fate of the British assurances.
o2. While, as has been seen, the policy of His Majesty’s Government after
the Sheikh s rebellion in 1924 had been to endeavour honourably to disembarrass
themselves of the assurances given to him in times when circumstances were
very different, and while they could, on a strict reading of those assurances, have
declared that the Sheikh’s disregard of their advice both in 1924 and in 1925
had rendered the assurances null and void, the fact is bhat they never did so. All
was changed by the arrest of the Sheikh and subsequent acts of bad faith on the
part of the Shah, and no purpose would have been served and the feelings of
an old and sick man, who still regarded His Majesty’s Government with friendli
ness and loyalty, would have been deeply wounded by any such action. The
assurances therefore (for what they were now worth)" were merely allowed to
lapse on his death. In June, 1944, however, Sheikh Chassib, Khazal’s renegade
eldest son, wrote to His Majesty’s Minister at Tehran calling attention to the e 4039 / 155 /
assurances and enlisting the suppoi t of His Majesty’s Government in the demand 34 / 1944 -
of Sheikh Khazal s family for the restitution of their rightful properties. His
Majesty s Government s attitude towards any suggestion that their assurances
extended after the death of Khazal to his family was explained to His Majesty’s
Charge d’Affaires in a despatch of the 29th August, 1944. After describing
why the assurances were not regarded in principle as having lapsed during the
sheikh’s lifetime, this despatch made the following points :—
(ft) His Majesty s Government need have no feelings of delicacy towards
Sheikh Khazal’s heirs, as they had had towards the Sheikh himself
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