'File 82/34 II (F 94) APOC Concession' [‎100r] (188/362)

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THIS DOCUMENT IS THE PROPERTY OF HIB BRITANNIC MAJESTY'S GOVERNMENT
PERSIA.
May 22. 1933.
CONFIDENTIAL.
Section 1.
[E 2658/17/34]
No. 1.
Mr. Hoare to Sir John Simon.—(Received May 22.)
(No. 220.)
Sir,
Tehran, May 6, 1933.
I HAVE the honour to submit a brief report on the negotiations for the
renewal of the Anglo-Persian Oil Company's concession. Full details of a highly
interesting, and even dramatic, episode will be furnished to you by Sir John
Cadman when he reaches London, together with the text of the agreement as
finally signed.
2. Sir John Cadman, accompanied by Mr. P. G. Allen, his private secretary,
arrived in Tehran by air from Bagdad on the 3rd April, having previously visited
the oil-fields. He had been delayed by bad weather for some days, and the state
of the weather had also constrained his travelling companions, Mr. W. Eraser,
the deputy chairman of the company, and Dr. W. Young, the company's principal
medical officer, to make the journey by road. Dr. W. Idelson, the international
jurist, Mr. Duncan Anderson, the company's chief accountant, and Mr. L. N.
Lefroy, of the staff of the London office, had arrived a few days previously.
3. The Persian Government for their part had not failed to provide
themselves with an array of experts, and there arrived in Tehran about the same
time Dr. Hengeler, a Swiss lawyer of some repute, Mr. E. Clapp, who is described
as an " oil expert," and was in the employment of the Persian Government in
that capacity a few years ago, Mr. G. Inchbald, of the firm of Messrs. William
McClintock and Co., the chartered accountants, and Mr. Kessan, another lawyer.
These experts were kept severely in the background and, indeed, hardly consulted,
and apparently, as the result of orders from the Shah himself, it was decided that
they should not be present at the negotiations; they had a dreary time, as they
were entirely segregated from all foreign society while the negotiations lasted.
4. The negotiations were conducted by Mr. Eraser and Mr. Jacks, the
resident director, on behalf of the company, and by Mirza Seyed Hassan Khan
Taghizadeh, the Minister of Finance, Mirza Mohamed Ali Khan Feroughi,
Minister for Foreign Affairs, Mirza Ali Akber Khan Davar, Minister of Justice,
and Mirza Hossein Khan Ala, on behalf of the Persian Government. The first
few days were spent in extracting from the Persian negotiators a statement of
their desiderata, which for some reason were still in an embryonic state, and
Mr. Eraser firmly declined to embark upon any discussion of individual points
until assured that the whole of these desiderata had been stated. The Persian
demands proved eventually to consist of more than sixteen points, far more
fantastic in their scope and variety than the famous ten points communicated to
the company's representatives in Paris in February.
5. The Persian case was finally completed on the 17th April, and on the
following days is was subjected by Mr. Eraser to a lengthv and reasoned
criticism. In the words of Ala, he tore the sixteen points to shreds one after tne
other, and made it clear that they were entirely unacceptable and that no
agreement could possibly be based upon them. At the request of the Persian
Ministers themselves, the company's reply was embodied in a memorandum which
was communicated to them on the 21st April and was virtually a draft of a new
concession.
6. After this memorandum had been discussed the Persian Ministers stated
that an agreement on the basis of the company's draft was quite impossible, and
it was agreed on the 22nd April to inform the press that the negotiations had
failed. At Sir John Cadman's request, Eeroughi immediately asked the Shah to
receive him in a farewell audience, which took place the next morning (the
23rd April) at 10 a.m . It was, perhaps, not a pure coincidence that Sir John s
aeroplane was plainly visible from the Palace windows engaged in a trial flight.
However this may be, the Shah treated as a joke the statement that the Anglo-
Persian Oil Company representatives were leaving the next morning. The
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