'F 80 File 82/34 I APOC Concession' [‎145v] (253/436)

'It 1 * u
necessary to repeat the repeated statements. Should the Persian Government rts^ 11
fail to conclude a new and satisfactory agreement with the company, and find it
necessary, with a vieAv to substantiating their right to cancel the D'Arcy
Concession, to refer the case to the court, they (the Persian Government) will offer J One
their arguments in detail; and it is to be regretted that the reluctance on the part yl)^
-of the officials of the Imperial Government to enter into controversy and dispute, |iat ^
in view of the goodwill they (the Persian Government) have had in the matter JijU
(and this fact caused me not to give in my note in detail the reasons for the action Jtrt
of the Government in cancelling the D'Arcy Concession) has been interpreted by Lently
the officials of His Britannic Majesty's Government as showing that the Persian jjsfortl
Government have nothing to justify the genuineness of their action. Even now,
in order not to allow His Britannic Majesty's Government to think that the
Imperial Government refuse to mention the reasons for the cancellation of the
concession, I hereby enumerate them briefly :—
In addition to the fact that the D'Arcy Concession has not in itself been
drawn up in such a way as to be compatible with the interests of Persia, and that
the legitimate rights of the country have been tampered with at the time of the
grant of the same, the said concession was secured at a time when the interests
and welfare of the country were not being taken into view at the time of granting
such concessions, and when those who used to obtain these concessions took
advantage of the ignorance of the authorities of fhat time. Furthermore, in
securing those concessions, all sorts of threats and coercive measures were being
imposed at those times in such a way that, as a result of these threats and coercive
measures, the authority who granted a concession was not free to abstain from
granting such concessions.
Your Excellency and His Britannic Majesty's Government will admit that
the world of to-day does not accord any validity to agreements and concessions
which have been imposed in such a manner, and does not consider the same as
binding.
Apart from the defects mentioned above, the behaviour and activities of the
oil company towards the Persian Government are not even compatible with (the
terms of) the same unsatisfactory concession, and the company has always failed
to respect the rights of the Persian Government in accordance with the same bad
and invalid concession, and has thus brought about a situation leading to the
suppression of the rights of the Persian Government. For instance, according
to the D'Arcy Concession, the company has had to pay to the Persian Govern
ment 16 per cent, of all its income, as well as of all the income of the other
subsidiary companies without any exception. The logical result of this under-
^kmg should have the right of superintending the expenditure, the amount of
which should be deducted from the company's income before reaching the net
profits, as well as the right of expressing their views in regard to the necessity
or otherwise of the said expenditure. Otherwise, the revenues of Persia would
always be exposed to the danger of diminution and decrease. But, unfortunately,
the oil company, which is noted for its prodigality and extravagance, has never
agreed that the Persian Government should have the right of supervising the
company s expenditure before the payment of the royalty. I need not say that
most of the unnecessary expenditure which is made by the company produces a
great effect on the royalty, and was causing the said revenues to fall to a ridiculous
amount.
Further, the company has hitherto never produced, either to the Persian
government or to their representative, its detailed accounts, nor the vouchers
for its expenditure, and that of all its subsidiary companies, so that the Persian
* 1 1 t/ ^ ^ y kj Ks UJ.±CIj U U-LJ.*
Government might be assured of getting their proper revenues. The company
has also so far refused, m contravention with the explicit terms of the concession,
to P^y share of the Persian Government from the income of all of its
1 • f • . r 1 — J-J-Ji^v^JLULC' VJ_L Cl/11 UJL 1 to
subs'diary companies. It has even consented to accord to some of these companies
n ponrmt lm P orta11 ^ finaudal help out of its income, and has brought the same into
to w tU f' f ^ S thus deCTe ? sed the Persian Govlrnmenfs income
' The company has consequently proved that it is in
aSZme"" 0f th ° "™ 0n ' " d l » , ™» d "-<!"•«« >«-
Should I wish to give you instances of the lack of sincerity on the part of
the company in its dealings with the Persian Government, I should have to