Ext 5000/41(1) 'Persia: situation leading up to, and after, the Allied occupation' [‎294v] (588/606)

also want large quantities of machinery, some of which.they have
I think recently been obtaining from Germany, Germany will no
doubt now have difficulty, for communications reasons, in sending
any machinery to Persia until they have beaten Russia. We cannot
however offer to supply instead. Persia also normally obtains
large quantities of cotton piecegoods from Japan. In view of
the withdrawal of the Japanese shipping from the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran.
these will be cut off, but I am not certain that India will be
able to supply unless the Government of India take measures to
restrict the consumption of piecegoods in India itself and thus
make more of their productive capacity available for export.
4. As regards Persia's imports we have7strangle4^hold as regards
shipping. There is very little shipping in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. and
what there is is under the control of ourselves or the United
States.
5. I do not think that we can bring any pressure to bear in
regard to Iran's exports. These are chiefly raw cotton, raw
wool, oilseeds, gum, ravins and almonds. If ifce hold off the
market the Germans would certainly continue to buy in the hope
that after they have disposed of Russia they would be able to
transport their purchases to Germany.
6. My conclusion therefore is that Persia has probably got to
tighten her belt in any case, because owing to shipping difficulties
she cannot obtain her full requirements from overseas. This forms
a weakness in the policy of "inducements’* which the Foreign Office
have hitherto been dangling before the Shah, because we shall never
be in a position to i^^et ^-ll Persia's requirements. If however we
abandon - possibly y - this policy of inducements we could
squeeze Persia very hard indeed so long as Russia stands and assists
us in exercising this pressure. If however Russia collapses we
shall loose a great many of our weapons.
7. All the cards, howeverj are not in our hands. For example:
OAI* We always have the fear that if we annoy the Shah he
will interfere with the Anglo-Iranian Oil Co. If, however, we lead
the Shah to believe that we would react to such interference by
military occupation of the wells, the Shah loses this card.
11 Consequently a policy of pressure would have to be.accompanied by
|Jsome indication of our military readiness to seize the wells.
(b) Transit traffic to the U.S.S.R . If as seems probable the
Japanese prevent ships from going to Vladivbstock, our only means of
sending Supplies to Russia will be via Persia. The present
indications are that the Persians will allow transit/ through their
territory of goods other than munitions of war. They are, however,
anxious to see the Germans beat the Russians, and consequently,
either on their own initiative or under German pressure^they may in
practice prove obstructive. It is of course difficult to bring
..economic pressure on Persia by stopping her supplies at the same
|time as we propose to use her territory as a channel of communication
? for other goods to Russia. Moreover, if we put pressure on Persia
she may stop supplies going to Russia altogether. We would then have
to increase our pressure, and possibly - if we attach sufficient
importance to keeping Russia supplied - even over-run th*e country.
(c) We are at present trying to pre-empt part of the Persian
wool clip in order to prevent it all being sold to Germany. 'This is
a factor which has influenced the contracts recently made for sugar
and cement, but it is of course much less important than (a) or (b).