Coll 28/97(1) ‘Persia. Diaries. Tehran Intelligence Summaries.’ [‎250v] (500/807)

sixty heavy bombers. They are now prepared to pay cash. They have also
talked vaguely about the erection of an aircraft factory An East India Company trading post. in Iran for the manu
facture of American machines, but this scheme is apparently dependent on ine
purchase of the American aircraft specified.
4. British Interests.
(i) It is hoped that the Anglo-Iranian Oil Company crisis will soon be
settled. The company proposed that they should make advances to the Imperial
Government for a period of three years, such as to bring the royalties up to a
specified figure, repayment to begin when the royalties calculated according to
the terms of the concession actually reached that figure, and to be effective out
of the excess over that figure. This was not satisfactory to the Imperial Govern
ment, who feel that the falling off of royalties is due to the policy of His Majesty’s
Government, and the agreement will probably provide for the payment of such
sums calculated in the manner explained above, but not recoverable. The
Imperial Government have no objection to the formulation of any reserves the
company think necessary in order to preserve their concessional rights.
(ii) Six British Indian locomotive drivers, working under contract for the
Iranian State Railways and employed on the southern section, have received
notices from the railway administration informing them that, unless they adopt
Iranian nationality, they will be replaced by Iranians. No such notice has been
served on other foreigners employed in the same section of the Trans-Iranian
Railway.
Enquiries are being made into this apparent case of discrimination.
5. Anglo-Iranian OH Company.
Reference Intelligence Summary No. 14 (current), paragraph 8 . The cause
of the accident is still under investigation, but it is now almost certain that it
was due to an electric spark. Welding was going on 15 miles down the line, and
it has been proved that a faulty connexion in the process of welding will cause
a spark to jump in a coupling at least 3 miles away. It is also possible that the
pipe-line had become charged with static electricity by the friction of the oil and
of impurities in the form of grit passing through it.
6 . French Interests.
Acting on instructions from the Ministry of War at Vichy, the French
Military Attache has demobilised the two French Reserve officers attached to his
staff, and the extra clerical assistance engaged on the outbreak of the war. The
French Military Attache now has only one clerk and a typist in his office. He
has been ordered to render his reports as in peace time direct to the French
General Staff. He is apparently not in touch with the French military authorities
in Beirut.
7. German Interests.
For the past month German activity in Iran has been very much under the
surface. There is no longer talk of the German “ Fifth Column ” in Iran and
it seems that the German colony has received strict orders to show that they are
really interested in commercial activity in Iran. This commercial drive is very
strong. The German Legation has officially asked the Iranian authorities, as well
as firms of neutral countries under their protection, to send enquiries to them
for all kinds of goods they may require, and promise to supply these quickly
and at moderate rates.
Since Molotov’s speech, however, German political activity is reported again
to be rising.
8 . Soviet Interests.
(i) Consternation was caused in Iranian official circles by the reference in
M. Molotov’s speech to the alleged flight over Baku of two foreign aeroplanes
coming from the direction of Iran, towards the end of March. The Minister for
Foreign Affairs told His Majesty’s Minister that this accusation had been made