Papers of the Interdepartmental Conference on Middle Eastern Affairs [‎60v] (120/290)

9
Treasury, had taken a leading part in the negotiations with the
Shell, and the feature which specially concerned the treasury had
been before the Chancellor.
Air. Walter Long explained that the agreement had, in the
first place, been submitted to Sir Louis Mallet with regard only to
one point, and he had explained to Sir John Cadman that this was
not sufficient, and that steps must be taken to obtain the concur
rence of the Secretary of State for Foreign Affairs to the whole
agreement. Mr. Balfour s approval on the original papers was in
Paris.
The Chairman said that he w r ould discuss the point with
Mr. Balfour.
Mr. Barstow observed that he was not aware that the Treasury
had officially concurred in the Shell agreement. He did not
dispute it, but would prefer to refer the matter again to the
Chancellor of the Exchequer as an important question of taxation
was involved in it.
Sir Arthur Hirtzel said that the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. were correctly
described as having concurred in the agreement.
The Chairman said that the Foreign Office and the Treasury
w T ould settle these points departmentally, and that the Conference
would now proceed to discuss the agreement with the french
Government.
He read the Memorandum which had been prepared in the
Foreign Office, and remarked that the points raised as to the validity
of the existing concessions under the mandatory system and their
effect upon the future resources of the Arab administration were
the real questions at issue, as there could be no doubt that His
Majesty’s Government would receive the mandate for Mesopotamia.
Sir Arthur Hirtzel, in reply to a question by the Chairman,
explained that the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. had originally accepted the agreement
with the French on the understanding that it had the concurrence
of the Civil Commissioner at Baghdad. On Colonel Wilson’s arrival
at Paris, various alterations had been made in the original draft at
his suggestion, and he was then understood to have concurred in
the agreement, but it appeared from his remarks at the Inter-
Departmental Conference held at the India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. that he had since
changed his mind.
The agreement had to be considered by His Majesty’s Govern
ment from two points of view ; from that of advancing British
interests as a whole, and from that of safeguarding the interests of
the Arab administration. After careful consideration the India
Office had arrived at the conclusion that the inteiests of the native
administration were sufficiently protected in the amended draft, and
that the arrangement proposed was the -best practicable. Mr.
Montagu had therefore seen no reason to reconsider his original
concurrence.
The Chairman said he had understood from Colonel Wilson that
his fear was that the large interests involved were being handed
over to a few individuals representing a company whose shares were
believed nnt to be on the public market; which paid large dividends,
and which might possibly exploit these interests for the benefit of
its shareholders rather than fbr that of the Mesopotamian State.
Sir Arthur Hirtzel pointed out that the Arab State could
demand royalties, and that as regards the constitution of the company,
a large share was to be held by the Anglo-Persian Oil Company, In
which His Majesty s Government were directly interested.
Mr. Kershaw, in reply to a question by the Chairman, said that
the Mesopotamian administration would have an absolutely free hand