"F 80 ملف 82/34 I امتياز أ.ب.و.ك" [و‎‎١‎٨‎٨] (٤٣٦/٣١٨)

THIS DOCUMENT IS JESTY'S GOVERNMENT
PERSIA.
December 30, 1932.
CONFIDENTIAL
S ection 2.
[E 6907/3880/34]
No. 1.
Mr. Hoare to Sir John Simon.—{Received December 30.)
{No. 545. Very Confidential.)
Sir,
Tehran, December 19, 1932.
IT is gradually becoming possible to hazard a fairly definite opinion on the
subject of the circumstances leading up to the letter from the Minister of Finance
of the 27th November to the Anglo-Persian Oil Company cancelling the D'Arcy
Concession, and to state that it is almost certain that the Shah had not consulted
any of his Ministers before imposing his decision on his Government.
2. My first impression, which was almost entirely based on speculation, was
that the well-known rivalry between the Minister of Court and the Minister of
Finance had been a considerable factor. I imagined that the Shah had taken
Taqi Zadeh to task for the long delay in bringing the company to book, and had
obtained from him under severe pressure an admission that he had not yet got his
proposals into final form and was in some doubt as to how to proceed. This
admission had provoked an angry outburst from the Shah, who threatened to
take the matter out of the hands of the Minister of Finance and once again to
entrust it to Teymourtache, who had at least obtained from the company
last winter a promise of £1 million in settlement of various outstanding issues.
Thereupon, Taqi Zadeh, perturbed lest the fulfilment of this threat should mean
that his long-drawn struggle with Teymourtache result in final defeat, either
proposed or acquiesced in the cancellation of the company's concession.
3. I made a record of this hypothesis on the 3rd December, but it was
altogether too hypothetical to record officially.
4. The following information now given to the commercial secretary by
Dr. Friedlieb (see paragraph 10 of my despatch No. 505) who has been in frequent
■contact with Teymourtache and other members of the Government in connexion
with his business proposals, is, I think, as near as we shall get to the truth. I
•cannot say how much of his story is based on actual statements made to him, but
in this country statements are no guarantee of truth and the conjecture of a
shrewd foreigner is as reliable as anything else.
5. On the 26th November Taqi Zadeh arrived at the Council of Ministers
with draft proposals for communication to the company in his pocket.
Immediately after he arrived, the Shah entered accompanied by Teymourtache.
His Majesty promptly started abusing Taqi Zadeh for his inability to bring the
company to their senses and gradually worked himself up into a passionate rage.
After some hesitation, and in the absence of any sign of life from Teymourtache,
Taqi Zadeh stammered out that the company alone were to blame for the failure
of the negotiations, whereupon the Shah exclaimed that the only thing to do was
to cancel the concession, and there and then proceeded to dictate to Taqi Zadeh
a full outline of the letter to be communicated to Mr. Jacks. He then left the
room.
6. Explanations ensued between Taqi Zadeh and Teymourtache, the former
of whom had imagined that, as Teymourtache came into the room with the Shah,
he was aware of the Shah's intentions and that Teymourtache had consented in
order to discredit him, whereas Teymourtache, to whom the Shah had not in fact
said a word regarding his intentions, had thought that the boot was on the other
s leg. Thereupon Taqi Zadeh and Teymourtache proceeded to draft a further
paragraph for inclusion in the letter, expressing the readiness of the Persian
Government to embark on negotiations for a new concession. This passage was
submitted to the Shah by Teymourtache, who, when the Shah refused to accept it,
threatened to resign and eventually induced His Majesty to give way.
7. Partial corroboration of all this is furnished by the fact that we know
from Mustapha Khan Fateh's conversation on the 2nd December with Taqi Zadeh
(of which a record will have been supplied to you by the Anglo-Persian Oil
Company) that Taqi Zadeh did not approve of the cancellation of the concession.
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