[Enclosure]
Memorandum by the Counselor of the Embassy in
Great Britain (Wheeler)
This morning His Excellency, Mirza Hussein Khan Alaï, Persian
Minister in Madrid, called upon me again with reference to his
conversation of July 18th.
He stated that he had just received news of the confirmation of his
appointment as Persian Minister at Washington and that he expects to
sail on the S.S. Berengaria on August 6th
next.
[Page 636]
He said that he had received further telegrams from his Government
with reference to the matters he had talked of with me during his
previous call. These somewhat modified or amplified the Persian
Government’s plan as then outlined.
He put particular stress in the conversation that followed upon
Persia’s desire to maintain the very friendliest relations with
Great Britain, and upon her lack of any idea of entangling the
United States in Persia’s affairs to her disadvantage. The
Anglo-Persian Agreement, signed in August 1919, with the proviso
(according to the Persian Constitution) that it must be submitted
for ratification to the Persian Parliament, had awakened suspicion
in France, and more especially in Russia, and in fact in the United
States itself. The Persian Parliament had refused even to consider
it, and finally, when the British Government was pressing for its
execution and had already begun to send experts to Persia, had, in
agreement with Great Britain, declared it to be null and void. Great
Britain, he said, saw very clearly the situation.
Another reason for Persia’s feeling against British advisors was the
rivalry of Russia, which at the present moment existed in Persia.
After the Russian revolution the succeeding Governments in Russia
had declared the old Russo-Persian Agreement of 1907 to be abrogated
and recently the Soviet Government had assured Persia of her desire
to arrive at arrangements which would not infringe upon Persia’s
liberty or independence. She had also written off Persia’s debt to
her and had given back to Persia’s keeping the concessions which had
been transferred to Russians covering roads, oils, mining, etc.
Russia is at present very jealous of Great Britain in Persia and
would consider the presence of British experts as a threat to
herself.
Persia, threatened and even invaded in the North, has been forced to
arrive at some modus vivendi with Russia and
self-protection requires that she take into account this Russian
jealousy of Great Britain. She desires to see no other Power
assuming a preponderance in Persia and the only alternative which
suggests itself to the Persian Government is to have the friendly
cooperation of the Government of the United States, which Power is
disinterested and possesses the entire confidence of the Persian
people and Parliament. It was thought also by the Persian Government
that the present friendliness of Great Britain’s feelings towards
the United States would make impossible any irritation over the
appointment of American experts in Persia.
His Excellency then touched upon the question of the loan of which he
spoke last week. His Government he said had concluded that Persia’s
need was for a substantial sum of (say) one hundred million dollars.
This would be used mainly to start works of reproduction. [Page 637] In order to establish a
financial equilibrium, the Government’s intention was to use a
portion of this sum, (something under three million pounds) for the
payment of the old national debt to Great Britain. Three quarters of
the whole would be devoted purely to productive works. The Persian
Government would guarantee this loan, not only by the income from
the Northern oil, but also by the income from the tobacco monopoly
(£200,000) and from Customs (£900,000.—this’sum being at present
greatly under par). Altogether there would be available an annual
sum of seven and one half million dollars to guarantee the loan.
The United States would have, also, further guarantees of moral
character; the financial advisor would be an American. Some
guarantee lay in the fact that the Persian Government was now
engaging Swedish officers to reorganize thoroughly the country’s
military forces and its gendarmerie.
The loan, he added, could be supplied in portions as needed, spread
over a term of years.
He next spoke of the National Bank which Persia desired to establish.
This was formerly the Russian Bank, instituted by the Russian
Imperial Government, which had been returned to Persia by the Soviet
Government. They were particularly desirous that this Bank should be
managed by an American expert. While this Bank would sell shares, in
the syndicates which would exploit the concessions, to Persian and
foreign capital, the Persian Government itself intended to
participate and to devote a certain sum under the loan to the use of
the Bank, as capital for the purchase of shares in these
syndicates.
In closing, His Excellency stated that owing to financial stress the
keen desire of his Government was to obtain an early advance of say
five million dollars on the larger loan projected—an advance which
might be guaranteed by the proceeds of the Southern Oil.
He again expressed his hope that the Ambassador would be able to see
him and give him some counsel—which was all the more desired by him
now that he was to take up the position of Persian Minister to the
United States.
