891.6363 Amiranian/36

The Chargé in Iran (Merriam) to the Secretary of State

No. 1025

Sir: I have the honor to refer to the Legation’s despatch No. 1018 of March 18, 1937, relating to certain anxieties apparently felt by the Russian Government with respect to the Hart concessions.

In this connection it is of interest to relate that Mr. A. Massoud-Ansari, Chief of the Third Political Division of the Foreign Office, called at the Legation on March 24, 1937, on another matter. When this had been concluded, he referred to the question of the publication in Foreign Relations, 1922, of material relating to the northern oil concessions, and said that the written reply of the Foreign Office to the request of the Legation, as to whether or not there was objection to the reprinting of this matter, would withhold consent but would not state the reason.26 That reason was, he continued, that the question of the Khoshtaria concession was still open. This question is of course one of the subjects dealt with in the material in question.

Now, M. Massoud-Ansari is ordinarily close-mouthed. He had already vouchsafed this information over the telephone, consequently his voluntary repetition of it seemed to indicate that this matter weighed somewhat heavily on his mind.

I said, therefore, that I assumed the Khoshtaria question had no effect whatsoever, from the point of view of the Iranian Government, upon the validity of the petroleum concession that had just been granted to an American company.

He replied that it had none, but added that “certain interested Governments” had activated the question as a matter of principle, and that it was therefore still open.

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Knowing that the meeting at the Legation on March 17, reported in despatch No. 1018 of March 18, 1937, between Mr. Kartachov, the Counselor of the Russian Embassy, and Mr. Hart would be made known to the Iranian Government in one way or another, I told M. Massoud-Ansari quite frankly that, having heard rumors to the effect that the Russians were opposed to the concessions, I had taken advantage of an opportunity offered at a recent luncheon to ask a member of the Russian Embassy directly how the Russians felt about them. As his reply indicated that the Russians were particularly worried over the possibility of British participation in the companies, I had, at the request of this Russian, arranged a meeting between him and Mr. Hart at the Legation to afford an opportunity to Mr. Hart to furnish clarifications.

M. Massoud-Ansari asked what Mr. Hart had said as to the possibility of non-American participation, whereupon I repeated the substance of Mr. Hart’s explanation of the point as given in the memorandum submitted with despatch No. 1018.

M. Massoud-Ansari commented somewhat dolefully that this was substantially what the Foreign Office had been saying to “interested Governments.”

Piecing things together, the situation would appear to be somewhat as follows:

The Russians are worried over the possibility of non-American, and particularly British, participation, if not now then at some time in the future. The fact that stock will be offered for sale on the open market would of course make it possible for British interests to acquire shares, the number of which cannot be definitely stated at present, even though assurance has been given by Mr. Hart that the quantity would be unimportant. A share of stock is of course an evidence of ownership, of partnership, which in an ordinary corporation carries with it (theoretically, at least) a proportional though indirect voice in the management. This is not the legal case for the Amiranian Oil Company as respects shares owned by neither Americans nor Iranians, for the board of directors consists of Americans and Iranians and none other. The Russians might well argue on grounds of economic determinism, however, that those who own the shares, be they of whatever nationality, will control the directors.

The Russians may, therefore, be maintaining the validity of the Khoshtaria concession as a matter of principle to be utilized in case, now or later, it is learned that the British or the Germans are participating in the company.

In any case, the suspicion and dislike with which the Russians are regarded by the Shah are not likely to be lessened by their present attitude.

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On the other hand, the Russian Ambassador should feel better disposed personally toward the whole question (whether he does or not, I do not know) because he has been placed in direct contact with the representative of the American company concerned, and can thus report to his Government with a direct knowledge of facts and factors which he did not previously possess. If it be true that the signing of the concessions caught him unawares and he has been blamed for it, he has been given a boost which he badly needed.

It would appear that the Iranian Government is supporting the concessions to the full and that it will continue to do so.

Respectfully yours,

Gordon P. Merriam
  1. With despatch No. 1030, April 3, 1937, The Chargé in Iran enclosed a translation of a note of March 31 from the Iranian Ministry for Foreign Affairs asking that the documents referred to should not be printed in Foreign Relations (026 Foreign Relations/1168). In deference to the wishes of the Iranian Government the documents were omitted from Foreign Relations, 1922. A number of the 1922 documents on oil concessions in Persia are, however, printed in Senate Document No. 97, 68th Cong., 1st sess., “Oil Concessions in Foreign Countries”.