"ملف 60/20 I ‏(C 93) بنك إيران الامبريالية: البحرين وغيرها" [ظ‎‎٦‎٢] (٤٠٩/١٢٦)

the Imperial Bank without entering on any new field of activity. Mr. Wilkinson here
elaborated various activities which were open to the National Bank but impossible lor
the Imperial Bank, such as mortgages on rea property, the si k cocoon business from
Gilan, which passed through Russia and which owing to the absence ol reJ^ns with
the Soviet Government, was too risky for the Imperial .3aiik to un itake , the opium
business, which should obviously be a Government undertakiag now athe Persian
Government had established an opium monopoly. Bis Highness argued that these
undertakings were all speculative and that the new bank could not aflord to squander
its resources in unnecessary risks. I replied that as a national bank wit i le lesources
of the Government behind it it should more naturally have attempted to assist Persian
trade in any direction, especially in those directions which were not open to the
existing hanks. Finally, His highness said that the bank s protest appeared rather to
be for moral infringement than for legal infringement. 1 replied that whatever word
he might choose to define the nature of the protest, the result was that there was a
complete lack of cordiality between the National Bank and the Imperial Lank through
no fault of the latter. His Highness admitted the lack of cordiality and said it was
certainly most unfortunate, and lie would be only too ready to do what he could to
assist matters. He regretted that Mr. Wilkinson was going away, as he would
otherwise have got Mr. Wilkinson and Dr. Lindenblatt together m his presence m
the hope of clarifying the position. I said that Mr. Wilkinson was going on leave at
once and that he needed his leave jmd that I imagined there could be no question of
his putting it off again ; he would be back in the early autumn. His Highness said
that as soon as ever he came back he would take the matter up, as he considered iti
essential that the two banks should be on friendly terms. Meanwhile, he would discuss^
the matter with Prince Firuz and with Dr. Lindenblatt. He drew attention to the fact
which Mr. Wilkinson readily acknowledged that he had in the past always done his
best to settle differences between the Imperial Bank and the Ministiy of L inance.
4. Finally, he expressed the hope that I would not insist on leaving this letter 01
protest with him as, in that case, the letter would have to be submitted to the C ouncil
of Ministers, and I now knew" in advance what the answer would be. In the circum
stances I realised that it would serve no purpose to leave the letter and to be sent m
due course an entirely unsatisfactory reply. i t • i
5. 1 have no reason to believe that his Highness is himself hostile to the Impeiiai
Bank and I am convinced that he realises the necessity, in the interest of Persia, for
good relations between the two banks. I trust, therefore, that the board of the
Imperial Bank will agree that it is preferable to rely on the goodwill of the Minister
of Court and his promise tu clear up the relations between the two banks rather than
to send in the protest and merely to receive an uncompromising answ 7 er.
(j. I should add that in the course of this conversation his Highness spoke
somewhat bitterly of the fall in the kran exchange, some 12 per cent., as he put it, in
the last three or four months, i.e., from 48 to ^4 to the £ sterling. I asked him
if he accused the Imperial Bank of beincr responsible for this fall in the exchange.
He said no, and Mr. Wilkinson then tried to explain the reason for the fall. If the
Persian Government had not insisted in keeping all their sterling reserve intact and
had been willing to use it for maintaining the exchange, it would have been
possible to keep the latter round 50 to the £ sterling. His Highness replied it was
the policy of the Government to maintain this reserve in a gold currency—part, he
said, w r as banked in Germany and part in Switzerland at 6 per cent. He then enquired
whether, if the Government did buy krans with a part of this reserve, Mr. Wilkinson
would guarantee the exchange remaining tixed for a certain period round 50.
Mr. Wilkinson said this was quite impossible. The rate of exchange must depend on
the balance of trade, and while the Railway Syndicate was buying abroad the supplies
for the railway, Persian export trade was not sufficient to balance these imports. His
Highness admitted that he was not an expert in exchange questions and merely said
the position w T as very unsatisfactory and something must be done.
7. The Persian Government are, I understand, again seriously thinking ot
establishing a gold standard on the advice of Dr. Schniewind, the German Financial
Adviser, and are anxious to discuss the matter in the autumn. It is obvious that the
conversion of the Persian currency from a silver to a gold basis could not possibly be
effected without the help and support of the Imperial Bank. In any case, to sell their
present stock of silver of some 50 million to 60 million tomans and replace it by gold
would, Mr. Wilkinson tells me, involve a loss of 25 per cent., say £2 million to
£3 million sterling. It seems to me, therefore, that a favourable opportunity nwy
present itself in the autumn for the Imperial Bank to regularise their relations with