File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎323v] (212/338)

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In negotiating this latter point Mr. Lloyd had risen in conversation from 1,000Z. to
l,300h and informed the sheikh that he could not go beyond that. On retiring from
the deliberations, however, he gave me authority, should I see fit, to use it in order to
ensure completion of the agreement without recourse to further reference home,
raise the figure to 1,5001
This I had to do by gradual stages and the point was eventually settled at that
figure.
As regards (ii.) I beg to refer to the penultimate paragraph of my letter of the
16th May to the sheikh, enclosed with my despatch of the 12 th June to His Majesty’s
Minister, which will doubtless have reached the Foreign Office before this communica
tion. It will be seen that the sheikh then pressed for the substitution of these words,
or their equivalent, in our assurances to him ; and he evidently saw his opportunity
in the negotiating of this agreement between himself and the oil company, under om
auspices, to get us indirectly committed to a dynastic guarantee. I had discussed tin
point repeatedly with him in the presence of Mr. Lloyd, endeavouring to make the
sheikh understand that the point was purely a political one already under corres
pondence and that he had no reasonable excuse for attempting to introduce a contro
versial political question of this nature into a purely commercial agreement with the
oil company, who were simply concerned to be assured that their agreement would
hold good both for his time and his successors. Who those successors might be was
no concern of the oil company, and they could not be expected to make any pronounce
ment upon the question in their agreement; much less could they commit Government
to father it.
I reminded the sheikh that I had undertaken to discuss this and other representa
tions of his with the Minister and that I would do so, but that it was useless and
unreasonable for him to expect to dispose of the question in the way he now sought to do.
As regards (iii.) Sheikh Khazal from the first assumed the attitude which I
leared he would, and insisted on the assertion of a clear undertaking that the
buildings should revert “ to the sheikh or his lineal heirs ” or words to that effect.
He was extremely heated on this point and argued it excitedly for a very long time.
It proved useless telling him that the buildings would be evacuated and left, and
that he knew whether the Persian Government would be in a position to take them
or not; or, that the present agreement would probably be seen at some time by the
Persian Government and that, apart from the fact that the company were quite unable
to insert the clause he wanted, even if they were able, it would be extremely short
sighted on his part to insert in the agreement a clause like that suggested, to which
the Persian Government would at once take exception. The sheikh would not be
persuaded and said that sooner than leave the matter in doubt he would much prefer
to insert the clause and let the Persian Government see it now and do their worst. I
did not, however, take him at his word and said that if he could not alter that view we
would reserve the point for a private discussion.
He dropped the demand in his final interview with me on my undertaking to give
him the separate assurance, in terms of which I attach a copy, backed by the threat to
which I shall presently allude. He would not be put off with any ambiguous language
and his ultimate argument was that unless he could be reasonably assured he would
not consent to the company erecting any buildings at all but would erect them himself.
This latter arrangement would not be satisfactory for the company and Mr. Lloyd had
informed me that he could not accept it in any case on his own authority. But it
would appear that the existence of this obvious alternative, whether employed or not,
would afford a sufficient answer to any claim on the part of the Persian Government to
the buildings. Moreover, should any question arise within the near future, resulting
from the inception of a constitutional government at Tehran, it would be a simple
matter to revise the agreement accordingly.
To have done so now would have held up the conclusion of the agreement
indefinitely.
The ultimate lever which seemed to turn the scale in all these matters was the
observation, or threat, that it was clear to me from the terms of their instructions that
His Majesty’s Government were anxious to help the company in this matter, and
intended that the agreement should be put through without fail at the present meeting,
and that they would be extremely displeased if I had to report that the sheikh had proved
unreasonable. I added on my own account that if after the concessions already made
by the company he did not complete the agreement the company would think it
hopeless to get fair terms from him, and would take their chance with the Persian
Government direct, simply informing the latter that they needed a tract of uncultivated