'File 60/20 I (C 93) Imperial Bank of Iran: Bahrain, etc' [‎68r] (137/409)

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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT.
PERSIA
CON FLDENTl AI
[E 2191/697/34]
Sir R. Clive to Mr. A. Henderson.—(Received A^pril 29.)
(No. 165.)
Sir, Tehran, April 18, 1930.
SINCE I last had the honour to address you on the subject of the Imperial
Bank of Persia, Messrs. Rogers and Wilkinson have had two interviews with the
Minister of Court—on the 14th April, and again on the 16th April.
2. At an interview which I had with his Highness on the 10th April, I handed
to him a memorandum which was based on recent conversations which had taken
place between Dr. Lindenblatt on the one side and Messrs. Rogers and Wilkinson on
the other.
3. Teymourtache read the memorandum and expressed disappointment with the
attitude of the Imperial Bank. They talked about co-operation, he said, but in
practice they did not appear to be willing to co-operate.
4. I said I thought he was very unreasonable about the attitude of the bank.
Mr. Rogers had given him a memorandum at his first interview which was couched
in very conciliatory terms and expressed the willingness of the bank to consider the
proposals which the Persian Government might make for the revision of the bank
concession. Teymourtache replied that, in his opinion, there was no particular need
to revise the concession. As regards the sole right to issue notes for the next
nineteen years, he considered that, on the whole, it would suit the Persian
Government better and cost them less if the Imperial Bank did this.
5. I expressed surprise at what his Highness said, and remarked that this
attitude appeared to be quite different to that which he had adopted eighteen months
ago, when the Prime Minister had publicly announced that the Persian Government
desired to see the old concessions revised. His Highness then said there were two
things which had very much annoyed him in the last few days. Firstly, a responsible
member of the Imperial Bank had been saying that the present state of affairs could
not continue and that the Persian Government would be bound to revise or rescind
the recent law on the control of exchange; secondly, Mr. Rogers had put forward
to Dr. Lindenblatt as the price demanded by the bank for giving up their right of
note issue no less than £1 million. This he considered bargaining in its most extreme
form. When he had asked Mr. Wilkinson some time ago what w T as the exact value
to the bank of their right of note issue, he had been told that it was as though the
bank bad the use of so much capital without interest. He had at once asked
Mr. Wilkinson whether, if the Persian Government lent the Imperial Bank the
amount of their paid-up capital, namely, £650,000, without interest, until the end
of the concession, that would be fair compensation? Mr. Wilkinson had not given
him to understand that the right of note issue had any further value than what he
had actually mentioned. When, therefore, Mr. Rogers told Dr. Lindenblatt that the
bank would give up this right for the sum of £1 million, he could not avoid the
impression that the attitude of the Imperial Bank had not changed and that their
talk of co-operation had no real significance.
6. I said to Teymourtache that Mr. Wilkinson had not perhaps mentioned the
indirect, or what might be called the moral, value of the sole right of note issue.
Circulation of the bank's notes in Persia was a permanent advertisement for the
bank; the people had absolute confidence in these notes; they knew they had ^
present them at any branch of the bank to receive the face value in silver. I had
no idea what would be the monetary equivalent to the bank of this, but it must be,
I imagined, a considerable sum. In any case, I said that when he talked o
co -operation I was not quite clear what he meant. How was the Imperial Bank to
co -operate when they were placed at such a disadvantage with regard to the Nationa
Bank ? It was essential to the Imperial Bank that they should be on an equality xor
ordinary business with the National Bank. As it was, the National Bank, with the
Government funds to fall back on to support their exchange dealings, were m a
privileged position. Teymourtache replied that the Government had placed a
Dr. Lindenblatt's disposal about £400,000 of their gold reserve; why could not the
Imperial Bank do the same in order to help Persian trade ? I said surely this was
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April 29, 1930.
Section 10.
No. 1.
[92 fi—10]