File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎359r] (283/338)

[This Document is the Property of His Britannic Majesty’s Government.]
PERSIA.
CONFIDENTIAL.
[20079]
[May 28.]
Section 2.
No. 1.
Anglo-Persian Oil Company to Foreign Office.—{Received May 28.)
Winchester House, Old Broad Street, London,
r ’ * ci i , , / May 27, 1909.
Ab he was about to leave^wn yesterday morning, Sir Hugh Barnes sent on to me
yonr deim-offioia! letter of the 24th instant, and its inclosures, requesting me to deal
with it m order to save time. °
. r. re & ai( ^ s amount of the proposed loan, the present suggestion to increase
it from 5,000/. or 6,000/. to 10,000/. does not in itself upset me, but from the form in
winch it comes before me, it would look as though the proposed loan to the Sheikh from
this company through the Foreign Office were not, as we understood that it was only a
portion of a loan from the British Government to the Sheikh. In this connection
I would refer you to my letter to Sir Charles Hardinge, dated the 28th of last month,
which It tter was drafted m your Office for my signature, and of which the following is
an extract :—
.... if the proposal is agreeable to the Foreign Office I am t<> suggest that this
company would contribute the sum of 5,000/. and 6,000/. through He Foreign Office
towards the advance . . . .”
Am 1 right in drawing the above inference ? I ask, because if I am it alters the
complexion of affairs to such an extent from what I put before my directors when I
received from your Office the letter which I was authorised to sign on the 28th April
that I shall feel bound to consult them again.
3. If, on the other hand, whatever sum ive advance is to be this company^
contribution through the British Government towards some larger sum to be advanced
by Government itself, then I am ready, if and when the terms of the lease are made
satisfactory, to raise our contribution from 6,000/. to 10,000/.
4. The terms on which we would contribute 6,000/. or 10,000/. are for a loan
bearing interests at 6 per cent, per annum and repayable in ten years, i.e., either at the
end of ten years in full or by instalments as may be arranged, and a provision of the
loan might vrell be that, in the event of default of payment by the Sheikh of any
instalment of capital or interest, the same shall fall to be repaid, plus interest at 6 per
cent, per annum, out of future instalments of rent as these become payable • by the
company to the Sheikh.
5. I shall be prepared, as soon as satisfactory terms are agreed upon, to remit the
money in question by telegram to Persia.
6. With reference to Major Cox’s telegram No. 486 of the 18th May, I enclose a
copy of the letter from Mr. Reynolds, dated the 30th April, to which he alluded, of the
inclosures thereto, and of Mr. Reynolds’ letter to us of the 24th April explaining the
position.
7. Major Cox telegraphed under a misunderstanding when he said that no repre
sentative of the syndicate had inspected the land that we want. We sent Mr. Andrew
Campbell from Burmah to Persia last November, and the enclosed copy of a letter, dated
the 27th November, 1908, from him to my colleague on the board, Mr. James Hamilton,
will show you that he went very fully into the subject.
8. En passant I wmuld ask you to note that all the land that w^e require is at
present uncultivated, or, as Mr. Campbell puts it, “ desert,” and that in clause 3 of our
concession from the Government of Persia is the following:—
“ The Government also grants to the concessionnaire the right of acquiring all and
any other lands or buildings necessary for the said purpose with the consent of the
proprietors on such conditions as may be arranged between him and them without their
being allowed to make demands of a nature to surcharge the prices ordinarily current for
lands situate in their respective localities.
9. Mr. Reynolds is not of opinion that 2,000/. per annum “ would not be unreason
able.” On the contrary, though he wrote on the 24th April that in the then
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