Coll 28/12 ’Persia; Railways; Trans-Persian Railway’ [‎43r] (85/143)

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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOVERNMENT
(14<
PERSIA.
CONFIDENTIAL.
January 30, 1934.
Section 1.
[E 698/698/34] No. 1.
Sir R. Hoare to Sir John Simon.—(Received January 30.)
(No. 17.) ^ _ 0 .
gj r) Tehran, January 12, 1934.
’ I HAVE the honour to transmit herewith a copy of a note by the commercial
secretary recording certain comments made to him by Herr Horschitz-Horst, Die
German manager of the National Bank, who is disposed to take members of His
Majesty’s Legation into his confidence, concerning the recent call for tenders for
rolling-stock for the Persian State Railway (reported in despatch No. 206 Ovei -
seas Trade (B) of the 24th October last). Herr Horst’s suggestion as to the reason
for placing a substantial order for trucks, &c., with a British firm is interesting,
though wide of the mark. It is pertinent to add that Mr. Jacks, resident director
of the Anglo-Persian Oil Company in Tehran, has informed me that he thinks it
probable that the whole order for these requirements might go to the United
Kingdom.
2. Herr Horst’s comparison of the probable development of Japanese trade
in cheap articles with Germany’s trade before the war is illuminating and
probably reasonably accurate.
3. A copy of this despatch, with its enclosure, is being sent to the
Department of Overseas Trade (No. O.T. (h) 2).
I have, &c.
P TT TTO A T? P
Enclosure in No. 1.
Rolling-Stock for the Persian State Railway.
HERR HORSCHITZ-HORST told me that, so far as he was aware, over
forty offers had been received from foreign firms in connexion with the call for
tenders for wagons, &c., for the Persian Railway. He asked me whether British
firms had tendered, and I said I did not know as any offers would go direct to
the Ministry of Communications and I would not necessarily be informed.
With regard to the reported order for sixty wagons ordered from Metro-Vic-
Cammell, he was under the impression that it was for tank wagons. I said I did
not think this was the case, but that it was for ordinary covered wagons for the
State Railway. He then suggested that this was a form of ‘ ‘ douceur on the part
of the Anglo-Persian Oil Company for the recent agreement. I professed ignorance
on this point, as I do not yet know the full conditions under which the order was
placed. So far as I know, the offer was secured by the Anglo-Persian Oil
Company with the double object of encouraging British trade and assisting the
Persian Government by eliminating agents’ fees and other tortuous negotiations.
Herr Horschitz-Horst thought that British firms stood little chance of
getting any other orders in connexion with this call for tenders, since German
specifications as to type were required, but no specific details as to quality were
insisted on. He thought that German firms could make the truck of matchwood
at rock-bottom prices which would defy competition.
Herr Horschitz-Horst was rather interesting on the subject of Japanese
competition. He said that before the war Germany captured a large part of the
British and other foreign markets by exporting “cheap and nasty” articles,
which were comparatively worthless, but which sold readily. The obligation to
mark these “Made in Germany” did them no harm once the market was
obtained, as the quality of the goods was subsequently steadily improved.
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