Ext 5000/41(1) 'Persia: situation leading up to, and after, the Allied occupation' [‎243v] (486/606)

to expel the German colony. On the contrary, such
economic sanctions would take a long time to produce
any effect at all. ^he goods which it was proposed
to withhold might he divided into two categories: (a)
those whose shortage would effect the Iranian populace,
and (b) those whose shortage would effect the Shah’s
schemes of industrial development and other government
enterprises. As regards (a), attention was drawn to the
view expressed by the Government of India in paragraph 4
of their telegram No.3690, that the Iranian populace would
not long sustain being deprived of such goods as sugar,
tea and piece goods and that they could be made to
understand that the restoration of the supplies depended
solely on the expulsion of German technicians and tourists.
The meeting thought that, while this might have some
effect in the long run on the Iranian populace, it was
doubtful whether the result would be to benefit British
interests, but on the other hand, it was absolutely
certain that German propaganda would make the most of our
action. As regards (b), it was pointed out that a
refusal to supply cement etc., would not seriously affect
the Shah's development schemes. In any case, the United
Kingdom Commercial Corporation were committed to supplying
45,000 tons of cement and 30,000 tons of sugar
(negotiations were now in progress regarding large amounts
of tea), and a refusal now to supply these goods could
not be made without breaking contracts, involving serious
breach of faith. Moreover, the United Kingdom Commercial CorpcratLcn
would lose the wool bought in Iran, which has cost us between
£250,000 and £500,000 sterling. It was also pointed out
that Iran has been able since the war began to obtain so
few of her supplies from the United Kingdom, that any
refusal now to supply goods would merely be regarded as a
further sign of our inability to export.
The meeting agreed that there was no objection to
Sir Reader Bullard’s suggestion, in his telegram No. 454
/(Part III),