Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎76r] (151/644)

(D) Imperial Airways.
325. The export of the stores mentioned in paragraph 282 of 1932 report
eventually took place without any other condition than the payment of a large
sum in respect of road tax upon the furniture exported from the rest-house
at Task.
326. In April the Ministry for Foreign Affairs complained privately that
Imperial Airways aeroplanes were regularly passing over Persian territory at
Jask on their way up and down the coast. Instructions were accordingly given
to the company’s pilots not to fly within 3 miles of the Persian coast, except when
the safety of the aeroplane was involved.
327. From the discussions preceding the issue of these instructions, it
appeared that there was no generally accepted right of innocent passage over, as
well as through, territorial waters; but that, until the 20th April, 1934, when
Persia’s membership of the International Air Navigation Convention came to an
end, the company’s aeroplanes, like all British aeroplanes, enjoyed in theory the
right of making occasional flights over Persian territory.
328. In May Imperial Airways approached His Majesty’s Government with
a view to secure permission from the Persian Government for the use of the
aerodrome at Jask in case of emergency. The reason for this request was that
no suitable emergency landing-ground had yet been found on the eastern side of
the Musandim peninsula, and that their aircraft occasionally encountered strong
head winds on their westward flights, which made it very difficult to reach
Sharjah from Gwadur without running short of petrol. His Majesty’s Govern
ment in the United Kingdom considered, however, that it would be undesirable
to suggest to the Persian Government that the company were not entirely
independent of their goodwill in the operation of the Arab coast route, and that
if an aeroplane were ever driven by stress of weather to make a forced landing
on the Persian coast, the Persian Government could not, as a supposedly civilised
Power, make difficulties.
(E) Imperial Bank of Persia.
Political.
329. It was generally supposed that, when the Anglo-Persian Oil Company
dispute was settled, the Persian Government might make some attempt to modify
the concession of the bank also, although, since the note issue had been withdrawn,
there was little in the concession to excite the envy of the Government, except
possibly the clauses exempting the bank from all forms of taxation and
authorising them to engage in all forms of business (a provision invoked at the
time of the exporters’ exchange dispute in 1931).
330. Viewed in this light a letter which the Administrator-General of
Customs, acting on the instructions of the Minister of Finance, sent to the bank
on the 11th May (eleven days after the signature of the Anglo-Persian Oil
Company’s agreement), informing them that in future it would not be possible
to exempt articles imported by them from the payment of customs duty, may
have been a ballon d'essai, to be followed by further encroachments if it met
with success.
331. The bank, in reply, quoted article 5 of their concession, which stated
that they would be exempt from every kind of tax and duty. At the same
time His Majesty’s Minister informed the Minister for Foreign Affairs that this
disregard of the bank’s rights was bound to create a deplorable impression in
London, and pressed him to intervene with the Minister of Finance. These
representations were repeated during the following days, and His Majesty’s
Minister informed the Minister for Foreign Affairs that if no satisfaction were
obtained he would raise the question at an audience of the Shah, which had been
fixed for the 3rd June. On the 1st June, however, the Minister for Foreign
Affairs informed him that the instructions had been withdrawn. It is probable
that the Minister of Finance was only induced to go back on his decision by fear
of annoying the Shah with another dispute at a moment when he was particularly
well disposed to His Majesty’s Government.
[10152] '' E 2