Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎240v] (480/644)

140. The above served to illustrate the particularly cordial relations that
continued to exist between the two countries throughout the year. As recorded
elsewhere in this report, the Turkish Military Attache alone of the foreign
military attaches at Tehran was invited to attend the Iranian manoeuvres.
United States of America.
141. At the beginning of the year there was still no Iranian diplomatic
representative in the United States, the legation having been closed since the
incident in which the Iranian Minister was involved in 1935. r I here were signs,
however, that the State Department were not going to acquiesce indefinitely in the
rather anomalous arrangement under which they continued to maintain a
diplomatic representative in Tehran whilst having no Iranian representative in
Washington. Opinion in Government circles in Tehran was in favour of
reopening the Iranian Legation, but the Shah continued to decline to consider this.
Iranian affairs remained in the charge of the Turkish Embassy in Washington.
The question was no doubt discussed when Mr. Wallace Murray, head of the Near
Eastern Division in the State Department, paid a visit to Tehran in October
during the course of a tour through the Near East. In any event, some progress
was made at the end of the year by the appointment by the Iranian Government
of a charge d’affaires in Washington, though it remained to be seen whether this
step would be followed by the reopening of full diplomatic relations.
142. Another matter in which Mr. Murray was interested was the
possibility of concluding a commercial treaty between the United States and Iran,
a project which the State Department have had in mind for some years. But
Mr. Murray was obliged to reach the conclusion that such a treaty was not at
present feasible, as the Iranian Government could only consider an agreement
upon a basis of barter, a basis which would not be acceptable to the United States.
Mr. Murray was received in audience by the Shah during his stay in Tehran.
143. Early in May it was learnt, confidentially, that the United States oil
concessionaire companies in Iran and also in Afghanistan were about to renounce
their concessions and withdraw from both territories, as was permitted by the
terms of the concessions. Notice of renunciation of the Amiranian Oil Company’s
concession in Iran was formally given to the Iranian Government on the 12th June,
and it is interesting to note the reaction of the Iranian official to whom the notice
was handed, who immediately remarked that it was doubtless British influence
which had led the company to withdraw. There was, of course, no foundation for
such a suggestion. The main reasons for the Amiranian Oil Company’s action
appear to have been heavy losses incurred by the parent company in Mexico, which
disinclined them to risk further losses in Iran, and the intensive competition from
more favourably situated oil-producing areas. To date the Amiranian Oil
Company had spent about 2 million dollars in Iran, largely on surveying work—
drilling operations had not yet been begun. It seems also that the results of the
company’s surveys had not been too encouraging.
144. The impending withdrawal of the company was announced by the
Minister of Finance in the Majlis without comment, and the press was obviously
also told to refrain from comment. In accordance with the terms of the company’s
agreement, copies of all their maps, plans and profiles were handed over to the
Iranian Government. The company also turned over copies of numerous geological
reports. These are, of course, documents which at some future date may be of
considerable value to the Iranian Government.
Union of Soviet Socialist Republics.
145. Relations between Iran and the U.S.S.R. were somewhat strained
during the year. There were several causes of contention, of which perhaps the
principal one was the wholesale expulsion of Iranians from Russia. In February,
during a conversacion with His Majesty’s Minister, the Prime Minister said that
he anticipated that the total number to be expelled would be some 60,000,
and towards the end of the year the Ministry for Foreign Affairs mentioned
40,000 as the approximate number so far expelled. According to the Soviet
Ambassador (who incidentally himself mentioned the figure of 10,000), the persons
expelled came mainly from the Caucasus, and were, for the most part, small
merchants who would not assimilate Soviet ideas of social and commercial