Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎290v] (580/644)

2
inclined to pretend that their allotted task was completed, on the grounds that
they were not called upon to supervise the execution of such measures as they had
recommended. The American police adviser died after accomplishing nothing
at all, and was not replaced. The American gendarmerie advisers, though able
and invested with wide powers, battled against incredible corruption without
any appreciable sign of headway. And evidence accumulated on all sides that
the Russians not only viewed this general deterioration with pleasure, but werj^
actively engaged in accelerating its temfo, working mainly through the agency An office of the East India Company and, later, of the British Raj, headed by an agent.
of the Tudeh party, and a number of more or less genuine labour organisations.
Of the many groups which were bent on stultifying the work of the Millspaugh
Mission, the Tudeh, whose subservience to the Russians became more and more
open, was by far the most virulent and—by reason of its Soviet-inspired internal
discipline—effective. Innumerable scurrilous newspapers, believed with good
reason to be on the Russian pay-roll or supplied with Russian newsprint,
unceasingly attacked as “ reactionaries and Fascists ” all those, whether Persian
or foreign, who made any effort to stop the rot. Seyyid Zia ed-Pin Tabatabai
(recently returned to Persia after twenty years' exile in Palestine), perhaps the
only politician enjoying sufficient personal prestige to have the least chance of
effecting serious reforms, was the object of their most venomous slander, being
invariably represented as a British agent.
4. Throughout the northern zone the Russians steadily tightened their grip.
* They openly encouraged the separatist tendencies endemic in Azerbaijan. They
constantly interfered with the attempts of the Persian police and local troops to
preserve law and order. They refused to allow the Persian Government to
despatch additional troops to the unruly Kurdish areas on the Turkish frontier. *
They obliged the local governors to expel Persians hostile to the Tudeh. Their
presence, if not their active policy, prevented the northern provinces—by far the
richest in the whole of Persia—from contributing a fair share towards the
country’s economic prosperity.
5. Even outside “ their ” zone the Russians were guilty of extensive
economic exploitation. Although towards the beginning of the year they
abandoned their original refusal to pay customs dues on imported goods, they
maintained their refusal to allow Persian customs officials to check, or even to
see, the goods imported. They demanded cash down for all sales to the Persian
Government, but were most dilatory in paying for their own purchases. Having
originally obliged the Persian Government to supply munitions and small arms
without any discussion of prices, they eventually consented to pay on terms which
involved the Persian Government in definite loss—and, even on that unfavourable
basis, had by the end of the year paid only about one-tenth of what they owed.
Having been prevented by Dr. Millspaugh from repeating the arrangements of
the previous year for the barter of Persian rice against goods, some of which were
unsaleable—arrangements which had involved the Persian Treasury in a loss
estimated at 250 million rials—they effectively hampered his attempts to achieve
financial and economic reforms in the northern zone by refusing or delaying the
issue of passes to his assistants. Moreover, they sold their goods to merchants
at such prices and on such a scale as to promote inflation, and one commodity
; they sold, viz., sugar, must have been rendered surplus to Soviet needs by
lease-lend supplies if it was not actually, as some informants believe, lease-lend
sugar repacked in Soviet wrappers. They flouted the American efforts to direct
road transport into essential channels by using Iransovtrans (a Soviet Government
organisation) for unlicensed commercial transport business both within and
without the northern zone. They ignored Persian “cabotage” rights by
operating unlicensed Russian aircraft on a commercial basis on internal Persian
lines. In short, their economic policy, no less than their political influence, was
uniformly indifferent to Persian sovereignty and prejudicial to the countrv’s
welfare.
6. Towards the end of the year, it is true, the Russians considerably over
reached themselves by putting forward a categorical demand for the immediate
* grant of extensive oil concessions the terms of which were to be discussed there
after, and this demand, backed by a most violent campaign of intimidation,
galvanised even the moribund 1 ersian body politic into a positive reaction and
some show of national solidarity. But nothing, unfortunately, led one to suppose
that they would not have succeeded immediately had they employed slightly less
clumsy tactics; or that they would not ultimately achieve*their object by sappino-
methods. Soviet, exploitation of the North Persian oil would unquestionably
spell the end of real Persian sovereignty in what is alreadv known—inaccurately
but not without cause—us “ the Russian zone ahd once these rich northern