Coll 28/65 ‘Persia. Perso-Soviet Commercial Relations.’ [‎154r] (308/482)

THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOY
PERSIA.
If
CONFIDENTIAL. / Section 1. f/>
[E 4043/30/34,] No. 1. Hf
Sir R. Hoare to Sir John Simon—(Received June 19.)
(No. 278.)
gi r> Tehran, June 1, 1934.
WITH reference to my despatch No. 205 of the 20 th April on the subject
of Soviet-Persian trading relations, I have the honour to report that M. Eliava,
described as Assistant Commissioner for Soviet Foreign Trade, is at present on
a visit to Tehran. No mention of trade negotiations between the two countries
has as yet appeared in the press and, according to the Ministry for Foreign
Affairs, none have taken place, but M. Eliava was entertained to dinner by the
Director-General of the Department of Commerce. I understand that the Soviets
are prepared, under certain conditions, to purchase the rice crop from the Royal
estates. The Persians are anxious that the Soviets should at the same time take
up a large quantity of dried raisins which can find no market in Europe, but
the Soviets are apparently only prepared to buy at ruling prices, which are
disastrously low and would entail serious losses to the producers.
2 . The price-cutting activities of the Soviets with regard to cotton piece-
goods reported in my despatch under reference have now been adopted in Tehran,
where reductions of 15 per cent, to 20 per cent, have recently been effected. It
is, however, doubtful whether even with such substantial reductions effective
competition to the Japanese articles can be offered.
3 . Another price war in which the Soviet trade interests are involved in the
Persian market is in respect of mineral oils. The Anglo-Persian Oil Company
were able during the recent Soviet-Persian trade dispute to introduce their
products into areas which had been Soviet preserves. Attempts of the Soviets
to regain control in these areas and to extend their sales by price-cutting have
led to retaliation by the British company. As a result prices of petrol have been
reduced and those of kerosene are about 50 per cent, lower than those formerly
prevailing. I understand that the Anglo-Persian Oil Company have been
delivering kerosene for sale at Resht at 8 rials 50 dinars per tin, or rather less
than the cost of transport.
4 . A local incident which is symptomatic of the present unsatisfactory
relations between the two countries is reported by His Majesty’s consul at
Tabriz. Various claims of some years’ standing which are said to amount to
about 100,000 tomans 10,000 Persian dinars, or a gold coin of that value. (about £12,500) having been submitted to Bureau Perse by
Tabriz merchants, the Soviet institution offered payment in paper chervontsi.
This was refused, the claims were taken to court, and decision in the first case
considered was given in favour of the merchant. Bureau Perse having still
refused to pay, the Department of Justice sent armed police to recover the money
due, having apparently decided to treat the refusal as a declaration of
bankruptcy. The director of Bureau Perse withdrew to the Soviet consulate-
general, the office was closed and sealed and two armed police posted as guards.
Discussions are now apparently proceeding with the Tabriz office of Vneshtorg
regarding claims against Bureau Perse, but in the meantime transit trade via the
Tabriz-Julfa Railway, which is handled by Bureau Perse, is certain to be
considerably impeded.
5 . I am sending copies of this despatch to the Department of Overseas
Trade (No. O.T. (B) 82), to the Foreign Secretary to the Government of India,
and to His Majesty’s Charge d’Affaires, Bagdad (No. 38).
I have, &c.
R. H. HOARE.
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