Coll 28/65 ‘Persia. Perso-Soviet Commercial Relations.’ [‎204v] (409/482)

2
prices to such a powerful customer, and to buy at prices arbitrarily fixed,
especially in respect of articles the supply of which is a virtual Soviet monopoly.
There is also, of course, the long-standing complaint that Persian products
acquired by the Soviet buying concerns in Persia are subsequently dumped on
foreign markets at ridiculous prices in the hunt for valuta, thus making legitimate
Persian trade with those markets more difficult.
Reports from Northern Persia show that trade is all too seriously affected Jk
by the present dispute, and it is no doubt fully recognised by the Persian Govern
ment that, short of changing its geographical position, there is no hope for real
prosperity in that part of the country for a long time to come without normal
trading relations with the Soviet Union. In view of such a situation, it must
be admitted that Persia is making a most valiant effort to avoid complete
domination by her powerful northern neighbour. This is particularly apparent
in the efforts being made to reduce Persian dependence on the Soviet Union for
supplies of sugar and textiles, as is shown by the recent orders to a Czech firm
for six additional sugar factories, and to a British firm for machinery for several
spinning mills. The eventual produce of these spinning mills will of course
tend to exclude imports of textiles from other countries as well, but, at least, it
will reduce Persia’s necessity to export raw cotton to the U.S.S.R. and
subsequently import the finished product. In the meantime, Persian cotton is
being exported in increasing quantities to India and Germany via the southern
ports or the Indian land frontier.
The question of alternative routes to Europe for Persian imports and exports
is one which must be seriously occupying the Persian Government. Such
incidents as the recent insistence of the Soviet Government on obtaining the
whole order for rails for the Persian railway under threat of refusing to allow
any to be delivered via U.S.S.R. for the northern section will no doubt not be
allowed to recur indefinitely. In an article in the Iran on the 22nd May
Rahnema, editor of that newspaper and a Deputy of the Majlis, said that Persia
needed a free access to the sea in order to avoid Soviet vexatious restrictions
which were crippling Persian commerce. He pointed out that prior to the Soviet
regime Russian transit rates and regulations were comparatively stable, but were
now subject to almost daily changes. Persia must find a route for its products
subjected to ordinary international laws and customs and free from such constant
vexations.
His Majesty’s Minister has already reported, in his despatches Nos. 185
and 198 of the 22nd April, the closing down or reduction of staffs of Soviet
consular or trading establishments in Persia, and this process continues. The
following notes from reports received from Persian centres other than Tehran
may be worthy of record :—
Meshed .—The Soviet trading organisation closed their offices on the
6th April, and it was reported that the staff were preparing to leave for
Russia. The Russian bank was doing no business at all. Some local
merchants have circulated notices offering to sell their shares in the bank at
70 per cent, discount. The chamber of commerce warned traders that those
dealing with Russians would be liable to be arrested and branded as traitors.
A hwaz .—Orders were received in March from the Commerce Department
in Tehran instructing merchants to cease transactions with the Soviet
commercial representation.
Kermanshah .—“ Russian stock here stands very low at the moment, the
local traders not having a good word to say for the Russians and their
methods.” The local Persazneft closed their office in April.
Resht .—The embargo on all Soviet concerns continues, and picketing of
their offices has again taken place (in May). A Persian broker Often a local commercial agent in the Gulf who regularly performed duties of intelligence gathering and political representation. was expelled
from Resht for having entered a Soviet office. All goods arriving from Baku
are refused permission to land. “It is believed here that the province
cannot continue to pay high taxes to the Government and at the same time
carry on the embargo with Russia.”
Tabriz .—No Russian piece-goods arrived in April, but about sixty bales
arrived from Trebizond. Supplies of sugar were arriving from Bagdad
via Kermanshah and from Europe by the Rowanduz route, and merchants
were arranging to send export produce by the latter route. All Soviet
trading organisations were considerably reduced.