Coll 28/65 ‘Persia. Perso-Soviet Commercial Relations.’ [‎211r] (422/482)

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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOVERNMENT
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PERSIA.
CONFIDENTIAL.
March 28, 1933.
Section 7.
[E 1630/21/34] No. 1.
Mr. Hoare to Sir John Simon.—(Received March 28.)
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(No. 103.)
Sir, Tehran, March 11, 1933.
I HAVE the honour to transmit to you herewith a copy of a memorandum
by Mr. Lingeman, who to-day leaves Tehran on the termination of his appoint
ment as commercial secretary. In it he reviews the changes in the working of the
Foreign Trade Monopoly that have occurred since his conversation with the
late Minister of Court, recorded in my despatch No. 96 of the 24th February,
1932, and suggests certain directions in which our attitude towards these changes
needs consideration.
2. I have had no time before the departure of the courier to consider what
the answers to the questions put by Mr. Lingeman in paragraph 27 of his
memorandum should be. I shall try to furnish you with my observations by
a later courier, although the whole problem is so involved that I doubt whether
I shall be able to offer any constructive suggestions, but in the meantime I send
you Mr. Lingeman’s swan-song, which gives a clear picture of the present situation
and will, I am confident, prove invaluable in any further study of the question.
3. I am also enabled, by the courtesy of my United States colleague, to send
you a copy of a note which he recently addressed to the Persian Government
protesting pro forma against the discriminatory treatment accorded to Soviet
trade with Persia under the commercial treaty of 1931. This note might possibly
have brought out more fully the dual nature of the discrimination from which
non-Soviet importers suffer, in that before any import licence can be obtained they
are obliged to export Persian produce (or buy export certificates) to the value of
the goods to be imported and also sell to the Government foreign exchange to the
value of the produce exported (or alternatively buy—at an extra premium—
“exchange sold ” export certificates): see paragraphs 12 and 13 of Mr. Linge
man’s memorandum.
4. The head of the English section in the Ministry for Foreign Affairs
recently told Mr. Lingeman that he was a member of a commission that had been
formed in the Ministry of Finance to consider modifications of the Monopoly Law,
and would be grateful for “ideas.” Mr. Lingeman said that he would be glad
to make suggestions, but must know certain basic principles, for example, was
the quota system to be adhered to. and were export certificates to continue to be
transferable, or to be non-transferable, or to be done away with altogether?
5. Jellal then revealed what was probably his main object in speaking to
Mr. Lingeman. He enquired what good His Majesty’s Government derived from
the conventionalised rates laid down in the Tariff Autonomy Treaty, so-called.
Feroughi had told him (as he told me on one occasion, but there is no record of any
thing of the kind in the Legation archives) that this treaty had been responsible for
the introduction of the monopoly of foreign trade, my predecessor having paid no
heed to the Persian Government’s warnings that if they could not restrict imports
by raising their tariff dues they would have to find some other way of doing so.
If only, Jellal added, Persia could secure tariff autonomy in reality, the trade
monopoly, which had caused such a lot of harm, might perhaps be abolished.
Mr. Lingeman pointed out that even without tariff autonomy the Persian Govern
ment had already met the difficulty of swollen imports by issuing instructions to
the Persian Customs to refuse admittance to certain classes of goods.
6. When Jellal insisted that he was anxious to know what advantages we
saw in the present conventional tariff, Mr. Lingeman mentioned : (a) Reasonable
duties on those imports which had not been prohibited. British trade was not
fundamentally interested in the prohibited articles, which were mostly luxuries,
while it would be a long time before local industry seriously competed with British
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