File 200/1928 Pt 10 'Persia: Anglo-Persian Relations. Treaty Negotiations' [‎427v] (855/868)

2 million was the pre-war debt of £490,000, on which Persia had always paid
interest, and which she finally repaid in June 1933.
2. This agreement was, however, subject to ratification, and the Persian
Government made no attempt to obtain Majlis approval. Teymourtache always
maintained that the sums advanced to Persia during and immediately after the
war were spent in British rather than Persian interests, and should he regarded
as British war expenditure. There is, it must be admitted, a good deal to be saiu
for this view, and in practice there is no likelihood whatever of the Persians ever
consenting to repay any part of this debt.
3. In January 1930 the Persians were informed in writing that His
Majesty’s Government were prepared to reduce the total debt from two to
one million pounds as part of a satisfactory general settlement (“. . . . con
cessions .... que mon Gouvernement est pret a octroyer dans le but de realiser
un accord definitif ”—see Sir R. Clive’s despatch No. 80 of the 22nd February.
1930).
4. In April 1930 Teymourtache “expressed great disappointment at the
offer to renounce only one million. He had counted on our renouncing the whole
two million of the debt, besides providing ships and abandoning claims.’’ After
further discussion, he was informed orally by Sir R. Clive that, “ if the Persian
Government were prepared to pay a reasonable sum in settlement ....’’ (i.e., of
British claims) “. . . . His Majesty’s Government might be willing to forgo a
further amount of debt, excluding always the £490,000 of pre-war debt ’’ (Tehran
telegram No. 26 of the 2nd April, 1930). [Note. —It is probable that when
pressing, on this occasion, for the remission of “ the whole two million,”
Teymourtache had overlooked that the pre-war debt was included in this sum. I
The proposal was never further pursued.
5. Hitherto instructions to His Majesty’s Minister have been that His
Majesty’s Government should not be committed as regards the remainder of the
war and post-war debt. It has, however, long been realised by His Majesty’s
Government that before a satisfactory treaty settlement can be obtained this
remaining £510,000 will almost certainly have to be remitted, and it has now been
decided to give His Majesty’s Minister full discretion to make the offer of its
remission at the moment which he considers most suitable and without prior
reference to His Majesty’s Government in the United Kingdom or the
Government of India.
A rticle XIII. — Claims.
1. No British draft has yet been submitted to the Persians.
2. In February 1932 Teymourtache proposed the following :—
Les Hautes Parties Contractantes sont con venues de regler les reclama
tions existantes des sujets de 1’une des parties k 1’egard du Gouvernement de
1’autre par un protocole qui sera signe entre leurs representants respectifs
ou la modalite de 1’examen, la resolution du differend concernant ladite
reclamation et sa liquidation seront indiquees.
3. In putting forward this draft, Teymourtache said that what he had in
mind was the establishment of a claims commission and the definition of the
commission’s functions.
4. The obvious objection to the draft from the point of view of His
Majesty’s Government is that it relegates the whole process to the indefinite
future. The protocol (if a protocol rather than an annex is finally decided on)
will have to be agreed on before the conclusion of the treaty, and will presumably
be annexed thereto.
5. As regards the terms of the covering article and protocol (or annex),
several drafts have been considered by the Foreign Office, His Majesty’s repre
sentatives at Tehran and, more recently, by the other Departments concerned.
Annexed hereto is (A) the text of the most recent draft to be circulated in full,
semi-officially, to the Treasury and India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. , (B) a list of alterations and
corrections arising out of subsequent semi-official correspondence and further
independent discussion at the Foreign Office, and (C) a revised draft, giving the
presumed latest form of the article and annex, but incorporating certain passages
not yet finally agreed to by the other Departments concerned.