Evening star., 1951-10-07

concession Tor the nVe northern
provinces of Iran to an agent of
Czarist Russia. While this grant
was relinquished by the Soviet Gov
ernment as part of a 1921 treaty
agreement there was a condition
attached that no such northern
concession could henceforth be
given to any other foreign power.
Another development was the
proving that most of the Middle
East was a reservoir of oil-the
greatest in the world by today'S
estimates; the granting of conces-
sions to several foreign interests
and the re-Shuffling of these con-
cessions as a result of the Allied
victory in World War I.
Out of this pattern of exploration
and of haggling over the spoils of
war-accompanied by nearly a
decade of sharply edged dispute
between the governments of Lon
don and Washington which resulted
in American interests winning a
firm foothold in Middle East oil
the present Anglo-Iranian Co. came
up with nearly quarter interest
in the newly formed Iraq Petroleum
Co., half interest in the Kuwait
Oil Co. and rights in other poten-
italy valuable areas.
Accounting Problem
Along with the building of it's
global marketing system and a
great tanker feet this diffusion of
the Anglo-Iranian operation has
served to complicate and to cloud
some of the recent conversations
about division of company earn
ings with the Iranian government.
Accounting systems being what
they are, no one except company
experts can say with authority
exactly what portion of company
profits have come directly from
Iranian production. Without prop
er adjustment, comparison of COM
pany earnings with payments to
Iran is consequently misleading.
This is not meant to imply that
the company has been generous in
its payments to Iran. Actually, the
money factor has been a source of
irritation and dispute since 1918.
In 1882 the Persian government
figured that its cumulative income
on the oil since 1901-about II mil
lion pounds sterling-was hardly
half what it might have been if
the company had been paying
normal Iranian taxes rather than
royalties. The accusation of
manipulation of the books, repeated
during the present period of dis
agreement, was thrown at the COM
pany and on November 27, 1892,
cancellation of the concession was
announced.
British behavior at that time was
almost identical with what it was
to be in 1851. The London govern
ment talked of force to protect its
property and its personnel, and
WarShipS were sent to the Persian
Gulf. When the Iranians declined
to give ground Britain appealed 10
the Permanent Court of Interna-
tional Justice at The Hague, Just as
they were to do 10 years later. In
the same pattern. Iran questioned
the competence of the court on the
grounds that the dispute was a do
meStic issue. Britain followed by
laying the case before the Council
of the League of Nations and Iran
agreed to argue it's side.
Meanwhile, however, direct nego-
tiations had been resumed and
agreement on a new concession
for go years from 1933-was
reached.
Biekerine Uninterrupted
While the new concession carried
substantially more liberal terms of
British payment, the financial rela-
tionship between the company and
the host government continued to
be a source of contention. In the
background were other Iranian
complaints-that they never were
really able to check the company
books, that IranianS had no real
voice in management, that there
was deliberate company policy of
blocking off Iranians from key
technical jobs, that the company
had interfered politically in Iranian
affairs, and that Iranian consumers
were being charged exorbitant
prices for the end products of their
own oil. All had certain validity.
In 1948 this pickering led to q
'reopening of the concession terms
o. and the British agreed to new lib
eralization of the financial aspects.
The new royalty formula would
have just about doubled the Iranian
income in pounds sterling.
The revised agreement was ac-
cepted and signed by the Iranian