The Politics of Oil - Debunking the "War on Terror"
Business & Finance: Royal Squeeze
Monday, Dec. 12, 1932
Once he makes up his mind Persia's sharp-nosed "King of Kings," Reza Shah Pahlevi. is a tiger for action. Last week he sprang on Anglo-Persian Oil Co. Ltd., stock control of which is held by the Government of Britain's King George V, no tiger. In Teheran, with Reza Shah Pahlevi presiding, the Persian Cabinet denounced and cancelled Anglo-Persian's concession to exploit 500,000 sq. mi. of Persian oil land which was to have run until 1961.
"Rejoice!" exhorted a special edition of Teheran's evening Ettelaat. "The last foothold of foreigners has been removed! Indeed, indeed this is a time for the greatest national rejoicing!"
Organized rejoicing, which promptly began, was quenched by a snowstorm — but not for long. By command of the King of Kings movie theatres all over Persia were thrown open to the public free.
Meanwhile on London 'Change common shares of Anglo-Persian slumped 12% in value (a paper loss to His Majesty's Government of over £2,000,000). Reza Shah Pahlevi had struck so suddenly that Anglo-Persian Board Chairman Sir John Cadman was not in London to receive the blow but in San Francisco. To California newshawks, long-jawed Sir John said with perfect aplomb. "All this is not so serious as it might appear, inasmuch as Persia lacks power to cancel the concession."
Inasmuch as Persia is a sovereign state, Sir Henri Deterding, director-general of Royal Dutch (which is associated with Anglo-Persian in distributing oil), rushed around to the Persian Legation in London. He was invited with effusive courtesy to dine. He dined.
Captain Anthony Eden, Under Secretary for Foreign Affairs, told the House of Commons that Great Britain "won't tolerate any interference" by the Persian Government but will endeavor to settle things amicably. In Cabinet circles Reza Shah Pahlevi's action was called second in importance only to the question whether Great Britain would make her Dec. 15 debt payment to the U. S. As every Englishman knows, the oil resources of Anglo-Persian—strategically located between India and Britain—are vital to the Admiralty, must be retained at any cost.
It was a solitary Englishman, William Knox D'Arcy, who confirmed tales of oil while wandering over the Persian deserts in 1900. With one fortune, grubbed from Australian gold fields, already in his pocket, he wangled from the then ruling Shah a concession covering four-fifths of all Persia. The ignorant Shah was glad indeed to get $20,000 cash. Berlin's Deutsche Bank, Standard Oil and other powers soon were fighting for the privilege of buying D'Arcy's amazing concession. Burmah Oil Co. finally bagged it for Britain in 1909 and set it up as Anglo-Persian. Six days after Britain declared war in 1914 Winston Churchill jammed a bill through Parliament to buy control of Anglo-Persian for His Majesty's Government, so that His Majesty's ships might never fail for lack of bunker oil. Today only the U. S., Russia and Venezuela rank ahead of Persia in crude production. The bulk of the 45,000,000 bbl. annual output is tanked directly to Britain, Anglo-Persian having an agreement with Royal Dutch-Shell not to compete in the Orient.
Rumors that Soviet Russia had persuaded Reza Shah Pahlevi to turn off Britain's oil were scouted in London for two good reasons. First, it was observed that Anglo-Persian officials were permitted by the King of Kings to go about their business in Persia as usual last week, despite his cancellation of their concession. Second, the Persian Government has been demanding for years & years that Anglo-Persian pay a higher oil royalty, especially since the neighboring Kingdom of Irak, where British, French & U. S. engineers are building 1,180 miles of pipeline, was able to obtain a higher royalty from its oil concessionaires. The present Persian royalty rate is 16%, compared to 12½% which is usual in the U. S., 10% in Mexico and Venezuela.
Reza Shah Pahlevi, according to best posted London oil men, was only trying to squeeze more money out of Anglo-Persian last week and would probably succeed. Among other things which sorely vex the King of Kings is the fact that £4,000,000 of Persia's current Treasury reserve is in British pounds which have gone off the gold standard and sunk to the lowest level ($3.18) the pound has ever touched.
In all Britain there is but one oil well—at Hardstoft, Derbyshire—and that produces spasmodically. With the exception of Trinidad and Burma the colonies contribute but a thin trickle compared to the torrent of oil consumed by themselves, by the United Kingdom and by the merchant marine. But Anglo-Persian and Royal Dutch-Shell (largely British-owned) have seen to it that Britain's oil shall never be turned off completely. Besides the oil of the King of Kings, Britain controls nearly one-half the concession in the famed Irak fields.* Royal Dutch, world's largest producer of crude, owns fields in Rumania, Dutch East Indies, Venezuela, Mexico, controls one-twentieth of all U. S. production. It markets in every nation in the world except Russia and in every one of the 48 States. What Empire markets are not supplied by Royal Dutch and its ally Anglo-Persian are dominated by the big U. S. exporting concerns.
Persia's self-made Reza Shah Pahlevi recently took delivery of a brand new navy (six gunboats), built to order in Italy (TIME, Sept. 26). He has ordered a fleet of fighting airplanes. He bemoans the fact that his subjects have but 9,800 automobiles. Last week it was reported that Reza Shah Pahlevi was about to grant a monopoly to General Motors Corp. When questioned, James David Mooney, genial, much-traveled head of G. M.'s export division, replied: "I shouldn't be surprised if the information were true. General Motors has many friends among the Persians."
* The Irak concession, east of the Tigris River, is split between a French group, a U. S. group (Standard companies plus Andrew William MelIon's Gulf Refining), Royal Dutch-Shell and Anglo-Persian—23¾% each. The remaining 5% is owned by one C. S. Gulbenkian, a mysterious, fabulously wealthy Armenian who was active in securing the concession. Another Irak concession, located west of the Tigris, is held by British Oil Development Co., Ltd.
http://www.time.com/time/magazine/ar...9496-1,00.html
Business & Finance: Royal Squeeze
Monday, Dec. 12, 1932
Once he makes up his mind Persia's sharp-nosed "King of Kings," Reza Shah Pahlevi. is a tiger for action. Last week he sprang on Anglo-Persian Oil Co. Ltd., stock control of which is held by the Government of Britain's King George V, no tiger. In Teheran, with Reza Shah Pahlevi presiding, the Persian Cabinet denounced and cancelled Anglo-Persian's concession to exploit 500,000 sq. mi. of Persian oil land which was to have run until 1961.
"Rejoice!" exhorted a special edition of Teheran's evening Ettelaat. "The last foothold of foreigners has been removed! Indeed, indeed this is a time for the greatest national rejoicing!"
Organized rejoicing, which promptly began, was quenched by a snowstorm — but not for long. By command of the King of Kings movie theatres all over Persia were thrown open to the public free.
Meanwhile on London 'Change common shares of Anglo-Persian slumped 12% in value (a paper loss to His Majesty's Government of over £2,000,000). Reza Shah Pahlevi had struck so suddenly that Anglo-Persian Board Chairman Sir John Cadman was not in London to receive the blow but in San Francisco. To California newshawks, long-jawed Sir John said with perfect aplomb. "All this is not so serious as it might appear, inasmuch as Persia lacks power to cancel the concession."
Inasmuch as Persia is a sovereign state, Sir Henri Deterding, director-general of Royal Dutch (which is associated with Anglo-Persian in distributing oil), rushed around to the Persian Legation in London. He was invited with effusive courtesy to dine. He dined.
Captain Anthony Eden, Under Secretary for Foreign Affairs, told the House of Commons that Great Britain "won't tolerate any interference" by the Persian Government but will endeavor to settle things amicably. In Cabinet circles Reza Shah Pahlevi's action was called second in importance only to the question whether Great Britain would make her Dec. 15 debt payment to the U. S. As every Englishman knows, the oil resources of Anglo-Persian—strategically located between India and Britain—are vital to the Admiralty, must be retained at any cost.
It was a solitary Englishman, William Knox D'Arcy, who confirmed tales of oil while wandering over the Persian deserts in 1900. With one fortune, grubbed from Australian gold fields, already in his pocket, he wangled from the then ruling Shah a concession covering four-fifths of all Persia. The ignorant Shah was glad indeed to get $20,000 cash. Berlin's Deutsche Bank, Standard Oil and other powers soon were fighting for the privilege of buying D'Arcy's amazing concession. Burmah Oil Co. finally bagged it for Britain in 1909 and set it up as Anglo-Persian. Six days after Britain declared war in 1914 Winston Churchill jammed a bill through Parliament to buy control of Anglo-Persian for His Majesty's Government, so that His Majesty's ships might never fail for lack of bunker oil. Today only the U. S., Russia and Venezuela rank ahead of Persia in crude production. The bulk of the 45,000,000 bbl. annual output is tanked directly to Britain, Anglo-Persian having an agreement with Royal Dutch-Shell not to compete in the Orient.
Rumors that Soviet Russia had persuaded Reza Shah Pahlevi to turn off Britain's oil were scouted in London for two good reasons. First, it was observed that Anglo-Persian officials were permitted by the King of Kings to go about their business in Persia as usual last week, despite his cancellation of their concession. Second, the Persian Government has been demanding for years & years that Anglo-Persian pay a higher oil royalty, especially since the neighboring Kingdom of Irak, where British, French & U. S. engineers are building 1,180 miles of pipeline, was able to obtain a higher royalty from its oil concessionaires. The present Persian royalty rate is 16%, compared to 12½% which is usual in the U. S., 10% in Mexico and Venezuela.
Reza Shah Pahlevi, according to best posted London oil men, was only trying to squeeze more money out of Anglo-Persian last week and would probably succeed. Among other things which sorely vex the King of Kings is the fact that £4,000,000 of Persia's current Treasury reserve is in British pounds which have gone off the gold standard and sunk to the lowest level ($3.18) the pound has ever touched.
In all Britain there is but one oil well—at Hardstoft, Derbyshire—and that produces spasmodically. With the exception of Trinidad and Burma the colonies contribute but a thin trickle compared to the torrent of oil consumed by themselves, by the United Kingdom and by the merchant marine. But Anglo-Persian and Royal Dutch-Shell (largely British-owned) have seen to it that Britain's oil shall never be turned off completely. Besides the oil of the King of Kings, Britain controls nearly one-half the concession in the famed Irak fields.* Royal Dutch, world's largest producer of crude, owns fields in Rumania, Dutch East Indies, Venezuela, Mexico, controls one-twentieth of all U. S. production. It markets in every nation in the world except Russia and in every one of the 48 States. What Empire markets are not supplied by Royal Dutch and its ally Anglo-Persian are dominated by the big U. S. exporting concerns.
Persia's self-made Reza Shah Pahlevi recently took delivery of a brand new navy (six gunboats), built to order in Italy (TIME, Sept. 26). He has ordered a fleet of fighting airplanes. He bemoans the fact that his subjects have but 9,800 automobiles. Last week it was reported that Reza Shah Pahlevi was about to grant a monopoly to General Motors Corp. When questioned, James David Mooney, genial, much-traveled head of G. M.'s export division, replied: "I shouldn't be surprised if the information were true. General Motors has many friends among the Persians."
* The Irak concession, east of the Tigris River, is split between a French group, a U. S. group (Standard companies plus Andrew William MelIon's Gulf Refining), Royal Dutch-Shell and Anglo-Persian—23¾% each. The remaining 5% is owned by one C. S. Gulbenkian, a mysterious, fabulously wealthy Armenian who was active in securing the concession. Another Irak concession, located west of the Tigris, is held by British Oil Development Co., Ltd.
http://www.time.com/time/magazine/ar...9496-1,00.html
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