The Honeymoon of 1926


Credit: Kaveh Ehsani, Leiden University
From “The social history of labor in the Iranian oil industry : the built environment and the making of the industrial working class (1908-1941)”

In the winter of1926, after Reza Shah had ascended the throne, the government re-opened the case of the Bazaar. Now the terms of the inquiry had become the legal ownership of urban territory, as a review of the case by a government ministry stated:
“The Oil Company planned in 1924 to build a bazaar in order to improve sanitation. They prepared the plans and the building material, but had to stop due to rainy season. Now they ask, first, if the designated land is considered state land, then it should be transferred to the Company free of charge…. third, they pledge to control prices by keeping the rents they will charge for shops not to exceed 8.5% of profit on expended capital. Last, the Company undertakes to collect all additional charges that are due to it for services such as lighting, purified water, sanitation, and public order; as well as the government duties, from the tenants”[153].
Having realized that under the new political and local circumstances the Company’s insistence on obtaining exclusive control over a public area such as the Bazaar would only make the government more suspicious, Arnold Wilson came up with an alternative scheme of recruiting a local Iranian merchant, a Mirza Hossein Movaqqar, who was also the Majles deputee from the area, to take charge of the new bazaar project and to build and operate it according to Company plans and with its considerable assistance. Wilson arranged a meeting in Tehran between Cadman, Homan, The American adviser in charge of Khuzestan’s finances, Movaqqar, and senior Company directors, to hammer out an agreement to have Movaqqar front the project in order to avoid objections by the government and local protesters. An agreement was made for the Company to draw up and submit a plan based on “sanitary concerns and controls”, and to extend a loan of 75,000 Rps, at a low interest rate of five percent, for Movaqqar to build the bazaar on 4 blocks, with the provision of further expansion as soon as the situation became more favorable. At the meeting Homan was urged to obtain the approval of the provincial governor for the scheme and to make sure the crucial issue of a final transfer of property rights would take place[154].
However, the Company was already planning further expansions, and had come to the decision to acquire significantly greater stretches of urban land for its projected urban and industrial operations, just as the government was imposing new property laws and setting up land registration institutions. At a meeting between Dr Young, Cadman, and Jacks, it was decided that while the Company should keep a low profile, they ought to ask the government for the grant of some 500 ha of land in Abadan (1,300 jerib)[155]. Included in this land request were some 66 ha north of the refinery to Bahmanshir River, 36 ha to the west of the refinery for recreational space, and 45 ha between the village of Bawarda and the Sheikh Village (the site of the proposed bazaar). The Company was designating all this as “uncultivated land” and intended to demand the government for its free transfer.
In a demonstration of the continued fluidity of the political situation, it was decided at the meeting to keep active contact with Sheikh Khaz’al, who was in exile in Tehran, in case he returned to power[156]. Dr Young visited Khaz’al in Tehran to assess his situation. Instead of a possible political player who could make a comeback and again become a force in the province he encountered an old, impoverished, and broken man who asked Young for assistance: “The old man is of course very downhearted. He has no means and he is in need of a loan, but I told him that at the present moment we did not consider it in his own interest to borrow money from us”. He advised Khaz’al to throw himself on the mercy of Millspaugh, and even if the government would not restore all his property perhaps they would at least provide him with an allowance to live out his days[157].
Realizing that the old political arrangements were well and good in the past, there was now real concern among Company directors about the numerous old agreements signed with the Bakhtiyaris and Khaz’al coming under serious government scrutiny and reconsideration (see chapters 3, 7). The Foreign Ministry had asked the Finance Ministry to make a ruling about the legal status of khalesheh (state) lands in Abadan, and were told that, “This bazaar is not part of the Concession, and needs to be renegotiated”[158].
An apprehensive Cadman told Foroughi the Premier, and Davar the Minister of Public Works, that the Company was not to blame for the deals it had had to make with the local magnates. Given that until very recently the Government had had neither land registration offices in the provinces, nor a tangible institutional presence to enforce its rules, the Company had had no option but to deal with the local magnates. Cadman also made an implicit threat by reviving the old wartime disputes when APOC had suspended royalty payments after German sabotage of its pipelines in 1915, and hinted that APOC could ask for compensation from the government for failing to protect it as the concession demanded (chapter 2)[159].
However, these fears proved ungrounded, and a meeting with Millspaugh at the end of April had somewhat allayed the Company’s fears regarding future government claims for the land deals made with the Bakhtiyaris and Sheikh Khaz’al. Millspaugh went further and offered the Company an immediate allocation of the desired “uncultivated land” in Abadan that they were requesting[160].
During these pivotal meetings with the Cabinet, Cadman discovered that the primary concern of the Iranian government was not so much local popular discontent about its treatment by the Company, but the Iranianization of the labor force, and the terms of the concessions regarding royalties (see chapter 5). The state was willing to be flexible regarding the spatial arrangements and land confiscations the Company was asking in Abadan, so long as they did not impinge on the ultimate formal sovereignty of the government and its representatives.
In Abadan also the negotiations had proceeded regarding the Bazaar. Harold Homan, the American provincial financial director was following up the scheme of making Movaqqar the front man for the Bazaar project “This office has entered negotiations with Mirza Hossein Movaqqar who is currently a Majles depute, to build a large bazaar on state land (khaleseh) in Abadan. This decision was made when complaints began to be received from residents of Abadan against the Company’s [excessive] demands. An agreement has been reached between Movaqqar and the government, and approved by the Company, to build a bazaar according to plans approved by this ministry and the Company’s engineer, to charge rents not above the current rates, and to respect all prevailing laws regarding state lands (khalesehjat).
In addition, I must bring to your attention that there is much unused land adjoining this bazaar, but there are very few Iranians with the wherewithal or the willingness to undertake such construction, with the exception of Movaqqar [my emphasis].”[161]
In effect, the state was embracing the proposal offered by the Company and confirming the whole urban modernization scheme, so long as a member of the Iranian new political elite was prominently involved. The notion of “Iranianization” was becoming a catchphrase for Iranian elite nationalists as a substitute to any real renegotiation of power that would also involve the local population, and the acknowledgment of the collective rights of urban citizens. The Company’s claim that the areas it already occupied, as well as those further territories it was now demanding were unused and unoccupied wasteland surrounding the oil works in Abadan was being accepted by the state, in spite of vociferous objections and pleas by local residents, as well as the reports of the local government Kargozars. In March the government sent an envoy to the province, Mr. Nasr, in order to get a first hand assessment of the situation in a region that was still clearly an unknown territory to the new state actors. Nasr provided a detailed intelligence report, providing alarming information about the extent of Company monopoly control in Masjed Soleyman (chapter 5). Regarding Abadan, Nasr reported as if from a foreign country, about which he was providing original reconnaissance: “Abadan: This is a region for the refining of petrol. I have submitted to you all the maps of this region, which I have secured with great pain. In these maps you will find that besides the refinery installations the Company has many other buildings and constructions, such as dwellings, shops, mosque for Indians, and movie theaters. There are 16 thousand workmen.
The Persian workmen live in wicker huts or under tents outside the Company areas, but the Indians and Chinese dwell in constructions erected by the company or under good tents. The Company has its own police department as well as a municipality. The local Iranian police have no authority at all. The Company collects taxes on land, property, and sanitation. As regards the health of the workmen the Company has taken good measures”

The year 1926 was the high point of good relations between APOC and the central government. Pivotal agreements were reached, and the relieved Company finally launched into its coveted urban planning projects. But citizen resistance had not ended by simply being ignored and dismissed, and soon after the frictions returned with a vengeance.


Notes & References :

153. Ministry of Agriculture to Ministry of Finance, No. 8590, 11 January 1926, INA 240029099

154. “Notes of meeting between Homan, Movaqqar, Cadman, Jacks, Elkington”, 18 March 1926; “Item 19: Bazaar”, 18-19 March 1926, BP 71183

155. On the politics and history of determining the variable local unit of land measurement Jerib, to permanent and definite metric system during the 1909-1918 land negotiations with the Bakhtiyaris see chapter 3. Lambton gives the local Jerib as 1,108 m2. See Ann K .S. Lambton, Landlord and Peasant in Persia (London: IB Tauris, 1991); Mohammad Ali Jamalzadeh, Ganj-e Shayegan (Berlin: Kaveh, 1946), 195.

156. “Notes on conference held at Tehran on 22nd April 1926”, Dossier 8, BP 71183

157. Dr Young to Cadman, Dossier 10, 25 May 1926, BP 71183

158. Foreign Ministry to Finance Ministry: “Please inform us of the legal status of the khaleseh lands of Abadan”, 3 February 1926 No. 47109; “Finance Ministry to Foreign Ministry, In response to No. 41109”, No. 22188, 27 February 1926, INA 240009253

159. “Minutes of meeting between Cadman, Jacks, Dr Young, with Foroughi, Prime Minister, Davar, Minister of Public Works, Millspaugh”, 6 May 1926, BP 71183

160. Minutes of meeting between Millspaugh, Jacks, and Fairly, 30 April 1926, BP 71183

161. “Harold Houman, Head of Khuzestan Finance Office to Head of Iran’s Finances, (Millspaugh), in reply to correspondence No. 41706, dated 22 January 1926”, No. 1610, (unclear day) May 1926, INA 240029099

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