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First real shock to reach Downing Street from Teheran was arbitrary cancellation of the Anglo-Persian Oil Co. concession scheduled to run until 1961. Surprised British statesmen, suddenly realizing that protection of this oil lease would involve great military effort and huge expenditures, ended by negotiating. Anglo-Persian's basic holdings were enormously decreased and the Shah obtained increased royalties which were promptly earmarked for the army. This highly successful instrument of national freedom, now 100,000 strong, still receives its daily orders from His Imperial Majesty.
Another move was an Iranian hint that His Britannic Majesty's naval forces in the Persian Gulf were no longer welcome to make their base in Iranian waters. Result: The British Naval Base was moved across the Gulf to the oil-laden Bahrein Islands, territory of more tractable, independent H. H. Sheik Sir Hamad bin 'Isa al Khalifa, leaving His Britannic Majesty's diplomatic agent for the Persian Gulf uncomfortably high & dry in.' Bushire's British Residency (see map, p. IQ). Meanwhile protection-loving Imperial Airways revised its flying route to India, establishing its regular Persian Gulf stop for seaplanes at Bahrein instead of Iranian territory.
Since Iran was bent on proving her independence, lean pickings were in store for British advisers, British business. Ships were ordered from Italy and Italian officers were engaged to teach Iranian landlubbers theories of navigation. Barter trade was established with Soviet Russia and German goods began to pour into Iran under a clearing agreement arranged by the wily Dr. Hjalmar Schacht. Among the first arrivals were 100 German warplanes for the Iranian air force. Danes. Czechs.
Swedes, Italians, all chipped in to build new beet-sugar factories, power plants, cotton mills. Road builders arrived from Europe and America and construction companies were not long in learning that Teheran, "City of the Shadow of God." was to undergo a facial operation. The King of Kings guaranteed prompt payment in foreign cash.
Iran the New. By this spring thickly-populated bazaar districts were condemned and destroyed, new, broad, straight avenues plotted through once narrow, crooked streets. Magnificent, many-roomed, multistoried government buildings stood where once sagged ancient one-story huts. A handsome post-office building covering a city block has arisen and a Ministry of War Building, with sufficient space to house the general staffs of Germany, France and Great Britain at the same time, is being utilized by the ever-expanding but still relatively small Iranian staff.
The Imperial Bank of Iran, set back from the street, needed an entire square. Slowly rising to completion is an Imperial Opera House to cater to the hitherto undiscovered musical tastes of Iran's citizens.
The shortcomings of the Shah's dozen years in office, the ludicrous anomalies, misappropriations and mass suffering bring laughter and tears only to the eyes of Westerners. By Oriental standards, his own, the Shah is the man of his generation in the Middle East.