1. The last somewhat detailed treatments of the subject were Shwadran, Benjamin, The Middle East, Oil and the Great Powers (New York: Council for Middle Eastern Affairs Press, 1950, rev. ed. 1959), 84–94Google Scholar, and Fatemi, Nasrollah Saifpour, Oil Diplomacy (New York: Whittier Books, Inc., 1954)Google Scholar. Both, however, had to rely more on Senate documents than those of the primary actors, although they did make some use of the more limited collection in the series Papers Relating to the Foreign Relations of the United States. Mustafa Khan Fatih also discussed the dispute briefly in Panjāh sāl naft-i Īrān (Tehran: Payam, 1358 Sh./1979), 330–39, but he, too, relied primarily on the same source, and his account contains several inaccuracies regarding the chronology of events. The State Department later published a file of correspondence and material relating to this oil dispute in Records of the Department of State Relating to the Internal Affairs of Persia, 1910–1929 (microfilm reels 28–29). The file contains documents from both companies, the State Department, the Commerce Department, the White House, as well as news clippings from the Persian, American, British, and Iraqi press. All subsequent citations of diplomatic correspondence in this paper have been taken from this source. The presidential library of Herbert Hoover, who was secretary of commerce for a greater part of this episode, did not contain any relevant documents which were not already included in the State Department collection.

2. For the Hoover-Hughes rivalry see Randall, Stephen J., United States Foreign Oil Policy, 1919–1948 (Montreal: McGill-Queen's University Press, 1985), 26Google Scholar.

3. Browne, Edward G., The Persian Revolution of 1905–1909 (Cambridge: The University Press, 1910;Google Scholar new ed. Washington, D.C.: Mage Publishers, 1995), 150, 173.

4. Ferrier, Ronald W., The History of the British Petroleum Company, Volume 1: The Developing Years, 1901–1932 (Cambridge: Cambridge University Press, 1982), 280Google Scholar.

5. Abrahamian, Ervand, Iran between Two Revolutions (Princeton: Princeton University Press, 1982), 114Google Scholar; Sabahi, Houshang, British Policy in Persia, 1918–1925 (Portland, Ore.: F. Cass, 1990), 17–21Google Scholar.

6. Khostaria approached several non-British European companies before selling the concession to the APOC. A brief description of his attempts to sell is given in Fatih, Panjāh sāl naft-i IĪān, 330–31.

7. Yergin, Daniel, The Prize: The Epic Quest for Oil, Money and Power (New York: Simon & Schuster, 1991), 196Google Scholar. Fatih exaggerated somewhat when he stated: “In those days, intense competition between America and England was underway for obtaining oil concessions in most countries” (Panjāh sāl naft-i Īrān, 331).

8. “United States Proclaims Open Door in Persia,” Christian Science Monitor, 1 April 1922, 4; Yergin, The Prize, 195.

9. V. S. Merle-Smith to Mirza ‘Abd al-'Ali Khan, 12 August 1920 (891.6363/1): “I beg to refer to a recent conversation … in which you stated that your Government desires to have American companies seek petroleum concessions in these provinces [of Azarbaijan, Gilan, Astarabad, Mazandaran, and Khurasan].” Fatemi described this event briefly in Diplomatic History of Persia, 1917–1923 (New York: Russell F. Moore, 1952).

10. Sadler to Merle-Smith, 5 August 1920 (891.6363/1).

11. The Anglo-Russian Convention of 1907, which divided Persia into “spheres of influence,” was revised in 1915. The 1907 Convention and all concessions granted to Russia were abrogated by an imperial Persian decree on 27 July 1918 (Wright to secretary of state, 7 May 1921 [891.6363/22]).

12. Prime Minister (Mirza Hasan Khan) Vusuq al-Dawla, Finance Minister (Akbar Mirza) Sarim al-Dawla, and Foreign Affairs Minister (Firuz Mirza) Nusrat al-Dawla allegedly received £131,000 in bribes from the British to guarantee ratification by the Majlis. The rumors were confirmed in the British House of Commons in November 1920 (Wright, Denis, The English amongst the Persians during the Qajar Period: 1787–1921 [London: Heinemann, 1977], 179Google Scholar).

13. See Merle-Smith to Skinner, 23 October 1920 (891.6363/6).

14. Skinner to secretary of state, 9 November 1920 (891.6363/9). Interestingly, Skinner assumed that the “unfavorable background” would be due to the “increasing financial obligations to the British Government … [since] the actual administration of affairs in Persia will be, to a large extent, under the immediate supervision of British advisers.” Owing to strong nationalist sentiment, however, the Majlis never ratified the agreement.

15. This was the beginning of Millspaugh's long career in Persian affairs, which would eventually bring him to Persia as financial adviser in the period 1922–27 and again from 1942 to 1943. He was to write several books about Persia, including The American Task in Persia (1925), The Financial and Economic Situation of Persia (1926), and Americans in Persia (1946).

16. “Memorandum of Conversation with the Persian Minister and the Counselor of the Persian Legation, December 16,” 17 December 1920 (891.6363/16).

17. Ibid. Discussion centered on a private loan secured with State Department approval. Millspaugh commented that a favorable U.S. government opinion of any private loan to Persia was contingent on the details of the loan's terms.

18. Ibid. Millspaugh commented that information concerning the British purchase of the defunct Russian concession was “something I did not know before.“

19. Abrahamian, Iran between Two Revolutions, 117–18, drawing much of his information from Hakim-Ilahi, H., Zindagī-yi Āqā Sayyid Żiyā (Tehran, 1323 Sh./1944)Google Scholar.

20. Abrahamian, Iran between Two Revolutions, 120.

21. Wright to secretary of state, 7 May 1921 (891.6363/22) and Hoover to Standard Oil, 21 June 1921 (unnumbered).

22. Arthur Veatch, vice-president of Sinclair, wrote to the Federal Trade Commission: “In July of 1921, following up a suggestion of the Secretary of Commerce [Hoover], the Sinclair Company began its negotiations with the Persian authorities for an oil concession over the five northern provinces” (Fischer, Louis, Oil Imperialism: The International Struggle for Petroleum [New York: International Publishers, 1926], 230Google Scholar). Possibly mistaking the year, Fatih dated the start of Sinclair's involvement in Persia to August 1922 (Panjāh sāl naft-i Īrān, 336).

23. Alan Dulles to secretary of state, 5 November 1923 (891.6363/304).

24. “Persian Oil Concessions,” Wright (American embassy in London) to Asche, director of Standard, 7 May 1921 (891.6363/22). See also Ferrier, History of the British Petroleum Company, 571–72 for a discussion of the British strategy.

25. Skinner to secretary of state, 7 October 1921 (891.6363/36).

26. Chilton to secretary of state, 7 October 1921 (891.6363/37).

27. Cornelius Van H. Engert (chargé d'affaires at the American legation in Tehran) to secretary of state, 23 November 1921 (891.6363/45).

28. Veatch to Millspaugh, 18 March 1922 (891.6363/167).

29. The American mission in Tehran surveyed the local press to gauge the mood of the country. Fatih comments: “Both sides [i.e., Standard and Sinclair] gave much money to the newspapers and each one of several papers became partisan” (Panjāh sāl naft-i Īrān, 336).

30. Sitāra-yi Īrān, 25 November 1921, in Engert to secretary of state, 28 November 1921 (891.6363/45, enclosure 4). All excerpts from Persian newspapers are from the State Department's English-language translation of the original Persian, unless otherwise noted. Fatemi calls Sitāa-yi Īrān “the organ of the nationalists in Teheran” (Oil Diplomacy, 140).

31. Engert to secretary of state, 8 December 1921 (891.6363/59).

32. Ittiḥād, 24 November 1921, Engert to secretary of state, 28 November 1921 (891.6363/45, enclosure 2). Ahmad Qavam al-Saltana first became prime minister on 4 June 1921, following the resignation of Sayyid Zia. He resigned on 27 January 1923 in the wake of allegations of graft. Qavam would again become prime minister in 1946 in the 14th Majlis.

33. Īrān, 25 November 1921, Engert to secretary of state, 28 November 1921 (891. 6363/45, enclosure 5).

34. Sitāra-yi Īrān, 28 November 1921, Engert to secretary of state, 28 November 1921 (891.6363/45, enclosure 9).

35. On 25 November 1921, Ittiḥād published a scathing commentary on attempts by the Soviet Union to resurrect the Khostaria concession. Two days later the paper extended its criticism to Britain and the APOC.

36. According to Īrān, 25 November 1921, “Its [i.e., Standard's] capital is several billion dollars. Another such important concern cannot be found throughout America.“

37. “Memorandum of a Conversation with Dr. A. C. Veatch of the Sinclair Consolidated Oil Corporation,” Millspaugh to Robbins and Dearing (assistant secretary of state), 2 November 1921 (891.6363/41). Veatch, former chief geologist for Sinclair and then its vice-president, told Millspaugh that the Persian minister had asked him if’ Sinclair would advance the Persian government a loan with the northern Persia concession as security. Veatch had responded that “his company could not consider a loan,” but he did offer to introduce the minister to bankers close to Sinclair.

38. A. K. Schmavonian, “Supplementary Memorandum to ‘Memorandum of a Conference Attended by Dr. John Bassett Moore, of the Counsel of the Standard Oil Company of New Jersey, Mr. Schmavonian, and Mr. Millspaugh',” 9 December 1921 (891.6363/63).

39. Shwadran attributed the Standard-APOC cooperation, formalized in a 28 February 1922 agreement, to British government pressure ﹛Middle East, 88). Ferrier, meanwhile, denies APOC initiation of talks with Standard ﹛History of the British Petroleum Company, 580). It was impractical at this point for Standard to consider moving Persian oil through the Soviet Union. Even though the Supreme Allied Economic Council had lifted the trade embargo on the communist state, the Treasury and State departments effectively continued with it. Besides, Commerce Secretary Hoover was known for his extreme hostility toward the Soviet Union, which continued into his presidency. See Williams, William A., American-Russian Relations, 1781–1947 (New York: Rinehart & Company, 1952), 179Google Scholar.

40. Millspaugh to Dearing and Fletcher, 9 January 1922 (891.6363/94). On En-, glish-language documents ‘Ala signed his name “Alai.“

41. Millspaugh, Arthur C., The Financial and Economic Situation of Persia, 1926 (New York: The Persia Society [Imperial Persian Government], 1926), 33–35Google Scholar.

42. Robbins to Millspaugh, 16 January 1922 (891.6363/105). Sir John Cadman, then-APOC petroleum executive director, explained to Millspaugh that “it appeared that the debts of Persia were greater than he [Cadman] had thought and that, while the royalties were not pledged, they were tangible assets of Persia and it was probable that the British government felt that it was to the interest of the British debt holders that these assets [the southern Persia oil revenues] remain unpledged” (“Memorandum of a Conference between Mr. Dearing, Sir John Cadman, and Mr. Millspaugh,” 17 January 1922 [891.6363/107]).

43. ‘Ala to secretary of state, 16 January 1922 (891.6363/101). Millspaugh referred to Anglo-French cooperation in a confidential memorandum to Hoover: “Inquiries have also been addressed to the British and French governments regarding reports that representatives of these Governments at Teheran have brought diplomatic pressure to bear on the Persian Government for the purpose of preventing the grant of a petroleum concession to an American company” (Millspaugh to Hoover, 14 December 1921 [891.6363/49.5]).

44. Engert to secretary of state, 30 January 1922 (891.6363/125).

45. Robbins to Fletcher and Dearing, 10 February 1922 (891.6363/136).

46. Nahżat-i sharq, 12 February 1922.

47. Sitāra-yi Īrān, 12 June 1922 (891.6363/233).

48. Engert to secretary of state, 14 February 1922 (891.6363/139).

49. Wellman (associate general counsel to Standard) to secretary of state, 28 February 1922 (891.6363/147).

50. Millspaugh to Dearing, 11 March 1992 (unnumbered).

51. “Memorandum of Conversation with Mr. W. B. Heroy of the Sinclair Consolidated Oil Company,” 17 March 1922 (891.6363/166).

52. Robbins to secretary of state, 20 March 1922 (891.6363/171).

53. Secretary of state to American legation in Tehran, 21 March 1922 (891. 6363/167).

54. Engert to secretary of state, 28 November 1921 (891.6363/49).

55. “Persians Want Americans to Develop Oil; British Still Control Situation,” Chicago Tribune, 2 July 1922 (unnumbered). This article does not appear in the Chicago Daily Tribune microfilm edition.

56. Engert to Dulles, 2 June 1923 (891.6363/288).

57. “Persians Want Americans to Develop Oil; British Still Control Situation,” Chicago Tribune.

58. “The Oil Concession for the Northern Provinces,” Dunyā-yi imrūz, 3 June 1922: “By our own free and voluntary set, we passed the Law of November 23, 1921, authorizing our Government to grant a contract to the Standard Oil Company, and thereby, we limited our government in their negotiations, to dealing with this one corporation. We find now that this company from which we had hoped so much, has tried deliberately to betray us into those hands into which we are determined not to fall. And yet because of our own set, our government cannot honorably negotiate with anyone else” (891.6363/214).

59. APOC (London) to Bedford, 29 May 1922 (unnumbered).

60. APOC (London) to Bedford, 9 June 1922 (unnumbered).

61. Bedford to APOC (London), 10 June 1922 (unnumbered).

62. APOC (London) to Bedford, 13 June 1922 (unnumbered).

63. Millspaugh, “Memorandum of Conversation with the Persian Minister on June 10, 1922,” 12 June 1922 (891.6363/213).

64. Millspaugh, “Memorandum of a Conference in Mr. Phillips’ Office Attended by Mr. Guy Wellman, Associate General Counsel of the Standard Oil Company of New Jersey, Mr. Dulles, and Mr. Millspaugh,” 13 June 1922 (891.6363/216).

65. Ferrier, History of the British Petroleum Company, 578. Ferrier found Shuster's objection “belated” and “less than convincing.“

66. Rubin, Barry, Paved with Good Intentions: The American Experience and Iran (New York: Oxford University Press, 1980), 11Google Scholar.

67. APOC (London) to Bedford, 12 June 1922 (891.6363/217).

68. Millspaugh to secretary of state, 14 June 1922 (891.6363/219).

69. APOC (London) to Standard, 13 June 1922 (891.6363/220).

70. Secretary of state to American legation in Tehran, 14 June 1922 (891.6363/ 217a).

71. Veatch to Millspaugh, 15 June 1922 (891.6363/221), emphasis added.

72. Nahżat-i sharq, 14 June 1922 (891.6363/224).

73. lttiḥād, 28 June 1922 (891.6363/233).

74. Mīhan, 10 June 1922 (891.6363/224). Two years later W. Smith Murray, American chargé d'affaires, was to describe Mīhan as “a filthy blackmail sheet that is regularly subsidized by the Anglo-Persian Oil Company” (Smith to secretary of state, 16 December 1924 [891.6363/393]).

75. ‘Ala to Shuster, 13 June 1922 (unnumbered).

76. Millspaugh to Phillips, 14 June 1922 (891.6363/218).

77. Same to same, 17 June 1922 (891.6363/225). After a buy-out of the APOC, Standard proposed giving the former a share of northern Persia oil.

78. Dulles to Phillips, 14 August 1922 (891.6363/237). Prime Minister Qavam favored Standard, “while the majority monopolists, Majlis and public opinion appear to prefer Sinclair” (Kornfeld to secretary of state, 22 August 1922 [891.6363/242]).

79. “Memorandum of Conversation,” 20 June 1922 (891.6363/227).

80. Dulles to secretary of state, 28 June 1922 (891.6363/232).

81. Phillips to secretary of state, 18 August 1922 (891.6363/238).

82. Soper to State Department, 23 June 1922 (891.6363/231).

83. R. Crandall, Sinclair Exploration Company, to secretary of state, 6 September 1922 (891.6363/247).

84. Phillips to secretary of state, 18 August 1922 (891.6363/238).

85. Dulles to secretary of state, August 18, 1922 (891.6363/239).

86. Abrahamian, Iran between Two Revolutions, 131.

87. Excerpt of private letter from Loraine to Engert, in Engert to Dulles, 21 November 1922 (891.6363/262).

88. “Memorandum of Telephone Conversation,” Wellman to Phillips, 22 November 1922 (891.6363/264).

89. Tūfān, 22 November 1922 (891.6363/268). Tūfān, edited by Muhammad Farrukhi Yazdi, was a popular Tehran paper sponsored by Sulayman Iskandari's socialist party. See Abrahamian, Iran between Two Revolutions, 127.

90. ‘Aṣr-i jadīd, 3 December 1922 (891.6363/355).

91. Engert to Dulles, 19 January 1923 (891.6363/273).

92. “Persian Cabinet Formed,” The Times, 16 February 1923, 9.

93. The Persian government originally wanted to rehire Morgan Shuster, but Husayn ‘Ala, well acquainted with Millspaugh from their work together in Washington, intervened and influenced the selection process in favor of Millspaugh. See Rouhollah K. Ramazani, The Foreign Policy of Iran: A Developing Nation in World Affairs, 1500–1941 (Charlottesville: University Press of Virginia, 1966), 209.

94. Heroy to secretary of state, 12 March 1923 (891.6363/276).

95. Engert to Dulles, 19 January 1923 (891.6363/273).

96. Article I of the draft contract read: “The Parliament of Persia approves the granting of a concession for the exploration and exploitation of petroleum, asphalt, natural gas and related hydrocarbonous substances in those provinces of Persia which are termed Khorassan, Azerbaidjan (including Ardebil) and two of the three provinces fronting on the Caspian Sea (called Gilan, Mazandaran and Asterabad), which in accordance with this law shall be termed the ‘Four Provinces'” (891.6363/286, enclosure).

97. Kornfeld to secretary of state, 26 May 1923 (891.6363/286) and same to same, 5 June 1923 (891.6363/289). The animosity between Millspaugh and Kornfeld presumably grew out of policy disputes and attempts by each to one-up the other as the most influential American in Persia.

98. Kornfeld to secretary of state, 31 May 1923 (891.6363/287).

99. Kornfeld to Millspaugh, 13 June 1923 (891.6363/295).

100. “Meeting with Dr. Kornfeld on June 26, 1923,” Millspaugh to secretary of state, 26 June 1923 (891.6363/295).

101. Millspaugh to secretary of state, 8 July 1923 (891.6363/295): “It is clear that those who are opposed to the entrance of American interests into Persia could not have accomplished their purpose more cleverly or selected a more effective instrument that the American Minister.” In his book The American Task in Persia (1925) Millspaugh makes no reference to his dispute with Kornfeld.

102. Dulles to secretary of state, 10 July 1923 (891.6363/295).

103. Dulles to secretary of state, 5 November 1923 (891.6363/304).

104. Ibid. Millspaugh later wrote: “As Administrator General of the Finances, I had a contract approved by the Parliament providing for substantial powers, and again the State Department made it clear that members of the Mission had no official connection with the United States government, which assumed no responsibility for what they might do or leave undone” (Americans in Persia [Washington: The Brookings Institution, 1946], 22).

105. Secretary of state to president, 8 November 1923 (891.6363/304).

106. Crandall to secretary of state (enclosure), 15 November 1923 (891.6363/307).

107. “The Present Political Situation in Persia as Affecting the American Advisers and Prospective American Trade,” Gotlieb to secretary of state, 2 December 1923 (891.6363/312).

108. Ibid. Millspaugh was kept out of the loop by the ministers of foreign affairs and finance on the final phase of concessionary negotiations until Riza Khan had signed (Gotlieb to secretary of state, 27 December 1923 [891.6363/321]).

109. Same to same, 2 December 1923 (891.6363/312).

110. Same to same, 14 December 1923 (891.6363/317).

111. Same to same, 27 December 1923 (891.6363/321).

112. Sinclair opted to exclude Gilan—the center of the five northern provinces—because of the difficulty of exploiting oil in this province without the acquiescence of the company (John Randolph, American consul in Baghdad, to secretary of state, 29 January 1924 [891.6363/329]). The Persian government granted a concession over the remaining province to Mu'in al-Tujjar Bushihri (Baghdad Times, 24 January 1924 [891.6363/329]).

113. Gotlieb to secretary of state, 27 December 1923 (891.6363/321).

114. Mīhan, 25 December 1923 (891.6363/321), and Sitāra-yi Īrān, 24 December 1923 (891.6363/321).

115. Sitāra-yi Īrān, 24 and 26 December 1923 (891.6363/321).

116. “Memorandum of Conversation with Mr. Wellman,” Dulles to secretary of state, 24 January 1924 (891.6363/328). A statement to this effect was published in the February 1924 edition of The Lamp, Standard's official magazine, and in the New York Times, 4 February 1924 (891.6363/334 and 891.6363/347).

117. “Memorandum of Conversation with Mr. Wellman,” Dulles to secretary of state, 24 January 1924 (891.6363/328).

118. For the Teapot Dome scandal see Yergin, The Prize, 212–15; John Ise, The United States Oil Policy (New Haven: Yale University Press, 1926), 358, 364. In 1931 Fall went to prison and Harry Sinclair was sentenced to six and a half months in jail for contempt of court and the Senate.

119. “Effect of American Oil Scandal on the Sinclair Concession in Persia,” Charles DeVault to secretary of state, 2 February 1924 (891.6363/333).

120. “North Persian Oil Concession and Railroad Project,” Gotlieb to secretary of state, 28 February 1924 (891.6363/349). Reuters was also accused of giving “disproportionate” attention to the Teapot Dome affair. Reuters was “published under the auspices of, and censored by, the British Legation in Teheran … [and its reporting] may be looked upon as semi-official statements which the British Government desired to have published in Persia” (Engert to secretary of state, 9 December 1921 [891.6363/62]).

121. Secretary of state to American legation in Tehran, 7 February 1924 (891. 6363/335a); also “Sinclair in Fear of Standard Oil Plots in Persia,” New York World, 13 February 1924.

122. Secretary of state to American legation in Tehran, 7 February 1924 (891. 6363/335a).

123. Baghdad Times, 4 February 1924.

124. ‘Ala to secretary of state, 12 February 1924 (891.6363/339).

125. “North Persian Oil Concession and Railroad Project,” Gotlieb to secretary of state, 28 February 1924 (891.6363/349).

126. “Translations from the Persian Press of Teheran,” Sitāra-yi Īrān, 21 April 1924 (unnumbered).

127. Murray to secretary of state, 18 October 1924 (891.6363/386).

128. Ibid.

129. “The Answer of the Sinclair!,” īrān, 5 October 1924 (891.6363/386).

130. Ibid.

131. “The Fate of the Northern Oil,” Shafaq-i surkh, 4 November 1924 (891.6363/ 386).

132. “Statement About the Northern Oil,” Shafaq-i surkh, 21 October 1924 (891. 6363/386). This was the first issue of Shafaq-i surkh to appear after a three-month suspension. Therefore, this editorial was probably careful not to displease the government.

133. Soper to Murray, 24 October 1924 (891.6363/392).

134. Ibid. According to Ferrier, writer of the official history of the APOC, Imbrie was killed while photographing a religious ceremony (History of the British Petroleum Company, 579). However, Harold Spencer, a British secret service agent, theorized that Imbrie “was assassinated by a mob organized by financiers in the United States and England, who thought his influence might swing control of the Persian oil fields from the Shell group to an American syndicate in which the Sinclair group has the major interest” (Chester, Edward W., United States Oil Policy and Diplomacy [Westport, Conn.: Greenwood Press, 1983], 255Google Scholar).

135. Mīhan, 2 December 1924 (891.6363/393).

136. Mīhan, 30 November 1924 (891.6363/394).

137. Shwadran, Middle East, 93.

138. Chester, United States Oil Policy, 256.