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e anmight continuay, even if sown i
5. It is possible that even if no negotiated settlementcan be achieved, the pubishment visited on us will not betoo heavy. But I do not think that we can hope toescape punishment altogether in that case, Nor do Ithink the Shah's threats and promises are solely intended tofrighten or cajole us into doing his will. He nurses adeep suspicion of the British and has not forgiven us fordriving his father into exile. Even if his interest inpunishing or rewarding us was diminished once the outcomewas clear, he would not forgive us lightly for letting himdown; nor would he forget us for backing him up. ASI said in the despatch, we would be prudent to discount someof the promises, but I think we would be well rewarded ifthe Shah felt grateful. He hinted at this again in myaudience on 7 September. We would also feel his displeasure,if he were annoyed. For the sake of Iran's long terminterests he might continue political cooperation with us.But the Shah's "yea" or "nay", even if exercised only incircumstances where the effect on Iran's own interests wasno more than marginal, could make a great difference to ourcommercial interests. I do not want to over-dramatise, buteven a year in the commercial dog-house could do our tradeprospects permanent harm, particulariy at a time when anew Five Year Plan was being launched, with so many pushingforeign competitors waiting to oust us from this profitablemarket. Once they are in and we are out it would not beeasy later to restore the situation. The forecast inparagraph 18 of my despatch that a thaw might come after ayear was based on the assumption that we would subsequentlybe as helpful as possible to Iran if she took the islandsby force. If we were not helpful over this, I think wewould be in for a very bleak time for a much longer period.And the Shah would certainly have used his stick to try tobreak up the U.A.E. - which would also be a blow at a majorBritish interest,
6. I have not forgotten that the Arabs could reward orpunish us too. But I was interested in the suggestion inparagraph 5 of Jedda telegram no. 762 that the Arabs wouldblame us for any Arab-Iranian confrontation over the islands,which suggests that if we leave things to come to that, wewould get the worst of both worlds; whereas if the Shahwere to be satisfied at Arab expense, we would only get theworst of one world,
Peter Ramsbotham
Copy to Sir Geoffrey Arthur, K.C.M.G., Bahrain Residency
I.S. Winchester, Esq., Jedda
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