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          oycr tlio Persian Government may say officially to Ilia Majesty’s Minister in
          J. eh ran. {Similarly any Persian arriving with an Ilm-o-khabar, or yellow piece
          ol paper permitting the traveller to proceed from one Persian port to another
          hus it confiscated on his arrival.
              (d) During the summer of 1933 the Ilm-o-khabar system was reported to
          have been abolished, certainly Persians who arrived in Kuwait began to come
          armed with proper passports ; but as these were all marked India via Kuwait
          and Oman, or Iraq via Kuwait and Oman, the Political Agent, acting under
          orders, charged the holders 10 gold francs (approximately Rs. 7) on their
          landing.
             3. Persian Navy.—(a) Persian Sloops in the Gulf have been very active
          in their efforts to stop contraband going over to the Arab Coast during 1933.
          Unfortunately the zeal of the officers of this newly re-constituted Navv has been
          far outrunning their discretion. A number of Kuwait craft were seized, in some
          cases on the High Seas, and taken into Persian ports for investigation. The
          cases have formed the subject of vigorous protest by Ilis Majesty’s Minister at
          Tehran but hitherto with little result.
                               IX.—Oil Interests.
             (a) The “ Oil ” fight between the Anglo-Pprsian Oil Company and fho
         Eastern and General Syndicate, representing American interests, who throughout
          1932, each sought to get a concession from the Shaikh, continued vigorously
         throughput 1938.
             (/>) The Shaikh in spite of tempting offers from the Americans and Sir John
         Cadman himself, who visited Kuwait on 25th March 1933, refused finally to give
         tjio concession to either party, and
             (o) on 15th May 1933 the Shaikh informed the Honourable the Political
         Resident in the Persian Gulf that lie had decided to postpone all negotiations
         with either party sine die.
             (d) By the end of the 1933, it became known that the Eastern and General
         Syndicate had withdrawn from the field and that the Mellon Oil group of the
         Jj. S. A. and the A. P. 0. C. had come to an agreement on a 50|50 basis, and
         were about to form a single company to be known as the Kuwait Oil Company.
         It was hoped that the representatives of the new concern would come out to
         Kuwait in the new year and pul fresh proposals forward to the Shaikh.
            Note.—This they did in February 1934, and the Shaikh is now considering their
         combined olTcr.
                               X.—Post and Telegraphs.
             (a) The Post and Telegraph service in Kuwait continued to be managed by
         the Iraq Government throughout 1933. (See Administration Report for 1932.)
             (h) The protracted negotiations which His Majesty’s Government have had
         with the Iraq Government on the subject of the future of the Post and Telegraphs
         are at the time of writing still unfinished.
             (c)  It is hoped that 1934 will sec something satisfactory to both Governments
         emerge from the “ fog which at present seems to have settled down on this
         .unsatisfactory business.
             (d)  Without doubt, Iraq intends to strain every nerve to keep her Post and
         •Telegraph hold in Kuwait partly for political reasons, while the view point ok
         the Shaikh is that Iraq should only be allowed to stay in Kuwait on condition
         that
              1.  She gives a document admitting the independence of Kuwait.
              2.  She pays Kuwait a percentage of her takings.
              3.  She agrees to a formal agreement limiting her stay in Kuwait tD 20
                    years.
         The above are rcallv the major points at issue, other minor details and demands
                                                                                           .
         pf the Shaikh, can,*it is hoped, be overcome.
             (c) The demands of the Shaikh have all been communicated to the Iraq
         Government, but by the end of the year she has kept her reply i» abeyance,




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