Coll 17/10(4) 'Internal: political situation; relations with HMG' [‎48v] (96/1031)

4. The “ Edmonds Committee ” on political detainees was reassembled at
the end of March by the late Minister of the Interior. They recommended the
unconditional release of twenty-five men and the release on security of four others.
These recommendations were accepted by the Council of Ministers and the
twenty-nine men concerned were freed on the 12 th April. The Military Security
authorities were kept fully informed of the committee’s work and no attempt was
made by the Minister of the Interior, or any other Minister, to influence the
committee’s decisions.
5. The Iraqis interned in Southern Rhodesia returned to Iraq on the
2nd April and were at once taken into custody by the Iraqi authorities. This
trial began in May last but does not seem to have made much progress. The
change of Government may possibly cause new delays.
6 . In the financial field the major developments during the past two months
have been the submission of a record budget to Parliament, the participation of
the Iraqi Government in the Middle East Financial Conference in Cairo beginning
on the 23rd April, the approval of legislation for the flotation of two internal
loans, and the payment of the debt of approximately £330,000 for the Hinaidi
Cantonment, which had been outstanding for nearly six years.
7. The 1944-45 budget estimates contain several 'important innovations,
including the amalgamation of the ordinary and capital works budgets, hitherto
kept separate, and the creation of an emergency budget, covering the expenses of
the supplies organisation and the cost-of-living allowances, on the one hand, and
profits on Government trading on the other. The total combined revenue is
estimated at ID. 17,712,740, which almost balances the total combined expen
diture at ID. 17,696,500. The latter figure is ID. 1,555,843 higher than the
corresponding figure for the preceding year and is more than twice the pre-war
budget expenditure. The budget estimates have been approved by the Chamber
of Deputies with comparatively little modification, but only after lively debate,
during which full opportunity was taken by Nuri Pasha’s opponents to attack
the Government’s policy, especially on supply matters. The estimates are now
before the Senate Financial Committee.
8 - The Iraqi Government sent a strong delegation, headed by the Minister
r Saiyid Ali Mumtaz, to the Middle East Financial Conference, and
1 understand that they acquitted themselves well. They were able to point out
that Iraq was well in the van of the Middle Eastern countries as regards anti-
inflation measures, having, for example, already raised income tax to a high level,
initiated action for the issue of local loans, as well as being one of the verv few
countries in the Middle East where prices of bulk cereals have been showing a
downward trend.
9. Legislation was submitted to Parliament on the 18th April authorisiim
the flotation of two local loans—one short-term for a total of ID. 1 million
bearing interest at 3 per cent., and the other a long-term lottery loan with interest
at 4 per cent., of which 2 per cent, will be paid as interest and the remaining
2 per cent, in the form of prizes. The proceeds of the loans are; to be reserved for
railway and irrigation development. The Bill was finally approved by Parlia
ment on the 28th Ala^y. Doubts continue to be held, however, in some quarters
i egarding the outcome of this \enture into what is a novel form of investment in
Iraq and at the beginning of May there were for a time heavy withdrawals of
currency from the banks owing to malicious rumours to the'effect that bank
depositors would be forced to subscribe to the loans.
10 . In the economic field the Government have decided to carry out crop
assessments in respect of the 1944 wheat and barley harvests, but on different
lines from last year. Instead of individual assessments, based on inspection of
individual crops and the out-turn on the threshing floor, last year’s assessments
are to be adjusted in accordance with crop conditions in the various areas a
reduction of 20 to 30 per cent, being taken as a general guide. On balance
this new system should give fairly adequate, though by no means ideal, results!
I he Government will probably take over half the wheat crop again Their
policy regarding barley, on the other hand, will be largely governed by the
volume and pace of purchases by the United Kingdom Commercial Corporation.
B\ nolding off the maiket until prices broke in April the Corporation after
completing their 1943 contract to buy 200,000 tons at ID. 20/500 a ton at
collecting centres, were able to purchase substantial quantities of barley at a
pi ice equivalent to rather less than ID. 16/000 a ton. They were however
obliged to suspend purchases at the end of April as there seemed’ to be no
immediate prospect of moving the barley from Iraq owing to shippin cr difficulties
while storage was proving difficult for the 50,000 odd tons already on hand in