Ext 5001/41 'PERSIA – INTERNAL (Miscellaneous despatches).' [‎85v] (170/248)

4. The price increase has continued, although there are now signs that
the measures of control that Dr. Millspaugh has forecast have stayed the
upward course. Wages are slowly attempting to keep pace, although up to now
the Government, on account of its own financial stringency, has been unable to
increase the salaries of its employees, who, in Dr. Millspaugh’s own words, are
“stealing right and left.” Unfortunately, the stealing is not limited to the
sums needed by the employees to keep themselves and their families alive. The^
exchequer is faced with immediate bankruptcy, and it is doubtful if, at the end
of the current Persian month, there will be enough cash in the Government coffers
to enable the Government to meet its essential obligations.
5. A Price-Fixing Scheme has been inaugurated under the powers con-
S rred on Dr. Millspaugh by the Special Powers Law, which Soheily, with
rhaps more courage than was expected, pushed through the Majlis against
powerful, if not very vocal, opposition. So far only the beginnings of the scheme
are in being, and the measures already taken are in the nature of preparation
of the ground. A Price-Stabilisation Section (P.S.S.) has been established under
the direct control of an American director-general, responsible to the Director-
General of Finance. The authority of the Majlis is being sought for the engage
ment of nine additional American assistants for this service. Certain goods
(mainly essential commodities) have been declared Government monopolies, and
their import and export prohibited except by the P.S.S. or by merchants acting
under Government licence, and regulations have been made with the object
of bringing under Government control the stocks of these commodities that are
already in the country and held up by speculators and hoarders. An attempt
has been made to stabilise rents by a Regulation which fixes rents at the figure
prevailing in February 1943.
6 . Two other important projects are before the Majlis—a Bill to revise
the present inadequate law relating to Income Tax, and a Bill to authorise an
issue of Treasury Bonds. They are making a leisurely progress through
Parliamentary Commissions, and Dr. Millspaugh has now informed the Prime
Minister that both must be passed without further delay. The Income Tax
Bill has aroused much criticicm from the vested interests who would be hard hit
by it, and the Prime Minister has already bowed before the storm and hinted
that there will be “ adjustments ’’ before the measure reaches the Statute book.
7. Other projects have been launched by the Government in an attempt to
reduce the amount of currency in circulation, including the sale of Government
stocks of silver and diamonds. Not much success has so far attended them.
Sales of gold on behalf of His Majesty’s Government began on the 26th June,
and some incidental relief to the currency situation may be afforded by this
means.
8 . It it now evident that Persia is faced with a deficit of at least 1,500
million rials on the budget for the current financial year. There is no hope
that this can be met from internal resources, and Dr. Millspaugh has already
recommended to the Government that an application should be made to Britain
and the United States for financial help in the form of a loan.
9. The Majlis has been in session throughout the period under review, and,
as mentioned above, has passed some legislation. It also passed the first reading
of a Bill for the insurance of workmen in the middle of April. The various
so-called “parties” still exist, at any rate on paper. The “ Tudeh ” party
is still the only one which seems to have achieved a definite policy and to have
conducted a definite campaign in the provinces. Talk of certain other com
binations of parties is sometimes heard, e.g., the “ Flamrahan ” party of Mustafa
Fateh was said to be reaching an understanding not only with the Liberal
“ Millat ” group of Muhammad Sadegh Tabatabai, but also with the “ Tudeh,”
but it seems that the Tudeh party was not enthusiastic for the proposal. A
good deal has been heard of Seyyid Zia ed Din Tabatabai, but more by way of
criticism than of support. Majlis Deputies such as Teheranchi and Niqabat
are bitterly opposed to the return of the exiled Seyyid. and the Russians and the
Shah seem equally critical. Nevertheless, the Seyyid has a certain number of
supporters both in and out of the Majlis, and their latest idea is to arrange for
the Seyyid to return to Persia in a private capacity in order to be able to show
himself and conduct his own campaign in person.
10 . The elections are beginning to loom very large on the political horizon.
The Royal Rescript announcing the coming elections for the 14th Majlis was
duly promulgated on the 23rd June, and two months after that the elections are
due to commence. The Prime Minister has told journalists that the elections
will be free, though whether in actual fact such an unprecedented event will