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revenue and expenditure during a given year, showing the surplus or de
ficit carried forward, it is impossible to attach any real importance to the
budget estimates solemnly submitted to and approved by the Majlis year
by year. It is difficult to express any useful opinion on the financial condi
tion of the country in the absence of any exact statistical information,
but the opinion generally held is that the situation is far from being that
suggested by the budget estimates and by the inspired comments of a strictly
controlled local pi ess.
8. The national budget is usually accompanied, or rapidly followed by,
a supplementary budget showing credits in sterling for the payment of foreign
commitments. For the past few years this supplementary budget has con
tained a credit of £2,000,000—approximately equal to the whole sum in res
pect of royalties and taxation received from the Anglo-Iranian Oil Company,
together with other considerable credits in respect of railway construction and
equipment and other Government purchases. The oil royalties are usually
described as being passed to the credit of the “ national reserve ”, but
the acute shortage of foreign exchange which has prevailed for over a
year suggests that the disproportion between the national reserve and imme
diate national obligations is so great that all the ingenuity of the Iranian
Government will not be able to balance the account without tapping some
new source of supply. It is commonly thought that this new source of
supply will take the form of a loan contracted abroad.
9. There is a strong rumour that Monsieur Fehimy, a former Minister
of Finance and now Ambassador at Ankara, is being recalled and will be ap
pointed to succeed Monsieur Davar. It is also said that anxious conferences
are taking place at the Ministry of Finance attended by Monsieur Ala, the new
Controller of Government Monopoly Companies, with the object of presenting
a report on the financial situation and on proposed remedies to His Majesty
the Shah when he returns from his visit to the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . Some of the
Government monopolies created during the last year or so are not expected
to survive the critical examination to which their affairs are likely to be sub
jected.
10. I am sending copies of this despatch to the Department of Overseas
trade unnumbered, to the Foreign Secretary to the Government of India
No. 53 and to His Majesty’s Ambassador at Baghdad No. 23.
P. S .—As usual there are several mistakes in the Budget figures
published, and the additions of the 1316 (this year’s) figures do not agree
with the totals. I have attached on a separate sheet certain discrepancies
revealed by comparison with publications in the vernacular.
Enclosure 1 to S. No. 27.
Budget estimates published in “ Le Journal De teheran ” March
1937.
Comparison with publications in the vernacular show the following
differences :
Revenue —
On first page under Concessions, Fisheries, for 11,100,000 read 11,200,000-
At the bottom of first page, under “ Biens domaniaux etc.” the amount
for “ Pecheries locales ” is left out altogether : insert for 1315 500,000 and
for 1316 750,000.
On 2nd page the third item from the top the figure for 1316 should be
the same as for 1315, i.e., 724,130.
The totals of Revenue are inverted by mistake.
Expenditure —
The first item should be the same as for 1315, i.e.. Rials 5,171,840.