Coll 28/97(1) ‘Persia. Diaries. Tehran Intelligence Summaries.’ [‎399r] (797/807)

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(i\) Majid Hruze (Nasr-ed-Dowleh), commanding the Air Force and head
of the Legal Department of the Army.
I he following Sarhangs (Colonels) to be Sartips :—
. (v) Abdul Ali Itemad Moqaddam, Deputy Chief of the Gendarmerie.
(vi) Ghulam Hussein Naqdi, Judge Advocate-General’s Department, War
Office.
(vii) Ibrahim Zarabi, commanding the gendarmerie of the South-Western
District.
(viii) Colonel Garzan, formerly employed in the Railway Administration, to
be Director of the 1 st Bureau, General Staff, Army Headquarters,
vice Sarhang Shahrais.
British Interests.
11. A Financial Agreement between the British and Persian Governments
was signed on the 26th May :—
(i) The agreement fixes the sterling/rial rate for the duration of the war
at 128/130, and corresponding rate for United States dollars based
on the official sterling/dollar rate of exchange.
(ii) The Persian Government undertakes—
(a) To purchase for rials at the controlled rates of exchange all
sterling area currencies offered to finance the British Govern
ment’s expenditure in Persia;
(h) To place no unreasonable restriction on transactions in sterling
area currencies;
(c) To allow all authorised transactions to take place at the controlled
rates of exchange; and
(d) To make arrangements for maintaining a supply of local currency
adequate to finance all commercial and financial transactions
between Persia and the sterling area.
(iii) The British Government undertakes—
(a) To do everything possible to ensure a flow of essential supplies to
Persia.
(b) If Persia has insufficient dollar balances to pay for “ essential
supplies ” from North America, to convert into gold so much
of Persia’s sterling balances as are needed to make up the
insufficiency of her dollars.
(c) To convert into gold 40 per cent, of Persia’s final unspent sterling
balances as at the 30th June, 1942, and 40 per cent, of the half-
yearly accretions thereafter.
(d) To guarantee Persia’s sterling balances against any depreciation
of sterling in terms of gold.
(iv) The agreement extends treatment to Persia that has not been extended
to other countries in the Middle East; in particular, the provisions
relating to gold conversion and guarantee of sterling balance may, if
they become generally known, cause some embarrassment to His
Majesty’s Government in their financial relations with these other
countries. Accordingly, as little publicity as possible will be given to
the contents of the agreement, although the fact that it must go before
a public. session of the Majlis for formal confirmation makes it
impossible to treat the agreement as confidential.
(v) With effect from the 14th May, the Persian Government authorised the
resumption of dealings by the authorised banks in foreign exchange at
the rates of exchange fixed by the agreement. So far as sterling area,
currencies are concerned, the Exchange Commission is granting
buying and selling permits freely.
(vi) The special arrangement for the supply of local currency for the
Army, &c., that was introduced by His Majesty’s Legation when the
Persian Government placed a ban on the purchase of foreign
exchange has now been terminated, as normal dealings in foreign
exchange have been resumed.