Papers of the War Cabinet's Eastern Committee [‎108r] (215/544)

5
Persia:
Expenditure by
General Dunster-
ville.
I
*
Palestine and
Arabia:
Position of General
Clayton.
5. The Committee had before them a memorandum by
Mr. Keynes, of the Treasury (E.C.-1492), regarding the serious
financial situation in Persia due to the heavy calls made upon the
Imperial Bank of Persia by General Dunsterville.
Mr. Keynes stated that Dunsterville had already run down
the Treasury of the Imperial Bank of Persia bo danger point, and
that there were no possible means of providing him with money at
the present exorbitant rate of expenditure. The highest amount
the Imperial Bank of Persia had hitherto furnished to us in one
month had been 22,000,000 krans, and the average provision
hitherto had been 16,000,000 krans. By cutting down the reserves
of the Imperial Bank of Persia it might be possible to furnish
25,000,000 krans a month. Dunsterville’s demand for the month
of September amounted however to 65,000,000 krans—which could
not possibly be met. The latter’s expenditure was both
unauthorised and unexplained. No telegrams had been received
from him at the War Office accounting for such extravagant dis
bursements of money. Mr. Keynes hoped that telegrams would be
sent to Sir C. Marling instructing the Bank to desist from honour
ing Dunsterville’s drafts, and to the latter limiting his expendi
ture to 15,000,000 krans a month.
General Macdoiiogh stated that, in his view, an official of the
Imperial Bank of Persia should be attached to Dunsterville s
administrative headquarters, since it was clear that he had no idea
of the financial difficulties which he was creating.
Mr. Montagu stated that provision of silver was out of the
question, but that the Government of India would do all that was
possible to provide the Imperial Bank of Persia with the necessary
rupee bill*.
Mr. Keynes pointed out that there was practically no note
circulation in Persia, and that a forced paper issue would probably
ruin the Bank, and would certainly ruin our prestige in Persia.
There was a limit to the number of rupee bills which could be pro
vided by India, and a still further limitation to the number which
the Imperial Bank of Persia could sell.
The Chairman thought that General Dunsterville should be
immediately asked for a full explanation of his expenditure under
the various heads, and instructed to budget on a greatly reduced
scale, and further that a telegram should be sent to Teheran invit
ing the opinion of the British Minister in consultation with the
Imperial Bank of Persia as to the maximum monthly extent to
which thev could meet Dunsterville's demands.
Mr. Oliphant asked that it should be made clear to oir C.
Marling that political calls on the Bank made by him or Sir P^ Cox
in pursuance of agreement with the Persian Government should
have priority over Dunsterville’s demands.
Mr. Balfour agreed that it would be fatal to starve feir O.
Marling in order to provide Dunsterville with funds.
The Committee requested Mr. Keynes to draft two telegrams
■ fAppendices “A ” and “B"), 11 A ” for despatch to
General Marshall for General Dunsterville, and B to
Sir C. Marling.
6 The Committee took note of a telegram from Sir R
/ina-ate (E.C.-1448) appointing General Clayton Director of all
Ranches of the Arab Bureau in addition to acting as Chief
’olitical Officer for Palestine and the Hejaz.
[365—29]
C