خارجي ٤١/٥٠٠١ "بلاد فارس - الشؤون الداخلية (إرساليات متنوعة)". [ظ‎‎٣‎٠] (٢٤٨/٦٠)

12
distribution, price control and sale of certain food-stuffs and other goods as
distinguished from his financial powers proper. On the 8th January the Majlis
passed a Bill depriving him of them, the voting being 69 votes to 6 with 20 absten
tions. Although efforts were made in some quarters to persuade him to remain
with limited powers, he resigned and left Persia on the 28th February, justifiably
disgusted at his treatment hy the Persian Government and its ingratitude for the
very considerable services which he had rendered. (For an appreciation of his~
qualities and defects please see paragraph 64 of the Annual Political Review
conveyed in my despatch No. 73 of the 9th March, 1945.) Some of his American
staff have also resigned, but most of them are remaining, with their powers
reduced to that of advisers. (The principal ones are Mr. Pixley and Dr. Black.)
They are not, however, of very high calibre or of sufficiently strong personality to
influence the Persian Government towards setting its house in order; and unless
an adequate successor to Dr. Millspaugh is appointed (which at the present stage
appears improbable) the financial situation is likely to become even more serious.
Finance.
77. The budgetary out-turn for the first ten months of the current financial
year, i.e., up to the 20th January, 1945, has been as follows. (Figures for the same
period in the year 1943-44 are given for comparison) :—
1943-U. 19U-45.
(Million rials.)
Ordinary revenue
Ordinary expenditure ...
3,649
3,124
3,183
3,200
*
+ 525
17
• Commercial revenue
Commercial expenditure
1,745
3,193
2,857
3,396
-1,448
• - 539
Net deficit
923
556
The payment of salaries to Government servants is, however, a month in arrear,
and about 200 million rials should therefore be added to the deficit on the ordinary
budget on this account.
78. It is most improbable that Dr. Millspaugh’s hope of balancing the
governmental accounts for 1944-45 will be realised, mainly owing to the passive
resistance on the part of the taxpayer to the payment of income tax, the inadequate
system of collection and the corruption of the underpaid revenue officials.
Receipts from income tax for the first ten months of the year have been less than
for the corresponding period in the previous year, when the rates were consider
ably lower. In Dr. Millspaugh’s view it was by no means impossible that, after
his departure, the Government would abolish the income tax. It is expected that
a Bill will shortly be tabled in the Majlis at any rate reducing the rates of tax
for the future; and it is hardly likely that any sufficient steps will be taken to
collect arrears. In the meantime, the Government has reached its statutory
limit of borrowing from the National Bank, and its internal debt stands at
4,800 million rials.
79. The ordinary budget for the year 1945-46 (beginning on the 21st March,
1945) was recently presented to the Majlis, which has not even yet approved the
budget for 1944^45. This new budget balances at 4,412 million rials, but only
with the help of the transfer of a surplus of 500 million rials from the commercial
budget, which has not yet been prepared. This can hardly be more than wishful
thinking, as the deficit on the commercial budget was 1,741 million in 1943-44
and has been 539 million in the first ten months of the current financial year.
The estimated receipts from income tax for the year 1945-46 are 644 million,
compared with the estimate of 885 million for 1944-45, but are still almost
certainly too high.
80. Note circulation and bank deposits are still increasing. The former,
which was just under 1,000 million in 1939, was 6,640 million in December 1944
and 6,709 million in February 1945. Bank deposits, about 500 million in 1939,
were 9,003 million in December 1944, and 9,800 in February 1945. The wholesale
price index, which was 497 in December, decreased slightly to 486 in February,
while the cost of living index rose from 684 in December to 693 in Februarv.