خارجي ٤١/٥٠٠١ "بلاد فارس - الشؤون الداخلية (إرساليات متنوعة)". [و‎‎٦‎٠] (٢٤٨/١١٩)

9
under the Minister of the Interior. That no improvement is yet visible is due
not to any lack of enthusiasm or energy on his part but largely to lack of
sufficient funds to pay the officers and men of the force a living wage, to shortage
of clothing and equipment and, in some degree, to his own too great confidence in
the co-operation of his Persian colleagues. He is planning for the current year
for a force of eighteen regiments, with a total strength of 28,000 officers and men,
divided into eight districts corresponding approximately with the provinces;
'^h of six districts to have two regiments and the Tehran and Pars districts to
have three each. The cost of this force, at the rates of pay he considers necessary
to attract a suitable type of man, will probably amount to 50-60 million tomans
for the year, an increase of 100 per cent, on the provision made last year. An
additonal three American officers are now on their way to join Colonel
Schwarzkopf’s staff which, on their arrival, will total six.
Persian A ir Force.
52. The reorganisation of the Persian Air Force drags slowly on. They
are resuming under Royal Air Force guidance various brandhes of training
which have been neglected over recent years and a certain amount of their equip
ment is being shown to be more serviceable than they thought. It is hoped that
the delivery of their eagerly-awaited Ansons may be the beginning of a serious
attempt to reach a degree of operational efficiency.
53. Colonel Stedakh, who was attending the Middle East Staff College, has
had a nervous breakdown and has had to be recalled to Tehran. Headquarters,
Royal Air Force, Middle East, have offered to accept another officer, if a suitable
one can be found, for the summer course at the college.
Finance.
54. The inflationary situation remains serious, though the prospects of
keeping it under control are better since the staff of the Millspaugh Mission has
been increased. It is hoped to achieve more success in the enforcement of the
Price Stabilisation Regulations and in the curtailment of black market activities;
while Dr. Millspaugh also feels reasonably optimistic about the budgetary
situation, as revenue is coming in better than he had expected. Ihere are also
indications that the Persian Government, no doubt under pressure from the
Millspaugh Mission, are taking steps to put their house in order. They have
begun a series of investigations into large-scale embezzlements and frauds which
have occurred in various Government administration departments, and as a result
there have been some dismissals and arrests in the Road Transport Department,
the army and in the Ministry of Finance. The cost of living indices still show
up upward tendency, though of late the rate of increase has slackened. In
December the figure was 1,050, in January 1,076, and in February 1,082. The
wholesale price index over the same period was 665, 668 and 662 respectively.
The incidence of note circulation also increased during the past three months.
On the 14th December currency notes in circulation amounted to 5,195*07 million
rials, while on the 12th February they had risen to 5,701 *06 million rials.
55. The currency situation gave rise to some anxiety in February. It was
found that, unless a substantial portion of the note forms which are being printed
in London were flown to Tehran immediately upon delivery from the printers,
there would be a serious currency shortage in April, and air transport did not
seem to be available. If such a ^shortage occurred, not only would it seriously
embarrass the Persian Government in its financial obligations, but it would also
affect the supply of war materials to the Soviet Union. A peculiarity of the
situation was that, although the National Bank of Iran was short of notes, the
Imperial Bank of Iran had a surplus of about 300 million rials in excess of its
normal reserve. It was suggested that these rials might be utilised to finance
British military expenditure in Persia over the crucial two or three months when
the currency shortage would be most acute, thus easing the position of the
National Bank, which would otherwise be called upon to produce rials against
sterling to meet this expenditure. Several technical difficulties arose in trying
to find the manner in which this could best be accomplished to everyone’s satis
faction. but in the event it was found possible to transport to Persia by air notes
to the value of 450 million rials, which relieved the situation.
56. The conclusion of a financial agreement to cover the use of the Iranian
State railways by the Allied Powers has hung fire for over two years, but at the
[53—28] c