خارجي ٤١/٥٠٠١ "بلاد فارس - الشؤون الداخلية (إرساليات متنوعة)". [و‎‎٧‎٥] (٢٤٨/١٤٩)

7 ^'
iefoiin the I ei’sian Income lax laws in the direction of exacting an equitable
contribution to revenue from the wealthier sections of the community. Both
Bills have now reached the Statute Book.
Although quite uncontroversial, the Treasury Bonds Bill was not passed
by the Majlis until near the end of September. The Bonds have not yet been
placed on offer, as the regulations with regard to maturity, rates of interest &e
v^re still to be made.
j h e Income I ax Bill caused a crisis which all but led to the resignation
t>-ii i Ml ! ls P au g h . an d the departure of the American Financial Mission. The
i hung in the Financial Commission of the Chamber for many weeks, and went
tirough a piocess of emasculation which destroyed much of its original purpose.
Finally during the first week of November, it came before the Deputies in full
session for enactment. Amendment after amendment was proposed—all directed
towards relieving the pockets of the rich from the incidence of the income tax It
seemed, indeed, that the purpose of the Deputies was to shelve such an unpopular
measure anyhow during their term of office, which would so soon expire
Dr. Millspaugh, however, took up the challenge : he decided to make this issue a
test of the sincerity and public spirit of the Deputies; and let it be known that
unless the Bill was passed (amended only in such respects as he thought reason
able) he was not prepared to remain. On the 14th October, he had informed the
Covei nment that as the Majlis had not provided me with the means of fulfilling
my responsibilities, I considered that my contract had been terminated,” and set
the date of his resignation at the 2 nd November. The Shah then let it be known
that it was his desire that the two Bills to which Dr. Millspaugh attached primarv
importance should be passed, namely, the Income Tax Bill and the Bill providing
for the engagement of sixty American advisers. The latter measure was immedf-
?^ e y AT e n aCted V ai 1 ld ne ^tiations with regard to the Income Tax Bill began
Dr Millspaugh then undertook, at the urgent request of the Prime Minister to
postpone the date of his resignation until the 10 th November, and later he agreed
pers K ona ^ equ f 1 ° f Shah ' to a further postponement until the
12 th November On the 11 th November the Deputies capitulated and the Bill
was passed. An amended text of the Bill is not vet available. Dr. Millspaugh
informs me that, while the measure as finally passed represents a substantial
compromise on his original proposals, most of the points of principle on which
he stood have been incorporated. I shall report on the measure in a special
despatch m due course. ^ a apeemi
24. Dr. Millspaugh has spoken to me with appreciation of the support and
encouragement which he obtained during the crisis from the Shah; and His
Majesty s Legation has conveyed to His Imperial Majesty the gratification of
His Majesty s Government that His Imperial Majesty’s influence was exercised
m support of the American Financial Mission, in this difficult situation.
,, ,!e Budget Law for the current financial year has now been passed bv
the Majlis. As presented, the budget was divided into two parts— the ordinary
budget, showing a deficit of about 1,400 million rials and the extraordina -v
budget (covering the industrial and trading operations of the Government?
which was self-balancing Dr. Millspaugh had already indicated to the Deputies
that he saw no means of meeting the deficit in the ordinary budget extent bv
recGursc to foreign financial help; and negotiations were already wellon theway
United t ^ 01u ais1011 , of a Stabilisation Fund Agreement between Persia and the
Vfn 1 d ii St 1 \ nl n e, i whlc1 ?' 111 effect > Pef sui would obtain a dollar credit of
million which she could use as backing for additional issues of currency.
T e proposal for foreign help has not, however, commended itself to the patriotic
Deputies who decided to produce a balanced budget by including as an item of
revenue the value of stocks of commodities held bv’the various Governmen
trading organisations at the beginning of the financial year.
26. Dr. Millspaugh is now inclined to take a more optimistic view of the
Government s financial situation. Revenue is coming in beyond his expectations
and he thinks he can get through the next few months without foreign aid He
is unwilling, so soon after surmounting the crisis of the Income Tax Bill to put
a second major controversial measure before the Majlis, and accordingly he
proposes to postpone for the present negotiations for the conclusion of the
stabilisation Fund Agreement.
27. Sales of gold on the open market on behalf of His Majesty’s Govern
ment continue. Gold is sold in the form of pahlavis and 5-tola bars. Demand
has been we 1 maintained at the present official selling price of 540 rials for the
pahlavi and 4.300 rials for the 5-tola bar. Since official sales of British
sovereigns have ceased, the bazaar price of these coins has sharply increased.