خارجي ٤١/٥٠٠١ "بلاد فارس - الشؤون الداخلية (إرساليات متنوعة)". [ظ‎‎١‎١‎٣] (٢٤٨/٢٢٦)

that he was not strong enough to do this. Meanwhile, the question was handled
by the police with an ineptitude and laxity typical of Persia. One of the principal
suspects, hrau Bernstein, a German, known to be the link between the Axis agents
in bars and those in i ehran, was, after her arrest, allowed to return to her house,
where she committed suicide. The house was still unguarded hours after her
death and her papers were not seized. Another woman, supposed to have been
arrested, was found making a complaint inside His Majesty’s Legation; and one^
German arrested was found to have been hidden for six months in the house of ar
Persian police officer. While they were under detention a number of those
arrested were known to be communicating with persons outside, and one prisoner
was inexplicably found by us to have acquired a sum of money and some playing
cards in the course of the night. It was all too obvious that, if serious action was
to be taken against the fifth column in Persia, the guarding and interrogation
must be done mainly by ourselves and that the prisoners must be confined some
where in the British zone and not in Tehran, where their friends and relatives
would be inconveniently near. We made it clear that, subject to this, we were
willing to make every conceivable concession to save the Persian face, but Qawam
es Saltaneh resolutely refused to hand over any Persians to us and stood out for
detention in Tehran itself. In this the Prime Minister was doubtless encouraged
probably by the fact that w T e received no help from the Soviet Embassy and none
from the American Legation until it was too late, when a very mild demarche in
our favour was made by Mr. Dreyfus. It is only now, after weeks of negotiation,
after the Persian Government have (fruitlessly) appealed to the Foreign Office
through the Persian Minister in London, and, finally, I must add, after a straight
warning that we shoiild judge the sincerity of the Persian Government in colla
boration with us by its attitude over this question, that a reasonable agreement
has at last been reached on this subject. I am reporting separately on"this and
wbll only record here for convenience and to make the story complete that the
agreement provides for the detention of all Persian suspects at Sultanabad,
where there are British troops, and for the association of Persian officials with the
British authorities in the supervision and interrogation of such suspects. In
actual fact, we should have real control in both respects. It is hoped that this
agreement will work smoothly, but the arrest and handing over of Persians is
bound to be unpopular and we must expect to encounter difficulties if we have to
present the Persian Government with further lists of Persian suspects.
Financial Situation.
5. Another question which has presented the greatest difficulties is the
purchase of rial currency with sterling and dollars. The currency is essential to
enable the British military authorities to pay the labour used on the roads and
on the numerous other works of military importance which we are undertaking
in this country. This question appeared to have been settled by the Financial
Agreement of the 26th May, 1942.
6. By the middle of August 1942, however, it had become evident that a
further increase in the Persian note-issue was inevitable to meet the growing
demand for currency. The note-issue had last been increased by an Act of the
31st March, 1942, which added 700 million rials to the previous authorised
maximum of 2,000 million rials, bringing the total of the legal issue tp
2,700 million rials.
7. Notwithstanding the provisions of the Financial Agreement of tlfa
26th May, 1942 (in which the Persian Government undertakes, inter alia, to
maintain an adequate supply of rials to meet the expenditure in Persia of
His Majesty’s Government), the Persian Government viewed with reluctance the
prospect of going to the Majlis with a Bill to add to the note circulation. Con
siderable pressure from His Majesty’s Legation was necessary before the
Government could be induced to take the necessary steps.
8. At the request of the Government I gave an estimate of 1,000 million rials
as the probable additional needs in local currency over the twelve months
beginning the 1st September, 1942. I pointed out that this estimate was
necessarily conjectural, that it was bound to be hedged about by provisos and
reservations, and that it must not be regarded as in any sense an indication to
the Persian Government of the maximum requirements of His Majesty’s
Government.
9. Meanwhile the new Prime Minister had set up an unofficial commission
to study and report on a long-term policy in relation to the note-issue of the
country, particularly with respect to the arrangements that might be made for