Ext 5001/41 'PERSIA – INTERNAL (Miscellaneous despatches).' [‎91v] (182/248)

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immediate wholesale hoarding. It was possible that it would be better to leave
the wheat producers to collect and sell their grain themselves. He believed that
a compromise between the two might be the best solution. I referred to the need
for increasing taxation in order to balance the budget and to reduce inflation.
The Shah said that Dr. Millspaugh was considering a scheme of taxation intended
to limit incomes to a maximum figure. This was all to the good, but he doubted
whether any Government would be able to collect the money. He referred to the
increase of rials in circulation, and begged that steps might be taken to enable
the Persian Government to bring to Persia the large stock of gold which had
accumulated in South Africa.
(3) Relations with Russia.
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The Shah was obviously extremely exercised over the increasing Russian
influence in Persia, and, in particular, of the threat of communism. He referred
to the Russian gift of 25.000 tons of wheat, which he said was a Bolshevik and
not a Russian gesture. In the same way. the conduct of the Russian troops here
he described as a means of propaganda on behalf of communism. He gave the
I example of two Russian officers who two nights before had rescued two Persian
girls from four drunken Americans. He also referred to the shooting of four men
and two women by British Indian troops this morning. I undertook to look into
this matter, which from his account seemed to be serious. He said that pe?' contra
the British were becoming increasingly unpopular. There was a tendency to
blame the British for everything. Accusations were made against the U.K.C.C.
drivers and unknown Jews in Tehran and elsewhere who bought up produce and
goods (for resale at higher prices) in the name of the British authorities. It
would be much better if the British authorities should ask the Persian Govern
ment to do all their buying for them. Then they would not be accused of starving
the country by buying up all local produce. I said that this w T as a point which
had arisen elsewhere in the Middle East, and that I would look into the possibility
of establishing a buying authority.
The Shah said that the trouble with Brutish assistance had always been that
it came too late. It was far better to give a little help before a disaster took place
than a great deal afterwards. He referred to the lack of any real public opinion
in Persia. Thus power tended to be concentrated in the press, and the newspaper
reading public believed all the lies appearing in the press. I mentioned that I
had spoken very frankly with the representatives of the press last night. The
Shah had evidently already heard of this.
(4) Anglo-Persian Relations.
The Shah said that he wished to discuss the future of Anglo-Persian
.relations. He was most anxious that this should be settled now and that we should
not wait until the end of the war. Otherwise he feared that by the time the Peace
Conference came Persia would have become too weak to withstand outside
aggression, even though he was perfectly aware that the British Government
wanted to see a strong and independent Persia. He himself had greatly regretted
the Allied policy which had led up to the events of August 1941. He denied that
there was any truth in the assertion that the Persian Government at that time
had been pro-German. They had proved this during the Ali Rashid revolt—a
• period of great British weakness—when Persia -had not moved. No attempt had
been made to blow up oil installations at Abadan or Kermanshah. On the contrary,
half the Persian forces and a number of their limited stock of anti-aircraft guns
had been moved down to protect the oil-fields. No attempt either had been made
I at aggression against Russia, a fact proved by the withdrawal of Persian troops
* I into the interior. Against this, all that Persia had received was the joint Anglo-
^ Russian note, couched in rather vague terms, asking for the removal of the
German fifth column. If Britain at that time had offered to make a firm alliance
with Persia—even a military alliance—it would have been accepted by the
Persian Government. With such an agreement, concluded under honourable
conditions, Persia would have formed a useful bulwark behind Turkey, which
at that time was very shaky. He had no doubt that the Government then could
have enforced such a policy in the country.
However, no such agreement was mooted. When he came to the throne he
realised at once that a strong alliance with Britain was essential for the future
of Persia. He had been very much in favour of the Tripartite Alliance being a
genuine military alliance which, even if it had cost Persian lives, would have
cemented the country both internally and externally. Owing to the Persian