Coll 28/39(2) ‘Persia. Printed Correspondence, 1937–’ [‎138v] (276/320)

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Enclosure to Serial No. (7).
Copy of Telegram from H. M. Minister, Tehran, to Baghdad, No. 10 (XXX)j
dated the 10th February, 1940. (Repeated to “ Misc. ” Cairo No. 1 Saving.
Copy to Foreign Office P. L. No. 49.
Iraqi Charg'6 d’Affaires lias been asked by Minister for Foreign Affairs
to inform his Government that according to information received from Iranian
consuls at Kirkuk and elsewhere in Iraq there is a movement in Iraqi Kurdistan
in favour of independence which might affect Iran. Charge d’Affaires replied
that according to his information eight or nine Russians had been in Iranian
Kurdistan trying to stir up trouble,
2. Charge d’Affaires says that while Iranian Government doubtless realise
that there is more danger to be expected from the north than from the south
Minister for Foreign Affairs alluded as he had done once before to Kurdistan
shooting trip of H. M. Ambassador at Baghdad as a suspicious circumstance.
This absurd suspicion which Charge d’Affaires has tried to dissipate may have
been sown by silly reports from Iranian consuls.
( 8 )
From British Legation, Tehran, No. 29, dated the 11th March 1940.
Tehran desp. No. 73-E. of 10th March 1940 to F. O.
From British Legation, Tehran, to F. O., No. 73-E., dated the 10th March
1940.
I have the honour to report that on the 3rd March, 1940, the Minister of
1 mance, before submitting the budget estimates for the year 1940-41 to the
Mejhs, deposited a draft law authorising the National Bank of Iran to increase
the note circulation.
2. The draft law comprising a Single article, reads as follows
Ihe National Bank of Iran is hereby authorised to increase the note
circulation up to an amount of rials 1,500,000,000 if necessary. The
deficiency m metal cover, up to a proportion of 60 per cent., will be
covered by the Crown Jewels, transferred to the National Bank of
Iran m accordance with the law of the 25th Aban, 1316 (17th Novem
ber, 1937) until such date as these are sold for gold ”.
S. The present authorised limit is 1,176,163,600, but I learn from a reliable
source that the note issue to date had not exceeded 1,080,000,000.
4. For some months past the National Bank of Iran have been drastically
restricting their commercial credits to the Bazaar, to such an extent in fact, that
■ y f , as . s merchants have been forced to borrow at 24 per cent, per annum and
even higher There would seem to he little doubt that the object of this policy
is to try to keep the note circulation within limits.
5. As there is no market in Iran for the Government to borrow in, and as the
Gou e h«3^ nt b t en /?i endlng in excess of revenue, increase in note circula
tion had inevitably to follow.
tothelWcfr tf W - W?S " nan ™? usI J r approved by the Mejlis and was passed
to me t inance Commission tor study and report.
out •Im™!wJ fl l3 Ia - C ! 1 th i e Commission’s report approving the draft law, with-
out amendment, was introduced to the Mejlis.
Fyi/ft A A 0 £ y . of ^ ,lls despatch is being sent to the Government of India in the
External Affairs Department and to the Department of Overseas Trade.