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successful, since importers could not afford to lock up capital for indefinite
periods in this way and immediately resold, at the free and much lower rate,
the exchange acquired, thus creating an excessive supply of foreign exchange
on the market and further depressing the rates. The motor industry was
unfairly handicapped, to the detriment of the much-needed development of
motor transport in the country, imports were further curtailed, and, at the end
of the year, the unwelcome fund of exporters’ exchange held by the banks on
Government account was only slightly diminished. Some anxiety was felt by
the Imperial Bank of Persia, which, together with the National Bank, was still
in possession of a considerable amount of this exchange at the end of the year,
but an explicit guarantee against loss on this account was given by the
Government. The latter are still faced with the predicament of either themselves
bearing the loss or of finding other devices to pass it on to the trading community
and eventually to the consumer. There was some improvement in the rates of
exchange towards the end of the year, due largely to the considerably increased
import quotas, but the rate on the 31st December was only 82-| rials to the £, as
compared with over 100 until April.
National Bank.
504. A new ££ conseil d’administration ” was formed at the National Bank
in March, consisting of Mirza Hussein Khan Ala, C.M.G., Mirza Muhammad
Ali Khan Farzin and Herr Walter Horschitz-Horst, the new German manager
appointed by the Persian Government to replace Dr. Lindenblatt.
505. The annual report of the bank, together with the balance sheets for the
two years 1310 and 1311 (the 21st March, 1931, to the 20th March, 1933), was
submitted to the general meeting held on the 22nd October, 1933. The last balance
sheet published was for the year 1309 (ending the 20th March, 1931). The report
mentioned the fact that the balance sheet for 1310 is a corrected ope, the “ Conseil
de Surveillance ” having felt misgivings as to the accuracy of the balance sheet
submitted in Khordad 1311 (May-June 1932), under the direction of
Dr. Lindenblatt. As a result of the irregularities committed by the latter, the
working of the year 1310 showed a loss of 8,737,456-65 rials. This loss was
passed to the debit of the Government in virtue of article 25 of the statutes of the
bank, in a special account. According to a new article 26, approved at the general
meeting held on the 15th October, 1933, this special account has to be liquidated
by crediting it with 80 per cent, of future net profits. The gross profits for 1311,
ending the 20th March, 1933, were shown as 5,898,367-90 rials, with net profit,
after allowing for various reserves and writings off, of 2,392,849-75 rials. Of
this amount, 1,914,279-85 rials was credited to the special Government account,
239,284 -95 rials placed to reserve and 239,264,-95 rials carried forward.
A gricultural Bank.
506. The agricultural section of the National Bank of Persia was made a
separate establishment in May, to work in future independently with its own
capital. The Minister of Finance proposed in Parliament on the 1st June that
the capital in shares should be fixed at 20 million rials (about £245,000 at the rate
of exchange then ruling). A Government measure providing for an extension of
the functions of this bank is referred to below in the section dealing with
££ Agriculture.”
Road Tax.
507. The Road Tax Law passed by the Majlis on the 30th August, 1932,
remained in force, with a few modifications published in the monthly customs’
bulletins.
508. The possibility of entering a formal protest against this tax as an
infringement of the spirit of the exchange of notes attached to the Tariff
Autonomy Treaty was again the subject of an exchange of views with the Foreign
Office. After legal opinion had been obtained and the Board of Trade consulted,
it was decided not to take immediate action.
509. Although dissatisfaction was natural and general, no serious
complaints of discrimination were reported. The additional burden was