Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎123v] (246/644)

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(10) A mend merits to Trade Monopoly Law.
423. In January the importation of motor vehicles was authorised against
purchase of only 20 per cent, of exporters’ dollar exchange (at 28-28 rials to the
dollar), and tyres and spare parts against 10 per cent., plus 6 per cent, interest
from the 22nd June, 1933. This measure represented a considerable alleviation
of the excessive burden placed upon the motor trade.
424. On the 27th February the Majlis approved a law reducing from 95 per
cent, to 85 per cent, the value for which import licences would be issued against
export certificates, the reason given being the continued adverse balance of trade
and the excessive fall in the price of export certificates. The decline in the price
of the latter continued, however, and reached the low level of 7-5 per cent, in
March.
425. In July a law was passed whereby the Government undertook to buy
all export certificates at a fixed price. The National Bank was subsequently
authorised to perform this function, and announced that it would buy the
certificates at a fixed price of 9 per cent, and would sell them to persons desiring
to obtain import licences at 13-5 per cent. The new measure, while increasing
the cost of import licences, put a stop to excessive speculation in export certificates
as we\\ as to the steady decline in their price.
426. The import quotas announced for the economic year 1933-34 showed
little change from the previous year, except that no quota was authorised for the
import of cotton piece-goods and cotton yarns. The institution of an import
monopoly for cotton piece-goods was later announced, details of which are given
in another section. No import quotas were sanctioned for sacks, sacking, rope,
&c., on the grounds of sufficient production within the country, nor of boot polish,
presumably for similar reasons. In the case of some imports, a specified amount
of exporters’ exchange had to be purchased at the official rates.
427. Signs were apparent of a change in the foreign trade policy of the
Persian Government. That the foreign trade monopoly law had not succeeded
in one of its main objectives, viz., the balancing of imports and exports by
increasing the latter, became increasingly apparent. The National Bank even
suggested, in its bulletin of March 1934, that import quotas might be abolished
altogether whilst retaining the necessity for import permits based on equivalent
exports. The weapon of the foreign trade monopoly law was, too useful to be
abandoned, but a change in the method of its application could be tried. Thus
a slump in the export of cocoons was met by awarding a monopoly of silk goods
imports to a group formed to sell cocoons on a monopoly basis. The rice crops
were disposed of to the Soviet Union against a Persian undertaking to buy
certain quantities of cotton goods and sugar. Barter or clearing arrangements
were discussed, and in some cases foreign firms undertaking important public
works on behalf of the Persian Government or Tehran Municipality were obliged
to give undertakings to export Persian produce. The cotton goods monopoly
was said to be framed with the object of encouraging Persian exports to certain
countries on a more or less barter system. An attempt, which appears to have
been abandoned later, was made towards the end of the year to revive the flagging
export of carpets by forming a carpet export monopoly and making the import
of motor cars—also to be monopolised—dependent on export of carpets to an
equivalent amount.
428. Thus while retaining the protection of the foreign trade monopoly law,
the Government attempted to secure its better working by forming specific import
monopolies with the object of artificially reviving certain specific drooping
exports, and for the same purpose encouraged the development of barter schemes.
The effect of all these restrictions built up on other restrictions was to make
ordinary import and export trade also impossible, and many merchants abandoned
the fruitless struggle. No signs of an impending change in the Government
policy were, however, evident at the end of the year.
(a) Cotton Piece-Goods. Monopolies.
429. In an attempt to improve the foreign trade balance it was decided
towards the end of the summer to form a monopoly for the importation of cotton