Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎313r] (627/644)

15
United States Air Transport Command, and Pan-American Airways ran a trial
flight through Tehran in connexion with their proposed route through Turkey
to India and beyond just after the year’s end. The Persian Government seem
anxious to encourage foreign airlines rather than otherwise.
The End of Dr. MiUspaugh and His Mission
66. It was stated in the Annual Political Review of 1944 that there was
a renewed agitation to deprive Dr. Millspaugh of his economic powers, i.e., his
functions of purchase, distribution, price control and sale of certain food-stuffs
and other goods, as distinguished from his financial powers proper. On the
8th January the Majlis passed a Bill depriving him of them. Dr. Millspaugh
thereupon resigned and left Persia on the 28th February, justifiably disgusted
at his treatment by the Persian Government and its ingratitude for the con
siderable services he had rendered. (For an appreciation of his qualities and
defects see the Review for 1944.) At first a number of his American staff stayed
on. The Persian Government, however, whittled down their numbers and their
powers until in October the American Ambassador informed the Persian Govern
ment that they were not in a position to do any good and that as this was injurious
to the prestige of the United States, the State Department wished the American
Finance and Economic Mission withdrawn from the 21st November. It was,
however, lef to individual members of the mission to exercise their own judgment
whether they should make individual contracts with the Persian Government.
At the end of the year five men remained.
67. The failure of the Millspaugh Mission, due largely to Persian corruption
and intrigue but also, unfortunately, to his excessively rigid and professorial
attitude, is a tragedy both for Persia and for British interests which are to see
an independent and well-ruled Persia. There is now nothing to save the country
from its chronic maladministration, and this will render it perpetually liable to
upheavals and Soviet intervention.
Finance.
68. Owing to the absence of the necessary majority, the Government was
unable to secure sufficient votes to pass the annual budget for the financial year
1945-46, with the result that the Administration had to continue a hand-to-
mouth existence. Credits were voted on the basis of votes covering one-twelfth or
two-twelfths of the estimates and this proved to be most unsatisfactory because,
apart from the fact that the votes were almost invariably well in arrear of the
period they covered, it was impossible for individual departments to make provision
for any capital expenditure. On the whole, revenues came in on the scale forecast
in the estimates, the principal source of revenue being the monopolies and
import duties. The loss of revenue from Azerbaijan, one of the few provinces
which really pays its way from the fiscal point of view, is bound to increase the
Government’s difficulties. ...
69. A praiseworthy effort to introduce a little long-term planning m the
financial administration was made by the Ministry of Finance in the Hakimi
Cabinet. A Bill was introduced allocating Government expenditure on a
percentage basis, each department being allocated a predetermined percentage of
the estimated revenue. It is interesting to observe that whilst army, gendarmerie
the police allocations were reduced from 39 per cent, of the 1945-46 budget to
30 per cent, of the 1946-47 budget, there was a marked increase in the allocation
for social services. The vote for education was increased from 9-5 per cent, to
14 per cent., and that for the Ministry of Health and its associated organisations
was increased from 3-5 per cent, to 10 per cent. The Bill had not been voted
by the end of the year.
70. It is also interesting to observe that in the Bill all Government liabilities
were to be consolidated and funded in a single account with the Bank Melli, and
that these liabilities were to be liquidated within a period of fifteen years from the
oil royalties derived from the A.I.O.C.
71 The rate of exchange (rials 128 = £1) continued to be that stipulated
under the Anglo-Persian Financial Agreement, due to come to an end on the
2nd March, 1946. . ......
72. The Imperial Bank of Iran’s concession as an authorised bank was
renewed on the 17th October, 1945, by agreement with the Persian Ministry of
Finance. The concession is valid for six months and is thereafter subject to six
months’ notice of denunciation.