Office of the Historian

891.51/574: Telegram

The Minister in Iran (Dreyfus) to the Secretary of State

Tehran, July 19, 1943—9 a.m.
[Received 11; 50 a.m.]

741. Millspaugh has furnished following information in reply to Department’s 332, July 10th. Figures cover fiscal year 1322,1 ending March 20, 1944, are revised as of July 15 and are stated in millions of rials.

1.
Breakdown of estimated revenues.
(a)
Ordinary receipts 1881. This is broken down as follows: taxes 710, customs duties 408, oil royalties 439 and miscellaneous 324.
(b)
Sales of piece goods, rice, wheat, barley, tea, sugar and bread 3614.
(c)
Receipts from commercial enterprises including factories and monopolies, ceded properties and public domain exploitation 3023.
Total estimated revenues 8518.
2.
Breakdown of estimated expenditures.
(a)
Ordinary expenditures of Government Departments including War and Police 3225.
(b)
Expenditures for goods listed under (b) above 4293.
(c)
Commercial expenditures for items listed under (c) above 2310.
(d)
Repayment of short term and floating debt 157.
(e)
Amount necessary to grant urgently required increases in salaries of Government employees, without which Government can not hope to continue to function 100.
Total expenditures 10,485.
3.
Conditions of loan. Repayment of interest and principal should be deferred until 6 months after war, thereafter to be paid in 10 equal yearly installments to include principal and interest. Security to consist of oil royalties estimated at 4 million pounds a year. Lender may collect against entire security to extent of unpaid balance in event of default or inability to repay loan. Interest rate to be fixed by United States. (End Millspaugh statement.)

Millspaugh now estimates deficit for this year at 2,000,000 rials. He reiterates that unless foreign loan of substantially this amount is received financial collapse of Iranian Government is inevitable. He regrets necessity of again revising deficit upwards but this is due to unsatisfactory condition in which he found Government records, to increased costs due to inflation, to absolute necessity of granting salary increases, and to great extent to increased costs of wheat purchases due to higher prices and new method of buying.

Other information desired by Department concerning amount which can be borrowed from bank and statement of public debt will be forwarded in day or two.

Dreyfus
  1. According to the Moslem calendar.↩