121.5767/4: Telegram
The Minister in Iran (Dreyfus) to the Secretary of State
[Received August 24—2:31 p.m.]
875. Department’s 380, July 29. For Morgenthau Treasury from Gunter.
[Page 595]- (1)
- The following statement of financial position of Iranian
Government was obtained from Millspaugh:
Expenditures (names and figures in millions of rials): expenditures for 1321 paid 1322—220; estimated ordinary expenditures budget 1322—3417; salary increases 500; Lease-Lend obligations, tentative 250; outstanding claims against the government 100; total 4487.
Sources of funds: cash balance beginning of 1322—789; receipts for 1321 collected 1322—182; estimated ordinary receipts budget 1322—1890; advances by Bank Melli (80 still available) 500; refinancing of Bank Melli debt (offset to budgeted expenditures) 100; borrowing from railway administration 300; aircraft factory rental from British 4; earnings of Bank Melli available to Iranian Government 47; total 3812.
- (2)
- Above figures are exclusive of commercial operations of the Government. Commercial [expenditures?] are budgeted at 5896 million rials. Thus it is estimated that Government must raise 776 million rials from sources not currently available.
- (3)
- It should be emphasized that many items are very tentative. The most uncertain is the net result of commercial operations. Under favorable conditions of supply and transportation it is estimated that a maximum surplus of 323 millions rials might be realized. Under unfavorable circumstances however a maximum deficit of 619 million rials might be realized. Budget figures supposedly represent the most probable result.
- (4)
- The funds the Government expects to borrow from the Railway Administration are dependent on the British and Russians bringing their accounts up to date. The British here are committed in principle to keeping their account current. If this is done, the fuel [full?] 300,000,000 rials will be available. If in addition, the Russians keep their account current, approximately another 100,000,000 rials could be borrowed. It is necessary to borrow from the Railway Administration because it operates largely independently of the regular Government Administration. Its budget however is subject to approval of the Council of Ministers.
- (5)
- It should be emphasized that the outcome of the financial operations of the Government is still very uncertain. There seems to be little doubt that $30,000,000 will enable the Government to undertake the necessary financing, and it is quite probable that it will be unnecessary to utilize the full amount as the budget for 1322 has not yet been approved by the Medjliss but passage is expected in the near future. Bills providing for the floating of an internal loan and for an upward revision in income tax rates are still pending, but in no event are they expected to yield income before 1323. Copies of the 1322 budget are being forwarded. [Gunter.]