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    "localId": "486498778",
    "label": "Report, Central Intelligence Group, Iran, Situation Report 6",
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    "id": "486498778",
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    "contentType": "document",
    "title": "Report, Central Intelligence Group, Iran, Situation Report 6",
    "citationUrl": "https://catalog.archives.gov/id/486498778",
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        "President's Secretary's Files (Truman Administration)",
        "Intelligence Files"
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    "url": "https://catalog.archives.gov/id/486498778",
    "naId": 486498778,
    "levelOfDescription": "item",
    "productionDates": [
        {
            "day": 1,
            "logicalDate": "1947-08-01",
            "month": 8,
            "year": 1947
        }
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{
    "seq": 70,
    "pageIndex": 0,
    "type": "photo",
    "url": "https://s3.us-east-1.amazonaws.com/NARAprodstorage/lz/presidential-libraries/truman/hst-psf/602196/875497/875497-01-070.tif",
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    "ocrText": "SECRET\ne. Finance\nThe financial position of Iran is potentially good. It has ample\ncurrency coverage, a small external debt, and substantial guaranteed reve-\nnues which provide the government with considerable amounts of foreign ex-\nchange. Iran's most important financial institution, the National Bank of\nIran (Bank Melli), is an efficient and sound organization. Factors of\nweakness in Iranian economy are recurring unbalanced national budgets,\ntightness of dollar exchange, and the maladministration of government enter-\nprises and finances.\nIran nearly suffered financial collapse, during the recent war when\nthe hidden weakness of the financial structure came to light. Budgets had\nbeen balanced on paper only; the Ministry of Finance had been inefficiently\nsubdivided and compartmentalized; a complicated system of checks and con-\ntrols discouraged officials from assuming responsibility or taking positive\naction; no precise periodical statements of the financial balances of the\ncountry were available; and taxes were collected inefficiently and unfairly.\nAlthough a drastic reorganization was called for, little progress has been\nmade so far.\nThe impact of the war caused a rise in the cost-of-living index from\nthe 1936 level of 100 to 1085 in 1944. It fell to 726 in 1946, but has since\nrisen to 809. Staple food items were in short supply during the war because\nof poor crops and inadequate distribution. Moreover, large quantities were\nconsumed by foreign troops and substantial amounts withheld by hoarders and\nspeculators, while imported essential goods fell below minimum requirements.\nMost important in promoting the spiraling inflation was the necessity of\nfurnishing rials for Allied expenditures in Iran which increased the rials\nin circulation from 3 ₹ billion in 1942 to almost 73 billion in 1946.\nIn January 1943, the Iranian Government employed a US financial mis-\nsion, headed by A. C. Millspaugh, which was given broad powers to combat in-\nflation, reorganize the financial administration, establish an income tax\nwith graduated rates, and balance the budget. The work of the mission, how-\never, was complicated by major difficulties brought on by the war, by the\nfailure of successive cabinets and parliament to give needed support, and\nby disagreements with the government and dissension within the mission it-\nself. As a result the mission withdrew in February 1945.\nThe annual budget contains two general classifications: the ordinary\nand the commercial-industrial which are approximately equal in size. The\nlatest budgetary figures available are for 1943-44; they show the total in-\ncome of the government to have been $204 million and expenditures $2481 mil-\nlion. The ordinary revenues of the country derived about 22% from the to-\nbacco monopoly; 12% from AIOC royalties; 8% from income taxes; 8% from the\nopium monopoly (now abolished); 6% from indirect taxes; 7% from customs du-\nties; 3% from the sugar and tea monopoly; and the rest from smaller items.\nThe major expenditures from the ordinary revenue were 25% for the Ministry\nII-7\nSECRE"
}