Page 21 - PERSIAN 8 1931_1940_Neat

9

import what lie lilted—quite the opposite of the original intentions of the Govern­
ment. 1 he latter, however, was in no way deterred by its unfavourable experience
in the matter of exchange control and in February, shortly after the raising of the
krnn sterling rate to 90 ( a measure taken too late in the day to have any practical
effect), decided to make all foreign trado a state monopoly and control all imports
and exports directly.
The reasons given for this drastic step were, firstly, the need for balancing
the country’s foreign trade before introducing the gold standard, and secondly,
the desire to check Russian dumping and their ever increasing hold on the Persian
market. The general outline of the trade monopoly law of February 25th which was
ratified by the Majlis on March 11th, 1931 was as follows:—
Imports divided into two categories (A) those which may be imported by
private traders and in regard to which quotas are to be fixed each
year before June 22nd and apportioned out between the various
customs ports and, (B) imports prohibited by the Government alto­
gether.
Imports can only be made under licence issued by the Ministry of national
Economy, application for permission to import goods to any given
amount requiring to be accompanied by a Customs export certificate
testifying to the export of an equivalent amount of Persian produce.
Exporters have to guarantee to sell to the Government within a period not
exceeding eight months the foreign exchange proceeds of their exports, but if they
import goods under class (A) above, their value will be deducted from the total
amount of their obligation to sell exchange. For certain exports, however, which
constitute a monopoly such as opium, the exporter can only import up to 20%
of the value of his exports and has to sell to the Government foreign exchange in
respect of .the remaining 80%, while the export of oil carries with it no corresponding
right to import.
Import licences are not transferable but export certificates can be disposed of.
The actual import quotas for the first year (i.e., 22nd June 1931 to 22nd June 1932)
are based on the Customs figures for the two years ending March 1929.
At its inception the Trade Monopoly Law was hailed almost universally with
satisfaction as it was assumed to be primarily directed against Russian dumping.
This enthusiasm was short-lived, however, when the details of the scheme became
known and the practical difficulties arising out of its applications made themselves
felt. Its immediate effect was to bring trade to a standstill.
The quota for the first quarter after the introduction of the Law, i.e., from
March 22nd to June 22nd, and preceding the economic year proper was, it is true,
almost entirely taken up, but almost exclusively by applications for the import of
goods already in the Customs or expected to arrive. Moreover, since for this first
quarter applications for permission to impoit required to be accompanied only by
a guarantee to export and not an actual export certificate, there is little doubt
that many speculators without goods either in the Customs or ordered, must have
applied for permission to import, while the Russians, who had large stocks in the
Customs at the commencement of the year, filled a very large part of the quota
themselves.
The absurdity of the scheme in its original unmodified form is well illustrated
by the fact that the Persian Government required all applications for the first half
of the economic year (June to December) to be in by June 11th, and these applica­
tions, it is to be borne in mind, had to be accompanied by actual export certi­
ficates. In other words sufficient exports were expected to go out of the country
between March and June to balance the imports for the next six months 1 And
this at a period when export is usually at its dullest 1 In point of fact by June
12th only 62 applications in respect of the first quarter of the economic year and
representing only 25% of the quota for that period had been received and a decree
was accordingly published extending the date for receipt of applications to August
12th. This did not help matters much since exports from March to June totalled
approximately *76 millions sterling only, while the quotas to be filled by August
(against exports already shipped) in respect of the period March to December 1931,
amounted to something like six million pounds. The natural result of this state
MC392FD »