Page 22 - PERSIAN 8 1931_1940_Neat

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of affairs was for export certificates, which are transferable, to fetch at one time as
much as 30% of their face value, while imported articles and all exportable com­
modities greatly advanced in price, the market for the latter being artificially
stimulated owing to the desire of all and sundry to lay hold on something export­
able in order to bring in imports for which an ever-increasing price was to be ob­
tained.
Two points regarding the working of this amazing law during the period under
review arc sufficiently clear. In the first place, far from checking the Russian
tactics, it has given into their hands a tool which should go a long way to help
them in their policy of disturbing and disorganising the Persian market. While on
paper it may theoretically compel them to take as much Persian produce as they im­
port Russian, they can, by buying up export certificates and actual produce, control
the market far more accurately and completely than they ever could before, and in
whatever part of the country they may desire. The facility with which they can ex-
ercise this control is well brought out by their action at the inception of the Monopoly.
Of the first quarter’s quota they took up no less than 48%, including 63% of the
sugar and 64% of the cotton prints quotas, while as regards the first half of the
Economic year (June to December), when it was found that applications were not
coming forward, the lists were again reopened after August 12th for the benefit of
the Russians, who, by the 30th, had made applications covering 76% of the
total quotas allowed for this period including 68% of the cotton piece-goods quotas.
Applications which, it may be assumed, were not accompanied by actual export
certificates.
In the second place the law has accentuated a process, encouraged under the
exchange control law, which cannot continue indefinitely, namely, the export and
sale abroad of Persian produce at a loss in order to permit of imports on which the
importer could, thanks to the high level of prices of foreign articles obtaining,
count on making up his export loss and a handsome profit besides. By the autumn,
in the height of the exporting season, this process became most exaggerated. All
manner of produce was being shipped with little or no thought to its eventually
finding a market, but simply in order to obtain import permits for the entry of the
goods which would be sold to the Persian consumer at a price which would cover
any loss on the exports. Thus the country was being drained of real wealth in
the shape of produce dumped abroad, which dumping the population were financing
in the shape of high prices paid for all commodities internally.
The achievements of the Government in the realm of economics during the
year are quickly enumerated. More taxes, more and paralysing restrictions on
trade, and the surrender of an ever increasing control of the country’s commerce to
the Russians. The result has been an exaggeration of the tendencies to be ob­
served during the previous year. Still there appears to be no thought of checking
the pace either of expenditure or of the issue of new and bewildering legislation
regarding trade. Railway construction is still prosecuted—Warships are to be
bought—ambitious town planning schemes are pursued—the Anglo-Persian Oil
Company Royalties are still earmarked for a reformed currency whose introduction
is ever doubtful, but little or nothing is spent on roads or in other ways calculated
to foster trade.
In Bushire the trend of the previous year was continued and accentuated.
Prices of all commodities rose, money became tighter than ever, and more and
more merchants were obliged to fall out of foreign trade. The bazaar remained
dull throughout the year. In February it was rudely upset by the sudden addition,
without any warning, of 60% to the Customs Surtax, while at the end of March
trade was completely dislocated by the Trade Monopoly Law. Thereafter it lan­
guished until August when conditions improved somewhat as merchants began
to adjust themselves to the new state of affairs.
In the absence of the Customs figures it is difficult to give any very accurate
idea of the effect of the monopoly law on British trade. The general trend, how­
ever, is made sufficiently clear by the import figures of the British India Steam
Navigation Company whose ships carry by far the largest proportion of Bushire
exports and imports. Only 8,000 freight tons were imported during the year
compared with 16,000 in 1930. On the other hand nine Russian ships visited
the Gulf as against eight the previous year and Sharq’s control pf the market be­
came virtually complete. So much so that they were able to withhold credit