Arthur Millspaugh

Arthur Millspaugh

Arthur Chester Millspaugh (born March 1, 1883 in Augusta , Michigan , † September 24, 1955 in Kalamazoo , Michigan) was an American political scientist and advisor to the Foreign Trade Department of the US State Department . He entered the service of the ministry to reorganize Iran's public finances in two foreign assignments, one from 1923 to 1927 and then from 1942 to 1945 .

Life

Arthur Millspaugh attended Albion College and studied at the University of Illinois and Johns Hopkins University . After working as a professor of political science for two years, he switched to the services of the Foreign Ministry and three years later became a member of the Foreign Trade Department.

At the request of the Iranian government, which urgently needed an experienced tax expert, Millspaugh was entrusted with this assignment. He and his colleagues reached Tehran in November 1922 . There he found only empty coffers and a finance ministry that was in liquidation. With the help of the Iranian government and the military, he managed to restructure the Iranian financial system in a short time. A budget was drawn up, taxes were systematically collected again and tax evasion restricted.

The only taxes levied in Iran prior to Millspaugh's arrival were on agricultural producers, that is, farmers and sheep breeders. Shopkeepers and artisans paid a lump sum that was collected by their chambers and guilds and passed on to the government. In addition, the state received little income from leases with nomads for the use of state property. Based on the Western model, Millspaugh introduced a previously unknown system of taxes and duties in Iran, which, like property tax, property transfer tax and inheritance tax, initially related to property ownership. In addition, fees and charges were charged for the issuance of official documents and government certificates. Tax exemptions, some of which originated from the time of Naser al-Din Shah , and mainly affected the nobility and large landowners, were lifted. Wealthy sheikhs, governors and leaders of nomandic tribes who had never paid taxes to Tehran were publicly identified and persecuted as tax evaders. Millspaugh not only introduced taxes, he also enforced their collection by training reliable tax officials who continued to operate Millspaugh's reformed tax and duty system even after he left his job.

With Millspaugh's support, Iran succeeded for the first time in ending its economy's reliance on foreign credit. As early as the beginning of the 20th century, Iranian politicians sought to free themselves from the dominance of British and Russian influence with the help of the USA and to develop Iran into an economically successful country. However, until the beginning of the Cold War, Millspaugh did not succeed in influencing the policy of the US State Department materially in favor of Iran.

As the head of the Iranian financial administration, Millspaugh was able to achieve a balanced budget and to increase the political influence of the USA on the Iranian government. His greatest achievement, however, was to have systematically reduced the Iranian budget deficits and thereby increased the Iranian government's financial room for maneuver. Millspaugh also managed to push through a number of reforms. Among other things, he was involved in the passing of a new tax law, which, although a considerable burden on the poorer classes , ensured the financing of the Trans-Iranian Railway , one of the largest industrial projects in the country, which began in 1927 under Reza Shah .

The generally successful work of Millspaugh was partially undone by internal political rivalries and a widespread system of patronage and bribery of leading Iranian politicians. After four years in Tehran, he returned to the USA in 1927. Millspaugh saw himself succeeding Morgan Shuster , who, at the invitation of the Iranian parliament, had attempted in 1907 to build a modern Iranian financial system based on the western model. Millspaugh published a report on his experiences in Tehran under the title The American Task in Persia . In his book, Millspaugh describes the economic problems of Iran by taking a critical look at the Iranian bureaucracy against the background of unlimited sympathy for the country and its people. Millspaugh's book, which has received extensive acclaim in both foreign policy journals and Time magazine, had a significant influence on the discussion of US foreign policy towards Iran.

In 1927 Reza Schah terminated his collaboration with Millspaugh and asked Germany for a suitable financial advisor. On February 16, 1928, Parliament passed a law on the employment of additional financial advisors. Otto Schniewind was appointed to succeed Millspaugh and advised the Iranian government on the establishment of the National Bank as well as on the issue of bonds and the award of concessions.

After the outbreak of World War II , the recall of all German advisors from Iran and the invasion of British and Soviet troops as part of the Anglo-Soviet invasion of Iran , Arthur Millspaugh returned to Tehran in January 1943 as a financial advisor. His most important financial project was the reform of the income tax . Since the members of parliament were for the most part wealthy landowners who did not want to accept any financial disadvantages from an income tax reform, Millspaugh failed and submitted his resignation in 1945. One of Millspaugh's harshest economic policy critics was Abol Hassan Ebtehaj , the governor of Bank Melli . Ebtehaj, who had initially welcomed Millspaugh's mission, fell out with Millspaugh because he questioned the independence of Bank Melli, which at the time was both the commercial bank and the central bank of Iran. Ebtehaj advocated the thesis that a central bank must act largely independently of political influences, while Millspaugh emphasized the primacy of politics. In the end, Ebtehaj won and Millspaugh had to leave Iran early. After Millspaugh left Iran, he published another field report after the end of the war in 1946 with the title Americans in Persia . In his second book, the judgment of Iran was far more pessimistic and critical than it was in his first book. In the language of a doctor, Millspaugh, based on his experience, describes the symptoms of a sick land that seems incapable of governing itself. On page 243 of his book, Millspaugh writes:

“Persia cannot be left to fend for itself, even if, politically speaking, Russia leaves its hands off Persia. ... Persia has not yet understood how to prove beyond doubt its ability to govern itself. "

In order to “solve the Persian question”, Millspaugh proposed a treaty between the USA, the Soviet Union and Iran, in which both the national and international problems that Millspaugh believed were connected with Iran should be regulated. Millspaugh suggested that the treaty should stipulate that the Soviet Union should refrain from supporting either the establishment of an autonomous Azerbaijani state or a Kurdish state, that oil production in Iran should be carried out by international companies with the greatest possible participation of Iran, and that the existing Anglo-Iranian Oil Company (AIOC) concession and the Soviet fishing concession in the Caspian Sea should be exercised by international companies rather than by British and Soviet monopolies. In return, the Soviet Union should be allowed free transit of goods to the Persian Gulf and its own free port on the Persian Gulf. In order to promote the internal development of Iran, Millspaugh proposed an extensive development program that would lead to a stable nation-state, ensure law and order, establish effective administration without corruption, put public finances in order, increase the income of the population, urgent state Provide health, education and welfare services and develop democratic government. After the break between the US and the Soviet Union and the beginning of the Cold War, such a treaty had become an illusion. However, as part of the Point IV program, the USA signed an agreement with Iran, with which Millspaugh's proposed development program for Iran was at least partially implemented.

plant

• The American task in Persia, New York, Arno Press, 1925.
• Americans in Persia, Washington, DC, The Brookings Institution, 1946.
• Crime control by the national government, Washington, DC, The Brookings Institution, 1937.
• Democracy, efficiency, stability; an appraisal of American government, Washington, DC, The Brookings Institution, 1942.
• Haiti under American control, 1915–1930, Boston, Mass., World peace foundation. 1931.
• Local democracy and crime control, Washington, DC, The Brookings Institution, 1936.
• Party organization and machinery in Michigan since 1890, Baltimore, The Johns Hopkins Press, 1917.
• Peace plans and American choices; the pros and cons of world order, Washington, DC, The Brookings institution, 1942.
• Public welfare organization, The Brookings institution, 1935.
• Toward efficient democracy; the question of governmental organization, Washington, DC, Brookings Institution, 1949.

literature

• M. Bonakdarian: US-Iranian Relations: 1911-1951.
• S. Jalaledin Madani: The Contemporary Political History of Iran.
• Alireza Avsati: Iran in the last 3 centuries. Vol. 2. pp. 661-664. ISBN 964-93406-6-1 .
• The Encyclopedia Americana: The International Reference Work. : Volume 19. Americana Corporation of Canada, Montreal, 1962, p. 129.

Web links

• Arthur Millspaugh in the database of Find a Grave (English)
• Arthur Millspaugh on the Prabook.org website

Individual evidence

1. ^ Cyrus Ghani: Iran and the Rise of Reza Shah. IBTauris 2000. pp. 275f.
2. ^ Rouhollah Ramazani: The Foreign Policy of Iran 1500-1941. University Press of Virginia, 1966, p. 286.
3. ^ Kristen Blake: The US-Soviet confrontation in Iran, 1945-1962. University Press of America, 2009, p. 17.
4. ^ Frances Bostock, Geoffrey Jones: Planning and Power in Iran. Frank Cass, 1989, pp. 44f.
5. ↑ Arthur C. Millspaugh: Americans in Persia. Washington, 1946, pp. 245f.