Foreign Relations of the United States: Diplomatic Papers, 1945, The Near East and Africa, Volume VIII

890F.51/2–1245: Telegram

The Acting Secretary of State to the Minister in Saudi Arabia (Eddy)

Washington, February 22, 1945—7 p.m.

50. ReDepts 24, January 27, 7 p.m. In further discussions with British on February 9 proposal to continue modified joint supply program was modified and British authorities here have again referred to London for instructions.

Proposal in its present form contemplates assurance to King Ibn Saud that arrangements are being made for prompt delivery of supplies in substantially half the quantities (not necessarily half the values nor for any definite number of months) specified in joint note to the King dated August 1, 1944 as supplemented by subsequent agreement (reDepts 177, September 12³⁴) and for continuation of monthly credits of £10,000 for diplomatic missions. King Ibn Saud would be informed at same time that this aid is intended to cover interim period to allow new plans for assistance to be worked out, also that before next July 1 he will be apprized of what further assistance can be given him in 1945. It should be noted that proposal does not now provide that 1944 level of joint supply program will be maintained in 1945 or hi any period thereof, though such intention might be inferred. Neither does it prevent either American or British Government from extending appropriate aid outside joint program in 1945 as both did in 1944.

It is not clear to the Department what considerations make it desirable as recommended reurtel 61, February 12, 8 a.m. to decrease the 1945 joint supply program to offset possible increases in 1945 revenues, rather than to take such items of income into account as 1945 general budgetary receipts.³⁵

The Treasury has indicated that it will wish to give thoroughgoing consideration to impending Saudi requests for lend lease silver, and action on such requests in the past has been slow. It therefore behooves the Saudi Government to make a preliminary request at an early moment for such silver as it will require in 1945 for dollar-riyal conversion and any other currency purposes.

Even though the British Minister has not yet been authorized to discuss Saudi supply, currency and budgetary needs in 1945, there seems to be no reason why fullest details should not be obtained now.

You should therefore bring to the attention of the appropriate Saudi authorities the need for prompt submission of any contemplated request for silver, without, however, suggesting any quantity. On February 6, Aramco wired Ohliger³⁶ to inform Saudi Government that oil company will require 15 million riyals. The Department will endeavor to secure prompt consideration here.

You should keep the British Minister fully informed of your action. His cooperation would be welcome but is not essential since the British Government is unlikely to supply silver to Saudi Arabia. If impracticable in Jidda, coordination with the British can be achieved here by joint discussions before action is decided upon.

Grew

34. Foreign Relations, 1944, vol. v, p. 739.
35. In telegram 96, March 8, 1945, 3 p.m., the Minister in Saudi Arabia stated that the decrease referred to was in the total cost of the financial subsidy, not in commodity supplies (890F.51/3–845).
36. Floyd Ohliger, manager in Saudi Arabia of the Arabian American Oil Company.