811.7490F/4–2045

Memorandum by the Director of the Office of Near Eastern and African Affairs (Henderson)5

Two telegrams have been drafted for despatch—one to London and one to Jidda—requesting in forcible terms that the British Government not oppose directly or indirectly the establishment of direct radio circuits between the United States and independent countries of the Near and Middle East, and inviting a British statement to that effect.

The United States Government approves the establishment of direct radio communications between the United States and every other country, and opposes radio communications monopolies in principle.

The Department has received evidence of British opposition to direct radio circuits between the United States and Iran and between the United States and Iraq.6 The Cable and Wireless, Ltd. (and the Eastern Telegraph Company, Ltd.7) have a conceded monopoly over the foreign telecommunications of Saudi Arabia except to neighboring countries. The unsatisfactory service afforded by the Eastern Telegraph Company and its obstructive attitude have caused needless inconvenience to American interests in Saudi Arabia engaged in war projects. With the prospective establishment of an American military air base at Dhahran, the completion of the refinery at Ras Tanura and the prospective establishment of an American controlled shipping company in Saudi Arabia, the obstructive tactics of the Eastern Telegraph Company will be even more troublesome, and may become almost intolerable.

The Arabian American Oil Company has had to resort to the device of mounting a radio transmitter on a tugboat whence company radio messages are sent from a point in the Persian Gulf outside the three-mile limit directly to New York. The United States Coast Guard has assisted by supplying codes and by deciphering messages in New York.

The monopoly of the Eastern Telegraph Company, Ltd. renews itself by periods of five years. The British Government has made it plain both to the United States and Saudi Government that it opposes any modification of the monopoly, and while urging the Saudi Government to maintain the present agreement unchanged, British [Page 1017] officials have asked that their opposition be kept from the knowledge of the American Legation at Jidda and from the American Company most concerned.

The British Government has raised a number of untenable objections, basing its opposition variously on wartime censorship needs, on the alleged adequacy of existing facilities at Bahrein, on the imputed inability of the Saudi Government to operate a radio station, on the pretended superiority of Bahrein over Dhahran as a site for a radio station, on the alleged readiness of the Eastern Telegraph Company, Ltd. to establish a service via Bahrein and possibly via London, and on the disinclination of the British Government to take “a step which would injure an important British interest”.

It has become increasingly clear that forcible representations will be required to remove the opposition of the British Government, and until such opposition is removed, there is no certainty that the Saudi Government will take the action necessary to modify the monopoly. Probably the Saudi Government would do so if the United States Government were in a position to assure financial support to Saudi Arabia for a period of years, but such assurance cannot be given yet.8

Meanwhile, the monopoly agreement will on June 1, 1945 renew itself until December 1, 1949, unless the Saudi Government proposes specific modification. On November 21, 1944, the Saudi Government, after strong representations from the Legation in Jidda, gave notice of intention to propose modifications, but made it clear that the United States and British Governments must agree on the modifications before the Saudi Government would take further action.

It is of great importance that direct radio communications be established with countries of the Near and Middle East, and the case of Saudi Arabia is very likely to be a test case; hence, the necessity for obtaining British withdrawal of its opposition to the direct United States to Saudi Arabia circuit.

It may be of interest to know that in November last, when it was doubtful that Saudi Arabia would give notice of intention in the face of British opposition, and when the deadline (December 1) for such notice was approaching, the late President authorized a telegram directly to Mr. Churchill urging withdrawal of British opposition. The telegram was never sent because notice was given before the message could be despatched.

Loy W. Henderson
  1. Addressed to William Phillips, Special Assistant to the Secretary of State, and the Assistant Secretary of State for Economic Affairs (Clayton).
  2. In telegram 138, April 3, 1945, the Minister in Iraq reported that the Iraqi Government was not “at present” interested in the establishment of a direct radio circuit between the United States and Iraq (811.7490G/4–345).
  3. Subsidiary of Cable and Wireless, Ltd.
  4. For documentation on financial assistance by the United States to Saudi Arabia, see pp. 845 ff.