811.7490F/4–2045: Telegram
The Acting Secretary of State to the Minister in Saudi Arabia (Eddy)
127. ReLegs 180, April 20, 11 a.m. While the contract is not entirely clear on the point, it appears that failure of the Saudi Government to propose specific modification of its contract with the Eastern Telegraph Company before June 1 would prejudice its right to demand consideration of such proposals if presented later. If, however, the modification is proposed before June 1, there appears to be no time limit within which agreement must be reached.
You should therefore approach the Deputy Minister of Foreign Affairs and suggest that the Saudi Government propose before June 1 a modification in the contract with the Eastern Telegraph Company.
The proposal might be phrased substantially as follows:
In continuation of the Saudi Government’s communication to the Eastern Telegraph Company, Ltd., dated November 21, 1944, concerning its intention to modify the agreement dated April 17, 1935, between the Saudi Government and the Sudan Government on the one hand and the Eastern Telegraph Company and the Cable and Wireless, Ltd. on the other, and in conformity with the provisions of Article 17 of that agreement, the Saudi Government proposes the following amendment to the agreement to become an additional article in Part III:
“Neither Article 11 nor any other article of this agreement shall be construed to limit the right of the Saudi Government to use or to permit the use of radio stations in Saudi Arabia for the establishment and operation of direct radio communications [Page 1020] circuits with other countries when, in the opinion of the Saudi Government, the use of such channels would be in the interest of Saudi Arabia.”
An alternate, though less desirable modification, would be the amendment of Article 17 to provide that the Saudi Government will have the right to propose modifications of the agreement at any time. This alternative should not be mentioned unless the first suggestion is unacceptable to the Saudi Government.
You should point out that the Saudi Government has already signified its intention of proposing a modification of the agreement, and that the step now suggested merely carries out the intention previously announced to the American and British Governments.
In view of impending developments in Saudi Arabia, the Saudi Government can scarcely consent to have its economic and transport development hampered by a monopolistic arrangement which can be revised only at 5-year intervals, which does not respond to the needs of the country, and which imposes exorbitant rates.
In your discretion you may add that the proposal suggested above has been couched in terms of a sufficiently broad nature to guarantee that the Saudi Government will retain full liberty not only to continue discussions looking toward the establishment of direct radio contact with the United States but also to insist on alterations being made hi terms of the concession which would enable the Saudi Government to prevent the continuance of restrictions on international communications which might later handicap the normal development of economic enterprises in Saudi Arabia. You have likewise discretionary authority to inform the Saudi Government that we are asking the British Government not to oppose the taking of measures by the Saudi Government for the purpose of establishing direct radio circuits between the United States and Saudi Arabia.
There will be repeated to you in a separate message for your information only the text of further instructions on the subject sent to the Embassy in London.9
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