Memorandum of Conversation, by the Chief of the Division of Near Eastern Affairs (Alling)

Subject: Various Economic Questions in Saudi Arabia

Participants: Amir Faisal, Saudi Arabian Minister of Foreign Affairs
Amir Khalid
Shaikh Hafiz Wahba, Saudi Arabian Minister to London
Mr. Berle
Mr. Murray
Mr. Alling

Following a lengthy conference, the Amir Faisal mentioned some of the secondary matters which he wished to discuss. These were as follows:

Silver.36 Mr. Berle furnished the Amir with the information in the attached memorandum. The Amir expressed satisfaction with the steps which we had taken to provide silver. Mr. Alling pointed out that the furnishing of silver was not a permanent solution of the financial problems of Saudi Arabia and he inquired whether the Amir had any information whether his father had taken any steps toward such a solution, such, for example, as the establishment of a bank. Amir Faisal replied that he had no precise information on this point. It was his belief that the idea of a bank had been dropped, at least for the time being. He added that he recognized that some permanent solution would be required and asked whether we had any suggestions. Mr. Alling suggested that a preliminary step might be for us to furnish the King with advice. The Amir approved of this proposal and intimated that he would discuss it with his father.
Direct Lend-Lease. Mr. Berle furnished the Amir with the information in the attached memorandum.37
Automobile trucks for Saudi Arabia. Again the information in an attached memorandum was furnished.37 The Amir remarked that he had had a telegram from his father intimating that the cars which had been shipped from Egypt had not arrived. It was agreed that inquiries would be made on this point.

There was a subsequent discussion regarding certain other articles needed by Saudi Arabia, including radio equipment, pumps and medicine. It was agreed that these matters would be discussed at a meeting to be held in the afternoon.

[Page 849]

Saudi Arabian Silver

An agreement was signed on October 3, 1943 under which 5,167,000 ounces of United States Treasury silver will be loaned to the government of Saudi Arabia. King Ibn Saud, through Bashir Alsadawi, authorized by royal decree to sign on the King’s behalf, has promised to return the silver ounce for ounce within five years after the end of the war. This amount of silver will be sufficient for the coinage of 15,000,000 riyals required to meet Saudi Arabia’s currency needs for the rest of 1943. We are attempting to get 8,000,000 riyals to Saudi Arabia in time to meet the heavy currency demands arising from the annual pilgrimage to Mecca which begins about November 15 and reaches its peak early in December. To speed delivery, we have arranged to have 4,000,000 riyals minted in India and 4,000,000 riyals in London from silver already available at those points, said silver to be replaced with United States silver as soon as shipping can be arranged. It is hoped that the first shipments of riyals from India will arrive by November 15.

  1. For correspondence relating to this subject, see pp. 854 ff., passim.
  2. Presumably Mr. Parker’s memorandum dated November 1, p. 843.
  3. Presumably Mr. Parker’s memorandum dated November 1, p. 843.