890F.51/54: Telegram
The Secretary of State to the Minister in Egypt (Kirk)
1172. Please repeat the following to Jidda, as Department’s no. 52 and inform Gunter of the contents thereof, advising Jidda whether you have done so:
Your 82, August 6, 11 p.m. This is an amplification of Department’s 37, July 26, 10 p.m.
While Treasury is favorably disposed towards a loan of silver, final decision cannot be reached until:
- (1)
- A formal request is received from the Saudi Arabian Government, specifying the amount of silver required and the reasons for the need.
- (2)
- Treasury’s representative, Gunter, submits his report confirming the need and specifying the amount required in his judgment.
- (3)
- The King guarantees to return silver ounce for ounce; Treasury contemplates that the period over which the silver would be repaid would be 5 years from the end of the war.
In order that these requirements may be satisfied in the most expeditious manner, the following procedure is suggested. It is based upon the assumption that Najib will be in Cairo upon Gunter’s arrival there, and that he may be empowered to sign the formal request on behalf of the Saudi Government.
[Page 892]Text of the standard lend-lease contract covering the loan of silver will be sent to Gunter in Cairo. Only the amount of the loan will be left unspecified. Gunter will discuss the contract with Najib. Gunter will ask Najib whether he can sign the formal request for the loan, and if the answer is in the affirmative, Gunter will draft the request for Najib’s signature, and forward the signed request to Treasury. Gunter will then proceed to Jidda, prepare his report, and forward it to Treasury. On basis of Gunter’s report, the amount of the loan will be determined, and Treasury will instruct Gunter to fill in the agreed amount in the text of the contract. You and Gunter will then proceed to Riyadh to present the contract for the King’s signature. Najib should have had time to advise the King in the interim.
If this procedure is workable, the visit to the King need not take place until Gunter is in position to offer a completed contract for the King’s signature. The chief matter for the King’s consideration will be the giving of his guarantee for the return of the silver in kind.
Your opinion as to the practicability of the suggested procedure is urgently requested. In the meantime, postpone arrangements for an official visit to the King. Do not divulge the specific purposes of Gunter’s visit, beyond saying that he is a Treasury representative interested in obtaining information concerning the shortage of silver in Saudi Arabia, unless, in your judgment, it becomes necessary to be more explicit in order to carry out your instructions with respect to preventing possible unfavorable developments.