102.1/10220: Telegram

The Minister Resident in Saudi Arabia (Moose) to the Secretary of State

55. Acting Foreign Minister asks that his note of January 12 attached my despatch 98, January 17,48 be considered request for Lend-Lease silver sufficient for 20 million riyals irrespective of fate of Treasury’s dollar riyal conversion scheme. He is ready sign formal request at any time. He suggests 5 million riyals to be minted and shipped immediately followed similar shipments in or about months of June, August, and October.

1944 Saudi budget with brief comment was reported in my despatches 91 and 93 January 12.48 British Minister thinks any considerable increase in silver riyals circulating in Saudi Arabia will be [Page 675] inflationary. While recognizing his objection all alternative schemes thus far proposed also present risks. In my opinion pending questions between United States and Saudi Government and maintenance of good relations with King justify sympathetic consideration of request. This is particularly true since British Minister is now pressing Saudi Government for substantial economies.

Sent Department, repeated Cairo for Landis.49

  1. Neither printed.
  2. Neither printed.
  3. James M. Landis, Director of American Economic Operations in the Middle East, with the personal rank of Minister. Mr. Landis was also ranking civilian representative of the United States at the Middle East Supply Center (MESC), Cairo, an organization set up in 1941 by the British to control the supply and distribution of essential goods to the civilian populations of the Near and Middle East; for correspondence regarding decision by the United States, in 1942 to participate in the Middle East Supply Center, see Foreign Relations, 1942, vol. iv, pp. 1 ff.