890F.515/96: Telegram

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

98. In note dated today Saudi Government accepted Treasury’s proposal for conversion dollars into rials described first paragraph Department’s unnumbered [45?] March 23, 9 [7?] p.m.

Last 7 million Lend-Lease rials arrived Jidda March 6 and delivered to Saudi Government immediately. Probably most have been spent already. In reply suggestion that Saudi Government begin sale rials under conversion plan price receipt of 10 million new Lend-Lease rials both Finance Minister and Acting Foreign Minister expressed willingness do so within limitations of Government’s financial resources.

Acting Foreign Minister confirmed that Saudi Government cannot accept interest payments (my 81, March 27, noon59) and therefore suggested that deposit with Federal Reserve Bank be utilized as revolving fund for conversion dollars to rials by some procedure to be agreed on later. This suggestion was not a condition of acceptance of Treasury’s plan.

Please advise immediately details procedure to put plan into effect.

When new rials are shipped Saudi Government wishes delivery of 1 million rials at Jidda and 9 million via Bahrein or if that is impracticable, delivery of entire number through Bahrein.60

  1. Not printed.
  2. In his telegram 250, August 14, 7 p.m., the Minister Resident advised that the Saudi Arabian Government preferred to receive all 10 million riyals at the Saudi Arabian port of Ras Tanura (890 F.515/8–1444).