890F.515/97a: Telegram

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

58. Upon receipt of your 90, March 30, 11 p.m.63 a memorandum was sent to the President64 recommending increased financial and economic assistance to Saudi Arabia and that this Government share the subsidization of Saudi Arabia on an over-all, equal basis with the British. It was recommended further that this Government’s share of the subsidy assume the initial form of Lend Lease aid and that the Foreign Economic Administration be authorized to furnish the necessary goods, it being contemplated that Congressional approval might be sought subsequently for outright financial assistance. It was also recommended to the President that this Government propose to the Saudi Arabian Government the establishment of a central bank under purely American auspices, as no official reaction has been heard from the [Page 684] British in regard to a previous proposal to them for the establishment of such a bank under joint auspices.65

The President has now indicated his complete approval of all the recommendations made in this memorandum submitted to him.

While plans for joint American-British assistance on an over-all equal basis must necessarily be discussed with the British, the Department desires as soon as possible to make such concrete plans as may be feasible for the extension of the American share of this aid. In order to make these plans it is essential to obtain accurate factual information regarding the financial and economic needs of Saudi Arabia. As you are aware, the information the Department has received based on your recommendations together with those of Treasury representatives and Jordan are conflicting and therefore totally inadequate as a basis for a concrete plan. In particular the Department wishes to ascertain the types and quantities of goods that Saudi Arabia will need over given periods as well as to receive your recommendations as to the types and quantities which should be furnished from American sources in order to provide assistance on an over-all equal basis with the British. Furthermore, before any decision can be reached regarding minting of riyals referred to in your 103, April 11, 11 a.m.,66 it will be necessary to obtain accurate information regarding Saudi Arabia’s need for Lend Lease silver coins. It is desired therefore that you, in cooperation with Landis and Treasury representatives, provide the Department with this essential factual background information as soon as possible.

Repeated to Cairo for Landis.67

  1. See footnote 57, p. 679.
  2. Memorandum of April 3, p. 679.
  3. This plan had been advanced informally by Treasury Department experts at the meeting on February 17 at Washington of representatives of the United States and British Governments with regard to Saudi Arabian fiscal problems (see footnote 47, p. 674).
  4. Not printed.
  5. Repeated as telegram 822.