Foreign Relations of the United States: Diplomatic Papers, 1944, The Near East, South Asia, and Africa, The Far East, Volume V

890F.24/9–2544: Telegram

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

Jidda, September 25, 1944—9 a.m.
[Received 1:12 p.m.]

290. Suggestions below predicated on my assumption that joint supply program is a war measure necessitated by MESC rationing which will not preclude larger American-Arabian agreements after hostilities cease. Please confirm or correct this assumption.

Am planning to postpone first official visit to King until Department authorizes broaching for preliminary discussion with King long-range cooperation similar to the following in scope. Unless Saudi Arabs can foresee vigorous large-scale American cooperation they will continue to be intimidated by surrounding sterling controls.

After consultation with Coney bear⁶³ I suggest to Department (see despatch No. 5, September 7), effective when European hostilities cease:

(1) Loan of 10 million dollars first year decreasing by 1 million each year for 10 years then repayable in inverse ratio beginning with 1 million 11th year, total repaid in 25 years loan secured by Government revenue from Arabian oil. Loan would stabilize economy till oil revenue made nation self-sufficient and would provide means to acquire equipment for public services, agricultural developments and communications. Loan to be spent in USA for goods and services. If direct loan forbidden by US laws could it be made indirectly through National City Bank?

(2) Saudi Government to give US concession to construct airdromes and operate commercial and military airways. US to assure some internal air transport, adequate native air force for border patrols, by equipping and training Saudi pilots and mechanics.

(3) US to contract to build a highway artery across Arabia with spurs to principal cities to organize transportation and repair shops and to provide at reasonable prices motor vehicles and replacements. Conditional upon an American supervisor of transport. Unlike other nations Saudi economy and order wholly dependent for transport upon motor vehicles alone. When hostilities cease US industry will be geared to meet this need.

(4) Simultaneous with proposals above or equivalent, Department to request appointment of American financial and economic adviser. I am convinced proposal for adviser should not be isolated but go hand-in-hand with offer of far-reaching economic cooperation.

(5) Other possible offers (a) to rebuild Medina–Damascus railroad or (b) build railroad from Jidda to Mecca for port merchandise and pilgrimage traffic. However, not certain railroads will tempt King.⁶⁴

Eddy

63. Col. John F. Coneybear, FEA representative and chief of MESC, Jidda.
64. In telegram 220, October 25, 7 p.m., the Minister in Saudi Arabia was informed: “We have been working intensively and as expeditiously as possible on plans relating to the suggestions you have made. We are keenly aware of the urgency and importance of the matter and hope it will be possible to provide you with definite information with regard thereto in the comparatively near future.” (890F.24/9–2544)