890F.24/11–2844: Telegram
The Minister in Saudi Arabia (Eddy) to the Secretary of State
[Received 9:14 a.m.]
354. Summary of MESC Cairo supply procurement for Saudi Arabia for 1945 just received. Omitting cereals and motor transport it urges all remaining commodities be returned to private commercial channels with subsidy “if any” confined to foodstuffs.
Am convinced Jordan will lead British effort to embroil us in resentment of King by proposing drastic reduction in subsidy. I suggest Jordan’s argument from increased oil revenue (Legation’s 275, September 10, 1 p.m.) be rejected. Aramco informs me King cannot expect larger payments in 1945 than were due in 1944 and that King’s recent borrowing from Aramco further decreases what he should receive from them. I recommend that
- (1)
- I be authorized to defer 1945 subsidy discussion with Jordan until after my visit to Riyadh although giving him no reason except as in Legation’s 352.72
- (2)
- If British insist on unreasonable reduction of subsidy we return the subsidy to them alone and assist Saudi Government by direct and independent agreement.
- (3)
- Increase in oil revenues be excluded from subsidy consideration as new revenue reserved for national development not part of 1941 budget to which Jordan wants Saudis to return.
- (4)
- I be authorized to insist on joint discussion of budget with Saudi officials who are certainly an interested party to prevent unnecessary misunderstandings or disappointments. Such discussion was proposed by Department (184 September 16 and 166 August 23,73 paragraph 5) but was rejected by Jordan (Legation’s 264 September 4).