Informal Statement Prepared in the Division of Near Eastern Affairs3

The Saudi Arabian Communications Matter

In 1926 Cable and Wireless Limited entered into an agreement with the Saudi Arabian Government whereby Cable and Wireless Limited acquired a practical monopoly on the external communications of Saudi Arabia. This agreement provided that it might be terminated [Page 766] or modified by either party on June 30 of any year divisible by five provided six months’ notice is given by December 1 of the previous year. Cable and Wireless has a cable station at Jidda on the Red Sea side of Saudi Arabia and another cable station in Bahrein. The company, however, has no communication facilities on the Persian Gulf side of Saudi Arabia.

The Arabian American Oil Company is building on the Persian Gulf side of Saudi Arabia a large strategic refinery under a Directive of the Joint Chiefs of Staff. This company has no adequate means of communication with the United States. The nearest commercial station is on Bahrein where messages must be sent by hand from Dhahran for transmission. The company uses a tug which transmits outside territorial quarters [waters?] several times a week to the United States. The company uses this tug for its urgent and confidential messages and sends only routine messages through the cable station at Bahrein. The company regards these communication facilities as entirely inadequate; furthermore, the use of the tug is not strictly in accordance with the terms of the agreement between Cable and Wireless Limited and the Saudi Arabian Government.

In June 1944 the Arabian American Oil Company suggested to the Saudi Arabian Government that the Saudi Arabian Government erect a station of its own in the vicinity of Dhahran and give notice to that effect to Cable and Wireless Limited by December 1, 1944. Having failed to receive any satisfactory reply from the Saudi Arabian Government to its inquiry, the company requested the Department of State to endeavor to ascertain on its behalf the attitude of the Saudi Arabian Government in regard to the matter. In October 1944, upon instructions from the Department of State, the American Minister at Jidda took the matter up with the Saudi Arabian Government. He ascertained that the reason the Saudi Arabian Government had not replied to the Arabian American Oil Company was that the British Government had expressed to the Saudi Arabian Government its objection to the establishment of such a radio station. It is understood that the Saudi Arabian Government would give notice of the modification of its agreement with Cable and Wireless and proceed to establish its own station provided the objection of the British Government is withdrawn. If this objection is to be withdrawn, it must, be withdrawn in sufficient time for the Saudi Arabian Government to give notice to Cable and Wireless Limited before the approaching deadline of December 1, 1944.

Both the American and British Governments are in agreement that suitable censorship control should be established over this station as long as the war lasts. There is no reason to believe that the Saudi Arabian Government would object to the exercise of such censorship [Page 767] control during the war, and it is considered likely that appropriate arrangements therefor could be made quite easily.

  1. Forwarded under cover of a letter of November 9 to the Counselor of the British Embassy (Wright) by the Deputy Director of the Office of Near Eastern and African Affairs (Alling).