890F.515/4–2045
The Foreign Economic Administrator (Crowley) to the Secretary of State
Dear Mr. Secretary: We have your letter of February 14 in which you request FEA to take measures to make available Lend-Lease funds [Page 880] for a program of assistance to Saudi Arabia during the fiscal year, 1946.
We also have your letter of March 23 in which you request assurance that this Administration is prepared to make available up to $18,000,000 to finance a program of assistance to Saudi Arabia in the calendar year 1945 in the event the British Government decides not to participate in a joint Saudi Arabian Supply Program for 1945.
Up to March 31, 1945 we had allocated to procurement agencies approximately three million dollars for the purchase of supplies for Saudi Arabia in addition to silver and in addition to those supplies which constitute a part of the 1944 Joint Anglo-American Supply Program. During the final quarter of the current fiscal year we are prepared to make available an additional three million dollars for the procurement of supplies requested by Saudi Arabia and recommended by our representatives in the field.
We have included in the FEA Lend-Lease budget, as submitted to the Bureau of the Budget for transmission to the Congress, the sum of $12,060,000 for aid to Saudi Arabia during the fiscal year 1946. This is based upon our understanding that the Department of State will at our request support this budget item before the Congress, and will also undertake to secure written supporting statements from the War and Navy Departments.84
If Congress passes the Lend-Lease appropriation with this item included in the budget the FEA is prepared to expend the funds so appropriated as rapidly as the Government of Saudi Arabia and State and FEA Representatives in the field recommend, supply allocations permitting. However, should the Export-Import Bank extend credit to Saudi Arabia we would wish to request that the Saudi Arabian Government be asked to utilize such credit for the procurement of capital goods, thus limiting Lend-Lease aid to consumer type goods. Subject to the above conditions, we believe this letter enables you to [Page 881] inform representatives of the British Government that the U.S. is prepared to finance, with or without British assistance, a program of aid to Saudi Arabia which State and FEA Representatives deem to be adequate to meet that country’s minimum essential requirements during 1945. We should like to emphasize that supply and shipping restrictions may make it difficult or impossible for the U.S. to fulfill, in the sense of physically delivering the goods, a commitment of the kind contemplated in your letter of March 23 even though Congress may have appropriated sufficient funds for this purpose.
We are fully prepared to undertake action within our powers to carry out foreign policy objectives formulated by the State Department and to cooperate with the policy of aiding Saudi Arabia to the extent that Congressional approval of this program and supply and shipping limitations permit. However, we wish to repeat the request made in our letter of January 2485 that the Department secure Congressional approval for some form of assistance to Saudi Arabia other than Lend-Lease aid. We trust that this possibility is still being actively explored, as stated in your letters of February 14 and March 23, and that an alternative to Lend-Lease aid will be available by the beginning of 1946.
Sincerely yours,
- In a letter of May 5, 1945, to the Secretary of War, the Acting Secretary of State (Grew) stated that the minimum essential needs of the Saudi Arabian Government in 1945 and fiscal year 1946 “have been estimated at some $16,000,000 for the 1945 calendar year, though if the British Government continues joint aid to Saudi Arabia in the same ratio as in 1945 [1944?], the cost to the United States Government would be reduced substantially below $16,000,000.” He also stated that “It would be of great assistance in securing the necessary long-range help for Saudi Arabia if the War Department could supply this Department with a letter supporting this item of the Foreign Economic Administration’s budget.” (890F.515/4–2045) A virtually identical letter was sent to the Secretary of the Navy the same day. In a joint letter of May 21 to the Secretary of State, the Secretary of War and the Acting Secretary of the Navy (Bard) stated: “Such financial assistance to the Government of Saudi Arabia as may be necessary to maintain political and economic stability in that area is important to the successful prosecution of the war against Japan.” (890F.24/5–2145)↩
- Not printed.↩