890F.24/4–1745

The Department of State to the British Embassy

Memorandum

The memorandum of the British Embassy dated April 17, 1945 sets forth in detail the attitude of the British Government toward a supply program for Saudi Arabia in 1945, and makes the following principal points:

1.
The British Government has decided that its subsidy to Saudi Arabia in 1945 must be limited to approximately one and one-quarter million pounds sterling, or roughly half that supplied in 1944;
2.
This basis appears to be unacceptable to the United States Government;
3.
The British Government feel strongly that the 50/50 basis of a joint supply program should be maintained if possible;
4.
If the 50/50 basis were maintained in so far as the joint program is concerned, that would not preclude the United States Government from furnishing special assistance to Saudi Arabia such as cultural projects, road construction, and so on;
5.
The British Government hopes that the United States Government will decide to reduce its aid to Saudi Arabia in 1945 to the British level and will make possible a joint communication to King Ibn Saud as in 1944;
6.
Should the United States Government decide to give Saudi Arabia greater assistance than the British Government is prepared to make available, then the 50/50 arrangement will no longer apply and an impression of Anglo-American rivalry will inevitably be given.

The aim of the United States Government in extending aid to Saudi Arabia has been to meet the minimum essential needs of that country, both supply and budgetary, and the Department of State would be reluctant to approve, on behalf of the United States Government, any program of assistance for 1945 which does not meet those needs.

Information currently available to the Department of State leads to the conclusion that a program of assistance to Saudi Arabia valued at approximately $16,000,000 is required in 1945 to meet those minimum essential needs. This estimate is not a firm figure, but might be adjusted upward or downward in 1945 in response to unforeseen developments in Saudi Arabia or in the supply situation, or in consideration of more accurate or more complete information. It will be noted that the estimated value of the entire 1944 program is about $20,000,000, or one-fourth greater than the corresponding figure for 1945.

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The data on which the 1945 estimate is based will be made available to the British Embassy, if desired, and any desired explanations will be made to clarify the reasoning leading to the figure of $16,000,000.

The Department of State is in accord with the views of the British Government regarding the desirability of equal American and British shares in a joint supply program for Saudi Arabia in 1945, and the presentation of a joint note or identical notes to King Ibn Saud. It also is in full accord that adoption of a program for 1945 is a matter of urgency.

The Department does not believe, however, that such considerations would justify it in accepting a program of assistance to Saudi Arabia which it has reason to believe is inadequate.

The problem, therefore, is one of reconciling, within an equally shared joint program, the British decision to limit the British subsidy to approximately £1,250,000 and the American view that an adequate program of aid will amount to some $16,000,000.

Of a total cost of $16,000,000, the value of the contemplated supply program is about $13,000,000, and half that sum would amount to approximately £1,625,000. Thus, leaving aside reimbursable lend-lease riyals as was done in 1944, half of the value of an adequate joint supply program in 1945 would be met if the British Government were to increase its limit from £1,250,000 to £1,625,000 or by some £375,000.

It is hoped that the British Government will consider that the advantages of continuing the 50/50 basis of assistance in 1945 would be well worth the suggested increase in expense.

On the other hand, if the British Government feels that it cannot contribute more than £1,250,000, an alternative, though possibly less desirable reconciliation of the two points of view, might be achieved by setting up, on a 50/50 basis, a joint supply program consisting principally of foodstuffs and valued at $10,000,000. Then, in addition to the joint program, the United States Government would supply under lend-lease facilities the contemplated silver riyals plus an individual supply program consisting of trucks, tires, spare parts and similar items valued at some $3,000,000. If the special assistance mentioned in paragraph 6 of the British Embassy’s memorandum were expanded to include supplies and equipment, this plan would conform to the British suggestion noted in (4) above.

In either event a joint communication could be delivered to King Ibn Saud with regard to the joint program, and the United States Government would inform the King of the additional supplies and equipment which it had decided to furnish after consultation with the British Government.

In view of the necessity of reaching a prompt decision, it is hoped [Page 884] that the views of the British Government on the suggestions made above can be obtained as a matter of urgency.