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

No. 177

Sir: I have the honor to bring to the attention of the Department the fact that although only three months remain until the beginning [Page 959] of 1946, no plans have been developed, so far as this Legation is aware, for the continued subsidization of Saudi Arabia next year.

It is believed that assistance is contemplated over a period of time, but diminishing from year to year so as to reduce gradually, rather than abruptly, Saudi Arabia’s dependence abroad for her economic stability. Such being the case, a program, if somewhat reduced, must be developed for 1946 which will be effective when the year begins in order that essential supplies for the people, who must continue to eat regularly, will not be interrupted. It is pointed out in this connection that although an early start was made during 1944 in work on the 1945 subsidy program, the negotiations were not completed nor the Saudi Arabian Government informed until the end of July 1945.

Despite that seven months’ gap before the 1945 program was decided, continuity of Lend-Lease as well as interim commitments of our co-contributor, the United Kingdom, offset, without too serious an interruption in deliveries during the first half of the year, the awkwardness which was a consequence of the very tardy agreement on the 1945 program. No such saving factor can be looked for to minimize the consequences of similar indecision in 1946.

The complete cessation of hostilities has already ended Lend-Lease to most countries except Saudi Arabia, and it appears most unlikely that it can carry over here beyond the delivery of goods to which we are committed under the 1945 program. His Britannic Majesty’s Minister at Jidda, moreover, has let it be known that the share of the United Kingdom, if any, in next year’s subsidy must be further reduced, while the closing of Middle East Supply Centre18 with its distribution machinery and its pool stock facilities in the Middle East place an added responsibility upon the United States. Unlike the beginning of 1945, therefore, the old machinery will not still be in existence to carry on and it becomes mandatory to set up a new authority and machinery to take up the burden at the beginning of 1946 when the old relinquishes it at the end of the year.

This problem is of great concern to the Saudi Arabian Government, who made specific reference to it when the American and British Ministers jointly informed them of the closing of Middle East Supply Centre. It is urged, therefore, that no time be lost in making a prompt and effective decision in regard to United States assistance to Saudi Arabia for 1946, so that procurement of commodities and their transportation can be arranged in time to preclude undue hardship upon the government and people of Saudi Arabia.

Respectfully yours,

William A. Eddy
  1. For documentation on this subject, see pp. 85 ff.