890F.24/3–846: Telegram

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


66. SAG interested obtaining $300,000 worth of surplus trucks and spares in Cairo, and in addition, has presented note to Dept6 asking help in getting 300 trucks, in excellent condition, for urgent needs. Legation, Washington, has been told that it should handle any future purchase of new trucks in US through commercial channels and is beginning to do so.

However, Dept and surplus authorities here believe many good trucks can be obtained by SAG from surpluses now in Cairo. Credit of half million dollars for 5 years, 2⅜ percent service charge repayable 20 percent each Jan. 1 in dollars and unpaid balance callable at any time in riyals can be extended by FLC apart from Eximbank loans.7

[Page 740]

Asad al-Faqih8 and USG favor handling matter in Egypt. Will you ask SAG if it approves this procedure? If yes, King should issue decree authorizing negotiation and purchase up to half million dollars US surplus material in Cairo by SAG Minister to Egypt or by SAG Purchasing Commission now reported to be in Egypt. Sanger9 will take proposed contract to Cairo with him next week.

Demand for best conditioned US surpluses so great no time should be lost if SAG is to obtain suitable equipment. SAG Minister Cairo and/or purchasing commission there must have not only authority to buy but also its own qualified technical assistance to inspect and select equipment desired, because sales are made as is, where is, with no continuing USG liability.

Dept feels that half million dollars mentioned above should be top limit of additional credit for SAG purchases of surplus. If more material is desired and located it should be bought with SAG dollar resources, other than Eximbank advances.10

Sent Jidda, repeated Cairo for Ramsey.

  1. Dated March 4, not printed.
  2. This refers to the approval on January 3, 1946, by the Board of Directors of the Export-Import Bank of a $25,000,000 line of credit to Saudi Arabia: see telegram 2, January 4, 1946, to Jidda, Foreign Relations, 1945, vol. viii, p. 999.
  3. Saudi Arabian Minister in the United States.
  4. Richard H. Sanger of the Division of Near Eastern Affairs.
  5. Fred W. Ramsey, Central Field Commissioner in the Middle East for the Office of the Foreign Liquidation Commissioner, set forth the formal proposal of the United States Government on the sale of surplus property to the Saudi Arabian Government in a letter of May 22, 1946, to the Minister of Finance. Abdullah Suleiman. The proposal called for a line of credit of $2,000,000 for purchases made prior to January 1, 1948, and made no provision for interest or service charges. These terms were accepted by the Finance Minister on May 25 (890F.24/4–347).