Foreign Relations of the United States, 1951, The Near East and Africa, Volume V

886A.2553/4–3051: Telegram

The Ambassador in Saudi Arabia (Hare) to the Department of State ¹

confidential

Jidda, April 30, 1951—4 p. m.

641. Re Embtel 631, Apr 25.² Acting Aramco rep Henry yesterday informed Hamad Sulaiman, Dep Fin Min, that company wld write letter Dutch Bank stating will pay latter $4 million of June 15 tax installment on that date. Despite fact letter will not be delivered until late today, SAG finances currently so straitened that Min Fin officials telephoned bank less than one hour after yesterday’s Henry–Hamad conversation demanding funds and Dutch Bank has already in past 24 hours paid out over $1 million of the 4 million due on Henry’s verbal assurance letter is in works.

Hand-to-mouth nature SAG financing further evidenced by receipt yesterday by Aramco of letter from Min Fin Abdullah Sulaiman, still Riyadh with Najib wrestling with “budget” requesting company to deliver to SAG “bonds” (best available translation Arabic original) guaranteeing payment June, Sept and Dec tax installments when due (see Embdes 293, Mar 2³ (approximately 17 characters garbled)) what desired is type short term negotiable paper which SAG might be able discount more readily than existing letter delegation procedure. Basis this hope not known, but perhaps required by Chase which reported interested in discounting June payment (Embtel 617, Apr 19).⁴ Delaby reports most New York banks now require signatures Aramco parent companies before advancing funds SAG. In view para 1 above, balance June payment subject “bonding” now $7,500,000.

Hare

1. Repeated to Cairo.
2. Not printed: it reported a request to Aramco by the Saudi Arabian Deputy Finance Minister for a letter to the Dutch Bank, stating that Aramco would pay $4 million of the June tax installment of $11,500,000 on June 15 (886A.2553/4–2551).
3. Not printed; it transmitted a revised Aramco estimate of the 1950 income tax payments due the Saudi Arabian Government in 1951, from $44 million up to $50 million (886A.2553/3–251).
4. Not printed; it reported the Chase National Bank had received a proposal through the local Arab bank for an advance to the Saudi Arabian Government against anticipated June tax receipts from Aramco. Chase submitted an offer to advance $10 minion against anticipated receipts of about $12 million, but had not received the Saudi Arabian answer at that time. (886A.10/4–1951)