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'File 8/15 Arab Series - 1933-1939' [‎50v] (100/434)

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The record is made up of 1 file (214 folios). It was created in 31 Aug 1933-20 Mar 1939. It was written in English and French. The original is part of the British Library: India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. Records and Private Papers.

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a State Bank in this country, I have the honour to enclose a record of part of
my conversation with Mr. Abdul Ghani Ydlibi on 17th March, when he 3 ame to
see me about the projects of the Arabian Development Syndicate, Ltd. The earlier
part of tne conversation related to oil concessions and 1 have reported separately
wnat Mr. Ydlibi said to me on that subject.
2 . 1 have embodied in the enclosed record a few general observations of my
own. 1 may add here that Mr. YYllibi impressed me very unfavourably at this,
my first meeting with him. I should say that the Saudi Government, ignorant
as they are of the intricacies of finance, would find it very difficult to control
the operations of gentlemen so astute as Mr. Ydlibi himself and his local repre
sentative Mr. ’Awayni. They might find it far from easy to limit the volume
of the note issue and they would almost certainly be incapable of coping with
the mysteries of foreign exchanges.
3 . I do not feel competent to express any view of the feasibility of the pro
ject in itself. 1 do not know for instance enough of the arrangements in force
in Iraq to judge whether the anlogy suggested by Mr. Ydlibi is sound and whe
ther it would be practical to combine ordinary banking with the functions of a
currency board. 1 am also puzzled as to what working capital would be available
for the banking business, if the whole of the subscribed capital were immobilised
to secure the note issue.
Enclosure 2 to Serial No. (47).
Memorandum by Sir Andrew Ryan, dated the 19th March 1934.
After speaking about other matters, separately recorded, Mr. ’Abdul Ghani
Ydlibi explained to Mr. Furlonge and myself on March 17 the bank scheme
which he said he was propounding to the Saudi Government.
The scheme is to create a Bank with a capital of £1,000,000 sterling. The
Saudi Government would put up half of this (or £550,000, Mr. YYllibi threw in)
and a British bank the other half. This capital would be applied to the purchase
of British War Loan, to be deposited in the Bank of England. The Bank would
issue notes on a sterling basis, which would be the only currency in this country—
apparently a forced currency. Such notes would be issued up to the limit of
the capital ; not beyond. All Government receipts would be paid into the Bank
and it would conduct all transactions in foreign currencies.
I asked (rt) whether Mr. Ydlibi had reason to think that the Saudi Govern
ment could put up the proposed share of the capital ; and (b) whether he was
assured of the support of a bank in Great Britain as regards the other half.
As regards (a) Mr. Ydlibi said that the Government would doubtless have
to make its contribution by stages. Mr. Furlonge understood him to sav that,
if {hey could not find all or some of the money, the British partners would lend
it to them at interest, an important point which I missed.
As regards (b) Mr. Ydlibi said that he had not yet enlisted the support,
but he anticipated no difficulty. The business would be perfectly secure, as the
capital would be held by the Bank of England.
I tried to elucidate the position which would be created as regards general
banking. Mr. Ydlibi clearly contemplated that the Bank would have a monopoly
of all banking and foreign exchange business. He was less clear as to whether
this would result from the attractions it would offer or from the establishment
of a legal monopoly. I suggested that in the latter contingencv, it would require
a very strong financial police to enforce the monopoly and that it would mean
ousting two established interests, viz., the Dutch Bank and Messrs. Gellatly
Hankey and Company, a British concern.
Mr. Ydlibi said that the Saudi Government would gain (a) by having a stable
and secure monetary svstem on a sterling basis and (b) by receiving a half share
of the profits of the Bank. He said that the scheme was similar to that which
had been adopted in ’Iraq and which had Yielded a profit of some £100,000 in
1932.
I asked whether the Saudi Government were to get a loan. He replied with
a definite negative and said that he had made this quite clear to the Saudi Gov
ernment.
Mr. Ydlibi said that the Minister of Finance had approved the scheme. He
seemed to hope that this, like his oil concession, might go through before he
leaves Jedda on March 21.

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Content

The file contains the Foreign Office confidential prints of the Arabia Series for the years 1933 to 1938. It includes correspondence, memoranda, and extracts from newspapers. The correspondence is principally between the British Legation in Jedda and the Foreign Office. Other correspondents include British diplomatic, political, and military offices, foreign diplomats, heads of state, tribal leaders, corporations, and individuals in the Middle East region.

Each annual series is composed of several numbered serials that are often connected to a particular subject. The file covers many subjects related to the affairs of Saudi Arabia.

Included in the file are the following:

  • a memorandum on Arab Unity produced by the Foreign Office dated 12 June 1933 (author unknown), folios 11-13;
  • a memorandum on petroleum in Arabia produced by the Petroleum Department dated 5 August 1933 (author unknown), folios 23-26;
  • a record of interviews with Ibn Sa‘ūd, King of Saudi Arabia, conducted by Reader Bullard and George William Rendel between 20 and 22 March 1937;
  • a memorandum on Yemen by Captain B W Seager, the Frontier Officer, dated 20 July 1937;
  • several records of proceedings of ships on patrol in the Red Sea, including that of HMS Penzance , Hastings , Colombo , Bideford , and Londonderry .

Folios 213-15 are internal office notes.

Extent and format
1 file (214 folios)
Arrangement

The file is arranged chronologically.

Physical characteristics

Foliation: the main foliation sequence (used for referencing) commences at the front cover with 1 and terminates at the back cover with 217; these numbers are written in pencil, are circled, and are located in the top right corner of the recto The front of a sheet of paper or leaf, often abbreviated to 'r'. side of each folio. An additional foliation sequence is also present in parallel between ff 2-215; these numbers are also written in pencil, but are not circled, and are located in the same position as the main sequence.

Written in
English and French in Latin script
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'File 8/15 Arab Series - 1933-1939' [‎50v] (100/434), British Library: India Office Records and Private Papers, IOR/R/15/2/310, in Qatar Digital Library <https://www.qdl.qa/archive/81055/vdc_100025548486.0x000065> [accessed 5 April 2020]

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