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'ECONOMIC DEVELOPMENTS IN SAUDI ARABIA' [‎8r] (15/24)

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The record is made up of 1 file (10 folios). It was created in Jan 1948-4 Mar 1949. It was written in English. 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 Documents collected in a private capacity. .

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/ iPS The branch of the British Government of India with responsibility for managing political relations between British-ruled India and its surrounding states, and by extension the Gulf, during the period 1937-47.
( o /
J
• .
Copy of an extract of a letter No.82E 333/4/48,
dated the 29th April, 1948, from His Majesty^ Ambassador,
Jedda, to the Rt. Hobble Ernest Bevin, M.P., Foreign Office.
XXX XXX XXX XXX XXX . XXX
4. The Minister of Finance has also stated publicly that
the current daily rate of production of the Company is 46,165
tons, implying a rate of payment of royalty of £.9,233 gold
daily. Upon the unlikely assumption that the daily rate of
production will not increase in the course of the year,
royalties for 1948 will total £.3,370,000 gold, worth
approximately £.16,000,000 at current local exchange rates.
Upon the minimum assumption that the Company will pay dollars
instead of gold in respect of the whole years output, royal
ties will total 0.40,000,000, plus an unknown total of arrears.
This compares with an approximate total of 0.12,000,000 in
1946 and 0.19,000,000 in 1947. The rate of increase is
startling, but does not indicate the true magnitude of Saudi
Arabians foreign exchange resources in the near future. In
addition to royalty payments, both the Arabian American Oil
Company and the Trans Arabian Pipeline Company are committed
to a heavy local expenditure upon capital projects involving
further dollar outlay. The Saudi Arabian Government are
consuming the 0.25,000 United States "Line of Credit"
granted in 1946 at a prodigious rate, and are reported by
members of the staff of the United States Legation in Jedda
to be seeking a further "Line of Credit". It is, moreover,
by no means certain that the United States Government will
in future refrain from selling gold to the Saudi Arabian
Government at the United States Treasury price. A statement
made some time ago by a member of the staff of the United
States Legation in Jedda, to the effect that Saudi Arabian
dollar earnings in 1948 may approach a total of 0.100,000,000,
does not now appear to be as incredible as it did when first
made.
5. It seems certain that the receipt of gold andforeign
currencies upon this scale must produce a revolutionary impact
upon local exchange rates and local price levels. The
Arabian appetite for gold for hoarding purposes in great but
not insatiable. Saudi Arabia is becoming a favoured market
for purveyors of foodstuffs sold in disregard of allocations
made by the International Emergency Food Committee, and the
inducement offered to smuggling must injure internal supply
arrangements in such adjacent British territories as Aden, the
Sudan and Somaliland. Complaints of this kind have already
been received from the Political Resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency. in the Persian
Gulf. Even more serious consequence* may follow upon
Saudi Arabian attempts to purchase depreciated sterling
with gold. On the other hand, if a close control can
be impose.d upon such purchases a salutary fall in the local
price of gold may result. In this connection it is of
interest to observe that the Saudi Arabian Government has
recently reinforced the ban upon the export of gold.
XXX XXX XXX XXX XXX XXX
\
r
v

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Content

This file concerns economic developments in Saudi Arabia, including extracts from 'Saudi Arabia Monthly Economic Report. January/February 1948' (f 2) and March 1948 (f 7); extracts from 'Review of Middle East Press' dated 1 May 1948 (folio 3) and 28 May 1948 (folios 4-6); and a copy of an extract from a letter, dated 29 April 1948, from His Majesty's Ambassador at Jedda to Ernest Bevan, Foreign Secretary (folio 8). Subjects covered include: Aramco, developments in the Hedjaz [al-Ḥijāz], the Trans-Arabian Pipeline Corporation, the Saudi Arabian National Bank, oilfields at Dhahran [al-Ẓahrān], commercial activities, and mining and oil.

Extent and format
1 file (10 folios)
Arrangement

The papers are arranged in chronological order from the front to the rear of the file. File notes appear at the rear of the file.

Physical characteristics

Foliation: the main foliation sequence (used for referencing) commences at the front cover on folio 1 and terminates at the back cover on folio 12; 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 2-10; these numbers are also written in pencil, but are not circled.

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English in Latin script
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'ECONOMIC DEVELOPMENTS IN SAUDI ARABIA' [‎8r] (15/24), British Library: India Office Records and Private Papers, IOR/R/15/2/483, in Qatar Digital Library <https://www.qdl.qa/archive/81055/vdc_100025643231.0x000010> [accessed 28 March 2024]

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