Coll 6/19 'Arabia: (Saudi Arabia) Hejaz-Nejd Annual Report.' [‎190r] (380/540)

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Anaiza has a special status under the King and independent of the more extensive
governorate of Buraida, to which it is geographically close. The Governor of
Taima, of which a good deal was heard in 1932, seems to be still a semi
independent local personage. One important change was made in 1932. The old
Governor of Jedda, who was the principal local merchant and retained from
King Hussein’s time the old Turkish title of Kaimakam, died, and was replaced
a Nejdi official of high family in Anaiza, with the same title of Amir as is borne
by other Governors.
IV.— Financial, Economic and Commercial Affairs.
Finance.
114. The finances of Saudi Arabia went from bad to worse again in 1932,
although it is only fair to say at the outset that some attempts at economy were
made. In January the Umm-al-Qura published what purported to be a budget
for the lunar year beginning the 12th December, 1931. It had only one side, an
expenditure side, which contemplated disbursements to the total amount of
105,956,086 or 106,442,544 piastres miri, according to whether an obvious
discrepancy was due to a mistake in items or in addition. It was assumed in the
covering regulation that receipts would balance expenditure.
115. The budget was for the Hejaz only. It allocated 45,100,000 piastres
for Royal and military expenditure. This may be taken to be the King’s share in
the revenues of the Hejaz. Although the Hejaz gets rule and security as a quid
fro quo, the allocation represents in the main, from a financial point of view, a
heavy drain on the revenues of the Hejaz in favour of Nejd. It may be supposed
that it is a first charge on any available receipts, a fact which doubtless explains
constant reports that the bulk of the latter are remitted to Riyadh. Otherwise
the budget must be regarded as eye-wash. It is impossible to estimate the actual
revenue. An attempt made by the Legation in March to calculate it
approximately, suggested a figure of £619,000 gold for the current year, but there
was reason later to suppose that customs revenue had been put at too high a
conjectural figure.
116. Nothing precise can be said of the finances of Nejd and its
Dependencies. How poor they are on the receipts side may be gauged by the report
that Muhammad-at-Tawil, the head of the commission of reorganisation sent to
Hasa in 1930, undertook to produce 11 lacs One lakh is equal to one hundred thousand rupees of rupees Indian silver coin also widely used in the Persian Gulf. from customs there and failed
to do so.
117. The Hejazi budget allocated 16,500,000 piastres for the payment of
debts. It had been understood that 25 per cent, of the total revenue would be
devoted to this purpose. In explanation of the smaller proportion borne to the
total by the figure shown in the budget, Fuad Bey Hamza naively explained to
Sir Andrew Ryan that the discrepancy was not so great as might appear, as some
of the items, including that for debt redemption, were at gold rate, while others
were at riyal rate. In any case, no effort was made during the year to pay off
important outstanding debts. In some cases the claimants had been induced to
accept promissory notes falling due in November 1932. In others, the claimants
continued to be allowed rebates on customs duty in part payment of the sums due
to them. This latter system was generalised by a regulation published on the
17th June. It laid down that debts regarding which an agreement had been
made with the creditors would be dealt with under such agreements, but that
other debts, with certain exceptions otherwise provided for, would be discharged
by issuing drafts on customs which would be accepted in payment of 25 per cent,
of the duty on new goods. Creditors other than import merchants were to
designate import merchants to receive and handle drafts on their behalf. This
created a discount market for drafts on customs, which was naturally a very poor
one. The drafts were said to be changing hands towards the end of the year at
something like one-third of their face value.
118. The regulation just mentioned appeared at first sight to get right
away from the system contemplated at the beginning of the year of setting aside
a stated amount of revenue for the redemption of floating debt. They were
brought into ingenious harmony by a circular issued to all creditors, including
His Majesty’s Government in the United Kingdom, in November. It treated