Coll 6/9 'Jeddah Reports Jany 1931–' [‎114r] (228/802)

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merchants, but was suspected by some to be a step in the direction of a monopoly.
Another effected important changes in the customs tariff. The third provided
for a 5 per cent, tax on rents, payable by the landlord, subject to an exception in
favour of owners occupying their own property. A separate notice published by
the Ministry of Finance made the Saudi silver riyal exchangeable for transactions
^“^with the Government at the rate of 20 to the English gold pound and effected
certain other changes in the currency system. On paper this meant a devaluation
of the riyal to half its former legal value of 10 to the gold pound, but as that rate
had long ceased to be effective, the change amounted to little more than a belated
adaptation of the previous legal situation to conditions already prevailing. For
a day or two there was emotion in Jedda and Mecca, but when it was discovered
that the stabilisation was for Government purposes only and that market
transactions were not affected, the emotion quickly subsided. The new riyals
(paragraph 48 of the last report) do not seem to have yet arrived.
89. There has been again much talk of new economic developments. A
concession for electricity in Jedda has been given to two local merchants who
appear to be in touch with M. Ydlibi of Manchester (paragraph 112 of the report
for April 1935).
90. This is the first recent occasion on which an important concession has
been given to local interests. The concessionnaires realise that they will need
foreign capital and technical assistance, but it is understood that the proportion
of foreign capital is to be limited to 45 per cent. M. Ydlibi himself arrived in
Jedda on the 29th March. His main objectives this year are to make a fresh effort
to secure the oil concession for the Koweit Neutral Zone, and to get the other oil
concession of which he spoke hopefully last year (ibidem) for the whole Red Sea
littoral. For the latter purpose he and his associates are now working on behalf
of Petroleum Concessions (Limited), a new company similar in composition to the
Iraq Petroleum Company.
91. Another notable concession-hunter is Colonel P. T. Etherton. of Central
Asian fame. He came out ostensibly in connexion with a scheme for organising
transport in Saudi Arabia, which was the subject of a puff preliminary in the
Times of the 10 th March. He seems to have, in fact, looked into the transport
proposition after his arrival on the 22nd March, but with unpromising results.
He has been pursuing larger ideas of an oil concession, apparently for the same
area as that which M. Ydlibi has in view, and a gold concession, apparently
outside the limits of the prospecting area of the Saudi Arabian Mining Syndicate.
As a side-line, he is interested in trying to market a curious weapon invented by
an officer who took part in the Mount Everest expedition, wdth which Colonel
Etherton was associated some time ago. Colonel Etherton professes to be repre
senting a powerful group in England, but little is known as to the true nature of
his backing. Although he came out under the auspices of Mr. Philby and was
that gentleman’s guest over the end of the month, their relations have been
singularly strained.
92. French groups, of which much less is known, are also interesting them
selves in Saudi Arabia. One known as Mekpel ran a large pilgrim ship, the
Sinaia, for North Africans in 1935 and again this year. They are understood to
be still interested in the Mecca-Jedda Railway project (paragraph 112 of the
report for April 1935) and in some sort of irrigation scheme. Fuad Bey told
Sir Andrew Ryan on the 30th March that a representative of another French
group was expected to visit the Farsan Islands in connexion with oil.
93. Meanwhile, the two established concerns, the Saudi Arabian Mining
Syndicate and the California Arabian Standard Oil Company, are still going
strong. Oil wells Nos. 1 and 2 in Hasa (paragraph 51 of the last report) had on
the 14th March reached depths of 2,655 and 1.207 feet respectively and an
encouraging showing of oil was discovered during the previous weeks’ drillino- at
well No. 1 .
II. —Frontier Questions and Foreign Relations in Arabia.
94. The negotiations between Saudi Arabia and Iraq were resumed on
Sheikh Yusuf Yasin’s return to Bagdad on the 26th March. Notwithstanding
the remarks by Fuad Bey quoted in paragraph 56 of the last report, they proceeded
with such celerity that the treaty, described as one of “ Arab Brotherhood and
Alliance ” was expected to be signed on the 30th or 31st March. There was a
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