Coll 30/5(3) 'Persian Gulf Bahrain Residency Monthly Letter - Summary of Events' [‎4r] (7/194)

Exchange for imports from soft currency countries can only be
obtained on certificates of recommendation from the Political
Agents issued with the prior approval of 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. .
At Bahrain and Dubai where there are banks there are no rest
rictions on the conversion of rupees Indian silver coin also widely used in the Persian Gulf. into sterling and conse
quently there is no control over imports from the sterling area.
In Kuwait owing to a misunderstanding of instructions a cert
ificate of recommendation from the Political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. is still
required^before rupees Indian silver coin also widely used in the Persian Gulf. can be converted into sterling, and this
restriction has been allowed to stand pending further instruct
ions from His Majesty's Government. In Muscat wh^re there is
no bank trade, as previously reported, is at a standstill owing
to restrictions imposed by ,the Reserve Bank of India under which
the Muscat merchants who are nearly all Indians cannot operate
on their accounts in India without the specific sanction in
\ each case of the Reserve Bank. During my recent visit to
Muscat I interviewed deputations of leading merchants who
pressed that either the restrictions should be removed or that
a bank should be opened in Muscat. A representative of the
Eastern Bank is to visit Muscat in January to examine the
possibility of opening a branch there. Amongst other rumours
of a financial nature which the Muscat merchants produced was
one that the Government of India propose to remit all their
balances in India to the Muscat Treasury. The currency situat
ion at Muscat is peculiar. The local currency in the interior
is.the Maria Theresa dollar and all local products have to be
paid for in this coin. There are only about 5 lakhs One lakh is equal to one hundred thousand rupees of rupees Indian silver coin also widely used in the Persian Gulf.
current locally but 22 lakhs One lakh is equal to one hundred thousand rupees are locked up in ihe Government of
India Treasury and an even greater sum is believed to lying
moribund In the Muscat State Treasury.
(r Arrangements are being made for the Gulf States'
requirements of sugar to be obtained in future from the United
There is a surplus of this commodity in most parts
of the Gulf at present and it has been possible to remove price
control in Bahrain. There is however a serious shortage at
Muscat where the annual quota for the last few years has proved
insufficient. .It may be possible for Muscat to make up its
immediate deficiency from a surplus which exists at Dubai if the
price demanded for it by the Dubaj^ood Company is not too high.
^ There is a serious shortage of meat at present at
ahram due to a stoppage o f ’ imports of livestock from Persia,
it is not clear whether this stoppage is seasonal or due to
action by the Persian authorities.
Mr * Pennycuick a representative of Messrs. John Birch
ana Company has visited Bahrain during the month. The firm
has already established a branch in Bahrain and it is proposed
in due course to maintain a fairly large staff there for the
purpose of providing engineering services throughout the Gul^
States.
BAHRA IN.
■p , , ^ As already mentiored disturbances took place in
Bahrain during the three days December 2nd to 4th as a result of
tne u.N.O s decision to partition Palestine. It appears that
certain agitators decided to follow the example of Arab States
lu Eas t in calling for a three days strike and that
one Bahrain Government were taken by surprise. On the first
day the schools opened in the morning but some bovs in the
kiuharraq schools managed to :all out all the students there and
a party oi them came to Manama and persuaded the schools there
o close also. The boys find others paraded about the streets
tti ^ process ion and amongst o'sher things broke the windows of the
pastern Bank where there are a number of Jewish employees. The
nn Z ?v? r S losed throughout this and the subsequent two days,
un the 3rd December the Shnikh ordered the closing of the schools
/and there- j were...