‘File 2/32 ACQUISITION OF PERMANENT AIR FACILITIES’ [‎113r] (225/338)

Ext. 500VU-.
PERSONAL AND SECRET
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. ,
WHITEHALL,
LONDON, S.W.1.
^^November 1 944.
Dear Prior,
You will no doubt be wishing to know her,7 things have
progressed with regard to Masirah Island.
The matter has unfortunately been considerably held up here
in the first place as the result of certain objections put forward
by the Treasury, particularly to a lump sum payment in the case
of outright purchase, in view of the considerable financial
difficulties ./ith which H.M.G. are confronted as the result of
the large sterling balances now held by Middle Eastern
countries. The Foreign Office and (in particular) the Colonial
Office have also been somewhat exercised by the effect which
outright purchase might have on the Americans, the Colonial
Office having in mind the question of the West Indies bases
which certain prominent Americans have been suggesting should
be purchased outright by the U.S. Government. The Colonial
Office also found recently that they had objection to the
retrocession of the Nuria Murias on the grounds that to give
them up with the few inhabitants they may possess might prove
an awkward precedent in other more important spheres.
We have ourselves considered these objections to be somewhat
exaggerated, and have continued to urge the advantage of purchase
over lease or the ground that the former would much simplify such
problems as jurisdiction and control over the inhabitants of
Masirah. We have, however, not felt able to press this very far
in view of the preference of the other interested departments
for lease, since of course the proposal is primarily an Air
Ministry one and H. M. G. are to pay. We have however suggested
for consideration the possibility of the insertion in the lease
contract of an option to. purchase at a later date.
The position nor/ - is that it is expected that a paper will go
forward before long to the Cabinet (l hope within the next three
weeks or so) proposing lease rather than purchase, but at the
same time allowing you discretion within limits agreed by t he
Treasury to exceed the figure of half a lakh One lakh is equal to one hundred thousand rupees , if necessary, and
also to vary the incidence as between annual payment and initial
lump sun, so that if the Sultan prefers it, he may have a larger
sum cash down and a smaller sum annually. The idea of using the
Kuria Muria Islands as a bargaining counter is now probably to be
ruled out, while the Sultan is to be offered definitely the
retention of oil royalties on Masirah. You will of course be
receiving instructions in due course by telegram, but when that will
be I am ^afraid I-am still unable—to estimate witH any degree of
accuracy.
I am sending copies of this letter to Caroe, and also to
Galloway, who, as you may know, saw our papers while he was on
leave here, and attended an interdepartmental meeting on the
subject.
The Hon’ble Sir Geoffrey Prior,
K. C. I.E.,
The Residency An office of the East India Company and, later, of the British Raj, established in the provinces and regions considered part of, or under the influence of, British India. ,
Bushire.
Yours sincerely,
(Sgd.) R* PEEl*