مجموعة ٣٠/ ٢٢٤ "ترتيبات العملة في المشيخات العربية في الخليج الفارسي." [و‎‎٣‎٢] (١٥٧/٧١)

worried lest so vc action of the Government of the epublie of
ma y ‘n.jfie it dill icult for the ^-fulf ai^eas to obtain rupee
currency, rhe Company of course are thinking of their D&yrollB*
they do not want ever to be put in a position where they are
unable to pay tueir employees. ( f ihey hare had unfortunate
experiences in the pasl^ They feel eo stron ly that e new
currency must be introduced sooner or leter that they have
anticipated it by ordering .iacnines axxd accouiitinx forTiis to
conform to a deciaalieed rupee.
(VIII> Itie political i\esiaent has made the sugii:'stion that
a new currency for the Gulf might well include Aden, l am
not aware how far the plan to introduce last /ifrican Currency
Board currency to x.den has progressed, nut even il it were
possible to reverse these plans I am of the opinion that the
extremely bad surface communications between Aden and the Gulf
dtates would render a unified currency to cover i.den and the
Gulf it&te cumbersome il not impracticable. This idea, however,
is worth consideration. The rolitical esi&ent favours this TLaa
as it would be the means of retaining the KinjE 9 & he id on a
currency to be used in the Gulf. '
(IX; in concluding triis Chapter something should be said
on the probability of opposition arising from Arab merchants
and others to the displacement of the Indian rupee. They are
almost certain to regard such e displacement ae a tiu^eat to the
coniinuance of free gold end foreign exchange transactions - a
very profitable business.
as I understand the situation, such transactions would
oe threatened not by oiy act of prohibition that we may insist
upon but through technical causes, present, such transactions
particularly in gold, ar^ possible because tec ull aiici India u^e
tiie same currency. The 2 dian Exchange Control does not permit
banx; transfers to the Gulf except for approved purposes and gold
and exchange tranaactiona &ie not regarded as such. Ae a
consequence, Indian curi*ency notes are smuggled out and used in
payment in Kuwait or Bahrein ior gold or foreign exchange. With
tao displacement of the- Indian rupee from the Gulf by another
currency (and one given legal tender status; and with the • •
maintenance of prohibition of bank remittances from India except
for approved purposes, buyers in India of gold or foreign exchange
obtained in the Gulf would have no mean© of payment open to ...
The Arab merchants- in the Gulf who at present enjoy these free
markets are very astute people and they v ill not be slow to
appreciate this threat to their business t;n& having considerable
iiuleance with their own bheikh may oertuade hi & to opt for a
rejection of the plan.
It is for consideration whether in the event of a
decision to displace the Indian rupee special representations
should be made to each Sheikh with the object of convincing
them that a change in currency would be in the best general interests
of each Sheikhdom and ther fore eectioiu-1 opposition should be
uisre arded. If our advice to miike a change in currency la
rejected, it should be made clear, X suggest, that B. .G. disclaim
responsibility for any subsequent happenings to the Indian rux^ee.