مجموعة ٣٠/ ٢٢٤ "ترتيبات العملة في المشيخات العربية في الخليج الفارسي." [و‎‎٩‎٧] (٦٢٠/٢٠٠)

Outward Telegram from Commonwealth Relations Office
EXTERNAL DEPARTMENT (B)
CYPHER (O.T.P.)
POLITICAL RESIDENT IN THE PERSIAN GULP
(bent: 19.20 hours, 21st February 1948)
IMPORTANT
7 —
No*56 . TOP SECRET .
My immediately preceding telegram. Following is top
oecret oil 1 a.m. G.M.T. Sunday, 22nd February after which it
is for your guidance in reply to enquiries. Text of 2 Press
statements to be released at that hour follow by bag.
The short explanation of this action ^is that membership
of the sterling area necessarily implies, the existence of local ‘
exchange controls which are in a position'to carry out efficiently
a policy regarding expenditure outside the sterling area generally
similar to that of the U.K., and inspired'by similar motives of
common interest. While H.M.G. have complete confidence in the
present Palestine Exchange Control, they can at present have no
such confidence that the successor States will be in a position to
create and maintain such controls, so as to ensure against
excessive drawings on the gold and dollars which form the control
resources of the sterling area. As regards the sterling
balances, exclusion from the sterling area would not of itself
nffect Palestine’s freedom to spend her sterling within the
area. For your own information the sterling balances have
declined from £115 million to £98 million between June and end of
November 1947, and it seemed likely that the rate of expenditure
would increase during the period now approaching. This would
impose an intolerable burden on the productive capacity of the
sterling area and particularly of the U.K. Moreover the
dissipation of the balances in this way would not be in the true
t
interests of Palestine herself.
/3. Transjordan