'File 8/2 Smuggling of Gold' [‎62r] (123/488)

office of the loiiticai iieeiuei.t
in the Pereian Ouif»
BAhillAlH 9 XDth Haroit lW4y.
»ron - ?ha Hon*)>l* l.l«ut.-Ool. V.R. Kay,
J^olitioel leeicient in the Feraian Vulf,
To • The Seoretary to the 'Jovomnont of indie
in Uie External Affaire Po^artmentt Mee PeXhi*
— — - —- — — — ^ w w
Poiitioai Agent» hahrain'e ixpreaa better Ho*0/2wa t dated
i^th Maroh le42 v to the PoXitioal Heeldent t 1 enoloeare*
PoXitieeX Agent, Ku«ait f a Xetter xo«a/X09«-B/2, dated 7th
February X942, to the Collector of Cuetoae, laraolii.
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. , Kuwaiti Xetter xo.2b-B/2 9 dated the 7th
February X942, to IUH. The Ttuler of hueait.
K«H« The Jluler of Kuwait*e Xetter Ha,H/6/16 f J3, dated the
9th Feoruary 1942, to 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. , Kuwait,
v^'
Sir,
With reference to your tclogruia ho,X2hb, bated the 19th
February 1942, X iiare the honour to forward herewith oopiee of the
marginally noted
oewusun teat lone and
to etate that 1
have recently
dleoueeed the move-
men ta of gold and Oliver with Hie Kajeety 9 e Ambaoeador, haghcad.
Hie Uaoeety*e ktlnieter^ Jedda and the Political Agents, Bahrain
end J&uwait,
2, The eallent facte arc as follawei-
(a) a continuous stream of gold Is being exported from
Haudi Arabia to Iraq, and
(b) there is a oontinuoue drain of rupee coins from
Hunr&in and Kuwait,
With regard to la) it *>**»% l think be aaoa«ed moot of
tiie gold exported from Baud! Arabia came originally from indie in
the shape of remittances in gold made to the Saudi Arabian govern
ment, It is also believed that large quantities bf gold ere being
smuggled out of indie mostly from the Kathiawar coast. This
smuggled gold probably reaches Iraq direct or via Kuwait and there
appear« to be no good reason why it should travel via Saudi Arabia.
4* The rupee coins which leave Bahrain and Kuwait in such
large quantities are it ie believed used for t)ie purchase of gold
from Saudi Arabia, Tho situation is such in Kuwait tnat rupee
notes are on).y accepted in the basaar at a discount of two annas
in the rupee. The branch of the imperial Bank of Iran whieh has
recently been established there but which has not yet been opened