Coll 6/91 'Saudi Arabia. Policy of H.M.G. Qn. of credits and guarantee of assistance to Ibn Saud.' [‎216v] (433/680)

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loan to Turkey was a business transaction entered into because the exigencies o
the moment and considerations of self-defence demanded it. I he loan to
Ibn Baud was the loan of one friend to another who was temporarily short ot cash.
No guarantee had been asked, and questions of repayment, &c., were treated as ot
secondary importance, to be settled later. I thought that the King ought to teel
very pleased that within ten days of his asking for temporary assistance
£100,000 was offered. Sheikh Hafez knew that finances were not conducted m the
United Kingdom as they were here. The Secretary of State could not, as could
the King when he wanted to offer a present or a loan, dip his hand into a box and
produce the sovereigns. Revenue in England was contributed by the tax-payer,
who had an uncomfortable habit of wanting to know how his contribution was
spent. I hoped that Sheikh Hafez would be able to make the King realise that
the production, almost at a moment’s notice, of so large a sum was in itself a
remarkable proof of H4s Majesty’s Government’s readiness to help. He and the
King could interpret my note. It seemed to me that it meant that £100,000 was
the immediate response, and that more might be hoped for later if there was any
real need for it. I hoped the King would not refuse it. Sheikh Hafez said that
the King could see the scoffing references in the Arab press : “ Ibn Saud bought
by the British for £100,000." I replied that it was ridiculous, anyhow, to talk
about “buying,” as Ibn Saud was known to be on our side. \es, said
Hafez Wahba, but the Germans were prepared to pay £400,000 to have him on
their side, or so Khalid-al-Hud had told him. What the King wanted was a
credit for £800.000 to be open for the duration of the war and to be used as and
when required, repayment to be made after the war. It was not so much that he
had immediate need of this sum, but he wanted to be able to tell his people that his
friendship with Great Britain had resulted in his having something to fall back
upon in time of need. Pilgrimage receipts this year were bad; next year they
would be worse, and he did not want to have to be perpetually coming to us, £ ‘ like
a Bedowi with his hand out,” asking for small sums.
8. I told Hafez that I feared that, if we got up high among the hundred
thousands, the transaction might cease to be a transaction among friends, but
would become a business transaction. Awkward questions of security for the
loan, interest, repayment. &c., would have to be settled in advance. What would
be the King’s reaction if asked for security ? Turkey, whom they were so fond
of citing, had exports, raisins, tobacco. &c. I raised this point, as Mr. de Gaury
had told me that he thought the King expected a bargain.
9. I asked Hafez Wahba whether he thought the King could be induced to
accept the £100,000 if it were placed to his credit freely to use as he liked. I felt
that I was justified in the light of paragraph 4 of your telegram No. 10 in making
this suggestion. An alternative suggestion made by Hafez Wahba was that not
only the £100.000 food credit but the £85.000 arms credit which, on my own
showing, could not, at any rate for the moment, be used for the purchase of arms
in Great Britain, should be freed, and that to the resulting free credit of £185,000
£15,000 should be added, making £200,000 in all. It would be understood that the
assistance so afforded was for this year’s needs, and that it would be open for him
to submit for the sympathetic consideration of His Majesty’s Government an
application for help, if needed, next year. I asked why there should be magic in
£200,000 if £100,000 was so derisory a figure in the eyes of the outside world.
Hafez Wahba explained that the magic would lie in Ibn Saud’s ability to say to
his people that he had been given all the help he needed this year, and felt
confident that His Majesty’s Government would help him, if necessary, next year.
10. Hafez Wahba said that the real reason for the King’s statement to
Sir R. Bullard that he wished to await the end of the war before purchasing
arms was that in view of the publication of the amount of the loan to Turkey
he did not want news to get abroad that he was being offered so meagre a credit
compared with that given to Turkey. I repeated that it was unreasonable to
compare Turkey with Saudi Arabia in this connexion. If we were spending-
millions in Turkey there was, as I had said, a factor of self-interest. Turkey
was for the Allies an outpost, a bulwark against the spread of the area of
hostilities. The money was being spent not to help a friend in immediate need
but to secure our own defence. The loan could almost be classed as expenditure
on coastal defence. One could not conceive that Saudi Arabia would ever be
called upon to act as a bulwark against an invader. If it did, against all
present hope and belief, come into the war zone then, as I had informed His