"ملف 61/11 IX (D 159) مسائل متنوعة خاصة بالحجاز ونجد" [و‎‎٧] (٣٩١/٢٤)

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this document is the property op his britannic majesty's government
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EASTERN (Arabia ). March 14, 1939.
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CONFIDENTIAL, I .1 ^ S ection 3.
^ | COMriDEi^TiAL K2C0uD3 j
*SzV ft. Bullard to Viscount Halifax.—{Received March 14.)
// . (No. 33 E.)
My Lord, Jedda, February 22, 1939.
'''\ I HAVE the honour to submit a brief report on the commercial side of
th e act ivities of the new German Minister to Saudi "Arabia on whose stay in
Jedda T reported in my despatch No. 29 dated the 18th February. ~ • 3 .
2. But for its poverty, which compels it to turn to the cheapest market, viz.,
Japan, Saudi Arabia is the ideal country for the German exporter, since its
exports are insignificant and it has free currency obtained from the pilgrimage
and from royalties on oil. The revenue from oil is at present small, but within
a short time it may be coming in at the rate of nearly a million sterling a year.
~~3: Saudi Arabia also suits Germany as a markef in that the King is very
anxious to establish a standing army, and that Germany is able "to supply arms
and^ammunition. We know from confidential sources that the German Minister
prornisecTto do his best to ensure the sale of arms to Saudi Arabia at low prices
ancToii easy terms of payment, and it may be assumed that his task will be
facilitafed by political considerations. So far, it seems, only Mauser rifles and
ammunition have been in question, but as the oil revenues increase, orders for
other munitions, such as guns and armoured cars, might well be placed in
Germany. - "Kel* • t v *
4. In my despatch No. 206'E. dated the 30th October, 1938, I reported on
a transaction by which Saudi lamb skins had been sold in Germany at a good
price on condition that the sellers bought German goods to twice the amount
which the skins realised. Muhammad Ali Riza, who effected this transaction,
stated at the time that this arrangement suited Saudi Arabia at the moment, but
might not always be convenient.
5. In his final visit to me just before his departure Dr. Grobba talked a
good deal about trade prospects. He admitted that the creation of a regular army
would give Germany an opportunity to tender for the supply of arms. He saw
only restricted opportunities for the use of the barter system with Saudi Arabia,
but hoped that Germany might take a larger share of Saudi exports of skins. He
said that the Saudi authorities had also suggested as suitable articles for barter,
millet from Jizan and dates from Hasa; but as Germany only wants millet for
fodder and dates for the extraction of spirit the prices she is likely to be able
to offer cannot be tempting unless politics is to take precedence of economics. I
have no special knowledge of the Hasa date trade, but I believe that the Hasa
dates, which ripen earlier than the dates in Basra, command a fair price as food
in India and Persian Gulf ports. But I am inclined to believe that the Saudi
suggestions about millet and dates were not very serious, and that such German
goods as are sold here will usually be sold for cash.
6. I am forwarding copies of this despatch to His Majesty's Principal
Secretary of State for Foreign Affairs in the Department of Overseas Trade and
to His Majesty's Ambassador at Bagdad.
I have, &c.
R. W BULLARD.
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[E 1881/735/28] Copy No. 10
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