Page 70 - Records of Bahrain (5) (i)_Neat

58 Records of Bahrain

Te legrara 5.
prom Political Resident, at Bahrain•
To Government of India, hew Delhi.
Repeated Secretary of State for India, London,

No. 1/113.
Dated the a±4*t March 1941.

X am having trouble over finance with Shaikh

who wishes to help family at expense of State Reserve. I
hope to overcome thiB but have juot discovered that whole
of reserve shown in rupees in budget is actually in sterling
and now amounts to 664 lakhB. Similary bulk of Shaikh’s

private fortune of 12 lakhs is in sterling loans. Of these
sums 19 lakh6 and 2. lakhs respectively have been
remitted since war broke out.
2. Undesirability of reserves in currency subject to

depreciation by exchaQge is obvious and ub they have been
built up at ‘our insistence Shaikh would expect us to make
good any loss. Moreover in view of possible damage to oil
fields they roust be readily accessible and not subject to

possible restrictions on movements of capital. Since
Government of India have repatriated very large sums of
capital I presume there will be no objection to Bahrain

transferring their investments into rupee securities and I
propose to advise them to do so.
3. I understand Government of India allow States to
invest in certain stocks v/ithout deduction of income tax and
would be glad of advice in due course as to what securities

I .should suggest to State.

- Resident.

V/.L.

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