Page 127 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

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however found his terms too onerous and abandoned their proposal, and the
*^“**vi 11.0 luiiua iuu uiiciuu^ anu aoanuonea ineir prop
Ottoman Bank also appear to have lost interest in the matter. At the end of 1941
e end of 1941
the Imperial Bank of Iran (now the British Bank of the Middle East) obtained ..
a
concession from the Ruler for the opening of a branch in Kuwait(44a)
(Appendix O (i)). The agreement contained a clause to the effect that for a period
of 15 years the Kuwait Government would not permit any other bank to open a
branch in Kuwait. In 1946 this monopoly was extended by a further period of 15
years i.e. up to 1971 (Appendix O (ii)). A branch of the bank was opened in
Kuwait in February 1942. In 1949 the Ottoman Bank wished to open a branch
in Kuwait but had to abandon the proposal owing to the Imperial Bank of Iran’s
monopoly.(4”)
196. Early in 1952 the Ruler announced that he had decided to accede to
the request of a number of local merchants and to permit the opening of a Kuwait
National Bank under a charter for himself.(“4) He argued that this was not a breach
of his agreement with the Imperial Bank of Iran as that did not preclude the
formation of a local bank but only the opening of a branch by any other foreign
bank. Both Her Majesty’s Government and the British Bank of Iran and the
Middle East, as the Imperial Bank of Iran was then called, decided not to oppose
the project.^4*) The Ruler stated that he stood by his agreement with the British
Bank and undertook not to appoint a manager for the new Bank who was not
approved by Her Majesty’s Government^440) The Bank was opened towards the end
of year with a British manager, a board of nine Kuwaiti merchants and a capital
of Rs. 11 million.(44T) Up to the end of 1953 no report had been received to show
that its operations were conflicting with the interests of sterling or that there was any
friction between it and the local branch of the British Bank of the Middle East.

(g) Post Office
197. Before the First World War the Government of India maintained a Post
Office in Kuwait. During the war this was placed under the control of the Military
Postal Service in Iraq, and was connected to Basra by land-line telegraph. (44‘) On
the formation after the war of a Civil Postal Service in Iraq it took over control
of the Kuwait Post Office and of the land-line and continued to control them for
many years. Indian postage stamps were used and from 1922 onwards, except for
a brief period during the last war, bore the surcharge “ Kuwait.” When the
British Mandate in Iraq came to an end the Ruler desired that the Iraqi Post
Office and land-line should be removed from his territory but the Government of
India were not anxious to assume responsibility for the postal administration of
Kuwait and it was not considered practicable for the Ruler to administer his own
postal services. Negotiations with Imperial and International Communications
Limited for the establishment of a wireless station and the administration of the
post office proved infructuous and at the end of 1932 the Iraqi Government
suggested a general agreement whereby they would administer the Kuwait post
office, telegraphs and telephones for twenty years. The Ruler was willing to enter
into an agreement and suggested a number of conditions.(“") Negotiations
continued until 1934 when doubts began to arise in the minds of His Majesty’s
Government and the Government of India about the desirability of a long-term
postal agreement between Kuwait and Iraq and it was decided to let matters rest
for a year or two. In 1935 His Majesty’s Government started negotiations with
Cable and Wireless for establishing a wireless station at Kuwait and taking over
the Post Office. These negotiations continued for several years, there being much
correspondence about the rates to be charged, guarantees against loss and so on.
In 1936 the Ruler offered a free site to Cable and Wireless but refused to make
good any loss incurred in the running of the Post Office. Final agreement was
reached with Cable and Wireless in 1939 after the Ruler had made a number of
concessions to them (paragraph 204 below). The Iraqis were asked to hand over
the Post Office to them but demurred. When the coup d'etat occurred in Iraq m
1941 the Iraqi postal staff ceased to function and the Ruler at the Political Agent s
request asked them to hand over the Post Office to Cable and Wireless. I he
(44.) i.o. toF.O. Ext. 1551/42 of April 22. 1942 (E 2513/1342/91 of 1942).
(444) p.R. toF.O. 129/4/49 of March 28. 1949 (E 4377/11110/91 of 1949).
(444) Tei. from Kuwait to F.O. 65 of April 6. 1952 (E 11112/1 of 1952).
(444) p.R. toF.O. 11113/9/52 of May 10. 1952 (EA 11112/8 of 1952).
(44‘) Tel. from Kuwait to P.R. 75 of April 15, 1952 (EA 11112/3 of 1952).
(44T) P.R. to F.O. v,l i 13/21/52 of October 18. 1952 (EA 11112/13 of 1952).
(44‘) C.O. to F.O. 98038/32 of January 16, 1932 (E 277/96/91 of 1932).
(44#) I.O. to F.O. P’.£. 7062/32 of November 25. 1932 (E 6217/96/91 of 1932).