Page 24 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

11
the buoying of the channel to Ras Tanura.(7?) In 1947 they objected to the erection
of a light beacon on Farsi Island which they claimed (chapter 3, paragraph 65).
In 1951 a proposal which they made for the erection by them (i.e., by the Arabian
American Oil Company) of six lights to mark the Ras Tanura channels was agreed
to on the understanding that this would not be treated as establishing the ownership
by them of the sea-bed concerned and that they would raise no objection to the
replacement of the light on Farsi Island by a more powerful one(7‘) In 1953 the
service agreed to comply with requests received from the Saudi Government
Railway and the Arabian American Oil Company for the servicing of lights
belonging to them on the understanding that the servicing of their own navigational
aids would take precedence and that they would be indemnified against any possible
claim arising from operations carried out on behalf of the railway and the oil
company.(”)
33. The Californian Arabian Standard Oil Company (later the Arabian
American Oil Company) agreed to pay for the servicing of buoys which the service
was asked to instal in 1938 but were unwilling to pay a general contribution to the
service’s fund in India until the concurrence of the Saudi Arabian Government had
been obtained. That Government at first proposed a formal agreement between
themselves and the Government of India on the subject but in 1944 agreed to the
matter being arranged direct between the company and the service,(76) and a lump
sum contribution was in due course recovered from the company. In 1948 when the
Arabian American Oil Company were asked to pay regular light dues on the
shipping calling at Ras Tanurah, for which they acted as agents, they thought it
might be necessary to consult the Saudi Arabian Government before complying
with the proposal.(7T) It is not known whether such consultation took place, but no
further diffculty arose and in 1953 dues were being recovered from owners of ships
visiting Ras Tanurah and Dammam by either the London office of the Service or
Messrs. Gray Mackenzie and Company at Bahrain.
(b) Currency and Exchange Control
34. The currency in general use in the Persian Gulf States is the Indian rupee.
In Muscat the Maria Theresa dollar is also current and in the interior it is the only
currency which is acceptable. There is also a small coin called the baiza. The
Sultan in 1948 had a number of these minted and attempted to regulate their rate
vis-a-vis the Indian rupee and the Maria Theresa dollar (chapter 6, paragraph 111).
Apart from this there is no local legislation regarding currency in any of the Gulf
States and there is nothing in the nature of legal tender. In 1947 the status of the
rupee as the principal circulating currency of the Gulf was described by the
Government of India as a purely commercial one and the banks were stated to have
no statutory connections with the rupee or obligations in relation to rupee
currency.f8) The British banks in Bahrain, Kuwait, Dohah, Dubai and Muscat
and the Kuwait National Bank in Kuwait are ordinarily the only means of
exercising any control over currency and exchange and have always shown
themselves willing to co-operate with Her Majesty’s Government in dealing with
these matters.
35. Territories within the sterling area as defined by the Defence (Finance)
Regulations issued at the outbreak of the Second World War and “ Scheduled
Territories ” as defined by the Exchange Control Act of 1947 included “ any British
Protectorate or British Protected State.”(79) This definition covered all the
Shaikhdoms but not Muscat, which has however been treated as administratively
within the sterling area. The consent of the Rulers concerned to this arrangement
was never sought but in 1947 the Commonwealth Relations Office considered that
it nught perhaps be implied, as they had made no complaints against the operation
of foreign exchange restrictions.
36. At the end of 1947 a suggestion was made that the Persian Gulf should
uS nWin- currency but was not seriously considered at the time. In April
iv48 the Pakistan Government began to issue its own currency. The banks in the
C2 TCLfromlJ5?da^° F0- 131 of September 14. 1938 (E 5423/453/91 of 1938).
JJ rcida i0J-°- of January 9. 1952 (EA 1402/4 of 1952).
<f) tf-0- to P.R. EA 1401 /6 of June 15. 1953.
)..{ hO- to F.O. Ext. 5308/45 of November 2. 1945 (E 8470/1455/91 of 1945).
L\ i°ctober22- l94« (E 14388/175/91 of 1948).
L! £ P-O. Hxt.973/4 of May 7. 1947 (E 5912/1540/91 of 1947).
t ) C.R.O. to F.O. U.n. of January 5. 1948 (E 278/115/91 of 1948).