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(paragraph 91 above) but the war put a stop to the project. In 1947 they made
another move in this direction and in 1949 shortly before the Ruler made his
declaration of rights over the sea-bed in June they claimed that their concession
automatically covered it. When the Ruler would not agree to this they demanded
a reference of the dispute to arbitration and nominated an arbitrator.' The Ruler
failed to make a nomination and the matter remained pending until the end of
1951 when in the settlement reached with the Ruler over the sharing of profits the
company abandoned their claim to rights over the sea-bed, except for an area up
to three miles from the outward limits of territorial waters which the Ruler then
conceded to them (paragraph 95 above).
114. In 1949 one or two other companies showed an interest in the Kuwait
sea-bed but made no definite proposals to the Ruler. An approach to him for a
concession was eventually made by the Standard Vacuum Oil Company towards
the end of 1952 but he declined to grant one until the limits of his sea-bed had been
defined (paragraph 83 above).

(e) Neutral Zone Sea-bed
115. The Central Mining Corporation had some talks with the Saudi
authorities about a concession for the Saudi share of the Neutral Zone sea-bed in
1948(24‘) but nothing came of these. No declarations of rights over the sea-bed
pertaining to the Zone had been made by Kuwait and Saudi Arabia up to the end
of 1953 (paragraph 85 above) so that it has not yet been possible for the Ruler of
either country legally to grant a concession for it. In 1952 and 1953 however the
American Independent Oil Company were negotiating for an extension of their
concession for the Kuwait share of the Zone over the sea-bed up to a distance of
three miles from the outer limits of territorial waters (paragraph 110 above).

VI.—Relations with Other Countries

(a) Other Gulf States
116. The present Ruler is on good terms with the Rulers of all the Gulf
States except Muscat. He was on a visit to Muscat immediately before his
predecessor’s death and was annoyed by the regal attitude which the Sultan
adopted. His relations with the other Rulers are cordial but his frequent visits
to them and especially to Bahrain are coming to be regarded as rather an
imposition. There is a certain amount of friendly jealousy between Kuwait and
Bahrain.
(b) Iraq
(i) General
117. For most of the period under review relations between Iraq and Kuwait
have been strained. There have been frequent Iraqi incursions into Kuwait
territory, and some Kuwaiti incursions into Iraq, and there have been campaigns
against Kuwait in the Iraqi press and demands for its annexation to Iraq. The
main Iraqi grievance has been the smuggling of goods from Kuwait, where the
customs duties are very low, to Iraq, where they are high. On the Kuwait side
the main grievance, apart from Iraqi violations of the frontier, has been the
expropriation of the ruling family’s date-gardens in Iraq. It is unnecessary to
give details of all the incidents which have occurred and the protests made regarding
them. In nearly all cases the protests have been ineffective, and led to counter-
accusations.
118. In 1930 the Acting High Commissioner for Iraq recommended that His
Majesty's Government should aim at the gradual absorption of Kuwait by Iraq.
He was informed that His Majesty’s Government were of the opinion that the policy
previously followed should be continued, namely that Kuvvait should be
maintained as a protected State entirely independent of either Iraq or Najd.t ) in
1938 the Iraqi Government tried to argue that as they were the successor of the
Turkish Government Kuwait should be incorporated in Iraq (paragraph 43 above).
Tel from Jedda to F.O. 356 of October 30. 1948 (E 13990/72/91 of 1948).
(>») CO. to F.O 79171/30 M.E. of October 14. 1930 (E 5555/33/91 of 1930).