August 11, 1952


U.S. and Britain Confronted By Dilemma on Help to Iran

By CLIFTON DANIEL
LONDON, Aug. 10--Statesmen and strategists in Washington and London are faced this week with a dilemma: Should they help the Iranian Premier, Dr. Mohammed Mossadegh, out of his troubles or let him drown in them?

If they do not rescue him, will Iran go Communist? Is there any alternative to Dr. Mossadegh on one hand and communism on the other?

Apparently the British Government has not yet answered those questions in its own mind. It wants to consult first with the United States and the Anglo-Iranian Oil Company, whose expulsion from Iran brought the country to its present precarious state.

According to reports from Washington, the mind of the Administration there is more nearly made up. The State Department, advised by the Defense Department, is represented as believing that the Tudeh (Communist) party may take control unless financial aid is given quickly to Dr. Mossadegh.

There will be an attempt by diplomatic officials this week to coordinate the views of the two capitals. The consultations probably will take place in Washington.

Decision on Offer Due

What the two Governments must decide is whether to take up Dr. Mossadegh's offer of last Thursday to enter into new negotiations with Britain on the claims arising out of the nationalization of Anglo-Iranian's properties in Iran.

Dr. Mossadegh demanded that the oil company hand over nearly £50,000,000 that it has been holding in a contingency account and that Britain cease blocking the sale of Iranian oil in world markets.

In brief, he asked for money--in very considerable amounts. His note to Britain acknowledged, in the form of complaint, that Britain's determination to protect her interest in Iranian oil had impoverished his country.

In addition to his demands for money and freedom to sell nationalized oil, Dr. Mossadegh proposed to enter into negotiations with the oil company--not the British Government--for a settlement of its claims and Iran's counter-claims.

Although that basis for negotiation is manifestly unacceptable to Britain and has been rejected before, the British Government now has to consider whether negotiations on any basis would not be preferable to national bankruptcy in Iran and whether Dr. Mossadegh's offer might not open the way for discussions on a broader basis.

It is worth noting that although the Iranian Premier's proposal was in itself unacceptable it was not rejected out of hand by the British Cabinet last week but submitted to further intensive study.

For Britain a decision to enter into negotiations with Dr. Mossadegh's Government on the basis suggested would be difficult. Questions of pride and principle as well as hard cash are involved.

More than a year ago the Iranian Government nationalized the Iranian oil industry, abrogating an agreement that was supposed to run until the end of the century, and set about evicting the Anglo-Iranian Oil Company from Abadan, site of the world's largest and costliest oil refineries.

Britain warned the Iranians that their action would bring them nothing but bankruptcy, that they could not operate the refineries without British technical assistance and that they could not sell their oil without British tankers and marketing facilities.

For the past year the British have been proving their point--with a vengeance.

Wavering only occasionally, they held to the opinion that Dr. Mossadegh eventually would be discredited by the financial failure of his policy and he would be replaced with someone who would be willing to do business with Britain. Their policy appeared to be paying off when the sly but eminently practical Ahmad Ghavam was appointed as Premier in place of Dr. Mossadegh.

Brief Moment of Triumph

But the moment of triumph was a moment indeed. Nationalist mobs, aided by the Communists, drove Ghavam out of office within forty-eight hours and put Dr. Mossadegh back with greater power than ever.

After that Dr. Mossadegh had to be taken more seriously. London promptly did so, hoping that the Premier's financial straits and his new found political strength would make him more willing and able to reopen negotiations.

Last week they found him willing--on his own terms--but they still doubted that he was able. His strength seemed to be on the wane once more.

Thus the British were confronted with a multiple dilemma: Should they deal with Dr. Mossadegh or keep on waiting for the next man?

Would the next man be any better? Might he not be the nominee of Moscow?

Should they give in to Dr. Mossadegh, sacrificing principle and policy, accepting the nationalization of oil and trying to salvage what they could from the wreckage of their great investment?

Should they let Dr. Mossadegh have a victory to save his face and perhaps save Iran from ruin and revolution?

Even if they should consent to negotiate would it be possible to reach an agreement that not only would dispose of the pending claims but also put the Abadan refineries back to work and start Iranian oil flowing again to the markets of the world?