April 28, 1951

Premier Quits as Iran Speeds Nationalization of Oil Fields
By MICHAEL CLARK
 TEHERAN, Iran, April 27 -- Premier Hussein Ala unexpectedly presented his resignation to Shah Mohammed Riza Pahlevi tonight on the eve of a special session of the Majlis [Parliament], which was expected to enact machinery tomorrow for the immediate nationalization of the Anglo-Iranian Oil Company.

The resignation of the ailing 68-year-old Premier became known after an emergency Cabinet meeting. Earlier Mr. Ala had conferred with the Shah and Sir Francis Shepherd, British Ambassador.

It was not known whether the resignation had been accepted by the Shah and consequently whether Iran was with or without a government tonight.

The Premier's decision to withdraw at this critical moment came as the climactic end of a tense day.

The day's sequence of events opened with an announcement that the Majlis would meet in extraordinary session tomorrow morning to consider the resolution of its Oil Committee calling for the establishment of a twelve-man governmental agency to take over the Anglo-Iranian company.

Briton Warns of "Consequences"

At noon Sir Francis expressed the hope that Parliament would not proceed to unilateral or precipitate action that would close the door to negotiation of the oil question and might have "very serious and far-reaching consequences."

It was too soon to speculate on the course the Majlis would follow in light of the latest development.

The most one could say was that the political situation here, already precarious, had become completely fluid and that a full-scale crisis had arisen.

The extraordinary session had been ordered by Reza Hekmatt, President of the Majlis, at the insistence of Dr. Mohammed Mossadegh, National Front leader and President of the Oil Committee.

Without waiting for its three-month mandate to expire, the Oil Committee had precipitated matters last night by unanimously approving a nine-point resolution designed to implement the decision of Parliament to nationalize the Iranian petroleum industry. The resolution referred to "the late company," meaning the Anglo-Iranian concern.

In the Majlis yesterday Dr. Mossadegh had warned Mr. Hakmatt that if he did not convene the Assembly as requested he would be responsible for "any incident that might break out." There has been widespread fear here that May Day would be the signal for serious disturbances.

All signs pointed to hurried parliamentary approval of the committee's resolution as no opponent of national mobilization had emerged in either house. The last man in the Iranian political arena to oppose nationalization was Gen. Ali Razmara, former Premier, who was assassinated March 7.

On the recommendation of the Oil Committee the principle of nationalization was unanimously approved by the Majlis March 8 and by the Senate March 20. The oil company had presented new proposals for increased royalties and profit sharing on the basis of equal partnership to the Razmara Government a few days before its fall.

The British Government, which holds a controlling interest in the Anglo-Iranian concern, has constantly taken the view that the company's concession cannot legally be terminated by unilateral action before its normal expiration date in 1993.

This view was reiterated by Sir Francis during the day. To the British Ambassador, the pending resolution looked like expropriation. He emphasized that the Iranian Government had been officially informed that Britain was intending to make further proposals in the interest of an equitable settlement.

Briton Supports Principle

"The principle of nationalization is not one we deny and we have been sympathetic to the aspirations of the Iranian people toward nationalization," Sir Francis said at a press conference. He added rather wistfully, however, that where a dispute existed negotiation and arbitration, too, were good principles.

Both British and United States diplomats here have exhausted themselves in an effort to make prudence prevail among the excited Iranian legislators and Government officials. United States circles strongly feel that if any mishap should overtake the Iranian oil industry the rearmament program in Europe might be seriously compromised. The Anglo-Iranian concern is supplying 43 per cent of Europe's petroleum requirements at present.

Referring to Article II of the nationalization resolution, which stipulates that 25 per cent of the current oil revenue, with operating expenses deducted, may be set aside for compensation to the company, Sir Francis noted that the company's only revenue in Iran was derived from local oil sales and that its expenses inside the country were far greater than its local revenue.

The implication of this was that in any case the sovereignty of the Iranian people did not extend to the company's holdings outside Iran--holdings that include all its complex transport and marketing arrangement. As Iranian oil is in close competition with oil from other sources the question arises as to whether Iran, though fabulously rich in oil, would be able to sell her most valuable product.

All these considerations were probably touched upon by Sir Francis in his conversation with Premier Hussein Ala. No new British note was presented to the Iranian Government during the day, however.

Ammunition Storage Depot Explodes

By THE ASSOCIATED PRESS

TEHERAN, Iran, April 27 -- As Premier Hussein Ala and his Cabinet met today, they received news that an ammunition storage depot had exploded today at Shiraz, 470 miles south of Teheran. Communications with Shiraz were cut off and no reports on the number of possible casualties reached here.

A spokesman at the Premier's office said the Governor General at Shiraz had reported that the ammunition blast had terrified the inhabitants and many had fled the city.

This added to the tension created by riots two days ago at Resht, in northern Iran near the Caspian Sea.