IRAN: No Deal

Harry Truman and Winston Churchill made another—and belated—effort to do business with Mohammed Mossadegh, the wily, weepy old man of Iran. London and Washington are now much less worried by the loss of Iranian oil (mostly made up from other Middle East sources) than by the increasing danger that Iran, strife-racked, almost bankrupt, and near chaos, will topple into the Red fold. The U.S.-British offer, which had obviously cost the U.S. much diplomatic sweat and the British a lot of pride:

¶ The British implicitly, if not formally, accepted Iran’s oil nationalization.

¶The British agreed to negotiate with the Iranian government on possible distribution and sale of Iran’s oil—as Mossadegh requested last month.

¶ The British would buy the oil now stored in Iranian tanks—valued at $20 to $30 million—although Britain had previously claimed that this oil rightfully belonged to it; the exact price to be settled later.

¶ Britain would lift its ban on exports to Iran, and unfreeze Iranian sterling holdings in the Commonwealth.

¶ The question of how much compensation the Iranians would pay the British for the Anglo-Iranian Oil properties would be submitted to the International Court at The Hague. (This matter involves the question as to whether or not past British operations in Iran were legal. Since Iran bases its case on the proposition that they were not legal, Iranians stubbornly refused to let this point be arbitrated.)

¶ The U.S. offered a $10 million bonus (i.e., an outright gift) contingent on Iranian acceptance of the deal.

Six months ago the offer might have worked. Last week, it did not: Mossadegh turned it down flat.

Apparently the chief reason for Mossadegh’s refusal was the fact that he wasn’t offered enough money. He reportedly wants $100 or $150 million, and without any strings or conditions attached that would shake his none-too-sure political position at home. The U.S. and Britain must either meet Mossadegh’s minimum price, or get his price down. So far, they have done neither. U.S. and British diplomats were saying last week that the West has done its reasonable best, and that Mossadegh is a perfectly unreasonable fellow. That did not change the facts that 1) the negotiations have broken down, and 2) their breakdown marks a decisive U.S.-British diplomatic failure.