Evening star., 1951-09-02
Ironion Deadlock
If the Oil Controversy Isn't Resolved Soon
Mossodegh Will Suffer Monetary Woes
By Creston B. Mullins

Iran enters another week of dead
lock in the oil controversy with the
prospect that she soon will feel the
financial pinch of failure to reach
agreement on the future of the vast
oil properties.
Negotiation of some kind of set
tlement of the dispute which grew out
of Trans naturalization of the prop
critics of the Anglo-Iranian Oil Co.
reached a new low last week, with the
parties completely estranged and
even mediation abandoned-at least
for the presently the United States.
As things stand, Iran has decreed
naturalization of the AIOC'S extern
sive oil fields, the Abadan refinery
and the companyS port facilities.
The oil fields have been taken over,
and while the refinery remains in
British hands, 'AIOC intends to re-
move all but about $50 caretakerS
from the worlds biggest refinery.
When discussions broke down last
week, Britain'S Richard Stokes and
the American trouble-Sh shooter, w.
Averell Hartman, left Teheran. Pre-
mier Mohammed Mossadegh was left
to wonder how he would carry on the
government, without royalties from
Anglo-Iranian.
SoIories Moy Stop
With the departure of British
technicians, the Iran government
faced the prospect that AIOC soon
would cease paying native workers,
who continued to receive their pay
through the end of August despite
the fact that the AIOC has produced
and marketed no oil for weeks.
How long the company will con-
tinue to pay these workers is ques-
tionable Certainly AIOC cannot
keep it up indefinitely without oil
production. The payroll amounts to
millions of dollars month. 1t must
end at some point.
Iran has taken steps to meet the
problem, but they are painful, for
they could set off financial chain
reaction which, together with other
aggravating factors, could lead to
economic disaster for the Shah's
kingdom.
The MosSadegh government has
halved the sterling backing for the
currency-a not unusual device which
will double the money in circulation.
Such currency system, however, is
possible only for governments like our
own, whose money enjoys high con-
fidence throughout the world, or like
the Russians, which fixes its cur
rency by fiat.
Will 1t Work?
The new money will go in part to
pay oil workers laid of by AIOC.
But the question for DR.. MosSadegh,
and every other Iranian politician, is
how long this can continue without
financial and economic collapse.
Iran could solve her problem by
agreeing to terms of the latest Brit
ish proposals, which Mr.. Hartman
has approved as just and equitable.
In fact, DR.. Mossadegh came under
some criticism in the Mails (parlia-
ment) and some parts of the press
last week for his failure to solve the
critical situation. But he is still in
q strong position within Iran, whose
nationalistic elements are violent in
their demand that no Semblance OF
the Anglo-Iranian Oil Co. remain in
the country.
The British proposal, in essence
is to create two new companies
to work with Iran in exploiting it's oil
resources. One would be a produc-
tion corporation, completely stated
by British personnel working un-
der q contract with the Iranian