Although the British Minister for Raw Materials (Mr. Stokes), [Lord Privy Seal Richard Stokes] who headed the British delegation, ended on August 22nd what may be termed the second series of oil negotiations with the Persian Government and all but a skeleton of the Anglo-Iranian Oil Company’s British staff has left Persia, the position does not appear to be so grave as the bare original announcement suggested. The British not only accepted the principle of Persian oil nationalisation but also agreed to the demand that the Anglo-Iranian Oil Company’s operations should be carried on by the Persian National Oil Company. It was made clear, however, that the present extensive British Staff would not carry on unless a British general manager were appointed. The Persian Prime Minister flatly refused that concession. [Dr. Mohammad Mossadegh]

On his return to Britain Mr. Stokes said that, although the talks had broken down, they had been conducted in an atmosphere of mutual friendliness and had done much to improve the understanding by each side of the viewpoint of the other. He was optimistic concerning the possibility of further negotiation but said that the next move must come from Persia—an attitude which has been endorsed by the British Government.

President Truman’s special envoy (Mr. Harriman) who, while oil his way home, attended a meeting of the British Cabinet, also referred to the improved atmosphere in which the latest talks had been conducted and was hopeful of the outcome for further discussions. [Averell Harriman] A report that he also advised the British Government against the use of force to protect the Anglo-Iranian Oil Company’s assets in Persia is merely in line with America’s earlier counsels of caution.

There is a tendency in some British circles to regard Persia’s Prime Minister (Dr. Mossadeq) as the villain of the piece. That is open to doubt. It is certain that the little sick doctor is carrying on in circumstances of extreme difficulty. His predecessor was assassinated, and shortly after his appointment the legislature granted his request to live in Parliament House, because he feared the same fate. [Premier Ali Razmara was murdered on March 7th]

Although obviously attempting to drive a hard bargain for his country, he is liable to be bitterly assailed by both sides in Persian politics. Early in the latest negotiations with Mr. Stokes, when an agreement appeared to be likely, he was violently criticised by the extreme nationalist section, one prominent member broadly hinting that if he made too many concessions he also would be “liquidated.” The Speaker sided with the critics sufficiently to instruct the Prime Minister to report to the National Assembly later in the week on the progress of the negotiations. [Majles, the Iranian Parliament]

He did so, and was given a vote of confidence. Only a few days later the oil negotiations broke down in circumstances already outlined. Again the Prime Minister was hotly assailed in the National Assembly, some deputies asserting that he had only received the confidence vote because settlement negotiations were going smoothly. The sitting ended in an uproar.

It has been suggested that Dr. Mossadeq’s stiff attitude towards Britain is explained by a belief that within a few months England’s oil necessities will compel her to agree to Persian terms. If that be so, he seems to be doomed to disappointment, as reports show that British and American oil interests have been and are co-operating so successfully that the cessation of the flow of petroleum products from Persia has not caused, and is not likely to cause, any notable dislocation in the oil trade of the world.