Latest information indicates that the breakdown of the Anglo-Persian oil negotiations in Teheran on August 26, [August 22] and the departure of the British delegation do not mean a deadlock so complete and serious as at first appeared likely.

The British Government not only accepted the principle of Persian oil nationalisation, but agreed to the Persian stipulation that the Anglo-Iranian Oil Company’s operations in Persia should be carried on by the Persian National Oil Company. [National Iranian Oil Company] It was made clear, however, that the present staff of key British technicians would not carry on unless a British general manager was appointed. Dr. Mossadeq, the Persian Prime Minister, flatly rejected that condition.

When he reached London, the Minister for Raw Materials Mr. Stokes, who headed the British mission, said that despite the deadlock, negotiations had been conducted in an atmosphere of mutual friendliness and had done much to improve the understanding by each side of the other’s viewpoint. [Richard Stokes was also Lord Privy Seal] He was optimistic concerning the resumption of the negotiations, but said that the next move was up to the Persians, an attitude which has since been endorsed by the British Government.

Mr. Averell Harriman, President Truman’s Special Envoy, whose skilful [sic] mediation made the latest talks possible, expressed similar views when he attended a meeting of the British Cabinet on his way home to Washington, and was hopeful for the resumption of the discussions. He is also reported to have advised the British Government against the use of force for the protection of the Anglo-Iranian company's Persian assets—which is in line with previous American counsel.

In British circles there is a tendency to believe that there is little chance of a settlement, so long as Dr. Mossadeq remains at the helm in Persia. But despite the hard bargain which he is obviously seeking to conclude, the difficulty and danger of his political position should not be overlooked. His predecessor was assassinated, and shortly after he assumed office he sought and obtained permission to live at Parliament House because he doubted his safety outside.

He is liable to the most severe criticism from both sides of the Legislature. Early in the latest negotiations, when they were proceeding smoothly, he came under heavy fire from the extreme Nationalists and one deputy suggested that his assassination might become necessary. On August 22, however, he received a vote of confidence from both Houses.

Since the breakdown he has been bitterly accused by both deputies and senators, who contend that his responsibility for the rupture amounts to a contravention of the confidence vote accorded him.

Dr. Mossadeq appears to believe that time and oil needs will force Britain to accept his terms. Actually, however, it is reported that British and foreign oil interests have cooperated so closely and effectively that the loss of Persian oil supplies will make little disturbance in the normal marketing and consumption of petroleum products.

On the other hand, however, her loss of oil revenue already has caused large-scale unemployment in Persia. This is bound to grow, and unless the Mossadeq Government becomes more compromising its fall would seem probable.