In his syndicated United Features column, Marquis Childs examined the White House proposal that American and British companies, with the approval of the Iranian government, share responsibility for running the former Anglo-Iranian Oil Company.
An unidentified Justice Department spokesman is also quoted on the often gray area of U.S. antitrust laws.
WASHINGTON — Shortly before the political campaign took over the national stage a little drama, entitled “Can We Save Iran?” had been in the headlines. If anyone wonders what happened to Iran, it it still there. But the margin by which that unhappy country is intact and still open to Westerners has greatly narrowed. It is another of those more or less desperate problem children waiting on the White House doorstep for the new boss.
Anti-Trust Laws Ended Iranian Move
While practically everybody was distracted by the loud political noises, a most important meeting was held in the President’s office. Present were top-level security advisers, both military and civilian.
They had been called to consider a proposed plan for getting oil production started again in Iran. It was stopped last February which means, of course, that the Iranian government has had no revenue coming in to pay civil servants, police and the army. The shaky government of weepy Premier Mossadegh is living on the fat accumulated from the past while Mossadegh keeps on insisting that the British can never return to operate the Anglo-Iranian Oil Company.
The plan put forward at the White House meeting was for a half-dozen of the big companies — both British and American — to offer to pool their services and work for the Iranian government. Soundings had already been taken in Teheran and the reaction had been favorable. It appeared that such a pooling arrangement would ease Mossadegh’s mind of the overriding fear of domination by one company or one country.
ACCEPTED AS VETO
Top Defense Department officials, both civilian and military, were optimistic about this proposal. Even the State Department was moderately hopeful.
But present also was a spokesman for the Department of Justice. The Justice Department, said the spokesman, could not approve the plan since it would be a clear violation of American antitrust laws, which prohibit what would in effect be a cartel agreement. For the time being at least, this was accepted as a veto.
Department officials were reluctant to accept such a verdict. One of them expressed it this way:
“What you say about the wrongness of cartels may be true. But this is a very pressing situation in which the practical choices are extremely limited. Consider this matter of cartels in another light.”
“Certain scarce yet vital materials must be obtained for the national security from outside the borders of the continental United States. One of them is uranium. Suppose it was essential to enter into a cartel arrangement in order to obtain uranium. Would the Department of Justice then similarly exercise a veto, and in that event what would happen to our whole atomic program?”
This was taken as a rhetorical question. At any rate, no answer was forthcoming and the meeting broke up with no agreement en what to do about Iran.
Here is an issue that cuts in many ways both at home and abroad. One obvious reason why the Justice Department could not sanction such an agreement for Iran is that at the very moment the department is pressing anti-trust charges against leading American oil companies for entering into cartel agreements in their dealings in the Middle East. These charges being presented before a federal grand jury in Washington result from a lengthy study made in the department.
A similar study by economists of the Federal Trade Commission of cartel agreements in the international oil field was kept for many months under a top-secret label. Finally at White House orders it was reviewed by Secretary of State Dean Acheson, Secretary of Defense Robert Lovett and Mutual Security Administrator Averell Harriman. They, in turn, called for an appraisal from General Walter Bedell Smith, head of the Central Intelligence Agency.
Smith is said to have reported that the FTC study, if published, would cause harm to American relations in the Middle East. Some passages were deleted before the report was at last released. Much of the material had been publicized before and it caused little stir.
The antitrust laws, with their prohibition on cartels, are a peculiarly American phenomenon. The first great trust-buster was Theodore Roosevelt, and the effort to check industrial and financial bigness by law comes out of the era when the corporations were growing into giants. We may be about to see the end once and for all of that era.