October 20, 1952 — The Sydney Morning Herald
The Sydney Morning Herald in Australia firmly objected to Iran’s plans to cut diplomatic relations with the British in this vintage 1952 editorial.
West Must Resist Oil Blackmail
Even so loyal a supporter of Dr. Mussadiq’s oil policy as the chairman of the foreign affairs committee of the Persian Parliament has been moved to protest at the fatuity of the Prime Minister’s decision—not yet implemented—to sever relations with Britain. Internationally, such a move could do nothing to further Persia’s cause, and would plainly inconvenience Teheran far more than London. Its explanation must probably be sought in Dr. Mussadiq’s need to placate the fanatically anti-compromise element, led by the Mullah Kashani and cheered on by the Communists, which is challenging his control of the National Front.
Such an explanation is consonant with the backing and filling that have been a puzzling feature of Dr. Mussadiq’s handling of the latest negotiations with the West. Whatever its motive, the Prime Minister’s decision seems to destroy any lingering hope of a reasonable settlement. Hope, in any event, was at vanishing point when Dr. Mussadiq’s bazaar diplomacy culminated in a barefaced attempt to blackmail Britain into handing over £49 million, in two instalments, [sic] as the price of discussions on compensation for the A.I.O.C.’s losses.
[The £49 million sum (U.S. $137.2 million) was what the Anglo-Iranian Oil Company owed Iran for withheld royalties and back taxes]
This suggestion was the more outrageous because Dr. Mussadiq had made it clear that Persia rejected in advance the company’s main claims for losses resulting from oil nationalisation, and would consider compensation only for the installations taken over. A further condition was that Persia must be recompensed in full for revenue lost through the British embargo on the sale of oil.
Plainly, such one-sided terms amount to a rejection of the generous Anglo-American offer of August 30. Britain has gone to the limit of concession—and perhaps even beyond it. Dr. Mussadiq’s attempt to tighten the screw still further cannot be allowed to succeed. Were he able to extract not only recognition of the act of expropriation but a handsome subsidy into the bargain, the effect on British prestige in the Middle East, already badly shaken, would be disastrous.