RETURN OF THE SHAH of Iran from a week’s exile and establishment of a government apparently somewhat less fanatical than that of the deposed Premier Mossadegh give western powers an opportunity to show just how vital is the stability of this key to the Middle East.

The Shah looked into the national treasury when he came home and found, as was expected, that the cupboard was bare. The mystery has been how Mossadegh held Iran together for the two years since he seized the British-owned oil industry, Iran’s only visible means of support.

That mystery was cleared somewhat—though there is a chance that the disclosures were aimed to discredit Mossadegh—by the revelation that his government had dipped deeply into the civil servants’ retirement fund and cash reserves of government-owned enterprises to pay current bills.

NOW THE SHAH SAYS that Iran is in imperative need of financial aid from some foreign source, not in months or weeks but “in a matter of days.” That is, the August payrolls have to be met. He was careful to add that no “concessions” would be made in exchange for aid.

A realistic policy must accept the view that anything that could be construed by the Iranian people as yielding to British pressure or as relying upon American patronage would soon revive the popular fanaticism that Mossadegh exploited. If the stability of the Middle East matters most, two points seem obvious in these circumstances.

1. Britain must put no obstacles in Iran’s way and should withdraw the oil blockade which it has maintained since nationalization. This would mean forgetting, at least until Iran sobers up, the British financial losses in the Iranian oil fields.

2. American cash aid would both be unwelcome and a temporary remedy at best.

GIVING IRAN A CHANCE to earn its way by lifting the blockade would be a long step toward stabilizing the country. But it should be noted that this would not be all gain. As The Financial Times of London says:

“The truth is that there is no room in the world oil market for the 30 million tons that Persia, (Iran) could produce. Room could be made for it only by cutting back production elsewhere, which would touch off political problems just as explosive as any Persia has to offer. Indeed, it seems that Persia’s problem can be solved only by creating fresh political resentment somewhere else.”

Nevertheless, the solution is not a matter for an international oil cartel to settle.

The stability of the Middle East is the main point. That matters more than preserving the oil production and marketing arrangements that were hastily devised when the Iranian supply was abruptly cut off.