Hamilton Butler — March 25, 1951
| The Mossadegh Project | January 6, 2025 |
A column on Britain and Iran by Hamilton Butler (1882-1953), a Far East expert and former interpreter in China. Butler wrote for The Detroit Free Press since 1928.
March 25, 1951
The Detroit Free Press
Iran and Oily Semantics
BY HAMILTON BUTLER
The unanimous vote in both chambers of Iran’s parliament in favor of nationalizing its oil industry embarrasses the British Labor Government in more ways than one.
The Government holds a majority of the stock in the
Anglo-Iranian Oil Co., which virtually monopolizes the output of
Iran’s wells. The AIOC is a gigantic octopus, with assets valued as high as $1.4 billion, whose tentacles reach far beyond Iran’s borders.
The cancellation of its concession and the expropriation of its properties, which would follow from the
nationalization of Iran’s oil industry, would
liquidate another of the lucrative external investments from which in the past Great Britain has derived a rich income.
THE ATTLEE Government’s embarrassment is increased by its not knowing what to do to avert this calamity. [Premier Clement Attlee]
When there were disorders in the oilfields in 1946, the British rushed troops from India to Basra in Iraq and threatened to send them into Iran to protect Anglo-Iranian’s properties. They would not consult the United Nations. They
would act under the self-defense provisions of the Charter. Any attack on British property or subjects was then defined as “an attack on Britain herself.”
The 1946 trouble was caused by dissident elements in Iran’s jumbled political situation and the British could argue that international law gave them the right to protect their interests if the Iranian Government was impotent to do so.
THE PRESENT case admits of no such argument.
The Iranian Government itself now threatens to exercise a power inherent in its sovereignty to nationalize its own property.
The Labor Government that has nationalized Great Britain’s coal, gas, steel and other industries must either admit or deny that what is sauce for the goose is also sauce for the gander.
Yet it tries to duck this dilemma by declaring in a note to Teheran:
“A clear distinction must be drawn between the principle of nationalization and expropriation of an industry which has spent enormous sums of money and which has been operating on the basis of an agreement valid until 1993.”
The distinction here drawn is as clear as a London fog.
The British steel industry also had spent enormous sums of money and was operating on the basis of a perpetual agreement with its stockholders.
Yet the British Government seized it, against its bitter protest.
The distinction between what the British Labor Government did to British coal, for instance, and what the Iranian Government proposes to do with Iran’s oil sounds a lot like FDR’s statement that we needn’t worry about our national debt
because “we owe it to ourselves.” [Pres. Franklin Delano Roosevelt]
YET IF THE Tories were in power they would probably howl louder at this twisting of the Lion’s tail than the Socialists have.
At least they did in 1938, when Mexico nationalized its oil industry. The Chamberlain Government said it was illegal and broke off diplomatic relations with Mexico. [Premier Neville Chamberlain]
American oil properties, as well as British, were expropriated in Mexico but Secretary of State Cordell Hull didn’t get excited. Any state has a right to seize properties, was the way he put it, if it compensates the owners promptly
and adequately.
A strange fact will meet Foreign Secretary Morrison’s eye if he opens the FO’s files for 1922. [Herbert Morrison] There he will find a note to the French Government in which his own predecessor
anticipated Secretary Hull’s dictum. I quote:
“Every state has the right compulsorily to acquire private, property, whatsoever its nature, on payment of just compensation.
Whether the Russian Government makes restitution of private property alienated from its owners, or pays compensation for it, is solely a matter for the Russian Government.”
AGAIN CIRCUMSTANCES alter facts. At that time France was putting up a squawk over Soviet seizures of French property and wanted Great Britain to support it.
The British Government instead took a soft attitude toward Moscow in the hope of wheedling it into giving back to Sir Henri Deterding the Baku oil properties it had sequestered.
The Kremlin didn’t wheedle, Sir Henri didn’t get back his oil, but embodied forever in the archives of the British Foreign Office is this admission that in voting to nationalize its oil industry the Parliament in Teheran is on solid
ground.
Related links:
History Repeats Itself | Hamilton Butler on Iran, July 1, 1951
British Chickens Come Home At an Embarrassing Moment | Marshall News Messenger, 1951
Can British Pot Call Iranian Kettle Black? | Salt Lake Tribune, March 18, 1951
MOSSADEGH t-shirts — “If I sit silently, I have sinned”
