The true test of shrewdness in any trader is whether he knows when to cut his losses. Premier Mossadegh of Iran now has the opportunity to cut his unhappy country’s steadily mounting losses in the almost idle oil industry, for Britain and America are reported to have offered him yet another settlement plan. Whether he will grasp that opportunity — agreement by Anglo-Iranian Oil Company to buy 10,000,000 tons of petroleum products a year in return for agreement on compensation to be paid for Iran’s seizure of Anglo-Iranian properties — is, however, highly questionable.

Up to now Mossadegh’s shrilly defiant voice has maintained that he will take no losses at all, that Iran will have the Anglo-Iranian properties without compensation. Yet the fact remains that he has been taking losses on a prodigious scale. For more than a year and a half Iran’s former revenue of about $5,000,000 a month has been missing. Moreover, the British threat to bring suit against any group marketing Iranian oil has been effective. Finally, during the last year the unforeseen disappearance of a severe world oil shortage has made Mossadegh’s position weaker.

The longer Premier Mossadegh attempts to sit things out the more permanent the increased production in other countries of the world is likely to become. Already England and America can offer to buy only one third of Iran’s former production, knowing it will be enough. As time goes on not even that much may be needed. If the Iranian leader is smart he ought to realize that it is getting very late in the game.