Fourteen months ago the Iranian Government headed by Premier Mossadegh, who is now awaiting trial on charges of treason, nationalized the Anglo-lranian Oil Company, which operated at Abadan the largest refinery in the world. [The Oil Nationalization Law was passed in May 1951 — about 29 months prior, not 14] All foreign technicians, mainly British, had to leave. Production dropped to a tiny fraction of the former output. With no tankers, Iran found it impossible to deliver oil to buyers except for a total of 135,000 tons, less than 10,000 tons a month, and only 12,000 tons more could be sold for bunkering.

The result of Mossadegh’s experiment is that receipts of only $1,860,000 in the fourteen months stand on the books against a loss of $87,349,846, and the government headed by the new Premier Fazollah Zahedi [sic—Fazlollah Zahedi] finds itself compelled to tell the people that foreign experts will have to be called in to get the great refinery into operation again. “Without solution of the oil problem,” said the Premier, much needed reforms cannot be carried out. Six hundred foreign technicians would have to be employed and 30 to 40 million dollars spent if the refinery were to be restored to its pre-nationalization capacity.

Cessation of the revenue from the AIOC, the chief source of Iran’s income, faced the government with a desperate financial situation. It was even compelled to dispose of valuable rugs and other movable property to carry on. But Mossadegh remained immovable, refused to consider any indemnity covering more than a trifling fraction of the value of the property taken over, and refused to have the issue referred to the International Court at The Hague. Meanwhile, the country’s financial situation grew steadily worse and a great number of workers at Abadan found themselves unemployed.

A resumption of negotiations between the Iranian and British governments must naturally follow Tehran’s admission of the gravity of the situation. That must obviously mean eventually a reasonable and fair compensation for the stockholders of the AIOC, most of them British, although there are many other investors. The political effect of the new situation will also be wholesome, restoring, as to Iran, that comity of nations destroyed by countries under Communist domination.