The United States is in a position to reduce to a minimum continued friction between Britain and Iran over the Iranian oil industry and to assist both of these friendly nations from economic and security standpoints. Such a fine result can be achieved without appropriating any funds or levying any taxes.

For a number of months, Dr. Mossadegh, the Iranian Prime Minister, has emphasized the point that he favors full and just compensation to the Anglo-Iranian Oil Co. for the properties being taken over by the imperial government of Iran. Until recently, the valuation of these properties was estimated to be 200 million pounds or 560 million dollars. Lately, perhaps, out of journalistic expediency, the figure has crept up to a billion. Over half, 53 percent, of this sum will be payable to the British Government. Iran proposes to recompense the former company by setting aside 25 percent of the profits of the oil industry. It is clear that many bitter arguments could ensue as to just what methods of calculating profits should be employed, the role of taxes and other financial benefits, and so on.

On December 31, 1951, a payment of $119,336,000 will be due the United States Government by the United Kingdom, under the terms of the Anglo-American Financial Agreement 1945. The same amount will be due annually thereafter for 48 years and a similar amount in the forty-ninth year. Without great sacrifice on our part, we could transfer this credit to Iran during the next five years and thereby enable that nation to own outright and at once the refining and other properties of the former company. Instead of paying us in dollars, the British government could apply the sum each year to the claims of AIOC stockholders, the chief one being the British government itself. Under this arrangement, the British government would be in a better position to do its full part in building up the defenses of the Atlantic Treaty nations under the leadership of General Eisenhower. Payments to the British Exchequer and to the other AIOC stockholders could be in pounds sterling. The British could hardly object to such a plan if they sincerely intend to make the payments specified in the Loan Agreement.

The benefit of such a credit to Iran would be enormous. In the recent past, nearly a third of the revenue of the Iranian government and about 80 percent of the nation’s foreign exchange have come from the oil industry. If the industry can be efficiently operated and its production expanded — and this certainly can be realized if the British and the Americans do not act as stumbling-blocks instead of stepping-stones — a really effective program of economic development can be financed. In his initial Point Four pronouncement, President Truman said that “The old imperialism — exploitation for foreign profit — has no place in our plans.” Assisting Iran to be master in her own house would refill America’s reservoir of good will in Asia.

ROBERT L. GULICK, Jr.