THE COMING OF THE BRITISH CONSERVATIVE PARTY TO OFFICE IN 1951 AND THE NATIONALISATION OF THE ANGLO-IRANIAN OIL COMPANY’S CRISIS.

At the request of the International Bank, the British Government provided all the information that was asked for concerning the Iranian oil industry and ‘the effect which any interim arrangements might have on His Majesty’s Government’s case before the International Court of Justice.’³⁵ Responding to a personal request from the President of the International Bank, arrangements were made for a Director of the Anglo-Iranian Oil Company to go to Washington to help the Bank in explaining the material that the British had sent them.

Direct Government to Government negotiations might run the risk of heightening national feelings. On the other hand, it was desirable that an understanding should be reached between Governments, whoever the negotiations might be conducted by.³⁶

The Vice-President of the International Bank expressed hope that by January 1952 he would be in a position to work out some proposals. The proposals were to provide inter alia, from the International Bank, ‘to have complete freedom to appoint a management with full authority over the production and refining side of the industry.’³⁷ The role of the management, whose head was expected to be of ‘neutral’ nationality, was to be responsible for recruiting the operating group to run the industry. The majority of the foreign operating staff were expected to be from the Anglo-Iranian Oil Company. Profits were to be split on a 50:50 basis between these foreigners, supplying the operations and marketing facilities, which in effect would be primarily the Anglo-Iranian Oil Company and the Iranian Government.

The Anglo-Iranian Oil Company would not be prepared to accept any scheme which gives them less than fifty-fifty division of the profits.³⁸

Such a scheme would appear to protect the essential interests of His Majesty’s Government and the Anglo-Iranian Oil Company. It may be more difficult for the Bank to convince the Persians that it also protects their essential interests. The Shah has apparently placed his hopes on the Bank’s intervention to save him from having to take direct action against Musaddiq. The public statements of the Persian Government, however, are not propitious. In a recent speech in the Majlis Musaddiq, referring to his discussions with Mr. Garner (the Vice-President of the International Bank), intimated that the Bank would only be intervening to help Persia, finance her industry and sell her oil, not to control or manage it as trustee for the parties. It is too early yet, however, to say that Musaddiq has adopted a firm attitude. It is essential that the independent role of the Bank in this matter should be publicly emphasised at every opportunity.³⁹

The British Government was worried that the international Bank’s proposals, in terms of presentation and timing, would not strengthen Musaddiq’s political position in Iran. The United Kingdom did not want Musaddiq to appear as if he was in negotiation over the oil question, since Musaddiq’s political status had become weak at home, due to the breakdown of talks with the Americans. Therefore Anthony Eden, the British Foreign Secretary, recommended the following measures:

1. In public we should be well advised to maintain silence and apparent indifference to the fate of Persian oil, while in private we should do all we can to assist and encourage the Bank in drawing up a plan.
2. Any specific proposals from the Bank should, in the first instance, be communicated to the Persian and British Ambassadors in Washington, requesting written statements from their Governments that they accept them as a basis for negotiations.
3. His Majesty’s Government’s reply to such proposals should not be published until a satisfactory reply has been received from Musaddiq, and our public comment should be confined to a statement that the proposals were being seriously considered but the outcome must depend on whether the Persian Government accepts the proposal as a basis for discussion.⁴⁰

35. PRO, London, CAB 129/48 C (51) 46 Memorandum of Anthony Eden, the Foreign Secretary, on the International Bank’s proposal, Secret, 17^th December 1951, p. 1.
36. PRO, London, T 236/3663, Treasury Records, Cabinet Persia (Official) Committee, Minutes of Meeting of the Committee held in Sir Roger Makins’ ,room, Foreign Office, Secret, 9^th April 1952, p. 3.
37. PRO, London, CAB 129/48 C (51) 46 Memorandum by Anthony Eden, the Foreign Secretary, on the International Bank’s proposal, Secret, 17^th December 1951, p. 1.
38. PRO, London, T 236/3663, Treasury Records, Cabinet Persia (Official) Committee, Minutes of Meeting of the Committee held in Sir Roger Makins’ room, Foreign Office, Secret, 9^th April 1952, p. 1.
39. PRO, London, CAB 129/38 C (51) 46 Memorandum by Anthony Eden, the Foreign Secretary, on the International Bank’s proposal, Secret, 17^th December 1951, pp. 1-2.
40. Ibid.

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