THE fact that Persia has accepted the good offices of Mr. Harriman as the personal envoy of the U.S. President is a sign of hope. [Truman’s personal envoy Averell Harriman] America has maintained a correct attitude in the dispute which now enables her to intervene without prejudice.

Whether it will be safe for any Persian Government to fly in the face of the fervid nationalism which has been whipped up in the country remains to be seen. There is no question of the right of Persia to nationalise any industry within its borders. Britain does not object to that, but does object to the denunciation of the agreement under which the Anglo-Iranian Company is operating, which, it is contended, should be allowed to run its course. Apart from this practical issues should be considered.

It is granted that the oil is the possession of Persia, yet the fact is that it would have still been untapped were it not for the skill and enterprise of foreigners who have been involved in great costs to establish a mammoth industry to the advantage of both parties. Doubtless the company would be willing greatly to increase its royalties to Persia as the alternative to expropriation with little chance of compensation.

The Persians cannot without foreign assistance work the refineries, nor market the product when refined. Not only is the outlook one of bankruptcy for Persia, but it threatens a serious shortage of oil. India already is faced with rationing, and for Britain it must mean dollar oil as a substitute.