Here are answers to questions Americans are asking concerning the Anglo-Iranian oil crisis.

1. Does Britain oppose Premier Mossadegh’s nationalization of Iranian oil?

No. Britain’s Foreign Secretary [Herbert Morrison] stated in the House of Commons on May 29 that the British government were prepared to consider a settlement which would involve some form of nationalization. This statement has been repeated during all subsequent negotiations.

2. Then why have negotiations broken down?

Iran has insisted that it will not take part in any discussion unless the Anglo-Iranian Oil Company pays over immediately all the proceeds of the sale of oil since March 20, less operational expenses, with 25 per cent of these proceeds earmarked for future compensation. The Company found this condition completely impossible.

3. Why did the Company find this condition impossible?

The “profits” have not been earned from operations in Iran alone, but in the context of world-wide activities, including the operation of what is probably the largest tanker fleet in the world. Iran has been receiving royalties not only on the production of oil, but a share of the profits from the Company’s other world-wide operations. To hand over all the proceeds of the oil is neither commercially possible nor would it be acceptable to any oil company.

4. Was the 1949 agreement unfair to Iran? [Supplemental Agreement]

Under the agreement signed with the Iranian Government in 1949 (but not ratified by the Iranian Parliament), Iran would have received at least £33 million extra covering the years 1947-50, over and above royalties, etc., of £46 million already received. In addition, Iran receives other direct financial benefits (duties, taxes, etc.) which amounted to about £17 million in 1950 alone. These large sums of money have been an important source of revenue to the Iranian government.

5. Has the Company offered to work under nationalization?

Yes. In order to meet the terms of the nationalization law, the Company proposed that all the oil properties in Iran be vested in a Persian National Oil Company, and in consideration of such vesting the National Oil Company should grant the use of those assets to a new company to be formed by the Anglo-Iranian Oil Company. The new company would have a number of Persian directors on its board and would operate on behalf of the Persian National Oil Company. At the same time the distribution of oil products within Persia itself would be transferred to an entirely Persian-owned and operated company. [National Iranian Oil Company — NIOC]

6. What about paying Iran during this period?

During negotiations, the Company offered to make Iran an immediate interest free advance of £10 million, and £3 million a month starting in July.

7. Why does Britain say that Iran’s action is a breach of international law?

The Anglo-Iranian Oil Company has been operating in Iran since 1933 on the basis of a 60-year concession signed that year between the Company and the Iranian government. This concession, under which the British company has poured millions of pounds of capital into Iran, has now been broken by the Iranian government. Britain has asked for arbitration but that was refused. Britain has now won its case in the International Court of Justice at The Hague, but Iran had already announced that it refuses to accept the jurisdiction of the court. [The ICJ merely recommended that the two parties form a temporary oil board.]

8. Is Britain still willing to negotiate?

The government (which is a majority stockholder in the Anglo-Iranian Oil Company), and the Company itself, are anxious and willing to negotiate a settlement.

9. Has oil production helped the standard of living in Persia?

The very large payments made by the Company to Iran have formed a large part of the government revenue, but the Company naturally had no say in the way these revenues were spent by the government.

In its own area, however, the Company has spent very large sums on housing, educational and welfare services, greatly improving living standards.

10. Why didn’t the Company offer 50-50 profit sharing, like United States companies did with other territories?

Fifty-fifty profit sharing arrangements for the Iranian operations only were discussed last year between the Company and the Iranian government, and is still acceptable to the Company; but the Iranian Government preferred an agreement which gave them royalties on production, as well as a share in the companies’ world-wide operations.

11. Are the British prepared to use force in Iran?

Britain’s Foreign Secretary told the House of Commons on June 20: “His Majesty’s government are not prepared to stand by idle if the lives of British nationals are in jeopardy. It is the responsibility of the Persian government to see to it that law and order are maintained and that all within the frontiers of Persia are protected from violence. If, however that responsibility were not met it would equally be the right and duty of His Majesty’s government to extend protection to their own nationalists.”

12. What is Iran’s choice now?

Iran has two choices. The first is to continue and further develop, consistently with the principle of nationalization, the great cooperative effort in which the natural wealth of Iran has been linked to world-wide technical resources of the British, to build up this vast enterprise. It has given tens of thousands of Iranians in the oil areas housing conditions, educational opportunities and health and other services of a very high order, and given revenue to Iran to help develop the whole country. The second choice is paralysis and stagnation, a loss of oil to the Western world and a loss to Iran of her principal source of revenue.