BY HAMILTON BUTLER

As a result of the loss of royalties from the Anglo-Iranian Oil Co., whose properties it expropriated early last year, the Iranian Government is now in dire financial straits. Yet it hesitates to accept proffered financial aid from the United States if this means abandoning Iran’s neutrality and committing it to contribute to the “defensive strength of the free world” against the Soviet bloc. The British have acted in Iran upon an assumption expressed in their own words: “Just wait until the beggars need the money badly enough. That will bring them to their knees.” The “beggars” to date have shown themselves both stiff-kneed and stiff-necked. What may easily result from British arrogance and stupidity and our own State Department’s vacillation and indecision is chaos, with Soviet Russia its principal beneficiary.

AMONG the matters upon which Prime Minister Churchill is now in Washington seeking American co-operation is the revolt of Middle Eastern and other Asian peoples against the “economic aggression” exemplified in colonialism. [Winston Churchill] The Indians, Pakistanis, Ceylonese and Burmese have thrown off the yoke. The Iranians and Egyptians are struggling to the same end. All of the peoples of Asia, the Middle East and North Africa, although widely differing from one another in most other respects, are united in their purpose to end European economic, as well as political exploitation. Any collaboration with our British friends to ease the impact of this revolt, if it is not to lead to further disasters, will have to be on a basis very different from that which heretofore has guided the British Foreign Office.

THE IRANIANS, failing to get a square deal from the Anglo-Iranian Oil Co., were within their rights in nationalizing their oil industry. The British Government finally, and begrudgingly, admitted that. Yet instead of meeting the Iranians half way, the British “higgled” and “haggled” and played politics in Teheran until, when they at last made a reasonable proposal, the Iranians were no longer in a mood to consider it. As a result, the British are losing their tremendous profits from exploiting Iran’s oil. The Iranians, without their minor share in the form of royalties, are further impoverished. The Moscow-directed Tudeh party is making the most of the situation, among an Islamic people who detest Communism. The reverberations are felt throughout the Moslem world. They have weakened the Middle East defense system we are trying to cement. They threaten the Suez Canal. They affect our air bases in French possessions in North Africa.

THE CURRENT issue of The Saturday Evening Post contains a timely and highly valuable article by Henry F. Grady: "What Went Wrong in Iran?" Grady, who had been our ambassador to Greece, when we were lavishing economic aid on that beleaguered country, was sent to Iran to administer a somewhat similar program of American aid. This aid never materialized. When the Anglo-Iranian oil controversy came to a head, Grady tried to play the role of mediator or “honest broker.” The British pinned his ears back and told him to keep his nose out of their business. The State Department replaced him with Ambassador Loy Henderson. Grady writes: “The United States must share the blame. For if British policy was fatuous and appallingly stupid, such American policy as existed was virtually incomprehensible.” [Grady used the word “unrealistic”, not “stupid”] Where the Administration blundered was in promising funds to Iran for economic development and then not providing them. Again Grady writes: “While our hesitations about granting the long-overdue credits might have had nothing to do with the oil situation, there was sufficient parallelism and timing between British and American actions to make the Iranians feel certain we were following the British in putting on a financial squeeze.” American aid to Iran was also resented by our British friends for quite another and deeper reason than concerned the oil dispute as such. As Grady puts it: “The British have regarded our increasing interest in Iran as an incursion into territory which they feel they should dominate.”

WHAT MR. CHURCHILL would like the United States to do is to underwrite the British Empire but to have no voice in how it is to be managed. The Clive-Hastings tactics which looted India in the 18th Century simply will not work in Asia or the Middle East in the middle of the 20th Century. A new technique for the amicable liquidation of colonialism must be devised. The extent to which we have already permitted ourselves to be identified with British policy has cost us dearly. We can’t afford to assume any more liabilities of that kind. The interests of the United States, as well as those of Great Britain, will be best served by a firm and comprehensive “understanding” on world problems. Yet no such understanding will be acceptable to the American people if it involves the surrender of any part of our sovereignty to “Union Now” or any similar political fantasy or if our British friends insist upon “dominating” other free and independent countries to the exclusion of American competition.