March 24, 1953 — The San Bernardino County Sun

The Mossadegh Project | December 9, 2015                   

Iranian and Mexican oil nationalization were compared in this sober editorial by The San Bernardino County Sun, a Southern California newspaper. It appears to have been significantly plagiarized from a Cumberland News editorial on March 11th, Iran Remembers Mexico.

Iran Still Sitting Tight

The government of Premier Mossadegh, in continuing to sit tight on Iranian oil, obviously remembers how Mexico won out in expropriating foreign oil holdings.

The Iranian finance minister told the Anglo-American Oil Company that “the nationalization of industries is based on the right of the sovereignty of nations such as exercised by the Mexican government.” [May 20, 1951 letter from Mohammad Ali Varasteh. Correct quote: “the nationalization of industries derives from the right of sovereignty of nations, and other governments, among them the British Government and the Mexican Government, have in various indsances availed themselves of this same right.”]

It will be remembered that Mexico formally expropriated foreign oil holdings in March, 1938, after taking steps in that direction for more than 20 years. The oil workers union, supported by the government, had demanded an $11 million a year raise, pensions and participation in management. The companies were willing to go far toward meeting the pay and pension demands, but would not yield on management.

The United States in 1938 admitted the right of expropriation under the Mexican constitutional provisions of 1917. However, Secretary of State Hull insisted on “fair, assured and effective” compensation. [Cordell Hull (1871-1955)]

Eleven of the 17 oil companies involved were American owned. The 11 companies put the fixed assets of their expropriated properties at more than $200 million, the Mexican government at $22 million.

In 1941, when the government at Washington was making special efforts for good relations with Latin America because of the war abroad, an arbitration agreement was reached. Under this, U.S. and Mexican experts settled in 1942 on $24 million as the value of the expropriated U.S. properties, to be paid by September, 1947, with interest at 3 per cent retroactive to 1938.

With the Mexican situation as a precedent, it is not likely that Iran will back off completely in its oil nationalization program. However it may be willing to bend a little so that an equitable sttlement can be reached.

Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954
Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954

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Related links:

Time Favors Mossadegh On Oil | The Herald Statesman, March 27, 1953

OIL: Negotiations in Iran | TIME magazine, September 22, 1952

Oil, Britain & the Ethics of Foreign Concessions | Buffalo Courier-Express, letters, Dec. 1953

MOSSADEGH t-shirts — “If I sit silently, I have sinned”

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