Iran, under the premiership of the intemperate Dr. Mossadegh, has ordered the closing of British consulates in the country, and is threatening a complete break by a similar order to the British Embassy. But the country is becoming almost as big a headache for the United States as it is for Great Britain.

After protracted negotiations, Dr. Mossadegh has been persuaded to accept further Point Four aid—$24,000,000 for the current fiscal year. But Iran probably will get no military aid because the Premier stubbornly refuses to agree to conditions committing him to co-operation with the West.

The immediate difficulty stems from the propaganda against foreigners which is being intensified during the current electoral campaign. Dr. Mossadegh is accusing his opponents of plotting with the British.

The opposition, on the other hand, accuses the premier of conspiring with Americans. And both sides threaten sensational revelations on Jan. 22 when Dr. Mossadegh is scheduled to give an accounting to the parliament.

But even if the anti-foreign prejudice could be overcome—and that can hardly be done overnight—much cause for concern would remain. Iran is flat broke. Not only is it now deprived of oil revenues, but its officials have gone through the very considerable sums extended to them by the Anglo-Iranian Oil Co. before the nationalization of the petroleum properties. (Incidentally, these credits plus the 1949 offer to increase Iran’s oil royalties are good points in the company's record which have been largely overlooked in the current dispute.)

The money was to be used for a Seven Year Plan of agricultural improvement, slum clearance and other reforms, but there is no visible sign of these. Thus, Point Four funds ought to be distributed under reasonably close supervision. But that would give the Iranian politicians one more chance to shout “foreign interference”. Also, the sum is not nearly large enough to meet the country’s needs. Those can only be met by getting the Abadan refinery back into operation. It looked for a time as if this might be done through the instrumentality of the International Bank, but negotiations are at a standstill because Dr. Mossadegh simply will not accept the precautionary conditions laid down by the bank.

It is easy enough to condemn the folly of a man who seeks to retain power by an anti-foreign policy which leads directly to national bankruptcy. It is anything but easy to deal with him. Yet diplomacy must manage it somehow because there is always the Russian threat of taking over through a native Communist party.