No. 245
Editorial Note

On January 25, 1952, a group of officials of the Iraq Petroleum Company arrived in Baghdad, where they met with the Prime Minister on January 26, and later with the Minister of Economics. At those meetings most of the outstanding issues between the company and the Government of Iraq were settled. The one remaining unsettled issue concerned the availability of sterling balances. That issue was to be treated by an exchange of letters outside the text of the agreement and had been submitted to the British Foreign Office, since it was primarily a governmental problem. (Despatch 697 from Baghdad, February 2; 887.2553/2–252)

Telegram 601 from Baghdad, February 3, reported the IPC oil agreement had been signed by the company and the Government of Iraq, and required only Parliamentary ratification and the signature of the Regent. Telegram 614 from Baghdad, February 9, reported the signing of the IPC agreement had been publicly announced on February 7 and had been sent to Parliament on February 9. Despatches 854, March 11, and 1074 and 1075, April 30, contained some additional information on the IPC agreement, and also on the nationalization of the oil refining and distributing functions of the Khanaquin and Rafidain Oil Companies, subsidiaries of AIOC. Agreements between the Government of Iraq and those two [Page 570] companies had been signed on December 25, 1951, and were sent to Parliament and ratified by it at the same time as the IPC agreement.

All five Independence Party members of the Chamber of Deputies resigned on February 11 in protest against the government’s handling of the oil agreements, and the 18-member Nation Socialist Party declared itself against the agreements on the same day. Its members abstained from voting, however, and the Chamber of Deputies passed the oil agreements by a vote of 89 to 7 on February 14. The Senate passed them on February 17 by a vote of 17 to 1, and they were signed by the Regent on February 19. (Baghdad telegrams 627, February 13; 635, February 14; 639, February 18; and 653, February 20)

Despatch 769 from Baghdad, February 19, transmitted the text of the IPC agreement, summaries of the ratification debates in the Parliament, and some material issued by the opposition parties. According to the despatch, the overwhelmingly favorable votes in Parliament did not provide a true reflection of local opinion, but instead were the result of the tactics of Prime Minister Nuri Said. The Ambassador gave credit to Nuri Said for his skill as a negotiator and courage in seeing the agreements through the Parliament. On the other hand he regretted that the Prime Minister had not made a greater effort to broaden the base of political support for the agreements, which would have improved the outlook for both the oil companies and his own future. Arguments that the agreements were “railroaded” through the Parliament were considered valid by some reasonable people.

Telegram 49 from Baghdad, July 11, reported that on the previous day the Iraqi Council of Ministers had approved settlement of the outstanding financial issues with the IPC group, in return for payment of 7.5 million pounds sterling. Despatch 60 from Baghdad, July 19, transmitted a copy of a July 13 letter of agreement between IPC and Iraq, implementing the July 10 decision, which stated that in return for the company’s payment the government would discontinue the Gold Case against IPC in the courts of London. Documentation on this topic is in Department of State file 887.2553.