In the summer of 1953, the CIA executed a coup against the democratically elected Prime Minister of Iran. The success of Operation Ajax emboldened the CIA to embark upon a series of coups throughout the developing world.  But in their overthrown of Mohammad Mossadeq, the CIA eliminated the only functioning democracy in the Middle East, and set the stage for the emergence of the current Islamic theocracy in Iran, which threatens stability in the region to this day.

Were the CIA’s actions in 1953 justified given the context of the time, and the looming threat of Soviet expansion into Iran?  Or, was the coup all about protecting the West’s monopoly on exploiting Iran’s vast oil reserves?  As usual, the only way to arrive at some semblance of an informed answer is to dig deep into the trends and forces, context, and individuals which shaped events in those fateful August days.

This first instalment in a multi-part series on Operation Ajax will look at history of Iran’s contact with European powers starting around 1800, the various concessions defining 19th century European-Iranian relations, the discovery of oil, and the ultimate subjugation of Iran by Britain in the aftermath of the World Wars.  We’ll end our episode in the year 1949, as the discontent of the Iranian people finally coalesces into a unified nationalist movement able to directly challenge British control. 

Full Transcript

Preamble

Few upheavals in the Middle East have had wider aftershocks than the 1953 coup that overthrew the Iranian nationalist leader Mohammed Mossadeq. As seen by Mossadeq and his National Front Party, the chief issue was Iran’s right to nationalize a British oil giant that held exclusive rights to drilling and selling the country’s petroleum. As seen by the incoming Eisenhower administration in Washington, something very different was at stake–a possible Soviet takeover in Tehran, its way prepared by Tudeh, the Iranian Communist Party. But to many Iranians, the United States betrayed its own values by covertly joining with Britain to depose an elected leader… For Americans, the unintended result was the rise of political Islam, leading to the 1979 revolution and the present continuing impasse in Iranian-U.S. relations. 

Containing communism was the justification for the coup, but by the coldest reckoning the price was excessive… It is a reasonable argument that but for the coup Iran now would be a mature democracy. So traumatic was the coup’s legacy that when the Shah finally departed in 1979, many Iranians feared a repetition of 1953, which was one of the motives for the student seizure of the U.S. embassy. The hostage crisis, in turn, precipitated the Iraqi invasion of Iran, while the revolution itself played a part in the Soviet decision to invade Afghanistan. A lot of history, in short, flowed from a single week in Tehran. 

• Mostafa Zahrani. The coup that changed the Middle East: Mossadeq v. the CIA in retrospect.
  https://go.gale.com/ps/i.do?id=GALE%7CA90534864&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=07402775&p=AONE&sw=w&userGroupName=anon%7Ebadf80df&aty=open+web+entry

That was Mostafa Zahrani, former Iranian diplomat from his essay “The coup that changed the Middle East: Mossadeq v. the CIA in retrospect”. I’m Greg Campbell, and you’re listening to the Pivotal History podcast episode 2: Part One, Operation Ajax.

Intro

There are many analysis of the US led coup to overthrown the Prime Minister of Iran in 1953. To some, the CIA operation was a vital pillar in the American program of containing the expansion of the Soviet Union at the dawn of the cold war. To others, the coup was a shining example of Anglo-American imperialism, designed to keep Iran subservient to the West for the purpose of exploiting her vast oil reserves.

Though historians disagree as to the motivations for the US actions in Iran in 1953, they share agreement on the pivotal nature of this event on the development of the Middle East through the second half of the 20th century. A direct line can be drawn from the coup in 1953 to the Iranian hostage crisis in 1979 and the establishment of the Islamic theocracy, which confounds the West to this day.

But I think there are additional reasons why a deep understanding of what happened in those fateful days in August of 1953 are worthy of study.

First, the coup effectively destroyed the first and only democratic government in the Middle East. How might the Middle East, and indeed other parts of the developing world, look today if democracy in Iran had continued as a model for other nations to follow? How would the Middle East look today, absent an aggressive and belligerent Iran?

It’s almost impossible to say, but what is for certain is that the coup in Iran started a series of ripples in the pond which is Middle Eastern latter 20th century events. To follow just one of those ripples: The US installed strongman Saddam Hussein in Iraq to deal with the rise of Islamic Iran, itself blowback from 1953 coup. A major war wass fought between Iraq and Iran through the 1980’s. Eventually that same US backed strongman became the enemy of the West and we fought two major wars, killing more than one million civilians, creating a generation of embittered Islamic men. These men then fed into the fundamentalist organizations that already existed. Think ISIS and the Taliban. These emboldened groups are then part of the destabilization of Syria and Libya, which is causal in the ongoing migrant crisis in Europe.

And what about the ripple of CIA interventionism? Iran in 1953 marks the first covert coup by the newly formed CIA against a foreign nation. It will not be the last and indeed the Iranian coup in 53 gets used by the CIA as a playbook throughout the developing world for how depose leaders not pliant to Western demands. Through 50s, 60s and 70s country after country falls to CIA covert operations. These operations do much to tarnish the image of America in the developing world. No longer is the US seen as a shining example of freedom and liberty; America, more and more, supplants the old colonial empires as the oppressor.

But there’s also another ripple: Had the US not intervened in Iran, had the country fallen to the Soviet Union as some honestly feared at the time, what then? And what of those other countries under communist pressure that the US took direct action in? What would the world look like if the US had sat back in those countries while the Soviet Union was allowed to spread communism unchecked?

As with most things in history, the answers to these questions are not black and white. The only way to arrive at some approximation of a balanced perspective is to dig deeply into the events, the people shaping those events, and the context in which those people and events are operating.

That will be my goal of this two part series on the coup in Iran. I want to go deep into the context of the coup, and the people involved. To the extent possible, I will explore what motivated the various key players in the story, so we can understand why events unfolded in the way that they did. And I want to understand the mechanics of the coup itself, which as we’ll see progressed in multiple stages, starting by using propaganda and quasi-legitimate mechanisms, and reverting to an outright military coup when all else failed.

Iran in the 1800s

Without getting too lost in the weeds, let’s begin by looking at some the key events in Iranian history from about 1800 until 1900. I’ll try and keep this at as high a level as possible while still accomplishing my goals, which are first, to provide some historical context, and second and most importantly, to provide an understanding of the various forces and trends acting on Iran heading into the 1953 coup. Iran’s history is a complicated and dynamic one, standing as she does at the intersection of two great powers: Russia to the North and Britain to the East, through her colonial holdings in India.

Just as a quick side note, until 1935 Iran was called Persia, but for consistency I’ll simply use Iran most of the time.

As you can imagine being sandwiched between the two great empires of Russia and Britain at their heights is not conducive to a nation developing organically and free from interference and intrigue.

With Russia, Iran’s problems go back a long way. For example, Peter the Great came into Iran in the early 1700’s to crave off a big chunk of land, only to have the Iranians successfully push the Russians out a few years later. For the next 50 years tensions simmer with occasional conflicts and then in 1804 Russia starts pressing south into Iran again. This push south catches the attention of the British, who are concerned that any invasion of Iran may simply be a prelude to further expansion into British held India. Through this period come a bewildering progression of treaties and commitments as loyalties shift in response to Napoleon’s conquests in Europe resulting in temporary alliances between Russia and Britain, Britain and Iran, Russia and Iran, and then conflict between all of them. At one point Iran even signs a treaty with Napoleon to enter the war on the side of the French. But the end of the Napoleonic War sees the status quo effectively return: Iran remains caught between the imperialist ambitions of Russia, and the desire of Britain to maintain Iran as a quasi-independent buffer state to protect her Indian holdings from Russia.

The remainder of the 1800s sees Iran fight two losing wars. The first against the Russians in the Russo-Persian War of 1828, and the second against the British in the Anglo-Persian War of 1857. By this time it is clear that the Iranian state, having missed the period of modernization enjoyed by her adversaries, is no longer able to mount effective resistance to European powers. From this point on realities in Iran will be largely defined by the shifting tensions between Russia and Britain. Ervand Abrahamian summarizes the situation in his book “The Coup” thusly:

…Iran had found itself wedged in between two expanding empires – Russia from the north and Britain from the south. To use the language of the time, Iran had become a pawn in the Great Game. The Russians expanded southwards into the Caucasus and Central Asia; and, having defeated Iran in two short wars, extracted not only economic concessions but also large chunks of territory in the north. Similarly, the British, having established a firm foothold in India – their imperial jewel, moved into Afghanistan and the Persian Gulf.

• Abrahamian, The Coup, page 24

The Shah as Ruler, the Clergy as Influencers

In terms of a system of government during the 1800’s, and indeed for many centuries before that time, Iran was ruled by a series of dynastic monarchies. Instead of a King or Queen, in Iran the ruler was known as the Shah. While the Shahs in general had absolute power, their exercise of this power was moderated to at least some extent by two important factors. First, Iran never developed the organization and bureaucracy needed to effect a strong central government. Thus, into the resultant vacuum stepped the second important factor: The clergy. Specifically the Muslim clergy, who in the rural settings provided the basis for law and order and the adjudication of disputes. It was this role of the clergy in the everyday lives of Iranians, especially those outside the cities, which gave the clergy some influence over the people, but they remained subservient to the Shah.

And this is something I want to stress. For most of us, the idea of Iran and fundamentalist Islam or Sharia Law are synonymous. But this is actually not historically correct. The theocratic state which emerged in Iran in the wake of the 1979 revolution was unique in Iranian history. Before that, religion, as it was in many societies, was simply one pillar of the Iranian social structure. At times it had more power and other times in had less. But until 1979, the degree of influence and control exerted by the clergy was always less than the other power brokers. In many ways Islam in Iran prior to the 1979 revolution played a role somewhat similar to that the Catholic church played in many countries over the preceding centuries, with similar ebbs and flows in power and influence.

Also, it is important to remember that Islam is not native to Iran, and instead came to the country as part of the Arab invasion of the 600s.

Concessions

There another trend that we start to see occur in Iran from about middle of the 19th century which is absolutely key in understanding modern Iranian history: The granting of concessions to foreign nations, individuals, and corporations.

Essentially the dynamic here was typically that the current Shah, in order to fill his coffers and fund his lavish lifestyle would sell concessions to the highest bidder, to no benefit and indeed to the detriment of the rest of Iranian society.

Stephen Kinzer in his book on the Iranian coup titled “All the Shah’s Men” summarizes the situation leading into the period of concessions as follows:

Nasir al-Din Shah had been on the Peacock Throne for more than forty years. Like other Qajar rulers, he was famous for his excesses. His harem, where he spent much of his time, grew to sixteen hundred wives, concubines, and eunuchs. He fathered hundreds of princes, all of whom had free access to the national treasury. Garish clusters of jewels decorated his palaces. When he became bored by the pleasures of home, he would set out for Europe accompanied by a huge entourage. He demanded to be called not only Shah of Shahs but also Asylum of the Universe, Subduer of Climate, Arbitrator of His People, Guardian of the Flock, Conqueror of Lands, and Shadow of God on Earth. Those who refused to honor him were flogged, shot from cannons, buried alive, or set afire in public squares.

To support his lavish tastes, Nasir al-Din Shah sold government jobs, imposed oppressive taxes, and confiscated the fortunes of wealthy merchants. When there was no money left for him to take, he came up with the idea of raising cash by selling Iran’s patrimony to foreign companies and governments. The British were his first customers. British officials were worried by native uprising in India and wanted a telegraph line to their command posts there. In 1857 they bought a concession to build one across Iran.

• Kinzer, All the Shah’s Men, pg 30-31.

This would be the first of many concessions sold by the Shah and his son, the future Shah. Indeed it is the selling of concessions that will lead to the weakening and eventual emergence of a constitutional monarchy in Iran, and the overthrow of the Qajar dynasty which had ruled Iran since the late 1700s.

1872: The Reuter Concession

The first major overreach by the Qajars was in the granting of a massive concession to Baron Peter Julius Reuter, who coincidentally later went on to found the Reuters news agency, which to this day is one of the largest news agencies in the world. Ali Ansari, in this book “Modern Iran Since 1797” tells the story of what became known as the Reuter concession thusly:

Just how pitiful the situation had become was revealed during the debacle over one of the most dramatic concessions to be offered, that awarded to Baron Julius de Reuter in 1872.

Peter Julius Reuter had made his money selling financial intelligence in Europe, taking advantage of the developments in telegraphy to trade business intelligence between London and Paris. Naturalized as a British subject in 1857 he was created a Baron in 1871, before moving to explore investment opportunities in Iran.

…The resulting agreement, signed for the princely sum of £40,000, was in the words of Lord Curzon (Kinzer now quoting Lord Curzon who was considered the foremost British expert on Iran at the time):

...the most complete and extraordinary surrender of the entire industrial resources of a kingdom into foreign hands that has probably ever been dreamed of, much less accomplished in history...  The concessions... handed over to him the exclusive workings for the same period of all Persian mines, except those of gold, silver, and precious stones; the monopoly of the government forests, all uncultivated land being embraced under that designation; the exclusive construction of canals, kanats, and irrigation works of every description; the first refusal of a national bank, and of all future enterprises connected with the introduction of roads, telegraphs, mills, factories, workshops, and public works of every description; and a farm of the entire customs of the empire for a period of twenty five years...  Such was the amazing document that fell like a bombshell upon Europe.

Far from rejoicing at the triumph of this British entrepreneur, the Foreign Office reacted with unerring anxiety faced as it was with international criticism from those powers who found themselves cut out of opportunities by the avaricious opportunism of ‘British Imperialism’, as well as fear of the reaction from Russia… In the end an unholy alliance of otherwise disparate parties, including the (British) Foreign Office, international agitators and Iranian opposition (both progressive and reactionary) ensured that the concession, much to Reuter’s understandable irritation, was never to be realized.

• Ansari, Modern Iran Since 1797, pg 75-76.

But before you feel too bad for poor Baron Reuter losing such a lucrative concession, be aware that his consolation prize, carefully negotiated for him by the British Foreign Office, was control of a newly formed central bank in Iran: the British Imperial Bank of Persia. Thus, the British, through their front man Baron Reuter, manage to obtain complete control of the Iranian monetary system. Described by Ansari:

This was to prove an enormously influential concession, which

included the monopoly for issuing banknotes, control of the borrowing market and regulation of interest rates, privileges that eventually drove out of the market local moneylenders unable to compete with the bank's larger capital and efficiency.  By the end of the Qajar era the Imperial Bank, which operated with little competition from its Russian counterpart, held a near total sway over Persian finances, both public and private.

• Ansari, Modern Iran Since 1797, pg 76.

1891: The Tobacco Revolt

Now one would think that the Reuter debacle would have taught the Shah to be cautious as to the breadth of the concessions he granted to fund his lavish lifestyle. This does not appear to have been the case. Just a few years later there occurs something called the Tobacco Revolt. As described by Kinzer in “All the Shaw’s Men”:

(The) Shah, isolated in the private world of the Qajar (royal) court, was oblivious to (the) rising discontent. In 1891 he sold the Iranian tobacco industry for the sum of £15,000. Under the terms of the concession, every farmer who grew tobacco was required to sell it to the British Imperial Tobacco Company, and every smoker had to buy it at a shop that was part of the British Imperial’s retail network.

Iran was then, as it is today, both an agricultural country and a country of smokers. Many thousands of poor farmers across the country grew tobacco on small plots; a whole class of middlemen cut, dried, packaged, and distributed it; and countless Iranians smoked it. That this native product would now be turned into a tool for the exclusive profit of foreigners proved too great an insult. A coalition of intellectuals, farmers, merchants, and clerics, such had never before been seen in Iran, resolved to resist. The country’s leading religious figure, Sheik Shirazi, endorsed their protest. In a shattering act of rebellion, he endorsed a fatwa, or religious order, declaring that as long as foreigners controlled the tobacco industry, smoking would constitute defiance of the Twelfth Imam… News of his order flashed across the country through the telegraph wires the British had built several decades earlier. Almost all who heard it obeyed. (The) Shah was bewildered, frightened, and then overwhelmed by the unanimity of the protest. When his own wives stopped smoking, he realized that he had no choice but to cancel the concession. To add to the indignity, he had to borrow half a million pounds from a British bank to compensate British Imperial for its loss.

• Kinzer, All the Shah’s Men, pg 33.

The Tobacco Revolt had two major longterm impacts. First, in requiring the Shah to borrow half a million pounds from a British bank to pay a British imperial corporation, money that could ultimately only come from increased taxation, the seeds of continued discontent were sowed. Second, and more importantly, this successful revolt showed Iranians that, if the various classes in their society united, change could be forced. To a monarch, this is an exceedingly dangerous development. Any totalitarian style of government requires a belief in the absolute power of the ruler, and the belief that any resistance to the will of the ruler is foley. The Tobacco Revolt shattered this illusion, leaving the Shah and his dynasty vulnerable. I don’t think it’s a stretch to say that the Tobacco Revolt marks the beginning of the nationalist movement in Iran, a movement which will play a key role in our story.

1901: D’Arcy Concession

Five years after the Tobacco Revolution, in 1896, the Shah is assassinated. He is succeeded to the throne by his son who apparently learned nothing from his father as to the risk to his authority posed by the continued granting of concessions.

Described by Ansari:

(The) Shah’s son and successor… was to prove no more disposed to political reform than his father, nor indeed any more diligent in the allocation and award of concessions. Iran became a veritable menagerie of diverse concessions to a variety of European owners who took on responsibilities for the management and administration of a range of government activities from customs collection to the Gendarmerie. The most significant was that awarded to an Australian entrepreneur, Willian Knox D’Arcy in 1901, for the exploration, exploitation and marketing of oil, natural gas, asphalt and ozocerite.

Anasari, Modern Iran Since 1797, pg 94.

It’s an awful deal. In fairness to the Shah, it is born partly from his ignorance as to the value of the new black gold. That ignorance aside, the reality is that the Shah is looking for a quick payday, so that he can continue to fund his lavish lifestyle. At this point in history the strategic value of oil and gas is clear to anyone paying attention. This deal sets the stage for all the turmoil that will follow.

The terms of the deal are brutal. In exchange for granting the blanket 60-year concession, the Shah is to receive £20,000 in cash, and a further £20,000 in stock. In addition, the Shah will receive 16% of annual net profits.

I want to talk briefly here about the foley of negotiating deals based on variables outside of one’s control. 16% of profits might sound pretty good, but you have to realize that it is very easy for a corporation to ensure that, despite making an immense amount of money, there are no official profits to be had. Expenses can be inflated, capital depreciation can be overstated, money can be funnelled in sweetheart no-bid contracts to insiders who can through various mechanisms ensure the wealth finds it’s way back to those in control. The possibilities are endless. This is a lesson the Iranians will learn the hard way, and it will be this concession that teaches them.

Anyways, the Qajar dynasty is now circling around the drain. As Ansari puts it:

Rarely have such momentous decisions for the future of the country – and the future of Anglo-Iranian relations – turned on such a grotesque under-appreciation of the country’s assets. But then (the new) Shah had soon achieved what no one had anticipated, and that was a worse reputation than his father, for indolence and lack of interest in the affairs of state. Even Iranian observers considered the new Shah ‘simple minded, easily persuaded, undecided, fond of buffoonery, and entirely in the hands of corrupt courtiers… utterly ignorant and illiterate, knowing nothing of history and politics, and utterly devoid of prudence, judgement and foresight.’…

(The new Shah) had inherited a government machinery that was heavily in debt and proceeded to make matters worse by seeking to play off the Russians and British, to secure loans he required to fund an unsustainable lifestyle.

• Ansari, Modern Iran Since 1797, pg 94-95.

1905-1907: The Constitutional Revolution

Beneath the surface discontent amongst the Iranian people is simmering. The Qajar dynasty is by now fully discredited in the eyes of the people, and even the Imperial powers of Britain and Russia have grown frustrated with the incompetence of the Shah’s regime. Iran is a tinderbox waiting for the spark which inevitably comes. Described by Ansari:

… the spark which ignited the ‘revolution’ proved to be something characteristically trivial: the arrest and beating of a number of merchants who had been protesting what they considered to be excessive exactions of the new customs regiment that had been imposed. It had not helped that the customs duties had been outsourced to a Belgian official… who proved somewhat too effective and efficient in his task, much to the satisfaction of a government in desperate need of money, but considerably less enamoured of the merchants who had to provide this money.

• Ansari, Modern Iran Since 1797, pg 97.

The beatings of these merchants prompted anger and rioting amongst the merchants, who were soon joined by leading clerics and urban intellectuals. Initially the protestors only demanded the resignation of the local governor who had ordered the beatings, but as the powerful coalition of dissidents grew demands were added. Ultimately the group demanded nothing short of a complete restructuring of how political power was wielded in Iran: They demanded popular representation, and some form of legislative assembly. The Shah, facing a popular uprising, agreed in principal to some form of representative governance.

But, the Shah, rather than implementing any changes, simply waited for the protestors to disperse, and then proceeded to stall for several months, making arrests in the meantime. Inevitably, the crackdown triggered renewed protests, led by the clerics and the intellectuals who decided to take bast on the grounds of the British Legation.

Now Bast is an Iranian custom of seeking asylum in certain designated areas, very much akin to the concept of religious sanctuary we see in the Christian tradition. And, as with the Christian tradition of taking sanctuary inside a church, in Iran bast would usually taken inside a mosque.

In this case, the government had already demonstrated its willingness to violate traditional bast in its attempts to subdue the unrest and had besieged a major mosque, and so the protestors did something unexpected: They sought bast inside the British Legation. Surprisingly, the head of the Legation allowed them to enter. Soon there are fourteen thousand Iranians, 7% of the Tehran’s population, living inside the British compound in tents.

Stephen Kinzer picks up the story:

This assemblage quickly turned into a school at which the principals of democracy formed the core curriculum. Every day, articles from reformist newspapers were read aloud to the multitude, agitators gave speeches about social progress, and foreign-educated intellectuals translated the works of European philosophers. The Shah, disconcerted but still failing to grasp the intensity of the movement, offered to name a council that would help run the justice ministry. That was not nearly enough to satisfy the protestors. They wanted a Majlis, or parliament, with true power…

• Kinzer, All the Shah’s Men, pg 35.

Ultimately the Shah is forced to acquiesce to these demands for a Majlis. It is a stunning victory, made possible be the clergy and intellectual classes uniting in opposition to the Shah.

But the establishment of the Majlis does not go smoothly. As you’d expect, the Shah seeks to undermine and weaken the institution even as it’s being created. His attack is simplified by the lack of experience in Iran with elections and representational government. Still, within a few months an Iranian constitution, based on the constitution of Belgium, has been adopted, and an election of sorts has been held.

The revolution was, it turns out, the easy part. Now the nascent Majlis was faced with the problem of how to govern a country defined by a distinct lack of bureaucracy and possessing little ability to project power beyond the major cities. For his part the Shah was savvy enough to immediately set about stoking the rivalry between the clerics and the intelligentsia, fracturing that fragile alliance. Chaos reigned.

1907: Anglo-Russian Convention Partitions Iran

In the meantime the Russians had recovered from the shock of their defeat to the Japanese in the 1905 war, and had again turned their attention south to a weakened Iran. The British, anxious to hold onto their gains in Iran, most notably the D’Arcy Concession granting them control of the oil fields in the south, entered into negotiations with the Russians.

The result was the Anglo-Russian Convention of 1907 in which Britain and Russia agreed to partition Iran into spheres of influence, with Britain maintaining control of her holdings in the south, and Russia gaining control of the north. Iran was informed of the agreement after it was already a done deal, and was in no position to resist.

One sad side-effect of this deal was to squander the good-will the British had generated for themselves as a result of their actions during the Constitutional Revolution. Providing bast to the revolutionaries had made many Iranian’s start to view the British as potential benefactors, as opposed to oppressors. But the partitioning of Iran through the Anglo-Russian Convention shattered this belief. More than ever, Iranians started to view the British as exploiters, and part of the reason for the chaos and suffering in their country.

1908 – 1914: D’Arcy Concession Taken Over By British Government

In May of 1908, D’Arcy’s prospectors struck oil. As told by Kinzer:

Reynolds was sleeping in his tent near an outpost in western Iran… when, at four o’clock in the morning of May 26, 1908, rumbling noises and wild shouting awakened him. He bolted up, ran across a stoney plain, and saw oil spurting high above one of his derricks. In what might have been one of his last attempts, he had drilled into the greatest oil field ever found.

It did not take long for the British leaders to grasp the scope and implications of this find. In the autumn of 1908 they arranged for a group of investors to organize a new corporation, the Anglo-Persian Oil Company, to absorb the D’Arcy Concession and take control of all oil exploration and development in Iran. Five years later, at the urging of First Lord of the Admiralty Winston Churchill, who saw world war on the horizon and knew he would need oil to power the ships that would win it, the British government spent £2 million to by 51% of the company. From that moment on, the interests of Britain and the Anglo-Persian Oil Company became one and inseparable.

• Kinzer, All the Shah’s Men, pg 49.

So the British government, through a corporation in which it holds the controlling interest, now owns the concession granting them exclusive and unfettered access to the largest oil field in the world. To exploit this vast resource will require a massive investment in building the requisite infrastructure. The British get to work. Again from Kinzer:

During its first few years in existence, Anglo-Persian drilled scores of wells, laid more than a hundred miles of pipeline, and extracted millions of barrels of oil. It established a network of filling stations throughout the United Kingdom and sold oil to countries across Europe and as far away as Australia. Most impressive of all, it began construction of what would for half a century be the world’s largest refinery on the desert island of Abadan in the Persian Gulf.

Abadan, at the Gulf’s northern end, had come slowly into existence over a period of a thousand years, built up by silt running from the rivers that meet to form the Shatt-al-Arab waterway. The first engineer Anglo-Persian sent there, twenty-eight-year-old R.R. Davidson, wrote home in 1909 that it was a place of “Sunshine, mud and flies,” totally flat and without a single stone bigger that a man’s hand. It was also among the hottest places on earth. Nonetheless, within a couple of years Davidson had more than a thousand tribesman at work building piers, barges, and brick buildings. Soon Abadan boasted a power-generating station, several stores and workshops, a water filtration plant, and even a small railway. In 1911 the first pipeline from Fields, as the oil producing region was called, was completed, and the next year oil began to flow.

Before long Abadan was a bustling city with more than one hundred thousand residents, most of them Iranian laborers. From its private Persian Club, where uniformed waiters served British executives, to the tight-packed Iranian workers quarters and the water fountains marked “Not for Iranians”, it was a classic colonial enclave. Almost all the technicians and administrators were British, and many enjoyed handsome homes with terraced and manicured lawns. For them and their families, Abadan was an idyllic place.

Life was much different for the tens of thousands of Iranian laborers. They lived in slums and long dormitories with only primitive sanitation. Shops, cinemas, buses, and other amenities were off limits to them. With their British employers, however, they shared life amid a network of giant pipes, beneath cavernous holding tanks, and in the shadow of towering smokestacks from which plumes of flame leapt up day and night. The air was heavy with sulfur fumes, a constant reminder of the vast wealth that was pouring from Iranian soil into Anglo-Persian’s coffers.

• Kinzer, All the Shah’s Men, pg 49-50.

The theme of colonialism at its worst, and the brutal segregation accompanying it, is something that will act as a catalyst for many of the events to come, and we’ll talk more about conditions in Abadan later.

As the infrastructure matured and oil output increased, the Irans saw little of the resultant income. If you remember, in the granting of the D’Arcy concession, the Iranians, in addition to the £20,000 pounds given to the Shah, were to receive 16% of the profits. Well here is were the Iranians start to learn that lesson about not structuring deals based on variables outside of your control. The British have several mechanisms available to short change the Iranians, and they use them all.

First and foremost, Anglo-Persian sells most of the oil directly to the British navy at, or in many cases below, cost. Remember, to the British it’s all the same bank account, so their interest is to move the oil from Abadan into the ships of the Royal Navy and avoid any profits for Anglo-Persian, since they’d then have to given the Iranians their 16%.

In addition, the Anglo-Persian oil company throughout its entire history, never permits the Iranians to audit their books. Not once. This is huge. The entire deal is based on a percentage profit, and yet the Iranians have no ability whatsoever to verify that Britain is accurately reporting the amount of oil exported and thus verify the numbers given for revenue and profits. It’s a situation ripe for abuse, and the British take full advantage. In 1920, for example, net output was around 10 million barrels of oil. The royalties to Iran: £47,000 pounds. That’s about one dollar for every 200 barrels of oil.

As if that wasn’t enough, there is a lot of accusation that at some point Britain established secret pipelines from Abadan to funnel additional oil off the books. If that is true, and I file it in the category of “maybe”, who knows who much additional oil was quietly siphoned out of Iran. At the very least, it is extremely likely that the British vastly underreport the amount of oil leaving Abadan. It is in their interest to do so, and the Iranians, denied the right to audit, have no way of detecting it.

1914-1919: WWI and Anglo-Persian Agreement

As the First World War breaks out in 1914, Iran is still in the state of chaos that has followed the Constitutional Revolution and formation of the Majlis. The third sitting of the Majlis will convene later in the year, but like the previous two, it will quickly fall into disarray and disband. Russia has all but occupied the north, and the Ottoman Empire has pushed into western Iran. The British join the fray by occupying the south. In this melee, the needs of the civilian population are a distant second to the various empires securing their strategic interests, and WWI brings an immense amount of suffering in Iran. The consensus amongst modern historians is that between 5 and 10% of the Iranian population perished during the First World War, many from the influenza pandemic that ran roughshod over the malnourished Iranians.

Then in 1917, the Russian Empire suddenly falls in the Bolshevik Revolution. The Bolsheviks quickly move to cancel all debts owed by Iran, and to renounce the Anglo-Russian Convention of 1907, which had partitioned Iran into spheres of influence. As the war winds down, Iranians see a glimmer of hope. Maybe they’ll have a chance to develop their country without Imperial boots on their neck. They send a delegation to Paris for the peace conference in 1919 hoping to regain their lost territory and independance.

But Britain, it turns out, is not about to give up it’s control, especially now that the rival Russian empire has ceased to exist. For the British, Iran is no longer about maintaining a buffer state to protect their colonial holdings in India. Instead from this point on British actions in Iran are primarily about maintaining their monopoly on the unlimited supply of cheap oil.

And so, rather than reduce it’s control of Iran at the end of the war, Britain goes the other way. In 1919, as part of the redrawing of borders around the world at the Paris Peace Conference, Britain formulates the Anglo-Iranian Agreement, which essentially turns Iran into a vassal state of Britain. In order to get the agreement through the Majlis, the British, now quoting from Ansari’s “Modern Iran Since 1797”:

… duly set aside substantial funds – £131,000 – to grease the palms of deputies, working on the not unreasonable assumption that money would be required to “persuade” the deputies to vote the right way.

Ansari, Modern Iran Since 1797, pg 116.

Essentially the British simply bribe elected officials as they attempt to get the Anglo-Iranian Agreement through the Majlis. The response in Iran is violent. The view of Britain as oppressor is now fully developed, and outright revolts occur in some areas, especially the north where the nascent Soviet Union is supporting revolutionaries against domination by Britain.

1921: The Rise of Reza Shah

Out of this chaos emerges a military commander named Reza Khan, soon to be the new Shah. From Ansari:

On the night…of (February 21, 1921), Reza Khan, the commander of the Cossack Brigade based in Qazvin, entered Tehran and arrested some 60 prominent politicians, assured the (Shah) that he had come to save the monarchy from certain revolution, and then demanded the appointment of his co-conspirator, a liberal journalist from a prominent religious family, Seyyed Zia, as Prime Minister. The Shah swiftly conceded. By virtue of the ‘coup’, Reza Khan, a hitherto unknown figure, was thrust into the political limelight and at the age of 42 gained a seat in the cabinet with the newly created title of Army Commander. By May 1921, he had ousted Seyyed Zia and acquired the portfolio of Minister of War, spending the rest of the year consolidating his grip on the coercive machinery of the state… By 1923 he had been appointed Prime Minster, and by 1925 so complete was his apparent hegemony that a grateful Majlis deposed the now redundant dynasty and bestowed the royal dignity on Reza Shah Pahlavi, thereby establishing the Pahlavi dynasty…

Reza Khan’s emergence and dramatic rise was predicated not only on the new army which he had created and nourished, but on the initially unwavering support of key elements of the intelligentsia who, despairing of the political impotence of their country in the aftermath of the Constitutional Revolution and apparent failure of that revolution to yield the results they had hoped for, turned to a ‘saviour’… Reza Khan was a man of his time, as much a product of the exigencies of his age as a consequence of his own ambitions. He was the man on horseback, the saviour the intelligentsia craved and moulded to their desires.

… Good governance had to precede constitutional government and good governance required centralized and forceful authority. As in Europe in the eighteenth century, Iran was in need of its own ‘Enlightened’ despot, a ‘Persian’ Peter the Great, who could drag Iran kicking and screaming into the modern world…

• Ansari, Modern Iran Since 1797, pg 121-123.

If only Reza Khan had turned out to be the saviour that the intelligentsia hoped he would be. From the start his loyalties were suspect. It was true that Reza Khan had served with great distinction in the Russian founded Cossack regiment. Whenever there was unrest in the country through the early nineteen hundreds, Reza had been there to impose order, and the will of the Shah.

The problem was that the coup which placed Reza into power was not the organic populace-based movement which it was presented to be. And the people at the time knew it. Mainline historians will give varying degrees of credit to the British for organizing and backing Reza’s coup. The general consensus is that the British, frustrated by the chaos following their attempt to impose the Anglo-Persian Agreement at the end of World War One, decided to revert to an autocrat amenable to their goals.

Again from Ansari’s “Iran a Modern History Since 1797”:

It may be fair to say that British personnel facilitated the coup that had been long in the thoughts of a select band of Iranian conspirators (including a number of individuals who would go on to serve in Reza Shah’s government), by providing logistical support on the ground, and discouraging any doubts that may have lingered in Whitehall.

• Ansari, Modern Iran Since 1797, pg 125.

Provided logistical support on the ground. That’s a very charitable way of putting it. Mohammed Mossadeq, who I haven’t introduced yet but will be a key figure in our story, is less charitable in his assessment of the 1921 coup. Taken from Mossadeq’s Memoirs:

The Russian revolution, and the domestic preoccupations of the Soviet government, enabled Britain to take advantage of the circumstances and conclude the so-called (Anglo-Iranian) Agreement with Iran, which in reality was intended to turn Iran into a British protectorate. However, as this was not acceptable to the Iranian people, and met with their strong protest, it died a natural death. Hence, Britain changed its plans, and decided to resort to a coup d’etat (in 1921) to put a government in power that would be in complete command of every aspect of the country’s affairs – a government which would appoint the Majlis deputies to submit to all its demands and pass all its bills.

Mossadeq. Mossadeq’s Memoirs, pg 289.

1921 – 1945: The Good and Bad of Reza’s Rule

This issue of the Iranian people believing that Reza Shah’s rise to power had been at the very least facilitated by the British, will haunt him throughout his reign. The issue is complicated by the fact that Reza appears, in many ways, to have been truly nationalistic and also a modernizer. I believe that the reality of Reza’s rule is one fluctuating closeness with the British. In certain key events, it is evident the Reza is little more than a puppet, with Britain as the puppeteer. And yet, at other times, Reza does appears to be able to assert his own will, even to the detriment of British interests. In all likelihood Reza’s actions were defined by shifting loyalties themselves a function of the geopolitical tug of war occurring in Iran.

Probably the best way to concisely deal with the rule of Reza Shah is to provide a rundown of the changes he implemented, and then to talk about couple of key events that are important to our story, and which provide insight into the political realities for Reza.

First we should talk about the secularizing influence of Reza Shah on Iran. Though Reza had, in order to secure support of the clergy, feigned great piety in the few years directly preceding his ascension to power, the story was entirely different once he became Shah. The shift came as early as his coronation ceremony, from which Reza stripped virtually all of the traditional religious elements, and during which Reza insisted on placing the crown on his head himself, as opposed to the honor being bestowed, as was traditional, by the leading Imam.

It was a bad omen for the clergy. Reza moved swiftly to secularize Iranian society, and marginalize the control of the religious class. Taken from Abbas Milani’s biography of Reza’s son, the future Shah:

Reza Shah… moved aggressively to limit the role and number of the clergy in Iran. From the time he took over in 1925 to the time he left the country in 1941, through the population had more than doubled, the number of mosques had been reduced by half… The reduction in the total number of the clergy was even greater. He also moved to deprive the clergy not just of their revenues from running the judicial system, but of their lucrative guardianship of… religious endowments that covered such institutions as mosques, seminaries, and hospitals and that had been considered a crucial element in the backwardness of traditional Islamic economies.

• Milani, The Shah, pg 100.

In his move to transform Iran into a secular state, Reza Shah bans the self-flagellation and mutilation that were an intimate part of the expression of Shia Islam. He introduces a series of mandatory reforms on how Iranian’s dress. A new style of hat for men is made mandatory, and Iranian dress becomes progressively more Western. Reza goes as far as to ban the veiling of women in public.

At the same time this move to secularization is occurring, and one could say as part of that move, Reza introduces a public education system and established the Tehran University. This new education system integrates military drill, and lessons of the glorious history of the Persian empire, together with reading, writing, and arithmetic. Ansari describes the goals of Reza’s new education system as follows:

The militarization of education, exemplified by the imposition of drill, was indicative of the central philosophy behind education reform, which was to produce competent and loyal citizens – supportive of the state as defined by Reza Shah and able to operate the new industry which was being developed.

• Ansari, Modern Iran Since 1797, pg 160.

Reza Shah is obsessed with dragging Iran into the 20th century. Reza sets the country on an ambitious program of modernization, building factories and railways, revamping existing cities with modern roads and infrastructures, and building a modern workforce and economy. The metric system and modern calendar were adopted, surnames made mandatory, civil marriage and divorce instituted. The banditry, so prevalent outside the major cities, is brutally subdued.

It’s an immense amount of change in a relatively short period of time, and required a man of Reza’s iron will and brutality. From Kinzer’s “All the Shah’s Men”:

Time and again, Reza Shah resolved problems with this brand of brutal decisiveness. Once during a visit to Hamadan in western Iran, for example, he is said to have learned that people there were going hungry because bakers were hoarding wheat in order to drive up prices. He ordered the first baker he saw thrown into an oven and burned alive. By the next morning, every bakery in town was filled with low-priced bread.

Many Iranians were appalled by stories like these, but many others, remembering that their country had enjoyed glory only when it was ruled by a powerful leader, remained silent or applauded. None could deny Reza Shah’s achievements.

• Kinzer, All the Shah’s Men, pg 43.

Another story from July of 1935 demonstrates the resolve of Reza Shah. It surrounds the move by Reza to ban the veiling of women in public. A senior member of the clergy travelled to Tehran to seek an audience with the Shah and protest. Ansari picks of the story:

Once in Tehran, not only was he not permitted to see the Shah, but he was effectively placed under house arrest. When news of his predicament arrived in Mashad a large crowd gathered to protest at the shrine of Imam Reza (that’s a different Reza), the holiest shrine in Iran… Two days later a larger crowd gathered and this time, following direct instructions from the Shah, the troops, using machine guns, indiscriminately fired into the crowd resulting in the massacre of several hundred people.

• Ansari, Modern Iran Since 1797, pg 165.

This use of brutality by Reza extended to any potential political rivals. He was the quintessential strongman; he tolerated no dissent. In 1927 the socialist and communist parties are banned. In 1928, Reza sees that the election is rigged in order to ensure a pliant Majlis, and eliminate any who oppose his rule. The press, as a necessary part of this consolidation of power, are cowed. From Ansari:

There were of course critics both in the Majlis and in the press; these were gradually suppressed so that eventually the chorus sang with one voice. While Reza Khan sought to manipulate the Majlis elections in order to get an obedient chamber, his first task was to circumscribe the press, a relatively easier task given the continued existence of martial law. Recalcitrant and obstreperous newspaper editors were punished by floggings, or their newspapers were closed down.

• Ansari, Modern Iran Since 1797, pg 130.

Background: The Weaponization of the Press

I want to expand a bit on this topic of control of the press by the ruling class. Not only is this topic relevant later in our story, but the press is vital in any political arrangement in which the few seek to rule the many. Western democracies have long realized that an informed populace is vital to maintenance of freedom within a society. So important is the press as an institution, that most countries have long sought to secure for it special protections in their constitutions. The press is how we the people police those in power, for it is in the bringing of misdeeds to light that modern nations ensure that those in power act in the best interests of their electorate.

When the ability of the press to impartially report events is hindered, or when the press is coopted by the same ruling class that controls the mechanics of governance or big business, a society is in real danger. In such circumstances the press can easily become weaponized against the people, used to warp and even manufacture their view of reality. In representational forms of government, rule is by the masses. But if the opinions and perceptions of those masses are shaped by an organized press which is itself compromised, who truly rules?

I’ll spare you all the lecture on how I believe our society today is suffering from just such a cooption of power, with our mainstream media as the major tool wielded by those who seek to control. Even if you disagree with my application of this principal to our society today, you can only understand many historical events in general, and in particular many aspects of our story of what happened in Iran, if you understand this process of the press being used as a weapon by those who seek to rule. Like it or not, the use of the press as a weapon is a part of mainline history for as long as the press has existed.

To drive this point home, let me quote from a British Foreign Office assessment of the situation in Iran’s press towards the end of Reza’s reign:

The (Iraninan) press… is under strict government control. It confines itself almost entirely to the reporting of events. Editorials and original articles are more often concerned with the discussion in quite general terms of social objects which the government wishes to encourage than with internal events. Editorials on foreign and international affairs would involve the expression of opinions on these topics, a thing most carefully avoided except where Iran itself is directly concerned… and extremely venomous articles on the press of any country whose most insignificant journal happens to make a reference to Iran or its Royal Family that the Shah considers uncomplimentary. Pride of place in all papers is given to reports of activities of the Shah and Royal Family… All material of whatever nature is censored. Censorship is exercised by a Department situated in the Ministry of the Interior, on which the police, educational authorities, and the Ministry of Foreign Affairs are represented. Foreign news reports are controlled by a special organization known as Pars… The recently formed Institute for the Orientation of Public Opinion… is (used) to put before the public particular points of view… Lastly there is the Department of the Police which reads articles appearing in the press. It draws attention of editors to any points, requiring rectification, or any tendencies to be suppressed…

• Ansari, Modern Iran Since 1797, pg 168.

As we go through our story we’ll start to see many overt examples of the press being used to foment certain opinions, and push certain narratives. It is fair to say that without the press, the coup to come in 1953 would not have been able to get off the ground.

1921 – 1945: The Good and Bad of Reza’s Rule Con’d

Anyways, let’s return to our itemization of the achievements of Reza Shah, notorious and otherwise. Like all good dictators, Reza used his power to accrue an immense amount of wealth. There is some controversy as to the exact extent of this wealth, but by the end of his rule Reza is both the richest individual and the the largest landholder in all of Iran.

The changes and achievements of Reza Shah were not simply limited to reforming the domestic situation and enriching himself. In the field of foreign affairs Reza was extremely active. It is here that the duality of Reza, sometimes being seen to oppose the British and work in the true national interest, and at other times appearing to be a mere puppet, come sharply into focus.

Ervand Abrahamian in his book “The Coup” does a good job summarizing some of Reza’s moves to assert increased Iranian independence from British control.

(Reza) scraped the 1919 Anglo-Iranian Agreement; signed a neutrality treaty with the Soviet Union; eased out British military and financial advisors, reduced the number of foreign consulates; ended all nineteenth-century extraterritorial privileges known as Capitulations; took over the British owned Telegraph Company and Imperial Bank; and preferred to hire technicians from France, Germany, Italy, Czechoslovakia, and Switzerland – anywhere by Britain.

• Abrahamian, The Coup, pg 27-28.

Two of these actions are worth commenting briefly on.

First, is Reza’s abolishment of Capitulations or Capitulatory Rights. Capitulatory Rights were the custom, prevalent in Iran, of offering extra-judicial rights to any foreigners. Essentially all foreign citizens were given a form of diplomatic immunity. In striking down Capitulatory Rights, foreigners were suddenly subject to the Iranian legal system. It goes without saying that this move ran contrary to the wishes of the British.

Of perhaps even more importance was Reza’s move to establish the National Bank of Iran, designed to be the central bank, usurping the operations of the British-owned Imperial Bank of Persia in controlling the money supply and government accounts.

Then comes the event that most historians will point to as the strongest evidence of Reza’s true nationalism and willingness to move against British interests. Kinzer provides the traditionally given narrative of this event:

As Reza consolidated his rule over Iran, he cast a scornful eye on (Anglo-Persian Oil Company) and the D’Arcy concession that was its central asset. The company’s profits were reaching astronomical levels, the means by which it calculated Iran’s 16-percent royalty were becoming more questionable, and the gap between the living conditions of its British and Iranian employees widened steadily. In 1928 Reza, who was by then Reza Shah, directed his ministers to seek a new and more equitable accord with the company. The British did not take him seriously. For four years they turned aside his demands with a combination of refusals and delays. While he stewed, the worldwide depression spread and the royalties Anglo-Persian paid to Iran began to shrink. Finally and inevitably, Reza Shah exploded in anger. At a cabinet meeting on November 26, 1932, he cursed his ministers for their failure and demanded to be shown the file of documents covering the four years of talks. When it was brought to him, he cursed some more and then threw the entire file into the blazing stove. The next day, he notified Anglo-Persian that he had cancelled the D’Arcy concession.

(As a side note here, this action of cancelling the D’Arcy concession was received with jubilation in Iran. People celebrated in the streets and National holidays were declared. Kinzer continues:)

This act (he means Reza’s cancellation of the D’Arcy Concession), if allowed to stand, would have meant the end of Anglo-Persian’s operations in Iran and, in effect, the death of the company. British officials were in turn shocked, outraged, and desperate. They appealed to the League of Nations, only to be met with a scathing counterattack from Iranian representatives who charged that Anglo-Persian had systematically falsified its accounts and cheated Iran out of its legitimate royalties. Sir John Cadman, Anglo-Persian’s chairman, realized that he had to negotiate directly with Reza Shah whose coronation he had attended eight years earlier. Cadman flew to Tehran, and the two old friends took only a few days to reach a compromise. Under its terms, the area covered by the D’Arcy concession was reduced by three-quarters, Iran was guaranteed payments of at least £975,000 annually (that’s actually an error on the part of Kinzer – the actual payment guaranteed in the 1933 agreement between Reza and Cadman was only £750,000), and the company agreed to improve working conditions at Abadan. In return, Reza Shah extended the concession, which was to expire in 1961, for an additional thirty-two years. It was also agreed that since the Shah did not like the name Persia, the company would henceforth be known as the Anglo-Iranian Oil Company.

• Kinzer, All the Shah’s Men, pg 51.

Now you can take the above at face value if you want. Reza finally had enough of Britain cheating Iran on the oil royalties, and forced the British to come to a better agreement. And, indeed at face value the 1933 agreement would appear to be in Iran’s favour.

However, if you dig deeper into the 1933 agreement, it quickly becomes apparent that it is a horrible deal for the Iranian’s in almost every aspect.

First, the massive reduction in the amount of land covered by the concession included only the land that Britain had determined, through detailed surveying, was devoid of oil; the land conceded back to Iran was worthless. Second, the guaranteed payments of £750,000 annually were far below the average payments that had already been paid in the preceding 10 years. With output continuing to rise dramatically, the £750,000 floor on payments had no real value. And finally, the promise to improve working conditions for Iranians was left completely undefined and not measurable.

In exchange for that, Iran extended the British monopoly on Iranian oil for another 32 years! This is a horrible deal. In researching I was very surprised that mainline histories to not seem to realize how awful this deal is for Iran, nor do they seek to explain how and why the Iranians agreed to such a one-sided agreement. Heck, one of the main complaints the Iranians had was that the refusal of Anglo-Persian to allow Iran to audit their books was resulting in untold millions in profits being left undeclared. And yet, the 1933 agreement studiously avoids the topic of the Iranian right to audit. Under the terms of the agreement Iran will just have to continue blindly trusting Anglo-Persian to honestly report profits. It makes no sense.

It makes even less sense that it was Reza personally, who after standing up to Anglo-Persian, so completely caved. From Abrahamian’s “The Coup”:

Hassan Taqizadeh, a member of the negotiating team and veteran statesman… later told Parliament that the Shah for unknown reasons had personally intervened in 1933 and ordered the negotiators to settle on these unfavourable terms. In private conversations with the Guardian (Manchester), he confessed he had been taken aback by the Shah’s sudden settlement. The only explanation he could offer was either “(Anglo-Persian) pressure” or a “private deal”.

• Abrahamian, The Coup, pg 29.

So why did Reza back down? What did that Iranian negotiator mean about “Anglo-Persian pressure” or a “private deal”.

Well, on the topic of pressure, that was indeed something being applied by the British. The Royal Navy had moved into the Persian Gulf in a show of force and as a warning to Iran. Britain also had their assets on the ground start fomenting unrest in the tribal areas, and the threat of the entire south declaring independence and succeeding from Iran was taken with great concern in Tehran. It is quite possible that the meeting between Reza and the chairman of Anglo-Persian which lead to the 1933 agreement was an exercise in Britain reminding Reza that he could be removed from power just as easily as he had been placed into it. This could be sufficient to explain Reza’s sudden capitulation.

And of course, we’ve already seen in our story the willingness of the British to grease palms when palms needed greasing, and we also know that Reza was illicitly massing a fortune. Perhaps the 1933 agreement is the result of a combined carrot and stick approach by the British.

A case can even be made for going even one step further: It is plausible that then entire situation was fabricated from the start to secure the extension to the concession. This is the version of events believed by many Iranians at the time. The editor of Mohammed Mossadeq’s memoirs, Homa Katouzian, provides an 80 page introduction that is a fascinating read. Here’s his take on the event:

Many Iranians, including Mossadeq, have believed that the 1933 Oil Agreement was concluded by a carefully orchestrated plot, with Britain as conductor and Reza Shah as the lead instrument. The theory runs along the following lines. As the major shareholder of the Anglo-Persian (later Anglo-Iranian) Oil Company, the British government had decided to have the D’Arcy concession extended by thirty years, from 1960-1990. The decision was delivered to Reza Shah who – as the chief British agent in Iran – naturally agreed to cooperate. And they agreed to a face-saving formula for its implementation: APOC would suddenly reduce Iran’s revenues to a quarter of the previous year to provoke apparent anger and frustration on the part of the Iranian government. Wearing the mask of an enraged Iranian leader, Reza would order (as in fact he did) the unilateral abrogation of the D’Arcy concession by the cabinet. Britain would then begin sabre rattling and, at the same time, take the matter to the League of Nations. With the implicit help and cooperation of Iran’s representatives, the League would resolve to recommend a settlement of the matter through bilateral negotiations between the two governments. The negotiations would end up with a new agreement which would further benefit Britain by extending the concession period, without any real gain (as in fact turned out to be the case) by Iran.

• Mossadeq. Mossadeq’s Memoirs, pg 14-15.

So there is debate to be had as to whether this was all a setup from the start, or whether the initial abrogation of the agreement by Reza was for legitimately nationalist reasons, and Reza only later folded under pressure. Regardless, there can be no doubt that in the end Britain came out the winner. And, even if it is untrue that the whole thing was a setup from the start, the fact that many Iranians believed that it was is relevant. What people think is true is what often matters in the shaping of future events.

1939-1945: WWII Occupation and the Abdication of Reza Shah

This brings us up to 1939 as World War Two breaks out. Initially Iran is kept out of the war, with Reza declaring neutrality, but when Hitler invades Russia in 1941, German troops start moving through Russia towards the oil fields in mountains of the Caucasus and Baku, that is the Germans start moving towards Iran. In addition, the railway through Iran is now suddenly the key lifeline keeping the beleaguered Soviet Union from complete collapse.

For their part the British approach the Iranians and requests that oil royalty payments be suspended for the duration of the war, which the Shah refuses. The British are also making a lot of noise about the Nazi sympathies of the Shah, witnessed by the many German foreign nationals living in Iran and operating many of the key industries and the railroads, brought in as part of Reza’s drive to modernization. Though Iran moves to expel Germans from the oil rich southern regions to assuage the fears the British have of sabotage, it is too little, too late.

From Abbas Milani’s biography of Reza’s son, soon to be the new Shah:

Bullard (the British ambassador in Iran), poignantly captured his government’s frustrations with Reza Shah when he wrote that “Reza Shah has twisted the lion’s tail often enough over the oil concession to get the erroneous idea that our patience is almost unlimited.” The angry notes Britain delivered to Iran on those August days signaled the end of the “lion’s patience”…

Reza Shah… failed to recognize how serious the British and Soviet governments were about the Nazi threat, and this failure provided the British and Soviet governments with the excuse they so desperately needed for their planned invasion of Iran. Finally, around four o’clock in the morning on August 25, 1941, in an operation code-named Countenance, the British and Soviet forces invaded from the south and the north.

• Milani, The Shah, pg 75-76.

The much-vaunted Iranian military, in which Reza had invested so much energy and treasure, collapsed in a matter of days. There was never a real fight; Iranian soldiers simply changed into civilian clothes, burned their uniforms, and walked away.

Coinciding with the invasion is an equally devastating propaganda campaign targeting Reza. Again described by Milani in his book The Shah:

On the night after the invasion, the BBC began a series of programs attacking Reza Shah for his despotism, his breach of the constitution, and the millions and millions of dollars he had allegedly stashed away in banks, domestic and foreign. It was a “seven days weekly Persian program” to expedite “the recommendations of the Embassy in Tehran,” particularly in criticizing Reza Shah.

The country was mesmerized by these nightly programs. In Tehran, streets emptied as the hour of the nightly broadcast neared. They were a potent brew of gossip and politics, facts and fictions, and real news and fantastic rumors. The Persians, who had long believed in the omnipotence of the “British hand,” and had always assumed the BBC to be nothing but a handmaiden of British power and the voice of the empire, construed the broadcasts as a clear indication that Reza Shah’s days were now numbered…

As to the issue of the BBC attacks on Reza Shah, the embassy of course repeated, as was its wont, that the BBC was altogether independent from the British government. In fact, during those months, directions for the programs critical of Reza Shah and suggestions on their content were sent from the British embassy in Iran. Even before these attacks began, the British government had decided to retool its propaganda in Iran…

One of the most incendiary parts of the new programs attacking Reza Shah were allegations about his massive fortune, much of it allegedly ill-gotten and stashed away in foreign accounts. Sometimes exact and, by the standards of the time, astronomical estimates of Reza Shah’s fortune were given by the BBC. Based on these reports, it was not hard to assume that the British government and the BBC must have had detailed knowledge about Reza Shah’s wealth.

Milani, The Shah, pg 80-83.

So here we have a well documented example of the British government using the BBC to run a propaganda operation with the goal of undermining and deposing the leader of a foreign nation. And it works brilliantly. Coupled with the threat of an imminent Soviet invasion, on September 3rd, 1941, Reza Shah abdicates in favour of his son Mohammed, and heads into exile in South Africa a broken man.

Now, indulge me some speculation here: The ability of Britain to use the BBC so effectively to undermine Reza Shah in 1941, raises the question as to why this tool was not employed during the supposedly tense standoff between Reza and the British a few years earlier over the cancellation of the D’Arcy concession in 1932? It is a question without a great answer if Reza were indeed acting against British interests in 1932. However, if the events of 1932 were indeed part of an elaborate and coordinated plan between Reza and the British as I have speculated above, the British government keeping their BBC attack dog on a leash in 1932 makes more sense. Again, this is just speculation on my part, but interesting to contemplate.

Anyways, with the invasion of Iran complete, and with Reza Shah off in South Africa, the British seize complete control of Iran. The suffering of wartime and the heavy hand of the British can’t help but further embitter the Iranian people. From Abrahamian’s “The Coup”:

Anti-British sentiments increased even more after Reza Shah’s abdication, in part because of the Allied invasion, and in part because the Allied occupation necessitated daily British involvement in internal Iranian affairs – in the choice of ministers in Tehran; in the appointment of governors in the provinces; in the election of deputies to the Majlis; in the negotiations with local tribal chiefs; in the buying of food supplies from landlords; in the recruitment of local labor; and in the selection of military commanders, police chiefs, town mayors, and even village heads in Khuzestan, To oversee the occupation, Britain opened consulates in almost every city… British presence seemed all-pervasive.

Not surprisingly, Britain became identified as part and parcel of the national power structure. Bullard, the British ambassador who rarely minced his words, admitted that Britain… bore the brunt of complaints about wartime deprivations – inflation, food shortages, transport dislocations, and the breakdown of authority…

…For most Iranians the main national enemy was Britain.

• Abrahamian, The Coup, pg 30-31.

1942: The Formation of Tudeh

In the middle of WWII, into the discontent following the occupation of Iran by Britain and the Soviet Union, a new political party is birthed: Tudeh. Initially Tudeh, while socialist in nature, was not Marxist and was not controlled by, or identified with, the Soviet Union. But, if there’s one thing communists are quite effective at, it’s the infiltration and cooption of existing organizations. And that’s quickly the fate of Tudeh which, by the end of the war, is essentially run by pro-Soviet elements.

Tudeh worked at the grass-roots level, largely ignoring the urban centres to take their message of rule by the proletariate to the peasants in the countryside. They made effective use of radio in order to reach a population which was still largely illiterate.

While Tudeh will never yield real power in Iran, it will still play an important role in our story. To British, and later American, interests, it will represent the scourge of communism threatening to consume Iran from the inside. To the Soviet’s, Tudeh represents a foothold in Iran, able to be leveraged both as an intelligence network, and also as a way of attempting to push back against complete domination of Iran by Western powers.

1946: Start of the Cold War

During the war the three occupying powers, Britain, the Soviet Union, and towards the end of the war the US, agreed jointly that they would all withdraw their forces from Iran within six months following the end of hostilities. But as the war winds down in 1945, the coveting of oil again results in Iran becoming the victim of geo-political ambitions. This time the oil in question is in the north of Iran. This time it is the Soviets, who move to destabilize Iran to secure their interests. From Milani’s “The Shah”:

At the end of hostilities in Europe, the United States and Britain swiftly abided by their earlier pledges and withdrew their forces from Iran. Stalin had other plans, and the first hints of them came during the Potsdam Conference in July-August 1945. At that time, the Soviet Union announced its intention to keep its troops in Iran past the agreed date.

Two years earlier, in June 1943, unbeknownst to the Shah and the Iranian government, the Soviet Union had dispatched to Iran’s northern provinces geologists disguised as military engineers. Their mission was to explore for gas and oil. They concluded that oil and gas reserves in Iran’s northern provinces “were not less than those controlled by the British” in the South…

With the war’s end in sight and the Soviet Union’s power and status increasingly recognized and feared around the world, the vast oil riches of Iran’s northern provinces finally convinced Stalin to make his move.

• Milani, The Shah, pg 115.

The move that Stalin makes is to use Tudeh and other assets in northern Iran to create a new autonomous Azerbaijan and also support the Kurds in their ambitions for independence. Realistically, the Soviet Union, with 600,000 men in Iran could easily have just taken the north of Iran by force, but in all likelihood this would have provoked an immediate and harsh reaction from Britain and the US, and perhaps even led to a direct confrontation between the major powers. So instead Stalin arms his allies in the north, supports their declaration of a people’s republic, and then prevents the Iranian military from mounting any response. Essentially Stalin is attempting to birth a new Soviet socialist republic carved out of the north of Iran in order to secure Soviet access to the oil.

Many historians will date the start of the cold war to this crisis in northern Iran. At the new UN, the Americans apply pressure to the Soviet Union to back down, and President Truman ultimately sends the Soviets an ultimatum to leave Iran or else. In the end, the superpowers wind up horse trading countries, and Stalin withdraws. In a letter written by Stalin to the head of the newly formed people’s republic in Azerbaijan announcing the decision to abandon the project in northern Iran, Stalin explains the reality:

…we (can) no longer keep Soviet troops in Iran, mainly because the presence of Soviet troops in Iran undercut the foundations of our liberationist policies in Europe and Asia. The British and Americans said to us that if Soviet troops stay in Iran, then why could not the British troops stay in Egypt, Syria, Indonesia, Greece and also the American troops in China… therefore we decided to withdraw troops from Iran and China, in order… to unleash the liberation movements in the colonies.

• Milani, The Shah, 125.

In addition, there is a somewhat complicated set of negotiations between the Prime Minister of Iran and Stalin in which an agreement in principal is reached to grant the Soviets an oil concession in the north. This concession is never ratified by the Majlis, but in the meantime Stalin has pulled his troops out, and the Iran military has retaken Azerbaijan. The first crisis of the cold war is over.

Now the traditional telling of this story is essentially that the dastardly Soviets took advantage of the British and American withdraw at the end of WWII to attempt to carve off a big piece of Iran for themselves. And I think there’s some truth to that. But Abrahamian in his book “The Coup” does a good job explaining that there is more to the story.

…As early as September 1944, …the Soviet Union publicly demanded an oil concession in northern Iran. But this demand – which some pinpoint as the very start of the Cold War… – was itself prompted by rumors in the Majlis that representatives from Western oil companies were in Tehran actively seeking secret new oil deals. These rumors were soon verified by the (British) Foreign Office and (US) State Department. In September 1943 – a full year before the Soviet demand – Standard Vacuum, owned jointly by Standard Oil of New Jersey and Socony-Vacuum, had quietly initiated negotiations for a concession in the southeastern province of Baluchestan… Hot on the footsteps of Standard Vacuum came Sinclair Oil and Royal Dutch Shell… Negotiations soon expanded from Baluchestan to other parts of Iran, including the provinces on the Soviet border…

…The U.S. embassy reported that the shah and prime minister both favored the American companies and intended to give Standard Oil a concession in the north – but only after the war, when Soviet troops had left Iran…

The Soviet demands – coming three months later – caused considerable soul searching. The British consul in Mashed later wrote in his memoirs that what had turned “Russia from hot-war ally to cold-war rival” was the “vigorous American intervention to capture the Persian market, especially the efforts of Socony-Vacuum to secure oil prospecting rights.” Another Foreign Office expert complained privately that the (US) State Department had “done its best” to “create a scare about the Soviet menace” with a series of “sensationalist reports.” The U.S. embassy speculated that the probable aim of the Russians was not to actually get the oil for themselves but to “keep others out of the north.” Similarly, George Kennan, the American charge d’affaires in Moscow and architect of the policy of containment during the Cold War, informed the secretary of state:

The basic motive of recent Soviet action in northern Iran is probably not need for oil itself but apprehension of potential foreign penetration in that area coupled with concern for prestige.  The oil of northern Iran is important not as something Russia needs but as something it might be dangerous for anyone else to exploit.  The territory lies near the vital Caucasian oil center which so closely escaped complete conquest in the present war.  The Kremlin deems it essential to its security that no other great power should have even the chance of gaining a foothold there.  It probably sees no other was to assure this than by seeking greater political and economic control for itself.

In short, what triggered the first Cold War crisis in Iran was not the Soviet oil demand in 1944 but the secret bids by American and British companies in 1943 to obtain their own oil concessions – especially in northern Iran.

• Abrahamian, The Coup, pg 38-41.

This alternative explanation for the Soviet actions at the end of WWII stands in stark contrast to the simplistic “Stalin is bad” way that most modern histories present these events. Stalin was indeed bad, and he was also a man to take advantage of situations. But, in this case, the actions of Western oil companies negotiating for oil concessions on the Soviet border likely forced Stalin to make a move. As quoted above, key statesmen at the time concurred with this assessment of events, even if most modern historians ignore or gloss over it as a causal factor in the Soviet actions in Iran.

1946: Oil Strike

If you remember back to the oil agreement of 1933, one of the terms of the new agreement was that working conditions in Abadan would be improved for the Iranian labourers. Having secured their 30 year extension to the concession, the British promptly renege on this promise. From Kinzer’s all the Shah’s men:

(AIOC) never complied with its commitment under the 1933 agreement with Reza Shah to give laborers better pay and more chance for advancement, nor had it built the schools, hospitals, roads, or telephone system it had promised. Manucher Farmanfarmaian, who in 1949 became director of Iran’s petroleum institute, was appalled by what he found at Abadan:

Wages were fifty cents a day.  There was no vacation pay, no sick leave, no disability compensation.  The workers lived in a shantytown called Kaghazabad, or Paper City, without running water or electricity, let alone luxuries such as iceboxes or fans.  In the winter the earth flooded and became a flat, perspiring lake.  The mud in town was knee deep, and canoes ran alongside roadways for transport.  When the rains subsided, clouds of nipping, small winged flies rose from the stagnant waters to fill the nostrils, collecting in black mounds along the rims of cooking pots and jamming the fans at the refinery with an unctuous glue.

Summer was worse.  It descended suddenly without a hint of spring.  The heat was torrid, the worst I've ever known - sticky and unrelenting - while wind and sandstorms whipped off the desert hot as a blower.  The dwellings of Kaghazabad, cobbled from rusted oil drums hammered flat, turned into sweltering ovens...  In every crevice hung the foul, sulfurous stench of burning oil - a pungent reminder that every day twenty thousand barrels, or one million tons per year, were being consumed indiscriminately for the functioning of the refinery, and AIOC never paid the government a cent for it.

To the management of AIOC in their pressed ecru shirts and air-conditioned offices, the workers were faceless drones... In the British section of Abadan there were lawns, rose beds, tennis courts, swimming pools and clubs; in Kaghazabad there was nothing - not a tea shop, not a bath, not a single tree.  The tiled reflecting pool and shaded central square that were part of every Iranian town, no matter how poor or dry, were missing here.  The unpaved alleyways were emporiums for rats.  The man in the grocery store sold his wares while sitting in a barrel of water to avoid the heat,  Only the shriveled, mud-brick mosque in the old quarter offered hope in the form of divine redemption.

• Kinzer, All the Shah’s Men, pg 67-68.

These conditions, coupled with the emergence of a highly organized socialist party like Tudeh, made labour unrest inevitable. In 1946, major demonstrations by workers in Abadan begin, starting with a protest of 80,000 people on international communism day, May 1st. By July things come to a head as AIOC, ever obtuse to the mood their workers, decides to stop paying workers for Fridays, which workers take off as the Muslim holy day. This sparks a massive strike.

With more that 75% of Iranian workers enrolled in the Tudeh controlled unions, the impact to AIOC’s operations is massive. But AIOC is not about to cave to worker demands, and two British warships are soon visible off-shore to remind the workers where the real power lies. Martial law is declared and demonstrations are suppressed by authorities firing into crowds of protestors. Dozens are killed and hundreds wounded.

Ultimately the strike ends when AIOC agrees to many of the demands for better working conditions, and also rescinds its decision to suspend Friday pay. AIOC never follows through on its promises to improve conditions for workers, and also, following the settlement of the strike moves swiftly to punish the strike leaders and ensure they are removed as potential organizers of future unrest. Says Abrahamian:

Technically the company did not fire union organizers. Instead, it gave local authorities a list of such organizers, who were promptly arrested. After seven days, according to the Labor Law, the company could lawfully lay them off on grounds they had been absent without proper leave.

• Abrahamian, The Coup, pg 21.

This round of labor unrest, though it seems to accomplish little, is important because it marks a major milestone in the journey of Iranians towards organized resistance. This is really the first time we see large scale resistance from everyday Iranians. And the British, by refusing to compromise and doubling down on colonial-style tactics, are all but guaranteeing the growth of this resistance movement. At this point the major question is what form will the resistance take? Will it be Tudeh dominated, and ultimately co-opted by the Soviets, or will it be something else?

1947: Nationalism Rises

It is at this time that the Majlis finally reasserts itself into Iranian politics as a force for change. The Majlis had been long cowed, first by the dominating authoritarian rule of Reza Shah, and then by the Allies during the World War Two occupation. But in 1947, seemingly against all odds given the extent of British interference in the electoral process of Iran, new leadership emerges willing to confront Britain and the AIOC directly.

From Kinzer’s “All the Shah’s Men”:

In 1947 (the Majlis) passed a bold law forbidding the grant of any further concessions to foreign companies and directing the government to renegotiate the one under which Anglo-Iranian was operating.

The law was the first blow in a long battle. It set Iran on the course of cataclysmic confrontation with Britain. The deputy who wrote it and pushed it through the Majlis had been an active nationalist in the early years of the century but was forced out of politics by Reza Shah and had lived in obscurity for twenty years. Now he was back, as fervent a defender of Iranian interests as ever. His name was Mohammed Mossadeq.

• Kinzer, All the Shah’s Men, pg 52-53.

Background: Mohammad Mossadeq

As this quote says, Mossadeq had been around Iranian politics for a very long time. Born to a wealthy family, he was elected to the first Majlis way back in 1906, but having not reached the age of 30, was not permitted to take his seat. Instead, he travelled to Europe, and obtained a law degree before returning to Iran during the First World War to reenter politics.

Before I go further, let me give you a disclaimer. I am somewhat enamoured with Mossadeq. I am exceedingly wary of placing public figures, especially politicians, up on pedestals. But there are times when you encounter individuals in history that are worthy of your respect and admiration. In my opinion Mossadeq is such a person. He’s not perfect. He has all manner of strange quirks and idiosyncrasies. But from everything I have been able to read, he was steadfast and iron-willed in his relentless drive to act in the best interests of Iran, no matter the cost or risk.

Two major beliefs shaped Mossadeq: First, he was committed to rule of law, and its application to everyone, including the ruling class. Second, he believed that Iran must stop being used as a puppet exploited by foreign nations, and instead rule itself for the benefit of the its own people.

In a country bathed in corruption, Mossadeq stood out by being incorruptible. This is a guy who had the habit of peeling apart the plies of his kleenexes because he believed that using both plies together was an unnecessary luxury and wasteful.

When he was 16 years old he was appointed to his first government post as a chief tax auditor in an Iranian province. Even at this young age he established a reputation for routing out corruption. A series of government postings followed, with his reputation as a champion of the people growing.

Kinzer continues the story:

After Reza Khan came to power in 1921, he tried to make use of Mossadeq’s evident talents. Theirs was a short and unhappy partnership. Mossadeq first became minister of finance, a post for which he was eminently qualified, but upon taking office he launched an anti-corruption campaign that threatened Reza and his friends, and was soon forced to resign. Next, he was named governor of the Azerbaijan province, where the Soviets were trying to stir up a separatist rebellion, but quit when Reza refused to given him authority over troops stationed there. Then he served for a few months as foreign minister. Finally he concluded that Reza shared neither his democratic instincts not his anti-imperialist creed. He quit the foreign ministry, ran for a seat in the Majlis, and was elected easily. He was now a free agent, and soon he emerged as one of Reza’s sharpest critics.

• Kinzer, All the Shah’s Men, pg 57.

I’ll continue with Kinzer’s summary of Mossadeq’s career leading up to 1947 in a minute, but I want to fill in some gaps in Kinzer’s narrative. First, as we’ve discussed, opposing Reza Shah in anything was a good way to get thrown in prison or worse. And Mossadeq didn’t just quit as Reza’s foreign minister and win a seat in the Majlis. What Mossadeq actually did was to openly oppose Reza becoming Shah in the Majlis with a fiery speech warning against Reza’s looming dictatorship: “Was it to achieve dictatorship that people bled their lives away in the Constitutional Revolution? If they cut off my head and mutilate my body, I would never agree to such a decision.”

Once Reza was made Shah over Mossadeq’s objections, Mossadeq refused to take his oath as a Majlis deputy because it included a vow to obey the Shah. Ultimately, Reza had Mossadeq arrested and imprisoned without charge in 1940. Mossadeq, a man prone to raw emotional displays, made multiple suicide attempts during his captivity.

Returning to Kinzer’s description of Mossadeq:

He had developed a deep understanding of his country, its political system, and above all its backwardness, much of which he attributed to the rapacity of foreign overlords. Yet he was never truly part of any establishment, political or otherwise. Many rich and influential Iranians considered him a class traitor because of his insistence on judging them by the letter of the law. Even some of his supporters chafed at the intense self-confidence that often led him to dismiss his critics as either rogues or fools.

Mossadeq’s appearance was as strikingly unusual as his character. He was tall, but his shoulders slumped down as if they were bearing a heavy weight, giving him the image of a condemned man marching stoically toward execution. HIs face was long, marked by sad-looking eyes and a long, very prominent nose that his enemies sometimes compared to a vulture’s beak. His skin was thin and pasty white. But for all that, he moved through life with a determination that many of his countrymen found impressive to the point of inspiration. In intellect and education he towered above almost all of them, a drawback for a politician in some countries but not in Iran, where those who do not live the life of the mind have always admired those that do. His arrival in the Majlis marked the beginning of a new stage in his remarkable career, as one of his cousins recalled in a memoir:

With his droopy, basset-hound eyes and the high patrician forehead, Mossadeq did not look like a man to shake a nation..  To his mind the parliament was the only mouthpiece of the people of Iran.  No matter how rigged the election or how corrupt its members, it was the only body that did not depend for its power either on outside influence or on the (*royal*) court, but on the authority of the constitution.  The Majlis became his soapbox.  Elected to it time and again by the people of Tehran, he used it to denounce the misconduct of the British and the Russians, and later the Americans.  When he said, "The Iranian himself is the best person to manage his house," he was stating not only a conviction but a policy that he was to pursue with unwavering purpose until his picture had appeared on the cover of Time magazine and he had thoroughly shaken the foundations of the world's oil establishment.

Although Mossadeq championed Iranian self-determination, he had little faith in his fellow deputies, and few escaped the lash of his tongue.  He accused them of cowardice, of lacking initiative, and worst of all being unpatriotic.  His fulminations at the podium were both frightening and theatrical.  Gesturing wildly, his hand unconsciously wiping away the famous tears that sprung unbidden from his eyes at times of nervousness or rage, he pilloried his listeners with the righteousness of a priest who suffers with his victims even as he unmasks them...  Distinguished, highly emotional, and every inch the aristocrat, he believed so totally in his own country that his words reached out and touched the common man.  Mossadeq was Iran's first genuinely popular leader, and he knew it.

• Kinzer, All the Shah’s Men, pg 57-58.

I’ll wind up building quite a bit more on Mossadeq’s character as our story continues. But I do want to take a minute now to comment of two aspects of Mossadeq that will be on full display:

First, is Mossadeq’s health. Mossadeq had the unusual habit of conducting much official business from his bed in his silk pyjamas. This is not unlike Winston Churchill, albeit minus the brandy of which Churchill was so fond. Mossadeq’s health was not good. There was a reason he appeared so gaunt and frail. As a young man studying abroad he had developed ulcers and stomach ailments that were apparently quite severe and plagued him the rest of his life. Rarely was Mossadeq able to eat a full meal, and he was often left malnourished and in pain. This led to weakness and the famous fainting spells. While the ailments from which he suffered were most definitely real, it doesn’t mean that at times Mossadeq didn’t appear to use those ailments and his weakened state for effect. The problem is that it is sometimes difficult to tell when Mossadeq is embellishing his suffering for effect, and when he is genuinely debilitated; the reality was undoubtedly a mix of both.

The next aspect of Mossadeq to comment on is his raw emotion, most obviously on display in the form of tears which would stream down his cheeks as he made impassioned speeches. He was highly theatrical, and again it is hard to always separate when we are seeing real core of Mossadeq, and when we are seeing a show that is being put on by Mossadeq.

Background: Mohammad Reza Pahlavi

Mossadeq’s rise to influence coincided with the Majlis starting to assert itself more and more, and regain some of its originally intended powers of governance. This acquisition of authority by the Majlis by definition required a corresponding reduction in the power of the Shah to rule as an autocrat.

Now remember that Reza Shah had been forced into exile during World War Two, and upon his abdication it was his son, Mohammad, who had ascended to the throne. I know I just took a long side track from our main story line to introduce Mohammad Mossadeq, but please indulge me a shorter introduction for Mohammad Reza Pahlavi, the new young Shah who will battle Mossadeq for control of Iran.

Mohammad Reza was only two when his father led the coup that would culminate in him taking the throne and establishing the Pahlavi dynasty. Mohammad’s formative years were a mix of watching his father rule Iran, and education obtained abroad. He was, as you might expect, a bit of a spoiled brat. Upon arriving at the first private school in Switzerland, Mohammad is promptly expelled by the headmaster for what amounts to his arrogance which resulted in him being blackballed by the other boys.

Mohammad is then moved to another boarding school in Switzerland, this one catering primarily to the sons of elite American families. Milani’s “The Shah” captures the story:

He had arrived at the school in a canary-yellow Hispano-Suiza (think a Rolls Royce but even more exotic). He was not alone; his entourage included a chauffeur, a footman, a valet, and “a spectacularly handsome, silver-haired old gentleman who… was a Persian diplomat of high rank.”

As the young boy descended from the Hispano-Suiza, he looked at this peers “with a stare that he must have intended to be regal.”
…
School officials greeted the Iranian Crown Prince with due deference, bowed and beamed with joy, and led the young boy to his quarters… The one special privilege afforded the Iranian Crown Prince was that, unlike all other students, he had a room to himself.

The Crown Prince spent the next few moments overseeing “the unpacking of his impedimenta (such a collection of baskets, coffers, hampers, trunks, boxes, and suitcases can hardly be called baggage).” By the time he finished and returned to the yard it was early afternoon. One can only imagine the anxieties and trepidations in Mohammad Reza’s young mind as he was about to leave behind the insulated safely of solemnities that define royal status. If the story of his expulsion from the first school is indeed correct, he had already learned the hard way, that when bereft of the protections and privileges of rank, he did not have the “technologies of self” to cope with the real world.

A small bevy of boys had huddled around a bench “that ringed the dignified old tree” whose majestic silhouette had become part of the school’s logo. Immersed in their conversation about baseball and Babe Ruth, they failed to notice the arrival of their new peer – the boy they eventually came to call Pahlavi. By the time the two boys finally noticed him, he was “stalking up and down like an angry tiger,” about three feet away from the tree and the bench.

Pahlavi had apparently been pacing angrily for some moments. Suddenly, he stopped, made an angry sweep of his right arm and using what sounded to the boys like a “mixture of French and Hollywood-gangster English,” made it clear that the students who were sitting should stand up. Assuming he wanted to sit down, the boys, engrossed in their baseball talk, moved to clear a small corner of the bench for the angry newcomer.

But a mere place on the bench was not what Pahlavi wanted. What he wanted them to know, the boys soon learned, was that people usually stood in the presence of the Crown Prince of Iran. Imbued by his father’s nationalistic pride, pampered by a doting mother and dutifully supplicant servants, the young Mohammad Reza had developed not just a fierce sense of nationalism, but an exaggerated set of expectations of what being a Persian crown prince could or should beget him in the world. He was about to discover the harsh realities of the world outside the Court cocoon.

By then other boys had gathered around the tree. Some snickered, while others made derogatory comments. “Pahlavi’s royal dignity was shattered. He flew at the nearest boy, who happened to be (an American boy named) Charlie Childs, and seized him by the throat.” Before long Charlie had the better of the Crown Prince, who was “panting on the ground and Charlie was straddling the royal chest, pummelling the royal face.”

After a couple of minutes the boyish melee came to an end, and the young Pahlavi was grunting for mercy. “His black hair dank and falling over his eyes, his face scratched and bleeding, his shirt torn, he slowly got to his feet.” His next move, like his initial attack, surprised the students. He smiled, “shook Charlie’s hand a couple of times, and patted him on the back…” From then on he lived amicably with the other students. They accepted him as equal.

• Milani, The Shah, pg 45-46.

By his own account, Mohammad’s time at the private school in Switzerland was the happiest and most content of his life. He excelled in sports, wrote for the school paper, and overall seemed to have been well liked by his peers, despite the special privileges he was granted at the school.

Mohammad would return to Iran five years later, when his father Reza Shah was at the height of his power. Reza took Mohammad under his wing, involving Mohammad in the day to day details of running the state. For his part Mohammad appears to have been a highly intelligent individual, with a good grasp of how the political game in Iran was played.

Mohammad deviated from his father in many several respects. First and foremost, was his timidity. Mohammad from the time he was very young, showed repeatedly a tendency to sulk and grow depressed when things didn’t go his way, or when he faced a challenge to implementing his will. This was overlaid with an inferiority complex. Mohammad was, I think, acutely aware that his position had been given to him, and that he had done nothing to earn it. He was always very threatened when true leaders appeared and challenged his authority, especially if they were supported by the people.

He was obsessed with fast cars and beautiful women. By the time his reign ends in 1979 he had acquired a collection of many hundreds of exotic cars (with some estimates putting the collection at 3000), and had gone through three wives. His second wife, married when he was 32 was a mere 16 years old, and his third wife, who he married when he was 40 years old was at least a legal adult, at 21. Between his marriages and likely throughout, Mohammad had a reputation for being a womanizer, and would often be seen around Tehran in one of the expensive vehicles from his collection, with his fling of the moment.

To be fair to Mohammad, I think we have to acknowledge that he had been placed in an almost impossible situation. He was all too aware that he served at the pleasure of the British, the very sacking of his father which had placed him on the throne being a poignant reminder of that reality. Even if Mohammad had wanted to act in the best interests of the Iranian people, there were severe constraints on what he could actually do, lest the British decide it was time to retire the Pahlavi dynasty. As Iranians more and more demanded true autonomy from their British overlords, Mohammad was, in a very real sense, caught between a rock and a hard place. This does not to excuse his subsequent actions, but it is important to keep in mind that Mohammad, for all his wealth and overt opulence, has severe constraints on how he can wield power, especially in the realm of foreign affairs and most importantly when it comes to the oil concession.

Feb. 1949: Assassination Attempt on the Shah

In contrast to his father, Mohammad (who I’ll simply refer to as the Shah from this point onwards) was strongly religious, and believed that divine intervention had three times saved him from certain death. The last of these occasions segues us back into our story in the year 1949, as Mossadeq and the resurgent Majlis is starting to challenge the authority of the Shah, and erode his power.

Milani’s “The Shah”, tells the story of the assassination attempt as the Shah arrives at Tehran University to attend a ceremony:

As the Shah neared the steps leading to the school building, Fakhr Arai, standing near the steps pulled out a revolver he had hidden inside the camera case and began to shoot at the Shah, point-blank. He was nervous. His hands shook. He had been planning for this moment for at least three years. The fact that the Shah was left with no protection after the first shot afforded Fakhr Arai no help. Upon hearing the first shot, the head of the Shah’s security detail hit the pavement and crawled under the safety of the Rolls-Royce. Members of the welcoming team all took refuge inside the building. The assassin’s first three bullets only grazed the Shah’s hat. The fourth bullet entered his cheek and and exited from his upper lip. Several of his front teeth were knocked out…

…the assassin had only two (bullets) left in his revolver’s chamber. There is something cinematic in the Shah’s description of what happened next. “There we stood facing each other… with no one between us. I knew there was no good reason why the next bullet (wouldn’t) hit me. I fully remember my reactions in those split seconds. I thought maybe I should jump him, but then realized that such a move would make me an easier target, and if I tried to escape I figured, he would shoot me in the back.”

Left with no good alternatives, the Shah decided on what he called “a series of acrobatic moves, employing a military tactic to confound the shooter.” He describes how he moved to the right and then to the left, and how he swayed forward and backward, all in a few split seconds…. “The next bullet… wounded my shoulders.” There was now only one bullet left. So far the assassin’s failure of marksmanship, or the Shah’s agility of movement, had saved him. What would same him now. The last bullet jammed in the chamber…

The assassin angrily threw his revolver at the Shah and ran toward the grassy knoll a few steps away… Before he could reach the gate, soldiers jumped on him… Within minutes of the failed attempt on the Shah’s life, rifle butts and bullets fired point-blank had killed Fakhr Arai…

In the paranoid world of Iranian politics, the questionable decision of the Shah’s guards to kill the assassin led to a plethora of conspiracy theories, including one that implicated those at the scene.

• Milani, The Shah, pg 131-132.

As for the Shah he would later point the finger in several different directions. From the Shah’s own book “Answer to History”:

Arai was involved with an ultraconservative religious group that was comprised of the most backward religious fanatics. We also found Communist literature and brochures in his home relating to Tudeh, the Iranian Communist party. Significantly or not, the Tudeh happened to be holding its national congress at the time of the attempted assassination. And there was a third connection: Arai’s mistress was the daughter of the British embassy’s gardener.

The British always had their fingers in strange pies. The were always interested in forging links with diverse groups in nations they wished to control, and they had long exercised a good deal of control over Iran. There is little doubt that London was involved with Tudeh in various ways, and of course the British had ties to the most reactionary clergy in the country.

… All this is conjecture, but persuasive conjecture for me. The roots of my downfall grew deep and in many places. By 1949 I had announced plans to revise the constitution so the king would have the power to dissolve parliament. The would have destroyed the parliamentary oligarchy then ruling Iran and sharply increased royal power, the last thing Britain wanted. Her policy needed a malleable king.

Mohammad Pahlavi, Answer to History, pg 59-60.

There is much to comment on in the Shah’s take on events. First, clearly the Shah, in casting blame on Tudeh and the British, is trying to set himself up as the heroic figure, standing up for Iranians in the face of foreign pressures. That is not accurate. The Shah might be right about the British trying to infiltrate various groups in Iran, including Tudeh, and there was indeed communist literature found in Arai’s apartment. But Arai’s involvement with Tudeh had been years ago, brief, and had culminated in him being banned from the party for vocalizing his desire to kill the Shah.

Likewise it’s pretty clear that the British did not, at this time, have any desire to get rid of the Shah, who was proving to be easily controlled and pliant to the British agenda. To put a finer point on it, if the British had decided it was time for the Shah to go, they likely wouldn’t have stopped at one attempt.

So if Arai wasn’t acting on behalf of Tudeh, and if he wasn’t a British operative, who was he? Well, it turns out he was essentially a run of the mill Islamic fundamentalist whack-job who maintained a soft spot for communism, and had tried to assassinate the Shah two other times in the preceding year.

In the Shah’s telling of events, one of the reasons the British would want him gone was that he was consolidating powers to oppose the Majlis, against British interests. This is complete nonsense.

First of all, the British specifically wanted a strong Shah. The stronger the Shah, the easier it was for the British to achieve their goals, since the Shah didn’t dare go against the British wishes in important matters.

Secondly, the British were watching the resurgent Majlis with great trepidation. They could see the danger of Mossadeq and the nationalism that was bubbling beneath the surface. For the British the best path forward was to neuter the Majlis, and concentrate power in their pawn the Shah.

The Shah’s assertion that the British may have attempted to assassinate him because he was acquiring power, specifically the power to dissolve parliament, is factually incorrect. This additional power was only proposed and granted after the assassination attempt. This time discrepancy is an important point, and it puts the lie to the entire narrative the Shah recounts about his stance against British domination. The truth is the Shah, with the support of the British, launched a massive power grab in the days following the assassination attempt, using the resultant tide of public support and sympathy to implement all manner of changes.

From Kinzer’s “All the Shah’s Men”:

All evidence suggested that the failed assassin was a religious fanatic, but the Shah ignored it and accused Tudeh of organizing the attempt. He banned it and imprisoned dozens of its leaders.

Seizing on public sympathy that the shooting had generated, the Shah also took several other steps to increase his power. He ordered the creation of a second legislative chamber, the Senate, which had been authorized by the 1906 constitution but never established; he liked the provision that gave him the right to appoint half the senators. Then he persuaded the Majlis to pass a bill allowing him to dissolve both chambers and call new elections at his pleasure. Finally, and perhaps most importantly, he won from the Majlis a change in the way prime ministers were appointed. Under the constitution, the Majlis chose them and the Shah gave his assent. Now the system would work the other way, with the Shah choosing and the Majlis voting afterward to confirm or reject his nomination.

Mohammad Reza Shah took all these steps with the discreet advice and support of the British. For many years, British officials had taken it as a matter of simple logic that since they had such a vital commercial stake in Iran, they must keep it stable and friendly. Without their assent, Mohammad Reza would not have been able to ascend to the throne, and he fully understood the debt he owed them.

Kinzer, All the Shah’s Men, pg 66.

So essentially the Shah, supported by British, following the Kissinger’s adage of never letting a good crisis go to waste, capitalize on the assassination attempt to make a series of changes designed to bolster their control of Iran, specifically going after Tudeh and the Majlis, both organizations starting to cause headaches for Britain with respect to their access to Iranian oil.

There is an additional action the Shah takes as he cleans house in the wake of the assassination attempt: He exiles Ayatollah Kashani, probably the most vocal and political cleric of the time, and a figure who will quickly return to the forefront of Iranian politics to play a key role in our story.

Spring 1949: Supplemental Agreement Proposed

So we’ve gone down quite a rabbit hole here in order to build out the key characters of our story moving forward. With that task completed, we’re well positioned to now resume the story.

If you recall, we left off in 1947, with the resurgent Majlis passing legislation requiring renegotiation of the D’Arcy concession with AIOC. The assassination attempt on the Shah is then used to shift several key powers from the Majlis to the Shah, something very much in British interests given the increasingly belligerent attitude of the Majlis.

Anyways, these negotiations around the D’Arcy concession will drag on for two years and eventually, in the Spring of 1949, what becomes known as the Supplemental Agreement is proposed as the outcome of these negotiations. Or, more precisely, the CEO of AIOC, Sir William Fraser, delivered to the lead Iranian negotiator a final, non-negotiable offer.

This offer was, in essence, another screw job, just like the 1933 agreement had been. The basic terms of the offer were to increase the payments per ton of oil from four to six shillings, to calculate Iran’s 20% royalty on a pre-tax basis, as opposed to the current post-tax basis, and to increase the minimum annual royalty from the £975,000 to £4 million. In addition lip service was given to the same promises made, but never implemented, in the 1933 agreement: Improved working conditions, more Iranian’s in leadership positions, etc.

This proposed agreement had all kinds of problems, many of them the same ones that the 1933 agreement had. First of all, the proposal maintained the secrecy of Anglo-Iranian’s books. As in the past, the Iranians would just have to take Anglo-Iranian’s word for it when it came to determining the volume of exports and profits used to calculate the royalty paid to Iran.

Next, consider the increase on the quantity of oil being produced by Anglo-Iranian coupled with the increase in inflation between 1933 and 1949. Total Iranian oil exports had more than doubled between those years while at the same time the value of a barrel of oil denominated in British pounds had also more than doubled. A bit of math here tells us that the increase in minimum annual royalties from £975,000 to £4 million was required simply to keep the minimum royalty in 1949 equivalent on a per barrel basis to that of 1933, when factoring in the increased production and price of oil.

Essentially all Iran is really getting from the Supplemental Agreement is the change to calculate their 20% royalty on a pre-tax basis, but even that, given the inability of Iran to audit AIOC’s books, is easily manipulated by the British.

Also in common with 1933 agreement, is the meddling of the Shah personally to get the deal approved by the Iranian negotiating team. From the editor’s forword to “Mossadeq’s Memoirs”:

According to a highly revealing private letter written by (the lead Iranian negotiator) just after signing the new agreement, he had been under pressure by the shah, (prime minister) (as well as AIOC) to settle for less than he could have obtained.

(Now quoting directly from that letter)

Thank God the oil business is finished and the Supplemental Agreement has now been signed...  But I should tell you one thing in confidence.  If it had not been for the interferences of the prime minister and the person of His Majesty, I would have hoped for more.  Unfortunately, these gentlemen's political considerations, and their regard for political expediencies reduced the freedom of action which I had enjoyed in the earlier months.  And the fellows (*i.e. the British*), too, had realized that I was all on my own, and that the (*Shah and prime minister*) no longer supported my views as much as they could.  Otherwise, they would even have gone higher than this amount.

• Katouzian, Mossadeq’s Memoirs, Editor’s Introduction, pg 24.

On July 17, 1949, the cabinet, under orders from the Shah, passes the Supplemental Agreement. A final hurdle remains: The agreement must be ratified by an increasingly resistant Majlis. As told by Kinzer:

Many members of the Majlis publicly denounced the Supplemental Agreement even before the cabinet accepted it. Others turned against it when Finance Minister Golshayan, whose position should have made him a faithful servant of the British, presented a fifty page report he had commissioned from Gilbert Gidel, a renowned professor of international law at the University of Paris, that documented the accounting tricks by which Anglo-Iranian was cheating Iran out of huge sums of money. One outraged deputy, Abbad Iskandari, gave an impassioned speech denouncing the agreement that finished with a warning so far-reaching that even he may not have grasped its implications. Iskandari demanded that Anglo-Iranian begin splitting its profits with Iran on a fifty-fifty basis, as American oil companies were doing in several countries. If it refused, he warned, Iran would “nationalize the oil industry and extract the crude itself.”

The Majlis’ term was expiring and elections were approaching. Many deputies did not want to anger the Shah by voting against the Supplemental Agreement, but given the highly agitated state of public opinion they could hardly vote in favor. They chose to filibuster. For four days the Majlis chamber echoed with long denunciations.. of the agreement. Finally the clock wound down. The Supplemental Agreement was left to the next Majlis.

• Kinzer, All the Shah’s Men, pg 69.

Fall 1949: Rigged Elections and National Front Forms

As you might imagine, the Shah was not pleased with this turn of events. He quickly moved to remedy the situation by blatantly rigging the next election. The problem was the extent of the election fraud was so overt that it couldn’t help but spark massive outcry on both the part of cheated politicians and the general public. Here Mossadeq steps forward into a leadership role as described by Abrahamian in “The Coup”:

(Mossadeq) led a peaceful procession from his house… to the royal (palace)… protesting ballot stuffing by the interior ministry and the armed forces. He announced that the demonstration would have only one slogan – silence – and would scrupulously observe Gandhi’s principal of nonviolence…

At the palace gates, the court minister… after some bargaining, permitted twenty into the royal gardens. Mossadeq had threatened to take bast (remember that’s the Iranian form of religious sanctuary) at a major mosque or shrine – such a bast had sparked the famous constitutional revolution. The new protest became know as the Palace Garden Sit-In. Lasting four full days and nights, it ended only when the Shah, threatened by a hunger strike, promised fair and honest elections… Their aim was to transform the “defective” and “sham” democracy into a real one by strengthening the electoral system, restricting martial law, keeping the armed forces out of the whole process, and strengthening the independence of the press.

• Abrahamian, The Coup, pg 52-53.

The hunger strike was definitely one reason for the Shah caving to Mossadeq and the other protestors and agreeing to new elections. Another major reason was that the Shah had plans to leave for a trip to the United States to attempt to secure additional military aid and funding, and couldn’t leave with such a potentially explosive event unfolding at his own palace.

As with the Constitutional Revolution in 1906, the Palace Garden Sit-in had the effect of concentrating the major political reformers in one place, for a prolonged period, and under conditions that could not help but forge deep friendships and solidarity. The Shah, by overreaching in the election rigging of 1949, succeeded only in unifying his opposition. Described by Kinzer:

…the Shah returned to Iran to find his adversaries better organized than ever. His agreement to cancel the results of his rigged election had shown the limits of his power. It also had another, more far-reaching effect. After leaving the palace grounds following their successful sit-in, twenty of the triumphant protesters met at Mossadeq’s house and made a historic decision. They resolved to build on their victory by forming a new coalition of political parties, trade unions, civil groups, and other organizations devoted to strengthening democracy and limiting the power of foreigners in Iran. They christened it the National Front, and by unanimous vote chose Mossadeq as its leader. With a formal organization behind him for the first time and aroused public opinion on his side, the sixty-seven-year-old patriarch now had all the tools he needed to launch his shattering challenge to the political order.

• Kinzer, All the Shah’s Men, pg 71.

Conclusion

And this brings us to the end of this episode. In the next episode I’ll cover the rise of soon to be prime minister Mohammad Mossadeq, his unilateral nationalization of the AIOC, and the predictable and violent response of the British as they attempt to bring Mossadeq to heel.

Outro

I’m Greg Campbell, and you’ve been listening to the Pivotal History podcast.

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