Iranian coup d'état of 1953: Background

Background

Nineteenth century

Throughout the nineteenth century, Iran was caught between two advancing imperial powers, Russia, which was expanding southward into the Caucasus and central Asia, and Britain, which sought to dominate the Persian Gulf, the Red Sea, and India. Between 1801 and 1814 Iran signed treaties with Britain and France with an eye toward blocking Russian expansion. After two wars with czarist Russia, from 1804–13 and 1826–28, Iran ceded large tracts of territory to Russia, establishing the modern boundaries between those countries. Britain fought a war with Iran over Afghanistan in 1856–57 after which Afghanistan became independent. In 1892, the British diplomat George Curzon described Iran as "pieces on a chessboard upon which is being played out a game for the dominion of the world.

In 1872, a representative of Baron Paul Reuter, founder of the news agency, met with Naser al-Din Shah Qajar and agreed to fund the Persian monarch's upcoming lavish visit to Europe in return for broadly worded concessions in Persia, which was the country name through the centuries until 1935 when Reza Shah renamed it Iran. The concession the Shah had given to Reuter was never put into effect thanks to violent opposition from the Persian people and from Russia.

Early petroleum development

Template:See In 1901, Mozzafar al-Din Shah Qajar, the Shah of Persia, granted a 60-year petroleum search concession to William Knox D'Arcy. D'Arcy paid £20,000, according to journalist-turned-historian Stephen Kinzer, and promised equal ownership shares, with 16% of any future profit. However, the historian L.P. Elwell-Sutton wrote, in 1955, that "Persia's share was "hardly spectacular" and no money changed hands.

The (Persian) government was promised 20,000 British pounds in cash and 20,000 in shares in the first company to be formed by the concessionaire. In addition it was to receive 16 per cent of the profits made by this or any other company concerned in the concession. As it turned out D'Arcy did not even have to put his hand in his pocket. The First Exploitation Company was duly formed on May 21, 1903, with an issued capital of 500,000 British pounds in 1 pound shares, 30,000 of which were presented to the Shah and 20,000 to other "leading personalities". The additional 30,000 in shares was felt to be adequate to take the place of the promised 20,000 pounds in cash, and so no cash payment was ever made. The remainder of the shares were issued in London.

On July 31, 1907, D'Arcy withdrew from his private holdings in Persia. "A new agreement was signed under which he transferred to the Burmah Oil Company all his shares in the First Exploitation Company, and with them his last direct interest in the exploitation of oil in Persia." D'Arcy received 203,067 British pounds in cash (more than ten times what the Persian monarch was supposed to have received in cash for the concession) and D'Arcy received 900,000 shares in the Burmah Oil Company, which the historian Elwell-Sutton declared was "a large sum."

In early 1908, the British-owned Burmah Oil Company decided to end its exploration for oil in Persia but on May 26, oil came in at a depth of 1,180 feet, "a gusher that shot fifty feet or more above the top of the rig," Elwell-Sutton wrote. "So began the industry that was to see the Royal Navy through two world wars, and to cause Persia more trouble than all the political manoeuvrings of the great powers put together."

The company grew slowly until World War I, when Persia's strategic importance led the British government to buy a controlling share in the company, essentially nationalizing British oil production in Iran. It became the Royal Navy's chief fuel source during the war. BBC News reports that at the time of the coup, Iran's oil was Britain's single largest overseas investment, but this assertion is not cited nor is to be readily found in other sources, including Google Books. It seems likely that the BBC was conflating/confusing 'Britain's largest single overseas investment' with 'World's largest refinery at Abadan'. The British angered Iranians by intervening in Iranian domestic affairs including in the Persian Constitutional Revolution (the transition from dynastic to parliamentary government).

Post-World War I

The Persians were dissatisfied with the royalty terms of the British petroleum concession, the Anglo-Persian Oil Company (APOC), whereby Persia received 16 per cent of net profits.

In 1921, a military coup d'état—"widely believed to be a British attempt to enforce, at least, the spirit of the Anglo-Persian agreement" effected with the "financial and logistical support of British military personnel"—permitted the political emergence of Reza Pahlavi, whom they enthroned as the "Shah of Iran" in 1925. The Shah modernized Persia to the advantage of the British, and most likely the Nazis as well, as one result was the Persian Corridor railroad. Wikipedia, always fighting for the rights of the rich and possessed, sweeps gloriously past the issue of Nazi use of the railroad built by Britain for Britain with the phrase, "It is likely that Turkey, neutral until 23 February 1945, when it declared war on Nazi Germany, did not allow for war supplies to pass through into the Black Sea until that date." quite right, slick British military and civil transport used the Corridor during World War II.

In the 1930s, the Shah tried to terminate the APOC concession, but Britain would not allow it. The concession was renegotiated on terms again favorable to the British. On 21 March 1935, Pahlavi changed the name of the country from Persia to Iran. The Anglo-Persian Oil Company was then re-named the Anglo-Iranian Oil Company (AIOC).

World War II

In 1941, after the Nazi invasion of the USSR, the British and Commonwealth of Nations forces and the Red Army invaded Iran, to secure petroleum (cf. Persian Corridor) for the Soviet Union's effort against the Nazis on the Eastern Front and for the British elsewhere. Britain and the USSR deposed and exiled the pro-Nazi Shah Reza, and enthroned his 22-year-old son, Mohammad Reza Pahlavi, as the Shah of Iran.

The British secured the oilfields and the seaports.

During the war, Iran was used as a conduit for materiel to the USSR. US forces also entered the country replacing British in operating the southern part of the Trans-Iranian Railway.

Post-World War II

The western Allies withdrew from Iran after the end of the war. The Soviet Union remained and sponsored two "People's Democratic Republic"s within Iran's borders. The resulting crisis was resolved through diplomatic efforts in the new United Nations and US support for the Iranian army to reassert control over the breakaway areas. The Soviet-Iranian oil agreement was not ratified.

After the war, nationalist leaders in Iran became influential by seeking a reduction in long-term foreign interventions in their country—especially the oil concession which was very profitable for Britain and not very profitable to Iran. The British-controlled AIOC refused to allow its books to be audited to determine whether the Iranian government was being paid what had been promised. British intransigence irked the Iranian population.

U.S. objectives in the Middle East remained the same between 1947 and 1952 but its strategy changed. Washington remained "publicly in solidarity and privately at odds" with Britain, its WWII ally. Britain's empire was steadily weakening, and with an eye on international crises, the U.S. re-appraised its interests and the risks of being identified with British colonial interests. "In Saudi Arabia, to Britain's extreme disapproval, Washington endorsed the arrangement between ARAMCO and Saudi Arabia in the 50/50 accord that had reverberations throughout the region."

Britain faced the newly elected nationalist government in Iran where Mossadegh, with strong backing of the Iranian parliament, demanded more favorable concessionary arrangements, which Britain vigorously opposed.

The U.S. State Department not only rejected Britain's demand that it continue to be the primary beneficiary of Iranian oil reserves but "U.S. international oil interests were among the beneficiaries of the concessionary arrangements that followed nationalization."

U.S. reluctance to overthrow Prime Minister Mossadegh in 1951, when he was elected, faded 28 months later when Dwight D. Eisenhower was in the White House and John Foster Dulles took the helm at the State Department. "Anglo-American cooperation on that occasion brought down the Iranian prime minister and reinstated a U.S.-backed shah."

1950s

See Wikipedia articles: Abadan Crisis, Abadan Crisis timeline

Prime minister Mohammad Mosaddegh shaking hands with Mohammad-Rezā Shāh Pahlavi

In 1951, the AIOC's resistance to re-negotiating their petroleum concession—and increasing the royalty paid to Iran—created popular support for nationalizing the company. In March, the pro-Western PM Ali Razmara was assassinated; the next month, the parliament legislated the petroleum industry's nationalization, by creating the National Iranian Oil Company (NIOC). This legislation was guided by the Western-educated Dr. Mohammad Mosaddegh, then a member of the Iranian parliament and leader of the nationalization movement; by May, the Shah had appointed Mosaddegh Prime Minister.

Mohammad Mosaddegh attempted to negotiate with the AIOC, but the company rejected his proposed compromise. Mosaddegh's plan, based on the 1948 compromise between the Venezuelan Government of Romulo Gallegos and Creole Petroleum, would divide the profits from oil 50/50 between Iran and Britain. Against the recommendation of the United States, Britain refused this proposal and began planning to undermine and overthrow the Iranian government.

That summer, American diplomat Averell Harriman went to Iran to negotiate an Anglo-Iranian compromise, asking the Shah's help; his reply was that "in the face of public opinion, there was no way he could say a word against nationalization". Harriman held a press conference in Tehran, calling for reason and enthusiasm in confronting the "nationalization crisis". As soon as he spoke, a journalist rose and shouted: "We and the Iranian people all support Premier Mosaddegh and oil nationalization!" Everyone present began cheering and then marched out of the room; the abandoned Harriman shook his head in dismay.

The National Iranian Oil Company suffered decreased production, because of Iranian inexperience and the AIOC's orders that British technicians not work with them, thus provoking the Abadan Crisis that was aggravated by the Royal Navy's blockading its export markets to pressure Iran to not nationalize its petroleum. The Iranian revenues were greater, because the profits went to Iran's national treasury rather than to private, foreign oil companies. By September 1951, the British had virtually ceased Abadan oil field production, forbidden British export to Iran of key British commodities (including sugar and steel), and had frozen Iran's hard currency accounts in British banks.

The United Kingdom took its anti-nationalization case against Iran to the International Court of Justice at The Hague; PM Mosaddegh said the world would learn of a "cruel and imperialistic country" stealing from a "needy and naked people". Representing the AIOC, the UK lost its case. In August 1952, Iranian Prime Minister Mosaddegh invited an American oil executive to visit Iran and the Truman administration welcomed the invitation. However, the suggestion upset British Prime Minister Winston Churchill who insisted that the U.S. not undermine his campaign to isolate Mosaddegh: "Britain was supporting the Americans in Korea, he reminded Truman, and had a right to expect Anglo-American unity on Iran."

In mid-1952, Britain's boycott of Iranian oil was devastatingly effective. British agents in Tehran "worked to subvert" the government of Mosaddegh, who sought help from President Truman and then the World Bank but to no avail. "Iranians were becoming poorer and unhappier by the day" and Mosaddegh's political coalition was fraying.

In the Majlis election in the spring of 1952, Mosaddegh "had little to fear from a free vote, since despite the country's problems, he was widely admired as a hero. A free vote, however, was not what others were planning. British agents had fanned out across the country, bribing candidates, and the regional bosses who controlled them. They hoped to fill the Majlis with deputies who would vote to depose Mosaddegh. It would be a coup carried out by seemingly legal means."

While the National Front, which often supported Mosaddegh won handily in the big cities, there was no one to monitor voting in the rural areas. Violence broke out in Abadan and other parts of the country where elections were hotly contested. Faced with having to leave Iran for The Hague where Britain was suing for control of Iranian oil, Mossadegh's cabinet voted to postpone the remainder of the election until after the return of the Iranian delegation from The Hague.

By mid-1953 a mass of resignations by Mossadegh's parliamentary supporters reduced parliament below its quorum. A referendum to dissolve parliament and give the prime minister power to make law was submitted to voters, and it passed with 99 percent approval, 2,043,300 votes to 1300 votes against.

While Mosaddegh dealt with political challenge, he faced another that most Iranians considered far more urgent. The British blockade of Iranian seaports meant that Iran was left without access to markets where it could sell its oil. The embargo had the effect of causing Iran to spiral into bankruptcy. Tens of thousands had lost their jobs at the Abadan refinery, and although most understood and passionately supported the idea of nationalization, they naturally hoped that Mosaddegh would find a way to put them back to work. The only way he could do that was to sell oil."

Worried about the Britain's other interests in Iran, and believing that Iran's nationalism was Soviet-backed, Britain persuaded Secretary of State John Foster Dulles that Iran was falling to the Soviets—effectively exploiting the American Cold War mindset. While President Harry S. Truman was busy fighting a war with in Korea, he did not agree to overthrow the government of Prime Minister Mohammad Mosaddegh. However, in 1953, when Dwight D. Eisenhower became president, the UK convinced him to a joint coup d'état.