All the Shah’s Men (11 page)

an unabashed dishonesty, fatalistic outlook, [and] indifference to suffering…. The ordinary Persian is vain, unprincipled, eager to promise what he knows he is incapable or has no intention of performing, wedded to procrastination, lacking in perseverance and energy, but amenable to discipline. Above all he enjoys intrigue and readily turns to prevarication and dishonesty whenever there is a possibility of personal gain. Although an accomplished liar, he does not expect to be believed. They easily acquire a superficial knowledge of technical subjects, deluding themselves into the belief that it is profound.

To deal with such people on an equal or respectful basis would, of course, be absurd. Instead, the Foreign Office devised a three-pronged strategy to bring them back under control. First, Mohammad Reza Shah should be persuaded to dissolve the Majlis. Second, he should appoint Sayyed Zia, the aging British favorite who had helped Reza Shah come to power thirty years earlier, as prime minister. Third, the Truman administration in Washington should be urged “at least not to indicate any disagreement or divergence from our point of view.” As this policy was being formulated, Anglo-Iranian decided to prove its resolve by reducing the living allowances it paid to Iranian workers. Thousands walked off the job in protest.

Soon afterward, the British began sending warships to the waters off Abadan. By mid-April three frigates and two cruisers were lurking within sight of the refinery. This raised tensions even higher. Oil workers poured defiantly onto the dusty streets, and a series of brawls left six Iranians, two British oil workers, and a British sailor dead. Some Iranians concluded that the British had embarked on a deliberate campaign of provocation in order to provide a pretext for military intervention.

Ambassador Shepherd believed he could bring the situation back under control if Iran had a new and more decisively pro-British prime minister. He insisted that the Shah nominate Sayyed Zia, and the Shah dutifully agreed. The Majlis scheduled a vote on his nomination for April 28. That morning, Shepherd issued a statement asserting that His Majesty’s government would not negotiate anything under the threat of nationalization. With this show of strength and his friend Sayyed Zia at the head of government, he calculated, events would begin moving in a different direction. It was a highly unrealistic scenario and showed once again how completely the British had misjudged Iran’s mood.

Not even the most fervent nationalist, however, could have predicted what happened when the Majlis assembled to debate Sayyed Zia’s nomination. All eyes were, of course, on Mossadegh, the hero of the hour. Everyone expected him to lead the opposition with one of his withering tirades against the British and their traitorous errand-boys. But when the speaker asked who wished to begin the debate, Mossadegh sat quietly and expressionless. A prominent right-wing deputy named Jamal Emami, who was on the British payroll, took the floor instead. Emami did not even mention Sayyed Zia. Instead he launched into a bitter attack on Mossadegh, pillorying him for having plunged the Majlis into immobility and paralyzed the country with his constant carping. If the old man wanted a real challenge, Emami said scornfully, he should try being prime minister himself and see how difficult the job was. Mossadegh had several times turned aside suggestions that he take over the government, and Emami said he knew the reason why: Mossadegh was one of those irresponsible windbags who delight in making speeches about how wrong everyone else is, but never offer anything positive.

The chamber fell silent as Emami finished. Mossadegh waited for a long moment and then rose to his feet. Speaking slowly and deliberately, he said that he was honored and grateful for the suggestion that he become prime minister and would in all humility accept. Everyone was stunned, Emami most of all. Soon the shock turned to pandemonium. A formal motion was made that Mossadegh be named prime minister, and the speaker called for an immediate vote. It passed by a margin of seventy-nine to twelve.

Sensing the power he held at that moment, Mossadegh said that he would serve as prime minister only if the Majlis also voted to approve an act he had drawn up to implement the nationalization of Anglo-Iranian. Under its provisions, a parliamentary committee would audit Anglo-Iranian’s books, weigh the claims of both sides for compensation, begin sending Iranians abroad to learn the skills of running an oil industry, and draw up articles of incorporation for a new National Iranian Oil Company. The Majlis approved it unanimously that very afternoon.

The unthinkable had now happened. Mossadegh, the symbol of Iranian nationalism and resistance to royal power, had suddenly arrived at the pinnacle of power. It was a moment of exhilaration but also of profound uncertainty. Everyone understood that a clash of titans was approaching. No one dared to guess what it might mean for Iran and the rest of the world.

CHAPTER 6

Unseen Enemies Everywhere

On the morning of June 26, 1950, millions of Iranians and millions of Americans gathered apprehensively around their radios. All knew they would hear news that might reshape their lives forever. Most were grave and fearful. The crisis that was gathering in Iran, however, had nothing to do with the one suddenly gripping the United States.

That day in Iran, the Shah announced that he would nominate General Ali Razmara, the ill-fated army commander, as prime minister. In shops, factories, and tea houses across the country, people huddled to ask one another what this might mean. Would Razmara be able to strike a last-minute deal with the British? If not, what would happen? Might British troops invade Iran? Would there be a revolution? Was the nation headed toward redemption or catastrophe?

Americans were preoccupied with very different news. Communist soldiers had just poured across the thirty-eighth parallel in Korea and were racing southward. The United Nations Security Council met in emergency session and warned the invaders that if they did not withdraw, war would follow. Since both of the world’s superpowers had nuclear arsenals, many Americans feared that Armageddon was at hand.

The huge gap between what preoccupied Iranians and what preoccupied Americans on that June day reflected the obsessions that gripped their countries as the second half of the twentieth century began. Iranians were marching toward a thrilling but also terrifying confrontation with Great Britain and its Anglo-Iranian Oil Company. Americans faced a prospect no less sobering. The war in Korea was final proof that their country was now locked in a worldwide struggle against a fearsome adversary.

In ways that neither nation yet understood, these two crises would ultimately become one. The United States, challenged by what most Americans saw as a relentless communist advance, slowly ceased to view Iran as a country with a unique history that faced a unique political challenge. Its duel with Britain became subsumed in the East–West conflict.

A great sense of fear, particularly the fear of encirclement, shaped American consciousness during this period. Allied leaders who met at Potsdam two months after the end of World War II pledged to cooperate “on a democratic and peaceful basis,” but behind their generous words lay deep mistrust. Soviet power had already subdued Latvia, Lithuania, and Estonia. Communist governments were imposed on Bulgaria and Romania in 1946, Hungary and Poland in 1947, and Czechoslovakia in 1948. Albania and Yugoslavia also turned to communism. Greek communists made a violent bid for power. Soviet soldiers blocked land routes to Berlin for sixteen months. In 1949 the Soviet Union successfully tested a nuclear weapon. That same year, pro-Western forces in China lost their civil war to communists led by Mao Zedong. From Washington, it seemed that enemies were on the march everywhere.

In response to this changing international climate, President Truman approved the creation of the Central Intelligence Agency in 1947. Its vague original mandate, which was to carry out “functions and duties related to intelligence affecting the national security,” was expanded a year later to include “sabotage, anti-sabotage, demolition and evacuation measures … subversion [and] assistance to underground resistance movements, guerrillas and refugee liberation movements, and support of indigenous anti-communist elements in threatened countries of the free world.” In January 1950 the National Security Council prepared a seminal document, known as NSC-68, that asserted the need for the United States to confront communist movements not only in regions of vital security interest but wherever they appeared.

“The assault on free institutions is worldwide now,” it concluded, “and in the context of the present polarization of power, a defeat of free institutions anywhere is a defeat everywhere.”

The Cold War drove the United States to recognize not only the power of its enemies but also the vital importance of its friends. In 1949 it brought eleven of them together into a potent military alliance, the North Atlantic Treaty Organization (NATO). Solidarity between the United States and Britain was the bedrock of this new alliance. Differences over how to deal with countries like Iran could not be allowed to weaken it.

President Truman was among many who believed that the Soviets wished to draw Iran into their orbit. The day after North Koreans invaded South Korea, he told one of his aides that Korea was not the only country worrying him. He walked to a globe near his desk in the Oval Office, placed his index finger on Iran, and said, “Here is where they will start trouble if we aren’t careful.”

Britain and Russia had trampled on Iranian sovereignty for more than a century, and many Iranians naturally came to detest them both. For the United States, however, most felt only admiration. The few Americans they had come to know were generous and self-sacrificing, interested not in wealth or power but in helping Iran.

The American best-known to ordinary Iranians was an earnest young schoolteacher named Howard Baskerville, who was killed in 1909 while fighting alongside his Iranian friends in the Constitutional Revolution. He was revered as a martyr and called “the American Lafayette.” Many took his sacrifice as proof of how much more admirable Americans were than other foreigners.

At the time Baskerville was shot down by royalist soldiers, a visionary American educator, Samuel Jordan, was beginning a forty-three-year stay in Tehran. His Alborz College was among the first modern secondary schools in the country, and thousands of its graduates went on to shape Iranian life. The Presbyterian mission for which Jordan worked also ran a hospital and one of the country’s only schools for girls.

“Americans were regarded with nearly universal admiration and affection,” one of its graduates wrote years later. “The American contribution to the improvement and, it was felt, the dignity of our impoverished, strife-torn country had gone far beyond their small numbers…. Without attempting to force their way of life on people or convert us to their religion, they had learned Persian and started schools, hospitals and medical dispensaries all over Iran.”

The dedication of these exemplary men and women was not the only reason many Iranians admired the United States. American officials had spoken out to defend Iran’s rights. The United States sharply criticized the 1919 Anglo-Persian Agreement through which Britain acquired colonial powers in Iran. That same year at Versailles, President Woodrow Wilson was the only world leader who supported Iran’s unsuccessful claim for monetary compensation from Britain and Russia for the effects of their occupation during World War I. In the mid-1920s an American envoy in Tehran was able to report that “Persians of all classes still have unbounded confidence in America.”

Until the outbreak of World War II, the United States had no active policy toward Iran. After the war, however, American power began reaching every corner of the world. The crucial role that oil played in the Allied victory led policymakers in Washington to focus especially on the Middle East. They sharpened their interest as the Cold War intensified.

A giant figure in American diplomatic history, Dean Acheson, directed United States policy toward Iran during this period. Acheson sympathized with the forces of Third World nationalism. With his gaunt frame, pin-striped suits, homburg, and jaunty mustache, he looked every inch the patrician, although in fact he had not been born into wealth. In his youth a Republican who admired Theodore Roosevelt, he later became a Democrat and served in Franklin Roosevelt’s administration. Truman recognized him as a kindred spirit and, after winning the 1948 election, named him secretary of state. Both men were determined to show people in poor countries that the United States, not the Soviet Union, was their true friend.

Soon after taking office, Acheson named an energetic and liberal-minded Texan, George McGhee, as his assistant secretary for Near Eastern, South Asian and African affairs. McGhee was just thirty-eight years old when he assumed the influential post. He had studied geology at the University of Oklahoma and had gone on to win a Rhodes scholarship to Oxford. When he finished his studies, the Anglo-Iranian Oil Company offered him a job as a geophysicist in Iran, but he declined, returned to the United States, and started his own oil company. Its success made him wealthy enough to work for the State Department without pay. His background in the oil industry, however, led some in the British Foreign Office to mistrust him. They suspected him of trying to weaken Anglo-Iranian so that American oil companies, perhaps some in which he had a hidden interest, could take its place in Iran.

McGhee attended many of the meetings that Mohammad Reza Shah held with American officials during his visit to Washington at the end of 1949 and was put off by the young monarch’s “grandiose and unrealistic” military ambitions. Soon afterward, he invited officials of Anglo-Iranian to a meeting. He told them that he had read their company’s most recent annual report and was impressed with how much profit they were making. Perhaps it was time, he suggested, for the company to begin sharing its wealth more equitably with Iran. His guests scorned the idea. One of them went so far as to say that if Anglo-Iranian began giving in to Iran’s demands, it would soon be left with “nothing in the till.”

This debate sharpened over the next months. McGhee repeatedly warned directors of Anglo-Iranian that if they hoped to save Prime Minister Razmara and persuade the Majlis to approve their Supplemental Agreement, they must make concessions. At one point, angered by the company’s insistence that it could not afford to pay Iran more, he asked the State Department’s petroleum expert, Richard Funkhouser, to prepare a report on its operations. The report concluded that Anglo-Iranian was an “exceptionally profitable” company, that it sold its oil for between ten and thirty times the cost of producing it, and that its arrogance had made it “genuinely hated in Iran.”

McGhee, deeply worried about what he saw as a looming disaster, decided to travel to London to press his case in person. He arrived there in September of 1950 to a frosty welcome. Senior officials of both the British government and Anglo-Iranian resolutely rejected his pleas for compromise. They told him that the company would not train more Iranians for supervisory positions, would not open its books to Iranian auditors, and would not offer Iran more money for its oil. “One penny more and the company goes broke,” said the chairman, Sir William Fraser. That astonishing piece of mendacity made clear to McGhee that more talks were fruitless. He packed up and returned home.

British officials, steeped in the world’s most fully developed colonial tradition, were baffled by what they saw as the Truman administration’s refusal to agree that Britain should benefit from the work it had done in foreign countries. What seemed like rapacious imperialism to the Americans—and even more so to the Iranians—seemed only common sense to the British. They insisted that they were doing the world a great service by their work in Iran, as Sir Donald Fergusson, the permanent undersecretary at the Ministry of Fuel and Power, wrote in one memorandum:

It was British enterprise, skill and effort which discovered oil under the soil of Persia, which has got the oil out, which has built the refinery, which has developed markets for Persian oil in thirty or forty countries, with wharves, storage tanks and pumps, road and rail tanks and other distribution facilities, and also an immense fleet of tankers. This was done at a time when there was no easy outlet for Persian oil in competition with the vastly greater American industry. None of these things would or could have been done by the Persian government or the Persian people.

The chasm between American and British perceptions of the gathering crisis in Iran was vividly symbolized by the new ambassadors both countries sent to Tehran in 1950. Henry Grady, the American, was an economist with firsthand experience in Greece and India, two countries where politics was being reshaped by nationalism. Grady believed that if the United States did not align itself with nationalist forces in the developing world, those forces would turn toward Marxism and the Soviet Union. He was a fervent anticommunist but an equally fervent anti-imperialist.

In both temperament and politics, Grady was the polar opposite of his British counterpart in Tehran, the fire-breathing Sir Francis Shepherd. The reports these two ambassadors sent back to their respective capitals were so different that they hardly seemed to be portraying the same country. Grady saw an impoverished land long exploited by the British, who sucked the country’s lifeblood and treated the pitiful Shah like a servant. Shepherd, however, considered Anglo-Iranian a wise and paternal company that had brought Iran nothing but good. He had no use for ungrateful Iranians—or meddling American diplomats—who believed otherwise.

In February 1951 George McGhee summoned all American ambassadors in the Middle East to a meeting in Istanbul. One of the main agenda items was the friction that had developed between the United States and Britain over the question of Iran. The gathered diplomats concluded that Anglo-Iranian’s militancy was “one of the greatest political liabilities affecting the United States/United Kingdom interests in the Middle East.” The company’s “reactionary and outmoded policies,” they declared in a secret memorandum, were not only creating a dangerously explosive situation but constituted “a handicap in the control of Communism in Iran.” This consensus guided American policy through the Truman administration.

The Iranian crisis deepened over the next few weeks. Prime Minister Razmara was assassinated on March 7, and on March 15 the Majlis took its historic vote, “accepting the principle that oil should be nationalized throughout Iran.” Some deputies may have believed that the British would find a way to live with this vote because the British Parliament itself had recently nationalized key British industries. As it did so, Foreign Secretary Ernest Bevin had mused, “What argument can I advance against anyone claiming the right to nationalize the resources of their country? We are doing the same thing here with our power in the shape of coal, electricity, railways, transport and steel.” Bevin was out of office by the time the Iranian crisis exploded, however, and those he left behind in government agreed unanimously that although nationalization might be a wise path at home, it could not be abided abroad.