A Prize from Fairyland

The series​ in which this volume appears constitutes the official historical record of American diplomacy. In 1989, the State Department published a volume with the same title as this one, nearly 1100 pages in length, which purported to document US-Iran relations in the early 1950s. In fact, focused as it was on the disputed nationalisation of Iranian oil and issues relating to prospective US economic and security assistance to Iran, the earlier volume essentially ignored the central episode of that period: the coup, engineered by the US and Britain, that ousted Mohammad Mossadegh, Iran’s democratically elected prime minister, from power. Imagine the Book of Genesis describing the Garden of Eden, but leaving out the bit about Eve and the Serpent.

Now we have been given what was left out in 1989: the original sin that poisoned relations between Iran and the US. The length of the volume notwithstanding, it falls short of being genuinely comprehensive. Some of the material appears in expurgated form, the content not yet declassified. And, except as interpreted from an explicitly American point of view, the documents included offer very few insights into British or Iranian thinking. What they do provide are the views of officials, diplomats and intelligence agents in the employ of the US. Despite these limitations, the results are illuminating.

In a narrow sense, the crisis in US-Iran relations that erupted in the early 1950s derived from three intersecting factors: oil, the end of empire and the Cold War. As Lord Ismay put it, the purpose of Nato, created in 1949, was to ‘keep the Russians out, the Americans in and Germany down’. The purpose of US policy towards Iran at the time can be reduced to a similarly neat triad: excluding Russia, showing Britain the door and keeping Iran’s government tied directly to Washington.

The British, long the dominant foreign power in Iran, had no intention of going quietly. Since the early years of the 20th century, Iran had been a de facto British protectorate: the Royal Navy was vital to the maintenance of imperial power, and the British government’s majority stake in the Anglo-Persian Oil Company ensured that the navy would not want for fuel. Churchill, First Lord of the Admiralty when the fleet converted from coal to oil, described control of Iranian oil as ‘a prize from fairyland far beyond our brightest hopes’.

After the Second World War the prize remained of immeasurable value, though for different reasons. Britain, its empire crumbling, found itself in desperate economic straits, and the Anglo-Iranian Oil Company, as it was now called, provided a much needed source of tax revenues and foreign exchange. For Iranians, the AIOC represented something quite different: exploitation, humiliation and insult. Its presence and activities became a source of abiding resentment; gaining control of the nation’s patrimony and asserting genuine sovereignty became the central preoccupation of Iranian politics. That meant nationalising the AIOC.

When the Iranian parliament, or Majlis, did exactly that in March 1951, the British government retaliated by organising an embargo on Western purchases of Iranian oil. Indications that the prime minister, General Ali Razmara, might cut a deal with Britain led to his assassination. In short order Mossadegh – who as a leading member of the Majlis had engineered the AIOC takeover – became prime minister, an appointment to which the shah agreed with little enthusiasm. A protracted and extremely bitter stand-off ensued, with Britain demanding compensation that Iran was neither willing nor able to offer.

The US was caught on the horns of a dilemma. On the one hand, as a proud promoter of self-determination, it wished to identify itself with anti-colonialism. On the other, it felt obliged to show solidarity with Britain, which was the archetypal imperial power and a valued partner in the Cold War. In attempting to satisfy both requirements, the US found Mossadegh a less than ideal interlocutor. Americans who had dealt with him, chief among them Loy Henderson, the US ambassador, found him erratic and eccentric, not to say downright weird. No one questioned his credentials as an Iranian patriot, but he seemed to the Americans incapable of running a shoeshine stand, much less presiding over a government. A further complication was the position of the communist Tudeh Party. In Tehran and Washington US officials obsessed over Tudeh, suspecting it of plotting to overthrow the government or of conniving to ingratiate itself with Mossadegh and thereby gain power indirectly.

Yet to judge by the documents provided here, hard information about Tudeh was in scarce supply. With regard to numbers, organisation, leaders and intentions, US reporting was exceedingly vague, and with few of their own agents on the ground, the Americans were largely dependent on their British counterparts for intelligence. Not without experience in manipulating their ally, the British played up the communist threat. US officials, both in the State Department and at the CIA, assumed the worst, depicting Tudeh as a growing menace. In a Persian Gulf variant of the domino theory, they also assumed that if Tudeh came to power in Iran, the entire region would inevitably slip behind the Iron Curtain. Within the CIA it appeared self-evident that if the US lost Iran, ‘one by one the other Near East countries would collapse in turn.’

According to this logic, Mossadegh represented a bulwark of sorts. He alone stood in the way of the Soviet Union’s laying claim to much of the planet’s known oil reserves. The US wanted Mossadegh to sign up to its anti-communist crusade, which would require Iran to settle its differences with Britain. In return, the US would provide Iran with economic and military assistance. But Mossadegh’s cause was anti-imperialism, not anti-communism. He was first and foremost a nationalist: full sovereignty for Iran was his goal. He would neither compromise with Britain nor do America’s bidding. In Mossadegh’s view, the Cold War was not Iran’s fight. Even while earnestly petitioning Washington for money and military hardware, he didn’t disguise his determination to follow the neutralist course set by Nehru.

The Truman administration feared but also half-hoped that Mossadegh wouldn’t last, with a Tudeh-inspired coup seen as the most likely cause of his demise. As early as March 1951, Allen Dulles, then a deputy director at the CIA, thought it likely that Iran would be ‘lost to the West in the coming twelve months’. To avert that possibility, the CIA had initiated a programme of ‘black propaganda’, which involved subsidising certain Iranian newspapers, publishing a book ‘purporting to be a Soviet attack against Islam’, and manipulating ‘religious prejudice and fanaticism to oppose communism’. Given the possibility that Tudeh would eventually succeed in overthrowing Mossadegh, the agency was also laying the groundwork for a resistance campaign, stockpiling arms and ammunition in the Iranian outback to support an indigenous guerrilla force it intended to organise.

Not until 1952 did the Truman administration begin to entertain the possibility of taking direct action to depose Mossadegh. That the widely respected Loy Henderson had shifted his own view may have been a factor. In November 1951 Henderson had warned against interfering in Iranian affairs: a ‘double-faced role in Iran’, he said, was likely to backfire. By the following July he had changed his mind, cabling Washington that he did ‘not believe we should throw up our hands while Iranians rush by like so many million lemmings’. That same month the State Department authorised Henderson to consult with his British counterpart ‘as to possible alternatives to Mossadegh, the method of bringing such a government into power, and the type of encouragement and support that would be necessary’. His brief was to examine ‘every possible alternative on our part to save Iran’. For the moment, however, planning didn’t yield action.

In January 1953, Eisenhower succeeded Truman as president and inherited the Mossadegh problem. The new administration – which included John Foster Dulles as secretary of state and his brother Allen, now director of the CIA – largely endorsed the views of the outgoing team. In a memo written at the beginning of March assessing the situation in Iran, Allen Dulles advised Eisenhower that ‘a communist takeover is becoming more and more of a possibility.’ Three days later, at a meeting of the National Security Council with the president presiding, Dulles reiterated the agency’s standard line: were Mossadegh ‘to be assassinated or otherwise to disappear from power, a political vacuum would occur in Iran and the communists might easily take over’. It wouldn’t then be long before ‘other areas of the Middle East, with some 60 per cent of the world’s oil reserves, would fall into communist control.’ The dominoes were looking wobbly.

At this point the planning of the coup shifted into a new gear. Kermit Roosevelt, grandson of Theodore, was chosen to direct what the CIA now labelled Operation TPAJAX. One of his biggest challenges was to identify a suitable replacement for Mossadegh, someone capable of governing Iran while also remaining amenable to American advice. On one point everyone agreed: under no circumstance could that figure be the shah, who was seen as ‘vacillating, hesitating and indecisive’. Aside from wanting to preserve the monarchy and his role as commander-in-chief, the young monarch appeared to hold few strong views. In the estimation of US officials, he was ‘a weak reed’ who ‘lacks guts’. No one saw him as preferable to Mossadegh.

Roosevelt eventually settled on General Fazlollah Zahedi, described in a CIA profile as ‘competent, energetic, aggressive and patriotic’. The Americans saw Zahedi as someone they could work with, even if during the Second World War he had ‘associated with the Nazi efforts in Iran’. As the plot to remove Mossadegh matured, none of the US officials involved, whether in Tehran or Washington, paused to consider how a foreign-instigated coup might affect the well-being of ordinary Iranians. As one CIA man put it, ‘the question of establishing a “democratic” form of government has no place here.’ Nor did the question of advancing any of the other ideals the US professed (and professes) to cherish. The documents in this volume make it plain: values are an afterthought, while America’s prerogatives and capacity for stage-managing events are treated as boundless.

Israel, too, is barely mentioned. In any future account of US policy towards Iran in our own day, Israel and the Israel lobby will surely loom large, but apart from Eisenhower’s venting at a National Security Council meeting that ‘America was hated even more than Britain’ in the Middle East ‘because of the policy we had been pursuing toward Israel,’ the issue is almost entirely absent from this volume.

The scheme​ that Roosevelt hatched was simplicity itself: CIA-organised protesters would flood the streets of Tehran demanding Mossadegh’s resignation; bowing to the will of the people, army officers loyal to the shah would place him under arrest while the shah appointed Zahedi prime minister. ‘Should the shah-Zahedi combination be able to get the largest mobs in the streets and should a sizeable portion of the Tehran garrison refuse to carry out Mossadegh’s orders,’ agency planners concluded, ‘the overthrow of Mossadegh would be certain.’ It didn’t work out that way, in large part because neither Mossadegh nor the shah performed as planned. As for Zahedi, the CIA was already having second thoughts, agents in Tehran describing him as inhabiting a ‘dream world’ and needing ‘firm realistic guidance’.

D-Day for TPAJAX was 15 August 1953. In Tehran rumours of a plot were rampant; Mossadegh saw it coming. The shah did issue a decree anointing Zahedi prime minister, but accompanied by his wife he then fled the country, flying first to Iraq and then to Italy. The army officer who showed up at Mossadegh’s residence to place him under arrest was himself promptly arrested. Rather than rallying behind Zahedi as expected, the army remained neutral. Zahedi went into hiding. The coup fizzled out. Assuming that he was finished, the shah told US diplomats in Baghdad that ‘he would be looking for work’ and speculated that America might be a nice place to raise a family.

For the CIA, offloading responsibility for the debacle became the order of the day. ‘Mossadegh has actually conducted a revolution,’ the CIA station in Tehran reported. Tudeh was the big winner and ‘will occupy a more important position than ever’. The future was plain: ‘Situation will worsen, while dictatorship strengthens.’ Even so, many Iranians ‘now look to the US to save them’. Nowhere was there any suggestion that the CIA might have miscalculated.

It turned out that there was more to come. On 18 August Tudeh supporters took to the streets of Tehran, engaging in violent clashes with the security forces. The following morning supporters of the shah joined the demonstrations, which soon became (according to the CIA) a ‘roaring blaze which during the course of the day swept through the entire city’. Crowds sacked the offices of pro-Tudeh newspapers and seized key locations such as the post office and radio station. Converging on Mossadegh’s residence, they forced him to flee. By nightfall, Zahedi had taken possession of the prime minister’s office and was effectively in charge. It was a remarkable turnaround.

According to the CIA at the time, the uprising contained ‘a large element of spontaneity’. Historians disagree over the extent of the CIA’s role. The documents presented here do little to resolve that debate, in part because some passages are still classified. Kermit Roosevelt was on the scene and actively engaged in various dramatics, distributing hastily printed anti-Mossadegh propaganda and inciting mob attacks on pro-Mossadegh publications; how much his efforts mattered remains difficult to say. But whatever the proximate cause of the reversal, the CIA was quick to claim credit for what the deputy CIA director Frank Wisner characterised as ‘a substantial victory for the West’. The US had saved Iran from the clutches of communism, and as far as it was concerned, it alone deserved the credit. The British had been helpful, but Iran was now an American show. The time had come to tell the British government that it would ‘not be permitted to inhibit vigorous unilateral action on our part to exploit the current fortunate turn of events’.

After considerable coaxing, the shah shelved his plans to move to the US and returned to Tehran. Soon enough, Henderson came calling and counselled him not to be tempted by Nehru’s example. Befriending him would not be a good idea. The ‘so-called “third force” was not a force at all,’ he told the shah. The very concept was ‘based on false premises that both the free world and the communist world were equally guilty’. The shah assured Henderson that he understood the message. As Roosevelt put it, ‘The shah is now our boy.’

In the event, things turned out to be rather more complicated than that. Zahedi proved a disappointment and didn’t last. Within a month of reclaiming his throne, the shah was declaring himself a ‘new man’. Before the coup, he had been merely ‘the son of Reza Shah. Now I am the shah in my own right.’ All his personal shortcomings remained, but he now fancied that he ought actually to be in charge. The Americans didn’t know it but their ‘boy’ would prove to be a handful, behaving in ways that in retrospect would make Mossadegh look like a model of steadfastness and sound judgment.