The Second Contract
As we mentioned earlier, the British chose Reza Shah Pahlavi to replace the old dynasty for several reasons. One of his duties was to renew the old contract between Iran and England.
Although the terms of this contract were somewhat better than before, it still was a badly colonial contract. Altogether Iran was receiving 30% of the profits, and the British pocketed the rest. After the allied invasion of Iran during the Second World War, there was a period of about 12 years of a mixture of freedom and chaos. Several nationalist politicians who had spent years in Reza Shah's prison were able to gain power and the best one of them, Dr. Mohammad Mossadegh, became the first democratically elected prime minister. He was an ardent anticommunist, who truly believed in constitutional monarchy.
Toward the ends of the 1940s, there were strong sentiments in Iran against the British oil company and the oil contract with them. People wanted it changed. They wanted to have more say in the conduct of the British oil company. On the other hand, the British had just come out of two world wars and they were simply bankrupt. They were not in any shape to make any concessions involving money. They also carried the old colonial thoughts that the miserable peasants of the Middle East have no rights to their own damn oil. Consequently, when this issue began to pick up momentum they used all of their power to stop it. In the summer of 1952 Mohammad Reza Shah, the last king of Iran, fired Prime Minister Mossadegh, and appointed Prime Minister Gavamalsaltaneh to power.
Gavamalsaltaneh was a brilliant nationalist, arrogant, power hungry, aristocratic politician. Although these characteristics at one time were appealing in the country, he was toppled in 6 days. So the Shah had to reinstate Prime Minister Mossadegh, and he received the vote of confidence from congress, one of the few times in our history that we had a totally democratically elected leader in power. At this point, Prime Minister Mossadegh was able to create an effective coalition of several political parties and called it the National Front. He excited the population with the prospects of nationalization of the Iranian oil. This collation was quite powerful because it also included the famous Ayatollah Kashani, who had a long history of anti-British defiance.
The British and the royal family did not like this event and they spend a lot of money to prevent it. They tried changing prime ministers and all else that could be done; however they became more isolated, and rejected. Since the national front had the majority in parliament and solid popular backing, Mossadegh and his comrades were able to put the bill through the Congress and nationalize Iranian oil. During the same evening, a group of people poured into the residency of the main British officers in charge of the company and got ahold of many astonishing documents. That building was actually a house which belonged to a British officer with the name of Sedan. The people in the house managed to burn a lot of the documents of the British oil company. However, there was enough half-burned leftover documents to document the severe illegal activities and its intrusion in Iranian affairs. The British responded to Iran's one-sided revocation of the old colonial contract by taking the case to the international court.
This episode is probably one of the most glorious parts of Iranian history. Prime Minister Mossadegh went to Belgium and defended Iran personally in the international court, and since he was an eloquent French trained lawyer he was able to win the case handily and the British lost.
The government of Britain was not accustomed to such unruly behaviors from the natives and was dealing with other problems as well. Mr. Gandhi had simply kicked them out of India. Mr. Hitler had caused massive and irreversible harm to British Empire. In short, the British Empire was not an empire anymore. It was a few leftover pieces of a jigsaw puzzle which was hated by half of the planet. The British decided to teach the monkeys what a monkey should not do. They put a strict oil embargo on Iran. The Iranian ports were blockaded and neutral countries were not permitted to buy oil from Iran. This was quite effective. It deprived the country from its main source of revenue, which was oil. However, the people were quite supportive of the government. There were lines of people buying national bonds and giving their valuables to government to survive. But, a third problem was brewing that the British were able to exploit very well. In 1952, President Eisenhower was elected in the United States. His vice president Mr. Nixon was a staunch anticommunist. The Iranian communist party was the strongest communist party outside of the Soviet bloc. The British scared Ike about the possibility of a communist military coup in Iran and the possibility of a Russian takeover. This scenario was far-fetched because Mossadegh was as anticommunist as anybody else, and the 30,000,000 Muslim population of Iran would not have permitted such a thing. Russians had taken their best shot when the red army was inside Iran and they couldn't do it. Especially with Stalin's death in March 1953, soviet expansionism lost its esteem.
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