marsh.reinterpreting truman + ike policies toward iran

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MarshContinuity and Change

Continuity and Change

Reinterpreting the Policies of the Truman andEisenhower Administrations toward Iran,1950–1954

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What I’ve always had in mind was and is a continuing foreign policy. . . .Partisan politics should stop at the boundaries of the United States.1

Harry S. Truman

Introduction

From 1950 to 1954, the United States faced the perplexing Anglo-Iranian oilcrisis, nominally a commercial dispute between Iran and the British-ownedAnglo-Iranian Oil Company (AIOC) but in practice laden with a potent mix-ture of concerns such as the Cold War, Anglo-American relations, interna-tional oil, and Middle Eastern security. The Truman administration adoptedinformal and formal mediating roles during the crisis. The Eisenhower ad-ministration, however, sponsored a coup through Operation Ajax just sevenmonths after assuming ofªce in January 1953, an operation that toppled theIranian Prime Minister Mohammed Mossadegh and paved the way for Iran tobecome a U.S. client state under the Shah.

Because the operation came so soon after the Truman administration va-cated ofªce, the transition between administrations seemed to mark not thecontinuity in foreign policy wished for by Truman but a watershed in U.S.policy toward Iran and in U.S. Cold War strategy more generally. This thesishas traditionally dominated analyses of U.S. policy toward Iran during the oil

Journal of Cold War StudiesVol. 7, No. 3, Summer 2005, pp. 79–123© 2005 by the President and Fellows of Harvard College and the Massachusetts Instituteof Technology

1. Letter from Harry Truman to Dwight D. Eisenhower, c. late 1952/early 1953 (after the presidentialelection), cited by Harold Foote Gosnell, Truman’s Crises: A Political Biography of Harry S. Truman(London: Greenwood Press, 1980), pp. 532–533.

crisis. Some have argued that the advent of the Republicans heralded a coordi-nated Anglo-American effort to roll back Communism and led to a muchharder line vis-à-vis Iran.2 Others have stressed a greater willingness on thepart of the Eisenhower administration to adopt a more assertive policy and awider range of instruments, including use of the Central Intelligence Agency(CIA) for covert operations.3 Still others have emphasized the Republican ad-ministration’s connections with big business,4 its greater fear of Communismand distrust of Third World nationalism,5 and the impact of changing worldcircumstances, notably the buildup of the North Atlantic Treaty Organization(NATO), the armistice in Korea, and the change of Soviet leadership afterJosif Stalin’s death, an event that distracted the Soviet Communist Party frominternational affairs.6

This article does not dispute that the Eisenhower administration’s resortto a coup in Iran was a signiªcant difference from the means employed by theTruman administration. But a disproportionate focus on the actual coup andon differences between the two administrations has tended to exaggerate pol-icy disjunctions between them and to obscure why the Eisenhower adminis-tration sought to overthrow the Mossadegh regime. This article avoids givingundue emphasis to discontinuity and, in that respect, shares Francis Gavin’s

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2. Fakhreddin Azimi, “The Politics of Dynamic Stalemate: Iran 1944–53,” Ph.D. diss., St Anthony’sCollege, University of Oxford, 1984, p. 363; and Farhad Diba, Mohammad Mossadegh: A Political Bi-ography (London: Croom Helm, 1986), p. 181.

3. Stephen E. Ambrose, Eisenhower: President and Elder Statesman, Vol. 2: 1952–69 (London: Allenand Unwin, 1984), p. 111; Mark Gasiorowski, U.S. Foreign Policy and the Shah: Building a Client Statein Iran (Ithaca: Cornell University Press, 1991), pp. 82–83; Mary Ann Heiss, Empire and Nationhood:The United States, Great Britain, and Iranian Oil, 1950–54 (New York: Columbia University Press,1997); and C. M. Woodhouse, Something Ventured (London: Granada, 1982). Kermit Roosevelt haspointed also to the inºuential Under Secretary of State, General Walter Bedell Smith, as favoring clan-destine operations. Kermit Roosevelt, Countercoup: The Struggle for the Control of Iran (New York:McGraw-Hill, 1979), p. 4.

4. David Horowitz, The Free World Colossus: A Critique of American Foreign Policy in the Cold War(New York: Hill & Wang, 1971), pp. 184–185; Joyce Kolko and Gabriel Kolko, The Limits of Power:The World and United States Foreign Policy, 1945–54 (New York: Harper & Row, 1972), pp. 412–420;Richard. J. Barnet, Intervention and Revolution: The United States in the Third World (London:MacGibbon and Kee, 1970), pp. 225–229; Joseph Frankel, British Foreign Policy, 1945–73 (London:Oxford University Press, 1975), p. 218; Mostapha Elm, Oil, Power, and Principle: Iran’s Oil National-ization and Its Aftermath (Syracuse: Syracuse University Press, 1992), p. 276; and Robert Engler, ThePolitics of Oil: A Study of Private Power and Democratic Direction (New York: Macmillan, 1961),p. 310.

5. James A. Bill, The Eagle and the Lion: The Tragedy of American-Iranian Relations (New Haven: YaleUniversity Press, 1988), p. 85; and Barry M. Rubin, Paved with Good Intentions: The American Experi-ence in Iran (Oxford: Oxford University Press, 1981), p. 56.

6. W. Averell Harriman, “Leadership in World Affairs,” Foreign Affairs, Vol. 32, No. 4 (Winter 1953/1954), pp. 525–540; Homa Katouzian, ed., Musaddiq’s Memoirs (London: Jebhe, National Movementof Iran, 1988), p. 272; and Maziar Behrooz, “Tudeh Factionalism and the 1953 Coup in Iran,” Inter-national Journal of Middle East Studies, Vol. 33, No. 3 (August 2001), p. 377.

revisionist emphasis, in an earlier issue of the Journal of Cold War Studies, oncontinuity as an explanation for U.S. policy toward Iran in 1950–1953.7

However, the article takes issue with Gavin’s emphasis on the large-scale U.S.military buildup undertaken by the Truman administration after the adop-tion of NSC-68. The argument I develop here is that the continuity in U.S.policy toward Iran was attributable instead to the unusually strong sharedprinciples and assumptions that guided both administrations. Greater U.S.assertiveness in Iran resulted not from the change in administration but froma process spurred by the ineffectiveness of U.S. policy as of early 1952, bywaning British power, and by the systematic closure of options in Iran that ledto the ascendancy of policymakers favoring a stronger U.S. approach. Finally,the article seeks to shed further light on the coup itself by emphasizing thatpolicy continuity rather than change best explains why the Eisenhower ad-ministration sought a change of Iranian leadership and pursued this objectiveby orchestrating a coup.

The article is divided into ªve sections. The ªrst provides the context ofU.S. policymaking and outlines what was at stake for the United States inIran and the oil dispute. The second develops the strong elements of continu-ity in the approaches of the Truman and Eisenhower administrations: theirshared perception of the crisis as a Cold War issue; their preferred solution ofan oil settlement to stimulate political reform and economic rehabilitation;and the shared assumptions that deªned policy parameters and that, in turn,prescribed options. The third section demonstrates policy continuity in prac-tice by analyzing what Secretary of State Dean Acheson called the Democrats’“one more big effort” to solve the oil crisis in the autumn of 1952.8 This is agood test of continuity because the initiative was incomplete when Trumanleft ofªce. Eisenhower had the choice of either proceeding with the plan orshelving it quietly. Moreover, this initiative has been much neglected as a con-sequence of an excessive focus on the later resort to a coup.

The fourth section explains how the transition to a more assertive U.S.Iranian policy, so often attributed to the change of administrations, beganmuch earlier under the Truman administration through three successive shiftsof policy in 1952. The ªnal section addresses the coup itself, arguing that al-though the Eisenhower administration differed from its predecessor in themeans it used, this difference stemmed mainly from the closure of the limitedoptions bequeathed by the Truman administration.

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7. Francis J. Gavin, “Politics, Power, and U.S. Policy in Iran, 1950–1953,” Journal of Cold War Studies,Vol. 1, No. 1 (Winter 1999), pp. 56–89.

8. Dean Acheson, Present at the Creation: My Years in the State Department (London: Hamilton, 1970),p. 681.

U.S.

The oil dispute began in late 1948 when the Iranian government presentedthe AIOC with a 25-point memorandum demanding that its 1933 oil conces-sion be renegotiated to provide Iran with a more equitable return for the ex-ploitation of its natural resources. Initially this incident seemed no more thana commercial disagreement with implications for the United States only inso-far as the terms of a settlement might set a precedent for U.S. oil companiesoperating in the Middle East. However, the dispute quickly escalated as Ira-nian nationalist aspirations, a complacent British approach, and an unclearrelationship between the AIOC and the British government blurred theboundaries between commercial negotiations and attempts to exercise Britishimperial power.9 Also, the Berlin Blockade of 1948–1949, the “loss” of Chinain 1949, and the globalization of U.S. containment policy after the outbreakof the Korean War superimposed a new Cold War dimension on the oil crisis.Moreover, once the United States showed an interest in the dispute, it becamecentral in British and Iranian policies. Britain sought strong statements ofsupport to cow Iran into accepting the Supplemental Oil Agreement, a dealconcluded on 17 July 1949 that was better than the 1933 concession but thatstill ensured handsome proªts for the company. Iran appealed to U.S. anti-imperialism and exploited Anglo-American disagreement to use Washingtonto extract concessions from London.

At stake for the United States in the oil crisis were relations with its pre-mier Cold War ally, oil supplies, Middle Eastern defense, the protection ofIran against Communism and, for a limited period, the potential for escala-tion into confrontation with the Soviet Union. Because all these concernswere horribly entwined, the stakes were raised even further. At the macro levelof the Cold War, U.S. global strategy was plagued by glaring capabilitydeªcits as a consequence of the globalization of containment strategy afterseveral years of postwar military austerity. Vital interests far outstripped themilitary capacity to defend them. China’s intervention in the Korean War tieddown the bulk of American conventional forces in the Far East. And it wouldtake at least two years for the massive accretion of military capability envis-aged in NSC-68 to begin coming on line.10 Even in Europe Secretary of State

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9. For an assessment of the impact of the blurred relationship between the AIOC and the British gov-ernment, see Stephen Marsh, “HMG, AIOC and the Anglo-Iranian Oil Crisis,” Diplomacy and State-craft, Vol. 12, No. 4 (December 2001), pp. 143–174.

10. For a concise overview of NSC-68, see Alan P. Dobson and Stephen Marsh, U.S. Foreign PolicySince 1945 (London: Routledge, 2001). The classic text remains John Lewis Gaddis, Strategies of Con-tainment: A Critical Appraisal of Postwar American National Security Policy (New York: Oxford Univer-sity Press, 1982). For different interpretations, see Ernest R May, ed., American Cold War Strategy: In-terpreting NSC 68 (New York: Bedford Books, 1993).

Acheson noted the irony of the marine band playing “I’ve Got Plenty ofNothin’” and “It Ain’t Necessarily So” at the NATO treaty ceremony in April1949.11

The United States therefore desperately needed allies, and none was moreimportant than Britain. Britain was in a strategically vital position, exercisedcrucial political inºuence in Western Europe, the Middle East, and SouthEast Asia, and retained an major economic position at the center of the Com-monwealth and the Sterling Area. Also, in 1949 Britain devoted a greater pro-portion of its national income to defense expenditure than even the UnitedStates did,12 and by 1950 British production was two-and-a-half times that ofFrance and 50 percent more than West Germany. Furthermore, Britain re-mained a considerable force, second only to the United States among theWestern powers, and was thus uniquely placed to fulªll many foreign policyobjectives that the United States lacked the power, inºuence, or willingness totackle itself. U.S. policymakers therefore allocated Britain multiple roles, in-cluding those of leader in Western Europe, chief partner in strategic and eco-nomic planning, guarantor of political and economic stability in the MiddleEast, guardian of Commonwealth cohesion, and supplier of strategic stagingposts and military bases, especially nuclear bases in Britain itself. U.S. ofªcialsreadily conceded in 1950 that, of their international relationships, the UnitedKingdom was “in a special or preferred position—the facts of the world situa-tion require it.”13

U.S. ofªcials found the Middle East a perplexing theater. The regionhad hitherto been of little geostrategic concern, and although the 1944Culbertson Mission indicated some developing economic interest, by 1947these interests, with the exception of oil, were still rated as “not particularlyoutstanding.”14 However, Stalin’s delay in withdrawing troops from northernIran in 1946 caused a hardening of U.S. attitudes toward the Soviet Union,15

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11. Acheson, Present at the Creation, p. 284.

12. The difference was 8.0 percent compared to 6.7 percent. CIA, “The Possibility of Britain’s Aban-donment of Overseas Commitments,” 23 December 1949, in Harry S. Truman Library (HSTL),President’s Secretary’s Files (PSF), Intelligence Files, Box 257, p. 11.

13. Henry Richardson Labouisse Jr. to Perkins, 27 February 1950, United States National Archives(NA), Record Group (RG) 59, Box 2768, p. 4.

14. Memorandum, “Speciªc Current Questions,” n.d., in U.S. Department of State, Foreign Relationsof the United States, 1947, Vol. V, pp. 556–557 (hereinafter referred to as FRUS, with appropriate yearand volume numbers). For details, see John A. DeNovo, “The Culbertson Economic Mission and An-glo-American Tensions in the Middle East, 1944–1945,” Journal of American History, Vol. 63, No. 4(March 1977), pp. 913–936.

15. Daniel Yergin, Shattered Peace: The Origins of the Cold War and the National Security State (Boston:Houghton Mifºin, 1977), p. 179; Harry S. Truman, Memoirs, Vol. 1: Year of Decision (London:Hodder and Stoughton, 1955), pp. 460–461; Mark H. Lytle, Origins of the Iranian-American Alliance1941–53 (New York: Holmes and Maier, 1987); and Gary R. Hess, “The Iranian Crisis of 1945–1946and the Cold War,” Political Science Quarterly, Vol. 89, No. 1 (March 1974), pp. 117–146.

and by November 1947 the NSC had accepted that “the security of the East-ern Mediterranean and of the Middle East is vital to the security of the UnitedStates.”16 Two years later, U.S. Assistant Secretary for Near Eastern and SouthAsian Affairs George McGhee told the Middle East Chiefs of Mission gath-ered in Istanbul that their region was emerging as a key area in the struggleagainst Communist subversion. The U.S. State Department’s Bureau of NearEastern, South Asian, and African affairs (NEA) articulated the reasons forthis in 1950. Access to the Persian Gulf, the NEA argued, was a historic Sovietobjective, and by achieving this goal the USSR would acquire advance basesfor military and subversive activities hundreds of miles nearer potential U.S.-UK lines of defense in the Middle East. The Soviet Union would also controlpart of the Middle Eastern oil reservoir and be able to threaten the remainder.Western communication and supply lines would also be jeopardized, not leastshipping in the Persian Gulf and continental air routes across Iran and adja-cent areas. Furthermore, the will of Middle Eastern countries to resist Sovietaggression would be gravely damaged, and Western rearmament and eco-nomic reconstruction, which were predicated on reliable sources of oil, wouldbe jeopardized.17 Indeed, in 1954 Eisenhower’s NSC estimated that WesternEurope would be 90 percent dependent on Middle Eastern oil by 1975 andthat, if such supplies were lost, “Western Europe is not defensible, our invest-ment in its rehabilitation will be dissipated, and it will be lost and become aliability to the free world.”18

In many respects Iran was a microcosm of the wider Middle Eastern pic-ture. The United States had little established interest there and in June 1949ranked it far below Turkey and Greece, owing especially to the limited poten-tial of the Iranian armed forces.19 Also, before NSC-68 was adopted, U.S.ofªcials regarded Iran as safe, dismissing warnings to the contrary by the U.S.ambassador to Iran, John Wiley, as periodic “cries of ‘wolf ’” and as exagger-ated “statements which he intended to be slightly shocking.”20 The dominantassessment was that the Soviet Union would not risk overt aggression againstIran, that the outlawed Communist Tudeh Party was incapable of overthrow-

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16. G. P. Merriam of the Policy Planning Staff, memorandum, 13 June 1949, in FRUS, 1949, Vol. VI,p. 39; and State Department, memorandum, n.d., in FRUS, 1947, Vol. V, p. 513.

17. NEA paper, “Political and Economic Factors Involved in Military Assistance to Iran in FY 1951,”n.d., in FRUS, 1950, Vol. V, p. 466.

18. “NSC Staff study on certain problems relating to Iran,” attached to “Statement of Policy by theNSC,” 2 January 1954, in FRUS, 1952–1954, Vol. X, p. 881.

19. G. P. Merriam, memorandum, 13 June 1949, in FRUS, 1949, Vol. VI, pp. 42–43.

20. “Daily Meeting with Secretary,” 1 March 1950, in FRUS, 1950, Vol. V, p. 482; and GeorgeMcGhee, Envoy to the Middle World: Adventures in Diplomacy (New York: Harper and Row, 1983),p. 73.

ing the regime, and that the Iranian economy, though backward, was proba-bly as stable as in any recent period.21 All of this changed quite radically, how-ever, once the shift to global containment sensitized policymakers to weakspots in the perimeter. Iran was rapidly promoted in the list of U.S. vital inter-ests. Its loss, U.S. ofªcials feared, would give the Soviet Union a bulkhead inthe Persian Gulf, with all the potential consequences for the Middle East out-lined by the NEA. Also, it would undermine assistance being given to Greeceand Turkey and end almost before they began U.S. hopes of developing aNorthern Tier of countries to bolster Middle Eastern defense. As Wileywarned in characteristic prose in February 1950:

Once I had a friend who saved up enough money to buy a dress suit to take thegirl of his choice to a dance. The great moment arrived. But he had forgotten tobuy the white tie; everything, therefore, went to waste. In our policy towardsGreece, Turkey and Iran, Iran is, I think, the white tie we forgot to buy.22

The ªnal complicating factor was the potential for the oil crisis to escalateinto a superpower confrontation that would see either Iran partitioned be-tween Britain and the Soviet Union or, still worse, the onset of a “hot war.” ATreaty of Friendship concluded in 1921 between Soviet Russia and Iran enti-tled Moscow to intervene if any foreign power invaded Iran. This clause sud-denly appeared relevant when Britain seriously considered military action toprotect its interests after Mossadegh formally nationalized the Iranian assets ofthe AIOC on 1 May 1951. The different assessments in London and Wash-ington of the risks involved in military intervention exacerbated matters.Many British ofªcials believed that “over-much weight need not be attachedto the argument that Russia could invoke the 1921 Persian-Russian Treaty” tointervene in Iran, and that a preemptive strike would best safeguard Britisheconomic interests and minimize the chance of escalation.

Although the British Cabinet was by no means united on the question ofmilitary intervention, some members argued that the risk of Soviet occupa-tion of northern Iran “might be worth accepting provided that we retainedfull control of the Abadan reªnery.”23 British Chancellor of the ExchequerHugh Gaitskell privately noted that partition of Iran between Britain and the

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21. NSC-54, 27 January 1949, in FRUS, 1949, Vol. VI, pp. 545–552; and Jernegan to Thurston, 11October 1948, in FRUS, 1949, Vol. VI, pp. 4–6. For more on the Tudeh, see Osamu Miyata, “TheTudeh Military Network during the Maziar Oil Nationalization Period,” Middle Eastern Studies,Vol. 23, No. 3 (July 1987), pp. 313–328; and M. Behrooz, “Tudeh Factionalism and the 1953 Coupin Iran,” International Journal of Middle East Studies, Vol. 33, No. 3 (August 2001), pp. 363–382.

22. Wiley to Sec. State, 15 February 1950, in FRUS, 1950, Vol. V, p. 471.

23. “Persia,” memorandum by Sec. State for Foreign Affairs, 10 July 1951, in United Kingdom Na-tional Archives, London (hereinafter UKNA), CAB 129, CP (51)212, p. 2.

Soviet Union “sounds bad but I think it might be the best ultimate solu-tion.”24 U.S. ofªcials, however, strongly opposed this line of thinking. Secre-tary of Defense Robert Lovett worried that British military action would pro-vide the perfect pretext for the USSR to move troops into Azerbaijan.25 Also,even if a “hot war” did not follow, British action would alienate members ofthe United Nations (UN), give the Soviet Union a major propaganda victory,and put London and Washington publicly at loggerheads (especially consider-ing U.S. leadership of the effort to evict the Soviet Union from Iran in 1946).Furthermore, potential armed intervention in Iran smacked of old-style gun-boat diplomacy, which both annoyed anti-imperialists within the State De-partment and threatened U.S. attempts to inºuence Third World nationalismfavorably.

U.S. interests in the oil crisis were thus multifaceted, and policy had to takeaccount of the complex interplay of global Cold War considerations, regionalconcerns for Middle Eastern security, and the micro level of Iran. Also, Iran’selevation in U.S. strategic interests gave greater urgency to the matter. As earlyas April 1950 U.S. ofªcials argued that the dangers had become so great andthe stakes so high in Iran that the United States could not afford to take anychances.26

In light of traditional interpretations that U.S. policy toward Iranchanged only after the Republicans assumed ofªce in January 1953, it is in-structive to examine the striking similarities in the goals and assumptions ofthe Truman and Eisenhower administrations during the oil crisis. At thebroadest level, the administrations were joined in viewing the oil crisis as ªrstand foremost a Cold War concern. This is clear from Anglo-American dis-agreement about how to approach the crisis. British commercial interests ranup hard against U.S. requests that Britain expedite an oil settlement in orderto stabilize Iran against the Communist Tudeh threat.27 As Sir WilliamStrang, the British permanent under-secretary of state for foreign affairs,summed up, “to the Americans, in the ªght against Communism in Persia,

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24. P. M. Williams, ed., The Diary of Hugh Gaitskell 1945–1956 (London: Cape, 1983), p. 260.

25. William R. Louis and James A. Bill, eds., Musaddiq, Iranian Nationalism and Oil (Austin: Univer-sity of Texas Press, 1988), p. 8.

26. McGhee to Acheson, “Iranian crisis,” 25 April 1950, in FRUS, 1950, Vol. V, p. 524.

27. “Record of Anglo-U.S. talks re: Iran and the Middle East,” 26 October 1950, in FRUS, 1950, Vol.V, p. 611.

the Anglo-Iranian Oil Company is expendable. It is not possible for us to startfrom this premise.”28

The preoccupation of the Truman and Eisenhower administrationswith the Cold War is also revealed in their appreciation of the crisis in Iran.On 14 May 1951 McGhee listed the primary objectives of the Truman ad-ministration as: to maintain peace; to keep Iran on the side of the West; tomaintain the ºow of oil; and to protect concession rights in Iran and otherparts of the world.29 At approximately the same time Acheson averred that keyU.S. interests were jeopardized by the oil crisis: “(a) world peace, (b) stabilityand Western orientation Iran, ME and perhaps Moslem world, (c) continu-ance ºow of oil essential to West, (d) stability ME and other fon [foreign]concessions and (e) Brit balance of payments position.”30 Almost three yearslater an NSC assessment of the situation in Iran under the Eisenhower ad-ministration drew strikingly similar conclusions: “Iran must be regarded as acontinuing objective of Soviet expansion” on account of its key strategic posi-tion, oil resources, vulnerability to subversion, and weak position in the eventof armed attack by the USSR. Also, if Iran were lost to Communism it would,according to the report,

a. Be a major threat to the security of the entire Middle East, as well as Pakistanand India.b. Increase the Soviet Union’s oil resources for war and its capability to threatenimportant free world lines of communication.c. Damage United States prestige in nearby countries and . . . seriously weaken,if not destroy, their will to resist communist pressures.d. Permit the communists to deny Iranian oil to the free world, or alternativelyto use Iranian oil as a weapon of economic warfare.e. Have serious psychological impact elsewhere in the free world.31

These common Cold War priorities and Anglo-American friction indicate thebroad continuity between the Truman and Eisenhower administrations’ con-ceptions of the crisis in Iran. Even when British military planning in spring1951 threatened to allow the USSR to invoke the 1921 Treaty of Friendship,State Department ofªcials were explicit and adamant that “this is a cold-warproblem we are dealing with, not a shooting-war problem.”32 However, this

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28. Strang to Franks, 25 April 1951, in UKNA, Foreign Ofªce Files (FO) 371/91529.

29. Memorandum of conversation by Richard Funkhouser of the Ofªce of Near Eastern Affairs,14May 1951, in FRUS, 1951, Vol. V, p. 309.

30. Sec. State to embassy in U.K., 31 March 1951, in FRUS, 1951, Vol. V, p. 296.

31. Statement of Policy by the NSC, 2 January 1954, in FRUS, 1952–1954, Vol. X, pp. 865–866.

32. State Dept. draft minutes of State-Joint Chiefs of Staff meeting, 2 May 1951, in FRUS, 1951, Vol.V, p. 119.

theme of continuity extends far beyond broad conceptions and into agree-ment about the major threat to Iran and how best to alleviate it.

The administrations shared a common diagnosis of the key problem inIran and how to treat it. The main problem was that poor socioeconomicconditions provided a fertile breeding ground for Communist subversion. Aseries of reports in April 1950 laid out the apparently “dangerous and explo-sive” situation: Iran faced a serious foreign-exchange account deªcit, a declinein industrial activity and purchasing power, and an alarming ºight of capital,as well as a lack of new investment. The Iranian Seven Year Plan, which envis-aged £210 million of economic and social development, was stillborn.33 Iran’sleaders exacerbated matters by scapegoating the West rather than taking cor-rective action. U.S. ofªcials feared a “second China,” whereby the lack ofAmerican aid partially replaced “British intrigue” as the whipping boy of Ira-nian politics.34 Three years later, the Eisenhower administration broadly con-curred with these assessments. Irresponsible Iranian ªnancial management,coupled with a British oil embargo imposed as part of its economic sanctionsagainst Mossadegh, had aggravated Iran’s economic problems. Indeed, on17 July 1953 U.S. Chargé in Iran Mattison referred to the “almost hopelessªnancial and economic situation.”35 Even after the coup, Eisenhower’s NSCemphasized the need to provide overdue economic and social welfare pro-grams, the exhaustion of Iran’s foreign exchange, the adverse impact, particu-larly in urban centers, of an almost 50 percent reduction in imports, andinºationary pressure that resulted from the government’s printing of moneyto pay its bills.36

As for the solution to Iran’s problems, the administrations again saw eyeto eye. For three key reasons—Iran’s Cold War allegiance and U.S. strategicplanning; the dependence of the Seven-Year Plan on oil revenues; and enor-mous problems in extending long-term substantial U.S. aid to Iran—the so-lution had to be an oil settlement. First, the oil crisis threatened to incline

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33. Rountree to Jernegan, 23 March 1950, in FRUS, 1950, Vol. V, pp. 491–499; State Dept. Paper,“The Present Crisis in Iran,” n.d., in FRUS, 1950, Vol. V, pp. 509–518; and “Cost of plan as given tothe House of Commons,” 30 July 1951, Parliamentary Debates, Commons, 5th ser., Vol. 491 (1951),p. 966. The plan was developed by Overseas Consultants Inc., an organization of one British andeleven American ªrms of consulting engineers. On the origins and development of the company, seeOverseas Consultants Inc., Report on Seven Year Development Plan for the Plan Organization of the Im-perial Government of Iran, 5 vols. (New York: Overseas Consultants, 1949); and Laurence Paul Elwell-Sutton, Persian Oil: A Study in Power Politics (London: Lawrence and Wishart, 1955), pp. 159–161.

34. Views of General Collins in McGhee to Sec. State, 25 April 1950, in FRUS, 1950, Vol. V, p. 523;and “The Present Crisis in Iran,” p. 511. Factors that bolstered this fear included the Shah’s desire toknow why the United States treated Iran so differently from Turkey and the negative popular reactionto rumors in February 1950 of an impending U.S. initiative in Indonesia.

35. Mattison to State Dept., 17 July 1953, in FRUS, 1952–1954, Vol. X, p. 737.

36. NSC Statement of Policy, 2 January 1954, in FRUS, 1952–1954, Vol. X, pp. 866, 878–879.

Iran toward either neutrality or Communism because the commercial aspectsof the crisis were so entangled with Iranian nationalism and Iran’s struggleagainst British imperial power. Either potential outcome would be unaccept-able. Moreover, even if Iran retained a Western orientation, it was unlikely, foras long as the dispute continued, to cooperate in U.S. strategic ambitions forregional defense, regardless of whether this was the Middle East Defense Or-ganisation (MEDO) or as part of the Northern Tier with Turkey and Paki-stan. It is not surprising, therefore, that even before Mossadegh nationalizedthe AIOC’s Iranian assets U.S. ofªcials were citing the dispute as a “handicapin the control of communism in Iran.”37

An oil settlement was also the chosen means to save Iran from Commu-nism because socioeconomic reforms depended on resurrecting the Seven YearPlan. This in turn required a settlement of the oil dispute insofar as oil reve-nues constituted Iran’s principal source of foreign exchange and internal in-vestment. In January 1954 the NSC pointed out that these revenues ac-counted for more than 50 percent of Iran’s foreign-exchange income and athird of its total income. Maintaining the idle oil facilities during the oilembargo drained the treasury. Some $40 million to $80 million would berequired to reactivate the Abadan reªnery and bring back on line the produc-tion, pipeline, loading, and storage facilities.38

The ªnal reason an oil settlement was considered the only long-termhope for Iran is that large-scale and sustained U.S. aid was the only alternativeto keep Iran aºoat. Neither Truman nor Eisenhower was prepared to sanctionthis. Iran potentially had all the income it could manage through its oil re-serves, and Congress was unlikely to approve large-scale aid if the Iranianscould in any way be seen as contributing to a deadlock in the oil dispute.Also, substantial aid might relieve the pressure so much that Iran would neveraccept an oil deal, and the United States would be stuck with an indeªnite aidcommitment. It was possible, too, that Iranian corruption and mismanage-ment would dissipate the effect of aid and that Iranian nationalism mightturn against aid dependency as a form of neoimperialism, with serious impli-cations for U.S. prestige. Furthermore, the appearance of “bailing out” Iranfrom its predicament would threaten wider U.S. interests. The British wouldbe furious because it would undercut their economic pressure on Tehran toaccept an oil deal. The sanctity of contract would be jeopardized if the UnitedStates were seen to aid states that nationalized foreign-owned industries with-out compensation. U.S. prestige throughout the Middle East would be en-

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37. “Istanbul Conference of Middle Eastern Chiefs of Mission,” 14–21 February 1951, in FRUS,1951, Vol. V, p. 61.

38. NSC Statement of Policy, 2 January 1954, pp. 873, 876.

dangered if U.S. leaders overcommitted themselves and then failed to achievetheir objectives in Iran.

The Truman and Eisenhower administrations were thus joined in theiridentiªcation of Communist subversion as the key threat to Iran and in seeingan oil settlement as the key to providing the political reforms and socioeco-nomic improvement necessary to combat it. Still, this is not the limit of conti-nuity between their approaches to Iran and the oil crisis. They also sharedthree key working assumptions that delimited options available to them forsolving the dispute—assumptions about Britain’s importance as the principalU.S. ally, the implications of any settlement for oil supplies and the sanctity ofcontract, and the necessity of having strong and pro-Western leaders in Iran.

Both administrations recognized Britain as a major factor in their respec-tive policies toward Iran. The reason was twofold: Britain’s immense signi-ªcance to U.S. Cold War strategy, and the enormous importance of theAIOC concession to Britain. The former gave British policymakers signiªcantinºuence vis-à-vis Washington, especially with regard to the Middle East, aregion in which the United States was relatively weak and Britain held a long-established position that it deemed vital to defend.39 The result was Anglo-American interdependence. The U.S. State Department noted in 1947, albeitin oversimpliªed terms, that “it would be possible to describe the situation interms of a simple bargain. If for political and strategic reasons we want themto hold a position of strength in the Middle East, then they must have from useconomic concessions with respect to the area which will make it worth theirwhile to stay there.”40 As for the AIOC oil concession in Iran, it was Britain’smost important overseas asset and carried major economic, strategic, andsymbolic signiªcance. Its revenues were vital to the British treasury, as oil pro-duction soared from 16.8 million tons in 1945 to 31.75 million by 1950.41 IfIranian oil were sacriªced, Britain would lose its enormous investment in Iranand ªnd its balance of payments crippled owing to its extraordinary depend-ence on overseas trade in general and oil in particular.42 Furthermore, becausethe British government was the AIOC’s major shareholder, the company was

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39. “Memorandum on policy in the Middle East and Eastern Mediterranean by the British Group,”n.d., in FRUS, 1947, Vol. V, p. 580.

40. State Department memorandum, n.d. (cited in n. 16 supra), p. 516.

41. Henry Longhurst, Adventure in Oil: The Story of British Petroleum (London: Sidgwick and Jackson,1959), p. 136; and record of meeting at British Treasury Department, 16 December 1953, in BritishPetroleum Archives, 58246.

42. Minute by Peter E. Ramsbotham, 22 November 1950, in UKNA, FO 371/82377; and NationalIntelligence Report 14, 8 January 1951, in FRUS, 1951, Vol. V, p. 269. Some idea of British relianceon Middle Eastern oil can be gained from oil import ªgures for 1949/1950: £22.1 million from Bah-rain and Kuwait; £25.4 million from Saudi Arabia, Iraq, and Iran; and just £8.4 million from the restof the world. Figures from Phillip Darby, British Defence Policy East of Suez, 1947–68 (London:Hodder and Stoughton, 1985), p. 25.

often seen as an instrument of British policy toward Iran and the MiddleEast.43 British ofªcials were convinced that their overseas interests necessitateda satisfactory outcome in Iran.

U.S. policy toward Iran thus had to consider Britain’s enormous stake inthe AIOC concession, the importance of Britain as a Cold War ally, the Brit-ish role as military guarantor of the Middle East, and Britain’s strategic re-sponsibility for Iran.44 In many respects the bargain of 1947 remained intact.In the speciªc case of Iran, this meant that if the United States wanted Britainto maintain its commitments, British economic interests had to be protectedas far as possible. Britain was thus an important factor in, and constraint on,the Iranian policies of Truman and Eisenhower. Both administrations explic-itly recognized this. In 1950, for example, Truman administration ofªcials ac-knowledged that the success of U.S. objectives in Iran depended on Britishcooperation.45 Similarly, Eisenhower’s NSC warned in March 1953 that to goagainst Britain in Iran would risk losing more elsewhere than could be gainedin Iran itself.46

The Truman and Eisenhower administrations also shared concerns aboutthe sanctity of contracts and about the implications of the oil crisis for worldoil supplies and U.S. oil interests in the Middle East. Three commercial mo-tives played a crucial role in U.S. policy across both administrations. First, thesanctity of contracts demanded an oil settlement that included reasonablecompensation to the AIOC. Abrogation of the contract without compensa-tion would have adverse repercussions for U.S. oil interests in the Middle Eastand for international trade more generally. Second, the stability of MiddleEastern oil concessions required the setting of a benchmark agreement thatrepresented a fair division of proªts between concession-granter and conces-sion-holder. U.S. policymakers saw this benchmark as ARAMCO’s 50:50proªt-sharing agreement with Saudi Arabia in December 1950.47 Thereafterthe stability of Middle Eastern oil concessions demanded that an Iranian set-tlement should be roughly equivalent to this formula.48 Third, the U.S. gov-

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43. Barry Rubin has described it as “a state within a state.” See Rubin, Paved with Good Intentions,p. 12. See also John Gallagher, Decline, Revival and Fall of the British Empire: The Ford Lectures andOther Essays (Cambridge, UK: Cambridge University Press, 1982), p. 125; and Arthur C. Millspaugh,Americans in Persia (Washington, DC: Brookings Institution, 1946), p. 162.

44. Ambassador at Large (Jessup) to Sec. State, memorandum, 25 July 1950, in FRUS, 1950, Vol. V,p. 189; and NSC Statement of Proposed Policy, 27 June 1951, in FRUS, 1952–1954, Vol. X, p. 74.

45. Richards to Sec. State, 14 December 1950, in FRUS, 1950, Vol. V, p. 632.

46. “Memorandum of Discussion at the 135th meeting of the NSC,” 4 March 1953, in FRUS, 1952–1954, Vol. X, p. 694.

47. Irvine H. Anderson, ARAMCO, The United States, and Saudi Arabia: A Study of the Dynamics ofForeign Oil Policy 1933–50 (Princeton, NJ: Princeton University Press, 1981).

48. As Secretary of State Dulles explained: “Whatever solution is found for [the] Iranian problem will

ernment wanted to ensure that oil supplies to the West and price stability inthe world oil markets were maintained. The loss of Iranian oil in 1951 de-prived the West of a signiªcant percentage of its oil needs. The resultingshortfall threatened price instability, caused an additional oil charge of$700,000,000 for Europe as a whole,49 and jeopardized Western rearmamentand reconstruction programs spurred by the Korean War. The Truman ad-ministration responded with Plan of Action No. 1, under which nineteenAmerican oil companies entered a voluntary arrangement to alleviate oilshortages. Authorized under the Defense Production Act (DPA), normalcommercial activities were intensiªed and tanker capacity used more effec-tively through voluntary reroutings to supply 19,429,000 barrels of crude oiland 26,558,000 barrels of reªned products to areas in need in the “freeworld.”50 The Eisenhower administration did something similar, only in re-verse, to protect price and supply stability in world oil markets as Iranian oilwas brought back on line. By the spring of 1953, oil supplies had been so suc-cessfully restored that doubts arose in British circles about whether it was inthe UK’s interest to reach a settlement so long as Middle East crude oil re-mained in surplus and tankers were plentiful.51 These circumstances meantthat production cutbacks were required elsewhere if the reintegration of Ira-nian oil was not to destabilize the world market. To this end, Eisenhower, likeTruman before him, used the DPA to give U.S. oil companies antitrust pro-tection to form a voluntary arrangement. This time it took the form of the oilconsortium that resolved the dispute in October 1954 in a deal that upheldthe 50:50 proªt-sharing standard, protected the sanctity of contracts byawarding the AIOC compensation, and somewhat molliªed British concernsby giving the AIOC a 40-percent stake.52

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soon be forced on both of us [Britain and America] by all other countries if [it is] in any way more ad-vantageous to them than those now in operation.” Cited from Secretary of State to the Embassy inIran, 23 September 1953, in FRUS, 1952–1954, Vol. X, p. 802.

49. National Intelligence Report 14, p. 269.

50. Report to the NSC by the Secretary of the Interior and Petroleum Administrator for Defense,8 December 1952, in HSTL, PSF, p. 10.

51. Paper by Peter E. Ramsbotham, “Persian Oil—Future Policy,” 14 April 1953, in UKNA, FO 371/104615; and John H. Brook (Ministry of Fuel and Power) to John A. Beckett (Petroleum Attaché atthe British Embassy Washington), n.d., in UKNA, POWE 33 1937.

52. The agreement also gave the National Iranian Oil Company (NIOC) nominal ownership of theIranian oil industry’s assets and divided the concession thus: The AIOC had a 40 percent stake, theªve U.S. oil majors shared 40 percent, Royal Dutch-Shell was given 14 percent, and CompagnieFrançaise des Pétroles received 6 percent. Intensive lobbying by a number of smaller American inde-pendent oil companies resulted in the U.S. oil majors reducing their share to 7 percent each, thus leav-ing 5 percent to divide between nine independents, who created the Iricon Agency for this purpose.Compensation to the AIOC amounted to £25 million from Iran, £32.4 million from other consor-tium participants in the ªrst year of operations, and a further payment per ton of crude oil equivalentto £182 million. James H. Bamberg, The History of the British Petroleum Company, Vol. 2: The Anglo-Iranian Years (New York: Cambridge University Press, 1994), p. 509.

The issue of Iranian leadership was the ªnal factor that guided the poli-cies of both administrations . Truman and Eisenhower pragmatically wantedstrong pro-Western Iranian leadership and, where possible, to work with theforces of nationalism. The continuity was stronger than claimed by somescholars, particularly those who have cited Operation Ajax as signaling a hard-line shift by the Eisenhower administration away from Mossadegh and na-tionalist movements more generally. In reality, the Truman administrationhad dealt happily with the more hardline General Razmara prior to his assassi-nation and Mossadegh’s accession to power. Once Mossadegh was in ofªce,the Truman administration, for want of a better option, subsumed its reserva-tions about him as a “violent nationalist” and an unknown “quantity.”53 Hewas considered honest and anti-Russian, had promised to keep Iranian oilºowing to its existing customers, and would give the United States a chanceto channel nationalism against Communism.54 His popularity meant also thathe was perhaps the only person who could, in George McGhee’s words, “makean agreement with the Anglo-Iranian Oil Company and get away with it.”55

However, by the time Eisenhower came to power, Mossadegh was but a paleshadow of initial U.S. assessments and hopes. The Iranian leader by thatpoint was relying increasingly on Tudeh support to sustain himself in power,was undermining the loyalty of the armed forces to the Shah, was un-supportive of the Iranian military, and seemed unable or unwilling to settlethe oil dispute.56 Alternative leadership was thus required, and the Eisenhoweradministration moved to secure it. That the motivation was more ºexiblethan often alleged is underlined by the continuing U.S. interest in Iranian na-tionalism. As the NSC stated on 2 January 1954, the United States should“recognize the strength of Iranian nationalist feeling; try to direct it into con-structive channels and be ready to exploit any opportunity to do so.”57

The second factor suggesting considerable similarities between the ad-ministrations in their selection of Iranian leadership is that it was the Trumanadministration that began the U.S. move away from Mossadegh and extreme

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53. State Dept. Draft minutes of State-Joint Chiefs of Staff meeting, 2 May 1951, in FRUS, 1951,Vol. V, p. 118; Sec. State to US Embassy Iran, 10 May 1951, in FRUS, 1952–1954, Vol. X, pp. 50–51; and State Dept. to U.S. Embassy Iran, 7 May 1951, in NA, RG 59, LM 73, Reel 44.

54. CIA report “Analysis of Iranian political situation,” 12 October 1951, in HSTL, PSF, Box 180,Subject File Iran; W. Averell Harriman to Sec. State, 19 July 1951, in HSTL, PSF, Box 180, SubjectFile Iran; and Diba, Mohammad Mossadegh, pp. 96–97. Acheson has argued that the United States wasslow to perceive Mossadegh’s essential conservatism. Dean Acheson, Present at the Creation, p. 504.

55. Memorandum of conversation by Richard Funkhouser, 14 May 1951, p. 315.

56. By 1953 he had drastically cut the secret service, decreased the military budget by 15 percent, andtransferred 15,000 men from the army to the gendarmerie. Copy of communication from U.S. Em-bassy Iran, 10 April 1953, in UKNA, FO 371/104566; and Ervand Abrahamian, Iran Between TwoRevolutions (Princeton: Princeton University Press, 1982), p. 273.

57. NSC Statement of Policy, 2 January 1954, p. 870.

Iranian nationalism.58 This shift was spurred by growing doubts both aboutAmerican rather than Communist ability to capture nationalist movementsgenerally and about Mossadegh himself. From August 1951 to the spring of1952, key ªgures in the Truman administration, including McGhee, U.S.Ambassador to Iran Loy Henderson, and Special Envoy Averell Harriman, be-came disenchanted with Mossadegh.59 Instead of a cooperative bulwarkagainst Communism, he had become “an apparently irresponsible fanatic”who lived in a “dream world” in which everyone helped Iran on his terms.Mossadegh was also unwilling to spend more on Iran’s military forces, threat-ened to sell oil to the Eastern bloc, and was intransigent in the oil dispute.60

By the spring of 1952 the Truman administration was prepared to letMossadegh fall in the hope that new leadership would bring an oil settlementand stability to Iran. At this time Britain was backing the candidacy of Qavamal-Saltana, who from three previous spells as prime minister was known to bea more conservative force liable to dissolve the Majlis (Iranian parliament)and arrest dissidents and extreme nationalists, including Mullah Kashani andMossadegh. Tellingly, the Truman administration implicitly supported Britishaction by exerting pressure on Mossadegh to resign, which he duly did on16 July.61 That Eisenhower ever had to deal with Mossadegh was due mainlyto British bungling of the opportunity to work with Qavam. This ªasco al-lowed Mossadegh to sweep back into power on a tide of nationalist fervor andforced the Truman administration to cozy up to him once more.

Policy Continuity in Practice: The Democrats’ “OneMore Big Effort”

There was considerable continuity in Truman’s and Eisenhower’s perceptionsof the oil crisis, of how best to save Iran, and of the considerations that deter-

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58. Others have also argued that Truman quite quickly recognized the need to be pragmatic in choos-ing leaders and regimes to work with. See, for example, Linda Wills Qaimmaqami, “The Catalyst ofNationalization: Max Thornburg and the Failure of Private Sector Developmentalism in Iran, 1947–51,” Diplomatic History, Vol. 19, No. 1 (Winter 1995), pp. 1–31. Qaimmaqami argues that by April1951 the Truman administration had recognized that future American security in the Middle Eastmeant large government loans, direct American intervention, support for dictatorship with democraticgenuºections, the promotion of stable political systems, and statist control over slow economic reforms.

59. Henderson to Berry, 12 January 1952, in NA, RG 59, LM 73, Reel 44; Henderson to State Dept.,28 September 1951, in FRUS, 1952–1954, Vol. X, p. 180; Card reference, 8 April 1952, in HSTL,Acheson Papers, Box 167; and McGhee, Envoy to the Middle World, p. 392.

60. Chargé d’Affaires U.S. Embassy U.K. (Penªeld) to State Dept., 18 January 1952, in FRUS, 1952–1954, Vol. X, p. 330; Henderson to State Dept., 4 January 1952, in FRUS, 1952–1954, Vol. X,p. 302; Berry to Sec. State, 8 January 1952, in FRUS, 1952–1954, Vol. X, p. 306; and W. AverellHarriman to Sec. State, 22 August 1951, in HSTL, PSF, Box 180, Subject File Iran.

61. For further details see section four.

mined policy parameters. They were united in giving priority to Cold Warconcerns and in identifying Communist subversion as the key threat to Iran.They agreed that the principal solution was political reform and socioeco-nomic improvement for the people of Iran, and they both were convincedthat achieving this goal depended on an oil settlement. They also agreedabout the structural constraints that helped shape their policies toward Iran.The leadership in Iran had to be strong and pro-Western, the United Statescould push Britain only so far, and an oil settlement in Iran should threatenneither the sanctity of contracts nor supply and price stability in world oilmarkets. The acid test of continuity between the two administrations willcome when we analyze policy in practice. For this there is no better test thanthe ªnal, incomplete attempt of the Truman administration to resolve the oilcrisis and the subsequent decision of the Eisenhower administration aboutwhat to do with it.

On 30 August 1952 Truman and Churchill made a joint proposal toMossadegh for the settlement of the dispute. Mossadegh rejected the overtureon 24 September and threatened to terminate diplomatic relations with Brit-ain unless an improved offer was made quickly. On 8 October 1952 Secretaryof State Acheson duly laid out yet another American oil plan, one that envis-aged three stages. First, a lump sum settlement would circumvent long-stand-ing problems of compensation and counterclaims. This settlement would in-volve the purchase of 15 million tons of crude oil and a further 15 milliontons of oil-related products. Second, an international oil distribution com-pany would be created to purchase up to 25 million tons of oil and relatedproducts per annum from the National Iranian Oil Company (NIOC) for atleast a decade. Third, the international oil distribution company would ad-vance $100 million against future oil purchases. Payment would comprise aninitial lump sum of $50 million followed by $10 million a month thereafter.62

The plan required the cooperation of three parties that the State Depart-ment anticipated would be reluctant to act: the major U.S. oil companies, theU.S. Justice Department, and Britain. The U.S. oil companies were neededbecause only they had the tanker, reªnery, and market capacity to liftsufªcient quantities of Iranian oil and to reintegrate it into the world market.The Justice Department was involved because the plan required the U.S. oilmajors to form a voluntary consortium that potentially exposed them to pros-ecution under Sherman antitrust legislation. British cooperation was neededbecause of the UK’s threat to sue anyone lifting oil from Iran and because ofthe country’s wider importance in U.S. Cold War strategy.

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62. For greater detail, see Sec. State to U.S. Embassy Iran, 10 October 1952, in FRUS, 1952–1954,Vol. X, pp. 488–490.

Preliminary negotiations conªrmed State Department expectations: TheBritish wanted no part of the plan.63 The most abhorrent feature, from Lon-don’s perspective, was the prospect of a settlement without arbitration, a resultdeemed “bad in principle, dangerous in its repercussions and impractica-ble.”64 Besides, even before the plan was aired, Churchill had resolved to usethe joint proposal as his ace to trump Mossadegh’s Communist card. Insteadof making more concessions, Britain wanted to meet Mossadegh with a “con-tinued Truman-Churchill accord” and pressure him to accept terms endorsedby the United States as “fair and just.”65 The Justice Department was perhapseven more hostile because the U.S. oil companies were facing criminal andcivil proceedings as a result of an investigation launched in 1949 by the Fed-eral Trade Commission (FTC) into the activities of the international oil car-tel. Granting the oil companies antitrust immunity would undermine the on-going antitrust action and the credibility of the FTC, and it would also exposethe Truman administration to damaging charges of pandering to big businesswith a presidential election imminent. As for the oil majors themselves, theytoo were wary of the State Department’s proposal. Why should they cooper-ate with an administration that was prosecuting them for the very kind of ac-tion that it now urged them to undertake in Iran, especially when the DPA,which could have provided antitrust protection, was due to expire in June1953?66 Besides, they did not need Iranian oil; their commercial concerns in-clined them to use Iran’s fate as an example to any country considering break-ing the sanctity of contracts,67 and their views of the importance of British co-operation differed from those of the State Department. The latter adopted atough approach. For example, on 21 November the director of the PolicyPlanning Staff, Paul Nitze, told Texas Oil Company representatives that al-though full British agreement was desirable “it might not . . . be possible tosave Iran if one accepted a U.K. veto over every action we considered neces-sary.”68 But the oil companies knew that their afªliates often required the co-

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63. Draft Cabinet paper by Ross, “The United States Ideas of a Settlement of the Oil Dispute,” n.d.,in UKNA, FO 371/98702; and Sec. State to U.S. Embassy UK, 12 October 1952, in FRUS, 1952–1954, Vol. X, p. 491.

64. FO to Washington Embassy, 25 October 1952, in UKNA, FO 371/98702.

65. FO to Washington Embassy containing a personal message from Churchill to Truman, 28 Sep-tember 1952, in UKNA, FO 371/98698; CC (52)81, pt. 2, 26 September 1952, in UKNA, CAB128; FO to Washington Embassy, 12 October 1952, in UKNA, FO 371/98701; and “Notes for talkwith Mr. Nitze,” n.d. and unsigned, in UKNA, FO 371/98702.

66. Princeton Seminar, 15 May 1954, in HSTL, Acheson Papers, Reel 4, track 1, p. 3; and Engler, ThePolitics of Oil, p. 210.

67. Brewster B. Jennings to George McGhee, 17 May 1951, in NA, RG 59, LM 73, Reel 39; StandardOil to McGhee, 18 May 1951 in NA, RG 59, LM 73, Reel 39; and Memorandum of conversation byRichard Funkhouser, 14 May 1951, pp. 309–315.

68. Acheson was even more direct. The British, as he put it, were “not using their brains” and should

operation of the British government and that the AIOC was convinced that ithad “reached the last ditch” and had resolved to stand ªrm on its legal rights.69

Industry solidarity was required if the stability of oil concessions were to besafeguarded. Not even potential rich pickings in Iran could dissuade themfrom making British agreement a prerequisite for their possible involvementin the oil plan.70

At this point the case for the transition between administrations causingpolicy change begins to unravel. The State Department tackled the numerousreservations about its oil plan in a way that scholars emphasizing Republicansympathies for big business as an explanation of apparent policy change mightªnd difªcult to reconcile. On 7 November Truman agreed to Acheson’s re-quest that he use sections 708a and 708b of the 1950 DPA to allow U.S. oilcompanies to form a voluntary arrangement to pump Iranian oil. State De-partment ofªcials then used Truman’s approval of antitrust immunity for theoil companies to cow the Justice Department into submission. On 6 January1953, with the support of the Defense Department, they declared that anindictment of the oil majors by a grand jury on the complaint of the U.S.government would be immensely damaging to American interests.71 On11 January the Truman administration, relieved of its presidential electoralconsiderations by the Republican victory in November 1952, publicized itsdecision to drop criminal proceedings against the oil majors. Fifteen yearslater, in what one ofªcial described as “a textbook example of how to bringabout the evisceration of an anti-trust case,” civil proceedings were also closedout.72

Thus, the Truman rather than the Eisenhower administration sacriªcedthe principles and legal obligations of the Justice Department on the altar of

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either exploit Iranian resources or allow someone else to do it. Memorandum of conversation betweenNitze and Texas Oil Company representatives (Rogers, Long, Lilly), 21 November 1952, in NA,RG 59, LM 73, Reel 34; and Memorandum of meeting with oil company representatives, 4 December1952, in NA, RG 59, LM 73, Reel 34.

69. Unsigned letter to Reiber, 4 September 1952, in BP Archives, 91032; and 28th meeting of theCabinet Persia (Ofªcial) Committee, 13 October 1952, in BP Archives, 101912.

70. Linder to Sec. State, 11 December 1952, in NA, RG 59, LM 73, Reel 34. This line basically re-peated that taken by the oil companies in earlier discussions with the Truman administration in May1951. The companies claimed that going into Iran would be tantamount to “Highway robbery” andthat it “would amount to cutting the industry’s own throat since ‘concession jumping’ would be fatalfor concessionaires in other parts of the world.” Memorandum of conversation by Richard Funkhous-er, 14 May 1951, p. 311. Fesharaki has argued that the fear of further nationalization was the most im-portant motive for the solidarity of the U.S. companies with the AIOC. Fereidun Fesharaki, Develop-ment of the Iranian Oil Industry: International and Domestic Aspects (New York: Praeger, 1976), p. 45.

71. Report to the NSC, “National Security problems concerning free world petroleum demands andpotential supplies,” 6 January 1953, in HSTL, PSF, Box 219, NSC Meetings 124–128, folder NSCMeeting 128, 9 January 1953, p. 9; and Memorandum of conversation by Byroade, 8 August 1952, inFRUS, 1952–1954, Vol. IX, pp. 265–266.

72. Robert Grifªth, “Forging America’s Postwar Order,” in Michael J. Lacey, The Truman Presidency (NewYork: Cambridge University Press, 1989), p. 78.

Cold War expediency. In doing so, the State Department removed two of thethree stumbling blocks to its oil plan. The Justice Department was no longer athreat, and the oil companies were molliªed somewhat by the guarantee ofantitrust immunity and the termination of criminal proceedings. As McGheenoted, the legal action had in a perverse way been “perhaps helpful, insofar asit could be called off.”73 This left just the British to be dealt with. AlthoughChurchill’s government had refrained from outright rejection of the oil planfor fear of pushing the United States into independent action in Iran, it hadactually resolved to do “nothing, and persuade the Americans to do the same,”even if this meant risking a break in Anglo-Iranian relations.74 To increase thepressure on Britain, the Truman administration played up the immediacy ofthe Communist threat to Iran.75 Also, as the British government had feared,U.S. ofªcials threatened independent action and withdrawal of support fromthe oil embargo.76 When Britain remained obstinate, the United States dem-onstrated its determination to force through the oil plan by underminingBritish economic sanctions on Iran. On 6 December the U.S. government is-sued a statement that was widely interpreted as an invitation to handle Iranianoil.77 At the end of December a joint U.S.-Iranian Economic and Social De-velopment Commission was established that allowed Iran to receive up to $20million during the U.S. ªscal year ending 30 June 1953 in addition to funds

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73. Princeton Seminar, 15 May 1954, in HSTL, Acheson Papers, Reel 4, track 2, p. 6. Leonard J.Emmerglick, a senior antitrust attorney, claimed that the reason for the abandonment of the criminalproceedings was “the considered opinion of two Presidents, two Secretaries of State or their principalrepresentatives, two Secretaries of Defense, and in addition, the Chairman of the Joint Chiefs of Staff,the Central Intelligence Agency, and a number of present and former Cabinet members.” Cited inDaniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Simon and Schuster,1991), p. 475.

74. FO to Washington Embassy, 11 October 1952, in UKNA, FO 371/98700; “Persian Oil,” Minuteby Makins, 9 October 1952, in UKNA, FO 371/98700; Teheran Embassy to FO, 9 October 1952 inUKNA, FO 371/98700; Washington Embassy to FO, 11 October 1952, in UKNA, FO 371/98701;and Gifford to State Dept., 13 October 1952, in FRUS, 1952–1954, Vol. X, p. 493.

75. This is not to suggest that U.S. concerns about the Communist threat were not sincerely held.Nevertheless, exaggerating the immediacy of that threat was intended to spur British action. In No-vember the CIA did not envisage a serious crisis in the short term, but the State Department neverthe-less warned Britain of an imminent danger that Iran would break all ties with the West. CIA NationalIntelligence Estimate, “Probable Developments in Iran through 1953,” 13 November 1952, in HSTL,Student Research B File: Oil Crisis in Iran, Box 1, File 9; and Memorandum by Byroade, 22 Novem-ber 1952, in NA, RG 59, LM 73, Reel 34.

76. “November,” 20 November 1952, in HSTL, Acheson Papers, Box 67a; Nitze to Sec. State, 22 De-cember 1952, in FRUS, 1952–1954, Vol. X, p. 556; Byroade to Acheson, “Recommended Change inU.S. Policy toward Iran,” 16 September 1952, in HSTL, Acheson Papers, Box 167; 27th meeting ofthe Cabinet Persia (Ofªcial) Committee, 8 October 1952, in BP Archives, 101912; Minute byMakins, 26 September 1952, in UKNA, FO 371/98698; Funkhouser to Dorsz, “Resumption of Ira-nian Oil Movements,” 3 October 1951, in NA, LM 73, Reel 39; and memorandum of meeting byRichards (GTI), 28 October 1952, in NA, RG 59, LM 73, Reel 39.

77. A. E. C. Drake (New York) to Snow, 9 December 1952, in BP Archives, 91032.

already available through the ongoing Technical Cooperation Agreement.U.S. ofªcials also gave consideration to Mossadegh’s request for 120,000 tonsof sugar on credit in the knowledge that Britain would interpret this as tanta-mount to budgetary assistance.78

The British were skeptical about the U.S. predictions of imminent disas-ter in Iran, and they considered Mossadegh “a spent force.”79 In London’sview, the termination of Anglo-Iranian relations on 22 October was simply“the ªnal absurdity of Mossadeq’s measures.”80 Crucially the American elec-torate delivered a reprieve for the British. Prompt consultations with the in-coming administration suggested that it would be more sympathetic to Brit-ain’s position. The oil companies would likely exert more inºuence, the newadministration would probably “favor clear-cut action as contrasted with thealleged ‘shilly-shallying’ of the present administration,” and a desire for quicksuccesses against Communism would undoubtedly induce a strong line withMossadegh.81 British ofªcials realized that the Truman administration sud-denly faced a pressing time constraint if it wanted to settle the dispute beforeit left ofªce, and Britain could hold off its pressure for a ªnite period, espe-cially given the strong de facto support of the U.S. oil majors for the Britishposition.82

Britain thus refused to abandon the principle of arbitration, attacked theU.S. retreat on the oil embargo, and publicly reafªrmed its intent to prosecuteany purchaser of Iranian oil.83 Britain also gave the Truman administration anultimatum: either it cooperated on British terms or the government wouldsimply “play out time.”84 Matters became so tense that the U.S. ambassador toBritain, Walter Gifford, warned that uncertainty about Mossadegh’s willing-

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78. Henderson to State Dept., 31 December 1952, in FRUS, 1952–1954, Vol. X, p. 569.

79. Record of conversation with G. H. Middleton, 19 November 1952, in BP Archives, 91032.

80. Letter by W. D. Heathe Eves, 16 October 1952, in BP Archives, 91032.

81. “Persia,” handwritten note by Strang dated 29 November 1952 on minute by Bowker, 28 Novem-ber 1952, in UKNA, FO 371/98703; C. E. Steel, quoted by Moyara de Moraes Ruehsen, “Operation“Ajax” Revisited: Iran, 1953,” Middle Eastern Studies, Vol. 29, No. 3 (July 1993), p. 470; and Wash-ington Embassy to FO, 6 December 1952, in UKNA, FO 371/98703.

82. As AIOC chairman Sir William Fraser advised, it remained highly unlikely that the major U.S. oilcompanies would break ranks by lifting Iranian oil, and only they had the capacity and markets tomake a signiªcant difference. Extracts from minutes of the 32nd meeting of the Cabinet Persia(Ofªcial) Committee, 21 October 1952, in BP Archives, 91032; and FO to Paris, 13 December 1952,in UKNA, FO 371/98704.

83. Gifford to State Dept., 24 December 1952, in FRUS, 1952–54, Vol. X, p. 557 n. 3; WashingtonEmbassy to FO, 6 December 1952, in BP Archives, 46596; FO “Intel” despatched to posts abroad, 6December 1952, in BP Archives, 53228; and Parliamentary Debates (Hansard) 5th Series, Vol. 509,8 December 1952, pp. 35–39.

84. Draft minute by Rothnie, 18 December 1952, in UKNA, FO 371/98704; and Minute by Dixon,5 December 1952, in UKNA, FO 371/98703.

ness to accept the oil plan meant that it was not worth risking further damageto Anglo-American relations.85 Reluctantly, the Truman administrationaccepted the need for modiªcations to its oil plan that were acceptable to Brit-ain and that thus removed the last obstacle to the U.S. oil majors’ participa-tion. Revised terms were presented to Mossadegh on 15 January 1953. Inter-national arbitration was substituted for the lump-sum compensation schemeand was to be calculated on the basis of Britain’s Coal Nationalisation Act of1946. The proposed U.S. $100 million advance against future deliveries of oilto the U.S. Defense Materials Procurement Agency was tied to an arbitrationagreement and an oil sales contract. When these were concluded, Iran wouldreceive immediately $50 million and the rest in installments. Also, the AIOCor a subsidiary, either alone or as part of a consortium, should have the rightto market Iranian oil.86

Time ran out on 20 January 1953 for the Truman administration, andit is at this point that most accounts of the oil crisis have identiªed the onsetof a different U.S. approach to Iran. Indeed, the British themselves predictedthat “the prospect was never better for the vital 100% Anglo-U.S. front whichhas never yet really been established against Mossadeq.”87 However, none ofthese things actually happened. The Truman rather than the Eisenhower ad-ministration dropped criminal proceedings against the oil majors. Also, theEisenhower administration’s approach to the oil crisis and the forcefulness ofits policy toward Britain were quite similar to its predecessor’s. Eisenhower ac-tually underwrote the Truman administration’s oil plan in autumn 1952 bysupporting the extension of antitrust immunity to the oil companies beyondthe expiry of Section 708 of the DPA on 30 June 1953.88 More important,once in ofªce his administration decided not only to run with the plan but topush the matter hard with Britain—hard enough to belie claims that Eisen-hower and Dulles had been waiting to launch a coordinated Anglo-Americanfront against Mossadegh. Mossadegh retreated from the basis for compensa-tion agreed in January. Britain declared that it had conceded as much as itwould and demanded State Department assurances that the United Stateswould not press for any further concessions.89 But the Eisenhower administra-tion refused either to accept that the proposals of 15 January had sanctity inthemselves or to regard them as “a joint offer in the fullest sense of the

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85. Gifford to State Dept., 16 December 1952, in FRUS, 1952–1954, Vol. X, p. 551 n. 2.

86. Bamberg, History of the British Petroleum Company, p. 482.

87. Record of conversation with G. H. Middleton, 19 November 1952.

88. Dulles to Bruce, 3 December 1952, in Dwight D. Eisenhower (DDE) Library, J. F. Dulles Papers1951–59, Subject Series, Box 8, Classiªed.

89. FO to Washington Embassy, n.d., in UKNA, FO 371/104612; and Washington Embassy to Lon-don, 27 January 1953, in BP Archives, 100570.

word.”90 The administration also demonstrated considerable patience withMossadegh and sympathized with his desire to establish, and limit, theamount of compensation payable by Iran. Moreover, U.S. ofªcials took seri-ously Mossadegh’s threat in early February to sell Iranian oil at a 50 percentdiscount to all comers if Britain insisted on compensation for loss of futureproªts. A greater availability of oil tankers meant that Mossadegh was betterplaced than at any time previously to carry out his implicit threat to sell oil toCommunist countries or to dump Iranian oil on world markets.91

Instead of moving strongly against Mossadegh, as accounts emphasizing achange of policy between administrations would lead one to expect, Eisen-hower turned to the British to make still further concessions. In fact, Britainwas cast back into the same position it had occupied during the Trumanadministration, when it was subjected to “the strongest pressures to do thingswe think are foolish”92 but unable to ignore those pressures for fear of a breachin Anglo-American relations. On 20 February they duly conceded a formulafor compensation payments that addressed Iranian and, by implication, U.S.concerns about Iran’s acceptance of an unquantiªed burden. In effect Iranwould make cash payments representing 25 percent of its annual oil exportrevenue for twenty years with the balance of whatever compensation theInternational Court of Justice awarded.93 It is telling of the continuitybetween the policies of the Truman and Eisenhower administrations towardIran that British embassy ofªcials concluded on 27 January that “U.S. viewshad changed little with the change in administration.” AmbassadorHenderson likewise felt that “there was little or no difference in the policies ofour Government under the new Eisenhower Administration so far as Iran wasconcerned.”94

How can the strong elements of continuity in both the principles and practiceof the Truman and Eisenhower administrations’ policies toward Iran be rec-

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90. Elm, Oil, Power, and Principle, pp. 278–280; and Bamberg, History of the British Petroleum Com-pany, p. 484.

91. Sec. State to U.S. Embassy U.K., 10 February 1953, in FRUS, 1952–1954, Vol. X, p. 663; andCC (53) 20th conclusion, 17 March 1953, UKNA, CAB 128.

92. Minute by Butler, 30 January 1953, in UKNA, POWE 33 1937.

93. Bamberg, History of the British Petroleum Company, p. 485.

94. Reminiscences of Loy Henderson, in DDE Library, Columbia University Oral Research OfªceCollection (CUOROC), p. 11; and memorandum of conversation between Nitze, Byroade, and Rich-ards with British Embassy ofªcials, 27 January 1953, in FRUS, 1952–1954, Vol. X, p. 651 n. 4.

onciled with frequent claims that Eisenhower took a ªrmer stance than Tru-man did vis-à-vis Iran? The answer lies in policy change at the levels of theMiddle East and Iran. This change did not, as popularly assumed, occur as aresult of the transition between the Truman and Eisenhower administrations.Rather, it began in early 1952 as a consequence of the proven ineffectivenessof U.S. policy. Thereafter, as analysis of three shifts in policy during 1952 willshow, the Truman administration eventually resolved to assume principal re-sponsibility for the Middle East and to steer a course more independent ofBritain in Iran. Thus, although the Eisenhower administration ultimately re-sorted to means different from those favored by its predecessor, it inheritedand continued, rather than initiated, a more assertive U.S. policy.

From mid 1949 the Truman administration sought ªrst informally, andthen formally, to mediate a negotiated settlement of the oil dispute. By far itsmost important success was in deterring British military action, which threat-ened to escalate the crisis by allowing Soviet intervention in Northern Iran.Britain considered launching a limited military strike to seize the oil reªneryat Abadan, which was easier than occupying southern Iran and would easepressure on the British treasury because crude oil could be shipped from Ku-wait to Abadan for reªning. Ultimately, though, the Truman administration’sstrong and consistent opposition to military intervention, coupled with itsmediation efforts, closed off this British option. At a key meeting in Septem-ber 1951, the British Cabinet concluded: “We could not afford to break withthe United States on an issue of this kind.”95

The Truman administration also made some progress in reducing the gapbetween British and Iranian positions in the oil dispute. The British shiftedunder sustained U.S. pressure from resolute rejection of nationalization to atleast agreeing to recognize the principle of it in any oil deal. They also im-proved the terms of the Supplemental Oil Agreement to a point they claimedwas equivalent to the 50:50 proªt-sharing standard. More important still, theUnited States developed a much-improved knowledge of conditions in Iranand of Mossadegh. In the summer of 1951 Averell Harriman went to Iran inthe ªrst formal U.S. mediation attempt. Beginning on 14 July and continuinguntil late August, the Harriman Mission revealed that Iran’s position was toorigid and impractical. As for Mossadegh, he had strong support, and the Shahwas unlikely to move against him, but he also seemed unwilling to listen toAmerican advice.96 This latter point in particular was important because it

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95. CM (51)60, 27 September 1951, in UKNA, CAB 128; and London to Teheran Embassy, 27 Sep-tember 1951, in BP Archives, 100652.

96. Harriman to State Dept., 22 August 1951, in FRUS, 1952–1954, Vol. X, pp. 144–145; Harrimanto State Dept., 23 August 1951, in FRUS, 1952–1954, Vol. X, p. 148; Harriman to State Dept., 19July 1951, in FRUS, 1952–1954, Vol. X, p. 95; and Harriman to Sec. State, 19 July 1951, in HSTL,

was echoed in October when Mossadegh met State Department representa-tives while in New York for a UN Security Council meeting. Acheson after-ward likened these talks to “walking in a maze and every so often ªnding one-self at the beginning again.”97

Yet despite some successes and improved intelligence, U.S. policy by1952 had failed to deliver an oil deal, and Britain and Iran had settled into anuncompromising stalemate that jeopardized U.S. objectives. Worse still, theTruman administration had reached an impasse that J. H. Ferguson, deputydirector of the State Department’s Policy Planning Staff, had long feared: Theadministration was stuck in the position of more or less permanent mediatorwith insufªcient inºuence to effect a solution but so deeply committed that ithad to keep on indeªnitely.98 The administration also was stuck with an inef-fective strategy that was racked with inherent contradictions. In November1950 the State Department had laid out U.S. policy in order to seek a parallelthough not identical UK-U.S. approach to Iran that would promote U.S.aims without either undermining Britain’s position or giving Iran the impres-sion of a basic Anglo-American policy cleavage.99

Framed at a time when the United States acknowledged that the successof its policies in Iran depended on British cooperation, this strategy recog-nized that the U.S. government had only a limited ability to determine eventswithin Iran. Yet the strategy also assumed sufªcient American strength to con-trol the demands of Iranian nationalists and to persuade Britain’s governmentto appease Tehran, and it presupposed that the United States could develop adistinctive policy toward Iran that would harness nationalism against Com-munism but would neither provide the Iranians with an opportunity to ex-ploit Anglo-American differences nor severely damage British interests inIran. Less than eighteen months later, this naive strategy lay in tatters.Mossadegh proved difªcult to deal with, and Iranian nationalism was hard tocontrol. Morover, Iran managed to ªnd and exploit every sign of Anglo-American disagreement. The United States disagreed with Britain overwhether to force or persuade Iran to accept an oil settlement, what termswould represent an acceptable oil deal, the strength of the Communist threatto Iran, the impact of Iranian nationalism, the usefulness of dealing withMossadegh, and the chances of reaching an oil agreement with a successor

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PSF, Subject File, Box 180, Iran—W. Averell Harriman. Harriman reported, too, that Mossadegh wasseemingly “obsessed with the idea of eliminating completely British oil company operations andinºuence in Iran.” See Harriman to State Dept., 17 July 1951, in FRUS, 1952–1954, Vol. X, p. 94.


98. Report by Ferguson, “Further American activity in resolving the Iranian oil controversy,” 8 August1951, in NA, RG 59, LM 73, Reel 39.

99. Sec. State to U.S. Embassy Iran, 18 November 1950, in FRUS, 1950, Vol. V, p. 614.

government.100 But the United States could not break with Britain becauseBritish cooperation was vital to Middle Eastern defense, and Iran in any casewould beneªt from Anglo-American disharmony. In part because of this di-lemma, U.S. mediation was repeatedly “hijacked” as Britain and Iran used itless to ªnd a settlement than to pull the United States toward their respectivepositions. Iran played up the Communist threat in order to enlist Washing-ton’s help in forcing ever greater concessions from Britain. Conversely theBritish, who resented but could not ignore American “interference,” wantedto use formal U.S. mediation to tie American policymakers into supportingspeciªc terms and prevent the United States from suggesting later on thatBritain make more concessions. As a result, Mossadegh came under greaterpressure to settle on British terms.

In short, U.S. policy was increasingly stymied and required an urgent re-view. This review, and the chain of events that developed from it, lay behindthe Truman administration’s adoption of a progressively more assertive policytoward Iran. By this point, unlike in 1950, the British and Iranian positionswere clear. Mossadegh was unlikely either to become more reliable or to re-frain from using Anglo-American differences to push for greater concessions.Britain was locked into a war of attrition and had abandoned hope of makingan agreement with Mossadegh. Any prospect that British policy would changewas dashed when the election of Churchill’s Conservative Party in the autumnof 1951 added only “a certain truculent braggadocio” to the existing stance.101

Although U.S. policy was the key to breaking the Anglo-Iranian impasse,U.S. policymakers in early 1952 were divided over three possible courses ofaction. Some wanted to give Britain ªrmer support, an option that appealedto those concerned about Anglo-American relations and the wider Cold Warpicture. Prior to a Truman-Churchill summit meeting in January 1952, U.S.ofªcials readily acknowledged that the United States still had a special rela-tionship with Britain and that Britain was vital to U.S. interests, particularlyin the containment of Communism.102 But they also acknowledged that the

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100. Acheson, memorandum, 4 November 1951, in FRUS, 1952–1954, Vol. X, pp. 256–258; Min-ute by Churchill, 24 November 1951, in UKNA, PREM 11 725; CC (51)18, 19 December 1951, inUKNA, CAB 128; Record of conversation by Dixon, 14 November 1951, in UKNA, FO 371/91612;CIA report, “Analysis of the Iranian political situation,” 12 October 1951, in HSTL, PSF, Box 180,Subject ªle Iran; Henderson to State Dept., 22 October 1951, in FRUS, 1952–1954, Vol. X, pp. 236–240; and Shepherd to FO, 7 November 1951, in UKNA, FO 371/91472.

101. Sec. State to State Dept., 10 November 1951, in FRUS, 1952–1954, Vol. X, p. 280.

102. Paper prepared by the Policy Planning Staff, “Outline for Discussion at JCS Meeting November21 1951,” 20 November 1951, in FRUS, 1951, Vol. IV, pp. 980–985; and State Dept. record of aState–Joint Chiefs of Staff Meeting held at the Pentagon, 21 November 1951, in FRUS, 1951, Vol. IV,pp. 985–989. In January 1951 Ambassador Gifford reported that American prestige in Britain was atits lowest ebb in ªve years. Gifford to Sec. State, 20 January 1951, in FRUS, 1951, Vol. IV, pp. 894–899.

relationship was not working well, a point that was underscored during thesummit talks when the two sides clashed over Iran. Robert Lovett reportedthat Acheson gave Foreign Secretary Anthony Eden such a “beating” over Iranthat their exchanges were “probably as personal and bitter as any betweenEden and Dulles.”103 Against this backdrop, some ofªcials argued that itwas time to ease the pressure on Britain a little in the interest of wider consid-erations.

The proposal to support Britain also appealed to those who doubted thatan oil deal could be struck with Mossadegh or who feared that indulgence ofMossadegh would send bad signals about the U.S. commitment to the sanc-tity of contracts. More important, it was promoted by those who were wary ofaccepting greater commitments in the Middle East—a consideration thatreºected the still unresolved dilemma of how great a role the United Statesshould assume in an area it had long deemed vital to its interests. For sometime, the British had been urging the United States to accept a more equitableshare of the burden of defending the region.104 Churchill even pressed at theWashington talks for a U.S. brigade to help protect the Suez Canal.105 U.S.ofªcials who supported closer cooperation with Britain over Iran hoped that itwould “sugar the pill” of U.S. efforts to avoid overt association with Britishimperialism and to fend off Churchill’s attempts to drag the United Statesinto “the Suez Canal mess.”106 They also hoped that cooperation on Iranwould soften the impact of the continued reluctance of the Joint Chiefs ofStaff in particular to make greater commitments in the Middle East.

Other U.S. ofªcials, however, wanted to maintain a “hands off” ap-proach vis-à-vis Iran. Two years of informal and formal mediation had landedthe United States in a deeply embarrassing position. The U.S. governmenthad tried to assert its neutrality in the oil dispute and yet to deny Iran theright of neutrality in the Cold War. Moreover, U.S. claims to neutrality werecompromised by Anglo-Iranian refusal to interpret U.S. intervention in thisway107and by some of the actions the United States took. For example, on 17

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103. Lovett to Eisenhower, 24 January 1952, in FRUS, 1952–1954, Vol. VI, Part 1, pp. 859–861; andDavid Carlton, Anthony Eden: A Biography (London: Allen Lane, 1981), p. 307. See also Acheson,Present at the Creation, p. 600; and David S. McLellan, Dean Acheson: The State Department Years(New York: Dodd Mead, 1976), p. 390.

104. Cherwell to Prime Minister, 8 November 1951, in UKNA, PREM 11 708; and U.S. Ambassadorin France (Bruce) to Sec. State, 19 December 1951, in FRUS, 1951, Vol. IV, pp. 993–995.

105. “U.S. Delegation minutes of the third formal meeting of President Truman and Prime MinisterChurchill at the White House,” 8 January 1952, in FRUS, 1952–1954, Vol. VI, Part 1, pp. 775–786.

106. Steering group on preparation for President and Prime Minister talks, negotiating paper “Gen-eral Middle East,” 31 December 1951, in HSTL, PSF, Box 116, Truman-Churchill talks, General ªle,Truman-Churchill meetings: Negotiating Papers, Folder 1.

107. Harold Macmillan, for example, noted that from the start the Americans “were certainly unhelp-ful. Perhaps the oil interests were jealous; perhaps the politicians were not sorry to see Socialist Britain

February 1950 the U.S. embassy in London conceded that “much of [the] ef-fect of our categorical statement regarding non-intervention may be dissi-pated by our action in having promised [the] Iranian Ambassador to study de-tailed points of issue between [the] A.I.O.C. and Iran.”108 Conversely, a CIAreport in October 1951 warned of dire consequences if the United States“continues to side spectacularly with the British,” and in January 1952Henderson reported that the United States had gone so far in trying to beloyal to Britain that it had created the impression that it was deferring to theBritish lead in Iran and elsewhere in the Middle East.109 In addition to theseproblems, the recent course of events suggested that the United States wouldbe unable to impose its will decisively on either Britain or Iran. By contrast, awithdrawal from overt mediation of the oil crisis to a less active positionwould ease Anglo-American relations, and an end to American third-partyingmight force Iran to initiate bilateral negotiations. Supporters of this view ar-gued that it was politically damaging both at home and abroad, especially inan election year, to adhere to a policy that was widely seen as ineffective.

A third group of ofªcials wanted to steer a course increasingly independ-ent of Britain in Iran and in the wider Middle East. Pressure was growingwithin the State Department for this idea. Many there sympathized withHenderson’s query in January 1952 whether the United States “can affordmuch longer to defer to Brit[ish] leadership in this area.”110 Association withBritain was damaging U.S. values and standing throughout the MiddleEast,111 and British policies often seemingly ran contrary to U.S. objectives.The Truman administration sensed that Britain had palpably mishandled theoil crisis and was pushing Iran toward Communism. The hardline Britishstance against Egypt repeated the mistake and brought into question the long-term future of Britain’s huge military base in Suez and the strategically impor-tant Suez Canal. Furthermore, with Iran and Egypt alienated, the prospectswere poor for regional defense cooperation. Perhaps, therefore, the time hadcome for the administration to be more assertive vis-à-vis Britain in order tosave Iran from Communism. Proponents of this view argued that the United

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hoist with their own petard.” Alistair Horne, MacMillan, Vol. 1: The Making of a Prime Minister,1897–1957 (London: Macmillan, 1988), p. 310.

108. U.S. Embassy U.K. to State Dept., 17 February 1950, in NA, RG 59, LM 73, Reel 39; andMemorandum of conversation with Ala, 27 April 1950, in HSTL, Acheson Papers, Box 65.

109. W. Averell Harriman, CIA report, “Analysis of Iranian Political Situation,” 12 October 1951, inHSTL, PSF, Box 180, Subject File Iran; and Henderson to State Dept., 5 January 1952, in FRUS,1952–1954, Vol. X, p. 304.

110. Henderson to State Dept., 5 January 1952, in FRUS, 1952–1954, Vol. X, p. 304.

111. Articles by Henry F. Grady, “British American Policy in Iran,” 18 March 1952, in HSTL, H. F.Grady Papers, Box 2, General File, p. 4; W. Averell Harriman, CIA report, “Analysis of Iranian Politi-cal Situation,” 12 October 1951, in HSTL, PSF, Box 180, Subject File Iran; and Henderson to StateDept., 5 January 1952, in FRUS, 1952–1954, Vol. X, p. 304.

States should look anew at the option of purchasing Iranian oil112 and shouldconvince Britain of U.S. determination to force the issue by giving Mos-sadegh budgetary assistance irrespective of an oil settlement.113

Competing preferences within and across different U.S. governmentagencies made for an inconclusive debate in early 1952. However, the debatesignaled that two years of largely ineffective mediation had created a momen-tum for policy change. In subsequent months, U.S. policy toward Iran shiftedon three occasions. In each case the policy became more assertive as Britainand Iran were forced into concessions that upheld the sanctity of contractsand the 50:50 proªt-sharing precedent, that encouraged the consolidation ofpro-Western leadership in Iran, and that respected British interests as much aspossible without compromising U.S. objectives.

The ªrst policy shift was signaled in March 1952 by the State Depart-ment’s Ofªce of Greek, Turkish, and Iranian Affairs (GTI), which argued thatU.S. third-partying may have encouraged Iran’s uncompromising positionand that the United States should exercise greater reserve in the hope ofencouraging Iran to initiate talks with Britain. The GTI acknowledgedthe difªculty of working with Mossadegh and argued that the United Statesshould refrain from undercutting British pressure on Tehran and shouldencourage the Shah to adopt a ªrmer position as a counterweight toMossadegh’s recklessness. Although none of these measures promised a rapidoil settlement, the GTI claimed that over time they would move events in theright direction.114

This change amounted to an implicit deal with Britain to tradeMossadegh in return for progress in the oil dispute under new Iranian leader-ship. The timing of the shift owed to the conºuence of several factors. First,existing policy had proven ineffective in reaching an oil settlement. Second,Anglo-American relations were under pressure, and the British remained im-placably hostile to Mossadegh and were eager to deal with a successor govern-ment. Third, as early as September 1951 the U.S. Psychological StrategyBoard, an agency responsible for political warfare, had concluded that “thereis limited agreement that Mossadegh will have to be replaced before thechances for an oil agreement can improve.”115 By 1952 this sentiment had

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112. This was suggested in September 1951. Memorandum by Webb, 21 September 1951, in FRUS,1952–1954, Vol. X, p. 164.

113. Memorandum by William E. Warne to Ambassador Loy Henderson, 30 July 1952, in NA, LM73, Reel 44; and W. E. Warne, Oral History, 21 May 1988, in HSTL, p. 98. This was in line with Am-bassador Grady’s desire a year earlier to push an Export-Import Bank loan. Grady to State Dept., 13August 1951, in FRUS, 1952–1954, Vol. X, p. 136.

114. Card reference, 25 March 1952, in HSTL, Acheson Papers, Box 167.

115. Psychological Strategy Board, 21 September 1951, in HSTL, Student Research B File: Iran Oil1951–1953, Box 1, File 9, pt. 11.

hardened and spread, something Mossadegh himself seemingly vindicated bydemanding in February 1952 that Iran receive all revenues from Iranian oiland asserting his preference for “100 per cent of 50 cents rather than 50 percent of a dollar.”116 Fourth, U.S. assessments of the possibility for constructivechange in Iran had become markedly more optimistic. In February 1952some ofªcials estimated that the Iranian government would, after all, be ableto meet its ªnancial obligations until at least the end of the summer, despiteno obvious upturn in its economic fortunes.117 Also, conditions in Iranseemed to have changed sufªciently to create the possibility that a more rea-sonable successor government would come to power and would settle the oilcrisis and move Iran away from the Soviet orbit.118

Although the Truman administration stopped short of outright collabo-ration with Britain’s efforts to remove Mossadegh in favor of Qavam, theadministration readied itself for a change of Iranian leadership. The State De-partment considered what funds might be made available to a successor gov-ernment and authorized Ambassador Henderson to tell the Shah that no oilsettlement was likely with Mossadegh and that Iran’s problems could not besolved without such a settlement. Furthermore, Henderson reported that hewas favorably impressed by Qavam in June and was given permission to dis-cuss the suitability of alternatives to Mossadegh proposed by the Shah.119 Inaddition, the Truman administration took steps that clearly helped Britain’s ef-forts to compel Mossadegh to resign. For example, U.S. ofªcials rejected Ira-nian suggestions that the United States could purchase oil at a 50 percent dis-count and refused to provide the Mossadegh with budgetary assistance. TheTruman administration’s position on this matter seemed to change so sharplythat British ofªcials reported, with satisfaction, that the United States wasnow “more opposed than we are to a continuance of the Musaddiq regime.”120

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116. Record of meeting in Strang’s room in FO, 27 February 1952, in BP Archives, 101912.

117. “Probable Developments in Iran in 1952 in the Absence of an Oil Settlement,” 4 February 1952,in HSTL, PSF, NIE-46.

118. Washington Embassy to FO, 14 March 1952, in UKNA, FO 371/98686; Middleton to A. D.M. Ross, 17 March 1952, in UKNA, FO 371/98687; Henderson to State Dept., 13 March 1952, inFRUS, 1952–1954, Vol. X, p. 368; Henderson to U.S. Embassy UK, 28 February 1952, in FRUS,1952–1954, Vol. X, pp. 361–363; and Card reference, 3 June 1952, in HSTL, Acheson Papers, Box167.

119. Henderson to State Dept., 12 June 1952, in FRUS, 1952–1954, Vol. X, p. 392 n. 3; Sec. State toIran Embassy, 30 May 1952, in FRUS, 1952–1954, Vol. X, p. 387; Sec. State to Iran Embassy, 29 May1952, in FRUS, 1952–1954, Vol. X, p. 386 n. 2; and Henderson to State Department, 28 May 1952,in FRUS, 1952–1954, Vol. X, pp. 384–386.

120. Henderson to State Dept., 29 January 1952, in FRUS, 1952–1954, Vol. X, p. 344; H. N.Howard Papers, in HSTL, Box 14, Middle East Chronological File 1950–1954; Middleton to A. D.M. Ross, 17 March 1952, in UKNA, FO 371/98687; Franks to FO, 11 April 1952, in UKNA, FO

The second policy shift was catalyzed by Britain’s failure to capitalize onQavam’s appointment as prime minister and Mossadegh’s consequent returnto power in July 1952. This debacle convinced U.S. policymakers that Iranwas “going down the drain” and that something had to be done.121 Reluc-tantly, they concluded that they would have to work with Mossadegh becauseno opposition elements could be expected to take responsibility in Iran “for along time if ever.” They surmised that it would be futile to hope Mossadeghwould soon fall from power again or to consider “most unorthodox methods,”such as sponsoring a coup.122 U.S. ofªcials also believed they would have toresume mediating the oil dispute in order to safeguard Iran against Commu-nism and the sanctity of contracts against a gradual breakdown of the oilboycott.

This policy shift resulted in the Anglo-American joint proposal of 30 Au-gust 1952. Although it ultimately failed, its negotiation was characterized by amuch more assertive U.S. line toward Britain, including threats to adopt anindependent policy. On 31 July the State Department presented its plan:

(i) An immediate U.S. grant of $10 million.(ii) Purchase by the AIOC or another British nominated company of all

oil products presently in storage in Iran at Persian Gulf prices less an appro-priate discount.

(iii) An arbitration committee of three people to consider compensationbut which would not have to commence prior to aid.

(iv) Prompt undertaking of negotiations for a settlement.(v) Britain and America not to oppose Iranian sales of oil in excess to that

purchased by the AIOC.123

These proposals demonstrated a new U.S. determination to drive through asettlement regardless of British sensitivities. The terms represented what theAmericans believed ought to be acceptable rather than what suited Britisharguments about commercial feasibility. The demand for a prompt British re-sponse showed newfound resolve. Moreover, the style of presentation was dif-ferent. It was not a suggestion or an overture for discussion. Rather, it was a

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371/98688; FO to Washington Embassy, 21 April 1952, in UKNA, FO 371/98688; and Hendersonto State Dept., 24 May 1952, in FRUS, 1952–1954, Vol. X, p. 382.

121. Franks to FO, 29 July 1952, in UKNA, FO 371/98691.

122. Henderson to State Dept., 28 July 1952, in FRUS, 1952–1954, Vol. X, p. 416; Washington Em-bassy to FO, 26 July 1952, in UKNA, FO 371/98691; Washington Embassy to FO, 31 July 1952, inUKNA, FO 371/98691; Franks to FO containing copy of State Dept. instructions to Henderson, 31July 1952, in UKNA, FO 371/98691; Franks to FO, 29 July 1952, in UKNA, FO 371/98691; andHenderson to State Dept., 31 July 1952, in FRUS, 1952–1954, Vol. X, p. 427.

123. Franks to FO containing copy of State Dept. instructions to Henderson, 31 July 1952, inUKNA, FO 371/98691.

fait accompli backed by an implicit ultimatum: If Britain did not cooperate,the United States would ªnally take independent action in Iran.

British ofªcials disagreed with the United States that there was no chanceof dealing with a successor government, that aid should be given toMossadegh simply because there was no immediate prospect of obtaining amore compliant government, and that Mossadegh provided any real defenseagainst Communism.124 They also suspected that the Americans had decidedto supplant their interests in Iran and the Middle East more generally.125 Con-sequently, the British government rejected the U.S. plan, arguing that it com-promised British negotiating principles of fair compensation, security for theeffective payment of compensation, no better deal for Iran than other conces-sion-granting countries would provide, and no settlement based on discrimi-nation against British nationals.126 However, the new U.S. assertiveness re-vealed itself again in a backlash against British counterproposals that wereconsidered “relevant and related to our proposals . . . only by being expressedon paper by means of a typewriter.”127 On 12 August the British ambassadorto Washington, Oliver Franks, reported grave difªculty in dissuading theState Department from taking immediate independent action.128 The nextday, Acheson warned that emergency aid would soon have to be granted toIran “on a crash basis,” and six days later Truman told Churchill that if Britishpolicies lost Iran to Communism it would “place a strain on general Anglo-American relationships not pleasant to contemplate.”129

Churchill ultimately extracted some concessions from the Truman ad-ministration and linked the United States with the joint proposal. However,

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124. Teheran Embassy to FO, 2 August 1952, in UKNA, FO 371/98692; FO to Washington Em-bassy containing personal message for Acheson, 9 August 1952, in UKNA, FO 371/98691; and ex-tracts from the 22nd meeting of the Cabinet Persia (Ofªcial) Committee, 15 August 1952, in BP Ar-chives, 101912.

125. The British took this threat seriously. For example, Churchill warned Truman that Anglo-Ameri-can relations would be seriously damaged “if it came about that American oil interests were working totake our place in the Persian oil ªelds.” Note by Secretary of the Cabinet circulating texts of telegramsexchanged between the Prime Minister and the President, 19 August 1952, in UKNA, CAB 129, C(52)286.

126. Memorandum by Foreign Secretary “Persia,” 5 August 1952, in UKNA, CAB 129, C (52)276.

127. Acheson, Present at the Creation, p. 680. British amendments to the U.S. proposals included: (a)The AIOC should not abandon its recourse to legal action against other buyers of Iranian oil prior to aªnal settlement; (b) U.S. aid should be given after, not before, Iran accepted arbitration on reasonableterms and made an agreement with the AIOC to lift stocks of oil; (c) Purchases by the AIOC of Ira-nian oil should be conditional on the acceptance of arbitration; and (d) The approval of the AIOCBoard would be required before these proposals could be considered as a binding agreement betweenBritain and America.See Parliamentary Debates, Commons, 5th ser., Vol. 504 (23 July 1952), p. 533;Letter to E. E. Hudson, 31 July 1952, in BP Archives, 53518; and FO to Washington Embassy con-taining personal message for Acheson, 9 August 1952, in UKNA, FO 371/98691.

128. Franks to FO, 12 August 1952, in UKNA, FO 371/98693.

129. Washington Embassy to FO with a personal message from Acheson for Eden, 13 August 1952, in

this compromise did not signal a waning of U.S. assertiveness. On the con-trary, the Truman administration’s third shift in its policy toward Iran came inthe autumn of 1952, when it launched an intensive effort to resolve the oilcrisis against the opposition not only of Britain but also of the U.S. oil majorsand the U.S. Justice Department. This increasingly assertive policy emergedas policymakers favoring a more independent U.S. role in the Middle Eastgained ascendancy within the administration.

Earlier on, U.S. policy had been hamstrung by its traditional dependenceon Britain’s defense role in the Middle East. This factor was highlighted inlate 1949 and 1950 when the State Department and the Joint Chiefs of Staffdisagreed about the relative importance of the region. The State Departmentwanted to extend containment to the Middle East by including it in grant aidand military assistance programs.130 As Acheson recalled, “we began to thinkthat the Russian menace was a little more acute than we thought it was. TheNorth Atlantic began to evolve, and we said ‘Well, we’ve got to have some-thing comparable to that in the Middle East.’”131 By contrast, the U.S. mili-tary deemphasized the Middle East and, in January 1950, concluded that “themilitary strategic interests in the N.E.A. area were now viewed as being almostnegligible in light of interests in other areas.”132 As General Lyman L.Lemnitzer, the director of the Ofªce of Military Assistance, bluntly conªrmedin February 1950, it was “impossible to devote any substantial portion of ourlimited military resources to this particular area.”133

In 1952 the battle over the Middle East was rejoined. Priorities elsewhere,notably in Korea, ensured continued Pentagon resistance to even indirect U.S.responsibilities in the Middle East. Because the local countries in the regionwere unable, either individually or collectively, to resist Communism, U.S.military planners sought to rely on still inºuential but declining imperialpowers to defend the area.134 For example, in July 1952 the Defense Depart-

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UKNA, FO 371/98693; and Note by Secretary of the Cabinet circulating texts of telegrams ex-changed between the Prime Minister and the President, 19 August 1952, in UKNA, CAB 129, C(52)286.

130. Secretary of State to Embassy Iran, 15 July 1950, in FRUS, 1950, Vol. V, p. 173.

131. Princeton Seminar, 15–16 May 1954, in HSTL, Acheson Papers, Box 76, Folder 1, Reel 5, track2, p. 16.

132. Memorandum by Chief of Programme Staff MDAP (Bray) to Deputy Director MDA (Ohly), 25January 1950, in FRUS, 1950, Vol. V, p. 122.

133. Ohly to Bray, 6 February 1950, in FRUS, 1950, Vol. V, p. 123 n. 6.

134. “Commonwealth Capabilities and Intentions in the Middle East,” 31 December 1951, inHSTL, Acheson Papers, Box 167; Circular airgram to certain missions in the Near East, 15 August1952 in HSTL, Acheson Papers, Box 167; State Dept. to U.S. Embassy U.K., 6 September 1952 inHSTL, Acheson Papers, Box 167; Negotiating paper by State Dept., “Middle East Command,” 4 Jan-uary 1952, in FRUS, 1952–1954, Vol. IX, pp. 168–170; Peter L. Hahn, “Containment and EgyptianNationalism: The Unsuccessful Effort to Establish the Middle East Command, 1951–53,” DiplomaticHistory, Vol. 11, No. 1 (Winter 1987), pp. 23–40; “Key problems affecting U.S. efforts to strengthen

ment insisted that the “French and especially the British must not be allowedto reduce their military responsibilities, by transferring them to the UnitedStates.”135 George McGhee saw this strategy as part of a “deliberate policy thatour Joint Chiefs of Staff very carefully thought out to do nothing in the Mid-dle East so that if a vacuum occurred the British would have to attempt to ªllit.”136

Even if that was the case, however, time and events were moving againstthe Joint Chiefs. Intermittent and sometimes inconsistent efforts in the Mid-dle East to use imperial powers and local governments had resulted in an at-tempt to “follow the middle-of-the-road” that had satisªed neither side andrendered basic U.S. policies ineffective in combating neutralism and Com-munism.137 This outcome was no longer tolerable, and it was also increasinglyunnecessary insofar as deference to British sensibilities was based mainly onBritain’s defense role in the Middle East. Imperial decline meant that by 1952the British could do little more than provide the minimum requirements forthe shortest line of defense east of Suez. Indeed, Britain’s commitment to Eu-rope had required the diversion of resources from the Middle East.138 In con-trast to growing U.S. interest in the Northern Tier, British defense plannersconcentrated on an “inner core” of Middle Eastern states centered on Egypt.Such was Britain’s unpopularity and decline that U.S. ofªcials like HenryByroade, the assistant secretary of state for Near Eastern, South Asian, andAfrican Affairs, even feared that “there is a real possibility that the British aregoing to get out of the area in a rather disgraceful way.”139

All of this culminated in a crucial shift in U.S. Middle Eastern strategy.Led by Paul Nitze, State Department ofªcials castigated the Joint Chiefs ofStaff for their “Never-Never Land kind of analysis”140 and argued that Britain’sdecline in the Middle East opened a power vacuum that “whether we like it or

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the Near East,” 25 April 1951, in HSTL, PSF, Intelligence File, Box 253, NIE-26, p. 7; and “Prospectsfor an inclusive Middle East Defense Organization,” 17 March 1952, in HSTL, PSF, Intelligence File,Box 258, Speciªc Estimates, nos. 21–35, p. 3.

135. Hoskins to Byroade, “Reappraisal of U.S. Policies in the NEA Area,” 25 July 1952, in FRUS,1952–1954, Vol. IX, pp. 256–262.

136. Princeton Seminar, 15–16 May 1954, in HSTL, Acheson Papers, Box 76, Reel 6, p. 7.

137. Hoskins to Byroade, “Reappraisal of U.S. Policies in the NEA Area,” 25 July 1952, in FRUS,1952–1954, Vol. IX, pp. 256–262.

138. Nitze to Cabell et al., 26 May 1952, in H. W. Brands, “The Cairo-Teheran Connection inAnglo-American Rivalry in the Middle East, 1951–1953,” The International History Review, Vol. 11,No. 3 (August 1989), p. 444; and John Kent, British Imperial Strategy and the Origins of the Cold War1944–49 (Leicester, NY: Leicester University Press, 1993), p. 203.

139. Memorandum of conversation by Byroade, 8 August 1952, in FRUS, 1952–1954, Vol. IX,pp. 262–266; and minutes of State-Joint Chiefs of Staff Meeting, 18 June 1952, in FRUS, 1952–1954, Vol. IX, pp. 237–247.

140. Princeton Seminar, 15–16 May 1954, in HSTL, Acheson Papers, Box 76, Reel 6, p. 7.

not, will be ªlled by someone.”141 This meant both that “a U.S. assumption ofgreater leadership in the NEA area [is] increasingly essential if not inevita-ble”142 and that at least a limited U.S. military role in the region was necessary.Under enormous pressure the JCS conceded that it was unrealistic to rely onBritain for Middle Eastern defense and promised to investigate the possibilityof establishing a forward defense of the region to protect some of the oil andstrategic bases.143 No one expected an immediate buildup of U.S. militaryforces, but the real signiªcance was that forward planning “for the time,which may come in 1956 or 1957, when other commitments may permit thefurnishing of equipment in signiªcant quantities to the Near East,”144 freedU.S. Middle Eastern policy of some of its British shackles.

The connection between the greater U.S. role in the Middle East and thewhittling away of options in the oil dispute consonant with U.S. principlesbest explains the increasingly assertive U.S. policy in Iran. The new approachevolved under the Truman administration as a result of two years of frustrat-ing mediation and proven policy ineffectiveness. It culminated in the conclu-sion that “we must strike out on an independent policy or run the gravest riskof having Iran disappear behind the Iron Curtain and the whole military andpolitical situation in the Middle East change adversely to us.”145 This processwas embraced and continued by the Eisenhower administration. Dulles andSecretary of Defense Charles Wilson concluded in March 1953, as the Tru-man administration had begun to before them, that the United States mustassume the position of senior partner in Iran and the Middle East.146 Anglo-American cooperation remained important, but the United States was morewilling to present the British with a fait accompli in the expectation that theywould toe the line.147 Similarly, with respect to Iran, the Eisenhower adminis-

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141. Hoskins to Byroade, “Reappraisal of U.S. Policies in the NEA Area,” 25 July 1952, in FRUS,1952–1954, Vol. IX, p. 260.

142. Ibid., pp. 256–262.

143. Ibid., p. 267 n. 3; Matthews to Lovett, 15 August 1952, in FRUS, 1952–1954, Vol. IX, pp. 266–267; and David Devereux, “Britain and the Failure of Collective Defence in the Middle East, 1948–53,” in Ann Deighton, ed., Britain and the First Cold War (London: Macmillan, 1990), p. 247.

144. Matthews to Lovett, 15 August 1952, in FRUS, 1952–1954, Vol. IX, pp. 266–267. Severalmonths earlier, Nitze had argued: “If we think by 1956 we could really build up a defensive position inthe Middle East, then it would be possible to think about a forward strategy as we have in Western Eu-rope. In other words, if we look at this as a 1956 problem rather than a current problem, then perhapsmatters will not look as hopeless.” Minutes of State-Joint Chiefs of Staff Meeting, 18 June 1952, inFRUS, 1952–1954, Vol. IX, p. 238.


146. “Memoranda of 136th meeting NSC on Wednesday 11 March 1953,” 12 March 1953, in DDELibrary, Ann Whitman ªle, NSC Series, Box 4.

147. Anita Inder Singh, The Limits of British Inºuence: South Asia and the Anglo-American Relationship,1947–56 (London: Pinter, 1993), pp. 128–130.

tration continued the more independent and assertive line struck by its prede-cessor. In March 1954 Dulles warned that if Britain did not behave more “rea-sonably” in the still ongoing Iranian oil dispute, the United States would notworry about protecting British interests in Iran. The State Department evensuggested that $100 million be taken “out of a subsidy to England and use itto keep Iran going.”148

When the Eisenhower administration launched Operation Ajax to removeMossadegh in August 1953, it might well have drawn conªdence, as FrancisGavin has suggested, from the rapid U.S. military buildup that by then hadshifted the global East-West balance of power in America’s favor.149 Likewise,new senior personnel, notably the Dulles brothers, were undoubtedly instru-mental in the decision. Important though these factors may have been, we canshed further light on the Eisenhower administration’s hardening line in Iran,and even on the coup itself, by viewing them in the context of the Truman ad-ministration’s closure of options in Iran and progressive shift throughout1952 toward a more independent and assertive U.S. policy.

By continuing the Truman administration’s parting effort to resolvethe oil dispute, the Eisenhower administration was willing to deal withMossadegh within the policy parameters set by its predecessor. February andMarch 1953 were, in three respects, critical months in the decision to get ridof Mossadegh. First, the British concessions of 20 February marked the pointat which British and American economic interests were joined. Prior to theBritish concession the Eisenhower administration knew that, in the words ofActing Secretary of State Matthews, three years of pressure had reduced Brit-ain to a “position [which] is relatively close to rock bottom on principles.”150

Once Churchill’s government conceded the new offer, the United Statescould push for nothing further without breaking the 50:50 proªt-sharing pre-cedent or endangering the sanctity of contracts. In this light it is highly in-structive that Under Secretary of State General Walter Bedell Smith chose19 February to assure British ofªcials that he and Dulles “had now reachedthe limit of concession.”151

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148. Telephone conversation with Secretary Wilson, 17 March 1954, 9:25 a.m. and 10:15 a.m., inDDE Library, J. F. Dulles Papers, Telephone Call Series, Box 2, Telephone Memos. March 1954–30April 1954 (3).

149. Gavin, “Politics, Power, and U.S. Policy in Iran,” pp. 56–89.

150. Matthews to U.S. Embassy U.K., 3 February 1953, in FRUS, 1952–1954, Vol. X, p. 661.

151. Washington Embassy to FO, 19 February 1953, in FO 371/104612.

The second key factor was that two extremely important NSC meetingsheld in March 1953 revealed the dearth of remaining options in Iran. Secre-tary of State Dulles believed that the most likely immediate scenario was adictatorship under Mossadegh, but he was concerned that if the Soviet Unionmade a concerted effort to take Iran, the United States could do little short ofaccept it as a casus belli for a third world war.152 In the event that time couldbe bought, Dulles developed three options, all deeply problematic: (1) the re-call of Ambassador Henderson, whose credibility in Iranian eyes was probablyimpaired, before Mossadegh could seek his removal; (2) a public split withBritain and the pursuit of an independent policy to regain Iranian favor; or(3) the provision of material support to Mossadegh, including the dispatch oftechnicians and the purchase of oil from the NIOC.

The option of recalling Henderson was quickly rejected as a negative ex-ercise in damage limitation that would leave the administration vulnerable tocharges of simply abandoning Iran to Communism. The second option drewmore support. The administration had accepted its predecessor’s recognitionthat the United States had to assume the role of senior partner to Britain inthe Middle East. Moreover, as Deputy Assistant Secretary of State Jerneganput it in June 1953, U.S. ofªcials increasingly sensed that “to tie ourselves tothe tail of the British kite in the Middle East at the present juncture . . . wouldbe to abandon all hope of a peaceful alignment of that area with the West.”153

For the time being, however, aspirations for a bolder policy were thwarted bythe limited U.S. capabilities in the Middle East. The NSC conceded in June1953 that “tangible evidences of progress for United States purposes in thisarea are meagre. The evidences of frustration are plentiful. The margins foraction remain thin at best.”154 Thus, although cooperation with Britainseemed increasingly difªcult, it also remained essential. In the NSC debates ofMarch 1953 even Secretary Humphrey, who favored a more independentU.S. policy, conceded that “we could not afford to achieve our objectives inIran if we ‘did in’ the British at the same time.”155

All of this made Dulles’s ªnal option of supporting Mossadegh highlyproblematic as well. The oil companies remained unhappy about the prospectof bailing out Mossadegh and Iran. It was seemingly impossible to push Brit-ain into further concessions without jeopardizing U.S. interests in the sanctity

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152. Dulles had expressed similar sentiments to Henderson just prior to this meeting. Sec. State toU.S. Embassy Iran, 2 March 1953, in FRUS, 1952–1954, Vol. X, p. 692.

153. Jernegan to Sec. State, 17 June 1953, in FRUS, 1952–1954, Vol. VI, pp. 992–993.

154. Status of National Security Programs, 30 June 1953, in DDE Library, White House Ofªce,Ofªce to the Special Assistant for National Security Affairs, Records 1952–1961, NSC Series, Statusof Projects Sub-series, Box 3, NSC-161 (Vol. 1).

155. “Memoranda of 136th meeting NSC on Wednesday 11 March 1953,” 12 March 1953.

of contracts and the 50:50 proªt-sharing precedent. Further obstacles arosefrom Mossadegh himself and from the expected course of events in Iran. U.S.ofªcials had long doubted Mossadegh’s candor and regarded him as alwayswanting to take “one step forward in order to take two backward.”156 In Janu-ary Mossadegh had given the Republicans damaging ªrst-hand experience ofhis unreliability when he reneged on the agreed basis for international com-pensation. By March, Eisenhower doubted that even a unilateral U.S. agree-ment with Mossadegh excluding the British would be worth anything.157

Furthermore, U.S. ofªcials worried that unless Mossadegh accepted the20 February proposals for an oil settlement, Iran would slide gradually intoCommunism. To be sure, Iran did not face imminent economic collapse. Bythe ªrst half of 1953 its agrarian economy seemed capable of continuing forquite some time without an oil settlement, particularly if it received limitedU.S. technical assistance.158 Nor was the Eisenhower administration any moreinclined than its predecessor had been to regard Mossadegh as a Communistsympathizer. Secretary of State Dulles believed that “as long as the latter[Mossadegh] lives there was but little danger” of a Communist takeover, andon 19 May the State Department concluded that the previous six months hadwitnessed no increased Tudeh strength, despite the government’s failing abil-ity to maintain order and Mossadegh’s declining popularity, particularly withformer National Front leaders.159

The key problem, instead, was that Mossadegh seemed poised to becomethe Edvard Beneš of Iran.160 He was relying increasingly on Tudeh support inhis power struggle with the Shah as the National Front fragmented. His fail-ure to address socioeconomic problems seemingly encouraged Communistsubversion. His age and inªrmity made it difªcult to know how much longerhe could continue to lead. By the time he would step down, the position inIran would most probably have deteriorated so far that the United Stateswould be powerless to prevent a Tudeh takeover.

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156. Vernon Walters, Silent Missions (New York: Doubleday, 1978), p. 250.

157. “Memoranda of 136th meeting NSC on Wednesday 11 March 1953,” 12 March 1953.

158. Meeting NSC-147, 1 June 1953, in DDE Library, Ann Whitman File 1953–61, NSC Series,Box 4, p. 4; and FO to Washington Embassy, 7 March 1953, in UKNA, FO 371/104614. By 1952/1953 the economy was in a sustainable balance-of-payments and ªscal position without oil incomeand could probably have continued indeªnitely without further belt-tightening measures. PatrickClawson and Cyrus Sassanpour, “Adjustment to a Foreign Exchange Shock: Iran, 1951–1953,” Inter-national Journal of Middle East Studies, Vol. 19, No. 1 (February 1987), pp. 1–22.

159. 135th Meeting of the NSC, 4 March 1953, in FRUS, 1952–1954, Vol. X, pp. 692–701; “Reviewof Persian situation 1/11/52–31/3/53,” 19 May 1953, in UKNA, FO 371/104566; Memorandumfrom Washington Embassy, 11 May 1953, in UKNA, FO 371/104566; and Henderson to StateDept., 8 May 1953, in FRUS, 1952–1954, Vol. X, pp. 726–727.

160. Berry to State Dept., 17 August 1953, in FRUS, 1952–1954, Vol. X, p. 748.

After the high-level internal debates in March 1953, the Eisenhoweradministration concluced that it had ªnally run out of policy options conso-nant with the principles and considerations it shared with its predecessor. Allthat was left was for Mossadegh to accept the 20 February proposals or to lookto new leadership in Iran. Ambassador Henderson neatly captured this conti-nuity in U.S. policy in his observation that in the spring of 1953 “the Eisen-hower Administration, just as the Truman Administration during its lastdays, was coming to the conclusion that the only hope of saving Iran wasa changing of Prime Ministers.”161 Earlier movement in this direction thusaccelerated.

The third key development in the February/March period sealedMossadegh’s fate. On 4 March Mossadegh overplayed his Communist card.After Henderson told Mossadegh that the United States could not justifypurchasing Iranian oil until Britain’s outstanding claims were settled, theambassador added: “You could tell them that you were saving Iran fromCommunism.”162 On 20 March Mossadegh rejected the British offer of20 February and thereby publicly demonstrated that he either would not, orcould not, settle the oil crisis on terms acceptable to the United States.

This conºuence of events brought the Eisenhower administration to thelast option of its predecessor’s policy—a change of Iranian leadership. Theimportance of reaching this point in the eventual resort to a coup can be dem-onstrated by cross-referencing the events of February and March 1953 withDonald Wilber’s inside account of Operation Ajax. In late 1952 Britishofªcials led by Christopher Woodhouse, the former station chief in Tehranfor British intelligence, approached their U.S. counterparts led by KermitRoosevelt, the head of the U.S. Middle Eastern Division of the Ofªce ofPolicy Coordination within the CIA, with “Operation Boot” to oustMossadegh.163 The plan received a mixed reception, but the British hopedthat the new administration might be more sympathetic. However, the Eisen-hower administration initially preferred to continue the search for a negoti-ated settlement. Crucially, Wilber’s account conªrms that it was not untilMarch 1953 that Bedell Smith conceded that the U.S. government could nolonger approve of Mossadegh’s government, and it was not until 16 April that

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161. Reminiscences of Loy Henderson, in DDE Library, CUOROC, p. 11.

162. FO to Washington, 7 March 1953, in UKNA, FO 371/104614.

163. This called for the activation of a network, coordinated by the key British agents, the Rashidianbrothers, and comprising Majlis deputies, mullahs, tribal leaders, and journalists. See MarkGasiorowski, “The 1953 Coup d’Etat in Iran,” International Journal of Middle Eastern Studies, Vol. 19,No. 3 (August 1987), p. 270.

a comprehensive study, “Factors Involved in the Overthrow of Mossadeq,”was completed.164

Furthermore the process of closing off the last U.S. policy options, com-bined with the acknowledgment of probable meager U.S. inºuence overevents in Iran when Mossadegh eventually fell, helped spur U.S. policymakersto regard desperate measures as their only hope. With Iran seeminglydoomed, the risks involved in trying to effect a change of government weremuch reduced. As Wilber’s account reveals, U.S. ofªcials concluded that evenif the ouster of Mossadegh failed, it would probably only accelerate the inevi-table expulsion of the United States and eventual Tudeh triumph under So-viet direction. The growing belief that there was “nothing much to lose” byattempting to remove Mossadegh was evident in Henderson’s position at theend of March 1953. Whereas in July 1952 he had warned that a successfulmilitary coup would lead to Tudeh control of the nationalist movement, heargued in March 1953 that “nothing whatever was to be hoped for fromMussadeq” and that the risks involved in a change of government “would notbe too great.”165

This leaves only the means chosen to effect new leadership in Iran as asigniªcant difference in policy between the Truman and Eisenhower adminis-trations. This difference is undoubtedly of major importance and attributablein part to changes in key ofªcials. For instance, Roosevelt cites the pivotal roleof the Dulles brothers in approving Operation Ajax.166 Upon closer inspec-tion, however, the change of administration was not as crucial as often al-leged. Wilber’s account of the CIA operation reveals that the Eisenhower ad-ministration itself regarded a coup solely as a last resort, rather than apreferred option. Once the administration ªnally decided to pursue a changeof regime, it wanted at least to create the illusion that this was brought aboutthrough constitutional means. The U.S. station chief in Tehran was autho-rized on 20 May to spend one million rials per week bribing members of theIranian Majlis.167 Simultaneously, the Eisenhower administration stepped upits pressure on Mossadegh. In early April Dulles publicly declared that a quickresumption of AIOC talks was not expected. The administration continued

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164. Donald Wilber, Clandestine Service History: Overthrow of Premier Mossadeq of Iran, November1952–August 1953, available online at, <http://cryptome.org/iran-cia/cia-iran-pdf.htm�, pp. 1–2.

165. Wilber, Clandestine Service History, Appendix B, p. 27. See also Henderson to State Dept., 31July 1952, in FRUS, 1952–1954, Vol. X, p. 427; and Henderson to State Dept., 31 March 1953, inFRUS, 1952–1954, Vol. X, p. 721.

166. Roosevelt, Countercoup, p. 19. Apparently, Henderson disliked the methods “but saw no otherway of getting it done.” Moyara de Moraes Ruehsen, “Operation ‘Ajax,’” p. 476; and Henderson toRM Melbourne, 19 April 1980, in Library of Congress, Henderson Papers, Box 9, Subject File Iran—Misc.

167. Wilber, Clandestine Service History, pp. 1–2.

informally to restrain American oil technicians from going to Iran, and it heldup Point IV funding as part of what William Warne, the director of the U.S.Technical Co-operation Mission in Iran, recalls as “a deliberate, announcedintent to force the issue of Mossadegh in Iran.”168 Eisenhower used aconªdential plea by Mossadegh on 8 May for ªnancial aid to drive a wedgebetween him and his supporters. (Mossadegh had not consulted his support-ers before sending the letter.) Eisenhower hoped to make clear that Iran couldexpect little support so long as Mossadegh remained in power. The adminis-tration withheld a response until 29 June and then brusquely rejected the re-quest and published both letters before the response even reached Iran.169

Only after Mossadegh suspended the Majlis and thus corrupted the constitu-tional channels in Iran—and, in the process, eliminated the external meansof effecting change—did the Eisenhower administration ªnally embrace theproposal for a coup.

Indeed, it is logical to suggest that if Truman had remained in power andthese same circumstances had arisen his administration would probably havebeen forced into a similar intervention. The coup was, after all, the only re-maining means of salvaging U.S. interests in the region. The Truman admin-istration was aware that its earlier policies had failed, and that the situation inIran seemed increasingly hopeless. Hence, there was little to lose in the eventof failure. Certainly some ofªcials in the Truman administration, such asByroade and Henderson, came to see no alternative to a coup. Moreover, forall that is said about the Eisenhower administration’s greater willingness torely on covert operations, it is worth bearing in mind that Truman was theone who in June 1948 approved the creation of an ofªce within the CIA toconduct covert warfare against Communist subversion.170 Likewise, it was theTruman administration that set up covert operations in Iran from the late1940s that included the preparation of escape routes and guerrilla capabilitiesin the event of war, the maintenance of contacts with indigenous southerntribes, and operation BEDAMN against the Tudeh. In the ªnal lead-up to thecoup the Eisenhower administration simply turned these inherited covert as-sets, which already targeted the Tudeh, against Mossadegh.171

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168. Sec. State to U.S. Embassy Iran, 13 March 1953, in FRUS, 1952–1954, Vol. X, p. 715; Washing-ton to London, 3 April 1953, in BP Archives, 100570; Minute P. E. Ramsbotham, 10 June 1953, inUKNA, FO 371/104616; and W. E. Warne, Oral History, p. 93.

169. Mattison reported that Eisenhower’s letter in particular had helped to belie the carefully nurturedidea that Mossadegh enjoyed American patronage. See Mattison to State Dept., 17 July 1953, inFRUS, 1952–1954, Vol. X, p. 736; and Mattison to State Dept., 25 July 1953, in FRUS, 1952–1954,Vol. X, p. 738. For Eisenhower’s letter, see Yonah Alexander and Allan Nanes, eds., The United Statesand Iran: A Documentary History (Frederick, MD: Alethia Books, 1980), pp. 234–235.

170. Allen Dulles to Truman, in Gavin, “Politics, Power, and U.S. Policy in Iran,” p. 88 n. 130.

171. Details in Gasiorowski, “The 1953 Coup d’Etat in Iran,” pp. 268–269.

Conclusion

U.S. policy toward Iran from 1950 to 1954 has long been interpreted throughthe lens of differences between the Truman and Eisenhower administrations.The coup has likewise been viewed as a break with the Truman administra-tion’s policy and as having been driven by one or more factors connected withthe change of presidents—by Republican connections with big business, bythe Eisenhower administration’s penchant for covert action, or by new Anglo-American agreement in Iran. This article, however, has offered a more com-plex picture of U.S. policy during the oil crisis by arguing that, at least in Iran,Truman did see his desire for “a continuing foreign policy” largely realized,contrary to expectations at the time and many judgments since then. The as-sertiveness displayed by the Eisenhower administration was already evidentduring the ªnal year of the Truman administration, when it became clear thatU.S. policy was ineffective and that a new approach was needed. Likewise, theresort to a coup was more the logical outgrowth of shared goals and policy pa-rameters than of either Eisenhower’s assumption of ofªce or of the shift in theglobal and regional balance of power with the USSR.

Policy continuity between the administrations was rooted in shared fears,objectives, and assumptions. Both administrations viewed the oil crisis as aCold War issue, and their principal fear was that Iran would be lost to Com-munism. Given the dependence of Western Europe on Middle Eastern oilsupplies, the loss of Iran would inevitably have catastrophic effects for the restof the region and for global containment. Although the potential for armedconºict existed, neither administration believed that Soviet military annex-ation of Iran was likely—especially after the British were forced to abandontheir ill-considered threat of military action. Instead, both administrations re-garded Communist subversion as the principal threat to Iran—subversionthat took advantage of socioeconomic unrest and that, as the oil crisis devel-oped, threatened to overwhelm Iranian nationalism.

Both administrations sought to counter this threat by encouragingIranian political reform and economic development through the resurrectionof the Seven Year Plan. But because oil revenues were Iran’s principal source offoreign exchange and internal investment, U.S. ofªcials believed that theSeven Year Plan would be feasible only if the oil dispute were settled. The onlyalternative for keeping Iran aºoat was large-scale and sustained U.S. aid,which neither Truman nor Eisenhower was prepared to condone. Even if sucha proposal could make it through Congress, which was unlikely, it would an-tagonize Britain, encourage Iranian intransigence, and potentially burden theUnited States with an indeªnite aid commitment. Additionally, Iranian cor-ruption and mismanagement might negate the beneªcial effect of any aid.

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There was also a risk that dependency on external support would turn Iraniannationalism against U.S. “neoimperialism” and that “bailing out” Iran fromits predicament would jeopardize the sanctity of contracts.

Policy continuity between the Truman and Eisenhower administrationswas reinforced by common assumptions that deªned policy parameters andconsequent policy options. Policy toward Iran was shaped in part by consider-ations of Britain’s importance as the principal U.S. ally. It was also shaped byconcern about the implications of any settlement for oil supplies and thesanctity of contracts, and by a desire to work with the best candidates forstrong pro-Western leadership in Iran. Truman and Eisenhower both recog-nized that Britain was the chief U.S. ally, particularly in the Middle East,where U.S. resources and options were limited. Reliance on Britain’s militaryposition would have to continue until the United States could project powerinto the region and alternative arrangements could be made. Moreover, theAIOC concession was Britain’s most important overseas asset, and if theUnited States wanted Britain to remain an effective ally, British economic in-terests had to be protected as best possible. As for the sanctity of contracts andoil supplies, an oil settlement had to provide compensation to the AIOC insuch a way as to demonstrate that abrogation of contracts would be harshlypenalized. Also, the Truman and Eisenhower administrations acceptedARAMCO’s 50:50 proªt-sharing arrangement with Saudi Arabia as a justbenchmark that should be approximated but not exceeded in Iran. Ofªcials inboth administrations wanted to ensure that neither the oil dispute nor its res-olution would destabilize world oil prices through gluts, scarcity, or dumping.Finally, they had to work with Iranian leaders most likely to be pro-Westernand able to conclude an oil deal. For both administrations, this decision waspragmatic rather than ideological. Truman worked comfortably with Razmaraand hesitantly embraced Mossadegh as his successor mainly because of a lackof alternatives (though also in the hope that Mossadegh’s nationalist popular-ity would be sufªcient to force an oil deal past the Majlis). By 1952 Mos-sadegh had turned out to be such a disappointment that the Truman adminis-tration was prepared to see him overthrown if the new leadership andconsequent greater British cooperation would facilitate a conclusion of the oildispute. When Mossadegh returned to power soon afterward, Truman andEisenhower then tried to work with him again for want of a viable option un-til he rejected the 20 February proposals, a move that demonstrated once andfor all that he was unwilling to settle the oil dispute on terms acceptable to theUnited States.

The overwhelming weight of policy continuity rather than changebetween administrations is demonstrated in the way that the Eisenhower ad-ministration followed up on its predecessor’s last effort to solve the oil crisis.

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The Truman administration sacriªced criminal antitrust proceedings againstthe oil majors, and Eisenhower underwrote their subsequent participation inthe oil plan by agreeing to extend their antitrust immunity beyond the expiryof Section 708 of the DPA on 30 June 1953. Once in ofªce the Eisenhoweradministration confounded British expectations (and the retrospective judg-ment of some scholars) by refusing to establish a concerted Anglo-Americanposition against Mossadegh. Instead, Eisenhower extracted concessions fromBritain beyond those that Truman had asked and retained the Truman ad-ministration’s critical stance against Britain’s willingness to risk losing Iran toCommunism simply for the sake of British economic interests.

We now need to return to the question of policy change and Eisenhower’sapparently more assertive stance in the oil crisis. U.S. policy toward Iran from1950 to 1954 certainly changed tone, but this was not due to the change inadministration. Rather, the impetus for change came from the growing evi-dence that the policy was ineffective. By early 1952 two years of mediationfound the United States hopelessly entangled in the oil dispute withinsufªcient inºuence either to extract itself or to force Britain and Iran into asettlement. From this came the policy review that led to three notable shiftsin 1952, each time toward a more assertive and independent policy as op-tions were closed off and as policymakers who wanted a more aggressive U.S.role in the Middle East gained ascendance. By the autumn of 1952 Anglo-American priorities in Iran were seemingly irreconcilable, and the effects ofBritish decline had persuaded the Truman administration that the UnitedStates had to assume the role of senior partner in the region. This conclusionwas endorsed, not initiated, by the Eisenhower administration. The new ap-proach freed U.S. policy of one of its ªnal constraints. From late 1952 on theTruman and Eisenhower administrations could whittle away the few remain-ing policy options that were consonant with their shared goals and assump-tions.

Finally, the coup itself marked a clear and important difference in themeans used by the two administrations. The difference is explicable in part bybroader differences between the administrations, notably the preferences ofnew high-level ofªcials such as the Dulles brothers. However, the Eisenhoweradministration’s quest to overthrow the regime in Iran was the consequencenot of a random choice but of its decision to stick with its predecessor’s policyuntil a coup seemed the only remaining option. It is important to recognizebut not to overstate the differences between the Truman and Eisenhower ad-ministrations on the issue of covert operations. On the one hand, Truman ap-proved the CIA ofªce for covert operations against Communist subversion,and his administration conducted such operations in Iran and established theassets that Eisenhower eventually used against Mossadegh. On the other

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hand, it is clear that the Eisenhower administration wanted to bring aboutMossadegh’s overthrow in a way that would give the appearance of constitu-tional change. Orchestrating a coup was thus the last rather than the preferredmeans to ensure successful implementation of a policy that was itself deter-mined by the objectives, principles, and assumptions shared so strongly by thetwo administrations.

Acknowledgments

My thanks go to the Harry S. Truman Library and the British Academy fortheir research scholarships and to the British Petroleum Archive.

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marsh.reinterpreting truman + ike policies toward iran

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