Mussadeq had been busily proclaiming that nationalisation of oil would abolish poverty in Iran at one stroke. The Shah signed the necessary decrees on May 2nd. The immediate consequence was that the Iranian oil business was brought to a standstill, as the Britons who operated the Abadan refinery left the country and the international oil companies, supported by the British and American governments, refused to buy or transport Iranian oil.
This led to an economic crisis and a move against the Mussadeq government by the Shah in the summer of , which was met by huge and violent demonstrations in July. Iran broke off diplomatic relations with Britain in October. In April the shah yielded to Majlis pressure and demonstrations in the streets by naming Mosaddeq prime minister. Oil production came to a virtual standstill as British technicians left the country, and Britain imposed a worldwide embargo on the purchase of Iranian oil.
In September , Britain froze Iran's sterling assets and banned export of goods to Iran. It challenged the legality of the oil nationalization and took its case against Iran to the International Court of Justice at The Hague. The excitement generated by the nationalization issue, anti-British feeling, agitation by radical elements, and the conviction among Mosaddeq's advisers that Iran's maximum demands would, in the end, be met, however, led the government to reject all offers.
The economy began to suffer from the loss of foreign exchange and oil revenues. Meanwhile, Mosaddeq's growing popularity and power led to political chaos and eventual United States intervention.
Mosaddeq had come to office on the strength of support from the National Front and other parties in the Majlis and as a result of his great popularity. His popularity, growing power, and intransigence on the oil issue were creating friction between the prime minister and the shah.
In the summer of , the shah refused the prime minister's demand for the power to appoint the minister of war and, by implication, to control the armed forces. Mosaddeq resigned, three days of pro-Mosaddeq rioting followed, and the shah was forced to reappoint Mosaddeq to head the government.
Under these new terms, the contract was extended for another 32 years until , and changed the name from Anglo-Persian Oil Company to Anglo-Iranian Oil Company Mina. He implemented policies that produced dramatic infrastructural changes, through centralizing government power, proving to be largely successful. And although he was not entirely corrupt, he always attempted to rig the political game to always be in his favor. He silenced dissent, rigged elections, financially swayed other political players, and limited the power of other institutions in order to increase his power over them.
He was determined to govern as he pleased. But his power to reign was limited by various foreign influences during World War II During the s Iran was split into sectors, with a Soviet zone in the North, a British zone in the South, and only the mid-section governed by Iran, closely monitored by foreign powers. The Allied forces utilized Iran for the war cause. The Iranian population felt as if the Shah had made too much of a compromise when negotiating with London.
Conditions had not changed significantly enough for the people. The increase in annual payments only benefited the government and the working conditions had not changed.
Given Soviet influence, many workers began to embrace Communism. Reza Shah attempted to silence them with imprisonment, but by doing so inadvertently created the space for people to organize while they were behind bars to form the first real political party called Tudeh Behrooz.
In , Reza Shah abdicated, and then replaced by his son. Labor movements, the Majlis the Parliament , and social organizations came back to life with the departure of Reza Shah. Protests and demonstrations grew more frequent as there was more room for dissent against foreign influence.
Wages were almost nonexistent, workers were crammed into slums, and they barely had access to basic necessities. Bloody strikes and violent riots were happening, fighting to hold the British accountable to observe the Iranian labor laws. The demonstrations created enough of a problem that London could no longer ignore their demands. As a reaction to the strikes, Britain drafted the Supplemental Agreement.
This agreement still would prevent any ability for the Iranians to check the financial records of the company. Mohammad Reza Shah Pahlavi demanded the cabinet to approve the Supplemental Agreement, but he did not have enough power to sway the Majlis Parliament who also had to approve it.
The Majlis representatives were elected by the people, and accurately represented their desires more than other branches of government. Reelection was coming up and Mohammad Reza Shah was trying to cheat the elections to work in his favor, which was a major mistake.
A nationalist leader, Mohammad Mossadegh, organized people to demonstrate outside the palace. The Iranian population was charged up and demanding representation and a fair election. The United States had recently made an agreement with Saudi Arabia to equally split the profits of Saudi oil and Iran saw this as a possibility for itself. During all this mayhem, the Shah made a visit to the United States.
President Truman was concerned with the risk of Soviet influence and the Shah was in desperate need for support. Wiley Although they were at a standstill in discussing future discourse, the people back at home were fervently organizing. Leaders who were demonstrating for a fair election, gathered together to create the National Front.
The National Front was a coalition of various political parties, unions, social organizations, and groups that were devoted to democracy, anti-imperialism, and bringing an end to foreign influence in Iran. The British were appalled by how out-of-hand the situation had gotten, and strongly advised the Shah to get rid of Prime Minister Mansur and replace him with General Razmara, who was a politician in the pockets of foreign influence.
British and U. Even the religious leaders were joining the movement, such as Ayatollah Abolqasem Kashani. It became an Islamic duty to rid the land of the colonial yoke. Islamic scholars were central to the anti-imperialist movement. Although their reasons were slightly different than the nationalists, the joined together to create mass public support for self-determination and sovereignty Sreberny and Torfeh. By , Mossadegh suggested Iran should nationalize the oil company.
Although most of the National Front and Majlis were not ready for such a radical idea, it became a bulb in bloom. It was becoming clear that negotiations will the oil company and the British government were not achieving anything. It would be an agreement on paper, with no accountability, and for as long as the British had a significant hand in the economy and political system, Iran would not have to ability of self-determination.
On March 15, , the Majlis held a vote for the nationalization of the oil, which won unanimously. The Prime Minister of the time, Hussein Ala, stepped down realizing how little power he had over such a polarized political period.
Britain responding by strongly advising the Shah to nominate Sayyed Zia and lower the wages of oil workers even further. When it came time for the Majlis to elect a new Prime Minister, Mossadegh won a considerable victory. The Cold War exemplified the strength and capabilities of enemies, but also demonstrated the importance of allies. The United States had made a deal with Saudi Arabia for a split of oil profits, thinking it was best to be a positive example and a supportive influence rather than exert military force.
To exert military force might push nations to seek support from the Soviets. Both London and Washington sought to defeat the Soviets, but with different tactics.
President Truman pushed Britain to negotiate with Iran. The British were flexible on profits, but not on the matters of control. Britain was in a fury and began to strategize military action. London refused to back down, thinking that if it made compromises now other colonized nations would start similar uprisings. The United States was frustrated with Britain and tried to disassociate from it, believing that Britain was failing to recognize national aspirations and treating Iran as a colonial pawn rather than an ally.
To him, the question of who would control Iranian oil was only secondary. He was more worried that the argument between the United States and Britain over how to deal with Mossadegh might spiral out of control and split the Atlantic alliance. Britain responded to the oil nationalization law, by building up its military presence off the shores of Iran. It had given up on persuading Mossadegh and saw forceful action as its only discourse.
In meetings in November and December , the secret history says, British intelligence officials startled their American counterparts with a plan for a joint operation to oust the nettlesome prime minister. The Americans, who "had not intended to discuss this question at all," agreed to study it, the secret history says. It had attractions. Anti-Communism had risen to a fever pitch in Washington, and officials were worried that Iran might fall under the sway of the Soviet Union, a historical presence there.
In March , an unexpected development pushed the plot forward: the C. The newly inaugurated Eisenhower administration was intrigued. The coalition that elected Dr. Mossadegh was splintering, and the Iranian Communist Party, the Tudeh, had become active.
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