CHAPTER

4 - U.S. INTERESTS

IN IRAN

Before the United States logical missions.

World States

War II. the in Iran were consisted and

strategic slight.

and economic Contact

interests

of

between

the United archaeadvisory strength of

and Iran

mainly

of missionary and

activity. Millspaugh

expeditions. Isolationist

the Shuster

sentiments

and the traditional

the British

in the Middle

East kept Iran well out of U.S. in

strate-

gic considerations.

Oil concessions in the 1920s of

Iran were of some interest but these proved to

to U.S. oil companies be impractical contractors Trans-Iranian reached

and 19305,

because a

the dominant part in

role of the of

the AIOC. of with

U.S. the Iran

played

small

construction U.S. trade

Railroad. million

and the dollars

volume per year

several

in the late 19305.

Howevfar

er. U.S. commercial overshadowed izations between in

investments

in Iran were negligible.

being

by the holdings buildings. States

of the various etc.

U.S. missionary Diplomatic

organ-

equipment.

relations

the United

and Iran were evidently broken between

of such little

importance

that they were made

1936 and 1939 over derogReza Shah.1

atory statements

in the American

press about

The United the effort

States

was

initially

drawn

into Iran by its role in the Persian of U.S. Corridor troops 30,000

to supply

the Soviet

Union

through

during World arrived

War II. The first 1942,

large contingent and by early the supply

in Iran in December

1944 nearly

U.S. soldiers

were there manning

op~ration.

The United

PAGE 89

_0

StatQS

undQrtook

QxtQnsivQ

improvQmQnts

to

Iran's

transportation of the war. were also broad raisQ under were

system and Plants built. for

to the AlOe facilitiQs assembling aircraft,

during trucks, back

thQ course

and oil drums

Arthur

Millspaugh

was brought supervise

to Iran and given transportation. missions Ridley

authority taxes. Colonel brought and

to set prices, manage

civilian

the national

budget. and General

Military Clarence

Horman

Schwartzkopf

in to train and supervise army. Lend

the Gendarmerie

(a rural police to Iran items.

force) and the Iranian in March

lease aid was extended and non-military

1942. consisting

of both military value of

By December $8.5
m i Ll i on
c

1946 the total

"

lend lease aid

had reached

During major policy Middle

World War

II and

in the were

first year after to dominate

the

war. two U.S.

concerns toward

emerged

which

subsequent

Iran. ThQ first was a dQsirQ While the the

to increase

and protect in Saudi East oil in the

East oil production. that country

position

of ARAMCO

Arabia made policy

main focus Iran remained

of the Middle the largest buffer

of the United until

States,

producer between as

the region Soviet

1951 and

served as a crucial Gulf reserves.

Union

and Persian

Secondly.

Cold War Iran as an Union. linked

tensions important

mounted, pawn of in

U.S. policymakers their strategy Union

increasingly of containing in Iran was

viewed

the Soviet inextricably

Containment

the Soviet

with the protection ers also feared increase

of Persian

Gulf oil.

However. enable other

U.S. policymakthe Soviets to

that control

over Iran would and bring

their pressure

on Turkey

countries

in the

arQa undQr their domination

as well.

These relations years

concerns with

led

U.S. it

pol~cymakers crucial War II.

to

maintain support

close in the

Iran and give after

diplomatic HowQver.

immediately

World

it was

not until

1950 ~ha~ ~he Uni~ed

S~a~es

extended

large amounts

of aid to Iran.

and only in 1953 did it begin

to undertake

the kind of commitments

PAGE 90
to Iran which embody a cliency relationship.

1) OIL AND U.S. POLICY

TOWARD

IRAN

MIDDLE

EAST OIL DURING WORLD WAR II

Although 1930s

oil

had been

plentiful as ten

in the cents

United

States

in the

(selling

for as little heavy

per barrel

in 1931). By of

World War II placed 1943 serious

demands

on U.S. productive raised of about the

capacity. adequacy

questions

were

being

U.S. oil supplies period.

for the duration heard

the war and for the postwar in June 1943 that serious universal that

The U.S. Senate would appear

testimony

shortages among

by early

1944. Concern and oil

was nearly

government supplies

policymakers would

industry in the

analysts postwar war.3

domestic peacetime

not be sufficient or for the needs

era for

requirements

of another

These concerns variety

led the Roosevelt to increase

administration

to undertake

of measures

domestic

oil supplies.

In May 1941 (later and

the Office

of Petroleum

Coordinator

for National

Defense

known as the Petroleum given broad ution. after powers

Administration

for War) was established

to regulate

U.S. oil production were introduced to be

and distribin May 1942 unworkable. such as to

Gasoline a series other

and fuel oil rationing of supply were reductions taken by and tanker distribution,

proved

Numerous

actions

this body as well. construction. and efforts

the promotion coordinate domestic

of pipeline and

measures to

refining

stimulate

exploration

and production.4

PAGE 91
Despite sources postwar became The these actions, it
I

soon

became

clear

that

domestic or

of crude oil would Because of of

not be sufficient its vast reserves,

to meet wartime the Middle

needs. the

East

object

particular

interest established

by U.S. the

policymakers.

Roosevelt

adminis1:ration Corporation

government-owned sought to to had

Petroleum

Reserves control

(PRC)

in June 1943, which of crude

gain public

over foreign

sources Standard

by attempting which

purchase extensive the

the

Californi<~ Arabian in Saudi to

Oil Company, this effort

holdings attempted These

Arabia.

After and

collapsed in

PRe

build a efforts

refinery failed,

later a

pipeline

Saudi Arabia. U.S. oil Roosevelt leum

also

due to

pressures In

by the 1943

industry initiated

and

the British

government. British about on

December

talks with the focusing

the world Middle

petroEast.

situation, the

particularly

the

Although never postwar

agreements by

reach d as a they

result

of these

talks were a basis for

ratified

Congress,

helped

establish

cooperation

by the two major

oil-producing

powers.s

As part of this strategy during World War II

of

obtaining government to secure

foreign also

sources actively

of crude assisted

the U.S. attempting The

u.s.
and

oil

companies

concessions had

in northern approached conceswith

southeastern of New

Iran. Jersey

Iranian

government

Standard sion, and

in February

1943 about also began mainly

a possible

in March

1944 Sinclair working

to negotiate

Iran. The State Department, sy in Tehran, acted denied as an taking gave important

through

the U.S. embasIt and

assistance in their

to these negotiations

two companies. with Iran

intermediary an active

role to the British. to favor

The embassy

exerted compato

pressure nies over

on Iranian British

off~cials bids. It

bids by the American important

also passed

information

the U.S. companies consultants indications countering to the

from two Americans Iranian government. to engage

who were Despite

acting these

as private actions and

that Iran wanted B~iti5h and Soviet

U.S. companies

as a way of for oil

influence.

all negotiations

PAGE 92 concessions 1944.6 were broken off by the Iranian government In October

OIL IN POSTWAR

U.S. FOREIGN

POLICY

As wartime briefly a Senate

demand

fell off In

1945. concern analysts

about

oil supplies before

declined

as weIll. Oil

industry

testifying

subcommittee would

in October resume

1945 predicted growth

that u.S. petrole-

um consumption before the

the steady

rate it had followed and imports

war and

that supplies

would through to oil

be adequate

from the Middle

East unnecessary rapid conversion in general

1965. However, for home U.S.

declining and past

coal production. postwar recovery peak.

heating,

quickly

pushed price

consumption

its wartime

despite

substantial

increases.

This growth capacinew

in U.S. consumption ty and wells. by shortages Spot oil

was exacerbated of the

by insufficient needed for

tanker

steel pipe

drilling

shortages

in the winters

of 1946.

1947. and 1948 Although States shora

led to Senate

investigations until

and talk of rationing. the 1970s, the United

tages did not reappear net oil importer

became

in 1948. and has remained

so ever since.7

In addition cymakers about were

to concern

about

domestic in the late and

oil supplies. 19405 and East

U.S. poliearly 19505 in

also concerned oil

the

world

situation Tor this key

Middle

production

particular. that

One reason playa less

concern

was the growing recovery.

awareness Western in 1948 states

oil would

role in

European

Europe produced and 1949. with

than three

percent

of its oil from

needs

most of its imports Dollar shortages

coming

the United Europe and made

and the Caribbean. ing U.S. demand the Middle

in postwar

increasin

for western

hemisphere attractive

production to European

sources

East increasingly

consumers.s

PAGE 93 Of more deepened was direct interest about to U.S. policymakers of oil as the Cold War for a of

concern

the adequacy 1946,

supplies

future war. Staff

As early as

October Iran and

the U.S. Joint to

Chiefs

(JCS) considered interest." East event

its oil supplies

be "of major believed

strategic

By early and

1948 U.S. military should of

planners

that the Middle possible in the

its oilfields

be held the risk defense

as long as involved." of Middle

of war, "regardless were drawn for

Joint U.S.-British East oil, pipelines, Council including

plans

up for the

preparations

the demolition

of oil wells, Security could not

and refineries.

By November

1951 the National Union

f~lt that for

an all-out

war with the Soviet without

be fueled Bahrein,

more than six months The situation contingency

holding

Saudi

Arabia, by

and Qatar.

was expected

to be even worse up. Similar

1956, and numerous were expressed

plans

were drawn

ideas

in 1952 and 1953.9

It is evident in Iran

that, except

when

it tried in 1943 Arabia

to obtain

concessions the U.S. in

for American focused

oil companies on Saudi East

and 1944, rather

government its efforts because AIOC

primarily M1ddle

than Iran

to expand

oil production. by

This was mainly throught the The

Iranian

oil was oil

controlled

the British by

whereas

Saudi

was controlled

U.S. companies.

exclusion

of U.S. oil companies considerations. regional

from Iran did not keep Iran out of U.S. policy in the Middle East was with

U.S. strategic fundamentally British close absence tive

In nature,

and was closely U.S.

coordinated

policy. ties with

Nevertheless. Iran U.S. in the

while

policymakers and early

maintained 1950s. the

late 1940s

of tangible

interests strengthen

in Iran gave them little these ties or become

incendeeply

to substantially in Iran's

involved

domestic

politics.

PAGE 94 THE ROLE OF THE STATE

IN U.S. OIL POLICY

It is important Iran in security a desire

to emphasize was

here that while in

U.S. policy

toward the

this period of Middle to protect decisions

motivated

part by concern involved

about

East oil. this private U.S.

concern interests which

more than just Several

in the reglon.

key policy

can be cited

indicate

that U.S. policy security rather oil

was based on broad considerations than simply companies. a desire to protect

of U.S. national the interests

of American

As mentioned state-owned with oil to

above,

the

Roosevelt

administration into These and

established

company manage

(the PRe) world

and entered

an agreement efforts collapsed were only

Britain

oil supplies. oil industry, After the

vigorously after

opposed

by the

u.S.

they had

become

unnecessary. fields

war recommendations and that domestic capacity. Foreign and

were made that some domestic producers production maintain a 10-15

be impounded excess

percent

was encouraged dollar to

in order shortage.

to conserve This hurt

U.S. reserves domestic

ease the European and contributed the

producers It also of

a decline European

in domestic companies

exploration. and led

boosted excess

sales of

to periods

capacity

for U.S.

overseas under

producers.

European Plan, market. Department

refinery the the to

construction share of

was financed U.S. companies

the Marshall European the state

weakening During sought

in the imbroglio,

1946-1947 prevent

Soviet-Iranian companies a Soviet

u.S.

from obtaining concession.10

oil concessions

in Iran, but

did not oppose

These tensions industry ficed indicate

between

the

U.S. government interests were

and the frequently

U.S. oil sacrisecu-

that private for broader

in this period

considerations

of national

PAGE 95 rity. more At' least three important to national security concerns Were evidently private in be

U.S. policymakers th~ paramount

at this

time than

int~r~sts.

First.

conc~rn

of U.S. supplies

policymakers of of a oil would future

the 1940s was availabl~ Second. mark~t in for

to ensure wartim~

that sufficient or for intervened postwar

n~eds

th~ needs in

war. oil

U.S. policymakers order to promote

the international in Europe. in

recovery were

Finally. 1946 and

the interests

of U.S. oil companies to lessen tensions

sacrificed

1947 in an attempt Union.

between

Iran and the Soviet

Inasmuch subs~quent than the r~sulted different

as U.S.

policy

toward

Iran in this period concerns

and

1n the rather that a very 1n 1.

era was based interests

on security

such as these relationship

of U.S.

oil companies, States and

the

between

the United

Iran constitutes

kind of international of dependency and

relationship imperialism

than that embodied discussed in chapter

the concepts

2) THE EVOLUTION

OF THE U.S. CONTAINMENT

STRATEGY

IN IRAN

Containment U.S. policy republics postwar came to

of the Soviet Iran after

Union

became

an important

element

in

toward

the establishment

of the autonomous and after Soviet the

of Azerbaijan between

and Kurdistan the United

in late 1945 States and the

dialogue a virtual by

Union

standstill

in early

1946.

Indeed. to

the crisis withdraw its

precipitated troops

the failure in March

of the

Soviet

Union

from Iran

1946 was

something

of a test

case for

the Truman

administration Although

in using a tough approach the 1946 crisis served and

to stop Soviet as a

expansionism. model

in some ways Turkey,

for subsequent

U.S. actions countries

in Greece under

Iran was U.S.

not included

with these

the Truman

Doctrine.

PAGE 96 aid to Iran was almost negligible before 1950, and only reached

high levels after although Iranian

the overthrow and Persian and while

of Mossadeq Gulf oil was

in 1953. Consequently, of great interest to 1n

U.S. policymakers

Iran ~as these

an

important

cornerstone

the U.S. containment before

strategy, warrant

interests

were not sufficient of a cliency

1953

to

the

establishment

relationship.

U.S. POLICY

DURING

THE 1946 CRISIS

As discussed

in

chapter

3, the Soviet after

Union

began

to pressure ceased to be by and over

Iran for an oil concession an essential strong Soviet Kurdistan supply support line

the Persian

Corridor

in late 1944.

This was

accompanied

for the autonomy friction in

movements with the

in Azerbaijan United States

and by

increasing troops

the presence Although some

of U.S.

Iran without advocated

a formal

mandate. Iran to

U.S. policymakers

efforts

to free

from Soviet maintain concern velt

(and British) among the

domination wartime Soviet

at this time,II allies apparently

the desire

harmony

overshadowed

in Washington

about made

intentions attempt

in Iran. The Rooseto block Soviet of the to

administration to obtain government

no serious

efforts central

an oil concession in Azerbaijan. Union at and a to

and weaken Roosevelt,

the position in fact,

sought

accommodate the Iranian

the Soviet railroad control

Iran's

expense Gulf port

by suggesting be placed outlet

that under

Persian

international exports.12

serve as a warm-water

for Soviet

As the war in dQath

Europe

came to an end, and relations

especially began to

after

the

of RoosevQlt, The main

U.S.-Soviet

deteriorate Allies

rapidly.

issues of

contention

between

the Western

PAGE 97 and the Soviet Europe Union were the future the status of Germany of German major and Eastern r9parations, disputes were

(particularly

Poland),

question

and the incipient left unresolved were merely new reality

civil war

in Greece.

Several

at the Potsdam over.

conf9r9nce

in July 1945. and others summer and fall of 1945 a

papered of

In the late b9gan

confrontation political

to

~merge also began year

in to

U.S.-Soviet affect the The and the

relations. Truman

Domestic

pressures

administration

as the 1946

election

approached.

Republican public Soviet

party accused increasingly

it of "betrayal" favored a

and

"appeasement." attitude toward

opinion Union.13

tougher

As a result was taken 1946. tated Moscow

of these conflicting Truman

pressures, in the

a much harder first months

line of

by the

administration toward

Truman's in part Foreign

new approach by the

the Soviet reached at he

Union was precipithe December regarded as 1945 "an (who spoke In

agreem Con

Ministers'

which Secretary

empty promise." had just returned very harshly February of

In a meeting from negotiating the Soviets

of State

Byrnes Truman

these agreements). further

compromise.

1946 this tough in the

n9W a proach

was given a coh9rent and much-public;sed Kennan

analyt"long

ical framework telegram" Soviet sent

widelyby

irculated George

from Moscow in terms of

Kennan.

interpreted and 1946 in not

policy

ri id Marxist-Leninist aspirations. of this new

principles

traditional

Russian public famous

territorial expression "iron

In early March hard While line Truman U.S. came did

the

first

Churchill's publicly

curtain"

speech.

embrace

Churchill's beforehand

ideas, he and other and clearly approved

officials

had read the speech

of it.14

The continued the main focus attempts the

occupation of

Iran by Soviet administration's the summer their

troops

soon became line. to

the Truman made in

new hard

Sev9ral convince

were

and fall These

of 1945

Soviets

to withdraw

troops.

had little

PAGE 98 effect. Truman had intended that Iran be a major topic of converByrnes had

sation at the December focused on agreements

1945 Mos:cow conference. regarding to

l

Instead,

gy, and East Asia, more, Stalin

failing

the Balkan situation, atomic enerI ~ake any progress on Iran. Furthertime at the Moscow Iran past the March Treaty. Truman conference 2 deadline

suggested troops in the on

for the ~irst remai~ in

that Soviet established berated rage." before

might

1942 Tripartite

subsequently as an "outtroops

Byrnes

the Iran issue. which 1946 Iran bro~ght Council.! After

I

he described

In January

the question heated

of Soviet

the UN Security of this

debi3te it was decided pending further

that discussion negotiations

issue

would

be postponed. Union.IS

between

Iran and t~e Soviet

Tensions

escalated

rapidly

ar the March Iranian

I

2 deadline

passed

with-

out compliance told by Stalin examination March 6

by the Soviets. that Soviet

I

Prime Minister remain

Qavam was

tr06ps

would

in Iran, "pending in Moscow were on

of the

situation."
I

U.S. notes

delivered

and 9 protesting movements

the continued in the Balkans led Truman 8

occupation and

ignored. in 'late on

Sovi et troop February

in Azerbai jan that

and early

March

to believe

an attack

Turkey was imminent. ship Missouri Turkish 1944.16 would

On March Si3il to

it was announced to return

that the battlethe body of the

Istanbul
I

Ambassador

to the United

States.

who had died

in November

The March debate

issue was 18. Soviet

again

brought

before

the

Security

Council

on

Ambassador

Gromyko

immediately Byrnes

attempted

to end defended

on the issue. Secretary stormed

of State

forcefully

Iran, and Gromyko to Qavam withdraw, in Tehran

out of the meeting. 24 declaring

I I

A note was delivered intention to

on March

the Soviets'

but implicitly

linkin~

withdrawal

to an oil concession. States, In and Byrnes April

This was found to be unacceptable refused reports to end the Security

by the United Council debate. troops

early

began to circuli3te that Soviet

hi3d begun

to evacu-

PAGE 99 ate. It soon April 4 allow became clear that the Soviets were further between backing down. On month to Soviet

Byrnes agreed to postpone negotiations

debate for a Iran and the

for bilateral

Union. The evacuation although

of Soviet troops was completed on the Security

in early May,

the issue remained

Council agenda.17

Despite the soon

complete

evacuation Soviet

of Soviet non-military

troops in personnel

May, it still

became apparent in Azerbaijan. to bring

that

remained of 1946 Tehran

Attempts

by Qavam in the republics Qavam

summer and fall control to make of a

the autonomous

under the was forced

were unsuccessful. concessions negotiations northern to for

Instead,

number of including

the Soviets Soviet

and their

Iranian allies, and airline in the

control

of oil

rights in the cabinet.

provinces

and Tudeh

representation

In July

a Tudeh-led the

strike by oil workers ,southern Qashqai

turned into a

bloody riot. In September laid siege Tehran.

tribe revolted and influence in

to Shiraz over growing

Tudeh and Soviet

In early October

the Iranian ambassador arrived

in Washington

told where

the State Department it must choose more balanced in September

that Iran "had exclusive

at a crossroads toward

between policy."

orientation

Russia and a

A reques~ for

$250 million

in aid was made in Octo-

to the U.S. Embass~

IS

in Tehran, and repeated

ber and November.

These alarming thorough

events

led the state Department

to undertake

review of U.s. policy I~oward views of the

Iran in September strategic the

and Octoin the

ber of 1946. The Iran were

CS on U.S. despite

interests of

solicited. no fundamental

However,

gravity

situation,

chang s in U.S. policy emerged

l

from this

process. Although the JCS considered Iran

strategic interest," it recomm~nded only that a S10

to be an area "of major

aid. The to hope" b~~n

only token military Iran wbe encouraged loan for

State Department for U.S. aid.

suggested In fact,

millio~

Iran had

contemplated

as early as June 1946 and had still not been approved

PAGE 100 1n late November. While an agreement in principle covering signed this until hedg-

loan was reached

in December

1946 it was not formally in May 1948. Department After in

June 1947 and was renegotiated ing on the question,

initially early

the State

October

cautiously

offered

U.S. support Allen,

for an appeal

by Iran to the Secuin Tehran, answered later onlY 30

rity Council. lamented that

George Qavam's

the U.S. ambassador for U.S.

appeals

help were

with advice the

to depend

on the United continued that

Nations.

As late as October Qavam strengthen not to the

State Depari:ment elections,

to pressure they would

hold Tudeh

Majles

fearing

party.19

These elections heavy Soviet information secret

were announced On

by the 10

shah on October Ambassador Allen

5, after received

pressure. that

October cabinet the

the Tudeh with

members He

had been brought Qavam

engaged this to

in the the

negotiations of Qavam

Soviets.

attention

and the shah, who forced This enraged the Soviets and Tudeh

to dismiss

Tudeh ministers. Qavam's liatory policy

and brought pressures

an end to with conCl-

of balancing and minor using

Soviet

gestures

concessions.

Qavam

then began

to seri-

ously contemplate He expressed assurances pretext marched Tabriz

force

to liquidate

the autonomy

movements.

his intentions of U.S. support

to Allen in

in late Hovember

and received Under the army in

the Security for

Council.

of securing on Tabriz

Azerbaijan in early

the elections

the Iranian uprisings

December. government

Spontaneous while

overthrew outside

the Pishevari

the army was still

100 miles

of the city.2o

Although events their

U.S.

policymakers were

were

deeply

concerned of

about

these

actions

limited assurances

to promises

token military Council support.

and economic and informal initiative.21 flrst half

aid, guarded

of Security

representations In the dispute

made by Ambassador over Soviet States had troops

Allen

on his own in the

in Iran Iran

of 1946

the United

given

important

PAGE 101 support further. War II economic policy in the Security Council but had not committed during itself World and This

The two U.S. military were maintained aid were not

missions

established but

throughout provided

this period, on even

military scale. in 1947.

a moderate

of limited

U.S. assistance

to Iran continued

THE TRUMAN

DOCTRINE

AND ITS AFTERMATH

In

response

to

appeals

from Britain on

in

February program

1947, of

the

Truman administration Greece and Turkey.

embarked

a maSSlve became

aid for

This program, as a

which

known as the Truman policy toward secuhad to

Doctrine,

established

cornerstone

of U.S.

underdeveloped rity goals.22 served as Soviet

countries

the use of above,

economic the

aid to achieve in Iran

As discussed of

1946 crlS1S active

something

a precedent by the by the

for the

approach

expansionism

begun

Truman Truman

administration Doctrine.

in early and

1946 and later epitomized Under Secretary the formulation countries United sional Truman in the of state

Both Truman a key

Dean Acheson Doctrine) fall

(who played feared

role in

of the Truman Middle

that Iran and other hands if the

East would Greece to the

into Soviet

States

failed

to aid

and Turkey. contrary,

Despite

Congresthat the The

testimony Doctrine

by Acheson was meant

it is clear

to apply

to other for a

countries of

as well.

Marshall countries

Plan and

aid programs and

number

underdeveloped (see table for

were formulated although

implemented

concurrently a prime

2). Nevertheless.

Iran was

clearly

candidate

such an aid program, in 1947.ZJ

U.s. assistance

to it continued

to be limited

-table

2 about

here-

Table 2 - Major Recipients of U.S. Military and Economic Aid, 1946-1952 (millions of U.S. dollars) country Great Britain France Wes t Germany Italy Greece Turkey Iran China (Taivlan) Japan South Korea Philippines 1946 79.9 302.6 195.8 423.3 195.2 6.1 3.3 128.7 106.7 5.6 31.4 1947 3757.0 42.8 298.3 416.7 180.9 2.6 22.5 464.1 389.3
75.5

1948

1949

1950 1008.9 1162.3 733.4 445.7 256.6 182.2 11.8 51.1 365.3 102.6 154.8

1951 551.4 1726.9 652.8 665.9 317.3 219.8 27.8 193.8 290.3 93.9 158.8

1952 634.5 1698.5 310.3

567.l

o
363.7 850.3 331.0 332.8 72.1

1613. 7 1313.3 1257.6 684.1 362.0 117.3

o
50.9 483.7 100.1 136.4

o
344.6
501. 5

161. 5

141.8 237.7

351.2 259.0 44.1 275.8 63.6 159.8 161.2

source: U.S. Department of State, Agency for International Development, unpublished worksheets for U.S. Overseas Loans and Grants and Assistance from International Organizations, July 1, 1945-September 30, 1980 (Washington, 1981).

PAGE 102 Two weeks after Truman's March 12 speech to Congress calling

for aid to Greece

and Turkey of Iran because

the shah complained was HsevereH it involved

to Ambassador with

Allen that U.S. treatment U.S. treatment rather than a of Turkey grant.

in comparison

a loan with levels

interest of U.S.

Allen

replied were

that the high justified by

aid giVen Soviet about

to Greece

and Turkey

the immediate 14 discussion ambassa-

threat

faced by those military

countries. credits

In an April

the proposed

for Iran the Iranian

dor in Washington ble relations by Iranian proposed to Iran. firmed, with

was told that the Soviet

Iran "should Union." Further months

keep the best possirequests were made on the be made

officials

in the following

that payments million

loan be waived While these U.S.

and that a grant for Iranian

of $100

support were

independence viewed

was reafSoviet mili-

requests

denied.

The JCS

tary action

toward

Iran as unlikely by

at the time.

Further

U.S. aid

would be seen as provocative ciably enhance Iran's

the Soviets,

and would

not appre-

s8curity.24

The pattern the United The United independence decision-makers. taryaid assistance amb~ssador frequent that as several formal well.

of

relations and Iran continued remained However,

established continued to express in close from a to

in 1946 hold

and 1947 between in 1948 support with and 1949. for Iran's Iranian mili-

States States and

strong

contact SID milli6n military

aside

"token"

grant made for in

in 1949,

substantial

and economic the Iranian made and

Iran was Washington,

not forthcoming. and the various

The shah,

prime ministers be expanded Iran

requests

that the existing million

aid agreements be granted. United States

much as $500 other attempts and informal

in aid the

also made in as

to engage

and Britain rejected raised

security

agreements.

These were were

The issues of aid and a security his first visit

agreement

again 1949.

by the shah during Although

to Washington the shah's

in November inability deeply

this trip ended amicably, U.S. commitm~nt to

to obtain

a stronger

Iran left him

disappointed

PAGE 103
and fueled growing anti-American sentiments in Iran.~s

U.S. policymakers requests for

gave

three main

reasons

in

rebuffing

Iran's

a closer

relationship down during were

in this period. the crises of

First, after

the Soviet apparent

Union

backed

1946 it became

that Soviet of

leaders

unwilling

to risk the political U.S. policymakers ability to resist be

consequences

an outright reason

invasion to that

of Iran. Iran's

thus had no compelling a Soviet invasion,

enhance

and feared Second,

increased

military

aid would

seen as provocative. was the through to Iran promoting greatest the Tudeh in 1947 domestic

it was felt

that Soviet in

subversion and

threat party.

to Iran,

principally of to

Azerbaijan

The low levels intended about

military

aid extended threat also by led

and 1949 were order. Concern

meet this subversion

Soviet

U.S. policymakers reform, including to

to advocate a crackdown expand Iran's

economic on

development

and political to the it

corruption

and opposition powers. stability for of aid

shah's attempts was argued that

his constitutional economic it

Finally, and

relative

strong the been

balance

of payments

position

qualified sort

loans from that had

International extended

Bank rather

than the

to Greece

and Turkey.26

Privately,

several

other

reasons

were expressed

for restricting and the to

U.S. aid to Iran. For one thing, American warrant public high would not regard of

it was felt that Congress Iran as sufficiently U.S. policymakers be used by the

important

levels

U.S. aid. that to

also feared shah or by rather than

(with great prescience) top military leaders

aid might

establish

a dictatorship

promote

development

and political

reform.27

However, States

perhaps a

the

most

important with

reason why Iran in

the

United is as

avoided

closer

relationship East

this period regarded had

that Iran primarily

(and the Middle a British

generally)

was still Britain

military

responsibility.

as much

PAGE 104 as 500 million pounds invested in Iran, and more in Iraq and

Kuwait.

By contrast,

U.S.

investment

in the region "vital" a

was still quite interests U.S.

small. The Middle in the sense policymakers that

East was considered its loss would

to British "mortal

present

danger."

also considered loosely.

the Middle

East vital,

but used this

term much more 1947 list Britain

The JCS did

not include countries

Iran on its April targeted for aid.

of strategically-important troops

had some 80,000 with 8 ships

stationed

in the Middle in the

East, and a Gulf.

naval base

on Bahrein

Island

Persian

U.S. military while British force units invasion. East to be

plans did not plans called

call for the for the

use of force of army

in Iran, and air

introduction

into Iraq

and southern States

Iran in the event considered In

of a Soviet the Middle East

Both the United secondary gave

and Britain

in importance the highest

to Europe. to

the Middle

both countries ring" of

priority Egypt

defending than

the "inner the "outer

countries

centered

around

rather

ring" including

most of Iran and Turkey.~s

THE REORIENTATION

OF U.S. POLICY

TOWARD

IRAN:

1950

By early

1950, several policy

major and

changes

had begun domestic

to take place and

in

both U.S. foreign affairs which

in Iran's

international reorient

soon led U.S. policymakers toward Iran.

to significantly

their policy of overall the Soviet the

The first was a fundamental This reevaluation

reevaluation by of

U.S. foreign atomic

policy.

was prompted

test of September of China in

1949 and the establishment the following of month.

People's

Republic with

These attacks

events,

together

the first

rumblings

McCarthyite

on the State Department, U.S. global strategy.

led to the emergence This new strategy NSC-6B,

of a more aggressive was codified in in the

National

Security

Council

paper

written

late February

PAGE 105 and March Cold War," large of 1950. beginning in NSC-68 with a U.S. called for a "renewed initiative in the and

substantial

U.~. military and

buildup

increases

overseas

military

economic

aid. The

full realization

of NSC-68 States

was to come sent troops

in the summer to defend

and fall of Korea and

1950, when the United then

South

invaded North Korea.29

U.S.

policy

toward about

Iran at

this

time was stability.

also affected As discussed by

by in

increasing chapter 1950. 3 This

concern Iran had

its domestic into by

entered

a serious

depression of

early

was caused

mainly

the bad harvest consumption

1949, which

was followed higher

by a decline

in private

and consequently Furthermore, negoti-

unemployment

and numerous

business to the

failures.

broad public ated by and

opposition

had emerged with

oil agreement These led

the Iranian

government

the AIOC. Tudeh party

two factors to fears visiting of Iran and

the growing unrest. March

strength A

of the

increasing in late

top State the

Department

official as April. a

described similar

situation in early

"dangerous

explosive." Chief of

After a Staff warned

visit

the U.S. Army "second China." leader-

that Iran might Department

become

Policymakers

in the State

criticised

the shah's U.S.

ship as ineffective, sure on London the shah Foreign

and called to install

for increased capable in to

aid and presAt the were

a more

government.

Ministers'

Conference concessions

May 1950 the British Iran in order public.30

pressured

to make greater

to resolve

the oil dispute

and thus placate

the Iranian

These changes did not change toward Iran 1n

in the international the basic principles

situation which had

and

in Iran itself U.S. policy the A policy Soviet

guided changed

1948
which

and

1949.

Rather,

they

prescriptions attack assumed on Iran

followed

from these

principles. and

was still considered

unlikely,

Iran was still economic fears of

to be a British and renewed

responsibility.

The deteriorating

situation

Tudeh activity

had led to increased

PAGE 106 Soviet-inspired was seen as subver?ion. the best means As in the past. of combatting economic subversion. development However.

Iran's deepening 9conomic deemed

depression

now required

foreign

aid to stimulate aid was the

dQv9lopmQnt.

FurthQrmor9. the

incr9a59d unrest

military

necessary Whi19

to control

growing

and strengthen to press

government. for reforms. precidenc9 although late

U.S. policymakers of

continued

the shah took

the immediacy

the economic an incipient was

situation

clearly

OV9r concerns British

about

dictatorship. still of

Finally, as to

military the

predominance continuing

recognized the British

as May th9

1952,31

failure

r9solve led U.S. Iran.

oil disput9

was

clearly

frustrating strengthening

and undoubt9dly their role in

policymakers

to contemplate

This stronger ough

U.S. role

in Iran of

emerged th9

in 1950, after there

a thorU.S.

State Department for dealing Agreement per year

review

crisis In

and of Mutual

options

with was

this crisis. signed which

Maya for 1956.

Defense of a

Assistance $23 million $25 million

provided

an average In October

in military

aid through

Export-Import was begun.

Bank loan was granted The United States

and a modest supported

Point Iran's

4 aid program

also

request at this time for a

$10 million

International which began

Bank 10an.32 in May 1951 role in with the a client

By the eve of the Anglo-Iranian the United States had positioned

oil crisis itself

to take an active in negotiations it established

Iran's affairs. British

first as an

intermediary power when

and later

as a patron

state under Mohammad

Reza Pahlevi.

--------------

----

PAGE 107 FOOTNOTES TO CHAPTER 4

1) John A. Denovo, American Interests and PoliciQS in thQ MiddlQ East, 1900-1939 (MinnQupolis: UnivQrsity of Minnesota Press, 196 3), ch. 9. 2)

Middle

T.H. Vail Motter, United States Armv in World War II, The East Theater, The Persian Corridor and Aid to Russia (Washington: Department of the Army, 1952), especially chs. 9, 20, 21; U.S. Department of Commerce, Office of Business Economics, Foreion Aid bv the United States Government, 1940-1951 (Washington: U.S. Government Printing Office, 1952), p. 88.

3) Michael B. Stoff, Oil, War, and American Security (New Haven: Yale University Press, 1980), p. 8; U.S. Congress, Senate, Subcommittee of the Committee on Appropriations, Supplemental HearingL Military Establishment Appropriation Bill for 1944, Oil Supplv for ~1ilitarv Purposes, 78th Congress, 1st Session, 1944, p , 79 and elsewhere. For other contemporary statements of the oil situation see Harold L. Ickes, FightinW Oil (New York: Knopf, 1943); Herbert Feis, Petroleum and American Foreign Policy (Stanford: Food Research Institute, Stanford University, 1944).

4) John W.

Frey and H. Chandler Ide, A Historv of the Petroleum Administration for War, 1941-1945 (Washington: U.S. Government Printing Office, 1946), pp . 118-126, chs. 11-12. 5) Stoff, Oil, War, and National Securi~~ pp. 70-S8, chs. 4-7; Shoshana Klebanoff, Middle East Oil and U.S. Foreiqn Policy (New York: Praeger, 1974), ch. 2; Benjamin Shwadran, The Middle East, Oil, and the Great Powers (New York: Wiley, 1973), chs. 16, 17. On the PRC see U.S. Congress, Senate, Committae on Foreign Relations, Subcommittee on Multinational Corporations, A Documentarv History of the Petroleum Reserves Corporation, 1943-1944, 93rd Congress, 2nd Session, 1975. Hamilton Lytle, "American-Iranian Relations 1941-1947 and the Redefinition of National Security," unpublished Ph.D. dissertation, Yale, 1973, ch. 4. On Iran's reasons for breaking off the negotiations see section 3.3.1, above. 7) U.S. Congress, Senate, Special Subcommittee Investigating Petroleum Resources, Hearings, Petroleum Requirement5-Po~twarL 79th Congress, 1st Session, October 3-4, 1945, pp. 7-12, 65-74; U.S. Congress, Senate, Subcommittee of the Committee on Interstate and Foreign Commerce, Hearinq, Oil and Coal Shortaqe, 80th Congress, 1st Session, Dec. 12, 1947, pp. 9-13, 30-33, 64-68; U.S. Congress, Senate, Subcommittee of the Committee on Interstate and Fo re i gn Commerce, Heari n9, Oi 1 Shorta~ BOth Congress, 2nd Session, JunQ 29, 1948, pp. 14-22; U.S. Congress, House, Special Subcommittee on Petroleum, Committee on Armed Services, Report of InvBstiqation of Petroleum in Relation to National Defens~ 80th Congress, 2nd Session, April 1948. p. 6059; U.S. C6ngress, Senate, Subcommittee of the Committee on Appropriations, Interior Department Appropriations for 1955, 83rd Congress, 2nd Session, 1954, p. 77. 8) National Security Council, National Security Problems Concerninq Free World Petroleum Demands and Potential Supplies, HSC 138, December 8, 1952. p. 6 and elsewhere; Klebanoff, Middle East Oil, pp. 72-76; Halford L. Hoskins, Middle East Oil in United States Foreiqn Policv (Washington: U.S. Library of Congress, Legislative Reference Service, 1950), pp. 37-38, ch. 3.
6) Mark

PAGE 108 9) James F. Schnabel, The History of the Joint Chiefs of Staff, The Joint Chiefs of Staff and National Policy, Vol. 1, 1945-1947 (Historical Division, Joint Secretariat. Joint Chiefs of Staff. February 1979). pp. 120-121; U.S. Congress. Report of Investi9ation of Petroleum. p. 6064; Joint Chiefs of Staff. Review of Policy Reqardina Persia, JCS 1714/12, 18 October 1950; National Security Council, A National Petroleum Program, NSC 97/1, November 27, 1951. and ibid., NSC 97/3, May 20. 1953; Joint Chiefs of Staff, Preparations for Demolition of Oil Facilities in the Middle East, JCS 1833, January 30. 1948 (see also subsequent revisions of thi s memo). 10) Hoskins, Middle East Oil, pp. 43-56, 111i The President's Materials Policy Commission (Paley Commission), Resources for Freedom, Vol. III, The Outlook for Enerav Sources (Washington: U.S. Government Printing Office, June 1952). p. 10; U.S. Congress, House, Subcommittee on Oil Imports. Select Committee on Small Business, Report, Effects of Foreign Oil Imports on Independent Domestic Producer2L 81st Congress, 2nd Session, June 27, 1950, p. 145. On U.S. willingness to allow a Soviet oil concession in Iran and efforts to discourage U.S. companies from seeking concessions see FRUS, 1946, VII, pp. 35-36, 554; FRUS, 1947, V, Pp. 891, 893, 904, 968-969. A similar argument is made by Stephen D. Krasner concerning the PRe, the agreement with Britain. and the consortium established in Iran in 1954. See DefendinQ the National Interest (Princeton: Princeton University Press, 1978), pp. 119-128, 188-213 .
11) See, by John

for example, an influential memo written in January 1943 Jernegan, the Iran desk officer, in FRUS, 1943, IV, pp ,

330-336. 12) Richard Anthony Pfau. "The United States and Iran, 1941-1947: Origins of Partnership," unpublished Ph.D. dissertation, University of Virginia, 1975, chs. 6-7; George Lenczowski, Russia and the West in Tran, 1918-1948 (Ithaca: Cornell University Press, 1949), pp. 279-283; FRUS, 1944, V, p. 483. The State Department was horrified at Roosevelt's plan, and successfully opposed it. See FRUS, 1945, VIII, pp. 523-526. 13) Herbert Feis, From Trust to Terror (New York: Norton. 1970). pp. 15-62; John Lewis Gaddis, The United States and the OriGins oT the Cold War, 1941-1947 (New York: Columbia University Press, 1972), chs. 't, 5, 7, 9, especially pp. 290-296; Gabriel A. Almond, The American People and Foreign Policy (New York: Praeger, 1960), p p , 94-98. 14) Harry S. Truman, Year of Decisions (New York: Doubleday, 1955), pp. 549-552; Daniel Yergin. Shattered Peace (Boston: Houghton Mifflin, 1977), pp. 174-178. 15) Feis, From Trust to Terror, pp. 64-66; Bruce Robellet Kuniholm, The Orioins of the Cold War in the Near East (Princeton: Princeton University Press, 1980), pp. 271-308; Ja~es F. Byrnes, .i&.eakinCl Frankly (Nel.J York: Harper, 1947), pp , 121-122; Truman, Yaar of Decisions, pp. 549-551. 16) Kuniholm, Origins of the Cold War, pp. 313-326; Robert Rossow, Jr., "The Battle of Azerbaijan, 1946," 11idple East Journal, Vol. 10, Ho. 1, Winter 1956, pp. 20-23; FRUS, 1946, VII, pp. 340-342, 348; Truman, Year of Decisions, p. 552. 17) Kuniholm, Orioins of the Cold War, pp. 326-342; FRUS, 1946, VII. pp. 448-449. Truman states that Soviet withdrawal followed a strongly-worded message from Byrnes on March 24. This is clearly inconsistent with the evidence in cRUS, 1946, VII, and in Kuniholm and other secondary sources. See Harry S. Truman, Years of Trial and Hope (New York: Doubleday, 1956), p. 95.

PAGE 109 18) FRUS, 1946, VII, pp. 494-495, 510-511, 519, 523-526, 533-534, 535-540, 544-548; Richard Pfau, nContainment in Iran, 1946: The Shift to an Active Policy," Diplomatic History I, Fall 1977, pp. 363-364. 19) FRUS, 1946, VII, pp. 9, 515-516, 524-532, 540, 542, 547; Department of State, Bulletin, July 6, 1947, p. 47; FRUS, 1948, V, p. 144. 20) Kuniholm, Oriqins of the Cold War, pp. 383-395; George V. Allen, "Mission to Iran," unpublished manuscript, George V. Allen pBp~rs. Manuscript Dgpartm~nt, Duk~ University, Durham, N.C., PP. 115-125; FRUS, 1946, VII, pp. 536, 547; Pfau, "Containment in Iran,n pp. 366-372. 21) Pfau inexplicably concludes that this period marked the beginning of a more active U.S. policy toward Iran (ibid., pp. 371-372). His ane.lysis relies heavily on the personal representations made by Allen, and largely ignores State Department resistance to a firm commitment. For evidence that Allen and the State Department were not ah.JBYS incomplete agreement, see FRUS t 1946, VII, pp. 513-514, 540-543; Allen, ilMission to Lran s." p , 139. 22) On the importance of the Truman Doctrine for subsequent U.S. aid policy, see Robert A. Packenham, liberal America and the Third World (Princeton: Princeton University Press, 1973), ch. 1. 23) Joseph M. Jones, The Fifteen Weeks (New York: Viking, 1955), pp. 58, 239-256; Dean Acheson, Present at the Creation (New York: Norton, 1969), p. 219; Truman, Years of Trial and Hope, p. 101; U.s. Congress, Senate, Hearinqs, Assistance to Gre~ce and Turkev, 80th Congress, 1st Session, March 24-31, 1947, pp. 7, 17, 19, 27-30 and elsewhere; U.S. Congress, House of Representatives, Hearinqs, Assistance to Greece and Turkev, BOth Congress, 1st Session, 1'1arch20-l\pril 9, 1947, pp. 346-347; FRUS, 1947, V, pp. 45-47, 58. Truman's original speech to Congress announcing the Truman Doctrine clearly implied a need for assistance to countries other than Greece and Turkey. See U.S. Senate, Historical Series, leqislative Origins of the Truman Doctrine, January 12, 1973, p. x.

24) FRUS, 1947, V, pp. 901-902,

905, 907, 914-918,

924-927.

25) Kenneth W. Condit, The Historv of the Joint Chiefs of Staff, The Joint Chiefs of Staff and National Policy, Vol. II, 1947-1949 (Historical Dlvision, Joint Secretariat, Joint Chiefs of Staff, February 1979), pp. 80-81. On Iranian requests for increased aid and for a closer security relationship with the United States and Britain see FRUS, 1948, V, pp. 170-171, 175-177, 182-184; FRUS, 1949, VI. pp. 528-529, 540-542. On the Shah's 1949 trip see ibid., pp. 572-582; FRUS, 1950, V, p. 511. 26) FRUS, 1947, V, pp. 924-927; FRUS, 1948, V, pp. 88-90, 118; FRUS, 1949, VI, p. 475; FRUS, 1950, V, pp. 451-457, 504; State-War-Navy Coordinating Committee (SWNCC), Special Ad Hoc Committee, Appreciation of the Situation Regarding U.S. Aid to Iran, SWN-5231, April 7, 1947, pp. 9-10. 27) FRUS, 1947, V, p. 926; FRUS, 1949, VI, pp. 4-6.

28) U.S. Department of State, Office of Intelligence and Research, The British Position in the Middle East, OIR No. 5980, October 2, 1952, pp. 5-8, 10-14; U.S. Joint Chiefs of Staff, Documents Resultinq From Conversations with the British in Regard to the Eastern Mediterranean and the Middle East, JCS 1819, November 25, 1947, p. 4; FRUS, 1950, V, pp. 190, 231-238; U.S. Joint Chiefs of Staff, "United states Assistance to Other Countries from the Standpoint of National Security," JCS 1769/1, April 29, 1947,

PAGE 110 reprinted in Thomas H. Etzold and John Lewis Gaddis (eds), Containment: Documents on American Policy and Strategy, 1945-1950 (New York: Columbia University Press, 1978), p . 79; FRlJS, 1946, VII, pp. 507-509; National Security Council, The Position of the United States With Respect to Iran, NSC 54, July 21, 1949, pp. 3-4; JCS, Review of Policy Reqarding Persia, pp. 84-85; Walter S. Poole, The History of the Joint Chiefs of Staff, The Joint Chiefs of Staff and National Policy, Vol. IV, 1950-1952 (Historical Division, Joint Secretariat, Joint Chiefs of Staff, December 1979), pp. 368-372.

29) For

thG

tGxt

of NSC-68

SGG

Et20ld and

Gaddis. ContainmGnt:

Documents on American Policy, pp. 385-442 (quota on p. 434). On the Origins of relevance of NSC-68 see Paul Y. Hammond, "NSC-68! Prologue to Rearmament," in Warner R. Schilling, Paul Y. Hammond, and Glen H. Snyder (eds), Strateqv, Politics, and Defense Budqets (New York: Columbia University Press, 1962), pp. 267 578; John Lewis Gaddis, ~Was the Truman Doctrine a Real Turning Point?" Foreian Affairs, Vol. 52, No.3, January 1974, pp. 386-402; Poole, History of the JCS, 1950-1952, pp. 1-19. 30) FRUS, 1950, V, pp. 492, 510, 517-518, 523; Sepehr Communist f'10vemE!nt in Iran (Berkeley: University of Press, 1966), ch. 5; FRUS, 1950, III, p. 487. 31) Poole, History of the JCS, 1950-1952, pp. 371-372. Zabih, The California

32) Department of State, Bulletin, Vol. 22, No. 570, June 5, 1950, p . 922; FRLJS, 1950, V, pp. 509-529, 551, 604; ld i Lk i ern E. lJarne, Mission for Peace: Point 4 in Iran (Indianopolis: Babbs-Merrill. 1956), p. 18. The Export-Import Bank loan was apparently rejected by Iran (see table 3, chapter 5, below).