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In 1974, the Shah of Iran threw a 25th Centennial party of the Iranian Monarchy – known as the Peacock Throne. That’s not 250 years, understand, but 2,500. Dynasties had come and gone through its long history, but the monarchy had remained an unbroken thread. The country is surrounded by mountains, making it very hard to invade. Yet five years later, it was all over and the entire world saw it coming. Still, it wasn’t Ayatollah Ruhollah Khomeini’s coup d’état that soured the Iranians against the United States. That came a generation earlier, and they still talk about it.

Iran had spent the last couple centuries bullied and dominated by the Ottomans, but weren’t part of the empire. In the 19th Century, as the Turks and gave way to the heady days of the Great Game Persia had found itself wedged uncomfortably between expansionist Russia and British India. Moscow harbored dreams of annexing the area for the imperial glory of Mother Russia. The Brits were entertaining an entirely different approach: They didn’t want to rule it, they just wanted to pick the place clean.

The shahs well knew that the only thing keeping them on the Peacock Throne was tradition, so it was best to be very traditionally minded. And traditionally the court and its hangers-on wanted to go play on the Rivera and use the treasury as their own personal piggy bank. The trouble was that in those pre-oil days, there was only so much you could squeeze out of the backwater the country had become, so to keep up with the other royals, the shahs needed to modernize the country. They just didn’t know how to go about it, or more to the point, pay for it. So the shah outsourced the entire operation, giving over most of the government to Britain and Russia to do all the heavy lifting of modernization. The Anglo-Persian Oil Company (later Anglo-Iranian, AIOC) took control of Iran’s oil industry while paying the Shah a royalty of a meager 16% of profits.

The bazaaris – the merchant class – thought this approach was as terrible as it sounded. They wanted to modernize into a liberal democracy that let common sense and sound laws take their course, not give the commercial and vital interests of the country over to foreigners. So the bazaaris needed to curb the power of the shah before he gave the shop away to the Europeans. The mullahs, on the other hand, needed to curb the powers of the shah, if for completely opposed reasons. They wanted to stop the shah from modernizing. So, under the doctrine of “the enemy of my enemy is my friend” the mullahs and the bazaari’s established an uneasy alliance.

Outside Help

It worked, in 1909, the corrupt shah was overthrown in a constitutionalist revolution and replaced with his 12-year-old son who the reformers could push around. The first thing they needed to do is pay off the massive debts incurred by the monarchy which put them, ironically, in need of foreign help. It is often overlooked how often a coup d’état will trigger a margin call from your banker. Unable to stomach going to the British or the Russians, the new government opted for the Swedes and that new anti-imperial upstart, the United States. Chagrined, Russia invaded Persia in 1911. The British quietly put their blessing on the adventure while buying up 51% of Anglo-Iranian shares, effectively nationalizing Persia’s oil industry for Britain. The shah managed to reestablished control over the country, but was overthrown in 1921 by a warlord called Raza Pahlavi, who named himself shah in 1925.

Reza Shah launched an ambitious reforms: Like changing the name of the country to Iran and making it compulsory for men to wear a silly hat. It was broad brimmed European style chapeau called a Pahlavi hat that made it impossible for a good Muslim to say his prayers, as he couldn’t touch his head to the prayer mat. The outcry from the clergy was throaty enough to prompt the new shah to make a special trip to the holy city of Qom to beat the tar out of a local ayatollah in front of a Shi’a shrine. He then had the ayatollah dragged away by his beard to show everyone who was boss. His pious, traditional-minded subjects did not find this spectacle particularly endearing.

Getting down to business, Reza Shah did attempt to negotiate Iranian royalties on the AIOC from 16% up to a whopping 25% by threatening that if Brits didn’t grant the rise, he’d demand 50%. Somehow the Brits – and you almost have to admire them for it – talked the Reza Shah down to 12.5%, along with some other goodies they’d pull out the books that the Iranian government wasn’t allowed to see.

It should come as no surprise that Reza Shah was forced to abdicate in the chaos following the Anglo-Soviet invasion during World War II – his son Mohammed became the last Shah of Iran. It wasn’t much of an invasion, the Allies needed to establish a “Persian Corridor” to supply the Soviet held eastern front with Iranian oil and American supplies. The Iranian experience with Americans during World War II, however, was typical but not all that damning. Sure, the Iranians thought the American’s were big and loud and completely lacking in style – but so did everyone else. On the other hand, here was a Western power that seemed openly hostile to the idea of empire and contented itself not with sending armies all over hell’s half acre (the war not withstanding), but missionaries armed with textbooks, plumbing fixtures and shoes for the kids. To the pious rural Muslim, the missionaries were a little tedious with all that Our Lord and Savior business, but that clean water sure was refreshing, and it didn’t kill you anymore either.

The Americans baffled the Iranians even further when, with the war over and won, they simply… left. The Soviets established an army of occupation in the northern Iran and, being Russian, claimed that they weren’t actually there and that wasn’t at all what they were doing anyway. The British, still in charge of the AIOC, stayed around as well. Not with an army, but with a brigade of engineers and accountants. And thus the new world order dawned.

Then, in December of 1950, much to the horror of the Brits, the American-Arabian Oil Company negotiated a 50/50 profit spilt with Saudi Arabia.

Iran’s Last Free Election

Enter Mohammad Mossadegh, a popular nationalist politician. The locals found him charming and charismatic, the West thought he was a flighty hypochondriac. He’d founded the National Front to rally for the nationalization of the AIOC. And it wasn’t just the money, said Mossadegh, AIOC hired thousands of Iranians, but not in the good jobs. The housing for the locals was awful and all the decent water-fountains read “Not for Iranians.” When news of the American-Arabian deal reached Tehran, Mossadegh pushed the issue past the tipping point. In April of 1951 the Majlis (Iranian parliament) overwhelmingly voted for nationalization. The legislative victory was so total that the shah reluctantly put his name to the order to maintain the appearance of actually running the place.

It was Mossadegh’s crowning moment – almost literally. The next month there was a watershed event in 2,500 years of Iranian history: A fair and legal election. Mohammad Mossadegh was elected prime minister. The United States actually had, despite itself, made Iran safe for democracy. The British were furious. Their immediate reaction was to mobilize an invasion of some 70,000 troops to secure the AIOC properties and Iran’s southern oil fields. Mossadegh may have been a hypochondriac, but he was a wily one. He thought that the British would default to their usual playbook and mount an invasion, thus forcing the hand of the United States, whose main goal was Soviet containment rather than propping up Britain’s informal empire. He was mostly right. For the Truman administration, the timing was terrible. The administration believed that a British action would provoke a Soviet (re)invasion from the north to “liberate” the country in the name of international communism. After that there would be no getting the Russians out of the place. If that weren’t bad enough, Truman needed Britain’s support in Korea, so he talked the British off the ledge by offering to negotiate with Mossadegh himself.

The US mediation resulted in something along the lines of “For Pete’s sake, it’s their oil, just give them half.” Historical accounts differ widely on just who rejected the offer. From the British point of view, it didn’t matter how lopsided the contract was, it was a contract. And Mossadegh, having pulled of a fait accompli with nationalization saw no reason to go back to a 50/50 spilt.

A great political victory for Mossadegh, but a grim practical reality loomed. Extracting and refining oil isn’t like weeding the garden. The British boycotted Iranian oil – not only did they refuse to buy it, but they refused to extract or refine it. The Iranians now owed their oil, but didn’t know how to get the stuff out of the ground or refine it. They certainly couldn’t get it to market, which was problematic as oil revenue made up two-thirds of the country’s foreign exchange. Still, Mossadegh refused to budge and his defiance was like nothing the people had ever seen before. It was intoxicating. His support was so strong that he appeared to be more powerful than the shah himself – who actually considered resigning in the face of events.

The standoff ground on and the economy cratered. As law and order broke down Mossadegh became increasingly authoritarian to keep a lid on the anarchy with decrees, cancelling the Majlis and challenging the shah’s authority to rule.

President Truman thought Mossadegh was tedious, but he was the duly elected prime minister. Eisenhower, taking office in1953, was less impressed. Ike thought power had gone to the man’s head, and the 50/50 split Truman had negotiated was perfectly reasonable. The Eisenhower administration was in favor of full independence for the Middle Eastern countries, but he wanted to slow the process down, thinking that too rapid a withdrawal by France and Great Britain might lead the new governments to orient themselves towards the Soviet Bloc.

Which is exactly what Winston Churchill – back in 10 Downing Street – told Ike would happen. Well… maybe Mossadegh wasn’t a full-blown Red, but if things got out of hand… Now, Eisenhower didn’t really care about an Anglo-Iranian trade deal, but that Red Menace business struck a cord as Joe McCarthy was running around screaming about pinkos under the bed. Ike also needed NATO allies to contain the Soviets in Europe – and those nations needed to be supplied with relatively cheap oil to keep them warm and happy. From that point of view, the US had to keep the supply chain open as well as keep Iranian oil on the free market. So something had to be done.

Operation AJAX

Let’s clarify our terms when discussing the lively recent histories of Iraq and Iran. While one often follows in the other’s footsteps, there is a difference between the coup d’état and the revolution. Coup d’état is one of those French words that was too good to not leech into English – it means a “stroke against the state,” or more literally means “blow to state.” And for the outgoing chief executive it really does blow. Unlike revolutions – which are broad based, involve howling mobs and are generally very bloody on a national scale – the coup d’état comes from within the existing power structure. They are often bloodless, or at any rate spill just enough blood for the odd assassination. Among the wonks who study this sort of thing there is an actual marker for determining whether or not a coup is successful: It stays in power for an entire week. Which seems to be a pretty low bar.

The coup is also fairly cheap and, baffling to most Americans, triggering one in a foreign country isn’t all that involved. Tricky, yes and the chances of whole operation going tits up are astronomical, to be sure. Provided you are operating in a country where this sort of thing has happened before, however, it really isn’t all that complicated if you know what you are doing.

The CIA called the joint mission it conducted with the British Operation AJAX. MI6 called scheme to give Mossadegh the boot Operation BOOT. The CIA sent a man named Kermit Roosevelt, the grandson of President Teddy “Big Stick” Roosevelt, to head up the operation. He immediately set about recruiting pro-Western army officers to the cause which, in a society fraying under a crippled economy, wasn’t difficult. He even delivered $10,000 to Ayatollah Abulgasim Kashani – a one-time supporter of Mossadegh who’d been jailed by the British for being pro-Nazi and had been in exile for being involved in a plot to kill the shah. Time and CIA money had evidently had mellowed the man as he was trying to distance himself from his high-strung protégé, one Ruhollah Khomeini.

Mohammad Shah was informed of the plot and yet, while no fan of Mossadegh, the shah was indecisive to the idea of the coup. He wasn’t opposed to the idea of foreign influence, you understand, he was used to that. It’s that the man was just congenitally indecisive to everything. The Brits sent their man in Rome to get his twin head home and talk some sense into the shah. Had any logic been applied to the Iranian succession, his twin would have ascended to the Peacock Throne, as she was the smart, decisive and headstrong one. But Princess Ashraf was a she and traditional Asians can be prickly about that sort of thing. So strong willed was Princess Ashraf that she was – not in exile really – but it had been strongly suggested she decamp to Rome, where the Italians were used to loud, bossy women. At first, she refused to speak to her brother about the coup. True to form – and you really do have to admire her for it – she bilked Her Majesty’s treasury for a huge bribe and a mink coat before agreeing to brow beat her milquetoast brother, the Shah of Iran, into submission.

Back in Tehran, Roosevelt was throwing money around to organize the trade unionists, the police, clergy and thugs-about-town into coordinated anti-government protests designed to throw the capital into chaos. For his part, Mohammad Shah signed some legally dubious decrees deposing Mossadegh and appointing a CIA/MI6 picked successor. Mossadegh caught wind of the plot and had one of the officers involved arrested. The gambit so spooked the fearless shah that he fled the country to Rome.

Showing a stick-to-itivness that would have made grand-dad proud, Roosevelt pressed on with the plan. On 9 August 1953 the anti-government rallies went off as scheduled – that $10,000 to Khomeini’s mentor had been paid the day before – and the city went into chaos. Pro-Western army officers seized the parliament building and the radio station and sent soldiers crawling through town to round up Mossadegh and his supporters. Mossadegh himself tried to escape by climbing over the wall of his back garden, but was eventually captured.

The Return of the King

The news of the ouster reached Mohammad Shah while he was having breakfast at the Excelsior Hotel in Rome. He reportedly said to his wife, “I knew it! I knew they loved me!” His Imperial Majesty hopped on a plane back to Tehran to “take control” of the situation and formally appoint the prime minister that Kermit Roosevelt had told him he was going to appoint.

So it was that the first, and last, fairly elected leader of Iran was deposed by the government of a foreign country built on fairly elected leaders. As for the nationalization of AIOC, it remained in a formal sense. To revoke it would have looked so bad it would likely have sparked a popular revolution. A face-saving compromise was reached: The nationalization of Iranian oil stood, but the concession to extract, refine and sell it went back to the British. And the United States. And those profits were split 50/50. The British were miffed about it, but it was the price of admission. What’s more, the shah was now solidly in Uncle Sam’s deep pockets. He reported said to Kermit Roosevelt, “I owe my throne to God, my people, my army and you.”

The ever-helpful Roosevelt continued to work with the shah, setting up a highly, and brutally, effective internal intelligence operation designed to sniff out communists. In 1957, this became known officially as the National Security and Intelligence Organizations, or SAVAK. Oil revenue boomed, which the shah now spent on a shiny new army and air force bought from the United States.

In light of the grand plan to contain the Soviet Union, the United States had its man in Tehran on the southern border of Russia and it was very important to the US that he remain there. It was very important to the shah that he remain there as well. He’d had quite enough of a free and lively democracy, and so stepped on the throat of the Iranian people. Hard.

The formerly pro-Nazi, Ayatollak Kashani was now floating on a raft of CIA money, but back in the day, he’d been the one to introduce Ruhollah Khomeini to the Fedayeen-e Islam (Fighters of Islam, , Iran’s first Islamic terrorist group). In the aftermath of the coup, Khomeni was drifting towards the radicals. That wasn’t his only grievance either: Over in the Levant, a bunch of European immigrants had re-claimed a nation out of the old Ottoman province of Palestine.

At the time, the plight of the Jewish refugees did trigger sympathy from the majority of the population, but Muslims couldn’t see why the Arabs had to provide the refugees with a homeland just because the Germans had been maniacs. Although Khomeini wasn’t that mellow about it – his mentor had been a Nazi sympathizer.

In short, Ruhollah Khomeini was developing a very grumpy world view.

Richard Murff is the author of Pothole of the Gods: On Holy War, Fake News and Other Ill-Advised Ideas. Available in a revised and updates paperback in October 2024.