1954: THE BRITISH CONSERVATIVE GOVERNMENT AND THE ENDING OF THE NATIONALISATION OF THE ANGLO-IRANIAN OIL COMPANY’S CRISIS.
Immediately the supporters of Musaddiq, in alliance with the clerics, organised violence against the government of Qavam, as a result of which in Teheran alone 20 people were killed and about 100 wounded in the course of the following days. By coincidence the International Court of Justice announced at this time that it had no Jurisdiction in the oil dispute; this was regarded as a triumph for Musaddiq. In view of this predicament, the Shah became convinced that Musaddiq had the popular support, and that the only way to suppress such a support would be use of force to a degree that he was not prepared to countenance. Since some rioters were even calling openly for a republic, the use of force in the Shah’s view would definitely jeopardise his own position. On 21st July 1952, Qavam resigned. The following day Musaddiq returned to position. On 3rd August 1952 the Prime Minister asked the Majlis to be granted full powers. His request was accepted by the Majlis.
Due to the lack of oil revenue, the financial situation in Iran deteriorated. The British Government has also frozen Iran’s sterling fund in the UK. There was a huge budget deficit which was exacerbated by the Iranian Government’s subsidisation of the oil workers. In September 1952, Dr. Musaddiq, the Iranian Prime Minister, invited Dr. Hjalmar Schacht, the German financial expert, to Iran for consultation. At the end of his four-day visit to Iran Dr. Schacht announced that he had been asked to prepare a new economic plan for Iran. Following Schacht, Camille Gutt, former Belgian Minister of Finance and director of the International Monetary Fund, who had been recommended to the Iranian Prime Minister by Trygve Lie, Secretary-General of the United Nations, visited Iran by the beginning of October. Camille Gutt’s purpose was to examine Iran’s economy in detail. The results of either of these two missions were not concrete.
Later in October, the Majlis voted to dissolve the Senate. In November the Iranian Supreme Court was dissolved. In January 1953, the Majlis extended Musaddiq’s powers for another twelve months. These powers were implemented to reject any proposal emanating from any quarter for a settlement of the oil dispute.
The Shah became anxious about the growing power of the Prime Minister. Politicians, landowners, merchants, and the army became increasingly concerned about the oil situation and economic problems which had been created or accentuated by the cessation of oil exports.
Ever since the end of 1951, according to the reports from the British Embassy in Teheran, anxiety had been shown in Iran towards Musaddiq:
Increasing numbers of moderate minded people are worried by the growing activities of the Tudeh.¹
According to Sir William Strang, Permanent Under-Secretary of State at the Foreign Office:
While Dr. Musaddiq makes considerable appeal to certain elements in the Persian character, and for that reason finds it easy to command mob support, his Government have proved themselves no better and no less corrupt than their predecessors, so that he himself cannot be regarded as enjoying a real measure of popular support.²
To strengthen his position against the growing opposition, in March 1953 Prime Minister Musaddiq set up a Majlis Commission ‘to work out a “reconciliation” between the Shah and his Prime Minister.’³ This meant ‘the Shah was to be regarded formally as Head of the State.’4, while ultimate authority was to be transferred to the Prime Minister. Such a proposal increased the opposition to Musaddiq. The unanimity of parliamentary support which the Prime Minister had enjoyed since the election of the Majlis the previous year faded away. The Majlis was split.
- PRO, London, FO 371/91472, The General Political Correspondence of the Foreign Office, report from the British Embassy, Teheran to the Foreign Office, to the Foreign Office on Musaddiq, Confidential, 15th November 1951.2 .
- PRO, London, FO 371/91463, The General Political Correspondence of the Foreign Office, by Sir William Strang, Permanent under-Secretary of State for Foreign Affairs, on Musaddiq’s position, 8th September 1951.3 . L. P. ELWELL-SUTTON, op. cit., p. 311.4 . Ibid.
