In Iran, the West's oil
supply was being
controlled by people
who were not
members of the
West's financial elite.
That could not be
The American Spark
How The U.S. Justified Its Overthrow Of Iran’s Democracy
By Cliff Montgomery - July 31st, 2019
With Donald Trump in the White House, it’s important to remind ourselves of how previous U.S.
administrations worked to overthrow foreign leaders they thought a tad too left-wing.
Today, the Spark takes a look at Mohammad Mosaddeq, Iran’s pro-democracy prime minister. Mosaddeq
served as Iran’s democratically-elected leader from 1951 to 1953. He could be either a powerful friend or a
ferocious enemy. That issue often depended on whether you agreed with him that the Iranian people should
have real power over their own lives.
A lawyer, author, administrator and highly regarded member of Iran’s parliament, Mosaddeq was the type of
politician one doesn’t see much anymore: He made promises to his people and actually worked to deliver on
what he’d promised.
The Mosaddeq administration set to work enacting a number of essential social reforms: unemployment
insurance was created, and factory owners now had to pay sickness and injury benefits to their workers.
Peasants now were freed from the slave labor they previously had been forced to endure on the estates of
their landlords. In 1952, Mosaddeq enacted the Land Reform Act - a law that took over 20% of the relatively
substantial incomes of those landlords, and gave it to those who worked the land and thus made it profitable
in the first place.
Mosaddeq’s actions made him highly popular with his constituents. But they also created powerful enemies,
who liked the old lopsided power structure just the way it was. Sometimes, those enemies weren’t Iranians.
The central issue of Mosaddeq’s administration was over who held the economic reins of power in the country.
And in Iran, that really came down to the question of who actually owned Iran’s oil massive reserves.
In 1908, a group financed by British businessman William D'Arcy discovered oil in Iran. By 1909, the Anglo-
Persian Oil Company (APOC) was established in London to extract and exploit those massive oil reserves.
After 1935, APOC was renamed the Anglo-Iranian Oil Company (AIOC). It would later change its name to
British Petroleum, or BP.
But in 1914, the British government bought a majority stake in APOC. This gave British politicians a direct
control of Iran’s entire oil industry.
“A 60-year agreement signed in 1933 established a flat payment to Iran of four British pounds for every ton of
crude oil exported and denied Iran any right to control oil exports,” according to a Library of Congress study of
Iran published in 2008. As anyone might expect, this sad financial arrangement became more and more
unpopular over time with the Iranian people.
So no one should be surprised that Mosaddeq’s most popular act as prime minister - at least among Iran’s
rank-and-file - was the nationalization of Iran’s oil industry.
Mosaddeq was quick to point out that “the rightful owners” of Iran’s massive oil reserves had every right to be
the chief beneficiaries of sales from those reserves - and, it seems by extention, the Iranian people also
maintained the right to cancel a clearly unfair financial agreement that benefitted others at their expense.
In June 1951, Mosaddeq spoke on his move to nationalize the oil industry, declaring:
“Our long years of negotiations with foreign countries ... have yielded no results thus far. [But] With the
oil revenues, we could meet our entire budget and combat poverty, disease, and backwardness among
“Another important consideration is that by the elimination of the power of the British company, we
would also eliminate corruption and intrigue, by means of which the internal affairs of our country have
been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political
“The Iranian state prefers to take over the production of petroleum itself. The company should do
nothing else but return its property to the rightful owners. The nationalization law provides that 25% of
the net profits on oil be set aside to meet all the legitimate claims of the company for compensation.
“It has been asserted abroad that Iran intends to expel the foreign oil experts from the country and then
shut down oil installations. Not only is this allegation absurd; it is utter invention.”
But not everyone was happy to see all that oil money go to its rightful owners.
In his 2015 book, Behind The 1953 Coup In Iran, Ali Rahnema succinctly describes the very different
emotions surging through the hearts of British politicians at the time:
“With fury, the British had closely observed how Mosaddeq ... [had been] preparing the legal ground for
nationalizing Iran’s oil industry,” wrote Rahnema.
“With Mosaddeq in power,” added Rahnema, “the British were no longer dealing with a politician whom they
could impress, pressure, intimidate or bribe into accepting their terms.”
On top of that, “the Anglo-Iranian Oil Company (AIOC), 51 per cent of which belonged to the British
government, was a highly lucrative business that contributed significantly to the British economy,” Rahnema
“Furthermore, Mosaddeq had four characteristics that made him abhorrent to the British,” continued
First, Mosaddeq “was a true patriot and believed in placing Iran’s benefit above all else, irrespective of the
risks,” he wrote.
Second, Mosaddeq “was inflexible, relentless and stubborn,” added Rahnema.
Third, he “was Western-educated, Westernized and familiar with Western ways of doing politics,” wrote
Rahnema, “yet ... he was not in awe of everything Western – he was rather firmly against foreign intervention
in the affairs of his country.”
“Finally, he believed that as long as the Iranian people supported him, he could move mountains without the
help of colonial powers,” declared Rahnema.
British politicians weren’t the only ones frightened at the prospect of the Iranian people taking back what
rightfully belonged to them. Their friends “across the pond” were upset as well.
On November 20th, 1952, James S. Lay, Jr. – the executive secretary to the U.S. National Security Council –
wrote a top-secret note entitled, United States Policy Regarding The Present Situation In Iran.
The note declared:
“Because of [Iran’s] key strategic position, its petroleum resources, its vulnerability to intervention or
armed attack by the USSR, and its vulnerability to political subversion [i.e., actions too left-wing for the
private taste of U.S. leaders], Iran must be regarded as a continuing objective of Soviet expansion.”
Not a single one of the statements produced by Mr. Lay could lead a reasonable person to justifiably assert
that under Mosaddeq, Iran had to “be regarded as a continuing objective of Soviet expansion.” But that didn’t
seem to matter. In Iran, the West’s oil supply was being controlled by people who were not members of the
West’s financial elite.
That could not be tolerated.
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