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20. Memorandum Prepared in the Office of National Estimates, Central Intelligence Agency1

MEMORANDUM OF INFORMATION NO. 67

FOR

  • National Estimates Board

SUBJECT

  • Iranian Developments

1. The elevation of Mohammad Mossadeq, the leader of the ultra-nationalist National Front Party, to the premiership constitutes a radical departure in Iran’s political development. Political activity in Iran has generally consisted in the struggle for power among a small group of men of the wealthy class whose major interest was to protect the vested interests of the group as a whole. The interplay of personal interests and rivalries and the personal likes and dislikes of the Shah were the determining factors in the selection of prime ministers.

2. Mossadeq has come to power by other means. Although he is a member of the traditional ruling minority, his influence among his peers is negligible, his personal following in the Majlis is small, and he is disliked and distrusted by the Shah. In spite of these factors, however, he has great political strength because of the general appeal of his constant demand that all foreign influence be eliminated from Iran. He has the support not only of his National Front Party but also of the Fadayan Islam, a small terrorist group of religious fanatics, the Tudeh Party (as long as Mossadeq’s chauvinism is directed against the Western Powers), and probably the great majority of Iran’s peasants, laborers, and tradesmen, who, though politically inert, can significantly affect political developments in Tehran through strikes, demonstrations, and violence.

3. Because of the intensity of Iranian chauvinism, few Iranian leaders dare to oppose Mossadeq publicly. It is for this reason that Mossadeq has exerted such a decisive influence over Iranian developments during the past year. He has blocked the negotiation of US loan and the conclusion of a revised AIOC agreement. He condoned the assassination of Razmara on the grounds that the latter was being too lenient with the British. Finally he pushed the oil nationalization oil bill [Page 74]through the Majlis, probably against the better judgment of most of the deputies, who, however, succumbed to patriotic fervor or feared the consequences (including assassination) of opposing the measure.

4. During the six weeks when Hussein Ala was Prime Minister, Mossadeq was chairman of the Majlis Oil Commission appointed to draw up recommendations for taking over the AIOC installations. The Shah, Ala, and moderate members of the Majlis probably hoped that some agreement could be patched up with the AIOC before Mossadeq could complete his work. Mossadeq, however, reported to Majlis more than a month ahead of schedule. Increased bitterness toward the UK resulting from the intervening strikes and violence in the oil field area kept emotions high throughout the country and simplified Mossadeq’s job in obtaining prompt Majlis approval for his recommendations. The new law sets up a government committee of twelve to take over oil installations and provides for setting aside 25 percent of oil revenues to meet future claims of the “former company.” The Majlis action resulted in the immediate resignation of Ala, and, on the recommendation of both the Majlis and the Senate, the Shah asked Mossadeq to form a new government.2

5. Although the responsibilities of office may to some extent act as a sobering influence on Mossadeq, he will probably pursue the following objectives:

a. Full implementation of the nationalization law and effective Iranian Government control of the oil installations in southern Iran. It is possible that, if the UK accepted nationalization in principle, Mossadeq might be willing to conclude a management contract with AIOC, under which the latter would operate the oil installations under the direction of an Iranian Government agency. If the UK and AIOC refused to accept these terms, Mossadeq would probably take over the oil installations by force even at the risk of closing down the whole industry. In such an eventuality, he would probably try to obtain foreign technicians through individual contracts to restart production.

b. The elimination of other manifestations of foreign influence in Iran. It is extremely unlikely that Mossadeq would accept international loans from the Export-Import Bank or IBRD. He might even refuse to accept further US military aid and request the US Military Missions to leave the country.

6. In pursuit of these objectives, Mossadeq will probably adopt a lenient attitude toward manifestations of nationalist fervor, even if indulged in by members of the Tudeh Party. He has consistently opposed [Page 75]martial law and restrictions on speech, assembly, and the press. There is a danger that the Tudeh Party may attempt to take advantage of Mossadeq’s leniency in this respect to foment violence and disturbances throughout the country. Mossadeq may attempt to win Tudeh support (at least during the current oil crisis) by legalizing their status. In the long run, however, the National Front and Tudeh will almost certainly clash, for their fundamental aims are diametrically opposed.

7. The most significant aspect of Mossadeq’s advent to power is that the more moderate elements in Iran’s governing class appear to have lost control of the situation. Many deputies in the Majlis supported Mossadeq for Prime Minister in the hope that the oil crisis, for which he is largely responsible, would result in his own downfall. In view of his strong popular backing, however, he will not be easily displaced. If he obtains increased revenues from Iran’s oil resources, his position will be stronger than ever. If he fails to solve the oil crisis, he can place the blame entirely on the British and will lose little if any of his popular support. There are probably only two major developments, each of which would lead to critical situations, which could prevent him from achieving his objective:

a. UK occupation of the oil installations; and

b. the establishment under the aegis of the Shah of a semi-dictatorial regime willing to negotiate a new agreement with AIOC on the latter’s terms. The first alternative would probably result from the refusal of the AIOC, presumably backed by the UK Government, to negotiate on Mossadeq’s terms. The second alternative would result from the opposition of Iran’s vested interests, including the Shah, to the growing power of Mossadeq. The likelihood of either alternative occurring would be increased very greatly by widespread violence and demonstrations. The stability of Mossadeq’s regime will, therefore, depend to a large extent on his relations with the Tudeh Party.

  1. Source: Central Intelligence Agency, DDI Files, Job 79T00937A, Box 1, Folder 1, Staff Memoranda—1951. Secret. There is no drafting information on the memorandum.
  2. Prime Minister Ala resigned on April 27. Two days later, the Shah asked Mosadeq to form a new government.