Suez 1956, page 13
The plan was based on dispensing money, lots of it, to highly placed Iranian friends, who recruited a small army of rabble-rousers and street fighters. The bulk of the funding came from the CIA (in April 1953, Allen Dulles made $1 million available) while British intelligence had the list of contacts with the Shah, the military and the clergy, all essential to the success of the coup. When it came to the showdown in July, Mussadiq blustered against the reactionary forces before dramatically collapsing under the strain and being led away to his trial.
The Shah, who, a few days before, had fled the country, returned in triumph to rule under American auspices for the next quarter-century. Mussadiq was sentenced to three years in prison. On his release, he spent the rest of his life under house arrest on his estate in Ahmadabad.
Churchill was delighted, though whether, in the light of subsequent events, he would have stuck by his judgement that it was ‘the finest operation since the end of the war’ must be doubted. Allen Dulles’s biographer was closer to the mark when he wrote that the Iran venture was ‘more reminiscent of Viennese operetta’.
The stock characters strain credibility: the outrageous prime minister, dumb like a fox, who prances across the world stage in his pajamas; the brooding ‘gloomy prince’ who cannot decide who his friends are; the clever spy [Kim Roosevelt] from abroad who hides in a villa out of town as he flips wild cards and jokers like a street shark; assorted middlemen and go-betweens who find ever-shifting middles and betweens; a chorus of Persian urban peasants and sword-bearers who enter and exit on cue.15
The final twist to a bizarre tale came when the Shah, in temporary exile, turned up in Rome at the very hotel where Allen Dulles and his wife were also staying. ‘Years later, with Operation Ajax celebrated as an example of a CIA covert action that worked, Allen would respond with a knowing twinkle when asked if he had used the hospitality of the Excelsior to persuade the reluctant Shah to reclaim his sway over Iran.’16
As it happened, the reimposition of the Shah on his less than enthusiastic subjects proved to be no more than a strategy of delay, putting off the day when they turned to the Ayatollah Khomeini, a far more dangerous threat to Western interests than Mussadiq had ever been. But, at the time, the only debit on the British side was the flat refusal by the Shah to reinstate the AIOC.
Eager to effect an early settlement, Eisenhower moved in as the honest broker, a role untainted by the charge of hypocrisy since the part of American and British intelligence in the overthrow of Mussadiq was still a tight secret. To front up the negotiations, Herbert Hoover Jr, son of the former president, an experienced oilman but an Anglophobe, was appointed special adviser to Foster Dulles. The brief from Washington held that the involvement of the American oil companies was a prerequisite of any deal.
The difficulty for Hoover was that the oil companies were not at all sure that they wanted to be involved. With the huge expansion of production in Kuwait and other Gulf states where Anglo-Iranian, now renamed British Petroleum, had more than made up the losses from Iran, the world production of crude was in surplus to the order of 1 million barrels a day. In the end the five major American oil companies submitted to Washington’s demands on condition that, by agreeing to concerted action, they would be exempt from American anti-trust laws17 – in the national interest, of course.
The new management was a consortium of eight companies which gave Britain a 40 per cent share. Five American companies were also awarded 40 per cent, with Royal Dutch Shell taking 14 per cent and a French company the remaining 5 per cent. Profits were to be divided equally with Iran, a formula soon followed by other oil-producing states. While the Shah proved to be a tough negotiator, he was outmanoeuvred by the oil companies in one important respect. Free of the restrictions imposed by American anti-trust legislation, they came to an agreement whereby production of Iranian oil was strictly curtailed to protect world prices. As an American oilman observed, ‘This was most profitable patriotism.’18
Britain was slow to learn the lessons of Iran. While Eisenhower and Dulles were prepared to sponsor, preferably covertly, forces opposed to communism, this did not extend to giving Britain a free hand in Egypt, where Nasser was seen as the up-and-coming Arab leader who might well lead the way to a Middle East settlement with Israel. That such opinion held sway in Washington was largely the result of intelligence fed through from the CIA office in Cairo.
Britain had few links with the Free Officers. The coup that overthrew Farouk had come as a surprise. As Eden admitted, it ‘happened so quickly that no one was aware as late as the morning before’. With his exaggerated regard for royalty, Churchill was instinctively hostile to the new regime. His thoughts turned to a counter-coup. What had been done in Tehran could just as easily be achieved in Cairo. Eden was more realistic. What was the point of staging a confrontation in Egypt? With the shift to a nuclear strategy there was no longer an essential need for a peacetime military force in the Canal Zone. ‘He thought that it was one of the areas where we were grossly over-extended, in an untenable position. And then, what with nuclear power having changed the whole concept of war, it seemed absurd that we had to keep an enormous garrison out there on the Canal, at this cost to our whole political position in that area. He thought we had to come out.’19
But a get-out had to be presented in a way that did not suggest a humiliating retreat. Eden ‘was up against people who didn’t see any need for us to give anything away anywhere . . . There were “little Empire” people there who even thought we should be extending the area of pink on the African map . . . And they were not negligible influences in the Party or in Parliament’.20
Eden was in a delicate position. As Churchill’s preferred successor he was unable to depart too far from his mentor’s views without putting his political inheritance at risk. Yet Churchill went along with the nonsense that came from the ‘little Empire people’ and from the COS. ‘Our standard of living stems in large measure from our status as a great power and this depends to no small extent on the visible indication of our greatness, which our forces, particularly overseas, provide.’21
For the Suez Group, Julian Amery took heart from the barely concealed support of Churchill.
There was a debate in 1953 in which Eden indicated that he was prepared to consider withdrawing from the Base and Zone. I made a very strong speech on the subject, the first of several, and John Strachey, who was interested in my speech, gave a detailed reply which enabled me, unusually, to catch the Speaker’s eye again. I was fairly critical of Anthony, and rather to my surprise, the next morning the telephone rang and it was one of the secretaries at Number 10. I thought I was going to get a rocket, but he said that the Prime Minister had read my speech and thought it was very good. I used to run into him [Churchill] in the Division Lobby, and he would make it quite clear that he was dead against what Anthony was up to.22
The message was clear. There could be no unconditional withdrawal from Egypt if British prestige were to be safeguarded and Conservative right-wing opinion pacified. The excuse of Churchill, as an old man in no hurry whatsoever to depart the political scene, for staying on fastened on Eden’s failure to come up with an acceptable response to challenges to British command over large parts of the Middle East. Eden’s frustration, together with his fragile health, damaged his performance at a time when the range of problems facing him in Europe, the Far East and the Middle East, and the conflicting views of his cabinet colleagues on how to resolve them, called for diplomatic skills of high order.
Looking for a way out of his Middle East dilemma, Eden focused on winning American support for a joint strategy. Sympathetic noises came from Foster Dulles, but it soon became apparent that British and US ideas on the subject were far apart. Britain wanted a Middle East Command that took in bases in allied Iraq and Jordan as well as a continuing British presence in the Canal Zone. Prompted by the CIA station in Cairo, Dulles was sure that the Egyptians would veto any proposal for the stationing of British army units anywhere on Egyptian territory. In any case, his own thoughts on Middle East strategy were edging towards a northern tier of alliances bringing together Turkey, Iraq, Iran and Pakistan. If this were achieved, then the British entanglement in Egypt would be an irrelevance. Eden was moving to a similar conclusion but he was forever coming up against the diehards in his party.
In March 1953, Dulles reluctantly agreed to a Middle East defence package that included a desirable but, in American eyes, not essential British presence in the Canal Zone to ensure that the base could be made quickly operative in the event of war. It was now up to Britain and Egypt to come to terms on a phased evacuation of the bulk of British forces in Egypt. But without direct American involvement the talks hit stalemate as soon as the opening speeches were over. The British delegation wanted continuing control of the base installations; the Egyptians, with Nasser as their chief spokesman, demanded total peacetime control of the base. Negotiations dragged on until May 1953, when the Egyptian government was told that its proposals were unacceptable.
Two opposing developments followed in quick succession. As the British and Egyptians fell to mutual recriminations, Dulles embarked on a tour of North Africa and the Middle East, where he experienced at first hand the strength of anti-British feeling in the region. Once he had reported back to Eisenhower, the conclusion in the White House supported what the CIA had been saying all along, that the British negotiating stance was untenable. The president then wrote to Churchill to tell him so, holding out the prospect that the best that could be hoped for was ‘a private undertaking by Egypt that the base would be made available in case of a general war’. Churchill reacted sharply.
In the hope of reaching agreement with you and your predecessor we went over all this ground before and agreed to make a number of concessions to the Egyptian point of view. Our object in these discussions was not to obtain military or financial aid from the United States, but only their moral support in what we hoped would be a joint approach to the Egyptian dictatorship. However, you decided to defer to Egyptian objections . . . Since then we have been disappointed not to receive more support particularly in Cairo from your Government in spite of the numerous far-reaching concessions which we made in our joint discussions with you . . . We propose to await developments with patience and composure . . . I should have no objection to your advising the Egyptians to resume the talks, provided of course they were not led to believe that you were whittling us down, or prepared to intervene in a matter in which the whole burden, not nineteen-twentieths but repeat the whole burden, falls on us, and about which I thought we were agreed.
Churchill added what he hoped would be an appeal to touch the presidential heart strings.
If at the present time the United States indicated divergence from us in spite of the measure of agreement we had reached after making so many concessions, we should not think we had been treated fairly by our great Ally, with whom we are working in so many parts of the globe for the causes which we both espouse. If as the result of American encouragement at this juncture or a promise or delivery of arms, Dictator Neguib is emboldened to translate his threats into action, bloodshed on a scale difficult to measure beforehand might well result, and for this we should feel no responsibility, having acted throughout in a sincere spirit for the defence not of British but of international or inter-Allied interests of a high order.23
In the light of developments in Iran, Churchill may have imagined that he was on a winning streak with Eisenhower and could afford to push his luck. Eden would have urged a more constructive response, but the foreign secretary was in hospital and unavailable for consultation. Confrontation with Egypt was now declared government policy. That not much would change in the short run was confirmed in July when Churchill suffered a stroke and Salisbury was left in sole command of foreign policy.
Eisenhower lost patience. The Iranian operation notwithstanding, Dulles was told to work up his own proposals for Middle East defence that would keep Britain on the sidelines. To avoid hard feelings, Britain was assured of support ‘in principle’, as Salisbury related after a meeting with Dulles in Washington.
Dulles then delivered a tedious lecture about the difference in outlook as between us and them towards countries like Egypt. There was a feeling in the United States that we still considered that the right way to deal with such people was to be completely stern and firm and to deliver a well-placed kick when they made difficulties. They felt that times had changed, etc., etc.
I found this rather hard to bear . . . we had already offered enormous concessions to the Egyptians, and if our prolonged negotiations with them were viewed as a whole it would be seen that it was quite unjust to describe our attitude as inflexible . . .
I said that the proposals . . . on the duration of the agreement and the availability of the base . . . represented what the Cabinet considered to be the limit of possible concessions. I recognised, however, that we could not ask the United States Government to stand with us on every word and comma of these formulae. What we did ask was that they should support the fundamental principles which were embodied in the formulae.
This appeared to modify Dulles’s attitude considerably. He said, and repeated, that our proposals had the ‘general blessing’ of the United States Government . . .24
But Dulles was already thinking beyond Egypt to a system of Middle East defence that would focus on the northern tier of states – Turkey, Iraq, Iran and Pakistan; what was soon to become the Baghdad Pact. Meanwhile, Britain had another try at persuading Egypt to accept terms that would satisfy the military while protecting the international status of the Suez Canal. There were three major points at issue – the duration of the agreement, the strength of the British contingent responsible for keeping the canal base in working order and the conditions under which the base could be operated. There was also the question of the status of the British forces. Around four thousand ‘technicians’ were needed to maintain the base, but while the Egyptians thought in terms of civilian employees the British insisted on military personnel with the right to wear uniforms. In the event, it was this relatively minor issue which brought the negotiations to a grinding halt.
By early September 1953 there was optimism in London that a deal could be struck on a seven-year agreement allowing eighteen months for the withdrawal of troops, and five and a half years with technicians managing the base. The Egyptians countered on points of detail on which compromise was easily within reach, but stuck fast to the principle of removing every symbol of military occupation. No uniforms were to be permitted. The exaggerated regard for the images of power that bedevilled British foreign policy throughout this period brought negotiations close to another breakdown. But whatever Churchill and Salisbury imagined, there could be no return to the old days when London gave the orders. The new regime in Cairo was well aware of its power to exert pressure where it hurt most.
Since the abrogation of the Anglo-Egyptian Treaty in October 1951, a practically continuous campaign had been waged by the Egyptians against British forces in the Canal Zone.
Activity has been directed against our installations, transport and communications. Cable cutting by some of these gangs has continued off and on throughout the period. The more exposed married quarters have suffered constantly from housebreaking and petty thieving. Throughout the whole area our forces have been contained in the Zone, unable to enter the Delta, and deeply committed to guard and internal security duties.25
Vehicle hijacking became so commonplace that British troops moved only in convoys and under escort. It was to get worse.
During the first fortnight of August, the Egyptian ban on the sale of goods to British forces was intensified; thefts of WD [War Department] vehicles increased in number; and there have been several incidents in which British soldiers have been shot in unprovoked attacks. The deliberate use of fire-arms by the Egyptians concerned is a new and disturbing development. There is secret evidence that these incidents are being planned by ‘Liberation Units’ encouraged by the Egyptian Army Intelligence Headquarters.26
Cabinet discussions on Egypt were dominated by Churchill and Eden arguing the equivalent of how many angels could dance on the head of a pin. What were to be the accepted working clothes for British technicians? Eden was happy to permit ‘overalls or shirts and shorts, with rank distinctions; at other times: plain clothes’. Churchill thought this was going too far.
Within the Base installations and in transit between them British personnel will be entitled to wear the uniform of the Service to which they belong and to carry a weapon for their personal protection. Outside the area of the Base they will wear plain clothes.
Our Delegation might be authorised to inform the Egyptians orally that the British technicians when at work would normally wear overalls or shorts and shirts with rank distinctions. This statement should not, however, be included in the formal agreement itself.27
The cabinet sided with the prime minister.
The word in Egyptian diplomatic circles was to relax and to let the British work through their own problems while Nasser confidently expected that further concessions would soon be forthcoming. He was encouraged in his thinking by the more or less open support of the CIA. By now the relationship between Nasser and American intelligence was so close as to persuade the visiting side that the only obstacle to a fruitful relationship between America and Egypt was the British insistence on taking part. It was a neat scenario which called for a large measure of CIA naivety. To push Britain out of Egypt, Nasser was ready to accept help from wherever he could get it. But this was a long way from consenting to America taking over as the dominant force, which was what the CIA had in mind. Nasser was not about to exchange one occupying power for another. For the moment, however, it suited Nasser to humour CIA delusions. Once Britain was out of the way there would be time enough to rethink his strategy. Confident that the CIA, with a quiescent Secretary of State, could only strengthen his bargaining power with the British government, Nasser stuck to his demand for a total withdrawal of British troops from Egyptian soil. The best-laid plans in London for a compromise that would allow Britain to hold a place in the Canal Zone were thus destined for rejection.
