Iran is one of the hottest danger spots in the cold war, but the squabble with Britain over oil is only a symptom. The real threat is that Iran’s deep squalor and misery, graft and corruption, can be exploited by the Communists into a major political victory without firing a single shot

BLAIR FRASER July 1 1951


Iran is one of the hottest danger spots in the cold war, but the squabble with Britain over oil is only a symptom. The real threat is that Iran’s deep squalor and misery, graft and corruption, can be exploited by the Communists into a major political victory without firing a single shot

BLAIR FRASER July 1 1951


Iran is one of the hottest danger spots in the cold war, but the squabble with Britain over oil is only a symptom. The real threat is that Iran’s deep squalor and misery, graft and corruption, can be exploited by the Communists into a major political victory without firing a single shot




AT CLOSE RANGE this is the queerest crisis you ever saw. It's genuine enough—for in the long run Iran is perhaps the gravest single problem confronting the Western world—but on the spot it’s invisible. Teheran is just a dull and sleepy town where nothing seems to happen.

Each afternoon, after the daily siesta, foreign correspondents gather in the Ritz Hotel to hear Iranian colleagues translate the local papers. The other day, into this yawning circle came an urgent cable for one of the boys.

“Rush pix of tension in Teheran,” it said. “Would like shots of soldiers guarding public buildings, mobs in streets, tanks, armored cars, etc.”

When the laughter had died down the victim said, “It would serve them right if I did send a batch of pictures.” We knew what he meant. A set of honest photographs from Iran would have made that week’s headlines look rather silly.

Soldiers guarding public buildings? I’d seen a beautiful example that very morning. Eight of them, all wearing steel helmets, reclined in the shade of a wall in the courtyard of Golestan Palace where the Prime Minister has his offices. They were watching a ninth soldier who, with rifle and fixed bayonet over his shoulder, was riding a bicycle around in tight figure-eights. None paid the slightest attention as I walked in unchallenged and proceeded to the office of the PM’s secretary.

Mobs in the streets? That was even funnier. There’d be a mob in Parliament Square next week for another routine demonstration against the Anglo-Iranian Oil Company—that had already been announced. But on any ordinary day Teheran’s offices and shops close at 2 p.m. Walk down the main street at 2.30 and you’d think it was Sunday in Toronto. You could describe the situation in Iran as “The Crisis That’s Out to Lunch.”

It was much more exciting to read about, in British or American papers, than it is to see:

“Iran to Expropriate Britain’s Biggest Oil Reserve.” “Britain Moves Paratroop Brigade to Middle East.”

All quite true, but the excitement dwindles when you get here, as I found when I arrived in the middle of the expropriation proceedings. True that Iran provides Britain’s largest oil reserve; true that Iran has nationalized oil in defiance of contract. But these are only symptoms of a deeper crisis. As for the calculated leak of information about the paratroop brigade, that was pure bluff. Even the British admit it now. Britain never had any intention of using force, except to rescue its four thousand nationals from Iran in the event of violence. The paratroop story caused a lot of conversation here, but it didn’t interrupt Teheran’s siesta even for a day.

Of course the superficial quiet is misleading too, perhaps just as misleading as the headlines. There is a crisis in Iran all right—“more serious than any I’ve seen in this country,” said a Western diplomat of many years’ experience. It’s not the kind of crisis that can be photographed, not readily expressed in news leads, not likely (in the opinion of older hands here) to flare up next week and set off World War III. But it’s no less grave for that.

The deeper crisis is that Russia, by present indications, may rule Iran politically before very long, without spending either troops or money. In one of the richest countries in the world the Iranian people have lately become aware of the misery and squalor in which most of them live. That is bad news for our side and good news for the Communists— always quick to exploit misery wherever they find it.

One of the surprises for the newcomer is to find that there is less at stake, in military terms, than most of us think.

I had thought of Iranian oil, for example, as a great military objective, but that seems to be all wrong. It’s a great asset to Britain in peacetime —forty percent of Europe’s gasoline comes from the Abadan refinery on the Persian Gulf. Even in peacetime, though, it would be no use to Russia. There’s no transport to take it north. Building a pipeline would take years, if indeed it could be done at all—the lowest passes through the mountains of northern Iran are ten thousand feet above sea level. The one rail line that links north and south could not carry a fraction of Iranian oil .production.

In wartime it would be no use to either side —too vulnerable. No matter which side holds the Abadan refinery, the other could bomb it to bits in a matter of hours.

For the Russians there would be great military advantage in simply holding the territory. It would give them a warm-water port. It would put Red submarines into the Persian Gulf and the Red Sea, and threaten the water routes from east to west.

Slums Speak for Themselves

When or if Stalin decides that the time is ripe for World War III, therefore, he may well assign one force the job of capturing Iran. But seasoned observers on the spot see no reason to fear that Stalin will pick on Iran alone. They can’t see Iran as the starting point, the spark that ignites the conflagration.

But from the Soviet point of view things are going so well in Iran that nothing more need be done at present. The living conditions of most Iranians have given the Communists plenty to work on politically.

I spent an afternoon last week touring the slums of Teheran under the guidance of two Iranian Communists. (Their party is illegal in Iran, but they don’t pay much attention to that; the Communist is actually the easiest of all Iranian political parties with which to make contact.)

My guides didn’t have to say much about what we saw—nobody even mentioned Marx or Lenin, nobody talked about international Communism. The slums here speak for themselves against the status quo.

They are mostly in and around the old quarries whence came the clay for the ugly yellow brick of which this ugly city is built. Several hundred families live in abandoned kilns. Thousands more are in cavelike dwellings built one on top of another in the great pits of the quarry.

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None of the houses I saw had more than one room. Only the best, those held by better-paid workers, have windows or chimneys; the typical dwelling is a dark cell with a mud floor and a hole in the roof to let the smoke out. Sick children lie on heaps of dirty rags in the corners. Others, hardly healthier in appearance, cr?.wl about in the filth in front of the rickety doors. There are no sanitary facilities of any description; in fact, when I enquired about that everyone within earshot burst into roars of laughter.

These slum dwellers are not unemployed. They have jobs men, women and children work six twelve hour days a week in the glass factories, the brick factories, the other small industries of Teheran. In the glass factory I visited a man earns sixty cents a day, a woman forty cents, a child sixteen cents— barely enough to keep them alive at Teheran’s food prices.

Except perhaps in Calcutta, whose three million refugees are a special case, I had never seen such squalor and poverty. The squatters of Hong Kong, in their incredible villages of boxwood and tin cans, look relatively comfortable, relatively clean and prosperous compared with these miserable folk.

Under other circumstances, that might not be important. Heaven knows there is misery enough all through the East. The unique thing in Iran, the intolerable and unbearable thing, is that Iran is not a poor country like India or China or North Africa. Iran is one of the richest countries in the world. Iranians are now beginning to realize it. This, I think, is the root fact in the Iranian crisis.

Holiday Gift—a Pay Cut

Three days after my Communistconducted tour the National Front, party of the swooning Prime Minister Mohammed Mossadegh, took the foreign press corps on a conducted tour of the same slum area. Natie nal Front politicians didn’t know the terrain as well as the Communists had— we got lost twice trying to find our way out — but their speeches were even more pointed.

To an impromptu political meeting at one point along our route, the local MP cried, “When we take over the former oil company’s wealth, our people shall no longer live here like swine.” The crowd che. red.

If only it were as simple as that there’d be no problem. Neither Pritain nor the l nited States is much n Crested in def n ling the profits of n doIranian Gil Company, even though the British Government is the biggest shareholder. British as well as American of ci a’s will tell you privately that the company has been superlatively stupid in its handling of the whole situation.

To take just one example: Last

March the company took the quite justified step of re lucing the wage rates of certain employees. They’d been drawing extra pay for living under hardship conditions, and the hardship had been relieved. The company served notice last November that the special bonus would soon be withdrawn, and the workers made no protest.

All very logical—but the company chose to withdraw the bonus on March 21, the Moslem New Year. Most Iranian workers expect, and many of

them get, an extra week’s pay as a gift on that holiday; these oil company workers got a cut. Oil company spokesmen even yet sound astonished and grieved to report that the workers went on strike—Communist influence, they say.

This kind of myopia is responsible for the company’s ill repute in Iran. Few companies in the 20th century have such a rudimentary concept of public relations as Anglo-Iranian—they seem to have made no serious attempt to put their case even to their own countrymen, let alone to Iran. Two years ago they offered Iran a new contract which would have doubled the oil royalties payable under the existing “1933 agreement”; it’s just as good, in some ways better, than the “50-50 deal” which has got so much publicity in Saudi Arabia. To this day no one has ever explained the advantages of that new agreement to the Iranian people.

DDT Funds Went Astray

All this makes the oil company an admirable whipping boy. Unfortunately it does not make the company responsible for the squalid poverty of most Iranians. On the contrary, the company treats its own employees pretty well—not quite as well as company pamphlets make out, but better than other Iranian employers. Wages are all higher than the minimum set by law (most Iranian employers pay no attention to the law and pay wages fifteen per cent lower) and most oil company workers earn double the national average. The company has built schools, hospitals, houses, community halls for its people; it provides a whole range of medical and social services.

As for its payments to the national treasury of Iran, obviously they have been lower than the company could afford to pay, since the company is now able to offer double the old rate. But there is no evidence that doubling the oil royalty would make any difference to the poverty of the Iranian masses. On the contrary, there’s all too much reason to believe that any amount paid to the present Iranian Government, or any other likely to be chosen under the present system, would be squandered to no purpose. Even by Middle Eastern standards, the Iranian Government is outstanding for corruption and incompetence.

One example: In the northern provinces along the Caspian Sea, the incidence of malaria is as high as eighty-eight per cent. Last year, with American aid and counsel, a vigorous program of mosquito eradication cut the malaria rate to thirty-five per cent. With a few more years of similar effort the disease might be eliminated altogether. But this year nothing is being done—there’s no money to buy DDT. This in spite of the fact that a stated percentage of oil royalties was allotted to that purpose, a percentage more than large enough to buy all the DDT that’s needed. The funds did not get to the right place.

Salaries in the government service are lamentably low; it’s quite impossible fcr the average official to live on his salary. He must, and he does, supplement it with whatever graft he can pick up.

“I’ve been eight years in school and yet I can’t get a job,” said an angry man I met in the slums. “I couldn’t pay a high enough bribe to get a job in the army.”

How high a bribe was required?

“I don’t know. There were only ten jobs, and two hundred of us applied. The sergeant picked the ten who paid him the most, I guess.”

I asked several officials how many Banians pay income tax. Nobody seemed to know. They couldn’t even think of anyone, from the Finance Minister down, who could give me the information. Finally an American explained why: “We don’t bother

asking for statistics like that, because they wouldn’t mean anything. Hardly anybody actually pays income tax— it’s so much cheaper to pay the tax collector.”

Hopeless, But Not Serious

Any Iranian Government requires support of the Majlis (Parliament) to carry on, but the Majlis has no party system as we understand it. No government ever is able to count on a permanent majority. Majlis’ support must be bought and paid for, sometimes in cash, sometimes in favors. Even then it’s not very reliable.

If you ask what political system produces this mockery of government, the answer is embarrassing: Democ-

racy, so-called. The Iranian Majlis is elected by manhood suffrage, and it has more power over the Imperial Government (headed by the Shah-inShah, a constitutional monarch) than most parliaments have over most governments. The catch is in the methods of election. Probably ninety per cent of Iranian peasants are illiterate. Their feudal landlords bring them to the polling stations by the cartload, tell them where and how to mark their ballots, then pack them off home again. The landlord or his nominee is always elected.

Between the prevalent graft and the archaic feudal system under which eighty per cent of all Iranians live, Iran has the most shocking maldistribution of wealth you can imagine. Teheran displays, as well as some of the world’s worst slums, probably the largest assortment of 1951 Cadillacs outside North America.

It’s true, of course, that this kind of thing has been going on for centuries. Maybe it makes more impression on the newcomer than it does on the native. As one of the older hands at a Western embassy remarked not long ago: “My dear chap, you wifi discover that the government here is inefficient and corrupt, that the people are impoverished and diseased, that nothing goes as it ought tc gc, and that everything is all right.”

Perhaps apocryphally, the British Ambassador Sir Francis Shepherd is credited with a witticism widelyquoted: “The situation is hopeless, but not serious.” But lately even the most cynical of old hands is inclined to admit that the situation is becoming serious as well as hopeless. The hot clamor for nationalization of the oil industry is the symptom, not the disease; it’s an index of the Iranian sense of grievance.

Some British statements, particularly editorials in the home press, give the impression that nationalization is demanded only by a lunatic minority; that most Iranians are really opposed to it but have been intimidated into silence by the gunmen who shot Prime Minister Razmara in March. So far as I cculd learn from interviews here with foreigners, as well as Persians, this is quite incorrect. The sentiment for nationalization is as nearly unanimous as any sentiment could be.

I talked to one elder statesman with a great reputation for cool judgment, one who has always been friendly to the West. He was heartily and emphatically in favor of it—not, perhaps, of the way it was being carried out by the Mossadegh Government, but in favor of the principle.

It is true, as British editorials say that Mossadegh’s National Front has only eight members in a Majlis of 136. But the Majlis has no party .system — tiny as it is, the National Front is the biggest single party in the House. And on the issue of nationalization it has the support of all the other parties; the Majlis is unanimous.

It is true, too, that this unanimity became much more noticeable and enthusiastic after Prime Minister Razmara was murdered. The Iranian politician is not famous, as a rule, for personal courage.

But this is another symptom, this threat of violence and death that lies continually beneath the quiet surface of Iranian politics. The shocking thing about political murder in Iran is that public sympathy usually lies with the murderer, not with the victim.

To this day the Moslem fanatic who killed Razmara last March has not been brought to trial. Any Persian will tell you why: “They’re afraid to try him.” The Fidayani Islam, a band of Moslem assassins which claims credit for Razmara’s murder, has issu :d warnings that the murderer will be regarded as a martyr if punished, and that his judges should beware of vengeance.

At the time of Razmara’s murder the present Prime Minister Mossadegh almost openly applauded the murderer’s patriotic act. Ironically, he himself is now terrified by threats on his own life; that’s why he barricaded himself in the sanctuary of the heavily guarded Majlis Building.

The Guard Escaped Too

The threats are not idle. The other day a ragged and dirty little man came to the side door of the Ritz Hotel with a wad of papers. “For the foreign press,” he said, and disappeared. The papers turned out to be a proclamation of Fidayani Islam, threatening vengeance on the whole National Front Government for having “deviated from God’s path.”

Teheran swarms with police, but you get the uneasy feeling that they lack authority. Whenever the Majlis meets, which is every second day, several dozen policemen line up on the sidewalk to prevent “demonstrations” and to protect the members as they step from their Cadillacs to the heavy barred gates. They keep telling spectators to move along, don’t block the sidewalk, don’t stand here. Nobody pays the slightest attention and there is a small demonstration every day for the release of political prisoners.

Two years ago, after an attempt to assassinate the Shah, the Tudeh (Communist) Party was declared illegal and its ten leaders arrested. All ten escaped before very long it turned out that the army officer and NCOs detailed to guard them were all members of the Communist Party, and they disappeared along with their prisoners. All of them are still at large; I’m told if I had a little more time here I could interview them.

So far the Communist Party has kept itself somewhat in the background of the oil dispute. The “Society for Struggle Against Imperialistic Oil Companies” is a Communist front; so are the “Partisans of Peace” which also operates openly. But in the main the Communists seem content to let the much more respectable National Front Government carry the ball in the drive for oil nationalization.

The Honeymoon Won’t Last

This quiescence does not mean weakness. One member of the Iranian Government, as well as all the Iranian reporters I met, said emphatically that the Communist is by far the strongest party in all Iran. That is not saying much in a country where no party is strong, but it does mean a solid, wellfinanced underground organization.

Communists know as well as anyone how brief their honeymoon with the National Front is likely to be. They have one common objective and only one nationalizing the oil. But even there they are not quite agreed, for the National Front presumably intends sooner or later to make some kind of operating and marketing contract with the British. Communists, of course, would rather let the oil run into the sea than let the British and Americans have it on any terms.

Aside from that, though, they are hound to come into open collision once oil is nationalized. The National Front has staked everything on this one card

nationalizing oil is to cure all the manifold ills of the Iranian body politic. “When we nationalize oil, land reform will not he necessary,” one National Front Leader told a British reporter.

This is nonsense, as the Communists well know. At best, the National Front will make an operating contract with the British which will pay Iran as much as the oil company was willing to offer anyway. At worst, they’ll try to operate the business themselves and prove themselves hopelessly incompetent and their oil revenue will drop to zero. (Oil now provides Iran with seventy-five per cent of all her foreign exchange and about twenty-five per cent of national revenue). In neither case will nationalization, in and by itself, cause any change in Iranian fortunes except perhaps a change for the worse.

Communists see their opportunity in the expected failure of the National Front. Just because public sentiment has been whipped up as never before, just because Iranians have been told to expect deliverance from all afflictions, Communists hope to catch them on the rebound of bitter disappointment.

This, then, is the problem of Western nations in Iran: How to frustrate the

Communists’ hope of capitalizing on disaster.

If it were not for the Russians we’d have no problem at all. Nothing would be simpler than to let the Persian ruling class stew in its own juice in fact, it would be a pleasure. Unhappily this pleasure is denied us by the presence of the Russians on the northern frontier. Somehow the Communists must be forestalled, or Stalin will have won another important campaign without moving a man.

It won’t be simple. Iran cannot be saved by anything as easy as a $200,000,000 ECA grant; giving money to the present Iranian authorities would have as little effect as oil royalties have had already. And if loans or grants are offered with conditions attached, Iranian officials may not want to take them.

Already there’s a $25,000,000 loan from the U. S. Export-Import Bank going begging. Iran doesn’t want it, partly because it’s an interest bearing loan but chiefly because there are some conditions and stipulations attached to spending it.

“The only solution I can see,” one American remarked, “is for us to come in here and do a rehabilitation job ourselves. We’d have to do it in spite of the active hostility and opposition of the Persians.”

Politically, this will be quite a trick. Physically, it shouldn’t be difficult at all. Even flying in at ten thousand feet you can see how easy it would be to multiply the wealth, health and happiness of Iran.

It’s a spectacular flight. Between the high, bare, barren mountains lie valleys equally bare great stretches of red sand, with the beds of dried-up rivers running through them like the veins of a dead leaf. But every few miles you see a patch of brilliant green. These are the irrigated farms.

All that country needs is water and the water is there, underground. The hills have snow on them as late as June; even in dirty dusty Teheran itself, you can look up any northbound street and see the white snow of the foothills just a few miles out of town. Irrigation projects would be fairly cheap (if honestly run) and instantly productive.

Public health operations could be just as rewarding. I mentioned the single year’s campaign that cut malaria

incidence in the Caspian area. A clean water supply would bring the same kind of sensational reduction in the endemic bowel diseases. If ordinary personal cleanliness were made possible, you’d see fewer little children left bald by ringworm

The difficulty is to get it done. Communists are not as well equipped for doing the work as we are you need no more than a glimpse of any Iron Curtain country to know that. But international Communism has at least a technique for interfering in other countries’ a'mirs. Democracy has none, and in ordinary circumstances we’re proud of that fact. In Inn things are not ordinary. We must interfere, somehow, or rusk a serious defeat.

Russians Weren’t Friendly

On the other hand we have one political ally in Iran, and that is Soviet Russia. The Red Army occupied the northern half of the country during the war; Iranians got to know what Russian occupation and Russian “friendship” can be like. The result is that even the Communists in Iran talk very little about the Soviet Union. They give the impression of turning to Russia not for love of Russia, but for lack of anywhere else to turn.

I had dinner one evening with a couple of Iranian Communists, and one of them said: “Why is it that the

United States, which never interfered in our country before, now interferes on behalf of this bankrupt and rotten regime? They give tanks and guns to Hussein Ala’s government (which immediately preceded the National Front); why?”

I said, “I suppose the Americans felt they had no alternative, except a party they regard as a puppet of the enemy.”

The little man leaned forward and tapped the table with a stubby finger; he was very serious.

“Meester Fraser, that is our situation exactly,” he said. “That is why we are Communists we have no alternative.”

If the Western powers can give him one, we needn’t fear Russia in Iran. If not, we might well lose the country without firing a shot.


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