The

Prize of Persia
American-Iranian Foreign Relations Since 1900

 On January 29, 2002, in his first State of the Union address following the terrorist attacks

of September 11, 2001, sitting President George W. Bush declared that Iran (along with Saddam

Husseins Iraq and Ils North Korea) was a member of an axis of evil, arming to threaten the

peace of the world who aggressively pursues weapons [of mass destruction] and exports

terror, while an unelected few repress the Iranian people's hope for freedom.1 This rhetorical

posturing heightened world-wide concern of possible military action against Iran on the part of

the United States following twenty years of difficult diplomatic relations. The Bush

administrations bellicose stance with Iran, however, was not the product of traditional

ideological enmity between the two nations; instead, as John-Hopkins Professor and former

Oxford Fellow Azar Nafisi asserts, the United States and Iran have undertaken a policy of

mutually assured misunderstanding, whereby popular social complexity has given way to

political mistrust and cultural generalization as the baseline for understanding.2 But what has

brought the United States and Iran to its current state of affairs?

In this paper, I will trace the diplomatic relationship between the two countries since the

turn of the 20th Century in an attempt to answer this question. To begin, I will briefly look back

to the origins of U.S.-Iranian relations during the Post-Ottoman British Mandate period. To

follow, I will discuss the successful 1953 CIA sponsored coup against Prime Minister

Mohammad Mossedegh, regarded by the United States as the pinnacle of Cold War covert

operations against the spread of Soviet influence, but by the Iranian people as a dramatic

1
MSNBC.com, Full text of 2002 State of the Union speech as delivered by President George W. Bush, Jan. 29,
2002, http://www.msnbc.msn.com/id/16671210/ns/politics-2007_state_of_the_union/
2
A. Nafisi, Mutually Assured Misunderstanding?, Frontline, http://www.pbs.org/wgbh/pages/frontline
/shows/tehran/axis/nafisi.html

example of imperialist treachery by the West Continuing on, I will take a look at United States

policy towards Iran during the Carter and Reagan administrations, paying particular attention to

the Islamic Revolution of 1979, Iranian support for international terrorism and the United States

role in the Iraq-Iran war. Finally, I will discuss relations since the end of the Cold War with

special regard to Irans nuclear aspirations and their status in the ongoing United States war of

terror.

Beginning around the turn of the 20th Century, the United States flourished into a world-

power based on its burgeoning economy. During this period, Iran was under continual political

duress from both Great Britain and Imperial Russia; many Iranians desired to be free from

outside influence and struggled against imperialists in an attempt to democratize and modernize

Persia. Beginning in 1905 and lasting until 1911, Iran underwent a constitutional revolution

which received open support from American businessmen and idealists. In 1909, Howard

Baskerville, a Presbyterian mission teacher in Tabriz, Iran, was killed by Royalist Persian Troops

after raising a small volunteer constitutionalist force to break a siege of the city. For his

sacrifice, Baskerville was dubbed the American Lafayette of Iran3 and enshrined as an

enduring hero of Iranian democracy.

In 1911, the recently established Persian Parliament turned to the American William

Morgan Schuster to order the finances of Iran. Unfortunately, Schusters appointment angered

the perennial regional powers and after he boldly confiscated the property of the Shahs brother

(a Russian collaborator) at the behest of the parliament, Schuster was forced to resign from

Persia. The fallout of this episode left a politically weakened Persian state, but an overall

3
John H. Lorentz, Historical Dictionary of Iran (Scarecrow Press, Lanham, Maryland, 1995).

friendly disposition between the governments and people of Persia and the United States was

established as the United States came to be viewed as an important non-Anglo-Russian ally.

Schuster would latter go on to write in his book The Strangling of Persia, In the endeavor to

repay the debt of gratitude imposed on me through their confidence in my purposes and by

their unwavering belief in my desire to serve them for the regeneration of their nation, this

book is dedicated4; in this way Schuster made plain the democratic ideals the America public

hoped for the Iranian people. But with the coming of the U.S. economic boom of the 1920s, this

amicable relationship would be jeopardized by oil interest. In response to increasing Anglo-

French interests in the region following WWI, Reza Shah, who usurped the Peacock Throne in

1921, appointed the American Arthur Millspaugh as his financial chief, with the mission of

stabilizing the Iranian economy. Unfortunately, the American delegation chaffed the local

culture, and a U.S. domestic oil scandal led to accusations by Persian Nationalists of American

duplicity in achieving Iranian oil rights.5 Millspaughs stay tensed the relationship of the two

countries and led many Iranians to perceive the United States as being no different than other

imperialists. Despite huge sums of aid provided by the United States in his efforts to

industrialize Iran during the 1930s, Reza Shah would establish close ties with Nazi Germany

leading up to WWII.

Following the defeat of the Axis Powers in 1945, the United States, along with Great

Britain and the Soviet Union, assumed the role as a policeman, charged with maintaining a

4
W. Morgan Shuster, The Strangling of Persia, 1st edition, 3rd impression (T. Fisher Unwin, London, 1913).
5
R. D. Schulzinger U.S. Diplomacy since 1900 (Oxford University Press, New York, New York, 2008), 91-92.

fragile peace.6 It was in this capacity that America would reintroduce itself onto the Iranian

political scene. Early in the Second World War, Reza Shah was forced to abdicate in favor of his

pro-Ally son Reza Shah Pahlavi. Pahlavi however found difficulties dealing with a growing

Iranian nationalist movement and its bid for greater democratic reform. By 1950, the Swiss

Educated Doctor Mohammad Mossedegh had formed a coalition within the Majlis and was

appointed Prime Minister of Iran by the Shah. Of primary importance to Mossedegh was the

nationalization of the British owned Anglo-Iranian Oil Company in order to rectify the domestic

economic depression. On June 21, 1951, Mossedegh announced:

Our long years of negotiations with foreign countries have yielded no results... with the

oil revenues we could meet our entire budget and combat poverty, disease, and

backwardness among our people 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 independence. 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.7

This move enraged the British; in response, His Majesties government embargoed Iran and

fervently sought the cooperation of the other Western powers. President Truman attempted to

reconcile the parties by brokering a compromise through the diplomacy of George McGhee, but

6
F. D. Roosevelt and J. Stalin, Roosevelt and Stalin Discuss the Four Policemen at the Teheran Conference, 1943, in
Major Problems in American Foreign Relations, Volume II: Since 1914, ed. Dennis Merril and Thomas G. Paterson
(Wadsworth, Boston, Massachusetts, 2010, 157-159.
7
M. Fateh, Panjah Sal-e Naft-e Iran, p. 525.

neither the British nor Mossedegh would accept terms. The situation alarmed Truman, as he

believed that the hostile posturing of the two governments might fracture crucial alliances

against the spread of Soviet Communism.

Much to the chagrin of the English, President Truman sent Averell Harriman, a diplomat

of European experience, as a special envoy to Iran in a last ditch attempt to restore cordiality

through mediation. With Mossedeghs begrudged approval, the diplomat traveled to Tehran,

arriving to shouts of Death to Harriman.8 This, however, would not be an isolated incident

Iranian nationalism had taken hold of the popular majority and was embraced by religious

leaders. When seeking to enlist the support of the influential Ayatollah Khasani in swaying

Mossedegh, Harriman was assailed by a veiled threat from the holy-man and America denounced

as the enemy of Iran for attempting to reconcile it with Britain.9 Despite this failed negotiation,

the Truman administration, and even Eisenhower at first, would continue to discourage British

military intervention and advocate honorable resolution favoring both English oil interest and

Iranian nationalism. But not all facets of U.S. foreign policy worked under the pretext of

successful arbitration the Central Intelligence Agency had plans of its own.

Fearing the possible assistance of Iranian communists by the Soviet Union and being

convinced of the inability of Mossedegh government to resist Communist advancement, the CIA

and the British SIS began plotting during the waning years the Truman presidency to oust the

Iranian Prime Minister. With the ascent of Eisenhower to the U. S. Presidency, the Dulles

8
S. Kinzer, All The Shahs Men An American Coup and the Roots of Middle East Terror (John Wiley & Sons,
Hoboken, New Jersey, 2008), 101.
9
Kinzer, 106-107.

brothers, John and Allen, exercised their respective powers as Secretary of State and CIA

Director to urge the Commander and Chiefs approval of Operation Ajax the overthrow of

Prime Minister Mossedegh. The CIA appointed Kermit Roosevelt, the grandson of President

Theodore Roosevelt, to be the lead for the coup operation and by the time Roosevelt arrived in

Tehran in July of 1953, the stage of social unrest had been set. The CIA and SIS had spent a

good deal of time and money in an attempt to politically isolate Mossedegh and alienate

important members of his parliamentary coalition. By the time of the coup, the aforementioned

Ayatollah Kashani had begun to fiercely criticize the Iranian leader.10 The overthrow, however,

was not without incident the first attempt failed, and only by the tireless efforts of Roosevelt in

day proceeding was Mossedegh deposed. Roosevelt bribed and manipulated the conflicting

parties of Iranian politics to take to the streets in protest, creating a scene of anarchy and social

unrest; when the time was right, Roosevelt put forth General Fazlollah Zahedi, the Royalist Chief

of Police, to quell the rioting and restore order. Mossedegh was besieged but escaped capture for

a time, eventually surrendering to Zahedi and brought to trial after the triumphant return of Reza

Shah Pahlavi, who had fled Iran during the chaotic events leading up to the coup. In was

popularly asserted that the coup was launched as a counter to Mossedeghs efforts to depose the

Shah and establish dictatorial rule; Mossedegh was relegated from national hero to a national

pariah.11 Roosevelt returned to the U.S. and was decorated for his successful overthrow of a

democratically elected head of government in favor of an increasingly autocratic monarch, a fact

which would come to haunt U.S.-Iranian relations starting in the late 1970s.

10
S. Kinzer, 159.
11
S. Kinzer, 188-190.

 From the period of 1953 to 1979, serious attention was paid to Iran by the United States

government the oil fiasco which had brought Iran to the fore of international politics was

resolved in 1954, with American oil companies receiving a sizable 40 percent share, while Reza

Shah Pahlavis staunch opposition to communism led American leaders to view Iran as a key

ally against the Soviet threat,

We look upon Iran's strength as an extension of our [the U.S.s] own strength, and Iran

looks upon our strength as an extension of theirs. We derive mutual benefit from this close

relationship the Shah is very gracious in his attitude toward Americans this is

something that he didn't have to do, but it was just an extra demonstration of how valuable

they consider our friendship with them I would like to say, in closing, that we look upon

Iran as a very stabilizing force in the world at large. We don't fear the future when we

have friends like this great country.12

These sentiments, spoken by Jimmy Carter during a televised toast to the Shah, would fall on the

deaf ears of an Iranian people languishing under civil repression and brutal political oppressions.

While the President lauded the friendship of the two nations, Iranian dissidents, students and

religious leaders denounced the hypocrisy, proclaiming the United States to be a Great Satan

and an oppressor and pointing to the hollowness of Carters Human Rights agenda.13

So in January of 1979, the long established American diplomatic relationship with Iran

came to an abrupt end, when the Shah, embroiled in domestic unrest, fled into exile and was

12
The American Presidency Project, Toasts of the President and the Shah at a Dinner Honoring the Shah
November 15, 1977, http://www.presidency.ucsb.edu/ws/index.php?pid=6938
13
M. B. Oren, Power, Faith and Fantasy (W. W. Norton & Company, New York New York, 2007), 545.

deposed by the Islamist Cleric Ayatollah Khomeini. Following the establishment of the Islamic

Iranian Republic, Carter went on to acknowledge the incapability of the United States in dealing

with the anti-American regime. Relations became openly hostile when later that year, the

President offered asylum to the Shah in order to receive cancer treatment; the Iranian Republic

took offense to this seemingly affable offer, accusing the United States of harboring a tyrant and

criminal. Driven to action by anti-American and religious fervor, on November 4, 1979, Iranian

students stormed the United States Embassy in Tehran, seizing 66 Americans. Carter responded

by attempting to appeal to the Islamic Republic via the United Nations, but was sternly

repudiated by Khomeini. Believing he was left with no other choice, Carter ceased all relations

with Tehran and moved to use force. In April, 1980, Operation Eagle Claw was launched in an

attempt to rescue the American hostages; the helicopter raid was a disastrous failure, resulting in

the death of eight U.S. Commandoes and international embarrassment for the United States. In

the end, after 444 days of captivity, Carter negotiated the release of the American hostages

through financial means, but the damage to Americas credibility in Southwest Asia had been

done; its hegemony undermined.14

When Ronald Reagan came to the White House in 1981, nationalism in the Middle East

had reached its boiling point. Even more daunting was the rising influence of the Soviet Union

on the regions affairs Gaddafi in Libya and Hussein in Iraq were of considerable concern. To

exacerbate the volatility in the region, Iran began its state sponsorship of Islamist terrorist groups

such as Hezbollah, who frequently came under suspicion for brutal attacks against American

targets during the 1980s, such as the 1983 bombing of the Marine Barracks in Beirut that

14
M. B. Oren, 546-548.

resulted in loss of 241 Americans.15 These factors, coupled with the Carter administrations

botched military intervention and support for Iraqi aggression towards Iran, left Reagan in a

precarious diplomatic situation with the Islamic Republic during his presidency intimidate or

mollify. The wave of terrorism targeting Americans during the 1980s seemed to be impervious

to U. S. economic sanctions and military posturing and this profoundly troubled the President.

With the help of the CIA, Reagan would undertake to transfer missiles (arms desperately needed

by Iran in its ongoing war with Iraq) via Israel to moderates within the Iranian government in

exchange for American hostages taken by Hezbollah in Lebanon. The scheme fell through as

Iran failed to restrain terrorist activities in Lebanon and began to use American supplied weapons

to attack Kuwaiti oil shipments, prompting the U.S. to confront Iran militarily. All the while, the

United States continued to supply arms to Iran, using the funds to support anti-communist

revolutionaries in Nicaragua, and at the same time provided arms to Iraq to wage war against

Iran. To aggravate the situation, the arms sale was revealed to the American press and would

become the infamous Iran-Contra scandal. As Michael Oren points out in his book Power, Faith

and Fantasy, The same Reagan administration famous for steering a straight-forward course in

its policies toward the Soviet Union was now notorious for running circles in the Middle East.16

For this reason, U.S.-Iranian diplomatic relations remained cool even after the fall of

Communism in 1989.

15
M. B. Oren, 551-555.
16
M. B. Oren, 561.

10

 Despite delicate relations following the Iraqi-Iranian ceasefire in 1988, U.S. trade with

the Islamic Republic steadily increased up until 199517, when President Clinton, suspicious of

Irans nuclear energy aspirations, urged Congress to sanction a full embargo against Iran. This

move did not receive the full support of the international community, and by 1998, reformist

leadership took governmental control in Iran. Iranian President Mohammad Khatami called for

dialogue between civilizations going so far as to juxtaposition American and Iranian forms of

Democracy in order to draw similarities This easing of relations was short lived as there was a

conservative backlash to Khatamis reforms within Iranian politics18; by 2001, the United States

came to regard Iran as a rogue nation. Following the attacks of 9/11, Iran was named a charter

member of the axis of evil by President George W. Bush, lambasting the Islamic Republic for

it state support of terrorism and declaring them an enemy in Americas war of terror.19 During

the U.S.s twin wars in Iraq and Afghanistan, Iran has served as a safe haven for Islamist

extremists while defiantly refusing to cooperate with the International Atomic Energy Agency.20

For its part, the United States has continued to pursue a hard-line approach with Iran on these

issues and the future of positive U.S.-Iranian foreign relations looks bleak.

In closing, what can be learned from this concise overview of perhaps one the United

States most fickle and problematic liaisons? I believe that the ill-will shared by the two

countries is not the product of some fundamental, ideological incongruity inherent to the

17
N. R. Keddie, Modern Iran (Yale University Press, 2003), p.265.
18
N. R. Keddie, p.272.
19
MSNBC.com, Full text of 2002 State of the Union speech as delivered by President George W. Bush, Jan. 29,
2002, http://www.msnbc.msn.com/id/16671210/ns/politics-2007_state_of_the_union/
20
IAEA.org, IAEA and Iran, http://www.iaea.org/NewsCenter/Focus/IaeaIran/iaea_reports.shtml.

11

Christian/Muslim worldview. As the American hero of Iran Walter Baskerville once remarked,

The only difference between me and these people is my place of birth, and this is not a big

difference.21 Therefore, what is left is an inability for either government to come to terms with

their own sense of security in the 21st Century, a product of the U.S fear during the Cold War

coupled with disserved but self-immolating Iranian mistrust towards American policy. Sadly,

this political bantering has served to fuel cultural misunderstanding and morphed the current

crisis into a war of worlds, Islam versus the West, Good versus Evil.

21
S. Kinzer, Reset: Iran, Turkey, and America's Future (Times Book New York, New York, 2010), 5.

12

 Bibliography

MSNBC.com, Full text of 2002 State of the Union speech as delivered by President George W. Bush, Jan. 29,
2002, http://www.msnbc.msn.com/id/16671210/ns/politics-2007_state_of_the_union/

A. Nafisi, Mutually Assured Misunderstanding?, Frontline, http://www.pbs.org/wgbh/pages/frontline

/shows/tehran/axis/nafisi.html.

John H. Lorentz, Historical Dictionary of Iran (Scarecrow Press, Lanham, Maryland, 1995).

W. Morgan Shuster, The Strangling of Persia, 1st edition, 3rd impression (T. Fisher Unwin, London, 1913).

R. D. Schulzinger U.S. Diplomacy since 1900 (Oxford University Press, New York, New York, 2008).

F. D. Roosevelt and J. Stalin, Roosevelt and Stalin Discuss the Four Policemen at the Teheran Conference, 1943,
in Major Problems in American Foreign Relations, Volume II: Since 1914, ed. Dennis Merril and Thomas G.
Paterson (Wadsworth, Boston, Massachusetts, 2012).

M. Fateh, Panjah Sal-e Naft-e Iran.

S. Kinzer, All The Shahs Men An American Coup and the Roots of Middle East Terror (John Wiley & Sons,
Hoboken, New Jersey, 2008).

The American Presidency Project, Toasts of the President and the Shah at a Dinner Honoring the Shah
November 15, 1977, http://www.presidency.ucsb.edu/ws/index.php?pid=6938

M. B. Oren, Power, Faith and Fantasy (W. W. Norton & Company, New York New York, 2007).

N. R. Keddie, Modern Iran (Yale University Press, 2003),

IAEA.org, IAEA and Iran, http://www.iaea.org/NewsCenter/Focus/IaeaIran/iaea_reports.shtml.

S. Kinzer, Reset: Iran, Turkey, and America's Future (Times Book New York, New York, 2012).

13