The Growth of American Power Through Cold and Hot Wars 319the profits paid to Iran over the previous fifty years. Iran, in fact, received less
in royalties than they had to pay the British in taxes. In 1948, 1949, and 1950,
Iran received 9, 13.5, and 16 million pounds in royalties, but paid 28, 23, and
50.5 million pounds in taxes. The British corporation did not even allow
Iranian officials to examine their financial books and unilaterally determined
the amounts of payments.^ The British made some minor concessions to Iran,
raising royalty payments from 22 to 33 cents per barrel, but the Iranians were
not impressed, particularly since the U.S. and Saudi Arabia had agreed to a a
50-50 split on its oil.
In November 1950, as political violence grew, Mossadegh’s group called
for the nationalization of the AIOC, taking it over, compensating the British,
and putting it under Iranian leadership. British attempts to compromise at
that point were too late and in March 1951 the majlis nationalized the British
company and the next month elected Mossadegh to the Prime Minister’s posi-
tion. The new Iranian leader had come from a well-known and well-off
Iranian family and was an “old-fashioned liberal” who was opposed to both
foreign interference in Iran and to Communism. Western media often mocked
him—he sometimes wore pajamas to meet visitors and wept at public events—
but it was his intent to nationalize oil that convinced the Americans and the
British to remove him from power. Since a 1946 showdown with the Soviet
Union to remove Russian troops after the war, the Americans had considered
Iran to be a vital interest in the Middle East, both to contain the Soviet Union
and because of oil. By the early 1950s, as the oil nationalization crusade in
Iran picked up steam, the Americans became more involved. In late 1951, the
AIOC had approached the British Secret Intelligence Service about getting
rid of Mossadegh, and then they asked the CIA to put together a coup. On
its own, the British company stopped Iran from selling its own oil on the
world market and caused its export earnings to drop from $400 million to just
$2 million between 1951 and 1953.
Mossadegh was under increasing pressure, from the British, the Americans,
and at home. In January, the he wrote to President Eisenhower asking the
U.S. to stop opposing his government, and accusing Washington of working
with the British to “strangle Iran with a financial and economic blockade.”
Iran, therefore, “had no choice” but to nationalize oil and remove the AIOC
operating there. Inside Iran, Mossadegh was under heavy pressure from vari-
ous political forces connected to or paid off by the AIOC and he began to