A 'great venture':
overthrowing the government of Iran

by Mark Curtis From Lobster 30

This is a slightly abridged version of part of chapter four of Mark Curtis's book The Ambiguities of Power: British Foreign Policy since 1945 (Zed Press, 1995).

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In August 1953 a coup overthrew Iran's nationalist government of Mohammed Musaddiq and installed the Shah in power. The Shah subsequently used widespread repression and torture in a dictatorship that lasted until the 1979 Islamic revolution. The 1953 coup is conventionally regarded primarily as a CIA operation, yet the planning record reveals not only that Britain was the prime mover in the initial project to overthrow the government but also that British resources contributed significantly to the eventual success of the operation. Two first-hand accounts of the Anglo-American sponsorship of the coup - by the MI6 and CIA officers primarily responsible for it - are useful in reconstructing events. (1) Many of the secret planning documents that reveal the British role have been removed from public access and some of them remain closed until the next century - for reasons of 'national security'. Nevertheless, a fairly clear picture still emerges. Churchill later told the CIA officer responsible for the operation that he 'would have loved nothing better than to have served under your command in this great venture'. (2)

In the 1950s the Anglo Iranian Oil Company (AIOC) - later renamed British Petroleum - which was managed from London and owned by the British government and British private citizens, controlled Iran's main source of income: oil. According to one British official, the AIOC 'has become in effect an imperium in imperio in Persia'. Iranian nationalists objected to the fact that the AIOC not only made revenues from Iranian oil 'greatly in excess of the revenues of the Persian government but [it] dominates the whole economic life of Persia, and therefore impairs her independence'. (3) The AIOC was recognised as 'a great foreign organisation controlling Persia's economic life and destiny'. The British oil business fared well from this state of affairs; the AIOC made £170 million in profits in 1950 alone. (4)

Iranians could also point to AIOC's effectively autonomous rule in the parts of the country where the oilfields lay, its low wage rates and the fact that the Iranian government was being paid royalties of 10% or 12% of the company's net proceeds, whilst the British government received as much as 30% of these in taxes alone. (5) Shown the overcrowded housing afforded to some of the AIOC workers, a British official commented: 'Well, this is just the way all Iranians live'. (6)

Britain's Ambassador in Tehran commented that 'it is so important to prevent the Persians from destroying their main source of revenue... by trying to run it themselves... The need for Persia is not to run the industry for herself (which she cannot do) but to profit from the technical ability of the West'.(7) The British Minister of Fuel and Power explained that 'in the case of a mineral like oil [the Iranians] are of course morally entitled to a royalty' but to say 'that morally they are entitled to 50%, or... even more of the profits of enterprises to which they have made no contribution whatever, is bunk, and ought to be shown to be bunk'. (8)

The British priority was to support political 'stability' in the country, in effect by aiding Iranian parliamentarians and Prime Ministers 'to preserve the existing social order from which they profit so greatly' (9) - as did, it might be added, British oil interests. One difference with the National Front (of which Musaddiq was the leader)was that its members were, according to the Ambassador in Iran,'comparatively free from the taint of having amassed wealth and influence through the improper use of official positions; they can therefore attack the majority deputies, few of whom are in the same happy condition without fear of dangerous counter-attacks'. (10)

Origins

The origin of British planning to aid the overthrow of Musaddiq lay in his decision to nationalise oil operations in Iran, which was passed into law in May 1951, the month after he became Prime Minister. In the dispute that followed, Musaddiq offered to compensate the AIOC but Britain demanded either a new oil concession or a settlement that would compensate for loss of future profits. 'In other words', according to Iranian scholar Homa Katouzian,'the Iranians would have had either to give up the spirit of the nationalisation or to compensate the AIOC not just for its investment but for all the oil which it would have produced in the next 40 years'. (11) Nationalisation and the offer of compensation were perfectly legitimate in international law though this did not appear to be relevant in guiding subsequent British actions. 'If Musaddiq seemed to be inflexible', Katouzian comments further, 'it was because he insisted on basic principles which would have been observed if the dispute had been between two equal nations'. (12) It was a fatal misunderstanding for which he - and one might add ultimately the Iranians - paid dearly. 'Persian public opinion', the British Ambassador commented, 'is unanimous in rejecting the [British] offer'. (13) But Britain did 'not consider that a deal on acceptable terms can ever be made with' Musaddiq'. (14) According to the Foreign Office's description of the US State Department's view, 'a reasonable solution with Musaddiq is impossible': nevertheless, it added ominously, 'there is hope of a change which would bring moderate elements into control'. (15)

The options

A number of options were available for removing the threat posed to British oil interests. First, the Chiefs of Staff observed that 'the simplest method of bringing the Persians to heel might well be simply to stop the production and export of oil'. This the AIOC subsequently did, depriving Iran of its main source of income until the 1953 coup, even though, as the Chiefs of Staff had noted, 'the effect might be to bankrupt Persia thus possibly leading to revolution'. (16) Other, mainly US, oil companies aided the policy by refusing to handle Iranian oil, 'principally to prevent other oil-exporting countries... from learning a "bad" lesson from Iran's example', Katouzian comments; (17) an early example of the 'domino theory'.

The second dimension of British policy was to exert pressure, and begin covert planning, to install 'a more reasonable government', as Foreign Secretary Eden put it. (18) 'It has been our objective for some time to get Sayyid Zia appointed Prime Minister', the Foreign Office noted in September 1951. (19) This was a man who had 'no popular support' and whose appointment 'was likely to provoke a strong public reaction',according to Iranian academic Fakhreddin Azimi. (20) But Zia had the quality of being 'the one man who would be able, and anxious, to get a reasonable oil settlement with us' and adopt a long-term policy of 'development and reform which is essential for Persia's future stability', one Foreign Office memorandum noted. (21)

The third option was direct military intervention. The military occupation and holding of the area around Abadan - the site of the world's largest oil refinery and the centre of AIOC's operations - 'would demonstrate once and for all to the Persians British determination not to allow the... AIOC to be evicted from Persia and might well result in the downfall of the Mussadiq regime and its replacement by more reasonable elements prepared to negotiate a settlement'. Also, 'it might be expected to produce a salutary effect throughout the Middle East and elsewhere, as evidence that United Kingdom interests could not be recklessly molested with impunity'. (22) Plans were thus laid for war against Iran. It was recognised, for instance, that 'on Abadan island the Persians now had four infantry battalions, a naval and marine garrison of some 1200 men, and a dozen or so modern American tanks'. (23) This option was viewed by the Foreign Office, however, as 'quite impracticable' because of 'the risk that the Persians could effectively resist the comparatively small number of troops which could be brought in quickly'. (24) The Foreign Secretary and the Defence Minister of the then Labour government both favoured the use of military force to seize the oil installations. The option of military intervention was kept open until September 1951, when the British government finally decided on the evacuation of British personnel instead. (25)

The Churchill government

Upon coming to office the following month, Churchill berated his predecessors 'who had scuttled and run from Abadan when a splutter of musketry would have ended the matter'. (26) 'If we had fired the volley you were responsible for at Ismaila at Abadan', Churchill explained to his Foreign Secretary, Eden,'none of these difficulties........would have occurred'. (27) (The reference was to the British action at the town of Ismaila, in Egypt in January 1952. After an assault by Egyptian rebels on a British military base, Britain occupied the town of Ismaila, surrounded the police headquarters and then proceeded to kill fifty people and wounding a hundred before the surrender. (28) In Iran, however, despite Labour's inaction, Churchill noted a few months into his term that 'by sitting still on the safety valve and showing no weariness we are gradually getting them into submission'. (29)

Covert operations begin

'Our policy', a British official explained, 'was to get rid of Mossadeq as soon as possible'. (30) Thus the Labour government initiated the plan to organise the overthrow of the Iranian Prime Minister. In June 1951, shortly after Musaddiq's oil nationalisation decree, Ann Lambton, a lecturer at the School of Oriental and African Studies in London, had suggested in a conversation with a Foreign Office official 'covert means... to undermine the position of Mr. Moussadek' and that the 'ideal man to do it would be Dr. Zaehner', an Oxford lecturer who had been 'extremely successful in covert propaganda in 1944' in Iran. (31) Zaehner was swiftly despatched to Iran by the Labour government to aid the fall of Musaddiq, for which he was provided with considerable sums of money. (32)

After the failure of the oil negotiations the main British negotiator advised the Shah that the 'only solution' was 'a strong government under martial law and the bad boys in prison for two years or so'. (33) The Ambassador in Tehran concurred, noting that 'if only the Shah can be induced to take a strong line there is a good chance that Musaddiq may be got rid of'. 'Any new government that is worth its salt' would then 'have to take drastic action against individual extremists'. (34) A fortnight later, in September 1951, the embassy was noting its preference 'for a change of government to be engineered'. (35) An adviser at the British embassy, Colonel Wheeler, explained on 29 September that 'combined Anglo-American action could, of course, have removed [Musaddiq] at any time during the past six months...Given a united Anglo-American front, a change of government could almost certainly be effected without difficulty or disturbance'. (36) In November, the Foreign Office official who had discussed 'covert means' with Lambton reported that 'our.....unofficial efforts to undermine Dr. Mussadiq are making good progress'. (37)

With 1952 came the British preference for 'a non-communist coup d'etat preferably in the name of the Shah. This would mean an authoritarian regime', (38) the embassy in Tehran noted. On 28 January the Foreign Office declared that 'the only hope of getting rid of Dr. Mussadiqlies in a coup d'etat, provided always a strong man can be found equal to the task'. It also observed that the Ambassador in Iran believed that this 'strong man' would 'rule in the name of the Shah'. 'Such a dictator', the Foreign Office continued, expressing the Ambassador's preference, 'would carry out the necessary administrative and economic reforms and settle the oil question on reasonable terms'. In fact, the Ambassador 'seems to favour the authoritarian coup d'etat'. 'An oil settlement to have any chance of acceptance by Dr. Musaddiq would no doubt mean an appreciable departure from our principles', the Foreign Office noted. It then stated who such a reasonable new leader might be: General Zahidi, who was to become the Prime Minister after the coup. (39)

By March 1952, the British embassy was observing that, unfortunately, the army was 'unlikely to take overt action against Musaddiq' but that its attitude might become 'more positive'. (40) The following month, the Shah was reported as being 'proud' of his resisting British pressures for 'precipitory action', (41) since Britain had 'made it abundantly clear that we desire the fall of Musaddiq as soon as possible'. (42) In July and August the embassy continued to note that General Zahidi 'might well be adequate' for presiding over a coup; (43) in fact as an alternative to Musaddiq, Zahidi was 'the only one immediately in sight'. (44) On 4 August embassy official Sam Falle suggested that 'we propose to the Americans that another member of the National Front be brought into power', before noting that 'this proposal has recently been made by the State Department'. 'We should leave the name-suggesting to the Americans'. 'It should not be difficult to bring the Americans' candidate... to power', the minute states. Then, in order to secure an acceptable oil agreement, this candidate would in turn be removed 'in favour of someone more prepared to reach agreement with us'. This strategy 'should be easier than the removal of Mussadiq who is, unfortunately, regarded by many of the ignorant as a messiah'. (45) Falle met Zahidi on 6 August and recorded that 'he is increasing his activity and has the courage to put himself up as a candidate for the premiership in these dangerous times... I understand that he has contacts, probably indirect, with the Americans and I suggested to him that there would be no harm in making his claims further known to the Americans'. Zahidi, Falle concluded, 'does seem to offer some alternative to Mussadiq'. (46) The Ambassador then confirmed that Zahidi 'will make his own contacts with American [sic] embassy and does not wish to appear to be our candidate'. (47)

Joint CIA-MI6 operation

In October 1952, the Iranian government closed down the British embassy (claiming - correctly - that certain intrigues were taking place there), thus removing Britain's cover for its covert activities. An MI6 and Foreign Office team met with the CIA in November and proposed the joint overthrow of Iran's government based on Britain's plans. (48) Agents of the British in Iran had been provided with a radio transmitter with which to maintain contact with MI6, and the head of the MI6 operation put the CIA in touch with other useful allies in the country. (49) British pay-offs had already secured the cooperation of 'senior officers of the army and police, deputies and senators, mullahs, merchants, newspaper editors and elder statesmen, as well as mob leaders'.'These forces', explained the MI6 officer in charge of the British end of the operation, 'were to seize control of Tehran, preferably with the support of the Shah but if necessary without it, and to arrest Musaddiq and his ministers'. (50) On 3 February 1953 a British delegation met with the CIA director and the US Secretary of State and decided to send the head of the CIA's operation to investigate the situation in Iran. (51) On 18 March 'the CIA was ready to discuss tactics in detail with us for the overthrow of Musaddiq' and it was formally agreed in April that General Zahidi was the acceptable candidate to replace him. (52) By then, destabilisation other than by bribery was taking place and British and US agents were also involved in plans to kidnap key officials and political personalities. In one instance the Chief of Police was abducted, and finally tortured and murdered. (53)

The coup decision is taken

The go-ahead for the coup was finally given by the US in late June - Britain by then already having presented a 'complete plan' to the CIA (54) - and Churchill's authorisation soon followed, the date being set for mid-August. (55) That month, the head of the CIA operation met with the Shah, the CIA director visited some members of the Shah's family in Switzerland, whilst a US army general arrived in Tehran to meet 'old friends', among them the Shah and General Zahidi. (56)

When the coup scenario finally began, huge demonstrations proceeded in the streets of Tehran, funded by CIA and MI6 money, $1 million dollars of which was in a safe in the US embassy (57) and £1.5 million which had been delivered by Britain to its agents in Iran, according to the MI6 officer responsible for delivering it. (58)

According to then CIA officer Richard Cottam, 'that mob that came into north Tehran and was decisive in the overthrow was a mercenary mob. It had no ideology. That mob was paid for by American dollars.' (59) One key aspect of the plot was to portray the demonstrating mobs as supporters of the Communist Party - Tudeh - in order to provide a suitable pretext for the coup and the assumption of control by the Shah. Cottam observes that agents working on behalf of the British 'saw the opportunity and sent the people we had under our control into the streets to act as if they were Tudeh. They were more than just provocateurs, they were shock troops, who acted as if they were Tudeh people throwing rocks at mosques and priests'. (60) 'The purpose', Brian Lapping explains, 'was to frighten the majority of Iranians into believing that a victory for Mussadeq would be a victory for the Tudeh, the Soviet Union and irreligion'. (61)

The head of the CIA operation also sent envoys to the commanders of some provincial armies, encouraging them to move on to Tehran. (62) In the fighting in the capital, 300 people were killed before Musaddiq's supporters were defeated by the Shah's forces. AUS general later testified that 'the guns they had in their hands, the trucks they rode in, the armoured cars that they drove through the streets, and the radio communications that permitted their control, were all furnished through the [US] military defence assistance program'. (63)

'All in all', US Iran analyst Barry Rubin comments, 'only five Americans with a half-dozen Iranian contacts had organised the entire uprising'. (64) The British input, however, had clearly been significant. One Iranian agent of the British - Shahpour Reporter, who subsequently served as adviser to the Shah - was later rewarded with a knighthood, before becoming a chief middleman for British arms sales to Iran, in particular for the manufacturers of Chieftain tanks and Rapier missiles. (65) Two years after the coup, the head of the MI6 end of the operation became Director of the Royal Institute of International Affairs, one of Britain's leading 'independent' academic research institutes. (66)

A communist threat?

The customary explanation of the coup asserts that it occurred in response to an impending takeover by the Communist Party - Tudeh, which had close contacts with the Soviet Union -and therefore prevented the establishment of a Soviet-backed regime. A slight variation of the 'communist threat' scenario deems Musaddiq's government to have been increasingly reliant on the Tudeh to the extent that the latter were gaining ascendancy. (67) Neither of these two explanations can be properly substantiated.

In September 1952 the UK Ambassador noted that 'the communists have been opportunist rather than far-sighted [and] they have played a largely passive role, content to let matters take their course with only general encouragement from the sidelines...they have not been a major factor in the development of the Mussadiq brand of nationalism'. (68) In March 1953, a few months before the coup, the US EMBASSY stated that 'there was little evidence that in recent months the Tudeh had gained in popular strength, although its steady infiltration of the Iranian government and other institutions [has] continued'. (69) As for the Tudeh's attempting a coup, a State Department intelligence report of January 1953 noted that 'an open Tudeh move for power......would probably unite independents and non-communists of all political leanings and would result......in energetic efforts to destroy the Tudeh by force'. (70) Iranian scholar Fakhreddin Azimi concurs with this reasoning, noting that 'although the Tudeh had been successful in enlisting a number of officers, the military authorities were not unaware of this...The seizure of power by means of a coup was not part of Tudeh strategy, and it was also unlikely that the Russians... would endorse such a move. In any case, the state.....and the army......not to mention the religious establishment, were still capable of countering a Tudeh coup'. Musaddiq himself did not fear a communist coup 'but rather a right-wing royalist coup', like that which did occur, with important Anglo-American sponsorship. (71)

The alleged 'communist threat' was, however, used to great effect. The Foreign Office stated that 'it is essential at all costs that His Majesty's Government should avoid getting into a position where they could be represented as a capitalist power attacking a Nationalist Persia'. (72) In fact, the British consistently used this threat scenario to promote US interest in finally taking action against Musaddiq, since it had been US policy, much to Britain's consternation, previously to support Musaddiq as a counter to communist influence. (73) The British embassy in Tehran noted in August 1952 that, in proposing the overthrow of Musaddiq to the Americans, 'we could say that, although we naturally wish to reach an oil settlement eventually, we appreciate that the first and most important objective is to prevent Persia going communist'. (74) The MI6 officer believed 'the Americans would be more likely to work with us if they saw the problem as one of containing communism rather than restoring the position of the AIOC'. (75) The deliberate funding of demonstrators posing as Tudeh supporters also gives the game away as to the degree of seriousness with which the communist threat was actually feared. (76)

'Stability' is restored

'I owe my throne to God, my people, my army - and to you', the Shah told the head of the CIA operation responsible for installing him; by 'you' meaning the US and Britain. (77) Now that the 'dictator' had been installed in line with Foreign Office wishes, 'stability' could be restored, initially under the auspices of the favoured candidate for Prime Minister, General Zahidi. Thus the British understanding, outlined in 1951, that the Shah 'does not sufficiently check the members of his family and their entourage from interference in politics and their profitable incursions into business' and that 'the chief complaint of his political critics [is] that he wishes to monopolise power for himself', became a harsh reality. (78) An agreement was signed the year following the coup establishing a new oil consortium in which Britain and the US both had a 40% interest, and which controlled the production, pricing and export of Iranian oil. Britain's share was thus reduced from the complete control it had prior to Musaddiq but was nevertheless more than the latter's nationalisation plan had envisaged. The US, meanwhile, had gained a significant stake in Iranian oil and political influence in the country, a change of fortune which symbolised the relative power of the partners in the special relationship.

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Footnotes

1. C. M. Woodhouse, Something Ventured,(Granada, London, 1982); Kermit Roosevelt, Countercoup, (McGraw Hill, London 1979).

2. Roosevelt, p. 207.

3. D. Fergusson to R. Stokes, 3 October 1951, PRO, FO 371/91599

4. W. Roger Louis, The British Empire in the Middle East, 1947-1951: Arab nationalism, the United States and postwar imperialism, (Clarendon, Oxford, 1984), p. 682.

5. Homa Katouzian, Mussadiq and the struggle for power in Iran, (I. B. Tauris and Co., London, 1990), p. 139.

6. Barry Rubin, Paved with good intentions: the American experience and Iran, (Oxford University Press, Oxford, 1980), p. 67.

7. Shepherd to O. Franks, 2 October 1951, PRO, FO 371/91464

8. D. Fergusson to R. Stokes, 3 October 1951, PRO, FO 371/91599

9. G. Middleton to A. Eden, 25 February 1952, PRO, FO248/1531

10. F. Shepherd to H. Morrison, 15 March 1951, PRO, FO371/91454

11. Katouzian p. 144

12. Ibid. p. 145

13. G. Middleton to A. Eden, 23 September 1952, PRO, FO248/1531

14. F. Shepherd to Foreign Office, 26 January 1952, PRO, FO 248/1531

15. Foreign Office memorandum , 'Persia: the State Department's views', 16 April 1952, PRO, FO 371/98688

16. Chiefs of Staff Committee, Confidential Annex to COS(51) 81st meeting, 16 May 1951, PRO, FO 371/91460.

17. Katouzian p. 145

18. A. Eden,'Persia: Memorandum by the Secretary of State for Foreign Affairs', 5 August 1952, PRO, CAB 129/54/CP (52) 276

19. R. Bowker to Prime Minister, 2 September 1951, PRO, FO 371/91458

20. Cited in Fakhreddin Azimi, Iran: The Crisis of Democracy 1941-1953, (I. B. Tauris and co., London 1989), p. 251.

21. R. Bowker to Prime Minister, 2 September 1951, PRO, FO 371/91463

22. H. Morrison, 'Persia: Memorandum by the Secretary of State for Foreign Affairs', 20 July 1951, PRO, CAB, 129/46/CP (51)212

23. Chiefs of Staff Committee meeting minutes, 4 May 1951, PRO, FO 371/91458

24. Memorandum by G. Furlonge, 24 May 1951, PRO, FO371/91460

25. Louis p. 676

26. Brian Lapping, End of Empire, (Paladin, London, 1989), p. 264

27. Prime Minister to Foreign Secretary, 17 June 1952, PRO, FO 371/98600

28. Lapping p. 303

29. Prime Minister to Foreign Secretary, 17 June 1952, PRO, FO 371/98600

30. Lapping p. 266

31. E. Berthoud to R. Bowker, 15 June 1951, PRO, FO 371/91548

32. Azimi pp. 264-5; Lapping p. 265

33. Cited in Azimi p. 262

34. F. Shepherd to W. Strang, 11 September 1951, PRO, FO371/91463

35. Tehran to Foreign Office, 26 September 1951, PRO, FO371/91464

36. G. Wheeler to R. Bowker, 29 October 1951, PRO, FO371/91464

37. Memorandum to E. Berthoud, 2 November 1951, PRO, FO, 371/91609

38. Tehran to Foreign Office, 26 January 1952, PRO, FO371/98684

39. Foreign Office memorandum, 'Sir F. Shepherd's analysis of the Persian situation', 28 January 1952, PRO, FO 371/98684

40. G. Middleton to Foreign Office, 5 March 1952, PRO, FO 248/1531

41. Memorandum by Dr. Zaehner, 17 May 1952, PRO, FO 248/1531

42. Memorandum by Pyman, 17 April 1952, PRO, FO 248/1531

43. Tehran to Foreign Office, 28 July 1952, CAB 129/54/CP(52) 275

44. Memorandum by S. Falle, 2 August 1952, PRO, FO 248/1531

45. Memorandum by S. Falle, 4 August 1952, 1952, PRO, FO 248/1531

46. Memorandum by S. Falle, 7 August 1952, PRO, FO 248/1531

47. G. Middleton to Foreign Office, 7 August 1952, PRO, FO 248/1531

48. Lapping p. 270; Rubin p. 77

49. Lapping p. 269

50. Woodhouse p. 118

51. Rubin p. 78

52. Woodhouse p. 124

53. Katouzian pp 183-4; Azimi p. 320

54. Roosevelt p. 1

55. Lapping p. 271

56. Sephehr Zabih, The Mosadeq era: Roots of the Iranian Revolution, (Lake View Press, Chicago, 1982), pp. 124-5; Roosevelt pp. 146-55.

57. William Blum, The CIA: a forgotten history, (Zed Press, London 1986), p. 72; Rubin p. 82

58. Lapping p. 268

59. Ibid p. 274

60. Ibid. pp 273-4; see also Azimi p. 331

61. Ibid. p. 274

62. Katouzian p. 190

63. Blum p. 73

64. Rubin p. 84

65. Zabih, pp. 140-2

66. Woodhouse p. 138

67. See, for example, Brian Holden Reid, 'The"Northern Tier" and the Baghdad pact', in John Young (ed.), The foreign policy of Churchill's peacetime administration, 1951-1955, (Leicester University Press, Leicester, 1988), pp.165-6 and 168.

68. G. Middleton to A. Eden, 2 September 1952, PRO, FO 248/1531

69. US embassy Tehran dispatch, 19 May 1953, PRO, FO, 371/104566

70. Blum p. 70

71. See Azimi pp. 331-41

72. Foreign Office to Washington, 8 June 1951, PRO, FO 371/91459

73. Lapping p. 270; Katouzian p. 177

74. Memorandum by S. Falle, 4 August 1952, PRO, FO 248/1531

75. Woodhouse p. 110

76. AIOC documents discovered in June 1951 revealed that the company had actually been aiding the Tudeh press to render the latter's opposition to Mussadiq more effective. Katouzian p.115.

77. Roosevelt p. ix

78. F. Shepherd to H. Morrison, 21 May 1951, PRO, FO 371/91459


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