americans fought for iran

8/3/2019 Americans Fought for Iran

1/24

42 History EIR August 21, 2009

In the city o Tabriz in northern Iran, lies the tomb o a

young American missionary teacher who died 100 ago,

on April 19, 1909. I one visits this tomb, even today,

one might nd resh yellow roses placed beore it, or

the young man, whose name was Howard Baskerville,died the death o a martyr at the age o 24, and is re-

vered by many in Iran as the American who gave his lie

or an Iranian revolution known as the Persian Consti-

tutional Revolution. When announcing to his Americancolleagues his decision to join that revolution, he said

that Persias struggle was his. I am Persias.

The narrative o American-Iranian relations has

been dominated by the overthrow o a prime minister

and a hostage crisis. This article will tell a very dierent

story that takes place a century ago. It will deal with

Americans whose names do not appear in the history

books o their own country, but are very well known in

the history o Iran. These men worked in the tradition o

John Quincy Adams. They saw Irans struggle as they

knew their own: as one between Empire and a nationalsovereignty that protects their inalienable rights, or, as

John Quincy Adams once wrote, a contest between

inveterate power and emerging right.

They brought to their engagement with Iran the

spirit o a oreign policy best dened by Adams in a

speech on Independence Day, July 4, 1821: Wherever

the standard o reedom and independence has been or

shall be unurled, there will her heart, her benedictions,

and her prayers be. But she goes not abroad in search o

monsters to destroy. She is the well-wisher to the ree-

dom and the independence o all. She is the champion

and vindicator only o her own. She will recommend

the general cause, by the countenance o her voice, and

the benignant sympathy o her example. . . . Her glory is

not dominion, but liberty. Her march is the march o

mind. She has a spear and a shield; but the motto upon

her shield is Freedom, Independence, Peace. . . .This report will deal with an American advisory

mission, led by a young nancial-economic expert,

William Morgan Shuster, who, at the request o theIranian government to the United States government,

arrived in Iran in 1911 to reorganize the nancial ad-

ministration o the country. While the goal seemed to be

the relatively straightorward task o modernizing a

backward and underdeveloped country, the team ound

itsel, along with the Iranian people, conronted with

the ury o two mighty empires determined to ruthlessly

sabotage its eorts, and to crush Irans sovereignty andany hope or its progressive economic development.

This story elucidates the historic determination o

the Anglo-Dutch oligarchy to deploy all its power to

crush any eort by the United States to engage the na-

tions o Eurasia with a oreign policy premised on prin-

ciples dened by John Quincy Adams.

It also underlines the tragic act that the U.S. lack o

productive relations, or the past three decades, with

EIRHistory

Part 1

When ameicns FoughFo Ins Soveeignyby Den andomids


2/24

August 21, 2009 EIR History 43

one o the most important na-

tions on the Eurasian land-

mass, has been a ailing that

only serves the design o the

British Empire. Moreover, de-

nying the United States and

Iran mutually benecial rela-

tions is key to the empires

ability to keep all o Eurasia in

its thrall. This author believes

that, in the person o Shuster,

one nds a role model or the

policymaker who is concerned

with engaging Iran.

This report is in two parts.

Part 1, the main narrative,

connes itsel primarily to

events in Iran. Ater a short

elucidation o the relevant his-

tory prior to the arrival o the

Shuster mission, it deals with

mission itsel. The principal

sources are Shusters memoir o his eight months

in Iran, The Strangling o Persia,1 and ocial

documents as well as newspaper reports o the

time. Part 2, which will appear in a orthcoming

issue oEIR, deals with the Triple Entente and,

particularly, the Anglo-Russian Agreement. An

understanding o the strategic impact o this Brit-

ish-orchestrated policy which ultimately led tothe First World War, is essential to understand the

determination o the British to crush Iranian con-

stitutionalism in general, and the Shuster Mis-

sion in particular. Shuster, who wrote his memoir

in 1912, was ully aware o the missions signi-

cance.

Iran Between EmpiresIn the Uzi Gallery in Florence there hangs a por-

trait o Ismail I, the ounder o Irans Saavid dynasty.

Painted by a ollower o the noted Venetian artist Gen-tile Bellini, it attests to the infuence the Venetian

Empire, the mentor o the British Empire, had on the

Saavid court. Established in 1501, the Saavid dynasty

1. W. Morgan Shuster, The Strangling o Persia: A Story o European

Diplomacy and Oriental Intrigue (New York: The Century Company,

1912); available at http://www.archive.org/details/stranglingo-

pers00shusuot, and as a reprint rom Mage Publishers o Washington,

D.C., 2005.

was patronized by the Venetians as a counter to their

principal rival, the Ottoman Empire. Having its origins

in the Saaviya Su order, the Saavid regime combined

a group o Azari clans and Shia clergy, that transormed

Persia rom a predominantly Sunni Muslim country

into the largest Shia nation in the region. Here, theShah, through a powerul army, held sway over the

State, while the clergy, through the administration o

Sharia law, held sway over the people.

It has been suggested that Venice had a hand in the

creation o this dynasty, in an eort to create a powerul

state on the fank o the Ottoman Empire. Whether that

is true or not, certainly a powerul Shia state served

Venices geopolitical purpose. The act that it was o the

Mage Publishers

W. Morgan Shuster headed a U.S. delegation toPersia in 1911, to help the new government getits nances under controland withstandimperial intrigues. His memoir is shown here,along with a photo o the Shuster delegation and

other American ocials in Tehran. Shustersdeputy wrote to President Tat, the injection oMr. Shusters vigorous and upright personalityinto such a putrid mass, has created more stirand consternation than anything which hasoccurred in recent years. . . .


3/24


Shia branch o Islam, detested as a

heresy by all Sunnis, assured that it

would never ally against Venice with

the Sunni Ottoman Empire. Thus we

have the oundation o the British

Empires creation o the Arab-Ira-

nian rit, which was the basis or the

British inspiration o the Iran-Iraq

War (1980-88), at a point that the Is-

lamic Republic was being ormed in

Iran amidst bloody intrigue. This

process created a strategic ear o the

Arab world within Iran.

The English themselves became

involved in Iran, at the same time as

Venice. In 1550, the English created

the Muscovy Company, which, by

the end o that century, was busy

with an eort to trade with Persia,

through Russia via the Volga and the

Baltic, in an attempt to outfank the piracy o the Span-

ish, Venetians, Portuguese, French, and Dutch.

With the decline o the Saavid Empire by the end o

the 18th Century, Iran became a pawn in the Great

Game between the powerul Russian Empire to its

north, and the British Empire, with its domains in India,

to its east.

Ater a lapse o almost two centuries o intermittent

interest in exploiting Persia, in the middle o the 19th

Century, the threat o the Russian Empires expansiondeep into Central Asia was seen by the British as a

menace to their Indian colonies. The British then took a

very serious interest in the geopolitical importance o

Iran. Like Aghanistan, Iran was seen as a buer state

between British India and the Russian Empire. London

launched its rst war against Iran in 1856, on the pre-

text o orcing it out o the traditionally Persian-held

city o Herat in Aghanistan. This was done through

military occupation o the Persian city o Bushehr, on

the Persian Gul. Even ater the peace agreement, the

British remained in Bushehr, which became the mainentry point o British goods into the country. To protect

their economic interests, they eventually organized

their own military regiment, the Persian Rifes.

In the 19th Century, the British convinced the Shahs

o Persia to nance a royal liestyle or themselves by

selling the natural riches o their country. In 1872,

Baron Julius de Reuter, a British subject, received aconcession or a mere 40,000, giving him monopoly

rights to all railways, tramways,

mining concessions, construction o

irrigation and waterworks, and ex-

ploitation o state orests or 70

years, as well as a 25-year monopoly

over Persian Customs and rst option

on a concession or providing public

utilities.

Even the imperialist predator

Lord Curzon wrote that it was the

most complete and extraordinary

surrender o the entire industrial re-

sources o a Kingdom into oreign

hands that has probably ever been

dreamed o, much less accom-

plished, in history.2

Despite being appointed a Knight

o the Order o the Garter by Queen

Victoria, while on a visit to London

in 1873, the Shah had to cancel the

concession, because o both Russian and local popular

opposition. Nonetheless, by 1889, he was able to award

Reuter a banking concession, which led to the ounding

o the Imperial Bank o Persia, backed by a Royal Char-

ter rom Her Majestys government. The bank was

given the right to print Persian currency.

Reuter was ollowed by another British subject in

1901, William Knox DArcy, who was given an oilconcession that covered the entire land area o Persia,

exclusive o the ve Russian-dominated northern prov-inces. This became the Anglo-Persian Oil Company,

ounded in 1908; in 1913, with the aid o First Lord o

the Admiralty Winston Churchill, Her Majestys gov-ernment took over the controlling interests.

Thus were born the two corporations which were

central to British control o Iran or over hal a century,

until Prime Minister Mohammad Mossadegh national-

ized them in 1951.

The only modern bank in the land, the Imperial

Bank o Persia, penetrated the commercial lie o the

country, especially its merchant class, while Anglo-Per-sian oil dominated the southern region, where it culti-

vated ties with all the local tribes. The most important

tribe was the powerul Bakhtiaris, or which the British

created the Bakhtiari Oil Company, in order to conduit

2% o the prots to the tribal leaders.

2. George N. Curzon, Persia and the Persian Question (London,

1892).

Persias Shah Ismail I (1487-1524),painted by an unknown Venetian artist.Venice patronized the Saavid dynasty asa counter to the Ottoman Empire.


4/24


The Bear to the NorthSince the time o Peter the Great

(1672-1725), the Russian Empire

pushed south, seizing Persian terri-

tory in the Caucasus and Azerbai-

jan, and commercially penetrating

the northern Caspian Sea provinces

o Iran. It established its own bank,

the Banque dEscompte (the Loan

and Discount Bank), a subsidiary o

the State Bank o St. Petersburg,

while winning a concession to build

a highway between Jola and Tehran,

or the urther commercial penetra-

tion o the north o Persia. While the

British had their Persian Rifes, the

Russians established the Cossack

Brigade, which ormed the Shahs

Royal Guard and had all Russian o-

cers (the soldiers were Persians). It

was rom this Brigade that Reza

Khan began his career as a private

soldier, later ounding the Pahlavi

Dynasty in 1927, under British patronage.

By the end o the 19th Century, Russia and Great

Britain were the exclusive creditors o the Persian gov-

ernment. The loans they gave were never extended to

actually build anything, but only to partially ll the nor-

mally empty Persian Treasury; much o the money went

not only to pay or the royal liestyles o the Shah andthe grandees o the court, many o whom were in the

pay o the British or the Russians or both, but also or

the Russian ocers who commanded the Cossack Bri-

gade and the oreign advisors placed in the Persian gov-

ernment by Russia or Great Britain. While the purpose

o the loans was never tied to anything useul, their re-

payment was always very specic, usually tied to an

import tari; as soon as this tari was collected, upon

entry o the goods onto Iranian soil, it was deposited at

the Imperial Bank o Persia or the Banque dEscompte,

depending whether entry was in the British sphere oinfuence in the South or the Russian sphere in the

North. The head o the Persian Customs House, who

also controlled the accounts at the respective banks,

was always a European rom one o the lesser

powersusually Belgiumwho not only assured

payment o the Russian and British debt, but was able

to steal enough or himsel so he could retire in com-

ort.

The Americans Amid the ImperialistsBy the time the United States arrived on the scene,

Russia and Britain had all but established their respec-

tive spheres o infuence.

An Iranian attempt to establish relations with the

United States was initiated by Mirza Taqi Khan Amir-

Nezam, Prime Minister to Nasir al-Din Shah Qajar in1856. Also known as Amir Kabir, he was perhaps themost important statesman in Irans history. He ounded

the Dar al-Funun, Irans own version o Frances Ecole

Polytechnique.

But it wasnt until 1883 that the rst American min-

ister arrived in Tehran, Samuel Greene Wheeler Ben-jamin. Born in Greece, the son o missionaries, Benja-min was an artist, journalist, poet, and diplomat. In his

bookPersia and the Persians,3 Benjamin wrote that the

major obstacle to the progress o Persia is the continu-

ous rivalry between England and Russia, and the activeintererence o the latter with every movement which

tends to elevate Persia. Benjamin details how, through

a combination o orce and bribery, Russia sought to

absorb Iran into its empire, while the British schemed

to keep Russia at bay rom its Indian empireall at the

3. S.G.W. Benjamin, Persia and the Persians (Boston: Tickner & Com-

pany, 1887).

Iranian Historical Photograph Gallery, www.fouman.com

The Imperial Bank o Persia, chartered by the British monarchy in 1889, dominatedcommerce there or decades. When it reused loans or the development projectsShuster wanted, he attempted to bring in an American bank instead. Here, the Imperial

Banks Tehran headquarters in 1938.


5/24


expense o Irans sovereignty. I

one were asked whether the Per-

sians in their hearts avor either

side, he wrote, beyond a readi-

ness to accept their bribes, I

should emphatically reply that

they cordially hate both England

and Russia, and would give glory

to God i both could be abolished

rom the earth. . . .

For Benjamin, time was on

the side o Iran, or what any

power proposing to absorb

Persia must take into her calcula-

tions, is the act o the wonderul

national vitality o that country.

In this respect the Persians re-

semble the French. What Euro-

pean nation besides France would

be in her present prosperous con-

dition ater the convulsions and

calamities she has undergone within the past century?

Not once, but many times has Persia likewise been

overrun and apparently subdued. But ater each con-

quest she has thrown o her chains and arisen with re-

newed vigor and splendor.

As or Russia, looking two decades into the uture,

Benjamin wrote, she will always endeavor to dominate

Persia, until her internal needs and revolutions inevita-

bly demand all her attention, and orce her to give herundivided energies to the adjustment and regulation o

aairs at home.

Concerning the British Empire in India, Benjamin

wrote: it has now become a question, how much longer

she can preserve her dominion over that vast empire

inhabited by a brave and intelligent people, who under

the rule o England are learning to wield the weapons

that will in turn expel her rom India. One secret o

Englands success in that quarter has been the dier-

ence o race and religion, which exists in the seething

population between the Himalayas and Cape Comorin.Once let the hate and rivalry which exist between Ma-

hometans, Buddhists, and Hindus be laid aside, and one

o the greatest saeguards o the British dominion would

give place to an insurmountable peril.

In conclusion, Benjamin wrote, While Americans,

as citizens o a nation on riendly terms with both

powers, wish or Russia all true prosperity, they as ear-

nestly desire that such prosperity may not be at the ex-

pense o the peace and lie o a

country with so grand a history as

Persia.

One o Benjamins succes-

sors, E. Spenser Pratt, on Jan.10, 1888, sent a dispatch to Sec-

retary o State Thomas F. Bayard

reporting on his meeting with

Persias new minister o nance,

o the interior, and the Court,

Emin e Soultan, in which thelatter expressed in very strong

terms the desire to see the estab-

lishment here o American com-

mercial and industrial enter-

prises. While Persia had invited

Europeans to help develop its

immense natural resources, he

explained, they had merely

sought their own advantage with-

out doing anything in return

either or the benet o the country or the people.

Emin e Soultan went on to say that the United States

was a nation that had so nobly taken the lead in the

march o civilization and the Shah and his Govern-

ment now looked to my riendly eorts . . . to initiate a

move which would result in bringing about more inti-

mate commercial relations between the two countries

and open the way to Persias industrial regeneration

through American agency.By June, in urthering this eort, Persia named

Hadji Hossein Kouli Khan Motamed Vasare as theenvoy extraordinary and minister plenipotentiary o

Persia to the United States.

The United States had no great strategic or commer-

cial interests to draw it to Persia, and thereore, the

hoped-or intimate commercial relations did not ma-

terialize. Nonetheless, a good deal o American Chris-

tian missionary activity did take place in Persia as early

as 1834. The main impact was not the spread o Chris-

tianity, but the spread o education, and, by the end othe 19th Century, dozens o missionary schools had

been established. But even this activity by Americans

let the British uneasy. Thereore, British missionaries,

on the pretext o not wanting a wasteul duplication

o eort by U.S. and British missionaries, came to an

agreement with their U.S. counterparts to concentrate

their activity in the North, in the Russian sphere, and

outside the British sphere.

Nasir al-Din Shah Qajar in 1889.


6/24


Prelude to RevolutionIn 1890, Nasir al-Din Shah granted a tobacco con-

cession to the Imperial Tobacco Company o Great

Britain, giving it exclusive rights to process, sell, and

export all o Irans large tobacco production. Thus, an

industry, which supported the livelihood o millions,

was given over to a British private company.

In 1891, when the rst company agents arrived to

start purchasing the tobacco, they were met by mass pro-

tests, including the closing down o bazaars in all the

major cities, and, in December 1891, Grand AyatollahMirza Shirazi issued a atwa against smoking, whichwas universally adhered to. Even the Shahs harem re-

rained rom smoking, and it was reputed that the Shahs

wives reused to ll his pipe. By January, the Shah can-

celled the concession, and the people won their rst battle

against the sellout o their country. But so weak was the

Persian government, that Britain orced the government

to pay an indemnity o 500,000, which was borrowed

by the Persian government at 6% annual interest.

On May 1, 1896, ater a reign o almost ve decades,

Nasir al-Din Shah was assassinated by a anatic named

Mirza Muhammad Riza, As Shuster writes in his TheStrangling o Persia, although no motive was given, it

was not unconnected with the general belie that the rights

o Persia were being rapidly sold out to oreigners.

On June 8, 1896, Muzaffarud-Din Shah ascendedthe throne. His reign was no less profigate with the re-

sources o Persia than that o his ather, and by July

1906, in the shadow o a weakened Russia, itsel in thethroes o revolution, popular agitation began demand-

ing the granting o a constitution. The most dramatic

maniestation o this took place when 14,000 men, or-

ganized by the mullahs, took sanctuary in the British

Legation compound. Followed by the closing o the ba-

zaars and other relatively peaceul demonstrations, the

14,000 reused to leave the British compound until the

Shah had granted them a constitution, to be guaranteed

by the British authorities.

On Aug. 12, 1906, Richmond Pearson, the Ameri-can minister in Tehran, wrote to Secretary o State ElihuRoot that a popular agitation, similar to that in Russia,

demanding constitutional reorms but less violent, has

triumphed in Persia. . . . Shah yielded and conceded

constitutional orms o government, including national

legislative orms o government, including national

legislative assembly, elective assembly, new methods

and new era. The 14,000 reugees encamped in the Brit-

ish government grounds returned to their homes and

hundreds o political exiles have been recalled with

honor and received with illuminations to praise mani-

estation and popular rejoicing. . . .

Ten days later, Pearson sent a copy o the Shahs

decree to Washington, with a report on the situation.

Ater listing the reasons why his colleaguesthe min-

isters o other countriesthink that the revolution will

ail, due to the level o poverty and illiteracy, the lack oa middle class, the act that a constitutional government

had never been ormed in a Muslim country, etc., none-

theless, he wrote, it is certain that a committee o eight,

appointed by the revolutionary leaders, is now actively

at work on a constitution, a novel and dicult under-

taking in the ancient Kingdom o Iran, which since the

time o Ahasuerus, has patiently supported a score o

dynasties without once attempting to divide or to ques-

Nasir al-Din Shah, who gave the British exclusive rights to

huge chunks o his countrys resources and industry, kisses thehand o Queen Victoria (magazine dated July 13, 1859.) Shemade him a Knight o the Order o the Garter.


7/24


tion the rights o the governing monarch.

The urther development o this struggle will natu-

rally attract the interests and sympathy o the riends o

liberty throughout the world.4

The Triple EntenteWhile the Iranian people were taking their rst steps

toward sel-government, Britains King Edward VII

was setting alliances into motion that would lead to

world war. These alliancesthe Entente Cordiale be-

tween Great Britain and France, and the Anglo-Russian

Conventionare known collectively as the Triple En-

tente, and were intended to encircle Germany.

The Anglo-Russian Convention, signed Aug. 31,

1907, was an Entente sealed with the blood o Iran. Its

ormal purpose was to demarcate the boundaries o the

two empires, which dominated the entire Eurasian land-

mass. It dealt specically with Aghanistan, Tibet, and

Persia; the last was accorded the status o a buer state,

but in reality it was to become a protectorate, adminis-

tered as a condominium between the two empires

through the creation o spheres o infuence.

This piece o historic imperial sophistry stated:

The Governments o Great Britain and Russia

having mutually engaged to respect the integrity and

independence o Persia, and sincerely desiring the pres-

ervation o order throughout that country and its peace-

ul development, as well as the permanent establish-

ment o equal advantages or the trade and industry o

all other nations;Considering that each o them has, or geographical

and economic reasons, a special interest in the mainte-

nance o peace and order in certain Provinces o Persia

adjoining, or in the neighborhood o, the Russian rontier

on the one hand, and the rontiers o Aghanistan and Bal-

uchistan on the other hand; and being desirous o avoid-

ing all cause o confict between their respective interests

in the above-mentioned Provinces o Persia. . . .

The agreement proceeds to divide the assets o

Iranwhich nation was not even consultedand de-

nes the respective spheres o infuence, the North orRussia, the South or Britain, and a neutral zone in

between. Both agree not to seek or themselves, or in

cooperation with third parties, any Concessions o a

political or commercial naturesuch as Concessions

or railways, banks, telegraphs, roads, transport, insur-

ance, etc., in the others sphere. They urther agreed to

4. Foreign Relations o the United States, Aug. 12, 1906.

prior consultation, i either opposed the other in seeking

a concession within neutral zone.

The document even provided or dividing up Cus-

toms revenues or the payment o their respective debts

to the Persian government, where those collected in the

Russian sphere would be used to pay debt to the Rus-

sian Banque dEscompte et des Prits de Perse, and those

rom the Persian Gul and the South, as well as those

o the sheries on the Persian shore o the Caspian Sea

and those o the Posts and telegraphs, shall be devoted,

as in the past, to the service o the loans concluded by

the Government o the Shah with the Imperial Bank o

Persia.

Article Five is directly relevant to the ate o Morgan

Shuster. It states that since it was necessary to estab-

lish control over the sources o revenues [that] guaran-

tee regular service o loans to each others banks, the

British and Russian Governments undertake to enter

beorehand into a riendly exchange o ideas with a

view to determine, in agreement with each other, the

measures o control in question and to avoid all inter-

erence which would not be in conormity with the

principles governing the present Agreement.5

It was this riendly exchange o ideas between

Great Britain and Russia, that crushed the Iranian revo-

lution.

As soon as this treaty was signed, London simply

waited or a pretext to ignite world war, aimed at making

itsel the seat o a global world empire. Within a little

more than a decade, the empires o Germany, Austro-Hungary, Russia, and the Ottoman Empire would all

but disappear. Ater 1907, a series o international crises

would build, until the assassination o the Habsburg

Archduke Ferdinand in Sarajevo in 1914. The earlier

crises included the Moroccan crisis o 1911, various

Balkan crises, the Italian-Turkish War, and the develop-

ments in Persia.

The Iranian constitutional movement would disap-

pear, as yet another cruel crushing o aspirations o na-

tions on the way to building the British Empire. But

unlike in Arica and other Asian nations, there wereAmericans at the center o this one.

Sealing a Convention with BloodThe rst Majlis (national legislative body) was con-

vened on Oct. 7, 1906, and completed a drat constitu-

5. Great Britain, Parliamentary Papers, 1908, Vol. CXXV, Cmd.

3750.


8/24


tion, signed on Dec. 31, 1906, which

stated: under the rule o law, the

Crown is a divine git given to the

Shah by the people. Six days later,

Mozafaradeen Shah died. His sonand successor, Mohammad AliShah, did not agree with this idea.Shuster described the new Shah as

perhaps the most perverted, cow-

ardly, and vice-sodden monster that

had disgraced the throne o Persia in

many generations, who became

the avowed tool and satrap o the

Russian government and its agent in

Persia or stamping out the rights o

the people.

By January 1907, the Majlis was

prepared to institute nancial and

economic reorms, including to es-

tablish a national bank, curtail the

Shahs expenses, and begin cleaning

up the rampant corruption. Above

all, it aimed to prevent urther loans

rom Britain and Russia, and to oust

the Belgian Minister o Post and

Customs, Joseph Naus.

While relations between the new Shah and the

Majlis remained tense, it wasnt until nine months later,

with the signing o the convention on Aug. 31, 1907,

and its announcement in Tehran on Sept. 4, that theShah, with Anglo-Russian backing, began to imple-

ment in earnest his plan to overthrow the Majlis. On

Sept. 5, Her Majestys Minister in Tehran, Sir CecilSpring Rice, one o the chie architects o the Anglo-Russian Convention, addressed a letter to the Persian

government, assuring it that both empires would re-

spect the integrity and independence o Persia. Subse-

quent events proved that the assurances given were

mere sophistries.

By December, with the ull backing o Britain and

Russia, the Shah deployed against the Majlis the 1,800-man Cossack Brigade, led by Russian Army ocers,

and a motley orce made up o his own servants and dis-

gruntled rabble o Tehran. To oppose these orces, the

Constitutionalists in the Majlis rallied the political clubs

called anjumans, organized along guild lines, such as

merchants and cratsmen, in all the major cities.

Despite tension between the two, the Shah did not

see himsel strong enough to resist the demands o the

Majlis, and the latter had no desire to

push the situation into open civil

war. In May 1908, the sides con-

cluded an agreement whereby the

Shah would dismiss several o the

more reactionary o his courtiers,

one o whom took reuge in the Rus-

sian legation. But or the British and

Russians, there was no room or

compromise, and on June 2, no doubt

ater a riendly exchange o ideas,

the Russian minister Nicholas

Hartwig and British charg daairs

Charles Marling, presented the Per-

sian Foreign Minister an ultimatum,

threatening Russian intervention i

the Majlis continued its opposition

to the Shahs wishes. On June 3, the

Shah removed to his palace just out-

side Tehran. The Cossack Brigade o

1,000, equipped with artillery, sur-

rounded the Majlis and opened re,

destroying the building, killing or

capturing the nationalists, and insti-

tuting a reign o terror in the City. In

the ten months o ghting that ol-

lowed, the nationalists eventually succeeded in gaining

control o the countrys major towns and cities.

Tabriz, Irans second city, and historically a center

o the nationalist cause, expelled the Shahs troops,only to be put under a brutal siege. It was here that the

young American missionary teacher, Howard Basker-

ville, marching at the head a small troop o 150 young

Persians who only a ew days beore had been his stu-

dents, and to whom he had given rudimentary military

training, was martyred, in the rst engagement with the

enemy. Upon hearing o his death, the provincial gover-

nor proclaimed, He has written his name in our hearts

and in our history.

Russia, on the pretext o protecting the lives and

property o oreigners, dispatched 4,000 troops to litthe siege, and while opening the roads and allowing the

entry o ood and provisions, then proceeded to occupy

the city; they did not withdraw until the end o World

War I. In the weeks that ollowed, the nationalists, win-

ning over the powerul Bakhtiaris tribal leaders, led a

march on Tehran, orcing the Shah to take reuge at the

Russian legation.

Shuster wrote o these developments, Thus on July

Library of Congress/G. Grantham Bain News Service

Mohammad Ali Mirzi Shah, whomShuster described as perhaps the most

perverted, cowardly, and vice-soddenmonster that had disgraced the throne oPersia in many generations.


9/24


16, 1909, the apparently lost cause o consti-

tutionalism in Persia had been suddenly revived,

and by a display o courage, patriotism and skill by the

soldiers o the people, their hopes or a representative

government had been restored, almost overnight.

Ater another riendly exchange o ideas, the Rus-

sian and British ministers decided it was better to send

the Shah into exile than risk the overthrow o the mon-archy and the establishment o a republic. By Septem-

ber, ater promising never to return, Mohammad Ali

Shah was given a pension and packed o to Odessa,

Ukraine, to live in exile. His son, Soltan Ahmad Shah,a child o 12, ascended the throne under a regency.

On Nov. 16, 1909, ollowing the reopening o the

Majlis, U.S. President William Howard Tat sent a letter

o recognition to the new government: I tender your

majesty congratulations on the opening o the constitu-

tional parliament; the American people wish welare

and peace or Persia under the new order o things.Despite this victory, the aairs o the new govern-

ment did not prosper. Russian troops still occupied

Tabriz and other regions o northern Persia, and the

British, in October 1910, issued an ultimatum demand-

ing that the Persian government allow the ocers o the

British Indian Army to enter the country, to police the

roads in the British sphere, a project which would

amount to occupation o southern part o the country, to

be paid or by the Persians themselves! Russia and Brit-

ain maintained open hostility to the new Constitutional

Government, preventing it rom raising loans. In a des-

perate attempt to seek aid rom a third quarter, a request

was made to the German government, to no avail.

Persias Appeal Answered by the U.S.In December 1910, in another attempt to

gain the support o a third party, the Per-

sian Minister o Foreign Aairs, HusaynKuli Khan, instructed his minister inWashington to request American ex-

perts to be employed by the Persian

government in the capacity o Trea-

surer General, to reorganize the States

nances. There was resistance within

the State Department to this request,

since the United States had no strategic

interests there, but more important, out

o ear that this would antagonize Russia

and Great Britain. At the same time, the

Persian government issued an international

appeal or help rom the oppressive actions o

the British and Russian governments. The Jan. 11,

1911 edition o the New York Times published this

appeal, which, in part, stated:

Four years ago the Persian nation entered upon a

great movement to obtain her liberty. She is going to

prove to the pessimists o the Occident, who consider

the Orient and especially Persia as incapable o regen-eration, having private reasons or this view, that Persia

is ready to deend at the price o her own blood the

ideals o liberty, justice and equality which are the un-

damental principles on which the Occidental civiliza-

tion has grown.

The clergy and all the social classes o the nation

have proved to the entire world in the course o the last

ew years that neither Persia nor Islamism are araid to

open their doors to the benets o civilization. The Per-

sians have entered with all the orce which animates

them on a period o evolution and liberty so as to obtainthese things, the lack o which has caused them to be

outdistanced or so long a time.

In their evolutionary march Persia expected to

obtain the protection and co-operation o the entire

world, but unortunately this hope has been unullled,

and, on the contrary, we have been oppressed system-

atically by the unortunate infuence o two European

countries whose ambition and thirst or conquest di-

Tabriz, Persias second-largest city, wasa center o nationalism. Shown is theU.S. consulate there, during theConstitutionalist Revolution. The young

American missionary teacher Howard

Baskerville (right), was killed in Tabrizin 1909, ghting, along with his ormerstudents, on behal o the Constitutional

Revolution.


10/24


rected them into an iniquitous path. These two coun-

tries have undertaken the sad work o preventing and

stopping the march o the Orient toward progress and

civilization. . . .

The appeal went on to denounce the unprovoked oc-

cupation o northern Persia by Russian troops, with the

approval o the Liberal and Constitutional British,

who, despite the suave appearance o English poli-

tics, have threatened to intervene militarily on the pre-

text o the lawlessness they claim prevails in the south-

ern part o country. The appeal concluded that the

English and Russians, oreseeing the projected reorms

and apprehending an economic revival, created all sorts

o obstacles to prevent the extension o loans. Eng-

land and Russia took advantage o pretexts which had

no oundation and menaced us in order to intimidate us

and enslave our country.

It is not known whether this appeal contributed to

President Tats decision, but he threw his support

behind the Persian request, and by March 1911, Morgan

Shuster and our other young men set out or Persia.

Their mission was unocial, and thoroughly private.

They became employees o the Persian Constitutional

Government. Others would soon ollow.

Who was this 35-year-old nancial expert, W.

Morgan Shuster? He was part o the policy establish-

ment, gathered within the institutions o the American

Presidency, the broad layer o military, political, and

economic experts that emerged ollowing the Civil War

and the development o the United States as the worldsgreatest industrial power. The completion o the worlds

rst Transcontinental Railway, linking the Atlantic with

the Pacic, made the United States a Pacic power, and

thereore, a world power, which could challenge the

British Empire.

Two actions coalesced, one Anglophile, which

sought to create a colonial empire on the British model,

and the other patriotic, which sought to ght the British

by supporting nation-states throughout the world. The

latter was best represented by Gen. Arthur MacArthur

(the ather o Gen. Douglas MacArthur), who, as mili-tary governor o the Philippines, saw the necessity to

create an independent and ully sovereign nation there.

Shuster shared that outlook.

A native o Washington, D.C., Shuster did not gain

his expertise in a Wall Street bank or law rm, but in the

military. Shortly ater he graduated rom Georgetown

University, the Spanish-American war broke out and he

joined the Army, serving as a clerk in the War Depart-

ment. With the occupation o Cuba, he joined Major,

later our-star General, Tasker H. Bliss, to reorganize the

Cuban Customs. This was not a job or a simple accoun-

tant, since the Customs House is one o the most impor-

tant sources o revenue o a national government.

Cuba, like many undeveloped countries, was rie

with corruptionnot only on the part o Cubansbut

its revenues were oten committed to oreign loans, es-

pecially rom Britain, France, and other imperial

powers. The loans were arranged in such a way that the

revenues went directly rom the Customs collection

point to the local branch o a British or other oreign

bank, to pay the loans directly. I the country ailed to

pay its debts, the Customs House became the prime

target or military intervention by the creditor power.

Cleaning up the Customs House was key to warding o

military interventions, along with the establishment o

an ecient government administration that is integral

to the economic development and deense o the sover-

eignty o any nation.

In this eort, Shuster soon became Blisss chie

deputy. Three years later, with a recommendation rom

Bliss, Shuster was appointed Chie o Customs in the

Philippines, while William Howard Tat served as gov-

ernor in the rst civil government there. Still in his 20s,

as Chie o Customs, he played a leading role in admin-

istering and preparing the Philippines or sel-govern-

ment. He would become a strong advocate or granting

the Islands independence.

His ve associates en route to Persia all had similarbackgrounds, having developed their nancial and eco-

nomic expertise in Cuba, the Philippines, or other U.S.

territories. Although not an ocial government mis-

sion, its appointment was widely reported in the Amer-

ican press, with eature articles in theNew York Times

and Washington Post.

One such article on Shusters mission to Persia was

written by the editor o theNew York Times in Novem-

ber 1911, at the height o the crisis: Wrecked and

ruined as she was, she had no hope to hersel and none

in the European nations. England and Russia, like a pairo wolves, were waiting or her to all into their paws.

Already a tentative partition had been arranged. Eng-

land taking a sphere o infuence adjoining the Aghan

rontier, and Russia a similar sphere adjoining her

own. And they, with the minor powers, were waiting or

Persia to all apart so that they could take the remnants

without a ght.

Enter, here, William Morgan Shuster, with a single-


11/24


handed and sole devotion to Persia. Not that he had had

ever taken any interest in Persia beore, but now Persia

was his employer and rom that moment he was heart

and soul enlisted in her cause. And Russia and Great

Britain, to their consternation, saw Persia being put on

a modern basis, becoming a real nation, turning beore

their eyes into a country which could stand on its own

eet; and knew that Shuster and his our husky young

American assistants were doing it.

Pointing to Anglo-Russian opposition to Shuster,the Times went on: The real trouble is that Shuster has

asserted rom the rst the independence o Persia and

her right to be ree rom the dictation o either England

or Russia. . . . Now he seems to have brought down a

war prematurely on the country he was trying to save. It

is a question, however, whether a war o the kind he has

brought down is not better than the painless partition

which would surely have ollowed i Persia had gone

on in her headlong way to destruction.6

En route to Persia, Shuster stopped in Constantino-

ple, where he met with many Constitutionalists who had

been in exile, including Hasan Taqizadeh, one o theounders o the democratic party o Iran, and other

member o the nationalist movement, including mer-

chants, government ocials, diplomats, and clergymen.

The leaders o the Majlis with whom Shuster worked,

included men such as Arbad Jamish, also known as

Jamshid Bahman Jamshidian, and members o thebanking and merchant class who supported the Consti-

tutional Revolution politically and nancially. Jamshid,

a Zoroastrian, along with the Jahanian merchant-banker

amily, had hoped to orm a national bank, a project sup-

ported by Shuster, but only realized three decades later.

6. Charles Willis Thompson, How Russia Came To Make War on W.

Morgan Shuster,New York Times, Nov. 11, 1911.

Persia in 1883. Throughout the century, Persia was a pawn in the Great Game between the Russian Empire to the north, and theBritish Empire, with its domains in India, to the east.


12/24


Shusters mission was headquartered in a mansion in

Tehran made available by Jamshid.

Another leader was the young deputy KeikhosrowShahrokh, whom Shuster especially thanked in hisbook. In 1919, Keikhosrow travelled to the U.S., with

the help o Shuster, to address Congress, appealing or

U.S. help in preventing the signing o the Anglo-Per-

sian Accord o 1919, which would have turned Iran into

Britains protectorate.

Shusters PlanShusters strategy was clear: to demonstrate how

the establishment o a modern nation-state requires an

organization o the national nances that can mobilizeresources or the nations economic development and

the protection o its sovereignty.

The Iranian Cabinet tended to be drawn rom the

countrys grandees and avorites patronized by the royal

amily, many o whom, Shuster wrote, had reached the

conclusion that it was ar saer and easier to become the

tools, agents and protgs o the Russian Government,

or instance, and have its powerul infuence exerted in

their avor, than to side with their own people who were

struggling heroically, but with all the aults o inexperi-

ence and ignorance o the technique o representativegovernment weighing heavily against their eorts.

It was in the Majlis, as imperect as it was, that Shus-

ter saw the crucial institution that represented the

actual progressive movement o the people o Iran, and

that it was, both by law and reputation, the symbol o

Persian nationalism and liberty. Winning its support

was crucial to pushing through his reorms in a govern-

ment whose Cabinet was more loyal to the old regime

than the new. He would have to demonstrate that his

own loyalties lay with the Iranian nation and not with

the imperial powers.On his arrival, he learned o the contracting o the

1.25 million loan rom the Imperial Bank o Persia,

which was worrisome in itsel, but worse was a pro-

posed law, drated by the chie Anglo-Russian agent in

the Persian government, Joseph Mornard, the BelgianCustoms Minister. This law would have given responsi-

bility or managing and disbursing the loan to a com-

mittee chaired by Mornard himsel, naturally ensuring

The Anglo-RussianConvention o

Aug. 31, 1907ociallydivided Persiainto Britishand Russianspheres oinfuence, witha neutralbuer zone

between them.This, theydeclared to bean expressiono their desireto respectthe integrityandindependenceo Persia.

Iranian Historical Photograph Gallery, www.fouman.com


13/24


payment to his Anglo-Russian

masters. Shuster was able to

block what would have been yet

another attack on Persia.

Shuster wrote: Thus the rst

attempt by oreign elements to tie

our hands beore we could even

get started had ailed and the dep-

uties o the Medjlis expressed

their delight that we had discov-

ered the situation to them.

Shuster won the trust and

support o the people in another

way, too. In Iran, it was soon

clear where the loyalty o or-

eign advisors lay, and who in

Tehran would support them. I

they were British or Russian,

those loyalties were clear, but in

the case o the smaller powers,

such as Belgium, advisors would

soon learn where they stood by

the social invitations that were

extended as soon as anyone new

arrived on the scene. Shuster de-

liberately reused all invitations

or the rst several weeks, so as

to concentrate on pushing a new

law through the government and

the Majlis that would set theramework or reorganizing the

State nances. The oreign lega-

tions, especially those o the British and Russians, ex-

pressed their displeasure to the government ministers

who, at a Cabinet meeting, questioned Shusters reusal

to accept these invitations.

Shuster replied, Am I not an ocial o the Persian

government; i I am, should I not observe the rules o

etiquette o that laid down by the Persian Government?

The Cabinet quickly agreed, and in Shusters words,

They seemed rather to like the idea o a oreigner con-sidering himsel to be a genuine part o their govern-

ment instead o merely condescending to accept their

money.

As word spread to the general public o the Persian

governments loyal new employee, Shuster wrote,

During this little by-play the Persian people were not

entirely idle. They rubbed their eyes a ew times and

then commenced to have a new sensation. . . . We have a

oreigner among us who takes

not his orders rom the oreign

legations. Let us help him.

Shuster won both the awe o

the Cabinet and, more impor-

tant, the condence and respect

o the Majlis, and on June 13 the

latter passed the legislation

drated by Shuster, giving him

the special powers he required to

reorganize the governments -

nances. This law made the Trea-

surer General responsible or the

collection and disbursement o

all government revenues, in-

cluding Customs. It included the

drating o a national budget, out

o which all government expen-

ditures would be paid, and it in-

cluded payment o oreign debts.

All government accounts were

to be put under his authority.

Thus armed, Shuster began

his contribution to the ongoing

Constitutional Revolution. He

wrote, As soon as the law o

June 13 was passed by the Med-

jlis I endeavored to create a re-

spect or law among both or-

eigners and Persians. There wasalready a very decent respect or

money, or power, infuence,

prestige and courage, but absolutely none or the laws

as being the embodiment o the rights o the public.

Laws in Persia, and more especially nancial laws,

were lightly regarded.

Shuster ound the countrys nances divided in two

parts. One part involved the Customs Bureau, under the

direction o Mornard, who kept his own books, since

the Customs revenues were virtually all earmarked or

paying the debts to Russia and Great Britain. Mornardknew who his masters were, and would not cooperate

with Shuster.

The second part was the Finance Ministry and Trea-

sury, rom which the revenues or maintaining the na-

tional government were disbursed. Shuster ound the

administration totally disorganized, with ocials who

saw their positions as an opportunity or sel-enrich-

ment, rather than a responsibility to the nation. There

Members o the rst Majlis, or national legislativebody, whose term was Oct. 7, 1906-June 23, 1908.The Majlis drated a constitution, and became the

hotbed o Constitutionalist erment in the years tocome, until it was crushed by the British and

Russian empires.


14/24


was no national budget, and taxes were collected

through the ancient method o tax armingall o

which amounted to an empty Treasury.

As or the Army, its troops existed only on paper

while the war ministry was the roosting place or the

most brilliant galaxy o uniormed loaers, masquerad-

ing as generals, commissaries, and chies o sta, o

petty graters, amiable cutthroats and all round scoun-

drels which it has ever been my ortune to encounter.

In the ace o intriguing reactionary ministers and

ocials, Shuster and his team went to work immedi-

ately, introducing a national budget and budgets or

each department. Shuster drated a budget or the war

ministry o 2 million tumans, sucient or 15,000 men.

The budget had been 7 million tumans, and the depart-

ment could not muster 5,000, men, hal starved. Most

the budget went to grat or paying oreign advisors.

He took the collection o taxes, both in cash and in

kind, such as grain, out o the hands o the tax armers

and put it directly into the hands o Treasury ocials,

organizing an independent Treasury gendarme orce or

the direct collection o the taxes; it would eventually

number 1,500 men, trained and commanded by our

American military advisors. He also organized an in-

vestigative Treasury secret service. Shuster created the

only set o central books the Persian government had

ever owned.

Reorganizing the nances had as its object not only

enabling the government to pay its obligations, but also

to give it a creditworthiness that enabled it to issue itsown credits. An example o the problem to be solved

was the antiquated and notoriously corrupt national

pension system. Most pensioners were never paid at all,

especially the common people. Shuster reorganized this

by eliminating bogus pensions, introducing a modern

system, whereby pensioners were issued bonds with

40-year maturity, and the bondholder receiving annual

interest through a coupon system. This not only assured

the payment, but increased the amount o negotiable

paper available to the system or the requirements o

commerce, which, at that time, was dominated by Brit-ains Imperial Bank o Persia. This helped establish the

creditworthiness o the government in the eyes o the

population, allowing or the fotation o internal bond

issues.

Thus, or the rst time, the government paid its bills

on time, including the salaries o diplomatic representa-

tives who had not been paid in years. For the rst time,

Iranians would accept their own governments Treasury

notes rather than those issued by the Imperial Bank o

Persia.

Shuster began to implement three other key projects

which would earn him the hatred o the British and Rus -

sians, including building railroads, taking over the Cus-

toms, and foating a international loan to pay o British

and Russian loans and nance such projects.

His most important project, which would not get o

the ground or another three decades, was to build an

Iranian national railway grid, centered on a north-south

trunk line running rom Jola, on the Russian border,

through Tabriz, Zindjan, Kasvin, Hamadan, Khoram-

abad, to Mohammerah on the Persian Gul. This would

traverse the richest regions o Persia and expand to a

total o eight lines criss-crossing the country, and would

greatly hasten the countrys development. Shuster

thought it could be built in sections, and private loans

could be authorized, since it would be protable, i

careully managed. He recommended to the Majlis that

it pass a law announcing its intention to build these rail

lines when the time was right.

For Britain, such a railway grid would be the ulll-

ment o the nightmares o Lord Curzon and other Brit-

ish imperialists. The grid would link the Russian Trans-

Siberian Railway to the Persian Gul and then, the India

Ocean. Moreover, any rail development would natu-

rally link up with the German-built Berlin-Baghdad

line, which was perceived as a dire threat to Britains

Indian colony. Britain itsel had dreams building a Cape-

town to Calcutta line, but only ater the Ottoman Empireand Persia ell under Londons control, ollowing the

anticipated destruction o both the Russian and German

empires.

Persia was being economically and politically stran-

gled by the loans held by the Russian governments

Discount and Loan Bank, the British Indian govern-

ment loans, and the privately owned British Imperial

Bank o Persia.

To get around this obstacle, Shuster opened negotia-

tions with the British oce o the American bank Selig-

man Brothers and Co. This bank was ounded duringthe Civil War, when it was involved in raising unds or

the Union; it later became the scal agent or the U.S.

Department o War and the Navy. Shuster hoped to raise

the unds through its London branch, since, at that time,

all oreign loans by American banks had to receive ap-

proval rom the government.

The loan would be used to pay o Russian loans,

and provide or public works projects, including a


15/24


census or taxation purposes; surveys o orests and

mines, and o public domains; barracks and equipment

or Treasury gendarmes; repair and construction o

roads; and construction o irrigation systems. The Brit-

ish and Russians immediately moved to sabotage this

eort by simply telling the bankers and investors not to

subscribe to the loan.

One o the most important tools to build up the

economy was the protective tari, one o the hallmarks

o the American System o political economy. The tari

would raise revenues as well as protect local agriculture

and industry, and Shuster hoped to reorm Irans Cus-

toms regime, which was totally subservient to British

and Russian creditors or payment o loans. The taris

were in act too low; they were not protective taris by

any means. Russian trade dominated the North, while

Russia would not allow transshipment o goods rom

any other nation, including Iran itsel, on its railroads.

The South was dominated by British trade. Shusters

reorm was immediately opposed by both the British

and Russians, and Customs Minister Mornard was more

than willing to aid his masters in their intrigues.

Between the Lion and the BearShuster wrote that he ound it dicult to imagine

why any oreign government would resist his eorts,

given the act that the proposed reorganization aorded

more saeguards and guarantees or the payment o or-

eign loans. Yet, the very day the law was passed, the

Russia minister inormed the government that Mornardshould not be put under Shusters authority, going so ar

as to threaten the seizure o the Customs houses in the

North. Within two weeks, the Russian, French, German,

Italian, and Austro-Hungarian legations rained protests

upon the Persian Foreign Oce. Shuster was soon at-

tacked as a certain Mr. Sinister and the so-called

Treasurer General.

Undeterred, and with backing o the Majlis, Shuster

secured agreement rom the banks to recognize only his

signature on any checks drawing rom a government

account. As or Mornard, ater Shuster presented evi-dence o gross irregularities at the Customs, which he

said was prepared to make available to the Majlis, this

Anglo-Russian protg surrendered his authority over

the Customs accounts.

By June 15, 1911, Prime Minister and Minister o

War Sipahdar ul-Azam let Tehran in protest over thecutting o the war budget, and headed or Europe, on

the border with Russia, rom where he would work with

Russia to bring down Shuster. The brother o the ormer

Shah, Prince Salar ed-Dowleh, went into open revoltin northern Persia, in what was clearly a Russian-backed

operation.

Shuster was ully aware o the connection betweenthe Anglo-Russian eorts to crush Iran and the dynamic

o the Triple Entente, writing that it was Britains aim

to build up war-spent Russia, thereore, and to make

an entente with her which should do or England on the

north o Germany what the understanding with the

French had done on the south. . . .

Thousands o miles to the west, a small German

gunboat, The Panther, dropped anchor at the Moroccan

port o Agadir, a move that the British government

chose to respond to by threatening war. The British

chose to turn a dispute between Germany and Franceover their division o interests into a pretext to invoke

the Triple Entente against Germany.

Britain, looking ater its own interests in the divi-

sion o other peoples land, moved to support France

against Germany. On July 21, 1911, Lloyd George,

Chancellor o the Exchequer, threatened Germany with

war. In a speech given in Mansion House, the seat o the

mayor o London, the man who would lead Britain into

Library of Congress

Britains Lloyd George, as Chancellor o the Exchequer in1911, gave a speech at Mansion House in London, invoking theTriple Entente against Germany, and implicitly against theUnited States and Persia as well. This began the drumbeat toWorld War I.


16/24


the World War, and a master o sophistry, George de-

clared that while he would make great sacrices or

world peace . . . i a situation were to be orced upon us

in which peace could only be preserved by the surren-

der o the great and benecent position Britain has won

by centuries o heroism and achievement, by allowing

Britain to be treated where her interests were vitally a-

ected as i she were o no account in the cabinet o na-

tions, then I say emphatically that peace at that price

would be a humiliation intolerable or a great country

like ours to endure. National honor is no party question.

The security o our great international trade is not a

party question; the peace o the world is much more

likely to be secured i all nations realize airly what the

conditions or peace must be.

Ater the speech, the Admiralty initiated naval de-

ployments, while Iran would soon learn the bitter mean-

ing o the phrase what the conditions o peace must be.

It should be noted that while Germany has been con-

sidered the only target o this threat, Germany is not

mentioned in the text, but the United States is. The

speech was preaced with comments expressing the

hope or a happy issue o the negotiations then ongoing

between the United States and British Foreign Secretary

Sir Edward Grey or an arbitration treaty between thetwo governments, initiated by President Tat and aimed

at submitting disputes to arbitration, rather than war.

On July 10, the British minister in Tehran, SirGeorge Barclay, had sent a dispatch to Foreign Secre-tary Grey, to inorm him o the activities o the obnox-ious American:

Mr. Morgan Shuster has now been two months in

Tehran, and his infuence is already a leading actor in the

situation. The Mejlis, or the moment at least, is entirely

at his command, and proposals rom him have only to be

made to be accepted with practical unanimity.

One must admire the pluck and energy with which

he has at once thrown himsel into the struggle or

reorm, but at the same time one cannot but have some

misgivings as to the results o his headlong progress.

On the only occasion on which I have met Mr.Shuster he emphasized the purely nancial character o

the work beore him, and said that he was no politician

. . . but the apparently light-hearted way in which he em-

barked on a confict with the Belgian customs Adminis-

tration, and ollowed this up with the oer o the Trea-

sury Gendarme appointment to Major Stokes, in both o

the steps he was exposing himsel to opposition rom

Russia, would seem to give his disclaimer o the politi-

cians role a more ominous signicance, and point to its

denoting a disregard o political considerations, which

it would be wiser to take into account.

The political considerations which Sir George ac-

cused Shuster o ignoring were the Anglo-Russian con-

dominium under which Persias sovereignty was anni-

hilated. The reerence to Major Stokes concerns the

principal pretext that Russia used to invoke the Anglo-

Russian entente, in order to oust Shuster. The Stokes

appointment grew out o Shusters need or trained mil-

itary ocers or his gendarmes, and Stokes, although

an Englishman, was highly qualied, knew Persia well,

spoke Farsi, and was prepared to resign his commission

rom the British Indian Army. Russia claimed that his

appointment violated the Anglo-Russian agreement o

1907, because Stokes, as a British national, would have

to enter the North in order to carry out his duties.

While the above dispatch was not released to the

public until ater Shusters ouster in December 1911,

the American had already become aware o the British

role by July 17, when he was shown a note given to an-

other ocial o the diplomatic corps, revealing that the

British Foreign Oce had directed the British legation

to side with the Russians on the question o Mornard

and the control o Customs unds.

While Sir George warned Shuster on the Stokes ap-

pointment, Shuster, who was quite amiliar with text o

the Anglo-Russian Convention, saw no reason to com-

promise the rights o his employer, the Persian govern-

ment. Writing in reply to Sir George, Shuster declared:What am I to think when I see the rst vital step which

I undertake in the task o bringing order out o chaos

here obstructed and relentlessly opposed by the very

two nations who have time and again proessed their

sincere desire to see the progress and prosperity o the

stricken country which I am seeking to serve. . . .

In conclusion, permit me to say that as the act o my

tender o this post to Major Stokes is now generally

known here, any withdrawal o that oer by me could not

ail to be interpreted as being dictated by purely political

considerations, which I could by no means permit.7

On July 21, the British Foreign Oce sent instruc-

tions to Tehran totally backing Russias demands,

saying, it should be pointed out to the Persian govern-

ment that the employment o Major Stokes in military

service in any active operations in the north o Persia

may involve political considerations, and that His Maj-

7. Thompson, op. cit., ootnote 6.


17/24


estys government cannot deprecate objections that

may be taken to it. Stokes would eventually be ordered

by the British legation not to accept the appointment.

Civil WarOn July 18, three days beore Lloyd Georges Man-

sion House speech, Tehran learned that the war party in

St. Petersburg had unleashed the ormer Shah, Moham-

mad Ali, breaking the Anglo-Russian promise to assure

that he remain in permanent exile. Mohammad Ali en-

tered Iran through Russia at Gumesh Teppeh on the

Caspian Sea, with a consignment o rifes, ammunition,

and artillery transported by the Russian railway on

boxes marked mineral water, and a small army o

Shahsevens and Tucomans tribes. His brother Salar ed

Dowleh, who had already entered Iran and organized a

small army o Kurds, declared his support.

This news created near panic in Tehran; nonetheless,

the Majlis acted. A new coalition government was

ormed, and martial law was declared. Within days, the

Cabinet and many Majlis deputies were overtaken by

ear, but a group o Constitutionalists stepped orward to

take leadership. As Treasurer General and an employee

o the Persian government, Shuster was brought into the

leadership group that hoped to save the constitutional

government. At a meeting with the War Minister, the

regent, and Ephraim Khan, a Turkish-Armenian chieo police, Shuster recommended that the Majlis pass a

law declaring the ormer Shah and his two brothers to be

outlaws, and oering a large bounty to whoever mightdeliver them up, dead or alive. Shuster met with leaders

o both parties in an eort to convince them to take pos-

itive action, and by July 29, the Majlis passed a law o-

ering a bounty o 100,000 tumans or the Shah and

25,000 or each brother; the Majlis also voted to oust

Prime Minister Sipahdar, who was known to be intrigu-

ing with the Anglo-Russian-backed ormer Shah.

Without an army, the government had only 1,800

police and gendarmes in the capital. Shuster wired

unds to Bakhtiyari Khan, governor o Isahan, and who

had been won over to the nationalist/Constitutionalistcause, or expenses to outt 2,000 Bakhtiyari tribes-

men. And a pension was arranged or Major Haase, a

German artillery instructor, to handle the ew Maxim

guns in the possession o the nationalists.

On July 28, the rst o several assassination plots

against Shuster was discovered, and was believed to

have been linked to the Russian legation.

On July 31, the British and Russian missions issued

a statement recognizing that the Shah had violated the

agreement on his exile, and that thereore, his pension

should be oreited. But, now that he was in Persian ter-

ritory, they wrote sanctimoniously: The British and

Russian governments cannot intervene. Thereore the

British and Russian governments state that in the con-

fict that has unortunately arisen in Persia they will in

no way interere. It would be learned later that the ex-

Shah, as early as June, had met in Vienna with Russias

Ambassador to Serbia, Nicholas Hartwig, who, when

he was minister in Tehran in 1908, had coordinated the

Anglo-Russian operation to overthrow the Majlis.

The British-Russian statement, o course, was pure

sophistry. That week, the governor o Ardebil was ar-

rested by the Iranian government or treasonous activ-

ity, and the Russian consul sent 300 Russian soldiers to

secure his release, ater which the governor joined the

orces o the ormer Shah.

On Aug. 7, Shusters Director o Taxation, F. S.Cairns, dispatched a letter to President Tat:

Pursuant to your kind request to keep you inormed

o our progress in Persia, the ollowing statement o ex-

periences and conditions may be o interest, especially

in view o the recent return o the exiled Shah, Moham-

mad Ali, and the near approach o civil war which now

seems inevitable, as the result o oreign intrigues. . . .

The injection o Mr. Shusters vigorous and up-

right personality into such a putrid mass, has created

more stir and consternation than anything which has

occurred in recent years, and has tended to upset the vi-cious plans o certain oreign representatives whose

hopes or a complete national disintegration have been

temporarily disturbed, but not checked by any means.

Mr. Shusters reception by the Persians, who want and

hope or better things, was extremely cordial, and the

condence in his ability to place the country on a better

and more substantial basis, was ttingly demonstrated

by the alacrity with which he was given complete con-

trol o the nances. His powers in that respect are dicta-

torial, and have been conrmed in a law passed by the

Medjlis last May. The natural result o a rigorous policyto check abuses and secure the proper payment and

control o taxes, has developed a colossal opposition

rom all those who have heretoore sapped the vitality

o the nation, in which attitude they are encouraged by

every oreign Legation except our own. Harassed upon

all sides by a hungry horde o thieves who ear a perma-

nent curtailment o their corrupt practices, with a de-

pleted Treasury and civil war staring him in the ace,


18/24


Mr. Shusters task is one which might well discourage

any man, and makes the ght very unequal. His only

support is the National Assembly (Medjlis), which up

to the present time has approved every measure pro-

posed by him, but how long constitutional government

can exist in this country, overshadowed as it is by a Bear

on the north and a Lion in the south, is a question we are

constantly asking each other. . . .

We are assured by other oreigners that our lives

will not be endangered, but we have almost positive

proos that Mr. Shuster has been secretly threatened

with assassination by a Russian ex-consul, named

Petro, who lives at the Russian Legation. In most any

other country such statements would be liberally dis-

counted, but political assassination is so common here,

and practiced so generally in Russia, that the story,

which has reached us, cannot be accepted at other than

its ace value. . . .

Ater reviewing the diculties in reorganizing the

taxation system, Cairns continues: The Customs ser-

vice is airly well organized and managed by Belgians,

but not honestly. They collect about our millions o

Tomans annually, nearly all o which is consumed in

the payment o interest charges on the Russian and Brit-

ish debts.

It is only recently that Mr. Shuster has secured the

control o this branch o the service, and even now he is

engaged in a ght orced on him by the intriguing Lega-

tions, to compel him to release his supervision and

permit the Collector o Customs to personally pay andbe responsible or the interest charges and other obliga-

tions secured by the customs collections.

All this will undoubtedly seem very strange to you

Mr. President, but the situation here is so extraordinary,

that one must be on the ground to realize that a seem-

ingly independent government can be so impotent, that

orders to its ocials are given by oreign representa-

tives, and strangest o all, are many times obeyed with-

out question.

I have been told that the situation here is compa-

rable to that o Egypt thirty odd years ago, but LordCromer had a British army, with every important oce

lled by men o his own nationality, and the British

nation at his back. I we could have even a small part o

such support, and could eliminate oreign intrigues, we

might hope to accomplish reorms in time; as it is, how-

ever, my views or ultimate success are extremely pes-

simistic and are shared by every other member o the

Commission. As a air sample o our diculties, Mr.

Shuster has recently been endeavouring to organize a

orce o Gendarmes or service in the collection o taxes

and is being opposed and hindered by the Russian Le-

gation in the most outrageous manner. The Russians are

protesting through diplomatic sources and are deter-

mined to deeat the project, by air means or oul. They

recognize the wisdom o the movement, and as their

policy is to keep Persia in a constant turmoil and with-

out nancial resources or improvements, each o our

propositions or betterment o conditions will be vigor-

ously and ocially combated by them.

Finding it impossible to deeat the gendarme prop-

osition, they promptly landed the exiled Shah on the

North coast o Persia, accompanied by Russian army

ocers, and in their determination to deeat Mr. Shus-

ter and his plans or improvements, they are plunging

Persia into civil strie with a certain prospect o suc-

cess. I unable to deeat the Constitutional orces in the

eld, and again seat a tool on the Persian throne, they

will at least have accomplished one o their objects by

depleting the Treasury and compelling the expenditure

o the last cent or military operations. In the meantime

general conditions are daily growing worse, travel on

the roads is becoming more dangerous, bands o brig-

ands are appearing everywhere and a revolutionary ex-

plosion may occur any day here in the city where Rus-

sian infuence is very strong. To sum up the situation,

Russia is determined to deeat any attempt to improve

conditions in Persia, and incidentally to eliminate the

Treasurer General and his assistants, unless they arewilling to become subservient to Russian intrigues.

Can we resist successully and carry on our work

o regeneration without even the moral support o any

nation? Can we expect progress when opposed by or-

eign nations, and such a powerully corrupt element

among the Persians themselves? I must coness that the

uture looks exceedingly dark. . . . We shall struggle

along, however, until things take a better turn, or, until

the nal dissolution expected by everybody except the

American Minister, who is the only optimist, and whose

cheerul presence and encouraging words serve not alittle to buoy up our drooping spirits and spur us on to

renewed eorts. . . .8

On Aug. 11, at a diplomatic diner where Sir George

8. Cited in Rose Louise Greaves, Some Aspects o the Anglo-Russian

Convention and Its Working in Persia, 1907-14,Bulletin o the School

o Oriental and Arican Studies, University o London, Vol. 31, No. 2

(1968).


19/24


Barclay and Russian Minister M. Poklewski

Koziell were present, the latter tried to bribe

and warn Shuster to stay passive while the ex-

Shah moved to take power, ater which the

Russians would assure that he could remain

with ull powers. Without hesitation, Shuster

said that no matter what happened, he would

never serve under the ex-Shah.

While the Russian and British ministers

shared drinks with Shuster, the ormer Shahs

orce advanced on Tehran. On Aug. 20, Prince

Salar ed-Dowleh reached Hamadan with

10,000 men, preparing to march on Tehran,

where the nationalists had no more that 3,000

men. But on Sept. 5, an inerior government

orce o Bakhtiyaris, and gendarmes led by

Ephraim Khan and supported by Major Haases

Maxim guns, through a fanking maneuver, de-

eated Ashardud Dawla, who was capturedand executed. Having lost his best general, Mohammad

Alis chances o marching on Tehran had been dashed.

On Sept. 11, Ali and his brother Shuaus Sultana weredeeated and fed with only a ew ollowers. On Sept. 18,

Prince Salar ed-Dowleh, at the head o a group o Bakhti-

yari tribesmen, was deeated as he attempted to advance

rom Hamadan towards Tehran. By October, Russia and

Britain saw the total deeat o their counterrevolution

Shuster Takes On the BritishOn Oct. 17, Shuster held interviews with the London

Times and Reuters, in which, he said that neither Russia

nor England was interested in supporting nancial

reorm in Persia, to which the Times replied in insulting

terms on Oct. 19. Shuster wrote a long letter to the

editor, detailing Anglo-Russian collusion against Persia,

making the point that i what they had done against the

Persian government were done to a stronger country,

these would be considered acts o war. Writing that both

powers have undermined o his work, he declared there

was a deliberate agreement between a number o or-

eign legations, headed by the Russian legation, todeeat the execution o his policies. This campaign o

threats, nagging and general opposition which even de-

scended into vulgar personalities against me, and into

crude attempts to righten the Persian government,

ailed utterly, though it did entail a period o delay and

conusion in initiating certain nancial reorms.

In response, the Times wrote that Shuster ailed to

recognized that Russia and Great Britain exercise a con-

trol over Persia akin to that exercised over a minor by his

guardian, and charged that he had thrown in his lot

with the Persian nationals. Shuster commented that he

was unable to understand with whom the Times thought

I should have thrown in my lot while I was working in the

service o the Constitutional Government.

Persian patriots, without Shusters knowledge,

translated his letter to the Times and published it as a

revolutionary pamphlet throughout Iran.

His Majesty was not at all pleased with the turn o

events. Louis Mallet, Assistant Secretary o State at theForeign Oce, in a minute to Foreign Secretary Sir

Edward Grey, raged that Shuster had completely ailed

to appreciate that Persia is a country protected by Russia

and Britain and it is clear that the only way to preserve

the entente between us and Russia, which is o paramount

importance, is to get rid o Shuster (emphasis added).9

Grey ully agreed, and on Oct. 26, he sent the ollow-

ing dispatch to British Ambassador Sir George Buchanan

in St. Petersburg: Persian independence cannot, I agree,

be allowed to be marked by unriendliness either to Great

Britain or to Russia, and it is obvious that, in view o thegeographical situation, no Government which reused to

respect the interest o Russia could be tolerated by the

latter at Tehran. This we shall certainly impress upon

Shuster when the occasion arises. . . .10

Within days, Russian troops began landing in Iran at

9. Ibid.

10. Littleeld, op. cit., ootnote 7.

Constitutionalist orces in Tabriz, 1909.


20/24


Enzeli (Bandar e Anzali), and the British legation in-

ormed the Persian government that it was sending two

squadrons o Indian troops to Shiraz to act as consular

guards.

With these dispatches, the ouster o Shuster, the de-

struction o constitutional government in Iran, and its

occupation in the North by Russian troops, and in the

South by British troops were assured. Only a pretext

was needed, and two were ound very easily.

The rst was the assignment o an Anglo-Frenchman

named Lecore to examine the misappropriation o 1

million tumans in the city o Tabriz, in the Russian

sphere. This was despite the act that Lecore had al-

ready been employed by the Persian government or the

previous two years and was based in Tehran, also in the

Russian spherea act that had until now been ig-

nored. The second was the Persian governments order to

Shuster on Oct. 4 to conscate the Tehran estates o the

Shahs two brothers whose rebellion had collapsed, and

who were rightully deemed traitors by the Constitu-

tional Government. These two actions, which were ully

within the rights o any sovereign government, became

the pretext or militarily backed ultimatums.

Using the Lecore appointment as a pretext, on

Nov. 2, the British Foreign Minister sent instructions to

Sir George Barclay, their minister in Iran: [The] Rus-

sian government are sure to be annoyed at this appoint-

ment, and it is not unlikely that they will deend their

interests by energetic measures which might even go as

ar as an occupation o Northern Persia. You shouldadvise Shuster most strongly to do all in his power to

conciliate the Russian Legation, and point out the prob-

able result o continued provocation on his part. He

should be made to understand clearly that [the] Russian

government have it in their power to employ means

which would seriously impede the discharge o his

duties, and which it would be impossible or him to

withstand. He must be made to see that the Russians are

sure to take measures or the protection o their own

interests i administrative posts in their sphere o inter-

est are lled by British subjects, and that His Majestysgovernment cannot deprecate such measure as it would

be contrary to the spirit o the convention o 1907. . . .

When Barclay presented the orders o his govern-

ment, Shuster told him he could not comply, because,

although he was respectul o Anglo-Russian legiti-

mate interest in Persia, he could not recognize the ex-

istence in Persia o oreign spheres o infuence, a thing

which the Persian government had ocially reused to

do, and had actually orbidden me to do on more than

one occasion.

On Nov. 2, the same day that Barclay had received

his instructions, his Russian counterpart, Poklewsvki

Koziell, presented an ultimatum to the Persian Foreign

Oce, that the Treasury gendarmes be immediately

withdrawn rom the estates, and that those properties be

given to the Persian Cossacks. He reused to accept the

Persian protest against the landing o thousands o Rus-

sian troops on Persian soil.

Having just deeated the Anglo-Russian-backed re-

bellion o the ormer Shah, the Persian government was

not prepared to capitulate to these totally unjust de-

mands. The Cabinet consulted with Shuster, who, while

saying he could not intervene in the internal aairs o

Persia, did remark that i Persia were to make a stand, it

had a strong case, because Russia was acting without

law or justice. But in the ollowing days, Russian troops

continued to enter Irans North, and Anglo-R

americans fought for iran

Documents