part 2
How 50 thousand American advisors infiltrated Iran during Pahlavi

IRDC.IR: The presence of US advisors began with the arrival of a few of them, such as William Morgan Shuster, to Iran during the Qajar dynasty. This was continued with the employment of a few hundreds of the advisors during the first Pahlavi era, and then reached its peak in the year 1978 as 50 thousand of them entered Iran. The advisors’ influence, especially in the military field, was so great that they were even responsible for the appointment and discharge of Iran’s highest-ranking military officials.

In 1906, the Constitutional Revolution of Iran sought to establish a Western-oriented, democratic civil society in Iran, then known as Persia to the outside world. The movement forced the Shah to agree to the election of the first Majlis, the opening up of a relatively free press, and a number of other reforms.

After being recommended bythe U.S. government to the Iranian minister in Washington, Shuster was appointed by the Majlis to help manage the country's financial position. Persia was on shaky financial footing at the time due to heavy debts accumulated by the Qajars, the Persian royal family, to the two colonial powers of Great Britain and Russia in Iran. Great Britain and Russia had previously carved up Persia into two spheres of influence pursuant to the Anglo-Russian Convention of 1907.

During the second Pahlavi era, especially following the 1953 coup, American advisors were more and more present in Iran. The US advisors who had entered Iran with the Allied forces’ occupation of the country on the sidelines of WWII, were to have great influence in the country up to the time the revolution found success and even in the few months after the revolution.

The advisors had sent their desired people to various organizations in Iran, ranging from cultural and scientific places such as universities, to the management and planning organization, banks, the oil company, gas company, civil aviation organization, ministry of agriculture, ministry of post, telegraph, and telephone, and especially armed forces. This is while the military advisors would do whatever they had in power to encourage the Shah to buy more and more weapons from the US.

US advisors were seeking to boost their influence in Iran to whatever boundary that they would meet, aiming to lead Iran’s affairs from cultural to scientific, from economic to military.

In the Iranian calendar year 1328, the US government requested capitulation for its military advisors in Iran. This was the beginning of great change in Iran, since it became a prelude to the passage of the capitulation law in the Iranian Majlis, something that would give all the American advisors and relatives the right to consular judgment. The capitulation practically meant that Iran lacked judicial sovereignty over the advisors.

There is no doubt that the advisors were here to stay. They were sure to have meant to guarantee three things in Iran: First, to make sure that the USSR was not yielding influence in Iran; second, to guarantee the safety and existence of Israel; and third, to make sure about the flow of Iranian oil to Western markets.

US advisors enter Iran

The first request to buy American-made defense equipment was made when Reza Khan was minister of war. Along with requesting weapons, Reza Khan, who was then prime minister and minister of war, had also requested the US for consultants. The US charges d’affaires had noted that selling military equipment entailed sending instructors and military consultants.

But following the WWI, the need to refurbish Iran’s economy had necessitated the use of foreign experts. Therefore, ten years after the expellation of Shuster, more effort was made to employ American consultants in Iran. The government of Ahmad Qavam (known as Qavam ul Saltaneh) was the first government that intended to receive American consultants. It somehow paved the way for their presence in the country. Accordingly, as the prime minister, Qavam presented the Majlis with a bill on the employment of financial consultants from the US. The bill was passed in the 119th session of the Majlis in the Iranian year 1301. Following that, Arthur Millspaugh was employed by the Iranian government as the director general of the financial department for a period of five years as a bid to set right Iran’s financial affairs.

Arthur Chester Millspaugh, PhD, (1883–1955) was a former adviser at the U.S. State Department’s Office of the Foreign Trade, who was hired to re-organize the Finance Ministry of Iran from 1922–1927 and 1942-1945. 

With his help, Iran became independent of foreign loans to maintain its economy. Back then (before World War II), the Iranian public viewed the United States as a liberator from British and Russian dominance, as well as the country which would make Iran prosperous and rich. Up until the Cold War, Millspaugh tried, unsuccessfully, to influence the U.S. State Department's policies toward Iran.

Millspaugh was to be assisted by nine other consultants, appointed by him, who would receive monthly salaries of 7,500 to 10,000 dollars. They entered Iran toward the end of the Iranian year 1301 to start their job. Thus, as the head of Iran’s financial department, Millspaugh found great privileges in the country. He had been missioned to set right Iran’s failing economy of the post-WWI era, deal with an empty treasure, tackle corruption, bribery, and embezzlement among Iranian officials, and end poverty.