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Leo Valiani and Enrico Cuccia: Iran in the 1950s

Published online by Cambridge University Press:  01 January 2022

Fulvio Coltorti
Fulvio Coltorti*
Affiliation:
Mediobanca Research Department, Milan, Italy
*
Fulvio.coltorti@mediobanca.it
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Abstract

This essay details Leo Valiani's mission to Iran in 1952–53 on behalf of Mediobanca, in order to identify opportunities to promote investments for the development of both the country itself and Italian exports. The events are reconstructed through Valiani's correspondence with Enrico Cuccia (Mediobanca's CEO). A new picture of Valiani as banker emerges, effective on the ground, but also a subtle observer of local situations and prospects. The documents discussed herein highlight certain weaknesses in Mosaddeq's policies, mainly the weak relationship with the heads of finance. The oil dispute between Mosaddeq and the British and the coup orchestrated by the latter in collaboration with the Americans in order to bring down Mosaddeq's government complicated the picture so that every form of co-operation had to be postponed.

Type
Research Article
Information
Iranian Studies , Volume 46 , Issue 4 , July 2013 , pp. 601 - 623
Copyright
Copyright © 2013 The International Society for Iranian Studies

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References

1 Varsori, A., “Il rapporto tra Gran Bretagna e Italia nel 1945–56,” in La politica estera italiana nel secondo dopoguerra (1943–1957) (Milan, 1993), 206–246.Google Scholar The Peace Treaty was signed and ratified in 1947.

2 See Mediobanca's historical profile in various editions of Annuario R&S, the annual directory of major Italian groups, published by Ricerche e Studi, Milan.

3 Valiani, Leo, Sessant'anni di avventure e battaglie. Riflessioni e ricordi raccolti da Massimo Pini (Milan, 1983), 136.Google Scholar Valiani also described the series of events in the interview he gave for Comit's Historical Archive. (Sandro Gerbi, “Valiani, le avventure di un ‘banchiere’,” Corriere della Sera, October 18, 1999).

4 The documents on which this paper is based are owned by the IntesaSanpaolo Historical Archives, within the legacy of Banca Commerciale Italiana (ASI-BCI), Foreign Service, archived under Leo Valiani's activities abroad (VAL-E) series.

5 New name adopted by the Kingdom of Persia in 1935.

6 In 1954, the company changed its name to BP (British Petroleum Company). Oil was discovered in 1908. Reference should be made to the official historical profile published on the company's website.

7 The House of Commons approved the acquisition of 51 percent on 17 June 1914 with a majority of 254 to 11. The cost was 2.2 million pounds, an amount that was more than recovered through profits on the transaction and the availability of oil needed to fuel warships as a substitute for coal. It has been estimated that oil profits alone from 51 percent of the future BP covered the cost of all British warships after 1914; see Gilbert, Martin, Churchill: A Life (London, 1993), 180Google Scholar; Jack, Marian, “The Purchase of the British Government's Shares in the British Petroleum Company 1912–1914,” Past and Present 39 (1968): 139–68.CrossRefGoogle Scholar

8 It was at this time that the Tudeh was established, a political party based on Marxist thought, with the tacit consent of the occupying forces; Katouzian, Homa, Musaddiq and the Struggle for Power in Iran (London and New York, 1999), 39–44.Google Scholar

9 William E. Warne was the Minister in Charge of Technical Cooperation in Iran. Material on the Point Four Program of Technical Assistance to Developing Nations can be consulted online at the Harry S. Truman Library & Museum website: http://www.trumanlibrary.org.

10 “I think the Iranians were absolutely right in that oil controversy. I mean, if you had seen the way that the British were running that oil deal. It was pure colonialism” (W.E. Warne, interview by N.M. Johnson, Oral History Interview, Harry S. Truman Library & Museum, May 21, 1988, 98).

11 Mohammad Mossadegh (1882–1967) came from an affluent family and was one of Iran's largest landowners. He studied political science in Paris and earned a university degree in Law in Neuchatel, Switzerland, writing his thesis on wills under Islamic law, which was published in France in 1914 (Musaddiq, Mohammad, Musaddiq's Memoirs, ed. and intro. Katouzian, Homa (London, 1988), 157–8.Google Scholar He led a simple life despite his wealth: “it is difficult to stay clean and pure, what one must do is to forgo a lot of things and to live frugally” (Fariba Amini, “Remembering Mossadeq,” Iranian.com, August 18, 2011). The American media described him as highly emotional, capable of bursting into tears or fainting in the middle of a political speech (Time, January 7, 1952; New York Times, August 19, 1953). Time magazine named him “Man of the Year” in 1951, choosing him over Eisenhower. He created a policy of “negative balance,” opposing the British stronghold on oil installations in the south, while granting oil development permits to the Soviets in the north. He fought for the introduction of reforms to modernize the country (Katouzian, Musaddiq and the Struggle for Power in Iran, 128–36).

12 According to Stefano Casertano (Stefano Casertano, “Le peripezie della Supor per superare il blocco del petrolio persiano,” Staffetta Quotidiana, June 26, 2009), Supor was established by Nikolai Soubotian, a doctor working at the Iranian Embassy in Rome, who also secured the contract for the purchase of oil loaded on the Miriella.

13 Still in 1988, 80 percent of the population was illiterate (Warne, interview, 103).

14 Letter from L. Valiani to C. Bombieri and G. Zuccoli, August 18, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 3.

15 Ibid.

16 Bank Melli Iran was the first Iranian commercial bank. It was established as a private entity in 1928. In 1931, parliament granted it the power to issue currency. It took over other central bank functions as well (public issues, the regulation of monetary circulation and bank supervision), which it continued to perform until 1960 when a central bank was established.

17 Ibid.

18 Ibid.

19 In this respect, reference should be made to Giorgio Carlevaro, “Quando Ettore della Zonca forzò il blocco del petrolio persiano. Un resoconto inedito dell'affare Rose Mary,” Staffetta Quotidiana, June 5, 2009. Della Zonca used the company EPIM (Ente Petrolifero Italia Medioriente—former Italo-Mexican oil body) of which he was managing director.

20 Ibid.

21 Ibid.

22 Ibid.

23 Letter from L. Valiani to C. Bombieri and G. Zuccoli, August 13, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 3.

24 Ibid.

25 Letter from Mediobanca to L. Valiani, August 28, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

26 Letter from L. Valiani to E. Cuccia, September 3, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

27 Ibid.

28 Letter from L. Valiani to E. Cuccia, September 8, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

29 Letter from L. Valiani to E. Cuccia, September 6, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

30 Ibid.

31 Ibid.

32 Ibid.

33 Ibid.

34 Letter from L. Valiani to E. Cuccia, September 8, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

35 Overseas Consultants, Inc., Report on the Seven Year Development Plan for the Plan Organization of the Imperial Government of Iran, vol. IV (New York, 1949).Google Scholar

36 Letter from E. Cuccia to L. Valiani, September 16, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

37 Ibid.

38 Ibid.

39 Ibid.

40 Ibid.

41 Letter from L. Valiani to E. Cuccia, October 14, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

42 Letter from E. Cuccia to L. Valiani, September 16, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

43 Ibid.

44 Letter from L. Valiani to E. Cuccia, October 14, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

45 Ibid.

46 Ibid.

47 Letter from L. Valiani to E. Cuccia, November 28, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

48 Ibid.

49 Letter from E. Cuccia to L. Valiani, December 6, 1952; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

50 Ibid.

51 Ibid.

52 Ibid.

53 Letter from L. Valiani to E. Cuccia, January 3, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

54 Letter from L. Valiani to E. Cuccia, January 4, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

55 Ibid.

56 Letter from L. Valiani to E. Cuccia,14 (15?) January 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

57 Letter from L. Valiani to E. Cuccia, January 3, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

58 Ibid.

59 Donald N. Wilber, Overthrow of Premier Mossadeq of Iran, November 1952—August 1953 (CIA, 1954), part I of the Preliminary Steps. First published online by the New York Times on April 16, 2000; also published under the title Regime Change in Iran (Nottingham, 2006).Google Scholar

60 Musaddiq, Memoirs, 270; Warne, interview, 92–3.

61 Letter from L. Valiani to E. Cuccia, January 3, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

62 Letter from L. Valiani to E. Cuccia, January 4, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

63 Ibid. Valiani was himself a journalist and, in 1970, became one of the main editorialists for the Italian newspaper Corriere della Sera. In addition, Enrico Cuccia's first job was working as a journalist for the Roman newspaper Il Messaggero.

64 Capitalized in the original. In 1953, Mediobanca's share capital was 3 billion Italian lira. Its shareholders were Banca Commerciale Italiana (35 percent), Credito Italiano (35 percent) and Banco di Roma (30 percent).

65 Letter from E. Cuccia to L. Valiani, January 10, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

66 Ibid.

67 Ibid.

68 Radiogramme from E. Cuccia to L. Valiani, January 16, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

69 Letter from E. Cuccia to L. Valiani, January 17, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

70 Letter from L. Valiani to E. Cuccia, January 14 (15?), 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

71 Ibid.

72 Ibid.

73 Ibid.

74 Letter from L. Valiani to E. Cuccia, January 17, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

75 Ibid.

76 Letter from E. Cuccia to A. Paveri Fontana, April 8, 1953; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.

77 Source: Mediobanca's private archives.

78 In truth, the British boycotted any attempt to settle, never losing hope of the prime minister being overturned. Eisenhower's similar approach was the opposite of Truman's and tended to see Mossadegh as a “communist.” Truman had repeatedly attempted to mediate (Diba, Farhad, Mohammad Mossadegh: Political Biography (London, 1986)Google Scholar; see also the Public Papers of the Presidents of the United States, http://www.gpoaccess.gov/pubpapers).

79 “The C.I.A. … viewed its covert action in Iran as a blueprint for coup plots elsewhere around the world, and so commissioned a secret history to detail for future generations of C.I.A. operatives how it had been done” (New York Times, 18 June 2000). This is the tone of the brief historian's note to the document. The New York Times published the full document (“which remains classified”). It is believed that the newspaper received it in a context which, unlike previous assessments, involved intense criticism of the operation; Secretary of State Madeleine Albright attributed the unfavorable development of Iran into an Islamic Republic in 1979 to the operation and consequent restoration of the shah's absolute and authoritarian monarchy. See also “Manière de voir,” Le Monde Diplomatique, June–July 2007.

80 The first plan began with Her Majesty's Secret Service (SIS, British Secret Intelligence Service). At that time, the director of the CIA was Allen W. Dulles—brother of Secretary of State John Foster Dulles—while Kermit Roosevelt—former President Theodore Roosevelt's grandson—headed the Near East and Africa division. The US Department of State gave the go-ahead provided that the British government undertook to rapidly settle the oil question with the new Iranian government “in a spirit of good will and equity”; see Wilber, Overthrow of Premier Mossadeq of Iran, v–vi.

81 Mossadegh strenuously defended himself, but to no avail. On 3 August 1956, having completed the term of his sentence (he had been arrested and imprisoned on 20 August 1953), he was put under house arrest for life at his Ahmad-Abad residence. He died in 1967. On the twelfth anniversary of his death, over 1 million people visited his tomb (Musaddiq, Memoirs, translator's note: 420–21; and Katouzian, Musaddiq and the Struggle for Power in Iran, 194).

82 Letter from R. Aghababian to L. Valiani and E. Cuccia, May 16, 1954; ASI-BCI, Servizio Estero, VAL-E, cart. 5, fasc. 2.