When the disturbances in Iraq broke out in May 1941, the Director of the Bagdad Institute was away on a tour of Persia and Afghanistan.  The Institute continued to function until the last moment, when the staff retired to the Embassy.

On 1st July 1941, the Institute Club was reopened at the White Lodge, on which site a new Institute is eventually to be built.  Some 200 members and guests attended a formal ceremony  - among them the Prime Minister of Iraq and all members of the Cabinet, the British Ambassador, the American Minister, the Egyptian and Saudi Arabian Charges d'Affaires, senior officers of the Iraqi and British armies, the Directors-General of all government departments and many members of the British and Iraqi communities.

With a shady garden and terrace on the river, the Club is pleasantly situated and by October, 83 students were attending classes, about the same number as before the disturbances, and by the end of the year the record number of 143 was reached.  A women's class was started and a Ladies' Day held weekly.  The weekly At Homes in the White Lodge Garden were attended by an average of 40 members of the Club.

Arrangements were put in hand for a new Institute in Mosul.  Search for a suitable permanent building has so far been unsuccessful, but in January 1942, work began in what had previously been the French consulate.  Thirty-five students registered and thirty-seven schoolmasters who had been encouraged by the Director of Education to attend special classes for teachers.