Munitions 8: The Strange And Unendearing Story Of Basil Zaharoff

David Lloyd George had a special friend in the armaments business about whom he was publicly in denial. [1 ] In the murky world through which the Welshman had built his political career and abandoned the principles which he once held precious, none is stranger than his relationship with the international arms dealer, Basil Zaharoff. Neither Churchill, Sir Edward Grey, Asquith or Lloyd George mentioned him by name in their biographical histories, though we should always remember that the Censor intervened to ensure that details which the state wanted to remain secret were ruthlessly expunged before publication. But Zaharoff was there, lurking in the shadows of Whitehall, dealing and double-dealing mainly through the offices of Lloyd George when he was minister of munitions and later as prime minister. Asquith, in his last months in Downing Street, and Reginald McKenna, who stood-in at the Treasury for Lloyd George, even agreed that Zaharoff should be used to bribe the Greeks into war. [2] Who was this shadowy figure from whom the public record shrank after the war?

Basil Zaharoff was born into a middle-class home in Mugla, Anatolia in 1849 and died on 27 November 1936 in the height of luxury at the Hotel de Paris in Monte Carlo. His family were Greeks living in Turkish Asia Minor where persecution of Greek Orthodox Christians threatened genocide. They fled to Qdessa in Russia, but did not stay long, returning to the Greek quarter of Constantinople when the political upheavals had settled. [3] Zaharoff knew fear and poverty in his earliest years, but language and dialect came easily to him, and proved to be important building blocks for a self-propagandist and salesman who travelled the world to sell the armaments of death.

He has been repeatedly airbrushed from history, yet was historically important. He lied frequently about his origins, his age, his education, his early life in Turkey and wherever he claimed to be from or going to, yet was accepted into the wealthiest and most powerful villas and chateauxs in Europe between the late 1880s until his unremarkable death. He revelled in the mystery he sought to create about himself, in the women with whom he claimed to have consorted, in the deals and fortunes of which he loudly boasted. He bought honours and goodwill in France and Britain by acts of ‘philanthropy’. He gave generously from his alleged vast wealth to fund university chairs in Paris and Oxford yet like many benefactor before and since, he built his fortune on the misery of war and remained untroubled by its consequences.

Zaharoff had all the records and diaries which pertained to his life, destroyed. His biographer, Robert Neumann was exasperated by the lack of historical documentation. ‘You ask for his birth certificate. Alas! A fire burned all the church records. You ask for a document concerning him in the archives of the Vienna War Office; the folder is there but the document has vanished…. You obtain permission to inspect the papers in a law case….but no-one in the office can find them.’ [4] So successfully was he airbrushed from the accepted establishment history that no mention is made of him by Lloyd George in his Memoirs, and Zaharoff was ignored by almost every one George’s biographers. [5] The Times newspaper has in its accessible archives no reference to Basil Zaharoff between 11 May 1914, when he donated £20,000 to the French National Committee of Sports and 6 July 1918, when he made a ten guineas donation to a Concert on behalf of Belgium. [6] What does that tell us about his need for anonymity during the war, for Zaharoff was deeply involved in munitions and international politics during those years.

His entry in the Oxford Dictionary of National Biography is valuable because it avoids the mystique with which Zaharoff surrounded himself and itemises his early law-breaking and underhand dealings in a Turkish brothel, as an arsonist in the Constantinople fire-brigade, as an embezzler, a bigamist and an unscrupulous contractor in Cyprus before focussing on the single most salient fact. Zaharoff was an international arms dealer and, by all accounts, was very good in his chosen vocation. He began selling weapons for the Anglo-Swedish armaments firm Nordenfeldt, in Greece in 1877 but it was his salesmanship which became the trademark of corruption.

His Systeme Zaharoff included the use of large bribes to government and military officials and his technique of playing one country off against its neighbour first came to the fore in 1885 when he sold one almost unusable submarine to Greece and then two of the same type to their longstanding rival Turkey in 1886. Quick-firing guns became his chief specialism in the 1880s and 1890s. He had all of the qualities necessary to be a successful international arms salesman, including a complete lack of scruples, an ability to lie convincingly, a capacity to manipulate officials and politicians and a ready command of several languages. Crucially, and perhaps most importantly, he was a Rothschild man.

Zaharoff is credited with engineering the merger of the armaments firms Nordenfeldt and Maxim in 1888 before setting off across the world to sell their powerful new machine-gun in Russia, Chile, Peru and Brazil. [7] If Zaharoff engineered the amalgamation, it was the London House of Rothschild which issued the £1.9 million of shares and debentures to finance it. This was one of the first deals that Rothschilds undertook with Sir Ernest Cassel and marked the start of many years of direct involvement in the armaments industry. [8] Natty Rothschild retained a considerable holding in the company for himself and influenced the management and direction of the firm, for which Zaharoff was both the major international salesman and an influential broker. When Vickers took over the Maxim Nordenfeldt Guns and Ammunition business in 1896, it was once more Rothschild and Cassel, two of the most important bankers associated with the Secret Elite, [9] who financed the deal. Zaharoff became increasingly indispensable to them and was very clearly an important cog in the world-wide armaments business financed by Rothschild and Cassel.

Maxim-Nordenfelt owned a Spanish light-armaments works in Placencia, of which Zaharoff became a director in 1896. His connections in that country were cemented by a long-standing relationship with a royal duchess, by whom he allegedly had three daughters. From this vantage point he ‘created’ Vickers’ business in Spain where bribery and corruption were used on a grand scale. As a result, the Sociedad Española de Construcciones Navales, a branch of Vickers in Spain, was awarded exclusive naval construction rights for the Spanish Navy. Vickers not only sold weaponry to the Spanish armed forces but in 1909 formed a new naval arsenal in collaboration with the state. Zaharoff was also very active in Russia where, between1902–4, Vickers paid him a total of £109,000 which has a current equivalence of around £10.5 million. [10] In 1905, at the time of the Russo-Japanese War, he earned £86,000 ( an additional £8.4 million at current prices) in direct commission. Little wonder that he was hailed as Vickers’ ‘General Representative for business abroad.’ [11]

The Vickers Company records show that the ‘ever active’ Zaharoff used bribes to gain orders in Serbia, Russia and ‘probably’ Turkey. Bribes were used liberally as a part of Zaharoff’s business process when the customers were Spaniards, Japanese, South Americans, Russians, Turks or Serbs. In 1900 he was ‘greasing the wheels in Russia’ and in 1906, ‘doing the needful in Russia and Portugal, and administering doses of Vickers to Spanish friends’. [12] The British Ambassador in St Petersburg, Sir George Buchanan, assisted Vickers’ sales effort in Russia while criticising the German Krupp and French Schneider-Creusot firms for seeking to gain advantages in the same market as ‘too disgusting for words’ [13] This breathtaking hypocrisy places Vickers, their prime agent Zaharoff, and the British Ambassador right at the centre of the Russian military acquisitions which emboldened them to mobilise against Germany in 1914. Indeed, every overture to Russia made by Britain from 1905 onwards was occasioned by its value in an all out war with Germany [14] and both Vickers and Zaharoff played their part.

On the eve of the First World War Zaharoff had taken up residence in Paris. He represented Vickers on the Board of Societe Francaise des Torpilles Whitehead, and when Albert Vickers retired from the Board of the French ‘Le Nickel’ company in the spring of 1913 he was replaced by Zaharoff on account of his ‘great expert knowledge and powerful industrial connections’. [15] Le Nickel had originally been an Australian company based on the French-owned Pacific island of New Caledonia, but was bought into by the Rothschilds who had acquired most of the nickel refineries in Europe. The discovery of nickel reserves in Canada forced them into a market-sharing agreement with the American-Canadian International Nickel Company, [16] and nickel remained an invaluable asset as part of the steel-making process. The Rothschild-backed company operated two nickel plants in Britain and the cartel arrangement between Le Nickel and British nickel-steel manufacture ensured that prices were kept artificially high. [17] Thus by 1914 Basil Zaharoff, an adopted son of France, sat on the Boards of Vickers and Le Nickel, both Rothschild-financed and influenced.

Two events took place in Paris on 31 July 1914 that epitomised the chasm between good and evil. The ancient grudge of the warmonger wiped out any lingering hope by assassinating the peace-maker, while the wicked procurer was raised onto a public platform and promoted to the rank of Commander in the Legion of Honour by the French President. [18] At 9.20 pm. the charismatic French Socialist leader Jean Jaures was in the Café Croissant at Montmartre in Paris discussing the critical situation in Europe with the editors of his publication, L’Humanite. He was shot twice in the back of the head at point blank range. History has recorded the assassination as the work of Raul Villain, a 29 year old right-wing student, but no serious attempt was made to discover ‘whether any other motive power directed the assassin’s arm.’ [19] Villain was later acquitted of murder.

Days before, Jaures stood on a political platform in Lyon-Vaise and urged his international socialist brothers in France, Britain, Germany, Russia and Italy ‘to come together, united, to turn away from the nightmare’ which faced Europe. He raged against war and the makers of war, and his message carried great weight. [20] Jaures was in Brussels with the Scottish socialist leader James Keir Hardie on 29 July thanking the German Social Democrats for their splendid demonstrations for peace. With impassioned eloquence he urged workers throughout Europe to rescue civilisation from a disastrous war. [21] He returned to Paris after an emergency meeting with Rosa Luxemburg and was deep in conversation about how war could be averted when his life was taken.

Shock and consternation filled the streets of Montmartre, and the Paris police reacted by throwing a cordon around the palatial home of Basil Zaharoff at 41 Avenue Hoche. [22] It may seem an odd reaction, but in July 1914, Zaharoff the arms dealer was invaluable to the French government’s war preparation, and that very day President Poincare had announced his elevation to Commander of the Legion of Honour. The irony is odious. Jaures, the peace-maker, murdered in cold blood; Zaharoff, the merchant of death, hailed as an outstanding Frenchman. In fact, Parisians were too traumatised to turn their wrath against Zaharoff, and were dragged into war so quickly that the moment for instant retribution passed without incident.

As an arms dealer Zaharoff was pre-eminent in his time but he was much more than simply a multi-millionaire international salesman whose stock-holdings crossed every important munitions company in Europe. Rarely have there been so many uncorroborated stories about someone who was later dubbed ‘the mystery man of Europe’ by Walter Guinness in the UK Parliament. This unfortunate name-tag added mystique to Zaharoff’s clandestine activities. His association with Lloyd George has been immersed in a legend that distracts from an alliance which was intrinsically linked through the Secret Elite to the war effort. Allegedly, Lloyd George had enjoyed an extra-marital liaison with Zaharoff’s English wife, Emily Ann Burrows, [23] and this purportedly gave him some kind of hold on the Minister of Munitions. There was more than this to their unholy relationship.

[1] Hansard, House of Commons Debate 7 November 1921 vol 148 cc17-18.
[2] Stephen Roskill, Hankey, Man of Secrets, vol. 1. 1877-1918 p.239 and footnote.
[3] Richard Lewinsohn, Sir Basil Zaharoff, pp. 21-2.
[4] Robert Neumann, Zaharoff the Armaments King, p. 9.
[5] Donald McCormick, The Mask of Merlin, p. 201.
[6] The Times 6 July 1918, p. 9.
[7] Zaharoff, Basil, (1849-1926) Oxford Dictionary of National Biography (ODNB) Richard Davenport-Hines, at http://www.oxforddnb.com/view/article/38270
[8] Niall Ferguson, The House of Rothschild, The World’s Banker, 1849-1999, pp. 412-3.
[9] Gerry Docherty and Jim Macgregor, Hidden History, The Secret Origins of the First World War, p. 125.
[10] Source http://www.measuringworth.com/ukcompare/relativevalue.php
[11] Zaharoff, Basil, (1849-1926) ODNB Richard Davenport-Hines, at http://www.oxforddnb.com/view/article/38270
[12] Clive Trebilcock, Legends of the British Armaments Industry, 1890-1914 – A Revision, Journal of Contemporary History, vol.5 no.4 1970, pp. 3-19.
[13] Ibid. p.18 quoting Vickers Archives; Sir G Buchanan to Vickers 20 May 1913.
[14] Docherty and Macgregor, Hidden History, p. 233.
[15] Lewinsohn, Zaharoff, p. 110.
[16] Ferguson, The House of Rothschild, p. 354.
[17] D.G. Paterson, “Spin Off” and the Armaments Industry, Economic History Review, vol 24. issue 3 pp. 463-468.
[18] Guiles Davenport, Zaharoff, High Priest of War, p. 154.
[19] William Stewart, J. Keir Hardie, p. 340.
[20] Discours de Jean Jaures, Lyon-Vaise, 25 July 1915. atelier-histoire.ens-lyon.fr/AtelierHistoire/episodes/…/5
[21] Stewart, J Keir Hardie, p. 340.
[22] John T Flynn, Men of Wealth, p. 372.
[23] McCormick, The Mask of Merlin, p. 202.