Munitions 9: Zaharoff And The Secret Elite

Amongst many of the allegations against Basil Zaharoff is the claim that he was an advisor to Lloyd George and influenced British foreign policy. [1] That Zaharoff was used by the Secret Elite as an arms procurer and expert is unquestioned; that he dictated foreign policy during the war is an exaggeration too far. He was never a member of the Secret Elite but had close associations with those who were, including Sir Arthur Steel-Maitland and Leander Starr Jameson. [2] Zaharoff shared a financial stake in the Sunday Times with Steel-Maitland, a Fellow of All Souls and associate of Alfred Milner, [3] and Jameson, the man whose folly brought about the fall of Cecil Rhodes. [4] He used his money to buy favour and honours. He was the richest of salesmen and had no qualms about the source of his wealth, but the extent of his influence between 1914-18 had much less impact on foreign policy than in the post war era.

What was absolutely critical was his dominance of the world of international armaments sales. The First World War represented the peak of his career and influence, and he was described as ‘virtually the minister of munitions for all the allies’. [5] Wild claims continue to circulate that every allied government consulted him before making plans for their grand attacks during the war. More convincing is the allegation that it was he who ensured that governments refrained throughout the war from attacking and destroying mines, factories, blast furnaces and armaments production sites, like Briey and Thornville in which he had an interest. [6]

As we have shown in our blogs in November 2014, Briey lay just kilometres from the French border and produced the iron and steel that provided the bulk of Germany’s armaments. It was absolutely essential to Germany’s war effort and the single most effective way to defeat her would have been to destroy it. By early 1915, the German authorities admitted that they could not last another six months in the war without the Briey supplies. [7]

At the end of 1916 Zaharoff was disturbed by the demands of the French Minister of Munitions, M. Albert Thomas, for the bombardment of the Briey mining and industrial complex. He is said to have consulted Lloyd George about the French Minister’s demands and, consequently, orders to bombard Briey were cancelled. [8] Four disastrous years later a member of the chamber of deputies, M. Eduoard Barthe, declared angrily in the French parliament that ‘either owing to the international solidarity of heavy industry, or in order to safeguard private interests, orders were given to our military commanders not to bombard the factories of the basin of Briey exploited by the enemy during the war. I declare that our aircraft received instructions to respect the blast-furnaces which were smelting the enemy’s steel.’ [9]

Tales of his Midas-like fortune lent him the aura of exaggerated power. One of the most senior foreign office career diplomats, Viscount Bertie of Thame, British Ambassador at Paris, was clearly impressed by Zaharoff,when he wrote: ‘He [Zaharoff] owns half the shares in Vickers Maxim, is the largest shareholder of the Monte Carlo Casino and has big holdings in American Railways and Steel Trust shares; I am told on excellent authority that he is worth over ten millions sterling. He is a personal friend of Walter Long, Bonar Law and Steel-Maitland and knows most of the present British Cabinet. He is said to have many of the leading French politicians in his pocket. I have known him for over ten years. I believe him to be a very just man though hard. He is anti-Semitic and his numerous enemies accuse him of being a poseur and to be prone to exaggeration. … I have a great personal regard for him.’ [10]

Many of these claims were excessive; his holdings in Vickers were moderate though his importance to the firm itself was incalculable. He did make financial loans to the casino but his syndicate only took control in the mid 1920s. [11] What is relevant here is that Walter Long, Bonar Law, Steel-Maitland, all with close association to the Secret Elite, men who held posts in Asquith’s coalition government of May 1915, [12] knew Zaharoff, and were aware of both his wealth and his international contacts. He was also a personal friend of Sir Vincent Caillard, the financial director of Vickers from 1906, and they shared a deep interest and understanding of the Ottoman Empire. Caillard had been the British delegate to the Ottoman Debt Council before taking his senior position at Vicker’s. He and Zaharoff corresponded regularly [13] and it is from the letters and telegrams that have survived the many foreign office culls over the last century that the evidence about Zaharoff’s links to two British prime ministers has emerged.

Basil Zaharoff remained a social outsider in London in 1915, but had close connections to the French prime ministers, Astride Briand and Georges Clemenceau, and the nationalist politician, and sometimes prime-minister of Greece, Eleftherios Venizelos. By 1915, Zaharoff was more attracted to social acceptance and respectability in his adopted France and in Britain too, where he sought public recognition through the honours system. This was his vulnerability; for this he willingly played a secret role to assist the allied cause. While Sir Vincent Caillard was lobbying Asquith and Lloyd George on behalf of Vickers, Zaharoff was urging his friend Caillard to get him a peerage. [14] He boasted that he could ‘make the Greek government join the Allies and start fighting the Bulgars within 20 days.’ [15] and this claim was passed to the British prime minister.

Asquith believed that it was an action worth trying, and a sum of £1,487,000 was transferred from the Bank of England to Caillard’s account at Barclay’s Bank, from where, with the approval of Asquith and Briand, it was assigned to the Bank of France and lastly into Zaharoff’s personal account in Paris. [16] Zaharoff became a paid agent of the allied governments. Not a policy maker, a paid agent. The funds were not for his personal use but to assist him to buy pro-German newspapers in Greece and bribe ‘about 45 Deputies and one Frontier Commissioner’ so that an incident could be manufactured to bring Greece into the war. [17]

It was all top secret. Neither the War Office nor the War Committee inside the Cabinet knew about Zaharoff’s mission. Whether Asquith was anxious to make a dramatic attempt to win over the Greeks before the retreat from Gallipoli or because he knew that Kitchener and the military establishment would have tried to veto the project, Zaharoff’s clandestine involvement was suppressed with a ferocity rarely seen in privileged Cabinet circles.

Asquith confided in his trusted Secret Elite secretary, Maurice Hankey in December 1915, [18] but otherwise the secret was strictly limited to Reginald McKenna, the Chancellor of the Exchequer, who had to be involved because of the enormous sums, and Sir Vincent Caillard at Vickers. Political secrets are rarely kept absolutely and Caillard in his turn confided in another ‘behind-the-scenes fixer’ Lord D’Abernon, an international banker close to the Secret Elite leader, Alfred Milner. [19] While Grey and Kitchener were deliberately kept outside this tight circle of cognoscenti, Asquith pursued this design through Zaharoff. [20]

Thus when ‘the old Greek’ [21] was seen entering or leaving 10 Downing Street, the assumption made was that he was involved in armaments business or influencing Asquith and Lloyd George to his own financial benefit. In fact a series of proposals linked to bribes and inducement were put forward by Zaharoff but that did not equate to setting policy. He was also the recipient of funds from prime minister Briand in France to counter German propaganda in Greece. [22] Zaharoff was the go-between and would-be facilitator on behalf of the pro-allied Venizelos but he was never an insider. Nor did his plans bring instant success. Greece eventually entered the war but not until May 1917, by which time many other factors had come into play. Zaharoff, of course, claimed the credit.

When Lloyd George took over at 10 Downing Street in December 1916, he used Zaharoff as it suited him, if not as a pawn, certainly as a player in a game of deadly chess. The old arms dealer proved his worth in opening back-channels which Lloyd George used to influence politicians in the Balkans. As will be detailed in a future blog, Zaharoff was sent on a clandestine mission to Switzerland in 1917, carried secret promises from the British government to the Ottomans, and was even used to mislead the Turkish government about the future of Mesopotamia and Palestine.

Zaharoff spent a good deal of time in England from 1916-1918, and his dearest wishes were granted. He was permitted an audience with King George V, who allegedly considered him a distasteful person, awarded the Grand Cross of the British Empire in April 1918, and eight months later he received his highly cherished Grand Cross of the Order of the Bath.

Of all the crimes levelled against him, perhaps the worst is that he continually sought to prolong the war for his own ends. Zaharoff boasted to the Greek prime minister in 1916 that Germany was very vulnerable and that ‘only incredible stupidity on the part of the allies could give her victory.’ He added, ‘I could have shown the Allies three points at which, had they struck, the enemy’s armament potential could have been utterly destroyed. But that would have ruined the business built up over more than a century…’ [23] As we have shown a previous blog, (Briey: 1 La Non-Defence, 12 November 2014.) Zaharoff was absolutely correct in stating that German armaments production could easily have been wiped out. He was very wrong, however, in insinuating that only he knew this. The evidence we have previously presented proves beyond any doubt that key men in London and Paris were well aware that German armaments production could have been wiped out by the summer of 1915. They had the ready means to do it, including the destruction of Briey and the blockading of German imports of materials essential to their armaments industry, but the Secret Elite very deliberately chose not to in order to prolong the war.

When Zaharoff’s advice was sought in 1917 about the advisability of bringing peace to Europe he is reputed to have insisted that the war had to be seen through, right to the end. [24] That of course had always been the Secret Elite objective; the absolute destruction of Germany. So much selfishness; so much misery. Like the vast majority of rich old men who had deliberately caused this war in which tens of millions of young men were slaughtered or badly maimed, Zaharoff died peacefully in his bed.

His final years were spent as a recluse in Balincourt (France) protected by body-guards day and night. His records and memoirs were destroyed on his orders. He went to extreme lengths to safeguard his anonymity, including the buying up of every postcard printed of his private castle in Balincourt. Inquisitive journalists and private detectives ‘disappeared’. [25] One can only hope that his obsessive fear of assassination was predicated on the realisation of the depth of the evil for which he had been responsible. Probably not.

[1] http://hansard.millbanksystems.com/commons/1922/mar/27/foreign-affairs Mr A Herbert, 27 March 1922 vol.152, cc1026-28.
[2] Carroll Quigley, The Anglo-American Establishment, p. 313.
[3] Ibid., p. 95.
[4] Ibid., pp. 46-48.
[5] Jean-Marie Moine, Basil Zaharoff (1839-46) ‘Le Marchand de Canons’ Ethnologie française nouvelle serie, T. 36, No. 1, De la censure à l’autocensure (Janvier-Mars 2006), p. 143.
[6] Donald McCormick, The Mask of Merlin, p. 206.
[7] Maurice Barres, L’Echo de Paris, 25 February to 8 March, 1918.
[8] McCormick, The Mask of Merlin, pp. 205-6.
[9] Clarence K. Streit, Where Iron is, There is The Fatherland. p. 46.
[10] Lord Bertie of Thame, memorandum on Zaharoff, 24 June 1917, TNA: PRO, FO 800/175.
[11] Zaharoff, Basil, (1849-1926) Oxford Dictionary of National Biography (ODNB) Richard Davenport-Hines, at http://www.oxforddnb.com/view/article/38270
[12] Quigley, Anglo-American Establishment, p. 141.
[13] J. Mailo & T. Insall, Sir Basil Zaharoff and Sir Vincent Caillard as instruments of British policy towards Greece and the Ottoman Empire during the Asquith and Lloyd George Administrations, 1915-18. International History Review, vol. 34. issue 4, 2012, pp. 819-33.
[14] Ibid., p. 822.
[15] Ibid., p. 826, letter to Caillard, 12 November, 1915.
[16] Ibid., p. 824.
[17] Ibid., pp. 826-828.
[18] Stephen Roskill, Hankey, vol. 1, p. 239.
[19] Quigley, Anglo-American Establishment, p. 246.
[20] Mailo & Insall, Sir Basil Zaharoff and Sir Vincent Caillard, International History Review, vol. 34. issue 4, 2012, pp. 824-5.
[21] Stephen Roskill, Hankey, vol. 1, term used by Hankey footnote page 239.
[22] Richard Lewinsohn, Sir Basil Zaharoff, p. 126.
[23] Donald McCormick, The Mask of Merlin, p. 206.
[24] Moine, Basil Zaharoff (1839-46) ‘Le Marchand de Canons’ Ethnologie française nouvelle serie, T. 36, No. 1, De la censure à l’autocensure (Janvier-Mars 2006), p. 144.
[25] Ibid., p. 140.