Typical cartoon representation of the Kaiser, the man blamed for war, trying to eat the worldOne essential point has to be reinforced. The Secret Elite ensured that plans had long been in place for war. Any other claim was a lie. The elites had worked assiduously to ensure that the conflict they instigated would appear to be caused by Germany, and written up as such by their pliant historians and journalists. [1]

The absolute advantage rested with the powers behind the scenes in Britain who controlled, among much else, the Foreign Office and Cabinet. They knew that the Empire was going to war – they had planned it after all – and they knew that a prolonged war was necessary to crush Germany economically, commercially and industrially. A short military conflict that was over by Christmas would not have achieved that. Germany, forced to fight for her survival on two fronts, encircled as she was by the proverbial ring of steel, had the most compelling reason for staking its survival on a short war. Theoretically, Germany was cut off from food imports, materials essential for armaments production and oil but, as we have seen in previous blogs, [2] the London elites took steps to facilitate a long struggle by enabling her access to them.

Britain herself had no indigenous oil and in the late nineteenth century had been reliant on America, Russia or Mexico for supplies. This dependency on foreign companies was a cause for concern in times of peace but was completely unacceptable in the event of war. [3] The Secret Elite had to ensure that British companies rectified this deficiency before unleashing the dogs of war.

It should be appreciated that the starting point was not 1914. Long before that date, the strategic importance and economic necessity of securing oil supplies preoccupied minds inside the Secret Elite. We are told that the most outspoken and influential champions of oil, and indeed the development of an oil policy, were Winston Churchill as First Lord of the Admiralty, and Admiral Jackie Fisher, who chaired the Government’s Royal Commission into Oil Fuels in 1912. [4] Unquestionably they were important figure-heads. Churchill was a personal friend of Nathaniel Rothschild, whose advice he cherished. Churchill and Fisher were strongly supported by men with global ambitions for Britain, and ever protective of its Empire. Thus political, financial, commercial, strategic and imperial interests were all interlocked in the drive to secure oil; a drive which was well underway, but given little publicity, in the first decade of the twentieth century.

British interests in Romanian oilfields included the Royal Dutch/Shell Company, an amalgamation in 1907 of the Royal Dutch Petroleum Company and the Shell Transport and Trading company, which in turn had close links to the Rothschilds. As companies began to grapple with the detailed requirements and long term financial commitment that was a prerequisite for successful development, mergers and amalgamations became the order of the day to cut costs and increase profits.  Extracting oil from often remote sources was dangerous, and required complex and technically advanced transport arrangements for the refined, highly volatile petroleum.

Shell Trading Company advert around 1900.

Marcus Samuel, founder of the Shell Transport and Trading Company, understood the need for purpose built tankers that could be loaded, moved and unloaded in complete safety. He began by converting merchant ships to tankers that carried oil from Rothschild fields in Russia. [5]

In 1906 fields were acquired in Romania, and by way of further preparation in 1908, two new companies were created; Bataafsche Petroleum Maatschappij in Holland and the Anglo-Saxon Petroleum Company in London. Shell Transport and Trading placed all its assets in these companies which also held the assets of Royal Dutch/Shell. [6] Every possible competitor was bought up or absorbed. Between 1910–1914 fields were acquired in Russia (1910), Egypt (1911), Venezuela (1913) and Trinidad (1914). Henry Deterding, chairman of Royal Dutch/Shell, [7] later claimed that the group carefully cut the ground away from Germany’s feet. This was achieved partly by getting into oil-fields in which Germany hoped to establish herself, and partly by extending Royal Dutch/Shell influence in the German market, and in effect over German internal affairs’. [8]

In Persia and the Arabian Gulf, geologists had determined that the region was a prime candidate for oil exploitation. There were, however, a small but important number of immediate problems. The land technically belonged to the Ottoman Turks and the Persian rulers. To further complicate matters, Russia had long held designs on the same piece of territory in order to establish a warm water port. At the beginning of the twentieth century the Conservative Foreign Secretary, Lord Landsdowne, and his successor in the Liberal government, Sir Edward Grey, maintained identical policies approved by the Secret Elite. Quietly, and with no mention of the word oil, they extended British interests in the region and kept warships in the Gulf.

Arabian Gulf around 1900

The Secret Elite, the Foreign Office and the Admiralty were, as always, inextricably linked with forward planning to meet the Empire’s needs. Concessions were bought, officials were bribed, explorations were started and treaties established. It took more than two decades of painstaking preparation, but when everything was in place, a local champion had to be found to promote the purchase of a company that both offered reliable quantities of oil and necessitated a British presence on the direct route to India. They approached a number of chosen individuals in the early 1900s and encouraged them to turn their attention to the possibility of making a fortune by investing in the future of Persian oil. William Knox D’Arcy, a wealthy gold mine director, became the front-man for British investment in Persian oil. Ultimately, however, the real power behind it was the unspoken ambitions of both the Admiralty and the Foreign Office, and the men behind them. They created a company which was ‘little known but intimately tied to the British foreign office and the secret intelligence services worldwide in the quest for control of future oil discoveries. The company was called the D’Arcy Exploitation Company.’ [9]

William Knox D'Arcy, English-born Australian investor, who bribed the Shah into an oil concession.The Royal Dutch/Shell view of D’Arcy was disdainfully suspicious, and raised the spectre of Secret Elite involvement. [10] ’The only point that is still not clear is whether he [D’Arcy] undertook this extremely important affair entirely on his own initiative and at his own expense, or from the very outset, as a confidential agent of political circles representing British Imperialism. [11] The official History of the British Petroleum Company took a different view. D’Arcy’s action ‘was simply a personal initiative for profit’ and it dismissed as nonsense the ‘most Machiavellian of motives presumed to account for his investment’. [12] Well, they would, wouldn’t they?

Of course he was being used, and willingly so, for oil in Persia was supposed to make him an even greater fortune, and it brought him a credibility within the Secret Elite. In 1901 the Shah of Persia, in exchange for a bribe of $20,000, awarded D’Arcy a ‘firman’, or royal concession with the rights to drill for oil for a period of sixty years provided the Shah received 16 per cent of the profits from whatever oil was discovered. [13] It was a transaction of historic importance, and the Shah’s wasteful, extravagant lifestyle heralded the era of oil in the Middle East with a bribe. It would not be the last.

Shell merger telegram

D’Arcy’s venture in Persia was no instant success. By 1903, only a few traces of oil had been found, and he wanted out. Behind the scenes in London a frantic search was underway to find the right sort of dependable man to ensure that the concession was not abandoned. A British oil company which had been set up in Burmah by a Scottish  investment group was lured towards the Persian concession. Burmah Oil was entirely British in ownership and it amalgamated with D’Arcy and Royal Dutch/Shell in 1908. It was a combine that required the word ‘British’ stamped all over it to send out messages both to investors and to the international community. D’Arcy asked Lord Alfred Milner, leader of the Secret Elite, to take the post of Chairman of this new company, but Milner was the puppet-master, not a marionette, and declined the offer. [14]

The published prospectus for the new company caused apoplexy in the corridors of power. There in black and white it stated that it was the Admiralty that had suggested developing Persia. [15] The company was immediately informed that if this became a matter of public comment, the Admiralty would deny the statement. What an amazing faux-pas. The carefully constructed secret plan for Persia, masked by commercial company investment, was laid bare. And what is more revealing, the company was immediately warned that the government would not hesitate to lie about it if the story became public. They had, after all, ‘fought like a tiger’ to take control of Persia’s oil resources. [16]

Marcus Samuel founder of the Shell Trading Company, as Lord Mayor of London

The pre-war activity of the British oil industry was far more extensive than is generally acknowledged. Indeed, few official historians give space to the unprecedented lengths to which the British government went to discover and protect supplies. Certain individuals inside or closely related to the Secret Elite played crucial roles. The Rothschilds, in addition to supplying Germany, invested in oil fields across the world which would be invaluable to the Allies. Others such as Marcus Samuel and Lord Cowdray, with oil interests that ranged from Romania and Russia to Mexico and the Far East, were likewise linked to the Secret Elite and the British government. ‘New’ men, loyal and dependable servants of the British Empire whose fortunes were based on success in Canada and Australia, were also encouraged to underwrite and champion the search for ‘British’ oil. [17] Essentially, British interests grabbed control of as much of the world’s oil as possible in the run up to war. At every turn they were aided and abetted by the Foreign Office and the Admiralty for military and strategic reasons that were kept closely under wraps.

[1] John Buchan, for example was a member of the Secret Elite. He wrote Episodes Of The Great War (Thomas Nelson and Sons), Nelsons History of the War in twenty-four instalments and amongst his other duties served as The Times Correspondent in 1915.
[2] firstworldwarhiddenhistory.wordpress.com Blockade in 10 blogs, Wednesday 10 December 2014 – Wednesday 4 February 2015.
[3] William Engdahl, A Century of War, p. 20.
[4] In 1912, retired Admiral Jacquie Fisher was appointed chairman of the royal Commission to enquire into Liquid Fuel, with a view to converting the entire fleet to oil. Classified ‘Secret’, Fisher’s Commission reported on 27 November 1912, with two following reports on 27 February 1913 and 10 February 1914. See National Archives.
[5] F C Gerretson, History of the Royal Dutch, Vol. 1, p.214.
[6] The Times, 1 July 1908. Gerretson, History of the Royal Dutch, Vol. 2, pp. 197-8.
[7] F C Gerretson, History of the Royal Dutch, Vol. 2, p. 303.
8] Glyn Roberts, The Most Powerful Man in the World, The Life of Sir Henri Deterring, p. 106.
[9] Engdahl, A Century of War, p. 63.
[10] Gerretson, History of the Royal Dutch, vol III, p. 228.
[11] Ibid.
[12] R W Ferrier, The History of the British Petroleum Company, p. 5.
[13] Engdahl, A Century of War, p 20.
[14] Ferrier, The History of the British Petroleum Company, p. 97.
[15] Ibid., p. 105.
[16] Engdahl, A Century of War, p 93.
[17] Chief amongst these was Donald Smith, Lord Strathcona a Scottish-born Canadian businessman, financier and philanthropist. Donna McDonald, Lord Strathcona, p. 467.