CHAPTER 21

The Zaharoff Gambit

THE IDEA OF A SEPARATE PEACE with the Ottoman Empire remained very much alive in the mind of the man who mattered most in Great Britain at this time, Prime Minister David Lloyd George. His chosen instrument was not Aubrey Herbert, however, despite the latter’s pedigree and connections; indeed, to the eye of a Welsh shoemaker’s nephew such as Lloyd George, perhaps those attributes appeared to be drawbacks. He chose instead for this most delicate of diplomatic tasks a self-made man like himself, a subtler, more ruthless figure than Aubrey Herbert, and one who was much more experienced in intrigue: namely, the infamous arms dealer and prototypical “merchant of death,” Basil Zaharoff. In a story chock-full of fabulous characters, this gentleman may be the most fabulous of all, although he certainly was not the most admirable.

Zacharias Basileios Zaharoff was born an Ottoman subject in 1849, but he lied about that as about most things. To some he said he was Romanian, to others that he was Greek, or Polish, or Russian. He told Lord Bertie of Thame that he had graduated from Oxford. In fact, as a boy he worked in the streets of Constantinople, touting for brothels and starting fires for a share of the salvage that firemen gained when they extinguished a blaze. A bigamist who changed his name more than once, probably a swindler and embezzler, certainly a risk-taker who had on more than one occasion packed his bags and left town as quickly as possible, he lived his early adult years on the shady side in England, Belgium, the United States, and Cyprus. In Greece in 1877 he discovered his true métier, when he began selling armaments for the Anglo-Swedish firm of Nordenfelt. Immediately his fortunes improved. He sold a submarine to Greece and two more to her traditional enemy, Turkey, and then one to Turkey’s other great enemy, Russia. (The craft were unsafe and never used.) He sold weapons to Russia’s enemy, Japan, to Germany, to France, and to Spain. Unlike the submarines, these weapons were used, and to deadly effect. The years before 1914 were a golden age for salesmen of weapons and munitions, and Zaharoff proved adept, not least because he well understood how to suborn and corrupt. A brilliant linguist, he could practice his talents in most European languages.

He was more than a successful purveyor of weapons, however. When, as chief salesman for Nordenfelt, he came up against the American Hiram Maxim, inventor of the machine gun, he quickly recognized the superior product. Maxim realized just as quickly who was the superior salesman. The marriage of convenience that resulted strengthened Zaharoff’s hand. Already wealthy, he collected enormous commissions after the merger and purchased shares in the business that now had a double-barreled name. By the time British Vickers Steel Company purchased Nordenfelt-Maxim in 1897, Zaharoff was one of its owners. For Vickers he became “general Representative for business abroad.” With some of the proceeds of the sale of his old firm, he bought shares in the new one and wound up sitting on its board of directors. Vickers built armaments works across Europe. Zaharoff played a leading role in their development and oversight.

He branched out, founding banks and purchasing newspapers or shares in them. He even lent money to the Monte Carlo casino. He lived opulently in Paris, where he dined off gold plate, which according to some reports was sold later to King Farouk of Egypt. He bought a château in the French countryside. In 1908 he took out French citizenship and sought to establish his bona-fides. He founded a home for retired French seamen. In 1909 he donated £28,000 to the Sorbonne to establish a chair in aviation. Such acts brought him membership in the French Legion of Honor, of which eventually he was made a commander.

The street urchin of Constantinople had climbed to a great height. His profession put him in touch with European leaders, ministers of defense, generals, even royalty, some of whom became his friends. He knew the “tiger” of French politics, the future wartime prime minister, Georges Clemenceau. In Britain he established friendly relations with T. P. O’Connor, the Irish nationalist MP and journalist, and with Baron Murray of Elibank, a member of the prewar and wartime Liberal government. Rumor has it that he became acquainted with Lloyd George during this period. Rumor compounded says the latter once had an affair with Zaharoff’s first, abandoned wife. At any rate the arms merchant began to dabble in politics—to facilitate his business dealings, no doubt, but also, it would appear, to satisfy his ego. On one occasion he arranged for the throne of Portugal to be offered to Prince Christopher of Greece.

Eventually the Greek connection provided him with an introduction to the man atop the greasy pole in Britain. When the war commenced, Greek king Constantine resolutely pursued a policy of neutrality. His prime minister, Eleutherios Venizelos, pursued with equal resolution a pro-Entente policy. The French and British supported the latter; the Germans supported the former, hoping he would drop neutrality for an alliance with them. Both sides viewed Greece as a prize to be won. By 1915 it had become a happy hunting ground for men with cloaks and daggers, as well as money and guns. It was more dangerous than Switzerland, whose neutrality never came into question; divisions in Greece nearly precipitated a civil war and French invasion. This situation might have been designed for Basil Zaharoff, “evil and imposing,”1 with his “beaky face … hooded eye … wrinkled neck … [and] the full body” of a vulture. He would fund the Allied propaganda effort in Greece; he would subsidize his “dear friend” Venizelos. “All that is needed2is to buy the germanophile papers, also 45 Deputies and one Frontier Commissioner. Last month I bought out and out with my own money the most rabid anti-Venezelist paper.” He pressed the British and French governments to provide additional funds for additional suborning. They did so, and Zaharoff knew where to spend it. The results were that Constantine abdicated, and Greece joined the Entente powers. Prime Minister Asquith wrote to Zaharoff: “I beg,3 on behalf of His Majesty’s Government, to tender to you their sincere gratitude for the most valuable service which, at a critical time, you have rendered to the cause of the Allies.”

For direct communication with the British government, Zaharoff employed Sir Vincent Caillard, financial director of Vickers. On April 19, 1916, at roughly the same time when Marmaduke Pickthall was responding to the overture from Dr. Felix Valyi in Switzerland, Zaharoff was writing to Caillard: “Mon cher Ami,4 the following if well managed may become historical.”

“The following” was a feeler he had received three weeks previously from Abdul Kerim Bey, formerly cosecretary of Sultan Abdul Hamid II, later Turkish minister to Greece and ambassador to Vienna. “In Nordenfelt’s time I paid him many a thousand Liras,” Zaharoff fondly remembered. Abdul Kerim had “heard that I was playing an important part in Eastern politics.” The two met in Marseilles, the Turk traveling there with a false passport, “but said he, anything I may tell you ‘comes from me alone, because I have neither an official nor a semi-official mission,’ and this he repeated twenty times during our interview.” Zaharoff described their ensuing discussion:

He said that all talk of a separate peace with Turkey was out of the question because the Germans held Constantinople in their iron grip, but, added he, why not open the Dardanelles to you treacherously? What is it worth to the Allies in American dollars payable in American? Would you not be delighted to take Enver & forty or fifty of the Party straight to N.Y.?

I replied that this was very interesting, upon which he said “Keep all this to yourself until I again communicate with you; it may be a month or two or three … & then be ready to come & see us at Adrianople and we will make your journey there easy.”

The words Zaharoff underlined suggest that he thought that disclaimers notwithstanding, Abdul Kerim Bey was speaking for Enver.

Caillard lost no time in bringing Zaharoff’s news to the appropriate people. Eventually Prime Minister Asquith, Chancellor of the Exchequer Reginald McKenna, and Conservative president of the Local Government Board Walter Long discussed the matter with an intelligence officer named Brewis, and with Caillard and Zaharoff, who traveled over from Paris at least once and probably twice. They were reluctant to risk more than £50,000, which Zaharoff thought would be insufficient, even as an earnest of intention. In the end the government ministers would not bite. McKenna thought that if the bribe was successful, it would remove ineffective Ottoman leaders from Constantinople and replace them with effective Germans who would substitute more complete puppets for the men who had fled. Asquith pointed out that if the scheme worked and a new Ottoman government expelled the Germans, the Turks would retain Constantinople, which Russia would not accept. Zaharoff received from Abdul Kerim Bey another communication containing instructions on how he should travel to Adrianople, but he had to reply that at present nothing could be done. In this, if nothing else, he resembled Marmaduke Pickthall, who had come reluctantly to a similar conclusion about Anglo-Turk discussions a little earlier. The time simply was not yet ripe. On the other hand, however, Zaharoff did not sever the link with his Turkish connection. And by now his work as an arms dealer definitely had brought him into touch with the British minister of munitions, Lloyd George.

It is worth pausing for a moment to consider Zaharoff’s motivations. Nothing about his professional career suggests that he acted for love or from devotion to abstract principle. To nationalist or patriotic fervor, he remained immune. During 1914–18 he supported the Allies for obvious business reasons: They bought his munitions, at a time when Germany and her partners could not. But he had a personal reason for supporting Allied efforts. This erstwhile tout for Constantinople brothels craved respectability or at least its trappings, and not merely the kind that could be bought in a store and displayed in a house. Of those he had already a plentitude. His correspondence with Caillard reveals that Zaharoff wanted from England the equivalent of the medal of the Legion of Honor that he had received from France, either the Order of Bath or the Order of St. Michael and St. George. He thought his work for the Allies in Greece and later with regard to Turkey should earn him one or the other, but for safekeeping, in the middle of the war, he donated £25,000 to found another chair of aviation, this time at a London university. “This is not the moment5 to think of self, as we all have but one idea in view and that idea is Victory,” he wrote coyly to Caillard. But then he added: “If any of us have contributed towards the victory I have no doubt that their work will be appreciated in due time.”

Zaharoff undertook his wartime missions, then, because he had reason to wish for Allied success and also to win “gongs,” as the British call them. He himself termed them “pieces of chocolate.” At the end of the war he satisfied his craving. King George V conferred upon him a GBE (Knight of the Grand Cross) and a GCB (Knight of the Grand Cross in the Order of Bath). Thenceforth he would be styled “Sir Basil Zaharoff.” But one of his biographers6 adds that the king detested Zaharoff and resented his use of titles, which, since he held French citizenship, were merely honorary anyway.

We come to May 1917. General Maude had taken Baghdad two months earlier, a blow to Ottoman confidence. Russia had renounced the ambition to annex Constantinople, which meant the Ottomans had one less reason to continue to fight. Reports of Turkish interest in a separate peace streamed once again into the Foreign Office. And now the easterner Lloyd George resided at 10 Downing Street. Sir Vincent Caillard, Basil Zaharoff, and Brewis, the intelligence agent, agreed that “the moment might7 be quite favorable for taking up the Turkish business again.” Zaharoff reported from Paris: “I am turning8 and returning that Ottoman matter over in my head … I might … go as far as Switzerland, where ‘by accident,’ I am bound to run across some of our Ottoman friends, and that might be a way of reopening the subject, but … if I take this matter up … I must be properly backed, and more than ample confidence should be placed in me.”

It would be. Brewis spoke with the prime minister, who “was greatly interested9 and (of course without committing himself) quite sympathetically inclined. He … wanted you [Zaharoff] to come over as soon as you could possibly manage it and undertook to see you directly you arrived and to give you as much time as you require for discussion of the project.” When we remember how difficult it had been for Chaim Weizmann to see the prime minister, that their meetings were arranged by C. P. Scott for fleeting moments in the interstices of the day, or over breakfast with others present, we may gain insight into the seriousness with which Lloyd George took the prospect of a separate peace with Turkey.

Then fate seemed to intervene. “The enclosed10 has just reached me in an envelope of the Grand Hotel du Russia, Geneva, addressed by Abdul Kerim,” Zaharoff wrote to Caillard on June 5. It was a clipping from a Swiss newspaper, the Tribune de Genève, and it said in part:

We are informed by an authorized source that Turkish civil and military personnel flooding into Switzerland, have been sent by the [Sublime] Porte with a view to arranging a compromise with the Entente Powers. Additional personnel are coming to Switzerland with the goal of finding peace at any price.

The Swiss report exaggerated, but that Abdul Kerim had sent it to Zaharoff at all indicated that the price of peace might be up for negotiation. Lloyd George was ill and recuperating outside London. McKenna no longer belonged to the government. Caillard got in touch with the only government minister in town privy to Abdul Kerim’s initial approach. The Turk was “throwing out11 his hooks again,” Caillard reported to Walter Long. “I believe the moment to be a particularly propitious one for the move.” But authorization to act could come only from the prime minister. Another sign of Caillard’s and Zaharoff’s relative importance was that Lloyd George returned to London on the morning of June 14; Caillard spoke with him that afternoon.

This was precisely when the Foreign Office was authorizing Aubrey Herbert to travel to Switzerland to talk to Turks about a separate peace and authorizing Chaim Weizmann to travel to Gibraltar to oppose talking with Turks about a separate peace. The mandarins cherished hopes for Herbert’s mission; they thought Morgenthau’s would be fruitless but that it would satisfy Weizmann to defeat it, which probably was why they sent him to Gibraltar. Lloyd George operated at a higher level altogether: He did not entertain much hope for Herbert. “He thought there were only ‘second raters’” in Switzerland, Caillard reported, which means the prime minister judged Herbert’s contacts there much as Mark Sykes did. Then the man from Vickers told the prime minister of Zaharoff’s clipping, and of “the source from whence it came [and] … what we knew of that source.” He sketched out the scheme of the previous year, which Lloyd George heard now for the first time, and the amount of money involved. “Of the last point he made light in view of the great advantage it would be to break down German influence in Turkey and arrange a separate Peace.” This may explain why he had allowed the disreputable J. R. Pilling to travel to Switzerland, and why he did not discourage Aubrey Herbert, despite his misgivings about the men Herbert would contact.

Caillard and Lloyd George got down to brass tacks. The prime minister “said that it was patent that we must guard against a trap,—in other words that our Fleet might get through the Dardanelles, be trapped in the Sea of Marmora, and never get out again.” He ticked off British desiderata: “We must retain possession of Mesopotamia, the Russians of the Armenian Provinces of which they are in occupation, a suitable arrangement which would involve at least Internationalization must be made for Palestine.” Note that this last would not have satisfied the Zionists, for whom “Internationalization” was the worst possible outcome, as Weizmann had made clear to Lloyd George the previous year. But it appears to have been Lloyd George’s fallback position. At this moment he may have hoped for an arrangement that would more completely satisfy the Zionists.

The upshot of the meeting was, as Caillard reported to Zaharoff, that the prime minister “considered it would be12 very well worth while your undertaking the journey to Switzerland and finding out all you could about the possibilities, as well of course as ascertaining what is the object of Abdul Kerim in opening up again to you now.” When Basil Zaharoff received this letter, he embarked for Geneva immediately.

He arrived on June 1813 or 19 (just as Horace Rumbold was telling J. R. Pilling that he must return permanently to London, and some two weeks before he would be welcoming Aubrey Herbert). The arms dealer found Abdul Kerim at his hotel. An extraordinary exchange took place. Apparently Zaharoff had only just missed Enver, who had wanted to see him. The Ottoman leader had been waiting at Herculesbad, on the Romanian-Hungarian border. Abdul Kerim too had tired of waiting for Zaharoff to arrive, but Enver had telegraphed: “Stay there and write him to come see you. Enver.” Zaharoff asked to view the telegram and copied down the identifying numbers and posting office for British authorities to verify. Presumably they did so. Presumably Enver really had been hoping to meet the British emissary. The archive indicates nothing to the contrary.

“Things had changed”14 since the previous year, Abdul Kerim then informed Zaharoff. “Turkey was ruined and lost and … Enver & Co. were willing to throw up the sponge on ‘reasonable conditions’ and get out with their lives.” Here were their terms:

They want as a retaining fee $2,000,000 at Morgan’s New York, payable now. Of this, he says, he will take, for himself $500,000 and after putting me in communication with Enver and Djavid, who also act for Khalil, the Sheikh-ul-Islam [Constantinople’s leading Muslim cleric], Emir Hussein [a high-ranking Ottoman military officer, not to be confused with Sharif Hussein], Ouzoun Ali [another Turkish officer] and Djemal, he will curse Turks and Turkey and go to America and there await the others.

The remaining $1,500,000 would go to the others, above mentioned, who absolutely needed every piaster of it to buy certain people who are indispensable.

Zaharoff asked why Talaat’s name had not been mentioned. That member of the ruling triumvirate posed a bit of a problem, Abdul Kerim indicated, but if Talaat refused to listen to reason, “one will give him some coffee,” presumably a threat to poison him. (“This tells you what sort of a man I am dealing with,” Zaharoff noted piously.) But we know that while Enver was secretly contacting Britain through Abdul Kerim and Zaharoff, Talaat was contacting Britain through Hakki Halid Bey and Aubrey Herbert, and possibly through Fuad Selim and J. R. Pilling. Deceit and intrigue characterized dealings on both sides. On the Ottoman side lives were at stake.

As for the rest of the Turkish terms:

In addition to the $2,000,000, which he distinctly repeated I was to consider as a retainer, $10,000,000 would pay for everything …

As soon as the “retainer” was paid to him, Enver and or Djavid (Minister of Finance), he (Abdul Kerim), and I would meet and arrange somewhat on the following lines:

$XXX [meaning a sum in dollars to be determined] to be paid to their nominee when the Turkish troops have been withdrawn from the Mesopotamian Front, to a line indicated by me.

$XXX to be paid to their nominee when the Turkish troops in Palestine have been withdrawn to a line fixed by me …

$XXX to be similarly paid when the Turkish troops on both sides of the Dardanelles have allowed the Allies to land and have delivered the forts to them.

$XXX when our Fleet has passed through the Dardanelles and the Turks have asked for an armistice which, in Enver & Co’s opinion, will be certain to lead to a general armistice, on account of the terrible state of Germany and Austria (not Hungary).

He said that the above were simply indications but that at the meeting with Enver, Djavid, himself and me, by which time I would know the views of the Money-Bags, we could settle details.

The meeting concluded, and the two men went their separate ways. Zaharoff returned to Paris, where he wrote his report and sent it to Caillard in London. “Your people are to15 decide,” he concluded. “I express no opinion, yet [quoting Dickens] ‘Barkis is willin.’” The very next day he sent a second letter to Caillard. “I would like to have the Grand + [Cross],” he reminded his friend.

Caillard saw Lloyd George on June 27. “I had drawn up a Memorandum based on your letter, and handed this to him to start the conversation. After reading it through he said that this was a most important communication—most important—he repeated the words several times.” On the other hand, the prime minister doubted that Enver or Djavid could travel to Switzerland without alerting the Germans, and he doubted the wisdom of handing half a million dollars to Abdul Kerim before the meeting with Enver had taken place.

After some further16 discussion the suggestion we arrived at was this … the equivalent of two million dollars should be placed to your credit at some bank that you would indicate, from which bank you could have in your hand a banker’s receipt for the amount. This Receipt you could produce to A.K. and state that as soon as he, Enver and Djavid met you in serious discussion you would be ready to transfer the amount to a nominee of theirs. Of course, if it were more easily handled thereby, you could have two banker’s receipts, one for the equivalent of $500,000 and the other for $1,500,000, the former for A.K. himself and the latter for the others.

Zaharoff approved this plan, saying it “eases my mind17 immensely.” He sent clippings from the French newspapers Figaro and L’Action française, both of which had published telegrams announcing that Enver and Djavid were in Switzerland to arrange loans. Caillard brought them to Lloyd George, who doubted their veracity. Nevertheless he agreed that “Zedzed,” as Zaharoff signed his letters, should depart for Switzerland again as soon as possible.

Zaharoff left Paris on his second journey to Geneva on July 21, missing Lloyd George, who attended the war conference in the French capital, by a single day. He missed Weizmann, who arrived in Paris to brief the prime minister on events at Gibraltar the day after. He missed Aubrey Herbert, who reported to Lloyd George on his meeting with dissident Turks two days after that, on July 25. He knew nothing of their efforts; they knew nothing of his or of each other’s. Lloyd George held all the strings.

In Geneva, Zaharoff found himself jousting with Abdul Kerim. He showed the latter the two receipts from Morgan’s Bank in New York City. The Turk

did not look at them but said once I had the funds I was to deposit $500,000 to his credit at the Credit Swisse, Zurich … and that the $1,500,000 were to be deposited to Enver’s credit at the Banque Swisse et Francaise. As I did not interrupt him he said in continuation that the moment I had met Enver & Co his part of the bargain ended, and he would leave for the U.S. and prepare the road there for Enver & Co. He further said that Enver had told him last week that he would need some little time to square certain people (mentioned in my last) but that he had fixed our appointment at Lucerne for exactly 35 days after the money was placed to his credit.

Lucerne as a meeting place made sense to Zaharoff. He knew that Enver’s wife had been living there since the beginning of 1916.

Then the interview turned sour. Zaharoff repeated his instructions from Lloyd George word for word. He would not pay Abdul Kerim anything until he had actually met with Enver. The Turkish envoy “calmly said ‘Take it or leave it!’ and notwithstanding all my efforts to reopen the conversation he remained mute, gave me my hat, salaamed me gracefully and dismissed me.”

Zaharoff remained for two more days in Geneva, hoping to resume the negotiation. He did not see the Turk. Finally he went to lunch at his hotel. There was Abdul Kerim in the dining room. He “saluted me politely18 and when I was half through came and smoked at my table, spoke of commonplace things and although I tried to touch upon the question he evaded it, wished me bon voyage and started for the door. He stopped short, came back, whispered in my ear, ‘keep your eye on Mesopotamia’ and walked out.”

Back in Paris, Zaharoff reported immediately to Caillard, who reported in turn to the prime minister. This time it took a couple of weeks before the two could meet face-to-face. Afterward Caillard brought his friend up to date: “The fact is that19 A.K.’s advice to you to ‘keep your eye on Mesopotamia’ was genuine, and the Turks are preparing for a big attempt to drive us out of Baghdad.” Here is the reason for the failure of Pilling’s effort (assuming its reality), and of Herbert’s, and of this most recent, but by no means last, of Zaharoff’s. Just when the British were most interested in reaching an agreement with the Ottomans, the latter found reason to hope that they could prevail in war after all. But, Caillard continued: “Our military authorities are fully aware of this and are in close communication with Sir Stanley Maude, who expresses the conviction that he can defeat the attack and hold the field.” Therefore Lloyd George had not given up on the idea of a separate peace with Turkey after all. “He does not wish you to return the money for the present … He has not by any means decided that [it] will not be used for the objects in view when the propitious moment arrives.”

So the matter rested for the next three months, until mid-November 1917. By then it had become clear that the threatened Ottoman offensive in Mesopotamia would fail to materialize and that Ottoman forces were falling back on all other fronts. The Young Turks in Constantinople had good reason to revisit the possibility of a separate peace. So did the easterner Lloyd George. Despite the promises of his generals finally to smash a hole in the German line, no breakthrough on the Western Front had occurred, only continual murder on a breathtaking scale. Meanwhile the Bolsheviks had pledged to take Russia out of the war altogether. Britain seemed no closer to winning the war in November 1917 than she had in November 1916, or 1915, or 1914.

Sometime toward the end of the second week in November, Basil Zaharoff learned that Abdul Kerim was on the move again, headed for Switzerland. He wrote to Caillard: “I will be there20 to meet him.” This time Lloyd George empowered him to make the $2 million down payment. At this desperate juncture in the war, the prime minister would go far to bring the Turks to the negotiating table, farther by a great length than the Zionists would have wanted him to. Of course, he did not tell them.

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