louise atherton - lord lloyd at the british council and the balkan front, 1937-1940

7/29/2019 Louise Atherton - Lord Lloyd at the British Council and the Balkan Front, 1937-1940

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Lord Lloyd at the British Council and the Balkan Front, 1937-1940Author(s): Louise AthertonSource: The International History Review, Vol. 16, No. 1 (Feb., 1994), pp. 25-48Published by: Taylor & Francis, Ltd.Stable URL: http://www.jstor.org/stable/40106850 .

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Lord Lloyd at the British Council and theBalkan Front, 1937- 1940

LOUISEATHERTON

the attention recently paid to the role of culturalpropaganda in the 1930s, little analysis has been made of thepolitical role of the British Council and its direction by theforeign office in the years just before the outbreak of the SecondWorld War.! Foreign office and British Council interest in the Balkanswas apparent as early as 1935 and, during the late 1930s, the work ofthe Council in the region was given high priority, along with Egyptand the empire in the Middle East. The activities of Lord Lloyd ofDolobran, the chairman from 1937 to 1941, are still a subject ofspeculation, for there is sparse but significant evidence to suggest hisinvolvement in secret government missions, independent intelligence-gathering, and espionage.Most of these activities were concentrated in the Near East andthe Balkans. Many older works dealing with British policy in easternEurope rarely, if at all, mention Lloyd's activities, although recentworks acknowledge his obscure but persistent influence.2 Between1937 and 1940, Lloyd was drawn further into south-eastern Europeanaffairs both officially and unofficially. His increasingly audaciousinterventions ranged from attempts to promote a policy of British eco-nomic warfare in the Balkans to efforts to induce the Spanish dictator,General Francisco Franco, to sponsor a western-aligned neutral BalkanI thankJohn Charmley(Universityof EastAnglia)and Meryl Foster(PublicRecord Office) fortheir commentson earlierdraftsof this article.1 P. M. Taylor, The Projectionof Britain: British Overseas Publicity and Propaganda, 1919-1939(Cambridge,1981), does not analyse ts direction by the foreign office or the implicationsofLloyd'spoliticalactivities,and neither does FrancesDonaldson,TheBritishCouncil:TheFirstFiftyYearsLondon,1984).^ bee, tor example, f. U. v^uinlan, (^lasn over Komanta: British ana American Policies towardsRomania, 1938-1947 (Los Angeles, 1977); Elisabeth Barker, BritishPolicy in South-EasternEuropeinthe SecondWorldWar(London, 1976);J. R. M. Butler, GrandStrategyLondon, 1957);Sir L.Woodward, British Foreign Policy in the Second World War (London, 1970): Works whichacknowledgethe activitiesof Lloydinclude: D. C. Watt, How WarCame:TheImmediate riginsof the Second World War, 1938-1939 (London, 1989); D. B. Lungu, Romania between the GreatPowers, 1933-1940 (Durham, NC, 1989); J. Charmley, Lord Lloyd and the Decline of the BritishEmpire (London, 1987); Philippe Marguerat, Le Illikme Reich et le petrole roumain, 1938-1940(Geneva, 1977).

The InternationalHistoryReview, xvi, 1, February 1994, pp. 1-220cn issn 0707-5332 The InternationalHistoryReview. All Rights Reserved.

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26 Louise Athertonbloc. Lloyd's name regularly appears in official papers, private corres-pondence, and political diaries as an exponent of a policy of firmness.Recognized as an opponent of Chamberlain after the Munich agree-ment, nevertheless he remained the head of a semi-official body.Lord Lloyd was appointed chairman of the British Council in July1937. His career had been varied and distinguished: special attache atthe British embassy at Constantinople; wartime service in the Darda-nelles and with T. E. Lawrence in Arabia; Unionist MP; governor ofBombay between 1918 and 1924, and high commissioner in Egyptbetween 1925 and 1929. A disciple of Joseph Chamberlain andcommitted to tariff reform, Lloyd had become interested in GreatBritain's financial and trading links with its empire and wished tooppose German economic expansion in the Near East well before theFirst World War. Idealistically, almost mystically, devoted to theBritish Empire, he advocated the use of force, if necessary, to maintainBritish control. In Egypt, however, he found himself increasingly atodds with the foreign office headed by Austen Chamberlain over anAnglo-Egyptian treaty designed to regularize post-war relations. In1929, facing probable dismissal by the new Labour foreign secretary,Arthur Henderson, Lloyd resigned. It seemed to be the end of hiscolonial administrative career.1

During the 1930s, Lloyd found other outlets for his formidableenergy. He became chairman of the Navy League in 1930 andcampaigned vigorously for adequate British defences as a corrective tothe relative disarmament of Great Britain during the 1920s. He alsoopposed, as an active member of the India Defence League, the Indiabill in the house of lords, thus aligning himself with the imperialistright wing of the Conservative Party and with Winston Churchill andother critics of Stanley Baldwin. By 1936, he had developed anabsorbing interest in the work of the British Council, serving as chair-man of the Near East Committee from November 1935, and using hisalmost inexhaustible political contacts to further British influencethrough educational and cultural channels. Lloyd would becomechairman of the Council in July 1937 on the recommendation of SirEustace Percy, the outgoing chairman, despite the deeply ingraineddistrust of the foreign office.The British Council had been formed in 1934 to represent abroadthe British way of life. Although publicly presented as an independent1 Lloyd's career is described more fully in Colin Forbes Adam, Life of LordLloyd (London, 1948);Charmley, LordLloyd.



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Lord Lloyd and the Balkans 27body, it was, from its creation,guidedby the foreignoffice, and was aresponseto the culturalpropaganda fforts of the totalitarian owers.As a prominentofficial of the news departmentof the foreign officeand virtual ounderof the Council, Rex Leeper,commentedin 1943:'the object was not culture for culture'ssake,but culturefor policy'ssake.'1Both he and the permanentunder-secretary,Robert Vansittart,took a close interest n the Council'swork and, from the start, t wascloselylinked to prominentcritics of appeasement,ncluding- later-Lloydhimself.2

The Council's prioritieswere set yearlyby the foreign office inorder of political and economic importance.As earlyas November1935, the foreign secretary,SirSamuelHoare, was directingattentionto Poland,Yugoslavia,Romania, Bulgaria,and Finland.There werepressingcommercialreasons or the interest n PolandandYugoslavia,but, Hoarestated, in all, the dangerof Germanculturalandcommer-cialpenetration,which maybe expectedto increaseas the power andwealth of Germanyrevive, makes it particularlydesirable or Britishculturalpropagandao secureas firma hold as possibleon the mindsand interestsof the population,before the counterattractionbecomestoo strong'.3These prioritieswere to remain constant between thewars, with a gradualupgradingof the states of central and easternEurope.4There is also evidence to suggest that Anthony Eden, whenforeignsecretary, awthe Council as a politicallycontrolledbody withthe task of influencingneutralcountrieswhose alignmentwith GreatBritainwould prove advantageousn wartime.In November 1937, heemphasized hat GreatBritainshould draw as manyas possibleof theunaligned states to her side. The countries specified - Portugal,Greece, Turkey, Yugoslavia,Romania, and Poland- were all givenhigh priority or the Council.5With minorvariations,he emphasisonthe east remainedconstantuntil 1939.61Memo, PublicityServicesof the foreignoffice, 8 Feb. 1943[PublicRecord Office], F[oreign]O[ffice Records]366/ 1339/X1886.2 As recognized by the second chairman,Lord EustacePercy, SomeMemoriesLondon, 1958),p. 159.3 Directive to Britishrepresentativesbroad,8 Nov. 1935,FO 395/529/P3900.4 List of priorities or the BritishCouncil, memo on Britishculturalpropaganda y KennethR.Johnstone, 17 Nov. 1937,deputy secretary-generalPublicRecord Office], TfreasuryRecords]161/1238/5355581/8.5 Memo, Eden, 'The Strengthof Great Britain and CertainOther Nations as of Jan. 1938',Documentson BritishForeign Policy, 2nd series, xix. 348.6 List of prioritiesfor 1940-1, Lloyd to Halifax,22 Apr. 1940 [PublicRecord Office, BritishCouncil files],BW 2/340.



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28 Louise AthertonThus, from an early stage, the eastern Mediterranean and theBalkans were identified as strategically, economically, and politicallyimportant areas where Britain's propaganda effort, however diluted,was considered vital. So far, Lloyd and the foreign office were in

agreement. However, the British Council, which was restricted todeveloping cultural relationships, was not backed up initially by acomplementary policy of economic or military help to the east Euro-pean states. On this point, Lloyd and the British government were todisagree fundamentally.

In Lloyd's view, the Council's priorities were governed bystrategic necessity. The Council should give the first serious sign ofBritain's determination both to resist Nazi Germany and to preservethe Near Eastern empire; hence Lloyd's preoccupation with theBalkans. Current British defence planning for the Near East stressedthe importance of Egypt. Lloyd, however, was one of the first toargue that British defence priorities, in an echo of the Palmerstonianera, must include the approaches to Turkey and the Straits.With the anschlussbetween Austria and Germany in March 1938,and the apparent threat to Czechoslovakia, Lloyd concluded thatGermany was about to carry out her long-term plans to dominateeastern Europe. By the end of the year, he was convinced that, in theabsence of other alternatives, Britain should lend her economic andpolitical weight to the creation of a Balkan front that would resistGerman economic penetration and safeguard the British imperialposition. For Lloyd, the British Council was a means to this end. *In April 1938, Lloyd began his campaign to persuade the primeminister, Neville Chamberlain, and the foreign secretary, LordHalifax, that greater British involvement in eastern Europe wasdesirable as an antidote to the tightening hold of Germany on the localeconomies. In doing so, he was ignoring the fact that British tradewith the Balkans had never been large, and Chamberlain's own viewthat south-eastern Europe was an area where the expansion of Germaninfluence was natural and inevitable.2 In May, Lloyd suggested toVansittart, also an advocate of economic and political activity ineastern Europe, that more effective propaganda was required, as apreliminary to economic aid; after discussing the matter privately withKing George II of Greece, he made similar suggestions to1 For furtherdetails of Lloyd'swork at the Council at this time, see V. L. R. Atherton, 'LordLloyd: CulturalDiplomacy and Foreign Policy, 1937-1941'(Ph.D. dissertation,East Anglia,1988).2 D. Kaiser, EconomicDiplomacyand the Originsoj the second World War(Princeton, 1980), pp. 175,191.



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LordLloydand the Balkans igChamberlain, citing increased imports of staple products from Turkey,Greece, Romania, and Bulgaria as an example.1To some extent, Lloyd's growing concern matched a newgovernment awareness, for although an economic offensive was notenvisaged, the government was prepared to make isolated gestures ofsupport for specific countries; one being the decision in May 1938 toallow 16 million of commercial and armaments credits to Turkey,which German officials appear to have attributed solely to Lloyd.2The credits to Turkey did not represent the start of a commercialdrive,3 but they did indicate a change in Halifax's attitude towardseconomic initiatives in eastern Europe. He was probably influenced byLloyd, who was able to provide first-hand information to corroboratethe reports which the foreign office was receiving, indicating thedesire of the Balkan states for British help. Though Halifax was willingto argue with Chamberlain in the cabinet, however, he was notwilling to advocate a policy of economic warfareagainst Germany.4In spite of his status as chairman of an ostensibly politically neutralorganization, Lloyd played a politically active role before and duringthe Munich crisis, arguing that he was merely acting individually andserving the national interest. Later, the foreign office found it politic-ally expedient to encourage him, sending him on various politicalmissions both before and after the outbreak of war. Lloyd also used hisextensive European contacts to obtain information which he hopedwould alert the government to the dangers of German expansion; forexample, passing on to Chamberlain and Halifax reports from IanColvin, the correspondent of the News Chronicle at Berlin, whichwarned of a German plan to attack Czechoslovakia on 28 September.5Lloyd encouraged Halifax to take a firm stand during August and earlySeptember but, despite a visit to France to boost French morale andcollaboration with Churchill's group, he could do nothing to preventthe events which culminated in the Munich conference and thecession of the Sudetenland.6That Lloyd ran his own private intelligence agency, something1 Lloydto Vansittart, 5 May 1938,FO 395/589/P1913; Lloydto George II of Greece, 4 May1938, [Lord]Lloyd[of Dolobran]Papers ChurchillCollege, Cambridge],miscellaneous orres-pondence. Quotationsfrom the Lloydpapersaregiven with permissionof John Charmley,onbehalfof LadyLloydof Dolobran.2 18 Oct. 1938,Documentsn German oreign olicy, eriesD (London,1953),v. no. 234.3 Kaiser, EconomicOrigins, p. 249.4 Foreign policy committee minutes, 1June 1938,FP(38)3OPublicRecord Office], CAB[inetRecords]27/623.5 Colvin to Lloyd,3 Aug. 1938,IanColvin, Vansittartn OfficeLondon, 1965),pp. 218-21.6 For an accountof Lloyd'sactivities, ee Charmley,LordLloyd,pp. 217-20.



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30 LouiseAthertonalong the lines of that establishedby Vansittart, s evident from hispapers.He also had links with official intelligence sources, corres-ponding with the head of the Secret Intelligence Service and beinggiven access to its reports.1There is also evidence to suggestthat hehoped to place some of his 'agents' inside the British Council; inDecember 1938, when the expansion of British Council work inGermanywas discussed n the cabinet, Lloyd'schoice as director ofthe proposed Travel Association Office in Berlin was Colvin.Althoughthe projectwasjettisonedwhen Germany nvadedBohemiaand Moravia n March 1939,2 he episodeshows Lloyd'strue aims andhis willingness o exploit his positionat the Council: there were to becomplaintsabout the intelligence activities of Council employees inAthens in 1940. It is worth noting that HalifaxaskedLloyd in May1940, when Lloyd became colonial secretary in the Churchillcoalition,to 'overhaul' he SIS.3In the months afterthe Munich agreementof 29 September1938,Lloyd continued to push for greaterBritish involvement in easternEurope. Despite the apparentrenunciation of French and Britishresponsibilityor the region,and the prevailingofficialview that it waseffectively ost, Lloyd arguedthat Britaincould andshouldattempttobreak through Germany'seasternEuropean tradingstructure. Notconvinced that Hitler had finally fulfilled his ambitionsand disap-pointed with Chamberlainat Munich, he tried to promote a closerrelationshipbetween Britainand the remainingmembersof the LittleEntente, Romania and Yugoslavia.His efforts centred on Romania,where his associates were Grigore Gafencu, later the Romanianforeignminister,andVirgilViorel Tilea, later the Romanian ministerat London, both of whom had previouslyworked with the BritishCouncil. Both were eagerto supportLloyd'sinitiative to counteractthe effects of the Munich settlement,and to dispel scepticismaboutthe likelihood of receiving enough British aid to counterbalanceGermany's conomic andpoliticalpressure.Most of the membersof the LittleEntente, includingRomania,saw no alternative o closer diplomaticand economic relationswithGermany.4The Romanian governmenthad asked the British beforeMunich to purchasemore gasolineandcereals, nvestin construction,and help to extractRomania'snaturalresources.They had also asked

1Watt,How WarCame,p. 182.2 Atherton, LordLloyd', pp. 116-19.3 The Diaries of Sir Alexander Cadogan, 1938-1945,ed. David Dilkes (London, 1971), p. 289.4 Lungu, Romania and the GreatPowers, p. 136.



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LordLloydand the Balkans 31for an economic mission headedby the chief economic adviser o theforeignoffice, Sir FrederickLeith Ross.1 Such requestshad been dis-couraged on the grounds that the proposals were economicallyunsoundandpoliticallyrisky: he Germansmightsee them asencircle-ment (or so said the members of the government hostile to Britishinvestment in the Balkans),and they would jeopardize the existingtrade agreements with Australia, Canada, and the United States.Economic aid to Greece and Turkey was considered to have thegreater trategicpriority.2

In October 1938, at the invitation of King CarolII, LloydvisitedRomania, ostensiblyto furtherAnglo-Romanian culturallinks butmore pertinently to witness the Romanian army manoeuvres.TheBritishembassy n Bucharestonly reluctantly greedto the visit, astheRomanian press was publicizing it as an official British economicmission.3Carol II, who used the occasion to press once more foreconomic aid, found an eager istener n Lloyd,who sentback a seriesof impassionedpleas to the foreign office to prevent Romania frombecoming tied inextricablyto the Germaneconomy. Britainshouldspend500,000 on oil, buy 600,000tons of wheat, andhelp Romaniato build a navalbase at the mouth of the Danube.4Such suggestionspleasedthe Romaniangovernment,eagerto sellas much aspossibleof its huge grainharvest o GreatBritainto avoidfurthereconomic dependencyon Berlin,to increase ts hardcurrencyreserves,and to build on the clearingand currencyarrangement f 2Septemberwith the Britishgovernment,aimed at improvingthe tradebalance between the two countries.5Lloyd considered the matterimportantenough to cut short his visit to returnhome and arguehiscase in person. By the time he arrived,however, a decisionhadbeenreached.

A Romanian wheat purchasehad been actively consideredsincelateSeptember1938,when 300,000tons hadbeen offeredto the FoodDefence Plansdepartment,which hadrecommended he purchaseof amuch smallerquantity.On 6 October,Vansittart;he under-secretary,southerndepartment,Sir Orme Sargent;andthe head of the southern1 Memo, southerndept., assistance o Romania, 30 June 1938, FO 371/22464/R5959; Kaiser,EconomicDiplomacy, p. 256.2 Sir Orme Sargentto Sir FrederickLeith Ross, 27 June 1938,FO 371/22457/R5760; 'BritishPrioritiesn CentralandSouth-EasternEurope', 1June 1938,FO 371 22342/R5558.3 MichaelPalairet Britishambassador t Bucharest]o FO, 10 Oct. 1938,FO 371/22459/R8195andmessage romLloyd,12 Oct. 1938,FO 371/22459/R8196.4 Farquaro Halifax,8 Sept. 1938,FO 371/22458/R7472.5 Lungu, Romania between the Great Powers, p. 138; Marguerat, Le Illume Reich , pp. 107-10, 115-17.



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32 Louise Athertondepartment, Edward Ingram, urged Halifax to buy 200,000 tons, andLloyd's telegrams of 10 and 12 October, provided a welcomereinforcement.1 Upon receiving the reports from Bucharest,2 Halifaxtried to speed up the discussion of the wheat purchases, stressing 'howurgent the matter is, and of what importance it is without delay to tryand do something in the economic sphere for Romania'.3 AlthoughLloyd's figure of 600,000 tons was thought to be too high, the boardof trade, under pressure from Halifax, was willing to buy 200,000tons;4Halifax was willing to justify the step to Chamberlain as a signalthat Britain, in a 'time of great unsettlement', still retained an interestin south-eastern Europe.5Chamberlain agreed. Such a symbol would not, he felt,contravene his foreign policy; neither was the quantity so large thatGermany would perceive the purchase as an attempt to prevent herfrom expanding her trade with the Balkans.6Lloyd, disappointed thatonly one-third of the amount of wheat available would be bought,appealed again to Halifax and the permanent under-secretary, SirAlexander Cadogan, but to no avail.7 Lloyd's only consolation wasCadogan's privately expressed opinion that, even if a sustained eco-nomic effort could not be made in eastern Europe while peace hungin the balance, a firm decision would have to be taken soon either toprop up the Balkan states or to leave them to their fate.8Lloyd's proposals, carrying with them the risk of Germanaccusations of encirclement, were not acceptable to Halifax during theperiod of post-Munich uncertainty. But Lloyd did have a following inthe southern department of the foreign office; as Halifax admitted,'from the purely departmental angle [he] was preaching to the con-verted.'9 The episode, however, illustrates the ambiguity in Britishpolicy in eastern Europe; despite the implications of Munich,Chamberlain was willing to make the first large-scale grain purchase1 Kaiser, EconomicDiplomacy,p. 291.2Palairet to FO, 10 Oct., FO 371/22459/R8195; message from Lloyd, 12 Oct. 1938, FO371/22459/R8196.3 Halifax to Oliver Stanley, president of the board of trade, 11 Oct. 1938, FO 371/22459/R8I97-4 Minute,E. Ingram,12 Oct. 1938,FO 371/22459/R8230.5 Halifax o Chamberlain, 3 Oct. 1938,FO 371/22459/R8307.6 D. Cleverly,asst.sec. at the treasuryto first ord]to OliverHarvey,private ec. to foreignsec,14 Oct. 1938,FO 371/22459/R8307; Lungu,Romania ndthe GreatPowers, . 139.7 Memo, E. Ingram,15 Oct. 1938, FO 371/22459/R8196; Cadoganto Lloyd, 15 Oct. 1838,ibid. See also,C. J. VanKessell, The BritishReaction to GermanEconomic Expansionn SouthEasternEurope,1936-9'(Ph.D. dissertation,London, 1972),pp. 186-91.8 Cadogan o Lloyd, 15 Oct. 1838,FO 371/22459/R8196.9 Halifax o Lloyd, 19 Oct. 1939,Lloyd Papers19/7.



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LordLloydandtheBalkans 33from eastern Europe in recent years, yet was also later to encour-age Leith Ross's attempts to concede to Germany, as part of a generalpacification, a special position in the region.1For the rest of 1938, Lloyd tried to harry the government. Herefused to accept Halifax's arguments that too overt a show of Britishhelp would incite the very German interference it was designed toprevent; nor did he accept the argument that Romania wouldprobably be more of a liability to Great Britain than an asset. A tour ofthe Balkans and Germany in October and November by the secretary-general of the British Council, Colonel Charles Bridge, confirmedLloyd's opinion that Britain should greatly increase its cultural andeconomic activity in the region.2 Meanwhile, Lloyd remained incontact with the Romanian finance minister, M. Constantinescu, andoffered to use his private financial and business contacts on Romania'sbehalf.3Between 15 and 18 November, Carol II visited London; in hisrequests of the government, he was backed up by Lloyd, still trying tocounteract what he considered as a half-hearted and misguided Britishpolicy.4 Lloyd may have even visited Bucharest briefly in the followingweeks, after Carol II had gone on to Germany to discuss with Hitlerand Goering Romania's need for more armaments and economic aid.5There is little evidence for Lloyd's visit, or to suggest whether it wasofficial, but in a private letter written on 24 November, he states thathe had been 'to see what could be saved in the Balkans from theNazis', and more particularly from the blandishments of the Germaneconomics minister, Dr Walther Funk, who was touring the Balkanson an economic mission for Germany.6Between late 1938 and mid- 1939, Lloyd concentrated on helpingprivate British companies keen to expand their business in theDanubian basin, either independently or with government help. Afterthe visits of Carol II and Prince Paul of Yugoslavia to Britain inNovember, he arranged for the firm of Spencer (Melksham) Limitedto discuss with treasury officials a plan for building grain silos inRomania, which had been mentioned by Carol II during a meetingwith Chamberlain and Halifax. The plan, designed to make Romanian1Kaiser,Economiciplomacy,p. 286-8, 293.2 Reporton Bridge's our of the Balkans,Oct. to Nov. 1938,BW 2/ 141.3 Lloydto M. Constantinescu, 0 Oct. 1938,LloydPapers19/7.4 D. C. Watt,How WarCame,p. 90.5 Lungu, Romania betweenthe GreatPowers,pp. 142-4.6 Lloydto Lt. Col. Francis-Scott, 4 Nov. 1938,LloydPapers17/8. There is no more evidenceon thissubject n the Lloyd Papersor in the foreignoffice or News Department iles.



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34 LouiseAthertongrain exports more competitive,1 had the support of the inter-departmental committee on economic aid to south-eastern Europe.Simultaneously, Lloyd advised the Romanian government on howto lobby the British government more effectively. In January 1939, hesuggested to the new Romanian foreign minister, Grigore Gafencu - aformer editor of the newspaper Timpul, which had puffed up theimportance of Lloyd's visit in October 1938 - that the new Romanianambassador should be a person of 'considerable energy and position'.2Tilea, the president of the Anglo-Romanian Society between 1931and 1939, was appointed shortly afterwards.In early 1939, Lloyd organized various private commercialenterprises to buy Balkan products. His chief collaborator was LordSempill, a member of the Navy League and deputy chairman of thecouncil of the London chamber of commerce between 1931 and 1934,who was impressed by Lloyd's propaganda efforts and wanted to backthem with specific business arrangements.3 Lloyd's association withSempill appears to have gone back to 1938, when both promoted theimport of Greek tobacco and advised Chamberlain to negotiatedirectly with British tobacco companies.4 Their efforts wereaugmented by Lloyd's other contacts, including the IndustrialFacilitiesCompany, which had been formed to deal with the credits granted toTurkey in May 1938 and which became involved in putting forwardan unofficial economic deal for Greece, Bulgaria, and Turkey.These efforts were paralleled by Lloyd's political efforts. When hewas asked in February 1939 to undertake a semi-official mission toGreece to repair relations between the Greek government and theBritish legation, he tried to give the mission a proconsular tinge. Hehad alreadymade various attempts to modify the Greek dictatorship ofGeneral Joannes Metaxas, and was in contact with his opponents andformer Venizelists. In February, he persuaded Sargent to allow him totry to 'soften' the dictatorship, which led to a cultural agreement thatLloyd believed gave the British control over the Nazi-type YouthMovements in Greece.5On his return, Lloyd advocated more forcefully the purchase ofGreek tobacco - possibly as a result of his conversations with

1 A. E. Lee to Miss N. Cracknell [junior treasuryofficials], 16 Nov. 1938, T 160/908/F11173/03/3.2 Lloydto Gafencu,4 Jan. 1939,Lloyd Papers19/9.3 LordSempillto Halifax,2 Feb. 1939,FO 371/22381/R959.4 VanKessell, The BritishReaction',pp. 139-43.5 Atherton, LordLloyd, pp. 130-6;J. S. Kohopouhs,Greece nd theBritishConnection,935-1941(Oxford, 1971),pp. 102-6; Watt,How WarCame,p. 210.



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LordLloydandtheBalkans 35George II of Greece and Metaxas, of which there is no record - buthe remained hampered by the reluctance of the tobacco companies,given that North American tobacco had all but captured the Britishmarket, and the companies' belief that an attempt to sell a differentproduct would lead to considerable loss. Neither was there thepolitical will at the treasury- who doubted the economic viability ofLloyd's and SempilTs plans, a view echoed by the tobacco companies1- to upset US and Canadian merchants in favour of an economicallyunjustifiable connection with eastern Europe.

As Halifax appeared more sympathetic, Lloyd sent him details ofthe schemes. But while Halifax was willing to urge the government tonegotiate with the tobacco companies, he refused to back Lloyd andSempill against the treasury in the cabinet; he doubted whether theycould obtain enough financial backing.2 In mid-March, Lloydpresented to a meeting held at the treasury a scheme for a privatemarketing company to import Greek, Turkish, and Bulgarian goods,chiefly tobacco, which would provide an example for other com-panies. As the company would inevitably make a loss at first, it wouldrequire financial backing from the government, which in turn wouldrequire special legislation.3 Lloyd appealed to Halifax, claiming, some-what naively, that the matter could be settled between departmentsand, if Halifax was too busy, Lloyd would act for him. But Halifax wasnot willing to give Lloyd a free hand, and neither was the treasury.4Lloyd and Halifax were looking at the Balkans from differentviewpoints: Lloyd hoped for a sustained and unifying economicoffensive, while Halifax was willing to act only when British interestswere clearly involved and for specific purposes. On 13 April, thegovernment gave guarantees to Romania and Greece, but little con-crete commercial aid followed them before the Balkans collapsed in1940. The guarantees were to act as limited deterrents; they did notprove to be the first step in an interventionist policy, as Lloyd hadhoped.Lloyd was drawn back into Romanian affairs n March, dismayedby Germany's more vigorous efforts to tie down Romania economic-ally, particularlyafter the German-Romanian economic agreement of1 Leith Ross to Sargent, 15 Mar., FO 371/23764/R1743; minute, Nichols, 17 Apr., LordDulverton[ImperialTobaccoCompany]to Sargent,19Apr. 1939,FO 371/23764/R3033.2 Halifax o Sir R. Hoare, 2 Feb. 1939,FO 371722381/R959.3 Memo, E. W. Playfair, rincipal, reasury, 0 Mar.1939,FO 371/23764/R1854.4 Lloydto Halifax,20 Mar. 1939,Halifax o Lloyd,21 Mar.1939,Lloyd Papers25/5, 25/4; LeithRoss to P. Nichols, 23 Mar. 1939,FO 371/23752/R1905; Halifax o Lloyd,25 Mar.1939,LloydPapers25/5.



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36 Louise Atherton10 December 1938. He was certain that an economic ultimatum hadbeen given, as Tilea claimed, two days after the German invasion ofBohemia and Moravia on 15 March; when the Romanian governmentdenied it, Tilea turned to Lloyd who in turn emphasized to Halifaxthat the Romanian ambassador at Paris, Georges Tatarescu, was thesource of the information, and that the French foreign minister,Georges Bonnet, had confirmed it. Lloyd added that the internalsituation in Romania had prompted the denial, but that, if encour-aged, Carol II would remain loyal to Britain.1

Although Lloyd believed that Romania was in the gravest dangerfrom Germany, his intelligence contact in Berlin, Colvin, suppliedinformation which suggested otherwise. Colvin's reports afterJanuary1939 warned repeatedly of a German attack on Poland in March. On23 March, Colvin asked Lloyd to arrange interviews for him withmembers of the government and, by the 29th, he had had interviewswith Cadogan, Halifax, and Chamberlain at which his warningsconfirmed disparate but similar reports from other sources.2 Lloydhimself may have been sceptical, for on the 31st he reminded Halifaxof the importance of Romania, particularly as Germany had finallysucceeded on the 23rd in imposing a broader economic agreement.3Lloyd played an important role in the events leading to theguarantees to Romania and Greece on 13 April. While the Britishgovernment were willing to guarantee Greece after the Italian invasionof Albania on 4 April, they had little enthusiasm for a unilateralguarantee to Romania: they preferred to encourage Romanian-Polishdefence links, and to create a defensive axis in eastern Europe. TheRomanians, however, had no wish to become the linchpin of analliance system that would probably antagonize Germany and raise thequestion of Russian involvement, and preferred a unilateral guaranteeaccompanied by economic aid.4 The French, who were alsoconvinced that war was imminent and wished to have the safeguardofan eastern front, were ready to offer a guarantee, if necessary alone.5

Lloyd, meanwhile, feared that Hitler and Mussolini would only beencouraged if Britain and France followed separate policies towards

1 Lloyd to Halifax, 20 Mar. 1939, Lloyd Papers 19/9.2 Colvin to Lloyd, 23 Mar. 1939, Lloyd Papers 19/9; Watt, How War Came, pp. 182-4; A.Roberts, 'The Holy Fox': A Biographyof LordHalifax (London, 1991), p. 147.3 Minute,Harvey,31 Mar.1939,FO 371/23 832/R2005.4 See D. B. Lungu, The EuropeanCrisis of March-April1939:The Romanian Dimension ,InternationalHistoryReview, vii (1985), 390-421 , and Romania and the GreatPowers,pp. 158-9.5 C. A. MacDonald, 'Britain, France, and the April Crisis of 1939', EuropeanStudies Review, ii(1972).



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LordLloydandtheBalkans 37eastern Europe. When Tilea told Lloyd on 13 March that the Britishwere reluctant to give a unilateral guarantee, Lloyd immediately triedto see Halifax; failing in that, he went on to the French embassy,where he found the French ambassador speaking to the premier,Edouard Daladier, on the telephone. Lloyd was able to give hisopinion that, if Daladier held firm, Britain would be forced to joinFrance in giving the guarantee.1 As this is what happened, Lloydbelieved that he could claim the credit for the Anglo-Frenchguarantee announced later that day.2 What had been more decisive,however, was the British government's reluctance to appear to dis-agree with France. The beneficiary was Romania, who received aguarantee unconditional on a closer defensive alliance with Poland,and which helped her to balance between the western powers,Germany, and Russia. In this instance, Lloyd had been working onbehalf of Romania rather than Great Britain.The limits of Lloyd's ability to influence government policy wereshown by his subsequent attempts to promote a British guarantee toYugoslavia. Such a proposal had already been put to Halifax byChurchill on 6 April.3 Arguing that Yugoslavia would now perceiveherself to be politically isolated, Lloyd suggested to Halifax on 20 Aprilthat Britain should guarantee the country secretly, to allow Yugoslaviato continue to remain neutral. If the guarantee was refused, and if aGerman or Italian invasion followed, Britain should publish details ofthe offer; this, he argued, would spark a pro-British uprising. Thesouthern department, however, was not convinced of this, andnothing was done.4

Lloyd's efforts in promoting economic help to the Balkans had notangible results before the outbreak of war. Admittedly, Leith Rosswas sent on an economic mission to Romania in late April and signedan agreement which offered 5,000,000 m credit guarantees andanother purchase of 200,000 tons of wheat. In the event, it wasdifficult to complete the arrangements and Britain was not able tospareany weapons for purchase.5British attention was concentrated onTurkey, now identified as the crucial state in Balkan defence, andnegotiations for a political and economic treaty were in progress.61Lloydto BlancheLloyd, 13Apr. 1939,LloydPapers19/19.2 Charmley,LordLloyd,pp. 224-5.3 Roberts, 'HolyFox',p. 150.4 Memo, Halifax,20 Apr.;minute,P. Muires,24 Apr. 1939,FO 371/23883/R2915.5 Kaiser, EconomicDiplomacy, p. 304.6 Selim Derengil, Turkish Foreign Policy during the Second World War: An 'Active' Neutrality(Cambridge,1989), pp. 75-89.



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38 Louise AthertonAfter the events of March and April, Lloyd, perhaps believing thatthese actions heralded a new start for British policy in eastern Europe,returned to combatting Axis propaganda, which had intensified invenom after the offer of the guarantees.1 The Council was stillattempting to come to terms with this onslaught when the Germanarmies invaded Poland and the British government declared war on 3September.

With the outbreak of war in eastern Europe, the Balkans became oneof the most important areas for Allied political and strategic planning.The Allies had always implicitly recognized that they could do little tosave Poland, and most senior political figures, led by Chamberlain,who believed that Hitler would try to seize control of Romania'swheat and oil reserves, expected Germany to follow up the conquestof Poland by invading Romania.2 Churchill, now back at theadmiralty, agreed with Lloyd that a Balkan bloc should be organized,including Bulgaria (whose territorial claims would have to be dealtwith), to resist Nazi pressure and to form a defensive line against aGerman advance towards the Black Sea.3 By October, however,Chamberlain began to doubt whether Germany would soon attackRomania or the other Balkan states;4and, while the Italianswere non-belligerent, had no desire to fight in the Mediterranean merely todefend the Balkans or to bring Turkey into the war.5Neither, it mightbe added, did the Balkan states wish to fight the Axis powers on behalfof the Allies.

Tilea, however, repeatedly asked the British government for help,often on his own initiative. On 14 September, he asked Halifax forBritish military, economic, and diplomatic aid in creating a Balkanbloc.6 His pleas became more insistent after the invasion of Poland byRussia on 17 September. On the 27th, he asked Cadogan 'whether itwould not be a good plan to send someone out to Bucharest, and hequoted as an example Lord Lloyd, who had the ear of the King andmight be able to give good advice on the subject of Balkan1Memo, KennethJohnstone,22 May 1939,FO 395/642/P2099.2 N. Chamberlain o Hilda Chamberlain,17 Nov. 1939 [ChamberlainPapers,UniversityofBirminghamLibrary]NC 18 1 112 13 W. S. Churchill o N. Chamberlain, 1 Sept. 1939,NC 7/9/49.4 N. Chamberlain o IvyChamberlain, Oct. 1939,NC 18/1/1124.5 See Lynn H. Curtright,'GreatBritain, the Balkans,and Turkey in the Autumn of 1939',InternationalHistoryReview, x, (1988), 433-55.6 Halifax to Sir Reginald Hoare [ambassador t Bucharest],14 Sept. 1939, FO 371/23852/R7512.



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LordLloydand the Balkans 39reconciliationand consolidation',1a scheme which may have beendevised with Lloyd,who wrote to Halifax on the sameday askingtosee him to discussthe Balkansituation,'the urgencyof which at thepresentmoment obviouslycannot be exaggerated'.2 loydhadalreadyoffered his services for special missions to countries where he wasknown, such as Turkey, and Cadogan had felt certain that Halifaxwould takeup the offer.3Tilea also askedunofficiallywhether the guaranteeto Romaniacould be interpretedascoveringa Russian as well asa Germanattack,promptingdiscussion n the cabineton the 29th about how to answersuch a request.The prevailingview was that neither the Polish norRomanianguarantees overed Russia as a 'non-European'power.4The same day, Tilea again asked Halifax to send Lloyd toRomania. Owing to Carol II'srespectfor Lloyd, he argued,his visitwould encouragethe king to standfirm.Sargent houghtthatthe visitcould do no harm,thoughhe preferredo askSirReginaldHoare,theambassador t Bucharest,whether he agreed,as 'one can never be sureof M. Tilea'.5Nor would Lloyd undercut the efforts of the Britishambassador at Rome, Sir Percy Loraine, to keep Italy a non-belligerent; n fact, he 'might encouragethe King to work for someclose form of collaboration between the states of south-easternEurope, includingHungary'.6Meanwhile, the British missionswere being consulted about theutilityof a tourby Lloydof all of the Balkanstates.Not everyonewasin favour; Hoare, for example, who feared that in response theGermansmight send someone 'equally dynamic',arguedthat Lloydshould make a privatevisit.7Despite such misgivings,Sargent elt thatthe visit would be worthwhile. He told Hoare that Lloyd wouldmerely encourage Carol II by giving him a first-handaccount ofBritain's determinationto win the war, and bring back his personalimpressions.8Althoughthe Britishenvoys in YugoslaviaandHungarywerejustas scepticalandjust as worried about unpleasantrepercussions romGermany, he ministerat Sofia,GeorgeRendel, suggested hatLloyd's1Memo, Cadogan,27 Sept. 1939,FO 371/23754/R8127.2 Lloydto Halifax,27 Sept. 1939,LloydPapers19/12.3 Lloydto Cadogan,13 Sept., Cadogan o Lloyd,16 Sept. 1939,FO 371/22948/C14409.4 Cabinetminutes,29 Sept. 1939,31(39)6,CAB 65/1.5 Memo, Sargent,29 Sept. 1939,FO 371/23754/R8127.6 FO to Hoare,29 Sept. 1939,FO 371/23754/R8127.7 Hoare to FO, 2 Oct. 1939,FO 371/23755/R8336.8 Memo, Sargent,7 Oct. 1939,FO 371 237s 5 R8 336; WilliamStrang,asst. under-sec, of state,to Hoare,27 Oct. 1939,FO 800/R0/39/6.



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40 Louise Athertonvisit would help to end Bulgaria's diplomatic isolation.1 The ministerat Athens, Sir Michael Palairet, was equally enthusiastic. A strong per-sonality might give the necessary impetus to the formation of a Balkanbloc; indeed, this could be 'the psychological moment in which toarouse these countries to a sense of their common danger and thepossibility of common protection'.2

By the time the plans for Lloyd's tour were finalized on 19October, it had become part of a new attempt to create a Balkan bloc.With the breakdown of the Russo-Turkish negotiations in mid-October 1939, and the signing on the 19th of the Anglo-Turkishtreaty - which included a statement of Turkish obligations to Greeceand Romania - Halifax wished to find out whether Turkey would bewilling to join the Balkan bloc being proposed by Gafencu;3 a looseassociation of states who would suspend their territorial claims for theduration of the war, and remain benevolently neutral should any ofthem be attacked.4 Halifax, like Gafencu, also hoped that Mussoliniwould support such a neutral bloc, which would give Britain anopportunity to pry Italy away from Germany. This policy wasapproved by the cabinet on 20 October.5

Lloyd's task as an unofficial ambassador was to promote Balkanunity at what was initially perceived by the foreign office to be anauspicious moment. He had already been on a similar mission toSpain, ostensibly on Council business, where he discussed the inter-national situation with Franco.6 It was hoped that in the Balkans hecould give advice without awakening the suspicions of the Axispowers, as the first step towards drawing Italy into a neutral blocloosely associated with the Allies.7The plan to approach Italy was postponed, however. AfterLoraine warned Halifax that it would destabilize the Balkans, the1 Sir R. H. Campbell[Britishambassador t Belgrade] o FO, n Oct., Owen St ClairO'Malley[Britishambassador t Budapest] o FO, 15 Oct., Rendel to FO, 10 Oct. 1939,FO 371/23759/R8672.2 Palairet o FO, 13Oct. 1939,FO 371/23755/R8934.3 Halifaxto Sir Hughe Knatchbull-HugessonBritishambassador t Ankara],18 Oct. 1939,FO371/23759/R9046; Derengil, Turkish oreign olicy,pp. 88-9.4 Lungu, Romania between he GreatPowers, pp. 202-5.5 Cabinetminutes,20 Oct. 1939,61(39)9,CAB 65/1.6 Duringthis visit, Lloydhad,without any authorization, ttempted o interestthe Spanish n amediatingrole in the Balkans,an attemptwhich the foreignoffice only became aware of on 10Nov. throughPrince Paul:T. Shone [charged'affaires, elgrade] o Cadogan,10 Nov. 1939,FO371/23756/R10517.7 Memo, P. Nichols, 23 Oct. 1939, FO 371/23755/R9084. Lloyd was alsopersonaratawithMussoliniand had been suggestedasa suitable igureforopeningcontactsbetween Chamberlainand Mussolini n late 1937;Atherton, LordLloyd',pp. 39-42.



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LordLloydand the Balkans 41cabinet decided on the 28 th to wait until Loraine could return toLondon to explain why.1 On 3 November, a meeting was held at theforeign office, chaired by Halifax and attended by Loraine, Vansittart,Philip Nichols of the southern department, the parliamentary under-secretary, R. A. Butler, and, at the request of Halifax, Lloyd, despitethe objections of Cadogan and Nichols to the presence of an outsider.The meeting agreed that, although Gafencu should be encouraged totry to create a neutral bloc, Britain should not be openly involved.2On the following day, the cabinet decided that the Balkan statesshould be left to make their own political arrangements.3Two other developments deflected Britain from open inter-vention: France was not eager to see Italian influence in the Balkansextended, and Halifax had been told that the Italians had told theYugoslavs that they were opposed to the scheme for a neutral bloc.4By 1 1 November, the southern department considered the Romanianscheme dead, partly because the Anglo-French treaty with Turkey,which attempted to link the implementation of the guarantees to theBalkan states to Turkey and the putative bloc, increased the dangers ofGerman intervention.5 As the British were still interested in pro-moting a scheme which could be linked to the agreement withTurkey, and which might ensure stability in the Balkans, they had todecide 'whether there are no other means open to us to promoteconciliation in the Balkans which means reconciliation betweenBulgaria and her neighbours'.6 Lloyd's mission was one.Lloyd was sent to Romania, Bulgaria, and Yugoslavia during ahiatus in British diplomacy in the region. Although the Romanianneutral bloc was no longer an option, Balkan co-operation was stilldesirable and Romania the key to any agreement on territorial restitu-tion likely to satisfy Bulgarian revisionism. As the British could notopenly intervene, given their wish to encourage Italy to remainneutral, they needed a way to act unofficially. With his technicallyindependent position at the British Council, his linguistic abilities, andhis contacts in eastern Europe, Lloyd seemed ideal for this task.As Lloyd's briefing notes from the foreign office make clear, the1Lorainebelieved thatBritish nterventionwould only push Italycloser to Germany:Loraine oFO, 28 Oct. 1939,FO 371/23755/R9380; Cabinetminutes,28 Oct. 1939,63(39)7,CAB 65/1.2 Memo, Nichols, 3 Nov. 1939, FO 371/23756/R9638; The WarDiariesof OliverHarvey,1940-1945,ed.John Harvey(London, 1978),p. 327.3 Cabinetminutes,4 Nov. 1939,70(39)7,CAB 65/2.4 Campbell o Halifax,2 Nov. 1939,FO 371/23756/R9689; T. Shone to FO, 3 Nov. 1939,FO371/23756/R9804.5 Lungu, Romania between the GreatPowers, p. 206.6 Memo, Nichols, n Nov. 1939,FO 371/23756/R9804.



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42 Louise Athertonaffairs of the British Council were a convenient excuse for a politicalmission to Bucharest, Sofia, and Belgrade. While Lloyd was to stressinall three capitals that Britain was determined to win the war, and hadthe economic strength to do so, he was to tell Carol II privately thatthe British guarantee to Romania would not cover an attack by theSoviet Union. Such a message avoided an open declaration, likely toencourage the Soviets to seize Bessarabia. As Carol II had not seenHoare for some time, Lloyd was also to learn all he could about thecurrent policy of the Romanian government. In Bulgaria, he was towarn Boris III of the danger of allowing Bulgarian revisionism fullrein. Above all, he was to give no promise of British involvement inorganizing a neutral bloc.1Lloyd's tour began in Bucharest on 14 November. Gafencu, whorevealed to Lloyd the hitherto unknown details of a Romanian offerto Bulgaria to join the Balkan neutral bloc, was eager to devise some'machinery for common action',2 and hinted that British help wouldbe welcome. Such help, however, was what Lloyd had been expresslyforbidden to offer. Carol II apparently learned with equanimity of thelimits to the British guarantee and of Britain's rearmament and herdetermination to fight the war to the bitter end.Lloyd's task in Yugoslavia and Bulgaria was more straightforward:to give as much information as possible on the immensity of theBritish war effort and to gauge reactions to Gafencu's scheme. Lloyd'smain difficulty, as he had expected, was his inability to offer any proofof Britain's new industrial and military effort, or to offer the two statesany inducement for their adherence to a pro-Allied policy. With there-emergence of Russian expansionism, the Balkan monarchs wereonly interested in cash and weapons, and Germany had alreadyprovedmore willing to supply equipment than Great Britain.As a source of intelligence, Lloyd's tour was a success, especially inRomania. The foreign office considered that he had provided 'usefulinformation and impressions'. The news of the attempt to bringBulgaria into the Balkan bloc had been unexpected - Hoare had notbeen told of it for fear that the Allies would apply pressure - butSargent did not expect anything to come of it. He thought that Lloydhad steadied the Romanian government partly by stating his ownopinion that Turkey would come to Romania's aid if attacked.3Lloyd

1Notes for LordLloyd,7 Nov. 1939, BW 82/13 andFO 371/23759/R10000.2 Lloyds BalkanDiary, 17 Nov. 1939, Lloyd Papers20/4. Selected partsot this diarywereincorporatednto telegrams nd sentthroughdiplomaticchannels o London.3 Memo, Sargent,28 Nov., FO 371/23759/R11227and29 Nov. 1939,FO 371/23759/R11145.



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LordLloydand the Balkans 43had also done valuablework for the BritishCouncil. But he had notbeen able to offer money or arms,nor had he been able to improverelationsbetween Bulgariaand her neighbours.He had remindedthethree Balkanstatesthat they were still of interest to the Allies,but inthe absence of concrete aid, the Allied cause was of diminishinginterest o them.

Lloyd returned to Britain in December dissatisfiedwith Alliedpolicy in the Balkans.He acknowledged he importanceof projectingan imageof Britishstrength,and wrote to Halifaxthat he believedhe'did succeedin makingall those I met andthey were legion appreciatethe immensityof our war effort and thatI am surewas worth doing'.But Lloydhad come to the conclusion thatmore decisive action wasneeded: 'whetherthey like it or not, HMG will shortlyhave to createan easternfront and [he was certain]that the war will move in thatdirectionbeforeverylong.'1Such opinions were being echoed in the SupremeWar Council.While the French were eager to send a force to Salonika as a pre-emptive measure after the Soviet invasion of Finland on 30November, the British feared to offend Italy and were wary ofentanglement n a conflict with Russia.Moreover,they did not wantto divert resources o the buildupand maintenanceof such a force, orto divert troops from Egypt, while Italy's ntentions were unknown.They were unaffectedby the arguments xpressedat a meeting on 11December at GeneralMauriceGamelin'sheadquartersetween Britishand Frenchmilitaryrepresentatives, t which the Frenchpressedforthe landing of an Allied expeditionaryforce at Salonika to link upwith a projected 111 Balkan divisions. The British,understandably,doubtedwhether such an imposing supranational rmywasmore thana pipe dream.2During a cabinet meeting on the 14th, Chamberlainreiterated the British policy: no approach could be made to theBalkans tatesunlessthe Italianswere certain o remainneutral.3

During his Balkantour, Lloyd had met the commander-in-chiefin the MiddleEast,GeneralMaximeWeygand,the mainadvocateof aSalonika ront,and a thornin the side of the foreignoffice. Lloydnowadded his voice in support. On 21 December, he tried to persuadeHalifax o adopt Weygand'splan,andsentmessages o otherfriendsatthe foreign office through Robert Bruce Lockhart,who reported:'Lloyd saysthat the only argument n the Balkans s strength.If we do1Lloydto Halifax,11 Dec, Lloydto 2nd EarlBeatty,27 Dec. 1939,LloydPapers19/14.2 Record of meeting,11 Dec. 1939,copy in FO 371/23758/R11691.3 Cabinetminutes,7 Dec. 1939,99(39)5,CAB 65/2.



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44 Louise Athertonnothing we shall lose everything. If we are vigorous we have thesupport of the Balkans. Therefore, without too much consideration ofItaly we must go ahead with the formation of our Near East force.'1Lloyd told Halifax to send money and weapons to Yugoslavia, one ofthe key states, along with Turkey, to aid the creation of a blocdesigned to restrain both Russia and Germany. He criticized Lorainefor being too cautious: Italy should be told of the projected Alliedaction in Salonika, which should proceed regardless. But Italy shouldalso be asked to supply weapons to the Balkan bloc, regardless ofFrench susceptibilities.2 These schemes presupposed that the Balkanstates, including Turkey, would be willing to fight on behalf of theAllies. They were not willing, however, unless this coincided withtheir separate interests, which clearly did not extend to fighting Italy,Germany, or the Soviet Union.3As one of the main obstacles to the buildup of a Near Easternforce was the 'Loraine policy', Lloyd wrote to Loraine early in 1940,stressing the importance of trying to take advantage of Italianresentment of Russian involvement in the Balkans, and of firmness asthe only quality likely to impress Mussolini. If the Allies held a Balkanfront, he asked, would Italy not be more likely to join the Allied side,so avoiding the 'moral disaster' of a failure to uphold the guarantees?Lloyd recognized, however, that Loraine 's evaluation was effectivelydetermining British policy; 'a decision will have to be come to veryshortly, I feel sure, as to an eastern front or no, and your advice mayvery well be nearly decisive.'Loraine analysed the political situation very differently from Lloyd.In his view, a Balkan bloc, backed by the Allies, would violate therights of small states and, in effect, put Great Britain on the samemoral level as Germany. As Italy sought stability in the Balkans, therewas no point in taking action likely to cause trouble at a time whenthe British seemed unlikely to have to fulfil their guarantees to Greeceand Romania.4The period from December 1939 to January 1940 proved to bethe high point of the strategy of a Balkan front. Despite what seemedto be favourable circumstances, including the possibility that Mussolinimight be willing to discuss the Balkans, the Allies held back: the plan,which was always seen as a defensive, rather than an offensive,

1R. B. Lockhart o Sargent,21 Dec. 1939,FO 371/23758/R11910.2 Memo, Halifax,21 Dec. 1939,FO 371 23758/R1 1940.3 Derengil, TurkishForeignPolicy, p. 75.4 Lloydto Loraine,1Jan.,Loraine o Lloyd,12Jan. 1940,Lloyd Papers19/16.



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LordLloydand the Balkans 45operation, was jeopardized by lack of weapons, manpower, and over-stretched lines of communication, and by the unpredictability of Italy.Moreover, it was being overtaken by a plan to cut German iron-oresupplies from Scandinavia. The scare in January 1940 of an imminentattack by Germany through the Low Countries shifted attention backon the western front.On 27 March, in a memorandum to the cabinet, Halifax statedthat conditions in the Balkans had not greatly changed; Britain couldoffer no remedy should Russia, Germany, and Italy intervene simul-taneously in south-eastern Europe. Britain should aim to promoteBalkan unity and to keep Italy neutral.1 But even if Britain could notdefend the Balkans from Germany or Russia, German influence couldstill be countered by propaganda, as 'there was probably some "slack"in the political situation that could be taken up before reaching thebrink of war. He proposed, therefore, to give instructions that ourmissions in this part of Europe should "show the flag" as much aspossible and should be vigorous in their attempts to counteract theeffects of German propaganda.'2The policy, which relied heavily onthe British Council to play the role first assigned to it in 1936, wasunlikely to counteract, for example, German demands on Romaniafor oil supplies, or the fear of Russia aroused by the events in Finland.

Although Lloyd's work since the outbreak of war had beenprimarily political, he had supervised the distribution throughout theBalkans of The BritishCase, his defence of the British decision to go towar, and pressed for a larger grant from the treasuryfor Council workin the region. After failing to persuade Loraine or Halifax to defendthe Balkans in earnest, Lloyd took up instead the scheme for a Britishinstitute at Bucharest, for which Carol II had offered a site during hisvisit the previous year.3 By March 1940, the institute became onemanifestation of the policy of intensified propaganda in the Balkans,now almost the sole British response to increasing enemy activity.The main obstacle in the way of the institute was the treasury'sunderstandable reluctance to finance building schemes in foreigncountries in wartime. Lloyd's main champion in the ensuing battle, asusual, was Halifax, much to the disgust of the under-secretary at thetreasury, Sir Alan Barlow, who commented that 'the FO, of course,merely rubber stamp every proposal he puts up.'4 With a persistent

1Memo, southerndept., 26 Mar.1940,FO 371/24887/R3856.2 Cabinetminutes,27 Mar.1940,76 (40)6, CAB65/6.3 Lloydto Halifax,11 Nov. 1939,T 161/1029/S35581/03/39.4 Minute,Barlow,5 Mar. 1940,T 161/1029/S35581/03/39.



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46 Louise Athertonfaith in the value of economic and culturalgestures,Halifax told thechancellorof the exchequer, SirJohn Simon, on 14 March that theAllied cause would be damaged f the buildingdid not go ahead.Asthe institutewould rival Germanand Italianculturalenterprisesn thearea,he was 'surethaton politicalgrounds t would be most unwisetogive ground', or to give the impressionof rebuffingthe Romanianoffer.1There the matter rested until the renunciation of the Britishguarantee n July and the occupationof Romania by Germantroopsin November 1940.

The episodeillustrates ot only the seriousnesswith which Britishpolicy-makers regardedculturalgestures, but also their belief thatsending ballet companies, lecturers,and theatre companies to toursouth-easternEurope might induce the Balkanstates to ignore theimmediatedangerfrom Russia or Germany,throw in their lot withthe Allies, and open themselvesto invasion. Such gesturesmight beuseful adjuncts o diplomacyin peacetime,but the government,andparticularlyHalifax, did not recognize their incongruity in theincreasingly desperateBalkansituation of early 1940. The govern-ment's attitude, combined with Lloyd's amateurespionage, rendersOlivia Manning's account in The BalkanTrilogyof productions ofShakespeare'splays at Bucharestentirely credible.2But diplomaticinitiativeswere not entirely prohibited. Halifax consideredsendingLloydon anothermissionto Bulgaria,Romania,andYugoslaviaearlyin 1940, though there is no indication n the recordsof its scope.3Heattendedmeetings at the foreign office duringApril of officials fromBritain's missions in the Balkanssolely to representthe Council.4Nevertheless, he was being given privileged access to the foreignoffice despitenot being a diplomat,a member of the government,oran uncritical upporter f Chamberlain.With the failureof the campaign n Scandinavia,France made alastattemptto resurrect he Balkanfront. Shortlybefore the Germanattackon Belgium and Holland on 10 May, the Britishcabinet con-sidereda paperwhich linkedBritain's mperialpositionin the MiddleEast to the south-easternapproaches,on which Halifaxcommentedthat the region had become more strategicallymportantthan ever:possessionof the Straitsandeven Constantinopleby an enemy wouldendanger Britain's position throughout the Middle East.5Lloyd,1Minute,Barlow,5 Mar.,Halifax o SirJohn Simon, 14Mar.1940,T 161/1029/ 535581/03/39.2 OliviaManning,The BalkanTrilogyLondon,1960-5).3 Lloydto Palairet,15Jan. 1940,Lloyd Papers19/16.4 Sargent o Lloyd,3 Apr. 1940,FO 800/277.5 Cabinetpaper,The BalkanFront',29 Apr. 1940,WP (40)140,FO 371/24889/R5565.



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LordLloydand theBalkans 47however, hadrecognizedthisyearsbefore. He hadput a greatdeal ofeffort at the British Council into remindingthe government of theimportanceof the easternapproaches, hough he had failed to per-suade them to provide the economic and militarybacking for aneastern front. With his appointment on 13 May 1940 as colonialsecretaryn the Churchillgovernment,and the opening of the war inthe west, Lloyd'sactivities n south-easternEuropeended and, as theBalkan states slowly gave in to Nazi and Soviet pressure, so didCouncilwork in the region.From its creation in 1934, the British Council had been pointed bythe foreignoffice towardseasternEurope; n thissense,Lloyd'sactivit-ies as its chairman ittedwithin an establishedramework.But Lloyd'sinterventions n easternEuropeanpolitics duringthe late 1930swereintended to promote Britishpolitical and economic interests in theregion. Though he did not succeed, he gained, with the help of hisold friendHalifax,privilegedaccess to policy planning.Gradually,hefound a sympathetically in Orme Sargent,a noted 'anti-appeaser' tthe foreign office, who supported him as a candidate for specialmissions.Lloyd was especiallyvaluableduringthe earlystagesof the war,when his presidency of the Council effectively camouflaged hisdiplomaticcontacts with leadersof neutralstateswho, by late 1939,feared to deal openly with the accreditedBritishrepresentatives.Hisposition was an ambivalentone: neither a diplomatnor a politician,but a peer with a semi-official position and influential politicalcontacts.It was alsoincreasinglyrregular, ut despitehis oppositiontothe Munich agreementand,afterSeptember1938, to furtherappease-ment of Germany,Chamberlainneversoughthis removal.In fact,hiswork in the Balkans may have helped him towards the colonialsecretaryship.As the nature of Nazi policy became clear in 1938and1939, Lloyd undoubtedlyfound himself in a strong position, as didChurchillandthe other anti-appeasers;t would have been very diffi-cult for Chamberlain o remove Lloyd from the Council when hisown party was demanding the inclusion of anti-appeasers n thegovernment.Although Lloyd undoubtedlyraised he profileof the Councilandwas useful to the foreign office, he was dissatisfiedwith his achieve-ments:he had not managedto convince the governmentof the needto prop up the Balkanstatesand,afterthe outbreakof war, to createaBalkan ront. He could not consistently nfluence:he could only stateopinionsthatmightor mightnot fit in with currentpolitical thinking.



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48 Louise AthertonOddly enough, his closest political contact was Halifax, a staunchappeaser but also the cabinet minister most interested in the idea ofeconomic diplomacy in eastern Europe. But even Halifax did notaccept Lloyd's arguments uncritically.Although Lloyd's criticism of appeasement and his intelligence-gathering may have been one of the many influences leading to thechange, in late 1938, in the British government's attitude towardsHitler, his most important contribution was to act as a conduit forinformation and communication between European statesmen. Lloydtried to increase British involvement in a region in which Germaneconomic and political influence was expanding; the result was anunequal propaganda competition between Germany and Britain, onethat Britain had no intention of trying to win at any cost and whichincreased the malign effect of the guarantees in giving the Balkanleaders false hope. The Council received regular appeals from terrifiedeastern European rulers who hoped that its presence was the first signof help to come. It was not, and Lloyd's work only emphasized theinadequacy of using culture as diplomacy as a symbol of power in aremote region. He was fated never to persuade the British governmentof the need to create an economic and military bloc in south-easternEurooe as an imperative of Middle Eastern defence.PublicRecordOffice,London