Lord Lloyd at the British Council and the Balkan Front, 1937-1940 Author(s): Louise Atherton Source: The

International History Review, Vol. 16, No. 1 (Feb., 1994), pp. 25-48 Published by: Taylor & Francis, Ltd. Stable URL: http://www.jstor.org/stable/40106850 . Accessed: 18/09/2013 05:29
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LOUISE ATHERTON

Lord Lloyd at the British Council and the Balkan Front, 1937- 1940
the attention recently paid to the role of cultural in the little analysis has been made of the 1930s, propaganda role of the British Council and its direction by the political in before the outbreak of the Second office the years just foreign World War. ! Foreign office and British Council interest in the Balkans was apparent as early as 1935 and, during the late 1930s, the work of the Council in the region was given high priority, along with Egypt and the empire in the Middle East. The activities of Lord Lloyd of Dolobran, the chairman from 1937 to 1941, are still a subject of speculation, for there is sparse but significant evidence to suggest his involvement in secret government missions, independent intelligencegathering, and espionage. Most of these activities were concentrated in the Near East and the Balkans. Many older works dealing with British policy in eastern Europe rarely, if at all, mention Lloyd's activities, although recent works acknowledge his obscure but persistent influence.2 Between 1937 and 1940, Lloyd was drawn further into south-eastern European affairs both officially and unofficially. His increasingly audacious interventions ranged from attempts to promote a policy of British economic warfare in the Balkans to efforts to induce the Spanish dictator, General Francisco Franco, to sponsor a western-aligned neutral Balkan
I thankJohn Charmley(Universityof EastAnglia)and Meryl Foster(Public Record Office) for their commentson earlierdraftsof this article. (Cambridge,1981), does not analyseits direction by the foreign office or the implications of Council: TheFirstFifty Lloyd'spoliticalactivities,and neitherdoes FrancesDonaldson, TheBritish Years (London, 1984). the SecondWorldWar(London, 1976);J. R. M. Butler, GrandStrategy (London, 1957); Sir L.
British Foreign Policy in the Second World War (London, 1970): Works which 1 P. M. Taylor, The Projection of Britain: British Overseas Publicity and Propaganda, 1919-1939

^ bee, tor example, f. U. v^uinlan, (^lasn over Komanta: British ana American Policies towards Romania, 1938-1947 (Los Angeles, 1977); Elisabeth Barker, British Policy in South-Eastern Europe in Woodward,

acknowledgethe activitiesof Lloyd include: D. C. Watt, How WarCame:TheImmediate Origins

of the Second World War, 1938-1939 (London, 1989); D. B. Lungu, Romania between the Great Powers, 1933-1940 (Durham, NC, 1989); J. Charmley, Lord Lloyd and the Decline of the British Empire (London, 1987); Philippe Marguerat, Le Illikme Reich et le petrole roumain, 1938-1940

(Geneva, 1977). The International History Review, xvi, 1, February 1994, pp. 1-220 cn issn 0707-5332 The International History Review. All Rights Reserved.

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bloc. Lloyd's name regularly appears in official papers, private correspondence, and political diaries as an exponent of a policy of firmness. Recognized as an opponent of Chamberlain after the Munich agreement, nevertheless he remained the head of a semi-official body. Lord Lloyd was appointed chairman of the British Council in July 1937. His career had been varied and distinguished: special attache at the British embassy at Constantinople; wartime service in the Dardanelles and with T. E. Lawrence in Arabia; Unionist MP; governor of Bombay between 191 8 and 1924, and high commissioner in Egypt between 1925 and 1929. A disciple of Joseph Chamberlain and committed to tariff reform, Lloyd had become interested in Great Britain's financial and trading links with its empire and wished to oppose German economic expansion in the Near East well before the First World War. Idealistically, almost mystically, devoted to the British Empire, he advocated the use of force, if necessary, to maintain British control. In Egypt, however, he found himself increasingly at odds with the foreign office headed by Austen Chamberlain over an Anglo-Egyptian treaty designed to regularize post-war relations. In 1929, facing probable dismissal by the new Labour foreign secretary, Arthur Henderson, Lloyd resigned. It seemed to be the end of his colonial administrative career.1 During the 1930s, Lloyd found other outlets for his formidable energy. He became chairman of the Navy League in 1930 and campaigned vigorously for adequate British defences as a corrective to the relative disarmament of Great Britain during the 1920s. He also opposed, as an active member of the India Defence League, the India bill in the house of lords, thus aligning himself with the imperialist right wing of the Conservative Party and with Winston Churchill and other critics of Stanley Baldwin. By 1936, he had developed an absorbing interest in the work of the British Council, serving as chairman of the Near East Committee from November 1935, and using his almost inexhaustible political contacts to further British influence through educational and cultural channels. Lloyd would become chairman of the Council in July 1937 on the recommendation of Sir Eustace Percy, the outgoing chairman, despite the deeply ingrained distrust of the foreign office. The British Council had been formed in 1934 to represent abroad the British way of life. Although publicly presented as an independent
1 Lloyd's career is described more fully in Colin Forbes Adam, Life of Lord Lloyd (London, 1948); Charmley, Lord Lloyd.

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Lord Lloyd and the Balkans

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body, it was, from its creation,guided by the foreign office, and was a effortsof the totalitarian responseto the culturalpropaganda powers. As a prominent official of the news departmentof the foreign office and virtualfounderof the Council, Rex Leeper,commented in 1943: 'the object was not culture for culture'ssake, but culture for policy's sake.'1Both he and the permanentunder-secretary, Robert Vansittart, took a close interestin the Council's work and, from the start,it was closely linked to prominentcriticsof appeasement, including- laterLloyd himself.2 The Council's prioritieswere set yearly by the foreign office in order of political and economic importance. As early as November 1935, the foreign secretary,Sir SamuelHoare, was directingattention to Poland, Yugoslavia,Romania, Bulgaria,and Finland.There were pressingcommercialreasonsfor the interestin Poland and Yugoslavia, but, Hoare stated,'in all, the dangerof Germanculturaland commercial penetration,which may be expected to increaseas the power and wealth of Germanyrevive, makes it particularly desirablefor British to secure as firm a hold as possible on the minds culturalpropaganda and interestsof the population,before the counter attractionbecomes too strong'.3These priorities were to remain constant between the wars, with a gradualupgrading of the states of central and eastern Europe.4 There is also evidence to suggest that Anthony Eden, when saw the Council as a politicallycontrolledbody with foreign secretary, the task of influencing neutralcountrieswhose alignmentwith Great in wartime. In November 1937, he Britainwould prove advantageous emphasizedthat GreatBritainshould draw as many as possible of the unaligned states to her side. The countries specified - Portugal, Greece, Turkey, Yugoslavia,Romania, and Poland - were all given the emphasison high priorityfor the Council.5With minor variations, the eastremainedconstantuntil 1939.6
1 Memo, PublicityServicesof the foreign office, 8 Feb. 1943 [PublicRecord Office], F[oreign] O[ffice Records] 366/ 1339/X 1886. 2 As recognized by the second chairman,Lord Eustace Percy, SomeMemories (London, 1958), p. 159. 3 Directive to Britishrepresentatives abroad,8 Nov. 1935, FO 395/529/P3900. 4 List of prioritiesfor the BritishCouncil, memo on Britishculturalpropaganda by Kenneth R. Johnstone, 17 Nov. 1937, deputy secretary-general [Public Record Office], TfreasuryRecords] 161/1238/5355581/8. 5 Memo, Eden, 'The Strength of Great Britain and Certain Other Nations as of Jan. 1938', 6 List of prioritiesfor 1940-1, Lloyd to Halifax, 22 Apr. 1940 [Public Record Office, British Council files], BW 2/340.
Documentson British ForeignPolicy, 2nd series, xix. 348.

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Thus, from an early stage, the eastern Mediterranean and the Balkans were identified as strategically, economically, and politically important 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 to developing cultural relationships, was not backed up initially by a complementary policy of economic or military help to the east European states. On this point, Lloyd and the British government were to disagree fundamentally. In Lloyd's view, the Council's priorities were governed by strategic necessity. The Council should give the first serious sign of Britain's determination both to resist Nazi Germany and to preserve the Near Eastern empire; hence Lloyd's preoccupation with the Balkans. Current British defence planning for the Near East stressed the importance of Egypt. Lloyd, however, was one of the first to argue that British defence priorities, in an echo of the Palmerstonian era, must include the approaches to Turkey and the Straits. With the anschluss between Austria and Germany in March 1938, and the apparent threat to Czechoslovakia, Lloyd concluded that Germany was about to carry out her long-term plans to dominate eastern Europe. By the end of the year, he was convinced that, in the absence of other alternatives, Britain should lend her economic and political weight to the creation of a Balkan front that would resist German economic penetration and safeguard the British imperial * position. For Lloyd, the British Council was a means to this end. In April 1938, Lloyd began his campaign to persuade the prime minister, Neville Chamberlain, and the foreign secretary, Lord Halifax, that greater British involvement in eastern Europe was desirable as an antidote to the tightening hold of Germany on the local economies. In doing so, he was ignoring the fact that British trade with the Balkans had never been large, and Chamberlain's own view that south-eastern Europe was an area where the expansion of German influence was natural and inevitable.2 In May, Lloyd suggested to Vansittart, also an advocate of economic and political activity in eastern Europe, that more effective propaganda was required, as a preliminary to economic aid; after discussing the matter privately with King George II of Greece, he made similar suggestions to
1 For furtherdetailsof Lloyd's work at the Council at this time, see V. L. R. Atherton, 'Lord Lloyd: Cultural Diplomacy and Foreign Policy, 1937-1941' (Ph.D. dissertation,East Anglia, 1988). 191.

2 D. Kaiser, EconomicDiplomacy and the Origins oj the second World War (Princeton, 1980), pp. 175,

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LordLloyd and the Balkans

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Chamberlain, citing increased imports of staple products from Turkey, Greece, Romania, and Bulgaria as an example.1 To some extent, Lloyd's growing concern matched a new government awareness, for although an economic offensive was not envisaged, the government was prepared to make isolated gestures of support for specific countries; one being the decision in May 1938 to allow 16 million of commercial and armaments credits to Turkey, which German officials appear to have attributed solely to Lloyd.2 The credits to Turkey did not represent the start of a commercial drive,3 but they did indicate a change in Halifax's attitude towards economic initiatives in eastern Europe. He was probably influenced by Lloyd, who was able to provide first-hand information to corroborate the reports which the foreign office was receiving, indicating the desire of the Balkan states for British help. Though Halifax was willing to argue with Chamberlain in the cabinet, however, he was not willing to advocate a policy of economic warfare against Germany.4 In spite of his status as chairman of an ostensibly politically neutral organization, Lloyd played a politically active role before and during the Munich crisis, arguing that he was merely acting individually and serving the national interest. Later, the foreign office found it politically expedient to encourage him, sending him on various political missions both before and after the outbreak of war. Lloyd also used his extensive European contacts to obtain information which he hoped would alert the government to the dangers of German expansion; for example, passing on to Chamberlain and Halifax reports from Ian Colvin, the correspondent of the News Chronicle at Berlin, which warned of a German plan to attack Czechoslovakia on 28 September.5 Lloyd encouraged Halifax to take a firm stand during August and early September but, despite a visit to France to boost French morale and collaboration with Churchill's group, he could do nothing to prevent the events which culminated in the Munich conference and the cession of the Sudetenland.6 That Lloyd ran his own private intelligence agency, something
1 Lloyd to Vansittart, 25 May 1938, FO 395/589/P1913; Lloyd to George II of Greece, 4 May 1938, [Lord]Lloyd [of Dolobran]Papers[ChurchillCollege, Cambridge],miscellaneouscorrespondence. Quotations from the Lloyd papersare given with permissionof John Charmley,on behalfof LadyLloyd of Dolobran. 2 18 Oct. 1938, Documents on German SeriesD (London, 1953),v. no. 234. Foreign Policy, 4 Foreign policy committee minutes, 1 June 1938, FP(38)3O[Public Record Office], CAB[inet Records] 27/623. 5 Colvin to Lloyd, 3 Aug. 1938,Ian Colvin, Vansittart in Office (London, 1965),pp. 218-21. 6 For an account of Lloyd'sactivities,see Charmley,Lord Lloyd,pp. 217-20.
3 Kaiser, EconomicOrigins, p. 249.

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along the lines of that establishedby Vansittart,is evident from his papers. He also had links with official intelligence sources, corresponding with the head of the Secret Intelligence Service and being There is also evidence to suggest that he given access to its reports.1 some of his to 'agents' inside the British Council; in hoped place December 1938, when the expansion of British Council work in Germany was discussedin the cabinet, Lloyd's choice as director of the proposed Travel Association Office in Berlin was Colvin. Although the projectwasjettisoned when GermanyinvadedBohemia and Moraviain March 1939,2the episode shows Lloyd'strue aims and his willingnessto exploit his position at the Council: there were to be complaintsabout the intelligence activities of Council employees in Athens in 1940. It is worth noting that Halifax asked Lloyd in May 1940, when Lloyd became colonial secretary in the Churchill coalition, to 'overhaul'the SIS.3 In the months afterthe Munich agreementof 29 September1938, Lloyd continued to push for greater British involvement in eastern Europe. Despite the apparent renunciation of French and British for the region, and the prevailingofficialview that it was responsibility effectivelylost, Lloyd arguedthat Britaincould and should attemptto break through Germany's eastern European trading structure. Not convinced that Hitler had finally fulfilled his ambitions and disappointed with Chamberlainat Munich, he tried to promote a closer relationshipbetween Britainand the remainingmembersof the Little Entente, Romania and Yugoslavia.His efforts centred on Romania, where his associates were Grigore Gafencu, later the Romanian foreign minister,and Virgil Viorel Tilea, later the Romanian minister at London, both of whom had previously worked with the British Council. Both were eager to supportLloyd's initiative to counteract the effects of the Munich settlement, and to dispel scepticism about the likelihood of receiving enough British aid to counterbalance economic and politicalpressure. Germany's Most of the members of the Little Entente, including Romania, saw no alternativeto closer diplomatic and economic relationswith The Romanian government had asked the British before Germany.4 Munich to purchasemore gasolineand cereals,invest in construction, and help to extractRomania's naturalresources.They had also asked
1 Watt, 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 Great Powers, p. 136.

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for an economic mission headed by the chief economic adviserto the foreign office, Sir FrederickLeith Ross.1 Such requestshad been discouraged on the grounds that the proposals were economically unsoundand politicallyrisky:the Germansmight see them as encirclement (or so said the members of the government hostile to British investment in the Balkans),and they would jeopardize the existing trade agreements with Australia, Canada, and the United States. Economic aid to Greece and Turkey was considered to have the greaterstrategic priority.2 In October 1938, at the invitation of King Carol II, Lloyd visited Romania, ostensibly to further Anglo-Romanian cultural links but more pertinently to witness the Romanian army manoeuvres. The Britishembassyin Bucharestonly reluctantly agreedto the visit, as the Romanian press was publicizing it as an official British economic mission.3Carol II, who used the occasion to press once more for economic aid, found an eagerlistenerin Lloyd, who sent back a series of impassionedpleas to the foreign office to prevent Romania from becoming tied inextricablyto the German economy. Britain should spend500,000 on oil, buy 600,000 tons of wheat, and help Romania to build a navalbase at the mouth of the Danube.4 Such suggestionspleasedthe Romanian government,eager to sell as much as possible of its huge grain harvestto GreatBritainto avoid furthereconomic dependencyon Berlin, to increaseits hardcurrency of 2 reserves,and to build on the clearingand currencyarrangement Septemberwith the Britishgovernment,aimed at improvingthe trade balance between the two countries.5Lloyd considered the matter importantenough to cut short his visit to returnhome and argue his case in person. By the time he arrived,however, a decision had been reached. A Romanian wheat purchasehad been actively considered since late September1938, when 300,000 tons had been offeredto the Food Defence Plansdepartment, which had recommendedthe purchaseof a much smallerquantity.On 6 October, Vansittart; the under-secretary, southerndepartment,Sir Orme Sargent;and the head of the southern
1 Memo, southern dept., assistanceto Romania, 30 June 1938, FO 371/22464/R5959; Kaiser, 2 Sir Orme Sargentto Sir FrederickLeith Ross, 27 June 1938, FO 371/22457/R5760; 'British in Centraland South-Eastern Priorities Europe', 1June 1938, FO 371/22342/R5558. 3 Michael Palairet[Britishambassador at Bucharest]to FO, 10 Oct. 1938, FO 371/22459/R8195 and messagefrom Lloyd, 12 Oct. 1938,FO 371/22459/R8196. 4 Farquar to 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-

EconomicDiplomacy, p. 256.

17.

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department, Edward Ingram, urged Halifax to buy 200,000 tons, and Lloyd's telegrams of 10 and 12 October, provided a welcome reinforcement.1 Upon receiving the reports from Bucharest,2 Halifax tried to speed up the discussion of the wheat purchases, stressing 'how urgent the matter is, and of what importance it is without delay to try and do something in the economic sphere for Romania'.3 Although Lloyd's figure of 600,000 tons was thought to be too high, the board of trade, under pressure from Halifax, was willing to buy 200,000 tons;4 Halifax was willing to justify the step to Chamberlain as a signal that Britain, in a 'time of great unsettlement', still retained an interest in south-eastern Europe.5 Chamberlain agreed. Such a symbol would not, he felt, contravene his foreign policy; neither was the quantity so large that Germany would perceive the purchase as an attempt to prevent her from expanding her trade with the Balkans.6 Lloyd, disappointed that only one-third of the amount of wheat available would be bought, appealed again to Halifax and the permanent under-secretary, Sir Alexander Cadogan, but to no avail.7 Lloyd's only consolation was Cadogan's privately expressed opinion that, even if a sustained economic effort could not be made in eastern Europe while peace hung in the balance, a firm decision would have to be taken soon either to prop up the Balkan states or to leave them to their fate.8 Lloyd's proposals, carrying with them the risk of German accusations of encirclement, were not acceptable to Halifax during the period of post-Munich uncertainty. But Lloyd did have a following in the southern department of the foreign office; as Halifax admitted, 'from the purely departmental angle [he] was preaching to the converted.'9 The episode, however, illustrates the ambiguity in British policy in eastern Europe; despite the implications of Munich, Chamberlain was willing to make the first large-scale grain purchase
1 Kaiser, EconomicDiplomacy, p. 291.

2Palairet to FO, 10 Oct., FO 371/22459/R8195; message from Lloyd, 12 Oct. 1938, FO 371/22459/R8196. 3 Halifax to Oliver Stanley, president of the board of trade, 1 1 Oct. 1938, FO 371/ 22459/R8I974 Minute, E. Ingram,12 Oct. 1938, FO 371/22459/R8230. 5 Halifaxto Chamberlain, 13 Oct. 1938, FO 371/22459/R8307. 6 D. Cleverly,asst.sec. at the treasury[to firstlord] to Oliver Harvey,privatesec. to foreign sec, andthe Great Powers, 14 Oct. 1938,FO 371/22459/R8307; Lungu,Romania p. 139. 7 Memo, E. Ingram, 15 Oct. 1938, FO 371/22459/R8196; Cadogan to Lloyd, 15 Oct. 1838, ibid. See also, C. J. Van Kessell,'The BritishReaction to GermanEconomic Expansionin South EasternEurope, 1936-9' (Ph.D. dissertation, London, 1972),pp. 186-91. 8 Cadoganto Lloyd, 15 Oct. 1838,FO 371/22459/R8196. 9 Halifaxto Lloyd, 19 Oct. 1939, Lloyd Papers19/7.

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Lord LloydandtheBalkans

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from eastern Europe in recent years, yet was also later to encourage Leith Ross's attempts to concede to Germany, as part of a general pacification, a special position in the region.1 For the rest of 1938, Lloyd tried to harry the government. He refused to accept Halifax's arguments that too overt a show of British help would incite the very German interference it was designed to prevent; nor did he accept the argument that Romania would probably be more of a liability to Great Britain than an asset. A tour of the Balkans and Germany in October and November by the secretarygeneral of the British Council, Colonel Charles Bridge, confirmed Lloyd's opinion that Britain should greatly increase its cultural and economic activity in the region.2 Meanwhile, Lloyd remained in contact with the Romanian finance minister, M. Constantinescu, and offered to use his private financial and business contacts on Romania's behalf.3 Between 15 and 18 November, Carol II visited London; in his requests of the government, he was backed up by Lloyd, still trying to counteract what he considered as a half-hearted and misguided British policy.4 Lloyd may have even visited Bucharest briefly in the following weeks, after Carol II had gone on to Germany to discuss with Hitler and Goering Romania's need for more armaments and economic aid.5 There is little evidence for Lloyd's visit, or to suggest whether it was official, but in a private letter written on 24 November, he states that he had been 'to see what could be saved in the Balkans from the Nazis', and more particularly from the blandishments of the German economics minister, Dr Walther Funk, who was touring the Balkans on an economic mission for Germany.6 Between late 1938 and mid- 1939, Lloyd concentrated on helping private British companies keen to expand their business in the Danubian basin, either independently or with government help. After the visits of Carol II and Prince Paul of Yugoslavia to Britain in November, he arranged for the firm of Spencer (Melksham) Limited to discuss with treasury officials a plan for building grain silos in Romania, which had been mentioned by Carol II during a meeting with Chamberlain and Halifax. The plan, designed to make Romanian
1 Kaiser,Economic Diplomacy, pp. 286-8, 293. 2 Report on Bridge'stour of the Balkans,Oct. to Nov. 1938, BW 2/ 141. 3 Lloyd to M. Constantinescu, 20 Oct. 1938, Lloyd Papers19/7. 4 D. C. Watt, How WarCame,p. 90. 6 Lloyd to Lt. Col. Francis-Scott,24 Nov. 1938, Lloyd Papers17/8. There is no more evidence on this subjectin the Lloyd Papersor in the foreign office or News Departmentfiles.
5 Lungu, Romania betweenthe Great Powers, pp. 142-4.

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grain exports more competitive,1 had the support of the interdepartmental committee on economic aid to south-eastern Europe. Simultaneously, Lloyd advised the Romanian government on how to lobby the British government more effectively. In January 1939, he suggested to the new Romanian foreign minister, Grigore Gafencu a former editor of the newspaper Timpul, which had puffed up the importance of Lloyd's visit in October 1938 that the new Romanian ambassador should be a person of 'considerable energy and position'.2 Tilea, the president of the Anglo-Romanian Society between 193 1 and 1939, was appointed shortly afterwards. In early 1939, Lloyd organized various private commercial enterprises to buy Balkan products. His chief collaborator was Lord Sempill, a member of the Navy League and deputy chairman of the council of the London chamber of commerce between 193 1 and 1934, who was impressed by Lloyd's propaganda efforts and wanted to back them with specific business arrangements.3 Lloyd's association with Sempill appears to have gone back to 1938, when both promoted the import of Greek tobacco and advised Chamberlain to negotiate directly with British tobacco companies.4 Their efforts were augmented by Lloyd's other contacts, including the Industrial Facilities Company, which had been formed to deal with the credits granted to Turkey in May 1938 and which became involved in putting forward an unofficial economic deal for Greece, Bulgaria, and Turkey. These efforts were paralleled by Lloyd's political efforts. When he was asked in February 1939 to undertake a semi-official mission to Greece to repair relations between the Greek government and the British legation, he tried to give the mission a proconsular tinge. He had already made various attempts to modify the Greek dictatorship of General Joannes Metaxas, and was in contact with his opponents and former Venizelists. In February, he persuaded Sargent to allow him to try to 'soften' the dictatorship, which led to a cultural agreement that Lloyd believed gave the British control over the Nazi-type Youth Movements in Greece.5 On his return, Lloyd advocated more forcefully the purchase of Greek tobacco - possibly as a result of his conversations with
1 A. E. Lee to Miss N. Cracknell [junior treasury officials], 16 Nov. 1938, T 160/908/ F11173/03/3. 2 Lloyd to Gafencu,4 Jan. 1939,Lloyd Papers 19/9. 3 LordSempillto Halifax,2 Feb. 1939, FO 371/22381/R959. 4 Van Kessell,'The BritishReaction', pp. 139-43. 5 Atherton, Lord Lloyd , pp. 130-6;J. S. Kohopouhs, Greece andthe British Connection, 1935-1941 (Oxford, 1971),pp. 102-6; Watt, How WarCame,p. 210.

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George II of Greece and Metaxas, of which there is no record - but he remained hampered by the reluctance of the tobacco companies, given that North American tobacco had all but captured the British market, and the companies' belief that an attempt to sell a different product would lead to considerable loss. Neither was there the political will at the treasury - who doubted the economic viability of Lloyd's and SempilTs plans, a view echoed by the tobacco companies1 - to upset US and Canadian merchants in favour of an economically unjustifiable connection with eastern Europe. As Halifax appeared more sympathetic, Lloyd sent him details of the schemes. But while Halifax was willing to urge the government to negotiate with the tobacco companies, he refused to back Lloyd and Sempill against the treasury in the cabinet; he doubted whether they could obtain enough financial backing.2 In mid-March, Lloyd presented to a meeting held at the treasury a scheme for a private marketing company to import Greek, Turkish, and Bulgarian goods, chiefly tobacco, which would provide an example for other companies. As the company would inevitably make a loss at first, it would require financial backing from the government, which in turn would require special legislation.3 Lloyd appealed to Halifax, claiming, somewhat naively, that the matter could be settled between departments and, if Halifax was too busy, Lloyd would act for him. But Halifax was not willing to give Lloyd a free hand, and neither was the treasury.4 Lloyd and Halifax were looking at the Balkans from different viewpoints: Lloyd hoped for a sustained and unifying economic offensive, while Halifax was willing to act only when British interests were clearly involved and for specific purposes. On 13 April, the government gave guarantees to Romania and Greece, but little concrete commercial aid followed them before the Balkans collapsed in 1940. The guarantees were to act as limited deterrents; they did not prove to be the first step in an interventionist policy, as Lloyd had hoped. Lloyd was drawn back into Romanian affairsin March, dismayed by Germany's more vigorous efforts to tie down Romania economically, particularly after the German-Romanian economic agreement of
1 Leith Ross to Sargent, 15 Mar., FO 371/23764/R1743; minute, Nichols, 17 Apr., Lord Tobacco Company]to Sargent,19 Apr. 1939, FO 371/23764/R3033. Dulverton [Imperial 2 Halifaxto Sir R. Hoare, 2 Feb. 1939, FO 371722381/R959. 3 Memo, E. W. Playfair, 20 Mar. 1939, FO 371/23764/R1854. principal,treasury, 4 Lloyd to Halifax,20 Mar. 1939, Halifaxto Lloyd, 21 Mar. 1939,Lloyd Papers25/5, 25/4; Leith Ross to P. Nichols, 23 Mar. 1939, FO 371/23752/R1905; Halifaxto Lloyd, 25 Mar. 1939, Lloyd Papers25/5.

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10 December 1938. He was certain that an economic ultimatum had been given, as Tilea claimed, two days after the German invasion of Bohemia and Moravia on 15 March; when the Romanian government denied it, Tilea turned to Lloyd who in turn emphasized to Halifax that the Romanian ambassador at Paris, Georges Tatarescu, was the source of the information, and that the French foreign minister, Georges Bonnet, had confirmed it. Lloyd added that the internal situation in Romania had prompted the denial, but that, if encouraged, Carol II would remain loyal to Britain.1 Although Lloyd believed that Romania was in the gravest danger from Germany, his intelligence contact in Berlin, Colvin, supplied information which suggested otherwise. Colvin's reports after January 1939 warned repeatedly of a German attack on Poland in March. On 23 March, Colvin asked Lloyd to arrange interviews for him with members of the government and, by the 29th, he had had interviews with Cadogan, Halifax, and Chamberlain at which his warnings confirmed disparate but similar reports from other sources.2 Lloyd himself may have been sceptical, for on the 31st he reminded Halifax of the importance of Romania, particularly as Germany had finally succeeded on the 23rd in imposing a broader economic agreement.3 Lloyd played an important role in the events leading to the guarantees to Romania and Greece on 13 April. While the British government were willing to guarantee Greece after the Italian invasion of Albania on 4 April, they had little enthusiasm for a unilateral guarantee to Romania: they preferred to encourage Romanian-Polish defence links, and to create a defensive axis in eastern Europe. The Romanians, however, had no wish to become the linchpin of an alliance system that would probably antagonize Germany and raise the question of Russian involvement, and preferred a unilateral guarantee accompanied by economic aid.4 The French, who were also convinced that war was imminent and wished to have the safeguard of an eastern front, were ready to offer a guarantee, if necessary alone.5 Lloyd, meanwhile, feared that Hitler and Mussolini would only be encouraged 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 European Crisis of March-April 1939: The Romanian Dimension ,
InternationalHistory Review, vii (1985), 390-421 , and Romania and the Great Powers, pp. 158-9. 5 C. A. MacDonald, 'Britain, France, and the April Crisis of 1939', European Studies Review, ii (1972).

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eastern Europe. When Tilea told Lloyd on 13 March that the British were reluctant to give a unilateral guarantee, Lloyd immediately tried to 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 his opinion that, if Daladier held firm, Britain would be forced to join France in giving the guarantee.1 As this is what happened, Lloyd believed that he could claim the credit for the Anglo-French guarantee announced later that day.2 What had been more decisive, however, was the British government's reluctance to appear to disagree with France. The beneficiary was Romania, who received a guarantee 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 on behalf of Romania rather than Great Britain. The limits of Lloyd's ability to influence government policy were shown by his subsequent attempts to promote a British guarantee to Yugoslavia. Such a proposal had already been put to Halifax by Churchill on 6 April.3 Arguing that Yugoslavia would now perceive herself to be politically isolated, Lloyd suggested to Halifax on 20 April that Britain should guarantee the country secretly, to allow Yugoslavia to continue to remain neutral. If the guarantee was refused, and if a German or Italian invasion followed, Britain should publish details of the offer; this, he argued, would spark a pro-British uprising. The southern department, however, was not convinced of this, and nothing was done.4 Lloyd's efforts in promoting economic help to the Balkans had no tangible results before the outbreak of war. Admittedly, Leith Ross was sent on an economic mission to Romania in late April and signed an agreement which offered 5,000,000 m credit guarantees and another purchase of 200,000 tons of wheat. In the event, it was difficult to complete the arrangements and Britain was not able to spare any weapons for purchase.5British attention was concentrated on Turkey, now identified as the crucial state in Balkan defence, and negotiations for a political and economic treaty were in progress.6
1 Lloyd to BlancheLloyd, 13 Apr. 1939, Lloyd Papers19/19. 2 Charmley,Lord Lloyd,pp. 224-5. 3 Roberts, 'HolyFox', p. 150. 4 Memo, Halifax,20 Apr.;minute, P. Muires,24 Apr. 1939, FO 371/23883/R2915. (Cambridge,1989),pp. 75-89.

5 Kaiser, EconomicDiplomacy, p. 304. 6 Selim Derengil, Turkish Foreign Policy during the Second World War: An 'Active' Neutrality

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After the events of March and April, Lloyd, perhaps believing that these actions heralded a new start for British policy in eastern Europe, returned to combatting Axis propaganda, which had intensified in venom after the offer of the guarantees.1 The Council was still attempting to come to terms with this onslaught when the German armies invaded Poland and the British government declared war on 3 September. With the outbreak of war in eastern Europe, the Balkans became one of the most important areas for Allied political and strategic planning. The Allies had always implicitly recognized that they could do little to save Poland, and most senior political figures, led by Chamberlain, who believed that Hitler would try to seize control of Romania's wheat and oil reserves, expected Germany to follow up the conquest of Poland by invading Romania.2 Churchill, now back at the admiralty, agreed with Lloyd that a Balkan bloc should be organized, including Bulgaria (whose territorial claims would have to be dealt with), to resist Nazi pressure and to form a defensive line against a German advance towards the Black Sea.3 By October, however, Chamberlain began to doubt whether Germany would soon attack Romania or the other Balkan states;4and, while the Italians were nonbelligerent, had no desire to fight in the Mediterranean merely to defend the Balkans or to bring Turkey into the war.5 Neither, it might be added, did the Balkan states wish to fight the Axis powers on behalf of the Allies. Tilea, however, repeatedly asked the British government for help, often on his own initiative. On 14 September, he asked Halifax for British military, economic, and diplomatic aid in creating a Balkan bloc.6 His pleas became more insistent after the invasion of Poland by Russia on 17 September. On the 27th, he asked Cadogan 'whether it would not be a good plan to send someone out to Bucharest, and he quoted as an example Lord Lloyd, who had the ear of the King and might be able to give good advice on the subject of Balkan
1 Memo, KennethJohnstone,22 May 1939, FO 395/642/P2099. 2 N. Chamberlainto Hilda Chamberlain, 17 Nov. 1939 [ChamberlainPapers, University of , NC 18/ 1/ 112 1. BirminghamLibrary] 3 W. S. Churchillto N. Chamberlain,11 Sept. 1939, NC 7/9/49. 4 N. Chamberlain 8 Oct. 1939, NC 18/1/1124. to Ivy Chamberlain, 5 See Lynn H. Curtright, 'Great Britain, the Balkans, and Turkey in the Autumn of 1939', 6 Halifax to Sir Reginald Hoare [ambassador at Bucharest], 14 Sept. 1939, FO 371/23852/ R7512.
InternationalHistory Review, x, (1988), 433-55.

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LordLloyd and the Balkans

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reconciliation and consolidation',1a scheme which may have been devised with Lloyd, who wrote to Halifaxon the same day askingto see him to discussthe Balkan situation, 'the urgency of which at the Lloyd had already presentmoment obviously cannot be exaggerated'.2 offered his services for special missions to countries where he was known, such as Turkey, and Cadogan had felt certain that Halifax would take up the offer.3 Tilea also asked unofficially whether the guaranteeto Romania could be interpretedas covering a Russianas well as a Germanattack, promptingdiscussionin the cabinet on the 29th about how to answer such a request. The prevailing view was that neither the Polish nor covered Russiaas a 'non-European' Romanianguarantees power.4 The same day, Tilea again asked Halifax to send Lloyd to Romania. Owing to Carol II's respect for Lloyd, he argued, his visit would encouragethe king to standfirm. Sargentthought that the visit could do no harm,though he preferred to ask Sir Reginald Hoare, the ambassador at Bucharest,whether he agreed,as 'one can never be sure of M. Tilea'.5 Nor would Lloyd undercut the efforts of the British ambassador at Rome, Sir Percy Loraine, to keep Italy a nonbelligerent;in fact, he 'might encourage the King to work for some close form of collaboration between the states of south-eastern Europe, includingHungary'.6 Meanwhile, the British missions were being consulted about the utility of a tour by Lloyd of all of the Balkanstates.Not everyone was in favour; Hoare, for example, who feared that in response the Germansmight send someone 'equally dynamic', argued that Lloyd should make a privatevisit.7Despite such misgivings,Sargentfelt that the visit would be worthwhile. He told Hoare that Lloyd would merely encourage Carol II by giving him a first-hand account of Britain'sdeterminationto win the war, and bring back his personal impressions.8 Although the Britishenvoys in Yugoslaviaand Hungarywere just as sceptical and just as worried about unpleasantrepercussionsfrom Germany,the ministerat Sofia, George Rendel, suggestedthat Lloyd's
1 Memo, Cadogan,27 Sept. 1939, FO 371/23754/R8127. 2 Lloyd to Halifax,27 Sept. 1939, Lloyd Papers19/12. 3 Lloyd to Cadogan, 13 Sept., Cadoganto 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; William Strang,asst. under-sec, of state, to Hoare, 27 Oct. 1939, FO 800/R0/39/6.

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visit would help to end Bulgaria's diplomatic isolation.1 The minister at Athens, Sir Michael Palairet, was equally enthusiastic. A strong personality might give the necessary impetus to the formation of a Balkan bloc; indeed, this could be 'the psychological moment in which to arouse these countries to a sense of their common danger and the possibility of common protection'.2 By the time the plans for Lloyd's tour were finalized on 19 October, it had become part of a new attempt to create a Balkan bloc. With the breakdown of the Russo-Turkish negotiations in midOctober 1939, and the signing on the 19th of the Anglo-Turkish treaty - which included a statement of Turkish obligations to Greece and Romania - Halifax wished to find out whether Turkey would be willing to join the Balkan bloc being proposed by Gafencu;3 a loose association of states who would suspend their territorial claims for the duration of the war, and remain benevolently neutral should any of them be attacked.4 Halifax, like Gafencu, also hoped that Mussolini would support such a neutral bloc, which would give Britain an opportunity to pry Italy away from Germany. This policy was approved by the cabinet on 20 October.5 Lloyd's task as an unofficial ambassador was to promote Balkan unity at what was initially perceived by the foreign office to be an auspicious moment. He had already been on a similar mission to Spain, ostensibly on Council business, where he discussed the international situation with Franco.6 It was hoped that in the Balkans he could give advice without awakening the suspicions of the Axis powers, as the first step towards drawing Italy into a neutral bloc loosely associated with the Allies.7 The plan to approach Italy was postponed, however. After Loraine warned Halifax that it would destabilize the Balkans, the
1 Sir R. H. Campbell[Britishambassador at Belgrade]to FO, n Oct., Owen St ClairO'Malley at Budapest]to FO, 15 Oct., Rendel to FO, 10 Oct. 1939, FO 371/23759/ [Britishambassador R8672. 2 Palairetto FO, 13 Oct. 1939, FO 371/23755/R8934. 3 Halifaxto Sir Hughe Knatchbull-Hugesson at Ankara],18 Oct. 1939, FO [Britishambassador 371/23759/R9046; Derengil, Turkish Policy, pp. 88-9. Foreign 5 Cabinetminutes, 20 Oct. 1939, 61(39)9,CAB 65/1. 6 During this visit, Lloyd had, without any authorization,attemptedto interestthe Spanishin a mediatingrole in the Balkans,an attemptwhich the foreign office only became awareof on 10 Nov. throughPrince Paul:T. Shone [charged'affaires, Belgrade]to Cadogan,10 Nov. 1939, FO 371/23756/R10517. 7 Memo, P. Nichols, 23 Oct. 1939, FO 371/23755/R9084. Lloyd was also persona gratawith Mussoliniand had been suggestedas a suitablefigure for opening contactsbetween Chamberlain and Mussoliniin late 1937;Atherton,'LordLloyd',pp. 39-42.
4 Lungu, Romania betweenthe Great Powers, pp. 202-5.

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cabinet decided on the 28 th to wait until Loraine could return to London to explain why.1 On 3 November, a meeting was held at the foreign office, chaired by Halifax and attended by Loraine, Vansittart, Philip Nichols of the southern department, the parliamentary undersecretary, R. A. Butler, and, at the request of Halifax, Lloyd, despite the objections of Cadogan and Nichols to the presence of an outsider. The meeting agreed that, although Gafencu should be encouraged to try to create a neutral bloc, Britain should not be openly involved.2 On the following day, the cabinet decided that the Balkan states should be left to make their own political arrangements.3 Two other developments deflected Britain from open intervention: France was not eager to see Italian influence in the Balkans extended, and Halifax had been told that the Italians had told the Yugoslavs that they were opposed to the scheme for a neutral bloc.4 By 11 November, the southern department considered the Romanian scheme dead, partly because the Anglo-French treaty with Turkey, which attempted to link the implementation of the guarantees to the Balkan states to Turkey and the putative bloc, increased the dangers of German intervention.5 As the British were still interested in promoting a scheme which could be linked to the agreement with Turkey, and which might ensure stability in the Balkans, they had to decide 'whether there are no other means open to us to promote conciliation in the Balkans which means reconciliation between Bulgaria and her neighbours'.6 Lloyd's mission was one. Lloyd was sent to Romania, Bulgaria, and Yugoslavia during a hiatus in British diplomacy in the region. Although the Romanian neutral bloc was no longer an option, Balkan co-operation was still desirable and Romania the key to any agreement on territorial restitution likely to satisfy Bulgarian revisionism. As the British could not openly intervene, given their wish to encourage Italy to remain neutral, they needed a way to act unofficially. With his technically independent position at the British Council, his linguistic abilities, and his contacts in eastern Europe, Lloyd seemed ideal for this task. As Lloyd's briefing notes from the foreign office make clear, the
1 Lorainebelieved that Britishinterventionwould only push Italycloser to Germany:Loraineto FO, 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,19401945,ed. John Harvey (London, 1978),p. 327. 3 Cabinetminutes,4 Nov. 1939, 70(39)7, CAB 65/2. 4 Campbellto Halifax,2 Nov. 1939, FO 371/23756/R9689; T. Shone to FO, 3 Nov. 1939, FO 371/23756/R9804. 6 Memo, Nichols, n Nov. 1939, FO 371/23756/R9804.
5 Lungu, Romania betweenthe Great Powers, p. 206.

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affairs of the British Council were a convenient excuse for a political mission to Bucharest, Sofia, and Belgrade. While Lloyd was to stress in all three capitals that Britain was determined to win the war, and had the economic strength to do so, he was to tell Carol II privately that the British guarantee to Romania would not cover an attack by the Soviet Union. Such a message avoided an open declaration, likely to encourage the Soviets to seize Bessarabia. As Carol II had not seen Hoare for some time, Lloyd was also to learn all he could about the current policy of the Romanian government. In Bulgaria, he was to warn Boris III of the danger of allowing Bulgarian revisionism full rein. Above all, he was to give no promise of British involvement in organizing a neutral bloc.1 Lloyd's tour began in Bucharest on 14 November. Gafencu, who revealed to Lloyd the hitherto unknown details of a Romanian offer to Bulgaria to join the Balkan neutral bloc, was eager to devise some 'machinery for common action',2 and hinted that British help would be welcome. Such help, however, was what Lloyd had been expressly forbidden to offer. Carol II apparently learned with equanimity of the limits to the British guarantee and of Britain's rearmament and her determination 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 the British war effort and to gauge reactions to Gafencu's scheme. Lloyd's main difficulty, as he had expected, was his inability to offer any proof of Britain's new industrial and military effort, or to offer the two states any inducement for their adherence to a pro-Allied policy. With the re-emergence of Russian expansionism, the Balkan monarchs were only interested in cash and weapons, and Germany had already proved more willing to supply equipment than Great Britain. As a source of intelligence, Lloyd's tour was a success, especially in Romania. The foreign office considered that he had provided 'useful information and impressions'. The news of the attempt to bring - Hoare had not Bulgaria into the Balkan bloc had been unexpected been told of it for fear that the Allies would apply pressure - but Sargent did not expect anything to come of it. He thought that Lloyd had steadied the Romanian government partly by stating his own opinion that Turkey would come to Romania's aid if attacked.3Lloyd
1 Notes for LordLloyd, 7 Nov. 1939, BW 82/13 and FO 371/23759/R10000. 2 Lloyds Balkan Diary, 17 Nov. 1939, Lloyd Papers20/4. Selected parts ot this diary were and sent throughdiplomaticchannelsto London. into telegrams incorporated 3 Memo, Sargent,28 Nov., FO 371/23759/R11227 and 29 Nov. 1939, FO 371/23759/R11145.

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LordLloyd and the Balkans

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had also done valuablework for the British Council. But he had not been able to offer money or arms, nor had he been able to improve relationsbetween Bulgariaand her neighbours.He had remindedthe three Balkanstatesthat they were still of interestto the Allies, but in the absence of concrete aid, the Allied cause was of diminishing interestto them. Lloyd returned to Britain in December dissatisfiedwith Allied policy in the Balkans.He acknowledgedthe importanceof projecting an image of Britishstrength,and wrote to Halifaxthat he believed he 'did succeed in makingall those I met and they were legion appreciate the immensityof our war effort and that I am sure was worth doing'. But Lloyd had come to the conclusion that more decisive action was needed: 'whether they like it or not, HMG will shortlyhave to create an easternfront and [he was certain] that the war will move in that directionbefore very long.'1 Such opinions were being echoed in the SupremeWar Council. While the French were eager to send a force to Salonika as a preemptive measure after the Soviet invasion of Finland on 30 November, the British feared to offend Italy and were wary of entanglementin a conflict with Russia. Moreover, they did not want to divert resourcesto the buildupand maintenanceof such a force, or to divert troops from Egypt, while Italy'sintentions were unknown. They were unaffectedby the argumentsexpressedat a meeting on 11 December at GeneralMauriceGamelin'sheadquarters between British and French militaryrepresentatives, at which the French pressedfor the landing of an Allied expeditionary force at Salonika to link up with a projected 111 Balkan divisions. The British, understandably, doubted whether such an imposingsupranational armywas more than a pipe dream.2During a cabinet meeting on the 14th, Chamberlain reiterated the British policy: no approach could be made to the Balkansstatesunlessthe Italians were certainto remainneutral.3 During his Balkan tour, Lloyd had met the commander-in-chief in the Middle East,GeneralMaxime Weygand,the main advocateof a Salonikafront, and a thorn in the side of the foreign office. Lloyd now added his voice in support. On 21 December, he tried to persuade Halifaxto adopt Weygand'splan, and sent messagesto other friendsat the foreign office through Robert Bruce Lockhart, who reported: 'Lloydsaysthat the only argumentin the Balkansis strength.If we do
1 Lloyd to Halifax, 11 Dec, Lloyd to 2nd EarlBeatty,27 Dec. 1939,Lloyd Papers 19/14. 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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nothing we shall lose everything. If we are vigorous we have the support of the Balkans. Therefore, without too much consideration of Italy we must go ahead with the formation of our Near East force.'1 Lloyd told Halifax to send money and weapons to Yugoslavia, one of the key states, along with Turkey, to aid the creation of a bloc designed to restrain both Russia and Germany. He criticized Loraine for being too cautious: Italy should be told of the projected Allied action in Salonika, which should proceed regardless. But Italy should also be asked to supply weapons to the Balkan bloc, regardless of French susceptibilities.2 These schemes presupposed that the Balkan states, including Turkey, would be willing to fight on behalf of the Allies. They were not willing, however, unless this coincided with their separate interests, which clearly did not extend to fighting Italy, Germany, or the Soviet Union.3 As one of the main obstacles to the buildup of a Near Eastern force was the 'Loraine policy', Lloyd wrote to Loraine early in 1940, stressing the importance of trying to take advantage of Italian resentment of Russian involvement in the Balkans, and of firmness as the only quality likely to impress Mussolini. If the Allies held a Balkan front, 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 effectively determining British policy; 'a decision will have to be come to very shortly, I feel sure, as to an eastern front or no, and your advice may very 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 the rights of small states and, in effect, put Great Britain on the same moral level as Germany. As Italy sought stability in the Balkans, there was no point in taking action likely to cause trouble at a time when the British seemed unlikely to have to fulfil their guarantees to Greece and Romania.4 The period from December 1939 to January 1940 proved to be the high point of the strategy of a Balkan front. Despite what seemed to be favourable circumstances, including the possibility that Mussolini might be willing to discuss the Balkans, the Allies held back: the plan, which was always seen as a defensive, rather than an offensive,
1 R. B. Lockhart to Sargent,21 Dec. 1939, FO 371/23758/R11910. 2 Memo, Halifax,21 Dec. 1939, FO 371/23758/R1 1940.
3 Derengil, Turkish ForeignPolicy, p. 75.

4 Lloyd to Loraine,1 Jan., Loraineto Lloyd, 12Jan. 1940, Lloyd Papers19/16.

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operation, was jeopardized by lack of weapons, manpower, and overstretched lines of communication, and by the unpredictability of Italy. Moreover, it was being overtaken by a plan to cut German iron-ore supplies from Scandinavia. The scare in January 1940 of an imminent attack by Germany through the Low Countries shifted attention back on the western front. On 27 March, in a memorandum to the cabinet, Halifax stated that conditions in the Balkans had not greatly changed; Britain could offer no remedy should Russia, Germany, and Italy intervene simultaneously in south-eastern Europe. Britain should aim to promote Balkan unity and to keep Italy neutral.1 But even if Britain could not defend the Balkans from Germany or Russia, German influence could still be countered by propaganda, as 'there was probably some "slack" in the political situation that could be taken up before reaching the brink of war. He proposed, therefore, to give instructions that our missions in this part of Europe should "show the flag" as much as possible and should be vigorous in their attempts to counteract the effects of German propaganda.'2 The policy, which relied heavily on the British Council to play the role first assigned to it in 1936, was unlikely to counteract, for example, German demands on Romania for oil supplies, or the fear of Russia aroused by the events in Finland. Although Lloyd's work since the outbreak of war had been primarily political, he had supervised the distribution throughout the Balkans of The British Case, his defence of the British decision to go to war, and pressed for a larger grant from the treasury for Council work in the region. After failing to persuade Loraine or Halifax to defend the Balkans in earnest, Lloyd took up instead the scheme for a British institute at Bucharest, for which Carol II had offered a site during his visit the previous year.3 By March 1940, the institute became one manifestation 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's understandable reluctance to finance building schemes in foreign countries in wartime. Lloyd's main champion in the ensuing battle, as usual, was Halifax, much to the disgust of the under-secretary at the treasury, Sir Alan Barlow, who commented that 'the FO, of course, merely rubber stamp every proposal he puts up.'4 With a persistent
1 Memo, southerndept., 26 Mar. 1940, FO 371/24887/R3856. 2 Cabinetminutes, 27 Mar. 1940, 76 (40)6, CAB 65/6. 3 Lloyd to 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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faith in the value of economic and culturalgestures,Halifax told the chancellor of the exchequer, Sir John Simon, on 14 March that the Allied cause would be damagedif the building did not go ahead. As in the the institutewould rivalGermanand Italianculturalenterprises area,he was 'surethat on politicalgroundsit would be most unwise to give ground', or to give the impression of rebuffing the Romanian offer.1There the matter rested until the renunciation of the British guaranteein July and the occupation of Romania by Germantroops in November 1940. with which British The episode illustrates not only the seriousness also their belief that cultural but gestures, policy-makers regarded sending ballet companies, lecturers, and theatre companies to tour south-easternEurope might induce the Balkan states to ignore the immediate danger from Russia or Germany, throw in their lot with the Allies, and open themselves to invasion. Such gesturesmight be useful adjunctsto diplomacy in peacetime, but the government, and particularly Halifax, did not recognize their incongruity in the increasingly desperate Balkan situation of early 1940. The government's attitude, combined with Lloyd's amateur espionage, renders Olivia Manning's account in The Balkan Trilogyof productions of Shakespeare'splays at Bucharest entirely credible.2But diplomatic initiatives were not entirely prohibited. Halifax considered sending Lloyd on anothermission to Bulgaria,Romania, and Yugoslaviaearly in 1940, though there is no indicationin the recordsof its scope.3He attended meetings at the foreign office during April of officialsfrom Britain's missions in the Balkans solely to represent the Council.4 Nevertheless, he was being given privileged access to the foreign office despite not being a diplomat,a member of the government, or of Chamberlain. an uncriticalsupporter With the failure of the campaignin Scandinavia,Francemade a last attemptto resurrectthe Balkanfront. Shortlybefore the German attackon Belgium and Holland on 10 May, the British cabinet considereda paperwhich linked Britain'simperialposition in the Middle East to the south-easternapproaches,on which Halifax commented that the region had become more strategicallyimportant than ever: possessionof the Straitsand even Constantinopleby an enemy would endanger Britain's position throughout the Middle East.5 Lloyd,
1 Minute, Barlow, 5 Mar., Halifaxto SirJohn Simon, 14 Mar. 1940, T 161/ 1029/ 53558 1/03/3 9. 2 Olivia Manning, TheBalkanTrilogy (London, 1960-5). 3 Lloyd to Palairet,15 Jan. 1940, Lloyd Papers19/16. 4 Sargentto 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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however, had recognizedthis yearsbefore. He had put a greatdeal of effort at the British Council into reminding the government of the importance of the eastern approaches,though he had failed to persuade them to provide the economic and military backing for an eastern front. With his appointment on 13 May 1940 as colonial secretaryin the Churchillgovernment,and the opening of the war in the west, Lloyd'sactivitiesin south-easternEurope ended and, as the Balkan states slowly gave in to Nazi and Soviet pressure, so did Council work in the region. From its creation in 1934, the British Council had been pointed by the foreignoffice towardseasternEurope;in this sense, Lloyd'sactivities as its chairmanfitted within an established framework.But Lloyd's interventionsin easternEuropeanpolitics during the late 1930s were intended to promote British political and economic interests in the region. Though he did not succeed, he gained, with the help of his old friend Halifax,privilegedaccess to policy planning. Gradually, he found a sympathetically in Orme Sargent,a noted 'anti-appeaser' at the foreign office, who supported him as a candidate for special missions. Lloyd was especiallyvaluableduring the early stages of the war, when his presidency of the Council effectively camouflaged his diplomatic contacts with leaders of neutral states who, by late 1939, feared to deal openly with the accreditedBritish representatives. His position was an ambivalentone: neither a diplomat nor a politician, but a peer with a semi-official position and influential political contacts.It was also increasingly but despitehis oppositionto irregular, the Munich agreementand, afterSeptember1938, to furtherappeasement of Germany,Chamberlain never sought his removal. In fact, his work in the Balkans may have helped him towards the colonial As the natureof Nazi policy became clear in 1938 and secretaryship. 1939, Lloyd undoubtedly found himself in a strong position, as did Churchilland the other anti-appeasers; it would have been very difficult for Chamberlainto remove Lloyd from the Council when his own party was demanding the inclusion of anti-appeasersin the government. Although Lloyd undoubtedlyraisedthe profile of the Council and was useful to the foreign office, he was dissatisfied with his achievements: he had not managedto convince the government of the need to prop up the Balkanstatesand, afterthe outbreakof war, to createa Balkanfront. He could not consistentlyinfluence:he could only state opinions that might or might not fit in with currentpoliticalthinking.

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Oddly enough, his closest political contact was Halifax, a staunch appeaser but also the cabinet minister most interested in the idea of economic diplomacy in eastern Europe. But even Halifax did not accept Lloyd's arguments uncritically. Although Lloyd's criticism of appeasement and his intelligencegathering may have been one of the many influences leading to the change, in late 1938, in the British government's attitude towards Hitler, his most important contribution was to act as a conduit for information and communication between European statesmen. Lloyd tried to increase British involvement in a region in which German economic and political influence was expanding; the result was an unequal propaganda competition between Germany and Britain, one that Britain had no intention of trying to win at any cost and which increased the malign effect of the guarantees in giving the Balkan leaders false hope. The Council received regular appeals from terrified eastern European rulers who hoped that its presence was the first sign of help to come. It was not, and Lloyd's work only emphasized the inadequacy of using culture as diplomacy as a symbol of power in a remote region. He was fated never to persuade the British government of the need to create an economic and military bloc in south-eastern Eurooe as an imperative of Middle Eastern defence. PublicRecordOffice, London

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