Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-03T00:23:57.818Z Has data issue: false hasContentIssue false
  • English
  • Français

FINANCIAL SPECULATION, POLITICAL RISKS, AND LEGAL COMPLICATIONS: BRITISH COMMERCIAL DIPLOMACY IN THE BALKANS, c. 1906–1914*

Published online by Cambridge University Press:  10 February 2012

MIKA SUONPÄÄ
Get access Rights & Permissions [Opens in a new window]

Abstract

Before 1914, a more intimate relationship started to develop between overseas commercial activity and foreign policy. This occurred as a consequence of the politicization of international business relations that came about when other great powers began increasingly to challenge Britain's global commercial, political, and imperial supremacy. Britain had traditionally followed a laissez-faire line when it came to supporting or protecting British overseas business enterprise. In the mid-1880s, Britain was compelled to review its policy. After this, the British government was prepared to offer limited assistance to British firms, but this often took place only in regions which were significant in terms of overall policy interest, including Turkey, Iran, and China. This article examines British commercial diplomacy in the Balkans, a region which has not received much attention from historians in this framework. British commercial diplomacy there followed the general line of limited intervention and support was offered mostly on legal grounds. Local political troubles and great power politics also played a role in diplomatic decision-making as did negative cultural perceptions, but to a considerably lesser degree. In most cases, the British government refrained from supporting British business enterprise in the Balkans on account of fears about financial speculation.

Type
Articles
Information
The Historical Journal , Volume 55 , Issue 1 , March 2012 , pp. 97 - 117
Copyright
Copyright © Cambridge University Press 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

The author would like to thank the anonymous referees and Professor Robin Pearson for their valuable comments and suggestions.

References

1 Platt, D. C. M., ‘The role of the British consular service in overseas trade’, Economic History Review, 15 (1963), pp. 494–512Google Scholar; McLean, D., ‘Commerce, finance, and British diplomatic support in China, 1885–86’, Economic History Review, 26 (1973), pp. 464–76Google Scholar; Kent, M., ‘Agent of empire? The National Bank of Turkey and British foreign policy’, Historical Journal, 28 (1975), pp. 367–89CrossRefGoogle Scholar; McLean, D., ‘Finance and “informal empire” before the First Wold War’, Economic History Review, 29 (1976), pp. 291–305CrossRefGoogle Scholar; McLean, D., ‘British finance and foreign policy in Turkey: the Smyrna–Aidin railway settlement, 1913–14’, Historical Journal, 19 (1976), pp. 521–30CrossRefGoogle Scholar; McLean, D., ‘A professor extraordinary: E. G. Browne and his Persian campaign, 1908–1913, Historical Journal, 21 (1978), pp. 399–408CrossRefGoogle Scholar; McLean, D., Britain and her buffer state: the collapse of the Persian empire (London, 1979)Google Scholar; Jones, G., ‘The Imperial Bank of Iran and Iranian economic development’, Business and Economic History, 16 (1987), pp. 69–80Google Scholar; Cain, P. and Hopkins, A., British Imperialism, 1688–2000 (2nd edn, London, 2002), pp. 340–96Google Scholar; Phimister, I., ‘Foreign devils, finance and informal empire: Britain and China c. 1900–1912’, Modern Asia Studies, 40 (2006), pp. 737–59CrossRefGoogle Scholar.

2 McLean, ‘Commerce’, p. 468.

3 Ibid., pp. 473–6; McLean, ‘Finance’, p. 304.

4 See n. 1.

5 See Cooper, M., ‘British policy in the Balkans, 1908–1909’, Historical Journal, 7 (1964), pp. 258–79CrossRefGoogle Scholar; Robbins, K., ‘British diplomacy and Bulgaria, 1914–1915’, Slavonic and East European Review, 49 (1971), pp. 560–85Google Scholar; R. Crampton, ‘The Balkans, 1909–1914’, in F. Hinsley, ed., British foreign policy under Sir Edward Grey (Cambridge, 1977), pp. 256–70; Heller, J., British policy towards the Ottoman Empire, 1908–1914 (London, 1983), pp. 72–90Google Scholar. See n. 1 for research on commercial diplomacy.

6 See Shannon, R., Gladstone and the Bulgarian agitation, 1876 (Edinburgh, 1963)Google Scholar; Anderson, M., The Eastern Question, 1774–1923: a study in international relations (London, 1966)CrossRefGoogle Scholar; Anderson, M., The great powers and the Near East, 1774–1923 (London, 1970)Google Scholar; Jelavich, B., The Ottoman Empire, the great powers and the Straits question, 1870–1887 (Bloomington, IN, 1973)Google Scholar; Millman, R., Britain and the Eastern Question, 1875–1878 (Oxford, 1979)Google Scholar.

7 Berend, I. and Ranki, G., Economic development in East-Central Europe in the nineteenth and twentieth centuries (New York, NY, and London, 1974), p. 75Google Scholar; Lampe, J. and Jackson, M., Balkan economic history, 1550–1950: from imperial borderlands to developing nations (Bloomington, IN, 1982), pp. 208–9Google Scholar.

8 May, A., ‘Trans-Balkan railway schemes’, Journal of Modern History, 24 (1952), pp. 352–66CrossRefGoogle Scholar.

9 See Mazower, M., The Balkans: from the end of Byzantium to the present day (London, 2000), p. 4Google Scholar; Mombauer, A., Helmut von Moltke and the origins of the First World War (Cambridge, 2001), pp. 110–13Google Scholar; Karpat, K. H., Studies on Ottoman social and political history: selected articles and essays (Amsterdam, 2002), p. 74Google Scholar; Hanioglu, S., A brief history of the late Ottoman Empire (Princeton, NJ, 2008), pp. 148–9Google Scholar; Shaw, E. K., History of the Ottoman Empire and modern Turkey (Cambridge, 1977), pp. 266–7CrossRefGoogle Scholar.

10 Kostecki, M. and Naray, O., ‘Commercial diplomacy and international business’, Discussion Papers in Diplomacy (2007), pp. 8–11Google Scholar. See also Platt, ‘British consular service’, pp. 494, 503–4, 506, 509.

11 See L. Berov, ‘Foreign capital in the Bulgarian banking system, 1878–1944–1997’, pp. 15–16, and A. Mitrovic, ‘Foreign banks in Serbia, 1882–1914’, pp. 5, 76–7 in K. Kostis, ed., Modern banking in the Balkans and west-European capital in the nineteenth and twentieth centuries (Aldershot, 1999); Autheman, A., La Banque Imperiale Ottomane (Paris, 1996), pp. 274–5CrossRefGoogle Scholar; C. Clay, ‘The Imperial Ottoman Bank in the later nineteenth century: a multinational “national” bank’, in G. Jones, ed., Banks as multinationals (London, 1990), p. 150–5; Cairncross, A. K., Home and foreign investment, 1870–1913: studies in capital accumulation (Cambridge, 1953), pp. 84–92Google Scholar, 182–4; Cottrell, P., British overseas investment in the nineteenth century (London and Basingstoke, 1975)CrossRefGoogle Scholar; Lampe and Jackson, Balkan economic history, pp. 207–8, 210–11, 226; R. Avramov, ‘The Bulgarian National Bank in a historical perspective: shaping an institution, searching for a monetary standard’, in R. Avramov and S. Pamuk, eds., Monetary and fiscal policies in south-east Europe: historical and comparative perspective (Sofia, 2006), pp. 93, 98–9; M. Sojic and L. Durdevic, ‘Dinar exchange rate in the kingdom of Serbia, 1882–1914’, in The experience of exchange rate regimes in Southeastern Europe in a historical and comparative perspective (Vienna, 2008), p. 304.

12 See P. Colquhoun, ‘On Bosnia’, 1856, The National Archives, Kew (TNA) Foreign Office (FO) 78/1204; Arbuthnot, G., Herzegovina, or, Omer Pacha and the Christian rebels: with brief description of Servia, its social, political, and financial condition (London, 1862), p. 223Google Scholar; Times, 25 June 1881; Pall Mall Gazette, 29 Mar. 1884; C. Hardinge, ‘Remarks on British trade and commerce with Bulgaria’ (1888), TNA FO 78/4139; Economist, 5 Oct. 1912; Times, 30 July 1913.

13 See G. Buchanan to E. Grey, 19 Apr. 1906, Sofia, TNA FO 368/11; Buchanan to Grey, 8 May 1906, Sofia, TNA FO 368/11; W. O'Reilly to E. Grey, 30 Sept. 1913, Sofia, TNA FO 368/800; ‘S. Mayer's note’ enclosed to H. Bax-Ironside to Board of Trade, 21 June 1913, Sofia, TNA FO, 368/800.

14 M. Wilkins, ‘Banks over borders: some evidence from their pre-1914 history’, Jones, ed., Banks as multinationals, p. 224, and G. Jones, ‘Competitive advantages in British multinational banking since 1890’, in ibid., p. 33.

15 J. Whitehead to E. Grey, 12 Dec. 1906, Belgrade, TNA FO 368/47.

16 G. Buchanan to E. Grey, 19 Apr. 1906, Sofia, TNA FO 368/11; M. de C. Findlay to E. Grey, 21 Apr. 1910, Sofia, TNA FO 368/394; W. O'Reilly to E. Grey, 30 Sept. 1913, Sofia, TNA FO 368/800; H. Bax-Ironside to E. Grey, 8 May 1913, Sofia, TNA FO 368/800; ‘Report for the year 1904 on the trade of Servia’ (1906), TNA FO 368/11.

17 Mitrovic, ‘Foreign banks in Serbia’, pp. 76–90; Adrian E. Tschoegl and K. Koford, ‘Foreign banks in Bulgaria, 1875–2002’, in E. Klein, ed., Capital formation, governance and banking (New York, NY, 2005) pp. 6–7; Flaningam, M., ‘German economic controls in Bulgaria, 1894–1914’, American Slavic and East European Review, 20 (1961), 99–108CrossRefGoogle Scholar; Mitchell, B., International historical statistics: Europe, 1750–1993 (London, 1998), pp. 594–5Google Scholar, 648; Howe, A., Free trade and liberal England, 1846–1946 (Oxford, 1997), p. 298Google Scholar. See also Economist, 23 May 1914.

18 G. Buchanan to E. Grey, 19 Apr. 1906, Sofia, TNA FO 368/11; G. Buchanan to E. Grey, 8 May 1906, Sofia, TNA FO 368/11; G. Buchanan to E. Grey, 28 Sept. 1906, Sofia, TNA FO 368/11; A. Fox to L. du P. Mallet, 11 May 1906, London, TNA FO 368/11.

19 ‘S. Mayer's note’, in H. Bax-Ironside to Board of Trade, 21 June 1913, Sofia, TNA FO 368/800.

20 W. O'Reilly to E. Grey, 30 Sept. 1913, Sofia; W. O'Reilly to E. Grey, 12 Oct. 1913, Sofia, TNA FO 368/800.

21 J. Whitehead to E. Grey, 12 Dec. 1906, Belgrade, TNA FO 368/47.

22 McLean, ‘Finance’, pp. 294–7, 298–300, 301–3.

23 Cain and Hopkins, British imperialism, pp. 347–8.

24 Robb, R., White-collar crime in modern England: financial fraud and business morality, 1845–1929 (Cambridge, 2002), pp. 94–7Google Scholar, 112; B. Porter, ‘Edwardians and their empire’, in D. Read, ed., Edwardian England (London, 1982), p. 131; Searle, G., Morality and the market in Victorian Britain (Oxford, 1998), pp. 81–2CrossRefGoogle Scholar; McQueen, R., A social history of company law: Great Britain and the Australian colonies, 1854–1920 (London, 2009), pp. 230–3Google Scholar.

25 See Crampton, R., A short history of modern Bulgaria (Cambridge, 1987), pp. 50–7Google Scholar.

26 McLean ‘Finance’, p. 305.

27 See, Ferguson, N., The house of Rothschild: the world's banker, 1849–1998 (Harmondsworth, 2000), pp. 306Google Scholar, 405, 408; New York Times, 21 July 1910.

28 M. de C. Findlay, ‘Bulgaria annual report for 1909’, 22 Feb. 1910, TNA FO 421/259.

29 May, ‘Trans-Balkan’, pp. 352–66.

30 S. Mayer, ‘Report on the prospects for establishment of a British bank in Bulgaria’, May 1913, TNA FO 368/800; W. Heard, ‘Memorandum’, June 1913, TNA FO 368/800. See also, Crampton, ‘Balkans’, p. 256.

31 F. Lindley to E. Grey, 31 Jan. 1911, Sofia, TNA FO 368/518; H. Bax-Ironside to E. Grey, 10 Apr. 1911, Sofia, TNA FO 368/518; F. Lindley to E. Grey, 31 Jan 1911, Sofia, TNA FO 368/518; H. Bax-Ironside to E. Grey, 10 Apr. 1911, Sofia, TNA FO 368/518; Woodthorpe, Browne & Co. to E. Grey, 5 Aug. 1911, London, TNA FO 368/518; H. Bax-Ironside to E. Grey, 7 June 1911, Sofia, TNA FO 368/518; Woodthorpe, Browne & Co. to under-secretary of state for foreign affairs, 30 May 1912, London, TNA FO 368/659. For Loewy's actions, see Mercury, 30 Nov. 1891; New York Times, 28 Dec. 1893.

32 F. Lindley to E. Grey, 31 Jan. 1911, Sofia, TNA FO 368/518; H. Bax-Ironside to E. Grey, 10 Apr. 1911, Sofia, TNA FO 368/518; H. Bax-Ironside to E. Grey, 19 May 1911, Sofia, TNA FO 368/518; G. Stanley to under secretary of state for foreign affairs, 13 June 1911, London, TNA FO 368/518; C. Barclay to E. Grey, 5 Oct. 1912, Sofia, TNA FO 368/659; E. Grey to H. Bax-Ironside, 18 Oct. 1912, London, TNA FO 368/659; H. Bax-Ironside to E. Grey, Sofia, 30 Oct. 1912 TNA FO 368/659.

33 New York Times, 22 Feb. 1913; London Gazette, 22 Oct. 1915; R. Paget to E. Grey, 12 July 1911, Belgrade, TNA FO 368/580.

34 Robb, White-collar crime, p. 112.

35 Ibid., pp. 94–7, 112; Johnson, P., Making the market: Victorian origins of corporate capitalism (Cambridge, 2010), pp. 137–66CrossRefGoogle Scholar.

36 See Board of Trade (BT 31) lists of dissolved companies. Thompson, A. S., ‘Informal empire? An exploration in the history of Anglo-Argentine relations, 1810–1914’, Journal of Latin American Studies, 23 (1992), pp. 419–36CrossRefGoogle Scholar; Hopkins, A., ‘Informal empire in Argentine: an alternative view’, Journal of Latin American Studies, 26 (1994), pp. 469–84CrossRefGoogle Scholar; Brown, M., ed., Informal empire in Latin America: culture, commerce and capital (Malden and Oxford, 2008)CrossRefGoogle Scholar.

37 J. Whitehead to E. Grey, 12. Dec. 1906, Belgrade, TNA FO 368/47; E. Gillingham to Foreign Office, 5 Feb. 1908, London, TNA FO 368/219; J. Marr to E. Grey, 21 Mar. 1908, London, TNA FO 368/219; R. Paget to E. Grey, 11 Oct. 1911, Belgrade, TNA FO 368/580; Economist, 16 Mar. 1907; W. O'Reilly to E. Grey, 18 Aug. 1908, Belgrade, TNA FO 368/219; W. Heard, ‘Memorandum’, Mar. 1911, TNA FO 368/519; Balkan Agency to E. Grey, 9 June 1914, London, TNA FO 368/1115.

38 Robb, White-collar crime, pp. 114–15.

39 See n. 37.

40 J. Whitehead to Anglo-Servian Syndicate, 15 Feb. 1907, Belgrade, TNA FO 368/126; J. Whitehead to E. Grey, 30 Mar. 1907, Belgrade, TNA FO 368/126; A. Fox to under-secretary of state for foreign affairs, 25 Apr. 1907, London, TNA FO 368/126.

41 A. Fox to under-secretary of state for foreign affairs, 2 Apr. 1908, London, TNA FO 368/219; under-secretary of state for foreign affairs to Anglo-Servian and the Balkan States Engineering Syndicate, 2 Apr. 1908, London, TNA FO 368/219; C. Blakeney to E. Grey, 20 Feb. 1908, Belgrade, TNA FO 368/219; W. O'Reilly to E. Grey, 18 Aug. 1908, Belgrade, TNA FO 368/219.

42 F. Lindley to E. Grey, 17 Mar. 1911, Sofia, TNA FO 368/519; W. Heard, ‘Memorandum’, 17 Mar. 1911, Sofia, TNA FO 368/519; H. Bax-Ironside to Board of Trade, 13 June 1913, Sofia, TNA FO 368/800.

43 R. Paget to E. Gray, 11 Oct. 1911, Belgrade, TNA FO 368/580; J. Fairbairn to R. Paget, 7 Oct. 1911, London, TNA FO 368/580.

44 L. Oliphant to E. Grey, 13 June 1914, London, TNA FO 368/1115.

45 D. Crackanthorpe to L. Oliphant, 22 June 1914, Belgrade, TNA FO 368/1115; G. Stanley to under-secretary of state, 7 July 1914, London, TNA FO 368/1115.

46 McLean, ‘Finance’, p. 296. Sir Ernest Cassel of the National Bank of Turkey was one of the most notable exceptions to the rule.

47 Robb, White-collar crime, p. 97. See also Channon, G., ‘The business morals of British railway companies in the mid-nineteenth century’, Business and Economic History, 2 (1999), pp. 69–79Google Scholar; Itzkowitz, D., ‘Fair enterprise or extravagant speculation: investment, speculation, and gambling in Victorian England’, Victorian Studies, 45 (2002), pp. 121–47CrossRefGoogle Scholar; Taylor, J., ‘Commercial fraud and public men in Victorian Britain’, Historical Research, 78 (2005), pp. 230–52CrossRefGoogle Scholar.

48 Levene, M., ‘The Balfour declaration: a case of mistaken identity’, English Historical Review, 92 (1992), pp. 58Google Scholar, 61; Bar-Yosef, E., ‘Christian Zionism and Victorian culture’, Israel Studies, 8 (2003), pp. 32–9CrossRefGoogle Scholar.

49 See Ragussis, M., Figures of conversion: ‘the Jewish question’ and English national identity (Durham, NC, and London, 1995), p. 245Google Scholar; Ferguson, House of Rothschild, p. 269.

50 Satow cited in Phimister, ‘Foreign devils’, p. 751.

51 Phimister, ‘Foreign devils’, pp. 757–8. See also, McLean, ‘Commerce’, p. 475.

52 Gounaris, B., ‘Doing business in Macedonia: Greek problems in British perspective (1912–1921)’, European Review of History, 5 (1998), pp. 170–1CrossRefGoogle Scholar. See also Palairet, M., The Balkan economies, c. 1800–1914 (Cambridge, 1997), p. 331–41Google Scholar; Lampe and Jackson, Balkan economic history, pp. 124, 129.

53 See Becker, Grey & Co. to secretary of state for India, 12 Mar. 1906, London, TNA FO 368/10; Samson & Unna to Dundee Chamber of Commerce, 20 Mar. 1906, Dundee, TNA FO 368/10; Ehrenbach, Brumm & Co. to E. Grey, 28 Mar. 1908, Bradford, TNA FO 368/174; Carr & Co. to Board of Trade, 30 Dec. 1909, Carlisle, TNA FO 368/278; Altendorf & Wright to Foreign Office, 12 Apr. 1911, Birmingham, TNA FO 368/519; Lever Brothers Ltd.to Board of Trade, 11 Aug. 1911, Cheshire, TNA FO 368/11; E. H. Kannreuther to M. de C. Findlay, 12 Oct. 1910, Birmingham, TNA FO 368/395; Brigg, Neumann & Co. to M. de. C. Findlay, 1 Nov. 1910, Bradford, TNA FO 368/395.

54 G. Buchanan, ‘General report on Bulgaria for the year 1906’, 1907, TNA FO 881/8873, p. 8; H. Bax-Ironside, ‘Bulgaria annual report for 1911’, 1912, TNA FO 371/1304, p. 19.

55 Todorova, M., Imagining the Balkans (New York, NY, and Oxford, 1997), 7Google Scholar, 19; Goldsworthy, V., Inventing Ruritania: the imperialism of the imagination (London and New Haven, CT, 1998), 2Google Scholar; Finney, P., ‘Raising Frankenstein: Great Britain, “Balkanism” and the search for a Balkan Locarno in the 1920s’, European History Quarterly, 33 (2003), pp. 318–19CrossRefGoogle Scholar, 326, 331–5; Streets, H., Martial races: the military, race and masculinity in British imperial culture, 1857–1914 (Manchester and New York, NY, 2004)Google Scholar; Satia, P., Spies in Arabia: the Great War and the cultural foundations of Britain's covert empire in the Middle East (Oxford, 2008)CrossRefGoogle Scholar.

56 Kynoch Ltd to under secretary of state for foreign affairs, 27 Jan. 1910. See also Birmingham, TNA FO 368/456; Birmingham Small Arms Co. Ltd to Whitehead, 14 Mar. 1910, Birmingham, TNA FO 368/456; Barclay to Grey, 21 Dec. 1910, Belgrade, TNA FO 368/456.

57 Walton, Gooddy & Cripps to Foreign Office, London, 6 May 1911, TNA FO 368/519. See also Vulcan Foundry Ltd to Board of Trade, 26 Feb. 1907, Warrington, TNA FO 368/126; Kynoch Ltd to under secretary of state for foreign affairs, 27 Jan. 1910, Birmingham, TNA FO 368/456; Birmingham Small Arms Co. Ltd to J. Whitehead, 14 Mar. 1910, Birmingham, TNA FO 368/456; Walton, Gooddy & Cripps to Foreign Office, London, 6 May 1911, TNA FO 368/519.

58 M. Suonpää, ‘British perceptions of the Balkan Slavs: professional and popular categorizations before 1914’ (Doctoral dissertation, Hull, 2008), pp. 167–8.

59 G. Buchanan to E. Grey, 29 Sept. 1906, Sofia, TNA FO 368/11; H. Bax-Ironside to E. Grey, 23 May 1911, Sofia, TNA FO 368/519.

60 Balkan Agency to Foreign Office, 26 Aug. 1914, London, TNA FO 368/1115; Middlemore & Lamplugh to Board of Trade, 17 Jan. 1914, Walsall, TNA FO 368/1115. See also Economist, 3 May 1913.

61 See Economist, 5 Oct. 1915.

62 A. Kostov, ‘Western capital and the Bulgarian banking system: late nineteenth-century Second World War’, in Kostis, ed., Modern banking, p. 61; Pamuk, S., The Ottoman Empire and European capitalism, 1820–1913 (Cambridge, 1987), p. 58Google Scholar; Berend and Ranki, Economic development, p. 88; K. E. Born, International banking in the nineteenth and twentieth centuries (Leamington Spa, 1983), p. 116.

63 McLean, ‘Finance’, p. 304.

64 National Cotton Spinning Company of Bulgaria, TNA BT 31/31524/52646; Farrar & Co. to E. Grey, 8 Mar. 1909, Manchester, TNA FO 368/278; Palairet, Balkan economies, p. 272.

65 I thank Dr Martin Ivanov of the Bulgarian Academy of Sciences, Institute of History, for these very useful biographical notes on Bebis and Simeonov.

66 Farrar & Co. to E. Grey, 8 Mar. 1909, Manchester, TNA FO 368/278.

67 Berend and Ranki, Economic development, p. 88.

68 For further details about this affair, see Farrar & Co.'s correspondence with the Foreign Office and the Board of Trade in TNA FO 368/278, 368/394, 368/518 between May 1909 and Dec. 1911. See also Palairet, Balkan economies, p. 338.