ZAHAROFF: DEALER AT ARMS LENGTH
Zahroff’s life, though colourful, is an Odyssey of iniquity, a Babylon of self-interest and corruption. How one man can achieve so much and just what he could have done, had he, in Maxwell Smartian fashion, exercised his considerable power for good instead of evil, is the cognitive conclusion that vexes those cognizant of his sorry deeds, which arouse disgust but also furtive guilt-laden feelings of admiration for a consummate scam-artist.
Basil, a Greek, was born in Constantinople. His surname, Zaharoff was adopted when the family fled to Russia as a result of the anti-Greek Easter pogroms in 1849. By 1855, the family was back in Constantinople where they lived in the poor quarter of Tatavla where Basil was a street urchin.
Zaharoff’s first job was as a guide for the tourists to Galata, the prostitution district of Constantinople, helping his clients to find the forbidden pleasures that went beyond the bounds of normal prostitution. He was then to become a fireman. The firemen of Constantinople were famed not for extinguishing fires, but for rescuing the treasures of the rich for a healthy commission. Many also engaged in protection rackets and outright robbery. Basil then took on the job of a money changer. Legend has it that he would pass counterfeit currency to tourists who would not notice until they were safely on a boat steaming away from Constantinople.
He next appears in London in the midst of a controversy that had him in court over irregular commercial actions involving the export of certain goods from Constantinople to London. Released on the payment of £100 on condition that he pay restitution to the claimant, and remain within the jurisdiction of the court, he immediately went to Athens
Once there, Zaharoff was befriended by a political journalist Etienne Skouloudis. By a stroke of good fortune, another friend of Skouloudis, a Swedish captain, was leaving his job as representative of arms manufacturer Thorsten Nordenfelt for a more important posting. Skouloudis, a rising star in politics and was able to recommend Zaharoff to fill the vacancy. On 14 October 1877, Zaharoff was hired, embarking upon a spectacular career. The prevailing political and military circumstances involving the Balkan states, Turkey and Russia provided an excellent opportunity for the young salesman. Each state was ready to spend large, in order to proptect themsleves against the perceived aggressive intentions of its neighbours, in the global paranoia that anteceded the Berlin Agreement of 1878.
One of the most notable sales by Zaharoff was that of the Nordenfelt I, a steam-driven submarine. Though the major powers were not impressed by it, smaller nations interested by the prestige hankered after it. It was thus that, with a promise of liberal payment terms, Zaharoff sold the first model to Greece. He then convinced the Ottomans that the Greek submarine posed a threat and sold them two. After that, he persuaded the Russians that there was now a new significant threat on the Black Sea, and they bought two. None of these submarines ever saw battle. In a trial by the Turkish Navy, one of theirs attempted to fire a torpedo and became so unbalanced that it sank stern first.
Zaharoff’s next coup was the deliberate sbotaging of an exhibtion of the Maxim Gun. Infintely superior to Nordenfelt’s hand-cranked machine gun, Zaharoff was determined to obtain for himself, the sole right to purvey the Maxim Gun. Thus, at an exhibition in La Spezia, Italy, Maxim’s representatives did not show up; an unknown person had provided them a guided tour of La Spezia’s nocturnal establishments leaving them in no condition to go anywhere.
Some later, in Vienna, after shooting a few hundred rounds, Maxim’s apparatus became erratic then stopped altogether. When Maxim took the weapon apart to see what had happened, he discovered that it had been sabotaged. At a subsequent demonstration, an unknown person consulted a gathering of senior officers, convincing them that the workmanship required to produce such a marvellous weapon could only be done by hand, and that without the means for mass production Maxim could never produce the machine gun in sufficient quantities to satisfy the needs of a modern army. Maxim was beaten. He successfully sought a merger with Nordenfelt, with Zaharoff as the principal salesman at a fat commission rate. In 1890, the Maxim-Nordenfelt association broke up and Zaharoff chose to go with Maxim. With his commissions, Zaharoff bought shares in Maxim’s company until he was able to tell Maxim that he was no longer an employee but an equal shareholder.
By 1897, the Maxim company had become important enough that it received a buyout offer from Vickers, one of the then giants of the armaments industry. This involved substantial settlements in both cash and shares for Maxim and Zaharoff. From then until 1911, while Maxim’s business enthusiasm waned, Zaharoff’s enthusiasm and portfolio of Vickers shares grew. With Maxim’s retirement, Zaharoff joined the Vickers board of directors.
The first decade of the twentieth century ushered in a European Imperial Arms Race. Germany and Britain both saw an especial need for improved naval units. Vickers and Zaharoff were there, willing and able to accommodate both sides. After its disastrous defeat by Japan in 1905, Russia too had a need to rebuild its navy, but the nation was beset by a wave of chauvinism that required a domestic industry for the rebuilding. Zaharoff’s response was to build a huge Russian arms production complex at Tsaritsin, as a subsidiary of Vickers. Zaharoff’s adeptness at intriguing is exemplified by a 1907 letter,written by the Paul von Gontard factory (a secretly controlled Vickers company in Germany) to a Vickers associate in Paris recommending that press releases go out to the French press with suggestions that the French improve their military to meet the threats of military build-up in Germany. These French newspaper articles were read into the record of the Reishstag, and were followed by a vote to increase military spending.
In the years immediately preceding World War I, Zaharoff’s fortunes grew in other areas to support his arms business. He purchased the Union Pariesenne Bank in order to better able to control financing arrangements. By gaining control of the daily newspaper, Excelsior, he could be assured of editorials favorable to the arms industry. Some time after, the French President Raymond Poincaré signed a decree making him a commander of the Legion of Honour.
Vickers of Britain alone would, during the course of the war, produce 4 ships of the line, 3 cruisers, 53 submarines, 3 auxiliary vessels, 62 light vessels, 2,328 cannon, 8,000,000 tonnes of steel ordnance, 90,000 mines, 22,000 torpedoes, 5,500 airplanes and 100,000 machine guns. By 1915, Zaharoff had close ties with both Lloyd George and Frenh PM, Aristide Briand. It is reported that, on the occasion of one visit with Briand, Zaharoff quietly left an envelope on Aristide Briand’s desk; the envelope contained a million francs for war widows, one if his few gestures of generosity.
One of Zaharoff’s tasks during the war was to ensure that Greece became involved in the war on the Allied side. A task seeminly impossible since King Constantine was brother-in-law to the Kaiser. Setting up a press agency in Greece to spread news favorable to the allies led, within a few months, to Constantine’s being deposed in favour of Prime Minister Venizelos. With the war’s end, The Times estimated that Zaharoff had sacrificed £50 million for the Allied cause, ignoring that this was but a small fraction of his commissions. He was made a baronet, as Sir Basil Zaharoff.
In the years that followed, Zaharoff involved himself in the affairs of the lesser European powers. In particular, he convinced Venizelos to defend itself against the insurgent Turkish republicans of Anatolia, sparking off the Asia Minor expedition. In the elections that followed, Constantine’s loyalists trounced Venizelos, but Zaharoff insinuated himself into the king’s good graces, persuading him to continue the war. At the same time, he was secretly supplying Mustafa Kemal with arms.
Much more than being just a petty arms-dealer, Zaharoff had immense commercial and financial influence in Europe. In October 1920, he became involved in the incorporation of a company that was a predecessor to oil giant, British Petroleum. His association with Louis II of Monaco led to his purchase of the debt-ridden Société des Bains de Mer which ran Monte Carlo’s famed casino, and the principal source of revenue for the country. He succeeded in making the casino profitable again. At the same time, Zaharoff prevailed upon French President Clemenceau to ensure that the Treaty of Versailles included protection of Monaco’s rights as established in 1641.
Fascinatingly, Zaharoff’s decline seems to have commenced only when he gave way to sentimentality and human-like emotions. In September 1924, the 75-year-old Zaharoff was married for the first time to the love of his life, Maria del Pilar who he had met some three decades earlier on the Orient Express. Zaharoff was smitten from the beginning, but she was already married to the unstable Duke of Marchena. Despite the fact that the insane Duke was soon confined to an asylum, the Catholic Maria would hear nothing of divorce and waited for the Duke’s death. Eighteen months after the marriage, Maria succumbed to an infection.
With that, Zaharoff began a liquidation of his business assets, and undertook to compose his memoirs. When the memoirs were completed, they were stolen by a valet who had perhaps hoped to make his fortune by revealing embarrassing secrets about the greats of Europe. The police found the memoirs and returned them to Zaharoff. On payment of a cheque to the policemen, Zaharoff re-acquired the manuscript, which he then consigned to the fireplace. The remainder of his days were passed in friendless solitude and he died in 1936.
A remarkable but thoroughly flawed man, this ignominious Greek’s legacy can be summed up in his own words, as they appear Freddy Germanos’ Tereza: “My dear, I am much more evil than you could ever know.”