"Milner Group"

Chapter 6—The Times:
...Milner's ideas (as expressed, for example, in his book Questions of the Hour, published in 1923) would have been progressive, even unorthodox, in 1935. They were naturally ahead of the times in 1923, and they were certainly far ahead of the ideas of the Group as a whole, for its economic ideas would have been old-fashioned in 1905. These ideas of the Group (until 1931, at least) were those of late-nineteenth-century international banking and financial capitalism. The key to all economics and prosperity was considered to rest in banking and finance. With "sound money," a balanced budget, and the international gold standard, it was expected that prosperity and rising standards of living would follow automatically. These ideas were propagated through The Round Table, in the period after 1912, in a series of articles written by Brand and subsequently republished under his name, with the title War and National Finance (1921). They are directly antithetical to the ideas of Milner as revealed in his book published two years later. Milner insisted that financial questions must be subordinated to economic questions and economic questions to political questions. As a result, if a deflationary policy, initiated for financial reasons, has deleterious economic or political effects, it must be abandoned. Milner regarded the financial policy advocated by Brand in 1919 and followed by the British government for the next twelve years as a disaster, since it led to unemployment, depression, and ruination of the export trade. instead, Milner wanted to isolate the British economy from the world economy by tariffs and other barriers and encourage the economic development of the United Kingdom by a system of government spending, self-regulated capital and labor, social welfare, etc. This program, which was based on "monopoly capitalism" or even "national socialism" rather than "financial capitalism," as Brand's was, was embraced by most of the Milner Group after September 1931, when the ending of the gold standard in Britain proved once and for all that Brand's financial program of 1919 was a complete disaster and quite unworkable. As a result, in the years after 1931 the businessmen of the Milner Group embarked on a policy of government encouragement of self-regulated monopoly capitalism. This was relatively easy for many members of the Group because of the distrust of economic individualism which they had inherited from Toynbee and Milner. In April 1932, when P. Horsfall, manager of Lazard Brothers Bank (a colleague of Brand), asked John Dove to write a defense of individualism in The Round Table, Dove suggested that he write it himself, but, in reporting the incident to Brand, he clearly indicated that the Group regarded individualism as obsolete. (8)
This difference of opinion between Milner and Brand on economic questions is not of great importance. The important matter is that Brand's opinion prevailed within the Group from 1919 to 1931, while Milner's has grown in importance from 1931 to the present. The importance of this can be seen in the fact that the financial and economic policy followed by the British government from 1919 to 1945 runs exactly parallel to the policy of the Milner Group. This is no accident but is the result, as we shall see, of the dominant position held by the Milner Group in the councils of the Conservative-Unionist party since the First World War.

Chapter 10—The Royal Institute of International Affairs:
The real founder of the Institute was Lionel Curtis, although this fact was concealed for many years and he was presented to the public as merely one among a number of founders. In more recent years, however, the fact that Curtis was the real founder of the Institute has been publicly stated by members of the Institute and by the Institute itself on many occasions, and never denied. One example will suffice. In the Annual Report of the Institute for 1942-1943 we read the following sentence: "When the Institute was founded through the inspiration of Mr. Lionel Curtis during the Peace Conference of Paris in 1919, those associated with him in laying the foundations were a group of comparatively young men and women."
The Institute was organized at a joint conference of British and American experts at the Hotel Majestic on 30 May 1919. At the suggestion of Lord Robert Cecil, the chair was given to General Tasker Bliss of the American delegation. We have already indicated that the experts of the British delegation at the Peace Conference were almost exclusively from the Milner Group and Cecil Bloc. The American group of experts, "the Inquiry," was manned almost as completely by persons from institutions (including universities) dominated by J. P. Morgan and Company. This was not an accident. Moreover, the Milner Group has always had very close relationships with the associates of J. P. Morgan and with the various branches of the Carnegie Trust. These relationships, which are merely examples of the closely knit ramifications of international financial capitalism, were probably based on the financial holdings controlled by the Milner Group through the Rhodes Trust. The term "international financier" can be applied with full justice to several members of the Milner Group inner circle, such as Brand, Hichens, and above all, Milner himself.

Chapter 12—Foreign Policy, 1919-1940:
Throughout 1923 and 1924, D'Abernon put pressure on both the German and the British governments to pursue a policy on the reparations question which was identical with that which Smuts was advocating at the same time and in the same quarters. He put pressure on the British government to follow this policy on the grounds that any different policy would lead to Stresemann's fall from office. This would result in a very dangerous situation, according to D'Abernon (and Stresemann), where Germany might fall into the control of either the extreme left or the extreme right. For example, a minute of a German Cabinet meeting of 2 November 1923, found by Eric Sutton among Stresemann's papers and published by him, said in part: "To the English Ambassador, who made some rather anxious enquiries, Stresemann stated that the maintenance of the state of siege was absolutely essential in view of the risk of a Putsch both from the Left and from the Right. He would use all his efforts to preserve the unity of the Reich.... Lord D'Abernon replied that his view, which was shared in influential quarters in London, was that Stresemann was the only man who could steer the German ship of State through the present troubled waters." Among the quarters in London which shared this view, we find the Milner Group.
The settlement which emerged from the crisis, the Dawes Plan and the evacuation of the Ruhr, was exactly what the Milner Group wanted. From that point on to the banking crisis of 1931, their satisfaction continued. In the years 1929-1931 they clearly had no direct influence on affairs, chiefly because a Labour government was in office in London, but their earlier activities had so predetermined the situation that it continued to develop in the direction they wished. After the banking crisis of 1931, the whole structure of international finance with which the Group had been so closely associated disappeared and, after a brief period of doubt, was replaced by a rapid growth of monopolistic national capitalism. This was accepted by the Milner Group with hardly a break in stride. Hichens had been deeply involved in monopolistic heavy industry for a quarter of a century in 1932. Milner had advocated a system of "national capitalism" with "industrial self-regulation" behind tariff walls even earlier. Amery and others had accepted much of this as a method, although they did not necessarily embrace Milner's rather socialistic goals. As a result, in the period 1931-1933, the Milner Group willingly liquidated reparations, war debts, and the whole structure of international capitalism, and embraced protection and cartels instead.
Parallel with their destruction of reparations, and in a much more direct fashion, the Milner Group destroyed collective security through the League of Nations. The Group never intended that the League of Nations should be used to achieve collective security. They never intended that sanctions, either military or economic, should be used to force any aggressive power to keep the peace or to enforce any political decision which might be reached by international agreement. This must be understood at the beginning. The Milner Group never intended that the League should be used as an instrument of collective security or that sanctions should be used as an instrument by the League. From the beginning, they expected only two things from the League: (1) that it could be used as a center for international cooperation in international administration in nonpolitical matters, and (2) that it could be used as a center for consultation in political matters. In regard to the first point, the Group regarded the League as a center for such activities as those previously exercised through the International Postal Union. In all such activities as this, each state would retain full sovereignty and would cooperate only on a completely voluntary basis in fields of social importance. In regard to the second point (political questions), no member of the Group had any intention of any state yielding any sliver of its full sovereignty to the League. The League was merely an agreement, like any treaty, by which each state bound itself to confer together in a crisis and not make war within three months of the submission of the question to consultation. The whole purpose of the League was to delay action in a crisis by requiring this period for consultation. There was no restriction on action after the three months. There was some doubt, within the Group, as to whether sanctions could be used to compel a state to observe the three months' delay. Most of the members of the Group said "no" to this question. A few said that economic sanctions could be used. Robert Cecil, at the beginning, at least, felt that political sanctions might be used to compel a state to keep the peace for the three months, but by 1922 every member of the Group had abandoned both political and economic sanctions for enforcing the three months' delay. There never was within the Group any intention at any time to use sanctions for any other purpose, such as keeping peace after the three-month period.

...

Hitler was given ample assurance by the Milner Group, both within and without the government, that Britain would not oppose his efforts "to achieve arms equality." Four days before Germany officially denounced the disarmament clauses of the Treaty of Versailles, Leopold Amery made a slashing attack on collective security, comparing "the League which exists" and "the league of make-believe, a cloud cuckoo land, dreams of a millennium which we were not likely to reach for many a long year to come; a league which was to maintain peace by going to war whenever peace was disturbed. That sort of thing, if it could exist, would be a danger to peace; it would be employed to extend war rather than to put an end to it. But dangerous or not, it did not exist, and to pretend that it did exist was sheer stupidity."
Four days later, Hitler announced Germany's rearmament, and ten days after that, Britain condoned the act by sending Sir John Simon on a state visit to Berlin. When France tried to counterbalance Germany's rearmament by bringing the Soviet Union into her eastern alliance system in May 1935, the British counteracted this by making the Anglo-German Naval Agreement of 18 June 1935. This agreement, concluded by Simon, allowed Germany to build up to 35 percent of the size of the British Navy (and up to 100 percent in submarines). This was a deadly stab in the back to France, for it gave Germany a navy considerably larger than the French in the important categories of ships (capital ships and aircraft carriers) in the North Sea, because France was bound by treaty in these categories to only 33 percent of Britain's; and France, in addition, had a worldwide empire to protect and the unfriendly Italian Navy off her Mediterranean coast. This agreement put the French Atlantic coast so completely at the mercy of the German Navy that France became completely dependent on the British fleet for protection in this area. Obviously, this protection would not be given unless France in a crisis renounced her eastern allies. As if this were not enough, Britain in March 1936 accepted the German remilitarization of the Rhineland and in August 1936 began the farcical nonintervention agreement in Spain, which put another unfriendly government on France's remaining land frontier. Under such pressure, it was clear that France would not honor her alliances with the Czechs, the Poles, or the Russians, if they came due.
In these actions of March 1935 and March 1936, Hitler was running no risk, for the government and the Milner Group had assured him beforehand that it would accept his actions. This was done both in public and in private, chiefly in the House of Commons and in the articles of The Times. Within the Cabinet, Halifax, Simon, and Hoare resisted the effort to form any alignment against Germany. The authorized biographer of Halifax wrote in reference to Halifax's attitude in 1935 and 1936:
"Was England to allow herself to be drawn into war because France had alliances in Eastern Europe? Was she to give Mussolini a free pass to Addis Ababa merely to prevent Hitler marching to Vienna?" Questions similar to these were undoubtedly posed by Halifax in Cabinet. His own friends, in particular Lothian and Geoffrey Dawson of The Times, had for some time been promoting Anglo-German fellowship with rather more fervour than the Foreign Office. In January 1935 Lothian had a long conversation with Hitler, and Hitler was reputed to have proposed an alliance between England, Germany, and the United States which would in effect give Germany a free hand on the Continent, in return for which he had promised not to make Germany "a world power" or to attempt to compete with the British Navy. The Times consistently opposed the Eastern Locarno and backed Hitler's non-aggression alternative. Two days before the Berlin talks, for instance, it advocated that they should include territorial changes, and in particular the question of Memel; while on the day they began [March 1935] its leading article suggested that if Herr Hitler can persuade his British visitors, and through them the rest of the world, that his enlarged army is really designed to give them equality of status and equality of negotiation with other countries, and is not to be trained for aggressive purposes, then Europe may be on the threshold of an era in which changes can be made without the use of force, and a potential aggressor may be deterred by the certain prospect of having to face overwhelming opposition! How far The Times and Lothian were arguing and negotiating on the Government's behalf is still not clear, but that Halifax was intimately acquainted with the trend of this argument is probable.”
It goes without saying that the whole inner core of the Group, and their chief publications, such as The Times and The Round Table, approved the policy of appeasement completely and prodded it along with calculated indiscretions when it was felt necessary to do so. After the remilitarization of the Rhineland, The Times cynically called this act "a chance to rebuild." As late as 24 February 1938, in the House of Lords, Lothian defended the same event. He said: "We hear a great deal of the violation by Herr Hitler of the Treaty because he returned his own troops to his own frontier. You hear much less today of the violation by which the French Army, with the acquiescence of this country, crossed the frontier in order to annihilate German industry and in effect produced the present Nazi Party."

...

It is probable that the groundwork for Halifax's visit to Hitler had been laid by the earlier visits of Lords Lothian and Londonderry to the same host, but our knowledge of these earlier events is too scanty to be certain. Of Halifax's visit, the story is now clear, as a result of the publication of the German Foreign Office memorandum on the subject and Keith Feiling's publication of some of the letters from Neville Chamberlain to his sister. The visit was arranged by Halifax himself, early in November 1937, at a time when he was Acting Foreign Secretary, Eden being absent in Brussels at a meeting of signers of the Nine-Power Pacific Treaty of 1922. As a result, Halifax had a long conversation with Hitler on 19 November 1937 in which, whatever may have been Halifax's intention, Hitler's government became convinced of three things: (a) that Britain regarded Germany as the chief bulwark against communism in Europe; (b) that Britain was prepared to join a Four Power agreement of France, Germany, Italy, and herself; and (c) that Britain was prepared to allow Germany to liquidate Austria, Czechoslovakia, and Poland if this could be done without provoking a war into which the British Government, however unwillingly, would be dragged in opposition to Germany. The German Foreign Ministry memorandum on this conversation makes it perfectly clear that the Germans did not misunderstand Halifax except, possibly, on the last point. There they failed to see that if Germany made war, the British Government would be forced into the war against Germany by public opinion in England. The German diplomatic agents in London, especially the Ambassador, Dirksen, saw this clearly, but the Government in Berlin listened only to the blind and conceited ignorance of Ribbentrop. As dictators themselves, unfamiliar with the British social or constitutional systems, the German rulers assumed that the willingness of the British Government to accept the liquidation of Austria, Czechoslovakia, and Poland implied that the British Government would never go to war to prevent this liquidation. They did not see that the British Government might have to declare war to stay in office if public opinion in Britain were sufficiently aroused. The British Government saw this difficulty and as a last resort were prepared to declare war but not to wage war on Germany. This distinction was not clear to the Germans and was not accepted by the inner core of the Milner Group. It was, however, accepted by the other elements in the government, like Chamberlain himself, and by much of the second circle of the Milner Group, including Simon, Hoare, and probably Halifax. It was this which resulted in the''phony war" from September 1939 to April 1940.

...

The last piece of evidence which we might mention to support the theory—not of a plot, perhaps, but that the Munich surrender was unnecessary and took place because Chamberlain and his associates wanted to dismember Czechoslovakia—is even more incriminating. As a result of the inadequate rearmament of Germany, a group of conservatives within the regime formed a plot to liquidate Hitler and his close supporters if it appeared that his policy in Czechoslovakia would result in war. This group, chiefly army officers, included men on the highest level of government. In the group were Colonel General Ludwig Beck (Chief of the General Staff), Field Marshal von Witzleben, General Georg Thomas, Carl Friedrich Goerdeler (Mayor of Leipzig in 1930-1936), Ulrich von Hassell (ex-Ambassador to Italy), Johannes Popitz (Prussian Minister of Finance), and Paul Schmidt (Hitler's private interpreter). This group formed a plot to kill Hitler and remove the Nazis from power. The date was set eventually for 28 September 1938. Lord Halifax, on 5 September 1938, was informed of the plot by Theodore Kordt, the German charge d'affaires in London, whose brother, Erich Kordt, chief of Ribbentrop's office in the Foreign Ministry, was one of the conspirators. The message which Kordt gave to Halifax begged the British government to stand fast with Czechoslovakia in the Sudeten crisis and to make perfectly clear that Britain would go to war if Germany violated Czechoslovakian territory. The plot was canceled at noon on 28 September, when the news reached Berlin that Chamberlain was going to Munich. It was this plot which eventually, after many false starts, reached fruition in the attempt to assassinate Hitler on 20 July 1944.
There can be little doubt that the Milner Group knew of these anti-Nazi plots within Germany. Several of the plotters were former Rhodes Scholars and were in touch with members of the inner circle of the Milner Group in the period up to 1943, if not later. One of the leaders of the anti-Hitler plotters in Germany, Helmuth von Moltke, was probably a member of the Milner Group as well as intellectual leader of the conspirators in Germany. Count von Moltke was the son of the German commander of 1914 and grandnephew of the German commander of 1870. His mother, Dorothy Rose-Innes, was the daughter of Sir James Rose-Innes, whom Milner made Chief Justice of the Transvaal in 1902. Sir James was a supporter of Rhodes and had been Attorney General in Rhodes's ministry in 1890. He was Chief Justice of South Africa in 1914-1927 and was always close to the Milner Group. The von Moltkes were Christian Scientists, and Dorothy, as Countess von Moltke after 1905, was one of the persons who translated Mary Baker Eddy's Science and Health into German. The younger Helmuth, son of Dorothy, and Count von Moltke after his father's death in 1938, was openly anti- Nazi and came to England in 1934 to join the English bar. He visited Lionel Curtis, at his mother's suggestion, and "was made a member of the family, rooms in Duke of York Street being put at his disposal, and Kidlington and All Souls thrown open to him at week-ends; the opportunities of contact which these brought with them were exploited to the full.... He was often in England until the summer of 1939, and in 1937 visited South Africa and the grandparents there to whom he was deeply attached." This quotation, from The Round Table for June 1946, makes perfectly clear to those who can read between the lines that Moltke became a member of the Milner Group. It might be added that Curtis also visited the Rose-Innes family in South Africa while Helmuth was there in 1937.
Von Moltke kept in close contact with both Curtis and Lothian even after the war began in 1939. He was made adviser on international law to the Supreme Command of the German Armed Forces (OKW) in 1939 and retained this position until his arrest in 1944. The intellectual leader of the German Underground, he was the inspiration and addressee of Dorothy Thompson's book Listen, Hans. He was the center of a group of plotters called the"Kreisau Circle," named after his estate in Silesia. After his execution by the Nazis in January 1945, his connection with the Milner Group was revealed, to those able to interpret the evidence, in the June 1946 issue of The Round Table. This article extolled Moltke and reprinted a number of his letters. The same article, with an additional letter, was published as a pamphlet in Johannesburg in 1947. (15)
Another plotter who appears to be close to the Milner Group was Adam von Trott zu Solz, a Rhodes Scholar who went to the Far East on a mission for the Rhodes Trust in 1936 and was in frequent contact with the Institute of Pacific Relations in the period 1936-1939. He seems to have attended a meeting of the Pacific Council in New York late in 1939, coming from Germany, by way of Gibraltar, after the war began. He remained in contact with the democratic countries until arrested and executed by the Nazis in 1944. It is not without significance that one of the chief projects which the plotters hoped to further in post-Hitler German foreign policy was a "federation of Europe in a commonwealth not unlike the British Empire."(16)