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aimed at giving Berlin ˜a free hand in Europe™. Maisky™s comments
raised the ire of Eden, still only minister for League of Nations affairs.
Adumbrating the attitude that he would take towards Soviet Russia
when he became foreign secretary, Eden announced that, if Soviet
Russia had not ˜interfered so much & so consistently™ in France™s in-
ternal affairs, perhaps Laval would not be so irate and the possibility of
a rapprochement with Berlin would not even be bruited. ˜M. Maisky will
get no sympathy from me™, Eden declared, ˜I am through with the
Muscovites of this hue.™62 Eden was also suspicious that the loan™s
˜proceeds™ would be used to pay for ˜communist propaganda, here &
elsewhere™.63 But, after coaxing by the Northern Department, Eden was
˜converted™ to approving the loan.
On 28 November, Hoare, Chamberlain and Runciman met.64 Hoare
contended that the loan was needed for ˜keeping Russia out of the
German orbit™, but only Chamberlain accepted the argument.65 Runci-
man continued to prefer granting extended credit. He agreed, however,
to re-examine the loan if the Soviets would pay a high rate of interest.
Desultory discussions were held.66 The political explosion caused by the
Hoare“Laval plan delayed any decision. Vansittart was impatient to
determine British policy towards Soviet Russia: ˜We shall “ as in other
matters™, the PUS minuted on 21 December, ˜miss a very large boat if we
cannot make up our minds even now™.67 He was doomed to frustration.
On 24 December, Runciman insisted that only credits, not a loan, could
be given to the Soviets.68 In the charged political atmosphere, a second
row over foreign policy was unthinkable. This was enough for Cham-
berlain. He supported Runciman™s views: ˜The more I think of the Loan
proposal the less I like it.™69 This was a political matter for the Cabinet,
and would take time. Though Vansittart and Eden were both annoyed
and concerned that Maisky might turn elsewhere, they found solace in
62
Vansittart™s memo, 18 Nov 1935, FO 371/19452/N5966/17/38, Eden™s minute (20
Nov).
63
His minute (21 Nov) on Remnant to Collier, 25 Oct 1935, FO 371/19448/N5566/1/38,
minutes.
64
Hoare™s memo, 28 Nov 1935, FO 371/19452/N6222/17/38; Collier™s minutes (30 Nov
and 2 Dec).
65
The reasons in untitled memo by Waley, minute by Phillips, both 26 Nov 1935, T 160/
749/F14202/2.
66
Waley to Hopkins, note, 5 Dec 1935; Collier to Waley, very secret, 7 Dec 1935, both T
160/749/F14202/2.
67
Collier™s minute, 12 Dec 1935, FO 371/19452/N6471/17/38; Waley to FO, 13 Dec
1935, FO 371/19452/N6484/17/38, Vansittart™s minute (21 Dec); for the political effect,
see Earl of Crawford and Balcarres to Buchan, 15 Jan 1936, Buchan Papers, Box 7.
68
Brown (B of T) to Vansittart, 24 Dec 1935, FO 371/19452/N6698/17/38, minutes
(included is Maisky to Eden, 23 Dec 1935).
69
Chamberlain™s minute (25 Dec) on Waley to Rowan, 24 Dec 1935, T 160/749/F14202/2.
Complications and choices 157

the Soviet ambassador™s statement that a ˜stable and lasting peace
system™ required ˜true collaboration™ between their countries.70 But
Vansittart also attempted to push matters. He prodded the Board of
Trade, noting that Maisky ˜is beginning to wonder whether we really
intend to do anything at all to improve Anglo-Soviet trade, or Anglo-
Soviet relations generally™.71
In the new year, the entire issue was unresolved. Maisky returned to
the charge. On 6 January, the ambassador told both Eden and Collier
that Anglo-Soviet friendship was essential for European peace and urged
the need to grant the Anglo-Soviet loan to underline this solidarity. Eden
was non-committal, but emphasized that Soviet Russia must ˜rigorously
abstain™ from interfering in the domestic affairs of other countries.
Vansittart noted that Maisky was ˜most anxious™ that there would be no
further delay in the loan discussions in order ˜to counter all the prema-
ture talk of an agreement with Germany, to which M. Laval has given so
much currency. There is also a lot of loose talk and looser thinking on
the subject here “ of which he [Laval] is well aware.™72
These issues were also tied to the ratification of the Franco-Soviet
Pact.73 Considerations of this prompted discussion about how ˜the
reaction of ratification™ would affect British interests. Wigram pointed
out that London had always believed that the pact had been concluded
by Paris in order to block any possible Russo-German rapprochement “
˜also one of the reasons for which a Russian loan from this country
is advocated™. He also pointed out that ratification might lead to
Germany™s taking ˜some foolish initiative™. Further, it could ˜scarcely
assist any schemes we may have in mind for the establishment of more
cordial relations between France, Germany and ourselves™. The head of
the Central Department made clear just how significant the entire
matter was for Britain:

70
For other possible loans, see Michael Jabara Carley, ˜Five Kopecks for Five Kopecks:
Franco-Soviet Trade Negotiations, 1928“1939™, CMRS, 33, 1 (1992), 23“58; Geoffrey
Roberts, ˜A Soviet Bid for Coexistence with Nazi Germany, 1935“1937: The Kandelaki
Affair™, IHR, 16, 3 (1994), 466“90.
71
Waley to FO, 13 Dec 1935, FO 371/19452/N6484/17/38, Vansittart™s minute (21 Dec).
72
Eden™s memo, 7 Jan 1936, FO 371/20338/N120/20/38, minutes, Collier (8 Jan), Van-
sittart (7 Jan); Collier™s memo, 6 Jan 1936, FO 371/20338/N125/20/38; cf. Carley, ˜“A
Fearful Concatenation”™, 59“62. See also Nicholas Rostow, Anglo-French Relations
1934“1936 (New York, 1984), 226“34.
73
This and the following paragraph based on Phipps to Eden, disps 1344 and 1359, 16
and 19 Dec 1935, both Phipps Papers, PHPP 1/15; ˜Comments on Berlin Telegrams
Nos. 343, 344, 345 and 298 Saving™, Wigram, 16 Dec 1935, FO 371/18852/C8329/55/
18; Phipps to FO, 30 Dec 1935, FO 371/19855/C1/1/17; Clerk to FO, tel 2, 3 Jan 1936,
FO 371/19855/C62/1/17, minutes, Wigram (6 Jan), Collier (7 Jan), Sargent (8 Jan),
Vansittart (9 Jan) and Stanhope (15 Jan).
158 Britain, Soviet Russia and the Versailles Order
The contest between these two schools of opinion in France raises a very
important issue. One favours the stabilization of the European situation by
[an] understanding with Germany “ the other by tightening the bonds with
Russia. Ratification of the Franco-Russian treaty will in fact mean that France
has chosen the second course.

He concluded with a question: ˜What course do we favour?™
Collier and Sargent were on opposite sides. The former argued that ˜it
is most important for us and for France to cultivate good relations with
the Soviet Government in view both of the German menace in Europe
and of the Japanese menace in the Far East™. He did not ˜believe that it is
either possible or desirable . . . to attempt to reverse our present policy by
coming to an understanding with Germany at the expense of Russia™.
Sargent felt otherwise. He contended that ratification might pre-empt
any British decision ˜as to how Germany™s ambitions are in future to be
controlled™. If the Franco-Soviet Pact came into effect, it ˜would make it
still more difficult than it already is for us to reach any sort of settlement
with Germany™, particularly if Hitler viewed ratification as ˜proof that
France has reverted to the so-called policy of encirclement™. Vansittart
merely argued that the French would likely ratify no matter what Britain
advised.
There were clear divisions in the Foreign Office about how Soviet
Russia factored into the British strategic foreign policy equation. They
surfaced again in the often-hostile loan debate. On 9 January, Collier
and Ashton-Gwatkin advocated granting the loan.74 Eden approved
their views, but with reservations. He felt that their argument was ˜just™
sufficient, but reiterated his concern that the money would finance
˜communist propaganda in the Empire™.75 Sargent remained opposed.
He argued that a guaranteed loan to Soviet Russia ˜will appear to public
opinion throughout Europe as a highly significant act implying an un-
usual and close political co-operation between the two governments™.
With final ratification of the Franco-Soviet Treaty continuing apace,
Hitler would regard a loan ˜as the contribution of His Majesty™s Govern-
ment to the French encirclement policy™. Sargent was seconded by one
of the parliamentary undersecretaries, Lord Stanhope. For the latter, the
key was the ˜political™ question: ˜what is our policy? Is it to improve our
relations with Russia or with Germany & Japan?™ He echoed Sargent™s



74
This and the following two paragraphs, except where indicated, are based on minutes
and marginalia, untitled memo, Collier and Ashton-Gwatkin, nd (but 9 Jan 1936), FO
371/20338/N479/20/38.
75
A bugbear for Eden: Eden to FO, tel 7, 21 Jan 1936, Eden Papers, FO 954/24.
Complications and choices 159

point about the possible German cry of encirclement, and added that ˜I
cannot say that I look with much enthusiasm on being friends with
Russia or Germany or Japan “ I mistrust them all, but I mistrust Russia
most of the three.™
Vansittart, who supported Collier, deflected some of this criticism. He
noted that the Germans were attempting to seize the initiative them-
selves by offering a loan to Soviet Russia. But Eden riposted that Ger-
many was not able to do this, and found ˜much force™ in Sargent™s
arguments. The foreign secretary™s remarks reflected his antipathy to
Soviet Russia: ˜I want good relations with the bear™, he noted, ˜[but] I
don™t want to hug him too close. I don™t trust him, & am sure there is
hatred in his heart for all we stand for. So the loan only if it is worth our
while.™ His dislike was shared by a second parliamentary undersecretary,
Lord Cranborne. He argued that the Soviets would ˜remain unalterably
malignant to the British Empire, and [would] intrigue against us when-
ever and wherever they can™. The loan would be resented by Germany,
and would make it more difficult to coax it ˜back into the comity of
nations™.
Vansittart contested these assertions. He rejected the idea that the
policy alternatives were ˜pro-this or anti-that™. The Northern Depart-
ment was not ˜pro-Russian™ nor was the Central Department ˜pro-
German™. For the PUS, the ˜real point™ was as follows:
Can Germany be ˜brought back into the comity of nations™? The answer is only
at a price. Next question. Are we prepared to pay? If we are, we certainly ought to
try and might well succeed. If we can™t we probably should not try, because
failure will be making the worst of both worlds. And even if we try and fail . . . the
ultimate question will remain: which constitutes the most immediate danger? So
that until we know the answer to the possibility of bringing Germany back, we
ought to be careful to discourage no one who is in the same boat. There are many
of them, and one happens for the present to be Russia.

The argument did not end there. On 17 January, Sargent argued the
contrary position.76 He noted that ˜this whole question of Anglo-
German and Anglo-Russian relations was at present sub judice™ and could
not yet be answered. His minute, however, advocated a very different
line of policy:
the danger of a German“Russian rapprochement can only be successfully coun-
tered by a system of collaboration with both Germany and Russia, and more
particularly with Germany, inasmuch as the initiative for such a rapprochement
lies with Germany and not with Russia. Whatever treaties, loans, and other

76
The remainder of this paragraph is based on his minute (17 Jan 1936) on Chilston to
Collier, 10 Dec 1935, FO 371/19460/N6642/75/38.
160 Britain, Soviet Russia and the Versailles Order
favours we and the French may give to the Soviet Government, so great is the
moral and physical influence of Germany in Eastern Europe that I have little
doubt that they would not weigh for a moment with Litvinov if Hitler were to
offer him a German alliance . . . On the other hand, the thing which is most likely
to decide Hitler to swallow his principles and to reverse his anti-Russian policy is
the conviction that Great Britain and France are determined on a policy of
ostracising Germany and surrounding her with a circle of enemies. Probably
there is nothing we can do to convince him to the contrary, and it is possible that
he does not wish to be so convinced. But I still feel “ and I think you agree with
me “ that we ought at any rate to make the effort, if only to test Hitler™s intentions
and sincerity, before putting all our eggs in the Russian basket.

Vansittart™s response noted that little could be done until the Cabinet
decided on a policy. But he stated that a Russo-German rapprochement
was likely only in the future and then only ˜if we mismanage the situ-
ation™. He did not favour any agreement with Germany: ˜None of us can
be sure yet that any settlement worth the name is attainable with Ger-
many.™ As a result, ˜until we are, we must be careful not to alienate a
country [that is, Soviet Russia] with whom we are collaborating (at
Geneva) in favour of one with whom we have not got even that link™.77
A week later, Collier began a further battle in this war to determine the
˜agreed™ view of the situation. He argued that the Germans could not
assert that any possible British loan to Soviet Russia was anything differ-
ent from their own offer to Moscow. The political implications were
straightforward: Britain would not ˜connive™ at any attack by Germany
on Soviet Russia, and, if the Germans resented this, it was due to the
inherently aggressive nature of Nazi foreign policy. As to the argument
that negotiations with Germany would proceed more favourably if the
Soviet loan were not given, Collier averred that ˜if such an understanding
[with Germany] is to have any value it seems essential that it should not
be negotiated under a threat of blackmail™. Opposition was swift. Sargent
was unconvinced that ˜we need or ought to run the risk of the political
repercussions, both at home and abroad™ of providing the loan. He
suggested that credits, as the Germans were offering the Soviets, were
a better alternative to the loan.78
Events intruded. On 22 January, Berlin announced the granting of
German credits to Soviet Russia, just as Collier had long predicted.
Sargent rejected that this tipped the scales in favour of a British loan,
but Vansittart now argued that something had to be done, as ˜it looks as
if we either have lost, or were going to lose, our chance™. Eden agreed.79

77
Vansittart™ minute (17 Jan) on ibid.
78
Collier™s memo, 23 Jan 1936, FO 371/20338/N425/20/38, minutes.
79
Phipps to FO, tel 15, 22 Jan 1936, FO 371/20346/N400/187/38, minutes.
Complications and choices 161

The final nail in Sargent™s coffin came on 28 January, when Phipps sent
an account of the German offer. This was enough for Vansittart. Now
matters had to be resolved on the basis of ˜our own interests and not a
will o™ the wisp™. He suggested that Eden take the entire matter to
Cabinet on the basis of Collier™s memorandum.80 This did not occur.
Instead, it was decided to hold a fuller discussion of British policy in
Europe.81 This decision was likely spawned by considerations of the
potential impact of the Franco-Soviet Agreement. There was no doubt
what the Soviets wished it to mean. On 22 January, Litvinov told Eden
that the only way to deter Germany was for all other nations to oppose it,
causing Sargent to note (to Collier™s irritation) that ˜M. Litvinoff advo-
cates the policy of encirclement pure and simple.™82 Five days later, the
French premier, Pierre-Etienne Flandin, told Eden of his desire to
improve both Franco-German and Anglo-French relations.83 A key
issue was ratification of the Franco-Soviet Agreement, which Flandin
was rushing through because, in its non-ratified form, it produced the
worst of both worlds: the irritation of Germany without the commitment
of Moscow to France.
Sargent still opposed ratification. He believed that it ˜may have such
far-reaching effects on our own policy and our own situation™ that it
should be delayed ˜until the European situation is somewhat clearer™. A
premature ratification might ˜strain™ Franco-German relations to such

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