British Blacklists in Spain during the First World War: The Spanish Case Study as a Belligerent Battlefield

Consulates in the Spanish Levante

In December 1914 French and British consular representatives were more concerned by the strength of German commerce in the Spanish Levante than by the supposed enemy blocking of the Gibraltar naval base. Between January and May 1915 the commercial departments received a significant amount of information from the south of Spain about the activities of German residents. On 19 April 1915 the French consul in Malaga, Louis Santi, stressed to the Directorate of Foreign and Commercial Affairs the need to take action against the great number of agents from enemy countries that were operating along the Spanish coast between Huelva and Cartagena. ²¹ In fact they were Spanish citizens whose surnames may have gone back three generations, and many of them did not even speak German. In the same vein, Santi’s British counterpart in Malaga, Henry Montagu Villiers, also set to work, instituting a series of proceedings affecting this group. In Almeria, for example, the vice consul John Murison had discovered an illegal traffic in small quantities of wolfram, which were sent to Holland in barrels supposedly meant for the transport of grapes. ²² The accumulation of hundreds of barrels for weeks in the port of Almeria, as a direct result of the hostilities, made it easy to get hold of the barrels, to falsify their labels and so use them for the distribution of other products. Personnel from the Department of Naval Intelligence were requested to come and investigate this enemy network of illegal trade from Spain; among them were the famous novelist and member of the Royal Marines, Alfred Edward Woodley Mason.

The war might offer certain opportunities for the enemy in Spain, and what happened in Almeria meant that it was necessary to investigate not only what was transported and by whom, but above all where it was sent. Between January and May 1915 a monthly export of 200 tons of olive oil had been recorded from Malaga to the Italian ports of Oneglia and Porto Maurizio. ²³ In addition there was an increase in demand for the product in France (via Sète and Marseilles) and the United States (via New York). Particularly striking was the case of fruit. Massive quantities of almonds, raisins, and wine left the ports of the Malaga district for other neutral states in northern Europe, in the build-up of commercial relations with Scandinavia and the Netherlands. The most frequent destinations were in Denmark (Copenhagen, Odense, Kolding, and Aarhus), Sweden (Stockholm, Gothenburg, Halmstad, Malmö, and Helsingborg), Norway (Christiania/Oslo, Ålesund, Trondheim, Stavanger, Bergen, and Bodø), and the Netherlands (mainly Amsterdam). Clearly, this phenomenon could not simply be explained by the distortion of the markets and international trade brought about by the suppression of supply from the warring states. Specifically, the inclusion of figs in the diet of the soldiers, and the high content of glyceride compounds in olive oil and their chemical use in the manufacture of nitroglycerine, encouraged the representatives of the Entente to begin to take action. Fruit exporting and oil manufacture were local businesses whose products might fall into the category of contraband. ²⁴

In late March 1915 the British foreign secretary, Sir Edward Grey, instructed consuls in Malaga and Barcelona to maximize the surveillance of items likely to follow the route via Italy and Switzerland to Austria-Hungary and Germany. ²⁵ The Malaga office was noted for its initiative in investigating firms engaged in that kind of traffic. In December 1915 distributors of agricultural food products operating in the district were included in what could be considered a de facto blacklist, including Baquera, Kusche & Martin, Garret & Co., Federico Gross & Cía, Heinsdorf & Lemke, Loos & Gompels, Petersen & Co., Rein & Co., Scholz Brothers, and Torres Roybon. ²⁶ Upon the recommendation of the consular office, companies began to suffer precautionary measures, such as the termination of British coal supplies from local agents and, later, the paralysis of the credit that financed trade with Scandinavia. After consideration of each case by the relevant committee of the Foreign Trade Department, numerous contracts were terminated because the payments for these transactions were made to order via deposits in the London Joint Stock Bank. However, the withdrawal of banking facilities by the cancellation of accounts or the freezing of deposits would generate considerable controversy, and not only in Spain. Walter Cunliffe, governor of the Bank of England, was not always in favour of such interventions in the financial system, as he made clear on 23 May 1916 to the commercial department of the Foreign Office. ²⁷ As reinforcement, the French also froze the channels of credit.

The reservations of the Bank of England had a legal basis, since there was no express provision for the inclusion of some of the companies affected in the Class A/Consolidated List. In fact those reservations went beyond legal niceties. There were three types of blacklist: A, firms with which no trade should be done; B, highly suspect firms; C, firms that required watching. This precautionary classification was maintained when the blacklist became the Statutory List in February 1916. Several businesses in Malaga found themselves legally defenceless. The protests of the local business media were therefore not long in appearing. Throughout 1916 La Defensa, one of the Spanish publications to enter the blacklists as Germanophile, carried on an intensive campaign against the British consul. Furthermore, the lists could be legally binding only on British citizens. In practice Villiers was trying to make the bans on trade binding on local firms. He was accused of coercing the owners of shipping companies, coal shippers, and agricultural and food distributors so that they would breach their obligations to the banned companies, all to the benefit of his British compatriots. ²⁸ One of the export companies that benefited most from the new situation in the Spanish Levante proved to be Thornton y Cía, owned by the British vice consul in Malaga. ²⁹

Thanks to media pressure and the mediation of the Spanish Ministry of State, some of the businesses affected were able to have the financial restrictions partially lifted. Despite the protests of the Spanish government, British representatives in Spain – whether consular service personnel, agents of Lloyds of London, or Gibraltar naval authorities – continued to interfere with all Spanish shipping companies in order to make them yield to their demands, particularly in relation to the portfolios of clients and the distribution of tonnage. For the companies, at stake was not only the supply of coal but also the ability to emerge unscathed from the naval searches made   by Gibraltar patrol vessels. In 1915 companies such as Transatlántica or Ybarra took several complaints to the Ministry of State for this reason. ³⁰ In the face of criticism from the Spanish authorities and the Spanish press, Villiers himself reminded the ambassador in Madrid, Sir Arthur Hardinge, that consuls were only a means to an end that, despite the legal ambiguity, was covered by the offices in London. After the war Villiers stated that ‘compiling and amending this Black List was arduous and very exacting work for British consuls’. ³¹ But in his case the collateral and bilateral problems of the implementation of the bans were handsomely offset by their virtual profits.

However, not all consuls shared this unwavering enthusiasm for the policy, with its dubious legal cover. Among the less enthusiastic was the consul general in Barcelona himself, Charles Smith, who had jurisdiction over the ports of Alicante, Valencia, and Palma de Mallorca. As in the district of Malaga, trade statistics provided by the Spanish customs authorities and processed by the consulate staff put the focus on the true destination of exports through the ports of the Mediterranean to France and Italy. Cargoes of olive oil, lead, manganese, and copper came by coastal shipping to the port of Barcelona for re-export. In 1915 the process of gathering and organizing trade information monopolized much of the human and financial resources of the consulate in the city. That year Smith maintained a constant flow of letters to the ambassador and the foreign secretary asking for more resources, as well as for precise instructions on procedures to be followed with companies. ³² The consulate in Barcelona decided to apply a policy guaranteeing the rights of the Spanish companies. Staff answered queries issued by their superiors at the Foreign Office and Board of Trade. But Smith’s low level of activity continued. In fact the Committee on Restriction of Enemy Supplies considered reports coming from Spain to be meagre. ³³ This was a period in which Villiers’s office became the most active source of information on the traffic in transit from Spain via Barcelona to Italy.

There is no doubt that the perception of the German threat in the trade area played an important role in the early stages of embargoes (OED) imposed in the Spanish Levante. However, between 1915 and 1916 there was some inconsistency in the application of sanctions against companies at a local level, depending fundamentally on consular initiatives. Would the same thing happen in other areas of activity or business? Would the idea of enemy danger have the same influence? In answering these questions, the following section contrasts the Spanish Levante with the experience in the western districts of Spain, closely linked to mining interests, which were practically ‘colonized’ by the Allies.

A particular case study: western mining districts

One area vital to British interests was the Cantabrian coast. The consolidated monopoly over the industrial and financial heart of Bilbao led from the start of the war to, if anything, tighter controls than those which were already imposed on Spanish production and trade. Prices for the trade of coal and iron ore with Britain were imposed to such an extent on carriers that they chose to lease their vessels directly to the British. Among them were important firms such as Altos Hornos, Sota y Aznar, or Orconera Iron Ore. Simultaneously, a lengthy legal process started in London for the sale of the Orconera shares owned by Friedrich Krupp. ³⁴

In this area the only real threat from the enemy was attempts by German submarines to interrupt naval communication channels between Bilbao and Wales. It is precisely here where blacklists came into play, with special features regarding their implementation in Spain. As the maritime aspect of the blockade became more important, supervision of commercial activities fell to a member of the Naval Intelligence Department in Spain, Lieutenant Albert E. Dawson of the Royal Naval Volunteer Reserve. He was also acting, interestingly enough, as the vice consul for trade in Bilbao. ³⁵ Hence, from the outset individuals were blacklisted who were suspected of involvement in the network providing fuel and supplies to German submarines. One of Dawson’s main objectives was to deny the Germans access both to the boats and to local stores of fuel and other oil products.

Commercial intelligence in northern Spain had a special character, as priority was given to military and strategic considerations. More interesting was the introduction of blacklisting to the districts of the south-western ferro-pyrite belt, where they acquired greater importance as an instrument of commercial interference. It was precisely these which would have a more direct effect on inter-Allied relations.

On 22 December 1914 the French consular agent in Huelva, Monsieur Marchal, had suggested that it would be appropriate to include pyrites as war contraband in the Journal Officiel. Until that point Marchal had confined himself to providing information about the German engineers hired by consortiums with British capital in the area. However, the French blacklisting of individuals soon spread to the companies that employed them. The main consortiums involved were British (Peña de Hierro Copper Mines, San Miguel Company, and the United Alkali Company), since the introduction of British capital in this sector had generally taken place with the cooperation of German technology. All these companies found themselves threatened with the loss of their licences to export copper to Marseilles. ³⁶

For this reason the consul general in Seville, Arthur L. Keyser, advised the Foreign Office on the wisdom of dismissing from the British companies any employee of enemy nationality and any Spaniards of dubious sympathies. The war was not an issue as remote from Spain as some managers in London believed. The prevention of sabotage, coinciding with the early submarine campaign in the North Atlantic, gave the consul another persuasive argument. Those employees could report to enemy spies the dates of departure of ore from Huelva, the names of the ships carrying it, their routes to its final destination. After sending a report to the Intelligence Division of the Admiralty, Keyser knocked on the doors of the managers of the companies concerned in order to make them give in to the new conditions regarding their staff. ³⁷ After overcoming protests such as ‘as it would be bad for business to quarrel with him’, he succeeded in having the manager of Peña and San Miguel, the German Ludvig Linnartz, replaced by his vice consul in Huelva, Alfred Attwood. ³⁸ This operation was repeated with other companies under identical conditions in autumn 1915. Allan Henderson, vice consul in Seville, would play the same role as Attwood by substituting individuals of enemy nationality at the head of their management.

Having overcome that initial hurdle, the tight British control over both the production and marketing of pyrites was guaranteed by the all-powerful Rio Tinto Co. However, we may wonder about the reasons surrounding the early and determined French interest in the use of legislation to curb contraband in a sector dominated in terms of production and distribution by Allied interests. In this respect a memorandum prepared by the French National Office for Trade in July 1915 called for an effort to achieve a change in the structure of the world market of pyrites. According to a report of the special envoy to Spain, Marius André, the French seemed to be unaware of the existence of average exports of 3,000,000 tonnes of iron with an annual value of 30,000,000 francs. Of these, 350,000 tonnes belonged to the Société française des Pyrites de Huelva. However, the French merchant fleet hardly benefited from the 3,500,000 francs represented by the transport of this share of the production. Statistics were quite conclusive on this point. In 1913 the pyrites loaded from Huelva and bound for France, Algeria, and Tunisia had been transported in 87 Spanish ships, 9 British, 8 Italian, 2 German, 2 Danish, 5 Norwegian, and 5 French. From this point of view the financial structure of the Spanish merchant fleet gave an overwhelming advantage to the British, and the withdrawal of export licences could therefore be an instrument to enable the French to challenge British hegemony. ³⁹

Within the context of the war, exhortations to commercial patriotism fell on very favourable ground with certain sectors of the French business community in Spain, to such an extent that the German threat was diluted by the intensity of the Allied commercial rivalry. They may have been associates in war but they were adversaries in peace. Nonetheless, German targets remained a priority, as the letters exchanged between the French consular agent in Huelva and the president of the Chamber of Commerce of Limoges reveal:

It is important to substitute, wherever possible, German trade for the French. Although the fight is already harsh, I have no doubt that, if our efforts are united, progress will be quickly made in advantage of French industries and commerce. We should not overlook new sources of wealth. The French Government has not entrusted me to find the ways to that purpose but, if we work to promote trade in Huelva, the sources for national wealth will certainly be increased. At the same time, we will be attending to the wishes of the French companies and individuals located in this province. ⁴⁰

Clearly, in the absence of Germany, the British were the principal and immediate competitors for the French. Precisely in order to promote the interests of national trade, in September 1915 the French proposed to create a regular sailing route between Huelva and Marseilles. ⁴¹ However, in order to cover the needs of wartime industry, cooperation with the British was necessary. Under these circumstances, the French were obliged to set aside the nationalist argument as unfeasible. The opportunity proved very different for British interests.

The nationalist alibi in the south

In 1916 the extension of British lists in Spanish commercial districts, especially in the south-east where they had been introduced under strong consular pressure, clearly showed how strong a motivation local commercial rivalries were in international war. In many cases the harassment of interests allegedly in enemy hands was a convenient pretext for undermining the more advantageous positions of competitors, regardless of their nationality and allegiance to one side or the other. The French tried it in the south-west, and the British would follow suit.

On 19 February 1916 Villiers informed Hardinge of the opportunities presented by blacklists in Malaga’s trade in oxides: ‘Moreover, when war is over and Germany requires large supplies of red oxide there will only be one German factory in Malaga, instead of two, and the best supplies of crude ore will already be under our control.’ ⁴² The British hoped to move into a sector where the French and Belgians were well placed, with the Sociedad Anónima Española Metalúrgica-Minera (Société Anonyme des Hauts Fourneaux, Forges & Aciéries). The blacklists seemed to be an ideal instrument to achieve this objective. One example of this exploitation of the blacklists can be seen in what happened with the factory of Carlos Ayasse. He was a Spanish factory owner of central European descent who decided to transfer his business in 1916 when faced with the impossibility of obtaining suppliers of coal after the blockade. One of the members of the Patriotic League in Malaga, Lancelot Colvile, offered to buy the factory with a mixture of Spanish and British capital. If he controlled the factory, he would be able to supply the British lead producer, Sopwith Lead Co., on more competitive terms. However, Colvile was not the only party interested in making an offer to buy out Ayasse. In no time Colvile’s competitors were recommended for inclusion in the blacklist. ⁴³ Without guaranteed supplies of British coal, the purchase of the factory would make no sense.

The policy of transfers promoted by Villiers, and warmly welcomed by his compatriots, produced results. In September 1916 British demand already absorbed 89.66% of the local production of oxides, as against the 57.74% share of December 1915. ⁴⁴ The bans were not only an effective weapon but also an extremely flexible one to promote specific or general British interests, as each case required. Their implementation usually depended on the correlation of forces involved at the local level. One of the most significant examples of how this political dynamic played out locally is provided by what happened with La Compañía Sevillana de Electricidad, which in theory met all the requirements for appearing on a blacklist. ⁴⁵ The ban was therefore removed, in spite of the fact that its director general, Otto Engelhardt, had been acting as consul and head of German espionage in western Andalusia. ⁴⁶ The independence of the electric company from British imports of coal, and its position as a supplier to the British companies the Seville Water Works and the Seville Sulphur & Copper Co. Ltd, made it advisable to adopt a policy quite different from that followed with the German electricity company AEG in the rest of Spain. On 8 May1916 distinguished members of the British colony in Seville argued as follows to their consul general: ‘Thus it might seem an unnecessarily provocative act to attract attention by placing the name of this firm on the Black List.’ ⁴⁷ One of the opinions which carried most weight in this regard was that of John MacDougall, owner of a pottery factory in the municipality of San Juan de Aznalfarache, and director of the Seville Sulphur & Copper Co. Personal interests led British representatives to choose an alternative channel of intervention. ⁴⁸

These examples show the flexibility of the British system, even though the use of the dreaded blacklist would also entail certain disadvantages for the British. This was particularly the case for the legitimacy of the Allied cause in Spain. Given this kind of casuistry, it was common to hear talk of the British ‘blacklist business’, in which German propaganda found a particularly fertile field to win over Spanish public opinion. Among the press La Defensa was one of the most outspoken and hostile towards what it considered the abuse of blacklists on the hardest-hit commercial communities, such as that of Malaga:

‘Move over and let me in.’ What does the Government think of this? Do we Spaniards not deserve a little more respect from the Consular Gentlemen of the Entente, or shall we see the fulfilment of the proverb ‘De la calle vendrá quien de tu casa te echará’ (‘The one who throws you out of your home will come from outside’)? ⁴⁹

For the Italian vice consul in Malaga, Giovanni di Modica, the blacklists did not reflect favourably on the image of the Allies. ⁵⁰ This opinion was not shared by the French, who in an assessment commissioned by the Army General Staff on the work of Allied propaganda wrote the following: ‘The blacklist is our best propaganda in Spain.’ ⁵¹ Of course, the consequences of the bans provided a convincing argument to discourage cooperation with German agents in Spain.

In any case, the British knew that, quite apart from the propaganda use that could be made of their lists, excessive pressure on the markets might also prove to be counterproductive in economic terms. As early as 1915 members of the consular service expressed their concern about the substitution of imports being detected in the energy sector: when coal supplies were withdrawn from embargoed companies, alternatives were found. ⁵² The consul general in Seville expressed himself in those terms on 22 October 1915, addressing a British wholesaler:

We do not know what may happen after the war but for the present it is necessary to keep off the American coal at all costs as, once they get in and find the stuff is really very good, there may be great difficulty in ousting them. ⁵³

The US government had been negotiating bilaterally with the Spanish administration for the abolition of the customs barriers that taxed the importation of coal and achieved the abolition of the transport tax in April 1915.

In the same context the importation of cotton to Barcelona had already given a dramatic example of some of the problems generated by American competition. The supply of American cotton in the market mitigated the effects of the withdrawal of British import licences on the textile industry. In 1916 the port of Barcelona received 5,016,000 bales of Indian cotton which, together with 735,000 from Egypt, fell far short of 12,938,000 bales imported from the United States. ⁵⁴ The consul general in Barcelona, Charles Smith, warned that the same could happen with coal.

However, despite the most pessimistic forecasts, the relative positions held by the British and Americans in the Spanish energy market were far apart. In general the American supply of coal in Spain remained stationary. In addition, the decrees issued by the Spanish government to regulate the shipping of wheat and coal in March 1916 put imports from Britain back on more competitive terms. ⁵⁵ Two important factors enabled the British to outdo the Americans. First of all the British enjoyed the support of the Spanish government. Secondly, the robustness of the British monopoly which controlled the channels of import and distribution, in addition to the greater part of the necessary productive network, was no match for the Americans. British consular representatives maintained their capacity to intervene through the office of naval transport and through the supply of coal from approved agents.