Carroll was born in Weedon Bec, Northamptonshire, to William and Catherine Carroll. His Roman Catholic parents named him after then-Pope Leo XIII. In 1897, his family lived in York, where his Irish-born father was a foreman in an ordnance store. In the 1901 Census for West Ham, Essex, his occupation is listed as "wine trade clerk". In the 1911 census, he is living at the same address and described as a "dramatic agent". Carroll made his stage debut in 1912. His acting career was on hold during the First World War, when he served in the British Army. He then performed in London and on Broadway in New York. In 1933, he was a member of the Manhattan Theatre Repertory Company in the inaugural season of the Ogunquit Playhouse in Ogunquit, Maine. During 1933-34 Carroll had an important role in a successful Broadway play, The Green Bay Tree (which has no relation to the novel by Louis Bromfield apart from the shared title), and in 1941 starred with Vincent Price and Judith Evelyn in Patrick Hamilton's Angel Street (better known as Gas Light), which ran for three years at the Golden Theatre on West 45th Street in New York City. After the production closed, he starred in the title role in J. P. Marquand's The Late George Apley.
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