The Defence of the Realm (21 page)

He has traced direct payments from Germany to three workers and also discovered that . . . the man who is financing the Clyde workers . . . has a daughter married in Germany, a son married to a German and his chief business is in Germany. He is evidently on the track of a very successful revelation.
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Macassey's reports prompted the Ministry of Munitions to found an intelligence service of its own (later known as PMS2). In February 1916 Kell provided the Ministry with a ‘nucleus' of MI5 officers under Colonel Frank Labouchere to monitor aliens and labour unrest. Labouchere, who had been educated at Charterhouse and Geneva University, combined, like Kell, Ferguson and other MI5 officers, a liking for outdoor pursuits (chief among them fly-fishing and stalking) with an aptitude for languages. As well as German (the language most relevant to his investigation of possible enemy-financed subversion), he spoke French, Dutch and Persian.
⁶⁹
To Macassey's extreme annoyance, his own intelligence service, of which he was inordinately proud, was taken over by Labouchere.
⁷⁰

Addison later wrote in his memoirs, ‘There never was any evidence' of German involvement in the labour troubles.
⁷¹
At the time, however, there was indeed evidence, even if it later turned out to be unreliable. On 16 September Cumming sent Kell a report on intelligence from Berlin: ‘Last week Persian Bank and other Banks completed arrangements for export of 800,000 marks in foreign currency to various centres outside Germany. It is reported that of the above sum about 250,000 marks are destined for labour agitation in England.'
⁷²
Even if Cumming's intelligence was correct, it is almost certain that the money never reached England. Addison, however, was dissatisfied with PMS2's investigations into labour unrest and in December 1916, in a clear snub to Kell, asked Basil Thomson ‘to undertake the whole of the intelligence service on labour matters for the whole country'. Thomson agreed, drafted twelve sergeants from the
CID into the Ministry, and was given an annual budget of £8,000 a year to run the new intelligence system. In April 1917, the administrative staff of the out-of-favour PMS2 were formally ‘reabsorbed' by MI5.
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Kell, however, made clear that he did not want back officers who had been ‘concerned with labour unrest and strikes',
⁷⁴
and Labouchere did not return to MI5.
⁷⁵

For much of 1916 police reports on both the Communist Club and the German-born habitués of the Diamond Reign public house tended to be reassuring. MI5 regarded the reports as seriously misleading and blamed them on corruption in the Met: ‘The Germans were confident they could bribe the police . . .' In November 1916, as a result of G1 investigations, the Communist Club was raided and twenty-two of its members of various nationalities recommended for internment. The Home Secretary agreed to the internment of seventeen.
⁷⁶
By this time MI5 had its own informant in the Club. Kell was deeply disturbed by what he and other sources revealed. The purpose of the Club, he reported in January 1917, was ‘the hampering by all possible means (e.g. by anti-recruiting propaganda, fomentation of strikes etc) of the Execution of the War in the present crisis'. Kell was also deeply concerned by the activities of Chicherin's Russian Political Prisoners and Exiles Relief Committee:

Perhaps the greatest immediate danger arises from the instigation of enmity to the British Government on the part of the thousands of immigrants and refugees from Russia (and their offspring) now in this country . . . That the active enmity thus engendered may be cunningly manipulated at some opportune time by Germany very considerably adds to the danger of the moment.
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By the time he wrote these memoranda, Kell seems to have been under considerable strain, his asthma worsened by stress and long hours in the office. Like Cumming, he was still hard at work on Christmas Day 1916. In the course of that day Kell called on Cumming for ‘a long yarn', and tried to persuade him to send a liaison officer to MI5. With his own staff already overstretched, Cumming was not persuaded.
⁷⁸
Kell must also have been frustrated by his failure in January 1917 to persuade the Home Secretary to intern Chicherin, who, he reported, ‘has openly expressed anti-British sentiments, and has freely associated on intimate terms with Germans and pro-Germans'.
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Early in 1917, Kell's worsening asthma forced him to give up the family's much loved country home at Weybridge in Surrey, whose large garden contained 400 rose trees and a grass tennis court, and move to a house at Campden Hill in London, closer to his office. The move, on a snowy day,
did not go well. The last furniture van, which also contained the maids and what Constance Kell called the ‘livestock' – ‘our beloved Scottie dog, the cat and the parrot' – skidded off the road into a shop window and ‘slung the parrot cage through it, the screeching bird adding to the confusion'.
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Soon afterwards, Kell was forced to take sick leave.
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His dismay at having temporarily to give up his role as MI5 director no doubt explains why this and two later periods of sick leave are, unusually, not noted in his record of service. During his first sick leave early in 1917 he seems to have suspected the head of G Branch (investigations), Reginald ‘Duck' Drake, the longest-serving officer in MI5 (apart from Kell), of plotting to replace him. Though actual details of the quarrel do not survive, Kell said later that he became ‘convinced that [Drake] was not playing the game'.
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In March Drake left for GHQ in France, where he was responsible for gathering intelligence behind the German lines.
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The spring of 1917 saw major crises on both the Eastern and Western Fronts. The shockwaves from the Russian Revolution which overthrew the Tsar in March 1917 (in the Russian calendar, the ‘February Revolution') created fears in the Lloyd George government, which had taken power three months earlier, that revolutionary agitators were out to undermine the British war effort. These fears were strengthened when the MPs and the National Council of the ILP acclaimed ‘the magnificent achievement of the Russian people' as a step towards ‘the coming of peace, based not on the dominance of militarists and diplomats, but on democracy and justice'.
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For an assessment of the threat, the War Cabinet turned first to Basil Thomson rather than to Kell. At a Home Office conference on 5 April Thomson found ‘a good deal of ignorant alarmism, especially among the generals present', and was instructed to prepare intelligence reports on ‘the growth of anarchist and socialist movements and their influence on the strike'.
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Though the United States entered the war on 6 April, it was over a year before its forces arrived in sufficient numbers to help turn the tide of war on the Western Front. In the spring of 1917 the French Commander in Chief, General Robert Nivelle, produced a plan for a lightning offensive to win a quick victory which seduced not merely the French cabinet but, more surprisingly, Lloyd George, who was usually sceptical of the claims of generals. Ignoring the lessons of the deadlock of the past two years of trench warfare, Nivelle rashly promised a victory which would be ‘certain, swift and small in cost': ‘One and a half million Frenchmen cannot fail.' The offensive began in April and continued for three weeks but did not achieve a breakthrough and was followed by full-scale mutiny.
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Faced with the threatened collapse of the French as well as the Russian will to fight on, some ministers feared that the British war effort was also under threat. Lord Milner, next to Lloyd George the most influential voice in the War Cabinet, wrote to the Prime Minister on 1 June 1917: ‘I fear the time is very near at hand when we shall have to take some strong steps to stop the “rot” in this country, unless we wish to “follow Russia” into impotence and dissolution.' But the ‘rot' continued. Two days later the ILP and the smaller Marxist British Socialist Party (BSP) convened a conference at Leeds to honour the Russian Revolution. The conference endorsed the demand by the Russian provisional government for ‘peace without annexations or indemnities', told the British government to demand the same, and called for British workers' and soldiers' councils on the Soviet model.
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MI5 had been intercepting BSP correspondence for the past two years, reporting in October 1916 that the Party and its general secretary, Albert Edward Inkpin, were ‘violently pro-German'.
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Victor Ferguson, who led MI5 investigations of anti-war movements, noted the following information on Inkpin given him by a former leading member of the BSP, Victor Fisher, who had turned against Inkpin because of his opposition to the war: ‘?German blood. Has a brother (Christian name unknown) and both are violently pro-German. Funds from German sources may possibly filter through him. Very clever. His influence succeeded in carrying over [BSP] Executive to pro-Germanism . . .'
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It is highly unlikely that Inkpin did receive money from German sources. Rather than being pro-German, he was passionately anti-war.
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Inkpin had not been called up for military service, on the grounds that his leadership of a political party was work in the ‘national interest'. MI5 had originally approved of the decision on the grounds that it deprived Inkpin of the opportunity to spread sedition in the armed forces. In the aftermath of the Bolshevik Revolution, Kell changed his mind and tried unsuccessfully to have Inkpin's exemption from conscription removed.
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Inkpin went on to become first general secretary of the Communist Party of Great Britain (CPGB) in 1920; together with Lenin, Trotsky and other Communist leaders, he was elected one of the presidents of the Communist International (Comintern).
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The most successful German subversion operation of the war was to transport Lenin back to Petrograd (‘like a plague bacillus', said Churchill) in a ‘sealed' train from exile in Switzerland in the spring of 1917. Lenin's ‘revolutionary defeatism' was tantamount to acceptance of German victory. Cumming passed on to MI5 a report from an agent in Berne that the Germans had required Lenin to give a guarantee that all his fellow revolutionaries on the train were ‘partisans of an immediate peace'.
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The detailed regulations, covering such issues as smoking and the use of lavatories, which Lenin imposed upon his fellow travellers, gave an early indication of the authoritarian one-party state which he was later to create in Russia.
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On 3 April (16 April by the Western calendar) Lenin arrived to a theatrical reception in Petrograd, though the band, presumably because it had brought the wrong music, played the French national anthem instead of the ‘Internationale'. Next day a German representative in Stockholm cabled Berlin: ‘Lenin's entry into Russia successful. He is working exactly as we wish.'
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Lenin dismissed any suggestion that he should have turned down the offer of German help as ‘silly bourgeois prejudices': ‘If the German capitalists are so stupid as to take us over to Russia, that's their funeral.' Rumours inevitably circulated, however, that he was a German spy and they were unreliably confirmed by a Russian officer who claimed to have been told so by his German captors when a prisoner of war. On 6 July the Justice Ministry of the Russian Provisional Government ordered Lenin's arrest on a charge of high treason. Lenin was forced to shave off his beard, disguise himself as a worker and take temporary refuge in Finland.
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‘We understand', noted Major Claude Dansey of E Branch in August, ‘that the Russian General Staff have proof now of Lenin's guilt.'
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Given the priority which Germany gave to assisting the Bolsheviks to undermine the Russian war effort, it was reasonable – though, as it later turned out, mistaken – for MI5 to believe that it was also assisting the Bolsheviks' British sympathizers. Russian ‘proof' that Lenin was in the pay of the Germans encouraged the belief that German money was also subsidizing British Bolshevism. The most dangerous Bolshevik in Britain, MI5 believed, was Georgi Chicherin, a committed supporter of Lenin's ‘revolutionary defeatism'. Having pressed unsuccessfully for his internment in January 1917, MI5 did so successfully in August on the grounds:

(1)  That he is of hostile associations by reason of his associations with Germans and pro-Germans at the Communist Club . . .

(2)  That having regard to his anti-ally and pro-German activities and sentiments, he is a danger to the public safety and the defence of the Realm
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In his unsuccessful appeal against internment, Chicherin made one potentially embarrassing charge. Claiming that he had been mandated by the Russian Provisional Government to investigate relations between the Tsarist Okhrana and Scotland Yard, he accused the British government of preventing his inquiry in order to conceal ‘dark doings' of the Okhrana.
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There were indeed potential embarrassments to be uncovered – not least the past dealings between MI5's chief detective William Melville (who
retired a few months later and died early in the following year) and the unscrupulous Okhrana chief, Pyotr Rachkovsky.
¹⁰⁰

The growing evidence from France that Germany was financing opposition to the war strengthened fears that it was doing so in Britain. On 15 May Raoul Duval, a director of the left-wing newspaper
Bonnet Rouge
, notorious for its defeatism, was caught returning from Switzerland with a large cheque from a German banker. He was later found guilty of treason and executed. In August the editor of the
Bonnet Rouge
, Miguel Almereyda, committed suicide in prison. Georges Clemenceau, soon to become French prime minister, claimed that the refusal of the Interior Minister, Louis Malvy, to prosecute Almereyda and other defeatists had led to the army mutinies. Malvy was later found guilty of ‘culpable negligence in the discharge of his duties' and sentenced to five years' exile. The former radical Prime Minister Joseph Caillaux, who had given financial support to the
Bonnet Rouge
before the war, was also arrested. The British ambassador reported that Clemenceau hoped he would be shot. (In a post-war trial he was found guilty of treason ‘with extenuating circumstances'.)
¹⁰¹