The Defence of the Realm (30 page)

The MacDonald government as a whole began to take a more friendly view of domestic intelligence-gathering as a result of its early experience in grappling with labour unrest. MacDonald's very first cabinet meeting on 23 January had to discuss how to safeguard food, milk and coal supplies during a train drivers' strike. Over the next two months strikes, first of the dockers, then of London tramway workers, led to government plans to use the Emergency Powers Act, which had been violently denounced by Labour when it had been introduced by Lloyd George.
⁴³
On 15 April the cabinet appointed a five-man Committee on Industrial Unrest to inquire into the recent strike wave ‘with a view to ascertaining whether any appreciable percentage of the unfortunate aspects of these strikes was due to Communist activity'. Much of the evidence considered by the Committee came from intelligence supplied by the Special Branch, SIS and MI5. It included intercepted letters from British Communists, Comintern and the Red International of Labour Unions (RILU), minutes of the CPGB
Politburo and other Party committees, and reports from informers within the Communist Party and the trade unions. The Committee concluded that the CPGB regularly received both finance and instructions from Comintern and that Communists within the union movement similarly received finance and instructions from the RILU. There was also evidence of Communist involvement (with Comintern and RILU encouragement) in the recent strike wave. An intercepted ‘secret circular' of 18 February revealed that Harry Pollitt of the CPGB's Central Industrial Committee (and later the Party's general secretary) had instructed district Party committees that ‘anything coming to you from the British Bureau of the R.I.L.U. is to be acted upon in the same way as a Party communication.' Willie Gallacher, later Britain's longest-serving Communist MP, told his wife in an intercepted letter of 30 January that he had spent the whole of the previous day preparing reports on the strikes for Comintern. An intercepted letter from the Communist provisional secretary of the London Transport Workers Solidarity Committee, declared: ‘We must be prepared to sabotage.'
⁴⁴

The Industrial Unrest Committee concluded that, while the Communists had done their best to aggravate the recent strikes, they had played only a minor part in starting them. Despite ‘substantial assistance' from Comintern, the CPGB was ‘constantly in great financial difficulties'. Though the Party was ‘extremely active', its membership had fallen from a peak of 4,000–5,000 two years earlier. The Committee was, however, concerned by the evidence of ‘systematic instructions and plans . . . issued by the Communist Party' aimed at penetrating and taking over the unions. It believed that ‘responsible Trade Union leaders' should be shown this secret evidence ‘informally and confidentially'.
⁴⁵
On 15 May the report of the Industrial Unrest Committee was approved by the cabinet, which in effect thus sanctioned the interception of Communist and Comintern communications, accepted the authenticity of the intercepts, and decided ‘in favour of some form of publicity' for the intelligence derived from them.
⁴⁶

Britain's first Labour government lasted little more than nine months. No longer able to count on Liberal support, MacDonald called an election in October 1924. It was sadly ironic that Labour's election campaign should be disrupted by another intercepted Comintern communication, which became known as the ‘Zinoviev letter'. This time, however, the intercept was a fabrication. As in 1921, the flow of authentic intercepted correspondence and diplomatic decrypts in 1924 was polluted by forgeries – though on a much smaller scale. Like the bogus intercepts of 1921, the Zinoviev letter came from the SIS Reval station, which appears to have
been deceived once again by anti-Bolshevik White Russian forgers. Allegedly despatched by Zinoviev and two other members of the Comintern Executive Committee on 15 September 1924, the letter instructed the CPGB leadership to put pressure on their sympathizers in the Labour Party, to ‘strain every nerve' for the ratification of the recent treaty concluded by MacDonald's government with the Soviet Union, to intensify ‘agitationpropaganda work in the armed forces', and generally to prepare for the coming of the British revolution. On 9 October SIS forwarded copies to the Foreign Office, MI5, Scotland Yard and the service ministries, together with an ill-founded assurance that ‘the authenticity is undoubted'.
⁴⁷
The unauthorized publication of the letter in the Conservative
Daily Mail
on 25 October in the final week of the election campaign turned it into what MacDonald called a ‘political bomb', which those responsible intended to sabotage Labour's prospects of victory by suggesting that it was susceptible to Communist pressure.

The call in the Zinoviev letter for the CPGB to engage in ‘agitationpropaganda work in the armed forces' placed it squarely within MI5's sphere of action. Like others familiar with Comintern communications and Soviet intercepts, Kell was not surprised by the letter's contents, believing it ‘contained nothing new or different from the [known] intentions and propaganda of the USSR'.
⁴⁸
He had seen similar statements in authentic intercepted correspondence from Comintern to the CPGB and the National Minority Movement (the Communist-led trade union organization),
⁴⁹
and is likely – at least initially – to have had no difficulty in accepting SIS's assurance that the Zinoviev letter was genuine. The assurance, however, should never have been given. Outrageously, Desmond Morton of SIS told Sir Eyre Crowe, PUS at the Foreign Office, that one of Sir George Makgill's agents, ‘Jim Finney',
⁵⁰
who had penetrated the CPGB, had reported that a recent meeting of the Party Central Committee had considered a letter from Moscow whose instructions corresponded to those in the Zinoviev letter. On the basis of that information, Crowe had told MacDonald that he had heard on ‘absolutely reliable authority' that the letter had been discussed by the Party leadership. In reality, ‘Finney's' report of a discussion by the CPGB Executive made no mention of any letter from Moscow. MI5's own sources failed to corroborate SIS's claim that the letter had been received and discussed by the CPGB leadership – unsurprisingly, since the letter had never in fact been sent.
⁵¹

MI5 had little to do with the official handling of the Zinoviev letter, apart from distributing copies to army commands on 22 October 1924, no doubt to alert them to its call for subversion in the armed forces.
⁵²
The
possible unofficial role of a few MI5 officers past and present in publicizing the Zinoviev letter with the aim of ensuring Labour's defeat at the polls remains a murky area on which surviving Security Service archives shed little light. Other sources, however, provide some clues. A wartime MI5 officer, Donald Im Thurn (‘recreations: golf, football, cricket, hockey, fencing'), who had served in MI5 from December 1917 to June 1919, made strenuous attempts to ensure the publication of the Zinoviev letter and may well have alerted the
Mail
and Conservative Central Office to its existence. Im Thurn later claimed implausibly to have obtained a copy of the letter from a business friend with Communist contacts who subsequently had to flee to ‘a place of safety' because his life was in danger.
⁵³
This unlikely tale was probably invented to avoid compromising his intelligence contacts. After Im Thurn left the Service for the City in 1919, he continued to lunch regularly in the grill-room of the Hyde Park Hotel with Major William Alexander of B Branch (an Oxford graduate who had qualified as a barrister before the First World War). Im Thurn was also well acquainted with the Chief of SIS, Admiral Quex Sinclair. Though he was not shown the actual text of the Zinoviev letter before publication, one or more of his intelligence contacts briefed him on its contents. Alexander appears to have informed Im Thurn on 21 October that the text was about to be circulated to army commands. Suspicion also attaches to the role of the head of B Branch, Joseph Ball.
⁵⁴
Conservative Central Office, with which Ball had close contacts, probably had a copy of the Zinoviev letter by 22 October, three days before publication. Ball's subsequent lack of scruples in using intelligence for party-political advantage while at Central Office in the later 1920s
⁵⁵
strongly suggests, but does not prove, that he was willing to do so during the election campaign of October 1924. But Ball was not alone. Others involved in the publication of the Zinoviev letter probably included the former DNI, Admiral Blinker Hall, and Lieutenant Colonel Freddie Browning, Cumming's former deputy and a friend of both Hall and the editor of the
Mail.
⁵⁶
Hall and Browning, like Im Thurn, Alexander, Sinclair and Ball, were part of a deeply conservative, strongly patriotic establishment network who were accustomed to sharing state secrets between themselves: ‘Feeling themselves part of a special and closed community, they exchanged confidences secure in the knowledge, as they thought, that they were protected by that community from indiscretion.'
⁵⁷

Those who conspired together in October 1924 convinced themselves that they were acting in the national interest – to remove from power a government whose susceptibility to Soviet and pro-Soviet pressure made it a threat to national security. Though the Zinoviev letter was not the main
cause of the Tory election landslide on 29 October, many politicians on both left and right believed that it was.
⁵⁸
Lord Beaverbrook, owner of the
Daily Express
and
Evening Standard,
told his rival Lord Rothermere, proprietor of the
Daily Mail,
that the
Mail
's ‘Red Letter' campaign had won the election for the Conservatives. Rothermere immodestly agreed that he had won a hundred seats.
⁵⁹
Labour leaders were inclined to agree. They felt they had been tricked out of office. And their suspicions seemed to be confirmed when they discovered the part played by Conservative Central Office in the publication of the letter.

As prime minister, Ramsay MacDonald preferred to keep the intelligence agencies quite literally at arm's length. It is unlikely that he ever knowingly met any officer from either MI5 or SIS. When he finally decided to question the head of the SIS political section, Major Malcolm ‘Woolly' Woollcombe, about the Zinoviev letter in the aftermath of his election defeat before the formation of the second Baldwin Conservative government, MacDonald could not bring himself to conduct a face-to-face interview. Instead, Woollcombe was placed in a room adjoining MacDonald's at the Foreign Office while the PUS, Sir Eyre Crowe, positioned himself in the doorway between the two. The Prime Minister then addressed his questions to Woollcombe via Crowe, who reported the answers to MacDonald. At no point during these bizarre proceedings did Woollcombe catch sight of the Prime Minister.
⁶⁰

On 17 November ‘C', Admiral Sinclair, submitted to a cabinet committee of inquiry chaired by Austen Chamberlain, Foreign Secretary in Baldwin's incoming Conservative government, a document probably drafted by the SIS officer Desmond Morton which detailed ‘five very good reasons' – all since shown to be ‘misleading, if not downright false' – why the letter was genuine. On 19 November the committee declared itself ‘unanimously of opinion that there was no doubt as to authenticity of the letter'. Since the beginning of the month, however, reports had been arriving from SIS stations that the letter was a forgery, probably originating in the Baltic states. On 27 November Morton informed MI5 that ‘we are firmly convinced that this actual thing is a forgery.' Probably motivated chiefly by a desire to protect SIS's reputation, however, neither Sinclair nor Morton admitted as much to the Foreign Office.
⁶¹
A series of other undetected forgeries which appeared to provide corroboration subsequently strengthened their belief that it was genuine after all. On 16 December SIS circulated a fabricated set of Sovnarkom (Soviet government) minutes in which Chicherin was quoted as saying, ‘The original of the [Zinoviev] letter upon its receipt by the British Communist Party was destroyed by Comrade
Inkpin [the Party secretary general].'
⁶²
On 9 January 1925 Morton made the extraordinary claim to the Special Branch (and probably to MI5): ‘We now know the identity of every individual who handled [the letter] from the day the first person saw Zinoviev's copy to the day it reached us. With the exception of Zinoviev himself, they were all our agents.'
⁶³
Probably by now, certainly later, Con Boddington, the only MI5 officer who was also an undercover member of the Communist Party, knew that Morton's claim that the CPGB Central Committee had discussed a document corresponding to the Zinoviev letter was false. Boddington knew ‘Jim Finney',
⁶⁴
whom Morton gave as the source for this claim; he also knew that ‘Finney' had made no such report.
⁶⁵

Soon after Labour's election defeat in October 1924, MI5 began the long process of unravelling the first major Soviet espionage network to be detected in Britain. Its eventual success was due to a mixture of operational skill in deploying its slender resources and to the sometimes amateurish tradecraft of the network. The case started with a remarkably simple lead. An advertisement in the
Daily Herald
on 21 November 1924 announced: ‘Secret Service – Labour Group carrying out investigation would be glad to receive information and details from anyone who has ever had any association with any Secret Service Department or operation – Write in first instance Box 573, Daily Herald.' Correctly suspecting a Soviet or Comintern attempt to infiltrate British intelligence, Jasper Harker, head of B Branch, arranged for an agent, ‘D', to offer his services to Box 573 in the hope of penetrating the ‘Labour Group'. ‘D' received a reply signed ‘Q.X.' (later identified as William Norman Ewer, the foreign editor of the
Daily Herald
) but, though a meeting was arranged, ‘Q.X.' did not appear. The head of MI5's three-man Observation section, John Ottaway, who had been sent by Harker to keep the rendezvous for the meeting under surveillance, reported that while ‘D' waited for ‘Q.X.', he was kept under observation by a man he codenamed ‘A' (later discovered to be a former police officer, Walter Dale, working for Ewer's network).
⁶⁶
Next day ‘Q.X.' contacted ‘D', offered ‘sincere apologies' for failing to turn up, and arranged another meeting at which he questioned ‘D' about the working of the secret service and its use of agents inside the labour movement. He also revealed plans for the labour movement to set up a secret service of its own to defend itself against that of the government. Following ‘D's' meeting with ‘Q.X.', MI5 obtained an HOW to intercept the correspondence of Box 573 at the
Daily Herald.
⁶⁷