The Defence of the Realm (32 page)

It became abundantly clear that for the past ten years, any information regarding subversive organisation and individuals supplied to Scotland Yard by SIS or MI5, which had become the subject of Special Branch enquiry, would have to be regarded as having been betrayed to Ewer's group.
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Ewer went to live abroad in 1928.
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Inspector Ginhoven and Sergeant Jane were dismissed from the Special Branch after a disciplinary board of inquiry in May 1929.
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At the time of Ginhoven's and Jane's dismissal, MI5 had a total of only thirteen officers.
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Its resolution of the Ewer case with such slender resources was a considerable achievement.

Despite the risk that a trial would reveal intelligence techniques, SIS and probably MI5 were uneasy at the decision of the Attorney General not to prosecute Ewer, Ginhoven, Jane or any of their associates.
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Within MI5, the decision not to prosecute was believed to have been taken on political grounds. According to a later diary entry by Guy Liddell, ‘The general belief is that it was thought to be bad politics to have a show-down which might lead to the cry: “Another Zinoviev letter!”'
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Because 1929 was election year, ‘it was felt generally that another Zinoviev letter incident
should be avoided.'
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A trial would have provoked heated political controversy over the role of John ‘Jack' Hayes, a former police officer and organizer of the 1919 police strike who had been elected as a Labour MP in 1923 and was re-elected in 1929. Trial evidence would have revealed that Hayes had run a detective service for Ewer and introduced him to both Allen and Ginhoven. He went on to become a parliamentary private secretary in the first MacDonald government of 1924, and in June 1929 attained ministerial office in the second MacDonald government as vice chamberlain for the Royal Household.
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MI5 was doubtless right to believe that, if Ginhoven and Jane had been prosecuted, the references to Hayes during their trial would have revived the political passions aroused five years earlier by the Zinoviev letter.

Despite the fact that the Ewer case did not lead to prosecution, it marked a turning point in MI5 history. The discovery that the Special Branch had been penetrated by Soviet intelligence helped to prompt transfer from it to MI5 in 1931 of responsibility for countering civil as well as military Communist subversion.
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1
A one-time pad is an encryption system which uses once only a randomly generated private key known only to the sender and receiver of the message.

2

The Red Menace in the 1930s

Midway between the wars, Comintern was visibly cross with the CPGB. British Communist leaders, it complained, showed inadequate enthusiasm for denouncing the heresies of the non-Stalinist left. A prominent Comintern bureaucrat protested in 1929:

How does it happen that all the fundamental problems of the Communist International fail to stir our fraternal British party? . . . All these problems have the appearance of being forcibly injected into the activities of the British Communist Party . . . In the British party there is a sort of special system which may be characterised thus: the party is a society of great friends.

At the end of 1929 Comintern ousted the ‘great friends' from office and imposed a new leadership on the submissive CPGB. At Moscow's insistence, Harry Pollitt, the new general secretary, abandoned all attempt to reach an accommodation with the ‘class enemies' of the Labour Party. During 1930 the CPGB dutifully, if absurdly, denounced Ramsay Mac-Donald's second Labour government as ‘social-Fascist', though the Communist National Minority Movement in the trade unions continued to be publicly accused by Moscow of ‘right opportunist errors'. CPGB membership more than doubled from 2,550 at the end of 1930 to over 6,000 a year – later though as a result of the onset of the Depression and mass unemployment rather than of the policies imposed by Comintern. The Party failed, however, to make significant political capital from the resignation of the Labour government in August 1931, the split in the Labour Party and the formation of a coalition National Government with Ramsay Mac-Donald remaining as prime minister and denounced as a traitor by many of his former colleagues. The CPGB's political weakness was vividly demonstrated at the general election in October when its twenty-six candidates won a total of only 75,000 votes and not a single seat (in stark contrast to the 14 million votes cast for the National Government and the 6.5 million for the ‘social-Fascist' Labour opposition).
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Despite the CPGB's dismal electoral performance, the Security Service remained concerned about the corrosive long-term consequences of Communist propaganda in the armed forces. During 1929 it investigated eightytwo cases of soldiers suspected of various forms of Communist activity. Of these, forty-six soldiers were ‘cleared', five cases were dropped, sixteen were ‘still under investigation' at the end of the year, and fifteen men were discharged (one fewer than in 1928). MI5 reported, however, that towards the end of 1929 there was an ‘intensification' of both open propaganda and underground subversion. It traced much of this ‘intensification' to secret instructions sent by Comintern's executive committee to the CPGB on 11 October 1929 urging it to set up cells within the armed services aimed at collecting secret information, agitating against commanding officers and distributing anti-militarist propaganda. ‘That espionage, as well as propaganda, is one of the dangers against which we have to guard', MI5 reported, ‘cannot be too strongly emphasised.'
²
In 1929 the French Communist Party (PCF) set up a network of ‘worker correspondents' who were asked to send information from military units and the arms industry to the Party newspaper,
L'Humanité,
which forwarded it to Moscow. This open invitation to espionage led to the imprisonment of much of the PCF leadership. In July 1930, however, Comintern invited other Parties to follow the example of the PCF.
³

Comintern's preoccupation with Western armed forces reflected Stalin's insistence that the Soviet Union faced ‘the threat of a new imperialist war'. Both the OGPU (forerunner of the KGB) and the military Fourth Section (later the GRU) were actively involved in operations to counter the supposed menace of imperialist aggression. Within the OGPU, the euphemistically named Administration for Special Tasks, headed by the experienced assassin Yakov ‘Yasha' Serebryansky, was given responsibility for assassinations, sabotage and terrorist operations abroad. Serebryansky later became a serious embarrassment for Soviet foreign intelligence which sought to distance itself from the bloodletting of the 1930s and portray itself – implausibly – as victim rather than perpetrator of Stalin's Terror. As late as 1993, a history based on material supplied by the post-Soviet foreign intelligence service, the SVR, claimed that Serebryansky was ‘not a regular member of State Security', but ‘only brought in for special jobs'. KGB files show that, on the contrary, he was a senior OGPU officer whose Administration for Special Tasks grew into an elite service, over 200-strong. Long-term preparations for sabotage behind enemy lines in time of war, part of Serebryansky's original remit, were overtaken by the increasingly homicidal hunt for ‘enemies of the people' who had taken refuge
abroad. Since Paris was the main centre during the 1930s of both the White Guards, the remnants of the White Armies defeated in the Russian Civil War, and the followers of the great heretic Leon Trotsky, it became Serebryansky's principal theatre of operations. A number of his officers were awarded the Order of the Red Banner for successful assassinations.
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MI5 had no means of knowing that the assassinations on the continent would not also take place in Britain. Its main concern, however, was Comintern-inspired subversion within the British armed forces. MI5 reported early in 1930 that ‘Communist efforts to tamper with H.M. Forces has [sic] increased and is still increasing':

It is not suggested that as yet any serious harm has been done to the loyalty and discipline of the Forces generally, but in the case of certain of the more technical units, there is no doubt that this long continued and subtle propaganda is beginning to have a certain effect on both discipline and morale, which, if allowed to spread unchecked, will in the long run prove disastrous to the Forces as a whole.
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MI5's warnings against the dangers of subversion gained greatly in credibility after mutiny among seamen of the Atlantic Fleet at the Invergordon naval base in September 1931. The mutiny was a spontaneous protest by the lower deck against incompetently planned and unfairly distributed wage cuts. Trouble was quickly ended by reducing the cuts. The seamen themselves regarded their action as a strike; the only violent protest was a beer mug thrown at an officer in a canteen. Though short lived, the unrest in the Royal Navy caused a greater official stir than any other disturbance within the armed forces since demobilization after the First World War, briefly raising the spectre of the Russian and German naval mutinies of 1917 and 1918 which had helped to topple both Tsar and Kaiser. The impact of the exaggerated reports of mutiny in the Atlantic Fleet was heightened by the fact that they occurred in the midst of a major financial crisis at a critical moment in the life of the first National Government. The fears of foreign bankers that the government had lost its grip were strengthened by the mutiny, and the flight from the pound was, as Hankey, the cabinet secretary, complained, ‘immensely stimulated'. On 17 September £10 million in gold was withdrawn from the Bank of England. Next day the figure rose to £18 million and the government was forced to make a hitherto unthinkable breach with financial orthodoxy and abandon the Gold Standard.
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On 21 September 1931, the day that the Bill ending the Gold Standard was rushed through all its stages in parliament, the cabinet heard an alarmist report on the progress of the mutiny, based largely on intelligence
supplied by the Naval Intelligence Department and MI5. The report was treated with extraordinary secrecy, excluded from the normal cabinet minutes, and summarized in a top-secret (then ‘most secret') note which was then placed in a sealed envelope to be opened only by Hankey, his deputy or their successors. The cabinet was warned that:

the situation was extremely serious. There was a complete organization on the lower deck to resist the pay cuts, and the petty officers were now affected . . . The intention now was for the crews to walk out of the ships on Tuesday morning [22 September] . . . The marines afloat were implicated and . . . the marines at the home ports were not to be trusted.

It is now clear that there were no plans for a further mutiny on the 22nd. But the inflated estimates of naval unrest inevitably magnified fears of Communist subversion. The cabinet was told that ‘The Communists were active in the ports and had sent some of the best agents there.'
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The CPGB had indeed hurriedly sent agents to the home ports, but their attempts to stir up trouble were sometimes comically inept. On 23 September Able Seaman Bateman, whose ship had arrived in Portsmouth from Invergordon, was approached in a fish and chip shop by Stephen ‘Shorty' Hutchings, a Communist militant posing as a journalist. Hutchings insisted on paying for Bateman's fish and chips, told him he wanted a story on Invergordon and arranged to meet him for drinks on the following day in a local hotel. Bateman turned up on the 24th, accompanied by Naval Telegraphist Stephen Bousfield who subsequently reported the meeting to the police and was interviewed by MI5.
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According to Bousfield, in the course of four hours' steady drinking Hutchings revealed that he was a member of Comintern and ‘wanted sailors to come out on strike'. When Bateman and Bousfield demanded money to promote a strike, Hutchings said he would have to consult ‘his superiors in London'. If they agreed, he would telegraph Bousfield: ‘Mother ill. Come at once. Walter.'

After receiving the expected telegram from ‘Walter', Bousfield travelled to London and met a
Daily Worker
journalist, William Shepherd, at a house in Hampstead. Bousfield agreed to draft a pamphlet calling for further strikes in the Royal Navy. In return, Shepherd promised to pay Mrs Bousfield two pounds a week for the next year and make a further payment to Bateman. It was agreed that Bousfield would deliver the pamphlet for printing to a man with a yellow handkerchief in his breast pocket whom he would meet in a Portsmouth pub. The two men duly met and the pamphlet was handed over in the lavatory at Portsmouth railway
station. The man with the yellow handkerchief, who was immediately arrested, turned out to be George Allison, a senior Communist who had been jailed five years earlier for travelling to India on a false passport and was currently acting general secretary of the National Minority Movement. In November Allison was sentenced to three years in jail and Shepherd to twenty months.
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Hutchings escaped trial by fleeing to Russia where, his intercepted correspondence revealed, he was soon complaining of miserable living conditions and separation from his family in England. Jane Sissmore, the Service's main Soviet expert, hoped that if Hutchings could be persuaded to stand trial and ‘give all the information he could about the case and the methods of the C.P. generally with regard to their underground work against the Navy, it would be possible to ensure that he received a light sentence':

If we could be sure that Hutchings would play, I think it would be a most effective blow to the Communist Party here and a great deterrent to further activities of the kind in which Hutchings was engaged.

To date, Communists who overstep the law have always the assurance that they will be looked after in Moscow if they have to fly this country. Hutchings' account of his privations in Moscow may serve to dispel the illusion which the Communist Party has so carefully built up.
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