The Rupture of Diplomatic Relations with RussiaMay 1927

& The Political Purposes of Surveillance: 

Jennifer Betteridge (Leeds University, 2006) 

A raid on Arcos Ltd (a Russian joint stock trading company) and the Russian Trade 

Delegation took place in May 1927, when a British Air Ministry Publication went 

missing, and there were indications that it was in possession of Soviet Russia. As a 

result of this raid, diplomatic relations, established in 1924 under Ramsey 

Macdonald’s Labour Government were terminated, through a note sent to the Soviet 

Government on 28 May, 1927. There has been a good deal of scepticism in response

to the British Government’s claim that evidence found during the raid was substantial 

enough to justify such a drastic course of action. In 1960, Mowat argued; ‘the police 

were seeking a particular document which was believed to be improperly in the 

possession of an employee in the building, but they found neither it nor anything else 

of importance… the raid had uncovered nothing. Yet it had to be justified, and 

breaking off diplomatic relations was the only way of doing so.1 

The case of the Government against Soviet Russia was undeniably weakened when 

the search of the premises, forty-nine, Moorgate, failed to uncover the Photostatted 

copy that warranted the raid. Yet through the use of documents made available to the 

Public Records Office in May 2002 it is possible to disprove theories denouncing the 

raid as ‘somewhat inconclusive.2’ On the contrary, this wealth of information allows 

an irrefutable conclusion to be reached; the raid on Arcos Ltd and the Russian Trade 

Delegation shed light on a variety of incriminating documents, confirming that 

attempts were undoubtedly being made to interfere in British internal affairs. Even 

1 Charles Mowat, Britain between the Wars, (London, 1955), p. 338

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2

more significantly, the recent release of documentation concerning the Arcos affair 

reveals for the first time the existence of an organisation headed by Jacob 

Kirchenstein, an employee of one of the subsidiary organizations of Arcos Ltd. 

Incriminating evidence found during the raid can be linked to Kirchenstein and his 

associates with relative ease; what is far more difficult to assess is the extent to which 

those in authority were aware of the activities of this organization. 

The Government was eager to attach responsibility for subversive activities at Soviet 

House to the heads of Arcos Ltd and the Russian Trade Delegation, and subsequently 

ruptured diplomatic relations with Soviet Russia. This extreme decision was justified 

by making claims that the conditions of the Anglo-Soviet Trade Agreement of 1921 

had been broken. In addition, the Government published a White Paper containing 

documents that were found during the raid, as well as documents already amassed at 

the Foreign Office. Predictably, these justifications were deemed inadequate by a 

wide section of public opinion. Questions regarding diplomatic immunity promised to
 
the Russian Trade Delegation and criticisms concerning the conduct through which 

the raid was executed exacerbated the Government’s already difficult task of dealing 

with concerns about the potential repercussions of a rupture. It was widely believed 

that breaking off relations with Soviet Russia would have a devastating effect on 

Anglo-Soviet Trade. 

In light of fresh evidence, it is necessary to reconsider what motivated Baldwin’s 

Government to break with Russia. In some circles, the termination of diplomatic 

relations was deemed a prelude to war; this is unlikely. Arguments that it was simply 

 the result of pressure from reactionaries in the Conservative Party, Press and Security 

Service are also inadequate. When drawing conclusions regarding the Government’s 

motives, it is vital to consider the timing of the raid. The break was caused by the 

growth of the Labour Movement in Britain, which coincided with the Conservatives’ 

failing venture in China; two factors that the Government feared were inextricably 

linked to Bolshevism.

2 Henry Pelling, Modern Britain, 1855-1955, (Edinburgh, 1960), p. 102

_________________________________________________________________
3

The Significance of Documents Discovered during the Raid on Arcos Ltd. and

the Russian Trade Delegation, 49, Moorgate, 12-15th May 1927.

                           

                           i)                    The missing document

 

On 11 May 1927, Home Secretary Joynson-Hicks was informed that a document later 

found to be missing from the War Office since January was in the hands of Soviet 

Russians. An ex-employee of Arcos (informant ‘Y’) confided in a man known as 

informant ‘X’, who passed information to the authorities. This photographic copy of 

Volume Three of the British Army Signals Training Pamphlet, Number Eleven gave 

rise to the decision of Home Secretary Sir William Joynson-Hicks and Foreign 

Secretary Austen Chamberlain to obtain a search warrant permitting a search to 

enable the retrieval of the original copy. The Arcos Raid was carried out by 

Superintendent Ernest Thompson, nineteen Detective Officers, Chief Superintendent 

Halford, and twenty-one uniform officers. They were rapidly joined by thirty officers 

of the Metropolitan Police who were overseen by Lieutenant-Colonel Carter, Deputy 

Assistant Commissioner of the Special Branch. In addition, nine interpreters assisted 

in searching the documents. The Russians gave the British authorities access to most 

of the safes at forty-nine, Moorgate. However, four safes and two strong rooms were 

not unlocked as the Russians maintained that the keys were in the possession of Mr 

Khinchuk who was attending a conference in Geneva; ‘undaunted, the police used 

pneumatic drills and acetylene torches to force entry.3’ Unfortunately for the 

Government, the raiders did not manage to unearth the vital document that warranted 

the search.

 
3 Harriette Flory, ‘The Arcos Raid and the rupture of Anglo-Soviet relations’, Journal of Contemporary
   History 12
(1977) p. 707

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4

                                  ii) Discovery of incriminating evidence

 

In any case, substantial proof confirming that subversive activities were being 

undertaken at was undoubtedly uncovered during the raid. The most incriminating 

piece of evidence was discovered in Room Five; as Anton Miller was seized he 

dropped some documents, which on closer examination were found to include a list of 

names and ‘legal’, and ‘illegal’ addresses of persons engaged in communist activities 

in a variety of countries. He was at work with Choudiakoff and a female encipherer, 

Granovskaia. The search of Miller also yielded the discovery of three typewritten 

sheets of a secret cipher and decipher not adapted for telegraphic purposes, on which 

words such as ‘Piatnitsky’ (the financial secretary of the Third International), 

‘Wopat’, (the Workers’ Party of America) and ‘Daily Worker’ were written. It was 

also alleged that in Room Thirty-three on the third floor (belonging to the Trade 

Delegation) three British air ministry publications were found. In the Photostat room 

Robert Koling handed over a variety of envelopes addressed to well known 

Communist individuals and organizations in Great Britain and America.

 

A variety of documents found during the Arcos Raid constitute KV3/35 in the Public 

Records Office, released in 2002. Assuming that these documents were chosen 

because they were the most incriminating it is surprising that they are so inconclusive. 

Revealingly, the first few documents were simply photographs of forged documents 

possibly created by White Russian émigrés attempting to frame Soviet Russia. Copies 

had been kept to prove that they weren’t genuine in case they were presented to 

the British Government. The Baldwin Government was in fact aware of these 

documents, and knew that they were not authentic.

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5

The file contains documents indicating that the cyclostyle at Arcos was used to assist 

the Communist Party of Great Britain in 1925. Documents indicating this include a 

copy of a circular recommending workers to buy the ‘Young Worker’, a copy of a 

circular advertising a meeting held at Salisbury Road Schools, and a circular stating a 

‘plan of work for the ‘City Fraction’. It appears that these were documents given to 

Mr. Hunter by informant ‘Y’ on 11 May, 1927 who claimed that they had been either 

Photostatted or cyclostyled in the Photographic Room at Arcos House. However, the 

notes included state; ‘As regards the documents themselves, they do not appear to be 

of very great value4’.

 
The file contains a variety of additional inconsequential documents such as details 

arranging payments between Arcos in London and Arcos in Moscow, a circular 

regarding office work (deemed of ‘no apparent interest5’), and a circular regarding 

sales and credits. The discovery of a copy of the political programme of the Lenin- 

Marx Circle hardly signifies the existence of sinister activities. Reports of 

Conferences of the National Minority Movement were found, but these predated 

1925. The file includes a photographic copy of a letter from Admiral M.L Bristol U.S 

Navy to Admiral A.L Bristol concerning the transference of Russian roubles; this 

letter dated back to 18 August 1921. A wide variety of minutes from meetings of the 

Arcos Company similarly fail to provide any substantial proof. For example, the only 

comment regarding a meeting of Arcos on 15 May 1925 simply remarks that it; 

‘appeared to be of a purely commercial nature.6’ Notes regarding the minutes taken at
 

4 P(ublic) R(ecords) O(ffice), KV3/35
5 ibid
6 ibid

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6

a different meeting of Arcos reach a similar verdict: ‘purely trade matters. Of no 

apparent interest.7 

Overall, convincing documentation was seized during the raid on Arcos and the 

Russian Trade Delegation. Yet it would be misleading to argue that this evidence was 

sufficient to place blame on the two institutions in their entirety, especially 

considering that documents relating to the institutions as a whole were somewhat 

bland.

 

 

                          ii)                   The Kirchenstein Organisation

 

Harriette Flory’s account of the Arcos Raid accurately disputes the traditional view 

that raiders failed to unearth any significant documents; ‘all told, the Arcos Raid 

revealed that the Soviet Union used its London trade headquarters as a base for 

directing subversive activities and disseminating hostile propaganda8’. However, 

Flory makes no attempt to assess where these illegal acts stemmed from. Crucially, 

documents released in 2002 uncover the existence of an organization headed by Jacob 

Kirchenstein, also known as Johnny Walker. It is evident that his organization, made 

up of persons such as Karl Bahn, Stefan Kirilovich Melnichuk, the Miller brothers, 

and Jan Jilinsky, was at the head of Soviet intelligence gathering in Great Britain. 

A letter sent from Scotland Yard regarding the Russian Trade Delegation and 

revolutionary organizations on 22 December 1926 stated that Kirchenstein was; ‘a 

self-confessed enemy agent residing in the United Kingdom as an unregistered alien; 

and that he was […] engaged at the head of an organization for distributing Bolshevik

7 ibid
8 Flory, The Arcos Raid and the rupture of Anglo-Soviet relations, p. 708
 __________________________________________________________________________
7

propaganda and for facilitating the passage of Bolshevik agents to and from Russia as 

stowaways.9’ A letter dated as early as 1920 showed that Kirchenstein was receiving 

orders from the Third International and in 1921 intercepted correspondence showed 

that he was dispatching propaganda and propagandists to the British Colonies. It was 

in that year that he began to build up his own organization with the support of Peter 

Miller who held the position of Cipher Clerk in the Trade Delegation. 

The letter states that in 1924 Kirchenstein gained employment with the Arcos 

Steamship Company, a subsidiary organization of the Russian Trade Delegation, 

which was considered to play a pivotal role in Bolshevik intrigue in Great Britain. 

Evidence in KV3/17 shows he wrote a letter stating; ‘I am working now in the City in 

that big building in one of the departments, but the old business partly goes on.’

 

Interception of his correspondence and that of his colleagues took place from May 

1924. It became clear that he had contacts in Russia, America, the Argentine and New 

Zealand through the use of seamen (Arcos boats when dealing with Russia), the 

diplomatic bag, and sending post to numerous cover addresses. Yet ‘beyond the fact 

that they are of a particularly secret nature and clearly deal with revolutionary matters, 

nothing is known of the contents of these communications.10 

Crucially, it appears that on 13 April 1927 Scotland Yard became concerned 

regarding contact Kichenstein had made with two individuals from the Air Ministry, 

E. G Barton and T. R Fiddy. Whether or not this relates to the document that caused 

the Arcos Raid is unclear. It was only two weeks after the authorities became aware 

that the War Office document was missing, which is somewhat coincidental. In light
 

9 PRO, KV3/17
10
ibid

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8

of this information it is worth mentioning that another file reveals that before any 

informants approached the authorities a British subject employed in the Armed Forces 

was arrested and imprisoned for trying to steal a document, which appeared to be the 

Armed Forces manual that necessitated the search.11 It is impossible to say whether 

this employee was either Barton or Fiddy.

 

In May 1927 a report was filed regarding ‘documentary evidence implicating officials 

of the Russian Trade Delegation and Arcos in revolutionary propaganda and 

espionage’ stating that there was ‘no possible doubt12’ that allegations stemming from 

the raid were valid. Crucially, the first section deals with the Kirchenstein 

Organization; ‘In other words, in addition to interference in a revolutionary sense with 

the national politics of Great Britain this group of Soviet officials is operating a 

system of industrial and military espionage.13’ The report states that individuals such 

as Jacob Kirchenstein, Robert Koling, Karl Bahn, Stefan Kirilovich Melnichuk and 

Jan Jilinsky, all in high office in the Russian Trade Delegation and Arcos, were 

engaged in illegal activities with revolutionaries in Britain.
 

The most controversial documents found during the raid can be linked to members of 

Kirchenstein’s Organization. The report highlights the role of Anton Miller in the 

Organization, which is particularly crucial, considering that it was he who was found 

with the incriminating list of Communist names and addresses during the raid, 

described as ‘the key to [his] underground movement14’. Anton Miller’s possession of 

the unofficial cipher was also linked to the Kirchenstein Organization, indicating that; 

11 PRO, KV3/15
\12 PRO, KV3/17
13 ibid
14 ibid

__________________________________________________________________________

9

‘Anton Miller acted as encipherer both in his legitimate capacity and in his “illegal” 

capacity for the Kirchenstein Organization.15’ It is also revealing that informant ‘Y’ 

attributed his dismissal to Jilinsky, who played a key role in the Organization.16  He 

described how Jilinsky closely questioned him before he was sacked. Perhaps Jilinsky 

knew that this member of staff was likely to draw attention to the subversive activities 

of the Kirchenstein Organization. Finally, it was Robert Koling who handed evidence       

 over in the Photostat room.

 

Thus, it appears that some employees were carrying out illegitimate activities at

fortynine, Moorgate; what it is far more difficult to establish is the extent to which the 

heads of the Russian Trade Delegation and Arcos Limited were aware of this. A letter 

written by Jacob Kirchenstein stated; ‘I believe it is best not to bring Arcos into this           

 mess.17’ However, a report made shortly after the raid stated; ‘It is impossible that Mr.

 Chinchuk, the head of the Trade Delegation, should be ignorant of the organization,

 the hub of which was in the Cipher Room, next to his own. Chesham House is also

 involved.18’ This is unsurprising, considering that advocates of breaking off relations

 with Russia were eager to place the blame on the heads of figures such as Chinchuk

 and Boeuff.

 

Naturally, representatives of the Russian Trade Delegation vigorously protested their

innocence. They maintained that a note was sent to all employees on December 29th,

1926, reiterating that they were not to interfere in the internal business of Great

Britain. All the employees had supposedly signed a form signifying their accordance.


15 PRO, KV2/797
16 PRO, KV3/15
17 PRO, KV3/17
18 ibid

__________________________________________________________________________

10

Russian protestations of innocence were undoubtedly exaggerated; nonetheless

 questions were asked as to why specific persons engaged in suspicious activities, now

 known to be members of the Kirchenstein Organization, were not arrested and tried.

 On 26th May Joynson-Hicks described Miller as the leader of a Russian spy

 organization. Nonetheless, he did not face arrest, and was allowed to leave the country

 unquestioned; ‘there is something very extraordinary in the government’s treatment of                

 Anton Miller.19

 

Many took the viewpoint that Anton Miller was allowed to leave Britain because the

 Government did not have enough evidence to sustain a successful cross-examination.

 This idea was strengthened when the Government put on their whips against the

 Labour Party’s proposal for the appointment of a Select Committee of the House of

 Commons to investigate the charges made. Mr. Clynes was one of the biggest

 supporters of this course of action. He ‘admitted that Russia was in the dock, but

 demanded a fresh and fair trial by a jury duly impressed with those considerations of

 international peace and commercial advantages formerly so eloquently advanced by

 the now prosecuting counsel.20’ The Government’s decision not to deal with persons

 individually and its refusal to appoint a Select Committee could be seen as an attempt

 to tar all Soviet Russians in Britain with the same brush. Rykoff made an interesting

 point in the Morning Post on 2 June 1927 regarding Joynson-Hicks’ claims that he

 was aware of the addresses of Soviet spies; ‘if Sir William knew their addresses then,

 according to British law, he should be prosecuted for neglect of duty.21

 
19 Anglo-Russian Parliamentary Committee, The rupture with Russia. Immediate consequences and
ultimate dangers
, (July 1927), p. 4
20 PRO, KV3/16
21 ibid

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11

It would be somewhat naïve to argue that the heads of Arcos Ltd and the Russian

Trade Delegation were completely unaware of illegal behaviour at Soviet House. One

report argued; ‘the fact that the key to Kirchenstein’s underground movement was

found in company with the most secret ciphers indicates the extreme importance

which was attributed to the Kirchenstein Organization by those in authority in the

Trade Delegation22.’ This overstates the role played by those in the highest positions

of authority.


Scotland House indicated that they had some knowledge of what was being

undertaken but did not get too deeply involved; ‘as far as possible Kirchenstein

carries on his activities independently of the Delegation, who in their official capacity

are afraid of disclosing any connection with the Third International.23’ Comments

accompanying documents describing the relationship between Arcos and the Russian

 Trade Delegation, and subversive activities are revealing; ‘it might here be noted that                 

 the informant ‘Y’ tells me that since the beginning of 1926 very strict instructions

 were given that no matter for the CPGB should be dealt with in Arcos. It seems

 evident that they feared that should they continue with these activities, they might

 compromise themselves.24’ Perhaps the role of the heads of the two organizations

 could be described as passively cognizant. A letter written by Kirchenstein asserted;

 ‘the chiefs of the society do not dare to know what and from where you receive from

 us,25’ and one report revealed; ‘Kirchenstein’s work is of such a secret nature that not

 even those in the movement and in Arcos are informed of his activities and journeys

abroad.26’ What is evident is that the Conservative Government did not wish to follow

 a line of inquiry that would result in the prosecution of certain individuals rather than

 both institutions as a whole. To justify the rupture with Russia, those in positions of

 authority at forty-nine, Moorgate had to be held fully responsible.

 
22 PRO, KV3/17
23
ibid
24
PRO, KV3/35
25
PRO, KV3/17
26
ibid

 __________________________________________________________________________

 12

The Government Justifies the Rupture of Diplomatic Relations with Russia

 

The Baldwin Government unanimously voted for a resolution to provide for the end

 of relations on 24 May 1927. The Government stated that the rupture was the result of

 Arcos Ltd and the Trade Delegation engaging in military and industrial espionage,

 whilst using their premises as a clearinghouse for Communist propaganda. The

 Government were also adamant that Bolsheviks were violating the Trade Agreement

 of 1921 by spreading propaganda in China that was against British Interests.

 

In order to gain support for such a drastic measure, the Conservatives published a

 White Paper ‘illustrating the Hostile Activities of the Soviet Government and Third

 International against Great Britain.’ Part one contained documents found during the

 raid that the Prime Minister had made use of during his statement on 24 May. They

 included a note dated 23 December 1926 from Jilinsky regarding the employment of

 Robert Koling, the letters found in possession of Koling, and Miller’s list of ‘legal’

 and ‘illegal’ addresses of Communist organizations around the world. It also revealed

 a letter dated 3 November 1926 from Karl Bahn to Jan Jilinsky, found in Karl Bahn’s

 personal file in Room Seven in the Russian Trade Delegation.

 

Part two contained documents published by the Foreign Office. These were mainly

 regarding the Government’s venture in China. For example, an extract from a

 telegram from the Soviet Chargé d’Affaires in London to the Commissariat for

 Foreign Affairs in Moscow (1 February 1927) was included. Rosengolz stated; ‘It is

 essential to give a short explanation to the Press on Tuesday saying that Borodin is

 not a Soviet representative and is not even in our service, but is a private citizen in the

 service of the Chinese Government and that the Soviet Government is not answerable

 __________________________________________________________________________

13

for his actions.27’ It would be interesting to see the context that this comment was

 made in. Another telegram mentioned the difficulties of conducting a campaign

 against British violence in China.

 

A comment made by Flory concerning the White Paper is valid; ‘their critics could

 question the Cabinet’s delay in effecting a rupture if such incriminating evidence was

 already in the Government’s possession. It also left the government vulnerable to the

 charge that the Foreign Office must be engaged in similar espionage activities in order

 to obtain such evidence.28’ The latter comment is crucial; the Government’s decision

 to publish these documents revealed the existence of the ‘Government Code and

 Cypher School’ (GC and CS) in 1919. Letting it be known that a peacetime

 cryptographic unit had been established was a huge blunder on behalf of the

 Government. Andrew describes the effect of the White Paper as ‘traumatic29

 rendering GC and CS ineffective.

 

The Conservatives argued that they were breaking relations with Russia as a last

 resort; ‘There are, as I warned you in my note of February 23 last, limits to the                         

 patience of his Majesty’s Government and of public opinion, and these limits have

 now been reached.30’ On 30 May 1927, the day after the note terminating relations                  

 was sent, the Morning Post published comments made by Austen Chamberlain. He

 stated that there was evidence that attempts to build a political campaign against                        

 Britain had continued after the warning note in February was sent. In fact the Morning

 Post was of the opinion that; ‘the complaints made in the first British Note of 

February 23rd were in themselves sufficient to warrant the cancellation of the Trade

Agreement.31

                            

 27 PRO, KV3/15
28  Flory, The Arcos Raid and the rupture of Anglo-Soviet relations, p. 720
29  Christopher Andrew, Secret Service: The Making of the British Intelligence Community, (London,
     1985), p. 332
30 PRO, KV3/16
31  ibid
__________________________________________________________________________ 

14

 

Opposition to the Rupture of Diplomatic Relations and Flaws in the

 Government’s Justification

 

 

                       i) Ramifications of insufficient preparation/poor conduct

 

a) Insufficient preparation; the issue of diplomatic immunity

 

It is difficult to establish the exact relationship between Arcos Ltd and the Russian

Trade Delegation because there are discrepancies between accounts given by the City

 of London Police and accounts given by defenders of the Soviet Government, such as

 the Anglo-Russian Parliamentary Committee. According to Lieutenant Colonel HS

 Turnball, Commissioner of Police for the City of London; ‘the management and

 conduct of the two businesses [were] so mixed it would be absolutely impossible for

 the police to differentiate between any part of the premises in carrying the duty

 imposed of executing the warrant.32

 

The City of London Police report argued that the graph found in Room Three (where

 incriminating evidence was supposedly found) was linked to Room Four, the office of

 Mr Khinchuk, Principal of the Delegation. Turnball also maintains that this office was

 linked to Room Five where a safe containing documents belonging to both Arcos and

 the Trade Delegation were found. It was in this room that Anton Miller and Serge

 Choudiakoff were attempting to burn documents. This is also maintained in

 Thompson’s report. Another piece of evidence to prove that the Trade Delegation and

 Arcos were linked is that Room Seven (belonging to the Trade Delegation) contained

 files of employees of the Trade Delegation, ARCOS and subsidiary organizations.

 
32 PRO, MEPO 38/70

 __________________________________________________________________________

 
15

In light of the uproar following the raid, it was essential to provide evidence that

 Arcos Ltd and the Russian Trade Delegation were inextricably linked as awkward

 questions about diplomatic immunity were presented to the authorities. According to

 the Government diplomatic immunity was nullified because both organizations

 appeared to be run by the same individuals and in the same offices; ‘Papers in the

 name of Arcos and in the name of the Delegation are inextricably mixed.33’ The claim

 that the Trade Delegation on the first and third floors was entitled to immunity was

 first brought up by Mr. Ivan Boeuf, vice-chairman of the Russian Trade Delegation

 and Mr S Hermer a member of the Council of the Delegation. An Anglo-Russian

 Parliamentary Committee pamphlet argued; ‘It is particularly important to note that

 the Trade Delegation, although housed in 49, Moorgate (premises belonging to Arcos

 Ltd.), occupies apartments which are self contained… it is, therefore, quite impossible

 to confuse the premises occupied by the Trade Delegation with those occupied by

 Arcos34’. In fact, Article Two of the 1921 Trade Agreement stated that Russia had the

 right to prevent access to any areas they wanted, and Article Five gave them the right

 to appoint a number of officials that were to be immune from arrest and search.

 
The case of the British Government was hampered because the Soviets believed that

diplomatic immunities had been recently clarified, a factor overlooked by those that

issued the search warrant. At the beginning of the year a note was sent by the Soviet

Government stating their assumption that they were to receive the same treatment as

any official representative of any foreign government; the British Government failed

to respond, indicating that they did not dispute this. The British Government was

clearly unaware of just how shaky their policy towards the Soviet Government had

33 ibid

__________________________________________________________________________

16

become. In June 1926 Mr Locker Lampson described the chairman of the Soviet

Government as; ‘the only commercial agent of the Soviet Government who enjoys

diplomatic immunity in this country.35’ Yet on 16 May 1927 he disputed the claims of

the Trade Delegation to any such privilege.

 

The search warrant was applied for by the Commissioner of Police on behalf of the

Director of Public Prosecutions as a result of a statement made by Captain Allen

Harker at the War Office. This warrant did not take any promises of diplomatic

immunity into consideration; ‘enter if necessary by force and [to] search the said

premises so occupied as aforesaid and every person found therein and [to] seize any

sketch, plan, model, article, note or document, or thing of a like nature or anything

whatsoever which is or may be evidence of an offence.36

Flory’s argument places a lot of emphasis on the lack of preparation that took place

before the search warrant was put to use; ‘in their haste to catch the Russians redhanded

with the War Office document, Home Office and Scotland Yard authorities

had not prepared for that ramification of the raid.37’ Without the use of recently

released documents it would appear that this was a reasonable conclusion. Yet

interestingly, it would appear that Scotland Yard had in fact been aware for some time

that there was a chance that the missing War Office Document was at Soviet House;

‘on 31 March 1927 Admiral Sinclair visited you with the Photostat copy of Signal

Training Volume Three, Pamphlet Number Eleven, which had been handed to one of

his officers by an employee of Arcos. On 1 April 1927 I visited Admiral Sinclair and


34 Anglo-Russian Parliamentary Committee, Raid on Arcos Ltd and the Trade Delegation of the USSR.
    Facts and Documents,
(May 1927), p. 5
35 ibid, p. 15
36 PRO, MEPO 38/72

__________________________________________________________________________

17

saw ‘X’ who agreed to put me in touch with the individual ‘Y’ who had given him

this document.38’ The first meeting with ‘X’ took place on 6 April, but he did not

manage to organize for an interview to be held with ‘Y’ until 10 May, the day before

Cabinet members were informed.

 

Until the release of crucial documents in 2002, it appeared until 10 May, the

authorities had no reason to believe that the missing War Office document was in

Soviet hands. It is now evident that surveillance institutions had been aware that the

document was at Soviet House since March. It is probable that the Foreign Office was

informed of this development. In that case, Baldwin’s Government had plenty of time

to consider the logistics of a raid on Soviet House. This indicates that the issue of

diplomatic was not overlooked, but purposefully ignored.

 

 

b) Misconduct during the raid

 

Charges made by the Conservative Government were not accepted by Mr. Rosengolz,

the Soviet Chargé d’Affaires, who made a number of complaints which were outlined

in a pamphlet printed by the Anglo-Russian Parliamentary Committee. He made

accusations of violence towards individuals such as Anton Miller and Serge Choudiakoff.


In fact, the Anglo-Russian Parliamentary Committee pamphlet included

an appendix of a note written by Doctor Schwartzman describing injuries sustained by

Choudiakoff during the struggle in Room Five; ‘on examination the following was

found: extensive ecchymosis over frontal region reaching to glabella nasi. Blue

discolouration over nasal bone with marked tenderness on pressure.39’ Those that


37 Flory, The Arcos Raid and the rupture of Anglo-Soviet relations, p. 718
38 PRO, KV3/15
39 Anglo-Russian Parliamentary Committee, Raid on Arcos Ltd and the Trade Delegation of the USSR,p. 50

__________________________________________________________________________

18

opposed Conservative policy consistently made allegations that the documents found

on Anton Miller were planted.

Lieutenant Colonel HS Turnball, the Commissioner of Police for the City of London,

 filed a report replying to the Anglo-Russian Parliamentary Committee’s criticisms of

 the Special Branch. His primary argument is that W. P. Coates was a member of the

 Communist Party, describing his pamphlet as ‘a distortion of the facts throughout.40

 He asserts that Mr. Choudiakoff was not assaulted, claiming that only ‘necessary’

 force was used to restrain him as he attempted to burn papers. He was also adamant

 that women were not personally searched by male officers and that the privacy of

women wanting to go to the toilet was ensured. He argues that at no point were any

 pistols drawn and allegations that policemen were in the possession of whips were

 false. He stresses that no attempt was made to tamper with the Photostat. In response

 to a parliamentary question posed by Kenworthy he stated that no diplomatic bag was

 taken into the building, and that incoming post that was taken was returned unopened

 to the postal department the following day.

 

Conduct of the search was also criticized because it was maintained that the search

 warrant was not shown until after the raid had commenced and was not shown to the

 correct persons; ‘M. Sorokin, Acting Chairman of Arcos Ltd., was only allowed to see

 the warrant an hour after the search commenced and only after repeated demands. M.

 Firsov, the Secretary to the Trade Delegation, was shown the warrant half an hour

 after the commencement of the search.41’ Overall, the search was not handled very

 

40 PRO, MEPO 38/71
41 Anglo-Russian Parliamentary Committee, Raid on Arcos Ltd and the Trade Delegation of the USSR,
    p. 6

__________________________________________________________________________

19

well. A formal list of documents removed was not drawn up, and representatives of

 the two institutions did not witness the removal of items.

 

 

           ii) The repercussions of ending diplomatic relations with Soviet Russia; damage to

 Anglo-Soviet trade

 

‘The establishment of diplomatic relations benefited working people all over the

world. Soviet orders created new jobs in capitalist countries and helped reduce

unemployment.42’ De jure recognition was established in 1924, as it became

increasingly apparent that full diplomatic relations were essential if closer economic

ties were to be achieved. Industrialists, businessmen, the ‘Big five banks’, working

men, and numerous progressive social groups advocated that Britain should enter into

diplomatic relations with Russians to boost flagging parts of British industry.

 

Therefore, when a sudden rupture took place following the Arcos Raid, there were

numerous vehement opponents to this change in British policy. In a statement of 17

May 1927, Mr. Sorokin, acting Chairman of Arcos Ltd stated; ‘we were about to

receive large orders from the USSR, and it was hoped that in the immediate future

Arcos would be enabled to place such orders in Great Britain to an amount up to ten

million… this expected revival of Anglo-Soviet trade was due to the agreement

entered into between the Trade Delegation of the USSR, and one of the big English

banks, whereby the necessary arrangements were made to facilitate the flow of Soviet

orders into this country.43’ The Anglo-Russian Parliamentary Committee claimed that

these orders would have provided work for 39,080 men a year with a wage of £150.

 

42 Fyodor Volkov, Secrets from Whitehall and Downing Street, (Moscow, 1986), p. 159
_________________________________________________________________________ 

 
20

At the end of May A. King addressed a meeting, proclaiming that the Government

had shown little regard for those who would face unemployment as a result of the

 raid. Mr. Wise stated; ‘he had had a hard fight to get business for this country with

 Russia, and the result of the break was that the Russians were holding that it was and

 would be impossible trade with England.44

 

Arguments that the Government were inconsiderate with regards to the disruption of

 trade are unfounded. There was a great deal of concern about the disorganization and

 confusion that would arise from forcing the removal of individuals who played an

 integral role in dealing with Soviet orders. On 2 June 1927, Chamberlain replied to a

 note from Rosengolz, handling this controversial issue. He enclosed a list of persons

 that were to leave Britain immediately, followed by a secondary list of persons who

 were to be evicted, but who also had the opportunity to appeal against the

 Governments decision. Those who did not feature on either list were permitted to

 stay.

 

In order to put together these lists, on 25 May 1927, the Government asked the Inter-

 Departmental Russian Committee to make recommendations regarding Soviet

 employees to the Secretary of State. This Committee was represented by the Home

 Office, Department of Overseas Trade, Passport Control (Foreign Office), Special

 Branch and MI5, who made use of reports on surveillance throughout the 1920s. This

 Committee attempted to reach informed decisions through the use of a variety of

 criteria. Any individual known to have been involved in subversive activities was

 ordered to leave either immediately, or within a certain period of time. Individuals

 unknown to the authorities were judged according to the position they held; ‘if it is a


43 Anglo-Russian Parliamentary Committee, Raid on Arcos Ltd and the Trade Delegation of the USSR,
    p. 48.

_________________________________________________________________________________ 

21

 high one (e.g. director, manager, etc.,) it is considered whether the post is reasonably

 required at all. If so, there is a presumption in the interests of trade in favour of his

 being allowed to stay in it.45’ The Committee evaluated less important positions by

 considering whether abolishing the position would damage trade, or if the position

 could be filled by some other individual, preferably a British citizen. The length of

 residency of an individual was also taken into consideration.

 
It is of particular significance that the Government was willing to accept

 representations advanced by purely British firms; ‘Anglo-Soviet trade was therefore

 safeguarded.46’ The most vital issue was ensuring that existing contracts would be

 fulfilled, and that Soviet orders were paid in full. For example, Mather, Chairman of

 Mather and Platt Limited wrote to Joynson-Hicks voicing their concerns; ‘we wish

 respectfully to draw your attention to the fact that this company has, during the last

 two years, carried out a considerable amount of work for Arcos and the All Union

 Textile Syndicate, and we are most anxious that the money outstanding under the

 credit terms should not be jeopardized by the too hasty removal of the representatives

 of those organizations who are responsible for the fulfillment of these contracts.47’ He

 claimed that Soviet Russians had been very stringent in making £55,000 of payments

 for state orders and once all payments had been fulfilled the total sum would amount

 to £127,000. He was merely asking for sufficient time to replace any directors that

 may be forced out.

44 PRO, KV3/34
45 ibid
46 ibid
47 ibid
________________________________________________________________________ 

22

It is interesting to note that the number of business visas accepted actually increased

after the rupture. Between 24 May 1926 and 16 April 1927, forty-eight visas were

refused, whereas between 24 May 1927 and 16 April 1928, only eleven applications

were rejected. A report filed by the Aliens Branch stated; ‘this is all the more

remarkable seeing that after the rupture a period of six weeks intervened without any

application for a visa being made. The figures are, I submit, a complete answer to

those who would say that since the rupture difficulties have been placed in the way of

genuine Soviet business men desirous of visiting the country.48


Nonetheless, the Home Secretary failed to act with complete rationality when

decisions were made concerning whom should be evicted. Mr. Wise acted as an

adviser or director to Co-operatives, including Centrosojus, and had forged strong

links with Arcos. Wise, Mr. Clynes and Mr. Henderson met with Joynson-Hicks on

26 July 1927 to discuss the findings of the Inter-Departmental Russian Committee.

 

Mr. Wise felt that some organizations had been targeted that had shown no indication

of acting subversively. For example, the Narodny Bank’s Board consisted of five

Russians, two of whom were anti-Soviet and were placed in these positions even

before the Bolsheviks came to power. He maintained that he was certain that these

Directors would have been far too competent to allow any members of staff to engage

in illegal activities. He also opposed action taken against Litinsky, one of the

Directors of Arcos; ‘in reply to the Home Secretary Mr. Wise said he would stake his

reputation that Litinsky was politically innocuous.49’ Joynson-Hicks expressed that he

had heard reports to the contrary.

  
48
ibid
49
ibid
________________________________________________________________________
 

23

In his defence, Joynson-Hicks did not disregard the views of Mr. Wise and instead

 invited him to make a list of persons whom he considered to be key men, worthy of

 individual attention. Wise described the importance of causing minimal disturbance;

 ‘In many cases their specialized knowledge of British trading conditions and their

 friendly personal relations with British firms are absolutely irreplaceable, and their

 removal would simply make it impossible to continue doing the particular business in

 this country.50

 

When Wise presented his list to the Home Secretary, on 29 July 1927, he was

 unconvinced. Joynson-Hicks replied on 5 August 1927; ‘I cannot bring myself to to

 believe that there can be any justification for regarding all these persons as key

 men…. I contemplated that only persons having special qualifications and holding

 responsible positions such as Directors, Manager of Branches, and those of like status

 would be claimed as indispensable, and I am prepared to regard only such persons as

 key men.51’ He maintained that he would revise it personally, but reiterated that

 British citizens could fill positions consider to be insignificant. Revealingly, he stated;

 ‘As I said at our meeting, I am as anxious as anyone not to put obstacles in the way of

 Anglo-Russian trade, but as you will appreciate there are also other and wider

 considerations to which I, as Home Secretary, must have regard.52

 

                                 iii) Unprecedented behaviour

 

In July 1927 the Anglo-Russian Parliamentary Committee published another

pamphlet entitled ‘The rupture with Russia. Immediate consequences and ultimate

dangers.’ The charge of espionage was belittled by a number of leading figures in

British politics. For example, Lloyd George, who was sceptical that a rupture was

 advantageous, argued; ‘If the Soviet Government are doing it [engaging in espionage]

 they are offending with every other Government in friendly relations with us in the

 world.53’ Mr A Ponsonby, a Member of Parliament who had been Under Secretary of

 state for the Labour Government held the same opinion; ‘we must really face the fact,

 when we are getting on our high moral horse, that forgery, theft, lying bribery exist in

 every Foreign Office and every chancellery throughout the world. The recognized

 official attitude is to put on our mask of impassable piety.54’ This is highly significant,

 especially in light of Flory’s argument. The fact was there was no precedent for using

 the charge of espionage as grounds to break diplomatic relations.

50 ibid
51 ibid
52 ibid
53 Anglo-Russian Parliamentary Committee, The Rupture with Russia, p. 2
54 ibid
 
________________________________________________________________________

 24

The Rupture of Diplomatic Relations with Russia; Potential Political Motives

 

                                      i) An attempt to provoke war

 

There was widespread concern that the termination of diplomatic relations with

Russia would endanger the possibility of long-term peace. Mr. Citrine, Secretary of

TUC General Council stated; ‘the absence of such a close relationship [is] a serious

menace not only to the preservation of peace between the two countries but also to the

peace of the world.55’ Volkov argued that the Conservatives activities in China were a

‘dress rehearsal’ for what they hoped to achieve in Russia; for many, rupture was seen

as a prelude to war. Allegations were made that the Conservative Government was not

merely endangering the prospects for peace through the Arcos Raid, but actively

endeavouring to provoke war. Rykov, Chairman of the Council of Peoples’

Commissars claimed; ‘I hope that the wide circles of public opinion, let alone the

working class masses, will not give in to the policy of lies, provocation and

preparation of a new war, which is being conducted by the British Government.56

 

There were concerns among circles in both Russian and Britain that Conservative

diplomacy was geared towards creating a bloc of European powers against the

 Soviets.

 

An anti-Trade Union Bill Bulletin, published by The Islington local of the Communist

 Party discussed; ‘what the Blacklegs Charter really means.’ This argued that the Bill

 was designed to prevent workers from demonstrating against widespread wage

 reductions to fund a war on the revolutions of both China and Russia. These concerns

 were exacerbated as Britain’s military budget was increased to £660 million in 1927.

 
55
Anglo-Russian Parliamentary Committee, Raid on Arcos Ltd and the Trade Delegation of the USSR,
    p. 22

 ________________________________________________________________________

25

A meeting of the ‘no more war movement’ discussed the situation created by the

 Conservative Government. Mr W. Ayles claimed; ‘the Chinese situation is causing

 the Government much anxiety and on top of this we have the breaking off of trading

 relations with Russia. A position has been created which might at any time develop

 into a war which, if such took place, would mean the end of civilization.57

 

By 1927, many countries were still reeling from the effects of the First World War.

 There were widespread economic problems and liberal democracy was rapidly losing

 its reputation. Therefore, it is not surprising that there was wide concern about the

 prospects of the renewal of war. However, there is little evidence to suggest that this

 was a genuine motive of the Conservatives. Soviet Russians were obsessed by the

 idea of the formation of an anti-Soviet bloc, but this was unlikely; ‘A new quarrel

 would interfere with the more general pacification of Europe on which he

 [Chamberlain] had set his heart.58’ Relations between Germany and Russia were

 improving, and France was unsympathetic towards the British decision to terminate

 relations. The most extreme Conservatives may have been open to the idea, but

 Britain had neither the funds nor the backing to support such a policy.


56 Anglo-Russian Parliamentary Committee, The Rupture with Russia, p. 15
57
PRO, MEPO 38/84
58
Andrew, Secret Service, p. 317
 _____________________________________________________________________________

 26

  ii) A triumph of reactionary Conservatives, a persistent Press campaign, and the  Security Service

Thurlow argues that after the First World War, ‘successive governments were not

 taken in by the security hysteria.59’ This was not the case when the Conservative

 Government came to power. The Arcos Raid was a triumph for those that had been

 openly hostile towards rapprochement with Russia throughout the 1920s and had

 actively attempted to damage Anglo-Soviet relations since the Bolsheviks established

 themselves in 1917. Pre-conceived ideas were rife among die-hards; ‘this naïve

 description [of ARCOS Ltd] is typical of the childlike faith the Bolsheviks in general

 put in the science of autosuggestion. They believe that if they say a thing enough most

 people are bound to believe it in the long run.60

 

In order to illustrate how strong emotions concerning Soviet Russia were it is

 necessary to provide a brief overview of attempts made throughout the 1920s to

 undermine Anglo-Soviet relations. Not only did Conservatives attack the Labour

 Party’s policy through the ‘Campbell Affair’, but also with the forged ‘Zinoviev

 Letter’, a significant contributory factor to their defeat in 1924. From the outset, the

 cabinet formed by Baldwin was hostile towards the Soviet State. Nonetheless,

 reactionary elements in the cabinet recognised that they could not justify a sudden

 break of relations to the British public, and therefore centred their foreign policy on

 preparing for such a step. Volkov’s pro-Soviet argument claims that attempts were

 made to undermine the position of Soviet Russia during the Locarno negotiations,

 describing the proceedings as ‘a smokescreen to conceal that not peace agreements

 but pacts of aggression were being signed.61

 
59
Richard Thurlow, The Secret State: British Internal Security in the Twentieth Century, (Oxford,
    1995), p. 112

60 PRO, KV2/818
61 Volkov, Secrets from Whitehall and Downing Street, p. 187
 
_____________________________________________________________________________

27

Leading Conservatives such as Winston Churchill, Austen Chamberlain, Stanley

 Baldwin, and William Joynson-Hicks consistently attacked the political and trade

 agreements of May 1924. Descriptions used to describe Russian agents included

 ‘scum of our gutters’ and ‘outpourings of foreign sinks.62’ On May 28 1927 the

 Evening Standard highlighted a view held by a significant percentage of society; ‘the

 French Government objects to Communism whereas the British objects to Russia.63

 Even though they opposed relations with Russia, they themselves were under constant

 pressure by those who wanted rapid action against the Soviets. Coates argues; ‘apart

 from the public agitation, undoubtedly considerable pressure was being brought to

 bear on Ministers behind the scenes (in the Lobbies of Parliament, in Tory clubs,

 Mayfair drawing rooms, and at week-end country house-parties) in favour of severing

 relations with Moscow.64’ A wide sector of public opinion criticised the Baldwin Government

 for giving into the demands of reactionaries in the Conservative Party. On 9 May 1927, Comrade

 McCormack of Glasgow addressed a meeting of the St. Leonard’s Branch of the

 Independent Labour Party who; ‘stated that Mr. Baldwin, the Prime Minister, was

 only a puppet, and had to dance whatever way the strings were pulled by a few of the

 Tory members of the Government and the large Capitalists of the country.65’ On 22

 May 1927, Mr J. Batey (MP) spoke at a small demonstration ending at the Transport

 Workers Hall. He was eager to demonstrate his contempt for the Government; ‘There

 is a book called Gulliver’s Travels and the men mentioned therein (the inhabitants of

 Lilliput) were all pigmies and Gulliver was like a giant in comparison. In another

 

62 Mowat, Britain between the Wars, p. 338
63 Anglo-Russian Parliamentary Committee, The Rupture with Russia, p. 3
64 W.P and Zelda K. Coates, A History of Anglo-Soviet Relations, (London, 1958), p. 256
65 MEPO 38/84
 
_____________________________________________________________________________

28

book I have read ‘The kingdom of the blind’; a one-eyed man is king. That is the sort

of government we have got; a government of pigmies, a lot of little men. They are a

blind lot and their leader Baldwin is like the one-eyed man, a little less blind than the

rest.66

 

Specifically, the break was a triumph for Home Secretary, Joynson Hicks, who made

the ‘rapid’ decision to raid Soviet House after being informed of the missing

document by the War Secretary; ‘whether the raid was intentionally mounted by

Joynson-Hicks to force the hand of the government remains arguable.67’ It is most

likely that this was his intention. As a thorough diehard, he was ‘anxious to bring

matters to a head.68’ In fact, Joynson-Hicks had recommended the severance of

relations with Russia as early as June 1926. It is interesting to note that there were

claims that he failed to tell Chamberlain that the raid on Arcos would include the

premises of the Russian Trade Delegation. It was the Foreign Secretary who had

consistently questioned whether a rupture would be inevitable. Nonetheless, it could

be argued that Flory’s argument that the termination of relations was at no point

inevitable is misleading; it was evident that as soon as the Arcos Raid took place severe

repercussions would ensue.

 

A significant portion of the Press consistently attempted to enhance the power of the

diehards in the Conservative Party. Newspapers such as The Times, Daily Mail, Daily

Telegraph and Morning Post, which belonged to Viscount Rothermere, were a very

powerful force in the opposition to relations with Soviet Russia. The Press made


66 ibid
67 Gabriel Gorodetsky, The Precarious Truce, Anglo-Soviet Relations 1924-7, (Cambridge, 1977), p.
    221

68 Andrew, The Security Service, p. 330

_____________________________________________________________________________ 

29

constant attacks on the Conservative Party for failing to destroy the communist threat

 in Britain. According to Volkov they launched ‘a frenzied campaign of slander, lies

 and appeals for an all-embracing political and financial boycott of the USSR aimed at

 the ideological preparation of public opinion in case there should be new intervention

 against Soviet Russia.69’ The press constantly discussed the threat of espionage, a

 habit that reached new heights when the Arcos Raid took place; ‘those who preferred

 to stay at home were treated to dramatic accounts in the British press, replete with

 pictures of the participants and of damaged safes which had been forced open by the

 raiders.70

 

The Security Service also harboured hopes of dealing a final blow to the Bolshevik

 threat. Vernon Kell, head of the Security Service (MI5), and Sir Wyndham Childs,

Director of Intelligence, were eager to the rupture of relations with Russia. Some

historians have argued that MI5 and the Special Branch consistently exaggerated the

threat of Russian espionage, partly because intelligence was allowed to develop

‘according to the prejudices of its chief officers.71’ In addition, by 1925 MI5 only had

a staff of thirty compared with eight hundred in 1918. Firstly, this suggests that an

extensive threat Russian subversion simply did not exist. Secondly, it shows that it

was in their interest to make wild claims about Soviet espionage to secure the survival

of British intelligence institutions.

Those that had been pushing for the rupture of relations with Russia triumphed in

May 1927, and ultimately played a crucial role in provoking and undermining the

69 Volkov, Secrets from Whitehall and Downing Street, p. 185
70 Flory, The Arcos Raid and the rupture of Anglo-Soviet relations , p. 707
71Nicholas Hiley, ‘British Internal Security in Wartime: The Rise and Fall of the PMS2, 1915-1917’
Intelligence and National Security 1 (1986), p. 653
_____________________________________________________________________________
 

30

Bolsheviks throughout the 1920s. More importantly, their constant attacks on Soviet

 Russia prepared at least some parts of British public opinion for the split. However,

 arguing that the Arcos Raid and the rupture of relations with Russia were the result of

 the aspirations of reactionaries does not account for the timing of these events. It was

 the combination of the growth of the Labour Movement (especially in light of the

 General Strike) and events in China that caused the severance of diplomatic relations.

iii) Concerns regarding the strength of the Labour Movement; the Trade Union Bill in

                                      relation to the Arcos Raid.

 

Workers opposed attempts to distance Britain from Russia throughout the period. The

Labour movement was headed by the “Hands off Russia” Campaign, which was

renamed as the Anglo-Russian Parliamentary Committee after de jure recognition was

given in 1924, and the National Minority Movement, which, according to Andrew,

was led by Communists. Nationwide agitation played an important role in influencing

government policy towards Russia after the Bolshevik Revolution. Working people

believed that recognition of the Soviet Government would act as a step towards

improving their own legal and material position.

 

Successive governments could not ignore a movement that held power in the House

of Commons, Press and at numerous Trade Union and Labour Conferences. This

agitation grew from opposition to the intervention of the British Government on

behalf of the counter-revolutionaries in Russia following the Revolution of 1917.

 

Repeated threats of industrial action were made, enjoying the support of an overall

majority, and resolutions from the working classes flooded to individual Members of

Parliament and the government as a whole. It was the consistent pressure from

_____________________________________________________________________________ 

31

increasingly powerful workers’ movement that forced the Labour Party into action in

 1924, as they did not want to ‘expose its right-wing leaders as capitalist henchmen.72

 

The Governments fears regarding the growth of the Labour Movement was confirmed

 by the Miners’ Strike and General Strike of 1926. As a result of the threat of a

 Miners’ Strike, the Government was forced to guarantee that miners’ wages would

 not be decreased. When a Royal Commission attempted to introduce pay cuts, a

 General Strike ensued (3-12 May). Joynson-Hicks rapidly attributed this to Bolshevik

 subversion and made allegations that the General Strike was ‘openly financed’ by

 Soviet Russians as a result of MI5 and Special Branch reports. Yet ‘four days later…

 Jix admitted that he had jumped to false conclusions and that there was, after all, ‘no

 reason to connect the two transactions.73’ The General Strike failed as a result of the

 allegations made by Joynson-Hicks but showed the solidarity among workers was

 growing rapidly.

 

The extent to which the Conservative Government was concerned about the growth of

 the Labour Movement was indicated by the creation of the anti-Trade Union Bill,

 which was attempt to hinder the growth and power of workers, and reassert the

 position of groups in society represented by the Conservatives. The actions of the

 Government could be seen as the indication of a desire to undo social and economic

 changes resulting from the First World War. A circular created by the ‘Hands off

 Russia’ campaign stated; ‘Russia is attacked solely because our class, the working

 class, is in power and they have demonstrated that ‘Labour is fit to govern.74

 

72 Volkov, Secrets from Whitehall and Downing Street, p. 162
73 Andrew, The Security Service, p. 323

 _____________________________________________________________________________

 32

The anti-Trade Union Bill of 1927, also known as the ‘Blackleg’s Charter’ was not

 merely the result of the General Strike that took place in 1926, but was also

 inextricably linked to the rupture of relations with Russia. It could be argued that a

 factor contributing to the Conservative Governments decision to create the Bill was

 the anticipation of opposition that would be created by the termination of Anglo-

 Soviet relations. On 29 April 1927, at a meeting of the Independent Labour Party, A.

 J. Cook stated; ‘The Tory Government were using their majority and their power in an

 attempt to shackle the Trade Union Movement in this country. The General Strike had

 shown them the power of Labour and in order to try to prevent the advance of

 Socialism, they were making an attack on the Trade Unions.75

 

If the Trade Union Bill became law, the labour movement’s ability to express dissent

 would be far more limited. The Bill aimed to make both General Strikes and

 Sympathetic Strikes illegal, ‘if it is a strike designed or calculated to coerce the

 Government or to intimidate the community or any substantial portion of the

 community.76’ In fact, until de jure recognition was given in 1924, the threat of

 industrial action was consistently used a tool to try to force the Government into

 extending diplomatic relations to Russia.

 

On 18th May, 1927 Appleby, of the Worker’s Union platform ‘referred to the Arcos

 Raid, saying that the British Government had broken all lawful undertaking given to

 the Soviet Government. This, he contended, was another striking example of what the

 

Capitalists would do to the workers if the Trades Unions Bill be passed.77’ At a

74 Coates, A History of Anglo-Soviet Relations, p. 149.
75 PRO, MEPO 38/84
76 ibid
77 ibid

_____________________________________________________________________________ 

 33

meeting organized by the North Westminster branch of the Independent Labour Party,

 shortly following the raid W. H Thompson ‘was asked that if the Government

 intended to prevent lockouts, why did it lock out the employees of Arcos in the recent

 raid. He [Thompson] replied that the question was a facetious one, but he was of the

 opinion that the raid was nothing more or less than an anti-Russian stunt, similar to

 the ‘red letter’, and brought about to draw a ‘red herring’ across the path of the Trades

 Unions Bill.78

 

                                              

                                               iv) The Chinese Question

 

The 1920s saw the emergence of an anti-imperialist Nationalist movement in China.

 The main aims of this movement were to abolish warlord rule, abolish the unequal

 treaties and achieve the full recognition of China as an independent nation. During

 this period China witnessed the reorganization of the Kuomintang (KMT) under Dr.

 Sun Yat-Sen, who developed a united front with the Chinese Communist Party (CCP)

 in 1924. After his death the nationalist movement went from strength to strength, due

 to a rapid outburst of popular feeling against imperialism. Nationalist forces rapidly

 overran the province of Hunan, as well as cities such as Hanyang and Hankow. They

 then moved on to Shanghai and Peking and eventually established a National

 Government at Nanking.

 

Whitehall found this new Chinese dignity and uncompromising spirit very unpleasant

 and attributed what it termed Chinese obstinacy to Soviet influence.79’ On 6 April,

 1927, a raid on the Soviet embassy in Peking appeared to substantiate this claim;

 supposedly a great deal of evidence indicating subversive activity was brought to

 
78
ibid
79 Coates, A History of Anglo-Soviet Relations, p. 254

_____________________________________________________________________________ 

34

light. The British Government no doubt played a significant role in instigating this

 raid. It is perhaps of significance that the War Office document was handed to British

 authorities merely a week earlier. Coates argues that the Conservatives were unjustifiably

 blaming their mistakes in foreign policy on the Soviet Government.  Fung asserts that the only

 reason that the KMT turned to Soviet Russia was because they failed to secure any support from

 the West, and if British Governments had foreseen that a policy of retreat was inevitable, the

 Soviets may never have had the opportunity to exert influence in China. This misguided British

 foreign policy caused the KMT to turn to Soviet Russia for advice and resources. The key

 Russian adviser was Borodin; it is necessary to mention that the Soviet Government denied

 responsibility for his actions. Chiang Kai-Shek argued that Soviet Russia developed the ‘united

 front’ between the KMT and CCP, and then used it to propagate Bolshevik subversion,

 describing a ‘Communist cold war against the National Revolution.80’ The Evening Standard

 claimed on the 28 May 1927; ‘It is a very general opinion in France without a shadow of

 justification, of course- that the chief cause of the action of the British Government is the old

 rivalry between England and Russia in Asia which is declared to have become acute since the

 Bolsheviks came into power.81’The conflict between Chinese nationalism and British

 imperialism concerned the Baldwin Government due to both economic and political

 considerations. ‘Britain had the greatest single economic stake in China… In 1927 the value of

 British interests in China, not including Hong Kong, was estimated at about 200 million.82’ Yet

 Fung argues that the most fundamental economic concern was the enormous potential of the

 Chinese market.

 

80 Chiang Kai-Shek, Soviet Russia in China, a summing up at seventy (China, 1969), p. 48
81 Anglo-Russian Parliamentary Committee, The Rupture with Russia, p. 2

_____________________________________________________________________________ 

 35

It was increasingly apparent that the British Government could not continue to

 dismiss the nationalist movement. Mr. Eugene Chen, the Acting Minister for Foreign

 Affairs, stated; ‘his government would be prepared to discuss… matters as soon as the

 powers came to appreciate that the real authority in the country had been transferred

 from Peking to Canton.83’ Politically, it was necessary to come to terms with the

 Nationalist movement and attempt to shape the establishment of a government that

 would look favourably upon the West, and ultimately lead to the decline of Bolshevik

 influence in China. In order to do this Britain had to adapt to a policy of conciliation

 regarding the nationalist movement, and retreat from her dominant position in China.

 These considerations caused the Baldwin Government to negotiate with the nationalist

 movement.

 

Talks with Chinese nationalists came to an abrupt halt as a result of the Southern

capture of the city of Nanking that culminated in an outburst of anti-foreign, namely

anti-British violence, causing the wounding of the British Consul. As a result, Great

Britain, the United States, Japan, France and Italy sent a list of demands to the

Nationalist Government on 11 April. The newly established Nationalist Government

set up by Chiang Kai-Shek, Commander of the nationalist armies, ‘courted favour

among the foreign powers, and in addition among the more conservative Chinese, by

taking prompt steps to suppress the communists, who it was thought, had been

responsible for the atrocities at Nanking84’. This course of action secured the support

of the powers and showed that the Nationalist Government was willing to split with

82 Edmund S. K. Fung, The Diplomacy of Imperial Retreat, (Oxford, 1991), p. 4
83 Robert T Pollard, China’s Foreign Relations, 1917-1931, (New York, 1933), p. 294
84 Pollard, China’s Foreign Relations, 1917-1931, p. 307

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 36

the CCP in order to gain international acceptance. A purge to rid the KMT of

 Communists began on 12 April 1927, pleasing the British Government immensely.

 

 v) The relationship between the growth in the Labour Movement, the Chinese
                    campaign and the Arcos Raid; a question of timing.

 

 

The simultaneous growth of the Labour Movement and the increase in power of a

 nationalist movement united with the CCP in China greatly concerned the Baldwin

Government. The two issues were interlinked because they both signified a growth in

the solidarity of the working masses, both within Britain, and internationally.

Bolshevism encouraged this trend, which was largely the result of social and

economic changes caused by the First World War. The Conservative Party feared the

decline of traditional spheres of influence in Britain, an issue that had been simmering

since 1924, and came to a head in 1927, resulting in the raid on Arcos and the rupture

of relations with Soviet Russia. An indication of the motives behind the Arcos Raid

was the simultaneous creation of the anti-Trade Union Bill, which was repeatedly

attacked due to its timing. Alex Gossip, who appeared at a number of meetings,

claimed; ‘The Tory Government has chosen a time when the workers are

concentrating their attention on the conflict in China to launch their anti-Unions Bill

in the House of Commons.85

 

The Labour Movement regularly spoke out against Conservative activities in China;

‘British imperialism understands perfectly well the role and significance of the

working classes in impending events. It is endeavouring by all possible means to

hinder the working class from achieving solidarity and from undertaking organized

85 PRO, MEPO 38/84

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attacks against the imperialist adventures.86’ The Arcos Raid and the subsequent

 rupture of relations was an all out assault designed to terminally damage the power of

 the working masses. The combination of appeasing the Chinese nationalists, attacking

 the Labour Movement in  Britain with a vicious anti-Unions Bill, then dealing a final

 blow by evicting Soviet Russians from the country as a result of the raid on 49,

 Moorgate showed the traditional ruling classes felt increasingly threatened.

 

 

                     Conclusion: The Purposes of Surveillance

 

 The importance of the use of surveillance as a means to political ends has only grown

 with time. The war against Iraq following the attacks on America on 11 September

 2001 brought the issue of the political purposes of surveillance to the forefront of

 international politics. The recent release of Richard Clarke’s ‘Against All Enemies-

 Inside America’s War on Terror’ has dramatically intensified this debate.

 

Predictably, Condoleeza Rice (US National Security Adviser), and other officials

have attempted to disregard Clarke as a ‘disgruntled employee seeking to flog his

book.87’ Yet Clarke is certainly in a position to provide a valuable account of the

events surrounding 11 September. He began his career in the federal service in 1973

and became the first National Co-ordinator for Security Infrastructure Protection and

Counterterrorism under Clinton in May 1998. He held this position until he resigned

under President Bush. In addition, many of his allegations have been verified by other

sources.

 

86 PRO, KV3/17
87 Suzanne Goldenberg, The Guardian, (30 March 2004), p. 12

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Clarke claims that the Bush Administration ignored the threat of al Qaeda and instead,

 launched an unnecessary attack on Iraq. He describes how it became apparent that

 Rumsfeld and Wolfowitz were eager to use 11 September to promote their agenda

 about Iraq; ‘this sinister club… has for ten years made no secret of its military

 ambitions, especially in oil-rich parts of the world.88’ They were unprepared to accept

 that al Qaeda was sophisticated enough to commit such atrocities without state

 sponsorship, and were unwilling to accept that since 1993, no evidence has been

 discovered implicating Iraq in terrorist activities. Clarke recalls a conversation with

 Colin Powell when he warned the Secretary; ‘having been attacked by al Qaeda, for

 us now to go bombing Iraq in response would be like our invading Mexico after the

 Japanese attacked us at Pearl Harbour.89’ Perhaps the most controversial aspect of Clarke’s recall

 of events is his description of a conversation held with President Bush, who urged; ‘I know you

 have a lot to do and all… but I want you, as soon as you can, to go back over everything,

 everything. See if Saddam did this. See if he’s linked in any way.90’ On 28 March 2004, despite

 early protests of innocence, Rice finally admitted that this did take place. This exchange

 between Bush and Clarke resulted in a meeting to evaluate the relationship between

 Iraq and al Qaeda; all agencies and departments reached the conclusion that Iraq was

 uninvolved, yet the attack on Iraq proceeded regardless. Thus allegations have been

 made that Bush carried out a war on Iraq as a result of evidence that never existed;

 ‘the Bush administration worked tirelessly to conflate the two, constantly eliding

 Saddam and 11 September.91’ What is most concerning is that Bush has himself

 

88 Richard Dawkins, ‘Iraq: a year of war, the Independent Review’, (17 March 2004), p. 13
89 Richard Clarke, ‘Against All Enemies- Inside America’s War on Terror’ (2004), p. 31
90 ibid, p. p. 32
91 Jonathan Freedland, The Guardian, (17 March 2004), p. 21

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39

admitted they had no evidence to prove this link. While addressing Congress about

 energy legislation on 10 September 2003, Bush stated; ‘we have no evidence that

 Saddam Hussein was involved with the 11 September attacks.92’ Blair has faced

 similar charges; ‘Bush lied about connections between Iraq and 9/11. Bush and Blair

 lied about “weapons of mass destruction”, which do not exist and we now learn they

 had no intelligence grounds to think existed.93’ Clarke quotes Randy Beers, Senior NSC

 Counterterrorism Official who was concerned about the necessity of leading a war against Iraq;

 ‘There’s no threat to us now from Iraq, but seventy per cent of the American people think Iraq

 attacked the Pentagon and the World Trade Center. You wanna know why? Because that’s what

 the Administration wants them to think.94’ Clarke believes that President George W. Bush

 created the ‘War on Terror’ campaign to politicize counterterrorism and subsequently gain votes

 at the ballot box. He concludes; ‘terrorism, which never once was addressed by the presidential

 candidates in 2000, will be a major topic in the 2004 campaign.95’ On March 30 2004 an article

 by Suzanne Goldenberg of the Guardian described the embarrassment caused when the White

 House was unwilling to allow Miss Condoleeza Rice, the President’s National Security Adviser

 to testify publicly under oath before the Commission, describing it as ‘an unwelcome distraction

 from [Bush’s] re-election campaign.96There are a number of similarities between the  British

 Government’s decision to rupture relations with Russia in 1927 and the American government’s

 decision to

 
92
George Bush, Iraq: a year of war, the Independent Review, (17 March 2004), p. 12
93 Richard Dawkins, Iraq: a year of war, p. 12
94 Clarke, Against All Enemies, p. 242
95 ibid, p. 289

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lead a war against Iraq in 2004. Clearly, the two are largely incomparable, for the war

 against Iraq was born from tragedy, and has far more devastating repercussions. It is

 evident, however, that both decisions were the result of comparable circumstances. In

 both cases, evidence obtained through surveillance was manipulated to indulge

 specific agendas and were the result of deep-rooted hostility to those held responsible.

 

In addition, both the Baldwin Administration and the Bush Administration could also

be accused of using surveillance as a political trump.  In a statement to the nation, Bush asserted;

‘we will make no distinction between the terrorists who committed these acts and those who

harbour them.97’ This was largely the view taken by Baldwin’s Government in 1927, when the

Conservatives decided not to assess whether the Kirchenstein Organization could be

distinguished from Arcos and the Russian Trade Delegation. The Government leapt at the chance

to blame subversive activities on the institutions as a whole rather than primarily

attempting to deal with the problem through the withdrawal of certain individuals.

John Kerry, Democratic presidential candidate, considers the Bush administration to

 have been ‘gridlocked by its own ideology and its own arrogance.98’ The same could

 be said of the diehards in 1927. Reactionaries in the Conservative Party undermined

 Anglo-Soviet relations from the outset and placed a huge amount of pressure upon the

 Cabinet, especially with the support of conservative newspapers. The actions of the

 diehards are comparable to those of Americans such as Rumsfeld and Wolfowitz.

 
The actions of any Government are shaped by preparation for the next time it faces a

 general election. The use of surveillance as a means to political gain at the ballot box

 

96 Goldenberg, The Guardian, p. 12
97 Clarke, Against All Enemies, p. 23

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 41

was undoubtedly a consideration made both by Baldwin in 1927 and Bush in 2004.

 

The issue of relations with Russia played a crucial role in the defeat of the Labour

 Government in 1924, and Conservatives were wary about making the same mistake.

 Likewise, numerous allegations have been made that Bush has used the ‘War on

 Terror’ as a political trump. In the past few years, the issue of national security has

 overshadowed the political stage. Therefore any leader attempting to deal with the

 threat of terrorism is likely to be rewarded in terms of votes. It was necessary to

 indicate that the culprits behind 11 September were being dealt with. The chances of

 success against Iraq were far higher than the chances of success of eliminating al

 Qaeda.  The very nature of surveillance means it can be easily manipulated to serve political

 purposes. Evidence is of a very confidential nature, especially when the source of

 information discovered is an informant who wants guaranteed anonymity. Therefore,

 it is difficult to prevent surveillance from being used to serve (covert) ulterior

 motives. This issue is more significant than ever in Great Britain and the United

 States as governments are taking steps to make further curbs on the release of

 information to the public. This idea is presently being debated by the Cabinet Office

 who; ‘propose a substantial widening of national security… the guidelines would

 encourage departments across Whitehall to prepare certificates in advance to block

 requests from public and press under the new Freedom of Information Act which

 becomes law next January.99’ The Cabinet Office proposes the extension of the 1989

 Security Service Act, which only restricts the release of information regarding

 espionage, terrorism and sabotage intended to damage British parliamentary

 

98 Patrick Wintour, The Guardian, (10 April 2004), p. 1
99 David Hencke, The Guardian, (30 March 2004), p. 9

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42

democracy. Currently information is only withheld where harm has already taken

 place; it is intended that in the future the government will be able to prevent access to

 information regarding the possibility of potential harm.

   

There is widespread scepticism amongst public opinion regarding Blair and Bush’s

 use of surveillance, and their justification for waging a war against Iraq without the

 consent of the United Nations. As a result, claims that national security is not the

 same as the interests of the government of the day do not provide a great deal of

 reassurance.100

 

100 Hencke, The Guardian, p. 9