The Communists

Part 6 - the ARCOS debacle

well_chuffed, Going Postal
This six-storey administrative building was completed in 1928 in place of the demolished metochion of the Voskresensky (Resurrection) New Jerusalem Monastery, which had stood here since the 17th century. A prominent architect Vladimir Mayat built this house for the joint-stock trading company ARCOS, which engaged in the import and export of goods between the Soviet Union and other countries.

One of the more well known spy stories in the 1920s was the ARCOS affair. ARCOS was the All Russian Co-operative Society and it handled trade between the USSR and the UK. Anything the USSR wanted to buy or sell was handled through ARCOS. There were suspicions that ARCOS was involved in slightly more than trade deals and on the afternoon of 12th May 1927 plod in all his guises raided its headquarters at 49 Moorgate in the City of London. Various nefarious activities were uncovered but there were no prosecutions.

The warrant for the raid was taken out under the Official Secrets Act of 1911, the police believed that an ARCOS employee was in possession of a classified document from the War Office. The document was not found during the raid which lasted 5 days.

The Home Secretary at the time, William Joynson-Hicks (known as Jix) was one of the so called Diehards. These were people who were very anti-socialist, they included Winston Churchill among their number, and Jix was desperate to strike at the Soviets who were in the UK.

The allegation about the classified document came from a former British employee of the Soviets, Edward Langston. He used to work in the photostat department of ARCOS and had seen a British Army document which he had been asked to copy; he took an extra copy. It was not much of a security risk document, it was called Signal Training, but was plainly marked as being only for people in an official position in His Majesty’s Service. Langston’s new job was as the landlord of the Dolphin pub in Uxbridge and as he saw the news of the raid he started to worry about possible reprisals. He was spooked into action by seeing one of the ex Special Branch people employed by the Russians in his pub who gave him a coded threat, Langston panicked and sent a telegram to his MI5 contact asking for a revolver. Those were the days, imagine that today.

The then Prime Minister Stanley Baldwin read from deciphered telegrams that proved Soviet guilt of espionage. The end result was that the Soviets realised their codes and ciphers had been cracked and immediately switched to one time pads. There was no gratitude for this from the GC&CS (predecessor of GCHQ) because they were unable to read any high level Soviet messages until the end of WW2. The two countries also broke off diplomatic relations, the trade agreement of 1921 had given Soviet trade delegations diplomatic status, in their eyes this was no different to their Embassy being raided. The British also expelled 400 Soviet citizens.

What was ARCOS actually up to then. Mr Baldwin accused it of being involved in military espionage and subversive activities throughout the British Empire and North and South America. Before the raid MI5 had followed Walter Dale, a suspected Soviet spy, to the ARCOS offices and other communist leaning press agencies. Their phones were tapped, this revealed lots of calls to suspected Soviet Intelligence operatives and opening their mail had revealed copies of classified French dispatches.

Walter Dale, a sacked Special Branch detective who was working for the Soviets, had informants working in Special Branch and passed tip-offs about future operations to Moscow as well as documents from its archives. Bent coppers are nothing new, the Met had to have regular clear outs of its detectives since before 1900. The lure of brown envelopes was too much for them to withstand.

During the raid , where they had to break down quite a few doors that had been sealed, they also found classified documents and anti-intruder devices for which the staff had no sensible explanation. They discovered a secret cipher room where workers were furiously trying to burn papers. After a struggle the papers were seized and the chief of the room was found trying to hide a list in his pocket. The list detailed cover addresses used for secret communication with the communist parties in North and South America plus Australasia.

The claim was that they had found a quarter of a million incriminating pieces of evidence proving conclusively that the Soviets were using the ARCOS and trade delegation offices for subversive activities. Documents demonstrating unsuccessful Soviet attempts to infiltrate the British Trade Union movement were found as were addresses of Communist Party members in other countries and Britain as well as rifles, propaganda films, secret ciphers and bizarrely even a few lifeboats. There were also written orders and records of financial donations from Moscow to the CPGB.

The ARCOS was a Limited Company in British Law but the Soviet Trade Delegation which also shared the same premises had been accorded the equivalent of diplomatic recognition since 1920. Before the raid there was no attempt to differentiate between the two organisations’ separate areas inside the building and everywhere was checked. The Prime Minister, Stanley Baldwin, was shocked at this and tried to smooth the ruffled feathers, he recognised that British Diplomats could well get the same treatment in Russia.

The ARCOS raid had been preceded on April 6 by a similar raid the Chinese police had undertaken against the Soviet Embassy in Peking, this raid also uncovered evidence of Soviet subversion in internal affairs.

These raids proved that although the Soviets were willing to enter into peaceful relations with other countries, they were prepared to use diplomatic privileges to engage in attempts to spread communism. It appears that the Soviets were also prepared to use their version of taqiyya to further their ends.

Even after all this, no charges were brought against any of the staff and in the future, a much more discreet route was used to achieve such ends.


© well_chuffed 2018

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