Adventures of a British Master Spy

by Sidney Reilly

  A talk with the representatives will enable you to form your own judgement as to the feasibility of their ideas.

  I am introducing this scheme to you thinking it might perhaps replace the other big scheme you were working on but which fell through in such a disastrous manner. Incidentally, you would help me considerably by taking the matter up. The only thing I ask is that you keep our connection with this business from the knowledge of my department as, being a government official, I am not supposed to be connected with any such enterprise. I know your interest in such a business where patience and perseverance against all sorts of intrigues and opposition are required and I know also you will look after my interests without my having to make some special agreement with you.

  Please let me know where to address letters to you in the future.

  Kindest regards and best of luck. Please also remember me to your wife.

  This letter calls perhaps for a little interpretation. California stands for Russia, the verse from Omar Kahyam [sic] for a cipher message: the big scheme which fell through disastrously was the Savinkoff affair. The letter means in fact that there is in operation a strong anti-Bolshevik group, having at its head some of the members of the Bolshevik government.

  Sidney’s reply is highly interesting, as it shows his relations with the anti-Bolshevik groups and incidentally his view of their schemes, intrigues, mutual jealousies and general fatuity.

  My dear E.,

  I was awfully pleased to receive your letter of the 26th with the extremely interesting enclosure of 24 January. I am kicking myself for not being in Paris, and thereby missing the Californian couple. You must understand that although I am here I am not losing touch with the situation at all and am in constant correspondence with the different manufacturing groups in the various countries.

  I fully realise the possible importance of the scheme which the Californian Promoters have in hand. Since the failure of the big scheme on which I was working, and especially since the recent fight for share control which has been going on in the Board of Directors, I have finally convinced myself that the initiative must come direct from the present minority interests. I believe that the time is gradually getting ripe for the minority interests to realise that the whole business will go to wreck and ruin unless they make up their minds to sacrifice a good portion of their original ideas and come down to earth in a manner which will be acceptable both to the internal and international market. Whether the minority interests have already reached this mental attitude or not it has been impossible for me to discover in any definite form, and, therefore, I regret so intensely missing the Californians.

  From my very intimate knowledge of the manufacturers in France, Germany and England I am convinced that the Californians will waste their time in negotiating with them. To these people the process of competition seems to be more important and vital than the achievement of mutually beneficial results. I am casting around in my mind who of all the well-known manufacturers is worth talking to, and I would say that today probably the most practical man among them, although by no means the best known or the most popular, would be my friend Aig,1 who at the beginning of 1917 (when the new business was organised) held the same position which my friend of the recent disaster held later. He has learned a lot during his enforced retirement, is intensely energetic and is, as I positively know, very well looked upon by the minority interests of the Board of Directors. I have no faith either in the manufacturers who operated under the old patents, or in those who succeeded them and made such a mess in working the new patents. If I was in Paris now and the Californians came to me I would bring them together with Aig, although I consider it very likely that they will go to him in any case. If you still have the possibility of getting in direct touch with the Californians please tell them that in my opinion negotiations with the manufacturers in Paris, London and Berlin are a waste of time. It will be plenty of time to bring them in when something very definite has been decided by the minority interests. The later these manufacturers are brought into the situation the better it will be all round.

  The minority interests are fully acquainted with the internal market; they know exactly what is required, and they know how and by what means the business can be reorganised, but what they probably lack is, first – money, and secondly – an understanding with the leading personalities in the international market. Without such an understanding, very carefully and with great discretion arrived at in advance, the eventual reorganisation cannot possibly rest on a solid basis, especially from a financial point of view. In these two respects all the present manufacturers put together cannot be of any help.

  As regards money, the market for this kind of undertaking is here and only here, but to obtain money one must come here with a very definite and very plausible scheme, and with very substantial proof that the minority interest is able within a reasonable time to undertake and to carry out a reorganisation of the business. With such premises it would be possible to approach here in the first instance the largest automobile manufacturer,2 who could be interested in the patents provided proof (not merely talk) was given him that the patents will work. Once his interest is gained the question of money can be considered solved.

  As regards a closer understanding with the international market, I think that to start with only one man is really important, and that is the irrepressible Marlborough.3 I have always remained on good terms with him and last year, after the disaster of my big scheme, I had a very interesting correspondence with him on the subject. His ear would always be open to something really sound, especially if it emanated from the minority interests. He said as much in one of his very private and confidential letters to me.

  These are only a few of the ideas which I have on the subject of your letter of the 24th. In any case I would welcome it very much if the Californian promoters would get in touch with me, either by coming here or by correspondence. I am sure that it will be of mutual benefit, not only to the whole situation but to each of us individually.

  Very sincerely yours,

  Dated Reval, 9 March, is a letter on an indifferent subject, but containing coded instructions for the use of a certain chemical developer. The hidden message which is revealed by the use of the developer reads as follows:

  Under separate cover I am sending you a letter from Nic. Nic. Bunakoff (on yellow paper) which you can answer direct to him. His address is N. N. Bunakoff A/B Ekonomic O/V Esplanadgatan 37 Helsingfors. You can use this ink with him also, but if you do then put the initials NNB somewhere on the paper, at the left hand side of the paper near the bottom. K. referred to in his letter is Koutepoff; the Schultzes are the two people who were to see you in Paris and whom I named Krashnoshtanov. When writing to NNB please write him a personal letter replying to his questions or asking for any further information you may require, and another letter which he can show to the Moscow Centre or its representatives to the effect that you are interested in the commercial proposition submitted and putting forward any suggestion you may have to make and at the same time if possible give them something which will show that you are in a position to help them. This letter is not so important; what is chiefly wanted is a letter from you to NNB which he can produce so that he can show that he is working on the matter.

  Letter from Commander E. to Capt. Reilly showing secret writing brought to view by following the typewritten instructions

  The secret writing continued on the back of the previous letter

  Sidney’s replies, dated respectively 25 and 30 March, and 4 April are as follows:

  25 March 1925

  My dear E.,

  The letters from the Helsingfors representatives of the Syndicate are very interesting, but, as usual in these cases, are too vague. I shall follow your advice and write to him direct. I shall write very fully and put all the dots on the ‘i’s, as in my opinion and also judging by the extremely valuable estimates which you are sending me, the situation is such that one ought at least to begin to com
e down to bedrock. Information and connections are of course excellent things, and I can quite appreciate their value to you especially, and, in a broader sense, to all of us. But all this does not bring us any nearer, unless the information and connections are such that they generate action.

  I cannot sufficiently impress upon you how indifferent everybody has become everywhere towards this particular business. It is natural and quite comprehensible. Here is a business which for over seven years has been holding out almost daily a promise of reorganisation and payment of dividends. For years everybody was waiting with bated breath for these promises to be fulfilled and, as you know, a good many have extended considerable financial and moral credit on the strength of this expectation, but years have passed, the promises have not been realised and it is only natural that those who were interested have gone about their own business and practically given up the position as hopeless. Only action can arouse them out of this indifference. This action can take several forms and it is about this that I am going to write in detail to your friend.

  I am not going to advocate anything rash or anything final, but in my opinion there are certain very definite things which can be done and ought to be done. One of them is a declaration by the Syndicate of its existence and of its business policy because it is primarily essential that the world at large should know that there is right on the spot a Syndicate which is capable and ready to take over the business management. This in one way or another (the form is subject to discussion) is the first step that in my opinion must be taken. I am positive that if this step is taken in the right form, it will produce a very good impression and will create everywhere an atmosphere in which it will again be possible to do useful work.

  I am convinced that I shall be in a position to assist the Syndicate very materially both here and at home, and I am writing to your friend in this sense.

  Much as I am concerned about my own personal affairs which, as you know, are in a hellish state, I am at any moment, if I see the right people and prospects of real action, prepared to chuck everything else and devote myself entirely to the Syndicate’s interests.

  I was fifty-one yesterday and I want to do something worthwhile, whilst I can. All the rest does not matter. I am quite sure that you, although younger, feel likewise. Needless to say how deeply grateful I am to you for bringing me into this situation. I feel sure that if we are dealing with the right people, we will be able to work out something not only of the greatest interest generally, but possibly also of the greatest advantage to ourselves.

  I shall write to you some more later.

  Meantime—

  Yours ever,

  P.S. Incidentally I should ask you by the next letter to give me as full a character sketch of your friend as you can.

  Subject to certain transactions which I have on hand now going through, I intend, as soon as possible, to leave here for Europe, for a two–three months’ trip. I would probably arrange my itinerary in such a way as to come to Reval and Helsingfors after a preliminary short stay in London. I shall let you know well in advance when I am likely to leave here.

  30 March

  Dear E.,

  On second thoughts I have decided to send my letter to E. through you – both for safety and because I want you to be fully informed. – I had to write it all by hand, because I could not trust anybody to copy it. It will mean considerable trouble for you to read it, but please do so. Without wishing to be in any way arbitrary, I considered it however necessary to put the dots on the ‘i’s. I think this is the only way to come down to tintacks. I am sick and tired of this continuous theorising. What I propose would put the organisation immediately into the forefront of the entire movement and make an end of the entirely useless emigrant factions who singly and severally are discrediting the cause everywhere.

  The greatest difficulty which I see in the realisation of my scheme is the question of its representation abroad. – I cannot think of a single name which would unquestionably be accepted abroad.

  I see that at present the chief representative is Gen. K. He is a fine, active and honest man (I met him in the South in 1919) but is he not very intimately identified with the Monarchists? I surmise that the tendencies of the Central Organisation or of, at least, some of its members are towards Monarchism (otherwise why the liaison with NN?). Personally, I have nothing against it, under certain circumstances and conditions, but I would consider any definite association with Monarchism at the present stage as absolutely fatal as far as foreign moral and material support is concerned – I think that the representation ought to consist of three men; it would carry more weight and it will be easier to find three more or less suitable names than one ideally suitable.

  If my proposals are adopted (with the necessary modifications which may be dictated by circumstances unknown to me) and if I will be asked to participate in the execution of the scheme, I shall gladly do so and submit further details of a practical nature.

  I am very anxious to hear from you your own opinion on the entire matter and especially on the proposals contained in my letter to B.

  Here is another letter:

  4 April 1925

  Dear E.,

  I received today copy of the Board’s letter of the 15th ult. addressed to B.

  In a way it is an anticipated negative answer to some of my proposals to B. enclosed in my letter of the 30th to you. – I still do not agree with the Directors and I think neither do you. Apparently we were thinking pretty much on the same lines, as the Board’s letter seems to be a direct reply to suggestions made by you to B. prior to your receiving my letter of 10 February.

  On the other hand, I fully agree with the Board that the simplest and most direct way to gather all the necessary data and to arrive at a complete understanding as to future operations and improvements of manufacture is for me to come out and to inspect the factory personally.

  I am not only willing but anxious to do so and am prepared to come out as soon as I have arranged my affairs here. Of course, I would undertake this tour of inspection only after very thorough consultation with you and Engineer B. Whilst there is no limit to which I am not prepared to go in order to help putting this new process on the market, I would naturally hate to provide a Roman holiday for the competitors. I think that I am not exaggerating in presuming that a successful inspection of the factory by me and the presentation of a fully substantiated technical report would produce a considerable impression in the interested quarters and generally facilitate to realisation of the scheme.

  I am looking forward to your more definite advices which ought to reach me about the 20th inst. and in the meantime I shall do all to make myself free for a quick departure –

  We were now ready to leave America: my husband had accepted a position as director of a large firm in Europe, but, as his services would not be required for another month or two, we decided to spend the spare time in investigating the value of this new organisation.

  On 4 July we received a telegram.

  ‘All arrangements for general meeting made here. Waiting the date of your arrival.’

  To which we replied:

  ‘Leaving finally 26 August, Paris 3 September.’

  1 Alexander Ivanitch Goutchkoff

  2 Henry Ford

  3 Winston Churchill

  CHAPTER TWELVE

  COMMANDER E. MET us at Paris and we dined together on the night of our arrival. The following day I went to Ostend on a visit to my mother, whom I had not seen for over a year.

  Here I received a letter from Sidney which included the following paragraph:

  I had a full day yesterday with Gen. K., G—ff, B—ff, and of course Commander E. K. impressed me very favourably. He is very ‘terre à terre’, has absolutely no illusions, depends only on what can be accomplished inside. We agreed to lay all cards on the table, but so far in view of the vastness of the subject we have only cleared the preliminary ground and found ourselves, I am glad to say, in complete agreement as t
o the theoretical appreciation of the entire situation.

  The all important questions of methods, tactics, ways and means we cannot discuss before Tuesday, as K. must be out of town till then. At all events it is clear that if anything at all is to be accomplished I will have to go to H—s to meet K.’s inside friends.

  G. is out of town (attending to his heart ailment) but has instructed his nephew to give me all the latest news. G. will probably have to come to Paris for a meeting with me.

  After a few days I returned to Paris. Sidney told me that he was convinced of the sincerity and potentiality of this anti-Bolshevik organisation. It had been arranged that he should meet the principals of the group on the frontier between Russia and Finland, as it was decided that a journey into Russia was very dangerous. General K. was strongly of this view. The general made a very favourable impression upon me, as he had upon Sidney. We all dined together the night before we left Paris, and General K. impressed very emphatically upon my husband the folly of crossing the border.