The Secret War for China: Espionage, Revolution and the Rise of Mao 9781350989238, 9781786732712

Table of contents :
Cover
Title
Copyright
Dedication
Contents
Abbreviations
Acknowledgements
Note on Pinyin
Introduction Suspect Everyone
1. Spies Unleashed
2. Failed Campaigns
3. Shadowing the Comintern
4. Lawrence of Manchuria
5. The Unparalleled Intelligence Failure
6. Rogue Spymasters
7. Learning the Ropes of Espionage
8. The ‘C’
9. The Secret Strategy
10. A Mole in Mao’s office
11. Murderous Intrigues
12. The Antagonists
13. The Kremlin’s Spies
14. Our Man in Yenan
15. Into Manchuria
16. An American General
17. The Japanese Friends
18. The Russian Operatives
19. Spying on our Cousins
20. Uranium
21. The One-Eyed Lieutenant-General
22. Secret Sources
23. Guy Burgess the Spy
24. Spies’ Warnings
25. Stalin’s Fears
26. HMS Amethyst
Aftermath ‘Your Future is Very Dark’
Notes
Bibliography
Index

Citation preview

Panagiotis Dimitrakis holds a doctorate in War Studies from King’s College London, and is an expert on intelligence and military history. He is the author of The Secret War in Afghanistan: The Soviet Union, China and Anglo-American Intelligence in the Afghan War (I.B.Tauris, 2013), and Secrets and Lies in Vietnam: Spies, Intelligence and Covert Operations in the Vietnam Wars (I.B.Tauris, 2016).

‘A remarkable portrait of intelligence, espionage and covert action. This highly readable account illuminates an important new aspect of both Chinese history and international history.’ Professor Richard J. Aldrich, University of Warwick ‘The author draws on a wide range of sources to paint a fascinating picture of the shadowy activities and colourful characters that competing Chinese factions, Western powers and Japan undertook in their attempts to control China over the first half of the twentieth century.’ Professor Harold Tanner, University of North Texas ‘In his new book, Panagiotis Dimitrakis provides us with a remarkable piece of research into the shadowy world of espionage and intelligence in China for almost the whole of the twentieth century. He has brought to light a kind of parallel history, one that fills in many of the blanks of the more conventional accounts of China, beginning with the Revolution of 1911 and continuing to the rise of Mao and his seizure of power.’ Richard Bernstein, the first Beijing bureau chief for Time and author of China 1945: Mao’s Revolution and America’s Fateful Choice

By the same author, also available from I.B.Tauris: Greece and the English: British Diplomacy and the Kings of Greece Military Intelligence in Cyprus: From the Great War to Middle East Crises Failed Alliances of the Cold War: Britain’s Strategy and Ambitions in Asia and the Middle East The Secret War in Afghanistan: The Soviet Union, China and Anglo-American Intelligence in the Afghan War Secrets and Lies in Vietnam: Spies, Intelligence and Covert Operations in the Vietnam Wars

THE SECRET WAR FOR CHINA

Espionage, Revolution and the Rise of Mao

PANAGIOTIS DIMITRAKIS

I.B. TAURIS Bloomsbury Publishing Plc 50 Bedford Square, London, WC1B 3DP, UK 1385 Broadway, New York, NY 10018, USA BLOOMSBURY, I.B. TAURIS and the I.B. Tauris logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2017 Paperback edition published 2020 Copyright © Panagiotis Dimitrakis, 2017 Panagiotis Dimitrakis has asserted their right under the Copyright, Designs and Patents Act, 1988, to be identified as Author of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. Bloomsbury Publishing Plc does not have any control over, or responsibility for, any third-party websites referred to or in this book. All internet addresses given in this book were correct at the time of going to press. The author and publisher regret any inconvenience caused if addresses have changed or sites have ceased to exist, but can accept no responsibility for any such changes. A catalogue record for this book is available from the British Library. A catalog record of this book is available from the Library of Congress. ISBN: HB: 978-1-7845-3903-0 PB: 978-0-7556-0110-3 ePDF: 978-1-7867-3271-2 eBook: 978-1-7867-2271-3 International Library of Twentieth Century History 103 Typeset in Garamond Three by OKS Prepress Services, Chennai, India To find out more about our authors and books visit www.bloomsbury.com and sign up for our newsletters.

To Giannis and Eleni

CONTENTS

Abbreviations Acknowledgements Note on Pinyin Introduction Suspect Everyone 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Spies Unleashed Failed Campaigns Shadowing the Comintern Lawrence of Manchuria The Unparalleled Intelligence Failure Rogue Spymasters Learning the Ropes of Espionage The ‘C’ The Secret Strategy A Mole in Mao’s office Murderous Intrigues The Antagonists The Kremlin’s Spies Our Man in Yenan Into Manchuria An American General The Japanese Friends The Russian Operatives Spying on our Cousins

xi xiii xiv 1 14 32 42 56 68 82 93 101 117 129 136 148 164 174 185 199 213 222 238

x

20. 21. 22. 23. 24. 25. 26.

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Uranium The One-Eyed Lieutenant-General Secret Sources Guy Burgess the Spy Spies’ Warnings Stalin’s Fears HMS Amethyst

248 258 265 276 293 304 314

Aftermath ‘Your Future is Very Dark’

329

Notes Bibliography Index

338 382 392

ABBREVIATIONS

AGFRTS BAAG BETRO BIS BLO BMM CAT CC CCP Cominform Comintern CIA CIG COIN CREST EAYWA FBI FRUS GC&CS Gestapo GPU ISLD

Air and Ground Forces Resources and Technical Staff British Army Aid Group British Economics and Trace Research Organisation Bureau of Investigation and Statistics British Liaison Officer British Military Mission Civil Aviation Transport Central Committee Chinese Communist Party Communist Information Bureau Communist International Central Intelligence Agency Central Intelligence Group Counter-Insurgency CIA Records Search Tool East Asia Yellow Way Association Federal Bureau of Investigation Foreign Relations of the United States series Government Communications and Cipher School Nazi Secret Police State Political Directorate under the NKVD (in November 1923, the GPU left the Russian NKVD and was transferred into the OGPU) Inter-Service Liaison Department (SIS cover designation in the Far East)

xii

JIC Juntong KMT MI6 M19 NARA NKDV OGPU ONI OSS PLA PSYOPS SAD SIS SOE SSA SSGHQ SSU TNA UNRRA Zhongtong

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Joint Intelligence Committee Bureau of Investigation and Statistics for the Military Affairs Commission Kuomintang Military Intelligence Section 6 (also known as SIS) Military Intelligence Section 9 (Escape and Evasion) National Archives and Records Administration, United States Soviet Secret Service (MGB from 1946 onwards) Joint State Political Directorate Office of Naval Intelligence Office of Strategic Services People’s Liberation Army Psychological Operation Social Affairs Department Secret Intelligence Service (also known as MI6) Special Operations Executive Signal Security Agency Security Service General Headquarters Strategic Services Unit (US) The National Archives (UK) United Nations Relief and Rehabilitation Administration Central Bureau of Investigation and Statistics

ACKNOWLEDGEMENTS

Professor Joe Maiolo of the Department of War Studies, King’s College London, and David Chambers, helped me considerably with sources, and I thank them for this. Also, I would like to thank Dr Christopher Baxter, Queen’s University Belfast, for sharing his research with me. Dr Christopher Lew helped me considerably with Chinese sources. Claire Fanning offered me the service papers of her father Paul Fanning, an OSS officer in China, and I thank her for this. Special thanks are due to Rosalie Spire for her well-informed and prompt aid and advice regarding the UK National Archives and to Kevin Morrow, Jeremy Bigwood and Sim Smiley, who provided invaluable research aid with respect to the US National Archives. At I.B.Tauris I would like to thank, for all their efforts towards the publication of this book, my editor Tomasz Hoskins and my production editor Arub Ahmed. Finally I owe a great debt to my family for their support.

NOTE ON PINYIN

The Pinyin romanisation system is used in the majority of the names and locations, with exception for names of people or organisations wellknown to the English-reading public in Wade-Giles romanisation: for example Sun Yat-sen, Chiang Kai-shek.

‘[T]he use of spies, of whom there are five classes: local spies; inward spies; converted spies; doomed spies; surviving spies. When these five kinds of spy are all at work, none can discover the secret system. This is called “divine manipulation of the threads.” It is the sovereign’s most precious faculty. Having local spies means employing the services of the inhabitants of a district. Having inward spies, making use of officials of the enemy. Having converted spies, getting hold of the enemy’s spies and using them for our own purposes. Having doomed spies, doing certain things openly for purposes of deception, and allowing our spies to know of them and report them to the enemy. Surviving spies, finally, are those who bring back news from the enemy’s camp. Hence it is that with none in the whole army are more intimate relations to be maintained than with spies . . . None should be more liberally rewarded. In no other business should greater secrecy be preserved. Spies cannot be usefully employed without a certain intuitive sagacity. They cannot be properly managed without benevolence and straightforwardness. Without subtle ingenuity of mind, one cannot make certain of the truth of their reports. Be subtle! be subtle! And use your spies for every kind of business. If a secret piece of news is divulged by a spy before the time is ripe, he must be put to death together with the man to whom the secret was told. Whether the object be to crush an army, to storm a city, or to assassinate an individual, it is always necessary to begin by finding out the names of the attendants, the aides-de-camp, and door-keepers and sentries of the general in command. Our spies must be commissioned to ascertain these. The enemy’s spies who have come to spy on us must be sought out, tempted with bribes, led away and comfortably housed. Thus they will become converted spies and available for our service. It is through the information brought by the converted spy that we are able to acquire and employ local and inward spies. It is owing to his information, again, that we can cause the doomed spy to carry false tidings to the enemy. Lastly, it is by his information that the surviving spy can be used on appointed occasions. The end and aim of spying in all its five varieties is knowledge of the enemy; and this knowledge can only be derived, in the first instance, from the converted spy. Hence it is essential that the converted spy be treated with the utmost liberality.’ Sun Tzu, Art of War, Chapter XIII ‘The Use of Spies’

Chungking

Xi'an

Hong Kong

Canton

Nanking Shanghai

Mukden

Map of China: Cities of Strategic Value for the Opponents in the Civil War.

Tibet

Tientsin Taiyuan Yenan

(Beijing)

Peking

INTRODUCTION SUSPECT EVERYONE

October 1, 1949. Atop the Gate of Heavenly Peace in Tiananmen Square, Mao Tse-tung, a former teacher from Hunan, now the chairman of the Chinese Communist Party, proclaims the People’s Republic of China. Under Mao’s leadership, the communists defeated the better-armed nationalist regime of the Republic of China under the generalissimo Chiang Kai-shek in the epic civil war from 1927 to 1949. With his treatise On Guerrilla Warfare (1937), Mao inspires strategists of any political persuasion with his war theory, pragmatism, resilience and his defiance against all odds. Mao defeated the Chinese Nationalist Party (Kuomintang, KMT) for yet another reason beyond those of shrewd strategy and tactics, the overwhelming support of the Chinese, the mistakes of Chiang and the inherent terror and corruption of the KMT government (which alienated many Chinese, turning them into supporters of the communist cause): the CCP had abundant spies inside the top echelons of the government and the military who provided streams of vital information of the KMT’s intentions. In modern intelligence services jargon, high-placed spies are also called moles, penetration agents, deep cover agents or sleeper agents.1 The CCP rank and file suffered from defections of cadre. Nonetheless, the information and advice provided to the opponent by a defector did not equal the intelligence provided by a communist mole with access to consultations and top-secret documents. For some time the KMT had a mole, Shen Zhiyue, in Mao’s office in Yenan, who eventually reached Chungking, the wartime nationalist capital and, after the war, headed one of the intelligence agencies of Taiwan (Formosa). Chiang admitted that one

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of the key factors of his defeat was the infiltration of communist spies in the military: ‘There is no hole they do not enter’ he complained. The moles caused panic and confusion amongst the nationalist decision makers, ‘even to the extent that our several million troops, without even experiencing fierce battle, were shattered by the enemy, and innumerable excellent weapons were presented to the Communists and used to massacre us’ Chiang remarked.2 The Chinese warlords’ conflict in the 1911– 27 war, and the civil war thereafter, was a game of ruthless expediency. ‘I came to realise that every civil war in China proceeds simultaneously on two fronts, military and political, and of these the political is the most important. While two groups of armies were fighting – not very hard – the two sets of leaders were constantly trying to come to terms with some faction on the other side. If they succeeded, they’d join forces and turn on the ones who’d been left out of the deal’, concluded Morris Cohen, a resourceful Canadian-Jew who became aide de camp and bodyguard of Sun Yat-sen, the inspiring founder of the KMT and an acting colonel of his army in the late 1920s.3 Suspecting the ever-changing loyalties of friends and enemies alike was the first lesson for a spy in the war-torn China, and it is something the reader of this book ought to keep in mind. This book explores the role of spymasters across multiple, interconnected secret battlefields. It reveals: the clandestine confrontation between Mao and Chiang, and between British intelligence and Communist International (Comintern) agents in China; Chiang’s plotting against the allies (mostly the British and the Americans) and against the Japanese; the allies’ bid to turn nationalist China against the Japanese; Mao’s actions against pro-Moscow communist leaders within the CCP; and Chiang’s actions against nationalist generals who plotted to oust him. Each of the secret war’s integral part was the secret negotiations of Chiang with Nazi Germany and with Japan, whose forces he employed against the CCP once World War II was over. Mao employed nationalist forces who had defected, as well as Japanese, against the KMT. During the final three years of the civil war about 105 out of 869 KMT generals defected to the CCP. The deputy head of the General Staff, General Wu Shih, was a communist secret agent.4 The crossed and parallel histories of spies and their masters is the central theme of this study. As the Chinese people endured the Japanese intervention, invasions and the crimes against humanity of the Imperial

INTRODUCTION

3

Japanese Army, both Mao Tse-tung and his enemy, Chiang Kai-shek, and both men’s loyal lieutenants, were thinking the same: while continuing to fight Japan, how to simultaneously outwit and destroy the other. Mao and Chiang, leaders of armies of thousands of troops, believed that there would be only one ruler for China. The civil war in China commenced during the inter-war period. During this time the United States had no foreign intelligence organisation; however, it did have plenty of amateur ‘China hands’ – diplomats and merchants who had lived in China for decades. Once the United States entered World War II, Washington supplied the Nationalist Army with immense quantities of modern, US-made war material. The Office of Naval Intelligence (ONI), the Office of Strategic Services (OSS) and the Federal Bureau of Investigation (FBI) provided advice vital for the reorganisation of the nationalist secret services. The Americans assumed that they were helping an ally fight back the Japanese. The OSS, under the charge of Republican lawyer and Medal of Honor recipient General William Joseph ‘Wild Bill’ Donovan, was exploring schemes of cooperating in joint guerrilla operations against the Japanese. Nonetheless, Chiang Kai-shek and his loyal spymasters Dai Li (nicknamed the Himmler of Asia), Xu Enzeng and the ever-influential Chen Lifu were preparing for the final confrontation with the CCP, and they never stopped blocking the Secret Intelligence Service (SIS/MI6), the Special Operations Executive (SOE) and the Americans from operating in China and having any communication with the communists. The ever-suspicious Chiang and Dai were obsessed that the British intelligence services would ally themselves with warlords and communists against their rule.

The Eternal War for the Republic The ‘Xinhai’ (Hsin-hai) revolution of 1911 led to the end of the rule of the Qing dynasty. By late autumn, provincial governors declared their independence from the Qing Empire. On 30 November 1911, Li Yuanhong formed the Central Military Government of the Republic of China. The new republic was proclaimed on 1 January 1912. Sun Yat-sen, a doctor of medicine, was elected the first provisional president of the Republic of China. Since 1905, he had propagated the ‘Three Principles of the People’: nationalism, democracy and the livelihood of the people. Sun inspired both the nationalists and the communists.

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In November 1956, Mao praised Sun: ‘Let us pay tribute to our great revolutionary forerunner, Dr Sun Yat-sen! We pay tribute to him for the intense struggle he waged in the preparatory period of our democratic revolution against the Chinese reformists, taking the clear-cut stand of a Chinese revolutionary democrat. In this struggle he was the standardbearer of China’s revolutionary democrats . . . Dr Sun was a modest man. I heard him speak on many occasions and was impressed by the force of his character . . . He worked heart and soul for the transformation of China, devoting his whole life to the cause; of him it can be justly said that he gave his best, gave his all, till his heart ceased to beat . . .’5 Sun Yat-sen had studied English, English history, mathematics, science and Christian theology; later he studied medicine at the Guangzhou Boji Hospital and became a doctor at the Hong Kong College of Medicine. Earlier when he was 17 years old he was baptized a Christian. He soon joined scholars urging for revolution against the Qing dynasty. Sun instigated eleven uprisings before 1911; all failed, and he was exiled several times in Japan and Europe. In London in 1896, Sun Yat-sen was lured to the Chinese Legation, where he was held for twelve days. Allegedly, Chinese officials planned to ‘pack him’ and send him to China to be executed. He managed to pass a note to a British servant calling for help. The prompt intervention of the Foreign Office, the press and the outcry of the public opinion compelled the Chinese to release him.6 Sun tried to get the British public’s support for his Reform Party – but to no avail. He needed foreign backing to overcome the plots of the Chinese court against him. In the period 1897– 1907, he received some support from Japan, while he tried to gather financial and political aid in the United States. He called for a bond with France in 1908, and, in 1911, upon the revolution, he proposed for an alliance with both Britain and the United States.7 Sun Yat-sen was the foremost revolutionary scholar, and he was elected provisional president. But with no military force under his command, he had to negotiate with the power-hungry imperial prime minister and the former army grand marshal Yuan Shikai, who mediated for Emperor Pu Yi to abdicate and for Yan to be appointed president. Yuan was sworn on 10 March 1912. After two millennia, the imperial rule was over. Sun Yatsen established the nationalist party the Kuomintang (KMT) on 25 August 1912. The party won a majority in the election of the National Assembly. Song Jiaoren was elected premier but was assassinated in

INTRODUCTION

5

Shanghai on 20 March 1913, after an order from Yuan Shikai, who sought to expand his powers and turned against the National Assembly. Sun Yat-sen led a failed uprising (named the ‘Second Revolution’) and eventually was exiled in Japan where he received some support. On 21 October 1915, Sun married Soong Ching-ling, one of the three daughters of the wealthiest family of Shanghai, the soon to be in-laws of Chiang Kai-shek. Ching-ling, who was twenty-six years younger than Sun, was fascinated by his spirit and political philosophy. Her husband brought her into the realm of revolution, politics and intrigue, himself teaching her about codes, invisible ink and how to discover the spies of his enemy, the government of Yuan.8 As we will explore, Ching-ling would turn into a communist who kept her comrades informed of Chiang’s strategies in the 1930s and 1940s. Meanwhile in London, Sir Mansfield Cumming, the head (the ‘C’) of the newly-founded Secret Intelligence Service (SIS/MI6), decided in spring 1914 (just before the outbreak of World War I) to send an agent in Kiaochow (Jiaozhou), near Tsingtao. Tsingtao was the homeport of the German East Asian squadron, which encompassed heavy cruisers SMS Gneisenau and Scharnhorst and light cruisers Emden, Leipzig and Kronberg. Already in 1912, the Germans commenced building a defence line around Tsingtao called the Boxerlinie. In May 1914, the German land forces in Kiaochou numbered 45 officers and 1,269 men. After the outbreak of the Great War, on 15 August, British and Japanese warships blockaded the German port of Tsingtao. Their commanders issued an ultimatum for surrender by 23 August. The Germans answered in the negative, and during the first week of September 1914 a Japanese division and a British infantry brigade landed on the northern shores of the Shandong peninsula. Tsingtao was encircled, and on 7 November the German command ordered the destruction of the artillery and the surrender to the Japanese. The SIS mission to Tsingtao received financing from the secret vote but it remains unknown whether the agent ever reached Kiaochow. Before 1920, China was not considered a priority of the SIS.9 China entered the ‘warlords’ era’, a decade of provincial warlords’ armies with ever-changing loyalties which dominated the mainland regions of Sichuan, Shanxi, Qinghai, Ningxia, Guangdong, Guangxi, Gansu, Yunnan and Xinjiang. Yuan had wild aspirations. He put strong pressure on the National Assembly to be elected the new emperor. Eventually, he ‘accepted’ the resolution of the assembly and proclaimed himself emperor of the

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Chinese Empire. From Tokyo, Sun Yat-sen planned to overthrow him. Military governors rebelled against Yuan, who was compelled to abort his accession ceremony. His health deteriorated dramatically. He died from uraemia on 5 June 1916. Vice President Li Yuan-hung succeeded him, and in a doomed bid warlord Zhang Xun restored Emperor Pu Yi for twelve days from 1 July–12 July 1917. Other warlords removed Li from office. Sun Yat-sen returned to China and dissolved the assembly, allying himself with the warlords of South China. In late July 1917 he formed a rival government, called the ‘Constitutional Protection’ government, with seats in Guangzhou. In September, Sun was named generalissimo of the military government. Initially, the warlords of South China backed his regime, but in July 1918 they turned against him and demanded that he establish a governing committee. Despite the war and intrigue in China, Sun Yat-sen closely followed the events in Russia, and at the end of June 1918 he telegraphed Lenin to congratulate him for his leadership in the Russian revolution. The Russian leader had noted Sun. On 15 July 1912 Lenin wrote an article, published in Nevskaya Zvezda, where he called Sun an ‘enlightened spokesman of militant and victorious Chinese democracy, which has won a republic’. The Russian leader arranged for Izvestia to publish Sun’s telegrams.10 Nonetheless, Sun and the Chinese nationalists saw the Western countries as models to follow in establishing the institutions of their republic, and as sources of advice and support. But they soon became frustrated. During the 1919 Paris peace conference, the allies did not hand back to the Chinese the Shandong province (the birthplace of Confucius) after the defeat of Imperial Germany, which had occupied the province. Instead, the allies allowed the Japanese to move in. It was an insult for the Chinese. The May Fourth Movement represented the anger towards the allied attitude towards China. The movement was named after the first demonstrations in Peking (Beijing) on 4 May 1919. The intellectual, student and urban public opinion turned violently against the Western allies who continued preserving their concessions and privileges in China. Mao Tse-tung and Chou Enlai – two initially proWest intellectuals – were now adamantly against Britain and the United States, viewing them as mere colonial powers seeking more privileges in China. Soon both, like Sun Yat-sen, turned for help to Russia, where the Bolsheviks were fighting in the civil war. Eventually, the Soviet Union was the power willing to provide advice and support to the KMT.11

INTRODUCTION

7

In 1920, only after a provincial warlord helped the KMT, Sun Yat-sen managed to restore his authority in Guangzhou. The warlord was Chen Jiongming. Sun Yat-sen was elected president by the remaining members of the 1912 National Assembly, and he approached Moscow, which was willing to provide aid to both the Chinese Communist Party (CCP) and his government. A Dutchman would be first to contact Sun Yat-sen on behalf of the Communist International (Comintern). Hendricus Josephus Franciscus Marie Sneevliet, known as Henk Sneevliet, or ‘Maring’, was born in Rotterdam, Netherlands. The son of a cigar maker, he had joined the Social Democratic Workers Party. In 1920, he contributed as a senior member of the National Labour Secretariat in organising a mass transportation strike. He attended the Second World Congress of the Comintern in Moscow as a representative of the Partai Komunis Indonesia (PKI). Lenin did not hide his admiration for Sneevliet and dispatched him to China to help found the CCP. The Dutchman urged the Chinese communists to form an alliance with the KMT.12 Sun had misgivings about allying himself with the CCP, but he had no other choice; he was desperate for aid and allies and Moscow wanted also to have an ally in the charismatic personality of Sun. By January 1923, Sun had concluded an initial agreement with the Soviet Ambassador Adolph Abramovich Joffe, the chief negotiator of the Brest-Litovsk treaty of 1917 with Imperial Germany. The SIS had two well-placed agents in Shanghai who had access to information on the negotiations between Sun Yat-sen and Joffe. They reported that the Russians offered financial and moral support in return for three conditions: recognition of their government by Sun Yat-sen and KMT, an ‘open alliance’ of both parties and for Bolshevik propaganda not to be hindered in China. Sun Yat-sen did not agree with the third term, but both parties concluded that an agreement would be possible once his KMT government had defeated the provincial warlords. Sun deemed it expedient to have the CCP as an ally against the warlords. Moscow answered Sun’s call for a military academy to educate his party’s officers while the Sun Yat-sen University was founded in Moscow.13 The Russians and the Chinese nationalists worked to establish the Whampoa Military Academy to be the key place of the future military leaders. General Chiang Kai-shek, an officer trained in Japan who was a disciple of Sun and his trusted adviser in military affairs, was appointed superintendent of

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Whampoa. Although he was a communist, Chou Enlai was assigned the political training of the cadets; he recruited cadets for the communist cause in secret, and in the process he acquired a military education – something to be valued by the party in the future.14 Chiang Kai-shek followed the military profession, attending the Military Academy in Baodin. He went to Japan and studied at the Tokyo Shinbu Gakko, an Imperial Japanese army academy preparatory school for Chinese students, and served in the Imperial Japanese Army from 1909 to 1911. On hearing about the Wuchang Uprising, he returned to China and joined the revolutionary militias and later the KMT. At Sun’s request, Chiang Kai-shek visited Moscow, where Leon Trotsky told him that Soviet troops could not be sent to fight the warlords: advisers, economic aid and weapons would be offered instead. General Vasily K. Blu¨cher, the commander of Soviet Far Eastern forces, was appointed Chiang’s chief of staff at the Whampoa. The British general staff was unimpressed with Chiang: ‘not a great soldier, although he has received some military training both in Japan and Russia.’15 In February 1921, Godfrey Denham, the deputy director of the Delhi Intelligence Bureau, working also for the SIS, reached the cosmopolitan Shanghai. By June he had completed a forty-five-page report called ‘Bolshevism and Chinese Communism and Anarchism’, which charted leftist politicians and their organisations in China. He concluded that the Bolshevik activities in the north of the country and the ‘Chinese anarchist party in the south’ constituted threats to British commercial interests.16 Warlord Chen Jiongming turned against his ally Sun Yat-sen. On 16 June 1922, the fighters of the warlord attacked the presidential palace of the Chinese leader in Canton. Chiang Kai-shek, who was in Shanghai, rushed to join his leader – he found him aboard the gunboat Yongfeng. Sun had opened a channel of communication with Moscow which had advised the CCP to join forces with the KMT in August 1922, under the call of anti-imperialism. Sun Yat-sen assumed that ‘Soviet Russia was the only real and true friend of the Chinese revolution.’17 The Comintern helped Sun Yat-sen defeat the warlord’s army, and he re-established KMT’s rule in Guangdong in 1923. In 1924, a prestigious group of eleven KMT party veterans told Sun that the growing communist influence (of the CCP and Moscow) over his regime was a serious threat that undermined his authority. They claimed that there were secret communist cells at every government and party

INTRODUCTION

9

level. The KMT was divided into rightist and leftist wings, though both claimed nationalism and social progress as their aims. Nonetheless, for the time being Sun and Chiang were not alarmed by the communists’ aspirations. The general praised the Bolsheviks for ‘work[ing] for the welfare of their country and the common people, not solely for their private interest.’ On 12 March 1925, Sun Yat-sen died of cancer. A power struggle within the KMT commenced. On 30 May 1925, British and British-Indian police shot at Chinese demonstrators in Shanghai. The 30 May Massacre was followed by demonstrations and unrest in Hong Kong and other cities. Sir Hugh Sinclair, the newly-appointed ‘C’ of SIS, informed Sir Nevile Bland, the private secretary of the Permanent Undersecretary Sir William George Tyrrell of the Foreign Office: ‘in view of the present trouble in Shanghai, it may be of interest to recall that we gave advance information of this in April last, which has already been confirmed up to the hilt by what has actually happened.’ Indeed, in April the SIS had sent the Foreign Office ‘a translation of a very secret despatch dated 26 February 1925, from the Executive Committee of the 3rd International to its centre in Vladivostok’, thus implicating the communists, the Third International in particular, in the troubles in Shanghai. Sinclair insisted on the Soviet hand in these matters. On 25 June, he sent the Foreign Office a report which concluded: ‘the unrest is very largely due to the intrigues of the Soviet Government, and has been very cleverly organised by them.’ The SIS had a spy in the Soviet consulate-general in Shanghai, who obtained and presented to his handlers copies of the correspondence of L.M. Karakhan, the ambassador. The texts were so polemical that British officers remarked: ‘he must have been drunk when he wrote them.’18 In addition, the SIS informed Charles Palairet, the British minister in Peking, that the Russians were instigating the civil war in China. A photograph of a letter signed by the Russian ambassador, ‘procured from a very secret source’, disclosed instructions ‘to local committee[s] in Shanghai to prevent strikers from returning to work and “to incite labouring masses by meetings”’. Palairet gave this letter to the KMT government.19 Winston Churchill, at that time Chancellor of the Exchequer, proposed to the Cabinet that Britain warn the Soviet Union that ‘if bloodshed should unhappily occur in China as a result of a policy instigated by the agents of Soviet Russia, a breach [of Anglo-Soviet relations] might become inevitable.’20 London feared that Moscow would foment revolts

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in Persia and Afghanistan.21 Nonetheless, it was the Foreign Office which was right in its assessment, predicting that Chiang Kai-shek and the KMT would turn against the communists and their Comintern allies once they had defeated the warlords and had unified the country.22 For many junior officers and middle-rank party members, Chiang the soldier was a devoted disciple of Sun Yat-sen; in their eyes he was a leftist who was on good terms with the Soviet Union. On 1 July 1925, the KMT proclaimed a National government at Canton. Wang Jingwei would chair the political council. He would turn into the mortal enemy of Chiang until his death in 1944. Wang Jigwei had studied in Japan on a scholarship of the Chinese government. Soon, he turned against the Qing dynasty and sided with Sun Yat-sen as his most loyal follower and confidant. Wang was inspired by Russian anarchism, and in February 1910 he made an attempt against the life of Prince Chun the regent, the father of Pu Yi. The attempt boosted the revolutionary credentials of Wang. In fact, Yu Yunji and Huang Fusheng, two friends of Wang, prepared a bomb and placed it in an iron vessel; the explosives were from Japan. Their plan was to hide the bomb in a ditch and to ignite it once the prince was seen exiting the palace. One night in April 1910 they planted the bomb; but while they were wiring it they realised that the cable was too short. They wanted to take the bomb back to their house to fix it, but then some guards came out. The conspirators fled without taking the bomb. When they returned the next night the bomb was missing. Obviously it had been discovered and taken by the palace guards. No explosion had been heard. Yu and another man went back to Japan to buy the explosives for another bomb. At that time, a couple of weeks after the discovery of the bomb, a newspaper announced that Huang and Wang Jingwei had been arrested for the bomb plot. The bomb was examined by a specialist of an embassy who was called by the palace. He concluded that it was powerful and could not be made in China; its technology looked too advanced. The palace guards found the iron works where the iron vessel was made and soon all signs led to Huang’s house. Wang was arrested.23 Wang was detained and then released – apparently after Japanese intervention – in 1911. He remained at the side of Sun Yat-sen and eventually became the leader of the left wing of the KMT.24 Chiang, showing the soldiers’ ethos, declined to be appointed member of the political council, and asked for all forces against the warlords to be named the National Revolutionary Army; he made a number of

INTRODUCTION

11

suggestions so that the forces, under his command, would be ready to successfully confront the warlords. Nonetheless, inside the KMT anti-communist sentiment was growing. In the summer of 1925, Dai Jitao, an influential journalist who was an early KMT member and the confidential secretary of the late Sun Yat-sen, published two pamphlets: for him communism ‘mocked Chinese values and threatened its social order.’ He wrote to Chiang warning him of communists’ infiltration of the KMT; however, this only served to make Chiang angry. He appointed Chou Enlai (a high-ranking CCP cadre, later the premier of the People’s Republic of China) chief commissar in the First Division of the most loyal First Army Corps. Chiang who was no leftist, but he needed forces for his expedition and insisted that the alliance with CCP and the Soviet Union was for the benefit of his country. At the plenum of the Central Executive Committee in November 1925, right-wing KMT members agreed to purge the CCP from the KMT and to dismiss Mikhail Markovich Borodin, Moscow’s chief adviser, who had mediated for the ‘United Front’ alliance between the KMT and the Chinese Communist Party. For some years, Borodin was followed by British intelligence. In 1922, he was arrested in Glasgow and imprisoned for six months on immigration regulation violations. Borodin was born in a Jewish family in Yanovich, Belarus in 1884. He joined the Bolsheviks in 1903 and was an associate of Vladimir Lenin’s underground. Borodin spent 1919 to 1922 in Mexico, the United States and the United Kingdom as a Comintern agent. Soon after his release and his return to Moscow, Lenin assigned him to China. Borodin headed the Soviet advisers in Guangzhou, where Sun Yat-sen had established his government. Borodin persuaded the KMT to introduce Leninist principles of democratic centralism. Among the new Chinese institutions he helped establish was the Peasant Training Institute, where the young Mao Tse-tung was an instructor, and the Whampoa Military Academy. Borodin was careful in not siding openly with the CCP and arranged for advice and weapons shipments for the KMT. Eventually, he supported the left wing of the KMT, thus becoming the target of Chiang Kai-shek, who still hesitated to turn against him and Kremlin.25 At that time in Kwantung the KMT and Borodin had agreed for a scheme of an intelligence school for Chinese cadre with Borodin acting as an instructor. The aim of the school was ‘to train theoretically chiefs of counterespionage and intelligence groups, also ordinary agents and

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plenipotentiaries [delegates] of representatives’ in secret intelligence assignments. The school was divided into the Counterespionage Section and the Intelligence Section, and all courses lasted three months. The students took entry examinations, with one requirement being a working knowledge of a European language.26 Russian concepts and spy tradecraft enriched Chinese knowledge of espionage and intelligence. China was the place where seasoned Soviet operatives would gain invaluable experience. Naum Isakovich Eitingon, an OGPU spy was sent in Shanghai and later in Peking and Harbin. Eitingon successfully liberated arrested Soviet military advisers in Manchuria. In July 1929 during the Sino-Russian crisis over the Eastern Railroad, Eitingon was dispatched for intelligence gathering. Later, Eitingon was one of the operational organisers of Leo Trotsky’s assassination in Mexico and was involved in an assassination attempt against the German ambassador in Turkey, Franz von Pappen.27 Stalin asked Chiang Kai-shek for the campaign of the KMT against the North China warlords to be delayed. He was making his own calculations: not to provoke the Japanese by defeating the Chinese warlords in Japanese-claimed Manchuria. The weak China was considered a buffer between the Soviet Union and Japan. Stalin also sought to gain more time for the CCP to prepare to claim power by itself. Chiang was surprised when he read pamphlets against him. Evidently, they were authored by communists. Some in the KMT cadre feared that Wang Jingwei, in alliance with the CCP and Moscow, was plotting to oust Chiang. Wang called for Chiang to go to Moscow and consult with the Soviets on the campaigns against the warlords. According to Chen Lifu (at that time the confidential secretary to Chiang), the general was warned by a member of the Zhejiang Central Executive Committee of CCP after midnight on 18 March 1926 that he was a target of kidnapping by the communists employing the Zhongshan, a gunboat of the Revolutionary Navy. Chou Enlai, at that time in Guangzhou, got wind of Chiang’s intentions to raid the Russian consulate and compounds and warned the Russians.28 Chiang declared martial law in Canton and arrested the crew and Chou Enlai; his troops entered the Soviets’ compounds, arresting diplomatic and military personnel. Chiang decided that now was the time to fight Wang Jingwei and the left wing of the KMT. Communists were expelled from the Whampoa. Eventually Chou Enlai, amongst others, was released. Neither Chiang nor Stalin aimed to break relations.

INTRODUCTION

13

The KMT Executive Committee approved a turn against the CCP, and for Chiang to be assigned the chairmanship of the Military Council. Wang was defeated and had to go to Shanghai and then to France. His confrontation with Chiang was just postponed. The Kremlin did not change its policy towards Chiang because Stalin deemed the CCP too weak to offer an alternative. Chiang campaigned successfully against warlords Wu Peifu and Sun Chuanfang. In early 1927, the CCP and the left wing of the KMT took a great – and fatal – risk: it moved the KMT’s government from Guangzhou to Wuhan.29 The CCP leaders, amongst them Zhao Shiyan, Luo Yinong and Wang Shouhua, inspired by the key episodes of the Bolshevik revolution, assumed that the party should rebel in the urban centres, abolishing the remaining warlords’ rule and thus creating a fait accompli for the nationalist forces of Chiang Kai-shek who officially were their allies. On 19 February 1927, a communist rebellion took place in Shanghai, but the forces of warlord Zhang Zongchang – known as ‘Dog Meat General’ – massacred the rebels. Many were beheaded. The CCP pushed for a strike involving 100,000 workers. The day of the new uprising was set for 21 March. Meanwhile the nationalist armies were approaching Shanghai. The warlords were losing their war in the rural areas. By the evening of 22 March, the CCP had control of the Chinese part of the city; the International Settlement and the French Concession remained under international rule. On 22 March the SIS, which had sources in the Soviet legation, reported that Borodin was concentrating on winning over the Chinese peasantry. According to secret instructions taken to Peking-Soviet legation and communicated to the representative of the Soviet mission and communist groups at Hankow, ‘they should work in collaboration with Borodin, to examine India and to report on the possibility of an early introduction into the nationalist government of the Soviet commissariat system of government, as opposed to the present titular system and the adaption of the Soviet Russian constitution to this system of government.’30 The communists wrongly assumed that their victory over the warlord in Shanghai was the beginning of their revolution. In their turn, Chiang Kai-she and the KMT were not willing to compromise. The epic war for the future of China was about to begin.

CHAPTER 1 SPIES UNLEASHED

Controlling the organised criminal gangs, such as the infamous Green Gang, was the key to controlling Shanghai, the ‘Paris of the East’, the legendary cosmopolitan city of China. But the price of the gangsters’ cooperation was high. By early April 1927, Chiang Kai-shek had reached the outskirts of Shanghai with only 3,000 troops and was staying in a large villa in the French Concession. The main force of his self-proclaimed Revolutionary Army was in Nanking, about to confront the communists. The alwayscalculating Chiang sought a local alliance with the underground in order to raise his chances of success. Du Yuesheng, a staunch Confucian nicknamed the ‘Big-Eared Du’, led the Green Gang of Shanghai. Du had financially supported Chiang for many years, and after secret talks with the French chief of police – who offered Du’s gang arms in return for not interfering with his activities – Du keenly offered his gunmen to Chiang. Many communist cadre did not believe that Chiang would turn against them.1 Stalin had secret intelligence to the effect that the KMT would destroy the CCP. On 1 April he told his associates, ‘we are told that Chiang Kai-shek is making ready to turn against us again. I know he is playing a cunning game with us, but it is he that will be crushed. We shall squeeze him like a lemon and then be rid of him’. Stalin urged the CCP to hide their weapons, to prepare for going underground.2 In Shanghai, Hsueh Yueh, a communist commander, urged for a raid against Chiang’s villa, and his arrest, while he had a small force at his disposal. The Central Committee of the CCP hesitated, incredulous to Chiang’s supposed animosity. Hsueh was ordered out of the city.3

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On 6 April the Soviet embassy in Peking was raided by warlord Zhang Zuolin, the effective ruler of the old imperial capital. The same day, the Supervisory Committee of the KMT decided to wage war on the CCP. The ‘Shanghai Purge Committee’ of the KMT was established to direct the purge. The key motive for this decision of Chiang and his loyal lieutenants (who led China into the civil war) was the fear that the Green Gang, and other political factions, could set up an alliance with the CCP against the anti-communist KMT. In fact, many communists were gang members, for example Wang Shouhua, who led the Shanghai Federation of Trade Unions.4 Chiang’s soldiers joined forces with the Green Gang members, who were under the control of Du. The gang members wore blue denim with white armbands that bore the character for labour. They raided the Chinese part of the city that was under communist control, as well as the International Settlement, ruthlessly hunting their opponents. The arrests and executions of CCP members commenced in the early hours of 12 April. The communists were surprised by the onslaught. Wang Shouhua, a communist labour leader, was murdered in cold blood. Chou Enlai was arrested and mistreated. The purges spread through Canton, Guilin, Ningbo, Amoy and elsewhere. Chen Lifu, at that time the personal secretary of Chiang Kai-shek and for decades one of his close associates, admitted later: ‘It was a bloodthirsty way to eliminate the enemy within. I must admit that many innocent people were killed.’ Six days later, Chiang Kai-shek proclaimed the formation of a KMT government in Nanking, headed by Hu Hanmin. Eventually, Chou Enlai was released on Chiang’s orders.5 The KMT troops and militia defeated the communists in the urban centres. Nonetheless, dozens of well-placed moles within the new KMT government and security services ensured a flow of vital information to the CCP and its Red Army, helping them to survive the Nationalist Army’s campaigns against their base areas until the strategic retreat, the Long March of 1934–35. The purges of CCP members by KMT in 1927 paved the way for the CCP to reorganise the intelligence and security apparatus for espionage and the protection of their cadre.6 Chou Enlai was appointed head of the Central Military Department of the CCP. The Work Section of Special Affairs of the Central Military Department was called to provide for the protection of CCP leadership. It was claimed that the Central Military Department was

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involved in the arrest and execution of a British spy who made a bid against the lives of members of the Soviet Advising Delegation and provided for the protection Mikhail Markovich Borodin, the Soviet adviser to the KMT, until his return to Moscow.7 A few months later, in November 1927, the CCP set up the Special Services Division (zhongyang teke, the teke) – this was the main organisation for espionage and counterintelligence in KMT-held territories; meanwhile, the Commission for Suppressing Counterrevolutionaries operated in the CCP-held areas.8 Despite the KMT’s offensive and success in the city, Chiang Kai-shek had realised that the communists were now holding rural territory, creating a popular base for continuous uprisings. The Special Work Committee was chaired by Chou Enlai and included first communist spymasters Chen Yun, Pan Hannian, Guang Huian and Kang Sheng. In August 1931, Chou was assigned to Jiangxi Province and Kang was assigned the chairmanship of the Special Work Committee for two years, overseeing espionage in Shanghai and the rest of territories held by the nationalist regime. Kang Sheng would not remain a CCP functionary but turn into the secret services supremo who instigated terror, purges and the Cultural Revolution. Born to a landlord family in 1898 and given a classic Confucian education, Kang never respected the moral code that he was taught. As a teenager, he learned the martial arts and swordsmanship of the infamous liumang (hooligans). In 1924, he went to Shanghai and joined the CCP. Once he had graduated from the university of Shanghai, he worked undercover as a labour organiser: he had both a fighter’s and an intellectual’s credentials. In June 1927, he was appointed member of the new Jiangsu Provincial Committee. Within the party, Kang sided with Li Lisan, a leader supported by Moscow and the Comintern. With Li’s backing Kang quickly became director of the Organisation Department of the Jiangsu Provincial Committee. It was clear that the Chinese communist cadre was split between those who were pro-Moscow/pro-Comintern, and those who remained suspicious of the applicability of Soviet advice in China. Among the latter was Mao Tse-tung.9 Kang Sheng had his own private network of spies which originated in Shandong. While on surveillance in Shanghai, he disguised himself as either a rickshaw puller or a ticket seller for the British Tramways Company. He never slept in the same safe house for a second night, always relying on his network for his safety.10

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17

In March 1928, the Special Branch detective Patrick Givens of the Shanghai Municipal Police (SMP) arrested Luo Yinong. It was discovered that in the summer of 1927 Luo and Evgenin Kojenikov, a Russian national had developed a plan to kill Chiang Kai-shek, but this was not authorised by Borodin. The SMP counted that at least six people had been murdered by communists in the summer of 1927 in Shanghai International Concession.11 Chiang Kai-shek was a man known for his short temper who believed strongly in military discipline. Nonetheless behind his military uniform was a character ready to negotiate and gain support from the powerful families of the land. His marriage to Soong Mayling (the sister of Chingling) guaranteed him constant, and abundant, financial support. This man of diplomacy in a general’s uniform had become the prote´ge´ of Sun Yat-sen, and had witnessed both the intrigue and the spying of their opponents. In public Chiang proved himself an authoritarian and stubborn leader and teacher. In fact, Chiang based his rule on a continuous compromising with power factions (such as the Soongs and the clique of Chen Lifu and his brother), the underworld (the Green Gang) and warlords/generals. Chiang was not a suspicious spymaster. He believed in the teachings of both Confucianism and Christianity, creating his own understanding of the value of the benevolent leader and discreetly seeking praise, respect and flattery.12 Only when Chiang Kai-shek realised that the communists had gone underground did he think of establishing a modern secret service, beyond the military intelligence bureau of the general staff. On 4 January 1928, Chiang Kai-shek established the Liaison Group, an intelligence unit manned by ten officers – Whampoa graduates, his former ‘students’ – under his command headquarters. Chiang picked up Dai Li to be his liaison with the group – in effect, he was its leader. Dai Li (born Dai Chunfeng) graduated from Wenxi County Elementary School. Encountering absolute poverty, he left his house when he was sixteen-years-old and joined various gangs. Eventually he found himself in Shanghai, where he worked for Du Yuesheng, the Green Gang leader. Through Du he met Chiang Kai-shek, but he did not cultivate a connection. He returned to his hometown and in 1927, after the suggestion of a friend, he applied to the Whampoa Military Academy. Du Yuesheng wrote him a letter of recommendation, and soon Dai entered the ranks of the cadets of the First Regiment of the Sixth Class of the

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Whampoa. In the Whampoa, Dai Li studied communism (before the purge of April 1927); in Dai Li, therefore, Chiang found an able and willing spy. The young hooligan and gambler turned himself into an obedient servant and decided not to graduate from the Academy, thus depriving himself of the chance of a military career. Chiang had an aide de camp who was well-versed in secret-intelligence gathering and torture methods. Years later, Captain Milton Miles of the US Navy, who had concluded an agreement of training and advice with Dai Li, described the spymaster: ‘he was a white-faced man, rather flat nose, lots of gold teeth in front of his mouth. I found out later he had his teeth knocked down his throat by the Communists in South China and he had them put back in, in gold. He had dark black hair and wide-set eyes . . . I found out that he was a ruthless man . . .’.13 At that time, Miles did not know how ruthless Dai Li was nor the extent to which his humble origins isolated him from the elite decisionmakers close to Chiang Kai-shek. From 1928 to 1931, Chiang had only one official secret service – the Special Investigation Group of the Central Headquarters under Chen Lifu – for espionage and the purging of communists within the government and the KMT. Dai Li led the Liaison Group and went on to lead the Second Section of the Special Investigation Group, spying on the military. He developed personal networks – something that other influential leaders, like Chen Lifu, also did. Chiang Kai-shek was shrewd, and had foreseen this situation. He wanted to have multiple intelligence services competing for money, authority and personnel in order to preserve his rule as the final arbiter. For example, Xu Enzeng, who led the First section, spying and arresting communists, meanwhile fought to preserve the interests of the ‘CC clique’, the powerful politicomilitary group of Chen Lifu and his brother.14 On 1 April 1932, after the Japanese intervention in Manchuria, Chiang Kai-shek established the ‘intelligence organ for military affairs’, an espionage and communications organisation.15 Whenever an intelligence chief fell from grace and was condemned for corruption, the pieces and networks of his intelligence group were picked up by the rival intelligence actors (such as Dai Li) who silently and gradually acquired huge empires of petty spies in republican China, much to the annoyance of Chen Lifu and the Soongs, who had their own armies of spies. The powerful politico-paramilitary organisations the Society for Vigorous Practice and the Renaissance Society operated

SPIES UNLEASHED

19

within the KMT, competing with – not to mention spying on – each other. The Blue Shirts organisation belonged to the Renaissance Society. Its members admired fascism and Nazism; they raided trade union offices and organised mass demonstrations to terrorise the workers. On 26 February 1932, Chiang assigned Dai Li more authority and money to establish a Special Services Department (SSD). This wellfunded organisation would spy on political rivals, the military and the communists. The SSD belonged to the Renaissance Society.16 Generally, the SSD always came second to the powerful CC clique, which for ten years dominated the KMT Organisation Department, overseeing party and government appointments and gathering intelligence while its leaders accumulated immense wealth. The CC clique competed with the Blue Shirts and the SSD for more money and authority.17 In 1932, the Blue Shirts developed the Special Operations Brigades for counterinsurgency and espionage in rural areas claimed by the communists. The troopers were trained in espionage, raids tactics and propaganda, and were led by Chiang’s former bodyguard Kang Ze.18 In their turn, the communist spymasters introduced strict security rules for party cadre on the hunt: no more than five people should attend cadre meetings, and their maximum time for deliberation would be three hours; the same meeting place (i.e. safe house) should not be used three times in a single week; a party organ meeting should have a maximum of seven attendees; and, should a member be arrested, all others should hide immediately. The Politburo conferred in safe houses in the International Settlement in Shanghai: on the ground floor women enjoyed modern music and played cards; meanwhile, on the upper floor, ‘waiters’ served the ‘customers’. Of course, these were really armed security who, in the event of a police raid, were ready to protect the Politburo central committee members who conferred.19 By early summer 1927 the communist spymasters commenced retaliation. The Shanghai Municipal Police (SMP) started investigating assassinations and attacks against nationalists and former-communiststurned-police-informers. The Red Squads undertook these attacks; they were called ‘Dog-Beating Corps’. The demand for hitmen had risen; thus members of the Shanghai underworld found another employer: the CCP. The gunmen dressed like beggars, peddlers and technicians. Some victims were left on the street for passers-by to witness their deaths;

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others were buried secretly. The gunfights took place at the French Concession, the greater Shanghai and the International Settlement.20 In April 1928, the Intelligence Cell was established by the CCP, targeting the Shanghai Municipal Police and the KMT’s Shanghai Garrison Command.21 The Cell was commanded by the resourceful risktaker Chen Geng. Born in 1903 to a wealthy landlord family in Hunan, he joined the army of a warlord at the age of thirteen. After five years he abandoned the military life for a desk clerk vacancy at the Hunan Railway Bureau. Chen joined the Communist Party in 1922, where he met his fellow Hunanese Mao Tse –tung. Soon Chen attended the Whampoa Academy, distinguishing himself as one of the top cadets. Chiang was impressed with Chen and placed him in his own garrison. In October 1925, while the CCP and KMT had formed an alliance on a campaign against the warlord Chen Jiongming and others, Chiang’s vanguard force was ambushed and after heavy casualties started retreating. The generalissimo himself stood his ground and out of despair tried to commit suicide. It was Chen who, surprising him, took his pistol by force and carried him away from the battlefield. Chiang held the brave Chen in a high regard. But Chen became a mole of the CCP within the KMT military in Shanghai. In April 1928, the SMP raided a CCP safe house and arrested Luo Yinong, one of the communist leaders of the March 1927 uprising. Chen Geng sought to examine the breach of security which led to the raid. Gu Shunzhang, a communist spymaster who earlier had been a Green Gang member, learned that a beautiful Chinese German-speaking woman had approached a Special Branch officer at the Louza police station, telling him that she would provide him with a list of the names of 350 communist party members. In return, she wanted 50,000 Chinese dollars and a foreign passport. The woman offered him the location of a safe house to show him that she was in the know. Thus the SMP raided the house. Chen Geng identified the woman as He Zhihua, the former wife of Chu Teh (Zhu De), the top military commander of the Red Army and close associate of Mao until his death. Chu Teh and He Zhihua had both been in Germany in the mid-1920s. Chen and Gu geared up to claim the list. Escorted by Red Squad hitmen, they surprised her and her lover in their house. They soon found the list they were looking for and opened fire against the couple. The shots were masked by Red Squad members firing firecrackers on the street outside.

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The man was killed, while He Zihua survived. However, she was not protected by the SMP, and her whereabouts remained unknown after that episode which cost her the list and the life of her lover.22 During the same period, Chen recruited a mole in the KMT Investigation Office of Shanghai, Bao Junfu. Bao was educated in Japan; he was well known to Japanese journalists, and he kept contacts with the SMP. He offered via a communist friend to meet with Chen, who provided him with a bodyguard/liaison. Bao was promoted to ‘special representative’ of the Investigation Office in Shanghai. He shared information with Detective Inspector Robertson of the SMP. Bao employed Tan Shaoliang, a Chinese SMP clerk, as his informer. In his turn, Chen Geng devised a method for the KMT secret service to kill communist defectors (an assignment of the Red Squads): once Chen was informed that a communist was in KMT custody and was about to defect, he gave Bao falsified evidence so that he could claim that the defector was a communist plant. The KMT agents would brutally interrogate him and, not believing he could be innocent, execute him.23 Song Zaisheng was a secret political investigator in the Wusong Shanghai Garrison Command. The Green Gang bribed him with opium each month. Soon he was promoted in the KMT security hierarchy in Shanghai. He was friends with a Chinese policeman of the French Concession, Fan Guangzhen, who informed Song when the French police were planning to raid a communist safe house. Song was also approached by left-oriented Chinese who had turned against communist leaders like Li Lisan. In reality, Song was a mole handled by Chen Geng.24 In March 1933, Chen was discovered and arrested by the KMT. Surprisingly, his life was spared. Chiang, the leader who believed in benevolence, remembered the man who had saved him. Chen was put under house arrest in Nanking but soon escaped with the help of other CCP members. Chiang did not unleash the security services against Chen. Aboard a train en route to the CCP stronghold of Jiangxi Chen was recognised by Qian Dajun, his formed instructor at Whampoa Military Academy. Qian invited Chen into his coach; initially he pretended to be a businessman, but to no avail. Eventually, they both sat at the table and discussed matters. It was a surreal meeting of two enemies. Qian boasted that he was dispatched by Chiang Kai-shek to Jiangxi to help plan another campaign against the CCP. After a while Chen excused himself and left Qian’s coach. He hid in another wagon but soon was discovered by one of

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Qian’s officers who told him that his general was still waiting for him. They ate dinner and Qian let Chen escape, later arguing that Chiang was about to order Chen’s release anyway (if he was still in custody) and certainly would not have executed him. Eventually, Chen reached the base areas in Jiangxi and followed Mao in the Long March.25 Nonetheless, KMT counterintelligence did not detect Qian Zhuangfei, Li Kenong and Hu Di, the communist moles who infiltrated signal communications departments. Qian studied radio communications at the Shanghai Telecommunication Administration. On graduating, he took up a post at the same organisation. The mole was trusted by Xu Enzeng, the director of the Shanghai Telecommunication Administration who was the cousin of Chen Lifu and an antagonist of Dai Li. The industrious Qian was appointed Xu’s confidential secretary and ‘offered’ new opportunities as a spy. In February 1928, the KMT’s Central Organisation Department was established as the KMT secret service. Enzeng was appointed its head in Nanking. Qian essentially became the second most powerful figure after Enzeng. His access to top-secret documents was absolute; he was even entrusted with correspondence for Enzeng. Qian disclosed intelligence about Chiang Kai-shek’s plans against the Red Army of the CCP (also known as ‘encirclement campaigns’). The KMT Investigation Division established a double-agent organisation with Qian as its de facto head. After the direction of Chou Enlai, Li Kenong joined Qian in his game. Li Kenong reached Shanghai in 1928 to work under the cover of a journalist with the alias Li Zetian, and he was hired by a KMT radio communications establishment.26 Both Qian and Li Kenong accessed Xu Enzeng’s cipher. In addition, the Intelligence Cell penetrated the headquarters of the KMT’s Shanghai Garrison Command and the headquarters of the Shanghai International Settlement Police.27 Once Li Kenong was informed that Xu Enzeng would establish local intelligence branches to support the Investigation Division in several cities, he informed the Intelligence Cell. The Cell ordered him to offer his help to Xu in this task. The new local branches operated under the cover of news agencies in Nanking and Tianjin. Eventually, Hu Di, the third mole, was ordered by Xu to head the secret branch in Tianjin under the cover of the Great War News Agency.28 In March 1931, in the Jiangxi– Fujian Soviet (the largest component territory of the Chinese Soviet Republic proclaimed in November 1931), the CCP established the Political Security Department (to be renamed

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the State Political Security Bureau, SPSB). It undertook the functions of the previous Commission for Suppressing Counterrevolutionaries. It initiated large-scale purges of people accused of espionage and treachery. The Futian incident had shaken Mao Tse-tung’s trust. Thousands of Red Army soldiers had mutinied, and Mao ordered them executed. Fear of KMT secret agents in CCP-held territories spread. Party cadre wrongly assumed that the ‘Anti-Bolshevik Corps’ (AB Corps) was a secret army of the KMT within the Red Army; the real – and weak – AB League was led by Duan Xipeng and Cheng Tianfang.29 The Political Security Department and State Political Security Bureau, modelled on the structure of the Soviet GPU and the NKVD, recruited thousands of spies to keep the Soviets safe from spies (real and imagined). These agencies had local branches in provinces and counties, and they kept a close eye on the CCPs and local party services in districts and towns. Red Army ranks were also watched. The State Political Security Bureau established branches’ and informers’ networks at all levels of command.30 In the period 1931–34, in the Jiangxi, Hubei, Henan, and Anhui CCPs’ base areas, the ‘counter-revolutionary’ terror led to the execution of thousands of innocent people.31 Within the Red Army, the networks of informers were innumerable. Li Mingrui, the commander of the Seventh Red Army, made a bid to defect to the KMT, but he was killed by his SPSB bodyguard in November 1931.32 The CCP spies had already infiltrated KMT security services but not yet Chiang Kai-shek’s high command. The fear of more defections to the KMT, and of more arrests and executions, compelled the CCP leadership to organise its sixth congress in Moscow in 1928. Stalin, who did not want to break with Chiang Kai-shek, authorised for the CCP to receive 15,000 rifles, together with 10 million cartridges and 30 machine guns, to resist the KMT’s onslaught. Playing a double game, he propagated the idea that insurgency was the only option. In August 1927, the Comintern dispatched an agent to Shanghai with US$300,000 for the CCP. Stalin’s aid was meagre in comparison communists’ needs.33 The Russians sounded willing to help the Chinese communists in intelligence training as well as signals intelligence: at that time the CCP signals intelligence capabilities were almost nonexistent. Chou Enlai, who was a communist with official military training and had risen to the status of an intelligence supremo, held discussions with the Soviets. It was agreed that ten CCP cadre would be trained for two years at

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Leningrad’s Frunze Military Communications School and the Comintern Radio School in Moscow, starting from summer 1928. Ciphers were handed over for safe communication between Moscow and the CCP. But the Chinese students were not trained in cryptographic methods; only in 1942 did the Soviets and the Chinese discuss cryptography. That same year, the 4th (Communications) Section of the SSD commenced training personnel in signals intelligence in Shanghai. The twenty-three-year-old Li Qiang, a former civil engineering student, led the 4th Section. He was assisted by Zhang Shenchuan, who, under a false name, studied at a Shanghai radio school while from the same building operating the communications office of the 6th Army of the KMT. Eventually, Zhang was recruited in the office for night shifts. He copied codebooks, call signs and frequencies used by the KMT. This signals intelligence mole had access to radio equipment the sales of which was under strict KMT control.34 Li Qiang recruited agents to buy radio components and spare parts in Shanghai and Hong Kong. Slowly, foreign language manuals were translated into Chinese to facilitate the training of new CCP operators. By spring 1928, Peking was controlled by warlord Zhang Zuolin, the ‘Grand Marshal’, the effective the ruler of Manchuria. He convinced Wu Chin, the vice minister of foreign affairs for the police and gendarmerie, to hunt CCP and KMT members seeking refuge in the Russian embassy in the Legation Quarter. On 6 April, 300 police and gendarmes entered the Russian legation and arrested many Chinese, among them Professor Li Ta-chao, one of the founders of the CCP. The policemen were surprised to see the office of the Russian military attache´ set on fire. They rushed to save the building and soon discovered documents implicating Russian diplomats and advisers to the KMT in espionage and propaganda. The documents were examined and translated with the help of French and British diplomats (and intelligence officers) and some were published in newspapers. It was revealed that the OGPU had access to some telegrams of the British legation sent to London. In a letter to the Foreign Office, drafted by Ambassador Sir Miles Lampson and dated 30 July 1928, British involvement in the Chinese raid on the Russian embassy was hinted. Zhang Zuolin was a proBritish, pro-Japanese warlord who had raided the compound but recently died. Lampson wrote: ‘The raid on the Soviet Embassy, for the assistance in which he [Zhang] remained, I think, always grateful to me,

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gave him the opportunity to master the situation.’ A London source of the OGPU sent a report which was received on 6 April 1927, which read: ‘investigations in official circles in Whitehall prove up to the hilt that ostensibly this is a move on the part of Marshal Chang [Zhang] Xiaoling (Zuolin). The masterminds behind the scenes are undoubtedly represented by British, French, German, American, Italian and Japanese interests.’35 Moscow was wrong: the Chinese warlords were taking orders from no one and did not owe anyone their loyalty. Zhang Zuolin became the target of Japanese secret services. On 4 June 1928, they planted a bomb in his train. He was severely wounded and died few days later. Zhang Xueliang, the son of Chang (nicknamed the ‘Young Marshal’), succeeded him. He cultivated good relations with Chiang, whom he needed to control Manchuria. Zhang wanted to avenge his father’s death, but he provoked the Russians. In April 1929, the warlord’s troops attacked the Soviet consulate in Harbin without the agreement of Chiang. Diplomats were maltreated and ‘incriminating documents’ of espionage were found. Chiang had promised Zhang troops; the Manchurian planned to take over the Chinese Eastern Railway, administered together with the Soviets. An earlier confrontation of Xueliang’s father in 1925 had ended up with the arrest and maltreatment of Russian officials of the Chinese Eastern Railway. On that occasion Moscow did not confront the warlord; the Young Marshal wrongly believed that the Russians would again abstain from action.36 But Moscow surprised both Xueliang and the nervous Chiang. On 12 October 1929, Soviet troops invaded Manchuria, destroying Zhang’s best formations. Zhang desperately sought immediate reinforcements from Chiang; but fearing escalation that would lead to a total defeat, the generalissimo abstained. Eventually, in December, the Chinese government and Moscow agreed on the Khabarovsk Protocol. Stalin asked for reparation and for a return to a joint administration of the railway. For some time Stalin observed the Japanese policy in the Far East, fearful of war; this explains why he did not put more pressure on Chiang. The ruler of Kremlin wanted China to turn against Japan. In its turn, Tokyo concluded that Chiang stood no chance of provoking the Soviet Union again. The Japanese strategists noted that the other great powers had not turned against the Soviet Union. In any case, Manchuria was deemed a key area to safeguard Japan’s autarky in resources for future total war mobilisation.37

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In the meantime, the KMT police and counterintelligence, employing defector’s information and signals intercepts, pinpointed and raided the covert radio training centres of the 4th Section of the SSD. In December 1930, Zhang Shenchuan and twenty other radio students were arrested. The CCP cadre sought refuge in Shanghai’s French Concession and International Settlement. Due to a lack of resources their training in radio communications slowed down dramatically. In 1931 the 4th Section of the SSD managed to establish radio communications between the secret party headquarters in Shanghai and the CCP Southern Bureau via a secret station in Kowloon, intercepting KMT radio propaganda and enciphered military communications.38 In Hankou, Wuhan in early 1931, a magician appeared sporting European clothes. His name was Li Ming. Li’s performance was elaborate, but he drew suspicion because he never exited his dressing room after his performance in the Pacific Hotel, where he was staying. Nonetheless, many suspected communists visited him, as well as some high-ranking KMT officials. Dai Li’s agents put him under close surveillance. One day, Li Ming went out for a walk. It was the KMT spy Wang Zhu Qiao who first suspected the magician, calling for more agents to follow him. The agents photographed Li and sent the photo to their headquarters in Nanking. Soon he was identified as Gu Shunzhang.39 Gu Shunzhang was born in Baoshan, Shanghai in 1903 and lived in the slums of the city. He worked at Nanyang Tobacco Factory, where he was a trade-unionist, before joining the CCP. In 1926, the savvy Gu was sent to Vladivostok for intelligence training. Upon his return, in March 1927, he took part in the communist capture of the city. Gu had received orders from Li Lisan, the dominant leader of the CCP between 1928 and 1930, to go with a team of assassins to murder Chiang Kai-shek in Wuhan. On hearing that the magician was Gu, Xu Enzeng ordered Cai Mengjian to arrest him. On 24 April, KMT agents raided Gu’s room and took him into custody. Surprisingly, Gu warned the head officer, He Chengjun, not to telegraph Nanking, out of fear that this would be intercepted by his comrades. Evidently, Gu was seriously considering defecting, even before Xu offered him the opportunity to. He Chengjun disregarded the warning, seeking to boost Chiang Kai-shek’s regard for him and his security chiefs. Six telegrams on Gu’s arrest were sent, but Xu did not read them on time – he had left his office by 6 pm.

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When Gu was told about the telegrams, he was furious. He shouted at He Chengjun: ‘That does it! You’ll never lay a hand on Chou Enlai now!’40 Qian Zhunzhang, the CCP mole, was the first to read the telegrams. He told Liu Qifu, his son-in-law, to rush to Shanghai to alert Li Kenong, Chen Geng and Chou Enlai. Once informed, Chou Enlai took it upon himself to organise the escape of his five-hundred or so cadre and spies. Indeed, for two to three days after the arrest of Gu the communist underground in Shanghai was in panic – it was widely assumed he would either confess under torture or defect.41 The next morning, Xu was given the telegrams; he gave orders for Gu not to be maltreated. Xu had turned many communists into informers, and he would try to do the same with Gu. Xu ordered that the first meeting not take place in a grim cell but in a specially-prepared reception room. The men were left alone to discuss politics. The USeducated Xu Enzeng realised that the spymaster opposite him was not a devoted communist. At the end of their meeting, Xu gave Gu two options: defect, and join KMT, or be executed. He had two hours to think it over. Eventually, Gu said that he would join the service of Xu. Escorted by two agents, Xu and Gu went to the Central Hotel, where in a luxurious room Gu took the National Revolution Oath. There, he revealed to Xu that the mole inside his own office was Qian. Gu also revealed that one of Chiang’s confidential secretaries was a communist mole, but he did not know his name. The surprised and furious Xu tried to find Qian, who was reported missing as of the same morning. Fearing for the security of his family, Gu asked Xu to protect them; the spymaster quickly dispatched agents from Nanking, but when, after seven hours, they reached his house in Shanghai there was nobody there.42 The de-briefing of Gu by the KMT security officers was much anticipated. He proved himself a ‘living dictionary’ of the CCP spies’ rosters. The information he gave directly contributed to the collapse of the networks in Hankou, Nanking, Tietsin, Peking and Shanghai. On 22 June, the Secretary General of the CCP was arrested and executed. In total, 40 senior cadre and 800 party members were arrested and executed because of Gu. Gu was worried about his missing family. On 28 September 1931, the SMP arrested Wang Zhuyou, who had worked in the Red Squads under Gu. On being informed of this, Gu said: ‘if there is any news about my

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family, this man is the one to know about it’. Gu informed KMT security that the arrested man’s real name was Wang Shide. Soon, the assassin was brought to Nanking and given the choice of defection or execution. He was not mistreated. He defected to the KMT, eventually admitting that Gu’s family had been murdered on orders from the CCP. Wang, Gu and Guo Deji (the KMT’s head agent), along with escort agents, went to the Shanghai International Concession at 11 Haitang Lane. Following Wang’s guidance, labourers were ordered to dig up an alley. Curious onlookers and journalists came to watch what was going on. Two bags were found; each contained two decapitated corpses. Gu recognised his wife, brother-in-law, mother and father-in-law. Wang Shide revealed that he did not execute Gu’s son, Ansheng, and that he had arranged for him to be sent to Gu’s native county, Songjang. Gu was in shock. Wang Shide led the KMT agents and the SMP to five other sites, where the bodies of more of those killed by the Red Squads were exhumed. These revelations proved to the onlookers and the press that the SMP could not ensure the safety of the International Concession. The SMP intervened, stopping KMT security from exhuming more bodies. It was concluded that Gu’s family had first been held in custody and then, when it was understood that he had defected, executed.43 Gu’s defection led to the arrest of Bao Junfu.44 Gu also told the KMT that Li Kenong – who by that time had fled – had access to Chiang Kaishek’s codebooks; for some time, Li was one of Chiang’s personal decoders.45 Two other members of the Shanghai Bureau of the Comintern, Li Zushen and Sheng Zhongliang, were arrested and put under interrogation. Eventually, they offered intelligence on their organisation in order to save themselves from execution. Otto Braun, the leading Comintern agent, wrote in his memoir that the information they gave to KMT security services ‘resulted in the seizure of many leading cadres in the White [KMT] areas, the collapse of central and local Party organisations and the loss of important documents.’46 The Red Squads and the Investigation Department of the KMT escalated the war in Shanghai. French police reported that the communists recruited ‘the agents-executors among people of the lower classes. These agents were fed and nourished by the CPU and received 15 dollars a month. They did not know the names or the circumstances of the persons that they were going to assassinate, and it was not until the day afterwards that they learned via the newspapers the names of

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their victims.’47 On 21 November 1932, the Red Squads raided Special Services headquarters in Shanghai, killing the head of the unit, Zeng Boquian, along with his wife and three other agents.48 On 22 April 1932, Wang Bin, a detective superintendent of KMT military headquarters of Shanghai, was shot on the spot by two Chinese agents dressed as foreigners. The previous year, Wang had arrested Xiang Zhongfa, the secretary general of the CCP, who had later been executed. On 25 November, six Red Squad hitmen, with the help of a KMT agent who had defected, raided an Investigation Department safe house in Zhabei. One person was killed and three others wounded. On 11 April 1933, five Red Squad hitmen were drinking at a cafe´ when they recognised four agents of the Investigation Department. The Red Squads opened fire, killing one and wounding two, before making an easy escape through the busy streets of Shanghai. In December, another Investigation Department agent was murdered on the street by the Red Squads, as he went to give evidence in a court case. The CCP party headquarters moved from Shanghai in secret. Among the spymasters who remained in the city was Kang Sheng, who was styling himself as a theoretician, secretly publishing propaganda papers.49 On 14 June 1933, Red Squads murdered Shi Jimei, the head of the KMT’s Shanghai Bureau of Investigation, in the centre of the International Settlement. Shi had a reputation for being an efficient hunter of communists, and was responsible for the kidnapping of the leftist writer Ding Ling. After the shooting, one Red Squad member, Ding Mocun, was arrested; later, he defected to the KMT (and then, as we will see in the following chapters, to the pro-Japanese Wang regime). Shi’s successor, Qian Yizhang, was also killed by the Red Squads. He was shot as he was waiting for the elevator on third floor of the Chunghua hotel in Shanghai. In the meantime, the Blue Shirts had identified Kang Sheng as a communist spymaster, including him in a killing list. Perhaps he was informed of this, or perhaps he simply wanted to advance his career – either way, he opted to go to Moscow with Wang Ming, an antagonist of Mao, putting him, for now, out of harm’s way. In his place, Kang left Li Zhusheng, a communist trained in Moscow who was a supporter of Wang. Nonetheless, on 14 June 1934, the Shanghai Municipal Police and the French concession police raided a number of communist hideouts. Among the arrested was Li, who defected to the KMT. On 27 September, the nationalist security services

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arrested the leader of the Red Squads, Guang Huian (one of Kang’s henchmen), along with thirty-five others. After this, the CCP’s Shanghai secret service capabilities were almost nullified.50 Until 1934, Gu advised Dai Li, and he became the head of the communist intelligence officers-defectors within the KMT secret services. He revealed CCP sources and methods of communication, as well as the organisation’s structures. He brought with him his own book about Soviet tradecraft, The Theory and Technique of Special Operations. Other books about the CCP taught in KMT intelligence training courses were on the GPU and Cheka. Gu Shunzhang was a man who always surprised his friends and foes alike. Chiang discovered that the spymaster was secretly setting up a ‘New Communist Party’.51 In June 1935, Gu was secretly executed in Suzhou prison. It wasn’t just his Machiavellianism that made others fearful of him; he was believed to be a real magician and hypnotist, a man who could escape handcuffs.52 Some Chinese intelligence officers believed that the murder of Gu was orchestrated by Chen Lifu, who led the rival intelligence organisation the Central Bureau of Statistics.53 The same year, in Shanghai, the SSD laid a trap for the Red Squads. A communist was employed by the SSD to report on his organisation, but he was discovered and shot and eventually found, badly wounded, by the Shanghai police. Under the direction of Dai Li, the plot was put into action: a Shanghai newspaper published an article which claimed that a badly wounded communist was under the care of the police. Dai Li would wait for the assassins to reach the hospital to kill the defector, and then have his spies follow the killers to their nest. However, the SSD agents did not spot the visitors of the patient who shot him dead, and a street by street manhunt ensued. By pure luck, one assassin was located in a silverware store in the French Concession. Dai Li ordered a raid; three men and a woman were arrested, armed with six pistols. They were executed.54 In another episode, the communist Lu Haifang was arrested by the SSD; just as he was about to be tortured, he offered to give his captors the information they sought. Lu Haifang was no low-rank cadre; he was the secretary of Noulens, the top Comintern agent in the Far East who had been arrested by the SMP on 15 June 1931. Lu provided a stream of intelligence on Comintern, the CCP and their networks of agents and sympathisers. Eventually, Noulens and his wife were sentenced to five

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years’ imprisonment in Nanking; later, when they were released by the Japanese, they disappeared – probably returning to the Soviet Union. While they were in prison, they were visited by Soong Ching-ling, wife of Sun Yat-sean and sister-in-law of Chiang Kai-shek. She talked to the press about the need to release them. But she also kept the CCP wellinformed; she was its secret contact, as Chou Enlai would admit during the Xian incident (which we will explore in the following chapters).55 In any case, she was under the constant surveillance of Dai Li’s spies. At one point, Chiang himself approved a plan, involving a staged accident, which had the aim of threatening her after she publicly accused his government of murdering the writer Yang Xingfo. In the end, Chiang cancelled his order because he was afraid that his agents would kill her – in which case, he would take the blame from his wife and his brother-in-law.56 The hunt for communists was frantic. Under torture CCP agents revealed addresses close to safe houses aim to attracting the police – thus warning their comrades to hide – once they realised that the police and the secret service agents of Dai Li were deploying close to the real safe house.57 Dai Li was disappointed with the SSD in Shanghai. During a dinner he angrily shouted to his top brass: ‘If we go on in this way our work is going to collapse. How can you manage not to penetrate a single Communist organisation?’ Chiang was also angry about his secret agents not having any success beyond the defections of a few arrested communists. Neither knew that in 1931 the CCP Central Committee had moved from the French Concession to the mountains of Jiangxi.58

CHAPTER 2 FAILED CAMPAIGNS

The over-confident Chiang Kai-shek ordered his forces to attack Red Army area bases. In the Jinggang Mountains, Mao and General Chu Teh (Zhu De) had created the 4th Red Army.1 Chu Teh was a man wellversed in Chinese military theory and practice. He was born in 1886 and adopted by a wealthy family. Thus he was able to attend the Yunan military academy before joining a warlord’s army and himself becoming a warlord. He served in the rebel forces, the Beiyang Army and the secret society of Tongmenghui, which was considered the forerunner of Kuomintang. During the revolution of 1911, he served under Brigadier Cai, advancing against imperial forces in Sichuan. By 1916, Chu Teh held the rank of brigade commander. For years later, he was named the public security commissioner of the provincial government for Yunan. After the death of his first wife, his second wife and child were murdered by rival warlords. In Shanghai in 1922, his application to join the CCP was turned down because he was a warlord. The same year, Chu decided to go to Europe for studies. He studied at the University of Go¨ttingen until 1925, where he was involved in leftist protests. He married again, but he soon divorced his wife, who unsuccessfully tried to pass a roster of communist spies to the KMT in Shanghai. In Germany, Chu Teh met with Chou Enlai, before the latter joined the Whampoa military academy. Chou Enlai supported Chu’s new application to join the CCP. In July 1925, Chu Teh was allowed to go to the Soviet Union and study military science. A year later, he returned to China. Chu Teh was nominally serving the KMT. Thus, when the order came to destroy the communist cadre in Nachnang, he

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defected, leading his 10,000 troops to the Jinggang mountains to support the forces of the then political commissioner, Mao Tse-tung. In 1931, Chu Teh was named commander of the Red Army in Ruijin, winning battles against the nationalist forces.2 The KMT planned for ‘encirclement’ campaigns against the Honghu Soviet (part of the stronghold called the Hunan-Western Hubei Revolutionary Base Area). The first campaign of the Nationalist Army led to defeat in January 1931. In May 1931, troops of the 1st Front Army deployed around Donggu in central Jiangxi, led by Chu Teh and Mao, received specific warning. Their opponent was the KMT 5th Route Army. At 6pm on 12 May, the 28th Division of the 5th Route Army sent a message to another unit without employing a code. The KMT forces were planning to reach Donggu, commencing their march early the next day; the message referred to tactics and their objective. Once in possession of this vital piece of intelligence, Chu Teh and Mao planned an ambush, and after a two-day battle their troops destroyed the 28th, 43rd and 47th divisions of the 5th Route Army. The commander of the 5th Route Army was forced to abandon the attempt for a ‘second encirclement’ of the Red Army.3 The KMT made its ‘third encirclement’ bid in July 1931. Nonetheless, on 23 July the CCP’s 3rd Front Army intercept unit deciphered a signal from the KMT commander, He Yingqin, to his divisions, ordering them to deploy to the banks of the River Gan in west Jiangxi. On 31 July, another signal informed the divisions of the routes to be followed in preparation for the assault. This signal was also intercepted and deciphered. In response, units of the 3rd Front Army advanced covertly, and in August they were united with the 1st Front Army at Junbu. Eventually their opponents, four KMT divisions, were defeated. Mao acknowledged the major contribution of radio specialist Cao Xiangren, who had decoded He Yingqin’s signal.4 Meanwhile, the signals capabilities of the CCP in Shanghai were depleted by arrests and defections. In Jiangxi, Chou Enlai was appointed Secretary of the Central Soviet Bureau, based in Ruijin. Among those he joined there was Zeng Xisheng, who would later command the 1st Front Army’s signals intelligence.5 Zeng had served in the SSD, being assigned the security of the 4th Section training programme. Beyond coordinating liaisons between the CCP leadership and the Red Army, under Chou Enlai’s instructions, Zeng was the case officer of KMT

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Major-General Li Minghao, who had become a mole, providing intelligence on the failed ‘encirclement campaigns’ to the SSD.6 Meanwhile, Tokyo closely observed the politico-military developments in China. In Japan’s eyes, China was being weakened month by month by the civil war. At the end of January 1931, a unit of Japanese marines landed in Shanghai to offer protection to Japanese citizens who had to confront daily anti-Japanese riots. Chinese troops fired at the Japanese marines; the Japanese retaliated with air bombing, killing many civilians. Chiang took personal control of the Chinese military response. Soon Japan deployed 50,000 troops to Shanghai. On 1 March, Japanese ships steamed up the Yangtze to Liuhe, transporting 10,000 soldiers. The Chinese retreated. Chiang accepted that the only option was a truce. Eventually, Japan agreed for its troops to be deployed outside Shanghai.7 In August 1932, a Dutch cryptographer, appointed by Chiang Kai-shek himself, helped upgrade the encryption of the KMT commanders’ messages. CCP members’ defections to the Nationalist Army had disclosed its previous signals intelligence capabilities. In early 1932, during the Red Army’s attack on Ganzhou in south Jiangxi, the 3rd Front Army lost 3,000 troops, among them some senior commanders. In July, an attack against Nationalist Army forces in Shuikou in northeastern Guangdong also failed. Both catastrophes were in part caused by a lack of warning intelligence and signals intelligence of the opponent’s plans – in both battles the nationalist forces were underestimated in number.8 The conventional military confrontation escalated. The radio training for the units intensified. Mao, at that time the 1st Front Army Political Commissar, showed interest in developing the signals intelligence capabilities. On 4 January 1931, he and his military counterpart, Chu Teh, personally greeted ten KMT radio operator prisoners who had offered to serve in the Red Army. One of them was Lieutenant Wang Zheng of the 18th Division. He had graduated from the Whampoa Military Academy and Nanking Military Communications Technical School. Together with the other operators, he repaired radio equipment and trained Red Army personnel, disclosing radio call signs, ciphers and frequencies, and KMT’s cryptographic techniques. At that time, the KMT only employed radio communications rarely – only at brigade and division-level units. Morse messages were transmitted in clear four-digit numerical groups, or in alphabetic trigraphs; security precautions were seldom taken.9

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In August 1932, during combat in Yihuang, central-east Jiangxi, Red Army troops discovered a document in a KMT officer’s briefcase; it was an enciphered battle order from KMT 9th Route Army commander, Sun Lianzhong. Even Chou Enlai, at that time Red Army political commissar, worked on decoding the message, which was eventually decoded in October.10 The Nationalist Army’s ‘fourth encirclement’ campaign took place in January– March 1933. The signals communications of the Nationalist 5th Army chief, Luo Zhuoying, and his field commander, Xiao Qian, were intercepted and decoded. Eventually, this led to the destruction of Xiao’s 11th Division at Caotaigang in March. The remaining Nationalist Army divisions withdrew, leading to the end of the campaign. But Chiang Kai-shek was not willing to admit defeat. In September 1933, another campaign commenced. A British officer made a bid to follow the nationalist forces and report on their performance. Raymond Dewar-Durie was a young lieutenant serving with the British legation in Peking (Beijing). He was asked by the British minister to follow the nationalist forces and report on their performance. Dewar-Durie was born in Persia in 1905 and attended the Sandhurst military academy. In 1941 Dewar-Durie escaped from Shanghai where he was a liaison officer for the consulate to Chungking, before being recalled to Britain. In 1949, he became assistant military attache´ to the British embassy in Nanking, and was involved in the HMS Amethyst incident. He was the interpreter of the assistant naval attache´, Lieutenant Commander John Kerans, who assumed command of the frigate.11 Dewar-Durie wrote that about 330,000 nationalist troops were assigned in operations against Jiangxi ‘central soviet’. The total communist manpower was between 400,000 and 450,000.12 Commenting on operations in Jiangxi, Dewar-Durie admitted to having consulted not only Chinese officials, but also missionaries, a German adviser and US and Japanese consular officials in Hankow. He had a ‘second hand’ knowledge of the guerilla-held areas.13 ‘In spite of having several German advisers at their disposal the National troops are making very slow headway . . . this is largely due to the lack of co-operation between the various forces which ostensibly are all trying to work towards the same goal, namely the encirclement and elimination of the “Red” forces. Poor leadership, absence of pay, lack of rifles and ammunition, and bad communications all play their part also in adding to the difficulties of Chiang Kai-shek’, concluded

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the General Staff in London upon receipt of Dewar-Durie’s report. One staff officer noted: ‘We know from most secret sources that the Italians have been making great efforts lately to sell their machines (airplanes) and to supply pilots to the Chinese Government’.14 With the help of General Alexander von Falkenhausen and the German staff officers mission, Chiang made a bid to modernise his armed forces. Nazi Germany offered to help China produce Maxim machine guns, trench mortars and artillery pieces. The German Karabiner (KAR) 98k rifle was the model for the Chinese-made ‘Chiang Kai-shek rifle’. The Chiang Kai-shek and Hanyang 88 rifles remained the main firearms used by Chinese armies. In 1935 and 1936, China ordered the German M35 Stahlhelm and an immense number of Mauser rifles. Chiang acquired a small number of Henschel, Junkers, Heinkel and Messerschmitt aircraft. Dewar-Durie reported of three German advisers in Jiangxi: General Wetzel, Captain Mu¨ller and Colonel Heinz in Chiang’s staff. Dewar-Durie said of Heinz, ‘though he was unable to disclose any plans was most courteous and entertaining. He remarked that the great drawback is lack of uniformity in training or any standardization of Divisions with their equipment. Again, many officers, once seemingly efficient, soon relapse into the old slack ways on returning to their Division. Some training has been done in the hills but far too little, and units are averse to any expenditure of ammunition for rifle practice. Field exercises are rare, and the German state that too much time is spent in theoretical work.’15 The lieutenant offered information about the Red Army’s tactics and training: The Reds have naturally been hard at work during the last two years undermining the allegiance of the Government troops. Their most important successes this year being the turning over in their entirety of the 52nd and 59th Division (not having received any pay for 2 to 3 years?). The Communists hold out prospects of equality, regular food and pay for all, but, men who go over are not necessarily accepted by them. When captured and if found suitable a proportion are allowed to remain, but they are more usually given two or three dollars for their rifle and sent back. Officers above the rank of Colonel are promptly done away with and all others are also liable to get short shrift. According to the success of their propaganda so do the Communists change their method of

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driving out garrisons. One favourite way is the rumored impending attack by tens of thousands of Reds – if the troops are not in strength they beat a hasty retreat. Provided, however, the Government troops have a few resolute commanders as at Nanfeng and Kian, the walled cities are practically impregnable.16 Considering the intelligence-gathering of the communists, he continued: ‘spying is carried out within the Government lines and vice versa, but it is not nearly so easy for the agents of the former and the price per trip is steadily rising owing to the non-return of spies. There is no mercy shown on either side, and two bodies at Changchu testified to the treatment given to spies or smugglers. If carrying the necessary paper entry and exit is not difficult. For instance, one Government employee in the printing works has made a yearly visit into Red country to attend to the harvesting of his crops.’17 In any case, ‘both sides are equally hard on suspects and should Reds regain a partisan district and discover anyone who has assisted the Government troops in any way they deal with them very severely, while the troops to overcome the reluctance of the peasant to assist their “deliverers” resort to force. From firsthand information of a participant more than one bandit has died under torture. From all accounts life in the Central Red district is just as hard for the non-combatants, and owing to the numerous informers, fear governs every move. If the Government can hold the land that it has taken by propaganda, combined with practical relief and fair government the masses will aid with them, and this policy is, as Chiang Kai-shek says, seven-tenths of the battle. Thus the belt thrown round the Red Central Districts will be strengthened and thickened and the blockade will become more effective.’18 Every communist soldier was paid USD 3 per month: ‘it is reported that even Chu Teh (Zhu De) himself only receives this amount’ commented Dewar-Durie. The discipline of the units was strict and there was fear among the cadre that informers were everywhere. The communists had few rifles – only some 100,000 to 120,000. There were four men to a rifle: ‘if Nos 1, 2 and 3 fall it is the duty of No. 4 to escape with the rifle and ammunition’ noted Dewar-Durie. The food supplies of the Red Army were deemed sufficient. Local peasants supplying food were paid either with cash or by a credit note issued by a communist officer. The ammunition quantities at the disposal of the Red Army were

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‘limited, but there is no acute shortage, except for the empty cases which have to be collected and are refilled at the Arsenal. The powder used by the Arsenal is often of very poor quality.’ Mortars were not noted in the weaponry of the Red Army. Generally, the training of the troops entailed running 40 li (13 miles) in mountain terrain.19 Dewar-Durie commented on the performance of the communist commanders: ‘the majority of the leaders having previously seen service in one or other of the Revolutionary National Armies combined with military study abroad, prove more than a match for their opponents. Working on interior lines with a superior knowledge of the country and making full use of the concealment afforded by mountain and forests, they apply every principle of war to advantage. Skillfully using mobility, surprise, economy and concentration of force they harass the flanks and lines of communication. It is not in their intention to hold towns even when captured or to defend rigid defensive positions, for they rely entirely on rapidity of movement to wear down their opponents.’ There was no definitive proof that there were foreign advisers among them.20 In July 1934, an unexpected defector boosted the KMT’s potential for victory: his name was Kong Hechong, a former commander of the Red Army’s 16th Army.21 Chiang met Kong in person; he had brought the KMT information about the CCP’s and Red Army’s leadership compounds in Ruijin. The generalissimo ordered an airstrike; however, the Nationalist Army signals ordering the bombing were intercepted by Red Army cadre, who made a safe escape to west Ruijin and established new headquarters there.22 Nonetheless, Chiang did not know that Mo Xiong, a trusted supporter of Sun Yat-sen, would turn into a CCP mole. Mo Xiong was born in 1891 and joined Sun Yat-sen and the KMT. He fought against warlord Chen Jiongming; soon he was promoted to brigade commander, and then to divisional commander. Gradually, Mo became disillusioned with the corruption within the nationalist forces. In 1930, he asked T.V. Soong, Chiang’s brother-in-law, for help finding a new job, and soon he landed in an office of the Ministry of Finance in Shanghai. He volunteered to join the CCP, but his application was turned down by Chou Enlai, whom Mo knew in person, on the grounds that he could offer a lot to the communist cause while serving the regime from a position of power. At that same time, Yang Yongtai, a close confidant of Chiang, recommended that Mo serve in the general headquarters.

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By January 1934, Mo was appointed administrator and commander-inchief of the fourth special district in northern Jiangxi. Mo, now a spy, was given directions by Xiang Yunian, his handler who was working as his secretary and who facilitated the infiltration of CCP spies into the headquarters. All belonged to the spy ring led by Zhiying Feng. In late September 1934, Chiang drafted the ‘Iron Bucket Plan’ which detailed the final attack and encirclement of the Red Army forces. All staff officers at the general headquarters in Lushan received the voluminous document. Chiang envisioned the setting up of 30 blockade lines with electric wire fences, encircling Ruijin, where the Red Army forces were deployed. More than a thousand trucks would give his force a rapid reaction capability, so as to attack any communist forces seeking to breakout. Mo Xiong was one of the staff officers who had received the plan. That night he gave it to his handler to copy; in turn, his handler gave it to two agents, Liu Yafo and Lu Zhiying, who wrote it on four dictionaries. Xiang Yunian would try to smuggle the four dictionaries out of the KMT-held area and into the Soviet Jiangxi. He pretended to be a maltreated beggar and hid the dictionaries in the bottom of his rucksack full of rotten food. On 7 October, he reached Ruijin. Only Chou Enlai, Bo Gu and Comintern agent Otto Braun read the ‘dictionaries’ revealing Chiang’s intentions. Mao Tse-tung was not informed. After consultation, it was decided that the CCP would vacate Jiangxi to avoid encirclement. On 16 October, the Red Army forces began their withdrawal. On 5 November, the nationalist forces reached Ruijin, only to find that their opponents had escaped. Mo Xiong and Fang Zhimin continued spying. In spring 1935, Mo was assigned to civil administration as the commissioner for Bijie, a city in north-western Guizhou Province; he attempted to free communist prisoners without attracting the attention of KMT secret services. Chiang never learned who leaked his plan to the CCP. In October 1949, Mo, who was then chief inspector commissioner, responsible for operations in Guangdong, secretly gave arms to the People’s Liberation Army. Mo was included on a suspects to kill list; on being informed of this, he escaped to Hong Kong. Mao himself called Mo back from Hong Kong, appointing him director in the committee for North Jiangxci. After the civil war, Mao, on learning the secret intelligence Mo had provided, honoured him; Mo’s story, however, was only released in the 1990s, after his death. In 1956, a special banquet honoured Mo Xiong and his handler, Xiang

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Yunian. Nonetheless, during the Cultural Revolution, Mo Xiong was maltreated by Red Guards but survived the onslaught.23 Meanwhile, the encirclement campaigns of the KMT were failing. Chiang had no money, which he badly needed to campaign against the Red Army. H.H. Kung financed the state budget through bonds; this money, however, was not going into investments in industrial or agricultural projects, but to bonds for the army. The banks purchased bonds with Chinese silver. In 1933, the United States abandoned the golden standard, and Congress set the silver price at 50 cents per ounce. Investors in Shanghai decided to stop buying bonds with silver and to sell their silver deposits to the US market at a 10 per cent profit. The Chinese economy collapsed and bond sales plummeted. By autumn 1933, Chiang had to stop the campaign because he could no longer finance it. In parallel, he had instituted capital export controls.24 Nonetheless, CCP counter-revolutionary terror boosted Chiang’s chances. Local populations endured unspeakable hardships from the CCP’s terror campaigns against ‘traitors’. The fifth encirclement campaign of the Nationalist Army commenced in October 1933 and lasted until early 1934. The Nationalist Army put strong pressure on the Jiangxi CCP base areas.25 Chiang had conceded to the Tangku agreement with the Japanese; in accordance with its terms, the area south of the Great Wall and east of the province of Hopei was declared a demilitarised zone, and Chinese forces could not be deployed there. Chiang planned the ‘fifth encirclement’. But the 19th Route Army rebelled against his authority in November 1933, when several leaders of the National Revolutionary Army’s 19th Route Army – including Cai Tingkai, Chen Mingshu and Jiang Guangnai – reached an agreement with the CCP, and, in alliance with other nationalist forces under Li Jishen, on 22 November proclaimed a new government in Fujian. The chairman of their government was appointed. They presented their own flag for their ‘Republic of China’, renaming the 19th Route Army the ‘People’s Revolutionary Army’. Dai Li risked entering Gulangyu, where he set up temporary headquarters and directed his men to spy on the mutineers and convince some to defect to the KMT. His agents bribed two officers of the 19th Route Army to pass on secret intelligence: Huang Qiang, a commander, and Fan Hanjie, the chief of staff. They provided codebooks, which allowed Dai Li to closely follow their order of battle and to supply Chiang with vital intelligence. Dai Li turned

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against the commander of Mawei, thus opening the door for KMT forces to quell rebels in Fuzhou in January 1934. Dai Li’s success against the rebels boosted Chiang’s regard for him. Chiang’s forces defeated the rebel government forces in mid-January 1934.26 The generalissimo continued to exert strong pressure on the Red Army. Eventually, the fifth campaign of the Nationalist Army forced the Red Army into a strategic retreat. The ‘Long March’ of Mao (and the top CCP leaders who sided with him) commenced. CCP signals intelligence and deciphering allowed 180 ciphers to be broken by October 1935, when all three Red Army groups reached Shaanxi. The decoded messages unveiled the plans of Nationalist Armies and allied warlords to attack the Red Army passing through Guangdong, Hunan, Guangxi, Guizhou, Yunnan, Sichuan and Gansu provinces. Qian Zhuangfei, the mole within the KMT communications establishment, followed the communist forces in the Long March; however, he was executed by his comrades, possibly because he knew about Gu’s defection and was accused as his accomplice.27 In May 1935, the 2nd Bureau Collation/Interpretation cadre Chen Zhongshan was arrested in Yunnan. Deciphered messages were found on him; the signals disclosed the intercepted communications between Chiang and local warlord Long Yun. Chiang ordered that the codes be changed, but the field signals units did not change the fundamentals in their ciphers; thus, the Red Army continued intercepting the opponents’ communications.28 That same year, in Tietsin, the British set up the North China Signal Section by Royal Signals to intercept Japanese communication; they could also follow the communications of Chiang with his armies confronting the CCP. The signal section reported to Hong Kong, while London followed the evolving Japanese strategy and occupation of Manchuria. In 1939–40 the section was closed, and the personnel withdrew under continued pressure from the Japanese occupation forces.29

CHAPTER 3 SHADOWING THE COMINTERN

Borodin, the once powerful and influential KMT adviser who had helped found the Whampoa military academy, was on the run. The Wuhan government and Wang Jingwei sided with Chiang after the massacre of communists in Shanghai. By 21 April 1927, Valentine Vivian, the head of Section V of the SIS, informed the Foreign Office that the Soviet Politburo ‘had directed the Soviet Government time after time to disavow any official connection with Borodin.’1 Valentine Vivian ‘VV’ was a seasoned intelligence officer with a background in the Indian Police. When he joined the SIS, in the mid1920s, he devoted himself to counterintelligence and the Comintern threat. Borodin was now in hiding, separated from his wife, Fanya, who was traveling to Vladivostok. Warlord Zhang Zuolin, the effective ruler of Peking, intercepted Fanya’s party and arrested her. He charged her with espionage and jailed her in Peking, sentencing her to death by strangulation. Borodin rushed to rescue his wife. In Peking, he secured USD 200,000 in Soviet emergency funds. He passed them to A.I. Kantorovich, the legal attache´ of the Soviet legation, who would be Fanya’s defence counselor in the show trial that Zhang organised to keep up appearances in the eyes of the other legations’ members, who feared of his rule. Kantorovich visited the Chinese judge and gave him the money. On the morning of 12 July, the judge acquitted Fanya while Zhang was asleep. She quickly disappeared with the help of the Soviet legation. The judge immediately fled to Japan, leaving behind his wife

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and children. Fanya hid in a Confucian temple in Peking while the warlord’s police and military searched for her. Some weeks later, dressed as a Catholic nun, she fled to Siberia. Borodin himself went into hiding in July 1927, in Hankow, in an apartment belonging to T.V. Soong. Eventually, Chiang guaranteed him that he would not be harmed, and Borodin and his party crossed the Gobi Desert to the Soviet Union.2 Throughout 1928– 9 the SIS tried to keep track of Borodin, considering any return to China a signal of a Moscow plan to further provoke the civil war. In March 1928, the SIS reported that ‘it was ascertained in Peking on the 29 February 1928 that the head of the local communist “cell” had been notified of the appointment of Borodin to a post in China. His exact whereabouts were not known at the time but apparently he was to proceed to Shanghai in the near future’. Another report claimed that Borodin was in Urga on 23 November 1927: ‘Special instructions had been received in Peking about this time to the effect that especial “cells” were to be organised, a communist revolution among labourers and peasants was to be brought about, etc. The Yangtze valley was to be in the sole charge of Borodin. It was impossible to confirm the fact that Borodin had actually left for China, but there had been obviously Soviet-inspired reports in the press designed to create confusion regarding his whereabouts’. Soon after, the SIS reported that, at a meeting of a commission for Chinese affairs, held in Moscow on 28 March, it was decided: (a) ‘the general direction of all sections and organisations of the Comintern in Chinese territory including those in Kwantung territory, and also of all organs of the Soviet government, both official and unofficial, [are] to be invested in Comrade Borodin, and his headquarters to remain as here in Shanghai. (b) in the opinion of the commission it was desirable that Comrade Borodin’s illegal activity should continue in the future.’ By late May, SIS reported that Borodin has been in China since February, and that he had been assigned ‘the general direction of all Soviet and Comintern organisations in the country.’ Borodin was supposed to be in Shanghai, but the report was not confirmed, and after investigations ‘no trace of him had been found.’ The search for Borodin continued. By the end of June, ‘no word had been received

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at this time in Shanghai centre of his arrival in South China. Chinese communist circles did not appear to have received any intimations of his impending arrival’. The report noted that ‘a considerable amount of corroborative and first hand evidence concerning Borodin’s return to China in February 1928 was obtained from Soviet circles in Peking and from communists in North China. It was plain that the Russians had been doing everything possible to conceal his whereabouts, and his non-discovery seem[s] to have been due to his having remained for the greater part of his time in Swatow.’3 In fact, Borodin would not return to China. He survived Stalin’s purges in the 1930s, but was arrested later, in 1949, in an anti-Semitic purge. He died in Lefortovo prison two years later. The SIS confronted not only devoted Comintern agents but also rogue agents who had defected from Moscow’s plans and who flocked into China to offer their services, in espionage and assassination, to the highest bidder. Evgeni Mikhailovich Kozhevnikov reached China to work with Borodin’s mission. He was born in Astrakhan, Russia, in 1898, and went on to serve as an officer in the Tsarist army. He was a communist, and he worked as Agent No 27 in Soviet military intelligence based in Harbin until 1925, before moving first to Peking, where he was an assistant military attache´, and then to Shanghai, where he was a journalist. Physically and psychologically, he was a man of peculiar traits, described as having ‘scars that ran from the back of his skull to his nape, had pale complexion, an effeminate manner and a tendency to lie’. In May 1927, Kozhevnikow broke from Borodin, accusing him of making an attempt against his life, and offered to spy for the Shanghai Municipal Police. They rejected his offer, however, claiming that he was asking for too much money. Soon, he approached the KMT secret services. Kozhevnikow’s aliases were many: Hovans, Eugene Pick, Dr Klige. In Shanghai, he cooperated with French intelligence, and then with the British, the Americans and the Chinese. Before long he became a double agent of the Japanese and the Russians, once the former had occupied the city. The report of him read: ‘made himself a reputation for vileness in turning in scores of innocent people to the Japanese, as well as actual Allied agents.’ He was arrested for war crimes in May 1946. After being interrogated by the SSU (the successor of the OSS), he was released in October 1946.4

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During the same period, the noted American journalist Agnes Smedley, a promoter of Indian independence, was put under surveillance by MI5, which from early on deemed her a communist agent. In his memoirs, spymaster Chen Hansheng (see below) revealed that Smedley was a Comintern agent and a member of the Richard Sorge spy ring.5 British intelligence concluded that China was becoming a key target of resourceful secret agents, like Kozhevnikov, of the Comintern. Information on strategy of the commissar Mao, and his associate Chu Teh, was scant in the 1930s; after all, before the 1937 war with Japan, Chiang seemed to rule the country. The SIS, like the Foreign Office, could not discover the dynamic antagonism between Mao and the rest of the CCP, who wanted to follow Moscow’s directions. London needed SIS intelligence in order to safeguard British commercial interests in the region, first against the warring parties in China, in the 1920s and early 1930s, and then against the rise of the Japanese naval threat. Shadowing the CCP and the Comintern were the SIS’s main assignments in Hong Kong, Shanghai and Beijing. The Shanghai Municipal Police, the police of the French Concession and the nationalist security services cooperated with the British. In the meantime, the war between the Red Squads and the KMT secret agents was escalating. In these games of espionage and murder, the protagonists were not loyal to their respective services. In April 1928, the SIS station in Peking (Beijing) informed London that one of its sources in Harbin had said that the Comintern had arranged to send six ‘agitators’ – graduates of the Lenin Institute for Propaganda – from the Far East to the United States to instigate protest in textiles factories. The agitators would carry American passports. The United States would be informed of this, but not that the information came from the spy in Harbin.6 In July 1929, an SIS intelligence officer called Harry Steptoe, at that time working in Shanghai, asked for money to pay for a Chinese agent to supply him with lists of names of prominent personalities and KMT government officials. Of the Chinese spies, he wrote: ‘since it must be remembered that Chinese agents are very [often] in possession of information which they will not, repeat not, commit to paper and which can only be abstracted from them by careful cross-questioning.’7 Steptoe was dispatched to Peking on ‘special duties’ during the crisis in Manchuria. Sir Hugh Sinclair, the ‘C’ the SIS, later told Steptoe that the permanent undersecretary of the Foreign Office, Sir Robert Vansittart,

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had expressed ‘his appreciation of your work during [the] crisis’.8 Nonetheless, two years later, in 1933, the British consulate general in Shanghai, Lampson, accused Steptoe of mingling in political reporting; intelligence officers should report ‘on such things as communist activities, Indian movements, drug traffic etc. instead of encroaching on the political side.’ Sinclair disagreed.9 Hilaire Noulens was to remain a man of mystery until he was identified in 1994 as Jakob Rudnik. He and his wife had been resourceful Comintern agents in Shanghai in the 1920s until their arrest information 1931. On 1 June 1931, the arrest of a French communist, Joseph Ducroux, in Singapore, led to the discovery of the couple and their network in Shanghai. During this period, the SIS was asked to follow ‘Soviet intrigue’ in China; London feared that the rise of communism would put British commercial interests under serious threat. Until the April 1927 massacre, London also deemed Chiang proSoviet. The hunt for Comintern agents was conducted with meagre resources and officers. Working alone, Steptoe initiated the hunt for Noulens, and told the Shanghai Municipal Police to raid his house on 15 or 16 June 1931. Eventually, another apartment was discovered, and the files held by Noulens enabled British intelligence to shadow the structure of the Far East Bureau of the Comintern and the Shanghai Pan-Pacific Trades Union Secretariat penetration in China. The arrested couple were transferred into Chinese custody in August 1931. On the eve of the trial, their case received publicity and open support from, among others, Soong Ching-ling – the wife of Sun Yatsen and sister-in-law of Chiang who was Chou Enlai’s secret contact in the elite of the nationalist regime. In the meantime, Otto Braun and Herman Siebler, two of the key Comintern agents, paid Richard Sorge USD 20,000 to secure the release of the Noulenses. The CCP had managed to come into secret communication with the couple in jail via the senior Chinese officer appointed to their case, who had proven easily bribable. Many communists were afraid that the couple would be murdered before their trial. In August 1932 they were tried and sentenced to death, but this was commuted to life imprisonment.10 Valentine Vivian ‘VV’ followed the Noulenses’ case, examining the many papers that had been found at their houses. Vivian was surprised to find that large sums of money had been transferred from Moscow to the

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CCP via the Comintern. The money given to the CCP amounted to £150,000 per year (the equivalent of £7.9 million in today’s prices).11 Vivian was fascinated by the papers, which revealed the establishment of a CCP ‘soviet’ in the borders of Hupei, Hunan and Anhui, as well as the communist intelligence organisations and military activities. In his report, he took into consideration the intercepted Comintern messages and concluded: ‘the conscious exercise of control by the Comintern over events in a foreign country, which, being regarded as already in a state of revolutionary transition, was, by means of this control of events, to be converted into a Soviet State’. He read in one paper that ‘at present the district of the IVth Army is not thoroughly Sovietised. In all its parts Revolutionary Committees must be established. Soviet elections must be carried out and Soviet government must be set up.’ For Vivian it was the Soviet support which made the Chinese communists dangerous.12 Steptoe insisted that the Comintern would be neutralised with the ‘cumulative effect of the blows dealt’ by British intelligence and security agencies in China. Indeed, the Noulenses’ archives revealed key methods of Cominern agents: The conspirative [sic] methods of both the FEB and TOSS were very similar, and both organisations attempted to conceal the extent of the local finances by recourse to no fewer than seven Chinese Banks in Shanghai, and the use of various safe deposits. Accounts were made up uniformatively [sic], and in the case of the FE Bureau many headings and items were in cipher, doubly secured by the use of agreed terms and misleading pseudonyms. In a few cases only were receipts kept. The members of both organisations indulged in a number of assumed names, and were provided with stolen, “borrowed”, or expertly forged passports of different nationalities, with which to justify them if challenged. For example, Noulens and his wife had six passports between them and their real identity and nationality were established only fortuitously. Each of the conspirators had a Christian or concocted name, usually more than one, by which he was designated in accounts and correspondence . . . For cipher telegrams between Berlin and Shanghai a large number of registered telegraphic addresses in both places was in use, which as in the case of postal addresses, were frequently changed. Long telegraphic messages

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were sent in portions, each portion being sent to a different address and out of its proper sequence in the full message. Different cipher systems were used for the postal and telegraphic messages. These systems combined a reasonable maximum of a security with a minimum of compromising books. Interchangeable cipher basis existed for exchange messages in English, French and German. The cipher systems were centralized in the FEB, and Noulens himself sent and received all cipher messages. In addition to this postal and telegraphic methods, there was in force an elaborate courier service, both for communication between Shanghai and Moscow or Berlin on the one hand, and the regional communist parties, groups and individuals in the FEB’s and TOSS’s “jurisdiction” on the other. There was also a courier service operating between Shanghai and Japan and another highly organised one extending from Shanghai to all principal ports in the colonial possessions in the South Seas. Proof than Moscow was the controlling centre for both organisations was found in certain telegrams addressed “FOB” and signed “Political Commission”.13 The Noulenses were freed on 27 August 1937, and they stayed with Madame Sun Yat-sen. In the summer of 1939, with the help of the Soviet consulate in Shanghai, they left for the Soviet Union.14 Soon, the SIS had a new recruit who showed real potential: Johann ‘Johnny’ Heinrich Amadeus de Graff had been a spy for both the Comintern and the 4th Department of the Red Army General Staff (the ancestor of the GRU). De Graff’s case was considered one of the SIS’s most important successes in the 1930s. He himself offered to spy for Britain; he was a ‘walk in’. In February 1933, Frank Foley, the SIS station chief in Berlin, reported to London that a German under the name Ludwig Dinkelmeyer ‘offered to become an agent for me’. Dinkelmeyer was in fact de Graff, who disclosed to Foley that he was ‘a Member of Executive of Communist International and Secretary General of illegal Red Front Fighters Union’ in Germany. Johann Heinrich Amadeus de Graaf was born on 11 May1894, in Nordenham, northwest Germany. In 1919 he joined the Spartacus Bund and later the German Communist Party. He was one of the German communists who were trained at the Frunze Military Academy, and was destined to become a Comintern military adviser and agent for the military intelligence branch of the Soviet General Staff.

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De Graff admitted spying in Britain in 1931– 2 and reporting on the Communist Party of Britain. Foley wrote that he was receiving information from de Graff on communist propaganda in the British armed forces and leading communist activities. The spy’s motive was simple: money. He had requested an advance of 2,000 Reichsmarks, along with another 500 per month (in today’s money £7,300 and £1,800 respectively). Foley sought authorisation to start negotiations with the willing spy. Sinclair, ‘C’, gave the go-ahead.15 In March 1933, de Graff produced his first full report on communist propaganda in the British armed forces. That same month, the Nazi regime compelled de Graff to leave for Prague, where he met with Foley. After three months, the Comintern ordered de Graff, under the cover of a soya bean merchant, to go to the Japanese-occupied Manchuria to review the secret Soviet mission there. In fact, he would report intelligence about the spy network of ‘Captain Werner’, his former Frunze military academy instructor. He took the Trans-Siberian Railway to Chabarovsk, and then to Vladivostok. His destination was the commercial city of Mukden. De Graff’s plan was to play the novice Comintern agent seeking Werner’s advice on the finances of his organisation, which appeared – somehow – to be self-sufficient and not to need Russian money. When de Graff arrived in Mukden, a Polish Comintern agent gave him a forged passport. From Mukden, de Graff sent Foley a card that simply read: ‘On my way home.’ After three days spent in his hotel – de Graff was very careful; as a foreigner he could attract the attention of both the Chinese and the Japanese – he sent a letter to Werner, asking to meet. The captain keenly agreed and came to his hotel. De Graff had no trouble in persuading Werner to talk about his finances: the German, whose headquarters were in Dalian, was running a Ford car and truck dealership; his main customers were the KMT military and Chinese merchants; he had three loyal communists working for him; it was a profitable enterprise, which came with free, unsuspicious movement for employees. De Graff stayed in Mukden for two weeks and then left for Shanghai.16 Foley had told de Graff to make contact with an SIS officer, George Vernon Kitson, who worked in the consulate general in Shanghai. The two met at Kitson’s office, and they arranged for de Graff’s reports to be sent Foley via Kitson. Afterwards, de Graff went to Hong Kong, and from there by boat to Vladivostok and then west by train. He arrived in Moscow in October; but after just two days of rest he was told that he

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would be sent back to China in a military advisory role, training General Chu Teh’s cadre in strategy and insurgency tactics.17 Together, Soviet military intelligence and the Comintern provided de Graff with a salary of USD 3,000, along with another USD 1,000 for expenses and five different passports. After reaching Helsinki by train, his first destination was Paris, where a Comintern contact gave him a forged US passport. In the French capital, he met with Foley and informed him of his mission; then he left by train for Venice, where he boarded another train, bound for Shanghai. The journey took twentyone days. When he arrived in Shanghai, de Graff checked in at the Astor hotel, a foreigners’ residence; later, he moved to a guest room belonging to a Nazi sympathiser. In the city, he made secret contacts and met with ‘Comrade Milton’ – an American working for the Soviet Trade International, an organisation subordinate to the Comintern – along with other agents staying in the French Concession.18 ‘Comrade Milton’ was Eugene Dennis, the future secretary general of the Communist Party of the United States of America (CPUSA). His relations with de Graff soon turned violent; de Graff accused him of trying to kill him while instructing him in the use of explosives. Eventually, the German agent was wounded. Dennis said that it was Arthur Ewert, a co-agent of the Comintern, who had asked him to kill de Graff.19 The night before leaving for the communist-held areas, a peddler approached Kitson’s house. It was de Graff in disguise; he told Kitson about his new mission advising Chu Teh and Chou Enlai, together with ‘General Manfred Stern’ and Otto Braun, on strategy.20 Once in the guerilla-held Huangshi, de Graff was introduced to the cadre whom he was to train. Their morale was high, and their weaponry consisted of British, French, Chinese and German rifles – though they had little ammunition. He proposed that the companies be organised according to the type and origin of their weapons, and later persuaded the CCP to buy arms from the army of a nearby warlord. He lectured the cadre on guerrilla tactics and explosives. Both Stern and de Graff supported a plan for a ‘pincer movement’ of the communist forces against Chiang’s troops to the northeast. Secret negotiations with the warlord Cai Tingkai persuaded him to stay put near Fujian and to ally himself with the Red Army; this helped facilitate Chu Teh’s encirclement of the nationalist forces. The strategic plan looked set for success, but then a Comintern propagandist wrote an article for Shanghai

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weekly China Forum condemning the CCP for making alliances with bourgeois players who really sought to preserve their military rule; Cai even dealt with the insult of being labeled pro-American. Eventually the warlord decided to remain neutral, and Chu Teh’s strategy collapsed. At the end of August, de Graff, Milton, Arthur Evert and his radio operator were recalled to Moscow via Vladivostok.21 Vivian valued de Graff’s reports, especially prizing their ‘technical aspects’ which described the Comintern’s and its agents’ methods for clandestine operations. One astonishing piece of information that de Graff provided was that Scotland Yard was infiltrated by communists. In November 1934, Vivian met de Graff in Paris, and the German spy informed him that the Comintern was about to send him to Brazil. The Comintern supported the overthrow of President Getulio Vargas, backing the left movement of Luis Carlos Prestes. De Graff had met Prestes in Moscow and had found him overconfident, noting, ‘this man has his head in the clouds; reality and sound logic at time escape him’.22 In broad terms, the SIS sought to protect British commercial and investment interests; however, there was no station in Brazil, nor were there any arrangements for secure communications with de Graff. Vivian himself went to Brazil, where he met with the suspicious Ambassador Sir William Seeds, before meeting de Graff. De Graff’s secret liaison at the embassy was Alfred Hutt, the general assistant superintendent of public electricity company.23 Throughout that year, fear of a revolution was aired in London. On 25 November, de Graff told Hutt to warn the ambassador that a coup would take place within forty-eight hours. The next day, the businessman informed de Graff that Vargas had arranged for a proactive action. In parallel to the police searches, the public utility company would cut the electricity in order to hinder the movements of the plotters, who had several military units on their side. Eventually, after some firefights, the coup attempt failed. Soon de Graff pinpointed the main Comintern agent in the country, who was holding a very interesting cache of documents. De Graff himself was arrested by Brazilian security, but he was released after when the English businessman intervened. In 1936 he escaped to Argentina; however, Moscow ordered him to return to Brazil, where he was to summon a team for operations in Japan. When he returned, the team was not ready. De Graff remained in Brazil, where, in

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1939, he was arrested for espionage. Once again SIS intervened discreetly; de Graff was released and sent to Britain.24 China and the civil war in urban centres shaped future British spymasters’ understanding of intrigue and espionage. Roger Hollis, the son of the Bishop of Taunton, was educated at Clifton College, Bristol; he attended Worcester College, Oxford but left after two years without a degree. In 1927, he reached Hong Kong and started working as a freelance journalist. He soon moved to Shanghai, the city of the secret war. In April 1928, he started working for British American Tobacco. In 1930, he moved to Beijing, and during 1930 –1 he shared an apartment with a British officer, who later recalled that Hollis was visited by an American journalist, Agnes Smedley, whom the officer understood to be a ‘leftist’, and a German-accented man, Arthur Ewert, who was discovered to be a Comintern agent. Ewert was in a feud with Comintern (and SIS) agent de Graff. Smedley was a noted leftist, feminist journalist who cooperated with Richard Sorge’s spy ring and later visited Mao. With friends like these, Hollis did not appear a likely candidate for a career in British intelligence; rather, he seemed an obscure young man who could become ‘a senior clerk in a commercial establishment with a hobby sideline of amateur journalism.’25 Hollis stayed in China until 1936, when be returned to London and worked for Ardath Tobacco Company. The next year, Hollis married Evelyn Swayne, the daughter of George Champeny Swayne, a solicitor in Glastonbury. Without success, a friend from Oxford tried to find him work at The Times. Hollis approached a tennis partner who was an officer in the British Army and asked for help to join MI5. He was interviewed. MI5 head Sir Vernon Kell read the first interviewer’s positive opinion of Hollis and only commented: ‘A rather nice quiet young man whose only qualifications were a knowledge of the northern Chinese language and Chinese and Japanese commercial industry. Might perhaps be given a job.’26 Eventually the board rejected Hollis’s application and suggested that he apply to SIS; however, they too rejected his application. During his tennis games he was introduced to MI5 officer Jane Sissmore, the first female officer in the service, who since 1929 had specialised in Soviet and Communist operations in Britain (F Division). The two became close friends, and she persuaded MI5 to employ Hollis as her assistant. In 1940, Sissmore was transferred to SIS, leaving Hollis head of her section.27 Hollis rose to become MI5 director general from 1956 until 1965.

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Historians have discounted theories that he was a spy of the NKDV and KGB. Since the 1920s, Smedley had feared that British intelligence were following her. In December 1921, in Berlin, she was with her associate Virendranath Chattopadhyaya, a prominent Indian revolutionary, and concluded that there was an attempt against his life by British agents. She was confident that British agents had broken into a room they were renting, looking for clues. At that time, Smedley lived in Harbin, where she reported on the socio-economic and political situation and acted as a courier for Comintern secret messages. The always-armed Smedley was certain that, on orders of the British, a Chinese servant had tried to poison her. She travelled from Mukden to Dairen, which was occupied by the Japanese. She was followed by Japanese secret agents. It was too risky for a Chinese guide to escort her in Dairen.28 Smedley met with Hollis during his stay in Peking. Did the SIS know that she was in contact with a young Englishman in Beijing? Smedley’s file shows that she had been observed since 1917, when she had sided with the Indian independence movement. Smedley’s file has correspondence about her between the SIS and MI5 from the 1930s, as well as intercepted letters of hers that show she was shadowed in China. For example, the Madras Special Branch had intercepted a letter from December 1931, addressed to Ms Getrude Hinder, a US citizen, informing her on her address in Shanghai.29 In July 1931, Vivian of the SIS (‘VV’) informed Harker of MI5 that after the Noulens’ arrest, Stewart had frequently visited Agnes Smedley.30 Documents seized by German police in Berlin in October 1933 revealed that Smedley lived in Shanghai at 85 Avenue Dubail. ‘From the records at the Aliens department it is evident that in 1929 the American Consulate was taking considerable interest in her movements’ read a SIS report.31 Guy Liddell, a high ranking Soviet affairs expert, of MI5 informed ‘VV’ in mid-December 1931 that ‘according to a reliable source in close touch with the Chinese Communist Party, Agnes Smedley has been dismissed by Communist Party Headquarters in Moscow for misappropriation of Communist funds and for spreading ideas among the Chinese contrary to instructions. She is also, apparently, suspected of having sold information concerning the Communist Party in the Philippines to the American authorities’.32

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For MI5, she also used the Chinese name Mo Ker Li. In May 1933, Captain Miller of MI5 informed ‘VV’ that, according to a secret source, Smedley had been granted a Chinese visa before she left for Moscow to attend the anti-War Congress.33 In Shanghai, the SIS was aware that Smedley stayed with Madame Sun Yat-sen in the summer of 1935. A police raid in Shanghai turned up a report ‘on the persons, monies and documents that have been assigned to my management’ by someone by the name Sung Woo. It read that Dr Toong Wei Jien, propaganda secretary had first reported: ‘Among the persons who have connections with Dr Toong is an American lady, his former school-mate, who has come to Shanghai with the intention of publishing a left-inclined Anglo-Chinese magazine. It is a pity that her antecedents and plans are known to our enemies due to the seizure of her letters at the place of a responsible comrade, but our enemies do not know that she is the author of the plans. She came to Shanghai with the introduction of a very influential person in the USA and she has suitable protection. She still intends to publish a magazine. Please write an English letter to her, to be sent through Dr Toong requesting her not to take the risk of publishing the periodical, but to collect materials for writing books on China’s revolution. I do not know her name but you may address her “Dear Friend” and give your name William.’ It was noted that the ‘SIS gave details of the ways in which the above description fitted in with Ed.Scott document etc., proving identity between Scott Brundin. Brundin is now living in the house of Madame Sun Yatsen.’34 Another of Smedley’s letters was intercepted: ‘On 21.3.36 Agnes Smedley wrote from Shanghai, c/o National City Bank, to John Strachey, London, enclosing two newspaper reports regarding T.P. Givens head of the Anti-Communist Bureau of the Shanghai Municipal Police. Givens, who was retiring from the Police, was to leave Shanghai on 24.3.36, and Agnes Smedley hoped that Strachey would not allow him to “be received with honours and to live peacefully after taking the lives of so many men and women.”’35 Vernon Kell, the head of MI5, and Liddel discussed whether they should reveal this information to Superintended Canning. Givens would stay in Tipperary, ‘but eventually decided that as it is most improbable that anything would occur in England, we had better send it straight to you’, Vivian was informed.36 In April 1936, a SIS report claimed that ‘there are strong grounds for believing that Agnes Smedey is connected with a new publication called

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the Voice of China’. The journal ‘contains almost exclusively antiJapanese articles of a marked radical tendency’.37 In January 1937, Vernon Kell wrote: ‘Smedley the American Communist journalist, is at the present working in close touch with Communists in Sianfu [in Shaanxi province] and sending secret reports to the American Express Company in Shanghai, who forward them to the following address: D. Berenberg 132 East 65th Street New York City’. He asked the US embassy in London for information. Later Walter Krivitsky a Comintern defector named Smedley a OGPU and 4th Department agent with headquarters in Shanghai: ‘although she was strictly an OGPU agent, she was also closely in touch with the 4th Dept. agent there and considered a very useful source. She was not paid for her work’.38 It is certain that upon assuming his duties in MI5, Hollis noted the reports on Smedley, the journalist who visited him back in 1930–1 in Peking, and possibly in Shanghai.

CHAPTER 4 LAWRENCE OF MANCHURIA

On 17 October 2014, a group of Japanese lawmakers of the ruling Liberal Democratic Party (LDP) paid a visit to the Yasukuni Shrine in Tokyo. The Japanese Prime Minister Shinzo Abe sent a ritual offering to officers and officials who fell in the service of the Emperor. Many of the fallen who were honoured were not ‘heroes’ but condemned war criminals. China and South Korea protested against this gesture. In December 1948, seven condemned ‘Class A’ war criminals, among them Hideki Tojo, the wartime prime minister who ordered the attack on Pearl Harbor, were hanged and cremated. Japan’s allied administration planned for the ashes to be scattered at sea. But three days later, with the help of the crematorium manager, a representative of Kuniaki Koiso (the former prime minister who was convicted of war crimes and sentenced to life in prison) secretly collected the remaining ashes and gave them to head priest Ninrei Itami, who placed them at Koa Kannon and erected a stone monument there. Among the seven war criminals was General Kenji Doihara, a spymaster and general who was called by the interwar proJapanese British press ‘the Lawrence of Manchuria’.1 But T.E. Lawrence bears no resemblance to Doihara; whereas the former risked his life to mobilise the Arabs against Ottoman Turk rule, the latter plotted to submit the Chinese to Japan’s wishes. On 25 March 1948, the beautiful Chinese princess Yoshiko Kawashima, originally called Aisin Gioro Xianyu, was executed at a Peking prison as a traitor. For decades Japan claimed Manchuria. In 1912 and 1916 the Second Department of the Japanese General Staff organised for amateur civilian spies and local Chinese to claim autonomy from China and establish an

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independent state. The strategic objective of Tokyo was to ‘protect’ Japanese enterprises (among them the South Manchurian railway) and Japan’s Kwantung Leased Territories against Chinese warlords. The operations in 1912 and 1916 both failed. Japan formed paramilitary units and spy networks, and it sought to provoke attacks against Japanese enterprises; the aim was to create a pretext whereby it could plausibly claim that intervention was necessary to protect Japanese citizens and interests in Manchuria.2 The OGPU had been able to intercept the secret communications of both Japan’s military mission and its consulate general in Harbin since 1925. The Japanese employed Chinese couriers and sent their dispatches via the Chinese postal service. It was not difficult for the experienced OGPU intelligence officers to convince the Chinese employees to give them the sealed envelopes. An OGPU expert team opened the letters, photographed them and then sealed them with copied Japanese seals. Professor Matsokin, a Japanese specialist of OGPU translated the most important Japanese messages. In July 1927, intercepts, as well as a letter authored by Baron Gi-shi Tanaka, the Japanese prime minister, revealed Tokyo’s plan: Tanaka sought the occupation of Manchuria and Mongolia and sounded determined that his country ‘would once again have to cross swords with Russia.’3 In the Japanese-occupied Korea, the OGPU had a spy, a Japanese interpreter codenamed Ano, who disclosed a copy of Tanaka’s letter sent to the Japanese police chief in Seoul. On orders from Stalin, the OGPU leaked the letter to the US press, pretending that the source was an agent working for Washington.4 Stalin had no doubts: Japan wanted war with the Soviet Union. According to Japanese Major General Hiroche Onouchi, the NKVD employed two different tactics to infiltrate Manchuria. Less experienced agents – mainly from NKVD border patrol ranks – always operated in Manchuria within 50 km of the border. For the Japanese, ‘their work was low-grade and usually of counterespionage nature.’ Meanwhile, more experienced, Siberian-trained agents were dispatched to urban centres. ‘The best of these were Russians. Work done by White Russians, Chinese and Koreas was rarely successfully.’ Their directives came from Moscow via Shanghai, Dairen and Harbin.5 Yet again, Zhang Xueliang, the ruler of Manchuria, was about to place Chiang Kai-shek and the KMT in a very difficult position. Zhang could not forget that his father was murdered in 1928 by a Japanese officer. For decades the Japanese secret services were trying to foment

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unrest in Manchuria so as to find a pretext for occupation. In Tokyo, the General Staff Second Department (Intelligence) drafted estimates as well as covert action plans; the department was divided in geographic-based sections (Russian, Chinese etc.). The Japanese Kwantung Army in Manchuria had its own Second Department. The units for intelligencegathering and covert action were the Special Service – espionage unitsbased in Mukden, Harbin and Kirin. The Special Service Organs belonged to the structure of the Kwantung Army, but they communicated directly with the General Staff in Tokyo.6 In 1929, the Zhang Xueliang, the ‘Young Marshal’, sided with Chiang Kai-shek; Tokyo assumed that anti-Japanese policies in Manchuria were to be expected. The Japanese military urged for intervention and the creation of an autonomous Manchuria. Japanese military intelligence officers sought for covert action even not explicitly authorised by their government and the general staff. A three-phase plan was developed by the Second Department of the General Staff. First, Zhang would be put under strong pressure not to dispute Japan’s interests and position in Manchuria; second, in case he would not change his mind, his regime would be overthrown and a new Japanese-friendly one would be installed. If this failed, an open Japanese invasion was the third option.7 The whole scheme was included in an ‘estimate’ of the Second Department in early 1931. In May, the heads of the Russian and Chinese sections of the Second Department conferred and agreed that ‘something’ had to happen in Manchuria to provide a pretext for action; they decided that the Japanese in Manchuria would stage an incident, provoking Zhang Xueliang to respond; afterwards, they would employ maximum force against his regime. The Japanese intelligence officers were approaching Chinese local officials who wanted an end to the warlords’ rule and independence for Manchuria.8 Captain Nakamura Shintaro¯ was a dedicated regular Japanese Army officer, serving with the Kwantung Army for the protection of the South Manchurian Railway zone. In June 1931, he was granted a pass from the Chinese authorities in Mukden; together with his party, he was allowed free passage through Manchuria however, they were prohibited to approach the border area between Taonan and Solun. At Harbin, Nakamura received a pass to reach the Taonan-Solun area from the Chinese authorities. The captain was not wearing a uniform, and he presented himself to the local authorities as an agricultural expert.

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Nobutaro¯ Isugi, a retired Japanese army sergeant, was his right hand. They were accompanied by a Mongolian and a Russian interpreter. In mid-June, they travelled from Pokotu, on the Chinese Eastern Railway, to Manchuli, Tsitsihar, Angangehi and Hailar – their destination was Taonan. On 27 June, outside of Taonan, troops of Zhang Xueliang stopped and searched the party of the ‘agricultural expert’ Nakamura. They discovered weapons, military maps and drugs. The group was arrested and transferred to Solun. After interrogation, the Chinese concluded that they were spies on a mission to locate water resources for the possible camping of Japanese troops; on 1 July, Nakamura and his followers were executed – their bodies cremated. On realising that Nakamura was nowhere to be found, officers of the Kwantung Army became agitated. The Japanese consul general in Mukden formed a committee to investigate. On 17 July, the Japanese public were informed about the killing of the captain and his party; antiChinese sentiment grew, putting pressure on the government. Officers of the Second Department of the General Staff and the Specials Services Organs urged for action in Manchuria. The Chinese were compelled to agree to an investigation. Foreign Minister Shidehara Kijuro sent Consul General Hayashi Hisajiro to Manchuria with instructions to investigate the murder. The foreign minister wanted to avert a military intervention following his ‘Friendship Policy’ over Manchuria. The Consul-General would consult with the governor of Liaoning Province, who had appointed a commission to investigate the murders. In the meantime, during a 15 September special meeting of the General Staff, army minister General Minami Jiro and chief of staff Kanaya Hanzo agreed that the murder of Nakamura was an incident to be used for exerting pressure on China to alter its policy over Manchuria and the Japanese presence there. There were rumours that the Kwantung Army would react against the murder of its officer. Nonetheless, Kanaya ordered Major General Yoshitsugu Tatekawa (who headed the Second Department of the General Staff and had prepared the ‘estimate’/plan for intervention) to go to Manchuria and stop the Kwantung Army from reacting until ordered to do so. While Tatekawa was on his way, the Second Department of the General Staff communicated directly with the Special Services Organ in Mukden to warn them and the Kwantung Army that Major General Tatekawa was on orders to stop any covert action or provocation against the Chinese. On receiving the message, the officers of

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the Special Services Organ in Mukden decided that they had to press ahead with the provocation–Tatekawa was about to arrive, they had little time.9 On 16 September 1931, the Chinese commission submitted its report on the murder of the Japanese officer and his team. On 18 September, in Mukden, Hayashi Hisajiro discussed matters with Chinese General Yung Chen. General Yung admitted China’s guilt: the man who ordered the execution would be court-martialled, and China would present an official apology. The apology had to be given to the Japanese Imperial Army, but its representative was not present; thus the conference was adjourned. The representative was the Army Colonel Doihara Kenji, who was the chief of the army’s Special Affairs Section – he could not attend the meeting because, together with others, he was preparing the provocation for that same night. As for General Tatekawa, he had reached Mukden unwilling to exert discipline over the officers and, forestall the plot. He preferred drinking – heavily – sake and fall asleep.10 The provocation (the ‘Mukden incident’) was a bomb attack of a railway line of the Japanese South Manchuria Railway near Mukden. Lieutenant Suemori Komoto of the Independent Garrison Unit of the 29th Infantry Regiment planted the bomb, which exploded early in the morning of 19 September 1931; no serious damage was done, and ten minutes later a train passed this location with no trouble. In any case, the Japanese field grade officers planning for a coup blamed the Chinese and unleashed their forces; Japanese artillery fired at the Chinese garrison barracks. Five hundred Japanese troops attacked seven thousand Chinese; by that evening, the Chinese troops had fled and Mukden was occupied by the Japanese. The Commander-in-Chief of the Kwantung Army, General Shigeru Honjo¯, was surprised of this outcome because he had not given orders of attack. Doihara Kenji won the argument with the other staff officers: the Kwantung Army would encourage a Chinese ‘movement’ to seek ‘independence’ for Manchuria.11 Indeed, Doihara approached local governors and officials and went on to convince (or compel) the last Qing emperor, Pu Yi (he was the Emperor who had abdicated in 1912), to act as a unifying head of the ‘state of Manchukuo’. As he admits in his autobiography, Pu Yi wanted to become an emperor and pressed the Japanese once he realised that they wanted Manchukuo to be a republic. A couple of years later they changed their stance, allowing Pu Yi to be named emperor. Since mid-1925, Pu Yi had been on excellent terms with the Japanese.12 The Japanese sought Manchuria for yet another reason beyond their geopolitical antagonism with

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Soviet Russia: opium. By 1938, in Manchuria, the sale of opium generated 28 per cent of the Japanese government’s general budget receipts. The Kwantung Army was financed by opium sales alone.13 It was rumoured that Doihara himself was an opium addict, but nothing has been proven. Pu Yi’s escape from Tietsin was facilitated by the Japanese, and he feared for his life if Zhang Xueliang wanted him assassinated. Doihara took advantage of this fear of Pu Yi, staging riots in Tietsin to hasten his escape to Manchuria. With the benefit of hindsight, Pu Yi wrote in his autobiography: After the bombs [two bombs sent in a basket of fruits for the emperor were eventually intercepted and handed over to the Japanese police. The Japanese told Pu Yi that they were made by the men of Zhang Xueliang], the threatening letters, and the telephone call [to a servant of Pu Yi that ‘suspicious people’ probably armed were asking about Pu Yi; the claim being that they were assassins of Xueliang] came the “Tietsin Incident”. This was one of Doihara’s masterpieces. The Japanese arranged for a crowd of Chinese in their pay to make trouble in the Chinese-administered part of the city. A state of emergency and martial law was then announced in the Japanese concession and communications with the Chinese city were cut. Armored cars drove up to “protect” the Quite Garden, which was now isolated from the outside world.14 Three days after the riot in Tietsin, Pu Yi exited the palace in his car, accompanied by an aide and his driver. Yoshida, his trusted Japanese interpreter, was in another car, waiting for them to exit the palace gate. Pu Yi wrote: ‘martial law prevailed in the Japanese concession as well as in the neighboring Chinese controlled-areas. Although no Chinese vehicles were allowed on the streets, whenever my car was stopped at a crossroad, or at a barbed-wire obstacle or by Japanese soldiers, it was allowed to pass after Yoshida gave a signal. My driver was completely inexperienced and a very poor chauffeur. As soon as he had passed through the main gate of the Quite Garden (the palace), he ran into a light pole so that I bumped my head on the lid of one of my suitcases, and throughout the trip I was shaken up most uncomfortably by his bad driving. Nevertheless we managed to reach our destination, which was a Japanese restaurant.’15

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The Japanese had developed a plan to smuggle Pu Yi out of Tietsin. Pu Yi described the scene: After the automobile came to stop at the restaurant, my aide and Yoshida opened up the rumble seat and helped me out. The three of us entered the restaurant together. Here a Japanese captain, who had been waiting for us for some time, produced a Japanese Army greatcoat and cap and hurriedly put them on me. Then the captain and I entered a Japanese military car sent by the Commanding Officer of the garrison of the Japanese concession. This car had no trouble at all passing the various roadblocks, and we went straight to a dock on the bank of the White River. Yoshida and the captain helped me from the car. I noticed right away that we were no longer in Japanese territory and became somewhat worried. Yoshida whispered to me in low voice: “Never mind, this is the British concession.” Yoshida and the captain each took one of my arms and hurried me along a concrete wharf until we reached a small darkened motor launch, which he boarded.’ A few minutes later, a Chinese patrol at the shores shouted for the boat to halt. The ten Japanese soldiers with Pu Yi readied themselves for a fight and took cover on the deck of the boat. Pu Yi was in panic: ‘when I looked out of the cabin window I saw soldiers behind each sandbag aiming their rifles toward the shore. The speed of the boat seemed to decrease and we were heading directly toward the riverbank. This puzzled me. I could not understand why we should be heading in the direction from which the order had come to halt. The boat’s lights were turned off, and I heard a burst of gunfire from the bank. All of a sudden, the motor roared into full speed and the boat shot forward while it veered to one side as if we were about to leap over the bank itself. Meanwhile the shouting from the bank and the gunfire receded into the distance. The Japanese plan had succeeded! First they had pretended to obey the order to halt by approaching the bank slowly; but then, when the Chinese were taken in by the ruse, they had veered off from the bank and bounded away.’ About midnight the boat reached the mouth of the river at Taku, and soon Pu Yi and his entourage boarded the Japanese merchant ship Awaji Maru.16

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In Manchuria, the Japanese boosted local Chinese interests. Only at the central government level did they establish their dominance, making the puppet state. In early 1932, Doihara was appointed head of the Harbin Special Agency of the Kwantung Army. His negotiations with Chinese General Ma Zhanshan did not lead to results, and eventually Doihara instigated a riot in the city – yet another pretext for intervention. The 12th Division of the Imperial Japanese Army under General Jiro¯ Tamon occupied the city on 5 February 1932. General Ting Chao withdrew to northeastern Manchuria and pleaded for a ceasefire. Soon the state of Manchukuo was occupied by more than one hundred and fifty thousand Japanese troops and police.17 After the Japanese attack against Mukden, Zhang, the ‘Young Marshal’, did not offer resistance; instead, he asked the government in Nanking for directions. During the first days of the crisis, Chiang was not available – he was aboard a ship, returning to the capital. The executive Yuan answered Zhang’s query: ‘Do what you think appropriate’. Zhang assumed that he should not pose resistance to the Japanese.18 When Chiang was informed of the episode, he showed to the public that he would fight the Japanese (he consulted about it with the US and British ambassadors, among others, and discussed military plans with his staff) – in private, however, he admitted that China was very weak, writing in his diary on 7 October 1931 that it was ‘impossible for it (China) to be weaker.’19 Soon the Japanese instigated more ‘incidents’, with bombings against their consulate and a Japanese bank in Harbin. The Special Services Organs unleashed intimidation against the Chinese officials in Harbin, Mukden and Kirin. Doihara was put in charge of Special Services Organ in Mukden.20 He ordered his spies to ‘convince’ Pu Yi to come to Manchuria because of the ‘popular will’ to lead. The monarch had to arrive at Yingkou before the port froze in mid-November. It was Yoshiko Kawashima, a Tokyo spy, who persuaded PuYi to travel to Manchuria. Yoshiko Kawashima was born Aisin Gioro Xianyu, in Beijing; she was the fourteenth daughter of Shanqi, the tenth son of Prince Su of the Aisin Gioro Manchu imperial family. She was adopted by a friend of his father, Naniwa Kawashima, a Japanese secret agent operating in Manchuria who had also trained Chinese policemen in Beijing. It was claimed that she later had an affair with him.21 In 1927, Kawashima had married Ganjuurjab, the son of Inner Mongolian Army General Jengjuurjab, the leader of the Mongolian-Manchurian Independence Movement. After their divorce,

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Kawashima moved to Shanghai, where she met Japanese military attache´ and intelligence officer Ryukichi Tanaka, who recruited her as a contact with the Manchu and Mongol nobles. She was in Shanghai during the Japanese attack. Soon Kawashima served under Doihara in Manchuria, and later formed her own unit in the Rehe campaign. In 1932, Kawashima established an independent counter insurgency cavalry force, comprising five thousand former bandits. The Japanese newspapers called her ‘the Joan of Arc of Manchukuo’, but the Kwantung Army did not incorporate her force. Pu Yi regarded her a member of royal family and welcomed her in Tianjin. On Doihara’s orders, she persuaded Pu Yi to go to Manchuria and assume the title of the Emperor of Manchukuo. Doihara staged riots and bombings in Tientsin to scare Pu Yi into leaving the city and cooperating with him. Some Chinese arrested for the attacks disclosed that they were paid by the Japanese; nonetheless, many, among them Pu Yi, assumed that the rioters wanted to kill him.22 Eventually, Pu Yi fled as Doihara wanted him to. Once in Manchuria, Pu Yi was assigned Yoshioka Yasunori, a Kwantung Army senior staff officer, as his attache´. In reality, he was a spy who put constant pressure on PuYi to act according to Tokyo’s wishes.23 During the 1930s and up until 1945, Kawashima (usually in male uniforms) was chiefly a propagandist for Manchukuo. She gave an interview to a young American journalist, Willa Lou Woods, who published the book Princess Jin, the Joan of Arc of the Orient in 1937. There Kawashima presented herself as a banner person seeking the restitution of the Qing dynasty. She intrigued Woods and her readers by revealing that she was a spy posing as a ‘taxi girl’ in Shanghai. Soon the US press called her the ‘Mata Hari of the Orient’. Chinese and British articles spoke of her adventures, but all seemed to be fictional accounts to create her role as a determined individual.24 The Japanese were looking to a new pretext to attack China. In protest to the intervention in Manchuria, the Chinese public boycotted Japanese products in Shanghai; before long, Japanese shopkeepers went bankrupt. Tensions were escalating. In mid-January 1932, five Japanese Buddhist monks were attacked by Chinese citizens in a Shanghai street. One of the monks eventually died of his wounds. The Japanese rioted in revenge, killing a Chinese policeman. In this violence, a Japanese died too. On 18 January, five Japanese were attacked outside a Chinese towel factory. Two days later, fifty members of the Japanese Youth Protection Society, armed with daggers, burned down the factory – two Chinese died.25

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At midnight on 28 January, Japanese carrier-based aircraft bombed Shanghai’s northern train station. Troops invaded Hangchow and other areas north of Suzhou Creek. The 19th Route Army did not withdraw, but resisted. The same day (28 January) the Shanghai Municipal Council agreed to Japanese demands for compensation. Meanwhile, the Chinese 19th Route Army was seen as a warlord army with no conventional military value. In fact, many of its members served Du of the Green Gang. There was also a brigade (for salt taxes protection) of T.V. Soong, who had been authorised by Chiang to employ them against the Japanese. Chiang did not want to declare war on Japan, but he employed this forces to stall them. Nonetheless, Wang Geng, the head of the Tax Police Force in Shanghai, was arrested by the Japanese; they found him to be in possession of military maps of the 19th Route Army deployments around Shanghai – something that helped both in the fight for the city and in their landing in Liuhe.26 On 14 February, Chiang Kai-shek ordered the 5th Army to support the city’s defences. By 20 February, Japanese aerial bombing forced the Chinese to start withdrawing. The Shanghai Municipal Police intervened, turning against Chinese civilians – the factory was burned down by either Japanese agents or Chinese. Anti-Japanese demonstrations spread in the city. Tokyo ordered the deployment of naval vessels close to the city. The finance minister T.V. Soong, shocked by the wave of six hundred thousand refugees and the nine hundred factories destroyed, told Karl H. von Wiegand, a noted correspondent who had interviewed Kaiser Wilhelm II in 1915: ‘If China is placed before the alternative of communists, and Japanese militarism with its military domination, then China will choose communism’.27 John Fairbank, a Harvard student who later served in Chungking as an OSS officer during World War II, witnessed the battle: ‘we landed on the Bund, of the International Settlement a few hundred yards beyond the Japanese cruiser Idzumo and other vessels that were bombarding Chapei . . . The 19th Route Army from Canton dug in under the rubble of bombarded buildings was being supplied at night across the [Suchow] creek, a hundred yards wide, and Japan’s naval forces could not dislodge it.’28 Fairbank and his wife met and became friends with Smedley and her circle. She gave them books about revolution and once introduced them under false names to communist friends of hers.29 Throughout the conflict, the Japanese had a secret agent in SMP. Tan Shaoliang was considered the most important officer of the Special

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Branch of the Shanghai Municipal Police; he co-operated with Dai Li’s services in intelligence-sharing, targeting communists. Nonetheless, Dai Li’s men discovered that Tan was recruited by the Japanese; he was their ‘man’ in the SMP during the hostilities. The orders received from Chiang’s headquarters were clear: do not touch Tan as long as he helped the nationalists against the CCP.30 On 3 March, both the 19th Route Army and the 5th Army had to withdraw from Shanghai. The next day, a resolution of the League of Nations called for a ceasefire. Sporadic fighting continued until 5 May, when Chinese and Japanese representatives signed the Shanghai Ceasefire Agreement. The city became a demilitarized zone; Chinese troops would not be stationed near Shanghai. Soon the 19th Route Army received new orders from Chiang; they were to campaign against the Red Army in Fujian. The generalissimo was more afraid of the CCP and the Red Army than the Japanese. Meanwhile, in the confrontation with the Japanese, only Shanghai was covered by the truce. On 1 January 1933, Japanese troops occupied Shanhaiguan on the Yellow Sea. Chiang was convinced that he had first to win over the CCP and then to turn against the Japanese, who would soon pose a threat to Peking (Beijing) and Tianjin. He conceded for another local armistice in North China, to be called the Tanggu Truce. It was agreed that that the northern part of Hebei province would be a demilitarised zone – essentially under Japanese control.31 By 1935, according to Major General Onouchi (who had specialised on Russia in the Kwantung General Staff and in the Harbin Special Agency) plans were drafted for sabotage in case of war with the Soviet Union. The Harbin Special Agency had an organisation of five hundred agents located in Manchuria, Siberia, Manchouli, Hailar, Sanga, Chamus and Fuchun – under the command of General Akikusa Shun. According to a post war US intelligence report, Akikusa Shun was the ‘most capable [general] in the Japanese Army for the training of personnel for plots, intelligence activities and their execution’.32 From each of these points, they dispatched agents to Soviet Union. Lieutenant Suzuki and two civilians aided Onouchi. One of them, Masakane Kikuta, was an expert on Russian communism. Masakane was born in Japan in 1903 and moved to Russia; he secretly joined an anti-communist group and worked at the Leningrad Science Academy. In December 1933, he was arrested by the OGPU and sentenced to ten years imprisonment. Nonetheless, a year later he was

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returned to Japan on a political prisoners’ exchange. In October 1935, he started working for the Kwantung Army. In March 1940, he was assigned in Peking as an adviser to the Japanese forces there. Masakane later became one of the most active in anti-communist campaigns in China, and worked under General Yamaoka and General Akikusa. He later became an instructor of sabotage at Nakano intelligence school. The second civilian was Yanagi, an interpreter who also acted as a liaison, and who had a secret contact in the Russian consulate. The informer in the consulate disclosed valuable information, especially during the Manchurian incident.33 According to Onouchi, counterespionage in Harbin was within the responsibilities of the Kempeitai – the local chief of which was Kawamura. The Russians had an active organisation in Harbin, whose head was Seraotsky.34 Another top-ranking officer was Major General Hishimura Toschio, responsible for ‘organisation and development of intelligence services networks.’ Having served as military attache´ and organiser of intelligence networks in Finland and Sweden, in spring 1940 he was named chief of the intelligence section in the Kwantung Army. In spring 1945, he was chief of the central special intelligence service (cryptanalytic). He was considered ‘one of the most highly qualified among Japanese intelligence officers’. During his tour with the Kwantung Army, he drafted sabotage plans for a future war with the Soviet Union. In the Kwantung Army, he worked with Colonel Kotani Etsuo, about whom it was said: ‘[He is] exceptionally able, particularly in gathering intelligence from all possible sources. During his European assignment, he built up his own personal intelligence system there . . . [He] understands sabotage and the training of intelligence services personnel. Knows the younger members of the Japanese intelligence services on Russia, and as one of the most recent chiefs of the Russian Section [of the Imperial General Staff] is acquainted with the over-all Russian situation in detail.’35 Another officer was Colonel Hayashi Baburo, an ‘extremely able man’ who was assistant military attache´ in Moscow in 1939. A member of the Russian section of the IGS, ‘he is in a position to know the recent aspects of the Russian situation in detail, and is also acquainted with the younger officers working in that connection . . . [He is a] highly qualified intelligence officer . . . [who] understands sabotage’.36

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The pervasive networks of Chiang’s secret services failed him and offered no protection to his person. By 1935, the ‘Young Marshal’ Zhang Xueliang argued that all Chinese would have to unite against the Japanese. Already, Zhang Xueliang had sent a radio telegram to Mao, informing him of his consultations with Chiang. Chiang had authorised Chen Lifu, his trusted secretary and spymaster – who was overseeing intelligence services – to contact the communists. But the terms he offered them were unacceptable. Nonetheless, secret communication continued. In May 1935, Chen Lifu and Zhang Qun, Chiang’s closest associate, met with Chou Enlai and Pan Hannian to discuss the possibility of a united front against the Japanese. Chen’s and Zhang’s proposals were dramatic in scale – to reduce the Chinese Red Army to 3,000 men, abolish the name Red Army and accept the authority of the KMT Military Council. There was no agreement. Secretly, Mao was in talks with Zhang Xueliang about forming an alliance against Chiang. On 31 October, Zhang Xueliang discussed with Chiang the option of a United Front; Chiang was furious, and said that anyone who wanted to turn against Japan before destroying the communists was ‘an enemy of the state’.1 Zhang asked Chiang to visit Xi’an to persuade Manchurian and Shaanxi officers and troops (who were upset about the Japanese intervention in their land) to continue fighting the CCP face to face. Chiang agreed. In early November, Zhang revealed to Ye Jianying, the communist secret liaison in Xi’an, that he was planning a coup d’e´tat.

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As Chiang travelled to Xi’an, Chou Enlai and Pan Hannian met Zhang Qun and Chen Lifu in Nanking for new secret talks about a united front. The CCP showed itself flexible in the terms of cooperation, and its draft agreement was ready. Afterwards Chou Enlai went to Xi’an, but he did not tell Zhang Xueliang of the agreement. Zhang Qun briefed Chiang on the draft. Chiang wanted to continue with the offensive – he felt he had the military advantage. In any case, the KMT secret services did not suspect a coup.2 Chiang insisted that the CCP had to be defeated, and that only then should the KMT move against the Japanese. H.H. Kung was worried about Chiang’s trip to Xi’an. The generalissimo sought to show his fearless character and flew with his top officers. In the meantime, Chou Enlai, Pan Hannian and Stalin’s representative went to Nanking to continue secret negotiations for a KMT-CCP alliance against the Japanese. Chou Enlai told his interlocutors Zhang Qun and Chen Lifu that his side would accept the KMT’s terms: there would be no communist flags and insignias, their forces would be put under the nationalist government’s military council and the agrarian reforms against landlords would be stopped. They drafted a joined proclamation to be signed by Mao and Chiang. Chiang was informed of this draft and sounded positive; he appeared willing to sign it once he had returned to Nanking. Nonetheless, the generalissimo kept it secret from Zhang, who continued urging for an alliance against the Japanese. No doubt Chiang wanted to keep his options open: among them the latest offensive against the CCP, the ‘sixth encirclement campaign’. Chiang probably calculated that after a KMT victory in the battlefield, Mao would be compelled to leave for the Soviet Union and the Nationalist Army would win the war.3 Chiang could not convince Zhang of his strategy against the CCP, and he decided to leave on 12 December: the day the planned offensive against the communists would commence. At dawn Zhang’s bodyguards raided the resort outside the city where the generalissimo was staying. Hearing shots, Chiang realised that the bulding was under attack. One of his officers urged him to escape. In his pyjamas, with no shoes, Chiang climbed out the window and ran away with two of his men. His head bodyguard officer was executed.4 Eventually they split and Chiang was injured, but they hid together with others who had also escaped, in a cave. Zhang’s troops found them.

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Chiang confronted them: ‘I am the Generalissimo. Kill me, but do not subject me to indignities.’ Their answer was surprising: ‘We will not shoot you,’ the officer said. ‘We only ask you to lead our country.’5 Later he had a heated discussion with Zhang. ‘If you still recognise me as your superior,’ said Chiang, ‘you should send me to Luoyang, otherwise you are a rebel. Since I am in the hands of a rebel you had better shoot me dead. There is nothing else to say.’ Zhang’s response was understated: ‘Your bad temper is always the cause of trouble’.6 Zhang and General Yang presented Chiang with the ‘points of national salvation’, a set of forty-eight demands for the Nanking government to accept. A ‘national salvation’ government had to be formed, and the civil war had to stop. They demanded that political prisoners be set free. On hearing the news of the kidnapping the KMT Executive Committee, the Political Council made H.H. Kung acting president of the Executive Yuan and He Yingqin commander in chief. The latter started preparing a campaign against Xi’an to free Chiang. Meanwhile, Chen Lifu, using Hannian’s secret code, informed the Comintern to exert pressure on Zhang; if the generalissimo was killed then China would be leaderless, and the potential for resistance against the Japanese – and thus any Soviet strategic benefit from it – would be diminished.7 In his turn, Mao (who hoped that Chiang would not escape this crisis alive) contacted Zhang, naming him ‘National Leader in Resisting Japan’. Moscow was soon informed. General He Yingqin ordered Central Army divisions to march against Xi’an. Many feared Chiang would be killed and that Wang and He would form a pro-Japanese government. Stalin sent a telegram to Mao: the plot against Chiang was not in favour of the interests of the Soviet Union and the CCP. It was a provocation of the Japanese. Mao had to find an accommodation with Chiang – even at the cost of subordinating the Red Army forces to the Nationalist Army. Mao was surprised by Stalin’s stance; before the incident he had urged the CCP to continue guerrilla warfare against the KMT. Now, Mao had to follow the directive of Stalin and effectively form an alliance with the enemy. Confined to a house Chiang, felt increasingly desperate. Journalist W. H. Donald, an adviser to his wife Mayling, rushed to Xi’an and warned Chiang that the defence minister, Ho, wanted to attack Xi’an in order to kill Chiang and then align himself with Japan.8 Chiang, who was prone

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to dramatic and hubristic thoughts, compared himself to Jesus. He believed that the hardship he was encountering was just a chapter in a his personal story in which he was the saviour of China. In a diary entry from 19 December 1936, he wrote: ‘Now that I am faced with death, life and death are a matter of nothing but five minutes. I am not ashamed of being baptized – for it is like the suffering on the Cross: who would take the humiliation but myself?’9 Chou Enlai, who had gone to Yenan for consultations, returned to Xi’an carrying Mao’s orders: the generalissimo was not to be touched, told Marshal Zhang Xueliang, because Chiang was the only leader who could unite China against the Japanese. Thus, Zhang should continue to try to convince Chiang to lead a united front with the CCP. In his turn, General Yang did not want to set the generalissimo free, fearing for his retribution – he demanded guarantees, but the proud Chiang would not sign or pledge anything while in captivity. Meanwhile, the Central Army of General He was approaching Xi’an. Bombers had attacked the railway line close to city. In his turn, Wang Jingwei – Chiang’s sworn enemy – played a dangerous game, flying to Europe to request a meeting with Hitler. Wang was admitted to the office of the Fu¨hrer, and opened a discussion about the place of China in the anti-Communist Axis. Stalin was surprised on being informed of this initiative of Wang. Almost immediately, the Pravda accused Wang and Zhang Xueliang of working for the Japanese, having conspired to kidnap and hold Chiang. Together with SSD head Dai Li, Chiang’s wife, Mayling Soong, reached Xi’an by aeroplane. In his diary, the generalissimo noted the risk she took to be with him and how sad he was when he met her. He quoted a passage from Jeremiah 31:22: ‘The Lord will create a new thing on earth – a woman will surround a man.’ Again, rather grandiloquently, he assumed that God had sent Mayling to come to protect him.10 Dai Li knew that many wanted him dead; it was a wellknown secret that he was the generalissimo’s ruthless spymaster. By flying to Xi’an, he had shown Chiang that he was loyal, putting his life at risk – just like Chiang had done in 1922 when he boarded the Yongfeng outside Canton to be with Sun Yat-sen, who had been betrayed by his troops and attacked by the warlord Chen Jiongming. Chiang in 1922 and Dai Li now, in 1935, made the act of funan, ‘joining together in a time of difficulty’.11

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Zhang assured Mayling that he would set the generalissimo free. On 22 December, Chiang sent a message to Chou Enlai with his terms for a united front: to abolish the name Red Army and the class struggle, and to recognise him as commander in chief. In effect, Chiang was asking what had already been agreed between Chou Enlai and Zhang Qun. Chou declared that the CCP would join forces with and obey the Nanking government but that it would ‘retain its military system’ – not merging with the nationalist forces or those of the warlords.12 Chiang concurred that he would abort operations against the Red Army and join a united front when the war commenced. But unless he was released, he would not accept anything formally. In his discussions with T.V. Soong and his sister Madame Chiang, Chou Enlai was indiscreet; he informed them about something the Juntong was unaware of: Soong Ching-ling (Madame Sun Yat-sen), the sister of Madame Chiang, had sent Mao a gift of USD 50,000. She was ‘contact person’ in Shanghai. T.V. Soong and Madame Chiang could ask to communicate what they wanted of Mao via their sister. Ching-ling complained of these indiscretions in a letter to Wang Ming (the antagonist of Mao in the CCP) in Moscow.13 Chiang would remain in the dark that one of the Soong sisters was a communist; in fact, she attended the proclamation of the People’s Republic of China on 1 October 1949.14 Soong Ching-ling had graduated from Wesleyan College in Macon, Georgia in the United States. She married Sun Yat-sen, the founder of the KMT, in 1915. After his death she was elected to the KMT Central Executive Committee. In 1927, with the purge of the CCP, she went to Moscow. She returned in 1929 and stayed in Shanghai until 1937. After the Japanese occupation she moved to Hong Kong, and then to the Chinese capital Chungking, where she established the China Defense League, to raise funds, and supplied the CCP armies in northern China. Soong was one of the CCP’s elite sources close to the nationalist government. In 1948, she was appointed honorary chairwoman of the Revolutionary Committee of the Kuomintang, a left-wing splinter group of the KMT that claimed to be the legitimate heir of Sun’s legacy.15 Dai Li flew to find General He to transfer Chiang’s order to stop the advance against Xi’an. Zhang and Yang argued because the latter wanted Chiang to admit his concessions while in captivity. Chou Enlai asked to see Chiang. When he entered he saluted Chiang, showing discipline towards the now united front commander. He told him that the CCP was

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saving strength for a year to fight the Japanese and that the kidnapping of Chiang did not benefit them. Chou asked for the CCP not to be purged and to send a delegation to Nanking. Zhang Xueliang agreed for the generalissimo to return to Nanking. The generalissimo addressed him and General Yang, telling them that he did not held a grudge against them but that from now on they should obey him. Zhang flew with him into Nanking as a gesture. Chiang had a hero’s welcome in the capital.16 The kidnapping of Chiang was the total intelligence failure of Dai Li, who boasted about his army of spies. Stalin’s trust in Chiang’s leadership in the coming Sino-Japanese war saved his life – forcing the CCP and Mao, in particular, to present themselves as willing to subordinate their forces to the KMT. Many argue that the Xi’an incident saved Mao; if the kidnapping had not occurred, then KMT forces would have continued with the encirclement campaigns, ousting the Red Army from China. The argument goes that the eventual united front against Japan bought the CCP time to prepare for the final confrontation with Chiang. Nonetheless, it should be pointed out that, before the kidnapping, the CCP had been trying to find a way to accommodate the KMT, and that Chou Enlai had been secretly negotiating with Nanking. In any case, after the end of the crisis, even resourceful strategists like Chiang, Stalin and Mao could not be certain of the outcome of their plots because the war was always unpredictable for all. Ambassador Sir Hugh Knatchbull-Hugessen was optimistic that Sino-Japanese relations were slowly improving. ‘I am inclined to write off the possibility of the present Sino-Japanese difficulties leading to serious trouble, certainly to a war’, he wrote to Sir Alexander Cadogan, the permanent undersecretary at the Foreign Office, on 3 March 1937. ‘Of course it is still, I suppose, possible that the soldiers in Tokyo will run amok, but from what I hear here it seems unlikely. Remarks are repeated to me as having been made by Japanese officials that the soldiers are having great heart-searching about their Chinese policy and that they are realizing that it has wider and other aspects than the purely military one . . . The Japanese Embassy here [in Nanking] give me the same impression.’ Matsumara, a secretary at the embassy, told KnatchbullHugessen that Japan would focus on Russia, working to improve relations with Moscow.17 Knatchbull-Hugessen wrote that after the Xi’an incident ‘it is possibly unfortunate that Chiang Kai-shek’s health has made it necessary

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for him to lie low quite so long, as a certain amount of limelight is a necessary part of his political diet.’18 He added that the generalissimo’s position was not damaged because the public backed him and that he would soon reappear to make his mark in politics. The ambassador hoped for a period of ‘comparative calm’ and political stability in China, with Sino-Japanese and Sino-Russian relations improving. He hoped for an understanding between Japan and China about Manchuria.19 In his reply, Cadogan put emphasis on Chiang’s nonappearance: ‘I do not know whether this is due to his health or to less influence after the Sian [Xi’an] incident: or whether he, good judge of Chinese politics, finds it better for the moment to remain quiet.’20 Knatchbull-Hugessen was wrong. The Imperial Japanese Army tactical commanders wanted a pretext of war, and so did their superiors in China and Tokyo. At 2300 hours on 7 July 1937, Japanese troops were on a drill near the Marco Polo Bridge, located outside the walled town of Wanping. Their command had agreed to provide prior notice to the Chinese any time manoeuvres were held, but this time they did not issue any warning. Fearing the coming of an attack, Chinese sentries fired at the Japanese, who swiftly responded. The exchange of fire was brief. Major Kiyonao Ichiki was informed that one of his soldiers, Private Shimura Kikujiro, was missing. He assumed that he was captured by the Chinese; he reported to Colonel Renya Mutaguchi, who called Chinese regimental commander Ji Xingwen. The Japanese demanded a search party to look for the missing soldier in Wanping. Once informed of the crisis, Chinese General Qin Dechun, the acting commander of the 29th Route Army and chairman of the Hebei-Chahar Political Council, replied to the Japanese that they had violated Chinese sovereignty by not giving advance notice of manoeuvres: he could not allow their search party in Wanqing, but said that his troops would look for Private Kikujiro and that a Japanese officer could be with them. Initially, the Japanese agreed. Soon, however, the Chinese saw Japanese soldiers making a bid to penetrate Wanping’s defences. The Chinese opened fire and the Japanese had to fall back. The Japanese issued an ultimatum. General Qin ordered 37th Divisional commander General Feng Zhian to have his troops on standby for response. Eventually, it became clear that Private Shimura Kikujiro was neither killed nor captured by the Chinese; he returned to his unit after wandering off to relieve himself. Upon being informed of the episode of the Sino-Japanese firefights at the bridge, Mao and

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General Chu Teh telegraphed Chiang and issued a circular message to all CCP army units: the CCP was ready to follow Chiang Kai-shek’s orders in battle.21 At around 0330 hours on the morning of 8 July, the Japanese deployed four artillery pieces and a company of machine gunners close to the bridge. In response, the Chinese gathered reinforcements. At around 0450 hours, in accordance with the initial agreement, two Japanese officers were permitted to enter Wanping. But at 0500 hours the Japanese infantry opened fire and attacked the bridge. The Japanese took the bridge, but the following morning the Chinese pushed them back. For the top leadership of both countries it was an incident to be deescalated. Sino-Japanese consultations commenced. The Japanese agreed to give an official apology, and to punish those responsible for the provocation. The Hopei civilian constabulary would undertake the policing of Wanping. Nonetheless Japanese Garrison Infantry Brigade commander General Masakazu Kawabe continued shelling Wanping for three hours before he committed to the truce. By the evening of 9 July, fear and suspicion had led to further firefights. Four Chinese divisions and three Japanese divisions moved gradually against each other. By mid-July, the Foreign Office gave the Japanese the benefit of doubt. According to the intelligence received ‘the present situation in the neighbourhood of Peking had not been brought about by deliberate Japanese initiative. The General Officer Commanding had been absent and there was other evidence to show that the Japanese had been rather taken by surprise. There was, however, a danger of pressure being put upon the Japanese Government to take action . . .’22 But the Japanese field commanders had no intention of de-escalating – it was a time for war. Japanese artillery bombarded Wanping on 20 July, and Langfang was attacked on 25 July. On 28 July, the Chinese forces were forced to withdraw. The Battle of Peking (Beijing)–Tianjin ended on 31 July 1937 with a Japanese victory. But the war was not over; Chiang Kai-shek was determined not to succumb to Japanese aggression. Meanwhile, in Manchuria, an American NKVD spy kept the Kremlin informed of developments. Isaiah Oggins and his wife, Nerma, had worked for the Comintern in Berlin and Paris in the 1920s, reporting on Trotskyites and keeping an eye on Trotsky’s son, Lev Sedov. In September 1935, Oggins alone was assigned to China, first reaching Shanghai, where he collected intelligence for a year, and then reaching

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Dairen and Harbin, where he posed as writer, antiques dealer and trader. He reported to Charles Emile Martin, who was later a member of the Red Orchestra (the NKVD spy network in Berlin). According to some accounts, Oggins took part in military intelligence missions behind Chinese and Japanese lines.23 In October 1937, Martin, his wife and Oggins fled Manchuria. Oggins reached Paris in February 1938; he went to Moscow, where he was arrested by the NKVD. He was convicted for treason and sentenced to eight years imprisonment. On 8 December 1942, US diplomats visited him at the Butyrka prison in Moscow, but Soviet authorities refused to release him. In 1947, he died in prison. The Soviets claimed he died of a heart attack; in fact, he was executed by lethal injection. The case of Oggins, a long-forgotten spy, was brought to light again on 23 September 1992, when President Boris Yeltsin offered Malcolm Toon, a US diplomat, Oggins’s NKVD file confirming his murder on Stalin’s orders.24 In Shanghai, General Zhang Zhizhong, the commander of the Chinese forces, prepared for an attack. On 9 August 1937, First Lieutenant Isao O¯yama, of the Japanese Naval Special Landing Forces, attempted to enter the Hungchiao Airport in Shanghai. Under the terms set in 1932, unauthorised entry was prohibited. Chinese policemen fired at and killed him. On 10 August, the Japanese consul general in ¯ yama’s attempt, but issued a demand that Shanghai apologised for O the police, the Peace Preservation Corps, disarm. At 0900 hours on 13 August, more than 10,000 Japanese invaded the suburbs of Shanghai. The battle, which would last for three months, had begun. On the eve of the invasion, Dai Li had Wang Zhaohuai, the head of the Investigation Brigade of the garrison command, as his most valued secret agent. The Shanghai spies were hunting communists; they had to adjust their tasks and sources to the new threat. In the Japanese community ‘the little Tokyo’ only one secret agent, the owner of a pawnshop, was considered trustworthy; all the other informers were known to be double agents of the Japanese. A few days after the Marco Polo bridge incident, one double agent reported that his Japanese case officer told him, ‘it’s only going to take a few days’ time before Shanghai is going to be ours. Then your work is going to really get busy all of a sudden.’25 The Chinese suffered heavy casualties in their best-trained units and in their officer ranks. On 8 November, Chiang was forced to order his forces to retreat. The Republic of China appealed to the League

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of Nations and the Western signatories of the Nine-Power Pact of 1922 – but to no avail. The United States, United Kingdom, France and Italy were not willing to turn against Japan. The early phase of the Japanese operation in Shanghai found Dai Li in the French Concession. On 13 August, at a well-guarded villa of 10 Rue Doumer, Dai Li met and consulted with the Green Gang leader Du Yuesheng. They agreed to form secret paramilitary units which evolved into the Pudong Guerrilla Brigade, the Lake Tai Special Action Command, the Loyal and Patriotic National Salvation Army, and the Jiangsu-Zhejiang Operations Committee. According to secret intelligence obtained by the Shanghai Municipal Police – who must have noted that some very important people had gathered in the villa – Chiang’s Military Affairs Committee had decided to set up an ‘emergency period service group’ to murder Japanese spies in Shanghai. The secret guerrilla force was put under the control of General Wang Jingjiu, the commander of the 87th Nationalist Division, his deputy, General Cai Jingjun, the chief of the Shanghai Public Security Bureau, and Du Yuesheng. The mobster sought to sideline the others, who duly agreed, and to run the secret army. Du (who sought to benefit from this arrangement) made a bid to appoint the lieutenants of this organisation, only for Dai Li to react and Du to protest to Chiang. It was the Shanghai Police chief, General Cai Jingjun, who persuaded Du to accept the arrangements of the secret army which would be formed within the Public Security Bureau with the support of the Loyal and Patriotic Association group.26 Dai Li’s agents did not cooperate with Xu Enzeng’s Zhongong agents in Shanghai. Both secret services posed resistance to the Japanese and conducted their own assassination campaigns (as we will explore in the following chapter).27 Chiang Kai-shek, who knew that Stalin had saved him in Xi’an by putting pressure on the CCP, agreed to sign a non-aggression pact with the Soviet Union on 21 August. This agreement opened the way for massive Soviet military aid, and for Stalin to dispatch fighters to confront the Japanese bombers over China. More than four hundred aircraft were given to China. Until March 1941, Soviet aid boosted Chinese defences. Chiang had realised that he would not have the luxury of worrying about long-term Soviet plans for Outer Mongolia.28 As the crisis in Shanghai escalated, on 26 August Ambassador Sir Hugh Knatchbull-Hugessen decided to go to the city to help the

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British community in any way possible. Knatchbull-Hugessen had been informed that Chiang was about to reach the city by car to review his troops. The ambassador and his party received confirmation that the generalissimo had reached his destination and then started their drive with two black saloon cars flying the Union Jack, accompanied by the military attache´ and other staff. It was a long drive from Nanking; near the small village of Taitsang, fifty miles from Shanghai, they saw Chinese civilians on the street. One woman was shouting at them in Chinese ‘aeroplane, aeroplane’. After eight miles the party was machine gunned by a Japanese fighter. The staff jumped out of the cars to take cover, but the ambassador could not move: a round had hit him, passing close to his spine. The fighter returned and this time dropped a bomb, which did not injure any of the party. The calm ambassador was rushed to hospital in Shanghai; miraculously, he survived the aeroplane’s heavy caliber round and was not paralysed. The Japanese counsellor visited him the next day, but he offered no apology.29 No doubt, the Japanese pilot aimed at the cars in order to kill their occupants; he may have assumed or had secret intelligence to the effect that a high-ranking Chinese official, perhaps even Chiang Kai-shek himself, was about to reach the city. On 23 October 1937, while driving from Nanking to Shanghai, Mayling’s (Chiang’s wife) sedan was strafed by a Japanese fighter. The car overturned and she was found unconscious, with a broken rib.30 The Japanese attacked Nanking, which, after three weeks of stubborn resistance, fell on 13 December 1937. On the eve of the fall of Nanking, sixty-one imprisoned members of the CCP received a secret authorisation from the CCP to pretend to defect to the KMT to save themselves – something they did to avoid being executed by the Japanese. Nonetheless, during the Cultural Revolution Kang Sheng accused them of turning moles of the KMT and duly arrested and tortured them.31 The Japanese troops had clear orders to execute all prisoners, and they committed mass atrocities against the population for weeks; before mid-February 1938, as many as 300,000 Chinese were massacred. The Japanese atrocities against men, women and children included executions, live burials, disembowelment, decapitations, impalement and rape. Their aim was to terrorise the Chinese so that they would not pose resistance in the future.32 Meanwhile, Wang Jingwei, Chiang’s antagonist, formed a group comprising KMT party cadre arguing for a settlement with Japan.

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The generalissimo agreed to secret negotiations, demanding, however, the ‘complete withdrawal of Japanese troops’. Eventually, the negotiations broke down.33 Nonetheless, Tokyo secretly contacted Wang Jingwei, arguing that he could form his own government to seek peace. Gradually, the CCP and KMT commenced their cooperation under the United Front. Chou Enlai was appointed vice-head of the political section of the Military Council, chaired by General Chen Cheng.34 Chiang opted for a desperate tactic: the bombing of dikes, causing huge floods which separated the northern and southern battlefields so that the Japanese could not advance. The flooding cost the lives of 800,000 Chinese.35 The Japanese occupation zone included Shanghai, Nanking, Xuzhou, Wuhan, Manchuria, all the coasts south to near Wenzhou and several ports, among them Canton. Nonetheless, Chiang never forgot that the CCP was the main threat to his rule: he believed that if he could resist the Japanese for a year, then the eventual intervention of the western powers would have a decisive impact on the confrontation with the CCP.36 Surprisingly, upon the start of the 1937 Sino-Japanese war, the Chinese regime was obsessed with the British ‘imperial’ role in China. Herbert Yardley, a noted American codebreaker who taught the staff of Dai Li’s cryptographic section, told of the escape of a Japanese prisonercodebreaker, hinting that he could have been helped by the British. He may have voiced the suspicion to Dai Li himself in March 1939: Chinese officer: He [the Japanese] was sneaking into British embassy grounds [in Chungking]. He thought the British would grant him immunity to capture. Yardley: Well, wouldn’t they? Chinese officer: They did not have a chance. The Jap was dragged away before they knew he was there.37 In his turn, Stalin deterred Tokyo from aggression against the Soviet Union. In the summer of 1939 a number of skirmishes between Soviet and Japanese forces of the Kwantung Army turned into full-scale battles near the Khalkhyn Gol river. Indeed, since 1931 the incidents between the two armies had increased dramatically. In 1936, two hundred and three episodes occurred. The Japanese felt confident in confronting the

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Soviet Union for yet another reason: Soviet General G.S. Lyushkov, the head of the NKVD forces in the Soviet Far East, based in Hunchun, defected and revealed Soviet plans, capabilities and codes. He had been involved in the Moscow trials, and his orders were to purge NKVD and Red Army top brass in the Far East – among them Marshal Vasily Blu¨cher (in the period 1924–7 he was a chief military adviser in China). On 13 June 1938, Lyushkov defected, crossing the border into Manchuria. To his Japanese interrogators, he revealed NKVD secrets and proposed a plan to assassinate Stalin when he visited Sochi. The attempt was supported by the Japanese but foiled by a NKVD secret agent inside the group of conspirators; it was, however, considered the most serious attempt against Stalin’s life. Lyushkov revealed details about Soviet forces in the Far East and the impact to the military of the purge ordered by Stalin. Eventually, in July 1945, Lyushkov was sent to the Japanese Kwantung Army’s Special Intelligence organs in Manchuria. On 7 August, the Soviets invaded Manchuria; Lyushkov was presumed dead, killed either by the Red Army or by the Japanese.38 From 29 July to 11 August 1938, the battle of Lake Khasan caused casualties on both sides; eventually the Japanese were defeated. In the summer of 1939, a new large-scale confrontation between the Red Army and the Japanese would spark. The main force near the borders with Mongolia was the 23rd Division, under the command of General Michitaro Komatsubara. It is suggested that Komatsubara was acting as a Soviet spy. In 1927, he was appointed military attache´ at the Japanese Embassy in Moscow and remained there until early 1930. Russian authors claim that he was the target of a ‘honey trap’ of OGPU (the predecessor of NKVD). In 1932, Komatsubara became head of the Harbin Special Organ, spying for the puppet government of Manchuria. Some episodes suggest Komatsubara was not acting in good faith towards the Japanese military. Interestingly, while in Moscow in 1929, Komatsubara informed Tokyo that Stalin would not attack China – in fact, the Kremlin decided the opposite, seeking to reclaim control of the Chinese Eastern Railway. On 17 August 1929, he cabled Tokyo to say that the Soviet Union would not attack and advance in Chinese territory – thus easing the nervousness of Tokyo with reference to Soviet plans. A fortnight later, the Soviets invaded without fearing of a Japanese response. In 1933, Moscow leaked to the press secret Japanese documents of the Harbin Special Organ; the Japanese were discussing

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plans to claim by force the Chinese Eastern Railway from the Soviet Union. Researchers suggested that the only source of the leak could have been Komatsubara, who had been acting under blackmail since his Moscow tour.39 Moreover, in late 1932 Moscow was provided with a secret paper which was at the disposal of Harbin Organ; authored in August the same year by the head of the Russian Department in Tokyo’s General Staff Headquarters. The paper made reference to biological warfare against enemies of Japan. Some assumed that Komatsubara could have been responsible for this leak as well. Indeed, researchers deemed peculiar that, on 22 August 1932, the Politburo in Moscow examined Komatsubara’s request to be allowed to reach Khabarovsk to ‘have a conversation’ with Blu¨cher and V.K. Putna, the commanders of the Red Army in the Far East. Nonetheless, Stalin denied Komatsubara’s request. In any case, Komatsubara’s stance in the battle of Khalkhyn Gol/Nomonhan raised doubts and suggested that he may have wanted his forces to provoke the Soviets and suffer defeat. This sounds like a far-fetched conspiracy theory. Both armies clashed first on 11 and 12 May 1939.40 From the beginning, Komatsubara escalated the confrontation – despite the opposite views of his chief of staff, who specialised also in the Soviet Union (he had served as a military attache´ in Latvia, Lithuania and Estonia in 1933– 5). Komatsubara wanted war, but all his staff knew that the 23rd Division was for border defence and reconnaissance and not for offensive operations. Moscow dispatched General Georgii Zhukov (later Marshal) to Nomonhan; on 30 May, he reported that the Japanese had bombed Soviet air forces bases. In August, Komatsubara ordered a doomed offensive. His chief of staff had been killed on 4 July.41 Eventually, the battle cost the Japanese twelve thousand casualties (dead and wounded) of the fifteen thousand initial force. Tokyo would not challenge the Soviet Union throughout World War II.42 Possibly, Komatsubara was targeted by the OGPU once in Moscow; the leaks of the Japanese documents may have originated from him. But there is no strong evidence that he wanted the 23rd Division to be destroyed by the Soviet forces, and one possible explanation would be that he was simply overconfident and arrogant, believing that he could destroy the Soviet forces.

CHAPTER 6 ROGUE SPYMASTERS

Tang Shaoyi, an elder politician who was approached by the Japanese to form a collaborators’ government, loved antiques. He had entered into negotiations with the Japanese for him to lead the government, but he still had time for his hobby and to accept visitors. In the spacious living room of Tang’s mansion, two Chinese visitors greeted him kindly. They were accompanied by Xie Zhipan, a relative of Tang. The visitors presented Tang with a box containing a rare vase. While Tang admired the detail and craftsmanship of the vase, one of the visitors took a machete out of the box’s false bottom and struck him in the neck. He collapsed on the sofa, which was now soaked in his blood. The assassins left. Xie Zhipan was one of Dai Li’s secret agents; the attack was a message sent to anyone willing to support the Japanese.1 The Japanese sought to find willing collaborators in China. The socalled puppet ‘Reform Government’ was formed to administer Kiangsu, Chekiang and Anhwei provinces – it lasted until 1940.2 Wang Jingwei saw the Japanese invasion as an opportunity to claim authority in China. Wang was exiled in Hanoi, only to plan his return. On 21 March 1939, Dai Li’s agents stormed his house and shot Zeng Zhongming, Wang’s private secretary, in his bed, believing he was Wang. Wang promptly escaped.3 It was not the first time Wang was targeted. On 1 November 1935 Wang attended the plenum of the KMT in Nanking. Wang and the other leaders were preparing for a group photograph, when an assassin disguised as a journalist fired at him, wounding him. Wang and his entourage believed that Chiang, who happened to be in a nearby washroom, was behind this attempt on Wang’s life.4 In January 1940,

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Wang chaired the puppet ‘National government’ in Nanking, insisting that he was saving China from communism. Meanwhile Chiang and Dai Li were unaware that there was a German spy close to them. Hitler had succumbed to Tokyo’s insistence to withdraw the German advisers and to stop the arms aid to Chiang. Nonetheless, seven German staff officers resigned and remained in China. In the mid-1930s, Walter Stennes became close to Chiang and his wife. He was a former Nazi Brown Shirt leader in Berlin who had led a failed party revolt against Hitler in 1931. After Hitler became chancellor in 1933, Stennes was arrested and tortured; it was only after the intervention of President Hindenburg that he was released. In 1934, Stennes reached China and presented Chiang with a letter of recommendation from General Erich Ludendorff. It was Ludendorff who told Hindenburg in 1933: ‘I solemnly prophesy that this accursed man (Hitler) will cast our Reich into the abyss and bring our nation to inconceivable misery. Future generations will damn you in your grave for what you have done.’5 Chiang showed the newcomer trust. From 1934 to 1940 Stennes served as Chiang’s bodyguard and joined the cadre of his advisers. In 1939, Stennes was approached and recruited by the NKVD residency in Chungking; his Russian codename was ‘Drug’ (Friend). As a close associate of Chiang, Stennes had access to information at the disposal of the generalissimo on Japanese military plans. According to Colonel Pronin (who wrote an article on Stennes), Stennes told his Soviet handlers that Chiang exchanged intelligence with British, French and US intelligence in China. In 1940, Stennes went to Shanghai and stayed at the hotel Park, a known residence of Nazi party members – all assumed that he was supporting his fatherland. He had contact with Richard Sorge, when he reached Shanghai in May 1941. Already in early 1941 Stennes warned Moscow about Germany’s intentions against the Soviet Union to invade in May (the initial planning of Hitler before the battle of Crete). Vasili Zarubin, the NKVD resident in Chungking, cabled the Kremlin on 20 June: ‘The “Friend” repeats and confirms categorically – based on absolutely reliable information – that Hitler has completed preparations for war against the USSR’. Stennes survived the civil war, and in 1949 he returned to Germany, where he died in 1989.6 Stennes had been noted by the OSS in China, and, in March 1946, the US Army Counter-Intelligence Corps in Germany informed the Strategic Services Unit (the ancestor of the Office of Strategic

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Services, OSS) that Stennes’s mother-in-law, Margarete Borkenhagen, had committed suicide after being raped by Russian soldiers. It was suggested that, ‘judiciously [used] this intelligence (of [the] rape and death) may assist you in contacts with and potential use of Stennes, Walter, to the extent made feasible by local conditions.’ This suggests that there was an interest in approaching Stennes.7 In Chungking in 1938, the Juntong was established; it was led by Dai Li, who had created a doctrine combining the ethos of brotherhood, nationalism, anti-communism as well as that of a modern intelligence service. He had ordered the execution of agents who disobeyed the code of conduct and behaviour.8 Despite the vast network of informers, Dai Li did not know that Stennes was working for the NKVD. Nonetheless, he had agreed with the NKVD for his cadre to receive espionage and special operations training to operate in Japanese-occupied areas. Later MI6 and the NKVD agreed to coordinate their operations against the Japanese forces; they would keep the KMT as little informed of this as possible.9 Dai Li unleashed an assassination campaign so as to thwart any attempt of the Japanese to form a puppet government with high-caliber collaborators.10 Liu Geqing was recruited by Dai Li in 1935, at the age of 28; unlike the majority of Dai Li’s intelligence officers, he was not a graduate of the Whampoa Military Academy. He had graduated from the prestigious Jinan University of Shanghai. In late 1938, he received an order to kill from Wang Tianmu, the station chief of Juntong in Shanghai. On the eve of 1939, Liu, together with three other agents of Dai Li, entered the house of Chen Lu, the Foreign Minister of the ‘reformed’ government of Chinese collaborators with the Japanese occupation forces. Chen Lu was living in Shanghai’s French Concession, where Japanese troops were not deployed. First, the assassins took out Lu’s guard; then they entered the living room, where they found Lu and his wife along with Luo Wen’gan, the former ambassador in Denmark, and his wife. Chen Lu received three shots point blank. Liu Geqing killed Wen’gan as he tried to escape.11 From August 1937 (on the eve of the battle for Shanghai) to October 1941 the Juntong killed one hundred and fifty Chinese who collaborated with Japanese or showed such an intent. About forty Japanese officers were killed also. Throughout the war Shanghai turned into a place of murder, kidnapping and blackmail – mainly of Japanese and Chinese businessmen or would-be collaborators of the Japanese. Juntong agents

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attacked about forty Japanese officers, earning them the commendation of the press, which described them as ‘knights-errant bringing justice.’ But still many killings had extortion as a motive.12 By the mid-1930s, the Japanese intelligence United Investigation Office covered China as a centralised intelligence organisation based in Shanghai. This service coordinated the operations of the Shanghai Office of the Japanese Army Staff Headquarters, the Japanese Embassy’s Intelligence Department, and the Intelligence Office of the Kempeitai (Military Police) Headquarters. With the outbreak of the SinoJapanese War, the intelligence services multiplied. Three services – the Doihara Agency, the Kempeitai and the Ume Kikan (the Plum Blossom Agency) – developed the collaborationist intelligence services.13 Soon the Japanese recruited gangs as assassins and informers. The Ume Kikan was one of four ‘flower’ agencies established by the Staff Headquarters of the China Expeditionary Army to conduct espionage intelligence work in different parts of China. The ‘orchid’ organisation focused on the Guangxi Clique leaders in South China, the ‘bamboo’ organisation on warlords in North China and the ‘pine’ organisation operated in Northwest China.14 Lieutenant General Kagesa Sadaaki and Lieutenant Colonel Haruke Keiin Kagesa were both experts on China. Kagesa was the adviser of Wang Jingwei’s government in Nanking.15 After the occupation of Shanghai in November 1937, the Japanese sought local allies to control the Chinese part of the city. Some Green Gang leaders and their lieutenants proved willing to help them in secret service assignments in return for money.16 In 1938, the Kempeitai and the Japanese Military Special Service Department for the elimination of anti-Japanese elements established the East Asia Yellow Way Association (EAYWA). In fact, it was established by the Green Gang leader, Chang Yuqing, in February of that year, on orders from the Kempeitai and the Japanese Military Special Service Department.17 The EAYWA had about 1,000 agents working for unions and police officers hunting nationalist officials and agents. The methods included kidnappings, assassinations and bombings. EAYWA assassins cut off victims’ heads and hands, dropping them in the streets of the International Settlement and the French Concession.18 The EAYWA made at least one bid into KMT-held area in March or April 1938. A group of thirty assassins headed for Hankou. The Japanese army put pressure on the International Settlement in Shanghai by

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unleashing the terror of the EAYWA in an effort to turn the Municipal Council (SMC) against the KMT secret agents. Within this plan the Superintendent of the Shanghai Municipal Police, Lu Liankui, was murdered on 18 August. Lu was also an influential leader of the Green Gang, working with Dai Li’s men against the Japanese. His murder damaged the image of the International Settlement authorities; the publically heard message was clear: no one was safe from the Japanese.19 Late that year, the Kempeitai and the Special Service Department turned the EAYWA into the ‘Chinese Anqing League’. Li Shiqun and Ding Mocun were the key master-spies who helped the Wang regime and the Japanese in Shanghai. Li Shiqun was born in 1905, and after graduating from Shanghai University he studied in Moscow at the University of the Toilers of the East. In late 1926 or early 1927 he joined the CCP and later the Green Gang. In 1932 he was arrested by KMT security services and eventually offered to defect, working as a secret agent in Shanghai. He was allowed to join the powerful CC Clique in its Central Bureau of Statistics. Soon he met Ding Mocun, the editor of a CC Clique magazine called Social News. In 1933, Li was implicated in the murder of Ma Shaowu, the head of the Shanghai Work Area of the Central Organisation Department’s Party Affairs and Statistics Section. Li was imprisoned for eighteen months; he was released only after his wife persuaded Xu Enzeng, the director of the Second Bureau of the Combined Reporting on Investigation and Statistics, of his innocence. In Nanking in 1937, Li made contact and eventually had an affair with a spy working for Doihara Kenji. Once it was disclosed to the CC Clique, Li decided to defect. The following autumn, Li led the Security Service Office of the KMT’s Zhu-Ping Railway Special Party Branch. He flew to Hong Kong with the funds of his office and presented himself to the Japanese Consul General, Nakamura Toyoichi.20 Ding Mocun was born in 1903; he joined the CCP, working for Wuhan Branch, until his defection to the KMT.21 He was also sponsored by the CC Clique, and in 1932 Ding took up the position of secretary of the newly established Military Affairs Committee’s Bureau of Investigation. In May 1935, he was appointed bureau chief under Chen Lifu – the other bureaus were under Dai Li and Xu Enzeng. The new alliance with the CCP made Chiang officially dissolve the SSD in April 1938. One department was renamed the ‘Nationalist Party’s

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Central Bureau of Investigation and Statistics’ (Zhongtong) and put under Xu Enzeng, the nephew of Chen Guofu (of the CC Clique); another department was named ‘Bureau of Investigation and Statistics for the Military Affairs Commission’ – of the party, Juntong or MSB. The Juntong’s head was Dai Li, ‘the Himmler of Asia’.22 Xu Enzeng, a graduate of the Communications University of Shaghai who had studied electrical engineering in the United States, led a vast network of intelligence organisations to rival Dai Li’s empire – namely central, provincial and district offices of the Bureau of Investigation and Statistics of the Party Central Office, which had agents in the Bureau of Statistics and Investigation of the Ministry of Communications, the Gabelle Unit of the Ministry of Finance, the Institute for the Training of Judicial Personnel, the Institute for the Training of District Magistrates of the Ministry of the Interior, the Diplomatic Club of the Ministry of Foreign Affairs, the Ministry of Education and the Overseas Chinese Office. Xu dismissed the agents of Dai as ‘semiliterate ruffians’ who were ready for torture and murder.23 Other intelligence services of the KMT regime were the Military Intelligence Branch of the General Staff, led by Admiral Yang Xuancheng; the Institute of International Studies, led by Wang Pengsheng; and the Inspection and Decoding Office of Secret Telegrams, led by Wen Yuqing. In the KMT regime, Chiang’s in-laws; his wife, Soong Mayling; Soong’s brother and Chiang’s foreign minister, T.V. Soong; Soong Ailin, Soong’s brother-in-law; and foreign minister H.H. Kung had their own intelligence-gathering networks. Yan Baohang was suspected by Dai Li of being a communist, but he was protected by Madame Chiang Kai-shek.24 Ding was also under suspicion for the murder of Ma Shaowu, but he did not face investigation and trial. After the outbreak of the war and the sacking of Nanking, the Combined Reporting was separated to the Zhongtong under Xu Enzeng and the Juntong under Dai Li. Ding had no office to lead. Dai Li attacked him by suggesting that he had an affair with Zhang Guotao, a defector of the CCP. Soon, Ding had no other option but to reach for Li Shiqun, who was in Shanghai. Meanwhile, General Kenji Doihara was looking to create a Chinese secret service to support the regime of the collaborators led by Wang Jingwei. He met both of the KMT master-spies in February 1939. During the meeting Ding dominated the discussion, presenting the weaknesses of the Juntong and the Kempeitai. In his turn, Li offered his

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son as a hostage in order to demonstrate his loyalty to Japan. The offer was turned down.25 The new service, based at 76 Jessfield Road, Shanghai (and thus known as ‘the No. 76’) was established in February 1939. At first the new secret service organised by Ding and Li did not have an official name – its cover name, however, was ‘The China Steamship Company’. By June 1939 the master-spies spoke of the ‘All One Colour Defence Corps’ followed by the ‘Shanghai Western District Self-Defence Corps’. By the end of the month, all agreed that the name of the secret service was the ‘Special Service Corps of the Chinese Guomindang Anti-Comintern and National Salvation Army’. In short, they used the name ‘No. 76’.26 With Li Shiqun as his deputy, Ding Mocun led the Security Service General Headquarters (SSGHQ) of the collaborators’ government. Ding also worked closely with Zhou Fohai, who was the liaison with Wang’s ‘peace movement’.27 The ‘No. 76’ gained some high-profile defections: Li Zhijiang, a Juntong agent (his cover was a police detective with the Shanghai Western District Police Bureau); Wang Tianmu, the Juntong’s Shanghai Station chief; and He Xingjian, the Commander-in-Chief of the Loyal and Patriotic National Salvation Army, a guerrilla force organised by the Juntong. Before long, Wang Tianmu and Li Zhijiang were appointed members of the Wang Jingwei Guomindang CEC’s Security Services Committee; Wang Tianmy also attended the Committee for the Elimination of Counter-Revolutionaries. Wang Tianmu informed Li Shiqun of a Juntong plot to assassinate Wang Jingwei; Liang Hongzhi, of the ‘Reformed Government’; and Wang Kemin, of the Beijing ‘Provisional Government’ during their conference on 24–25 January 1940. Before being assigned the Shanghai Juntong position from which he defected, Wang Tianmu was the Juntong North China station chief, based in Peking; he knew that Fu Shenglan, the head of the Juntong’s Qingdao section, would organise the assassination. A few weeks before the commencement of the collaborators’ conference, Li Shiqun’s agents raided Fu’s safehouse and arrested him and all his section personnel. Eventually, he convinced Fu that it was better to defect. Luo Junqiang, a leading member of collaborators’ government, reported that Li Shiqun shouted: ‘With one hand wipeout the Blueshirts (of Dai Li), with the other, overthrow the CC Clique.’ In September 1939, four key master-spies defected to the Wang Jingwei regime: Su Chengde and Ma Xiaotian from the

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Zhongtong, and Wan Lilang and Luo Meng Xi’ang from the Juntong. Su Chengde offered his new bosses a ‘gift’: the personnel and organisational files of Zhongtong’s office in the Jiangsu and Shanghai operations area. Su and Ma Xiaotian helped arrange for all secret agents of these offices to be apprehended while Wan Lilang helped in the arrest of more than thirty Juntong agents. In total, more than seventy intelligence officers and spies were arrested, crippling the KMT secret intelligence capabilities. Evidently, the SSGHQ was prevailing over the Juntong and Zhongtong.28 On 20 February 1941, nationalist agents surprised the Japanese and their collaborators by attacking the Central Reserve Bank building on the Bund. At 10:30 am, six men in Chinese long gowns entered the bank. One climbed the stairs to the manager’s office on the second floor but was panicked by an accountant. The agents withdrew pistols and fired indiscriminately; they also tossed four homemade bombs, two of which exploded. A bank guard was killed in his attempt to stop them. Eventually the agents escaped.29 Li Shiqun ordered more attacks against innocents, in retaliation for the assassination campaign of Zhongtong and Juntong against bankers financing the Wang regime. On the night of 21 March 1941, three bank buildings were bombed and set on fire. A group of six agents entered the dormitory of the Jiangsu Farmers Bank and shot employees while they slept; five were killed and six severely wounded. The next morning, secret police and Kempetai officers raided the residence compound of the Bank of China and arrested one hundred and twenty-eight bank employees, who were transferred to No. 76 Jessfield Road. On 24 March, Li Shiqun dispatched his agents, who placed bombs into two buildings in Shanghai. At great personal risk, Sub-Inspector F.A.Ewins of the SMP neutralised a bomb at the Farmers Bank of China. Born in 1904 in England, Ewins had joined the SMP in 1928, where he served until 1943. He served as ballistics inspector in Hong Kong Police in the 1950s. Nonetheless, a bomb was detonated at the Burkill Road branch of the Central Bank of China; one person was killed and thirty-eight injured. Another bomb exploded the Canidrome branch of the Central Bank of China; seven were killed and twenty-one wounded.30 The British consul in Japanese-occupied Nanking reported on attacks of nationalist secret agents against Japanese, collaborators – and the public in general. On 2 and 3 April 1941, agents tossed two bombs in

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packed theatres in Nanking killing one and wounding twenty. No official was injured. Extensive investigations followed, eight Chinese were arrested in connection with the bombings. The Japanese gendarmerie headquarters announced that secret documents of the nationalist government were discovered. ‘So far as I am aware’ wrote the consul G.V. Kitson, ‘these are the first definitive acts of terrorism perpetuated in Nanking itself since the Japanese occupation.’31 Li Shiqun recruited more local gangsters for kidnappings and assassinations, among them Wu Sibao, who was described as ‘a fat, darkcomplexioned ex-chauffeur with a penchant for dark spectacles, [who] had joined the Green Gang in 1930 as a follower of the gambling boss Gao Xinbao, a disciple of the leading Shanghai boss Du Yuesheng’. Wu proved himself resourceful in turning members of the Juntong assassination teams – such as the ‘Chinese Youth Anti-Japanese and Traitors-Extermination Iron and Blood Army’ – to work for No. 76. Wu, by saving arrested gunmen from execution, gradually built a vast network of personal contacts and loyalists.32 In his turn, Dai Li wanted to fight back; his target was Wang Tianmu. Shiqun organised his kidnapping in broad daylight. Wang was interrogated by No. 76 for three weeks, but he was not maltreated. Then he was released. Assuming that he had betrayed them, his Juntong cadre shot at him – but Wang was saved. From then on he was angry at the KMT for organising his murder, and suspected Dai Li himself. Wang was informed of an order to kill him, cabled from Chungking by Chen Minghu, a Juntong agent.33 Dai Li ordered that Chen Minghu be killed; three Juntong assassins opened fire against him during a Christmas Eve reception at a club in Shanghai. He died at the scene. Wanh Tianmu was also in the club and assumed that he was also a target. He was arrested and taken to the No. 76; after interrogation, he officially started working under Li Shiqun. Two years later, in 1942, he was sent to Peking to lead the North China branch of the secret service of the collaborators’ government under Wang Jingwei.34 A war of assassination was taking place between the Juntong of Dai Li and Li Shiqun, who was trying to induce more Juntong agents to defect to his own service. In the autumn of 1939, Li Shiqun arranged for the secret station of Juntong in Shanghai to be blown up. Agents, officials, notables (collaborators or nationalists) and newspaper editors were targeted. More defectors of Juntong gave the Japanese lists of

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sources names. The Kempeitai raided many secret bureaus of Juntong.35 On 12 August 1939, the Juntong chief of station of Anquing was arrested and tortured. The secret head premises of Juntong in Nanking were also raided. The deputy head of Juntong in Nanking, Tan Wen-zhi, was arrested, but he offered to collaborate. More arrests and executions of agents in Peking and Tianjin were taking place. Juntong was in a very difficult position. Zhao Gangyi, the head of the Juntong ‘action unit’ in Qingdao, defected; this led the Japanese to carry out more arrests and raids in November 1939. On 24 November, the secret regional office and radio stations in Peking were raided by the Kempeitai. Almost a year later, on 8 September 1940, Zhou Guangshi, the deputy regional head of Juntong, was arrested and eventually executed. Li Shinqun managed to arrest Liu Geqing, Chen Lu’s assassin. It was claimed that he was not maltreated, but according to Dai Li’s later accounts Liu did not cooperate with his captors. Eventually Liu, who was locked in a Nanking prison, was ‘allowed’ to escape; he reached Chunking in 1940 and met with Dai Li, who propagated the virtues of ‘the anonymous hero’.36 In another episode of the secret war, in 1938, Dai Li received information from Zhang Guotao on the CCP’s strategic aim to confront the KMT and thus not to devote troops and resources to the war against Japan. Zhang Guotao was a former high-ranking member of the party, who was purged in 1937; a year later he defected to the nationalists.37 In early 1940, Chiang himself remarked that the threat of the CCP was greater than that of the collaborators.38 In Shanghai, the French Concession and other urban centres, the SSD employed its agents as communist sympathisers – agent provocateurs. Nonetheless, on many occasions SSD teams planned to kidnap communists who, in reality, were other SSD teams merely posing as communists.39 On another occasion, an SSD group kept a progressive named Ma under surveillance. Some agents posed as progressives to lure him, assuming he was a high-rank communist agent; gradually Ma started giving them credible intelligence on the CCP’s underground network in Shanghai. He said that he was a senior leader in the Huadong (east China) branch of the party. Dai Li was happy with this intelligence and duly – to take credit – passed it on to Chiang. Thus, all decided to arrest Ma and interrogate him. Once arrested, he told his captors that he was working for another group of the SSD in Shanghai, and this was

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confirmed. The other group wrongly assumed that they were penetrating CCP sympathisers while, in fact, they were nationalist agents. When Dai Li was informed of this, he called his SSD officers in Shanghai ‘fatheads’. To save losing face in front of Chiang, Dai Li executed Ma as a communist.40 Dai Li had recruited a CCP defector, Wang Xinheng, to lead the SSD Shanghai regional office – other former communists who had become senior intelligence officers were Liang Ganqiao, Xie Liging, Ye Daoxin, Lu Haifang and Cheng Yiming. They had a thorough understanding of CCP sources and methods. Nonetheless, Dai Li’s spies were no match for the CCP intelligence apparatus.41 Chen Geng, the communist spymaster directed moles and informers capable of abandoning their safehouses on time before the raids, covering their tracks and keeping under surveillance the offices of their hunters and the police. In January 1931, Chen organised the secret gathering of CCP members for the fourth plenum. He set up a phoney hospital – where the ‘patients’ were ‘wounded’ so that their faces were covered. This took place right under the noses of Dai Li’s spies.42 The No. 76 received money from protection fees on gambling dens and opium trafficking. The Japanese were content; in any case, in June 1939 the Japanese Military Special Service Department established an opium monopoly under the cover of the ‘Central China Hongji Benevolent Society’ – this society controlled the import and distribution of opium. According to SMP Special Branch intelligence, the No. 76 maintained an opium distribution centre.43 The SSGHQ gunmen attacked SMP constables and increased the pressure on the French Concession and the International Settlement authorities.44

CHAPTER 7 LEARNING THE ROPES OF ESPIONAGE

Shanghai was full of freelance amateur spies – it was the ‘bourse of confusion’. Men, women and children of all walks of life engaged in information gathering for money.1 In 1927 – 9, Lieutenant Evan Fordyce Carlson was serving with the US marines detachment in the Shanghai International Settlement. A certain Mr Dick, an enigmatic Russian-looking man, red-faced and bald, appeared at Lieutenant Carlson’s office, introducing himself as a former intelligence officer of Borodin. Later, Carlson recounted his dialogue with Mr Dick: ‘Lieutenant Carlson, I understand that you do not pay for information.’ ‘That’s right,’ Carlson answered. ‘And why not, Sir?’ ‘It’s simple. Information is like every other commodity. If there’s a demand for it backed with purchasing power, it will be manufactured.’ Carlson sounded confident. ‘But without money, Sir, no one will give you anything,’ was Mr Dick’s reply. ‘None of the manufactured kind, that’s true.’ ‘And the other kind, Sir?’ ‘It will be given to me gratis because no one else will have any use for it.’ ‘I think I understand you,’ said Mr Dick.

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Some weeks later Mr Dick reappeared, offering gratis ‘to prove his competence’. Carlson accepted the gift, but was soon contacted by French police and British CID of the Shanghai Municipal Police. They warned him that a certain Mr Dick, who may have approached him, worked for the British (according to the French) and the Japanese (according to the British). Almost three years later, when Carlson returned to China as an intelligence officer with the 4th Regiment at Shanghai, a Chinese phoned him, asking him urgently to go to an apartment outside the international settlement. There, something of great importance would be given him, the caller assured. At the apartment, Carlson found the mysterious Mr Dick. ‘Do you still retain your prejudice against paying for information?’ he asked. ‘I do,’ said Carlson. Mr Dick asked Carlson to escort him to the International Settlement because two Japanese at the street corner wanted to kill him. He had spied for the Japanese but had broken off. Mr Dick smiled and told Carlson: ‘I had to get help and you are the only man in Shanghai I can trust. Anyone who won’t pay for espionage is either a fool or an honest man. I know you’re no fool.’ Mr Dick gave Carlson naval intelligence reports, but he did not disclose whom he was working for. Carlson accompanied him to the International Settlement. There was no attempt against Mr Dick’s life. Carlson never met him again.2 Shanghai was the city were US Navy officers tasted what espionage was like. The US Office of Naval Intelligence (ONI) was growing more anxious of the Japanese naval threat in the Far East. Roosevelt, a pro-Navy president, assigned Captain William D. Puleston to organise espionage in China. Puleston had graduated from the Naval Academy in 1902. He was described as ‘popular, articulate, and aggressive’. He became the Director of Naval Intelligence (DNI), and proved keen to organise secret intelligence operations. The Navy was anxious after the revelation of the Thompson case. Puleston had taken a personal interest in the case of Harry Thomas Thompson, a former United States Navy yeoman who spied for Japan against his country in 1934– 5. His case officer was Imperial Japanese Navy Lieutenant Commander Toshio Miyazaki (a prote´ge´ of Admiral Isoroku Yamamoto), at that time an English exchange student of Stanford University. Thompson’s motivation was monetary. He boarded warships off California in a yeoman’s uniform, talking with the crews. Once, he posed an active duty officer. Thompson

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sold Miyazaki information about the guns, engines and tactics of the US Navy. Puleston was helped with intercepted Japanese radio messages; once decoded they revealed the existence of a spy. Thompson had asked his roommate to help him spy, but he informed the ONI. Soon, Thompson was put under surveillance, and eventually he was arrested by the FBI in March 1936. Miyazaki fled to Japan. Thompson was sentenced to fifteen years.3 Roosevelt sought to establish spy networks in China in order to check Japanese intentions. Beyond naval traffic reporting, the Navy assigned to the Marines the murky business of espionage. The USMC was established to train disciplined warriors and riflemen; it did not train spies. In the mid 1930s, two marines officers, untrained in espionage, undertook spy missions in civil-war China – at great personal risk. In 1935, Major William A. Worton, of the USMC, was assigned to the ONI’s Far East Section. He had served in China in 1922– 6, 1927–9 and 1931– 5, and was commended for his intelligence reports. Born in 1897, he had studied at Harvard and Boston University Law School; he joined the Marine Corps Reserve in March 1917 and was sent to France, where he saw action in the battle of the Belleau Wood. Puleston asked Worton to spy for him in Shanghai, to create a network watching Japanese naval movements in the region. Worton recalled that Captain Puleston ‘looked straight at me and . . . said, “I think you should go . . . [to Shanghai] and establish [the network].”’ Already, the ONI operated a coast-watching system along China’s coast and a spy ring which included a Harvard exchange professor at the Imperial University in Tokyo. Puleston did not want any cooperation or sharing of information with the British in Hong Kong. He asked a US Marines officer to create the first spy ring in China while Worton had no relevant training or experience. Worton was not enthusiastic about his assignment; he spoke with USMC Commandant Major General John H. Russell, who reminded him of Major Earl H. Ellis. Ellis had fought in France, and in July 1921 he had drafted the Operations Plan 712: Advanced Base Operations in Micronesia, which became the basis for the US’s amphibious assaults against Japan in World War II. This plan is considered prophetic, and it established Ellis as one of the foremost modern naval theorists and strategists of amphibious warfare. In his plan, Ellis predicted that the Japanese would start the war and deploy

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their forces close to their territorial waters. Only the Navy was assigned intelligence gathering – not the Marine Corps. Nonetheless, Ellis persuaded his superiors that intelligence gathering on Japanese defences was a priority. In May 1921, Ellis took extended leave in order to go to the Japanese-held Marshall and Caroline Islands to gather information about possible amphibious assaults in the Pacific. Posing as a businessman, Ellis carried a confidential code book in his papers. He was found dead two years later, in May 1923, in the Palau Island group. At that time it was concluded that the Japanese were likely responsible for his demise; but Ellis had an alcohol problem that had seriously damaged his health and may have been the cause his death.4 In 1949, General Douglas MacArthur ordered a search of Japanese military archives about the death of Ellis, but nothing was found. Worton eventually took on the assignment. Once in Shanghai, he would report directly to Commander Ellis M. Zacharias. Colonel John C. Beaumont, the commander of the 4th Marines in Shanghai, and Commander Thomas M. Shock, the naval attache´ of the US legation in Beijing, would be the only people who would know his real identity. But Worton was frustrated with the ‘confusing’ lack of clear orders. General Russell did not boost his morale by telling him: ‘If you make a mistake, we’ll have to disown you, we will not admit to having . . . a person doing such a thing [i.e. spying].’ Worton would pose as a disgruntled officer who left the military to set up his own business in the International Settlement in Shanghai. He brought along his wife, Nellie, who was rather surprised about the new assignment; the couple sailed in late summer 1935, Worton carrying three passports – those of an attache´ of the legation in Beijing and of a government employee on official business (both in his real name) and a third in the name of Archibald Robertson, the ‘businessman’. In Shanghai, Worton rented two rooms in the American Club and the Metropole Hotel. Worton had known Dai Li since the late 1920s, when he met him as an aide de camp of Chiang Kai-shek. The American reached Nanking and asked Dai Li to help him set up a spy network against Japan; Worton assumed that his agents, or the majority of them, would report to Dai Li anyway. He tried to recruit people in Shanghai, gathering all the relevant personal information about them. He had come with thirty individuals, Chinese and Westerners, who could be his informers on Japanese naval movements. Worton recruited an Austrian

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artist, Fritz Schief, whom Dai Li had introduced him to. It soon became clear that the informer was interested in money. Worton sent him to establish an art school in Sasebo, but he returned after a month because heavy Japanese surveillance meant he could not do anything related to spying. Worton recruited a Chinese agent, Chen Zhendian, to go to Sasebo and Nagasaki. Chen was optimistic that he could gather useful intelligence. Worton also recruited an Austrian called Franzi von Sternburg (another agent motivated by money), sending him to Japan. While he was living in the International Settlement, Worton worried that a fellow American or Westerner might accidentally blow his cover. Indeed, at a banquet in Shanghai, one Marine Corps officer’s wife asked Nellie what she and her husband were doing in the city – she did not believe that Worton wanted to start his own business. Antagonism among marine officers could jeopardise Worton’s mission in a city where all were spying against all. Worton remarked years later: ‘Jealousies at that time were . . . pretty common in our Corps, and, if an officer went on a special assignment, well, [there] probably was a little jealousy in the fact that I had been picked for the assignment. I don’t know. But I always felt that in Shanghai my brother officers . . . looked askance and wondered . . . what in the world I was doing out there, and why I was there.’ In February 1936, Worton was informed that he would be replaced by Captain Charles C. Brown, another US Marine officer. Three months later, Worton and his wife left Shanghai. Years later Worton remarked of his brief espionage assignment: ‘We learned what not to do [i.e. in espionage] . . . [T]his type of duty is not glorious. It is a lonesome, frustrating, and hazardous occupation . . . I spent frustrating hours alone, thinking, thinking, thinking, and wondering.’5 Brigadier General Worton served with the III Amphibious Corps (IIIAC) during the Battle of Okinawa. After the war, IIIAC was designated to occupy Northern China and to accept the Japanese surrender in Shanghai. In 1949, the retired Worton was pressed by the mayor of Los Angeles, Fletcher Bowron, to serve as emergency chief of the Los Angeles Police Department.6 As the Sino-Japanese war escalated, a veteran US marines officer entered China for the third time. He would be the only US officer to witnessing the Chinese communists battle performance until 1944, when the Dixie mission arrived in Yenan. Evans Fordyce Carlson had

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always been a soldier. In 1912 he joined in the army and served in the Philippines and Hawaii, before being discharged in 1916. The next year he re-enlisted and took part in the Mexican expedition. He was commissioned second lieutenant in May 1917, and eventually served in Germany with the Army of Occupation, from which he was discharged in 1921. A year later he enlisted in the USMC, and in 1923 he was commissioned second lieutenant. From 1927 to 1929 he served in Shanghai. In 1933, as a marine officer guarding the White House, he met President Roosevelt and his son James. He returned to China, first with the 4th Marines Regiment in Shanghai, and then the Marine Detachment of the US legation in Peiping, and studied Chinese; he returned in 1936. The next year, Carlson returned to China as a military observer during the Sino-Japanese war. He met Edgar Snow, author of Red Star Over China – a book Carlson read. Soon, the US officer found himself the only American visiting Chinese communist troops. He met and discussed with Agnes Smedley. Carlson met with Mao, Chou Enlai and Deng Xiaoping (the future influential premier of the PRC). Carlson closely studied the Chinese Communist’s guerrilla tactics. Having witnessed a battle, Carlson wrote: ‘The Chinese are magnificent in their fortitude. They have great sources of spiritual strength. I noticed one thing about the Chinese in the course of that incident I never remarked before. The wounded make no outcry. There was no moaning such as Westerners would have made. A little girl about twelve had her knee split wide open in a frightful wound. She made no sound as a temporary dressing was put on and as she was moved to the ambulance. You can’t down a people who are so indifferent to pain and death.’7 A discussion with Chou Enlai became an awkward moment for Carlson: ‘I was in Shanghai in April 1927’, Carlson told him, only to be surprised by Chou’s response: ‘The time you were there [ . . . ] Of course, we didn’t have much to do with the American Marines. We used to see them marching down the streets trying to frighten us.’8 Carlson was told by the communist military leaders that ‘superior information, mobility and a determination to prevail’ were the key factors for success on the battlefield against the stronger Japanese forces. Observing the planning and operations of the communist guerrillas, Carlson wrote: ‘I regarded this group with admiration. Here were men who were not waiting for others to solve their problems for them. They were taking the tools at hand and using their energy and intelligence to

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fashion these tools for the accomplishment of the task which lay before them. Men with such determination, such magnificent spirit, could not be crushed.’9 Carlson wrote of his meeting with Mao, in Yenan, in 1938: ‘One evening Comrade Wang took me to see Mao Tse-tung, the famous leader of the Chinese Communists. Mao slept in the day time and worked at night. A single candle lighted the room in which he worked, and when I entered I came face to face with a tall man . . . “Welcome,” he said in a soft, low-pitched voice. ‘We talked late into the night, and our conversation covered the war, the political situation in Europe and America, the development of political thought down through the ages, the influence of religion on society and the ingredients of a successful world organisation. He was an idealist, but there was a sound practical side to him as well’. Mao told Carlson: ‘Communism is not an immediate goal, for it can be attained only after decades of development. It must be preceded by a strong democracy, followed by a conditioning period of socialism’. ‘Japan hasn’t sufficient troops to occupy all of China, and so long as the people are determined to continue resistance she cannot control by political means.’ Mao spoke of the war crimes of the Japanese forces and concluded that the Japanese strategy was reactive; ‘A drive is made here, and another there.’ Carlson heard the prophecy of Mao: ‘Britain will not fight for Czechoslovakia. If Germany should thrust to the southwest Britain would fight, but she is not ready to fight for Czechoslovakia’. Chamberlain’s October 1938 agreement vindicated Mao’s prediction.10 When asked by the American ambassador in Chungking, Nelson T. Johnson, about Mao and communism, Carlson sounded confident: ‘In my opinion, Mr Ambassador,’ Carlson replied, ‘their political doctrines are representative democracy, their economic doctrines are the cooperative theory, and only in their social application are they Communists, for they place a great deal of emphasis on social equality. They are not like the Russian Reds for one simple reason. China is not Russia. Each country, they tell me, must move toward socialism in its own way, at its own tempo, and with its own peculiarities. Russia, for example, had a revolution and then ten years afterwards had to reinstall private enterprise for a while. The Chinese Reds are not against private enterprise from the very beginning. They say that’s the way it has to be in China. They’re realistic men. They’re not trying to superimpose

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something unworkable. They want a democracy in China, free speech, free press and the rest. As an American, that’s what I want to keep alive at home. I can’t help but sympathize with any Chinese who wants it in China.’11 Carlson left China in 1938. The next year, he resigned from the military and lectured about China; but in 1941 he once again joined the Marines, where he was re-commissioned a major – soon he became famous, organising his own special forces unit. In November –December 1942, he led his raiders in the Makin Raid in Guadalcanal. He participated in the battle of Tarawa in November 1943, and during the battle of Saipan, in 1944, he was injured badly while attempting to rescue a wounded soldier. In July 1946 Carlson left the military, being promoted to brigadier general on the retired list. He died in May 1947 aged 51 of cardiac ailment.

CHAPTER 8 `

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‘In the event of my death, or of anything happening to me which will prevent my continuing in my present appointment, I wish to place on record that, in my considered opinion, the most suitable individual, in every respect, to take my place, is Colonel Stewart Menzies, DSO, MC, Yours ever, C’. At 4:30 pm on 4 November 1939, Sinclair died. The next day, Menzies handed Sir Alexander Cadogan, the Permanent Undersecretary at the Foreign Office, the sealed envelope. Before he died, Sinclair had seen to it that copies of the letter would reach Sir Horace Wilson, the Permanent Undersecretary of Treasury, and Sir Edmund Ironside, the chief of the Imperial General Staff.1 Since 1937, Admiral Sir Hugh Francis Paget Sinclair, the ‘C’, had been on the defensive. He had led the SIS during the interwar against the Comintern and the rising Nazi threat, and now he was criticised by those on his own side, the Admiralty, which demanded more information on Japan’s threat to British strategic interests in the Far East. Born in 1873, he had joined the Royal Navy at the age of thirteen. At the start of World War I, he entered the Naval Intelligence Division, becoming its head in February 1919; four years later, he succeeded fellow naval officer Mansfield Cumming as head of the SIS. British intelligence could not cope with the intelligence requirements for the coverage of the Sino-Japanese war. British officers made a vain bid to act as observers, to get a glimpse of operations. In August 1937, Colonel Valentine Burkhard, the head of the Far East Combined Bureau (FECB) military section, observed the Japanese landing at Tangku in the Gulf of Peking. The FECB was an outstation of the

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British Government Code and Cipher School (GC&CS); based in Hong Kong in March 1935, it was established to intercept Japanese, Chinese and Russian radio communications. In the summer of 1939, Lieutenant Colonel C.R. Spear, the military attache´ of the British embassy, ventured into North China to see for himself the communist resistance to the Japanese. The Imperial Japanese Army did not grant him a pass; undeterred, he crossed the Japanese lines seventy miles south-west of Peking, and was arrested and imprisoned for four months.2 Throughout the interwar the SIS (MI6) had meagre secret sources in Asia. In Hong Kong, the Special Branch operated together with the MI5, running intelligence networks focused on communists and nationalist agitators – not on the Japanese military. With the coming of war, the agents could not reach the warzones. The Yangtze River routes were blocked. Missionaries and traders brought to the service dated information.3 In spring 1938 Wing Commander Wigglesworth, the deputy head of intelligence of the Air Ministry, reached China; he reviewed the establishment of British intelligence and produced a very negative report for the SIS. The service had only two serving officers – one in Shanghai and one in Hong Kong. Answering Admiralty’s criticism in April 1938, Sir Hugh Sinclair stated that twenty-nine out of seventy-two agents in the Far East were collecting intelligence on Japan; but the dissatisfaction continued. Wigglesworth complained that in Shanghai the British spy was a local celebrity. He wrote: ‘Both at Hong Kong and at Shanghai I was asked by many if I knew “Steptoe”: No, who was he? Oh, he’s the head of the secret service organisation at Shanghai – he’s the arch-spy – everyone in China knows who and what “Steptoe” is!’4 Officially, Harry Steptoe was the British vice-consul, but he liked drawing attention to himself with his non-regulation uniforms. He employed Chinese docklabourers to provide him with intelligence from the port.5 Kim Philby, the KGB mole, wrote in his memoirs: ‘The near-mental case was Steptoe of Shanghai, who had covered the whole Far East for SIS between the wars. How it happened was still a mystery to me: I found it difficult to believe that he could hold any job for a week.’6 Since 1939, Frank Liot Hill, of the SIS, handled the Peking station focusing on military intelligence for North China. Steptoe was still working in Shanghai. Alex Summers, a one-man station based in Hong Kong covered North Indochina and Taiwan. Another station in Hong

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Kong, under Lieutenant Commander Charles Drage, was covering military intelligence on the Japanese. In the summer of 1940, Drage moved his station to Singapore. In 1940, the SIS initiated its operation, with two stations: one in Chungking and one in Manila, the Philippines. Walter Gordon Harmon was the head of the station, working under the cover of the press attache´ of the British embassy in Chungking. He encountered considerable difficulty in establishing a working liaison with the Juntong and Zhongtong. Harmon was considered an ‘old China hand’, having been born in the country and having worked there before joining the SIS.7 Secrecy was no asset for the SIS. One SIS officer who was serving in the British embassy in Tokyo, in 1940, remarked that the Japanese intelligence services had a good picture of SIS work in China. Steptoe and Hill were ‘known to most European residents in the Far East, for so-called Embassy cover does not mean a great deal unless a man does some definite Embassy job in addition to SIS work’. Drage had trouble with the Jewish communists in Singapore, because they accused his South African assistant of being a Nazi agent. In January 1940 Drage returned to Hong Kong; contact with Japanese informers had produced no meaningful results.8 Sinclair underwent surgery on October 1939, but he died on 4 November – by which time, Britain was already at war with Nazi Germany.9 Eventually, on 28 November, at a meeting between Lord Halifax and Churchill, the foreign secretary strongly supported the candidacy of Menzies.10 The new ‘C’ was an Eton-educated army officer who had fought in France during World War I, where he had been wounded in a gas attack. He was honourably discharged, but he rejoined the army in Field Marshal Douglas Haig’s counterintelligence staff. He entered the SIS after the war, and attended the 1919 Versailles Peace Conference. He was appointed the SIS’s assistant director for special intelligence, and in 1929 he was promoted to deputy chief. For Philby – a close associate of Menzies, whom the ‘C’ supported, never suspecting that he was a spy of the Kremlin – Menzies’s ‘real strength lay in a sensitive perception of the currents of Whitehall politics, in an ability to feel his way through the mazy corridors of power.’ For Hugh Trevor Roper Menzies was ‘personally considerate, patently just, patently honest . . . no one could claim he was a brilliant Chief.’11 Cadogan, who had served as ambassador in China in 1935 – 36, would always antagonise Menzies. As Aldrich put it,

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‘Menzies was a mentally disorganized intriguer who devoted more time to protecting the interests of SIS than to serious intelligencecollection.’ In March 1941, Cadogan consulted with Menzies and the Directors of Intelligence of the Army, RAF and Royal Navy. He did not abstain from writing in his diary: ‘[The] “C” as usual, a bad advocate on his own behalf. He babbles and wanders, and gives the impression he is putting up a smokescreen of words and trying to put his questioners off the track’.12 Like Sinclair, Menzies confronted the criticism for the SIS by Captain Wylie, the chief of the intelligence staff of the Far East Combined Bureau, according to whom SIS information was of no value and its officers antagonised each other. Menzies dispatched Godfrey Denham (who had served in Shanghai back in 1921) to lead a regional directorship of the service. In October 1941, in a paper reviewing the secret sources for the Far East Combined Bureau based in Singapore, Denham disclosed that the military was asking for operational intelligence while the SIS provided political intelligence not useful to assess the Japanese threat.13 The review was more critical of North China’s intelligence gathering: ‘The Northern Area – including Manchukuo’ (i.e. Manchuria) was ‘the least satisfactory of all. There is no doubt that the present Peking representative is incapable of carrying on the service, still less of developing it. In view of the importance of this station in event of a Russo-Japanese war, the appointment of a first class man to Peking is of urgent importance.’ With reference to Chungking, it was assumed – or hoped – that more intelligence ‘could probably’ be produced.14 In June 1941, the commander-in-chief of the British Far East Command, Admiral Sir Robert Brooke-Popham, severely criticised the SIS: ‘[The] Weakest link undoubtedly is S.I.S. organisation in Far East. At present little or no reliance is placed upon S.I.S. information by any authorities here and little valuable information in fact appears to be obtained. I am satisfied that the identity of principal officer at Shanghai, Hong Kong and Singapore is known to many. Their chief subordinates are in general local amateurs with no training in intelligence duties nor adequate knowledge of military, naval, air or political affairs. Agents are chiefly uneducated Chinese and up till now in Thailand and Indo China reliance has been placed entirely upon French sources of information.’15 Action, he wrote, ‘is required at once’, saying that there was a need for an

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overall regional head of SIS organisation in Asia ‘with power to make changes in personnel without delay’.16 The centre of British intelligence for Manchuria was Shanghai. The agents reported to the military attache´’s office. A certain Mr Watson, a merchant based in Harbin, was the key agent. He was half Chinese, ‘average size, oriental eyes, dark skin and a homely and almost brutal face.’ He directed an import-export firm. Watson’s intelligence network included Mr Peacock, a half-Chinese business broker in his mid-fifties, Mr Shaw and his girlfriend, Baroness Barclay de Tolly, a socialite of the elite of Harbin. Neuville of the Lloyds insurance agency in Harbin were also involved in intelligence gathering: his son worked for British intelligence. Once, in a conversation with a secret source, he claimed that he had crossed the border into Russia near Hanka lake and that he was a radio enthusiast. Bingham, formerly an accountant with the Hong Kong – Shanghai Bank, and later a finance controller for T. Tschurin & Co, also worked for British intelligence. According to a secret source, Bighmam was a military attache´ of the British consulate in Harbin. There were many British firms in Harbin which worked for British intelligence: the Hong Kong – Shanghai Bank, the Chartered Bank of India, Australia and China, BrunnerMond & Co, Jardime-Matheasson & Co and T. Tschurin & Co Lt. In December 1941, upon the declaration of war, the Japanese raided Watson’s premises. To avoid arrest and torture, Watson cut his wrists, committing suicide.17 Dai Li, the head of Juntong, wanted to remain in the shadows – to be the elusive spymaster everybody was afraid of, mysterious and unknown to his enemies. Nonetheless, the wife of a Juntong double agent gave a photograph of him to British intelligence. In early spring 1940, Dai Li persuaded Chiang Kai-shek to establish a service for a centralised codebreaking of enemy signals. Soon, an unpredictable clash erupted between two prominent officials, Y.C. Wen and Wei Daming, over who would lead the new service, the Office of Special Technological Research. Y.C. Wen was appointed its head, with Wei as his deputy. Y.C. Wen surprised all in June when he left for Hong Kong, ostensibly for medical tests. Dai Li himself flew to Hong Kong to bring him back. On the tarmac of the airport he saw Y.C. Wen greeting the US naval attache´ in Chungking, Marine Colonel McHugh. Y.C. Wen was about to board a flight to Manila. But Dai Li had something else to worry about:

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the British authorities of the airport had his photo, recognised him and arrested him. The elusive Himmler of Asia was in custody.18 Juntong agents reported to Chiang that the British had arrested Dai Li on behalf of Japan. The generalissimo frantically called all his diplomatic representatives, putting pressure on the Hong Kong police commissioner to free his spymaster. The commissioner, on behalf of the governor of Hong Kong, invited Dai Li to his guest house; but Dai Li refused to leave the prison without the attendance of a high-rank Chinese officer. The next day he was released, and, accompanied by a general, he returned to Chungking.19 The generalissimo had suspected the British of colluding with the Japanese; in January 1940 Chiang himself told British Ambassador Clark Kerr that his military attache´ Colonel Burckhardt was ‘notoriously pro Japanese’. Kerr had to deny this.20 In any case, Kerr had made a strong impression on the Chinese for his determination to continue heading the British embassy in Chungking after it was almost completely destroyed by Japanese bombing in 1940; other diplomat’s delegations had decided to be evacuated. Sir Arthur Blackburn had been injured; he wanted the Union Jack to fly close to a Chinese government building. Walking among the rubble of the destroyed embassy building, he told his officials, ‘the Foreign Office have ordered me to move the Embassy [south of the Yangtze]; they cannot order me to move my body.’21 He once said, after meeting with Ernest Hemingway: ‘Tough? Why, I’m tougher than he is!’ After the war Clark Kerr was appointed ambassador to the United States, a post he held until 1948. Kerr’s judgment wasn’t flawless: Guy Burgess and Donald Maclean – both Soviet spies – had worked under Kerr, who, like the rest of the Foreign Office and MI6, did not suspect anything.22 The Chinese sounded ‘enthusiastic’ to share early-warning intelligence with the British, whose forces in Hong Kong admitted in October 1940 that ‘all efforts to improve local intelligence and SIS sources having failed to produce adequate results’. A British mission to Chunking asked whether Chiang Kai-shek was interested in working together with the British intelligence: ‘General result was that Chinese most enthusiastic for closer cooperation and Generalissimo personally interested.’ They discussed an early-warning network near the Japanese air bases in Canton and Sancho (the Chinese already had a successful early-warning system between Hankow and Chungking). The Anglo–Chinese arrangement required Chinese agents equipped with wireless in Canton and Hainan to

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warn of bombings and Japanese military deployments against Hong Kong, Malaya and Burma.23 A report to the War Office read: ‘It is apparent that Chinese can read Japanese Naval and military air force codes that as their operators use unorthodox system of signals it will be necessary for Chinese operators to man Hong Kong terminals. Accordingly arrangements are being made for us to provide accommodation and DF (Direction Finding) sets in Hong Kong whilst Chinese will provide operators capable of intercepting and decoding Japanese aerial messages. Chinese have not asked nor will they be given any information concerning our “Y” organisation or results.’ Chinese secret agents with portable wireless were deployed to Hainan and Bocca Tigris. The cooperation was to remain secret because Japan was not at war with Britain.24 Dai Li and Xu Enzeng had another strategic failure: at the CCP Southern Bureau, Chou Enlai had Shen Anna hired to the nationalist government. She became a crucial mole, a stenographer attending all important leaders’ meetings from January 1939, giving clear warning to the CCP of Chungking’s intentions and plans.25 After the fall of France in July 1940, Churchill established the Special Operations Executive (SOE), under Hugh Dalton, the Minister of Economic Warfare. The new service would specialise in sabotage and subversion, ‘setting Europe ablaze’. In the Far East, the organisation has to find leaders. A Shanghai businessman with no experience in covert action, Valentine Killery, was named the head of the Oriental Mission, which was established in January 1941. The main objective was to create a network of stay-behind operatives in case of a Japanese invasion. The SIS’s intelligence efforts would be boosted by a Chinese bureau of intelligence, the Resources Investigation Institute (RII), but would nonetheless remain hostage to Dai Li’s and Chiang’s wishes. The Chinese spymaster did not want the SOE, SIS and OSS jointly to operate against the Japanese. The OSS would be restricted with the SACO agreement, as we will explore in following chapters. Donovan and Sir Charles Hambro, the head of SOE, concluded the OSS/SOE agreement in June 1942: ‘it was agreed that this area, of which the headquarters would be at Chungking and which cover the whole of China including Japanese-occupied China, Manchuria and Korea, should be regarded as an American sphere of influence. The American mission would be established at Chungking and would direct all SO [Special Operations] activities in this area. It would be controlled

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from Washington. The existing British Mission at Chungking would be reduced and would be turned into a liaison mission attached to the American Mission. The British liaison mission, in addition to its liaison duties, would render any assistance which it could to the American Mission, but only at the latter’s request and under the latter’s control’.26 Meanwhile, in Shanghai the SOE group was put under the control of the headquarters in Singapore. Formed in mid 1941, the group comprised eight men and was led by Sir William Johnstone ‘Tony’ Keswick. The Keswicks were a taipans family. Tony was born in Yokohama and educated at Winchester School and Trinity College, Cambridge. In the period 1937– 41, Keswick, as chairman of the Shanghai Municipal Council, was assumed to be either an appeaser or a man who would accommodate the Japanese demands as long as his enterprise interests were not affected. Throughout 1939 there was a collaboration between SMP and the Japanese, with the former handing over Chinese at the request of the latter.27 Keswick’s company Jardine, Matheson, & Co and its subsidiaries turned profits, despite the reactions of the Japanese. There were rumours that Jardine’s transports ferried Japanese troops to China. After Japanese pressure, in July 1941 Keswick handed over the land records and title deeds of the Chinese municipality, which were under the authority of the International Settlement, for safekeeping. During the 23 January meeting of the Shanghai Municipal Council, the seventy-year-old chairman of the Japanese ratepayer’s association and retail merchants, Hayashi Yukichi, demanded that, contrary to the council’s ambitions, no increase be made in taxation. After Keswick declared ‘by all the force of my command I ask you to reject this [Japanese] amendment,’ Hayashi walked towards him. Everybody was shocked when the old Japanese took out of his pocket a .32 caliber revolver and fired two shots into Keswick. Council members, among them Japanese, rushed against Hayashi, who was promptly arrested and deported for trial in Japan. Keswick was lightly wounded.28 W.J. Gande, the chief special constable of the SMP, and H.G. Clarke, a one time officer of the SMP and an SIS operative, were also members of the SOE. Only one member of the team received (rather rudimentary) training in explosives. Soon the SOE Shanghai group proposed for the Italian sloop Eritrea, stationed in Shanghai and transmitting intelligence on Royal Navy movements, to be sabotaged. The Foreign Office and

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Steptoe of SIS vetoed the operation. Both wanted to maintain the peace between the Germans, Italians, British and Americans in the International Settlement. The Axis had not proceeded to similar sabotage actions. An SOE report read: ‘[The] Eritrea situation “blew up” apparently because “C”s man in Shanghai rushing around to Le Rougetel [later Sir John, a member of the British Embassy staff attached to the consulate] and suggesting that SOE were going to blow up a ship without consulting anybody. Actually Killery’s instructions were to examine urgently possibility of destroying or damaging Italian sloop.’29 Gande was asked by London if his team could intervene against Carl von Wiegand, an American journalist of anti-British persuasion – there were fears that he was a German secret agent. Wiegand was a war correspondent with a reputation for scoops. He had interviewed Kaiser Wilhelm II during the Great War, and in 1921 interviewed Adolf Hitler, warning that he was a ‘German Mussolini’. In June 1940, after the fall of France, he was allowed to interview Hitler in his headquarters. He moved to Shanghai, but was eventually interned by the Japanese in the Philippines, together with his wife. He survived the war and died in Zurich. Wiegand seemed to have Japanese sources; on 17 October 1941 he told Rear Admiral William Glassford of the US Navy that ‘the war in the Pacific will begin any hour after midnight on December 6th’.30 The group of Gande was known to the Japanese through a spy – a Romanian called Kaman, who worked for Gande for many years as a bookkeeper in his company Gande, Price & Co. Thus the entire group was arrested upon the initiation of the Pacific War. Steptoe strongly believed that Kaman was responsible for the routing of the SOE Shanghai group.31 In the meantime the SOE was preparing for special operations in Hong Kong, training Chinese– Canadians and Chinese– Americans to join forces with the CCP for the defence of Hong Kong (the battle for Hong Kong lasted from 8 until 25 December 1941, ending with the surrender of the colony). Recruiting also concentrated on employing Koreans as surrogates in intelligence and subversion missions against the Japanese.32 Eventually, with the fall of Peking and Shanghai, both Hill and Steptoe were captured along with other officers. They were repatriated in autumn 1942. Alex Summers, the last man to send a radio message from Hong Kong, on 26 December 1941, was imprisoned by the Japanese.

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Denham escaped with his staff from Singapore before the fall in early January 1942.33 In December 1941, the SOE asked Killery to step up his operations in Chungking. At that time Killery was coordinating the transfer of the SOE Far East propaganda section to India. He dispatched Findlay Andrew to the wartime capital and J.A.T. Galvin, a journalist, to Chungking. As he made his way to Chungking via India and Burma, Galvin made contact with General Wang Ping-sheng. The military attache´ in Chungking urged that Andrew and Galvin meet with the general and eventually create a confidential channel. With Chiang’s approval, the general arranged for Andrew and Galvin to become his unofficial ‘advisers’, while officially they were attached to the embassy. They planned for Sino– British cooperation in subversive propaganda. This cooperation let to the establishment of the Resources Investigation Institute (RII), General Wang Ping-sheng’s new propaganda and intelligence organisation.34 Dai Li cooperated with the British before 1941. According to one highranking US officer in the China Theatre headquarters, a British agent called Phyllis Harrop worked for Dai Li in Hong Kong with British consent. On 28 January 1942, she escaped from Hong Kong to Chungking via Macau and worked for the British intelligence attached to Chinese security services, publishing articles about Japanese atrocities. In January 1946, she arrived in Shanghai on a UNRRA mission and had a reference card from General S.K. Yee of Juntong.35 Keswick reached Chungking to lead the SOE Commando Group. Nonetheless, in March 1942, the British military attache´ conveyed Chiang’s order to stop any guerrilla warfare plans and preparations in enemy-occupied China. The generalissimo did not blame Kesswick, and he authorised his cooperation with General Wang Pingsheng and the RII. Andrew was recognised as the SOE representative in Chungking once Keswick left. The SOE did not want to allow SIS into RII: 1. RII is not our organisation to dispose of; 2. Chinese consent would have to be obtained; 3. SIS at Chungking has been deliberately kept out of the picture because W.P.S. [Wang Ping-sheng] is not satisfied with their security;

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4. SIS would not be willing to undertake our other activities connected with RII such as Subversive Propaganda and RII Printing Press (with which we are tied up with MOI [Ministry of Information] and HMA [His Majesty’s Ambassador]) and also our work of promoting rebellion in enemy occupied territories etc.36 Chiang and Wang had created the RII to isolate the SOE and the SIS in unarmed action only. The Chinese did not want allied guerrilla organisations on their land, for fear that they might ally themselves with local warlords or the communists in fighting the Japanese and, in parallel, increase their chances in the civil war against the nationalists. The generalissimo and Wang blamed the SIS for ‘security’ problems to keep it from the SOE. But as we will explore in this chapter, the RII became an asset of the SIS. In parallel, the Chinese prohibited the RII from cooperating with the OSS, which operated under the SACO framework. They had set up isolated ‘Chinese boxes’. Keswick set up a small secret office outside the embassy ‘in connection with the disbandment of the commando personnel’. F.S. Crawford was in charge, helped by his wife, who acted as his secretary and cipher assistant. Crawford was made head representative of the SOE after Keswick left. He was ‘attached to HM Embassy charged with the duty of conducting SOE correspondent and business and liaison’ with the US mission, the NKVD and the Free French and Americans. Crawford’s office was not connected to the RII. The SOE had seconded Andrew, Soderdom, Pollock and Miss Gully to work as advisers and assistants in the RII.37 It was remarked that ‘Andrew’s power with General Wag Ping-sheng is derived from his excellent personal relations with, and the monetary subsidies which he obtains for, Wang Ping-sheng through his clandestine connection with SOE’. In return, the RII offered its ‘products’ from a ‘large network’ of wireless and intelligence agents deployed in occupied China, Mongolia, Manchuria, Korea, Japan and later extended to Hong Kong, Kwangchowwan and Indochina. The RII put a printing press at the disposal of the SOE in Chungking, for the purposes of propaganda. It was calculated that Wang was supported by one-third by SOE money. In any case, RII was prohibited from undertaking armed action or sabotage against the Japanese. Arthur Duff, an OSS agent, approached the SOE and said that he had authority to secure OSS cooperation with RII in propaganda, especially

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with regard to aerial dissemination of pamphlets and transporting printing supplies. The SOE claimed that the ‘OSS is not yet properly organised in Chungking and is not fully operational. They have neither the staff nor the machinery to take over and maintain our interests in RII. Nor have they asked to do so. The question of how and in what degree OSS participation should be invited has constantly been the concern of AD/O (SOE head agent in China) and the Directorate of SOE. That the time is not yet ripe, in spite of the terms of the Agreement between OSS and SOE, is due to the overriding fact that the Generalissimo has expressly vetoed active American participation in RII. To understand the position it is imperative to bear in mind the Charter of RII, and even more important the Chinese background.’ RII was a Chinese Bureau directly controlled by General Wang Ping-sheng, ‘who is responsible only and directly to the Generalissimo, who has charged him with the duty of conducting the Intelligence and Chinese propaganda services in enemy occupied China and the adjoining regions as well as with the duty of inciting subjugated populations to revolution against the Japanese (sabotage in enemy occupies territory was originally within his charters but was later delegated by the Generalissimo to General Tai (Dai) Li’s organisation)’. Allegedly, ‘General Wang’s security is very strict; he even received no foreigners nor will he impart any information derived from or about RII except with the sanction of the Generalissimo. The operations of RII are Chinese operations (not SOE operations).’38 Chiang did not want an Anglo-American alliance. That was why he had created a restrictive framework: ‘At present the Generalissimo has ruled that he is prepared to cooperate in subversive activities with the Americans for sabotage through General Tai Li’s organisation – provided the British are excluded – and with the British in respect of RII activities – provided the Americans are excluded.’39 Dai Li ‘has very wide powers and maintains his own intelligence and “Gestapo” organisation. It must be remembered that General Tai [Dai] Li is regarded as the Himmler of Free China. He is anti-British and probably anti-foreign although he is charged with active co-operation with the American Mission, and is suspected of maintaining liaison with German agents’.40 Indeed, this shows that nothing could be kept secret. Key figures in the secret liaison between the KMT and Nazi Germany were RSHA intelligence officer Kurt Jahnke and General Gui Yongqing.

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TV Soong told the SOE that Chiang wanted Dai Li to coordinate with the Americans’ sabotage, and for the RII to ‘be kept purely Sino-British and that there should be no direct contact with General Tai Li but liaison through himself, TV Soong. He promised full support of General Wang, in whom he had confidence, in liaison with the American effort, which he regarded as experimental. It was arranged through Mr TV Soong that the available supply of SOE stores, including toys (weapons) and explosives, should be transferred from RII to Tai Li for use with the Americans’.41 It was clear to SOE leadership and to Commander MacHugh (the US military attache´/liaison officer) that the Chinese wanted ‘to drive a wedge between the British and the Americans, whilst obtaining benefits from each’. The British and Americans discussed how they could cooperate under the existing framework set by Chiang.42 The OSS was cooperating with RII in the transport and distribution of propaganda. Nonetheless there was ‘an absolute ban on OSS participation in the RII Intelligence services and W/T net-work. The ban extends to SIS in Chungking and is due largely to Chinese distrust of OSS and SIS local security.’ The RII had turned into an SIS asset; the SIS ‘consistently pressed’ for the expansion of the RII Intelligence service ‘because it is a better service than they can obtain themselves.’43 For the savvy Menzies, the RII was securing him intelligence to give to Whitehall. According to a secret history: The ‘SIS, recognising that the Intelligence Service from RII surpasses in value and volume its own, has given SOE full support. The arrangement arrived at, is that the Intelligence is passed immediately on receipt to SIS, who transmit it in turn to the interested Departments of HMG (His Majesty’s Government) at its discretion, carefully safeguarding its source. The Intelligence is thus put at the disposal of HMG as emanating from one of the secret sources of SIS, the anonymity of which is carefully preserved. The task and responsibility of transmitting such Intelligence to the Americans then becomes one for HMG. SOE is not concerned any longer. It is however presumed that much of the Intelligence [. . .] does percolate to Washington’.44 The arrangement of the SOE with the RII was made before the OSS/ SOE agreement, in August 1942. The British position was that ‘not only should we do everything possible to keep in with OSS but we must also make every effort to keep in with RII; if we do not we shall, I think have

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bitter complaint from SIS who declare that all the information received from RII – which is at once handed on to them – is of far greater importance than anything they received from their own man in Chungking or anywhere else.’45 The SIS was on the defensive in China because it relied on the RII and an agreement with Chiang, from 1943 onwards. The SIS admitted that the RII offered ‘much intelligence’ London had commented ‘very favourably’. The information covered political and economic affairs as well as military in Japan and in occupied China.46 Walter Gordon Harmon was born in Chungking in 1900 to a Baptist missionary family and educated at Blackheath and Eltham Colleges in England. During World War I he served as a wireless operator aboard a Fleet Auxiliary, bringing war material from Canada. In 1919 he returned to China, at first as an oil salesman of Asiatic Petroleum Company (APC). In 1926 he ventured to Urga in Mongolia, Inner Mongolia, Lanchou in Kansu and Paot’ou. A year later he was hired at the Salt Gabelle, the Chinese Government Salt Revenue Administration. Soon he was promoted to assistant district inspector at Tangu, a port at the mouth of the Pohai River, some sixty miles south of Tientsin, and later became preventive officer on the Yangzi with the Salt Revenue Guards. It was T.V. Soong who, in 1931, established and financed the Special Brigade of Salt Revenue Guards; by 1936 he boasted some 15,000 troops, trained by German General Falkenhausen. These troops confronted salt smugglers in Northern Jiangsu Province, which was called Huaibei Salt area. The Guards joined the Chinese forces during the battle for Shanghai in 1937. In 1927 and 1934 Harmon was awarded two medals for meritorious services by the Chinese government.47 Upon the declaration of war with Nazi Germany in September 1939, Harmon embarked for Britain to join the Royal Navy; but he was turned down because he was too old. He joined the Army and received basic intelligence corps training and was sent back to China as an Additional First Secretary of the British embassy in Chungking. Two years later, in October 1942, he was commissioned 2nd Lieutenant and assigned to lead the General Liaison Office (GLO) in Chungking – the cover of the SIS. Again, he ventured to Mongolia, Tibet and other places in China. Later he recalled that he had commanded an ‘intelligence unit’ (i.e. the SIS) with five majors, four captains and six FANYs (First Aid Nursing Yeomanry) monitoring communist and Japanese movements. Harmon

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was personally involved in the infiltration of the Mongol Lama Dilowa Huktuktu from occupied China. In 1942 Chou Enlai approached Harmon in Chungking, intending to open a communication channel between Yenan and London. This breakthrough (not without its critics in London) led Menzies to appoint Harmon the SIS representative in China, giving him the rank of Lieutenant Colonel.48 Harmon was fluent in Chinese, had been born in the country and was accustomed to Chinese ways of behaviour and discussion. He created special channels with the CCP. He married in 1932, and again in 1948. Nonetheless, Harmon had an affair with a beautiful Chinese, Chang Pao-pei (Zhang Baobei). Colonel Hardinge, serving with the SIS in China, disclosed in one of his letters to his parents that Harmon had ‘a little Chinese wife, Rose, who mothered all of us. She wasn’t much over 30, if that, very tiny and slipping fast into the last stages of consumption, but we all took our woes to her. Poor Rose, it was her death in Chungking in 1944 that cracked Gordon eventually, and led to him compromising us all. And I think she would have been glad, for it led to us getting away out of China to our own lives again, otherwise most of us souls would still be there, probably being brainwashed by the Commies.’49 Meanwhile, Frank Hill was ordered to explore contacts with the communists. Unauthorised by the KMT, he was in contact with communists in Chungking. Now he was about to open a post in Xi’an. He reached only Chengtu. There was fear that he was targeted by KMT security because of his previous contact with communists. His health was bad and was called back in October 1943.50 In Chungking, Harmon was criticised for not running agents. In December 1943, some in the SIS China desk were critical of Harmon, who had shown himself to have ‘the position of the Chinese expert – a king or Pope of China whose infallibility must not be questioned . . . he has never supplied any SIS intelligence, only hand-outs from the Chinese Officials – in fact, any rubbish that they wished to palm off on us.’ Indeed, one hundred and nineteen reports were analysed of the period January– October 1943: the first source was the SOE (thirty-four reports), the US diplomatic missions the second (twenty-one). Nine reports came from ‘43931’, Colonel Maasing, an Estonian who had contact with General Onodera, the Japanese military attache´ in Stockholm. Harmon had presented seven reports; ‘two at least’ were seen as ‘expressions of opinion – competent views, but not true SIS information.’ Steveni, the regional SIS

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chief, backed Harmon; while Menzies admitted that Harmon was ‘a difficult and touchy person to handle but one whose standing with the Chinese is such that his potentialities are enormous.’ At least twenty SIS handlers run 400 agents in all of China.51 By January 1945, the SIS had stations in Kunming, the liberated Nanking and Wenchow (southeast of Shanghai); coast-watching and infiltration of Japanese-occupied areas were the key missions.52 The SIS and SOE were operating in a ‘denied area’, the China of Chiang Kai-shek, who viewed them not as allies in the fight against the Japanese, but as antagonists. In order to keep the SIS part of Whitehall’s power games, Menzies had to secure intelligence on the war with the Japanese and on the civil war between Chiang and Mao. Meanwhile, in occupied Shanghai, the British Micky Moore, who had studied aeronautics in England, worked for Colonel H.M. Smyth, maintaining a wireless connection with the British in Chungking. He had another set in Wenchow. Moore arranged for the secret communication of British prisoners in Shanghai, and according to one of his claims he negotiated with local bandits the release of a downed US pilot in Pootung.53 The Chinese secret services could easily find out which US or British service maintained an armed force in China and, through Chiang, exert pressure for this to be withdrawn – as happened with the SOE China commando group. Nonetheless the SOE maintained the secret Operation Remorse, a grand-scale black market operation. Kunming, Chungking, Mengtsz (or Mengtze) and Kweilin were the main places of black market activity where the efforts of Remorse were concentrated. Its stated aim was ‘to keep the British foot within the Chinese door’.54 The operation was a secret kept in plain sight: the vast corruption and black market activities of the nationalist regime made it impossible to track the activities of the SOE.

CHAPTER 9 THE SECRET STRATEGY

Chiang Kai-shek was interested in preserving his rule and won over the communists. For him, Japan was not the existential threat, even though it was already responsible for unimaginable massacres and horror in China. The generalissimo assumed that secret diplomacy was necessary to take the strategic advantage towards the communists. The antagonism between the CCP and KMT could not be restrained by the United Front against the Japanese. Since the autumn of 1940, the Communist New Fourth Army had engaged nationalist forces – attacking and counterattacking. Thus, the conditions for an all-out battle were gradually falling into place. In December, Chiang ordered both the Eighth Route Army and the New Fourth Army to withdraw from Anhui and Jiangsu within a month. The Communist Party agreed to move its New Fourth Army troops to the northern shore of the Yangtze River. On 4 January 1941, the army commenced marching on Jiangsu, planning to cross the river along three routes. The next day, the New Fourth Army found itself surrounded in Maolin; the communists numbered 9,000 – the nationalists 80,000. General Shangguan Yunxiang and his troops attacked their communist allies, and only 2,000 escaped the onslaught. For Mao, this was betrayal while the Chinese confronted Japanese occupation. On instruction from Stalin, Georgi Dimitrov cabled Mao on 5 February: ‘We consider that a split with Chiang Kai-shek is not inevitable. You ought not to be heading toward a split. On the contrary, supported by the masses favouring the preservation of the united anti-Japanese front,

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the Communist Party ought to do everything incumbent upon it in order to avoid a split.’1 An integral part of the secret war for China was the spymasters’ continuous contact– not to mention smuggling and trade – with the enemy, the Japanese. In the period March 1940– January 1941, Chiang and Dai Li adopted the secret strategy of ‘saving the nation in a devious way’, which included the secret contact between nationalist intelligence services and the Japanese and the collaborators’ government, with the aim of infiltrating moles.2 Indeed, Peng Shengmu, the Juntong deputy head of the Nanking Intelligence Group, was hired as a counsellor of the Ministry of Finance of the Wang Jingwei government. There were channels of intelligence and communication between the collaborators and the Chungking government – which was why the allies distrusted the Chiang regime on intelligence on Japan.3 Pan Hannian was a key CCP spymaster in Shanghai. He was with Mao during the Long March; he had also led the underground offices of the Eighth Route Army and the New Fourth Army in Hong Kong, focusing on espionage. In Yenan Kang Sheng was his immediate superior in the recruitment of spies and their infiltration into KMTterritory. In October 1939, Pan Hannian was named deputy social affairs minister, and was tasked with amalgamating CCP secret services in Shanghai, Hong Kong, Macao and Canton into the South China Intelligence Bureau. Among his recruits was the left-wing poet Guan Lu (Wu Shoumei); her task was to infiltrate the ‘No. 76’ organisation. Some accounts had Li Shiqun wanting to return to the CCP, and through contacts made this known to the CCP in Shanghai. When Guan Lu joined his organisation as a spy, Li Shiqun knew that she was a communist. He fed her intelligence on the Japanese and the rural pacification campaigns in Jiangsu to show the CCP his good will. Pan had commenced indirect communication with Li Shiqun through Guan.4 In April 1939, Pan reached Hong Kong to lead intelligence machinery services in southern China. From September 1939, Pan infiltrated a communist-nationalist double-agent of Juntong, Yuan Shu, in the Iwai Intelligence Agency – a branch of the Japanese foreign ministry’s intelligence apparatus in China, led by Eiichi Iwai, Japan’s vice-consul general in Shanghai. Pan met Iawai in November. Eventually they cut a secret agreement; the Iwai would support a politically neutral

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periodical, the Ershi shiji (Twentieth Century), published by Pan. In return, Pan would give the Japanese intelligence on Hong Kong as well as general strategic information on the politics in the colony. Pan frequently went to Shanghai for discussions with Iwai. In March 1940, Iwai introduced Pan to Major General Sadaaki Kagesa, who oversaw the collaborators’ government of Wang Jingwei. Pan got some funding from the Japanese and channelled it to his own espionage organisation, which from 1939 to 1941 had between thirty and forty secret agents and two radios.5 During the fall of Hong Kong, in December 1941, Pan secured Iwai’s help to enable his network to flee. In parallel, from 1939 Pan was in secret contact with Li Shiqun the head of ‘No. 76’. That same year he placed a mole among Li’s entourage. In early 1945, Mao praised Pan as spymaster who seemed not to have told him that he was in contact with Wang Jingwei (Wang Jingwei had died of natural causes on 10 November 1944).6 On 30 March 1940, Wang Jingwei’s government decided that security would be handled by the Ministry of Police and the Ministry of Social Affairs. A new Ministry of Investigation and Statistics (MIS) was created, led by Li Shiqun. The MIS replaced the Ministry of Police and was put under the Military Affairs Committee, chaired by Wang Jingwei.7 It cooperated with the military intelligence service of the Japanese 13th Army, which operated in East China and helped the Japanese in ‘rural pacification’.8 In early 1942, Pan Hannian took the initiative to meet the nowpowerful Li Shiqun. His aim was to cut a deal with him so as to protect his own Shanghai espionage network from No. 76 counterespionage. Pan, accompanied by Yuan, finally met Li Shiqun at his Shanghai residence in February 1942. The spymasters agreed to liaise with Wu Junhe (a former communist and CC Clique agent who later defected to No. 76). In spring 1942, Pan and Li had another secret meeting; Li revealed a soon-to-come Japanese campaign together with the collaborators’ forces against the Communist New Fourth Army in northern Jiangsu. Li wanted to show ‘good will’ to the CCP. In April 1946, Pan Hannian returned to Shanghai, and later to Hong Kong, where he coordinated the influx of refugees from KMT-held territories to the CCP-controlled areas. After the PLA occupation of Shanghai in April 1949, Pan Hannian was named deputy mayor and assigned security and

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united front work. He ordered Shanghai police chief Yang Fan to employ double agents to penetrate the remaining clandestine KMT radio stations. Hu Junhe, the former Wang Jingwei regime intelligence officer, now working for the Zhongtong, was put in charge of an intelligence committee.9 The Zhongtong proved better able to exploit weaknesses than the Juntong. In 1941 it arrested members of the CCP Jiangxi Provincial Committee, securing intelligence on organisation and personnel of the CCP in South China; some members were turned and provided intelligence which would contribute to arrests the next year. Indeed, from early 1942, the operation against the CCP Southern Work Committee commenced. Already in 1939, the Jiangxi Office of the Zhongtong located two young female CCP couriers who carried messages between the cities of Taihe and Xi’an. The surveillance continued for two years, and in March 1941 the couriers were arrested. Under interrogation the pair confessed of the names of other couriers, among them Huang Jinglin, the sister of the secretary of the CCP Southwest Jiangxi Special Committee. Huang Jinglin was arrested and used to entrap another courier, Yang Daofeng, who disclosed more information, including the locations of the CCP’s Southwest Jiangxi Special Committee and the Jiangxi Provincial Committee. The Zhongtong officers used Yang as a trap, releasing him to meet with the head of the Southwest Jiangxi’s Organisation Department, Li Zhaoxian, who was soon to arrive in Xi’an. Li Zhaoxian was arrested and quickly proved cooperative, leading to the arrests of other high-rank party members. Among the arrested was Xiao Sansen, the only one authorised to contact the CCP Provincial Committee directly. By threatening his son’s life, Zhongtong agents forced Xiao to cooperate. Under surveillance Xiao, Yang Daofeng and Li Zhaoxian reached the Jiangxi Provincial Committee. Their families were taken hostage, and the Zhongtong had them write letters pledging their cooperation and support. The CCP Jiangxi Provincial Committee was crippled by a wave of arrests. One high-profile arrest was Dang Jingzhai, the head of the Organisational Committee and the radio communications staff.10 On 26 May 1942, Jiangxi and Guangdong agents arrested Guo Qian, the head of the Organisation Department of the Southern Work Committee.11 Guo pledged his cooperation with the Zhongtong, on the conditions that his life was protected and his

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role remained secret. On 26 May, Zhongtong agents, together with Guo, went to the house where his wife stayed, arrested her and confiscated 90,000 yuan of the CCP Southern Work Committee. She was forced to cooperate. Guo and his wife gave information which led to the arrest of Lin Daqi (aka Liang Dachang), the Secretary of the CCP Guangdong Provincial Committee, and Rao Fujun (aka Rao Yike), the head of its Organisation Department. Some couriers were also put into custody. One of the most high-profile arrests was of Liao Chengzhi, whose father was a leading member of the KMT under Sun Yat-tsen. On 4 June, Zhongtong agents, together with their collaborator Guo, went to Dapu. On their way, in Xingning, they arrested a CCP courier who soon told them that the CCP was aware of the CCP Jiangxi Provincial Committee’s collaboration with the KMT and that some members of the party had been arrested in Guangdong. The CCP party organisation had moved to secret locations. In Dapu, the head of the Propaganda Bureau of the Southern Work Committee, Tu Zhennong, was arrested by the Zhongtong almost by chance. More arrests followed: of Zhang Wenbin, the vice-secretary of the Southern Work Committee and of more couriers.12 Chiang Kai-shek had told Dai Li to secretly communicate with Wang Jingwei, boosting efforts against the Communist New Fourth Army. This happened before the January 1941 battle of the nationalist forces with the Fourth Army (the new Fourth Army ‘incident’).13 Under the same strategy, Chen Lifu and Xu Enzeng, the head of the Zhongtong, had created special communication channels with Ding Mocun of ‘No. 76’. Dai Li had secret wireless communications with Zhou Fohai and with other high-ranking officers of the collaborators’ secret services. Out of this secret collaboration, intelligence officers were directed to spy for the Jungtong and the Zhongtong as well as to purge communists on behalf of the Wang Jingwei regime.14 According to an account, Li Shiqun made a proposal to Kagesa Sadaaki, the head of the Ume Kikan, to make contact with Pan Hannian. Li did not have his hopes pinned on Pan’s defection (as he suggested to Kagesa); rather he sought to cut a secret deal so that the New Fourth Army would not to attack Wang Jingwei’s government troops while they were participating in rural pacification operations. Li met Pan in Shanghai in September 1942. Pan listened to the proposal and said that he would transfer it to his superiors. He wanted safe passage for himself

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and his CCP Shanghai cadre out of the city (the CCP had ordered him to withdraw from Shanghai). Li agreed, and his lieutenants gave Pan a code for their secret communication as well as information about the deployment of Japanese troops and the units of the Wang government. Pan and his cadre safely reached the area of the New Fourth Army. The next spring, Li met with Pan at his headquarters in Suzhou and eventually convinced him to meet Wang Jingwei in Nanking. At that time Pan was the Director of the Intelligence Department of the CCP Central China Bureau. Wang reminded the communist spymaster that in the 1920s he had cooperated with the CCP since he led the left wing of the KMT, and he sounded in favour of parliamentary democracy with the CCP. The spymaster just listened.15 Wang urged Pan to persuade the CCP not to cooperate with Chiang Kai-shek, but to side with him instead. Pan replied that the CCP would not join Wang’s government. Wang wanted to send an emissary to Yenan, but Pan declined to help him with this, telling him that he would simply transfer his message to Yenan. He told Wang that if he chose to defect to the New Fourth Army, then he would guarantee his safety. Nonetheless, Pan kept his meeting with Wang secret from the CCP. According to some accounts, this was because at that time Rao Shushi, the secretary of the CCP Central China Bureau, to whom Pan had to report, was cooperating in the purges (the ‘Rectification Movement’) of Kang Sheng, heading the Social Affairs Department (SAD). Pan and Rao were not on friendly terms, and Pan feared that by telling Rao of his meeting with Wang, he might give him a pretext to purge him. Eventually, the collaborators’ and nationalist governments leaked the rumour that a high-rank communist had met with Wang Jingwei. Yenan denied everything, and Pan was convinced now that he could not report this.16 On 1 April 1955, in a bid to save himself from a wide-scale purge, Pan disclosed his secret meeting with Wang Jingwei. Mao was furious: ‘from now on this person cannot be trusted’. Pan was accused of having defected to the KMT, imprisoned and eventually died in prison in 1977. Soon thereafter he was ‘rehabilitated’.17 Yuan Xueyi, the chief of education in the province of Jiangsu, served in the collaborator’s government. Some assumed he was a Juntong agent, tolerated by the Wang regime. In reality he was a CCP mole who, after 1949, served in the Ministry of Education of the People’s Republic of China.18

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In the meantime, Li Shiqun’s antagonist Zhou Fohai made secret contact with the Juntong of Dai Li, informing him that he wanted to be on the side of Chiang Kai-shek. Thus, from early 1943, Zhou had secret communications with both General Gu Zhutong, the commander of the Third War Zone of the nationalist government, and Dai Li. Allegedly, Zhou worked to free imprisoned KMT leaders in Shanghai, and willingly recruited Juntong agents to the Finance Ministry and the Central Reserve Bank of Wang Jingwei’s government. In addition, he gave money to nationalist guerrilla forces in the Yangtze Delta. He had set up a secret radio station in the Shanghai office of the Finance Ministry that communicated with the Juntong headquarters in Chungking. In 1943, the Japanese expressed their wish for an arrangement with Chiang, seeming to tolerate Juntong spies in Shanghai – they also used a senior Juntong secret agent named Wu Kaixian, among others, to pass messages to Dai Li.19 Despite Li Shiqun’s successes against the KMT, the Japanese turned against him. In March 1942, Li Shiqun’s agents arrested Wu Kaixian, the senior Juntong agent in Shanghai. He was also the head of the underground Shanghai United Committee. Colonel Kawamoto Yoshitaro, the head of the China Expeditionary Force Headquarters’ Intelligence Section, was angry because he was making use of Wu as a double agent. In addition, within the security apparatus, Li antagonised Zhou Fohai – both sought power, and Zhou was waiting to retaliate. Dai Li also wanted rid of Li Shiqun. He secretly communicated with Zhou Fohai in the spring of 1943, telling him his intention (Zhou had been in contact with Dai Li since October 1942). In the meantime, a group of middle-ranking No. 76 intelligence officers conspired with the Japanese to kill Li Shiqun and replace him as head of the MIS. One of the conspirators was Su Chengde; when Li heard his name, he ordered his assassination – but Su received a warning and was saved. In parallel, Zhou, as deputy head of the Executive Yuan, argued in favour of the abolition of the Rural Pacification Committee and for a new Rural Pacification Office to be put under the Executive Yuan; Li Shiqun was working without the Yuan’s input in the rural pacification operations. The Rural Pacification Office was established on 1 June 1943, undermining Li Shiqun’s authority. Li threatened Zhou with retaliation. The Japanese concluded that Li was now a threat to the security services apparatus. According to a former Juntong agent,

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Li Shiqun protected Pan from the Japanese by having him stay at his residence in Suzhou. Allegedly, Pan and Li made plans for Li Shiqun’s forces to assist the New Fourth Army to advance to the Lower Yangtze after the defeat of Japan. Li agreed to assist a CCP-aided American landing in southeast China. Besides, Li Shiqun’s forces did not always follow the orders of his local Japanese commanders, and looted villages during the rural pacification operations. Most importantly in August 1943, Lieutenant General Shibayama Kenshiro, the new chief of staff of the China Expeditionary Army, was informed of Li’s secret cooperation with Pan Hannian and the New Fourth Army.20 Major Okamura, the head of the Kempeitai’s Political Police Section, prepared a plan for the assassination of Li Shiqun, in consultation with Zhou Fohai. The Ume Kikan authorised it. Okamura was ordered to kill Li. On 6 September 1943, he invited Li to his office, and later for dinner, where he gave him poison. Though Li was careful, eating as little as possible, he ate poisoned meat cakes. Li returned home. The next morning he felt tired and had uncontrollable bouts of vomiting and diarrhea. His physician was called for help and gave him an antidote. His condition deteriorated. Lieutenant General Kobayashi Nobuo, the commander of the Japanese Army Group in Suzhou and a friend of Li, was not informed of the assassination plot in advance. He and two Japanese medical doctors (Dr Ogura and Colonel Matsumoto) visited Li on his deathbed. The doctors were perplexed by the fact that Li’s poison came from a deadly bacterium developed in Japan. Soon they were exiled by the Japanese military to distant posts.21 After three days, on 9 September, Li died.22 All the key conspirators attended his funeral. The Political Department of the Military Affairs Committee (MAC) took over from the MIS, which was abolished on 29 October.23 In turn, Mao wrote to Stalin in February 1941, ‘the current moment offers us the best opportunity to gain the upper hand, and we must not lose it.’24 Throughout the war, Mao had a direct radio contact with Stalin: Yenan was ‘the Agricultural Department’ and Stalin ‘the remote place’. All the files of the radio telegrams were kept in Mao’s house, and only he had full access to them. Shi Zhe, Mao’s trusted translator, later wrote that in 1946 he burned the files on Mao’s instruction.25 In April 1941, Chiang received intelligence that Hitler would turn against the Soviet Union very soon. Stennes could have been the source of this information, since he had contact with Sorge, who knew about

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Operation Barbarossa. Chiang informed Chou Enlai about it in order to get Stalin’s attention. Still, the generalissimo viewed the CCP as an enemy. On 13 April, Moscow signed a treaty of neutrality with Japan.26 Chiang was informed about the 18 June 1941 German– Turkish nonaggression pact. ‘There will be no more than a few days before Germany attacks the Soviet Union’, read his diary entry on 18 June. Chiang informed Chou Enlai that on 21 June the invasion of the Soviet Union would commence. Upon the German attack, Chiang broke relations with Berlin.27 That same day, in Moscow, Georgi Dimitrov, the General Secretary of the Executive Committee of the Comintern, wrote in his diary: ‘A telegram from Zhou [Chou] Enlai in Chongqing [Chungking] to Ya’nan [Yenan] [to Mao] contains among other things an indication that Chiang Kai-shek is declaring insistently that Germany will attack the USSR, and is even giving a date, 21 June 1941! Rumors of an impending attack are multiplying on all sides. Have to be on guard.’28 Chou Enlai had a secret source close to Chiang: one of his strategists, Lieutenant General Yan Baohang.29 Through Chou, Lieutenant General Yan informed Moscow that Hitler war planning to invade Russia. He had photographed staff maps with the deployments of Japanese forces in Manchuria, and also informed Stalin about the coming attack of the Japanese against Pearl Harbor. In early June 1941 the German military attache´ in Chungking, assuming that Yan Baohang was an agent of Dai Li, had given him details of the invasion, codename ‘operation Barbarossa’. Yan communicated the secret intelligence to Chou Enlai, who on 16 June transmitted it to Yenan. There, the NKVD team cabled it to Moscow, only to have their claims dismissed by Stalin as ‘Oriental nonsense’ – a possible conspiracy of the Western powers to divide Russia and Germany after the signing of the nonaggression pact. After the invasion, on 22 June, Moscow expressed their thanks to the Chinese.30 In addition, in late November Dai Li’s cryptographers revealed plans for a Japanese attack against Hawaii. Yan Baohang accessed their findings and communicated them to Chou Enlai; Yenan and Moscow were informed. The impressed Stalin sent a personal message to the mole via the Russian military attache´ General Nicolai Roschin.31 As Chiang put pressure on Washington not to concede to Japanese positions during the last US– Japanese negotiation, the Juntong reported indications from Tokyo that it planned to wage war against the United States. Chinese spies in Southeast Asia reported of heavy smoke

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coming out of the chimneys and incinerators of Japanese consulates in Singapore and other cities. Their assumption was right: the Japanese were burning secret documents because they were on the eve of war. At 0100 hours on 8 December 1941, an aide opened the door of the bedroom and gently woke up Chiang to give him the news: Japan had attacked Pearl Harbor.32 Another communist spy in the Juntong, Zhang Luping, disclosed communications codes and the network of their radio stations. In addition, Liu Huisheng, a Juntong intelligence officer the head of its office in Zhengyangguan after approached by a communist agent, turned a mole of the CCP. He provided intelligence on the 110th Army inducing its commander and Whampoa graduate Liao Yunsheng not to confront the Red Army. In April 1949, the 110th Army received orders to deploy to Fujian in order to confront the Red Army which had crossed Yagtze. In Fujian, on 4 May, the 110th Army, under Liao, mutinied – one of his advisers, Zhang Gongxia, was a CCP mole.33 In February 1942, Dai Li was embarrassed. A group of seven communist spies were found to be operating in one of the most sensitive echelons of his organisation. Their discovery proved that all his security measures and philosophies were not enough to cope with reality. The spies operated in the Juntong’s general station of telecommunications. The chief operator, Lieutenant Colonel Feng Chuanqing, was a mole. Zhang Luping, described as an attractive woman, was sent by Kang Seng in the winter of 1939 to spy with the group. The spies had accesses to lists of Dai Li’s personnel in signals and telecommunications along with information about the networks, frequencies, wave lengths, codes. The spies sent their intelligence to Chou Enlai’s delegation in Chungking, where it was forwarded on to Yenan. Eventually, they were all outed and tortured. Dai Li concluded that he needed help in upgrading counterespionage, and asked the Americans – the FBI in particular – to provide advice and training to his cadre; this would materialise in the SACO agreement. The Americans were afraid that all KMT communications were being intercepted by the Japanese; thus any secrets about ‘the Magic’, the codename of Japanese decrypts, were not to be divulged. On 30 August 1943, in the White House, President Roosevelt himself told Foreign Minister T.V. Soong, ‘Our General Staff believes your codes are being taped by the Japs.’34

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The Juntong had a vast network of informants within the military. While Chiang was attending the conference in Cairo (22 –26 November 1943), a number of generals and officers planned to topple Chiang and his supporters, the CC Clique, Finance Minister H.H. Kung and Dai Li. The plot failed, and sixteen generals were executed.35 H.H. Kung, a self-proclaimed seventy-fifth generation descendant of Confucius, was not touched by Dai or Chiang. Kung, who ran his own secret service, had in his confidence Hu Egong, who earlier had introduced Pan Hannian to elite circles in Hong Kong.36 Berlin recognised the puppet government of Wang Jingwei. In response, Chiang cut off diplomatic relations with Nazi Germany. Nonetheless, a backchannel was established. Prior to July 1941, there was secret communication between the Abwehr and Chungking.37 Key figures of this arrangement were Kurt Jahnke and General Gui Yongqing. Kurt Jahnke was an intelligence officer; during World War I he undertook sabotage assignments in the United States for the German government. In China, Jahnke had made the acquaintance of the Soong family, Soong Mayling (Chiang’s future wife) and Sun Yat-sen. General Gui Yongqing was a Whampoa graduate. In 1930, he was sent to study military science in Germany, and remained in contact with Dai Li. In spring 1940, Gui was sent to Europe to work on the liaison with Berlin; he was the military attache´ in the German capital from autumn 1940 until summer 1941. Gui talked with Go¨ering, who urged for an improvement in relations with Japan. Gui’s main contact was Janhke; the two met every week to share ‘views on matters of foreign policy’. Once Sino– German diplomatic relations were suspended, Gui moved to Berne, Switzerland, continuing his meetings with Jahnke.38 Nonetheless, British intelligence in Chungking (rightly) believed ‘that since breaking off relations with the German Government the Chinese have kept open the pipe-line to Berlin through Berne’. Another key member of the secret liaison, Qi Jun, was in Switzerland too. On 26 January 1942, Gui and Jahnke met; the latter communicated an offer for Sino – German cooperation because the allied British and Americans could not be trusted: ‘the USA and Britain [are] unable to launch an attack on Japan for at least two to three years’. According to Jahnke, Berlin was willing to sign a secret treaty with the Republic of China. Thus, Germany would be able to mediate between China and Japan and

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‘allow for aid to be sent to China, and for both Germany and China to control the Soviet Union’. Jahnke added to ‘exchange advantageous but harmless information between the two sides’.39 When they met again in July 1942, Jahnke asked for a response to Germany’s proposal. Gui was noncommittal; after all the United States was now an ally of China. In any case, the German intelligence officer informed Berlin that ‘the Chinese were willing to enter into a collaboration with our Secret Service [RSHA].’40 Hitler was interested in making China an ally, but he gave priority to the reply of the Japanese. Himmler and Heydrich would work on secret services collaboration. The main Chinese terms for concessions to Japan were for it to withdraw its forces from the mainland and to hand over the ports.41 By September 1942 it was apparent that the Japanese were not interested in a mediation. The Gui– Janhken contact continued though.42 General Gui Yongqing was appointed military attache´ in London in late 1944.43 In April 1946, Jahnke and his wife were captured by the Soviet SMERSH, and executed.44 By the end of 1941, under the United Front, the CCP– KMT alliance, the CCP’s Central Revolutionary Committee declared that a ‘political offensive’ against the Japanese would be employed; thus, the CCP should ‘save and preserve its strength [military and civil] and wait for favourable timing’ to confront the KMT.45 In his turn, Chiang sought ‘to punish those who do not obey orders’: he would fight the CCP. General Gu was given orders; he attacked the Red Army, which suffered the loss of nine thousand soldiers. Nonetheless, the communists’ casualties at the time of the Japanese invasion boosted the patriotic identity of the CCP, and the public opinion turned against the KMT. The Communist New China Daily in Chungking, along with other newspapers in KMT-held areas and intellectuals not allied to the CCP, blamed the Nationalist Army for treachery.46

CHAPTER 10 A MOLE IN MAO'S OFFICE

A current Chinese TV series called The Sleeper follows the adventures of a KMT spymaster. The script is based on the true story of a mole who had access to the confidential correspondence of Mao. Shen Zhiyue led the Republic of China’s [of Taiwan] Ministry of Judicial Administration Investigation Bureau. Throughout his life, he went by many names: Shen Tongyi, Shen Yuting, Shen Heng, Shen Jingand Shen Yuechen. His noms-de-guerre were Li Guodong, Wang Xiao, Cheng Dingfa, Wang Ming, Gao Xiang and Wang Mingzong. He was a spymaster close to Chiang Kai-shek’s son Chiang Ching-kuo. During the Cold War he held a communication channel directly with FBI Director J. Edgar Hoover. Shen’s family were Christians, and that after 1949 his father, Shen De, remained on the Chinese mainland in the family’s ancestral province of Zhejiang. Shen Zhiyue was born Shen Yue, in Xianju county, in the Zhejiang Province, in 1913. In May 1930 he entered the Nanjing Central Military Corps. Three years later, Shen attended the Shanghai Fudan University. He was recruited by the Rival Society, of which Dai Li was a member; he was trained at a police academy but soon entered the secret war. Shen Yue (as ‘Shen Zhiyue’) joined the CCP in Shanghai. He taught himself Russian and English and schooled himself in Marxist-Leninist thought. In spring 1937, Dai Li dispatched Shen to Yenan; he was to infiltrate the communist headquarters with the aim of killing Mao and other leaders. In April 1938, he reached Yenan posing as an assistant to a professor known to Mao. Zhou Xingone, a key security official, questioned Shen and sought information about his student life as a communist. He sent a message to

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the communist underground in Chungking to collect intelligence on the new arrival. Eventually evidence of his communist activities were found: Dai Li had prepared the ‘legend’ of his spy.1 In 1938, Shen entered the Anti-Japanese Military and Political University in Yenan, and was noted by Kang Sheng. Shen looked ‘very docile’, showing humility and always reticent to show his commitment in military drills. Eventually, Shen was assigned to the party’s confidential mail office. Historians argue that he was not the secretary of Mao, but once worked as a clerk in the confidential post office. Shen communicated with his handlers in Chungking via an old man in Yenan. Mao seemed to trust him and sent him for work in the New Fourth Army. Elaborate security measures and loyal bodyguards meant that Shen could not proceed to make his attempt on Mao. Indeed, the security was constantly on alert. In 1938, a monk residing in the famous pagoda of Yenan was arrested and charged with espionage – security feared an attempt against Mao’s and other leaders’ lives. In 1939, Shen was dispatched as group leader to Zhejiang. When the New Fourth Army was surrounded by nationalist forces, Shen gave secret information to the nationalists, who turned against the New Fourth Army. Eventually, in 1941, out of fear that his cover was about to be blown, Shen escaped to Chungking. He persuaded his superiors to dispatch him to lead the underground CCP network in JiangsuZhejiang. From there he escaped safely to Chungking.2 In the 1950s Shen was named head of the successor of Zhongtong, the Bureau of Investigation of the Judicial Administration. In 1963, Shen Yue was a head of secret operations in Macao and was implicated in the failed assassination attempt on Liu Shaoqi, the president of the PRC, while on a visit to Cambodia in May. Shen died in February 1984 in Taibei.3 Kang Sheng the Shanghai communist spymaster who had previously worked for Chou Enlai, and supported Li Lisan, changed his allegiance to Wang Ming, who claimed the CCP’s leadership. Wang went to Moscow in July 1931 as the chief Chinese representative of the Comintern. Kang and his wife followed Wang – Kang working as his deputy. In 1934, Kang became an elected member of the Politburo of the CCP. Meanwhile, the Zunyi Conference of January 1935 established Mao as the undisputed leader of the CCP. Wang and Kang tried to exert control over CCP forces in Manchuria – in vain. Later that year, Stalin initiated the purges. A year later, while in Moscow, Wang and Kang established

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the Office for the Elimination of Counterrevolutionaries, and cooperated with the NKVD purging Chinese in the city. Kang learned the methods and tactics of Soviet intelligence, boosting his communist credentials and party identity: a theoretician, a fighter, a spymaster. Hundreds of Chinese were tortured, many confessing to avoid unimaginable pain; then they were executed. Kang showed the party that spies, foreign agents and Trotskyites were serious threats. Kang did not touch Ching-kuo – the son of his archenemy, Chiang Kai-shek. Since 1924, as a student of the Sun Yat-sen University, he had been a virtual hostage of Stalin; he was finally released in April 1937. It was a goodwill gesture from Stalin to Chiang, showing the KMT regime that he would support them against Japan.4 In November 1937, while Nanking was about to fall to the Japanese, Stalin dispatched Wang and Kang to China aboard a Soviet plane. Their task was antagonistic to Mao: to boost the pro-Comintern Chinese cadre, and for Wang to claim the rule of party.5 Before boarding the plane, Kang told Li Lisan that he had to stay in Moscow for party work. He informed the NKVD that Li was a Trotskyite, hoping that he would be summarily executed; indeed, three months later Li was apprehended and accused of being a Trotskyite and a Japanese secret agent who wanted to kill Stalin. Kang did not inform the NKVD that Li Lisan was an elected member of the Central Committee of the CCP. When he told the NKVD interrogators his party rank, they informed Stalin, fearful of hurting a party member. Chou Enlai, who was in Moscow recuperating from an accident, put pressure on Stalin to release Li, who eventually returned to Yenan.6 Kang Sheng understood that Wang stood no chance of winning over Mao and implementing Moscow’s wishes. He sided with Mao, who needed to know all the plans of Wang and his supporters; he also wanted the Russian-speaking Kang to tell him what the Russians thought of him. Throughout the early 1940s, Kang feared that Mao would take revenge because he had previously sided with Wang. But Mao employed Kang as a terror spymaster tasked with purging the party on his behalf. Mao found that Kang had the same interests as him: classical Chinese culture, poetry, painting and calligraphy. In Yenan, the Comintern agent Pyotr Vladimirov realised that Kang was keeping him under close surveillance, blocking his meetings with the gradually isolated and politically weak Wang. Despite the fact that the Personnel Department

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of the Executive Committee of the Comintern (ECCI) informed the CCP that, among others, Kang should not be assigned a leadership role, in 1942 Mao employed the spymaster.7 At a time of terror and suspicion, Mao employed Kang Sheng and found himself exposed; he fell in love with Jiang Qing, a film actress from Shanghai. She was once arrested and interrogated by a notorious security officer, Hei Dahan. Wang Ming made an attempt to discredit Mao, at that time married to his third wife. Jiang was accused of being a bourgeois, and there were hints that she was a KMT spy. It was Kang Sheng who saved the day for Mao. Kang claimed that he knew her from the 1920s as the then head of the Organisation Department in Shanghai; he vouched for her integrity and said that she had not been turned. He had a way of ‘finding’ witnesses to back his claims. Mao’s critics retreated, and Kang gained a position closer to Mao, who had appointed him head of the Social Affairs Department (SAD), the central CCP espionage organisation. Mao married Jiang, but remained in the shadows, away from publicity, until 1960. Jiang Qing served as Mao’s personal secretary in the 1940s and played a pivotal role in the Cultural Revolution. She was one of the Gang of Four by the death of Mao. She was arrested in October 1976, and sentenced to death; her sentence was commuted, but she committed suicide by hanging herself in May 1991.8 A new, resourceful mole would offer vital intelligence to the CCP in the years to come. Xiong Xiang-hui was a young student who had secretly joined the CCP in 1936; a year later – under the direction of Chou Enlai – he joined the staff of General Hu Zongnan, one of Chiang Kai-shek’s loyal officers. Xiong would become the confidential secretary of the general for ten years, feeding secret intelligence to the CCP. The mole provided information on Hu’s campaigns against the Red Army and the fight for the defence of Shanghai and Wuhan. Later he was assigned the command of four hundred thousand troops to block the communist base in Shaanxi. Hu was close friend of Dai Li; thus Xiong also had access to intelligence about Juntong. It has been reported that Xiong sought to attract the attention of General Hu during their first meeting: unlike the other volunteers, he did not jump to attention as the rest when he heard his name; instead, he remained seated, answering calmly, ‘Here I am.’ Hu asked him why he wanted to join his army. ‘To make revolution,’ he said – to fight the Japanese.9

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In brief, the Rectification Campaign was Mao’s terror campaign against Wang and his supporters. The General Study Commission was formed in July 1942, chaired by Mao, to oversee the Campaign; Kang was his vice chairman, and effectively ran the whole scheme. Kang Sheng and his lieutenants copied the methods that Stalin used during the purge: unjustifiable arrests, extreme torture, false confessions and public trials leading to execution or imprisonment. The public trials boosted the false impression that Yenan was full of KMT, Japanese and Trotskyite spies. Wang lost his position of power, but escaped torture. Later he fell ill for a long time, and accused Mao and Kang of poisoning him with mercury – a claim that his Russian physician supported. Stalin was informed of Wang’s condition through the Red Army military intelligence. Dimitrov wrote in his diary (15 January 1943): ‘a report from Yan’an [Yenan] that Wang Ming is seriously ill. He needs treatment in Chengdu or in the USSR, but Mao Zedong and Kon Sin [Kang Sheng], supposedly do not want to let him leave Yan’an, for fear that he will give out unfavourable information about them. – Advised against the [Red Army] Intelligence Directorate representative’s interfering in these internal matters of the Chinese Communists’.10 A month later, on the directions of Stalin, Dimitrov told the Foreign Ministry ‘to apply to Soviet ambassador to China Paniushkin with instructions to work up an exit authorization from Chiang Kai-shek for Wang Ming to travel to the USSR.’11 Eventually, Wang sent Dimitrov a latter asking for help, only to receive a polite rebuke: ‘[With reference to] your party affairs, do your best to settle them yourselves. Intervening from here is for now inexpedient.’12 Dimitrov was always writing after the direction of Stalin himself. Ten days later he wrote a lengthy ‘personal’ letter to Mao, criticising him as a ‘friend’: ‘I consider politically incorrect the campaign being waged against Zhou [Chou] Enlai and Wang Ming, who are being incriminated with the Comintern-endorsed national front policy, as a result of which they have allegedly led the part to schism. Persons such as Zhou Enlai and Wang Ming must not be severed from the party. I am also disturbed by the fact that among certain party cadres there are unhealthy sentiments as regards the Soviet Union.’ Dimitrov wrote about Kang, the chief organiser of the purges: ‘The role being played by Kon Sin [Kang Sheng] also seems dubious to me. The implementation of such a correct party procedure as the purging of enemy elements from

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the party and its consolidation is being pursued by Kon Sin and his apparatus informs so misshapen that they are capable only of showing mutual suspicions, arousing the profound outrage of the rank-and-file party membership, and aiding the enemy it its efforts to demoralize the party.’ Most significantly, the Soviet military intelligence and the NKVD had intelligence to the effect of KMT secret operations: ‘As early as August this year [1943] we had received utterly reliable reports from Chongqing [Chungking] that the Guomindang [Kuomintang] had decided to sent its provocateurs to Yan’an [Yenan] with the aim of setting you at odds with Wang Ming and other party figures, as well as fomenting hostile sentiments against all persons who had lived and studied in Moscow. I warned you in good time about this treacherous intention on the part of the Guomindang. Their secret aim is to demoralize the Communist Party from within, to crush it all the more easily. I have no doubt that by his actions Kon Sin is playing right into the hands of these provocateurs.’13 Mao, now on the defensive, answered confidently on 10 January 1944, explaining that in July 1943 the CCP had been expecting a KMT attack and that only through ‘comprehensive measures’ had a confrontation been averted. In any case, ‘our policy and our measures will be designed to avoid armed clashes [with the KMT].’ The chairman of the CCP reassured Dimitrov, his ‘friend’, ‘Zhou Enlai and I are on very good terms. We have no intention of severing him from the party.’ Nonetheless, Wang Ming was not to be spared, because he had ‘engaged in diverse antiparty activities. All party cadres have been apprised of this. However, we are not planning to make this known to the party masses as a whole; still less are we planning to publish this for all the non-party masses. The examination of all of Wang Ming’s errors by senior party cadres has resulted in a still greater degree of consolidation and unity among those cadres’. He added, ‘I assure you and can vouch for the fact that Comrade Stalin and the Soviet Union enjoy the love and great respect of the Communist Party of China’. ‘In my view’ – here, Mao sounded confident and confrontational with Stalin – ‘Wang Ming is unreliable. Wang Ming was arrested before in Shanghai. Several people have stated that while he was in prison, he admitted belonging to the communist party. He was later released. There has also been talk of his dubious connection with [Pavel] Mif. Wang Ming has engaged in extensive antiparty activities.’ Mikhail Aleksandrovich Fortus, aka Pavel

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Mif, was rector of Sun Yat-sen University; he was executed in the purges of the 1930s. Mao implied that Wang had given secret party information to his KMT interrogators, who eventually released him, hinting that he could be under their control. It was another insult to Stalin – Wang, his Marxist theoretician being suspected of spying.14 Mao defended Kang as reliable, commenting that ‘the checking of cadres is not being performed by his apparatus. They are responsible for dealing only with a portion of the spies. We have performed a comprehensive and thorough checking of cadres.’15 Eventually Chou Enlai, Nie Rongzhen and Ye Jianying convinced Mao that Kang needed to be sacked. In April 1945, Kang was replaced as head of both the SAD and the Military Intelligence Department. He was assigned to land reform, where he also proved himself a cruel administrator ready for atrocities.16 Liu Geping worked as an intelligence officer for Kang in his land reform scheme; many believe that he was a turned-mole of the KMT after his earlier arrest and release.17 Li Kenong, until then Kang’s deputy, was supported by Chou Enlai, and took over as acting head of the SAD and the Central Committee’s Intelligence Department (ID). Mao appointed Wang to the Central Committee in the 7th National Congress in order to appease Stalin. After all, he had now consolidated his rule in the party, and Wang’s supporters were all either isolated or imprisoned. Wang was made responsible for policy research and legislation. After 1949, the politically weak Wang was elected Director of the Central Legal Committee of the CCP and the Central People’s Government. Mao allowed him to go to Moscow for medical reasons, but essentially Wang escaped there. He stayed in Moscow, where he denounced the CCP, dying there years later in 1974.

CHAPTER 11 MURDEROUS INTRIGUES

‘A year later [1946] in Washington, when I was in the State Department, I received a telephone call from a young woman in New York who said: “You don’t know me, but we have a mutual friend. Joy asked me to call you to say good-bye for her because she is dying.” A few days later I saw her obituary in the New York Times.’ Thus wrote Oliver J. Caldwell, a former OSS captain, in his memoirs. Joy’s death was the conclusion of an OSS counterintelligence operation against Chinese spies of Dai Li, in New Delhi, in 1945.1 Throughout the war, the OSS and the Chinese secret services confronted each other bitterly. US agents were shadowed and attacked, while Chiang and General Stilwell hated each other; Roosevelt once told Stilwell to plan for the assassination of the generalissimo. This chapter explores the hidden war within the secret war for China. Before the war, Oliver J. Caldwell was an English professor of the Universities of Amoy and Nanking; he was born and raised in China in a family of missionaries. In 1943, Caldwell, a fluent Mandarin-speaker, joined the military and the OSS in China. Caldwell joined a Moral Operations of the OSS in China in October 1944. He was transferred from China to India in the rear echelon headquarters of the XY Force. His base was New Delhi. He worked with seven female OSS agents – his ‘lionesses’, he called them. Their relations were of poor antagonism: ‘three of them of equal rank had been taking turns fighting each other for the responsibility of heading the unit. Under them, in widely scattered outposts in China, Burma, and India, were a number of other small units, three of which were commanded by

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elderly majors who got tired of the treatment they were getting from the girls and demanded that a male officer take over’.2 During the winter of 1944– 1945, the headquarters in New Delhi noted breaches of security involving Chinese officers in the city. The Chinese had been pressing their US counterparts to be provided with operations plans, but once they had been provided with them the Japanese forces were behaving as if they had access to the plans. Obviously, some Chinese officers were working for them. Caldwell was told to find the source of the leaks; since he spoke Chinese, he was deemed the ablest officer for this special assignment. He chose two agents of his unit to help him in this. Joy was ‘tall, fair, handsome, and about twenty-seven; Rosemary was short, dark, vivacious, pretty, and about twenty-four. Both spoke excellent Mandarin.’3 In Calcutta, the OSS was in a secret war with the Juntong of Dai Li. Two Chinese refugee sisters from Malaya were judged to be double agents of Dai Li and the Japanese, spying on American officers. By early 1945, the older sister married a businessman. OSS agents discovered that she was making purchases of electrical components for a radio set. Her younger sister was nineteen years old and dated OSS personnel from the headquarters. ‘She showed a preference for men connected with communications’, Caldwell remarked.4 When he returned to New Delhi, Caldwell was informed that the woman was given military information from one of the men she was dating. Afterwards, OSS agents shadowed her and discovered that she went to her sister’s house. Many feared that she was communicating intelligence to the Japanese. Another piece of information was that this woman was engaged with a US Army major. Caldwell had to tell the ‘nice, open-faced, innocent, young man’ that his fiance´ was a spy. Initially he refused to believe this. Caldwell put strong pressure on him; he had to organise a party that Caldwell, Joy and Rosemary would attend and closely watch her and her sister. He was certain that the sisters were in contact with an officer from the Chinese embassy.5 Caldwell described the atmosphere in the spies’ reception: ‘the girls and I were miserable. A number of other Americans present knew what was happening, and the result was very heavy drinking as people tried to forget what was about to happen to a beautiful, young woman who was suspected of being a spy. A Chinese major general from the embassy, a Tai Li (Dai Li) man, was one of the suspects. He led the girl to a sofa in

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front of a fireplace and they sat there talking. I sidled over and sat on the other end of the sofa and leaned back, pretending that I was taking a nap. All I heard was a long lecture from the elderly general on the evils of sexual frustration, and finally a proposition to the girl. Thereupon she started to laugh and leaned over and kissed me on the cheek, then left both the general and me on the sofa. I assumed that she was telling me she knew I was a plant, an American intelligence agent. Shortly after this, the party broke up and the girl disappeared.’ The spy had escaped.6 In the coming days Caldwell and his two agents realised that the Chinese secret agents wanted to scare them. Joy and Rosemary played tennis at the Chinese embassy. The military attache´ told them that he knew that they had made a bid to trap and arrest a secret agent of his, the girl. Caldwell had to address their fear for their lives. They wanted to be armed, but the OSS prohibited this. Caldwell himself did not bother to follow regulations. ‘I slept with my door locked and a .45 under my pillow. By day, I carried a .32 in a shoulder holster under my jacket’.7 A week later, on a Sunday night, Caldwell was about to go to sleep when, at about 11pm, he heard Joy’s faint voice as she cried for help. He opened the door only to find her covered in her own blood. Someone had hit her in the back of her head, and ‘there were cuts on her face; and both hands and arms were badly cut.’ Asking her what happened, she whispered that while she was walking from her quarters, a car had driven behind her at high speed; she had tried to avoid it, falling over the side of the road. Then the car approached her. A man who was sitting on the passenger’s seat hit her with a black jack in the back of her head. Few moments later the driver reversed gear so as to roll over her. While she lay wounded, she rolled out the way and took a broken glass lying on the street. Then the car stopped, and a man holding a pistol walked toward her. The headlights of another car shone on them, and he rushed to his car to escape. Joy saw clearly that the car of her assailants was a Zephyr sedan; it was the car of one Chinese military attache´. The man with the pistol was the attache´ himself, whom Joy and Caldwell both knew. He had not bothered to hide his features.8 After she talked to Caldwell she fell into a coma, which lasted for weeks, and then had trouble speaking. She was sent back to the United States to be joined by her husband, who was an OSS officer working in Europe. The agents of Dai Li were responsible for her deteriorating

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health and for the comas she suffered until her death in 1946.9 There is no doubt that the allied secret services were never in an alliance with the Chinese services, which were interested only in preserving Chiang’s rule and in preparing to fight the communists. Few Chinese in the KMT-held areas were friendly to the OSS. Caldwell narrated episodes of bandits and regular soldiers attacking US military convoys or US personnel on the streets of Chungking and other cities. ‘American convoys were frequently molested by both uniformed troops and civilians in 1944– 45. Sometimes a number of bandits in plain clothes, with their weapons under their coats, clustered innocently in the road, when a bus or truck approached, the guns would appear and the shooting would start.’10 In another episode of secret war the Chinese made an attempt to abduct a US colonel responsible for intelligence in the 20th Bomber Command Air Force headquarters in Calcutta. The Americans avoided disclosing the details of bomber missions against Japan; they had understood that the Chinese were somehow leaking them to the Japanese. On at least one occasion the pre-knowledge of the Chinese of bombing missions cost in severe US air crew casualties; the Japanese fighters attacked them over the Yellow Sea. It was as if the Japanese knew exactly where and when to locate their opponent.11 One evening the colonel was stopped on the road by a man jumping out of a car; he was threatened with a pistol and blindfolded and led into the back seat. For a moment, he could see his assailants. One of them had an ‘Oxford accent’. The colonel recognised the voice and accent of a Chinese major or Juntong in Calcutta. The colonel concluded that they wanted to take him to a safe house to interrogate him. He had to escape because after the interrogation they would kill him. His hands were tied in the back, but with his shoulder he managed to press on the door lever and fell on the street. The car stopped. The Chinese got out, but he turned his ankle and did not come after the colonel.12 An OSS sergeant in the city was attacked by a Chinese holding a knife; he killed him with his pistol. An OSS major just avoided a blow with a knife around a dark corner. He grabbed the man’s hand, but the assailant quickly escaped.13 It was a war of the US services with the KMT spies and assassins. OSS Lieutenant Colonel George H. White, a former journalist and law enforcement agent in pre-war San Francisco and Los Angeles, had concluded that 50 per cent of the literate Chinese in Calcutta worked for Chinese intelligence agencies.14

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Chiang gathered as much military aid as possible from the Americans, who had assumed that it was vital for him to fight the Japanese. But this was not the case; he wanted to preserve his rule and fight the communists. The aid was dispersed among black market networks supporting the nationalist government. OSS and other US and British military personnel witnessed this, as well as that Chiang traded with the Japanese. Caldwell remembered: ‘Chiang’s government was sending foodstuffs which the country could not spare through certain carefully pre-served channels to the Japanese army, which repaid him with automobiles, machinery, and luxury goods.’15 The anti-West chauvinism of Chiang’s regime was kept secret from US military personnel and the public. Indeed, Chiang’s book about his principles and beliefs was published in English and sent to the US only after the war. Caldwell, who had served as an instructor at the National Central Political Training Institute, a cadre school, discovered the brainwashing with Chiang’s principles: ‘Chiang Kai-shek is our Leader and we owe him absolute obedience. There can be no opposition whatsoever to the Generalissimo and his government. The Chinese are the only racially pure people in the world, a chosen people who in recent years, through no fault of their own, have fallen on evil times. The evils which China has suffered are the gift of the West to China. Western civilization is fundamentally inferior to that of China because the Chinese possess superior spiritual values unknown to the materialistic West . . . When the Chinese nation is once again strong, she will eliminate Western influences, and will demand the return of her ancient territories.’16 It was only a matter of time before a hard-nosed, undiplomatic and frustrated general came to blows with Chiang. That person was Lieutenant General Joseph Stilwell or ‘Vinegar Joe’. Usually nicknames disclose some real features of someone’s character. Officers and troops tried to enjoy, or endure, Stilwell’s famed caustic remarks. Nonetheless, when the White House and the Department of War examined his dispatch to China, no one worried about his attitude. Vinegar Joe Stilwell became the first US commander to lead Chinese ground forces, becoming chief of staff of Chiang Kai-shek. Tall, with ‘a deceptive appearance of a physical fragility’, this 1904 graduate of West Point would not prove himself adept at dealing with the Chinese. He had served in the Philippines and during World War I in France, where as an intelligence officer, he contributed to the planning of the St Michel

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offensive in September 1918. By the early 1940s his credentials for working in China were superior to other officers of the same rank. Besides, he had served as language officer from 1920 to 1923, as officer of the 15th Infantry in Tientsin from 1926 to 1929 (the time of Chiang Kai-shek’s rise to power), as Military Attache´ from 1935 to 1939 (the time of Japanese invasion) and lastly as theatre commander in World War II.17 In May 1942, the fall of Burma had a severe impact on Stilwell’s and Chiang’s relations. The generalissimo blamed Stilwell of abandoning his best Chinese troops in Burma, and wanted more supplies to continue fighting. London had a ‘Europe first’ strategy and did not put more resources in the Burma theatre. Stilwell informed Roosevelt that Chiang was hesitant because he was conserving resources for his confrontation with the CCP once the war was finished. He was also angry with the corruption of the KMT regime. In August 1943 the South East Asia Command was established under Vice Admiral Lord Louis Mountbatten, with Stilwell appointed Deputy Supreme Allied Commander. Stilwell himself launched an attack against North Burma. The siege of the Burmese city of Myitkyina lasted from April until August, costing heavy casualties in allied troops. The city was overrun in August. Stilwell insisted on a campaign in Burma while General Claire Lee Chennault, the commander of the famed Flying Tigers and later air force commander of the 14th Air Force, aimed for an air offensive against the Japanese in China, occupying forward bases. Chiang was hesitant to venture against the Japanese in Burma and wanted air bombing of Japan. Nonetheless, in 1944, the Japanese counter-offensive codenamed ‘Operation Ichigo’ overran Chennault’s forward air bases. General Stilwell ridiculed Chiang Kai-shek: ‘ Peanut is really no dictator. He issues an order. Everybody bows and says “sure”. But nobody does anything.’18 The general was in bad terms with the Chinese staff officers. Stilwell was sarcastic of one general Liu Fei: ‘Liu Fei to educate me: 2½ house of pure crap. I’d like to push him off a dock.’ ‘Gems of thought by Liu Fei No. 2 in the Board of Military Operations, a cadaverous bird who needs a haircut. Takes himself seriously, very seriously. Never out of character, always the brilliant staff adviser, always in deep thought, every idea profound and thoroughly thought out. Knows everything. Nobody else knows anything.’ Liu advised that no new offence be undertaken. Stilwell wrote in his diary ‘the Jap

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occupation of Canton [according to Liu] is a point. They have control of sea, so we can’t attack them. The Jap occupation of the Yangtze is a line. They have ships and planes, so we can’t cut it. The Jap occupation of the north is an area. It is all spread out, so we can’t attack that, either.’19 Stilwell would never have imagined that Liu would retain his position of planner and by the end of the civil war would leak plans to Chinese communist commanders to defeat the KMT.20 General Stilwell attended the conference with Roosevelt, Churchill and generalissimo in Cairo. Upon his return to China on 11 December 1943 he told his deputy, General Dorn, that Roosevelt had given the order ‘to prepare a plan for the assassination of Chiang Kai-shek.’ Stilwell told Dorn that the order came from the ‘Big Boy’, who told him ‘in that Olympian manner of his: “if you can’t get along with Chiang and can’t replace him, get rid of him once and for all. You know what I mean. Put in someone you can manage.”’ Stilwell told Dorn to ‘cook up’ a plan, and two other officers worked on this. The plan involved a mechanical failure during a flight, during which Chiang would be given a faulty parachute. Stilwell commented, ‘I believe it would work. When orders come from the top, we have no choice.’ According to Colonel Carl F. Eifler, the senior OSS officer in the China –Burma –India Theatre between early August and the end of October 1943, he met with Stilwell, who made a suspicious remark; in order for him to pursue the war ‘in a logical way it would be necessary to get Chiang Kai-shek out of the way.’ Eifler was asked to submit a plan. Stilwell did not mention Roosevelt or any other official having ordered this. In Washington, Eifler examined whether botulinus toxin could be used to murder Chiang. But when, in May 1944, Eifler presented Stilwell with a method of murder, the latter told him ‘that he had had second thoughts about it and had decided against doing it “at this time.”’ In Cairo, Roosevelt and Chiang had agreed on a unity government with the CCP; meanwhile Roosevelt pressed Churchill for British naval support for the Burma campaign. Why would Roosevelt want to murder Chiang, especially when there was no recognised figure to succeed him? It seems probable that Stilwell, always eager to show his obedience, lethally misconstrued Roosevelt’s every comment.21 In any case, Stilwell had made it plain that the ‘choice’ for replacing Chiang Kai-shek was General Pai Chung-hi.22 In central China in April 1944, the Japanese offensive Operation ‘Ichigo’ led to the occupation of Changsha and Luoyang. By June,

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the Japanese forces had advanced toward Hengyang, a strategic point, and the nationalist forces were not able to pose any significant resistance despite the fact that they had been receiving a large amount of war aid from the United States. Stilwell and Marshall eventually agreed to a strong demand for Chiang to assign the former all his forces. On 7 July Roosevelt signed a document requiring that the generalissimo authorise Stilwell to ‘coordinate all the Allied military resources in China, including the Communist forces’ and that Stilwell, a four-star general, be assigned the command of all Chinese and US forces.23 Chiang wrote in his diary ‘Why is God sending us such extreme punishment?’, quoting James 1:12–13: ‘Blessed is the man that endureth temptation: for when he is tried, he shall receive the crown of life, which the Lord hath promised to them that love him. Let no man say when he is tempted, I am tempted of God: for God cannot be tempted with evil, neither tempteth he any man’. He added, ‘This is the instruction God has given me. How can [I] not encourage myself [to follow it]?”24 Chiang believed that God wanted him to become moderate. He thus replied that he agreed ‘in principle’, asking for a ‘preparatory period’ to organise Stilwell’s command. He added that he wished for an ‘influential person’ to be send to China to ‘adjust the relations’ between himself and Stilwell, ‘so as to enhance the cooperation between China and America.’25 Donovan informed Roosevelt: ‘From many sources come reports that the Generalissimo has been under great strain during the past few weeks, some even saying that he has been “half crazy”’. The Generalissimo was obsessed with foreign criticism of his regime and US military aid and his relations with General Stilwell. Donovan transferred to the president ‘a flood of rumors of Russian plans transporting “large quantities of munitions” to Yenan.’26 Stalin did not help Mao during this period, and there was no credible intelligence about it. Nonetheless, Donovan accepted to report the rumour. He recommended that Washington ‘show a sympathetic interest in the Communists and liberal groups in China. Try to fit the Communists into the war against Japan.’27 In another report to Roosevelt, Donovan stated that Chinese generals were not willing to defend Changsha or Changteh from the Japanese advance, which had gained momentum.28 Chiang cabled Vice Premier of the Executive Yuan Kong Xiangxi (H.H. Kung), who was in Washington, to ask him to tell Roosevelt that

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it was wrong for Stilwell to be assigned such a command and that the US should ally itself with Mao and the communists in the struggle against Japan. Chiang played for time, remarking in his diary, ‘God gave me the revelation of moderation and promised me blessings after perseverance. My heart, feels no anxiety.’29 He wrote: ‘As various adversities and defeats come, [I can] respond only with perseverance and firmness. I leave success or failure to heaven’s mandate. [I am] thoroughly convinced that God is intelligent and would not leave me in such adversity for long without mercy.’30 On 11 July, H.H. Kung visited the White House and consulted with the president; but Roosevelt did not understand the indirect Kung, and told him that he was planning to find a special emissary. Kung cabled back to Chiang, misinterpreting Roosevelt, wrongly conveying that the president understood the position of the generalissimo. But Roosevelt soon followed up, demanding without delay the transfer of command to Stilwell. In his diary entries, the angry Chiang pleaded for God’s aid. In an entry on 16 July, he wrote, ‘Such extremely harsh, unreasonable American imperialism is completely unexpected. He [Roosevelt] does not even permit me to have a little time to consider and has determined to assign Stilwell as the commander of the China Theater to control my country. What an [unreasonable] matter!’31 Chiang was certain: ‘The Heavenly Father is intelligent and will surely get rid of this unreasonable threat from the United States and turn [this matter] from danger to safety. All glory to the Heavenly Father.’ ‘However,’ he went on, ‘without [our insistence on] self-reliance and patience [in international politics], the Heavenly Father would not grant His grace to the people.’32 He was desperate: ‘Heavenly Father, I have thrust myself into a trap. Darkness is all around me, and my whole body is covered with wounds. If [You] don’t extend your saving grace and mercy to me, I am afraid that I will fail to carry out the mission that You assigned to me, and I will be in disgrace forever.’33 Chiang delayed giving Stilwell the command he claimed. H.H. Kung again was directed to tell Roosevelt that this had to take time. The generalissimo believed in the revelatory power of dreams and omens. He wrote in his diary on 26 and 27 July that he had dreamed of a sun break; he deemed this a ‘good omen’, and felt that it meant that God was preparing him for glory.34 Generally, Chiang took the US stance as a

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more serious threat to his rule than the Japanese, who at that time laid siege on Hengyang. Chiang promised that if the KMT troops survived and won, he would ask them to baptised. The defenders had 80 per cent casualties, and by 8 August the Japanese had won. Chiang admitted that false intelligence led him to fail to prepare orders for defence. Roosevelt cabled Chiang that retired General Patrick Hurley would be his special envoy. At this point, witnessing defeat at Hengyang, Chiang gave Stilwell the authority to command and train his troops. On 14 August he cabled Roosevelt to say that he was making arrangements for Stilwell to become ‘chief of staff and concurrently commander in chief of the Sino– American Allied Field Forces of the China Theater.’ The president demanded a quick transfer of command. Stilwell would be ‘field commander of the ground and air forces of the Republic of China’ authorised by National Military Council ‘to direct Chinese army and air force units in fighting the Japanese,’ ‘prepare plans of operation’, and ‘exercise the right of rewarding, punishing, appointing and dismissing officers.’ Chiang wanted to keep the administration of Lend– Lease aid to China.35 In September 1944, a new Japanese offensive in Guizhou, threatening the US air bases in Guilin and Liuzhou, increased the pressure on Chiang to hand over the command. Stilwell assumed that this was the best time to further press his case; he argued that the Chinese nationalist forces of General Hu Zongnan, who were assigned against Mao’s communists, should be used against the Japanese. Of course this was an anathema for Chiang. Stilwell informed Marshall; Roosevelt, once informed, penned another message. In his turn, Roosevelt was convinced by Stilwell’s reporting that the Chinese were not doing anything against the Japanese. A letter he sent Chiang on 16 September 1944 created a fait accompli: ‘we feel that unless they [your troops] are reinforced and supported with your every capacity you cannot expect to reap any fruits from their sacrifices, which will be valueless unless they go on to assist in opening the Burma Road. Furthermore, any pause in your attack across the Salween (River in Burma) or suggestion of withdrawal is exactly what the Jap has been striving to cause you to do by his operations in eastern China. He knows that if you continue to attack, cooperating with Mountbatten’s coming offensive, the land line to China will be opened early in 1945 and the continued resistance of China and maintenance of your control will be

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assured. On the other hand, if you do not provide manpower for your divisions in north Burma and, if you fail to send reinforcements to the Salween forces and withdraw these armies, we will lose all chance of opening land communications with China and immediately jeopardize the air route over the Hump. For this you must yourself be prepared to accept the consequences and assume the personal responsibility. I have urged time and again in recent months that you take drastic action to resist the disaster which has been moving closer to China and to you. Now, when you have not yet placed General Stilwell in command of all forces in China, we are faced with the loss of a critical area in east China with possible catastrophic consequences . . . I am certain that the only thing you can now do in an attempt to prevent the Jap from achieving his objectives in China is to reinforce your Salween armies immediately and press their offensive, while at once placing General Stilwell in unrestricted command of all your forces. The action I am asking you to take will fortify us in our decision and in the continued efforts the United States proposes to take to maintain and increase our aid to you. This we are doing when we are fighting two other great campaigns in Europe and across the Pacific. I trust that your far-sighted vision, which has guided and inspired your people in this war, will realise the necessity for immediate action. In this message I have expressed my thoughts with complete frankness because it appears plainly evident to all of us here that all your and our efforts to save China are to be lost by further delays.’ After reading the message, the Generalissimo remarked quietly, ‘I understand.’36 Once alone with his brother-in-law T.V. Soong, Chiang burst into ‘compulsive and stormy sobbing’, blaming Stilwell for this message. He gave orders for a reply to Roosevelt to be drafted. In his diary he wrote that this message was ‘the most severe humiliation I have ever had in my life’, adding that if Stilwell ‘did not show due diligence, his life could be in danger at any time and any place.’37 The generalissimo hinted that Stilwell could have ‘an accident’ in Chungking if he wished it. Chiang wrote in his diary: ‘[I] received his [Roosevelt’s] telegram of September 18. The attitude and spirit of this telegram are abominable and the language is most absurd. If this can be endured, what cannot? . . . Why has God put me in such disgrace and misery? . . . Stilwell came after five o’clock and personally handed Roosevelt’s telegram to me. This is the most disgraceful event in my life, and it is also the worst national disgrace in recent times.’38

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‘[The moment I received] Roosevelt’s September 18 telegram to me was the most shameful and difficult to bear.’39 ‘How did China come to such extreme misery and adversity? Heavenly Father, I earnestly pray for your prompt rescue.’40 Chiang wrote in his diary that God wanted him to avoid a confrontation with Stilwell.41 Chiang convinced Ambassador Hurley that Stilwell was the problem. The envoy asked for the general to be recalled.42 Waiting for Roosevelt’s reply, Chiang wrote in his diary on 15 October, ‘It is possible to complete the removal of Stilwell. This is crucial to the success of U.S.– China relations; it is a matter of life and death for China. If it succeeds, it will be another revelation of God’s glory. From now on, how can I abandon caution and spur myself on?’43 When he was informed of the recall of Stilwell, the joyful Chiang wrote in his diary, ‘I rely on the Holy Spirit’s protection and guidance from time to time. That is why I can endure this matter to such an extent. Now I have obtained salvation and escaped from death. Without God’s strength, I definitely would not have gotten through this great calamity.’44 Stilwell would lose his position in China and return quietly to Washington. He was criticised by the Department of War for the heavy casualties of US forces in Burma as well as for his continuous arguing with the British and Chinese commanders. Chiang accepted the mildmannered, sophisticated General Albert C. Wedemeyer as his adviser and commander of the allied forces in China. A total war preparation strategist in the 1930s, Wedemeyer attended the German war college Kriegsakademie, in Berlin, in 1936–8, and observed Wehrmacht tactical manoeuvres. In 1941 he drafted the ‘Victory Program’ for defeat of the Wehrmacht in Europe; later he was involved in the planning of the Normandy invasion. On 27 October 1944, Marshall ordered General Wedemeyer to assume command of US forces; he was to be named Chief of Staff to Chiang Kai-shek. Like his predecessor, he wanted the nationalist armies better equipped to take the offensive against Japan. Nonetheless, on 7 December 1945, when the war was over and intelligence from Manchuria was purring to the effect that the Chinese Red Army was moving in, Wedemeyer, General Douglas MacArthur and Navy Admiral Raymond A. Spruance – the three top US commanders in the Far East theatre – requested that Washington authorise the transport of six more Chinese Nationalist armies into North China and Manchuria.45

CHAPTER 12 THE ANTAGONISTS

November 1944: after three years of the Pacific War, Stuart Menzies, the angry ‘C’ of the SIS, wanted ‘the complete removal of [Captain] Miles and his organisation’ from China. But, together with Miles’s other antagonists, he failed to achieve the recall of this pro-Dai Li officer.1 Mountbatten wrote to Wedemeyer, ‘it has been made clear to me by the heads of the British clandestine services in the UK that Commodore Miles is persona non grata. So long as this officer controls clandestine activities in China therefore, I fear it will be difficult, if not impossible, for me to persuade the British clandestine organisations to accept the correlation of British and American activities which I have suggested to you.’2 Miles, supported by Admirals Leahy and King, had created a special relationship with Dai Li, which was exploited by the Chinese against the US military in China. Indeed, Caldwell, an OSS captain, remarked, ‘the Navy contingent [in China] had expanded in odd directions. It had a camel corps in Chinese Turkestan, for what logical reason it would be hard to guess. It had outposts in Outer Mongolia, why I cannot pretend to know, and no one in Death Valley ever gave a logical explanation. It had outposts all over the place, always secretive, always dominated by Tai Li (Dai Li), and not under the command of the man who was supposed to be the supreme American commander in China. In his (post war) book, Miles makes a good case for the work of the weather stations and other special groups scattered across China under his command.’3 US Navy Captain Milton E. Miles (later a Vice Admiral), was commander of Naval Group China (NGC); he cooperated with Dai Li and promoted a US agreement that provided training and supplies to

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Chinese nationalist guerrilla forces. The agreement for the Sino – American Special Technical Cooperative Organisation/Sino– American Cooperative Organisation (SACO), was signed by the Republic of China and the United States in 1942. Miles won over Donovan of the OSS and the US Army. Milton Edward Miles was Dai Li’s loyal ally. Born 1900, he entered the Navy in 1917, as an apprentice seaman, and then from 1918 to 1922 served as a cadet in the United States Naval Academy. As an ensign, he served in the Asiatic Fleet, and in 1927– 9 he studied at the Naval Postgraduate School and completed a Master of Science at Columbia University. Subsequently, he served as an electrical officer aboard the aircraft carrier USS Saratoga and at the Navy Department’s Bureau of Engineering. In the late 1930s he served on a destroyer. In the years 1939–42 he had a desk assignment in the Navy Department Interior Control Board. He had no experience in China. Dai Li offered 50,000 troops, to be trained by the United States, to be employed as guerrillas in Japanese-held territories, and for coastwatching. Along with technical assistance, Juntong and Zhongtong received advice from former and current FBI and Secret Service and Treasury agents as well as New York City Police bomb squad experts. They trained high-rank Juntong agents in weapons, lie detectors, police dog handling, shackles, truth serum, ballistic analysis, surveillance and interrogation methods. Miles later admitted that in the ‘Happy Valley’ training camp: ‘we were never able to separate the police activities from guerrilla activities.’ The State Department and the OSS made a bid to block the creation of an FBI school for the Chinese out of fear that the US was siding with Chiang in the suppression of the communists. The officials were clear: all of it was ‘a blatant attempt on the part of Dai Li to secure American sanction of the Guomindang’s (KMT) internal political repression.’ The training group designation changed from ‘Police Unit’ to ‘Counter-espionage Unit’. Donovan put pressure on Miles for ‘the function of this unit should be as far as practicable directed against the enemy’s activities.’4 Episodes of threats or attempted killing did occur in the training camp. On two occasions a Russell’s viper was found in a room of OSS instructors; this type of snake never appeared in this location – at least this was what a university herpetologist concluded. The viper was found after US personnel saved a Chinese soldier bitten by a similar snake.

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Dai Li seemed embarrassed, and it took him some time to thank the Americans. His gift was the snake found at the OSS room. If the instructor was bitten it would be assumed that it was ‘an accident’.5 ‘I first became aware of the existence of SACO when I noticed that groups of US Navy men occasionally appeared on the streets of Chungking, then mysteriously disappeared . . . they were cloak and dagger boys’ wrote Caldwell. In any case, Radio Tokyo was aware of the existence of the Happy Valley or Death Valley camp, where Americans trained the nationalist commandos. Caldwell concluded that it was Dai Li who had leaked this. One night Radio Tokyo broadcast a list of names of senior US army personnel serving in the camp. Indeed, ‘there was abundant circumstantial evidence indicating a direct tie-up between Tai Li’s (Dai Li’s) organisation and Japanese intelligence. Much of my time during 1944 and 1945 was spent in an effort to identify for our own intelligence people the individuals in Tai Li’s Secret Military Police who were working in China and in India for the Japanese.’6 ‘Wild Bill’ Donovan was exploring schemes of cooperating in joint guerrilla operations against the Japanese. Donovan was brave but not evasive or ruthless like Dai Li. He had received the Medal of Honor fighting near Landres-et-St. Georges in France on 14–15 October 1918. According to the citation: ‘Lt. Col. Donovan personally led the assaulting wave in an attack upon a very strongly organised position, and when our troops were suffering heavy casualties he encouraged all near him by his example, moving among his men in exposed positions, reorganizing decimated platoons, and accompanying them forward in attacks. When he was wounded in the leg by machine-gun bullets, he refused to be evacuated and continued with his unit until it withdrew to a less exposed position.’7 Donovan valued expediency and wanted to have contact with the communist guerrillas for joint operations against the Japanese. He had drafted the ‘Dragon Plan’ for operations in China with the cooperation of the British, but this was not approved by the War Department. He asked the head of the OSS in Chungking, Major Coughlin, to ‘obtain detailed information from the various camp commanders of SACO as to the organisation and quality of Chinese troops with whom they are working and have your studies include those who are in the Chinese area.’ In their first meeting, on 2 December 1943, the head of the OSS and Dai Li crossed swords. Caldwell described the head of the Juntong as ‘a past

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master at capitalizing on American weaknesses, chiefly wine and women. Donovan’s visit was celebrated by a banquet in which much wine was drunk, with the host always poised like a hawk to take advantage of any indiscretions on the part of his guests. That was the Tai Li technique, which he sometimes used to great effect.’8 The usual trick was to prepare drinks in different bottles. The Chinese wine had low alcohol. But the Chinese, who were obsessed that the Americans and British were future enemies and that information had to be extracted from them by any means possible, mixed their wine with mao tai or paigarh ‘distilled from fermented sorghum, or some other terrific potion for the soft rice wine that was customarily served at dinners. The hard liquor could be 150 proof compared to about 10 per cent alcohol in the wine.’9 Donovan demanded more cooperation – otherwise he would arrange for the OSS to operate in China independently. He remained sober, saying, ‘I am going to have the OSS run the way I want it, with no interference from you or anybody else! General, I want you to know that I am going to send my men into China whether you like it or not. I know that you can have them murdered one by one, but I want you to know that will not deter me.’10 Dai Li said that he would kill any US agent operating outside the SACO. Donovan hit back, threatening that in that case ten Chinese agents would be killed by the OSS. This was hardly a conversation of allied secret service chiefs.11 A close study of the available sources reveals that Donovan contradicted himself about Dai Li. He once characterized him ‘a mediocre policeman with medieval ideas of intelligence work.’12 On another occasion Donovan described Dai Li to Lord Mountbatten as a ‘fabulously sinister figure, a blend of Himmler and the once-popular movie villain, the Insidious Dr. Fu Man Chu.’13 In fact, Dai Li had ordered the execution of Chinese OSS agents, but he did not boast about it.14 The next day Donovan was told by Chiang himself, ‘We expect you Americans to behave in the same manner as you would expect allied to behave in your country. You do not expect a secret service from another country to go into the United States and start operations. You would object seriously. Likewise, we Chinese object to a foreign secret service or an intelligence service coming into China and working without the knowledge of the Chinese. Remember that this is a sovereign country and please conduct yourselves accordingly.’15 What Donovan was asking – contact with the communists – was an

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anathema for Chiang, who eventually allowed US officers to be sent to Yenan as observers, but insisted that no joint guerrilla activity against the Japanese be organised. In June 1944, Donovan was clear to Roosevelt: ‘under [SACO’s] terms we were admitted to China in April 1942, but only as subordinate partners of General Dai Li’s Chinese intelligence service . . . For General Dai, SACO was an opportunity to receive material support and assurance that if OSS must be accepted in China, at least activities would be under his own control and constant surveillance.’16 Soon, Lieutenant General Adrian Carton de Wiart, the personal emissary of Churchill in Chungking, considered Miles ‘Britain’s public enemy number one in the Far East’. John Keswick, the head of the SOE’s China Commando Group, sounded ‘very bitter’ about the US admiral.17 Miles naively assumed that good personal relations and rapport with a spymaster could be a substitute for spying. On 19 December 1942, he wrote to Dai Li that he was critical of American ‘old China hands’ and espionage: ‘They do not think of China as a full-fledged nation just the same as the United States. They think that spying is necessary to get information from the Chinese for the United States. It is one of my main purposes in this job to guard the China that I am very fond of from being “infected” with this type of foreigner. I am very critical of persons that have this attitude. If any such attitude exists in any of my men I wish to send them home immediately. Colonel Donovan promised me that if any person that he sent out was not up to my standard I could return him. I am particularly on the lookout against “Old China Hands” for whom I have a well-founded dislike.’18 Meanwhile, in Chungking, John King Fairbank was an agent for the Secret Intelligence Branch of the OSS, gathering intelligence from a network of Chinese officials. He was a history professor at Harvard – the university’s first sinologist. In 1932, he travelled to China and studied at the Tsinghua University in Peking under the eminent historian Tsiang Tingfu. In 1942 he enlisted, and he was quickly recruited by the OSS as an area expert. After the end of World War II he returned to Harvard and was one of the first academics who warned that Mao would win over Chiang Kai-shek and that Washington should recognise the new regime. Fairbank taught at Harvard until 1977, and in his honour the university created the Fairbank Center for Chinese Studies, a post-graduate research centre.19

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Fairbank worked under the cover of many titles in the embassy. Ostensibly, Dai Li did not know that he was working for the OSS. In late 1943, Major Hoffman of the OSS, sent by Donovan as his personal representative, was critical of Fairbank and his team, liaising with the Institute of International Relations. Hoffman was clear: ‘I cabled Dr. Langer [Fairbank’s boss in Washington], that if Mr. Fairbank was connected with OSS in any capacity, it would seriously affect our relations with the Chinese. The unfavourable reports received on Mr. Fairbank were not from SACO Chinese but from Chinese officialdom outside of SACO.’ Hoffman was worried that the institute had been penetrated by communist spies.20 Miles wrote in a letter dated 1 August 1943: ‘Fairbank was our local man out here whose business I don’t know what it is, except that he is concurrently the IDC [collection of open publications] man, the Library of Congress man, the Cultural relations man, and in his spare time he snoops.’21 Donovan was trying to find ways to cooperate with the CCP and to infiltrate agents in North China. Lieutenant Colonel Willis H.Bird and Lieutenant Colonel Barrett, the deputy chief of the OSS in China, were sent by General McGlure, Donovan’s deputy, to Yenan to explore the possibility of a joint unit for guerrilla operations and intelligence gathering in areas under the control of the CCP bordering with the Japanese-occupied territories. Despite the initial agreement between OSS officers and the CCP, this scheme of bypassing the nationalist government was killed once it became known to the Army, the Navy and the State Department. In Chungking on 14 January 1945, Ambassador Hurley wrote to Roosevelt: ‘certain officers of his [Wedemeyer’s] command formulated a plan for the use of American paratroops in the Communist held area. The plan provided for the use of Communist troops led by Americans in guerrilla warfare. The plan was predicated on the reaching of an agreement between the United States and the Communist Party bypassing completely the National Government of China and furnishing American supplies directly to the communist troops and placing the communist troops under the command of an American officer. My directive of course was to prevent the collapse of the national Government, sustain the leadership of Chiang Kai-shek, unify the military force of China, and as far as possible to assist in the liberation of the Government and in bringing about conditions that would promote a free unified democratic China. The military plan as

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outlined became known to the communists and offered them exactly what they wanted, recognition and lend-lease supplies for themselves and destructions of the National Government.’22 Nonetheless the CCP again asked for aid and money. On 23 January 1945, General Chu Teh, the supreme commander of all Red Army forces, sent a letter to Donovan asking for USD 20 million; the money would be used to bribe the Chinese collaborators’ government officials. He attached a paper called ‘1945 Project and Budget for Undermining and Bringing Over Puppet Forces’. A list of amounts and tasks was included: USD 7.6 million for espionage in the collaborators’ twenty divisions; USD 1.45 million bribery money for officers and soldiers; USD 5 million for a ‘reserve fund’, to pay for the murder of Japanese officers and to commence sabotage operations units. In his study on the OSS in China, Maochun Yu remarks: ‘someone deep inside OSS must have tipped off Yenan to a heavily guarded secret known to a few people: the total amount of “special funds” OSS had available for the fiscal year of 1944. Congress in its War Agencies Appropriation Act of 1944 had authorised OSS $21 million to be spent by Donovan “without regard to the provisions of law and regulations relating to the expenditure of government funds or the employment of persons in the government service”’ (the fiscal year had commenced in October 194423). The leak about the budget appropriations may have come from a person close to T.V. Soong; and his lobby in China Defence Supplies could have easily noted this. Perhaps there was a communist informer in Soong’s entourage. By the spring of 1944 Donovan’s OSS started cooperating with General Claire L. Chennault’s 14th Air Force. The Air and Ground Forces Resources and Technical Staff (AGFRTS), euphemistically called the ‘Agfighters’, was assigned secret intelligence gathering. In the autumn of 1944, the China – Burma – Indian Theater was divided into the India – Burma – Theater (IET), which was subject to the South East Asia Command (SEAC) and the China Theater. SEAC was under Admiral Mountbatten. In early 1945, China Theater Commander General Wedemeyer put the OSS under his command through the G-5.24 Despite Donovan wanting an agreement with the CCP against the Japanese, he could not proceed; the amount requested was too high. He asked the Dixie mission (the US mission in Yenan) to discuss the possibility of OSS operations in Manchuria with the communist

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leadership, but the communists were even more demanding in money and arms.25 In any case, some OSS officers were working with the communists on a joint scheme involving guerrilla training and intelligence gathering without the knowledge of Chiang Kai-shek. On 19 January 1945, the OSS in Yenan surprised Wedemeyer by informing him that the communist leadership, Mao and Chou Enlai, wanted him to arrange one of them to fly to Washington to meet with the president to explain the ‘situations and problems of China’. The next day the CCP told them that the KMT was in negotiations with the Japanese: ‘for sell out of American interest in China’. Ambassador Hurley believed that Chou Enlai was lying about the KMT– Japanese contact. He replied to the OSS that he ‘had received a collection of documents from Yenan describing a contact between a certain individual in Shanghai and Ex-premier Konoye of Japan. The former has a son who was a friend of a man who held some official position in Chungking . . . There was not much more meat in the report than this.’26 At the conference in Yalta the next month, on 11 February 1945, a secret attachment was signed: Stalin agreed to enter the war against Japan 90 days after the defeat of Nazi Germany. Stalin informed Mao of the secret. For some time, Chiang was suspicious of the rumours, but when he was informed by Ambassador Hurley he was furious at Washington for allowing Stalin to enter Manchuria. Meanwhile, in Chungking, where Chou Enlai was based as a representative of the CCP in the United Front, communist spies were legion – despite the Juntong and Zhongtong counter-intelligence effort. Chou Enlai claimed to have 5,000 secret agents working for him in Shichuan, Yunnan and Guizhou. Chiang did not know that Lieutenant General Yan Baohang, one of his strategists, was a mole of Chou Enlai and Kang Sheng. At least one Xu working for the Zhongtong of Xu Enzeng infiltrated the communists organisation in Chungking. In his memoirs, Xu Enzeng mentions that this spy led anti-communist guerrillas at the end of the civil war.27 According to Chiang and his lieutenants, the SOE was ‘improperly dealing direct with Provincial governors’, aiming to spy in China without the authorisation of the Chinese government. Indeed, the British had secret contacts with General Fu Tso-yi of Suiyuan province, adjacent to Inner Mongolia. The general was always ambiguous in his loyalty to Chiang Kai-shek. Chan Chak, a warlord in Kwangtung, was

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also approached. A rumour spread that after British intervention he had been named governor of the province. The SOE also approached General Gu Zhutong of the Third War zone, and discussed with him the possibility of letting them open a guerrilla training camp. Chiang and Dai Li were furious with the British because they realised that the offer for guerrilla training and missions meant that the British, and not the Chinese, would control the organisation of clandestine warfare. Indeed, the British claimed that the initial agreement with Chungking allowed them to control the guerrilla forces, and not the Chinese government.28 Allen Dulles, a senior OSS official (and the future director of the CIA, under Eisenhower), was persuaded by Keswick and William Stephenson (the head of the British Security Coordination, in New York) that the Americans needed to work with the British in the secret recruitment of sources in the KMT government. Li Shizeng was put first in the targets list because the British assumed that he had ‘a direct line of communication, by special code, with Chiang Kai-shek.’ The octogenarian Li, a supporter of T.V. Soong, was a freelance diplomat emissary of Chiang; he was contacted by Allen Dulles. In 1948 Chiang made him an adviser. After 1949 he was sent overseas: first to Switzerland and then to Taipei.29 Dai Li was aware that the SOE commando training mission under John Keswick was penetrated by the NKVD. Keswick’s assistant was a Russian called Petro Pavlovski, who was a secret agent of the Comintern. US intelligence suspected him of belonging to an arms-smuggling network of the Comintern supporting Yenan (the Shoyet ring). In 1939, Pavloski reached Indochina, where he was commissioner officer of the French colonial army. In 1940 he returned to Chungking. General Pechkoff, the French representative, offered him French citizenship. Pavlovski soon became Keswick’s assistant in the China Commando Group. Once ousted by the KMT regime, Pavloski and James McHugh, a US naval attache´ liaising with the SOE, attacked Dai Li with black propaganda. When Keswick started working for Donovan in Washington, he asked to be joined by Pavlovski; Donovan concurred, but the US embassy in Chungking did not issue a visa. Pressure from Donovan got Pavlovski his visa. By now, Pavolvski had become a OSS officer; Dai Li, who had been watching Pavlovski for some time, was certain that one of his antagonists had attained an influential position in Washington.30

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The signals intelligence and code breaking cadre of the Juntong and the early warning impressed the Americans. The British ambassador asked for cooperation; eventually Chiang assented, and the Sino – British Special Technical Cooperative Unit, under Zhou Weilong, was established.31 In any case the British intelligence in the China – Burma – India theatre suspected the Chinese of giving away intelligence to the Japanese. On 1 July 1944, the War Office signalled Melbourne, Australia the director of British military intelligence: ‘insecurity of passing information to Chinese fully appreciated. India, Machin [military attache´, China], and we realise that anything given to Chinese is potentially available to Japanese through one means or another . . . Machin does not repeat not automatically pass information he receives to the Chinese. We refer most secret matters to him, which we should on no account wish the Chinese to know.’ Britain was providing China only with the intelligence it needed to fight the Japan in the immediate future. Despite the fact that there were no traces of leaks, ‘there is, however, grave suspicion that much leakage occurs, based mainly on experience of the average Chinese mentality.’32 The Chinese made also a proposal for an intelligence-sharing scheme involving the SIS and the SOE, and to work together on the order of battle of the Japanese. The India theatre command warned London that the Chinese would have access to Anglo– American intelligence files. The JIC agreed but did not want to rebuff the Chinese and proposed for a Sino– British service to collect intelligence ‘from which the order of battle is excluded.’ Signals intelligence was not on offer in any way. The Chinese did not proceed. Eventually, the British had to deny the creation of a Sino– British agency.33 In late 1943, Chiang Kai-shek and Lord Louis Mountbatten agreed on the newly created South East Asia Command area to enable the SIS personnel to operate ‘freely in China, especially in coastal areas’. Lieutenant Colonel Gordon Harmon, the SIS senior representative, based in Chungking, did meet the usual Chinese bureaucratic obstruction. In mid July 1942, Gordon Harmon, in Chungking, received a visit from the private secretary of Chou Enlai. The Chinese ‘gave evidence of a really genuine desire to co-operate against the Japanese’, wrote Harmon to London. The Chinese gave an intelligence report; ostensibly it was from spies, but the SIS concluded that it was based on signal

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intelligence. The report presented the reorganisation of Japanese secret services in China; it was an intercepted message of the Japanese embassy in Nanking (the seat of the puppet government of Wang) to the Japanese consulate in Hankow. Harmon advised caution with the communists. Some in London sounded positive about a cooperation. In August, there was another CCP contact with the SIS. Chou Enlai had sent a personal message to the SIS head representative for close cooperation against the Japanese. Nonetheless, no scheme was worked out. In 1943 an SIS attempt to contact the CCP was blocked by Chiang Kai-shek. The SIS had sent the released Frank Hill to Xi’an, where the CCP had a stronghold. He only reached Chengtu. Hill had made contact with the communists while in Chungking; this had been noted by the KMT. London withdrew him in October 1943; he was, besides, in too poor health to continue with such assignments.34 In any case, by the end of December 1943, the SIS maintained five radio stations in China, with permission granted by the Chinese to set up three more. The British enjoyed the advantage of intercepting the KMT’s and the CCP’s communications – the latter’s with Russia. Indicative of the useful stream of top-secret information in the Moscow – Mao communications was an intercept by the GC&CS (the under SIS management) of a CCP message (in late May 1943) admitting its structure in Yenan had been infiltrated by KMT spies. This was at the time of the ‘Rectification Campaign’ of Mao and Kang Sheng: Having penetrated our party organisations, our government’s, military, educational, financial and economic organisations, they [the KMT spies] carried out hidden subversive activities [and] secret espionage [sic ], and they arranged assassinations. From the second half of 1942 onwards, we once more began to check our cadres carefully and methodically, and carried out the work of clearing out agents provocateurs from our midst. At the present moment we have not achieved outstanding vigilance. Thus ‘28’ [code for the KMT] has had the opportunity for the last six years of introducing its spies into our big groups in our [corrupt word] organisations in different places, by exploiting the position existing on other fronts, and the moments when the members of our party were disbanded. In ‘41’ [Yenan] alone there are thousands of Kuomintang [KMT] spies.35

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In September 1944 the Joint Intelligence Committee put all intelligence-gathering, with the exception of the escape of prisoners of war, under the SIS.36 In his turn, Menzies wanted ‘the complete removal of MILES and his organisation’; but, together with the other antagonists of Miles, he failed to remove the troublesome Miles and Navy Group China from the China Theatre.37 In 1943, the SIS acquired the network run by Cornelius V.Starr, formerly of the SOE and now the editor of the Shanghai Evening Post. ‘Clam’ was another operational organisation under Konrad Hsu, working for the SIS.38 At that time in Chungking, the SIS had SIS officers, twenty handled secret agents, numbering four hundred Chinese and other nationals. General Wedemeyer was not informed of British espionage against the Chinese out of fear that he would block everything. The service tried to show that it was not spying on the Chinese but worked for allied cause against Japan: ‘a non-operational organisation whose sole object it was to produce information for the benefit of Naval and Air Task Forces in the China Theatre.’39 No doubt the British intelligence officers could not do much given the pervasive networks of Chinese spies working for Juntong and Zhontong. The SIS stations in other parts of China directed agents into the Japaneseoccupied territories. The majority of the secret agents were ‘out of pecuniary gain, and of these only a rare few will be satisfactory in a strict business sense’. The ‘low middle class of country bred adult was a promising group of spies’. These Chinese had ‘a fairly shrewd sense of proportion in regard to expenditure’ and a ‘knack of adapting themselves to the changing circumstances of war. Their minds are receptive to ideas . . . although initially they are chronically unobservant.’40 In January 1945 General Wedemeyer made it clear that British and US intelligence services in China should not focus ‘on matters which pertain to the internal affairs of China’.41 Wedemeyer suspected the British of plotting against Chungking. In Spring 1944 the CCP agents approached the governor of Guangxi, Marshall Li Jishen, asking him to defect from the KMT. The British Army Aid Group (BAAG) Colonel L.T. Ride told Colonel W.P. Thompson, the chief of the British liaison office for military assistance in Guilin, that the British would support a coup with two airborne divisions for Li, and that Li was in communication with London. Chen Hansheng was a key CCP agent in the turning of Li to the communist cause. In March, the nationalist

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secret services were ordered the arrest of Chen Hansheng, in Guilin. Li Jishen tipped off Chen, who, with the help of the SIS, took a flight to India. Chen worked for the Ministry of Information until the end of the war.42 (There had to be some exaggeration of the British intention to deploy two divisions in China; this force was not available and possibly Wedemeyer was worried unjustifiably). British intelligence did not know about Chen Hansheng. He was recruited by the Russians for the Comintern in 1926 while teaching at the University of Peking. In 1927, fighters of the warlord Zhang Xuoling raided the Soviet embassy of the capital, uncovering documents pointing to espionage, implicating amongst else Chen, who had to flee to Moscow, where he received intelligence training. In 1928 he return to China, becoming a member of Richard Sorge’s spy ring. He followed Sorge to Tokyo until 1935. That year the arrest of a courier revealed Chen’s secret role and he fled, again to Moscow. Despite his torture, Richard Sorge did not tell the Japanese about Chen.43 In 1936, Moscow recommended Chen Hansheng to Owen Lattimore, the editor of the New York-based journal Pacific Affairs, the mouthpiece of the Institute of Pacific Relations (IPR). Kang Sheng directed Chen to spy in New York and support Rao Shushi, the Comintern agent there. In 1939, on Kang’s order, Chen reached Hong Kong. After the war, Lattimore was accused of being a Soviet secret agent; but according Chen’s memoirs he had no knowledge of Chen’s activities.44 In Hong Kong, Chen led an organisation that funnelled overseas funds into Yenan so that the CCP in North China could buy arms from the collaborators of the Japanese (the latter seemed to tolerate this). After the war, he was a spy with a cover of a visiting scholar at the Johns Hopkins University, Maryland. Chen became Mao’s secret liaison with the American Communist Party. In 1950, Chou Enlai recalled him to China, where he taught economic history. During the Cultural Revolution, after the order of Kang Sheng, he was under house arrest; Chen’s wife was tortured to death. In the last years of his life, Chen was almost blind. He died on 13 March 2004 at the age of 107. Premier Wen Jiabao had visited him in hospital, naming him a ‘pioneer [of social sciences] with creative thinking’.45 The Americans criticised British intelligence tasking in China in 1945. Wedemeyer wrote: ‘British activities in theatre [of China, Burma, India] are essentially intelligence particularly concerning Chinese political and

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economic developments. They concern themselves very little with Japanese.’ Wedemeyer, who had reached Chungking in October 1944, was suspicious of the British requests to allow for SIS officers to work in Chungking in ‘psychological warfare activities’. The SOE presented him with a plan to train and deploy 30,000 guerrillas in China, disregarding Chiang Kai-shek. The US general felt insulted, believing that the British had lied to him about the real mission of BAAG, which was not to save pilots of the 14th Air Force, as they had claimed, but to gather intelligence on the Chinese, the KMT and the CCP. On 29 December 1944, he cabled Washington that the British ambassador had told him that a unified China ‘would be dangerous to the world and certainly would jeopardise the white man’s position immediately in Far East and ultimately throughout the world.’46 Indeed, many communist leaders believed that London and British intelligence aimed to employ Chiang Kai-shek to divide south China to spheres of influence.47 In January 1945 Donovan had a meeting with the SIS representatives, in Chungking, seeking to find a way for collaboration, bypassing the KMT regime. Admiral Miles of SACO was furious that he was excluded from the meeting, and was informed by Dai Li. Miles informed Washington: ‘info comes from Chinese who are highly disturbed as possible formation [of] British-American secret service agency in China thus violating sovereignty of China.’48 The former US naval attache´ James McHugh, the antagonist of Dai Li, would head the joint venture. Nonetheless, this plan was blocked by Wedemeyer, General Marshall and Vice Admiral R.S. Edwards.49 In 1946, McHugh joined the SSU and returned to China, where he again met John Keswick, now with the SIS. According to a private letter, in August 1946, Keswick proposed that McHugh return to Washington to gather intelligence for the British – but McHugh declined.50 The SIS followed the CCP–KMT negotiations in Chungking, concluding that they would end in failure. The service’s sources included Chou Enlai himself, who shared information to advance his party’s ends. Indeed, the SIS made a summary of a letter of Chou to Yenan on 8 April 1945.51 The communists were allowed to send a representative to the United Nations conference in San Francisco in 1945.52 One could argue that this was an international recognition of their growing power in China. In turn, Chiang Kai-shek pledged that a National Assembly would be convened in November 1946 to vote on a constitution. The CCP feared

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that this was a gambit for the KMT to hold onto power. The KMT –CCP antagonism in China could only lead to a new phase in the civil war after the defeat of Japan, a 16 January 1945 assessment of the Foreign Office had warned. No viable coalition government could be formed with two leaders, Mao and Chiang, each with an immense army and vast territories under his control.53 It was predicted that the Russians would attempt to restore their power over the Far East territories and ports they had held in the Tsarist period, especially in Manchuria, and that they would work towards a Chinese coalition government with a large proportion of CCP cadres under Moscow’s influence. A Foreign Office paper dated 12 May 1945 stated: ‘If however, this [the formation of a coalition government] could not be achieved then the Soviet policy might work for a disunited China in which Soviet influence would at least predominate in communistcontrolled areas and generally in Northern and Central China.’54 Japanese intelligence, watching the Russian consulate-general in Harbin, reported on 12 June 1945 that consular ‘circles’ were claiming that Anglo–American forces would conduct landings in Japan after the conclusion of operations in Okinawa, Taiwan and mainland China.55 Sources within the consulate claimed that the Russians were planning to occupy southern Sakhalin, and that was why they were training administrators in Vladivostok as well as deploying more forces in the north of the island.56 (Indeed, in accordance with Yalta conference agreements, the Soviets invaded and occupied southern Sakhalin in August, in the Manchurian Strategic Offensive Operation). The Japanese operated a signals-intelligence station in Harbin in a bid to intercept Russian communications. GC&CS was aware of this endeavour and kept a close ear on what the Japanese were communicating to Tokyo. In April 1946, Major L.J. Ralls and LtColonel Davis interrogated Colonel Nishihara Yukio, a Japanese intelligence officer who had served with the signals unit. He admitted that his service had consistently failed to infiltrate the Soviet Union border areas because of the Russians’ counter-intelligence measures and their border security: ‘espionage became practically impossible’. Soviet deserters were providing intelligence of low value – with the exception of three officers in 1943, one of them from military intelligence, who had brought with them an infantry operations-manual. Nishihara also admitted failure to tap the telephone line of the Soviet diplomatic

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mission in Harbin and to listen in to diplomats’ conversations; the Russians were using a telephone code in their communications. The colonel insisted, however, that Japanese signals intelligence had proved successful against the communications of the Soviet border garrisons. He remembered that in 1942 the unit achieved some success in deciphering Soviet garrison communications, but that ‘he never heard of any success in breaking the messages of the [Soviet] Far Eastern Army’.57 Japanese intelligence sought the aid of White Russians, who were provided with large sums to infiltrate the consulate-general in Harbin. They delivered many intelligence reports in 1942– 45, but the British deemed the references to Russian deployments to be false, though some reports of Anglo– American deployments proved to be accurate. But the British interrogators were in no doubt that the Russians had been deceiving the Japanese for a long time.58 In any case, the interception of Japanese traffic helped the British gain a fair picture of Soviet intelligence in Manchuria by the end of the war. The Secret Intelligence (SI) Branch of the OSS had to wait until January 1945 to operate independently in China. Until then the Special Operations (OS) Branch grew enormously. The SI Branch reported directly to Washington. As of 25 January 1945, the SI force at OSS/ China Headquarters had six officers and two enlisted men. The SI Branch had little control over the ‘Agfarts’ and, of course, SACO.59 From March to June 1945, many new OSS officers and other ranks were assigned to the China theatre SI. OSS (SI) teams infiltrated the Shantung Peninsula, the Yellow River Bend areas, the Canton– Hong Kong areas, Peking and Tientsin, the area extending from Canton to the French Indochina border and Chekiang, Anwhei and the Kiangsi Provinces. Wedemeyer agreed for the OSS/SI to reach the Japanese-occupied Indochina to report on local conditions. OSS agents operated in the Foochow, Hangchow, Amoy, Shanghai, Canton, Macao and Nanking areas. Meanwhile, OSS/SI agents provided a coastal watch. Among the successes of the OSS/SI was the acquisition of a list of Japanese Army Postal Code designations, which listed the designations of Japanese units operating in China. The OSS/SI also acquired a code used by the Imperial Japanese Navy warships off Shanghai. Major units like the 129th, 131st and l33rd Division were identified and located as well as the redeployment of the 27th and 40th Divisions from central China to points east and south of Canton, and their subsequent move into the Kanhsien.60

CHAPTER 13 THE KREMLIN'S SPIES

Chungking, 1944: The mysterious Mr Chen approached Captain Caldwell of the OSS, and the pair discussed the need for a coup against Chiang. Once Mr Chen understood that the American agreed with him, he said that until the plot preparation was complete and they knew Roosevelt’s answer to their message, ‘I want to put you under the protection of the Society of Elder Brothers.’ Chen continued: ‘I will give you our passport and if you ever need help in your travels in this country, especially if you are trying to escape from the Japanese, you will go to the nearest village, walk down the main street, identify the biggest and most prosperous shop and ask to see the proprietor. When he appears, you will ask him this question: “Wo-ti laokungtsainar?” [Where is my old uncle?]’.1 Caldwell was introduced to the complex power struggle for China within the nationalist regime. The major secret societies were the Green Gang, the Society of Elder Brothers (Ko Lao Hui), the Red Circle in South China and the Green Circle in Central China- with about 4 million members. Dai Li had tried to convince secret society leaders, among them the leaders of the Green Gang, to join in an underground network against the Japanese. Caldwell was approached by the Society of Elder Brothers, and had asked him to convey their message to Washington. The secret society sponsored the vice president, General Li Zogren, for the position of Chiang.2 They were planning for a coup d’e´tat and claimed that 600,000 troops would support Li for head of state.3 Back in 1942, Chou Enlai, as a representative of the CCP in Chungking, had secret meetings with anti-Chiang nationalists. This was noted by the NKVD mission. Stalin instructed Dimitrov to inform Mao

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about it: ‘The current situation absolutely dictates that the Chinese Communist Party undertakes everything incumbent upon it to bring about any possible improvement in relations with Chiang Kai-shek and that strengthening of the United Chinese Front in the struggle against the Japanese. We are aware that Chiang Kai-shek and the Guomidang [Kuomintang] leaders are doing their utmost to provoke the Communist Party, in order to discredit and isolate, but one cannot consider it correct policy on our part for our people to give in to these provocations instead of reacting to them intelligently. Yet there are indications that in Chongqing [Chunking] Zhu [Chou] Enlai is overlooking this and by his own actions is occasionally playing into the hands of the provocateurs. He is organising secret conferences with Chiang Kai-shek’s enemies and foreign correspondents that are directed against Chiang Kai-shek; the latter, naturally, finds out about them and uses them to further stir up feelings against the Communist Party and to justify his own provocation of actions.’ A few days later Mao agreed with Moscow’s assessment.4 In autumn 1943, a group of Chinese generals who had fought against the Japanese and did not belong to the old cliques planned a coup to topple Chiang. They had revealed their intention to Brigadier General Thomas S. Timberman, and asked for his support. He denied being involved, but the OSS was more interested in following the plot. The conspirators wanted to take advantage of Chiang’s attendance in the Cairo conference from 22 to 26 November 1943 and thus create a fait accompli. Nonetheless, Dai Li and the CC clique’s spies discovered of the plot. When Chiang returned, six hundred officers were arrested and tortured and sixteen generals executed.5 But the plots against the generalissimo continued. In 1944, Caldwell was informed that the plotters concluded that the 1944 defeats in Central China created the momentum to claim power. The clique of southern generals gathered in Kunming and commenced a series of secret negotiations with other warlords, like Lung Yen, the warlord of Yunnan, as well as with the Americans. ‘Through Mr Chen and the secret societies, I had participated in this plot for some months’, wrote Caldwell. The defeated forces of generals were far from Chungking, to the east; Japanese deployments blocked them from joining the nationalist forces close to the wartime capital. This gave them some kind of independence. At this point Stilwell pressed for an

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observers group to be deployed in Yenan.6 In December 1944, after the recall of Stilwell, Chiang unleashed his secret services to massacre all the plotters and their key supporters. ‘Some of my friends who witnessed it called it a massacre. Most Americans, including those in high places, either did not care or never knew what happened’, Caldwell remembered.7 Caldwell had authored his critical report where he presented accounts of Dai Li’s offensive against Americans, evidence of secret trading with the Japanese, ‘information I had secured from underground sources concerning anti-Americanism in Chiang Kai-shek’s government and in his army’. The information about secret trading had been received by a European who was director of the Maritime Customs Service in Chungking. Many cases of corruption were listed. Caldwell argued in favour of Washington stopping backing the regime, hinting that the Americans should be aiding ‘only those forces in China which supported our own objectives.’ OSS Colonel Coughlin forwarded the report to Washington.8 Years later Caldwell was informed that his paper, forwarded by his OSS major, had reached the OSS headquarters, and Donovan agreed with the concept of the need for another Chinese leadership to take over. But it was Admiral William Leahy, Roosevelt’s closest adviser, who insisted that Chiang ‘not be stabbed in the back’.9 Caldwell was lucky not to be named a pro-communist back in the United States, as other OSS and State Department officers were after the leak of secret documents in a journal in February 1945. The epicenter of the controversy, which later played a part in the McCarthy witch-hunt of the 1950s, was the small-circulation magazine Amerasia, some of whose articles were by communists and communist-sympathizers voicing their opinions on matters of US foreign policy. An article in the 26 January 1945 issue covered developments in Thailand and post-war policy; it was based on a British military intelligence report – but this was not mentioned. The SIS took note of the article and informed the OSS.10 Kenneth Wells, a Research Branch officer of the OSS, read the article and reported that it resembled a paper he had written a year ago on the same subject, quoting the British intelligence report. Donovan took personal interest in the affair, and soon OSS agents broke into Amerasia’s office in New York and found hundreds of classified documents from the Department of State, the Navy and their own service. Donovan consulted with the State Department, which called for the FBI to

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investigate further. The FBI suspected John Service, ‘a China Hand’, Emanuel Larsen of the State Department, Andrew Roth, a lieutenant with the Office of Naval Intelligence, and freelance reporter Mark Gaynof leaking the papers to the Amerasia editorial team. The FBI surveillance of the suspects established that John Service met several times with an editor of Amerasia; according to a secret recording, he spoke with him several times in Washington and New York. The FBI reported that Jaffe had visited the Soviet consulate in New York and that after a meeting with Service, Jaffe met with Earl Browder, the secretary general of the Communist Party of the United States, and Tung Pi-wu, the Chinese Communist representative to the United Nations Charter Conference. Without a warrant, FBI agents broke into the offices of Amerasia and the homes of Gayn and Larsen and installed bugs and phone taps. On 6 June 1945, the FBI arrested Jaffe, Kate Mitchell (one editor), Larsen, Roth, Gayn and Service. One thousand seven hundred classified State Department, Navy, OSS, and Office of War Information documents were confiscated. Nonetheless, no evidence was found that the documents were passed to or reached a foreign power; thus the Justice Department concluded that an indictment under the Espionage Act was not possible. The arrested were charged with unauthorized possession and transmittal of government documents. Service was not indicted; he had provided Jaffe (who was indicted, but eventually got away with just a fine) with copies of his own reports on the situation in China, which were no secret. Senator Joseph McCarthy blamed for a government cover-up and spoke of a serious security breach in the agencies in question.11 Chiang knew of the critical reports of the ‘China Hands’. An FBI investigation at that time indicated that ‘China Hands’ reports reached the China Defense Supplies Inc., in Washington, and then T.V. Soong, who kept Chiang informed. The China Defense Supplies Inc. was the main agency that handled the Lend-Lease aid to China from the United States (until its dissolution in 1944). The company was chaired by Soong.12 The FBI had discovered documents linking further people to the Amerasia case: Mary Keeney (a member of the Allied Committee on Reparations), Joseph Bernstein and Thomas Bisson (codenamed ‘Arthur’ by the NKVD, an organiser of the Institute of Pacific Relations and founder of China Today and later of Amerasia). Their activities and their communication with Soviet agents were revealed only with the Venona

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decrypts, years later.13 Venona was the final codename for a project begun in 1943 by the US Army Security Agency to decrypt and decode intercepted cable traffic between Soviet diplomatic and NKVD offices in the United States to Moscow. Once released, Larsen hit Chinese confidence hard by arguing in an October 1946 article in Plain Talk that a secret clique of communists at the State Department formed US policy on China and sought to eliminate the pro-Chiang officials.14 Another person closely connected to the formation of US policy on China was New Deal chief economist Lauchlin Bernard Currie, a White House emissary to Chiang Kai-shek. Later, Venona decrypts of the NKVD – Moscow traffic indicated that Currie was a source codenamed ‘Page’. According to Elizabeth Bentley, a spy turned informer who had named over eighty Americans spying for the Soviet Union who had engaged in espionage for the Soviets, in 1943 Currie warned the NKVD of the Venona project and that the Americans were about to break the Soviet codes. Only eight decrypts referred to Currie. According to Bentley, Currie ‘insisted’ in his meetings with his secret contacts only in verbal briefing and not leaking papers. Nonetheless, decrypts showed that he gave a 1943 political memorandum to Nathan Gregory Silvermaster of the War Production Board (his name was revealed in the Venona decrypts as a source) along with two papers on US policy in 1944. One of them could have been useful to Stalin, showing that Roosevelt would not resist the Russian proposal to divide Poland despite his public recognition and support of the Polish government in exile.15 Solomon Adler was a chief economist of the US Treasury Department; he was a representative of his department to Chungking between 1941 and 1948. He reported to Treasury secretary Henry Morgenthau Jr, and it is claimed that his reporting influenced US economic policy toward China.16 In 1939, Whittaker Chambers, a courier of the communist underground for the GRU, defected and revealed to Assistant Secretary of State Adolf Berle that eighteen current and former government employees spied for the Soviet secret services; among them were Alger Hiss, his brother Donald Hiss, and Laurence Duggan (all respected, midlevel officials in the State Department) as well as Lauchlin Currie, an economist and special assistant to the president. Berle did not believe all he heard, but he passed the information to Roosevelt, who dismissed it. In March 1940, Berle informed the FBI of Chambers’s revelations;

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Chambers was questioned by the FBI in May 1942 and June 1945. In November 1945 Elizabeth Bentley, a Soviet spy, defected and backed many of Chambers’s claims, thus drawing further the interest of the FBI to his allegations.17 Bentley identified Adler as a member of the Silvermaster group. Venona decrypts showed his codename as ‘Sachs’ (or ‘Saks’). While in Chungking, he lived with a CCP secret agent, Chi Ch’ao-ting. Chi had joined the CPUSA in the 1920s and had a PhD from Columbia University; on the United States’ suggestion he became the aid of the Finance Minister. Chi secretly supplied a stream of secret intelligence to Mao. After the establishment of the People’s Republic of China he was promoted to a high-ranking diplomat.18 It was Harry Dexter White, Assistant Secretary of the Treasury (and a Soviet secret source), Virginius Frank Coe (accused for spying for the Soviets later), the then director of the Treasury’s Division of Monetary Research, and Adler who argued against granting a gold loan programme of $200 million to Chiang’s government to control inflation. Eventually China received $29 million by July 1945. Nonetheless its finance assessments had to be judged on their own merits; the Chinese economy was in irreversible decline because of the war and endemic corruption of the KMT regime; was it for the US national interest to save the money? (Indeed, a couple of years later the Marshall plan was devoted to the rebuilding of Europe). White, Coe and Adler faced investigation as Soviet informers and agents of influence. Under project Venona, a message from the NKVD station in New York to Moscow, dated 29 December 1944, and decoded (or distributed) on 27 May 1968, read: To VIKTOR i. 8th Department. [1 group unrecovered] we are sending five films of PEAK’s [PIK] ii. materials on the progress of the talks between the COUNTRY [STRANA] iii. and the ISLAND [OSTROV] iv. about DECREE [DEKRET] v. in the second phase of the war. The talks were carried out on the basis of the QUEBEC agreement and were progressing satisfactorily under the chairmanship of NABOB

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vi. At the end of November the talks were unexpectedly terminated. It was supposed that the reason was the influence of HOPKINS operating through the representative of the FARM [KHUTOR] vii. Oscar COX. However, it was clear that the talks were terminated on the orders of CAPTAIN [KAPITAN] viii. who previously was allegedly favourably disposed on this question. [3 groups unrecovered] [D per cent in the opinion of] CAPTAIN PER’s ix. attempts to create [8 groups unrecovered] and consequent anti-PER policy. Note by the Office [6 groups unrecovered]. We confirm receipt of your mail of 10 November 1944. MAY [MAJ] x. Comments: i. VIKTOR: Lt. General P.M. FITIN. ii. PIK: Possibly Virginius Frank COE. iii. STRANA: The USA. iv. OSTROV: Great Britain. v. DEKRET: Lend-Lease. vi. NABOB: Henry MORGENTHAU, Jr. vii. KHUTOR: the Foreign Economic Administration. viii. KAPITAN: Franklin D. ROOSEVELT. ix. PER: Winston CHURCHILL. x. MAJ: Stepan APRESYAN.19 White died of a heart attack on 16 August 1948. Adler and Coe were not proven spies, but they were blacklisted. Surprisingly, both moved to China in the early 1960s and remained for the rest of their lives.20 Professor Chen Lin of the Beijing Foreign Studies University remarked: ‘His [Adler’s] book The Chinese Economy in 1957 won worldwide acclaim. In 1962, when the Chinese people were facing great difficulties at home and abroad, Sol Adler resolutely decided to come and settle in China. He said, “I have come to settle in China for three reasons: First, I have all along had great trust and confidence in the Chinese people and their leaders; second, I have all along had unshakable faith in the cause of socialism; and third, I hope to stay in China for as long as possible and work for world peace and the friendship between the Chinese people and the peoples of the world. I want to devote my whole life to the cause of

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socialism.” During the 1960s and 1970s, both Mao and Chou Enlai showed personal concern for Sol’s life and work in China. Many times Party and government leaders met with him and discussed matters of domestic and international importance with him and consulted his ideas and suggestions. In the early 1980s Sol was invited to serve as adviser to China’s State Council Development & Research Center, the Ministry of Foreign Trade and Economic Cooperation, and the World Economic & Political Research Institute of the Chinese Academy of Social Sciences. Though he was not in very good health, he made conscientious efforts to carry on investigations and research into China’s economic situation and world affairs and put forward valuable suggestions to the Party and the government.[. . .] During the many years Sol and I were friends, one of the greatest “treats” on my part was to hear him talk about past events. These events, ever since the Chongqing (Chungking) days in the 1940s, have always been interwoven with the cause of the struggles of the Chinese people. He talked about how Kong Xiangxi, Chiang Kai-shek’s finance minister and cousin-in-law, invited him to dinner and tried to make him drunk with Maotai in order to coax some secrets out of him, and how he enjoyed Kong’s Maotai and yet stayed sober. He talked about his contacts with our Party leaders, Mao and Zhou and others. Many times I suggested that he should sit down and write his memoirs. But his answer was always clear and definite: “No, I will not.” He said. “It is true that I remember many things of the past, and many of them are not known to others. However, when one reminisces about the past, particularly about things that are closely connected with the cause of the Chinese revolution and some of its important leaders, one cannot but pass judgment; for reminiscences themselves would be a kind of judgment. Yet, it is for the Chinese people and later historians to pass judgments on so great a cause of the Chinese people, not an insignificant person and foreigner like me”’. 21 Currie was not prosecuted and denied being a source of the Soviet intelligence. In 1947 he was interviewed by the FBI, telling them that he might have been indiscreet with classified information in his discussions with his staff during the war.22 In 1949 he was appointed to

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head the first of the World Bank’s comprehensive country surveys for Colombia. A couple of years later he accepted an adviser’s position with the Colombian government. In December 1952, he testified to a grand jury investigating Owen Lattimore’s role in the Amerasia case (he was also investigated for espionage but never prosecuted. In 1963, he established the Department of Chinese Studies – now East Asian Studies – at the University of Leeds. He died on 31 May 1989). Courrie’s passport renewal application was turned down in 1954 on the grounds that he was a permanent resident in Colombia, married to a Colombian. He lectured as visiting professor in universities in Canada and Europe, among them Oxford. He died on 23 December 1993 of a heart attack in Bogota.23In 1945, as the Amerasia case unfolded, the ambitious Joseph McCarthy, a former Wisconsin judge and recently discharged marine officer viewed it as a political opportunity to build on the growing anticommunist sentiment as well as on the case of espionage in the United States, to make himself the crusader of anticommunism. McCarthy had campaigned for the Republican Senate nomination in Wisconsin while a captain in 1944, but had been defeated. He had joined the Marines, possibly seeking to advance his political aspirations. While a reporting intelligence officer, he served for two and half years, taking part in twelve combat missions; but later he claimed he flew in 32 in order to claim the award of the Distinguished Flying Cross, which eventually he received in 1952. McCarthy had been presented a letter of commendation, countersigned by Admiral Chester W. Nimitz – but it was McCarthy himself who had typed it. He claimed to have been wounded, but again many doubted this claim.24 The man who tried to show himself a war hero would turn against American political ethics and take advantage of counterintelligence investigations for his own benefit. Eventually, in 1946, McCarthy was elected senator for Wisconsin and sided with the ‘China lobby’ urging for more support for Chiang Kaishek. By 1950 the United States had entered the McCarthyism era, with the senator bringing up again the Amerasia controversy. Until then the Amerasia case was linked with the loss of China charges against the Truman administration. A key person who gave information to McCarthy was Alfred Kohlberg. J.E. Hoover, the FBI director, had socialised with McCarthy since 1947 and ostensibly gave him leads for accusations. But Venona remained top secret for McCarthy. The Korean

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War and the testing of the first Soviet bomb created an atmosphere of fear, which McCarthy built on. Gradually, the Republican right came to believe that it was internal subversion of communists in the highest places in Washington which had led to the defeat of Chiang Kai-shek.25 John Stewart Service was targeted again. Truman, Marshall and Acheson were criticised for allowing communists to work in government and shape policy. Revelations of real Kremlin spies gave credence to McCarthy’s witch-hunt, which not only destroyed innocent people’s lives and careers but also traumatised American politics. Truman was right when he said that ‘McCarthy’s antics are the best asset that the Kremlin can have’.26 Nonetheless it took years for the KBG and GRU the ancestors of the NKVD and the 4th Department to realise the value of McCarthy as an unwitting agent of influence and propaganda, discrediting to the liberal public opinion any suspicion of Soviet espionage as a mere far-right conspiracy theory.27

CHAPTER 14 OUR MAN IN YENAN

‘The chief of staff [of General Xiao Ke] gave a Japanese officer’s pistol to Michael [Lindsay] and a small pistol to me. He thought that they might be useful on the way in case we were surprised by the Japanese. He also gave Dr [Richard] Frey a pistol and we went into a side valley to practice shooting. Michael had used a pistol before and got quite near the target. Dr Frey thought he could shoot well as he was so big but result was not as good as he hoped. I was the worst. After I fired I thought I had shot myself until Michael shouted at me. “You fired too high”. Then suddenly I opened my eyes and realised that when I fired I shut my eyes at the same time. “The bullet must have gone over the hill and probably landed near the village.” Michael said I was too nervous. He taught me patiently and wanted me to try firing again.’1 It was February 1942, and Lindsay and his wife, Hsiao Li, had just escaped from Japanese-occupied Yenching. Now they were with the Chinese communist guerillas. The story of Michael Lindsay and his wife is a fascinating tale of the high-risk missions of an academic who was the only Briton with the communist underground and guerrillas. His narrative provides a unique glimpse of a secret war. Born in 1909, he was educated at Balliol College, Oxford, where he studied politics, philosophy and economics. As a research student, in 1937, he attended Keynes’s famous lectures at Cambridge.2 Michael Lindsay (later Lord Michael, 2nd Baron Lindsay of Birker) entered the wars for China in 1938. He keenly accepted Professor Wu Wen-tsao’s offer of a post teaching economics at the University of Yenching, under a program funded by the British Boxer indemnity

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funds. The Yenching University was considered the best of the missionary colleges in China. Lindsay wrote in his memoirs, ‘I knew little about China but I was very interested and accepted. Although the fighting had started in China and the future existence of Yenching seemed doubtful I arranged to travel via the United States . . . finally left for China in December 1937, sailing from Vancouver to Yokohama and travelling to Peking – I was going to the Japanese occupied area’. Lindsay would prove himself an academic with little regard for personal risk, an adventurer and a witness of combat in China, before being approached by Harmon of the SIS to work for the British embassy. Indeed, Lindsay’s account is full of details difficult to find in other sources, military or diplomatic.3 The president of the university was Leighton Stuart, a man ‘particularly skillful in dealing with the Japanese’, who would later become US ambassador in the closing years of the civil war in China. Lindsay described the conditions in 1938–9, the first year of the Japanese occupation: ‘At that time there was no problem in crossing from Japanese to Chinese territory so we took our bicycles on the train to Pao-ting, about one hundred and fifty miles south of Peking, and bicycled out into the countryside. After perhaps two miles we passed the last Japanese sentries and, about a mile further on, came to the first Chinese sentries. Travel was easy at this time of year.’ For the KMTregime, and for communist guerrillas, ‘foreign visitors were considered good publicity and we were given VIP treatment and taken on a tour of the area. Everywhere anti-Japanese meetings were being held and newly recruited troops being drilled. At that time Lu Cheng-ts’ao’s troops did not call themselves Eight Route Army, because of the public’s lingering suspicion of Communism, but had khaki uniforms with armbands inscribed: Central Hopei People’s Self Defence Army . . . we were invited to join in a raid on the Peking-Hankow railways and were able to see that the army, at this time, was not very competent. The unit we accompanied marched by day to a village five or ten miles from the railways and after dark set off on what should have been an easy night march, going due east across a flat plain. However a brief dust storm came up and the officers lost their way – they did not know how to find north from the stars and we wandered round for most of the night only reaching the railway at first light to damage two or three rails before making a hasty retreat.’4

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Lindsay wrote in his memoirs, which include many photos of his adventures in China: ‘the most exciting part of the trip (into guerillaheld territory) was the return to the Central Hopei across the PekingHankow railway . . . I set off on the first night with an escort of about a dozen men, but we had to turn back when we discovered that another party had raided the railway and cut the telegraph wires so a Japanese armored train was patrolling the line. Luckily the man in charge of me was an old Red Army veteran who distrusted the scouting ability of the new recruits. He went about a hundred yards ahead and, when he looked over a low embankment on to the railway, found a party of Japanese on the other side. We had to crawl back to cover with bullets whistling overhead. The Japanese were also inexperienced; the only person hurt was a soldier who was trying to mount his horse as a bullet hit the stirrup and twisted his ankle . . . When [two days later] I suggested that we could cross in daytime because the Japanese were not patrolling the line strictly this was finally agreed on. I was dressed in borrowed Chinese farmer’s clothing, two soldiers escorting me also changed into plain clothes with Mauser pistols under their shirts and carried a sack with their uniforms and my Western clothes. We had no more trouble, walked through a village where a Japanese flag flew over a sentry and, about two miles east of the railway, were safely back in Chinese held territory.’5 Once he returned to the university after this adventurous trip, Lindsay immersed himself in the secret war against the Japanese, helping the communist underground, taking advantage of his extraterritorial rights to smuggle radio spare parts and medicines to the communists. At the university he did not require his students to write a thesis. According to a Yenching university document, ‘[he] has also started on notes for a short book to be called Keynes for Beginners . . . This is to be based on ways of explanation which have been found helpful to his students during this past semester.’6 Nonetheless, Lindsay was not interested in economics but in helping the guerrillas as a secret courier and radio enthusiast. Westerners and their cars were not searched by the Japanese at the gates of Peking. Lindsay remarked: ‘Often [I] bought medical supplies and spare parts for wireless, adding certain items on my own initiative; in a book store in Tung An Shih Chang, I found a large textbook on the manufacture of explosives.’7 In the summer of 1939, Lindsay and Professor Ralph

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Lapwood, Chao Ming, a former student working for the underground, and Hsiao Tsai-tien, a labourer, crossed into guerilla-held territory. After a long trip they returned aboard a flight to Chungking, then to Hong Kong, and by boat via Shanghai to Tietsin and Yenching. By the end of 1939, Lindsay’s academic programme had not received new financing, and he accepted the offer of Harmon, the SIS representative, to become a press attache´ in the British embassy in Chungking. Of Ambassador Sir Archibald Clarke-Kerr, with whom he conversed, Lindsay wrote, ‘unlike many other diplomatists he was really interested in complete information.’8 The Japanese bombed the British embassy and downtown Chungking. Lindsay remarked that ‘the Japanese still did not want to annoy the Americans and declared a safety zone on the south bank round the American Embassy which they observed except for a few mistakes around the edges, and this made it possible to sit in almost complete safety watching a full scale air raid only a half mile away.’9 In autumn 1940, Leighton Stuart secured funds for professors to continue teaching in Yenching, and Lindsay decided to return to teaching and secret assignments with the communist underground. He described the conditions in rural China: ‘it was one of the curious things about the war in China that communication between the two sides was never fully shut off. Up to December 1941 there was regular travel via Hong Kong. Even later, travel between Peking and Chungking was not particularly difficult for Chinese citizens. One took the train to Chengchow, walked across some twenty miles of no-man’s land through the country devastated by the Yellow River floods of 1938 and was then in National Government territory. In 1942 many of the Chinese faculty moved to restart Yenching on the campus of the West China University at Chengdu and as late as 1943 once could post a letter in Peking and get a reply from Chungking within about six weeks. The Chinese Post Office prided itself on delivering letters anywhere in China and treated the Sino-Japanese war as it had previously treated civil wars.’10 While in Yenching, Lindsay again took the risks of a secret agent: ‘the pace of work for the anti-Japanese organisation increased during 1941. On several occasions I borrowed Dr. Stuart’s car to take loads of supplies into the countryside, and we also made preparations for the moment when we ourselves might have to escape into the mountains, buying a

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couple of rucksacks and rubber mattresses’ and other supplies. ‘Once I was asked to help in getting someone into Peking. My contacts explained that, once he was in the city, they had arrangements with a Japanese officer who would sell him a resident’s pass. The problem was getting him through the gate. I said that the Japanese had never stopped my motorcycle and if he sat on the back dressed like a Yenching student I could almost certainly get him through. Actually, the Japanese sentry looked at us rather curiously but the motorcycle had very good acceleration and I reckoned that I would have been far enough away had he started shooting. Later we learnt that the man was Wang Yu, head of enemy area intelligence in Chin-Ch’a-Chi’.11 Lindsay fell in love with his student and assistant Hsiao Li, who joined him in the secret scheme to help the communists. Eventually they decided to marry. Leighton Stuart announced their engagement. Two Chinese police officers appeared at Hsiao’s house, telling her parents not to allow their daughter to marry an Englishman; after all, Japan antagonised Britain. The Chinese police officers told them that the Japanese gendarmerie headquarters were furious. Nonetheless, Lindsay and Hsiao Li married on 25 June 1941.12 They spent their honeymoon at the university. Lindsay constructed three transmitters for three different communist units: each ignored the assignment of the other on Lindsay. Hsiao remarked, ‘our friends were also surprised that we did not buy things to set up a house of our own Michael thought that the Japanese were fairly certain to enter into the World War so that there would be no point in buying household goods we might have to escape at any time’.13 Michael often went to the British embassy to see friends in Peking.14 Hsiao Li wrote about the last months of peace: ‘October and November 1941 were a busy time in our secret life helping the Chinese guerillas. Michael and I hardly ever went to bed at the same time. Sometimes I practiced Morse code with him in the evening but usually I went to bed about 11 o’clock while Michael seldom got to bed before one o’clock or even later.’15 Lindsay proposed the British embassy an intelligence scheme: ‘for the last months of 1941 most people in Peking were expecting war to start between Japan and the United States and I thought it would be a good idea to have a British team in Chin-Ch’a-Chi sending intelligence information to the British army. My friend, Captain Hill, who represented British military intelligence in Peking fully agreed and

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proposed to send his signals officer and I got a message through to General Nieh Jung-chen who gave his approval. However, the War Office kept on asking silly questions such as whether we really knew that there was a Chinese held area where a British team could operate- so the opportunity was lost. In fact the allies only started to get intelligence from the Communist held areas after the US Army Observer’s Section had arrived in Yenan in July 1944. Much earlier information from the main frontline area adjoining Manchuria might have made an appreciable difference to the course of history. One of the factors which induced the Western powers to make far reaching concessions at Yalta to secure Soviet participation against Japan was a belief that the Kwantung Army in Manchuria was so strong that it might carry on independent resistance even after the invasion of Japan. Better information about the Japanese order of battle would have revealed that the Kwantung Army had been reduced to third rate reservists whom the Russians were able to defeat completely in some ten days of fighting. Dr Stuart’s plans to move Yenching to Chengdu were under way and he asked me to call a meeting of the foreign faculty to see who might be willing to bet out throughout Chin-Ch’a-Chi.’16 On Friday 5 December, Lindsay went to the British embassy. Most significantly, ‘the friend in the British Embassy had told him that war might break out that night so he felt he must out of the city before the gates were shut at eight o’ clock.’17 Nonetheless, Lindsay was surprised of the coming of war with the raid on Pearl Harbor. He narrated: ‘on the morning of 8th December my wife got up to listen to the Chinese language news from the British station in Shanghai . . . I managed to hear the German station in Shanghai saying that a state of war existed between Japan and America. I was ready to try to shoot our way out; several Chinese friends had left pistols with me for safe keeping. However, our cook appeared and said that there were no Japanese at the gates of the campus, so I hastily took the President’s car, picked up the Bands (William and Claire) and some suitcases of wireless parts and went out from the back gate . . . we abandoned the car short off the Japanese post at Wench’uan and walked off into the countryside, hiring a couple of farmers to carry our luggage concealed in their deep harvest baskets . . . Later we heard that the Kempetai had come to our house only ten minutes after our escape. Not apparently realizing how we had gone they spent several days questioning all our friends and warned that it would

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be a very serious offence to hide us.’18 Hsiao Li wrote of the frantic preparations: ‘Michael dashed into his workshop and threw a lot of radio parts into a big green suitcase and got all the pistols. He wanted to put in another big suitcase with his transmitter but left it behind because Claire Band said that it was too crowded in the car.’19 William Band and his wife Claire, who taught at the university, escaped with the Lindsays. Lindsay learned from a friend that when they discovered the transmitter the Japanese ‘were very angry and broke some of the furniture’. They told people that Lindsay if caught would be courtmartialled. Meanwhile, General Xiao Ke had telegraphed the communist undergraduate, inviting the Lindsays to his base-area, west of Peking. Meanwhile the Japanese arrested Leighton Stuart.20 Until October 1942, Lindsay and his wife lived in a village, Tiao’rh, close to General Nieh’s headquarters. Lindsay gave classes in wireless operations. ‘I had nothing to do with the coding of messages . . . In Japan in 1967 I met a man who had worked on monitoring enemy traffic during the war, who told me that it was only in February 1941 that the Japanese cryptographers managed to break the communist code. For nearly a year the Japanese could read Communist messages; and it was a year in which the communist armies did rather badly. However they changed their code which the Japanese still had not broken by the end of the war. By contrast, National Government codes were poor and the Japanese could read their messages throughout the war.’21 Lindsay took the decision to stay with the guerrillas to help them with the radio transmissions, and not to go to Chungking to be repatriated. Though surprised, his wife agreed to stay there with him. She was already pregnant with their first child.22 While at Chin-Ch’a-Chi, ‘we could observe the working of the intelligence system. At set hours in the afternoon, the chief of staff would receive reports of all Japanese movements. Peasants working near Japanese forts would report any increase or decrease in their garrisons or any movements of supplies, and nearby Chinese army units would pass on these reports by wireless or telephone. The result was that the Japanese were never able to make a surprise attack except on a very small scale. For any serious offensive they needed to concentrate troops and build up supplies and this would give us at least a week’s notice to hide or bury our own supplies and prepare to move . . . By contrast, Japanese intelligence about the Chinese forces was very poor. During their 1943

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offensive we captured a Japanese map dated the beginning of September, just before the offensive started. This had most things wrong. General Nieh’s Headquarters was shown at a village from which he had moved in April and the communications department centre was put at 1st. subdistrict Headquarters. I think I know the source of this last error. While I was working at 1st. sub. district a merchant appeared with a stock of batteries and other supplies and we were later told that he was a Japanese agent and must have reported the activity in rebuilding equipment.’23 He continued: ‘The defection of the head Yang Chengwu communications section was the one case I heard of when someone went over from the communists to the Japanese. In 1949 going through the files of a Japanese controlled newspaper in Peking I found other reports of communists’ desertions and surrenders; all were on a very small scale and may have been captured rather than desertions.’24 ‘I wasted a lot of time in the spring of 1943 trying to establish contacts with British Intelligence in Chungking. Before Mr [G. Martell] Hall (a banker of the Peking branch of City Bank of New York) left in October 1942, I had borrowed Dr Berthune’s typewriter, the only one in the area, and had written a long report which I asked him to give to British Intelligence and, if possible, to publish. Also with General Nieh’s approval, I had suggested plans for wireless contacts, allowing about six months for Mr Hall to reach Chungking and make the necessary arrangements. After we had no reply to our calls for several weeks I discovered the call sign of Chou Enlai’s station in Chungking and made contact but they refused to pass on any message for fear of trouble with the National Government, which did close down the station in 1944. When the Americans came to Yenan I learnt the true story. American Headquarters at Chungking had entrusted the contact to a station manned by operatives from Tai Li’s (Dai Li’s) organisation, the very organisation responsible for maintaining the blockade of the Communist areas. This shows General Stilwell’s extraordinary naivete´ in some respects. The Americans also classified my report and did not pass in on to the British though it was finally published in 1945 when John Service gave it to Amerasia.’25 Hall, who had escaped from Peking on 21 May 1942, was no friend of communism, but he reported of the Chinese guerrillas that they had high morale, had been launching an ‘incessant warfare’ against the Japanese and were supported by the people, being ‘the most nearly

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democratic government’ in China. The communists in his eyes were ‘young, decisive and decent . . . not really Communist, but agrarian reformers’ who sought to unite China.26 It was Lindsay who pressed the communist guerrillas to allow him to go to Yenan to help there in the construction of more transmitters and to plan intelligence-sharing with British and US intelligence.27 In May 1944, Lindsay, his wife and his newborn son, along with some fighters, reached Yenan, where Lindsay met with Mao and General Chu Teh (Zhu De). Soon he was appointed technical adviser to the Eighteen Group Army communications department. Later he became adviser to the English language service of the New China Agency. Lindsay witnessed the collapse of US Ambassador Hurley’s credibility when first he drafted a proposal, signed by Mao, that was turned down by the nationalist government, and took back his signature. According to Lindsay, Mao ‘asked whether I did not agree that they were hopeless people who must have a strong man on top to keep them in order. He also showed complete contempt for the judgment of the American experts and had quite uncritically accepted all the charges made against the Communists by Kuomintang publicity.’28 In January 1945, Lindsay’s father, A.D. Lindsay, telegraphed him via Chungking that Attlee was about to name him Lord Lindsay of Birker, wanting to know whether his son objected to this. Lindsay’s peerage meant that Hsiao Li would be one day be the first Chinese peeress in British history. Michael did not object, replying that he was not interested entering politics. On 11 January he telegraphed his father, ‘do not mind about title if you feel you can do useful work’.29 In his consultations with communist cadre, Lindsay argued for the Chinese to have an intransigent position toward the Americans, to maintain a firm stand by not just being ‘bad-tempered’ with the considerable delay noted in the delivery of radio equipment. Eventually the Americans provided them with the wrong tubes and spare parts. Lindsay persuaded Generals Peng Dehuai and Ye Jianyuing to protest about it, and to ask the Americans bring the right ones if they wanted intelligence and weather reports.30 Lindsay wrote (in Chinese) a forty-page report titled ‘What is wrong with Yenan?’ and submitted it to Mao and other top leaders. It was a bold move from someone who never feared the CCP taking action against him and his family. He wrote about the inefficiency of the

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bureaucracy in Yenan and about several cases in which the cadre were willing to correct deficiencies but where Party discipline prevented people from openly criticising. Lindsay believed in the value of open criticism as a first, necessary step for remedial action. For the British academic the communist theory was responsible for bad publicity. He completed his report one week before he and his family left for Chunking aboard a US transport. He also compiled a report for the SIS. Later, the Lindsays were informed that Chou Enlai read Michael’s report.31 In his report for the SIS and the British embassy, Lindsay predicted that the communists would win in the civil war: the KMT had a chance only if they adopted a land reform policy similar to the communist one.32 In November 1945, Lindsay and his family left for Chungking to return to Britain. Though General Nieh asked him to return to ChinCha-Chi to help him in the administration of Kalgan. Lindsay remarked: ‘We had a long farewell talk with Mao Tse-tung who reiterated his hopes that there could be a peaceful settlement.’ Once in Chungking, ‘my rather poor impression of British officialdom was confirmed.’ Indeed, ‘The Australians and the Canadians were keenly interested to learn everything about the situation in the Communist areas and we had long talks with them. In the British Embassy the only people who showed the slightest interest were Colonel Harmon of military intelligence and a former businessman on a temporary appointment. The ambassador gave us a formal dinner but was careful also to invite a National Government official and made no attempt to get information from us. We did have one short talk with General Carton de Wiart, who had been sent to China as Churchill’s personal representative, but what we said can have made no impression because he later wrote a book in which he stated that, throughout the war, the Communists had controlled a continuous area in Northwest China. Colonel Harmon’s experience showed us how far the Americans had tried to monopolize contacts with the Communists. When the Observers Section arrived in Yenan, Colonel David Barrett had brought a letter to me from Harmon saying that he would like to visit Yenan and asking me to find out if he would be welcome. I mentioned this to General Yeh Chien-ying who said that he would certainly be welcome, adding that, if the Americans were not passing on all the information they were getting at Yenan, he would be glad to give me copies to send to Colonel Harmon. I reported

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this in a letter that Colonel Barrett took when he went back to Chungking and had been puzzled not to receive any further communication from Colonel Harmon. In Chungking [once Lindsay, his wife and his two children were there] we learned that he had never received my letter. Presumably the Americans at Chungking had suppressed it. He [Harmon] had made repeated attempts to get to Yenan but the Americans always said that their planes were overloaded, though they often had room for an American correspondent. Finally, he was called in to see the ambassador and found Sir Horace Seymour with General Hurley (the envoy) who at once said that he had heard that Colonel Harmon had gone to Yenan against his orders. Sir Horace did not ask General Hurley why the American Ambassador (Hurley) should claim the right to give orders to a British officer in China, he only mumbled something unintelligible and Colonel Harmon was forced to explain that he never managed to get to Yenan.’33 Once in England, Lindsay published several articles in The Times about China and the policy Britain should follow. In 1946, Lindsay was invited to give a lecture at the Joint Intelligence Staff about China and Chinese communism. Lord Lindsay, his father, criticised the KMT as totalitarian in parliament. According to notes prepared for a meeting between Attlee and Lord Lindsay, his son was suspected of still advising the CCP on propaganda methods. Michael Lindsay was chairman of the Chinese Campaign Committee, considered the most active pro-CCP lobby, urging for normalisation of relations between London and Mao. Both father and son believed that the CCP would win over the KMT. For Whitehall, the campaign was staged by fellow travellers. Some considered Michael Lindsay an anti-American. In summer 1949, Lindsay visited Peking, noting the ‘doctrinaire tendencies’ of the new regime and the gradual end of free speech and press. In August 1954, the now Lord Lindsay accompanied former Prime Minister Clement Attlee to Beijing. Attlee criticised the way the CCP was suppressed dissent and the party’s authority over education.34 The Lindsays were the official interpreters. In 1958 the couple were refused visas to visit China because of Lindsay’s criticism of the regime.35 Michael Lindsay taught at the Australian National University and the American University until he retired in 1975.

CHAPTER 15 INTO MANCHURIA

The old Chinese scholar had a two-wheel cart drawn by two tired mules. He wore an old gown with long sleeves and was accompanied by a Chinese, probably his student or aide. It was dark when they passed close to a Japanese camp, but they were not challenged by any guard. The Chinese scholar was an American officer, Paul Fanning of the OSS. He had joined the Abraham Lincoln brigade in the Spanish civil war and was wounded; he had worked for Walt Disney before World War II. Postwar, he was an actor and playwright. Beyond his artistic life he was a man of the gun. He joined the Army and the OSS in China. As Caldwell remarked of Fanning, ‘he spoke little or no Chinese; he was fond of good living, full of good stories, and apparently did not know how to be afraid.’1 Fanning joined a near suicidal mission. Together with a Chinese, they parachuted in central Shansi province in order to connect with the guerrillas operating there. They found no fighters, and they had to hide by posing as a Chinese scholar and his aide. Fanning was wearing ‘a long gown and Fu Manchu whiskers’. They found a Peking-type cart with mules and for weeks they travelled. With his Leica, he took photos of any Japanese military installation they saw. The photos of Fanning, once reached the OSS in Chungking, disclosed that the stronger part of any Japanese camp was the one located in the east.2 Fanning kept radio contact with OSS headquarters in Xi’an and asked for help; he was suffering from dysentery and had little food to survive on. By radio he was directed to go to a cable bridge at the point where the Yellow river was flowing to the south, near the edge of the Ordos

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Desert or the Mu Us Desert, south of today’s Inner Mongolian Autonomous Region of the PRC; beyond the bridge, there was a small village held by nationalist guerillas. Armed with an old, inaccurate Russian map, Caldwell, ‘a surly and incompetent American radio operator’, and Major Chen, a nationalist officer, drove with a quarter-ton weapons carrier to find Fanning. They ignored Dai Li’s explicit order not to endeavour more than twenty-five miles beyond Xi’an without a special permit; besides, their destination was close to communist-held area ‘where the possession of Tai Li (Dai Li) passes could have been dangerous’, wrote Caldwell.3 After a long, arduous route they reached the village of caves. A Chinese led them to Fanning, who was ‘thin and tired but in fine spirits’. After Caldwell had killed a hare, Fanning offered to cook a dish he had learned while fighting in Spain. Caldwell took a note of his map; they had to be about thirty miles east of Yenan and decided to inform the communists that they were in the village.4 Since November 1943, Chinese Ambassador Fu Bingchang had been arguing, from Moscow, in favour of Chiang Kai-shek finding accommodation with Stalin. Chiang had directed him to tell Stalin that if Russia entered the war against Japan, China would sign a formal alliance with Moscow. Chiang sought to become friends with Stalin, fearing that a Soviet intervention in Manchuria against the Japanese would eventually see the de facto joining of Mao’s troops with the Red Army.5 Indeed, Sino – Soviet relations were tested with troubles in the Xinjiang province, the local Chinese governor being on good terms with the Soviets. In July 1944, Ambassador Fu explicitly warned the generalissimo: ‘The defeat of Germany depends on the Red Army, therefore Britain and America must depend on Russia. For our recovery and future we need friendship and help from our Allies. Russia knows its own position in the world situation is growing stronger . . . If we fail to win over Russia, Britain and America may sympathize with us, but they certainly will not split with Russia. Moreover, not all the sympathy is on our side.’6 In late 1944 Ambassadors Fu, in Moscow, and Gu Weijun, in London, informed Chiang of Soviet deployments in the Far East and of the danger of a CCP– Red Army alliance in Manchuria. General Guo, the military attache´ of the Chinese embassy in Moscow, met with a Soviet engineer who disclosed that Stalin and Churchill discussed China

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during their October 1944 talks; allegedly, Churchill had agreed for Stalin to use railway rights in Manchuria and Port Arthur after the Red Army had invaded Manchuria to defeat the Kwantung Army.7 Fu paid attention to British Ambassador Clark Kerr, who told him that as a precondition for uniting against Japan, Stalin insisted that the Soviet Union receive special concessions in the Far East.8 In any case, until mid March 1945 the Chinese remained unaware of the secret agreement during the Yalta conference reached with Stalin. Chiang Kai-hek was informed in May and Ambassador Hurley briefed him about the agreement on 15 June 1945. The generalissimo was about to negotiate the Sino – Soviet Friendship Treaty (concluded in August).9 In summer of 1945, Commander-in-Chief General Okamura Yasuji of the Expeditionary Army made a bid to avert the possibility of an unconditional surrender. He employed an arrested CCP agent to offer peace talks with the New Fourth Army. Allegedly, Mao authorised the secret contact. Three Japanese officers representing Okamura reached a CCP-controlled village in northern Jiangsu. The communist cadre heard their ‘ideas’: their army would not attack the Japanese or their collaborators, and all three would turn against Chiang’s nationalist troops. The Japanese China Expeditionary Army was about to be defeated; the Japanese would allow the New Forth Army troops to take over their areas. If the Nationalist troops were defeated the Japanese would not turn against their communist allies and would tolerate them building bases in the region. The Japanese received no clear reply. Okamura called for Mao to come to his headquarters for talks. Eventually, Mao dispatched Yang Fan, Director of the Intelligence Bureau of the Central China, to Nanking, and met with Major General Imai Takeo, Deputy Chief of Staff of the Expeditionary Army. In their talk, Imai made reference to a ‘partial peace’ with the New Fourth Army and offered eight new CCP bases in northern Jiangsu. He sounded confident that this type of agreement could be implemented in the future for North China and Manchuria – on the condition that the CCP supported the Japanese in the event of a US landing in China. After the Japanese surrender, on 16 August 1945, Chiang Kai-shek ordered General Okamura Yasuji, to employ his forces to maintain law and order, surrender arms to his advancing troops and confront the Red Army of Mao. In contrast the Imperial Headquarters in Tokyo ordered Okamura at the same time to ‘introduce red forces into China’ – i.e. surrender

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weapons and territories to the CCP –‘to incite conflict with American troops. This will create chaos in East Asia from which Japan will benefit.’ But Okamura ignored Tokyo and was determined to follow Chiang’s order. The race between the CCP and the KMT for the occupation of the cities and territories of China was on.10 Understanding that no deal could be cut with the KMT and the CCP for OSS to operate free in China – or at least with the least constraints – the always expedient Donovan took the risk of secretly organising OSS missions to gather intelligence in North China. In May 1945, the OSS cooperated with a network of Catholic Chinese in north China to fight against the Japanese under Thomas Megan, an American bishop based in Huayin, forty-five miles east of Xi’an. In 1938, Father Lebbe the predecessor of Megan, agreed with Dai Li in paramilitary cooperation against the Japanese; this Catholic force reached 500 troops. Nonetheless, in March 1940 Lebbe was kidnapped by communists and tortured. After the personal intervention of Chiang Kai-shek, who communicated with General Chu Teh, he was released, but he soon died of his wounds.11 The OSS ‘Spaniel’ mission was discovered by the communists and detained incommunicado for almost four months (the ‘Fuping incident’). The Dixie mission informed Wedemeyer, on 11 June 1945, that the standing orders of all communist troops were to arrest on the spot any US military personnel in their area of operations.12 On the eve of the dropping of the atomic bombs on Hiroshima and Nagasaki, the CCP was informed that Donovan would visit Chungking to discuss secret intelligence. Soong Ching-ling, the secret messenger of the CCP and sister of Chiang’s wife, had a meeting with David Shaw, an OSS Secret Intelligence officer. Soong told him that he should meet CCP intelligence representative to discuss OSS/CCP intelligence cooperation in North China. Shaw sounded positive in meeting. The next day, while Donovan was in Chungking, Shaw was informed that a meeting could take place. He had to disclose this to Quentin Roosevelt, the Secret Intelligence Branch head of the OSS and grandson of President Theodore Roosevelt. The meeting took place at Soong’s house; Wang Bingnan, the deputy of Chou Enlai, attended as well as two women, Zhang Xiaomei and Gong Peng (Chou Enlai’s aide for US intelligence relations). It was proposed for Shaw to meet and discuss with Mao.13

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The sudden end of the war with the Japanese surrender, surprised the OSS and Chiang, who rushed to succeed the Japanese in the areas they had occupied. After the Japanese surrender Dai Li went to Shanghai and ordered Wan Lilang and other collaborators to stay put and help with the handover of authority; the collaborators in Nanking were ordered the same, and assumed that they would receive clemency for their services. Once the Chinese nationalist forces had secured Shanghai, Dai Li invited the high-ranking members of the Wang Jingwei’s government personnel for a lecture, where his men killed them with machine guns. Others in Nanking were finally arrested and executed en masse. In those chaotic days in Shanghai. Paul Fanning the seasoned OSS officer freed political prisoners from a city jail saving them from execution - among them communists. Fanning would serve in US military intelligence until honorably discharged in 1953. On 15 August 1945, General MacArthur issued an order to all Japanese forces in China to surrender only to nationalist forces under Chiang Kai-shek. Mao and communist cadre in Shanghai were thinking of taking over the city, as happened in March 1927. Chiang ordered General Okamura to wait for the nationalist forces and to resist any communist attempt to take over Shanghai. Shortly after midnight on 9 August, the Red Army invasion of Manchuria commenced; three armies penetrated the Kwantung Army defences. The armour and mechanised divisions moved quickly, crushing resistance, surprising the Japanese staff officers who had underestimated the Russians’ capabilities. The Japanese assumed that the Russians would invade either in the fall of 1945 or in spring 1946. The Red Army divisions were ready for operations, deployed by 25 July; their deployment was concealed under the Red Army doctrine. Many highranking commanders moved to the front in junior officers uniforms so as not to raise Japanese military intelligence suspicions of the coming attack. Within ten days the Kwantung Army was destroyed.14 Early in the morning of 9 August, Pu Yi, the emperor of Manchukuo, spoke to Otozo Yamata, the last commander of the Kwantung Army, who made a bid to ensure him that the Japanese would be victorious. Nonetheless, ‘before he could finish speaking an air-raid siren sounded and we all went to the shelter’ Pu Yi remembers. The emperor added: ‘We soon heard bombs exploding nearby and he did not refer again to his confidence in victory before we parted after the all-clear. From that time

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onward I slept in my clothes, kept a pistol in my pocket, and ordered martial law in the palace.’15 Next day, Yamata informed Pu Yi of the need to withdraw Japanese forces so as to hold South Manchuria. Pu Yi had to move to the new capital, Tunghua. On 11 August, Pu Yi and his entourage departed by train; on 13 August they arrived at Talitzukou. Two days later he was informed of the Japanese surrender and prayed for the safety of Emperor Hirohito. Yoshioka, the trusted interpreter, informed Pu Yi that he would be smuggled to Tokyo by plane. In Mukden while they were boarding a plane, Russian forces raided the aerodrome. Pu Yi said of those 17 August events: ‘Before we had been waiting long, the airfield reverberated to the sound of aircraft engines as Soviet planes landed. Soviet troops holding submachine guns poured out of the planes and immediately disarmed all the Japanese soldiers on the airfield, which was soon covered with Soviet troops. The next day I was put on a Soviet aircraft and flown to the USSR.’ Pu Yi was handed over to the government of the People’s Republic of China in 1950.16 It was Stalin who, on 21 August 1945, effectively ordered Mao not to confront Chiang by taking over cities from the Japanese. He twice insisted that Mao go to Chungking to consult with Chiang. Mao, according to his official translator of Stalin’s messages, Shi Zhe, was ‘very distressed and even angry’ with Stalin’s stance on the matter.17 On 25 August, a Chinese Red Army detachment confronted the 27-year-old Captain John Birch and his team. Birch was a missionary sent by World Fundamental Baptist Missionary Fellowship, and had arrived in Shanghai in 1940. He was fluent in Mandarin, and his missionary work was in Hangzhou. After the attack on Pearl Harbor, the Japanese made a bid to arrest him, but he escaped to the Zhejiang province and continued his work. In April 1942, Birch met Lieutenant Colonel Jimmy Doolittle and his crew, who had crash-landed after their famed raid against Tokyo. He helped the party escape, and upon the return of Doolittle to Chungking, General Claire Chennault, being informed about Birch’s contribution to the safe return of Doolittle, commissioned Birch first lieutenant. Birch joined the 14th Air Force and was later assigned to the OSS, developing a network of Chinese informers to aid the pilots of Chennault. Nonetheless, he gained a reputation for being ‘too brash’, as Major Gustav Krause put it. By the end of August 1945, Birch was leading a team on a mission in Shandong province. He had been ordered to survey airfields for the 14th Air Force

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and to make contact with General Hao Pengju, who was a garrison commander and governor for the Japanese under the Wang Jingwei regime. Since April 1945, the OSS proposed for reconnaissance missions into Manchuria (Shantung, Hopei and Jehol provinces) with the objective of contacting puppet governors who ‘would take instruction and leadership from the U.S. Forces or the Central Government if they were approached properly.’18 Hao’s headquarters had already been infiltrated by CCP agents, who were trying to convince him to come over to their side and ignore Chiang’s order to stay put with his forces until the KMT forces arrived. Chungking cabled Hao that an OSS officer was coming to meet him. The communists intercepted the message, which led them to fear that the OSS mission would persuade Hao to wait for the KMT forces. The CCP then promptly sent patrols to intercept Captain Birch and his party. They stopped Birch’s team on three different locations. The third time, Birch had an argument with the head of a Chinese communist team; at one point he grabbed the Chinese by the sleeve. The Chinese outnumbered Birch’s party. His second in command, Chinese Lieutenant Dong, warned Birch to stay calm. He later testified that the American answered him: ‘Never mind, you don’t know what my feelings are. I want to find out how they intend to treat Americans. I don’t mind if they kill me. If they do they will be finished for America will punish them with Atomic bombs.’ Eventually, a belligerent Chinese presented himself as the commanding officer of the patrol. The Chinese ‘then ordered in a swearing manner: Load your guns and disarm him [Birch] first.’ Lieutenant Tung offered to disarm Birch himself so as not react and escalate the situation between them. The Chinese officer ordered his men to shoot Tung first. Someone opened fire and wounded Tung’s right leg, above his knee. The next shot wounded Birch, who was heard saying in Chinese that he could not walk. The Chinese separated them from their party and dragged them to the edge of a pit. Later, Birch’s bayonetwounded body was found with his hands tied behind his back. William Miller, the AGAS officer who eventually saw the body of Birch and drafted a report to General Wedemeyer, wrote that Birch’s ‘face was mutilated in order to destroy its identity. The job was so thorough that nothing but bone was left. His two false front teeth were also missing. The throat was also wide open from ear to ear indicating either that it was cut or that it had been hit from the side by a dum dum bullet similar

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to the one that lacerated Tung’s leg.’ Apparently the communist patrol assumed that Tung was dead. By 2 or 3 pm he was approached by a woman and told her that he was alive. She told him to stay silent because the communists had not left the place. By the evening he was picked up by peasants who hastily buried Birch. The furious Wedemeyer met with Mao and Chou Enlai in Chungking on 30 August. It was Chou Enlai who wanted the discussion not to reach more tension. He offered an American aeroplane to retrieve Birch and the OSS officers of the Spaniel Mission detained in Manchuria; they were returned on 8 September. The records of Birch’s death were to be declassified in 1972, but they remained secret out of fear that they could embarrass Beijing at the time of Nixon’s visit.19 Meanwhile, in another OSS mission in Mukden, the OSS team reported on the allied prisoners of war as well as of the coming of the Soviet Red Army in Manchuria.20 The Chinese communists did not disclose that another OSS mission – codenamed Chili, under Captain Wuchinich – was in their custody. Wedemeyer asked for help even from the Japanese Kempetai and, of course, from Dai Li to find the captain and his team. Born in 1907 and of Serbian descent, Wuchinich was a leftist who had fought with the Abraham Lincoln Brigade in the Spanish civil war. He had joined the OSS and was dispatched to Yugoslavia as a liaison with Marshal Tito. His bravery was rewarded with the Distinguished Service Cross. The citation read that the medal was given ‘for extraordinary heroism in connection with military operations against an armed enemy while serving with Company B, 2677th Regiment Office of Strategic Services, in action against enemy forces from 24 November 1943 through 26 July 1944, in the Balkans. Captain Wuchinich’s descent by parachute into enemy occupied territory, his leadership, and his resolute courage in the face of great peril throughout the extended period, in the successful accomplishment of an extremely hazardous and difficult mission, exemplifies the finest traditions of the military forces of the United States and reflect great credit upon himself, his unit, and the United States Army.’21 While on the Chili mission, Wuchinich opted to contact the communist guerillas. He and his party stopped at a Buddhist temple. He narrated the dramatic event: ‘When I was setting my radio set ready to send a message to headquarters, we were surrounded in a battle between the Communists, the Nationalists, the Puppets, the Mingbins, the Militia, who the devil knows. All the devil knows I had four guys,

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the war was over by August 15, and here were in the midst of the battle. The Communists won the battle and, in the process discovered that we were in the temple, and took us along with them . . . I say if the other side had won, I probably would have been a dead Joe by then.’22 Wuchinich and his team were released in late September. Nonetheless, the captain would face recriminations for being a spy or source for the NKVD. His name appeared in the Venona decrypts. Later he was named as one of the leading communists in Pittsburgh, Pennsylvania by the US House of Un-American Activities Committee. Wuchinich testified before the Senate Internal Security Subcommittee in 1953, but no evidence against him was found, and he was never accused of spying for the Soviet Union. He died in 1979.23 During the same days of war and peace in China, while promoting the Mao –Chiang meeting in Chungking, Ambassador Hurley heard that the nationalist government would ‘not guarantee’ Mao’s security. He flew to Yenan on 27 August. The next day, he returned to Chungking with Mao and Chou Enlai. The first was worried for his personal security; he was about to meet his decades-old enemy in person, Chiang Kai-shek. While boarding in Yenan, some US observers of the Dixie mission saw a nervous Mao as if ‘going to his own execution’. For the first time, Mao kissed Jiang Qing in public – as if it were a last kiss. In Chungking, Chiang rose early at dawn and met with his close confidants, telling them: ‘We shall treat Mao with friendliness and sincerity,’ and ‘in the political realm we shall be generous [but] militarily the unification of [government and Communist] forces must be thorough going and genuine; there can be no compromise.’24 In Chungking, Hurley and Mao were driven in a limousine. In the evening at a welcome banquet Mao and Chiang met. The generalissimo raised a glass of rice wine, saying, ‘We can have the cordial atmosphere of 1924’. Mao called him ‘President’, telling him that he would support him, his toast was for ‘ten thousand years to President Chiang.’ Chiang and Mao met nine times. They walked together in Chiang’s private garden, wearing the standard Sun Yat-sen tunics. Chiang argued his positions, but Mao was not willing to argue – amiably agreeing, or evading the topic at hand. After five weeks, Mao held a press conference: ‘I am confident of the outcome of the negotiations . . . The Chinese Communist Party will persist in a policy of avoiding civil war.’ In reality, while their conversations took place where courtesy ruled

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meetings, Mao and Chiang ordered their forces to reach and seize Manchuria. Stalin send message to Chiang which said that, according to the Sino– Soviet Treaty, Dalian was designated a commercial port in peacetime; thus he should not occupy it. 500 nationalist officials landed in Changchun, Manchuria to undertake local governing, but the Soviets who had reached the city did not allow them to come at their destinations in the region. Stalin informed Yenan to deploy five hundred thousand troops to Manchuria. Chiang persuaded President Truman to have the US Navy help with the transfer of his troops in Manchuria, to reach about 200,000. On 18 September, at a tea party, Mao pledged, ‘We must stop [the] civil war and all parties must unite under the leadership of Chairman Chiang to build modern China.’ The day Mao was to depart, he signed a general agreement with Chiang. The agreement encompassed: the restoring democracy, the convocation of a national political consultative conference and Chiang’s command over all Chinese forces.25 Robert Chapelet had worked for the Order of St. Bernard monastery in the Himalayas for eight years; he was a ‘China hand’. A Swiss subject, he had reached India, where he volunteered to serve with the British. Eventually he was offered to serve with the OSS. He was one of the few OSS officers who witnessed the liberation of Honan by the KMT forces once the Japanese forces had been withdrawn. The Chinese ‘started a reign of terror worse than the people had ever known under the Japanese. This continued until the Chinese commander stopped it and told his men he was ashamed of them’.26 In the meantime, Donovan rushed to send OSS teams in Manchuria to locate PoW camps and to gather intelligence of the coming of the Soviet Red Army. Team ‘Flamingo’ was to be sent to Harbin, but the city was overrun by the Soviets and the OSS mission was aborted. Team Cardinal reached Mukden and reported on the developing situation on 16 August 1945, under the command of Major James T. Hennessy. They discovered 1,321 Americans, 239 British and prisoners of war of other nationalities. Cardinal reported of the advance of the Eight Route Army on 7 September 1945, as well as the capture of Emperor Pu Yi – amongst else. The Americans requested they be represented by the French consulate under M. Renner in Mukden. By early October Reenner informed the US legation in Chungking of the threat to his and his family security by the Soviets. Soviet General Kavqun Stankevich was

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blunt towards the Americans: ‘This is to inform you [the OSS mission] that since you do not have a visa from the Government of the USSR, your papers may not be regarded as official documents. It is therefore ordered that by October 5, 1945 you be outside the boundaries of Manchuria’.27 Truman was no friend of the OSS; he abolished the service, with effect from 1 October 1945. On 3 October, 1,362 OSS agents from the Research, Analysis and Presentation Branches were transferred under to the Interim Research and Intelligence Service of the State Department. The remaining 9,028 agents and personnel were posted to the War Department, under Brigadier General John Magruder, the deputy chief of OSS, to work as the Strategic Services Unit (SSU); Magruder was an Old China Hand, having served as a military attache´ in China in the 1920s. The SSU/China was put for some months under the 7th Fleet command structure as External Survey Group 44. In spring 1946 the Central Intelligence Group was formed. With the establishment of the CIA, the ESD 44 was the first department of the agency for China. 28 In autumn 1945, Soviet intentions over China could not be discerned. Walter Robertson, the US Charge´ d’Affaires in Chungking (soon to become General George C. Marshall’s commissioner at Executive Headquarters, the structure to help in the mediation between the CCP and KMT), pointed out: ‘Immediate Soviet policies are not too well defined as yet, but performance right now is not encouraging. Too little is known about it, but we have enough evidence from other areas in the world upon which to base the assumption that what they may do in China will not be for our good but rather to our detriment.’29 By the end of August a ‘reliable Chinese official source’ gave the SIS an account of Japanese garrisons resisting communist advance in Manchurian and North Chinese cities.30 The SIS reported that around the middle of September the Russians provided Chinese communists with 200,000 rifles in Shanhaikuan. The 60,000 communists in Mukden had in their possession Japanese armour and machine guns.31 Colonel Harmon, the SIS representative in Chunking, reported on a conversation he had with Chu Hsin Min, a ‘Chinese expert on China’. He sounded optimistic that the Soviet army would withdraw in three months, but the communists and Moscow would ‘lend the other support as a “trouble maker” when one of them wished to extract something from the Central Government.’ Harmon reported that the only Russians in Yenan were a doctor and two Tass correspondents.32

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Meanwhile SOE and SIS officers reached Peking and Tietsin in mid September. The mission in Peking was led by Lieutenant Colonel Bridge, who had three other officers with him. One of them, Captain Stanfield, ‘in a casual conversation [with an OSS officer] admitted being a member of Force 136’. He, Bridge and Stanfield had lived in China before the war, and during the war they were first deployed to a British intelligence base in Kunming.33 Bridge was identified by the OSS as an ISLD (SIS) officer. He was killed in a US plane crash on a Chunking – Xi’an flight on 14 November 1945.34 The OSS noted the presence of Major Hardinge and Mr O. Mamen, a civilian who arrived in Peking, on 8 November, being attached to the British embassy. They were intelligence officers who planned to go to North China.35 The SIS had access to Mao’s Red Army orders. A secret report read: ‘We have received through MI6 (SIS) information graded as reliable reporting the move of certain Chinese communist formations from North China towards and into Manchuria. The report is based on a series of five orders issued by Chu Teh (Zhu De), GOC (General Officer Commanding) of the Chinese Communist Army and the source claims to have seen Orders Nos 2 to 5. Of these Nos 4 and 5 are unimportant exhortations to the troops to liquidate Japanese forces.’ According to orders No. 2 and 3, communist forces poured into Shangtung and to provinces Liaoning and Kirin. Other formations were ordered to go to China–Manchuria border areas. Order No. 3 directed formations based west of Yenan to go to Suiyan: ‘this latter move of considerable interest and possible significance’ the author of the report commented. Indeed, ‘These troops are oldestablished garrison formations that have long guarded the Communists’ western flank and their movement north may well indicate that the communists are abandoning their main base of Yenan’. It was not possible to estimate the strength of the formations on the move, but the reference to Chu Teh suggested about 200,000 troops. The available figures hinted that ‘something in the neighbourhood of 50 per cent of the total communist strength of 517,000 are under orders to move.’ It was deemed also ‘significant that only formations of the 18th Route Army (refers to 18th Army Group) are indicated by the GOC names and none from the 4th Army. If it is the whole of the 18 Route Army that is to move then about 375,000 men are to move north-east.’36 The SIS had a secret source whose informant was described as ‘wellplaced and reliable’. He claimed that the Peking puppet garrison had

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40,000 and the Manchurian about 50,000; they were ‘well-armed’ formations. The informant ‘thinks Chungking authorities probably have had lines open with Cheng Kung Po or Chow Fu Hai, if not both, throughout entire war and are confident of full puppet support in resisting communists throughout Central China. Situation in North China and Manchuria is more delicate and Lu Cheng Tsao and Chang Hsueh Shih are reported to have left for Manchuria as delegates of Yenan. Chang is younger brother of Chang Hsueliang (Xueliang). In any case this particular piece of information “should be treated with reserve.”’ Sources’ reports from Xi’an showed that the communists were moving to Manchuria with the objective of linking Central and North China with Manchuria. Finally, an ‘informant stated that Chu Teh wrote another letter to CKS (Chiang Kai-shek), in addition to that already published, which referred to CKS as tool of American imperialists. This letter [was] not published’.37 According to a new SIS source, who was on trial and who had obtained information from a puppet official and passed it ‘under reserve’, the communists in North Hopei and North Shansi had 180,000 troops under General Lu Cheng Chao; the army under Hsu Hsiang Chen was based in Hsiao Yang Kua Kou on the mouth of the Yellow river and reached 220,000 troops and operated in Chengtu, Shantung and North Manchuli. In central China, a communist army of 180,000, under Nieh Yung Tseng, was based in Hung Tseh Lake and operated in North Anhui, North Kiagsu and East Honan.38 In mid September British military intelligence reported that a unit reaching 2,000– 3,000 troops of the Eight Route Army had deployed in Mukden. There were clashes with the Manchukuo police, with casualties, but the town was generally quiet.39 In London conclusions were reached: ‘We consider that Russia will lose no opportunity of expanding her control over Manchuria during the 30 year agreement . . . attempting to “communize” the country through the Chinese communist armies since the Chinese Communists do not see eye to eye with Moscow ideology.’40 It was a perceptive forecast of the Joint Intelligence Committee on the coming rift between the cults of Stalin and Mao. The SIS had a secret source codenamed Ismael/Shalfleet. Utilising a network of informers, he provided a stream of reports on developments and Soviet deployments and policies in Manchuria. On 25 October

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1945, Ismael reported that ‘after the arrival of the Central Government officials in Changchun, the Russians, mindful of the Sino-Russian treaty, secretly told the Communists to withdraw to the outskirts of Mukden city and leave only a skeleton force behind so that the Communists can seize the opportunity of occupying Mukden city when the Russians withdraw. By this means the Russians will be able to evade responsibility for any future international repercussions’. Meanwhile, the communist troops around Tietsin and Peking had established an economic blockade, inhibiting the export of goods from their own area and imposing heavy fines for smuggling.41 In September and October as Mao stayed in Chungking discussing with Chiang, rumours spread in Yenan that the communist leader ‘was being held to make him yield to the demands of the Kuomintang.’ It was reported that ‘Some people believed that Mao had been arrested and was being held somewhere in secret even though the newspapers reported that he was still negotiating.’42 One could say that intra-party antagonists played with this theory. Eventually Mao returned on 11 October. He looked ‘tired and worn out’, but stated that peace was the only option for China. Some concluded that Mao did not negotiate with Chiang and gave him all that he wanted, including the concession that communist forces would be deployed north of the Yangtze. Hsiao Li, the wife of Michael Lindsay, noted that this was the first time there had been open criticism against Mao: ‘some of our friends told us that there had been a Party meeting which had discussed a motion of censure on Mao’s fitness to lead the Party and that he had only won by a fairly narrow majority. The critics argued that Mao had made important and immediate concessions on behalf of the Communists in return for nothing but vague promises for the future from Kuomintang and that he should have known that reactionaries can never be trusted.’ Mao insisted that he had to avert the civil war for the good of China.43

CHAPTER 16 AN AMERICAN GENERAL

‘If man does find the solution for world peace it will be the most revolutionary reversal of his record we have ever known’, General Marshall wrote in his Biennial Report as the Chief of Staff of the US Army on 1 September 1945. The general and later secretary of state who initiated a reconstruction plan for war-torn Europe was awarded the Nobel Peace Prize in 1953. George Catlett Marshall, Jr. was born into a middle-class family in Uniontown, Pennsylvania, and graduated from the Virginia Military Institute. He led troops as an infantry platoon commander during the Philippine–American War and several other guerrilla uprisings, and during the Great War he served in France as operations planner under General John J. Pershing, who became his mentor. After the start of World War II, on 1 September 1939, the day the German forces invaded Poland, President Roosevelt named him Army Chief of Staff. General Omar Bradley (and later Chief of the Joint Staff) served as Marshall’s secretary during 1940, never hiding his surprise at Marshall’s attitude towards his staff officers. Once, Marshall told Bradley, ‘when you carry a paper in here, I want you to give me every reason you can think of why I should not approve it. If in spite of your objections, my decision is still to go ahead, then I’ll know that I’m right.’1 For General Maxwell Taylor, Marshall had an ‘unnerving effect on officers around him . . . a general officer in his outer office betraying a most unmilitary agitation while awaiting his turn to pass through the door to his [Marshall’s] office.’2 Bradley admitted that ‘although I had known General Marshall for more than ten years, I was never entirely

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comfortable in his presence.’3 General Wedemeyer, Marshall’s chief planner before being assigned to China, concluded that ‘in all my contacts with Marshall, I found him as a rule coolly impersonal, with little humor. I know of many acts of kindness and thoughtfulness on his part, but he kept everyone at arm’s length. It was typical of him that no one I know, with the exception of General Stilwell, ever called him by his Christian name or was on terms of even the beginnings of familiarity.’4 Truman assigned Marshall the now retired Army Chief of Staff to mediate between the KMT and the CCP; the president warned his general that in the event of a breakdown in negotiations, the United States would back Chiang.5 Marshall knew that he was heading into a complex situation. And Chiang had prompt secret intelligence and knew of Truman’s warning to Marshall.6 On 14 August 1945, Stalin and Chiang concluded the ‘Treaty of Friendship and Alliance’. Soviet and Mongolian troops were occupying Inner Mongolia and other Chinese territory, after the defeat of Japan. Chiang accepted the independence of Mongolia, but could not avert for Moscow to commence supplying the CCP in Manchuria. On 10 January 1946, Marshall achieved a ceasefire between the PLA and Nationalist Army. No side respected this, and fighting erupted again. Throughout 1946, Marshall proved himself pragmatic and patient in his dealings with Chiang and Chou Enlai, who was the chief CCP negotiator.7 Marshall feared that Dai Li would provoke the CCP. In two meetings on 15 and 18 February, Chou Enlai told Marshall that the railroad police force was commanded by Dai Li, who was a loyal spymaster of Chiang. On 18 February, Marshall wrote Wedemeyer: ‘regarding the return of [Commander] Miles I failed to mention another very pertinent factor. At the recent meeting here of the Committee of Three to resolve the twelve-day stalemate at Executive headquarters over the opening up of railway communications, I found that the principal difficulty lay in the fear of the action of the party we had in mind [i.e. Dai Li] I should have mentioned this to you at the time because it should have a very positive influence on your conversations with Cooke’.8 Admiral Charles Maynard ‘Savvy’ Cooke was commander of US Naval Forces in Western Pacific and also advised Chiang Kai-shek. Marshall was clear: ‘I cannot go forward with the matter of resolving these various complicated situations like the one above referred to and like those that

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I have been engaged in for the past week and very acutely this afternoon with the injection of a Navy personality who adds fuel and flames to the fire. Please try to make this very clear to Cooke. It is a most serious matter. Far more so than I realised when I was talking to him during his visit here because it has now reached the proportion of almost blocking me in matters of tremendous significance to China, while the Navy side of the issue might well be considered entirely negligible in its importance. I am mentioning no names for evident reasons.’9 In January 1946, the Strategic Services Unit (SSU) reported that 2,000 Manchukuo troops were incorporated in the communist Eight Route Army in eastern Hopei. Large puppet formations were dissolved. The sub-sources of the SSU ‘implied’ that the Eight Route Army ‘would not depart radically from the type of guerilla strategy it had been using in North China.’ The sub-sources were named as a political vicecommissar Liu Lan-tiao in the Chin Ch’a-Chi border area and T’ang yen-chieh, the chief of staff of General Nieh Jung Chen. In any case, ‘Liu was unwilling to answer many specific questions and refused to let T’ang answer questions except those referred to him by Liu himself’.10 Colonel John Hart Caughey, Marshall’s executive officer, admitted years later that hopes of peace prevailed in the mindset of the mediator and his staff and influenced the way they analysed the impact of events, the Chinese leaders’ attitudes and the battle reports. He remarked that there was ‘high hope [for a coalition government] up until April [1946] . . . when Marshall came back to the US to put an arms embargo against the Nationalists because Chiang wouldn’t agree to let Truce Teams go into Manchuria . . . I don’t know when you would say the turning point [of the war] came . . . because Marshall didn’t leave until he was sure there was no hope and that was eight months later [from April 1946]. All during those eight months there was hope that one form or another would work . . . the whole year was a turning point.’11 Nonetheless, Caughey said that ‘many of the Generalissimo’s representatives . . . [indicated to] Marshall individually and privately that it was their thought that the thing [the mediation] would never work’. It seemed to the colonel that the Nanking government distrusted Mao and certainly would not like to see him in a coalition government.12 For Caughey, Marshall left no stone unturned in his mediation. He might have had more influence if ‘he had some US troops’ but the military presence ‘did not work with [General William C.] Westmorland

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in Vietnam. The situations were pretty much the same, incidentally.’13 Marshall grew more optimistic after the CCP and KMT agreed on a ceasefire on 10 January, but eight days later the CCP sprang a surprise, capturing two cities in Manchuria. Chiang grew more wary of Marshall, realising that the latter had not deplored the communists’ capture of the city of Yingkou.14 On 22 January, Marshall complained to Washington that he was not receiving valuable signals intelligence on the plans of the two opponents. Eventually, the Army Security Agency (ASA) provided intelligence disclosing Mao’s intentions; and on 15 August 1946 (after the massive nationalist assault) Mao ordered his negotiators to break off discussions. Nonetheless, the Soviet Union, as a signals intelligence target, was absorbing US resources; the personnel assigned to Chinese communications in Washington fell from 261 in 1946 to 112 by late 1949.15 However, intercepted messages from Chiang helped Marshall in the spring of 1946, alerting him to instances where the generalissimo had failed to abide by the agreements with him and Chou Enlai.16 Marshall worked through two main bodies: the ‘Big Three Committee’, with representatives of the KMT (Zhang Zhi-zhong and Zhang Chun) and the CCP (Chou Enlai). At a lower level there was an Executive Headquarters manned by three commissioners: the US Charge´ d’Affaires Walter Robertson, Yeh Chien-ying of the CCP and the KMT’s Cheng Kai-min – while more than 20 field teams comprising CCP, KMT and US officers reported on local engagements. Nonetheless, the Chinese officials played a blame game all along, sending conflicting reports to the effect that the other side had violated the truce. The credibility of the monitoring structure was rapidly collapsing, while leaks to the pro-KMT and pro-CCP press ascribing blame multiplied.17 Despite ceasefire violations on 4 February, President Truman was informed by Marshall that ‘affairs are progressing rather favourably’. The general appeared to believe in Chou’s good faith, which of course worried Chiang.18 Mao did not take a negative view of Marshall’s proposals – even of the latter’s idea of a US military training programme for the CCP (though eventually this failed to materialise). On 25 February, Chou and Zhi-zhong agreed on a phased reduction of their armies; in the interim (before an amalgamation of the CCP’s and the KMT’s forces), the nationalists would retain 14 divisions in Manchuria and the communists only one. This unrealistic agreement included a provision

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that the KMT would finally retain 90 divisions and the CCP 18 divisions.19 Chiang feared that Mao was playing for time and that he would not abide by the agreement. Marshall, however, sounded confident; he travelled to Yenan and to other cities in northern China; in Yenan was warmly welcomed by Mao himself, and by cheering crowds. He thought that his visits had had ‘most happy results’.20 Back in the mediation effort, on 20 March, Robertson finally got both Kai-min and Chien-ying to issue a joint order under the title ‘Measures to Stop the Submission of Misleading Reports’. It was a vain attempt to inhibit disinformation and deception. The KMT accused US officers of siding with their opponents (and a similar charge was made by the CCP about US liaison officers), while Marshall and Robertson tried to show impartiality; but in parallel they were blamed by Wedemeyer’s staff for manning the Executive Headquarters with pro-CCP US officers like Thomas Timberman and Henry Byroade. Wedemeyer had confronted Mao over the murder of Captain John Birch, and was deemed ‘reactionary’ by the CCP.21 Despite the flow of intelligence about the Russians handing over Manchuria to the CCP, Marshall (who had returned for a while to Washington) declared, wrongly, that the CCP and the KMTwere working towards the demobilisation and amalgamation of their forces. He assumed, again wrongly, that the withdrawal of the Russians showed that they had no intention of pursuing a hegemonic strategy. In fact, the handing over of Manchuria to the CCP was the main indication of future Russian policy: using the CCP as an a` la carte proxy, while maintaining diplomatic relations with the nationalist government. Mukden was briefly captured by CCP forces, but the KMT seized the city back on 13 March. On 14 April, the Russians withdrew from Changchun; a fierce battle between the CCP and the KMT resulted in the latter’s wholesale defeat.22 Marshall put strong pressure on Chiang to stop the infringements of the agreements. He returned to China on 18 April and explicitly warned the generalissimo that ‘stupid actions’, the violations of the ceasefire, were making the communists suspicious and defensive; they were becoming stronger by the day, and would eventually have the advantage. He added that the nationalist army’s lines were overextended and dispersed. Chiang replied with a long list of communist ceasefire violations since January 1946.23 Colonel Caughey wrote of Marshall:

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‘The General oscillates between Gimo [Generalissimo] and Chou. He’s a bit discouraged, I think. Has gotten to point where more frequently asks my opinion – a probable sign’.24 Despite the intelligence he received, Marshall had a wrong understanding with reference to Chou’s plans. The assumption that the fighting was a bid of the warring parties to get more on the negotiation table was right. Nonetheless, Marshall blamed ‘hard-line generals in the field’ for the escalation, while it was Chou who put pressure on Lin Biao, the commander of the communist forces in Manchuria, to take over Changchun.25 Initially, Biao sounded hesitant. In his letter to Yenan dated 13 May, Chou insisted: ‘a fundamental improvement in the situation is completely impossible, Chiang still has reservations about causing an all-around breakdown, but the danger has increased; perhaps half-peace, half-fighting is the most likely, but ultimately the issue will be decided by the relative military strengths of both sides, [so] we must mobilize the masses in preparation for the decisive battle’.26 Chou had a meeting with Marshall, reassuring him that the communists’ intent was not to hold all of Manchuria, but that they ‘desired international cooperation’ and sought to restart negotiations. The generalissimo, however, insisted on full nationalist sovereignty over Manchuria.27 Marshall did not believe that Stalin wanted to upset the evolving balance of power in China, claiming that there was ‘no overt act [of aid to the CCP] of the Russian Government’, assuming – improbably – that local Soviet commanders had simply handed over war materiel to the CCP without Stalin’s authorisation. A 13 May radiogram from Chou to Mao disclosed that Marshall had told the communist negotiator that he knew of ‘Soviet support’ for the CCP.28 Truman received from Marshall a report ‘on who [had] started’ the fight; the general claimed that it was the communists, who did not believe that the KMT would abide by the ceasefire agreements. In response, some nationalist generals had exerted strong pressure on Chiang to take decisive action; but the communists had ‘seized the advantage’, taking Changchun and blocking the advance of KMT forces to the north. In addition, truce violations by ‘local commanders’ on both sides occurred in other provinces. In addition, communist commanders took tactical advantage of the overextended nationalist lines by repeatedly attacking them.29

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Meanwhile, the US Navy was facilitating the transfer of nationalist troops to Manchuria (a total of 228,000 were transported at this time), but Marshall refused Chiang’s request for the transport of two additional armies – that ‘would amount to supporting a civil war,’ Marshall insisted – but he approved a six-month supply of war materiel to the 39 nationalist divisions armed and trained by the Americans.30 Chou pledged that the negotiations would continue. Chiang appeared willing to accept a ratio of 5:1 between KMT and CCP forces (instead of the initial 14:1), and to accept CCP rule in parts of Manchuria, though not in Harbin. Chiang had secured a 3:1 superiority, as Marshall had estimated; Chiang believed, wrongly, that he could defeat the CCP in 10 months at the most.31 Marshall told him that he had to accept CCP rule north of Harbin and where Manchuria, Outer Mongolia and Siberia met. Chiang believed, wrongly as it turned out, that he had a good chance of ousting the CCP by a campaign in the southern half of Manchuria.32 Changchun was retaken by government forces, but 100,000 CCP troops had already withdrawn on Mao’s orders. Chiang then ordered his troops to cross the Sungari (Songhua) River; only few forces made it and eventually had to confront stronger communist forces occupying higher ground; the nationalist advance stalled. The generalissimo had underestimated the strength of the CCP forces – one of his wrong assumptions was that only a third was armed with Japanese weaponry. Marshall who continued consulting with Chou in Nanking vainly called for Chiang to declare a ceasefire in order to ‘avoid the painful results of the previous mistakes’. In the end, the nationalist forces did not attack Harbin.33 Besides, Marshall was angry with the propaganda and rhetoric of both the CCP and KMT; both blamed the United States, and him personally, of aiding their opponents. A letter dated 23 May revealed to Marshall that the game of black propaganda was also taking place in Washington. Congressman Walter Judd attacked the general. There was the possibility that Chinese embassy staff (of the KMT) were involved in a smear campaign against him; it was reported that a ‘serious undercover rumor campaign in Washington to effect that you [Marshall] have been working with the Chinese Communists against Chiang and that this is the reason from present state of affairs [the escalation of war].’34 On 3 June, Chiang returned to Nanking and met with Marshall. He conceded a 15-day ceasefire but demanded that the communists agree

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to keep the peace in China during this period and that they abide by the February agreement on the reduction of their forces. Nationalist commanders in five separate warzones reported communist attacks within three hours of the commencement of ceasefire. The port of Qingdao in Shandung was surrounded by communist forces; Chiang asked for US Navy help in transporting his troops, but Marshall refused. Chou insisted that the communist attack was in response to the nationalists’ advance, and Marshall seemed to believe the allegation.35 The general had intelligence to the effect that the nationalist forces could not win over the communists in Manchuria.36 Colonel Caughey wrote that ‘the General [Marshall] is conferring to the point of exhaustion’.37 On the eve of the termination of the truce (which was extended), Chou shared intelligence estimates of KMT intentions with Marshall in a bid to persuade him to exert pressure on Chiang to call off the offensive. On 29 June, Chou submitted a precise report: ‘It is reliably learned that the Government will launch an attack on Communist Jehol area in the event the peace negotiation suffers a deadlock.’ The main bodies of the Nationalist 71st and 13th Armies were about to attack the city of Chengteh, and another force was to advance on Suichung and Chinsi. The 92nd Army would attack Kupeikou and Hsifengkou. Chou also provided the mediator with the cities’ map coordinates.38 The same day, Marshall took the pessimistic view that he had ‘no basis for further negotiations’, warning Chiang not to escalate further, otherwise he would lose the support of US public opinion. Communist attacks in Shandong and Shanxi led Marshall to tell Chou that they ‘undermined his efforts’ and prompted retaliation by the nationalist government. He deemed communist actions ‘wholly inexcusable’.39 The endless conferences were exhausting for all concerned. ‘How the General stands it is beyond me,’ wrote an admiring Colonel Caughey.40 He was also confused about developing events and the key personalities, writing on 29 June: ‘at this critical moment the Generalissimo has decided to attend a party instead of seeing General Marshall as was planned at this time. It is very hard to understand things that happen in this part of the world. I haven’t yet been able to begin to understand them. There is something that is beneath it all that is so completely foreign to occidental mental processes that almost the whole picture is lost. Who wants to fight whom, and if so why, remains a question that I doubt

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will ever even be told by the history books. It seems to be based on something else than logic.’41 Marshall was leaning towards the conclusion that Chiang was more responsible for the escalation in the fighting than the CCP, and that fullscale civil war had already commenced.42 In an 11 July letter to Truman, Marshall commented of ‘unproductive’ talks covering a series of issues, from the treatment of peasants and landlords in communist-held territories in Manchuria to local confrontations between government forces and the communist forces.43 On 17 July, Colonel Caughey wrote in his diary: ‘Situation seems to get worse. More meetings and more futility all the time. I don’t see how the general stands it.’44 The extended ceasefire declared by Chiang expired, and he launched full-scale assaults against the CCP forces in Shanxi, Jehol and Kalgan in Jiangsu (north of the Yangtze). The same month the CCP’s ‘Red Army’ was renamed the ‘People’s Liberation Army’ (PLA), and launched counteroffensives; but outside Manchuria it gave the impression that it could not cope with the advance of the KMT’s forces.45 Marshall was supposedly becoming ‘more depressed every day’, but he still appeared to believe that the issue of the ‘terms for the amalgamation’ of the PLA and KMT forces were ‘80 or 90 per cent solved’. He sidelined General Wedemeyer, and eventually John Leighton Stuart, a former dean of Yanjing University in Peking, was named US Ambassador to China. However, a security issue haunted Marshall and the legation. The ambassador did not much trust his embassy officials and relied on a young Chinese secretary inherited from his days at the university whom embassy officials feared was working for either the Zhongtong or the CCP.46 On 18 July, at a meeting with Chiang, Marshall spoke of the ‘uncontrollable civil war’ and the impact of the assassinations of the Democratic League leaders by nationalist suspects; the League had been criticizing Chiang’s regime.47 President Truman put pressure on Chiang, warning him (following Marshall’s suggestion) that he would lose the backing of US public opinion if he continued to escalate the fighting, and the State Department started blocking military aid to the KMT. Marshall informed Chou that the US had ceased ‘almost every direct support’ to the nationalists.48 Marshall assumed that the CCP’s part in escalating the war was the result of ‘liberal elements’ losing influence in the party’s top echelons.

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By the autumn, the nationalist government’s forces had attained most of their objectives, and Chiang was optimistic about the outcome of the war; Marshall, meanwhile, continued consulting with Chou. According to a book, Marshall in China by John Robinson Beal (who had been Chiang’s news adviser), in a conversation with Chou, Marshall had admitted that US intelligence intercepted Russian communications with Shanghai’s communists, calling for anti-US propaganda.49 Allegedly, Marshall told Chou that the United States ‘would lose that source’ after having passed on that information.50 Given the post-civil-war polemics against Marshall and Truman and their China policy, it is difficult to credit this allegation of leaked intelligence, especially when it involved a US general of political astuteness and with long military experience. In fact, Marshall always issued instructions to curtail leaks whenever possible.51 On 22 July Truman was informed by Marshall of the ‘dangers of present fighting . . . heading directly into uncontrollable civil war’, for which Chiang would bear a large measure of responsibility. Nonetheless, Marshall concluded his dispatch to the president on a purposely optimistic note: ‘The situation is critical but through [Ambassador] Stuart’s great help we may be able to bring about an end to this confused and tragic mess and pass into the acknowledged great difficulties of political negotiations but without violence and the danger of complete chaos.’52 Nonetheless, three days later Ambassador Stuart informed the State Department of the military deployments of the adversaries, which alarmed Washington: the ‘general situation indicates imminent approach state [of] full scale civil war’. The Nationalist 54th and 73rd armies had secured the entire Kiao-Chi railway line from Changtien to Poshan’s coal mines, and the cities of the north bank of the Yangtze had come under fierce nationalist attack. Battles were reported at Huangchiao, while in the Hunan-Hubei area the communist forces broke through the nationalist cordon at the Hsinyang to reach for southeast Shensi, where they could conduct guerrilla operations. In Shansi, some 80,000 communist troops had surrounded Tatung.53 US military personnel were now being targeted by communist guerrillas. On 24 July, near Tietsin, seven picnicking marines were captured on charges of espionage; they were released three days later.54 Nonetheless, after another two days, a US marine convoy of 11 vehicles,

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manned by 55 troops transferring humanitarian aid, came under attack by a 300-strong unidentified force 50 miles north-west of Tietsin – it was later proved that this was a communist detachment. The officer in command and two enlisted men were killed, and six other marines severely wounded.55 Marshall informed Truman that Chiang would not change his mind that now was the time to employ full force against the CCP; the generalissimo would try to reach an agreement, but in parallel he would not cease hostilities.56 In his 23 August letter to the president, Marshall remarked that ‘the military situation naturally grows more serious day by day’ and that there was a strong possibility of battles in Jehol, northeast of Peking.57 On 30 August, Marshall wrote that his and his staff’s estimates, together with those of some of the most experienced foreign correspondents, all agreed: ‘The Government militant leaders feel that they can settle the matter by force or at least can gain favourable advantages of position by force in the near future which will compel the Communists to make the desired concessions in order to terminate fighting. The Communists have practically reached the conclusion that the Government does not intend to settle matters peaceably and is deliberately pursuing a policy of force.’58 ‘Leading military participants’ of both sides seemed to concur that several months’ fighting was ‘a necessary procedure looking to an acceptable adjustment’ – but they did not discuss, nor seem to examine the case for, an overt or covert Soviet intervention.59 In early autumn, the generalissimo insisted that his forces had to take Kalgan, which was only 150 miles from Peking, while he privately believed that his peace offer to the CCP could not be accepted; he had manoeuvred communists into saying ‘no’ and thus into taking the blame. Truman declared an embargo to the supply of arms and war materiel to Chiang Kai-shek, having been advised that he had the advantage over Mao on the battlefield. The president sounded angry because Chiang was not listening to him to limit hostilities and reach a settlement with the communists. The embargo started in September 1946 and lasted for eight months, but the large part of war materiel had already reached Nanking.60 Marshall was furious with the CCP, writing to Truman: ‘the present practice of the Communist Party to attack publicly in official

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propaganda the integrity of my actions and at the same time privately to appeal to me to continue in my efforts to mediate must cease immediately for I would no longer tolerate such a procedure of duplicity . . . if they had lost faith in the integrity and honesty of my actions they have only to inform me and I would withdraw immediately as mediator.’61 Truman understood the seriousness of the situation and tried to encourage Marshall, responding: ‘Have read your [telegram number] 1549 23rd [of September] with great interest. I have the utmost confidence in you. I know you can “pull the chestnut out of the cross fire”. If it can be done at all.’62 Marshall could not avert the generalissimo’s bid to take Kalgan. He asked to be recalled but was eventually talked out of this by Chiang and Chou – each of whom had his own motives for wanting Marshall to stay. On 10 October Chiang made a conciliatory declaration to the CCP, but that same day his troops took Kalgan; the PLA lost about 100,000 troops, and the remaining communist forces in Manchuria were now separated from their Yenan base. Chiang predicted, over-optimistically, that he could beat the PLA in five months. On 25 October, the nationalist troops took Andong, on the Korean border.63 On 10 October, as the KMT troops stormed Kalgan, Marshall wrote to Truman of the communists’ suspicion of any proposal of Chiang for negotiations over the formation of a General Assembly. Marshall remarked: ‘The Communist reactions are somewhat psychoneurotic, induced by an overwhelming suspicion and the feeling that the life of their party is being threatened by military and secret police action of the Government.’ Chou was demanding that KMT troops return to where they had been on 13 January 1946, in China proper, and on 7 June 1946 in Manchuria.64 Chiang surprised the Americans by calling for the formation of a General Assembly on 12 November, without an agreement with the CCP and without ceasing hostilities.65 A furious Chou told Marshall that Chiang had put forward ‘unacceptable terms’ amounting to a PLA surrender, while ‘determinedly pursuing a full dress military campaign’.66 The communists’ chief negotiator was recalled to Yenan. Marshall urged Chiang to cease operations in Andung and Shantung, but to no avail.67 The Assembly convened as planned, drawing charges of illegality from the CCP.68

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Chou now feared, as he told Marshall, a large-scale nationalist offensive against Yenan; he asked the Americans to arrange the safe and prompt evacuation of CCP delegations in Beijing, Nanking, Shanghai and Changchun. Marshall agreed to help, but stated: ‘I have no information of Government plans for attack on Yenan and would deplore such action and would oppose it strongly.’69 (Eventually, in March 1947, KMT forces sacked Yenan). The CCP delegates in contact with Ambassador Stuart insisted that Yenan was under serious threat, while Marshall was blunt with Wong Wen-hao, the Deputy President of the Executive Yuan, who had asked for more US credit: ‘it was useless to expect the United States to pour money into a Government dominated by a completely reactionary clique bent on exclusive control of government power’.70 On 6 December Chou insisted (in vain) that while Marshall’s mediation should continue, Chiang should withdraw his forces to where they had been in January 1946 and dissolve the National Assembly he had summoned in November. Marshall finally realised that this marked the end of his mediating effort: the warring parties had locked themselves into the battlefield.71 In late December 1946, British Ambassador Stevenson informed the Foreign Office that the US Ambassador had told him in strict confidence that Chiang had been pressing Marshall, even imploring him ‘to accept the post of chief personal adviser to him . . . the General could make no greater contribution to the peace of the world even if he were to become President of the United States.’ Marshall ‘excused himself on the ground that he was not temperamentally fitted for such a post’.72 It was a trick by Chiang to tie the United States to his side completely by having Marshall serving his regime. Marshall wrote to Truman: ‘What I did not say to the Generalissimo was that I felt there was bound to be a consideration in the matter of holding me here to increase the possibility of American support and to indicate the United States Government’s heavy backing of the Kuomintang Government.’73 The general had no doubt of ‘the rottenness and corruption in the lower echelons of the Kuomintang [KMT] . . . there was little hope for correcting such a condition except on the basis of a genuine two-party government.’74 Lieutenant Colonel Francis McQuillen of the Marines assessed perceptively that ‘long range objective of Communists is to sap

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strength government and wait for Kuomintang to discredit itself throughout China.’75 On 7 January 1947 the White House announced Marshall’s recall, and that same day the general issued a statement putting more of the blame for the failure of his mediation on the CCP than on the nationalists.76

CHAPTER 17 THE JAPANESE FRIENDS

In August 1946, the SSU reported an astonishing find, embarrassing British intelligence: ‘Major General H. Kawamoto, former chief of the Japanese Military Mission in Shanghai, is reported to be in London now under the secret protection of the British authorities. [. . .] During the war he had close contact with Allied agents including underground workers from Chungking, and enjoyed high reputation among some of these elements. He was watched by the Japanese Gendarmerie which suspected him of harbouring Japan’s enemies under the pretext of his duties as a collector of information. [. . .] After the war several conjectures were made in relation to his status as he was not arrested as a war criminal. He finally managed to leave Shanghai in civil guise . . . It was rumoured that he departed for England accompanied by special agents of the British Government.’1 Japanese officers and specialists were investigated for war crimes, but in the war for China they were considered valuable assets. Chiang Kaishek and Mao Tse-tung were always expedient in their strategy against each other, and they were not willing to exert vengeance on the Japanese who belonged to secret services and had networks which could be taken advantage of. Upon the end of the war, General Okamura Yasuji, the Japanese supreme commander in China, began to offer his services to the KMT. Notably, a year or so before the end of the war a rumour had circulated that Chiang Kai-shek would cooperate with Japanese generals and their troops to confront the CCP. Okamura, from his headquarters in Nanking, remained in radio contact with Japanese units, directing them

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throughout the civil war.2 An aide to Chiang’s brother-in-law, H.H. Kung, admitted to American journalists that the Japanese ‘are on our side now. Why waste their talents by arresting them now?’3 Okamura was the officer who received the Imperial General Headquarters Order Number 575 in December 1941, called the ‘Three Alls Policy’ in north China, aimed primarily at breaking the Chinese Red Army: ‘kill all, burn all, loot all’. This order led to the deaths of more that 2.7 million Chinese.4 Okamura had been a Japanese ‘China Hand’. In 1925– 7, he was military adviser to warlord Sun Chuan-fang in North China. In 1928, as commanding officer of a Japanese infantry regiment, he seized Jinan, where eventually KMT and Japanese forces clashed and the Japanese massacred about 2,000 Chinese (the ‘Jinan incident’).5 In 1932 Okamura was appointed deputy chief of staff of the Japanese Expeditionary Forces in the attack on Shanghai. A year later he represented Japan at the signing of the Tangku Truce. From 1937 he served in command positions in China. In 1944, Okamura was overall commander of Operation Ichigo, and a few months later he was appointed the commander-in-chief of the China Expeditionary Army. After the end of the war he attended the official surrender ceremony, in Nanking, on 9 September 1945. In July 1948 he was put on trial as a war criminal in Nanking, but after a personal order of Chiang he was not convicted; he acted as Chiang’s military adviser until he returned to Japan in 1949. A year later Chiang proposed that he take the post of senior training officer in the Research Institute of Revolutionary Practice in Taiwan. He died in 1966.6 After the official Japanese surrender in Nanking, Shanghai and Tietsin, the Japanese troops were not disarmed but assigned garrison duties as well as to the security of railways and commercial hubs. Evidently, Chiang wanted them to act as his troops in the war against the communists. John Melby, a diplomat in the US Embassy in Nanking, estimated that about 80,000 armed Japanese troops were serving the KMT as late as January 1947. In the north-western province of Shansi, warlord General Yen Hi-shan employed Japanese officers and soldiers to help combat the CCP.7 Melby had graduated in 1934 from Illinois Wesleyan University and had received a master’s degree and a doctorate in political science from the University of Chicago. He had joined the Foreign Service in 1937 after serving in the US embassy in Moscow; in

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1945 he was assigned to China. Later he was tasked to write the State Department’s China White Paper, but soon fell victim of McCarthyism. Under Operation Magpie seven OSS agents, headed by Major Ray Nichols, landed outside Peking on 17 August 1945. Dick Hamada, who participated in the mission, remarked: ‘There were about twelve soldiers with bayonets, surrounded us. As I parachuted I could see the soldiers in a skirmish surrounding the field. When we landed, a truck with a white flag and about twelve soldiers came up to our site and greeted us rudely. None of us had a rifle. All we had was sidearm because we were told that the Japanese were surrendering. But, apparently, the word never got to the lower echelon. They said, “The war is not over, so get in the truck.” So, Major [Ray] Nichols, Lieutenant [Malhon] Perkins and I got into the truck and they took us to their headquarters. When we got to the headquarters, Nichols informed the commanding officer of the day that the war was over. He likewise says, “No, the war is not over.” Eventually the OSS mission met with General Takahashi who said that in a couple of days he would release allied prisoners, after being ordered by Nanking. The Americans agreed to go to a hotel where they would stay. As Dick Hamada witnessed: ‘no sooner we got into the car, someone fired a shot at us, but nobody got hurt. The general came out and looked around; then turned to the Americans: “If you people had landed about this time, [it was getting dark] I’m sure all of you would have been killed. Please, don’t go roaming around after you get in the hotel. Stay at the hotel. I will send two of my gendarmes to take care of you. If you want to go anywhere you tell the gendarmes that you want to go and they’ll take you. Then you’d be safe.”’8 Most significantly, Nichols reported that the aim of the meeting was ‘to establish relations with the Japanese and to explore intelligence possibilities.’ Eventually, Takahashi agreed ‘to furnish us with intelligence on any subject we desired.’9 The intelligence alliance with the Japanese had been gradually taking shape. A Strategic Services Unit (SSU) field team discovered that armed Japanese served the KMT. The Americans put pressure on the Chinese to disarm them. Eventually, as John Hersey of the New Yorker witnessed: ‘In one instance, an American field-team representative discovered [that] the [commanding KMT] General disarmed the Japanese by day and rearmed them by night. Again in response to an order from Chungking [the KMT] to get on with the disarmament, he disarmed several units of Japanese, had a photographer take pictures of the stacked weapons and

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the disarmed Japs, sent the pictures to headquarters to show that he was carrying out instructions and then gave the arms back to the Japanese. He (the General) labelled some Jap troops ‘railway repair labourers’ and sent them fully armed, to repair railroads in the hills east of a town named Laiyuan, where there were no tracks but where there were lots of Communists.’10 General Takashi Nemotsu, the Japanese commander in Peking, treated Chiang’s delegation with arrogance when they arrived to accept the surrender of the city. The Japanese officer – who, like many Japanese, felt that they had not been defeated by the Chinese – demanded money and privileges for him and his staff; otherwise he would hand the city over to the communists. To alarm the KMT delegates he had ordered Japanese troops to arrange for explosions in the suburbs during his ‘surrender’ negotiations in order to show that he was the one who could save the city from the advancing communists which supposedly had commenced bombings.11 The Juntong operated a signals unit in Shenyang (named ‘Special Research Society’) intercepting Yenan’s signals communications. The Juntong station employed more than 20 Japanese cryptanalysts who had experience in Chinese signals (because they had served in the Imperial Army’s expeditionary headquarters). Nonetheless, despite their efforts, they could not break the CCP codes, and by the end of 1946 this unit was disbanded.12 A ‘new source on trial’ told the SIS: ‘Previous to the capitulation of Japan, considerable quantities of arms and ammunition were secreted in dugouts constructed beneath the premises in Changchun formerly serving as Japanese army headquarters. It is generally believed that work upon these dugouts and other underground chambers which are known to exist in the suburbs of Changchun extended over a period of four years, the excavations having been carried out in strictest secrecy. A certain Major General Aoki formerly of the Japanese Imperial Army who has now identified himself with the Chinese Communist 8th Route Army claims that there are still in Manchuria vast caches of supplies and equipment even exceeding in bulk the unconcealed supplies and equipment removed from the country by the Russians . . . the bulk of the material left behind by the Japanese is concealed in the mountainous regions previously held by the Kwantung Army.’13

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It was also known that Colonel Nakamura (aka Mah), the former head of the Japanese Gendarmerie Training Group, was now serving as an assistant to Colonel Mong of the Nationalists’ Third Army Intelligence Service, while at least three Japanese ‘fascist’ underground organisations were spreading anti-American propaganda. In order to stir up Chinese sentiment, the Japanese declared that China would be divided into American, British and Soviet zones. The ‘spheres of influence’ would be: North China to the Soviets, Central China to the United States and South China to Britain. One notorious organisation was the ‘China Black Dragon Society’ which, together with other groups, was investigated by the SSU.14 Intelligence showed that ‘on orders from higher command, Chinese Nationalist Forces have recently recruited Japanese who were in intelligence work for their own intelligence staffs. The main effort was directed toward the Japanese 1420th Buta (North China Special Garrison), which was the group organised to formulate anticommunist strategy through all armed units in North China. Few, if any, Japanese went voluntarily to the Chinese Army.’15 Ironically, the Japanese top brass did not appreciate the quality of their intelligence officers as the Chinese did theirs. Lieutenant-General Arisue Seizo, Chief of the 2nd Department (Intelligence) of the Army General Staff in Tokyo from August 1942 until the end of the war, admitted that ‘the dregs [i.e. officers] were thrown into the intelligence service. There was no way of choosing’ intelligence officers. The low ranks in the intelligence services received minimal training; the fact that they spoke a foreign language was essential to their selection. Japanese officers who were trained in foreign language were assigned in intelligence. The few graduates of the Nakano Special Military Officer’s School were deemed inexperienced with no real knowledge of the subject.16 In May 1946, John Hersey, the New Yorker correspondent, published an article on consultations held by US marines based in Tietsin with Japanese officers working for the KMT: ‘One day several weeks ago I was invited to attend an extraordinary conference between some Japanese who had been working with the Marines on repatriation and some American intelligence officers. The conference was held in the sitting room of Japanese headquarters in Peiping [Peking/Beijing]. Tea and cookies were served. Pleasantries – monstrous ones, they seemed to me, as I thought back to certain events in the Pacific – were exchanged

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between American Intelligence officers and the Japs. Then a stubby Japanese colonel named Sasai . . . began to speak of movements and attacks made by Communist troops in the areas south of Taiyuan . . . Sasai spoke just as if he were taking part in a field conference during a campaign and the Americans were his fellow officers . . . On the way home from this conference, one of the American Intelligence officers remarked, “Those Japs are going to be our allies in the next war – I’ll bet money on it. They talk our language.”’17 Nonetheless, it was reported that ‘illegal acts against Japanese are continuing involving such actions as slapping, forced public kneeling, and payment of squeeze for moving furniture from one place to another.’18 Meanwhile, by early spring 1946 Dai Li feared that Chiang Kai-shek would make plans to abolish the Juntong. He thus tried to gather support by visiting some the commanders, remaining on excellent terms with the US Navy and Admiral Miles. Nonetheless, Chiang invited Dai to a top brass meeting – the meeting in which he feared that Chiang would announce the end of Juntong. On 19 March, Dai Li ignored the pilot’s warning and ordered him to fly from Qingdao to Shanghai to visit yet more commanders and gather support. They left at 0945 hours. On a rainy day, the villagers of Daishan witnessed the crash of the aircraft and the explosion. Chiang, Marshall and Chou Enlai were informed of the death of the spymaster. Chiang is said to have wept on hearing the news; he had lost a fanatical servant. But Dai’s antagonists within the intelligence services were more than happy. Some newspapers, without evidence, said that he was killed in a sabotage operation instigated by either the OSS or the communists. Some other journalists claimed that he had faked his own death and escaped abroad avoiding the retribution of his many enemies. His body was identified by the Juntong agents. A .38 pistol, a gift from Miles, was found on him. The Juntong of Dai Li soon divided into factions and cliques. This organisation losing to Zhongtong, was renamed the Bureau to Preserve Secrets of the Ministry of Defense. Admiral Miles asked for Marshall’s permission to attend the funeral of the spymaster; the general refused to allow him to wear his uniform on the grounds that the new phase of the civil war had commenced and the United States should not be seen to be siding with the Chiang regime. Miles attended in civilian attire.19

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Immediately after Dai’s death the X-2 Branch (Counterintelligence) of the Strategic Services Unit noted the rise in activities of all KMT intelligence organisations, in particular of the Jungtong and the Zhongtong. On Juntong, the SSU reported that though it had been claimed that it was dissolved, it ‘has made considerable progress in securing cover by transferring personnel to other sections’ to be employed in the same intelligence and counterespionage functions. Setting up trade companies was a usual cover for secret stations within cities. The report emphasized that ‘a greater degree of cooperation has been observed among the various Chinese intelligence gathering agencies.’ Nonetheless, ‘the liaison and cooperation has been so close that it is impossible to ascertain in a number of cases which organisation secured the information, which did investigating and which took action.’ Chinese intelligence officers threatened their compatriots, even in the United States, including students of the University of Washington.20 The Chinese were interested in Chinese and Japanese students and in scientists whose expertise was in atomic energy, nuclear fusion and atomic research. The SSU worried that atomic data in Chinese hands could be transferred to other great powers. The SSU identified, with the help of an agent codenamed Helix, Chinese spies of the Juntong who were working for the Americans.21 In Hong Kong, the key agent of the Juntong was Teddy Hsieh, who posed as a wealthy merchant and he spied on the CCP and the Democratic League. Smuggling was the key means for a Juntong agent to cover his operational expenses. Meanwhile ‘the British [in Hong Kong] are quietly watching their [nationalist agents’] activities.’22 YPX-3, a Chinese informant of the SSU, warned of a White Russian called Zirnis, who was employed by the US Army Air Force at West Field in Peking and who secured for the Juntong information about the layout of barracks, the number of personnel sheltered, warehouses and what was stored in them. It was the first phase of a mass penetration of US installations by Chinese spies. Zirnis provided details of truck supply convoys and claimed to his Chinese handlers that the Americans had no plans to leave China in the near future.23 For X-2, it was General Ma Han-San of the Juntong, the second in command in Peking after the death of Dai Li, who had ‘initiated [the] White Russian agent network designed to penetrate all American installations.’ Ma had directed his spies to look for all kinds of intelligence

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from intercepts to US army logistics sheets. The general was willing to buy US weaponry on the black market. He had already approached influential members of the White Russian community and met with them on 4 July 1946; he wanted their cooperation in spying on the Americans. A Japanese intelligence officer working for General Ma Masanori Nakao – who was administrative assistant to Colonel Hidaka, the head of Japanese intelligence in North China until the end of the war – would broker communication between Ma and the White Russians. Ma was reported to have cooperated with the Japanese and the puppet regime during the war.24 The CCP also tried to get the support of the Japanese who remained in China. During the war in the Pacific, Japanese captured by the CCP had undergone indoctrination. Mao believed in the project of turning Japan to communism with the repatriation of communist Japanese, and boosted the efforts of Okano Susumu, the leader of the Japanese communist party. In Yenan, Susumu oversaw the ‘re-education’ of his countrymen. The expertise of Japanese troops was highly valued, and utilised by the PLA in various ways: in training, maintenance and the repair of captured Japanese arms. It was reported that during the battle for Tietsin, in 1949, the PLA’s artillery batteries were mostly manned by Japanese gunners. Communist egalitarianism appealed to ‘the lower ranks especially those coming from families of farmers and labourers, who had always been badly treated by their officers.25 In August 1947, Minoru Yamada, a graduate of the Tokyo Musashino Higher Telegraph School, was interrogated by US intelligence officers. He had been employed as a wireless interceptor and interpreter in Mukden, and told of the coming of Russian troops to the town in August 1945, and their withdrawal in February 1946, together with the communists’ Eight Route Army. About 5000 KMT troops had entered the city in March 1946.26 The Japanese disclosed that the MGB were training Russians, Chinese, Korean and Japanese agents in Vladivostok, Chita and Khabarovsk for three to six months, then dispatched them to Manchuria as diplomats, teachers, labourers and farmers to gather military, naval and political intelligence; they were paid in cash by the Russian Embassy or consulates so long as they delivered messages, which they did via portable wireless sets. Prior to the end of World War II, the typical maximum length of a message was three minutes; now they lasted for an hour or more, because the ‘agents are not afraid of the Chinese counter-espionage system.’27

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The Japanese operator disclosed that a Japanese restaurant in Mukden was being used by the Juntong to collect information from Russian officers via waitresses working for the KMT; eventually it closed, in June 1947, after the withdrawal of the Russians. At the same time a secret Soviet communication-intercept station was operating in the Soviet department store in Mukden (the antennae was disguised as a flag pole). Nonetheless, the Juntong maintained a female secret agent in this station.28

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‘One night in April as I was returning to my temporary quarters after conferring with American civilian officials in the Shenyang Railway Hotel, which stood on a wide traffic circle in the city’s [Mukden’s] centre . . . I drove my open jeep slowly around the wide circle, aware of the empty streets. It was well past curfew, but I felt secure because the police headquarters, a tall, imposing building, stood directly across the circle. The crack of the sniper’s rifle and the whiplash of the bullet past my face were almost simultaneous. The bullet slashed only inches from my forehead and shattered the asphalt just below the scooped entry sill on the passenger side. I’d been shot enough in France to recognise a near miss. Grabbing the wheel with outstretched arms, I swung below the dash board and floored the gas pedal. Then I saw he’d probably been in the bank building next door. I turned onto a wide boulevard and zigzagged, the tires squealing. If there was another shot, I didn’t hear it. Roaring along through the semi-blackout, I collected my thoughts. The sniper had undoubtedly used a telescopic sight; therefore, the attack was probably a planned assassination attempt, not a spontaneous action. This means the Communists knew my real mission in Manchuria, probably through a local employee agent in my office.’ Captain John Kirk Singlaub had joined the SSU in spring 1946. He was the secret station chief in Mukden, and earlier had served with the French resistance after D-Day.1 While in Mukden, Singlaub and his fellow SSU officers recruited one Dr Ivanov and his son, White Russians who would be used as spies. In his memoirs, he wrote that Ivanov ‘was the first White Russian in

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what was to become a moderately successful network in Siberia and European Russia . . . within six months, American intelligence began receiving a sporadic flow of economic and political intelligence from parts of Siberia completely off-limits to foreigners.’2 Gathering military intelligence, Singlaub witnessed the battles from the cabin of a ‘flimsy’ L-5 aircraft: ‘I was astounded by the magnitude of the engagement. This was fighting on a densely packed front reminiscent of the trench warfare of World War I’.3 A few months later, the Central Intelligence Group (CIG) station established a station in Antung between Manchuria and North Korea. John Chrislaw recruited and trained Koreans, sending them into Korea.4 What were Stalin’s plans for China after the invasion of Manchuria? The Americans did not know. In autumn 1945, Soviet intentions over China still could not be discerned. Walter Robertson, the US Charge´ d’Affaires in Chungking – soon to become General George C. Marshall’s commissioner at Executive Headquarters (the structure to help in the mediation between the CCP and KMT) – pointed out: ‘Immediate Soviet policies are not too well defined as yet, but performance right now is not encouraging. Too little is known about it, but we have enough evidence from other areas in the world upon which to base the assumption that what they may do in China will not be for our good but rather to our detriment.’5 A former banker, Walter Robertson, now the commissioner of General Marshal’s executive headquarters, appeared anxious that the White Russians in Shanghai – especially the ones who, during the war and occupation, had applied for Soviet citizenship – might conduct espionage and subversion against the US, the nationalist government and ‘possibly [the Soviets], as an excuse at some future time of stress to place military forces in Shanghai to protect them, thereby to obtain a military-political foothold’ (a highly improbable outcome indeed). Four Russian newspapers were published in the city: the Novaya Zhizn and Novosty Dnia openly backed Moscow, while the other two were blamed for supporting the Axis during the war. There was also a Soviet radio station broadcasting propaganda and news bulletins, as well as Russianlanguage courses.6 The OSS was abolished by Truman. Now the SSU, the Office of Naval Intelligence and US military intelligence covered different areas, from KMT and CCP activities to gathering evidence against Japanese war

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criminals and Nazi intelligence in China (mainly in the Shanghai area). The Americans were wary of the Gestapo in Shanghai; they considered its structure elaborate, and feared the existence of a secret postwar network offering help to the Chinese nationalists. They assumed that some former Nazi agents collaborated with the Soviets to protect themselves against persecution. Indeed, such people could funnel false or real intelligence, and were thought to be receiving the support of the city’s German community and of ‘the Free German Committee’.7 Furthermore, some of the 200-member Swiss community were understood to be Nazi sympathisers, and ready to offer aid.8 The OSS officers in China felt that ‘every effort should be made to convey the impression that intelligence activities will cease entirely when U.S. Forces retire from China.’ It was proposed that new staff be recruited for the new clandestine organisation because it was assumed that the Chinese working for the OSS were patriots who resented the Americans continued spy-presence in their country. The new staff would be ‘a number of Korean American enlisted men inducted into Army at OSS request by special arrangement.’9 The ONI received intelligence from ‘an old Shanghai resident’ who was reporting before the Japanese attack against Pearl Harbor and was interned by the Japanese during the occupation. He had 30 agents at his disposal, covering Soviet activities in addition to the hunt for clues about war criminals.10 Throughout 1946, the SIS was given access to SSU reports derived from its secret sources in Manchuria. The sources had the codenames Oregon, Louisiana, Wisconsin, Colorado, California/Bellflower and presented the reports of their subsources on the tactical deployments of Chinese communist forces. The SIS sent London a single copy of a map with amendments presenting the course of the war. All reports bore a special stamp: ‘Owing to delicate position of source this report should not be sent outside the War Office without reference to MI6 (SIS)’. On 6 March, Oregon ran subsource Hebo in Chanhar (an officer in the headquarters of the 1st War area), who reported that 12,000 communist troops were deployed in Huailai and aimed to be transferred by rail to Kalgan. On 1 March, Oregon had a subsource in the general staff of Chiang, in Peking. The source, codenamed Hoeveb, spoke of heavy fighting in Pingchuan: about 16,000 troops, communists and nationalists clashed;

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the two sides blamed each other for commencing hostilities. On 6 March Hoeveb reported that the nationalists in Jehol had suffered 600 casualties. Source Louisiana reported that his subsource Abita, an officer in Chiang’s supreme headquarters in Nanking claimed that the communist forces in Mukden were reinforced and the Eighth Route Army and elements of the New Forth Army were deployed in Liaoning province.11 On 16 March, Abita informed Louisiana that since August 1945 the communists had moved 40,000 troops of the New Fourth Army from Langkou and 20,000 East Shantung into Manchuria. On 17 March, source Wisconsin reported, from an unstated subsource, that the communists held the area around Tieling. The railway line between Penchi and Antung was under the control of communist forces; this was reported by a subsource of Wisconsin codenamed Aniwa, a Chinese railway official. According to Louisiana’s subsource Abita (in nationalist headquarters in Nanking), in Fushun 10,000 communist troops with artillery and tanks had reinforced their comrades in Fushun. Abita provided a list of communist troops numbers; namely, 30,000 troops in Chian, Linchiang, Liuho and Mengchiang; 120,000 troops in Chihfeng, Weichang, Chingpeng and Tolun; and five brigades between Pingchuan and Jehol. Meanwhile, 70,000 communists were located in Kuyuan and Paochang. In Harbin, 100,000 troops of the Northeast United Citizens Self Government Army were deployed.12 One Colorado subsource, ‘a communist intelligence operative’, said that General Hu Lung was in Peking on 19 March and was about to go to Manchuria in Shanhsi-Suiyuan to command the communist armies there.13 One wonders whether Colorado was a US officer and if there was a secret contact between SSU and communist secret services. Oregon had subsource Lacomb, who was serving in the 92nd Nationalist Army based in Peking.14 Colorado directed Audrix, an ‘experience[d] Chinese agent’ who reported on communist forces in Fushun, which were about to move to the east. He also reported on railway communications between Tiehling and Tashihchiao. Subsource Chama, a Japanese economist, talked to Colorado about Japanese troops who were now bandits in the area of Mukden and Wangyehmiao who attacked trains: ‘they do not plan to surrender. Their morale is high’, he reported.15

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Subsource Abita told Louisiana that on 17 March communist troops destroyed the steel bridge between Nankuan and Changyuanchen as well as the railway lines south of Tzuhungchen.16 Meanwhile, Subsource Gandy told Louisiana that in mid-March communist troops destroyed the railway lines between Mukden and Fushun and Changchun and Mukden.17 The KMT’s signals communications were not top of the US intelligence service’s priority list. The US Signal Security Agency (SSA) had broken many KMT codes during WWII, but the product remained unexploited due to the focus on Japan. Once the war was over, however, signals-intelligence resources were invested in first in Britain, the Soviet Union, France and the Netherlands, and then in China.18 Throughout the civil war the number of analysts in Washington working on Chinese codes decreased dramatically – from 261 in 1946 to 112 in late 1949; the ‘Soviet problem’ took precedence.19 Intelligence on Soviet espionage in China was secured via the top-secret signals intelligence ‘Venona’ project.20 In May 1945, the SIS presented a joint signals intelligence scheme under the codename Rattan. Eventually the US Army – Navy Communications Intelligence Board agreed, and by August regular channels for the sharing of intercepts and cryptographic intelligence were established under project Bourbon. From early 1946, the signals and direction-finding operations were focused on Shanghai, after a Chinese spy revealed that the Soviets were operating up to six secret wireless stations there. First the US Navy sent a one-man monitoring station to the city; but soon he was transferred – first aboard USS Sierra and later on the USS Estes, the Seventh Fleet flagship off Tsingtao. The OP-20-G2, the Navy’s signals intelligence organisation, intercepted Soviet communications in the Far East. A secret station was established, Station 40, in Tsingtao, which operated until early 1949.21 The SSU in Shanghai provided a list of Soviet and Chinese as well as French and British wireless stations in the Far East to be monitored. In autumn 1946, the Chinese and the Americans agreed for the former to intercept Soviet communications under project Peiping I. It seemed that this scheme was not productive. Nonetheless, the Anglo–British project Bourbon produced results: by the end of September 1946 it was reported that ‘Bourbon signals are received here with good strength at all hours of the day. NKVD and Commercial stations are heard at all hours on their

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respective frequencies, with good signals, this includes those directly from Moscow. Army circuits, origin not known, are heard all hours withfair to good signals.’22 In early February 1947, Captain Wenger wrote to a senior OP-20-G2 officer: ‘Both this one [Yokosuka] and the Tsingtao unit are producing splendid results and have unique potentialities.’23 Station 40 in Tsingtao had to be evacuated in January 1949. Captain Wenger conceded ‘loss of Station Forty will be definitely felt in our organisation. Station’s contribution to total effort has been great and this has been only partly due to its unique location.’24 In March 1946, while General George C. Marshall was attempting to mediate and avert the new phase of the civil war, the X-2 Branch was reporting on trends in secret operations and propaganda. Soviet propaganda on Chinese affairs had ‘lost some of its intensity’ and was now focused on the global role of the Soviet Union and its ideology, on the Yalta agreement and on promoting Soviet diplomacy at the United Nations. In Manchuria, the Soviet occupation forces had set up ‘re-education’ centres for captured Japanese troops. Meanwhile, ‘further evidence’ pointed to the conclusion that the Japanese in China had organised ‘subversive groups’, while the Jungtong, which also recruited foreigners, was reportedly more interested in the PLA and CCP and in Soviet intelligence than in the Western services. In some cases, Japanese people had managed to transfer their property assets in China back to Japan.25 In parallel, certain Germans were also trying to assist their nationals by arranging the transfer of their property assets to Argentina; they were in contact with the Argentine ambassador in Nanking, who facilitated their efforts.26 One method employed by the Germans, in cooperation with the ambassador, was to send money to a Chinese name in New York. Once the money arrived, it was transferred again, this time to a Chinese person residing in Argentina. In addition, it was revealed that the Argentine diplomat had said that his country was looking for ‘talent’ and that ‘a German who is “good enough” will be cleared and sent to Argentina without charges of any kind’.27 In May 1946, the SSU reported that the ambassador was employing a former Nazi as counsellor for commerce in the Argentine embassy.28 An informant with the code-name BH/12, who was serving in the Peking (Beijing) –Tietsin area, reported that Soviet personnel moved freely in North China, Mongolia and Manchuria, and that Soviet aircraft

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landed in Peking (Beijing) and Tietsin without seeking clearance from the US marine guards (who were not allowed to check the identities of the passengers before they were driven away in a Soviet motorcade). By contrast, US aircraft were forbidden to fly north of the 38th parallel. In two cases planes were fired at and in another two instances had to make forced landings; the crews were arrested by the Soviets and interned for up to ten days.29 In March 1946 the SSU achieved a coup against the Juntong: the interception of some 118 messages from Chinese agents disclosed that an informant known by the codename 025 was operating inside the US Consulate-General in Shanghai. It was not yet ascertained if he was a Chinese, but the SSU and the US Counter-Intelligence Corps intensified their investigations. The intercepted messages contained the codenames of other Juntong spies in the Swiss Consulate, the French and Soviet Consulate-General, the Tass news-agency bureau in Shanghai and the Soviet Club of Shanghai. The report by 025 ‘stated that information obtained by informants from American sources confirms “the opinion of the United States political agents that the American troops from North China will [be] remove[d] within two months as soon as General Wedemeyer will have made a report to the President of the United States”’.30 The KMT knew that the Americans would not fight Mao on its behalf. By spring 1946 the X-2 Branch of the SSU correctly assumed that Soviet intelligence was interested in US– Chinese intelligence liaison. White Russians (recently given Soviet-subject status and amnestied by Moscow) were suspected of working for the NKVD – some were employed in diplomatic legations in Shanghai. In order to consolidate their position in the city, the Soviets founded the “Association of Soviet Citizens in Shanghai”.31 The SSU assessed the potential for counterintelligence assignments of Polish, Estonian, Latvian, Lithuanian and Jewish immigrants in Shanghai, some of whom were pro- and some of whom were anti-Soviet. The conclusion was that Jewish groups had ‘some good possibilities of being of both short and long range value to counter-espionage activities on the part of the United States’.32 Notably, one Russian, a member of the Soviet Club, was arrested at Kiangwan airfield for possessing classified US Army documents. There was no evidence of his connection with the NKVD, but informants claimed that he had indeed received instructions from Soviet intelligence

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officers. One source asserted that Major-General Roshchin, the Soviet Military Attache´ in Chungking (and later ambassador), ‘was profoundly interested in the arrest’ when he arrived in Shanghai.33 Possibly he wanted to save one of his secret agents. In addition the SSU had information to the effect that Grobois, the director of the French School in Shanghai, was working for the NKVD. The SSU informer remarked: ‘all the French colony is (it is said) laughing at the American government because the last are employing all sort of people, as there are many in their employ, who are also working for [the] Soviet government.’34 In the meantime, unconfirmed reports claimed that 25 Japanese were working in the Soviet Consulate.35 In addition it was reported that the Soviets had trained some 200–300 Chinese in espionage schools in Vladivostock and Habarousk. As for the charges of Soviet troops looting in Manchuria and Harbin, the Soviets’ propaganda machine responded by claiming that the culprit was the Eight Route Army of the CCP, which they could not control.36 The SSU reported that the Juntong was reorganised after the death of its head, Dai Li, to prepare agents for overseas assignments. The influential far-right political faction within the KMT, led by the brothers Chen Li-fu and Chen Guofu (the ‘CC Clique’) wanted more power. In addition, the military faction of the regime attempted to infiltrate the Juntong. In its turn, the CCP developed underground propaganda and intelligence networks in Shanghai, being supported by its own newspaper, Wen Hui Pao, and the Soviet newspaper, Epoch. The communists maintained contact with Japanese communists and ‘information indicates that an organised gang of pickpockets is in operation for procuring funds and useful documents for the local Chinese communists’.37 The Juntong station in Peking (Beijing) had recruited the Japanese Tominaga Organisation, which had operated signals intelligence during the war, covering Mongolian and Soviet communications.38 The Japanese ‘fascist’ underground (as the SSU called it) maintained contact with ‘Western intelligence services’ but planned to consolidate its following and re-establish the Japanese empire. Its propaganda treated executed Japanese war criminals as heroes and sought to create unrest against the Americans by cooperating also with the Chinese. The Japanese sold surplus military items to finance their activities.

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The SSU believed that the ‘Cultural Association for Improving Relationships between China and Japan’ was a front for Japanese intelligence personnel to get influential business positions in Shanghai.39 A secret document discovered in the city presented the views of the Japanese professional soldier, that ‘world revolution is the means of salvation for Japan and that a third World War will occur within ten years’.40 The SSU analysed Chinese intercepts: ‘Of 118 intercepted reports in the month of March 1946, all but seven dealt with Russian affairs, giving surmise to the conclusion that the Chinese are most interested in the USSR. Since only one mention was made of Chinese Communist activity, it is apparent that the intercepts are from the Foreign Section of the Chinese National Military Council, Bureau of Investigation and Statistics. As in the month of February, the Chinese operatives appeared to do a good job in reporting on Soviet clubs and associations, movements of Russian diplomatic personnel and movements of agents and espionage activities. Reports on other subjects show great weaknesses and Third Powers are insufficiently covered.’41 In April, the X-2 Branch noted ‘increased activity’ among the nationalist intelligence services in their cooperation ‘with terrorist groups’ to confront any anti-KMT movements. These services were the Juntong, the Intelligence Bureau of the KMT, the Intelligence section of the San Min Chi I Youth Corps, the Intelligence Department of the Shanghai-Woosung Garrison headquarters, the Shanghai Municipal Information Bureau, the Institute of International Relations (which mainly covered Taiwan and Japan but had expanded also into Manchuria), the Investigation Bureau and the Intelligence Section of the 23rd Gendarmerie in Shanghai.42 The Juntong and the Zhongtong made a sustained bid to approach Chinese and Chinese-Americans in the United States and to intimidate them into following the KMT line. One of the Chinese vice-consuls in Seattle was identified as an intelligence officer who had ‘coerced’ Chinese and Chinese-American students at the University of Washington. The X-2 Branch were wary of ‘the possibility that he may attempt to subvert these people, especially in the case of students, into espionage activities in the gathering of intelligence and facts relating to scientific research dealing with such things as military production or nuclear fission [sic ] and atomic research’.43

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The KMT had already approached Japanese and other foreign nationals to get information on and expertise in atomic weapons. Key scientific data in nationalists’ hands could leak to the Germans or Japanese. The Americans feared that the ‘Chinese love of money being what it is, it is not impossible that the Russians might also obtain such data’.44 As the Chinese intelligence services geared up for more secret operations, the Soviets in Mukden were setting up their own specialoperations groups. According to a low-credibility report by a Chinese official, the Soviet commander in Manchuria asked a notable Chinese communist to head the Kwantung Special Services Corps (KSSC), whose task was ‘to intimidate and liquidate persons undesirable in Soviet eyes’. The KSSC dispatched agents in Manchuria to challenge the Juntong, and was behind the murders of Chinese officials in Chungking. KSSC agents had also infiltrated the Tietsin-Peking (Beijing) area: ‘An officer of the Generalissimo’s Headquarters in Peiping (Beijing) told informant that General Tai [Dai] Li’s trip to Peiping in March [1946] was for the purpose of ascertaining the extent of KSSC activities in Peiping and Tietsin.’45 The SSU discovered that Yakshamin, the head of the Soviets’ Tass news agency in Shanghai, was a senior NKVD intelligence officer; meanwhile, a representative of the Soviet Central Trading Agency in Shanghai identified an X-2 Branch operative, and former Japanese spies in the city offered their services to the SSU. Eugene Cleige (aka Pick Rovans) had worked for Japanese Naval Intelligence during World War II, but was currently providing intelligence on the remaining Japanese underground as well as on Germans, Russians and others; he confirmed reports from other sources that Yakshamin was indeed ‘the key man’ of Soviet intelligence in the city. The SSU also investigated whether two Russians working as radio or teletype operators at the US Army installation in Nanking were working for the NKVD. Another secret source claimed that Muslim Chinese were incited by the Soviets into taking an anti-nationalist stance.46 As for the activities of the CCP, the SSU reported to Washington that a regional CCP headquarters was operating in Canton,47 and the SSU station in Mukden claimed that three Japanese were working for the local NKVD station: ‘They are preparing rosters on Japanese and Chinese personalities, and reporting on Chinese military operations.’48

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The SSU station in Tietsin warned of Soviet interest in General Wedemeyer’s headquarters and staff, as well as in the planned establishment of US headquarters in Peking and Nanking. The CCP expanded its intelligence cover in Tietsin: ‘a secret intelligence man’ had been sent there recently. In total, 1000 newly-trained spies would be sent to the ten sectors of Tietsin, as divided up by the CCP.49 In Tietsin and Shanghai more incidents were noted of Chinese and Soviet spies approaching SSU informants and seeking to cooperate with them against the Americans. One new organisation which was spying on the US station in Tietsin was the ‘Loyal Brotherhood Association’, which employed boys in surveillance tasks. In their turn Chinese air-force officers tried to get US-enlisted personnel in the West Field to reveal the strength and the activity of the 332nd Troop Carrier Squadron. The Juntong tried to monitor US communications, ‘but it is believed highly improbable that any codes have been broken,’ a report stated reassuringly.50 By early autumn 1946 the SSU had noted increased liaison and collaboration between the KMT’s intelligence and security services as well as leaders of factions close to the ruling elite. Opposing ideologues were purged as ‘thought control’ policies were implemented. In addition, ‘recently acquired copies’ of Chinese intelligence reports ‘reflect continued concentration on Russian and Chinese Communist activity.’ The Juntong ‘is known to employ agents of foreign nationality, mostly Japanese and Germans’. The Institute of International Affairs – another Chinese intelligence organisation – sent four Japanese to its Tokyo branch on ‘special assignments’; while the CCP also employed Japanese communists. The communists maintained intelligence training centres and local headquarters in Vladivostok, Khabarovsk, Changchun, Tsingtao and Shanghai. Nonetheless, the SSU assumed that it would be ‘unrealistic’ to compare the CCP intelligence apparatus with the KMT’s or the Soviets’.51 Secret sources claimed that the Soviet intelligence services in China were under reorganisation. French sources, ‘which appear to be accurate’, described aspects of the reorganisation: within the MGB (the descendant of the NKVD) a ‘Sino-American Axis’ branch was established while the ‘American Axis’ and ‘Japanese Axis’ were dissolved and their responsibilities divided between the new branch and the Razvedupr (the GRU). The MGB ‘Interior Section’ in Shanghai was abolished and

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replaced by the ‘OO Section’ (Special Section), which included the ‘LL’ (Control Committee), which undertook the task of making known the party line to communist cadres and intelligence officers. A ‘Chinese Axis’ branch was also under formation. The directors of the Tass news agency proposed a list of activities for the new branch to the Soviet Embassy, with the main objective of reaching workers, students and non-political Chinese.52 The GRU was also reorganised, employing some 40 secret agents, working ‘chiefly’ amongst US military personnel in China. The Soviets directed their Chinese spies, concentrating on the strength and morale of US forces, their command structure and training, technical data on US Army and Navy weapons and equipment, arms transfers to the KMT, the nationalist order of battle and relations between the US and KMT regime’s commands.53 The MGB employed ‘an old espionage technique’ in counterintelligence, implementing deception and spreading misleading information. The ‘Disinformation Section’ was set up because the Soviets were worried about US-KMT intelligence cooperation and needed to respond. They worked through deception and rumour to neutralise certain top cadres deemed anti-Soviet. The disinformation reports leaked were composed of some 20 per cent truth and 80 per cent fabrication. The section responsible was located in one of the Tass buildings in Shanghai. After it had ‘processed’ the information derived from special dispatches, it transferred the intelligence to a nucleus within the Soviet Citizens’ Club, and a Soviet intelligence officer made sure that the falsified information reached US and Chinese intelligence. Changes in MGB staff in Shanghai were noted; the station acted as a coordination hub. ‘Important figures’ were assigned to commercial firms (e.g. the Union Steamship Agency, Asian Films of China, Central Trading Agency and Intourist, among others); the head of the SinoAmerican Axis section of the MGB worked in the Chinese film industry, and a cell of ‘illegals’ – Soviet and Chinese spies without official cover – had been set up in Nanking.54 The SSU had intelligence claiming that ‘Two Russian girls, both trained by Soviet Intelligence, have been briefed to obtain information from US Army and Navy personnel who are on recreational leave in Shanghai from Guam and Okinawa, regarding Operation Crossroads and other military matters.’55 (Operation Crossroads entailed a series of

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nuclear-weapon tests conducted at Bikini Atoll in mid-1946; they were the first detonations after the dropping of atomic bombs on Hiroshima and Nagasaki in August 1945). A report from a secret source informed the SSU that the MGB had called a meeting with the Soviet consulate, the trade and military missions and the Tass news agency to consult on the Russian immigrants. It was decided that agents would infiltrate the White Russian community, while their leaders would be put under pressure to abandon their anti-Soviet activities. In parallel, pro-Soviet newspapers would run a propaganda campaign.56 In early 1947, the loss of US Navy pouches in Shanghai and Tsingtao prompted an urgent investigation; however, it was claimed that ‘there is no indication of Soviet efforts aimed specifically at interference with American courier mail’. In any event, the vast reach and numbers of Soviet intelligence personnel assigned to espionage and propaganda in China made the Western powers feel ‘hopelessly outnumbered’, while the Russians took advantage of the collapsing economic situation and widespread corruption in China to recruit more agents and informants. In addition, the Russians were employing (outside and beyond their collaboration with CCP) Germans, Japanese, Koreans and Jews in intelligence activities.57 The warning received was explicit: ‘The employment of large numbers of cabaret girls, prostitutes, low-class labourers and clerical personnel in districts having United States installations is standard practice’ by the MGB and GRU. The Russians were always looking for ‘skilled agents’ of foreign origin working in US missions, as well as penetrating those government services which had a liaison agreement with US military missions.58 Indeed, US personnel on leave from Okinawa and Guam were ‘pumped’ by Soviets informants, ‘not without some success’, with reference to Operation Crossroads and to US Navy deployments in the region.59 It was reported that in September 1946 the Soviets had made plans to construct a communications-interception unit in Shanghai, but by February 1947 this intelligence had still not been confirmed. Meanwhile, they employed coastal watching-stations to plot the movement of Western ships in the Sea of China.60 In Tsingtao, Vice-Consul Dorofieff was a leading personality in Soviet intelligence; he only had a small staff, ‘but reputedly controls a

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large net.’ The Standard Oil Company representative was also thought to be a senior intelligence officer. Most importantly, ‘information dated October 1946 specifies a number of low- or medium-grade female agents living with or in various manners associated with Navy and Marine officers in the area’.61 The employment of Japanese officers and wireless interceptors by the KMTwas extensive, and US intelligence gained further insight as well as information on Russian communications from Japanese who had escaped to the US side. The Juntong operated a signals unit in Shenyang (named ‘Special Research Society’), intercepting Yenan’s signals communications. The Juntong station employed more than 20 Japanese cryptanalysts who had experience in Chinese signals since they had served in the Imperial Army’s expeditionary headquarters. But despite their efforts they could not break the CCP codes, and by the end of 1946 this unit was disbanded.62 KMT counter-intelligence in Manchuria was ‘so disorganised’ that the Soviets conducted espionage with no fear of the consequences, while the KMT and its Japanese intelligence experts were ‘never . . . able to break the code of the Russian Army’. Intercepted code messages were sent to experts of the Chinese National Army for deciphering. In Mukden, Kishimoto, a 27-year-old former Japanese Army officer, worked in signals intelligence alongside Ra Itsukei, a 40-year-old Japanese colonel.63 (A total of 3000 Japanese remained in Mukden, awaiting repatriation64). The source concluded his interrogation, adding that ‘call signals can be heard every night between the hours 22.00 and 03.00. The Chinese know the Russians are sending these signals by recognising the Russians’ style of sending sound and speed after long experience. Exact locations of stations are unknown since the Chinese [the KMT] have no wireless locators.’65 With KMT forces being repeatedly defeated in battle, in October 1948 a ‘reliable source’ informed the Military Intelligence Section of the US Far East Command that the KMT intelligence apparatus in Nanking was under reorganisation, and that there were plans to recruit new Japanese intelligence officers. Major General Tsao Shih-cheng, one of the two vicedeputies of the 2nd Military Intelligence Bureau of the Ministry of Defence, gave a speech to Japanese conscripts at the International

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Problems Research Institute in Peking (Beijing), declaring the need for friendly relations between Japan and China to counter American and Soviet attempts to exert influence in the Far East. He himself conducted interviews with some former Japanese army officers already employed at the institute, asking them to compile a report on Japanese intelligence services during World War II. Tsao was particularly interested in Tomiaki Hidaka, a former colonel of military intelligence and chief of the ‘Hidaka organisation’, which had spied in north China. Hidaka was accused of war crimes, but it was said that after standing trial he would again join the KMT’s intelligence apparatus. He was charged by the Russians with killing two of their citizens after the cessation of hostilities, but ‘source reports that Hidaka expects to be acquitted on the basis that the murders were committed by a special mission of the Kwantung Army’. US intelligence wanted Hidaka’s repatriation, since it was thought he possessed valuable intelligence.66 Leonid Almazov, the Soviet trade representative in Mukden, was identified by US intelligence as the local head of the MGB. He ‘probably’ maintained mail communications with Harbin via Russian couriers. Soviet agents worked on the railways in the communist-held territories and in formerly Japanese trading firms. It remained to be confirmed that the MGB station in Mukden employed radio communications. All these were reported by a ‘source proved to have good contacts among Nationalist intelligence circles and among what appeared to be patriotic non-partisan circles in the Northeast who maintained official contacts in Communist areas’.67 Another secretwarfare method was for communists to enroll in educational institutions to stir up revolt and spread propaganda; these ‘professional students’ were ‘an active menace to the educational structure of China,’ remarked Brigadier-General Robert Soule, the US Military Attache´.68 In November 1948 US diplomats were informed of the case of three French subjects and one Belgian Catholic missionary who had been accused by the CCP of espionage in 1945–7, in Sienhsien, tried and eventually deported. It was said that four other Frenchmen had fled, and a Chinese man had been imprisoned.69 (Evidently they were not considered spies, otherwise they would have been either executed or given a long prison sentence.) The Juntong spread reports that it had secret sources close to Mao. In early December 1948 one Professor Yin, claiming to be quoting from

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‘reliable sources’, informed US Consul Carl Hawthorne that the KMT had ‘an agent highly placed in the executive organisation of Mao’. The spy disclosed a meeting between Russian officers and the CCP leadership in Harbin 40 days earlier. A general representing Field Marshal Zhukov attended the meeting (Zhukov was ‘believed to have planned the recent communist offensive’). Li Lisan also attended the conference, but his compatriots were not pleased at his presence, ‘particularly as he did most of the talking on behalf of Moscow’. According to a secret KMT source, on Moscow’s advice Lisan insisted that it was no time for the PLA to launch a full-scale attack against the government and to cross the Yangtze, making a bid for Nanking or Shanghai: ‘to do so might bring them into conflict with America and Britain, in which event the Soviets are definitely not as yet prepared to come to their assistance’.70 This piece of accurate intelligence showed the limits of Soviet policy over China, as well as the evolving strategy of the PLA. For the SIS, the Russians were handing over the Chinese Communists considerable quantities of Japanese weapons. Some of the weapons were brought in from Harbin, and ‘the transfer of these weapons is under the control of General Juravlev, director of the Chinese Changchun railroad’.71

CHAPTER 19 SPYING ON OUR COUSINS

‘. . . our cousins – British – have great interest in US activities here [in Kunming] I have the task of furnishing names of US officers who run around with the British. Also anything else apropos – got any ideas’ Captain Wells G-2 (Intelligence) reported.1 Chinese secret agents were recruited by the X-2 Counterintelligence branch of the OSS and the British Army Advisory Group (BAAG). Informers of the X-2 secured rolls of names of spies working for British intelligence, their British commanding officers and their operational tasks. According to an intelligence collection plan given to an AGFRT team by a certain British Major Gunn, who operated in Japaneseoccupied Shen Chia Men, among the tasks covering military intelligence and sabotage was the employment of Chinese mobile intelligence groups into the urban centres. For example, there were three operatives in Wenchow, two in Chuanchow and two in Taichow – all ‘carefully chosen intelligence men to get in touch with local influential people, bribe local government staff (magistral and provincial), troops and police to extend the intelligence service into enemy organisations.’2 The infiltration of British agents into US installations was explained as the result of a lack of proper examination of employees. In Kunming, an X-2 report explained: ‘it is a fact that British penetration of US installations is deep and extensive. This situation dates back to the early days . . . when the Forward Echelon of the 14th AF . . . successively established headquarters in that city and were in urgent need of Englishspeaking Chinese clerks, interpreters and stenographers. The British Relief Department of the British Embassy sent an unending stream of

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applicants to US Army organisations and these applicants were directed there on the basis of economic need rather than on the integrity of the persons concerned. The BAAG occasionally sent applicants; however, it is believed that most BAAG applicants were routed through the British Relief Department as they invariably came to US installations with BAAG clearance. The names of all independent applicants for work with the US Army organisations were invariably given to the BAAG for security check since, at that time, the US Army had neither the personnel nor the facilities for such work . . . The US Army had no choice but to rely upon information furnished by the British. Thus anyone hostile toward the British (not necessarily pro-enemy) were rejected by the US Army.’ Besides, ‘through the compromising of confidential information on the part of some US Army commanding officers, several of the Chinese employees whose services were thus dispensed with made bitter complaints against the BAAG.’ The X-2 and the Chinese deemed the Hong Kong-born Chinese (who almost always worked for the British or the US Army) ‘to be docile species, who know no loyalty but to the British Crown’. They depended on the restoration of the British rule to the colony; hence they were willing to spy for the British, having been hired in every US installation.3 The Chinese secret services were searching the RAF planes because they had information to the effect that Chinese formerly residing in Hong Kong were transported to India.4 There was a strong interest for the OSS to shadow the incoming and outgoing flights of the RAF in China; nonetheless the request was turned down for lack of agents available for such a task. In any case, ‘since this data [of flights] is readily available to ATC and other [US] Air Corps units, I suggest they be advised that we [the OSS] are unable to handle this assignment due to present shortage of personnel.’5 The Americans assumed that the organisation of British intelligence had two distinct parts: the British embassy in China and the Ministry of Information. Under the embassy operated the British Military Mission, the Press Attache´ Office and the Military Attache´ Office. The British Ministry of Information in London had a representative in China who coordinated with the Publicity Department of the Government of India in New Delhi and the Far East Division of the BMOI based in New Delhi. In 1944 the Press Attache´ Office commenced, in secret, the coverage and translation of press articles which criticised the British.

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Nonetheless, later that year it was suspected that some Chinese translators leaked this to the Chinese secret services. Thus more than twenty were summarily dismissed, and the translation assignment was transferred to the Publicity Department of the government of India in New Delhi. Chinese secret sources of the OSS had managed to secure an organisation chart of British intelligence in China.6 Nonetheless, reports noted that ‘British ways and systems of effecting their intelligence work and organisation is so complicated and changeable that outsiders would find it most difficult to obtain a clear conception of them.’7 The Americans strongly believed that ‘British are unwilling to give up their potential markets in post-war China, they would prefer seeing China remain a backward agriculture country.’ The British feared a SinoJapanese alliance and were assumed Machiavellian even to the extent of supporting the communists against the nationalists: ‘The British would express their sympathy towards the so-called Communist cause thereby undermining China’s effort in her strive for complete unity; this they hope to curtail the Kuomintang’s overwhelming power and its proAmerican policy and feelings’. The Soviet expansion in the Far East was the main fear of the British, who were not willing to withdraw from Hong Kong.8 The British were always seen as manipulators. A reliable OSS source revealed that the British consulted with the Free Thai Government to infiltrate a Chinese general into Thailand. The Thais assumed that he would head an intelligence network against the Japanese. Nonetheless, the source claimed that this was ‘evidence indicating that the British are putting pressure on the Thais to increase British intelligence activities in Thailand through Chinese channels and otherwise.’ One could see this as a hint that there had to be some secret Sino-British arrangement for Thailand.9 The SIS maintained a station in Kweilin under Lieutenant Colonel Thompson, who had served in the Hong Kong police. Thompson had a direct wireless link with Calcutta and lived with the sister of Lieutenant Colonel Gittens of the SIS station in Wenchow. Her husband was killed while serving in the Hong Kong in December 1941. The OSS noted that she had given birth to the child of Thompson, but he was married and his wife back in Britain was not willing to divorce him. The Gittens were a rich Hong Kong family. Lieutenant Commander Davis, assisted by Captain Stepherd, headed the Kukong station of the SIS. Davis had previously lived in Hong Kong; Stepherd was trained by the Royal

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Marines Commandos and had served in North Africa. They provided agents’ training and dispatched them in Swatow, Amoy, Formosa, Shanghai and Singapore.10 ‘It has taken them a long time to get things organised but they evidently have come good agents now who have come about through the “trial and error” method. Many men they have spent time on never returned after their first trip or did return but turned out to be “lemons” (i.e. exhausted).’ The station’s main target was Shanghai, but agents were sent also to Nanking and Tietsin. The station had a secret source, an American: ‘through the cooperation of an American in the Chinese Customs, Mr Houpt, they have also gotten men stationed on the coast who watch shipping movements for them and obtain any good from salvaged vessels. They are paid on a bonus basis.’ The SIS station in Tunxi was headed by Colonel Smythe, who had a powerful wireless set communicating directly with Calcutta.11 By 1945, according to a secret source of the X-2, ten British organisations were operating in Kunming, shadowed by X-2 agents and their Chinese informers who supplied addresses, organisation charts, agents rolls and their tasking. In Kunming, there were Thailand, Malay and China sections. Kunming was ‘advance base No. 1’, Chunking ‘advance base No. 2’.12 The British Military Mission (BMM) was based at 45 Chuen Tsin Kai Road, Kunming, and was headed by Captain Philippo. It was focused on the transport of supplies to British services in Chungking, Chengtu, Kweilin, Kukong, Pu-cheng and other places. The BMM trained Chinese guerillas. The British Military Attache´ office in Kunming was headed by Colonel Clark, and collected intelligence on the equipment, morale, personnel and activities of the Yunnan Provincial and the KMT governments. Lieutenant Colonel Le Seelleur headed the Sub-office of the Assistant Military Attache; his responsibility was the training and dispatch of agents in Imperial Japanese Army-occupied South China. The majority of the agents were operating in Kweiyang, Kweilin, Kanchou and Kukong. A certain Mr Davis was the officer in charge of the British Ministry of War Production (BMWP) office, in Kunming. The office purchased spare parts, medicines and motor fuel and gathered political and economic intelligence. In Kunming, Consul General Gruen and vice consul Hough gathered political and economic intelligence while the RAF Kunming office coordinated the supply flights to and from India. There was also the Kunming Branch of the Press Attache´’s office of the British embassy in China, under a certain

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Mr Martin, who focused on the Chinese press (translating pieces on economics and politics). Captain Miller headed the General Liaison Office in Kunming; he did not train any agents, but ‘the main task of the office is to send supplies received from India to the forward stations by BMM convoy. Many of the agents of this office are in Hong Kong and Occupied China.’ Lieutenant Colonel A.R. Buchanan was in charge of the British Military Liaison Office (BMLO) in Kunming, and managed two radio stations communicating with the British headquarters in Calcutta. The BMLO office trained agents; the head instructor was D. Tindley. Other British secret stations for intelligence gathering and wireless were in Fuhoi, Nanning and Kukong.13 According to another secret source the BMM had a guerrilla training camp at Pu-cheng, with 24 officers overseeing the training, focusing on demolitions and guerrilla warfare. It was stated that ‘although formerly the Chinese did not allow the British officers to accompany the [Chinese guerrilla] troops to the front, the informant states that now one British officer does go along with each regiment for a period of four months; then he is relieved by another British officer.’14 The BMM mission in Dali (in northwestern Yunnan province) had at least one officer venturing into communist-held territory. The X-2 shadowed the mission, reporting of a British Army Captain Reginald Heath ‘touring Communist China in the uniform of a Russian officer.’ It was added that he spoke Russian and his mission was ‘a great success’. It was reported that ‘the information above leaked out from one of the British officers, and he was quickly hushed up by other who was then present. They admitted it was highly confidential and not for repetition.’15 The key intelligence gathering organisation was the BAAG; Chinese spies secured for the X-2 full lists of British officers’ and Chinese agents’ names and duties.16 It was emphasised that Section C of the BAAG, under Major Hartman, had as its mission the discovery of the movements of the US Army, Air Force and Navy in China, of the personnel of the Chinese government: ‘outdoor personnel are brought over from India and ferret valuable military information by associating and drinking with Americans.’17 In the report on the staff and operations of the ‘I’ Section of BAAG, under Major L.S. White, it was stated that ‘several hundred agents in Occupied Territories in China are charged with the task of preserving pre-war British prestige and to curb

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American expansion in the Far East. Many agents are placed in American organisations in China as interpreters, etc.’18 The secret source provided a full list of Chinese intelligence officers of ‘S’ Section for Security and Counter-espionage under Major Hall-Caine.19 The BAAG was organised by Colonel Ride, a professor of Hong Kong University from 1935 to 1940 and an officer of the Hong Kong Volunteer Defence Corps. He was arrested by the Japanese after the fall of the colony but escaped and went to Kukong, where he registered the Chinese who had worked for the Hong Kong government who were by then refugees. Three months later he was sent to Kweilin, where he set up an intelligence department with branches in Waichow, under Captain White and a Chinese sub-inspector of the Hong Kong police. Their purpose was to investigate Chinese refugees from Hong Kong and in particular if they had worked for the colonial government. In November 1944 the BAAG headquarters were established in Kunming.20 According to X-2 views, ‘the BAAG is handicapped mostly by their own attitudes and practices. They treat the Chinese employees rather poorly, under-pay them. They employ almost anyone who came from Hong Kong. They believe in great numbers of agents rather than a selected few. Also due to lack of British personnel here (in Kunming), they have been compelled to employ Cantonese to working the office.’21 Lt-Colonel W.G. Harmon, the SIS representative in Chungking, acting under the cover of the British Liaison Officer of the SIS (which operated under the cover name, the Inter-Services Liaison Division, ISLD) told an X-2 officer codenamed FB044 that he was responsible for covering the northeast coast of China, north of the Yangtze river. The SIS had divided the coastal areas into three sections and had some agents in this task. Nonetheless, he insisted that in counterintelligence the SIS/ ISLD ‘was not very active . . . most of the British counterintelligence activity had been carried out’ by the BAAG.22 The X-2 Counterintelligence branch of the OSS had information to the effect that the BAAG was infiltrating Chinese spies into US installations. An urgent 2 May 1945 message warned that four Chinese secret agents working for the British were working in Chanyi (one agent) and Kunming (three agents); one agent was identified as Chan Ying Lit.23 The suspicion of the Americans towards the British was further raised when in late April 1945 a secret source of the X-2 managed to steal a

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document of a BAAG security officer in Kunming.24 In the paper dated 20 January 1944, written by Major Derek Halls-Cains, addressed to the BAAG commanding officers in the headquarters in Kweilin, there was a clear reference to British espionage plans: the British officer wrote, ‘disregarding for one moment the obvious or presumably obvious value of the records after this war, I suggest counter-espionage must go hand in hand with espionage and is of equal importance . . . it is very easy to say it is none of our business – to that I reply that the secrets, the plans, the movements of ALLIED INTELLIGENCE ORGANISATIONS, Allied aircrafts and may be Allied Armed Forces, are very much our business. The position of the British and American Forces whatever they may consist of, in China is not comparable with say, the American Forces in Britain. To know a little of China is sufficient to understand that, but it is not something that those with no knowledge of China can be expected to appreciate’.25 The officer noted that ‘apart from the SIS and the Chinese authorities, the Security Department of the BAAG is the only Allied Organisation in China, who has any records of individuals who have been and/or are working for and/or under the Nips. These records have already proved themselves to be of immense value both in our interests and in safeguarding, the interest of both the Americans and the Chinese [the records] must be of considerable importance after the war.’26 The officer was asking for the expansion of the BAAG secret activities; he required: ‘1. Ten times the present number of agents, 2. Double the present office staff, 3. A sufficient number of men to maintain, 4. The power to search, arrest and detain persons on suspicion 5. The authority to “bump off” (i.e. to kill) suspects, 6. The finance to offer rewards or blood money.’27 The Chinese secret services blocked the BAAG security operations: ‘we are constantly frustrated by the authorities who having been forced by us into making an arrest, proceed to release the suspect without even advising us. The reason for this are two-fold: (1) They do not consider a man guilty of assisting or working for the enemy unless (a) they have discovered him themselves or (b) we can prove in black and white that he has done some thing very detrimental to the Chinese Government itself,

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(2) “Squeeze” and family influence. Time and again individuals arrested at our urgent requests and on our evidence, have been released secretly because they have been able to pay their way out or have some remote connection who holds some official position.’28 The British major wanted the suspects to be court-martialled: ‘there is a very real and important necessity it be allowed, without any knowledge of the Chinese, to “bump off” a few individuals who are a living nuisance to the Allied War Effort.’29 A story surprised the OSS. The British consul in Portuguese-occupied Macao told the colonial authorities, who in their turn told the Japanese, the locations of a US landing on the Chinese coast. The British intelligence who told the OSS were aware that the consul knew nothing about it. But they were angry with him. The OSS in Chungking remarked: ‘due to lack of knowledge [of a landing, the consul] should also not try and pass deceptive information. British codes to Macao are being broken and they wonder if we could find anything out concerning this.’30 The X-2 Branch of OSS was directed to continue investigating the British intelligence in Xi’an and to determine whether other British intelligence officers operated – and if so their operational tasks and agents’ networks.31 In Xi’an, the British intelligence station was headed by Major Burgess Drake, nominally the head of the BMM. ‘According to our source Major Drake employs approximately 30 native agents. Some of these are used in Xi’an and vicinity and others it is believed are sent to Occupied and Communist territory.’ Many people travelled to and from communist-held territory and to and from Japanese-held areas. Drake was making ‘extensive use’ of them as sources of political and military intelligence. In a February 1945 report on Drake’s activities, the X-2 Chinese informant stated that Drake was strongly interested in the communists’ relations with the nationalist government, and it was revealed to the X-2 officers that ‘recently he obtained “hot” information regarding Communist activities.’ Nonetheless, the Juntong in Xi’an learned of the ‘hot’ intelligence of Drake and showed their fury towards the BMM.32 According to the secret sources of the X-2 ‘the Chinese appear to dislike the British and will do nothing to assist them’, calling them

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‘Teh Wu’ ‘special secret agents’ with ‘bad intentions’. They were hindering the British from installing a wireless. Lieutenant Clarke, Drake’s deputy, had gotten ‘most of his agents from Bishop Megan who could not pay all he had and who had been pressed by Major Drake for agents for some time.’ The Bishop was initially reluctant to help the British in order to avoid jeopardising his relations with the Chinese government. The Bishop’s agents told him that they did not want to work for the British but admitted that they were overpaid by Drake. Soderdom, a Swedish subject, was arrested and interrogated by the BMM and accused of being a spy.33 Drake himself had denied he was working with other suspected British officers Major Hemmingway, Major Guld and Major Jacque.34 In February 1945, a flash message from Washington to the OSS in Chungking caused a stir among the X-2: ‘Please check in Kunming to see if any one having access to X-Ray Two report on British Intelligence sources in China talked to British sources about it or allowed any unauthorised person to seek it. There has been a leak somewhere and British claim to know contents of report. George Two here having their staff investigated. Source of British information said to be Chinese but may be cover.’35 The reply was that the memo on British intelligence was given Secret Intelligence designated distribution and could be accessed by four officers at the headquarters.36 Some wondered whether the ‘cousins’ – the British – in New Delhi had accessed the memorandum.37 Only two X-2 officers in Delhi had seen the report.38 According to an X-2 source, ‘the British customarily use blackmail methods on Chinese, mostly Hongkong [sic ] people, in order to get them to act as British agents.’ American intelligence officers were told by a Chinese woman that she was recruited by the British. She disclosed that Dai Li’s spies had infiltrated British intelligence and the BAAG.39 Dai Li informant codenamed YCX031 provided information to the X-2 of the OSS and shadowed Chinese working for the British. One of them was Wanh Yun-Kiu, the chief administrator and head of the Chinese personnel of the British Press Attache´’s office in Chungking. It was stated in an official announcement that he was about to fly to London to give lectures on China. It was known that he had authored a secret report on Chinese affairs and that the report was shown to Churchill by the Chief of the Far Eastern Section of the BMOI. The prime minister commended it. Nonetheless the informant claimed that the real reason of Wanh’s visit to London was: ‘1. To carry confidential

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Chinese documents to England, 2. To make a detailed report on the latest conditions in China, including Sino-American relations.’40 Curiously, it was again YCX031’s reports which cast the British in a negative light in the eyes of the Americans. In autumn 1945 he claimed that the British trained some 30 Chinese, including some descended from Burma, Kwantung and Fukien, and paid them handsomely. The agents who would pose as translators for hire were directed: ‘1. To find out all information pertaining to the forth-coming landings of the American troops along the southeast coastal areas (dates, places, schemes, etc.) 2. To investigate the conditions of cooperation between China and the United States; as well as the condition of the inside work of such cooperation. 3. To try to engineer themselves into any organisation jointly operated by both the Chinese and the Americans so as to obtain all available information.’ The SSU report noted: ‘It was ascertained that the British have recently sent special Chinese personnel to Yenan to convey information from the British to the Chinese communists and to offer whatever financial help possible.’41 In early summer 1945 General Wedemeyer was approached by the British commanding officer and eventually agreed for a group of a total of 34 British intelligence officers and other ranks to work under US officers in training Chinese guerrillas in Xi’an. ‘It is Col. Barrett’s (the head of the US mission to Yenan) understanding that they are not to do intelligence and he plans to “take them on good faith” until they prove otherwise.’42

CHAPTER 20 URANIUM

In December 1987, the CIA helped Colonel Chang Hsien-yi defect. He was no ordinary officer but a man who was at the top of the nuclear weapons development programme of Taiwan. A mole since the 1960s, eventually he secured a position in the secret programme. Chiang’s son Ching-kuo was heading the Nuclear Energy Research Center, to develop nuclear power plants for the island; Colonel Chang was his deputy director. In December 1958, after the crisis in Quemoy island, Chiang authorised the secret programme.1 The intelligence Chang brought to the United States was used by the State Department to put more pressure on Taiwan to stop the development of nuclear weapons. Washington strongly believed Beijing’s threat that it would employ nuclear weapons in case Taiwan developed its own. China tested its first nuclear weapon in October 1964. Eventually, Taiwan had to abandon its programme.2 Chiang Kai-shek had planned to develop an atomic weapon since the 1940s. Indeed, the search for uranium was one of his priorities; but he lacked expert scientists, know-how and mining technology. As early as 1942, Donovan requested from OSS in China information with reference to uranium deposits. Uranium was found in Hunan and Jiangxi.3 Upon the end of the war, officials in Washington proposed a joint Anglo-American expedition – or a solely American one if the British declined to participate – to search for uranium and thorium in Sinkiang (Xinjiang) province (today’s Xinjiang Uyghur Autonomous Region).4 About two years passed, and no decision was reached. In 1947 the Americans again took the lead in organising the expedition. The British

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consul general at Kashgar, Eric Shipton, a ‘well-known mountaineer’, was considered by some in London the best man to participate in this endeavour. After all, ‘Shipton was appointed to the post, since this particular area of China is of great interest in connection with Russian activities in atomic energy matters’. During the war Shipton and Tilman (another British official), also a mountaineer, had done a ‘considerable amount of intelligence work.’5 The Americans wanted to make use of the services of an explorer and former OSS officer, John Clark, who was a curator of Physical Geology of the Carnegie Institute. He would set off for Sinkiang in June in order to research a number of scientific fields, including zoology, entomology and geology.6 Clark, who would collect and test samples of earth, was ‘fully aware of our interests’ in searching for uranium and thorium in China; in 1945 he had led a mines survey. It was deemed that the ‘Russians must be aware of geological potentiality of this region . . . Clark’s expedition would represent a unique opportunity unobstructively to make rough assessment of the area before any third party moves in.’7 In London the Joint Intelligence Committee (JIC), most probably urged by the SIS were furious about this mission and about the earlier proposal to involve Shipton in uranium research. The Americans were informed that ‘this proposition has been passed to us as its intelligence aspects are of more importance than its raw material implications. We have important intelligence interests in the neighbouring Russian area . . . we are of the opinion that the security of present and future channels of information from this latter area through Shipton may be gravely imperilled if this expedition takes place. In addition this expedition can only draw Russian attention to the Sinkiang area where if any raw material be found we are at great disadvantage vis-a`-vis the Russians in respect to exploiting it.’ The message was clear: the mission had to be cancelled.8 Beyond the SIS it was the British Council which gathered information on atomic research in China. Dr Joseph Needham, the head of the British Council Scientific Office (BSCO) in Chungking, developed contacts with Chinese organisations and science societies on atomic research. The British Council had been collecting intelligence on public domain but most importantly had been making efforts for scientists’ networking. It seemed that Dr Alexander King, the head of the British Commonwealth Scientific office in Washington, had asked for Needham to look into this.9

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In February 1943, Needham reached Chungking. Sent by the British Council, he helped Chinese research institutions obtain equipment and scientific literature. The Chinese government allowed Needham to establish the Sino-British Science Co-operation Office in Chungking. Until April 1946, when he returned to Britain, Needham had visited many universities and laboratories as well as factories, facilitating the procurement of scientific equipment and instruments. Nonetheless, the head of the Department of Scientific and Industrial Research of the Ministry of Production informed the Cabinet Office that the BCSO should not act in atomic energy information-sharing; ‘kindly but firmly’ the BCSO was informed that ‘they must be more careful.’10 In their turn, the Chinese government, as well as the Russians, rushed to get hold of Japanese geologists who had been studying and directing mining operations, mainly in Manchuria, during the war. Meanwhile, in Shanghai the X-2 Branch of the SSU initiated secret operations to direct the Soviet demand for uranium, whose price soared on the black market upon the publication of information that the atomic bombs contained uranium. The first directive to search for uranium and atomic research was issued on 20 January 1946: ‘It is expected that extensive X-2 operations will be initiated in the very near future. It is felt that the entire topic is one which must be initially developed and controlled by X-2, with ultimate SI (Secret Intelligence) operations growing out of the results obtained by X-2’.11 Saito a former high ranking officer of the Japanese Ministry of Foreign Affairs Gendarmerie, was imprisoned by the Chinese for embezzlement. On 19 January 1946, Saito told SSU Captain Harry D.G. Carroll that he was arrested on 29 December 1945. But two days earlier Saito had learned that five Japanese scientists had reached Shanghai from Japan and talked with Soviet officers about uranium and possible employment. Saito promised Carroll that once released he would look for their names.12 The SSU reported quoting Chinese and Japanese informers that the Chinese and the Russians were researching uranium mines and interrogating scientists remaining in Manchuria after the end of the war. The Soviet atomic weapons programme had been receiving a boost from secret intelligence from the Manhattan project courtesy of Stalin’s spies, but was hindered by the lack of uranium supplies. Only in December 1946 did the Soviet F-1 reactor commence operating with uranium from

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the German atomic weapons project. The Germans had secured the uranium from Belgian Congo. More supplies of uranium derived from mines in East Germany, Czechoslovakia, Bulgaria, Romania and Poland. Once in Manchuria the Russians intensively searched for uranium but were disappointed. Eventually, Moscow scientists discovered uranium deposits in Kazakhstan and other places in the Soviet Union.13 The X-2 Branch of the SSU was assigned the atomic energy investigations and uranium under the top secret designation ‘Ramona’. Informers of the X-2 revealed that three Japanese scientists, Professors Kawakami, Ariima and Yoshimura, had been ‘personally recruited’ by Chiang Kai-shek, who ordered them to be flown from Manchuria to Nanking to meet with him. The generalissimo kept to himself and a select few of his lieutenants the scheduled uranium research and the development of atomic weapons. It was reported that in an undisclosed location in or near Mukden some research was underway. Ariima once headed the Continental Research Institute, and Yoshimura focused in uranium research and had his research centre in Hiroshima until the danger of bombings compelled him to move to Mukden. Three of Yoshimura’s colleagues were killed by the atomic bomb dropped on Hiroshima. Yoshimura had escaped to Manchuria and avoided capture by the Soviets as other scientists who were soon arrested. He was hiding for some 20 days and knew how to move in the country since earlier he had served as an adviser in the 4th Department of the Kwantung Army. According to the X-2 informant, Yoshimura was now working for Chiang out of fear, greatly concerned that the communists would find out what he was doing and that the guard provided by the KMT would not save him. The informant believed that Kaniko, a former associate of Yoshimura, was arrested and held by the communists. X-2’s informant was a Japanese. One officer noted the hypothesis that all this information about Yoshimura could be a ‘bait’ of the Chinese secret services to discern the American reaction. Eventually, the bona fide of the Japanese informant was taken seriously by X-2.14 According to X-2, the informer with code number YCX4 was one who helped Yoshimura hide from the Soviets, and that was why he learned of his wartime research.15 Tochio Sakamoto, a Japanese geologist of the South Manchuria Railway Company, discovered uranium in 1938. In spring 1944, Miyako Company commenced mining in the San Tai Kou area. The Manchuria Mines Company took over the project in September 1944, but full-scale

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production of uranium was never achieved. From October 1944 to March 1945 drilling was conducted and Yoshimura was in charge of chemical analysis. Though Nazi Germany officials had promised research aid on uranium and atomic weapons, they had delivered almost nothing.16 The Americans, as well as the Russians and the Chinese had been trying to find out the Japanese expertise on uranium research because all the antagonists had the information that the Japanese had been doing some sort of radioactive minerals research prior to 1941, in Manchuria. According to a sub-source of the X-2, before the end of the war the Continental Research Institute in Changchun had 200 Japanese research workers, and 40 of them were qualified scientists and project directors. In Manchuria in 1946, there remained only 20 scientists seeking repatriation but for the time conscripted by the Chinese authorities in their research programme. The Kwantung Army evacuated the centre before the coming of the Russians in August 1945, and eventually the Chinese took over administration. The Russians transferred most of the scientific equipment in the Soviet Union, and the centre focused on industrial development, medicine and veterinary surgery. The centre had a branch in Harbin, which was more a museum, while the Mukden branch was for industrial development. Once it occupied Harbin, the Communist Eight Route Army took equipment. For the time being the research centre, now under KMT rule, produced dextrose, glucose and calcium. According to the sub-source (who had raised some doubts in the X-2) in the period October 1943– January 1944 the Japanese produced from the mines in Haicheng four tons of ore, 10 per cent uranium.17 Japanese professor Toru Tomita, author of many studies of mining and geology and a former instructor of Peking University, was asked by the Chinese to help them in atomic research. General Ma of Juntong was keeping him in China in a bid to persuade him to work for his country. The professor gave a number of requests, including high pay for him and his associates; the Chinese assured him that they would send another man under his name to Japan to avoiding raising any issues with the repatriation committee so as to keep his project in absolute secrecy.18 The X-2 managed to talk to Tomita, who disclosed that, in 1944, Shiozawa, a high-ranking official of the War Ministry, ordered research of radioactive ores in Shantung province hills, but the scientists could not approach there because the location was occupied by communist

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guerillas. The only research that was possible disclosed columbite, tantalite and fergusonite – but not uranium. There were plans for more research in Northern China, but the end of the war halted everything. Tomita told the Americans that the Chinese lacked the required expertise and equipment as well as adequate electric power for processing radioactive ores. General Ma of Juntong did not permit for Tomita to leave China – for the time being he was with few means, living in a small apartment in Peking. General Ma effectively held other scientists, mine engineers Chujiro Yonetani and Fnu Minakawa.19 The X-2 reported that a 26-year-old Kwantung army intelligence officer connected to Kempeitai was employed by Juntong after the end of the war, mobilising networks of his comrades in communist-held Manchuria to provide leads (and rumours) of military intelligence and uranium research by the Soviets.20 Guy Burgess – the Soviet spy in the Foreign Office – had received reports from British intelligence that the Russians had been searching for uranium in Manchuria.21 Russian military intelligence officers were informed that uranium mines were located in Haicheng, in Fengtian province.22 German geologists and mines engineers who had previously worked for Japanese companies were questioned about uranium deposits. For example, Heinrich Basse, a geologist in Mukden, and Heinrich Stahlmann, an engineer in Mukden, were interrogated about uranium by high-ranking Russians officers. On 20 September 1945, at the Russian headquarters in Mukden, Basse was questioned by Major General KovtunStankevic. Basse spoke of large coal mine at Foo Chow, and lead mines.23 Russian Major Tomokovich and Captain Urosoff took control of the mines of Haicheng and were assisted by three geologists who worked from November 1945 to January 1946, removing all available equipment; but apparently they did not find adequate uranium deposits.24 Stahlmann was born in Dortmund in 1899 and arrived in China with his family in 1906. In 1935 he became a member of the Nazi party while living in Harbin. After initial interrogation, he was questioned together with Basse about coal, lead, oil and uranium. Basse revealed that there were uranium deposits between Mukden and Dairen, near Ta She Tsiau. Both were released after their interrogation.25 On 14 July 1946, a report was received from an X-2 informant in Mukden. Franz Kuchling, a member of the local German community was in daily contact with officers of the branch of Vneshtorg, the Soviet

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Bureau of Far Eastern Trade. They wanted information about mineral deposits and especially uranium and scientists (geologists and mines engineers) who remained in Manchuria. Kuchling presented himself as a mining engineer, but the informant called him a ‘poorly educated prospector’. Kuchling talked with the informant, disclosing that the Soviets were anxious to learn if the Americans knew of their interest in uranium and of deposits around the Mukden area. The German had told the Russians that he had heard that the Americans had contacted and talked with Heinrich Basse, whom they arranged to go south to look at mines previously operated by the Japanese. Kuchling had the trust of the Soviets. The informer of X-2 was clear that the German was ‘known to have given information to Russian intelligence officers during the Red Army’s occupation of Mukden, and that he is now disliked by other Germans for this reason.’26 Another German who had ‘given much information to this office’ (X-2) in Mukden was Otto Ernest Liell, a merchant of dyestuffs who lived in the city in 1943–46. For the time being, Liell was hiding in a Catholic convent in Mukden.27 According to a former employee, a Japanese mining expert of the Taihei Kogyo mine, Russian officers investigated the mine in Manchuria several times, looking for uranium samples.28 Meanwhile, in Shanghai the X-2 noted that the demand for uranium was ‘caused by the publicity given to uranium through the atomic bomb’. X-2 made a bid ‘to control this price to a great extent by circulating rumors as to the current price in America.’ Nonetheless, ‘breach of security was caused by the letter written by British Major J.P. Worley MC (Military Cross recipient) at present in the United States, to Fancisco Garneiro, Shanghai, one time informer for the Hovans Group . . . Worley left for the States in October last year and took with him to sell it at official government rates. But he contacted Carneiro informing him of the true value and restrictions of uranium sale in the States.’ The Greek named Seitanidis, V. Erenkin and Toroyan were identified as the chief brokers of small amounts of uranium, while ‘through various cut outs this office (X2) has determined that the amounts for sale (292 lbs and 24 lbs packed by Imperial Chemical Industries and 20 lbs packed by Etudes and Traitements and 200 lbs packed by ICI) constitute practically all the uranium available on the black market.’29 In a bid to unmask the true Russian demand for uranium, the X-2 offered to sell 150 pounds to Expothleb (Soviet Trade organisation).

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A sample of uranium oxide was given to Voinoff, the head officer who sent it to Moscow for analysis. Soon, after just ten days, Moscow authorised the purchase, insisting though that the real owner of the uranium meet with the Soviet trade representatives and not the brokers. X-2’s report read: ‘Our agent (X2) has contacted Arinichev and Ageev the Soviet trade representatives and was questioned at great length concerning the cargo being offered. Arinichev was very curious as to the manufacture of the uranium salts wanting to know where it was packed and how it ended up in Shanghai. Our agent offered the salt at 75 USD per pound the Soviet found the price agreeable.’ (X2 had set the price.) Arinichev ‘instructed our agent to obtain more information on the source of the uranium being offered for sale and insisted on knowing who the owner was. He inquired whether the Americans were interested in this. He will pay the agent for uranium information obtained.’30 Eventually the Soviets did not proceed with the purchase. Raising the public’s (and smugglers’) interest, in late January 1947 the Shanghai Evening Post reported that uranium was discovered in Guangxi, Southern Hunan, Jiangxi and in the mountainous coal-mining areas of Manchuria, north of Mukden.31 Meanwhile the Chinese government was in negotiations with the US Atomic Energy Commission to secure funds and equipment for uranium and thorium research in China. Showing the intent to bargain, only in 1948, the Chinese government enacted legislation ‘to protect its uranium and thorium deposits and to prevent these two important radioactive elements from leaving the country except on official approval.’ Thus, only the National Resources Commission could lead and oversee the excavation of these minerals. It was announced that the commission was preparing to survey Guangxi for thorium.32 Kremlin’s propaganda hit back: Moscow Radio laid charges against the ‘American militarists’ who were looking for uranium, ‘the basic element of the atomic bomb’, in northwest China, conducting aerial surveys and mapping the deposits.33 The SSU had already reported ‘the Soviet official and semi official circles are spreading the rumors that the Soviet government has captured in Manchuria from the Japanese, a large quantity of Radium, and besides that they have bought in Shanghai about 50 mg of the metal. All these rumors have no basis but are being spread for the purpose of showing to the people that the Soviets have obtained materials for the atomic bomb.

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Although it is known that the Japanese have obtained some Radium when they occupied the Peking Union Medical college at Peking, but this they have sent off to Japan for carrying out atomic research’. There was no doubt that the Japanese did not keep Radium or Radium active metals in Manchuria. In Shanghai at the Belgian Radium Institute an insufficient amount (for weapons development) was retained.34 According to X-2, in Shanghai the Soviet Trade organisation had managed to get hold of very small quantities, from 5 to 15 lbs each. Voinoff did not know that the X-2 had developed a plan to lure him into buying uranium and that US agents and their informers followed the activities of the Soviet trade representatives in Canton and Hankow.35 The X-2 knew that ‘the main source of uranium in Shanghai is, and has been a Chinese industrial chemical company dealing mainly in dyestuffs and indigo’. The name of the company was Young Foong Hong Industrial Chemicals’. The broker Seitanidis, who sold X-2 agents 11 pounds, 5 ounces of uranium, had bought it from another broker named Oxsus. The uranium was a part of a stock held by the Japanese Navy in Shanghai, and Oxsus was given a sample for chemical analysis to safeguard. The rest of uranium was transferred to Japan in 1945, before the end of the war. X-2 officers spoke with an official of the Manhattan project, and all concluded that ‘the amount in our possession is packaged in a manner similar to the stock in Japan, and there is a similarity in the labels. It is the opinion of the investigator the two amounts represent the same original cargo.’36 In his turn, Mao, in August 1946, declared ‘the atomic bomb is a paper tiger’, and only the people’s fight could lead to victory. It was a calculated bid to ease fears within the CCP and the PLA about the future of war. Kang Sheng, the closest intelligence chief to Mao at that time, organised the recruitment of Chinese scientists abroad with a focus on the ones who researched rocket science and nuclear physics – but there was not yet an outline for acquisition of atomic weapons.37 Curiously, in February 1946, Tihvinsky, the second secretary of the Soviet consulate in Chungking and acting consul in the Tietsin–Peking area, boasted to confidants that his country had ‘now perfected the atomic bomb’ and that Soviet scientists have ‘carried research further that the United States has . . . [The Soviet Union can] take a firm stand against America’. The X-2 reported that the ‘source for this statement was an intimate friend from Moscow who had official information on Russia’s atomic energy research and its developments . . . at the present

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time subject (Tihvinsky) stated the Russians are perfecting the atomic bomb for use in small arms, giving rifle shells as an example.’38 In reality, at that time the Soviet Union was not even close to developing an atomic weapon. On 9 April 1946 the council of ministers of the Soviet Union decided to establish Design Office No. 11, to work on an atomic bomb. The first bomb was tested on 29 August 1949. The Soviet Red Army withdrew from Manchuria by May 1946. From August 1945, the Soviets were searching for uranium deposits but found little of value. Simply put, had they found abundant quantities, facilitating their atomic weapons programme, they would have stayed much longer, not to support Mao (as Chiang Kai-shek, Washington and London concluded, observing the Soviet presence in 1945–6) but to get the uranium. Nonetheless, in 1949, before the proclamation of the People’s Republic of China, Moscow filed a request for uranium-mining concessions north of Chiamussu in Manchuria and in Xinjiang.39 In any case, Moscow was informed of the American plans for negotiating with the Chinese on uranium and thorium research. Stalin’s secret source was none other than Donald Maclean, the First Secretary at the British embassy in Washington, a spy belonging to Philby’s and Burgess Cambridge spy ring. He was named the secretary of the Anglo– American Combined Policy Committee and had access to all deliberations on atomic energy research. Of particular interest is a letter of Maclean to J.G. Stewart of the Cabinet Office: ‘The [US Atomic Energy] commission have shown us informally the draft agreement with the Chinese government the substances of which had been approved by the Commission’. Evidently the Chinese had ‘put up all sorts of demands for the establishment at American expense of research facilities in China in exchange for the right to prospect and that the American facilities which are offered in this draft (of US-Chinese cooperation on minerals research) represent the maximum which the commission are prepared to authorize at the present stage. It appears also that [industrialist Henry] Kaiser has so far not written any report of value regarding the chances of finding uranium in territory controlled by the Chinese government. We gather indeed that he became rather over-excited by the glamour of his mission and by the fancy tales of the Chinese and that his oral reports have not stood up well to the cold scrutiny of [J.K.] Gustafson of the Atomic Energy Commission.’ Gustafson and the US Geological Survey examined the possibility of an exploration in China but it was not their priority.40

CHAPTER 21 THE ONE-EYED LIEUTENANT-GENERAL

December 31, 1945: Lieutenant Colonel Walter Gordon Harmon, the SIS representative in Nanking, met with Mao in secret. The chairman reassured the seasoned intelligence officer that the CCP would not seek to oust the British from Hong Kong, because ‘China has enough trouble on her hands to try and clear up mess in her own country, let alone trying to rule Formosa, for us to clamour for the return of Hong Kong. I am not interested in Hong Kong; it has never been the subject of any discussion amongst us [i.e. the CCP leaders]’.1 Thus the colony was not deemed under threat; besides, Chiang Kai-shek’s armies seemed able to defeat Mao’s troops. Prime Minister Clement Attlee kept Churchill’s special envoy Lieutenant Carton de Wiart in China to report on the escalation of war. Born to a family of nobles, in Brussels, in 1880, Adrian Paul Ghislain Carton de Wiart was rumoured to be an illegitimate son of the King of the Belgians, Leopold II.2 He left his studies at Balliol College, Oxford, to join the army and fight in the Boer War (under the false name ‘Trooper Carton’). Throughout his combat experiences – ‘military career’ would be an understatement – he felt pain: he was wounded in the face, head, stomach, ankle, leg, hip and ear. He lost an eye and an arm. De Wiart had no remorse. He wrote in his memoirs, ‘Frankly I had enjoyed the war.’ He was described as ‘a delightful character and must hold the world record for bad language.’3 During the Boer War he was wounded in the stomach and returned to England where after a brief study at Oxford he was

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commissioned lieutenant and sent back to South Africa. Nonetheless, it was only in 1907that de Wiart was naturalised a British subject and took the oath of allegiance to King Edward VII. While fighting in Somaliland, on 15 May 1915, de Wiart lost his eye and a portion of his ear. On 2/3 July 1916 he fought a temporary lieutenant-colonel in command of the 8th Battalion, 4th Dragoon Guards (Royal Irish) at La Boiselle in France. He was awarded the Victoria Cross for possessing the ‘most conspicuous bravery, coolness and determination during severe operations of a prolonged nature. It was owing in a great measure to his dauntless courage and inspiring example that a serious reverse was averted. He displayed the utmost energy and courage in forcing our attack home. After three other battalion Commanders had become casualties, he controlled their commands, and ensured that the ground won was maintained at all costs. He frequently exposed himself in the organisation of positions and of supplies, passing unflinchingly through fire barrage of the most intense nature. His gallantry was inspiring to all.’4 Despite all this, de Wiart was so modest that in his memoirs he did not mention that he had received the Victoria Cross. With the start of World War II, de Wiart participated in the Norway campaign, and on the eve of the German invasion of Yugoslavia and Greece in April 1941 he was named head of the British-Yugoslavian Military Mission. His plane crash-landed off the coast of the Italianoccupied Libya, and he was found unconscious by the Italian military. As their high-profile prisoner of war, de Wiart was hosted at the Villa Orsini at Sulmona, and later at the Castello di Vincigliata, a prison for only the most senior officers. Together with other captured generals, Sir Richard O’Connor, Thomas Daniel Knox and Lieutenant-General Philip Neame, another Victoria Cross recipient, he organised his escape. De Wiart made five attempts to escape. In one, he posed as an Italian peasant before being re-arrested. The Italian allowed his repatriation due to the loss of his arm. He reached Britain on 28 August 1943, and soon after attended the Cairo conference; Churchill had picked him to be his personal representative with Chiang Kai-shek, until 1947. Indeed, de Wiart reported to London in parallel to the SIS and the British diplomatic missions in China.5 The GC&CS intercepted a message of Yenan to Moscow on 27 September 1945. Mao was asking for supplies and transport in order to deploy 10,000 troops to Manchuria and the province of Chahar.6 At that

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time the SIS had no presence in Manchuria, and nationalist military officers were the main source of information. The SIS had a ‘reliable source’ who claimed to have access to five orders of General Chu Teh (Zhu De), the supreme commander of the PLA; the orders revealed the plan for 375,000 communist troops to reach and occupy Manchuria and Northeast China. The same month (September 1945) another SIS source claimed that the Russians had delivered up to 200,000 rifles to the CCP cadre at Shanhaikuan and that 60,000 communists were in Mukden having taken possession of Japanese armour. In reality, the Russians treated the communists differently in each area they occupied: they did not allow the PLA into Port Arthur and Dalian; they placed the communists under their orders in Mukden; they tolerated the communist forces in Jehol and Chahar provinces and they cooperated with them in Shanhaikuan. The handing of arms to the communists was also slowed down by late autumn 1945 (the SIS was unaware of this); the Russians were gathering all arms from the defeated Japanese. In Dalian, the Russians allowed the CCP to build a secret munitions factory and recruit fighters.7 Brigadier C.E.R. Hirsch, the deputy director of Military Intelligence at the War Office, was not satisfied with the SIS’s reports on CCP-Soviet cooperation, complaining of the lack of evidence. In fact, Chiang and Mao were asking Stalin that the Red Army remain in Manchuria before the feared arrival of a US force for the communists and before the Nationalist Army reached the area.8 The SIS had a source codenamed ‘Ishmael/Shalfleet’, who reported on Manchuria and North China and made claims that the Soviets looted and armed the communists. The Joint Intelligence Committee (JIC) was not convinced that Stalin could be accused of violating the treaty with Chiang Kai-shek on Manchuria. There was no ‘evidence’ of Mao cooperating with Stalin; he was not deemed to ‘see eye to eye with Moscow ideology.’ The JIC did not feel that British commercial interests in South China were threatened by the developments in Manchuria. Nonetheless, Britain ‘was liable to beat the brunt of China’s xenophobia’. The nationalist government was blocking the return of properties to British subjects in Shanghai; Hong Kong was ‘commercially dead’; and British public utilities companies were restricted in Chungking under the control of Chiang Kai-shek. Thus the Foreign Office could not establish more consular offices beyond Shanghai, Nanking, Tientsin, and Canton – they were blocked by the nationalist government.9

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Source Ismael provided more information and a new map on communist deployments in Manchuria.10 In late December 1945 a ‘reliable’ SIS source reported an attempted landing of nationalist forces at Newchang and Antung. The communist troops fired at them. At Newchang, the Eight Route Army was in charge after the withdrawal of the Soviet Red Army. The Soviet troops had taken away machinery, railway coach-building works, locomotive repair ships and refinery equipment.11 Throughout the war the GC&CS intercepted the messages of the Japanese diplomatic missions in Mukden and of the CCP headquarters in Yenan to Moscow, gaining valuable insights into the security measures of Soviet intelligence in China and the evolving cooperation between Stalin and the CCP, as well as into the latter’s intention to withdraw from Yenan in March 1947, before the advance of KMT forces. Lord Inverchapel, the British Ambassador in Washington, wrote of ‘radical agrarian reformers whose main purpose appeared to be to split up big estates’.12 China confidently observed that ‘it would be probably be safe to say that it is at present a movement sui generis, having sprung from orthodox Soviet Communist seeds, and aiming eventually at orthodox end, but having in its present phase matured into a hardy Chinese product, unreceptive to outside and particular foreign, interference.’13 (In the medium term, it was a sound assessment: the Chinese would not be the surrogates of Moscow, and Mao not the puppet of Stalin; but in the short term the Russians, by withdrawing from Manchuria and allowing the CCP forces to replace them, gave evidence of an evolving alliance with Mao, while maintaining their diplomatic missions in the KMT’s heartland). On 3 January, de Wiart wrote to General Sir Hastings Ismay, the chief of the Imperial General Staff: ‘The Communist situation is looking better, I don’t quite know why. I fancy the Communists don’t like the idea of Central Government troops piling up in the North. I know nothing of course of what is going on behind the Russian scene and any information you can give me on that would help me.’14 In the event, US General George C. Marshall managed to broker an armistice a week later. Five days after this, de Wiart commented that it was too early to judge whether the ceasefire would hold, but that the communists seemed to have ‘realised they cannot compete’ with the central government; nonetheless, he doubted that they would surrender control of their army

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to the KMT. He underestimated the communist forces’ potential, remarking: ‘The Communist Army have nothing more than a big nuisance value and once the Central Government was able to mass troops against them, they were of very little use.’ Beyond mediation attempts and the mistrust between the KMT and CCP leaders, ‘force is the ultimate and deciding factor in the affair’. In any case, even after a defeat of the CCP in battle, many communists would become guerrillas, and the vast size of the country would ensure that they would have found safe areas to organise their attacks against the KMT. He concluded his letter on a prematurely optimistic note: the ceasefire was ‘a big step forward’, providing ‘one more hope for the future’.15 Nonetheless, de Wiart surprised his superior, writing on 5 February to Ismay, concerning the use of nuclear weapons in the civil war in China: ‘Things go on improving here and I think they may really settle down, but it is too early to make up one’s mind definitely. At present the Chinese [communists] are making up to the Russians – poor devils can’t very well do anything else, but I don’t think it affects the situation in any way. An atomic bomb or two is about the only thing that can.’16 On 27 February, de Wiart claimed: ‘Shanghai has gone right back and things look much worse than they did a month ago. It is a wonderful hunting ground for the Russians and they are making the best of it . . . The Communist situation has also deteriorated and it is hard to predict what may or may not happen. I feel the Generalissimo has gone as far as he can and now all depends on Marshall’s report.’17 De Wiart was critical of Marshall in a conversation with Chiang; in his personal opinion, ‘the whole business [of mediation] was very superficial’.18 The SIS reported that a high-ranking nationalist general claimed that a new world war was ‘inevitable’ but would not start in the Far East since China could not confront the Soviet Union. The war would start in the Balkans or Turkey, but eventually China would side with the western allies. There was no doubt, according to him, that Moscow was supporting and was behind the Chinese communists.19 In the meantime, GC&CS intercepted a request from Yenan to Moscow for a loan of US$1.5–2 million to maintain signals communication and to establish a radio and propaganda network.20 By 10 March, hostilities between the CCP and KMT forces had resumed; the communists were defeated in Mukden five days later, but secured a victory in Szeping on 17 March and seized Changchun a month

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later; while on 20 May the KMT forces repulsed those of the CCP in Szeping. De Wiart’s 15 May letter to Ismay was gloomy: ‘Things here are far from bright, I never saw a solution to the Communist question except by giving them a good beating and as they keep on attacking towns I hope the Generalissimo will go for them one of these days. I do not believe Russia would react to this except by supplying arms etc. to the Communists but as they are already doing this it would change nothing in that respect.’21 He did not feel that Marshall had a prospect of success in his efforts. Besides the famines, strikes and inflation ‘are all playing into the Communists’ hands’.22 On 11 July De Wiart wrote to Ismay: ‘I had made certain that the Generalissimo would attack the Communists when this truce was over and the effect of his previous attack at the end of May had been so good that I felt an attack now would have had very good results. I know he meant to attack but I fancy that the American pressure was too strong. The Americans cannot face the idea of Marshall having failed in his mission even though no one could have done more that he has. Still, I feel that the Generalissimo has got a card up his sleeve for the Communists seem very depressed and one can tell a good deal by their attitude when one meets them. Now I can only wait and see what will happen.’23 De Wiart was writing of the developing situation: ‘There is a lot of fighting going on now [on 20 July, Chiang launched a large-scale assault against the communists, with almost 1.6 million troops] and as the Communists are saying things ought to be arranged by peaceful means, I presume they are getting the worse of it, which is all to the good . . . I feel the time has not yet come when we should dispense with using force. This is after all the only thing a great many people understand. Has anything been done yet without it? The only hope of not having to use it is to have it under your hand ready for use.’24 By the end of the year, Chiang, feeling that he had the upper hand, urged that a new Chinese constitution be adopted, but the CCP leadership was too suspicious to consider such an agreement seriously, fearing that they would look weak after the KMT’s large-scale assaults. In his turn, British Ambassador Stevenson feared of Chiang: ‘There is stiff opposition to any liberalisation of the Constitution from reactionary elements in the Kuomitang [KMT] represented by the so-called CC Clique headed by [the] Chen brothers. I am informed that so serious is this opposition and those responsible for Chiang’s safety are nervous of

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an attempt on his life’. Nonetheless Chiang refused to be escorted by a bodyguard in the corridors of the presidential palace.25 In Nanking, the British military attache´ Major-General Eric Hayes, and later Brigadier Leonard Field, had up to eight assistants covering the KMT’s offensive against the PLA. Nationalist staff officers were key sources.26 Field had a meeting with General Cheng Kai-Min, the head of military intelligence in the KMT’s Ministry of Defence, who informed him of the defection of a communist brigadier whom he had personally interrogated. Cheng insisted that Moscow ‘directed’ Mao’s tactics, but the defector claimed that Stalin would not help the CCP with arms. Field expressed no doubts concerning the disclosures of the communist officer: ‘Chinese methods of interrogation, as perfected during the late war by that keen student of Gestapo methods, the late General Tai [Dai] Li, guarantee us against such a possibility [of defectors inventing material]. The Russian statement [to the CCP, as disclosed by the defector] that no direct military aid need be expected from them for five years – always assuming that by this is meant the supply of munitions other than those of surrendered Japanese origin – agrees well with what we know of the Five-Year Plan and the urgent necessity for Russia to devote all the energies to internal rehabilitation.’27 Brigadier Field concluded that the Russians intended to create a buffer zone joining Inner Mongolia, Manchuria, North Korea and Xinjiang.28 Accurate intelligence on the Russian plan not to back the CCP with more arms was not coupled with information that Russian officers were already in liaison with CCP forces in Manchuria, providing training and expertise. General Cheng and the generalissimo wrongly assumed that the CCP would be defeated since it had no strong Soviet backing; this was the reason the nationalist government launched a fullscale assault in July 1946. Chiang Kai-shek offered de Wiart a position as military adviser. Foreign Secretary Ernest Bevin and Ambassador Sir R. Stevenson were suspicious of the generalissimo causing friction with the Americans, ‘as Chiang Kai-shek or his staff might be tempted to play General Carton de Wiart against the American Advisers.’ Appointing de Wiart adviser to Chiang would be interpreted as a British move to aid the nationalist regime – something which was not the intention of London. In any case, the tired general was not willing to take up the post – having witnessed four wars, he wanted to retire.29

CHAPTER 22 SECRET SOURCES

In April 1945, Captain G.A. Garnons-Williams, the influential secret operations chief in South East Asia Command (SEAC) under Lord Mountbatten, voiced the need to replace all SIS officers in China, since, after the war, all their identities were known to the Chinese government.1 Walter Gordon Harmon, the SIS representative in Chungking during the war, who had held secret meetings with Mao and Chou Enlai, was demobilised in late May 1946 and handed over his SIS assignment. It is argued that he turned into a correspondent for The Times of London in Peking. He definitely visited Mao with some other journalists in late 1946, reporting on his positions, especially that he was not interested in Hong Kong and that the CCP had not voted any relevant resolution about ousting the British from the colony. In July 1947 Harmon was named Honorary British Consul in Peking; he retained contact with Chou Enlai and the CCP. Years later Harmon claimed that Chou Enlai even offered him the position of a foreign affairs adviser, which he declined. In 1948 Harmon was offered the directorship of Information Services in the Hong Kong Government, which he kept until summer 1950, when he and his family embarked for Britain.2 Harmon wrote of his meeting with Mao in December 1946: ‘My opinion of Mao Tse-tung, based on former acquaintance with him and reinforced by this more recent meeting, is that he is a man who is absolutely confident of himself, his immediate entourage and his huge following of peasants; that he is determined to attain his objectives, and that whilst he would like to take the pleasant road towards his destination, he is fully prepared to fight every inch of the way there, and with complete

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ruthlessness will smash and obliterate every obstacle that may stand in his way.’3 By the end of the war, according to X-2 of SSU, British intelligence concentrated on Hong Kong and Canton, trying to preserve British economic interests. In addition, in Shanghai, British intelligence was ‘almost completely undercover’. The naval and military attache´s at the consulate engaged in counterespionage. Major C.S. Stephan was the chief intelligence agent of the military attache´’s office by September 1945. In November, Captain B.S.B. Cole, and later Lt Austin Crowder, took over. It seemed that the British did not want to cooperate with the Chinese, and few Chinese agents were reemployed by the British. The British intelligence set up in Peking, Tietsin and Tsingtao ‘appear to be almost negligible’ SSU assessed.4 In Portuguese-occupied Macau, Consul John M. Reeves was heading the local intelligence network of about 200 agents. In December 1942 he was ordered to cease all activities and turned the organisation over to Jack Braga, a former Associated Press correspondent and a key agent of Reeves. The network reported military intelligence of Japanese troops, and eventually, according to Braga, separated from the consulate, which initially financed the spies. By December 1945, Braga had only 10 agents. Braga blamed his superiors: though his organisation had uncovered Chinese traitors and collaborators, no action had been taken against them.5 According to X-2 Branch of the SSU, two agents, Greek ship-owners, worked for the British in Shanghai: the brothers Emanuel and Paul Yanoulatos. Paul had previously worked for Russian intelligence, the SSU claimed. Since 1926 they maintained a small business in Shanghai, and in 1939 Emanuel was named representative of a medicines/narcotics firm in order to cover his activities for British intelligence. Later he founded the Sino-Greek Steamship Co Ltd and the Chinese Pongee Company, both based in Hong Kong. In 1936, Emanuel became consul general of Greece in Shanghai. In 1941, Paul took over the enterprises and had a partner, a White Russian called P.N. Matinovsky. Allegedly, he was ordered to go to Australia for training by British intelligence, but he also worked for the Soviets. By the end of the war, both brothers were millionaire ship-owners. Paul worked for the Russians; Emanuel for the British.6 By 1947, the SIS had set up stations in Hong Kong, Tientsin, Shanghai, Nanking and Urumchi (northwest China), and had done the

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same in neighbouring states – in Tokyo, Jakarta and Hanoi – and was now seeking to expand to Bangkok, Kabul and Seoul. Dick Ellis, the SIS regional controller, sounded disappointed about the quality of the intelligence received. Indeed, the SIS had few secret sources in China and had to rely on fragile collaboration with the Juntong. Proposals for elaborate secret-intelligence schemes had reached SIS headquarters in Broadway, but after some attempts at implementation were eventually turned down. In late 1946, a senior Juntong intelligence officer, who had earlier been an SOE contact, argued in favour of the SIS station in Nanking setting up a bogus press agency in Shanghai. The agency’s ‘correspondents’ would mainly be White Russian refugees, who would report on Soviet deployments and on policy planning with respect to Mao and Chiang. This scheme did not develop further due to the ‘chaotic economy’, which affected the salaries of the prospective spies, as well as to the SIS’s suspicions about the Chinese officer’s integrity. Headquarters described him as ‘an adventurer out to feather his own nest, a bluffer and not too good even at that game’.7 The Chinese officer had claimed that the KMT was losing the war – an estimate shared, however, by the Foreign Office. In Shanghai the newly-established branch of British Economic and Trade Research Organisation (BETRO) raised the suspicion of the SSU. For the Americans, the British were ‘very active in the economic intelligence and propaganda field.’8 Indeed, ‘most of the Chinese agents of BETRO are employed by the Statistics Bureau [Juntong] and also by the Trade Information Bureau. The Economic Propaganda Bureau which is now being formed, will consist of some Chinese members of the British and foreign firms.’ The SSU assessed that ‘the actual plan of the BETRO is to create a net of Chinese and other agents who are distributed amongst the various organisations which deal in import and export business. The basis of the information however, is at the Customs, the employees of which have already been recruited for the collection of statistics.’9 The British firms had concluded that the American products dominated the Shanghai market, but that there were trade opportunities in textile machinery, electrical equipment, woollen and cotton piece goods, optical instruments, fine and industrial chemicals, glassware and cookery equipment, heavy industrial machinery, building materials, paints and varnishes.10 Nonetheless fifteen of the most important firms were moving to Hong Kong, among them the Imperial Chemical

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Industries, Mange & Price and Maitland and Co. It was deemed ‘impossible’ to continue operating in Shanghai because of high duties of imported goods, inflated transportation and moving charges, delays in the unloading of transports and pilferage of the goods.11 The SIS’s key asset in postwar Shanghai was not BETRO but the Clarke Inquiry and Protection Agency. The X-2 Branch of SSU confirmed that the agency, founded in 1933 by W.G. Clarke, a former SMP inspector and SIS officer during the war, worked for British intelligence as well as other agencies. Clarke’s Agency was ‘doing intelligence work for British, Chinese and American sources’. ‘Evidence would also indicate that some work is being done for the USSR and possibly for the Chinese Communists. This agency appears to be a meeting place for many of Shanghai’s professional informers’.12 In December 1941, Clarke was arrested and was given ‘rough treatment’ by the Japanese. While he was imprisoned, and later upon his release and stay in Chungking, the Clarke Agency was run by one of his employees, a White Russian called Andre Andreevitch Nogaytsev, who was in his mid forties by 1946. In wartime Shanghai, the Russian focused on dealings in wine, sugar and medicines and other scarce items. Nonetheless, ‘there are unconfirmed reports however that the agency was guilty of aiding the Japanese in furnishing information and conducting investigations’, remarked a SSU report. After the surrender of Japan and the liberation of Shanghai, Clarke, who was in poor health, asked Nogaytsev to continue managing the agency, according to the X-2 Branch of the SSU. US agencies like the Judge Advocate General and the Treasury Department were supplied information from the Clarke Agency.13 Nogaytsev had connections with SIS. During the 1927 strike in Shanghai, Nogaytsev was called by British Captain Webster to enlist White Russians as strikebreakers for steamers of Asiatic petroleum Co. He began working as an informer for John Cook, a British intelligence officer who worked also for Scotland Yard in narcotics and trafficking. Later, Nogaytsev worked for Nicolson, the US representative of the Treasury Department. Some rumours had him working for Major Williams, an American intelligence officer. During World War II, the White Russian secured intelligence of Soviet activities; thus he saved the Clarke agency from the Japanese by supplying them information.14

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Many ‘questionable characters’ met at the offices of the Clarke Agency. One of them was Vladimir Mihailovich Kedrolivansky, aka Barri, aka Dean, ‘who at one time was employed by the United States Treasure department in investigative work concerning the drug trade and traffic’ in Hong Kong and Manila. He was identified as a silent partner of the Clarke Agency; possibly he was still working for the Treasury, deemed the SSU. Kedrolivansky had also served in the Shanghai Municipal Police (SMP) in 1924– 5, and was known for hunting Soviet agents. Most significantly, prior to working for the Americans, he was employed by the Japanese Consular Intelligence, and was considered their ‘No. 1’ agent. Allegedly, another top-ranking member of Clarke was G.A. Tcherenshansky, a former detective of the SMP, who had ‘allegedly’ collaborated with the Germans and the Japanese. S. Maklaevsky was a former chief inspector of the Japanese SMP, and was awarded a mention in dispatches for with a citation for Good Services by the Japanese Foreign Minister Matsuoka. According to SSU files, he was reported ‘active’ in gathering intelligence on Chinese communists and the Russians. Another associate of the Clarke agency was a Russian-speaking Chinese called ‘Michael’ or Mischa Ung, who was involved in drug trafficking and cooperated with nationalist Chinese secret services. There was also Miss Oksanna Girrar, ‘a pretty French girl of Russian extraction whom [an SSU] source refers to as the “Shanghai Mata Hari”’. The SSU report disclosed that ‘from observation of the persons working for the agency there is evidence which would lead the investigating officer to believe that work is also being done for the Russians and possibly the Chinese Communists. If for the latter it is probably on a free basis or paid for by the Russians.’15 A secret source disclosed in January 1946 that Clarke himself had received from British intelligence – evidently the SIS – orders to report on the activities of various Chinese political organisations, the names and address of Chinese intelligence agents in Shanghai and the activities of Chinese labour unions and local Chinese communists. Kedrlivansky occasionally appeared in the uniform of a US lieutenant; in parallel he worked for a US Army agency, unknown to the SSU. In 1939–42, he worked for the Japanese consulate, but was suspected being ‘a double crosser and barely managed to get out alive during the American evacuation [of Shanghai].’ He cooperated and shared information with

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detectives Elianoff and Ussakovsky of the French Police Political Department, with Lebedeff, a Soviet Secret Intelligence agent, and with Slutsky of the Japanese Secret Service. The Russian community in Shanghai knew him as an international spy ‘for the highest bidder.’16 It was Austin Crowder, the security officer of the British Naval Attache’s Office in Shanghai, who confirmed to an SSU officer that the Clarke agency was working for British intelligence. Crowder provided the American with a chart of the Japanese communist party structure in Shanghai, revealing that it was given to him by W.G. Clarke himself. Crowder admitted to having been trained by MI5 and said that he would return to England by the end of May 1946 – less than a month away. Crowder disclosed that ‘most of the British activity had been centred in South China in and around Hongkong [sic] and Canton and that they actually had insufficient personnel to handle such matters.’ He asked from the American for information on the Japanese communist party to be shared with him and his office. According to Crowder, British intelligence had ‘few’ operatives in Shanghai – there were two security representatives. Discussing on the developments in North China, ‘Crowder laughingly said that he was supposed to be covering the political situation in North China, which he generally made up from newspapers and that they [the Naval Attache’s Office] had no real representation in North China, and in this connection he used the comparative stating, “nothing like SSU”’.17 He said that most British intelligence activity was aimed at Tietsin and North China. All intelligence gathering, political and military, was based and centred in Hong Kong. Crowder said that ‘from reports received and from what he had to say Hong Kong will be the operational location of British intelligence activities.’ Many naval intelligence operations would focus on the security of Singapore. For the time being, the majority of British intelligence investigated war crimes and cases of collaboration with the Japanese. British teams worked together with the US War Crimes Commission; a British team named ‘No. 9’ had just arrived in Shanghai to conduct war crimes investigations. For Crowder, the BAAG had been liquidated. Besides, ‘members of the BAAG delegation had difficulty in getting along with people who came in after the surrender’. The BAAG was ‘strictly “cloak and dagger”’ and was on bad terms with the Consulate personnel, boasting that ‘they were superior in intelligence matters which resulted in a request that they be

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removed from Theatre [of operations in China], and they have been removed in the meantime’. According to Crowder, the BAAG in Shanghai ‘have done considerable underground work during the occupation’. A Chinese operative ‘who is known personally to the writer’ maintained a transmitter sending messages about Japanese military deployments.18 Meanwhile, the Hong Kong SIS station and MI5 quarrelled with the British military intelligence. By April 1947 the Southeast Asia Land Forces (SEALF) headquarters reported to London, in particular to MI2 (Military Intelligence) at the War Office and the secretary of the JIC: ‘There has been trouble in Hong Kong between the Service and civil intelligence organisations. Brigadier ALMS was on his way to sort this out when he was killed (in an accident). All his ideas were in his head and nobody at present with eye “I” [i.e. intelligence] GHQ SEALF knows what he was going to do about it.’ The trouble routed to: (a) A clash of personalities between Col Stables and the LSO [Liaison Security Officer]. (b) Inability of the civil organisations to pass information to Service members due to their tasks. (c) Extreme keenness on the part of Service ‘I’ members to supplement information on China NOT available from other sources on the theory, backed by the GOC [Government of China], that what happens in China reflects on Hong Kong affairs. (d) Due to this over-keenness, Service ‘I’ members conflict with civil intelligence organisations in trying to get information, sometimes to the embarrassment of the latter.19 Brigadier Alms had already dispatched a staff officer to Hong Kong and Nanking to get more information of the issues at hand. The report read: ‘I understand that the Civil [intelligence organisations] criticised this action [to send over the officer] and the arrangements made by the GII [i.e. the officer] in question to obtain copies of information for this HQ. I agree with Brigadier ALMS that information from China is essential to you and the planners and must be obtained at first hand and quickly. It would appear, however, that in their keenness, the Intelligence personnel in HONG KONG are engaged in affairs outside their orbit but that this would be avoided if Civil [intelligence] sources were

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permitted to keep them adequately informed.’ In his turn, the British military attache´ in Nanking assumed that British military intelligence in Hong Kong ‘were admirably placed’ to cover South China. On the return of the staff officer from Hong Kong, it was assumed that a directive would be drafted to Land Forces Hong Kong, giving tasking of intelligence gathering.20 Military intelligence struggled to find informed sources of China. A journalist ‘with long experience in China and formerly with the General Liaison Office India’ reported that in one recent interview Mao sounded that he had no specific plans for the future of Hong Kong. He was presumed willing to deal with the Labour Government; ‘but if the Conservatives came in it might be different’, claimed the journalist.21 Intelligence officers did not worry about Mao’s intentions (‘at the moment there is no danger to the Colony from the Communists, and that if they come into power will be willing to “play ball” with the Labour Government, for a consideration’).22 Another secret source of military intelligence was ‘a Chinese resident businessman who during the war was with British Army Aid Group (BAAG) claimed that the nationalist Chinese regime believed that Hong Kong would return to Chinese control in 15– 20 years but that the British would be allowed to keep a naval base there’.23 Notably, another secret source, a ‘Eurasian businessman who during the war worked with British Intelligence’, predicted that Hong Kong would be under Chinese sovereignty, but he could not give a timeframe for an agreement. In any case, ‘should the Labour Government go then it might be handed back anytime’.24 A British officer working for United Nations Relief and Rehabilitation Administration (UNRRA) described the conditions in rural China and the sentiment towards the CCP and KMT. In early December 1946, he reported that people in the CCP-held Shansi, Hopei, Shantung and Hunan regarded ‘the will of the people’ as the ‘supreme law’. Landowners were persecuted, and middle- and upper-class Chinese taken in front of people’s courts; foreign missionary property was confiscated, and churches used as assembly halls. Officials at the Foreign Office drew parallels with Nazi Germany: ‘In its “Peoples Courts” reminiscent of Nazi Germany, and in its reference to the free reign given to the lower classes against the middle and upper classes [it is] reminiscent of the early days of the Soviet regime in Russia, before the

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Communist Party, having liquidated the upper and middle classes, clamped down on the peasantry also.’25 GC&CS intercepted messages from Moscow to Yenan disclosing orders to ensure confidentiality in communications and avoid leaks. On 16 January 1947 Moscow informed Yenan: ‘According to information in our possession “27” [code for the Executive Committee of the Communist Party in China] has sent Liu Chang Fung and Lin Tin to “71” [code number] with the task of organising points of communications with the Centre and “82” [Moscow]. In addition it is stated that the merchant Ko Sheng Cheng of the firm Tasheng Chuang is to be the intermediate point for communications with us. If this information is correct please give these comrades instructions not to try to establish contact with us.’26 Most importantly, GC&CS intercepted reports from the CCP headquarters in Yenan to Moscow in mid-March 1947, before the taking of the city. In a 16 March intercept it was made clear that Mao planned to save his forces and prepared ‘to leave “41” [Yenan] at the necessary moment’ and deploy his forces in the mountains ‘in order to secure victory on the main fronts’; ‘judging from the results of the operations of the last 8 months, when on average 8 brigades of the regular troops of 20 [Chiang Kai-shek] have been destroyed each month, it will be possible to destroy a total of 140–150 brigades of 20 troops by the end of the year.’27 In March 1948, SIS headquarters sent a message to the Singapore station to instruct the station in Tientsin ‘to make immediate plans for stay-behind organisations with necessary communications in areas likely to be over-run by Communists, particularly Peking [Beijing], Tientsin area and South Manchuria’.28 Indeed, in London from the discussion between the SIS and the Deputy Director of Military Intelligence, emerged: ‘from an “Intelligence” point of view we must have some agents remaining behind to keep us informed of current happenings, and if necessary, to assist in any measures which the anti-Communist Chinese may be considering. But this can better be done by trained experts rather than normal commercial methods.’29 The SIS Tientsin station head approached British firms operating in the region, asking for help. (It was widely assumed that Mao, as an agrarian reformer, would not follow a Marxist-Leninist line, and would allow foreign firms to operate unobstructed). The reply of British businessmen, for years agitated by the stance of the KMT regime towards them, was negative. The SIS

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station head in his report made reference to a ‘regrettable attitude’, ‘a mixture of complacency, optimism and fatalism’ of some British businessmen. Besides, no able and loyal Chinese secret operative could be found: ‘Virtually no Chinese – one may perhaps say literally none – could be trusted to work honestly for us as much as twenty-four hours once our backs were turned unless we had some powerful hold over them.’ Blackmail was the method, but no suitable targets could be found. The SIS station head said that it was ‘irrelevant’ to argue that the Chinese had worked for British intelligence during the war with Japan,30 going on to say the communists were not enemies ‘in the eyes of the vast majority of Chinese’.31 The wireless sets destined for the stay-behind intelligence nests had reached Hong Kong, but the PLA’s advance halted their dispatch. In the territories held by the CCP, diplomats and intelligence officers were closely watched and remained essentially confined to their compounds.32 In early 1948, Under-Secretary Orme Sargent at the Foreign Office deplored the lack of any warning by the SIS of the crisis in Kowloon; this had resulted in an attack on the British Consulate-General in Canton, which was burned down, as well as on that in Baghdad. Sargent wrote to Stewart Menzies, the ‘C’, the head of the SIS: ‘I must confess that I am a little perturbed to find your organisation was unable to give us any warning of the course which events were likely to take recently in Kowloon and Baghdad.’ Sargent remained ‘anxious about the supply of secret intelligence because in the coming months we may well be faced with developments of a far-reaching nature throughout Europe, particularly in Italy and France’. Menzies replied that Western Europe was well covered by SIS sources.33 Menzies also claimed with reference to Kowloon and Baghdad that it was not ‘within the scope of Secret Intelligence, with its limited resources in peace, to provide a running forecast of specific outbreaks, even when spontaneous combustion is intensified by arson’. He insisted that the SIS was ‘to amplify the general warnings of HM [His Majesty’s] Representatives and to attempt to penetrate the hostile elements sufficiently to procure fore-knowledge of their general plans’. In China, the service was ‘barely under way’, he remarked, adding that the coming of the crisis in Kowloon had ‘presumably’ been addressed by MI5 or the Consulate-General. In the case of Baghdad he admitted that the SIS focused its sources’ development on government circles and not on the

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opposition; the reporting of the troubles commenced once the riots had begun.34 Menzies was a shrewd Whitehall player: he mentioned the amplification of a general warning in a developing situation; he did not say that the SIS was about to disclose enemy secrets promptly; he kept expectations to a minimum, thus safeguarding against criticism if a warning failed. Indeed, Sargent was asking too much by failing to address the issue of the KMT, also causing trouble against expatriates and foreign missions. The Kowloon riot took place in the small compound of the Walled City, ‘hardly larger than a London square’. During the Japanese occupation part of the compound was destroyed, and it was later inhabited by squatters. The British sought to repossess the pocket, and the Chinese police, after warnings, evicted the squatters, wounding two. In response ‘a virulent anti-British vernacular press campaign’, instigated by the KMT in Canton, took the British by surprise: ‘Without warning a mob of several thousand Chinese crossed the bridge from Canton to Shameen Island, led by uniformed members of the San Min Chui Youth Corps.’ The consulate’s Union Jack was hauled down, and the compound and other nearby buildings set on fire. The Chinese claimed sovereignty over the compound area and raised their own flag. British diplomats insisted that the KMT, ‘though itself culpable’, put the blame on the CCP. In any case, it was ‘the anti-foreign feeling’ of the Chinese that led to the massive riot, while the KMT and its youth party played on nationalism to distract public opinion from economic hardship and from the fact that the nationalists were losing the civil war.35 By early autumn 1948, the Foreign Office remained calm when assumptions and unconfirmed reports were circulated that Moscow would recognise ‘the People’s Government of North China’ under the CCP. The assessment of Stalin’s intentions was accurate: ‘Prima facie we doubt the Soviet Government having any such intention, though it might suit their present purpose to give currency to this rumour.’36

CHAPTER 23 GUY BURGESS THE SPY

‘I should like to have a report on these men and their careers. It appears to be known that their characters were unsatisfactory. Was any consideration given to these matters in continuing them in the Service or in appointing them to positions of responsibility? There is likely to be a lot of public criticism’, wrote Clement Attlee in a note to Ernest Bevin, the Foreign Secretary.1 It was 10 June 1951, and the news had emerged that diplomats Donald Maclean and Guy Burgess had disappeared in France over the weekend 25 – 27 May. Maclean had been identified as a secret source codenamed Homer in Venona and was due to be interrogated in June. By the end of October, Attlee would no longer be prime minister. Burgess was the spy codenamed Ma¨dchen (‘Little Girl’ in German), but until then fell under no suspicion of espionage for the Kremlin. Three days later, on 13 June, the prime minister received the brief on the careers of Maclean and Burgess. Attlee read fast. First in line was a cover brief and Maclean’s career brief. It read: ‘Mr. Maclean’s record, apart from the incidents at Cairo referred to in the [following annexed] statement, had been entirely satisfactory and he was regarded as a very promising member of the Foreign Service. You will no doubt have noted Eden’s tribute to his ability in the House [of Commons] on June 11th.’2 Donald Duart Maclean was born on 25 May 1913 and was educated at Trinity Hall, Cambridge. In 1935 he joined the Foreign Office. In May 1944 Maclean was posted to the British embassy in Washington, and in November 1948 in the embassy in Cairo. In November 1950 he was transferred to the British embassy in Washington, as head of the

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American department. In his postings in Washington he was deemed ‘exceptionally able’. In Cairo he broke into the apartment of the private secretary of the American ambassador, and together with another man did considerable damage. He was drunk. Despite this episode, which received publicity both in the British and Egyptian press, ‘the Ambassador [Sir R.I. Campbell] declared that he still adhered to his high opinion of Mr. Maclean’. After treatment in Britain, Maclean was deemed fit to continue with his duties at the Foreign Office. He was posted to the American department of the Foreign Office. He had voiced his fear that a workload would lead him again to a breakdown. Indeed, all major issues of this department were handled by the Far Eastern, North Atlantic and Western organisations departments. While at the American Department he worked ‘satisfactorily up to the day of his disappearance. Mr Maclean had never been suspected of disloyalty until April this year’.3 This followed the brief on Burgess: ‘Mr. G.F. De M. Burgess . . . born on the 16th April, 1911 and was educated at Eton, the Royal Naval College, Dartmouth and Trinity College Cambridge. He worked as a journalist before the war and from 1936/39 and 1941/44 was on the staff of BBC . . . appointed to the News Department of the Foreign Office as a Temporary Press Officer on the 5th June, 1944 . . . 31st December 1946. Transferred to office of Minister of State as Personal Assistant; 1st October, 1947. Granted certificate for establishment in Branch B of His Majesty’s Foreign Service . . . 1st November, 1948. Transferred to Far Eastern Department of Foreign Office; 7th August, 1950. Transferred to Washington as Second Secretary.’4 What was his performance? ‘Mr. Burgess’s work in the Foreign Office News Department was satisfactory . . . the head of the department described him as “a keen, able and resourceful officer”. Most significantly, Minister of State, Hector McNeil, was also very satisfied with Burgess’s and soon he was posted to the Far Eastern Department which was responsible for China policy.5 In January 1950 it was reported that Burgess, while at Tangiers with his mother in October-November 1949, exhibited ‘irresponsible and indiscreet’ behaviour. He was noted for ‘loose talk about secret organisations’. A disciplinary board examined Burgess’s case and decided he be transferred to another post and not be promoted in Branch A of the Foreign Service. He was transferred to Washington embassy in August

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1950. ‘It was decided to try him in a large post like Washington because there it would be both easier to control and judge him and less conspicuous to remove him (if need be) than in a small post.’6 The State Department filed a complaint about Burgess on 31 March 1951 for reckless driving. The British ambassador informed London that Burgess’s work was ‘unsatisfactory’, that his ‘routine work lacked thoroughness and balance’ and that ‘he had to be reprimanded for carelessness in leaving confidential papers unattended.’ Burgess asked to be transferred and was recalled to London: ‘he was given a week or two to think this over (whether he should resign) and meanwhile consideration was given to the means of terminating his appointment should he decide not to resign. At this point he disappeared.’7 Attlee read the last paragraph of the brief; the head of the Security Department of the Foreign office ‘had doubts about the reliability of Mr. Burgess since 1948’ – but no additional information was offered for the prime minister to assess for himself the case against Burgess. It was added only ‘in 1949 he [Burgess] came under the suspicion in connexion with certain leakages of information to Mr F. Kuh, an American journalist, but no information which would enable positive action to be taken could be obtained it regard to this or any other incident. It was known that Mr. Burgess held strong left-wing views; he told the Head of the Foreign Office Personnel Department in July, 1950, that he was a “left-wing Socialist” and a great personal friend of Mr. Strachey, amongst others.’8 Evelyn John St Loe Strachey was a left-wing Labour member of parliament and the editor of the Socialist Review. In September 1947 the JIC discounted the possibility that Mao would take over China.9 Despite the isolation of the KMT forces in Manchuria and the victories of the PLA, the JIC assumed that Mao could reach as far as Yangtze. He would not go into South China; thus Hong Kong would be saved in the worst case scenario of a communist victory – this was the May 1948 estimate of the JIC.10 Indeed, back in 1946, Harmon, the SIS representative in Chungking, reported that that Mao had admitted: ‘I am not interested in Hong Kong and I will certainly not allow it to become a bone of contention between your country and mine’.11 In the summer of 1948, the JIC concluded that it was Stalin who wanted to ‘dominate’ China; Mao was not named in the estimate, which referred to the communists as a ‘useful ally’ of the Russians.12

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While at the Foreign Office Far East Department Burgess, a junior rank but active member closely watched open (the press and propaganda declarations) and secret sources on China and Russia and usually commented on the reports. His writings show his passion for detail – and sometimes his anti-Americanism. A mole stealing secrets is something to be expected. A mole contributing to British policymaking is something astonishing. Guy Burgess, of the Cambridge Five spying, was working for Moscow, sharing its correspondence and papers with his Russian handlers. Burgess, being a recognised expert in international communism, was appointed to the Far East Department of the Foreign Office, responsible for China policy. Morgan and Buchanan, two employees of the British American Tobacco Company, held in Yinkow from 25 February to 22 October, had been interviewed by A.A.E. Franklin, the consul in charge. They were key sources of intelligence on communist-held territory, reporting that the CCP soldiers were well disciplined, their morale was high and they were all youthful; the same applied to the officers. Soldiers cultivated the land and followed communist propaganda and doctrine. There was a glimpse of CCP-Soviet relations: ‘They [Morgan and Buchanan] did not get the impression that officials were very pro-Soviet. Officials claimed that Chinese Communists had received little, if any, help from [the] USSR’, Burgess remarked.13 On 13 November 1948, Burgess wrote to a colleague, commenting on the intelligence provided by Morgan and Buchanan, who reported, among other things, their plan for total victory within two years. The communists (‘troops work, & hard, on the land. Officials live simply’) sounded willing to come with an arrangement with local British consul, and their xenophobia was directed only against the Americans.14 Burgess doubted that it would be possible for the nationalist regime to survive drawing an ‘iron curtain’ along the Yangtze, and believed that the honest administration that the nationalists needed to get the people’s support was an impossibility.15 In Burgess’s eyes, from May 1945 until the middle 1947, the Chinese nationalist government ‘consistently refrained from attacking Soviet policy in general or its role in China in particular.’ According to the British ambassador, in three interviews in June 1947 Dr Sun Fo, Vice President of the National Government and the President of the Legislative Yuan, ‘expressed outspokenly provocative opinions regarding Soviet policy’. Chiang Kai-shek felt

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emboldened with the lifting of the American arms embargo; nonetheless, he ‘had not passed over to a full scale attack’ on Moscow.16 Burgess closely studied communist declarations and reports of the Chinese political and military aims. Commenting on Mao’s declared policy in early January 1949, Burgess wrote about Mao’s plan: ‘a firm social basis for Communist political power is achieved through agrarian reform and some form of Trade Union development’, ‘to be followed until sufficient Communist administrators and technicians plus an assurance of necessary imports both of raw materials and machinery have been secured’. Then, expropriation and dictatorship will be attempted.’17 In February 1949, writing on the PLA’s operations in Yunnan, Burgess remarked: ‘the situation in Yunnan . . . is one of political tide turning before coat turning had begun . . . In fact it looks as though the effort of the CCP to organise and develop its strength in Yunnan and was advocated & outlined in the documents captured in Hong Kong is proceeding according to plan.’18 The PLA won one battle after the other, and gradually the British consulates became isolated. In late March 1949, the assistant to the station head in Tientsin informed SIS headquarters that under the new rules imposed by the CCP all cable traffic had to be uncoded, with an attachment of a Chinese translation to the text, and submitted to the communist authorities. The same restrictions were reported by the SIS station in Urumchi, which was tasked with the ‘penetration of Russian Central Asia’.19 Burgess explored the hints of a Moscow public lecture on Chinese communism. The British embassy in Moscow reported what Professor Gluschako was saying. Burgess, complaining that the notes on the speech were not complete, wrote: ‘even the Soviet intelligentsia is kicking at the relative silence of the Soviet press on communist triumphs in the largest country in the world and the one which, after Germany has attracted the most intensive Stalinist theoretical speculation in the past. That the lecture is so (deliberately) perfunctory and cautious could provide a small argument in favour of those who argue that the Kremlin was not quite ready for CCP’s triumph or quite certain of the loyalty of its organisers.’ He noted a contradiction which could have left unobserved: ‘That “communist people under the leadership of the Communist Party” are stated to have “saved China from the Japanese”. This is in contradiction to the usual Soviet line that it was the Red Army

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who, in a brilliant if short campaign, beat the Japanese.’ He closed his memo with another note: ‘it is not clear from the report whether the statement “perhaps China would go [to communism] by its own path” was meant as admission or as an analysis.’20 On 4 April 1949 Mao signed a declaration deporting the conclusion of the Atlantic Pact, warning that, in case of war, the Chinese people would ‘march forward hand in hand with the ally of China, the Soviet Union’.21 An angry Burgess turned against US intelligence in a most comic incident, which commenced on 8 April, when the Director of Naval Intelligence forwarded to the Foreign Office an incomprehensible report of ‘Astalusna’ reading: Chang Shu Hsien former KMT General and Chief Peiping Foreign Affairs Bureau also Bureau Investment [sic] Statistics agent arrived Tsingtao from Peiping 26 March. Positively identified . . . gave following information: ASTALUSNA Peiping informed Chang 2 brigades Soviet troops now at Chanchun 1 of which formerly stationed Mukden for short period. Uniformed Russians appeared marching with various communist army units. Also Russian had armoured cars in commie victory parade Peiping. Many Russians appearing Peiping. Soviet consulate took sign down. Soviet Consulate attitude is they have nothing official to do with the communists. Mao tse-tung still in Peiping and political conference meeting as of 22 March. North China government in Peiping. Communist authorities refuse to do business with consulates only with individuals. Communist general told Chang “supreme authority has ordered us to take Nanking and Shanghai”. Li Chi Sen and liberal delegation virtually prisoners in Peiping hotel Titov still in Tietsin. Comment. Chang’s wife is daughter of Fen Yu Hsian and his mother in law head of CCP women. Not impossible Chang has turned red. His information neither new nor confirmed, however continued reports Soviet uniformed personnel in Manchuria credible. Titov former acting Soviet Consul Tietsin was reported in August to soon be transferred to Peiping.’22 Trying to make a meaning out of this, Burgess turned against the Americans: ‘the important news inside (and if true, it matters quite a lot)

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was, we are told, given by Astalusna to an individual called Chang Shu Hsien. Chang had to be identified by Chin Teh Chun. The news was transmitted by Chang to US intelligence and by them apparently to us. Yet Chang’s informant Astalusna turns out to be the Assistant US Naval Attache´. So we have US intelligence receiving information from their attache´ via a Chinese, passing it to us and then adding “his (i.e. Chang’s) information is neither new nor confirmed . . .” The encyclopedia Britannica divides intelligence into three categories – animal, human and military. To this should be added a fourth. American military. We are asked to comment . . . If Soviet personnel are in China it needs more evidence than this to believe they are in uniform.’23 On 21 April, Burgess wrote in the same piece of paper: ‘I prefer to think of Astalusna as a very beautiful spy.’24 Burgess studied the speech of Jen Pi-shih, who was a member of the Central Committee of the CCP. He found it an ‘important speech and would appear to contain the fullest general statement of Chinese Communist aims and policy we yet have. It is politically as selfconfident as war plans have been militarily and preceded the crossing of the Yangtze by eight days.’ The Russians broadcast the speech word for word as well as their German, Hungarian and Romanian communist press. For Burgess, ‘the publicity given by Moscow to Jen Pi-shih might indicate a desire on Russian’s part to make it clear to the world that China has now finally placed herself on the side of the USSR and is a factor to be countered with in support of Russia.’ The speech referred mainly to internal Chinese policy regarding the industrialisation of the country after victory. It was concluded that ‘the publicity given to a statement of internal policy would appear to be an important endorsement by Moscow of the orthodoxy of the CCP and of the correctness of its line.’ There was a ‘political swing from agrarian reform to industrial production’. The communist leader proclaimed that ‘under the new situation the period of placing the centre of gravity of work on the countryside is now over. The new period has begun of working from the cities to the countryside and of leading the countryside from the cities.’ Eventually, China would lead the anti-imperialist struggle in the Far East with the aid of Moscow.25 An apparent friendly CCP approach occurred during May and August 1949, when telegrams arrived at both the State Department and the Foreign Office, the so-called Chou De´marche. The Chou De´marche was a

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message of Chou Enlai to London and Washington in May and August asking for economic aid. Burgess concluded that ‘the possibility of [there] being real differences does seem to confirm us in our wish to keep a foot in the door in China with the hope that ultimately the development of our connections will be the best way of weakening Soviet ones’.26 Tomlinson, a colleague agreed with Burgess, stressing ‘the stiff and aloof attitude’ of the Soviet government towards the CCP.27 Dening, another colleague held that Britain would exercise ‘influence on the future of a communist-dominated China will be through our interests which are already there’. He concluded that if these telegrams were truthful, ‘there was a chance that China would become Yugoslavia and thus London could make a bid to influence the communist regime’.28 In his study Christopher Baxter argued that ‘It is likely that through Burgess, Dening’s conclusions would have reached Stalin. The implication in terms of Cold War politics would have been for the Soviet leader to promote a more accommodating attitude towards Mao to prevent the British achieving a Sino-Soviet split . . . However, Bevin, unlike the Americans, dismissed the “Chou De´marche” as a plant and chose not to respond.’29 To what extent tactics and strategy could remain secret or indiscernible without a spy is debatable. Burgess sounded savvy, seeking in his analysis to find the potential of a split between Mao and Stalin, taking into consideration the contemporary case of Stalin and Tito. The Chou De´marche was a test shot, nothing more. Mao, now the winner, would not change course in showing the world that he was a new player to confront Britain and America. In March 1949, secret sources led the Special Branch and MI5 in Hong Kong to raid a communist safe house. There they discovered party documents (a diary and notes) which disclosed the ‘orthodox’ communist ideology of the CCP. Bevin was informed: ‘It has been particularly, requested by the Security authorities that the place of origin of these documents – i.e. Hong Kong, should be revealed only to Ministers.’30 The Foreign Secretary was briefed that ‘these documents paint a revealing picture of the ruthless fervour, efficiency and cynicism of the Chinese Communists and provide abundant evidence that, far from the Chinese Communist Party being moderated by any special “Chinese” factors, it is strictly orthodox, confident, mature, and at the highest level very well organised. There is no trace of Titoism. There are references to

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a high-ranking member of the Chinese Communist Party referred to only as “F”, who appears to enjoy considerable authority and to expound the purest Party line, correcting any deviations.’31 Most significantly the papers included many details of KMT officials ‘who are either putting out feelers with a view to enlisting in the Communist ranks, or who are actively working for the Communists while inside the Kuomintang Government. These included a number of personalities connected with the Kwangsi clique, members of the Kuomintang Branches, the Nanking Commissioner of Police, recorded in the documents as having gone to Hainan, and a number of Government Secret Service and Military Officials.’32 Bevin sounded optimistic, believing that: ‘The best hope for British interests to maintain themselves for some time longer in China seems to lie in the presumed Communist need for the continued functioning of British public utilities, insurance, banking, commercial and shipping agencies and industrial enterprises until the Communists are ready to take them over or have organised alternatives. Whatever economic weapons may be at our disposal for the purpose of protecting British economic interests in China it is considered that they should be held in reserve for as long as the Communists are prepared to tolerate the functioning of British concerns’.33 Studying Moscow’s press and the secret documents of the CCP found by MI5 in Hong Kong and reading all available reports from the embassy and the consulates in China, Burgess deemed the CCP an efficient organisation and quoted Consul Franklin, who wrote, ‘shortage of technical personnel has never been an insuperable obstacle to minority rule when that minority is fanatical.’ Burgess wrote about historian Thomas Babington Macaulay, 1st Baron Macaulay: ‘As Macaulay pointed out in analyzing the success of the covenanting minority in Scotland – 30 Christian martyrs under Diocletian could do more than 300 senators, none of whom believed in Jupiter. Technicians are apt to sell their services and Mr Franklin describes their rapid recruitment by the communist minority – and how commissars watch them, while also learning their job’. Franklin had reported that the CCP encountered no mass problems in administering Tietsin – something which could be attributed as ‘the result of careful and prolonged deliberation by a top level policy making committee.’34 Burgess lectured at a Foreign Office seminar on China, in Oxford, in summer 1949. Earlier, in spring 1949, Burgess gave presentations to SIS

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and MI5 officers about China. A then MI5 recruit who had attended remarked: ‘I heard him talk about China. Burgess was clearly a clever boy.’ Burgess would remain in his post, having access to JIC intelligence, reporting to the NKVD on the beginning of the war in Korea.35 The Joint Intelligence Committee (JIC) concluded that Mao would not invade Hong Kong. In June 1949, the British obtained intelligence that exposed the CCP’s long-term economic plans in South China. The plans envisaged the continuation of the colonial administration at Hong Kong. Other indicators helped to relieve the tension for the British. In Hong Kong, MI5 and Special Branch, despite their investigations, had not found any clue that the communists were preparing a revolt, as Mao’s forces advanced to the south. Besides, communist ‘intra-party’ propaganda did not call for a takeover of Hong Kong.36 By late 1949, the Joint Planning Staff and JIC still did not present any evidence for or fear of an imminent Chinese communist attack on Hong Kong.37 The Foreign Office remained unworried about Hong Kong, where no local communist party operated; it was deemed that a CCP-led government would not threaten the colony. Besides the CCP would not turn against the Hong Kong government because ‘They would thus provoke their own suppression and forfeit the important advantage of being able to use the Colony as a Communist liaison and communications centre for the whole of Far East.’38 It was a sound estimate. In early 1949, Dick Ellis of SIS sent a report from Hong Kong, arguing that the only option for producing acceptable intelligence was to cooperate with the KMT. He complained that the 1945 ‘set-up’ of the SIS in China was at that time considered a ‘long range project with no early demands on its productivity anticipated. Since then, events and fact-hungry departments have forced us to shorten range and speed up pace.’ The current results were deemed ‘far too meagre’.39 Back in late 1948, the station head in Nanking passed on an offer by the KMT for the SIS to pay £3,000 sterling per month in return for the Zhongtong sharing all sources and being tasked with specific assignments entailing human sources and signals intelligence. The offer also encompassed stay-behind schemes, breaking the CCP codes and infiltration in Soviet territories.40 Ellis admitted that the cost of subscribing to the intelligence organisation was high, but something was needed if London was not to remain blind to developments. He argued in favour of making economies in other parts of the SIS

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budget to finance the collaboration – he suggested shrinking the number of SIS stations in China. The headquarters accepted his recommendations, and the first payments for ‘Operation Salvage’ were made, resulting in many military intelligence reports judged by the War Office to be of very good quality. In May 1949, Ellis wrote that ‘several reports have received “A”’.41 By late spring 1949 Ambassador Stevenson outlined his thoughts on reporting from communist-held territories without the CCP’s permission. He wrote to the Foreign Office: ‘It is worthwhile attempting to operate wireless set at Canton even after Communist occupation in which case W/T [wireless telegraphy] operator and presumably also cipher assistant should remain with the Consul General nominally as part of his staff . . . Even in the more likely event of the Communists rejecting de facto recognition and refusing to receive a diplomatic legate or in the event of no agreement being reached between the interested powers, I consider that it would be highly advantageous to keep Mr Hutchinson (the Consul General) in Communist controlled territory. This might perhaps be done by changing his status temporarily to that of Trade Commissioner with residence wherever proves to be most suitable and by making no (repeat no) public announcement. The agreement of Communists to such an expedient [placement] need not necessarily be sought and in view of their own increasing economic problems, it might suit them to acquiesce . . . [the withdrawal of service attache´s] would therefore logically follow withdrawal of accredited head of diplomatic mission. This would however remove from the scene expert reporters of Chinese Communist military intelligence at a moment when such information may be particularly valuable. If a diplomatic agent were appointed [the] position might not be so anomalous but failing that, it is difficult to devise an appropriate alternative designation which would allow them to continue their work without challenge and without risk of communists demanding some form of reciprocity from us. In view of unusual extent to which anomalous situations are apt to persist unquestioned in China, solution might be found in leaving the minimum number of present assistant attache´s at Nanking or Shanghai as an experiment without attempting to change their ostensible designation, being at the same time prepared to recall them at any time should their presence be questioned by Communist authorities or prove to be an embarrassment to us.’42

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The Zhongtong continued working for their own ends; in September 1949, the police in Hong Kong arrested some of its agents working under ‘Salvage’ but also conducting subversion and espionage against communist targets. The Hong Kong authorities confronted the embarrassed SIS officers, who knew nothing of the matter.43 Back in London in August 1949, R.1 (the SIS’s Political Requirements Section) complained: ‘The information supplied so far by Salvage on important and strategic issues has been quite unreliable and looks rather as it if is bogus.’44 It was pointed out that no details of secret sources were offered by the Chinese nationalists, while similar analysis of events appeared in the Hong Kong press. A panicky warning from secret French sources (which had presumably approached SIS), quoted by the High Commissioner in Singapore, claimed, ‘Communists are preparing a wide anti-British campaign which will start in China after the formation of the new Government in Peking (Beijing). It will be made to appear as a “popular” campaign not inspired by the Government so that diplomatic relations shall not be affected. Demonstrations will take place in every town until [the] British satisfy the Communists’ claims. The Communists believe that British will come to agreement because of their investments in China.’45 Nonetheless, the report was discounted by the Foreign Office. Burgess was confident: ‘I doubt the information within – that however is a personal view. That it is wise to examine with caution any information received from the Far East is, however, a more general view, with which I think S.E.A.D [the South East Asia Department] w[ou]ld agree. They seem to buy, or to be sold, as information what is often only K.M.T. propaganda. In any case the meaning of the phrase “until British satisfy Communists claims” is both vital to the sense of the message & elusive to the mind. There are not as far as I know any Communist claims on us. The sentence may however refer to future claims.’46 P.D. Coates, a colleague of Burgess’s, found the report ‘totally valueless. It may be true or it may be false, but that gets us nowhere.’47 It looked as if the warning was an attempt to avert any blaming of British intelligence by Whitehall in the event of new riots; the SIS had provided no advance intelligence of the coming troubles in Kowloon and Baghdad – about which Sargent had chided Menzies earlier. Fitzgerald, formerly in the British Council, transferred a message of Chou Enlai, which was handed first to Keon, an Australian

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correspondent who, since 1947, had been allowed to visit CCP-help territories. According to the secret message of Chou, the CCP was divided between pro-Moscow cadre under Li Lisan (but the most influential leaders were Central Committee members Li Shao Chi and Peng Teh Huai) and the cadre under Chou Enlai. The first group believed strongly that a third world war was inevitable, and that China would be an ally of Moscow. According to the message of Chou, Mao remained above the policy debate, but Chou’s group was seeking for the normalisation of relation with the British government ‘to see further than’ the anti-West communist propaganda.48 On 15 July 1949 Chou met with Keon, confirming the message to be conveyed to the British. He added that the contending groups had been confronting another issue. The Russians had asked for mining concessions in north of Chiamussu, in Manchuria and Xinjiang. Li Piao did not want to concede anything, blaming the Soviets of imperialism. For the time being he had under his command a large PLA force in Manchuria.49 During the same period the CIA reported (falsely) of rumours of the death of Mao. Though Burgess did not know about Mao’s health, he discounted the possibility of serious rift among the CCP, informing his department that the story of rift published by The Times could not be believed. Nonetheless, as Burgess noted the same story appeared in a report of the US assistant military attache´, who informed the State Department, and then Washington informed the US Ambassador Leighton Stuart. Burgess criticised the ‘pedigree’ of the story, the report of the assistant military attache´ who went to ask Chou Enlai if ‘this story meant that the United States troops could land on Chinese soil to fight Russia.’50 Burgess was absolutely sure that Chou Enlai sought via, The Times and the assistant military attache´, to play a game. The mole of Moscow in the Foreign Office argued: ‘The fairly extensive diffusion of this (about the divide in the CCP) top secret information by Chou and his choice of journalistic channels makes the thought of a plant very obvious indeed. The trick “I and my friends are moderates and if you collaborate with us we shall keep the extremists out to our mutual advantage” was much used by the Japanese as well as the Nazis to get concessions even when a hostile policy had in fact been decided on.’ In his memo, Burgess noted the information received about the latest news of the discovery of uranium north of Chiamussu. Nonetheless the Sino-Soviet trade pact, signed on 30 July, did not refer to mining concessions.51

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Burgess had access to CIA material. In late June he was handed over a CIA estimate titled ‘Prospects for Soviet control of a Communist China’. He commented on ‘an extremely good paper by the Americans and have little to challenge or add.’ Though ‘much of that it is in the form of speculation rather than an analysis in the form of established fact. This of course is its intention and all one can say about.’52 No doubt he leaked to Kremlin the Americans’ views. It was noted: ‘The Soviet Union and those communists whose loyalty to the Kremlin is unquestioned are well aware of the danger of cleavages in the Party leadership and will endeavor to prevent the development of any movement which might jeopardize the Soviet effort to establish control over China. A tested tactic employed by the USSR in maintaining control over local parties is the establishment of a system of checks and balances within the party leadership through pitting one personality against another. Although it has been claimed that the relationship between Mao Tse-tung and Li Li-san might lend itself to such a technique, at present evidence is lacking either that Li’s standing in the Party, or his actual power in Manchuria, is sufficient to be an effective check on Mao. It is likely that the principle of checks and balances is operating within the CCP, but its application to specific figures is unknown.’53 For the CIA, the anti-Soviet leaders within the CCP ‘must wrest the control apparatus (i.e. party organisation, secret police, army) from the pro-Moscow leadership, or that leadership itself must change its policy toward Moscow. Until evidence is available that an effective opposition is developing, it follows that the Chinese communists will remain allies of Moscow.’54 No doubt the Americans, as well as the British and the Soviet intelligence, had not reached an accurate estimate: Mao was the key, all powerful figure within the CCP after the pro-Moscow Wang Ming purge. The chairman of the CCP was developing a cult which inevitably would lead to the clash with Moscow.55 By late summer 1949, 40,000 British troops were stationed in Hong Kong for the event of defending the colony against the advance of the victorious PLA. Stalin urged Mao to take over Hong Kong, warning of strategic disadvantages if left under British rule. In the Sino-Soviet correspondence of September– December 1949, Moscow claimed that the British forces could not offer meaningful resistance and that the United States would not support London in the event of war. In his 26 September 1949 report, M. Safronov, of the Soviet embassy in Beijing, argued that Britain needed to retain Hong Kong so as to

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‘place for the expansion of British imperialism in South China. Britain hoped to use the defeat of Japan and its position in Hong Kong to take a preeminent economic position in East Asia.’ He warned that the United States ‘would use Hong Kong as a naval base and a base for intelligence activities against China.’ Thus the Chinese should not be afraid and oust the British: ideology and pragmatism to counter any future threat demanded it. Mao and his lieutenants were not willing to go to war for Hong Kong and repeatedly rejected the Soviet advice to go to war. For them, ‘the liberation of Hong Kong militarily was not a problem. However, military liberation would not be profitable because of the international situation.’ Moscow understood that a British Hong Kong held advantages for the Chinese: ‘it was a now blooming trading port and a place where it was easy to buy and sell hard currency’, as Safronov wrote in his dispatch of 26 September 1949.56 Burgess dismissed the report of a ‘wide anti-British campaign’ with demonstrations in China having the backing of the communist government. He criticised the High Commission in Singapore: ‘they seem to buy, or to be sold, as information what is often only KMT propaganda.’57 By mid September, Burgess, having received alarming military reports, voiced his anxiety that the pause of the PLA attacks in South China meant that the communists were consolidating their forces and preparing to invade Taiwan. Additionally, he assessed that the fact that the Soviet diplomatic representatives stayed in Canton, along with ‘other evidence’, led to the conclusion that the Soviets would recognise the new government of China under Mao once it was set up – though he could not predict when.58 Burgess criticised the State Department for its ‘muddled thinking’ in isolating Mao, while he was sure of the ‘correctness’ of the evolving British policy of staying in contact with the communist regime. It was estimated that for the next 15 years the regime would be flexible in economic development, allowing relations with the West, and especially Britain.59 On 1 October 1949, Mao proclaimed the establishment of the People’s Republic of China. The SIS reported of military activity in communist-occupied Canton – but the wireless network had been broken by the communist advance. Only the War Office wanted ‘Operation Salvage’ to continue, deeming it ‘of great value’.60 In November 1949, the chief SIS controller for the Pacific region, stationed in Singapore, was warned that the Foreign Office was

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considering recognising the People’s Republic of China, and that the SIS station in Formosa (Taiwan) would therefore have to be closed down; it had been set up specifically for ‘Salvage’. Overestimating the PLA’s capabilities, headquarters feared that Taiwan would also be taken over by the communists, and asked the SIS station head there to prepare a staybehind network. The instructions read: ‘[We are informing you to] enable you to handle Salvage sources in such a way as to ensure their continued support even on Formosa affairs . . . Good luck.’61 The return of HMS Amethyst to Britain, which was attacked together with other British frigates in the Yangtze, back in April 1949, agitated the Foreign Office and Burgess himself, who showed no sentimentalism though he had graduated from the Royal Naval College. Burgess wanted the government to intervene with the BBC: ‘The BBC (whom I don’t think are to blame) seem to be going to fall over backwards in the coming weeks to give the Chinese Communists prestige reasons for complaint. Given [the fear for communist attack on] Hong Kong, these weeks are not well chosen. We have constantly asked the Admiralty to be more silent about their Service and its feats of navigation, but on top of the now irreversible appearance of Amethyst’s unfortunate crew in a Lord Mayor’s show, it now appears that they will be on the air, constantly. The BBC are responsible people and cannot have achieved these regrettable arrangements without official support. Of the possible recommendations a letter at the highest level possible would seem to me the best. The BBC can always cancel programmes under the plea of a technical hitch. It must be remembered that the Corporation is universally held abroad to be even more official than The Times is wrongly supposed to be. The difference is, we can stop the BBC.’62 On 28 October, the Admiralty was informed by the Foreign Office: now that the Amethyst is nearing home, and the volume of publicity both in the press and on the radio seems to be reaching a new climax, we are very anxious that nothing should be said which might unnecessarily complicate the present difficult situation in China. We are particularly anxious to ensure that criticisms of the behavior of the Communists towards the “Amethyst” outrageous (though it undoubtedly was) are not allowed to become a part of the publicity programme. It could, I imagine, easily be explained to the ship’s company that any criticism of the Communists in the

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press or on the radio would be likely to reach unfavourably on their fellow countrymen still remaining in China. You may perhaps think it worthwhile taking steps to ensure that the ship’s company are briefed on these lines.63 The Burgess-Maclean case, which at that time was not connected to their mutual friend Kim Philby, who had not disappeared yet (but had left the SIS), haunted successive Conservative governments. In December 1957, the Attorney-General Sir Reginald Manningham-Buller, advised the cabinet of Harold MacMillan that ‘the available evidence [against Burgess] was insufficient to support a charge under Section I of the Official Secrets Act (1911) and that, in the circumstances of this case, he would not consider giving his consent to a minor charge under Section II.’ Thus, ‘If Burgess returned to the United Kingdom, and was not prosecuted, Her Majesty’s Government might be considerably embarrassed, particularly as (a) the general tenor of the Report Concerning the Disappearance of Burgess and Maclean (issued as a White Paper, September 1955) was that both men were spies, and (b) this general impression was confirmed by Ministerial statements in the House of Commons debate on 7th November, 1955’.64 In 1959, Harold Macmillan visited Moscow, and his delegation was surprised on learning that Burgess had passed the message that he wanted to return to Britain. The Minister of State sounded pessimistic: ‘We cannot hope to obtain legal proof that Burgess has committed any treasonable act while in the Soviet Union or any seditious act here. Evidence does exist that he has committed technical breaches of Section II of the Official Secrets Acts, in so far as he has improperly retained official classified documents in his possession. But these documents are of little significance and the Attorney-General would not be willing to proceed on such a minor charge. It will therefore be impossible to dissuade Burgess from trying to return to this country by confronting him with evidence on which he might be prosecuted. Indeed if he knew how little evidence we had, he would be more likely to be encouraged than deterred. This applies also to a possible prosecution for homosexuality . . . The Security Service have endeavoured to convey to him hints to the effect that the dangers of prosecution are real and the evidence stronger than he may think and they propose to continue this process.’65 Burgess did not return to Britain; he died in 1963.

CHAPTER 24 SPIES' WARNINGS

‘Gradually, I began doing little favours for the Communists. As a GI, I could move easily around the city, free from the scrutiny of soldiers and police. Several times I helped underground workers escape. Once I drove an old man to the edge of town. Another time it was a young teacher who had been heavily involved in the student movement. He was being hunted everywhere; all entrances and exits to the city were being watched and all cars were being searched. The soldiers however, wouldn’t dare search an American military vehicle. At the appointed hour, a very pleasant looking young man, maybe about twenty-five or twenty-six years old and dressed in a long student’s gown, climbed into my jeep just as Li (the communist secret contact) had instructed, I drove him out of town, along the road that led past our barracks and down to a school set back from the road where he was received by a man named Wu. I returned to the barracks feeling quite pleased with myself.’1 Sidney Rittenberg was a young soldier in China, an interpreter keen to learn about Chinese culture. He had attended college, but in 1942, aged 19, he joined the army. In 1945 he was sent to China and was assigned to the judge advocate’s office in Kunming, investigating claims for damages against the US Army. Rittenberg and four others would drive their jeeps, find plaintiffs, interview them and submit their claims.2 His contacts with ordinary Chinese opened the way to meet communists, and eventually he decided to volunteer as a secret operative. He sought to go to Yenan to meet with Mao. When he was transferred to Shanghai, Rittenberg immersed himself further in the communist underground. He carried secret letters of recommendation. He narrated:

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‘as soon as I could, I set out to deliver Li Guohua’s letters of introduction to the Shanghai Communists. The characters I had so painfully deciphered instructed me to seek out a man who would direct me to another man. He, in turn, would direct me to the third, to whom I would deliver the principal letter. My first contact worked at the Lian Wan Bao, a Chinese language paper backed by US Information Service. My introduction simply said he worked there, but I didn’t know whether he was an office boy, a janitor, or what. It turned out he was the editor, dressed in very proper Western attire, and obviously a big shot. But behind the cover of a US government job, he was secretly a Communist. He shshhed me quickly when I showed him the little envelope with the note in it, and led me out onto the staircase. “You can find your contact at this address,” he said, scrawling something on a piece of paper.’ Eventually, Rittenberg found Jiang Zhenzhong, a ‘typical Shanghai playboy’, ‘a fat merchant’ who would lead him to Xu Maijin, the final contact. ‘Xu kept me supplied with the New China News Agency broadcasts from Yanan [Yenan], and briefed me on the Communist views of events. The union demonstrations, for example, I learned were all organised by the party, using the company unions as a shell . . . Xu told me a bit about how the underground worked. It was an organisation unto itself, kept completely separate from the rest of the Communist organisation. Xu told me that an underground worker who discovered that he or she was being watched by the KMT was supposed to disappear the very day the surveillance was discovered.’ Through his secret contacts with the CCP, Rittenberg learned that in autumn 1945 there was an attempt against Chou Enlai while in Chungking. Li Xiaoshi, a member of the negotiating team was killed: his car was attacked by machine gun fire – the assassins assumed he was Chou Enlai.3 In Shanghai, Rittenberg was introduced to Madame Sun-Yatsen and secured from her a letter recommending him for work with the United Nations Relief and Rehabilitation Administration (UNRRA) once he was discharged. Eventually, Rittenberg became an UNRRA observer who accompanied food supplies to the populations and oversaw their distribution by the CCP and KMT. He soon witnessed the mass famine and corruption observed in the KMT-held areas and the smooth distribution of food supplied done by the communists in their own areas. His reports were not liked by his superiors, who had asked him to gather

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intelligence in the areas he was visiting – they wanted evidence of a CCP-Soviet defence agreement. While he was a secret communist supporter he was asked to spy for the UNRRA and the Americans.4 Rittenberg carried with him a secret letter for General Wang Zhen, in Hankou, authored by Xu, confirming that he was a friend of the CCP. While General Marshall was trying to mediate, in Wuhan a special truce delegation met in the Fresh Flower Village. General Henry Byroade represented Marshall. The KMT was represented by General Wang Tianming and the CCP by Chou Enlai – then the vice chairman of the CCP Military Commission. Rittenberg met Byroade and introduced himself as an UNRRA observer. He asked him ‘what was about to happen’; should he leave the relief supplies, bring more or withdraw? The general answer: ‘I can tell you what’s going to happen. These people [the isolated communist army] are going to be wiped out. I have just come back from Manchuria. The Reds outnumber the government forces ten to one up there. The government can’t win. But here the government has the upper hand and we’re going to let them wipe the Communists out.’5 Rittenberg entered the hall where the initial negotiations took place and heard Byroade speaking about the neutral US policy towards the belligerents. Upon the end of the meeting, Rittenberg left alone and met with General Li Xiannian, who accompanied Chou Enlai; the general introduced Rittenbeg to Chou Enlai as ‘our American friend, Li Dunbai’ – Chou ‘shook hands with a tight but unaffected grasp. Still gripping my hand, he said, “I saw you at the meeting. You applauded much more loudly when I spoke than when anyone else spoke. That is unwise they will notice your reactions, and it will not be easy for you to work when you go back to the KMT areas. You should be more prudent . . . it is our job to take care of our international friends.’6 The American offered to further aid the CCP and told General Li what he was told by Byroade. In the new round of the negotiations, a US colonel took over from Byroade, and he asked for the neutral UNRRA observer, Rittenberg, to translate for him. Thus, Rittenberg had full access in the consultations. Eventually the talks broke down, and Rittenberg returned with the UNRRA mission to Shanghai where he met again with Madame Sun Yat-sen, seeking a way to go to Yenan. He eventually reached Kalgan, joined the CCP and began writing for CCP broadcasts, before going to Yenan where, he met Mao. The communist leadership, acknowledging his secret aid to their cause,

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allowed him to continue in the propaganda department and, by eating together with the top cadre, to hear sensitive discussions.7 As the armies of Chiang Kai-shek were moving north, a key mole, Xiong Xiang-hui, operated within the KMT’s top echelons. He had served in the staff of General Hu Zongnan for ten years. In early 1947, Chiang Kai-shek sought to capture Yenan. Xiong was informed of the attack plan by General Hu, who ordered him to prepare plans with the rest of the staff. In a matter of days Mao had received warning. General Chu Teh argued that the strategic retreat from Yenan would create the conditions for final victory. Rittenberg witnessed the atmosphere on the eve of the withdrawal from Yenan in March 1947: ‘as confident as Zhu De [Chu Teh] sounded however, the senior leaders were clearly anxious. As the weeks dragged on, the atmosphere became progressively more tense, and under the pressure of constant round the clock meetings, the leaders begun looking more and more strained . . . [one day as I was in a house near the military headquarters] Mao Zedong appeared in the doorway, skipped polite introductions and simply strode right into the room. Rearranging two chairs, he slouched back in one and slung his feet out over the other. “I’m tired,” he said. “I’ve had a whole morning of meetings and I’ve just come over to relax for a while.’” Rittenberg described him: ‘his mouth dropped and he heaved a big sigh. He fished in his pocket for a packet of the strong local cigarettes he favoured. Then he pulled off his jacket, a brown woolen knit with a rounded collar. George [Hatem, a medical doctor] poured him some tea. Mao slurped it and lit a cigarette, chain-smoking them one after the other, lighting the next one from the last’. Hatem asked him how he was feeling; the answer was surprising: ‘Very badly. Ever since I’ve come back from Chongqing [Chungking] I’ve felt very tense. I just can’t relax’.8 The chairman of the CCP remarked that Xiong’s secret intelligence was ‘worth several divisions’. General Hu took over a deserted town, and failed to destroy the main CCP forces, which escaped promptly. Xiong later left for studies in the United States, under the auspices of the nationalist regime. He returned to China in 1949 and, as a diplomat, worked closely with Chou Enlai. He served as Charge´ d’Affaires in London in 1962, and after the 1969 Sino-Russian border conflict Xiong (still trusted by Mao) was among the key officials to support the opening to the United States that culminated in the Kissinger and Nixon visits in 1971 and 1972. During the talks with

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Kissinger, Xiong was Chou’s assistant.9 Two other top spies were Liu Fei and Kuo Ju-kui, who, while working at Chiang’s headquarters, sabotaged the planning and execution of the Huai-Hai campaign north of Nanking in November 1948 – January 1949. Later, on Liu’s recommendation, Kuo was transferred to Sichuan, where eventually the KMT army surrendered to the PLA.10 Another top mole was Chen Lian, the daughter of Chen Bu-lei, Chiang’s principal secretary.11 Xiong Xiang-hui’s role remained undisclosed to British intelligence. Nonetheless, intelligence reports on General Huang Chi-hsiang, the head of the KMT’s military mission in the German capital, had reached the British Element of the Control Commission in Berlin: ‘it has been suggested that he is, if not a present member, at any rate an exCommunist and that he has frequent contact with the Russians in Berlin’. The British asked their Embassy in Nanking for further information in mid-September 1948.12 Their suspicions and intelligence were correct – in 1949 he defected to the CCP. On 1 March 1947, before the sacking of Yenan, while observing the battles, Major Robert Rigg and Captain John Collins, the US military attache´s of the embassy, were arrested by a PLA patrol about 21 km northeast of Changchun. The communists accused them of being on a reconnaissance mission for KMT forces. On 11 March, General Chu Teh reassured the US liaison mission in Yenan (the Dixie mission) that they would be released. Collins suffered from frozen feet. They were taken to Harbin, where they were kept isolated from each other for a month (6 March – 6 April). Without being informed, they were put on trial for espionage for the KMT. Li Lisan led the military tribunal ‘in acceptable manner’. Nonetheless, General Wang ‘used rough tactics, employing verbal abuse, and on several occasions both officers were threatened with torture . . . [the] entire period of capture [was] characterized by [a] hostile attitude on part of guards who, on many occasions, threaten[ed] them with bayonets. They also received rough treatment from political commissars attached to military units with which they came in contact.’ On 9 April their solitary confinement ended, and they were invited for lunch by Li Lisan, who told them that he ‘had evidence against them.’13 On 24 April, at 12 pm, both officers were escorted to a location near Hungfangtze. Personnel from the US consulate in Changchun with white flags – as arranged – picked up the officers.14

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The nationalist staff headquarters were infiltrated by CCP spies as well as by willing defectors to the communist cause. In 1943 the CCP Southern Bureau successfully had Li Qiang assigned to the KMT’s Sichuan Provincial Special Commission, the main nationalist intelligence and espionage organisation in Sichuan, and the Chengdu Branch of the Zhongtong. Li Qiang was both secretary for the Chengdu Branch of the Zhongtong and senior secretary of the Sichuan Provincial Special Commission. Later he was the deputy commander of the Nationalist Forty-Fifth Army Corps. Only Chou Enlai and Dong Biwu (of the Central Committee’s Social Affairs Department – the headquarters of the CCP intelligence and security services) knew that Li was a mole.15 The Social Affairs Department had spies in the headquarters of the KMT’s Suppression Forces in the Northeast, including the Departments of Combat, Staff and Logistics. In addition, Zhao Wei, the chief of staff of all majors in the Staff Division of the nationalist Northeast Security Headquarters, who was also in charge of its Confidential Office, was himself a mole. In early 1948, the SAD and ID focused on convincing officers of the KMT to defect, in a bid to speed up the collapse of the regime.16 Chou Enlai, as acting general chief of staff of the Central Military Commission from August 1947, oversaw the intelligence operations in both the party and the PLA. In autumn 1947, the Wang Shijian Intelligence Group was discovered and neutralised by the KMT security. Chou Enlai paid attention in the salvaging of the agents’ networks, ordering Li Kenong to assess the damage done, ordering Yang Shangkun and Li Weihan (he was in Nanking) to break off communication with the captured group and offer a spy exchange with the KMT.17 By the summer of 1948, Mao was ready to launch his all-out conventional attack. He had turned his guerrillas into a vast tactical army capable of successful large-scale operations.18 The spirit and habits of ‘guerrilla-ism’ were blamed for inadequate preparation and concentration of forces, wrong tactics, logistics, intelligence and staff work which led to early defeats. The commanders were urged to read the biography of Russian General Mikhail Kutuzov, who confronted Napoleon with a strategic retreat.19 As Mao himself had admitted, the guerrillas ‘are themselves incapable of providing a solution to the struggle.’ Thus they had to ‘gradually develop into orthodox forces.’20

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In March 1947, Stalin saw the KMT’s sack of Yenan as a strategic failure on Mao’s part, and the PLA as lacking the military capability to achieve victory; thus negotiation and a truce were expedient. On 1 July 1947, he wrote to Mao about his general assessment, but essentially failed to influence the Chinese communist leader.21 By the autumn, Stalin had provided free aid to the CCP in Manchuria, in the modest form of basic material such as blankets, boots, ammunition and helmets, and boosted arrangements for barter trade. Mao, expecting more, was disappointed, though not openly – by declaring to his cadres that the Soviet Union was interested in the CCP’s struggle, he could garner further mass support. He sought to visit Stalin, but the latter recommended that he stay with his troops (in fact, Stalin feared US reactions to any such meeting).22 George Kennan, the director of Policy Planning at the State Department, a legend for Cold War strategy and an influential adviser of the now Secretary of State Marshall, wrote in his diary on 27 January 1948: ‘the dilemma is this. We all know that this aid [for Chiang Kaishek] cannot materially affect the course of events in China. We are obliged to put the bill before Congress by virtue of our past commitments and of the pressures that exist in favour of aid to China. If, in presenting it, we tell the truth, which is that the Nanking Government is doomed by its own inadequacy and that its power is destined to disintegrate regardless of our aid, we demolish at one blow its remaining prestige in China, hasten enormously the process of disintegration, and lay ourselves open to the charge of having treacherously undermined Chiang’s prestige and killed his government by our own action. If, on the other hand, we hold out any hope to Congress that the bill can accomplish positive from the standpoint of US foreign policy, we will only be faced a few months hence with incontrovertible evidence that this objective had not been achieved and with renewed reproaches for having urged Congress into another “operation rathole”’.23 Throughout 1948, the State Department sought to reduce US legation staff in China. In their turn, the Joint Chiefs of Staff did not want US forces to intervene there, but to maintain bases in Taiwan. The top brass worried that the stationing of US marines in Shandong and other areas could drag them into the civil war. They took into serious consideration incidents of small-scale clashes between US marines and PLA units; gradually, however, the marines would withdraw, and would leave China altogether by mid-1949.24

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By midsummer 1948 the CIA held that it ‘is unlikely that [the CCP] would attempt to follow a line of action which the USSR opposed strongly’. Beyond barter trade and the Japanese arms handed over to the CCP in 1945, in Manchuria, ‘there is a lack of evidence that the Chinese Communists have been assisted by material Soviet aid’. Naturally, the China Aid Bill, passed by Congress, increased the amount of antiAmerican, communist propaganda, but the CIA estimate was accurate: ‘It is unlikely, however, that the USSR would ever dominate China through the medium of the Chinese Communist Party, as it is able to dominate Eastern European countries through indigenous Communist groups, because of the vast size of China, and its disorganization, strong regional tendencies, and the Chinese proclivity for anti-foreignism.’25 In August 1948 Mao’s troops began shelling Mukden nightly. By October the situation had deteriorated. The CIA stations in Mukden and Antung had to evacuate. The urgent request was cabled by Singlaub, on 9 October 1948.26 The nationalist regime began to collapse because of a combination of defeats in battle, corruption and hyperinflation. The Soviet Ambassador had made ‘some overtures concerning a peace settlement’ to certain KMT government officials. ‘Given an opportune moment the USSR would undoubtedly extend its good officers and attempt to exploit the dual advantages of a peacefully communized China, and the propaganda value accruing from apparent advocacy of world peace.’27 The agency examined the dynamics of Sino-CCP relations in the medium term, concluding that ‘the greater the success of the Chinese Communists, the greater will be the Kremlin’s disposition to assure Soviet control, and the greater will be the difficulty of reconciling Soviet interference with China’s national interests.’28 The intelligence officers were ordered to leave cities occupied by the communists, but diplomats remained behind for basic intelligence gathering. George Kennan hinted at Acheson, the Secretary of State, that he wanted US consuls to stay in CCP-held areas. In Mukden, Angus Ward and his staff of the consulate were arrested, accused of espionage (and only released in December 1949). The State Department had approached 30 countries, asking them if they held missions in Manchuria and could facilitate the communication and release of the diplomats. Kennan wrote in his diary, on 21 November 1949: ‘To my mind, this is a good example of how we should not behave. The Chinese Communists are under no obligation to us. It is our own fault that we

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left our Consul there when the place was taken by the Communists. This is a straight bilateral issue between ourselves and them. If we were prepared to behave like a great power, we would treat it as a bilateral issue and not make ourselves ridiculous by asking a lot of weaker powers to assist us in solving it. I am constantly amazed at the manifestations of the stubborn belief on the part of some of my colleagues that we are wicked if we act alone, on our own responsibility, but are moral and praiseworthy if we place ourselves timorously in the company of a lot of others and pretend that we are just one of the crowd.’29 In early December 1948, the CIA estimated that the KMT was doomed to defeat ‘within a few months’, and that Washington could do nothing to save it. Indeed, the successful Liao Shen and Huai Hai campaigns from September 1948 to January 1949 had crippled the capabilities and manpower of the nationalist forces. In epic battles involving more than 1.8 million soldiers and a 200 km front line, Chiang’s troops stood no chance against the communist commanders and the endurance of their troops. Right from the start of the Liao Shen campaign, Mao had good intelligence from one secret source in the nationalist Ministry of Defence; he thus warned one of his Generals, Lin Jinzhou, that Chiang had drafted a plan for a landing at Yingkou, and afterward to advance to Shenyang. He ordered his general to ‘prepare to attack those withdrawing [nationalist] troops after you seize Jinzhou, and stop them transferring to Central China.’30 In the espionage front, communist spies uncovered a natioanist spy-ring in Harbin and arranged for false intelligence to be transmitted to Nanking; among the deceptive intelligence was that two PLA units moved towards Shanhaiguan - it was a successful ploy to divert nationalist troops.31 The nationalist force under the overall command of Wei Lihuang was destroyed in Heishan. His field commander was Liao Yaoxiang. His opponent, Lin Biao benefited from the intercepts of the radio communications of the nationalists; Communist military intelligence staff spoke Cantonese and easily followed radio and telephone communications of Liao’s staff officers. The nationalist field commander decided for retreat; he had no warning from his reconnaissance units and soon was cut off by the communist advance. Chiang Kai-shek was shocked by the defeat of Liao Yaoxiang. Staff officers later revealed that the generalissimo showed ‘signs of the terrific strain upon him in increased irritability.’ Chiang ordered air squadrons to provide reconnaissance for

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Liao’s forces. Initially the pilots reported that he faced no threat. Nonetheless a couple of days later it was made clear that his units were destroyed. The angry Chiang conceded: ‘This is the greated defeat and the greatest shame of my life’.32 The remaining nationalist commanders in the Northeast China had to make a decision about their survival. The CCP underground agents in Changchun made secret contact with General Ceng Zesheng, the local KMT commander. As he was informed of the defeat of the KMT troops in Jinzhou, the panicked Ceng agreed to talk to communist political officers who entered the city in secret. Eventually, he offered his defection to the CCP together with most of his officers. In return, Mao sent personal orders to reinstate Ceng in the ranks of the PLA. The defectors and their forces bombarded the remaining loyal KMT forces with artillery on 21 October. Some of Wei Lihiuang’s troops escaped through to Yingkou. Wei himself was arrested by KMT secret police and jailed. The fall of Northeast China meant that 400,000 able KMT troops were either dead, wounded or captured.33 General Wu Huawen opted to defect to the CCP before the battle began in Jinan, the provincial capital of Shandong. His more than 50,000 troops joined their leader. They all were troops who had fought alongside the Japanese. Nonetheless, Mao keenly accepted them into the ranks of the PLA. He aimed for the fast reinforcement of the armies of his Generals Su Yu and Chen Yi. The chairman of the CCP was clear: ‘the training of war prisoners must be well organised. In principle, no prisoner will be let go. Most of them will be filled into our troops and some will participate in the production in the rear front. The human resources for our troops to defeat Jiang [Chiang] mainly come from prisoners; this must be brought home to the whole party.’34 Mao informed Stalin that many KMT commanders were in communication with the CCP, ‘including, and in particular, the intelligence operatives, [who] are looking for contact with us’. Mao informed Andrei Orlov (aka Terebin), the GRU liaison officer, who acted as a representative of Stalin: ‘[KMT General] Bai Chongxi was asking our people – what will be the orders of the CCP, I will carry them out now and with precision. He was given an oral hint to keep his forces in the area of Hankou and not to obstruct our future offensive. The commander of the 8th AG [Army Group] [KMT General] Liu Ruming was also told, orally, to stay in the place where the Guomindang ordered

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you, and to allow our forces to pass during the offensive. [KMT General] Tan Enbo is looking for contact with us. [KMT General] Zhong Jie-min wants to establish contact with us . . . many noted intelligence operatives, especially after the publication of the list of war criminals, are trying to save their lives, [and] pass to us valuable information. The situation is such that if we now wanted to, and gave instructions, then there would be a massive uprising against the forces of Jiang Jieshi [Chiang Kai-shek] and their defection to our side. This is not profitable to us now. For in this case we would have too many forces of the KMT, and this is very worrisome. Especially that their commanders will want to occupy high positions, but they are not reliable.’35 In addition, Mao informed Moscow that US officials had attempted ‘to establish contact with us, not even speaking of the fact that many American correspondents (and the English ones) in Hong Kong and [those who] came to us from Peiping [Beijing] asked us to allow them to come to the liberated areas just to take a look – we refuse everyone. But recently [US Ambassador John Leighton] Stuart, before bringing into Shanghai amphibious boats with US forces, sent his man to Hong Kong to our people. This person, in words which could be understood as more than a hint, was in essence asking – will the CCP allow [them] to bring forces into Shanghai?’36

CHAPTER 25 STALIN'S FEARS

Hu Jibang, a cultivated and attractive woman, was the press attache´ of the Chinese embassy in Moscow under Ambassador Fu Bingchang, a veteran member of the KMT and secretary to the late Sun Yat-sen. On 17 November 1943 she did not hide her suspicions and anxieties, reporting a suspect incident. A Russian stranger calling himself Mr Barkov had invited her to a meeting. He told her he spoke Chinese; he said he was interested in Chinese affairs and had Chinese friends. Mr Barkov claimed that he had a good friend, Liu Renshou, who had supposedly spoken to him about her. She wrote to the ambassador that Liu was a good friend of hers at university, but that he would never have revealed that she was a friend of his to a foreigner. Liu had been interned in a prison camp for some years in China, but for the time being was living freely in Shanghai. The Russian claimed that he had seen Liu two years ago: an impossibility, according to Hu. In his conversation with Hu, the Russian sounded worried about the future of a China, which was not unified, and hinted at the need to boost the KMT-CCP alliance. When he read the report, Ambassador Fu concluded that Barkov must have been a Soviet agent ‘sounding out’ Moscow’s position, or, at the very least, an official of the Ministry of the Internal Affairs.1 By summer 1944, Fu reported to Chiang Kai-shek that the Soviet leadership had given him ‘informal indicators that they intended to support the Chinese against Japan and lay no claim to Chinese territory.’ The ambassador claimed to have evidence (i.e. secret intelligence) that Stalin was not interested in interfering in China’s internal affairs.2 In gathering of secret intelligence in the Soviet capital, key members of the

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embassy were General Guo, the military attache´, and Liu Ziyong, the Russian-speaking counsellor.3 The international diplomatic corps never stopped commending Fu’s negotiation style as well as his lavish receptions, where the press attache´, the elegant Hu, was noted for her attractiveness, finesse and self-confidence. The ambassador received information on Soviet operations, the press and leaders from Hu, who always sounded optimistic about the final victory of the Soviet Red Army, before the battle of Stalingrad. Indeed, until late 1943 she was allowed to reach and report from the frontline. According to Fu’s diaries, Hu Jibang flirted him, and they were lovers from mid 1944 until 1949.4 In spring 1949, a few weeks before the official end of his ambassadorial tenure, Fu made arrangements for his possessions to be transferred to France. He had concluded that the nationalist regime in China had no chances of surviving. The ambassador was surprised that his lover Hu Jibang would not follow him and go to Beijing. He then realised that since 1943 Hu had been a CCP mole in his embassy with access to all top-secret information. She had reported on the Russian stranger who approached her, ‘Barkov’, to gain his confidence. A few years later, Hu was the correspondent of China’s People’s Daily in Budapest during the 1956 anti-Soviet revolt. On 3 November 1956, three days after Russian tanks entered the capital, the People’s Daily hailed the Soviet intervention. In summer 1949, Fu and his family reached Sartrouville, a village outside Paris where they stayed until 1959, when he went to Taiwan. He was appointed minister in the legislative Yuan, and died in 1965.5 Back in Nanking, Chiang Kai-shek complained bitterly in his diary, on 1 January 1949: ‘reports of lost battles swirl in like falling snow’.6 The CIA sounded pessimistic about Chiang surviving, physically and politically: it expected his removal ‘by forced resignation or a coup d’e´tat, possibly including his assassination’. ‘Those persons who might employ coercion or participate in a coup to remove Chiang are believed to include many highly placed officials in the National Government.’ Among them was General Li Zogren, the vice president.7 As the PLA kept the pressure on the collapsing KMT forces, in Tietsin communist agents were in secret contact with staff officers of KMT General Fu Zuoyi. He had witnessed the defeat of the troops in the battles of Xinbao and Zhangjiakou. Since November 1948, the communist secret agents had discussed with his officers the terms of

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surrender. Some of his officers had turned secret agents for the communists, trying to influence their comrades. The NKVD intelligence officers in Tietsin helped their communist counterparts to recruit Fu Dongju, the daughter of Fu Zuoyi. Her fiance´ Zhou Fucheng was a longtime communist agent. Fu disclosed to the communists the thoughts of her worried father, who was in contact with the CCP, with the help of some intermediaries in Beijing. In late December 1948, the Beijing communist underground organised a secret workers’ inspection corps with the task of urging workers to protect the infrastructure from the KMT in case of a destroy order before the retreat. In Tietsin, where arsenal factories were located, a secret communist work community undertook this task. Mao himself had crazy fears: in a letter to Stalin he sounded worried, believing a report that the United States, after Li Zogren took over from Chiang Kai-shek, would support the nationalist regime with even atomic weapons and Japanese troops.8 The PLA attack on Tietsin commenced 14 January. General Chen Changjie’s troops retreated; they had no will to fight. The mayor of Tietsin surrendered the following afternoon. He was captured with his concubine in an underground apartment. His wife was a communist agent. Eventually, on 21 January, before dawn, General Fu Zuyoi was informed that Chiang Kai-shek would resign. General Fu Zuyoi signed the declaration renouncing his allegiance with the KMT and handed it to communist delegates, ensuring the peaceful liberation of Beijing. On 31 January, the PLA entered the city. The gigantic portrait of Chiang was replaced with the portrait of Mao.9 Soon the CCP proceeded to an invitation to Li Zogren, the now president of the Republic of China, for negotiations in Beijing. Nonetheless Mao would not wait for the negotiations to bear results. During the period he was receiving accurate intelligence from a spy in the US consulate in Tietsin on US plans.10 Mao’s victories had made Stalin wary of international developments after the 1948 Berlin crisis and of the possibility of an Anglo-American military intervention in China. By late January 1949, Mao was boasting that ‘the Chinese Revolution must be considered complete.’ The PLA’s forces were immense by any standard: 2.2 million fighters, 1.2 million of them deployed in the area of Nanking and 900,000 in that of BeijingTianjin. The KMT had 1.2 million scattered troops, and had already suffered large-scale military defeats.

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Li Bai was a key agent who transmitted information on the nationalist forces’ defences across the Yangtze. In 1930, he had joined the 1st Regiment of the Red Army and studied wireless technology at Red Army Telecommunication School at Ruijin. After the completion of his training he was assigned chief and political commissar of the radio station of the 5th Regiment and participated in the Long March. In 1938, Li Bai reached Shanghai; Qiu Huiying followed him pretending being his wife so that Li would avoid arousing suspicion by being a bachelor. Eventually, though, they fell in love. Together, they opened an electric appliances repair shop as a cover; but at night he transmitted intelligence to Yenan. In 1942 the Kempeitai raided his house; both were tortured, but eventually the Japanese concluded that they were not spies and released them. After the end of the Japanese occupation, he was approached and recruited by one of the KMT’s intelligence services, the Insitute of International Relations, for which he worked as a wireless operator, all the while still keeping Yenan informed. On 29 December 1948, he received intelligence on the nationalist forces’ defences across the Yangtze. But the following morning, when he was transmitting to Yenan, his radio was discovered by the KMT security services. Agents raided the house, arresting him. On 7 May 1949, Chiang Kai-shek signed the execution order of Li, who was shot. The messages of Li facilitated the PLA forces’ speedy deployment and successful crossing of the Yangtze in less than two months. Qiu Huiying survived the war and served later at the Shanghai Post and Telecommunications School.11 Meanwhile, Stalin – taking into consideration his antagonism with the West and the crisis he had caused with the blockade of Berlin (which was to last until May 1949) – in a telegram of 10 January 1949 attempted to convince Mao to remain in the northern territories, so that China would be divided into north and south, thus avoiding any US intervention. He had (wrongly) concluded that the dispatch of two US divisions could defeat the PLA. Surprisingly, contempt for the CCP’s military prowess still prevailed in Stalin’s thinking. In 1948, Ambassador Roshchin had drafted a mediation plan for the CCP and KMT to keep to the north and south banks of the Yangtze respectively, in effect dividing the country with the aim of ending hostilities. Moscow’s plan also entailed the US recognising the Soviets’ privileged rights over Manchuria.12

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Throughout 1948, intelligence received from China was alarming, pointing to a US intention to intervene. Already Novikov, the Soviet Ambassador in Washington had been dismissed, accused of compiling a false report on US military preparations. In China, Puhlov, an embassy official (probably a senior intelligence officer) studying newly-signed KMT-US agreements, concluded that Washington was waiting for the collapse of the Nationalist regime and had ‘prepared its armed forces for an invasion of China’. He claimed that US marines were already in the country and ‘had explicitly trained the Japanese landing forces in Taiwan . . . since the “general” financial and other material “aids” provided by the United States are not enough to save Jiang Jieshi [Chiang Kai-shek], the United States imperialists are planning to take military invasive actions in China.’13 Ambassador Roshchin argued that Washington would turn China into a military base against the Soviet Union, thus the US intervention to save the regime was inevitable.14 Stalin was basing his policy on erroneous intelligence, and tried to make Mao feel insecure. In early 1949 he explicitly informed him that the American communist writer Anne Louise Strong, according to ‘reliable information’, ‘has long served the Americans as a spy. We advise you not to allow her into your midst or into areas occupied by the CCP.’15 Strong was no spy; eventually she moved to China in 1958 and died there. Mao believed that Rittenberg was a spy associated with Strong and ordered his arrest. Meanwhile, the advancing PLA kept the US and British consulates under strong pressure, refusing to recognise their status, keeping their staff incommunicado and accusing key staffmembers of espionage. Most significantly, Mao had a spy in the US consulate in Tientsin, as he confided in late January 1949 to Anastas Mikoyan, Stalin’s representative.16 Mao planned to establish Beijing as the capital of the communist regime and, despite Stalin’s contrary arguments, insisted on deferring the formation of a coalition government. Unable to influence Mao – but certainly willing to obtain secret intelligence – Stalin took an interest in his personal security, dispatching two Soviet ‘specialists in dealing with time-delay bombs and bugging equipment’.17 Indeed these experts while liaising with their Chinese counetrparts could keep a close eye on the chairman. Mao, seeking to impress Stalin, boasted that the CCP was intercepting US signal communications, and had no wish to disrupt the flow of secret intelligence by banning radio communications of the US

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and British diplomatic missions completely. Mao admitted that the US diplomatic codes of the consulate in Tietsin were read by his intelligence services.18 He was overconfident that he held the advantage in his relations with Britain and the United States since ‘there is information that the USA is about to recognise us [government by the CCP], and England will necessarily follow them. For these countries recognising us is necessary to work against us and to trade with us. What is the benefit of this recognition? It will open for us the road to other countries and to the UN. In spite of this we are learning . . . not to hurry to establish diplomatic relations, but delaying them, to strengthen ourselves.’19 In fact Washington did not plan to recognise the communist regime in China – nor did Moscow. Chou Enlai received an unconvincing explanation by Ambassador Roshchin when he asked him on 1 February why he was following the nationalist regime to Canton.20 Chou asked the Russians for more arms for the PLA – in particular anti-aircraft weapons of Japanese, German or Czechoslovak origin – with ammunition, tanks and munitions. More Soviet advisers were needed, and Chou confided that the CCP had deciphered KMT and US codes.21 Meanwhile, the CIA was developing plans for covert action, which were put forward by the agency’s representative in the National Security Council for Truman’s authorisation. On 3 March, Secretary of State Dean Acheson blocked such action in mainland China, arguing that ‘millions’ of Chinese ‘wanted peace at any price’ and Washington should not interfere further.22 Nonetheless, the Secretary of State’s initiative in publishing the China White Paper, a collection of documents presenting US policy on China since 1944, made Mao mistakenly assume that there were plans for a US intervention.23 KMT Generals Fu and Wei asked Singlaub, the CIA station chief in Mukden, to transfer a message about creating and arming a Third Force in Manchuria in 1949 as Mao’s troops were defeating the KMT. The Third Force would hold Beijing and Tietsin and Taku. Admiral Oscar Badger agreed with the plan, committing the US to the war. He believed that it would be easy to transfer war materiel from Okinawa to support the Third Force. Nonetheless, at that time there was no interest from the CIA. Singlaub was assigned to the China desk at the agency in spring 1949. General MacArthur prevailed over Hillenkoetter to inhibit the CIA in the Pacific, assuring Truman that he would receive the required

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intelligence from his intelligence staff in Toyo. After all, ‘Hillenkoetter was only a rear admiral, a pay grade that MacArthur viewed as just slightly higher that the MP sergeants in polished helmets he stationed throughout the Dai Ichi building day and night as a kind of centurion guard’ as Singlaub put it. Meanwhile, the CIA made a failed bid to recruit a Mongolian network.24 On 4 March, the CIA Director, Admiral Roscoe Hillenkoetter, ordered all the agency’s personnel out of China, and by the end of the month the Shanghai and Canton stations had been closed; the CIA personnel moved, by sea, to Taiwan. The small Hong Kong station was retained.25 Nonetheless, Hugh Francis Redmond, a CIA agent, stayed behind in Shanghai, witnessing the entry of the communist forces while posing as a British salesman for the British-owned Henningsen and Co. Redmond was a fearless veteran paratrooper, who had seen both D-Day and operation Market Garden. He joined the SSU in July 1946 and after the establishment of the CIA was transferred to the new service. He lived in Shanghai from 1946 to 1951, and some fellow intelligence officers feared that he was no longer undercover. He was kept under close surveillance by the communist underground and Public Security upon the coming of the communists and the start of the Korean war and the entry of China. On 26 April 1951, Redmond was about to board a ship for San Francisco, when he was arrested on the port by the police. He was tortured, but he never revealed that he worked for the CIA. He was allowed to be visited by his mother. Beijing announced that on 13 April 1970 he had comminuted suicide in his cell, cutting his wrists. It was stated that his body was cremated.26 The CIA, correctly assessing the PLA’s strategy, claimed that the communists had decided to postpone the taking of Nanking and Shanghai for three to four months; they would be temporarily bypassed, isolated and then conquered in the same way as Beijing had been – through a local cessation of hostilities. Within a year all regions would be occupied by the PLA, with the exception of some coastal locations and Taiwan.27 On the night of 20 April commenced the crossing of the Yangtze. A KMT captain at the Jiangyin fort, at the mouth of the Yangtze, ensured that the Red Army would not confront any counterattack while disembarking. In other crossing points, the KMT Navy ship crews

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mutinied and facilitated the PLA’s crossing. On the morning of 22 April the PLA was outside Nanking. Li Zogren escaped by plane on 23 April. He was informed that the KMT delegation in Beijing had defected to the communists. They were General Zhang Zhizhong; Liu Fei, the vice minister of defense; and Shao Lici.28 Shanghai was about to fall. Peace delegations from Shanghai talked with the communists in Beijing in February and March, discussing the taking over of the city where the CCP was founded. The Green Gang leader Du Yuesheng, whose associates, after his orders, had massacred communists in the city back in April 1927, now had secret contact with the communist underground, trying to persuade them that he had ‘sincere’ motives and that he wanted to make it ‘unnecessary’ for the CCP to invade the city by force. For the last couple of years, Du had been on bad terms with Chiang Kai-shek and his son Chiang Ching-kuo, who had launched an anticorruption campaign and had arrested members of Du’s family. Du had managed to release them, but now he was trying desperately to find allies; eventually, in May, he escaped to Hong Kong and died there in 1951.29 In the last days of KMT rule in Shanghai, secret police and agents shot on the streets thousands of suspected communists. Ironically, Mao distrusted the communist underground in the cities, and orders were sent to the PLA commanders to suspect them, fearing they had been infiltrated by KMT agents. The communist underground members would have first to be vetted, Mao demanded.30 On 9 April 1949, while discussing with Kovalev, the Soviet representative, the takeover of Shanghai, Mao admitted the ‘lack of experience [of the CCP] with running such a big city’, and requested Soviet specialists ‘capable of handling the management and usage of the electrical station, water supply, large textile and other enterprises’. The chairman of the CCP asked for ‘specialists for struggle against espionage and intelligence’.31 Stalin was delighted to oblige: more Soviet intelligence officers in China would provide him with more insight into the workings of the CCP and Mao’s leadership. In a study dated 15 April 1949, the CIA claimed that Stalin sought to exercise serious influence over the CCP, turning it into a ‘Soviet instrument’ of policy and treating it like the Eastern European communist parties. The methods of attaining this would vary, taking into consideration that China was a vast country, with no Soviet troops

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to liberate it and an absence of any ethnic bond with Russia. Though the CCP leaders showed ‘some degree of independence’, they had all accepted the Soviet Union’s primary position in the world communist movement. Mao did not sound Titoist.32 Sino-Soviet relations had been ‘most circumspect’.33 ‘It may be assumed that Soviet-CCP liaison exists’, but ‘there is no positive evidence to establish’ that military and political advice was offered to the CCP. The CIA assumed that since almost half the CCP leaders on the Central Committee had been trained and indoctrinated in Moscow, they had Stalin’s trust. The agency emphasised that Moscow and the Moscow-trained CCP members ‘whose loyalty to the Kremlin is unquestioned are well aware of the danger of cleavages in the Party leadership and will endeavor to prevent the development of any movement which might jeopardize the Soviet effort to establish control over China’.34 The CIA seemed unaware of party purges, which commenced back in 1942, against pro-Moscow cadre and their leader Wang Ming. The analysis overemphasised the Soviet influence over Mao, who had complete control over the Politburo and the party. Mao insisted that Ambassador Stuart’s statements contradicted the actions of General Douglas MacArthur: two US companies had landed at Qingdao, and the United States was reinforcing the KMT navy in Shanghai. ‘Either Stuart is lying or the military [MacArthur] does not care about what the State Department says about anything,’ Mao remarked, adding that Stuart had lied in claiming that Washington was no longer helping the KMT.35 Stuart (rather naively) informed the CCP that ‘there were no American warships beyond Wusong Khou.’ It was a relief for Mao and his lieutenants, who feared that a US intervention would inhibit their advance to Shanghai. Once the reassurance about the position of the US fleet was given, the CCP gave orders to the PLA to strike a decisive blow at the KMT ships.36 Stuart had already informed the State Department in January 1949 that the CCP comprised ‘convinced Marxians of Leninist persuasion.’37 The ambassador, with his extensive Chinese experience, had not realised that the cult of Mao would create a new type of communism, and would eventually, in the medium term, antagonise the Kremlin. Yet again, Stalin feared a US intervention, warning Mao: ‘the imperialists will take all measures from blockade to military clashes with the PLA in order to keep South China under their influence. There is danger that the Anglo-Americans might land in Qingdao their forces in

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the rear of the main forces of the PLA, which had left for the South. This is a very serious danger.’38 Mao replied to Stalin’s continuing requests by saying that he would form a coalition government in August-September.39 No doubt, Stalin distrusted Mao; after the Tito-Moscow rift, the Chinese chairman was under suspicion of following the same path. Molotov called Mao ‘a Chinese Pugachev’ – an eighteenth century Cossack leader of a peasant rebellion. For the Soviet Foreign Secretary, Mao was ‘far from a Marxist, of course . . . he confessed to me that he had never read Marx’s Das Kapital.’40 MGB Colonel Georgii Mordvinov, who oversaw the activities of the CCP in the 1930s and 1940s, remarked of Mao’s ‘patriarchal inclinations, his pathological suspicion, his extraordinary ambition, his megalomania that developed into a cult.’41 In addition, Stalin took interest in the opinion of Andrei Orlov, the Russian physician of Mao, who warned him that the chairman ‘is able to conceal his feelings, and play the role that is his; he talks about this with intimates (sometimes with well-known persons) and laughingly asks whether he has pulled it off well.’42 Stalin assured Mao that he moved Ambassador Roshchin with the nationalist government from Nanjing to Canton in order to be able to obtain intelligence on the KMT’s plans.43

CHAPTER 26 HMS AMETHYST

‘The references to the inhumanity of the Communists’ conduct in paragraph 6 should be deleted from the narrative of events, and it was for consideration whether, with HMS Amethyst still in the Yangtze and the British communities at the mercy of the Communists in the areas under their control, the Government statement should do more by way of censure of the Communists than was required in a statement of facts.’1 Attlee and his cabinet examined the phrasing of the presentation of the deadly incident, fearing that the Chinese would escalate after a strong statement. Meanwhile, the House of Commons, the press and public opinion were exasperated at the loss of life: Royal Navy sailors were killed by Chinese communist shelling and machine gun fire on their way to the riverbank, even though Britain was not at war with Mao. The erased paragraph 6 of the draft statement read: ‘What could not have been foreseen before the incident was the repeated and deliberate attacks by massed artillery on the four warships, and on Sunderland Flying Boat, whose neutral character and peaceful intentions were all fully known to the Communist forces. For example, both “London” and “Black Swan” were prominently displaying white flags. Perhaps the high light of humanity was the machine-gunning of the men being disembarked from the “Amethyst” under the white flag, many of them seriously wounded, or while still swimming in the water. The same policy appears to be reflected in the refusal of the Communist authorities in Peking to receive a letter from His Majesty’s Consul asking them to order their forces to stop firing and allow our ships to give medical relief and evacuate the wounded.’2

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At 8.31 am, 20 April, frigate HMS Amethyst became the target of heavy shelling from PLA artillery batteries. The warship was steaming from Shanghai to Nanking to replace HMS Consort, which was standing as guard ship for the British embassy. The heavy shelling took place once the frigate approached Kiangyin (Jiangyin), further up the river. The first shells hit the bridge, wounding Lieutenant Commander Bernard Skinner, the captain, and First Lieutenant Geoffrey L. Weston and other crew members. The ship slewed to portside and grounded on the bank. The low power room was hit and the electricity circuits malfunctioned. Thus, the ship could not return fire, with the exception of the stern gun, which was hit also. Before 10.30 am Weston ordered an evacuation, but the boats were fired upon. 59 crew members reached the shores, and two were drowned. The seriously injured were transferred on a sampan, with the help of the Chinese nationalist troops the next day. At the missionary hospital in Kiangyin, a party from the British Embassy in Nanking saw the wounded and arranged for a train to bring them to Shanghai. Sixty unwounded men were aboard. The shelling had stopped, but PLA snipers fired at the ship. There were rumours of the planned crossing of the Yangtze by the PLA. An ultimatum was issued by the PLA to the effect that the crossing would take place by 21 April. There was a need for Amethyst to relieve Consort in Nanking; her supplies were at a minimum. It was planned that Amethyst would reach Nanking by 20 April, a day before the expiration of the ultimatum. For the same reason, Consort would be on her way before Amethyst arrived in Nanking.3 On 19 April, while Amethyst was steaming to Nanking, the British embassy received an intelligence report which warned that the day of the crossing of the Yangtze would be 21 April. The advance of the PLA to the south had made some British officers think seriously about contacting the communists so as to protect British installations and ships. In January, Captain Donaldson informed Vice Admiral Madden the Flag Officer of the Far East Command, that he was ‘endeavouring, by oblique methods which did not raise questions of diplomatic recognition, to inform the Communists that one of HM ships was being maintained in Nanking for humanitarian purposes only.’ The vice admiral recalled: ‘I therefore told assistant naval attache´ Shanghai and senior British naval officer (afloat) [in] Nanking to do likewise, using similar methods.’ Nonetheless these secret gestures were

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interpreted as a British weakness and did not deter the shelling of the Amethyst and other warships.4 Upon being informed of the attack against the frigate, Vice Admiral Madden, ordered Consort and Black Swan to leave Shanghai to speed to the support of the Amethyst.5 At about 1500 hours Consort reached Amethyst but was the target of heavy shelling and was compelled to pass her in speed. After steaming for two miles, Consort turned to make another attempt to approach Amethyst. The heavy shelling led the second bid to a failure; the Consort, which had fired against the enemy batteries, distanced herself, with casualties. The frigate HMS London and Black Swan met Consort at Kiang Yin at about 8pm. Consort had sustained heavy damages from the shelling and was ordered to Shanghai.6 Meanwhile, at the Foreign Office Burgess – the spy of Stalin – was reading the dispatches of the attack on the warships. He sounded critical of the British official position, claiming, wrongly, that HMS London was shelled by the nationalist batteries. In a memo he wrote of Britain being blamed for ‘distorting the news.’7 The crew of Amethyst worked tirelessly and achieved at 0200 hours, 21 April, to move the ship and anchor her two miles above Rose Island. The doctor of the ship was killed and Captain Skinner and First Lieutenant Weston seriously injured. London and Black Swan tried to approach Amethyst, but heavy fire deterred them. The Flag Officer took the decision to order London and Black Swan to Kian Yin; further attempts to assist Amethyst would only result in more casualties, he concluded. Once at Kiang Yin, the warships were fired at by communist batteries; the dead and wounded filled their corridors. Eventually, they steamed back to Shanghai. That afternoon, two doctors of the RAF and Royal Navy aboard a Sunderland flying boat made a daring attempt to approach Amethyst. Under fire, the Sunderland closed on Amethyst and the RAF doctor boarded the ship, bringing medical supplies and charts. Amethyst received further shells. The Sunderland managed to fly away. Amethyst steamed to a creek to cover herself. During the night more wounded managed to escape ashore with the help of nationalist forces. Then Amethyst sailed 10 miles up the river, but sniper fire targeted her. Once she anchored, the seriously wounded captain and first lieutenant were taken ashore – but they eventually died. Lieutenant Commander Kerans, the assistant naval attache´ of the British embassy, boarded the

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ship and assumed command; the crew counted four more officers, the RAF doctor, 52 ratings and eight Chinese. Lieutenant Colonel Raymond Dewar-Durie, who as a young lieutenant in 1933 followed the operations of the KMT in Jiangxi, was posted assistant military attache´ to the British embassy in Nanking. Now he was Kerans’s interpreter during his discussions with nationalist officers on the shore before he boarded the frigate.8 On the afternoon of 22 April, the Sunderland fying boat made another attempt to approach the Amethyst but was driven away by fire. The ship steamed another four miles upriver. Kerans communicated with the Flag Officer, and it was decided for the ship to remain at the new location. The Flag Officer sought for the rescue of Amethyst – and not the escalation of the incident – by calling for the bombing of the batteries by other warships or aircraft. The Amethyst had 19 killed and 13 wounded and 10 missing in action (during the evacuation); London had 13 killed and 15 wounded; Consort, 10 killed and severely wounded; Black Swan, 7 wounded. London and Amethyst sustained the heaviest damages in the upper works.9 The British ambassador in Nanking asked the consul in Beijing to contact the communist leadership to request them to issue instructions to the PLA to cease the artillery barage. This happened first on 20 April. A new message in the following days included a plea for medical supplies. It was Edward Youde, the third secretary of the embassy, who volunteered to reach the PLA forces north of Pukow to speak directly to the communist commander. Edward ‘Teddy’ Youde was born in 1924, in Penarth, Glamorgan. Showing a talent in foreign languages, he studied Chinese at the School of Oriental and African Studies, University of London, and from 1943 to 1946 he joined the Royal Naval Volunteer Reserve. In early 1949, he was appointed third secretary at the British embassy in Nanking. Youde crossed the nationalist lines alone on the night of 21 April. His account showed the dangers he encountered. He started from Pukow, nationalist bridgehead. The embassy staff estimated that the PLA command had to be in Yangchow, opposite Chinkiang. Youde decided to volunteer. He recalled: ‘armed with the pass from nationalist army, fifty silver dollars, a haversack of clothes and a letter to the commander of the 38th Army I crossed the Yangtze in a Chinese naval launch just before dark.’ He stayed the night with a nationalist unit, informing the commander of his mission. In the

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morning a guide showed Youde the way, and left him. The first two hours of his walk were ‘pleasant and amusing’; ‘there were large groups of peasants strung out along the route whose eyes popped out of their heads when they saw a foreigner.’10 No doubt, the lone Youde risked his life every moment: ‘My reveries en route were rudely interrupted on the outskirts of Haichchiatien, where I was to contact the magistrate. As a single rifle shot winged past me I made a dive for cover, but since no more shots came my way I emerged from my rabbit hole and walked on. It was an unpropitious moment because a machine gunner, seemingly mistaking the stick I carried for a rifle, tested his sights on me. A spirited exchange then developed between a nationalist gunner on an island in the river and my assailant just over my head (which by this time was as low as it could get in a nearby brick kiln in company with the heads of a few local peasants). When chips began to fly off the edge of the kiln we moved our abode to a Chinese grave yard and there discussed the situation. I learned that a Chinese battalion had taken the large Yung Li Chemical factory the night before. I asked one of them to take me there or alternatively to the magistrate. The latter had moved out long before the Communists arrived however and no one seemed particularly keen to walk to the Yung Li Factory in company with someone who seemed to be a fair target for both sides.’11 Youde showed patience: ‘I resigned myself to sitting in the grave yard until someone found me’. A PLA patrol approached. ‘Fortunately I saw them first and walked towards them with my hands up. Their surprise did not affect their discipline. In a trice the patrol had dispersed into the surrounding paddy fields and had me covered from all sides. The patrol commander listened to the explanation of my mission and without hesitation told two men to escort me back to headquarters.’12 There, the commander decided to allow Youde to go to higher level unit headquarters. Together with a team of soldiers they had to pass through a minefield. ‘In the move through the minefield the order of advance was changed. I had always marched in front with the commander (of the team) but I was then sent back down the line. The commander led the way followed by his second in command and a single file the troops and I followed. Whenever a mine was spotted (and all troops had been shown what to look for before we set out – the mines were of the ordinary United States pattern anti-personnel type) the word was passed back and we were soon marching into Puchen which had also

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been heavily mined. The locations of the mines in the town however had been marked with chalk and vegetation and there was comparatively little danger during daylight.’13 In Puchen, Youde asked for the shelling of Amethyst to stop, but the PLA commander declined this request; he could only stop the attack if ordered by higher command. Defeated, Youde prepared his departure. The commander did not allow Youde to communicate with the British legation in Beijing, and told him that for him he was a private citizen and so he could not issue him a pass to reach Nanking. Nonetheless, within the PLA-held areas he would be protected by his troops.14 Meanwhile, the nationalist bridgehead at Pukow was defeated – something Youde did not know at that time. The commander offered him a meal, and later Youde was left alone with no escort. Night was falling, and he had to find somewhere to sleep in a city full of mines. He asked some communist soldiers for their assistance; they ordered a boy to lead him somewhere he could find accommodation for the night. Eventually, he slept in a small hut. The next day, the owner would not take silver dollars, and two soldiers told Youde to pay by post later when he had some communist currency. The soldiers showed him the way to Pukow, and he was now with a group of railway labourers. He was found by a communist patrol, who escorted him to Pukow. There, a communist officer helped him embark for Nanking and reached the embassy to report.15 Youde was commended for his courage and awarded the Member cross of the order of the British Empire. Youde remarked in his report: ‘it may be dangerous to draw any general conclusions on communist troops from a three day march with well-trained front line units but it still be obvious from the above account that the forces with which I spent my time were of a type which one would not expect to find anywhere in China under nationalist rule. The discipline of the troops would have delighted the heart of any English officer and their consideration for the peasantry in the areas through which they passed goes far to explain why they are able to move so quickly and smoothly through the countryside.’ The officers treated their soldiers well, and morale was ‘outstanding’. ‘I purposefully avoided asking any more questions than were absolutely necessary in order not to arouse any suspicions of spying in the minds of the communists . . . I attempted to give the impression of having no interest whatsoever in their fighting formations or troop dispositions.’16

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The PLA insisted that the Royal Navy ships had entered a war zone without authorisation and were responsible for the 252 casualties in their ranks. The Chinese made an extravagant offer: they claimed that, having consulted their headquarters, they were prepared to allow the Amethyst to steam upriver provided that she could be used to help them cross the Yangtze. They claimed that the Royal Navy warships fired not in self defence, but to prevent the crossing of the Yangtze – thus they had taken sides in the civil war. This was announced in a communique´ of the PLA. They said that only the following day (April 20) did they realise that they were not nationalist navy warships, but British.17 The PLA’s shelling of Royal Navy warships in the Yangtze was interpreted by the CIA as a demonstration ‘to risk reprisals in order to substantiate their promise to protect China from “imperialist aggression”’. The CCP had boosted its prestige in the eyes of regional Asian communist movements by these attacks, and ‘it is possible that the Communists will again take advantage of any opportunities which arise for military action against foreign armed forces’.18 Meanwhile, on 23 April the PLA reached Nanking; on 27 May Shanghai, the city in which the CCP had been founded, was in communist hands. RAF Wing commander Peter Howard-Williams, the assistant air attache´, was in Shanghai and experienced the start of the communist takeover: ‘One day morning I heard shooting and lay under the bed as bullets hit the outside walls of my flat . . . after a while I crawled out from under the bed and all seemed quiet. I went out onto the street and found that I was now in Communist territory. I rang the consulate and found that my office was still in nationalist territory. They asked me if I had any information as to where the fighting was, so in the afternoon a very frightened Chen [a servant] and an equally frightened assistant air attache´, ventured forth in my car. It turned out to be quite exciting when we found ourselves in no man’s land and had a lot of problems getting back to the flat.’ The new communist authorities forbade Howard-Williams to drive a van with mail to the Amethyst.19 In public, Mao demanded that Britain apologise, admit responsibility for the incident and the deaths of PLA troops, withdraw all armed forces and warships from China and provide no further aid to the nationalist regime. Nonetheless, Mao, in private, said to his lieutenants that the shelling of the Amethyst ‘seemed an accident . . . except for using this incident to educate the people, we actually had no need to make too

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much of it.’20 The key negotiators General Yan Zhoangxian and Major Kang Maozhao, under the direction of Chou Enlai, pressed Captain Kerans to admit the ‘crime’ of Amethyst – how it fired first against the shore batteries. Kerans had many meetings with the Chinese, from April till July. It was evident that they procrastinated, becoming gradually intransigent but also creating false hopes of resolution. Kerans asked many times for negotiations at higher level, but each time he was turned down. Eventually he decided for Amethyst to flee, though he was aware of the danger of the ship being blown up by the batteries. Nonetheless, the Chinese leadership had decided that if the Amethyst tried to escape, they would ‘allow it to escape (the party concerned should be secretly notified of this in advance) without attacking it, and then immediately issue a statement of condemnation.’21 Walter Gordon Harmon – the former SIS representative in Chungking, now an official of the government of Hong Kong – was in communication with Chou Enlai, or at least with CCP cadre, during the crisis. In fact, he went into China to talk with some of the communist leadership. The Foreign Office officials consulted on whether to appoint the well-connected Harmon secret interlocutor; nonetheless, it was feared that appointing Harmon a secret liaison might be interpreted by Mao as recognition of his regime. The scheme was turned down.22 By early June, Urquhart, the British consul in Shanghai, reported to Ambassador Stevenson, in Nanking, that his secret contacts told him that the PLA had recommended to Mao the release of the Amethyst. A telegram recommending Amethyst’s release had been sent to Mao.23 In his turn, Kerans asked for fuel supplies from Admiralty stocks in Shanghai; surprisingly, Major Kang consented. On 9 July sampans transferred 294 drums (54 tons) of fuel to Amethyst. Kerans later wrote, ‘I shall never know why the Communist authorities were so ready to accede to the entry of this invaluable oil fuel. Kang – for a long time he thought we burned coal.’24 But maybe Kang, who was in direct communication with Chou Enlai, was not naive: Amethyst needed fuel – to sail away. Perhaps this was a subtle gesture, a little hint to Kerans, from the otherwise intransigent negotiator. Kerans, who in April and May believed that an agreement could be reached, grew anxious that his ship would be isolated, lose all its supplies and have to surrender. He met 19 times with the Chinese officers, the majority of the times in their headquarters at Chingkiang. Of those

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consultations with Kang and his general, he recalled: ‘these meetings were held with a very thin veil of amicability and rigid formality . . . meeting can fairly be summed up as representing a sine curve; at one meeting some hope for safe conduct was given, but the next would speedily dash it’.25 On the night 30 July, Amethyst steamed away, following the transport Kiengling Liberation. Soon, Chinese batteries opened fire, sinking the transport, but the communist propaganda blamed Amethyst of piracy: The British warship Amethyst, which committed a serious crime on April 20 by invading the defence line of our army and shelling the defence positions of our army, causing heavy casualties, committed another serious crime on July 30. The warship first sank the Chinese steamer Kiengling Liberation and then sank many junks for life-saving purposes, causing the absolute majority of the several hundred passengers of the Kiengling Liberation to be drowned in the Yangtze. The British warship Amethyst, which committed such a serious crime, took advantage of the preoccupations of our army in saving the passengers and fled away, but the British Prime Minister Attlee and British King George wired in succession congratulations to those on board the warship on their “courageous achievement, ‘courage’, skill and determination”. . . the Chinese people would not forget and avenge the sacrifices of our brothers, said General Yan Chang-hsien of the Chinkiang front.26 HMS Concord steamed into the Yangtze to protect Amethyst in case of attack. The warships met four miles into the river, beyond the forts of Woosong. The Foreign Office and the Admiralty kept secret the deployment of Concord, assuming that this could be seen as an intervention in China and an escalation of the crisis.27 Eventually – and curiously – the Chinese batteries at the forts of Woosong did not open fire; it was as if Mao had ordered that the Royal Navy warships not be harmed. As the communist press blamed Amethyst, citing ‘piracy’, Lieutenant Weston was in a difficult position. When Kerans assumed command of Amethyst, Weston was evacuated – he was wounded, with shrapnel close to his lungs. Eventually he recuperated (without operation) and reached

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Shanghai. He was assigned to the naval attache´ office, Commander Pringle. The commander had been trying to find a way for supplies to be transferred to Amethyst. Weston himself applied to the communist authorities to be allowed to return to the ship, but this was declined. When Amethyst escaped, Weston was in more trouble. The communist authorities considered him a criminal since he was a member of the warship’s crew. Wing Commander Howard-Williams did all he could to arrange a cover for Weston. Howard-Williams was also ordered by the British embassy to leave for Hong Kong as soon as possible. The attache´ visited a police station to ask for a permit and an exit visa; he was informed that it could not be issued immediately. He was told to visit the station again in a few days. A PLA officer appeared, Colonel Ch’eng, who had defected from the KMT and spoke excellent English; he interviewed Howard-Williams, questioning him about his activities in Shanghai as well as his views on the civil war. Ch’eng also asked him if he knew ‘a Royal Navy officer in Shanghai called Weston’. The attache´ reacted calmly, hiding his surprise, and told him that he could not think at the moment of such a name. In fact, during those days Weston lived in Howard-Williams’s apartment. The attache´ returned home and arranged for Weston to stay somewhere else. The US Naval attache´ Commander Morgan Slayton accepted Weston in his apartment. The next day, after the interview with Ch’eng, PLA police reached Howard-Williams’ apartment and started questioning servants. Slayton had his own troubles. Former employees of the US Navy, encouraged by the communist authorities, laid siege on the US consulate, demanding severance pay. Weston was rebuffed when he asked the captain of the British cargo Edith Moller to take him in; the captain feared that his ship would be searched, and since Weston had no permit he could be arrested and the ship could be confiscated. Weston, via Chief Petty Officer Cunnigham, who worked for Commander Pringle, asked for Chinese confidential contacts to be approached and for a junk to take him to HMS Hart, which was deployed in the mouth of Yangtze. On 10 August 1949, in a room behind the consul’s office on the Bund, Cunnigham negotiated with a Chinese merchant and junk owner. The Chinese wanted to be paid in rice. They reached an agreement, but the trip was postponed for a day after information came in that the communist authorities were searching all junks at Woosong.

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Eventually, on 15 August, Weston was given a special passport by the British consul and told by the Chinese merchant that he would be transported on a truck to Woosong. He had an appointment with the secret liaison in a Shanghai street. Weston remembered: ‘my only disguise consisted of being dressed in a dirty shirt and pair of shorts, being generally shabby and unshaven and wearing sunglasses and a Panama hat to simulate a Shanghai coolie. This would not have stood up to close scrutiny but my entourage of Chinese prevented my being closely observed.’ From Woosong, he was about to sail aboard a junk to the Gutzlaff island where HMS Hart waited. Weston and the Chinese junk master were surprised. HMS Hart was not near, and the tide led their ship close to a nationalist destroyer. The lieutenant of Amethyst narrated: ‘when one mile from her, the destroyer fired several bursts towards us with Oerlikon and machine guns and addressed us in Chinese over the loud hailer.’ A nationalist party boarded the junk and soon discovered Weston, who they first thought was Russian. He was taken to the Tai Kong, the ex-US Navy destroyer, whose captain told him that they would sail to Ting Hai island. The Chinese officer was convinced that Weston was British, not Russian, but declined to inform HMS Comus, which had replaced HMS Hart, or any other Royal Navy ship, of Weston. Once they reached Ting Hai, he was informed that he would be taken to Taiwan and that the Royal Navy would be informed of it. On 19 August, he was told that he would be allowed to board HMS Comus. A nationalist destroyer took him that evening, and soon he was climbing aboard Comus. Finally he had escaped China.28 In their turn, the Admiralty, together with the Foreign Office, sought to explore the response to the shelling of the warships. The Foreign Office was cautious and, for the time being, uninterested in offering advice: ‘the fact that the Communists did not release the Amethyst and tried to use her continued captivity as a lever for extraction of a British confession or responsibility would not appear to entitle us to say that we were no longer anxious to discuss the matter. The Admiralty’s anxiety not to drop this case is most understandable. It is a strange commentary on the political sense of the yellow press that the escape of the Amethyst, still the subject of what might be described as mafficking, is depicted as a British naval victory. No attention appears to be paid by the gutter press to the fact that the Amethyst, London etc. were heavily shot up, with serious loss of life, and that neither [Chinese] apology nor

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compensation has been obtained. However, it is clearly not possible to raise the matter with the Communist Govt until we recognise it and until normal diplomatic intercourse is resumed, and consequently it would seem premature to try to decide what courses must surely depend on the reaction.’29 Indeed, only full diplomatic relations with the People’s Republic of China, and the study of the reactions of the Chinese, would enable the Foreign Office and the Admiralty to draft a full response to the incident which cost the lives of so many sailors.30 Youde, the diplomat who crossed alone into PLA-held territory, returned to his duties. He served with the British embassy in Beijing, until 1951, when he was transferred to the Foreign Office, specialising in NATO issues. In 1956, he was appointed first secretary at the British embassy in Washington. He was among the diplomats who worked hard for the normalisation of the Anglo–American relations after the Suez crisis. In 1960–2, he was again reassigned in China, and later he served at the Foreign Office Northern Europe and Soviet Union department. In 1969, he was appointed private secretary to Prime Minister Harold Wilson, and in 1973 he became assistant under-secretary for Asian affairs. A year later he was named ambassador to China and witnessed the first post-Mao power struggles. Youde was on friendly terms with Deng Xiaoping and worked to promote Anglo-Chinese trade. In 1981, Youde was named governor of Hong Kong, and in July 1983–September 1984 he headed the British delegation in negotiations with Beijing over the handing over of the colony. He died of heart attack in his bed at the British embassy on 5 December 1986.31 Commander Kerans was awarded the Distinguished Service Order for commanding Amethyst and leading it to escape. In the 1959 general election, Kerans was elected with the Conservative Party, and at the House of Commons he argued that Britain must allow the People’s Republic of China to be represented at the United Nations and that it should boost trade with Beijing ‘for the benefit of peace’.32 In late spring/early summer 1949 the armies of Chiang Kai-shek were disintegrating, and he had to flee to Taiwan. Three US-trained parachute regiments mutinied – during World War II, KMT General Yan Baohang had recommended that the OSS accept secret communist cadre into its regiments’ parachute training school in Kaiyuan, Yunnan.33 By May 1949, following the PLA’s sweeping advance against KMT forces, the CIA claimed that Soviet Field Marshal Georgi Zukhov

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‘planned’ and ‘directed’ the ‘entire’ campaign, while ‘all Chinese Communist heavy artillery units contain[ed] a Soviet cadre, and all heavy anti-aircraft units contain[ed] a Japanese cadre’.34 Washington had already been informed by a secret source that Major General Lodionov, a veteran of the war against Nazi Germany, advised General General Chu Teh on the crossing of the Yangtze. In addition, ‘a Chinese student, a usually reliable source who recently left Peiping (Beijing), saw a Soviet general and Chinese communist leaders leaving Li Toung-jen’s former home’.35 Nonetheless, Washington was not certain that Lodionov was holding an advisory position, even though a ‘competent’ secret source had already supplied the CIA with a long list of Soviet diplomatic and military personnel serving in China.36 The agency assessed (correctly) that action by the CCP to take Hong Kong was unlikely – London had already sent reinforcements for its defence. The CCP, however, would try to subvert colonial rule if its government was not recognised by Britain.37 Meanwhile, Stalin reassured Mao: ‘You exaggerate the forces of Ma Bufan [of the KMT]. In accordance with our information, he is not that strong.’38 In the period of mid-July to mid-August 1949, the CIA reported rumours that Mao was dead. On 15 July reports of rumours in Tsingtao alleged that Mao ‘[had] died on 7 July, either from assassination or natural causes. The rumor gaining credence for the following reasons: (a) No speech was recorded for Mao in Peiping during the 7 July celebration. Only speeches for Chu Teh and Chou Enlai were recorded. (b) The chairman for the celebration in Peiping was Chou Enlai, not Mao. (c) At a mass meeting on the Tsingtao race course, cheers were asked for the Party, Chu Teh and Chou Enlai, but not for Mao. (d) Gray-clad political police in Tsingtao were called to a special meeting at 3 a.m. on 7 July. They did not appear at the race course in any large force during the mass meeting and celebration [. . .]. It is rumoured that Mao was admitted to the Peiping Union Medical Centre on the morning of 7 July.’39 By 2 August, the CIA had admitted that the rumour was ‘false’. A source whose name was not declassified had met Mao, who was alive

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(but worried about inflation, floods and the ‘international situation’).40 Nonetheless, confusion persisted. On 18 August, one unevaluated report claimed: ‘It is said that Mao Tse-tung was stabbed to death by a Russian while confined in the Peking Union Medical College, and that Chou Enlai has been named head of the Chinese Communist Party.’41 Mao had in fact been unwell for some years; some scholars have argued that he suffered from exhaustion and an undiagnosed low-grade form of malaria, as well as from bronchitis.42 Eventually, on 1 October 1949 in Tiananmen square, standing atop the Gate of Heavenly Peace before a massive crowd, Mao declared the establishment of the People’s Republic of China. Stalin, after years of viewing Mao with suspicion, had to praise his leadership: ‘The victors are not brought to judgement. Victors are always correct.’43 The CCP top cadres and the security detail, as well as (initially) Mao himself, had some anxieties about his appearing at such a large and open gathering, fearing that KMT assassins were operating in Beijing (at that time the KMT air force was continuing the fight against the PLA in north China).44 Mao chose 1 October for two reasons: October was the first month of the 1911 Wuhan revolution against the Qing dynasty; October was the first month of the 1917 Bolshevik revolution.45 Chiang Kai-shek returned from Taiwan on 14 July, surprising Li Zogren in Guangzhou and setting up an Extraordinary Committee; but before long he fled again to Taipei with a large cache of the remaining government archives. Some of Li’s generals suggested the murder of the generalissimo. In early October the PLA defeated the remaining nationalist forces at the Guangzhou. Chiang, who had returned to China, left the city on 3 October. On 30 November he was in Chungking; he was woken up by his guards and rushed to his limousine for the airport; the PLA were about to take over the city and capture him. Panicked refugees flocked the road, blocking the Chiang’s route. Eventually, he reached Chengdu. On 10 December he was compelled to leave the city; again, the PLA was coming too close. He and his son left for Taipei, never to return. Chiang believed that a third world war would save his regime; the start of the Korean war, a year later, was for him the opportunity to reclaim victory.46 Stalin, via Vice-Foreign Minister Andrei Gromyko, recognised the People’s Republic of China on 2 October.47 The rest of the communist states followed. Studying the tempo of recognitions by Moscow and the

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rest of communist states, Burgess wrote: ‘there seems evidence for careful, successful and detailed Sino-Soviet planning and co-ordination of several moves that both have made. Further this coordination appears to have been achieved well in advance of the moves coordinated.’48 Chiang Kai-shek and approximately two million nationalist Chinese retreated to Taiwan, while isolated pockets of KMT forces remained in south China and elsewhere on the mainland. The taking of Taiwan by the communist forces was averted by the battle of Kuningtou, and in December 1949 Chiang proclaimed Taipei the temporary capital of the Republic of China, continuing to claim that his government was the sole legitimate authority in China. In spring 1950, the PLA captured the Hainan, Wanshan and Zhoushan islands. Since summer 1949, the Attlee cabinet had decided to recognise the new regime in China though the actual timing was left to Bevin to decide. By December he had decided and notified the British diplomatic missions to extend de jure recognition of the People’s Republic of China on 6 January 1950. The British government would withdraw recognition of the Republic of China, now based in Taiwan. No doubt, the 5 January meeting between Hector McNeil, the Minister of State, and the Chinese ambassador, in London, was not easy. ‘Dr Tien Hsi made quite an occasion of his call and pleaded with me not to talk business until he had lighted his cigar. Then after the usual formalities I told him that I was formally instructed to inform him that as from noon to-morrow His Majesty’s Government would recognise the Communist Government of China and at the same time withdraw recognition form the Nationalist Government’. He protested and finished his speech with ‘an obviously prepared speech with the line of Mark Anthony: “But yesterday the word of Caesar might have stood against the world; now lies he there and none so poor to do him reverence”’.49

AFTERMATH `

YOUR FUTURE IS VERY DARK'

February 29, 1952, aboard a C47 over Manchuria: Richard Facteau, a CIA paramilitary officer in his early twenties, was trying to warm himself in the cold and noisy cabin. He laughed upon realising that he had no ammunition for his .32 caliber pistol. It was around midnight. In a hastily organised mission he had to pick up a Chinese agent. There was no need for a gun anyway, he thought. The plane would not touch the ground; the Chinese guerrillas, who were supported by the Americans, would set up two poles, and the pilots would employ an aerial pick-up device. Together with Facteau was John Downey, another young CIA officer. The pilots Norman Schwartz and Robert Snoddy were highly skilled professionals of the Civil Aviation Transport (CAT), the CIA’s secret air wing. They did not trouble themselves, the weather was good. From South Korea they flew 400 miles northwest to Manchuria.1 Frank Wisner, a lawyer and OSS veteran who joined the CIA in 1947, worked fervently to set up covert stations in Taiwan before the start of the Korean War. In parallel, Wisner agreed for large sums of money to be paid to an ostensibly nationalist Chinese warlord who held Hainan island. Eventually, the warlord sided with Mao, selling out the Americans. By 1952, Wisner was head of the Directorate of Plans of the agency. Nonetheless, Hoover the FBI director, who antagonised the OSS and the CIA (and allegedly had convinced Truman to abolish the OSS and always watched if the CIA would become an American ‘Gestapo’), tried to embarrass Wisner. The story of Wisner’s wartime affair with Romanian Princess Caradja was never printed, but it was discussed in

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top government echelons, and rumours of Romanian e´migre´s had found some willing ears. There was an attempt to prove that the princess was a communist spy – thus discrediting Wisner, who, after all, was closely cooperating with Kim Philby, the longtime KGB mole.2 Back in October 1949, the CIA was highly pessimistic about the prospects of resistance to the government of Beijing. The remaining ‘anticommunist regimes’ were reported in South Kwantung, Kwangsi and Kiangsi, and Kweichow (about 260,000 troops); South Shensi, Szechwan and Yunnan (200,000); Northwest Ningsia, Kansu and Tsinghai (90,000); and Taiwan. The forces in mainland China were isolated, with few prospects, poor leadership and few supplies to successfully confront the PLA. None of these groups, ‘even with extensive US political, economic, and logistic support, can survive beyond 1950 except on sufferance of the Communists.’ If Washington granted them aid, this ‘probably would precipitate a Communist drive to wipe out the recipients long before the material could reach them’. In any case, only a US armed intervention could ensure their survival.3 The start of the Korean war, and the Chinese intervention in November 1950, compelled the CIA to become optimistic. The Americans invested in Chinese paramilitary action. In Taiwan, about 8,500 guerrillas were trained by Chiang Kai-shek, with the support of the CIA. Raids were conducted on the South China coast.4 Many western ‘companies’ – CIA fronts – were established. Streams of false reports from Chinese sources in Hong Kong created the impression that ‘Third Force’ Chinese, who were neither sided with the KMT nor with the CCP, were ready for war with the communist regime, as long as they had the means. Wisner and Richard Stilwell, the Far East chief of operations, pressed hard for the CIA to support these guerrillas with money and weapons. During the same period, while Indochina was ablaze with the war of the French against the Vietminh, the CIA was trying to find the ‘Third Force’ or nationalists who were not corrupt and pro-French like the existing nationalist parties, who sided with Emperor Bao Dai. Wisner and Stilwell believed that up to 500,000 guerrillas were waiting for the CIA to get supplies to commence the war against Mao. Stilwell, who had fought with the 90th Division in Europe, would not tolerate any skepticism about covert action in China.5 In mid March 1951, President Truman and his national security team examined the special study ‘Courses of Action Relative to Communist

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China and Korea – Anti-Communist Chinese’. This study was carefully drafted to promote the prospects of covert action: ‘the anti-communist elements and guerilla forces on the mainland of China would also be encouraged and motivated to positive action . . . There is evidence to indicate that a substantial part of the Chinese people are thoroughly disillusioned with the Chinese communist regime, and it is estimated that about 700,000 are engaged in active resistance operations, ranging from local banditry to organised guerilla warfare.’6 The authors were overconfident, claiming: ‘an increase in the tempo of guerilla activity and sabotage within Communist China would be promoted while, at the same time, the threat of Nationalist landings on the China coast would prevent further CCP withdrawal from South China for transfer to Manchuria and Korea. Furthermore, this trend combined with possible large-scale guerilla activity in Kwangsi and Yunnan would materially reduce pressure on Hong Kong and Macao, and reduce support of the Viet Ming [in Vietnam]’.7 It was up to the Americans to collect secret intelligence, since the Chinese nationalists in Taiwan’s ‘means of obtaining intelligence elsewhere is extremely limited. Therefore, it is considered that if augmented by US air and naval intelligence, it would not be likely for the Communist to trap any Nationalist landing force on the mainland due to surprise action . . . areas of operation on the Chinese mainland suitable for Nationalist attach contain few vital objectives. Fukien Province, directly opposite Formosa, is wild, mountainous, semitropical, and sparsely populated in comparison with the rest of China. The bulk of the people live on the coastline, where fishing is a major industry. The interior is infested with bandits, who will fight on any side which pays them. This is suitable for the establishment of a guerilla operating base. From such a base, underground control and supply lines to the north, west, and east could be maintained to other guerilla groups . . . to the South, the Crown colony of Hong Kong, with British sensitivity, its trade and traffic, makes any over operation by the nationalists in the Canton area undesirable initially.’8 In any case, ‘amphibious operations by the Nationalists against the mainland south of Canton and north of Shanghai are not considered feasible due to logistical problems, and the danger of annihilation.’9 John Downey, an athletic graduate of Yale University, joined the CIA in June 1951. Richard Fecteau joined that same year, having completed

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his studies at Boston University. Both became paramilitary officers, and after training they entered a CIA programme that supported anticommunist Chinese. The CIA concluded that it was possible for agents to approach the anti-communist groups.10 In parallel, in other clandestine programmes, the CIA worked with the Taiwan based nationalist secret services to support an estimated 1.6 million nationalist troops loyal to Chiang Kai-shek who had been stranded in mainland China. The CIA in Taiwan cooperated with the nationalist services under the successor of Dai Li, General Mao Jen-feng, who organised the selection and special training of the agent-commandos. In October 1952, a team of Chinese was parachuted into Manchuria; they communicated by radio only once. The CIA assumed that they had either defected or being arrested by Chinese security.11 James Lilley, at that time a CIA officer and later US ambassador in China during the 1989 Tiananmen crisis, writes: ‘contrary to CIA predictions, our missions were unable to locate or exploit the kind of discontent among the Chinese population that could be used to establish intelligence bases in China. The Chinese were not willing to side with outside forces . . . the mission to train Chinese guerillas in Okinawa and Saipan skidded to a halt before any successful missions were carried out on the mainland.’ On the Chinese border with Burma, a nationalist garrison several times invaded China, hoping that would bring a revolt among the population. Nonetheless, each time they were defeated by the PLA. Eventually, after strong pressure from the United Nations, Taiwan backed down from supporting this force.12 After the entry of Beijing into the Korean war, Chiang Kai-shek, mistakenly believed that he could open a new warfront for China. Most significantly, as Lilley elaborates, ‘the CIA was also swindled by elements of the Chinese Third Force [. . .] desperate for information the CIA had linked up in the early 1950s with these disaffected Chinese because they claimed they had reliable intelligence networks on the mainland. But the Third Force elements stranded outside the mainland were high on reporting and low on access. US intelligence officers in Hong Kong and Taiwan thought they were getting firsthand reports on conditions in China, but the reports turned out to be embroidered versions of articles from provincial Chinese newspapers concocted in Kowloon apartments. We discovered that, like Taiwanese intelligence, they didn’t have credible sources on the mainland. The CIA had been

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“had”’.13 The commando operations for missions in China were discontinued: of the 212 Chinese trained and parachuted from 1951 to 1953, 101 were killed and 111 captured.14 The British did not allow secret operations to take place in Hong Kong. In 1951, the Hong Kong Special Branch arrested CIA agents handing over money to ‘Third Force’ Chinese. The officers were deported and the authorities ‘put the CIA on a tight rope’. The CIA was not even allowed to penetrate communist organisations within the colony. Britain and Hong Kong did not want to provoke Mao and ‘were dismayed by the CIA’s decision to work with what they deemed questionable agents.’15 John Downey was 22 years old, and Richard Fecteau 25, when they commenced the training of the Chinese agents. In April 1952, a first team of four Chinese parachuted into South China, but all contact was lost thereafter. Five Chinese were parachuted in Jilin province in Manchuria in mid July 1952. They were trained by Downey. They sent back radio messages, and a C47 transport dropped supplies in August and October. A Chinese team, whose assignment was to be a courier between the team dropped in July and the CIA, was parachuted in September. In early November this team radioed that they had met a dissident leader and asked to be extradited by air. The CIA had borrowed and modified a device for mail air pick-up; the plane flew very low, ‘hooking a line elevated between two poles. The line was connected to a harness in which the agent was strapped. Once airborne, the man was to be winched into the aircraft.’ The CAT pilots Norman Schwartz and Robert Snoddy were ready to fly. They got the ‘green light’ at midnight on 29 November. Since there was no time to train Chinese how to use the winch, the CIA head of team ordered Downey and Fecteau to fly with the transport to handle it. The C47 reached its destination, and the pilots noted the agreed recognition signal from the ground. Downey and Fecteau pushed out the packs of supplies for the agent team and arranged for the equipment for the aerial pickup. The C47 made a wide circle over the snowfield. The Chinese agents had to set up the poles for the pickup. The plane flew over the designated position again about 45 minutes later. They noted a ‘ready’ signal from the ground. The pilots made a low altitude first pass, a warning to the commandos that the second one would be for the pick up. Four or five Chinese were seen on the snow-covered ground; the moonlight helped the pilots see them.

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The slow C47 descended to make the pass at about 60 knots when two anti-aircraft guns fired at it. Moments later, as if waiting first for the first anti-aircraft shots, troops were seen coming out of the nearby woods. The pilots tried to lead up the plane, but the engines did not respond and the plane crash-landed in some trees. Downey and Fecteau were not injured in the crash landing but realised that their pilots were dead – either by the anti-aircraft fire pointed at the cockpit or by the landing. The two CIA officers were just out of the plane when the Chinese troops came ‘whooping and hollering’. Surrender was the only option.16 According to an operations officer involved in the CIA programme, the analysis of two signals from Chinese agents in the summer led to the conclusion that 90 per cent of the Chinese agents’ team was run by the communist security forces. When he voiced his opinion, he was rebuffed by the unit chief (who eventually ordered the CIA officers and the CAT pilots into China). The officer persisted and found himself transferred to another unit. The counterargument was that since the team was ‘successfully’ resupplied in August and October no question about its loyalty should arise. ‘Your future is very dark’. These were the first words, spoken in broken English, by the angry looking Chinese officer who interrogated Fecteau. Together with Downey, Fecteau was brought into a small village police station. There they saw the ‘agent/courier’ whom they were supposed to pick up. The Chinese nodded to the officer once he saw them. Soon they were transported by truck to a prison in Mukden. There they were chained at the legs and kept in isolation. Meanwhile, several hours after the scheduled time of pickup, the CIA field unit received a message from the agent team, claiming that the aerial pick up mission had succeeded. But the C47 did not appear in the morning of 30 November. The CIA unit and the CAT made up a cover story which had the plane going missing between Korea and Japan. By 4 December, the flight was ‘presumed lost in the Sea of Japan’. The two passengers, Downey and Fecteau, were identified as ‘Department of the Army civilian employees’, and Walter Bedell Smith, the CIA director, signed letters of condolence to their families: ‘I have learned that [your son/your husband] was a passenger on a commercial plane flight between South Korea and Japan which is now overdue and that there is grave fear that he may have been lost.’ Allen Dulles, the new CIA director after the presidential elections, wrote similar letters to their families.17

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Downey and Fecteau were separated and submitted to various harsh interrogation techniques, including sleep deprivation. They were told that no one cared for them and that they were abandoned to their fate. Downey later said, ‘I was extremely scared . . . We were isolated and had no idea of what was going to happen to us and had no idea of what was going on in the world.’ Fecteau’s legs were tied with leg irons for ten months. Eventually, they confessed that they were CIA agents. Fecteau, later described the interrogators’ interest: ‘They kept asking for names, names, names. I decided that all Agency names except classmates [from training], I would tell them only first names and I stuck with that all the way, instructors, people in Washington, all first names only. As to personnel [in the field], I told them that I had only been there three weeks and I only knew first names there also . . . On the names of classmates I knew they would ask not only the names but character descriptions, physical descriptions. I then decided to give the names of my fellow teammates on the Boston University football team [to] be able to give them very good character descriptions.’ Fecteau offered the interrogators a ‘cover confession’ by mid December 1952: ‘The thing that sustained me most through the 19 years was the fact that I didn’t tell them everything I had known. Whenever I felt depressed, this was the greatest help to me.’18 After five months in Mukden, the captured agents were transferred to a prison in Beijing. They had not had advanced training to cope with the mental pressure of imprisonment. In the first months for Fecteau ‘the walls started moving in on me. I would put my foot out in front of me and measure the distance to be sure the wall wasn’t really moving.’ Downey remembers that he was desperate and ‘extremely scared’ of his life. Only gradually and painstakingly did they develop the mental strategies to survive the decades-long imprisonment. After two years, they were allowed to meet each other. The Chinese authorities put them on trial, but the proceedings were kept secret. For the tribunal, Downey was the ‘Chief Culprit’ and Fecteau his ‘Assistant Chief Culprit’ in spying. Downey’s sentence was life imprisonment, and Fecteau’s 20 years. Downey was pleasantly surprised because he had assumed that they would execute him and started laughing once he heard Fecteay saying, ‘My wife is going to die childless’. But the guards became furious. The CIA was surprised when reports of the New China Agency were translated, announcing the trial and sentencing of the two officers, long

336

THE SECRET WAR

FOR

CHINA

presumed dead, as well as the sentencing (for espionage) in another trial of the crew of a USAF B29 shot down over China in early 1953.19 Richard M. Bissell Jr., the special assistant to the director of the CIA, chaired an ad hoc committee to examine rescue operations for Downey and Fecteau. Some officials argued in favour of the option to negotiate their release with the Chinese. Bissell argued for diplomatic and covert pressure on Beijing, but his positions were not adopted. The CIA pressed for its agents to be included in the release of prisoners of war arrangements after the end of the Korean war, but other US government agencies did not concur. The Pentagon feared that if the cases of the CIA officers were included in the US claims, Beijing would resist the release of captured military personnel. Thus, no official request was issued for them. The CIA was isolated, and the official position of the US government was that they were Army civilians whose flight strayed into China. American diplomats referred to their release in their talks with Chinese delegations in Geneva and Warsaw for the next fifteen years, but with no results. Within the CIA there were consultations for a commando raid on the prison in Beijing, but eventually these were turned down due to lack of accurate information. After their trial, for Downey and Fecteau boredom was the ‘greatest enemy’ in the cold, solitary cells. The prison authorities offered slightly better conditions – only to take them back as another psychological war game. In 1955, they were allowed to mingle with the captured crew of a downed B29 during the Korean war, and allowed to believe that they would released together with them, only to be sent again into solitary confinement. Both feared the rumours in the West of communist brainwashing. From 1959 to 1969 they were allowed to read noncommunist books and articles, but were required to attend daily studies and discussions of the works of Marx, Lenin, Mao and the Chinese Communist Party principles and doctrines. Both men were happy for the human interaction and to have something to pass the time. Fecteau said: ‘I began to understand how they thought and what they meant when they said this or that to me.’20 In 1958, the mother and brother of Downey and the mother of Fecteau were allowed to visit them. In response to the Nixon administration’s willingness to improve relations with Beijing, China released Fecteau in December 1971, the year the US trade sanctions were lifted and Kissinger visited Mao. Fecteau was taken to the Hong Kong border in December 1971, but he kept expectations low, warning

AFTERMATH

337

himself that this move could be yet another psychological ‘whipsaw’ of his captors. On 9 December 1971, Fecteau was taken in front of a tribunal and informed that he was about to be freed. He asked if Downey was to be released also, but the reply was negative because of his ‘more serious’ crime against the People’s Republic of China. In any case, they allowed him to leave some of his belongings to his comrade. Fecteau was taken by train to Canton. He was led to the Lo Wu bridge. He walked slowly. At the other end of the bridge, a British officer was waiting for him. He greeted him and offered him a cigarette and a beer. After 19 years and 14 days, Fecteau was free. In his turn, Downey was informed that his life sentence had been reduced to five years from the date of the tribunal’s decision. He was deeply disappointed. The Sino-American talks continued, but the stroke of his mother in 1973 was the catalyst for his release. Nixon himself appealed to Mao to release Downey on humanitarian grounds. On 12 March, Downey crossed the bridge to Hong Kong. A British soldier saluted him. He was free after 20 years, 3 months and 14 days in prison. Both served with the CIA until their retirement a couple of years later. In 2002 the Chinese government allowed a US Defense Department team search the area of the downed C47. In June 2004, the team discovered bone and tooth fragments identified as Robert Snoddy’s. The remains of Schwartz were not located.21 In 1998, George Tenet, the CIA director in the Clinton administration, honoured Downey and Fecteau, commending them for their ‘extraordinary fidelity’, remarking: ‘Like it or not, you are our heroes’. Downey answered for the two of them: ‘We’re at the age where, if you want to call us heroes, we’re not going to argue anymore, [but] we know better.’22 Both agents, Downey and Fecteau, unprepared and untrained to cope with imprisonment, survived simply because they never gave up hope that one day they would be free.

NOTES

Introduction

Suspect Everyone

1. Smith, W. Thomas, Encyclopedia of the Central Intelligence Agency (New York: Infobase Publishing, 2003), p. 17. 2. Eastman, Lloyd D. ‘Who Lost China? Chiang Kai-shek Testifies’ The China Quarterly, No. 88 (December 1981), p. 663. 3. Elphick, Peter, Far Eastern File: The Intelligence War in the Far East, 1930– 45 (London: Coronet, 1997), p. 54. 4. Marks, Thomas A. Counterrevolution in China: Wang Sheng and the Kuomintang (London: Routledge, 2014), p. 86. 5. Article in commemoration of the ninetieth birthday of Dr. Sun Yat-sen, 12 November 1956. Available at: ,https://www.marxists.org/reference/ archive/mao/selected-works/volume-5/mswv5_55.htm. accessed 15 January 2015. 6. Sun Yat-sen, Kidnapped in London (1897); McCoy, Gerald, The Most Fundamental Legal Right: Habeas Corpus in the Commonwealth (Oxford: Oxford University Press 2000), p. 162; Bickers, Robert, The Scramble for China: Foreign Devils in the Qing Empire, 1832– 1914 (London: Penguin, 2012), p. 334. 7. Wilbur, Clarence Martin & Lien-ying How, Julie, Missionaries of Revolution: Soviet Advisers and Nationalist China, 1920 – 1927 (Cambridge, Mass: Harvard University Press, 1992), p. 21. 8. Pakula, Hannah, The Last Empress: Madame Chiang Kai-shek and the Birth of Modern China (New York: Simon & Shuster, 2010), p. 62. 9. Jeffery, Keith, MI6: The History of the Secret Intelligence Service, 1909 – 1949 (London: Bloomsbury, 2010) p. 33; See Kirby William, Germany and Republican China (Stanford CA: Stanford University Press, 1984); Ratenhof Udo, Die Chinapolitik des Deutschen Reiches 1871 – 1945 (Boppard am Rhein: Harald Boldt, 1987). 10. Wilbur, & Lien-ying, Missionaries of Revolution, p. 21.

NOTES

TO PAGES

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11. Gao Wenquin, Zhou Enlai: The Last Perfect Revolutionary – A Biography (New York: Public Affairs, 2007), pp. 30 – 1. 12. See Tony Saich, The Origins of the First United Front in China: The Role of Sneevliet (alias Maring) (Leiden: Brill, 1991). 13. Wilbur, & Lien-ying, Missionaries of Revolution, p. 61. 14. Gao Wenquin, Zhou Enlai, p. 51. 15. Who is Who, General Staff report, January 1927, CAB 24/184 The National Archives (TNA). 16. Jeffery, MI6, p. 257. 17. Quoted in Pantsov & Levine, Mao: The Real Story, p. 115. 18. Jeffery, MI6, p. 259. 19. Ibid., pp. 258 – 59. 20. 12(27)1 Policy towards Russia. 18 February 1927, CAB 23/54 TNA. 21. Meeting minutes, 30 May 1925. CAB 23/150 TNA. 22. Best, Anthony, ‘“We are Virtually at War with Russia”: Britain and the Cold War in East Asia, 1923 –40.’ Cold War History, Vol. 12, No. 2 (May 2012), pp. 205– 225. 23. Yu Yuzhang, Recollections of the Revolution of 1911: A Great Democratic Revolution of China (New York: University Press of the Pacific, 2001), pp. 100– 1. 24. Wakeman, Frederic Jr, Spymaster: Dai Li and the Chinese Secret Service (Berkely: University of California Press, 2003), p. 454n.5. 25. Spence, Jonathan, D. The Search for Modern China (New York: W.W. Norton & Company, 1991), pp. 312, 316 – 17, 324; see also Jacobs D.N. Borodin: Stalin’s Man in China (Stanford CA: Stanford University Press, 1985). 26. Draft project of the organization of the School of Counter-espionage and Intelligence Service in Kwantung, 14 December 1925 (the organization approved on 25 November 1925) in Wilbur & Lien-ying, Missionaries of Revolution, pp. 560 –561. 27. Kuznetsov, Ilya I. ‘KGB General Naum Isakovich Eitingon (1899– 1981)’ Journal of Slavic Military Studies, Vol. 14, No. 1 (March 2001), pp. 37 – 52. 28. Gao, Zhou Enlai, p. 53. 29. Taylor, Jay, The Generalissimo: Chiang Kai-shek and the Struggle for Modern China (Cambridge, MA: Belknap Press, 2009), pp. 26 – 66; Fenby, Jonathan, Generalissimo: Chiang Kai-shek and the China He Lost (New York: Free Press 2005), pp. 59 – 113. 30. ‘Borodin’ KV 2 /3037 TNA.

Chapter 1

Spies Unleashed

1. Seagrave, Sterling, The Soong Dynasty: The Extraordinary Story of One Family’s Domination of China on the 20th Century (New York: Gorgi, 1983), pp. 221– 5.

340

NOTES TO PAGES 14 –25

2. Jacobs, Dan N., Borodin Stalin’s Man in China (Cambridge, Mass: Harvard University Press 1981), p. 198. 3. Seagrave, The Soong Dynasty, pp. 221– 225. 4. Taylor, The Generalissimo, p. 66. 5. Ibid., pp. 66 – 8. 6. Xuezhi Guo, China’s Security State: Philosophy, Evolution, and Politics (Cambridge: Cambridge University Press, 2012), p. 5. 7. See Jacobs Dan, Borodin. Stalin’s Man in China (Cambridge MA: Harvard University Press, 1981). 8. Xuezhi, China’s Security State, pp. 45, 306. 9. Byron, John & Pack, Robert, The Claws of the Dragon: Kang Sheng: The Evil Genius Behind Mao And His Legacy of Terror in People’s China (New York: Simon & Schuster, 1992), pp. 38, 40, 103. 10. Stranahan, Patricia, Underground: The Shanghai Communist Party and the Politics of Survival, 1927– 1937 (New York: Rowman & Littlefield, 1998), p. 35. 11. Ibid., p. 33. 12. Taylor, The Generalissimo, p. 52. 13. Wakeman, Spymaster, p. v. 14. Ibid., pp. 36 – 8. 15. Ibid., p. 42. 16. Ibid., pp. 57, 63. 17. Ibid., p. 91. 18. Ibid., pp. 110 – 12. 19. Byron & Pack, The Claws of the Dragon, pp. 84, 92. 20. Ibid., p. 94. 21. Xuezhi, China’s Security State, p. 310. 22. Byron & Pack, The Claws of the Dragon, p. 96. 23. Ibid., p. 97. 24. Ibid., p. 98. 25. MacKinnon, Janice R., & MacKinnon, Stephen R., Agnes Smedley: The Life and Times of an American Radical (Berkeley: University of California Press, 1988), p. 157. 26. Barnouin, Barbara and Yu Changgen, Zhou Enlai: A Political Life (Hong Kong: Chinese University of Hong Kong, 2006), pp. 46– 7. 27. Xuezhi, China’s Security State, pp. 309– 10. 28. Ibid., p. 310n.50. 29. Wakeman, Spymaster, p. 90. 30. Xuezhi, China’s Security State, pp. 13, 27. 31. Ibid., pp. 12 – 13. 32. Ibid., p. 44. 33. Taylor, The Generalissimo, p. 72. 34. Chambers, ‘A “lantern in the dark night”’, p. 208. 35. West, Nigel & Tsarev, Oleg, The Crown Jewels: The British Secrets Exposed by the KGB Archives (London: HarperCollins, 1999), p. 23.

NOTES

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36. Vul, Nikita, ‘He, Who Has Sown the Wind: Karakhan, the Sino-Soviet conflict over the Chinese Eastern Railway, 1925– 26, and the failure of Soviet policy in northeast China’ Modern Asian Studies Vol. 48, Issue 6 (2014), pp. 1670– 94. 37. Taylor, The Generalissimo, pp. 86 – 87; Felix Patrikeeff, Russian Politics in Exile: The Northeast Asian Balance of Power, 1924– 1931 (Basingstoke: Palgrave, 2002); see George Alexander Lensen, The Damned Inheritance. The Soviet Union and the Manchurian Crises. 1924– 1935 (Ann Arbor 1974). 38. Chambers, ‘A “lantern in the dark night”’, p. 209. 39. 周恩来在上海画传 (‘Zhou Enlai in Shanghai painting Biography’). Available at , http://dangshi.people.com.cn/GB/85039/9597625.html. accessed 20 January 2015 40. Wakeman, Frederic, Policing Shanghai, 1927– 1937 (Berkeley CA: University of California Press, 1995), p. 152. 41. 顾顺章 – 生平梗概 (‘Gu Shunzhang – Life Synopsis’) Available at: , http:// www.baike.com/wiki/%E9%A1%BE%E9%A1%BA%E7%AB%A0. accessed 1 February 2015. 42. Wakeman, Policing Shanghai, pp. 153– 4. 43. Ibid., pp. 157 – 61. 44. Byron & Pack, The Claws of the Dragon, pp. 101 –2. 45. Wakeman, Spymaster, p. 273; 周恩来在上海画传 (Zhou Enlai in Shanghai painting Biography’). Available at: , http://dangshi.people.com.cn/GB/ 85039/9597625.html. accessed 20 January 2015. 46. Braun, Otto, A Comintern Agent in China, 1932– 1939 (Stanford CA: Stanford University Press, 1982), p. 79. 47. Wakeman, Policing Shanghai, p. 154. 48. Ibid., p. 157. 49. Byron & Pack, The Claws of the Dragon, pp. 106 –7. 50. Ibid., pp. 110 – 11. 51. Philip Short, Mao: A Life, pp. 281– 282; Wakeman, Spymaster, p. 466n.82. 52. 顾顺章 – 生平梗概 (‘Gu Shunzhang – Life Synopsis’). 53. Wakeman, Spymaster, p. 199. 54. Byron & Pack, The Claws of the Dragon, pp. 149 –150. 55. Ibid., pp. 152 – 3. 56. Ibid., p. 177. 57. Ibid., p. 154. 58. Ibid., p. 155.

Chapter 2 Failed Campaigns 1. Taylor, The Generalissimo, p. 88. 2. Lew, Christopher R., The Third Chinese Revolutionary Civil War, 1945– 49: An Analysis of Communist Strategy and Leadership (New York: Routledge, 2009), pp. 6 – 8.

342 3. 4. 5. 6. 7. 8. 9. 10. 11.

12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

24. 25. 26. 27. 28. 29.

NOTES

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33 – 43

Chambers, ‘A “lantern in the dark night”’, p. 212. Ibid., p. 212. Ibid. Ibid., p. 213. Taylor, The Generalissimo, pp. 97 – 8. Chambers, ‘A “lantern in the dark night”’, pp. 215–16. Ibid., pp. 210 – 11. Ibid., p. 216. Arthur, Max, ‘Obituary: Lt-Col Raymond Durie of Durie’, The Independent, 21 January 1999, available at: , http://www.independent.co.uk/artsentertainment/obituary-ltcol-raymond-durie-of-durie-1088592.html. accessed 15 May 2015. Lieutenant Dewar-Durie to Military attache´, Peking, 23 November 1933, p. 2, WO 106/5312 TNA. Ibid. Cover note to MI2, 1 February 1934, p. 1, WO 106/5312 TNA. Lieutenant Dewar-Durie to Military attache´, Peking, 23 November 1933, p. 24, WO 106/5312 TNA. Ibid., p. 25. Ibid. Ibid., p. 26. Ibid., pp. 37 – 8. Ibid., p. 38. Chambers, ‘A “lantern in the dark night”’, p. 217. Ibid., p. 218. ‘Mo Xiong’. Available at: ,http://en.wikipedia.org/wiki/Mo_Xiong.; accessed 1 December 2014; 英雄无语话莫雄—郭国胜 (‘Silent Hero Mo Xiong’s words’). Available at: ,http://www.oklink.net/online/tougao/128931/300894. htm. accessed 12 December 2014; 送绝密情报的奇人奇功莫雄与项与年 (‘Outstanding service of Mo Xiong to send top-secret intelligence’). Available at: ,http://dangshi.people.com.cn/n/2013/0815/c85037-22572055.html. accessed 7 December 2014. Seagrave, The Soong Dynasty, p. 322; Hauser Ernest, Shanghai: City for Sale (New York: Harcourt Brace, 1940), p. 232. Xuezhi, China’s Security State, pp. 42 –3. Wakeman, Spymaster, p. 232. Ibid., p. 492n.11. Chambers, ‘A “lantern in the dark night”’, p. 220. Elphick, Far Eastern File, pp. 65 – 7.

Chapter 3

Shadowing the Comintern

1. ‘Borodin’ KV 2/3037 TNA. 2. Jacobs, Borodin, p. 249.

NOTES

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343

3. ‘Borodin’ KV 2/3037 TNA. 4. Extracts on Pick, 12 May 1948; 25 May 1948 all in KV 2/1895 TNA. 5. Maochen Yu ‘Chen Hansheng’s Memoirs and Chinese Communist Espionage’ Cold War International History Project Bulletin, Issue 6 – 7 1995/96, p. 274. 6. Jeffery, MI6, p. 251. 7. Ibid., p. 259. 8. Ibid., p. 261. 9. Ibid., pp. 257, 261– 2. 10. Notes on the Noulens case, KV 2/2562 TNA; Baxter, Christopher, ‘The Secret Intelligence Service and China: The Case of Hilaire Noulens, 1923 –1932’ in Baxter, Christopher, Dockrill, Michael, Hamilton, Keith, Hamilton, eds. British Foreign Policy: Essays in Memory of Saki Ruth Dockrill, Vol. I (Basingstoke: Palgrave Macmillan, 2013), pp. 138 – 139. 11. Report of 7 March 1932, FO 1093/92 TNA; ibid, 140. 12. Report of 7 March 1932, FO 1093/97; FO 1093/99; FO 1093/96 TNA; ibid, pp. 143, 146. 13. Notes on the Noulens case, KV 2/2562 TNA, pp. 2– 3. 14. Ibid., p. 147. 15. Jeffery, MI6, p. 267. 16. Rose, R.S. and Gordon D. Scott, Johnny: A Spy’s Life (University Park PA: Pennsylvania University Press, 2010), pp. 179 – 181. 17. Ibid., p. 181. 18. Ibid., p. 183. 19. Ibid., p. 187. 20. Ibid. 21. Ibid., pp. 188 – 92. 22. Ibid., pp. 198 – 9. 23. Ibid., p. 199. 24. Ibid., pp. 204 – 5; Jeffery, MI6, pp. 269– 71. 25. Hornstein, David P. and Wolfgang Brezinka, Arthur Ewert: A Life for the Comintern (London: University Press of America 1993), pp. 135 – 9. 26. Andrew, Christopher, The Defence of the Realm: The Authorized History of MI5 (London: Penguin, 2010), p. 136. 27. Pincher, Chapman, Their Trade is Treachery (London, Sidgwick & Jackson, 1981), p. 52; Costello, John, Mask of Treachery: Spies, Lies & Betrayal (New York: Harper Collins, 1988), p. 316. 28. Ruth, Price, The Lives of Agnes Smedley (New York: Oxford University Press, 2005), pp. 103, 160, 179– 80. 29. Intelligence bureau (Home Department, Government of India), 24 December 1931 KV 2/2207 TNA. 30. Valentine Vivian (VV) to Harker, 1 July 1931, KV 2/2207 TNA. 31. Report on Documents seized on raid on LAI offices in Berlin, 31 October 1933 KV 2/2207 TNA. 32. Lidell to VV, 15 December 1931, KV 2/2207 TNA.

344

NOTES

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54 –60

33. Miller to VV, 12 May 1933, KV 2/2207 TNA. 34. ‘Brungin & Ed Scott’ Cross Reference Report, 15 October 1935, KV 2/2207 TNA. 35. Agnes Smedler/ Brundin ’Cross Reference Report 21 March 1936, KV 2/2207 TNA. 36. Letter to Vivian Valentine, 18 April 1936, KV 2/2207 TNA. 37. ‘Brundin Agnes Smedley’ SIS Cross Reference Report 8 April 1936 KV 2 /2207. 38. Extract 30 April 1949 originated in Krivitsky, July 1940, KV 2/2207 TNA.

Chapter 4 Lawrence of Manchuria 1. Sieg, Linda, ‘Japan PM sends offering to war dead shrine, angering China’, 17 October 2014. Available at: , http://www.reuters.com/article/2014/10/17/usabe-yasukuni-idUSKCN0I52VF20141017. accessed 12 January 2015; Ryall, Julian, ‘Japanese nationalists ‘worshipping’ at temple to war criminals’ 1 April 2010. Available at: ,http://www.telegraph.co.uk/news/worldnews/asia/japan/ 7542920/Japanese-nationalists-worshipping-at-temple-to-war-criminals.html. accessed 15 January 2015; Ryall, Julian, ‘Yasukuni Shrine: the 14 “Class A” war criminals honoured by Japan’ 15 August 2014. Available at: ,http://www. telegraph.co.uk/news/worldnews/asia/japan/11031805/Yasukuni-Shrine-the14-Class-A-war-criminals-honoured-by-Japan.html. accessed 20 January 2015. 2. Weland, James, ‘Misguided Intelligence: Japanese Military Intelligence Officers in the Manchurian Incident, September 1931’, Journal of Military History, Vol. 38 (July 1994), p. 451. 3. Andrew, Christopher & Mitrokhin, Vasili, The Mitrokhin Archive: The KGB in Europe and the West (London: Allen Lane, 1999), pp. 48 –9. 4. Ibid. 5. ‘Soviet Penetration Methods in Manchuria (1939) and Finland (1944)’, p. 1, RG 226 Entry 212 Box 8 WN 24486 NARA. 6. Weland, James, ‘Misguided Intelligence: Japanese Military Intelligence Officers in the Manchurian Incident, September 1931’, Journal of Military History, Vol. 38 (July 1994), p. 449. 7. Ibid., p. 454. 8. Ibid., pp. 456 – 8. 9. Ibid., p. 457. 10. Ibid.; Wilson, Sandra, The Manchurian Crisis and Japanese Society, 1931– 33 (London: Routledge, 2001); Young, Louise, Japan’s Total Empire: Manchuria and the Culture of Wartime Imperialism (Berkeley CA: University of California 1999), p. 39. 11. Weland, ‘Misguided Intelligence’, p. 457. The Cambridge History of Japan Vol. 6, The Twentieth Century (Cambridge: Cambridge University Press 1988), pp. 295 – 6.

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345

12. Pu Yi, Henry (author) & Kramer, Paul (editor), The Last Manchu: The Autobiography of Henry Pu Yi, Last Emperor of China (New York: Skyhorse Publishing, 2010), pp. 128– 40. 13. Wakeman, Shanghai Badlands, p. 146. 14. Pu Yi & Kramer, The Last Manchu, pp. 144– 5. 15. Ibid., pp. 146 – 7. 16. Ibid., pp. 147 – 9. 17. Bisher, Jamie, White Terror: Cossack Warlords of the Trans-Siberian (New York: Routledge, 2005), p. 359. 18. Taylor, The Generalissimo, p. 93. 19. Ibid., p. 94. 20. Weland, ‘Misguided Intelligence’, p. 458. 21. Zhu Aijin, Feminism and Global Chineseness: The Cultural Production of Controversial Women Authors (Youngstown: Cambria Press, 2007), p. 254. 22. Weland, ‘Misguided Intelligence’, p. 458; Elphick, Far Easten file, p. 62. 23. Pu Yi, From Emperor to Citizen: The Autobiography of Aisin-Gioro Pu Yi. Translated by William John Francis Jenner (Oxford: Oxford University Press, 1988), pp. 275– 6, 288– 90, 298, 281, 284– 320. 24. Dan Shan, ‘Princess, Traitor, Soldier, Spy: Aisin Gioro Xianyu and the Dilemma of Manchu Identity’ in Tamanoi, Mariko Asano ed., The Crossed Histories: A New Approach to Manchuria in the Age of Empire (Honolulu: Association for Asian Studies & University of Hawai’i Press, 2005), pp. 83– 118. 25. Bernstein, Richard, China 1945: Mao’s Revolution and America’s Fateful Choice (New York: Knopf, 2014), p. 53; Seagrave, The Soong Dynasty, p. 305. 26. Wakeman, Spymaster, p. 322. 27. Seagrave, The Soong Dynasty, pp. 306– 7. 28. Fairbank, Chinabound, p. 36. 29. Price, The Lives of Agnes Smedley, p. 231. 30. Wakeman, Policing Shanghai, p. 193. 31. Taylor, The Generalissimo, p. 99. 32. ‘Japanese Specialists on Soviet Intelligence’ July 1946, p. 3, RG 226 Entry 212 Box 8 WN 24486 NARA. 33. ‘Onouchi, Major General Hirose, and Hirose, Colonel Eiichi- Biographical sketches of’, 25 September 1946, p. 2, RG 226 Entry 212 Box 8 WN 24486 NARA. 34. Ibid., p. 3. 35. ‘Japanese Specialists on Soviet Intelligence’ July 1946, pp. 2 – 3, RG 226 Entry 212 Box 8 WN 24486 NARA. 36. Ibid., p. 3.

Chapter 5 The Unparalleled Intelligence Failure 1. Taylor, The Generalissimo, pp. 122– 3. 2. Ibid., pp. 125 – 6.

346 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

29.

30. 31.

NOTES

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69 –78

Ibid. Seagrave, The Soong Dynasty, p. 349. Taylor, The Generalissimo, p. 127. Ibid. Ibid., p. 128. Seagrave, The Soong Dynasty, pp. 350– 1. December 19, 1936 diary entry, quoted in Bae Kyounghan, ‘Chiang Kai-shek and Christianity: religious life reflected from his diary’ Journal of Modern Chinese History, Vol. 3, No. 1, June 2009, p. 4. Quoted in ibid., p. 5. Wen-Hsin Yeh, ‘Dai Li and the Liu Geqing Affair: Heroism in the Chinese Secret Service During the War of Resistane’ The Journal of Asian Studies, Vol. 48, No. 3 (August 1989), p. 548. Taylor, The Generalissimo, p. 133. Soong Chingling to Wang Ming, January 26, 1937 in Seagrave, The Soong Dynasty, p. 623n.160. Taylor, The Generalissimo, p. 135. See Seagrave, Sterling, The Soong Dynasty (London: Corgi Books, 1996). Taylor, The Generalissimo, pp. 134– 7. Knatchbull-Hugessen to Cadogan, 3 March 1937, pp. 2 – 3, FO 800/294 TNA. Ibid., p. 3. Ibid., p. 5. Cadogan to Knatchbull-Hugessen, 20 April 1937, FO 800/294 TNA. Taylor, The Generalissimo, p. 145. ‘The Far East: China and Japan’ Cabinet meeting held at No. 10, Downing Street, S.W.I., on Wednesday, 14th July, 1937, CAB 23/89 TNA. Meier, Andrew, The Lost Spy: An American in Stalin’s Secret Service (New York: W.W. Norton, 2008), p. 196. Ibid., pp. 90 – 127, pp. 143– 66, 189– 223, 224– 67. Wakeman, Spymaster, pp. 243– 244. Wakeman, Shanghai Badlands, pp. 19– 21. Ibid., p. 153. Tsang, Steve, ‘Chiang Kai-shek’s “secret deal” at Xian and the start of the Sino-Japanese War’ Palgrave Communications, 20 January 2015, available at: ,www.palgrave-journals.com/articles/palcomms20143. accessed 12 April 2015. Baxter, Christopher ‘Outrage on the Road to Shanghai: Sir Hugh KnatchbullHugessen and Anglo-Japanese Relations in the 1930s’ in Otte T.G.(ed.), Diplomacy and Power: Studies in Modern Diplomatic Practice – Essays in Honour of Keith Hamilton (Dordrecht: Republic of Letters Publishing, 2012), pp. 133 – 154; Knatchbull-Hugessen, Hughe Montgomery, Diplomat in peace and war (London: J. Murray, 1949), pp. 120– 1. Taylor, The Generalissimo, p. 150. Byron & Pack, The Claws of the Dragon, p. 19.

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78 – 83

347

32. Timothy Brook, Documents on the Rape of Nanking (Ann Arbor: University of Michigan Press, 1999); Daqing Yang, ‘The Challenges of the Nanjing Massacre: Reflections on Historical Inquiry,’ in Fogel Joshua A. ed. The Nanjing Massacre in History and Historiography (Berkeley: University of California Press, 2000), pp. 133 – 79; Iris Chang, The Rape of Nanking: The Forgotten Holocaust of World War II (New York: Basic Books, 1997). 33. Taylor, The Generalissimo, p. 153. 34. Ibid., p. 154. 35. Ibid., p. 155; Lary, Diana, ‘“Drowned Earth”: The Strategic Breaching of the Yellow River Dyke, 1938’ War in History, Vol. 2001, No. 2, April 2001, pp. 191– 207. 36. Taylor, The Generalissimo p. 143; see Harmsen, Peter, Shanghai 1937: Stalingrad on the Yangtze (Oxford: Casemate Books, 2013). 37. Yardley, Herbert O., The Chinese Black Chamber: An Adventure in Espionage (London: New English Library 1984), pp. 77 – 8. 38. Coox, Alvin D., ‘The Lesser of Two Hells: NKVD General G.S. Lyushkov’s Defection to Japan, 1938–1945, part I’, The Journal of Slavic Military Studies Vol. 11 Issue 3 (1998), pp. 145–86; Coox, Alvin D., ‘The Lesser of Two Hells: NKVD General G.S. Lyushkov’s Defection to Japan, 1938–1945, part II’ The Journal of Slavic Military Studies Vol. 11 Issue 4 (1998), pp. 72–110. 39. Hiroaki Kuromiya, ‘The Mystery of Nomonhan, 1939’ Journal of Slavic Military Studies, Vol. 24, Issue 4 (2011), p. 665; the standard work on Nomonhan: Coox, Alvin D. Nomonhan: Japan Against Russia, 1939 (Stanford: Stanford University Press, 1985). 40. Hiroaki Kuromiya, ‘The Mystery of Nomonhan, 1939’, p. 667. 41. Ibid., p. 669. 42. Ibid., pp. 670 – 1.

Chapter 6 1. 2. 3. 4. 5. 6.

Rogue Spymasters

Wakeman, Shanghai Badlands, p. 48. Taylor, The Generalissimo, p. 170. Wakeman, Spymaster, pp. 337– 8. Ibid., pp. 182 – 4. Kershaw, Ian, Hitler Vol. 1: 1889 –1936 Hubris, pp. 426– 7. Andrew, Christopher & Mitrokhin, Vasili, The Mitrokhin Archive: The KGB in Europe and the West (London: Allen Lane 1999), p. 124; Wasserstein, Bernard, Secret War in Shanghai: Espionage, Intrigue and Treason in World War II (Boston: Houghton Mifflin Company, 1999), p. 71; Taylor, The Generalissimo, p. 156; Russian paper Trud (March 14, 2000, no. 46) article on Stennes by Colonel Alexander Pronin; Uwe Klußmann, ‘SA-Fu¨hrer Stennes Von Hitlers Haudrauf zu Stalins Spion’ available at: , http://www.spiegel.de/einestages/ walter-stennes-sa-fuehrer-und-spion-fuer-stalin-a-947674.html. accessed 20 August 2014.

348

NOTES

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84 –92

7. Report by Counter Intelligence Corps (G-2) on the suicide of one Frau Margarete Borkenhagen, 13 March 1946, RG 226 Entry 214 BOX 2 WN 21102 NARA. 8. Wen-Hsin Yeh, ‘Dai Li and the Liu Geqing Affair’, p. 547. 9. Donal O’Sullivan, Dealing with the Devil: Anglo-Soviet Intelligence Cooperation During the Second World War (New York: Peter Lang, 2010), pp. 19, 30. 10. Wen-Hsin Yeh, ‘Dai Li and the Liu Geqing Affair’, p. 551. 11. Ibid.; Wakeman, Shanghai Badlands, pp. 63 – 4. 12. Ibid., p. 552; Wakeman, Shanghai Badlands, p. 99. 13. Martin, Brian, ‘Shield of collaboration: The Wang Jingwei regime’s security service, 1939– 1945’, Intelligence and National Security, Vol. 16, No. 4 (2001), p. 91. 14. Ibid., p. 92. 15. Ibid., p. 93. 16. Ibid., p. 94. 17. Ibid. 18. Ibid., p. 95. 19. Ibid. 20. Ibid., p. 97. 21. Ibid. 22. Wakeman, Spymaster, p. 130. 23. Ibid., p. 207. 24. Yu, OSS in China, pp. 37,45, 290n.67. 25. Martin, ‘Shield of collaboration’, pp. 98 –9. 26. Ibid., p. 101. 27. Ibid., p. 102. 28. Ibid., pp. 103 – 4. 29. Wakeman, Shanghai Badlands, pp. 119 –20. 30. Ibid., pp. 121– 3; ‘Terrorist Bombs Kill 10, Hurt 56 in Shanghai Banks’ Chicago Tribune, 25 March 1941. 31. Kitson to Sir Archibald Clark Kerr, 8 April 1941, FO 371/27735 TNA. 32. Martin, ‘Shield of collaboration’, pp. 103 –4. 33. Wen-Hsin Yeh, ‘Dai Li and the Liu Geqing Affair’, pp. 553 – 4. 34. Ibid., p. 555. 35. Ibid., pp. 555 – 6. 36. Ibid., pp. 556 – 7. 37. Taylor, The Generalissimo, p. 157. 38. Ibid., p. 171. 39. Wakeman, Spymaster, p. 137. 40. Ibid., pp. 148 – 9. 41. Ibid., p. 147. 42. Ibid., p. 148. 43. Martin, ‘Shield of collaboration’, p. 107. 44. Ibid., p. 108.

NOTES TO PAGES 93 –102

349

Chapter 7 Learning the Ropes of Espionage 1. Blankfort, Michael, The Big Yankee: The Life of Carlson of the Raiders (Boston: Little, Brown & Co, 1947), p. 153. 2. Ibid., pp. 153 – 5. 3. Sulick, Michael J. Spying in America: Espionage from the Revolution to the Dawn of the Cold War (Georgetown: Georgetown University Press, 2012), pp. 156– 60. 4. See Ballendorf, Dirk Anthony and Merrill L. Bartlett, Pete Ellis: An Amphibious Warfare Prophet 1880 – 1923 (Annapolis: Naval Institute Press, 2010). Ballendorf, Dirk Anthony, ‘Earl Hancock Ellis: A Marine in Micronesia’ Micronesian Journal of the Humanities and Social Sciences, Vol. 1, Nos 1 – 2, December 2002, pp. 9 – 17. 5. Nobel, Dennis L. ‘Operations in Another Time: A US Naval Intelligence Mission to China in the 1930’s’ Studies in Intelligence, Vol. 50, No. 2, 2006. Available at: ,https://www.cia.gov/library/center-for-the-study-of-intelligence/ csi-publications/csi-studies/studies/vol50no2/html_files/Mission_China_3. htm. accessed 8 December 2014. 6. Buntin, John, L.A. Noir: The Struggle for the Soul of America’s Most Seductive City (New York: Broadway Books, 2010), pp. 136– 7. 7. Blankfort, Michael. The Big Yankee, pp. 186– 7; see Carlson’s memoirs: Twin Stars Of China: A Behind-the-Scenes Story Of China’s Valiant Struggle For Existence By A U.S Marine Who Lived And Moved With The People (New York: Dodd, Mead & Co., 1940). 8. Blankfort, The Big Yankee, pp. 229– 30. 9. Carlson, Twin Stars of China, p. 77. 10. Ibid., pp. 166 – 71. 11. Blankfort, The Big Yankee, p. 257.

Chapter 8

The ‘C’

1. Letter of Sinclair 3 November 1939 in Jeffery, MI6, p. 329. 2. ‘Arrest and detention of Lieutenant-Colonel C.R. Spear, British Military Attache´, by the Japanese’ WO 208/289; Best, Anthony, British Intelligence and the Japanese Challenge in Asia, 1914– 1941 (New York: Palgrave Macmillan, 2002), pp. 157– 8. 3. Aldrich, Richard J., ‘Britain’s Secret Intelligence Service in Asia during the Second World War’, Modern Asian Studies, Vol. 32, No. 1 (Feb. 1998), pp. 184– 5. 4. Wing Commander Wigglesworth (AI2), ‘Notes on the tour of RAF and Combined Service Intelligence Organisations in the Far East’, Part V: Shanghai, 30 June 1938, AIR 20/374, TNA. 5. Aldrich, Richard J., ‘Britain’s Secret Intelligence Service in Asia during the Second World War’, pp. 184– 185.

350 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.

36.

NOTES

TO PAGES

102 –111

Philby, Kim, My Silent War (London: MacGibbon and Key, 1968), p. 77. Jeffery, MI6, p. 469. Ibid., pp. 470 – 1. Christopher Andrew, ‘Sinclair, Sir Hugh Francis Paget (1873 – 1939)’, rev. Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004; online edn, May 2008). Jeffery, MI6, pp. 328– 31. All quoted in Dorril, Stephen, MI6: Fifty Years of Special Operations (London: Fourth Estates, 2000) p. 5. Aldrich, Richard, GCHQ: The Uncensored Story of Britain’s Most Secret Intelligence Agency (London: Harper Press 2011), p. 24. Jeffery, MI6, p. 471. Ibid., p. 472. C. in C. FE to COS, 6 June 1941, WO 193/920, TNA in Aldrich, Richard J. ‘Britain’s Secret Intelligence Service in Asia during the Second World War’, Modern Asian Studies, Vol. 32, No. 1 (February 1998), pp. 187 – 8. C. in C. FE to COS, 6 June 1941, WO 193/920, TNA. Ibid. ‘British Intelligence in Manchuria prior to December, 1941’ 5 March 1945, RG 226 Entry 211 Box 32 WN 20139 NARA. Wakeman, Spymaster, p. 282. Ibid., pp. 282 – 3. FO 371/24696 TNA 30-1.1940 F 709/G 8.2.1940 in Wakeman, Spymaster, p. 508n.26. Gillies, Donald, Radical Diplomat: The Life of Archibald Clark Kerr, Lord Inverchapel, 1882– 1951 (London: I.B.Tauris, 1999), pp. 111– 13. Ibid., pp. 140, 199, 217. GOC Hong Kong to War Office, 15 October 1940, FO 371/24704 TNA. GOC Hong Kong to War Office, 23 October 1940, FO 371/24704 TNA. Xuezhi Guo, China’s Security State, p. 326. ‘Summary of Agreement between British SOE and American SO’, HS 1/165 TNA. Wakeman, Shanghai Badlands, pp. 78– 9. Ibid., pp. 101 – 2. Elphick, Far Eastern File, pp. 274– 7. Ibid., p. 277. Ibid. Yu, OSS in China, p. 15. Jeffery, MI6, p. 574. RII (history brief), HS 1/165 TNA; ‘John Philip Albert Galvin Clifford’ HS9/16176/4 TNA. ‘Phyllis Harrop’ G-2 Counter-intelligence section chief of X-2 Branch, SSU China Theatre, 15 February 1946 RG 226 Entry 216 Box 8 WN 27517 NARA; See also Harrop, Phyllis, Hong Kong Incident (London: Eyre & Spottiswoode, 1943). O/X to AD/O, 11 May 1943, HS 1/165 TNA.

NOTES 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54.

TO PAGES

111 –120

351

RII (history brief), p. 1, HS 1/165 TNA. Ibid., p. 2. Ibid., p. 3. Ibid. Ibid. Ibid., p. 5. Ibid. Ibid., p. 6. ‘RII and Chungking Liaison Mission’, AD4 to CD., 9 May 1943, HS 1/165 TNA. Jeffery, MI6, pp. 582– 83. Stevens, Keith, ‘Lt.Col. Walter Gordon Harmon, “An Old China Hand”’. Asian Affairs, Vol. 44 Issue 3 (2013), pp. 427 –9. Ibid., p. 430. Ibid., p. 433. Jeffery, MI6, p. 583. Ibid., p. 584. Ibid., p. 593. ‘Moses Mau aka Mickey Moore- British intelligence activities’ 28 September 1945, RG 226 Entry 216 Box 8 WN 27517 NARA. 26 June 1944, HS 1/291 TNA. See major works Cruickshank, C., SOE in the Far East (Oxford: Oxford University Press, 1983), p. 217; Bickers, Robert, ‘The business of a secret war: Operation ‘Remorse’ and SOE salesmanship in Wartime China’, Intelligence and National Security, Vol. 16, Issue 4, 2001.

Chapter 9 The Secret Strategy 1. February 5, 1941 diary entry in Banac, Ivo ed. The Diary of Georgy Dimitrov, 1933– 1949 (New Haven: Yale University Press, 2003), p. 147. 2. Wakeman, Spymaster, pp. 314, 323. 3. Ibid., pp. 314 – 15. 4. Yick, Joseph, ‘Communist-Puppet collaboration in Japanese-Occupied China: Pan Hannian and Li Shiqun, 1939– 43’, Intelligence and National Security, Vol. 16, No. 4 (Winter 2001), pp. 64– 7. 5. Xiaohong Xiao-Planes, ‘The Pan Hannian Affair and Power Struggles at the Top of the CCP (1953–1955)’ China Perspectives, Vol. 4, No. 2010, pp. 121–3. 6. Ibid. 7. Martin, ‘Shield of collaboration’, pp. 119 –20. 8. Ibid., p. 124. 9. Xiaohong Xiao-Planes, ‘The Pan Hannian Affair and Power Struggles at the Top of the CCP (1953– 1955)’ China Perspectives, Vol. 4, No. 2010, pp. 121 – 3; Yick Joseph, ‘Communist-Puppet collaboration in Japanese-Occupied China: Pan Hannian and Li Shiqun, 1939– 43’, Intelligence and National Security, 16:4 (2001) p. 61.

352

NOTES

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120 –128

10. van de Ven, Hans, ‘The Kuomintang’s secret service in action in South China: operational and political aspects of the arrest of Liao Chengzhi (1942)’, Intelligence and National Security, Vol. 16, No. 4 (2001), p. 209. 11. Ibid., p. 214. 12. Ibid., pp. 215 – 17. 13. Lai, Sherman Xiaogang, ‘A War Within a War: The Road to the New Fourth Army Incident in January 1941’ Journal of Chinese Military History, Vol. 2, No. 1 (2013), pp. 1– 27. 14. Wakeman, Shanghai Badlands, p. 126. 15. Martin, ‘Shield of collaboration’, p. 126. 16. Yick, ‘Communist-Puppet collaboration in Japanese-Occupied China’, pp. 73 – 4. 17. Ibid., p. 74. 18. Wakeman, Spymaster, p. 436n.74. 19. Yick, ‘Communist-Puppet collaboration in Japanese-Occupied China’, p. 72. 20. Ibid., p. 75. 21. Ibid., p. 76. 22. Martin, ‘Shield of collaboration’, pp. 134 –5. 23. Ibid., p. 136. 24. Taylor, The Generalissimo, p. 178. 25. Bernstein, China 1945, p. 213. 26. Taylor, The Generalissimo, p. 181. 27. Ibid., p. 183. 28. June 21, 1941 diary entry in Banac ed. The diary of Georgi Dimitrov, p. 165. 29. Wakeman, Spymaster, p. 522n.58. 30. Yu, OSS in China, pp. 42 –3. 31. Ibid., p. 43. 32. Ibid., pp. 187 – 88. 33. Wakeman, Spymaster, pp. 341– 2, 523n.76. 34. Yu, OSS in China, p. 43. 35. Wakeman, Spymaster, p. 342. 36. Barnouin, Barbara & Changgen Yu, Zhou Enlai: A Political Life (Hong Kong: The Chinese University Press, 2007), p. 80. 37. Glang, Nele Friederike ‘Gernamy and Chongqing: Secret Communication during WWII’ Intelligence and National Security (2014), p. 8. 38. Glang, ‘Gernamy and Chongqing’, p. 11; ‘Jahnke Kurt, Interrogation of Carl Marcus’. KV2/755 TNA. 39. Glang, ‘Gernamy and Chongqing’, p. 13. 40. Ibid., p. 14. 41. Ibid., p. 15. 42. Ibid., p. 16. 43. Ibid., p. 17. 44. Doerries, Reinhrad R. ‘Tracing Kurt Jahnke: Aspects of the Study of German Intelligence’ in Kent, George O., ed. Historians and Archivists: Essays in Modern

NOTES

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128 –137

353

German History and Archival Policy (Fairfax VA: George Mason University Press, 1991), pp. 27 – 44. 45. Taylor, The Generalissimo, p. 177. 46. Ibid.

Chapter 10 A Mole in Mao’s office 1. 沈之岳：国共潜伏阵营的“最大谜题 (Shen Yue: KMT and lurking camp‘the greatest puzzle’) Available at: ,http://view.news.qq.com/a/20140517/ 004616.htm. accessed 23 November 2014. 2. 沈之岳 (Shen Yue) [Shen Zhiyue] (Wikipedia entry) available at: ,http://zh. wikipedia.org/wiki/沈之岳. accessed 23 November 2014; 沈之岳 (Shen Yue); 沈之岳 (Shen Yue) available at: ,http://baike.baidu.com/view/1621846.htm? fr¼aladdin. accessed 27 November 2014. 3. Wakeman, Spymaster, p. 361; 沈之岳 (Shen Yue). 4. Byron & Pack, The Claws of the Dragon, p. 129. 5. Ibid., pp. 122 – 3, 125– 6, 131. 6. Ibid., p. 131. 7. Ibid., pp. 142 – 3, 150– 1. 8. Byron & Pack, The Claws of the Dragon, pp. 146 – 9; See also Ross, Terrill, Madame Mao: the white boned demon (Stanford: Stanford University Press, 1999). 9. John Gittings, John, ‘Xiong Xianghui: As a spy, he helped Mao to victory; as an envoy, he brokered the thaw with the US’ The Guardian, 26 September 2005 available at: ,http://www.theguardian.com/news/2005/sep/26/guardianobituaries. china. accessed 10 November 2014. 10. January 15, 1943 diary entry in Banac, The Diary of Georgi Dimitrov, p. 256. 11. February 11, 1943 diary entry in ibid., p. 260. 12. December 13, 1943 diary entry and letter extract to Wang ibid, p. 288. 13. December 22, 1943 diary entry and letter to Mao attached in ibid., pp. 289 – 290. 14. January 10, 1944 diary entry and Mao’s letter attached in ibid., p. 295. 15. Ibid. 16. Mitter, Rana, Forgotten Ally: China’s World War II (New York: Houghton Mifflin Harcourt, 2013), pp. 281– 2, 292–3; Byron & Pack, The Claws of the Dragon, p. 174. 17. Byron & Pack, The Claws of the Dragon, p. 198.

Chapter 11 Murderous Intrigues 1. Caldwell, Oliver J., A Secret War: Americas in China, 1944 –1945 (Carbondale & Edwardsville: Southern Illinois University Press, 1972), p. 134. 2. Ibid., p. 124.

354 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

27.

28.

NOTES

TO PAGES

137 –143

Ibid., p. 129. Ibid., p. 130. Ibid. Ibid., p. 131. Ibid., p. 132. Ibid., p. 133. Ibid., p. 134. Ibid., p. 153. Ibid., p. 90. Ibid., pp. 118 – 19. Ibid., p. 119. Memorandum by George H. White on Chinese intelligence activities in Calcutta, January 11, 1945, pp. 1 –5, RG 226 Entry 211 Box 31 NARA. Caldwell, Oliver J., A Secret War, p. 26. Ibid., p. 35. Tuchman, Barbara W., Stillwell and the American Experience in China, 1911 –45 (New York: Grove Press 1985), pp. xi, 4. White, Theodore, H. The Stilwell Papers: General Joseph W. Stilwell (New York: DaCapo, 1991), p. 197. Ibid., pp. 144 – 6. Xuezhi Guo, China’s Security State, p. 339. Dorn, Frank, Walkout with Stilwell (New York: Thomas Y. Crowell, 1971), pp. 75 – 79; Moon, Thomas H. & Carl F. Eifler, The Deadliest Colonel (New York: Vantage Press, 1975), pp. 145 – 146; Taylor, Generalissimo, pp. 257– 9. Romanus, Charles and Riley Sunderland, Stilwell’s Command Problems (Washington DC: Department of the Army, Historical Division, 1956), p. 444. Ibid., pp. 383 – 4. July 7, 1944 diary entry, quoted in Peter Chen-main Wang, ‘Chiang Kai-shek’s faith in Christianity: the trial of the Stilwell Incident’, Journal of Modern Chinese History, Vol. 8, No. 2, 2014, p. 202. Romanus and Sunderland, Stilwell’s Command Problems, pp. 385– 386. Donovan to Roosevelt, 4 May 1944 (enclosing ‘Memorandum on current news item on China’, 4 April 1944, p. 2), Franklin D. Roosevelt, Papers as President: The President’s Secretary’s file, 193301945, Safe File, Box 4, Office of Strategic Services, April –June 1944, FDR Library and Museum, available at: ,http://www.fdrlibrary.marist.edu/_resources/images/psf/psfa0054.pdf. accessed 27 October 2015. Donovan to Roosevelt, 4 May 1944 (enclosing ‘Memorandum on current news item on China’, 4 April 1944, pp. 10 – 11), Franklin D. Roosevelt, Papers as President: The President’s Secretary’s file, 193301945, Safe File, Box 4, Office of Strategic Services, April –June 1944, FDR Library and Museum, available at: ,http://www.fdrlibrary.marist.edu/_resources/images/psf/psfa0054.pdf. accessed 27 October 2015. Memorandum for the President, 19 June 1944, ibid.

NOTES

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144 –152

355

29. July 8, 1944 diary entry quoted in Wang, ‘Chiang Kai-shek’s faith in Christianity’, p. 202. 30. Ibid., p. 202. 31. July 16, 1944 diary entry quoted in ibid., p. 202. 32. July 17, 1944 diary entry, p. 203. 33. July 21, 1944 diary entry quoted in ibid. 34. Ibid., p. 205. 35. Liang, General Stilwell in China, pp. 250– 252; Taylor, The Generalissimo, p. 285. 36. Romanus & Sunderland, Stilwell’s Command Problems, pp. 446– 7. 37. September 20, 1944 diary entry quoted in Taylor, The Generalissimo, pp. 288– 289. 38. September 19, diary entry quoted in Wang, ‘Chiang Kai-shek’s faith in Christianity’, p. 206. 39. September 21, diary entry quoted in ibid. 40. September 22, diary entry quoted in ibid. 41. September 19, diary entry quoted in ibid. 42. Ibid., p. 206. 43. October 15, 1944 diary entry quoted in ibid., p. 206. 44. October 20, 1944, diary entry quoted in ibid., p. 207. 45. See Wedemeyer, Albert C., Wedemeyer Reports! (New York: Henry Holt Co., 1958); see Roberts, Andrew, Masters and Commanders: How Four Titans Won the War in the West, 1941– 1945 (New York: Harper Perennial, 2010).

Chapter 12 The Antagonists 1. To P. from C.S.S. himself, No. 828, 14 Nov. 1944, WO 203/6451. 2. Mountbatten to Wedemeyer ‘eyes alone’ (draft) presumed November 1944, ibid.), WO 203/6451 TNA. 3. Caldwell, A Secret War, pp. 97 –8. 4. Wakeman, Spymaster, p. 303. 5. Caldwell, A Secret War, p. 75. 6. Ibid., pp. 61 – 2. 7. Lt. Col. Donovan Citation, Medal of Honor. Available at: , http://www. history.army.mil//html/moh/worldwari.html#DONOVAN. accessed 2 January 2015. 8. Caldwell, A Secret War, p. 56. 9. Ibid., p. 67. 10. Smith, OSS, p. 327. 11. Yu, OSS in China, pp. 63, 158 – 9. 12. Smith, OSS, p. 327. 13. War Report of the OSS, Vol. 2, p. xvi. 14. Smith, OSS, p. 372n.67. 15. Wakeman, Spymaster, p. 317. 16. Yu, OSS in China, p. 286.

356

NOTES

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152 –160

17. Milton, Miles, E., A Different Kind of War: The Little-Known Story of the Combined Guerrilla Forces Created in China by the U.S. Navy and the Chinese During World War II (Garden City: Doubleday, 1967), p. 260; Yu, OSS in China, p. 58. 18. Yu, OSS in China, p. 89. 19. Gonzalez, David, ‘John K. Fairbank, China Scholar of Wide Influence, Is Dead at 84’ New York Times 16 September 1991. Available at: ,http://www.nytimes. com/1991/09/16/nyregion/john-k-fairbank-china-scholar-of-wide-influence-isdead-at-84.html. accessed 14 November 2014. 20. Yu, OSS in China, pp. 136 –7. 21. Ibid., p. 87. 22. Ibid., p. 191. 23. Ibid., pp. 196 – 7. 24. The Overseas Targets War Report of the OSS Vol. 2 (Washington DC: Walker and Co, 1975), p. 428. 25. Yu, OSS in China, p. 197. 26. Ibid., pp. 189 – 90. 27. Wakeman, Spymaster, p. 522n.58. 28. Yu, OSS in China, p. 270. 29. Ibid., pp. 70, 295n.37. 30. Ibid., pp. 92 – 3. 31. Wakeman, Spymaster, p. 312. 32. Ibid., p. 313. 33. WO 208/ W32, MI2 WO 208/432, in Wakeman, Spymaster, p. 313. 34. Jeffery, MI6, p. 583. 35. CPC message to Moscow, 21 May 1943, HW 17/42 TNA. 36. (JIC to SACSEA No. 92601 (MI17) 10 November 1944, WO 203/367 in Aldrich, ‘Britain’s Secret Intelligence Service in Asia during the Second World War’, p. 209. 37. To P. from C.S.S. himself, No. 828, 14 Nov. 1944, WO 203/6451; Mountbatten to Wedemeyer ‘eyes alone’ (draft) presumed November 1944, ibid.) 38. Wakeman, Spymaster, p. 511n.60; Wasserstein, Secret war in Shanghai, pp. 197 – 8. 39. Jeffery, MI6, p. 593. 40. Ibid., p. 594. 41. Ibid., p. 595. 42. Yu, OSS in China, p. 164. 43. Maochen Yu ‘Chen Hansheng’s Memoirs and Chinese Communist Espionage’ Cold War International History Project Bulletin, Issue 6 – 7 1995/96, pp. 273– 75. 44. Ibid. 45. Ibid; Gittings, John, ‘Chen Han-seng: Chinese social scientist who witnessed a century of change’, The Guardian, 1 April 2004. Available at: ,http://www. theguardian.com/news/2004/apr/01/guardianobituaries.obituaries. accessed 14 November 2014.

NOTES 46. 47. 48. 49. 50. 51.

52. 53. 54. 55. 56. 57. 58. 59. 60.

TO PAGES

161 –167

357

Yu, OSS in China, pp. 198 –9. Carter, Mission to Yenan, p. 55. Yu, OSS in China, p. 210. Ibid., pp. 211 – 13. Ibid., p. 214. SIS Political Report No. 15 to FO, 8 April 1945, WO 208/474, TNA; SIS Political Report No. 13 to FO, 3 April 1945, WO 208/474, TNA); Aldrich, Richard J. ‘Britain’s Secret Intelligence Service in Asia during the Second World War’, p. 210. SIS Political Report (CX 28100) ‘Chinese Economic Policy’, 3 July 1945, WO208/474, PRO. Memorandum by Hudson, 16 January 1946, FO 371/F324/35/10 cited in Feng, The British Government’s China Policy, p. 18. Scott, minute, 12 May 1945, FO 371/46210, quoted in Feng, The British Government’s China Policy, p. 21. Japanese Consul-General to Ministry of Foreign Affairs, Tokyo, 12 June 1945, HW 40/ 208 TNA. Ibid., 13 July 1945, HW 40/208 TNA. Report on interrogation of Colonel Nishihara Yukio by Major Ralli at the War Ministry on 2 April 1946, 5 April 1946, HW 40/208 TNA, pp. 1 – 2. Ibid., p. 3; ‘Japanese activities against Russia’, 1 August 1946, HW 40/208 TNA. The Overseas Targets War Report of the OSS Vol. 2 (Washington DC: Walker and Co, 1975), p. 447. Ibid., p. 448.

Chapter 13 The Kremlin’s Spies 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Caldwell, A Secret War, p. 27. Ibid., pp. 9, 21, 26, 139. Ibid., p. 202. June 16, 1942 diary entry, June 25, 1942 diary entry, all in Banac ed., The diary of Georgy Dimitrov, pp. 227– 8. Seagrave, The Soong Dynasty, p. 415; Barnouin, Barbara & Changgen Yu, Zhou Enlai: A Political Life (Hong Kong: The Chinese University Press, 2007), p. 80; Wakeman, Spymaster, p. 342. Caldwell, A Secret War, pp. 108– 209. Ibid., p. 115. Ibid., pp. 94 – 5. Ibid., p. 90. West, Nigel, Venona: The Greatest Secret of the Cold War (London: Harper Collins, 2000), p. 282. Lynne Joiner, Honorable Survivor: Mao’s China, McCarthy’s America and the Persecution of John S. Service (Annapolis MD: Naval Institute Press 2009),

358

12. 13. 14. 15.

16. 17. 18. 19. 20.

21. 22. 23. 24.

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pp. 327– 30; pp. 24 –47; Klehr, Harvey & Radosh, Ronald, The Amerasia Spy Case: Prelude to McCarthyism. University of North Carolina Press (1996); Service, John S. The Amerasia Papers: Some Problems in the History of US-China Relations (Center for Chinese Studies, 1971). Seagrave, The Soong Dynasty, p. 397. On China Defence Supplies see , http:// www.oac.cdlib.org/findaid/ark:/13030/kt8g50382t/entire_text/. accessed 20 February 2015. West, Venona, pp. 282– 3. Haynes, John Earl & Klehr, Harvey, Early Cold War Spies: The Espionage Trials that Shaped American Politics (Cambridge: Cambridge University Press, 2006), p. 39. Sullick, Michael J. Spying in America: Espionage from the Revolutionary War to the Dawn of the Cold War (Georgetown Georgetown University Press, 2012), pp. 207– 210; Haynes, John Earl & Klehr, Harvey, Venona: Decoding Soviet Espionage in America (New Haven: Yale Nota Bene, 1999), pp. 47, 147; see also Weinstein, Allen & Vassiliev, Alexander, The Haunted Wood: Soviet Espionage in America: The Stalin Era (New York: Modern Library Press 2000). Bruce, Craig R. Treasonable Doubt: The Harry Dexter White Spy Case (Lawrence, KS: University Press of Kansas, 2004), p. 87; Weinstein, Allen, Perjury: The Hiss-Chambers Case (New York: Knopf, 1997), p. 238. Haynes & Harvey, Venona, pp. 62 – 5, 90 – 1, 126; see also Olmsted, Kathryn S. Red Spy Queen: A Biography of Elizabeth Bentley (Chapel Hill: University of North Carolina Press. 2002). Haynes & Klehr, Early Cold War Spies, p. 28. VENONA KGB New York, 1944, p. 767. Available at: ,http://www.wils oncenter.org/sites/default/files/Venona-New-York-KGB-1944.pdf. accessed 10 December 2014. Haynes, John Earl, Klehr, Harvey, Vassiliev, Alexander, Spies: The Rise and Fall of the KGB in America (New Haven: Yale University Press, 2009), pp. 191, 259– 60; Weinstein & Vassiliev, Haunted Wood, pp. 48, 158, 162, 169, 229; Haynes & Klehr, Venona, pp. 117, 128– 9, 142– 3, 345. ‘Sol Adler, a soulful friend’ China Daily, 9 May 2009. Available at: , http:// www.chinadaily.com.cn/cndy/2009-09/05/content_8658159.htm. accessed 10 December 2014. Sulick, Spying in America, p. 210. Haynes, John E. and Klehr, Harvey, In Denial: Historians, Communism, & Espionage, Encounter Books (2003) p. 191; ‘Lauchlin Currie, 91. “New Deal Economist Was Roosevelt Aide”’. New York Times, 30 December 1993. ‘Judge Joe: How The Youngest Judge In Wisconsin’s History Became The Country’s Most Notorious Senator’ Legal Affairs; Herman, Arthur, Joseph McCarthy: Reexamining the Life and Legacy of America’s Most Hated Senator (New York: Free Press, 1999) p. 30; Oshinsky, David M., A Conspiracy So Immense: The World of Joe McCarthy (Oxford: Oxford University Press, 2006), pp. 30 – 2.

NOTES

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359

25. Schrecker, Ellen, Many Are the Crimes: McCarthyism in America (Boston: Little, Brown and Company, 1998), pp. 236 –47. 26. ‘Reaction of President Harry Truman to Loyalty Investigation “News Conference at Key West”’ 30 March 1950, Public Papers of the Presidents of the United States, 1950 (Washington, DC), in Schlesinger, Arthur M. Jr. and Burns, Roger Congress Investigates: A Documented History, 1792– 1974 (New York: Chelsea House, 1963), pp. 31 – 8, 80 – 3. 27. Andrew & Mitrokhin, The Sword and the Shield, p. 164.

Chapter 14 Our Man in Yenan 1. Hsiao Li Lindsay, Bold Plum: With the Guerillas in China’s War Against Japan (North Carolina: Lulu.com, 2006), pp. 136 – 7. 2. Trescott Paul, B., ‘How Keynesian Economics Came to China’ Discussion Paper Series No. 96 – 02, January, 1996, Department of Economics, Southern Illinois University, pp. 2– 3. 3. Lindsay, Michael, The Unknown War: North China 1937– 1945 (London: Bergstro¨m & Boyle Books, 1975), photo album with no pagination. 4. Ibid. 5. Ibid. 6. Trescott Paul, B., ‘How Keynesian Economics Came to China’, p. 3. 7. Lindsay, Michael, The Unknown War. 8. Ibid. 9. Ibid. 10. Ibid. 11. Ibid. 12. Hsiao Li Lindsay, Bold Plum, p. 83. 13. Ibid., p. 86. 14. Ibid., p. 89. 15. Ibid. 16. Lindsay, Michael, The Unknown War; Hsiao Li Lindsay, Bold Plum, p. 91. 17. Hsiao Li Lindsay, Bold Plum, p. 97. 18. Lindsay, Michael, The Unknown War. 19. Hsiao Li Lindsay, Bold Plum, p. 100. 20. Ibid., pp. 111, 119. 21. Lindsay, Michael, The Unknown War. 22. Hsiao Li Lindsay, Bold Plum, p. 148. 23. Ibid. 24. Ibid. 25. Ibid. 26. Bagby, Wesley Marvin, The Eagle-Dragon Alliance: America’s Relations with China in World War II (Newark: University of Delaware Press, 1992), p. 104; Hsiao Li Lindsay, Bold Plum, pp. 180– 181.

360

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27. 28. 29. 30. 31. 32. 33. 34.

Ibid., p. 220. Lindsay, Michael, The Unknown War. Ibid., p. 302. Ibid., p. 320. Ibid., pp. 325 – 6. Ibid., pp. 334 – 5. Ibid. Wright, Patrick, Passport to Peking: A Very British Mission to Mao’s China (Oxford: Oxford University Press, 2010), pp. 75, 302 35. Zhong-ping Feng, The British Government’s China Policy, 1945 – 1950 (Staffordshire: Ryburn Publishing/Keele University Press, 1994), p. 90; Britain and China 1945 – 1950: Documents on British Policy Overseas, Volume 8, p. 140; Lady Lindsay of Birker’ Telegraph, 1 June 2010, Available at: ,http://www.telegraph.co.uk/news/obituaries/7815180/Lady-Lindsay-ofBirker.html. accessed 11 December 2014. ‘Hsiao Li Lindsay obituary’ The Guardian, 1 June 2010 available at: ,http://www.theguardian.com/world/ 2010/jun/01/hsiao-li-lindsay obituary. accessed 10 December 2014; Hsiao Li, Bold Plum, p. 339.

Chapter 15 Into Manchuria 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Caldwell, A Secret War, p. 185. Ibid., pp. 185 – 6. Ibid., p. 187. Ibid., p. 190. Yee Wah Foo, ‘From Chiang Kai-shek to Mao: Fu Bingchang, Chiang Kai-she and Yalta’ Cold War History, Vol. 9, No. 3, August 2009, p. 39. Ibid., p. 393. Ibid., p. 396. Ibid., p. 400. Ibid., pp. 401 – 2. Yick, ‘Communist-Puppet collaboration in Japanese-Occupied China’, pp. 77 – 8. Yu, OSS in China, pp. 216 –19. Ibid., pp. 220 – 3. Ibid., pp. 228 – 9. Glantz, David, August Storm: The Soviet 1945 Strategic Offensive in Manchuria (Fort Leavenworth: Combat Studies Institute/Leavenworth Papers No. 7, 1983), p. 4. As narrated by his daughter Claire Fanning to the author. Pu Yi and Kramer, The Last Manchu, p. 201. Ibid., pp. 204 – 5. Bernstein, China 1945, p. 286. Memo 3 April 1945, pp. 1 – 4, RG 226, Entry 211 Box 1 NARA.

NOTES

TO PAGES

192 –198

361

19. ‘Account of the death of captain John Birch’ 14 September 1945 by John S. Thomson to HQs Central Command OSS cited by Yu, OSS in China, pp. 238– 240, 318 note 40. 20. See Clemens, Peter, ‘Operation “Cardinal”: The OSS in Manchuria, August 1945’ Intelligence and National Security, Vol. 13, No. 4 (December 1998), pp. 71 – 106. 21. George S. Wuchinich, available at: , http://projects.militarytimes.com/citations -medals-awards/recipient.php?recipientid¼22810 . accessed 10 January 2015. 22. Smith, Richard Harris, OSS: The Secret History of America’s First Central Intelligence (Berkeley CA: University of California Press 1972), p. 258. 23. Ibid. 24. Taylor, The Generalissimo, p. 318; Carter, Carolle, J. Mission to Yenan: American Liaison with the Chinese Communists 1944– 1947 (Lexington: University Press of Kentucky, 1997), p. 125. 25. Bernstein, China 1945, pp. 289– 91; Taylor, Generalissimo, pp. 318– 23. 26. Caldwell, A Secret War, pp. 144– 6. 27. Yu, OSS in China, pp. 244 –5. 28. Ibid., pp. 250 – 1, 262. 29. ‘Memorandum on Intelligence Activities at Shanghai’, 15 October 1945, ibid, p. 10. 30. Chinese intelligence report, No. 42, 26 August 1945, WO 208/4403 TNA. 31. MI6b to MI2 ‘China; Communications; communist activities’ 9 October 1945, WO 208/4403 TNA. 32. MI6 to Far Eastern Department: ‘China and the USSR; Views of Chu Hsin Min’ 19 September 1945, WO 208/4403 TNA. 33. British Agents, Information concerning’ 22 October 1945, RG 226 Entry 211 Box 32 WN 20139 NARA. 34. ‘Lt.Col. Bridge, British Intelligence’, 16 November 1945 RG 226 Entry 211 Box 32 WN 20139 NARA. 35. ‘Major Hardige and Mr O. Mahen’ 13 November 1945 RG 226 Entry 211 Box 32 WN 20139 NARA. 36. Letter to MI2 with attached map, WO 208/4403 TNA. 37. MI6b to MI2, ‘China. Japanese attitude, Puppet troops’ 25 August 1945, WO 208/4403 TNA. 38. MI6b to MI2 information dated end of May 1945, 13 September 1945, WO 208/4403 TNA. 39. HQs British troops in China to War Office, 15 September 1945, WO 208/4403 TNA. 40. Cabinet office to SACBFA, 19 October 1945, WO 208/4403 TNA. 41. MI6 (SIS) reports to MI2, source Ismael/Shalfleet, 27 November 1945, WO 206/208 TNA. 42. Hsiao Li, Bold Plum, p. 336. 43. Ibid., p. 337.

362

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TO PAGES

199 –204

An American General

1. Bradley, Omar N., A Soldier’s Story (Chicago: Rand McNally, 1951), p. 20. 2. Taylor, Maxwell D., Swords and Plowshares (New York: W.W. Norton and Company, Inc., 1972), p. 40. 3. Bradley, p. 20. 4. Wedemeyer, General Albert C., Wedemeyer Reports! (New York: Henry Holt & Company, 1958), pp. 121 – 2. 5. Taylor, Jay, The Generalissimo, p. 355. 6. Tanner, The Battle for Manchuria and the Fate of China, pp. 83 – 84. 7. May, Ernest R., ‘1947 – 48: When Marshall kept the U.S. out of war in China’, Journal of Military History, Vol. 66, No. 4 (Autumn 2002), pp. 1001 –10. 8. Bland, Larry I & Ritenour Stevens, Sharon eds. The Papers of George Catlett Marshall (Lexington, Va.: The George C. Marshall Foundation, 1981). Electronic version based on The Papers of George Catlett Marshall, vol. 5, “The Finest Soldier,” January 1, 1945 – January 7, 1947 (Baltimore and London: The Johns Hopkins University Press, 2003), pp. 457– 8, available at ,http:// marshallfoundation.org/library/to-lieutenant-general-albert-c-wedemeyer-11/.; accessed 20 February 2015. 9. Ibid. 10. ‘Owing to delicate position of source this report should not be sent outside the War Office without reference to MI6’ (special stamp) SSU report ‘Chinese Communist Military information’ 3 January 1946, WO 208/4403 TNA. 11. Jeans (ed.), The Marshall Mission to China, p. 20. 12. Ibid., p. 35. 13. Ibid., p. 34. 14. Taylor, The Generalissimo, p. 342. 15. Aid, Matthew and Richelson, Jeffrey T. U.S. Intelligence and China: Collection, Analysis, and Covert Action, at: ,http://nsarchive.chadwyck.com/collections/ content/CI/intell_and_china_essay.pdf. , accessed 10 July 2012, p. 7. 16. Taylor, The Generalissimo, p. 342. 17. Yu, The Dragon’s War, p. 191. 18. Taylor, The Generalissimo, p. 342. 19. Ibid., p. 343. 20. Ibid., p. 344. 21. Yu, The Dragon’s War, p. 192. 22. Taylor, The Generalissimo, pp. 345– 6. 23. Ibid., p. 349. 24. Entry of 28 April 1946, diary of Colonel Caughey, in Jeans (ed.), The Marshall Mission to China, p. 249. 25. Tanner, The Battle for Manchuria and the Fate of China, p. 156. 26. Quoted in ibid. 27. Taylor, The Generalissimo, p. 348. 28. Ibid., p. 349.

NOTES 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.

TO PAGES

204 –209

363

Ibid., p. 350. Ibid. Feng, The British Government’s China Policy, p. 67. Taylor, The Generalissimo, p. 351. Ibid., p. 352; Lew, Christopher, The Third Chinese Revolutionary Civil War, 1945– 49: An Analysis of Communist Strategy and Leadership (New York: Routledge, 2009), p. 37. Quoted in Tanner, The Battle for Manchuria and the Fate of China, p. 186. Taylor, The Generalissimo, p. 353. Tanner, The Battle for Manchuria and the Fate of China, p. 220. Entry for 18 June 1946, diary of Colonel Caughey, in Jeans (ed.), The Marshall Mission to China, p. 254. ‘Memorandum by General Chou Enlai to General Marshall’, 29 June 1946, FRUS, Vol. IX (1946), p. 1246. Taylor, The Generalissimo, p. 354. Entry for 29 June 1946, diary of Colonel Caughey, in Jeans (ed.), The Marshall Mission to China, p. 255. Caughey to his wife, 29 – 30 June and 1 July 1946, in ibid, pp. 131 – 2. Taylor, The Generalissimo, p. 355. General Marshall to President Truman, 11 July 1946, FRUS, Vol. IX (1946), pp. 1348 –9. Entry for 17 July 1946, diary of Colonel Caughey, in Jeans (ed.), The Marshall Mission to China, p. 256. Taylor, The Generalissimo, p. 356. Ibid., p. 357. Ibid. Ibid., p. 358. Ibid., p. 359. Ibid. Jeans (ed.), The Marshall Mission to China, p. 25. General Marshall to President Truman, 22 July 1946, FRUS, Vol. IX (1946), pp. 1394 –5. Ambassador in China (Stuart) to the Secretary of State, 25 July 1946, ibid, pp. 1402 –3. Entry for 27 July 1946, diary of Colonel Caughey, in Jeans (ed.), The Marshall Mission to China, p. 257. The Consul General at Tietsin (Myers) to the Secretary of State, 30 July 1946, FRUS, Vol. IX (1946), p. 1418. General Marshall to President Truman, 17 August 1946, FRUS, Vol. X (1946), p. 54; General Marshall to President Truman, 23 August 1946, ibid, p. 79. General Marshall to President Truman, 23 August 1946, ibid, p. 80. Ibid., 30 August 1946, p. 110. Ibid. Westad, Decisive Encounters, p. 49.

364

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210 –215

61. General Marshall to President Truman, 23 September 1946, FRUS, Vol. X (1946), p. 219. 62. Ibid., 26 September 1946, p. 225. 63. Taylor, The Generalissimo, pp. 360– 2. 64. General Marshall to President Truman, 10 October 1946, FRUS, Vol. X (1946), p. 351. 65. Ibid., 17 October 1946, p. 225. 66. Ibid., 26 October 1946, p. 436. 67. Ibid., 4 November 1946, p. 470. 68. Ibid., 11 November 1946, p. 522. 69. Ibid., 16 November 1946, p. 548. 70. Ibid., 23 November 1946, pp. 558 – 9. 71. Taylor, The Generalissimo, p. 364. 72. Stevenson to Foreign Office, 19 December 1946, FO 371/ 53673 TNA, p. 3. 73. General Marshall to President Truman, 28 December 1946, FRUS, Vol. X (1946), p. 664. 74. Quoted in Tanner, The Battle for Manchuria and the Fate of China, p. 200. 75. Ibid. 76. Taylor, The Generalissimo, p. 365.

Chapter 17 The Japanese Friends 1. Saint, BH 1 to Saint, JJ3 and DH /5, 15 August 1946 RG 226 Entry 211 Box 32 WN 20139 NARA. 2. Gillin, Donald G. and Etter, Charles, ‘Staying on: Japanese soldiers and civilians in China, 1945– 1949’ Journal of Asian Studies, Vol. 42, No. 3 (May 1983), pp. 499– 500. 3. Ibid., p. 502. 4. See Himeta, Mitsuyoshi, 姫田光義 日本軍による『三光政策・三光作 戦 をめぐって』 (‘Concerning the Three Alls Strategy/Three Alls Policy By the Japanese Forces’) (Tokyo: Iwanami Bukkuretto, 1996). 5. Wei, Shuge, ‘Beyond the Front Line: China’s rivalry with Japan in the Englishlanguage press over the Jinan Incident, 1928’, Modern Asian Studies, Vol. 48 Issue 1 (2013), pp. 188 – 224. 6. Bix, Herbert, P., Hirohito and the Making of Modern Japan (New York: Harper Perennial, 2001), pp. 594– 5. 7. Gillin and Etter, ‘Staying on’, p. 500. 8. Dick Hamada’s interview courtesy of the Center for Oral History; Available at , http://nisei.hawaii.edu/object/io_1193532373937.html. accessed 10 February 2015. 9. Report of a conference between Lt. General Takahashi, Chief of Staff, Japanese Army in North China, and members of the Magpie Mission in Peiping, China, September 12, 1945, pp. 1 – 3, RG 216 Entry 214 Box 5.

NOTES 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

TO PAGES

216 –223

365

Gillin and Etter, ‘Staying on’, p. 500. Ibid., p. 498. Wakeman, Spymaster, p. 350. MI6a to MI2b, ‘Arms dumps in Manchuria; supply of arms to Chinese Communists by Russians.’ 5 May 1947, WO 208/ 4753 TNA. ‘Counter-Espionage Section Monthly Progress Report’, 31 March 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00082/all.pdf., accessed 28 July 2011, p. 4. ‘Counter-Espionage Section Monthly Progress Report’, 31 March 1946, pp. 5 – 6. Hall, Simon, ‘Imperial Japanese Army Intelligence in North and Central China during the Second Sino-Japanese War’ Salus Journal, Issue 2, Number 2 (2014), pp. 21 – 23. Quoted in Gillin and Etter, ‘Staying on’, p. 504. ‘Counter-Espionage Section Monthly Progress Report’, 31 March 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00082/all.pdf., accessed 28 July 2011, pp. 3 – 4. Wakeman, Spymaster, pp. 353– 8, 361, 364. ‘Chinese Government Intelligence Activities’ 9 May 1946, RG 226 Entry 211 Box 37 WN 20120– 20125 NARA. Ibid., pp. 2, 5. Ibid., p. 7. ‘Chinese Intelligence: Plan to penetrate American Installations in Peking’ 23 July 1946, RG 226 Entry 211 Box 37 WN 20120– 20125 NARA. ‘Chinese Intelligence: Plan to penetrate American installations in Peiping’ 17 July 1946, RG 226 Entry 211 Box 37 WN 20120– 20125 NARA. Gillin and Etter, ‘Staying on’, pp. 511 –13. ‘Interrogation of Chinese Wireless Interceptor’, 22 August 1947, at ,http:// nsarchive.chadwyck.com/nsa/documents/CI/00214/all.pdf. , accessed 28 July 2011, p. 2. Ibid., pp. 2 – 3. Ibid., p. 5.

Chapter 18

The Russian Operatives

1. Singlaub, John K (with Malcolm McConnell), Hazardous duty: an American soldier in the twentieth century (New York: Summit Books, 1991), p. 126. 2. Ibid., pp. 133 – 4. 3. Ibid., p. 136. 4. Ibid., p. 143. 5. ‘Memorandum on Intelligence Activities at Shanghai’, 15 October 1945 RG 263 Entry 18, Box 18 National Archives and Records Administration (NARA), 3, ibid, p. 10. 6. ‘Memorandum on Soviet Activities in Shanghai’, 16 October 1945, ibid.

366

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224 –229

7. ‘Memorandum on Intelligence Activities at Shanghai’, 15 October 1945, ibid, p. 1. 8. Ibid., Memorandum on Intelligence Activities at Shanghai’, 15 October 1945 p. 7. 9. ‘Augur Cables, Chronological file of outgoing cables’, OSS China Theater, 12 September– 3 November 3, 1945, RG 226 Entry 211, Box 4 NARA. 10. Ibid. Memorandum on Intelligence Activities at Shanghai’, 15 October 1945. 11. SSU; Military information, 12 March 1946, WO 208/4403 TNA. 12. Ibid., p. 2. 13. SSU; Military information, 19– 20 March 1946, WO 208/4403 TNA. 14. Ibid. 15. SSU; Military information, 21– 22 March 1946, WO 208/4403 TNA. 16. Ibid. 17. SSU; Military information, 20– 25 March 1946, WO 208/4403 TNA. 18. Aid, Matthew and Richelson, Jeffrey T., US Intelligence and China: Collection, Analysis and Covert Action, at ,http://nsarchive.chadwyck.com/collections/ content/CI/intell_and_china_essay.pdf. , accessed 2 June 2012. 19. Ibid. 20. Haynes, John Earl and Klehr, Harvey, Venona: Decoding Soviet Espionage in America (New Haven, CT: Yale University Press, 2000), p. 178. 21. David, James, ‘Bourbon Operations in China Following World War II’ Cryptologia, Vol. 31, Issue 3 (2007), pp. 254 – 55. 22. Ibid., pp. 257 – 8. 23. Ibid., p. 259. 24. Ibid., p. 261. 25. ‘Counter-Espionage Section Monthly Progress Report’, 31 March 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00082/all.pdf., accessed 28 July 2011, p. 1. 26. Ibid. 27. Ibid., pp. 1, 4. 28. ‘Monthly Progress Report, Counter Espionage Section’, April 1946, 1 May 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00109/all.pdf. , accessed 28 July 2011, p. 4. 29. ‘Counter-Espionage Section Monthly Progress Report’, 31 March 1946, p. 2. 30. ‘Penetration of United States Consulate General, Shanghai, by Chinese Intelligence agents’, 11 April 1946, at ,http://nsarchive.chadwyck.com/nsa/ documents/CI/00082/all.pdf., accessed 28 July 2011. 31. ‘Monthly Progress Report, Counter Espionage Section’, April 1946, 1 May 1946, p. 2. 32. Ibid., p. 4. 33. Ibid., p. 2. 34. Informant report extract (undated) RG 226 Entry 211 Box 31 WN 20131 NARA.

NOTES 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65.

TO PAGES

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367

Monthly Progress Report, Counter Espionage Section’, April 1946, p. 7. Ibid. Ibid., p. 3. Ibid., p. 6. Ibid., p. 4. Ibid., p. 7. Chinese Intelligence Reports- March Intercepts, 8 April 1946. RG 226 Entry 211 Box 37 NARA. ‘Chinese Government Intelligence Activities: Espionage’, 9 May 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00116/all.pdf., accessed 28 July 2011, p. 1. ‘Chinese Government Intelligence Activities: Espionage’, 9 May 1946. Ibid., p. 2. Ibid., pp. 7 – 8. ‘Monthly Progress Report; Counter-Espionage Section, May 1946’, 1 June 1946, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00134/all.pdf. , accessed 28 July 2011, p. 1. Ibid., p. 2. Ibid., p. 3. Ibid. ‘Increasing Interest in SSU on the part of Chinese’, 1 August 1946, at ,http:// nsarchive.chadwyck.com/nsa/documents/CI/00161/all.pdf. accessed 28 July 2011, pp. 1 –2. ‘Foreign Intelligence Activities; Memorandum for the Chief of Naval Intelligence’, 19 September 1946, at ,http://nsarchive.chadwyck.com/nsa/ documents/CI/00182/all.pdf. accessed 28 July 2011. ‘Soviet Intelligence and Subversive Activities; SSU Counterintelligence Summary No. 14 series II’, 1 October 1946, at ,http://nsarchive.chadwyck. com/nsa/documents/CI/00188/all.pdf. accessed 28 July 2011. Ibid. Ibid. Ibid. Ibid. ‘Soviet Intelligence in Shanghai-Tsigtao Areas’, 10 February 1947, at ,http:// nsarchive.chadwyck.com/nsa/documents/CI/00207/all.pdf., accessed 28 July 2011, p. 1. Ibid., p. 2. Ibid., p. 3. Ibid., p. 2. Ibid., p. 3. Wakeman, Spymaster, p. 350. ‘Interrogation of Chinese Wireless Interceptor’, 22 August 1947, p. 6. Ibid. Ibid.

368

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236 –243

66. ‘Intelligence Re-organisation of the Chinese Nationalists in China’, 7 October 1948, at ,http://nsarchive.chadwyck.com/nsa/documents/CI/00237/all.pdf. accessed 28 July 2011, p. 1. 67. ‘Soviet Intelligence Organisations in Manchuria’, 18 October 1948, pp. 1 –2 RG 263, Entry 18, Box 26 NARA. 68. ‘Chinese Communist “Professional Students’, 29 June 1948, ibid. 69. ‘Sienhsien Espionage case’, 15 September 1948, ibid. 70. Hawthorne to US Consulate General (Tsingtao) 10 December 1948, ibid. 71. MI6a to MI2b “Chinese Communist use of former Japanese arms in Manchuria, 7.2.1948” 25.2.1948, WO 208/ 4753 TNA.

Chapter 19

Spying on our Cousins

1. Undated handwritten note, probably of May 1945, RG 226 Entry 211 Box 32 WN 20139 20 F NARA. 2. ‘Principles of Collection of Intelligence at Shen Chia Men’/cover letter dated 6 May 1945, p. 2, ibid. 3. ‘Penetration by British intelligence of US Army Installations’ 16 May 1945, p. 2, ibid. 4. Note for British intelligence file, 12 April 1945, ibid. 5. Lt (Jg) Arthur M. Thurston, USNR to Major George H. White, 21 March 1945, ibid. 6. ‘British Secret Service in China’ 22 June 1945, p. 2, ibid. 7. Ibid., p. 3. 8. Ibid., p. 3. 9. ‘British activities in China’ 27 July 1945, ibid. 10. ‘Survey of British intelligence agencies in China’ 5 September 1944, p. 4, ibid. 11. ‘Survey of British intelligence agencies in China’ 5 September 1944, pp. 5 – 6, ibid. 12. ‘British Intelligence Activities’, 16 August 1945, ibid. 13. British Organizations in Kunming, 8 March 1945, pp. 1 – 4, ibid. 14. ‘British Military Mission at Pucheng’ 7 March 1945, ibid. 15. ‘British Intelligence in Communist Territory’ 30 December 1944, ibid. 16. See ‘The Organisation of the British Army Aid Group’ 16 February 1945, pp. 1 – 2, ibid. 17. “C” Section; South China Coast Intelligence, BAAG in ‘Organisation of British Army Aid Group’ 9 February 1945, ibid. 18. “I” Section in ibid. 19. “S” Section in ibid. 20. ‘History of BAAG (British Army Aid Group)’ 30 January 1945, ibid. 21. ‘Penetration of The BAAG by Chinese Government Agents’, 8 February 1945, p. 2, ibid. 22. British Liaison Office, 27 March 1945, ibid. 23. BH/003 to BH/045, 2 May 1945, ibid.

NOTES TO PAGES 244 –251

369

24. ‘British Army Aid Group Security Branch’; memorandum to Col. Willis H. Bird, Deputy Strategic Services Officer, 2 May 1945, p. 2, ibid. 25. Ibid. 26. Ibid. 27. Ibid., p. 3. 28. Ibid. 29. Ibid., p. 4. 30. Bird to Heppner, 24 April 1945, ibid. 31. ‘British Agents Sian area’ 15 March 1945, ibid. 32. ‘British Intelligence Activity, Sian- Major Drake’ 6 February 1945, ibid. 33. ‘British intelligence notes from Sian’ 6 April 1945, ibid. 34. ‘British Agents Sian area’ 15 March 1945, ibid. 35. Bird to Thurston, 5 February 1945, ibid. 36. Thurston to Bird, 6 February 1945, ibid. 37. McDonough to Thurston, 6 February 1945, ibid. 38. McDonough to Thurston, 7 February 1945, ibid. 39. ‘British Intelligence Organization File’ 29 January 1945, ibid. 40. ‘British activities in China’ 31 July 1945, ibid. 41. ‘British intelligence activities in China’, 7 October 1945, ibid. 42. ‘British Group under US command’ 26 June 1945, ibid.

Chapter 20

Uranium

1. Taylor, Jay, The Generalissimo’s Son: Chiang Ching-kuo and the Revolutions in China and Taiwan (New Haven: Harvard University Press, 2000), pp. 247 – 8. 2. Weiner, Tim ‘How a Spy Left Taiwan in the Cold’ New York Times, 20 December 1997, available at ,http://www.nytimes.com/1997/12/20/world/how-a-spyleft-taiwan-in-the-cold.html. accessed 27 March 2015; Taylor, The Generalissimo, pp. 555– 6. 3. Fairbank, John King, Chinabound: A Fifty-year Memoir (New York: Harper Colophon Books, 1983), p. 181. 4. JSM, Washington to Cabinet Office, 19 November 1945, CAB 126/73 TNA. 5. Letter to Sir John Anderson, 9 April 1947, CAB 126/73 TNA. 6. JSM, Washington to Cabinet Office, 30 April 1947, CAB 126/73 TNA. 7. JSM, Washington to Cabinet Office, 9 May 1947, CAB 126/73 TNA. 8. Cabinet Office to JSM, Washington, 5 May 1947, CAB 126/73 TNA. 9. Dale to Rickett (Cabinet Office), 19 February 1946, CAB 126/287 TNA. 10. Letter to Rickett (Cabinet Office), 25 February 1946, CAB 126/287 TNA. 11. Directive to all X-2 Field Stations, 20 January 1946, RG 226 Entry 211 Box 31 WN 20131 NARA. 12. Harry D.G. Carroll memorandum, 20 January 1946, ibid. 13. See Holloway, David, Stalin and the Bomb: The Soviet Union and Atomic Energy, 1939– 1956 (New Haven: Yale University Press, 1996).

370

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14. ‘Japanese Used in Chinese Research/ Ramona’ 16 September 1946, pp. 1 – 2, RG 226 Entry 211 Box 31 WN 20131 NARA. 15. Secret Intelligence/Ramona from BH87, 18 October 1946, ibid. 16. ‘Ramona’ (February summary report), 25 February 1946, pp. 3 – 6, ibid. 17. ‘Ramona’, BH87 to Secret Intelligence Branch, 9 October 1946, ibid. 18. ‘Ramona (Atomic research), Chinese Government’ 21 June 1946, ibid. 19. ‘Toru Tomita/ Ramona project’ 17 July 1946, pp. 1 – 4, ibid. 20. BH/1 to Robert Koke, ‘Japanese used in Chinese research (Ramona)’ 26 September 1946, ibid. 21. Memo dated 22 September 1949 titled ‘Michael Keon’s account of the present situation in the Chinese Communist Part’ referring to paper F12075/1016/10G in FO 371/75771 TNA. 22. ‘Ramona’ (July Report)’ 27 July 1946, RG 226 Entry 211 Box 31 WN 20131 NARA. 23. ‘Ramona’, 6 April 1946; BH/76 to BH 214, ‘Ramona’ 18 July 1946 all in ibid. 24. ‘Ramona’ (July summary report), 27 July 1946, p. 18, ibid. 25. ‘Ramona’, 23 April 1946, ibid. 26. ‘Vneshtorg’s (Soviet Far Eastern Trade) interest in new minerals’, undated (1946), ibid. 27. Informant Y-1, Attachment A, ‘Liell, Otto-Ernest’, ibid. 28. YST-49 informant report, 22 May 1946, p. 1, ibid. 29. ‘Ramona’ (February summary report), 25 February 1946, pp. 1 – 4. ibid. 30. Ibid. 31. News article extract, 24 January 1947, CAB 126/73 TNA. 32. British Embassy, Nanking to Foreign Office, 30 March 1948, CAB 126/73 TNA. 33. Extract from the North China Daily News, 1 April 1948, CAB 126/73 TNA. 34. Report, 26 February 1946, RG 226 Entry 211 Box 31 WN 20131 NARA. 35. ‘USSR Activities in Shanghai’ undated (1946), ibid. 36. ‘Ramona’ memorandum for the files, 25 April 1946, pp. 1 –2, ibid. 37. Zhihua Shen & Yafeng Xia, Aid and Restriction: Changing Soviet Policies toward China’s Nuclear Weapons Program: 1954– 1960, Nuclear Proliferation International History Project (NPIHP) Working Paper No. 2 (Woodrow Wilson International Centre for Scholars, 2012), p. 5. 38. ‘Ramona’ (February summary report) 25 February 1946, pp. 1 – 4, RG 226 Entry 211 Box 31 WN 20131 NARA. 39. Grantham to Jones, 10 August 1949, FO 800/462 TNA. 40. D.D. Maclean to J.G. Stewart, 20 February 1948, CAB 126/73 TNA.

Chapter 21 The One-Eyed Lieutenant-General 1. Lanxin Xiang, Recasting the Imperial Far East: Britain and America in China, 1945– 1950 (New York: East Gate, 1995), p. 101.

NOTES

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371

2. Korda, Michael, Hero: The Life and Legend of Lawrence of Arabia (London: Aurum Press, 2012), p. 236. 3. Ranfurly, Hermione, To War With Whitaker, The Wartime Diaries of the Countess of Ranfurly 1939 – 1945 (London: Mandarin Paperbacks, 1995), p. 123. 4. The London Gazette: (Supplement) no. 29740, p. 8869, 9 September 1916. 5. See De Wiart, Adrian Carton, Happy Odyssey: The Memoirs of Lieutenant-General Sir Adrian Carton de Wiart (London: Cape, 1950). 6. Baxter, Christopher, ‘A Closed Book? British Intelligence and East Asia, 1945– 1950’ Diplomacy & Statecraft, Vol. 22, No. 4 (2010), p. 6. 7. Minute for the DDMI 9 October 1945 (for 19– 20 September 1945) WO 208/4403 TNA quoted in Baxter, ‘A Closed Book?, p. 7; Goncharov, Sergei, John Wilson Lewis, Xue Litai, Uncertain Partners: Stalin, Mao and the Korean War (Stanford CA: Stanford University Press, 1995), pp. 11 – 12. 8. Baxter, ‘A Closed Book?’, p. 7. 9. All reports in WO 208/206 TNA; Baxter, ‘A Closed Book?’, p. 8. 10. MI6b to MI2, China: activities of communist forces, 3 May 1946, WO 208/4403 TNA. 11. MI6b to MI2: North China; Manchuria Political/communist activity, 20 December 1945, WO 208/4403 TNA. 12. Inverchapel to Foreign Office, 2 July 1946, FO 371/53565 TNA. 13. Seymour to Foreign Office, 25 October 1945, FO 371/46216 TNA. 14. De Wiart to Ismay, 3 January 1946, CAB 127/29 TNA. 15. Ibid., 15 January 1946, CAB 127/29 TNA. 16. Ibid., 5 February 1946, CAB 127/29 TNA. 17. Extracts from a letter from Lt-General Carton De Wiart to General Ismay, 27 February 1946, CAB 127/29 TNA. 18. Notes on my conversation with the Generalissimo on 20th March 1946, 21 March 1946, CAB 127/29 TNA. 19. China; Communist-KMT Relations, 21 February 1946, WO 208/4403 TNA. 20. Yenan to Moscow, 18 March 1946, HW 17/42 TNA. 21. Extract from letter dated 15th May 1946 from Lt-General Carton De Wiart, CAB 127/29 TNA. 22. Ibid. 23. De Wiart to Ismay, 11 July 1946, CAB 127/29 TNA. 24. Ibid., 26 July 1946, CAB 127/29 TNA. 25. Stevenson to Foreign Office, 1 December 1946, FO 371/53673 TNA. 26. Baxter, ‘A Closed Book?’, p. 9. 27. ‘Conversation between Military Attache´ and General Cheng Kai-Min’ (Enclosure), 23 December 1946, FO 371/53673 TNA, p. 3. 28. Ibid. 29. Bevin to Attlee, 2 January 1947, FO 800/462 TNA.

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Chapter 22

265 –273

Secret Sources

1. Garnons-Williams (HPD) to Mackenzie (SOE) and Bowden-Smith (SIS) 28 April 1945, HS 1/304, PRO. 2. Stevens, Keith, ‘Lt.Col. Walter Gordon Harmon, “An Old China Hand”’, Asian Affairs, Vol. 44 Issue 3 (2013), p. 433. 3. Ibid., pp. 436 – 40. 4. ‘British Intelligence Service in China’ X-2- Branch, 8 May 1946, pp. 5 – 6, 10; List of British intelligence agents in Shanghai, 16 July 1946 RG 226 Entry 211 Box 22 WN 24206 NARA. 5. X-2- Branch, 8 May 1946, pp. 5 – 6 RG 226 Entry 211 Box 22 WN 24206 NARA. 6. Ibid. 7. Quoted in Jeffery, MI6, p. 698. 8. ‘British Economic Research Trade Office Recent Activity’ 30 July 1946 RG 226 Entry 211 Box 32 WN 20139 NARA. 9. ‘Economic Intelligence Activities of BETRO’, June 1946, p. 2, RG 226 Entry 211 Box 32 WN 20139 NARA. 10. Ibid., p. 4. 11. Ibid. 12. Clarke’s Agency, Shanghai, Espionage, 17 May 1946 RG 226 Entry 211 Box 32 WN 20139 NARA. 13. Clarke’s Agency, Shanghai, 17 May 1946, pp. 1– 2 ibid. 14. ‘Clarke’s Inquiry and Protection Agency’, 26 February 1946, p. 3 RG 226 Entry 211 Box 32 WN 20139 NARA. 15. Clarke’s Agency, Shanghai, 17 May 1946, pp. 1 –2. RG 226 Entry 211 Box 32 WN 20139 NARA. 16. Clarke’s Enquiry Agency (Possible British Intelligence Source), 29 January 1946 RG 226 Entry 211 Box 32 RG 226 Entry 211 Box 32 WN 20139 NARA. 17. ‘British Activities’, BH/66 to Vallieres, 9 May 1946, pp. 1– 2, RG 226 Entry 211 Box 32 RG 226 Entry 211 Box 32 WN 20139 NARA. 18. Ibid., pp. 3 – 4. 19. GSI (JIS) 10 April 1947: Third Monthly Intelligence Liaison Letter from BGS (I) SEALF, 25 April 1947 to MI2, p. 1, WO 208/4756 TNA. 20. Ibid., p. 2. 21. Ibid., p. 7. 22. Ibid. 23. Ibid. 24. Ibid., p. 8. 25. Report based on information from Gardon of UNRRA; Minute Scott, 10 December 1946, FO 371/53673 TNA, quoted in Feng, The British Government’s China Policy, p. 77. 26. Moscow to Yenan, 16 January 1947, HW 17/42 TNA.

NOTES

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373

27. Yenan to Moscow, 16 March 1947, HW 17/42 TNA, pp. 1 – 2. 28. Quoted in Jeffery, MI6, p. 699. 29. ‘Foreign Office Proposed Policy towards Communist China’, DM1 memorandum, 25 August 1949, WO 208/4583 TNA. 30. Quoted in Jeffery, MI6, p. 699. 31. Quoted in ibid. 32. Ibid., p. 699. 33. Quoted in ibid. 34. Quoted in ibid. 35. ‘The Military Situation in South China’, 3 November 1948, p. 10, FO 371/69541 TNA. 36. Foreign Office to British Embassy (Moscow), 16 September 1948, FO 371/69599 TNA.

Chapter 23 Guy Burgess the Spy 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

Attlee to Bevin, 10 June 1951 PREM 8/1524 TNA. Bevin to Attlee, 13 June 1951, PREM 8/1524 TNA. ‘Mr D.D. Maclean’, pp. 1 – 4, PREM 8/1524 TNA. ‘Mr G.F. De M. Burgess’, pp. 1 – 2, PREM 8/1524 TNA. Ibid., pp. 2 – 3. Ibid., p. 3. Ibid., p. 4. Ibid. Baxter, ‘A Closed Book?’, p. 10. Ibid., p. 16. See Stevens, Keith, ‘Lt. Col. Walter Gordon Harmon, ‘An Old China Hand’ Asian Affairs, Vol. 44 Issue 3 (2013), pp. 427– 41. ‘Russian interest, intentions and capabilities,’ 23 July 1948 CAB 158/3 TNA; Baxter, ‘A Closed Book?’, p. 18. Franklin to British Embassy (Nanking) (‘Memorandum of a conversation with Mr Morgan and Mr Buchanan of the British American Tobacco Company on Saturday October 30, 1948’), 1 November 1948, FO 371/69541 TNA. Note, G. Burgess, 13 November 1948, FO 371/69541 TNA. Ibid., 16 November 1948, FO 371/69541 TNA. Ibid., undated [1948], FO 371/69541 TNA. Minute by Burgess 4 January 1949, FO 371/69550 TNA. Memo in FO 371/75742 TNA quoted in Holzman, Michael, Guy Burgess: Revolutionary in An Old School Tie (New York: Chelmsford Press, 2013), p. 296. Quoted in Jeffery, MI6, p. 699. Burgess memo 18 March 1949, pp. 1– 2, FO 371/75745 TNA. ‘Declaration by Liberated China that she will fight on the side of Russia in the event of war between Russia and the North Atlantic Pact signatories’ 5 April 1949, FO 371/75498 TNA.

374

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22. The message below was forwarded from the Director of Naval Intelligence to the FO 8 April 1949 FO 371/75748 TNA. 23. Burgess memo 13 April 1949 FO 371/75748 TNA. 24. Ibid. 25. ‘Speech made by one Jen Pi-shih, a member of the Central Committee of the Chinese Communist Party 13 April 1949’, Burgess memo 27 April 1949 FO 371/75749 TNA. 26. Burgess, minute, 15 August 1949 (F12075/1015/10) FO 371/75766 TNA. 27. Tomlinson, minute, 15 August 1949 (F12075/1015/10) FO 371/75766 TNA. 28. Dening, minute for Bevin, 16 August 1949, F12075/1015/10, FO 371/75766 TNA. 29. Baxter, Christopher James, Britain and the Origins of the Cold War in East Asia, 1944– 1949 (PhD Thesis, King’s College London, 2000), p. 301. 30. ‘The Situation in China’ Memorandum by the Secretary of State for Foreign Affairs March 1949, Appendix: Chinese Communists, p. 1, CAB/129/32 TNA. 31. Ibid., pp. 1 – 2. 32. Ibid., p. 3. 33. ‘The Situation in China’ Memorandum by the Secretary of State for Foreign Affairs, 3 March 1949 CAB/129/32 TNA. 34. Burgess memo 26 May 1949, p. 2, FO 371/75754 TNA. 35. Holzman, Guy Burgess, p. 301. 36. Situation in South China as at 28th June 1949’, JIC(49)44/1O(Final), 24 June 1949, CAB 158/7 TNA. 37. ‘Recognition of Chinese Communist Government’, 28 November 1949 DEFE 6/11; ‘A Review of the Threat to Hong Kong as at 4th October 1949’, 5 October 1949, CAB 158/7 TNA. 38. ‘The Military Situation in South China’, 3 November 1948, p. 11, FO 371/69541 TNA; Baxter, ‘A Closed Book?’, p. 20; ‘South China report’ June 1949, DEFE 4/24 TNA. 39. Jeffery, MI6, p. 700. 40. Ibid., p. 701. 41. Quoted in ibid. 42. Stevenson to Foreign Office, 18 May 1949, pp. 1 – 3, FO 371/75947 TNA. 43. Quoted in Jeffery, MI6, p. 701. 44. Quoted in ibid. 45. Commissioner General in South East Asia to Foreign Office, 30 August 1949, FO 371/75838 TNA. 46. Handwritten note, Burgess, 30 August 1949, FO 371/75838 TNA. 47. Handwritten note, P.D. Coates [handwritten below Burgess’s note], 30 August 1949, FO 371/75838 TNA. 48. Burgess memo 15 August 1949, FO 371/75766 TNA; Grantham to Jones, 10 August 1949, pp. 1 – 3, FO 800/462 TNA. 49. Grantham to Jones, 10 August 1949, pp. 1 – 3, FO 800/462 TNA. 50. Burgess memo 15 August 1949, FO 371/75766 TNA.

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375

51. Ibid. 52. Burgess memo, 22 June 1949, FO 371/75832 TNA; ‘Prospects for Soviet control of a Communist China’ CIA ORE 29 – 49, 15 April 1949 in FO 371/75832 TNA. 53. Prospects for Soviet control of a Communist China’, p. 7. 54. Ibid., p. 9. 55. Ibid. 56. Share, Michael, The Soviet Union, Hong Kong and the Cold War, 1945– 1970, Cold War International History Project Working Paper No. 41, January 2003, pp. 11 – 13. 57. Burgess memo, 31 August 1949; High Commissioner (Singapore) to Foreign Office, 30 August 1949, both in FO 371/75838 TNA. 58. Burgess memo, 19 September 1949, FO 371/ 75771 TNA. 59. Ibid. 60. Quoted in Jeffery, MI6, p. 701. 61. Quoted in ibid, p. 702. 62. Burges memo, 25 October 1949, FO 371/75897 TNA. 63. Foreign Office to P.N.N. Synnott, Admiralty, 28 October 1949, FO 371/75897 TNA. 64. ‘Guy Burgess’ Memorandum by the Secretary of State for Foreign Affairs, 12 February, 1959. CAB/129/96 TNA. 65. ‘Guy Burgess’ Memorandum by the Minister of State for Foreign Affairs, 25 February, 1959, CAB/129/96 TNA.

Chapter 24 Spies’ Warnings 1. Rittenberg, Sidney & Bennett, Amanda, The Man Who Stayed Behind (Durham: Duke University Press, 2001), p. 33. 2. Ibid., p. 18. 3. Ibid., pp. 40 – 2. 4. Ibid., pp. 43 – 4, 55. 5. Ibid., pp. 45, 62. 6. Ibid., p. 64. 7. Ibid., pp. 71, 86. 8. Ibid., p. 109; Rittenberg was accused of being an American secret agent and imprisoned from 1949 to 1954. Later he was reinstated in the CCP but was imprisoned during the Cultural Revolution. In 1980 he returned to the United States and the attitude of the Carter administration towards him made some intelligence officials conclude that he had to be a spy. Rittenberg spoke of people suspecting him even today of being a spy: ‘There were actually no western agents in China in my time . . . But former intelligence people are convinced to this day that I was an agent under deep cover. I get asked quite probing questions even today by retired CIA people. When I deny it, they say,

376

9.

10. 11. 12. 13. 14. 15. 16. 17. 18.

19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

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“Wow, you’re good”’. Margolis, Jonathan, ‘The man who made friends with Mao’ Financial Times, 11 January 2013. Available at: ,http://www.ft.com/intl/ cms/s/2/5befa6be-5abb-11e2-bc93-00144feab49a.html#axzz3UYaVA4XQ. accessed 23 January 2015. Westad, Decisive Encounters, p. 152; Gittings, John, ‘Xiong Xianghui: as a spy, he helped Mao to victory; as an envoy, he brokered the thaw with the US’. The Guardian, Monday 26 September 2005. Available at: ,http:// www.guardian.co.uk/news/2005/sep/26/guardianobituaries.china. , accessed 19 April 2012. Chang, Jung and Halliday, Jon, Mao: The Unknown Story (London: Vintage, 2007), p. 377. Westad, Decisive Encounters, p. 142. Political Division, Headquarters, Control Commission for Germany (British Element) to British Embassy (Nanking), 16 September 1948, FO 371/69541 TNA. The Ambassaor in China (Stuart) to the Secretary of State, 15 April 1947 and 25 April 1947, FRUS Far East: China, 1947, vol. 7, pp. 1445–1448. The Ambassaor in China (Stuart) to the Secretary of State, 19 April 1947, ibid, p. 1446. Xuezhi Guo, China’s Security State, p. 326. Ibid., p. 340. Ibid., p. 341. Tanner, Harold M., ‘Big Army Groups, Standardization, and Assaulting Fortified Positions: Chinese “Ways of War” and the Transition from Guerrilla to Conventional War in China’s Northeast, 1945– 1948’, Journal of Chinese Military History, Vol. 1 (2012) pp. 105 – 38. Ibid., p. 113. Quoted in ibid., p. 117. Westad, Decisive Encounters, p. 165. Ibid., pp. 166 – 8. January 27 diary entry, Costigliola, Frank ed. George F. Kennan: The Kennan Diaries (New York: W.W. Norton, 2014), pp. 209– 210. Westad, Decisive Encounters, p. 188. ORE 45 – 48: ‘The Current Situation in China’, 22 July 1948, at ,http://www. foia.cia.gov/docs/DOC_0001086057/DOC_0001086057.pdf. accessed 29 April 2012, p. 14. Singlaub, Hazardous duty, pp. 147– 8. ORE 12 – 48: ‘Prospects for a negotiated peace in China’, 3 August 1948, at ,http://www.foia.cia.gov/docs/DOC_0001086034/DOC_0001086034.pdf. , accessed 30 April 2012, pp. 1 – 2. ORE 27 – 48: ‘Possible Developments in China’, 19 November 1948, at ,http://www.foia.cia.gov/docs/DOC_0001098225/DOC_0001098225.pdf. , accessed 30 April 2012, p. 1.

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377

29. November 21, 1949 diary entry, Castigliola, ed. The Kennan Diaries, p. 238. 30. Quoted in Westad, Decisive Encounters, p. 193. On Liao-Shen campaign the latest research is of Harold Tanner, Where Chiang Kai-shek Lost: The Liao-Shen Campaign 1948 (Bloomington: Indiana University Press, 2015). 31. Tanner, Where Chiang Kai-shek Lost, p. 331 note 4. 32. Ibid., pp. 259 – 61. 33. Westad, Decisive Encounters, p. 197. 34. Ibid., p. 201. 35. ‘Terebin on behalf of Mao to Stalin’, 10 January 1949, at ,http://digitalarchive. wilsoncenter.org/document/112226. , accessed 24 April 2012. 36. Ibid.

Chapter 25

Stalin’s Fears

1. Yee Wah Foo, Chiang Kai-shek’s Last Ambassador to Moscow: The Wartime Diaries of Fu Bingchang (New York: Palgrave Macmillan, 2011), pp. 118 – 19. 2. Ibid., p. 120. 3. Ibid., p. 103. 4. Ibid., pp. 213 – 14. 5. Ibid., p. 8; Yinghong Cheng, ‘Beyond Moscow-Centric Interpretation: An Examination of the China Connection in Eastern Europe and North Vietnam during the Era of De-Stalinization,’ Journal of World History, Vol. 15, No. 4 (December 2004), pp. 487– 518. 6. Taylor, The Generalissimo, p. 397. 7. ‘Possible Developments in China’ ORE 27– 48, 19 November 1948, pp. 5 – 6. 8. Taylor, The Generalissimo, p. 398. 9. Westad, Decisive Encounters, pp. 224– 27. 10. Ibid., p. 234. 11. 李白 (中共党员) (Li Bai- Communist). Avaibable at: ,http://zh.wikipedia.org/ wiki/李白(中共党员).: accessed 11 December 2014; 永不消逝的电波－ － 记李白烈士使用过的修理电台工具 (Eternal wave – remember the martyr Li Bais tools used to repair [radio] stations). Available at: , http://dangshi.people. com.cn/GB/64036/9031129.html. accessed 10 December 2014. 12. Kim, ‘Stalin and the Chinese Civil War’, pp. 188, 194– 5; Stuart to Marshall, 15 July 1948, FRUS, 1948, Vol. VII, pp. 360– 1. 13. All quoted in ibid, Kim, ‘Stalin and the Chinese Civil War’ p. 195. 14. Ibid. 15. Quoted in Pantsov and Levine, Mao: The Real Story, p. 351; Kim, ‘Stalin and the Chinese Civil War’ p. 196. 16. Westad, Decisive Encounters, p. 234. 17. ‘Memorandum of Conversation between Anastas Mikoyan and Mao Zedong’, 31 January 1949, available at: ,http://digitalarchive.wilsoncenter.org/document/ 112436., accessed 24 April 2012.

378

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309 –313

18. Memorandum of Conversation between Anastas Mikoyan and Mao Zedong’, 31 January 1949. 19. Ibid. 20. Ibid. 21. Ibid. 22. Quoted in Beisner, Dean Acheson, p. 108. 23. Westad, Decisive Encounters, pp. 307– 8. 24. Singlaub, Hazardous duty, pp. 154– 7. 25. Aid, Matthew and Richelson, Jeffrey T., ‘US intelligence and China: collection, analysis and covert action’, available at: ,http://nsarchive.chadwyck.com/ collections/content/CI/intell_and_china_essay.pdf. , accessed 2 June 2012. 26. Gup, Ted, The Book of Honor: Covert Lives and Classified Deaths at the CIA (New York: Doubleday, 2000), pp. 45 – 50; see also: Allen, Maury, China Spy: The Story of Hugh Francis Redmond (New York: Gazette Press, 1998). 27. ‘Chinese Communist Plans for the Reduction of Nationalist China’, 11 February 1949, CREST CIA-RDP82-00457R002400040002-3. 28. Westad, Decisive Encounters, pp. 242– 3; Taylor, The Generalissimo, pp. 122– 3. 29. Westad, Decisive Encounters, p. 247; 被稱為「上海皇帝」的 杜月笙 (‘Known as the “Shanghai Emperor” Du Yuesheng’) available at: , http://www.sinew.idv. tw/cul1/cul32Dusen.htm. accessed 10 February 2015. 30. Westad, Decisive Encounters, p. 252. 31. ‘Cable, Kovalev to Filippov [Stalin]’, 13 April 1949, available at: ,http://digital archive.wilsoncenter.org/document/113353. accessed 24 April 2012. 32. ORE 29–49: ‘Prospects for Soviet Control of a Communist China’, 15 April 1949, at ,http://www.foia.cia.gov/docs/DOC_0001086033/DOC_0001086033.pdf., accessed 30 April 2012, p. 6. 33. Ibid. 34. Ibid., p. 7. 35. ‘Cable, Kovalev to Stalin, Report on the 22 May CCP CC Politburo Discussion’, 23 May 1949, available at: , http://digitalarchive.wilsoncenter.org/document/ 113365., accessed 24 April 2012. 36. Xia, Negotiating with the Enemy, p. 31. 37. Quoted in Beisner, Dean Acheson, p. 179. 38. ‘Cable, Stalin to Mao Zedong [via Kovalev]’, 26 May 1949, available at: ,http://digitalarchive.wilsoncenter.org/document/113370. accessed 24 April 2012. 39. ‘Cable, Mao Zedong [via Kovalev] to Stalin’, 14 June 1949, CWIHP Bulletin Inside China’s Cold War, Issue 16, Fall 2007/Winter 2008, pp. 166 – 167. 40. Quoted in Pantsov and Levine, Mao: The Real Story, p. 354. 41. Quoted in ibid. 42. Quoted in ibid., p. 367. 43. Quoted in ibid., p. 353.

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Chapter 26 HMS Amethyst 1. Conclusions of a Meeting of the Cabinet held at 10 Downing Street, S.W. 1, on Tuesday, 26th April, 1949, p. 161. CAB/128/15 TNA. 2. ‘Situation in China’ Memorandum by the Foreign Secretary and the First Lord of the Admiralty, 25 April, Annex A Draft Statement, p. 2. CAB/129/34 TNA. 3. Annex A Draft Statement, pp. 1 – 2. CAB/129/34 TNA. 4. Madden to Commander in Chief, Far East Station, 7 July 1949 cited in Izzard, Brian, Yangtze Showdown: China and the Ordeal of HMS Amethyst (Bransley: Seaforth Publishing, 2015), p. 16. 5. Annex A Draft Statement, pp. 1 – 2. CAB/129/34 TNA. 6. Ibid. 7. Burgess memo, 22 April 1949 cited in Izzard, Yangtze Showdown, p. 38. 8. ‘Lt. Col. Raymond Durie-Obituary’. Available at: ,www.independent.co.uk/ arts-entertainment/obituary-ltcol-raymond-durie-of-durie-1088592.html. accessed 10 February 2015. 9. Annex A Draft Statement p. 4. CAB/129/34. 10. ‘Report on an attempt to secure a safe-conduct pass for HMS Amethyst after she had been crippled by communist gunfire’ – cover letter dated 2 July 1949, pp. 1 – 2. FO 371/75897 TNA. 11. Ibid. 12. Ibid. 13. Ibid., p. 4. 14. Ibid. 15. Ibid., p. 5. 16. Ibid., p. 6. 17. Annex A Draft Statement pp. 1 – 2. CAB/129/34 TNA, p. 5. 18. ORE 45 – 49: ‘Probable Developments in China’, 16 June 1949, p. 3; Feng, The British Government’s China Policy, pp. 116, 135n.22. 19. Izzard, Yangtze Showdown, pp. 99 – 100. 20. Qiang Zhai, The Dragon, the Lion & the Eagle: Chinese-British-American Relations, 1949– 1958 (Kent: Kent State University Press, 1994), p. 14. 21. Jinjun Zhao & Zhirui Chen eds, Participation and Interaction: The Theory and Practice of China’s Diplomacy (Shanghai: Shanghai People’s Publishing House 2013), pp. 108– 9. 22. Stevens, Keith, ‘Lt.Col. Walter Gordon Harmon, “An Old China Hand”’, Asian Affairs, Vol. 44 Issue 3 (2013), p. 437. 23. Urquhart to Stevenson, 11 June 1949, cited in Izzard, Yangtze Showdown, p. 107. 24. Quoted in Ibid., p. 113. 25. Quoted in ibid., pp. 223 – 4. 26. ‘Criminal act of Amethyst must be punished’ Extracts from Chinese Press dated 31 July 1949, 3 August FO 371/75897 TNA. 27. Izzard, Yangtze Showdown, pp. 157– 9. 28. Ibid., pp. 168 – 71.

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29. Coates memo on ‘Admiralty suggestions for pursuing the rights and wrongs of the matter’ 3 November 1949, FO 371/ 75897 TNA. 30. P.W. Scarlett to CG.M. Carde Admiralty, 9 November 1949, FO 371/75897 TNA. 31. ‘Jason Times ‘Youde, Sir Edward (1924– 1986)’, Oxford Dictionary of National Biography (Oxford: Oxford University Press, 20014) available at: ,www. oxforddnb.com/view/article/70398. accessed 25 April 2015. 32. Available at: ,www.hansard.millbanksystems.com/commons/1961/nov/29/ chinese-peoples-republic-united-nations#S5CV0650P0_19611129_HOC_4. accessed 25 April 2015. 33. Yu, OSS in China, p. 276. 34. ‘Active participation of Soviets in China Civil War’, 10 May 1949, CREST CIA-RDP82-00457R002700550010-5. 35. ‘Soviet Interest in Amethyst Incident and in North China Trade Activities’, 6 May 1949, CREST CIA-RDP82-00457R002700490005-8. 36. Ibid; see also the list in ‘Political Information: Active Soviet Personnel, China’, 30 July 1948, CREST CIA-RDP82-00457R001700120005-9. 37. ORE 45 – 49: ‘Probable Developments in China’, p. 4. 38. ‘Cable, Filippov [Stalin] to Mao Zedong (via Kovalev)’, 18 June 1949, CWIHP Bulletin, Issue 16, Fall 2007/Winter 2008, p. 169. 39. ‘Rumored Death of Mao Tse-tung’, 15 July 1949, CIA-RDP8200457R003000020004-6. 40. ‘Mao Tse-tung’s uneasiness over current situation’, 2 August 1949, CIARDP82-00457R003000520001-4. 41. ‘Rumor of death of Mao Tse-tung’, 18 August 1949’, CREST CIA-RDP8200457R003100300005-3. 42. Westad, Decisive Encounters, pp. 260– 1. 43. ‘Memorandum of conversation between Liu Shaoqi and Stalin’, 27 July 1949, at ,http://legacy.wilsoncenter.org/va2/index.cfm?topic_id¼1409&fuseaction¼ home.document&identifier¼2228A01A-E986-9C27-EF34EFFC39AF8499& sort¼collection&item¼Sino-Soviet%20Relations&print¼true. accessed 24 April 2012. 44. Westad, Decisive Encounters, p. 271. 45. Ibid., p. 270. 46. Ibid., p. 288. 47. Ibid., p. 310. 48. Burgess memo, 6 March 1950, FO 371/83315 TNA. 49. Conversation between the Minister of State and the Chinese Ambassador, 5 January 1950, FO 800/462 TNA.

Aftermath

‘Your Future is Very Dark’

1. Dujmovic Nicholas, ‘Extraordinary Fidelity: Two CIA Prisoners in China, 1952– 73’ Studies in Intelligence Available at ,https://www.cia.gov/library/

NOTES

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3. 4. 5. 6.

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

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381

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INDEX

14th US Air Force, 141, 154, 161, 190, 238 19th Route Army, the ‘People’s Revolutionary Army’, 40, 65, 66 30 May Massacre, 9 92nd Nationalist Army, 206, 225 Abramovich, Joffe Adolph, 7 Acheson, Dean, 172, 300, 309 Adler, Sol, 168, 169, 170 Air and Ground Forces Resources and Technical Staff (AGFRTS), 154, 163, 238 Aisin Gioro Xianyu/Yoshiko Kawashima (Chinese princess), 56, 63, 64 Almazov, Leonid, 236 Amerasia, 166, 167, 172, 181 Anti-Bolshevik Corps (AB Corps), 23 Army Security Agency (ASA), 202, 269 Atomic Energy Commission, 255, 257 atomic weapons, 188, 191, 219, 230, 231, 234, 248, 249, 250, 251, 252, 254, 255, 256, 306 Attlee, Clement, 182, 184, 258, 276 Barrett, David, 153, 183, 247 Beijing/Peking, 6, 9, 12 –13, 15, 24, 27, 35, 42 – 5, 52 – 3, 55 – 6, 63,

66– 7, 75, 88, 90 –1, 96, 101 –2, 104, 109, 152, 160, 163, 170, 175–81, 184 –5, 192, 195–6, 198, 231– 2, 236, 249, 252– 3, 256, 265– 6, 273, 287, 289, 303, 305–6, 308– 11, 314, 317, 319, 325–7, 330, 332, 335– 6 Berle, Adolf, 168 Bevin, Ernest, 264, 276, 283, 284, 328 Birch, John, 190, 191, 192 Bland, Sir Nevile, 9 Blu¨cher, Vasily K., 8, 80, 81 Blue Shirts, 19, 29, 88 Bo Gu, 39 Borodin, Mikhail Markovich, 11, 13, 16, 17, 42, 43, 44, 93 Bird, Willis H., 153 Bradley, Omar, 199 Braun, Otto, 28, 39, 46, 50 Brooke-Popham, Robert, 104 British Army Aid Group (BAAG), 159, 161, 238, 239, 242, 243, 244, 246, 270, 271, 272 British Council Scientific Office (BSCO), 249 British Economic and Trade Research Organisation (BETRO), 267, 268 British Military Liaison Office (BMLO), 242

INDEX British Military Mission (BMM), 241, 242, 245, 246 Burkhard, Valentine, 101 Burgess, Guy, 253, 257, 276, 277, 278, 279– 85, 287, 288, 289, 290, 291, 292, 316, 328 Cadogan, Alexander, 73, 74, 101, 103, 104 Cai Tingkai, 40 Caldwell, Oliver J., 136 – 9, 140, 150, 164– 6, 185, 186 Carlson, Evan Fordyce, 93, 94, 97, 98, 99, 100 Carnegie Institute, 249 Carroll, Harry D.G., 250 Caughey, John Hart, 201, 203, 206, 207 CC Clique, 17, 18, 19, 85, 86, 87, 88, 119, 127, 165, 229, 263 Central Intelligence Agency (CIA), 195, 288– 9, 300– 1, 305, 309– 12, 320, 325– 6, 329– 37 Central Trading Agency (Russia), 231, 233 Chambers, Whittaker, 168– 9 Chapelet, Robert, 194 Cheka, 30 Chen Geng, 20 – 1, 27, 92 Chen Guofu, 87, 229 Chen Jiongming, 7 –8, 20, 38, 71 Chen Lifu, 3, 12, 15, 17– 18, 22, 30, 68 – 9, 86, 121 Chen Yun, 16 Chiang Ching-kuo, 129, 131, 248, 311 Chiang Kai-shek, 1, 5, 7 – 23, 25 – 8, 31 – 2, 34 – 43, 46, 50, 58, 63, 65 – 6, 68 – 75, 77 – 9, 82 – 3, 87, 91 – 2, 96, 105– 7, 110– 14, 116– 18, 121– 33, 136, 139– 47, 149, 151– 3, 155– 8, 161– 2, 164– 69, 171– 2, 186– 91, 193– 4, 197– 8, 200– 11, 213– 14, 216– 18, 224– 5, 248,

393

251, 257– 60, 262– 4, 267, 273, 279, 296– 7, 299, 301– 8, 311, 325, 327– 8, 330, 332 China–Burma–India Theatre, 110, 136, 141–2, 145–7, 154, 157, 160 China White Paper, 215, 309 Chinese Communist Party (CCP), 1 – 3, 7– 8, 11– 16, 19 – 24, 26 – 34, 38– 41, 45 – 7, 50 – 1, 66, 68 – 73, 75, 77 –9, 86 – 7, 91 – 2, 107, 109, 115, 117– 22, 124– 6, 128, 130–2, 134– 5, 141– 2, 153– 5, 158–62, 164, 169, 182, 184, 186–7, 188, 191, 195, 200, 202–5, 207, 209–14, 216, 219–20, 223, 227, 229, 31– 2, 234–7, 256, 258, 260– 5, 272–5, 279– 86, 288– 9, 294–300, 302–9, 311 –13, 320–1, 326– 8 Chou Enlai, 6, 8, 11– 12, 15 – 16, 22– 3, 27, 31 – 3, 35, 38 – 9, 46, 50, 68 –9, 71 – 3, 79, 98, 107, 114, 125– 6, 130–5, 15, 157– 8, 160–1, 164– 5, 170, 181, 183, 188, 192– 3, 200, 202, 218, 265, 283, 287– 8, 294–6, 298, 309, 321, 326– 7 Chu Teh, 20, 32 – 4, 37, 45, 50 –1, 75, 154, 182, 188, 196– 7, 206, 245, 282, 296– 7, 326 Chungking, 1, 35, 65, 72, 79, 83– 4, 90, 99, 103 –8, 110–11, 113–16, 118, 123, 125– 8, 130, 134, 139, 146, 150, 152– 3, 155–9, 161, 164– 6, 168–9, 171, 177, 180– 5, 188, 190– 6, 198, 213, 215, 223, 229, 231, 241, 243, 245– 6, 249–50, 256, 260, 265, 268, 278, 294, 296, 321, 327 Churchill, Winston, 9, 103, 109, 142, 152, 170, 183, 186– 7, 246, 258–9

394

THE SECRET WAR

Clark, John, 249 Clarke, W.G., 108, 268– 70 Coe, Virginius Frank, 169– 70 Cohen, Morris, 2 Comintern, 7 – 8, 10 – 11, 16, 23 – 4, 28, 30, 39, 42 – 55, 70, 75, 88, 101, 125, 130– 3, 156, 160 Communist Party of the United States of America (CPUSA), 50, 169 Cumming, Mansfield, 5, 101 Currie, Lauchlin Bernard, 168, 171 Dai Li, 3, 17 – 19, 22, 26, 30– 1, 40 –1, 66, 71 – 3, 76 – 7, 79, 82 – 4, 86 – 7, 90 – 2, 96 – 7, 105–7, 110, 112, 118, 121, 123, 125– 7, 129– 30, 132, 137– 9, 149– 53, 156, 161, 164– 6, 181, 186, 188– 9, 192, 200, 218– 19, 229, 231, 246, 264, 332 de Graff, Johann, 48 – 52 De Wiart, Adrian Carton, 152, 183, 258– 64 Dennis, Eugene, 50 Dewar-Durie, Raymond, 35 – 8, 317 Denham, Godfrey, 8, 104 Dimitrov, Georgi, 117, 125, 133 –4, 164 Ding Mocun, 29, 86, 88, 121 Dixie mission, 97, 154, 188, 193, 297 Doihara, Kenji, 56, 60 – 1, 63 –4, 85 – 7 Donovan, General ‘Wild Bill’, 107, 143, 149– 56, 161, 166, 188, 194, 248 Drage, Charles, 103 Du Yuesheng, 14, 17, 77, 90, 311 Duff, Arthur, 111 Dulles, Allen, 156, 334 East Asia Yellow Way Association (EAYWA), 86 Eden, Anthony, 276 Edwards, R.S., 161

FOR

CHINA

Eifler, Carl F., 142 Eitingon, Naum Isakovich, 12 Ellis, Dick, 285–6 ‘encirclement’ campaigns, 22, 33 – 5, 39– 40, 50, 69, 73 Fairbank, John, 65, 152– 3 Fanning, Paul, 185– 6 Fang Zhimin, 39 Federal Bureau of Investigations (FBI), 95, 126, 129, 149, 166– 9, 171–2, 329 Fu Bingchang, 186, 304 Fu Manchu, 185 Futian incident, 23 Gande, W.J., 108 – 9 Garnons-Williams, G.A., 265 Gestapo, 112, 224, 264, 329 Government Communications and Cipher School (GC&CS), 102, 158, 162, 259, 261– 2 Greece, 259, 266 Green Gang, 14 – 15, 17, 20 – 1, 65, 77, 85– 6, 90, 164, 180, 311 Gromyko, Andrei, 327 Gu Shunzhang, 20, 26, 30 Gu Zhutong, 123, 156 Guang Huian, 16, 30 Gui Yongqing, 112, 127– 8 Hainan island, 106– 7, 284, 328– 9 Hambro, Charles, 107 Hao Pengju, 190 Harbin, 12, 25, 44, 53, 57 – 9, 63, 66– 7, 76, 80 – 1, 105, 162–3, 194, 205, 225, 236– 7, 253, 297, 301 Harmon, Walter Gordon, 114–15, 157–8, 175, 177, 183– 4, 243, 258, 265, 278, 321 Hawthorne, Carl, 237 Hennessy, James T., 194 Hidaka, Tomiaki, 220, 236

INDEX Hill, Frank Liot, 115, 158 Hillenkoetter, Roscoe, 309, 310 Hiss, Alger, 168 Hiss, Donald, 168 HMS Amethyst, 291, 314– 27 Hollis, Roger, 52 –3, 55 Hong Kong, 4, 9, 24, 39, 41, 45, 49, 52, 72, 86, 89, 95, 102 – 7, 109– 11, 118– 19, 127, 160, 163, 177, 219, 239–40, 242 –3, 258, 260, 265– 7, 269– 72, 274, 278, 280, 283– 5, 287, 289– 91, 303, 310– 11, 321, 323, 325–6, 330– 3, 336– 7 Honjo¯, Shigeru, 60 Hoover, J.E., 129, 172, 329 Hu Zongnan, 132, 145, 296 Hurley, Patrick Jay, 145, 147, 153, 155, 182, 184, 187, 193 India, 13, 45 – 6, 53, 105, 110, 136, 142, 150, 154, 157, 160, 194, 239– 42, 272 Institute of International Relations (IIR), 153, 230 Institute of Pacific Relations (IPR), 160 Ismay, Hastings, 261– 3 Jahnke, Kurt, 112, 127– 8 Japanese intelligence, 58, 67, 85, 103, 119, 150, 162– 3, 180, 220, 230, 235– 6 Joint Intelligence Committee (JIC), 157, 249, 260, 271, 278, 285 Judd, Walter, 205 Juntong (Bureau of Investigation and Statistics for the Military Affairs Commission), 72, 84, 87 – 91, 103, 105– 6, 110, 118, 120, 122– 3, 125– 7, 132, 137, 139, 149– 50, 155, 157, 159, 216, 218– 19, 221, 228– 32, 235– 6, 252– 3, 267

395

Kagesa, Sadaaki, 85, 119, 121 Kang Sheng, 16, 29, 78, 118, 122, 130–3, 155, 158, 160, 256 Kantorovich, A.I., 42 Karakhan, L.M., 9 Kawabe, Masakazu, 75 Kawamoto, H., 123, 213 Kell, Vernon, 52, 54 – 5 Kempeitai (Japanese military police), 67, 85 –7, 91, 124, 253, 307 Kennan, George, 299– 300 Kenshiro, Shibayama, 124 Kerr, Clark, 106, 187 Keswick, John, 152, 156, 160– 1 Keswick, William, 108, 110–11 Khabarovsk Protocol, 25 Khalkhyn Gol battles, 79, 81 Kijuro, Shidehara, 59 Killery, Valentine, 107, 109– 10 King, Ernest, 148 Kitson, George Vernon, 49– 50, 90 Knatchbull-Hugessen, Hugh, 73 – 4, 77– 8 Komatsubara, Michitaro, 80 – 1 Komoto, Suemori, 60 Korea, 56 – 7, 107, 109, 111, 172, 210, 220, 223, 264, 285, 310, 327, 329–32, 334 –6 Koreans, 223– 4, 234 Kozhevnikov, Evgeni Mikhailovich, 44– 5 Krivitsky, Walter, 55 Kuomintang (KMT), 1 – 16, 18 – 30, 32– 45, 49, 58, 68 – 79, 82, 84 – 7, 89– 91, 112, 115, 117– 23, 126, 128–9, 131– 5, 139, 141 –2, 145, 149, 155– 6, 158– 9, 161–2, 169, 175, 183– 4, 188, 191, 194– 5, 200, 202– 7, 210–11, 213 –17, 219, 220, 223, 226, 228– 33, 235–7, 241, 251– 2, 261–4, 267, 272–3, 275, 278, 281, 284– 5, 290, 294– 313, 317, 323, 325–8, 330

396

THE SECRET WAR

Kutuzov, Mikhail, 298 Kung, H.H., 40, 69– 70, 87, 127, 143– 4, 164, 196, 214 Kwantung Army, 58 – 61, 63 – 4, 66 –7, 79 – 80, 187, 189, 216, 231, 236, 247, 251– 3, 330 Lattimore, Owen, 160, 171 Leahy, William, 148, 166 Lenin, V.I., 6 – 7, 11 Li Kenong, 22, 27 – 8, 135, 298 Li Lisan, 16, 21, 26, 130 – 1, 237, 288, 297 Li Qiang, 24, 298 Li Shiqun, 86– 90, 118– 19, 121, 123– 4 Li Yuan-hung, 6 Li Zogren, 305– 6, 311, 327 Lindsay, Michael, 174 – 80, 182 – 4, 198 Liu Yafo, 39 ‘Long March’, the, 15, 22, 41, 118, 307 Lord Inverchapel, 261 Lu Zhiying, 29 Lyushkov, G.S., 80 MacArthur, Douglas, 96, 147, 189, 309– 10, 312 Maclean, Donald, 106, 257, 276– 7, 292 Macmillan, Harold, 292 Manchukuo, 60 – 1, 63 – 4, 104, 189, 197, 201 Manchuria, 12, 18, 24 – 5, 41, 45, 49, 56 – 61, 63 – 8, 74 – 6, 79 – 80, 104 – 5, 107, 111, 125 130, 147, 154 – 5, 162 – 3, 174, 185 – 7, 189 – 90, 192 – 7, 200 – 7, 210, 216, 220, 222 – 5, 227, 229 – 31, 235, 255 – 7, 259 – 61, 264, 273, 278, 281, 288 – 9, 295, 299 – 300, 307, 309, 329, 331 – 3

FOR

CHINA

Mao Tse-tung, 1 – 3, 6, 11, 16, 20, 22– 3, 29, 32 – 4, 39, 41, 45, 52, 67– 74, 98 – 9, 116– 19, 122, 124–5, 129, 130–5, 143–5, 151–2, 154– 5, 158, 160, 162, 164–5, 169– 171, 182 –4, 186–90, 192 –4, 196– 8, 201– 5, 209, 213, 220, 228, 236– 7, 256–61, 264 –5, 267, 272–3, 278, 280– 1, 283, 285, 288– 90, 293, 295– 6, 298–303, 306– 9, 311–14, 320 –2, 325– 7, 329–30, 332 –3, 336– 7 Marco Polo bridge incident, 74, 76 Marshall, George, C., 143, 145, 147, 159, 161, 169, 172, 195, 199–212, 218, 223, 227, 261–3, 295, 299 McCarthy, Joseph, 166 – 7, 172– 3, 215 McGlure, Robert, 153 McNeil, Hector, 277, 328 McQuillen, Francis, 211 Melby, John, 214 Menzies, Stewart, 101, 103– 4, 113, 115– 16, 148, 159, 274–5, 287 MI5 (Security Service), 45, 52 –5, 102, 270–1, 274, 283, 285 Miles, Milton E., 18, 24, 38, 78, 102, 114, 148– 9, 152–3, 159, 161, 175–7, 186, 188, 200, 209, 218, 316–17, 322, 329 Miyazaki, Toshio, 94– 5 Mo Xiong, 38 – 40 Molotov, V.M., 313 Mongolia, 57, 59, 63, 77, 80, 111, 114, 148, 155, 186, 200, 205, 227, 229, 264, 310 Morgenthau Jr, Henry, 168, 170 Mukden, 49, 58 – 60, 63, 190, 192, 194–5, 197, 198, 203, 220– 2, 225–6, 231, 235–6, 251–5, 260–2, 281, 300, 309, 334– 5

INDEX Mukden incident, 60 Mutaguchi, Renya (Japanese officer), 74 Nanking, 14 – 15, 21 – 2, 26 – 8, 31, 34 – 5, 63, 69 – 70, 72 – 3, 78 – 9, 82 – 3, 85 – 7, 89 – 91, 96, 116, 118, 122, 131, 136, 158, 163, 187, 189, 201, 205, 209, 211, 213 – 15, 225, 227, 231 – 3, 235, 237, 241, 251, 258, 260, 264, 266 – 7, 271 – 2, 281, 284 – 6, 297 – 9, 301, 305 – 6, 310 – 11, 315, 317, 319 – 21 Naval Group China (NGC), 148 Nemotsu, Takashi, 216 New Fourth Army, 117– 19, 121– 2, 124, 130, 187, 225 Nieh Jung-chen, 179 NKDV (Soviet Secret Service); MGB from 1946 onwards, 23, 57, 75–6, 80, 83 – 4, 11, 125, 131, 134, 156, 164, 167– 9, 173, 193, 220, 226, 228– 9, 231– 4, 285, 306, 313 Noulens, Hilaire, 30, 46– 8, 53 nuclear weapons, 234, 248, 262 Office of Naval Intelligence (ONI), 3, 94, 167, 223 Office of Strategic Services (OSS), 3, 44, 65, 83 – 4, 107, 111– 13, 136– 40, 142, 149– 56, 163– 7, 185– 6, 188– 92, 194– 6, 204– 5, 215, 218, 223– 4, 238– 40, 243, 245– 9 OSS ‘Cardinal’ mission, 194 OSS ‘Chili’ mission, 192 OSS ‘Flamingo’ mission, 194 OSS ‘Spaniel’ mission, 188, 192 Oggins, Isaiah, 75 – 6 Onouchi, Hiroche, 57, 66 – 7 Operation Barbarossa, 125 Operation Crossroads, 233 – 4 Operation Ichigo, 141 – 2, 214

397

Palairet, Charles, 9 Pan Hannian, 16, 68 – 9, 118– 9, 121, 124, 127 Pavlovski, Petro, 156 People’s Liberation Army (PLA), 119, 200, 207, 210, 220, 227, 256, 260, 264, 274, 278, 280, 288 – 91, 297–9, 301– 2, 305– 13, 315, 317–23, 325, 327– 8, 330, 332 Pershing, John J., 199 Philby, Kim, 102– 3, 257, 292 psychological warfare, 161 Pu Yi (Emperor) 4, 6, 10, 60– 4, 189–90, 194 Puleston, William D., 94 – 5 Qian Zhuangfei, 22, 41 ‘Rectification Movement’, 122, 133, 158 Red Squad, 19 – 21, 27 – 30, 45 ‘Renaissance Society’, 18 – 19 Robertson, Walter, 195, 202–3 Roosevelt, Franklin, 94 – 5, 98, 126, 136, 141– 7, 152–3, 164, 166, 168, 170, 188, 199 Roschin, Nicolai, 125 Royal Air Force (RAF), 239, 241 Sargent, Orme, 274 – 5, 287 Secret Intelligence Service (SIS/MI6), 3, 5, 7– 8, 13, 42 – 6, 48 – 9, 51 – 4, 101–11, 113 –16, 148, 157– 8, 160–1, 166, 175, 177, 183, 195–7, 216, 224, 226, 237, 240–1, 243– 4, 249, 258–62, 265–69, 271, 273– 5, 278, 280, 284– 7, 290–2, 321 Seeds, William, 51 Shandong, 5 – 6, 16, 190, 206, 299, 302 Shangguan Yunxiang, 117 Shanghai, 5, 7 – 9, 12 – 17, 19 – 24, 26– 35, 38, 40, 42 – 50, 52 – 5, 57, 64– 5, 72, 75 – 9, 83 – 98, 102,

398

THE SECRET WAR

104– 5, 107– 110, 114, 116, 118– 23, 129– 30, 132, 134, 155, 159, 163, 177, 179, 189 –90, 209, 211, 213– 14, 218, 223– 4, 226, 228– 34, 237, 241, 250, 254–6, 260, 262, 266– 71, 281, 286, 293– 5, 303– 4, 307, 310– 12, 315– 16, 320– 1, 323– 4, 331 Shanghai Municipal Police (SMP), 17, 19 – 21, 27 – 8, 30, 65 – 6, 89, 92, 108, 268– 9 Shen Zhiyue, 1, 129 Shipton, Eric, 249 Shintaro¯, Nakamura, 58 – 9 Shun, Akikusa, 66 – 7 Siebler, Herman, 46 Silvermaster, Nathan Gregory, 168– 9 Sinclair, High, 9, 45 – 6, 49, 101– 4 Singlaub, John Kirk, 222– 3, 300, 309– 10 Sino –American Cooperative Organisation (SACO), 107, 111, 126, 149– 53, 161, 163 Smedley, Agnes, 45, 52 – 5, 65, 98 Sneevliet, Henk, 7 Social Affairs Department (SAD), 122, 132, 135 Society for Vigorous Practice, 18 Soong Ching-ling, 5, 31, 46, 72, 188 Soong Mayling, 17, 70 – 2, 78, 87, 127 Soong T.V., 38, 43, 65, 72, 87, 114, 126, 146, 154, 156, 167 Sorge, Richard, 45– 6, 52, 83, 124, 160 South East Asia Command (SEAC), 154, 265 Spear, C.R., 102 Special Operations Executive (SOE), 3, 107– 13, 115– 16, 152, 155– 7, 159, 161, 195, 267 Stalin, Josef, 12– 14, 23, 25, 44, 57, 69 – 71, 73, 76 – 7, 79 – 81, 117, 124– 5, 130– 1, 133–5, 143, 155, 164, 168, 186– 7, 190, 193– 4,

FOR

CHINA

197, 200, 204, 223, 250, 257, 260–1, 264, 275, 278, 280, 283, 289, 299, 302, 304– 8, 311– 13, 316, 326– 7 Stennes, Walther, 83 – 4, 124 Stilwell, Joseph, 136, 140 – 7, 165– 6, 181, 200 State Department, 136, 149, 153, 166–8, 195, 207–8, 215, 248, 278, 282, 288, 290, 299–300, 312 State Political Directorate under the NKVD (GPU), 23, 25, 30, 55, 57, 80 State Political Security Bureau (SPSB), 23 Steptoe, Harry, 45– 7, 102– 3, 109 Strategic Services Unit (SSU), 195, 226–34, 247, 250– 1, 255, 266–70, 310 Stuart, John Leighton, 175, 177 – 80, 207–8, 214, 288, 303, 312 Sun Fo, 279 Sun Yat-sen, 2 –11, 17, 38, 48, 54, 71– 2, 127, 131, 135, 193, 295, 304 Tanaka, Gi-shi (Japanese prime minister), 57 Taiwan, 214, 230, 248, 290– 1, 299, 305, 308, 310, 324– 5, 327– 32 Tangku truce, 66 Tass news-agency, 195, 228, 231, 233–4 Tatekawa Yoshitsugu, 59 – 60 Taylor, Maxwell, 199 Tietsin, 27, 41, 61– 2, 177, 195, 198, 208–9, 214, 217, 220, 227– 8, 231–2, 241, 256, 266, 270, 281, 284, 305– 6, 309 Times, The, 52, 184, 265, 288, 291 Timberman, Thomas S., 165, 203 Tito, Marshal, 192, 281, 283, 312– 13 Titoism, 283

INDEX Tojo, Hideki, 56 Toschio, Hishimura, 67 Trotsky, Leon, 8, 12, 75 Truman, Harry, 172– 3, 194– 5, 200, 202, 204, 207–11, 223, 309, 329 Tsao Shih-cheng, 235 Tsingtao, 5, 226– 7, 232, 234, 266, 281, 326 Tyrrell, William George, 9 Un-American Activities Committee, 193 United Investigation Office (Japanese intelligence), 85 United Nations Relief and Rehabilitation Administration (UNRRA), 110, 272, 294– 5 Uranium, 249– 57, 288 USS Sierra, 226 Venona, 167 –9, 172, 193, 226, 276 Virendranath Chattopadhyaya, 53 Vivian, Valentine, 42, 46 – 7, 51, 53 – 54 von Falkenhausen, Alexander, 34, 114 von Pappen, Franz, 12 Wang Jingwei, 10, 12, 42, 71, 78 – 9, 82, 87 – 8, 118– 23, 127, 189 – 90 Wanshan island, 328 War Office (Britain), 107, 157, 179, 224, 260– 1, 271, 286, 290 Wedemeyer, Albert, General, 147– 8, 153– 5, 159– 61, 163, 188, 191– 2, 200, 203, 207, 228, 232, 247 Whampoa Military Academy, 7 – 8, 11 – 12, 17 – 18, 20 –1, 32, 34, 42, 84, 126– 7 White, Harry Dexter, 169 White Russians, 57, 163, 219 – 20, 222– 3, 228, 234, 266– 8 Worton, William, 95 – 7 Wu Shih, 2

399

X-2 Branch, 219, 227– 8, 230– 1, 238, 241– 3, 245– 6, 250–6, 266, 268 Xiang Yunian, 39– 40 Xiang Zhongfa, 29 Xiong Xiang-hui, 132, 296 – 7 Xu Enzeng, 3, 18, 22, 26 – 7, 77, 86 – 7, 107, 121, 155 Yalta conference, 155, 162, 179, 187, 227 Yan Baohang, 87, 125, 155, 325 Yangtze river, 34, 43, 102, 106, 117, 123–4, 142, 198, 207– 8, 237, 278–9, 282, 291, 307, 310, 314–15, 317, 320, 322– 3, 326 Yasuyi, Okamura, 187– 9, 213 Yenan, 1, 71, 97, 99, 114, 118, 122, 124–6, 129– 31, 133– 4, 143, 152–6, 158, 160–1, 166, 179, 181–4, 186, 193–8, 203–4, 210–11, 216, 220, 235, 247, 259, 261–2, 273, 293–7, 299, 307 Yuan Shikai, 4 – 5 Yugoslavia, 192, 259, 283 Yung Chen, 60 Yunnan, 5, 41, 155, 165, 241–2, 280, 325, 330 Zarubin, Vasili, 83 Zhang Shenchuan, 24, 26 Zhang Zhizhong, 76, 311 Zhang Xueliang, 25, 58– 9, 61, 68– 9, 71, 73 Zhang Zongchang, 13 Zhang Zuolin, 15, 24 – 5, 42 Zhongtong (Central Bureau of Investigation and Statistics), 87– 9, 103, 120–1, 130, 149, 155, 207, 218– 19, 230, 285, 287, 298 Zhoushan island, 81 Zhukov, Georgii, 237