The Secret History of MI6 - Keith Jeffery [412]
SIS’s problems in China have to be set in the context of the wider demands for intelligence from across the world placed on the Service by its customer departments, and the expectations which those customers had of what SIS could in fact do. This issue was raised by Orme Sargent early in 1948 when he wrote to Menzies complaining about the lack of warning the Foreign Office had received of recent disturbances in Kowloon (which had prompted an attack on the British consulate-general in Canton) and of unrest and violence in Baghdad. ‘I must confess that I am a little perturbed’, he wrote, ‘to find that your organisation was unable to give us any warning of the course which events were likely to take recently in Kowloon and Baghdad.’ Evidently alluding to the Communist political challenge in Western Europe, Sargent was ‘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 reassuringly about France and Italy, where he thought the supply of intelligence was well covered. As for the particular cases of Kowloon and Baghdad, he quite reasonably argued to Sargent that it did not fall ‘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’. The ‘task of Secret Intelligence’, he argued, ‘is to amplify the general warnings of H.M. Representatives and to attempt to penetrate the hostile elements sufficiently to procure fore-knowledge of their general plans’. He went on to explain why SIS had been unable to do more concerning the specific instances raised. He pointed out that in China his organisation was ‘barely under way’, and the seriousness of the Kowloon situation had presumably been reported on by MI5’s local Defence Security Officer or consular officials. In Iraq, he admitted that the SIS representative had concentrated more on government sources than opposition contacts, but maintained (slightly lamely) that he had been quick to report when the riots started.7
Faced with the closing down of SIS’s intelligence assets in China and increasingly insistent demands for information from customer departments, Ellis went out to Hong Kong to assess the situation and came to the conclusion that there was no alternative but to exploit the existing liaison with the Nationalist Chinese. Telegraphing to London early in 1949 he observed that SIS’s ‘China set-up’ had been created in 1945 ‘as a long range project with no early demands on its productivity anticipated. Since then’, he continued, ‘events and fact-hungry departments have forced us to shorten range and speed up pace’. Currently, results were ‘far too meagre’, and if production was to be expanded he thought that ‘orthodox methods’ would have to be supplemented by an arrangement which Nationalist Chinese contacts had first suggested to the head of station at Nanking, at the end of 1948. The Chinese had proposed, for a payment of £3,000 per month (equivalent to £75,000 today), that they would make ‘available all material, replying to special enquiries and undertaking specific tasks, maintaining and extending W/T and courier services’. They also offered, if needed, ‘full collaboration’ in breaking Communist codes, ‘building up stay-behind network and co-operating in all efforts to penetrate Russian or Russian F.E. [Far East] occupied territory’.
In effect what was offered was a prefabricated intelligence service apparently able to provide precisely the kind of information and penetration that SIS’s customers were demanding. Ellis recognised that the cost was high, but was so taken with the scheme that he suggested saving money elsewhere on the SIS budget by cutting the size of existing stations in China. Code-named ‘Salvage’, the proposal was adopted, and in spite of misgivings in