1928-07-05 — Page 3

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THE HONG KONG DAILY PRESS, THURSDAY, JULY 5th, 1928.

RUSSIAN GOLD FOR BRITISH REDS.

HOME SECRETARY'S DISCLOSURES.

£28,000 PAID IN NINE MONTHS.

THROUGH SOVIET BANKS. IN LONDON.

LONDON, June 11th.

Definite proof that British Communists are being paid with Russian money was given by Sir William Joynson-Hicks, the Home Secretary, in the House of Commons.

Between July 1927 and last April no less than £27,999 passed through the London office of the Moscow Narodny Bank on its way to the Communist Party or its allied bodies. Of this at least £10,330 passed through the hands of the Commercial attaché at . the Soviet Embassy last year.

One employee of the Moscow Narodny Bank and two employees of Centroymus (the Bolshevik trading organisation in this country) were named as being directly concerned in these transactions, and all have been dismissed by their employers.

The directors of the bank disclaim all personal knowledge of the transactions in question.

Sir W. Jonson-Hicks some time ago announced that notes found on Irish gunmen arrested in London before Easter had been. traced to a Russian banking institution in this country. There

upon, the Moscow Narodny Bank challenged this statement and invited investigation.

4

Armed with information which was the result of previous police inquiries, representatives of the Home Office undertook the investigation, and after considerable difficulty-"it was only by degrees that information was extracted," said the Home Secretary-the facts summarised above were established. '

EMBASSY ATTACHE'S '£20,000.

HOUSE OF COMMONS, June 11th. It was known beforehand that the Home Secretary would make an important statement in the House to-day on Russian paymente to British Reds, and the House was unusually full in consequence.

The statement, in answer to a question by Sir W. Davison, AS contained in a typewritten docu- ment, and was one of the longest answers ever given in the House He read the principal parts and. circulated the whole answer with the official Parliamentary report

Mr. Rameay MacDonald after wards referred gravely to "This very interesting revelation," and there were a number of supple mentary questions in which Mr. Saklatvala, the one Communist M.P., figured prominently.

Loud cheere greeted a suggestion by Mr. O. Locker Lampson (C., Birmingham), that it should be made a criminti offence for anyone to receive foreign money for sub- versive purposes.

Sir William Joyaron-Hicks said that as the result of inquiries the police had been able to furnish. information indicating that money for various Communist organisa- tions had passed through the Mos- cow Narodny Bank, London. This information did not purport to be An exhaustive catalogue of the moneys reaching these organisa- tions, but it indicated that the Moscow Naroday Bank was 'the channel through which during the past six or eight months large sums had passed to Communist organisations.

Challenged, Statement,

As the result of his reply to a question in Parliament on April leth with regard to Bank of Eng- land notes, found on persona de- scribed as "Irish gunmen," the two Russian banks in this country, the Bank of Russian Trade and the Moscow Narodny Bank, wrote to him challenging his statement and offering facilities for investigation.

So far as the Bank for Bassian Trade was concerned, said Sir William, the matter related to two B10 notes found in the possession of Michael Burke, alice Smith, when he was arrested on March 17th.

Not Yet Traced. These notes passed through the bank, and the bank informed his representatives that on November 9th, 1927, they 'despatched them by registered post with other notes amounting to £0,800, to the Guar antee and Credit Bank, another Soviet institution, in Berlin.The subsequent movements of these two notes," added Sir William, have not yet been traced."

Ae regards the Moscow, Narodny. Bank, he received on April 19th à letter signed by M. Gourevitch, the acting chairman of the bank, stat ing:

I desire to state most empha tically that the Bank is solely engaged in ordinary banking and commercial transactions, and has, to its knowledge, had no dealings at all with Irish or other gun,

mėn.

To this letter. Sir William stated that he caused a reply to be sent

in which he said:

"Apart from the incident which gave rise to the recent question in Parliament, the Secretary of State has cognisances of certain recent tramactions of your Bank which prima facie do not fall within the category of ordinary banking and commercial transac- tions, and be welcomes, the op- portunity of ascertaining the ex- planation which the Bank have to offer of the circumstances in which they were undertaken. He suggested that the necessary particulars should be ascertained by members of the Home Depart ment.

Duncan sold large quantities of dollars for bank notes, and instruct ed the Moscow Narodny Bank mes- senger to take them to the Bank of England and other banks and exchange them for Treasury notes. This continued from October 27th. 1937, till February 15th last, when be opered an account at the Mos cow Naroday Bank.

The total sum involved in Duo- can's transactions from October 27th, 1927, to April 20th, 1928, was at least £14,202.

WBS

On April 20th, as the result of publicity given to allegations against the bank, Duncan called on for an explanation, and as it was unsatisfactory he Was dismissed.

"Of the real nature of his trane- actions," said Sir William,there can be no doubt, for a considerable number of the Treasury, notes re- ceived by: Duncan from the Moscow Naroday Bank or ita messengers have been definitely traced 45 having passed within a few dayı into the hands of the. Communist Farty."

T. Quelch And F. Priestley, Sir William next dealt with transactions by F. Quelch and F Priestley, two employees of Ceu- trosoyus, Limited.

Between July 3th and November 20th, 1027, some £10,000 worth of £3- Bank of England notes, in batches of £500 to £2,000, were exchanged for £1 notes by them over the coun ter by the cashiers of the bank. In addition, £1,300 in bank notes wai paid into their joins account

which my staff were told was for the purpose of clearing up 'the affairs of Mestkom (the Union of Soviet employees). Priestley told them that the notes paid into the joint account were given to him by Alexander Squair, the secretary of Mestkom."

On September 9th and 20th, 1927, Quelch sold dollars to the value of #2666 to the cashier of the Moscow Naroday Bank and received £1 notes.

The total sum involved in Quelch and Prestley's transactions from July 5th to November 20th, 1997, amounted to at least £13,799.

"A considerab'e number of £1 notes received by Quelch or Priest- ley from the Moscow Narodny bank as a result of the exchanges described above were definitely traced, within a few days, to the Communist Party of Great Britain and its allied bodies.

The board of Centrosoyus called on Quelch and Priestley to give an explanation, and as they were un- To this suggestion the Bankable to do so satisfactorily, they agreed, and he (Sir William) de- were dismissed. tailed two members of his staff to attend at the Bank and make in- vestigations

The Home Office investigators, continued Sir William,

were assured that all supplies of S Treasury notes required by the Bank

were obtained against cheques drawn on the Bank's account with Lloyd's Bank, High Holborn.

No Records Kept.

Their enquiries" bave,” catablish- ed, however, that, in addition to the Treasury notes obtained as above, large quantities of Trea- sury notes, amounting in all to over £17,000, have been obtained by messengers of the bank against exchanges of Bank of England notes at the Bank of England, Lloyds Bank, High Holborn, and the Midland Bank (Overseas Branch).

They found that since March 4th, 1927, no record of the núm. bere of Bank of England notes had been kept by the cashier with the exception of new notes ob- tained from Lloyds Bank.

OX+

These transactions, therefore, did not appear fully, as they should have done, in the records of the Bank, and it was only by degrees that information regard- ing these transactions wa tracted from the cashier and the meezengers of the bank after re- peated assurances that no sup plies of Treasury, notes had been drawn otherwise than against cheques from Lloyds Bank, High, Holborn, or in small sums from the Bank of England.

Mr. W. B. Duncan.

Mr. Shannin. Sir William continued:

As stated, Quelch and Priestly exchanged through the, Moscow Naroday Bank large quantities of £ notes in batches of 3500 to £2,000. My representatives ascer tained the serial numbers of these Es notes to the extent of £10,330, and by this means they were able to establish that they formed part of £20,000 handed by the assistant cashier of the Moscow Naroday Bank to Mr. Shannin, commercial attaché of the U.S.S.R. at the Soviet Embassy; on May 25th, 1927, as follows: £1,000 in £1 notes and £18,000 in £5 Bank of England noter.

This payment was debited to an account with the Bank of the Edel Metalle Vertriebs A.G. of Berlin, on which Mr. Shannin apparently had authority to operate.

It is obvious that the £16,000 n £8 notes which Mr. Shan in re- ceived in May 1927 must have been held by some person, who re leased them to Quelch and Priest ley in batches of from £300 to 22,000 as required."

I find, therefore, that through these three persons, Duncan, Quelch, and Priestley, a total sum of not less than £27,908 was dis bursed for Communist purposes". during the period July 5th, 1997, to April 20th, 1028, and that at least £10,330 of this sum derived from a payment of £5 Bank of England notes made, through the Moscow Naroday Bank to the commercial attaché at the Soviet Embassy in May

1927.

Was

The inquiries of the Home Office representatives brought to light In a statement the directors of two series of transactions, which the bank, individually and collec were undoubtedly the channels tively, disclaimed all knowledge of through which money, was supplied the transactions. to Communist organisations during the period July, 1997 to April 1929.

These transactions extended from October 27th, 1927, to April 20th, 1998, and were carried out by W B. Duncan, a clerk in the Foreign Exchange department of the bank Sir William added:

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SOME OF BROADMOOR'S INHABITANTS.

[BY A SPECIALIST IN MENTAL DISEASE]

|before trial, or after conviction, or

during imprisonment.

weke

According to the criminal statis tics for 1928, which have just been made available, 50 of the 147 insane criminals admitted to mental hos pitals during that year

King's Pleasure Lunatics"-that is, a little more than a third were At the Leeds Assizes a girl aged found insane by a judge and jury Mr. J. E. Thomas (Soc., Derby) asked whether, if statements were 14, indicted for the murder of her either on arraignment or by the made that Russian money was com guilty but insane. She therefore remaining 51 were not discovered three-years-old sister, was found verdict of Guilty but Insane. The ing into this country for the pur- was ordered to be kept in custody as insane until they had been con- pose of injury to the State, the Government would either test that

"until his Majesty's pleasure shall victed and were serving their sen outright or stop those making such course of events this means that. In some of these latter types of

become known.” In the ordinary tences in prison. Some of them, at any rate, THE HOME SECRETARY: It is not the will be sent to the State cases the insanity appears to ariso as the result of their imprisonment, criminal asylum at Broadmoor, p were known to the directors on possible to stop anybody from mak April 20th, since, as a result offing such a statement. If I find mental hospital erected and main ing the criminal act, discovery. This institution is in reality a and possibly from the shock attend committee of inquiry appoint money is coming into this country tained by the State, the patients trial, and conviction. In others ed by them on that day, Duncan which, in the opinion of my legal being paid for out of the rates of their insanity bears the stamp of dismissed from the bank. advisers, is a crime, I will take pro- the borough or union to which they their environment, but differs in no This fact was, however, not dis- coedings. closed to my staff on their firet

are chargeable. But any county or other way from similar cases out- visit to the bank on Friday, said the Communist Party had 41mental hospital may

Mr. SAXLATVALA (Com, Battersea) borough asylum and any registered side prison.

Habitual criminals tend to de April 27th, and it was not until international sections, with more criminal lunatics. A velup a type of mental disease that towards the close of their second than a million members, each of These persons are divisible into is peculiarly their own. They be visit on Monday, April 30th, when whom paid a subscription to a cen several groups: First, there are come egotistical, hypochondriacal, they asked a direct question re-tral fun at Moscow. Ho suggested those who were proved to have been and intolerant of discipline. garding a particular payment to that the payments revealed by the insane at the time their criminal They develop delusions of grandeur Duncan, of which they found a Home Secretary were made out of act was committed secondly, there and persecution; make frequent ap-s record in the counter cash book, that fund.

are those who at the time of their plications for special privileges and that they were told of Duncan's

Mr. MAXTON (800, Glasgow), trial were found to be too insane write long petitions dealing with dismissal a week before.

chairman of the Independent to plead. These two groups com- fancied grievances, declaiming the Labour Party, asked whether the promise those who are known offi- while their innocence and wrong Houm Secretary would dare to in- gially as the King's Pleasure detention. vestigate the funds of that party in Lunation.” the same way.

In contrast with these are the The HOME SECRETARY: If I Secretary of State's Lunatics." thought it desirable. I should dare | These consist of three groups-those to do anything.-Daily Mail. ̧ ̧ who have been certified as insane

Was

All its transactions are audited twice yearly by Mesers., Deloitte, Plender, "Grifiths & Co. The Bank is prepared immediately to give all facilities to this firm or It must have been obvious that to any other first clase firm of Duncan's transactions were prima accountants to satisfy themselves facie of the very kinth which they se to whom and in what circum- had been appointed to investigate, stances all payments have been and I do not understand why their måde by it at any period you attention was not drawn to them in please.

response to their first inquiries."

receive

They eventually become expced- ingly violent towards the police and prison officials, and end in being the most dangerous of the patients admitted to Broadmoor,

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