The ARCOS Tangle ~ Macartney & Mackenzie ~ The Federated Press Undone

By early 1927, Anglo-Soviet relations were deteriorating. Russian espionage and open support for industrial unrest in Britain added to the Conservatives’ desire for a diplomatic breach, strengthened by growing OGPU harassment of foreign diplomats in the USSR. British officials in Moscow, London and elsewhere had long complained about interference by Soviet security organs. In April 1925, for example, Robert Hodgson informed the Foreign Office that security staff at the Italian Embassy in Moscow had discovered two microphones connected to OGPU headquarters, the Lubyanka. In January 1927, following reliable reports the OGPU had tampered with ‘diplomatic bags of a foreign power’, Foreign Secretary Austen Chamberlain ordered the British Mission in Moscow to destroy all non-essential ciphers and confidential papers. Should a break occur, this reduced secret material within the premises to a minimum.

He did not believe severing relations would end subversion; that would require blocking money transfers, preventing travellers entering or leaving Britain and censoring communications. Moreover, what he called “trade interests” would exert great pressure to resume ties. Perhaps naively (or simply out of desperation), those interests assumed business would pick up if only bilateral relations settled – wishful thinking driven by memories that Tsarist Russia had been Britain’s second largest pre-war export market after Germany. This perpetual self-delusion about potential commercial opportunities in the USSR was a defining feature of Anglo-Soviet relations from 1917 to 1991, and one that again drives post-1991 Anglo-Russian ties. The Foreign Secretary also believed once a rupture happened, the Labour Party – divided since the 1926 strikes – would again argue major contracts and relief for British unemployment were certain if only Moscow were given a chance.