Friday, May 29, 2015

John Service: Knowing Agent or Unwitting Dupe?

In the early 1940s, even as WWII raged, the international communist conspiracy was working vigorously to undermine freely-elected governments around the globe. This is evident, e.g., in the case of John Service, a foreign service officer (FSO) in the State Department.

He had been assigned to work in China, and send reports about the domestic situation there back Washington. His accounts of the internal dynamics would shape the policies of the United States toward China.

His bosses did not know, however, that John Service was feeding them, not accurate assessments of the conditions in China, but rather narratives designed to further the progress of the Chinese Communist Party (CPC). The ongoing civil war between the communists and the nationalists in China had started in 1927, but an uneasy truce had been declared in 1936, so that both sides could fight the Japanese invaders.

In the mid 1930s, John Service was assigned to be an FSO in China. He sent a steady stream of unfavorable comments about the nationalist leader, Chiang Kai-Shek (Jiang Jieshi), complaining about “the clap-trap of Chungking officialdom” in a report dated 28 July 1944. (The city of Chungking was Chiang’s headquarters at the time.)

Yet Chiang’s soldiers were doing the majority of the work in resisting the Japanese invasion.

By contrast, Service’s reports about Mao were enthusiastic, gushing that the CPC “has grown to a healthy and moderate maturity.” A few years later, Mao’s CPC would be executing millions of Chinese civilians.

How effect were Service’s propaganda-ridden reports? State Department officials, located in Washington and having never set foot in China, began to make plans for either a coup to overthrow Chiang, or even an assassination. Happily, these plans were never carried out.

The lingering question is whether John Service was actually in the employ of the international communist conspiracy, or whether he himself had been persuaded by the CPC’s propaganda and had internalized the CPC’s worldview. No certain answer can be given to this question.

The intensity of his reports increased until October 1944, when he wrote a series of memoranda from China, declaring flatly that Chiang was unnecessary and useless, and that the United States should welcome the collapse of Chiang’s government and the rise of Mao’s. Historian Stan Evans writes:

In the fall of 1944, having loosed his October thunderbolts at Chiang, John Service headed back to the United States for what was in essence a two-month furlough. The official purpose of the visit was to consult with his State Department bosses, which he did, but he also did some other things that would be even more critical for his future — and for the secret history of the Cold War.

Fresh from China, John Service would have much detailed and sensitive information, not only for the State Department, but also for a couple of known Soviet operatives, Max and Grace Granich. Service apparently met with Grace Granich.

He also met with other known Soviet agents, including Harry Hopkins, Lauchlin Currie, and Harry White. The USSR was, at this time, actively supporting Mao’s CPC.

Someone informed Max and Grace that John Service was returning to the U.S. from China, so that they could be ready to pump him for information. Stan Evans continues:

One revealing aspect of this trip was that it brought Service, for the first time we know of, to the notice of the FBI. According to the Bureau records, he was on his return to have supplied a link between pro-Red forces on the ground in China and their confreres in the United States. As one FBI memo relates: “A highly confidential source, which is completely reliable, has advised that Max and Grace Granich, both of whom have been engaged in Communist and Comintern activities for many years, were advised in the fall of 1944 that Service was returning to Washington details as to the latest developments.”

What was the outcome of John Service’s activities? The United States was remarkably half-hearted in its support of Chiang, even though Chiang was the only chance for something resembling political liberty for China.

Predictably, Chiang’s government fell, Mao’s CPC took control, and millions of Chinese died as a result. Was the savage butchery inflicted in the CPC’s “reeducation through labor” camps a direct result of John Service’s work?

Chiang’s fall, and Mao’s rise, were multifactorial, and certainly it would be a stretch to say that John Service caused them. But he was clearly a factor.

Had John Service not acted as he did, would Mao’s mass killings have been prevented? Historians should not speculate.

Thursday, May 21, 2015

Inside the Secret Communist Conspiracy: Whittaker Chambers

Whittaker Chambers joined the American Communist Party (the ‘Communist Party in the USA,’ or CPUSA) in 1925. He would remain in organization for more than a decade.

Eventually he would become disillusioned with Soviet-driven operation and leave the party. He would provide valuable information to authorities who were looking to prevent any attempted overthrow of the United States government.

Sam Krieger, known as Comrade Krieger, directed young Whittaker Chambers, in addition to his service to the CPUSA, to attend meetings which would further his ideological formation. The CPUSA wanted to ensure that new members were ‘oriented’ or ‘orientated’ - Chambers recalls these as favorite words among the party’s leaders - to communist doctrine.

Chambers describes his entry into advanced communist indoctrination. Note the use of the word ‘violent’ - the CPUSA was explicit in its quest for a violent revolution:

He pressed me to join a study group to which he and his wife belonged, with some ten or fifteen others. The group was led by Scott Nearing. It met once a week, sometimes in the Rand School, the Socialist headquarters on East 15th Street, sometimes in a Communist office. Its members were trying to formulate (another favorite word) “the law of social revolution.” The members of the group, singly, or in teams, were writing papers on each of the great modern revolutions. When the papers were completed, the group would ponder upon the result and from it deduce the unifying law that underlay all violent political change. Scott Nearing and some of the more “developed” students would then formulate this revolutionary law in a study which would form a preface to the book that was to be made of all the papers.

As an extension of the USSR, the CPUSA hoped to bring an end - a violent end - to not only the United States government, but to civil liberties and property rights enjoyed by American citizens. The insistence on violence was meant to ensure the complete destruction of not only the form of government, but of the society and culture which had arisen around Western Civilization’s concept of individual liberty.

Alger Hiss was not only a key Soviet operative, but also a networking leader among scores of Soviet spies inside the United States. After Chambers left the CPUSA, he would offer evidence which confirmed Hiss’s guilt.

Hiss did not work for the famous KGB, which wasn’t formed until 1954, but rather for the GRU, a military intelligence agency in the USSR which had a clandestine New York office. Hiss would funnel confidential information out of the State Department to the Moscow, and then receive instructions from the USSR about how he should nudge U.S. foreign policy into one direction or another.

As an upper-level State Department official, Hiss met personally with FDR and was able to suggest or recommend policy options to the president. Robert Novak writes:

Hiss, as a senior State Department official, had in fact been a secret agent of the Fourth Section of Soviet Military Intelligence.

Because of his experience as a CPUSA insider, Whittaker Chambers was able to provide information about the underworld doings of criminals like Scott Nearing, Sam Krieger, and Alger Hiss. For his work, Chambers received the Presidential Medal of Freedom, posthumously, in 1984.

Monday, May 18, 2015

Who Was Not at Yalta?

In February 1945, the city of Yalta hosted the famous wartime conference which included U.S. President Roosevelt, Britain’s Winston Churchill, and the Soviet Union’s Joseph Stalin. Yalta is located on the southern end of Ukraine’s Crimean Peninsula on the shores of the Black Sea.

It was clear by this time that Germany would lose the war. The purpose of the conference was to organize the postwar environment in Europe.

Who accompanied FDR to Yalta? One might think that, because this meeting would set the international tone for years and even decades to come, America’s best diplomats and intelligence experts would be on hand to advise the president during the days-long event. Historians Stan Evans and Herbert Romerstein write:

With everything that was on the line at Yalta, one might suppose the U.S. government would have sent there a first-rate team of policy experts and negotiators to uphold American and free-world interests. Dealing with the tough and wily Soviets in such a context would have required the best that mid-century America had to offer. Such, however, was not to be the case at this world-changing summit.

Contrary to what might be a reasonable expectation on the part of the reader, the team FDR brought with him to Yalta was not an all-star list of foreign policy experts or intelligence geeks. His Secretary of State, Edward Stettinius, had been in office one month, hardly enough time to develop the agile negotiating skills needed vis-a-vis the USSR.

Stettinius would last less than six months as Secretary of State. It was during this narrow window of time that the Yalta conference occurred. Both his predecessor and his successor - Cordell Hull and James Byrnes, respectively - had more impressive resumes and gained experience from longer time in that office.

A neophyte Secretary of State was not the only weakness on the American team at Yalta. The delegation seemed designed for weakness at the negotiating table. Evans and Romerstein continue:

Few people familiar with the American delegation at Yalta would have called it first-rate, or even adequate to the challenge. On the military side, there was an impressive show of brass and braid, but the diplomatic group was different. Among his entourage Roosevelt had two staffers knowledgeable of the Soviet Union — interpreter Bohlen and ambassador to Moscow W. Averell Harriman — plus some support personnel to be discussed hereafter. But notably absent were ranking U.S. experts who knew a lot about the Soviets and diplomacy in general: top-line officials such as Undersecretary of State Joseph Grew, State’s European chief James C. Dunn, Russia specialists Henderson and Kennan. None of these would make the trip to Yalta.

In fact, the contingent from the United States was deliberately assembled to allow the Soviets to gain an advantage at the bargaining table. Advisors placed in high positions at the State Department, notably one Alger Hiss, personally advised the president on such matters.

What FDR didn’t know was that Hiss was on the payroll of Soviet intelligence agencies. Hiss was a spy, working for the communists. In addition to leaking classified information to the USSR, he also influenced the president’s policy decisions in ways which played into the hands of Moscow.

Churchill and Roosevelt made some bad agreements with Stalin at Yalta. Some were bad because they placed large regions of eastern Europe under a totalitarian regime, others were bad because they were empty promises which Stalin did not intend to fulfill. In the case, e.g., of Poland, Stalin told Churchill and Roosevelt that after the Red Army had pushed the Nazis out of the country, political liberty and free elections would follow. The Soviets, of course, did no such thing. Poland was overrun by the USSR and would remain a vassal state for the next forty-five years.

The deals made at Yalta were not only bad, but bad by design. Alger Hiss, and other Soviet operatives inside the Department of State, ensured that the American ability to negotiate would be hamstrung, and the Stalin could craft agreements to his liking.

Payroll Withholding: A New Evil Arises

The challenge facing those who would expand the powers of government, shrinking the liberty of the individual, is finding ways to take maximum money from ordinary citizens while provoking little or no reaction from them. How can you confiscate people’s money without making them angry?

To this end, many subtle plots and devices have been invented. One of them has been successful and goes by the name “payroll withholding.”

If a worker obtains his wages, and then has to pay his taxes, he is likely to be keenly aware that the government is appropriating the earned fruit of his labor. But what if a worker never received his full pay? What if part of it were siphoned off and sent to the government before it was transferred to him?

This is the genius of the withholding plan. People don’t miss what they never had. Rather than pay a worker $100 and ask for $25 in taxes, simply pay him $75. He may know, in some vague and abstract sense, that his property has been stolen from him, but he will not sense or perceive it in a concrete and direct way.

Payroll withholding arose when the government saw a sudden need to raise revenues because of war. While the citizens were willing to contribute to war effort, the mechanism of withholding was introduced because it would lower the degree to which voters were intuitively aware of amount being taken from them, and because it would allow the government to confiscate funds for other, less popular, purposes.

Until the advent of withholding, only Americans in the highest earning levels paid income tax. After withholding, almost everyone would pay it, as historian Amity Shlaes describes:

The father of the modern American state was a pipe-puffing executive at R.H. Macy & Co. named Beardsley Ruml. Ruml, the department store’s treasurer, also served as chairman of the the board of directors of the Federal Reserve Bank of New York and advisor to President Franklin Roosevelt during World War II. In those years Washington was busy marshaling the forces of the American economy to halt Japan and Germany. In 1942, not long after Pearl Harbor, lawmakers raised income taxes radically, with rates that aimed to capture twice as much revenue as in the previous year. They also imposed the income tax on tens of millions of Americans who had never been acquainted with the levy before. The change was so drastic that the chroniclers of the period have coined a phrase to describe it. They say that the “class tax” became a “mass tax.”

By means of withholding, the government was able to steal money from citizens without their noticing it so much. Ruml would devise the paycheck system by which a worker’s money was taken from him before he ever saw it.

It wasn’t so much that they’d pay more taxes; rather, they’d bring home smaller earnings. It was a simple but clever maneuver.

The rhetorical question has often been posed by those who study taxation: what would happen in twenty-first century America if workers had to pay their taxes outright instead of having them withheld? If, on April 15 each year, they had to write checks of $5000 or $10000 and mail them to the government?

This question reveals the evil genius of the withholding system. The government has been able to steal shocking amount of earnings from the workers, without the workers being fully aware of the crime.

Beardsley Ruml may be the mastermind, or at least an accomplice, behind the greatest theft in history.