The situation in China was complex: a civil war, started in 1927, was halted by a temporary ceasefire so that both sides could offer resistance to the invading Japanese army. By 1944, it was clear that the Japanese would be defeated, and the two belligerents in the civil war - the communists led by Mao and the nationalists led by Chiang - were preparing to resume hostilities.
The USSR was supporting Mao, and the United States was somewhat supporting Chiang Kai-shek’s nationalists. The degree of enthusiasm with which the U.S. would support Chiang was in question.
In general, American was disposed to back Chiang, because, while not perfect, he represented the best chance for China to enjoy some amount of liberty. Americans were wary of Mao and his Soviet backers.
But inside the Roosevelt administration, there were officials planting seeds of doubt. They argued that Mao was likely to win the civil war, and that Chiang was corrupt.
FSO John Service was such a sower of doubt. His reports from China were not neutral evaluations of the situation in country, but rather enthusiastic propaganda pieces for Mao. John Service was not only a FSO for the State Department, but he was also secretly working for the USSR and for Mao’s communists.
Not only John Service, but an extensive network of Soviet operatives inside the State Department worked to undermine American support for a free China.
While Service and his fellow Soviet agents had their secrets, what they did not know was that the FBI was becoming aware of their spy network. When he returned from China in late 1944, the FBI learned that two other Soviet operatives, Max and Grace Granich, had been alerted to contact Service and get information about China from him.
Max and Grace were known communists, as was Max’s brother, Itzok Isaac Granich. Itzok went by the name “Mike Gold,” and all three had connections to the USSR. During the Cold War years, being a communist didn’t simply mean that one held a set of political beliefs, but rather it meant that one was dedicated to “violent” overthrow of the governments of western democracies.
The American Communist Party (CPUSA) insisted on seeking a “violent” revolution and on using that word in its printed materials.
A meeting between John Service and a member of Granich network was significant, and finding out about such a meeting in advance was an espionage coup. Historian Stan Evans writes:
Though omitted from the usual histories, this eye-catching bit of intel — gleaned from a mail intercept by Hoover’s agents — would be of keen interest to the Bureau and security sleuths in Congress. Max and Grace Granich were well known to the FBI, appearing in numerous other updates on subversion. They were also well known in China, where in 1936 and ’37 they ran a Moscow-funded news sheet called The Voice of China. Their activities in the United States were of like nature, including involvement with the pro-Red journal China Today, part of a tangled web of groups and periodicals that agitated the China issue.
Not only did John Service make contact with Grace Granich, but also with three other Soviet operatives: Harry Dexter White, Lauchlin Currie, and Harry Hopkins. Information was flowing in two directions: intelligence about the situation on the ground in China, and about the thinking of U.S. policymakers in Washington, was moved by Service, Granich, and the others to Moscow; and misinformation, designed to influence U.S. policy, was fed from Soviets to State Department officials via John Service’s reports.
Harry White and Lauchlin Currie were Soviet agents, as confirmed by the Venona project in which U.S. intelligence agencies decrypted Soviet communications about espionage activity. Harry Hopkins is somewhat more ambiguous: he may have been a Soviet agent, or he may simply have been a “dupe” who was tricked into shaping policy in ways favorable to the USSR.
Two former Soviet agents, Whittaker Chambers and Elizabeth Bentley, after defecting, also confirmed that Currie and White were employed by Soviet intelligence agencies. Stan Evans reports:
Whether the Service-Granich hookup occurred would be a topic pursued off and on by security forces — the results being inconclusive, but indicating Service probably met with Grace, though apparently not with Max. In the meantime, we know for certain he met with others who shared the Granich mission and stance on China, as he would himself reveal this. As he told it in a State Department hearing, two of his main contacts on this trip were Lauchlin Currie and Harry White (a third being Harry Hopkins). This was an intriguing pair of names to mention, as neither Currie nor White was an official of the agency where Service worked. Both were, however, pro-Soviet moles, according to the testimony of Bentley-Chambers and disclosures of Venona.
While in China, John Service had developed working relationships with several high-ranking communist officials, one of whom was Tung Pi-Wu (Dong Biwu), with whom Service would later meet in Washington. Service had also met with Mao. Gradually it became clear that instead of reporting about these leaders, he was speaking for them.
Granich’s decision to plead the fifth amendment when asked about John Service is significant. Stan Evans notes:
The doings of Max and Grace Granich, their connections in the United States and China, and their linkage to John Service would be explored in hearings of the House Committee on Un-American Activities early in 1952. When asked if he knew Service, Max said he didn’t, but Grace, when asked the identical question, took the Fifth Amendment. The House Committee was apparently in possession of information, obtained by the FBI, that Service had met with Grace, Tung Pi-Wu, and other Chinese Communists at a later date in Washington, D.C.
The presence of Soviet spies inside the State Department and other government agencies (White was in the Treasury Department and Currie worked as an economic advisor to FDR) explains, at least in part, the lukewarm support which the United States gave to Chiang, and the eventual fall of Chiang’s government to Mao.
Sadly, this is not merely an interesting story about spies. In the decades after Mao’s 1949 seizure of power, millions of Chinese were executed by the communist government.
While responsible historians do not speculate about events that never happened, it is tempting to wonder if these deaths could have been prevented if the State Department had not been infiltrated by agents like these.