Of course, Harry White didn’t need Adler—or the Service memos—to tell him Chiang Kai-shek should be reviled and the Reds promoted. The point of these dispatches, like the Klugmann-vetted reports from Cairo and Farish memo at Teheran, was to guide the thinking of policy makers at higher levels. White was diligent in making sure Treasury Secretary Morgenthau saw the Adler memos and selected reports from Service. (Morgenthau’s diaries show him exclaiming, “I love these letters from Adler.”)15 Morgenthau would carry the message to the White House, where he had special access to FDR, his long-time neighbor in New York’s Hudson Valley. As Lauchlin Currie on the White House staff was receiving similar updates from Service, each series of memos could thus be cited as confirmation of the other.
By Service’s own appraisal, his main collaboration with Adler occurred during the visit of Vice President Henry Wallace to Chungking in June of 1944. This proved to be a decisive breakthrough for the strategy of establishing direct U.S. contact with Yenan, which Chiang had bitterly resisted. As Wallace had with him as traveling mentors both Owen Lattimore and John Vincent, he was no doubt well briefed on Chiang’s shortcomings and the benefits of liaising with Yenan. (Vincent would later acknowledge that he repeatedly steered the Chiang-Wallace talks in this direction.) Just to make sure, however, Service and Adler got together and drafted a mammoth sixty-eight-page memo on affairs of China to be given to Wallace on his arrival. For official purposes this memo, reprising all the usual notions, was imputed to Service only, with Adler’s role, again, sub rosa. We know, however, that the collaboration did occur, as Service himself would later on reveal this.*46
ALL this Service-Adler collusion took place within a larger context of interacting forces in the U.S. government aimed at sabotaging Chiang. There were many such forces in and around the State Department, and these would become the subject of a huge debate that erupted in the days of Joe McCarthy. Second only to Service himself in pounding home the message was John Davies, who depicted the Yenan regime as “a modern, dynamic popular government,” called Chiang’s government “politically bankrupt,” and declared that “the Communists are in China to stay and China’s destiny is not Chiang’s but theirs.”16 Still other FSOs would reinforce these notions, playing up the supposed virtues of Yenan and the corruption, inefficiency, and other evils of the KMT. All this was subsequently amplified by press accounts from China that blasted Chiang and praised the rebels.
Less visible at the time, but equally crucial for the fate of China, were manipulations on the Treasury side of things, where concerted efforts were under way to enforce the policy of financial strangulation Adler had set forth to White. Records of this anti-Chiang campaign, including cables, memos and transcripts of meetings, reveal an astounding cast of players—White, Lauchlin Currie, V. Frank Coe, Harold Glasser, and Alger Hiss among them. And, when in the United States, Sol Adler would sit in as well. The operative principle seemed to be that at least two secret Moscow agents had to be in the room—and sometimes more than two—for the meetings to be official. The comrades must have been bumping into each other in the Treasury hallways as they made their way to these important sessions.
Especially notable were scenes in late 1944 and early ’45, bracketing the Adler memo to White on cutting off the flow of funds to Chiang. In these conclaves, Morgenthau kept asking his staff about the gold loan promised to KMT finance minister Kung. The Secretary was being badgered by Kung and was asking his advisers why the gold was not delivered. They patiently explained that there were technical issues, shipping problems, glitches; and anyway, the gold would be wasted on the corrupt regime of Chiang. An extremely candid version of the matter would be supplied by White, who admitted in so many words that the loan had been deliberately obstructed.*47 17
After his amazingly frank discussion of the gold loan record, White still undertook to persuade Morgenthau that the Treasury had been right in its obstructionism, “because the money is being badly used.” Others from time to time would discuss the issue with Morgenthau in similar fashion, suggesting that the gold be withheld or doled out in driblets. Among those arguing this were Adler, on one of his excursions back to D.C., and V. Frank Coe—who would later join with Adler in fleeing to Red China. All three of the Morgenthau advisers plying him with this counsel would show up in FBI records, congressional hearings, and Venona papers as Soviet agents.*48
ON THE merits of what John Service did, as noted, much has been said down through the years to suggest he was merely “reporting” what he saw and couldn’t be blamed for having done so. It’s noteworthy, however, that what Service allegedly saw wasn’t seen by other observers who knew far more about the relevant matters than did he. This was particularly true of his (and Adler’s) repeated statements that only the Chinese Communists were fighting the Japanese, while Chiang Kai-shek did nothing.
Gen. Albert Wedemeyer, a true military expert in charge of the war against Japan in China for many months, would flatly contradict these Service-Adler statements. According to Wedemeyer, the Chinese Reds did little fighting against the Japanese and were no help to him in the conduct of the struggle. “No Communist Chinese forces,” said Wedemeyer, “fought in any major battles of the Sino-Japanese war….” From intelligence data he was receiving, hesaid, “I knew that Mao Tse-tung, Chou En-lai and the other Chinese Communist leaders were not interested in fighting the Japanese because their main concern was to occupy the territory which the Nationalist forces evacuated in their retreat.”†49 18
In fact, as shown by historians familiar with the Chinese-language Communist sources, the truth of the matter went well beyond this. In his study of the OSS in China during World War II, Naval Academy historian Maochun Yu observes that tales of the Communists’ “valiant fighting” (his quote marks) masked a policy of outright collaboration between Yenan and the Japanese invaders. He recounts one episode in which a U.S. reconnaissance team parachuted into northern China only to find the Communists and Japanese camped out a few miles apart and peacefully coexisting; another in which a Japanese puppet ruler was selling arms to the Yenan Reds for use against Chiang’s army. The Communists, in a not unusual pattern, were themselves doing what they (and Service) accused the KMT of doing.19
Similar findings emerge from other researches in the Chinese-language sources, most notably the definitive biography of Mao Tse-tung by Jung Chang (a former member of the Maoist Red Guards). This massive study, based on mainland Chinese data, makes it crystal clear that Mao had no intention of fighting the Japanese, instead leaving that unpleasant task to the hard-pressed armies of the KMT. This treatment fits the Wedemeyer comment like a glove: Mao’s strategy was to let the Japanese destroy or drive out Chiang’s forces then have the Communists move in when the Japanese pushed on to grab the territory Chiang relinquished.*50 On which evidence, the Service memos on this point were not only wrong but a complete inversion of the war-time record.†51 20
However, the clearest and most self-evident indication that Service wasn’t “reporting” is simply the nature of his memos. Quite apart from their vengeful tone and spurious content, the most obvious thing about them is that they are works, not of reportage, but of special pleading. Somewhat guarded in the beginning, but increasingly strident later, the Service reports are little more than appeals for abandoning Chiang—again more closely resembling propaganda salvoes than any sort of factual update.
Service sounded this note, for instance, in June of 1944, when he asserted that “for many reasons…we might welcome the fall of the Kuomintang, if it could be followed by a progressive government able to unify the country and help us fight Japan…”21 He would return to this thesis later, especially in his Memorandum No. 40, dated October 10, 1944, which was in essence a call for Chiang’s overthrow. One of several such memos fired off in October, it was phrased in Adlerian terms of “getting tough” with Chiang, but made it clear that, in Service’s view, the best way of getting tough was by toppling Chiang from power entirely. Herewith some sample
s:
“Our dealings with Chiang Kai-shek apparently continue on the basis of the unrealistic assumption that he is China and that he is necessary to our cause…. Under the present circumstances, the Kuomintang is dependent on American support for survival. But we are in no way dependent on the Kuomintang. We do not need it for military reasons…. We need not fear the collapse of the Kuomintang government…. We need not support the Kuomintang for international political reasons…. We need not support Chiang in the belief that he represents pro-American or democracy groups…. We need feel no ties of gratitude to Chiang…. There may by a period of some confusion, but the eventual gains from the Kuomintang’s collapse will more than make up for this.”22
Such was the “reporting” John Service provided to U.S. officials as a basis for policy making toward China. As with Linn Farish’s take on Mihailovich and Tito and the Klugmann-vetted reports to London, there were people in high places who believed such things and would move to put them into practice. The result was perhaps the most unthinkable aspect of an unthinkable story: a long-running, remorseless U.S. vendetta against Chiang that didn’t stop short of projected coup d’état and contemplated murder. (See Chapter 31.)
CHAPTER 9
Reds, Lies, and Audiotape
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.
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 from China and that they should contact him because he could furnish fullest details as to the latest developments.”1
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.
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.2 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.
Currie of course had plenty of reason to talk with Service, as China was Currie’s portfolio in the White House, there was ongoing contact between them, and Service would perform, as he later put it, as Currie’s “designated leaker.” The two also had many influential friends in common, most notably Owen Lattimore and John Vincent. The White contact seems more puzzling at first glance, but makes sense when Service’s ties to Adler are considered. White was Adler’s boss and received regular updates from his minion in the field, relayed to Morgenthau and others. White also obtained through Adler various reports of Service. There thus would have been no shortage of things for White to check out with the returning FSO.
Yet another intriguing Service link to White occurred in connection with this visit. Shortly after he got back to the United States, Service was asked to give an off-the-record briefing to the Washington branch of the IPR, and did so. In testifying about this talk, Service would somewhat oddly stress that he had official clearance to give it, saying: “I got approval. I talked to Mr. Hopkins, Mr. White, and various other people.” Why Service needed approval from White to give this or any other talk was not explained, nor did anyone at the State Department hearing where he said this bother to ask this obvious question.3
At all events, Service did talk to the Washington IPR, and would thus plug into the shadowy network of pro-Red China watchers who would now figure decisively in his story. In attendance were the ubiquitous Lattimore, IPR employee Rose Yardumian, State Department official Julian Friedman (an aide to Vincent), and Friedman’s friend and federal colleague, Andrew Roth. A former IPR researcher, Roth was at this time a lieutenant in the Far East division of the Office of Naval Intelligence (ONI), liaising with Vincent’s State Department office. He would prove to be a crucial liaison as well in the strange adventures of John Service.*52
After his stopover in D.C., Service would head out to his home in California, where he would enjoy a bit of R&R and also pay a visit to the San Francisco office of OWI, yet another significant port of call. As seen, this office had been a subject of FBI inquiry, and according to Bureau records was a redoubt of staffers friendly to the Reds in China. As further reflected in the FBI updates, it was also a favorite stop for Service when in the United States, as he reportedly saw eye-to-eye with the people there who ran its propaganda efforts.
In January, following his California downtime, Service would return to China and take off for Yenan, but his new tour of duty there would be a short one. Back in Chungking, U.S. Ambassador Patrick Hurley had been perusing the anti-Chiang dispatches sent out by Service, especially the vitriolic No. 40, and didn’t like what he was reading. He accordingly went on the warpath against Service and kindred FSOs (including John P. Davies) and demanded their recall from China. The result of this was that, by the spring of 1945, Service had been unceremoniously turned around again and sent home to Washington, where he would arrive on April 12, now nursing, if he hadn’t before, a serious grudge against Pat Hurley.
ONCE back in D.C., Service would connect up again with the mysterious China-watching network, beginning, so far as the record shows, with Andy Roth. On April 18, Roth suggested to Service that there was a particular person he ought to meet. This turned out to be Philip Jaffe, editor of the pro-Communist journal Amerasia, whose memoirs we have quoted, a key member of the pro-Red China combine who according to the FBI reports had specifically asked Roth for an intro to Service.
Philip Jaffe was one of the more unusual characters in the murky byways of subversion. A Russian-born, naturalized U.S. citizen, he was a successful businessman (manufacturer of greeting cards) who seemed to have plenty of money to do the things he wanted. He was also a zealous Marxist and fervent supporter of the comrades at Yenan. (In 1937, he had made a pilgrimage there, along with Lattimore and T. A. Bisson, to meet with Mao and Chou En-lai.) The journal Amerasia was one of several propaganda sidelines through which Jaffe sought to advance the Communist cause in China.
COMRADES
Left to right: Philip Jaffe, Nym Wales (Mrs. Edgar Snow), Owen Lattimore, Red Chinese leader Mao Tse-tung, T. A. Bisson, and Agnes Jaffe in Yenan, China, 1937.
Philip Jaffe Papers, Manuscript, Archives, and Rare Book Library, Emory University
When Roth suggested he meet with Jaffe, Service quickly followed up and the next afternoon saw the editor in his rooms at the Statler Hotel (the present-day Capital Hilton), a few blocks from the State Department offices of that era. This would prove for Service to
be a fateful meeting, as it brought him again to the attention of the FBI, in even more incriminating fashion than his first appearance in Bureau records. It would be fateful also for the nation, as it led to one of the most bizarre, and ominous, spy cases in the annals of the Cold War.
For some weeks before this, the FBI had had Jaffe under tight surveillance, including telephone taps, planted microphones, and physical shadowing of his movements. The investigation stemmed from the discovery that elements of a confidential OSS memo had appeared, in some respects verbatim, in the pages of Amerasia. This had prompted OSS agents to do a surreptitious entry into Jaffe’s New York office, where they found hundreds of U.S. government papers, many bearing “secret,” “confidential,” or “restricted” markings. In addition, the agents saw an elaborate photographic setup, the more suggestive as Amerasia ran no photos.
The OSS gumshoes also noted that, while the papers stemmed from many sources, most seemed to have transited the State Department. The matter was thus referred to State, which called in the FBI to solve the case and nail the culprits. So it was, beginning in mid-March, that the Bureau laid on a massive investigation, soon discovering what seemed to be a booming traffic in official papers being run through Amerasia. In the course of this inquest, it turned out that one of Jaffe’s main government contacts was Roth. A second was a State Department employee named Emmanuel Larsen. A third frequent Jaffe contact, though unofficial, was journalist Mark Gayn, himself receiving papers from Jaffe. Now, a month into the investigation, the circle was expanded to include the much more imposing figure of John Service.
Blacklisted By History Page 14