Covert operations funded by Chinese black market

ONE OF the most unlikely successes of the Special Operations Executive's secret war was a Far East black market smuggling and currency racket which grew to massive proportions under the benevolent gaze of the British government.

A letter in the files from Oliver Lyttelton, the Minister of Production, reads: 'This is to introduce my special representative Mr Walter Fletcher, who will explain to you the nature of his business.'

Mr Fletcher's business was to run an operation codenamed 'Remorse'. He was half Austrian, large enough to be counted as two persons on an aircraft in the interests of safety, and described by Hugh Dalton, Secretary of State for War, as a 'thug with good commercial contacts'.

In 1945 he became a Conservative MP, and was later knighted. An international authority on rubber, he was appointed on 15 September 1942 and given pounds 100,000 from the Bank of England to set up a company to buy rubber on the Chinese black market.

In two years, however, he had produced no rubber, and the Ministry of Supply ordered the winding up of his organisation.

But with his network of contacts, Fletcher proposed making money from currency exchanges in China. He imported Swiss watches, diamonds, pearls and cigarette papers. He even dealt in army motorbikes. By taking advantage of the exchange rates, Operation Remorse gave the Allies pounds 77m (nearly pounds 100m at today's values) to spend.

The files record how the money was used to finance covert operations. In one, 5,000 French soldiers fighting a rearguard action in Indo- China were supplied with more than 100 tons of food and camps - 'no other Department was permitted to handle this'.

It propped up the Hong Kong dollar and funded miscellaneous field activities: 'Supplies of Gold, Gold Bars, silver coins, various currencies were secured for other British organisations for operational requirements.'

At one stage Remorse helped break a stalemate between India and China, in which China had restricted the export of silkworm eggs, threatening the Allies' supply of parachute silk. 'Through the established black market channels . . . sufficient eggs were purchased and delivered in India to reinstate the industry,' the files record.

(Photograph omitted)

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Test Analyst

£20000 - £30000 Per Annum: Clearwater People Solutions Ltd: An experienced Tes...

Mechanical Design Engineer

£35000 - £45000 per annum + competitive: Progressive Recruitment: MECHANICAL D...

SQL DBA (2005/2008/2012, projects, storage requirements)

£45000 - £50000 Per Annum + excellent benefits package: Clearwater People Solu...

Copywriter - Corporate clients - Wimbledon

£21000 - £23000 per annum: Ashdown Group: Copywriter - London As a Copywrite...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried