This is my third blog post on Operation Remorse, the secret Second World War operation that earned millions for Britain. You can read the first post and the second post here. Between 1942 and 1943, the Allies tried to smuggle rubber from Japanese-occupied territories, through ‘Operation Mickleham’. Crippled by difficulties over exchange rates in China, the operation never produced an ounce of rubber. Apparently, it was a ‘partial success’. 1 Still, it wasn’t all bad. Though it couldn’t smuggle rubber, Operation Mickleham had real benefits: talented officers, experience of China, goodwill and connections in commercial circles – everything a successful racket needed. The problem was that official exchange rates wasted its funds.
‘The screens of our stage’: curtains for Mickleham
Walter Fletcher, rubber trader and leader of the operation, wanted the Special Operations Executive (SOE) to use Mickleham boldly in commercial trading and intelligence gathering, funded with cheap black market currency. Mickleham needed ‘only’ £500,000 – and more staff, naturally. SOE and the Treasury had already allowed Mickleham to try the Chinese black market, codenaming these transactions ‘Remorse’ (HS 1/289, 14 Sept. 1943). Mickleham now wanted sole access. Lionel Davis and B.S. van Deinse, senior Mickleham staff, had a big vision for a small team, masquerading as a legitimate business while bribing local officials and playing the black market:
‘The screens of our stage consist of depreciation, inflation, hedging in other currencies or commodities, usury and rackets. All acting is done behind the scenes, the audience sees nothing.’ (HS 1/289, 30 Sept. 1943, p. 4).
Mickleham’s ‘masked’ transactions could fund all the British organisations in China. The vision was tempting, and convincing. But SOE were also convinced that, although the team was ideal for the work, Mickleham as an operation had no part left to play. Oliver Lyttelton, Minister of Production responsible for Mickleham, agreed – black market finance needed a new scheme.
‘[Mickleham] is dead. Remorse arises from its ashes.’ (HS 1/289, 12 Oct. 1943)