One can only guess at how Reilly’s extra-curricular activities were viewed by SIS top brass. By October 1919, the first telltale signs that Reilly had blotted his copybook were becoming apparent. Having only recently become the recipient of the Military Cross, it would seem that Reilly felt that his ‘distinguished service’ should be further acknowledged by promotion. On enlistment in November 1917 he had been commissioned as a second lieutenant,7 but now, over a year later, clearly felt that he was more than due for further recognition. After all, George Hill, who had enlisted as a lieutenant, was now a captain, and to Reilly, a superior officer. Reilly therefore took his case to Maj. D.J.F. Morton, head of SIS Production Section8 and his immediate superior. As a consequence, Morton wrote on 3 October 1919 to Col. Stewart Menzies, head of SIS Section II, which dealt with military matters:
Would you consider forwarding the name of Lt Reilly for an honorary commission as major. At present he holds a temporary commission as lieutenant in the Air Force. He is now engaged on important work for the Foreign Office which necessitates his conferring with soldiers and civilians of high rank, and finds his low rank a great hindrance. I am certain the Foreign Office would back this up, and if you will consider the matter, I would try and obtain a written statement from them to that effect.9
Replying on 16 October, Menzies wasted few words in rejecting the matter out of hand:
Lt Reilly is in the Air Force so how can we help? In any case the WO [War Office] are adamant in their refusal to give even honorary promotion as in the event of this officer becoming a casualty, ‘finance’ are responsible for paying the widow a pension etc. There is, however, no harm in first sounding the Air Ministry.10
While Menzies’ offhand response was a correct reflection of War Office policy, it is equally the case that had he wished to assist in getting Reilly promotion, he most certainly could have done. The rebuff was a sign that while Morton might be behind him for the time being, others in SIS were most certainly not, either seeing Reilly as an overrated upstart or as a loose cannon. Never being one to accept no for an answer, Reilly seems to have opted for unilateral action. From here on it would appear that to those outside the service he referred to himself as ‘Captain Reilly’, and has been styled as such by Winfried Ludeke,11 Pepita Bobadilla (later Reilly),12 and a host of other writers down the years. By 1932, even his old adversary Norman Thwaites referred to him as ‘Captain Sidney Reilly MC’ in his autobiography.13
Five months after his New York trip, Reilly was still working hard to push his Russian banking scheme. It is clear from a memorandum to Picton Bagge, dated 10 October, that he had now set his sights on enticing French bankers and had been sufficiently encouraged by their response:
My dear Bagge
In confirmation of my memorandum of the 8th instant, I now enclose the prospectus of the SOCIETE COMMERCIALE, INDUSTRIELLE ET FINANCIERE LA RUSSIE, which has been formed recently in Paris.
It is the Banking Combine of which M. YAROSHINSKY told us, and in which some of his banks are interested. You will see from this that the French bankers proved very much more receptive than our friends in the City. In connection with this French Banking Combine, I have received the following information from Paris. Last week a meeting took place at the French Ministry of Commerce and Industry, under the presidency of Gen. MANGIN, the Chief of the Economic Mission to Russia which was to leave on the 8th of this month. Besides the representatives of the Ministry and the French banks and industries, there were also present representatives of the Russian government and of Russian banks and industries.
Resolutions were passed urging the necessity of resuming trade relations on a large scale with Russia, and the dispatch of an Economic Mission to Russia was welcomed. Furthermore, the formation of the above named company with a capital of 50 million francs, was approved and government support in the matter of credits and tonnage was promised. Of the 50 million francs, 20 million francs are being subscribed by French banks, and 15 million francs by French industrialists, and 15 million francs are reserved for Russian banks, and the Russian banks and Russian industrialists. It is stated that a credit of 400 million francs will be accorded to this company by the French banks. The Russian banks have stipulated that although they are participating in the formation of this company they reserve to themselves the liberty of action and participation in similar combinations formed in other countries.14
Three days after the memorandum’s composition, the city of Orel finally fell to Denikin’s forces. Now only 200 miles south of Moscow, the Whites and their sympathisers could be forgiven for seeing victory within their grasp. The territory Denikin controlled had gradually inflated over the past months to total some 600,000 square miles. However, within a week the Red Army had turned the tables and had retaken Orel. Having overstretched his supply lines to breaking point, Denikin was now forced into an unbroken retreat that would ultimately lead all the way back to the Black Sea where his campaign started. Along with the collapse of Denikin’s offensive went Reilly’s ambition of playing a pivotal role in the rebuilding of Russia’s economy. Had Denikin succeeded in ultimately taking Moscow and ousting the Bolsheviks, Reilly would no doubt have played a major role in the economic recon-struction of the country. The money he had made to date from munitions deals would have been a mere drop in the ocean compared to the rewards that would have been his for the taking in a Bolshevik free Russia.
Not one to be discouraged for long, Reilly set about composing a nineteen-page memorandum entitled The Russian Problem,15 in which he set out his views on bringing about the downfall of the Bolsheviks. In conclusion he stated that:
The policies and proposals outlined in this memorandum can be summarised as follows:
1. Abolition of the Bolshevik government – by force, as no other effective means are available or conceivable.
2. The necessary force to be supplied by the military co-operation of the Russian National Armies with the armies of Finland, Poland and the Border States.
3. To obtain this co-operation an agreement must be effected between Denikin and the other states in the matter of their political and territorial differences at a special Inter-State Conference.
4. The conditions for effecting this agreement and for rendering it of sufficient duration for the attainment of the main object are:
4.1. Agreement between the Allied governments as to the definite terms to be proposed to the Inter-State Conference.
4.2. Readiness of the Allied governments to impose these terms upon the parties by moral and if necessary economic pressure, and on the other hand to give the parties all the necessary support immediately the terms have been accepted.
4.3. Certain changes in the personnel and policy of the Polish government and the Denikin government.