One last, but by no means negligible factor, is that Russia has always possessed too much gold. After the Revolution, mountains of gold from millions of people killed in the torture chambers of Soviet power were added to the State Treasury. In addition to this, communists plundered churches all over Russia which from ancient times had been famous for their wealth. Great profit was harvested from the domes of the richest cathedrals, for these were roofed with solid gold. In looting the churches, the communists said, 'For the needs of the world revolution.' What they meant was, 'For the needs of espionage.'
There were many elementary errors and failures in the work of these early field officers who had no experience whatsoever. For example, the counter-intelligence officers of Lithuania, Latvia and Estonia, which at the time were independent states, simply told any suspicious person who claimed to be a fugitive Russian officer, or engineer or doctor, to tie a necktie. In 1920, by this method alone, more than forty GRU agents were unmasked in these three small countries. The GRU was unperturbed by these failures, however, its philosophy being that if it could not have quality it would go for quantity. It was an astute calculation. If one agent in a hundred sent abroad showed himself to be talented, and his natural talent made up for his lack of education, then that was enough. Nobody was worried about the agents who were discovered. Let them get out of the mess if they could. The Soviet Union will never admit that the people it sends out belong to Soviet intelligence.
This large-scale attack was highly successful. Out of the thousands of intelligence agents sent abroad, some dozen began to give positive results. The help of communists abroad also began to tell. Gradually quality began to creep into the work of the GRU. One of the first outstanding successes was the creation of the so-called 'Mrachkovski Enterprises' or, as it was officially called in GRU documents, 'the network of commercial undertakings'. Jacob Mrachkovski (his brother was a member of the Central Committee) was sent to Germany where he organised a small shop and then a small factory. Subsequently he bought, in fictitious names, several factories in France, Great Britain, Canada, the United States and finally China. The money put into these undertakings quickly grew and, after several years, the Mrachovski undertakings began to show profits of tens of millions of pounds. The money earned was used by the GRU as its chief source of 'clean' money, that is, money which had never been on Soviet territory and consequently could be used for agents' operations. In addition to obtaining money the Mrachkovski undertakings were widely used for the legalisation of newly posted intelligence officers who by now were beginning to be better trained. Journeying from country to country, they found help and support from the Mrachkovski network. They got themselves jobs and after some months received the most laudatory references and went off into other countries where the same thing took place. This went on until the agent was able to stand on his own two feet. The security of the network was so tight that no undertaking ever suspected the existence of another. Mrachkovski himself travelled all over the world, buying up new enterprises, installing one or two of his own people and obtaining perfectly legal and highly lucrative licences and patents.
Relations with the Tchekists were gradually stretched to their limit. The Party was striving to inflame the hostility between the GRU and the Organs of State. Lenin made a great success of this, as did his successors. The next conflict broke out in the spring of 1920. Both Lenin and Trotsky considered themselves outstanding thinkers, theoreticians and practical men; men of deep knowledge as regards military affairs and international relations. Naturally neither one nor the other took any notice of evaluated intelligence. They both demanded that the intelligence material should be laid before them 'grey' and unevaluated: they would then draw their own conclusions and analyse the material on the basis of Marxist doctrine. But Marxism had very precisely and categorically foretold that there would be a world war in Europe which would be the last war of mankind. The imperialist war would develop into a worldwide revolution, after which a golden age would begin. Yet the war had finished two years before and no worldwide revolution had happened. Intelligence reported that there were no signs of this revolution coming about, so both Lenin and Trotsky were either compelled to admit that Marxism was wrong or to take measures to bring the revolution about. They decided to trigger off a revolution in Europe, starting with Poland. Intelligence assessments were ignored, and naturally the adventure ended in complete failure. Both the organisers immediately started to hunt for a scapegoat. The only possible explanation for the scandal was that the intelligence service had done its work badly. Lenin announced to the rank and file of the Party, 'We have suffered this defeat as a result of the negligence of the intelligence service.' But the GRU was a completely unknown entity, even to some of the highest representatives of the Soviet bureaucracy, and much more so to the rank-and-file Party members. All eyes turned towards the Tchekists. Their unpopularity among the people, even before this, was evident. After Lenin's announcement their authority finally fell. Dzerzhinsky caused a scandal in the Kremlin and demanded explanations from the Politburo. In order to calm the Tchekists and to support his own version of the story, Lenin permitted the Tchekists to purge the GRU. The first bloody purge took place in November 1920. On Lenin's orders hundreds of intelligence officers who had allegedly failed to evaluate the situation correctly were shot.
Up to this time there had been no need to account for the GRU's activities, but now information was made available to some Party members. This has led some specialists to the mistaken conclusion that the GRU did not exist until this time.
However, the GRU did not take long to recover from the 1920 Purge. This may be explained mainly by the fact that the overseas organs of the GRU were practically untouched, and this for eminently sound reasons. Neither Lenin nor Trotsky had any idea of shooting the intelligence officers who were overseas, not only because they were manifestly innocent, but also because their deaths would have absolutely no salutary effect on others since nobody would hear about them, not even the many members of the Central Committee. The other reason for the quick recovery of the GRU was that its agent intelligence network in the military districts was also left untouched. At the end of the civil war, the fronts were tranformed into 'military districts', but the chain of command in the new districts did not undergo any essential changes. A 'registration' department was included on the strength of the staff of each district which continued in peace-time to carry on agent intelligence work in countries where the district would have to carry out military activities in any future war. Up to the time of the 1920 purge there were fifteen military districts and two fleets in the Red Army. They all carried out, independently from each other, agent intelligence work of a very intensive nature.
The internal military districts were no exception. Their intelligence centres were moved out to the frontiers and it was from there that the direction of agents was undertaken. Each internal military district also has its tasks in wartime, and its intelligence work is based around these tasks. The direction of activities of a frontier district is very precisely defined; at the same time the internal district, independent of circumstances, may operate in different directions. Consequently its agent network in peacetime operates in different directions, too. For example, in 1920 agents of the Moscow military district operated on the territories of Poland, Lithuania (at that time still independent) and Finland. This system has prevailed in all respects, except that the districts and fleets have become more numerous, as also has money available for intelligence. We are richer now than we were then.