COMMISSION’S FINDING

Hokitika Guardian, 29 February 1928, Page 2

COMMISSION’S FINDING

ZINOVIEFF LETTER RECALLED. 'Australian & N./. Cable Association.) LONDON, Fel). 27. The Civil Service Report shows that O’Alalley <First Secretary to Forgein Office). AY. 1). Gregory (Under-Sec-retary to Foreign Office). Commander Maxes and Airs Dyne, wife of a former school fellow of Gregory, whose house was the meeting place of the circle who wore interested in franc speculation. Their operation reached a crisis' in April when Gregory and All's Dyne agreed to a share loss amounting to £34,000, but the joint operations were continued in order to retrieve a loss. The second crisis at the eml of 192-1, when Gregory continued operations on his own account and made a profit until 1926. when the tide turned and he ceased to speculate on January 1927, the losses aggregating £20,090 and profits £15,000. The nett loss was £SOOO. apart from the losses on the joint account amounting to £115.000. Gregory’s dealings involved over 250 million francs. Alaxes’ dealing was at first confined to an occasional ten per cent share of Gregory's transactions', but with a legacy of a few hundreds in 1926, he began transactions in French and Beljri,ui francs, resulting in a loss of £3.200. The report continues: ‘‘ln all Gregory’s, O’Malley’s and Alaxes’ gambling transactions, opportunities would occur for turning official information into private gain. Civil servants ought not to expose themselves, the Departments or service, to public criticism by gambling. It was a hazardous speculation. AA T e are satisfied that Gregory. O’Malloy and Maxes did not use official information for the purpose of their transactions, hut there are no extenuating circumstances in Gregory’s ease and O’Malley held a responsible post in the Northern Department.” - The report mentions two other isolated cases of franc speculation by Civil Servants, Imt the other rumours are fully disproved. A third part of the report deals with the Zinovieff letter and the publication of the Zinovieff letter, and note to the Soviet Charge do Affairs on October 25th, 1024. which lie signed . The report says that not the slightest foundation exists for attaching suspicions to Gregory, indeed Gregory in Departmental minutes advised against the publication of documents, moreover the publication had no effect on the exchanges.

The report concludes: “The public expects from Civil Servants a standard of integrity and conduct not only inflexible, but fastidious. Tt is the duty of the Service to see that expectation is fulfilled.” Ai r MacDonald and Air Thomas gave evidence in connection with the Zinovieff letter.