Duke Kirill Vladimirovich, who raised the Russian tricolour over Port Arthur in 1898, recalled Ginsburg as a ‘benefactor on whom the entire Pacific navy dpended… everything – from a pin to an anchor, and from rivets to a smoke stack – we got everything from Ginsburg’.4 It was here, at the new base of the Russian Pacific fleet, that M. Ginsburg & Co. set up its new head office on Port Arthur’s main thoroughfare. The import-export company now had branches in Nagasaki, Yokohama, Chemulpo, Odessa and Singapore, and an annual turnover of over 1 million roubles.
With his flair for languages and business, Reilly was seen as a distinct asset when he joined the staff of Ginsburg & Co., where he worked initially under G.M. Gandelman, Ginsburg’s office manager.5 In addition to ‘direct’ trading, the company also acted as agents for other enterprises such as the East-Asiatic Company, a steamship line with branches in Odessa, St Petersburg and Copenhagen. Reilly was charged by Ginsburg to deal directly with all the line’s business and in this connection Reilly attended a major trade conference on behalf of the company in February 1902.6 Reilly’s responsibilities as representative for both companies thus explains why East-Asiatic’s business address in Port Arthur is the same as that of Ginsburg & Co.7 Also trading from the same address was ‘Grunberg & Reilly’, which along with the American firm Clarkson & Company was the main importer of American lumber.8 Reilly’s business partner in the lumber business, V. Grunburg, was, according to East-Asiatic records, also a representative of the naval steamship company and the Chinese East railway.9
The approaching war with Japan was no secret for Moisei Ginsburg, who had a web of agents in Japan and China picking up news and speculation from some of the most informed sources. After the war, Ginsburg was to claim that he had warned the Russian navy of Japanese intentions, but had been overlooked or ignored.10 It is equally possible that this claim may have been made to deflect criticism that he had been profiteering during the war. He further countered later criticism by claiming, with some justification, that his foresight had enabled the Russian garrison to hold out for two or three months longer than they would otherwise have been able to do.
Thoroughly convinced that war with Japan was inevitable, Ginsburg and Reilly had been purchasing enormous amounts of food, raw materials, medication and coal. On 10 July 1903, for example, the Russian War Ministry in St Petersburg wrote to the Russian-Asiatic shipping company in Port Arthur, asking them to make enquiries about provisions sent to Grunberg and Reilly, intended for delivery to the 4th East-Siberian Rifle Regiment. Needless to say, the regiment was adament that the shipment had never arrived. What happened to this and indeed other missing shipments remains a mystery. There were also reports that Reilly was speculating in ground-lots during this period, another indication that he was well aware of what was looming.11 In addition to the ample provisions that were ordered and purchased from Ginsburg & Co. by the Russian Naval Ministry, the company amassed a stockpile at its own expense. For example, 150,000 roubles worth of medication and dressings were purchased some months before the first shot was even fired.
While the growing gulf between Russia and Japan was creating understandable tension in the Far East, and within the Port Arthur community in particular, closer to home Reilly’s marriage to Margaret was also under strain. What for him had always been a marriage of convenience was, for her, something very different. It is highly unlikely that she would ever have taken the risks she did five years earlier if the objective had been anything less than marriage to a man she truly loved. While Margaret no doubt found her socially restricted life dull, Reilly himself found the colonial atmosphere of Port Arthur very much to his liking. With Chinese servants to cater for his every whim at home, and the drinking and gaming clubs to while away the evenings, he lived to the full the persona of the English gentleman, albeit one with an ‘Irish father and Russian mother’. A recreation even more to his liking was afforded by the social circumstances of colonial life. Among the 4,000-strong European community was a large band of wives who, like Margaret, were often bored and neglected. Such opportunities to philander were ones that a man of his character found hard to resist. Like a good many serial philanderers of that era, his success with women seems to have relied on a judicial use of gentlemanly charm, and his undoubted ability to make a woman feel that she was the centre of his universe without resorting to obvious or overt flattery. This approach, combined with a steady stream of gifts and affectionate letters almost always seemed to do the trick. One relationship in particular, with a lady by the name of Anna, may well have resulted in Margaret’s premature departure from Port Arthur.
With his knowledge of the impending Japanese attack, now possibly only months away, he insisted that a town under siege was no place for Margaret and had her pack her things and return to England. In the autumn of 1903 she left Port Arthur for Yokohama, then journeyed to Europe across the Pacific, via San Francisco and New York.12 Now free to continue his dalliance with Anna unhindered, their affair began to attract attention. Whether this was another relationship of short-term convenience, or the beginning of a much longer term liaison depends very much on how one interprets Reilly’s connections with the Japanese and his own hasty departure from Port Arthur the following year.
His undoubted knowledge of Japanese intentions would later lead to questions being raised about his role in Port Arthur and the allegation that he was in fact a spy in the pay of the Japanese. Authors Winfried Ludecke and Richard Deacon state clearly their view that Reilly was a Japanese spy,13 while Robin Bruce Lockhart portrays Reilly as being distinctly anti-Japanese in his account of events.14 Professor Ian Nish, of the London School of Economics, and author of Causes of the Russo-Japanese War, is therefore right to refer to Reilly’s role as ‘one of the unsolved riddles about the Russo-Japanese War’.15
The first known and recorded suggestion that Reilly had been a Japanese spy is contained within a US Bureau of Investigation report written by Agent L. Perkins on 3 April 1917.16 Written while Reilly was living in New York during the First World War, the report refers to information volunteered to the Bureau by one Winfield Proskey, an engineer with the Flint Arms Company, who stated that Capt. Guy Gaunt,17 the British Naval attaché in New York, had told him that Sidney Reilly had once spied for Japan. Gaunt was certainly in Manchuria at the time the Russo-Japanese War broke out, where he was serving on HMS Vengeance in the summer of 1904.18 It is, therefore, not unlikely that Gaunt either encountered Reilly while in Manchuria or had heard stories of his alleged spying there.