Using funds provided by the NKGB, Morros would establish a music publishing house in the United States - a business that could also serve as a cover for Soviet illegals. Since Moscow could not provide funds for such a project at the time, Zarubin approached "the Red millionaire," Martha Dodd's husband, Alfred Stern ("Louis"). Zarubin's superiors in Moscow endorsed the project and assigned the code name "Chord."

Soviet intelligence's adventure in the American commercial music industry was launched at a September 1944 meeting of Morros and Stern brokered by Zarubin. The enterprise that unfolded resembled the classic film comedy The Producers, substituting for that movie's famous song line ("Springtime for Hitler and Germany") a chorus of "Autumn for Stalin and Motherland." Zarubin described the venture's opening phase to Vsevolod Merkulov in Moscow: "At the first meeting ... we discussed all the questions of principle. I repeated once more that (Stern) wouldn't have the right to interfere in ( "Chord's") operational and commercial essence.... Afterward, the lawyers drew up an agreement"

The New York station chief became enmeshed in the project's "operational and commercial essence." Zarubin told Merkulov that plans for the company already underway, led by the energetic Boris Morros, included contests involving South American composers, with the winners and best works signed to contracts, and negotiations with well-known conductors Leopold Stokowski and (in Paris) Serge Koussevitzky for purchasing their works. Morros had already acquired record production equipment for a Los Angeles plant he intended to purchase. In addition, he had already begun to promote the new company to broadcasting networks, orchestras, and motion picture studios: "In fact," Zarubin proudly informed his Moscow colleague, "Chord has already begun practical activities.... Financially, it will be ready this winter for use as a cover but, if we needed it even earlier... we could send people under Chord's flag right now."

He let me know that he had sold 75% of the record plant's shares... and that his son Richard... was now a partner in the firm.

Personally, Morros had returned to the movie industry. He is preparing to release four films next year.

If we want to work with him, he is ready to set up together with us a movie firm in the "Federal Film" system, which will produce these movies. $200,000 is needed for this. (Personally, I am sure that it can be done for an investment of $100,000.) This firm could open branches in any country for distributing these films, not drawing suspicion from authorities, since his name is sufficiently known both here and abroad. He has proposed me as a candidate for manager of the New York office since I know languages and foreign countries and come from a capitalist environment.

He guarantees this business will be a success since movies are his craft. He is ready to give a guarantee that in due course money invested in this business will be returned with interest.

He laid down two conditions: 1. Without Stern (he will not take him as a partner). 2. To give him an answer within a month. If there is no answer by the middle of January, he will consider himself free.

One has to be an iron man to tolerate Alfred Stern in a commercial affair, especially in America, where risk, broad scope, and timeliness are the basic elements in any commercial enterprise.... But certainly, Boris Morros is a talented, energetic, and enterprising man. Undoubtedly, he can keep a secret and wants and is ready "to do business" with us. But his problem is... living in a Hollywood environment in conditions of luxury and abundance...
Strong hands are needed to keep him within budgetary limits. Strict... and constant financial controls are necessary. But... he is an honest man and obeys our decisions. When I suggested that he return Alfred's money, without hesitation, he ... liquidated $100,000 of this debt within three months.

Boris is not under suspicion, although as you know, there is an incredible "purge" of Reds going on in Hollywood now.... He travels everywhere, is on friendly terms with Cardinal Spellman, meets with the biggest cinema stars, and has countless acquaintances all over the world, but... is doing nothing with Soviet intelligence... and will be doing nothing if we don't take him into our hands.

Jack Soble was certainly aware by the summer of 1953 that his life was in danger from Soviet intelligence. His anxieties increased later that summer when Martha Dodd - whom, along with her husband, Alfred Stern, Soble had supervised-made headlines as a possible target of Senator Joseph McCarthy's Red-hunting probe. Soble fretted, according to Morros's account to Moscow, that Dodd could identify and name him and had "become cowardly." In mid-December, however, Morros wrote Moscow that the McCarthy committee had begun to investigate Soble's activities in France but had failed to discover any incriminating evidence.

Alfred K. Stern, a former Illinois housing administrator who was charged in 1957 with spying for the Soviet Union, died of cancer today in his Prague exile, his wife said. He was 88 years old.

Mr. Stern and his wife, Martha Dodd Stern, left the United States in 1953 after being accused of subversive anti-American activities. They were indicted in absentia on espionage charges on Sept. 9, 1957.

The indictment charged them with conspiring to act as Soviet agents, receiving American military, commercial and industrial information and transmitting it to the Soviet Union.

The indictment charged that they used their house in Ridgefield, Conn., for meetings with Soviet agents. The charges were dropped 22 years later, in March 1979, when the Justice Department said witnesses considered essential to the case had died.

In testimony before the House Un-American Activities Committee in 1957, the two were named as members of a Soviet spy ring in the United States. The charge was made by Boris Morros, a Hollywood musician and producer, who said he was a United States agent in the Communist movement for 12 years.

After the couple moved to Prague, Mr. Stern said the charges were ''fantastic'' and ''extraordinary.'' Born in North Dakota

Mr. Stern was born Nov. 29, 1897, in Fargo, N.D., into a wealthy family. In 1938, he married Martha Dodd, daughter of William E. Dodd, a historian who was the United States Ambassador to Germany in the days before the start of World War II.

Mr. Stern served as chairman of the Illinois State Housing Commission and later as vice president of the National Association of Housing Officials and director and chairman of the Citizens Housing and Planning Council in New York. He also founded the Institute for Psychoanalysis in Chicago.

In the early 1950's, the Sterns became early and persistent targets of Senator Joseph R. McCarthy and his anti-Communist investigations.

The Sterns went to Mexico in 1953, then visited Prague in 1957 and, after staying in the Soviet Union for about a year, settled in Prague in 1958.

In 1963, the Sterns went to Cuba and lived there until 1970 before returning to Prague.

In Prague, Mr. Stern worked as a consultant to the Construction Ministry, using his expertise in housing and construction technology.

He is survived by his wife and son, Robert D. Stern.

Alfred K. Stern, a multimillionaire businessman who was charged in 1957 with spying for the Soviet Union, died of cancer Monday in exile here, the Czechoslovak News Agency Ceteka reported. He was 88.

Stern and his wife, Martha Dodd Stern, daughter of the last U.S. ambassador to Berlin before World War II, left the United States in 1957 after being accused of subversive activities.

They had been accused before the House Committee on Un-American Activities of spying.

Their accuser was Boris Morros, a film producer and U.S. undercover agent, and the subsequent federal grand jury indictment charged them with conspiring to act as Soviet agents, receiving American military, commercial and industrial information and transmitting it to the Soviet Union.

They were alleged to have used their house at Ridgefield, Conn., for meetings with Soviet agents. The charges, consistently denied by the Sterns, were dropped 22 years later, in 1979, when the Department of Justice said witnesses considered essential to the case had died.

Stern was born in Fargo, N.D, into a wealthy family.

He served as chairman of the Illinois State Housing Commission and later as vice president of the National Assn. of Housing Officials and director and chairman of the Citizens Housing and Planning Council in New York.

After the indictment, the Sterns went to Mexico, visited Prague in 1957 and after staying in the Soviet Union for about a year settled in Prague in 1958.

Stern lived for a time in Cuba, acting as a personal adviser to Fidel Castro. He and his wife were also friendly with other Communist leaders, including Yugoslavia's Marshal Tito and China's Chairman Mao-Tse-tung.

In Prague, Stern worked as a consultant to the ministry of construction, using his expertise in housing and construction technology.

He is survived by his wife and a son.