Here's the snopes article - this was just an urban legend that made it into the papers.
https://www.snopes.com/fact-check/captain-pugwash-double-meanings/
And the number two was Master Mate, not Master Bates !! I think that's how the urban myths originated - the guy who voiced the cartoon did quite a nasal tone for Pugwash and so Master Mate on occasion did sound a bit dodgy! From there it was just a matter of time for the myth to spread and grow.
All good fun, though!