Approaching war

In the spring of 1932 the British Cabinet abandoned the ten-year rule it had adopted in 1919, though, because of the desperate economic circumstances of the time, this was not taken to be a signal that defence expenditure might immediately be increased. Nevertheless, in the mid-1930s the government’s purse-strings began slowly to be loosened, as Britain started to rearm in the face of mounting international challenges. The occupation of Manchuria by an aggressive, expansionist Japan in 1931 challenged British interests in the Far East. In the 1930s, too, the Italian Fascist dictator Benito Mussolini began to pursue an increasingly assertive foreign policy, seeking to establish a new Roman empire across the Mediterranean and in Africa. With a modern, powerful navy under construction, Italian ambitions threatened Britain’s vital imperial communications and trade across the Mediterranean, Red Sea and Indian Ocean. Adolf Hitler’s ascent to power in Germany in 1933 was accompanied by heightened German aspirations, as his militaristic Nazi government set about righting the wrongs (as they saw it) of the punitive Versailles peace settlement. Germany’s militarism unsettled and alarmed its neighbours, especially the newly independent, post-1919 states of Czechoslovakia and Poland in Central Europe.

Crises in the 1930s

From the start the new Nazi government in Germany began persecuting Jews and implementing increasingly restrictive and draconian policies which were to culminate in the Final Solution. Anti-Semitism, indeed, was rife throughout interwar Europe and had stimulated a growing stream of refugees to Palestine, where Zionists endeavoured to establish a Jewish National Home. In Palestine, which the British ruled as a League of Nations Mandate under the Versailles treaty, the growing numbers of Jewish settlers helped to destabilise an already difficult communal situation and contributed to the outbreak of an Arab rebellion against the Jews and the British which lasted from April to October 1936, and erupted again from November 1937 to November 1938. Backed by the RAF, who took the leading role in ‘imperial policing’ through the Middle East, SIS had established a station in Jerusalem in 1933. The representative had cover as Military Liaison Officer in Air Headquarters, and the air force paid the greater part of the station’s expenses. Major John Shelley, a fluent Arabic-speaker who had been a Military Intelligence officer in Shanghai, was the first head of station, but was not a great success and was replaced early in 1936 by ex-Indian Army Major John Teague, who by 1939 had two assistants. One tiny indicator of the Service’s refocusing on Germany in the mid-1930s occurs in the records relating to an officer, talent-spotted by Shelley in 1934. He was interviewed by Rex Howard, who judged him ‘to be of a superior type & eminently suitable’ for appointment in the Middle East. Having been approved for employment in the Service, but waiting for a vacancy to occur, the candidate wrote to Howard arguing that he could increase his usefulness ‘by learning another language’. What would be the most suitable one for him to learn? Having consulted Shelley on the matter, Howard noted: ‘German suggested.’

Palestine became an increasingly heavy commitment for the army and RAF as internecine strife intensified and the Arab revolt simmered on. In the later 1930s troubles in Palestine kept some twenty thousand British troops pinned down ‘in peace-keeping operations which showed no sign of ever coming to an end’.1 Although the work of the Jerusalem station had originally been intended to cover the Arab Middle East generally, under Teague it tended to concentrate on Palestine and the help that neighbouring countries were giving to the rebellion. Teague himself recalled that political intelligence from Iraq ‘was only generally second grade’, though information was ‘quite good about the clandestine support that the Iraq Government was giving to the Mufti of Jerusalem, as the spear head of the Palestine revolt’. Syria and Lebanon, he thought, were ‘not too bad’, but ‘Persia [Iran] remained naked and unashamed’. Another task was monitoring illegal Jewish immigration, as the Mandate authorities had placed a limit on Jewish settlement in the country. Drawing on SIS’s resources in Turkey and the Balkans, Teague reported that SIS tracked the departure of ships from Black Sea countries and their movement through the Dardanelles. ‘The fact’, he added (embodying a shrewd participant’s observation about the acquisition and use of intelligence), ‘that the British could do nothing to prevent these derelict hulks from reaching the shores of Palestine did not make the information in itself less excellent.’

The Ethiopian Crisis of 1935-6 epitomised Mussolini’s new imperialistic foreign policy. Seeking to expand its African possessions, which already included Libya, Eritrea and Italian Somaliland, Italy invaded Ethiopia in October 1935 and in seven months had conquered the country. As with Japan in Manchuria, the aggressor power simply ignored international protests, a lesson not lost on Hitler later in the decade. During the crisis the perennial problem of SIS finance was illustrated by work in Malta. As tension rose in the autumn of 1935 Biffy Dunderdale was put in charge of a new organisation to develop intelligence operations from the island and co-ordinate it with the armed service authorities there. One early venture was a disinformation scheme whereby SIS set about circulating a rumour among Italian agents and ‘unreliable’ Maltese that a special installation with ‘shattering interference apparatus’ to bring down aircraft was being erected on the RAF station at Kalafrana in the south-east of the island. But Malta had hardly got started before operations were checked. ‘Until further funds are forthcoming,’ instructed Sinclair on 25 October, ‘no more commitments of any sort are to be entered into in connection with the Mediterranean situation.’

Another crisis bringing work for SIS was the Spanish Civil War, which broke out in July 1936 between the left-wing Republican government and Nationalist forces led by General Francisco Franco. Although Britain and France brokered a widely supported, though largely ineffectual, Non-Intervention Agreement in August 1936, Germany and Italy (especially the latter) provided men and matériel for the Nationalists; and the Soviet Union intervened on the Republican side, which was also boosted by volunteers from many countries in the International Brigades. SIS’s existing, if rather haphazard, monitoring of Communist activity in Spain meant that the Service was initially better equipped to report on Soviet involvement, though some of this was frustratingly imprecise. In April 1936 a report from a Moroccan-based agent (communicating through Gibraltar) stated that in March an unnamed Soviet ship had landed ‘two large boxes containing rifles and small arms at Algeciras’. The report added that at about the same time the Soviets had provided ‘a few million pounds’ to Communist organisations in Spain. The Political Section in Broadway thought the whole thing ‘of little value’ as the agent did not ‘appear to have checked up his information’. SIS, however, as it informed French Deuxième Bureau colleagues in April, had ‘not the slightest doubt that the Communist International, through its centre in Paris, is financing and controlling overt and subterranean activities in Spain’. French opinions were solicited on the matter, since ‘the establishment of a Soviet regime in the Iberian Peninsula is hardly a happening which anyone can view with equanimity for military, political or economic reasons’.2

SIS was less well positioned to get information on the Nationalist side, but after a fiercely anti-Communist Englishman, Major Hugh Pollard, assisted the Nationalists in July 1936 by flying Franco from the Canary Islands to Morocco, allowing the general to kick-start the armed challenge to the Republic, the Service thought that he might be able to help. Pollard, sporting editor of the magazine Country Life, was a fervent, Fascist-sympathising Catholic with a colourful past, including time as a ‘police adviser’ in Dublin Castle during the Anglo-Irish War of 1919-21.3 In November 1936 Frederick Winterbotham, head of the Air Section, approached Pollard and asked him if he would be prepared to go to Spain and personally put a long series of questions to Franco about his military plans, the external aid he was receiving and how he intended to use his air force. But Pollard asked for too much in return - a diplomatic passport, ‘pay and allowances on the full scale’ and expenses to cover the cost of his horses - he planned to do some hunting while in Spain - and the scheme did not proceed (though during the war Pollard later served in SOE).

The following spring, by which time the Nationalists had been making advances in the north of the country, the Directorate of Military Intelligence (responding to a complaint passed on by the Cabinet Secretary, Sir Maurice Hankey that there was not enough ‘red-hot information from Spain’) noted on 9 March that, owing to the ‘sudden outbreak’ of the war, SIS had ‘unavoidably been somewhat slow in developing their organisation’ in the country. Sinclair was well aware of the problem, though he observed that it was a matter which ‘cannot be done on the spur of the moment’. David Footman of the Political Section remarked on the ‘violent spy hysteria on both sides’ and defined the ideal as ‘agents who can talk freely to the men at the top’. He proposed various possibilities, including liaison with the French through Dunderdale, placing someone at the headquarters of General Eoin O’Duffy (who commanded a ramshackle collection of Irish Fascist Blueshirts), and getting an agent into an ambulance or relief organisation on either side. By the end of March some progress had been made. Dunderdale found a man to report on the flow of foreign volunteers into Spain, and Leonard Hamilton Stokes, a sailor who had first been employed by the Service in the Balkans, began developing some sources from Gibraltar in the south. Aware that the government side was better covered, Sinclair ordered a special effort ‘regarding General Franco’s position, policy and prospects’. There was evidently not much progress on this front as six months later Footman minuted that it should be impressed upon Hamilton Stokes ‘that General Franco’s position and policy, his relations with Italy, and Germany, the Italian intentions, military support and naval co-operation together form the most urgent European problem of today’, and he ‘should spare no effort in developing his organisation to cover them’.

Despite the lack of success in Spain itself, Sinclair was evidently getting good intelligence on Mussolini and his intentions concerning the conflict, for on 19 October 1937 he wrote a well-informed note for Sir Warren Fisher on the subject. ‘The main point of the present situation to my mind’, wrote Sinclair, ‘is that Mussolini has simply got to go on in Spain, and that as we are not in a position to go to War, it is far better to let him exhaust himself in Spain rather than he should “run amok” outside Spain.’ Sinclair argued that if ‘we are cautious’ Mussolini might ‘dish himself ’: ‘Taking the long view, time seems to be more on our side than his and nothing is to be gained by rushing matters.’ He thought that Germany might egg the Italians on to challenge Britain and France, but was itself likely to remain neutral and ‘profit by the occasion to achieve her aims as regards Austria and Czechoslovakia’. If there was some useful political intelligence, the same could not be said on the technical side. Also in October 1937, London told the two SIS stations in Paris that War Office requirements were not being met for technical data on new German and Russian weapons being used in Spain. Over the succeeding months Dunderdale recruited an agent who had contacts among Francoist interrogators of Russian International Brigade prisoners-of-war and provided photographs of a new quick-firing Soviet machine gun, as well as information about Soviet high-speed fighters and the arrival of a Soviet air brigade of bombers.

This was evidently not enough for the Air Ministry, who complained bitterly on 1 November 1938 that ‘after more than 2 years of civil war in Spain in which the latest equipment of the Italian Air Force (German, Russian and French also) has been employed’, they had ‘received practically nothing of concrete value from the technical and tactical points of view in the way of secret intelligence’. SIS had provided ‘virtually no information about guns, bombs, anti-aircraft, nor any statistics which would enable us to determine the relative advantages of the different types of weapon in use’. Air Intelligence ‘should have expected by now that we should have quite a museum of guns, bombs, fuses, shells and other technical equipment delivered to our armament research people through the efforts of S.I.S.’. It was conceded that ‘the organisation of secret intelligence work is no doubt difficult but the conditions for obtaining such information could hardly be easier than they are in a civil war in Spain where in both sides there must be very large numbers of traitors at large, and a very large proportion of them sorely in need of cash’.

Sinclair was appalled by this devastating critique. ‘Why has this not been drawn to my notice before?’ he asked, prompting an understandably defensive response from ‘IIa’ of the Air Section. Specific requests for technical equipment had apparently been made in July 1937 and July 1938, but without significant response, and telegrams reiterating the requirements had been ‘immediately despatched’ to the relevant stations. Representatives had been offered ‘an additional £500’ for ‘obtaining samples of technical equipment’. The official admitted that little information had been provided ‘on guns, bombs or anti-aircraft statistics during 1937/8 and only one fragment of bomb and no technical equipment whatsoever’ had been received ‘since the beginning of the Civil War in Spain’. He suggested rather lamely that part of the explanation lay in ‘the difficulty of contacting German XA [Air Force] personnel serving in nationalist Spain’, as they were ‘unapproachable by reason of being isolated in aerodromes under German control’.

In April 1937 Sinclair had told Hamilton Stokes in Gibraltar that gathering intelligence on the Italian armed forces was ‘of the highest importance’. On 2 June he assured Hankey that, ‘in my opinion, Italy should occupy the position of Public Enemy No. 1, as far as this country is concerned’, and, fearing a crisis in Anglo-Italian relations (which did not in the end occur), London sent out questionnaires on Italian naval and military matters to the heads of station at Sofia, Brussels, Cairo, Rome, Athens, Vienna and Paris. For nearly three years, up to August 1938, a network targeting the Italian navy in Trieste and Genoa had operated quite successfully out of Austria, but after the Anschluss which united Germany and Austria in March 1938, arrests by the Gestapo broke up the organisation.

By the time Franco and the Nationalists had won the Spanish Civil War in the spring of 1939, there is little evidence that SIS had been able to produce very much of value in political or technical military information. At this stage, however, the Service’s chief focus had turned to Italy and Germany. In February 1937 Captain E. H. Russell, head of SIS’s Naval Section, told Sinclair that ‘for many years to come the Mediterranean will be one of the chief centres of activity during strained relations or war’. It was therefore ‘essential to obtain a resident agent both in Sardinia and Sicily . . . to report on naval concentrations and coast defences, air concentrations, aerodromes and military subjects’. On 10 March a circular went out to all the SIS stations in Europe and North Africa to find suitable candidates. Within a month Biffy Dunderdale in Paris believed he had discovered the very man, a French commercial traveller, already working as an agent for the French navy. Dunderdale said that his motivation to work for the British too was that ‘he believes our two countries should stand together whilst he is also desirous of adding to his income’. This agent’s brief relationship with SIS demonstrates some of the practical difficulties of expanding operations. Dunderdale paid him quite generously to visit the strategically important island of Pantellaria (a particular target, west of Malta between Sicily and Tunisia). When his report went to London, Winterbotham of the Air Section cast doubt on details of the Italian aircraft carrier Miragli, allegedly in the island harbour, while the Naval Section maintained more of an open mind. Although Rex Howard thought it ‘extremely doubtful’ that the agent had been to Pantellaria at all, the report was passed on to the Admiralty and Air Ministry for comment. Dunderdale began to get cold feet about employing a man who had been ‘doing this kind of work far too long under too many masters’, and claimed that ‘in normal circumstances I should never employ such an individual but in view of the present situation I thought I would give him a trial’. Even after the Admiralty and Air Ministry commented favourably on his intelligence (which suggests that in this case their critical faculties might have been blunter than those of SIS), the risk of running an existing French agent seems to have been too great for Dunderdale, who appears to have dropped him shortly thereafter.

Anglo-French liaison

The fact that SIS stations operated in France from the mid-1920s onwards reflects the importance of liaison with the French security and intelligence authorities. At the start, Biffy Dunderdale’s station focused mostly on the Soviet target, using (among others) some White Russian contacts first established in postwar Istanbul. Dunderdale was very protective of these men, a number of whom supplied information from within the Soviet Union, though a proportion of this could hardly be described as espionage. In 1934 he described one Paris-based émigré, who had been employed by SIS for seven years, as being particularly useful in obtaining official handbooks from the Russian Military Publishing Office, in which he had ‘a friend to whom he frequently sent presents’. He also supplied ‘reports on Russian naval matters based on personal knowledge, press & casual sources’, as well as obtaining ‘newspapers prohibited for exportation’. Another of Dunderdale’s old Istanbul contacts worked in a Soviet army office in Tiflis and sent information about military movements and some technical material on weapons and equipment to Paris enclosed in local newspapers. There was also a network in south Russia based round a railway official, whose reports on railway traffic in the ‘central Asian Military District’ Menzies described in November 1930 as ‘very valuable’. Eighteen months later, however, this agent and his group were dropped for being too costly.

The French authorities were aware of at least some of Dunderdale’s activities, and there had been direct co-operation, for example, in debriefing the Soviet defector Boris Bajanov in 1928. During the 1930s, moreover, it is clear that the French not only condoned Dunderdale’s work but also collaborated with SIS in targeting Germany.4 In November 1933, based partly on information evidently provided by official French sources, Menzies circulated a detailed review of the state of French intelligence. As in Britain, money was an issue and Menzies observed that the French equivalent of SIS (the Service de Renseignements) had recently been obliged to reduce some operations due to budget cuts. He noted the close relations between the French and Polish Secret Services and that the French were obtaining valuable results on Italy from a network based in Algiers. Several French agents had been placed in Germany, but they were ‘definitely forbidden to send in any reports at present’, as they were intended solely for use in time of war. Menzies also thought it worth remarking that the French were employing a number of ‘high class female agents’.

From the mid-1930s Dunderdale forged increasingly close relations with French colleagues. Lieutenant Paul Paillole of the counter-espionage Service de Centralisation des Renseignements met him in 1937, and afterwards recalled that he was a most agreeable and charming colleague (‘un camarade séduisant, d’une elegance raffinée’) whose efforts to foster friendly relations were greatly appreciated on the French side. By the late 1930s both sides were sharing information about the Abwehr (Military Intelligence) and the Sicherheitsdienst (the Schutzstaffel (SS) security service), as well as the methods and propaganda of the Nazi regime generally.5 On a visit to Colonel Rivet, head of the Service de Renseignements, in October 1937, Menzies (described by the French as the ‘Chief ’ of the British Intelligence Service) said that he was interested in three broad topics: German military information; Italian activities in the Mediterranean generally, as well as specific details of Italian and German military equipment being used in the Spanish Civil War; and political opinion in France, especially about possible Anglo-French action regarding Spain. Menzies admitted to the French that there were many shortcomings in his intelligence on the German army, but that he was much better informed about Italian matters and military developments in Spain. Reflecting on German ambitions in Central Europe, he predicted that German forces might occupy Austria within three weeks (it was in fact five months before this happened), and Germany would certainly put similar pressure on Czechoslovakia. He thought that neither French nor British public opinion would favour going to war over Czechoslovakia. The British, he insisted, were not ready for military action, nor would they be for some time. In his view, therefore, the only option for the moment was to wait. The French considered that this unusually frank political opinion was ‘certainly a personal opinion’, but not a ‘negligible’ one, bearing in mind the significant role they assumed Menzies played in the British War Office.6

In July 1938, through Rivet, Menzies arranged a meeting with French intelligence officers for Major Richard Stevens, head of station-designate at The Hague.7 Stevens subsequently spent some time at the Deuxième Bureau (the intelligence branch of the French War Ministry), where the French shared information with him about German agents they believed were run from the Netherlands to work in France. Stevens confirmed to London that the French were most anxious to establish closer liaison with the Netherlands SIS station for both secret intelligence and counter-intelligence matters. He reported that he had been received by the French with the ‘utmost kindness and frankness’ and that their ‘offer of reciprocal co-operation’ was ‘an absolutely genuine one and without arrière pensée of any sort’. Thanking Rivet personally for the ‘extraordinarily kind reception which you gave to Stevens during his few days in Paris’, Sinclair asserted that he had ‘come back more French than British, and you certainly have a good Representative in my Service! I trust’, he added, ‘that the collaboration which will be arranged in Holland will prove of value to both our services.’

Over the next few months there were further reciprocal visits between the French and British services. In December 1938 David Footman (of the Head Office Political Section) went to Paris to build collaboration on political intelligence matters especially relating to the Soviet Union, the Far East and the Mediterranean. On his return to London he reported that a meeting with a French Colonial Intelligence officer had passed off ‘very happily’, largely due ‘to the excellent personal relations which 45000 [Dunderdale] has already established with his French friends’. In January 1939 Dunderdale was involved in a visit to Paris by Captain John Godfrey, the Director of Naval Intelligence-designate. On 12 January Godfrey came to Dunderdale’s office to be shown SIS’s methods of work, security, production of maps, reports and plans, including aerial photographs. Dunderdale afterwards learned from a mutual friend that Godfrey was satisfied with the visit, as were the French. ‘Their impression of Capt. Godfrey was a very good one,’ he reported, ‘and I am sure that they will do everything for us after his visit.’ At the end of January a French intelligence mission came to London for talks involving Menzies and Stevens of SIS, along with Kell and other MI5 officers. Menzies told the French he believed the Germans were not seriously preparing for military action against the West. Further afield, he noted that the British were extremely concerned about Japanese activities in the Far East. The Middle East was also a problem, and he hoped that there could be improved liaison between SIS and French intelligence in Syria and Egypt. Stevens, who worried that some of his predecessor’s agents might have been turned by the Germans (how right he was), reported that he had established very good links with the security authorities in the Netherlands and was developing a twenty-strong network to work against the Germans. This, added Menzies, would be entirely at the service of the French and he proposed that while SIS focused on developing anti-German work in the Netherlands, the French should concentrate on doing so in Belgium and Luxembourg.8 About this time, too, on SIS initiative, the Dame Blanche organisation was being reactivated.

Among the topics raised during the French visit to London in January 1939 was that of the two services collaborating with anti-German double agents based in the Low Countries. One such was a Belgian, ‘Li 270’, who had been recruited by both French intelligence and the German Abwehr in 1934. He provided his French case-officer with German questionnaires on the French aircraft industry (together with his replies), and in January 1939 supplied another document indicating intelligence requirements on Britain. This also focused on air power and revealed German suspicions that the British wanted to establish airbases in the Netherlands. Menzies was sufficiently interested to press his French counterparts in March 1939 for any further information from the agent. There was nothing more from the German side, but in June 1939 Li 270 was approached by the Italians to spy on England. While the return from this agent was not great, Olivier Forcade has observed that it illustrates the ‘prudent partnership’ of the two intelligence services, and their increasing co-operation, ‘independent of staff talks and diplomacy’, on the eve of war.9 This early SIS engagement with double agents was one of the origins of the Double-Cross System which produced such valuable returns during the Second World War.

Over the spring of 1939 Dunderdale began to work with the French on arrangements for mobilisation in the event of war with Germany or Italy, and he got Menzies to invite Rivet to London for informal discussions regarding arrangements should a British Expeditionary Force again be deployed in France. During their visit (in early June), Rivet, Captain Henri Navarre (of the German Section of the Service de Renseignements) and Commandant Brun (their mobilisation officer) were given red-carpet treatment, being put up at the Dorchester Hotel and dined at the Savoy, as well as having discussions with Menzies, Hubert Hatton-Hall (of the Army Section) and Rex Howard. With the scale and intensity of Anglo-French co-operation stepping up markedly over the summer of 1939, Sinclair worried about the burden Dunderdale was carrying. While recognising that he was the principal link with the French, Sinclair felt it was ‘impossible’ for him ‘to carry out all aspects of this liaison contact’ without interfering with his ‘most important work’, which was obtaining intelligence. Sinclair therefore told Dunderdale to confine himself to work connected with agents, ‘agent doubles’ and French General Staff duties, while the head of station (now Major Geoffrey W. Courtney, who had replaced Jeffes in late 1937) would deal with counter-espionage, field security, censorship, passports ‘and any kindred matters’.

One cost of the burgeoning Anglo-French intelligence relationship was an increasing British reliance on what turned out to be inflated French estimates of German strength and capabilities. Douglas Porch has argued that the Deuxième Bureau’s low status and limited budget had ‘serious consequences on the quality of intelligence passed on to the high command . . . Annoyed that their message was not striking home, intelligence officers raised the tone of their reports, [and] exaggerated the numbers of German soldiers, tanks and aircraft.’ Lieutenant Colonel Kenneth Strong, who had been assistant military attaché in Berlin until the outbreak of war and then served in the Military Intelligence German Section in the War Office, recalled that French estimates were sometimes 20 per cent higher than British figures. This phenomenon continued into 1940, when (according to F. H. Hinsley) it ‘led Whitehall into over-estimating the total number of German divisions’, though this, he asserted, ‘had no unfortunate strategic consequences’.10

Of all Dunderdale’s French liaisons built up during the 1930s, the most important turned out to be that with Captain Gustave Bertrand, head of the French cryptanalytical department, the Section des Examens. Between 1931 and 1938 an exceptionally valuable French spy in the communications section of the German army, Hans-Thilo Schmidt (known as ‘Asché’) supplied information about the Enigma cypher machine. Bertrand passed some of this material to the Poles and the British, helping the former both to build replicas of the machine and to decrypt some Enigma traffic from 1933 until December 1938, when the Germans introduced improvements. By Hinsley’s account, the British initially ‘showed no great interest in collaborating’ with the French (or, indeed, the Poles).11 By the autumn of 1938, however, the situation had changed significantly and at the start of October Commander Alastair Denniston, the head of the Government Code and Cypher School (GC&CS), told Sinclair that documents supplied by Bertrand were ‘of assistance to our researches on the Enigma machine’. Indeed, Captain Tiltman of GC&CS’s Military Section described the documents as ‘of first importance and the saving of time and labour resulting from their possession is quite incalculable’. Dunderdale brought Bertrand to London to liaise personally with colleagues in GC&CS and from October 1938 the French handed over a wealth of signals intelligence material to the British through Dunderdale.

Although in January 1939 Bertrand organised a meeting between French, British and Polish experts, British willingness to co-operate with the Poles (and the Poles’ readiness to share their work on Enigma) did not really develop until after Neville Chamberlain’s public guarantee at the end of March to side with Poland in the event of a German attack. Late in July a second, and much more productive, Anglo-French- Polish meeting was held near Warsaw, following which the Poles supplied replica Enigma machines for both the British and the French. On 16 August Bertrand, accompanied by Dunderdale, delivered one of these to London. According to Bertrand, they were given a ‘triumphant welcome’ at Victoria Station by Stewart Menzies, dressed for dinner with the rosette of the Légion d’Honneur (which he had received for service in the First World War) in his buttonhole.12 Although Menzies clearly appreciated the significance of this occasion, and the importance of the French and, especially, the Polish contributions to GC&CS’s work on Enigma, he can scarcely have anticipated just how momentous and vital the war-time breaking of Enigma would be. This astounding breakthrough was not by itself a war-winning achievement, but F. H. Hinsley afterwards calculated that it shortened the war - and saved countless Allied lives - by perhaps three or even four years.13

Penetrating Germany

By the spring of 1938 it was no longer primarily finance which constrained SIS’s work. In April 1938 Sinclair told the Deputy Chief of the Air Staff that it was not ‘a question of money, as we have now ample funds with which to take advantage of an opportunity which offers, or any circumstances that may arise, in which money might help’. ‘No one’, he said, was ‘more fully alive to the importance of obtaining information as to German Air Rearmament than the S.I.S., but the fact of the matter is that during the last twelve months or so, things have become very difficult indeed in Germany.’ Ever since the Nazi assumption of power in March 1933 Sinclair had been worried about Germany. In October that year he told Ernest Dalton, head of station at The Hague, that ‘unless a miracle intervened’ there would be war between France and Germany in a very few years. With Sinclair evidently assuming that (as in 1914-18) the Netherlands would remain neutral, Dalton was instructed to ensure that ‘(i), our communications and (ii), information about the German Armed Forces shall be maintained in the event of war’. In the early 1930s SIS had few sources within Germany itself. The most important was a Balt, Baron William de Ropp, born in Lithuania (then part of the Russian empire) in the 1880s. He was naturalised British, having served with the British forces in the First World War. After the war he had offered his services to British intelligence, and was first seen by Menzies on 30 April 1919, after which he was taken on as an agent. He worked as a journalist in Germany and the Baltic states, and during the 1920s, coded ‘821’, he reported regularly on German political matters. Although there were concerns in Head Office about just how valuable he was (especially as he was being paid £1,000 a year), the pressing need for intelligence following Hitler’s rise to power gave him a rarity value. ‘He is putting out some good stuff at the moment,’ wrote Rex Howard in February 1934, ‘and is our almost only [sic] resource in Germany.’

One of de Ropp’s high-level Berlin contacts arranged for the head of SIS’s Air Section, Frederick Winterbotham (posing as a ‘member of the Air Staff’), to visit Germany in March 1934, during which he had an interview with Hitler, made his number with several senior Nazis, met young Luftwaffe pilots and successfully established himself with them as a friendly face. On his return Winterbotham reported on the Germans’ unmistakable plans to develop a first-class, modern air force.14 De Ropp himself built up relationships with the Reichswehr, the Luftwaffe and the Schutzstaffel (SS). In September 1934, at Hitler’s personal invitation and with a select party of British guests, he attended the Nuremberg rally, and reported to SIS on the occasion. He received subsequent invitations to Nuremberg and in October 1937 met the Gestapo leader Reinhard Heydrich, whom he proposed to cultivate through liaison against ‘Bolshevik personalities and intrigues’. Worried that the Germans might themselves manipulate the contact, Vivian turned down the suggestion as too risky. ‘I would have nothing to do with this tortuous scheme,’ he minuted. ‘ACHTUNG!’

De Ropp was mainly briefed and debriefed by Woollcombe during visits to London, but he also reported discreetly in Berlin, met by Foley or a colleague from the Berlin station. This, though, became increasingly hazardous. There exists on file a copy of some extremely detailed security instructions laid down by Sinclair personally to Foley in October 1933 for meeting de Ropp and handling his reports so as to avoid the slightest risk of compromise. No papers relating to the agent were to be kept in Foley’s office or typed there; no meetings held in apartments or in the PCO’s office; de Ropp’s reports were to be written on the day fixed for a meeting and at the last minute before the meeting, ‘so that he walks straight out to the meeting with them, and they are in his possession, or in his flat, for as short a time as possible’; meetings to take place on the last day before bag day (when the diplomatic bag was sent to London) ‘according to a pre-arranged roster of varying rendezvous. This in order to avoid telephone messages about meetings.’ These instructions are a clear indication of the importance attached to the case, and of Sinclair’s own close attention to detail. In August 1938, following the Anschluss and increased Gestapo surveillance of foreigners, de Ropp began to get edgy and asked to be moved away from Germany, but Sinclair did not approve. ‘If de Ropp is to be of any use,’ he wrote, ‘he must work between here and Germany.’ The agent, however, relocated to Switzerland that August and, although he continued to report for the next seven years, his work was increasingly discounted at Head Office. By July 1944 Claude Dansey, then Vice Chief of the Service, decided that all de Ropp represented now was ‘a vehicle for Nazi propaganda’.

The question remains open as to which side got the greater benefit from the de Ropp case. The Germans evidently thought that they got the British contacts they wanted, although it did them little good in the end. Through Winterbotham, who seems to have played his part well, the British got timely intelligence about the development of the Luftwaffe which they probably would not otherwise have been able to acquire, as well as uniquely close-up observations on the characters and ideas of the Nazi leadership. In June 1938 Woollcombe estimated that ‘at least 70%’ of SIS’s German political intelligence came from one very good source, de Ropp. ‘If for any reason we lose him,’ he wrote, ‘it is obvious that our supply of “XP” [political information] will . . . be very seriously affected.’ Whether or not this intelligence was put to good use by its recipients is a different matter.

SIS’s best source for German naval matters was the veteran agent Dr Karl Krüger (TR/16) whose continued access to German shipyards informed reports especially about submarines, the construction of which had been prohibited under the Treaty of Versailles. This was of special interest to the Admiralty as the U-boat was (in Wesley Wark’s words) ‘pre-eminently an anti-British weapon’. In the spring of 1935 SIS reported that the Germans had begun discreet preparations to rebuild their U-boat force and there were ‘strong indications’ they were ‘already constructing several submarines’. Demonstrating the confused state of contemporary intelligence on this subject, the naval attaché in Berlin, Captain Gerard Muirhead-Gould, while confirming German ambitions to have a submarine arm, erroneously assured London that construction had not yet commenced. Although the Admiralty, it appears, initially placed more weight on Muirhead-Gould’s assessment than on SIS’s report, the latter was confirmed by a public statement from Berlin the following month. In July 1936, again apparently based on SIS information from Krüger, a detailed paper on German naval construction, jointly prepared by the Naval Intelligence Directorate and the Industrial Intelligence Centre (which had been established by Desmond Morton in 1931), reported German plans for the mass production of submarines.15 The Admiralty, however, remained unconvinced, though afterwards it turned out to be quite true. In November 1939 the SIS Naval Section grumbled with some justification that they had warned about German submarine construction and had ‘continued this warning notwithstanding the incredulity of the Admiralty when the German[s] informed them officially that it was not taking place’.

At the beginning of 1938 Winterbotham affirmed that German air information was ‘one of the most vital to the country and no opportunity should be lost to hammer into the heads of the representatives concerned the necessity to obtain some agents of high standing in place of a whole bunch of organisations’. Frank Foley, for example, should be instructed to ‘cling on to “Jones” at all costs’. In April 1937 a person signing himself ‘B. Jones’ had handed a letter into the British consul in Zurich for onward despatch to the ‘Officer Commanding the Military Section of the Intelligence Service’. The letter expressed pro-British sentiments and explained that a Luftwaffe officer friend of the writer was willing to supply documents at £100 a time. Copies of five recent German Air Ministry orders were enclosed, which, when the material was forwarded to London, were found to be of the highest importance. The case was controlled by Head Office with Foley in a supporting role, but was extremely difficult to run, mainly because of the problems posed by communicating in a police state with a pseudonymous document-producing agent who refused personal contact. Communication was through poste-restante addresses in Germany and ‘Jones’ deposited several packets of documents with British consuls in Germany and Switzerland. The agent abruptly ceased activity in February 1938, less than a year after he had made the first contact, when he felt himself coming under suspicion. It was a frustratingly brief run of success, as Winterbotham had estimated the material supplied to be ‘worth all the rest of the money spent on German air information put together’.

Four months later Winterbotham sent an RAF officer, ‘479’, on a motoring tour of Germany to obtain eyewitness reports of German airfields. Bringing with him ‘a suitable [female] secretary’, 479 paused in the Netherlands where he spent two days ‘coaching’ his companion. For three weeks they toured Germany, but found the going quite hard. As a general rule the Germans, it seemed, did not bring the edges of their airfields right up to the road. In the worst cases there was a belt of cultivation one or two hundred yards deep between the road and the aerodrome, evidently intended to keep interested observers at a distance and ‘quite unlike anything in this country’. In too many instances 479 could see only the tails of aircraft and ‘seldom got close enough to get numbers’. He was also driving a distinctive vehicle, and ‘every time we stopped we were surrounded by small boys all anxious to know the power, speed, make and price of our Wolseley. There can be few small boys in N. W. Germany’, he reported, ‘who do not remember the strange English couple and their car.’ More dangerously, they attracted the attention of Nazi Brown Shirts, who ‘turned the car inside out’ and followed the couple for several days. The two ‘decided to confuse the issue so made wild dashes all over the country’ which ‘either shook them off or they lost interest’. After covering some 2,400 miles, 479 cut the mission short and returned home, principally because his companion had become ‘alarmingly tired and sick with indigestion’. She had nevertheless done ‘very good work drawing etc’ and deserved ‘the highest praise for risking her reputation to help me out of a difficulty’ (479 had originally planned to travel with his German-speaking sister, but her husband had refused to allow her to go). Winterbotham considered 479’s report to be ‘of considerable value’, having succeeded in ‘discovering the exact positions of concentration aerodromes, which we had previously been unable to get’. He sent the agent to Germany again in September 1938, when he brought back some unspecified, though ‘very valuable’, information.

On the military side, in February 1938 Sinclair himself cabled Monty Chidson at The Hague suggesting that the recent purge of the German armed forces ‘makes available officers who will be antagonistic to the Nazi Party and might succumb to tempting offers from us . . . Funds are available. ’ Similar wires were sent to Prague, Paris and Brussels. Chidson was asked if Krüger (TR/16) might be asked to find a disaffected officer, for which the Service would be prepared to pay ‘a very handsome bonus’. In addition, ‘a considerable sum would be available for payment to the officer himself, such sum being dependent on the position he held and the consequent value of his information’. Krüger had been reporting on the Luftschutzbund (the air defence organisation, in which he was employed), and also naval shipbuilding (as he had done for so many years). In June 1937 he supplied secretly taken photographs of destroyers being fitted out at the Germania Werft in Kiel. Towards the end of the year the Economic Section VI in Head Office noted reports and maps, useful ‘from a bomb target point of view’.

By the late 1930s, Krüger, now over sixty, was beginning to run out of steam and thinking of retiring. There were increasing comments about the inaccuracy of his reports and security in Germany, too, was tightening. He had a scare in March 1938 when the Gestapo visited him after he had been spotted near an airfield. Krüger (who by this stage was known as ‘016’) continued to work on naval matters and coast defences, meeting his case-officer in Rotterdam every month up to 18 July 1939, when the next meeting was scheduled for 20 August. ‘He failed to arrive,’ reported The Hague on 24 August, but a postcard purporting to be from him had been received proposing a meeting in Germany. This aroused suspicions since it was the first time he had ever ‘suggested that someone should visit him in 12-land [Germany]’. The Head Office minuting on the report was uniformly pessimistic. ‘This is one of the agents [Jack] Hooper said the Germans knew of,’ wrote one officer. ‘Looks as though he has been liquidated.’ ‘He may well have written the post-card under the direction of the Gestapo,’ observed Howard. ‘Looks like a trap,’ added Vivian. So it was (and, wisely, no one was sent to meet him in Germany), though the Service did not discover until after the war that Krüger had been betrayed by a member of The Hague station staff, Folkert van Koutrik, who had been recruited by the Abwehr in October 1938.16 A proforma for the Finance Section on 7 November 1939 laconically records poor Krüger’s fate. By the entry ‘To whom payment discontinued’ was typed ‘016’; and against ‘Remarks’: ‘Agent presumed “dead”’.

The patchy state of secret intelligence in the period immediately before the war was revealed in late June 1938 when Rex Howard asked each of the Head Office sections to report on whether or not their German requirements were being met. Menzies, head of the Military Section IV, replied that he was ‘satisfied with the efforts although the results are disappointing in that we have no military source of any standing and have to rely on numerous small fry’. Winterbotham remarked: ‘Results are not very good but I am hopeful.’ Rather more encouragingly, Captain Russell (for whom Krüger was an important source) reported that penetration of German dockyards was satisfactory for peacetime requirements, but he lamented the fact that he did not have either an officer or a rating serving in the fleet, or a person who could mix freely with naval officers. Admiral Limpenny, head of the Economic Section VI, reported ‘excellent’ information on naval construction, but less good for aircraft. Over the last eighteen months ‘very little’ had been received ‘in regard to production figures and numbers of hands employed in individual factories’. There was a ‘serious lack of information’ on ‘Land Armaments’, and the only information he had ‘on manufacture and outputs of German gun factories’ came from the Anglo-French-Belgian BOX organisation. Finally, Woollcombe offered his opinion on the political intelligence he received. While de Ropp was the most prolific source, he had a fair number of other, occasional agents, including some journalists working in Germany, and stressed the need ‘to increase our supply of first class agents who can provide real authoritative information on German high policy, especially so that we should not be so dependent on de Ropp, who may at any time come under the eye of the Gestapo and drop out of the picture’.

Gestapo attention made life very difficult for the Vienna station, which continued to operate after the Anschluss. The Passport Control Office, too, was overwhelmed with work issuing visas for Jews desperate to leave the country. The head of station and PCO, Tommy Kendrick, reported early in August 1938 that his staff were ‘so overwrought that they will burst into tears at the slightest provocation’. He apologised to Sinclair that his SIS reports were ‘somewhat scrappy and badly collated’ because of the pressure of Passport Control work. Meanwhile a number of Kendrick’s agents were picked up by the Gestapo, who arrested Kendrick himself on 17 August when he was actually on his way to England for a holiday. He was interrogated for three days before being released and ordered to leave the country, after which all intelligence work ceased. As soon as he had been arrested, an assistant and two female secretaries, ‘who did all the secret work, were packed off to London’ and Kenneth Benton, who had been working in the station for almost a year, ‘burned everything secret’. As the office had no official protection (although attached to a consulate-general the Passport Control staff did not have diplomatic status), Benton ‘was afraid that the Gestapo might just come in and search the whole office, so everything that could be burned was destroyed’.17 This was just as well, and on 19 August Menzies reassured the Foreign Office (who were naturally worried about the possible diplomatic fall-out) that there was ‘not the slightest likelihood of any compromising material being found in the shape of documentary evidence’.

Like Vienna, the Passport Control Office in Berlin was swamped by applications from Jews trying to escape the Reich. Frank Foley’s significant work in helping many thousands of Jews to get British visas was carried out as part of his duties as Passport Control Officer rather than as SIS head of station.18 Foley had a particularly difficult balance to strike between his differing responsibilities. He had developed ‘a long standing and officially established liaison’ with the German police ‘for the exchange of information about Communism’. This had survived the establishment of the Nazi regime. In October 1937 Foley’s relations with the Gestapo’s ‘Communist expert’ were described as ‘cordial’. By this stage, however, his refusal (on Sinclair’s express orders) ‘to satisfy the Gestapo lust for information on the subject of anti-Nazi Germans in England on the false grounds that they are Communists’ had alienated other senior Gestapo officials. Unfortunately, there are practically no relevant surviving SIS files, which might have thrown light on the inevitable trade-off which Foley had to make between his Passport Control and intelligence duties, let alone any covert methods by which he may have assisted individual Jewish families, or the possible intelligence he might have obtained from them. What we do know is that he was an extremely effective and articulate PCO, deeply sympathetic to and reporting with great clarity and force on the position of the Jews who were trying to leave Germany (and overloading his office in the process).

Foley, like other Passport Control staff, got caught up in SIS’s campaign to get them diplomatic status, so much so that in March 1939 Sinclair was prepared to dissemble on his part. After the ambassador in Berlin, Sir Nevile Henderson, refused to allow this, Sinclair hoped that he might change his mind if he was ‘given a guarantee’ that Foley was ‘not engaged in S.I.S. activity’. Sinclair therefore proposed to assure both the Foreign Office and the ambassador that this was the case on the rather specious grounds that Foley was ‘not employing German nationals’ and was ‘only obtaining political information through British nationals’ which was ‘no more than the Embassy itself ’ was doing.19 In fact Foley had certainly in the past employed ‘German nationals’ for espionage purposes, and, if not precisely so doing at the time of Sinclair’s signal, he certainly had assistants for whom Germans worked.

The impact of SIS intelligence and the use to which it was put by the government are difficult to assess as very few SIS reports, let alone commentary on them, have survived in either closed or open archives. Much of the most secret material was routinely destroyed after it had been read (and potentially summarised in other briefing papers). There are sporadic references to ‘secret intelligence’, but they are sometimes so general as to prevent any assessment of SIS’s specific part (if any) in its production.

In September 1938, for example, Sir Alexander Cadogan, Permanent Under-Secretary at the Foreign Office, returned from holiday to find that Gladwyn Jebb had left him a ‘stack of telegrams & papers, which I started reading. There’s certainly enough in the Secret Reports to make one’s hair stand on end. But I never swallow all these things, and I am presented with a selection.20 Since Jebb, as Cadogan’s private secretary, was the link-man between the Foreign Office and SIS, it is highly probable that among that ‘stack of telegrams & papers’ was SIS-generated material. But how much of it there was and what effect it had, beyond Cadogan’s scepticism, is impossible to judge. That SIS reports reached the highest levels, however, is demonstrated by the fortunate survival of one such report, written by Woollcombe, and retained by him, apparently for understandable, if rather touching, emotions of pride. His paper reviewed the political campaign in Germany for the return of overseas colonies lost under the Versailles treaty, and noted that ‘one large compact area’, probably in West Africa, was thought to be the most desirable objective. In the margin, in Neville Chamberlain’s handwriting, indicating his agreement with Woollcombe’s assessment, is ‘What did I say.’21

From Munich to war

The need for good intelligence on high-level German policy-making was amply demonstrated during the Munich Crisis in the autumn of 1938 when it seemed as if war might break out in the face of Hitler’s territorial ambitions in Central Europe. After Germany and Austria had been united in the Anschluss of March 1938, Hitler turned his attention to Czechoslovakia. A quarter of the country’s twelve million population were ethnic Germans, concentrated in the Sudetenland in the west, along the borders of the now enlarged Germany. Nazi policy was to unite these Germans into the Fatherland, which would effectively destroy the Czechoslovak state. In May there was a ‘war scare’, and the British government issued a warning against a German attack. ‘There is no doubt whatever in my mind’, Sinclair told Sir Warren Fisher on 27 May, ‘that the Germans intended to try and slip in to Czechoslovakia during the last weekend, but owing to our having found out what they were up to, such an uproar arose that they have now put off their scheme for the present.’ But he added that their plan was ‘all ready, and on the order “Go” it will be carried out if and when Hitler decides to do so’.22 On 18 July an SIS memorandum for the Committee of Imperial Defence (CID) argued that it was ‘impossible to predict with absolute certainty what course the Germans will pursue towards Czechoslovakia, because decisions rest with one man, Hitler, who is to a large extent incalculable, even to his intimates’. Nevertheless, ‘matters have many appearances of working up to a crisis, with August and September as the probable danger periods’. How right they were.

On 12 September 1938 Sinclair sent Colonel Hastings ‘Pug’ Ismay, the CID secretary, a ‘summary of certain naval indications’ which showed ‘that Germany is preparing for world-wide war’. Moreover, ‘in the absence of definite signs that these preparations are being suspended or abandoned, the conclusion can only be formed that Hitler intends to attack Czechoslovakia on or about the dates we originally stated, viz: September 24th-28th, and is prepared to support such action by world-wide war if necessary’. For the Czechoslovaks the position was desperate, though not yet perhaps hopeless. While neither of its allies, France and the Soviet Union, was in fact prepared to go to war on its behalf, the British government under Neville Chamberlain seized the diplomatic initiative in an effort to find a peaceful solution to the crisis. Beyond the understandable desire simply to avoid war, the British were also anxious to buy time. Well aware of German rearmament (although there is some evidence that both its progress and German - though not Hitler’s - resolve were slightly overestimated), there was a need to let British preparations reach a point where the country and its armed forces were better prepared to fight a war if necessary. On 15 and 22 September, Chamberlain famously flew to Germany to negotiate personally with Hitler, and over these crucial days there were intense discussions in London as to what line Britain should take. It was a difficult choice: should Britain firmly back the Czechoslovaks and risk immediate war with Germany, or should pressure be put on Prague to concede what many people regarded as Germany’s legitimate claims for the Sudetenland, but at grievous cost to the Czechoslovak state, accompanied by a perhaps cynical (or realpolitik) concession that force was the only relevant factor?

It is an indicator of how tricky these issues were, and how the government sought advice from all kinds of sources, that, unusually and apparently uniquely for the history of the Service so far, SIS was formally asked to submit a ‘policy paper’ in the week between Chamberlain’s two trips. Whatever advice Sinclair and his colleagues may have provided to government hitherto, it appears always to have been on an informal basis. SIS’s specific function was to supply secret intelligence, not policy advice, but in this instance, as Sinclair told Sir Warren Fisher on 19 September, the Foreign Office had ‘asked for our remarks . . . as to what course of action should be taken in Foreign Affairs in the present circumstances and with regard to the future’. The result was a paper by Woollcombe entitled ‘What should we do?’ Woollcombe began by reviewing ‘the aims of the Germans’, which constituted the ‘establishment of general “paramountcy” or “supremacy” in Europe’. This included the ‘absorption of at least the Sudeten areas of Czechoslovakia’, and the domination of the rest of the country, as well as ‘political and economic hegemony over the whole of Central and S.E. Europe, on the “Vassal State” principle’; the ‘recovery, sooner or later, of lost territory’ in the East; the ‘downfall of the Soviet regime’; and ‘penetration in the Middle East and the increasing of Britain’s difficulties there’. As to ‘German methods and principles’, ‘first and foremost’ was ‘force’, and the creation ‘of the strongest possible Armed Forces, sufficient to overcome any combination of Powers and emerge victorious in any conflagration’. Woollcombe added that ‘the [German] Armed Forces leaders do not consider that this stage is yet reached’.

What, then, was Britain to do? Woollcombe had three proposals for the ‘immediate or near future’. First was the ‘peaceful separation from Czechoslovakia, and joining to Germany, of the Sudeten German areas’. This would ‘forestall the inevitable’, he argued. Czechoslovak ‘security and unity’, moreover, could never be maintained in ‘any solution which leaves the Sudetens in the State’. Indeed, there was now an opportunity ‘to leave intact a State which would be literally Czechoslovak - a compact, homogeneous, neutralised State under international guarantee’. Second, Woollcombe recommended that Britain endeavour to secure an Anglo-Italian agreement in order to weaken ‘the Rome-Berlin axis’; and third, he urged a settlement in Palestine, perhaps by partitioning the territory, but ‘on lines which went an appreciable way’ towards meeting Arab demands. This was ‘vital if we are not to risk having the Arab world (to which Germany is devoting increasing attention) against us, let alone the necessity of diminishing our growing military etc. commitments in Palestine’. In the longer term, it was clear that Britain ‘should unremittingly build up our armaments . . . Platitudinous though it may be,’ he argued, ‘our only chance of preserving peace is to be ready for war on any scale, without relying too much on outside support,’ though the existing ‘defensive alliance’ with France should be maintained and consolidated. ‘Franco-British strength and absolute solidarity’; friendly relations with Italy and (if possible) Japan, as well as ‘smaller States earmarked as “Vassals” of Germany . . . injecting them with resisting power and courage’ would all help to ensure ‘that Germany’s “style is cramped”’. He also proposed that Britain should cultivate friendship with Germany ‘as far as we can, and without sacrifice of our principles and vital interests’.

‘It may be argued’, he concluded, ‘that this would be giving in to Germany, strengthening Hitler’s position and encouraging him to go to extremes.’ It was better, however, ‘that realities be faced and that wrongs, if they do exist, be righted, than leave it to Hitler to do the righting in his own way and time - particularly if, concurrently, we and the French unremittingly build up our strength and lessen Germany’s potentialities for making trouble’. Sinclair endorsed Woollcombe’s paper - the Foreign Office copy is marked ‘View of S.I.S.’23 (and it also echoed the views Menzies had expressed to his French counterparts the previous October) - but it is not clear how influential it may have been, though it evidently accorded with the majority view in government. Replying to Sinclair on 20 September, Warren Fisher thought it ‘a most excellent document’, which confirmed ‘in our own rearming the vital need for rapid & effective strengthening of our air position’. He also believed that it was ‘air that must “hold the ring” for us - at all events in the initial months. It is thro’ air that the Germans can get at us, & had we used the last few years effectively in that arm, the Germans wd not have been able to override us as they have this present year.’

Over the weekend of 17/18 September both the British Cabinet and the French agreed to allow the annexation of the Sudetenland in exchange for a guarantee of the new borders. But, when Chamberlain returned to Germany on 22 September, he found Hitler had raised his demands. Not only did he now want to occupy the Sudetenland immediately, but he also insisted that Polish and Hungarian claims for Czechoslovak territory be met. This was more than the Cabinet would allow and it was decided to support France if it backed Czechoslovakia. Still seeking to avert war, and with Italy’s involvement, Chamberlain agreed to a conference in Munich between Germany, Britain, France and Italy. Here, on 29 September, it was confirmed that neither France nor Britain was prepared to go to war with Germany on behalf of Czechoslovakia and the country’s fate was sealed in the Munich Agreement, which effectively met Hitler’s raised demands. This was not ‘peace at any price’. Even Chamberlain did not subscribe to that absurdity. But it was certainly peace at a higher price than the anti-appeasers would have paid. In October German troops occupied the Sudetenland.

During the crisis the SIS station in Prague had been reporting on Czechoslovak military opinion. In early 1938 Harold Gibson, head of station since February 1934, had been given permission by London to establish liaison with the head of Czechoslovak Military Intelligence, Colonel František Moravec. This was primarily to help Gibson acquire information on German targets, and was quickly very rewarding. In March 1938 Gibson reported that the Czechoslovaks had supplied information on German military movements in Austria ‘more detailed and exhaustive than anything I could have hoped to obtain through independent agents’. The liaison developed so well that in the midst of the Munich Crisis one of Gibson’s Czechoslovak military contacts, while bitterly critical of France and its betrayal of an ally, assured Gibson that, whatever the politicians may have decided, it would not interfere with ‘our collaboration’.

Following the German occupation of the Sudetenland, the survival of the rump of Czechoslovakia as an independent state became increasingly uncertain. When Gibson’s assistant, Wilfrid Hindle, posted to Prague in February 1938, asked in January 1939 if he could bring his family out to join him, Rex Howard in London unhelpfully replied: ‘I am afraid I cannot possibly tell you how long you will stay in Prague because one does not know from one day to the next what is going to happen in Europe.’ He recommended, nevertheless, that Hindle stay in rented furnished accommodation, and ‘you should on no account consider the question of getting your furniture out . . . In the present state of Europe’, he concluded, ‘it is difficult to give any guarantee of anything.’ By the early spring of 1939 it was clear, however, that the Germans were preparing to occupy the rest of Czechoslovakia. In his memoirs, Moravec claims that his well-placed agent in the German General Staff, ‘A.54’, Paul Thümmel, provided advance warning of the invasion, which was scheduled for 15 March. With Gibson’s help, Moravec and ten of his most senior officers were flown to London in an SIS-chartered plane on 14 March.24 No explicit trace of this dramatic operation survives in the SIS archives, although on 14 March Gibson requested London to grant him use of an emergency reserve of $1,000 and £200, and reported the same day that he had taken custody of Moravec’s ‘most important intelligence archives’ in his office. The Germans indeed entered Prague on 15 March, and over the next two weeks, with deft use of King’s Messengers and diplomatic bags, Gibson managed to get the Czechoslovak intelligence archive safely to London, from where Moravec and his colleagues were able to run operations during the Second World War. On 30 March, Gibson and the remaining SIS station staff left for London.

The Munich Crisis stimulated a brief flurry of SIS activity in the Mediterranean. Towards the end of September 1938, Captain Russell of the Naval Section noted that the Service might ‘be called upon at any time now to report the locations of Italian warships’ and a range of stations in Southern Europe were instructed to have ‘tip and run’ agents ready to deploy at short notice. The stations were authorised to spend up to £500 on this without referring back to London. On 28 September Hamilton Stokes in Gibraltar was told to ‘open up the Malta station immediately’. Steps were taken, but on 4 October, after the Munich Agreement had been signed, the work was scaled back ‘in view of the present improvement in the international situation’. Even by late 1938 there was no blank cheque for any large-scale expansion of SIS operations. Some decision-makers, apparently, believed with Chamberlain (as he famously declared on his return from Munich) that the agreement had indeed provided ‘peace for our time’.

After Munich SIS continued to report on Hitler and his ambitions, although in October 1938 Woollcombe admitted that the political work on Germany rested on a ‘very narrow basis’, with only two ‘solid’ sources: de Ropp (who by this stage was proving less reliable) and a high-status Baltic German with social connections across Europe, who was run from London by Dick Ellis and whom Woollcombe described as ‘first class’, though with ‘limitations’ as he could not be ‘a permanent agent for German information’. Based in Italy (where he was ‘our best agent’) and Switzerland, in 1938-9 he passed on material gathered from friends and relations in the German army, the Nazi Party and high industrial circles. On 8 November in a circular to European stations arising from his Section I’s ‘Crisis Stocktaking’, Woollcombe urged representatives ‘to find more first class alternatives for 12-land [German] “high policy” information ’. Recognising that ‘sources of this type, having real access to “the goods”, are few and far between’, he nevertheless wrote that it was ‘very desirable that we should be well informed regarding the leadership, strength, resources, methods, aims, real position and prospects, etc., of anti-Nazi movements, for without such information it is very difficult to judge how seriously they are to be taken or whether they contain any appreciable alternative regime potentialities’. He thought especially that (while this ‘must involve a lot of speculation’) ‘we should have lines on the military clique, or cliques, who would like to see a change of régime’.

In a wide-ranging review of ‘tendencies and reactions’ (‘prepared at the request of the Foreign Office’ and circulated in November 1938) SIS asserted that the Munich settlement had left Hitler ‘in a dissatisfied and spiteful frame of mind’, though it remained difficult to predict what he might do: ‘Not even Herr Hitler’s intimates, according to one of them, knew for certain if he would really risk a world war.’ It seemed clear, however, that in the immediate future Nazi attention would ‘to a large extent [be] occupied with the furtherance and consolidation of the Eastward trend’, as well as ‘atomisation’ (‘a process of creating small States on a racial and self-determination basis’), which SIS suggested contained ‘interesting possibilities for countries like Roumania and Poland’. While the Service did not report much anti-war feeling among the population in general, it did identify some opposition to war among the army chiefs, though for the most part only on the grounds of ‘Germany’s unreadiness to engage in a general war of long duration’.

In December Sinclair provided a further paper on ‘Germany: factors, aims, methods, etc’, which stressed Hitler’s ‘incalculability and lightning-like decisions’. ‘Among his characteristics are fanaticism, mysticism, ruthlessness, cunning, vanity, moods of exaltation and depression, fits of bitter and self-righteous resentment, and what can only be termed a streak of madness; but with it all there is great tenacity of purpose.’ The paper realistically played down the influence of internal opposition: ‘Notwithstanding divergencies, internal discontent and widespread unpopularity of the régime below the surface, Herr Hitler’s will is supreme. ’ Germany’s ambitions to dominate east-central Europe were stressed. The ‘general indications’ were ‘that Poland was “for it” sooner or later’. In a ‘summary of information from secret sources’, Gladwyn Jebb drew on this paper with a stern warning to his colleagues that, if ‘any references’ to the remarks of these secret sources leaked out, they would ‘be in grave danger of “liquidation” and what is more important, we shall be deprived of their information’. He included information which now suggested that Hitler might also be contemplating a westward strike. The ‘present air strength of Germany would enable her easily to “cover” London and Paris’, reported Jebb, ‘and no consideration would be paid to considerations of law and humanity. London, in particular, it was said, could be destroyed in a couple of days by unceasing bombing attacks.’25

During the spring of 1939 there were concerns about the information on the German armed forces which SIS was able to provide. In March Rex Howard worried about the inability of stations at short notice to send agents into Germany to report on specific aerodromes. Just days before the outbreak of the Second World War, Dick Ellis reported a rather unconvincing series of steps taken by the Service to warn of an impending German attack. The highly regarded ‘22124/X’ had ‘arranged with his brother in the VDA [Volksbund für Deutschtum im Ausland - Society for Germanism Abroad] to let him know by telegram in Rome if war is certain’. A female agent, whose daughter was ‘in daily touch with the Ribbentrops’ (Joachim von Ribbentrop was the German Foreign Minister), had ‘promised to do everything to warn us by telegram’. Another agent had been sent to Wilhelmshaven ‘to warn us about sailings of warships and indications of impending air-raids’. He had ‘made his own arrangements to get into Holland or Belgium’, from where he would ‘wire or telephone’. An agent in Basel, Switzerland, was to telephone ‘if he hears from Swiss-Air (in close touch with Lufthansa) of an impending air-attack’. While this was not, perhaps, very encouraging, there was slightly more hope of identifying key German ship movements at the outbreak of war. In April 1939 Captain Russell reassured Commander Frank Slocum (G.3) that he was ‘well served’ regarding information from German North Sea ports, ‘except that after the frontier is closed we shall probably not get it out in time unless agents have W/T’. In fact, an ‘instructional’ wireless set had already been sent out to The Hague station for one of its German-based agents and SIS’s Communications Section VIII was prepared to provide more equipment when agents had been trained and ‘if C.S.S. gives approval’.

A month before the outbreak of war Menzies wisely suggested that the stations in Copenhagen, The Hague and Brussels ought ‘to consider the possibility of their countries being overrun’, in which case ‘it would be of paramount importance for them to leave behind reliable sources’. Wireless sets, he said, would also need to be provided. Evidently concerned that planning for any kind of ‘stay-behind’ organisation might appear defeatist, Menzies wanted it emphasised to the representatives that ‘they must avoid in any way alarming persons whom they approach, and they should make it clear that we consider that if the situation envisaged occurred, it would only be for a short time as we are absolutely confident of complete victory in the end’.

Following the German occupation of the remainder of Czechoslovakia in March 1939, attention began to focus on the growing threat to Poland, where Germany had particularly begun to target the Free City of Danzig on the Baltic and the Polish Corridor granted to Poland under the Treaty of Versailles which isolated the German territory of East Prussia. In March the Cabinet decided that a public statement should be made to indicate ‘our intention to support Poland’. In May the Foreign Office asked the Berlin and Rome embassies to spread the message informally that if Germany invaded Poland both Britain and France would come to its aid. Since a copy of this telegram was sent to Sinclair, it may be assumed that SIS was also to participate in the campaign. On 7 July a bogus Cabinet decision stating that any armed clash between Germany and Poland over Danzig would be regarded by Britain as a casus belli was prepared for SIS to communicate to the Germans.26 A week later SIS circulated a paper on ‘Germany and Poland’ which said that Hitler was determined to solve the ‘Danzig question’ during the autumn, with the danger period coming in late August/early September: ‘We are sceptical as regards “dates” for action’, but it seemed likely that whenever Hitler acted it would be ‘a lightning decision within 24 hours of the event’. The paper argued that a lot depended on how seriously Hitler took Anglo-French, and particularly British, determination to honour pledges to Poland. At the moment he still needed to be convinced ‘that we meant business and were not bluffing’. SIS also reported that it had ‘nothing to show that any political conversations are taking place between Berlin and Moscow’ and that the idea of an agreement between Hitler and Stalin was ‘very hypothetical’. Thus SIS was quite sensible about Germany’s intentions towards Poland, though its observation that Hitler ‘certainly wants to avoid a major war if possible’, while literally true (he would have been delighted to secure his objectives without war), could provoke over-optimism about any desire for ‘peace’ he might have.

Like so many others, Broadway was dumbfounded by the Nazi-Soviet non-aggression pact of August 1939. In fact, an SIS agent, code-named the ‘Baron’, with good contacts among the Junkers of East Prussia and run by Harry Carr from Helsinki, had first reported secret German- Soviet negotiations in the spring of 1939. A further report in June that the talks were making good progress was greeted with incredulity in London, where the desk officer concerned refused even to circulate it to the Foreign Office as he could not understand how the Baron could have had access to such extremely secret matters without high-level contacts in the German Foreign Office. Carr discovered afterwards (and too late) that his agent had got the information from close friends in East Prussia who themselves had been visited by officials involved in the negotiations and had talked freely among such trusted company. The June report arrived just as Sir William Strang of the Foreign Office was visiting Moscow in a last-ditch effort to secure an Anglo-Soviet agreement. Head Office naively commented to Carr that it could not be correct for Molotov (the Soviet Foreign Minister) to have said to Strang the day before ‘the exact opposite of statements in the report from your source’. But such was the case, and the Nazi-Soviet Pact paved the way for both Germany and the Soviet Union to invade, and occupy, Poland. The Pact was announced on 22 August. That evening John Darwin of Section VIII wrote in his diary: ‘Russo-German pact! Everything very alarming . . . C.S.S. on warpath in view of possibility that we have been accused of letting F.O. down. The usual chase after a scapegoat that can’t defend itself. I think this one can.’ The implications were obvious and the following day Darwin sent his wife Sibyl a postcard from the Travellers Club in London. ‘I don’t want to seem alarmist,’ he wrote, ‘but I really think that the Germans will invade Poland this weekend or early next week,’ a prediction that was out by only a day or two. 27

Creative improvisation

The 1930s saw a considerable expansion in SIS activities, especially as the international situation worsened during the second half of the decade. One important development in 1931 was the creation of an Industrial Intelligence Centre (IIC), headed by Major Desmond Morton and drawing on the expertise he had developed in SIS’s Economic Section VI, which had itself been created some time in 1926-7.28 The Centre began as a ‘secret nucleus’, and stayed embedded within the Service until 1934. It had a wide sphere of interest, though the principal focus was on industrial capacity for war. One definition of industrial intelligence was ‘any information regarding the industrial development of a country which may throw light upon the extent of its potential armed forces effort or plans’.29 Morton made quite a success of it, but its expanding activities began to eat into SIS’s own scarce resources. In May 1932 Sinclair complained to Sir Edward Crowe at the Department of Overseas Trade that the centre had cost almost £3,000 over the last year, at a time when SIS funds were ‘already strained to breaking point’ owing to the fall in the international value of sterling. Hankey was not very sympathetic to Sinclair, and evidently valued the work of Morton’s new outfit. He thought SIS ‘ought to fit it in somehow, if necessary by letting something else go’.30

Morton’s development of industrial intelligence inevitably brought him into contact with commercial firms. One such was the majority state-owned Anglo-Persian Oil Company (forerunner of British Petroleum). In July 1931 Vivian had suggested to Morton that Anglo-Persian, with its global reach, might be a valuable source of information, especially about non-British oil concerns. Colonel H. E. Medlicott, head of Anglo-Persian’s Security Branch, agreed in principle that the company might co-operate with Morton, but told Vivian that it would be much easier if ‘this was divorced from [the] great secrecy of Secret Service’. Even while it remained part of SIS, Morton’s Centre had a very fruitful relationship with Anglo-Persian, over the next three years producing a stream of reports (mostly on Soviet Russia and Germany), which were circulated through a sub-committee of the Committee of Imperial Defence. Under Morton the IIC developed a distinctive and autonomous existence which led Sinclair in October 1934 to separate it from SIS. Morton ceased to be a member of the Service and Major Humphrey Plowden took over as head of Section VI. The IIC became a customer of SIS, and Sinclair laid down that Plowden was ‘to work with the I.I.C. along the same lines as other circulating sections work with the government departments which they serve’.

Although the Passport Control cover which SIS representatives enjoyed between the wars had considerable practical benefits, especially in terms of funding, by the early 1930s it was beginning to become threadbare in places. Perhaps surprisingly, Sinclair seems not to have been very concerned about this. Responding in March 1934 to a complaint from the Director of Naval Intelligence about the nature of Steptoe’s real duties in China being ‘so widely known’, Sinclair blandly remarked that he did not think ‘this really matters very much, as the activities of our Passport Control Officers all over the world are perfectly well known’. A concern for deniability, nevertheless, seems to have been part of the motivation in the expansion of United Kingdom-based agents, of whom there was a gradual increase during the 1930s, and also the creation of the Z Organisation in 1936. This was an agent-running department for obtaining intelligence on Germany and Italy set up by Sinclair under the able but extremely acerbic Claude Dansey. Dansey, who had worked for Mansfield Cumming between 1917 and 1919, had rejoined the Service to be head of the Rome station in April 1931, where he remained until March 1936. Sinclair’s idea with the Z Organisation was to keep it entirely separate from the existing SIS structure, hoping that in the event of war it might have more chance of operating successfully than any of the existing networks.

Dansey set up his headquarters in Bush House, on the Aldwych, with business cover as the Export Department of Geoffrey Duveen & Co. One of his first officers, Lieutenant Commander Kenneth Cohen, a retired naval officer who had specialised in torpedo duties (when he may have come to Sinclair’s notice), was a Staff College graduate and spoke good Russian, French and German. In 1937 he was ‘interviewed anonymously by arrangement in my car on The Mall’, by a ‘Mr Mansfield’, who turned out to be Dansey. Cohen afterwards described Dansey as ‘a “copybook” secret service man. Dapper, establishment, Boodles [Club], poker-playing expression, bitterly cynical, but with unlimited and illogical charm available, particularly for women’.31 The organisation operated entirely under business cover and Dansey exploited his and Sinclair’s contacts in the business and commercial world to infiltrate and/or enlist people to work for them. Although the idea of a new, and more secure, wing of the Service was, perhaps, sound, the execution of the scheme left something to be desired. Recruitment appears to have been done just as haphazardly as for SIS in general, and training was rudimentary. One officer was engaged straight from Cambridge University, given a short briefing on military requirements and sent to Vienna, ostensibly working for a film company but actually to report on German order of battle and other armed service targets. With no instructions on how to carry out this work and no background to help him with his cover, he simply toured Germany ‘sending back what he noticed, on his travels, of German Army identifications, aircraft, radar and other equipment’.

Claude Dansey, head of station in Rome

(1931-6), who later led the ‘Z Organisation’

and was Assistant Chief of SIS during the

Second World War.

Cohen recalled that not much was produced. ‘We beavered away with various characters - mostly disreputable or impecunious - who had (or professed to have) some pretext for visiting Nazi Germany or Fascist Italy. They brought back little more than low level identifications of troops and planes.’ One ‘agent’, who never left England, managed to send back coded postcards through an associate in Germany, before being unmasked by Dansey. Cohen himself met a couple of higher-level agents, one with contacts to Dr Schacht, ‘Germany’s “financial wizard”’, and another German navy anti-Nazi whom Cohen had to contact in Switzerland.32 Z Organisation also developed a naval reporting system, using British merchant navy captains on ships sailing to German and Italian ports. Briefed on specific requirements, they were provided with cameras and debriefed by a Z Organisation representative.

The 22000 Organisation was similar to Z Organisation but operated within the main SIS establishment. It started in early 1938 with two officers, the senior being Dick Ellis, and, as with Z, its primary tasks were the penetration of Germany and Italy. Agents were recruited mostly from the business, journalistic and academic world. Over the short period before the war broke out, it does not seem to have made a very great intelligence contribution. One postwar review claimed that ‘22000 agents produced economic intelligence on the Rhineland and Ruhr, and a certain amount of information on German Order of Battle.’ A relative of the Italian Foreign Minister, Count Ciano, was considered by the Foreign Office to be ‘a valuable political source’. Sinclair sent Ellis and others abroad on particular missions, including one SIS officer as a tourist to Taranto to report on the harbour’s defences. One of Ellis’s contacts (with whom Desmond Morton also had dealings) was a wealthy Canadian businessman in his forties, William Stephenson, who had a distinguished First World War record as a fighter pilot. In the mid-1930s, Stephenson, who later played a very significant role in SIS as head of the British Security Co-ordination in New York during the Second World War, had created his own private clandestine industrial intelligence organisation, the services of which he offered to the British government. Put into contact with SIS (which was initially not very enthusiastic), Stephenson meanwhile set up in Stockholm the International Mining Trust (IMT), ‘under cover of which he aimed to develop contacts into Germany and elsewhere to provide industrial and other intelligence’. Closer links were established after Ellis began developing the 22000 network, and up to the outbreak of the war the IMT proved quite useful in providing information on German armament potential. Ellis afterwards served for a time as Stephenson’s SIS deputy in New York.33

In the mid-1930s a branch (Section X) was set up to tap telephone lines of embassies in London. Much of this was done in close co-operation with MI5. By 1938 the work had expanded so much that a P (or Press) Section was established to distribute the product. Sinclair and Vansittart at the Foreign Office worried about telephone security at British missions abroad and the Service was given responsibility for checking this. But with only one General Post Office telephone specialist available ‘and with the general apathy and ignorance that appears to have prevailed abroad, nothing much was achieved’. Section X, nevertheless, successfully listened in to conversations to and from, and within, a large number of foreign embassies. These are variously said to have included, prior to the outbreak of war, those of Germany, Spain, Italy, Japan and the USSR. This produced quite a large volume of political, economic and military information. Conversations, for example, between the German military attachés in London and Berlin appear to have been particularly revealing, and included ‘details of a reconnaissance that the former was to carry out of possible landing beaches along the South and West coasts of Ireland’.

During 1937 Sinclair, ‘convinced of the inevitability of war’, also initiated expansion plans for the Government Code and Cypher School (GC&CS). He instructed the School’s operational head, Commander Alastair Denniston, to identify ‘the right type of recruit’ to reinforce GC&CS ‘immediately on the outbreak of war’. Having secured Treasury sanction for ‘56 seniors, men or women’ and ‘30 girls’ with graduate-level knowledge of at least two relevant languages, Denniston discreetly combed British universities and mobilised his network of contacts for potential recruits. A series of courses were arranged for candidates to give them ‘even a dim idea of what would be required of them’. As a result, GC&CS was crucially able to expand rapidly in the summer of 1939 to meet wartime signals intelligence demands. Though focusing more on universities, GC&CS’s recruitment process was as informal and personalised as that for SIS as a whole. Frank Adcock, Professor of Ancient History at Cambridge, who had worked in the Admiralty’s Room 40 during the First World War, was particularly assiduous on Denniston’s behalf. One Cambridge colleague, an Italian specialist, recalled being invited to dinner by Adcock and under conditions of great secrecy being offered ‘a post in an organisation working under the Foreign Office, but which was so secret that he couldn’t tell me anything about it’.34

In April 1938 Sinclair recruited a former soldier, Captain Richard Gambier-Parry, from the telecommunications firm Philco Limited, to create SIS’s Communication Section VIII. Gambier-Parry claimed that he was given the following oral instructions by Sinclair: ‘I get a great deal of valuable information. They drive it round Europe in a “Carrozza” [a coach or carriage] before it reaches me. Your business here will be to do something about it - Good morning.’ Section VIII’s most difficult task was the provision of wireless sets for agents. Nothing suitable was available commercially, so Gambier-Parry established a small workshop and laboratory at Barnes in west London to research and develop secure portable sets. In October 1938 Head Office recognised that providing agents with wireless sets raised difficult issues about the trustworthiness of the individual, whether he was sufficiently ‘intelligent’ and ‘could be taught Morse [code]’, and how the sets would be concealed. The representative in Athens reflected the cautious line taken by several stations. For an agent to be caught with a wireless set, ‘and the better the disguise, the more compromising’, would be ‘equivalent to a death warrant’. Apart from those rare individuals ‘actuated by idealistic motives’, he could not see ‘many candidates coming forward’. After Gambier-Parry had sent a prototype set to Stevens at The Hague in March 1939, Head Office decided that risks now had to be taken with providing sets for agents operating in German ports, especially ones capable of reporting the departure of commerce raiders, since the ‘early interception of these vessels will depend on timely warning of their departure’. Commander Russell of the Naval Section dismissed the argument that being caught with a wireless set meant an automatic death penalty as ‘they already face the death penalty and I fail to see any reason why the information they obtain should deteriorate in war’. Since the Service failed to recruit any successful agents to report from German ports, however, this debate remained purely theoretical.

Wireless equipment for SIS stations abroad was technically less problematic but normally needed the permission of the local British minister, which was not always forthcoming. Nevertheless, good progress was made by September 1939. The first station wireless to prove its worth was that at Prague during the 1938 Czech crisis when it was the only effective means of communication, for both SIS and the Foreign Office, between Prague and London. In August-September 1939 an SIS wireless became the only link through which London received news of the rapidly changing situation until the final collapse of Poland.

Early in 1939 a main SIS communications facility, with a full twenty-four-hour service, some four transmitters and six receiving positions, was set up at the Service’s new ‘war station’, Bletchley Park, a small country house and estate in Buckinghamshire some fifty miles north-west of London. Based on the widely held fears that any war would begin with massive enemy air attacks, contingency plans were made throughout government to relocate office functions in an emergency out of the centre of London. Sinclair bought the property on 9 June 1938 for £6,000 (£275,000 in modern values). This was clearly done on his own initiative, and there is a Service tradition that he paid for it out of his own pocket. Whether this is true is less certain. The relevant property transaction documents show him personally as the sole owner, and after he died in November 1939, apart from legacies of £3,500 to each of his two sons, his sister Evelyn inherited the remainder of his property, with a total value of £21,391. In April 1940 Evelyn (as personal representative of ‘Sir Hugh Sinclair deceased’) transferred Bletchley Park to William Ridley and Percy Stanley Sykes (the Service’s Finance Officer) for ten shillings (fifty pence). In their turn, on 3 March 1947, Ridley and Sykes transferred the property to the Ministry of Works, again for ten shillings, all of which strongly suggests that the original purchase money had come from public, if not also SIS, funds.35 The initial purchase price was in any case only the start. In November 1938 Sinclair noted that the cost of installing telephone and teleprinter lines to Bletchley Park was likely to cost ‘several thousand Pounds’. During the Munich Crisis, partly as a precautionary measure and partly as a mobilisation exercise, Sinclair sent the Government Code and Cypher School and Head Office staff to Bletchley. He claimed afterwards to Sir Warren Fisher that it was ‘the only War Station that functioned correctly during the crisis’. After the crisis most of the staff returned to London, but in August 1939 the code-breakers returned. Bletchley Park became their headquarters and the site of their great wartime triumphs.36

Also in the first half of 1938 Sinclair decided to set up an organisation ‘to plan, prepare and, when necessary, carry out sabotage and other clandestine operations, as opposed to the gathering of intelligence’.37 This was Section IX or D (allegedly for ‘Destruction’) Section. A Royal Engineer, Major Laurence Grand, was seconded to be its head. While he had no experience of intelligence work, he was described as ‘a man of energy and ideas, to whose personal force tribute is paid by all who worked with him’. Grand wrote his own, wide-ranging brief, a ‘preliminary survey of possibilities of sabotage’ dated 31 May 1938. This consisted mainly of sabotage targets in Germany, including the electrical supply system, telephone communications, railways, ‘adulteration of food supplies’ and ‘Agriculture, by the introduction of pests to crops or diseases to animals’. There was also a category entitled ‘moral sabotage, by means of rumours, remarks causing dissatisfaction with the Nazi Party’. For this, Grand thought all that was required was ‘one man in every town with an automatic telephone exchange’, and suggested that, ‘as the activities of this branch will only be verbal, the Jews might be persuaded to produce an organisation in peace time which will be available for this work in war’. Sinclair accepted the scheme, warning him to exercise extreme caution to avoid diplomatic incidents and to concentrate in the first instance on cutting supplies to Germany of Swedish iron ore and Romanian oil. Menzies explained SIS’s thinking on this matter to French opposite numbers in February 1939. He was, he said, convinced of the need to use both propaganda and terrorism against Germany and Italy, just as they were planning to do against France and England. He admitted that there was currently no effective English propaganda in Germany, but that there were plans to distribute twenty thousand anti-Nazi ‘tracts’ in envelopes mailed in Germany and also to develop a German-language radio service to broadcast truthful news bulletins specially chosen to influence German public opinion. As to sabotage, SIS had been studying the subject for more than a year and Menzies believed that, in time of conflict, ‘acts of terrorism’ would ‘crystallise’ opposition to the Nazi regime and profoundly disrupt military and economic life in Germany. Potential targets (such as factories and communications) had already been identified, as had the personnel to mount attacks (for example Communists and anarchists).38

SIS’s concern with enemy special operations led them to consider possible biological

attacks on the United Kingdom. Illustrating more innocent days, this paper reveals

that in 1939 even the Prime Minister got a doorstep milk delivery.

SIS’s consideration of offensive sabotage operations clearly also informed thinking about the defensive side. In July 1938 Sinclair sent Ismay ‘Scheme D’, some notes prepared by Section IX ‘on the protection against sabotage of power stations and H/T [high-tension] transmission lines’. The following August he sent him a paper on bacteriological warfare, which reflected further work in Grand’s section. The ‘possibilities of this form of warfare’, it asserted, ‘may have been under-rated, especially the destruction of our flocks by anthrax or foot and mouth disease, also the contamination of our water and milk supply’. Various scenarios were raised: ‘Can, say, one hundred Nazi agents supplied with bacteriological material and operating in the London Underground Railways during the rush hours, start a serious epidemic in London?’ Reflecting a more innocent age, when even the prime minister had a conventional, daily doorstep milk delivery, the memorandum asked: ‘Is the Prime Minister’s (or any other persons’ of national importance) milk boiled before use? (Milk bottles on doorsteps can be tampered with.)’

By 1939 Section IX had established a presence at Bletchley to develop sabotage material, including incendiaries, plastic explosives and fuses. Among the various sabotage plans against German targets were the destruction of lock gates on the Kiel Canal and the ‘possibility of placing mustard gas on the seats of the [Berlin] Opera House before a major Nazi rally’. Over the summer of 1939 British yachtsmen were sent to reconnoitre beaches for clandestine landings from Trondheim to the Franco-Belgian frontier. D Section’s activities abroad, especially contacting and briefing foreign nationals, were sometimes done with scant reference to security, and alarmed a number of British diplomatic missions. There was also a potential overlap between it and the War Office Section GSR (later to become MIR, Military Intelligence Research), which had been created essentially for the same purpose. Both organisations, for example, were planning the sabotage of the Romanian oil route up the Danube. Grand was also keen on propaganda, ‘but here again enthusiasm seems to have run away with discretion’ and there was overlap with the government’s ‘official’ covert propaganda organ, the Enemy Publicity Section at Electra House on the Victoria Embankment.

SIS played an important part in the development of clandestine air photography. Towards the end of 1938 Winterbotham’s Section II set up an Air Photographic Unit. This was an Anglo-French joint SIS-Deuxième Bureau venture with business cover as the Aeronautical Research and Sales Corporation. An American Lockheed plane was purchased by the French, and SIS engaged an Australian pilot, Sidney Cotton. Cotton and his team developed cutting-edge photographic techniques for air reconnaissance which provided better results than ever before. By the end of 1938 clandestine photographs were being taken of Italian bases and airfields. The Air Ministry paid for a second Lockheed and assistance was given by the RAF Experimental Establishment at Farnborough. Cotton proceeded round Europe, flying at very high altitudes over Germany and Italy, photographing large numbers of airfields and other military intelligence targets. Indeed, so successful was he that by mid-1939 there was a bottleneck in the production of this material through a shortage of trained photographic interpreters. Shortly after the outbreak of war Cotton’s organisation was taken over by the Air Ministry, but SIS could claim with some justification to have been the initiator of modern high-altitude, high-speed photo-reconnaissance.39

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