House of Spies E-Book

Peter Matthews

• Herausgeber: The History Press
• Kategorie: Geisteswissenschaft
• Sprache: Englisch

Veröffentlichungsjahr: 2016

Beschreibung

St Ermin's Hotel has been at the centre of British intelligence since the 1930s, when it was known to MI6 as 'The Works Canteen'. Intelligence officers such as Ian Fleming and Noel Coward were to be found in the hotel's Caxton Bar, along with other less well-known names. Winston Churchill allegedly conceived the idea of the Special Operations Executive there over a glass (or two) of his favourite champagne in the early days of the Second World War, and the operation was started up in three gloomy rooms on the hotel's second floor, with the traitorous Cambridge Spies among its founders. When Stalin's Russia turned to a peacetime enemy in the Cold War that followed, Kim Philby and Guy Burgess handed over intelligence to their Russian counterparts in the dark corners of the hotel, while MI6 man George Blake operated as a Soviet double agent just across the road in Artillery Mansions. Meanwhile, St Ermin's proximity to government offices ensured its continued use by both domestic and foreign secret agents. In this first book on St Ermin's, Peter Matthews, a witness to the intelligence battle for supremacy between MI5, MI6 and the KGB, explores this remarkable true history that is more riveting than any spy novel.

Leseprobe

To St Ermin’s Hotel and its people and my memories there of times past

First published in 2016

The History Press The Mill, Brimscombe Port Stroud, Gloucestershire, GL5 2QGwww.thehistorypress.co.uk

This ebook edition first published in 2016

All rights reserved © Peter Matthews, 2016

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This ebook is copyright material and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the author’s and publisher’s rights, and those responsible may be liable in law accordingly.

EPUB 978 0 7509 8034 0

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CONTENTS

Author’s Note

Foreword by Mark Birdsall

Acknowledgements

Preface

1 The First World War

2 The Interwar Years

3 The War’s Beginning

4 D-Day

5 The Cold War

6 Berlin

7 London Spies

8 Conclusion

Bibliography

Places of Interest

AUTHOR’S NOTE

The world of espionage is complex and so are the organisations that deal in it, therefore I have tried to simplify it a bit for the reader. The Soviet security organisation has gone through a number of transformations before it settled down into the format of KGB (Committee of State Security), which everyone seems to know. I have largely ignored the various transformations that it has gone through and stuck with the initials with which most people are familiar. I have taken the same view with MI6, which has not been its title since the 1950s. It is now the Secret Intelligence Service (SIS), but that is not the old familiar label that everyone knows so I have stuck with MI6 for at least most of the book, with an occasional reference to the service.

Peter Matthews 2016

FOREWORD

by Mark Birdsall

There are hundreds of buildings in London inextricably linked to monumental moments in the world of espionage and intelligence, perhaps none more so than St Ermin’s Hotel. A perusal of documents linked to this aspect of the hotel hardly begins to touch upon the meetings and decisions made within its rooms that impacted so many people and changed history.

London is quite rightly known as the ‘spy capital’ of the world. Some of the oldest intelligence services were formed here and for centuries the greatest spies and their catchers played ‘cat and mouse’ on its city streets. Its reputation and links to intelligence go much deeper. One could argue that today’s international intelligence services owe much to the pioneers often working from tiny offices, who a little over a century ago created services that would evolve into what we now know as MI5 (Security Service), MI6 (Secret Intelligence Service) and GCHQ (Government Communications Headquarters).

Every century brings new challenges for people who work in the shadows. For those London-based operators charged with intelligence collection and security at the outbreak of the First World War in 1914, managing and developing a dedicated spy service was truly a daunting task. The names of Cumming, Kell, Knight and Hall instantly spring to mind, but there were so many others, including ministers tasked with raising suitable finances. Thankfully the ‘seeds’ of what was initially known as the Secret Service Bureau had been sown in 1909, thus when war did break out Britain had a hidden advantage.

It quickly became evident that defeat of Germany and the Kaiser would require implementation of both old and new intelligence techniques, including deception operations and ruses. The organisation and operation necessary became a complex affair. And whilst London planners successfully planted spies in Europe and elsewhere, it was evident they would need to counter tactics launched by Berlin. To compound matters further, propaganda became an integral ‘ingredient’ in the great game. Henceforth what emerged was an array of services and operations often linked to civilian concerns such as newspapers, broadcasters, film studios and even entertainers who could travel and report back observations. Many of these communications were written in code or secret inks, requiring the services of brilliant academics and analysts. And, of course, locations were required to plan, discuss, support and, yes, wine and dine the spies who were helping Great Britain in the Great War. Enter St Ermin’s Hotel – close to Parliament and other places of importance, it was ideal for conducting business and taking moments to relax.

Britain and her allies defeated Germany but just two decades later the flames of war would consume Europe and other regions of the world again. However, this time the intelligence services of Britain would face a much tougher opponent and an equally cunning Abwehr (German Intelligence) headed by Admiral Canaris. In London, Churchill soon recognised MI6 had but a scant network of agents on the Continent to fight what was going to be a very dirty war. Thus he gathered a number of trusted associates and soon the emergence of a pseudo-military intelligence organisation emerged – the Special Operations Executive (SOE). MI6 hierarchy were not happy but the men and women of the SOE charged with ‘setting Europe ablaze’ soon proved their worth. To compound matters, the intelligence directorate and offices of the SOE were based in St Ermin’s Hotel – just opposite a suite of rooms occupied by MI6 planners! Obviously many other buildings in London and beyond were used by British Intelligence and the SOE, but the hotel became a hub of divergent intelligence activity. As this uneasy truce continued, at least MI6 and the SOE forged ahead with developing their tradecraft, and the creative wings of both organisations produced an array of gadgets, bombs, maps, containers, secret cameras, etc … Then the Americans arrived in London and soon its version of the SOE, the Office of Strategic Services (OSS), began occupying various buildings. It was also during this haunting period that a number of guests and visitors to St Ermin’s began their careers in the Foreign Office and intelligence. Some of these characters have been quite rightly described as ‘infamous’. Several were already in the pay of spymasters in faraway Moscow.

In 1945, as the war theatres of Europe and the Far East fell silent, there was optimism around the world that a lasting peace would lead to a greater understanding between peoples. Not a chance. Russia refused to pull back its troops and half of Europe was consumed behind what Churchill dubbed an ‘Iron Curtain’ in 1946. The Cold War had begun and with it an enduring spy saga that continues to this day.

I am, of course, referring to the great game played out between the West and East involving spies, agents, counter-espionage officers, subversives, controllers and even assassins. For more than a century agencies such as MI6, MI5 and their friends at the CIA (born from the embers of the OSS), have been engaged in a secret war involving intelligence collection. And many of the operators have plied their trade on the streets of London.

There have been thousands of books written on the activities of spies and intelligence people who were based in London. Some were written by the operators themselves, including the likes of MI5’s Peter Wright of Spycatcher fame, but most contain materials sourced from archives from the secret spy wars, particularly from the twentieth century.

Peter Matthews, a highly respected intelligence historian and author of note, was fortunate to work in various intelligence sectors and lived through momentous events, and at close quarters – not as a bystander, but as an active participant. He is a library of intelligence knowledge and has woven together a book that not only identifies key intelligence figures, operations and events in history, but intimately exposes the ‘spylore’ of London. He cleverly threads together decades of intelligence activities and operations such as Venona, the D-Day landings, the work of Room 40 codebreakers and the famous characters who will forever be embedded in British Intelligence history. Also included in this book are little-known operations and events that had global implications, and more importantly, his personal recollections of the events spanning many decades. Thankfully these elements of history have been documented and will be an important tool for scholars and amateur historians alike.

Even those who work in the closed world of secrets must have a base of operations, and what better place to hide in plain sight than the iconic and elegant St Ermin’s Hotel. I hesitate to guess the number of people connected to intelligence and covert activities that have passed through the foyer of the hotel through the years, or walked its secret corridors on to the streets of London. However, Peter’s research into the actual building and location reveals a fascinating period that dates back well before the creation of the Secret Service Bureau and contains a ‘nugget’ of intrigue in an absorbing chapter in the history of London.

Peter worked and operated in a very different world to ours today, forged by incredible endeavours of many people who worked in locations not for the faint-hearted. During his long career he made both mental and archive records of many ‘intelligence gems’ gleaned from the fascinating characters he encountered in disparate locations across the city, from dingy attics and basements where secret work was performed to the rooms of St Ermin’s Hotel.

The author has written a time capsule of momentous intelligence events, which in truth can be sourced one way or another to London and the ‘players’ and ‘operators’ who for various reasons found themselves engaged in a world of spies. A few years ago I had the good fortune to meet Peter at St Ermin’s. His brilliant book, SIGINT, had been short-listed for the prestigious St Ermin’s Intelligence Book of the Year award. As we watched the activities, Peter smiled and said, ‘If only walls could talk.’

For the intelligence connoisseur, the pages of House of Spies are more than echoes of conversations and the fading footprints of spies; they describe in plain language the many incredible events, people, monumental decisions and operations associated with St Ermin’s Hotel and British Intelligence. Some of those walls have at last given up their secrets …

ACKNOWLEDGEMENTS

My thanks go to the select group of people who helped me to research and write my book and get over the troubles that I had in the battle against Windows 10, which caused me much grief.

Mark Beynon and Naomi Reynolds, my editors, who left me alone when I had troubles with my computer and encouraged me when I did not.

Mark Birdsall, who has stamped his authority on the book gained through the years of editing his magazine dedicated to revealing the secrets of the covert world of espionage. I am also indebted to him for the selection of images from his huge collection of photographs used to illustrate this book.

Paul Baumont, my friend who instructed me in the mysteries of ‘Number Stations’ and introduced me to intelligence lectures at the Imperial College of Science and Technology, which gave me new avenues of research.

Mike Grant, who managed to save an important part of the manuscript for me and probably still does not know how grateful I am to him for his help when the pressure was intense.

Tim Fordham-Moss, who helped to focus my thoughts over lunches and tea at St Ermin’s, gave me a new slant on the functions of the hotel and showed me some of its secrets.

Ian Hunter, who has been my rock in surviving the storms and tempests of a crisis in computer technology when his calm counsel on what to do saved much grief and despair.

Anthony Kay, who was my principal researcher in finding relevant newspapers and other documentation that helped with the text and led to several new avenues of research.

Chris Northcott, whose expertise on the period before and during the First World War helped me enormously, as did him then reading those chapters.

The Imperial War Museum in London and its staff, particularly those that maintain the exhibits of the Secret War Galleries, which gave me a ‘feel’ of the equipment and weapons that the SOE agents used in their adventures. The Public Records Office (National Archives, Kew) where many obliging staff helped me to find what few documents of the beginning of the SOE survived the great ‘tidy up’ after the war. Tunbridge Wells Library, without whom I would never have had access to the wide range of books that they obtained for me to help my research. Westminster Abbey and its staff in the ancient Minument Rooms, which were a treat to visit for an archivist such as myself, with historic manuscripts and documents in every cranny of their ancient archives and for the image of the St Ermin’s statue in the Abbey.

I left the best to last, which is my wife Carole, who has lived with the writing of my books and ran the house around me while I spent my waking hours sitting in front of an unfriendly computer.

Thank you all.

PREFACE

When I was commissioned to write this book about dear old St Ermin’s it was like revisiting an old friend. The hotel and its locality had been a part of my youth, I was a daily visitor to Victoria Street and its environs as the war drew to an end. I joined A. Pauling & Co, which had offices at 28 Victoria Street on the site of what is now Scotland Yard, the headquarters of the Metropolitan Police. Pauling’s were civil engineers and had a global reputation in Britain’s civil engineering industry. They had been a main contractor in the construction of the Mulberry harbours, built to supply the Allied armies during the 1944 landings in Normandy.

As a very junior engineer I worked for Sir John Gibson, the charismatic managing director of the company, who was a leading figure in the construction of the harbours. He still maintained contact with his large team of engineers, most of whom had worked with him on the harbours, so there were plenty of wartime stories retold in the bar for me to hear. The offices at No. 28 were always bustling with men, some of whom were still in British Army uniform, sporting the insignia of the Royal Engineers.

The building was one of the few surviving office buildings at the Parliament Square end of Victoria Street, which had been largely occupied by civil engineering contractors of repute. Those buildings had a real Dickensian quality about them as they were built at the beginning of the nineteenth century when British civil engineering was the envy of the world. They were still anchored firmly in the early part of the previous century, and it was beginning to show. For instance, the lift serving the five storeys of the building was counterweight-driven with no motor to operate it. You did that by pulling hard on a rope that ran through the centre of the lift compartment. The rope had to be pulled hard to make it go up but less hard in the reverse downward direction. The lift attendant (or rope-puller) was a lady of uncertain age and temper called May who steadfastly refused to allow any junior members of staff – who she always treated with undisguised contempt – to ride in her lift.

The offices were as dated as the lift and filled with huge drawing boards, crouched over by ageing draftsmen labouring over exquisitely hand-drawn engineering drawings, often of very large scale. Their work was stored in the expansive drawers of polished wood cabinets that were already full of drawings of the components of the Mulberry harbour.

Victoria Street was occupied almost entirely by civil engineering companies clustering together largely because of their part in the growth of the railway system, and for that reason it was known as ‘Engineers Alley’. During the 1850s every railway development required a Private Act of Parliament so every civil engineering firm working on a railway project needed an office close to the House of Commons to brief its sponsoring member of parliament.

The City of London was not the only area of London that burned in the Blitz unfortunately, most of the engineering offices in Engineers Alley were burned out, charred and gutted shells after the war. The German bombers had taken their toll on the rows of Victoria Street’s combustible old buildings; they disappeared in an inferno one night, just before Christmas in 1941.

The German Luftwaffe had scattered its incendiary bombs over Westminster, so for some time after the war the street was flanked by rows of ruined shells of buildings. Later they were demolished to provide the footings for the large, modern office blocks we see today. Engineers Alley vanished, leaving only a couple of interesting historical buildings that remain today. St Ermin’s is one of them and it was destined to provide an important venue for the intelligence community during the rest of the war and into the Cold War that followed.

The bombed ruins had to be demolished to provide footings for the large office blocks on the site of those old Victorian offices, and it was sad to watch No. 28 being demolished along with the others, to be replaced by the New Scotland Yard building. Another of those knocked down was Britannia House, which had escaped destruction. It was approached by an imposing flight of steps flanked by two large and impressive stone lions. The building was said to have been the German Kaiser’s house in London before the First World War and part of his considerable investment in property in the Victoria Street area. I have yet to do the research to establish if the Kaiser’s money went into the building of St Ermin’s Mansions before it became a hotel.

Number 28 survived the flames to later fall victim to the developers’ demolition ball, but in the meantime it became a meeting place for veterans of the Mulberry harbours’ construction presided over by Sir John. He involved the company in the Ground Nut Scheme in Africa, so veterans of the harbour project would arrive, all bronzed and confident, to pay their respects to Sir John and try to find a role for themselves in the new scheme. When they had settled whatever business they had to do at No. 28 they usually repaired to the bar at St Ermin’s, where they would tell and retell tales of derring-do about the harbour, which often became enriched with the telling.

One that had the ring of truth in it (some did not), concerned the respites from the backbreaking work they had to undertake in building and maintaining the Mulberry harbour. During what little rest they had they would enjoy nothing better than to lie in the sun in the sand dunes watching German prisoners as they came down to the boats to be shipped over to England. As they were marched down to the seashore, the vista of a major harbour with ships unloading the supplies for a growing and victorious army that had begun fighting its way into France became evident. Our group would explode with laughter as one or the other of them recalled the looks on the faces of the German prisoners when they viewed the panorama of a busy harbour full of ships coming and going that had not been there only days before.

My time with Pauling’s went by and I was called to the colours, as most young men in Britain were at that time. Soon my regiment was posted to Berlin, just as the airlift that supplied that beleaguered city began. The Cold War had begun, with its use and misuse of intelligence in the struggle between the Western Allies and Communism and the skulduggery centred on Berlin where I served as a very small cog in the huge espionage machine. We all played our part in gathering military intelligence for the Anglo-American army, while the KGB did the same for the Russian armies that drove the Cold War.

At the end of my military service I was back in Victoria Street, this time in Artillery Mansions where MI6 had a base, of which more later. I found civil engineering not to my taste in the way that it had been before so I found myself involved in the pursuit of intelligence once again. It took me into interesting corners, such as working with SO6 in Scotland Yard and then across to America for a brush with the CIA (Central Intelligence Agency), and the camaraderie of MI6 men (rarely women then), many of who took their leisure in St Ermin’s Caxton Bar. Some of these experiences I have put into my books and articles and I have joined a fairly exclusive club of intelligence ‘buffs’ who enjoy delving into the ‘missing dimension’ in our country’s (and the world’s) military history.

Public access to the history of intelligence and particularly signals intelligence, which is my interest, only began in 1972 when J.C. Masterman’s book, The Double Cross System in the War 1939–1945, was published. The secret was blown wide open two years later when F.W. Winterbotham’s book, The Ultra Secret, was launched – anything published before then was usually in the form of memoirs of different operations.

By the 1980s the academic world began to take the ‘missing dimension’ in history seriously and so did the book publishers. Bletchley Park’s marketing operation began to roll and reached an apex in 1984, in the form of The Missing Dimension: Governments and Intelligence Communities in the Twentieth Century by Christopher Andrew.

The role played by intelligence in the Second World War was revealed in these books, showing that military history had to be virtually rewritten. There was little time to do it, as the generation that had fought their intelligence battles was fading fast, and a serious move to introduce academic discipline to the subject emerged. Two academic journals were founded to underpin the discipline – The Intelligence and National Security Journal and the International Journal of Intelligence and Counter-intelligence ensured a growth in historical and theoretical treatments of intelligence studies in universities.

The study of the subject’s structure began to reveal how multi-faceted the study of intelligence really was and academia began to address its breakdown into a number of general headings:

Archival evidence – using primary source archival evidence.

History and biography – producing case study-based accounts that tend to be either memoir or archive based.

Functional matters – emphasising activities and processes rather than historical examples that focus on deeper abstract issues.

Structural focuses – on the organisation of intelligence agencies.

Political aspects – concentrating on the formation of policy and control mechanisms.

Perspectives – using case and other studies to test theoretical hypotheses.

Civil liberties – examining projects designed to look at how the activities of intelligence agencies impinge on the public and sectors of it.

The press – and the changing relationship of the intelligence community with the media and its servants (which is one of my interests).

Popular culture – which considers such topics as the way the public sees the intelligence community through such popular figures as James Bond, etc.

There are, therefore, a wide variety of ways that the study of intelligence can be approached. Britain did this predominantly as history, although there was the abstract aspect in cryptology. In the United States, intelligence academic studies are mainly approached from a political science point of view and less as a historical subject, with greater emphasis on theoretical deliberations. American university studies concentrate on the function of policy making and foreign policy but British intelligence studies focus more on historical aspects, to the extent that American academics specialising in the discipline refer to the ‘British School of Intelligence’, which they (probably rightly) regard as historically based. The half dozen or so universities in the UK that offer a degree course or module in the subject approach it from a variety of directions.

My first book on the subject was published by The History Press, entitled SIGINT: The Secret History of Signals Intelligence in the World Wars and, of course, follows the British school of study. That book was intended to show some of the achievements of signals intelligence from its inception in 1914; this book includes a little of my own experience around the edges of political intelligence as we exchanged a hot war for a cold one.

ONE

THE FIRST WORLD WAR

CABLES AND CODES

It is generally believed that the British Secret Service’s domination of the intelligence conflict between itself and Germany began in 1939 in Bletchley Park – it did not. The whole saga began quietly enough almost exactly a century ago in 1914 in the Admiralty Buildings, not more than a mile from St Ermin’s Hotel. Years before the war began, the Committee for Imperial Defence in Whitehall had made plans to cut German communications in an action that would lay the foundations for making British intelligence a world-class service that would last for half a century.

As war was declared and hostilities began against Germany in 1914 the committee’s plan was quietly put into action in an undramatic way. At the time, international communications were based almost entirely on undersea cables whose network spread like a spider’s web under the oceans to connect the great cities of the world. The telegraphic messages were mainly intended to carry information and data concerned with international trade, but political and military communications messages rapidly took an increasing slice of the transmissions on the busy cable network.

Telephones and telegraph networks had changed the nature of international commerce, and even diplomacy, in the decade before the war but now it would also change the nature of war beyond imagining. Instructions and reports from the German Kaiser’s embassies, and orders and reports from German warships and garrisons in German West Africa, all kept the cable network busy. The British were well aware of the system’s importance because they were leaders in the use of undersea cable technology. They used the cable messaging system extensively themselves with speedy communications that were at the heart of the maintenance, administration and control of the diverse and distant parts of their great empire.

Britain’s initial actions at the beginning of the war were directed against the enemy’s network of cables that connected Berlin with its friends, embassies and forces around the world. Cable telegraphy was far more important at the time than wireless signalling, which was only just beginning to reach its workable technical capability. Even so, two orders were transmitted by wireless telegraphy as well as cable from the Admiralty on 3 August 1914. The first was sent to all commands of the British fleet with the priority ‘Most Immediate’, which takes precedence over all other messages. The signal, sent in the Admiralty naval code (which the German Kriegsmarine had broken) and transmitted at 11.21 a.m. read ‘XIlTO SSZKAP ACAAP SZBEC SXUYZ’. All the ships of the fleet received and decoded it as ‘Commence hostilities at once with Germany’. The signal was sent from aerials that can still be seen above the domed roof of the Admiralty Buildings.

The second message, transmitted within hours of the first, was sent to a cable ship in clear language to execute a ‘war reserve’ standing order of the Committee of Imperial Defence. The secret order was to sever Germany’s international undersea cables, which the cable ship carried out just a couple of days after war was declared (the vessel may have been the Telconia or the Alert, the records are unclear).1

The ship slipped her moorings in Harwich Harbour and steamed out into the North Sea, setting a course for the German coast near the town of Emden to dredge up five of the main telegraphic cables and slice them through. The cables they were to cut ran down the English Channel and connected Germany to France, neutral Spain, and the German colonies in Africa, as well as her many friends in North and South America. A few days later the Telconia returned and with second thoughts dredged up several more thousands of feet of cable just to make sure that the damage was irreparable.

Cable links between Europe and North America had been laid more than a decade before and became a well-established part of Germany’s international communication system. Wireless technology, however, was emerging fast and Germany had just managed her first long-range transmission in 1913 from the wireless station at Nauen, near Berlin, to Togo in Germany’s West African colony. The transmission was barely audible compared with that of a cable message, which would have been clear and distinct, so wireless telegraphy still had some way to go to be a reliable form of communication.

Following the Telconia’s exploits, one of the war’s earliest actions by British troops was to raid and destroy the German cable station at Lomé in West Africa. The destruction of their communications isolated German naval units in the waters of the South Atlantic, as without their cable connections the German cruiser squadrons could only receive wireless signals. They could be overheard by others and also, in responding to Berlin’s signals, a vessel ran the risk of giving its position away to an enemy’s listening and tracking station. Not that the British had much in the way of listening equipment in that early stage of the war, although listening stations began to quickly sprout along the coasts of the world’s oceans just as soon as they found there were signals to intercept.

The need for interception and interpretation of wireless signals practised so well by Bletchley Park in the Second World War began with the Telconia’s action in 1914 in the North Sea. It fundamentally changed the signals intelligence battleground, although neither the Committee of Imperial Defence nor the Imperial German High Command could have foreseen its implications. At a stroke German maritime communications had been deprived of their reliance on cable telegraphy for orders and reports of all kinds as well as diplomatic dispatches. This would later prove to be fatal to the Kaiser’s war objectives, particularly in the war at sea.

The first indication of the vulnerability of wireless transmissions in Morse code soon became evident almost as the Telconia returned to harbour. Navies of the world had grasped the opportunities for communicating with their ships by wireless at an early stage in the development of the technology, and among the first to do so was Britain’s Royal Navy. It made the first ship-to-ship transmission of a message during fleet manoeuvres in 1909, although reception was far from perfect. By the time the war began five years later every major vessel in the navies of world was equipped with radio transmitter and receiver sets, and the trained operators to operate them.

Even so, for the British Navy the first indication of transmissions intercepted from the German High Sea Fleet (Hochseeflotte) base was discovered by radio amateurs. They brought their message pads to the Admiralty within days of the declaration of war and Admiral Henry Oliver, the Director of Naval Intelligence, was given the first copies of wireless interceptions – the trouble was, they were in code. First Lord of the Admiralty Winston Churchill ordered Oliver to set up a wireless intercept service and also establish a decoding facility at the Admiralty, and so Room 40 in the Admiralty Old Building was allocated for their use.

Britain’s new intelligence bureau was destined to do great things in the war at sea and would later expand to provide an intelligence centre of wider dimensions. It would substantially influence the conduct of the war and even play a major part in ending it.

ROOM 40

With Room 40 OB, as it was designated, now the new home of his bureau, Admiral Oliver wanted the equivalent of an Alan Turing, the code breaker at Bletchley Park, to break the Imperial German Navy’s coded transmissions. Oliver was lucky to have an old friend in Sir Alfred Ewing, who had an interest in codes and ciphers, and he invited Ewing to lunch at the United Services Club (now the Institute of Directors) in Pall Mall.

Ewing was offered the job of head of Room 40, which he immediately accepted; it turned out to be an inspired choice for the new intelligence bureau. He began a review of the various techniques of coding in the British Library, the British General Post Office and any other institutions that were able to help him. It soon became obvious that he would need a multi-talented team to help him tackle the difficult task that was beginning to emerge.

German transmissions were coming thick and fast from amateurs as well as naval wireless telegraphy personnel, who were now monitoring all transmissions in a disciplined manner in a chain of listening stations. They were quickly created up and down the eastern coast of England and Scotland to intercept and record German wireless transmissions using a device first developed by the army, which they called the ‘wireless compass’. The apparatus could indicate the direction from which the wireless transmission came and, using the chain of direction finding (DF) stations that used the naval version of the wireless compass, two or more DF stations could take a reading on a transmission source. Where two or more direction finding readings converged would indicate the transmitter’s location, and the DF station could estimate (sometimes quite accurately) where a U-boat or naval shore station transmitter was located when sending a signal.

DF stations were manned by trained wireless telegraphists who were organised by ‘watches’ around the clock in a way that missed little in the way of enemy transmissions. The network of listening stations and DF stations’ techniques developed in the First World War was widely used in much the same way that ‘Y’ stations were in the Second World War.

Meanwhile, Ewing in Room 40 was not only beginning to crack the codes of some of the German wireless transmissions but also beginning to recruit others with similar code-breaking talents; he made some appointments that were as inspired as his own.

Oliver and Ewing decided that the team needed to have a variety of skills. German speakers were an obvious necessity, as was an understanding of naval procedures, practice and terminology, but there needed to be an overriding talent for understanding codes and ciphers. Ewing therefore looked first for candidates among naval personnel, and an early recruit was Commander Alistair Denniston, who was teaching German at Osbourne Naval College. Denniston thought that his appointment was a short-term one, but it was to become his life’s work, enabling him to gain immense experience and become a leading figure in the intelligence community.

He was appointed to the Room 40 team, where he served until the end of the war and then he was appointed head of the bureau to lead it through the lean interwar years. Denniston led his small but experienced code-breaking team into Bletchley Park as war was declared in 1939, and, with its expertise gained during the First World War, it contributed substantially to ‘the Park’s’ huge success in the second.

This was not the only link to British intelligence work made during the war, because Churchill served his apprenticeship in overseeing intelligence gathering and application in his supervision of Room 40. His experience in directing its activities in the First World War enabled him to see the value of intelligence and so he appreciated and supported his young intelligencers in the Second World War.

Churchill did not repeat the mistake in the Second World War that he had made in the management of Room 40, which was to allow the naval head of the agency, Admiral Oliver’s, concern for secrecy to constrain the distribution and effect of the intelligence valuations. Oliver was allowed, in the early stages of Room 40’s development, to keep his cards too close to his chest as he was unable to delegate work or responsibility for intelligence evaluations. Thus, the sharing of information with his colleagues was limited because Oliver’s obsession was that he alone was absolutely essential to the operation of Room 40.

As he was unable to escape the heavy responsibility for his work and felt unable to share it with anyone, he would never leave the Admiralty War Room, day or night, for almost two years. He insisted on seeing everything and signing all correspondence himself; it is not an uncommon fault among intelligence officers, where the need for secrecy increases the burden a senior officer bears.

I have witnessed the effect that this can have on an individual. It can lead to every single aspect of his life and work being unnecessarily secret. I was aware of an intelligence officer who was warned that a senior government minister he was going to see did not have the necessary clearances for certain subjects to be discussed.

The intelligence systems management would change for the better later on in the war when another admiral, William ‘Blinker’ Hall, replaced Oliver, who was given a sea command. Ewing also later retired as he was worn out and exhausted from the service to his country. He had created a world-class interception and decoding organisation that would dominate the enemy in the art of intelligence. Methods of intercepting and decoding enemy wireless traffic had developed extraordinarily quickly from a standing start in the first months of the war where no organisation had existed previously. The Admiralty’s intelligence bureau had gathered a hugely talented team, but what it now needed was what any code breaker needs and that was luck – and Room 40 found that in abundance.

The cryptologists in Room 40 were making slow but steady progress in understanding and penetrating the enemy’s codes and ciphers as the code breakers gradually worked out how the keys of the encoded messages functioned. Many of the secret clues were held in books and papers that the enemy desperately wanted to keep safe and secure.

Encryption of messages into coded form is a science and like so many scientific disciplines has its roots in the culture of ancient Greece. The word ‘cryptography’ comes from the Greek kryptos (secret) and graphos (writing). The science divides into two aspects of the ‘black art’ of enciphering and deciphering messages. There is a difference between codes and ciphers – a code can be any form of prearranged signal, such as the array of flags that Nelson used in sending a message to his fleet, or dots and dashes indicating a particular letter in the Morse code. Sailors in particular were more at home with codes because they were simpler than ciphers (as long as you had the code book). A cipher is the substitution of one letter for another using a method that the recipient already knows and so will be able to reconstruct the message, but to do that they must have the cryptographic ‘key’.

Julius Caesar used a code based on a Polybius square, which he used as a key, similar to that shown below:

The table was a simple construct and as long as the recipient had the table as a key he could easily decode the text. The letter A is represented by the number 11 and the letter Z as 55, thus to spell out the word ‘war’ would be ciphered as ‘25/11/24’.

The Polybius square was the basis of a coding method widely used in the trenches of northern France in the First World War, more than 2,000 years after the Romans first used it. Caesar also used a simple substitution code that took the letter A and substituted it for D, three places further on in the alphabet. B became E, and so on, so that the word ‘Caesar’ would be encoded as ‘FDHVDU’. The decrypt was pretty easily worked out as long as you knew your alphabet backwards. This form of substitution cipher is called the Caesar Shift Code and represents one of the basic forms of today’s modern encryption systems.

Codes that were being worked on by Room 40 were far more complex than those described above and the lights often burned late into the night in the Admiralty. Code breakers working on encoded German wireless transmissions needed a ‘crib’, and in the early days of the war they were soon to get not one but four. The first lucky strike occurred on the other side of the world in Australian waters. The German steamship Hobart was one of the few ships that had not installed a wireless set and so the captain was unaware that war had broken out. He was not alarmed when a party of sailors of the Royal Australian Navy boarded his vessel on what he assumed was a routine inspection, until the Australian Navy began to search his ship.

Secret papers issued by the Admiralstab (the German equivalent of the British Admiralty) were found, among which was the Handelsverkehrsbuch (HVB) code book used to communicate with German merchant ships. A copy was immediately dispatched to Room 40 and enabled staff to read the coded German transmissions sent to the ships of her merchant fleet. Why was a ship with no wireless set carrying books to encode signals?

At about the same time a small force of German cruisers were patrolling in the cold misty eastern Baltic Sea, in the waters of the Gulf of Finland close to the Russian coast. A dense fog separated the ships of the flotilla and the German cruiser Magdeburg alone was sighted by a Russian cruiser squadron patrolling the seas around their base in Konigsberg. They engaged and sank her, after which the Imperial Russian Navy sent down divers into the ship’s signals cabin to recover the Admiralstab’s most secret Signalbuch der Kaiserlichen Marine (SKM) code book.

The Russian Navy listened to German coded transmissions just to make sure that the German Navy was still using the code book in signals sent to its own ships. Having confirmed the value of the code book by making sure that it was still in use, it generously sent a copy to the British Admiralty. The original copy of the SKM code book resides in the British Public Records Office in Kew, while the HVB copy is on show in the National Archives and Records Office in Victoria, Australia.

The third incredible stroke of luck occurred in the North Sea. A strong force of British warships was shelling German troops advancing along the Belgian coast when a flotilla of German destroyers appeared. They were all immediately engaged and sunk, and as the ships went down their secret papers were put into a lead-lined chest and thrown overboard, as was normal in such a disastrous situation. Some weeks later a British trawler netted a mysterious lead-lined box with a German inscription on it so the crew promptly sent it to the Admiralty for the staff of Room 40 to open. Among the contents was the Verkehrsbuch (VB) code book.

So, the complete trilogy of code books of the Imperial German Navy was now in the possession of Room 40. Finding the complete set of German Navy code books was roughly the First World War equivalent of Bletchley Park being handed the Enigma machine in 1939 by the Polish cryptanalysts of the Second World War.

Naval coded messages were not the only ones of interest to Room 40. Diplomatic messages carried a different level of intelligence to that of the military and naval material and contained mainly political information. It was a diplomatic message that, to all intents and purposes, ended the war, but more of that later. Diplomatic codes were generally more complex and difficult to crack than Admiralstab ones, so a section was formed in Room 40 specifically to decrypt diplomatic messages. However, the new team was having trouble decoding messages.

The solution to breaking the German diplomatic codes came, at least in part, in Persia in the spring of 1915 as Herr Wassmuss, a German diplomat, was sent out there to try and blow up the Anglo-Persian oil pipeline. The oil fuelled the British Navy’s ships in the Mediterranean and was a highly strategic target. Wassmuss was given away by fellow diplomats and was about to be arrested by the British military police, but managed to escape with so little time to spare that he left his luggage piled up outside his hotel. The disappointed British soldiers gathered up his suitcases and sent them to London, where they were searched by Room 40 staff. They found the keys to the German diplomatic ciphers wrapped in the long johns of Herr Wassmuss. This extraordinary series of strokes of good fortune gave the bureau a solid foundation on which to build an incredibly successful intelligence organisation.

These intelligence coups allied to Room 40’s technical proficiency enabled it to read almost 20,000 encoded wireless signals and capture or intercept written material (a great deal of German mail was read) from 1915 right up to the end of the war. The majority of the decrypted material was fed into a huge bank of information maintained in a massive card index in the Admiralty War Room by a large staff of men (and just a few women) who stored the huge intelligence database in handwritten form. They were backed up by a small army of telegraphists on a 24/7 watch, manning the wireless sets at the listening stations on the coast and alert for signals crossing the airways of Europe. Intercept service personnel needed a special kind of dedication to do the close and demanding work required of them in their long days of vigilance.

The war at sea was the one battle that Britain could not afford to lose in either the First World War or the Second and one that the British Navy came close to losing on both occasions. At one time in the First World War one in four of all British ships leaving port were sunk and the sinkings were almost as severe in the Second. The drain on maritime resources was enormous, so the Admiralty had the idea of using ‘Q’ ships that were reconditioned old merchant ships with powerful guns hidden under deck structures and manned by Royal Navy crews. Up to this time single vessels not sailing in convoy were intercepted by U-boats, which surfaced and gave the crew time to take to the boats before sinking the ship with gunfire or boarding her to lay explosive charges. A Q ship that was intercepted in this way would let half her crew take to the boats and appear to abandon her, simulating panic, and when the boats were clear the submarine would close to point-blank range to sink her by gunfire or explosives. As the U-boat closed on the Q ship, mock deck cabins or tarpaulins disguising the guns would be whipped away and before the U-boat could escape it would be sunk. U-boat captains liked to surface and sink unarmed merchantmen in this manner as it saved their torpedoes for richer targets in escorted convoys or even warships. The scheme was working well for the British and every U-boat that had intercepted a Q ship had been sunk, so the German Navy was sorely puzzled at the increasing losses in her submarine fleet.

The ruse was working until a German spy gave the game away. A German national named Jules Silber, who worked as a double agent in a branch of the British intelligence system when he really still owed his allegiance to his German homeland, revealed the secret. He was in America when war broke out but had worked in South Africa for the British and had a certificate to prove it. He arrived in Britain after travelling through Canada to get his papers registered as a Commonwealth citizen.

With no evidence of contact with German intelligence or any training in the espionage scene it appears he had no training as an agent. He came to Liverpool and applied for a job in the Postal Censorship Department on the strength of his speaking several languages and was put into a group that censored the mail to and from Holland. The Netherlands was neutral but had the reputation for being a hotbed of spies. Silber was allocated the southern region of Holland and was responsible for censoring letters addressed to that region. He soon found himself able to read information in the letters that would be valuable to his mother country, Germany.

He could not communicate the intelligence to the German government directly so he selected an address from the ‘suspect list’ of people in Holland who were thought by British security to be active in espionage. Silber wrote to one of these Dutch addresses offering his services to the German authorities and letting them know the kind of information to which he had access. The Germans agreed to co-operate, as they had nothing to lose, and so a flow of very valuable intelligence began that was sent by a simple but clever method. Silber would write a quite innocent letter to an address that he covered in Holland and posted it in London knowing that it would arrive on his desk to be censored. He would open it and place his intelligence report in the envelope and stamp it ‘Passed by Censor’ for posting on to his German masters in Holland.

Silber passed much valuable information to his contacts in Holland but undoubtedly the most important of his coups was his discovery of the navy’s use of Q ships. A young woman living in the naval base of Devonport sent a ‘chatty’ to her friend in Holland in which she wrote:

We are happy to have my brother Phillip at home. We were always worried for his safety while he was at sea but he now he has a shore job in Devonport and is likely to remain here for some months. It is something to do with refitting old ships but he does not tell us much, but as you know he is a gunnery officer.

This snippet of gossip was just the kind of lead to secret information that Silber was seeking, so he took a day off to visit the young woman with the credentials of a senior official in the British Censorship Department. He produced the letter she had written and spoke sternly to her about her careless talk, so that she became apprehensive about herself and the effect it might have on her brother, who had told her about it. She described all she knew as Silber softened and coaxed her into giving as much detail as she could, and this clarified the roll of Q ships in the war against U-boats. He left, saying that he really should report her for her lapse of security to a foreign national but he would overlook it this time and telling her not to disclose their talk to anyone, including her brother.

The German security services received Silber’s report and from then on U-boats were ordered not to surface and give the Q ship a chance to uncover her guns. In future independent merchantmen were to be sunk on sight in unrestricted U-boat warfare. Silber was cautious in his activities and able to obtain much useful intelligence to send to Holland, so his activities were never detected. He returned to Germany after the war when the British Censorship Department was closed down and in 1932 wrote a book about his experiences, entitled Invisible Weapons.

The episode was an embarrassment for the British government, but it had its successes as well, and one of those emanated from the vigilance of another British postal censor who found a newspaper going through the mail to a suspect address in Holland. The paper was sent on to the counter-espionage department of MI5 to be tested and it was found to have a note in chemical ink. The writing would have been invisible without the test and simply read, ‘C has gone north. Am sending from 201.’

The message was urgently investigated by the inspector in charge, who had only had one clue, the postmark on the paper was ‘Deptford’. Further enquiries found that there was only one house in the town numbered 201 and that was a baker and confectioner in the High Street. The proprietor was found to be a Peter Hahn, of German birth but nationalised as a British subject, who denied any connection to the message even though a bottle of chemical ink and a special pen were found in a search of his shop. Hahn still denied everything but the neighbours gave Special Branch detectives a description of a man of distinguished bearing named Muller, who they thought was Russian. A search traced him to a boarding house in London, but he had recently left to go north to Newcastle where he was arrested and found to be a German agent of considerable experience.

Muller had been briefed by German intelligence to obtain naval design secrets and had produced some high-grade intelligence that he had sent to his German masters by an ingenious method. The information was placed in advertisements in English provincial newspapers for articles for sale, rooms to let and articles wanted, according to a prearranged code. He then mailed the newspapers to a ‘letterbox’ in Holland. MI5 continued to send papers containing valueless information after Muller’s arrest and was paid several hundred pounds by the Germans for its troubles, but the information was soon found to be of little use to them. Hahn was sent to prison for seven years and Muller (if that was his name) was sent to the Tower of London and shot by firing squad in the moat, where many other German spies who were active in Britain would meet their end.

The Admiralty code breakers still had a substantial advantage over their German intelligence opponents as the German High Command did not question the security of its codes and the cipher books containing secret coding keys. The conviction that its codes were unbreakable and still unbroken was due to the unquestioning confidence in the codes’ own security, and that was the cardinal sin of the German intelligence in both of the wars. Typically, the officer commanding the German cruiser squadron of which the Magdeburg was a part is known to have voiced fears about the safety of the SKM code book to the Admiralstab but he was ignored.

No substantial change in German code and cipher systems occurred until late in 1917, and even then the way that the codes and code books were changed was so casual that the new codes were easily penetrated by Room 40. German intelligence procedures in both wars exhibited a trust in their coding systems that proved far from justified. The dependence on the security of the Enigma and other coding machines in the Second World War was as fatal to signals confidentiality as losing the three Admiralstab code books was in the First World War.

These were not the only gaps in the German security shield, however, the directional service was able to locate the source of many transmissions mainly because the captains of both German U-boats and Zeppelins ‘talked’ too much on air. That enabled the British ‘Y’ service to gather much useful intelligence on their procedures and the locations of their vessels and bases but they were also able to get a ‘fix’ on the conversations between the German aircraft base controllers.

German wireless transmissions from Nauen were easy to pick up as the signal was so powerful, they could easily reach the Mediterranean, their colonies in Africa and even America. Signal strengths could be picked up quite easily across the North Sea on England’s east coast, but the U-boats’ responses as they began to voyage further into the Atlantic were growing fainter. To cope with the increasing number of fainter interceptions coming from the far Atlantic more listening stations were built on the west coast of Ireland, which was at that time still part of the British Empire.

The signals intelligence achievements of the Admiralty’s Room 40 had lessons for Britain’s intelligence community in both wars, the main one being the way intelligence evaluations were managed. The way that the convoy system was managed, or rather mismanaged, by the hidebound senior officers of the British Admiralty was an important case in point. Merchant shipping losses were at crisis levels in 1915 with the loss of forty-nine ships in the month of August, but senior officers at the Admiralty refused to accept the obvious solution of gathering the vessels into convoys under naval protection. British shipping was still operating on a peacetime basis – unarmed, uncontrolled and unescorted – while the Royal Navy was engaged in aggressive but unrewarding patrols along the German and Belgian seaboards.

Finally, Prime Minister Lloyd George lost patience and ordered the admirals to assemble the merchant ships into convoys as sinkings reached unsupportable proportions. As soon as the convoy system was instituted the number of ships lost dropped dramatically, but still many in the Admiralty refused to accept the intelligence figures that proved its effectiveness.

Karl Doenitz was a young U-boat captain in 1918 and was taken prisoner when his boat U68 was sunk in the Mediterranean. When he was interrogated by the British he was recorded as saying:

The introduction of the convoy system in 1917 robbed the U-boat of its opportunity to become a decisive factor in the war. The oceans at once became bare and empty; for long periods of time the U-boats, operating individually, would see nothing at all; then suddenly up would loom a huge concourse of ships … surrounded by a strong escort of warships of all types … the lone U-boat might well sink one or two of the ships, or even several; but it was a poor percentage of the whole. The convoy would steam on. In most cases no other German U-boat would catch sight of it and it would reach Britain bringing a rich cargo of food stuffs and raw materials safely to port.

Doenitz, who became grand admiral of the Nazi U-boat fleet, came to the conclusion that U-boats had to concentrate in sufficient numbers to be able to overwhelm the convoy escorts. The ‘wolf pack’ strategy that his U-boats subsequently used to such good effect in the Atlantic in the Second World War evolved from the experiences he had had in the First World War, until stronger escorts, more efficient radar and information from Bletchley Park finally defeated the U-boat.

Ships using information transmitted to them from Room 40 in the Admiralty were routed away from the area in which a U-boat was operating and this proved increasingly effective. By 1916 the Admiralty knew the position of nearly every U-boat at sea, as well as the position and course of every British convoy, and this data was plotted in the Admiralty War Room. But there was an incredible omission. They did not plot these two invaluable pieces of intelligence together for almost a year. Arranging the routes of the convoys to evade the U-boats was not introduced until late in 1917, and when they finally did the countermeasure saved many ships from destruction. Before the convoy system was arranged, warning many of the smaller merchant ships in the proximity of U-boats or mines would have been impossible as many of them had no wireless transceivers on board.

Such a warning would have fallen on literally deaf ears, but the convoy system arrangement appointed a convoy commodore with his own special transceiver installed in his ship. He would act on information from Admiralty transmissions and maintain order among the ships under his command, and warnings or advice would be given about the route they intended to take and the dangers that lurked there. Advice or orders would be passed on to his ‘flock’ by signalling lamp. Getting a message to the commodore of any of the many convoys at sea to skirt a minefield or avoid a marauding U-boat was the ultimate reason for Room 40’s efforts.