Keeping afloat

The diary of the Section VIII officer John Darwin for 1 September 1939 recounts how the news of war was received by SIS: ‘Gambier rang up 7 [a.m]. German troops over the frontier 6.30. Our 77077 (Code Germans invade Poland) worked v. well. F.O. showed “masterly inactivity”.’ On Sunday 3 September: ‘War on Germany declared 11 a.m. B.S.T. [British Summer Time]. Usual row with F.O. asking us to transmit reams of unnecessary messages. 11.15 Air Raid warning - Staff arrived in basement & teleprinters going in 3 mins. Very satisfactory & encouraging. C.S.S. in very good heart.’1 The declaration of war does not, however, appear to have struck very momentously at the Service’s bureaucratic processes. On 4 September an officer in the Registry proposed sending out a message seeking to standardise the size of ‘source slips’ attached to reports,2 and the first circular to all stations issued from the Chief after war had been declared laid down that ‘applications for the supply of office furniture, office stationery, safes, etc.’ should henceforth be addressed to the Accountant Officer.3

In keeping with the plans for the evacuation of government departments from the capital on the outbreak of war, a substantial part of the headquarters staff and Section VIII (Communications) moved to the War Station at Bletchley Park, whither the Government Code and Cypher School had gone in August. To facilitate the penetration of Germany, Dansey and most of his Z Organisation moved to Switzerland. As both the Service and GC&CS expanded rapidly in the early months of the war, and with Bletchley Park ‘bursting at the seams’, other outstations were established. Section VIII moved from Bletchley to Whaddon Hall, about five miles away. Section V and the Registry were subsequently transferred to St Albans. When the expected German air raids did not materialise (and ironically before the London blitz began), there was a drift back, so that by March 1940 the main body of headquarters staff had returned to central London. Even so, significant parts of SIS remained dispersed, bringing bureaucratic and logistical problems for the rest of the war.

Change at the top

The sixty-six-year-old Sinclair, who had been suffering from cancer of the spleen, was taken into hospital in late October. He demonstrated stylish sangfroid to the very end. On the morning of 4 November he sent a message to a friend saying: ‘First bulletin: Nearly dead.’ So he was, for he died later that day.4 ‘Life has been made even more bloody by the death of our beloved CSS,’ wrote John Darwin. ‘He died at 4.30 pm. He is quite definitely irreplaceable. There will never be anyone like him.’ It had been clear for a while that his days were numbered, and there were evidently concerns within the Service about the succession. On the day Sinclair died, Malcolm Woollcombe, head of the Political Section, which dealt most closely with the Foreign Office, saw the Permanent Under-Secretary, Sir Alexander Cadogan, ‘to protest about idea of anyone being brought in from outside to succeed “C”’. There is no evidence Woollcombe had any particular outside individual in mind. He may, however, have pressed the case for Menzies, Sinclair’s de facto deputy and the obvious internal candidate, since Cadogan noted in his diary that he was ‘not satisfied that Menzies is the man’. On 5 November Cadogan saw Menzies, who handed him a sealed letter which Sinclair had written two days before. ‘In the event of my death, or of anything happening to me which will prevent my continuing in my present appointment,’ it read, ‘I wish to place on record that, in my considered opinion, the most suitable individual, in every respect, to take my place, is Colonel Stewart Graham Menzies, DSO, MC.’ Perhaps fearing for the forty-nine-year-old Menzies’s chances, Sinclair took care to copy this letter to Sir Horace Wilson at the Treasury and the Chief of the Imperial General Staff, Sir Edmund Ironside.5

Despite Sinclair’s efforts, the job was no shoe-in. Horace Wilson reported that Hankey (who had been made a member of the War Cabinet in heard ‘some good opinions’. Cadogan, while making it clear both that the Foreign Secretary would make the final decision and that the post should be filled ‘with the least possible delay’, asked the three service ministries for their views. Displaying army solidarity, the War Office backed Menzies. Air put forward Major Archibald Boyle, currently Deputy Director of Air Intelligence, who had been engaged ‘on intelligence work at the Air Ministry since the last war’. Winston Churchill, the First Lord of the Admiralty, proposed Captain Gerard Muirhead-Gould (naval attaché in Berlin, 1933-6). But, in what Cadogan described in his diary as a ‘tiresome’ letter, Churchill also waxed eloquent both about the matter generally and about the deficiencies of SIS. ‘According to custom,’ he wrote, ‘this appointment should fall to a Naval Officer.’ During Sinclair’s ‘declining years’, he asserted, ‘very great shortcomings were experienced by the Admiralty in the service we have received’. Cryptography was ‘a blank so far as we are concerned, and has become mainly political’, and he considered that the condition of naval intelligence was currently ‘altogether inferior to what we had in the last war’. Churchill, Cadogan grumbled, ‘ought to have enough of his own to do without butting into other people’s business’.6

Although Churchill told Cadogan that he had ‘been thinking a great deal’ about the matter, and that he had been ‘most favourably impressed’ by Muirhead-Gould’s ‘characteristics, as well as by his record’, the Admiralty nomination had its odd aspects. The DNI, Godfrey, appears to have been ignored completely as a candidate. Muirhead-Gould himself had a ‘weak heart’ which disbarred him from a sea command, and in 1940 apparently led him to be posted as Captain-in-Charge at Sydney, Australia. Cadogan, moreover, received a damning report on him from a Foreign Office source who said Muirhead-Gould had not been ‘a conspicuous success’ as an attaché. He was of ‘a suspicious and slightly irascible nature which leads him to look for insults, real or imaginary’. While captain of HMS Devonshire he had acquired the nickname ‘Captain Bligh’ (of mutiny on the Bounty fame). Unexpectedly, perhaps, he was ‘an expert on petit point, to which he devotes quite a lot of his spare time’. Cadogan caustically considered this was ‘the thing most strongly in his favour’.7

Written the day before he died, Sir Hugh Sinclair’s letter recommending that Stewart Menzies should succeed him.

Who else was in the frame? An undated note in Cadogan’s handwriting lists five names. There were three generals - Robert Haining, William Bartholomew and Thomas Humphreys - who had each served September 1939) had ‘some doubts about Menzies’, and suggested that Brigadier Jasper Harker (head of MI5’s counter-espionage and counter-subversion division) might have to be considered, as well as Admiral John Godfrey (the Director of Naval Intelligence (DNI)), of whom he had

as Director or Deputy Director of Military Operations and Intelligence; Lord Davidson, former chairman of the Conservative Party and a long-time confidant of Stanley Baldwin, who would have been regarded as a safe pair of hands; and Sir William Wiseman, the SIS representative in the USA during the First World War. It has been suggested that Claude Dansey was interested in the job, but Sir Ronald Campbell, the British ambassador in Paris, having spoken to Dansey (whom he had known since 1914 and thought was ‘reliable’), told Cadogan that Dansey did ‘not want the job himself and admits that he is too old for it’ (he was sixty-three). Nevertheless, observing that Dansey had ‘worked for “C” for 25 years or so’ and ‘knows the thing inside out’, Campbell thought it might be worth while Cadogan speaking to him, which he did on 16 November when he presumably sought his views on the succession. ‘I’m sure he’s very clever & very subtle,’ wrote Cadogan in his diary afterwards, ‘but I have no proof of it because I can’t hear 10% of what he says.’8

After three weeks, Cadogan began to worry about the delay in coming to a decision. Menzies, he thought, ‘was in a difficult position, and it’s silly of everyone to go on funking Winston’. Finally, on 28 November at a meeting attended by the Prime Minister and the three service ministers, the Foreign Secretary Lord Halifax ‘played his hand well and won the trick’. It was unanimously agreed that Menzies should have the job, but also that there should be ‘some enquiry’ into the organisation of the Service. The next day Halifax saw Menzies, offered him the job, urged him to ‘take an early opportunity of having a frank discussion’ with both the Air Minister and the First Lord, neither of whom was satisfied with the information their departments were getting from SIS, and told him of the proposal that ‘two members of the War Cabinet, Lord Chatfield [a former First Sea Lord, currently Minister for Co-ordination of Defence] and Lord Hankey, might be asked to go into the matter [of SIS organisation] and to give us all the benefit of their great experience’. According to one member of the Service, John Darwin, the appointment of Menzies was ‘a tremendous relief to us all. Nothing can replace old Quex but SGM has never really had a chance with such an overwhelming character as his commanding officer, during the past fifteen years.’ It is, he added, ‘wonderful to think that, after the vicissitudes of the last few weeks, we have got somebody that one can trust at the head of things’.9

Responding to customer departments

The Service ministries’ criticisms of SIS around the time of Sinclair’s death were sharpened by the very embarrassing Venlo incident of 9 November 1939 when two SIS officers, having been enticed into a meeting with what they thought were representatives of German army opposition to Hitler, were captured on the Dutch-German frontier (see chapter 11). Menzies naturally sprang to the Service’s defence, but he thought the timing of the complaints was appalling. ‘If the Service has lost the confidence of the Departments,’ he wrote to Gladwyn Jebb on 14 November, ‘it seems monstrous that those in charge have waited the departure of the Chief before launching their criticisms.’ He was clearly very anxious about the overall position of SIS and told Guy Liddell of MI5 that ‘every sort of intrigue’ was ‘going on by those who want to take over the organisation’ and that criticisms were ‘being made from every quarter from ignorant people’.10

To defend the Service’s recent work, Menzies assembled a twenty-six-page document with reports from section heads. He wished to stress, ‘with all possible emphasis, that the S.I.S. work has been carried on in enemy, or potential enemy, countries, under very great difficulties, faced as we have been, by an all-powerful and ruthless enemy contre-espionage service’. He noted that in the 1914-18 war secret service efforts to penetrate Germany had been ‘a complete failure’ (though the prewar agent TR/16 had continued to transmit reports), whereas ‘in this war, in spite of well nigh insuperable obstacles, the flow of information from inside Germany, for all Departments’ had been ‘maintained unceasingly’. He added that ‘one of our chief successes of recent years’ had been the penetration of foreign ‘Secret Services and the utilisation of their agents’. Perhaps with Venlo in mind, he asserted that this was ‘so as to reduce to a minimum the number of misadventures which would otherwise be attributed to, and embarrass, H.M.G. [His Majesty’s Government]’. In what appears to be a veiled reference to the cryptological help received from the Poles and the French (which helped GC&CS to crack the Enigma cypher machine), he said that ‘we are about to reap the fruits’ of liaison with other secret services, ‘which should be of inestimable benefit to the Air Ministry within a few weeks, and probably to the Admiralty within a month or two’.11

Nor was this the only achievement. Menzies claimed on the economic side that the Service was about ‘to obtain complete details of the traffic on the Rhine and Danube, apart from numerous other schemes on behalf of the M.E.W. [Ministry of Economic Warfare], which are rapidly ripening now that funds are available’. He also noted that since its establishment only ‘about eighteen months ago’ the Communications Section VIII had developed to such an extent that it had ‘no rival in the world’. It had been the ‘sole means of communication for the Military section during the Polish campaign’, and a ‘very intricate’ wireless scheme was nearing completion ‘to ensure a regular flow of information should the Low Countries be invaded’. Rex Howard also emphasised communications. ‘In face of considerable difficulty’, he wrote, wireless facilities had been developed, so that the Service was now in ‘communication with the majority of our representatives abroad’. In addition, ‘the use of agents’ W/T sets has been developed, and we now have a certain number functioning in enemy territory, and also from neutral countries’. As a sideswipe against captious criticism (and stressing the dangers and difficulties of secret service work was an understandable reaction), Howard went on to suggest that ‘if the individual or individuals who are now attacking S.I.S. efficiency, will use their imagination, would they kindly picture themselves in the position of an individual who is operating a set in one of the foregoing countries, with all the penalties likely to ensue if discovered’.

Along with this robust defence of the Service, Howard added a cautionary note about the reporting of German warship movements, which throws instructive light on both the limitations and the ambitions of early wartime espionage. In the ‘last war, owing to W/T interception, immediate information was received when ships were raising steam, and their movements when they left harbour’. Because the Germans now maintained wireless silence, this was no longer possible, ‘and consequently the Admiralty have appeared to become more dependent on our information, which can only be obtained from resident agents in Germany equipped with W/T sets, or sending agents into Germany, or communicating with agents resident in Germany by means of couriers’. As this presented very considerable difficulties (to put it mildly), Howard considered ‘that ship movements must be obtained to a much larger extent by air reconnaissance by day and patrols by night. In spite of repeated endeavours, it has not yet been found possible to establish a reliable agent in one of the German naval ports who could be equipped with a W/T set in communication with us.’

Other reports by the heads of the Circulating Sections highlighted two perennial problems for the Service. These concerned the nature of the intelligence requested and obtained, and the process through which the intelligence was provided. In the first case there was the contrast between longer-term political and strategic intelligence and much more focused and immediate technical information, together with what might be called tactical intelligence. The former category was generally in most demand from the Foreign Office, while the latter was of greater interest for the armed services. This was especially so in wartime when, for example, intelligence about the likelihood of German offensive operations, or some general estimate of enemy capabilities, was of rather less compelling interest than detailed information about a specific weapon, or timely and accurate warning about an actual attack. But SIS was able to provide this kind of short-term intelligence only if it had a rapid and secure communications system. SIS officers, moreover, also complained that some of the reports they did manage to provide were simply ignored, or apparently disbelieved, by the service ministries.

There were problems, too, with the processing of information. There was a tendency on the part of the Service Liaison Sections simply to pass on raw intelligence to their customer departments, without comment or any assessment of the material’s reliability. By contrast, Malcolm Woollcombe and the Political Section collated information before forwarding it to the Foreign Office, and ‘made a point of eliminating all items of doubtful credibility or minor importance’. Apart from the fact that SIS was apparently better able to provide the kind of intelligence favoured by the Foreign Office, this procedure also appears to have contributed to the higher reputation the Service maintained with that department. On the other hand, the elimination or discounting of information believed to be unreliable or of only secondary importance could contribute to a situation where the Service was providing its customers with information about the world as the customers believed it to be, rather than necessarily the real picture. This was the nub of the producer-consumer dilemma which is a constant concern for any intelligence organisation and which for SIS continued throughout the war. It was constantly argued (with reason) that close co-ordination was highly desirable between the producers and the consumers of intelligence. Only then could the intelligence agencies fully understand what was required and thus meet their customers’ requirements. But if the relationship were too close, and the understanding too complete, then there was a danger that the intelligence sought and provided might merely reflect the preconceived needs of the consumers.

Whatever the potential dangers of too intimate a relationship between producer and consumer, it was clearly necessary for SIS to maintain close, if not also cordial, relations with the Foreign Office, the service ministries and the Ministry of Economic Warfare. This was also appreciated by the realists in the customer departments. One such was Admiral Godfrey, who contacted Menzies (before he had succeeded as Chief ) with what could be interpreted as a conciliatory peace-offering from a potential rival and critic. ‘I have been meaning to write to you for some time’, he wrote on 18 November, ‘about various aspects of intelligence work, which before the war I used to discuss with Admiral Sinclair.’ Noting that ‘we have a strong advocate in the First Lord’ (Churchill since September 1939), Godfrey proposed that the War Cabinet should be pressed to provide greatly increased funding for SIS: ‘The whole question is, I suppose, one of money and unless money can be made available in sufficient quantities, I doubt whether we are likely to get our intelligence.’

Having offered his support for SIS, Godfrey then provided Menzies with a list of the Admiralty’s six ‘primary needs’. First was ‘knowledge of the whereabouts of the more important German Naval units in and about German ports’. Godfrey, apparently less well informed (or less optimistic) than Menzies about the signals intelligence possibilities, argued that ‘whether or not Cryptography will ever again give us the knowledge we had of German movements in the late war’, a special effort should be put into placing agents in German ports as well as ‘in the acquisition of documents at their various Naval Headquarters and in Berlin’. Next Godfrey wanted knowledge of German shipping movements through ‘the Belts and Sound’ (the Danish islands at the entrance to the Baltic Sea) ‘and within sight of the Norwegian, Swedish and Danish coasts’. He stressed one particular interest: ‘You can well understand that information concerning the passage down the Norwegian coast of ships carrying iron ore to Germany is vital, but without knowledge of these ships’ movements, the Navy can do very little.’ Godfrey, who noted that ‘since the war started only 8 reports of movements through the Sound and Belts have reached me, and 3 only regarding movements on the Norwegian Coast from CX [secret intelligence] sources’, quoted a letter from Coastal Command showing that the air force were ‘thinking on similar lines’. ‘We should’, they wrote, ‘have Agents at prominent points who will give us information of the passage of any big merchant ships or men of war.’

Godfrey’s third priority was for information about German submarine construction, as he was ‘still without information whether Germany is embarking on a large U-boat ship building programme, or is going into mass production, or is devoting her resources to other things’. He complained, too, that he found himself ‘in great difficulties when asked, as I am, for information on this subject, as it is extremely difficult to say why it cannot be obtained’. The fourth priority was the ‘state of readiness of German Naval units’, which he recognised was ‘a difficult thing to find out’. Fifth was ‘the progress and state of completion of the [German battleship] BISMARCK and other ships building and projected’. ‘Will the BISMARCK be completed early or late next year? Our own big-shipbuilding programme is based on the answer to this question. If early, KG5 [the battleship King George V] and other ships must be accelerated and work on smaller units correspondingly retarded. These’, he added, ‘are obviously decisions of the greatest national importance.’ Finally he wanted information on German mines. The Germans, he asserted, had ‘invented a new and particularly vicious mine, probably on the magnetic principle’. If one of these could be obtained, or drawings of one, ‘we could without doubt produce the antidote’. ‘Money cannot possibly be any object when approaching this problem, as our daily losses are formidable and show no diminution. The matter is one of the most vital importance and I am constantly being bombarded with demands for information which I cannot satisfy.’

Godfrey’s shopping list was a real challenge to SIS, which, alas, was unable to be of much immediate help, though the Naval Section insisted that forty-nine (not three) Norwegian reports had been received and an observation report on the Bismarck had been made on 11 November. It is clear that in this respect the loss of TR/16 was a grievous blow. A German magnetic mine was, however, obtained, but not by SIS. On 23 November a mine dropped by a German aircraft off Shoeburyness on the Thames estuary was recovered and dissected, after which effective counter-measures were developed.12 Even when good intelligence was acquired, it was not always believed. One example cited concerned drawings that were passed to the Admiralty early in 1939 purporting to be a new type of German torpedo. The Admiralty dismissed these as fabrications, but in May 1940 the Director of Naval Intelligence admitted that a captured German torpedo was ‘practically the same as that shown on the drawings sent by S.I.S. early last year’.

The Hankey review

In December 1939 the inquiry mooted at the time of Menzies’s appointment was entrusted to Lord Hankey with Sir Alexander Cadogan’s private secretary, Gladwyn Jebb, as secretary. Like previous private secretaries to the Permanent Under-Secretary, Jebb was a crucial linking figure between the Foreign Office and clandestine agencies. Hankey’s son, Christopher, ‘took the minutes of all the meetings’,13 and his notes of the evidence from the main customer departments give a vivid picture of how secret intelligence was processed and how SIS was generally regarded in early 1940.

At the beginning of February Hankey interviewed Godfrey, and this in particular allows us to see how matters had advanced over the ten weeks or so since the DNI had written to Menzies. Liaison between the Admiralty and SIS had improved with the secondment of two officers to the Service (including one of Godfrey’s deputies). Regarding actual intelligence, however, the Admiralty were still ‘in rather a poor way’, with Godfrey’s requirements of November still being ill provided. There was some progress in Denmark where ‘an organisation was being built up under difficulties’, and in Norway ‘the position of ground intelligence was rather better’, but the only area where SIS had been able to provide ‘good help’ was information about ships in neutral ports. Godfrey followed up his interview with a letter to Hankey and a note on ‘sources of information’. Clearly well disposed towards SIS in general, Godfrey made allowances for its deficiencies. ‘I should like to say’, he wrote, ‘that many criticisms in the past have been due to causes beyond the control of the S.I.S., who, if they had had the money, could have provided us with a splendid organisation in existence when the war broke out and capable of rapid expansion.’14

In the accompanying paper Godfrey thought about the future: ‘I do not know what can be achieved in Germany. Their contra-espionage organisation is extremely good, but abroad there may be a chance of catching up, if we are prepared to spend in neutral countries the same knowledge and money as the Gestapo [sic] are credited with doing now.’ Godfrey thought that an organisation could be established in South America and the Middle East ‘that will bear fruit in the near future and compete on equal terms with the Gestapo. We may’, he added, ‘have to use their own methods, but I am convinced that in this, as in other realms, we can beat the Germans at their own game and improvise where they rely on years of preparation.’ For all the current difficulties, Godfrey remained optimistic. Naval liaison with SIS was ‘good’ and ‘development is being pursued with vigour, and although nothing can make up for lack of money in peace-time, I am still hopeful that, given reasonable luck, improvements may be achieved during the forthcoming year’.15 Godfrey’s observations to Hankey (which he niftily copied to Menzies) must have been welcome indeed to SIS, but, in truth, there was not yet much of substance to rely on: improvisation, ‘reasonable luck’ and catching up with the Germans. These were scarcely guaranteed to bring victory, even if they fell securely within the fine old British tradition of muddling through.

The army view was similar. The recently appointed Director of Military Intelligence, General ‘Paddy’ Beaumont-Nesbitt, told Hankey that ‘relations between his Department and the Secret Intelligence Service were, generally speaking, admirable and that, so far as he was concerned, the S.I.S. gave fairly good results’. ‘Little information’, however, was being supplied about Germany ‘and the position was not as good as it ought to be in Eastern Germany and Poland’. While ‘political information of a general character was good’, on the technical side ‘this was not the case’. The War Office wanted ‘to check up on figures for stores, munitions and implements of war’, but, while ‘there were plenty of rumours’, what ‘they really wanted was photostat copies of documents or other positive proof ’. Beaumont-Nesbitt confirmed that the army did not want ‘interpretation’. In his view ‘the S.I.S. should not “interpret” information at all: it should confine itself to producing facts’.

Of the three service departments the air force was by far the least happy. The Director of Air Intelligence, Air Commodore Kenneth Buss, bluntly told Hankey that he was ‘generally dissatisfied’ with the intelligence received. 16 This was especially so from within Germany itself. Perhaps remembering Frederick Winterbotham’s agent 479 driving round Germany trying to spot Luftwaffe airfields, he ‘could not understand why there was such a general lack of “ground” information and thought [though he cannot have thought very hard about this] that even under war conditions it would have been comparatively simple to get people to go within sight of an aerodrome and report what aeroplanes were there’. He reported that most of the questionnaires submitted to SIS by the air force ‘remained entirely unanswered, more especially when, as was generally the case, technical information was required’. Buss believed that while the current air liaison officer (Winterbotham) was ‘regarded as quite good’ (though ‘entirely “C”’s man’), matters could be improved both by introducing more RAF officers into SIS and by training SIS officers who currently had no ‘specialised air knowledge’.

As well as investigating service needs, Hankey also interviewed Desmond Morton, by now Director of Intelligence at the Ministry of Economic Warfare. Morton (a former SIS officer himself) was very negative. SIS, he said, ‘was not producing the material required’, especially ‘definite information’, such as ‘copies of the customs returns of certain neutral countries’ or reports on ‘occasional surreptitious cargoes’. Rather reflecting Buss’s complaint about the lack of technical expertise on the part of SIS’s representatives in the field, Morton thought that they simply ‘did not know precisely what sort of information was required’. SIS had ‘essentially a military character, with “a strong political adjunct” in the shape of Mr. Woollcombe’. The Economic Section, by contrast, ‘was not perhaps very strong and ought to be reinforced’. The problem was ‘largely one of liaison’, though he admitted that ‘there had lately been signs of improvement in this direction’.

While each of the customer departments consulted by Hankey had reservations about what Morton called ‘S.I.S. intelligence, strictly speaking’ - human intelligence (humint) - the situation regarding signals intelligence was much more favourable. Morton said that commercial intercepts were ‘much the brightest side’. By this means his department had ‘obtained a very full knowledge of the present state of Russo-German commercial relations’ and ‘conclusive evidence’ that ‘the Russians had so far provided nothing of what the Germans required’. Telephone intercepts, which Morton likewise received from SIS, ‘were also very useful’. While Air Intelligence reported that they had obtained ‘a great deal of information’ from GC&CS, Admiral Godfrey said that ‘cryptography’ had ‘so far not provided any good naval material’. This ‘was certainly not due to any shortcoming on the part of the Government Code and Cypher School’, who were ‘in any case, making very promising progress’. But for Godfrey ‘the one really bright spot’ was ‘the “‘Y’ side”,17 in particular the intercepted signals and call signs, which the Admiralty found of the greatest possible use. All praise for this state of affairs’, he added, ‘was due to Colonel Gambier-Parry.’

In addition to investigating SIS’s intelligence-gathering activities, Hankey also looked into the more problematic (as was increasingly to be the case) matter of covert action, and in particular Colonel Laurence Grand’s special operations Section IX or D. Hankey interviewed Grand ‘in the company of Colonel Menzies, with the main object of trying to discover exactly what his activities were’. Grand said that his chief propaganda function was the distribution of material in Germany, and for this ‘he employed various channels - Catholics, Junkers, Socialists and the like’. His section made special efforts to ensure ‘that the paper and ink should, if possible, resemble German materials’. He said that ‘about 70- 80,000 “pieces” were now being distributed monthly in Germany’ and asserted that there were ‘three secret presses run by anti-Nazis in Prague, Hamburg and Berlin’, but admitted that he ‘had actually no control’ over their output. When pressed by Hankey, Grand evasively replied that he ‘did not think’ these presses had been ‘entirely quiescent’.

Grand argued that the dissemination of propaganda in neutral countries was almost as important as that in Germany. His main operation was based in Belgrade where he said he ‘managed to reach “large sections of the population by indirect means”, notably a private press, a whispering campaign and making use of commercial agents. A press agency had also been established.’ Hankey asked Grand how much all this was costing. Grand replied that he ‘found it impossible to distinguish between expenditure on propaganda and that on sabotage’, but ‘until recently he had been spending at the rate of about £11,000 a month on all his activities’. Menzies said that he was ‘himself going into Colonel Grand’s finances, and would be in a position before long to give a more definite picture’.

Lord Hankey’s report, delivered on 11 March 1940, broadly gave SIS a clean bill of health. No fundamental changes were recommended concerning the Service’s core human intelligence functions and Hankey specially mentioned ‘the strong impression I have derived of the healthy spirit of loyalty, esprit de corps and devotion to duty which animates all ranks of S.S. [the Secret Service]’. This was no doubt a great relief to Menzies, who had evidently been extremely concerned that the very existence of the Service was at risk. On 14 February he had sent Jebb a ‘brief historical sketch’ of SIS which affirmed ‘that success in S.S. work must always be the result of years of patient work, and not of improvisation’. Menzies warned Jebb that ‘the machine can be destroyed by a stroke of the pen, lessons can be forgotten overnight, but I can personally conceive of no greater catastrophe from a national point of view’.18

Clearly Jebb and Hankey heeded this Cassandra-like warning, and Menzies’s own responses to criticisms of SIS were included in the final report. Hankey noted Air Intelligence’s desire for ‘more information as to the numbers of aircraft present on German aerodromes’. He remarked that ‘at first sight’ this would ‘appear to be relatively easy information to obtain’, but he had been informed ‘that the Germans exercise the utmost precaution to prevent any approach by strangers to their aerodromes’. Not only was this an unrealistic complaint, therefore, but Hankey thought it largely superfluous. ‘As a matter of fact,’ he added, ‘the Air Intelligence Service is well informed about the location of the German air forces from a source which it is unnecessary to disclose.’19 To the Air Ministry’s complaint about the lack of technical intelligence, Hankey reported SIS’s observation that not only was ‘a certain amount of information of a detailed character . . . already supplied’, but that it took ‘years to develop regular and dependable sources’ for specific technical information. ‘The funds available before the war were not sufficient for this and it is extremely difficult to build up the necessary contacts in time of war.’ It would take a long time ‘before the machine can be built up afresh in Poland and Czecho-Slovakia and even in Holland, where the Venloo [sic] incident has badly dislocated the organisation’. ‘I do not think’, commented Hankey, ‘that Colonel Menzies’ explanations can be contested.’

Despite his broad support for SIS, Hankey appreciated that improvements could be made in the higher co-ordination of intelligence and in liaison with its customers. For the former he proposed that there should be a monthly meeting of the Permanent Under-Secretary at the Foreign Office, the Directors of Intelligence of the armed services and the Ministry of Economic Warfare, and the Chief of SIS. This body would discuss policy and review the collection and processing of secret intelligence generally. Hankey had originally thought that this should be linked to the Joint Intelligence Sub-Committee (which had been set up before the war to co-ordinate the armed services’ intelligence), ‘but Colonel Menzies pointed out that from the earliest days S.S. had, for vital reasons of secrecy, deliberately been kept aloof from regular Government Committees such as the Committee of Imperial Defence and the Chiefs of Staffs organisation, and that meetings on a less formal basis . . . would be preferable’. As for liaison, Hankey argued that the development of closer relations between the customer departments and SIS (for example by the secondment of officers) was desirable and ‘should create a closer mutual understanding between all concerned’. While the navy and the army were more or less satisfied with the existing arrangements, Hankey recommended ‘the temporary introduction into S.S. of new blood from the Air Staff’.

None of Hankey’s findings so far was very contentious and his conclusions regarding signals intelligence were equally uncontroversial. He recommended no changes or developments at all for the cryptographical work of GC&CS, although he did propose that, because there had been an enormous expansion of sigint work, a separate ‘Y’ Committee should be established to oversee and co-ordinate the technical interception side of things.20 Covert action (which Hankey called ‘subterranean activities’) had been ‘forced on the Government by the conditions of modern warfare’, and had proved to be ‘by far the most difficult of the activities of [the] S.S. to assess correctly’. ‘At first sight,’ he observed, ‘the natural instinct of any human person is to recoil from this undesirable business as something he would rather know nothing about.’ But he then provided the classic rationale for any kind of dirty tricks: if the enemy do it, so must we. The Germans, he wrote, ‘have brought the development of sabotage and kindred subterranean services to a high pitch of efficiency and it is unavoidable to maintain them ourselves unless we are to be placed at a serious disadvantage’.

Hankey noted that propaganda and sabotage were entrusted to Section IX. So far as ‘large scale sabotage’ was concerned, it was ‘too early to express an opinion as to the efficiency of this Section as, up to the present time, none of the planned major operations have been put into practice’. Rather ambiguously, he added that ‘when called upon to produce schemes for particular operations at short notice, the Section has displayed ingenuity and resource’. Some ‘useful’ small-scale sabotage had been achieved ‘on the Danube and on the Polish Railways, particularly in Galicia’, where communications between Germany, Romania and Russia had been ‘hampered to a considerable extent’. He noted, however, the friction which had arisen between Section IX and MIR in the War Office and recommended that Menzies and the Director of Military Intelligence should ensure ‘the closest co-operation and pooling of ideas’ between the two organisations. As for propaganda, Hankey found himself ‘on much more delicate ground’. Although both Grand and, apparently, Menzies had put up a vigorous argument for SIS to continue to produce and distribute material, Hankey felt that the production of propaganda should be left to the existing Foreign Office organisation and that SIS should be responsible for its distribution only in ‘enemy countries and Russia’. There was clearly also a worry about Grand’s maverick independent-minded-ness. In order to ensure ‘complete mutual understanding’ between the Foreign Office organisation and SIS, it was proposed that weekly meetings should be held, and that ‘if any difficulties arise which cannot be settled jointly’ they should be reported to Hankey himself to sort out.

One of the problems Hankey had in producing any sort of definitive report was the fact that most of the issues raised - for example that of liaison with the service ministries - were actually being addressed while he was conducting the inquiry. Menzies, too, had begun his time as Chief with some administrative reorganisation. Hankey remarked that on appointment Menzies had been ‘considerably overloaded with immediate charge of the War Station as well as of headquarters’, but had ‘now carried out considerable measures of decentralisation’. Colonel Vivian had been confirmed as head of the War Station at Bletchley and ‘Deputy Director [sic]’, for which Hankey thought him ‘admirably qualified’. Claude Dansey had ‘taken over the control of a number of sections which previously reported direct to Colonel Menzies’. These included all agents run from London, as well as the Italian and Swiss stations. Dansey, while continuing in charge of the Z Organisation based in Switzerland, came to London to be Assistant Chief (ACSS). In February 1940 Rex Howard became Menzies’s chief staff officer. But there was no systematic reorganisation of the Service and its ramshackle peacetime structure continued essentially unaltered into the war. It reflected a high degree of clumsy ad hoccery, combining individual specialisms and preferences with sections created to meet immediate, short-term requirements, rather than as a result of any cool and logical assessment of the Service needs and functions.

If after the completion of Hankey’s report Menzies hoped for a breathing space, during which he could settle down and develop the Service to meet wartime demands, he was to be disappointed, as the dramatic German drive into Scandinavia, the Low Countries and France once more put SIS under severe pressure. On 9 April 1940 German forces invaded Denmark and Norway, swiftly occupying all of the former and much of the latter. On 23 April, Sir Samuel Hoare, the Air Minister, and the only Cabinet minister to have been an SIS officer, wrote to Hankey that he had ‘been a good deal worried by the fact that we had no serious warning from S.I.S. or other intelligence sources of the German invasion of Norway’. Hoare said that there had been some Air Intelligence reports indicating ‘that something out of the ordinary’ was taking place on 6-7 April and that these had ‘of course’ been passed on to the Admiralty and the War Office. He felt that the Joint Intelligence Sub-Committee should be used to collate ‘the various reports received by the Air Ministry and by other Departments’ and comment on ‘the mass of information which is circulated to the War Cabinet and the Chiefs of Staff’. This raised two issues: the acquisition of intelligence and its processing. Hankey responded quickly on both matters. He asked Menzies to comment on the first and in the meantime told Hoare he agreed that the Joint Intelligence Sub-Committee should produce more complete appreciations. With a deft sideswipe at Hoare’s own ministry, however, he added that so far as assessment was concerned it was ‘the job of the Intelligence Departments of the Services’ to weigh secret service information ‘with intelligence from other sources, such as diplomatic channels and air reconnaissance’. He recalled ‘that for months past we have been receiving warnings’ of German force concentrations in Baltic ports, yet he was afraid ‘that our Service Authorities have never taken the possibility of an attack on Denmark and Norway sufficiently seriously’.21

The very next day Menzies saw Hankey and gave him a report ‘showing the information that had become available and had been sent forward prior to the Scandinavian invasion’. Hankey was ‘greatly impressed with the Note’, and passed it on to Hoare. ‘In my opinion,’ he commented, ‘S.I.S. present a cast iron case. They have given warnings which, in the aggregate, are as definite as you could expect to receive.’ He pointed out that SIS did not take responsibility ‘for forming appreciations on the material they submit. That is the job of the Service Departments . . . When S.I.S. have sent the information to the Heads of the Intelligence Departments in the Services they have done their job.’ Hankey bluntly observed that the service Directors of Intelligence had ‘to see that those responsible for plans and operations get the intelligence in the right form’, and he rather suspected ‘that that is where the fault lies’, thus placing the matter firmly back in Hoare’s departmental lap. Hankey, however, was too old a Whitehall dog needlessly to antagonise a fellow minister. ‘It may be’, he observed, ‘that intelligence and operations are not quite sufficiently linked up’, and he therefore strongly supported Hoare’s ‘idea of intelligence appreciations’.22

Hankey, nevertheless, was sufficiently concerned about the processing of intelligence that he thought the matter should be taken up with the Prime Minister, Neville Chamberlain. He sent Menzies’s report to Sir Horace Wilson, observing that although most of the intelligence had been sent to the Directorate of Naval Intelligence ‘we did not get any warnings as far as I can recollect from the Admiralty’. It is, repeated Hankey, ‘not the business of S.S. to comment on the facts. They merely furnish them to the Directors of Intelligence of the Service Departments whose business it is to send them to the appropriate authorities. I am not satisfied’, he concluded, ‘that the Services have done their job very effectively.’ Wilson and Hankey discussed the matter with Chamberlain, who agreed that, if possible, the Joint Intelligence Sub-Committee (JIC) should be instructed to maintain ‘a running and connected story based upon such Intelligence material as seems to point to the need for action’.23

Whatever direction Neville Chamberlain may have been able to give to the work of the JIC, it was overtaken by further events on the Continent after the Germans invaded Holland, Belgium, Luxembourg and France on 10 May. Chamberlain resigned the same day and was replaced by Winston Churchill, whose ‘galvanic energy’ was to transform the central direction of the British war effort. Churchill’s longstanding interest in intelligence matters was underscored by the transfer of Desmond Morton from the Ministry of Economic Warfare to the 10 Downing Street staff and his appointment ‘to keep personal liaison’ between Churchill and SIS.24 On 3 June 1940 Morton attended the first meeting of what was called the Secret Service Committee. Also present were Cadogan, Hankey, the three service Intelligence Directors, Menzies, Lord Lloyd (Colonial Secretary) and Gladwyn Jebb. On the agenda was ‘the re-organisation of the S.I.S. machine’ necessitated by the German occupation of the coast-line from northern Norway to the English Channel, and ‘the means of continuing S.I.S. activities’ following the anticipated entry of Italy into the war (which actually happened on 10 June). Judging from the rather sketchy record of the meeting, in the event it appears mainly to have involved Menzies defending SIS’s wartime performance:

Colonel Menzies made a statement on the subject of communications with various organisations which he had now established behind the German lines from the extreme north of Norway to Belgium. He also described his organisation in Baltic ports, Finland and Sweden, together with the strengthening of his machine which had been accomplished in the Iberian Peninsula. Some mention was also made of the S.I.S. organisation in Italy, Greece and Turkey.

Various questions were asked of Colonel Menzies, notably in regard to the presentation of reports, the manner in which they reached the authorities concerned, the exact use made of intercepts and the way in which they are linked up with other information, and the functions of the Joint Intelligence Committee. Some discussion also ensued on the part which the S.I.S. might play in the event of an invasion of Great Britain.25

The co-ordination and processing of intelligence was clearly an important issue, which Hankey had evidently intended should be addressed by his proposed monthly meetings. But the Secret Service Committee never really got off the ground. It was eight months before a second meeting (in March 1941), and no further meetings were held that year. The scheme failed in the first place because of SIS’s traditional reluctance to become involved in any formal reporting structure. This was not just a matter of convenience (though it was undoubtedly that too); it stemmed from a desire to avoid what might readily turn into a mechanism for government departments merely to criticise the Service. There was also a genuine security aspect, in which the integrity and value of SIS was protected by its maintaining the lowest-possible profile, even within government itself. SIS, thus, could best keep up with its customers’ requirements by regular, informal meetings and liaison. The problem (as is inevitably the case with any secret intelligence organisation at any time) was how security, with its accompanying lack of institutional and individual definition, could best be reconciled with the efficient and effective integration of the Service and its functions into the wider government bureaucracy.

Concerns about security also contributed to a situation where SIS’s role in providing intelligence was not always acknowledged when customer departments used it in their own reports. The issue surfaced early in August 1940, after Anthony Eden (the Secretary of State for War) had complained in Cabinet that he was getting ‘no information from France’ and Churchill had received a report from General Spears, his personal representative with General Charles de Gaulle, of a Free French agent’s visit to Brittany (which had actually been organised by SIS). De Gaulle had escaped to London in June 1940 and assumed leadership of the Free French movement. Churchill sent for Menzies and ‘dressed him down roundly for his failure to produce more information from German-occupied territories’. When Menzies retorted that ‘a very fair amount of information was in fact obtained’, Churchill suggested ‘that there was a conspiracy to keep this from him’ and directed Menzies to ‘send copies of all such reports’ directly to Major Morton for submission to him. Menzies responded almost immediately with a batch of reports which Morton appreciatively told him on 18 May were ‘exactly the sort of thing I want to see’. More importantly, perhaps, the Prime Minister ‘was very grateful for the information’. Menzies also had to keep the Foreign Secretary, Lord Halifax, sweet and, ‘in order to avoid the Prime Minister producing some titbit of information at the Cabinet culled from an S.I.S. report which the Foreign Secretary has never heard of ’, he promised to keep him fully informed as well.26

This was the origin of the system whereby for the rest of the war Menzies himself personally supplied Churchill with raw intelligence, while also sending SIS reports to Desmond Morton at No. 10 Downing Street. But, as Menzies recalled afterwards, from now on ‘a small red box’, of which only he and the Prime Minister had the keys, ‘was deposited on the latter’s bed each morning, within it all relevant reports, and intercepts obtained by G.C. & C.S., over the previous 24 hours’. A September 1940 note by Churchill’s principal private secretary, Eric Seal, more prosaically recorded that the daily boxes ‘from “C”’ were ‘to be put on the Prime Minister’s desk and left for him to re-lock’. The boxes were marked ‘“only to be opened by the Prime Minister in person”. This marking’, added Seal, ‘is not mere camouflage and is to be taken seriously.’ However precisely they were supplied, in time these boxes contained material from Britain’s single most valuable intelligence source - the German Enigma decrypts - which in turn contributed to the close relationship that built up between Menzies and Churchill and undoubtedly enhanced SIS’s reputation at the highest level. In the spring of 1941 Hugh Dalton (Minister of Economic Warfare) noted that Churchill regarded Menzies as ‘a wonderful fellow, and was always sending for him’.27

Liaison between the services and SIS was not just a one-way street, and SIS’s reluctance to be integrated into the central intelligence machinery could have its costs, as demonstrated by the recriminations that followed the disaster at Dakar in September 1940 when a Free French expedition, supported by a British naval flotilla, was driven back by the local French forces. The operation had been compromised by leakages from among the Free French and Poles in London.28 It had also been assumed that the Dakar garrison, and the Senegal French colonial administration, would readily come over to the Free French side, and SIS was criticised for not warning to the contrary. Menzies indignantly observed that ‘as we were not specifically asked to obtain information from the Dakar district’, he assumed that ‘the requisite data’ had been provided by ‘other sources’. He suggested that, had he been given a month’s warning, it might have been possible to provide more information about local feeling in Dakar, and in any case the Vichy authorities knew all about the plans, owing to their being public knowledge in ‘far too wide a circle’ in London. He thought it would be ‘monstrous if any charge should be levelled against the Intelligence Services, including the S.I.S.’.29

Cadogan rather sympathised with Menzies: ‘Neither the S.I.S., so far as I know, nor the F.O. were consulted or inf[orme]d when the Dakar affair was first planned.’ But evidently the Prime Minister was looking for scapegoats, and Cadogan had his private secretary, Henry Hopkinson, convey the SIS defence to the Cabinet Secretary, Sir Edward Bridges. Bridges, in turn, consulted General Hastings Ismay, Churchill’s chief of staff, but Ismay was much less understanding and effectively accused Menzies of being disingenuous. There was, he asserted, ‘a standing arrangement whereby every facility is given to S.I.S. to know what is going on. “C” can either come himself, or send people to this Office at all times to discuss matters . . . and to read Papers.’ The Joint Intelligence Sub-Committee, he added, ‘knew all about the projected Dakar expedition’, and the service Directors of Intelligence (who were all members of the committee) each had a representative in SIS. Finally, he observed that SIS had a responsibility to show more initiative in these matters. It was, he said, ‘a false assumption that the Intelligence Services should not set about getting information until they are asked to do so’. It was their job ‘to keep in touch with plans of likely or pending operations, and to take steps to get information in relation to them without specific orders’. While conceding that ‘the relation between the Service Departments and S.I.S.’ was not ‘my affair’, Bridges thought it ‘obviously important that there should be no misunderstanding as to where the initiative lies with regard to obtaining information’. Clearly (and realistically) appreciating that Menzies might respond very badly to Ismay’s trenchant views, Bridges thought it ‘would be better’ that the note ‘should not be shown to “C”’. He suggested, however, that ‘discreet enquiries’ should be made ‘in order to make certain that the position is clearly understood’.30

The debate stimulated by Dakar exposed one of the most problematic aspects of SIS’s relations with its customers: that of tasking, and the overall question of who should take the initiative in the crucial matter of intelligence targeting. It also exposed the risk that SIS could run of being hoist with its own petard. Part of the Service’s mystique, and arguably an indispensable part of its modus operandi, was for ‘C’, as the keeper of the deepest secrets, to appear to ‘know everything’, and the substance of Ismay’s criticism was that SIS had not only been in a position to be well informed about the Dakar plans, but also ought to have made sure that it was so. Cadogan, however, sprang to Menzies’s defence, arguing that while the theory was all very well, it was a different matter in practice. He accepted that ‘C’ could ‘come himself ’ to the Cabinet Offices ‘to find out what is contemplated’, but this ‘hardly amounts to that full co-operation’ which he ‘thought to be eminently desirable’. Ismay’s point about the service Directors of Intelligence having representatives in SIS was only ‘satisfactory if those officers are kept fully informed by the three Directors’. While he conceded that it was Menzies’s job ‘to obtain information without being asked for it’, it was ‘difficult to pursue intensive investigations all over the world at all times’, and ‘if his activities could be concentrated on the important spots at the right time, I am sure that would help’. Neither was it all Menzies’s fault: ‘If it is his duty to keep enquiring as to what plans may be in hand, I should have thought that, to make assurance doubly sure, it would equally be the duty of the planners to take him into their confidence.’31

The row in the end appears to have been solved by the informal means traditionally favoured by SIS. Cadogan spoke to Ismay, evidently soothing ruffled feathers. Menzies, too, had ‘a long talk’ with Ismay and assured him that he now had ‘a most excellent liaison’ with the Joint Planning Staff. ‘At the end of his talk,’ reported Bridges, ‘Ismay told “C” that, if at any time he felt that he was not kept sufficiently in touch with events, he should not hesitate to let us know.’ ‘Good,’ minuted Hopkinson on Bridges’s letter, no doubt expressing a relieved Foreign Office view of the matter.32

Whatever Menzies’s improved relations with the Joint Planning Staff and the War Cabinet Secretariat, the armed services continued to complain about the supply of intelligence from SIS. This was very evident from the March 1941 Secret Service Committee meeting which Cadogan specifically called ‘to ascertain whether the Directors of Intelligence had any points to make in regard to the operation of the Secret Service’. Inevitably they had. Their first concern was the likelihood of a German invasion of Britain. Although information from air reconnaissance and interception was ‘improving’, there was ‘still a lack of up-to-date information from agents’. ‘A good deal of intelligence of a somewhat vague and general character’ had been provided, but the War Office ‘were greatly exercised over the impossibility of obtaining exact information from ports in regard to the date and hour of the departure of invasion forces’. Menzies said that the main difficulty concerned communications. In the first place there was the problem of getting agents into occupied Europe. He reported that the Air Ministry ‘were doing their best’ and that he was ‘in touch with’ the Admiralty regarding ‘the provision of suitable craft’. As for the organisation on the ground, in Belgium it was ‘working satisfactorily’ and he hoped ‘in a month or two’ to have a large number of wireless sets operating in France. There were problems in Norway ‘owing to the indiscretion of Norwegian agents’, but good information was coming from Stockholm. Holland was ‘the weakest spot’, and there was ‘obstruction’ from the Dutch government-in-exile. In the Balkans Menzies said that the German occupation of Romania and Bulgaria had severely disrupted the flow of intelligence. Regarding Greece and Albania, ‘preparations had been made against an eventual overrunning of those countries’, but he warned that it ‘was not possible to guarantee that these plans would work in practice’.

Charged with the ‘inadequacy’ of information from Italy, Menzies said that ‘the greatest difficulty arose out of the disappearance of French information’, but asserted that his relations with the Vichy French Deuxième Bureau ‘were improving and he hoped to get more from that source’. Attention was also drawn to ‘the lack of reliable information from American contacts’ (presumably from diplomatic missions across German-occupied Europe). For much of the meeting the best Menzies could do was proffer vague promises that the position would get better. Regarding America he was ‘hopeful of improvement’. Information ‘had hitherto been difficult to obtain from North Africa’, but ‘the situation was now developing satisfactorily through the installation of W/T sets in Tunis’. Information about troop movements in Russia ‘was coming through better’, and ‘steps had been taken to improve the transmission of information from the Far East, but this again presented very great difficulties’. Responding to criticisms that ‘nothing whatever had been received form German ports’ about the movements of the German navy, Menzies said this was ‘largely’ due to the lack of wireless communication, ‘which had not been as fully developed before the war as it is now’.

All through the meeting Menzies had clearly been on the defensive, but right at the end he drew attention to the difficulties SIS faced arising from the ‘creation and expansion’ of special operations whose interests, ‘in many respects, ran counter to his own’. There was a question of ‘priorities, competition for agents, communication, transport, passages, etc.’. Menzies got the committee to agree that Cadogan should put up a recommendation to the Foreign Secretary and ‘if necessary’ the Cabinet, urging that intelligence should ‘always be given priority’ over special operations work.33 Although in fact no formal decision was extracted from the Foreign Secretary at this stage, Menzies had identified a general problem which, with varying intensity, was to affect SIS’s place in the British war effort for the next few years.

Special operations and the creation of SOE

At the beginning of the war special operations, which comprised mostly sabotage and propaganda work, had been organised within SIS by Laurence Grand’s Section IX. But as Menzies observed to the Secret Service Committee in March 1941, the practice of ‘SO’ was frequently quite inimical to that of ‘SI’ - intelligence. Any spectacular act of sabotage, for example, was likely to provoke an intense security response from the enemy, which in turn could jeopardise the less dramatic and more sustained activities necessary for the acquisition of secret intelligence. Within SIS, moreover, the tension between special operations and intelligence was exacerbated by the personalities involved. Grand, for all his evident imagination and enthusiasm, was markedly better at ideas than administration, and there were worries about the lavish way in which he spent money on his various schemes. While in March 1940 Hankey had given him a qualified benefit of the doubt, in SIS Claude Dansey had raised the question of whether Grand should ‘conform and co-operate’ with the rest of the Service, or simply ‘go on galloping about the world at his own gait’. Cadogan was sufficiently concerned in May-June 1940 to canvass opinions about Grand and his work. Beaumont-Nesbitt, the Director of Military Intelligence, described Grand as ‘gifted, enthusiastic and persuasive, but I do not regard him as being well balanced or reliable’, and Archie Boyle of Air Intelligence said he was ‘an expensive luxury’. Gladwyn Jebb was the most damning of all. Grand’s judgment, he wrote with evident relish, ‘is almost always wrong, his knowledge wide but alarmingly superficial, his organisation in many respects a laughing stock, and he is a consistent and fluent liar’. Jebb conceded that Grand was ‘generous and liked by his staff’, but ‘to pit such a man against the German General Staff and the German Military Intelligence Service is like arranging an attack on a Panzer Division by an actor mounted on a donkey’.34

The whole question was reviewed at a high-level meeting with the Foreign Secretary at the end of June 1940 when Menzies effectively washed his hands of Grand. An informal pencilled note of the meeting gives a flavour of Menzies’s exasperation with his unbiddable subordinate: ‘“C” says responsibility too much for him. “D” [Grand] represents his own views as “C”’s. D’s great ideas. Doesn’t seek advice before putting out schemes . . . Schemes not weighed sufficiently . . . But C can’t control him.’

Over the summer of 1940 the management of British special operations was restructured. A new organisation, which emerged in September as the Special Operations Executive (SOE), was set up under Hugh Dalton, the recently appointed Minister for Economic Warfare, who (according to his memoirs) was instructed by Churchill to ‘set Europe ablaze’.35 Jebb was installed as chief executive officer of the organisation, which took over SIS’s Section IX, the rump of MIR (the special operations branch at the War Office) and responsibility for ‘subversive propaganda’. The transfer of Section IX to the new organisation was completed with such speed that it had been implemented before SIS had been formally notified. Although complaining about this, on 4 September Menzies assured Jebb that he welcomed the change and had no wish to retain responsibility for sabotage and subversive activities. Presciently, however, he noted ‘the grave disadvantage of running two sections of the secret service, with intimately interlocking interest, under two masters’. Sir Frank Nelson, who had worked for SIS in the Z Organisation in Berne, was given charge of special operations with Grand as his deputy, but, when it soon became clear that this would not work, Grand was summarily dismissed and transferred to a staff job in India.

Jebb was well aware of the need for the ‘friendly co-operation of C’ if special operations were to function efficiently, and he acknowledged potential clashes of interest, observing that ‘a project may quite possibly be good for purposes of Subversion, but bad for purposes of Intelligence’, and that there might be competition for transport and communications resources. To mitigate these, in an ‘Agreement between C [Menzies] and D [Nelson]’ (drafted by Jebb on 15 September 1940) he laid down at the start that all of SOE’s cypher communications would run through SIS, that intelligence collected by SOE would be passed on to SIS, and that SIS approval would be sought when engaging agents. All of these matters were to cause friction between SIS and SOE over the next few years, exacerbated by the exponential expansion of SOE under the dynamic leadership of Dalton, Jebb, Nelson and Lieutenant Colonel Colin Gubbins (who had been appointed Director of Operations), and at a time, at least initially, when SIS itself had few successes of its own.

During 1940 and early 1941 more or less satisfactory relations between SIS and SOE were maintained between Menzies’s liaison officer, Colonel E. E. Calthrop (a wheelchair-bound multiple sclerosis sufferer who had won a Military Cross in the First World War), and Frank Nelson, who was unfailingly courteous and collegial. SOE, nevertheless, complained about an incident of line-crossing in Lisbon (which was actually Claude Dansey’s fault, when in seeking to co-operate with special operations he allowed them to contact an existing SIS agent), while SIS complained of insecure behaviour by an SOE officer in Stockholm, planned sabotage jeopardising liaison relations in Finland and a risk of compromise over signals intelligence. A weekly meeting was organised between Jebb, Nelson and Menzies, but towards the end of April 1941 Admiral Godfrey at Naval Intelligence weighed in with a memorandum on the division of interests between SIS and special operations. He stressed how dependent the navy was on SIS intelligence and asserted that SIS operations in several countries were being damaged by SOE’s attempts to create sabotage organisations ‘with untrained personnel’, and he wanted a Chiefs of Staff directive embodying a general principle that ‘the collection of Intelligence in regard to the enemy and the safeguarding of the means of collecting this Intelligence in the future must have priority over other subversive activities’. But Menzies (as was his way), rather than seeking a ruling from supposed higher authority, accepted a solution offered by Claude Dansey to arbitrate between the two services on condition that both Chiefs gave him their ‘entire confidence’.

Dansey, who had the reputation of being a poor team player, set the position out in a clear-sighted and perhaps unexpectedly constructive memorandum to Menzies on 1 May 1941. ‘We have to face the fact’, he wrote, ‘that S.O.2 [SOE] lives and grows - at an astonishing rate - seemingly without any governing factor as far as finance goes, and that whether we like it or not they do become in a sense competitors,’ for example in the fields of communications, material and transport, and ‘above all’ in the limited supply of potential agents. ‘If we cannot kill [it], and I do not think we can let us for [the] sake of work and war effort try to live on & work on friendly terms. I for one counsel Collaboration.’ Menzies and Nelson accepted Dansey’s recommendation that the heads of the Geographical sections in both organisations should keep constantly in touch with each other to ‘settle questions to mutual satisfaction’, and any unresolvable differences should be referred to Dansey for a final decision. 36 Good relations between the two agencies were also assisted by Air Commodore Archie Boyle (the Air Ministry’s candidate for Chief of SIS in 1939) who was appointed SOE’s Director of Intelligence and Security in June 1941, a job he kept for the rest of the war. In September he and Dansey took charge of the circulation of all information from SIS to SOE. There is ample evidence in SIS files that Boyle was respected and trusted in SIS and got on particularly well with Menzies, Dansey and Vivian, and, importantly, that he was able to defuse numerous incipient conflicts. Some issues, including code-names for operations, seem to have been no problem at all. ‘Confirm that the Greek Alphabet, names of motor cars, names of precious stones, big game, fruit and colours are reserved for S.I.S.,’ Dansey was told in November 1941. ‘I have abandoned fruits for S.O.E. purposes . . . I understand that you will suggest to S.I.S. as additional categories, musicians and poets, and I shall therefore keep off them.’

But it was not all sweetness and light. Late in 1941 SOE proposed that the two services be jointly represented in West Africa under an SOE nominee. Menzies’s chief of staff, Rex Howard, did ‘not like the proposal at all’. SIS, he wrote, ‘is an established organisation whereas S.O.E. is of mushroom growth’. Although SIS officers headed joint representation in the USA and Malta, the converse certainly did not apply: ‘I consider the principle of allowing S.O.E. to be in charge of S.I.S. activities in any area would be wrong.’ There were also problems with communications, prompting a sharp minute on 8 December from Gambier-Parry, who felt ‘most strongly that we must face a complete show-down with S.O.E. that we either absolutely control their communications, including the manufacture and supply of equipment, training, preparation of operations . . . or we cut completely adrift and let them wallow in their own mire!’. Just before Christmas 1941 Dansey, citing the dispute over West Africa and accusing SOE of ‘a lack of good faith’, withdrew as arbitrator between the two services .37

Gambier-Parry returned to the fray in January 1942, complaining about SOE’s escalating demands for independent wireless communications. ‘It invariably comes back to the point’, he wrote, ‘where they envisage hundreds upon hundreds of agents equipped with wireless sets all over the face of the world, particularly of Europe.’ In February Gambier-Parry described SOE communications plans as ‘extravagant, insecure, fatuous and very dangerous’. In the end Menzies, perhaps happy to be rid of this particular poisoned chalice, agreed that SOE should broadly have charge of its own wireless communications. Nelson was clearly delighted, on 27 March sending Menzies a handwritten note along with his formal acceptance of the new arrangement: ‘Dear Stuart [sic]. Thank you so much!’ Other activities caused alarm in SIS, including ‘Pickaxe’ operations - whereby SOE planned to infiltrate Soviet agents into Western Europe. Menzies, who first learned of this in February 1942 only after Calthrop got hold of a leaked SOE report on the matter, emphatically reminded SOE that they were obliged to have prior Foreign Office clearance for such proposals and to consult SIS about them.

In February 1942 Hugh Dalton was replaced as Minister for Economic Warfare (with responsibility for SOE) by Lord Selborne, an altogether more emollient character. From the start Selborne was concerned about the friction between SOE and SIS and raised the matter with Anthony Eden (Foreign Secretary since December 1940), who had apparently been unaware of the problem. Selborne sent Eden a paper by Nelson in which he emphasised his own good personal relations with both Menzies and Dansey, but described SIS’s overall attitude as ‘to delay rather than to expedite the natural expansion of S.O.E.’. He suggested that whereas SIS initially saw SOE as a ‘rather ineffective and ridiculous collection of amateurs who might endanger S.I.S. if not kept quiet’, they now seemed to regard SOE ‘as dangerous rivals who, if not squashed quickly’, would ‘eventually squash them’. This was because ‘we have outstripped them in many directions and proved ourselves in many directions to be a more efficient organisation. It is nonetheless’, he added (with perhaps a hint of disingenuousness), ‘both foolish and deplorable since the last thing S.O.E. wants is to obstruct S.I.S. in the slightest degree.’ Selborne also consulted Gladwyn Jebb, who reinforced Nelson’s defence of SOE’s professionalism, suggested that SIS was over-addicted to the ‘false beard’ mentality, stressed the need for genuine two-way co-operation between the two organisations and proposed appointing ‘some impartial person of high standing’ to act as ‘Conciliator’.38

Selborne took this proposal to the Cabinet, but Menzies (as before) was firmly opposed to submitting SIS to any external arbitration. What was needed, he argued, was ‘a final act of priority, which must be accepted by both services’. He made it clear, however, that such a decision could really only go one way: ‘if it is decided that S.O.E. has priority, then it must be realised, without any equivocation, that information will suffer. If I have priority, I do not think it will necessarily interfere much with S.O.E.’ At the same time as Selborne was trying to get the Cabinet to adjudicate between SIS and SOE, the Chiefs of Staff came up with a proposal to amalgamate the two organisations, with a single executive head who would be under the ‘general direction’ of the Chiefs of Staff Committee, but with ‘provision for consultation’ with the Foreign Office. This was anathema to the Foreign Office where it was argued (with Menzies’s support) that differences could be smoothed out in a fortnightly meeting presided over by Sir Alexander Cadogan.39 The efforts here of both Selborne and the Chiefs of Staff echo the service ministries’ attempts during the First World War to prise control of SIS from the Foreign Office. War inevitably sharpened the tensions between the operational military and political information sides of secret service. This was powerfully exacerbated in the early 1940s by the existence of SOE, whose rapid growth and apparent ability to strike against the enemy - at a time when British military successes were especially welcome - tended to eclipse the quieter achievements (such as they were) of SIS.

Even so, in the Whitehall battle for independence and control, SIS and the Foreign Office were able to fend off the challenges of both the military and SOE. In fact, the absence of formal decisions about the precise relationship between SIS and SOE worked markedly to SIS’s advantage. The Cabinet never resolved the question and there was no ‘final act of priority’ such as Menzies had proposed. But the Foreign Office, in a typically effortless assumption of bureaucratic superiority, was able deftly to out manoeuvre attempts by less practised Whitehall warriors to change the status of SIS. Relations with SOE continued on a comparatively amicable basis even after Nelson, who resigned suffering from exhaustion in May 1942, was replaced by the more formal and assertive Charles Hambro. While tensions continued to trouble the relationship, there is evidence that in London at least a serious effort was made on both sides to work together.

When Hambro complained in July 1942 that the information flow from SIS to SOE was insufficient, Menzies demurred. ‘Your Regional Sections’, he wrote, ‘have, for some time past, been sending down officers about once a week to their opposite Sections here and . . . in some cases entire files have been placed at their disposal . . . I do not think under the circumstances any organisation could have behaved in a more generous way than we have.’ Although Menzies was (perhaps understandably) being more emphatic on this point than was absolutely necessary, Hambro backed off with quite good grace. Having consulted his people, he found they after all confirmed Menzies’s ‘impression of an improvement in the contacts between our respective Regional and Country Sections and’, he added, ‘I am most grateful to you and to the A.C.S.S. [Dansey]’.

Whatever the day-to-day relations between SIS and SOE, by the end of 1942 the Foreign Office had firmly resolved that there was no future for SOE after the war had ended. Essentially this was a further assertion of Foreign Office primacy. ‘My Secretary of State’, wrote Cadogan to Hambro on 22 December, ‘does not consider that there will be room for two secret British organisations in Europe once hostilities have ceased. Nor could he agree that after that date there should be any underground British organisation which is not responsible to the Foreign Secretary.’ Cadogan conceded that SOE might not ‘necessarily come to an abrupt end as soon as we sign an Armistice’, but, ‘as and when hostilities terminate in different parts of the world, any S.O.E. representatives who may remain in Government service should be transferred to the War Office if they are to perform any overt duties with the military’ or ‘to the S.I.S. if they are to perform underground work’. Although SOE was strenuously to resist this conclusion, so, in fact, it was to be.

Section VIII

During the difficult early years of the war, one area of undoubted SIS achievement was that of wireless communications. Much of the credit for this was due to CSC, the Controller Special Communications, Richard Gambier-Parry, who from early 1938 had built up a remarkable team (styling themselves ‘plumbers’) in his new Communications Section VIII. As is so often the case with committed technical experts, he was something of a monomaniac. Like Laurence Grand, he was a fertile source of ideas and also impatient with what he regarded as pettifogging administrative matters. But, unlike Grand, Gambier-Parry was crucially and manifestly able to convert his inspirations and imagination into practical achievements, so much so that during the war he was asked to take on a considerable amount of work for departments other than SIS. In 1940 Admiral Godfrey singled out Gambier-Parry’s section for particular praise and in January 1941 Sir David Petrie (later head of MI5) noted ‘the very efficient wireless installation maintained by M.I.6’.40 Beyond providing for SIS communications at home (for example between headquarters and outstations such as Bletchley Park) and abroad (both to foreign stations and individual agents), as well as those of SOE (to 1942) and various Allied governments-in-exile, Gambier-Parry became responsible for a dedicated secure communications network designed to carry SIS traffic (including the signals intelligence produced by GC&CS) to customer departments in government and the armed services, as well as both King George VI’s and the Prime Minister’s communications when they were abroad. On Petrie’s recommendation, in May 1941 he took on the Radio Security Service, previously run by the General Post Office under War Office and MI5 direction, which had been formed to intercept and collect foreign communications, as well as locating their source - providing some of the vital raw material for the GC&CS code-breakers. After the war, a GC&CS historian remarked that the transfer of the work to SIS ‘at last’ established it ‘on a durable basis’, and ensured ‘wholehearted technical support’.41 Gambier-Parry also set up and ran several transmitting stations for the propaganda output of the Ministry of Economic Warfare and the Political Warfare Executive, including what was called Freiheit (Freedom) Radio. Supporting all this was a research and development branch devoted to (among other things) producing robust and reliable wireless sets for use in the field, and a training school at Hans Place in London which processed over 600 operators.42

At the start of the war Section VIII, as a non-military organisation, suffered in terms of priority for equipment and personnel. There was also a security aspect, with questions being raised locally as to what the two hundred or so civilians based at Whaddon Hall were actually doing. In common with SIS itself, in July 1940 Section VIII acquired a military cover name and became known as No. 1 Special Signal Unit. Reflecting the difficulties of creating really good cover, the acronym SSU was quickly found to be less than satisfactory, as some inquisitive outsiders interpreted ‘SS’ as ‘Secret Service’. Others did not like the ‘SS’ echo of the hated German Schutzstaffel, and so in 1941 the designation was changed to SCU: Special Communication Unit.

In July 1941, a volcanic explosion from Gambier-Parry against the long-serving Service head of finance and administration, Commander Percy ‘Pay’ Sykes, not only illustrates the problems thrown up by Gambier-Parry’s rather buccaneering approach to record-keeping (along with his own combative temperament), but also perhaps gives a hint of the war-time strain under which the men were working. Sykes’s department had produced a highly critical audit of Section VIII for 1940-1, particularly pinpointing their inadequate paperwork. Gambier-Parry dismissed the report as ‘a mass of ill-informed, ill-construed, illogical innuendo’ with ‘a complete lack of conception of the wide issues at stake’, together with what he identified as ‘a bitter and underhand personal attack which is as unhelpful as it is fictitious’. With injured pride and withering sarcasm, he warmed to his theme:

No consideration at all is given to the fact that during this period our annual estimates rose from an original figure of £63,000 to £178,000 and we were working at the highest pressure, forming a military unit, equipping some 60 technical vehicles, putting up two Broadcasting stations and a recording centre, at a speed which many experts would consider impossible, carrying ever-increasing telegraphic traffic, developing the new science of agents communications, coping with S.O.2 communications, carrying an expanding circulation of J.Q. [Polish signals] at home and abroad, and endeavouring to contribute to the process of winning the war. But, then, these auditors wouldn’t want to know that we do any of these things. It seems to be of greater importance that one order has become entangled with another.

Sykes, although himself a stickler for correct office procedure, was only doing his job, and arguably a fastidious attention to detail was of particular importance in wartime when administration and expenditure could so easily get out of control. Yet the fact that Gambier-Parry’s outbursts (of which there were many) were tolerated, and he remained in charge of communications for the rest of the war and after, suggests that he was sufficiently good at his job for generous allowances to be made for his excitable temperament.

Headquarters changes

The increased tempo of SIS work in 1939-40 put pressure on the United Kingdom organisation and necessitated a reform of the existing headquarters. By late 1940 this was largely complete. Claude Dansey, back from Switzerland, was installed as Assistant CSS, effectively Menzies’s second-in-command, despite Vivian’s existing designation as Deputy CSS (which he tried without success to defend).43 Dansey took charge of two new sections, A and O. A Section, under Frank Foley (ex-head of the Berlin station and latterly in Norway), was charged with rebuilding networks in occupied Europe and had sub-sections for Scandinavia, Holland, Belgium and A.5, the Free French. O (for Operations) Section was headed by Commander Frank Slocum (a former regular naval officer who had served with the Grand Fleet in the First World War), whose job was to organise SIS’s sea and air communications.44

Valentine Vivian, meanwhile, ran the War Station at Bletchley Park, and handled counter-espionage (Section V), including liaison with MI5. The presence of Allied governments-in-exile and large numbers of foreign servicemen and refugees meant that a great deal of work which would normally have been ‘performed by M.I.6 in certain foreign countries’ (such as recruiting agents) was now ‘automatically transferred to the U.K.’, thus trespassing on MI5’s territory. In order to ‘interlock the functions of M.I.5 and M.I.6’, it was arranged in July 1940 that Section V should simultaneously be Section B.26 of MI5 and the SIS officers therein would communicate with the British police and civil authorities as if they were members of MI5.

SIS also made plans against the possibility of a German invasion of Britain itself. A new Section VII was set up which by July had begun to identify potential stay-behind agents. Working jointly with Vivian and David Boyle, Gambier-Parry trained and equipped six agents with wireless sets in Norfolk, Suffolk, Sussex, Somerset, Cornwall and Devon, deployed mobile signals units across home commands and successfully ran a war game code-named ‘Plan 333’. This had ‘produced good signalling and 76% deciphered messages’. The network was eventually extended to include twenty-four ‘head agents’ with wireless sets. Recruitment was specially restricted to ‘people who, by the nature of their occupation, could remain in enemy controlled territory and continue their normal occupations without arousing undue suspicion’, such as ‘doctors, dentists, chemists, bakers and small shopkeepers’, all of whose jobs required them ‘either to move around in the course of their professional duties or to receive many visits from other people’. As one of his last acts while head of Section D, Colonel Grand also recruited some eighty saboteurs and supplied them with secret dumps of equipment and devices. Finally, in case the worst came to the worst (and echoing similar arrangements being discussed for the royal family), plans were prepared to relocate a skeleton SIS headquarters to Canada.

Organising potential stay-behind communications was not just a technical matter, but also involved the human problems of recruiting suitable agents. This, in turn, revealed some extraordinary preconceptions. Towards the end of September 1940 the Director of Military Intelligence reported that ‘M.I.6’ - evidently Gambier-Parry - was very pessimistic about the possibilities in Iceland, the Faroes and Shetland as ‘ethnologically, the peoples of all these Islands are far too primitive and unintelligent to master even the simplest methods of handling W/T, and the introduction of alien inhabitants would, of course, attract attention at once’. The Orkneys, he conceded, ‘might conceivably be a trial worth making, but my Admiralty contacts give me little hope, even there, of finding the right man’.

There were further headquarters changes in 1942, partly in response to criticism from customer departments. In February 1942 it was agreed that each armed service Director of Intelligence would ‘appoint a senior officer’ to SIS to act as a Deputy Director, who would ‘work in close concert with a Deputy Director to be appointed by “C” from among his existing staff’. Each of these officers was to ‘represent the particular needs of his own Service director’, and together they would ‘formulate plans with a view to improving the S.I.S. Service material, under the direction of “C”’.45 Menzies implemented this with effect from 6 March, when Colonel John Cordeaux became Deputy Director/Navy, Colonel Edward Beddington DD/Army and Air Commodore Lionel ‘Lousy’ Payne DD/Air. The intention, as Cadogan recalled three years later, was that Claude Dansey, the Assistant Chief, would ‘sit in with them as a Foreign Office Deputy’, evidently to ensure that political intelligence requirements were not entirely neglected in the face of the service departments’ demands. In order both to keep Foreign Office representation in SIS and to help Menzies with his administrative burdens, Cadogan sent Patrick Reilly (who had been private secretary to Lord Selborne) to Broadway to be his personal assistant.46

The SIS headquarters reorganisation of March 1942, indicating the way in which

Claude Dansey (ACSS) sidelined his rival, Valentine Vivian (DCSS).

Each of these men had intelligence experience. ‘Bill’ Cordeaux, as he was known, a career Royal Marine and keen amateur footballer, had worked in the Naval Intelligence Division since 1938. Beddington was a wise old bird, an Old Etonian cavalryman who had served in Military Intelligence during the First World War and then pursued a successful business career, ending up in the 1930s as vice chairman of the United Africa Company (later part of Unilever). In September 1940 he had been brought out of retirement by the Chief of the Imperial General Staff, Sir John ‘Jack’ Dill, an old Staff College chum, to run MI3, responsible for military intelligence on Iberia, Italy and the Balkans. This he did until Dill’s successor, Sir Alan Brooke (‘Brookie’ to Beddington), asked him to take on the job at SIS.47 Between the wars Payne had intermittently worked in Air Intelligence, but in 1938, threatened with appointment as the Senior Air Staff Officer in Iraq, he had resigned and become air correspondent for the Daily Telegraph. Canvassing then for an intelligence job, he had approached Vernon Kell at MI5. Kell passed him on to SIS, who rejected him as ‘not thought suitable’, though conceding that he had a ‘good brain, which he is willing to use if given time’. He also had ‘some strange friends, but is often well informed, probably due to the fact that information is more readily obtained in bed’. At the start of the war, however, he had been taken back on to the intelligence strength at the Air Ministry.

The new appointees quickly set to work and by the start of April had sketched out proposals for a headquarters reorganisation. They began by stressing that if SIS’s ‘primary duty in war-time’ was ‘the obtaining (excluding intercepting) by clandestine methods information for the Fighting Services and the Foreign Office, then its present organisation needs reconsideration, particularly if it is also accepted that such information is chiefly of use where action can be taken’. They agreed that too much of SIS’s time and resources was taken up by work for the security Section V and the economic Section VI. They proposed reducing the latter to a liaison section and curtailing the work of Section V ‘to those aspects of C.E. [counter-espionage] work on which it is possible to take action at once or at some readily foreseeable future date, or which provides positive intelligence for S.I.S.’. Another important recommendation was that the Production Branch should be combined under the four Deputy Directors, who would constitute a board with Dansey in the chair. In order to take some of the pressure of work off Menzies they also proposed ‘the decentralisation of the work of S.I.S. to Vice “Cs” in Middle East, India, Africa other than N. Africa [and] America’. They also wisely (and perhaps with the hiatus of late 1939 in mind) suggested that Menzies should designate an officer as deputy ‘to act for you in the event of your illness, or in case of your death pending a fresh appointment’.

We can, perhaps, see the hand of Dansey in these proposals, which excluded his old adversary Valentine Vivian from the Board of Deputy Directors, likely to become the key executive body in the revamped structure. Yet since there is no evidence that Menzies made any specific decision about nominating a potential successor, Vivian (who was left in charge of liaison with MI5, the Ministry of Economic Warfare, GC&CS and ‘Eire’) may have been content with his continuing status as Deputy Chief. The rest of the recommendations were implemented at the beginning of May, with each of the Deputy Directors taking responsibility for specific geographical regions, as well as retaining their primary service liaison function. Although this appeared to be a sensible tidying up of the central SIS bureaucracy, some anomalies remained. Responsibility, for example, for links with the Vichy French (Section P.5, ‘special lines known to ACSS’, under Beddington) was kept separate from the Free French (in Section P.1 under Dansey). It also remains questionable whether combining responsibility for some elements of the production and for circulation of information in individual directors was necessarily a wise move. Moreover, giving responsibility for production matters to the three service Deputy Directors certainly undermined the original intention that ‘each officer would represent the particular needs of his own Service director’ within SIS.48

Indeed, as is so often the case, these outsiders brought into SIS appear to have fallen under the seductive spell of the Service and took to defending it against their home departments. Less than a month after his appointment, Payne, for example, wrote a long and thoughtful memorandum in which he ascribed the intelligence failures of May 1940 as much to the service ministries’ misinterpretation of information as to any deficiencies in SIS. ‘It is doubtful’, he wrote, ‘whether the Chiefs of Staff realise how many reports, which are of great value, come from S.I.S. agents.’ A week later, noting that SIS primarily circulated ‘undigested’ information (as the service ministries wanted), he expressed his ‘anxiety . . . to ensure that S.I.S. get the credit for accurate information they obtain, and do not get blamed for circulating, on a high level, agents’ reports which can be proved, or subsequently turn out, to be inaccurate’.


The war put tremendous pressure on SIS’s hitherto rather haphazard recruitment system. There was a very busy buyers’ market in which SIS had to compete with the armed services, SOE, GC&CS, governments-in-exile and various other analogous bodies, such as the Ministry of Economic Warfare, for the inevitably limited pool of suitable personnel. SIS was also under pressure to take on increased numbers of foreign nationals, many of whom had escaped occupied Europe and were mustard keen to get back and do their bit. But the security stakes were as high as ever and the Service had to be vigilant against enemy efforts to place their people within its ranks. When recruiting officers or agents, the usual procedure was for the name to be sent to MI5 for checking against their register of suspect persons. This was a negative vetting process, and the reply ‘No trace’ was generally regarded as sufficient. From the summer of 1940, however, when SIS began intensively to recruit from among those who had fled the Continent, Claude Dansey worried that there should be a more thorough investigation, if only because ‘every agent, no matter what his nationality and feelings, may be possessed of some information of importance to the enemy . . . A negative reply from M.I.5’, he instructed, ‘must not absolve officers from enquiring into the past and family history of all candidates under examination.’ From the following spring, a systematic look out for potential agents was kept at MI5’s Royal Victoria Patriotic Schools London Reception Centre in Wandsworth where aliens entering the United Kingdom were sent for processing. In April and May 1941 SIS’s spotter there reported that he had recruited twenty-eight agents and passed on five further names for special operations. The supply of candidates varied, however. In April he did not recommend anyone for A.3 (the Belgian Section), ‘as no Belgians were interesting, and very few arrived in the U.K.’.

SIS cast its net far and wide for recruits. In January 1941, for example, the New York station reported that a Frenchman about to be repatriated to France expected to return to employment with a shipping company at Le Havre where he ‘would be able to spy on their business to Paris, Marseilles, Toulon etc’. He also recommended a steward on the French transatlantic liner Normandie who was ‘extremely intelligent [with] unquestioned patriotism and hostile to present [French] regime’ and would ‘be able to travel about France on steamship company’s business which should afford him excellent cover’. The same month the Cairo station reported that a French engineer about to return home ‘felt unable to work as an agent in France for family reasons (and fear)’, but had recommended his brother-in-law, who ran a cheese factory in Lorraine. A Czech law student, who had been studying in France but had escaped, was interviewed in Bermuda in June 1942 and ‘gave the names of several of his student friends who are reliable de Gaullists . . . anxious to work for the Allies in France’. He stated that ‘many of the Czechs frequent a cafe at 59 rue de la Republique in Marseilles and that the Germans plant agents there who pretend to be loyal Czechs, thus catching several of them’. Some ‘notes on the recruiting of agents for France’ which London sent to New York in December 1943 illustrate the kinds of people SIS wished to employ, though the specification was a counsel of perfection. Agents, it affirmed, should be courageous, observant, meticulous, quick-witted, resourceful, persevering and self-confident. An individual’s ‘motives and integrity should be beyond doubt’ and ‘checked by reference to his past history and, where possible, by the testimony of persons who know him’. Men without dependants were preferred: ‘The fact that a man has a wife or children in France is a definite disadvantage. Experience has shown that they are a source of danger to him and that the enemy do not hesitate to use them as hostages.’

One example of how swift and informal the recruitment process could be (especially when the Service was responding to urgent wartime needs) is that of Commander Roy Kendall in December 1941. As a result of the Japanese offensive in South-East Asia which followed the attack on Pearl Harbor, there was suddenly a much heightened need for intelligence in the region. Kendall, a very experienced sailor who had been serving as Commodore of Convoys in the Channel and North Sea, was selected to be SIS representative in Australia ‘for the purpose of penetrating the Japanese Mandated Islands or other areas in the Pacific’. He was clearly well qualified for this. In the 1930s, based at Rabaul in New Britain, he had served as a master mariner in the Papua New Guinea inter-island trade. Although born in London, his family were in Australia. He had a ‘very good record there’ and was ‘vouched for’ by the Australian Director of Naval Intelligence. Asserting that these recommendations were ‘far better than anything M.I.5 can produce’, and that ‘the state of affairs in the Far East does not leave room for any red tape’, Section G.2 wanted to take on Kendall without further ado.

But a fastidious secretary in Personnel (as G.2 explained to her head of section) ‘was a little doubtful’ because this was ‘contrary to your orders’. Personnel had their way and the following day a ‘trace enquiry’ on Kendall was telephoned to MI5, who replied a day later that there was ‘nothing recorded against’. Even though the correct procedure was apparently followed, it was not much of a vetting process. Kendall had completed the standard application form (in use since 1938) on which the first entry was ‘Recommended by’, with space provided for the names and addresses of three referees. But Kendall filled in none of these. By mid-January 1942 his recruitment was complete: on 30 December he had signed the Official Secrets Act; on 8 January he had ‘seen the doctor’, and the following day he completed the ‘secrecy form’ relating to pay (‘Disclosure to any person of emoluments received, will lead to instant dismissal’).49 The security risks which accompanied the sometimes rather casual wartime checks were inevitably magnified when able recruits were taken on trust, a factor which enabled the Cambridge-educated Soviet spy Kim Philby to slip into the Service, initially to work in the Iberian branch of the counter-intelligence Section V in September 1941.

Naturally the Service was always on the lookout for suitable candidates and from time to time individuals with unusual specialist skills were recommended. In November 1942 an MI5 officer passed on to SIS a letter from Detective Superintendent Westland of the Aberdeen city police concerning a thirty-seven-year-old man called John Ramsay. Ramsay had been born in Scotland of Lithuanian parents named Ramensky, but had changed his surname at the start of the war. As Westland described him, Ramsay was a ‘clean living’ kind of man: he did not swear, smoke or drink and was ‘an excellent specimen of physical fitness’. But, more to the point, he was ‘the most neat and tidy safe breaker in Britain to-day . . . His safes are all opened by means of explosives and, from a professional point of view, to see them after he has finished the job is a treat in itself, because the work is so neatly done.’ Although Ramsay had twice been sentenced to five-year prison terms, the policeman went on to give him a remarkable character reference: ‘In spite of his convictions, I look on him as a real gentleman and a person who would not do a mean action nor commit a mean crime . . . Personally, I think he would make an excellent Commando.’ SIS looked into the possibility of employing Ramsay, but regretted that ‘owing to his knowing no other languages than Lithuanian and English, it does not appear possible for us to use him’. But they passed him on to the Commandos, who were glad to have him, and he eventually served in 34 Troop 30 Commando (the Special Engineering Unit, Military Section) with whom his safe-blowing skills were put to good use.50

By the end of 1942 SIS had endured a very testing sequence of trials by both battle and bureaucracy. The Service got its share of blame for the series of British setbacks, especially during 1940, which to a greater or lesser extent were suffered by all the armed forces. Above all, it was sharply criticised for not adequately meeting urgent and understandable demands for timely operational intelligence. The perceived need for action of some - any - sort, moreover, inspired the proponents of special operations and fuelled the growth of SOE, which became a sort of cuckoo in the clandestine agency nest. While Menzies was well aware of the importance of intelligence-gathering, and strove hard himself to defend it, he had fought in the trenches during the First World War and was also well aware that of itself intelligence is valueless. He made this clear in a Service circular of 10 November 1942 highlighting ‘the real reasons for the existence of S.I.S.’. In wartime, he wrote, ‘all Intelligence about the enemy, whether collected by secret means, or by open field Intelligence, should be based on the old dictum that “Intelligence is the mainspring of Action”’. It followed, therefore, ‘that S.I.S.’s prime function is to obtain information by secret means which may admit of or promote action . . . Information on which no action can be taken may be of interest, it may be useful for records or for the future, but it is of secondary importance.’ Remarking that ‘a definition of what constitutes “action” should not be necessary’, he nevertheless provided one: ‘It must in the ultimate resort spell a movement of operations which result in the death of one or more of enemy nationals, or the defeat of some of his projects.’ He concluded this manifesto with a reminder of the last war, about which there was some belief that it ended ‘because the enemy was defeated by means of the spoken, written word, or some other ancillary war activity’. This was not the case: ‘Germany was defeated because the German Armies were beaten,’ and it was clear that SIS would have failed in its primary function if it did not materially contribute to the defeat of German arms in this war in which they were currently engaged.

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