The emergence of SIS

In 1917 Mansfield Cumming famously remarked to Compton Mackenzie that after the war he should come to work with him in the Secret Service. He told him the business was ‘capital sport’ and ‘much more fun in peacetime than in war-time’.1 Perhaps so, and no doubt Cumming was not the only person during those sombre wartime days to hark nostalgically back to some idyllic prewar existence which, they hoped, might return in the future, but for the Secret Service the actuality of the transition from war to peace, and the troubled years which followed, was not much ‘fun’. As had been the case during the war, the independent existence of the Service was threatened, and, although the Foreign Office was confirmed as the Service’s parent department, relations between the diplomats and their clandestine colleagues were sometimes difficult, especially over the question of cover. Above all, for almost two decades financial stringency dominated the Service’s work and meant that it had to operate on a shoestring at a time when the new revolutionary regime in Soviet Russia appeared to pose a major threat, and, in the 1930s, when the rise of aggressive and ambitious governments in Italy, Germany and Japan further challenged Britain’s worldwide interests.

Postwar reorganisation schemes

With the end of the shooting war in 1918, Cumming had to face a more insidious, though less lethal, battle in Whitehall for the independent survival of his Bureau. Crucial (and enduring) issues relating to the nature and organisation of British secret intelligence were fiercely debated, and although Cumming ultimately achieved his aim of keeping Whitehall departments – especially the service ministries – at arm’s length and securing autonomy for what became known as the Secret Intelligence Service, during the early days of peace this outcome was by no means certain.

Three days after the Armistice, General William Thwaites, who had been George Macdonogh’s successor as Director of Military Intelligence for barely a month, proposed amalgamating Cumming’s and Kell’s organisations into a Special Intelligence Service under a single chief. He further proposed that a significant number of army, navy and air force officers should be seconded to the Service to avoid stagnation and a loss of touch with realities. Liaison between the new SIS and the armed service Directorates of Intelligence would be provided by the ‘formation of a joint naval, military and air intelligence section to consist of three or six officers from the three services’. Clearly envisaging a supervisory role for this section over the amalgamated Secret Service, Thwaites said that it ‘would consider and work out in conjunction with that Service any developments in its organization’. Writing to the Director of Naval Intelligence, Admiral Blinker Hall, Thwaites also proposed that ‘our two cryptographic branches’ (the War Office’s MI1(b) and the Admiralty’s Room 40) should ‘be amalgamated and placed under this section’.

Lord Hardinge, Permanent Under – Secretary at the Foreign Office, responded cautiously. ‘The present system’, he wrote on 25 November, ‘has had all the defects of every condominium; but it has worked, and all things considered has survived the test of four years of war with a fair measure of success.’ He agreed that ‘some change will be necessary’, but he felt that now was not the time. ‘It would’, he argued, ‘be premature to make any alteration until Peace is signed and we can see our way a little clearer.’ Hall, too, wanted to wait. ‘I should like more time to think it over,’ he told Thwaites. While he agreed that ‘amalgamation should eventually take place . . . at the present moment when all the Heads of the Government are full of peace resolutions and the coming [Peace] Conference’, he did not think that there was ‘much chance of putting a big scheme through successfully’. Cumming initially kept his opinion to himself. On 30 November Thwaites complained to him that he ‘had not replied to his Minute re amalgamation’, but (as Cumming noted in his diary), when he ‘asked my opinion on the scheme’, he ‘did not appear to give consideration to what I did say’. What he said would have been negative. An unsigned internal memorandum, ‘Personal for “C”’, on 15 November had dismissed Thwaites’s scheme on three grounds. First: ‘that the methods, personnel and venue for the two services are entirely different’ – counter-espionage work ‘is done in England . . . Espionage is conducted abroad.’ Second was ‘a practical consideration’, since it seemed ‘impossible that MI5 should continue as a strictly military organisation’. In peacetime its work ‘will be police work’; the Home Office would certainly be involved and ‘obviously the Home Office could not touch espionage’. The third argument was that the Foreign Office ‘must remain the only department that can be responsible for the espionage side of Secret Service’. As it ‘involves operations abroad, and though the F.O. will always disavow them, for that very reason (paradoxical as it may seem) they must have full cognisance of what is being done, and power to check it, so that at the very least they may know what they are to disavow’.

In January 1919 Cumming combined these points in a forcefully argued paper against the amalgamation proposal. Sensing that financial retrenchment was in the air, he smartly argued that the scheme appeared ‘to be far too extravagant and expensive for acceptance as a practical measure’. Whereas before the war the central Secret Service staff had ‘consisted of three persons’, the new proposal provided ‘for six or twelve officers for the Naval, Military and Air Services alone’. He reaffirmed the principle that the Chief of the Service ‘must be in supreme control’, and noted that the scheme dealt with the ‘Army, Navy and Air Service only’, ignoring ‘the Political and Economic Sections of my Bureau’, which, he asserted, would ‘become the most important of all and must be provided for on equal terms with the rest’. If this were done, the cost of the headquarters staff would ‘amount to almost as much as we were allowed for the whole of the Secret Service all over the world before the war’. Moving on to the offensive, he argued that Military Intelligence were not ‘in any sense competent to say what is required for S.S. in peace time. They have’, he declared, ‘no knowledge or experience of the matter at all and are competent only to say what the military requirements will be.’ While Cumming asserted that ‘S.S. should be separate and apart from other Government departments’, implicit in his paper (which appears to have been prepared for Hardinge) was the assumption that the Foreign Office should remain in charge of the Bureau.

Bitter wartime experience meant that Cumming wanted as little to do with the War Office as possible. During the war, he wrote, the War Office had ‘country by country destroyed my Organisation’. If an efficient secret service was to be built up ‘for the much more severe conditions of Peace’, it ‘must be kept clear of War Office interference or there will be no chance of securing efficiency or of maintaining the Secrecy which is an essential of its success or even of its continuance’. Cumming went on to complain about ‘the constant robbery’ of his staff during the war. It was ‘scarcely an exaggeration to say that whenever one of my men displayed unusual capacity he was taken away from me and I was left stranded’. He ‘earnestly’ begged to be allowed to ‘re-organise the S.S. for peace time without the interference of the Military authorities’. Harking back to the arrangement laid down by Sir Arthur Nicolson in November 1915, he asked that the departments concerned should merely inform him of their requirements ‘and leave him to carry them out free from their hindrance’. If, he concluded (and putting his own position on the line), he were not reasonably successful ‘then he should be discharged, but he should be given a fair chance to do his work’.

Inevitably, the debate about intelligence organisation was going to surface at ministerial level. In a general election in December 1918, the Prime Minister, David Lloyd George, widely regarded as ‘the man who won the war’, secured a landslide victory and a powerful new mandate for his coalition government. Ultimately, however, he depended for survival on Conservative and Unionist MPs, whose natural disposition towards financial orthodoxy, social conservatism and ‘small government’ limited the extent to which he could follow his own liberal and radical inclinations, especially on the domestic front. Beyond the negotiation of an international settlement at the Paris Peace Conference, which absorbed him for the first half of 1919, was the matter of domestic reconstruction. In Britain, as elsewhere in the world, attitudes to both issues were powerfully coloured by widespread fears of revolution, both at home and abroad. Not only had the Bolsheviks seized power in Russia (preaching, moreover, a gospel of international revolution), but the end of the war had seen the collapse of the Central Powers’ empires – Germany, Austria-Hungary and Turkey – as well as a wave of revolutionary unrest across the world. Even in the United Kingdom there were worrying portents. There was a sharp rise in industrial unrest (even among the police); revolutionary demonstrations occurred in ‘Red Clydeside’ and other industrial centres; in Dublin Irish republicans met in the first Dáil (parliament) and declared independence; and in army camps in Britain and abroad war-weary soldiers agitated mutinously for quicker demobilisation.2

In January 1919, within a week of his appointment as First Lord of the Admiralty, Walter Long (a senior Conservative politician) circulated a paper on the ‘Secret Service’. During the last year of the war, Long (who had been Colonial Secretary between 1916 and 1919) increasingly nursed concerns about Bolshevik, trade union and German-fomented subversion in Britain. He shared these with a friend, Basil Thomson, Assistant Commissioner of the Metropolitan Police and head of the Special Branch, whose remit was political crime. Thomson, an enthusiastic empire-builder who wanted to concentrate all domestic security work into a Directorate of Intelligence, in turn encouraged Long’s ideas for an expanded and co-ordinated domestic intelligence organisation which might combine Special Branch and MI5 (and clearly could be led by Thomson himself ).3Disturbed by ‘elements of unrest’, and manifestations of Bolshevism, Long told his Cabinet colleagues that ‘we must be vigilant, and, above all, have an efficient, well-paid Secret Service on the civil side’. His memorandum prompted one from the Home Secretary, Edward Shortt, who agreed ‘that the question of the Secret Service is of very great importance’ and worried about ‘serious attempts to disseminate Bolshevist doctrines in this country’. These were ‘exceedingly dangerous, requiring most careful watching and strong anti-Bolshevist propaganda’.4

While the primary concern of both ministers was domestic security, when the matter came before the Cabinet on 24 January, the discussion widened out to include the organisation of secret service in general. It was noted that, apart from the Home Office, several other departments had an interest, and Long stressed the need for some sort of co-ordinating authority. ‘The matter’, he insisted, ‘was of urgent importance in view of the danger of Bolshevism’, which he was ‘sure was on the increase.’ It was decided to set up a committee under the chairmanship of Lord Curzon to find out ‘what was being done at present by the Secret Service branches of the several Departments’ and ascertain ‘how that work could best be co-ordinated with a view to the necessary action being taken with the utmost promptitude’.5 Curzon, acting Foreign Secretary while Arthur Balfour was at the peace conference in Paris (and who was to succeed him at the end of October 1919), was a toweringly grand British imperial proconsul. As a former Viceroy of India and long-time observer of the ‘Great Game’ between Britain and Russia over influence in Central Asia, Curzon was likely to appreciate the critical importance of foreign intelligence.

Following the appointment of the committee (which, apart from Curzon, comprised Shortt, Long, Winston Churchill (Secretary of State for War) and Ian MacPherson (Chief Secretary for Ireland)), Cumming, evidently concerned about the position of his Bureau, went to see Long, who he noted had ‘confused “Secret Service” with Secret Police’, but felt he had been able to put him right on this, and wrote that he ‘appeared quite sound as regards my work’. He also saw Hardinge, who had prepared a ‘very satisfactory’ letter to Curzon embodying Cumming’s views on the matter. Hardinge was concerned, as he telegraphed to Curzon on 28 January, that if Curzon’s committee was going to discuss the ‘Foreign Secret Service’ (which was ‘quite distinct from [the] Home Office and Irish Office organisations’), the control hitherto exercised by the Foreign Office should be maintained.

Usefully describing the position of Cumming’s Bureau as it was in early 1919, and reiterating principles which underlay the Foreign Office’s relationship with SIS over its first forty years, in a letter of 7 February Hardinge impressed on Curzon that ‘the Secret Service run by the Foreign Office deals with foreign countries alone’. It had ‘nothing to do with information to be obtained in Great Britain, Ireland or the Colonies’, and it was ‘essential that the control of secret service operations in foreign countries should be in the hands of the Foreign Office’, which was ‘the only Government Department in a position to decide whether such operations may or may not conflict with the general foreign policy of H.M. Government, and to consider whether they may not create serious difficulties with foreign Governments if discovered’. This, he added, was ‘even more important in peace time than in war, for in war time acts are committed and measures taken in neutral countries that would hardly be tolerated in times of peace’. Foreign Office control, he wrote, was ‘secured by holding the purse strings’. Glossing over Cumming’s bitter opinions about his wartime relations with the service ministries, Hardinge asserted that the Foreign Office had kept in ‘the closest possible touch with the Directors of Naval and Military Intelligence’ and that during the war ‘the operations of the Secret Service, thanks to the most able co-operation of General Macdonogh and Admiral Hall’, had ‘been worked with very happy results’, and he believed ‘it may truly be said that its success has been second to none’. Hardinge finally put in a word on behalf of Cumming himself, whose work and duties were ‘exceedingly technical, requiring very special qualities which are not easy to find’. The Foreign Office had ‘been extremely fortunate in securing the services of the present Chief ’ who had now served ‘for nearly ten years’ and had ‘a unique experience of Secret Service both in peace and war’.

These representations had the intended effect, at least in delaying any decision about the future of Cumming’s organisation. When Curzon’s committee met, while it reviewed the recent history of covert intelligence work (mentioning in particular the success of the ‘Foreign Office service’ during the war), it focused mainly on domestic, civil intelligence, endorsing Long’s recommendation for an amalgamated Secret Service Department to be formed with Basil Thomson as head. This had more serious implications for Kell than for Cumming, as, despite the fact that MI5 remained responsible for counter-espionage and military security, Thomson’s expanding department threatened to take over any wider duties on the counter-subversion side. Cumming, for his part, managed to block any ambitions Thomson had to operate overseas, securing agreement that ‘all anti-Bolshevik work abroad’ would be his responsibility alone. As for ‘the military and naval branches of the secret service’, Curzon’s committee thought that the question of reorganisation should be left for consideration by the Committee of Imperial Defence (or some similar body) until after the peace treaty had been signed. While the committee thought ‘that it would be desirable to co-ordinate all intelligence for military purposes and to establish one organization which will serve alike the War Office, Admiralty and Air Force’, crucially, however, they suggested that it would ‘probably be found convenient to maintain the distinction between military and civil intelligence’, which appeared to leave the option open for Cumming’s ‘Foreign Office’ Bureau to continue as a separate entity.6

But the War Office snake was only scotched, not killed. Towards the end of February 1919 Cumming reported that the Director of Military Intelligence was ‘still firmly set upon the idea of amalgamation between my department and MI5’. Appalled by the prospect of combining domestic and foreign intelligence-gathering, Cumming deployed a fresh argument against the idea. Raising ‘the prospect of a Labour Government in the near future’ (a striking prediction, since at this stage Labour had fewer than seventy out of 700 MPs in the House of Commons and the first British Labour government was as yet five years away), and revealing a shrewd appreciation of how secret service matters might be interpreted by both politicians and the general public, he argued that this made it ‘necessary that the S. of S. for Foreign Affairs, with his hand on his heart, should be able to declare that the Secret Service has no connection with the control of labour unrest’. Since it had ‘been clearly proved that money from these strikes’ had been ‘supplied by Bolsheviks’, MI5 would inevitably ‘be connected with labour and Bolshevik troubles’. In April 1919 he prepared a further series of criticisms on specific aspects of the War Office amalgamation scheme. The proposal focused purely on military intelligence and entirely ignored ‘the important Sections which deal with Politics and Trade’; the Chief of the Secret Service would have ‘no authority whatever’; and, because they would all be seconded from the armed services, ‘his so-called staff would not be his subordinates but would owe allegiance to their respective chiefs’. Overall, he dismissed the scheme as ‘utterly unworkable from the points of view of Efficiency and Economy and most important of all - Secrecy’. For good measure, he also objected to the suggested name for the new agency: the Special Intelligence Service. ‘The Secret Service’, he wrote, ‘is a good enough title for my organisation and is the name of the Service I was appointed to command.’

Whatever his organisation was called, Cumming had not seen the last amalgamation scheme. Towards the end of 1919 Thwaites returned to the attack, enlisting the support of Commodore Hugh Sinclair (who had succeeded Blinker Hall as Director of Naval Intelligence in January 1919). This time the scheme was not to integrate the ‘Espionage and Counter Espionage Services’ but to join them ‘under one head’ and administer them as one Secret Intelligence Service. The head of this service would be superior to both Cumming and Kell, and would himself be answerable to a committee comprising the Permanent Under-Secretary at the Foreign Office and the three armed service Directors of Intelligence. Efficiency savings could be made by combining ‘administrative, secretarial, record, legal and technical services’, as well as ‘fusion of records’. While he had ‘an open mind on the subject’, Sinclair allowed himself to be associated with the proposal, and pressed Hardinge to override Cumming’s hitherto obstructive attitude. ‘I hope’, he urged, ‘you will see your way to order C—to explore the possibilities in close co-operation with K—.’

Cumming was no more enamoured of this scheme than the last. Writing to Hardinge’s private secretary, Nevile Bland (a man who was intermittently to play an important role in the development of SIS over the next twenty-five years), Cumming bluntly said that there were no further administrative economies to be made and ‘no records to fuse’, since ‘the C.E. [counter-espionage] service is not concerned with the obtaining of knowledge and information (if it is obeying the rules laid down)’. Above all he resented being superseded by any other individual. ‘Unless the authorities are dissatisfied with the present C.S.S.,’ he wrote, ‘some considerable gain ought to be indicated to make up for putting him under some unknown person who cannot have equal experience, and whose interference therefore will in all probability be prejudicial both to efficiency and economy, to say nothing of secrecy and safety.’ If Hardinge insisted, he would ‘of course, co-operate with Colonel Kell as suggested’, but he protested ‘against disclosing the details of my secret organisation to anyone’. He worried lest the scheme was merely a device to save MI5, arguing that ‘from the time Sir Basil Thomson was given charge of anti-Bolshevik and undesirable-alien control in this country the work of MI5 practically ceased’. These ‘persistent proposals’ were, he suggested, ‘intended to enable the very expensive staff of M.I.5 to find new spheres of activity in my office where they are not required. This’, he continued, ‘would be unwise and an unfair burden to me, and prejudicial to my staff who are highly trained and experienced.’ Cumming also hoped that Hardinge might ‘consider the proposals in the light of the position that would arise when the present C.S.S. retires’, after which ‘a determined effort would be made to put Colonel Kell into the position, to the prejudice of the present loyal and trained staff and the lasting detriment of the S.S. whose ten years experience would be entirely lost’. In a separate minute to Bland, Cumming observed that it was ‘the third scheme put forward since the Armistice’, each of which had been ‘aimed at diminishing the authority & command of the C.S.S.’, and he acidly commented that the proposed date for implementing the scheme – 1 April 1920 – ‘seems suitable’.

Various other intelligence reorganisation schemes circulated during 1920. One envisaged amalgamating ‘the S.S. with M.I.5 under the Assistant Commissioner of Police’ (Basil Thomson). Another proposed that ‘all British Governmental S.S. Organisations’, including Cumming’s and Kell’s departments, signals intelligence, Indian Political Intelligence and parts of the police Special Branch, as well as the ‘Post Office Officials concerned in the examination of correspondence’, should be ‘placed under one executive Chief ’. In the end, departmental interests (it was never likely that the Foreign Office would willingly relinquish control of Cumming’s Bureau) and personal factors (Basil Thomson, for example, was widely regarded as being dangerously over-mighty), together with the clear practical difficulties of imposing any significant reorganisation, meant that nothing much was done.

For Cumming, meanwhile, the debate prompted him to think hard about the purpose of his organisation and, drawing on his ten years’ experience, in early 1920 he noted down some thoughts about ‘the essentials of the Secret Service’. The ‘first, last and most necessary essential of a S.S.’, he wrote, ‘is that it should be SECRET’. This, he lamented, ‘is the first thing to be forgotten in any scheme and the last thing to be remembered in putting it into practice’. The second essential was that ‘the S.S. at home must be small and self-contained and its personnel must be independent of any control other than that of its Chief. No one should have power to take away his trained staff or to give them orders.’ The third requirement was the reiteration of Nicolson’s minute of November 1915 confirming the functional autonomy of the Chief of the Secret Service, and giving him sole control of ‘all espionage and Counter-espionage agents abroad’. While he would be independent of the War Office and the Admiralty, he would ‘keep in constant touch’ with those departments, who would ‘inform him of their requirements as occasion demands and furnish him with criticisms of his reports in a manner to help towards their improvement where necessary’. Finally, the ‘C.S.S.’ would provide a monthly financial report to the Permanent Under-Secretary at the Foreign Office, and would be subject to his sole control ‘in all matters connected with the expenditure of Secret Service funds’. In a supplementary paper, clearly reflecting on his recent wartime experience, Cumming allowed that the Service should be organised in peacetime so that the personnel and records in any particular district could be handed over ‘complete as a going concern’ when that area fell ‘within the zone of Military operations’. Nevertheless, ‘in Neutral countries or Allied countries not in a fighting zone, the S.S. should be left to do its work without interference’.

By the end of 1920 Cumming had secured – at least in the medium term – the survival of the Secret Service as an autonomous department under the Foreign Office. Briefing Sir Eyre Crowe about his work on 17 October, just before Crowe succeeded Hardinge as Permanent Under-Secretary, Cumming assured him that, ‘in the accepted meaning of the words Secret Service’, there was ‘no such thing in this country’. He maintained that ‘we have never practised any of the black arts usually ascribed to S.S. and which have been adopted elsewhere’, and he asserted the value of his organisation for the Foreign Office. It dealt, he said, ‘with classes of society which the Embassies cannot touch’, and the Service’s reports represented ‘a valuable supplement to those obtained from official sources’, as well as ‘the main source of information of the great social conspiracies which are rife throughout the world’. Although there is no hint of it in Cumming’s diary, Crowe’s initial response to the reports he received from the Secret Service was not at all favourable. In a note to his private secretary, Nevile Bland, who was evidently away from the office, Crowe complained that he was ‘snowed under! Also daily irritated by your S.S. reports, which are a mass of rubbishy tittle tattle. It is a scandal that I should be required to read such stuff!’7

Cumming, nevertheless, evidently found an ally in Crowe, who early in 1921 moved to clarify the close relationship of the Foreign Office with the Service. For some time reports from Cumming’s Bureau had been handled by the Political Intelligence Department (PID) of the Foreign Office, which had been established in March 1918. As part of a general departmental reorganisation (and in response to expenditure cuts), however, Crowe abolished it in late 1920. In January 1921, concerned that political information was being requested by (and supplied to) the War Office, liaison between the Secret Service and the Foreign Office was formalised on two levels. It was decided that, in countries where there were Service representatives, a senior member of each British diplomatic mission ‘should be appointed to confer regularly with the chief representative of the Secret Service’ in that country, who would supply him with ‘all political reports obtained by him and his agents’. At the London end, the Secret Service would no longer copy and distribute substantially raw intelligence reports, ‘approximately in the form in which they are received’, but daily summaries would be prepared, to which ‘reports of special interest should be attached’. These would be sent ‘only to the Foreign Office and Sir B. Thomson’. It was decided that the War Office and Admiralty (which would continue to receive specific technical information) would henceforward not be supplied directly with political reports. They ‘should be informed of as much as is necessary of the revised arrangements, and told that such political information as may concern them will in future be supplied from the Foreign Office’. As Cumming recorded in his diary, Sir Robert Nathan, who headed the Political Section V, was to be the Service’s ‘liaison officer with the Heads of Depts of the F.O. & to have access to them’. He would ‘summarise the reports and send in a daily [later altered to ‘periodic’] epitome’.

These decisions in January 1921, which clearly positioned the Secret Service closer to the Foreign Office than to any other government department, as a corollary distanced it from the service ministries. They reflected the new, peacetime situation, and an understanding that political intelligence was now especially at a premium. A February 1921 Foreign Office circular to diplomatic missions in Europe claimed that ‘to-day the old type of Secret Service’ had disappeared and ‘melodrama has given place to a more sober style of enquiry from which the diplomat need no longer, as he was very properly required to do before, withdraw the hem of his garment’. Intelligence was now ‘largely concerned with subterranean revolutionary movements and individuals’, and ‘instead of spying on the military defences of individual countries’, it devoted itself ‘principally to detecting tendencies subversive of the established order of things, irrespective of whether these are directed against the United Kingdom or are International in character’. Be that as it may, a parallel Secret Service circular in March 1921 to representatives abroad, which summarised the enhanced liaison arrangements with embassies and legations (and pointed out that the very existence of the ‘branch’ might ‘depend on your usefulness’ to the minister), also indicated that the collection of intelligence for the armed services remained a Service responsibility. ‘For the present,’ it instructed, ‘your reports on Naval and Military matters will be dealt with by you as heretofore.’

Finance and economy

Running parallel to the various reorganisation schemes was the constant pressure to reduce spending which Cumming’s Bureau shared with every British government department during the years following the First World War. Yet alongside the demands for economy were continuing high expectations of what the Secret Service Bureau might still do. Typical of this was a meeting at the Foreign Office on 28 December 1918 at which Lord Hardinge told Cumming he could continue ‘our organisation in Russia @ £3000+ [a] month until 31st March’, while also agreeing to Cumming ‘going ahead & arranging for a Peace[time] S.S. on the basis of £30,000 a year’. On New Year’s Eve 1918 he held a meeting at Head Office on the ‘question of cutting down organisations’. This was followed by an interview with the Director of Military Intelligence who ‘asked what we were doing in the way of increasing our organ[isatio]n in Germany [emphasis added]’. Cumming presented Thwaites with ‘a draft Peace Estimate showing a budget of £2000 for Germany & Austria, but he told me we should require £30,000 for these countries alone & that he would fight for this amount’.

In fact, the unsettled conditions across the postwar world intensified demands for good intelligence. On 7 April 1919 a conference called by Hardinge of Cumming, Kell and the Directors of Military and Naval Intelligence agreed to ask the Treasury for a ‘special allowance of £18,000 a month’ for Cumming’s ‘War Office’ work, which, ‘with his normal annual expenditure of £30,000, would bring the cost of his branch alone to approximately £250,000 for the year’. By contrast Kell needed only £60,000. Reporting on a visit to London the same month to discuss the future of the New York organisation, William Wiseman wrote to his colleague Norman Thwaites that, although Cumming had ‘been reduced financially to a peace basis’, the Foreign Office ‘was already beginning to find this is an impracticable position’. Information was being requested ‘by various departments as to enemy activity in all parts of the world, and the authorities are realising that a good Intelligence service is more than ever necessary at the present juncture’. In May 1919 Cumming told Compton Mackenzie that ‘far from closing down – as we thought we should have to do after the war – we are actually expanding, and we have any amount of work to do in the immediate future’.8

In mid-1919 Cumming and his colleagues began work on a scheme to use the Military Control Organisation both as a means of providing cover for intelligence work and as a source of income. During May it was proposed to give Cumming’s Military Control Officers in foreign countries the status of vice consuls and allocate responsibility to Cumming for the ‘Anti-Bolshevik’ Secret Service (providing reports for Basil Thomson) as well as ‘Passport Control’. It was calculated that the cost of these two functions of some £75,000 a year could be met by ‘a 5/- [25 pence] rate’ (presumably for each visa issued).9 In September the arrangements were hammered out between Cumming and Lord Curzon’s private secretary, Ronald Campbell. Cumming promised Campbell that ‘all political reports sent home by my P.C. man’ would ‘go through the Minister’ and that ‘my man should not deal directly with agents’, thus reassuring Campbell that there would be no risk of the regular diplomats being mixed up directly with ‘secret service work’. Cumming secured an agreement from Campbell that reports could be cabled back to London ‘over the Minister’s signature’, thus giving them privileged protection over the public cable or mail. It was settled that Cumming’s representatives would be given the title of Passport Control Officer and Major Herbert Spencer from Cumming’s staff was appointed first Director of Passport Control Department.

The vital financial contribution which Passport Control made to Cumming’s organisation is illustrated by a set of accounts he drew up at the end of October 1919. This detailed twenty-four officers and twenty-five clerical and support staff at Head Office, along with five officers under Major Spencer running the Passport Control section. Abroad there were thirty Passport Control Offices, most of which had only two or three staff, and a total overseas staff of some eighty or so. Of his total expenditure of £295,256 (some £9.7 million in current terms), £235,700 was devoted to ‘S.S.’, of which £45,500 was ‘PC SS’, presumably the anti-Bolshevik reporting conducted for Basil Thomson. Passport Control itself cost £56,690 and the remaining £2,866 was for unspecified ‘A. B.’ (Anti-Bolshevik) work of some sort. On the revenue side, £132,000 was ascribed to the Secret Service Vote; £5,000 to the ‘P.I.D.’ (the Foreign Office’s Political Intelligence Department); £56,690 for overt Passport Control work (balancing the equivalent sum on the expenditure side); and £103,700 for ‘PC SS’. There are three significant features of these accounts. First, Cumming’s core overseas office costs, amounting to nearly £57,000 a year, were covered by the Passport Control budget. Second, a substantial proportion (35 per cent) of his income (the proportion not covered by the Secret Service Vote – passed annually by parliament – and the PID money) came from apparently unattributable (and unexplained) ‘PC SS’ sources. Third, the £58,200 surplus of this income over ‘PC SS’ expenditure appears to have been available to fund secret service work generally.

The cross – subsidy from the Passport Control Organisation was to remain an important component of Secret Service funding throughout the interwar years. Among other advantages, it could help ease pressure on the Secret Service Vote, the single most public acknowledgement of British covert intelligence work, and which both ministers and officials felt could be a hostage to fortune for critics of the security and intelligence services.10 Fears in the autumn of 1918 that parliament might not ‘continue to vote an adequate sum for Secret Services after the war, more especially if a Labour Government comes into power’, led to the remarkable suggestion that ‘a capital sum, say of £1,000,000, should be invested in War Loan in the name of trustees, and the interest used for maintaining the [Secret] Services’. This idea of providing an endowment so that secret agencies would no longer be dependent on (or accountable to) parliament found its way into the February 1919 Secret Service Committee report, where the suggestion was commended ‘to the favourable consideration of the Treasury and the Cabinet’.11

But the real challenge to the postwar intelligence community came less from critical Labour politicians than from the Prime Minister and the Chancellor of the Exchequer urging retrenchment. British public finances were further affected by a sharp decline in the country’s economic situation. From the winter of 1919-20, inflation, pay cuts, a fall in industrial production and rising unemployment came to dominate the scene and reinforced the pressure for government spending cuts. On his return from Paris after the Treaty of Versailles had been signed with Germany on 28 June 1919, Lloyd George initiated a wide-ranging review of government policy, telling the Cabinet on 5 August that scarce resources had to be diverted away from military spending and towards social and industrial reconstruction. British forces, he observed, ‘had destroyed the only enemy we had in Europe’, but if the country now ‘maintained a larger Army and Navy and Air Force than we had before we entered the War, people would say, either that the War had been a failure, or that we were making provision to fight an imaginary foe’. The consequent reassessment of national priorities led to massive budget cuts for the armed services and the definition of the famous ‘ten-year rule’, by which the service ministries in framing their estimates were to assume that ‘the British Empire will not be engaged in any great war during the next ten years’.12

Cumming was well aware of the economic realities. As early as 8 March 1919 he reported that he had reduced his ‘expenditure from the £80,000 at the time of the Armistice to £40,000 a month’. Lord Hardinge responded by noting that the Treasury ‘will press strongly for a stringent retrenchment’ and that Cumming would have to budget for a figure of £60,000 a year. In July 1919 Lord Drogheda of the Foreign Office told Cumming of Lord Curzon’s opinion that ‘he considered S.S. a luxury we could not afford in the present state of our finances as it did not produce value for the money spent on it’. During the second half of 1919 Cumming continued to economise. A meeting in mid-August discussed the reduction of staff ‘to post war limits’; the closure of the Head Office ‘from noon Sats to 10 Mondays’; and the acquisition of new premises. Removal to a new location was desirable both to save money and for security reasons. Cumming was certain that, following the experience of the war which had ‘resulted in the existence of the office and its activities being known to hundreds’, it would be impossible to ‘maintain any semblance of secrecy’ about Whitehall Court, and he obtained Lord Hardinge’s approval to ‘take a small house on a lease’ for his main headquarters building.

Cumming acquired a substantial Victorian villa, West House, at 1 Melbury Road in Holland Park in west London, whither headquarters moved on 23 December 1919. This was some distance from Whitehall, but evidently security considerations were uppermost. ‘No one to know of address,’ wrote Cumming in his diary and he even considered (perhaps a bit maliciously) not revealing it to the Director of Military Intelligence. A letter to an individual summoned to Melbury Road shows that the information was too secret to be put on paper. The individual concerned was to report to 1 Adam Street (off the Strand) where he would be given the Head Office address. ‘It is about half an hours underground ride . . . [on] the other side of London,’ he was told, ‘but as we do not make the address public I am afraid this is the only way I can tell it to you.’ In another move to enhance secrecy, Cumming asked that his staff ‘whose salaries were paid out of S.S. funds could have them paid free of Income Tax . . . It was’, he wrote, ‘undesirable that their names & connection with S.S. should be known to anyone.’ This privilege, agreed to by the Foreign Office, was jealously guarded by the Service for decades to come.

The pressure for economy was relentless. At the beginning of 1920 Nevile Bland told Cumming that the Chancellor of the Exchequer had asked for his estimate to ‘be reduced to half!’. In February Bland revealed that the Secret Service’s income ‘should be cut down to £65,000’. On 2 March Cumming learned that Hardinge had confirmed the £65,000 figure, but had added that ‘the matter was to be put up to the Cabinet’. On the plus side, Hardinge was to raise Passport Control fees by 50 per cent, ‘thus providing a good income’. A fortnight later Bland confirmed to Cumming ‘categorically’ that ‘Passport Control with its cover & funds were an integral part of our financial scheme’, which was just as well as Robert Nathan calculated that, without it, the Service would ‘require an additional £100,000’.

The proposed budget cut to £65,000 greatly alarmed Winston Churchill, the Secretary of State for War, who protested about it to his senior Cabinet colleagues. ‘With the world in its present condition of extreme unrest and changing friendships and antagonisms, and with our greatly reduced and weak military forces,’ he argued, ‘it is more than ever vital for us to have good and timely information.’ Setting up a Secret Service organisation was a slow business; ‘five or ten years’ were ‘required to create a good system’, which could be ‘swept away by a stroke of the pen’. It would, he wrote, ‘be an act of the utmost imprudence to cripple our arrangements at the present most critical time’. Churchill circulated a table prepared by Cumming showing proposed expenditure both under the original 1920-1 estimate of £125,000 and under the new estimate of £65,000. In each case allocations of £15,000 for ‘Headquarters’, £1,000 for ‘Technical’ and £10,000 for ‘Contingent’ remained the same, but in the reduced scheme there were deep cuts abroad. The stations in Vladivostok, Prague, Warsaw, Italy, Spain and Portugal were abolished (saving £7,000), and £4,000 earmarked ‘for the inauguration of a service of information from Berlin, Munich and Hamburg’ was cut. Spending reductions elsewhere, however, suggested a slightly greater emphasis on work against Germany than Russia. ‘Helsingfors (for North Russia)’ was cut from £20,000 to £8,000, and ‘Holland (for Germany &c)’ from £30,000 to £18,000. Representation at a reduced level was maintained for Switzerland (£3,000); ‘Vienna and Prague’ (£2,000); and Copenhagen, South Russia and France (£1,000 each). The USA was reduced from £9,000 to £4,000; but the biggest cut of all was the Far East, from £15,000 to £1,000.13

The bleak prospect presented by Cumming’s £65,000 scheme (as well as Churchill’s powerful support) had the desired effect. Cumming kept his budget of £125,000 and on 24 March Hardinge told him that he could withdraw the notices closing down stations. But it was just a stay of execution. The following spring, Otto Niemeyer of the Treasury thought a total Secret Service vote for 1921-2 (of which Cumming’s organisation formed just a part) ‘of £475,000 against this year’s £400,000 . . . and a pre-war £50,000 does not look at all pretty’. Believing that this ‘would arouse determined opposition’ in the House of Commons ‘and a demand for details which it would be most undesirable to grant’, the Treasury again wanted significant reductions. A high-level official committee, chaired by Sir Warren Fisher (Permanent Secretary to the Treasury and Head of the Home Civil Service) and comprising Sir Eyre Crowe (Foreign Office) and Sir Maurice Hankey (Cabinet Secretary), was appointed by the Cabinet to make recommendations ‘for reducing expenditure and avoiding overlapping’. Nevile Bland was appointed secretary. ‘He is’, wrote Crowe, ‘the only person besides myself who is acquainted with each of the three main subheads of “Foreign Secret Service”’ (‘Foreign Intelligence’, ‘Contre-Espionage’ and ‘Miscellaneous’).14

During May and June 1921 this powerful triumvirate painstakingly investigated the whole range of British Secret Service and its cost. The total Secret Service Vote was divided between different departments, of which the largest allocations went to the Foreign Office (£185,000), the Irish government (£160,000) and the War Office (£90,000). Crowe told the committee that £126,000 of the Foreign Office’s £185,000 ‘was needed for C’, £31,000 ‘for the requirements of M.I.5’ and £28,000 for ‘Foreign Office purposes’. Illustrating the rather miscellaneous nature of Secret Service spending, this £28,000 included £5,000 ‘for propaganda’, £10,000 ‘for contingencies’ and ‘a considerable [though unspecified] allocation to His Majesty’s Legation at Tehran’. Crowe told the committee that Cumming’s ‘espionage service’ provided information ‘for the naval, military and air authorities, as well as the Foreign Office, India Office and Sir Basil Thomson’. After he explained that the Foreign Office ‘would be content with a considerable [sic] smaller volume of Foreign secret intelligence than that received at present, provided that certain features such as Asia Minor and the Caucasus, Bolshevism, and the activities of the German Socialist Party were still adequately covered’, the committee wondered if some contraction in the War Office demands for information might provide a basis for ‘a reduction of the £126,000 allocated to C’. By the time the committee subsequently interviewed Cumming, the War Office had said that while they particularly needed military information on Germany, Russia, Japan, the USA and Turkey, they were prepared to do without it from other countries. Cumming himself thought that with these reductions he could ‘effect savings’ bringing down his estimate to some £87,500.15

The 1921 Secret Service Committee reported favourably on the work of Cumming’s organisation, finding little or no overlap between it and other branches. They noted the importance of the Passport Control system for its funding and that ‘by prevailing upon the military authorities to moderate their demands’ the estimate could be reduced to ‘£100,000, with hope of a further substantial drop next year’. Across the board, however, they could find little scope for ‘the actual saving of money’, but by transferring as many charges as possible from the Secret Vote to ‘public accounts’, they were able to propose a reduction of over £100,000 in the overall Secret Vote. For Vernon Kell, the report was a great relief. At first the committee had been ‘sceptical as to the necessity at the present juncture of maintaining a counter-espionage organisation’, but, advised ‘that the agents of at least four Powers are already showing activity in this country’ and, alerted to ‘the new factor of bolshevism in the navy and army’, the committee concluded that there was ‘justification for the continuance of M.I.5’, albeit with a reduced budget. For Basil Thomson the outcome was not so good. The committee suggested that his Directorate of Intelligence should lose its independent existence and be incorporated into ‘the general organisation of the Metropolitan Police’. Facing sharp criticism from his titular superior, the Commissioner of the Metropolitan Police, and having lost the confidence of the Prime Minister, Thomson was forced out of office. ‘I did not resign,’ he told his friend Hugh Sinclair, the Director of Naval Intelligence, ‘but was the victim of the usual intrigue with which I[ntelligence] O[fficer]s are familiar.’16

Cumming’s organisation faced further pressure for economies in the next financial year. At the beginning of 1922 the Treasury proposed cutting his budget to £65,000 for 1922-3, rehearsing a familiar series of arguments against the necessity for a continued high level of Secret Service expenditure. All government departments were being required to economise and ‘on general grounds’ it was ‘essential that economies should be effected on Secret Service as on other Services’. Bearing this in mind, it was ‘not reasonable to ask that every risk should be guarded against’. It was equally unreasonable ‘to maintain 3½ years after the Armistice an organisation far more elaborate than was found sufficient in pre-war days’. Finally, the increasing difficulty was noted of defending in parliament ‘the present large provision for Secret Service’, as well as the ‘considerable danger that if reductions cannot be made the House will press for details of expenditure, and thus make it exceedingly difficult for Departments to preserve the necessary secrecy for such work’.17 The Secretary of State for War, Sir Laming Worthington-Evans (who had succeeded Churchill in February 1921), sprang to the defence of ‘S.I.S.’. Even before the proposed cut it had not been ‘possible to maintain a S.I.S. service in all countries’; though ‘war no longer exists the situations all over the world are so complex that greater vigilance on the part of S.I.S. is required than in 1914’; and if the grant were reduced to £65,000, it would mean ‘that the whole of the system will have to be re-cast’ and ‘the spade work already put in will be completely lost and the money previously spent on it thus wasted’. Worthington-Evans estimated that ‘to produce the military and political information demanded’ SIS would need a total of £150,000, comprising the £125,000 he asserted it had actually received in 1921-2, plus £25,000 due to the absorption of work previously done by Army Intelligence in Constantinople, Egypt and Germany. His figures were in fact an overestimate, since the entire Foreign Office portion of the Secret Service Vote had been £125,000, of which Cumming had been advanced £100,000.18

Deciding that total secret service spending should be just £200,000, the Cabinet once again asked Fisher, Crowe and Hankey to look into the matter. With the continual struggle for funding since the end of the war understandably beginning to take its toll, at their first meeting Crowe stressed ‘the disadvantages of the present hand-to-mouth arrangements’. The ‘absolute uncertainty prevailing from year to year as to future Secret Service votes made it impossible to offer any security of tenure to agents so that the better class of man fought shy of taking service in this capacity’. His colleagues agreed in principle that ‘some guarantee of permanency’ was required, but conceded that this was a matter for the Cabinet to decide. Nevile Bland (again serving as secretary) drew up budget projections for Cumming’s organisation on a £65,000, £85,000 and £150,000 basis. When quizzed on these, Cumming said that at the £65,000 level ‘two agents paid from Headquarters would have to be dismissed, and the Political section would be abolished’. Cumming was accompanied by Colonel Stewart Menzies, who provided liaison between the Secret Service and the War Office. Employing a careful double negative Menzies conceded that ‘the £85,000 basis would probably be not unsatisfactory’, though it would leave coverage stretched in the Near and Middle East, as well as the USA. Depending on reductions in other parts of the secret service estimate (for example from the Irish and Home Offices, the former as a result of the Anglo-Irish agreement of December 1921 bringing an end to the Irish War of Independence), the committee thought that £5,000 extra could be found for Cumming.19

At the beginning of April 1922, the committee reported to the Cabinet that one of their objects had been ‘to augment so far as might be requisite the sum designated to foreign intelligence’ (emphasis added). This was a remarkable assertion, in sharp contrast to the unvarying demands for reductions which had dominated the debate about finance since the end of the war. Naturally, the reduced overall figure of £200,000 was sacrosanct, but, with savings from other budgets, the committee suggested that Cumming be given £90,000 for the year 1922-3. They were ‘satisfied that for £90,000 a foreign intelligence organisation’ could be provided which, ‘while necessarily of a less elaborate character’, would cover all the essential countries and would ‘involve neither the abandonment, nor unduly drastic curtailment, of any essential services’.20 While financial stringency was to continue to affect the Service and its work in the 1920s and 1930s, the deep spending cuts of 1919-22 were not repeated. Indeed, in the mid-1920s, although overall secret service expenditure declined, the Foreign Office share saw a modest increase.21 The report of Sir Warren Fisher’s committee in the spring of 1922 marked an important moment for the survival of the Secret Intelligence Service, for, underpinning the committee’s reversal – albeit modest – of the budget reductions which had applied unremittingly since the end of the war, there was an acceptance of Cumming’s organisation as an important and autonomous government agency devoted to the clandestine collection of foreign information.

Staffing and structure

The establishment of a more or less settled budget not only confirmed the institutional value of the Secret Service to the government, but also reflected the fact that the immediate threat to its independent existence had passed. The replacement as Prime Minister of Lloyd George by Andrew Bonar Law, who headed a majority Conservative administration after winning a general election in November 1922, also reduced the likelihood (for the meantime) of any major change to the government’s overall security and intelligence organisation. Cumming himself must take much of the credit for successfully steering his organisation through the choppy waters of the Great War and the troubled years that followed. One measure of his achievement is a comprehensive appreciation of the Service, describing its function, its relations with other government departments and its ‘internal organisation’, which would have scarcely been possible to produce while the Bureau had been under continuous pressure, its future and even perhaps its very existence uncertain. The review was apparently prepared some time between the fall of Lloyd George’s government on 23 October 1922 (which is mentioned in the text) and Cumming’s death on 14 June 1923 (for the document has marginal annotations by him). One comment concerned the title of the organisation. The appreciation began with the statement: ‘The S.I.S. (Special Intelligence Service) is the offspring and successor of the pre-war “Secret Service”, developed and altered to suit post-war conditions . . . Both the name S.I.S.’, it stated, ‘and the definition of that Service’s functions, which date from 1919, are self invented.’ ‘This is not correct,’ noted Cumming in his characteristic green ink. ‘My appointment in 1909 was “Chief of the Secret Service” & I have always been so styled in official papers. I have never authorised any change in my title.’ By late 1922, although the name ‘MI1(c)’ was still widely employed (and was used right up to the beginning of the Second World War), ‘SIS’ had also been employed for some time. In February 1920 a report from Geneva about Bolshevik conspirators was marked as being circulated from ‘S.I.S.’. (A report in the same file, circulated the previous month, was marked ‘M.I.1.c’, suggesting that there might have been a change in practice at this time.) The abbreviation also occurred abroad. An intelligence summary from ‘S.I.S. (Constantinople Branch)’, for example, appears on a document from December 1920.22 But whether ‘S.I.S.’ stood for Special or SecretIntelligence Service is not clear, though Cumming’s evident irritation with the former (first expressed in April 1919) might suggest both that ‘Special’ was quite commonly used and that ‘Secret’ might therefore have been more readily adopted by colleagues and subordinates. Although the title Secret Intelligence Service was suggested for the amalgamated intelligence organisation proposed by the War Office at the end of 1919, there is no evidence of it being used generally at that time.

The SIS appreciation defined the term ‘Secret Service’ as ‘the gathering of information by means of individuals secretly paid for the purpose, that is to say, through “spies”’. But the anonymous writer went on to complain that ‘the words “spy” and “secret service” have acquired a limited and unpleasant meaning through public misconception due to sensational literature’, and that the terms ‘agent’ and ‘special intelligence’ were to be preferred. The paper contended that the class of ‘agent’ employed was, ‘as a general rule, high socially and morally – anyhow, infinitely higher than the uninitiated would ever expect’, and that there was ‘nothing in the duties of an S.I.S. Representative which can call for censure, or cause a gentleman to think twice before enlisting in the service’. These views were clearly aspirational (and perhaps part of a necessary seizing of the moral high ground by intelligence officers themselves), a fact reinforced by the improbable assertions that ‘no agent is recruited for the purpose of betraying his own country or ideals’, that ‘an individual’s vices are not played upon in order to obtain a hold upon him’, and that ‘certain conventions such as the Red Cross, religious bodies, etc are not used for the purpose of cover or agents’, all of which (though not specifically the Red Cross) had been done (or contemplated) during the 1914 – 18 war.

SIS’s relations with government were succinctly outlined. It reported to the three armed service ministries, the Foreign, Home, Colonial and India Offices and the Department of Overseas Trade. Marking a significant change, it was noted that under Lloyd George’s government ‘copies of more important reports were also circulated to the Prime Minister and certain members of the Cabinet’. This had now been ‘discontinued’ under a ruling from the Foreign Secretary, confirmed by the Prime Minister, ‘whereby he decided to receive his advice and information through constitutional channels’, that is to say from the particular government department concerned. Close relations with the armed forces departments were secured by each service intelligence staff having ‘a separate liaison section actually forming part of the S.I.S. H.Q. staff’. Although relations were naturally also very close with the Foreign Office, it was felt that both the functions and limitations of ‘the S.I.S. work’ were ‘not as fully realised’ by other civil departments. Partly this was a result of the necessary secrecy under which SIS operated, but this could sometimes be taken too far. One (unspecified) department ‘authorised to receive reports’ had considered them all so secret ‘that they were immediately placed in a locked box after being read by one individual and never again referred to’.

The paper also summarised liaison with the other security and intelligence agencies. The ‘S.S. Branch’ of the police at Scotland Yard was ‘to all intents and purposes the complement of the S.I.S.’, while MI5 was responsible for ‘special intelligence’ in ‘all countries under the British Flag’ and was ‘concerned solely in the tracking of Foreign Military (and Naval &c) agents working in British territory, and with the moral security of the Armed Forces of the Crown’, another complementary function. MI5, moreover, had ‘no right to maintain agents of any kind in any Foreign Country without the knowledge and consent of S.I.S.’. The third analogous British organisation was Indian Political Intelligence (IPI), directed from Simla in India, though it had its headquarters in London. IPI’s function was ‘the watching of subjects of the Indian Empire in all countries save India itself and certain neighbouring States’. This involved working in foreign countries, but potential overlap with SIS was monitored by careful liaison and co-operation between the two services.

The outline of the Service’s ‘internal organisation’ reflected changes introduced by Cumming since the end of the war. As part of his postwar cost-cutting he told Ronald Campbell of the Foreign Office in March 1919 that he would have to give up the ‘Organisation by Departments’ – with separate sections for each customer department – which had been imposed on him in November 1917 and replace it with a ‘system on a “Geographical” Basis’, rather as had been the case earlier in the war. What in fact emerged was a combination of the two, with a Production side, primarily responsible for the overseas deployment of the Service, and a Circulation side, which provided the link with the customer departments, both ‘transmitting all information obtained’ and generally ‘acting as a liaison between the S.I.S. and the said Departments’. Reflecting the two-way process involved, this section later became known as Requirements. By early 1923, the Production side was envisaged as containing nine groups, covering different geographical regions, with a supervising Inspector over each, but, while seven groups covering Europe, the Near East and the Far East had been organised, the North American one was not yet operational and the South American Group was ‘definitely still only theoretical’. A diagram showing the budget figures for SIS’s overseas stations prepared later in 1923 shows that a New York station was in existence and indicates the share of expenditure met by Passport Control. It suggests that the £90,000 budget recommended by the Secret Service Committee in 1922 represented only part of the funds required for the Service. Out of a total budget of £170,800, ‘Headquarters’ was allocated £26,000 and £20,000 was earmarked for ‘Contingent’, leaving £124,800 for overseas operations. The income side showed four sources of revenue: an ‘S.S. Grant’ of £112,000; ‘Passport Control’, £44,000; ‘Far East Res[erve]’, £14,000; and ‘Scotland Yard’, £800.23

On the Circulation side, the armed service branches (Sections II-IV in the November 1917 arrangement) remained. Reflecting postwar priorities, Section V, Political, was the largest (with two officers and five secretaries in January 1923), and Section I, Economics (which had primarily been devoted to wartime blockade work), had disappeared altogether. In order to help maintain the secrecy of the organisation, Cumming and Nevile Bland agreed in February 1922 that requests for information from (and responses to) departments other than the armed services should all pass through the Permanent Under-Secretary at the Foreign Office. Apart from Section V, there is not much evidence from the early 1920s, however, that the section numbers were widely used in Head Office. This, too, presumably reflected postwar realities: the elaborate 1917 (and, as Cumming had observed in 1919, expensive) structure for a Head Office of up to a hundred staff was not necessary in the evidently more informal postwar circumstances when the office had shrunk to less than half its wartime size. What had in 1917 been Section VI, Organisation, survived (though not as a formal section) in the central administration of the Service, categorised at the start of 1923 as ‘Chief ’s Staff’ (which sounded grander than it was: Cumming, ‘Pay’ Sykes and two secretaries); Registry (eight staff); Coding (two); Typing (four); Main Office (two); and ‘Miscellaneous’, including ‘translations etc’ (four).

During the war the Secret Service had suffered from a considerable turnover of personnel, and Cumming had complained about the armed services’ propensity to pinch valuable officers from him just as they were settling into their jobs. Over the postwar years, however, despite the vicissitudes of finance, there was greater stability and continuity of staff, and Cumming managed to assemble a core group of officers, many of whom were to play important roles in the history of the Service up to and during the Second World War. Among his closest colleagues was Paymaster Percy Stanley Sykes, who joined in November 1915 at the age of thirty-seven. A qualified accountant, ‘Pay’ Sykes was to manage the finances of the Service for thirty years. When he finally retired in 1946, the Director of Naval Intelligence wrote that he was a ‘specialist’ with ‘exceptional experience and qualifications for his present post’ who had ‘carried out his professional duties of a specialised nature with zeal and ability’.24 In April 1919 Cumming appointed Major Desmond Morton to be his head of Production. Born in 1891, Morton came from a prosperous landed and professional background and had been educated at Eton and the Royal Military Academy, Woolwich, before embarking on a military career in the Royal Field Artillery. After the outbreak of war in August 1914 he served on the Western Front almost continuously for three years, winning a Military Cross in 1916. Wounded and invalided home in 1917, he returned to France and saw out the war as an aide-de-camp to the British Commander-in-Chief, Field Marshal Sir Douglas Haig. Morton served in SIS for over fifteen years, and continued to have an important intelligence role in Whitehall thereafter, serving as Winston Churchill’s liaison officer with SIS for much of the Second World War.25

Another significant appointment was Colonel Stewart Menzies, an Old Etonian cavalryman from a very privileged social background. He was a career soldier who had served with the Life Guards on the Western Front and been decorated for gallantry before being gassed, after which he was appointed to a security intelligence position at General Headquarters. By 1918 he was a liaison officer between the Directorate of Military Intelligence and MI1(c). Although employed (and paid for) by the army, he was primarily located in Cumming’s organisation. After a spell in Paris in early 1919 on Basil Thomson’s security staff attached to the British delegation at the peace conference, he succeeded Claude Dansey as head of Cumming’s Military Section IV, although he did not transfer from the War Office to the SIS payroll until 1 April 1923. He remained on it, however, for nearly thirty years and was to be Chief from 1939 to 1952. In January 1921 Cumming appointed Major Malcolm ‘Woolly’ Woollcombe to work in Sir Robert Nathan’s section. Cumming had initially thought to employ Nathan, an old India hand who had worked very successfully against Indian subversives in North America during the war, to take over MI1(c)’s work in the USA, focusing now on Irish and Irish-American revolutionaries, 26 but he kept him at home and put him in charge of the Political Section V. For two years before his early death in June 1921, Nathan, who was plagued by ill-health, was the second most important officer in SIS. According to Woollcombe family tradition, Nathan had offered Woollcombe a job in MI1(c) following a lecture which Nathan had given at the army Staff College. Barely six months after joining the Service, Woollcombe was put in charge of the Political Section, which he continued to superintend (with some distinction) until his own health broke down and he retired in 1944.27

In addition to the cadre of long-serving Head Office staff, recruited during the war or shortly afterwards, a significant number of overseas representatives, who joined at much the same time, also had lengthy careers in the Service. One such was Major (later Colonel) Valentine Vivian - widely known in SIS by his initials, ‘V.V.’, and sometimes as ‘Val’. Vivian, born in 1886, son of the successful portrait painter Comley Vivian, was educated at St Paul’s School, where he was a classical scholar. Although he apparently had ambitions to work at the Victoria and Albert Museum, in 1906 he joined the Indian Police, rising by 1914 to be assistant director of the criminal intelligence department. After war service with the Indian Army in the Middle East he became Indian Political Intelligence’s representative in (and later headed) the jointly funded MI1(c)/IPI Constantinople operation. By the spring of 1922, when the Indian government wanted to recall Vivian to India, Eyre Crowe of the Foreign Office declared that ‘the utility of the existing organisation in Constantinople depended very much on its chief’.28 Vivian came to Head Office in London for the first six months of 1923 before going abroad again, to the British army of occupation in Germany. He spent the rest of his working life in SIS, rising to be Deputy Chief and not retiring until well after the Second World War. Knowledgeable, thoughtful and personally kind, towards the end of his career he acquired a reputation for ineffectual fastidiousness.

The importance of individuals, and their personalities, was accentuated by the smallness of the Service. In the autumn of 1919, Head Office had fewer than fifty staff, while overseas there were seventy-two officers and an indeterminate number of support staff. By 1923, successive budget cuts had had their effect. At home there were sixteen officers, thirty secretaries (all female) and twenty weekly paid staff, including drivers, ‘chars’ (charwomen – that is, cleaners), messengers and (a typical Cumming requirement) one ‘car washer’. No provision is made for technical and scientific staff in the surviving account books for 1921-3, although in July 1919 Cumming took on a Dr S. Dawson ‘as chemist’, and renewed his contract (at a slightly reduced level) in July 1921. It seems that, at this stage, scientific assistance was provided on a consultancy basis. In any case, SIS could also call for assistance from the technical branches of the armed services. Abroad, there were forty-eight officers and clerks (distributed among thirty-three stations) and approximately seventy-seven ancillary staff. These figures, of course, did not include agents. In the 1920s the British Secret Service, with a worldwide remit, had a total complement of fewer than two hundred people, sixty-odd at home and approximately twice that number abroad.

From Cumming to Sinclair

The travails of the immediate postwar years (not to mention those of the war itself) seem to have taken a considerable physical toll on Cumming. According to Frank Stagg, he became a ‘martyr to angina’, and, fifty-nine years old at the end of the war, clearly could not go on for ever. In the autumn of 1919, though he had ‘no intention of retiring’ unless he was ‘asked to do so’, he raised the question of his pension with Lord Hardinge at the Foreign Office. Although he had the substantive rank of a naval captain, neither his time on boom defence nor his years as Chief of the Secret Service counted towards his pension, and so the Foreign Secretary approved the purchase out of public funds of an annuity to make up his prospective pension to that of a captain. Prepared to retire or not, there is some evidence that Cumming had thought about the future. Compton Mackenzie claimed that when he returned to London in 1917 Cumming had proposed that Mackenzie come to Head Office as his number two. ‘I’ll go through the war,’ he allegedly told Mackenzie, ‘and I’ll stick on for a couple of years after it’s over, and when I go you’ll step into my place.’29 There was never any likelihood of this happening, not least because Mackenzie was appalled at the prospect. At the beginning of 1921 Cumming, evidently with retirement in the not-too-distant future in mind, was worried about the possibility of Kell replacing him, but there appears to have been no serious discussion about the subject until February 1922 when he had a conversation with Nevile Bland about ‘a successor for me’. Bland said that ‘neither D.M. [Desmond Morton] nor S.M. [Stewart Menzies] would be acceptable & thinks a naval man would be preferred anyway’. ‘R.’ (probably Commander E. H. Russell, who worked in the Naval Section in SIS Head Office) was ‘a bit young’ and ‘R.R.S.’ (unidentified) was ‘too old’.

In the end it was to be ‘a naval man’, and some time in late 1922 or early 1923 Rear Admiral Hugh ‘Quex’ Sinclair was selected to be the second Chief. Writing in January 1923, Cumming told Sir Samuel Hoare that he was pleased Sinclair had been chosen and that he thought him ‘in every way qualified & suitable’ to take over the Service. ‘I feel sure’, he wrote, ‘that in his capable hands this org[anisatio]n will grow to be v. useful – it is not too much to say – essential – to the Govt. Departments we serve.’30 The forty-nine-year-old Sinclair was a career sailor who had been educated at the Britannia Naval College at Dartmouth and entered the navy as a midshipman in 1888. From his service record it is clear that he was an exceptional officer. From the start his ability and professional knowledge were described as ‘very good’. The record is characterised by positive comments: ‘steady and trustworthy’; ‘zealous & capable’; ‘Excellent tact & temper. Very discreet & loyal’; ‘exceptional powers of administration’.31 During the First World War he had served in the Mobilisation Division of the Admiralty and finished up as chief of staff of the battle-cruiser force. In January 1919 he succeeded Blinker Hall as Director of Naval Intelligence, a move which the notoriously hard-to-please Hall warmly welcomed. Hall was ‘delighted’, and told Sinclair that it was ‘not often given to men that they see their job filled by the only man who can do it’.32 He stayed in Naval Intelligence for only eighteen months and in August 1921 was appointed to a three-year stint as ‘Rear Admiral “S”’ (commander of the Submarine Service). This would have taken him to August 1924, but by the late spring of 1923, with Cumming’s health failing, it had evidently been decided that he would take over as Chief of SIS in September that year.33

There is some suggestion that even this timetable might have been accelerated as Frank Stagg recorded a ‘farewell’ dinner for Cumming at about this time. ‘“Blinker”’, he recalled, ‘eulogised him [Cumming] magnificently for his wonderful work. In his reply “C” said “. . . you’ve come to bury ‘C’ Sir – not to praise him”’. Cumming died – ‘suddenly’, according to the death notice in The Times – on 14 June 1923 at 1 Melbury Road, which was both the Service headquarters and his London home. In his autobiography, the journalist and thriller – writer Valentine Williams, whom Cumming had befriended during the war, claimed to have been the last person to see him alive. Hearing that he was retiring and about to leave London, Williams called to return some books he had borrowed and ‘spent the afternoon with him, chatting about old times’. When Williams left at about six o’clock, Cumming was ‘comfortably installed in a corner of the sofa. When his secretary went in to see him soon after she found him dead.’34

The appointment of Hugh Sinclair to head the Secret Service – he actually commenced work on 3 September 1923 – illustrates the extent to which the status of the Service had risen during Cumming’s time as Chief. Far from the Director of Naval Intelligence appointing some evidently junior officer to the post, a former DNI himself took it over. There were other differences, too. Sinclair was socially very well connected (he had been appointed a naval aide-de-camp to the King in February 1920) and, along with his flag rank as an admiral, this helped give him greater Whitehall clout than his predecessor. Unlike Cumming, on the other hand, Sinclair was a noted bon vivant, and had a stormy private life, being divorced in 1920. His nickname ‘Quex’ had been bestowed on him as a young man, and was derived from Arthur Pinero’s play The Gay Lord Quex, in which the hero was described as having been ‘the wickedest man in London’, though he had subsequently become a reformed character. 35 While one of his obituarists claimed that he ‘was intolerant of any sort of slackness or inefficiency, which he was likely to castigate with an astonishing flow of forcible language, such as was traditional in an earlier generation of sea officers’, he was also ‘one of the most imperturbable of men’, and it was claimed that ‘no emergency ever saw him “rattled”’. In addition he was ‘always appreciative of good service in a subordinate’, and he appears to have been a very popular commanding officer (he was captain of HMS Renown in 1916-17). Judging from an account of the ‘annual submarine dinner’ in 1921, he was very affectionately regarded by his subordinates in the Submarine Service.36 Whatever his qualities of leadership, which in the early summer of 1923 were yet to be proved for SIS, those of his predecessor had ensured that the Service had a future for him to preside over.

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