7

Domestic matters

During the 1920s the modern title of the Service gradually became established. Although the report of the 1925 Cabinet Secret Service Committee spoke of the ‘Secret Intelligence Service, commonly known as S.I.S.’,¹ an abbreviated version of the report (in the SIS archives) used the term ‘Special Intelligence Service’, which suggests that even in SIS itself some uncertainty remained about what the Service was called. In October 1928 a police Special Branch memorandum described SIS as ‘the Special Intelligence section of the Foreign Office’. From a security perspective this was not necessarily a bad thing for a deeply secret organisation, though it had the potential to be unnecessarily confusing. Usage within both Whitehall and SIS varied considerably. ‘C’s organisation’ was quite common, and MI1(c) was still being employed in August 1939, by an SIS officer for a communication with the War Office. Early in the Second World War a new cover name, MI6, was adopted, superseding MI1(c) and becoming very widely used thereafter.

SIS and signals intelligence

When he became Chief of SIS, Hugh Sinclair was also made non-operational director of the Government Code and Cypher School (GC&CS), Britain’s unified signals intelligence agency created out of the remnants of the wartime Admiralty and War Office cryptographic branches, NID25 (popularly known as Room 40) and MI1(b) respectively. ² In November 1918, along with his scheme for an amalgamated secret service, the Director of Military Intelligence, William Thwaites, had proposed to his naval counterpart, Blinker Hall, that the two signals intelligence sections should be united in a single ‘School’ (so called to provide cover by stressing the organisation’s positive side, for example in studying ways to achieve secure communications). Hall agreed, deftly offering ‘housing room’ in the Admiralty ‘for the military side, so that all their joint knowledge and brains might be combined with the least possible over-lapping’. But Colonel C. N. French, Thwaites’s chief staff officer in MI1, opposed a rapid amalgamation. The War Office had been particularly successful with foreign diplomatic traffic. By 1918 they claimed to have solved fifty-two diplomatic codes, including those of France and the United States.³ French argued that ‘during the Peace negotiations’ the information produced by MI1(b) would ‘be as, or perhaps more, important than it has ever been during the time of hostilities’. Furthermore, since cryptographers were ‘somewhat kittle-cattle to deal with and all of them, if they are any good, have somewhat peculiar temperaments’, their work might suffer if they were ‘shifted from their present quarters in Cork Street [in Mayfair] to the Admiralty’.

French was not the only person with definite opinions on the subject. In January 1919 Lord Curzon (acting Foreign Secretary while Lord Balfour was at the Paris Peace Conference) declared that the Foreign Office was ‘the proper place for the new school to be housed’. Sinclair (at this stage Director of Naval Intelligence) disagreed. The School, he argued, should be located in the Admiralty, since the fighting services possessed the required expertise and ‘all the arrangements as regards deciphering messages’ were ‘already in existence in the Admiralty building’. This was not just a matter of convenience. ‘Without wishing to disparage the Foreign Office in the least,’ he continued, ‘it is considered that the atmosphere of calm deliberation which characterizes that department is not suited to an organisation such as the proposed Code and Cypher School, which, above all things, must be a “live” undertaking, especially in connection with the “breaking” of codes and cyphers.’ The matter was settled on 29 April 1919 at a conference chaired by Curzon, along with the First Lord (Walter Long) and the Secretary for War and Air (Winston Churchill), which decided that the new School should be placed in the Admiralty (albeit under civilian administration). Curzon, nevertheless, arguing that in peacetime its work would be almost entirely political, secured for the Foreign Office the valuable power of controlling the information produced. It was decided that he (as acting Foreign Secretary) should receive all intercepted telegrams and be responsible for passing them on ‘to the Prime Minister or other Cabinet Ministers concerned when they were of sufficient importance’.⁴

It is evident from the discussions in early 1919 that the Foreign Office, and Lord Curzon in particular, recognised the high potential value of the diplomatic decrypts produced by the Code and Cypher School. In mid-1921 (by which time he had succeeded Balfour as Foreign Secretary) Curzon unequivocally described the School as ‘by far the most important branch of our confidential work’. The ‘decyphered telegrams of foreign Govts.’, he wrote, ‘are without doubt the most valuable source of our secret information respecting their policy and actions. They provide the most accurate and, withal, intrinsically the cheapest, means of obtaining secret political information that exists.’⁵ By this stage, taking advantage of the fact that in February 1921 Walter Long, who was interested in intelligence matters, was replaced at the Admiralty by Arthur Lee, who was not, Curzon had already begun to press for the administrative transfer of the School to the Foreign Office. In May Lee agreed (Sinclair does not appear to have objected) and from 1 April 1922 the Foreign Office assumed direct responsibility for the School (while agreeing to return five named individuals to the Admiralty in the event of a war).⁶ But this arrangement did not suit the service ministries, who lodged a vigorous complaint in April 1923, claiming that the School had ‘entirely lost its interdepartmental character’ since the Foreign Office had taken over ‘complete control’. The row simmered on until November when Sir Eyre Crowe, Permanent Under-Secretary at the Foreign Office, devised a compromise whereby the School was placed under the general authority of Sinclair, by now Chief of SIS. Personally acceptable to the armed service intelligence chiefs, Sinclair nevertheless remained answerable to the Foreign Office.⁷

This is not to say that Sinclair was necessarily the best man for the job. Although as Director of Naval Intelligence he had been involved in the creation of the GC&CS in 1919, and clearly appreciated how valuable signals intelligence could be, his role as a customer for sigint in the summer of 1920, when the service intelligence chiefs wanted to publicise the details of intercepted Soviet telegrams, suggests that he did not at this time fully understand how the injudicious use of signals intelligence could risk the precious source itself. From May 1920 GC&CS succeeded in reading the communications of the Soviet Trade Delegation in London. These revealed that the Soviets were indulging in secret political work, including providing a subsidy to the left-wing Daily Herald, and contemplating ways of ‘arming the British “proletariat”’. Some intercepts were leaked to the press on 17 August, and the evidence of Soviet perfidy mightily enraged senior military and naval officers, including the Chief of the Imperial General Staff, Field Marshal Sir Henry Wilson, who was shocked at the extent to which the government was apparently prepared to ignore the Soviet behaviour. He told his political master, Winston Churchill, that ‘our (soldier) loyalty to the Cabinet’ was being put under ‘severe strain’ and (with a hint of political blackmail) that ‘we had a still higher loyalty to our King and to England’. Churchill, in fact, agreed and urged Lloyd George to publish more intercepts. But aware of the accompanying risk to the source of the intelligence, Churchill asked the service intelligence chiefs (including Sinclair) ‘to report to what extent the incriminating telegrams can be published without undue damage to the permanent interests of the cipher school’. The servicemen (as well as Basil Thomson) concluded that the threat posed by the Soviet delegation justified disclosure. The Cabinet sensibly decided otherwise, although a few intercepts were leaked to the press, presumably by members of the intelligence community.⁸

As it happened, the Soviets missed the significance of the published intercepts and did not apparently realise that their communications were being deciphered until December, but the episode reveals how Sinclair and his colleagues let their patriotic (and right-wing) political hearts override their intelligence chiefs’ heads, as well, perhaps, as their constitutional duty to serve the government in power. For them, the evidence of Bolshevik duplicity overwhelmed any other consideration, not only the future ability of GC&CS to decipher foreign governments’ communications, but also the broader political context and the policy being pursued by the government of the day. Wilson’s claim about servicemen’s loyalties being strained, and so on, and the alarmist accusations of Communist subversion were part of a grotesque overreaction to the actual threat posed by the tiny Soviet delegation and the manifest reluctance (well understood by Lloyd George) of the British working class to indulge in violent revolution. Yet during the 1920s Sinclair was implicated in a tendency within the intelligence community which moved beyond the simple process of collecting intelligence and from time to time trespassed into its use as well.

The arrangement whereby the Chief of SIS was simultaneously Director of the Government Code and Cypher School lasted for more than twenty years. Although the armed services kept some residual expertise in the field, SIS effectively acquired monopoly control over British signals intelligence, a fact which was to prove extremely important in the future. This branch of the British intelligence community was notably successful. John Ferris has estimated that ‘the GC&CS was one of the world’s largest code-breaking agencies, perhaps the biggest; as effective as any other, better than most, possibly the best on earth between 1919 and 1935’. It provided Whitehall with a steady stream of intercepted and decrypted telegrams of foreign governments. It had sustained success throughout the interwar years against French, United States and Japanese traffic, and that of many smaller powers. Up to 1930 or so, it also had ‘near mastery’ of Italian diplomatic systems. It was less successful against Soviet traffic in Europe, especially from late 1920, though it continued to be able to read a fair proportion of Asian material. Germany, a low priority in the 1920s, was a blind spot, and continued to be so in the 1930s, though success against Japanese traffic helped illuminate British understanding of the forces behind the German-Japanese-Italian Anti-Comintern Pact of 1936-7.⁹

From the beginning of his time as Chief, as well as stiffening up the Service’s internal organisation, Sinclair sought to expand its reach over the British intelligence community as a whole. At the end of 1923 he told Crowe at the Foreign Office that he wanted ‘to undertake a certain re-organisation of this Service, which should be more efficient, and what is more important, should provide a basis for a war organisation’.¹⁰ Archival evidence from the start of 1924 confirms that, on the Circulation side, the Political Section V had become Section I (in place of the defunct Economic Section) and the geographically arranged Production sections had been concentrated into four groupings: G.1 (the Baltic Group), G.2 (Scandinavian Group), G.3-5 (Western and Central Europe Groups), and G.6-7 (Near and Far Eastern Groups). There was no indication of any provision for the envisaged North and South American Groups. Within six months G.1 and G.2 had been amalgamated.

In January 1924, too, Sinclair held a meeting with the head of the Code and Cypher School confirming the integration of its work with that of SIS. It was ‘accepted that G.C. & C.S. was responsible for cryptography, and S.I.S. for the distribution of intelligence derived from this source as well as supplying intelligence and criticism to G.C. & C.S. to assist cryptography’. Section I of SIS was to ‘supply G.C. & C.S. with list of general subjects on which to concentrate . . . Armed Forces Sections of S.I.S. to collaborate’. The Code and Cypher School, moreover, was to ‘have full access to S.I.S. records’. By June 1924, however, and perhaps reflecting the considerable volume of intercept material produced, GC&CS was instructed to distribute decrypts directly to its customer departments, though copies of all material were also to be sent to Sinclair. There were some practical difficulties with this, since the two organisations were located in separate places. SIS was in Melbury Road, while GC&CS (also for money-saving reasons) had been exiled to Queen’s Gate in Kensington, which one cryptanalyst afterwards described as ‘more comfortable’ than its previous premises but ‘rather remote from other departments’.¹¹ Concerned about this issue, Sinclair was to raise it with the Cabinet’s Secret Service Committee in 1925.

The Zinoviev Letter

Although the 1921 Secret Service Committee had clearly distinguished between domestic and foreign intelligence (with SIS primarily responsible for the latter) and had found little or no overlap between the different agencies, absolute separation of activities was impossible to achieve in practice. SIS’s role in monitoring revolutionary activities of various sorts, especially those of international Communism, meant that no hard-and-fast rule could consistently be applied against working within the United Kingdom. If, say, a suspected Communist agent was being tracked by SIS across Continental Europe and came to Britain, it might not be feasible or, indeed, desirable suddenly to hand over the operation to MI5 or Special Branch at the moment the suspect entered the country. During the 1920s and early 1930s SIS also ran some agents exclusively within Great Britain. Foreign diplomats and businessmen presented another range of both threats and opportunities in which SIS might have a legitimate interest. In particular (and complementing GC&CS’s work on diplomatic cable traffic in and out of London), embassies (and their staff) themselves could constitute a source of ‘foreign intelligence from foreign sources’. In the interwar years, too, a number of shadowy organisations, mostly organised and funded by right-wing businessmen, worked alongside the formal British security and intelligence agencies. Some were exploited by Basil Thomson in the immediate postwar years, but it is clear that SIS also had direct contact with them. One such was the Committee to Collect Information on Russia, with which Sidney Reilly had links and which in 1921 produced a ‘Who’s Who in Russia’ that both SIS and the Foreign Office found useful. Another was the Makgill Organisation, an ‘industrial intelligence service’ set up after the Russian revolution by a wealthy baronet, Sir George Makgill, with backing from the Federation of British Industries and the Coal Owners’ and Shipowners’ Associations. In 1920 or 1921, after Vernon Kell of MI5 had introduced Makgill to Desmond Morton of SIS, the two men collaborated by exchanging information and pooling two of Makgill’s sources in particular. One (who was used up to 1923) ‘reported on Communist affairs in [the] U.K. and, with increasing vividness of imagination, on international and continental communism’. The other, Kenneth A. Stott, employed by SIS in 1924-5, was ‘wholly UK based’, ‘had a long previous communist connection’ and reported on ‘some international communist matters as they affected U.K.’.¹²

Right-wing fears about the onward march of Communism were reinforced by a change of government in Britain. Seeking a mandate from the electorate to back a new policy of economic protectionism, the Conservative Stanley Baldwin, who had succeeded Andrew Bonar Law as Prime Minister in May 1923, called a general election at the end of the year. Although the Conservatives won the largest number of seats, they failed to secure an overall majority, and in January 1924 Labour, the second largest party in parliament, with Liberal Party support unexpectedly formed their first-ever government with Ramsay MacDonald as Prime Minister and Foreign Secretary. Conscious of their minority position, the new administration proved both moderate and capable. Although the Labour Cabinet included idealistic internationalists like C. P. Trevelyan, who favoured dismantling the security and intelligence services, there is no evidence that this had any practical effect. According to one new Cabinet minister, Josiah Wedgwood, the government’s slogan was ‘we must not annoy the Civil Service’, and this seems to have applied to SIS as much as any other department.¹³ While distancing Labour politically from Communism (for example barring Communists from being members of the Labour Party), MacDonald sought to normalise Anglo-Soviet relations, exciting Conservative critics by quickly granting formal British recognition to the Soviet Union and opening negotiations for a comprehensive treaty to settle all outstanding questions between the two states. A draft treaty was initialled on 8 August 1924. All this was accompanied by a constant stream of Conservative criticism in parliament and the press, accusing the government of falling increasingly under left-wing influence.

MacDonald’s political position was gravely undermined when over the summer of 1924 the government clumsily mishandled the Campbell Case. John Ross Campbell, a Scottish Communist and acting editor of the fiercely left-wing Workers Weekly, had published ‘An Open Letter to the Fighting Forces’ calling on servicemen ‘not merely to refuse to go to war’ but also ‘to go forward in a common attack on the capitalists and smash capitalism for ever’. Campbell was arrested and charged under the 1797 Incitement to Mutiny Act. This was accompanied by political uproar: right-wingers called for this revolutionary to be locked up, while left-wingers complained about the suppression of free speech. When the government dropped the prosecution, ostensibly for technical reasons, the Liberals, asserting that this had been done under left-wing pressure, withdrew their support. MacDonald lost a vote of censure in parliament and called an election for 29 October.

On 24 October the right-wing Daily Mail published the leaked text of a letter purporting to be from the Soviet leader Grigori Zinoviev to the Communist Party of Great Britain urging them to rouse the British proletariat in advance of armed insurrection and class war.¹⁴ The same day, as the rest of the British press reported on 25 October (a ‘Bombshell’ and ‘The truth at last’, declared The Times), the Foreign Office released the text with that of a strongly worded protest to the Soviet chargé d’affaires in London.¹⁵Although it has been claimed that the Zinoviev Letter decisively contributed to Labour losing the election, their vote in fact went up, and the Conservatives under Baldwin won an absolute majority due to the collapse of the Liberal vote. The suspicion remains, nevertheless, that right-wing elements, with the connivance of allies in the security and intelligence services, deliberately used the letter (and perhaps even manufactured it) to ensure a Labour defeat. SIS was certainly involved, as the letter had been obtained by the Riga station, who had forwarded an English text to Head Office on 2 October. The source cited was FR/3/K, Riga’s star agent in Moscow. It took about a week to reach London and, having been evaluated by Desmond Morton, was circulated by SIS on 9 October to the Foreign Office and other departments.¹⁶ A covering note said that the document contained ‘strong incitement to armed revolution’ and ‘evidence of intention to contaminate the Armed Forces’, and was ‘a flagrant violation’ of ‘the Anglo-Russian Treaty signed on the 8th August’. Though, apparently, no systematic checks had been made, SIS also categorically vouched that ‘the authenticity of the document is undoubted’.¹⁷

The first page of the notorious Zinoviev Letter, showing its despatch from Latvia on 2 October 1924 and its circulation to British government departments a week later.

The Foreign Office, nevertheless, carefully sought further corroboration from SIS. This was provided by Desmond Morton on 11 October based (he maintained) on information received from ‘Jim Finney’ (code-named ‘Furniture Dealer’), one of the agents jointly run with Makgill’s organisation, who had been infiltrated into the Communist Party of Great Britain. According to Morton, Finney reported that the Party Central Committee had recently received a letter of instruction from Moscow concerning ‘action which the C.P.G.B. was to take with regard to making the proletariat force Parliament to ratify the Anglo-Soviet Treaty’ and that ‘particular efforts were to be made to permeate the Armed Forces of the Crown with Communist agents’. This, concluded Morton, ‘seems undoubtedly confirmation of the receipt by the C.P.G.B. of Zinoviev’s letter’. But the original report contained no reference to any particular communication from Moscow, and Morton said he had ascertained details of a specific letter only during a subsequent meeting with the agent. Reflecting how curious it was that the agent had not mentioned so apparently significant a directive from Moscow in the original report, Milicent Bagot, a retired MI5 officer who spent three years in the late 1960s exhaustively investigating the affair, suggested that the agent had been ‘asked “loaded” questions by Morton, who is known to have been working on the Riga report and had no doubt put the two together in his mind’.¹⁸

On 13 October SIS assured Sir Eyre Crowe that Morton’s information provided ‘strong confirmation of the genuineness of our document [the Zinoviev Letter]’. This was interpreted by Crowe as ‘absolutely reliable authority that the Russian letter was received and discussed at a recent meeting of the Central Committee of the Communist Party of Great Britain’, and on this basis he recommended to MacDonald that a formal note of protest be submitted and full information be given to the press.¹⁹ Morton’s ‘strong confirmation’, therefore, already perhaps more than the evidence supported, became ‘absolutely reliable authority’, and the basis for explicit government action. It was only after the Soviet chargé, Christian Rakovsky, had dismissed the letter as ‘a gross forgery’ (which it almost certainly was) that on 27 October Crowe asked Malcolm Woollcombe for further information. Had, for example, the text been received in English or Russian and could an SIS officer explain things personally to the Prime Minister, who in the meantime had himself begun to wonder if the letter were bogus? Riga told Head Office that their original version had been in Russian, which had been translated by a secretary in the station before transmission to London, thus revealing that the English text was not quite as ‘authentic’ as had at first been claimed. ²⁰

The Cabinet met to discuss the case on 31 October. Some ministers, including Trevelyan and Lord Parmoor, were very critical of ‘Foreign Office officials’, suspecting that some had ‘stooped to a mean political trick to damage the Labour Party’. Parmoor, who over a thirty-year political career moved from being a quintessential establishment man and Conservative MP to an international socialist and senior Labour leader, favoured an inquiry which would (as the assistant Cabinet Secretary Thomas Jones recorded) ‘table all the available evidence and expose our Secret Service’, and a committee was deputed ‘to examine at once the authenticity of the Zinovieff letter’.²¹ Responding to more questions from MacDonald about the text and provenance of the letter, SIS declared that it was ‘highly important’ that ‘definite proof be obtained for our own satisfaction and for that of the Foreign Office’. Perhaps appreciating that this could be interpreted as back-pedalling on the assurances already given, SIS added that this did ‘not, of course, imply that either we or the Foreign Office doubt the authenticity of the document in any way’. But, despite further exchanges with Riga, SIS could add nothing more conclusive. Reflecting a perhaps over-fastidious attitude towards the Secret Service, MacDonald was noticeably reluctant during the whole affair to question any SIS officer in person. On one occasion Crowe took Malcolm Woollcombe of SIS’s Section I with him to the Prime Minister, but (according to Woollcombe’s son) the intelligence officer had to remain ‘out of sight in an adjoining room with a communicating door, and the Prime Minister’s questions were put to him by Crowe, who relayed the substance of my father’s answers’.²² Sir Wyndham Childs (the Assistant Commissioner at Scotland Yard, responsible for the Special Branch), whom the committee also interviewed, was unable to add anything more about the alleged reception of the letter by the CPGB, and when the committee reported to the Cabinet on 4 November they ‘found it impossible on the evidence before them to come to a positive conclusion on the subject’.²³

MacDonald resigned the same day and the matter passed to Baldwin’s new Conservative government. On 12 November another committee, chaired by the new Foreign Secretary, Austen Chamberlain, and including Lord Curzon, was formed to investigate the matter. A week later, ‘after hearing all the necessary witnesses’, they ‘were unanimously of the opinion that there was no doubt as to the authenticity of the letter’.²⁴ We do not know who constituted ‘all the necessary witnesses’ (there is no written report of their deliberations), but they do not seem to have included anyone from SIS. Sinclair had evidently been ready to give evidence, for he provided Crowe with a note of ‘five very good reasons’ why the letter was considered genuine which he had prepared in the event of being called before the committee. Sinclair declared, wrongly, that the letter had come ‘direct from an agent in Moscow for a long time in our service, and of proved reliability. He is an official in the Secretariat of the 3rd International, who works directly under Zinoviev and has access to his secret files.’ Though Sinclair may have believed this to be so, it was not precisely the case, as the claimed source was one of FR/3’s sub-agents, about whom much was alleged but little definite was known. In his second and third reasons, Sinclair repeated some circumstantial corroboration, including the highly suspect assertion that the letter had been received by the Communist Party of Great Britain. Two further reasons turned round the possibility of the letter being a forgery. On the one hand, Sinclair baldly stated that ‘if it was a forgery, by this time we should have proof of it’, which was more a matter of faith than evidence, and, on the other, he declared that ‘the possibility of being taken in by “White Russians”’ had been ‘entirely excluded’. SIS ‘made it our special business to be acquainted to the methods and personnel of the various “White Russian” and other forging organisations, especially the main one in Berlin [Orlov], with the object of preventing ourselves from having forgeries planted on us’. In this particular case, moreover, he stated categorically that SIS was ‘aware of the identity of every person who handled the document on its journey from Zinoviev’s files to our hands’. We might allow that Sinclair (or whichever SIS subordinate drafted the paper) had in mind some rather fine distinction between being ‘aware of ’ and ‘knowing’ an identity, but in the sense which the assertion was clearly meant to convey to Crowe or the Foreign Secretary (or whoever), it was simply untrue, as FR/3 never revealed the specific identity of his alleged Comintern source. Only one of Sinclair’s reasons, his fifth - ‘because of the subject matter’ - was actually any good at all, though this was still essentially circumstantial evidence. Sinclair correctly argued that the letter ‘was entirely consistent with all that the Communists have been enunciating and putting into effect’, though he ignored other evidence which suggested that, at least temporarily, the Comintern had been anxious to avoid any action which would undermine MacDonald’s minority Labour government.²⁵ In the spring of 1924, for example, the Riga station had sent London a copy of a letter from the Comintern to the CPGB stating that overt anti-government action ‘was only permissible should the Government commit some grave infringement of the rights of the working classes’.

SIS’s resolute validation of the Zinoviev Letter, and its suppression of any evidence to the contrary, underpinned the consistent Foreign Office position for the next fifty years (at least) that the letter was genuine. Since the general content of the letter was never in doubt - the Soviets were indeed keen on fomenting revolution in Britain - and bearing in mind the broadly (and sometimes fiercely) anti-Bolshevik views held by SIS officers, among many other public servants, the Service attitude appears to have combined an element of wish-fulfilment with an understandable, if unattractive, desire not to admit to having made a mistake. SIS, and the security and intelligence agencies in general, have also been accused of leaking the letter both to the press and to Conservative Central Office in a deliberate effort to discredit the Labour government. ‘As you know the civil service has no politics,’ wrote one official in November 1924 to Lord Derby, a former Conservative Secretary for War, ‘but I fancy they would contribute heavily to a statue to Zinovieff & Mr. Campbell, for the effect they had on the election.’²⁶

So it may well have been in SIS, whose officers had numerous contacts and acquaintances in Conservative political and business circles. It is highly likely that some talk of the letter, if not the text itself, was shared beyond Whitehall. In April 1969 Desmond Morton even claimed that Stewart Menzies had sent a copy of the letter to the Daily Mail through the post, an assertion greeted with ‘amazement and disbelief ’ inside SIS.²⁷ On 21 October 1924, however, three days before the letter’s publication and because of its particular encouragement of subversion within the armed services, complete copies of the text were circulated to the home military commands in Great Britain, and it was reported that the Admiralty were considering similar action. With such a wide distribution it was surely only a matter of time before the document became public. Whoever leaked the letter, SIS’s role was less than glorious, and the whole affair shows how an almost obsessive and blinkered concentration on one target can dangerously influence the exercise of sensible critical judgment.

The 1925 Secret Service Committee

The Zinoviev Letter affair exposed weaknesses in the co-ordination of work between SIS and Special Branch in particular, and in February 1925 Stanley Baldwin reconvened the Secret Service Committee of Sir Warren Fisher, Sir Eyre Crowe and Sir Maurice Hankey to report ‘on the existing organisations and their relationship to one another’, and to make recommendations ‘as to any changes which in their opinion would conduce to the greater efficiency of the system’. At their first meeting the committee decided that in reviewing SIS, MI5 and the Special Branch at Scotland Yard ‘their broad aim should be to secure greater concentration, both administrative and geographical’. They also agreed to consider ‘whether the ideal of placing the three branches under one chief is attainable’. Their first evidence was from Sinclair who bluntly described the ‘whole organisation of British Secret service’ as being ‘fundamentally wrong’. The continuation of Indian Political Intelligence (IPI) ‘as a separate entity was a farce’. MI5 ‘contained several vested interests due to the length of time which certain officers had served the department’. ‘With proper reorganisation’, he thought that MI5’s staff of thirty could be reduced to about five. Overall, he argued strongly for amalgamating SIS, the Government Code and Cypher School, IPI and MI5 ‘under one head and one roof in the neighbourhood of Whitehall’. All work ‘concerning communism and similar movements’ should be transferred from Scotland Yard to the new organisation. The Passport and Passport Control Offices could be ‘housed on the ground floor of the same building as cover, as well as for convenience’.²⁸

Over three weeks in March 1925, the committee interviewed all the other relevant agency heads, and on 19 March brought Sinclair and Sir Wyndham Childs together to discuss a list provided by Sinclair of ‘recent examples of lack of co-operation between this Organisation [SIS], Scotland Yard and the Home Office’. They showed ‘the inefficiency and waste of time, money and labour now involved in S.S. work in general, owing to C’s Organisation, Passport Control Department, G.C.&C.S., M.I.5, I.P.I. and Scotland Yard not being under the same roof or housed so close to one another that it is possible for the Officers in each Department constantly to have personal conversations with Officers in any other’. Sinclair argued that the Zinoviev Letter ‘was a classic illustration of the overlapping inevitable under the present system’. It had been discovered abroad, was addressed to the Communist Party in England, and ‘enjoined revolutionary action both in civil and military spheres’. Thus, ‘under the present arrangement of divided responsibility in the British secret service’, it concerned SIS, Special Branch and MI5. Childs had already told the committee that ‘he had never seen C in connection with the Zinoviev letter’. Sinclair ‘had not told him that he proposed to employ an agent in this country for this purpose, and the result of such employment had not been reported to him’. Sinclair’s agent, moreover, had ‘claimed to be in a position to report the proceedings at the meeting of the Central Executive Committee of the communist party at which the Zinoviev letter was considered’. But Childs firmly asserted that he ‘could prove through agents that such a meeting had never been held’.²⁹ In this respect, Childs was right and Sinclair was wrong.

On 24 March the committee met to ‘take stock’ of the evidence so far submitted. The secretary, Nevile Bland, minuted ‘that unified direction was the ideal towards which we ought to work’ and that ‘the first step to this end was to associate the various branches in one building’, though both Sinclair and Kell strongly objected to being housed in Scotland Yard. In a subsequent note, Sir Maurice Hankey objected to the first of these conclusions, on the grounds that the connection with government departments ‘for whose benefit they were respectively established’ - Foreign Office, Home Office and so on - was more important than those between agencies. His ‘present inclination’ was ‘not, even as an ideal in the distant future, to go beyond doing everything we can to secure the closest co-ordination without altering the present balance of Ministerial and Departmental responsibility’. The committee’s pace of work slowed down over the summer of 1925. Sir John Anderson, Permanent Under-Secretary at the Home Office, who had attended all the meetings so far, was formally added to the committee in June, as was Sir William Tyrrell, who had succeeded Sir Eyre Crowe as Permanent Under-Secretary at the Foreign Office after the latter’s early death at the end of April. Evidence was taken from the service Directors of Intelligence, who expressed ‘general satisfaction with both S.I.S. and M.I.5’. While General Sir John Burnett-Stuart, Director of Military Operations and Intelligence (the Directorates of Military Operations and Intelligence having been amalgamated in 1922), declared that while ‘S.I.S. had improved enormously under “C”’, he was ‘quite content with things as they were’. He ‘would hesitate to put too much power into the hands of so energetic and capable an officer as “C”’. There was also ‘the advantage of the check which three separate organizations automatically provided on each other’s results’.³⁰

Having commissioned a report on the Special Branch (which concluded that it required some internal reorganisation) the Secret Service Committee delivered their report in December 1925. They had ‘no hesitation in saying that if there were to-day no British secret service of any kind’ and they had been called upon to organise one from scratch, they ‘should not adopt the existing system as our model’, but would have endeavoured ‘to create a single department’. Yet ‘the heterogeneous interests, liaisons, traditions and responsibilities of the different services’, as well as the ‘marked reluctance of the majority of those concerned to advocate any drastic change’, left the committee with ‘a strong impression that an attempt to form a coalition would, if it were not an actual failure, at any rate lead to no great improvement’. Hankey’s argument about maintaining existing departmental responsibilities was accepted (for example: ‘Place the head of the Indian Political Intelligence under the chief of a combined secret service, and what becomes of the authority of the Government of India?’). ‘With all the divers aspects of our present day secret service’, moreover (and using a Gilbert and Sullivan analogy), ‘the head of a combined organisation would have to be more than a Pooh Bah - he would have to be the Lord High Executioner as well.’ While this was a defeat for Sinclair and the Foreign Office, which had championed the single-agency option, the committee commended Sinclair as ‘a zealous, intelligent and exceptionally competent officer’. It recommended ‘that someone, preferably “C”, who has a peculiar flair for such things, should be made responsible for keeping a look-out for a suitable building, or buildings, in the neighbourhood of Whitehall, to which the outlying branches could be transferred’. This, it was believed, would facilitate the closer liaison between SIS, its fellow agencies and customers which everyone thought was desirable. The committee also thought that the ‘relations between what are probably the two most important sections, namely the Secret Intelligence Service and Scotland Yard’, could be improved, and that SS1, the liaison department between Scotland Yard and SIS, should either (like the service ministries) second a representative to work ‘on “C”’s staff’, or ‘transfer itself bodily’ to SIS.³¹

Sinclair acted swiftly to find a new combined headquarters closer to Whitehall. In the spring of 1926 he moved both SIS and GC&CS into offices in Broadway Buildings, a two-year-old nine-storey office block opposite St James’s Park Underground station, conveniently located between the headquarters of the London Missionary Society and the Old Star and Crown pub. At the end of September 1926, the Passport Control head office moved into 21 Queen Anne’s Gate, adjoining Broadway Buildings, and an internal passageway was constructed linking the two buildings. Since it was ‘essential that the connection between the P.C. Office and the S.I.S. Office be kept secret’, Sinclair instructed that SIS staff should ‘in no circumstances use the Queen Anne’s Gate entrance’. Initially SIS and GC&CS occupied only the third, fourth and fifth floors, though they steadily expanded until, shortly before the Second World War, they took over the whole building.

Sinclair, too, had a flat in Queen Anne’s Gate with a link to SIS so that he could move unobserved between his residence and his office on the fourth floor of Broadway Buildings. Here visitors were required to knock on a hatch, after which they might be admitted to the Chief ’s outer office by one of his secretaries. A green light over the door of the inner office indicated whether Sinclair was engaged or not. For the ordinary visitor, the experience had an ineffable air of mystery. The interwar Chairman of the Conservative Party, J. C. C. Davidson, long afterwards recalled (and perhaps embellished) one such occasion. Sinclair’s secretary, the formidable Miss Pettigrew, had asked him to come to see the Chief. ‘When I enquired how I should come, she told me through the office of the sanitary engineer. I went to that entrance and passed through the rooms with lavatory pans and baths etc., and through a double door.’ Met by Miss Pettigrew, Davidson was ushered ‘into a room that was quite out of this world . . . There was a mother-of-pearl handled pistol on a round table in the middle, a cigar box, a Turkish carpet with so deep a pile that you nearly got lost in it, and a handsome desk behind which sat “C”.’³²

Relations with other agencies

One issue which surfaced during the 1925 Secret Service Committee proceedings was that of SIS’s domestic activities. Reinforcing his argument for the creation of a unified secret service, Sinclair told the committee that it was ‘impossible to draw the line between espionage and contre-espionage, for both were concerned solely with foreign activities’. MI5, for example, ‘looked to him to obtain abroad information relating to spies working in the United Kingdom and were then supposed to follow it up in this country; but they had no “agents” and had to rely on informers and the interception of letters in the post’. Following this statement, Sir John Anderson asked did SIS ‘at present employ any agents in the United Kingdom?’ With a slight air of evasion, Sinclair replied ‘that as neither M.I.5 nor Scotland Yard were prepared to do so, he had been compelled to make his own arrangements in this respect for checking information received from abroad and had done so successfully’. At the committee session devoted to examining co-operation (or otherwise) between SIS and Special Branch, Wyndham Childs had complained about Sinclair’s unilateral employment of an agent in England who in Childs’s view, moreover, had provided unreliable information. At a subsequent meeting, Anderson once again ‘expressed concern at C’s activities in this country, which he thought, if not curtailed, might sooner or later lead to trouble’.³³ So it did.

Towards the end of 1925 Valentine Vivian’s new Section V began to handle counter-intelligence and counter-Communist work. Liaison with the India Office and Scotland Yard was transferred from Section I (which continued to process work for the Foreign Office). The new section took over the running of what became known as the ‘Casuals’: United Kingdom-based sources, including Desmond Morton’s existing network acquired through Sir George Makgill and other contacts. Morton, indeed, as head of Production, retained a close interest in the work of the section, which overlapped with that of both Scotland Yard and MI5. Following the recommendations of the 1925 Secret Service Committee, SIS endeavoured to improve liaison particularly with the counter-subversion experts, Captains Hugh Miller and Guy Liddell, in Scotland Yard’s semi-autonomous section SS1, which was loosely part of the Special Branch. In April 1926 Sinclair proposed to Childs that Vivian should actually be seconded to SS1, though nothing came of the suggestion. The following month the British General Strike conclusively demonstrated to Sinclair’s satisfaction the sinister links between international Communism and domestic labour unrest. On 13 May, the day after the nine-day stoppage had been called off by the trade union leadership, Sinclair sent a draft memorandum to Childs ‘showing the connection of the Soviet Government with the Trades Unions’. Linking Soviet statements about labour activism, British trade union attendance at international workers’ conferences and organisations such as the Anglo-Russian Trade Union Unity Committee, the evidence gathered by SIS proved ‘beyond doubt’ that the idea for the General Strike had been ‘conceived many months ago at Moscow’; that the Soviet ‘directors of the movement’ had ‘found facile accomplices’ in British trade unionism; and that ‘through the combined efforts of these unscrupulous people, the responsible Trade Union leaders have been exploited and swept along’.

Sinclair (who copied the paper to Bland at the Foreign Office) told Childs that he hoped the occasion would not arise which would ‘necessitate’ it ‘being made use of ’. He advised him that, if it were to be used, Foreign Office permission would first have to be obtained as, in his opinion, ‘its publication in any form would entail a severance of diplomatic relations with the Soviet Government’. Since Sinclair described his document as having been ‘set out in a popular and elementary form’ (evidently suitable for publication), and he appears also to have volunteered its transmission to Childs, it is not clear how seriously we should take his hope that the necessity for using it would ‘not arise’. But it is obvious that he was well aware of the potential political ramifications which intelligence-based revelations from anti-Communist operations might provoke. So was the government. In March 1927, the Prime Minister, Stanley Baldwin, reconvened the Secret Service Committee to examine ‘the state of affairs at Scotland Yard’. At the first meeting Sir William Tyrrell explained that Baldwin’s ‘principal source’ of concern ‘was the fear that the political work at Scotland Yard might at any moment give rise to a scandal, owing to the Labour Party obtaining some plausible pretext to complain that a government department was being employed for party politics’. Tyrrell further suggested that ‘Scotland Yard’s anti-red activities’ might be ‘handed over to somebody who was not “on the books”’. In a subsequent letter he was more explicit, recommending ‘the transfer to S.I.S.’ of all the relevant ‘members of the staff of Scotland Yard’. Tyrrell clearly shared the desire for an amalgamated intelligence organisation, and, as he assured Sinclair in May 1927, he ‘never missed an opportunity . . . of taking advantage of any opening in order to bring it about’. Over the first two meetings, however, Sir John Anderson, defending his departmental interests (and backed up by Hankey and Fisher), argued against Tyrrell, emphasising ‘the necessity for retaining in the hands of the Home Secretary the control of any civil measures for the internal security of the country’. Rather than SIS taking over the ‘political work’ of Special Branch, he suggested that it might be concentrated in MI5.³⁴

By the time the committee met again, the Arcos raid on 12 May 1927 had once more highlighted the problems of intelligence co-ordination as well as the considerable costs of its political fall-out. Arcos, the All-Russian Co-operative Society Limited, through which all Soviet businesses operated in the United Kingdom, was widely (and rightly) regarded as a front for Soviet propaganda and subversion. From the early 1920s both SIS and MI5 had taken a close interest in the company and its headquarters at 49 Moorgate in the City of London. From October 1926 an Arcos employee (‘a British subject of undoubted loyalty’) had passed information to SIS’s Bertie Maw, who worked in Morton’s Production branch. In March 1927 the informant provided evidence that a British army signals training manual had been copied in the Moorgate office .³⁵ Since (as Sinclair reported later) this ‘concerned an act of espionage against the Armed Forces’, SIS passed the evidence over to MI5 who, having satisfied themselves that the evidence was genuine, on 11 May set it before the uncompromisingly anti-Communist Home Secretary, Sir William Joynson-Hicks. He, in turn, persuaded the Prime Minister to authorise a raid on the Arcos offices, which, hastily organised and poorly executed, took place the following afternoon.³⁶

No significant evidence of Soviet espionage was discovered. At SIS Sinclair and Morton were furious about the raid, which, apart from anything else, ruined Section V’s continuing operations against Arcos. On 23 May the Cabinet resolved to break off diplomatic relations with the USSR, and, in the absence of any bona fide evidence from the Arcos offices, decided to use signals intercept evidence to justify the break. There was a stormy debate in the House of Commons on 26 May, during which Vivian, rather like Woollcombe three years earlier, sat in Sir Austen Chamberlain’s room ‘writing answers to scribbled questions on which the Foreign Secretary required information’. In Christopher Andrew’s words, the debate on the affair ‘developed into an orgy of governmental indiscretion about secret intelligence for which there is no parallel in modern parliamentary history’. Alerted to the vulnerability of its diplomatic communications by these revelations and the publication of six intercepted telegrams in a subsequent White Paper, Moscow adopted the much more secure ‘one-time pad’ method of encryption and robbed Britain of one of its most valuable intelligence assets.³⁷

Sinclair as Director of GC&CS in 1927 took a rather different view of the public use of intercept evidence than he had done as Director of Naval Intelligence in 1920. On the day of the Commons debate he sent a ‘personal & urgent’ note to Tyrrell stating that there was a document from the Arcos offices which provided ‘direct proof of the participation of members of the Soviet Legation in revolutionary activities in this country’. But it was too late to stop the revelations. Sinclair complained afterwards that ‘had the existence of this document been known in time, and especially if there had still been a possibility of obtaining additional evidence through further searches’, the publication of the decrypted telegrams could have been avoided. As it was, their publication had been ‘authorised only as a measure of desperation to bolster up a case vital to Government’. Sinclair observed that the whole affair demonstrated ‘the danger which is caused by the absence of any central control or authority’. While ‘The Secret Service’ was ‘spoken of as though it were one body’, in reality it was three separate organisations (SIS, MI5 and Special Branch), ‘each with its peculiar objectives, prejudices, methods and limitations’. The remedy, he asserted, ‘lies in the unification of these three bodies’. Sinclair repeated this opinion to the Secret Service Committee. Although both Tyrrell and Fisher took the view that co-operation between the agencies had broken down, Anderson ‘did not think the episode strengthened the claim for any radical alteration of existing arrangements’ and the committee adjourned in June 1927 without making any recommendations at all.³⁸

But the problem of overlap and inter-agency relations remained, especially as SIS continued to monitor Communist activity at home as well as abroad. During 1927 Desmond Morton was heavily involved in a lengthy operation which contributed to the conviction in January 1928 of Wilfred Macartney and a German Communist, Georg Hansen, for offences under the Official Secrets Act. Macartney, who had worked for MI1(c) under Compton Mackenzie during the war, was as much an inept petty criminal and confidence trickster as a spy. Indeed, Mackenzie afterwards referred to him as being in jail for ‘comic opera espionage’. But the evidence against him, especially as detailed by Morton (who appeared before the court as ‘Peter Hamilton’), linked him through Hansen to Arcos and Soviet intelligence.³⁹ Morton’s interest in the Macartney case was heightened by his position, in addition to his Production role, as head of another new SIS department, Section VI, formed during 1926-7 to gather intelligence on the economic preparations for war of potential enemies including Germany and the Soviet Union.⁴⁰

Like Section V, Section VI was closely concerned with Communist activities at home as well as overseas, and Morton was also involved in a collaborative operation run by SIS and MI5 from 1925 investigating William Norman Ewer, the foreign editor of the Daily Herald, who was suspected of running a Communist espionage network. While SIS kept watch on the group abroad, MI5 ran postal and telephone surveillance at home. In the spring of 1929 Sinclair told the Foreign Office that the operation conclusively proved that Ewer’s group ‘were conducting Secret service activities on behalf of, and with money supplied by, the Soviet Government and the Communist Party of Great Britain’. In 1928 Albert Allen (an ex-policeman whose real name was Arthur Francis Lakey) told MI5 that two Special Branch men had been working for Ewer since 1922, which led to the arrest in April 1929 of Inspector Ginhoven and Sergeant Jane, along with an ex-policeman, Walter E. Dale. Among the evidence seized was a diary kept by Dale which revealed that between 1922 and 1927 ‘unremitting surveillance’ had been ‘maintained by Dale and his friends upon the premises and personnel of S.I.S and of the Code and Cipher School’, that ‘laborious efforts were made to identify and trace to their homes officers and members of the secretarial staff’ of both organisations, ‘and that the move of both offices . . . to joint premises at Broadway Buildings under a common style was accurately observed and recorded’. One result of this was the removal from the publicly available Post Office London Directory of the anodyne entry ‘Government Communications Ltd’ among the tenants of Broadway Buildings which had appeared in the 1928 and 1929 edition listings.

Allen also reported to MI5 that in 1923 a secretary at SIS’s Melbury Road headquarters, Mrs Moon, had been targeted by Ewer’s agent, Rose Edwardes, who approached the woman ‘representing herself to be a member of the American Intelligence Service’. She offered Moon £5 a week to work for her, ‘and a good bonus for any useful pieces of information she might be able to obtain’. But the SIS secretary ‘apparently got nervous and eventually refused to take up the work’, although over ‘a number of conversations’ Edwardes had apparently been ‘able to find out a good deal of what went on at Melbury Road so far as it was known to Mrs Moon’. Moon had at the time reported the approach to the authorities but, reflected Jasper Harker of MI5, she had ‘suppressed a good deal’ and had not been ‘anxious to give such information as would put us on the track of the mysterious lady from the American Secret Service who was supposed to have approached her’.⁴¹

This was by no means the only suspected Communist targeting of SIS. Another intriguing case concerned the four Lunn sisters, all born in Russia of an English expatriate family, whom Desmond Morton asked MI5 to report on in August 1925. Edith, the eldest, regarded as a committed Bolshevik, had worked as a secretary for the Comintern in 1919 and, by 1925, was travelling about Britain with a known Soviet agent, Andrew Rothstein, ‘as husband and wife’. The next sister, Lucy, was said to have been working as a secretary for SIS’s Near Eastern organisation since 1919. Helen, the third sister, had worked as a ‘lady translator’ at the Government Code and Cypher School since about 1920, while the youngest, Margaret, had briefly worked as an SIS secretary in Helsinki, before being dismissed for suspected espionage based on Communist sympathies. But she, too, afterwards got a job for a while as a translator with GC&CS. In this unusual case, guilt by association was evidently not assumed. In March 1926 Morton told MI5 that he had consulted Sinclair, who wanted no further action to be taken. He was, it seems, satisfied that both ‘Lunn girls . . . employed under S.I.S.’ (Lucy and Helen) were ‘quite sound from a security standpoint’.⁴²

The revelations about Ginhoven and Jane intensified Sinclair’s desire for the rationalisation of British intelligence, including (as he caustically observed in May 1929 to Sir Ronald Lindsay, Permanent Under-Secretary at the Foreign Office) ‘the radical reorganisation of the Special Branch on a basis allowing for a proper realisation of the intricacy, delicacy and secrecy of the subjects dealt with’. Exchanges between SIS and Special Branch in early 1929, following the appointment of a new police Assistant Commissioner, Trevor Bigham, indicate their respective roles. SS1 in Scotland Yard performed ‘the civil work of a Home Intelligence Service’ (while MI5 covered the military side). Sinclair told Bigham that during 1928 SIS had supplied 908 reports to the Special Branch, including 412 about individuals, 299 about organisations, seventy-eight about ‘arms traffic’ and eight concerning the ‘forgery of British currency’. Reviewing the Special Branch for Sinclair in January 1929, Vivian observed that it existed to combat a ‘special type of crime’, which ‘may be described as one vast conspiracy to subvert the existing social order and the Constitution by violent means’. He told Sinclair that SS1 not only possessed ‘an almost unequalled knowledge of the subject in all its ramifications, but the cordial co-operation of S.I.S.’. But serious practical difficulties arose from the attitude of Colonel J. F. C. Carter, the Deputy Assistant Commissioner directly responsible for Special Branch, who in Vivian’s opinion was ‘hardly competent for the task’ and ‘lived in a mental atmosphere narrowly circumscribed by the exigencies of local information and concrete Police action’. Carter, in fact, had more counter-intelligence experience than Vivian, having worked with both Hoare (in Rome) during the war and Sir Robert Nathan in 1921. Some progress towards co-ordination was made in April 1929 when an SIS officer was appointed joint head of the SIS and Special Branch Registries with the aim of forming ‘a “common pool” of information on the various aspects of the one subject (Communism)’ and facilitating the efficient and secure exchange of ‘secret papers’.

Carter, meanwhile, became extremely suspicious of SIS’s growing domestic network of Casuals, which was expanded during 1929 by Morton’s recruitment of Maxwell Knight, a fervent anti-Communist, mildly eccentric jazz musician and keen naturalist who had worked for Sir George Makgill. According to Morton, Knight had ‘a small amateur detective or secret service in London, consisting of about 100 individuals in all walks of life, many of whom speak foreign languages’. He also claimed that, ‘when required to for his previous masters’, Knight ‘and two friends burgled, three nights running’, the offices of Communist and Labour Party organisations in Scotland. Knight was taken on, initially for a three-month trial, but after Morton had sent him around the country to gather information on Communist organisations he reported that ‘with every passing month MK has got his agents nearer and nearer the centre of affairs’ and Sinclair approved his continued employment. Carter, however, soon got wind of this expanded operation and was understandably aggrieved at SIS muscling in on his territory. Indeed, if a report by Knight of a meeting over lunch with the Deputy Assistant Commissioner on 23 July 1930, as passed on by Morton, is anything to go by, Carter was incandescent with fury about the development. He accused Morton (whom he called a ‘worm’) of ‘exceeding his duties’. The policeman declared that he would make Morton ‘go on his knees to him on the carpet at Scotland Yard before he has done’. Carter, whose political sympathies appear to have been rather more left-wing than those of either Knight or Morton, contended that Morton was ‘doing the whole of this thing for the Conservative Party’. He observed that Ramsay MacDonald’s second Labour government (which had come into power after Labour won the most seats, though not an absolute majority, in the May 1929 general election) were ‘against this sort of work’ and he had ‘to carry out their policy’.

Although a meeting was held in October between Vivian and Carter at which (according to Vivian’s record of it) it was agreed that SIS should continue to collect information through domestic sources, ‘in consultation’ with Scotland Yard, the dispute ground on until Sir John Anderson (whose department was administratively responsible for the police) intervened and summoned Sinclair to the Home Office in January 1931 to what turned out to be a very uncomfortable meeting about the Casual organisation. Recalling Sinclair’s evidence to the 1925 Secret Service Committee, Anderson noted that when the organisation had been started ‘it had been represented as a small one designed for the purpose of checking certain items of C’s information from abroad’. It now appeared that it ‘was expanding and as such was proving a source of grave embarrassment to the Home Office’. Anderson complained that ‘endeavours had been made to recruit Civil Servants’, a procedure ‘that he could not possibly countenance’. One of the ‘principals in the organisation [evidently Maxwell Knight] was, or had been, connected with the British Fascisti and was under suspicion of working for political organisations, such as the Conservative Party’. Anderson further ‘pointed out the danger of a Government organisation such as S.I.S. being in any way associated with such undertakings’. Sinclair, on the defensive (and presumably briefed by Morton), said that the ‘organisation at present consisted of only five individuals including the principal referred to. The latter had not been connected with the British Fascisti for the last three years, and documentary proof could be produced to support this. Neither was he connected with any of the political secret organisations.’ On the matter of using civil servants, Sinclair admitted that two officials ‘had been recruited temporarily to assist in pursuing certain lines of enquiry but that their services had long since been dispensed with’. Both Scotland Yard and MI5, he insisted, ‘were fully aware of the existence and objects of the organisation and Scotland Yard had agreed in the arrangements, which for some months past had been working smoothly’. Anderson does not seem to have been reassured, and, a little ominously, concluded by saying that while ‘he did not wish to appear obstructive’ he proposed to convene a further meeting with Sir Robert Vansittart (Permanent Under-Secretary at the Foreign Office since January 1930), Kell, Trevor Bigham and Sinclair, ‘in order that there might be no misunderstanding in regard to this matter’.

Back at SIS Sinclair circulated a summary of the meeting to Menzies, Morton and Vivian. Vivian minuted, ‘we are up against bare faced distortions of the truth’, and Morton provided a series of comments on Anderson’s charges, broadly backing up Sinclair’s points, though he contradicted the assertion that two civil servants had been temporarily employed. ‘No endeavour’, he wrote, ‘has ever been made to recruit a Civil Servant.’ A ‘private friend’ of the ‘Intermediary’ (Knight) had ‘volunteered in his spare time to collect certain information quite unconnected with his Department’, but this ‘was stopped’ and orders had been ‘given that no Civil Servant should be employed’. He confirmed that the organisation comprised only the ‘Intermediary’ and four agents, ‘and all efforts to obtain information’ were ‘confined to these five, with the negligible exception that occasionally the Intermediary hears certain scraps of information in social talk, supplementing what had already been received from the four agents’. Morton also confirmed Sinclair’s answer about Knight’s alleged membership of the British Fascisti, though the detail of the answer is open to question and perhaps Morton himself had been misled on this point. Knight had certainly been a member of the British Fascists, serving as Assistant Chief of Staff of the organisation as well as its Director of Intelligence. Whatever political views he had held at the time, in the early 1950s Knight claimed that he had joined the Fascists at Makgill’s request in 1924, merely ‘for the purposes of obtaining information’, and had remained a member until 1930 ‘when it more or less became ineffectual’.⁴³

Relations between SIS and Special Branch took another dip in the spring of 1931 when Bigham unilaterally decided to dispense with the services of the officer who had jointly run the two agencies’ registries for the previous two years. Sinclair thought this ‘a retrograde step calculated to destroy a valuable system, built up, not without difficulty, for the purpose of implementing the recommendations of the Cabinet Secret Service Committee’. After Bigham had refused to reconsider his action, Sinclair complained to Vansittart, noting that he would ‘endeavour to continue to co-operate with Scotland Yard, but if trouble arises in connection with any failure of such co-operation, I must decline to be held responsible for it’. In the light of this serious breakdown in relations, the Secret Service Committee (now comprising Anderson, Fisher, Hankey and Vansittart) was reconvened ‘to discuss the difficulties which had arisen in the inter-relation between C’s organisation and Scotland Yard’. Bigham and Carter told the committee ‘that S.S.1 (Captains Miller and Liddell) was superfluous and their work in so far as it was necessary could be done by Colonel Carter himself ’. They also regarded the section ‘as being an outpost of C’s organisation and liable to involve Scotland Yard in difficulties’.⁴⁴

After the committee’s first meeting, Vansittart bravely organised a party for its members, as well as Scotland Yard and SIS people, which Sinclair afterwards thought had succeeded ‘in clearing the air a bit’. Bigham and Carter, however, remained adamant that Miller and Liddell had to go. Sinclair, who saw them as ‘experts in considering foreign subversive movements in relation to affairs at home and on a much broader and more important basis than that open to the Police side of Special Branch’, could not employ them himself. There would be nothing for them to do, since SIS’s liaison with Special Branch was satisfactorily handled by Vivian and would continue to be so. He proposed, therefore, that they might be placed directly under the Home Office.

In the end it was Sir John Anderson who came up with the solution by reviving his 1927 suggestion that Colonel Kell and MI5 took over ‘S.S.1 and all its duties’. Since MI5 was ‘already responsible for counter espionage not only for the fighting services but for all government departments’, this was ‘a logical extension of its duties’. Thus there would ‘be only two organisations dealing with secret service work, C covering foreign countries, and M.I.5 the Empire’.⁴⁵ Although this ignored Indian Political Intelligence, which continued to serve its specialist function, so it was to be. SIS was stripped of its domestic operations, and the Casuals were transferred to MI5, which ceased to be a branch of the War Office and adopted its modern title of the Security Service. Guy Liddell and Maxwell Knight went on to have very distinguished careers in MI5, while Section V under Vivian provided liaison between the two agencies. The new arrangement came into force on 1 October 1931.⁴⁶ Thus, exactly twenty-two years after their creation, the Foreign and Home branches of the Secret Service Bureau, now the Secret Intelligence Service and the Security Service, took on their modern form and distinct spheres of responsibility which were to survive for at least the next eighty years.

Spilling the beans

One way of cashing in on secret work was to write or lecture about it for money. A perhaps predictable consequence of British secret service successes during the First World War was the desire by some of those involved, both officers and agents, to tell their stories to a wider public. In March 1919 Norman Thwaites, acting head of station in New York, told Sir William Wiseman (who was in Europe) there were ‘signs that we are going to have an influx of “British Secret Service” agents who propose to lecture on their experiences’. One Nicolas Everitt, who had apparently worked for Naval Intelligence, had already arrived, but Thwaites assured Wiseman that the New York office had already ‘cramped his style’ by planting stories in the World newspaper ridiculing him. Thwaites thought Everitt was ‘quite harmless and a good patriot who needs the money, but his boastful talks’ were ‘in bad taste’. Everitt’s excuse was that Blinker Hall, who had successfully stood as a Conservative MP in the 1918 general election, had ‘set the example by telling tall stories during his election campaign of the wonders performed’.⁴⁷ Cumming’s own addiction to secrecy meant that he had offered no such encouragement to his subordinates. Years afterwards, Pay Sykes wrote that Cumming ‘took a poor view’ of Hall’s action. One day, he recalled, sitting in a traffic jam outside the National Gallery, Cumming ‘turned to me & said “Sykes, I am going to publish my memoirs.” “Really, Sir,” I queried. “Yes” he said. “The book will be quarto size, bound in red, top-edge gilt, subtitled ‘The Indiscretions of the CSS.’ It will have four hundred pages, all blank.”’⁴⁸

In 1928 Somerset Maugham’s Ashenden, or the British Agent was published, ‘founded’, he wrote, ‘on my experiences in the Intelligence Department during the war, but rearranged for the purposes of fiction’.⁴⁹ This was another way of exploiting clandestine government work, and, by turning it into fiction, perhaps hoping to evade accusations of revealing too much about the structure and workings of British intelligence. The book seemed clearly autobiographical. The central character, Ashenden, was, like Maugham, a novelist and dramatist based in Switzerland. Subsequent commentators, moreover, have endeavoured to link characters in the book with actual people. Ashenden’s superior, R (the single-letter title itself echoing Secret Service practice), for example, has been identified as John Wallinger, who took Maugham on for his War Office intelligence network in 1915. Maugham observed that the work of an agent was ‘on the whole extremely monotonous’. Much of it was ‘uncommonly useless’ and, since the material it offered for stories was ‘scrappy and pointless’, the author himself had ‘to make it coherent, dramatic and probable’.⁵⁰ One unsympathetic reviewer, Orlo Williams (a clerk of the House of Commons with some intelligence experience), wanly thought Maugham had undoubtedly captured the monotony of the work. He noted that Ashenden ‘was not a spy, but an agent, and nobody who read agents’ reports during the War will be surprised that his work was as dreary as these reports’. Maugham had ‘done something’ to ‘get what excitement there might have been out of such experiences’, but the result was ‘only moderately entertaining’.⁵¹

Sir Paul Dukes, an enthusiastic self-publicist, in part supported himself through lecturing and journalism, much of which recycled the same basic material. In 1922, describing himself on the title page as ‘Formerly Chief of the British Secret Intelligence Service in Soviet Russia’, his first book of Russian reminiscences, Red Dusk and the Morrow: Adventures and Investigations in Soviet Russia, was published. Despite accusations from the Soviet government that he had plotted to overthrow it, Dukes claimed that he ‘went to Russia not to conspire but to inquire’. In the book he recounted how he had been recruited by the Secret Service, but was careful to disguise some details of MI1(c). Taken to a building ‘in a side street in the vicinity of Trafalgar Square’, he had been ‘whisked’ in an ‘elevator’ to ‘the top floor, above which additional superstructures had been built for war-emergency offices’ - a description which more or less fitted Cumming’s wartime Head Office at Whitehall Court. He described being taken to see the Chief, but dramatically broke off his narrative as he entered Cumming’s office. ‘There are still things’, he wrote, ‘I may not divulge.’ By 1930, when the Tatler published an eight-part ‘thrilling series of experiences’ about ‘Secret Service in Red Russia’ by Dukes, he divulged a little more. Again he recounted being ‘whisked in a lift to a pile of offices built on top of the roof ’. There, ‘in a dark office with a low ceiling, the light behind him, sat an officer in admiral’s uniform’. Thus promoting Cumming to the rank of his successor, Dukes added that ‘the Chief was known to those who knew him by the cryptic sign of a single letter of the alphabet’.⁵² Although Vivian thought Dukes’s articles ‘appear to be sailing pretty near the wind’, no action was taken about his revelations.

In May 1937, when Dukes was ‘writing further reminiscences of the year 1919’, he told Vivian that ‘in 1920 and 1921’ Cumming had allowed him ‘to consult the files of my reports from Russia of that year for articles’ he was ‘writing at the time’. Now he wanted to ‘consult them again’ as it ‘would be a great convenience . . . in establishing certain events and dates’. Illustrating what would be a continuing problem for historians of SIS, Vivian told him that a search had been made for the documents, ‘but without any result I am afraid. All records prior to the year 1920 have, as I think you know, been destroyed, and, as regards those of 1920 and 1921 relating to your case, I am told that either they have been summarised and destroyed or that they are so lost in general files that it is impossible to dig them out.’

Dukes’s reassembled and expanded reminiscences were published in The Story of ‘ST 25’, dedicated (in 1938) ‘To the memory of the Chief ’. Again, he recounted being taken by lift to a ‘roof-labyrinth’ to meet Cumming, and, though he still did not name him, he lifted the veil of secrecy yet a little further than before. ‘To his subordinates and associates,’ he wrote, ‘he was invariably known and signed himself by a single letter of the alphabet in ink of a particular hue’. Cumming, asserted Dukes, had ‘read and approved of these pages’, including all the information ‘here related about him and the roof-labyrinth, but I never received permission to mention his name, which probably would have been little known to the general public anyway’.⁵³ Wisely he submitted a draft of chapter one of the book (covering his appointment and briefing in London) to SIS and had it returned with no redactions requested. ‘I cannot imagine any of it doing any harm’, wrote Vivian, ‘in view of the original book “Red Dust” [sic].’ Dukes’s writings, however, illustrate a perennial feature of the memoir problem which we might call ‘revelation-creep’, whereby successive versions of secret service stories incrementally reveal more and more, but at each stage not quite enough to provoke official action.

Dukes’s careful submission of material prior to publication probably owed something to the difficulties Compton Mackenzie had incurred in 1932 with his book Greek Memories. This was Mackenzie’s third volume of wartime memoirs, in the second of which, First Athenian Memories (1931), he had recounted his first few months in late 1915 working for Mansfield Cumming’s Bureau. Although he revealed that ‘the real object of C’s organization’ was ‘to obtain information about the enemy’, he did not provide much detail or further identify Cumming. ‘The initial of C’, he wrote, ‘was invoked to justify everything, but who C was and where C was and what C was and why C was we were not told.’⁵⁴ Although livelier and more personal than Somerset Maugham’s fictionalised account, the book does not appear to have caused the authorities any concern, though chapter five, ‘Early absurdities of secret-service’, cannot have endeared him to all of his former colleagues in the Service. Trouble came with the much more informative Greek Memories, published in October 1932, which provoked the first (and by no means the last) prosecution under the Official Secrets Act through which the British government sought to suppress the publication of a memoir about the security and intelligence services.

The press reaction to Greek Memories focused on the revelations about Cumming. ‘Mystery Chief of the Secret Service’, ‘Capt “C’s” identity disclosed’, trumpeted the Daily Telegraph on the day of publication, 27 October. Reporting on the book, Hector Bywater, Cumming’s very successful prewar agent (a fact he did not disclose) and now the Telegraph’s naval correspondent, announced that ‘the identity of this remarkable man, who before and during the war probed the naval and military secrets of the Central Powers’, had been ‘revealed in print for the first time’.⁵⁵This sensational disclosure prompted Sinclair to get MI5 to initiate moves to have the book banned. By three o’clock that afternoon the Director of Public Prosecutions had himself telephoned the publishers and ‘suggested to them that they might like to withdraw the book, pointing out however that he was merely giving them friendly advice’.⁵⁶ The same day Sinclair sent Sir Robert Vansittart at the Foreign Office ‘a list of some points’ which were ‘considered objectionable from the point of view of national interest’, and which rehearsed the kinds of arguments which would be deployed again in similar future prosecutions. The volume blew SIS’s cover, a perennially important concern for the Service. It ‘blazons the connection between the Passport Control Department and the S.S.’. While conceding that ‘this is already known in some quarters’, the manner in which it was now explained and emphasised was ‘highly undesirable’. Mackenzie had also betrayed ‘the fact that the Section known as “M.I.1.c” in the War Office’ was ‘a cover of the S.S., thereby disclosing the identity of certain present officers of the service’, whose names were printed in the publicly available War Office List. He had given ‘the full names and particulars of a number of individuals previously employed in the S.S.’, some of whom were ‘earmarked for re-employment in case of future war, and some of whom unofficially assist the present S.S. It thereby renders both classes useless and renders those living in foreign countries liable to dangerous interference.’ Finally, the book established ‘a very dangerous precedent for present employees on leaving the Service and also for journalists, with whom the Service is of necessity in touch for various reasons’.

A memorandum prepared by SIS for the Director of Public Prosecutions listed a series of passages in the book ‘held to be objectionable on the ground that they prevent and endanger the present and future practice of the Secret Service’, the ‘whole foundation’ of which was its ‘secrecy’. The ‘lengthy and detailed statements of organisation, which may appear dull to the general reader, afford valuable links to an officer of a Foreign Secret Service endeavouring to piece together our system of working’. Personal details, ‘recorded and carefully collated by the Secret services of foreign countries’ might ‘cause the persons mentioned to become objects of retribution’ and render them useless for ‘effective service’ in the future. Sir Reginald Lane Poole, one of Mackenzie’s lawyers, asserted that the government wanted to make an example of him ‘in order to warn Lloyd George and Winston Churchill’ against using unreleased official documents in their memoirs. Someone else told Mackenzie ‘that there had been a Cabinet meeting at which the Attorney-General had announced I had destroyed the whole Secret Service . . . and that it was going to cost the country at least two million pounds to undo the harm I had done’. Whatever the reason, Mackenzie was prosecuted under the technical provision of the Official Secrets Act of ‘communicating to unauthorised persons . . . information which he obtained while holding office under his Majesty’. Mackenzie, in fact, was legally sunk by the way in which he had assembled the book, cutting and pasting lengthy passages from official documents and telegrams. He afterwards jocularly blamed his wartime secretary for suggesting making ‘a third copy’ of any documents which he ‘might one day find useful’. Without these ‘testifying documents’, Greek Memories ‘would never have been accepted as anything more than the embroidery, or even the deliberate invention, of a novelist’.⁵⁷

At the committal proceedings Valentine Vivian appeared in camera and gave detailed evidence of the passages ‘to which grave objection can be taken on Secret Service grounds’, naming sixteen individuals who as officers or agents had connections with SIS.⁵⁸He was quite roughly cross-examined by one of Mackenzie’s barristers, St John Hutchinson, so much so that Vivian prepared a ten-page expansion of his arguments for the subsequent trial. In open court Hutchinson had extracted admissions from a Foreign Office official that, although the publication of official documents was prohibited by the Official Secrets Act, he did not think ‘the public interest’ had been ‘prejudiced’ by the actual contents of the material which Mackenzie had used and that ‘the publication of these documents’ could ‘do no harm to anyone’. Evidently sensing that adverse publicity - always a problem in cases of this sort - might outweigh the exemplary value of the prosecution, the government moved to come to an arrangement with Mackenzie’s lawyers. After a conference had been held at the Foreign Office between Vansittart, the Director of Public Prosecutions, Sir Vernon Kell and Vivian, ‘at which it was decided on certain conditions not to press for imprisonment’, Mackenzie was offered a deal that if he pleaded guilty it would ‘only be a fine not exceeding £500 and £500 costs’.⁵⁹

When the case went to trial in January 1933 Mackenzie duly pleaded guilty. Extremely good character references for him were produced in court and the judge was persuaded that Mackenzie was ‘an honourable man’ who believed he was ‘doing no harm’ in publishing the documents. The judge also hoped that the case might ‘do something’ to ‘warn those who are urged to write similar books that they are offences’. Declaring that he had ‘thought deeply over the matter’ and (in the circumstances rather improbably since the matter had been settled in advance) ‘hesitated very much whether I ought to send you to prison’, he imposed a comparatively light fine of only £100, as well as ordering Mackenzie to pay £100 towards the costs of the prosecution. For The Times, the lesson from the case was that the Official Secrets Act did not exist only to restrain ‘sinister machinations’ such as ‘espionage and other felonies’, but its scope was ‘much wider’. Lending weight to Mackenzie’s supposition that the prosecution might have been aimed against political memoirs as much as secret service ones, the newspaper reckoned that it might have ‘something of a message for the authors, and in particular the autobiographers, of our own time’. It had an effect on Mackenzie. In his final volume of wartime memoirs, published eight years later, he ‘suppressed a certain amount of interesting material about espionage because, although the publication of it twenty-two years later could do no harm to anybody or anything’, he could not ‘be bothered with any more arguments about Intelligence work’.⁶⁰

In the meantime Mackenzie got his revenge with a novel, Water on the Brain (‘a deliberate caricature of Intelligence’), which savagely satirised the whole world of secret service. N, the chief of M.Q.99(E), the Directorate of Extraordinary Intelligence, warns his new recruit, Arthur Blenkinsop, that their work did not ‘consist entirely of meeting mysterious Polish countesses in old castles’. The ‘greater part of the work’ was ‘routine stuff. Card-indexing, filing, making out lists, putting agents’ reports into proper English’. The headquarters of the organisation is a detached house, Pomona Lodge, in north London which, abandoned by the service after a security lapse, was to become a home ‘for the servants of bureaucracy who have been driven mad in the service of their country’. At the time of Mackenzie’s novel, however, it was ‘not yet officially a lunatic asylum’. Here N, using ‘that green ink which is reserved for the correspondence of high officials in the Secret Service’, kept a strict eye on security. The archives, for example, had been protected by a band of ‘muscular deaf-mutes’, who had had to be dismissed ‘after the man-handling of a high official in the Home Office who had not taken the precaution to arrange beforehand with N that he was going to call and who in consequence had been suspected of being a foreign agent by these worthy fellows’.⁶¹

Another hazard for the Service lay in the overseas publication of espionage memoirs. In 1934 the reputable New York firm of G. P. Putnam’s Sons published All’s Fair: The Story of the British Secret Service behind the German Lines, by Henry Landau, who had been part of Cumming’s organisation in the Netherlands and, among other things, had helped run the Dame Blanche network. The book sold extremely well, going into seven impressions by the end of the year. ‘One of my chief objects’ in writing it, claimed Landau, was ‘to place on record the splendid services which the Secret Service agents of Belgian and French nationality rendered the Allied cause during the War’. Recognising the problem of naming agents, he asserted that he had ‘only mentioned such names as were known to the Germans through the arrests they made; others I have either changed, or not mentioned at all’. He had done this ‘in order to protect former agents in the event of another invasion of Belgium and France during their lifetime’ and maintained that he was ‘the best judge of what information would compromise them’. Since he had ‘protected their lives during the War’, he was, ‘therefore, competent now to know what can be divulged’.⁶² SIS was not so sure. One reader at the Rotterdam station considered that, with only one exception, ‘its perusal by interested German authorities’ could have ‘no repercussion on the activities of this post’. But that exception was a Dutch agent whose ‘connections with this post’ had ‘for the last ten years’ been ‘forgotten’, and it was ‘regrettable that Landau should have chosen him by name for mention in his book’. An officer in London also worried that the important agent TR/16 (whom Landau called ‘the Dane’) might be identifiable. When consulted in August 1934, however, TR/16 felt that he was at no risk at all.

In November 1934 Eric Holt-Wilson of MI5 told Stewart Menzies that Landau, apparently seeking a British publisher for his book, had approached the British literary agents Curtis Brown. Menzies wanted them warned off, ‘bearing in mind our main purpose is to prevent the publication of the newest version of the book over here’. Landau, who by now had become an American citizen, was thought to be travelling to England and, ‘in view of his close association with this office’, Menzies was ‘considering whether it would not be a good move if I interviewed him and warned him that he is running a grave risk of being prosecuted for infringement of the Official Secrets Act’. Although Landau did not then return to England, there was no British edition of his memoirs until in 1938 Jarrolds published a rather anodyne autobiography, Spreading the Spy Net: The Story of a British Spy Director, which covered his early life and wartime experiences, including a short account of ‘the Dane’. He also repeated word for word from All’s Fairhow he had met Cumming for the first time. Taken to an office at the top of Whitehall Court, he ‘was confronted with a kindly man who immediately put me at my ease. It was the Chief, Captain C., a captain in the Navy. He swung around in a swivel chair to look at me - a grey-haired man of about sixty, in naval uniform and short of stature.’⁶³

The designation of ‘C’ was information which Vivian in October 1932 had judged ‘objectionable’ in Compton Mackenzie’s book. ‘The agreed impersonal term (“C”), by which the head of S.I.S. is still known in Government Departments’, he wrote, was among the details by which ‘interested persons’ could ‘identify Sir Mansfield Cumming’s successor’. By 1934 this was evidently old news and no action was taken against Landau or his British publishers. In any case, Cumming’s successor had already passed judgment on this ex-Service officer at the time his first book had been published. In a circular to all SIS’s European and Middle Eastern stations, while placing him on ‘the Report list’ (to keep track of his movements), Sinclair effectively excommunicated the former officer. ‘Landau’, read the message, ‘was once employed in this organisation. His conduct has since been unsatisfactory and contact or communication with him should be avoided.’