The Defence of the Realm (27 page)

With SIS now prohibited from running agents inside the United Kingdom, Maxwell Knight gave up his work for SIS and transferred to the Security Service in October 1931 at the same time as SS1 was transferred from Scotland Yard. His network, known as ‘M Section', which he ran initially from a flat in Sloane Street,
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gave the Service an agent-running
capacity which was crucial to its penetration of CPGB headquarters and, from 1933, of the British Union of Fascists. Knight later moved to a flat in Dolphin Square rented in the name of his second wife, Lois Coplestone, whom he married in 1937.
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In December 1933 Kell sent what Knight described as a ‘most handsome bonus' with a ‘very encouraging message'. Knight replied:

I should like you to know how very happy I am working for the show, and also how very much I appreciate the marvellous way in which my small efforts are backed up by all concerned . . . I am heart and soul in the work (without I hope being a fanatic) and it is grand to be doing something which is really of use & which is so very pleasant at the same time.
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Knight, however, remained something of a law unto himself. He was probably the last Security Service officer who, as one who served under him later recalled, ‘would burgle premises without authority and recruit whomsoever he wished. But to his agents he was an almost mystical figure.'
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The most noticeable change in working conditions for most members of MI5 immediately after it became the Security Service was a pay cut, in line with the sweeping economies forced on Ramsay MacDonald's National Government late in 1931 by the Great Depression. By 1934, however, Service salaries had been restored to their previous levels.
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Salaries (on which no income tax was charged until after the Second World War) were paid in cash. Officers were paid in what one member of the Registry remembers as ‘lovely, crisp white fivers'. Female staff ‘all queued up for our buff envelopes at the end of each month outside the office of a rather terrifying lady, Miss Di[ck]er [Lady Superintendent], and her equally terrifying assistant, Miss Constant, who wore a monocle.'
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Despite the intimidating nature of pay-day, most surviving recollections of life in the Service before the Second World War are positive. According to Catherine Morgan-Smith who joined the Service in 1933, retiring thirty years later as the last lady superintendent:

We were a small closely-knit group, friends among ourselves, keenly interested in our work and proud of it. Best of all, the courtesy and kindness engendered by Sir Vernon and ‘Holy Willy' [Holt-Wilson] penetrated all levels of the Service and made it a happy place to work in.

. . . At Christmas Sir Vernon would sometimes take a part of the Office staff to the circus . . . At other times you might get a rather awe-inspiring invitation to dine with the Kells at Evelyn Gardens [in Chelsea, to which they had moved from Campden Hill]. When this happened to me Sir Vernon always gave me half-a-crown for a taxi home and I always took the bus and saved the half-crown
which was good money in those days.
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One former member of staff was interviewed in 1937 for a job at MI5, first by Miss Dicker, then by Kell (‘a nice man'): ‘As far as I remember he only asked me two questions. Where I had been to school and did I play any games? Wycombe Abbey and Lacrosse satisfied him and he said “You'll do” and I was in.'
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Kell's criteria, however, were not limited to family background, school and sports. As in the earliest years of MI5 recruitment, he placed a premium on foreign-language skills.
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Kell's management style was low key and paternalist. According to a former member of staff:

Working in the Office then was like being in a family firm, one felt secure . . . Sir Vernon Kell was a small quiet man rarely seen by us. He kept an eye on our behaviour though. When a young Officer, T. A. Robertson [later in charge of the wartime double agents], joined us in the early thirties he was told that he must not socialise with the girls. The Colonel [Kell] did not approve of familiarity between officers and staff. The officers were always known by their rank and surname and, of course, they called us Miss So-and-so. I worked for twelve years for Captain Liddell before he succumbed to the wartime habit of Christian names all round. In fact, the girls knew each other only by surname. I did not know the Christian names of most of my colleagues for years.
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Chief among those who broke the rule not to ‘socialise with the girls' was Eric Holt-Wilson. On 10 September 1931 he sent an application form for a job in MI5 to a Miss Audrey Stirling, telling her: ‘I shall be pleased personally to endorse your application, and to try to secure you any suitable vacancy . . .'
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Holt-Wilson, then a fifty-six-year-old widower, set out to woo the impressionable Stirling, who was over thirty years younger, as well as to recruit her. Among the qualities which he drew immodestly to her attention was his bravery in the face of danger: ‘You must remember that I have often, so often, in my life been down the steps and gazed into the dark River of Death – face to face – does the thought frighten you my darling?' Their love, Holy Willy assured Miss Stirling, was divinely blessed.
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They married not long afterwards. Overblown though Holt-Wilson's romantic rhetoric was, the marriage was happy. In 1933 Audrey became Lady Holt-Wilson, when her husband was knighted in the King's Birthday Honours List. She told Sir Eric on his retirement in 1940 that he was ‘my brave, wise, brilliant, belovedest darling'.
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From 1934 there was a modest increase in Service staff. MI5's share of
the Secret Vote, most of which was for salaries, rose from £25,000 in 1935–6 to £50,000 for 1938 and £93,000 for 1939–40.
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In the same year the Security Service moved from Cromwell Road to Thames House on Millbank, still a relatively new building. Sixty years later most of Thames House became the Security Service headquarters. In 1934, however, the Service occupied only the seventh floor and shared the lifts with commercial tenants of the building.
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At the end of 1938 the Security Service's two branches were increased to four. A Branch continued to be responsible for administration and the Registry. B Branch dealt with counter-espionage and counter-subversion; Knight's ‘M Section' was incorporated into the Branch as B1F.
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A newly created C Branch vetted candidates for some sensitive posts in Whitehall and foreign-born candidates for commissions in the armed forces, but it had only one officer and no means of enforcing its decisions. D Branch, also newly established, oversaw protective security in munitions and aircraft factories, arsenals and dockyards, with a vaguer responsibility for railways and electricity supply. Its three officers were too few, however, to have much impact. For some years Handley Page, a major military aircraft manufacturer, had a German chief designer. All efforts to dislodge him were ignored until he was interned during the Second World War.
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The total number of Service officers increased from twenty-six in January 1938 to thirty a year later and thirty-six in July 1939. Secretarial and Registry staff grew from eighty-six in January 1938 to 103 in January 1939 and 133 in July 1939.
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The growing number of Security Service investigations, combined with greater use of the telephone by suspects, often speaking in foreign languages, put increasing strain on the General Post Office resources for operating HOWs. Frederick Booth, who was employed by MI5 on ‘special censorship' at the GPO, later recalled:

In 1934 the ‘checks' on telephone lines were increasing rapidly and the only method of recording the conversation was by handwriting. The results were not accurate or useful and the written returns showed increasingly the remark ‘Conversation in a foreign language – not understood.' Complaints were received and the matter was referred to the G.P.O. Engineering Department, but no solution was obtained.

Through an intermediary Booth began negotiations with the Dictaphone Company, which eventually provided a system for recording telephone
conversations. He was congratulated personally by both Kell and the GPO Director General, Sir Thomas Gardner.
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The clear division of responsibility established between the Security Service and SIS in 1931 improved the working relations between them. As part of the 1931 reorganization, SIS established a new Section V (counterintelligence) under Valentine Vivian (later deputy chief of SIS), which liaised with MI5. According to a later internal MI5 history, the liaison worked well until the outbreak of the Second World War, due largely to ‘the goodwill and readiness for give and take between the officers concerned at all levels' in both Services.
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From 1934 Section V shared with the Security Service decrypted Comintern radio messages which provided details of Moscow's policy directives and secret subsidies to the British Communist Party.
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Among the Security Service recruits in the few years before the Second World War were two future DGs, Dick White and Roger Hollis, neither of whom had the military background common to most Service officers. White also went on to become chief of SIS. After graduating in history from Christ Church, Oxford, where he won the Gladstone Memorial Exhibition and an athletics Blue, he had spent two years at American universities before becoming a sixth-form teacher at Whitgift School. White had attracted the attention of Malcolm Cumming who, before joining the Security Service in 1934, had met White while both were involved in running a British public school tour of Australia and New Zealand. Cumming, who had been educated at Eton and Sandhurst (‘recreations: riding, hunting, point-to-point racing'), told Harker that during the tour he had formed a ‘profound respect' for White's ‘ability and judgement'. Though White was likely to go to the top of the teaching profession, ‘. . . I happen to know he often wishes that his work was of a nature that could bring him into closer touch with current world affairs, which really form his natural interest.'
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Harker wrote to Kell in August 1935:

Re Dick White. I am sorry to have to worry you on your holiday but I have seen this young man and I think he is what we want . . . At first appearance, his manner is a little shy and diffident, but once you get over that, I think you will agree that he is a young man both of character and very wide travel experience for one so young.

The fact that Harker contacted Kell during his summer holiday indicates how closely the Director personally supervised recruitment. Harker assured Kell that White fully understood ‘that nothing is definite in any sense unless and until you have seen him and approved of him as a suitable candidate'.
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After being accepted by Kell, White spent several months in Munich and Berlin improving his German and building up an impressive range of
German contacts before formally beginning work in the Security Service in January 1936.
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Roger Hollis joined the Security Service in June 1938, two and a half years after White. He came from a prominent Anglican family; both his father and elder brother were bishops. Hollis left Worcester College, Oxford, without taking his degree to begin a business career in the Far East. In 1937 he was advised to return to Britain for health reasons, and contacted the Security Service to say that he had been told there was a vacancy for ‘someone with a practical knowledge of the Far East'.
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Hollis struck his initial Service interviewer as ‘A rather nice quiet young man, whose only qualifications were a knowledge of the northern Chinese language and Chinese and Japanese commercial industry. ?Might perhaps be given a job.'
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Kell decided to recruit him.

By the time Hollis joined the Service, White had already demonstrated one quality which Kell conspicuously lacked – the ability to form close and friendly relationships with senior Whitehall officials. Malcolm Cumming had noted when recommending White: ‘I know from personal experience of the remarkably successful way in which Dick White dealt with Dominion Premiers and representatives of Government Departments, and that he was afterwards congratulated by the authorities upon his work.'
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Once in the Security Service, White quickly impressed the PUS at the Foreign Office, Sir Robert Vansittart, finding him ‘eager, sometimes over-eager' to be briefed on the intelligence the Service was obtaining from within the German embassy.
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Despite White's contacts with Vansittart, the Security Service during the 1930s was a more introverted agency than SIS. Kell was still a less influential figure within Whitehall than the far more clubbable Quex Sinclair, Chief of SIS. Sinclair's surviving papers from the 1930s consist largely of elaborate menu cards from private dinners, some hosted by himself, at the Savoy and other exclusive locations. He treasured notes from appreciative guests such as Admiral Percy Noble, who thanked him for ‘the best dinner I have eaten in years', and Admiral Bromley, who complimented him enthusiastically on his ‘excellent' wines. ‘C' could count on the support of the three most influential civil servants of the 1930s: Vansittart at the Foreign Office, Sir Maurice Hankey, cabinet secretary from 1916 to 1938, and Sir Warren Fisher, PUS at the Treasury and head of the civil service from 1919 to 1939. Together Vansittart, Hankey and Fisher composed the Secret Service Committee which had at least the notional responsibility for overseeing the intelligence services. When Sinclair fell ill in March 1939, well before it was clear that his illness would prove fatal, Fisher (who had,
admittedly, a sometimes effusive epistolary style) wrote him an extraordinarily affectionate letter which began ‘Hugh dear' and ended ‘Bless you, with love, Warren'.
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It is impossible to imagine Kell receiving a letter from Fisher which began ‘Vernon dear'.