The Defence of the Realm (4 page)

Section A

The German Threat, 1909–1919

Introduction

The Origins of the Secret Service Bureau

The Security Service (MI5) and the Secret Intelligence Service (SIS or MI6) began operations in October 1909 as a single organization, the Secret Service Bureau, based in premises rented by a private detective, retired Chief Inspector Edward ‘Tricky' Drew, at 64 Victoria Street, London SW
_I
, opposite the Army and Navy Stores.
¹
The Bureau was staffed initially by only two officers, the fifty-year-old Commander Mansfield Cumming RN and an army captain fourteen years his junior, Vernon Kell, who met for the first time on 4 October when, according to Cumming's diary, they ‘had a yarn over the future and agreed to work together for the success of the cause'.
²
Cumming and Kell later parted company to become the first heads of, respectively, SIS and MI5. For several months, however, they were based in the same room, struggling, with minimal resources, ‘to deal both with espionage in this country and with our foreign agents abroad'.
³

The Secret Service Bureau owed its foundation to the recommendations of a sub-committee of the Committee of Imperial Defence, the chief defence planning council of the realm, which had been instructed in March 1909 by the Liberal government of Herbert Asquith to consider ‘the nature and extent of foreign espionage that is at present taking place within this country and the danger to which it may expose us'.
⁴
It reported on 24 July: ‘The evidence which was produced left no doubt in the minds of the subcommittee that an extensive system of German espionage exists in this country and that we have no organisation for keeping in touch with that espionage and for accurately determining its extent or objectives.'
⁵
Most continental high commands would have been surprised to discover that British intelligence was in such an enfeebled state. There was a widespread myth that, ever since the days when a secret service run by Queen Elizabeth I's Secretary of State, Sir Francis Walsingham, had successfully uncovered a number of Catholic plots, British intelligence, like the British Empire, had grown steadily in size and influence, spreading its tentacles across the globe.

The myth was encouraged by Edwardian spy novelists. The most prolific and successful of them, William Le Queux, allegedly Queen Alexandra's favourite novelist, assured his readers: ‘The British Secret Service, although never so prominently before the public as those unscrupulous
agents provocateurs
of France and Russia, is nevertheless equally active. It works in silence and secrecy, yet many are its successful counterplots against the machinations of England's enemies.'
⁶
Le Queux (pronounced ‘Kew') was a Walter Mitty figure who fantasized that he had played a personal part in some of these successes. In
Secrets of the Foreign Office
published in 1903, Le Queux, thinly disguised as Duckworth Drew,
⁷
‘secret agent in the employ of the Foreign Office, and, next to his Majesty's Secretary of State for Foreign Affairs, one of the most powerful and important pillars of England's supremacy', quickly gets the better of the long-serving French Foreign Minister, Théophile Delcassé (equally thinly disguised as Monsieur Delanne). Delcassé, alias Delanne, ‘admitted that he longed to smoke one of my excellent light-coloured Corona Superbos'. But there was more to Drew's cigars than met the Minister's inattentive eye: ‘To this day Monsieur le Ministre is in ignorance that that particular Corona had been carefully prepared by me with a solution of
cocculus indicus
. . .' Outwitted by the cunningly prepared Corona, the disoriented Delanne revealed the secrets Drew (sometimes considered an Edwardian prototype of James Bond) had come to collect.
⁸
Such fantasies found a ready market. Like Thomas Hardy and H. G. Wells, both vastly superior writers, Le Queux was paid the top rate of 12 guineas per thousand words and published far more than either.
⁹

At the opposite extreme of literary merit from Le Queux, Rudyard Kipling gave an equally optimistic assessment of British successes in the intelligence duel with Russia on India's North-West Frontier. In
Kim
(probably the finest of all spy novels, though it transcends the world of espionage), unseen but ubiquitous agents of the British Raj play ‘the Great Game that never ceases day and night throughout India'. And they do so with a subtlety quite beyond the capacity of Tsarist Russia, ‘the dread Power of the North', and its French ally, whose emissaries are ‘smitten helpless'.
¹⁰
So far as the War Office were concerned, the myth of a far-flung intelligence network, whether promulgated by Kipling or by lesser literary talents, had the incidental advantage of avoiding public revelation of British intelligence weakness. ‘The only consolation', they concluded in 1907, ‘is that every foreign government implicitly believes that we already have a thoroughly organised and efficient European Secret Service.'
¹¹

All that Britain actually had were small and underfunded military and naval intelligence departments, both with little capacity to collect secret
intelligence, and the Metropolitan Police Special Branch (MPSB), founded in 1883 to counter the threat to the capital from Fenian (Irish Republican) terrorism, which had moved on to small-scale investigation of other terrorist and subversive threats but had minimal expertise in counterespionage.
¹²
The three agencies had little influence in Whitehall. Spenser Wilkinson, first Chichele Professor of War at Oxford University, compared the War Office's use of their Intelligence Department (ID) during the Boer War (1899–1902) to a man who ‘kept a small brain for occasional use in his waistcoat pocket and ran his head by clockwork'.
¹³
Although the 1903 Royal Commission on the War in South Africa concluded that the ID had been ‘undermanned for the work of preparation for a great war',
¹⁴
once the war was over the pressure for intelligence reform and more resources declined.

Within the Directorate of Military Operations at the War Office, however, two diminutive departments, MO2 and MO3, were established in 1903 with responsibility for, respectively, foreign intelligence and counterespionage. MO3 was the direct predecessor of MI5. Superintendent William Melville, who had been head of the Met's Special Branch for the previous decade, was recruited to carry out secret investigations for both MO2 and MO3, later becoming chief detective of the Security Service during its first eight years. Since he qualified for a police pension of £240 and received an additional £400 from the War Office, the terms were financially attractive. Melville's appointment was not publicly announced. Officially, he simply retired from the Special Branch.
The Times
reported that Scotland Yard had lost the services of ‘the most celebrated detective of the day'.
¹⁵
The award of the MVO (Member of the Royal Victorian Order) to Melville on his official retirement in 1903 also recognized his role in overseeing, with very limited resources, the security of Queen Victoria, King Edward VII and other members of the Royal Family both at home and during their continental travels at a time when European heads of state were more regularly threatened with assassination by revolutionary and anarchist groups than at any time before or since. Those assassinated on the continent included a Russian tsar, a French president, an empress of Austria-Hungary, a king of Italy, prime ministers of Spain and Russia, but no British royal or minister. Among foreign royals whose security Melville helped to protect during visits to Britain was Kaiser Wilhelm II, who presented him at various times with a gold watch and chain, a ring and a cigarette case.
¹⁶

The fact that early Security Service records date Melville's employment from 1903, six years before MI5 was founded, is evidence that his work
for it after 1909 was seen at the time as a continuation and extension of his earlier War Office investigations. During his investigations for both the War Office and the Secret Service Bureau, Melville operated from an office at 25 Victoria Street, Westminster, using the alias ‘W. Morgan, General Agent'.
¹⁷
Melville was well acquainted with Gustav Steinhauer, who became head in 1901 of the British section of the German Admiralty's newly founded intelligence service, the Nachrichten-Abteilung, usually known as ‘N'. Former Kriminalkommissar of the Berlin police, Steinhauer, who grandly termed himself the ‘Kaiser's spy', had trained as a private detective at the Pinkerton Agency in Chicago and spoke English fluently with an American accent.
¹⁸
He accompanied the Kaiser to England in 1901 as his personal bodyguard when Wilhelm II came to pay his last respects to his dying grandmother, Queen Victoria, and later to attend her funeral. A detective inspector in the MPSB described Steinhauer as ‘a handsome soldierly figure who had seen more courts than camps'. Steinhauer remembered Melville as ‘a silent, reserved man, never given to talking wildly', who entertained him to dinner with cigars and ‘one or two bottles of wine' at Simpson's Grand Cigar Divan in the Strand. The presence of so much European royalty at Queen Victoria's funeral inevitably led to fears of assassination attempts. Steinhauer later gave a melodramatic account of how he had accompanied Melville in a hunt for three homicidal Russian nihilists, who made their escape after allegedly killing a female informant of the Special Branch. Melville told the Kaiser he had been impressed by Steinhauer's intelligence expertise. ‘Yes, Steinhauer is a splendid fellow!' replied the Kaiser.
¹⁹

In the spring of 1904 Melville sent his assistant, Herbert Dale Long, on the first of several missions to Germany on behalf of MO
₂
under commercial cover, probably to inquire into German naval construction.
²⁰
A fragmentary file on Melville's early work for MO3 (renamed MO5 in 1907) suggests that his early priorities in Britain (particularly during the Russo-Japanese War of 1904–5) were to monitor the operations not of German intelligence but of the Okhrana, the Tsarist intelligence and security service. One of the documents in Melville's file (received from a Colonel Dawson) dramatically describes the Okhrana chief, Pyotr Rachkovsky, as ‘Head of all the [Russian] secret service police in the whole world, & the most important man in Russia. Commander of the Legion of Honour in France, and has agents throughout the whole world.' When stationed in the West, Rachkovsky lived in much greater opulence than his Soviet successors. Melville reported on 25 November 1904:

I know him personally, having frequently met him in London and he often called upon me in Scotland Yard when I introduced him to some of my superiors . . . When in London, Ratchkowsky always had some of his officers with him and invariably had a suite of rooms at the Savoy Hotel. I was told that he lived in a similar style in Paris, and know that he did so at Copenhagen.
²¹

Melville was probably aware that Rachkovsky and other Russian foreign intelligence officers were responsible for a series of explosions and agentprovocateur operations on the continent designed to discredit Russian revolutionary émigrés. He is unlikely to have known, however, that Rachkovsky was probably also responsible for the fabrication of the infamous anti-Semitic forgery
The Protocols of the Elders of Zion
, which purports to describe a Jewish plot for world domination.
²²
Between the wars, the
Protocols
, much praised by Hitler in
Mein Kampf
, emerged as one of the central texts in Nazi anti-Semitism, as well as later appearing on numerous early twenty-first-century Islamist websites.

From 1905 to 1907, Melville concentrated increasingly on German rather than Russian espionage. Reports of suspicious behaviour by German residents and visitors convinced him that German spies were reconnoitring invasion routes in England for the German army. In 1906 he believed that he had identified a group of spies in Epping:

I mentioned to the Superintendent of Police at Epping that the Germans might be spies; he laughed at the idea as being ridiculous, adding, ‘Spies! What could they spy here?' Argument was useless. The fact remains that undoubtedly they were spies, and their business, I should say, was to become thoroughly conversant with the routes from the sea coast to London, and thus to be able to guide a German army landed in this country.
²³

There can be little doubt that the Epping Superintendent's scepticism was fully justified. In other parts of the country, when making his inquiries about German spies, Melville also found the local police ‘absolutely useless'.
²⁴
He was not, however, to be deterred by the scepticism of the police from approaching the Home Office:

Owing to the almost continuous enquiries on the Eastern coast re suspected Germans, alleged staff rides by Germans, etc, from 1905 to 1907 I submitted reports outlining a scheme of surveillance on all suspected foreigners around the country. In them I suggested the utilisation of the Police, the Postal authorities and the Coast Guard Service.

Unsurprisingly, the Home Office failed to respond to Melville's proposals.
²⁵

By the time Major (later Brigadier General Sir) James Edmonds became
head of MO5 late in 1907, ‘its activities had been allowed to die down'. Save for Melville, Edmonds's staff consisted only of another major whose main preoccupation was cultivating a parliamentary constituency which three years later elected him as its Conservative MP. Apart from Melville's reports, MO5 files when Edmonds took over ‘contained only papers relating to the South African [Boer] War and some scraps about France and Russia – nothing whatever about Germany'.
²⁶
Germany, however, was Edmonds's main preoccupation. He seems to have been influenced by both Melville's alarmist reports and the international tension generated by British–German naval rivalry. The Entente Cordiale of 1904, followed by the Triple Entente of 1907, had resolved Britain's differences with France and Russia, both of which were to become wartime allies. The main threat to British security now came from the expanding German High Seas Fleet. The security of Victorian Britain had depended on Britannia's ability to rule the waves with a navy which was by far the largest in the world. But, with the launching of the new British battleship
Dreadnought
in 1906, Anglo-German naval rivalry took a new and dangerous turn. By its size and firepower the
Dreadnought
threatened to make all other battleships obsolete. With ten 12-inch guns, each with a range of over 8 miles, it was more than a match for any two of its predecessors. Overnight, the existing Grand Fleet of the Royal Navy, like every other navy in the world, seemed out of date. It was feared that the German High Seas Fleet, which also began building the dreadnought class of battleship, might soon catch up with the Grand Fleet and threaten the naval supremacy on which British security depended.