The Spy Who Painted the Queen (15 page)

Over the winter of 1915, Austria had already called up men aged between 49 and 53; there had been food riots during 1915 too and the harsh winter of 1916–17 made things far worse. Industrial output was in steep decline and coal production was falling rapidly because so many miners had been called up. The British knew this perfectly well because a Foreign Office official, W.G. Max M
ü
ller, was producing a series of analyses of Austria's economic performance. The ever-vigilant censorship service had also been picking up information about conditions within Austria-Hungary throughout the war. From mail carried on neutral steamers (which were diverted into British ports throughout the world and the mail they carried opened) came stories of rationing, failing food supplies and near-starvation. A letter from Moravia to the United States, written in August 1916, complained:

Oh! It really is enough to drive one mad. The people tear the potatoes out of the earth when they should still be flowering to have something for their hunger. Really you cannot believe the awful hunger … If we starve you cannot help us: and that is bound to happen if the war does not come to an end soon.

A letter from Budapest to the USA in October 1916 read, ‘Many things are 5 and 10 times as expensive in peace time. From last week we have two meat and fishless days and 1 greenless day. Silver is fast disappearing, a few days ago all the nickel and copper coins had disappeared.' Another writer wrote, ‘We have quite enough poverty here, they are taking away the corn, removing the bells from the churches, sealing up the grain and do not allow it to be ground.' A letter from Hungary to the United States in November advised that all corn and maize had to be delivered to the military authorities, that they had not had sugar or oil for three months and that no meat could be purchased. It was clear that government rationing schemes weren't working; a relatively wealthy peasant wrote that the government had taken over the provision of food, but even they couldn't provide something that didn't exist. Another writer told his American relatives that everyone had had to give up their copper and brass utensils and the churches had had to donate one or two of their bells. The censors noted that their Austrian equivalents had previously carefully deleted any references to these kind of matters (not realising the British censors could ‘restore' the deletion), but now they seemed to be letting them through.

It was becoming clear that it was only a matter of time before the empire collapsed. The emperor Karl had been warned by his foreign minister, Count Czernin, that the exhausted state of the army and food shortages might result in revolution and rebellion among the many nationalities that made up the empire. With the Allies beginning to discuss future peace terms, giving liberty to those very minorities, Karl approached them with terms of his own in March 1917. These included German withdrawal from Belgium and France (including Alsace-Lorraine), and Serbian independence. There were no proposals dealing with Italy so the Allies rejected them. Conditions in Austria were continuing to deteriorate, however, and peace was becoming increasingly necessary. It was in this environment that allegations of De László spreading pro-Austrian peace propaganda among his upper-class clients caused such concern.

Though De László's hearing was told that it had not been possible to locate the elusive Madame G, there is one indication that perhaps MI5 managed to do so, but were unable to make the case for an arrest. There are two index cards for Foreign Office correspondence for 1918 at TNA naming Leopold Samuel Gompertz and Henrietta Charlotte Gompertz. They were allowed to leave Britain, but only with a visa that specified they were not allowed to return. The file that the papers are related to still exists (unfortunately without most of its contents), and the covering memorandum was issued by MI5.E.2. which had clearly circulated the latest list of non-return visas to military control offices around the world.

The Madame G in question had been born on 3 February 1864 in Frankfurt Main as Henrietta Charlotte Wetzlar, daughter of a prominent Austrian banker. She had married Leopold Gompertz, of the Gompertz banking family, in Amsterdam in 1885. Leopold presumably represented the Wertheim and Gompertz Bank in London.

In April 1915, MI5 had been warned by Consul Maxse in Rotterdam that the Germans were buying the services of Dutch agents who were to live in London and report from there. Dutch researcher Edwin Ruis, an expert on the intelligence activities of both sides in Holland, advises:

Many Dutch Jews were originally from Germany or the Habsburg empire and sympathetic to Germany. German intelligence officers did recruit German wives of Dutch citizens to spy. A famous case is Dr Willy Brandt who did not only recruit the known spy Lizzy Wertheim, but who also tried to recruit other German women in the Netherlands.

Brandt, whose doctorate was in economics, had recruited agents for the army intelligence
Sektion
IIIb, and from December 1914 worked for German naval intelligence. MI5 was certainly aware of Dr Brandt's existence as his name and address had been signalled (presumably by Tinsley of SIS or Consul Maxse) to them on 6 February 1915 as being a post box used by the German secret service, and his address was put on the censorship watch list. Brandt is also named in MI5's historical report on convicted spy Lizzie Wertheim as being her German contact in Holland (National Archives reference KV 1/42).

The firm of Wertheim and Gompertz was under suspicion in its own right. In July 1915 the
AlgemeenHandelsblad
newspaper
had reported that the bank had received 100 cases of gold to the value of 5 million kronen from the Austrian government. In October 1915 it was suspected of being involved in the shipment of gold from Germans in the USA to Holland for the credit of German banks.

On 6 December 1915 the chief censor advised the Foreign Office:

Wertheim and Gompertz of 30 Amstelstraat, Amsterdam, are the Firm with whom Sutro Brothers and Company, of New York, suggested the arrangement of a cable code to deceive the Censor into thinking that sales of securities on account of Amsterdam (and therefore possibly Germany) to New York were really sales by New York to Amsterdam. Sutro Bros and Company, of 44 Pine Street, New York, have a branch office in Berlin under Meyerhof who is presumably the man mentioned in Sir C Spring's telegram. Wertheim and Gompertz are apparently the channel for messages, gold and securities between Meyerhof of Berlin and Sutro Brothers of New York (or the National City Bank of New York).

The British Admiralty intercepted a telegram, dated 1 November 1915, from National City Bank, New York, to Ernst Meyerhof & Co., Berlin, reading, ‘Inform Wertheim and Gompertz that we will ship the gold to the extent of their credit balance under their risk our responsibility to end with delivery of gold to steamship.'

Wertheim and Gompertz were closely aligned with the American bank Kuhn Loeb, and Sir Ernest Cassel, in railways and similar dealings. Sutro Bros was a New York investment bank that was basically a subsidiary of Kuhn Loeb. The British were well aware that a link to Kuhn Loeb meant one to Paul Warburg, the naturalised American banker of German origin, to one degree or another, and that meant a link to Germany, where Warburg remained a partner in his family-owned bank.

Sutro Bros had been founded by Lionel and Richard Sutro, American-born brothers of German-Jewish ancestry. The leading figure during the war was Richard, amongst whose friends was Kuhn Loeb's Otto Kahn. American Bureau of Investigation (the predecessor of the FBI) files contain nothing on Richard Sutro or Sutro Bros per se, but they do note that Theodore Sutro, a New York attorney, possibly a German-born cousin, was very active in the German National Alliance and later the Friends of Peace, which brought him under suspicion. There is also mention of a Victor Sutro, a broker with Sutro and Kimbley, who shows up as a suspected pro-German.

Because of these suspicions, Wertheim and Gompertz were placed on the British government's trade black list and a number of their securities in London were seized. It was only in mid-1916, after they joined the Netherlands Overseas Trust, an organisation founded in November 1914 to control Dutch trade and guarantee that imports were not re-exported to Germany, that they were gradually removed from the black list and able to resume dealings abroad.

While investigations into Madame G were carried out, MI5 took De László's address book and ran his contacts through its, by now extensive, index of suspects. Every report submitted to MI5 by its own small number of agents, by the police, SIS agents abroad, the censorship department and naval intelligence's worldwide network of naval consuls, as well as from the public and press, were examined by officers and marked for indexing in a huge card index. Cards were generally held under the name of a person but suspect addresses were also ‘carded' and there were various subject headings, all of which had to be cross-referenced. The whole business of carding, cross-referencing and filing was carried out by teams of mainly women clerks recruited from businesses, the best schools, and women's colleges at university. Like the officers, many of them spoke several languages and some had travelled extensively. It was hard work. Sir Everard Radcliffe recorded in his unpublished memoir, ‘We were kept very hard at work at MI5, having one Sunday in two free, and a very occasional half day, and having to do one all-night duty once a fortnight.'

As well as the initial carding and cross-referencing, the women staff also did the ‘look ups', finding references to suspects from previous reports. This required a lot of ingenuity, and knowledge of foreign languages was invaluable in trying to tease out possible misspellings of foreign names or addresses. They would draw up a list of definite, likely and possible matches and submit them to the officer who would then examine the suggested reports in detail and decide which were relevant. When sufficient information was gathered to convince them that the suspect required it, the reports were copied and filed together in a Personal File (PF). These were initially held alphabetically but the system was changed to a strictly numerical sequence when it was realised it made filing easier; new files could be added to the end of the run rather than having to slot them into place. Other information, once analysed, was used to draw up black lists of suspect companies and addresses to be used by port security officers examining travellers entering the country and for consuls and passport control officers abroad who issued (or didn't issue) visas for foreigners to visit the UK or the empire.

Given the close involvement of Holland and Dutch subjects in the case it was inevitable that MI5 turned to its man in Rotterdam Richard Tinsley, a former merchant navy officer and member of the Royal Naval Reserve, and now a serving SIS officer of great experience. Before the war he had been employed by the Uranium Shipping Co., which took Russian emigrants to the USA. He had been expelled briefly from Holland for breaking Dutch law by landing emigrants without permission, but was back in business at the start of the war and helped Consul Maxse deal with refugees from Belgium while at the same time helping him set up a rudimentary intelligence gathering system. When Maxse was warned off intelligence work by the Foreign Office because of his diplomatic position (though, as we shall see, this was ignored), Tinsley took over the intelligence side and was transferred to SIS and promoted to the rank of commander in the RNR.

From his Uranium Shipping Office he ran extensive networks of agents in occupied Belgium and France reporting on military information, particularly train movements. He also reported on Dutch trade with Germany (vital in enforcing the economic blockade), probably by bribing or suborning Dutch customs officials, and supplied pacifist propaganda to German socialists to help them encourage desertion into neutral Holland by German troops (from whom he gathered intelligence). He also ran probably the best British spy of the war, a renegade German codenamed H16 or R16, who was a naval engineer who could travel extensively in the naval dockyards. His real name was Otto Kruger and he supplied first-class information on the state of the German fleet and naval developments, never more so than shortly after Jutland when he sent in a detailed report on the extensive damage suffered.

From MI5's perspective it was Tinsley's close watch on the activities of the German Secret Service that mattered most. Their secret addresses were watched, as were their contacts. It seems likely he ran the double agent codenamed COMO, an American who, as a neutral, was able to visit Britain and who reported on his fellow German agents through Tinsley to MI5. It was through Tinsley (codenamed T) that details of prospective agents were received, and he was instrumental in the capture of several spies and in providing information that allowed MI5's port security prevent them landing in Britain.

Whereas all reports received by MI5 from other sources passed through the registry system before being forwarded to the relevant section, Tinsley's reports were considered so valuable and important that they were sent straight to the investigators of G Division unopened. Sir Everard Radcliffe, a former captain of Yorkshire County Cricket Club who served with MI5 from 1916 to 1919, left an unpublished memoir of his service which is held by the Liddle Archive at Leeds University, and it confirms the respect in which Tinsley was held, at least within MI5: ‘Many were the interesting cases, but what remains most vividly in my mind was the brilliance of our Agent in Holland, who rarely failed to advise when an important spy was en route to England, and almost invariably was able to apprise for what purpose and where he intended to go.'

De László's address book produced a total of twenty-nine persons who had come to MI5's attention in one way or another. In some ways they are a raggle-taggle bunch and one or two seem, frankly, facile, and were even commented upon as such by an unknown hand. Some were Austrian or Hungarian, as one might suspect, such as von Offenheim, an Austrian subject and formerly a rich merchant in London. He was described as having ‘left with Austrian Ambassador at beginning of the war, withdrawing a large sum of money in notes and gold'. Mrs Knatchbull Huggesson of 43 Norfolk Square (by 1917 now Lady Braeburn) and her sister Mrs Oswald Crawford were noted as being ‘Daughters of Hermann von Flisch Brommingen, Imperial Councillor of Vienna. Many allegations respecting them, but nothing suspicious proved.' There was an address for Countess Hoyos, sister of the Austrian chargé d'affaires at Christiania (now Oslo, in Norway), who was acting for Germany there, but there were no specific allegations.