by Andrew Cook
There were over 500 passengers on board the SS Eliza Woerman, which would drop anchor at Dover Harbour for just fifteen minutes, so it would be helpful to have Mr Brown pointed out. Melville left the pier and discovered that the ship was delayed by fog far south-west down the Channel. It would not arrive until 9.00 p.m. He kept clear of the drunken brother all day, but at 9.00 p.m. both George Brown and Melville were on the tender that drew up alongside the big ship when it arrived. Hundreds of excited people crowded above them on the upper deck.
‘There is my brother’, said George Brown to me, ‘him with the straw hat.’ I looked up and called out to J.W. Brown, who thought I knew him, that I was coming up.17
Melville shinned up the ladder. Unfortunately J.W. Brown had not been approached by anyone at Durban, was mystified by any reference to Werner, and in his bewilderment handed him a passenger list. It showed no such man aboard.
Back in London, Melville was now the sceptic while his superiors, previously lukewarm, were all for offering a £1,000 reward in South Africa for anyone detecting the smuggling of arms. He persuaded them to delay this plan for a week, in which he wrote a report. The whole thing, he insisted, must be a hoax. Not a hoax with any point to it; just a meaningless time-waster. He listed his reasons, which could be summed up as a trail of red herrings which he had been following for far too long. And besides, the letters when minutely checked against the facts did contain inaccuracies.
The substance of this report was cabled to South Africa, and as a result a number of men were arrested. Somebody had been paying them ten pounds per letter. Exactly who this was remains unclear; Steinhauer, in his memoir, makes no reference to it and Michael Smith in The Spying Game says it was ‘a freelance’ making work for himself. The person had succeeded in wasting a good deal of British intelligence time.
Melville remained convinced that local police, the postal authorities and the coastguards should be alerted to suspect foreigners. Unlike the Home Office he did not see insurmountable legal and operational difficulties. He doggedly submitted reports suggesting at least an awareness-raising round robin, and the Home Office just as doggedly made objections; they had no authority over police or coastguards, they could not legally allow mail interceptions, the police outside London would make a mess of it, and so on. So these cases kept frustrating Melville, usually because he was told about them long after the protagonists had moved on.
There were, for instance, in 1907 three Germans at Hartlepool photographing gun emplacements and railway viaducts and the coast at high and low water. They always took their film to Mr Walburn, a chemist in the town, to be developed. These were holiday snaps, they told the incurious chemist, for their friends in Germany. After a while they were joined by another man who sent some of the pictures back to be redeveloped. One day the four of them had an argument, in German, in the shop. Unnoticed by them, an Irishman was listening. He had lived in Germany for years and after they left, he told Mr Walburn that the men were spies, one of them being a superior officer who was annoyed with the other three for having failed to get a decent shot of a certain gun near a lighthouse. Mr Walburn thought it over and later offered this information to the Standard newspaper, who told the War Office. Melville visited the area. But the Germans, and their photographs, had long gone.
Many times he found himself pursuing lines of enquiry that had gone cold or been mishandled. In Trearder Bay, North Wales, somebody told the coastguard that a couple of Germans staying at Roberts’ Hotel had hired a boat and a boatman and were out every day taking soundings. Whoever reported this had the wit to understand that depth soundings were useful to anyone investigating submarine access to the bay.
Had Melville received this information, he would probably have got aboard as a substitute boatman and watched and obtained written proof before having his suspects arrested. The coastguard, meaning well but completely uninstructed in these matters, put on dress uniform before proceeding to the landing stage, where he waited proudly decorated with badges and braid in full view of the incoming party. The Germans saw him, panicked, and told the boatman to turn around and sail along the coast, or go wherever – just not here. He ignored their instructions, and when the officer strode sternly aboard to question them they said they were taking scientific soundings of the temperatures of various waters. Then they scuttled off. Melville was disgusted.
For the few evenings that those Germans were at the Roberts’ Hotel, their demeanour was typically German. They overshadowed everyone in the dining room. But on arrival there, after seeing the naval officers, there was a marked change in their conduct. The other visitors noticed it. They ate their dinner in silence and sneaked away like mice. Evidently they were in mortal terror of arrest. Their names were never taken at the hotel.18
It was all highly unsatisfactory. The old MO3 was reinvented in February 1907 as ‘MO5 – Special Duties Section, Interior Economy’19 with a brief to assume ‘duties of an executive nature’ (i.e. breaking and entering, shadowing and eavesdropping as required) but it was still a tiny department operating partly in contravention of the law, in the interests of national defence, in an international political climate which the Admiralty and the Home Office, at least, did not seem fully to comprehend.
It was in this year that wheels seemed at last to be creaking into motion; at least, Prime Minister Asquith insisted that the Committee for Imperial Defence must enquire into the state of military preparedness for a German invasion. As things stood, forewarning seemed to be left to chance. A group of concerned civilians led by Colonel A’Court Repington had told Balfour, now leader of the opposition, that nothing systematic was being done. In Repington’s view, mobilisation for an attack could be swift and unseen. German forces on land and sea were in such a state of readiness that movements of transport and men were familiar and could be explained away, and a big fleet was often concentrated in one place; and in an emergency Berlin could take a strong grip on communications.
The committee enquired, and did not agree. Germany could not mount an offensive out of the blue. Nonetheless, there was cause for concern, as the Admiralty had no effective espionage network abroad. Naval intelligence relied upon consuls or naval attachés for information and the only relevant British representation was at Hamburg. The Foreign Office (Arturo Peel notwithstanding) disapproved of the services’ independent use of consular staff as spies. It followed that more agents must be actively recruited in the German ports.20
Colonel Edmonds, Kell’s superior officer, was a fan of, indeed a friend of, the novelist William Le Queux. History has judged Le Queux a conspiracy theorist and a dreadful writer and he had his detractors at the time, but his books, such as Spies of the Kaiser and The Invasion of 1910, set off a whole new spy-paranoia bandwagon. They were popular in the decade before the outbreak of war and the Daily Mail encouraged the moral panic.
In his batty way, Le Queux was right. There were German agents at work in British ports. Steinhauer ran the network and managed to move around British coastal towns in the guise of a commercial traveller visiting them. He could pass for an American and at least once, according to Melville’s memoir and his own, narrowly escaped arrest in England. But where Le Queux imagined thousands of fiendish Huns just biding their time before arising, like the dragons’ teeth of legend, to slay the peaceful British, the real agents were numbered in tens. With few exceptions they were a sorry lot, desperate for the pittance they got in exchange for information that required sneaking, rather than skill, to obtain. Edmonds probably exaggerated the cunning of their masters too; Steinhauer, whose opinion of his military superiors was disparaging, opined that even intelligence officers in Berlin were selected because they were not bright enough for the army.21
Le Queux and the Mail, despite their outraged xenophobia, were right in another respect. Public fear of a threat from Germany reflected a perceptible shift in international relations between 1906 and 1909. Traditionally the British Empire had been safe thanks to a small, expert, pr
ofessional army for deployment when required in the colonies, and an overwhelming navy that no other nation could match. The Germans had treaties with the Austrians and Italians, a big, well-armed and determined army, the Schlieffen Plan to mount a defensive line against the French in the west, and a comparatively insignificant navy. Nonetheless they felt encircled and threatened by the increasing rapprochement between the British, French and Russians.
When the British launched the first Dreadnought battleship in 1906 it was so much faster and better equipped than anything else that many in the Admiralty must have felt the British Navy was invincible. In fact it had set a new standard, so that Germany soon began building Dreadnoughts of its own while Britain was lumbered with the world’s largest fleet of out-of-date ships. For the first time Germany was turning itself into a formidable naval power. Germany was also starting to pick fights, mainly with the French in North Africa.
Le Queux knew both Steinhauer and Melville; he had known Steinhauer for years. Ironically, the one English spy who did supply the Germans with useful information throughout the prewar years had been spotted in Chatham Dockyard in Steinhauer’s company long ago in 1902,22 and it was Le Queux who saw them together. Perhaps it was something about Steinhauer’s false beard that alerted him. He hot-footed it to the police. Had he taken more notice of Steinhauer’s companion, he could probably have saved Melville a good deal of trouble later. The man was Frederick Adolphus Schroeder, alias Gould, and he would remain undetected until the first months of 1914.
From 1907 onwards military and naval intelligence began, if not to collaborate, at least to talk to each other. Efforts were made to find new agents. Within a year agent R appears in the accounts. He is based in German south-west Africa; there are others named E and D. In 1908 a man called Rué, who worked for Courage’s brewery in Hamburg, undertook to provide information for £250 a year for British intelligence. He took on the job under subtle pressure from his boss at the brewery in London.23 There was another new man, H.C. Bywater, a British subject, naval expert and sometime Daily Telegraph correspondent, spying for the Navy at Kiel.24
It was time to get a feel for the territory. Mr and Mrs William Melville left for New York from Liverpool in the Carpania on 9 January 1909. They returned across the Atlantic not to England but to Hamburg. While in Germany Melville is said to have recruited a ‘retired officer of the army of a friendly power’ at £600 a year.25 Melville also deployed one of his agents from Russia to join Byzewski in Berlin. The Navy organised a system whereby correspondence was sent by cipher from Germany via Holland to a London office, almost certainly Melville’s.26
The network was far stronger, yet the fundamentals had not changed. The Navy faced the greatest threat, and had just £500 a year from the Treasury for Secret Service.27 The army ran the espionage and counter-espionage service with meagre Foreign Office funds; the Foreign Office disapproved of consuls spying for the services (‘Any further act of spying such as taking photographs &c of guns and forts would be treated as a breach of discipline,’ wrote Sir Charles Hardinge fiercely, on discovering that a vice-consul had been paid direct by the Admiralty28) – while paying, for instance, a regular £1,000 p.a. for its own Secret Service to the Constantinople Embassy alone.29 On top of this, the Post Office was not officially allowed to intercept letters; and only the police could make arrests. This shambles could not be allowed to continue.
Edmonds worked through Major-General Ewart to impress upon Viscount Haldane, Secretary of State for War, the need for a well-financed, co-ordinated system.30 Haldane was a Liberal Imperialist. He was not an alarmist, but grasped the point that British defences were inadequate. He had instigated the Territorial Army which, if war broke out, would become part of the British Expeditionary Force, and his efforts would be wasted if swift military action depended on under-resourced, chaotic intelligence about what the enemy was up to. Under his influence the Committee for Imperial Defence decided, late in 1909, upon reform.
Melville and the overseas agents would remain within MO5 under Major MacDonogh, but would be part of a secret and unnamed ‘Secret Service Bureau’ answerable to both the Admiralty and the War Office through the Directorate of Military Operations. SSB (as it will henceforth be called here) would continue with counter-espionage efforts while paying more attention to active recruitment of agents abroad. The structure appears to have grown out of a report submitted by Edmonds. He had spent two years with the Committee on Imperial Defence compiling a history of the Russo-Japanese War,31 and was already working with Melville. In the file is a document dated 8 October 1908 which sets out his ideas:32
1. System required:
(a) in Germany, based on a centre [sic] in Switzerland, Denmark and Poland, to watch army and report concentrations and deployments
(b) in England, to mark down spies and agents in peace and to remain in German lines and spy on troops if they land.
(a) may be carried out by paid agents gradually collected; (b) by police, post-office officials, custom-house officers &c with a few paid agents. Co-operation of the civil authorities is essential, and authority for this must be obtained…
4... It is probably best to employ a first class detective under direction of an officer to collect and work agents abroad.
He noted that the Official Secrets Act must be amended. ‘At present we cannot arrest a spy or search his habitation without consent of Attorney General which takes any time to obtain.’ Vernon Kell, like Vincent thirty years before, had already done enough creative research to take on this new post and drive it forward. On Edmonds’s recommendation the head of counter-espionage in Britain (‘b’ above) would be the multi-lingual, half-Polish Vernon Kell.
SSB’s recruitment of an agent network overseas (‘a’) would be the responsibility of a retired naval officer called Cumming. The credibility of the entire system depended on his finding good local, preferably indigenous, agents, for while the Foreign Office paid, Sir Charles Hardinge remained adamant that no espionage must ever be traceable to British embassies or consulates abroad.
That was the theory. In fact Cumming took a while to settle in, not through any fault of his own but because he had been set an impossible task. He and Kell were to share an office in Victoria Street, on the north side at No.64; the front man there (who unlike Melville was rarely present, but merely rented the place) was a retired police inspector called Drew, also known as Sketchley or D. From the start Cumming was unhappy with the restricting, nine-to-five implications of this. As for foreign agents, perhaps the naïve majority on the committee assumed that MO5 would cheerfully hand Cumming the list of contacts and leave him to get on with it. To understand how unlikely this was, we have to remember Jenkinson. Rule one: a case officer does not reveal the identity of his agents.
Cumming came aboard late in October 1909. By this time several new agents had been recruited. One of them, initially paid for by the Admiralty, appears as ‘HC’ in the accounts of August 1909 and, like E, V (presumably Rué, generally called Verrue), M, L, B and D, is receiving regular payments.33 HC could have been Hely Claeys but in asserting that it was H.C. Bywater, this author defers to Alan Judd:
There are diary references on 2nd March 1910 to the recruitment and debriefing of HC (Bywater’s initials)34
The diary is Cumming’s – payments six months before would seem to contradict the assumption about HC’s identity, yet H.C. Bywater almost certainly was the man at Kiel, for
In his little-known book, Strange Intelligence (Constable 1931) he gives convincing descriptions of his penetration of German dockyards during 42 months of spying (although not claiming in that book the experiences as his own, there is strong evidence that they were…)35
In November of 1909 it was agreed that the Admiralty would henceforth submit its bill to the War Office and both sets of accounts would be amalgamated in advance of submission for payment by the Foreign Office. This would avoid duplication. The SSB was in business.
TEN
TH
E BUREAU
Information may hibernate in our minds for decades until the moment comes when we can retrieve it to our advantage. On the other hand, an inescapable fact from the past may arise unbidden and unwelcome, representing a threat.
In 1902, when Melville was in his last eighteen months of office as Superintendent of Special Branch and the Boer War was drawing to a close, the Home Office was approached by the German Embassy with a request for information. In March of that year Melville filed a report on the object of their enquiry, Farlow Kaulitz. Kaulitz was a journalist born of a German father and English mother, and brought up in Germany. He had spent three years in a Prussian prison for lèse majesté and being rude about Bismarck in the Basler Nachrichten and had been expelled from France in 1898 because, as that paper’s Paris correspondent, he challenged the French Government over the Dreyfus affair.1 Interviewed by police at Victoria Station on arrival, he seems to have been perfectly frank about all this, and was allowed to go about his business. He took furnished rooms at first in 25 Bessborough Street, Pimlico, and worked as a journalist. Quite soon he had set himself up as a continental press agency. He employed a couple of assistants to hang around Fleet Street from 8.00 p.m. until 4.00 a.m. getting items from the wire services and newspaper offices – especially concerning the war in South Africa. When a newsworthy item became available Kaulitz’s man would hand it to his assistant, who would leap onto his bicycle and race back to Bessborough Street with the wire.
