MI5 in the Great War

by Nigel West

  The question of reducing the number of checks and work of the Censor loomed very large in 1918. The practice had been to photograph all letters submitted to testing on behalf of MI5G; the Censor now limited the practice to those letters of which MI5G expressly asked for a photograph.

  All correspondence was divided into three categories end submitted as follows:

  – Category A. All letters in original.

  – Category B. Photographs only of the letters and envelopes together with the Censor’s comment.

  – Category C. The Censor’s comment only.

  In imposing a check reasons as full as possible were to be given. The existing list was to be revised in the light of these instructions but MI9 was to continue testing categories B and C for secret ink at suitable intervals.

  If MI9 could vouch that business correspondence emanated from wholly British and reputable firms, such letters need be submitted only in photograph. Eventually it was arranged that letters in B category should be tested unless instructions to the contrary were issued by G officers.

  In July cablegrams had been divided into three somewhat similar categories. In October it was arranged that reasons for cancelling any check should be given to the Postal and Cable Censors.

  Certain persons whose correspondence was being censored under a HOW had become aware of the fact and it was necessary to try to obviate this. In a general discussion, the point was made that some delay was inevitable in London and still more in the country, therefore, the fewer letters dealt with the better; also that delay with regard to London letters might be diminished if they were dealt with at the place of posting. It was decided that only a proportion of letters should be stopped on one check, that Lieutenant Booth should exercise his discretion on the proportion in each case, and that, in order to help him, the officer putting on the check was to state as far as possible:

  (a) What class of letter was to be dealt with.

  (b) The place where a suspicious letter might be posted.

  (c) When a man had been, or was about to be, directly questioned.

  The vast scale of the work done by the GPO appears from the returns of the first week in June 1918 when 1,458 letters were intercepted on 131 HOWs in operation at thirty-one sorting offices. The record of all checks was kept by G3(b). In June G officers were instructed each to keep the record of his own checks in addition to the central record and to overhaul it frequently with a view to reducing the number to the lowest possible.

  Repeatedly throughout the war, the transmission of news through gramophone records etc, was reported and measures of protection debated, in 1915 MI5G had some examination of records made but without result. During 1916 the discussion continued but projected measures broke down under the difficulty of administration. In 1917 Arabic records were submitted for examination by the Oriental School of Languages.

  The question was raised again in 1918 when a Dane asked for a dictaphone record of a speech. It appeared that the manager of the London Dictaphone Company had in 1914 suggested that all these instruments should be examined by the Censor, but this was not considered necessary. Many Germans, however, had bought dictaphones in the earlier stages of the war and the records could be smuggled. A circular was issued to the ports that, all gramophone and dictaphone records were to be detained unless the traveller had a permit. This was afterwards corrected and orders issued that all dictaphone records but only suspicious gramophone records were to be sent to MI5G for examination.

  *

  It was reported in February 1917 that Russian banknotes were being sent from England to Switzerland to be disposed of at a premium to the German and Austrian banks. In April, Italian notes were being bought up at Lugano, the notes being despatched from England instead of Italy even though Lugano was only ten miles from the Italian frontier.

  Copenhagen was applying for American notes at a high premium, the rate of exchange on notes being six francs to the dollar, whereas for cheques it was only five francs. Traffic in English banknotes began quietly in Switzerland towards the end of November 1917. Messrs Thomas Cook received a request for £200 in £10 notes and, on their enquiring as to the purpose for which these notes were required, the request was withdrawn. But early in 1918 the demand began again and on 8 March 1919 the Treasury informed the DSI of a report received from Messrs Thomas Cook’s branch at Zurich to the effect that Swiss bankers were making large demands for British banknotes (‘uncut’), on the pretext that they were required for the payment of large purchases of British goods. On the same day the consul-general at Rotterdam reported similar transactions in Holland. Afterwards it was said that repatriated German PoWs were carrying abroad quantities of notes and that notes were also being imported into Holland by the crews of Belgian Relief Commission steamers.

  As regards the PoWs, the report was false; such persons were allowed to carry only £10 and this they took usually in the form of Treasury notes. Next came the news that both British and American notes were in great demand in Switzerland. Applications for American and British notes were also coming in from Spain and Sweden. Spain had begun to apply for American notes in February 1918. The purpose for which these notes were required was not clearly established; about eleven different explanations were given of which the most interesting are:

  1. Payment of enemy agents.

  2. Propaganda and fomenting of trouble in India and Egypt (one of the principal buyers was a man named Leu, whose account was kept by the ex-Khedive).

  3. Bribery on the Western Front as formerly on the Russian and Italian Front.

  4. Investment by German anti-Austrian private individuals.

  5. Payment to peasants of the Ukraine in return for food supplies.

  Finally, the Trade branch of the Censorship reduced the case to two questions necessitating alternative policies, stating that if enemy governments were buying the notes to pay for food or for any purpose, political or economic, action must be taken at once, but if the notes were being bought by Russians or Ukrainians as a reliable form of currency no action was needed. Meanwhile various measures had been taken to get behind the facts. The Treasury considered the large buying of British notes as on the whole favourable to the country’s interests, therefore the Treasury proposed to let matters alone.

  The Deputy Governor of the Bank of England thought the buying of notes had not taken place on a large enough scale to make drastic action necessary, but the movement should be watched and, if action should become desirable, the Bank and the War Office should confer and agree upon a plan before approaching the Treasury. The Deputy-Governor was anxious to know whether the demand was for cut or uncut notes.

  The policy of observation was carried out as follows: MI5 arranged with Messrs Thomas Cook to forward to Zurich twenty notes of £100 and to watch and report on their sale. As it was supposed the notes would be returned to the bank to be cashed, the numbers were put on check at the bank and also at the Censorship. Mr Maxse, the consul-general, was asked to place some British notes in Holland and to watch their course there.

  The Censor made arrangements to record the numbers of all notes entering and leaving the United Kingdom. A careful record was kept at the ports of all British and American notes of £5 and upwards carried abroad by passengers. Treasury notes, however, were not to be recorded. Further action was not possible since, although Messrs Thomas Cook considered that passengers had no need to carry more than £10 in notes, restriction of the amount carried by passengers could be imposed only by an order under DRR and to this the Treasury had objected. Certain definite information was obtained by the measures adopted:

  1. The notes sent to Switzerland were sold at a rate of 25 francs, while the proceeds remitted to London were at 20 francs 76. In April the exchange on notes rose to 27 francs, and in the first week of May to 32 francs, but by the end of the month it had dropped to 22 francs; the notes were being bought by German and Austrian speculators.

  2. In Holland the prices during March and April were 11 fr
ancs 80 and 13 fl, as against cheque rates of 10 fl 60 and 10 fl 8; the notes were being bought by Galician Jews and were destined, it was supposed, for South Russia.

  3. Censorship returns showed the following totals of exported notes:

  Dates Total in £ Countries

  20 March 1918 to 20 April 1919 £74,002 Switzerland, Holland and Norway

  28 April 1918 to 11 June 1918 £47,003 Switzerland, Holland and Norway

  Week ending 18 May 1918 £76,270 Switzerland, Holland and Norway

  Week ending 25 May 1918 £61,416 Six countries

  Week ending 1 June 1918 £110,961 Nine countries

  Switzerland and Holland remained the chief importers of banknotes. From 13 May all notes leaving the United Kingdom were marked in the Censorship in such a way that they could be identified on return. Then came a report from Christiania that higher prices were being obtained for larger suns and that clean notes were wanted. It was then arranged that outgoing Treasury notes as well as bank notes were to be marked and MI5’s officers at the ports were to keep watch for such notes coming in.

  In September 1918 it was reported that an employee of Hannevigts Bank of 56 Old Broad Street in the City of London, was doing a large trade in exporting British notes to banks in Christiania and Amsterdam, where the notes were sold to German customers at a considerable profit. A man named Bauman was reported to be making a fortune by sending banknotes per registered post.

  The Censor denied this. The check on these notes was given up in November 1918. During the time of its running only one enemy agent had been detected who had been paid in banknotes and those notes had not been marked.

  *

  As early as January 1916 a report had been received and circulated to the ports and Scotland Yard to the effect that 500,000 notes in English currency had been despatched from Berlin to Switzerland and Holland for anti-recruiting propaganda in England. In February 1917 the Daily Express published a note to the effect that there was ‘abundant evidence’ that German Secret Service money was pouring into the country. This was traced back to the editor of the Liverpool Courier, who had heard from a Member of Parliament that the funds of various pacifist societies in this country were replenished by monies paid into Oriental banks, specifically the Imperial Bank of Persia, and that an elaborate system of bills of exchange was in use to disguise from the societies the source of these funds. The editor could not, however, remember the name of the MP, the Imperial Bank of Persia was supposed to be above suspicion, it was in any case difficult to approach except through the Foreign Office, and the bureau decided that the information was imaginary. But Major Drake requested the management of the Bank of Persia to notify any curious remittances, a wise precaution, for in October of the same year the bank reported that telegraphic instructions had been received from the Swiss bank to remit £5,000 on behalf of Schiff Manovitch, Petrograd, to D. Datavoff of Meshed, Persia. G Branch referred the matter to D.

  Eventually the transfer of monies amounted to £75,000, and proof was obtained that the agents of a certain Persian firm were purchasing German goods in Moscow and remitting large sums from Russia to Persia via London. This agent, Vahaboff, was afterwards stated to be working for the Bolsheviks. The one clue followed up resulted in procuring some evidence of Bolshevik propaganda in the east.

  In November 1918, on the advice of G4, the bureau, having ascertained that a Russian Jew named Axelrod, an Internationalist belonging to the Russian Socialist Revolutionary Party and possibly also a Bolshevik, was receiving money through Mr Arthur Henderson, asked that early information (if possible before the money had been released) should be given to the bureau of all remittances from Russian subjects in neutral countries, and stated that remittances made in the Bolshevik interest would probably be for small sums so as not to attract attention. Sir Adam Block for the Treasury pointed out that such payments would very likely not be made by Russian subjects, and that under DRR 41DD no such payment could be made by Russian subjects resident anywhere or persons residing for the time-being in Russia to persons or to the credit of persons residing in the United Kingdom without previous reference to the Trading with the Enemy Branch, which was the authority administering the regulation. Therefore it was decided that MI5 should continue to watch the monthly returns and to warn the Treasury if payments were being made to undesirable persons, and the Trading with the Enemy Branch was to report to MI5 any suspicious case occurring under Regulation 41DD.

  In connection with Axelrod, Colonel Sealy Clarke made strong representations to the effect that the Foreign Office should get rid of this dangerous party of Russians as soon as possible and should no longer sanction the issue of visas to Russians of the type. The DMI ordered that where strong military reasons (and Bolshevism was one) existed for refusing a visa, MI5 was to take a firm stand with the Foreign Office and, if necessary, the Foreign Secretary himself was to be seen. G Branch had advised strongly against the admittance of Axelrod’s party but had been overruled by the DMI. The practice of G Branch was to refer all cases of refusal of visa to Colonel Kell.

  *

  This case is illustrative of G Branch’s work and co-operation with the French services. Enquiry came from French counter-espionage, 18 Bedford Square, as to Cesar Vital, a Belgian engineer, who had travelled much between England and Lisbon via France and was suspected. MI5’s G3 dealt with this case. Information was sent to M. Noiriel that Vital was a man with an unusual knowledge of mining and metallurgy and German methods, besides knowledge of aircraft, electrical matters and many other matters connected with war methods. He had cane to England from Paris in January 1916 and got in touch with engineers here. He asserted that he had escaped from Belgium since the German occupation and that someone was impersonating him there.

  He was engaged in various negotiations of importance which misfired strangely when apparently on the point of success. He went to Spain in May 1916 and during his absence information was laid against him. The rigorous search of his person and baggage on his return from Spain called forth a protest from M. Hymans, the Belgian minister, and Vickers’ directors, for when Vital was working in the electrical department, asserted that he possessed their confidence. Vital returned to Spain in November 1916. Subsequently the opinion of the directors changed, Vital was dismissed from Vickers in June 1917 and went to live in France at the end of August 1917. The BCI informed the British authorities that Vital had left a box at an address in Bloomsbury and was claiming it from the landlady.

  Authority to search under DRR 51 was given by G2. The box had been there since May 1916. The contents were examined by Lieutenant Bremer in the presence of M. Noiriel. The trunk was sent to Paris; MI-1(c) had been asked to trace Vital; he turned up in Madrid in November.

  Enquiries had been made of the Belgian minister in Lisbon; he thought Vital reliable and an employee of the Belgian government. The French authorities were satisfied as to Vital’s bona-fides and asked that his property might be returned to him, and there was no objection from G3 as Vital had been in the Belgian Secret Service. The hamper was despatched from Paris on 26 May 1919 and it reached Richborough on 3 July 1919. It arrived in London on 21 July 1919 and was sent to the Belgian authorities to be forwarded.

  APPENDIX 1

  German Espionage Suspects Investigated by MI5

  Name Conclusion

  Nicholas Ahlers Arrested, 5 August 1914

  Ramona Amondarain Deported, September

  W. E. Andrews No record

  Fredrik Apel Arrested, 4 August 1914

  George Vaux Bacon Sentenced to life imprisonment, 28 February 1917

  Richard Berger Left the country in 1913

  Robert Blackburn Imprisoned for two years, October 1914

  Alexander Blok German intelligence officer in Amsterdam

  Blonden No record

  Eva de Bournonville Sentenced to life imprisonment, January 1916

  Cornelis den Braben Arrested, June 1915

  George Breckow Shot, Tower of London, 2
6 October 1915

  William F. Brown Arrested, 14 August 1914

  Emil Brugman Deported, 1915

  Franz Bubenheim Left the country

  Oscar Buchwaldt Arrested, 4 August 1914

  Fernando Buschman Shot, Tower of London, 19 September 1915

  Johan Jakob Calkoen Left the country, June 1915

  Barnet Carlishe Arrested, June 1915

  Vittorio Corini Scheduled for arrest, 1917

  John Couttes No record

  Wilhelm Croner Committed suicide, 23 January 1913

  Francis Deacon No record

  Fredereich von Diederichs Arrested, 4 August 1914

  Hilmar Dierks German intelligence officer in Rotterdam (alias Richard Sanderson)

  Adolphe Dittmar Arrested and deported, April 1915

  Charles Dittmar Arrested and deported, April 1915

  Max Dressler German intelligence officer in Ostend

  Suzanne Dupont Deported, August 1916

  Edward Durkin Arrested, 6 August 1914

  Hans Eils German intelligence officer in Antwerp

  Abraham Eisner Excluded from Porstmouth, August 1914

  John Emery No record

  Johann Engel Arrested, 4 August 1914

  Edward Evans No record

  Friedel Fels German intelligence officer

  Heinrich Flores German intelligence officer in Rotterdam

  Madame Fontaine Arrested and deported, April 1915

  Fowler, Frederick Arrested, 4 August 1914

  Arthur Glanville Disappeared, March 1914

  Heddy Glauer Escaped to Ireland, 1911

  Leon van der Goten Life imprisonment, September 1917

  Frederick Graff Enrolled as a double agent, 1916