The Codebreakers: The True Story of the Secret Intelligence Team That Changed the Course of the First World War

by James Wyllie

  The US government couldn’t admit that one of its agents had stolen the briefcase of a German diplomat – an Imperial Privy Councillor, no less, who enjoyed immunity from prosecution. So President Wilson’s trusted adviser and confidante, the obliging Colonel Edward House, leaked the documents to the press.

  Heinrich Albert had placed newspaper ads to retrieve his lost briefcase, and on 15 August he was mortified to see that the newspapers had responded: splashed across the front page of the New York World was his damning correspondence. The newspaper, without revealing where it had obtained the evidence, itemised Germany’s spy crimes, and named von Bernstorff, von Papen and Albert – jokingly referred to thereafter as the ‘Minister Without Portfolio’ – as foremost in their perpetration.

  Despite all this publicity, Woodrow Wilson still played the caution card, seeing himself as the world’s peacemaker, while Ambassador von Bernstorff coolly characterised the incident as some unsporting American trick and, moreover, not of any consequence: ‘The affair was merely a storm in a teacup; the papers as published afforded no evidence of any action either illegal or dishonourable.’ In fact, von Bernstorff was covering the fact that despite his position, he wasn’t privileged to know everything that German agents were getting up to in the US – von Papen and his crew used their own set of codes to communicate with Berlin, which the British intercepted but von Bernstorff did not.

  Even so, the evidence was piling up. From the time of Albert’s lapse on the Sixth Avenue train to the middle of December, there were 23 acts of sabotage in the United States, or on ships sailing from her, as well as two in Canada carried out by German agents based in Detroit. Trains carrying munitions exploded, ships caught fire, munitions factories were destroyed by explosions or fires, and German agents were arrested and confessed, implicating Franz von Papen as the mastermind of their actions. The net was tightening.

  On 19 August, another White Star passenger liner, the RMS Arabic, was torpedoed without warning by a U-boat, and sank in just nine minutes off the coast of Ireland, near the spot where the Lusitania had gone down three months earlier. Forty-four people died, including three Americans, and the United States was now confronting a crisis: if the Germans had sunk the Arabic deliberately, they would break off diplomatic relations, a prelude to war.

  On the night that the Arabic went down, Count von Bernstorff was having dinner on the roof terrace of the Ritz-Carlton with Dr Constantin Dumba, the Austro-Hungarian ambassador to the US, and James Archibald, an American journalist. Archibald’s German sympathies had landed him on the payroll to write pro-German stories in American papers, deliver pro-German lectures, and courier sensitive documents through the British blockade to Germany and Austria.

  Dumba gave Archibald a packet of documents to take across the Atlantic, but the British knew he was coming because of the messages that Blinker Hall’s team was now decoding with the help of Germany’s no longer ‘most secret’ code, which had been delivered to von Bernstorff and company in April 1915. On 1 September, Archibald was hauled off the ship at Falmouth, and British agents searched for his briefcase containing the documents from Dumba. They even tore out wall panels in the saloons and lounges, but couldn’t find it. There was one place left to look: the captain’s safe, a sacrosanct spot staunchly defended by the ship’s skipper. Blinker Hall’s response to a naval protocol that he knew so well was unsentimental. He sent a squad of sailors and a couple of locksmiths on board to issue an ultimatum: if the captain didn’t open his safe, they’d open it for him. The captain opened the safe.

  In Archibald’s briefcase, the British found documents from the Austrian ambassador and his government planning to launch strikes and labour unrest at American munitions plant, with von Papen’s approval. In one letter Dumba disparaged President Wilson, and in another, from von Papen to his wife, the United States was the target: ‘I always say to these idiotic Yankees that they should shut their mouths and better still be full of admiration for all that heroism.’

  Despite the secret agreement between Germany and the USA that the Germans would no longer torpedo passenger liners, and German insistence that the sinking of the Arabic was an accident, Woodrow Wilson had finally seen enough, relatively speaking. He ordered an investigation into the activities of the German military and naval attachés in the United States, which produced more evidence of the secret war waged from within by von Papen and Boy-Ed. Wilson demanded their expulsion, and the duo were declared personae non gratae and recalled to Germany, despite von Bernstorff’s protests of persecution: ‘both [von Papen] and Captain Boy-Ed were constantly attacked in the anti-German press, and accused of being behind every fire and every strike in any munition factory in the United States’.

  It was the returning Franz von Papen that Blinker Hall now had in his sights. When his ship appeared off the coast of England, a British boarding party paid a visit. Even though von Papen was travelling under an American guarantee of safe conduct, this did not include all the incriminating documents, enciphered and not, that he carried in his steamer trunk. In his possession was a chequebook showing deposits of more than $3 million from the secret war’s paymaster Heinrich Albert, as well as stubs bearing the names of suspected or already subpoenaed German saboteurs. Hall released details of his haul to the newspapers, hoping that this further proof of German treachery would bring America’s warriors to the Allied side.

  It was not yet to be.

  Back in Berlin, von Papen and Boy-Ed were decorated and dispatched back into service, with von Papen winding up a battalion commander and seeing action at the Somme and Vimy Ridge before promotion to the general staff and transfer to Palestine. Boy-Ed resumed work with German naval intelligence. The expulsion of two major players in Germany’s campaign in America would seem to have been a winning blow for the Allied cause, though the Germans were far from defeated in the USA. But now the Americans were starting to fight back.

  Despite the efforts of Blinker Hall’s men to help the country they hoped would soon become their ally by gathering intelligence the US could not, Germany’s subversion and sabotage campaign benefited immensely from the primitive and unwieldy state of the USA’s secret services. When war broke out in August 1914, the United States had no national security service it could command to ensure that it didn’t become a North American front for a European conflict. As a result, it relied on the Justice Department’s Bureau of Investigation (which would add the prefix ‘Federal’ in 1935), the Secret Service of the Department of the Treasury, and local police forces, abetted by private contractors such as the Pinkerton Detective Agency, the venerable private investigation firm formed in 1850 that had been personal bodyguard to Abraham Lincoln during the US Civil War. The Pinkertons, along with Dougherty’s agency, buttressed the paltry 300 federal agents collecting and countering intelligence for the USA in 1914. As far as German sabotage and spying in the United States went, the Americans still looked at it through the lens of police work.

  This meant that Captain Thomas Tunney, leader of the New York City Police Department’s bomb squad, had his work cut out. Tunney, with his trim moustache and gimlet cop’s eye, had joined the NYPD in 1897, when he was 24 years old. As an Irish Catholic serving in a police force with a formidable Irish Catholic presence, Tunney’s intelligence, integrity and diligence – more than his tribal identity – propelled his career forward.

  He became interested in bombs in 1904, when European anarchists brought their war to New York City, and caused considerable property damage. Over the next decade he would learn about the various kinds of explosives in the bomb-maker’s arsenal, their relative strength, how they were detonated, and the containers used to house them. Equally important was the handling and disposal of unexploded bombs.

  Captain Thomas Tunney of the New York Police Department Bomb and Neutrality Squad

  Tunney was an acting captain when Police Commissioner Arthur Woods created the bomb squad in August 1914, in the aftermath of an accidental explosion on 4 July i
n an apartment in Harlem. That blast killed three members of an Italian anarchist group who were building a bomb destined for the Rockefeller estate in Tarrytown, New York. The squad’s mandate was to investigate and suppress the activities of anarchists and the city’s various organised blackmail and extortion gangs, such as the Black Hand, who used bombs as their weapons of choice when they weren’t shooting, garrotting or stabbing. As the war in Europe settled into a long-term slaughter, their investigations expanded to include the activities of Germans and German-American sympathisers attempting to disrupt the flow of Allied shipments of food and war materials through New York Harbor. As Tunney put it, ‘it took no superhuman amount of reasoning to combine the abnormal destruction of property in New York with the strong suspicion of German activity’.

  And so the Bomb and Neutrality Squad was formed, working not in the depths of a government building solving enciphered puzzles, but pounding the pavement to decode just why one German was so busy along the New York waterfront in the autumn of 1915.

  Paul Koenig, ‘a sort of cross between Dr Moriarty and a gorilla, a slippery conniver one minute and a pugnacious bully the next’, as Tunney described him in his lively memoir Throttled!, was the chief detective for the Hamburg America Line, a German steamship company that had transported generations of German emigrants to the United States. Koenig, derisively called ‘the bullheaded Westphalian’ by workers behind his brawny back, had patrolled the New York/New Jersey waterfront for Hamburg America since 1912. His duties had included investigating fires, theft, stowaways and charges against officers on the line’s ships. Then, in late August 1914, his diary recorded that he had begun work for a higher power, the Fatherland: ‘Aug. 22. German government … entrusted me with handling a certain investigation. Military attaché von Papen called at my office later and explained the nature of the work expected. (Beginning of Bureau’s services for Imperial German government.)’

  In September, Koenig met von Papen and was instructed to set up a ‘Bureau of Investigation’ for him. This he did with ruthless efficiency, and by the time he caught Tunney’s attention, his network had thoroughly penetrated the New York docks. Tunney couldn’t help but notice that Koenig was ‘curiously busy’ at a time when the German ships he watched over were lying idle, and that in turn made Tunney and his men ‘busily curious to find out why’.

  Their initial attempts to shadow the huge and shrewd Koenig proved amusing to their target, who, as a detective himself, knew the tricks of tailing, and would pop out of the shadows to laugh in the faces of the New York cops who thought he hadn’t noticed them following him on his missions. Tunney and his men – a ragout of ethnicities that reflected the melting pot of America, and would prove useful to undercover work – adapted their methods, and with a more subtle form of ‘team tailing’, where one man would hand off surveillance to another, they were soon able to keep discreet tabs on Koenig.

  Paul Koenig, chief detective for the Hamburg America Line

  Koenig’s ambit in New York was intriguing: from the Hamburg America offices in Lower Manhattan, he would make regular visits uptown to Pabst’s German restaurant in Columbus Circle, to the German Club on Central Park West, to Lüchnow’s in Union Square, as well as to the Belmont and Manhattan hotels, which Tunney lamented had direct connections to the subway from their basements, and provided saboteurs and murderers alike with quick and effective escape routes.

  Tunney decided to ‘cut in on the wire’ of the Hamburg America office phone, and finally caught a break: one of Koenig’s operatives was furious at the intimidating detective over that age-old source of conflict, money. The call was traced to a pay phone in a saloon, and a bartender with a good memory: the man they were looking for lived around the corner. Police work did the rest, and so George Fuchs, the man with the grievance against Koenig, was invited to come for a job interview at a phoney German wireless company set up by the NYPD.

  Detective Valentine Corell, who spoke German, played the part of the office manager, and after establishing that Fuchs was easily the best man for the job took him out for a drink at a nearby bar. Over mugs of beer, he teased out the story of Fuchs’ grievance. Fuchs had done a lot of espionage work for Koenig, even scouting out the Welland Canal and working on a plan to blow it up. As an employee of Koenig’s Bureau of Investigation, at $18 a week, he spied on ships and cargo leaving New York, did special guard duty at Heinrich Albert’s office, and acted as general muscle for German dignitaries. He had called in ill on a recent Sunday, and Koenig had responded that ‘illness should never interfere with service to the Fatherland’. He had fired Fuchs, citing his ‘constant quarrelling … drinking, and disorderly habits’, and then made his fatal mistake: he refused to pay Fuchs the $2.57 due to him in back pay.

  Tunney now had enough evidence to arrest Koenig, but as the crime was federal, he turned the evidence over to the Department of Justice. With Koenig in custody, Tunney and the detectives who had broken open the case were amazed by his little black memorandum book, which ‘told the story of the Bureau of Investigation with a devotion to detail almost religious’.

  It also told that story in code. Koenig had devised a simple but effective system for keeping track of his activities, with aliases for himself, and code numbers for his contacts: the German embassy was 5000; von Papen 7000; Boy-Ed 8000, and so on. He also changed code names frequently for rendezvous spots – ‘Pennsylvania Station’ was code for Grand Central Station at one point, and ‘Brooklyn Bridge’ rather fancifully meant the bar in the Unter den Linden restaurant. If a meeting was to take place in Manhattan, the address as revealed over the telephone would be five blocks further than the actual street number (i.e. a meeting supposedly on 15th Street would really be on 20th).

  Koenig changed these codes weekly, and his black book provided ample evidence to the Bomb and Neutrality Squad of Germany’s distinctly non-neutral actions in the USA. Koenig was eventually imprisoned for his role in the Welland Canal plot, but his capture did not stop the Germans from waging their war in America. The network of German agents was now diverse and determined to build on the success it had seen, and the astonishingly light consequences for its actions meant that now Germany would be even bolder in attacking targets in the United States.

  Blinker Hall and Room 40 had become adept at intercepting and decoding cables from Berlin to the embassy in Washington, and their intelligence, said Maurice Hankey, Secretary to the Committee of Imperial Defence, was priceless as it gave the British war planners information about how Berlin was viewing the war in Europe by virtue of how widely and deeply it wanted to wage the war in the United States. Despite the activities of German agents in the USA, an intercepted communiqué between German chancellor Bethmann-Hollweg and von Bernstorff revealed that the Germans saw the USA as a welcome peace-broker, if Wilson committed to a peace plan soon, before England could get the upper hand.

  But the British wanted more than intelligence; they wanted the USA to realise that it was already at war with Germany, and to join in a fight that had now spread around the world. The Turks had attacked the British at the Suez Canal and begun their genocide of the Armenians; Italy had entered the war on the side of the Allies, and Bulgaria on the side of the Germans; in Africa, the Allies captured Namibia, while the Germans conquered Warsaw; and the Allies attacked Turkey via the Gallipoli Peninsula, suffering a quarter of a million casualties and a defeat so severe that Winston Churchill, First Lord of the Admiralty and champion of the doomed battle plan, was consequently demoted before resigning in humiliation. He then joined the battle on the Western Front as a lieutenant-colonel commanding the 6th Batttalion of the Royal Scots Fusiliers.

  The Western Front was an ever-expanding mass graveyard. The Germans had used poison gas for the first time in history at the Second Battle of Ypres in April 1915, which the Allies held at the cost of nearly 70,000 casualties; the Allies reciprocated by gassing the Germans in the futile Loos offensive in September and October, which saw another 50,000 Briti
sh casualties, as well as the sacking of their commander, Sir John French, who was replaced by Sir Douglas Haig. And despite the sinking of the Lusitania and German promises to respect neutrality, German U-boats continued to kill Americans, until US protests led them to call off unrestricted submarine warfare in the Atlantic in September 1915. The Germans simply redeployed their U-boats to attack shipping in the Mediterranean. In more than a year of the most epic combat the world had ever seen, all that had been decided was that things were getting worse.

  In a New Year’s Day 1916 editorial, The New York Times presented the cost as rendered at the Pan-American conference then meeting in Washington, one whose bureaucratic cool failed to mask the galloping expense: ‘The money cost of the war to July 31 this year, exclusive of the capitalized value of human life, was estimated at $37,696,774.00 … By January 1, the aggregate would be $55,000,000.00, and should the war continue at the end of the second year, next August, it would reach $88,000,000.00. At the end of the second year the probable human loss was estimated to be 12,000,000 lives. The capitalized value of those lost workers was placed at $35,196,000,000.00.’ The piece also reported that the USA had loaned a dozen of the hostile nations more than $889,000,000 at a yield of ‘six per cent or more …’ Adjusted for inflation, as US dollar in 1916 was worth 22 times what it is today. The USA had, within less than two years, become banker to the world.

  In London, the intelligence powers knew the human and financial cost all too well, and decided that it was time to give their American cousins some more help in fighting the enemy within, if only to fuel the Allied cause by preserving ‘guns and money’ from the USA until the Americans joined the Allied fight to help win it as soon as possible. On 28 October 1915, two Englishmen had arrived in New York City seemingly to do business with Touche and Niven, an accountancy firm in Lower Manhattan connected to the parent firm of George A. Touche & Co. of London. The older man, Sydney Mansfield, was about 40, with distinguished grey hair and the manner of an affluent businessman – which he really was, with the private British investment firm of Hendens Trust. His younger companion was the 30-year-old Sir William Wiseman, who, though Mansfield’s boss at Hendens Trust, was in New York on a very different kind of private investment: he was also Captain William Wiseman, a wounded warrior now on a crucial mission from his army boss, Commander Mansfield Smith-Cumming (‘C’), head of Britain’s Secret Intelligence Service (which would become MI6).