The Defence of the Realm

by Christopher Andrew

  [MI5] moved from being an organisation employing a few people before the war, investigating a few hundred individual suspects; to being a large body employing hundreds of people, conducting thousands and thousands of investigations, putting forward methods of control that affected every person either travelling or sending correspondence to or from foreign countries.121

  During the war MI5 checked the background credentials of approximately 75,000 individuals against their records in the Registry, many in connection with visa applications and travel permits.122 The best-known espionage suspect detected by MO5(g)’s Port Control was the striptease dancer and courtesan Margaretha Geertruida Zelle, alias Mata Hari. Zelle was a fantasist who, in place of her conventional Dutch bourgeois origins, invented an exotic upbringing as a dancer in a Hindu temple on the banks of the River Ganges. The audiences from Parisian high society who attended her performances were thus able to persuade themselves that they were participating not in the vulgar excitement of the can-can at the Moulin Rouge but in the sacred mysteries of the Orient.123 According to a report in her MI5 file, the introduction of a large snake into her act, combined with her own ‘scanty drapery and sinuous movements’, caused particular excitement among German and Austrian audiences. In December 1915 Zelle was stopped by Ports Police at Folkestone attempting to board a boat for France, and was questioned by Captain Stephen Dillon of E Branch, who described Zelle as ‘handsome, bold . . . well and fashionably dressed’ in an outfit with ‘raccoon fur trimming and hat to match’: ‘Although she had good answers to every question, she impressed me very unfavourably, but after having her very carefully searched and finding nothing, I considered I hadn’t enough grounds to refuse her embarkation.’

  Zelle subsequently made her way to The Hague, where, according to reports passed to MI5, she was paid by the German embassy and ‘suspected of having been to France on important mission for the Germans’.124 In November 1916, Zelle had her second brush with British intelligence. She was removed by Ports Police from a steamer which called at Falmouth en route to Holland, and taken, with her ten travelling trunks, to be questioned in London by Basil Thomson and MI5. ‘Time’, in Thomson’s view, ‘had a little dimmed the charms of which we had heard so much.’ Once again, it was decided after questioning Zelle that there was insufficient evidence to justify her arrest.125 In February 1917, however, she was arrested in Paris. Shortly afterwards, French military intelligence reported to MI5 that she had confessed to working for the Germans.126 On 15 October Zelle was shot at dawn by firing squad at the Château de Vincennes, refusing a blindfold and blowing a kiss to her executioners just before they opened fire.127 In November MI5’s liaison officer at the French War Ministry, Lieutenant Colonel Hercules Pakenham, was allowed to read her file, which contained the transcript of a confession in which she admitted to receiving 5,000 francs per mission from German intelligence to collect Allied secrets. Pakenham reported to MI5 Head Office, however, that ‘she never made a full confession.’ Though Zelle admitted to passing the Germans ‘general information of every kind procurable’, none of the examples noted in Pakenham’s report amounted to espionage.128 MI5’s earlier doubts about the strength of the case against Zelle, based on her two interrogations in Britain, were probably well founded. Zelle fantasized about espionage in much the same way that she had earlier fantasized about being a Hindu temple dancer. In the intervals between her sexual liaisons with officers of several nations, she offered her services to both French and German intelligence but does not seem to have provided significant intelligence to either.

  The most extreme form of protective security in both world wars was the internment of aliens. The Aliens Restriction Act had given the government carte blanche to ‘impose restrictions on aliens’ and DORA Regulation 14B empowered the authorities to detain persons of enemy origin whenever ‘expedient for securing the public safety or the defence of the realm’. Enemy aliens were required to register with the police and forbidden to live in a large number of ‘prohibited areas’ without permits from the police. The government claimed early in 1915 that ‘Every single alien enemy in this country is known and is at this present moment under constant police surveillance.’ For the popular press and probably for most of the public, surveillance was not enough. Spy mania and indignation at German war crimes (most but not all of them mythical) fuelled protests against government reluctance to intern more than a small minority of enemy aliens. In May 1915, somewhat against his better judgement, Asquith gave way to public pressure. McKenna reluctantly concluded that anti-alien feeling ran so high that male enemy aliens might well be safer if interned. Henceforth the government adopted, though it did not always enforce, the principle that all enemy aliens should be interned unless they could prove themselves to be harmless. Ultimately at least 32,000 (mostly men of military age) were interned, at least 20,000 (mostly women, children and non-combatant men) repatriated, and the remainder subjected to numerous restrictions.129

  MO5(g)’s leadership supported a hardline policy on internment.130 Its policy was informed by ethnocentric prejudice as well as by the needs of preventive security. Holt-Wilson regarded all ‘persons of German blood’ as security risks – despite the presence in MO5(g) of the half-German Hinchley Cooke.131 He told the Aliens Sub-committee of the Committee of Imperial Defence in June 1915:

  The patriotism and discipline inherited with their blood which lifts some men beyond the fear of death will also inspire Germans gladly to risk and suffer any penalty, and to disregard all laws of honour or humanity, that they may contribute but a trifling service to their fatherland at the cost of their enemy.

  Those of German blood who had spent much of their lives in Britain were even more dangerous than recent arrivals: ‘Long residence in Britain adds greatly to the mischief to be apprehended from an alien enemy.’ The longer they had been in Britain, the greater their capacity to damage the war effort.132 MO5(g) had some reason to suspect that German intelligence had long-term ‘sleepers’ in Britain. Karl Ernst, the ‘Kaiser’s postman’, who played a key role in Steinhauer’s communications with his agents, was well integrated into British life and was discovered after his arrest in August 1914 to have British nationality.133 Frederick Adolphus Schroeder, alias Gould, probably Steinhauer’s most successful pre-war spy, had an English mother, spoke perfect English and established himself in the quintessentially English profession of publican. But, though MO5(g)’s fears of unidentified German sleepers were reasonable, they turned out to be misplaced. The most striking characteristic of the German spies detected after the first year of the war is that most were not German.134

  The first two years of the war saw the beginning of a rivalry between Kell and Assistant Commissioner Basil Thomson of the Met, which was to have a significant effect on MI5’s immediate post-war history. Thomson, son of the late Archbishop of York, had a remarkably colourful career. After Eton, he dropped out of Oxford University and entered the Colonial Service. He later recalled: ‘My first native friends were cannibals, but I learned very quickly that the warrior who had eaten his man as a quasireligious act was a far more estimable person than the town-bred, missioneducated native.’ He went on to become prime minister of Tonga (at the age of only twenty-eight), private tutor to the Crown Prince of Siam and governor of Dartmoor Prison.135 Once at Scotland Yard in 1913, he threw himself energetically into counter-espionage work, revelling in the publicity which resulted from it. Kell approved of the popular misconception of the Special Branch’s role. As Holt-Wilson wrote later: ‘We welcome the unshakeable belief of the public that “Scotland Yard” is responsible for dealing with spies. It is a valuable camouflage.’136

  As a secret organization MI5 could not publicly claim credit for its part in the capture of German spies. The more flamboyant Thomson, already well used to publicizing his achievements, could and did. In the process he earned the collective enmity of most of MI5. Reginald Drake, head of counter-espionage in MI5 until 1917, wrote later to Blinker Hall: ‘As y
ou know B.T. did not know of the existence, name or activity of any convicted spy until I told him; but being the dirty dog he was he twisted the facts to claim that he alone did it.’137 There was, inevitably, some overlap in the activities of MI5 and the Special Branch which added further to the rivalry between them. Eddie Bell, who was responsible for intelligence liaison at the US embassy, wrote after the war that when the embassy wished to make inquiries about people claiming American citizenship arrested on suspicion of being German spies ‘it became almost a question of flipping a coin to decide whether application for information should be made to Scotland Yard, the Home Office or MI5.’ Blinker Hall had much greater sympathy for the flamboyant Thomson than for the retiring Kell. Bell reported ‘considerable jealousy between the Intelligence Department of the War Office and the Admiralty, the latter affecting to despise the former, particularly MI5, whom they always described as shortsighted and timorous . . .’.138 While Thomson enjoyed the limelight, Kell shunned it. His only known publication is a letter to a newspaper on the behaviour of the lapwing.139

  In the later stages of the war, Thomson was to emerge as the most formidable rival encountered by Kell in his thirty-one years as director. In the power struggle which ensued, Kell’s Bureau became a victim of its own successes. Had German espionage remained a serious apparent threat throughout the war or Germany succeeded in launching a major sabotage campaign in Britain, Kell would have found it much easier to retain the lead domestic intelligence role. But during the second half of the war, with government now more concerned with subversion than with espionage, it was easier for Thomson than for Kell to gain the ear of ministers.

  3

  The First World War

  Part 2: The Rise of Counter-Subversion

  On 3 January 1916, as part of a War Office reorganization, Kell’s Bureau became MI5: the name by which it has been best known ever since. Its three main branches were F (preventive intelligence), G (investigations) and H (secretariat, Registry and administration). Holt-Wilson, the head of F Branch, was also put in charge of Branches A (aliens), E (port and frontier control) and, later in the year, D (imperial and overseas, including Irish, intelligence).1 Recruitment was even more rapid than in 1915: there were 423 recruits in 1916, another 366 in 1917 and 484 in 1918. There was a substantial turnover of staff, with about 700 leaving in the course of the war.2 The turnover was greatest among the Registry and secretarial staff – an indication of the demanding and stressful nature of their work.3 A minority were required to work even at Christmas. A caricature by Hugh Gladstone, drawn on Christmas Day 1916, shows a group of Registry staff seated around a large Christmas pudding.4 By the Armistice MI5’s card index had grown to about a million names.5 The Black List of key suspects filled twenty-one volumes containing 13,524 names.6

  Change in Registry (section H2) working practices owed much to the staff themselves. According to one enthusiastic account:

  All the members of the staff in H-2 being intelligent people are treated as such; they are invited to make any suggestions which occur to them for the improvement of the machinery of the office and they are made to feel that they have an important and personal share in the work. So much is this the case that many of the important improvements that have been from time to time adopted, have been suggested by members of the staff.7

  Those able to stand the pace of wartime life in MI5 later looked back fondly at its camaraderie. As one inexperienced poet wrote in the programme for the Service’s end-of-war ‘Hush-Hush’ Revue:

  We’ll think of when we had the ’flu,

  The days we had to ‘muddle through’,

  And all the work we used to do

  To snare the wily Hun

  Of days when strafes were in the air

  And worried secretaries would tear

  Great handfuls of their flowing hair

  And swear at everyone.

  We’ll think with something like regret

  Of all the jolly friends we met;

  The jokes that we remember yet

  Will once again revive.

  Here’s to the book that’s just begun

  May it recall to everyone

  The jokes and laughter and the fun

  We had in M.I.5.

  The steady growth in wartime staff meant that by the summer of 1916 MI5 had outgrown its accommodation in Watergate House and the neighbouring Adelphi Court, and moved to larger headquarters in Waterloo House, 16 Charles Street, Haymarket. Waterloo House contained a canteen which was big enough to double as a social club. Staff were also allowed on to the roof which, as one later recalled, provided both ‘a breath of fresh air and . . . a view of Nelson’s column’.8 As expansion continued, additional premises were taken at Cork Street in April 1917, and at Greener House, next to Waterloo House, in June 1918. Protective security at MI5’s wartime headquarters was, by later standards, casual. In 1918 MI5’s second car, the ‘Müller’, purchased with funds sent by German intelligence to its agent Karl Müller, was stolen from outside the front door of Waterloo House.9

  By the end of the war, MI5 had a total staff of 844.10 At its London headquarters there were 84 officers (some civilian but a majority with army rank), 291 female Registry and secretarial staff, 15 male clerks, 77 ‘subordinate staff’ and 23 police. One of the greatest changes in the course of the war was that by the Armistice over 40 per cent of staff were stationed outside London at home ports, permit offices and missions in Allied countries: 255 Ports Police (who, in an era before air travel, monitored all arrivals to and departures from the UK), 49 officers, 34 female and 7 male clerks, 9 subordinate staff.11

  With the decline of German espionage in Britain, MI5’s main priority during 1916 moved from counter-espionage to counter-subversion. It was entirely reasonable for MI5 to expect German intelligence to engage in a major campaign of subversion to try to undermine the British war effort. From the beginning of the war the Prusso-German General Staff developed a strategy of ‘fomenting revolution’ (Revolutionierungspolitik), which it sought to implement by sponsoring subversive movements in Allied countries. As Thomas Boghardt has noted: ‘German agents financed French pacifists, American labour organisations and Indian nationalists. They supported Russian revolutionaries, Muslim jihadists and Irish republicans.’12 The fact that, though MI5 and Whitehall failed to realize it at the time, German intelligence made no serious attempt at subversion in mainland Britain reflected not any lack of desire to damage the British war effort but the belief, particularly after the main German agents during the first year of the war had been arrested, that Britain was a harder target than its main Allies.

  At the outbreak of war Berlin believed that the most effective way to subvert the United Kingdom was by assisting Irish Republican attempts to end British rule. Its main hopes were pinned on the Irish exile Sir Roger Casement, formerly a distinguished member of the British consular service, who sought German support for an Irish rebellion. The most important British informant on Casement’s activities in the early months of the war was his bisexual Norwegian-American manservant and lover, Adler Christensen, who accompanied him on a journey from the United States to Oslo (then Christiania) in October 1914, en route to Germany. On his arrival in Oslo, Christensen made secret contact with the British minister, Mansfeldt de Carbonnel Findlay, and gave him copies of several incriminating documents Casement was carrying with him, including a ciphered letter of introduction from the German ambassador in Washington, Count Johann Heinrich von Bernstorff, to the German Chancellor, Theobald von Bethmann-Hollweg. The Foreign Secretary, Sir Edward Grey, found Christensen’s information so important that he sent copies of Findlay’s report to the Prime Minister, Herbert Asquith, the Secretary of State for War, Field Marshal Earl Kitchener, the First Lord of the Admiralty, Winston Churchill, and the Chief Secretary for Ireland, Augustine Birrell.13

  Casement’s rudimentary attempts to outwit British postal censorship were remarkably naive. On 7 December 1914 he posted a letter in Rotterdam to Alic
e Stopford Green in London for onward transmission to the chief of staff of the Irish Volunteers, Eoin MacNeill. As a well-known Irish nationalist, Mrs Green was an obvious target for postal censorship, as was all mail from neutral Netherlands (which included items originating in Germany). Casement’s short, unsigned covering letter was full of thinly concealed references to German support for the liberation of the ‘four green fields’ (easily identifiable as the four provinces of Ireland) from the ‘stranger’ (Britain). Though this primitive level of concealment would in any case have been unlikely to deceive the censor, it was rendered pointless by the unambiguous language used by Casement in the accompanying letter to MacNeill:

  I am in Berlin and if Ireland will do her duty, rest assured Germany will do hers towards us, our cause and our whole future . . . Once our people[,] clergy and Volunteers know that Germany, if victorious, will do her best to aid us in our efforts to achieve an independent Ireland, every man at home must stand for Germany and Irish Freedom . . . Tell all to trust the Germans – and to trust me.

  Casement’s letter was unsigned. ‘You know who writes this,’ he told MacNeill. So did MO5(g).14

  The most important intelligence in tracking German support for Casement came from the Admiralty SIGINT unit, Room 40. Between the outbreak of war and the eve of the Easter Rising in 1916, Room 40 decrypted at least thirty-two cables exchanged between the German embassy in Washington and the Foreign Ministry in Berlin dealing with German support for Irish nationalists. The first was a telegram from the German ambassador in Washington, Bernstorff, to Berlin on 27 September 1914, reporting a meeting with Casement to discuss raising an Irish Brigade from among prisoners of war captured by the Germans (though the date at which the telegram was decrypted remains uncertain).15 The most important decrypts were those which revealed that German arms for the Easter Rising were to be landed in Tralee Bay in the spring of 1916 and that Casement was following by U-boat. The steamer Aud, carrying German munitions, was duly intercepted by HMS Bluebell on 21 April 1916, ordered to proceed to Queenstown and scuttled by its German crew just as it arrived. After his arrest Casement was jointly interrogated at Scotland Yard by Thomson, Captain Reginald ‘Blinker’ Hall, the DNI, and MI5’s main Irish expert, the Old Harrovian Major (later Lieutenant Colonel) Frank Hall (no relation to the DNI), a landowner from County Down.16 The many conspiracy theorists attracted by the Casement affair have surprisingly failed to notice that before the war Frank Hall had been military secretary of the Ulster Volunteer Force and a gun-runner himself.17 Like most officer recruits to MI5, his main recreations were outdoor pursuits, in his case shooting and yachting. As well as having a strong dislike of Irish nationalism, Hall had a keen sense of imperial pride, claiming when he joined MI5 in December 1914 to have visited ‘every Imperial defended port N. of the Equator except Sierra Leone’.18 Churchill later noted that Kell was ‘not specially acquainted with Irish matters’ and relied on Hall’s expertise.19