The Defence of the Realm

by Christopher Andrew

  The battle of Cable Street, condemned by the BUF as ‘the first occasion on which the British Government has surrendered to Red Terror’, gave Mosley just the publicity he was looking for. The Security Service reported that at meetings organized by Mosley in the East End immediately afterwards ‘the display of pro-Fascist sentiments on the streets surprised a number of experienced observers.’ But the BUF resurgence was short lived. At the end of November 1936 MI5 put BUF membership at ‘a maximum of 6,500 active and 9,000 non-active members’; the Special Branch put it rather higher, and probably less accurately, at a total of nearly 20,000.42 With the banning of the Blackshirts the BUF dwindled into peacetime insignificance.43 The Security Service, however, regarded it as a potential wartime threat. Holt-Wilson drafted an amendment to the Government War Book (a classified compendium of legislation, regulations and other measures to be introduced in wartime) which was intended to ensure that British citizens should not, as in the First World War, be exempt from internment. In July 1937 the Committee of Imperial Defence approved the terms of a draft Bill providing for ‘the detention of persons whose detention appears to the Secretary of State to be expedient in the interests of the public safety or the defence of the Realm’, so laying the groundwork for the internment of Mosley and many of his followers three years later.44

  By the time the British Blackshirts lost their shirts, Germany had, for the first time since the First World War, replaced Soviet Russia as the main target of British foreign intelligence. The Soviet menace slipped into fourth place in the SIS ‘Order of Priorities’ behind the more important threats to British interests from Germany, Italy and Japan.45 German rearmament also produced a modest revival of British government interest in its intelligence services. On 16 March 1935, in defiance of the Versailles Treaty, Hitler announced the introduction of conscription. On the 25th he made the exaggerated boast that the Luftwaffe had already ‘reached parity’ with the RAF. An investigation by the Ministerial Committee on Defence Policy and Requirements discovered a serious shortage of intelligence on the Luftwaffe and ‘brought out very clearly the need for increased financial provision for Secret Service funds’. Without debate in parliament the Secret Vote was raised from £180,000 in 1935 to £250,000 (with a supplementary vote of £100,000) in 1936, to £350,000 in 1937, to £450,000 in 1938 and to £500,000 in 1939.46

  The most committed Whitehall supporter of both MI5 and SIS was Sir Robert Vansittart, permanent under secretary at the Foreign Office from 1930 to early 1938. ‘Van’ was much more interested in intelligence than his political masters were. Unlike Simon and Sir Nevile Henderson, the British ambassador in Berlin, he ‘felt that we indulged in it all too little’,47 dined regularly with Quex Sinclair,48 was also in (less frequent) touch with Kell,49 and built up what became known as his own ‘private detective agency’ collecting German intelligence.50 More than any other Whitehall mandarin, Van stood for rearmament and opposition to appeasement. His suspicions of Germany were of long standing. As a student in Germany, he had been challenged to, but succeeded in declining, a duel. A generation later he was among the first in Whitehall to forecast, in May 1933, that ‘The present regime in Germany will, on past and present form, loose off another European war just so soon as it feels strong enough . . . We are considering very crude people, who have few ideas in their noddles but brute force and militarism.’51 Van later described his German sources as ‘a few brave men’ who ‘knew that I realised a war to be nearing’: ‘They thought that, if they fed me with sufficient evidence, I might have influence enough to arouse our Government and so stop it. Of course they were wrong, but we tried.’52

  With Vansittart’s encouragement, the Security Service began for the first time to develop sources within the German embassy.53 By far the most important was the aristocratic diplomat Wolfgang zu Putlitz, proud of the fact that his family had owned the castle at Putlitz in Brandenburg since the twelfth century. Putlitz’s first experience of Britain, on arriving to learn English in 1924 to prepare for a diplomatic career, was mixed. Though he had a letter of introduction to Lady Redesdale (mother of the Mitford sisters), when he went to call on her the door was shut in his face.54 Putlitz did, however, become close friends with a German journalist in London, Jona Ustinov, who was recruited as an MI5 agent (codenamed U35) early in 1935,55 six months after Putlitz (then aged thirty-five) was posted to the German embassy in London. Both men were committed anti-Nazis, though Putlitz later had to join the Party in order to keep his job. Putlitz (codenamed PADGHAM by the Security Service) later recalled that he met Ustinov every fortnight:

  I would unburden myself of all the dirty schemes and secrets which I encountered as part of my daily routine at the Embassy. By this means I was able to lighten my conscience by the feeling that I was really helping to damage the Nazi cause for I knew [Ustinov] was in touch with Vansittart, who could use these facts to influence British policy.56

  Vansittart put Kell in touch with Ustinov, doubtless intending the Security Service to use him as its point of contact with Putlitz.57 Ironically, in view of the fact that Van listed homosexuality (along with Communism and ‘Deutschism’) as one of his three pet hates,58 Putlitz was gay; his partner, Willy Schneider, also acted as his valet.59

  Jona Ustinov strongly disliked his given name and, rather oddly, much preferred the unappealing nickname ‘Klop’ (Russian for ‘bedbug’). In his twenties his build was so slight that his Russian-born wife, the artist and designer Nadia Benois, called him by the diminutive ‘Klopic’ (‘little bed bug’); as he became more portly in appearance, she reverted to ‘Klop’.60 Ustinov’s first case officer, Jack Curry, had his portrait painted by Nadia.61 Dick White, who later succeeded Curry as case officer, called Klop Ustinov the ‘best and most ingenious operator I had the honour to work with’.62 While running Ustinov, Curry rarely saw Vansittart but had frequent contact with two high-flying young diplomats, William Strang and Gladwyn Jebb, who briefed him on foreign policy. As a result, Curry became the first Security Service officer to have regular access to British diplomatic documents – in particular despatches from the ambassadors in Berlin and Rome: ‘This gave me an inside view of the situation created in Europe by Hitler and the Nazi leaders, and it enabled me to indicate to [Klop] questions on which it was desirable for Putlitz to develop sources of information.’ For several years, Curry sent regular reports to Vansittart on the information supplied by Putlitz and other sources in the German embassy.63

  As well as providing important intelligence on German foreign policy, Putlitz, and other Security Service sources in the German embassy, supplied information on the British section of the Auslands Organisation, the association of Nazi Party members living abroad. An application by the Security Service for an HOW on the London office of the Auslands Organisation had been turned down in January 1934. The permanent under secretary at the Home Office, Sir Russell Scott, told Kell that ‘unless we [MI5] discovered in the ordinary course of our work any case of subversive propaganda or other inimical steps against the interests of this country we were to leave them alone.’64 Kell himself was initially reluctant to become involved in the investigation of the Auslands Organisation. ‘Perhaps’, thought Curry, ‘he felt that in these matters he was getting into deeper waters than those which surrounded the simpler issue of dealing with espionage by a foreign power and its agents.’ The Director was finally persuaded by Vansittart and B Branch.65 By 1935 the Security Service had identified 288 Nazi Party members resident in Britain, as well as 870 Italian Fascists (members of the Fasci all’Estero).66 In May 1936 MI5 called a meeting attended by representatives from the Home Office, Foreign Office, Colonial Office, SIS and several other government departments, at which it laid out its concerns about the Auslands Organisation:

  Since the Nazi machine has unprecedented power over the individual it can direct the energies of every member of the Party in any desired direction. If, as at present, the Führer desires friendship [with Britain] every man is adjured to act and s
peak with that in view. We cannot lose sight of the fact that in certain eventualities the whole energy of the machine could be directed in the reverse direction. It is, for instance, a ready-made instrument for intelligence, espionage, and ultimately for sabotage.67

  Though Security Service concerns about the Auslands Organisation were shared by Winston Churchill, who called it the ‘Nazitern’, they made little impact on Whitehall.68 MI5’s repeated calls for it to be banned were rejected.69 Curry, however, was instructed to prepare detailed plans for the arrest of all important members of the organization ‘if and when the Home Secretary decided that this should be done’. Copies of the Security Service card index of Auslands Organisation members were supplied to police forces, with instructions to arrest them on receipt of telegrams containing the codeword ANSABONA (constructed by Curry from the phrase ‘Anti Sabotage Nazis’). The telegrams were not sent until the organization was officially banned on the outbreak of war.70

  Among the Auslands Organisation reports to Berlin supplied by Putlitz which had the greatest impact on Curry was one correctly predicting that when Hitler ordered German troops into the Rhineland in March 1936, in contravention of Versailles (as well as of the Locarno Treaty signed by Weimar Germany), Britain would take no military action. The German ambassador in London, Leopold von Hoesch, made the opposite prediction and was condemned for his timidity by Hitler, who praised the more clearsighted vision of London Nazis. In the aftermath of the remilitarization of the Rhineland, greeted by cheering German crowds and the pealing of church bells, Curry – strongly influenced by warnings from Putlitz transmitted by Klop – ‘began to feel that there was danger of another great war’.71 In June 1936, Kell submitted to the Committee of Imperial Defence a ‘Memorandum on the possibilities of sabotage by the organisations set up in British countries by the totalitarian governments of Germany and Italy’, drafted by Curry, which may well have been the first document circulated in Whitehall to warn that negotiations with Hitler were likely to achieve nothing and that the vast territorial ambitions set out in Mein Kampf, even if at variance with his current rhetoric, must be taken seriously as a guide to his future conduct:

  No reliance can be placed on any treaty which has been signed, or may be signed, by Germany or Italy; any obligation which they have undertaken is liable to be repudiated without warning if it stands in the way of what their dictators consider at any moment to be the vital interests of their nations . . . If Hitler is the lord of Germany with a power for which history offers few examples, the question of the exact significance to be attributed to his book Mein Kampf has some bearing on his attitude to the supreme direction of foreign-policy-cum-military-strategy or Wehrpolitik . . . It is emphatically not a case of irresponsible utterances which have been discarded by a statesman on obtaining power.72

  Putlitz insisted, and B Branch believed, that the only way to deal with Hitler was to stand firm. Appeasement would not work.73

  By the time Hoesch died suddenly in April 1936, Hitler had probably already decided to replace him as German ambassador with the former wine and spirits trader Joachim von Ribbentrop, who arrived in London in August. Ribbentrop (the ‘von’ was fraudulent) compensated for his crude grasp of international relations by skilful sycophancy in telling Hitler what he wanted to hear. He became better known in London for a series of social gaffes which led Punch magazine to refer to him as ‘Von Brickendrop’. Putlitz, however, reported that Hitler continued to call him ‘a foreign policy genius’ (ein aussenpolitisches Genie).74 By a curious coincidence, Klop Ustinov’s son, Peter, spent the school year 1936– 7 in the same class at Westminster School as the son of Ribbentrop, sitting at the next desk. Peter Ustinov’s first success as a budding journalist was to earn seven shillings and sixpence from the Evening Standard for his lurid account of an artwork by the young Ribbentrop devoted to an enthusiastic depiction of warfare, murder and mayhem.75

  Putlitz reported that Ribbentrop’s arrival transformed the previously staid atmosphere of the London embassy into ‘a complete madhouse’. Staff discovered that their desks were being regularly searched at night by SS men whom the new ambassador had brought to London. After an early meeting with the Prime Minister, Stanley Baldwin, Ribbentrop announced contemptuously that ‘the old fool does not know what he is talking about.’ In September 1936 Putlitz reported that Ribbentrop and his staff regarded a German war with Russia as being ‘as certain as the Amen in church’, and were confident that Britain would not lift a finger when Hitler began his invasion. Ribbentrop placed high hopes in King Edward VIII, who had come to the throne at the beginning of the year. Because of his ignorance of the British political system, he greatly exaggerated the King’s ability to influence relations with Germany. As the abdication crisis loomed, Putlitz reported that Ribbentrop was trying to send the King a message via the pro-German Lord Clive that the ‘German people stood behind him in his struggle.’ ‘King Edward must fight,’ Ribbentrop told his staff, ‘and you will see, Gentlemen, that he is going to win the battle against the plotters!’ After the abdication in December 1936, Ribbentrop blamed ‘the machinations of dark Bolshevist powers against the Fülner-will of the young King’, and informed his staff: ‘I shall report all further details orally to my Führer.’ Exasperated at the ambassador’s obsession with applying conspiracy theories to British politics, Putlitz told Ustinov: ‘We are absolutely powerless in the face of this nonsense!’76

  In May 1937, when Neville Chamberlain succeeded Baldwin as prime minister, Ribbentrop was once again briefly optimistic. According to Putlitz: ‘He regarded Mr Chamberlain as pro-German and said he would be his own Foreign Minister. While he would not dismiss [the Foreign Secretary] Mr Eden he would deprive him of his influence at the Foreign Office. Mr Eden was regarded as an enemy of Germany.’ Chamberlain did indeed dominate the making of British foreign policy. Eden eventually resigned in February 1938, exasperated by the Prime Minister’s interference in diplomatic business, and was succeeded as foreign secretary by Lord Halifax. Chamberlain, however, initially proved less accommodating towards Germany than Ribbentrop had forecast. During the later months of 1937 Ribbentrop struck Putlitz as increasingly anti-British and anxious to leave London. Early in 1938 Putlitz reported that Hitler, probably prompted by Ribbentrop, had lifted an earlier moratorium on German espionage in Britain. (The moratorium had in fact been lifted in the previous year.)77 The only way to deal with the English, Ribbentrop maintained, was to give them ‘a kick in the behind’ (ein Tritt in den Hintern).78

  In February 1938 Hitler made Ribbentrop his foreign minister, a post he retained for the remainder of the Third Reich. Ustinov summed up Putlitz’s assessment as follows:

  The Army will in future be the obedient instrument of Nazi foreign policy. Under Ribbentrop this foreign policy will be an aggressive, forward policy. Its first aim – Austria – has been partly achieved . . . Austria falls to [Hitler] like a ripe fruit. After consolidating the position in Austria the next step will be against Czechoslovakia.

  Putlitz’s constant refrain during 1938 was that ‘. . . Britain was letting the trump cards fall out of her hands. If she had adopted, or even now adopted, a firm attitude and threatened war, Hitler would not succeed in this kind of bluff. The German army was not yet ready for a major war.’79 When the Wehrmacht crossed into Austria on 12 March, it left in its wake a trail of broken-down vehicles ill prepared even for an unopposed invasion. The probability is that it would also have proved ill prepared for a war over Czechoslovakia in the following autumn.

  In May 1938 Putlitz left London and was posted to the German embassy in The Hague. Since the Security Service had no authority to run agents abroad, he was transferred by mutual agreement to SIS. SIS agreed, however, that Putlitz had built up such a close relationship with Klop Ustinov that ‘there could be no question of substituting any other intermediary.’ During a visit to London by the SIS head of station in The Hague, Major Richard Stevens, Curry was instructed to introduce him to Ustinov. C
urry thought it likely that Stevens had been identified as an SIS officer by the German embassy in The Hague and that he might therefore be shadowed by SS security officers based in the London embassy. While going by taxi with Stevens to meet Ustinov at his London flat, Curry looked out of the rear window:

  As we drove off a man jumped into a taxi on the rank immediately behind us and followed us closely as far as the rear of St George’s Hospital. Here I instructed our driver to make two or three quick turns into side streets and was relieved to see that the taxi following us became entangled in the traffic at one of these corners. Although he appeared to make special efforts to disentangle himself he failed to do so.

  After a long detour, making further checks for surveillance en route, Curry and Stevens eventually reached Ustinov’s flat. Though Curry had no proof that their would-be pursuer was from the German embassy,80 his suspicions that the Germans had identified Stevens as the head of the SIS station at The Hague were well founded. It was later discovered that they had also identified both of Stevens’s two predecessors, Major H. E. Dalton and Major ‘Monty’ Chidson.81 SIS in The Hague had a troubled history. Dalton had committed suicide in 1936 after embezzling official funds.82 Abwehr penetration of the SIS station was to bring Putlitz’s career as a British informant to an abrupt end soon after the outbreak of war.83 Until then he continued to provide Klop Ustinov with important intelligence on German policy. Ustinov passed on Putlitz’s intelligence to MI5 as well as SIS.

  To maintain regular contact with Putlitz, Ustinov found a job as the European correspondent of an Indian newspaper with an office in The Hague. During the summer of 1938 Whitehall received a series of intelligence reports, some of them from Putlitz, warning that Hitler had decided to seize the German-speaking Czech Sudetenland by force.84 There were contradictory reports, however, on when Hitler planned to attack.85 Putlitz apart, Ustinov’s most important source from mid-August onwards was ‘Herr von S’.86 One evening, while he was studying at drama school, Peter Ustinov arrived home to find Klop in ‘an unusual state of agitation’, with an open cigar-box on the table and a bottle of champagne on ice. Peter was sent off to spend the evening in the cinema, passing on his way out a mysterious group of visitors who were still in the flat wreathed in cigar smoke when he returned. Years later, Klop revealed to Peter that the leader of the mysterious visitors had been the former German military attaché in London, General Baron Geyr von Schweppenburg (‘Herr von S’), who had told him: ‘We simply must convince the British to stand firm . . . If they give in to Hitler now, there will be no holding him.’87 Among the material handed over to Ustinov by Schweppenburg which the Security Service forwarded to the Foreign Office was a memorandum by Ribbentrop of 3 August, reporting that a decision to settle the Czechoslovak question in unserem Sinne (‘in accordance with our wishes’) would be taken before the autumn, and expressing confidence that Britain and France would not intervene. Even if war followed, Germany would be victorious.88