It was stated the other day, on Russian authority, that ex-Superintendent Melville, the famous detective, had joined the Czar’s secret police. The Russian police, it was declared, are to have the benefit of Mr Melville’s unequalled experience, and the alleged appointment was generally looked upon as the highest compliment that could be paid to a man of even his great reputation.
We learn that the report is unfounded. In a letter to the Daily Express Mr Melville says:
Permit me to state that I am still in London, quietly enjoying what, after thirty years of occasional excitement, I consider to be my well-earned retirement, and that now, like most people, I am content to follow revolutionary movements through the medium of my daily paper. Further, I may add that after an almost life-long and I hope honourable career in the public service, the assertion that I have entered the service of another Government, which service may at any moment bring me into conflict with my own country, is at once unfair and offensive.
Police Review, 19 March 19061
Mitzakis’ revenge could have inspired the original story. Had any Russian agent chosen to discover, by simple surveillance, what Melville was up to in ‘retirement’, suspicions would have been confirmed if they saw an active man still in his fifties regularly alighting from the Wandsworth Town train at Victoria and disappearing into a warren of offices down the street. We know of no leisure pursuits other than a supportive interest in the London Irish hurley team. The Melville family had grown up. The three surviving children were doing well; James, the youngest at twenty-one, would be called to the Bar in June. He and Kate at least (we are not sure about young William) would move, around 1908, with their father and stepmother to 24 Orlando Road, Clapham, a tall and pretty semi-detached house near the Old Town.2 Amelia Melville could console herself that her husband was no longer risking his life to protect the King. Otherwise he remained as much absorbed by work as ever.
In the early months of 1906 he discovered an entire cadre of German spies going about their business quite openly from a furnished house in Epping. It was near a pub kept by a local fellow called Spiegelhalter. Melville had responded to a letter to the War Office about a foreigner seen photographing a disused fort nearby. He found that the complement of men varied between seven and thirteen, and
They all had either cycles or motor-cycles and invariably carried cameras. They also carried field glasses. They had apparently plenty of money… They left home regularly every morning at 9 o’clock, irrespective of the weather, on their bicycles or motor-cycles and armed with cameras. All took different routes.3
None of the locals (with the probable exception of Mr Spiegelhalter, who wasn’t asked) knew where they went, since they’d never thought to enquire, but with Melville’s encouragement they got into conversation and found that these Germans were all ‘on holiday’. Each man was ‘on holiday’ for exactly three months and then went back to Germany ‘to join his regiment’. After a while they melted away to different parts of England, but not before Melville had despaired of trying to convince the local police that these men were engaged upon espionage. They were deaf to his warnings. ‘Argument was useless.’ As for the spies,
Their business, I should say, was to become thoroughly conversant with the routes from the sea coast to London, and thus to be able to guide a German army landed in this country. These Germans frequently, to the surprise of some Epping people, told the number of miles even to very remote places on the sea coast. They knew the geography of the country by heart.4
Later, in the years leading up to the War, popular novels would inspire widespread nervousness about invasion by Germany. But invasion was not the aim of German pre-war espionage. Nor was sabotage, at least not immediately. The German Government simply wanted facts about British naval defences, armaments and shipping. Armgaard Karl Graves, who was a wild fantasist, describes how he was trained to recognise other nations’ ships in silhouette, flag signals and uniforms, besides ‘topography, trigonometry, naval construction and drawing’:
A Secret Service agent sent out to investigate and report on the condition, situation, and armament of a fort like Verdun in France must be able to make correct estimates of distances, height, angles, conditions of the ground etc... he must be able to make quick and accurate calculations using trigonometry, as well as possessing skill as a draftsman.5
If German intelligence was not all it might have been, this was at least in part because few if any spies were trained as thoroughly as Graves claims he was, certainly before 1909. And no disaffected Englishmen were recruited. The spies warned off by Melville’s snooping in these years were either young soldiers on routine exercises unlikely to yield much of value, or immigrant or travelling Germans without technical knowledge who probably seemed more suspicious than they were. Steinhauer, who like Melville had shifted his professional attention to espionage and counter-espionage, wrote
A spy is a man – or woman – whose business it is to obtain information of naval, military or political value. Such people must naturally possess infinitely greater technical knowledge and daring than the ordinary Secret Service agent, the individuals whose work is confined to opening letters they have received from their employers, taking out the enclosures they contain – chiefly sealed letters – stamping them, and putting them into pillar-boxes to reach the spies for whom they were intended.
These agents were seldom used – at any rate by me – for anything else. Occasionally I might have utilized them to ascertain whether a certain person lived at some particular address, but that was about as far as I would trust them.
The work of the agents outside London, say those living in naval localities, was a trifle more difficult. Questions were put to them, mainly dealing with changes that had taken place in naval or military matters, but even then there was nothing especially secret about the whole business.6
Part of the trouble was money. Steinhauer never had a budget adequate for the purchase of principles or imagination or expertise. Yet if he got no results at all and the German Chief of Admiralty Intelligence happened to be replaced by somebody unsympathetic to ‘the anti-English party’, his work would falter to a complete halt. In his budgetary problems he was not alone.
Back in Victoria Street, Melville had cause to feel rather glum. A Liberal Government had taken over at the turn of the year and the new regime was scrutinising expenses. He had been right to assure himself of compensation in case of redundancy. Hely Claeys, his Brussels agent, was the first to find himself surplus to requirements. His story indicates how precarious, and risky, a spy’s job could be.
He was a man in middle age, Belgian by birth, a naturalised British subject, and had been reporting, through Melville, to Colonel Davies. Now he visited London and appealed to Colonel Charles A’Court Repington, ex-Military Attaché in Brussels and presently military correspondent of The Times, to save him from penury. In the six weeks since Intelligence dispensed with his services Claeys had struggled to support himself, his wife and teenage daughter on a meagre income from journalism. All he wanted, he said, was a small retainer and he would go anywhere and do anything, with or without his family. He spoke three languages and his wife eight, but in view of his career history it had proved impossible to find work. His wife and daughter did not even know he was anything but a journalist. He must go back to Belgium on Saturday; he needed an answer.
Repington was sympathetic and asked him to put something on paper that he could show to his superiors. That afternoon Claeys sat down at his boarding house near the British Museum and put his case in a letter. He had originally been hired – by Repington – in 1898, to assist with enquiries around the Fashoda incident. In those days Claeys was stationed at Cherbourg. Fashoda was a Nile port under Anglo-Egyptian rule which was seized by the French General Marchand. Kitchener was able to seize it back, but diplomatic relations between England and France were sour for a few months. Claeys provided good information at Cherbourg but was unfortunately over-zealous, as a result of which he was arrested, fined 1,000 francs and jailed for two years. Upon his release he was deployed at the Cape, and his family accompanied him there. (‘Sir E. Bradford saw after his being sent off to South Africa though I found the money’, noted Repington.)7 He was there from June 1901 until June 1904, around the time when the young ‘commercial traveller’ Henry Long was despatched to work in South Africa. Claeys had since been employed in Brussels by the Intelligence Division, reporting to ‘W. Morgan’ at 25 Victoria Street, until 2 February 1906. And here he was, with a prison record, cast upon the labour market in his fifties.
It is not economy cancelling my work on the continent in time of trouble. Double and treble is to be paid for bad work as an agent just arrived does not feel at home. Economy consists in paying not too much but a fair salary… I tried my best, as they told me to do, to get another situation. I did not succeed. If the Admiralty, the War Office or the Foreign Office cannot employ me now I beg to ask for a waiting salary of £10 a month with residence in Brussels as being the cheapest place to live in. If you cannot help me I do not know what will become of me. I am without means.8
Claeys was paid out of the ‘Secret Account’, funds that came from the Foreign Office, so Sir Charles Hardinge had to make the decision. The new masters were still figuring out exactly what the Secret Account was for. Hardinge asked Sanderson, his predecessor, for advice, and received the following:
He is, I believe, a good man for his particular business but whether he is worth retaining at a sinecure salary of £120 a year is another question. In any case I strongly advise you to have nothing whatever to do with him directly. I think that if you answer A’Court Repington at all, it would be prudent to tell him that you never have any dealings with agents of this kind. Perhaps you might add that that was also my rule.
There are some papers in the safe or in the press about the man of which I can point out the whereabouts next time I look in at the FO…9
Sir Charles took the advice about maintaining a lofty distance, and wrote to Repington in the manner suggested. Repington would have known exactly what was going on: no one in Government dared leave a trail of evidence that he had ever been in contact with espionage agents. In 1919 Repington admitted in his own published memoir to having been in the Secret Service at the time of Fashoda, but certainly not when he was in Brussels; heaven forbid he would have known such a person as Claeys there. He wrote primly
My view is that the Military Attaché is the guest of the country to which he is accredited, and must only see and learn that which is permissible for a guest to investigate. Certainly he must keep his eyes and ears open and miss nothing, but Secret Service is not his business, and he should always refuse to take a hand in it.10
Repington was being economical with the truth. He probably knew Claeys in a Secret Service capacity in Brussels. They worked for the same War Office and he seems to have felt to some extent responsible for him.
Undoubtedly, as Steinhauer sagely remarked, ‘A discarded spy – like a discarded mistress – is dangerous for any man’.11 There was a happy ending for Mr Cleays. Sir Charles’s assistant dropped a line to Major G.K. Cockerill, who worked safely below the parapet at the War Office, forwarding the correspondence ‘in case you should think it desirable to do anything about it’.
Gun-running had been a preoccupation from the start. During the Knox D’Arcy enquiry, Melville had known about the smuggling of arms into Persia, which was of particular concern. He also kept an eye on guns entering ports mainly in Africa and South America. In his memoir he names Rudolph de Paula and Carling and Co., both based in the City of London, as arms dealers he investigated. ‘Colonel Davies’s Separate Account’, the secret Foreign Office fund from which Melville and Long were paid, provided one-off sums to diplomats and agents in ports all over the world to facilitate enquiries about this kind of thing. Davies’ accounts for the spring of 1906 include receipts from Cairo:
I, Mansfeldt de Cardonnel Findlay, acknowledge to have received from Sir Edward Grey, Baronet, His Majesty’s Principal Secretary of State for Foreign Affairs, the sum of twenty-five pounds (£25) for the purposes of His Majesty’s Foreign Secret Service, and I do hereby solemnly declare that the said sum has been disbursed faithfully and according to my best judgment for those purposes...
while from Malta, payable to the agent in Genoa of the Navigaziione Generale d’Italia, came:
For one first class passage to Benghazi and return, via Canea (25% reduction), £9 14s 1d
and Señor don Arturo Peel, Chargé d’Affaires in Montevideo, submitted quite a little pile of receipts in February and March. They included a large one listing ‘Champagne, Vino, Whisky, Licor’ and another from the
Confitería y Café Jockey-Club
CASA ESPECIAL
Para el Servicio de Banquetes, Soirées y Lunch
Arthur Peel seems to have refurbished the Legation with new carpets and sofas and potted palms and held quite a few banquêtes and soirées at Secret Service expense but no doubt it was all to some long-forgotten purpose. The bills are filed with Davies’s accounts. In a tight, neat, little hand are monthly listings such as ‘Major Thwaites (journey to Brussels: £6 9s 1d)’ and ‘Pay of agents at Overburg, Baku, Petrovsk and Kimel for January, £156’ and ‘Capt. B-S for HDL (paid into Parr’s Bank) £150’. Henry Dale Long was still in Africa, about to leave. ‘Kimel’ was Samara. B – Byzewski, an Austrian, the third permanent agent besides HDL and M – transferred funds to agents in the Central Asian cities from his base in Berlin. RBT (Richard Tinsley, who later became a permanent agent in Rotterdam) received £19 4s 0d for ‘plans of Dutch forts’.
The Secret Service account also paid for repatriation of ‘unprotected British subjects’ such as, in 1906, ‘Miss Ashe and Miss Stegwell’ (‘on the recommendation of the Chaplain’), and ‘the Freed family’. What with the potted plants and the unprotected spinsters vying for funds with Byzewski, Long and Melville, full-time operatives who produced useful intelligence, it was rather a catch-all arrangement. But there was no other way of accounting for these mostly ad-hoc items which were better kept out of the public eye. In November of 1906 Major Cockerill wrote to Sir Charles Hardinge at the Foreign Office:
I have lately been enquiring into every item of Secret Service expenditure with a view to possible reductions. We do not think it is any longer necessary to keep an agent at Samara, and I have accordingly arranged that he shall not be retained after the 1st January next. This will effect a saving of £380 a year commencing from that date. I have searched in vain for any further means of reducing expenditure. All our other expenses seem not only justified but indispensably necessary.12
Among the justified and indispensably necessary items, Melville notes:
During the early part of 1906 I succeeded in obtaining in London particulars of the system prevailing in Germany re mobilisation of the army in peace or war. Also the various punishments meted out to deserters in peace and war; the conditions under which reservists are allowed to leave Germany and their action in foreign countries; and how they keep in touch with their authorities. Also the same information re members of the Landwehr.13
The War Office needed to know this but there was no point in hoping the War Office could pay for it; it was all too awkward to be absorbed by a department whose expenditure often came under close parliamentary scrutiny. The Foreign Office had been paying since 1886, and must continue to do so. By 1908 Mr Byzewski had his contact in Samara back on the books.
In 1905, letters from a ‘C. Werner’, a Hamburg import-export agent, began to fall into Melville’s hands. All referred to the importation of arms to South Africa.
These letters were marvellously well written and were masterpieces of detail and perfectly logical. Names and addresses were given in Hamburg and South Africa.14
Yet something wasn’t right; despite shipping details, even markings on the packing cases, being mentioned in the letters, these boxes never appeared on any ship’s manifest. So in June of 1906, with the letters still coming and the Foreign Office scrutinising every penny, Melville accepted his £50 expenses and set off for Hamburg to get to the bottom of it. In this he was assisted by Gottlieb Goerner, Long’s old contact in Hamburg, who became a friend. Goerner was an interesting character known to the German authorities. He told Melville that the German Colonial Minister had approached him in 1904 to run a fake import-export business in Fernando Po, a Portuguese colonial possession in the Atlantic, with the ultimate aim of starting a diplomatic incident which would result in a German seizure of the island. He objected reasonably enough that, were he to be shot, the Berlin Government did not guarantee to look after his family. He refused to go, and the whole plot came out in the Reichsrat, causing quite a stink at the time.
Goerner probably gave Melville all sorts of useful information, for, according to Michael Smith in The Spying Game,
Melville proved his resourcefulness by blackmailing the city’s Chief of Police into helping him find the mysterious ‘Herr Werner’ who, along with a known gun-runner called Otto Busch, was allegedly behind the conspiracy. Melville investigated a number of different Werners, conning them into providing specimens of their handwriting which he then compared with intercepted letters from Herr Werner. The main suspect turned out to be ‘not a man as originally assumed, but a woman with whom Busch is believed to have had immoral relations’.15
Goerner had known (and sued) Busch in South Africa, but could shed no light on the letters. Once again Melville drew a blank. To sum up, the Hamburg addresses existed but, except for Busch, the people and businesses didn’t. Maybe, since these were German steamers allegedly used for transport, the guns destined for South Africa were being smuggled ashore somewhere along the West African coast and forwarded overland to the Transvaal? Sometimes the letters gave details of Werner’s own travels, yet when the passenger list was checked, Werner wasn’t there.
Inevitably, the plug was pulled. There would be no more money. Mr Haldane, now at the War Office, thought this chase after Werner was all a waste of time.
Melville passed the letters up the line to Haldane, who read them and revised his opinion. Suddenly it was all on again. One of the letters provided intelligence of an important Boer conference, to be held at a given time and place in Carlsbad.
It didn’t happen.
By now this farrago had been going on for over two years. Melville was on holiday at Ramsgate in October 1907 when the London office informed him by letter that Werner was due to call at Dover the following morning aboard the SS Eliza Woerman, en route for Hamburg. Durban officials had instructed a passenger on board called J.W. Brown to point out Werner to Melville.
This was exciting news, but how would Melville recognise J.W. Brown?
I was on Dover Pier the following morning in good time. All was ready for the arrival of the Eliza Woerman, the buffet was open, and the pier men at their posts. Suddenly I noticed a man on the pier evidently saturated with alcohol. He had three or four lots of whisky in the buffet. He then sat down on the pier and took off his boots and socks. I went to him and said ‘Going to have a swim?’ He replied ‘No, I’m just warming my feet to the sun. They’re as cold as ice.’ I said ‘Excuse me, but is not your name Brennan?’ To which he replied ‘No sir, my name is George Brown, and I’ve come here to meet my brother, J.W. Brown, who is arriving by this ship from Durban.’ I said ‘I know him too!’ He said ‘Then you must be one of his wife’s people.’ I said ‘Yes.’16
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, professional 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.