James Melville was a surprising young man. He was an impressive barrister, well liked, and interesting work came his way.
Like his father, he was proud of his Irish background. Unlike his father, he had an ambivalent relationship with the Establishment. This extended beyond his professional life. It was true that Sarah Tugander, the girl he was seeing, was private secretary to the next leader of the Conservative party, but she was neither Irish nor Conservative; she was the daughter of Russian Jewish immigrants and both she and James Melville were, of all things, Fabian socialists. Twenty-five years before, his father would have been lurking outside their homes making notes in a little black book.
James was beginning to find work through his left-wing contacts, and he was part of the legal team that defended two refugees accused after the Houndsditch Murders. The murders, in December 1910, had been followed by a pursuit that ended in the Siege of Sidney Street. This notorious siege, despite its political overtones and the newsworthy presence of Winston Churchill at the showdown, appears to have been a City Police and Special Branch affair in which the infant SSB played a comparatively minor role. Years later, MI5 wished it had paid more attention.1
Special Branch was still headed by Melville’s old colleague Superintendent Patrick Quinn. The public believed it to be Britain’s only, and rock solid, line of defence from insurgents of all kinds, be they German spies or striking miners. Kell and his superiors liked it that way; they wanted SSB to remain unknown. After all, there was not much use in a Secret Service that wasn’t. So Special Branch handled arrests, court appearances, and state ments to the press in cases that SSB had in fact investigated and brought to the point where charges could be preferred.
Special Branch retained a separate internal political role of its own. It kept an eye on suffragettes, Indian nationalists and trade-union agitators and watched the few remaining ‘anarchists’, although these last were now more likely to be anarcho- syndicalists, breakaways from socialist or communist groups, disapproved of by the majority but nonetheless dedicated to empowering the working class by force if necessary.
The Siege of Sidney Street originated in an ordinary police investigation, when, as Harold Brust, a former Special Branch officer, gasped:
…a strange concatenation of circumstances spewed to the surface the dregs of London’s Underworld, when police and soldiers armed with rifles battled with infuriated alien gunmen, when Mr Winston Churchill, as Home Secretary rushed to the scene of the fight to direct in person the operations of the Scots Guards and artillery.2
The facts were these: on 16 December 1910, at a jeweller’s shop in Exchange Buildings, Houndsditch, which had been closed for the night, some robbers were disturbed. They ran away and holed up in a house close to the scene of the crime. The police surrounded the house; there was a shoot-out; the men fired, killing two police constables and accidentally wounding one of their own party, who later died.3
In the ensuing confusion several suspects escaped. A man-hunt was mounted to find anyone who had been in the Houndsditch house and survived. Witnesses reported having seen a man carried, wounded, through the alleyways of the quarter. Girlfriends were questioned. Two men in their early twenties, Yourka Dubov and Jacob Peters, were among those taken into custody. Special Branch files showed that both were political refugees from Latvia (then under Russian rule). Dubov was a member of the Lettish Social Democratic Party who had come to England less than a year ago; Jacob Peters was a fellow member, as well as belonging to the British Social Democratic Federation and the Working Men’s Federated Union.4 They remained in custody over Christmas and the New Year.
That these young men might be politically involved refugees was nothing new: crime was a favourite way of raising money for the desperate underground back home in Russia and the occupied lands of the Baltic. The local (H Division) Metropolitan Police did not necessarily take the political angle seriously. In 1931 one of them, Frederick Porter Wensley, reminisced:
Nothing… that I learned during or after the investigation has ever led me to think that there was any political significance about the affair. The Houndsditch plot was hatched and carried out by a bunch of foreign thieves who happened to find the so-called Anarchist Club in Jubilee Street – which was simply a meeting-place for foreigners, some of whom, no doubt, held revolutionary opinions – a convenient rendezvous.5
He was right in a way; yet there was a political background to the affair and documents found at the Houndsditch hide-out, and retained for many years in the files of the City police, confirm this. ‘Most of the documents found consisted of letters, accounts, or in the case of Gardstein, recipes for manufacturing explosive’. 6 Houndsditch was still occupied mostly by immigrants from eastern Europe, swelled after 1905 by Russians fleeing from retribution after the attempted revolution. Lenin’s Bolsheviks, desperate for funds, had proclaimed a readiness to seize funds from ‘the enemy, the autocracy’. This was discussed at the 1906 Stockholm Congress. One result was a drift towards violent anarchy on the part of a renegade group from the Lettish Social Democratic Party in London.
Following the rise to power of the Bolsheviks in 1917, MI5 (as MO5 had subsequently been renamed) opened reconstituted files on Sidney Street and Jacob Peters. In the files is a letter from a man who was part of the Whitechapel émigré community at the time; by 1932 he was interested in being naturalised and was perfectly happy to help MI5 in any way he could. Having enumerated eight separate groups of Russians, Poles, Jews and Letts, he goes on:
Besides these fractions there were several groups of anarchists with their headquarters in Jubilee Street, London E.
Although discussions about general political changes in Russia between these various groups took place daily, the fractions worked more or less separately, especially the anarchists who worked in groups of three or four persons, but as their tendency was leaning towards expropriation of other people’s property, they did not get any sympathy from the Social Democrats and Revolutionaries and generally speaking they were looked upon as social outcasts and expropriators.7
The little group that included the robbers was only about a dozen strong. The police were hunting especially for an anarchist (as distinct from a Social Democrat) known as Piatkov, or Peter the Painter.
On 3 January 1911, some other members wanted for questioning about the Houndsditch affair were traced to nearby 100 Sidney Street. The police surrounded the house but the occupants held their ground. The Home Secretary Winston Churchill arrived; so did journalists, photographers and troops. The house was fired upon by the overwhelmingly superior body of soldiers and set alight. Cruelly the observers allowed it to burn to the ground. Two charred bodies were found. One dead man was Fritz Svaars. He was a cousin of Jacob Peters, the man in custody. The other was Jacob Vogel, also known as Sokolov. Of Peter the Painter there was no sign.8
When the case against Peters, Dubov and the others opened at the Guildhall on 23 January, the Prosecutor asserted that Gardstein, the man who had been injured and later died, had been responsible for the death of the first policeman on 16 December. But at committal in March and at the Old Bailey in May, Peters and Dubov were charged with murder. A witness appeared who swore to having seen them, before the Houndsditch shoot-out, with pistols.
Neither their association with socialist political views, nor their foreign-ness, would play well with an English jury: they were on trial for their lives. Peters claimed that he was an ordinary, hard-working man, not an armed robber at all, who had been mistaken for his notorious revolutionary cousin. Indeed Svaars, Peters’ dead cousin, had borne such a strong resemblance to him that the case rested on unsatisfactory evidence. Melville was eloquent in pointing out, also, that both Peters and Dubov had assisted the police since their arrest.9 They were acquitted. Peters, ironically echoing the gifts of the Tsar to William Melville, in his gratitude gave his young barrister an inscribed cigarette case. 10
James Melville made news again in March of 1912, when he defended some printers and a writer from The Syndicalist against charges of incitement to mutiny. They were remanded on bail and their sureties (who were in court) included George Lansbury, Will Thorne and Josiah Wedgwood. The accused men had published an article purporting to represent a call from working men to servicemen. It began:
Boys! Don’t do it! Act the man! Act the brother! Act the human being! Property can be replaced! Human life never!
The prosecution was led by the chief Treasury Solicitor, Mr (later Sir) Archibald Bodkin. Bodkin would appear for the Government at every pre-war spy trial; his brief would come directly from Kell and would include detective work by Melville. The Okhrana had a comprehensive file on the Sidney Street affair that included material supplied by and to Melville, and gives the strong impression that he knew a great deal more about the case than came out at the time. Among the surveillance reports are several on Piotr Piatkov, the gang leader known to posterity as ‘Peter the Painter’. These include reports from Riga, Irkutsk and Mitava (1910) and from London and Paris (1911).
MO5 was concerned, not just with spies, but with subversion by ‘the enemy within’. Melville had always been good at snooping on outfits like The Syndicalist and following up suspicions about where their money was coming from, and Kell was ever-vigilant in case dissidents were being funded from abroad. The Government was particularly suspicious of pacifist and trade-union organisations from about 1910 onwards. Late that year a series of strikes, persisting through the summer of 1911, led to civil disorder and a few rioters were killed by troops in Liverpool and North Wales.11 Syndicalist unionism, should it get mass support, would make a dangerous alternative power-base. In case of war the dockers, transport workers and miners acting in unison could paralyse the country. And such a syndicate of unions could ultimately make common cause with the working classes abroad. Workers of the world would unite. This would undermine nationalism, imperialism and everything the Government stood for.
So in August 1910, when Mr and Mrs William Melville took their holiday at Ilfracombe, it was probably not coincidental that their fellow guests at the hotel included Mr & Mrs Will Crook, the Labour MP for Woolwich and his wife. Woolwich, with its arsenal and docks, was key to the new arms race and would be crucially important in wartime. Melville would have found it useful to hear Crook’s opinion of the state of labour relations.12
Two years later James Melville would defend The Syndicalist. He was unsuccessful; the syndicalists got six months’ hard labour.13
1911 was the turning point: after Agadir, well-informed men no longer said ‘if ’ war comes, but ‘when’. Churchill, as Home Secretary in 1910 and 1911, was avoiding delay and serenely disregarding the protection of civil liberties by signing ‘general warrants’ – warrants to examine the correspondence of listed individuals.14 The list was updated from Kell’s alien return forms whenever anything suspicious was reported.
Steinhauer, in the English version of his autobiography, insists that he quickly discovered that mail to and from the Caledonian Road and Walthamstow addresses was being opened because a postman told Ernst it was.15 His strategy after that was to send misleading information through the post. This does not fit the facts. Although most of his network remained in place and under surveillance, some spies were informed upon, arrested and charged before the war and incriminating letters to and from Steinhauer came up more than once in evidence. He does not appear to have understood the extent to which his communications must be penetrated. If he did, he would surely have dropped the whole set-up and started again.
The first man to be tried under the new Official Secrets Act of 1911 was Heinrich Grosse, masquerading as merchant marine Captain Hugh Grant. He was an ex-convict who had been given a ten-year sentence in Singapore in 1898 for forging banknotes. Steinhauer, as Richard H. Peterssen, had hired him in Brussels.
Grosse had persuaded Steinhauer into giving him the job, but that was a minor hurdle; when he got to Portsmouth, he had no idea how to obtain the information that was wanted. In desperation, he decided to pay for it. He saw an advertisement placed in a local paper by ‘William Salter, Inquiry Agent’, and invited the man to visit him at his lodgings. When he arrived Grosse introduced himself as the Captain of a merchant ship who needed information about how much coal was in the dockyard at Southsea. As there was a strike in the offing, he explained that he was hoping to find a market in England for German coal.
As the case officer was pretending to be someone he wasn’t, and so was the spy, it was only fitting that the inquiry agent should be a fraud too. William Salter was in fact a retired Chief Petty Officer trying his hand at detective work for the first time (and as it turned out, the last). When Grosse next asked him to find out how many men were stationed at the Royal Naval Barracks at Portsmouth, he became suspicious and told the police. They referred him to the Admiral-Superintendent of Portsmouth Dockyard, who told the Admiralty. SSB was approached; the Bureau provided information so that Salter could string his client along. As in the case of Schultz, duff information was provided and coded letters to ‘Peterssen’ in Hamburg intercepted.
By November of 1911 Melville had been snooping in the district. When the case came up at Winchester Assizes there was evidence from local people about stories Grosse had told them. To one he had said he was in Portsmouth on a fishing trip, to another that he was writing a book, to another that he needed information about the Navy to settle a bet, and so on; these variant accounts did not inspire confidence. Grosse was arrested and appeared at Winchester Assizes in February.
Grosse stepped briskly into the dock. He was smartly dressed in a dark suit and a black overcoat with velvet collar. His strong-looking face was quite stolid at first, but as the charges were read out an expression of anxiety overcast his features.16
As well it might. The charges included conspiracy (with Peterssen) which carried a seven-year sentence. He maintained his plea of not guilty at Winchester Assizes, but was sent to jail for three years.17
At about the same time an even odder character was jailed. This was Dr Armgaard Karl Graves, the self-mythologising ‘doctor’ (‘he was never a spy of mine’, growled Steinhauer.)18 He later claimed he had been a spy since the old days in Port Arthur, when his masters in Berlin had barked that
You must abstain from intoxicating liquors. You are not permitted to have any women associates. You will be known to us by a number. You will sign all your reports by that number…
That was before he got there and found himself ankle-deep in wine and surrounded by slappers from four continents (see Chapter 8).
Most newspaper reports of the 1912 Graves case have been destroyed, so we are mainly reliant on his own account which was published in New York in 1914. It deals with his entire career and is written in a somewhat narrow-eyed style, typically
Slowly inhaling the smoke of my excellent Mejideh, I fell into a sort of contemplative reverie while waiting for the Prince…19
His ‘mission’ on this occasion was particularly dangerous, for the new Official Secrets Act was ‘so elastic and convenient for convictions that a judge could charge a jury to find a man guilty on suspicion only’. 20 He was risking seven years’ penal servitude – in England, ‘plain hell’. However, duty called from Berlin, so he set off to Edinburgh posing as an Australian doctor engaged in postgraduate work at the University. He was looking for information about Scapa Flow, and claims to have struck up an acquaintance with a keeper of the Forth Bridge and through him the ‘waterguard’ (coastguard?) who knew the Firth of Forth well. He filed his intelligence but he had already aroused suspicion: the landlady let searchers into his room, and he was followed. He confronted the local police chief who knew nothing about any searchers. But he moved to Glasgow to be on the safe side.
In Glasgow he paid for, and claims that he obtained, plans of naval guns then being manufactured by Beardmore & Co. But it was all wasted effort; his support staff let him down. He was using fake Burroughs & Wellcome envelopes and according to him, the people at the mail-drop misdirected his reports to the real company, who called the cops. His account of his arrest by four burly, plain-clothes men is quite gripping; one is impressed that he was ready to inject himself with deadly poison, obviously, but the circumstances were inappropriate. And the police did not behave like gentlemen.
The Inspector seemed to me to subsequently try and get a lot of publicity out of my arrest as if he himself had detected the whole concern, instead of having it thrust under his nose by the London chemical company.
He was sentenced to eighteen months, spent some time incarcerated in Bairlinnie, and was released when the British realised what they were missing.
In the fifth week of my imprisonment I was taken to the office of the Governor of the prison. As I entered I saw a slight, soldierly looking English gentleman of the cavalry type – (a cavalry officer has certain mannerisms that invariably give him away to one who knows).
They were left alone by a deferential Governor, and ‘Robinson’ began to make casual conversation.
‘Is the confinement irksome to you?’
‘Naturally.’ I looked him straight in the face. ‘I am a philosopher. Kismet, Captain.’
‘Oh – ho’, he exclaimed. ‘You address me as Captain. Wherefore this knowledge? We have never met.’
‘No’, I replied. ‘But I have associated too long with various types of army officer not to be able to detect a British cavalry officer. Formerly of an Hussar regiment, I take it?’ [Kell was in the South Staffordshire Regiment]
He laughed for some time…
How could Graves stay inside after this? It would be like keeping Sherlock Holmes banged up. They immediately reached a gentlemen’s agreement and Graves changed sides. The following day the Lieutenant-Governor escorted his distinguished prisoner by train to London and handed him over to ‘Captain Robinson’. Graves stayed overnight at the Russell Hotel before keeping a luncheon appointment with Robinson at Morley’s Hotel in Trafalgar Square.
There another gentleman joined us – a Mr Morgan, whom I easily judged and afterwards knew to be of the English Secret Service. Presently Morgan told me that I was to drive with Captain Robinson to Downing Street that afternoon.
‘One of our ministers wishes to see you’, he explained.
There follows a highly unlikely interview with Sir Edward Grey.
It is all preposterous. Graves got out of jail early, as all model prisoners may, and did, as he says, go to America. Whether or not anyone, either German or English, thought of employing him on a ‘mission’ there is doubtful. According to Steinhauer, ‘most of the letters and telegrams he sent from Glasgow contained nothing but requests for money, which is always the way with these swindlers’.21 And an SSB ‘List of persons to be arrested in case of war’ drawn up in July 191422 contains his name, marked ‘in America’.23 But by 1914 he, at least, knew or had been told about Mr Morgan.
In the summer of 1912 Melville was on the trail of a Royal Navy gunner who would later be charged with ‘communicating information prejudicial to the safety or interests of the state… useful to an enemy’. Warrant Officer George Charles Parrott, aged forty-five, was in charge of the rifle range at the Naval Gunnery School at Chatham, where he lived with his wife in a private house at Alexandra Road, and was officially stationed on HMS Pembroke further along the coast at Sheerness. According to his commanding officer, he was ‘an exceptionally smart man’.24 Some time before, he had become friendly with a language teacher called Hentschel from Sheerness. Parrott, ace marksman, boasted also what was then called ‘a keen eye for the ladies’. He began an affair with Mrs Hentschel, an Englishwoman née Riley. Later his defence was that Hentschel had told his wife to seduce him so that he could blackmail Parrott into spying.25 If this was true, Parrott risked jail and dismissal from the service after twenty-seven years rather than have Mrs Parrott discover his infidelity. It seems unlikely. Whatever his motive, he agreed to provide Hentschel with information, and did so from 1910 onwards.26
Eventually the two spies fell out over money. Parrott claimed that he was being cheated. Maybe Mr Parrott’s ardour for Mrs Hentschel was cooling too. Anyway, he began freelancing direct to Germany, and Hentschel, annoyed, communicated anonymously with the British Admiralty.
In July of 1912 Parrott obtained leave to visit Devonport. A Warrant Officer was not allowed to leave the country without permission, which he made no attempt to obtain. He set off from Sheerness Dockyard, accompanied by a lady, on the train to Sittingbourne, where she disembarked. He carried on to Dover. At Dover he was stopped as he tried to board the Ostend boat. At first he claimed to be a civilian. Then, confessing his identity, he explained that he had to meet a lady at Ostend at 8.00 p.m.
The person he was really going to meet was either Steinhauer, or another officer of the German Secret Service; it was all prearranged by an intercepted telegram from ‘Seymour’ (Parrott) to Richard Dinger in Berlin. Steinhauer used that name, and on the matter of the actual trip to Ostend the German Meisterspion may be less than trustworthy as his account of Parrott’s trip to Ostend is pretty much identical to the one Melville gave in court. However, Steinhauer claims to have been in Dover, shadowing Parrott to the continent in case he was really a double agent:
Shortly afterwards the detective let him go aboard the steamer. Parrott did not notice what I had already seen – something that told me his fate was sealed. I had been hanging around – easy enough with a big crowd of people such as travel by the Ostend boat in summer-time – when I noticed, behind a pillar in the waiting room, a quiet, keen-eyed man who followed Parrott with his eyes and missed nothing.
Scarcely had Parrott gone up the ship’s gangway than the detective went to the man behind the pillar and greeted him unob trusively. The pair of them followed Parrott aboard and then, as I caught a good sight of the second man, I nearly fell backwards with fright. In spite of his excellent disguise, of which he was a master, who should I recognise but my former friend, the famous Superintendent Melville of Scotland Yard!
…I should have liked to warn him but it was utterly impossible. I knew too well that any attempt on my part would only make it worse, for the moment Melville caught sight of me any uncertainty they may have harboured about Parrott’s guilt would have vanished instanter.
Steinhauer followed Melville and the detective, and Parrott, onto the boat. Months later at Parrott’s trial, we find a retired, but unusually vigilant, former policeman appearing as a witness.
Mr William Melville, of Clapham, formerly a Superintendent of the Metropolitan Police, said that he was at Dover on July 13th, and saw the defendant go on board the boat. The witness also went, reaching Ostend about 8.30. On leaving the boat and passing through the railway station the defendant was joined by a man. There was no mutual recognition or handshaking; the stranger, evidently a foreigner, sidled up to the defendant. The foreigner was about 35 years of age. The witness thought that he was a German. They walked off together and went through various back streets into the fishing quarter of the town, finally coming out on the promenade. As they walked the foreigner looked round several times. They sat down on two chairs in a remote place where no one was about. At 9.25 several persons came along, and the defendant and the foreigner got up and moved about 50 yards to another retired position. They remained chatting until 10.15 when the other man got up and hurriedly walked away. The defendant remained sitting for a few minutes longer, and then he got up and walked away too. The witness followed him through various streets to the Place d’Armes, in the centre of the town, where the defendant entered a cigar shop and bought a box of cigars. There he entered a café, afterwards going towards the Dover boat, which he reached about 11 o’clock. The witness saw him on board but did not travel by the same boat.27
It is the only post-Special Branch court appearance that we know of by Melville, and it could well be that he had seen Steinhauer on that boat and knew that Steinhauer had seen him. If so, his appearance was a signal, almost a challenge to his German opposite number.
Quite soon after the trip to Ostend, Warrant Officer Parrott was sacked on Admiralty orders following an official inquiry. He and his wife moved to Battersea, to Juer Street off Parkgate Road near the Albert Bridge, and he began to send and receive mail through a newsagent’s shop across the river in Chelsea. He made regular trips to Germany.28 In October or November he visited Hamburg. In November, the lodgings in Battersea were raided. Bank books were found; as a Warrant Officer he would have been paid around £20 a month, but there were records of mysterious deposits to his account as well as proof of the trip to Germany, and thirty-five guineas in cash in a writing desk. The formidable Mrs P had a word with the searchers and the guineas stayed put.29
Parrott, in the dock, underestimated the strength of the case against himself. He came up with cock-and-bull stories about who the man at Ostend was (someone apologising for the nonappearance of his date, a lady picked up at the Palace Theatre) and about questions he had promised to answer concerning the Firth of Forth (for a newspaper article). Earlier he had told the police that he met no one in Ostend, but he had been ‘protecting the identity of a lady’. The more excuses he made, the deeper the hole he dug himself into. The jury took only half an hour to find him guilty. Fortunately for him, the unlikely story of the seductive Mrs Hentschel had seized the imagination of Mr Justice Darling, who said ‘You abused the trust which was placed in you… Of any one in the service of the Crown it is impossible to imagine a graver offence than that…’ and then sentenced him to four years, rather than the possible seven, of penal servitude because ‘I think you were probably entrapped’.30
There was a sequel. Hentschel went to Australia and in Steinhauer’s account ‘for some time money was sent to him to keep him quiet’. Hentschel’s contact in Berlin was Colonel Torner – Steinhauer himself. For several months German Secret Service funds leaked unproductively to Hentschel’s antipodean hideaway; but one day in June 1913, an item appeared in a London paper stating that Colonel Torner, of the German General Staff, had been lost overboard in mid-Atlantic. Hentschel received a cutting in the mail. He wrote a threatening letter from Sydney to Berlin, to the effect that he was not born yesterday. His wife had had diphtheria; the medical bills were huge. He wanted either a stream of remittances, or ‘re-engagement under a different name, but the same salary’. If he didn’t get either, he would go to the English newspapers or the English security services. And then ‘Germany will have a startling row’.
It was not the most diplomatic way to approach an employer. His letter was ignored. In October 1913 Hentschel turned up at Chatham Police Station and surrendered himself as a spy. He wanted to be arrested, he said. They told him to push off. So he went to London and walked into the police station in Old Jewry where somebody took him seriously and he obtained an audience with concerned authority, probably Cumming and/or Kell. In exchange for money he was able, according to Steinhauer, to tell them all about ‘his activities with Parrott from 1910 onwards’. He must have told them everything he knew, because when he appeared in court the prosecution – led, once more, by Archibald Bodkin – declined to pursue the case. Karl Hentschel and his wife, under her maiden name of Riley, remained on the list of persons to be jailed in case of war. At the outbreak of hostilities his address was listed as unknown and she was removed from the ‘jail’ list and marked ‘search’. Hentschel, at least, had left to start a new life elsewhere.
By the end of 1912 Special Branch (which retained the power of arrest that MI5 officers did not have), Cumming, Kell and Melville were established in separate offices within half a mile of each other, strung along the north bank of a bend in the River Thames. Special Branch was of course at Scotland Yard, on the southern end of Whitehall close to the Houses of Parliament. Cumming was based a few hundred yards further north, high in a Victorian Gothic warren of offices called Whitehall Court that overlooked the river, from which he ran SIS – Secret Intelligence Service – agents overseas. Beyond Whitehall Court, past Charing Cross, the Thames swings east and in the 1920s the old Adelphi building, with its vaults and passages, ranged along the riverbank. In September 1912 Kell moved a few hundred yards west of Temple to the third floor of Watergate House, York Buildings, Adelphi. MI5 mail was forwarded from ‘Kelly’s Letter Bureau, 54 Shaftesbury Avenue’ (Kelly was a name he often used.) By the summer of 1913 he was a major with three captains working under him: Drake, Holt-Wilson and Lawrence. Drake was the one Melville would have most to do with. The other two gathered, filed and sorted information, but Drake was involved with action on known agents and counter-agents.
The German Secret Service officers, compared with the British, had a fatal flaw: arrogance. The glass ceiling of class was present in the SSB too, but Melville was respected. When, in 1909, an extra layer of management was introduced and his involvement with agents overseas diminished, MacDonogh took pains to include him in the new MI5 set-up; he knew the value of his broad experience and took his opinions seriously, and so did Kell. Melville was allowed to run his own show31 in Temple Chambers, later with the help of Regan and, from 1913 onwards, another ex-policeman called Fitzgerald.
Steinhauer, on the other hand, bemoaned more than once the stupidity of his superiors in Berlin. The notorious strutting conceit of the Prussian military and naval top brass, personified in Kaiser Bill, seems really to have existed. Why else would German intelligence have refused to listen to the common-sense view of an experienced policeman like Steinhauer? They were completely taken in by Wilhelm Klauer: a puny, unqualified, Portsmouth tooth-puller who lived off the earnings of his wife, a prostitute. He offered to spy for Germany. Steinhauer, having looked into the man’s background and mode of life, advised against having anything to do with him, but Berlin went over his head and started sending him money. When Klauer (in England he was known as Clare) was asked for the results of the latest British torpedo trials, he asked his German hairdresser friend Levi Rosenthal to help. Rosenthal nodded wisely, appeared to go along with the plan, and told a friend of his – a town councillor – that he had been approached.
Not only had Rosenthal a sharp eye for a dangerous situation, but he was unable to read and write; Klauer could not have picked a more unsuitable partner in crime. Acting on instructions, Rosenthal strung him along; Klauer was watched by Melville & Co. and led into a trap. He got five years’ hard labour.
Steinhauer, by his own account, had no idea that Klauer had ever been hired, or arrested, or jailed; so when he went to Portsmouth to check up on him out of curiosity in June 1913, three months after the trial and the publicity, he almost got arrested.32
Klauer was otherwise insignificant, but MI5’s next major case was the most important spy the British had yet brought to justice. In Steinhauer’s view Frederick Adolphus Gould ‘was able for something like eleven years to forward to Germany more information on naval matters than all our other spies put together’. He was a tall, powerfully-built man who had spent twelve years in the German navy, and his real name was Schroeder. But he spoke English like a native, for his mother was English. According to Steinhauer, Gould had worked for the German Secret Service in the 1890s and stopped, and had then been reintroduced to them by an Englishman of dubious motive called Stevens. Stevens worked for France and Russia and around 1902 obtained some British naval information which he induced Gould to offer to Germany. Steinhauer claims that he frightened Stevens into the background by tricking him into thinking that Melville and Special Branch were onto him, waited a while and then turned his own attention to Gould. It was Gould who had been showing Steinhauer around Chatham Dockyard in 1902 on the occasion when Le Queux spotted the German policeman.
Walking boldly into the enemy’s lair, so to speak, was typical of Gould. He was just a little too reckless. But his material was reliable and informative, and in 1908 he persuaded the German Secret Service to set him up as landlord of a pub at Chatham. This was the Queen Charlotte, from which he passed on tidbits of gossip from the naval ratings who were his customers until the end of 1913.
According to Steinhauer, Schroeder worked with Stevens all along, and his decision to leave the Queen Charlotte came when their partnership was dissolved. Stevens’s involvement begs questions, but at any rate Gould’s recklessness now proved his downfall, because the pub’s incoming tenant found incriminating documents in the attic and informed the authorities. The papers included maps and a letter to ‘Dear St’ (Steinhauer) asking for money.
If Schroeder had indeed parted company with Stevens he was continuing in business on his own, because at his new address at Merton Road, mail was still passing to and from the German Secret Service. Through an intercepted telegram it was learned that Mrs Schroeder would soon be delivering material to ‘Schmidt’ (a Steinhauer alias) in Brussels. She was arrested at Charing Cross Station.
In her possession were found an English Admiralty chart of Spithead, a gunnery drill book, and certain confidential drawings dealing with the engine rooms of battleships which had clearly been obtained by someone connected with espionage.
Schroeder, entirely ignorant that his wife was in custody, was also arrested shortly afterwards. When the police came to search his house they discovered more fatal documents. Valuable as he had been as a spy, he had been unutterably simple when it came to destroying traces of his guilt. The police found in his possession a paper containing a list of thirty-odd highly important questions relating to the English navy which no man in his sane senses would have kept about him.33
Steinhauer’s account must be treated with caution as it was edited and given a decidedly pro-British, pro-Melville slant by Sidney Felstead seventeen years after these events. Felstead’s account was approved by Basil Thomson, the jingoistic Scotland Yard Assistant Commissioner in charge of the CID from 1913. Readers were kept in ignorance of MI5 or the Special Section within it, as Steinhauer refers to Special Branch, and Melville, but never explains exactly who Melville is working for.
Steinhauer’s MI5 file shows that Gould’s capture was the most important so far.
In March 1914 after Gould’s arrest, F Reimann [Steinhauer], a traveller in jute, wrote to William Schutte, son of Steinhauer’s agent Heinrich Schutte, stating that he was coming to England and asking whether it was worth while coming down to Portland. The reply was to be sent to the Wilton Hotel, but on 29th March Reimann wrote to the hotel from Antwerp asking the management to forward letters to Hamburg, and it is doubtful whether he ever came.
His correspondence with agents here during the latter half of March shows that he was aware of danger in coming here. The Times’ report on the Gould trial mentioned the following documents:
Incriminating letters signed ‘St’ dated 1904.
Friendly letters signed ‘St’ dated 1914.
A picture postcard photograph of Gould’s correspondent dated 8th December 1913.
A Cabinet photograph on the back of which the words London, February 1913 were written in ink.
The fact that this photograph represented a man in police uniform and was signed ‘G. Steinhauer’ was not reported.
On 4th April 1914 the Continental Daily Mail, also reporting the trial of Gould, referred to the search made by the British Secret Service to establish the identity of the agent who signed himself Schmidt, RH or CF, Peterssen, P, and Richard, aliases used by Steinhauer in the Gould, Grosse and Parrott correspondence.34
Steinhauer was being told in no uncertain terms via the Continental Daily Mail that SSB existed, was onto him, and had evidence to bring a case against him. On 26 March Steinhauer’s photograph was circulated to Dover, Folkestone, Queenborough and Harwich and evidence submitted to the DPP. A solid case would also require proof that he had actually procured Gould to obtain information which might be useful to an enemy, and in support of this telegrams were produced in which Gould had asked for money for his services in 1912 and Steinhauer had sent it by registered post. There were also letters to Holstein. On 27 March an arrest warrant was issued.
Three months later, on 28 June, the Austrian Archduke Franz Ferdinand was shot at Sarajevo and, thanks to the network of protective agreements now in place, war between the superpowers was imminent: but when? Steinhauer was ordered back to England.
At the end of June, 1914… I found myself on the Belgian coast anxiously asking how I should get into England, in what guise, and more important still, how I could trick my old foe at the War Office in Whitehall.
I knew him, oh yes, and he knew me. Would he, or some of his men armed with my photograph, be waiting for me at Dover?
Well, yes. His book claims that he put the British off the scent with fake postcards to be sent via the Caledonian Road. Whatever he did, it worked; he did at least get to London unnoticed. There, he claims that he went to Becker’s Hotel in Finsbury Square where a jumpy waiter called Albrecht wanted him gone because Scotland Yard men were hanging around. Steinhauer moved on. He visited Mrs Hentschel at Chatham but she
…was anxious only that I should be gone, for, as she said bitterly, the English people had given her a terrible time ever since the exposure of Parrott.
Another spy, a Sittingbourne photographer called Losel, was also ‘very uncomfortable and anxious to get rid of me’.35 It seems that by this time fear was overtaking the network. Most of these minor players recognised that war was coming and when it did, they could risk long jail sentences or worse. They were sorry they had ever got involved.
All this time,
It would have taken more than my old friend, Melville of Scotland Yard – he had ostensibly retired from the police but still carried on his Secret Service activities – to have recognised me in Hendryk Fritsches, the Dutch manager of a Hamburg coffee merchant.
Even Melville, whose cleverness in the case of Parrott I readily admit, might have looked more than twice before he discovered in the elegant Dutchman with the mutton-chop whiskers and the monocle his formidable adversary, Steinhauer.36
The facial hair, hats and bulky, ill-fitting tailoring of the period must have assisted disguise. But was Steinhauer such a formidable adversary? His vanity was colossal. It is impossible to imagine Melville presenting an agent with a signed photograph. And as the British file on Steinhauer laconically comments,
In July 1914 it became known that a man named Fritsches, a traveller in jute, was in this country. This name was already known to the Security Service and was suspected of being an alias of Steinhauer. Every effort was made to identify him and effect his arrest, but without success.37
Again he eluded Melville, yet narrowly. He headed north, visiting a series of nervous agents and telling them to leave for Germany, and spent a week in the east of Scotland on a ‘fishing trip’ taking depth soundings and hearing about troop movements. He got out by the skin of his teeth, having aroused suspicion, at the end of July.
The agents were less fortunate. On 4 August 1914 with the declaration of war only hours away, twenty-one of the twenty-two names on the MI5 list are said to have been rounded up in towns and cities all over Britain. In fact, on 5 August, the Home Secretary Reginald McKenna stood up in the House of Commons and made a statement to the House that the operation had been a great success and that twenty-one German spies had been arrested. However, much is still unclear in terms of who the twenty-one spies actually were. The fact that three separate lists were subsequently published by Kell’s Bureau has somewhat compounded the confusion.38 While a list of twenty-two targets was initially drawn up, it would seem that when the Home Secretary made his statement, only nine (as opposed to twenty-one) suspected spies on Kell’s list had in actual fact been arrested. However, the Director of Public Prosecutions reported the following year that, ‘24 German spies were arrested at the outbreak of war under the Official Secrets Act 1911’. Intriguingly, not all the names on this list appeared on Kell’s target list of twenty-two. When, in 1921, the Bureau was writing its own internal history of the war years, the list of twenty-one that appeared did not correspond entirely with either the 1914 target list or the DPP’s report.
The solution to this conundrum seems to lie in the fact that the 1914 list was very much a ‘wish list’, while the DPP list reflected actual arrests. By 1921, few in the Bureau had worked for it a decade earlier, and those responsible for writing the internal history had little or no direct knowledge of what did or did not happen in 1914. It would seem that their 1921 list was actually based on a July 1915 press report from the Daily Chronicle which summarised the DPP’s report and listed twenty-four names – however, unknown to the internal historians, the Chronicle’s article actually contained a number of factual errors, due in part to inaccurately copying down extracts from the DPP report.
Most of those arrested in August 1914 were interned (held in custody without charge or trial) for the duration of the war. Karl Gustav Ernst, having been arrested with the rest, petitioned the Home Secretary on grounds that he was a British subject, and therefore could not legitimately be interned as an alien. As a result he was charged with treason and espionage: a capital offence. He was tried in November 1914 and imprisoned for seven years.
As the rolling-up of the network was handled by Special Branch, and there was now plenty of time to interrogate the internees, life at MI5 proceeded undisturbed. An unsigned internal memo dated the first day of the war, 5 August, advises that ‘it is desirable to find out a little more about’ a Mr Robertson, resident of the Salisbury Hotel and Secretary of the Neutrality League of 12 St Bride Street, who
…has been publishing articles in various newspapers calling upon Englishmen to do their duty! (This consists in stopping the war.)
Typed below is:
Mr M to enquire.
On 7 August Mr M submitted the following:
I have made enquiries and learned that the Neutrality League no longer exists at 12 St Bride Street. It was only at this address for a few days and got into an office there while the tenant was away. The people who came there respecting the league were a nondescript crowd of cranks, male and female – not at all numerous.
Dr Robertson the supposed Secretary is a fictitious name. The real name of the man was Mr Langdon Davis, of whom however nothing seems to be known at present.
The Salisbury Hotel people would have nothing to do with the League. The Neutrality League was really got up by Mr Norman Angell, 4 King’s Bench Walk, and the defunct remnants have now gone to that address.
The raison d’être of the League was that some unknown person gave £200 for the purpose. It is not unlikely the German Ambassador knew something about it. This was the money which enabled the League to advertise, but the cash was soon spent. The persons frequenting the office were a needy-looking lot. A Mr C.E. Fayle was also connected with it.
This is pretty good detective work in two days, even allowing for the convenient proximity of the ‘defunct remnants’ right behind Temple Chambers in King’s Bench Walk.
Melville’s work proved that he knew what he was doing and his superior officers listened to him. Thanks to this, and Kell’s meticulous inventory of facts about who was doing what and where, SSB was pretty much on top of home security when war began. Cumming too knew about the disposition and movements of the German navy thanks to sub-agents recruited on the Baltic and North Sea coasts. Further, his men abroad were technically adept as Steinhauer’s were not. Bywater, for instance sent back reports such as this, describing his own memorisation of defences both existing and planned at Sylt…
In rear of the second coast battery was an armoured fire-control station with a very large range-finder; the base I estimated at 25 feet.
Here I may interpolate that the calibre of the guns in the batteries was ascertained, not by a direct inspection of the guns, but by observing ammunition being unloaded from railway trucks at Emden for shipment to the island. Howitzer shells of 11 inches and gun projectiles of 9.4 inches were definitely identified...39
The Admiralty was concerned that von Tirpitz was working with Krupp to provide superior armaments. The arms race was on and the Germans were suspicious of snooping Englishmen. Yet Cumming was able to receive from Borkum items such as a sketch-map which
…showed the site of each battery with the number and calibre of its guns; the location of all magazines, bomb-proof shelters, and observation posts; the positions prepared amidst the sand dunes for the mobile 4.1 inch high-velocity guns which were to supplement the fixed defences and the narrow-gauge railway and paved roads that had been made for the transport of troops and material. Other details indicated were the main and emergency wireless stations, the secret telegraph and telephone cables leading from garrison HQ to the mainland – as distinct from the ocean cable lines which traverse Borkum – and indeed every feature of the entire defensive system.40
The British took pains to find out about the ‘weaker’ German navy; the Germans, over-confident in their own military superiority, had no up-to-date intelligence from the British army. Steinhauer lacked Melville’s credibility with superior officers. Steinhauer also made mistakes which played in MI5’s favour. He should have wound up the letter-drop network at the first suspicion that it was intercepted. He left it in place and played into British hands. When war began, German informants in England were detained and Berlin’s flow of news stopped.
As a result, as late as 21 August the Germans did not know that the British Expeditionary Force was on its way. In concentrating on their enemy’s maritime force, they had lost sight of their own weakest point: the vulnerability in the Schlieffen Plan that left them open to attack from the west as their mighty army wheeled south and east through Belgium and northern France.