‘He is a marvellous orator, and possesses an extraordinary gift for hypnotizing his audience … Even though his policy is a negative one, his personal magnetism is such as to win over quite reasonable people to his standard, and it is this which constitutes the chief danger of the movement.’ Subsequently Marshall-Cornwall wrote a thoughtful treatise on geography and disarmament. In 1943 he was transferred from a post in the Special Operations Executive to be Assistant Chief of SIS.16
The Admiralty’s grasp of naval intelligence was weaker than the War Office’s hold on military intelligence, perhaps for lack of the sound traditions derived from the old Intelligence Division and possibly for lack of brainpower. ‘All simple-minded, religious, semi-literate, and amazingly unadaptable’, concluded Harold Laski of the London School of Economics after lunching at the Admiralty in 1929. ‘No doubt they are technically superb,’ he conceded, ‘but they never see beyond their noses.’17
Sir Robert Bruce Lockhart, who had been acting Consul General in Moscow when it became the Soviet Union’s capital in 1918 and survived a month’s imprisonment in the Lubianka, exchanged confidences during the 1930s with ‘Commander Fletcher … of the Secret Service’. Reginald (‘Rex’) Fletcher had become a Royal Navy cadet in 1899 aged fourteen. After wartime service on destroyers in the Dardanelles, he became post-war head of the Near East section of the Naval Intelligence Division. He sat as Liberal MP for Basingstoke in 1923–4, became an SIS officer supervising overseas operations, joined the Labour party in 1929 and was elected as Labour MP for a Midlands mining constituency in 1935. During the 1930s he worked at SIS headquarters in Broadway during the morning before crossing Westminster to the House of Commons in the afternoon. Fletcher and Bruce Lockhart agreed in their response when, in 1936, Admiralty intelligence became excited by obtaining ‘absolute proof’ of a secret treaty between Italy, Germany and Franco whereby Italy was to receive the Balearics and Ceuta and Germany the Canary Islands in return for helping the Nationalists in the Spanish civil war. ‘No intelligence reports can be taken at more than twenty per cent of truth,’ commented Bruce Lockhart, when the story reached him. ‘Secret treaties, etc., are the kind of thing intelligence officers keep supplying all the year round.’ Fletcher of SIS told him, ‘Admiralty Intelligence is particularly bad, no grey matter in it.’ Rear Admiral Sir James Troup, Director of Naval Intelligence, ‘however good he may be as a sailor, is an absolute child about intelligence’. In 1938, using SIS sources while explicitly denying that he had access to any intelligence sources, Fletcher contributed an essay on European air power (containing strictures on the Air Ministry) to a rearmament survey entitled The Air Defence of Britain. The savagery of his Commons speech in January 1939 attacking Chamberlain’s policy of appeasement was remarkable as coming from an SIS man. The Foreign Office’s liaison with SIS Patrick Reilly perhaps had Fletcher (afterwards Lord Winster) in mind when he later wrote of ‘that dangerous type often found in Naval Intelligence, the Commander passed over for promotion, bitter because he thinks, probably rightly, that he is cleverer than his contemporaries who have been promoted’.18
Starting in 1919 SIS officers were installed in British embassies and legations under the guise of passport control officers (PCOs). Many heads of diplomatic missions mistrusted the PCOs’ activities being run under cover from their buildings. A few PCOs were gung-ho buffoons, several were spivs, but others were discreet and conscientious. Ambassadors and heads of legations however preferred formal sources of official information, received unofficial confidences which they could evaluate for themselves and disliked material of obscure and untested origins which might mislead when transmitted to London. They further feared that sub rosa activities by PCOs might cause diplomatic incidents or compromise the mission. This attitude was so pronounced that in 1921 the Foreign Office (codenamed ZP inside SIS) sent a circular to all its embassies and legations in Europe which outlined its attitude to espionage during the 1920s. ‘Today the old type of Secret Service has disappeared, and melodrama has given place to a more sober style of enquiry from which the diplomat need no longer, as he was very properly required to do before, withdraw the hem of his garment,’ wrote the PUS, Sir Eyre Crowe. ‘It is largely concerned with subterranean revolutionary movements and individuals, and instead of spying on the military defences of individual countries, devotes itself principally to detecting tendencies subversive of the established order of things, irrespective of whether these are directed against the United Kingdom or are International in character.’ This circular did little to reduce the hostility of traditional diplomats to spies operating in their territories. As one example, Sir Tudor Vaughan, the British Minister to Latvia, was outraged by the breach of propriety and possible complications when the files of the SIS station in Riga were moved for safety to the legation after the ARCOS raid in 1927.19
In addition to the PCOs, Admiral Sir Hugh (‘Quex’) Sinclair, Chief of SIS in 1923–39, financed the parallel Z Organization – a network of businessmen based overseas, acting as informants and collecting Friends who could amplify their reports. Claude Dansey, the PCO at Rome, left his post in 1936 with the cover story that he had been caught embezzling SIS funds. He subsequently opened an import-export business based at Bush House in the Strand, from which he ran the Z Organization. Dansey was a self-mystifying and sinister man: ‘I’m sure he’s very clever & very subtle, but I have no proof of it because I can’t hear 10% of what he says’, wrote Sir Alexander Cadogan, PUS of the Foreign Office, at the time of Dansey’s appointment as wartime Vice Chief of SIS.20
The successes of the Admiralty’s wartime code-breakers, known as ‘Room 40’, are celebrated. Their greatest SIGINT coup came in 1917 with the interception of the Zimmerman telegram, in which the German Foreign Minister promised to award three southern USA states to Mexico if it joined the Germans and declared war on the USA. The War Office’s MI1B did equally important work. The two sections, which veered between cooperation and rivalry between the wars, were merged into one agency, the Government Code and Cypher School (GC&CS), in 1919. It was swiftly recognized as the most secretive and effective British intelligence agency. The Russian section of GC&CS was led in the 1920s by a refugee from the 1917 revolution, Ernst Fetterlein, who had decrypted British diplomatic material in the tsarist cabinet noir before decrypting Bolshevik diplomatic messages for the British. For most of the inter-war period the Chief of SIS, Admiral Sinclair, was also Director of GC&CS. GC&CS had no more immunity from histrionic fantasists craving attention than other security services. One Cambridge mathematician and GC&CS officer, who committed several indiscretions in 1938–40, had ‘a kind of secret service kink’, Guy Liddell noted. ‘He likes to imagine himself as a cloak-and-dagger man, and is given to relating hair-raising stories about himself which have absolutely no foundation in fact.’ He also drank Chartreuse by the bottle.21
Lord Curzon of Kedleston, Foreign Secretary in 1919–24, was as peremptory and touchy as minor royalty, but unfortunately without their laziness. During 1920 he became wrathful about the deciphered wireless messages exchanged between Moscow and the Soviet trade delegation in London. ‘That swine Lloyd George has no scruples or shame in the way he deceives,’ Lenin declared in one intercepted message. ‘Don’t believe a word he says, but gull him three times as much.’ Lloyd George was nonchalant about the insults; but eight messages from Lev Kamenev, the head of the Moscow communist party (who was in London for the trade negotiations), referring to the CPGB and to Moscow’s secret subsidy of the Daily Herald, inflamed Curzon and other extreme anti-Bolsheviks in the Cabinet. They insisted on publication of these incriminating messages: a rash, flamboyant gesture which betrayed to Moscow that its codes had been broken. Alastair Denniston, head of GC&CS, blamed the short-term Kamenev publicity coup for the plummeting output of deciphered Soviet radio traffic after 1920. Thereafter, although GC&CS intercepted much secondary material on Asia and Bolshevik subversion in the British Empire, it was weak on central Europe. In addition to Curzon’s blunder, it seems likely that
