Hitler's Spy Chief (11 page)

With these, however, the limits of the Versailles treaty were reached. Moreover, under the terms dictated by the Allies, naval personnel were reduced to 15,000 of whom no more than 1,500 were to be officers. Canaris was not one to be put off by such formalities. He was already drawing in the best officers of the disbanded, post-putsch naval brigade to be incorporated into the new navy. Now he set about forming a secret reserve, which would be invisible to those sent to enforce the Versailles treaty, in this instance the Allied Naval Control Commission at Kiel.

To achieve this, Canaris needed money. His encounters with Zaharoff and others had left him in no doubt how to acquire it. The sale of weapons was the easiest way, and there were plenty of old contacts who would help procure and sell them on. A Danish intermediary was found with links to customers, notably in the recently created Baltic States, who were desperate to equip new national navies. Indeed, demand soon outstripped supply, as the Danes proved highly energetic. As they took a forty per cent commission, their enthusiasm was perhaps justified.

Within months, assisted by his old comrade Leutnant Richard Protze, who would later troubleshoot on arms deals with Canaris in the thirties, a complete arsenal and training area was constructed under the very noses
of the Control Commission. The many radical, right-wing groups of disenchanted officers were now tapped by these two. Canaris became more and more involved in groups that had no desire to see the republic survive. One of these was led by a seemingly unimportant Austrian called Adolf Hitler. There is no evidence to suggest that the two ever knew each other personally at this stage, although they both must have heard something of each other in the twilight world of right wing conspiracy.

However, if he did not meet Hitler at this point, he was now going to encounter someone with whom his fate would be inextricably bound. In June 1923, he was posted to the cadet training ship
Berlin
. It so happened that his appointment coincided with the arrival of a singularly dashing, if histrionic, cadet by the name of Reinhard Heydrich.

Canaris found many aspects of the training ship tiresome, not least the overbearing quality of some of his fellow officers, who lacked the finesse Canaris had enjoyed among his wartime naval comrades. Moreover, the isolation from the intrigues and machinations which had so marked his life in the last three years was a hard penance. Conspiracy had become an addictive drug for him, as important as family and career. His relatively junior position on a training ship seemed a sad use of his talents. Depression and melancholy set in; only interrupted by the young and sensitive cadet, Heydrich, whose highly strung nature appealed to Canaris.

Heydrich was, perhaps to the eternal credit of the German navy, the most unpopular cadet on board. The son of an opera singer and a painter, his passionate, artistic temperament, moulded by naval discipline into arrogance and brutality, Heydrich was mocked for his high-pitched voice. His fellow cadets called him ‘the goat'. He was mercilessly teased and bullied. Canaris, who himself had known some teasing at school and had always felt, with his name, diminutive stature and sensitive nature, something of an outsider, experienced a strange rapport with Heydrich. The two met often on shore and the young cadet, who was a proficient
violinist, played duets with Canaris' wife while the senior officer donned his chef's cap and prepared supper.

Whether Canaris found out at this stage that the even then staunchly anti-semitic young man was in fact partly Jewish is not recorded, though it is clear that Canaris knew this in later years but never breathed a word of it to his colleagues or friends (see chapter twelve). Problems over ancestry appear to have acted as a bond.

The rapport that began in Kiel lasted to the end of his life, though the two were to become deadly rivals. As a later secretary of Canaris, who knew both men, recalled: ‘With Heydrich and Canaris there was always a kind of unstated understanding as if to say to the rest of the world, we have shared experiences in the Navy together which places us apart from everyone else.'
8

Heydrich did not last long in the navy. Cashiered for breaking off an engagement, then as in other navies an act bringing disrepute onto the honour of the service, he left for more political pastures. But it seems possible that through his relationship with Canaris he had indeed learnt perhaps a little about the world of intelligence, enough to whet his appetite and find in that world an outlet for his strange ideas and inferiority-complexed personality.

Canaris, meanwhile, went into decline. Malaria and depression both took their toll. He had made up his mind to resign from the navy unless he was offered more stimulating duties. However, events once again took control and he was summoned to the Admiralty to discuss whether he would consider a ‘delicate' mission overseas.

Having survived the initial shocks of the immediate post war period, with both extreme right and extreme left for the moment exhausted, there was time for Germany's authorities to contemplate how the country could wriggle out of the straitjacket of the Versailles conditions. Most pressing of all was how the military and naval arms could be reconstructed far from the prying eyes of Britain and France.

Under the guiding genius of Colonel-General Hans von Seeckt, the chairman of the preparatory committee of the Peace Army, the ‘poison' of the disarmament articles of the Treaty of Versailles began to be neutralised. Moreover, thanks to the creation of Poland by the Allies, there was in the form of the Soviet Union a country eager to cooperate with these military aims. Poland was for Moscow as much as for Germany a negative factor in their security arrangements. Bismarck's old Prussian policy to safeguard relations with Russia was back and, notwithstanding ideological differences between Moscow and Germany, the two military hierarchies found mutual benefit in the business of avoiding the demands and prying eyes of the West.

But while Moscow could offer the location for secret armies and embryonic air-forces to train and re-equip, her lack of warm water ports offered no such facilities for the German navy. Moreover, the navy was, after the traumatic experiences of the Kiel mutiny, among the officer class at least, highly anti-Communist. One country, however, that was geographically suitable for such activity and desperately in need of building-up its own naval arm was Japan.

In the spring of 1924, Canaris, dressed as a civilian, set off for Osaka to help supervise what was in many ways the most deadly of the breaches of the Treaty of Versailles: the secret U-boat construction programme in Japan. The U-boats had been denounced by the Allies as the most aggressive arm of the aggressive state. If it had been left to the Allies' Control Commissions, there would have been no submarine construction capacity left in Germany. However, Japan was keen to acquire submarines and the Germans desperate to retain their expertise. Together the two countries worked with growing efficiency, not least as the Japanese were convinced that only the Germans had the know-how to construct submarines suitable for the Pacific Ocean.

A blind cover firm was established in the Netherlands to deal with the Japanese and Canaris was sent to Osaka to ensure the Germans
understood the needs of the Japanese and that there were no difficulties caused by the cultural differences involved. The mission lasted barely twelve days and the report Canaris made upgraded the relationship, allowing the two countries to lay the foundations of what would become an ever more intimate cooperation. Given the strong ties which linked Japanese and British navies in those years this was a formidable achievement.

Indeed, the Royal Navy may well have got wind of what was afoot and brought pressure to bear on the still weak German republic. In any event, a new chief of the navy, Vice Admiral Adolf Zenker, was appointed, with a very different brief: to end all secret rearmament activity and replace it with nothing less than cooperation with the Royal Navy. Zenker believed that, as the Royal Navy had imposed most of the restrictions on the German fleet, it would make sense to win over its goodwill and work for the more restrictive articles to be lifted. Moreover, Zenker was convinced that any clandestine rearmament would be picked up by the all-seeing eyes of British intelligence.

On 3 October 1924 Zenker announced that cooperation with the Japanese navy would no longer be a priority. Moreover, Zenker was keen to limit the activities of the industrial and commercial interests that were behind the sinews of the secret armament programme. ‘Naval policy,' he wrote, ‘cannot be led by commercial interests.' Canaris was given a desk job which, although he discharged it capably, was not his natural environment, a fact not lost on his superiors. Captain Arno Spindler, who saw a lot of him at this time wrote: ‘His troubled soul is appeased only by the most difficult and unusual of tasks.'

The Zenker policy, however well-intentioned, could not deflect those interests and personalities who were determined to throw off the shackles of Versailles. One such man was Captain Walter Lohmann. This roguish descendant of a Bremen merchant, whose father had been a director of the powerful North German Lloyd shipping line, was a dedicated intriguer with a passion for secrecy and backstairs deals. Lohmann and
Canaris linked conspiratorial hands across a sea of Zenker caution.

Secret funds were channelled to a score of front companies ostensibly engaged in shipping or sailing boat construction. In 1923 Navis GmbH was set up as an undertaking ostensibly carrying out work for north German sailing clubs. Other companies, all well capitalised, followed suit. Trayag GmbH, the same year, was followed within eighteen months by half a dozen others. These included Berliner Oeltransport GmbH, Caspar Werke, and the film company Phoebus: an important addition for Lohmann which he hoped would help combat American penetration of German industry by propaganda.

In this maelstrom of secret activity, it was perhaps inevitable that as soon as Canaris mentioned submarines to Lohmann, yet another shell company was established to further the secret submarine programme. But with Japanese cooperation stymied by Zenker, it was necessary to look for another friendly navy closer to home. It was time to reactivate Canaris' links to the Spanish navy, now and since the end of the war being supplied by that old friend Basil Zaharoff. Happily, this coincided with the German admiralty's keenness to set up a network of agents in Spain. Canaris was the obvious man for this job and within two days of arriving in Madrid in June 1925 he had rekindled his old links and begun to set up a web of agents covering all principal ports.

In Barcelona, Carlos Baum, a businessman, was employed under the codename Martha. In Valencia, it was Carlos Fricke (code name Fernando). In Cartagena, Alfred Menzel (Edoardo), in Cadiz, Riccardo Classen (Ricardo). These agents were supported by networks resurrected by Canaris from his wartime experiences.

In addition to this sterling work, his official task, Canaris now set about ensuring a home for his submarine projects. With the help of his old friends Ullmann and Echevarrrieta, he rapidly disabused Berlin of the value of working with the ‘third rate' Banco de Cataluña as a partner and noted that the only financial house worth having as a partner was
Echevarrieta. By happy coincidence, Echevarrieta, ‘the richest man in Spain', was running short of funds. He was by no means the first, nor indeed the last, industrialist at the centre of a country's power structures to suddenly require capital replenishment. If German money was available to help Echevarrieta escape bankruptcy and enable him, with Ullmann, to realise the dream of establishing an independent arms industry for Spain, what reason could there be for not helping Germany with her illegal submarine programme?

Fortunately for Canaris, these powerful interests were in tune with the younger officers in the Spanish navy who had not been suborned like their superiors by Zaharoff. Like most officers of junior rank they resented the ‘sweets' lavished on their superiors. They knew the reputation of German submarines from the war and were eager to have them for their own navy. By another stroke of luck, a few weeks later a Spanish naval delegation was in Berlin. They soon came to the conclusion that the only man they could do business with in Germany was Canaris. Only he understood their language and their foibles. Thus, in a matter of a few months, Canaris had placed himself at the centre of the interlocking circles of German and Spanish naval rearmament. From now on nothing concerning relations with the Spanish Navy in Berlin took place without Canaris' approval.

Events now moved relatively swiftly. Echevarrieta was invited to sail his yacht, the magnificent
Cosmo Jacinta
, to Kiel. Lohmann opened him a generous line of credit from Deutsche Bank and the Spanish King was ‘inspired' to ask Echevarrieta to build torpedo boats for the Spanish navy. Echevarrieta, however, needed capital to do so. Zaharoff and other British interests had got wind of what was going on and had offered the distressed industrialist financial support if he would support British, or at least Vickers' interests in Spain. This move, however, only strengthened Canaris and Lohmann's hands in Berlin to secure yet more credits from Deutsche Bank, one of whose directors, the aptiy named (from Echevarrieta's point
of view) Dr Luck, travelled to Madrid to draw up the financing agreements with the industrialist, ably assisted by Ullmann.

At a stroke, the stranglehold on Spanish military affairs exercised by the Bank of England and the Zaharoff-backed pro-British Constructora Naval, which had dominated Spanish arms procurement, was broken. Zaharoff, it appears, was distracted by events in the eastern Mediterranean. He may also have chosen to remain neutral partly out of respect for the King of Spain, whose goodwill he would need in order to continue his affair with the King's cousin, the Duchess of Marchena. Another factor, of course, was that Zaharoffhimself, along with all other armament interests, could only eventually prosper from a resumption in Germany's armed capabilities. In particular, his interests in France could only be encouraged by a revival in German arms or at least the semblance of rearmament.