M (23 page)

This colourful account, exaggerated or even untrue as it certainly is, nonetheless indicates the mood of a wild east in which few secrets were retained. Von Cannitz, or Graves, was recalled to Berlin ‘exactly seven days before Togo's first night attack'.
²⁰

It is significant that in the Intelligence Department at Berlin they knew an attack was imminent, although they did not know it at Port Arthur. Furthermore, Russian securities dropped 18 points on the New York Stock Exchange before the official knowledge of the attack came through. This information leaked out through the German Embassy in Washington.
²¹

It all
sounds
convincing but we have only Graves's word for it that he was ever in Port Arthur at all. Graves was a great self-mytholo-giser and the notion that the Germans were best-informed was flattering to him. British intelligence was thoroughly certain, on the other hand, that Sidney Reilly was spying for the Japanese.
²²
In February 1904, with the Japanese beginning a long siege of Port Arthur, Sidney Reilly too would leave – for Europe, and an opportunity to assist Mr Melville.

On 1 December 1903, Melville began undercover work as W. Morgan, General Agent, of 25 Victoria Street. His two-roomed office was located just across Parliament Square from Scotland Yard, in a building whose public entrance was bedecked with business names while the second entrance was hidden around the corner. With amazement he found that although

few men at this time were better known in London than I was… during the five years I was there I never met any person going in or coming out who knew me. This could only obtain in London.

Detective work, actually being there and asking the questions, meeting the people and seeing the places where things happened and using the intuition born of long experience, was what he did best, and MO3 would exploit his skills to the full.

My duties were rather vague, but were generally to enquire into suspicious cases which might be given to me; to report all cases of suspicious Germans which might come to my notice; the same as to Frenchmen and foreigners generally; to obtain suitable men to go abroad to obtain information; to be in touch with competent operators [and] to keep observation on suspected persons when necessary.

Melville's role included not only defensive counter-espionage but espionage itself, should he be able to ‘obtain suitable men to go abroad to obtain information'.

The ‘vague' duties resolved themselves at the start into a mission on which would depend the future of British naval defences and (had anyone suspected it at the time) the foundation of one of the world's biggest companies. The background to the affair is succinctly set out in a letter of reminiscence dated 30 April 1919 from E.G. Pretyman MP to Sir Charles Greenway, the chairman of the Anglo-Persian Oil Company, in which he recounts his own involvement some fifteen years earlier, as Civil Lord of the Admiralty, in securing the Persian oil concession for Britain; ‘In 1904 it became obvious to the Board of the Admiralty that petroleum would largely supersede coal as the source of fuel supply to the Navy. It was also clear to us that that this would place the British Navy at a great disadvantage, because, whereas we possessed, within the British Isles, the best supply of coal in the world, a very small fraction of the known oil fields of the world lay within the British Dominions'.

The Americans, Germans, Japanese and Russians had already acquired access to guaranteed supplies of oil. If Britain was to develop oil-powered ships she must have a large and guaranteed supply of her own.

In the months preceding Melville's appointment a wealthy Englishman, William Knox D'Arcy, had approached the Admiralty. Knox D'Arcy, having made his first fortune developing a gold mine in Australia, had bought the rights to exploit Persia's oil reserves and was negotiating with the Turkish Government for similar rights in Mesopotamia (now Iraq). He was convinced that reserves existed, although so far no oil had been found. Petroleum already powered engines in the most advanced factories, agricultural equipment, ships and motor vehicles, and even fuelled the aircraft which the Wright Brothers had just – in this very year of 1903 – flown for the first time in America. Control of oil supplies would surely be important in time of war. But with every month that passed Knox D'Arcy was pouring more money into a hole in the ground. He required massive backing to finance further exploration and told the Admiralty that he would be prepared to sell an interest in the Persian concession.

It all made sense but the Admiralty was unconvinced by Knox D'Arcy's claim that oil would be found in Persia. They did not close the door on negotiations, but waited and did nothing. Quite how they discovered, in December of 1903, that Knox D'Arcy had turned to Lord Rothschild is uncertain, but it may have been learned through ‘shadowing', surveillance and secret (illicit) interception of mail or telephone calls, and Melville was their only specialist in this regard.

Knox D'Arcy's proposition impressed Lord Rothschild, whose affairs were much too entangled with those of the British Government to allow him to assist. He therefore decided at the end of the month to write to his cousin in Paris. So it came about that, in February, Baron Alphonse de Rothschild and his team met Knox D'Arcy and a colleague of his, John Fletcher Moulton, in Cannes. Other guests at the Grand Hotel included a London couple, Mr and Mrs William Melville.

It is astonishing that anyone with confidential matters to discuss should pick an hotel to do it in. Unlike personal domestic servants, hotel staff are notoriously willing to trade information for money – indeed excusably so; theirs is a service culture reliant on gratuities. Waste-paper bins, overheard conversations, phone calls intercepted at the hotel exchange, private letters consigned to the post and opened – an hotel is to security as a colander to water, and every leak would have been accessible to a man like Melville. How he obtained this particular intelligence is unknown, but Melville's reports of the progress of these negotiations between Knox D'Arcy and an incipient French syndicate were sufficiently alarming to make Mr E.G. Pretyman, an MP and Civil Lord of the Admiralty, take up his pen:

I… wrote to Mr D'Arcy explaining to him the Admiralty's interest in petroleum development and asking him, before parting with the concession to any foreign interests, to give the Admiralty an opportunity of endeavouring to arrange for its acquisition by a British syndicate.
²³

On receipt of this letter Mr Knox D'Arcy returned to London to hear what the Admiralty had to say. They promised to approach Burmah Oil with a view to setting up a syndicate. He was perfectly in accord with this but in a hurry; Lloyds Bank, already committed to the tune of about £150,000, was demanding that he put up his Persian concession as security against further funding. He maintained an adamant refusal, but could not wait indefinitely for commitment from the Admiralty.

Melville kept an eye on developments.

In the middle of May 1904, at City Hall Westminster, he was presented with an illuminated address thanking him for his thirty-one years of police service, and a cheque for well over £2,000. Subscribers to the cheque included the embassies of America, France, Germany, Austria-Hungary, Portugal, Belgium, Italy, Japan, China, Mexico, Rumania and Peru. In his speech of thanks he said he was ‘terribly embarrassed at having to reply to this outburst of recognition for his services. During his career he had been in many tight places, but this was the tightest, especially as he had to thank not only the English subscribers but those of other nations. The honour had been bestowed on him, but it was due to the brave and gallant set of officers under his control.'

Shortly after that happy day he learned that Knox D'Arcy could wait no longer. In late June there would be a meeting between Knox D'Arcy's agent, John Fletcher Moulton, and Baron de Rothschild.

Melville could hardly turn up by chance in the south of France a second time. Fletcher Moulton probably knew him at the very least by sight, or possibly as the bearer of the letter from Mr Pretyman summoning Knox D'Arcy to London. And Baron de Rothschild's negotiations were a concern of the French Government, whose agents also knew Melville well from his visits to the Riviera with the King.

Fortunately he had run into an old friend. He arranged a meeting with Sidney Reilly in Paris on 6 June. Here was the very person to take his place. Between them they came up with a somewhat dishonourable idea that Melville was quite happy to pay for.

One of the most effective ways of scuttling the negotiations would have been to sow doubts in de Rothschild's mind concerning the odds of oil being found in the area D'Arcy was drilling. Reilly was a creative fellow. If he saw a desired outcome he would manipulate events in order to achieve it.
²⁴
This particular little scheme could have drawn on his skills as a forger, although it is more likely that he exploited his network of contacts. Because by the time the de Rothschild-Moulton meeting took place later in the month, information from an ‘unfavourable outside interest' had cast doubt on Knox D'Arcy's ability to find oil. Fletcher Moulton was offered terms less generous than before and believed that Baron de Rothschild had cooled off the idea following sight of some unknown ‘report'.

Thirty kilometres away at the Continental Hotel, St Raphael, Sidney Reilly was writing with satisfaction about a ‘most useful report' that had helped him ‘turn the tide'. Melville would have been startled, though, had he seen that the Mrs Reilly twirling her parasol in the sunshine of St Raphael was no longer Margaret, but a quite different young woman. This Mrs Reilly is more than likely his first bigamous wife Anna, with whom he fled Port Arthur in early 1904, having sent Margaret packing back to England.

Fletcher Moulton returned to England downcast, but in London he found Knox D'Arcy unexpectedly cheerful. It seemed Burmah Oil and the Admiralty were definitely setting up a syndicate that would continue exploration in Persia. In May of 1905, the deal was signed; Knox-D'Arcy got his backing and Burmah managed the exploration. The first field in the Middle East was discovered at Majid-i-Suleiman in 1908, and the following year the Anglo-Persian Oil Company was founded as a consequence. The British Navy was assured of oil during the First World War, and Anglo-Persian went on to become BP, today the world's fifth-largest company.

Despite their defeat, Boer groups were still plotting under the leadership of a Dr Leyds, who was based in Holland, and it was Melville's business to find out the plans of ‘an incessant stream of South African suspects arriving at that time in this country'. Boers were hard to watch as they expected to have Scotland Yard men keeping an eye on them, but his memoir relates how he was once able to obtain a complete run-down of the intended movements of a party led by one Ledebour, ‘a very suspicious character', as discussed while they had their boots polished outside Liverpool Street on arrival. Evidently they had spoken English to one another, for the shoeblack was able to oblige Melville with an account of everything they said.

Thus ended one of the exciting episodes Melville saw fit to recall. In fact, he was also intermittently engaged in 1904 and 1905 in assessing the strength of Russian exile movements; but to go into detail, even in a confidential memoir intended for War Office eyes only, at the end of 1917 with the new Bolshevik Government in Russia, would perhaps have been incautious. As Melville dictated his memoir in 1917 some of the people he had pursued over the years were already in positions of power. Burtsev was, of all things, Chief of Police in Petrograd (formerly St Petersburg). As for Lenin, Melville was keeping quiet, but Herbert Fitch, then a detective constable attached to Special Branch, later related a tale concerning the Bolshevik's visit to London in April/May 1905 to attend the 3rd Congress of the Russian Social Democratic Labour Party.

Fitch, who had joined Special Branch when Melville was at its head, worked on numerous cases where Special Branch and the Secret Service had a joint involvement. He seems to have been particularly useful in situations where his multilingualism enabled him to observe and report on the activities of foreign nationals. Although prone to embellishment, Fitch's account of this episode is actually corroborated in its essential details by a number of other sources.
²⁵
According to Fitch, he was detailed to shadow Lenin and other delegates, who held covert meetings in a number of public houses in Islington and Great Portland Street.
²⁶
Although Fitch does not refer to Melville by name, he makes it clear that the man he was writing about had left the Yard, yet is still in a position to call on Special Branch men when he needs them. The public houses he refers to are not specifically named, although the description of one in particular fits that of what was, at the time, the Duke of Sussex in Islington. In fact, a typed list of addresses compiled by Melville in April 1905 includes, ‘The Duke of Sussex, 106 Islington High Street; The Cock Tavern, 27 Great Portland Street and The White Lion, 25 Islington High Street'.
²⁷

In his own memoir, Melville's lips remained sealed – except for a brief reference to how the Russo-Japanese War had caused ‘severe political tension' between Britain and Russia, resulting in a decision, ‘to get in touch with Poles, nihilist and other discontented Russian elements' in Britain. As a consequence, Melville had written to an anarchist leader, a Pole called Karskii, claiming to be ‘an American of Polish sympathies', requesting a meeting at the Charing Cross Hotel. To his dismay, Karskii insisted on the Nihilist Club, where everyone knew Melville by sight and knew who he was. He turned up anyway, deeply suspicious and full of trepidation. Melville found Karskii, ‘awaiting me at the entrance… when he opened the door off the entrance hall, the odour of garlic and pickled herrings smothered everything'.
²⁸
Karskii, who was ‘a born conspirator, taciturn and mysterious even to his immediate colleagues' spoke to him alone for some time before ushering him out, unseen, by the back door. The interview was rather too successful, for it was followed up by others in less compromising surroundings and quite soon Melville found himself discussing plans to land men on the Polish coast and start a revolution. At this point, unsurprisingly