M (28 page)

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.
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There was another new man, H.C. Bywater, a British subject, naval expert and sometime
Daily Telegraph
correspondent, spying for the Navy at Kiel.
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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.
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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.
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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.
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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 Admiralty
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) – while paying, for instance, a regular £1,000 p.a. for its own Secret Service to the Constantinople Embassy alone.
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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.
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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,
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and was already working with Melville. In the file is a document dated 8 October 1908 which sets out his ideas:
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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.
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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)
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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…)
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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.

Information may hibernate in our minds for decades until the moment comes when we can retrieve it to our advantage. On the other hand, an inescapable fact from the past may arise unbidden and unwelcome, representing a threat.

In 1902, when Melville was in his last eighteen months of office as Superintendent of Special Branch and the Boer War was drawing to a close, the Home Office was approached by the German Embassy with a request for information. In March of that year Melville filed a report on the object of their enquiry, Farlow Kaulitz. Kaulitz was a journalist born of a German father and English mother, and brought up in Germany. He had spent three years in a Prussian prison for
lèse majesté
and being rude about Bismarck in the
Basler Nachrichten
and had been expelled from France in 1898 because, as that paper's Paris correspondent, he challenged the French Government over the Dreyfus affair.
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Interviewed by police at Victoria Station on arrival, he seems to have been perfectly frank about all this, and was allowed to go about his business. He took furnished rooms at first in 25 Bessborough Street, Pimlico, and worked as a journalist. Quite soon he had set himself up as a continental press agency. He employed a couple of assistants to hang around Fleet Street from 8.00 p.m. until 4.00 a.m. getting items from the wire services and newspaper offices – especially concerning the war in South Africa. When a newsworthy item became available Kaulitz's man would hand it to his assistant, who would leap onto his bicycle and race back to Bessborough Street with the wire.

This early information gave Kaulitz a good start and pretty soon he was able to take a whole Pimlico house at 31 St George's Square and install an expensive Exchange Telegraph Column Printing Instrument. This meant simultaneous transmission direct from a big agency and Kaulitz had prospered ever since; so much so that by the end of 1901 he had moved into 44 Temple Chambers, Temple Avenue, on the City borders. The building backs onto King's Bench Walk, within the enclave of Temple, a foundation of ancient origin where barristers from two Inns of Court (the Inner Temple and the Middle Temple) have their chambers.

It was Special Branch practice to intercept mail or telegrams which might be of interest, and since the German Embassy wanted to know about Kaulitz, Melville instructed his officers to get hold of any messages to or from South Africa. He was interested to discover that normal GPO deliveries excluded Temple Chambers. Messages in the immediate vicinity were instead received and distributed by the Eastern Telegraph Company of Electra House, Finsbury Pavement. Inspectors Quinn and Walsh called at the company's offices only to be firmly informed by the Assistant Secretary that ‘no information could be given respecting telegrams or those who send or receive them'.
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Since Special Branch was in no position legally to demand access to another person's mail, that was that. The War Office, to which Quinn next had recourse, informed him that it was improbable that Kaulitz could be getting cables direct without attracting the attention of the military authorities. There the trail ended, and whether or not the Government passed on all the information to the German Embassy is unknown. Melville noticed the security of Temple, however, and retained it for future reference.

In 1906 his son James set out upon the path which would lead him to political prominence. After an unpromising start (he had left school to join the Eagle Insurance Company like his siblings) he had worked for several years for the rising barrister Douglas Hogg. Now, still only twenty-one, he was called to the Bar of the Middle Temple. The buildings of this Inn are slightly west of the grassy square, shaded by majestic trees, that is at the heart of the Inner Temple.

In October of 1909 Cumming noted at a meeting that Edmonds and MacDonogh ‘said they were going to keep M (the best man we have at present) in an office of his own, to which letters could be addressed'. Melville's friend at the Royal Mail, Henry Freeman Pannett, whose two future sons-in-law had been witnesses at Sidney Reilly's wedding, retired in 1908. From now on, how sure could Melville be that his own correspondence would not be tampered with?

After five years at 25 Victoria Street, the office of W.G. Morgan moved to the more discreet environment of Temple Avenue in December 1908. Temple Avenue was not isolated by its postal service alone. Only yards from the bustle of Fleet Street, it was close enough to the gates of Temple itself to be frequented mainly by lawyers who kept regular hours. Unfamiliar faces were remarked by beadles.

In October also, Melville's old acquaintance Sidney Reilly paid the first of several visits to London from St Petersburg where he was now based. ‘Based' is the word to use. Reilly was one of those rare people for whom everywhere is a jumping-off point to the next opportunity. Reilly was staying in Rachkovskii's favourite London haunt – the extremely grand Hotel Cecil next to the Savoy, a few hundred metres along the river from the Temple. He took advantage of his temporary residence to regularise the change of name by deed poll which he had begun before his precipitate departure from England in 1899. He also re-formed the Ozone Preparations Company, which would be run from an office above Saqui and Lawrence, the jewellers, at 97 Fleet Street.

Two days after he filed the deed poll application from his temporary address at the Cecil, it seems that there arose, unbidden and unwelcome, a face from the past. A young woman called Louisa Lewis had been working at the Hotel Cecil for four years. On the evening of 25 October 1908 she was seen, dressed in outdoor clothes and hat, at the bottom of the hotel's imposing marble staircase speaking to a man.

Later, when a search was mounted and the authorities notified, it would have gone unnoticed that Louisa Lewis was the daughter of Alfred Lewis, manager at the London and Paris Hotel, Newhaven; or that she had been working there when the Reverend Thomas was found dead, and had met ‘Dr T.W. Andrew' who signed his death certificate. Neither the death nor the young doctor would easily have been forgotten by a young woman.

The man at the foot of the stairs answered Sidney Reilly's description perfectly. Louisa Lewis was never seen again.
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The Ozone Preparations Company, managed in Rosenblum's (Sidney Reilly's) absence by his partner William Calder, ran for three years and was wound up in 1911. The choice of Fleet Street for its office may be significant; like Farlow Kaulitz earlier in the decade, Sidney Reilly understood that early knowledge can be converted into hard cash. He was at this time working for the St Petersburg agent for Blohm and Voss of Hamburg; in the course of chasing contracts he would place information, and mis-information, in a St Petersburg newspaper. The English wire services at the time physically received news at Fleet Street offices and hardly anywhere else.
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The British Secret Service was also aware how much the slant of international news could influence diplomatic, as well as commercial, events. A 1909 letter to the Ambassador in Peking proves that the Foreign Office subsidised Reuters' office there in order to offer an alternative source of information to the German news going in and out of China.