M (30 page)

Helm, ‘a young man of soldierly appearance', appeared a couple of times at Fareham Police Court to packed houses, with admission by ticket only.
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The prosecution insisted that the sketches could be ‘worked up'. Chief witness Miss Wodehouse accused a newspaper reporter of tricking her into giving an interview by claiming to be from the War Office. The German Embassy had engaged the famous barrister Travers Humphreys to put Helm's case: that he was just a young pup, keen on playing soldiers, and obsessively keen on putting things down in his notebook. These included a description of a vicar on a train and measurements of the distance between his chest of drawers and the bed. There were also poems and stories. For the prosecution, Colonel Twiss of the General Staff sneered that he would omit translating the poetry to the court. The public gallery tittered. A former officer from the boarding house at Streatham had heard from Helm about his impending trip to Chatham. The evidence was mounting up strongly on the defence side, and when Helm was bailed to appear at Winchester Assizes the more serious part of the charge, about intent to communicate to a foreign power, was dropped; he was now charged with a misdemeanour only. His appearances at Winchester in November resulted in a guilty verdict and a binding-over. He was free to go back to Germany. The judge told him he hoped he would leave with a good impression of British justice.
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No doubt he did, although Colonel Twiss may have put him off keeping a notebook for ever. Kell travelled back to London in the same railway compartment as Helm and his father and noted that they did not say much to each other.

Thanks to Helm, the weaknesses of the 1889 Official Secrets Act had become apparent. Work to amend it had begun, but had not passed through Parliament before the first genuine spy was unmasked. He was working for Steinhauer, known to him as ‘R.H. Peterssen', in Rotterdam, but he was barely more professional than Helm.

His name was Dr Max Schultz.
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He was a thirty-one-yearold doctor of philosophy claiming (falsely) to be an officer in a German Hussar regiment, and in the summer of 1911 he took a houseboat at Plymouth, hoisted the German flag, and proceeded, with another man as companion, to entertain young naval officers. The wine flowed freely and quite a little social scene developed, although the sailors preferred not to talk shop. One of the guests was a local solicitor, Mr Duff, who arrived with his friend Mr Tannen. They enjoyed Schultz's company, although he often turned the conversation to matters of naval defence. Finally Schultz took Duff and Tannen aside. Schultz was a correspondent for a continental ‘Government' newspaper, he said; it would pay well for accurate and specific information on naval topics but he couldn't very well collect this himself. As a German, he could hardly approach his young English officer friends because they would think he was spying. But an English solicitor – now he would be answered freely enough. How about it? He would like Duff to submit reports from here in Plymouth and Tannen from Chatham, Portsmouth and other ports along the South Coast. The monthly retainers offered were extremely generous: £60 to Duff and £50 to Tannen. As to the material, he emphasised again that accuracy was paramount.

Duff and Tannen promised to think about it, did so, and sensibly approached the police who alerted the War Office. Kell and Melville proceeded in the time-honoured way. They told the helpful solicitor and his friend to go ahead and accept, and to keep them posted. Duff signed a ‘contract' with the ‘newspaper' which Schultz forwarded to a Mr Neumann (one of Steinhauer's postbox addresses) at Walthamstow. Duff then received long lists of queries such as

What ships of the 3rd and 2nd divisions of the Home Fleet were put out of service on July 25, or about the end of July, or have reduced their crews, and the reason for so doing? How many officers and men are still aboard, and why is the programme altered?
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Kell and Melville allowed the correspondence to continue while feeding Duff with duff information. At the end of August Kell, supported by a posse of policemen, approached Schultz on the houseboat and identified himself. Schultz was found in possession of a cypher, incriminating letters, and banknotes sent from Germany. He was charged with attempting to procure Duff to commit an offence against Subsection 2, Section 1 of the Official Secrets Act of 1889;
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at the beginning of November he was found guilty at Exeter Assizes and sentenced to twenty-one months' imprisonment.

The case is interesting for several reasons. It was the last major case under the old Official Secrets Act, which required proof of
intent
to spy and warrants to arrest and search which must be signed by the Attorney General himself. And as usual the press reports indicated that only the police were involved. A detective sergeant was credited with intercepting the mail. This was Secret Service policy so that Kell, Melville, and War Office interference with the Royal Mail could remain undercover.
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Most importantly, Schultz's correspondence provided proof that a German network was in existence. Kell had been following leads on this for a long time, and most of them led nowhere. In his diary for 27 July 1910, over a year before the Schultz trial, Kell had noted:

Called on the Home Office and saw Sir E. Troup, who said he would get the necessary warrant signed as soon as possible for watching the following addresses:

1. FA, 74 Poste Restante Berlin C25

2. Berlin. C Postlagernd C 25

3. F Keldermans 98 Boite Postale Aix-la-Chapelle.

The warrant was signed the same afternoon.

‘Watching the following addresses' meant the interception of letters to those places. A couple of weeks later MO5 required copies of further letters and telegrams. The terms were minutely scrutinised before the GPO would accept responsibility. They were within their rights to insist, under the old Act, upon a specific warrant signed at the highest level.

I took the matter over to the Home Office in the afternoon, and Mr Churchill being on leave I left the warrant with Mr Byrne, who said he would ask Sir Edward Grey to sign it that afternoon.
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The ‘Neumann' address used by Schultz was that of a German barber called Kronauer whom Steinhauer had recruited to receive mail and post it onward. Soon afterwards came the discovery of a second clearing-house for mail run by another barber, an Englishman born in Hoxton to German parents whose name was Karl Gustav Ernst. There are at least two versions of how the network was revealed and both are probably true. The first is the official version compiled at some time after 1931 from SSB files. It was released by the Public Record Office in November 2002 and reads in part:

In August 1911 Francis Holstein, proprietor of the Peacock Hotel, Trinity, Leith, received a letter from Germany, asking for information about the feeling of this country with regard to a war with Germany and its preparedness for such a war. This letter was discussed in a railway carriage in the presence of an officer of the security service. Enquiries were made, and it was discovered that Holstein had received two previous letters of the same nature in June and August 1909 and that they were signed ‘F Reimers, [an alias of Steinhauer] Brauerstrasse, Potsdam.' This name and address were put under special censorship on the 14th September 1911, and by this means the ramifications of Steinhauer's organisation were brought to light.
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On the other hand, why was the officer sharing a railway compartment with a German hotelkeeper, and presumably at least one other German, unless the man was already under surveillance? Leith is the port for Edinburgh, opening onto the Firth of Forth.

A different account has a German naval officer in the entourage of the Kaiser being watched at a London address.
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Late one evening this man drove away in mufti from the house where he was staying. He was followed, again by an unnamed shadow, to ‘a small shop, already closed for the night' where ‘the side door opened as soon as the car stopped, and he went straight in without knocking'.
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This was at 402a Caledonian Road, where Ernst was getting a regular £1 a month from Germany.

Armed with a warrant to copy all incoming and outgoing mail, Kell and Melville could collect the names of correspondents in England who were in contact with Steinhauer's cover addresses abroad. They could also manipulate the intelligence trickle from Ernst and Kronauer however they wished.

As it turned out, Ernst's shop would gain some traffic after the ‘Neumann' (Kronauer) address was exposed by the Schultz trial. Ernst's fee would rise to £1 10s a week, plus expenses and an occasional ‘honorarium' of £5.

Soon afterwards there came a third lead, this time to a friend of Ernst and Kronauer called Kruger living in Mountain Ash, a small town far inland in South Wales. Steinhauer generally had no interest in Germans outside the main ports and London, but through this contact he succeeded in recruiting Kruger's nephew – a serving British naval officer called Ireland. By now SSB were aware, thanks to mail interceptions, that Steinhauer was in Britain:

A report dated December 1911 states that a German officer was found to be travelling through various counties and devoting much attention to maps and plans, but that he returned hurriedly to Germany before sufficient evidence could be collected to justify his arrest. Evidence that this was Steinhauer is to be found in the ‘Reimers' letters. He evidently came to London and saw Ernst and Kronauer and then went north. On 30th December he wired to Kronauer from Rothesay under the name ‘MacMillan', telling him to keep his letters until his return, and he wired again from Glasgow on 2nd January saying he would be in town on the third. He wrote to Kruger from Germany on 13th January saying that he expected to return before the end of the month, and to Kronauer on 22nd January he stated that he had left in a hurry as he feared he was being shadowed.

On 23rd February 1912, after the arrest of Ireland, Steinhauer wrote to Ernst, urging him to be very cautious in communicating with Kruger, who would be watched…
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Steinhauer used not only Reimers and Peterssen as aliases, but also Stein, Schmidt, Reimann, Tornow, Torner, Dinger, Tobler, Fritsches and others. He also used disguise, and would dress up as an elderly solicitor from the continent (‘big round glasses, black suit and a hand bag beyond suspicion') bearing information about a huge inheritance owed to lost German relatives in an English port. There he would accost a local policeman.

It was easy for them to get a list of the foreigners in the town, and just as agreeable – with the reward in view – to meet me an evening or two later in the corner of some restaurant with a bottle of whisky and a few nice cigars to help along the discussion.
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This, before about 1910, led him into the British homes of a number of people who were afterwards persuaded, by a cautious follow-up letter, to work for the Fatherland. Kronauer had been on his books since about 1908 and Ernst since 1910.
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Kell fitted in. If he needed a signature or a decision he could wriggle swiftly upstream through the bureaucracy to the highest level because he had been to the right schools, came of the right class. (It has been suggested that he may have known Churchill at Sandhurst.)
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His predecessors in military intelligence, Davies and Trotter, had both moved on and were generals now. He, however, would never willingly release the reins of the Secret Service Bureau. It was a fascinating job, although he was frustrated by officials who were not, as he was, professionally vigilant. When, for instance, in October 1910 he discovered that the Lepel Wireless Company employee at Slough who habitually sent messages to Berlin was also able to intercept wireless communications from the Admiralty, he pointed out the security risk to the GPO Wireless Officer who ‘did not think any harm could arise'.
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Kell owed a great deal to Melville. The older man, lacking the social background required for acceptance into the Edwardian mandarin class, taught him tradecraft and discretion, patience and wariness. Melville also had a sense of proportion that Kell seems sometimes to have lacked: mostly, as Kell's journal shows, his reports on ‘suspects' were negative.

Kell, however, had an agenda that transcended petty issues of guilt or innocence. He was busy grinding down opposition to a register of aliens. Since this was not so far permissible he made do with an alien returns form of his own devising, which was circulated to chief constables in the winter of 1910-11. There were a few grumbles and raised eyebrows; but this, with other lists compiled from regional or professional records (for instance, German zinc-workers in Hartlepool) and individual reports from members of the public, formed the basis of an index that held up to 30,000 names by the start of the war.
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The idea was sound, given the political circumstances, though the form it took seems somehow less so.

The Central Registry was a card index in which the subjects were classified on a bizarre scale that ran from AA for the least dangerous to BB for the most. AA was Absolutely Anglicised or Absolutely Allied, denoting somebody who was definitely supportive of the British cause. A was Anglicised or Allied, i.e. supportive. AB was Anglo-Boche –allegiances unclear, but probably pro-British. BA was Boche-Anglo – allegiances also unclear, but probably pro- German. B was Boche, i.e. hostile. Where a subject's hostility to the British cause was not in doubt, he or she was graded BB, or Bad Boche.
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Extra staff were gradually being brought on board. And then there was the technology.

Last week I asked M to look out for a good pocket-camera, which I think is indispensable for our work. M now writes that he considers the Ensignette camera (with an extra good lens) is the best for our purposes. I went to the Stores to inspect one and I quite agree. I have therefore authorised M to get one, price £3 10s.
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