Snow (2 page)

A
RTHUR
O
WENS WAS
an entrepreneur, inventor and proprietor of a company manufacturing batteries… and an international spy. As the source of an innovative electric storage cell that he had patented, Owens had plenty of clients, and among them was the German Navy, the
Reichsmarine
.

Under the terms of the 1919 Treaty of Versailles, Germany’s navy had been the subject of severe restrictions, and Part V of the agreement imposed a total ban on all German submarines. However, a U-boat construction programme was begun in 1933 and the first vessels were launched in April 1935. This flagrant breach was a matter of great controversy at the Admiralty in London, especially when the naval attaché in Berlin, Gerard Muirhead-Gould, reported that he had been informed that the
Reichsmarine
had started work on twelve U-boats of 250 tons each. Four days later, on 28 April, Prime Minister Ramsay MacDonald made this news known to the House of Commons and he announced that his government would open negotiations to find a permanent formula to regulate the size of what was then the
Reichsmarine
, very soon to be renamed the
Kriegsmarine
.

The Anglo-German Naval Treaty, signed on 17 June 1935 in London by the Foreign Secretary, Sir Sam Hoare, introduced a relaxation of the Versailles terms, allowing the total tonnage of U-boats to reach parity with the Royal Navy. Whereas a ratio of 35:100 was set for the
Reichsmarine
’s overall tonnage, thus allowing the Germans to reach 35 percent of the combined British and Commonwealth fleet, that figure was extended to 45 percent for submarines. Thus the construction project already
underway
in Kiel was legitimised, albeit retrospectively, with the first German submarine hulls to be launched since 1918 having taken to the water two months earlier, in April.

In these circumstances, and suspicious that Adolf Hitler’s regime might breach the terms agreed, the Admiralty in London monitored activity in
the Baltic shipyards and collected information about the size and number of new hulls under construction. Analysis undertaken by the Naval
Intelligence
Division suggested that most of Germany’s submarines were small, 250-ton coastal vessels, but verification of compliance was a priority, and Owens’ business appeared to be in possession of potentially vital data. He often travelled to Hamburg and Kiel, supplying his advanced batteries which extended the underwater duration of the electric motors that powered the U-boats, and these sales were regarded as an accurate method of gauging German plans to expand the
Reichsmarine
’s strength. Accordingly, Owens had been approached to help the Admiralty, and he had readily agreed to assist by handing over the requested sales figures so they could be examined by naval experts.

The NID’s intelligence acquisition project was hardly foolproof, but as part of a much larger jigsaw puzzle, with various different components such as agent reports and visual observations made by naval attachés, it offered an opportunity to develop a reasonably accurate picture of German intentions and, most importantly, distinguish between the development of twenty-two ocean-going U-boats capable of operating in the Atlantic, and the
remainder
, which were suitable only for deployment in the Baltic. The Admiralty’s insight into Germany’s strategic planning came chiefly from a highly reliable SIS agent, Dr Otto Kreuger. A marine engineer, originally from Godesberg, Kreuger had been cashiered in November 1914 when he made the mistake of striking a fellow officer who happened to be related to the Kaiser. Soon afterwards he had approached the British legation in The Hague to volunteer his services, and he was enrolled as TR-16, one of the most important and productive spies of the era. Later he would be appointed a director of the Federation of German Industries, which allowed him a unique insight into his country’s naval planning during the inter-war years, and his reporting only fuelled fears that Hitler and the
Kriegsmarine
had every intention of repudiating the Anglo-German Naval Treaty and dramatically expanding the U-boat fleet with the objective of having no fewer than 249 operational by 1944, when the intention was to pose a realistic challenge to the Royal Navy’s supremacy of the international trade routes.

Under normal circumstances, Owens’ contribution to this covert
assessment
would have gone undisclosed, but the duplicitous Welshman had decided to play a double game by revealing his role for the Admiralty to the very Germans he was engaged in spying on. His offer was accepted with enthusiasm by the Germans who gave him a cover-address in Hamburg so
he could mail letters written in a primitive code, intended to convey details of his travel plans and similar information. However, neither he nor his German controllers were aware that the suggested post-box number had been compromised months earlier by another spy, Christopher Draper. A former First World War air-ace who had developed a relationship with the Abwehr with the approval of the Security Service, MI5, Draper had been tempted by a newspaper advertisement to post letters containing supposedly helpful information to Postfach 629, Hamburg. Draper had reported this attempt to MI5 and consequently the details had been placed on a watch-list which meant that the GPO intercepted and copied every item sent to it. One of those examined was Owens’ very first letter to Hamburg, apparently arranging to meet a Mr Sanders ‘in order to discuss his work’. Instantly this alerted MI5 to the fact that Owens was in direct contact with the Germans, and had failed to declare this link to his handlers in London.

Agents such as Owens, who were in possession of information of potential value to the Admiralty, were routinely run by experienced Secret
Intelligence
Service personnel who then relayed the agent reports to their NID colleagues. But by failing to mention that he had opened up a channel to the Abwehr, Owens had unwittingly brought himself to the attention of the country’s counter-intelligence organisation, MI5.

The moment Owens’ correspondence was examined, and revealed an illicit, undeclared relationship with a German contact, he became an
espionage
suspect. MI5 checked to see if there had been any previous contact with Owens and discovered that he had been stopped by customs once because he had a foreign camera, at which point Owens had claimed that he was employed by the British Secret Service. On 9 January Scotland Yard
contacted
Naval Intelligence where Owens claimed to be ‘on the books’. They confirmed that Owens had been known to Mr Fletcher of D.E.E. Admiralty for some considerable time and had frequently given him German technical information. He had also told Fletcher that he would like to work for the British Government as he frequently visited Germany.

MI5 and the Abwehr shared uncertain histories; neither had performed particularly well during the 1930s and neither had the complete trust of their political masters. MI5 was a small organisation, largely manned by a mix of old army officers and debutantes. It had been involved in a series of bungles during the 1920s and 1930s and would begin the war disastrously, completely unprepared for its vastly increased role. The Abwehr had been set up in 1921, taking its name, which means simply ‘defence’ in German,
as a sop to the stringent restrictions imposed by the Versailles Treaty, which prevented Germany mounting any offensive military activity. By 1936 it was already entangled in a long and ultimately unsuccessful turf war with the Nazi Party’s internal intelligence and security service, the Sicherheitsdienst.

So Owens’ indiscretions in Germany resulted in a transfer of
responsibility
for the Welshman from SIS to MI5 in October 1936, and he was placed under surveillance. In charge of his case was Major Edward Hinchley-Cooke, a German-speaking counter-espionage expert who had learned his trade by posing as an enemy prisoner of war in various POW camps, collecting
information
in the role of a stool-pigeon. In the very early stages of his enquiries, he received a description of Arthur Owens from Colonel Edward Peal, an SIS colleague:

During the course of MI5’s investigation, the organisation acquired plenty of information about Owens and his background. He was the proprietor of the Electric Battery Department of the Expanded Metal Company, based at Burwood House, Caxton Street, Westminster, a company engaged in the manufacture of batteries. His full name was Arthur Graham Owens and he had been born in Graig Road, Cilybebyll, near Pontardawe in South Wales on 14 April 1899, the son of William Thomas Owens, a master plumber and occasional inventor, and his wife Ada.

According to his Owens’ own version, he had served in the Royal Flying Corps and had flown a Sopwith Camel. He also claimed that, with his father and brother Frederick, he had invented a special anti-aircraft artillery shell that had been designed to bring down Zeppelins, but that the British government had ensured that they made no money from it. This perceived slight was to make him very bitter and thereafter he held a grudge against the authorities in London.

MI5 took the decision to extend the mail cover and examine letters sent to the Welshman at his office in an effort to ‘ascertain the nature of his
activities’. One of the first letters intercepted had been posted in Germany by a ‘Mr L. Sanders’. Dated 15 September 1936, it instructed Owens to make his way to the Minerva Hotel in Cologne so a meeting could be held ‘in order to discuss the different contemplated matters’. This development prompted a wider surveillance operation, and immigration officers at Dover were requested to ‘scrutinize discreetly the passports of all British subjects embarking on the morning boat to Ostend and if they come across the name of Owens to memorise as many particulars of his passport without arousing any suspicion’. Sure enough, Owens was among the cross-Channel
travellers
, and was carrying a Canadian passport.

Once he had left the country MI5 sent a Special Branch detective to his London home to conduct what were represented as routine enquiries. Owens’ wife Jessie was interviewed and declared that her husband was on a visit to West Hartlepool. Her own background was unremarkable, and she had married Owens in Bristol in September 1919 when she was aged twenty. The following year they had moved to Swansea where she had given birth to Graham Robert Owens. At the time, Arthur was combining his skills as a chemist and a salesman to run a confectionery shop in Lime Kiln Road, in the Mumbles district of Swansea.

A year later, on 29 October 1921, the couple and their baby son had joined the Cunard liner
Scythia
in Liverpool, bound for Halifax in Canada, and established themselves in Golden, British Columbia, where in
January
1925 Jessie gave birth to a daughter they named Patricia. The family remained in Canada for thirteen years, with Owens working as a teacher and as a public utility engineer before moving to Toronto where, with money inherited from his father, he opened a battery business. Using his skills as a qualified chemist, Owens developed his innovative electric accumulators. Between 1928 and 1929 he registered several patents for dry cell
batteries
that he had initially intended for use in flashlights; however he soon realised their portability gave them plenty of other applications. Although his invention seemed to offer great potential, Owens came to realise, as his inheritance dwindled, that he would have to return to England to attract interest and begin large-scale manufacturing. Accordingly, on 7 January 1934, Owens boarded the Red Star Line ship
Pennland
. On the passenger list Owens described himself as a research engineer and gives his intended destination as the Grosvenor House Hotel in Park Lane, one of Mayfair’s most exclusive addresses. Later he would move his family into a rented flat in Sloane Avenue Mansions.

Once in London, Owens sought the financial backing he needed for his newly-formed Owens Battery Company, and found an investor with Hans Hamilton who headed the Expanded Metal Company, which was in the same field and had acquired the rights to an invention by Herbert Williams which employed expanded sheets of lead in accumulators. Actually, Owens warned against the use of the lead sheets in his batteries but Expanded Metal ignored his advice and sold them to the Royal Navy to power diesel-electric submarine motors. However, just as Owens had predicted, these lead plates proved too weak and the batteries failed, thereby ruining his hopes of future lucrative contracts from the Admiralty.

Owens’ growing financial problems may have been at the heart of his decision to develop a clandestine relationship with the Germans, and it is believed that during the summer of 1936, while on a business trip to Belgium, he approached the German embassy and volunteered to provide them with information. The only knowledge that he possessed of value, apart from his technical understanding of the chemistry behind his
batteries
, was his role as an informant for the Naval Intelligence Division. Having been recruited as a source of reporting about the
Kriegsmarine
’s building programme, picked up regularly while touring the shipyards of Hamburg, Bremerhaven and Kiel, his role, and the detail of his
observations
, would have been of intense interest to the Abwehr’s naval branch. However, the Welshman’s entry into the clandestine world had been
spotted
at the outset by the British.