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In preparation for his planned visit to Wales, Owens asked MI5 to
intercept
any letters arriving for him care of the Expanded Metal Company as these would contain the names and addresses of various agencies abroad which acted as ‘spy bases’. Owens was also concerned for the safety of his flat while he was away, the presence of the girl spotted hanging about earlier made him very nervous and he asked that during his absence his flat should be watched.

Owens’ trip to Swansea went well and he fulfilled his chief objective, to meet and approve Gwilym Williams, MI5’s nominee for the proposed Welsh Nationalist agent who was codenamed G.W., and his friend W.W., both of whom Owens considered eminently suitable for the job. He also took the opportunity to have a drink at a pub in Pontardawe, not far from where he had been born, and he later reported being surprised to hear two people in the pub discussing the cost of living in Belgium, immediately jumping to the conclusion that one of them was a German spy trying to recruit the other who was a member of the Welsh Nationalist Party. On the following day the trio drove along the South Wales coast looking for places where a submarine might drop off arms and sabotage material and they all agreed that Oxwich Bay was the most suitable site. Content that the foundations had been laid for a sabotage organisation to wreak mayhem in the principality, the strange and uneasy partnership of S
NOW
and MI5 was ready to entrap Dr Rantzau.

B
Y
O
CTOBER
1939 the exchange of signals between Hamburg and the little flat in Kingston was well established, and Owens had even put Lily to work helping to decode the messages. She became so proficient that in some cases she had a better understanding of the system than either Owens or his MI5 wireless operator Maurice Burton. On one occasion she
successfully
worked out that the Germans had made a mistake and used the code for the second day of October when it was in fact the third.

One morning there was a knock on the door of the flat and a tall,
thin-faced
man wearing a hat and glasses asked, in a slight American accent, ‘Are you in touch with the Doctor?’ Owens confirmed that he was, and the man demanded to know Owens’ telephone number. Owens explained that he had ordered a phone but was still waiting for the instrument to be installed, whereupon the man responded by saying that he would call back again, and that Owens could expect to be contacted in the streets or in a public house.

This unexpected incident demonstrated to MI5 that the Abwehr had the resources to operate independently in London, and even maintain a watch on Owens. There was a suspicion about the identity of this mysterious agent, but although a discreet alert was circulated to trace him, he was never found. Undeterred, MI5 proceeded with the preparations for the next step, Owens’ mission to introduce the Welsh Nationalist and saboteur, Gwilym Williams, to Rantzau.

Placing another agent close to Owens had the benefit, from MI5’s
perspective
, of providing an independent channel to report on his activities, far more reliable than surveillance and submissions made by those in whom he had confided. This role had been assigned to Gwilym Williams, codenamed G.W. by MI5, and shortly before their scheduled departure for the continent Williams travelled to London so that he and S
NOW
could spend some time together, and Owens could brief his companion on what to expect. Upon his
arrival, Williams was met by Owens in a chauffeur-driven Daimler and, with the glass partition closed, Owens explained that they would be meeting ‘the Doctor’ who, he said, was in charge of the German Secret Service. Williams had been instructed to play up his cover, that as a retiree he now worked as a private enquiry agent investigating road accidents, an occupation that had led him to travel around Wales where he had witnessed the oppressive working conditions of the people and English exploitation. He should, he was told, dwell on his Welsh Nationalist political convictions, and appear pro-German.

To Williams’ surprise, Owens told him that he should not be too surprised if the Germans addressed him as ‘Colonel’, asserting that he held that rank in the German army. Naturally, Williams did not know quite what to make of this extraordinary claim and tried to make a joke of it, saying that it must be difficult given that Owens did not speak German. ‘Oh’ said Owens quickly, ‘they call me Colonel’. Changing the subject, Owens warned Williams that he was likely to be questioned about the locations of ammunition factories, oil refineries and steel works in Wales.

Owens told him that he might be expected to point out suitable
landing-sites
for U-boats on an Ordnance Survey map, and Williams said that he would attribute his knowledge to what he had heard from local fishermen. Owens concluded by telling him to show his approval of the project and to express his gratitude for anything that the Germans might send in the way of arms, explosives and money.

When they arrived at Owens’ flat in Richmond, at 22 Cardigan Road, Williams was shown the transmitter and, on throwing the power switch, heard some very rapid Morse which Owens claimed was a transmission from Germany. Williams had asked if his host read Morse, and Owens claimed that he did, saying ‘but they send it very slowly for my benefit’.

Owens then introduced Williams to Lily and took them to the Castle Hotel in Richmond, and later to a dance hall. During this encounter Williams and Lily got on very well together, and she described him as a grand man. However, Owens drank heavily all evening, enjoying whisky chasers with his beer, and at half past nine they made their way back to the flat for the nightly transmission. Williams was surprised that, despite all the alcohol he had consumed, Owens remained clear-headed, and he would later report that Owens possessed an extremely quick mentality and tremendous will-power.

The next morning Williams and Owens met in Trafalgar Square and spent
the rest of the day preparing for their mission, acquiring visas and passport photographs. Then, on 19 October, the pair sailed from Folkestone for Ostend, their cover being a business trip on behalf of the Owens Battery Equipment Company. After arriving in Ostend they went on to Brussels where they were contacted by Dr Rantzau who told them to travel to
Antwerp
. Here Williams was introduced to Rantzau who was accompanied by a man known only as the Commander, who was said to be in charge of sabotage in the British Isles, and had travelled from Berlin to discuss the Welsh Nationalists with Williams.

After congratulating Owens on the quality of the information he had provided, Rantzau remarked that he liked Lily because ‘she is on the side the money comes from’. Williams was then taken away and interviewed by the Commander who revealed that the Irish Republican Army was going to be run by the Germans. This was a curious disclosure, but not entirely surprising. Shortly before the war the IRA had mounted a campaign setting letterboxes alight, and it was to be expected that the Abwehr might try to create an alliance with republican extremists in Ireland. The Irish authorities had also anticipated such a development, but Williams’ report was the first direct confirmation that the Abwehr was actively promoting the liaison.

The first item on the agenda for Dr Rantzau was the proposed U-boat landing-site at Oxwich Bay, and it was decided that it would be better to travel round the north of Scotland to reach the destination rather than risk the Bristol Channel. By consent it was agreed that the submarines would wait about a quarter of a mile out to sea and a motor boat would be used to collect the explosives.

Previously, it had been suggested to Owens that explosives and
propaganda
leaflets printed in Welsh might be delivered to Wales by parachute, but Owens had declined the offer. The Commander had also confided that he could smuggle explosives into England on neutral ships through
Liverpool
, and Williams had responded by saying that he had about thirty men in South Wales who were ready to carry out acts of sabotage and further the German cause. The discussion had then turned to the possibility of these men acquiring jobs in factories in England where they could carry out sabotage, and the Commander had observed that such incidents would have a psychological effect as well as causing some physical damage. He had expressed the hope that this might bring those responsible for the conduct of the war in Britain to a state of mind where they might be willing to listen to reason.

Part of the plan, it was explained, was to school Williams in the
preparation
of chemicals to make explosives, based on a mixture of three parts potassium-chlorate to one part sugar, which would be ignited by
concentrated
sulphuric acid. Williams was given various instruments for weighing and measuring these ingredients, after which the Commander gave him a demonstration.

In addition, Williams was instructed to take up stamp-collecting as a means of concealing microdot communications, a method of reducing a photograph to a tiny size so it could be concealed in an otherwise innocuous item that would go unchallenged in the regular mails. Owens was given several microdots, and on one of them was the name of a man who lived in Liverpool and, it was claimed, was a Fellow of the Royal Photographic Society. The others contained detailed instructions about how they were to send information out of Britain by sticking these microdots onto the back of postage stamps.

At that time, the use of microdots for concealing clandestine
communications
was quite an innovation and one relatively unknown to MI5, so this intelligence would prove exceptionally valuable to the Security Service whose counter-espionage division was in a relatively embryonic state.

Whilst Owens was in Brussels the subject of money had come up. Told that a woman in Bournemouth was to be his paymaster, he was handed £500 and Williams £250, and Owens was also offered £20,000 in U.S. dollar bills for the Welsh Nationalists. Owens declined the foreign currency, as he said it would be too dangerous to handle in England because of the difficulty in exchanging dollars, but he suggested that the money should be paid into a bank account so he could pay the Welsh saboteurs in English currency. Finally, the meeting ended with instructions about changes to the wireless frequencies. Like Owens, Williams was to be given a short-range transmitter and was told to brush up on his Morse code so that he could contact the U-boat when it arrived. Owens was to remain the general organiser of agents and the only radio link between the United Kingdom and Germany. They were also told that a man coming over to meet other agents in Britain would visit Williams. Then, out of the blue, Dr Rantzau announced that he was contemplating coming over to Britain himself.

Guy Liddell, the Director of MI5’s B Division, recorded the progress of the S
NOW
case in a personal diary he kept every day during the war. On the return of Owens and Williams he noted that the case looked promising, with Gwilym Williams starting a stamp business so that the Germans could
send messages on the backs of stamps. Owens was also to offer £50,000 to anyone who could fly ‘one of our latest aircraft to Germany’.

Liddell had also received a visit from Brigadier Kevin Martin, the Deputy Director of Military Intelligence at the War Office, who had been in contact with a representative of the
News Chronicle
reporting what he thought was an illicit wireless station. Martin wanted to trace the transmitter and then announce this success in the press, but Liddell was of the opinion that the Germans should be encouraged to think that MI5 was grossly inefficient, because if they thought that MI5 was capable of tracing these broadcasts then they would wonder how S
NOW
’s messages were managing to get through. In fact, it was perfectly possible that the messages detected by the
News Chronicle
were Owens’ own nightly signals.

On their return to London all the banknotes were taken away by MI5 and the serial numbers checked to determine their origin before being restored to the two spies. During his debriefing, Owens revealed that he believed there was a German agent in the Air Ministry and one in the Admiralty, but did not know their identities. He also brought with him wooden slabs containing detonators and, perhaps most important of all, the microdots which contained the details of the German agent operating in the Manchester area.

On 4 November 1939 MI5’s Richman Stopford, adopting the alias of Mr A. Head, went to Manchester to interview one of three brothers with the surname Eschborn. According to Stopford’s preliminary research, two of them lived in Britain and the third was still in Germany. The man Stopford met was codenamed C
HARLIE
by MI5 and, according to his official file, he was 5’10’ or 11’, stout, with a round face, pale complexion, clean-shaven, dark hair, brown eyes, straight nose and looked like a respectable
businessman
. He was of a nervous disposition and Stopford succeeded in thoroughly frightening him by revealing that the Security Service knew everything about him and his family. The reason that C
HARLIE
was working for the Germans, or so he claimed, was that they had threatened to harm his brother Hans, still in Germany, if he did not do what they told him. Now Stopford explained that if he did not co-operate with MI5 his other brother in England, who like C
HARLIE
was working for Germany, would be ‘put inside’. Stopford also instructed him not to breathe a word of their conversation to anyone or he would make sure that a copy of his confession fell into the hands of the German Secret Services.

C
HARLIE
assured Stopford that he was entirely British in his sympathies as he had lived in England nearly all his life, and would be happy to help MI5. Stopford was confident that C
HARLIE
was indeed an unwilling agent who had been frightened into working for the Nazis. The reason the
Germans
found him such a useful agent was that he had a British passport and therefore enjoyed freedom of movement, and because of his expertise in photography. C
HARLIE
confessed that his German controller had asked him whether he could reduce photographs to a size small enough to fit on the back of a stamp. He also admitted that his contact, whom he named as Georg Hansen, had told him to expect a visit from a German agent who would introduce himself by mentioning his family. Stopford told C
HARLIE
that if he was contacted by a German agent he was to carry on acting as if he was working for them, but that he should contact MI5 with a simple letter mentioning that ‘Mr Roberts’ had been to see him.

MI5 decided to cement the relationship with C
HARLIE
by sending Owens to Manchester to make contact with him. Owens was instructed to get in touch via the Manchester Photographic Society, rather than going directly to C
HARLIE
’s house, in case he was being watched. On his mission to
Manchester
to approach C
HARLIE
, Owens would use the name ‘Thomas Graham’, but would register at his hotel under the name of Thomas Wilson, an alias he occasionally adopted. He was to tell C
HARLIE
that if he wanted to make contact he could do so through a cover address, at British Colombia House in London. ‘Graham’ was also to tell C
HARLIE
that he must not jeopardise his position in any way, and that this included trying to obtain information from the War Office. This warning was based on a claim made previously by C
HARLIE
to the Abwehr while on a visit to Cologne, when he had told the Germans that he could get information from such a source.