(3) We should only consent to pool our staff with that of the War Office on condition that Commander A. G. Denniston is placed in charge of the new Department. I do not say this on account of any jealousy of the War Office, or any reluctance to accept a War Office man, but because no one who has not been trained in the conditions under which we have had to work could meet the requirements of the Admiralty in time of war. Our work has been done in face of the enemy and always against time. The messages we have had to decipher were from ships at sea, engaged in actual operations, or from airships also operating. We have had to master a new key every morning before we could begin to read the messages, and sometimes we have had to grapple with two or three keys in one day!
(4) This has of necessity developed a particular kind of aptitude for the work, which depends for its success more on a study of the psychology of the persons sending out the messages and a sort of instinctive ‘flair’ for the kind of things they are saying, than upon careful study and analysis for which there is no time.
In the War Office they have dealt with cables which are far more accurate than wireless, and have never had to work against time, and the aptitude they have developed is different from - I do not for a moment suggest it is inferior to that which the conditions of our work have produced.
Denniston is not only the best man we have had, but he is the only one we have left with special genius for this work. We shall not be able to retain him in a subordinate capacity, and no advantages of concentration and co-operation with the War Office would compensate us for the loss of his services. If the War Office people are not willing to accept this condition, we should prefer to retain our staff in the Admiralty, but should of course co-operate with them in every other way that is possible.
RECORD OF A MEETING HELD AT THE ADMIRALTY ON 8 May 1919
TO CONSIDER THE FORMATION OF A CODE & CYPHER SCHOOL
Present.
Commodore H. P. Sinclair C.B., R.N. – Director of Naval Intelligence
Earl of Drogheda - Foreign Office.
Captain R. L. Nicholson D.S.O., R.N. - Director of Signal Division
Captain W. M. James C.B., R.N. - Deputy Director of Naval Intelligence
Lt. Colonel W. E. Wynn O.B.E. - Air Intelligence.
Commander B. Buxton D.S.O. - Admiralty.
Mr. A. P. Waterfield - Treasury. .
Major M. V. Hay, Reserve of Officers.
Major H. E. Franklin, D.S.O., M.C.
The meeting considered the proposals contained in the report of the first meeting of the committee held on 2nd May.
Major Hay stated that in regard to the proposed organisation he did not consider that an Assistant Head was necessary for the Code & Cypher School, first because he did not think there would be enough work for him to do and secondly because of the difficulties in regard to the personnel that such an appointment would give rise to. Commodore Sinclair pointed out that it was not desired to discuss the question of personnel at the present juncture. Captain Nicholson stated that in his opinion an Assistant Head of the organisation was necessary because he did not think any one man could efficiently supervise the work of both the constructive and destructive sides, and also that an Assistant Head would be necessary to supervise the instructional work that it was proposed, to carry out in connection with the organisation and also to keep the research side in close touch with the constructive side.
After some discussion it was proposed that an Assistant Head should not be appointed but that the Head of the Construction side should act as the Assistant or Deputy Head of the Code & Cypher School and that a suitable officer should be selected accordingly with a slightly increased salary to that of the first class officials.
It was decided that the nomenclature of the officials to be employed should be altered from 1st, 2nd, 3rd and 4th class to that of:-
Senior Assistants,
Junior Assistants,
Translators,
Clerks.
Mr. Waterfield raised the question of the salary of £1,200 for the Head of the organisation. It was pointed out that this officer would in fact correspond to the head of a division at the Admiralty and as such would be entitled to a salary of £1,200.
It was recommended that the salaries of the Senior Assistants (late 1st class officials) should be £600 to £800 + War bonus, that of the Junior Assistants to be £200 to £500. Those with four years’ service and over to commence at the maximum.
The salaries of the translators to be £200 to £300 and that of the clerks to be in accordance with the ordinary gradings.
All these to be considered as civilians for civilian pensions.
Mr. Waterfield requested that an official letter embodying these proposals should be written to the Treasury.
Some slight amendments in detail were made to the organization previously proposed, and the amended organisation is now shown on the attached sheet.
Minutes of a Conference held at the Foreign Office on the 28th April, 1919, to consider the question of the proposed new Code & Cypher School
Present.
The Right Hon. Earl Curzon of Kedleston, K.G. … Chairman
The First Lord of the Admiralty.
The Secretary of State for War.
The D. N. I., Admiralty.
The D. D. M. I., War Office.
Captain W. M. James, D.D. N. I.
Captain R. L. Nicholson, Director of Signals Division.
Major H. E. Franklin D.S.O., M.C.
Secretary: The Earl of Drogheda, Foreign Office.
The Chairman summarized briefly the recommendations of the Inter-departmental conference which recently met to consider the matter, and said that the main question now before the meeting was the housing of the new department, with the establishment of which everyone in principle agreed. In his opinion the arguments in favour of housing the new department in the Admiralty in time of war were unanswerable, but we were providing for its establishment under peace conditions, and in time of peace he thought that the fact that the interest of the intercepted telegrams was practically entirely political indicated that the new department should be housed in the Foreign Office.
Mr. Long said he adhered to the view that the Department should be housed in the Admiralty.
Mr. Churchill explained that he was quite impartial, as he did not in any case want the new Department in the War Office. What was principally required was adequate “cover” for it, and in his opinion this could only be properly provided in the Admiralty. It would be very difficult to hide the Department in the Foreign Office.
After the matter had been thoroughly discussed it was finally agreed that the department should be housed in the Admiralty, and that a small committee consisting of an Admiralty, War Office, Foreign Office and Treasury representative should meet to work out the details of the financial arrangements, it being understood that whoever was director of Naval Intelligence should always be the head of both sections (constructive and destructive) of the department.
Mr. Churchill raised the question of the distribution of the intercepted telegrams, and it was decided that they should be sent to the Secretary of State for Foreign Affairs who would be responsible for passing them on to the Prime Minister or other Cabinet Ministers concerned when they were of sufficient importance.
It was pointed out that, as soon as the censorship ceased, no foreign messages would be received from the cable XXX*, unless Section 7 of the amending Bill to the Official Secrets Act of 1v11 were passed. This Bill, which is in the care of the Home Secretary, has not yet come before the House of Commons, and it was decided that the Foreign Office should write to the War Cabinet Secretariat, and point out the importance of XXX* to the Bill being brought before Parliament at the earliest possible date.
Copy to the First Lord of the Admiralty.
Secretary of State for War.
D.N.I.
D.M.I.
SECRET.
24 October 1919
Sir,
I am c
ommanded by My Lords Commissioners of the Admiralty to acquaint you for the information of -
1. The Army Council.
2. The Air Council.
3. The Secretary of State for Foreign Affairs.
4. The Secretary of State for India.
5. The Secretary of State for the Colonies.
6. The Minister of Munitions.
7. The Minister of Food.
8. The Minister of Transport.
9. The Postmaster-General
that the War Cabinet has now given approval for the formation of a Government Code & Cypher School under the control of the Director of Naval Intelligence, and that it is proposed that it should commence its duties on the 1st November, 1919.
2. It has been decided to appoint Commander A.G. Denniston, O.B.E., R.N.V.R. as Head of the Government Code & Cypher School, which will be accommodated in Watergate House, Adelphi, W.C.I.
3. The duties of the Code & Cypher School will be as follows:-
(a). To compile and be responsible for printing all codes and cyphers used by the British Government Departments, with the sole exception of those mentioned in paragraph 5 below.
(b). To examine all the British Government Codes and cyphers now in force and the purpose for which they are used, mainly with a view to ascertaining and, where necessary, increasing their degree of security; but also so as to ensure that messages shall be free from ambiguity and undue delay ensuing from mutilation in transit, and that they shall be coded in the most economical manner possible.
(c). To maintain the closest liaison with all British Government Departments using codes and cyphers, and to advise them generally in matters relating thereto.
(d). To instruct as large a proportion of Officers as possible who may be employed at any time in coding or cyphering.
(e). To assist in the preparation of any hand-hooks or instructions relating to coding or cyphering, or of those concerning the handling of code and cypher messages in general.
4. I am therefore to suggest that each Department concerned should appoint a “Liaison Officer”, whose duties will be, approximately, as follows:-
(i). To keep in touch with the requirements of his Department as regards codes and cyphers and all matters in connection therewith, and to ensure that these requirements are met by the Government Code & Cypher School.
(ii). To be responsible for the suitability of the “Dictionary” (or “Vocabulary”) of the codes and cyphers compiled for his Department.
(iii). To advise the Head of his Department on:-
(a). The institution of additional books to meet new developments.
(b). “Departmental Codes” before and during their construction.
(iv). To maintain a watch over his Departmental messages for faults in coding or cyphering, or any other defects, which might prejudice the security of the code or cypher used in this connection he will work in close co-operation with the Head of the Coding and Cyphering Section of his Department.
(v). To assist in the instruction of the Officers of his own Service who may be employed at any time in coding and cyphering.
5. The preparation, etc., of the “Signal Books” and purely “Departmental Codes” of the three fighting Services will remain in the hands of the Services concerned. The Government Code & Cypher School, however, will advise on the general principles of their construction and the limitation of their “life”. The decision as to what books are to be classed as “Departmental Codes” will be made by the Government Code and Cypher School after consultation with the Departments concerned,
6. In the case of Departments which require large numbers of codes and cyphers, it will be necessary to accommodate their “Liaison Officers” in the Government Code & Cypher School but where the requirements are small, this should not be necessary.
7. If no objection is seen to these proposals, I am to request that arrangements may be made to bring the foregoing scheme into force, so far as your Department is concerned, and that a Liaison Officer for the
(1) War Office
(2) Air Ministry
(S) Foreign Office
(4) India Office
(5) Colonial Office
(6) Ministry of Munitions
(7) Ministry of Food
(8) Ministry of Transport
(9) General Post Office
may be appointed.
I am, Sir,
Your obedient Servant
(Sgd) R. R. SCOTT.
Letters to:-
The Secretary, War Office.
The Secretary, Air Ministry,
The Under Secretary of State for Foreign Affairs, Foreign Office.
The Under Secretary of State for India, India Office.
The Secretary, Ministry of Munitions
The Secretary, Ministry of Food.
The Secretary, Ministry of Transport.
The Secretary, General Post Office.
The Under Secretary of State for the Colonies, Colonial Office.
F.O. File. Chief Clerk
Z/6700/G 12.7.1922
To the First Lord from the head of GC&CS.
I am having considerable difficulty with the Treasury in connection with the salaries of the officers of the Code and Cypher School.
At the verbal discussions with representatives of the Treasury, which took place prior to the formation of the Code and Cypher School under D. N. I., certain figures were mentioned as salaries which, I understood were to be exclusive of War Bonus.
The treasury are now endeavouring to force upon these officers salaries which are considerably below the figure they were led to expect inclusive of War Bonus.
These officers are experts. They are men who cannot be picked up in the street and if, as I believe, their services are of real value to the State, I consider they should be paid accordingly.
They have behaved in a perfectly loyal manner, but have protested at the Treasury decisions in regard to their salaries, and I consider that their protests are perfectly justified. Should you think fit, it would perhaps help matters if you would write personally to the Chancellor of the Exchequer and ask him to direct his subordinates to moderate their enthusiasm with regard to economy in the matter of cutting down salaries of the officers of the Code and Cypher School.
Even if they were to grant the maximum salaries possible that have been asked for the total amount would still be modest.
War Office Scheme
Code and Cipher School.
Head
(Retired Officer under some Minister)
Secret Branch Code Construction.
Head
(1st Class) Army Navy Other offices
Central Sections Clerical Research
Information 3 3rd cl. 1st cl.
1st cl.
2nd cl.
3rd cl.
3rd cl.
France Germany Scandinavia Spain Japan N. America Balkans Turkey Italy S. America (in each section one 2nd class and one 3rd class)
4 first class. £600 - £900 ….. £2400 - £3600
9 second “ £500 - £650 ….. £4500 - £5850
14 third “ £150 - £250 ….. £2100 - £3500
___________
£9000 -£12950
____________
II
Whether the Cabinet was fully aware of it and its potential is far from clear, but certainly Cabinet ministers were prepared to prejudice its security, which they did as a way of exposing the dangers of Comintern infiltration. And it was not just the politicians but the head of the secret service himself, Admiral Sinclair, who felt that GC&CS would be well sacrificed if the horrors of the red menace might thereby be exposed. It was this loose security which led to AGD’s obsessive secretiveness and defensiveness, which in turn led to considerable misunderstanding on the part of the authorities as to the nature and activities of GC&CS, both then and later. His management skills were not up to his cryptanalytical abilities.
How could the cryptanalytic achievements of World War I be brou
ght to bear on the barren political and diplomatic scene of the 1920s and early 1930s? This was the question to which my father and his colleagues addressed themselves. Here we have only guesses. But the guesses are by no means wholly without interest, in their own right as well as in the context of the 1938-39 move to Bletchley Park, the importation of Enigma, the invention of the Bombe, and the operation of Ultra.
By 1939, the GC&CS was able to read - even if it did not always do so for lack of staff, money and incentive - the secret traffic of all countries, friend, foe and neutral alike, with the sole exceptions of Germany and the Soviet Union. For instance the British cryptanalysts intercepted and cracked the Comintern’s worldwide network of secret communications in the 1930s; they penetrated Japanese diplomatic and naval traffic; they read all Middle East communications from the War Office’s busy intercepting station at Sarafand in Palestine; and from a station in north-west India they helped to preserve the frontiers of the Empire.
Though the main interception station was at Sarafand in the Middle East, the London-based embassies of such foreign nations as attracted suspicion were carefully monitored. The Palmer Street station in London may well have been used early on, strategically placed as it was to monitor the diplomatic traffic of all the main nations. The arrival of Ernst Fetterlein was clearly of crucial importance. He was Russia’s chief cryptologist during the latter years of the Czarist regime. He escaped to the West, a small, bespectacled, discreet Government servant, with his wife (who could speak little English) in the early 1920s. They became family friends and Denniston’s diary records his death in 1944. The successes of GC&CS against the Russians in the pre-war period was largely due to Fetterlein.
Thirty Secret Years Page 6