Hitler's Spy

by James Hayward

  Seeking to emulate his prosperous father, but with no real capital of his own, Owens required backing to bring his innovations to market. Unfortunately the North American economy was becalmed in the midst of the Great Depression, during which patents came to be perceived as monopolistic and harmful, and their efficacy eroded by antitrust laws. Fatefully, during 1933 Owens received expressions of interest from George Hamilton, a wealthy investment banker based in London, who preferred the more cosmopolitan sobriquet of G. C. Hans Hamilton. With a varied portfolio of business interests, Hamilton sat on the board of directors of The Expanded Metal Company, a large industrial concern with plant and laboratories in West Hartlepool and a smart Westminster office at Burwood House. Lightweight but durable, the company’s patent metal mesh supported several iconic landmarks, notably the Eiffel Tower, the Forth Road Bridge and the Kohl Building – one of the few structures left standing in San Francisco after the devastating earthquake of 1906.

  The opportunities afforded by Expanded Metal beat tinpot Pontardawe hands down. In August of 1933, six months after Adolf Hitler gained power in Germany, Owens obtained a Canadian passport and sailed from Halifax to Southampton. Convinced that urbane George Hamilton might make him a millionaire, Owens signed on as a salaried consultant with Expanded Metal, which in turn would invest in a new company formed to exploit Owens’ patents and restore the fortune shamefully squandered on novelty rock in Mumbles. Back in Ontario, the family sold up and broke their long journey home with a stay in New York. Father and son returned first, arriving in London at the beginning of January 1934. Irene and Pat followed six weeks later, travelling in style on board the Berengaria, the flagship liner of the Cunard fleet.

  Back in Europe there were already worrying signs that the great inventor was reverting to type. In filling out her boarding card, Irene gave her London address as 112 Stratford Road, a modest terraced property in Plaistow occupied by an elder brother named Fred. Arthur, meanwhile, selected the Grosvenor House Hotel on Park Lane, impatient to return to the high-rolling lifestyle lost a dozen years earlier. By the time his wife and daughter reached London the aspirant tycoon had taken rooms in Sloane Avenue Mansions, a smart apartment block in Kensington. No matter that much of his work would involve extended spells in humdrum West Hartlepool, mixing and testing oxide pastes; to Arthur Owens Expanded Metal seemed a ‘right hot’ prospect, this being only one of the snappy transatlantic phrases that peppered his lively, energetic patter.

  Humdinger.

  Absolute jake.

  One hundred per cent.

  In order to better exploit his innovations, Hamilton and Owens set up Owens Battery Equipment Limited, a new company part-owned by Expanded Metal but operating from separate offices on Copthall Avenue in the heart of the City of London. Unfortunately this arrangement would go badly awry. According to Owens, and much against his advice, Hamilton attempted to combine oxide paste with an untried process involving expanded (rather than solid) lead sheets. Although the Admiralty expressed firm interest in fitting the new model accumulators in its submarines, the expanded plates proved too fragile. As a result Owens Battery Equipment lost this lucrative contract and was obliged instead to seek sales abroad.

  This setback steered Owens into murky waters. While notionally a banker and company sponsor, George Hamilton had held a commission in the Manchester Regiment during the Great War and still retained certain links with the War Office. Through him Owens was introduced to the Deputy Director of Naval Intelligence, and over lunch at the Army and Navy Club found himself invited to furnish the Admiralty with any useful snippets of information (‘dope’) that he might pick up while on business trips to Germany. Seduced by the notion of secret agency, Owens’ first mission took place in January 1936, when he returned with information of ‘distinct value’ on coastal motorboats operated by the German navy, lately rebranded the Kriegsmarine (‘war navy’) by the new Führer.

  No record exists of the amount paid to Owens for this dangerous favour, though it is unlikely to have been more than a few pounds. Subsequently he was passed on to the Secret Intelligence Service (MI6), whose primary function was the collection of information abroad. SIS assigned Owens a starchy case officer named Edward Peal, who codenamed his latest asset SNOW, a partial anagram of his surname. Colonel Peal and MI6 had no reason to doubt that Owens was anything other than a promising freelance agent, whose corporate credentials gave him perfect cover for work inside Germany, once again a potential enemy. So far as the little man was concerned, the glamorous spy game satisfied his cravings to become a ‘big nut’, while at the same time keeping his sponsor Hans Hamilton sweet.

  Agent Snow’s first assignment for SIS was a trip to the Baltic port of Kiel, where he snapped several Kriegsmarine warships lying at anchor. Worryingly, however, this mission almost came unstuck on his return to Britain, when zealous customs officials seized his Leica camera – a high-end model, and German to boot. Owens blithely confessed to being a spy, then volunteered the telephone number of an MI6 office at Thames House on Millbank to prove his credentials. Plainly discretion was a weak point for garrulous Agent Snow.

  So too was money. Displaying judgement just as poor as his insistence on expanded lead plates, Hamilton now introduced Owens to a chemical engineer named Erwin Pieper. German by birth, the elderly man whom Owens insisted on calling ‘Peeper’ carried an American passport and claimed to be fluent in nine languages. Once the two men were alone, Pieper offered to sell Owens details of an unspecified ‘invention’ devised by a serving German naval officer. Although this scheme came to nothing, the pair would soon meet again – this time in Germany.

  ‘Pieper told me that he had several other propositions which he thought worth quite a little money,’ Owens explained later. ‘From that meeting we became quite friendly and confidential. I then mentioned that I would like him, if he saw his way clear, to get me information in Germany. He agreed to do this, and I paid him money for his expenses.’

  This, at least, was the version Owens played back to Colonel Peal. In fact Pieper began to pump Owens for dope, at the same time promising that spying for Germany would offer greater rewards. This much was true, for between the wars the effectiveness of MI6 was badly undermined by a chronic lack of resources. In 1936 SIS consisted of just 200 staff worldwide, and struggled to run its overseas operations on a miserly annual budget of £200,000. Moreover, careers in MI6 were non-pensionable, so that overworked, underpaid personnel were at risk of corruption. At the end of the year an errant passport control officer in The Hague put a bullet through his head, having embezzled almost £3,000 from Jewish visa applicants desperate to leave Europe for the safe haven of Palestine. Worse still, a duplicitous source inside Germany stung SIS to the tune of £10,000 for a worthless Luftwaffe order of battle.

  Humdinger.

  Whether Owens ever saw spying as anything other than a lucrative financial opportunity seems doubtful. Questioned by sceptical British intelligence officers in 1938, the capable inventor maintained that he had ‘seen right from the beginning exactly what has been in the wind’, and had recognised the existential danger facing Western Europe. ‘I was told that the first job would be to organise a system in Germany to get information out. Probably my system is different from yours, but I have always had one object in view and that was to help this country when I could.’

  Others received a more candid explanation. In 1940, with Britain and Germany again at war, the Welshman born of English parents, who had spent much of his adult life in Canada, insisted that nationalities did not count. All that mattered, Agent Snow claimed, was to be on the winning side.

  Moreover, times were hard. With Owens Battery Equipment struggling to win contracts and cover his outgoings, Owens was forced to move his family from smart Sloane Avenue to downmarket Brixton. In February he met ‘Peeper’ again, greeting the veteran German spy off the Harwich boat train at Victoria, then adjourning to the nearby Eccleston Hotel, where the pair discussed pooling resource
s and profits. Afterwards Owens was introduced to a mysterious Canadian named Gorringer, ‘busy getting through a thousand pounds’ at the Strand Palace Hotel with the aid of a ‘foreign princess’, both provided by Pieper for services rendered. A vast sum of money in 1936, worth perhaps £50,000 today, Owens was powerless to resist such lavish financial inducements. The addition of glamorous, available women made the short, puny Welshman all the more easy to seduce and suborn.

  Operation Legover.

  Right hot.

  It was a package that MI6 could hardly hope to match. In April Colonel Peal handed Owens just £20 towards the cost of travelling to Brussels to wheedle further information from Pieper. There, comfortably installed in the Hotel Metropole, Pieper introduced Owens to one ‘Doctor Hoffman’ – notionally a business colleague, but in fact a senior German intelligence officer named Hilmar Dierks. A professional spy since 1914, Dierks now ran the naval section at the Abwehr station in Hamburg known as Stelle X, whose wide-ranging brief included espionage operations against Britain. With its work somewhat complicated by the Anglo-German Naval Treaty of 1935, Stelle X used neutral territories such as Belgium and Holland as buffers and springboards for clandestine activity, building a network of shady front companies and dead-letter drops, and holding discreet meetings (treffs) in select hotels.

  Sizing up the little man for the first time at the Metropole, Hilmar Dierks might have recognised something of himself. As a tyro agent during the First World War, Dierks had tried twice to infiltrate the British Isles on behalf of the Kaiser, and when broke in 1925 had even offered his services to MI6. Untroubled, therefore, by Owens’ contact with MI6, and swallowing the plausible fiction of the Zeppelin shell fraud, Dierks divined promising agent material and moved their discussion across the border to Cologne. ‘I was asked if I could give them certain information for which they were prepared to pay very well,’ Owens said later. ‘All expenses to and from Germany, all travelling and hotel expenses in England, and any money I thought reasonable for bribes. I was given a list of the information required and methods of communication, and a government paper which enabled me to pass without questions at the frontier.’

  Designated A.3504 by the Hamburg stelle, Owens returned to London determined to pursue a mercenary middle way by peddling low-grade information to the highest bidder. Since MI6 were starved of funds, his preferred employer would be Hitler’s Abwehr, who promised generous expenses and a monthly stipend. This treasonous scheme allowed no room for Erwin Pieper, who had outlived his usefulness by introducing Owens to his controller, Hilmar Dierks. Just one flaw threatened this cynical masterplan: a distinct lack of hard intelligence. True, Hans Hamilton knew people, and MI6 might be prevailed upon to provide a light dusting of low-grade chickenfeed. For the most part, however, the material Owens had gathered for Stelle X during the spring of 1936 was of no real value, having been cobbled together from public domain sources such as newspapers and magazines, and obscure technical manuals from specialist suppliers.

  ‘I am sending you today Sample Number One,’ Owens wrote to Dierks disingenuously, a humbug merchant once more. ‘The other samples will follow in rotation, so please be on the lookout. The cost of making up samples here is £9.18.6 to be exact, including trips etc, and I trust you will find it in order. It was very difficult to produce. I will bring all test papers and reports with me when I next come over.’

  Still believing Snow to be loyal to the Crown, Colonel Peal contributed £30 towards costs incurred on his next trip to Germany. Owens returned to Hamburg that summer, the Abwehr stoking his vanity with a room at the plush Hotel Vier Jahreszeiten. At this, their second treff, Dierks got down to brass tacks. ‘I was shown maps of aerodromes, factories, stores and stations in England, and told that these must be kept up to date,’ recalled Owens. ‘As time progressed, they would supply me with names and addresses in England where information would be received and sent. In fact I was to act as a sort of central agency between Hamburg, Berlin and London.’

  Precisely why Dierks set such store by A.3504 remains obscure. Nevertheless, having gained the confidence of Stelle X, Owens was passed up the line to Berlin, where his status as Hitler’s chief spy in England was confirmed. Although a promised introduction to the Führer seems not to have materialised, Agent Snow was accommodated at the exclusive Hotel Excelsior, and no doubt supplied with a foreign princess. Things truly were, in his own curious parlance, ‘on the up and up’. Despite being wholly unconcerned by politics, to Owens the Germans appeared ‘good people’, governed by a dynamic Little Man far more to his liking than the grey bureaucrats of an enfeebled National Government which had failed to pull Britain clear of an interminable economic slump.

  Back in London Owens checked in with Colonel Peal. If MI6 and the Naval Intelligence Division had been expecting solid dope on U-boats in exchange for their £30, they were sorely disappointed. ‘Owens brought back practically no information,’ carped Peal. ‘He told me that he had made a visit to Berlin but was unable to get any information, as his visit was too hurried.’ The colonel began to grow increasingly suspicious. ‘On making enquiries I have now ascertained that Owens still has his flat at Sloane Avenue Mansions, and is receiving letters there. He has not admitted this.’

  The Metropolitan Police Special Branch already viewed Snow with particular disdain. ‘Typical Welsh underfed “Cardiff” type,’ read one unkind observation report. ‘Very short and slight, rather thin and bony face, somewhat shifty look. Curious brown eyes set wide apart and slightly oblique. Small bony hands stained from cigarette smoking. Soft-spoken and lacks assurance in manner. Usually wears brown shoes or boots. General appearance that of an underfed rat.’

  Contrary to popular belief, Arthur Owens was not the first double agent fielded by British intelligence against the Hitler regime. This accolade belonged instead to Major Christopher Draper, a Great War fighter ace turned film actor and stunt pilot, whose reckless penchant for flying under bridges had earned him a reputation as ‘the Mad Major’. In 1932 Draper took part in a barnstorming ‘Aces of the Air’ tour around Europe, and in Munich was introduced to Adolf Hitler, whose ascent to power was almost complete. Since the Mad Major was well known as a vocal critic of Whitehall’s treatment of war veterans, he was earmarked by the Abwehr as a potential asset, and approached by the London correspondent of Der Angriff to provide intelligence on the Royal Air Force.

  Draper dutifully reported this contact to the Security Service, MI5, and was instructed to travel to Hamburg. His case officer was Colonel Edward Hinchley-Cooke, a veteran MI5 interrogator who was half German, and so fluent in his mother’s tongue that he had worked successfully as a stool pigeon inside prison camps during the Great War. For the next three years Draper posted the Abwehr occasional snippets of disinformation, cunningly disguised as innocuous correspondence about stamp collecting. Over time, however, MI5 ran short of plausible falsehoods, and the Mad Major’s contact with Stelle X began to wither on the vine.

  One of the several addresses used by Draper and Dierks was Postbox 629, Hamburg 1. A Home Office interception warrant placed on mail sent to and from this box meant that MI5 were soon able to identify virtually all of the Abwehr’s existing operatives in Britain. Crucially, one of the letters examined revealed that Dierks (masquerading as ‘L. Sanders’) was keen to meet with another of his British agents at the Minerva Hotel in Cologne on the morning of 24 September 1936.

  The identity of this new Nazi agent came as something of a shock to British intelligence. For it was none other than Arthur Owens.

  Instead of confronting errant Agent Snow immediately, Colonel Peal allowed the letter to proceed to its original destination, which just so happened to be the London office of Expanded Metal. A port watch subsequently confirmed that Owens had honoured his appointment with Dierks, travelling to Germany on 23 September, and remaining there for six days. Ominously, MI6 had received no advance warning, and no request for expenses. On his return, Peal summoned Snow to an SIS off
ice on Victoria Street and demanded an explanation. Owens admitted that he had met Erwin Pieper a year earlier, when the elderly German had offered to sell secrets, but insisted that his own intention in stringing ‘Peeper’ along was to infiltrate the Abwehr.

  ‘My duty at that time was to get all I could and be in a position to help this country,’ Snow fibbed artfully, feigning grave indignation. ‘I risked my life to get it to you. At least I deserve a little thanks. Understand that I am one hundred per cent with you, and if I make a slip over there I’m not coming back. I am pro-German completely. I have to be.’

  But Peal was no fool. The little Welshman was clearly playing both ends against the middle, and in November learned that his services were no longer required by MI6. Peal also threatened Owens with prosecution under the Official Secrets Act, though his genuine dealings with British intelligence, including his successful reconnaissance of Kiel harbour, promised acute embarrassment in a court of law. True, Owens held a Canadian passport, and still owed allegiance to the Crown if it came to charges of treason. Nevertheless, criminal proceedings might prove a very tricky business indeed.

  At the same time, Owens also aroused the displeasure of his Abwehr handler, Hilmar Dierks. Still writing as Herr Sanders from Box 629, yet straying from the language of philately, Dierks upbraided Owens over some decidedly outdated intelligence on British tanks. ‘I’m sorry to say,’ he wrote in December, ‘that the contents of your letter were not in the least new to me. The newspapers of your country are much quicker than your letters. Since a number of years I am also in possession of the magazine pictures you sent me, and you no doubt will understand that all this is rather disappointing. I don’t own a museum, you know. Henceforth your letters will have to be a little more up to date.’