On 18 May 1940, Knight called on Herschel Johnson at the US embassy to explain the case against Kent. Johnson, Knight reported, was ‘profoundly shocked’ and ‘promised the fullest co-operation’. An application for Wolkoff’s detention under Regulation 18B of the Emergency Powers (Defence) Act was approved the following day by the Home Secretary. On 20 May 1940 the State Department dismissed Tyler Kent from government service and waived his diplomatic immunity. The same day, Knight, accompanied by a US embassy official and three officers from Scotland Yard, surprised Kent at his flat and found ‘an amazing collection’ of US diplomatic documents. Knight reported, possibly with some exaggeration: ‘It is quite clear that some of the information relating to the military position of the Allies was so vital that in the event of its being passed on to Germany, the most disastrous consequences would ensue.’ Other documents found included correspondence in which Kent requested a transfer to the Berlin embassy, as well as the secret Right Club membership list.68 Kent was arrested after being interrogated by Knight at the US embassy in the presence of Ambassador Kennedy.69 ‘Nothing like this has ever happened in American history,’ wrote the shocked US Assistant Secretary of State, Breckinridge Long. ‘It means not only that our codes are cracked . . . but that our every diplomatic manoeuvre was exposed to Germany and Russia . . . It is a terrible blow – almost a major catastrophe.’70 Kennedy, however, informed the State Department that, in order to avoid embarrassing Roosevelt, Kent would be kept incommunicado during the forthcoming US presidential election campaign.71
On 21 May Maxwell Knight and Guy Liddell visited the Home Office to brief Sir John Anderson, the Home Secretary, and other senior Whitehall figures on the Kent–Wolkoff case as well as the ‘underground activities of the BUF’ and the Right Club discovered by Knight’s agents. In Liddell’s view, ‘Max was extremely good and made all his points very quietly and forcibly’:
Anderson agreed that the case against Ramsay was rather serious but he did not seem to think that it involved the BUF. Max explained to him that Ramsay and Mosley were in constant touch with one another and that many members of the Right Club were also members of the BUF.
By the end of the meeting, according to Liddell, the Home Secretary was ‘considerably shaken’.72 Next day, 22 May, Anderson reported to the War Cabinet that, though the Security Service had no concrete evidence, it believed that 25 to 30 per cent of the BUF would be ‘willing if ordered to go to any lengths’ on behalf of Germany. The War Cabinet agreed to amend Defence Regulation 18B to allow the internment of those showing sympathy to enemy powers.73 Later the same day orders were signed for the detention of Mosley and thirty-two other leading members of the BUF.74 An opinion survey by Mass Observation reported overwhelming public support: ‘Indeed, very seldom have observers found such a high degree of approval for anything.’75 Though extremely few in number, would-be German agents did exist in Whitehall. In 1940–41 two Nazi sympathizers in the Ministry of Supply, Molly Hiscox and Norah Briscoe, attempted to pass on classified information to the Germans but supplied it instead to an agent of Maxwell Knight posing as a German agent. Both received five-year jail sentences.76
To iron out what he called the ‘overlaps and underlaps’ in the various agencies dealing with counter-espionage and counter-subversion, Churchill founded the Home Defence (Security) Executive, better known as the Security Executive, which was formally constituted by the War Cabinet on 28 May. Its first head was the Conservative politician Lord Swinton, a former minister of air, whom Churchill instructed to ‘find out whether there is a fifth column in this country and if so to eliminate it’.77 At the time Swinton had no doubt that there was and that large-scale internment was required to deal with it. By July the internment of BUF members had reached a peak of 753. Mass internment of enemy aliens was on a much greater scale. Between May and July 1940 about 22,000 Germans and Austrians and about 4,000 Italians were interned.78 Some Security Service officers knew personally of cases of anti-Nazi Germans and anti-Fascist Italians being interned with supporters of Hitler and Mussolini. The future judge (Sir) John Stephenson later recalled how ‘Heddy, my mother’s Austrian Jewish cook, was carried screaming off to internment’.79
Jack Curry later acknowledged in an in-house history, ‘By the time of the fall of France the organisation of the Security Service as a whole was in a state which can only be described as chaotic.’80 The main blame fell on Kell. On 10 June Sir Horace Wilson, who had succeeded Fisher as head of the civil service, summoned Kell to his office in the Treasury and told him that ‘it had been decided to make certain changes in the controlling staff of the Security Service’.81 Kell wrote in his diary, ‘I get the sack from Horace Wilson,’ added his dates of service, ‘1909–1940’, and drew a line beneath them. Then he vented his feelings on the Italians: ‘Italy comes into the war against us. Dirty Dogs.’82 It had already been decided that Kell’s deputy, Sir Eric Holt-Wilson, who was only two years younger and had served under him since 1912, was too old to succeed him.83 Though Holt-Wilson was due to retire in only a fortnight’s time, he decided to resign immediately so that he and Kell would ‘both go together’. Lady Holt-Wilson, over thirty years younger than her husband, saw his resignation as a sacking:
. . . I cried to think of the hurt to you. You who have worked so wonderfully, who have been so repeatedly told that nobody else has your knowledge in your special line, who spared nothing to give your best – to be given 48 hours notice why not even a Kitchen Maid gets thrown out like that!84
Before the war Kell had ‘very strongly’ recommended Jasper Harker, the head of B Branch, as his eventual successor.85 Probably because of B Branch’s successes during the 1930s in penetrating the German embassy, the CPGB and the BUF, the Secret Service Committee had agreed.86 On the evening of 10 June Harker was summoned by Churchill and told that he was to succeed Kell87 – a clear indication of the priority which the Prime Minister attached to uncovering and uprooting the (non-existent) fifth column. Harker was also informed that he would be ‘responsible’ – in other words subordinate – Swinton, the head of the Security Executive.88
Holt-Wilson, though scarcely an impartial judge, wrote on hearing that Harker was to take over: ‘God help the Service as he hasn’t a real friend here and knows nothing about the machinery . . .’89 Harker proved to have little idea about how to restore order and improve morale amid the confusion which he inherited at Wormwood Scrubs. A nineteen-year-old MI5 typist was overheard complaining to a friend in a restaurant that:
A new Director – a new broom – had arrived and the place had been plastered with pamphlets [entitled] ‘GO TO IT’. These had proved very irritating to the female staff who were putting in a lot of overtime and on finishing work feeling very tired came across this ‘GO TO IT’. Some had been removed, others torn and scribbled on, and when action was threatened some 20 girls tendered their resignations.90
One of MI5’s wartime recruits, Ashton Roskill, compared Harker to ‘a sort of highly polished barrel which, if tapped, would sound hollow (because it was). Swinton saw through him in a flash.’91
In July, apparently on Churchill’s personal instructions, Swinton was formally given ‘executive control’ of MI5, with responsibility for helping Harker reorganize the Service.92 Swinton’s most important contribution was to recruit a business-efficiency expert, Reginald Horrocks, formerly London manager and European director of Burroughs Adding Machines Ltd (later part of Unisys) as deputy director (organization). Horrocks’s main task was to modernize MI5’s antiquated filing system, introduce a Hollerith punch-card system, and assimilate a large number of untrained recruits into the Registry. In Curry’s view, he ‘brought about a great improvement in the mechanics of the Office and gradually introduced order where there had been disorder and confusion’.93 Though more efficient, however, the new Registry was also more impersonal. A member of staff who had joined the Registry in 1937, complained: ‘Horrocks told me it was to be something like Ford’s factory where each worker
had only one job to do, and this reminded me of Charlie Chaplin in Modern Times when he used a spanner to screw a nut and bolt as the machine belt brought the pieces of machinery around.’94 A review by the future director general Sir David Petrie concluded early in 1941:
It is interesting to note that some of the Registry staff who are dissatisfied with their conditions of employment admit, even while voicing a complaint, that the new system has enormously improved speed and efficiency . . . The old Registry was small, it was then what has been called the ‘family party’ period and the system probably answered its purpose well. But a system that may be satisfactory for the running of a private house may not be adequate for a large hotel.95
But if Swinton understood the need to reform the Registry, he had little grasp of the problems facing B Division, which complained that he seemed to think of MI5 as ‘a large detective agency carrying out frequent raids in fast cars’. At a stormy meeting in early August he declared B Division’s investigative capacity to be quite inadequate and insisted on appointing as joint head of the Division, alongside Guy Liddell, a London solicitor, William Crocker, who had no previous intelligence experience.96 The appointment, according to Curry, ‘helped to reduce B Branch to a state of chaos and . . . seriously damaged the morale of its officers’. In September Crocker resigned after a row with Swinton, leaving Liddell in sole charge of the Division.97 Liddell went on to win a reputation as one of the war’s outstanding intelligence officers. Hugh Trevor-Roper (later Lord Dacre), a wartime recruit to SIS, who got to know Liddell well and was usually a hard judge, found him ‘a remarkable and very charming man who gave the B Division its special character: open, genial, informal, but highly professional’.98
Initially, Swinton’s Security Executive did more to exacerbate than to resolve intelligence confusion over the supposed threat from the (nonexistent) fifth column which preoccupied Churchill at the beginning of his premiership. Liddell complained on 3 July that the Executive was ‘really pandering to the Fifth Column neurosis, which is one of the greatest dangers with which we have to contend at the moment’.99 By the end of July, however, fifth-column ‘neurosis’ had passed its peak. Mass internment reassured most of both Whitehall and the public that the fifth column had been neutralized, and MI5 noted a welcome decline in alarmist reports with which it was expected to deal. The establishment in late June, at the suggestion of Liddell and B Branch, of twelve regional security liaison officers (RSLOs) also enabled such reports to be filtered locally, with the result that only a minority reached MI5 headquarters in Wormwood Scrubs.100
Reports by Swinton and the Security Executive on ‘the danger of retaining alien internees in this country’, where they might help a German invasion, led some to be deported to Canada. Deportations ceased after a former luxury liner, Arandora Star, carrying 1,200 German and Italian internees across the Atlantic, was torpedoed on 2 July by a German submarine and sank with heavy loss of life.101 On 24 July further mass internment was suspended due to lack of accommodation, and was never resumed. Early in August a government spokesman admitted that, due to official blunders, many innocent people had been interned.102 Later in the month, Churchill told the Commons, with what one historian has called ‘an impressive display of amnesia’, that he had always thought the fifth-column danger exaggerated.103 By late October just over 20 per cent of the aliens interned had been released.104
The Security Service, like the military authorities, was unhappy with the extent of the releases. Its main concern was the potential support of those released for a German invasion. British intelligence did not know that German invasion plans (codenamed Operation SEALION) had been indefinitely postponed on 17 September and cancelled on 12 October. Military intelligence declared on 29 September that ‘the time will never come when it will be safe to say that there will be no invasion.’ On 10 October, though reporting that the threat of invasion had declined, the JIC concluded that it would persist as long as the Luftwaffe remained larger than the RAF.105 Harker, as the Service director, did not put the case for maintaining mass internment well. When the Security Executive discussed a recommendation by the Advisory Committee on Internment on 24 October that interned domestic servants of established repute should be released, Harker declared that ‘experience had shown that German and Austrian domestic servants were not always as harmless as they appeared.’106 Apart from unsubstantiated claims after the conquest of France and the Low Countries that German maids had led paratroopers to their targets,107 it is difficult to guess what ‘experience’ Harker had in mind.
Influenced by the treachery exposed by the Kent–Wolkoff case (which at the time the Security Service could not know was as untypical as it now appears), the Service exaggerated the potential threat to national security posed by the phasing out of mass internment. But it is still impossible to be certain how loyal enemy aliens and British Fascists would have been if Operation SEALION had gone ahead. ‘It must never be forgotten’, wrote Sir David Petrie later, that many of those British Fascists who had protested their patriotism ‘might have behaved very differently if ever a German invasion had become a reality’.108 A (probably small) minority of enemy aliens and British Fascists, consisting mainly of those who remained interned throughout the war, might well have supported it. At the Peveril internment camp in the Isle of Man on Hitler’s birthday in April 1943 ‘there was community singing of the Horst Wessel Lied in the Camp canteen.’109
In the midst of the controversy over ending mass internment, the Security Service was forced to move its headquarters. As soon as the London Blitz began in September 1940, it became clear that Wormwood Scrubs was insecure. During air-raids three-quarters or more of the staff on upper floors were ordered to leave their rooms; only the ground floor was regarded as being reasonably safe.110 The Registry index and files were particularly vulnerable, following the unwise decision to house them in a glass-roofed workshop which had formerly been the prison laundry. One member of staff recalls arriving at the Scrubs on 29 September:
to find firemen and hosepipes everywhere. An incendiary bomb had dropped on the Registry and apparently the night duty officer could not find the keys quickly enough so the hosepipes had to be worked through the barred windows and doors and the mess was simply awful. The half-burnt files were soaking wet and there was a disgusting smell of burnt wetness.111
The whole central card index and about 800 files were badly damaged. Though the index had been microfilmed at the suggestion of Victor Rothschild, the quality of the film was so poor that registry clerks could work on it for only a few hours at a time and the index took nine months to reconstruct.112
In October 1940 the greater part of the Security Service moved to the safer and far more scenic surroundings of Blenheim Palace at Woodstock, near Oxford, which had just been vacated by the boys of Marlborough College. The Director, some other senior officers and the counter-espionage operations officers stayed in London at a building in St James’s Street whose role was camouflaged by a large ‘To Let’ sign outside. St James’s Street was known as the ‘town office’ and Blenheim Palace as the ‘country office’.113 After the miseries of Wormwood Scrubs and the London Blitz, one member of staff found arriving at the Palace during ‘wonderful autumn weather’ a ‘blissful’ experience:
At Blenheim the trees were gold with autumn and the sky was blue, the palace pale yellow, really lovely. Our desks were set up under the tapestries which were still on the walls. The Duke had his own wing and we had the run of the grounds in the lunch hour . . . I swam in the lake occasionally and, when it snowed, a lot of the staff tobogganed using the intrays, or skated on the frozen lake to the confusion of the sentries stationed at the edge to repel intruders.114
The Registry occupied most of the ground floor, including the Great Hall, the Long Library and some of the state rooms. Anthony Blunt, who was based in St James’s Street, came from time to time to lecture on the architecture of Blenheim Palace.115 Not all staff, however, worked in the Palace itsel
f. John Stephenson’s office was a hut in the courtyard, ‘inadequately warmed by paraffin and imperfectly ventilated. Though draughts of cold air came in, fumes of paraffin and tobacco were unable to get out.’116
Initially, 250 female staff117 (later considerably more) were lodged in rooms at Keble College, Oxford, usually two to one undergraduate set. Since there were no telephones in the rooms, messages had to be left with the college porters, who would stand in the quad and bellow the names of the recipients. Coal for the coal fires in rooms was rationed; cold and condensation were constant problems in the winter months. After a usually Spartan breakfast in the College Hall, served by the scouts (male servants), buses were waiting in a side road to take staff to Blenheim Palace.118 In May 1941 Keble’s Bursar complained that Service staff were responsible for considerably more breakages than undergraduates. M. B. Heywood replied on behalf of the Service:
It is difficult to envisage that, among other things, our staff have broken 28 large coffee pots, 740 plates of [all] sorts and 104 dishes of [all] sorts in the dining room, unless there has been a free fight.
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