United States Cryptologic History

Center for Cryptologic History

Special series | Volume 11 | 2015

Issues in British and American 

Signals Intelligence, 1919-1932 
This publication presents a historical perspective for informational and educational purposes, is the 

result of independent research, and does not necessarily reflect a position of NSA/CSS or any other U.S. 

government entity.

This publication is distributed free by the National Security Agency. If you would like additional copies, 

please submit your request to:

Center for Cryptologic History

National Security Agency

9800 Savage Road, Suite 6886

Fort George G. Meade, MD 20755

Cover: The 1921 Washington Naval Conference
Issues in British and American 

Signals Intelligence, 1919-1932

John Ferris 

Special SerieS | Volume 11

2016

i

Contents

Introduction............................................................................ v

Part 1: Reading the World’s Mail: British Censorship, Communications

Intelligence, and Economic Warfare, 1914-1919............................. 1

Summary ............................................................................... 1

Background ............................................................................ 1

Economic Pressure .................................................................... 2

Blockade Evolution ................................................................... 3

Initial Attempt .................................................................... 3

Legal Basis ......................................................................... 3

Dealing with Neutrals ............................................................ 3

Evolving toward Interdepartmental Use of Intelligence ........................ 4

Enforcing Blockade ................................................................... 6

Evolving Enforcement................................................................ 6

Intelligence: Evolving to Effectiveness ............................................ 7

Developments in Sources ............................................................ 8

Source I: Statistics................................................................ 8

Source II: Signals/COMINT....................................................... 8

Signals Read by Censorship...................................................... 8

Resulting Data: 1914-1915....................................................... 9

Developments in Organization ..................................................... 10

The War Trade Intelligence Department ..................................... 10

WTID Organization............................................................... 10

WTID Demographics ............................................................. 11
ii

Issues in British and American Signals Intelligence, 1919-1932

Developments in COMINT: 1914-1916 ............................................. 11

Early in the War.................................................................. 11

Main Source: 1914-1915 ........................................................ 12

Evolving: 1915-1916 ............................................................. 12

COMINT and WTID Information..................................................... 13

COMINT and Enforcement ...................................................... 13

Intelligence Impacts ................................................................. 14

COMINT and Enforcement ...................................................... 15

Illustration ........................................................................ 15

Limited Impact: Finance....................................................... 16

Finance: Limits Mitigated.......................................................... 17

Developments 1917-1918 ........................................................... 17

Enforcement Eased.............................................................. 18

Complications in Censorship ................................................... 18

Technical Peak........................................................................ 19

Conclusions ........................................................................... 19

Notes................................................................................... 20

Part 2: The Tale of the Trust: The Myth of Soviet Deception 

of British Intelligence in Russia, 1919-1927 ................................. 23

Summary .............................................................................. 23

The Trust .............................................................................. 23

Influential Idea................................................................... 24

Cautious View vs. Sensational ................................................. 24

Similar Efforts .................................................................... 24

Known Successes ..................................................................... 24

Short-Lived Success ............................................................. 24
iii

Issues in British and American Signals Intelligence, 1919-1932

Sidney Reilly: The Example of a Trust Success .............................. 25

Documentation ....................................................................... 26

UK, SIS Success vs. USSR........................................................ 26

SIS Istanbul ....................................................................... 27

SIS Section V...................................................................... 27

SIS Sources in USSR Government .............................................. 28

Agents in Moscow ................................................................ 28

1923-1934: Two Sources ........................................................ 29

Other Sources .................................................................... 30

1923-1930: Main Sources? ...................................................... 30

What Was Reported.............................................................. 30

UK COMINT............................................................................ 31

Diplomatic COMINT .............................................................. 32

A Trust Attempt?...................................................................... 32

Results of the Attempt.......................................................... 33

SIS Assessment of the Attempt................................................. 34

Assessment............................................................................ 35

Riga Authenticity ................................................................ 35

Riga Authenticity: Significance ................................................ 36

Stolen Documents: Authenticity .................................................. 36

Riga: Apparently Authentic.................................................... 36

Self-Assessment of Threat.......................................................... 37

No Threat ......................................................................... 37

No Reflections of Success....................................................... 37

Final Assessment................................................................. 38

Conclusion ............................................................................ 38

Notes................................................................................... 39
iv

Part 3: Gentlemen’s Agreements and Gentlemen’s Mail: Communications

Intelligence and The Diplomacy of Naval Disarmament, 1921-1930 ..... 42

Introduction........................................................................... 42

Three Conferences

1921-22 Washington Naval Conference....................................... 43

Yardley’s Bureau ................................................................. 43

GC&CS ............................................................................. 43

Value in Context ................................................................. 44

1927 Geneva Conference ........................................................... 45

1930 London Naval Conference.................................................... 45

British Prime Minister MacDonald I............................................ 46

GC&CS’s Opportunity............................................................ 46

MacDonald II...................................................................... 46

Two Complex Issues ............................................................. 47

Initial GC&CS Intelligence...................................................... 48

1930 Conference: First Two Months........................................... 49

Crisis in the 1930 Conference.................................................. 50

A Japanese Weakness ........................................................... 52

Effects of Communications Intelligence.......................................... 55

Communications Intelligence and Negotiations............................. 56

Strategic Consequences: Assessment ............................................. 57

Notes................................................................................... 59

Issues in British and American Signals Intelligence, 1919-1932
v

Issues in British and American Signals Intelligence, 1919-1932

Introduction

The first third of the twentieth century saw the 

development of modern communications intelligence (COMINT), and its rise to a major role in 

both military and diplomatic decision making. 

European nations had engaged in communications intelligence since at least the Renaissance, but 

the invention of radio led to more and more timely communications on the part of most European 

powers. Radio also led to an increase in the volume 

of messages exchanged officially and made it easier 

for a third party to gain access to them. 

Since radio communications were a new factor 

in world affairs at the turn of the century, development of the means to exploit it for intelligence purposes was conducted simultaneously with the basic 

technological development of the medium. While 

there were advances in both technology and exploitation early in the century, not surprisingly, intelligence collection and application processes matured 

most rapidly in the decade beginning with World 

War One.

Histories of cryptology often end up a bit skewed. 

Much of the previous writing on COMINT in those 

early decades has centered on its military development and on military use. However, COMINT, 

even from those first years, has been as important in 

the diplomatic and economic sectors of many countries as it has been in military affairs. In addition, 

historians of cryptology in any era tend to be a bit 

parochial, and often write about COMINT as if it 

existed in a vacuum. 

Professor John Ferris of the University of Calgary, who served as a scholar in residence at the 

Center for Cryptologic History from 2008 to 2009, 

has avoided both of these pitfalls. His articles in 

this volume add immeasurably to our understanding of the role of COMINT in the opening days of 

World War One, and its development in the next 

decade. His research has brought to light previously 

unknown but important episodes from this formative period, and, better still, with his wide-ranging 

knowledge about non-COMINT intelligence and 

about diplomacy, he has placed this new material in 

the proper context. 

Many countries excelled at various aspects of 

COMINT in the early part of the twentieth century. 

Great Britain developed processes for acquiring and 

using COMINT for national decision making that 

grew consistently throughout this period and that 

eventually became a sophisticated tool for the country’s decision makers in many government endeavors, both military and civil. The national benefits 

derived not only from a high level of competence 

in using this new source, but also from the ability to 

use it in combination with all sources of intelligence 

on a particular topic until the whole became much 

greater than the sum of its parts. 

The first essay in this collection shows how Britain developed its proficient network for COMINT 

production while enforcing economic policies during the First World War. This happened independently of the famous “Room 40,” the Royal Navy’s 

well-known COMINT organization.

Professor Ferris’s second essay, by blending 

COMINT materials and other intelligence from the 

1920s, answers many questions about international 

problems with the emerging Soviet Union that 

have bothered historians of intelligence for decades. 

Along the way, he also gives a realistic appraisal of 

the infamous Sydney Reilly, a controversial figure of 

the time (the subject of the television series Reilly: 

Ace of Spies). 

The story of Herbert O. Yardley and the socalled “American Black Chamber” is both familiar 

and is surrounded by a number of popular myths. 

In his third essay, Professor Ferris relates the real 

story of the Black Chamber and goes on to tell how 

COMINT actually supported several naval disarmament conferences in the late 1920s and early 1930s. 

With these essays Professor Ferris has broken 

new ground for those interested in understand-
vi

Issues in British and American Signals Intelligence, 1919-1932

ing the origins and early development of what has 

become a major tool of government, not only in 

Great Britain and the United States but around 

the world. But the history of these organizations 

and activities is not simply of value in satisfying our 

curiosity. Each nation has its own approach to the 

structure and use of intelligence, and the experiences of the early twentieth century had great influence 

on later use and practices in intelligence, including 

COMINT. 

Professor Ferris gives us a new and interesting 

portrait of how this all began. 

David A. Hatch

NSA Historian
1

Summary

The best-known element of signals intelligence 

during the First World War is work against the 

operational traffic of armies and navies, centering 

on cryptanalysis and traffic analysis; however, overwhelmingly its largest form, and the area where it 

was most frequently used, lay in blockade and economic warfare. This paper will center on Britain’s 

role in this area, but British efforts were simply the 

main element of an allied system. From the start of 

the war, France pursued independent, essential, and 

parallel actions; Italy and Japan were less cooperative and important. When the United States entered 

the war, it worked with the existing system, and left 

management of the blockade and censorship of maritime cables to Britain and France. 

Background

Between July 1914 and November 1918, modern signals intelligence was born. The type and number of messages intercepted every month for communications intelligence swelled from thousands of 

enciphered telegrams to and from foreign offices; 

to millions of cables, letters, and radio dispatches, 

to and from diplomats, soldiers, sailors, airmen, and 

civilians, sent mostly in plain language or commercial codes. Its use in blockade and economic warfare 

also was perhaps the one case in history where communications intelligence worked best without the 

aid of cryptanalysis, and where open source material 

was most central to analysis. It is closer to the modern practice of communications intelligence than 

were the actions of naval and military SIGINTers 

between 1914 and 1918. Its employment in blockade 

and economic warfare is also virtually unknown.1

The aim of economic warfare was to weaken an 

enemy’s economy while strengthening one’s own. Its 

central means, maritime blockade, sought to prevent 

an enemy from exporting or importing goods by sea, 

particularly raw materials which it did not produce 

at home, to create social and economic disruption 

in its territory, and to weaken its ability to produce 

military forces and equipment. In 1913, for example, 

90 percent of the copper consumed by Germany was 

imported, primarily from the United States, which 

also was a great supplier of cotton used for textiles 

and guncotton (nitrocellulose), a form of explosive.

As the British General Staff wrote after the war, 

the ideal was to create “impaired military efficiency 

and exhausted national morale” and “so completely 

starve the enemy as to force him to come to terms 

by starvation.”2

 This aim was ambitious, and so were 

the means. During the Great War, pursuing this aim 

led Britain to intervene in the economy of every neutral country, and to struggle with most of the world’s 

Part 1: Reading the World’s Mail: 

British Censorship, 

Communications Intelligence, and 

Economic Warfare, 1914-1919
2

Part 1: Reading the World's Mail

firms. To blockade Germany, Britain also needed to 

regulate imports into neighboring neutral countries, 

like the Netherlands, Norway, Denmark, Sweden,

and, until 1915, Italy, which could become conduits 

to the Central Powers. Britain also needed to control 

exports of raw materials and manufactured goods 

from distant neutral polities, most notably the United States, but also Spain, and many countries and 

colonies in Latin America, Africa, and Asia. These 

needs forced Britain into complex arrangements 

with foreign governments and great firms, which 

often had political power of their own. 

Blockade was complex enough, but economic 

warfare was even more so. It involved efforts not 

merely to weaken an enemy’s economy, but also to 

strengthen one’s own by, for example, enabling allies 

to maximize their weapons or metal procurement 

abroad, while minimizing the costs of so doing. Economic warfare could be pursued both by denying 

Germany access to, say, aluminum, and by reducing 

the unit cost which the allies paid for it. The aim 

was to inflict maximum damage on enemy states and 

their affiliated firms, with the minimum collateral 

damage to one’s own.

In some cases the balance might mean using 

seemingly powerful tools with care, or not at all. The 

classic instance of failure to appreciate this point was 

Germany’s adoption of unrestricted submarine warfare, which cost far more than it gained, by pushing 

the United States into the war—indeed, this was the 

single greatest consequence of the blockade itself, 

however indirect and unintended. Similar calculations affected Britain’s caution in pursuing a financial blockade, or in tightening up its system of maritime control.

To further complicate judgments, for much of 

the war the allies did not expect to win a decisive 

victory, although they finally did just that in autumn 

1918. Instead, they anticipated some kind of compromise peace, perhaps lasting for a few years, which 

would be followed by a renewed struggle. Given 

these conceptions, economic warfare was intended to 

strengthen the allies and weaken Germany not just 

for this war, but the next one as well. Many aspects 

of economic warfare proved unnecessary given the 

German collapse in 1918, but they were rated highly 

at the time. This context must be remembered when 

assessing how intelligence supported policy.

The length of time since a lengthy war is also 

part of that context. Since 1815 the great powers 

had fought no prolonged war, or any to which blockade was fundamental, except for the Crimean War 

and the American Civil War. In 1914 they became 

engaged in a kind of war for which no one had prepared, a total war fought between societies as well as 

armed forces. Economic war and blockade were the 

epitome of total war, with states directly attacking 

enemy civilians. Every state was forced to find solutions to a complex range of problems. Central among 

them were economic matters. 

Economic Pressure

When war broke out, Britain was unsure about 

the fundamentals of blockade—how it would be exercised, and against what targets. The Royal Navy (RN) 

had just moved from the concept of close blockade 

in the North Sea, characterized by warships dashing after merchant ships and closely observing every 

German port, to distant blockade, based on cruisers 

at the entrances to the North Sea. Nonetheless, the 

Admiralty regarded economic pressure as being the 

RN’s basic contribution to the defeat of Germany, 

with the containment of the High Seas Fleet, or its 

destruction if it came out, a close second.3

The Admiralty correctly appreciated that it 

might win the war at sea even if it could not destroy 

the German Navy. Distant blockade proved to be 

effective, as much as any other campaign of mercantile interdiction in history, and largely because 

of intelligence, but it was a novelty, and open to 

questions about legality, if also a defensible case in 

law. In terms purely of jurisprudence, the Germans 

were right to challenge the blockade, though their 
3

Part 1: Reading the World’s Mail

response of unrestricted submarine warfare clearly 

was illegal, to a gross degree. 

Blockade Evolution

Initial Attempt

In the opening months of the war, Britain literally did not know what its policy on blockade would 

be. Britain’s hand was forced when it discovered that 

German and American firms were cooperating to 

send vast supplies to neutral countries for shipment 

to Germany. A coalition of Chicago meatpacking 

firms sent 23 million pounds of meat and lard to 

Denmark. American firms massively increased their 

shipments of copper to Italy, Scandinavia, and Switzerland, raising their exports to those markets from 8 

million tons per year to 33 million tons in 4 months. 

At that rate, Germany easily could maintain its prewar imports of copper through neutral neighbors, 

avoid any problems with its food supply, and escape 

economic pressure.

Britain chose to act against these dangers. Information from various sources, especially cable intercepts, was fundamental to this decision and also 

allowed most of these shipments to be seized for 

preemptive purchase before they reached their destination.4

 Having seized these goods, Britain then had 

to justify its actions. Whitehall was divided over how 

to handle these issues, but the German campaign of 

unrestricted submarine warfare simplified the problem. As retailiation, Britian declared the Treaty of 

London (below) null, which strictly speaking was 

easy to do, and then turned to adopt the most rigorous definition of blockade rights and contraband 

which any major state had ever followed. Conveniently, this major state happened to be the Union 

government during the American Civil War. British 

governments thus could use U.S. legal precedents to 

fend off American criticism. 

Legal Basis

Indeed, the entire basis of blockade under international law was uncertain. Between 1900 and 1910 

Britain had led the world toward defining a narrow 

set of rules for blockade and contraband, codified 

through the Treaty of London; however, it had not 

ratified that instrument. Neither had Germany. Had 

the Treaty of London been in force when war broke 

out, Britain would have obeyed it, at least for years, 

so crippling the power of blockade and fundamentally transforming the First World War.

Private property could not have been seized 

without proof that it was directly intended to reach 

an enemy army, while food for civilian consumption would not have been contraband at all, and no 

blockade would have been legally acceptable unless it 

met a rigorous definition of “effectiveness,” perhaps 

including close coverage of German ports in the 

Baltic. Senior naval officers and strategists in Britain 

generally accepted those ideas in the decade before 

1914: in 1903, when testifying before an important 

strategic committee, the Director of Naval Intelligence, Captain Prince Louis of Battenberg, agreed 

that during war, belligerents generally would obey 

“the International Laws of warfare...It is rather difficult to see how civilized warfare can be carried on 

unless you assume that.”5

Dealing with Neutrals

Negotiating with neutral firms and governments 

raised a host of difficulties. Britain and France were 

able to impose blockade in the first place because 

they had overwhelming power in the Atlantic and its 

maritime economy, and a combination of carrots and 

sticks at hand. In the neutral countries, especially the 

United States, the Entente governments made huge 

purchases from all sectors of the economy, and then 

used blockade simply to prevent firms from making 

further money by dealing with Germany. Such prevention was easily implemented because Britain had 

created the architecture for maritime trade, commerce, and finance. The British state or its businesses 
4

Part 1: Reading the World’s Mail

controlled key elements of that system, which they 

could use individually or in combination, to punish, 

coerce, or persuade neutral states or firms.

Britain preferred persuasion, because the effects 

were most economical and least explosive, particularly when confronting the world’s strongest nation, the 

United States, but that ability rested on the power to 

coerce, which often required exemplary acts of punishment. Persuasion was unavoidable, because of the 

need to convince foreign firms and governments to 

reconfigure the pattern of their imports and exports 

to suit Entente demands. This situation easily could 

produce friction and wreck cooperation.

Through much of the war, for example, Sweden 

refused to cooperate with the blockade and won, 

because it had a powerful bargaining position: the 

ability to counter-blockade allied shipments to Russia passing through its territory. The United States 

had even greater power. Generally, however, neutral 

governments and firms preferred to cooperate with 

British efforts at blockade, because it let businesses 

make more money than usual while avoiding punishment. It also allowed states to avoid involvements 

which could be embarrassing or dangerous.

Thus, the Dutch and Danish governments let 

their firms form combines and enter arrangements 

with Britain, whereby they pledged to monitor and 

control their members to ensure that imports were 

not being illicitly forwarded to Germany. Even more 

remarkably, the United States government let Britain 

work with the main American export trades, forming councils which, again, guaranteed good behavior 

among their members, which these firms voluntarily 

did, rather than shelter behind the State Department. Washington also tolerated massive British 

pressure—economic warfare—against some of the 

strongest sectional groups in the United States, such 

as the cotton producing or meat packing industries. 

Evolving toward Interdepartmental 

Use of Intelligence

Meanwhile, economic warfare and blockade 

became the most interdepartmental of all British 

activities. They combined issues of diplomacy, strategy, finance, and economics, which involved virtually 

every department of state, and many private institutions. The Bank of England and the Treasury had 

to be consulted, because finance was central to the 

blockade, as did a new ministry established to procure weapons at home and abroad, the Ministry of 

Munitions. Whitehall was unprepared to address 

these issues, which meant that raw forms of politics 

determined policy. Often for legitimate reasons, other organizations pressed on the Foreign Office’s traditional role in diplomacy. It had to share responsibility in this field, so producing its celebrated decline 

of influence in the formulation of foreign policy.

At the same time, the Foreign Office’s duties 

exploded; diplomats ran many of the departments 

established to manage aspects of the war, especially 

taking on unexpected duties in economic warfare, 

which came to be run by a Ministry of Blockade. As 

the professional diplomat who came to the highest 

position in blockade, Eyre Crowe, wrote explosively 

on Christmas Day 1914, regarding politically explosive negotiations with American meat-packing firms 

about cargoes seized as contraband, “The Foreign 

Office is at a disadvantage in treating this question. 

I am afraid we have too little knowledge and experience to be able to conduct a negotiation of this kind 

with wily American Jews.”6

Interdepartmental Use of Intelligence

The Admiralty had hoped to run blockade, but 

quickly placed second to the Foreign Office in that 

task. Blockade was a delicate and dangerous diplomatic issue—not merely the Foreign Office’s most 

important task during the Great War, but its central 

one, and among the greatest triumphs in its history. 

Even more, the Foreign Office came to dominate 

the use of intelligence in the blockade and economic 
5

Part 1: Reading the World’s Mail

warfare, with much effort and constant skirmishes 

against the Naval Intelligence Division and its formidable head, Admiral Hall, as well as the Trade 

Division, the Admiralty’s analytic unit which handled the blockade. Here, again, Whitehall faced a 

new phenomenon; over the previous fifty years intelligence rarely had been significant on more than one 

matter at a time, nor had it been fundamental to 

interdepartmental decisions or disputes. 

At the outbreak of war, intelligence services 

sprang up like mushrooms, often remarkably good, 

but uncoordinated until 1916-17, leading to redundancy and missed opportunities; not until July 1916, 

for example, did the ‘Political Section’ of Room 40 

realize that censorship, run by the Military Intelligence Department, intercepted the encoded cables 

of foreign governments, and begin to exploit masses 

of material it had been able to read months before. 

Only by 1918 did the government effectively coordinate the intelligence services on diplomatic and 

strategic issues and use them in a centrally directed 

fashion.7

 Nowhere was the evolution of intelligence 

more problematical than in economic warfare; and 

yet this also was a success story. The success stemmed 

from the power of British sources and the speed and 

shrewdness by which it exploited them.

 The blockade rested on Anglo-French sea power, and control over maritime cables. When the war 

broke out, Britain destroyed German transatlantic

cables, while the United States agreed that, in order 

to remain a neutral, it could not let wireless messages 

in secret code be sent to or from its territory. When 

confronting the opportunities to block and to read 

such traffic, Britain suffered from the same problems 

it did everywhere with intelligence. Wireless and 

cable censorship initially were not coordinated, nor 

was sea mail systematically examined until late 1916.

Nonetheless, between 1914 and 1915 Britain

read most of the messages crossing the Atlantic and, 

in 1916-19, all of them. This material essentially 

was sent in plain language, or a handful of commercial codes of which Britain had copies, but experience and expertise were needed to understand the 

communications. Whereas letters usually combined 

detail and background, commercial wireless and telegraph messages tended to be short, referring to specific transactions in gnomic terms, and using jargon 

particular to a trade or a firm. They were hard for 

outsiders to comprehend, while firms that were trying to break the blockade often used ruses to cover 

hidden meanings, which might be penetrated only by 

reading many messages between several participants.

Cryptanalysis also was applied in some cases. 

The General Post Office maintained a small “black 

chamber” which examined suspect letters for secret 

ink, while cables were scrutinized to discover espionage traffic being communicated through plain 

language codes. In August 1914 Britain also seized, 

from the London offices of German banks, copies 

Eyre Crowe
6

Part 1: Reading the World’s Mail

of their secret codes, and used them to read some 

radio messages. In a 1917 attack on “a most elaborate 

code” involving veiled language between two Dutch 

and American banks, Pierson and Bossevain, showed 

how they had worked with German interests, so 

violating agreements with British authorities. They 

were punished in an exemplary fashion, to frighten 

other neutral banks away from similar behavior.8

However, in essence the Entente had the chance to 

read the world’s mail in plain language. These advantages took time to be realized.

Enforcing Blockade

Britain did not systematically enforce blockade 

until May 1915, and it worked in an odd fashion. 

Blockade was not applied by far distant weatherbeaten ships—the weather beat the initial efforts by 

the Tenth Cruiser Squadron. The first blockading 

warships were quickly withdrawn and scrapped; the 

second group, passenger liners equipped with guns, 

sailed into a wild winter on the north Atlantic, where 

one simply vanished, presumably in a storm. Afterward, the blockade was enforced in equal parts by 

sailors, intelligence officers, and lawyers, and directed by diplomats.

Sailors found this arrangement hard to swallow. 

In 1916 the Grand Fleet wrote that “the work of the 

10th C.S. in its effect on the whole life of the enemy 

peoples is the primary naval factor in the prosecution 

of the war. Every consular report dwells on the paramount importance of the operations of this squadron 

& the imperative necessity of using every means in 

our power during the forthcoming critical months to 

tighten still further our grip.” This statement exaggerated the role of that squadron, by treating it as 

a euphemism for the blockade as a whole. Without 

British sea power, blockade would have been impossible, but the RN did not dominate its mechanics.9

Certainly, the Tenth Cruiser Squadron patrolled 

the northern approaches to European waters, checking merchant ships and posing a physical barrier to 

blockade runners. One Scandinavian shipping line 

even had its vessels use their wireless personnel to 

monitor RN traffic, gathering material from the 

strength of signals so to guide their own movements 

away from potential contacts.

Blockade runners, however, always were rare. 

Few ship owners dared challenge Britain’s position, 

instead voluntarily calling at control points. By the 

second half of 1916, only 63 of 2,359 neutral merchant ships crossing the Atlantic either way were not 

inspected, either voluntarily or through interception. 

Even these numbers soon vanished through bunker 

control and American entry into the war. Just after 

Jutland the British simultaneously intensified their 

blockade and removed most warships from that duty, 

because they were no longer needed for that purpose, 

which says far more about the war at sea than does 

that battle. Thereafter, that cruiser squadron essentially served as a means to handle enemy raiders, and 

to provide deceptive radio traffic.10

Evolving Enforcement

In key ways, the blockade did not become effective until mid-1915, or mature until mid-1916, just 

months before American entry into the war changed 

the game by ending its greatest problems. As Lord 

Emmot, the head of a central element in British economic warfare, the War Trade Department, noted, 

blockade evolved through “a labyrinth of difficulties. 

Our policy was one of gradually increasing stringency. In other words, it altered from week to week, 

sometimes almost from day to day, but practically 

always in the direction of increased stringency.”11

The blockade worked by stopping the shipment of (a) raw materials, primarily metals and food, 

across the Atlantic Ocean to Germany, and (b) any 

German imports or exports of manufactured goods 

by sea. From early 1915, Britain essentially defined 

most items going to and from Germany as contraband, but other problems remained. Thus, should 

coffee, tea, or cocoa be contraband? Until 1916 

British authorities thought not, but then changed 

their minds. Even at the end of the war, the General 
7

Part 1: Reading the World’s Mail

Staff and the Naval Staff disagreed over this matter. 

Blockade of such items did shake the morale of soldiers and civilians coming from coffee cultures, but 

when Germans bought coffee with hard currency 

abroad, that money could not be used to purchase 

other items.12

Simple mistakes abounded. In 1915 Britain

authorized a shipment of Dutch gold even though 

the Admiralty had wireless intercepts showing that 

this transaction would work to Germany’s benefit, 

which the Treasury and Foreign Office had not seen 

when they authorized the cargo; in 1916 British

banks helped to arrange the finance for shipments 

of Colombian coffee, which the RN then seized as 

contraband. Material which easily would have condemned suspect shipments held as prizes was not 

available to prosecutors, because it was lost in the 

files.13

By 1916 the blockade became mature. Neutral 

states and firms accepted British rules simply as a 

cost of business, for several reasons. Britain clearly 

had established the intelligence, administrative, and 

naval means to monitor the behavior of all firms, and 

to enforce British policy and its definition of blockade rights on them. It then increased that power. 

Through “bunker control,” Britain used its dominance over coal supplies to force all neutral shipping 

firms which wished to operate in the Atlantic Ocean 

either to accept British rules, or to go out of business: it even used this power to force them to carry 

goods for the allies during the worst of the U-boat 

campaign.

Britain also began to ration all categories of 

imports into European neutral states, to simplify 

and strengthen blockade. These levels were defined 

by a combination of historical norms and political requirements. As the able Minister of Blockade 

Robert Cecil, wrote in 1916,

My own strong view is & always has been 

that the only real safeguard is rationing & 

that all the elaborate paraphernalia of black 

lists & guarantees is very largely labour 

thrown away. I am further of [the] opinion that the system of what is called British 

control of imports into neutral countries is 

irritating to the neutrals out of all comparison to its effectiveness. That does not mean 

that our Consuls should not closely watch 

the import trade. But it does mean that 

any attempt to follow each consignment is 

almost certain to fail. 14

Cecil’s statement was overly strong, but the addition 

of rationing to previous measures certainly multiplied the power of blockade, as did American entry 

into the war. 

Robert Cecil, Minister of Blockade
8

Part 1: Reading the World’s Mail

Intelligence: Evolving 

to Effectiveness

The blockade and economic warfare system was 

a triumph of unarmed forces, and of open sources. 

It also marked a revolution. In no other area of the 

war was the power of intelligence so transformed. 

In previous blockades, intelligence had been of limited value, resting primarily on visual sources and 

knowledge of shipping routes, and tactical in nature, 

its role in strategy crippled by the inability to pass 

signals to ships at sea. By 1914, however, developments in sources, organization, and communications 

all enabled distant blockade, because they made the 

problem transparent. 

Developments in Sources

Britain’s two main sources of blockade intelligence were statistics and signals. 

Source I: Statistics

From April 1915 the War Trade Statistical Department (WTSD) carefully compiled and 

analyzed official statistics from across the world. 

This material was used to determine how far neutrals might be trading with Germany, especially as 

a conduit for goods from overseas; to define the 

level of exports in various goods which they could 

be allowed to import; and to convince their governments that the allies were treating them fairly. Statistical intelligence was essential for the working of the 

rationing system. It had a powerful and stable role 

as a source, and was tied as the leading one for the 

blockade between 1916 and 1918. After the war, W. 

E. Arnold-Forster, a major figure on the naval side of 

blockade, argued, 

The fundamental problem of the blockade was, of course, to discriminate between 

neutral and enemy supplies. There were 

two methods by which such discrimination might be made—the evidential and the 

quantitative. The evidential method, unsupported by a rationing system, has now been 

proved beyond question to be incapable of 

maintaining an efficient and equitable discrimination; the blockading power cannot 

hope to be able to so defeat the ingenuity of 

its enemy and of neutral traders as to acquire 

all the evidence which they would like to 

conceal...the basis of the discrimination 

must be statistical.15

Source II: Signals/COMINT

That comment was an overstatement, which 

ignores the centrality of legal enforcement for blockade, where statistics alone were inadequate evidence. 

Nevertheless, it has much force. Compared to statistics, signals intelligence had a more dynamic history, 

more variable consequences, and a broader role. It 

always remained Britain’s main source for evidential 

intelligence and blockade operations, including the 

legal process on which blockade rested and relied, 

and was fundamental to economic warfare. Communications intelligence also was linked to cable censorship in complex ways.

During the war, the word “intercept” had two 

distinct meanings: either to read or to block messages. British censors would read copies of a cable, and 

let it pass, or else delay or block it, with effects ranging from ruining a company’s business to manipulating prices for goods on foreign exchanges. Radio 

messages, conversely, could be read but not blocked 

without the desire (and capability) to jam transatlantic transmissions entirely, which no one did, because 

all sides wanted to maintain the means of communication and the chance to read messages.

In August 1914, however, just three high-power 

radio stations stood in Europe and two in North 

America, with only one link under German control, 

Nauen and its allied Telefunken receptor at Sayville, 

New Jersey. During the war, these stations handled 

their maximum possible load, but cable still carried 

roughly three times as much transatlantic traffic. 
9

Part 1: Reading the World’s Mail

Signals Read by Censorship

Censorship generated staggering amounts of 

material—a quantum leap above the quantities 

provided by any previous or contemporary intelligence service. Between 1914 and 1919, British censorship read eighty million cables, of which eleven

million were temporarily or permanently stopped 

after being sent to government departments for 

action: perhaps twenty-five million radio messages 

were intercepted, and millions of sea mail letters.

The Ministry of Munitions alone received one 

million cables and letters, of which 40,000 were sent 

specifically “for advice before being sent on.” On that 

basis, it sent 1,500 “letters of warning and asking for 

explanation.” Such material also was used to punish 

British citizens for trading with the enemy or falsifying their income tax returns.16

Since international financial transactions routinely involved the transfer of physical items, millions 

of pounds worth of securities or cheques were seized 

by the censorship, and sometimes cashed. Characteristically, when dealing with suspects, the censorship ruled that correspondence “should be allowed 

to continue for the present under the close surveillance of the Censorship” or “should be watched and 

allowed to continue at present, but that anything 

objectionable should be stopped.”17

The War Trade Intelligence Department 

(WTID), of which much more later, advocated a 

different policy, but without effect: “from the point 

of view of intelligence, more is to be gained by letting messages pass freely than by the refusal of cable 

facilities. It is by the regular and continuous communication between suspect firms that we are placed 

in a position to exercise the greatest possible control 

over enemy trade.”18 Cable censorship began with 10 

people controlling and analyzing telegrams, which 

reached 95 by December 1916, and a peak of 802 by 

mid-1918.19

Resulting Data: 1914-1915

This process produced a host of data, which 

almost overwhelmed blockade intelligence during 

the first year of the war, not surprisingly, as this was 

the greatest quantity of intelligence that any analytic 

body had ever been forced to handle. Data was processed poorly, and not analyzed with optimum effect, 

and then thrown straight and raw at decision makers. 

In the opening weeks of the war, commercial cables 

were piled high onto desks at the Admiralty and 

largely ignored.

On 25 October 1914, however, the Admiralty’s 

Restriction of Enemies Supplies Committee ordered 

that this data be assessed and indexed. This was done 

initially through a Neutral and Foreign Trade Index, 

where material was catalogued according to two criteria, the message’s date of receipt and to which of 

twenty commodities groups it pertained, with the 

names of firms, people, and ships then entered on 

individual file cards.20 This database soon was transferred to the Foreign Office.

While an excellent means to monitor the aggregate shipping of key commodities, and to gather 

data for strategic intelligence or economic warfare, 

this index was frustrating when dealing with the 

major problems involved in evidential intelligence 

for blockade, which were the names of firms and 

people. Under this system, two cables from one firm 

on the same day about different commodities, or the 

communications about one cargo on two sequential 

days between two firms, might be entered in different files, which the index could not easily pinpoint. 

Arnold Forster recalled wrestling with 

that vast card index at the Foreign Office 

through which, on any day in 1915 the 

members of the Contraband Committee 

might be seen feverishly searching, in the 

hope of finding some incriminating record 

of the life-history of some obscure retailer 

of bacon or maker of musical instruments 

in a fishing village on the Norwegian fjords. 
10

Part 1: Reading the World’s Mail

During a single morning in 1915 the manifests of ten or twenty ships would be received 

by telegram at the Admiralty, or War Trade 

Intelligence Department, two or three of 

which might consist of 200 or 300 items 

each. Each of these items might be the subject of five or fifty intercepted telegrams, and 

each consigner or consignee might have corresponded under a number of covernames.

21

This harrowing procedure did not prevent communications intelligence from assisting the blockade, 

but did reduce its success. 

Developments in Organization

The War Trade Intelligence Department

These problems were solved in mid-1915 by 

Britain’s finest intelligence assessment body of the 

war, and perhaps of the twentieth century, the War 

Trade Intelligence Department (WTID). It reindexed the older data on blockade intelligence, as 

well as all incoming material, including that from 

a new medium, sea mail. The WTID organized all 

cables on one numerical system, and used the names 

of individuals, senders and receivers, firms and ships, 

in alphabetical order, as means of categorization for 

the index.

Ultimately, the indices contained hundreds of 

thousands of different names, cross- referenced to 

highlight their connections. Whenever one wanted 

information on any name, every reference to it from 

millions of intercepts automatically appeared on the 

index, which was updated constantly. The relevant 

files could be retrieved immediately. This was the triumph of data processing for intelligence in the age 

of the card index.

The WTID achieved this end because it deliberately searched for the finest data processors in Britain, including two female members of the indexing 

staff of Encyclopedia Britannica. The WTID became 

experts in the jargon of all transatlantic trades and 

about the firms which conducted them. It collated all 

current information, gave reasoned daily statements 

of evidence to the Contraband Committee, and 

retrieved and assessed data about specific questions 

with remarkable speed and thoroughness. By mid1916, for example, the General Black List Committee began systematically to work through all WTID 

references on suspects, with the aim “gradually to go 

through the whole card index.”22

WTID Organization

The WTID became a data processing, information retrieval, and intelligence body, and the central 

element in that process for the blockade through 

the end of the war, though responsible to different 

executive branches as time went by. By late 1918, 

it had 333 members, including 40 to 50 seconded 

from the Admiralty and the Procurator General’s 

Department, to handle work related to their departments and also the Admiralty’s original Cable Index. 

The two largest sections—“Carding,” which entered 

data on cards and maintained the index, and “Editorial,” which disseminated material through regular 

reports—had forty-six and seventy-nine personnel. 

Smaller sections included:

•	 History (16 personnel), 

•	 War Office (including guidance for the Secret 

Intelligence Service and liaison with French 

offices, and with 9 personnel), 

•	 Commodities (9 personnel), 

•	 Contraband (30 personnel), 

•	 Export Licenses (49 personnel), 

•	 Commercial Enquiries (20 personnel), 

•	 Censorship (20 personnel), 

•	 Black List (20 personnel), 

•	 Italy (15 personnel), and 

•	 Africa (9 personnel).23

The WTID processed and analyzed vast quantities of communications intelligence effectively 

in real time and enabled an elaborate machine 

to operate with remarkable efficiency. Individual 
11

Part 1: Reading the World’s Mail

members of the Ministry of Blockade, like Robert 

Vansittart, or outside experts often analyzed individual messages in detail. In 1916, for example, 

John Maynard Keynes, attached to the Treasury, 

began one minute with the striking phrase, “For 

the past month or more I have read all the intercepted cables relating to financial transactions 

with Sweden.”24 However, most of that work was 

left to the WTID, which gained a high reputation: 

Cecil described its work as “admirable,” no mean 

phrase in the age of English understatement.25

WTID Demographics

The WTID also displayed distinct demographic characteristics. In Britain during the First 

World War, economic warfare was the only area 

where civilian analysts dominated intelligence on 

strategic topics, and also the one where women 

most entered their ranks. By 1916 the head of the 

WTID, F. Henry Penson, noted that clerks must be 

“really intelligent men of capacity.”26

Soon the gender changed. During the war, 

two areas where women made particular inroads 

among the executive branches of Whitehall were in 

departments associated with the blockade, and with 

intelligence agencies based in London, especially 

sections involving data processing and communications intelligence. These departments had no 

established staff, men were required for the fighting forces, and women recognizably had the skills 

needed for the work.

Women came close to numerical parity with 

men in the civilian agencies responsible for blockade. 

Several hundred women worked in the War Trade 

Department, though the head of that institution 

noted that their presence was hampered by “unfair 

rates of pay.” Treasury rules made it impossible to 

pay women above the bottom rung of the starting salary of a man in First Division, even though 

she “may have higher academic honors, greater 

ability and sounder judgment.” The eight female 

intelligence officers of the WTID (15 percent of 

its strength in that category), received roughly 66 

percent of the salary of their male counterparts, 

though members of both genders were remarkably 

accomplished.27 

Developments in 

COMINT: 1914-1916

Early in the War

Despite its organizational immaturity, communications intelligence most affected the blockade 

during the first eighteen months of the war. This 

material was crucial to the way British authorities 

learned how to understand the environment they 

confronted and decided how to manage it, and then 

to the means that they used to achieve these ends. 

Britain was competing against many rivals, where 

no one knew the rules of play, and many were trying to shape them. COMINT showed with precision, speed, and certainty how these other actors 

were acting and thinking, suggested means to affect 

their intentions and actions, and then monitored 

the effect of these means.

COMINT provided a host of key facts, available from no other source, showing what problems 

existed, as well as what solutions were and were not 

working, thus enabling general lessons to be drawn 

from a host of particulars. Although many key messages were overlooked or misconstrued in the early 

months of the war, communications intelligence 

still provided most of the evidence on the shipments to Germany, which caused Whitehall to take 

a hard line on blockade during late 1914. For the 

next eighteen months, Britain attempted to enforce 

blockade through a system which combined persuasion and coercion, involving voluntary cooperation by neutral firms and states.

Such a system could work only if one knew 

how other actors really were behaving, so enabling 

the guilty to be punished while minimizing damage to the innocent. Failure to punish the guilty or 

too much harm to the innocent would damage the 
12

Part 1: Reading the World’s Mail

helping to form economical bids, and stopping commercial “combinations against the Ministry.”

One of its “most delicate functions” remained 

stopping communications between neutrals “to 

safeguard our supplies, such as, by preventing messages going through between the U.S.A. and neutral 

countries which tended to detract from our source 

of supply of essential war materials.”29 From 1916 

the Ministry of Blockade also used this power in 

an attempt to manipulate exchange rates across the 

bourses of the world.

Meanwhile, COMINT became a source in 

the intelligence products which guided economic 

warfare. Publications like the Admiralty’s “Jottings 

from Intercepted Cables” of 1914-18, or the “Daily 

Summary of Intelligence” by MI6b (the military 

analytical agency for economic warfare), in 1916-

18, consisted primarily of excerpts taken from letter, 

wireless, and cable intercepts, intended to illustrate 

how firms were coping with or evading the blockade, and German efforts to escape it.30

Communications intelligence also became an 

important secondary source for matters such as 

estimates of German munitions production, and 

the widely circulated and influential reports on the 

socioeconomic impact of the blockade on the Central Powers, written by an ex-consul in Germany, 

Max Muller.31

Evolving: 1915-1916

From these lessons, British authorities learned 

in 1915-16 how to establish an evidential and policing system able to enforce the strictest form of 

blockade which they dared to make, in diplomatic 

terms. COMINT remained as important to every 

element of this system as it had been to its creation. 

Intelligence, especially the combination of signals 

intelligence at home and human sources abroad, was 

important to this power and central to its execution, providing knowledge, evidence, and means for 

leverage.

system. In particular, if too many Americans were 

made too angry, they might drive their government 

to challenge the blockade, and thus the Entente. In 

this context, communications intelligence had the 

unique virtue of showing which firms were working 

with the enemy and which ones were honoring their 

promises.

Thus, in early 1915 the British minister in 

Copenhagen recommended that Britain allow five 

Danish firms to import lard, because they were 

trustworthy. Communications intelligence soon 

showed that four of them were trading to Germany.28 Throughout 1915 communications intelligence 

provided a check on the behavior of every single 

firm in the Atlantic economy with whom the blockade was interacting. Even when no action could be 

taken on information, COMINT at least let Britain 

understand what it could not control. It also showed 

the limits to its means of control and thus paved the 

way to improved procedures, such as the rationing 

system. 

Main Source: 1914-1915

Censorship and COMINT were not just the 

main source for blockade operations in 1914-15. 

They also aided economic warfare, by giving the 

Ministry of Munitions some ability to eliminate 

competition and to fix prices. Early in the war, censorship showed that British “touts and option hunters” were making speculative bids for weapons in the 

United States, driving up the prices, as was also happening because the allies were bidding against each 

other to purchase raw materials, often using British loans in the process. These actions quickly were 

stopped.

So too, by blocking or delaying cables from neutral countries, Britain prevented competition for 

purchases of food, metals or munitions in American 

markets, allowing massive reductions in unit costs. 

This practice continued throughout the war: the 

Ministry of Munitions found commercial “intercepts of the greatest value” in forecasting prices, 
13

Part 1: Reading the World’s Mail

by the Tenth Cruiser Squadron or free will, almost 

all ships sailing to Europe were inspected at a port of 

naval control, like Ramsgate, Falmouth, and Kirkwall. Here, cargo, crew, and passengers were scrutinized both through physical means and intelligence, 

via “a vast hinterland of organization engaged in the 

critical evaluation of manifests and cargoes.”33

The names on cargo manifests, crew, and passenger lists were compared to all the information 

held at the WTID. This was found easily through 

its system for information management, with 

reports passing back and forth between London and 

ports of control by telegraph. Ships with manifests 

pre-cleared in the United States via the NAVICERT system passed through ports of control rapidly, because intelligence already had been applied to 

their cargoes, crew lists, and all the individuals and 

firms related to them. 

COMINT and Enforcement

In cases where contraband was suspected, and 

cargoes seized, the blockade was enforced by the 

Treasury Solicitor’s Department before The Probate, Divorce and Admiralty Division of The High 

Court of Justice, a British national court enforcing international law. It accepted secret intelligence 

(especially intercepted correspondence) as evidence, 

and had tough procedures. Here, signals intelligence 

constantly was used as public legal evidence—that 

was one of its main functions in the evidentiary system. These procedures were not kangaroo courts: 

the prosecution could win only with evidence; it did 

lose cases, and then faced penalties.

During the war, one member of the Procurator General’s Department, which ran these prosecutions, wrote that he had 

virtually no case in which I can see any prospect of condemnation without the help of 

intercepted letters, and certainly not without the help of intercepted cables. Further, 

the latter, even when very good ones from 

Thus, blockade struck as many enemies as possible and as few innocents. Intercepting letters, telegraph cables, or wireless messages let Britain know 

when firms were trying to break the blockade, often 

triggering the use of other sources in neutral countries to gather further information on the spot. The 

preferred sources were British businessmen and 

consuls, augmented by private detectives, hired from 

local agencies, like Pinkerton’s in the United States.

Reports from censors, consuls, and detectives 

had a further advantage. They could be used as a 

political weapon: they could safely be given to firms, 

states, and combines to justify British actions against 

one of their own, without losing the source. Indeed, 

the more that neutral firms knew of the power of 

these sources, especially of COMINT, and the more 

they saw it used to guide punishment, the more willing they would be to accept British rules of blockade. This material also was openly used as the basis 

for the public and secret Black Lists, upon which the 

blockade worked.

Frequently, Britain also used informants, especially those able to provide evidence which might 

win a case in the Admiralty Prize Court. The Foreign Office paid one informant 112,500 Swedish 

kroner, or £30,000, a sum equivalent to $3.3 million 

in 2010, for information essential to winning a prize 

court case involving contraband of almost £140,000: 

the Procurator General thought it “one of our most 

profitable investments.”32

So too, if a firm fought a case in the Prize Court, 

or appealed against being placed on a Black List, 

British authorities could gather information from 

its own files, through an examination for discovery conducted by a local notary or accounting firm, 

though such evidence alone naturally was viewed 

with some mistrust. 

COMINT and WTID Information

COMINT was applied directly to every cargo 

Britain inspected. Whether because of interception 
14

Part 1: Reading the World’s Mail

To be trapped by this system terrified businesses. Innocent vessels and cargoes could be held for 

months, disrupting shipping schedules and endangering firms; guilty ones could lose their property. 

British files are filled with pathetic appeals from 

small traders pleading for mercy from His Majesty’s 

Government. All firms wished to avoid these risks. 

That end could be achieved by cooperating with 

Britain, which also offered the chance for unusually 

high profits.

The combination of any of several means—

COMINT, the detention of ships at ports of control, 

Prize Courts, denial of access to coal or cables, being 

named on public Black Lists or the fear of being 

entered on secret ones—gave Britain extraordinary 

power against firms, which made even the greatest 

of them choose to play by “Marquis of Queensbury” 

rules.

Thus, Britain and France were enraged in 1915-

16 by bitter attacks from the Hearst press, combined 

with COMINT showing that its sympathies often 

were pro-German. Hence, after the United States 

entered the war and Hearst’s influence no longer 

was a political problem to them, and when he was 

besieged by the American government and rival 

newspapers, Britain and France, seeing their enemy 

in water up to his neck, took the chance to push him 

in deeper. They prevented his reporters from sending 

stories by cable, crippling his content, and his business. To end this damage, William Randolph Hearst 

surrendered with this formal, if secret, pledge: 

I am perfectly friendly to England, as 

friendly as I know how to be ...While, as I 

said, I am going to do my utmost to aid the 

United States and England and France and 

all the nations associated in this war against 

Germany, it would nevertheless be helpful, 

and at any rate a matter of justice, if this 

embargo were lifted and no restrictions put 

upon our efforts and no reflection put upon 

our motives.36

this point of view, are seldom definitely 

damning, but usually only raise suspicion 

of a prima facie case, which is confirmed 

by a letter. The letter may even be necessary before the cables can be understood—

not only when the letter gives a code, but 

because the letter (though possibly not 

referring to the particular transaction in 

question) shows the relationship or course 

of dealing between the parties, or it may be 

simply because the heading or signature of 

the letter shown [sic] the members of a firm.

I don’t think it is too much to say that without intercepted letters, we shall not secure 

condemnation of half the goods in the Prize 

Court, even if cables etc. are intercepted as 

heretofore: and if the interception of cables 

is also given up, not one percent will be 

condemned.34

So too, after the war, the Procurator General 

described the role of COMINT as “impossible to 

over-estimate”: “without it hardly any evidence 

would have been available by which goods in the 

Prize Court could have been condemned.”35 Normally, COMINT is used as a form of intelligence, 

and occasionally (as with wiretaps in criminal cases) 

as a form of legal evidence: in this rare case, it could 

be fully used for both purposes. Blockade intelligence was perhaps the greatest instance in history 

where COMINT was not simply a form of secret 

intelligence.

Intelligence Impacts

Intelligence let Britain monitor the activities of 

neutrals and friends, and enabled the system of NAVICERTS and the rings of firms in foreign countries 

through which Britain managed the blockade, with 

the optimum mixture of ease and security, and so 

prevented or punished treachery. Meanwhile, intelligence and the working of the system of inspection 

and law had a broader political impact.
15

Part 1: Reading the World’s Mail

Mann, congressman from Illinois and the Republican Party minority leader in the House of Representatives. The ambassador later warned that Mann 

“is a packer’s man and is dangerous. Also packer’s 

political and financial influence is strong in [the] 

Middle West, and they are assuming character of 

protectors of farming interest.”

To end the squabble, British authorities were 

willing to buy the condemned meat, but at a lesser price. The value of the cargo was disputed, but 

estimates varied around £2-4 million. One Treasury 

official placed it at “nearly 3 million sterling,” or $15 

million (about $330 million in 2010 dollars). While 

the Foreign Office was “quite ready to expedite 

these negotiations,” the firms “intended evidently to 

string out negotiations and meanwhile to put goods 

into Germany through every neutral port.” Britain’s 

offer also depended on, as Crowe wrote, “the probability of obtaining condemnation.” The Procurator 

General doubted he could win the case.37

Then COMINT transformed the case like 

lightning. It had been secondary in the decision to 

stop the convoys, just providing hints to confirm the 

COMINT and Enforcement

The odd nature of this power, and its relationship to COMINT, is illustrated by the “Kim case,” 

the central legal decision about the blockade.

Illustration

In November 1914 Britain stopped four American ships, including the S.S. Kim, sailing for Copenhagen with a fortune in meat and lard. The British 

stopped them because of strong evidence, from its 

consuls in Chicago and Copenhagen, that when this 

cargo reached Denmark, it would be transshipped to 

Germany. Once these vessels were seized, the cargo 

began to go bad, so Britain seized and shipped it to 

hungry soldiers. Hence, the meat packers changed 

their strategy. They offered not to protest the seizure 

so long as Britain paid for the meat—at the price it 

would have procured at Copenhagen.

Meanwhile, the meat packers sent smaller shipments of meat to neutral ports and used their formidable political power in Washington, telling the 

British ambassador that unless their aims were met, 

they would exert public “pressure” through James 

James Mann (right) with Speaker of the House Champ Clark, 1911-1919
16

Part 1: Reading the World’s Mail

it stands must be made”; but also “that it would be 

desirable to intimate to the packers in some form 

that in meeting their demands in this conciliatory 

spirit we are trusting to their influence in stemming 

the anti-allied agitation in America.”

The firms accepted these terms, which were 

enforced by the power of the censorship authorities. As Arnold-Forster noted, the meat-packers’ 

agreement provided “complete control” over the 

trade, and bought the meat at 75 percent of what it 

would have cost to buy in London, not to mention 

Copenhagen.38 The packers kindly provided their 

wares to Whitehall well below the market price, 

with their political support in Washington thrown 

in to sweeten the meat. These events were a model 

of the value of intelligence both for blockade and 

economic warfare. 

Limited Impact: Finance

 Another example, however, shows the limits 

even to excellent intelligence. Blockade was slowest 

to move as regards finance, which it did not really 

touch until autumn 1916. That failure created dangers in economic warfare. Working through neutral 

banks (and thus, indirectly, through British financiers in the City [London], even three years into the 

war), Germany could purchase kroner in New York 

with American dollars and use them to buy goods 

in Stockholm, so sheltering the exchange rate of the 

mark; or it could buy zinc in Peru with hard currency and move it to American harbors, stockpiled 

beside interned merchant ships. Then, in case of an 

armistice, Germany immediately could ship such 

goods home, strengthening its position for a future 

war. This danger concerned British intelligence, the 

Admiralty, and the Foreign Office: in 1916 Admiral Hall even perceived a German “intended bid for 

mercantile supremacy after the war.”39

On these issues, intelligence was admirable, but 

action was hard. Censorship, especially from wireless interception, made it easy to trace these efforts 

and to punish neutral banks, simply by withdrawing 

reports of the consul in Chicago. But in 1915, the 

WTID’s re-indexing of old cables enabled discovery 

of proof that two of the six meatpacking firms had 

planned to sell their goods to Germany augmented 

by letters which an informant provided on one of 

them. The hard-bitten lawyers of the Procurator 

General’s Department noted privately that “the success of the Crown was very largely due to statistical evidence” that the cargoes were too large for any 

American sales in Denmark, a large meat exporting 

country, with “the intercepted cables supplying the 

necessary atmosphere of suspicion though affording 

surprisingly little direct evidence on the question of 

destination.”

On this basis, the Prize Court condemed the 

property of the meat packers. Britain had a hammer against the firms, which it swung like thunder. 

It declared contraband the shipments which clearly 

had been intended for Germany, expropriating much 

of the property of those firms, as an example. Britain 

then made a one-time and time-limited offer to the 

firms.

It would pay for the remaining cargoes, but at 

the price they would have received in London. Britain would withhold fifty percent of that price until 

after the war, and pay it only to firms which made 

no further attempts to ship goods to Germany. Britain also insisted that the firms report every instance 

they discovered of attempts to ship contraband. 

Beyond that, off the formal record, the meatpackers were made to leash their dog in the House of 

Representatives, and press Mann to heel behind the 

Entente: the Procurator General offered terms even 

this generous to the meatpackers only because the 

Foreign Office emphasized the importance of this 

matter.

Crowe noted that, with the 1916 election looming, Foreign Secretary Edward Grey was “anxious for 

political reasons to obtain a settlement at the earliest 

possible date and therefore considers that the sacrifice of accepting the latest offer of the packers as 
17

Part 1: Reading the World’s Mail

A Finance Section of the Ministry of Blockade 

was established to “dis-arrange and hamper, so far as 

possible, the financial system adopted by the enemy 

in the circumstances of the war,” especially its ability 

to use “the considerable funds accumulated in various ways” in the United States. This Section sought 

to exploit London’s status as “the great Clearing 

House for the financial transactions of the world,” 

without damaging it by driving neutral bankers to 

work directly with New York rather than through 

the City.

The Finance Section acted through “firstly, the 

detection and blocking of the chief channels used by 

the enemy, and, secondly, the detection and prevention of particular transactions.” It had the full-time 

assistance of “three of the foremost foreign exchange 

Authorities in London.” Its sources were statistical, 

weekly returns of the dealings of British banks in 

various currencies and exchange rates across the 

world, and the assessments of English financiers, 

but above all cable and wireless intercepts. Its primary modes of action ranged from “hint(s) to Banks 

in the U.K. that it was undesirable to deal with certain firms—a policy which these Banks always had 

loyally acquiesced in and always would do so”—to 

blocking the cables of specific firms.44

However, Britain did not really exploit its 

extraordinary intelligence and power in this case 

until the United States entered the war. Between 

July 1916 and February 1917, German banks sold 

$135 million of American currency through neutral 

banks in New York, apparently all that they wished 

to sell.45 The American entry into the war largely 

ended the problem, allowing the allies to guide the 

use of their hammers with remarkable precision, 

though at smaller targets. Britain’s efforts in this 

instance were limited by particular concerns, but 

they also illustrate general problems involved when 

states try to use COMINT to control the behavior 

of major financial institutions. 

cable privileges from them. British financial authorities, however, feared playing this game too hard, for 

fear it would drive foreign firms from the City, and 

so threaten their fundamental aims, to maintain the 

international capitalist system, and Britain’s place in 

it. They opposed any harsh actions until, as Brian 

Cockayne, the chairman of the Bank of England put 

it, Britain was in the “last ditch.”40

In 1915-16 ministers were evenly divided 

between men who wished to avoid “great friction not 

only with the Bank but in the City generally” and 

those who complained that Cockayne felt “entitled 

to decide on the blockade policy of the Government 

and to withhold or grant financial assistance according as he approves or disapproves of their policy.”41

Hence, British authorities played carefully.

In August 1915 they informed all British firms 

dealing with Irving Bank of New York that shortly its access to cables would be blocked, because 

of its constant dealings with German firms. This 

knowledge led to Irving’s offer to abandon dealings 

with German firms, which Britain accepted largely 

because it knew that COMINT could monitor the 

issue. This instance, along with a similar French 

action against Societe de Credit Suisse, were intended as examples to frighten foreign firms into voluntarily adopting behavior which the allies could not 

force onto them.42

Finance: Limits Mitigated

 From mid-1916, however, Britain began more 

systematically to hamper German financial dealings, 

and also to shape speculation in exchange rates, both 

to ease pressure on sterling and increase it on the 

mark.43 Only when the issue reached the last ditch, 

the defense of sterling and the gold standard, were 

the Treasury and the Bank of England happy to tolerate state interference in private enterprise, though 

both soon were forced to follow the Lloyd George 

government’s policy of winning the war.
18

Part 1: Reading the World’s Mail

sible precaution... to avoid anything that might 

give rise to the imputation that H.M. Government 

are using the Censorship for the purpose of securing trade information for the guidance of British firms in extending their commerce abroad.”

So too, the Admiralty Trade Division opposed 

any exchange between British and American censors of telegrams that one had passed, but the other 

had stopped, because it might “have far reaching and 

embarrassing results.” Different attitudes toward 

suspicious cases “will, I think, inevitably lead to the 

accusation of favoring British trade at the expense 

of Americans.”

American critics of the censorship did make 

such claims, with some reason. As part of their campaign of economic warfare, states were using their 

power to destroy German firms and to replace them 

with allied ones. Hence, when censorship showed 

means to harm a German firm and steal its trade, 

Whitehall encouraged British ones to act and 

advised them as to how. Usually it did so only by 

providing consular and press reports, but sometimes 

it gave them COMINT, though officials noted “the 

extreme importance of discretion in handling such 

matters.”46

Thus, Whitehall probably did pass some information taken by the censors from American firms 

to British businesses, though in an episodic rather 

than a systematic fashion, but its chief reservations 

about the United States were less mercenary. Ample 

experience suggested that some American firms 

retained close ties with German ones, and might 

work with them after the war ended, or even during it, so thwarting the blockade and forcing delicate 

negotiations with Washington. Such efforts did, 

incidentally, begin once the armistice was declared 

but before the peace was signed.47

British authorities wanted to be able to monitor 

and hamper such developments, which might radically improve Germany’s relative ability to recover 

from the war, or to fight it. Whitehall did not trust 

Developments 1917-1918

Financial warfare wasn’t the only area changed 

by the entry of the U.S. into the war; enforcement 

was considerably eased, even if censorship was 

complicated.

Enforcement Eased

The evidential system worked better than Cecil 

and Arnold-Forster allowed; it wore down foreign 

firms and states and made them willing to cooperate 

with the blockade as a lesser evil. It inflicted enough 

punishment and coercion to make persuasion possible. They were right, however, to emphasize the 

cost of this success, as well as correct that the rationing system was more effective and less costly, and 

therefore superior from the perspective of economic 

warfare.

COMINT helped Britain to learn this lesson, but in so doing pride of place passed from the 

WTID to the WTSD (the War Trade Statistical 

Department). Blockade became even easier with the 

United States’ entry into the war. Now, under American law, United States firms could not trade with 

the enemy, and Washington voluntarily—enthusiastically—supported British restrictions on shipments to the European neutrals. In 1917-18 blockade continued to function as it had done in 1916, 

based as ever on intelligence, but it was much easier 

to enforce.

Complications in Censorship 

The American entry did, however, cause some 

complications for censorship. Though British 

authorities aided the creation of a system for censorship in the United States and linked it to the 

existing Anglo-French one, they also wished to 

limit American ambitions and fears. The Director 

of Special Intelligence thought it “important not to 

give the United States Government any grounds for 

insisting on taking over themselves the control of 

the mails at present censored by British or French 

Officers.” He ordered his men to take “every pos-
19

Part 1: Reading the World’s Mail

The value of this work declined because the 

allied victory meant that Britain did not actually 

have to pursue the policies which the WTID had 

labored to support. 

Conclusions

In terms of composition, organization, and 

procedures, the areas of COMINT during the First 

World War which most approaches its modern 

practice were blockade and economic intelligence. 

The NSA and GCHQ are more like the censorship 

arm and WTID than they are, say, Room 40. Even 

more: given the degree of British power in the main 

factors at play—warships, finance, communications 

and intelligence—this is among the historical cases 

where international law was most like jurisprudence within a state, being backed by near-sovereign power in detection and enforcement. For all 

of these reasons, this issue deserves wide attention 

from many communities.

Washington to share that view, because Britain and 

the United States differed over the aims of economic warfare with Germany, especially as regards Latin 

America.48 In any case, Britain managed to maintain 

its power in blockade because American authorities 

did not challenge the Anglo-French blockade until 

after the Armistice. 

Technical Peak

During the last eighteen months of the war, the 

WTID worked at its technical peak of performance, 

but that effort mattered less than before. Blockade had become far simpler to maintain, while the 

WTID focused its efforts on aiding a campaign of 

economic warfare that never was realized. In June 

1917, for example, it offered a thorough assessment of the actions of German metals firms and 

their relations with businesses in the United States 

or Spain, assessing how they might act in case of a 

compromise peace, which would allow Germany to 

import substantial quantities of metals.49

The WTID provided detailed assessments of 

the behavior and policy of firms across the world, to 

support attempts to destroy German businesses in 

Latin America, and replace them with Entente ones. 

Decision makers regarded such work as important. 

Even in mid-1918, a leading Foreign Office figure, 

William Tyrrell, could argue,

There is no doubt whatever that the matter 

which more than any other is now occupying the attention of the thinking and influential people in Germany, is the difficulty 

which they will be under of getting raw 

materials as soon as the war stops; the fear 

that they will be debarred from this is one 

of the most powerful levers which we have 

to influence them...The important thing 

is that the Germans should know that we 

have the power to do this if we wish and will 

use this as an instrument in negotiation.50

William Tyrrell, a leading 

Foreign Office figure
20

Part 1: Reading the World’s Mail

the blockade would have failed, or else caused more 

damage to Britain than Germany. Instead, it was an 

important contributor to Germany’s defeat.

Notes

1. The best account of the blockade, with frequent references to the role of intelligence and 

COMINT, remains Archibald C. Bell, A History 

of the Blockade of Germany, and of the Countries 

Associated With Her in the Great War, Austria, Bulgaria and Turkey, 1914-1918 (London: HMSO, 

1937). A useful recent study is Eric C. Osborne, 

Britain’s Economic Blockade of Germany, 1914-

1919 (London: Frank Cass, 2004). Good works 

on the intelligence side are Greg Kennedy, “Intelligence and the Blockade, 1914-17: A Study in 

Administration, Friction and Command,” Intelligence and National Security, 22/5 (October 2007), 

699-721, and Jonathan Clay Rendel, “Information for Economic Warfare: British Intelligence 

and the Blockade, 1914-1918,” (PhD diss., University of North Carolina at Chapel Hill, 1993). 

2. CC (TBS)-7, CAB 15/21.

3. Compare Admiralty to Home Fleet, 26.10.11, to 

Admiralty to Commander in Chief Home Fleet, 

11.7.14, “War Orders No. 1 (War with Germany),” ADM 137/1936. Other useful sources 

include, memorandum by Slade, 12.1.16, passim ADM 137/1164; memorandum by Ottley, 

17.2.11, passim, CAB 17/87; and the minutes 

and memoranda of The Sub-Committee on 

Trading with the Enemy in Time of War (1911), 

CAB 16/18A and The Royal Commission on 

Supply of Food and Raw Material in Time of 

War, ADM 137/2872. For prewar British thinking about and preparations for economic warfare, 

see David French, British Economic and Strategic 

Planning, 1905-1915 (London: HarperCollins, 

1982). 

4. ADM 186/603, memorandum by W.E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 36. 

5. Nineteenth Meeting of the Royal Commission 

on the Supply of Food and Raw Material in 

Time of War, 5.11.03, ADM 137/2872. 

The impact of intelligence on the blockade was 

substantial, but it is not simple to judge. Blockade 

had heavy costs for Britain. It created extraordinary 

problems with every neutral power, which could 

have reshaped the war: that this did not happen is a 

triumph of British diplomacy. Even so, the managers of the world economy were applying one hammer to the machine, precisely as the U-boats did 

with another, which had consequences after the war.

The blockade did not really begin to bite until 

1916. The American entry into the war automatically eased its biggest problems. Much of what was 

done with intelligence after April 1917, when the 

system worked best, supported a policy of economic 

warfare which became unnecessary when Germany 

collapsed.

Nor is the effect of blockade on the Central 

Powers simple to assess. Its greatest effect was to 

reduce the food available to enemy populations, to 

attack their morale, and to drive Germany into its 

disastrous effort at counter-blockade, through unrestricted submarine warfare. In these areas, blockade 

intelligence had limited direct effect, though it did 

define the structure which supported these outcomes. The greatest impact of the blockade, and 

of its intelligence, conversely, was over the import 

of raw materials, which crippled the German war 

economy, but did not destroy it. 

Nonetheless, intelligence was a major part of 

the significant factor of blockade and economic 

warfare. Perhaps its greatest consequence was to 

enable effective management. Blockade was all too 

easily employed as a battleaxe rather than a scalpel. 

It could damage relations with firms and states in a 

counterproductive fashion; intelligence helped Britain to wield it with some accuracy. The effect of the 

blockade still is a vexed question, but intelligence 

was a fundamental factor on the margin, minimizing the damage to Britain while maximizing that on 

the enemy. Without the intelligence provided by the 

censorship authority, the WTSD, and the WTID, 
21

Part 1: Reading the World’s Mail

19. DEFE 1/130, History of Cable Censorship, 92, 106-

08, 116-17. 

20. ADM 1/8408/1 Undated and unsigned memorandum, “The Admiralty’s N.F.T. Index.” 

21. ADM 186/603, 58.

22. General Black List Committee, meeting 17.7.16, 

TS 14/24.

23. ADM 137/2735, Meeting at Trade Clearing House, 11.3.16: FO 902/36, 3rd Ministry of 

Blockade Committee meeting, 1.2.17; Undated 

and unsigned memoranda, but late 1918 by internal evidence, “A, Origins and Development of the 

War Trade Intelligence Department” and “B, War 

Trade Intelligence Department,” BT 61/12/7.

24. Minute by Vansittart, 26.2.16, FO 382/911, 

31016; minutes by Keynes, 22.5.16, passim, FO 

902/38. 

25. Minute by Cecil, 20.10.16, FO 382/945, 208145.

26. ADM 137/2735, Meeting at Trade Clearing 

House, 11.3.16. 

27. CAB 15/6/4 Memorandum by Emmott, 27.3.19.

28. ADM 186/603, memorandum by W. E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 54-5.

29. DEFE 1/130, History of Cable Censorship, 

34-35, 106-08, 14-15. 

30. WO 208/3568.

31. The range of his sources is well illustrated by FO 

382/1311. 

32. Foreign Office to Treasury, 26.4.19, Procurator 

General to Treasury, 5.5.19, T1/12319/18761. 

33. ADM186/603, memorandum by W. E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 108.

34. Undated memorandum, “Censorship,” by 

K.H.S., but circa 1916 by internal evidence, TS 

13/138 A.

35. DEFE 1/130, History of Cable Censorship, 136.

36. “Statement dictated by Hearst and handed to 

Col Murray. 2nd January 1918,” Murray of Elibank 

MSS, National Library of Scotland, MS 8805. 

37. Washington embassy to Foreign Office, No 277, 

Commercial, 16.12.14, FO 368/1162; Washington embassy to Foreign office, No 2600, 24.11.15, 

TS 13/15A; Minute by Crowe, 5.1.15, Foreign 

Office to embassy, Washington, telegram No 

6. Minute by Crowe, 25 December 1914, FO 

368/1162.

7. John Ferris, “Now that the Milk is Spilt”: 

Appeasement and the Archive on Intelligence,” 

Diplomacy & Statecraft, 19/3, September 2008, 

527-565, and “British Intelligence and the Old 

World Order,” in Greg Kennedy (ed.) Imperial 

Defence, The Old World Order, 1856-1956 (Rutledge Press, 2008), 176-96.

8. DEFE 1/130, History of Cable Censorship, 

1914-1919, 51; Fourth Report of the Finance 

Section of The Ministry of Blockade, 30.6.17, 

Note by the Finance Section on Messrs. Pierson 

& Co.,” 21.6.18, FO 902/37. For mail censorship, 

cf. DEFE 1/131, History of Postal Censorship, 

1914-1919. 

9. Memorandum by de Brock, undated, but circa 

December 1916 according to internal evidence, 

“Strength of the 10th C.S,” ADM 137/1910. This 

draft memorandum does reflect the views of the 

Grand Fleet on this issue.

10. Table A, Neutral Vessels Passing Through British 

Blockade Zone, (Period 1st July—21st December 

1916, passim, ADM 137/1212; Minute by Director, Intelligence Division, 1.11.17, ADM 137/1373. 

11. Memorandum by Emmott, 27.3.19, CAB 

15/6/4

12. ADM 186/603, memorandum by W.E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 62-63. 

13. Webb to Hopkins, 25.5.16, FO 381/935; “The 

Censorship, with Particular Reference to the 

work of the Procurator General’s Department,” 

by C.D.N., 19.6.16, TS 13/138 A

14. Minute by Cecil, 12.3.16, FO 382/636, 35107

15. ADM 186/603, memorandum by W.E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 58. 

16. Treasury to Postal Censorship, 23.8.16, T 

1/11960. 

17. DID to Foreign Office, 1.3.18, Director of Special Intelligence to FO 8.3.18, FO 382/2110, 

39020, 44460. 

18. DEFE 1/130, History of Cable Censorship, 

114-15.
22

Part 1: Reading the World’s Mail

43. DEFE 1/130, History of Cable Censorship, 

25-26.

44. FO 902/37, 10.16, “Report of the Finance Section of the Ministry of Blockade”; Meeting 

War Trade Advisory Committee, 4.1.17, CAB 

39/108.

45. Third Report of the Finance Section of the 

Ministry of Blockade, 16.2.17, FO 902/37. 

46. DSI to FO, 11.6.17, FO 382/1776, 117381, 

63183; Trade Division 11.2.18 to Hugessen, 

“U.S.A. and British Censorship”; FO 395/257, 

27378; Memorandum by MTZ, 29.8.18, BT 

61/12/7.

47. Minute by Percy, 12.3.19, WO 32/4899. 

48. Director of Special Intelligence to the Foreign 

Office, 2.2.18, FO 382/2107, passim; memorandum by Ministry of Blockade, “Proposed Economic Offensive,” 21.9.17, FO 833/18; memorandum by Director of Trade Division, 28.6.18, 

passim, ADM 137/2828. 

49. WTID to Foreign Office, 12.6.17, MUN 4/2199; 

memorandum by WTID, “German Activities in 

Spain,” 31.7.18, ADM 137/2913. 

50. William Tyrrell, 21.5.18 to Hankey, CAB 

21/108

201, 26.3.15. FO 382/4, 1355, 32973; Barstow 

to Bradbury, 22.9.15, TS 13/301 A; 24th Report 

of Restriction of Enemy’s Supplies Committee, 

ADM 137/2988.

38. ADM 186/603, memorandum by W. E. ArnoldForster, Lt. Commander RNVR, undated, “The 

Economic Blockade, 1914-1919,” 57; Minute 

by Crowe, 24.2. 16 TS 13/15 B; “The Censorship, with Particular Reference to the work of the 

Procurator General’s Department,” by C.D.N., 

19.6.16, TS 13/138 A. TS 13/15 A has copies of 

most of the documentation on the Kim case. 

39. Minute by Hall, 22.3.16, memorandum by 

Director, Trade Division, 17.5.16, ADM 

137/4354; memorandum by Arnold-Forster, 

6.7.16, No 894, ADM 137/2913; Memoranda 

by WTID, 22.9.16, “Germany’s New Merchant 

Vessels, 1914-6,” RECO 1/335; WTID to 

Reconstruction Committee, 5.9.17, memorandum by WTID, “German Merchant Shipping, 

July 1916, to July 1917,” RECO 1/337; cf. FO 

382/1778, 84050. 

40. Cockayne to Pollock, 8.2.16, CAB 39/69. 

41. McKenna to Cecil, 30.5.16, Cecil to McKenna, 

5.6.16, T 172/372. 

42. Affidavit by Irving National Bank, 11.10.15, 

FO 115/1871; cf. FO 371/2812, 896, passim, FO 

371/2544. 
23 23

The question is how far the Trust affected British intelligence. The Trust purported to be a widespread underground organization within the Soviet 

government, able to subvert or replace the communist regime. If the Trust did influence British intelligence and policy, its influence should be detectable 

in the records.

Thus, after considering the Trust itself, we will 

consider two Trust successes, then consider what 

the existing documentation is, which might contain 

evidence of further successes. One apparently failed 

attempt will be examined as well. Finally, the evidence will be assessed for Trust influence, and appropriate conclusions will be drawn. 

The Trust

During the 1920s Soviet intelligence and security agencies attempted to ensnare opponents based 

outside the USSR, primarily émigré Russian politicians but also foreign espionage organizations. The 

Gosudarstvennoye Politicheskoye Upravlenie (GPU, or 

State Political Directorate) used a ruse as part of its 

effort. It created an organization named “Trest” (the 

Trust), which purported to be a large and well-organized group of monarchists within the USSR. These 

supposed monarchists had infiltrated the organs of 

the Soviet state, which they were in a position to subSummary

This paper will examine the relationship between 

the Trust, a Soviet deception organization, and 

one of its targets, British intelligence against the USSR.

Part 2: The Tale of the Trust: 

The Myth of Soviet Deception of 

British Intelligence in Russia, 

1919-1927

Felix Dzerzhinsky, 

first chief of the GPU in 1918

(Photo courtesy of Commons: RIA Novosti)
24

Part 2: The Tale of the Trust

vert. To give the story credibility, the GPU trapped 

some real and well-known monarchists within Russia, who, along with its own officers, were used in an 

aggressive campaign to contact figures abroad. The 

Trust succeeded in penetrating and disrupting monarchist émigré groups. 

The Trust also has been given credit for doing 

the same, in various ways, to all Western intelligence 

agencies of the day, which we will assess in this paper.

Influential Idea

The tale of the Trust has become one of the most 

influential ideas about the modern struggle between 

secret intelligence agencies, and almost synonymous 

with the working of Soviet espionage. The assumption has been that the latter routinely used controlled 

agents to deceive foreign intelligence agencies, and 

did so with success. This idea affected the actions of 

the CIA during the 1960s and has remained a staple 

among international media.

Cautious View vs. Sensational

Scholars of intelligence, however, have been 

more cautious about the Trust. They have described 

its work in detail and suggested that it fooled Western intelligence services to varying degrees, without 

offering specifics, although the strongest authorities 

on the topic, such as Christopher Andrew, Andrew 

Cook, and Keith Jeffery, indicate that its success 

against British intelligence was limited. Cautious 

comments, however, have done nothing to challenge sensational views, while some serious scholars 

believe that the Trust did have great success against 

Western intelligence agencies.1

Similar Efforts

Prima facie, this case is plausible, because the 

Trust was not an entirely unique matter, contrary 

to the usual supposition. From 1917 to 1918 Britain used controlled agents to support a campaign of 

strategic deception against Germans and Turks in 

the Middle East.2

 During the interwar years, intelligence agencies used controlled agents and practiced deception through them, whether Poles versus 

Germans, Italians against French, or Germans with 

British. 

In this context, the Soviets simply deployed an 

elaborate version of conventional techniques against 

their internal foes, one which they had learned in 

turn through experience with the Tsarist Okhrana. 

The Trust was intended initially to deceive and capture anti-Soviet émigrés, but success against them 

gave the GPU greater opportunities. When working 

against the USSR, all foreign intelligence agencies 

drew heavily from these same groups of émigrés, thus 

exposing the foreign agencies to manipulation from 

Moscow, or from espionage entrepreneurs trying to 

sell false documents forged in the Russian diaspora.

Generally, the Trust has loose parallels to the 

later intelligence system of Malcolm Christie and 

Robert Vansittart, the Permanent Under Secretary 

of State at the Foreign Office, which, between 1934 

and 1939, gathered data from both leading Nazis 

and many opponents of the regime. This situation 

exposed Vansittart and Christie (and, through them, 

Whitehall) to efforts at deception from several parties, including Hermann Goering and the Abwehr. 

This deception, however, was sporadic, while Vansittart and Christie understood the danger and accepted it as the price to acquire good intelligence.3Exposure to fraudulent and deceptive material is a cost of 

doing business for collectors of human intelligence.

Known Successes

Two clear successes by the Trust are known, one 

short-lived and relatively obscure, the other more

lasting and quite famous. Familiarity with them will 

aid in assessing whether there are others to be discovered within the known documentation.

Short-Lived Success

In 1927 British military intelligence in Shanghai 

was deceived for several months by a Soviet agent in
25

Part 2: The Tale of the Trust

Shanghai, Eugene Piek.4 But this was a short-term 

success, without major impact.

Sidney Reilly: The Example 

of a Trust Success

The case for a sizeable effect by the Trust on 

British intelligence centers on one man and one significant, sensational success. Sidney Reilly, born Sigmund Rozenblum in Ukraine in 1874, was a British intelligence officer between 1918 and 1921, well 

known to his peers and to British officials. He was 

an adventurer and fabulist, charismatic, especially to 

women of a certain sort, with a mixed reputation.5

In 1918, while working in Russia, he instigated an 

abortive plot against the Bolsheviks which compromised Britain’s senior diplomat in Moscow, Robert 

Bruce Lockhart, and other Western ambassadors. 

British army intelligence later claimed that it had 

sent Reilly to Russia solely to deal with military matters, and had warned him not to “get into any official 

positions or to get mixed up with politics.”

Reilly had disobeyed those orders and subsequent instructions to leave Moscow for Siberia “away 

from the Political atmosphere in which he was being 

involved.” Military intelligence had other complaints 

against Reilly. They found him unscrupulous and 

“these wives of Reilly... rather tiresome.”6

 Nonetheless, military intelligence and the Foreign Office 

remained impressed by Reilly’s reports and qualities. 

In 1917 they had little knowledge of and few contacts with the Russian left.7

 In this context, Reilly 

had obvious qualifications. As R.H. Campbell, the 

Foreign Office liaison officer with the Secret Intelligence Service (SIS), noted, Reilly “is able to pass as 

a Bolshevik and obtained a passport from Litvinoff,” 

the Soviet representative in Britain.8

During 1920, on behalf of SIS, Reilly organised 

an “anti-Bolshevik intelligence service” in central 

Europe. This service, jury-rigged from Tsarist intelligence and military officers in exile and officials of 

local governments, was loosely led by Vladimir Gregorievich Orlov, once a Russian intelligence officer. 

In 1921, however, as Britain cut expenditure on intelligence and abandoned the policy of intervention 

against Russia, SIS ceased to work with or subsidise 

Orlov, or Reilly. These actions created problems for 

intelligence then, and evidence today. Orlov’s agency 

shaped news or rumours about Russia and continued 

an anti-Bolshevik crusade, but soon fell victim to 

the Trust. Initially, it had credibility among foreign 

espionage agencies but that reputation collapsed, as 

many of its members became intelligence entrepreneurs, forging and selling Soviet documents, while 

Germany and the GPU manipulated others. Orlov’s 

echo chamber became polluted with forgeries and 

disinformation, and then flooded the airwaves. Thus, 

during the 1920s, even a good espionage system 

which penetrated Soviet agencies and avoided the 

Trust, still would collect forgeries and disinformation. This situation hampers historians seeking to 

judge the quality of these services solely from their 

reports, or the parts which are in the public domain. 

The full story can be garnered only through full 

access to archives on Soviet and western intelligence 

agencies, which is not imminent. 

By 1921 the Foreign Office and SIS broke with 

Reilly, but his connections remained powerful at the 

highest levels of the state and the middle echelons 

of British intelligence. In late 1921 the war minister, Winston Churchill, pressed the foreign secretary, Lord Curzon, about the émigré Russian politician Boris Savinkov (or Savinkoff ). In particular, 

Churchill claimed, Savinkov had been approached 

to join the Soviet government by its representative 

in London, Leonid Krassin. This statement, retorted 

the permanent under secretary and the direct overseer of SIS, Eyre Crowe, was inaccurate:

According to what C [the Chief of the 

Secret Service, then Mansfield Cumming] 

has been able to ascertain it was Savinkov 

who approached Krassin but met with a far 

from favorable reception...I should have 

mentioned that we are still awaiting from 

our Passport Control Officer at Paris an 
26

Part 2: The Tale of the Trust

explanation of how he came to grant a visa to 

Savinkoff enabling him to come to London, 

when it had been decided here not to grant 

such authority. I have meanwhile ascertained that the notorious Mr. Reilly, who 

has always been a close friend of Savinkoff, 

and who is also in touch with Mr. Churchill, 

recently tried to get C to instruct the Passport Control Officer at Paris to grant a visa 

to Savinkoff. C refused. Reilly thereafter 

went to Paris and is known to have seen the 

Passport Control Officer; evidently he persuaded him somehow to grant the visa. 

Then, Reilly engineered Savinkov’s meetings 

with Churchill and Krassin, and “possibly” involved 

even Prime Minister David Lloyd George in these 

activities.9

Despite this hostility from the heights of SIS, 

Reilly retained some credibility among British intelligence officers, and ranked high on the USSR’s 

enemies’ list. In 1925 he was trapped by the Trust: 

he was lured into entering the USSR where he was 

arrested, interrogated, and executed. In 1927, the 

same year as the success against Piek, the Soviet 

newspaper Izvestiya announced Reilly’s death, and 

outlined the broadly accurate confessions it said he 

had made about his work with British intelligence. 

In discussing a Parliamentary Question on the matter, Neville Bland, the Foreign Office liaison officer 

with SIS, recorded this mixed tribute: 

It is perfectly true that we did at one time 

make considerable use of Reilly. He was a 

man of great courage, inspired by a virulent 

hatred of the Bolsheviks, which, coupled 

with a somewhat unscrupulous temperament, made him a rather double-edged tool. 

This did not prevent people in high places, 

including Mr. Lloyd George, from coquetting with him. Another of Reilly’s characteristics was to exaggerate his own importance 

and go about boasting of his subterranean 

activities: this tendency accounts not only

for the publicity which has obtained, but 

also in all probability for his fate...In all the 

circumstances, I think the less that is said in 

answer to this question, the better.10 

Documentation

The documents on British policy toward the 

USSR are excellent. The records for British communications intelligence, especially from the Government Code & Cypher School (GC&CS), are complete for the 1920s. Those on security and human 

intelligence are good, if incomplete, for 1919-23, 

when reports from SIS, MI5, Special Branch, Indian Political Intelligence, and the Criminal Intelligence Department (CID) of India, were routinely 

entered in operational files, making their impact easy 

to judge. Even more, these SIS reports also attribute specific items of information to sources who 

are described both by their codewords and through 

detailed accounts of their background and access. 

The quality of this evidence is damaged by a 1924 

change in the mode of recording such documents 

Prime Minister David Lloyd George, 1913

(Photo courtesy of Library of Congress)
27

Part 2: The Tale of the Trust

in policy files, making SIS reports rarer and their 

description of sources sketchier. Still, much material 

from security and human intelligence agencies from 

1924 to 1930 remains available, and its impact on 

policy can be discerned. British politicians and officials paid ample attention to intelligence, and their 

debates on policy often centered on it, particularly 

as regards Russia. Public or official means usually 

provided little information on the actions or intentions of the Soviet government, the most secretive 

on earth, making secret sources unusually important.

UK, SIS Success vs. USSR

Certainly, from 1917 to 1921 Reilly and his SIS 

colleagues produced much intelligence, which often 

was good and appreciated by their superiors. In particular, with help from Reilly, Paul Dukes ran a successful agency in Petrograd, where he worked undercover for several years, generating useful and accurate 

reports on social, political, and economic conditions 

in Russia.11 Even at its peak, however, this system 

was just one element of a multipronged effort. Its 

power declined after 1921, though some of its parts 

no doubt were inherited by SIS stations in the Baltic 

States. 

Meanwhile, from 1918 security services penetrated the Communist parties throughout the British 

Empire, by exploiting the full range of sources available—telephone and letter intercepts, bugs, agents, 

and defectors—against attackers who, initially, were 

amateurish. These defensive sources illuminated the 

actions of local Soviet agencies and enabled penetration of the Comintern, which at that time was 

the main Soviet agency for external subversion and 

espionage. This work rose steadily in value throughout the 1920s, augmented by efforts against Soviet 

embassies, the Comintern, and the local nationalist 

movements to which it was affiliated, in Asian countries like Egypt, Persia, and China (the latter handled by two powerful agencies, SIS and the Shanghai 

Municipal Police).

These sources enabled Britain to monitor Soviet 

efforts at subversion and deception across the world, 

and thus to draw strong inferences about policy in 

Moscow. They also provided many documents sent 

to Communist parties abroad from the Comintern. 

Even in the 1930s, when it had no agents within 

the USSR, SIS remained able to acquire significant 

material from the Comintern.12

SIS Istanbul

At the same time the Trust arose, a major UK 

center for human espionage emerged south of 

Russia. In 1920 and 1921 the Istanbul station was 

among SIS’s largest, with eight officers, six clerical 

staff, and representatives from the Army and Navy. 

It also was unusually well financed, receiving £2,200 

per month for all operating expenses. The agency 

was run by the SIS and the Government of India; 

its main personnel, including the head, Major Valentine Vivian, were drawn from an excellent intelligence and counterintelligence bureau, the CID. 

Vivian had been attached to Indian forces in 

the Middle East during the First World War to 

monitor Turkish attempts to subvert Muslim soldiers through Pan-Islamism. That remained his 

initial task when he was sent to Istanbul in October 1918.13 From 1919 to 1921 the agency focused 

on Bolshevik and Pan-Islamic schemes among 

Muslim states, including efforts to subvert India 

(which Vivian described as “the hardest worked 

section as it is largely the raison d’etre of the organization”), focusing on Russians as intelligence 

sources; it ran some of the SIS’s successful penetration of Soviet bureaus between 1920 and 1923. 

Cumming wrote, “My agency in Constantinople 

is one of the most important, if not the most important, of all my agencies”; the head of his Military 

Intelligence section, MI1c, thought “a better service 

of information has never been organized regarding 

events in the Near East.” In early 1922, however, the 

organization collapsed, when the Government of 

India demanded the return of its personnel, includ-
28

Part 2: The Tale of the Trust

ing Vivian. This event crippled the SIS in Istanbul—

Cumming, “staggered,” even contemplated abandoning the station.14

SIS Section V

These changes, even the collapse of the Istanbul 

Station, however, brought broader benefits, as Vivian resigned from the Indian Police to join SIS. He 

became head of Section V, whose function switched 

from political intelligence to counterintelligence. 

For the next twenty-five years, Vivian oversaw 

SIS’s counterintelligence struggle against Soviet 

espionage and the influence of broader forces such as 

Pan-Islamism and the Comintern on anticolonialist 

movements in Asia. Though the outcome, from the 

SIS appointment of Kim Philby to the fall of the 

British Empire, might seem proof of Vivian’s incompetence, the story is more complex than this.

Vivian was an able officer who scored a run of 

successes against the Soviets and had limited responsibility for the failures, where the main weakness was 

appalling security failures by the Foreign Office; 

until 1939, the balance sheet lay on his side of the 

ledger. The ample documentation on the work of 

British intelligence against Soviet and Pan-Islamic 

conspiracies in Asia between 1919 and 1925, matters to which Vivian was central, show that he and 

SIS were able to collect and compare information 

from many sources against hidden and complicated 

enemies. 

Though he (and SIS) suffered from the characteristic common among counterintelligence officers—overstating the existence and the significance 

of conspiracies—his judgment was solid enough, as 

was his experience with difficult sources and conspiracies. He could change his mind on major issues 

when the evidence required it. He knew what good 

evidence was. He collected much of it. He was familiar with lies, forgeries, deception, and conspiracy.15

Vivian, rather than Reilly, is the key figure to 

remember when assessing the success of the Trust 

against British intelligence. When it attacked British intelligence, the GPU was engaging professionals 

rather than fantasists. 

SIS Sources in USSR Government

From 1920 to 1921, moreover, SIS had good 

sources in the Soviet government, with access to 

official documents and to the thinking of high-level 

officials. It believed it had one or more informers 

in both the Soviet Commissariat of Foreign Affairs 

(Narkomindel) and in the Kavbureau, the coordinating body for Communist Party agencies in the Caucasus, which influenced Soviet policy toward Turkey. 

SIS also believed it had less reliable agents in Soviet 

bureaus at Berlin, Helsinki, and Riga.16 That station 

staffed by four men was the center of SIS’s effort 

against the USSR between 1922 and 1940. 

Most SIS reports on the Soviets of that period 

were labeled “A.1,” meaning the source had proven 

reliable and had access to high-level documents, 

some of which his SIS controller had seen in their 

original form. These agents appear to have provided 

genuine and important information on matters such 

as Soviet relations with Turkey and intrigues in Muslim countries. In general terms, and sometimes specific, communications intelligence and other human 

sources often confirmed these reports.17

Such material led SIS to shrewd and mixed conclusions about the strength of Soviet subversion in 

Britain and across the world.18 Some of these sources, 

however, appear to have stopped reporting between 

1924 and 1926, perhaps because they ceased to interest Britain; thus, material from the Kavbureau fell 

in significance after 1923, when Britain evacuated 

Istanbul and fears about Soviet intrigues with Muslim states declined in force.19

Agents in Moscow

Meanwhile, as the fields sown by Dukes and 

Vivian were reaped, a fresh crop of agents began 

to sprout. Increasingly from 1923, and exclusively 

between 1925 and 1931, British human intelligence 
29

Part 2: The Tale of the Trust

in the USSR centered on a series of agents in Moscow, with sources especially in the Comintern, many 

or all of whom were run from Riga Station.

E. H. Carr, who served in the British legation in 

Riga at this time, described its SIS officers as “British 

ex-residents in Russia, who had lost their fortunes 

in the revolution; their narrowness and bigotry far 

exceeded that of the relatively sophisticated people 

in the F.O.”20 A long serving SIS officer, Dick Ellis, 

criticised the “over-close relationship between SIS’s 

Russian speaking officers, using their own names, 

and their Russian agents, and the socialising between 

both groups, which led to a most unprofessional 

lefel of inter-consciousness.” Though its head during the 1920, Rafael Farino does not fit E.H. Carr’x 

stereotype, successor, Harry Carr, and perhaps their 

assistants, did so. Nonetheless, Riga station had the 

appropriate background and opportunity to recruit 

agents. The Soviets themselves saw the Comintern 

as a vulnerable target, presumably because it could be 

penetrated easily from abroad. 

According to the prison diary which Reilly 

recorded on sheets of cigarette paper, recovered by 

the OGPU after his execution and left in his file, a 

chief concern of his interrogators was “whether any 

inside agents anywhere Comintern”: “Repeatedly 

asked re: agents here.” Reilly claimed to have replied, 

“Expl(ain) why agents here impossible—None since 

Dukes.”21

If Reilly indeed made that statement, it was disingenuous, as he believed that SIS did have agents in 

Russia. Between 1923 and 1934, moreover, SIS consistently told its consumers that it possessed multiple 

sources in Moscow. The latter purported to present 

valuable material, some of which demonstrably was 

accurate, when weighed against evidence provided 

by reliable agencies which were independent of and 

unknown to them.

1923-1934: Two Sources

Farina developed two main sources, each with 

many sub-sources: possibly, some of the latter were 

imaginary, while others had been members of Orlov’s 

agency, or were influenced by its product. The nature 

and accuracy of just a few of these sub-sources is 

known. FR/4 allegedly had 24 sub agents, many in 

Moscow. In March 1928, SIS systematically assessed 

the product of one of these sub sources, concluded 

the product was bogus, and fired him. However, it 

continued to have faith in FR/4 himself. FR/3 allegedly had eleven sub-sources. One of them, FR/3/

Moscow ( a.k.a. FR/3/K) worked in the secretariat 

for the Comintern and yielded the Zinoviev Letter. The fact that he had provided so much seemingly accurate and high level material caused SIS 

and the Foreign Office to believe in the Zinoviev 

Letter, just as his involvement with that document 

makes us doubt his other reports. At best, one can 

say that he provided real and fraudulent documents. 

From late 1924, another of FR/3’s sub-sources produced material from the Sovnarkom, the Council of 

People’s Deputies, a second tier Soviet organization, 

but one which reflected policy and preparations. 

This sub-source, known by SIS, probably was a real 

person. SIS assessed his product carefully and concluded that it probably was accurate, as does the only 

historian to have seen their analysis, Keith Jeffery. 

The material from this source in the public domain 

seems plausible, though that also is true of reports 

from FR/3/Moscow, apart from the Zinoviev Letter. 

These seem to have been the two major agents run 

by Riga Station, though FR/4 had one well regarded 

sub-source in1923, at least. Any or all of these subsources may have disseminated forged material, but 

there is no sign of systematic disinformation directed 

by GPU. 

FR/3 and especially FR/4, provided ample material on the negotiations for the Russo-Japanese Treaty of 1923, including copies of letters and telegrams 

between the Narkomindel and its representative in 

the Far East, Adolf Joffe. FR/3's sub-source was 
30

Part 2: The Tale of the Trust

described as “an agent having access to documents 

in the Foreign Office at Moscow.” That of FR/4 was 

“a very sure source in Moscow,... closely connected 

with the Eastern Department of the Moscow Foreign Office” and “a trustworthy informant who has 

been able to examine files in the Far Eastern Section 

of the Commissariat for Foreign Affairs, containing dispatches to and from Joffe, Davtian, etc., and 

who has had conversations regarding Soviet policy 

towards Japan with members of the Far Eastern 

Section.”

These reports were backed by other sources, 

which purported to provide high-level material from 

Soviet agencies in the quasi-independent Far Eastern republic. The accuracy of their reporting was 

confirmed by the GC&CS and by official sources 

from Japan, both in general terms and on some specific details. SIS circulated these summaries with 

unusual headings, warning that they should be treated as “HIGHLY CONFIDENTIAL” or “MOST 

SECRET.”22

In 1923 SIS also provided several minutes of 

meetings of the Central Committee and the Politburo of the Communist Party of the Soviet Union 

(CPSU), dealing with foreign affairs, and from the 

Presidium of the Executive Committee of the Third 

International. These reports received a rare heading: 

“This Summary should be treated with the GREATEST SECRECY.” The sources again were FR/3 and 

FR/4, this time in equal force, and providing material from the CPSU and the Comintern, rather than 

the Narkomindel.

Other Sources

The work of those two sources was augmented 

by “informants, closely connected with the Eastern 

Department of the Moscow Foreign Office and the 

Executive Committee of the Third International,” 

and by several agents who may have been foreigners 

attending Comintern meetings, BP 42, BP 32 and 

BP 18.23 In May and July 1923 SIS claimed to have 

three “well placed” and “independent agents in Moscow in close touch with official circles.” 

In 1924 SIS noted, “one of our Russian agencies” 

claimed that the Executive Committee of the Third 

International had ordered the preparation of terrorist activities against its enemies, including the British 

minister to Tehran.24 Between 1928 and 1934 Vivian

often gave MI5 documents provided by new agents 

or sources allegedly reporting from Moscow.25

1923-1930: Main Sources?

The evidence in the public domain, especially 

a careful account of the Zinoviev Letter based on 

privileged access to SIS and MI5 files, suggests 

that between 1923 and 1930, SIS had several major 

sources in Moscow, augmented by many others. The 

independence or interdependence of these sources is not clear, nor are their identities. One source 

was described in 1923 as being in close touch with 

the Executive Committee of the Comintern and, 

in 1924, as working in its secretariat directly under 

Grigorii Zinoviev, the head of that organization. 

Another source, unknown to SIS, was controlled 

through an agent, FR/3 perhaps the one who in 

1924, Riga Station described as “himself a Comintern man.” In any case, some of the reports of this 

source were regarded as valuable and of proven accuracy, which also was true of the material provided 

by FR/3 and FR/4 in 1923. The sources continued to be trusted even after doubts rose about their 

authenticity in late 1924 and also after 1926-27, 

when the Trust became a public matter and British 

intelligence understood how it had operated.26 Judging from the reports generated by Riga station and 

available in British files, the major sources remained 

in the Comintern until 1931 when, apparently, they 

ceased working for SIS. 

What Was Reported

Collectively, these sources provided material on 

wide-ranging topics, from the Sovnarkom, Politburo, 

and Comintern. Their reports were not hysterical—
31

Part 2: The Tale of the Trust

indeed, often they were boring. They portrayed the 

regular functioning of the bureaucracy of a hostile 

government, with internal divisions between Bolsheviks, and illuminated its policy debates and the 

formulation and execution of specific issues. Much 

of this material appears authentic. In any case, it was 

treated as such. 

UK COMINT

Whatever the case with spies, British communications intelligence scored a triumph against the 

Soviets, contrary to conventional views on that topic. 

One of the earliest sources on British codebreaking 

during the interwar years to become publicly available was a valedictory memorandum written in 1944 

by the head of the GC&CS between 1919 and 1941. 

In this document, Alistair Denniston claimed that 

Britain forever lost access to all Soviet cryptosystems 

in 1927, because of statements made to the House of 

Commons by the prime minister, Stanley Baldwin, 

after the Arcos Raid.27 Given the provenance of this 

memorandum and the paucity of other information, 

Denniston’s claims were widely accepted. 

By 1987, however, material in the public domain 

demonstrated that this statement was inaccurate, 

while the subsequent release of the GC&CS’s 

reports from the interwar period enables a different account.28 Between 1917 and 1933 the GC&CS, 

and the cryptanalytical agencies of the British and 

Indian armies, read most of the Soviet traffic that 

Britain intercepted. They mastered the cryptographic systems of Soviet diplomatic and intelligence 

agencies, as much as they did those of any state. The 

GC&CS’s small Russian desk, led by a defected 

Prime Minister Stanley Baldwin Grigory Zinoviev, 

head of Comintern in 1920 

(Photo by Bulla Studio)
32

Part 2: The Tale of the Trust

Tsarist codebreaker, Ernst Fetterlein, provided basic 

and advanced tutorials to other agencies, but the latter were larger and collected most of the fruit. Lowhanging pieces were as tasty as those hardest to reach. 

The Government of India’s codebreaking agency, 

the oldest in the British Empire, mattered as much 

to this effort as the GC&CS: it was here that John 

Tiltman learned his trade. Army signals intelligence 

in the Middle East focused on Soviet wireless traffic. In 1919, for example, it attacked radio messages 

between Budapest and Moscow, including those 

from Vladimir Ilyich Lenin and Bela Kun, showing 

their efforts to cooperate in propaganda and subversion and their difficulties in liaison.29 These bodies, 

backed by the Indian government civil network and 

ephemeral stations in Teheran, Meshad, and Kashgar, had a rare ability to intercept Soviet radio traffic. 

They provided most British solutions of Soviet traffic between 1919 and 1924, including seventy-five 

percent of the “secret information” cited in Curzon’s 

famous Note to the Soviets of 1923.30

Granted, British codebreakers lost some access 

to Soviet systems in 1921 and 1927, after public 

statements compromised British successes in codebreaking, but the GC&CS recovered from these 

defeats quickly. The greater problem was the limit 

not to cryptanalysis, but to Britain’s ability to intercept material. Britain lost access to Soviet diplomatic 

and intelligence systems in London after the Arcos 

Raid not so much because Baldwin was indiscreet, as 

because Britain expelled the Russian Trade Delegation, which wrecked the ability to intercept Soviet 

traffic. 

Diplomatic COMINT

Soviet diplomatic representation in London 

between 1921 and 1927 was sparse, and British success against the codes used there was mixed. After 

1921 Britain rarely gained from attacking Soviet 

codes in Europe, mostly because Soviet diplomats 

there were so few. To communicate with its legations in Tehran and Kabul, however, the USSR had 

to use radio or a telegraph line under British control, 

to which Whitehall gladly offered access. A senior 

diplomat, William Tyrrell, was “strongly in favor of 

granting facilities so that we may have the opportunity of intercepting.”31 Britain also acquired Soviet 

traffic through agents in telegraph offices in Tehran 

and Beijing. 

Between 1921 and 1933, a period when the 

USSR most concerned Britain through its activities 

in Asia, British codebreakers read all the intelligence 

and diplomatic traffic sent to and from Soviet agencies in China, Afghanistan, Saudi Arabia, and Persia, 

and to a lesser degree, Turkey. They also routinely 

read the diplomatic traffic of Afghanistan, China, 

Persia, Saudi Arabia, and Turkey between 1919 and 

1941, illuminating the other side of relations with 

the USSR.

Codebreaking was Britain’s best source on these 

relations, closely followed by stolen documents and 

overt information from officials. These sources gave 

British authorities useful means to determine the 

value, or the lack of it, of every report on the USSR, 

especially from human intelligence. Britain lost 

access to Soviet diplomatic systems around 1933, 

although it no doubt continued to regard them as a 

major target. However, it soon recovered from that 

loss through success against high-level Comintern 

and Red Army traffic which, again, provided precisely the evidence on the USSR that most concerned 

Britain at that time: Soviet military preparations in 

Central Asia and subversion across the world.

A Trust Attempt?

Aside from the two successes mentioned previously, what else relating to the Trust can be found in 

the above documentation? 

In late 1924 SIS was contacted in London, 

through a member of the War Office, by someone 

who appears to have been a representative of the 

Trust, judging by his description, his modus operandi

and his claims. This man, according to an SIS his-
33

Part 2: The Tale of the Trust

tory written in 1970, was an officer of the late Tsarist 

fleet and a leading monarchist. He “claimed to be 

the head of a large secret organization with representatives in ‘every government office in Moscow’, and 

that his agents inspected the contents of ‘every Russian courier bag which crossed the frontier of Russia 

and passed through Germany’.”

That officer appears to have given SIS its first 

experience with the expansive claims made by this 

Soviet deception campaign, though it had monitored 

the Trust as its tentacles emerged since 1922, from a 

distance. As samples of his wares, the naval officer 

gave SIS some accurate information, noting that one 

of its agents in Germany was controlled by the German government (which SIS knew to be true). He also 

provided two reports which allegedly emanated from 

the Comintern. They were almost identical to reports 

earlier provided by the main source of Riga station. 

This duplication of secret material alarmed SIS. 

It had to determine the authenticity of the naval 

officer. Even more, it had to establish if Riga’s source 

or agent or both were a conduit for, or a promulgator of, false or deceptive reports, whether they emanated from the Soviet government, or from the rings 

of entrepreneurs forging Bolshevik documents and 

flogging them as true, or even if its sources were part 

of the naval officer’s organization. 

This situation was doubly explosive because it 

was the Riga source FR/3/Moscow who had given 

SIS its copy of the Zinoviev Letter. That document, 

allegedly containing orders from the Comintern 

about how the British Communist Party should act 

during the general election of October 1924, had 

been leaked to the press, affected the outcome of the 

vote, and become a cause célèbre.32 SIS’s decisions 

about the reliability of the FR3/Moscow source, and 

of the naval officer, were linked with its commitment 

to the authenticity of that document. If the FR3/

Moscow source was not solid, the case for the Zinoviev Letter would collapse, causing embarrassment

for SIS and the Foreign Office. If it was solid, so was 

their position. 

Results of the Attempt

In principle, it might have decided that both 

sources were tainted, or else that each was good 

(though that would have forced it to explain how 

they were related and why it had not known of that 

fact before). Instead, SIS decided not to work with 

the naval officer’s organization, while continuing to 

trust the Comintern source of Riga station, and also 

concluded that the two were distinct.

Precisely why SIS reached this decision is 

unclear from the public record, which lacks any evidence about its relations with the naval officer, and is 

incomplete regarding the Riga source. Reconstructing this matter requires second-guessing an assessment on the basis of incomplete evidence about it. 

In any case, when vetting a new source, SIS’s usual 

practices involved corroboration against material 

already deemed reliable, demands that it provide 

copies of original documents, calls for a critique of 

these reports by consumers, and comparison with 

later developments. 

As Vivian noted of one report in 1934, for 

example, “Since its receipt, we have been comparing 

it with older papers with a view to checking its reliability with the result that we find it a useful and 

probably quite accurate compilation.”33 Reconstruction of SIS’s rationale in the case of 1924 is complicated because it had obvious reasons to defend the 

reliability of the Zinoviev Letter, while its attempts 

to do so were not entirely rigorous. They rested on 

remarkable faith in Riga’s sources, especially FR/3/

Moscow, not surprisingly.

If reliable, it would have been a spectacular source 

by any standard and the best one SIS possessed at 

this period; moreover, it was backed to some degree 

by material stemming from Britain’s penetration of 

the Communist Party of Great Britain (CPGB). 

After hearing the description of FR/3/Moscow pro-
34

Part 2: The Tale of the Trust

vided by C, who by this stage was Admiral Hugh 

Sinclair, Crowe told Prime Minister Ramsay MacDonald that this was a man who “had never been 

known to make a mistake.”34 When a member of the 

Northern Department, William Strang, wrote, “We 

are assured that the letter is of undoubted authenticity,” Crowe noted, “Yes. We have now heard definitely (on absolutely reliable authority) that the Russian 

letter was received and discussed at a recent meeting 

of the Central Committee of the Communist Party of Great Britain.” Crowe later commented that 

“the corroborative evidence obtained in this country 

came from a trusted agent in the Communist party.” 

Bland told the King that the source was “an 

absolutely trustworthy agent in Russia and its receipt 

by the British Communist Party was reported shortly afterward from an entirely independent source in 

this country.” That so much of this language came 

close to the phrase, “absolutely reliable,” perhaps 

never used in any other case for anything except 

communications intelligence, demonstrates the Foreign Office’s regard for both of these sources., and 

perhaps the degree to which it and SIS had oversold 

this matter. Notably, however, the GC&CS provided 

nothing, before or after the event, which illuminated 

the authenticity of the Zinoviev Letter.35

SIS Assessment of the Attempt

SIS’s conclusions on the attempt are clear. 

In 1924 (and later) SIS had powerful and independent means to assess the reliability both of the 

naval officer and the Riga sources, especially FR3/

Moscow. It trusted the latter in the first place, 

because Riga's reports were not contradicted, but 

rather were complementary to or supported by 

material from proven human sources, the GC&CS, 

and British security services. In particular, any Soviet 

effort at deception through controlled agents (or, for 

that matter, any attempt by espionage entrepreneurs 

to systematically feed forgeries through Riga station) 

would have faced problems their authors did not 

understand: surviving contact with the material provided by these other sources, especially the GC&CS, 

and the various British penetrations of the CPGB. 

On the other hand, that process of confirmation 

was not simple. Sometimes, communications intelligence did directly confirm or challenge reports from 

other sources, but generally the relationship was 

looser, especially when it involved monitoring efforts 

at subversion, which were run by small agencies 

operating on a need-to-know basis. Instead, reports 

from public, SIS, MI5, and GC&CS sources, usually 

moved on parallel rather than intersecting lines, providing support for or challenging each other by illuminating complementary but independent parts of 

the same broad issue, rather than by directly addressing the reliability of individual pieces. 

That is, SIS might provide material on the formulation of policy within the Narkomindel, Comintern, or Sovnarkom, while the GC&CS and security 

Prime Minister Ramsay MacDonald
35

Part 2: The Tale of the Trust

services traced reports on its execution, and on the 

information returned to Moscow which shaped policy. Under these circumstances, despite the obvious 

logical problems, a new source seemed reliable when 

it simply was not contradicted by proven ones which 

reported on similar issues, and when they seemed 

to be describing the same broad matter, even in the 

absence of direct corroboration over points of detail. 

 Several bodies of evidence in the public domain 

demonstrate that, in late 1924, SIS decided to 

trust Riga's source, and to avoid the naval officer/

Trust. The first of them stems from the Trust’s 

ensnarement of Reilly, which often is used to suggest that SIS itself was captured. That Reilly was 

notorious, had complex relations with SIS, and 

was overrated by the Soviets, has distorted what 

really happened. The Trust fooled the SIS station 

chief at Helsinki, Commander Boyce and Reilly, 

but not SIS. In early 1925 Boyce, impressed by the 

Trust, encouraged Reilly to contact it, but emphasized that the latter must “keep our business from 

the knowledge of my department...I am not supposed to be connected with any such enterprise.”36

This statement shows that, shortly after being 

contacted by the Trust, SIS ordered a station that 

wished to work with that body to stand aloof from 

it, and that Boyce believed a valuable fount of information was being ignored. Ironically and tragically, 

Boyce used Reilly to contact the Trust, precisely 

because he was not working for SIS, while Reilly 

appears to have acted in part to work his way back 

into the good graces of British intelligence. Second, 

during the mid-1920s, Section V regularly informed 

MI5 about SIS’s new sources in the USSR. These 

reports show no sign of the presence of the Trust. 

They also confirm other evidence that SIS continued to rely on Riga station’s sources, even after Reilly’s disappearance in 1925, and the evidence which 

emerged steadily in 1926-27 about OGPU control 

over the Trust, capped by Soviet publicity about its 

existence, Reilly’s capture, and Boyce’s role as an 

intelligence officer. 

By 1927 SIS and the Foreign Office understood how OGPU systematically sought to penetrate, manipulate, and destroy anti-Bolshevik Russian groups.37 This evidence indicates that SIS saw 

the Riga source as distinct from the Trust, and was 

thus not trapped by the latter. Finally, British files 

for 1925 to 1930 are filled with material allegedly 

derived from the highest levels of the Soviet state. 

Most of it comes from the sources of Riga station. 

None of it is Trust-like. One cannot deny that the 

OGPU may have controlled all of Riga station’s 

sources—merely that if it did, such a control was not 

used to pass the messages of the Trust, but instead 

to report on aggressive Soviet actions which angered 

Whitehall. Both of these facts are powerful pieces of 

negative evidence in their own right.

Assessment

The Trust was trying to attack a British intelligence system which had several established and 

overlapping sources on Soviet diplomacy and subversion. Two of these sources (the GC&CS and the 

various imperial security services) provided excellent 

and reliable material, if usually on topics tangential 

from the perspective of the managers of the Trust. 

They also were unknown to Soviet authorities. Perhaps the human sources run through Riga too were 

authentic, but that matter simply cannot be taken 

for granted, either way. It requires careful analysis of 

tangled evidence. 

Riga Authenticity

To determine why SIS made its decisions on 

these matters is not easy. That the naval officer 

provided copies of some of the same material as 

did some of the main source of Riga station, raises 

obvious questions about the latter’s authenticity. Yet 

the Trust is unlikely to have compromised a source 

under its control in so elementary fashion, which 

suggests it did not run the Riga source until at least 

after 1924. Indeed had it done so, the OGPU would 

have used FR3/Moscow to pass the tale of the Trust. 

Moreover, since the naval officer intended to impress 
36

Part 2: The Tale of the Trust

SIS at the statt, rather than offer false wares, the fact 

that two of the reports he provided were identical to 

some previously supplied by FR3/Moscow, tends to 

support their authenticity, and that of Riga’s agent. 

Again, the fact that the FR3/Moscow gave SIS 

the Zinoviev Letter, which the latest scholarship 

describes as being almost certainly a forgery that 

contradicted Soviet policy, suggests that it was not a 

plant (this conclusion, incidentally, would be doubly 

true if that document were authentic). 

Meanwhile, the material provided by Riga station between 1923 and 1930 seems too detailed, 

diffuse, valuable, and variable to have been used for 

deception. It never passed the sort of message which 

the Trust was intended to transmit, but instead provided a host of details on matters which interested 

Whitehall, and supported hardline policies that 

over a sustained period they could not prove inaccurate, despite constant comparison with reports from 

GC&CS, MI5, and other SIS sources on parallel 

matters. This evidence indicates that the Trust never 

controlled that source. 

The story does not end here, however. Even if 

they were not controlled by the Trust, some of Riga’s 

sources may knowingly have passed some or much 

forged material. SIS reached that conclusion in 1928. 

That possibility is increased by their involvement with 

the Zinoviev Letter. If that document was false, then 

FR3/Moscow clearly passed important forged material to SIS. Moreover, he must have done so knowingly, if SIS’s description of his status was accurate. 

Ironically, on the basis of known facts, one might even 

argue that Riga’s main source was providing forged 

documents, which was precisely why SIS trusted him 

and rejected the overtures from the Trust! 

Riga Authenticity: Significance

This question has broader significance. Between 

1923 and 1930 the material provided by Riga station was important to the formulation of British 

policy toward the USSR, and thus to its diplomacy throughout Asia. When refuting General Staff 

arguments about a Russian threat in Asia in 1926, 

for example, diplomats agreed that Soviet policy 

was “shadowy,” but Britain’s best sources on it were 

papers from the Politburo and Sovnarkom—that is, 

from Riga station.38

Stolen Documents: Authenticity

The most hidden dimension of British intelligence now is the record of stolen documents. Compared to solutions, alas, they are problematical. We do 

not even know how far the record is complete. During the time when GC&CS flimsies were withheld, 

their numbering system at least allowed scholars to 

define their level of ignorance. Nor is the authenticity of such documents clear. British intelligence 

sometimes was fooled by the forgeries of espionage 

entrepreneurs.

Equally, when compared to solutions of Soviet 

traffic and known facts, stolen documents often ring 

true. The SIS took some care to avoid being fooled 

by forgeries, while codebreaking provided checks on 

false reports as did, to a lesser degree, documents 

proven to be genuine. Many of the stolen papers in 

British files seem to have been authentic, but others 

are not, the problem being to tell one from the other.

The SIS seems to have acquired authentic and 

important documents from both Soviet agencies 

in the Caucasus and the Narkomindel in 1922 and 

1923, and others on Soviet aims in Iran in 1925.39

Special Branch’s attacks on the CPGB yielded 

many authentic reports from the Comintern, which 

characteristically survive in the form of muddy 

photographs.40

Riga: Apparently Authentic 

The main run of surviving material derived 

from Riga station between 1924 and 1930 centers 

on Soviet policy in Persia, Afghanistan, and China. 

This material seems generally authentic, or at least 

plausible, when compared to the ample evidence on 

these topics from the GC&CS, and to secondary 

sources based on access to ex-Soviet archives. On 
37

Part 2: The Tale of the Trust

the other hand, the authenticity of some of Riga’s 

material (such as reports that the Comintern wished 

to assassinate the British minister in Tehran) seems 

dubious, and other cases raise suspicions.

Self-Assessment of Threat

No Threat

Thus, documents, so SIS claimed, from a “well 

placed Moscow source” or “a Moscow source which 

has proved reliable in the past,” indicated in 1929 

that the Soviets intended to use the Iranian communist party to attack Britain’s main interest in Iran, 

the Anglo-Persian Oil Company (APOC).41 From 

1929 to 1931 Vivian employed an experienced and 

able military intelligence officer, Gerald Wheeler, to 

create a network, based in Iraq, in order to address 

this issue. “By far the most important object of my 

enquiries was to be the activities of Soviet propaganda and intelligence agencies” against British interests in Persia. After much effort, Wheeler concluded 

there was no threat.

Whitehall had been misled by refugees, forgeries, and its tendency to credit the Soviets “with 

superhuman skill in manipulating Eastern governments and peoples according to the requirements 

of Soviet policy.” He believed that many documents 

about a Soviet attack on Britain were forgeries. 

Many “White Russian refugees... gained a livelihood 

by playing on Western fears of Communism,” especially by creating faked documents. One such forgery, written in Russian in 1928, about communist 

agitation among the laborers of APOC, had been 

compiled with great skill and impressed me with the 

gravity of the threat to one of Britain’s most important interests... Fabrication though it was, this report 

like many others was based on a very good knowledge of Communist achievement in Europe and of 

Communist designs in Asia. It was accepted because 

it fitted in with what had by then become a habit of 

thought; and its original effect persisted even after it 

became known that the report was spurious. Shiloah, 

then named Zevvan Zaslaniia head agent for SIS in 

the Middle East, working against communist organizations ran Wheeler’s network in Iraq and Iran.

This incident throws some doubt on SIS’s “well 

placed Moscow source” through which sub-source 

at FR/3 or FR/4 provided that material is unclear. 

This episode, incidentally provided the first experience with international espionage for Revieaun Shiloah, the father of Israeli intelligence.42 Shiloah, then 

named Revvan Zaslani, a head agent for SIS in the 

Middle East working against communist organizations, ran Wheeler’s network in Iraq and Iran.

No Reflections of Success

Notably, however, no material which fits the 

pattern of the Trust appears in the documentation, 

including many MI5 files of its correspondence with 

the counterintelligence section of SIS about Soviet 

espionage. 

Nor does British intelligence against the USSR 

fall in the pattern assumed by believers in the Trust.

Of course, SIS may have received Trust-like 

reports, which simply are not in the public domain. 

If so, one would expect to see such views reflected 

in British discussions about Russia from 1924 to 

1927, which often were explicit commentaries on 

secret intelligence. No such reflection can be found. 

Instead, Whitehall believed that the Bolsheviks firmly controlled the USSR, and were attacking British 

interests at home and abroad—precisely what was 

reported by every secret source on record. This situation produced anger. 

In 1924 reports on Cheka activities against the 

British mission in Moscow led Crowe to comment, 

“The Russian government is composed of utter 

brutes.” In 1925 Foreign Secretary Austen Chamberlain said, “What strikes me most about Soviet 

Russia is its likeness to a nightmare of Tsarist Russia.”43 In 1926 Crowe’s successor as permanent under 

secretary, William Tyrrell, wrote, 
38

Part 2: The Tale of the Trust

its aims and the Soviets failed spectacularly. Both 

powers succeeded in Turkey, neither in Persia. However, these experiences prove little about the value 

of Riga Station’s sources. Few of their reports are in 

the public domain, if some of those appear authentic 

and important, and their influence on any of these 

issues is hard to trace, though it did exist. Moreover, 

the quality of other sources would have reduced the 

value both of accurate and forged material from 

Riga Station about Soviet decisions at high levels. 

Confirmation bias would lead authorities to look 

for material which supported these other excellent 

sources, while ignoring nonsense. Accurate intelligence would fit in with these other sources, but 

so too any forgeries which reflected public Soviet 

statements. 

Final Assessment

The question of how far these documents, and 

the sources of Riga station, were authentic, can perhaps be addressed by some scholar who compares 

this material with the evidence which is publicly 

available on the Comintern, Politburo, and Narkomindel during that time. These conclusions will 

affect the study both of intelligence and of strategy 

during the interwar years. For several years, British 

policy toward Russia rested either on a host of forgeries or on an army of good reports, among the best 

which any human intelligence service ever gained 

from the USSR—or on both at once. The answer to 

this question will matter. 

Conclusion

That the Trust failed to trap SIS should not be 

surprising. SIS was a poor target for its message. 

Though one cannot easily explain why SIS chose 

to ignore an agency that provided what it thought 

were genuine and significant documents, the naval 

officer’s tale was inherently unlikely, and probably 

seemed so to SIS personnel like Vivian, experienced 

in dealing with the USSR, its espionage and security 

bureaus, and the collection of human intelligence 

from Soviet agencies. Russian monarchists and émiWe are virtually at war with Russia, in spite 

of Russia discarding the time-honored practice of force and substituting for it the more 

invidious weapon of peaceful penetration 

on the one hand in the internal affairs of 

other countries, and, on the other, the stirring up of revolution everywhere in order 

to prevent us from carrying on trade, and 

thereby undermining the commercial prosperity on which our national life depends.44

Between 1924 and 1927 Whitehall was divided 

on lines like those in Washington during the 1970s: 

whether to encourage the rise of better behavior 

from the USSR through engagement, or to treat it 

as a foe. No participant in this debate, however, ever 

argued the Trust message that the Bolshevik system 

might collapse or be transformed in the immediate future. Some statesmen hoped that the Soviet 

system might evolve into a better state, but because 

Bolshevik leaders might change their minds, rather 

than through regime change. These circumstances 

surely would have invoked some reference to the 

message of the Trust, had it ever been received; the 

absence of such references is another powerful piece 

of negative evidence that it was not. 

Their own hatred of communism, coupled with 

anger toward Soviet subversion and rhetoric, drove 

British politicians into pointless policies toward the 

USSR in general, culminating with the rupture of 

diplomatic relations in 1927. Conversely, on its main 

clashes of policy with the USSR during the middle 

1920s, the struggle for influence over independent 

states in Asia, whitehall understood and defeated 

Soviet policy. British policy was cautious, localised, 

and reinforced by good intelligence, the Soviets 

pursued risky aims through adventurist means; the 

leaders of these states varied from incompetent to 

extraordinary. Soviet leaders often publically advertised their intentions, while Britain acquired excellent material from communications intelligence, 

and its diplomats in Afghanistan, China, Persia and 

Turkey. In Afghanistan and China, Britain achieved 
39

Part 2: The Tale of the Trust

eries by Russian émigrés may have done so. One 

may wonder how far the Trust fooled any Western

intelligence service; certainly one should not simply 

assume that it did so, without proof. 

This conclusion challenges the influence which 

the tale of the Trust has had on ideas about Soviet 

intelligence, whether in the CIA during the 1960s 

or the media since 1980. It shows how the intelligence services themselves can suffer from a lack 

of understanding of their history, or from keeping 

too many secrets. More open access to their history 

serves the interests of intelligence agencies as well as 

of the public. 

Notes

1. Christopher Andrew, Secret Service, The Making of the British Intelligence Community (London: Sceptre, 1985), 445-48; Andrew repeats 

these comments in his recent official history of 

MI5, Defence of the Realm, The Authorized History of MI5, (London: HMSO, 2010). Andrew 

Cook, Ace of Spies, The True Story of Sidney Reilly

(London: Tempus, 2004). Much of the literature about the Trust has become associated with 

stories about KGB-controlled operations and its 

influence on Western intelligence officers, especially the long-serving counterintelligence chief 

of the CIA, James Angleton. David Robarge, 

“The James Angleton Phenomenon, Cunning 

Passages Contrived Corridors, Wandering in the 

Angletonian Wilderness,” Studies in Intelligence, 

53/4, December 2009, is the best and most recent 

study of these topics. I am indebted to Dan Mulvenna and Michael Warner for discussions on 

both this paper and counterintelligence. 

2. DMI to GHQ Egypt, 13.1.17, WO 33/905 

3. John Ferris, ‘Indulged in All Too Little’?” Vansittart, Intelligence and Appeasement,” Diplomacy 

and Statecraft, vol. 6, no. 1 March 1995). 

4. Minute by Foreign Office, 1.10.27, KV 3/145. 

5. The best biographical accounts are Andrew Cook, 

Ace of Spies, and Richard Spence, Trust No One, 

The Secret World of Sidney Reilly (Los Angeles: 

Feral House, 2002). The official history of SIS, 

gré politicians, and men like Savinkov and Reilly, 

were vulnerable to the tale of the Trust, because it 

appealed to their taste for the fabulous, and their 

hopes for regime change in Moscow. 

SIS and British decision makers, conversely, 

were not actively trying to overthrow the regime and 

did not believe it was possible. They thought Soviet 

power was here to stay. They simply wanted to know 

what the Soviets were doing, especially their efforts 

at subversion in Britain, Central Asia, and China.

Meanwhile, the accepted view of the intelligence struggle of the interwar years, especially 

between Britain and the USSR, must be revised. 

That struggle was less one-sided than often is portrayed. The USSR was easier terrain for foreign 

intelligence services between 1917 and 1930 than 

it became during the purges. British communications and human intelligence sources were successful against the USSR. They approached the Soviet 

standard for col-lection between 1917 and 1931, 

even excluding the sources of Riga station. 

If the latter were authentic, then Britain beat 

the Bolsheviks in collection. Even between 1931 

and 1939, Britain did fairly well in that struggle, 

though it lost. Only between 1939 and 1949 did 

Soviet espionage decisively defeat Britain. Between 

1917 and 1991 Britain drew even in the collection 

struggle with the Soviets, being perhaps the only 

country which did so. 

One may wonder how far the conventional view 

stems from a conscious decision by British intelligence to understate its success, combined with a 

Russian preference for bluster, for tactical as well as 

cultural reasons. More generally, both sides gained 

intelligence during their turn at bat. The Soviets 

used it poorly, the British better. Sometimes Britain lost this intelligence struggle, generally in places 

it cared little about, like Eastern Europe; but more 

often it won, and in areas it thought important, such 

as Asia. Meanwhile, “the Trust” had no influence on 

British policy, and never fooled SIS, although forg-
40

18. SIS Misc. 27/1, “Review of Communist Movement (Exclusive of British Empire) for the Period 13th November, 1922, to 26th March, 1923,” 

17.4.23, FO 371/9332, N 3426

19. “The Internationalism of Islam: British Perceptions of a Muslim Menace, 1840-1951,” Intelligence and National Security (24/1, February 2009), 

57-77.

20. Jonathan Haslam, The Vices of Integrity, E.H. 

Carr, 1892-1982 (London: Verso, 2000), 36; 

Jeffery, MI6, 195.

21. Richard Spence, “Sidney Reilly’s Lubianka ‘Diary’ 30 October- 4 November 1925,” Revolutionary Russia, 8/2, December 1995, 183.

22. SIS Northern and Far Eastern Summary, No 

1064, 2.2.23, FO 371/9360, N 1106; SIS Northern and Far Eastern Summary No, 1158, 1175, 

11.5.23, 8.6.23, FO 371/9374, N 4409, N 5237; 

SIS No 1147, 1.5.23, FO 371/9374, N 1033, passim. Yakov Davtian was Soviet ambassador to 

Persia. 

23. No 1203, 18.7.23, FO 371/9332, N 6340, SIS 

Northern Summary, No 1128, 10.4.23, FO 

371/5332, N 4279; cf. N 6139

24. SIS to Gregory, 16.5.23, FO 371/9332, N 4636, 

cf. N 3580; SIS to Bland, 8114/1a, 3.12.24, FO 

371/10133, E 10805. 

25. SIS to MI5, CX 1861/V, 14.1.28, KV 3/148, SIS 

to MI5, CX 10996/V, 24.1.34, KV 3/141. 

26. Gill Bennett, “’A most extraordinary and mysterious business’: The Zinoviev Letter of 1924,” 

Foreign and Commonwealth Office, London, 

1999): 70, 78, 82, 87. 

27. This was a “raid on the offices of a British-registered Soviet trading company, Arcos Ltd. It took 

place on 12 May 1927, with 200 police officers 

searching the company’s premises in London, on 

suspicion that the company was a front for Communist subversion, and that it was holding a British army signals manual. However, no evidence 

of subversion was found.” See Jan Palmowski, A 

Dictonary of Contemporary World History (3 ed.), 

(Oxford: Oxford University Press, 2008).

28. John Ferris, “Whitehall’s Black Chamber: British Cryptology and the Government Code and 

Cypher School, 1919-1929,” Intelligence and 

Keith Jeffrey, The Secret History of MI6 (Penguin, 

New York, 136-9, 178-84, provides key evidence 

on the effort.

6. Minute by Pennington, 20.3.19, KV 2/827

7. Campbell to Kell, 20.8.17, KV 2/498. 

8. French to Campbell, 10.10.18, undated minute by 

Campbell, FO 371/3319. 

9. Crowe to Curzon, 28.12.21, Curzon papers, F. 

111/219 B, Churchill to Curzon, 24.12.21, 219 

A. The position of Passport Control Officer was 

standard cover for SIS station chiefs during the 

interwar years. 

10. Minute by Bland, 21.6.27, FO 371/12605, 

N 3088.The best account is now Jeffrey, MI6, 

216-22.

11. For samples of such reports during 1919-21, cf. 

FO 371/6848 and WO 106/621.

12. Memorandum by IPI, 11.6.38, to Mr. Silver, 

L/P&J/ 12/144; cf. KV 3/141. 

13. “Far Too Dangerous a Gamble?: British Intelligence and Policy During the Chanak Crisis, 

September-October 1922,” 139-184, in B. J. C. 

McKercher and Goldstein, Erik (ed.), Power and 

Stability, British Foreign Policy, 1865-1965 (London: Frank Cass, 2003), and “The Internationalism of Islam: British Perceptions of a Muslim 

Menace, 1840-1951, Intelligence and National 

Security (24/1, February 2009), 57-77.

14. Cumming to Seton, 2.2.22, passim, L/MIL 

7/18813; SIS Section 1A to Bland, CX/7488, E 

9945, FO 371/7951. 

15. Cf. “The Internationalism of Islam: British 

Perceptions of a Muslim Menace, 1840-1951,” 

Intelligence and National Security (24/1, February 

2009), 57-77, and KV 3/141.

16. Memorandum, 5.10. ‘Secret’ (no number or 

source indicated) 13.9.22, E. 10554, FO 371/ 

7899. 

17. Memorandum by Leeper, 18.5.22, “Anti-British Activities of the Soviet Government,” FO 

371/8193, illustrates how far British assessments 

of Soviet subversive activities throughout Asia 

during that period stem from SIS, IPI and communications intelligence, though Curzon (minute by Curzon, 30.5.22), complained that this 

material was incomplete.

Part 2: The Tale of the Trust
41

37. Minutes by Wellesley and Chamberlain, 4.7.27, 

passim, FO 371/13213, F 238.

38. X.P. to Hose, CX/2178/19, 10.9.25, L/PS/ 

10/1152; Minutes by Strang, 13.1.26, and Orde, 

19.1.26, FO 371/11775, N 32

39. Compare SIS CX/10771/1a, 8.5.25, E 2728, SIS 

Political Reports 1722/1 and 1434/1, 20/7.25, 

21.7.25, E 4493, FO 371/10841, to material contained within HW 12s for contemporary periods.

40. Scotland Yard to Foreign Office, 3.12.26, FO 

371/11679, F 5335; Bennett, “A most extraordinary and mysterious business,” 16, 18, 20-21, 

passim.

41. Report by SIS “Eastern Department” to Foreign Office, 21.6.29, FO 371/13784, E 3200. For 

Shiloah & British intelligence, cf. Stephen Wagner, British Intelligence and Policy in the Palestine 

Mandate 1919-1939, (Oxford University, D. Phil, 

2014), 207-08.

42. Gerald Wheeler, typescript memoirs, undated 

but circa 1969 by internal evidence, 50 Years in 

Asia, Middle East Centre Archives, St. Antony’s 

College, GB 165-0298, 130-55. 

43. Minute by Crowe, 22,3,24 N 8784, FO 371/ 

10495; Minute by Chamberlain, 3.1.25, FO 

371/10984, N 16.

44. Minute by Tyrrell, 4.12.26, FO 371/ 11787, N 

5425 

National Security, Volume 2, Number 1, January 

1987, 54-91.

29. “Wireless News,” No 110, 27.3.19, ADM 223/4; 

Nos. 125, 135, 11.4.19, 21.4.19, ADM 223/5; No 

206, 1.7.19, ADM 233/8. 

30. Army Department to Military Department, 

India Office, No 10764/9, 2.8.23, L/PS/10/1162.

31. L/PS/11/231, P 1185, minute by Tyrrell, 13.6.23.

32. Bennett, “Zinoviev Letter,” 86-87. 

33. Vivian to Miller, 27.3.34, KV 3/141. 

34. Lewis Chester, Stephen Fay, and Hugo Young, 

The Zinoviev Letter (London, 1967), 176-77 

(this account of Crowe’s words is third-hand, 

being Hugh Dalton’s much later recollections of 

MacDonald’s memory in 1928 of Crowe’s phrase 

of 1924).

35. Minute by Strang 14.10.24, undated marginal 

comment by Crowe, Crowe to MacDonald, 26. 

10.24, Bland to Stamfordham, 27.1024, FO 

371/10478. Notably, in 1928, when the issue of 

the Zinoviev Letter again came to public attention, the prime minister, Stanley Baldwin, publicly stated that it had emanated from an agent 

in the USSR who subsequently had been shot. 

Presumably this statement was drafted by British 

intelligence, to provide some cover for the Riga 

source (Parliamentary Debates, (Commons), 5th

Series, volume CCXV. 19/3.28, column 62). The 

best account is now Jeffey, MI6, 216-22.

36. S.G. Reilly, The Adventures of Sidney Reilly, Britain’s Master Spy (London: E. Matthews and Marrot, 1931), 180-94. Jeffery, MI6, 183-84, supports 

this account.

Part 2: The Tale of the Trust
42

The point of diplomatic intelligence is to aid 

action, by shaping one’s policy or that of another 

party. This aim is not easy to achieve. More often 

than not, diplomatic intelligence provides firstrate information on third-rate issues, or knowledge 

which cannot be applied to policy. Actions, which in 

diplomacy usually are words of influence or threat, 

may be hard to deliver as desired, or with effect, and 

have unintended or counterproductive consequences. 

Intelligence has more direct value in cases of 

diplomatic bargaining, when every party must act, 

and on the same issues. Then, it can let one party 

know the best deal it can achieve and how to get 

there, which cards to play, or not. Information on the 

bargaining strategy and tactics of other players can 

help take tricks, though their value depends on the 

stakes. Diplomatic information comes from many 

sources. Open or official ones usually are the most 

important, but the more that secrecy shapes any 

competition, the greater the value of sources like the 

ability to steal papers, to bug offices, or to intercept 

signals. In all cases, the influence of intelligence on 

diplomacy is hard for historians to judge, especially 

because decision makers often do not state how they 

have interpreted or acted on data, forcing one to 

draw inferences from the evidence. Nor is the effect 

of diplomacy on power easy to judge.

Introduction

Much more has been written about how communications intelligence shapes military 

operations than how it affects diplomacy. Its role in 

these competitions takes different forms. In operations, the classic consequence of intelligence is to 

let you concentrate your strength against an enemy’s 

weakness, or to shelter your vulnerabilities from its 

power. 

In diplomacy the classic consequence of intelligence is to provide knowledge and means for leverage. It shapes influence rather than power. Diplomatic intelligence illuminates the attitudes of states 

and the factions within them. It shows concealed 

levers and hidden hands and means to manipulate 

them: how to act or to signal. It gives good news 

and shows the limits to bad, by increasing confidence 

that unknown and unpleasant developments are not 

happening. Variations every day, in the details of 

access to information and its value, and in the nature 

of actors and problems, reshape normal diplomacy 

and fundamentally affect crises. Minor comments in 

a good source can determine the plausibility of major 

statements in an uncertain one. The reports of one 

party can reveal the intentions of another. So too, 

knowledge may be useless.

Part 3: Gentlemen’s Agreements and 

Gentlemen’s Mail: Communications 

Intelligence and the Diplomacy of 

Naval Disarmament, 1921-1930
43

Part 3: Gentlemen’s Mail

American and British navies. This knowledge about 

a central issue at stake helped American negotiators force Japan to that point, to a 5-5-3 ratio, down 

from the 5-5-3.5 level which Tokyo wanted. Naval 

personnel on both sides thought that in case of war, 

that difference would shape, and perhaps decide, 

Japan’s ability to fend off the United States Navy 

(USN).

Yet the 5-5-3 ratio might have emerged anyway, 

as the United States and Britain both demanded it 

and had strong bargaining positions, while Japan’s 

breakpoint was guessed by the New York Times.1 Nor 

was Yardley’s bureau even the best codebreaking 

organization working on the conference. 

GC&CS

Throughout the 1920s, the British Government 

Code & Cypher School (GC&CS) read, mostly 

in real time, the major codes of most great powers, 

including the United States and Japan. Yardley’s 

organization, conversely, had little success against 

secret British codes. It rarely read anything that was 

not simply sent in the R code, which was designed 

only to cover routine matters from the scrutiny of 

telegraph clerks.

Yardley provided nothing significant on Britain 

during the Washington Conference, except to show 

that England was irritated at the way the American 

ambassador in London handled the negotiations 

which established the conference.2

 This weakness 

prevented the United States from exploiting its 

ability to intercept the large number of revealing 

telegrams exchanged between the British delegation 

and Whitehall, as they debated the details of their 

naval policy, which they had to redefine when the 

conference began, precisely as Japan did.

Equally, however, GC&CS could attack only 

the material it intercepted. Usually, British dominance of international maritime cables provided 

GC&CS ample material to attack, but not in this 

case. Britain could intercept only those telegrams 

Examining three naval disarmament conferences during this period, the communications intelligence of the major parties at each conference, and 

the strategic consequences that resulted allows us 

to assess the effectiveness of communications intelligence upon diplomacy, at least during this time 

frame.

Three Conferences

1921-1922 Washington 

Naval Conference

Yardley’s Bureau

The value and influence of communications 

intelligence in diplomacy are illustrated by one of 

the most celebrated instances of its use in this area. 

At the Washington Conference of 1921-1922, the 

American “black chamber,” led by Herbert Yardley, 

solved secret Japanese telegrams which outlined the 

lowest ratio Japan would accept in the strength of 

battleships and aircraft carriers, compared to the 

Herbert Yardley
44

Part 3: Gentlemen’s Mail

On the other hand, Balfour was bright, while 

Hughes’s proposals undercut the policy of the USN 

more than they did that of Britain, which outmaneuvered the Americans on the details of their bargaining. Meanwhile, United States negotiators used 

Yardley’s intelligence on Japan in ways which suited 

British interests as much as it did their own. The 

success of American codebreaking and the limits to 

that of Britain had no bearing on the major naval 

issues at stake in the conference, on those between 

the USN and the Royal Navy (RN). 

Value in Context 

Finally, the value of Yardley’s material and of 

American success in diplomatic bargaining must 

be placed in a strategic context. Japan did better in 

naval matters at the Washington Conference than 

did the United States or Britain, with its real sacrifice being in abandoning some of its position on 

the Asian mainland. Japan, the weakest of the three 

great naval powers, would have slipped dramatically in relative strength had rivalry continued in 

construction. Japan achieved a far better position 

than this on a 5-5-3 ratio, even though this level left 

it vulnerable in case of hostilities with the United 

States.

Again, through the Washington Conference, in 

both absolute and relative terms, Japan scrapped far 

fewer warships, built or building, than did Britain 

or the United States—the latter actually sacrificed 

more than any other country. In private, the USN 

and the RN agreed that the Washington Naval 

Treaty left Britain notably stronger at sea than the 

United States. The American position deteriorated 

further in coming years, as Britain and Japan both 

built their authorized strength in restricted classes 

of warships, alongside many vessels in unregulated 

categories, especially cruisers.

Though nothing prevented the United States 

from doing the same, it was unwilling to spend on 

sea power. Hence, the USN’s real position declined 

almost to 5-4-3. This development created irritation 

which Tokyo and Washington forwarded to their 

embassies in London or Europe, whereas the United 

States could capture traffic which was sent on transcontinental and Pacific cables between Tokyo and 

its delegation in Washington. Since Tokyo did not 

issue to its embassies in London or Europe the key 

instructions which it sent to its delegation in Washington, GC&CS provided only secondary material 

on Japan during the conference.

GC&CS also acquired little data on American 

policy, as the conference was held in the United 

States, so allowing American decision makers to 

formulate their policy without any need to send 

telegrams about it to embassies abroad. Secretary 

of State Charles Evans Hughes defined American policy before the conference and kept it secret. 

Thus, he swung the hammer of surprise when he 

opened the conference, proposing a massive scrapping of battleships built and building, and a cessation of new construction in them. The chief of the 

British delegation, Arthur Balfour, had to define his 

country’s policy literally as he sat waiting to reply.

Secretary of State Charles Evans Hughes
45

Part 3: Gentlemen’s Mail

traffic, though it still provided useful reports on Japanese policy in China.5

 Conversely, GC&CS, able 

to intercept American and Japanese traffic to and 

from Europe and reading all of their major systems, 

provided valuable data to Whitehall.6

This success, however, did not prevent a collapse 

of the conference, due to irreconcilable differences 

over policies. In particular, while Britain offered 

to extend the 5-5-3 ratio to all categories of warships, including cruisers, it wanted to do so at a level 

of tonnage that no United States government was 

willing to maintain. The Americans insisted that 

the 5-5-3 ratio must rest on a basis which Congress 

would subsidize for the USN—that the RN should 

be cut to a level which the United States could 

afford, rather than the one Britain would do. Britain 

and the United States also differed on the number 

of heavy cruisers which either should be allowed to 

build, because their naval strategies and conceptions 

of the value of such warships were different. Japan, 

meanwhile, insisted that the ratio for lighter warships must be 5-5-3.5, rather than 5-5-3. 

1930 London Naval Conference

After the 1927 conference collapsed, the danger 

of a new naval arms race became seen as a great, 

perhaps the greatest, threat to international peace, 

and to Anglo-American relations. Meanwhile, the 

Washington Naval Treaty required the major naval 

powers to begin a massive and expensive program of 

battleship replacement in 1931, which many politicians were reluctant to do.

Thus, in 1929, when new governments took 

power in Washington and London, they both 

pursued naval arms limitation, but with different 

aims. American president Herbert Hoover married national interest to idealism, aiming to weaken 

British power compared to the United States, while 

also making a better world. In particular, he wanted 

Britain to cut its fleet while letting the United States 

build a substantial number of cruisers.

in Washington, but few warships: though its real 

motivation was cheapness, it tried to characterize 

these actions as emanating from ethics.3

1927 Geneva Conference

The danger of a new naval arms race centering on cruisers became significant to international 

politics by the later 1920s, a moment when hopes 

to remake the world on liberal internationalist lines 

were high. This situation led to a new naval arms 

conference at Geneva in 1927.4

Before and during this conference, Yardley’s 

organization gave nothing to American negotiators, 

partly because it could not intercept much relevant 

Arthur Balfour, 

chief of the British delegation
46

Part 3: Gentlemen’s Mail

During this conference, GC&CS was a strong 

second to Britain’s leading source, namely personal 

contacts with the other delegations. No other source 

mattered at all. Britain was able to monitor any 

diplomacy between other parties by cross-checking 

reports from several sources, including the codes of 

one, or usually both, participants. Its position was 

powerful and one-sided: no other state could match 

British communications intelligence capacity at this 

conference.

The United States had abolished Yardley’s 

bureau several months before; nothing suggests that 

Japanese codebreakers provided any material relevant to the conference, while those of France and 

Italy could not intercept most key traffic related to 

the conference.

One group of American experts appreciated 

the problem. Though the USN had little information on British codebreaking after 1918, it picked 

up rumors, some accurate, about British successes 

against American traffic. By 1929 the USN’s signals 

intelligence organization also was becoming mature. 

As the conference approached, OP-20-G warned its 

superiors that during the Great War, Britain had “a 

very large cryptanalytical section and obtained such 

excellent results that the value of such a section was 

undoubtedly indelibly impressed upon them.” This 

organization “probably [was] still in existence with a 

reasonable number of highly skilled personnel.” OP20-G warned that the transmission of cables about 

the conference between the American delegation 

and the State Department would cause their codes 

to become “hopelessly compromised”; it offered to 

provide a fallback system for “any highly secret communications.” This offer was not adopted.8

MacDonald II

For several months, traffic from the London 

Naval Conference clearly was GC&CS’s top priority, because it held that precedence for MacDonald. 

Success in this sphere obviously was intended to 

buy political credit for the intelligence services as a 

British Prime Minister MacDonald I

British prime minister Ramsay MacDonald, 

leader of the Labour Party, was ignorant of naval 

issues—he caused, for example, great confusion by 

allowing American negotiators to believe that he 

somehow had agreed to let them build one or two 

new capital ships while Britain would construct 

none—and more concerned with spurring world 

disarmament than furthering narrow interests. 

When bargaining with Hoover over naval issues, 

MacDonald did not aim to maintain or strengthen Britain’s position against the United States, but 

instead to change American attitudes, to gain their 

support for further moves toward liberal internationalism and disarmament in Europe.

To impress Washington, he accepted many of 

Hoover’s demands, thus abandoning earlier British positions. In particular, he agreed to scrap large 

numbers of battleships and cruisers, far more than 

any other country, to reduce the level of tonnage in 

cruisers to the size demanded by Washington, and 

to let the United States build more new warships in 

that class, including heavy ones, than Britain. This 

compromise finally created parity between the USN 

and the Royal Navy. In the long run, it crippled 

British sea power; in the very short term, it weakened Britain in disputes with the United States, 

and forced it into intricate negotiations over naval 

strength with all participants.7

 Nonetheless, these 

actions also made possible a new naval disarmament 

conference, where Britain held the communicationintelligence cards.

GC&CS’s Opportunity

As the London Naval Conference occurred 

in its country’s capital, GC&CS had unmatched 

opportunities to intercept traffic to and from the 

American, French, Italian, and Japanese delegations. 

GC&CS seems to have mastered all of these messages, and thus the aims and means of other players.
47

Part 3: Gentlemen’s Mail

became evident would be the case. Such a refusal 

was far less likely with Japan, although in the worst 

case the British and Americans might have signed 

a two-power disarmament treaty, albeit one which 

institutionalized rearmament against the third naval 

power.

In technical terms, two issues were at stake. 

With relatively little discussion, the three powers 

agreed to abandon the replacement of capital ships 

until 1936, when a new naval arms limitation conference would be held, and that Britain should scrap 

five old battleships, the United States three, and 

Japan, one, the battlecruiser Hiei. Debate instead 

centered on comparative tonnage in (a) all classes 

of cruisers, especially (b) heavy ones, armed with 

8-inch guns, and (c) in destroyers and submarines.

The United States and Britain wanted to extend 

the 5-5-3 ratio to all classes of these lighter warships. Japan, however, demanded a ratio of 5-5-3.5 

for lighter warships as a whole, especially for heavy 

cruisers, and to retain an especially large strength in 

submarines. Neither Britain nor the United Statesliked that package, though they were willing to 

accept some compromises on a strict 5-5-3 ratio.

Differences also existed between Britain and the 

United States over their tonnages in light and heavy 

cruisers. In particular, the American delegation 

initially insisted on the right to build twenty-one 

heavy cruisers. While Britain really preferred that 

the USN possess just fifteen heavy cruisers, it was 

willing to agree that the United States would have 

eighteen of them, Britain fifteen, and Japan twelve. 

Britain also knew that if the United States insisted 

on having more than eighteen heavy cruisers, Japan 

would demand more than twelve, forcing Britain to 

increase its requirements in that class, so producing 

a cascade effect that might wreck the conference.

This fact was one of their strongest arguments 

with the American delegation about the number of 

heavy cruisers the USN should procure. Even worse, 

on all of these issues, MacDonald’s pursuit of Washwhole, from a Labour government which was suspicious of them. GC&CS took the rare step of reissuing all solutions relevant to the conference under 

a numbering system, “NC” (e.g., Naval Conference 

007) distinct from its usual six-figure method (e.g., 

007007). This effort had some success, but it was 

limited by MacDonald’s attitudes.

At the start of negotiations over naval disarmament, he gave American authorities unparaphrased 

copies of British diplomatic telegrams, which would 

have, as cryptanalytic “cribs,” aided any reconstruction of its codebooks, had Yardley’s bureau still existed. The Foreign Office, fearing that it was “quite 

on the cards that the U.S. Embassy have scented 

a useful method of trying to break our ciphers by 

asking No. 10 for copies of F.O. [Foreign Office] 

telegrams,” took firm measures to halt this behavior. 

It recorded “that this incident when explained thoroughly scared the P.M.”9

MacDonald read and acted on the GC&CS’s 

material about the London Conference but, a good 

Presbyterian, first he sinned and then repented 

heartily. At some later point, perhaps when discussing international economic issues in 1933, MacDonald warned the American diplomat William Bullitt, 

“that every message sent or received by our Embassy 

in London is decoded at once and is on the desk 

of the Cabinet Minister interested the following 

morning.”10 This statement became common currency among American authorities. Notably, before 

the 1936 London Naval Conference, they took the 

danger of British codebreaking far more seriously 

than they had for the 1930 conference. 

Two Complex Issues

At the 1930 Conference, intelligence was avidly 

used by the Admiralty, Foreign Office and Labour 

politicians, as they confronted complex political 

and technical issues. Whitehall and Washington 

hoped that everyone would reason together, but 

also believed that a naval treaty could be signed 

even if France and Italy refused to join in, as quickly 
48

Part 3: Gentlemen’s Mail

 policy on our part would be a breach of the ‘Gentleman’s Agreement’ which at present exists between 

the United States and ourselves.”11

In particular, Whitehall was certain that the 

prickly American secretary of state, Henry Stimson, 

was searching for signs of bad British behavior. By 

reading Japanese Naval Attache traffic, GC&CS 

also let the Labour Party parliamentary under secretary for foreign affairs, Hugh Dalton, ensure that 

British naval officers were not working with Japanese counterparts to thwart arms control, by briefing 

them to take actions which might make the conference fail. Although Labour overstated the danger, 

it was a possibility. During the conference, Japanese 

diplomats reported that some unnamed and unofficial RN officers were encouraging the Japanese 

naval delegation to adopt a position which might 

have wrecked the conference.12

When the conference began, GC&CS did better than American codebreakers had done at Washington, by reading the traffic of every delegation, 

instead of merely one of them. In general, its product ensured certainty, by confirming the accuracy of 

material acquired through official means, such as 

the impression that no arrangement between France 

and Italy could be reached (as when Benito Mussolini ordered his ambassador in London, “Refrain 

from making any further conciliatory proposals of 

any kind”; “Do not swerve from our position and do 

not make any further conciliatory proposals of any 

kind”), ending any chance of a five-power arrangement, but also indicating that these two countries 

would not prevent a three-power pact.13

GC&CS also made several contributions which 

no other source could provide. It offered reports, 

sometimes the first ones, on debates within the Japanese and American delegations, and of the negotiations between them. Frequently, it provided both the 

American and Japanese accounts of their bilateral 

discussions, as well as their impressions of talks with 

Britain. The ability to monitor all of these issues at 

ington had left Britain with a weak bargaining position. It could not block American demands which 

it disliked, nor look as though it was manipulating 

Japan into opposing them. Unless these conflicts 

could be resolved, the conference would fail, making international relations worse than they would 

have been without it. Equally, compromise was 

possible. Britain worked for the latter, using the 

clash between Japan and the United States to play 

each against the other, and so reduce both of their 

demands in order to further liberal internationalism 

and British interests.

Initial GC&CS Intelligence

Intelligence is about secrets. To negotiate, each 

side had to signal its position to some degree, while 

the Japanese, American, and British civilian delegations were open with each other, in the fellowship of 

liberalism, and had differences with their own naval 

advisors. Yet each state had a bottom line to hide 

and Britain had an edge. It had the means to discover secrets, while the others did not. Before the 

conference, official sources, especially the AngloAmerican discussions where Hoover and MacDonald defined their policies, were Britain’s main 

sources of information. Even so, GC&CS provided 

the first, though predictable, news that in 1930, as in 

1927, Japan would demand a 70 percent ratio (5-5-

3.5) for lighter warships.

Before the conference, GC&CS showed policy 

formation in Tokyo and Washington and the abortive discussions between the two capitals. The failure of these talks was comforting to UK diplomats, 

who could achieve British aims only if Washington and Tokyo remained divided, who feared that 

the United States might maneuver Japan against 

Britain, and yet knew they must not let American 

statesmen think that “we are using the Japanese difficulty as a lever to get the Americans even below 

their figure of eighteen [heavy cruisers]. Any such
49

Part 3: Gentlemen’s Mail

own position, but rather to have other powers make 

offers, which Japan’s negotiators would then try to 

raise. Japanese reports of such conversations illuminated what arrangements they thought were acceptable. GC&CS revealed a key issue for Britain, the 

conflict between Japanese and American policies, 

including details that both sides kept from Britain, 

though it also generally demonstrated that their 

reportage to British delegates was truthful and fairly 

comprehensive.

GC&CS also penetrated the position of the 

Japanese Admiralty, the Kaigunsho, and the Japanese 

Naval Delegation, the truly hidden dimension of 

these negotiations. In particular, GC&CS revealed 

that Japanese naval authorities would oppose any 

sort of agreement which Britain or the United 

States could accept, and thus hamper the freedom 

of action of their civilian colleagues and the chances 

for success at the conference. 

By 13 March 1930, after a month of secret talks, 

the British, American, and Japanese civilian delegations accepted a complex deal which let all claim victory, called the Reed-Matsudaira agreement after its 

negotiators, Senator David Reed and Ambassador 

Tsuneo Matsudaira. The United States and Britain 

offered Japan 100 percent parity in the tonnage of 

submarines, though this level fell beneath the IJN’s 

demands. The United States agreed to abandon its 

demand for twenty-one heavy cruisers, and offered 

to settle for eighteen.

While GC&CS was irrelevant to that decision, 

it shaped another one: the American offer not to lay 

down three of its eighteen heavy cruisers until the 

end of the period covered by the Treaty. In practice, 

though not in theory, this offer would give Japan 

almost a 70 percent ratio to the USN both in heavy 

cruisers and in the aggregate tonnage of all classes 

of lighter warships during the tenure of the treaty, 

while also containing construction on both sides, 

thus nicely suiting Britain.

the same time, generally in real time, illuminated 

Japanese and American perspectives and policies.

In particular, GC&CS provided all of the 

reports of the Japanese delegation, including material which, during the middle stage of the conference, Japan’s naval and civilian sides hid from each 

other, and their backchannel communications with 

different superiors in Tokyo, which were conducted 

on separate cryptographic systems. Whereas the 

British easily read the diplomatic codes, the naval 

traffic, some of it protected by the first Japanese use 

of a cipher machine, was a tougher nut.14

For several weeks, Britain actually understood 

the divisions between and the strategies of the two 

factions within the Japanese delegation better than 

either one of them did. Ironically, these factions 

focused more on hiding their traffic from each other 

than against foreigners, and Imperial Japanese Navy 

(IJN) codebreakers in Tokyo actually were attacking, 

and reading, messages sent by their own country’s 

diplomats.15 Against this, Japanese civilians did not 

hide the fact of these splits, which in turn improved 

their bargaining position against other countries— 

thus, ironically, to some degree codebreaking reinforced Britain’s will to compromise.

1930 Conference: First Two Months

During the tense and inconclusive first two 

months of the conference, GC&CS also provided 

comfort, by showing that an acceptable deal could 

be reached with Japan, as politicians in Tokyo told 

the civilian delegation that when they made the 

best settlement they could, the government would 

sell that settlement at home, and make the admirals 

accept it.16 This knowledge reduced the gnawing 

edge of nervousness which increased Japan’s bargaining position. GC&CS also provided some sense 

of what arrangement the civilian and naval delegations would accept.

That point was significant, because Japanese 

bargaining strategy was not to explicitly define its 
50

Part 3: Gentlemen’s Mail

Crisis in the 1930 Conference

Precisely as a provisional agreement emerged, 

so did a crisis, as the Japanese naval delegation, 

and through them the Kaigunsho, learned for the 

first time what their civilian counterparts had been 

doing. Throughout this crisis, British authorities 

continued to keep British decision makers better 

informed than either Japanese faction, as GC&CS 

read all of the communications sent on both of their 

back channels. GC&CS quickly showed that the 

civilian delegates advocated the offer as the best 

possible deal, and an acceptable one. The only other 

option they saw was to wreck the conference, so 

creating British and American hostility, and possibly increased naval construction, which would be 

against Japan’s best interests.

GC&CS also demonstrated that the Japanese 

foreign minister and prime minister, Kijuro Shidehara and Osachi Hamaguchi, were willing to 

accept the provisional deal. Before they would present it to the Japanese cabinet, however, they wanted 

the civilian delegates to convince the heads of the 

naval delegation, the minister of marine, Admiral 

Takeshi Takarabe, and the technical chief, Admiral Kiyokazu Abo, to offer formal support for that 

offer. Even more, GC&CS revealed that a united 

front of all other members of the naval delegation, 

led by Admiral Isoroku Yamamoto, was preventing 

Takarabe from accepting the offer, on the grounds 

that Japan could get a better deal by holding out and 

especially by working with the French.

Worse yet, GC&CS provided reason to believe 

that such an unholy alliance was at hand, as it finally 

solved a month-old message from the Kaigunsho. 

Had this message been solved when it was sent, on 

8 February, Whitehall would have been concerned 

and might have changed its actions during the period of negotiations. This message (like some others 

solved between 13 and 18 March, but even more so) 

showed that the Kaigunsho absolutely demanded a 

real seventy percent ratio in lighter warships. Rather 

London’s chief negotiator, Robert Craigie, had 

originated this alchemy, and secretly suggested 

that the Japanese delegation fall back on it in case 

of deadlock with the Americans. Craigie, a shrewd 

bargainer with a powerful grasp of the technical issues at stake, was GC&CS’s main consumer 

during the conference. Craigie’s actions stemmed 

from his knowledge of the issues, and intelligence 

on them. Press reports, statements by American 

and Japanese delegates, and solutions of their traffic 

showed the details of their discussions, the internal 

politics of their policy, and the fact that their governments wanted a deal. Acting on this knowledge, 

and able to monitor the reaction of his targets to his 

pressure by reading both their body language and 

their subsequent reports, Craigie pressed the other 

sides to negotiate, fed them a solution which met 

both of their bottom lines while pushing their programs down as Whitehall wanted, and rejected any 

alternatives that Britain disliked.

Even more, he achieved all these ends without 

the Americans suspecting his role, or even in breaking the gentleman’s agreement with Washington: he 

sincerely believed that his proposals were the only 

way to break the deadlock, in which he was probably 

right. Craigie, that is, used communications intelligence on Japan to guide its policy in a direction 

which furthered Japanese (and British, and probably even American) interests. Ironically, GC&CS’s 

solutions of Japanese messages provide a better picture of Craigie’s conversations with that delegation, 

than do the accounts he placed in the official British 

record.

This triumph of policy and intelligence overcame Britain’s bargaining weakness and allowed it 

to meet its aims over cruisers and world disarmament. It was GC&CS’s main contribution to British 

policy during the conference, and a major one. Craigie might have been able to achieve these ends without the support of GC&CS, because his approach 

was an obvious solution to the problem, but the task 

would have been much harder.
51

Part 3: Gentlemen’s Mail

ters, the British informed him of the conclusions 

they reached from codebreaking, which largely 

coincided with what he already knew. In other cases, 

although he was ignorant of GC&CS material, he 

acted precisely as did British statesmen who had 

such data. 

Meanwhile, there is no reason to believe that 

Yardley’s bureau actually could have assisted Stimson 

at the conference, because the United States could 

not have intercepted the backchannel reports that 

the British did, which were sent secretly between two 

small groups of Japanese decision makers in London 

and Tokyo on cables between Europe and Asia, nor 

that he could have provided material which would 

have detected Craigie’s manipulations on the cruiser 

issue. Again, reading American traffic offered Britain few advantages over the United States at the 

London conference, while the British said nothing over cables to Washington that they did not tell 

Stimson face to face. Finally, had Yardley’s bureau 

had any success, the British would immediately have 

known about it, as any such reports would have had 

to be sent to Stimson via codes which the Britishwere reading. 

The British and Americans drove a stake 

through the heart of an unholy alliance by directly 

querying the French and Japanese foreign ministers 

about Doubler’s proposals, aiming to destroy any 

intrigue by showing that it was known. In hindsight, 

Doubler’s actions and the possibility of cooperation 

between the French Navy and the Kaigunsho posed 

little danger, because they were unauthorized by 

the French government and rejected by Shidehara, 

too shrewd to be manipulated, especially by a diplomat whom he held in some contempt and who he 

thought was acting without instructions.19 However, 

these facts were unknowable at the time. The British and Americans ended the problem by bringing it 

into the open, which they had no choice but to do.

than accept anything less, it was preparing to wreck 

the entire conference, by exploiting the stalemate 

between the five powers; this implied that it would 

work with another party. Whitehall feared that 

France might wish to do the same.

GC&CS closely followed all French and Japanese reports of their discussions during the conference, which showed they had some common 

ground. In particular, the French charge d’affaires 

to Tokyo, M. Doubler, was pressing Japan toward 

positions on submarines which might sink the 

conference—indeed, seemed to have precisely that 

intent in mind. British and American statesmen, 

suspicious of France, took this possibility seriously. 

These circumstances threatened catastrophe. Stimson and MacDonald agreed privately that if Japan 

rejected the compromise of 13 March, Britain and 

the United States should sign a two-power arrangement, which maintained the battleship replacement 

program of the Washington Naval Treaty. Thus, a 

naval disarmament conference would produce a 

naval arms race.

At this stage, British statesmen began to work 

closely with the American authorities in London, especially Stimson, informing them of matters which Whitehall knew through codebreaking, 

though without revealing the source. These actions 

create a host of ironies. Stimson had closed the 

American “black chamber” several months before 

on the grounds, as he later recalled, that “gentlemen 

should not read each other’s mail.”17 Now, he was 

acting on the reading of gentlemen’s mail at second 

hand, without knowing it. Again, when justifying the publication of The American Black Chamber, Yardley warned that shutting down his bureau 

would damage American diplomacy at the London 

Naval Conference.18

However counterintuitive it may seem, his 

prophecy proved wrong, under these circumstances. 

The sympathetic fellowship among liberal politicians kept Stimson well informed. On central mat-
52

Part 3: Gentlemen’s Mail

anyone from exercising open pressure on the issue; 

indeed, had they been consulted, as would have been 

necessary, British and American financial authorities probably would have refused to place such pressure on Japan, because this endangered aims they 

cared about.

Even more, to raise this issue too openly would 

seem a threat, and antagonize the Japanese government. Hence, in private discussions with Japanese 

civilian diplomats, British and American decision 

makers referred to Japan’s financial weakness carefully, and in polite and elliptical terms. Craigie, for 

example, warned one Japanese diplomat that if the 

conference failed, “it was as clear as daylight that the 

nerves of the American people would be affected 

and that they would carry out construction on a large 

scale.” Then, American financial and naval strength 

would overwhelm Britain just as much as it would 

Japan (here Craigie overstated British weakness to 

sweeten his comments on that of Japan), while any 

failure to agree about lighter warships would also 

prevent any revision of the replacement schedule for 

capital ships, so forcing Japan into a construction 

race.

The Japanese civilians understood these risks, 

and emphasized them in their reports to Tokyo. So 

too, without benefit of access to communications 

intelligence, the American ambassador to Japan, 

William Castle told Shidehara that if “an agreement could be reached with Japan, this would have 

a particularly good repercussion upon public opinion, whereas, if an agreement confined to the United States and Great Britain should emerge, really 

deplorable consequences upon relations with Japan 

were to be apprehended.”22 Doubler raised the point 

with less tact and effect, telling Shidehara that Britain and the United States were using Japan’s financial weakness as a naval weapon. If, however, Japan 

stood firm on the issue of submarines and so faced 

Anglo-American financial pressure, French money 

markets no doubt would open to Tokyo. When 

Shidehara reported this comment to the American 

A Japanese Weakness

Dealing with another issue, and intelligence 

on it, was much harder to handle. The Kaigunsho’s 

opposition to the proposed agreement was public 

knowledge four days after GC&CS first detected 

it, when naval officers started a press campaign 

against the Reed-Matsudaira compromise in Japan. 

Meanwhile, for several weeks the Japanese government made no decision on the issue. The Foreign 

Office saw “a strong possibility of the naval element in the Japanese delegation overwhelming their 

political colleagues and preventing an agreement,” 

while “a most determined effort is being made by 

Japanese naval authorities to reject this compromise 

and nothing should be left undone to prevent such 

a disaster occurring.”20 In hindsight, this assessment was alarmist; in practice, little could be done 

about it. As Britain opposed further concessions to 

Japan, it could neither appease naval personnel nor 

strengthen civilians. It did have potential modes of 

leverage, but each was problematical.

That Japan suffered from financial weakness 

was generally known, but GC&CS demonstrated 

that its government was extremely sensitive on that 

issue. The latter twice warned its delegation to avoid 

any discussions which might even invoke the matter, 

especially because Tokyo was renegotiating major 

loans in London precisely at the time it was negotiating on sea power. Indeed, GC&CS showed that 

the civilian delegates and Shidehara feared having 

to start the battleship replacement program, since 

the cost might cripple the economy.21 If communications intelligence showed any Japanese vulnerability to exploit, this was it. However, British and 

American decision makers were careful in playing 

this card, for two reasons.

First, Japan’s financial embarrassment occurred 

in part because it was preparing to join the gold 

standard, which was a major priority for the British and American Treasuries, the Bank of England 

and the Federal Reserve Bank. This fact prevented 
53

Part 3: Gentlemen’s Mail

the political support needed to pass it easily through 

the Cabinet, both by working behind the scenes in 

Tokyo and by having the civilian delegation convince Takarabe to support the proposal.25

Tilley chose to work “almost entirely” through 

Shidehara, refusing to contact Prime Minister 

Hamaguchi, who “not only does not speak English 

but abstains in the most marked way from any communication with foreigners. Conversation with him 

would be very difficult, would be most unlikely to 

elicit any statement of opinion and would attract 

great and probably unfavourable notice in the press.” 

“Any attempt to influence the Press would have 

been exceedingly dangerous”; nor would he use the 

Naval Attache to contact the Kaigunsho, as “the real 

problem is a political one,” while the position of 

Shidehara, “who was disposed to defend the compromise even at the risk of having to resign, might 

be weakened if it were known, or believed, that a 

violent Anglo-American campaign was in progress 

and because alternately his own sympathy might be 

diminished if he learned that we were working by 

other means than through himself.”26

GC&CS almost immediately solved a telegram in which Castle expressed identical views to 

Stimson. Tilley carefully avoided “too much trace of 

concerted action” with Castle, but they had similar 

views, compared notes and moved in parallel. Castle thought any effort to contact Hamaguchi could 

backfire disastrously and was pointless—“the Prime 

Minister is a silent man, but in spite of the general 

belief that does not prove that he is a strong man. 

And could anyone be stronger than Shidehara has 

proved himself to be?” Tilley, Castle noted, “feels 

also that Shidehara himself is our best bet and that 

we cannot afford to alienate him. Sir John is a pretty 

wise old boy in the ways of diplomacy.”

Both diplomats sounded out circles linked to 

the Emperor’s political advisor, the genro (elder 

statesman) Kimmochi Saionji, and discovered that 

he favored the Reed-Matsudaira proposal. However, 

ambassador, Castle, the latter retorted immediately, 

or so he told his superiors, “it seemed strange first to 

be insulting and then to attempt bribery.”23

The second form of leverage was to act elsewhere. During the crisis, Britain and the United States could gain nothing by working on, or 

through, the delegation; useful action could be taken 

only with Tokyo. The Foreign Office thought the 

Kaigunsho had little power in the government or 

with the public. It believed that public opposition to 

arms limitation was artificial, no doubt reinforced by 

solutions indicating that the Kaigunsho was manipulating opinion against the 13 March compromise.24

The Foreign Office also believed the Japanese cabinet was strong and wise enough to accept the compromise, and not to subvert the conference.

Still, the Foreign Office immediately reported the facts (though not the source) to American authorities, including Stimson, and to its own 

ambassador in Tokyo, John Tilley. He was to “keep 

in close touch” with Shidehara and “use all your 

influence with the Japanese Government in favour 

of a reasonable settlement of this particular question at the earliest possible moment.” Tilley also was 

to act with Castle, while avoiding anything which 

looked like “joint or concerted pressure.” Stimson 

sent identical instructions to Castle. Notably, the 

men who decided how to act on these instructions 

did not know firsthand the intelligence that inspired 

them.

Meanwhile, GC&CS monitored American and 

Japanese reports of their discussions on these topics, so outlining what Tilley and Castle really were 

doing: thus, Japanese telegrams revealed actions by 

Tilley which he did not tell his own superiors at the 

time. GC&CS also showed how the Japanese were 

reacting to this ambassadorial pressure. In particular, Shidehara said precisely the same to the head 

of the civilian delegation, Reijiro Wakatsuki, as he 

did to Castle and Tilley: that he was delaying any 

action on the proposed treaty until he could finesse 
54

Part 3: Gentlemen’s Mail

make up your mind in advance to the probability 

of the Conference being wrecked. To the unhappy 

consequences of such a breakdown upon Japan you 

are yourself fully alive.” Ultimately, however, despite 

their inability to gain support from Takarabe in 

London, Shidehara, Hamaguchi, and their allies in 

Tokyo convinced the Cabinet to accept the ReedMatsudaira proposals as a basis for negotiations. In 

the last stage of the conference, the Japanese gained 

further concessions, in part because British and 

American negotiators realized their counterparts’ 

difficulties.

GC&CS’s intelligence on the Kaigunsho’s position affected British actions, but not events in Japan. 

Britain and the United States would have done 

much the same without it—indeed, when Britain 

first pressed Stimson on the need for “stirring...up” 

Japanese civil authorities, he retorted that he already 

had done so: “British should now do their share”; 

“it was now up to them because we had done all 

we could and that they should send a telegram.”28

Although this information affected the form and 

the timing of British and American approaches to 

Shidehara and Saionji, the latter two would have 

acted as they did anyway.

Indeed, the Anglo-American efforts to hasten 

this process did nothing except to irritate the Japanese with whom they were working. Comments to 

that effect from Tilley, Castle, and Japanese authorities seem to have led Whitehall to abandon its 

efforts at pressuring Tokyo. Stimson, lacking much 

of that evidence and dubious of Shidehara’s character, remained more insistent on the matter, but 

Castle contained such pressure. MacDonald actually apologized to Wakatsuki for British actions at 

Tokyo, perhaps after reading a telegram in which 

the latter said that they “savour of coercion” and had 

“stiffened perceptibly” the “antagonism” of his Naval 

Delegation.

Wakatsuki replied, “some members of his Delegation had been indignant at what they considered 

Castle’s effort to have a subordinate send Saionji 

a message through a dinner conversation with his 

political secretary, Baron Harada, failed, as “the good 

Baron got tight so that he would not have appreciated any message.” For an uncertain reason, and to 

no apparent effect, Tilley “arranged for confidential 

communication with the Chief of the Naval General Staff,” a great opponent of the deal, Kanji Kato.

Both diplomats pressed Shidehara and asked 

him to deliver messages to Hamaguchi from MacDonald and Stimson, in praise of the 13 March 

compromise. Neither told the full story to his superior, though in each case GC&CS generally showed 

that this was so. According to Japanese records, once 

he realized Shidehara’s resolve, Tilley told him to 

”just pigeon-hole the message.” According to his 

own diary, Castle left Shidehara the message to do 

with as he chose, after first using scissors to remove 

from the text his own name as sender and Hamaguchi’s as the recipient.27

These diplomats discarded what their superiors intended to be trump cards, to show Shidehara 

how much they trusted him. He picked these cards 

up and played them in a game of his own, as he 

publicized that situation among leading liberals in 

Japan, presumably to show how he mastered problems with gaijin and Japanese. Nothing more could 

be done, though the situation frustrated British and 

American leaders, who looked for “some method of 

hurrying up the Japanese.” Castle wrote,” It is rather 

maddening to sit around when there ought to be so 

much to do to help on the Conference, but there are 

times, of which this is emphatically one, when any 

obvious efforts to push things along would probably 

end in disaster.”

This situation also frustrated the Japanese civilian delegates. Wakatsuki warned Shidehara, “I must 

be prepared in so negotiating to face unconcerned a 

breakdown of the Conference. If you should require 

a person unfamiliar with diplomacy like myself to 

embark upon negotiations of this kind, you must 
55

Part 3: Gentlemen’s Mail

with an excellent capability for codebreaking but a 

weak one for interception was not well placed.

In 1921 Yardley’s bureau gained from its ability to read Japanese traffic but failed against British codes, whereas GC&CS profited little from its 

mastery of American and Japanese systems. These 

conditions were characteristic of cryptology in the 

telegraph age and a powerful argument for holding 

international conferences in one’s own capital.

For diplomatic intelligence as a whole, however, 

the ability to intercept traffic remained a powerful 

factor, but its value declined compared to that of 

strength in cryptanalysis, again for technical reasons. 

A state’s interests were broad, while most of the 

important and relevant traffic which any state could 

collect was sent to and from embassies in its capital, and easy to intercept. Between 1915 and 1939, 

before radio routinely carried diplomatic messages, 

British dominance of international cables gave it the 

greatest ability on earth to intercept traffic sent outside territories under its control.

Even so, around 50 percent of the important 

messages which British diplomatic codebreakers 

solved during that period were sent to and from 

embassies in London, while some of the rest were 

transmitted to and from consulates in its empire. 

The relative value of the ability to intercept traffic compared to that of strength in cryptanalysis 

declined still further when dealing with radio messages, which could be caught even when they were 

sent and received far from one’s own territory. 

These cases of diplomatic cryptanalysis were 

one-sided: yet in diplomacy and bargaining, often 

two or more powers have excellent intelligence on 

each other or on the multilateral relationship that 

enmeshes them, meaning that its overall effect 

stems from a competition between what one state 

gains from knowledge, compared to what its rivals 

do. Again, communications intelligence operates in 

unique diplomatic environments. In this case, that 

environment centered on negotiations between 

an exertion of pressure. He himself had thought 

it an indifferent plan but he was more concerned 

with a general settlement than with such a question 

of procedure.” The Japanese press, moreover, soon 

detected and reported on this pressure, and on an 

independent offshoot by an ex-American military 

attaché who was attached to the United States delegation in London. Castle thought this publicity 

“was dynamite pure and simple.”29 This reportage 

could have had counter-productive consequences 

had it occurred before the cabinet reached its decisions, and probably did shape subsequent hostility in 

Japan toward the London Naval Treaty.

Effects of Communications 

Intelligence

These experiences with communications intelligence between 1921 and 1930 illustrate the span 

of possible outcomes when one applies cryptanalysis 

to diplomacy, ranging from irrelevance to triumph 

to perversity. They also show much about its nature 

in conditions like those of the telegraph age. These 

experiences, however, also have peculiarities which 

must be remembered by anyone trying to generalize from them. There, as ever, intelligence affected 

diplomacy in complex ways, which rested on particular political and technical circumstances. As a 

result, more than with military operations, unique 

features shape every instance of diplomatic intelligence, and any effort to explain such cases must be 

complicated.

In technical terms, the power of communications intelligence for naval disarmament conferences between 1921 and 1930 was shaped as much 

by the ability to intercept traffic as by the quality 

of cryptanalysis. Target communications were a narrow set of messages transmitted between only two 

offices down one cable, separated by continents. 

These conditions worked in favor of a state which 

had some cryptanalytical capacity and the greatest 

ability to tap relevant traffic. Though, of course, the 

best position was strength in both spheres, a state 
56

Part 3: Gentlemen’s Mail

hard negotiations, where they needed to consult 

their local embassies, thus sending topically relevant 

traffic which could be intercepted. So too, the experiences of 1921 suggest that a state holding such 

a conference can gain most from communications 

intelligence by creating a surprise, or some other 

obstacle which drives foreign delegations and their 

governments to reappraise their policies in real time, 

into debates which can be intercepted, rather than 

letting them work from a script which they have 

coordinated in advance and at home.

That is, the ability to take the initiative in negotiations aids one’s codebreakers, just as much as they 

help one to gain that opportunity. Likewise, there 

exist diplomatic equivalents of the military tactic of 

destroying an opponent’s landlines to force his communications on the air, where they can be intercepted. Such techniques can improve the power of communications intelligence for one’s own diplomacy, or 

warn when one is on dangerous ground.

Communications Intelligence 

and Negotiations

Central to the relationship between communications intelligence and any form of action is the 

impact of delays between the time when a foreign 

state transmits traffic, when it is solved, and the 

resulting intelligence sent to decision makers. That 

problem is especially significant with diplomatic 

bargaining and strategic crises, where every element 

of decision-making can change from day to day in 

a kaleidoscopic fashion. In such cases, decisions will 

be affected, and perhaps deformed, simply because 

messages are received out of sequence. Trivial but 

current messages will receive disproportionate 

attention. Important older messages that emerged 

from different circumstances may be misinterpreted 

as they are applied to immediate actions which one 

must take. Routinely, crucial material will come in 

just too late to take action, though it may affect the 

lessons learned from an event. Again, to receive just

three liberal governments which really had few 

secrets between them, understood each other, agreed 

on basic issues, were willing to compromise on the 

details of disagreement, and, above all, on an odd 

form of cooperative competition between the United States and the United Kingdom.

The latter circumstance shielded Stimson in 

1930—a negotiator in his position facing a hostile 

foe with Britain’s superiority in communications 

intelligence might have suffered heavily from it. So 

too, because of this circumstance, when either of 

these states made negotiating gains against Japan 

through communications intelligence, usually it also 

worked in the other’s favor as well. Equally, British 

leaders in 1930 could not exploit certain knowledge 

of how weak Japanese leaders thought their country was, in order to push the IJN below the 5-5-3 

ratio, because they accepted the legitimacy of that 

ratio; such knowledge might have been used more 

ruthlessly in other circumstances. Certainly it would 

have supported a far tougher negotiating stance 

than a 5-5-3 ratio for the United States in 1921 and 

Britain in 1930.

Meanwhile, an examination of British and 

American communications with their embassies in 

Tokyo on matters of naval arms limitation in 1921, 

1927, and 1930 suggests that Japan could have 

gained little from codebreaking against them in the 

first two cases, but much in 1930, when the nature of 

the negotiations forced Anglo-American statesmen 

constantly to consult their ambassadors in Japan on 

major matters, so discussing and potentially revealing much about their bargaining position. Whether 

IJN codebreakers were breaking British or American diplomatic traffic in 1930 is unclear, though if 

they were, the divisions in Tokyo might have prevented such material from being used with effect.

In any case, this evidence suggests that a state 

in Japan’s position—bargaining at a conference held 

away from its capital—could gain most from communications intelligence by forcing its rivals into 
57

Part 3: Gentlemen’s Mail

show that expertise and intelligence often cannot 

bear fruit. Excellence in codebreaking alone could 

not give Britain useful intelligence at the Washington Conference. Even excellence in both interception and codebreaking could not let Britain achieve 

its aims at the Geneva Conference. For the United States in 1921 and Britain in 1930, conversely, 

communications intelligence helped statesmen to 

achieve victory on key parts of a negotiating package for naval arms limitation.

These two successes might have happened anyway, but in the world as it was, communications 

intelligence was fundamental to both. It provided 

situational awareness. It enabled statesmen to be 

sure that they were not missing an obvious opportunity, or a threat to their own position, and provided 

confidence that they understood their environment 

and were behaving appropriately. Communications 

intelligence confirmed the accuracy of material in 

other sources (in this case, primarily what one’s own 

diplomats heard and foreign ones said). It revealed 

the real position of rivals, and the accuracy of statements they made and thus their sincerity, which in 

this case increased confidence in the value of their 

promises, and of an agreement with them.

Communications intelligence steadied nerves 

when things seemed to be going nowhere, or going 

wrong. It increased knowledge of a rival’s position 

and how to manipulate it. Communications intelligence showed when to try gambits, what they might 

be, how they were working, and when to amend or 

abandon them, because they were having no effect, 

or perverse ones. It was a tool, a balm, and an insurance policy.

Strategic Consequences: Assessment

A complete assessment of how intelligence 

affects any act of diplomacy requires consideration 

of its strategic consequences—in this case, of who 

won and lost at the London Conference, and how 

and why. Here, we are assessing what did happen in 

the context of what might have happened. Had the 

parts of the communications surrounding any issue 

is far less satisfactory than seeing the whole.

 In diplomacy, communications intelligence 

contributes to a whole picture of events both by 

sharpening the clarity and certainty of issues which 

are already known, and by discovering matters that 

are not. Because intelligence penetrates secrecy, and 

sees things which other people are trying to hide, 

characteristically it discerns unknown dangers; but 

can also distort them. That problem is redoubled 

with communications intelligence, because of its 

unusual combination of precision and reliability. As 

with Doubler’s intrigues, communications intelligence easily can both discover and distort a weak 

danger, for the same reasons—by magnifying it. 

Again, with rare power and sensitivity, communications intelligence reveals opportunities to exercise 

diplomatic leverage, and means by which to do so.

In this area, Yardley’s bureau made a key and 

simple contribution in 1921: knowledge that if one 

merely sat tight, a rival would fold. During 1930 

GC&CS made four more complex contributions in 

this vein. Of these, the first, playing Japan off against 

the United States over heavy cruisers, was obvious 

enough, but still a delicate task which was eased by 

precise knowledge. The second, referring to Japan’s 

financial weakness as a means to move its government, could be used only with caution and when 

unavoidable, though little pressure was needed to 

make the point; again, precise knowledge enabled 

effective work. GC&CS brilliantly illuminated the 

third instance in a way that no other source could 

have done, namely the problem posed by the Kaigunsho in Tokyo; yet attempts to act on that information did not work as intended and caused more 

trouble than they solved. Finally, knowledge of 

Doubler’s actions caused more alarm than was warranted, though it also sparked actions which easily 

scotched the problem. 

These cases exemplify what communications 

intelligence can and cannot do in diplomacy. They 
58

Part 3: Gentlemen’s Mail

around 33 percent heavier than the IJN officially 

acknowledged—by 35, 000 tons, because of cheating 

or inexperience in design when Japan created these 

warships, the first they built without foreign assistance or models. In reality, the IJN actually matched 

the RN in the tonnage (though not the numbers) of 

heavy cruisers, and had a 5-5-3.8 ratio in the weight 

of lighter warships as a whole. Thus, the negotiations 

about relative tonnage which dominated the London Conference seem unreal, as often occurs when 

one examines any set of negotiations in hindsight. 

The London Naval Treaty left Japan master of 

the western Pacific and the strongest power in East 

Asia, which could not have happened had it confronted serious naval construction by Britain and 

the United States. These countries accepted that 

position because they regarded Japan as a liberal, 

aligned, power. As Stimson told a Japanese diplomat, “Japan stood in the Far East in the position of 

the interpreter of Western civilization to Orientals 

and that for this reason not merely was her position of predominance in those regions not a cause 

of uneasiness to America but on the contrary it was 

rather regarded by the latter as being to America’s 

advantage.”30 British and American leaders also 

hoped that the London Conference would boost the 

power of liberal internationalist rules in the world.

Instead, that Conference began the process by 

which Japan became a revisionist power, attacked 

liberal internationalism, and broke the armed liberalism which underlay international stability. Ironically, that process was propelled in part by the past 

successes of Anglo-American codebreaking. In 

1930-31 the role of codebreaking at the Washington Conference and of Anglo-American pressure on 

Tokyo during the London Conference became public knowledge. That publicity delegitimized these 

agreements, and the Japanese liberals who made 

them. The London Naval Treaty lit the fuse for a 

political explosion which blew Japan down the road 

to the Pacific War.

stable environment of the later 1920s endured, the 

policies pursued at the London Conference might 

have had different, and better, outcomes. Hoover 

and MacDonald might have had some success in 

recasting the world around liberal internationalist 

principles, underwritten by armed liberalism. In the 

world as it was, however, the story is unpleasant and 

ironic. In material terms, the great loser at the London Naval Conference was Britain, which sacrificed 

more warships than its partners and gained less new 

construction than the United States, so crippling its 

shipbuilding industry.

This outcome, however, was guaranteed before 

the conference began, because of MacDonald’s decisions. In the negotiations at London, Britain used 

intelligence well, so overcoming the weaknesses in 

its bargaining position, and letting it achieve its 

immediate objectives. Ironically, however, the process of liberal diplomacy allowed Japan, the weakest 

of the great naval powers, to do best among the parties in London, just as it had done in Washington. 

The Reed-Matsudaira agreement was fairly generous to Japan, which later managed to budge it still 

further, because Whitehall and Washington realized 

that they must work to sell the deal to Tokyo. These 

facts were clear from official sources, but doubly so 

through communications intelligence. They reinforced Britain’s willingness to let Japan make gains 

on the Reed-Matsudaira agreement during the final 

stages of the conference, although the American 

delegation actually made compromises on London’s 

behalf.

In particular, Japan was allowed to turn Hiei 

into a gunnery training ship by removing most of its 

turrets and armor, rather than scrapping it entirely, 

which enabled that warship to be refit for service 

during the Second World War. Thus, at London, 

the RN and the USN together sacrificed almost as 

many capital ships as the IJN possessed, while Japan 

really lost none at all. Even more, unbeknownst to 

Britain, the United States, and to Japanese civilians, 

the tonnage of Japan’s modern heavy cruisers was 
59

Part 3: Gentlemen’s Mail

conference, which recently have attracted much 

attention, are Kurumatsu, above, and Richard 

Fanning, Peace and Disarmament, Naval Rivalry 

& Arms Control, 1922-1933 (University Press of 

Kentucky, 1995). See also Sadao Asada, “From 

Washington to London: The Imperial Japanese 

Navy and the Politics of Naval Limitation, 1921-

1930,” Diplomacy & Statecraft, 4/3, November 

1993, 147-191.

7. Ferris, “Last Decade.” John H. Maurer & Christopher M. Bell (eds) At the Crossroads Between 

Peace and War: The London Naval Conference of 

1930 (Naval Institute Press, 2014) place it in the 

broader context of naval arms limitation discussions between 1920 and 1935; cf. Fanning, and 

the essays in B. J. C. McKercher, Arms Limitation 

and Disarmament: Restraints on War, 1899-1939

(Praeger Press. Westport Ct. 1992). Sadao Asada, “From Washington to London: The Imperial 

Japanese Navy and the Politics of Naval Limitation, 1921-1930,” Diplomacy & Statecraft, 4/3, 

November 1993, 147-191, offers an excellent 

account of Japanese debates on these issues. 

8. “Secret Memorandum by A.D. Struble, 5.11.29, 

RG 38-1030-104. NARA, College Park. 

9. Minutes by Colesworth, 7.9.29, 11.9.29, passim, 

FO 371/13523, A 6037. 

10. Orville H. Bullitt (ed.), For the President, Personal and Secret, Correspondence between Franklin D. 

Roosevelt and William C. Bullitt (London: Andre 

Deutsch, 1973), 249.

11. Minute by Craigie, 22.11.29, FO 371/13526, A 

126.

12. Ben Pimlott (ed.), The Political Diary of Hugh Dalton, 1918-40, 1945-60 (London: Jonathan Cape, 

1986), 69-72, 80-81; NC 278,27.3.30, HW 12/126. 

13. NC 275, 27.3.30, HW 12/126. 

14. NC 3, 23.1.30, HW 12/126.

15. Asada, “From Washington to London,” 177. 

16 NC 135, 25.2.30, HW 12/126. 

17. David Kahn, Reader of Gentlemen’s Mail.

18. Herbert Yardley, The American Black Chamber 

(Annapolis: Naval Institute Press, 2004). 

19. NC 123, 21.2.30, HW 12/126. 

20. Minute by Thompson, 25.4.30, and Tokyo 

embassy to Foreign Office, despatch No 145, 

Ironically, the best outcome for Britain, the 

United States, and Japan itself would have been for 

the Kaigunsho to wreck the London Conference, so 

forcing an Anglo-American treaty and maintaining 

the battleship replacement schedule of the Washington Naval Treaty. That arrangement quickly 

would have driven Japan far below a 5-5-3 ratio, and 

given its leaders a better sense of their power, and 

the limits to it.

In statesmanship and intelligence, wisdom is 

to information as three is to one. For Britain at the 

London Naval Conference, excellence in diplomatic 

intelligence was harnessed to mediocrity in policy 

and disaster in outcome.

Notes

1. The standard account of Yardley, his bureau, and 

its role during 1921-22, is David Kahn, The Reader 

of Gentlemen’s Mail, The Story of Herbert O. Yardley 

(Yale University Press, 2004). A useful study of the 

conference itself is Erik Goldstein and John Maurer (eds.), The Washington Conference, 1921-1922: 

Naval Rivalry, East Asian Stability and the Road 

to Pearl Harbor (Routledge, 1994); for its naval 

consequences, see Ferris, J.R., “’It is our Business 

in the Navy to Command the Seas’: The Last 

Decade of British Maritime Supremacy, 1919-

1929,” in Keith Neilson and Greg Kennedy, Far 

Flung Lines, Maritime Essays in Honour of Donald 

Schurman, (Frank Cass,1996). “Strength” was an 

arbitrary issue, defined by a complex mixture of 

factors, especially tonnage and numbers, but also 

including armament. 

2. Herbert Yardley Papers, copies at The NationalCryptologic Museum, Fort Meade, Md.

3. Ferris, “Last Decade,” ibid. 

4. Herbert Yardley Papers, copies at The National 

Cryptologic Museum, Fort Meade, Md. 

5. Cf. the HW 12 series, for 1926-27.

6. Tadashi Kurumatsu, “The Geneva Naval Disarmament Conference of 1927: The British Preparation for the Conference, December 1926 to 

June 1927,” The Journal of Strategic Studies, 19/1, 

March 1996, 101-126. The best accounts of this 
60

Part 3: Gentlemen’s Mail

 Two, Volume Two, entry 25.3.30) Thomas Francis 

Mayer-Oakes, Fragile Victory, Prince Saionji and 

the 1930 London Treaty Issue, (Wayne State University Press, Detroit, 1968), 100. For these events 

as a whole, cf. ibid., Asada, “From Washington to 

London,” Ian Gow, Military Intervention in Prewar Japanese Politics, Admiral Kato Kanji and the 

‘Washington System ‘ (London:Routledge, 2004), 

James William Morley (ed.), Japan Erupts, The 

London Naval Conference and the Manchurian 

Incident, 1928-1932 (Columbia University Press, 

1984); and John Ferris, “’It is our Business in the 

Navy to Command the Seas’: The Last Decade 

of British Maritime Supremacy, 1919-1929,” 

in Keith Neilson and Greg Kennedy, Far Flung 

Lines, Maritime Essays in Honour of Donald Schurman, (Frank Cass, 1996). 

27. Ibid.

28. Stimson Diary, entry 19.3.20, “Very Confidential Memorandum of Conversations March 

19-20, 1930.”

29. Castle Diary, entry 3.4.30.

30. NC No 224, HW 12/126.

25.3.30, A 2796, FO 371/14263; Documents 

on British Foreign Policy, 1919-1939, Second 

Series, Volume 1 (London, HMSO, 19XX), 249-

66. After reading this statement, Doubler also 

reported “Il me parait difficile qu’apres une telle 

declaration, l’amiraute puisse laisser ceder les 

autorites civiles,” and thought that the Emperor 

himself soon would step in to end the dispute. 

NC 227, 20.3.30, No 228, 20.3.30.

21. NC 132, 24.2.30, HW 12/126.

22. NC 193, 12.3.30, NC No 222, 19.3.30, HW 

12/126. 

23. Joseph Castle diary, entry 21.3.30. 

24. NC 183, 11.3.30, HW 12/126.

25. NC 276, 27.3.30, HW 12/126. 

26. Minute by Thompson, 25.4.30, and Tokyo embassy to Foreign Office, despatch No 145, 25.3.30, 

A 2796, FO 371/14263; Documents on British 

Foreign Policy, 1919-1939, Second Series, Volume 

1, (London, HMSO, 19XX), 249-66; Foreign 

Relations of the United States, 1930, Volume One, 

(Washington: GPO, 1945), 66-79; William Castle Diary, MF89/2687, Herbert Hoover Presidential Library, West Branch, Iowa, entries 21.3.30, 

24.3.30, 28.3.30; Henry Stimson Diary, Reel 

J

ohn Ferris is professor of history at the University of Calgary, where he also is a fellow at The Centre 

for Military and Strategic Studies. He received an M.A. in 1980 and a Ph.D. in 1986 in war studies from King’s College, the University of London. He has published four books and 100 academic 

articles or chapters in books on diplomatic, intelligence and military history, as well as contemporary 

strategy and intelligence. His books have been published in Australia, Canada, France, Japan, Singapore, Turkey, the United States, and the United Kingdom; they also have been translated into French 

and Japanese. He comments in national and international media on Canadian and American foreign 

and military policy, the wars in Iraq and Afghanistan, intelligence, and nuclear weapons. He was the 

CCH scholar-in-residence for 2008-2009 and wrote these essays during that time.

62328