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REF ID: A6\:~2_f..3(h)( ) 

PL 86-36/50 USC 3605 

WOP SECRElJ 

In 1944 Hagelin returned to Sweden. Hag.elin thought that as the 

war ended the cipher machine business was fini1;hed~but events proved 

Q.s w•dl ~s him wrong. The coming of the cold war Etfte-tfteni. the break-up of the 

colonial empires and resultant formation of dozens of new nations 

I• 'el:r- created a new market for cipher machines. 

The re-establishment of Ak.tiebolaget Cryptoteknik in Stockholm 

after the war proved to be somewhat temporary. In 1948 Hagelin moved 

his development work to Zug, Switzerland because of a\Swedish law 

which allowed the government to appropriate inventions \it needed for 

national defense. In 1959, Hagelin moved the entire firm to Zug 

where he incorporated it as Crypto Aktiengesellschaft (i!llS\ Crypto A.G.). 

Meanwhile, Hagelin had been improving the M-209 and wa$ also 

producing new cipher machines for commercial, military, and diplomatic 

use. He filed patent applications for some of his new machine.s in 

the United States, Switzerland, France and Italy. Through an informal 

contact (probably Friedman), the Armed Forces Security Agency was 

\ 

not only aware of Hagelin's new systemSbut were somewhat concerned lest 

Hagelin's newer, more secure machines ~ cause some previously 

readable sources to disappear. I 

and the matter was presented to the Armed Forces Security Agency 

Council. 

........... 
.. 0COP SEGRE) 

EQ 3.3(h)(2) 

PL86-36/50 USC 3605 

APSA, AFSAC, and ,____~~~~~~~~~~~~~~~~~~~~~~--' 

the C.l'A are too lengthy to discuss at this time. Neither this 

the possible merger of Hagelin's firm with that of Siemens,another well 

known manufacturer of cipher machines • 

.. _ ...... 

that he continued to receive government contracts for cipher machines. 
REF ID:A61622 

In 1916 Arvid Gerhard Damm and Commander Captain Olof Glydin 

of the Swedish Royal Navy founded Aktiebolaget Cryptograph, a 

company designed to make commercial cipher machines. Among the 

investors in the firm were Emanuel Nobel, the nephew of the famous 

Alfred NobelJand K. W. Hagelin,who managed the Nobel brothers' oil 

company in Russia and at one time was the Swedish Consul-General in 

St. Petersburg. 

In 1922 Hagelin's son, Boris Ceasar Wilhelm,joined Aktiebolaget 

Cryptograph. Although he had been born in Russia,he had graduated 

from the Royal Institute of Technology in Stockholm in 1914 with a 

degree in mechanical engineering. He had worked for six years for 

ASEA, Sweden's version of General Electric, and had spent one 

year in the United States working for Standard Oil of New Jersey. 

In 1925 Hagelin discovered that the Swedish military was planning 

to purchase an Engima cipher machine. By modifying one of Damm's 

cipher machines, he made it more suitable for field use than the 

Enigma and offered it as the B-21 to the Swedish Army. It was 

accepted and a larger order for the cipher machine was placed in 1926. 

In 1927 A. G. Damm died and the Hagelin interests bought the 

firm and reorganized it as Aktiebolaget Cryptoteknik. Boris Hagelin 

managed the company. Hagelin began producing printing cipher machines 

~ 

which were faster, more accurate, and more economical in terms of 

»# 

manpower than indicating mechanism like the Enigma. (1) 
REF ID:A61622 

The turning point for the fortunes of the Aktiebolaget Cryptoteknik 

came in 1934. The French General Staff requested that the firm 

produce~pocket-sized cipher machine which could print cipher text; 

thus making it a one man operation. The result was the C-36 cipher 

machine. In 1935 the French ordered 5,000 of the machines which 

put the company on a solid footing and laid the groundwork for 

future successes. 

According to David KQ,lln, Hagelin began corresponding with 

American cryptologic experts in 1936 in reference to the C-36 

cipher machine. He visited the U.S. in 1937 and in 1939. Evidently 

Hagelin first met William F. Friedman on these visits. A friendship 

between the two developed during this period which lasted until 

4..,~i Friedman's ~t in 1969. In 1940 Hagelin and his wife managed to 

+~o 

escape Europe with blueprints and ')If C-36 machines. Later Hagelin 

was able to smuggle 50 more machines into the u.s. By that time 

the u.s. had tested his C-36, with some improvements suggested by 

Friedman, and decided to accept it as it~ medium-level cryptographic 

system. It was designated the M-209 and it saw service in military 

units from division to battalion level. In 1942 Smith and Corona 

Typewriters, Inc~ began producing 400 of these machines a day in its 

Groton, New York factory. More than 140,000 were produced and Hagelin 

royalties ran into the millions. "He became the first and the 

only man to become a millionaire from cryptology." (2) 
- REF ID:A61622 .. OCOP 3ECRE1 

· In 1944 Ha~elin returned to Sweden. Hagelin thought that as the 

war ended the cipher machine business was finished but events proved 

him wrong. The coming of the cold war as well as the break-up of the 

colonial empires and resultant formation of dozens of new nations 

created a new market for cipher machines. 

The re-establishment of Aktiebolaget Cryptoteknik in Stockholm 

after the war proved to be somewhat temporary. In 1948 Hagelin moved 

his development work to Zug, Switzerland because of a Swedish law 

which allowed the government to appropriate inventions it needed for 

national defense. In 1959, Hagelin moved the entire firm to Zug 

where he incorporated it as Crypto Aktiengesellschaft (Crypto A.G.). 

Meanwhile, Hagelin had been improving the M-209 and was also 

producing new cipher machines for commercial, military, and diplomatic 

use. He filed patent applications for some of his new machines in 

the United States, Switzerland, France and Italy. Through an informal 

contact (probably Friedman), the Armed Forces Security Agency was 

not only aware of Hagelin's new systems but were somewhat concerned lest 

Hagelin's newer, more secure m~-...·~.-....-.a.u.t.J~........:~ ...... ~.-.;L..1111.:~-.....z....~~~~~~--. 

readable sources to disa ear. 

and the matter was presented to the Armed Forces Security gency 

Council. 

t e possi e merger o Hage in s irm wit 

known manufacturer of cipher machines. 

and 

........... ···· .. ···· 

that he continued to receive government contra.cts for cipher machines. 

EO 3.3(h)(2) 

PL 86-36/50 USC 3605 

... -. fl"'~ """ • •• ~ 
• 

REF ID:A61622 

In 1916 Arvid Gerhard Damm and Commander Captain Olof Glydin of the Swedish Royal Navy founded Aktiebolaget Cryptograph, a 

company designed to make commercial cipher machines. Among the 

investors in the firm were Emanuel Nobel, the nephew of the famous 

Alfred Nobel, and K. w. Hagelin, who managed the Nobel brothers' oil 

company in Russia and at one time was the Swedish Consul-General in 

St. Petersburg. 

In 1922 Hagelin's son, Boris Ceasar Wilhelm, joined Aktiebolaget 

Cryptograph. Although he had been born in Russia, he had graduated 

from the Royal Institute of Technology in Stockholm in 1914 with a 

degree in mechanical engineering. He had worked for six years for 

ASEA, Sweden's version of General Electric, and had spent one 

year in the United States working for Standard Oil of New Jersey. 

In 1925 Hagelin discovered that the Swedish military was planning 

to purchase an Engima cipher machine. By modifying one of Damm's 

cipher machines, he made it more suitable for field use than the 

Enigma and offered it as the B-21 to the Swedish Army. It was 

accepted and a largi order for the cipher machine was placed in 1926. 

In 1927 A. G. Damm died and the Hagelin interests bought the 

firm and reorganized it as Aktiebolaget Cryptoteknik. Boris Hagelin 

managed the company. Hagelin began producing printing cipher machines 

"which were faster, more accurate, and more economical in terms of 

manpower than indicating mechanism like the Enigma." (1) 

The turning point for the fortunes of .~ Aktiebolaget Cryptoteknik 

came in 1934. The French General Staff requested that t e firm 

produce a pocket-sized cipher machine which could print cipher text 

thus making it a one man operation. The result was the C-36 cipher 

machine. In 1935 the French ordered 5,000 of the machines which 

put the company on a solid footing and laid the groundwork for 

future successes. 

According to David Kahn, Hagelin began corresponding with 

American cryptologic experts in 1936 in reference to the C-36 

cipher machine. He visited the U.S. in 1937 and in 1939. Evidently 

Hagelin first met William F. Friedman on these visits. A friendship 

between the two developed during this period which lasted until 

Friedman's death in 1969. In 1940 Hagelin and J:V:~~it~Aman~ed to 

escape Europe with slnepriRts .a.R.Q two C-36 machirref}\~ fti"' ~aif~f""A:agelin 

was able to smuggle 50 more machines into the u.s. By that time 

the U.S. had tested his C-36, with some improvements suggested by Friedman, and decided to accept it as its medium-level cryptographic 

system. It was designated the M-209 and it saw service in military 

units from division to battalion level. In 1942 Smith and Corona 

Typewriters, Inc., began producing 400 of these machines a day in its Groton, ~1.W..tR,rk factory. More than 140,000 were produced and Qa9QliR 

royal tiesJll. r'An'"i.nto the millions. "He became the first and the 

only man to become a millionaire from cryptology." (2)