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Reds, Fascists, and the Coming of World War II: Espionage in the Inter-War
Years

Dictators and Demagogues

Summer 2003

The Status of Intelligence Communities
After World War I

•      Intelligence organizations were not reduced on the same scale as the armed forces.

•      The Americans had an intelligence operation 25 times larger than before 1916.

•      The Germans developed numerous agencies to protect the state.

•      Interception and Decryption reached a higher level of readiness after the Great War.

•      Lord Curzon considered cryptology: “without exception the cheapest and most reliable form of secret service.”

Lenin’s Spies I

•       The Bolsheviks realized that they were surrounded by potential enemies.

•       In order to protect the state, the Cheka was organized -- All-Russian Extraordinary Commission for Combating Counterrevolution, Sabotage, and Speculation.

•       The Chief of the Cheka was a Pole, Felix Dzerzhinsky who had very little, if any, human compassion.

Lenin’s Spies II

•       By 1918, the Cheka was waging an aggressive war in the rear against the Whites and foreign interventionists.

•       The Cheka managed to break up a conspiracy in Moscow to topple the regime.

•       Not only did the Cheka play a key role in the Red Terror, but now was engaged in foreign intelligence too.

Background to the Trust

•      Dzershinsky organized a foreign intelligence branch to collect on foreign governments and anti-Soviet ιmigrι organizations.

•      The Soviets wanted Reilly and Boris Savinkov, an old SR responsible for the assassinations of numerous Tsarist officials.

•      To accomplish this task, the Soviets sent a representative to Warsaw to meet Savinkov with materials on the Soviet border troops.

•      The objective was to protect the Soviet State

The Trust

•       Savinkov believed the courier and recruited him. The CIA, which studied the case, believes that the courier was a plant.

•       Savinkov went to Moscow believing he was meeting with the anti-Bolshevik underground. Instead, he was arrested tried and died/murdered while in prison.

•       The same occurred with Reilly. He entered the country via Finland and then was captured, interrogated, and executed by the Cheka.

Impact of the Trust

•      Protected the Soviet State at the most vulnerable period.

•      Made the Soviet Intelligence Service one of the most effective in Europe.

•      Spread its tentacles well beyond the borders of the Soviet Union.

•      Later, the NKVD/KGB would attempt to carry out similar operations against the West in the early Cold War.

The Origins of the American Black Chamber

•      After the war, the Americans moved their signals intelligence unit from Army control to civilian control.

•      This organization was headed by Herbert Yardley.

•      Yardley worked as telegraph operator at the State Department and in 1916 warned of the poor state of American codes.

•      During World War I, he headed the MI-8, the Cipher Bureau.

•      MI-8’s greatest success was the capture of Lothar Witzke, a central figure in the Black Tom explosion.

•      Wilson even took MI-8 to Paris during the peace negotiations.

Enter Herbert Yardley

•       After the war, State and the War Department ran the Black Chamber and used New York City as their base of operations.

•       The principal target of the Black Chamber was Germany and Spain.

•       Then in 1920 the Black Chamber shifted to Japan -- the main target until the end of World War II.

The Black Chamber and The Washington
Naval Conference

•      Within five months, Yardley and his codebreakers broke the first Japanese Code [named JA -- J for Japanese, A for first code]

•      The Black Chamber managed to break most of Japans secret codes by the time of the Washington Conference.

•      The success of the Black Chamber allowed American diplomats to push the Japanese to the limit, since they knew how far Tokyo was willing to go with naval reductions.

•      The Black Chamber also broke the French codes too.

The Fall of Yardley and the Black Chamber

•      But even despite the success of the Black Chamber, the organization had their funds cut to 25,000 per year by the Hoover Administration.

•      Then came the coup de grace -- the new Secretary of State Henry Stimson claimed: “Gentlemen do not read each others mail.”

 Electrically Wired Rotors

•      Most post-World War I cipher machines came from the design of the American Edward Hebern.

•      Wired motor machines multiplied in the 1920s.

•      The leaders were Hugo Koch (Dutch), Arthur Scherbius (Germany), and Willi Korn.

Coming of Enigma

•       All these men played a key role in the development of the ENIGMA machine in Nazi Germany.

•       The Japanese Enigma machine was called the Green Machine and was far from secure.

•       The American machine was M-134-C/SIGMA used by the US Army and ECM by the Navy.  Apparently, the American machines were never compromised by the Axis during the war.

How The Rotor System Worked

•      Input Contact

•      A

•      B

•      C

•      D

•      E

•      F

•      G

•      Output Contact

•      K

•      O

•      G

•      N

•      J

•      U

•      P

The Enigma Machine

•       In the early 1920, Arthur Scherbius developed a rotor machine the size of a cash register.

•       The machine was portable and he named it ENIGMA.

•       It enciphered messages by the use of the electrically wired rotor system.

•       Scherbius wanted to establish a corporation to sell the device, but war-wary Germany was not ready for such a new company

The Application of Enigma in the Field

•      The coming of Hitler would change that.

•      The ENIGMA machine provided the necessary security for Blitzkrieg military operations.

•      The Germans believed that the system was unbreakable.

•      They were wrong.

•      The only unbreakable code is the one-time pad system.

Breaking of Enigma

•      The Poles made the first inroads and may have done so without a computer.

•      As war appeared, Polish intelligence gave copies of what they had done to the British and French.

•      The British made the best use of it at Bletchely Park

A Future Japanese-American War

•      The Democrat Party had traditionally been the party of a “small navy.”

•      But that all changed in 1916 -- When Woodrow Wilson promised to build a Navy “Second to None.”

•      The 1920s started with a Republican effort to reduce the fleet and US commitments in the Pacific.

•      After World War I, Japan became the number one enemy of the United States.

Planning for War with Japan

•      The War Plan the navy developed to defeat Japan was called ORANGE.

•      Naval War Planners realized that the Philippines were particularly vulnerable to a Japanese attack.

•      Likewise, the Japanese Military gained further ascendancy in Tokyo.

•      To defeat Japan, the United States needed Island bases in the Pacific.

•      The United States needed intelligence and needed it badly.

“An Orange War is considered the most probable. It is by far the most difficult for the Navy. It will require the greatest maritime war effort yet made by any nation.”

Commander R. B. Coffey, USN

Source: Russell F. Weigley

The American War of War: A History of  United

States Military Strategy and Policy, 242

The Marine Corps Looks for
Bases in the Pacific

•      Ca. 1919, Major Earl H. Ellis discussed the importance of gaining bases and capturing Japanese islands in the Pacific for US naval facilities in an ORANGE WAR.

•      Ellis went further and advocated and idea advanced in 1906 by Major Dion Williams that the USMC should be the force that captures islands and bases for the Navy.

•      These ideas were not fashionable, particularly after the British disaster at Gallipoli during the Great War.

•      In 1921, Ellis studied how to defeat Japan by capturing and securing island bases in the Central Pacific and the Commandant of the USMC agreed.

•      Then Ellis died under sinister circumstances while on the Japanese held island of Palau in 1923.

Hector Bywater (1884-1940)

•       English by birth and a journalist by profession.

•       Wrote for the New York Herald/Baltimore Sun on military matters.

•       During the Great War, he worked for Mansfield Cummings, but only knew him as “C.”

•       He was sent to Hoboken, NJ to infiltrate the German American community.

•       After the war, he left MI6 and devoted the rest of his career to journalism.

The Great Pacific War

•       He now focused on naval matters and the possible struggle in the Pacific with Japan.

•       In 1925, he wrote the Great Pacific War, where he notes the Japanese will capture Guam and the Philippines.  But did not anticipate Pearl Harbor.

•       It seems that Yamamoto read this book too and had a discussion with Bywater in 1934

Maj. Gen. Kenji Doihara (1883-1948)

•       He was Japan’s most important intelligence officer in Manchuria.

•       The Western Press referred to him as “The Lawrence of Manchuria.”

•       John Gunther wrote that Doihara’s job was “to create trouble and then smooth it over to the advantage of Japan.”

•       He was an AGENT PROVOCATEUR that created incidents to Japan’s advantage -- the best known occurred on Sept. 18, 1931

Doihara’s Operation in China

•      He also created the Tokumu Kikan, an organization designed to eliminate any organization or movement in China not friendly to Japan.

•      Chiang Kai-shek was so concerned that he executed a number of Chinese generals for being too friendly with Doihara.

•      Doihara was tried as a war criminal and executed in 1948.

Yoshiko Kawashima: The Chinese Mata Hari

•       She was one of Doihara’s legendary agents.

•       She was Chinese-born, who often disguised herself as a man.

•       She was said to have encouraged Henry Pu Yi, to become Doihara’s puppet emperor of Manchukuo.

•       She also delivered Pu Yi’s consort from exile in Tientsin to Manchukuo too.

•       She was arrested in November 1945 by Chinese Counterintelligence officers and executed as a traitor.

The Development of Soviet Intelligence
Networks in the West

•      The Depression was a major catalyst for the Soviets to recruit agents networks.

•      Many were recruited as a result of the great depression.

•      Likewise, they were recruited from the ranks of the Communist Party.

•      The party established Marxist Study groups and from those study groups came the intelligence networks that would serve Moscow during World War II.

Organization & Recruitment into Soviet Espionage

Who Was Recruited?

•       In England, many bright young men were recruited out of Cambridge for secret work -- They include Kim Philby, Donald Maclean, Guy Burgess, and Anthony Blunt.

•       The same could be said for CCNY, where Julius Rosenberg and others were recruited from the ranks of the Young Communist League.

•       However, the bulk found their way into the ranks of New Deal organizations.

Reaching Into The White House

•      Henry Dexter White -- Assistant Secretary of the Treasury.

•      Lauchlin Currie -- Administrative Assistant to FDR.

•      Alger Hiss -- State Department Official who traveled with FDR to Yalta and American Representative to the San Francisco Conference of the UN.

•      Laurence Duggan -- Another State Department official who provided information to the Soviets since the mid-1930s.

And the Possible Others

•      Some accounts point to Henry Hopkins.

•      He does have a code name in VENONA.

•      J. Robert Oppenheimer, the father of the American Atomic Bomb effort was named in 1994.

•      The jury is still out on him.

German Intelligence Following 1933

How It Happened

•      It appears that both German and Soviet Generals didn’t trust either of their masters.

•      Both dictators realized that the professional officer corps distrusted both men.

•      Each dictator, Hitler and Stalin, tried to out deceive the other.

The Background was Set against Tukhachevsky

•      He attended the funeral of King George V in London.

•      He traveled by way of Berlin.

•      The Trust network was still operative.

•      One former Tsarist General, Nikolai V. Skoblin, then passed a warning to a COMINTERN official of a possible treachery by Tukhachevsky.

•      Skoblin also worked for the SD.

Hitler’s Special Ops Directed
Against the Soviet High Command

•      In 1937, Hitler directed Himmler and his loyal subordinate, Reinhard Heydrich to provide information to the Soviets that indicated Soviet Generals were cooperating with the Germans.

•      This would feed Stalin’s general paranoia and disrupt the Soviet High Command.

•      Hitler ordered that the Wehrmacht be kept in the dark about this operation.

•      Special SS teams with the Criminal Police, broke into the Bendlerstrasse and gained access to the files.

•      The information was then passed to the Czechs and then to the NKVD.

•      The result was that the brains of the Soviet Army was destroyed in one swoop.

The Role of Heydrich

•      He had SD agents break into the Abwehr archives and forge Tuckhachevsky’s name.

•      He then passed the intell through the Czechs, especially President Eduard Benes.

•      The rest is history.

•      The objective was to decapitate the Soviet High Command.

The Impact of the Army Purges in the USSR

•      35,000 senior Soviet officers were killed.

•      Only two Marshals survived (close friends of Stalin).

•      Every commander of a military district shot.

•      57 out of 85 corps commanders shot.

•      110 out of 195 divisional commanders shot.

•      220 out of 406 brigade commanders shot.

What was the Result for the Stalin?

•      Poor performance during the Finnish War.

•      Gave the Germans a sense of invulnerability at the start of the Russo-German War on June 22, 1941.

•      All the result of a deception created by Reinhard Heydrich of the German SD.