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Sinclair complained afterwards that ‘had the existence of this document been known in time, and especially if there had still been a possibility of obtaining additional evidence through further searches’, the publication of the decrypted telegrams could have been avoided. As it was, their publication had been ‘authorised only as a measure of desperation to bolster up a case vital to Government’. Sinclair observed that the whole affair demonstrated ‘the danger which is caused by the absence of any central control or authority’. While ‘The Secret Service’ was ‘spoken of as though it were one body’, in reality it was three separate organisations (SIS, MI5 and Special Branch), ‘each with its peculiar objectives, prejudices, methods and limitations’. The remedy, he asserted, ‘lies in the unification of these three bodies’. Sinclair repeated this opinion to the Secret Service Committee. Although both Tyrrell and Fisher took the view that co-operation between the agencies had broken down, Anderson ‘did not think the episode strengthened the claim for any radical alteration of existing arrangements’ and the committee adjourned in June 1927 without making any recommendations at all.38

But the problem of overlap and inter-agency relations remained, especially as SIS continued to monitor Communist activity at home as well as abroad. During 1927 Desmond Morton was heavily involved in a lengthy operation which contributed to the conviction in January 1928 of Wilfred Macartney and a German Communist, Georg Hansen, for offences under the Official Secrets Act. Macartney, who had worked for MI1(c) under Compton Mackenzie during the war, was as much an inept petty criminal and confidence trickster as a spy. Indeed, Mackenzie afterwards referred to him as being in jail for ‘comic opera espionage’. But the evidence against him, especially as detailed by Morton (who appeared before the court as ‘Peter Hamilton’), linked him through Hansen to Arcos and Soviet intelligence.39 Morton’s interest in the Macartney case was heightened by his position, in addition to his Production role, as head of another new SIS department, Section VI, formed during 1926-7 to gather intelligence on the economic preparations for war of potential enemies including Germany and the Soviet Union.40

Like Section V, Section VI was closely concerned with Communist activities at home as well as overseas, and Morton was also involved in a collaborative operation run by SIS and MI5 from 1925 investigating William Norman Ewer, the foreign editor of the Daily Herald, who was suspected of running a Communist espionage network. While SIS kept watch on the group abroad, MI5 ran postal and telephone surveillance at home. In the spring of 1929 Sinclair told the Foreign Office that the operation conclusively proved that Ewer’s group ‘were conducting Secret service activities on behalf of, and with money supplied by, the Soviet Government and the Communist Party of Great Britain’. In 1928 Albert Allen (an ex-policeman whose real name was Arthur Francis Lakey) told MI5 that two Special Branch men had been working for Ewer since 1922, which led to the arrest in April 1929 of Inspector Ginhoven and Sergeant Jane, along with an ex-policeman, Walter E. Dale. Among the evidence seized was a diary kept by Dale which revealed that between 1922 and 1927 ‘unremitting surveillance’ had been ‘maintained by Dale and his friends upon the premises and personnel of S.I.S and of the Code and Cipher School’, that ‘laborious efforts were made to identify and trace to their homes officers and members of the secretarial staff’ of both organisations, ‘and that the move of both offices . . . to joint premises at Broadway Buildings under a common style was accurately observed and recorded’. One result of this was the removal from the publicly available Post Office London Directory of the anodyne entry ‘Government Communications Ltd’ among the tenants of Broadway Buildings which had appeared in the 1928 and 1929 edition listings.

Allen also reported to MI5 that in 1923 a secretary at SIS’s Melbury Road headquarters,