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By Root 2457 0

‘want of money’ had been ‘increasingly felt in recent years, during which other Nations have turned Great Britain’s gesture in unilateral disarmament [under the ten-year rule] to account by seizing the opportunity to re-arm secretly’. In these circumstances, he argued, ‘official sources of information have proved even worse than useless’, with governments routinely dissembling on the issue. ‘The most glaring case in point’, he wrote, ‘has been that of Germany.’ Until the German government had ‘themselves made the facts public, practically the only sources of information on her re-armament were those available to the Secret Service’. It was, moreover, ‘a melancholy fact that the march of events has proved their information correct’.

Sinclair argued that ‘a great deal more could, and would, have been accomplished had the Service been in possession of adequate Funds’. Drawing a characteristically naval analogy, he said that his budget, which was meant to cover the whole world other than the United Kingdom, India and the colonies, ‘only equals that spent every year on the maintenance (not the cost) of one of H.M. Destroyers in Home Waters’, and was much less than the money devoted to secret services by Britain’s foreign rivals. Sinclair asserted that ‘a satisfactory Secret Service’ depended ‘essentially upon maintaining a complete and interwoven scheme of work’, with as wide a geographical presence and coverage as possible. But, ‘owing to lack of funds’, it was ‘not possible to maintain any Service in such countries as Switzerland, Spain, Yugoslavia, Albania and Arabia, and, in consequence, a great deal of information about other and neighbouring countries, which could be obtained in these countries, escapes us’. The ‘necessity for spreading the butter thin’, he observed, ‘has proved particularly unfortunate in the present Italian crisis’. For years, since Italy had ‘been regarded as a friend and ally, intensive S.S. work was not pursued against that country, the main effort being directed against Germany’ (an observation which made sense only when the targeting of Comintern operations emanating from Berlin was taken into account). The crisis had obliged the Service not only to divert funds from other work, but also to spend lavishly ‘on obtaining intelligence of a nature which S.I.S. is not normally expected to supply in peace time’ (tracking, for example, the movements of Italian warships).

Nor was Italy the only problem. Sinclair also remarked on the ‘unsatisfactory position’ regarding the Far East, ‘especially in regard to Japan’. Even ‘by diverting sums being spent, with valuable results, on other countries’, the amount available for recent efforts in the region was ‘wholly insufficient, and only suffices to maintain a skeleton organisation’. Sinclair stressed that, even when adequate funds were available, it took ‘at least 2-3 years, under the most favourable circumstances, to establish a satisfactory S.S. in any country’. Meanwhile SIS, ‘living, as it does, a hand to mouth existence, with vast areas to cover’, was able only ‘to scratch the surface’. To ‘obtain really inside information’, he wrote, ‘means spending big money’. He claimed that opportunities frequently occurred ‘of dealing with individuals in responsible positions’, but ‘the offer to them of the few hundreds a year, which represents the amount usually available, is naturally treated by them with contempt’. ‘Whatever may be the outcome of the present crisis,’ he concluded, ‘it is plainly apparent that, in the future, Germany, Japan and Italy will have to be regarded as potential enemies from without, as well as Soviet Russia from within.’ The situation ‘cannot possibly be covered by the existing S.I.S. Organisation, depending, as it does, upon a limited number of Passport Control Officers and representatives anchored to their posts in the capital, and possessing neither the means nor the mobility for covering the many industrial and strategic posts from which essential information can alone be obtained’. Sinclair asserted that a ‘complete plan’ had ‘been