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By Root 2821 0

services in the face of a growing threat from Japan; and personality problems, particularly as they affected the unfortunate and chronically unwell Steptoe. Even if he had been better placed in his relationships with his military, naval and diplomatic colleagues, it is doubtful that Steptoe’s progress in gathering intelligence on Japan would have been any better. It was unrealistic to expect him, however well versed in Communism and Chinese politics, to take on a very different target and one that lay at geographical arm’s length. Sinclair was right when he wrote to Dreyer in July 1934: ‘I do not think that, even now, you or the G.O.C. realise the extreme difficulty of obtaining secret information about Japan or Formosa.’ Sinclair was sending out a fresh individual ‘to take over the Naval and Military Intelligence’, but he also remarked ‘that there appears to be no prospect whatsoever of obtaining any additional funds with which to finance this undertaking, which makes the task even more difficult than it otherwise would be’. A note by a source who had assisted Steptoe since 1928 addressed the fighting services’ criticism about the lack of Japanese information. ‘If they require plans stolen,’ he wrote in August 1934, ‘serving officers bribed etc (which unquestionably is the most efficient method of obtaining what they require) they must provide far greater sums of money than are at present available.’

SIS’s new man in Hong Kong was Charles Drage, a retired naval lieutenant commander who had served in China in 1923-6 aboard the sloop HMS Bluebell. Working under business cover, he had to begin from scratch as the embryonic network established in the 1920s had completely collapsed by the early 1930s. Drage was assisted by a South African who had been recruited by the Berlin station in 1923 and had later served in Mukden (Shenyang). This assistant had a flair for recruiting what was called the ‘mechanised type of agent’: Chinese seamen who visited ports in Japan and Formosa. At the beginning of 1936 it was reported in Broadway that four ports in Japan (Yokosuka, Kobe, Asaka and Hiroshima) and two in Formosa (Keelung and Taiku) were being watched. Formosa was an easier nut to crack than Japan itself and in October 1938 Drage boasted that he controlled ‘the only secret intelligence organization in Formosa’ and therefore had ‘a monopoly of reliable information from that Island’. But the return was not very great. In April 1938 after Naval Intelligence had complained about the paucity of intelligence from the Far East, Sinclair was supplied with a list of seventy-two SIS agents and contacts working in the region, of whom twenty-nine were thought ‘likely to obtain Japanese Naval information’. Though this represented a fair spread of assets, a lack of ability to communicate rapidly severely limited the timeliness with which any information could be delivered. In 1935 SIS agents in Osaka and Tokyo had experimented with sending coded messages through regular telegraph channels and a courier service had been tried from Kobe. It was not altogether reliable and in September 1936 Sinclair, when reaffirming SIS’s responsibility ‘for maintaining a Coast Watching Organisation, in order to give advance information of troop movements or possible mobilisation’, went on to grumble to Drage that ‘the breakdowns which are frequently occurring with this organisation coupled with misleading reports such as you have furnished on this matter, give rise to the gravest anxiety here’. There were losses of agents, too. Early in 1937 an agent was arrested and tortured ‘shortly after handing in coded troop movement telegram for Hong Kong’. Fortunately a fellow sub-agent secretly engaged a lawyer and at a cost of $500 secured his colleague’s release.

By the late 1930s SIS was still having difficulties in meeting the increasing requirements of the armed services, though there were occasional successes, such as Sinclair’s report in January 1938, ‘from an unimpeachable source’ (which may have been signals intelligence), ‘that the new Japanese battleships are