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By Root 2633 0

enemy activity in Iran and, in order to forestall a feared pro-Axis take over, British and Soviet troops occupied the country in August 1941. Hindle became so keenly concerned with security questions that it seems to have undermined his intelligence duties. In September 1942 he produced a string of allegations which ruffled feathers high in the Foreign Office. He complained about one consul who was ‘extremely friendly’ with a Nazi-sympathising German-born woman, a British subject by marriage, who reportedly had been employed by Spanish intelligence in North Africa. When a cabaret which the woman opened, backed financially by the consul, was put out of bounds to British troops, the consul strongly protested to the British minister. Hindle also reported that an officer attached to Sir John Dashwood (who had come from the Foreign Office to review the security of the mission in Tehran) had ‘spent much time in the company of a suspect cabaret girl’. He claimed, too, that there had been various security leaks from the mission and that an unnamed member of the British legation, in reply to a comment from some non-official on the number of secretaries on the staff, had announced: ‘Of course they are not all really secretaries. For example, there is Hindle, who is really in M.I.6.’ Hindle was moved on from Tehran, but the affair illustrates how a legitimate concern for security could become unreasonably magnified and corrosively affect the perspective and work of an SIS officer.

13

West and East

During the Second World War SIS dramatically expanded its operations in both North and South America, and, as Japan appeared to pose an increasing threat to British interests in Asia, there was a modest expansion of activities in the Far East. Before 1939 there were three SIS stations in the Americas: ‘48000’ in New York, where the Passport Control Officer (with the curious telegraphic address ‘Subsided New York’) had responsibility for ‘U.S.A. and Dependencies’; ‘72000’, based in Panama, responsible for ‘Mexico, Central America & all South American countries lying North of, but not including, Brazil and Peru’; and ‘75000’ at Montevideo covering the rest of South America. Although the New York office was to become the most important single overseas SIS station of the Second World War, in the early autumn of 1939 it was something of a quiet backwater. The whole station comprised only nine people: the Passport Control Officer, Captain Sir James Paget, who had been in New York since August 1937, an assistant PCO, four Examiners (whose duties were mostly concerned with actual Passport Control work) and three secretaries. At this time the station appears to have had no agents at all on the books, which reflected Sinclair’s order in June 1938 to cease operations against United States targets.

William Stephenson and the creation of BSC

All this was to change over the next six years. For the first eighteen months or so of the war, before the Lend-Lease agreement of March 1941 when the USA formally committed itself to supporting the British war effort, Britain was faced with a situation where a great proportion of its war production, supply, shipping and foreign investment was situated in a country which had no obligation to protect it, and within which there were substantial minority communities sympathetic to the Axis powers. Although the specific acquisition and security of supplies was in the hands of a British Purchasing Commission, SIS had to provide much of the necessary information, and also step up counter-espionage and subversion work. But this required close liaison with the FBI, which was eventually established through the person of William Stephenson.1

Stephenson had first come to SIS’s notice in the summer of 1939 when he offered to put his British Industrial Secret Service (later Industrial Secret Intelligence) at the disposal of the British government.2 In 1939-40 he provided information about Scandinavian matters, especially Swedish iron-ore supplies to Germany, which Section D were keen to disrupt, and he evidently