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protested (with some reason) that ‘figure of 25 percent seems arbitrary and haphazard without basis on which it is computed’, and, noting that he had a total of twelve SIS executive personnel (there were about the same number of clerical staff), a 25 per cent cut would mean a reduction of three officers. He proposed, nevertheless, reductions in staff dealing with South American work, but complained about Payne’s evidently adverse report (‘pettifogging charges based on malicious gossip which seemingly motivated misrepresentation of our activities’), and warned that ‘should B.S.C.’s position here become sufficiently weak then real danger’ would be the gradual ‘subordination of our established position in this ?entire hemisphere to Jones [Hoover]’. This final point appears to have struck home in London, as, although there was a gradual reduction of the SIS presence in the USA, Menzies did not press the need for drastic cuts.

British Security Co-ordination organisation chart, June 1944, showing the wide range of activities within William Stephenson’s North American empire.

BSC’s intelligence work

Beyond the BSC Official History of 1945, clearly designed to show the organisation in the best possible light and based on records which were subsequently destroyed, no comprehensive record exists of its work. Although a sizeable proportion of the many thousands of telegrams between New York and London have been retained, very few of the more substantive letters and reports that went by diplomatic bag appear to have survived. One ‘annual report’ (it is not clear how many of these there were in all), however, exists. Completed in June 1944 and covering a period from March 1943, it provides a useful picture of BSC’s intelligence work during the second half of the war. Within the intelligence branch three sections (each with two officers) actively processed various kinds of information. The Reporting Section handled ‘European theatre reports obtained from 48-land [USA] sources’, prepared the Western Hemisphere Weekly Intelligence Bulletin, compiled ‘data pertaining to 48-land politics’ and had ‘liaison duties’. By mid-1944 the first of these had effectively been superseded by the work of the OSS London office, through which an increasing volume of reports were being channelled. Valentine Vivian thought that the Western Hemisphere Bulletin, while ‘well prepared’ and ‘interesting’, was ‘not an S.I.S. function’ and ‘not worth what it costs’. A similar observation might be made about the political reporting, which was more properly embassy work, and in any case was ‘not usually sent to Headquarters in the form of reports’ but was merely ‘available as background material etc’.

The ‘Superintendent’s section’, though ‘for all practical purposes [a] part of the B.S.C. organisation’, handled material from the Latin American stations and in fact reported directly to London, while circulating some relevant reports locally and to Canada. The Economic Section supplied information about the USA and Latin America for the Ministry of Economic Warfare in London. Among the material provided was intelligence about the activities of the United States Alien Property Custodian, which had control of enemy companies, such as the German chemical concern IG Farben. Aware that the Custodian had ‘embarked upon an ambitious scheme’ for increasing exports to Latin America, and ‘mindful of the fact that some of these [enemy] companies had been restored to German control after the last war’, the Economic Section 4 ‘decided to keep a covert eye on the Custodian’s activities’. It was ascertained that he was negotiating supply arrangements with companies in Mexico, Brazil and Colombia, ‘a development which was pregnant with undesirable implications’. Little, if any, of this had been reported by the Custodian to the British ambassador, ‘but H.M.G. was kept informed by Section 4’.

The largest SIS section, with five officers, dealt with ‘XB’: counter-intelligence and ‘enemy activities and subversive activity’. The report asserted that among the ‘tangible results