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with the German intelligence service, an anti-Hitler former German army officer and a ‘Chillian [sic] Irishman’. He wanted to get the telephone-tapping operation out of the embassy building, but when he found that the cables could not be moved without arousing suspicion, a special room was constructed in the basement. By December 1941 the calls of the German embassy propaganda office and two banks were regularly being monitored. When the Santiago station was closed down at the end of 1943 and Higman brought home, he reported that telephone and postal interception had been among the best sources of intelligence. Up to eight phone lines could be monitored by two operators working simultaneously, and for postal work Higman said that he could ‘obtain, examine, photostat and return to circulation mail addressed to any Post Box’.

Relations with the diplomats could be upset by the most unexpected things. In March 1942 the British consul-general in New York despatched thirteen crates of SIS wireless equipment to Chile. Although he had been instructed to label them as ‘office furniture’, the shipping documents (addressed to the British ambassador) read: ‘Secret English confidential material, nett weight not revealed, declarable value not revealed’. This ‘act of stupidity’, wrote Menzies, ‘may annoy the Ambassador and prejudice him against my representative in Santiago although it was no fault of his’. Sometimes, too, things just went wrong, as when in September Higman’s deputy in Peru reported a ‘quarrel ending in blows between his head agent 414 and a dismissed sub-agent 416’. The head agent, it seemed, had been swindling the sub-agents, ‘retaining ?part of their pay’. In revenge the sub-agent had ‘initiated proceedings against 414 citing British ?Consulate as supposed employer of 414’. A local lawyer had been in touch with the consulate who were ‘sending representative to disclaim such fantastic story’. This set the alarm bells ringing in London where Taylor worried about the potentially damaging fall-out of the affair, especially back in Britain. Reflecting that it ‘may have serious repercussions with YP Lima [the British minister]’, he suggested that Higman go immediately to Peru to handle the matter, ‘the object being that YP Lima should not repeat not send telegrams to ZP [the Foreign Office] on this subject if it can be avoided’. Happily, Higman was able to report ‘situation seems less serious than supposed’; the minister was ‘most understanding and helpful and has not repeat not telegraphed ZP’.

In 1942 it was decided to post a representative to Cuba for counter-espionage work. The method used to establish secure commercial cover illustrates how readily the Service was able to work with private companies, especially in wartime. The officer concerned had previously worked in Havana for a British firm. Felix Cowgill of Section V decided that the managing director of the company should be ‘given some of the reasons why his re-employment would be in the national interest’ and be asked ‘to have the idea that he again needs a representative in Cuba in view of the expanding possibilities there. After due consideration he might decide that [the officer] is the very man for the job.’ If this were done, argued Cowgill, it would reduce talk in the company office ‘to a minimum’.18 In another case, where a British firm were going to withdraw their representative (who was a very productive SIS source) from the Argentine because of a wartime drop in business, the Service persuaded them to keep him on by agreeing to meet half the costs of his salary.

Across South America SIS successfully identified and countered Axis agents. In March 1940 Miller reported one agent foiling the attempted sabotage of a British vessel in Montevideo. A sub-agent ‘hit the saboteur over the head with a sandbag, stole his suitcase and is forwarding one of the bombs home to the D.N.I. now’. In May he ‘obtained shorthand notes of recent inner Nazi party meetings in Buenos Ayres which indicates considerable fifth column progress in Argentine’, and in October he