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At this gathering, attended by officers from both SIS and MI5, Owens was asked why he wanted to see them, given that as far back as November 1936 he had been told that SIS no longer wished to employ him on any kind of intelligence work because his information was of no value. Owens replied that he had made a good contact in Germany and entered into discussions about batteries, but Hinchley-Cooke reminded him that he had told them already that he was in touch with the German Secret Service, and that this was an additional reason why SIS did not want to work with him, as there could be no question of his ‘running with the hares and hunting with the hounds’. Owens was informed that the British had no further use for him, and he was asked to sign a document in acknowledgment. Owens queried the need to do this, but it was pointed out to him that if he chose to have dealings with the Germans and got into difficulties, a record on his file was required, so that his dependants could not claim compensation. Apparently mollified, Owens then signed the document, acknowledging ‘I fully realise that I am not employed and have not been employed since November 1936 by any British Intelligence Service.’

There was a certain finality about this humiliating rejection, but the
ever-resourceful
Owens seemed unconcerned and posted a letter to Rantzau in which he referred to various tests and technical matters, and then made a bold suggestion.

Far from being discouraged, Owens pursued his cultivation of Rantzau, and his next letters reverted to being concerned with tests and batteries. The content appeared harmless and the tone was friendly, occasionally raising the prospect of a visit to Dr Rantzau, sometimes suggesting he would be accompanied by his wife, but also mentioning the possibility of other lady friends too.

By now, at the end of 1937, Owens’ shortage of money was escalating into a crisis, and he was served with a court summons by Central & District Properties Ltd. But he remained determined to be in the intelligence
business
and, once again, in early 1938 approached the Security Service with a series of photographs that he claimed showed German warships moored in Hamburg.

Unwittingly, Owens had demonstrated remarkable timing, for in January 1938 MI5 intervened to close down the network that had been built on the newspaper advertisements that had attracted Draper – by arresting one of the three women implicated. One, Mrs Brandy, was traced to Dublin; Mrs Duncombe disappeared from her London address, and Jessie Jordan, a hairdresser of German parentage in Aberdeen, was taken into custody
successfully
.

Altogether MI5 had identified no fewer than thirty individuals to whom the Germans had made a pitch. Twenty-one were British, and most of them had made no attempt to collect intelligence of value to the Germans, but simply passed on items of little significance in a bid to get maximum reward for minimum effort. They had received no training at all, and the Abwehr’s methodology had appeared inept. Half of the cases involved individuals who were never in a position to procure intelligence of any value, but among them were four ex-officers, four businessmen and four members of the armed forces. Almost all had reported the approach to the authorities immediately.

The Germans had managed their recruitment campaign by responding to ads in the classified columns of the newspapers inserted by men seeking jobs. The Germans also placed advertisements themselves in British papers offering jobs for commercial and technical experts. Eleven of the thirty approached told MI5 about the German offer; nine were exposed by mail intercepts, five were denounced by private individuals whose suspicions had been aroused, one was reported by an immigration officer, and one was denounced by an anonymous informant; the other two were uncovered by accident. Of the eleven agents who reported they had been recruited by the Germans (who would probably have escaped detection), half had been recruited through an intermediary.

Three Post Office boxes, registered in the names of different women, yielded a great deal of information. Mrs Duncombe in London received intelligence collected in France, while Mrs Jessie Jordan was used as a
mail-drop
in the United States for another spy, Sergeant Guenther Rumrich. When Rumrich’s brother was arrested in Prague he was found to be in
possession 
of the address of a Mrs Brandy in Dublin, and this was the third mail-drop. Clandestine examination of her correspondence showed that she was receiving accurate and therefore dangerous intelligence messages from a French merchant navy officer named Aubert who was arrested at the end of 1938 and shot.

Once Owens’ photos had been studied by experts, he was called to a
meeting
at the Naval Intelligence Division’s suite of offices in the Admiralty on 7 April 1938, attended by Hinchley-Cooke and other MI5 officers, but the photographs were returned to him and he was required to sign a receipt for them. He was then reminded that he had been warned that the British intelligence services did not wish to have any dealings with him, and was escorted out of the building with a warning not to return.

While the Admiralty remained keen to learn more about the
Kriegsmarine
’s U-boats, there was rather less interest in the remainder of the German fleet, as all the evidence available confirmed that Germany had stuck rigidly to the terms of the Anglo-German Naval Treaty, and possessed just two old battleships, two battle-cruisers, two pocket-battleships, eight cruisers and twenty-two destroyers. Their movements were easy to monitor and there was nothing to suggest that Hitler’s rearmament plans for the Wehrmacht and the Luftwaffe had been extended to the
Kriegsmarine
. Whatever Owens’ photos purported to show, it could not have been news to the NID analysts.

Owens’ next move was to contact the British Union of Fascists and in July 1938 he told the organisation that he had returned to Britain in 1934 to do unspecified technical work for the government, after which he joined the intelligence service and was engaged in espionage in Germany. To prove his bona fides, Owens alluded to various companies that he claimed were fronts for the Security Service, such as Indexes Ltd, Kell Products Ltd, and the St Ermin’s Hotel, as well as the names of certain officers. He also insisted that his work had revealed to him serious corruption in the British intelligence service and that it was run by Jews. He claimed to be well posted with regard to current international affairs and said that the Jewry was preparing an attack on Germany, and that England would find an excuse, probably via Russia, to declare war on Germany.

Obviously unaware that the BUF had been heavily penetrated by
informants
working for MI5, Owens asserted that the best way to stop this war was through propaganda broadcast from secret radio stations, adding that he wanted to find six men ‘who could be trusted to do what they were told’, and asked whether the BUF could supply them. He offered them money
from Germany to fund the scheme and added that it might be necessary to employ measures more drastic than propaganda: if the BUF had a reliable following who would ‘stick at nothing’ to show the government how much they were in favour of Germany and detested the Jews, he could arrange for a cargo of arms for use in an attempt to seize power.

He also mentioned that he was keen to get details of naval bases,
numbers
of anti-aircraft guns, and in particular information about aerodromes in Kent and Essex, including Biggin Hill and Manningtree. He went on to claim to be ‘a direct personal agent of Hitler’. Perhaps suspecting him to be an
agent provocateur
, the BUF’s leadership ignored Owens, but the approach, monitored by MI5, prompted a secret and urgent memorandum dated 8 July 1938 addressed to Hinchley-Cooke:

Apparently irrepressible, Owens had ventured into dangerous territory, for the BUF was widely regarded as a potential Fifth Column, a pool of political activists, some of them well-connected, who were not only sympathetic to the Nazis, but included Blackshirts thought to be subversive. Led by a former Labour Member of Parliament, Sir Oswald Mosley, the movement espoused patriotism, but within Whitehall contingency plans had been drawn up to apprehend the most dangerous fascists and place them in emergency
detention
in the event of war. MI5’s role was to identify the ringleaders, so Home Office warrants had been issued to monitor the telephone lines into the BUF’s headquarters in London, and intercept the organisation’s mail. The correspondence from S
NOW
was found among the intercepted letters.

Before any decision was made about prosecuting him, Owens made his way to Germany, accompanied by his wife Jessie so that she might have a holiday. Their departure and return were observed by MI5 and the
monitoring
of Owen’s mail revealed that he had begun communicating with a Dr Wilhelm Wertzel of Hamburg, to whom he sent reports on troop movements and even some political commentaries which included references to the Foreign Secretary, Anthony Eden, and his reaction to the German seizure of the Sudetenland: ‘Spent afternoon with War Office officials. Informed that
Eden is taking an active part in Czechoslovakia. One official said, “we have been too damned easy with Germany, now we are ready.”’

In another message he wrote: ‘Feeling against the Jews in military and army circles getting very strong, heard several rumours of desertion.’ And in a further letter he informed Wertzel that: ‘Chamberlain leaving for Germany sometime today. This move is a stall.’

The correspondence suggested that, operating independently, Owens had developed his relationship with the Germans and had become quite close to Dr Rantzau, having spent time with the doctor’s family and introduced him to Jessie. As a result, he had been well paid and had earned the Germans’ trust. This collaboration had left him in possession of yet more sensitive material, and on 24 September 1938, at the height of the Munich crisis when war with the Nazis looked imminent, Owens once again visited Scotland House with what he believed was knowledge so important that the Security Service would have to take notice. The interview with Hinchley-Cooke,
accompanied
by a police inspector, was recorded, and the resulting transcript showed that Owens had tried to tempt Hinchley-Cooke with what was purported to be vital information, but the MI5 officer had opened the conversation by reminding Owens of their previous meetings when he had been told that the authorities wanted no further dealings with him.

Having forced Owens to acknowledge the gravity of his situation,
Hinchley-Cooke
confronted him.