Organisational Conflict

Abstract

This chapter looks in depth at the relationships between the Malayan Security Service, Security Intelligence Far East, and the Joint Intelligence Committee (Far East) in the period between April 1946 and June 1948. Britain’s new post-war intelligence apparatus in the Far East appeared conceptually sound but required time to “bed-in”—for remits to be defined, working practices established and personal relations forged. This, however, never happened. From the outset, Security Intelligence Far East and its masters in London clashed with Malayan Security Service. Neither the Governor General or Joint Intelligence Committee (Far East) were able to provide any moderating influence. As a result, on the eve of the declaration of Emergency in Malaya, Britain’s intelligence apparatus in the Far East was fractured and dysfunctional. The impact on forthcoming counterinsurgency campaign would be far-reaching.

Britain had moved swiftly to recast its post-war intelligence apparatus in the Far East—the Malayan Security Service (MSS) had been reformed, Security Intelligence Far East (SIFE) had been created using the same template that had been highly effective in the Middle East, and the Joint Intelligence Committee (Far East) (JIC (FE)) had been established, again using a formula that had proved successful in other parts of the empire. Reflecting both the reoccupation of their territories and the changed relationship between local people and the colonial power, at first blush the new apparatus appeared structurally and conceptually sound, if immature. Clearly, this new apparatus needed a period of stability to “bed-in,” not least for the head of SIFE and the director of the MSS to establish common working practices so that their respective organisations would complement each other rather than compete for resources, influence and prestige. The new system also required leadership, primarily from JIC (FE), which had a responsibility to oversee the whole of Britain’s intelligence apparatus in the region, but also from the Security Service and Colonial Office in London, and the Governor General in Singapore.

However, against the background of Malay and Indonesian nationalism, increasingly violent and widespread labour disputes, and concerns about the growth of international communism, the embryonic intelligence apparatus never got a period of stability. Nor did it get any form of leadership during the crucial formative period prior to the declaration of a state of emergency in Malaya. Despite being co-located at Phoenix Park, Singapore, John Dalley, the director of the MSS, and C. E. Dixon, the head of the SIFE, were unable to identify significant lines of demarcation or establish any form of mutually supportive working practices between their two organisations. This was exacerbated significantly by the influence of Sir Percy Sillitoe, Director General of the Security Service, who worked in the wings to undermine the concept of the MSS, which he believed was “set-up sound.”¹ Ironically, the Joint Intelligence Committee (Far East)—the one body with the remit to referee this contest simply failed to act in any meaningful way.

The Malayan Security Service

As discussed in the previous chapter, the MSS was established in its post-war guise in April 1946. At this time the organisation’s director, Lt. Col. John Dalley, was in London. Dalley had been a member of the pre-war Federated Malay States’ Police Force. At the outbreak of hostilities with Japan he assembled Dalley’s Company (Dalco, also known as Dalforce) which was an irregular, all volunteer, guerrilla force, which comprised of Chinese civilian irregulars. When Singapore fell, a significant element of Dalforce retreated into the jungle and merged with the Malayan People’s Anti-Japanese Army (MPAJA).² However, Dalley was captured and suffered as a prisoner of war for a number of years.³ After the end of the Second World War, Dalley returned to Britain to recuperate. Hence, he was not in Malaya when the MSS was re-formed. While in London, Dalley did, however, engage in debate with the Security Services about the future relationship between his organisation and SIFE. As will be discussed, this debate was to have significant consequences for the MSS, Malaya and Dalley personally.

Dalley, and his deputy, Mr L. F. Knight, had to contend with a number of immediate practical problems, not least a significant shortage of staff. For instance, in March 1947, Dalley wrote to Governor Sir Edward Gent explaining that the MSS was short of thirteen European Officers—over half of his full-time establishment. As a result, he said that “I wish to state now, that M.S.S. is unable to perform its [sic] duties under these conditions. No matter how willing their service, no matter how hard they work, the officers now in the M.S.S. are unable to cover all the ground that needs to be covered.”⁴ Dalley was so concerned about the lack of qualified staff, that he asked the two Commissioners of Police in Malaya “to supply suitable staff for Malaya Security Service from their strength to bring M.S.S up to establishment. This requirement was never fully acceded to…” Similarly, he explained to Sir Ralph Hone (Secretary General in the Commissioner General’s office) that “repeated requests have been made for suitable rates of pay, but even today a translator in the M.S.S., - who handles very secret documents and has available to him information of a highly secret nature - is paid less than a translator in the Chinese Secretariat where, at most, they handle confidential information.”⁵ Dalley’s frustration at not having sufficient and well-remunerated staff is clear. However, the situation did not get better. For instance, in the weeks prior to the declaration of a state of emergency in Malaya in June 1948, the MSS was short of four Local Security Officers (LSOs), fourteen assistant LSOs, fourteen enquiry staff and five translators.⁶ This staffing gap resulted in no permanent MSS presence in Trengganu and Kelantan. Moreover, only one LSO could speak Chinese—clearly a huge obstacle, as this was the primary language of nearly forty per cent of the population of Malaya.⁷

A further practical problem was the lack of executive powers. Like MI5, its metropolitan cousin, the MSS depended upon the police service for powers of search and arrest. The MSS did pass “much detailed information to various authorities in Malaya, including the Police, most of which recommended action.” However, Dalley felt it “unfortunate that in many cases no action was taken that in a large measure has led to the present situation of Malaya.” He further stated, “much of this information has been wasted by no action or no proper action being taken in so many cases.” He illustrated this claim by making reference to the failure of the police either to heed the MSS’s warning to guard the village of Jerantut against the attention of communist bandits, to make coordinated searches of subversive organisations, or arrest their leaders. Despite being the primary intelligence body in Malaya, Dalley bemoaned the fact “there has been and there still is, no machinery whereby the M.S.S. can co-ordinate action. All that M.S.S. can do at the moment is to recommend action.”⁸

The Police should have been both “a prolific source of information” and executive arm for the MSS.⁹ However, Malaya was in a near-anarchic state and it is not surprising that the Police struggled to support the MSS. The Fortnightly Reports from HQ Malaya for 1946–1947, paint, in the words of one official, “a grim picture.” For instance, the cost of rice had risen from $1.50 per month before the war to $20 in 1946. Also, serious crime was at alarming levels—for instance, there were 78 recorded murders and 109 “gang robberies” in January 1946 alone and this pattern was repeated nearly every month in 1946 and 1947.¹⁰ Furthermore, throughout this period, industrial unrest caused the Police great concern, as did deterioration in Sino-Malay relations, links between Malay Nationalist Party and Indonesian nationalists, and activities of Chinese KMT gangs.¹¹ Little wonder, then, that Dalley stated that because the Police “have been so absorbed in the investigation of criminal activities the amount of information received…has been negligible.”¹²

Irrespective of these pressures, it was in fact highly unlikely that the police could do much to help the MSS due to their own parlous situation. The European contingent of the Police force had been decimated by war and internment, and those who survived were in ill-health and low spirits. “Old Malayan hands” mistrusted the newcomers arriving from other parts of the empire. The normally steadfast Indian element of the Police force suffered similar deprivations by the Japanese and some had been wooed by the anti-British Indian National Army.¹³ In addition, many Malay constables were tainted by wartime collaboration with the Japanese and were subject to post-war reprisals by the predominantly communist Malayan Peoples’ Anti-Japanese Army (MPAJA).¹⁴ As a result, there were very few skilled officers to tackle such problems. For instance, the Criminal Investigation Department (CID) in the state of Perak was staffed with only two detectives, one Malay and one Chinese.¹⁵ Even if the Police were free from their primary responsibility to maintain law and order to concentrate fully upon supporting the MSS tackling subversion, engagement with the Chinese community, which constituted 38% of Malaya’s population, was near impossible.¹⁶ A primary reason for this that the Police suffered a similar lack of Chinese speakers as the MSS: just 2.5% of the 9000 strong Police were Chinese and only twelve British Police officers could speak a Chinese dialect. Moreover, the legacy of the Kempetai meant that the idea of agents and intelligence was tainted, particularly for the Chinese community.¹⁷ Hence, while the concept of the MSS depended upon the Police both for the use of executive powers and as a conduit for information, in practice the Malayan Police struggled to fulfil their core responsibility to maintain law and order and were in no position to offer the MSS the level of support Dalley required.

The picture that emerges is one of an embryonic intelligence service which struggled in a number of different levels, not least the lack of staff (both in absolute terms, and in specialist areas, such as translating). This would inevitably hinder its operational capacity and Dalley’s claim to the High Commissioner of Malaya in March 1947 that the MSS could not provide adequate coverage across the territory is understandable. Nor could Dalley turn to the police for support—both Malayan and Singapore police were suffering equally difficult staffing problems and neither Commissioner could release people to MSS, as originally intended. Moreover, both forces were preoccupied tackling immediate threats, such as banditry and ordinary criminality to focus on the more esoteric problems of political subversion. Nor, as will be discussed, could the MSS enlist the support of the Security Service, in the form of SIFE. Indeed, despite significant areas of mutual interest, the relationship between the MSS and the Security Service was soon to prove highly destructive.

The Security Service

Like the MSS, SIFE—the Security Service’s regional clearing house—was beset with problems from the outset. For instance, within weeks of its creation, Dixon, the head of SIFE, fell out with Sir Percy Sillitoe, his metropolitan master. This appears to stem from Dixon’s complaint that SIFE’s dependence on the Army for accommodation, transport and logistical support was compromising security.¹⁸ Sillitoe felt it necessary to remind Dixon that “SIFE and its DSOs constitute an overt Inter-Service Intelligence Organisation and will be in a similar position to the Intelligence Bureau India which is quite openly recognised as a department of the Government. The existence of an organisation called SIFE must naturally become generally known in view of the numerous Service and civilian contacts its members will have to make.”¹⁹ It seems quite remarkable that the head of the Security Service had to remind his theatre head that SIFE was not a covert organisation. Within months Malcolm Johnson, formerly of the Delhi Intelligence Bureau, replaced Dixon as H/SIFE.²⁰ While it seems that the recruitment of Johnson was not connected with Dixon’s confusion about SIFE’s security status, it is clear that SIFE did not have an auspicious beginning.

Johnson soon found fault with the intelligence environment in which SIFE was operating. In particular, he felt that various local police and intelligence forces upon which SIFE depended, including the MSS, were not providing SIFE with sufficient information. As a result, Johnson explained to Sillitoe that “when the local intelligence organisations were [sic] insufficient to cover any particular aspects of Security Intelligence to the extent required, it will be the duty of SIFE to supplement those resources with its own.”²¹ The Director General actively supported Johnson’s recommendations and began the process of transforming SIFE from primarily functioning as a collating and assessment organ to an operational headquarters for intelligence collection.²² Hence, in November 1947, Security Service agents in Burma, Singapore, Malaya, and Hong Kong were tasked to start collecting “basic intelligence data…in respect of organisations which are operating clandestinely.”²³ This move placed SIFE in potential conflict with the regional governments, the Commissioner General and Colonial Office, and most significantly, as will be discussed, with the MSS. However, it is important to recognise that it was with not just the MSS that SIFE would clash. For instance, Johnson’s successor, Alec Kellar was to enjoy fractious relations with the Commissioner General and the Commissioner of Police in Hong Kong (whom the H/SIFE suggested was “the touchiest of mortals”), due to SIFE’s criticism of his force’s inability to undertake “the total commitment of secret postal censorship.” Relations were even worse with Sir Franklin Gimson, the Governor of Singapore. Kellar reported to Sillitoe that he had, “quite frankly, the poorest opinion of Gimson who, apart from his muddle-headedness, is behaving in an entirely partisan way.”²⁴

There was clearly a tension in the balance between metropolitan, regional and local intelligence requirements and expectation about what each element of intelligence apparatus could deliver. A large element of this was driven by ambiguity in the term “security intelligence.” The Security Service defined the term, in relation to SIFE, as “intelligence relating to those individuals and organisations that might have been engaged in espionage or subversion in the various British territories in the Far East.”²⁵ However, the problems with its regional partners prompted Security Service officials to review the definition of the three key functions for SIFE: Security Intelligence; Counter Espionage and Preventative Security. The latter two terms were relatively simple, but the former proved both contentious and ambiguous.²⁶

Security intelligence was central to SIFE’s role. Indeed, it was this aspect of SIFE’s work which ensured the organisation had a continued responsibility to the officials in Malaya attempting to combat the threat from the Malayan Communist Party (MCP). However, Sillitoe sought to disaggregate the concepts of security and political intelligence. The reason why he chose to do this is not easy to understand, particularly when there can be such a fine level of distinction between political intelligence (for instance, relating to the ideological development of MCP) and security intelligence (for instance, information which indicated that the MCP aspired to overthrow the colonial regime in Malaya). Potentially Sillitoe’s attempt to distinguish between security and political intelligence may have been a ploy to allow his scant resources in the Far East to focus upon the wider threat posed by international Communism but this explanation is largely undermined by the regular criticism made by SIFE that the MSS was failing to share local intelligence with them. Sillitoe appears to have wanted it both ways—to be provided with intelligence by local police or intelligence agencies but not to have any responsibility for this intelligence unless it related to the security of the United Kingdom (rather than individual territories in the region). This was clearly in conflict with SIFE’s core responsibilities.²⁷

In theory, the establishment of SIFE provided the Security Services with a regional clearing house, focused upon security intelligence. This specifically included threats to internal security across Britain’s territories in the region. In many respects, SIFE’s set-up and remit was not unlike its highly successful counterpart in the Middle East.²⁸ However, as will be seen, in one respect SIFE was flawed. That was because, despite its aspiration to be a collection agency, in reality, it was dependent upon local actors, predominantly but not exclusively local police forces across the region, to provide its DSO’s with intelligence. Unfortunately, the relationship between SIFE and the various regional governments proved to be, at best, difficult. In the case of Malaya, it was to prove disastrous.

The Relationship Between SIFE and MSS

The origins of the divisive relationship between SIFE and MSS can found in their overlapping remits, but this was exacerbated significantly by Sir Percy Sillitoe’s desire to secure regional hegemony for intelligence apparatus in the Far East. As discussed in the previous chapter, both the MSS and SIFE were officially “stood up” on 1 April 1946, the latter with a Pan-Malaya remit for security intelligence and the former with a much broader regional responsibility. However, within weeks of both organisations coming into formal existence, concern was being expressed about adequate lines of demarcation. For instance, on 11 July 1946 Colonial Office explained to the Governor of Malaya that “Security Authorities [The Security Service] here have expressed concern lest proposals are being formulated with adequate consultation with SIFE and DSOs and have expressed hopes that any proposals put forward will be related to and co-ordinated with the functions of existing Security Organisation in the Far East [SIFE].” They added that the Security Service was planning to “reinforce” SIFE with extra staff and that “it would materially assist them if you could indicate when you will be in a position to submit your proposals.” This clearly suggests that the Colonial Office and Security Service were waiting for the government of Malaya to provide them with more detail about the remit of the MSS.²⁹

A few days later, Malcom MacDonald, Governor General of South East Asia, wrote to Gimson, the Governor of Singapore, referring to a conference held on the 9th May in which “certain decisions were taken regarding future organisation of the Malayan Security Service and that Commissioners of Police were instructed to formulate a scheme on the lines laid down by the two Governors.” MacDonald went on to say that “in arriving at your conclusions on the 9th May [to support the MSS], I am not clear as to what extent prior consultation was held with the head of SIFE and the Director of Intelligence at SACSEA [Supreme Allied Command, South East Asia] Headquarters.” McDonald noted he had not received a copy of SIFE’s charter or the directions issued to its two DSOs and he questioned “how directions for the Local Security Services [the MSS] under your control can be formulated without these documents.” He added that “it seems to me that in a matter of this sort we need the best advice available and that any security organisation that is set up is properly dovetailed into other security organisations which might exist.”³⁰ On 23 July, the Colonial Office informed Gent that “copies I.F.E. [SIFE] Charter and Memorandum Instructions for DIXON will be despatched to you by air mail as soon as possible. As these show function of I.F.E. in detail it is suggested that you should defer submission of any proposals for Pan Malayan Intelligence Bureau [MSS] until you have had an opportunity of seeing these papers.”³¹ In fact, the Colonial Office was too late—news that the MSS had already been set up had simply not yet reached London. Similarly, SIFE had been established without its remit being circulated to the Governor General. This did not bode well.

Moreover, MacDonald’s note caused a degree of umbrage. Gent acknowledged the need for “any final decisions regarding the future organisation of the MSS should be made after consultation with the representatives of other Security Organisations working in the area.” However, he felt that whatever “security organisation we are going to have, trained staff will be necessary, and I think we shall have to go ahead with obtaining financial provision and recruiting at least a proportion of the Asiatic Inspectors that we know we shall need. I think we can safely do this without prejudicing any scheme of organisation which may be decided on in the future.” He also argued that it was “vital for the MSS to be a purely civil organisation under the control of the Civil governments, and not of SIFE or any of the Security organisations.”³²

Further disquiet was caused at Governors’ Conference held in Malacca in August 1946, when the issue of the MSS was discussed. Alexander Newboult, the Chief Secretary of the Malayan government, suggested that the two Commissioners of Police, the Director of the MSS, and the DSO (for Malaya) should be directed to “meet at once to set up a regular consultative machinery.” In response to this instruction, the Commissioner of Singapore Police retorted “it is a great pity that professional police advice is not sought in this country, as it is elsewhere, before issuing instructions to senior Police Officers regarding cooperation among themselves.” He added “the closest cooperation exists between Mr Haines, Acting Commissioner of Police Malayan Union, Mr Knight, Acting Director of MSS, and myself, and the Defence Security Officer has his office almost next door to that of Mr Knight, and there is the closest liaison.”³³ Events were soon to show that this was optimistic at best.

The first draft document to articulate the organisation, staffing and duties of the MSS was circulated in August 1946 (i.e, some four months after it was formally “stood-up”). The document stated the main functions of the MSS were:

• a. To collect and collate information on subversive organisations and personalities in Malaya and Singapore.

• b. To advise, so far as they are able, the two Governments [Malaya and Singapore] as to the extent to which Internal Security is threatened by infiltration from such organisation.

• c. To keep the two Governments informed of the trends of public opinion, particularly in the political field.

• d. To control aliens.

• e. To maintain a close liaison with other security intelligence organisations, using the DSOs as their link.

• f. To supervise the annual pilgrimage to Mecca.³⁴

At the same time, Sir Percy Sillitoe issued SIFE’s Charter.³⁵ This stipulated that SIFE’s primary responsibility was “the collection, collation and dissemination to interested and appropriative Service and Civil Departments of all Security Intelligence affecting British territories in the Far East.³⁶ More specifically, Sillitoe indicated that SIFE should provide “interested and appropriate departments with information and advice upon the following subjects:

• a. Any foreign Intelligence Service whose activities are directed against British territory in the Far East or inimical to British interests or security.

• b. Any political or subversive movement, whether indigenous or foreign, which is a danger or potential danger to British security.

• c. Arrangements for the detection of illicit signals and other clandestine means of communication.

• d. Coordination of Security policy relating to Travel Control of arms and explosives, the protection of vital installations and the prevention of sabotage.

• e. Information from SIFE records which assist the DSOs or appropriate bodies in checking the credentials and back history of doubtful aliens, residents and visitors.”

Critically, the charters gave both organisations a responsibility to tackle subversion—for the MSS this was limited to in Malaya, while SIFE had a regional responsibility. The initial reaction from the Acting Director of the MSS to the Charter for SIFE was “fairly strong” because he considered “that a normal reading would inevitably lead to the understanding that a separate (and rival) organisation was about to be set up, and the MSS was to be by-passed.” Moreover, he admitted, “a first reading…gave me the impression of a sort of a Gestapo organisation” whose DSOs would encounter such “antagonism in certain specialist departments that he would be seriously handicapped in carrying out his duties.” However, Knight discussed the documents “point-by-point” with H/SIFE and came to a better understanding of how the two organisations would coexist.³⁷ It was subsequently agreed that “SIFE could function adequately in Malaya according to its charter if the MSS were suitably organised.” As a result, initial proposals for the CID to be expanded to take on political security were dropped and the MSS responsibility was limited to internal security.³⁸ While the discussions effectively removed the Police from security intelligence, it remained unclear how SIFE and MSS intended to work “as one”.

Whether SIFE chose to keep representatives (Defence Security Officers) “on the ground” depended on the territory in question.³⁹ If SIFE chose to do so, the primary task of its DSOs was to work with the local Police and security organisations, acting as liaison officers. In relation to Malaya, this liaison should have been easier because both the SIFE and MSS had their headquarters in Singapore.⁴⁰ Indeed, the Governor General’s office stated that there was no reason, “given goodwill and a spirit of co-operation,” why the SIFE and MSS should not work harmoniously.”⁴¹ Nonetheless, there was an obvious potential for overlap, between local and regional intelligence organisations. This was highlighted in a letter written in August 1946 by Courtenay Young about SIFE’s links with the Secret Intelligence Service (SIS, aka MI6) in the region. Young suggested that the “only way in which the D.S.O can justify his position as ‘security adviser to the Governor’ is to be able to present the large picture of subversion, and SIFE should be the source of this through MI6.” Rather presciently Young warned that “for the DSO to set up an agent network in competition to M.S.S. would only end in tears.”⁴²

Similarly, the lack of clarity of purpose was clearly a question of frustration and concern to Dalley as much as anyone else. In March 1947 he wrote to Gent, stating “we must have a properly devised machine…we do not yet possess that.”⁴³ Indeed, Dalley prophetically argued that:

Up to present, only a small part of Security has been touched. We are still at the stage when we are only scratching the surface. In my opinion, the situation is urgent. We do not begin with the shooting of guns. There is a period of psychological and ideological preparation. That period has begun and we are unprepared for it. We do not even know what advance has been made; we do not even know the direction of the attacks. We can see it and its results all around us, but we have no real knowledge of it, and can have no real knowledge of it until we have an efficient and fully staffed Security Service. I would also like to point out that the Malayan Security [Service] is not, and cannot be isolated; it must be a part of and fit into the bigger frame-work of Empire security. If the M.S.S. falls, then a gap is left in that bigger frame-work, and a gap in one of its most important and vulnerable areas.

Although the majority of this tension was manifest at Phoenix Park, Singapore, the influence of Sir Percy Sillitoe some 6700 miles away in London was quite evident. A first indication of the view from the highest levels of the Security Service is given as early as November 1946, even before Dalley had returned to Malaya, when Guy Liddell, Deputy Director General, concluded that the “Malayan Security is usurping the functions of SIFE.”⁴⁴ A year later this same concern prompted Sillitoe to write to the Colonial Office. He alleged that Dalley had claimed “he was, and is, in a position to run agents into Siam and the Netherlands East Indies, and he also maintains liaison with representatives of foreign intelligence organisations in Singapore, as for example the Dutch and Americans.”⁴⁵ Sillitoe acknowledged the potential of being seen to “interfere in what is obviously primarily a matter for the Colonial Office, and local Governments concerned.” Nevertheless, he continued to suggest that the root of the problems were due to “the curious position of the Malayan Security Service”, its “unsound set-up,” “and from a lack of any clear definition as to the division or work between them and SIFE and of their intelligence functions.”⁴⁶ Within a month, Sillitoe reinforced his complaint. He claimed that in addition to running agents in foreign territories, “the S.I.F.E., through the DSCO [sic] is not receiving from the M.S.S. the information about internal subversive activities in the Malayan Union and Singapore which it has a right to expect.” Moreover, there were reports of “serious friction between the head of S.I.F.E (Major Winterborn) and the head of M.S.S. (Mr Dalley).” As a result, Sillitoe offered to stop in Malaya, on his way to Australia, to look into the matter.⁴⁷

A meeting subsequently held at Government House on 20 March 1948 involving MacDonald, Gimson, Sillitoe, Winterborn and Dalley (notably by his absence was Patrick Strivener, chair of the JIC). During this meeting Winterborn was asked to give his views as to why cooperation between SIFE and the MSS was lacking. He said “…too many minor incidents were occurring. These were not necessarily due to lack of operation—they might be due to lack of staff, lack of appreciation of SIFE’s functions, or through failure to adhere to charters.” He went on to provide a number of instances of when intelligence of potential value to SIFE had not been passed on to his organisation or had been but with a significant delay. These included the failure to notify that an “American Journalist of great Security value had passed through Singapore and that it was not 12 days after he had left that he [Winterborn] had heard of it”; a further incident when there was a delay of three months to receive a report from the American Liaison Officer “on the activities of one BUCHAN”; and when MSS had failed to pass on an intercepted letter which appeared to confirm that a target had in fact been communicating with the Siamese Embassy in London.” Winterborn went on to mention a letter written by Mr Morris, Deputy Director of MSS, which “indicated a refusal to hand over intercepted letters to or from external addresses.” Finally, he complained that the MSS refused to share their draft Fortnightly Political Intelligence Journals. This teased a broader complaint—“he thought Colonel Dalley did not fully appreciate SIFE’s functions, which were of a wider character than those of the M.S.S. If M.S.S consider it necessary to go outside of Malaya for reports and information, he thought they could at least consult with SIFE before publishing their reports.”⁴⁸

Dalley defended his organisation by suggesting that the problems regarding intercepted letters was simply due to insufficient staff (at the time the MSS had three translators out of an establishment of eleven) rather than a lack of good-will, and that the lack of consultation with SIFE before circulating the fortnightly Political Intelligence Journals was the product of the need to produce timely intelligence reports. Furthermore, he acknowledged his organisation looked outside of Malaya (therefore straying into SIFE’s remit). This was because “the breadth of his own knowledge derived from pre-war experience of intelligence work necessitated a wide perspective for his security field. He emphasised that he found it impossible to give the two Government’s a proper picture of the security position within their own territories without going outside for background reports from any country in the Far East.”⁴⁹

Despite the significant tension within the intelligence apparatus, these problems do not appear to be insurmountable. As MacDonald said, “If the heads of the two organisations could thrash out the reasons for the ill feeling, they should themselves be able to arrive at a satisfactory solution…cooperation should be the keynote of both services.” However, the situation was not merely one of more dialogue, more frequent consultation or more effective cooperation. This was because the issue had become infected with personal animosity. For instance, at the very beginning of the meeting held on 20 March, Sillitoe demanded, and received, from Dalley a full apology for previously suggesting that he “was only a policeman from Glasgow, without any security experience.” Later in the meeting Dalley suggested that MacDonald “had said to the wife of one his subordinate officers that he would get Dalley out of the country within a month.” Needless to say, MacDonald denied making such a remark (and subsequently proved to be a staunch ally of Dalley.) Finally, Sillitoe, without prompting, informed Dalley that “neither himself nor any members of his organisation had opposed” Colonel Dalley’s membership of the JIC (FE) which at that time was under review. Events were to prove that Sillitoe was not telling the truth in relation to this. Ostensibly both Sillitoe and Dalley reaffirmed their commitment not to let personal jealousies “stand in the way of the country’s security.” However, Guy Liddell’s diary’s makes it clear that Sillitoe had already determined to “concentrate on getting the organisational set-up changed, namely, the division of the M.S.S. into two Special Branches, one for the Singapore Police and other for the Malayan Police.”⁵⁰ MacDonald concluded the meeting by saying “we are living on the edge of the volcano and that a first-class intelligence system was indispensable to our security.”⁵¹ Perhaps squabbling on the edge of a volcano might have been a more appropriate metaphor.

Joint Intelligence Committee (Far East)

The JIC (FE)’s silence in this dispute is all too apparent. Despite taking eighteen months for the JIC (FE) to have a defined charter, there was a clear expectation that it would coordinate intelligence and counter-intelligence activities in the region; after all, this was a key principle of the JIC “template,” one which was subsequently confirmed as a key tenet of the JIC (FE)’s self-defined charter. Yet in the context of the single biggest challenge to confront the JIC (FE)—that is Malaya’s descent into a state of insurgency—it singly failed to coordinate, supervise or oversee intelligence within the region.

Guy Liddell’s diary again provides a useful indication at metropolitan frustration with the situation in the Far East in general and in relation to the JIC (FE) specially: his entry for the 23 May 1947 states that the secretaries and chairman of JICs abroad should experience how the JIC (London) operated; on 4 June 1947 he notes the “untidy” and “wooly” state of JIC (FE); and on 5 December he informed the JIC (London) about the “somewhat unsatisfactory state of affairs in the JIC (FE).⁵² An internal SIFE document highlighted a number of structural concerns about the JIC (FE). For instance, it was felt to be too “bulky”—Alec Kellar, the head of SIFE, noted that the geographical area which fell under the remit of the BDCC (FE) had been broadened and he questioned how the governors of Malaya and Singapore, H/MSS or the Australian representative of the JIC/FE could be “in a position to contribute anything useful on the conditions in China.” Kellar also argued that the “top heavy” nature of the JIC/FE made it difficult to discuss matters of a top-secret nature.⁵³ Moreover, Sillitoe questioned whether the head of the MSS should have a permanent position on the JIC (FE). Dean Acheson wrote, on behalf of Malcolm MacDonald, the Commissioner General, to Sillitoe in April 1948. He explained that the composition of the JIC (FE) had been discussed while MacDonald was in London for talks (when Sillitoe was visiting Australia). He outlined the case for streamlining the JIC (FE), but noted that while MacDonald “appreciates the logic of this argument he did not feel that in practice it should prevail in relation to the Director of the Malaya Security Service.” This was because MacDonald believed that “security considerations in Malaya were of such general importance to defence arrangements in the region as a whole that the Director of the Malayan Security Service ought to be a full member of the Committee.”⁵⁴

Sillitoe’s response to MacDonald’s rebuttal was swift. It took the form of a summary of the JIC (FE) history. He noted that as originally constituted “it had not only the intelligence representatives of the three Services, the JIB, the Governor General and the Special Commissioner, but also the Director of Malayan Security Service and certain other officials in Singapore.” The members of the JIC (FE) had little experience of the JIC system “and occasionally appeared to desire to bring with their Charter, subjects which could not strictly speaking be regarded as matters of concern to a Joint Intelligence Committee.” Moreover, the JIC/FE, argued Sillitoe, concentrated almost entirely upon matters of purely local Malayan concern. Indeed, he considered it “illogical that the Director of the Malayan Security Service, who can only be concerned with a small position of the territories covered by the JIC (FE), should be a full member of a JIC whose area of responsibility extends from Burma to Japan.”⁵⁵ It is interesting to note that Sillitoe deliberately made the point that the issue of MSS representation was not one instigated by the Security Service. George Seel, the first Colonial Office representative on the JIC (London), reviewed Sillitoe’s argument and conceded that he made rather a strong case. Consequently, Seel advised MacDonald that he was unlikely to get the support of the JIC (London) and that his best tactic might be to seek their approval to resolve the matter locally.⁵⁶ Seel’s views may have been influenced by Hayter who sided strongly with Sillitoe, suggesting that the inclusion of the H/MSS in the revised charter for the JIC (FE) would “tend to divert the attention of the Committee away from its main purpose of considering strategic matters towards parochial affairs.”⁵⁷ JIC (London) agreed for the issue to be decided locally and, despite MacDonald’s support for Dalley, the military component of the JIC (FE) could not be persuaded of the need to accommodate the H/MSS on a permanent basis.⁵⁸ MacDonald was out manoeuvred.

While Hayter and MacDonald were trading points on the future direction and shape of the JIC (FE), and Sillitoe and Dalley were swopping blows over the position of the MSS in the regional intelligence apparatus, Malaya was descending rapidly into violence. This led the government of Malaya to declare a state of emergency on 17 June 1948. Rory Cormac suggests that, “a striking feature of the declaration was that violence took the government by surprise.”⁵⁹ Certainly, the JIC (FE) failed to warn of Malaya’s descent into violence and the potential impact upon Britain’s strategic interests in the region. In the aftermath of the declaration of Emergency, Hayter defended the JIC (FE), blaming “the poor intelligence organisation of the Malayan Police.”⁶⁰ It now seems that this is a weak argument. As will be discussed in the next chapter, both the Fortnightly Political Intelligence Journals (PIJs) produced by the MSS and the Intelligence Reviews produced by General Headquarters (GHQ), Malaya Command, exposed as early as 1946 that the MCP’s intended to overthrow the government in Malaya. Moreover, they also demonstrated the growing capability of the MCP to turn their aspirations into reality.⁶¹ The distribution list of the PIJ show that, among others, the High Commissioner of Malaya, Governor of Singapore, the Governor General, Colonial Secretary of Singapore and Chief Secretary of Malaya, the Defence Security Officer (Singapore), the three Services intelligence chiefs, the General Officer Commanding (GOC) Malaya, and the Joint Intelligence Bureau (JIB), Singapore, representative all received these reports. Moreover, Dalley sat on the JIC (FE), as did his SIFE counterpart. The issue was not a lack of intelligence but that the JIC (FE) was not listening.

In the absence of clear documentary evidence or oral testimony from JIC (FE) members it is difficult to attribute with any degree of certainty why the committee failed to realise or act upon the growing threat posed by the Malayan Communist Party. Some commentators have criticised the style in which the MSS reports were written. They were undoubtedly both detailed and wide-ranging. At times they were verbose and tackle multiple potential threats to the Malayan administration.⁶² But to imply that the members of the JIC (FE) might have been unwilling, deterred or unable to appreciate the MSS reports because of the style in which they were written is to do them a disservice. That said, Dalley was clearly a polarising character: Sillitoe and SIFE, on one hand, appeared to have demonised him; MacDonald and Gimson on the other considered him as an intelligence expert worthy of a place within the regional intelligence machine long after the decision to disband the MSS had been taken. The views of the other members of the JIC (FE) are not known, but it is plausible that the committee was as split by Dalley just as much as the wider executive. Certainly, we know that SIFE considered itself as the only organisation that could “provide the Defence Committee or the JIC (FE) or any other authority, with coordinated advice and information on Security or Counter Espionage matters.”⁶³ If the JIC (FE) believed this argument, they would naturally place less weight on the MSS. Moreover, the on-going debates about the JIC (FE)’s charter and composition must have been both unsettling and distracting—indeed, perhaps the obvious questions are that if it could not regulate and manage itself, how could the JIC (FE) either pay full attention to the implications of deteriorating security in Malaya or coordinate intelligence across the region?

Conclusion

The British intelligence apparatus in the Far East was in a parlous state in the period between the return of British forces to Malaya in August 1945 and the declaration of a state of emergency in the summer of 1948. The initial concept was to have, in effect, concentric rings of cover: at a local level this would be provided by the police or, in Malaya’s case, the MSS; security intelligence across the region was within the remit of SIFE (while the services’ intelligence capacity oversaw more orthodox defence intelligence, and MI6 oversaw foreign intelligence in the region). These organisations should have had a symbiotic relationship with JIC—they should have supported the JIC’s drafting staff and came together as one within the committee itself to provide strategic intelligence assessment, while the committee had a responsibility to coordinate and manage the apparatus as a whole. The reality on the eve of the declaration of emergency in Malaya was very different.

Rather than being collaborative, indeed mutually supportive, the intelligence organisation was fractured. The most obvious issue was the deep division between SIFE and MSS. This was the result of a perfect storm—the lack of resources, personal rivalries, and the lack of effective leadership either at local, regional or metropolitan levels, all of which were played out against the backdrop of an ever-worsening security context in Malaya. Given their respective abject lack of staff, it is remarkable that SIFE and MSS could not develop more mutually supportive working practices. For instance, rather than devote resources to secure intelligence about threats to Malaya emanating from foreign countries, it would make sense for the MSS to enlist the support of either SIFE or MI6. Dalley explained to Gimson that he did indeed “obtain information from a variety sources from areas covered by M.I.6, all of which is passed on to M.I.6. This is possible because of our close personal liaison with M.I.6.” He stated that he obtained information from the Hong Kong Police because he maintained “personal direct liaison.” Indeed, Dalley talks about “handing over a high-grade agent to M.I.6 to work in Siam.” All this sounds very personal—Dalley trusted MI6 but not SIFE. Given the level of back-briefing being conducted by Sillitoe this lack of trust is, perhaps, understandable. The consequences, however, were very significant. Put simply, the British intelligence apparatus in the Far East was both ill-prepared and ill-equipped to tackle the existential challenge posed by the Malayan Communist Party to the Federation of Malaya.