In 1936 a resolution was passed about a new defence order which came into force 1 July 1937. The resolution included provision for the establishment of an intelligence department, a signals intelligence department and a cryptology department.
However, the prerequisites for an effective intelligence service were not so good. Swedish intelligence services in the modern sense of the word had indeed been already established in the beginning of this century. The armed forces intelligence service had increased in 1905, during the Union crises, and in the First World War. The General Staff and Naval Staff of that time both had their own signals intelligence and cryptographic units. However, in the inter-war period less and less was done. The knowledge acquired in signals intelligence and cryptanalysis was lost. Politicians of that time did not understand the importance of a well-functioning intelligence service and consequently they did not grant any appropriations for this purpose. Nor did the Defence Commission, which was appointed in 1930 and on whose report the 1936 Defence Resolution was based, take any appreciable interest in the intelligence service. The General Staff's foreign department did not constitute a solid enough foundation for such a service. No special agency for cryptanalysis existed before the Defence Staff was established, although the cryptographic departments at the Naval and General Staffs had some success during the First World War. The encrypted radio traffic of the Russian Baltic Fleet could be broken to some extent. The General Staff probably broke German diplomatic traffic periodically.
The breaking may have taken place even earlier, but solid information about this is missing. These breaks, however, were probably quite sporadic and had a ``chamber character'', i.e. rather amateurish.
From the summer of 1928 signals intelligence was carried out fairly regularly under naval direction. In the beginning it took place from the warship Sweden (Sverige) and from the summer of 1929 from several ships in the coastal fleet. From October 1929, signals intelligence was also carried out from naval coastal radio stations.
The first attempts to develop this branch of the intelligence service were made by the Navy. During the years 1930-31, the Naval Staff had already organized a course in cryptology and cryptanalysis. Ships in the coastal fleet started the systematic interception of foreign radio traffic in spring 1931. Later professional intercept operators were trained on the warship Queen Victoria (Drottning Victoria). The first successful attempts to break foreign cipher traffic were made in spring 1933, when they succeeded in breaking the cipher then used by the OGPU (later the KGB). These breaks into foreign military ciphers were probably the first to be made in Sweden after the First World War. The naval cryptography courses of 1930-31 were repeated in 1932-33 and 1934-35. An agreement was reached between the Naval and General Staffs to run these courses alternatively every second year.
The instruction was based on theory with special exercises. The real material available was too complicated to be used in the teaching. Even if these cryptanalysis courses did not result in real breaks, they were nevertheless of great importance as they created a small cadre of trained theoretical cryptanalysts, consisting of both active and reserve officers together with conscripted students. Later on civilians from the University of Uppsala, among others, were also trained as cryptanalysts. One of these students was the mathematics professor Arne Beurling.
When the future Defence Staff organization was analysed in 1935-36, cryptology-committed interest groups succeeded in pushing through the establishment of a department for cryptography and cryptanalysis -- the crypto department. In some quarters a crypto department was considered unnecessary but, in spite of opposition, one was set up during the final stages of establishing the Defence Staff. Sections I to III were intended to deal with the cryptographic security of the Army, Navy and Air Force. The fourth section, crypto section IV, was intended to be a cryptanalytic section. Thus, the foundation was created for a central cryptanalytic organization. It was in crypto section IV that the Geheimschreiber traffic would later be broken.
Radio interception was taken care of by the Defence Staff's signals department. However, the actual signal-intercept work was completely carried out by the Navy, which was the only force with access to qualified intercept personnel.
The crypto department led an ambulatory existence during 1936-40. In the beginning, it was housed in the staff building ``Grå Huset'' (The Grey House) in Östermalmsgatan 87; later in a house on Lützengatan. During the summer of 1939 the approaching war became more evident and the department intensified its mobilization preparations. At the outbreak of war it transferred to the premises of the Military Academy, where it had the top floor at its disposal. Soon it became overcrowded, which is why crypto section IV moved to a property on Karlaplan 4, consisting of a building facing the street and a dilapidated house in the back garden. The conditions were rather primitive. The furnishing was of the utmost simplicity, consisting of folding tables and simple wooden chairs. However, it was here the crypto department was going to perform great achievements.
Photo 1 - Dilapidated house in the back garden on Karlaplan 4.