TheB-Dienst, created in the early 1930s, had broken the most widely used British naval code by 1935. When war came in 1939, B-Dienst specialists had broken enough British naval codes that the Germans knew the positions of all British warships. They had further success in the early stages of the war as the British were slow to change their codes. The B-Dienst could regularly read the Broadcast to Allied Merchant Ships (BAMS) code, which proved valuable for U-boat warfare in the early phases of the Battle of the Atlantic. In February 1942, B-Dienst broke the code used for communication with many of the Atlantic convoys.[4]
Before the US entered the war at the end of 1941, B-Dienst could also read several American codes. This changed after April 1942, when the US Navy changed their code systems, but earlier, the ability to read American message traffic contributed to the success of Operation Paukenschlag (Operation Drumbeat), the destructive U-boat attacks off the American East Coast in early 1942.
In 1941, the US Navy refused, for security reasons, to equip the British Navy with their ECM Mark 1 encryption devices, so the British Admiralty introduced "Naval Cypher No. 3" for Allied radio communication and convoy coordination in the Atlantic. The B-Dienst concentrated on deciphering the new code, in September 1942 and from December 1942 to May 1943, 80 percent of the intercepted radio messages were read but only 10 percent were decrypted in time to take action.[5]
The British Naval Cypher No. 5 is also known to have been broken by the B-Dienst, as were various low-grade British Naval and Air codes, including COFOX, MEDOX, FOXO, LOXO, SYKO, Air Force code and Aircraft Movement code. The US "Hagelin" M-209 field cipher machine and the French "Anglp"[clarification needed] code were also often read.
Apart from the notable successes of the German navy's decryption services, there were also some useful results from other institutions. For example, the Reichspost was able to descramble scrambled voice transmission of transatlantic radiotelephone conversations between the USA and Great Britain. For this purpose, an interception and descrambling facility was built in Noordwijk, near the Hague in occupied Holland. From 1940, the Mail Service's descrambling specialists intercepted and understood classified telephone conversation between President Roosevelt and the British Prime Minister Winston Churchill.[6]
The scrambler worked by voice inversion around a chosen frequency, so that the high frequencies become low and vice versa. It was impossible for a casual listener to break. However the Germans, by recording the telephone message on a BASF tape recorder, could quickly identify the scrambling method by playing the tape a few times through the few possible combinations of coding, to unscramble it.[7]
In 1943 the facility relocated to a purpose built bunker facility in Valkenswaard, south of Eindhoven to avoid a potential commando raid on the northern coast. Valkenswaard remained operational until August 1944 when the facility had to relocate to Germany to avoid the advancing British.[8] The most important intercept was a conversation discussing on 29 July the pending Italian surrender, weeks before the event took place on 3 September 1943, giving the Germans time to plan the occupation of Italy and disarming of Italian soldiers. The interception potential thereafter decreased, as did the number of phone calls intercepted.[9]
Another success was the OKW/Chi 1941 cryptanalysis of the "Black" code used by US diplomats. Due to this, a huge interception facility in Lauf (Bavaria) could decrypt communication between US diplomats and Washington DC. The specialists in Lauf concentrated on messages from Bonner Fellers relating to the North African Campaign, so they could pass information to Feldmarschall Erwin Rommel about Allied plans and operations. The Germans also received the "Black" code from the Italians; Italian spies had photographed the code tables in the US embassy in Rome in September 1941. While the Germans appreciated the gift from their ally, they did not explain that they were already able to read "Black" code messages.
In general, however, German performance in code breaking was weak due to the fragmentation of responsibility and specialized personnel.[citation needed] The Navy's B-Dienst was an exception to the rule, although its successes largely ended when the Allies began using more sophisticated encryption methods by 1943.
Appeal by defendant from a judgment for plaintiffs in an action to recover damages for the breach of an oral agreement granting defendant the [82 Cal. App. 2d 800] right to the exclusive use of the title, "Queen of the Flat Tops," for all purposes except the right of plaintiffs to continue to use the title in connection with the publication of a book.
Stanley Johnston, referred to as the "author," was on the aircraft carrier Lexington in the battle of the Coral Sea in May, 1942. Shortly thereafter he wrote a book entitled, "Queen of the Flat Tops," subtitled, "The U.S.S. Lexington And The Coral Sea Battle." The book was published and copyrighted in the United States in 1942 by E. P. Dutton & Company, Incorporated, referred to as "Dutton." It was one of the first books published to treat in detail of the activities of an aircraft carrier and its crew in combat. The book is nonfictional. It relates historical facts, warfare in the Pacific. It does not contain any fictional character or characterization as such, or any plot or theme. The author and Dutton at all times have been the owners of the book referred to in the record as the "literary property," and of the copyright. The book became widely known as "Queen of the Flat Tops." It attained considerable popularity which endowed the title, "Queen of the Flat Tops," with considerable value. Up to April 14, 1944, Dutton had sold 170,578 copies of the book throughout the world and had expended the sum of $14,669.71 in advertising and publicizing the book. A substantial number of copies of the book were sold in California. About October, 1942, the author and Dutton employed Myron Selznick Agency, referred to as "Selznick," to vend motion picture rights in the book. Hugh King, acting as "motion picture literary agent" for Selznick, endeavored to effect a sale, contacting all motion picture companies. King was in exclusive charge of the efforts to sell. Early in 1944, appellant was engaged in the production of a motion picture centered about the operations of an aircraft carrier. The picture, like the book, related to historical facts, warfare in the Pacific. In March or April, 1944, Zanuck, executive vice-president of appellant in charge of production, empowered to make contracts in its behalf, authorized Julian Johnson, appellant's story editor, to purchase the right to the title, "Queen of the Flat Tops." Johnson contacted King, and on behalf of appellant offered $2,500 for the use of the title alone, telling King that appellant was only interested in buying use of the title. This offer was rejected [82 Cal. App. 2d 801] by King. After some negotiation, the amount of the offer increasing each time, Johnson, upon authorization of Zanuck, offered King $20,000 for use of the title alone. King told Johnson that that was a fair price and that he would recommend to his principals, respondents, that they accept the offer. In his negotiations with King, Johnson used "the term 'all rights' and I meant all rights universally in the various countries." King did not, at that time, have any authority from his principals to accept an offer. It may be inferred from the evidence that, between the $2,500 offer and that of $20,000, Johnson was in constant contact with Zanuck with respect to the amount to be offered. On April 11, 1944, King telegraphed Dutton to the effect that appellant had offered $20,000 for use of the title alone, the material in the book to remain the author's property. On April 12, Dutton telegraphed King to the effect that it would check with the author immediately regarding the offer. On April 13, the author wrote King to the effect that Dutton and he had agreed that the price was acceptable and authorized King to accept the offer. The letter stated that Dutton was contacting King separately. On April 14, the author telegraphed King to the effect that he had spoken with Dutton and that they were in agreement to sell the title for $20,000. Immediately upon receipt of this telegram and on April 14, 1944, King telephoned Johnson, at appellant's studio, and told him that the author and Dutton accepted the offer. Johnson replied, "Thank God, it's over." King then dictated an office memorandum, "the blue memo, which meant the closing of the deal." The same day King went to Johnson's office, at appellant's studio, and verbally confirmed his telephone conversation, thanked Johnson for the deal, each party telling the other that he had made a good deal at a fair price, Johnson asking King in whose name the contract would be drawn. At that conversation King said, "You bought the title only; why don't you buy the whole book and buy the material too?" Johnson replied that their only interest was in the title and "that they didn't want the material." Johnson testified that at that time he regarded the deal "as a good deal for the company and for the author and publisher," and that the title "had a distinct value because Stanley Johnston had written a book giving the saga or story of [82 Cal. App. 2d 802] the 'Lexington.' " On the same day, April 14, Johnson signed and sent to Schreiber, an officer of appellant authorized to make contracts in its behalf, a writing, reading:
Through the Myron Selznick Agency (Hugh King representing) we have just purchased all rights to the title of this book. Price, $20,000, which was the figure of our offer--as we discussed the other day.
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