REF ID A2436259 Declassified and approved for release by NSA on 07-22 2014 pursuant to E O 13s2 e REF ID A2436259 ' 'UP SECRE'I' REPO' RT oF VISIT 1Q CRYPTO A G HAGELIN BY WILLIAM F FRIEDMAlif SPECIAL ASSISTANT TO THE DIRECTOR NATIONAL SECURITY AGENCY 21 - 28 FEBRUARY 1955 ---------- ------- I - - 1 INTRO bUCTIOI In accordance with Letter Orders 273 dated 27 January 1955 as modified by L 0 273-A dated February 1955 I left Washington via MATS at 1500 hour on 18 'February 1955 arrived at Orly iField Pe ris at 1430 hours on 19 February o o o f ' I ' - - -- I -' I o 4 I arid at Zug Switzerland at 1830 the same day o I o a sp th - e t ''I o I few da s I Boris Hagelin Junior for the purpose of learning the status of their new deyelop' ments in crypto-apparatus and of makifie an approach and a proposal to Mr Hagelin 1S as was recently authorized by USCIB and concurred in by LSIB Upon completion of that part of rrry mission I left Zug at 1400 hours on ' 28 February and proceeded by atrb-eme afle to Zttr-3 ch wfl eie I l3e-a d ee a plet ille to London arriving 2_ H1 i Jendo-l't' at 1845 that evening f the s 3 es ah3 i nMP schedll1 ed plan'i ed The following report is based upon notes made of the subste nce of several talks with the Hagel ns at times in separate meetings with each of them and at other times in meetings with both of them 3 The notes regarding the status of new developments and plans for the future should be of interest Included among these notes is information of considerable importance in connection with the problem of French COMSEC 1 The approach and proposal which is referred to in paragraph 1 above and which I '-' as R6D$c 1 B o authorizedA u ni tk e to Ur WW 1 cw-- t-'i o o -sc I -S-1- poncurred in b oil ii S@ 5 Hageli a usCIB l i h f d atea dated was made to JS 1 J ec I Ia geHn- during the evening of 26 February and the discussions thereon were con- tinued with Mr Hagelin Junior on 27 February at the request of Mr Hagelin Senior 1 REF ID A2436259 ' 'OP SBSHEIP The approach was quite successful for the USCIB proposal was accepted with alacrity and without any modification PL 86-36 50 USC 3605 EO 3 3 h 2 2 REF ID A2436259 II 1 STATUS OF NEW EVELOPMENTS Sales and Prospects of Sales of C-Line of Mac nes -- The following information under this heading was given mostly by Hagelin Jr who either had the data in memory or had quick access to the records pertaining thereto a The present manufacturing capacity of the Hagelin plant in Stockhol for the ma ufacture of the C-line of machines C-52 CX-52 etc is 60 to 80 machines per month the goal is to increase this to 100 per month Stockholm plant is closed dovm ee fl rPai' 3 $1l 12 i _ and the new pla nt in Zug is well establishedJt No manufacturing quotas were as soon as prac icable the mentioned with regard to other machine the latter are still in the development prototype or pre-production stage b Decision has been made to close down the plant in Stockholm and to move such of its manufacturing tools and equipment as is deemed advisable or necessary to Zug where two new buildings are to be prepared for production of tP e new lines of machines which is to be modified to One of these buildings is an existing structure suit the need for addifional spac'4 its top floor is to be made into an apartment for the chief engineer Mr s ur - y erg presently in Stockholm but to move to Zug as soon as the apartment is com 'pleted The other building is to be newly constructed and the excavation therefor has been completed its top floor is to be an a partment for Boris He gelin Junior The three buildings fvo above-mentioned plus the present o research and development building are adjacent to the home of Boris Hagelin 1 Senior so thatACrypto A G will be a gompact homogeneous set of units I was told by Hagelin Junior that his father expects to retire from ctive dir action of Crypto A G in two years age 65 although undoubtedly he will continue to have a voice or hand in direction thereafter 3 From one comment REF ID A2436259 OP 9EJ9HE'l' made by Hagelin Senior I gathered the unmistakable impression that lfa gel n io plans to let Hagelin Junior take over the Orypto business and direct its affairs when e retires g l The plant in Stockholm besides being now engaged in manu facturing the new C-52 and CX-52 machineR is also to fill an l rder for 500 __ _ f L to 1 000 ma chines of the old C-446 type See paragraph below In or1er to execute this order some or most of the tools for making the C-446 wili- ve l 'WW to be r ehabilitated or else replace I asked Hagelin Senior if he need ed 1 any financial help in this regard his answer was in the negative sinae s he said he estimated the cost of rehabtlitating the old tool or mak ing new k ones to be only about $10 000 However he wet 3 d like to have i iom e help in - t building up his new plant in Zug for e-tl erw -s he wea J t have to s 11 some of his liquid capital assets stocks and bonds matter was not referred to again I wish o I made no cornrq t ind the point out 1 ' t ' ver that the rehabilitation of the C-446 tools offers certain potential lfKUSA for once these tool dvantagea have been rehabilitated Ha gelin will e to able as tie himself mei- tioned to me to make more C-446's tlia n 3 re e- ded by the _ -- W- - Bttobet In other wo s he was hinting to me that this rehabili t t' on would make it possible for him t o supply certain customers with a model almost like the M-209 his model is of c0urse easier to solve than the new models and the manufacture of C-446's would eliminate the proplems involved in either the US or UK supplying Hagelin with M-209's for this purpose- ' 2 The present space occupied by the Hagelin plant in Stockholm u ge will be turned over to the Johansen ONJ to Company together with all of the c-446 tools j_igs_ and dies these be held by Johansen on loan until o S H 1--o lJl O C -ti- U s rL R o 1 6 the G 44 4 er- oto -oe ma nufa c t ared -ha -ve been completed These too1 11 4 REF ID A2436259 OP SESRB@ 'nn IArVU Athen be shipped to Zug a u-J _ The Johansen firm is to employ all or most of the Hagelin workers in Stockholm except Chief Engineer Nyberg mentioned above _ 1 It may be well at this point to set forth specifically the different models or machines w ioh are comprised in the C-line using desig- nators which the Hagelins and I agreed would be suitable The C-line machines are readily classifiable according to Hagel in Senior into two ma in classesEO 3 3 h 2 PL 86-36 50 USC 3605 In this class the machines are not to be equi ped for operation with a one-time tape b'T'T b Class 2 -- Where the stepping is irregular and where OTT readers are provided as well as equipment for producing the tapes 2 Based upon in Class there are the following models xoJL i a C 52a cs ge which - The mod a with f- n ard A s l ars for the 0 1 ' l o-r -- e e ti4 - feP-ea eQ of the key - O v11 bv wheel f 5 steps per'-bperation b CX 52b The ta the which of tlie key whe s w tenl aH OMRl - a w i j_ number of steps but the number may be any one from 1 to 32 5 REF ID A2436259 'f'OP O El9 H H1 c CX-52c The model which is compatible with the old types of C machines the M-209 the C-446 or a certain version of the C-52 machine d CX-52ak -1 feature A CX-52a with the Huettenhain 11 komplimentary I e CX-52bk or CX-52ck These are likewise the same as CX-52b and CX-52c but with the complimentary feature - - CX-52 10 and CX 52 30 These are CX-52's for 10-character ci hering digits for enciphering numerical code oups or for 30-character ciphering 30-element alphabet _ 1 nes can be of the _ E_ or GBP type and can also be provided with the complimentary feature Exple CX-52 10 3 In Class a C-52 1 there are the following models The model which is compatible with M-209 C-446 but also can be made to function with interchangeable key wheels and with key wheels of larger numbers of elements than M-209 or C-446 so tk of key wheels can comprise more thanJ 6 wheels t a A8 2J i1' M-209 or C-446 set Also the C-52 can be provided with a larger number of slide bars than has the M-209 or c-446 b I presume that there can be a C-52 10 or C-52 30 but these were not mentioned and at the moment I do not recall asking whether there could be a C-52 or C-52b or C-52c or C-52ak etc I could no doubt ascertain this point easily enough by asking either of the Hagelins - e 1 However there is a new C-52 machine which is of consid erable interest and which Hagelin Junior mentioned with much enthusiasm This model we agreed to call the C-52Y 2 In - he C-52Y the print wheel may be advanced according to _ _ # _ - 6 REF ID A2436259 combinations of one to 4 different amounts and each of the key wheels may also be advanced according to combinations of one to 4 different amounts Perhaps the best way to explain this model will do is first t011 'l e tAi - W wha what the M-209 or the C-446 or the ordinary c-52 does ' 'hl tt Inl he a te i i if there are say 4 J ugs presented to a key wheel and the latter is in active position the print wheel advances 4 steps but in the C-52Y this same condition can bring about 4 kinds or amounts of stepping of the print wheel o 1 3 or 4 steps can be made depending upon the particular slide Or if 7 lugs are presented to a key bar and lug arrangements in the cage wheel and the latter is in active posH ion the print wheel can advance - - Q O Yc e-J a aM - f O 3 4 or 7 steps or O 2 5 7 st epsJ or O 1 6 7 steps the total amount is the sum of the 4 parts Now for the stepping i Q So much for the advance of the print wheel of the key wheels w V advan e one and only one step In the M-209 and the C-446 these always In the C-52Y Athe ke heels are advanced according to the same quadripartite combin tion rule as that pplicable the print wheel depending upon the slide bar and lug arrangement to If 7 is the maximum amount f n certRin key wheel thelatter can advance O 3 4 1 - j 00 o 2-- S t-1 ri Cl or 7 stepst _ e l d - E t he different key _ wheels may receiye different sets of quadripartite i w ea vv not exceed 32 December 1954 combin tion steppings but This type of action which was conceived only recently can be br mght about in the C-52 merely by placing standard B slide bars -in the cage in a certain sequence arid - with- a oer tain kind of 3 Hagelin Junior was so enthusiastic about this new model that within two or three minutes immediately following our i$- tingShe announced that they had decided to stop making the CX model and are switching 7 REF ID A2436259 over to a variation of the C-52 which he 11 s id is simpler in mechanical effectu- ation and more readily adaptable to the crypto-control mechanism for the HX electrical-rotor I wa s of course rather star by this statement and later queried Hagelin Senior ab- iut it saying that I was astonished at the decision to switch to the C-52Y before any security evalu- ation at all had been made of J IIo overflowing with enthusiasm We will hold up making that model if you want us to hold up on it 11 Hagelin Senior said Oh Bo is young and I told him that I thought this m j ght be advisable and that in any case we would want one of these models just as soon as possible Hagelin Senior said that it was easy to convert a C-52 to a C-52Y and that we could do it with the one he is sending us from Stockholm at my request by air all we would need w uld be the special instructions for the slide bar and lug arrangements and he is to provide these instructions soon 4 A few minutes later Hagelin Senior read me a paragraph from a recent letter from the Italian defense department in l'lhich it was stated O 'M tl O that they were withholding an order for new n machines until t was known had been decided wit ATO co cations Hagel in Senior wanted to know whether I thought there was a possibility that a Hagelin machine might be adopted for 3rd level NATO communications I indicated that this was certainly conceivable and that that was why I was so interested in the proposed shift from CX-52 to C-52Y manufacturing for I pointed out to him that NATO COMSEC authorities would have to be sure of the security of the new model and that detailed studies would certainly have to be made of the C-52Y before it could be given serious consideration for possible NATO usage It was then that Hagelin Senior said that he would hold up on the C-52Y if we wanted him to do so 8 REF ID A2436259 - f 10 BC-52 prices ' Following is information regarding sales of machines of the C-line 1 Eg ypt mach s now negotiating for 50 C-52 machines They are waiting until an agreement can be reached as to N cision has yet been reachedleither as are to have Roman or Arabic characters had been any trouble with CX model They also want the tians to whether their machines I asked Hagelin Senior whether there because they weren't being given the Well the only thing they can have now is the C-52 We just stopped talking about the CX we talked only about the C-52 and they were satisfied 2 Jordan 20 are BC-52's agent there has bought about 30 machin si 10 are C-52's and tl Hagelin is going to make delivery soon Ah e-hae a very good liaga1iJ l- hese rte-- machines are for the Arab League and the Foreign Office It is the British who are behind this purchase -- who are paying The Jordan Chief Signal Officer is a Britisher they i s 3 Iran -- The Hagelins have no agent in that country There seems to be no interest there in cryptomachines according to Hagelin S enior 4 Iraq -- is negotiating for an order of about 50 to 200 C-52's with Arabic characters They have a more than lukev1arm interest 5 Syria -- has recently purchased 50 C-36 sic machines I asked Hagelin Senior where in the world he found so many of that old model We- had some down in the basementA 6 Saudi Arabia -- only some correspondence exchanged recently Hagelin has no agent nearby 7 India -- was shown only the C-52 model quite certain that the Indians will order some of these The Hagelins felt ma hines and they are also definitely interested in the BC-52 oo lHagelin Junior on his recent trip it will be recalled did not demonstrate the CX-52 to any of the Arab countries nor to India The Indian Army is interested in these machines too to have a lot of BC-52's for test purposes They want Don't you think that queer I said REF ID A2436259 9 Belgium an he Armed Forces ave ordered more than 200 CX-52's about 160 have already been delivered typewheels These are CX-52 1 s with variable The Belgian Foreign Office have C-446 machines and will stick to these but have bought 100 variable typewheels 1 France -- The French have had the CX-52 two years already for study 11 The Foreign Office has placed an order for abcout 100 machines 80 CX-52_ 20 CX-52 10 machine Hagelin said iThe Armed Forces are much more interested in the HX I will have more to say about France later in this report J' 11 Portugal bought five CX-52a's 12 Italy will NATO do ' no action yet They are 'bellyaching' about 'what Hagelin Senior stated that endorsement of the CX-52 would serve as a real stimulus to their placing an orier 13 Greece and Turkey -- have been given literature and are interested Hagelin Ju nior is supposed to have gone there long ago for a selling trip but has postponed the journey - no date mentioned 14 Holland - The situation with regard to the Dutch is inter- esting in view of the Petersen Oas Tliey are sticking to the C-446 in the main this is certainly true as regards the Foreign Office Referring to the renewed manufacture of the old C-446 type of machine mentioned in paragraph t _ above these are for the Dutch Government for the Dutch Foreign Office but a M ost of these machines are good many are also intended for the Dutch Army-r According to Hagelin Senior the Dutch Foreign Office finds the C-446 quite sa isfactory because as they say a they are well organized now for te _ oet using that model and b the new models are much more expensive Hagelin Senior commented that Dutch thrift resents having to pay more than they think 10 REF ID A2436259 Jj'1 - 'l'O P SEClmT Howaver though the Dutch Foreign Office likes the C-446 it wants a certain number of their new C-446's to be provided with means using one- time-tape control of the stepping mechanism instead of pin-wheel control 12 The development of the tape-control mechanism has given Hagelin some trouble but the problem was recently solved 4 much interested in the new CX-52 model and wants to obtain some machines of 15 United Kingdom - The British bought two CX-52 1 s hey paid' i J - for them moreover in Free Swiss Francs and they didn't relish this 16 Germany and Allstria Dr 1 - ci Hell who by contract supplies the West Germans and West Allstrian ma rl et for C-line machines has assembled ten CX-52' s for the Bonn Government which is approved by Huettenhain These are CX-52 tY Pe - o e - J- ' - Hagelin Senior stated that the Dutch Army is that type as well as a number of BCX-52's f only model ihe personal relations between Hell and fi k '5 C Hagelin are still very cordial and their contr ctual relations are the same as related in m y previous report 17 Sweden -- is goin6 to replace all its C-446 machines with CX-52's in a long-term replacement program with a more or less fixed amount of money available each year for _this purpose 18 Spain -- has shovm a great interest in C-52 but has pl ced no order as yet They are also interested in other new Hagelin products 19 - has recently placed an order for two CX-52's These are soon to be delivered 20 Indonesia -- Vie had quite a messy business correspondence back and forth but now they have finally decided to place an order for 20 or 30 C-52's The order is not firm as yet - they are waiting to get the aI_ pro priation and also an import permit 11 REF ID A2436259 21 Poland and H - Chief engineer Nyberg in Stockholm recently sold 2 C-446 machines to each of these two governments-without first for many machines wa o fl en said that they had indicated requirementi EO 3 3 h 2 PL 86-36 50 USC 3605 I asked what he would do if they really came through with consul ting Hagelin Senio s J firm orders in quantity I 22 Jugoslavia interested in C-line Hagelin Senior said ll 1 that he 'takes for granted that this country falls in the same category as the o liher fellows of the Middle East 11 moment as Satellites of the Soviets 11 I said Let 1 s regard them for the Hagelin Senior 11 That 1 s O K with me if you want it thHt way 11 23 Central America __machines Costa Rica recently boug t at one time but this has died down There 1 s not_ much interest there in our two C-446's showed some interest We have in Mexico a good agent with Norwegian background and he wants to sell some machines to the Mexicans Venezuela is going to buy some machines ' 24 Brazil -- The Brazilian is interested to the extent of some 500 or more machines but Hagelin Senior di n't through with as -large an order as this in one lump think they would come The Brazilian bought 60'CX-52's these to be compatible with their C-446's When they will put in an order for more machines these will be of the CX-52 type o 12 has REF ID A2436259 qigp S S9lfl3 - 25 Argentine -- The bought 13 CX-52 1 s but these are to be compatible with the c-446 26 Qh ile -- Not greatly interested but will buy some 27 -- Interested to the extent of about 200 CX-52's 28 Parap uay -- no ipterest 29 Uruguay -- Bought five CX-52 1 s and two BCX-52 1 s That's EO 3 3 h 2 PL86-36 50 USC 3605 30 Colombia -- has ordered about 100 CX-52's and about 40 BCX-52's their first experience with cryptomachines 11 a Hagelin Senior told me that he was still worried as to what the U S was going to do in regard to distributing their new machine to NATO countries I told him I thought he could cease worrying for the present at any rate because the intention is now to provide these machin s to NATO countries only for NATO international communications - not for national He commented that some nations would probably have too much of a nationalistic spirit to permit them to accept machines from the U S or from any other country France for instance wanted to use only such machines as were invented or made u i France cf - 3 oL_ - ' wc-a uu t Y it i - REF ID A2436259 k o I said to Hagelin Senior that Boris Junior had told me that his father had again been to Paris recently and that I imagined connection with the modification to the B-211 t was in When he nodded affiI'IllC' tively I said that I was glad to learn that he was trying to help the French for they were our allies in NATO I asked him if he could give any reason for the rec- ently heightened interest in crypto matters on the part of France He said M o A -1 4 0 4 Fc ' I he thought Viala's coming into the ae thatA picture t 9a there is another unrelated Viala in the crypto pusiness for the French- Department of the Interior wanted to replace the old-fashioned methods and r 'O codebooks with more up-to-date things said But he added tha- eo-fa r ae Viala is a forceful character he Vial te-ee M his activities in this regard to the Foreign Office of course confines He went on to say that the Commision de Chiffre under President Ollier is now very active a member of the Commisidn also very active representing the Presidence de Cons lers is Ollier is a man 40 to 45 years of age rather cold but Hagelin sized him up as being extremely intelligent and a acter Capt Mueller Hagelin said he could tell me about French plans for improvement in crypto affairs very char- some very important For one thing for ex mple the French Government is going to establish a plant in Paris but as a private enterprise There is plenty of money behind the people who are prepared to do that The Government will buy the tools since they want to be sure to - k - -eet i have allA h t e necessary for rila nufacturine their machines but the plant itself will be under private owriership This ownership will probably be that of a subsidary of an already well-established firm called the Societel El ectronique Automatisme SEA which though a relatively new firm is a very imp'ortant concern malcing electronic computers Raymond a young man but supposed to e Its president is M first in France in technical know-how 14 REF ID A2436259 as regards such machines The people behind SEA have plenty of money - they are considerably higher up in Government affairs than people like Colonel Arnaud who is constantly being needled by Ollier to get busy on this crypto manufacturing business The plant will start ith making HX electric rotor macrhines possibly also CX machines c 1 The B-211 modification designed and developed by the _ Hagelins has turned out to be quite successful according to Hagelin Senior What I saw of this development in Paris last September was merely a rough design they had worked it out in practice so fh t it can easily be added to the existing B-211 his gent in Paris M Rene de Uha1 JY will probably do -l-o -e _ the work on the machines when the latter are sentA forfoervicing ia ba 4bce -U The Hagelin firm had an order for 250 modification kits for the French Army and 200 will probably be ordered by the French Air Force me that with this im rovement Capt Mueller told the modified B-211 will be more secure than the original British Type t' meaning Hagelin said the type with the simple reflector - not the one with the straight-through circuiting and reversing switch H i g 'llin commented that the French had something on their B-211 1 s which was not put on by him and hence he didn't know what it was i The parts for the modification kit will be made in Zug either by Crypto A G itself or by a sub-contractor in Zug J 2 I asked Hagelin Senior whether this modification kit for the B-211 would be available to other ovmers of that machine There aren't any others now Oh but we have some I said to v1hich he made the laconic comment Yes two I said Yes and you will recall also that I have one personally one you presented to me for my collection - the one formerly ovmed by Ivor Krueger Then he went on to say that he would do the conversion in Zug on our two or three m - chines at such time as would be convenient 14 REF ID A243'6259 3 a contract Relations with o S f mens and Halske are now formalized in a signed SiemenB agreed to stay out of the Cryptomachine manufacturing business and confine itself to the teleprinter manufacturing business Hagelin agTeed to stay out of the teleprinter manufacturing business and confine himself to the cryptomachine manufacturing business In case in the future Siemens wished to go into the cry1rtomachine manufacturing business they must give Hagelin notice thereof and for at least one and a half years after giving such notice they rnust stay out of such ma nufacturing b Siemens in Hagelin Junior showed me the last page of the contract with whi h the marketable areas for teleciphering ma chines were divided between Siemens and Hagelin as follows 2 Crypto A G Alo e France Italy Switzerland Sweden Norway Benelux 1 Siemiens alone West Q-ermany West Austria Jugoslavia Portugal Ireland Europe l All except Brazil USA and Canada America Brazil Egypt All excep t Eg- ypt - Africa All except India Asia Indonesia China --- All Australia 3 Siemens and Crypto A G together Denme rk Greece Spain Europe Indonesia -- Asia None America or Africa 15 S l India REF ID A2436259 'f OP SE9RM' 4 Areas not yet assigned or clearly agreed F inland Russia and all satellites East Germany China USA and Canada 4 Rather casually I asked Hagelin Senior but in the presence of Hagelin Junior why if they were moving the Stockholm plant to Zug they hadn't considered moving the whole business to the U S ask Bo about that 11 I said Why Bo He replied You'll have to Boris Junior answered somewhat quietly I suppose he means for me to carry on the business advantages of moving the business to the U S 11 What would be the I said 11 Well I thought you didn't like Switzerland at all and the same goes for Edith doesn't it We're both getting better adjusted to living in Switzerland And then soon when the Nybergs have settled down among us we'll have some agreeable company Hagelin Senior 11 I suppose the U S could and would bind me with restrictions so I couldn't be free to export where I please I said that I supposed that certain thines c- uld be done along that line - there were of course restrictions on sending instruments of war or material for war to countries behind the Iron Curtain But I added that I didn't think the U S would be tough or have a very rough policy nor did they I did not pursue this subject any further Later on Hagelin Junior's wife Edith confirmed that she was getting better adjusted It takes a couple of years you know I was so upset last year that my doctor sent me to a psychiatrist but after the one and only one visit I made up my mini I didn't need such help and would help myself out of the spell fihe did look much better than when I saw her last September_J 16 REF ID A2436259 - 5 a ' 11he new b se for the BC-line electrically operated keybo' l rd mB chines was shown me or CX-52 er ely It looked exti emely sim le and compact Arly C-52 be placed inside the frame and fastened do vn by two screws thus becoming a keyboard chine To adapt the base to take a C-446 or an M-209 requires some modification but Hagel in felt tha t this could be done though he questioned the practicability of doing it because the shaft on which the keywheel assembly and the print wheel is borne in these models is too short This new BC base would facilitate qperation by OTT and the sensing part of the mechanism for operating a C-52 or a CX-52 or eventually and possibly a C-446 or M-209 by means of OTT is now worked out so that the same mechanism ill do for all b This new base for the BC-line will cost about $800 When I commented that I thought that a pretty stiff price for what was shown me Hagelin Senior replied that he usually charged what the traffic would bear but at that price the cost of the b se plus the cost of the C or CX machine itself the total cost will still be less than that of' the old BC-446 hich wa s 8 ooo Swedish Kronor hereas the cost of the new base plus the C or CX comes to about 6 000 Kronor On a big order for BC machine he would of course make a price adjustment c The B bases are now being made in Stockholm about 25 will begin making them in about 10 months o-c e o-r PL 86-36 50 USC 3605 EO 3 3 h 2 17 Zug REF ID A2436259 6 One electronic OTT generator called the ZG machine Zufalls generator Random generator was designed Hagelin engineer Sturzinger i - It was just recently turned over to the French Fo'reign Office for study and assessment by the Commision de Chiffre were made by Hagelin tests for randomiity and produces one original and one copy This model uses a Cree4 perforator It is not equipped with marking apparatus which Hagelin Senior said is the heart of the job are going to work that out Weilbac eing The French He expects an order for several more of these OTT generators from the French Navy Captain No He also is making 3 or 4 for Denmark Danish much interested in this machine Belgium has also placed an order for one machine 7 a Crypto A G Zug has made parts for a first sPries of ten OTP producing machines CBI-series and one machine was assembled and operated for me during w y stay in Zug The machine is astonishingly small 1 cu ft but weighs I estimate about 50-60 lbs 0- -n size a out 7 to 8 lines per minute similar length lines and groups of digits It can also produce I have brought back with me a sample of each letter groups and figure groups for preliminary testing The machine easily makes one carbon popy and I imagine that it could make two carbon copiesJthough Hagelin Junior was dubious thereof b Of the 10 machines constituting this first series 7 are 3 already sold to countries as follows u s Italy Portugal Belgium France 1 each 3 18 6- -J It printsA of 8 roups of 5-letters but can be made to print 10 such groups per line Present operating speed 0 REF ID A2436259 Crypto A G hasn't tried to sell any more of these as yet Hagelin Junior mentioned that in his talks in India he learned that the Indians are now using IBM for making their OTP's but became much interested in the new Hagelin OTP machine A retired general officer Indian came recently to Zug for a look-see There is a possibility that U S will buy one or two more The 1st machine for the U S will be ready for delivery in 1 - 2 months c Hagelin Senior said that Dr Huettenhain had tes ted the end et eet product some months ago and stated that the letter Z was unbalanced compared to the rest of the letters Hagelin Senior said this had been correcte i to a large degree but in future models they were not going to combine letter-group production with figure-group production in the i same machine two separate machines would be offered and they would be faster simpler more random -A Qt r fi Hagelin Junior told me that they weren't going to make any profit on their first 10 machines and I imagine they would be glad to sell them all Senior asked me if U s could use more than one Hagelin I said we'd want to test the end product of our first one as soon as possible and that it might be that we would have use for several if they were really good Hagelin Senior then reminded me which reminder I didn't need that General Canine had once indicated we would buy at least a couple These machines are expensive about $5 000 but 1of course practically all the parts are hand-made However small countries would not need more than one or two such machines - and with communications of these countries are concerned Hagelin Junior said the Indian Signal Corps is also interested in the Hagelin teleciphering machines 19 EO 3 3 h 2 PL 86-36 50 USC 3605 REF ID A2436259 8 a The status of the HX development was discussed Some progress has been made in regard to the type of rotors that will be used Hagelin Junior talked about t eir using printed circuits a matter being investigated for them by an English firm the name of which was not mentioned nor did I ask for it The new machine is now definitely to have 10 rotors as mentioned in my last report and he showed Jne a prototype rotor with 32 contacts rotor was about inches in diameter the contacts of silver The I asked Hagelin Senior whether the HX-54 was to be a 26-ch racter machine and if so what he proposed to do about the 6 extra characters the course of m y previous visit This question was also asked in He told me that these 6 extras would be re-entered from the output side into the input side of the maza J f wondered whether I should ask him if he had put in for patent coverage on this idea but decided not to ask b The U S has one in secret status in the U S Patent Office J' Two prototypes of the HX-55 will be ready before June 1955 There will be three crypto-components for these that is there will be one spare crypto-component for test purposes o 2 I told Hagelin Junior that the sooner they could get us an HX-55 the sooner could an answer be given as to the security of the machine d - The Hagelins demonstrated a bench model of the slide bar and rotor d rive mechanism for the HX machine using the C-52Y principle component wa et in operation and quite rap d This However the unit used was the same 5-rotor assembly thet was in the HX-54 I saw on my visit last September not the new proposed 10-rotor assembly 9 - a Hagelin Senior has definitely given up the idea of having 11 a single package m- chine 11 that is one that can be used both for on-line 20 REF ID A2436259 teleciphering as well as for off-line literal operation in a single apparatus made up of' several components take much lo ger He gave up the idea because 1 it would to develop than he could afford at 'this juncture of his research and development and 2 the Siemens people didn't like the idea and I don't want to buck them They give us good technical advice and that's worth a lot to us Hence he is goine to have one off-line literal machine lk u J which might be the HX-55 or even HX-56 and on-line teleciphering ma chine - b The first model of his on-line machine TL-55 or 56 will employ merely the 5-unit code fBt rm addition -Vernam principle controlled by OTT - The second model TC-55 will also use U D-addition but this will be controlled by the same cryp tomechanism and principle as that to be incorporated in the C-52Y the third model still an on-line teleciphering machine TCX-55 will use the cryptoprinciples of the CX-52 ma chine and finally a fourth model TH-55 or 56 will use the HX cryptoprinciple 10 electrical rotors with 32 and 32 to 5 translators 5 to All of the latter three models of machines will also be operable by means of OTT Hagelin is trying to produce prototypes of the nevi teleciphering machines as soon as possible but so far hey have only sketches not even good drawings till they hope to have prototypes this year c Hagelin Senior told me that he was going to try to eliminate rotors from the TH-56 and use instead relays relays he could acc9mplish wh t t P e --o-r- J J t tors No more of the present do He thought that with about 400 'k t' A l e eL l 0-52' s or TL-52' s will be produced or the former a total of 20 was to be ma de and these have been completed of the A latter a total of 50 was to be made only a few have been completed These ma chines are for the French F O Army and Navy - no Air Force because they 21 REF ID A2436259 are tied up with SAGEM which has recently improved its model but still uses the cryptoprinciples employed by Hagelin in the prototype he buil1 for SAGEM v s The has placed an order for one TC-52 and I think for one TL-52 e Hagelin Senior stated that Egypt and India are interested in having teleciphering machines controlled by the C-52 principle and these e- L would be provided with but one tape reader not two so that machine could not be operated by OTT He asked me if I thought it would be O K for him to provide them with machines of this type I told him I thought this might be satisfactory 10 a The new pocket cipher device CD appears to be well under way and the Hagelins are enthusiastic about it This device will use six notched disks made of plastic the customer breaks of iilre pieces to fuakeCihe notches will make the disks equivalent to the pin wheels of the C-line machines In fact the CD will have the C-type cryptoprinciple but it can also be given the CX-52 cryptoprinciple Since the CD will not have lugs on slide bars there can be no overlapping but the CD could easily have seven or eight disks instead of only six or it could even be operated by OTT One keying mechanism has already been buil at Stockholm it is the size of the i' i J transistorized radio set I b' ought the U S I gathered that the CD will produce a printed record the print unit is really very simple but my notes also say that 11 the CD will have C-type motion controlling two con- centric alphabet rings 11 b The history of this development may be of interest Part of it was related to me privately by Hagelin Junior with the request I say nothing about it to his father According to Hagelin Junior many of their customers 1 for several years inihe past have 1 e 22 Hagelin firm with the request REF ID A2436259 r pgp 8B9m l'P that they be provided with a pocket-size cryptodevice and in 1951 J oJ_ w 4 S proposed he H a mechanism for such a device - the same or nearly the same as that incorporated in the present CD prototype But Hagelin Senior was not interested in such a project and rejected Hagelin Junior's ideas - until an ex-Hagelin employee one VIGO LINDSTEil came out recently with a pocket-size TRi F 1'12 A l device jfote This is theJ '-evice the Swedish Government turned over to the Norwegian Government which turned it over to NATO COMSEC authorities it is U v f now being given security st die How the Hagelins learned about the Lindstein device is not known to me it is held in a secret status y the Swedish Government and has been from the beginning handled as SECRET in th4- u v't A NATOA so far as I am aware f When Hagelin Senior learned of the Lindstein device he then became much interes ed in such a project and somehoo r or other consider d t ideas his own When Hagelin Junior le rned that Hagelin Senior had decided definitely to turn over the Sundsor brick manufacturing works to his other son Gunnar Hagelin Junior said to his father that in view of what he was doing for Gunnar he should at least turn over wha-i ' royalties there would be on the new CD to him Junior whereupon his father went into o Q Q _ a rage anparently claiming credit for the CD himself It's not nice of me to say this much about the matter but that's the way it was CD -o I asked Hagelin Senior what usages he could foresee for the He felt that ecret agents small military units or patrols could find good use for it 11 a In connection with the 5 to 32 and 32 to 5 translator principle o - used in the proposed fourth model of the on-line teleciphering machine THX-55 or 56 a principle which incidentally the 23 u s uses in one of its own new REF ID A2436259 'f OP OEl9RB ' developments Hagelin Senior stated that he w _ s afraid he was going to have some difficulties with the Lorenz people in Germany That firm has a German patent elsewhere too I think on the means for accomplishing or using that principle applic tion for patent having been entered in 1943 and just recently granted January l- 55 Hagelin Senior showed me the German patent and he is to send me the numbers of the whole series w ich Lorenz has in Germany and in other countries on this tra nslator mechanism or on other items of interest L_Naturally I did not say anything to Hagelin about our use of the translator principle but I m beginning to wonder whether the U S may not have similar trouble with Lorenz -1955 b granted in item One Lorenz patent also entered in application form in 1943 and was however killed when Hagelin showed prior use of the I am to get that patent too 12 a With reference to what the Bonn Government may be doing now with the Huettenhain cro'iVd Hagelin Senior said he W'J S would be a small machines ma de by Dr Hell lf That would of course be our own machine the cx-52bk 11 told that for Bonn there But there would also be a large machine made not by us nor by Siemens but probably I think by Telefon und Normalzeit T N Co o 11 class j fied Hagelin said that he did not know any details for those were I asked Couldn't it be Lorenz rather than T N really know 11 he replied ''It could well be I don't I suppose Lorenz did some work on cryptomachines fo - the Germans during the war just as did the firm WANDERER in what is r ow East Germany They stole my cipher pinwheel and slide-bar-with lugs ideas and constructed a machine in 1944 you lmow 11 i-he SG-41 Hagelin has one of these in his office 24 REF ID A2436259 b In a later talk with Hagelin Junior he asked me whether with West Germany now or soon to be free they will establish laws such as in Sweden prohibiting exporting certain kinds of equipment to c rtain countries I told him I supposed they might well do something along those lines He asked me to send him if possible what information could be made available reference to such prohibitions It seems that the Hagelins are worried about competition they might get in future from such firms as T N or the one that made Enigmas if est Germany would place a ban on exporting cipher ma chines the Hagelins would feel much more secure against the possibility that such firms would peddle their machines abroad and give us serious competition I said I'd see what literature or q ocurn ents were available to send them for information on exporting bans 25 REF ID A2436259 III THE APPROACH TO HAGELIN AS AUTHORIZED IN USCIB 29 14 29 OF 27 DECEMBER 1954 13 a Having been with the Hagelins for several days in a most amicable relationship on the evening of 25 February 1955 after dinner I felt the time had come and was prop tious to broach to Hagelin Senior the subject authorized in USCIB 29 14 29 nd of course the real object of my visit to Zu b I began by telling him of l S appreciation of his patience in maintaining the status quo in regard to the so-called gentlemen's understanding reached in January 1954 that understanding was to run only to 1 July 1954 but he had been considerate enough to extend the whole understandi g year b' half of my Governmen ished to l U-lt oa- Secondly I told himf we B l'l' i 'eeia hi for more than a thank him foF that disinclination to be pa id money for not doing something this was in line with his ideas of proper conduct and we understood his feelings in this reg rd and his reluctance to enter into any relationship in which such a feature would play a prominent part Thirdly I said we had been s ruggling to work out some kind of a proposal which would be satisfactory to us and perhaps acceptable to him and we had finally hit upon one which was simple and which I had been authorized to place before him if he was willing to entertain a proposal at this time c Hagelin Senior responded by thanking me for what I had said about our appreciation and me to know how un erstanding of his position f is wife are Moreover he wanted for what we had done and were continuing to do for various members of his family He hoped that everything would turn out well with regard to his son-in-law Conradi and his retention u A on active duty status as a result of our intervention - 26 the young man keeps REF ID A2436259 EO 3 3 h 2 PL 86-36 50 USC 3605 assuring me that he is working like hell 11 He and hi$ wife appreciated very much what we had done for her cousin Miss Barth in making a ple ce for her in our organization of a proposal Finally he said he would be glad to hear what sort l had now to place before him him that he need not give his answer there and then but could take his time to think it over if he wished e Hagelin Senior thanked me but said he did not need time to think the matter over he was prepared to make an answer our proposal cations then and there to he accepted it without any reser_vations or desire for modifi- But he would like to have some more details he wanted to know I told him I was not authorized nor able to give him more information on this score a t this time but I had no doubt that such details would be forthcoming at the proper time f I thanked Hagelin for his ready acceptance of our proposal and said that of course this mat ter is strictly secret between the U S and 6 o Se him but that if he wanted me toAI could perhaps give a precis of the proposal o to him or to Boris Junior in writing He thanked me for this gesture but said he'd prefer not to have anything like that in writing would appreciate it if I would convey the proposal to However he Boris Junior myself This I did the following day but by that time Hagelin Senior already had a 27 REF ID A2436259 chance to tell his son very briefly the substance of the proposal and of his ovm acceptance Hagelin Junior also v1as ready vlith his assent J do not think that if he had withheld his assent it would have made any difference in the situation or to Hagelin Senior for the latter had said when he asked me to talk with Boris Junior about the proposal that even though his son was you g enthusiastic and wanted to make money he would be kept in line I I said I was sorry and ThOped they would not EO 3 3 h 2 _ _ _ _ _ _ _ _ _ _ _____ PL 86-36 50 USC 3605 be embarrassed if they themselves the producers of the machines were not also authorized to be recipients of such instructions h Hagelin Senior felt that our proposal was a fair one for both sides and wanted to know when it was to become effective I told him that I thought that for a11 practical purposes it was either already in effect or would go into effect at once so far as we were concerned but I would let him know definitely about this point later i Nothing was said on either side as to the term of the understanding 11 A ' A-o - c t 0 The g elins wanted me to identify by name thel Ae- authorities -this ould be of great interest and help to them in their 1 business I I told them I could not do so now I could only say that there is a primary authority in Washington and a secondary one in Paris I asked that they be patient in this regard and that it would perhaps be possible to give them more information later to ask for any endorsement but the In any case it was not they who were NATO customer who had to take that 28 REF ID A2436259 EO 3 3 h 2 PL 86-36 50 USC 3605 ' 'et' BEISRm that action addressing their inquiry themselves to thel lauthor ----i ies would know where or whom to address inquiry k Hagelin Junior said' but not in the presence of his father that up to this time he did not ask the office staff to mske copies of all correspondence orders for machines etc for his own desk or use But now he could see that such copies would be useful - he could turn over a copy to us if we wanted some I would merely have to tell him to whom or where to send them 1 re i nsh I cautioned both Hagelins as to necessity for secrecy in this and they both understood the point quite well without any elab- oration 14o In my last report of a visit to Zug I mentioned Hagelin Junior's urgent desire to acquire a TYPEX machine which he could turn over to Yr Rossby S- mentioned above in paragr ph who w s anxious to obtain one Hagelin Junior brought this subject up again said that Rossby was still very anxious to get his hands on a TYPEX and that when he Hagelin Junior learned on his trip to India that the Indians had some TYPEX machines he tried to get one from them but was not successful He went on to say that Rossby somehow or- other got hold of a copy of the instructions for operating the machine but this Rossby said was not enough for his needs Hagelin Junior said that he didn't necessarily have to have a machine in perfect operating condition one that worked only haltingly would do He was quite and I think that if he could acquire a machine th ough i earnest about this US or UKUSA action such a esture would certainly cemen t good relations with Hagelin Junior for he l t1i idfcould get for a new automobile out of such a deal 11 29 This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu