0COP SEGRE -1 1 ed@iiiber 1957 - o d MliK RAHDUM FOR THE RECOBD SOB l'ECl Hagelin Negotiations 1 A rter Mr earl ow 1ett stockholm to v l sit the Hagelin Laboratories - J- 1 in 2'Dg1 Mr Kaplin urge9 that I Ji sit hf '1'-ZD8 as soon as con ven ien tJ for the f ' ' o purpose on ti s with and also the Gen tlemen 's to see the progress that had been made in the devel op- ment of _new apparatus AccoJ dinsl1' after spending a few dqs on ho in Scand1Dav La I proceeded to FrankfUrt tor preliminar r talks with the 1 Ob ief ot NSAEtJR and ASAE tO ascerta 1n what late intonna tion vas avail E ab1e con cerning devel opaen '$ in Gel'Jlllm1' in the logic field which might have a bee ring upon the talks which would later en sue between IQ'Sel f' am Mr Hagelin The information gleaned tran contereDC5 with the aforementioned persorme1 turned out to be quite usetul in Mr Hagelin 'lq' tal k s with After a few da ys holidq with friends in Frankfurt on 22 September I proceeded to ZUr cb where I was met at the air port at lBOO hours by Mr Hagelin who took me to zag b7 alltanobile Mr Hagelin - insisted that I be his house guest which necessitated ca n cellation of a hotel resern tion which I had made After dinner we had a brief talk among which the toJ J ow Lng k He Were the prin cipa1 items of concern astonished me 'bJ' handing a caw of u s Patent -- Bo 2 802 47 issued on 6 August 1957 on an ''Electric SW1tch1ng Device tor Ciphering Apparatus A can of this patent is -- - - - eclassified and a -- roved for release b NSA on 07-24-2014 attached 0COP eECREl ursuantto E O 1352 - REF -ID A60669 as Exhibit I The reason f'or my astonishment was that this patent covers the re-entry princi ple in electric rotor machines 1 a principle first thought of' at least in the u s some t lme in 194o It was conceived by Mr Albert Sn all in connection with the efforts of' the Army S1gna1 Intelligence Service to solve the Japanese highest level diplana tic cipher machine the so-called Purple The idea had 1 at my insistence been written up an application for patent thereon had been filed and the application and all papers connected therewith in the -Patent Office had been placed in secrecy So far as I am aware this application is still in a secrecy status t jW cco rding to U S Patent ' Law the Patent Office shc U ld not have issued any patent on the re-entry principle and mechanism therefor without going through the mechanics of a declaration of interteJ -ence It is probable that there was a slip-u p in the U S Patent Office and this will have to be investigated This phase of the matter bas been turned over to Mr Stauf'f'er Pe tent Counsel Office of Resea rcll and Developnent Natura lly I did not disclose to Mr Hagelin that we h8'1 a real interest in the re-entry principle or that an application for a patent thereon was pending in the U S Patent Office and was in secrecy status He did make a camnent to the effect that even though he had the patent he was pretty sure that he could not obtain royal ties fran the U S for its use we are using such an idea and his reply was sanething what made him think I thereupon asked h i m to the effect that he assumed that we too would have thought of such a neat and simpl e thing l ong ago He went on then to add with a smile that his application for a patent on this re-entry principle filed in 2 REF ID A60669 EO 3 3 h 2 ft OP 3ECRElJ PL86-36 50 USC 3605 Japan at the same time l 't it was filed in the __ been rejected by the Japanese Patent O fficel Mr Hagelin's patent is broader than the u s I u s o I _ October 1953 had J o ' ' - o M t o - - r At this writing r think application in that his covers the situation O J Mr Hagelin em ilii-8 --lr e ' - decision which f had very recently been handed down by the Bonn Govermnent to the OTT Siemens Company With regard to th'e of one-t tme-tapeJ telepnnter ciphering apparatus The Bonn decision permits the Siemens Company to sell their aforementioned apparatus to all custaners except the Soviet Union 4-satellites thereof I went into this in greater detail Air' it subseqtr ent conferen w1th Mr Hagelin and this tk J t' report will deal with this Wr- on 3 0COP eE GRE lJ - - REF ID A60669 it emerged at a contact-point on the output stator - d' There was considerable detailed inf'omation f'ran him about the radiation studies which had been made by the Siemens COm pa ny and which was reported Mr BarJ ow'i rip report I deliberately asked Mr Hage1in to tell me about these studies as though I had not heard about them already f'ran Mr Barl ow f - He had heard several times about c laints of NATO users of the U S o AFSAM -7 machine13 t C stly he said operational f'ail ures were due to dirty contact surfaces on the rotors This camnent incidentally was a repetition of an idential one ma de friend a captain in the u s Navy by an old who is on duty with Allied Forces in Northern Europe AFNE and wham I visited in Oslo just before going to Zurich tJN b o a IA A SAc '-Pn -HQ '-- C Mr Hagelin told me in same detail of' the deterioration -- in his business a nd social relations with his son Boris Junior in Washington Later I J ea rned from Mrs Ha gelin that their poor relations with their son begain soon after the son's marriage apparently because of in-1 aw daugb ter-in-law imcampa tibility I was to leam more about this later too 2 The next day M nday 23 September was spent in friendly chatting with Mr Hagel in in the course of which the following items of' inf'omation were J earned or discussed a He once again referred to his re-injection patent this time with sane pride in accampliShment or achievement so that it was obvious that he wanted to talk about it some more 4 I therefore REF ID A60 669 EO 3 _3 h 2 OP SEGRE PL 86-36 50 USC 3605 asked how he happened to think of or hit upon the i dea of re-injection whereupon he told me In l 952 he'd been to Bonn and had seen Dr Huettenhain et al he referred to the gl'Qup as Die Studien Gesellschaf't BoIL'a and that during this v tsit Dr ID ttenhain had said somethj ng in regard to Mr Hagelin tol d me t hat he oo wondered how this was possible but he did not ask Dr Hlrj teJ lha in to ex plain When he returned to Zug he began to ruminate and to think about this point he made sketches and dralQ ngs but coul dn 't tigure out how one could do such a thing as Dr H tenhain had mentioned Final ly he showed his drawingsito his Chief Engineer Sturtzinger who inmlediate1y said Mr Ha gel in said that he didn't quite understand what st Urtzinger meant by It developed Hagelin said that this was exactly what StUrtzinger had in mind but Hagelin was care f 'Ul to tell me that he'd thought of this neat trick by himself and before stilrtzi11ger could explain what he meant by the word _ _ _ _ _ _ _ ____ in this instance I then took up Mr Hagelin's last-night's reference to the fact that he failed to obtain a patent in Japan on his idea Q Japanese Haw was it that the u s Patent Office cited patent against you and still gave you a U S patent on 5 0COP eE CRE1 REF ID A60669 0COP SEGRE your 're-injection' circuitry He replied The Japanese patent wasn't cited by the U S Patent Office it was cited by the Japanese Patent Office itself when my application was filed in that country I asked Mr Hagelin if he could give me the Japanese patent number and he courteously su p plied me not only w1th that information but also with a cow of the Japanese patent E in paragraph Exhibit II attached hereto We talked agaj n about the Bonn decision mentioned above c Jl Mr Hage j n stated that he had recently visited the Siemens people in Munich in connection with their sale of one-time-tape cipher teleprinting macbine1 Apparently the occasion for this visit was to tell them that he haCL heard of the r sales of such equ i pnent o v uc ii - tr 'Yltu iJ ' to certain countries which he thought were I iro -curtain countries or were inclining in that direi tion He told them he wanted to find out whether there was any basis for these stories It was then that he learned from them of the Bonn decision to allow Siemens to sell their oo 1T teleprinter equipment to all countries except the and its satellites suit Mr Hagelin told me that he expected to follow I thereu pon asked him when or under what circumstances a country is to be regarded as a satellite of the Syria u s s R u s s R Or certain other M i ddle East countries and asked me in turn How i nd eed Row about Egypt Or He shrugged his shoulders I don't know r to that But of this I'm sure as regards Siemens They've sold some of their '8 6 OTT teleprintersf 'b- h ls V' t --- 1- vi ict r 6 c 6 Mr Hageli 1fn lj-lf reque ted I keep from his son Bdrls Junior unti i he himself' toJ d him- OtJia t the entire stockholm plant was to be m1 ved to ZUg early in 1958 The purpose is he said to integrate aJ 1 Hagelin operations and activities in one city and Zug was best for him He would try to keep in his employ as many of the Stockholm personnel as would be willing to move to Zug to work for hlll It was at this point that Mr Hagelin stated that he had aJ ready investei over $7501 000 in his ZUg plant and operations - that $500 000 of that amount came frail his capital the rest came from profits which his business had earned in the past several years and which he decided to plough back into the business d It was also at sane point in the conversation on this day that Mr Hagelin told m e that his son Boris Junior demanded and received a lump sum of' $25 000 as an advance payment of the inheritance he is slated to receive M r Bagelin added that since the son's arrival L in Washington another $5 000 was demanded and sent ' Mr Hagelin expressed some irritation a t his son's financial conduct saying that he bad bought a very expensive home and tvo automobiles it was no wonder he was running short of money but no more advance on the young man's inheritance would be sent him Mr Bagelin told me that he regretted that he would not be able to be with me after Tuesday evening because he Wa s scheduled to go to 7 REF ID A60669 Paris very early on Wednesday for a business conference with the French Interdepartmental Cammittee on CJ -yptography He added that he expected the meeting to keep him in Paris the afternoon of Wednesday all day Thur and part of Friday that he had p ed to be home lat Friday night and that he thought he wo1lld have very interesting news for me on his return - that is if' I shou lli find it possible to stay and would accept his cordial invitation to stay in Zug and await his return After a moment's thought I concluded that it would be advisable to do so first it would give me an opportunity to see some of' his new developments or models and to discuss them with S turtzinger and Mr Nyberg Hagelin' s manager-of-works second it wouJ d give time for a detailed visit through the Hage1in p1ant third I could perhaps discuss the radiation matter and al so the Bonn decision with these two gentl em en and might l earn more than had been told me by Mr Hagel in and by Mr Barl ow fourth the news Mr Hagelin thought he would br l ng back from his visit to Paris might be of' considerabl e interest and l a stly perhaps I would l earn more about Hagelin's plans as a result of the Bonn decision or about his future pl ans for his business as a whol e until his return I therefore accepted his invitation to stay My decision and acceptance of his invitation later turned out to have been a good thing as I learned considerably more fran Mr Hagel in than would have been the case had I not stayed on 3T o _ The next day Tuesday 24 September was spent in further leisurely discussions with Mr Hagel in during the course of which the following items of interest in this report are set forth bel ow 8 REF ID A60669 0COP eE GPE l b I asked Mr Hagelin if he knew whether or not the Bonn decision referred to above was in writing He said he could not give a positive answer either negative or afti rmative he didn't think it was he went on The Siemens peopJ e told me that they But told that new security regulations were being or had already been drafted but l not yet acted u pon They will be acted upon presumably after the e1ection in which Dr o Adenauer is almost sure to be re-appointed were told that the new regulations might The Siemens people change the whole picture and bring about a new situation c I queried Mr Ha gelin a gain as to wmatile z Siemens 'fted -Aoal - f 11 OTT te1eprinter equipnents and if so did he know to wham they had been To Jugoslavia for sure and I suspect also to Egypt sold sold some to India too I think they When I expressed astonishment at the saJ e to Jugosla via since it seemed to 111e to belong to the Sate1lite category1 he That sale was made a year or more ago when relations between said Jugoslavia and the u s s R were not so good as they are at present I guess one could still sey- that Jugoslavia is no satellite of the isn't that so I told him I d Ldn't really know Well u s s R In any case the sale to Jugosla via was con finned by Mr Nf Y'berg the next day1 when I visited the Hagelin laboratories d I asked Mr Hagelin whether Siemens had developed a key-tape generator for sal e to their customers who purchase their CY l'r teleprinter equipnent He told me that Siemens were making a tape generator for the Bonn Government but according to a design and specifications by Dr Huttenhain Hagelin didn't know its characteristics except that it wasl _____________________ t ype When I asked what the other Siemens customers would use 9 0COP SEGRE to manufacture EO 3 3 h 2 PL 86-36 50 USC 3605 EO 3 3 h 2 PL 86-36 50 USC 3605 key tape Mr Hagel in said Well I su ppose at first they will produce But Siemens is them by hand--punching the keys f a keyboard perforator going to make tape generators of a type I am developing In fact I expect them to make generators for my custaners of course acco rding to my design and development e My prototype is a Jlll ost finished I asked whether Siemens had any com petitors in Europe iE o am making and selling OTT teleprinter equipnent Mr Hagelin stated that the Lorenz Company were competing but their equipnent is usu aJ ly much more ewg expensive tha nl the equivaJ ent Siemens equipnent He understood that Lorenz was still in the develOIJD ental stage as regards their OTT generator the product of their first attempts was not good When I asked about other competing fimsJMr Hagelin said that the Italian Olivetti Canpa ny ' putting out OTT teleprinter eq liIJD ent and generato but he didn't kn ow much about them I except what can be gathered f 'rotl1 an adve t l ising leaflet - OMI he said was - still playing around with t 1e tr of'foline cipher machine I asked what he tho ugh were his prospects for se1ling his new Mr Hagelin stated that he was of the opinion _ _ _ _ _ ____ td that he would sell enough of' them to get back development eoetsA'or- it- f ti solD that these for study sold t to the French I expressed seme-litie o he financial prospects for this L P d e 1 oo 1' 'l' C ' f Q devel opment beeause- bable hi --of-the mmmi none of' I the Eur opean Governments coul d a f'f'ord to many such ma chines Mr Hagelin v ma de no comment on my remark It was my feeling at the time that he was continuing this devel opnent mo i -e out of pride and a detezmination to produce a good off-line machine than i'c r financial returns he might garner tor this development 10 0COP e CRElJ REF ID A 6 6 8 3 h 2 fOP SECRElJ g Pl 86-36 50 USC 3605 We talked once more about the testing o f' his new rotors I had asked Mr Hagelin the first time he boasted of having put a circuit through bat voltage - -- 'il 'ffk - - l was being used f'or this testing and he replied that he _did not k But today he told me that he had inquired about this point and now had an- answer Only I ro be _ h through 24 volts r yet the current on each transit went cxe th sbmdna f k J l 1-f Th esubject of the TELEX communication system came u p E' I ci'anmented that I thought that the use of OTT teleprinter equipnent in TELEX communications boded no good for off-line cipher machines because of the lower cost of such equipnent its simplicity and ease in use its security etc Mr Hagelin A c1l S f agreed with my view but seef Dl law for camnents on this point by Messrs Nyberg and Sturtzinger I asked Mr Hagel in abo ' t servicing of o equipment for TELEX communicaticJns just to what he would say He gave ' the obvious answer Since in Europe the telephone and telegraph services are operated by the government maintenance would be by government servicing men and that such servicing wo11ld include 1ooking a t'ter the tel eprinter machines w1- r ' t i r i I referred to his statement yesterday that Siemens had sold sane OTT teleprinter equipnent to the Egyptian Government and asked Mr Haselin if he knew what agency or department of the government was concerned stated that lie thought it wa He - fo r internal use by the Egn tian Arm y but maybe sane of it was for the Foreign Office He added quizzicall y that I ought to be in a better position than he was in respect to the latter question 11 J OCorsMf1ID A60669 ' - - -- - - ' - --- - - - o J - _r o - ' o - o I - r i - -'I o 1 - ' - J - - I I o 1 _ o i '' ' o ' - -- -' - ' - - - - ' _ 1 _ 1 REF ID A60669 EO 3 3 h 2 PL 86-36 50 USC 3605 fOP SECRElJ j o Referring to the possib1e saJ e by Siem ens of OTT te1eprinter equipnent to the Indian Goverm1ent Mr Hagelin said he thought that i government was in a good position to manufacture tape because he said they had lots of IBM machines I said I didn't see that IBM equipnent would be practical for producing tape Mr Ha gelin said that the cards could have ho1es for rand an 1etters and then you wouJ d print up sheets of those letters finall y sane clerk would use these sheets to punch up a tape on a keyboard perforator - wa y of getting # tape for a k I camnented that it seemed a round-about 1ria chine l When I talked with tho Q-- people in ASAE at Frank t'Urt1 I was told - about a certain Willi Reichert who ha cl been saJ vaging and selling same of the Worl d War II Gezma n gehe1m 1schreiber machines to the French Tunny Sturgeon T-52e etc I asked Mr Hagelin if he knew a ''Willi Reichert Yes but not personally and un t'avorably--he sells to both sides the Westem or Nato countries and also the Satellites Mr Hagelin went on to say that ao Reiche had sane sort of a se ret c e which he gets these ol d t Ji e r J SielAens machines a t s su pply has practically run out -- 1 - --- Mr Hagel in said that the Siem ens people had him to thank for the Bonn decision which permitted them to sell their OTT teleprinters to all except u s s R and its Sa tell ltes I asked how that came a bout with Siem ens He answel ed ifNL ' I I suppose my needling ca used iifte U S - to have the Bonn Govern- - ment do sanething which would make things easier for s i ens to get business ilJl this in turn hel me because I have an agreement with Siemens -- - 12 REF ID A60669 fOP SEGRE EO 3 3 h 2 - -pl 86-36 50 USC 3605 according to which they are tc sell oti cy- OTT equiJ IJ1 nt but no off-line mschines wher them in - r qui e o f I did n ll8 bu '' ' l' Y on decid o drop the subject Lieut Colonel Arnau i -e f o he with whan Hagelin - - ____ Q j had dealings fq several year1 J in regard to French orders for Hagelin equ Lpnent 'fA M Lt o'l o t C I Vwas gone '1re was sent to du1 y w l troops because he was so i ecisive m about what he wanted or shoul CL do in _ regard to cipher equipnent He just - couldn't seem to make up his z11 i so his superiors got him out of that Commi s Lon sl_u Chiffre He was replaced r f a Col qnel Ribadaud-Duma s And 'd k i-t - _ incidental q AColonel Verkuyl of- tch Army1 wa - repl 8 ced a coupl of years by a Colonel ___ sc Jk ka v a w fS vt t p _ i l NS s t -H J- n 4 The next day Wednesc ay 5 _se b r was_ pent in visit lneJltli uy I Hagel in pmces l aboratories -- - work op and in talking with Messrs t I Nyberg and Sturtzinger Princ ipal items of' discussion and of' apparatus - viewed are set forth below b For several yea rs now the Hagel in firm has been working on a modification of the c-type m a c hines so as to make them operate with perforated tape OTT encipherment inste1n of with pin-wheel and drum-bar mechanisms NSA has tried too 1 but I am not cl ear as to how successfUJ its own attempts a -Uu 1 l-o IM o- t Here the idea was to rF- able -'to -use the large stock of Converter M-209 machines in storage depots At the He gel in l aborator y I was shown a oe C-1 - 4 di 4 o working mOdel of such a modif l ed c-type Dia chine With theAnew C-52 or CX-52 machines the pin-wheel assembly can be removed and repl aced rather readiq when removed the new canponent for taking a perforated tape can be inserted and the machine is ready for use as an OTr machine course is true also of the ho vtl keybo -operat i3' OP qiccRS -- This of c-52_ or CX-52 machines since REF ID A60669 E03 3 h 2 Pl 86- 36 50 USC 3605 0COP eE GPE l the new Hagelin electric key1 1oard is designed so that it or CX-52 as its crypto-elem ent nil take a C-52 The modi f'ica tion of the J a tter machines l'o ll'l'T amiears to be neat apa of I was shown thewrk b nch on undergoing test as described above Jl C w ich the new rotors were to the output statoio -cl I was taken on a tour through a11 other parts of' the J aboratories machine shop and offices The plant a s a whole is now at least three times as large as it was when I visited it in February of 1955 Everything and --ll evecy e seemed to be spotlessly cl ean and the whole place wjMfe l 1- - i8A J o M d 1' ref'J ectio of quiet Aefficien1 direction Y We proceeded next to Mr Nyberg's office for a taJ k and it was then I l earned for the first time about the three slightly different versions of machines in the several categories of Hagelin machinEB in Eroduction or unde d tail ter in this re -devel l e - This be -------- 1 filt he fact that Hagelin was planning to put out three different versions 0 of his new machines astonished me greatly as Mr single reference to this in a '-1 a -d- f' H el in had no made a 1 the taJ k s we had A - be ftJM 9 Mh lt3 told Mr Barlow aiBMtt tl i e ilh -Nyberg or StUrtzinger 'IKaM Be rl OW 14 Q -u b The discussion now took the form of a sort of lecture by St zinger to acquaint'-me with the facts about electromagnetic Nyberg and radiation from crypto-apparatus facts discovered by Siemens researchers 1 and cOilllllunicated to the Hagelin firm I took it all in 11 s though this was -u -- R oJ O f $4 i ' te m1 Mri quite clear that the Siem ens e H n do engineers know about all forms or sources of intelligence COMINT em 0Ten in ' excep coustical hrough gla S windows or thin wallsj case I cannot be certain that they do not know of this sourc i questio xa uld person Nyberg did mention one form of be gained by focusing a large speaking to anothei say in a box stadium in -- - from ation of because it was not mentioned and of course I was not in a position to ask the proper m A MfJ all new to acous ical radiation-- parabolic l te ' the grandstand of' a football He also mentioned the fact that if' one was in close proximity to a t - i J fE f i 'f teleprinter one could learn things from the sounds made by the relays as they J t ' opened and closed 15 OCOP 3ECRE1 t - t REF ID A60669 EO 3 3 h 2 PL 86-36 50 USC 3605 fOP SEGRE c Based upon the discoveries made in regard to radiation the a elin firm What Mr Hagelin had told me on the first day of my visit in regard to the Bonn Govermnent decision as to Siemenso sa1es of telecrypto A q x- apparatus s repeated by Mr Nyberg He added t i e information however-' J I Hagelin firm was- 511P P0Seti7'to apply for and the Swiss Govern- '-i tc ment export licenses for the z-e te nai f b pnent of _equipment made in SWitzerland 1s ra l rule this requirement not enforced l'Tb ey most often winktll' their eyes but every once in a while Mr - Hagelin has trouble on this - score 11 ' I asked about the curre l- SWedish Govermnent l C Y in regard to w 12 Jv o 1 rt lice ses Mr Ny'Derg did not quite get the drift of my question Jflt replied somewhat as follows The Swedish Government has no control over the shipment of our OTT equi pment made in Switzerland of course but we conform to the wishes of the Swedish Government ly JAG our obligation as patriotic redish c tizen ' o in consideration of iAbio t lo - do what they wantAand not do what they don't want us to do e I asked whetheJ o the rules imposed upon the Siem ens firm by the - o T - I Bonn Government were also imposed upon the Lorenz or other Germ an E C firms Mr Nyl erg' replied that he supposed they were all treated the same wa y But Lorenz has been trying hard and pushing the sales of their equipnent though their prices are not only considerably higher than Siemens but also 16 WOP SECRElJ j REF ID A60669 their products were not as efficient as Siem ens' products 11 - f I discussed with Mr Nyberg his estimate or prognostications for the sale of their new off-line rotor machine the developnent of which is I said that it seemed to me that the trend was now away nearly camplete and toward on-line teleprinter cryptographic machines from off-line apparatus the contrary 't toa Jmrei'F in talking with milltary people in various countries They feartl that dependence upon on-line wire-circuit teleprinter ' very dangerous He countered by stating I Am systems paratroopers could put camnunication lines out of order veey easily and then what would camnanders do for communications I conceded the truth of the contention if the apparatus is worked over standard wire lines but it doesn't apply in the case of radio teleprinter communications However I continued I think your rotor machine is going to be too expensive for your customers' financial ab lity I assume that one unit will cost around $3 1 00_9 though this could be much less in case la rge numbers of machines could be produced and sold 1 MMr llyberg countered ''Your estimate of $3 000 is too high Jmyhw if we produce a first-class machine we sha l l not l a ck customers 6 The following sub-pe ragraphs surmnarize the most important points covered in conversation with Messrs Nyberg and Sturtzinger in regard to forth cam ing developments and new E quilJD ent The Ha gelin T- i5 cryptoteleprinters machines will be ready for sale early in 19 58 They are nla king an initial series of 30 and these will be of three types as regards the degree of security afforded by them 1 Type I or Category 1 - Ma chines for the West or West- oriented count1oies friendly there1 o This includes NATO members and countries These machines will be the very best that 17 REF rr- l Rf 69 E0 3 h 2 w '--'' '-'L-'--'' L- PL 86-36 50 USC 3605 A Cr agelin can produce I I ------------ J' will embody all the flexibility as regards usage that Hagelin has worked out 2 Type II or Category 2 Machines for the Friendly Neutral Countries Machines of this category ___________ _ are not so flexible as Category 1 - ' machines __ and The countries bel onging to or fal ling in this category are not yet firmly fixed in mind Finland might be considered one such country 3 - Type III 1 r Category 3 - These machines arel third best in Hagelin model flexibility They are 1 _ _ _ _ _ _ _ _ _ _ _ _ _ _ Pm lack Cc untries of doubt f'ul orientation or countries leaning toward the U S S R block fall in this category Indonesia India Egypt and all Near East Countries b Literature corresponding to these thl ee different types or categories accanpanied 1 November 1 57 the summary of this detail ed trip report dated The literature is referred to in paragraph mentioned summary and formed J nclosure 5 thereto lt 3 of the afore- The different brochures are distinguishabl e only by secrei marks printed thereon c With regard to iihe ''pocket machines o type CD I learned that dM cl here again more than one model was to bell sold co 55 The in a green case is saleabl e to all countries 'f hat have the old c-type machines such as c-38 1 M-209 model of the CD-57- o the newest f and c f r c-4116 OTT operation _ j The- This model is to be sold only to NATO or NATO-friendly countries It is of interest to note that whereas the CD-55 is in a green case the CD-57 J 8 - -- REF D_ A O 6 8 3 _3 h 2 0COP 3 3 _61 PL-86-- 6 50 USC 3605 is in a gray case models so far as 11 1'ib this '' - seems to be the sole difference between the two the outside r 11 ca n tell In other words although cr ypto- graphically the two models a i oe qUite differen they iook quite alike externally except as to color of case The s gment that is the Pe rt which is pushed 11 to operate the device is dif'ferent in the two models anil this difference can only be seen by taking the ma chines ape rt I - d - LW -C - W C _ 4WC t c 1 4 l t-- As noted above the CD-57 can be used with a one- bime tape The tape-reader is inserted in the space occu pied by the key-wheel assembly the latter canes out quite readily e There is one ad ditional important difference between the OD-55 and the CD-- 57 the c4 Hr d vices t U N iWw w - j i Mr Nyberg told _me_ that he lJ ad been recently on a visit to c r Belgrade and I gathered that he had either sold o r had tried to 1el1 the 19 0COP eE CREl EO 3 3 h 2 PL 86-36 50 USC 3605 REF ID A60669 OP eE GRE Jugoslav Government same of 01' ' equ ipnent EO 3 3 h 2 PL 86-36 50 USC 3605 He told me on ly that J ie saw the Jugoslavs had shown him an order to Siemens for their 01' ' mixer and -k c - -' i tt-1 Ol A o _ teleprinter ma chines but was -D'de to some c-52 t v pe machines not A - cx-52 t o J'1J o j preparation - Descriptive j_terature_ on the new Hagelinl ta pe generator is in The developnent of the generator has been completed but there still remains the design -of the f c9'Se 'i k The BY''ma chine wi be ro like the CX ty pe machine but The keyboard and base will be the same as the present Hagelin keyboard E D d base uni t but will be modified for high-speed operation This BY ma chine can be developed and produced rather quickly because all the canponents are already available can be determined Work on this machine is now being given first priority at the pl ant 2 -57 An interesting feature of the proposed new Hagelinjelecrypto machine is its f'1exibility in usage e e 20 are 8 different ways of using it REF ID A6El669 h 2 PL86-36 50 USC 3605 0COP SECRE1 and I was given a diagram showing thesE - h _J - ' - --- report 6November The diagram accompanied 1957 o _- - ' - _ o o - rl f fl i t _ in U s g - rated in other H assembly for example 8 ways o o Jin machines - one interestin w is to This sort of 1ohing was termed stretching out the 1 TT one-t i meokey tape m I asked who thought up the idea of having different categories of security for Ha gelin equipnent and was to that this was lby t'o t - 4 their friends in NATO They had of ccmrse no official IX' br n1 a-roarhnA11 with French Belgian Dutch j riends-- -- - 0 -- o When I asked if Siem ens was g f vingl Ito ___ different customers in regard to protec tion against radiation the answer was sketchy--the Siemens fim is very Esecretive about such things and thereI I fore Hagelin Nyberg and Sturtzinger ktLOW - - littJ e if anything in regard to this point i ' On Friday morning 'Z7 Sepi em ber I resmned my ta J k s with Mr '- Hagelin he having returned from u - taeL ML oJl '11 A A Paris sooner than had been expected He ad d ft c x ll'A I received an order from the French Government for about $250 000 for and teleciphering machines these being fo1 the Army Air Force and Foreign Office mostly a few telecipheril S _ the French ma chin s ere for the Navy WQ Mr Hagelin discussed br f efl y his Gentlemen's Agreement with He was told that while the y could of' course apply neither legal nor moral pressure at all they would be grate f'ul if he would refrain from 2l 0COP SECRE1 REF ID A60669 h o' ' o ' i o ' o 1 _ ' r _ - -- - -- '- ___ _ o oo ro - - - _ '_ -- - - -- - o I 1 L - o - It o ' - -- ' o-' r a r- REF ID A60669 0COP SEGRE EO 3 3 h 2 Pt 6-36 50 USC 3605 selling to all Arab countries especially Egypt any of hi s ex machines or any of his OTT generators He co if' he w tshed sell his c-type machines also his OTT attachments for working them f O long a s did not sell any of his generators O'l'r generators in fact he could sell his old and 1m perfect I took this to refer either to his ball-bearing aJ 1-mechanica1 genera tor or to his f'1rst m J eJ ectronic one et _ _ - a-' J 'l Mr Hagelin 8 - il a though the French asked him to refrain from selling certa in f his products to Arab countries they at least gave him some orders for llis equipnents 1 orders in sigo if i ca nt quantities not just one or two as did the u s L 1_______ ______ _ _____ I him I I A French Company Compa gnie Industr LeJ Telephoniqu e C I T had developed an electronic OTT key generator but this firm was unable to guarantee a delivery date short of two years fran now--and the French Government was in a hurry it could not wait that long llogelin has a contract with Siemens whereby O'l'r generators to Siemens pf a A 6- n furnishes Since the Siemens firm is presently permitted to sell to all countries except the u s s R and its satellites and since Siemens does not have to tell Hagelin to whom the Hagelin OTT genera tors a re to be d livered it is Ellai ly possibJ e that the new Hagelin generators could wind u p in countries where we the U S would not care to have such machines in use is an t point to note i e that there is nothing the U S can do about unless it be to urge the Bonn Government to institute as soon as possible and to enforce the proposed new security rules uegarding sal es of such eqill pnent o 22 0COP eE CRE l - REF iD A60669 - f Mr Hagelin sta ted that the French seem to be aware of the dangers of electromagnetic radiation from teJ eprinter equiIJllent but that _ A Jtwvu ut J t Q 1- t 10 ve Ao they really weren't too knowledgeable about tbfs ecause they had sted certain Hagel in equipnent and had passed it as not dangerous frail the point of view of radi whereas he Hagelin knew that that equipnent was not provided withf the anti-radiatio protection which the Siemens fim had found necessary ex machines for the French will be ready for delivery in - The h Mr Hagel in sta ted that he had heard from three different g 3-4 months the teleciphering machines in 4-5 months sources that the Americans and the British had alleged that be had sold CX-tY Pe t l f machines to ol or new customers who wanted This he vehem entJ y averred was not true l e was When he tried to trace these allegations to their sources unsuccessful and therefore he was going to dismiss them from his - -- min as well as the tales that the Americans and he Britiajl ha d made derogatory comments about the security of the Hagelin equipnents I asked Mr Hagel in whether it might not be possible that some competitor started such rum ors and derogatory 4'4 statements about his apparatus Hagelin said That could not be so f lel l aknow no c eti tors in the business I am in certainly not as regards the manu facture - fW o c M M w t'H of machines of the C and crx -type tftl I said Well how about Willi Reichert for instance Mr Hagelin speedily rejected Mlch -M idea - Q r- Be- A _ OJ o eo-- _ OM I 'hto ot i - __ J i Mr llagelin told me during this con rence t' at while hE waB i away on his ip Mr Nyberg had made a sale of $50 000 worth a new customer of equipn ent to I did not ask who 1 t was but I suspected hat it was Jugoslavia 23 t it REF ID A60669 - Mr Hagelin confided that he had j o out only two categories of his afford - quipnent original contemplated putting as regard the security they were to But it seemed that during the time he was in SWeden in the summertime - of this year Sturtzuger and Nyberg established three categqries which he -i t P J himself' thought would be one too- many Two categories' would give sufficient k problems in keeping track of which customer got k Mr Hagelin had what I asked Mr Hagelin if while in Paris he had seen Colonel Black told me some time ago that he knew Black and of his organization Not this time 11 he said It Ls clear therefore that Black's influence ' works through the interdepartmental q ittee on cryptography since Mr Ha gelin had on this visit received a rather large order in a very few hours' visit with the members of that committee ''k1 ' '1 ' - - --- -- -- -1 An interesting note related by Mr Hagelin during our conference this day He had been told of an amusing episode The Belgians had asked the Luxembourg Army people why they didn't use the new American cipher machines during a very recent NATO exercise and they kidded them about this But' Ct Hagelin went on to say during that exercise there was lots of rain and the only cipher communications during the maneuver were those of the Luxembourg forces -- they were using the Hagelin C-type machines EO 3 3 h 2 PL 86-36 50 USC 3605 24 REF_ ID A60669 treated tu rther on in this report - 9f a OUr conference was resumed on Saturday 28 September sitting ''-in the Hagel in garden in bright warm sunshine the first day of such weather in the whole week It was an opportune time M rt Hagel in several EO 3 3 h 2 PL 86-36 50 USC 3605 more questions 25 -- ' REF l D A6 669EO 3 _3 h 2 PL 86-36 50 USC 3605 0COF' 3ECRE1 b First what about tho _ fut e of his son Boris Junior in the affairs of C rypto A G He answered - - If he proves himself in the U S and 1earns what he shou1d 1eam it is possib1e that he might be able to take over the whole business some day in the future--but not the near future As a matter of fact I've been thinking of merging my business in or with Siemens Then they could take over the headaches which I now have in dealing with my customers under the handicaps imposed by limitations and restrictions as to vhcrn I can sell what machines c I'm tired of being the only whipp ng bey o Second what could he do to stop Boris Junior from putting out ic communications instructional literature about c insecure crypto-equipnent and t E Mr Hagel in answered i hink I should the use of faulty use of good equi Jllent I To this your authorities would be in a better position to control this sort of thing than I country and I am here in SW1tzer Land 11 After al l he is in your I said Boris has been calling in person at every legation and embassy in Washington and I suppose he is 11 educating 11 some of them about 11 I know he put out one document that we're not happy To this Mr Hagelin commented and South American countries He should cal l only u pon Central But of course he ma y be cal led to do repair and maintenance work on our equipment in the_ 1egations and embassies of countries maintenance man rchie o k New York repair and Johnson is sometimes to f r awa y for a job that other than Central and South Am e t ican and that is must be done without any delay 11 I did not pursue this subject any further - tL _l ask wh taer he _a nY Sl ecial word or mess e he wished mp to convey 'Vf ''- PJU- ll'e llll - J i-o A 1 to Boris Junior t None he said '_ _c_e tha wanta to wish him well in his 1 Q business and hopef that he can make a good thing of it 26 Mr Ha gel in added by -WP iD A60 669 t T to 1 0 3 3 h 2 PL 86-36 50 USC 3605 I way of comment that his difficulties marriage o with son began right after the W'OA k Edith the American wife- who had brought him and Mrs Hagelin tz-rlng family problems returii Europe t b- er l e fmed- f J -tf J J dll fr om Mr Hagelin ' from a visit to America in the Spring pf 1956j iblit J had told them that Boris Junior was homesick and would love to come back to Switzerland but Edith is opposed to this idea 11 a'f t kt f1r d' e Af 1 y cot _ r d th DP - -n vell crypto-equipme i and corninlh'rl c tions equipmen t'1 1 s line Especially not in regard to teleprinter equipm en t ' r t in em ens' line That's i - note J Ha gelin told me during this conference that because of technical difficulti e' ii iJlfving up the CY-type motion and machine the firm was going to use I machineI o ' _ Xt ' -Arrother 1 mports nt- noti -- he had very recently conceived of a way of making his pocket machine CD out one-half its present size It could _____________ be just a bit bigger than a ' ack of kin -size ci arett J2 t l 1 _____ '- ' ' 1 fi OP 3ECRE1 - 1 - ______ H ' t ej '-' Pr 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