B-Dienst (Beobachtungs-Dienst, or Observation Service), German naval cryptanalysis service which unbuttoned the Royal Navy's Administrative Code—used by ratings for less secret communications—before the war. This then led to B-Dienst making headway in breaking the Naval Cypher, which was used by officers for more secret communications. ‘By April 1940 it was reading without delay 30 to 50% of the traffic intercepted, though it should be added that the evidence suggests that it had no success with traffic enciphered in the tables used by the Commanders-in-Chief and Flag Officers’ ( F. H. Hinsley,
British Intelligence in the Second World War, Vol. 2, London, 1981, p. 635). B-Dienst's success adversely affected British naval forces during the
Norwegian campaign; and though both code and cipher were replaced in August 1940—the Administrative Code with Naval Code No. 1 and the Naval Cypher with Naval Cypher No. 2—B-Dienst's ability to decrypt both was closely linked from then on as they had similiar characteristics.
Initially B-Dienst had limited success against Naval Cypher No. 2. But from September 1941 until January 1942, when the cipher was replaced by Naval Cypher No. 4, its ability to read it was extensive, and by October 1942 it was also having some success with decrypting No. 4. More marked, however, was B-Dienst's successes with Naval Cypher No. 3, the British ‘Convoy Cypher’, the means of communication between the British, Canadian, and US navies during the
battle of the Atlantic. This was introduced in June 1941 and by February 1942 the Germans were reading as much as 80% of the radio traffic sent in it, and though they had minor setbacks they were often able to obtain between 10 and 20 hours' advance warning of the movements of
convoys, with disastrous results for the Allies. This success coincided with the introduction by the Germans of the four-wheel
ENIGMA machine in their U-boats whose signals the British were not immediately able to decrypt, and which, therefore, prevented the British from gleaning from
ULTRA intelligence that their cipher had been compromised. However, other decrypts raised the suspicion that it might have been, and this was finally confirmed when U-boat ENIGMA signals began being read at the end of 1942. It took time to introduce a new system and in the intervening period extra precautions were taken until, in June 1943, both No. 3 and No. 4 were replaced by Naval Cypher No. 5 which B-Dienst was unable to break. From November 1943 onwards Naval Cypher No. 5 was replaced in British–Canadian–US communications in the Atlantic by the Combined Cypher Machine (see
Typex).
Equally vital to German U-boat successes was B-Dienst's ability to read the British Merchant Navy Code which, in January 1940, replaced the International Code and Naval Appendix used to communicate with merchant ships. By March it was able to read some of the signals and after May 1940, the month when copies of the code were captured at Bergen, it was able to read most with little delay. In April 1942 the Merchant Navy Code was replaced by the Merchant Ships Code, but B-Dienst, aided by the capture of a copy of the new code-book before it was even introduced, was able to read this with equal facility. That helped it to break Naval Cypher No. 3 and gained it important intelligence about convoy movements after Naval Cypher No. 5 was introduced. But the introduction of precautions in December 1943, and of further ones in September 1944, gradually eliminated the Code as an intelligence source for the Germans. See also
signals intelligence warfare.
