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  Unsurprisingly, and as previously discussed, the outbreak of war witnessed the immediate removal of non-citizens from direct broadcasting. It is not difficult to understand Annette’s frustration at having the broadcasting carpet hurriedly dragged from under her feet, and being treated as a potential enemy. The fact that she was an enemy would only encourage her ambitions, and following immediate protestations of her treatment, she planned her comeback (see Chapter 9).

  Annette’s Artistic Ability

  Evidently Annette had a talent for drawing. Reference to this aptitude may not have appeared in her file had the timing of her artistic productions not coincided with trips away – and these were usually maps. Perhaps this was simply a personal leisure activity, but when reviewing the lady and all her known interests, it is possible her illustrative talents were also oriented in another direction.

  The Hydro Majestic – Recovery or Preparation?

  Annette’s residency at the Hydro Majestic hotel during July 1939 warrants consideration. There are some contradictions to the health reason she advised as the purpose for the visit, and these pivot around three areas of interest – her medical condition, the timing of the visit and the location.

  Her medical condition, the lingering effects of typhoid fever, may have warranted her doctor’s suggestion that the ‘mountain air’ would be beneficial – but for almost an entire month? Also, it was now two years following her hospitalisation in Madagascar. Was her typhoid fever history now being useful for explaining something quite different?

  Annette’s residency at the Hydro Majestic was at a critical period in the lead-up to Hitler’s war. Walter Ladendorff had returned to Germany the previous month to avoid being interned, and in July plans for finalising the German spying arrangements in Australia, and possibly beyond, would require completion. When the war commenced, the legal protection available to foreign spying operations would cease. Now, wartime espionage on enemy territory would commence, and the days of Annette’s relatively comfortable snooping regime would be over. Suspicion could now be converted to something much more powerful than simply recording unusual behaviour.

  The location of the Hydro Majestic is significant. About 120 kilometres by road from Sydney, and serviced by rail, the position is ideal for minimising unwanted attention. The surrounding permanent population density was low and vast expanses of national park provided unlimited opportunities for undercover meetings. Ease of travel, excellent hotel facilities, and local provision for covert conferences afforded the Hydro Majestic a very suitable choice for those preferring a low profile.

  An added element to Annette’s Hydro visit was the cost. The hotel in the 1930s was the present day equivalent of a luxury resort and guests enjoyed heated pools and spas, comfortable and spacious rooms, a large range of services and fine dining. We do not know Annette’s precise dates of residence, but ‘most of July’ would imply a substantial cost. She may have met the cost from her own funds, or she may have received a ‘contribution’ from another source.

  The ‘source’ of any financial benefit Annette may have received is not difficult to uncover. The Hydro Majestic was built in 1903 by the successful retailer Mark Foy, a leader within the alliance of Australian business and community representatives who supported the Nazi regime in Germany. Foy often entertained visiting German dignitaries and it is quite feasible, with the appropriate introduction, Annette may have learnt that staying in a luxury hotel was considerably cheaper than previously believed.

  It should be noted that none of the items highlighted in this and subsequent chapters prove Annette’s absolute guilt. But collectively, there is an unmistakable theme. Given her personal and work–related circumstances – and comparing those with what may be expected from a young woman temporarily living in a foreign country – there is an extraordinary degree of dubious coincidence connected to her conduct. Further, this level of coincidence links into a common path – of questionable behaviour that would powerfully suggest a hidden agenda.

  Attempting to reinstate Annette’s jigsaw from scratch was challenging. Mostly, it was just another puzzle. However, some parts were difficult to fit together, and a few pieces were always held under the table.

  FOOTNOTES

  * * *

  8 Anthony Hordens was a large department store in Sydney.

  7

  Conduct Unbecoming

  Daily Commercial News, a publication listing details of merchant shipping movements in Australia, included the following notice inserted into its front page on 29 July 1938:

  EMERGENCY NOTICE TO MARINERS

  NAVAL GUNNERY PRACTICE OFF PORT STEPHENS

  Friday 5 August 1938 between 1500 and 2100 hours Gunnery Practice by ships of the Royal Australian Naval Squadron, south and eastward of Port Stephens in area enclosed between parallels 32 degrees 30 minutes South and 33 degrees 30 minutes South and between 10 and 60 miles offshore … Shipping should keep out of the above area.

  Port Stephens is a popular residential and recreational district 200 kilometres north of Sydney, named by its first European visitor, Captain James Cook who passed by in 1770. Today, the residents of Nelson Bay, Shoal Bay, Salamander Bay and other towns to be found on the rim of Port Stephens are proud of their expansive waterway and the lifestyle the region offers. Dolphins live and entertain in the gentle waters, and the bordering nature reserves, national parks, stunning scenery and white sand beaches draw tourists attracted by the water sports, fishing, whale watching and boat cruises that saunter across an area twice the size of Sydney Harbour.

  Today, the permanent residents of Port Stephens number about 70,000, a rapid development from the pre-World War II population of only a few hundred. A sizeable portion of the 1930s population comprised fishermen escaping the economic ravages of the Depression. Early shipping and economic development of the area had been lost to nearby Newcastle with its fine harbour and substantial coal reserves. The void of residential appeal in Port Stephens before World War II resulted in the area being particularly attractive to the army and navy. Surrounding the port was a region of varying geographical features deemed to be ideal for military exercises. Further, access to Port Stephens was limited until a paved road into the area was constructed in 1942. The small permanent population provided minimal civilian intrusion into a district that became earmarked for special military consideration.

  Following the Japanese attack on Pearl Harbor, Port Stephens was transformed by the army and later by the arrival of American troops. About 20,000 American and Australian troops used the beaches for initial training in amphibious warfare. The port entrance was fortified and radar installed as precautions against a Japanese attack.

  An Unwelcome Attraction

  If the pre-war residency interest in Port Stephens was low, government awareness of its potential was not – and this potential was not for commercial or residential development. Official attention in the area was far different.

  In the late 1930s the intelligence services noted, with some disquiet, the unexplained number of Japanese visitors to Newcastle. The city and its immediate environs were not judged as tourist destinations, yet groups of Japanese made the trip and their cameras clicked away on almost anything. An opinion emerged that maybe the Japanese interest was directed at something other than tourist activity or the collection of general and geographical information. The backdrop to this judgement was the behaviour of the Japanese in China, and predictions within Australian intelligence that future Japanese expansionist aspirations would not be confined to the Chinese mainland.

  In the event of war, the Broken Hill Proprietary Company Limited steelworks in Newcastle would be a major supplier in the armaments industry. Eliminating this production may also have been an enemy objective. By early 1940, a defence planning scenario produced a possible enemy landing on the coast between Sydney and Port Stephens. A naval invasion at Port Stephens would quickly see the capture of the steelworks and the loss of a major contributor to the defence effort. This
possibility resulted in the decision to build the nearby Williamtown air force base, completed in February 1941. The base remains today as the headquarters of the RAAF’s Tactical Fighter Group.

  It is probable that army exercises at Port Stephens increased alongside the growing apprehension attached to the escalating Japanese militarism. This paralleled intelligence recognition of augmented Japanese spying activity in Australia from the mid-1930s. Corresponding with this development was Emperor Hirohito’s decision by 1935 to lock the Japanese military into war with the West. This momentous development by Hirohito is detailed in David Bergamini’s outstanding book Japan’s Imperial Conspiracy.

  In late October 1938, while the 8th Infantry Brigade was training at Port Stephens, a lady was observed, somewhere in the district, whose conduct invited interest from army personnel. It is not known what the lady was doing to attract attention, if she was in the company of others, or even how she travelled to the area. But there was sufficient reason for someone, or some group, to organise enough effort to enable her to be identified. It was Annette Wagner. Following this identification, an immediate decision was made by Military Intelligence to place her movements and personal contacts under surveillance. Annette’s purpose in travelling to Port Stephens was not primarily to have a picnic.

  In assessing Annette’s undercover work, it appears that during her two-year period in Australia she committed only one known critical mistake – and only one of these is necessary. Later, there would be three other known mistakes, but these would probably have passed unnoticed had Annette avoided allowing herself to be identified at Port Stephens, or anywhere else. Precisely what she was doing in Port Stephens, we don’t know, but observing what she could of the army training could be presumed. We also don’t know if she had been careless, or someone else had particularly good observation skills. It didn’t matter because the effect was the same: without knowing it, Madame Wagner had put in motion a process that would blow her façade.

  The evidence from her file strongly suggests that the surveillance imposed on Annette went undetected by her for a full year – until October 1939. Failing to recognise this surveillance was a further slip-up. Had she suspected the operation, she would have pulled out of the system or quickly found excuses to attempt a redress with the aim of working around it. Not to be aware that her movements were being monitored signified that her attention to detail would now, at least in part, be shared unknowingly by others – on the opposite side. This was an irretrievable error that would eventually produce only one outcome.

  The identification of Annette’s spying activities would have had, initially, little consequence for her directly as she had not broken a law. Had she been questioned about her presence at Port Stephens on that day – and she may have been – undoubtedly she would have responded with the right answers – a good spy is always prepared to confront and weave through unintended consequences. So at this instance, her attracting attention meant little. It would be the surveillance of her subsequent ‘out of hours’ conduct that would raise serious questions. But surveillance of an individual or a group is only as good as the ability to maintain secrecy and the relevance of the information it collects. Had Annette been aware of strange people observing her she would have altered her techniques and created useless and expensive diversions for the agents assigned to her. However, Annette’s subsequent activities demonstrated that the surveillance applied to her was successful both in its operational conduct and the yielded results.

  The Port Stephens Naval Prospects

  Regardless of the apparent pre-World War II disregard for developing Port Stephens and its immediate hinterland, it had not been ignored by defence planners. In 1910, the same year that Korea was formally incorporated into the Japanese Empire, a report on Australia’s future naval requirements noted:

  Port Stephens is a very good harbour. My proposals only suggest using it as a submarine base for the present, but it should be surveyed and examined thoroughly, and land reserved, with a view to possible requirements of future naval expansion9.

  In 1912, a further naval development report highlighted the strategic significance of Port Stephens and the southern New South Wales port of Jervis Bay:

  Quite apart from their naval importance, these two flanking ports must be strongly held – Jervis Bay as the port of the Federal Capital and Port Stephens as the door to the coaling centres and the valley of the Hunter, a district so rich in supplies as to be capable of sustaining an enemy’s force of considerable numbers and consequently a part of Australia to be specially guarded10.

  The submarine base did not eventuate, but the strategic potential of the area had been acknowledged prior to World War I. It is difficult to imagine that this was not also recognised by the Japanese during that nation’s intense intelligence gathering in Australia. In 1938 it could have been the army activities of interest to the Japanese, and Annette received the call.

  To The Manor Drawn …?

  Considering the covert possibilities that lay ahead of Annette following her arrival at The Manor in Iluka Street, Clifton Gardens, it is clear how these premises offered her a superb geographical location. The Manor presented a leisurely access for the viewing of shipping movements through the harbour. It was a short ferry ride to the city, and with those who shared the premises, it offered Annette the prospect of interaction with interesting people – to converse with, learn from, cultivate, to exchange (selective) information and explore employment prospects. For the residents who were not so interesting, Annette had the option of having little to do with them – and it seems that’s what she did.

  More important than the above, there was another benefit certifying that this location for Annette was almost too good to be true. Iluka Street overlooks Taylors Bay and is separated from the shoreline by a narrow strip of national park. In 1938 this strip of land was reserved for possible defence purposes, but public usage was permitted. Annette’s room was at the rear of the building and had direct access from across a lawn overlooking the bay. The shoreline could be accessed by a short walk down a series of steps adjacent to the property, with protection offered by the surrounding bush in the reserved area. The significance of her room’s location is that it offered a concealed approach. Visitors to most other residents obtained their access through the front door directly opposite the street. Annette’s visitors had the option of the front door, or a more discreet approach at the rear of the building.

  Due to the large size of the property, built on five standard blocks of land each of one-quarter acre, The Manor adjoined the bush on one side, and the next-door neighbour would be unable to see Annette’s room or the entrance thereto. Only garden and bush occupied the rear of the building and the split-level street in front offered some limited protection to front-door visitors, if so desired. Being the first house in the street also allowed guests to enter the premises without the need to pass other properties and so remain almost entirely out of sight of the neighbours.

  A report in Annette’s file confirms the importance of The Manor’s location:

  … Position of the Manor is matter of some importance, its grounds slope down to the waters of Taylors Bay and it is quite simple for someone to land from a boat and walk up through the garden to the house.

  The significance of Annette’s room location was evident. The report continued:

  Annette occupied a room separate from the rest of the house, opening on the garden and bay. Adequate evidence can be obtained that when German ships were in port and they anchored in Athol Bay, she received, at night, visits from men who entered from the garden. There is a suggestion that she signalled to them with a blue torch light, presumably that the way was clear for them to come up. There was never any suggestion that they visited her for immoral purposes.

  So, if the reason for men from the German ships calling on Annette was not for immoral purposes, who were they and why the clandestine rendezvous? An entry in her file provides the answer:

  (Q
uestion). Is it possible that Cordes, who is interned, might have something to say about Annette? Cordes was ship trooper on the ‘Aller’ and the men from the ‘Aller’ and ‘Strassburg’ were those, it is believed, who most frequently visited her.

  For Annette’s information sources, the supreme location of The Manor is clear. When German merchant ships anchored in Athol Bay (see map), visitors to her room required only a small boat to round Bradleys Head, across Taylors Bay, then a climb up the short distance to the garden of The Manor and into her room. It is difficult to imagine a more convenient location for undercover meetings with people from ships at anchor in Sydney Harbour. The need for a motor vehicle or public transport is dispensed with, thus eliminating the possibility of an unwelcome observation by the usual means. The entry to Annette’s room is direct – thus avoiding the front door and possible prying by other residents. Further, the sloping terrain leading to the room was sheltered and consisted of easily manageable bush and garden.

  It is likely that should Annette have been shown a map of the Sydney metropolitan area, and asked where she would prefer to reside, her choice may well have been a property on the harbour foreshores with a similar outlook and direct access to the water. Most properties in this category are expensive, and to rent one – even on a shared arrangement – would likely to have been beyond her apparent means. But a large residence offering an up-market location to several individuals might have been cost effective. So how did Annette manage to obtain this accommodation at The Manor, owned by the Theosophical Society, who had a policy of offering temporary accommodation only to members of the Society, when she was not a member?