In November 1914, Reginald Hall, director of Naval Intelligence Division of the Royal Navy, received reports that the German authorities were using the postal system to communicate with agents in Britain. He brought this to the attention of Vernon Kell, the Director of the Home Section of the Secret Service Bureau. Hall insisted "that all foreign mails are opened and that no secret messages gets through". Hall was told that the government was unhappy even with the existing level of censorship. Hall then went to see Winston Churchill, who agreed to provide £1,600 to fund this new system of censorship.

Three weeks later, the Home Secretary, Reginald McKenna, discovered what Hall had done. McKenna had a meeting with Hall and told him that the penalty for tampering with the Royal Mail was two years in jail. However, when Hall explained the problem he gave permission for the opening of letters to continue and funds were found to employ 170 men to open letters that had been posted abroad.

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