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Unlike its main sister agencies, the Security Service (MI5) and Government Communications Headquarters (GCHQ), SIS works exclusively in foreign intelligence gathering; the ISA allows it to carry out operations only against persons outside the British Islands.

The Bureau was a joint initiative of the Admiralty and the War Office to control secret intelligence operations in the UK and overseas, particularly concentrating on the activities of the Imperial German government.

Most of its results came from military and commercial intelligence collected through networks in neutral countries, occupied territories, and Russia.After the war, resources were significantly reduced but during the 1920s, SIS established a close operational relationship with the diplomatic service.When Section D was absorbed by Special Operations Executive (SOE) in summer of 1940, Philby was appointed as an instructor in the arts of "black propaganda" at the SOE's training establishment in Beaulieu, Hampshire.This was a covert organisation based in New York City, headed by William Stephenson intended to investigate enemy activities, prevent sabotage against British interests in the Americas, and mobilise pro-British opinion in the Americas.Sinclair created the following sections: MI6 assisted the Gestapo, the Nazi secret police, with "the exchange of information about communism" as late as October 1937, well into the Nazi era; the head of the British agency's Berlin station, Frank Foley, was still able to describe his relationship with the Gestapo's so-called communism expert as "cordial".

The chief of SIS, Stewart Menzies insisted on wartime control of codebreaking, and this gave him immense power and influence, which he used judiciously.

Its first director was Captain Sir Mansfield George Smith-Cumming, who often dropped the Smith in routine communication.

He typically signed correspondence with his initial C in green ink.

Examples include a thwarted operation to overthrow the Bolshevik government as well as more orthodox espionage efforts within early Soviet Russia headed by Captain George Hill.

Smith-Cumming died suddenly at his home on 14 June 1923, shortly before he was due to retire, and was replaced as C by Admiral Sir Hugh "Quex" Sinclair.

Formed in 1909 as a section of the Secret Service Bureau specialising in foreign intelligence, the section experienced dramatic growth during World War I and officially adopted its current name around 1920.