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Inventor and business man
Boris Casear Wilhelm Hagelin (2 July 1892 - 7 September 1983) was a
Russia-born Swedish engineer, inventor of
cipher machines and businessman.
He developed his first cipher machine in 1925, as a colleague of
Arvid Gerhard Damm
at A.B. Cryptograph in Stockholm (Sweden), of which his
father, Karl Wilhelm Hagelin, and the Nobel family were investors.
Hagelin eventually founded
one of the largest and most successful manufacturers of cipher
machines — Crypto AG.
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Hagelin was born on 2 July 1892 in Adschikent, a small town near Baku in
Azerbaijan, then part of the Russian Empire.
He was the son of a wealthy Swedish industrialist, Karl Wilhelm
Hagelin (KW), who managed the Baku oil fields for the Nobel family.
As KW was a personal friend of Emanuel Nobel, it was assumed that
Boris would someday take over management of the Nobel oil interests.
After an initial education in Russia, Boris was sent to Sweden, where
he graduated from the Royal Technical University in Stockholm in 1914,
with a degree in mechanical engineering. After his graduation he entered
service with ASEA – the Swedish General Electric – to apprentice for his
presumed role in the Nobel enterprises,
but the Russian Revolution of 1917 intervened and Boris would never
return to the Nobel oil fields.
After spending a year in the United States, Boris returned to Sweden
in 1922, where Emanuel Nobel employed him at
AB Cryptograph,
a small company set up in 1916 to exploit the cryptographic ideas
of the eccentric Arvid G. Damm. 1
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Emanuel Nobel and Boris's father - Karl Wilhelm Hagelin – had invested in
AB Cryptograph, and
wanted Boris to protect their interests, by assuming day to day
management of the firm.
Apart from a womanizer, Damm
was also a mechanical genius.
He had developed a rotor machine – the B-1 – of which the
prototype was ready in October 1919. Two B-1 machines were later built
and tested by the Swedish PTT. From this, he developed a two-rotor machine –
the B13 2 – of which 20 units were built in France. Some of these machines
were used in the Dutch East Indies.
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In 1925, Boris Hagelin became general manager of the company, and in 1928,
whilst Damm was living in France,
Hagelin received an order from the Swedish
Government who were looking for a cipher machine that could compete with
the German Zählwerk Enigma A28
(with glowlamps).
Hagelin took Damm's double-rotor machine and modified it with
his own (now famous) pinwheels to control their stepping.
The machine would eventually become known as the
B-21 and is shown in the
image on the right. Although it looks similar to
Enigma,
its operates differently.
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The pinwheels would be at the heart of all Hagelin's creations
for the next 40 years. They caused a more frequent stepping of the
cipher wheels, and made the machine more difficult to break.
The Swedish Government accepted the design and provided the
company with its first income.
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Damm died on 7 November 1928 in Bayonne (France) but had not been
involved much with
AB Cryptograph during his final years.
In 1930, the company was liquidated and the rights were transferred
to the company AB Ingeniörsfirman Teknik, that had been founded by
Boris Hagelin in 1928.
The company didn't make much money in the small Swedish market,
until the French Army came along in 1934 and
bought the B-21.
Like the Enigma,
the B-21
had a lamp panel for its output, but that was not wat the French
Army had in mind. They wanted a faster machine, that was able
to print its output directly to paper.
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Hagelin developed a rotating print head and a strip printer,
and also added an electric motor to the design. He called the new machine
the B-211.
The machine was accepted by the French and 500 units were manufactured
at the L.M. Ericsson factory in Colombes (Paris, France) prior to the
outbreak of World War II.
After the war, another 100 units were delivered to the French.
It marked the start of a long-term relationship
between Hagelin an the French Army, who also asked him to develop a portable
mechanical cipher machine that would be suitable for tactical use in the field.
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Hagelin took his pinwheels and combined it with a money changing
machine that he designed for the Swedes a few years earlier.
The French gave him a piece of wood that specified the maximum size,
and Hagelin came up with a machine –
the C-35 –
probably named after the year — 1935.
The machine – shown in the image on the right – had five pin-wheels
and a revolving cage with horizontally moving bars, with lugs at specific
places. It was an immediate
hit and the French promptly ordered 5000 units, providing Hagelin with enough capital to let his company flourish.
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The B-211
(above) was also sold to other countries. The Russians even
copied it after obtaining two working B-211 machines from Hagelin under
threat. The cloned machine was named
K-37 (Crystal) and was broken by the
Americans during WWII.
The Russians used it until the late 1940s.
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The C-35 was succeeded by the C-36,
a similar machine, but slightly larger and more robust.
It had a different distribution of the lugs on the horizontal bars, and
Hagelin tried to sell it to the Italians and the Americans, but both rejected
it.
Hagelin first demonstrated it to
William Friedman of the Army
Signals Intelligence Service (SIS) in 1937. Friedman
was looking for a replacement for their (insecure)
M-94 hand cipher device,
but found the C-36
too insecure. Hagelin tried again in 1939, but
the design was rejected once more, and
Hagelin went back to Sweden to improve it.
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Around the same time, the company – Ingeniörsfirman Teknik –
was renamed AB Cryptoteknik.
But before the improved machine was ready, WWII broke out and the
situation in Sweden became uncertain. Hagelin persuaded the Swedish government
to appoint him as a special courier, and with his wife Annie, he made
his way to the US. In his luggage: two unfinished C-38 machines.
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After a distressfull journey through war-torn Europe, Boris and Annie
finally reached Italy, where they boarded the Conte de Savoia. It was the last
ship to sail for the United States. After several days, they arrived safely
in New York.
Upon arrival in the United States, Stu Hedden – Hagelin's business
representative in America – was already busy selling Hagelin's latest design: the C-38. The Army wanted some modifications to the C-38, bought
the rights to the improved machine and called it
M-209.
It would become the cryptographic workhorse of the US Army.
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Hagelin sold the rights to the US Government for no less than US$ 8,614,790,
using Stu Hedden – his US representative – and James Paulding
– a French banker – as feduciaries. 3
By the end of the war, a staggering 140,000 units had been built
at the Smith & Corona typwriter plant in Syracuse (New York, USA).
And by that time, Hagelin had become the first crypto-millionaire
in the world.
➤ Continue with the history of Crypto AG
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It is often assumed that AB Cryptograph
was owned by Arvid Gerhard Damm,
but this appears not to be the case. The company was owned by Emanuel
Nobel and – like Boris Hagelin – Damm was just an employee [6].
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In some literature, this machine is erroneously identified as the B-18,
but that machine never existed. The reason for this confusion is probably
the fact that Boris Hagelin made the same mistake when he wrote his memoires
[2], probably misreading the '3' in his notes for an '8'.
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Hagelin wanted the royalties to be described as 'capital gains'
which were not taxed in Sweden. Instead he payed 25% income tax
in the US. His gross proceeds were US$ 2.8 million (netting at
US$ 1.8 million). Pauling received US$ 430,000
and Hedden US$ 140,000. Smith & Corona made a profit of
US$ 5 million.
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Controlled by Western intelligence
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After the war, Hagelin returned to Sweden, but the restrictive export laws
and high tax burden, forced him to move the company to neutral Switzerland
in 1952. This also brought him closer to the action, as he recalls in
his memoires. Especially the French gave him substantial orders. But from
the start of the Swiss enterprise, the company was influenced by Western
intelligence:
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- 1951-1960 · NSA · Gentleman's Agreement
It is widely known that Hagelin had a good personal relationship with
William Friedman — the dean of American cryptology —
that dates back to WWII. When Hagelin announced in the early 1950s,
that he was working on new highly secure cipher machines with irregular
stepping – the CX-52 – the US
National Security Agency (NSA)
sent Friedman to Sweden and Switserland to
strike a deal with Hagelin, with the intent to deny secure machines
to certain countries. The deal was never put in writing, and was reviewed
in 1955 and 1957.
- 1960-1970 · CIA · Licencing Agreement
In 1960, the influencing of the company
– Crypto AG –
was taken over by the US
Central Intelligence Agency (CIA).
The deal was nearly identical to the
Gentleman's Agreement
that NSA had with Hagelin – a denial operation –
but this time it was in writing.
This operation is also known as the SPARTAN project.
- 1970-1993 · BND/CIA · Operation THESAURUS / RUBICON
Finally, in 1970, Hagelin sold his company to a joint venture of the
German Bundesnachrichtendienst (BND)
and the American CIA. This was kept outside the view of the public,
the personnel of Crypto AG
and nearly every government, and put BND
and CIA in the driving seat for many years.
In 1987, the name THESAURUS was changed to RUBICON.
- 1993-2018 · CIA · Operation RUBICON
In 1993, the BND opted out of Operation RUBICON and sold its shares to the
CIA on 30 June 1994. After this, the
CIA ran the company until February 2018, when the assets were sold to
Crypto Schweiz AG (now: CyOne Security AG) and
Crypto International AG.
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- Boris Hagelin, Die Geschichte der Hagelin-Cryptos
Original manuscript by Boris Hagelin in German language. Zug, Fall 1979.
- Boris Hagelin, The Story of Hagelin Cryptos
English translation of the above. BCW Hagelin, Zug, Spring 1981.
Later edited by David Kahn and published in Cryptologia, Volume 18, Issue 3, July 1994, pp 204-242.
- Hans Stadlin, 100 Jahre Boris Hagelin 1892-1992 (German)
Crypto AG. Crypto Hauszeitung Nr. 11. Jubilieumausgabe September 1992.
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- US 2,089,603 - Ciphering machine (C-35)
Boris Hagelin. Filed 23 August 1935.
About → C-35 machine.
- US 2,247,170 - Ciphering machine (BC-38)
Boris Hagelin. Filed 28 November 1938.
About → BC-38 machine.
- US 2.394,765 - Ciphering and deciphering mechanism
Boris Hagelin. Filed 24 July 1939.
- US 2,765,364 - Keying mechanism (CX-52)
Boris Hagelin. Filed 5 October 1940 as → US 188,546 1
Placed under Secrecy Order on 14 September 1951 at request of AFSA
(NSA).
Released on or after 27 March 1952. Published 2 October 1956.
- US 2,802,047 - Electric switching device for ciphering aparatus
Boris Hagelin. Filed 16 October 1953. Published 6 August 1957.
This patent actually interferes with secret
US Patent 2,984,700
for the same,
filed around 1940, but Hagelin was not informed about this in 1953.
The principle of re-entry descriped in this patent was also used
in the American KL-7 (then: AFSAM-7)
and later in the Russian Fialka.
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Declassified by NSA on 17 June 2014 (EO 13526).
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- Wikipedia, Boris Hagelin
Retrieved July 2015.
- Boris Hagelin, Die Geschichte der Hagelin-Cryptos
Original manuscript by Boris Hagelin in German language. Zug, Fall 1979.
- Boris Hagelin, The Story of Hagelin Cryptos
English translation of the above. BCW Hagelin, Zug, Spring 1981.
Later edited by David Kahn and published in Cryptologia, Volume 18, Issue 3, July 1994, pp 204-242.
- Crypto Museum, The Gentleman's Agreement
30 July 2015.
- Crypto Museum, Operation RUBICON
February 2020.
- Anders Wik & Kjell-Ove Widman, Damm och AB Cryptograph
FRA historiska skrifter #27. Bromma, 2017. 40 pages.
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© Crypto Museum. Created: Friday 23 August 2019. Last changed: Sunday, 23 July 2023 - 11:42 CET.
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