Room 40 did not exist when war began at midnight, August 4, 1914, but the cable ship Telconia took the first relevant act in its birth. On august 5, in the North Sea off the German port of Emden, The Telconia severed five German telegraph cables that run through the English Channel to the world beyond. This led Germany to rely heavily on wireless telegraphy for rapid communications. The British Admiralty’s signals intelligence stations began to intercept German wireless messages and soon recognized the need for a formal cryptanalysis organization. Henry F. Oliver, the Director of the Intelligence Division, enlisted his friend Sir Alfred Ewing, Director of Naval Education, to organize a code breaking unit. Thus, from humble beginnings was born one of the most successful intelligence operations in history which made important, if not decisive, contributions to Allied victories in the First World War.
The initial recruits were fluent in German but knew very little about codes and ciphers. They were getting no where with the German cryptograms until the fortunes of war turned in their favor. Within twelve weeks, three important German naval codes came into their possession. The first, used for major operations, was turned over in mid-October by Britain’s Russian ally after it was recovered in late August from the grounded German cruiser Magdeburg off Estonia. The second was a German merchant marine and naval code from the German- Australian steamship Hobart. Finally, in December, came a German code used by flag officers (admirals), the most fortuitous catch of all. This code had been among secret papers tossed overboard in a leaden box from a German destroyer going down in the North Sea.
... the enormous losses suffered during the first year of war. The main German armies in the East operated with characteristic Teutonic efficiency ... front also saw the rise of the great German "artillery virtuosos" of the war, men such as Lieutenant Colonel Georg Bruchm " ... Line had sidearms, rifles and machine guns equal to his German counterparts, and probably superior to the Austrians. The standard ...
With these three codes in hand, Room 40 made dramatic progress. Before long the decoders could read much of the German navy’s signal traffic which helped them to keep track of the High Sees Fleet and locate menacing submarines. Success brought a greater recognition of need at high policy levels, and growth naturally followed. Thus, Room 40 became an official subsection of the Intelligence Division with an official designation of ID-25, but still referred to as Room 40 by the people who worked there.