Between the Wars: The 1920s
The end of World War I did not mean an end to the Army’s cryptanalytic effort. Using elements of his wartime organization, Herbert O. Yardley set up the Cipher Bureau, a clandestine unit that worked chiefly to break diplomatic codes. Although officially an element of the Military Intelligence Division, it was jointly funded by the State Department. Yardley and his small staff scored a number of intelligence coups, most notably in breaking the Japanese diplomatic code in time for US diplomats to leverage the Japanese bargaining position against them at the Washington Conference of 1921.

In 1921 the Signal Corps hired William F. Friedman to design new codes, such as this one used by the military attachés. Two years later, the Army adopted the M-94 cylindrical cipher device. The M-94 launched the US military cryptographic services into using mechanical ciphers instead of code books to secure military communications.