Foreign Relations of the United States, 1945–1950, Emergence of the Intelligence Establishment

46. Paper Prepared for the Secretary of State’s Staff Committee⁰

Washington, November 15, 1945.

SC–172

DEVELOPMENT OF A NATIONAL INTELLIGENCE PROGRAM

The Problem

To recommend action pursuant to the letter from the President dated September 20, 1945 directing the Secretary of State to “take the lead in developing a comprehensive and coordinated foreign intelligence program for all Federal agencies concerned with that type of activity”.

Recommendations

It is recommended that:

(1) The proposed agreement establishing an Interdepartmental Intelligence Coordinating Authority and an Interdepartmental Security Coordinating Authority, contained in Annex “I”,¹ be approved.

(2) Centralized conduct of espionage and counterespionage activities be approved in principle, subject to the formulation of detailed organizational and operating plans.

(3) In lieu of a central agency responsible for producing national intelligence estimates, the projected Special Estimates Staff of the Special Assistant for Research and Intelligence be assigned that responsibility in collaboration with representatives from other interested agencies as described in the last paragraph of the following discussion.

Discussion

The President, in a letter to the Secretary of State dated September 20, 1945, issued the following directive:

“I particularly desire that you take the lead in developing a comprehensive and coordinated foreign intelligence program for all Federal agencies concerned with that type of activity. This should be done through the creation of an interdepartmental group, heading up under the State Department, which would formulate plans for my approval. This procedure will permit the planning of complete coverage of the foreign intelligence field and the assigning and controlling of operations in such manner that the needs of both the individual agencies and the Government as a whole will be met with maximum effectiveness.”

The Secretaries of War and the Navy, in a letter to the Secretary of State dated September 29, 1945, transmitted the recommendations of the Joint Chiefs of Staff as to how best to “provide for the development and coordination of Intelligence activities related to the national security”. Studies on various aspects of intelligence activities in the post-war period have also been produced by many other individuals and agencies, such as the Attorney General,² the Director of the Bureau of the Budget,³ the Secretary of the Navy,⁴ the Director of Censorship, the Librarian of Congress,⁵ and a committee in the War Department.⁶ All of these studies and recommendations have been considered in the preparation of this report.

The President’s directive clearly specifies that the coordinating authority must be an interdepartmental group heading up under the State Department, but it does not specify the organization, membership, or method of operation of that group. The directive also establishes the scope of activity of the group as the entire “foreign intelligence field”. It does not confine it to “intelligence activities related to the national security”, security (or counter) intelligence, censorship, or other specialized fields, but expands it to cover the furtherance of our national interests as well as the safeguarding of our national security. It therefore includes the commercial and cultural fields in addition to the military and national security fields. The directive further authorizes the “assigning and controlling” of all foreign intelligence operations, and the formulation of operating plans to accomplish this for the President’s approval, presumably when necessary. The directive does not specifically indicate the source of the funds, personnel, and facilities required to perform the coordinating function and any other centralized operations deemed necessary. The interdepartmental character of the group, under State Department leadership, implies, however, that such funds, personnel and facilities should be provided by the participating agencies, with the principal responsibility resting upon the State Department. The various factors which require decision under the President’s directive are discussed below.

Organization of the Interdepartmental Group

The job of coordinating the entire intelligence field will require two separate interdepartmental coordinating bodies; one with authority in the broad field of foreign intelligence activities, and the other in the specialized field of internal security and security intelligence. This division is necessary because the agencies interested, points of view, and types of operations vary markedly in those two fields. Some coordination will be necessary between the activities of the intelligence and the security coordinating authorities. This coordination, however, is accomplished through the dual membership of three agencies (State, War and Navy Departments) on the two authorities and through the existence of a single secretariat serving both authorities.

Membership of the Coordinating Authorities

The Interdepartmental Intelligence Coordinating Authority (I.I.C.A.) will consist of the Secretary of State as Chairman, and of the Secretaries of War and the Navy. Many other departments and agencies, such as Commerce, Agriculture, Treasury, Interior, Labor, etc., have an important but specialized contribution to make to and an interest in the Government-wide foreign intelligence program. The departments designated, however, are the principal users and producers of foreign intelligence. In determining what membership would be most satisfactory, the relative advantage of including all departments of interest had to be weighed against the disadvantage of creating too large and unwieldy a top group. The interests of the departments other than State, War and Navy are provided for through representation on every Committee in which they have an interest. Thus, while the omission of many departments puts a special responsibility on the State Department to represent their interests adequately, it is suggested that the membership be limited to the three principal departments.

Membership of the Joint Chiefs of Staff is not considered necessary or appropriate since their interests and requirements are not distinct from but can be represented by the Secretaries of War and the Navy.

The Interdepartmental Security Coordinating Authority (I.S.C.A.) will consist of the Secretary of State as Chairman, and of the Secretary of the Treasury, the Secretary of War, the Attorney General, and the Secretary of the Navy. These represent the only departments with major responsibilities in that field, and other agencies having specialized interests may be adequately represented on the proposed specialized subcommittees.

Method of Operation

The functions envisaged for the coordinating Authorities are the formulation and execution of plans for coordinating all intelligence and security activities, and the conduct of certain centralized operations where the need exists. The procedures by which these functions would be performed are described in Annex II.⁷

Proposed Types of Centralized Operations

Centralized operations which have already been proposed include (1) the conduct of espionage and counterespionage activities and (2) the production of national intelligence estimates. Other types of operations which might later be given consideration as suitable to be conducted centrally are the production of topographic studies of specific areas and the maintenance of a central file of biographical records of foreign personalities.

The principle of centralized conduct of espionage and counterespionage activities should be approved, subject to the formulation of detailed organizational and operating plans by special Committees appointed by the intelligence and security Authorities respectively immediately upon their establishment. The difficulties, dangers and expense of such activities and the imperative need for utmost security regarding such activities require that they be strictly limited and carefully controlled by a central Authority. Moreover, their usefulness to all agencies charged with safeguarding the national security makes it inappropriate and undesirable for any single agency to undertake such activities. Apportionment of the responsibility for providing funds, personnel and facilities will also enhance the possibilities of maintaining security. Such apportionment of funds not specifically earmarked for this purpose is understood to be acceptable to the Bureau of the Budget.

It is further recommended that the Department of State oppose the establishment of an interdepartmental or independent agency for the production of national intelligence estimates. Intelligence estimates are useless if produced in a vacuum. They are useful only when they assist directly in the formulation of foreign policy, or the conduct of foreign affairs. Any intelligence agency producing estimates must therefore be a part of some body performing those functions. Only by such an integrated relationship can an intelligence agency keep abreast of our foreign objectives and affairs so that it may assist in their accomplishment and conduct. It has been suggested that a central agency producing national intelligence estimates could serve the President, the Secretaries of State, War and Navy and various interdepartmental groups dealing in foreign affairs. That suggestion overlooks the fact that the Secretary of State is principally responsible for advising and assisting the President in the field of foreign affairs and for coordinating the activities of all governmental agencies in that field. It is therefore appropriate that the Department of State assume the responsibility for the production of any national intelligence estimates, with the advice and assistance of other governmental agencies. Each Secretary should and will inevitably continue to look to his own intelligence agency despite the existence of a central agency.

It is recommended that, in lieu of such a central agency, the projected Special Estimates Staff of the Special Assistant for Research and Intelligence undertake the production of any national intelligence estimates required by the President, the Secretary of State and other top-level or supra-departmental officials and agencies of the Government. For that purpose, the Secretaries of War and Navy should be invited to detail full-time representatives from air, ground and naval intelligence to each of the four geographic sections of that staff. Representation from other agencies, such as Treasury, Commerce, Labor, et cetera, should be invited as the need arises. In the event of disagreement within that reinforced staff, the heads of the interested agencies should attempt to reconcile such differences through consultation. Should that prove impossible, the nature of the disagreement should be clearly stated in the final estimate.

It is also proposed that the Special Estimates Staff in the Department of State, with the assistance of an adequate number of representatives from the War and Navy Departments, shall assume responsibility for preparing weekly political reports of the type that are now produced independently, and with much duplication of effort, by units in the State Department, the Military Intelligence Service and the Office of Naval Intelligence. In that manner a central reporting organization can be achieved and such organization can be given any other reporting functions of an interdepartmental character which it can perform with advantage.

0. Source: National Archives and Records Administration, RG 353, Records of Interdepartmental and Intradepartmental Committees—State Department, Lot File No. 122, Records of the Secretary’s Staff Committee 1944–47. Secret. The Secretary’s Staff Committee, organized in 1944 by Secretary of State Stettinius to formulate and coordinate Departmental policy, included as members the Secretary, the Under Secretary, and the Assistant Secretaries as well as selected other officers. There is no drafting information on the source text, but it is the “McCormack Plan” for national intelligence organization as distinct from the “McCormack Plan” for the Department of State’s own internal intelligence organization.
1. Annex I is in the Supplement.
2. Document 17.
3. See Document 38 and footnote 2 thereto.
4. Apparent reference to the chapter on intelligence in the Eberstadt Report.
5. The plans by the Director of Censorship and the Librarian of Congress have not been found.
6. Document 42.
7. Annex II, Program of Operations for the Interdepartment Intelligence Coordinating Authority and the Interdepartmental Security Coordinating Authority, and Annex III, Comparison of Plans for Coordinated or Centralized Intelligence, November 19, are in the Supplement. Annex V is Document 49; Annex VI is Document 56; regarding Annex IV, See footnote 6, Document 50.