18. Memorandum From G.E. Ramsey, Jr., of the Bureau of the Budget Staff to the Assistant Director for Estimates of the Bureau of the Budget (Martin)0


  • Disposition of OSS

Schwarzwalder, Cooper and I spent the better part of Saturday morning1 with General Donovan and his top staff discussing problems incident to the disposition of OSS.

Donovan and his staff had read into the executive order2 the abolishment of all of the positions that were organizationally associated with the Director’s office and had concluded that their connections with the outfit would terminate October 1. Our assurance that the order only related to the legal entity of the Office of the Director and not to individual positions, except that of the Director, was not too reassuring. We are taking steps to get a further clarification of this as it would be undesirable for all of the key people to leave on October 1.

It is entirely possible that Donovan’s interpretation of the order was for the purpose of introducing a confusing issue at the opening of our discussion as he makes it abundantly clear that, in his opinion, the order is a mistake and that the Director of the Bureau of the Budget has made a decision without full knowledge of the facts involved. Although he says that he has talked to Snyder and Rosenman about the intelligence problem it is evident that he fixes the responsibility of the recent executive order on the Bureau.

He states that the termination date of October 1 is evidence of our lack of understanding of the real problems involved. With respect to the date he has a point. Aside from the short time allowed for taking care of the actual mechanics of the switch there is much to be said in giving Donovan an opportunity to remove certain individuals who have been working under special “cover” arranged by Donovan. There appear to be several other human relation problems incident to demobilization of some of the units which should be handled with care. Through an oversight the effective date of the Executive Order was not changed as the issuance of the order was delayed and instead of allowing from three to [Page 52] four weeks for the transfer as the earlier drafts would have done the order as issued allowed only ten days. Since we still have (at 9 a.m., September 24) to establish or firm up the points of contact in the State and War Departments for taking over the parts of OSS to be transferred our problem is further aggravated. Lawton has suggested that the War Department might continue Donovan in charge of the part of OSS transferred to it for an interim period and this seems to be a desirable thing to do notwithstanding the fact that Donovan will continue to agitate for a centralized intelligence agency.

Lawton’s reaction was passed to Don Stone yesterday and Don expects to discuss this problem further with McCloy this morning and perhaps suggest that Donovan or General Magruder, Donovan’s assistant, be continued to give continuity.

It is equally important to announce the appointment of the person who is to handle the parts to be transferred to the State Department. Unless these two areas are clarified promptly it would seem highly desirable to extend the termination date of OSS to at least October 15.

  1. Source: National Archives and Records Administration, RG 51, Records of the Office of Management and Budget, Director’s Files, Series 39.27, Intelligence. No classification marking.
  2. September 22.
  3. E.O. 9621 of September 20; Document 14.