Foreign Relations of the United States, 1950–1955, The Intelligence Community, 1950–1955

210. Memorandum From the Director of the Bureau of the Budget (Hughes) to President Eisenhower¹

Washington, March 3, 1955.

SUBJECT

• Coordination of Economic, Psychological, Political Warfare, and Foreign Information Activities (NSC Actions Nos. 1183² and 1197)³

1. When you assigned this study to the Bureau of the Budget, you indicated that its primary purpose should be to answer two questions: (1) What is the present status of this work and how are responsibilities placed, and (2) What were my recommendations for improving planning methods and effectiveness?

2. On November 23, 1954,⁴ I reported to you on the first question by supplying you with (1) a chart and narrative description indicating the functions of agencies involved, committee memberships, etc., which were found to be in existence at the time our study was launched, and (2) a summary of the principal problems raised by the organization as it then existed. Copies of those papers, together with a copy of my memorandum of transmittal to you, have been supplied to the members of the National Security Council and to the Secretary of the Treasury, the Director of Central Intelligence, and the Chairman, Joint Chiefs of Staff.⁵

3. The results of this study have been reviewed by a group consisting of Presidential Assistants Cutler and Rockefeller, Under Secretary of State Hoover,⁶ Deputy Secretary of Defense Anderson, Director of Central Intelligence Dulles, and former Under Secretary of State Smith.⁷ The recommendations contained in this memorandum are based upon their advice and have their concurrence.

4. Two closely related organizational studies were conducted concurrently with our review. One was the study of our information activities made for you by Mr. William H. Jackson.⁸ The other was the study conducted by Mr. Joseph M. Dodge of executive branch organization for planning and coordinating foreign economic policy.⁹ This latter study was conducted in close cooperation with the Bureau of the Budget and with your Advisory Committee on Government Organization.

5. At your request, the Budget Bureau and the Advisory Committee on Government Organization are currently working with Mr. Stassen and Mr. Dodge to develop for your consideration a pattern of organization for the conduct of foreign assistance programs. This matter is scheduled to be disposed of soon as it involves basic considerations which must affect your request in the near future to the Congress for authority to carry on foreign aid programs in fiscal year 1956 and subsequent years.

6. In addition, the following recent decisions have been made which affect the subject matter of this report:

a. The appointment of Mr. Dodge as Special Assistant to the President for foreign economic affairs and the establishment of the Council on Foreign Economic Policy.

b. The appointment of Mr. Nelson Rockefeller as Special Assistant to the President to provide leadership on your behalf in the development of increased understanding and cooperation among all peoples and in reviewing and developing methods and programs by which the various departments and agencies of the Government may effectively contribute to such cooperation and understanding.

c. The assignment to a Special Committee chaired by Mr. Rockefeller of responsibility for coordinating the implementation of the policies contained in NSC 5505/1¹⁰ and NSC 5502/1.¹¹

7. In addition to placing into effect the above-mentioned reorganizations, I should like to recommend further proposals for improving planning methods and effectiveness in the area which you requested us to study.

Organization in Connection with Planning Coordination

A. The Present Situation

1. In making recommendations for improving planning methods and coordination of economic, psychological, political warfare and foreign information activities, and their relation to the military program, certain existing responsibilities have been kept clearly in mind.

a. The NSC Planning Board, utilizing the resources and staffs of the component agencies (assisted by a small NSC staff), is responsible for developing recommendations for national security policy for consideration by the NSC and transmittal to the President. Neither the NSC nor its Planning Board has any responsibility for developing operating programs under approved national security policy.

b. When the President has approved a national security policy, recommended by the NSC, the agencies of Government which have functions germane to its execution are responsible to him for devising plans and taking actions to carry such policy into effect.

c. The Operations Coordinating Board has two major responsibilities:

(1) Whenever the President directs, as to an approved national security policy, the OCB shall (a) advise with the operating agencies concerned as to the coordination of the interdepartmental aspects of the detailed operational plans developed by such agencies to carry out such policy and as to the timely and coordinated execution of such operational plans, and (b) initiate proposals for action within the framework of national security policies in response to opportunity and changes in the situation. The operating agencies concerned have the responsibility for developing and carrying out their respective programs under approved national security policies or other approved policies transmitted by the President to OCB.

(2) Under NSC 5412,¹² the Central Intelligence Agency’s charter for covert operations, the members of OCB are advised in advance of major programs involving covert operations relating to policies and the OCB is the normal channel for securing coordination of support for covert work among the Departments of State and Defense and the CIA. Later in this paper it is recommended that NSC 5412 be amended to remove any conflict with the functions assigned to the Special Committee referred to in d. below and with the duties recommended below to be given to the Planning Coordination Group.

d. As indicated above, the President recently approved the establishment of a Special Committee under the Chairmanship of Special Assistant Nelson Rockefeller to coordinate the implementation of policies contained in NSC 5502/1 and NSC 5505/1. Besides the Special Assistant as Chairman, this Special Committee is composed of the Under Secretary of State, the Deputy Secretary of Defense, and the Director of Central Intelligence, (each of whom may be represented in day-to-day operations by deputies appointed by them), with participation as appropriate of representatives of the Department of Justice, the Foreign Operations Administration, the U.S. Information Agency, and other interested departments and agencies. The duties of this Special Committee include reviewing current programs and developing new programs to carry out the above-mentioned national security policies, ensuring coordination of actions taken thereunder, and making evaluative progress reports to the President through the National Security Council. This Special Committee mechanism was established in this connection because of need for high-level, restricted attention to developing the sensitive programs, and the coordination of actions thereunder, called for by the above-mentioned national security policies.

e. At present, except for operations exclusively covert, the OCB, through working committees representative of the responsible agencies, coordinates the implementation of the plans and programs proposed by such agencies to carry out approved policies. In the case of covert operations, other than under NSC 5502/1 and NSC 5505/1, such coordination is effected through direct liaison between the CIA and the Departments of State and Defense and other departments and agencies as well as through the members of the OCB as prescribed in NSC 5412.

B. Proposals

1. As stated above, the working up of plans and programs to implement national security policies rests with the agencies primarily responsible therefor. But there is a continuing need in Government to infuse in such plans and programs dynamic, new and imaginative ideas, to diagnose precisely how best to meet the over-all problems of a given country or area, to bring into balance all aspects of a problem and all resources available to solve it, to find ways effectively to utilize U.S. private organizations and foreign individuals and groups and foreign public and private organizations. The promotion of such imaginative planning, based on the best intelligence obtainable, should materially aid in coordinating economic, psychological, political warfare, and foreign information activities so as to further international cooperation and understanding, to reduce the Communist threat, to strengthen friendly ties with the U.S., to promote the freedom, well being, and dignity of the individual man, and to improve the world climate of opinion.

2. It is believed that a small, high-level group should be given responsibility for meeting the need just referred to. This group would aid in developing planning in both overt and covert fields.

3. To accomplish this objective, it is recommended as follows:

a.13 The above-mentioned Special Committee, consisting of the Special Assistant, Mr. Rockefeller, the Under Secretary of State, the Deputy Secretary of Defense, the Director of Central Intelligence (plus representation from other agencies when appropriate), established to coordinate the implementation of policies under NSC 5502/1 and 5505/1 should be reestablished, within the framework of OCB, where it might be designated as the Planning Coordination Group. This body would be a special grouping of OCB members chaired by Mr. Rockefeller and reporting directly to the Chairman of OCB. It would have such small staff as might be convenient to its special purpose, including the duties assigned to it under c. below. Such staff, while distinct from the OCB staff, could call upon OCB for housekeeping services and other administrative assistance. The Chairman of OCB will, from time to time, transmit progress reports of the Planning Coordination Group to the President through the National Security Council.

b. The Special Assistant, Mr. Rockefeller, should be designated a member of the OCB under Section 1 (b) (5) of Executive Order No. 10,483¹⁴ and should also be designated vice chairman of the Board.

c. The Planning Coordination Group, with reference to overt and covert actions to implement those national security policies appropriate to its functions, including those assigned to OCB for coordination, should advise and assist the responsible operating agencies in the coordinated development of plans and programs to carry out such national security policies. The implementation of such plans and programs, with respect to overt actions, will be coordinated by the Operations Coordinating Board. In addition, the Planning Coordination Group should hereafter be advised in advance of major covert programs initiated by the Central Intelligence Agency under NSC 5412 or as otherwise directed, and should be the normal channel for giving policy approval for such programs as well as for securing coordination of support therefor among the Departments of State and Defense and the Central Intelligence Agency. With reference to NSC 5502/1 and NSC 5505/1: the necessary action should be taken to revise NSC Action No. 1314–d, January 27, 1955,¹⁵ to substitute the Planning Coordination Group for the above mentioned Special Committee and to bring the resulting arrangement into conformity with the foregoing provisions of this paragraph.

d. The Planning Coordination Group should keep close and continuing contact with the work of the Operations Coordinating Board. The Planning Coordination Group would not itself engage in operations or enter into the stream of agency operations.

e. Because action respecting covert operations should be restricted so far as possible to those who have a need to know and should be kept at a high level, it is recommended that NSC 5412 be amended so as to substitute therein the members of the Planning Coordination Group specifically mentioned in 3 a. above for the members of the OCB, and to bring the resulting arrangement into conformity with the foregoing provisions of 3 c. above.

f. The location of the Planning Coordination Group within the framework of OCB is in line with the basic principle of integration in national security policy formulation and implementation. The work to be done by this group can contribute greatly to the imaginative dynamic quality and the effectiveness of coordinated agency planning to carry out approved national security policies.¹⁶

Rowland Hughes

¹⁷

1. Source: National Archives, RG 59, S/S–NSC Files: Lot 66 D 148, Coordination of Psychological and other Warfare Activities. Secret. Sent on March 3 to members of the National Security Council for discussion at the March 10 NSC meeting. (Ibid.) In a February 7 memorandum, Comptroller of the Department of State, Isaac W. Carpenter, Jr., had informed Under Secretary of State Hoover that all Department of State Assistant Secretaries opposed the proposals and recommendations in this memorandum. (Ibid.) For example, Special Assistant for Intelligence and Research Armstrong opposed creation of the “Rockefeller Board” as duplicative in a February 3, memorandum to Carpenter. (National Archives, RG 59, INR Files: Lot 58 D 776, 1945–60, Box 2, Rockefeller Board) In a February 4 memorandum to Deputy Under Secretary of State for Administration Henderson, Max Bishop, Operations Coordinator, Office of the Under Secretary of State, also opposed the proposal as diluting the authority of the Operations Coordinating Board. (Ibid., Records of the Bureau of Administration: Lot 62 D 220, TS Records on Interagency Relations, 1948–61, OCB) Despite Department of State opposition, the President approved the proposal on March 10. See Foreign Relations, 1955–1957, vol. XIX, p. 62.
2. At its 207th meeting on July 22, 1954, the National Security Council, in NSC Action No. 1183, “Coordination of Economic Warfare Activities,” noted the President’s request that the Bureau of the Budget study and prepare recommendations for NSC consideration on placing responsibility within the Executive Branch for coordinating all U.S. economic warfare activities. The NSC later transmitted NSC Action No. 1183 to the Director of the Bureau of the Budget for implementation. (National Archives, RG 59, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
3. See Document 187 and footnote 7 thereto.
4. In the November 24, 1954, memorandum to the President, Hughes wrote that he would await the report on economic warfare then being prepared by Joseph M. Dodge, Special Assistant to the President for foreign economic affairs, before formally submitting the study requested by the President. Accompanying that memorandum were preliminary reports on the existing organization of the Executive Branch involved in the forward planning and coordination of economic, psychological, and political warfare, and information and a summary of the principal problems raised by that organization. (National Archives, RG 59, S/S–NSC Files: Lot 66 D 148, Coordination of Economic, Psychological and Political Warfare and Foreign Information Activities)
5. Enclosure to Memo for NSC from Executive Secretary, same subject, dated December 13, 1954. [Footnote in the original.]
6. On January 29, Hughes prepared a draft memorandum to respond to the President’s request for a study on the coordination of economic, psychological, and political warfare and foreign information activities. That draft was reviewed by officers in the Department of State. Commenting on the January 29 paper, Robert R. Bowie of S/P recommended to Acting Secretary of State Herbert Hoover, Jr., on February 4 that “every effort be made to head off the formation” of what he perceived as a potential cold war strategy board to be headed by Nelson Rockefeller. On February 14 Hughes sent a revised draft to Under Secretary of State Hoover, DCI Dulles, and Deputy Under Secretary of Defense Anderson. Presumably, the remarks appearing in this memorandum are in response to the revised draft of February 14. (National Archives, RG 59, S/S–NSC Files: Lot 66 D 148, Planning Coordination Group)
7. Walter Bedell Smith.
8. See Document 184.
9. Apparently this refers to a staff study prepared by Dodge in response to a July 12, 1954, request by President Eisenhower. On November 22, 1954, Dodge presented the President with the final draft of his report, entitled “The Development and Coordination of Foreign Economic Policy.” As a result of the Dodge study, the Council on Foreign Economic Policy was established, and on December 11, 1954, President Eisenhower appointed Dodge as the first chairman of that council. (“Organization, Procedures and Accomplishments of the Council on Foreign Economic Policy;” Eisenhower Library, Council on Foreign Economic Policy: Records, 1954–1961) The White House press release of December 11, 1954, announcing Dodge’s appointment is in Department of State Bulletin, December 27, 1954, pp. 987–988.
10. NSC 5505/1, “Exploitation of Soviet and European Satellite Vulnerabilities,” January 31, is printed in Foreign Relations, 1955–1957, vol. XXIV, pp. 20–22.
11. NSC 5502/1, “U.S. Policy Toward Russian Anti-Soviet Political Activities,” January 31, is printed ibid., pp. 12–19.
12. Document 171.
13. A note in the margin reads: “approved by the President March 4, 1955.”
14. Document 157.
15. NSC Action No. 1314–d, “Exploitation of Soviet and European Satellite Vulnerabilities,” was discussed at the 234th meeting of the National Security Council on January 27. The cited paragraph concerned the NSC recommendation that the President designate a special committee to be headed by Nelson A. Rockefeller to review programs to carry out policy stated in NSC 5505, “Exploitation of Soviet and European Satellite Vulnerabilities,” dated January 18. On March 10 at the 240th meeting of the National Security Council, the special committee was replaced by the Planning Coordination Group through an amendment to NSC Action No. 1314–d by NSC Action No. 1349, “Coordination of Economic, Psychological and Political Warfare and Foreign Information Activities.” (National Archives, RG 59, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council, 1955)
16. On March 10 President Eisenhower designated Rockefeller a member of the Operations Coordinating Board and the OCB Vice Chairman. The President also asked Rockefeller to serve as chairman of the Planning Coordination Group. (Eisenhower Library, Whitman File, Administration Series, Rockefeller, Nelson, 1952–1955) At its 240th meeting that same day, the National Security Council noted that the President had signed the March 10 letter requesting Rockefeller to assume the responsibilities. The NSC then approved the recommended amendments to NSC 5412. (Eisenhower Library, Whitman File, NSC Meetings, 1955) See Document 212.
17. Printed from a copy that indicates Hughes signed the original.