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Foreign Relations of the United States 1945-1950 Emergence of the Intelligence Establishment Department of State Washington, DC

Founding of the National Intelligence Structure
August 1945 through January 1946

                           

10. Memorandum From the Director's Assistant (Tamm) to the Director of the Federal Bureau of Investigation (Hoover)

Washington, September 17, 1945.

//Source: National Archives and Records Administration, RG 263, Records of the Central Intelligence Agency, Troy Papers, Box 8, Folder 15. No classification marking.

Pursuant to your instructions I called upon Mr. Tom Clark on Thursday evening, September 13th and advised him that you had received information from a confidential but thoroughly reliable source indicating that the President allegedly had expressed the opinion that the FBI should act only as a domestic agency. Mr. Clark was informed that according to your source of information, Colonel Frank McCarthy at the State Department had indicated to Dean Acheson that he, McCarthy, had received information from the Bureau of the Budget with reference to the SIS program that the President has "definitely expressed in positive terms" his views that the FBI should be only a domestic agency. Mr. Clark was informed that McCarthy received his information from the Bureau of the Budget and that he had asked Don Stone to furnish more details concerning the President's statement. In view of this fact, McCarthy had suggested to Acheson that any action on Mr. Clark's letters/1/ concerning the State Department's wishes with reference to SIS be held in abeyance until the first of the week.

/1/Not found.

While I was talking to Mr. Clark, Dean Acheson called him from the State Department and Clark asked Acheson when he was going to receive an answer to his letters about SIS and Acheson stated "in a few days, that Colonel McCarthy was looking into the matter".

Mr. Clark stated that he would personally speak to the President about the SIS situation on Monday.

11. Memorandum From Arnold Miles of the Bureau of the Budget Staff to the Assistant Director for Administrative Management of the Bureau of the Budget (Stone)

Washington, September 19, 1945.

//Source: National Archives and Records Administration, RG 51, Records of the Office of Management and Budget, Director's File, Series 39.27, Intelligence. No classification marking.

Problem

The need to decide what funds should be allotted to the FBI for the continuation of their secret activities abroad, requires a consideration of the following:

1. Should the Secret Intelligence Service organized by the FBI in the Western Hemisphere be continued?

2. Should it be extended into Europe?

3. Does the FBI have any foreign role, or, in a broader sense, what are our needs for the special category of security or counter intelligence?

Facts Bearing on the Problem

The Secret Intelligence Service in the Western Hemisphere was officially set up by the FBI as a result of action by the President immediately following Pearl Harbor, which confirmed steps already taken (the FBI had begun to conduct secret activities in South and Central America prior to this). This action had been recommended to the President by the Interdepartmental Intelligence Committee composed of G-2, ONI and FBI. Initial approval by the Interdepartmental Intelligence Committee followed discussions of the need to expand coverage in the security intelligence (counter intelligence) field. Almost from the beginning, however, the minutes of the Interdepartmental Intelligence Committee reflected discontent on the part of the G-2 and ONI representatives toward the expansion of the SIS into reporting of intelligence on a broad scale.

The SIS, however, has been highly useful especially in connection with the desire to ferret out Nazi, and to some extent Japanese, infiltration into the Western Hemisphere. Annually, at budget time, the program has been strongly endorsed by those officials in the State Department directly concerned with the use of FBI material (visa and passport control, safehaven, alien exclusion and internment, etc.).

Other than the initial decision by the President immediately following Pearl Harbor, however, the broad policy question involved in the maintenance of an operation of this character in neutral and friendly territories has never been thoroughly discussed. It should be pointed out though, that there is no instance known to us, in which the SIS has caused any official embarrassment with the countries involved.

Discussion

It is important that any decision which will be made in regard to the FBI be consistent with a program for the Government as a whole on which the Bureau has been working.

The Bureau has advocated the creation of two separate systems of operation in the field of intelligence, one dealing with foreign intelligence in a broad means including economic, political and other basic forms of intelligence; the other dealing with security intelligence and security programs to the countering of unfriendly, or hostile activities of individuals, groups or movements.

These plans for the Government as a whole envision two top authoritative groups under the leadership of the State Department to coordinate operations in these two respective fields. One top group concerned with the coordination of operations in the whole field of basic intelligence would consist of the Secretaries of War, Navy, State, and Commerce. The other, concerned with the coordination of internal security and security intelligence operations would consist of the Secretaries of War, Navy, State, Treasury and Justice.

A foreign role for the FBI. Such security intelligence cannot be secured from domestic operations alone.

The postwar period will see a number of security operations which will be continued, and which should be serviced by the best and most efficient intelligence available:

1. The desire to include security checks in the process of issuing visas and passports will continue. This need will be serviced in one way or another. Similarly other operations such as the investigation of personnel employed in our important Foreign Service, and the furnishing of background information on individuals involved in business and international finance or other matters in which the State Department and Commerce Department will be involved, will require ready reference to this type of information. In spite of the obvious advantage of maintaining all available information of this type to service such needs in one place, this has been impossible to achieve under the present divided and competitive pattern.

2. In addition to the continuance of a considerable security intelligence operation, there is the need to continue security planning. Just as Byron Price pointed out, in connection with Censorship planning, that a small group would be needed to continue a nucleus operation, it will be necessary to maintain a skeleton operation in this whole field.

3. A further need for the continuance of services similar to those rendered by the FBI is that of assisting such agencies as the State Department, in insuring the maximum amount of security with respect to communications, records, personnel, etc. This last need is quite acute. Our Foreign Service has been notoriously loose. This has given top officers in the State Department considerable concern. Some provision to take care of this problem will undoubtedly be made in the State Department unless it can secure the service elsewhere.

4. Further a need exists for inclusion in the embassies abroad of such technicians to represent those Governmental operations which center in the FBI and to be concerned with normal police and Surete liaison on such questions as extradition and international crime in general.

The fulfillment of these operational requirements does not necessarily involve a decision as to whether secret or clandestine operations will be permitted. The activities listed above can be, if necessary, conducted completely in the open, although with greatly diminished effectiveness. In any event the job will only be properly done if utilization is made of the skills, records and domestic organization available in the FBI.

There is thus a need for security attaches abroad. The assignment of a security attache within a mission should conform to the pattern now in effect for the assignment of technical personnel from other Government agencies. Security attaches should be completely coordinated within the mission abroad. Their channel of communication should be through State Department facilities.

Secret activities. It is important to distinguish the two types of questions involved in the problem; one involving the continuance of secret and clandestine operations, the other involving the role of the FBI in general in the foreign field. To lump these questions into one would be to make the same mistake that has been fostered by General Donovan's insistence on lumping the question of the need for and role of a central agency with that of the continuance of secret intelligence.

The question of whether the FBI will continue a secret intelligence service, particularly one which will extend into Europe, should be viewed in the same light as we are viewing the question of a secret intelligence service for the Government as a whole. In other words, the high policy question as to whether this country should engage in any clandestine intelligence activities or not is still an open one.

Until such time as a decision is made on this point, the FBI should not be permitted to extend any secret activities into Europe. (A few personnel now in Europe on an individual case-by-case basis can be considered as coming outside this memo.) Further, it is recommended that should the FBI ever be assigned a role involving the use of secret or clandestine methods, that;

1. This role should be part of and carefully integrated with a broader secret intelligence service operating for the Government as a whole.

2. The FBI's operations should be confined to security intelligence.

The conclusion that continuation of secret intelligence activities in the postwar period is still an open question does not dispose of the problem of deciding what to do about the SIS which now actually exists in South America.

Liquidation or curtailment of this service should be viewed as a special problem. In a considerable number of instances, personnel involved cannot be abruptly withdrawn. In addition, it is undoubtedly true that for the balance of this fiscal year at least, the service will continue to be useful to programs now underway in the State Department. In South and Central America will be focused the principal remaining effort of the Nazis to maintain some cohesion and to conserve whatever they can for possible future rebirth. Our programs, particularly those under the general heading of Safehaven are designed to prevent this. Normal, open, Foreign Service reporting will not be sufficient to ferret out the kind of intelligence needed by the Safehaven programs under the complex arrangements that will have been made for cover. The detection and preventions of this type of planned infiltration will continue to require covert methods.

Funds should, therefore, be granted to continue the Service on a curtailing basis for the balance of this fiscal year with the proviso, however, that it should be subject to such directives as may subsequently be issued by any interdepartmental machinery created by the President in this field.

Recommendations

1. That sufficient funds be allotted FBI to continue the SIS in the Western Hemisphere on a curtailing basis for the balance of the present fiscal year.

2. That a proviso be entered that the SIS in the Western Hemisphere will be subject to continuous review and to such directives as may subsequently be issued by the State Department or by any interdepartmental coordinating group organized in the field of security and security intelligence.

3. That the question of the extension of the SIS into other areas than the Western Hemisphere be postponed until:

a. A decision is made as a matter of high policy that this country will engage in secret or clandestine intelligence operations in the postwar period.

b. Interdepartmental machinery for planning the precise way in which the FBI in a role limited to security intelligence can integrate its operations with those of a secret intelligence operation for the Government as a whole covering the whole intelligence field.

4. That a plan for the assignment of security attaches as required by the State Department in areas other than South America be discussed with State and FBI with the proviso that:

a. The appointment of security attaches under an agreed upon plan consistent with Governmental policy in the assignment of technical personnel abroad.

b. The security attaches will not engage in any clandestine or secret operations except as authorized on a case-by-case basis by the Chief of Mission pending the development of a Government-wide plan of operation in this field.

c. That the security attaché be an integral part of the mission and his channel of communication be to the State Department.

A.M./1/

/1/Printed from a copy that bears these typed initials.

12. Memorandum From the Secretary of the Navy's Special Assistant (Correa) to Secretary of the Navy Forrestal

Washington, September 19, 1945.

//Source: National Archives and Records Administration, RG 80, General Records of the Department of the Navy, Records of Secretary of the Navy James Forrestal 1940-1947, General Correspondence 1944-1947, 80-1-19, Box 129. No classification marking.

Annexed hereto JCS Papers 1181/1, 1181/4 and 1181/5./1/ These all relate to the problem of a single central intelligence agency. You have asked me to give you my views on this. I am not in a position to do that as yet as I wish to give the matter further consideration and particularly to obtain the views of people with experience in this field such as J. Edgar Hoover.

/1/These JCS papers are not attached. The first two papers, 1181/1 and 1181/4, have not been found. For text of 1181/5, see the appendix to Document 13.

To the extent I have gone in my thinking, however, it seems to me that the draft directive (red tab) which is a part of JCS 1181/5 most nearly approximates what I would regard as the optimum organization.

In my own approach of the problem the following propositions seem to me basic:

1. There is definite need for centralization of intelligence gathered by all of the various departments and agencies of this Government and for coordination of the activities of those engaged in gathering this information.

2. Any central authority or agency set up should have the primary function of coordination rather than operation in the intelligence field.

3. It should be recognized that while in time of war action to be taken upon intelligence obtained by this government is the primary responsibility of the armed forces, in time of peace the taking of appropriate action is the primary responsibility of the State Department and subject to the State Department's direction on national policy of other civilian arms of the Government, having in mind particularly those departments and agencies which are charged with responsibility for economic dealings with other nations.

These thoughts are by no means complete nor do they represent as exhaustive an analysis of the problem as I should like to present.

MFC

13. Memorandum From the Joint Chiefs of Staff to Secretary of War Stimson and Secretary of the Navy Forrestal

Washington, September 19, 1945.

//Source: National Archives and Records Administration, RG 80, General Records of the Department of the Navy, SecNav/CNO Top Secret Correspondence File 1945, A8, Box 21, Folder A8. Top Secret. Also reproduced in CIA Cold War Records: The CIA under Harry Truman, pp. 8-10.

SUBJECT
Establishment of a central intelligence service upon liquidation of OSS

The Joint Chiefs of Staff request that the Secretary of War and the Secretary of the Navy forward the attached memorandum to the President.

For the Joint Chiefs of Staff:
William D. Leahy
Fleet Admiral, U.S. Navy
Chief of Staff to the
Commander in Chief of the Army and Navy

Enclosure/1/

/1/Top Secret. Despite the Joint Chiefs' request, this memorandum was not directly transmitted to the President. In a September 29 memorandum (Document 20), Patterson (who had succeeded Stimson as Secretary of War) and Forrestal told Byrnes that in view of Executive Order 9621 of September 20 (Document 14), they had decided to transmit the JCS recommendations to the Secretary of State on the assumption that he would send them to the President. There is no record, however, that the Department of State did so.

Memorandum From Secretary of War Stimson and Secretary of the Navy Forrestal to President Truman

Washington, undated.

A memorandum from the Director of Strategic Services on the establishment of a central intelligence service was referred to the Joint Chiefs of Staff on 22 November 1944/2/ for their comment and recommendation. The matter received careful study and consideration at that time and the Joint Chiefs of Staff were prepared to recommend, when opportune, the establishment of such an agency in three steps, namely:

/2/A reference to Donovan's November 18, 1944, memorandum to President Roosevelt; see Troy, Donovan and the CIA, pp. 445-447.

1. An Executive Order setting up a National Intelligence Authority, (composed of the Secretaries of State, War and the Navy, and a representative of the Joint Chiefs of Staff), a Director of the Central Intelligence Agency (appointed by the President), and an Intelligence Advisory Board (heads of the principal military and civilian intelligence agencies).

2. Preparation and submission to the President by the above group of a basic organizational plan for establishing the complete intelligence system.

3. Establishing of this intelligence system by Presidential directive and legislative action as appropriate.

Since their first studies, the Joint Chiefs of Staff have had referred to them a letter from the Director of Strategic Services to the Director, Bureau of the Budget, dated 25 August 1945, renewing his proposals on the subject. Meanwhile, the cessation of hostilities, certain undecided questions regarding the future organization of the military establishment, and the development of new weapons present new factors which require consideration.

The end of hostilities has tended to emphasize the importance of proceeding without further delay to set up a central intelligence system.

The unsettled question as to post-war military organization does not materially affect the matter, and certainly warrants no further delay since a central intelligence agency can be fitted to whatever organization or establishments are decided upon.

Recent developments in the field of new weapons have advanced the question of an efficient intelligence service to a position of importance, vital to the security of the nation in a degree never attained and never contemplated in the past. It is now entirely possible that failure to provide such a system might bring national disaster.

The Joint Chiefs of Staff recognize, as does the Director of Strategic Services, the desirability of:

a. Further coordination of intelligence activities related to the national security;

b. The unification of such activities of common concern as can be more efficiently conducted by a common agency; and

c. The synthesis of departmental intelligence on the strategic and national policy level.

They consider that these three functions may well be more effectively carried on in a common intelligence agency, provided that suitable conditions of responsibility to the departments primarily concerned with national security are maintained. They believe, however, that the specific proposals made by the Director of Strategic Services are open to serious objection in that, without adequate compensating advantages, they would over-centralize the national intelligence service and place it at such a high level that it would control the operations of departmental intelligence agencies without responsibility, either individually or collectively, to the heads of the departments concerned.

In view of the above, the Joint Chiefs of Staff append hereto an alternative draft directive, which they believe retains the merits of General Donovan's proposals, while obviating the objection thereto.

The success of the proposed organization will depend largely on the Director of the Central Intelligence Agency. In the opinion of the Joint Chiefs of Staff, he should have considerable permanence in office, and to that end should be either a specially qualified civilian or an Army or Navy officer of appropriate background and experience who can be assigned for the requisite period of time. It is considered absolutely essential, particularly in the case of the first director, that he be in a position to exercise impartial judgment in the many difficult problems of organization and cooperation which must be solved before an effective working organization can be established.

Appendix/3/

/3/Top Secret. This draft is identical to JCS paper 1181/5. For the drafting history and the text, see ibid., pp. 297-301 and 459-460.

Draft Directive Regarding the Coordination of Intelligence Activities

In order to provide for the development and coordination of intelligence activities related to the national security:

1. A National Intelligence Authority composed of the Secretaries of State, War and the Navy, and a representative of the Joint Chiefs of Staff is hereby established and charged with responsibility for such over-all intelligence planning and development, and such inspection and coordination of all Federal intelligence activities, as to assure the most effective accomplishment of the intelligence mission related to the national security.

2. To assist it in that task the National Intelligence Authority shall establish a Central Intelligence Agency headed by a Director who shall be appointed or removed by the President on the recommendation of the National Intelligence Authority. The Director of the Central Intelligence Agency shall be responsible to the National Intelligence Authority and shall sit as a non-voting member thereof.

3. The Director of the Central Intelligence Agency shall be advised by an Intelligence Advisory Board consisting of the heads of the principal military and civilian intelligence agencies having functions related to the national security, as determined by the National Intelligence Authority.

4. The first duty of the National Intelligence Authority, assisted by the Director of the Central Intelligence Agency and the Intelligence Advisory Board, shall be to prepare and submit to the President for his approval a basic organizational plan for implementing this directive in accordance with the concept set forth in the following paragraphs. This plan should include drafts of all necessary legislation.

5. Subject to the direction and control of the National Intelligence Authority, the Central Intelligence Agency shall:

a. Accomplish the synthesis of departmental intelligence relating to the national security and the appropriate dissemination within the government of the resulting strategic and national policy intelligence.

b. Plan for the coordination of the activities of all intelligence agencies of the government having functions related to the national security, and recommend to the National Intelligence Authority the establishment of such over-all policies and objectives as will assure the most effective accomplishment of the national intelligence mission.

c. Perform, for the benefit of departmental intelligence agencies, such services of common concern as the National Intelligence Authority determines can be more efficiently accomplished by a common agency, including the direct procurement of intelligence.

d. Perform such other functions and duties related to intelligence as the National Intelligence Authority may from time to time direct.

6. The Central Intelligence Agency shall have no police or law enforcement functions.

7. Subject to coordination by the National Intelligence Authority, the existing intelligence agencies of the government shall continue to collect, evaluate, synthesize, and disseminate departmental operating intelligence, herein defined as that intelligence required by the several departments and independent agencies for the performance of their proper functions. Such departmental operating intelligence as designated by the National Intelligence Authority shall be freely available to the Central Intelligence Agency for synthesis. As approved by the National Intelligence Authority, the operations of the departmental intelligence agencies shall be open to inspection by the Central Intelligence Agency in connection with its planning function. In the interpretation of this paragraph, the National Intelligence Authority and the Central Intelligence Agency will be responsible for fully protecting intelligence sources and methods which, due to their nature, have a direct and highly important bearing on military operations.

8. Funds for the National Intelligence Authority shall be provided by the departments participating in the National Intelligence Authority in amount and proportions to be agreed upon by the members of the Authority. Within the limits of the funds made available to him, the Director of the Central Intelligence Agency may employ necessary personnel and make provision for necessary supplies, facilities, and serv-ices. With the approval of the National Intelligence Authority, he may call upon departments and independent agencies to furnish such specialists as may be required for supervisory and functional positions in the Central Intelligence Agency, including the assignment of military and naval personnel.

14. Executive Order 9621

Washington, September 20, 1945.

//Source: National Archives and Records Administration, RG 51, Records of the Office of Management and Budget, Series 39.19, OSS Organization and Function. The source text is labeled "immediate release." Also printed in 3 CFR 431-432. Smith's account of the signing by the President is in the Roosevelt Library, Papers of Harold Smith, Box 4, Conferences with the President 1945, September 20, 1945. See the Supplement.

TERMINATION OF THE OFFICE OF STRATEGIC SERVICES
AND DISPOSITION OF ITS FUNCTIONS

By virtue of the authority vested in me by the Constitution and Statutes, including Title I of the First War Powers Act, 1941, and as President of the United States and Commander in Chief of the Army and the Navy, it is hereby ordered as follows:

1. There are transferred to and consolidated in an Interim Research and Intelligence Service, which is hereby established in the Department of State, (a) the functions of the Research and Analysis Branch and of the Presentation Branch of the Office of Strategic Services (provided for by the Military Order of June 13, 1942), excluding such functions performed within the countries of Germany and Austria, and (b) those other functions of the Office of Strategic Services (hereinafter referred to as the Office) which relate to the functions of the said Branches transferred by this paragraph. The functions of the Director of Strategic Services and of the United States Joint Chiefs of Staff, relating to the functions transferred to the Service by this paragraph, are transferred to the Secretary of State. The personnel, property, and records of the said Branches, except such thereof as is located in Germany and Austria, and so much of the other personnel, property, and records of the Office and of the funds of the Office as the Director of the Bureau of the Budget shall determine to relate primarily to the functions transferred by this paragraph, are transferred to the said Service. Military personnel now on duty in connection with the activities transferred by this paragraph may, subject to applicable law and to the extent mutually agreeable to the Secretary of State and to the Secretary of War or the Secretary of the Navy, as the case may be, continue on such duty in the Department of State.

2. The Interim Research and Intelligence Service shall be abolished as of the close of business December 31, 1945, and the Secretary of State shall provide for winding up its affairs. Pending such abolition, (a) the Secretary of State may transfer from the said Service to such agencies of the Department of State as he shall designate any function of the Service, (b) the Secretary may curtail the activities carried on by the Service, (c) the head of the Service, who shall be designated by the Secretary, shall be responsible to the Secretary or to such other officer of the Department of State as the Secretary shall direct, and (d) the Service shall, except as otherwise provided in this order, be administered as an organizational entity in the Department of State.

3. All functions of the Office not transferred by paragraph 1 of this order, together with all personnel, records, property, and funds of the Office not so transferred, are transferred to the Department of War; and the Office, including the Office of the Director of Strategic Services, is terminated. The functions of the Director of Strategic Services and of the United States Joint Chiefs of Staff, relating to the functions transferred by this paragraph, are transferred to the Secretary of War. Naval personnel on duty with the Office in connection with the activities transferred by this paragraph may, subject to applicable law and to the extent mutually agreeable to the Secretary of War and the Secretary of the Navy, continue on such duty in the Department of War. The Secretary of War shall, whenever he deems it compatible with the national interest, discontinue any activity transferred by this paragraph and wind up all affairs relating thereto.

4. Such further measures and dispositions as may be determined by the Director of the Bureau of the Budget to be necessary to effectuate the transfer or redistribution of functions provided for in this order shall be carried out in such manner as the Director may direct and by such agencies as he may designate.

5. All provisions of prior orders of the President which are in conflict with this order are amended accordingly.

6. This order shall, except as otherwise specifically provided, be effective as of the opening of business October 1, 1945.

Harry S. Truman/1/

/1/Printed from a copy that bears this typed signature. A signed copy is reproduced in CIA Cold War Records: The CIA under Harry Truman, pp. 11-13.

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