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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

                           

45. Minutes of Meeting

Washington, November 14, 1945, 10 a.m.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Decimal File 1945-49, 101.61/11-1445. Top Secret. No drafting information appears on the source text. Another copy is ibid., Diplomatic Branch Reference File, Minutes of the Committee of Three, 1944-1947.

MEETING OF THE SECRETARIES OF STATE, WAR AND NAVY

PRESENT
The Secretary of State

The Secretary of War accompanied by Robert A. Lovett, Assistant Secretary of War for Air and Colonel Charles W. McCarthy

The Secretary of the Navy accompanied by Major Correa

Mr. Matthews

Central Intelligence Agency

Mr. Forrestal said that there was only one matter that he wished to discuss, namely, the question of a Central Intelligence Agency and referred in this connection to the President's directive to Admiral Leahy./1/ Mr. Byrnes said that Admiral Leahy had not been aware of the fact that at present no law exists authorizing the establishment of a central intelligence organization and that, consequently, no definitive action can be taken until the Government reorganization law is passed. He expected that this might take place in two or three weeks. He would be glad, however, to consider the framework of the organization to be set up and thought we should take the several plans submitted into consideration and try to integrate and reconcile them. Mr. Patterson said that Mr. Lovett had been devoting a great deal of time to the study of the problem and he would like to have him give an account of his conclusions.

/1/Document 44.

Mr. Lovett then circulated a summary of a report of his committee dated November 3, 1945 (copy attached as annex 1)./2/ He said that there are three aspects which his committee had covered: (1) the general survey; (2) the external problem; and (3) the internal problem within the War Department. He said his committee had called many people as witnesses including those who had worked on the British "ultra" and "Y" systems./3/ They had gone into all phases of espionage and clandestine work and he was convinced that it must be centralized. His committee reached the conclusion that a National Intelligence Authority and a Central Intelligence Agency should both be established as soon as possible. The former should be composed of the Secretaries of State, War and Navy and a representative of the Joint Chiefs of Staff. It should be empowered to formulate policies which would be binding upon the Central Intelligence Agency and all intelligence activities of other Government departments. The Central Intelligence Agency would be headed by a Director to be appointed or removed by the President on recommendation of the National Intelligence Authority. Within the Central Intelligence Agency, he said, there should be constituted a "reading panel" or Intelligence Board on which, in addition to the War, Navy and Air Staffs, the principal civilian intelligence agencies would be represented. This board would be expected to study and evaluate intelligence facts and its reports would represent the combined views of the members. Where a difference of opinion existed, however, the report would likewise contain the dissident views. This Mr. Lovett thought was an important aspect and he believed the failure of the German Intelligence Service to permit a presentation of dissenting views was largely responsible for its breakdown. The British service, he felt, was greatly superior. In the first place it possessed continuity and the technical composition of the British Intelligence Service permitted it to divorce the factual aspects of their findings from political creed. He pointed out that the four top German Intelligence Officers had been executed for political reasons. The result was that German Intelligence authorities were afraid to interpret facts which might be contrary to Nazi policy. A shining example of this was the failure of the German Intelligence Service to anticipate our North Africa landings and led them to express their conclusion that there was inadequate Allied shipping to support such an operation. When we send our people out, such as Ambassadors, with the outlook of our national policy we are bound to get reports which are colored to a certain extent. He said the Italian Intelligence Service was better and more factual than the German. At present he believes that we are in a better situation than the British, having more than a hundred good contact agents, and mentioned particularly our close intelligence relationships established during the war with Czechoslovakia and the Dutch. These contacts are, however, based on considerations of personal confidence and unless some decision is promptly reached on our future intelligence set-up, we are in danger of losing what we have built up.

/2/The summary of the Lovett Report, which was attached to the source text as Annex I, is in the Supplement.

/3/A reference to World War II communications intelligence.

Mr. Lovett said that an advantage of the system he proposed lay in the fact that conclusions would be reached not by one man but by a board thus avoiding the danger of having a single slanted view guide our policies. As an example of this danger, he pointed to the error of our intelligence service in predicting that Russia couldn't last six weeks. Furthermore, overt and special intelligence under his plan are fitted in with clandestine intelligence. Mr. Byrnes said that the Budget report/4/ on this question seemed to be very elaborate and he would not agree with it all through. One difficulty, he said, is that so much intelligence is accumulated that it cannot be read. Mr. Lovett said that intelligence is a very involved subject. It includes: (1) the collection of information, (2) the accurate interpretation of information, and (3) the proper dissemination of information. We must first reach the impartial view on the facts and then get the information where it is needed. Suspicion, distrust and jealousy seem to be the occupational diseases of anyone dealing with intelligence. They cancel out a lot that seems to be apparent. It is important that operations should be centralized. He cited the case where OSS agents in Lisbon stole a Japanese code which had long been in the possession of our G-2 cryptanalysts and thus "gummed up" the situation by causing the Japanese to change codes. Mr. Forrestal agreed that it is important that the policy aspect should not be so strong as to prejudice our intelligence evaluations. He remarked that Colonel Truman Smith/5/ had "his head cut off" because people here did not wish to believe that Germany was strong enough to accomplish what she did.

/4/See footnote 2, Document 38.

/5/U.S. Military Attache in Berlin, February 1935-March 1939.

Referring to the Budget Bureau's plan Mr. Lovett said that it was too loose and had too many aspects of a town meeting. Mr. Byrnes said that he did not like the joint commission it provided for which included, for example, the Department of Commerce. He, furthermore, did not like the emphasis on research and analysis to the degree it had been given. The Budget report, he said, pointed out that we had had to improvise during the war in many matters of industrial intelligence which should have been prepared long before. The plan was too elaborate, he felt, and too big. While it contemplated a Central Intelligence Agency it left operations in each separate Department. The argument against duplication still holds against the Budget Bureau proposal.

Mr. Lovett said that in his opinion the Budget project fails in three respects: (1) it provides for very loose coordination; (2) it provides for multiple collecting agencies which is bad in clandestine intelligence. Frequently they might operate against each other. There should, he feels, be only one operating agency dealing with espionage; (3) it treats the problem as though the Cabinet members were going to operate it. This in practice is impossible.

There was some discussion of the role of the FBI and there was general agreement that intelligence should be divorced from police powers. Mr. Lovett thought that when you put both in the hands of a single agency the result is a "gestapo." On the other hand, he felt, that the FBI should be on the reading panel because they have the best personality file in the world. Also, the FBI is expert on the production of false documents which we developed so successfully during the war and at which we became outstandingly adept.

Mr. Byrnes said that it was apparent that all were in favor of a central agency. He mentioned that the Budget report minimized the value of clandestine espionage and inquired as to the authorship of the report. Mr. Lovett said that he understood that it had been written by Mr. Donald Stone and Mr. Schwarzwolder. Mr. Byrnes and Mr. Patterson suggested the appointment of a working committee to get at the problem as quickly as possible since the existing organization is rapidly disintegrating and funds for certain units are available only until January 1. Mr. Byrnes appointed Mr. Russell and Mr. McCormack to represent the State Department and suggested that each Department have two representatives. Mr. Patterson appointed Mr. Lovett. (The second name given later was General George Brownell and Mr. Forrestal later named Rear Admiral Souers and Major Correa.)

Mr. Patterson inquired whether anyone knew of a good man for the important position of Director of Intelligence. Mr. Lovett said the only name he had heard mentioned was that of Allen Dulles who was generally regarded as highly competent in that field. He had organized the best job of the OSS in Switzerland.

46. Paper Prepared for the Secretary of State's Staff Committee

SC-172

Washington, November 15, 1945.

//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.

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.

/1/Annex I is in the Supplement.

(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.

/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.

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/

/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.

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.

47. Memorandum of Meeting

Washington, November 19, 1945, 3 p.m.

//Source: Central Intelligence Agency Historical Files, HS/HC-135. Top Secret. The date on the memorandum is October 19 but this presumably is an error as the meeting was held November 19. The meeting was held in the Department of State. The committee was the working group appointed by the Secretaries of State, War, and Navy at their November 14 meeting; see Document 45.

MEMORANDUM COVERING MEETING OF THEINTERDEPARTMENTAL COMMITTEE

PRESENT
Mr. Russell, Col. McCormack, Mr. Lovett, Brig. Gen. Brownell, Major Correa and the undersigned

1. After a general discussion it was obvious that representatives of Secretary of War and Navy on the one hand and representatives of Secretary of State were unable to make any progress in their negotiations until several fundamental differences could be clarified as follows:

(a) Col. McCormack construes the letter of 20 Sept. 1945 as a directive to the Secretary of State to take the lead in developing an interdepartmental intelligence program and putting the program in operation.

(b) Representatives of SecWar and SecNav interpret the letter as a directive to Sec State to take the lead in creating an interdepartmental group to formulate plans for the approval of the President.

(c) Col. McCormack favors a plan providing that the head or Executive Secretary of the coordinating authority be named by Secretary of State and that he be an employee of the State Department.

(d) Col. McCormack's plan provides further that in lieu of a Central agency responsible for producing national intelligence estimates, the Estimates Staff of the Special Assistant for Research and Intelligence be assigned the responsibility in collaboration with other interested agencies.

(e) Representatives of SecWar and Navy feel strongly that the head or Director of the C.I.A. should be named by the President upon the nomination of and responsible to the Secretaries of State, War and Navy and representatives of J.C.S. and that National Intelligence estimates should be produced by the C.I.A.

2. The meeting adjourned with the understanding that we would ask our respective Secretaries to instruct their representatives as to which concept should prevail. After decision is reached on the question of top control it is believed the committee can reconcile differences in connection with the formulation of a program for submission to the President.

S.W. Souers/1/
Rear Admiral, USNR

/1/Printed from a copy that bears this typed signature.

48. Minutes of the 168th Meeting of the Secretary of State's Staff Committee

Washington, November 20, 1945, 9:30 a.m.

//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. Top Secret. Drafted by James H. Lewis. The meeting was held in the Secretary's office.

PARTICIPANTS

Present
The Secretary (presiding)
The Under Secretary
The Counselor
Mr. Braden
Mr. Clayton
Mr. Hackworth
Mr. McCormack
Mr. Pasvolsky
Mr. Russell, Donald
Mr. Hiss, SPA
Mr. Kindleberger, GA (part of meeting)
Mr. Gange
Mr. Lewis
Mr. Rothwell

Absent
Mr. Benton
Mr. Dunn

[Here follows discussion of subjects unrelated to intelligence.]

(The Secretary left the meeting at this point.)

Development of a National Intelligence Program (Document SC-172, Agenda Item 4)

Mr. McCormack discussed document SC-172,/1/ making recommendations regarding the development of an interdepartmental intelligence program. He called attention to Annex III/2/ of the document in which a comparison was made between a plan which had been proposed by him, and one prepared in the War Department. He said the principal point of difference between the two plans was with respect to the position of the Department of State with relation to the proposed intelligence organization. Mr. McCormack said he understood that at the first interdepartmental meeting on the subject, it had been understood that the Department of State would take the lead in developing the intelligence program./3/ He said the Budget Bureau had agreed that whatever agency was given responsibility for the program should not have to go to Congress for appropriations and that the Executive Secretary of the Intelligence Coordinating Authority should be appointed by the Secretary of State. Mr. McCormack said the armed services were not too pleased with this latter proposal.

/1/Document 46.

/2/See footnote 7, Document 46.

/3/It is not clear to which meeting McCormack was referring.

Mr. Braden said that on the basis of his experience in Latin America, he felt strongly that the Department should direct and control foreign intelligence operations. He said that in Latin America the duplication of effort by Army and Navy attaches (and for a time by FBI representatives) had been very unfortunate. He said the training of military and naval people does not fit them for this kind of work and their functions should be limited to those of advisers in their own fields. The Counselor said he agreed that the intelligence service should not be under the control of the armed services. He said, however, that the criticism was sometimes made of other intelligence services (the British service during the Chamberlain regime, for example) that intelligence reporting was often colored to justify previously determined foreign policy. He asked what the answer was to this argument.

Mr. McCormack said the only solution was to have a sound research and analysis organization in Washington which would be able to detect this sort of reporting. The Counselor asked Mr. McCormack whether he envisaged a considerable amount of autonomy for the intelligence agency. In other words, he said, while parts of the agency would be located in the Department, it would not be part of any operating branch of the Department. Mr. McCormack said this was correct. He also said the intelligence service would have to have its own means of communication.

Mr. Braden said there was an immediate problem in connection with FBI personnel in Latin America. He said FBI representatives were shortly to be withdrawn from all Latin American countries, leaving us without any organization there for security intelligence. He said these officers had been very effective and had established a very valuable organization which should be retained if possible. Mr. McCormack said he understood the President had stated flatly that the FBI was not to operate outside the United States. Mr. McCormack said the only Department which had the funds to take over the FBI personnel was the War Department. He asked Mr. Braden to give him full information regarding the FBI personnel (including names of persons, locations, etc.) which he might use as a basis for opening discussions with the War Department regarding the matter.

Mr. McCormack also referred to the compilation of strategic estimates which had been prepared during the war for the President and other high officers. The principal agency for producing such estimates was the Joint Intelligence Committee on which were represented the State and War Departments, the Foreign Economic Administration, and the Office of Strategic Services. The Committee was related closely to the Joint Chiefs of Staff. The estimates prepared by the Joint Intelligence Committee varied greatly in value, depending on the accident of the choice of the person or agency to prepare them. In the Department of State, for example, no personnel was available to devote sufficient time to working on such estimates, and Mr. McCormack said he was now in the position, as Department of State member of the Joint Intelligence Committee, of having to inform the Committee, when a request was made for a report to be prepared in the Department, that personnel was not available for this work. He said the War Department plan places the responsibility for the preparation of such estimates in a joint agency and in his plan, the responsibility is placed in the Department of State. Mr. McCormack asked whether the Committee considered this to be the right approach. Mr. Braden said that on the basis of his Latin American experience, he felt that it was the right approach.

Mr. Pasvolsky said there appeared to be three problems involved: First, the problem of obtaining the information in the field; second, the problem of making sure that there is in Washington a place where all such information is available; and, third, the problem of making it available to all persons who need it. Mr. McCormack said he would agree with Mr. Pasvolsky if the second problem were restated to read "the problem of taking all incoming information and placing it into the proper form for use".

The Committee agreed that further consideration of the document should be deferred until the meeting of Tuesday, November 27th.

Next Meeting

The Committee agreed that the next meeting should be on Saturday, November 24th, for the purpose of disposing of the items remaining on the Agenda and any other items to be presented.

The meeting adjourned at 10:55.

49. Paper Prepared for the Secretary of State's Staff Committee

SC-172

Washington, November 26, 1945.

//Source: Truman Library, Papers of J. Anthony Panuch, State Department Research and Intelligence #1. Secret.

ANNEX V

RECONCILIATION OF PLANS FOR COORDINATIONOF FOREIGN INTELLIGENCE

This is an attempt to define and, if possible, to reduce the area of disagreement between the State Department and War Department plans for coordination of foreign intelligence./1/ There appear to be three problems:

/1/Documents 42 and 46.

a. What will be the composition of the top authority;

b. Whether the executive head of the central intelligence agency will be a State Department employee; and

c. Where the final responsibility for "strategic estimates" will reside.

Composition of Top Authority

The separation of the top directing organizations into two Authorities, one for Intelligence and one for Security, permits a clear line of distinction to be preserved between the two types of functions, and that is considered by some to be of advantage. However, the double-headed top organization is primarily a device for centralizing control of positive intelligence in State, War and Navy. Any other device that accomplished the same purpose, while bringing in on security matters the other Departments interested in security, would be equally acceptable.

The other point relates to the inclusion or exclusion of a representative of the Joint Chiefs of Staff. The State Department does not understand why such a representative should be included, since the interests of the Joint Chiefs of Staff can be represented adequately by War and Navy. Moreover, it is believed that such inclusion weights the Authority too heavily on the military side.

It is also believed that inclusion of a representative of the JCS changes the character of the Authority adversely, in that it ceases to be a Board of top policy officers who can bind their respective departments. Being only a representative, the JCS man would have to consult his principals on matters important enough to justify attention at the Cabinet level; and in practice this would probably mean that papers for the Authority would have to go through not only the internal machinery of the several departments but also the separate machinery of the Joint Chiefs of Staff.

A suggestion for resolving the differences as to the top Authority is to:

a. Omit the JCS representative;

b. Constitute the Secretaries of State, War and Navy as a single authority for both Intelligence and Security;

c. Authorize them to call in the heads of other agencies to sit as members of the Authority on matters of particular interest to those agencies; and

d. Establish as a "by-law" of the Authority that, on all matters of Security (as defined), the Treasury and FBI (not the Attorney General) would be called in.

Note: Mr. Benjamin V. Cohen, Counselor of the State Department, has suggested that it would be desirable to provide for the inclusion of additional departmental heads in the top Authority when matters are under consideration which may be of particular interest to them. Major Correa, Office of the Secretary of the Navy, has questioned the desirability of including the Attorney General, the chief law enforcement officer of the Government, in an Authority which would have to deal with clandestine activities.

Executive Head of the Central Intelligence Agency

The first thing that has to be decided on this issue is whether to organize an independent agency with a Director appointed by the President and with a separate budget, or to constitute a central agency from existing departments with an executive who is a departmental employee. In proposing to set up an independent agency, the War Department plan is apparently designed to make the Director a neutral party, with the prestige and authority of the President behind him. Various people who have studied the problem, including the Director of the Bureau of the Budget and the undersigned, are of the opinion that a central agency constituted from the various departments is advantageous for the following reasons:

a. It dispenses with the necessity of a Presidential appointment and an independent budget, thus giving the Executive a greater chance of anonymity.

b. The Executive, backed by the prestige and authority of the Secretary of State in foreign affairs, would have fewer difficulties in the job of coordinating the intelligence activities of the numerous government agencies than would a Director who had no departmental status but had to refer to the President each time his authority was questioned.

It is suggested that a workable plan could be put into effect promptly, on the basis that the initial organization would be inter-departmental. This would permit the coordinating machinery, which is urgently needed and will be required whatever plan is adopted, to get going without much delay, whereas the organization of an independent central agency may take a considerable time. If, six months or a year from now, when the machinery is in motion, it appears desirable to give independent status to the central agency, that can be done. The top Authority will always be in a position to make that kind of a change.

Responsibility for Strategic Estimates

The term "strategic estimates" is used to mean the assumptions of fact that are taken as the basis for action or policy at the top level of the Government. At present there are various informal means for arriving at such estimates on top level matters, and there is also the formal machinery of the Joint Intelligence Committee. That committee, being an agency of the Joint Chiefs of Staff, is not assigned under either plan the responsibility for strategic estimates.

The War Department plan may be construed (though not necessarily) as entrusting the formulation of strategic estimates to the proposed central agency. The State Department plan would vest that responsibility in the State Department, which would discharge it by means of a Special Estimates Staff, functioning under the Department but including Army and Navy working representatives.

The matter of strategic estimates is quite urgent, in view of the many important problems that are involved in the forthcoming peace treaty negotiations. Those problems fall within the area of responsibility of the State Department for the conduct of foreign affairs, and for that reason it seems logical to vest the responsibility for strategic estimates in the State Department.

Here again is a situation that might be dealt with by taking the easiest available course and learning by experience whether a transfer of the function from the Department of State to the central agency might be desirable.

Conclusion

If the problem of representation of the Joint Chiefs of Staff can be resolved, the State Department and War Department plans are sufficiently close together to enable the following to be done:

a. Setting up the National Intelligence Authority;

b. Setting up a State Department representative as Executive Secretary of the Authority, without prejudice to a decision at some later date to create an independent agency;

c. Putting the coordinating machinery into immediate operation, in order to define our national intelligence requirements and lay out a comprehensive and coordinated program to meet them.

d. Selecting a person to head the secret operations and laying the plans for them (it is assumed that execution of such plans will require confidential funds not presently available);

e. Setting up in the State Department a Strategic Estimates Staff, which can be turned over to the central agency at some later date if that shall appear desirable.

In the interests of prompt action, a solution along the above lines is recommended.

Alfred McCormack/2/
Special Assistant to the Secretary

/2/Printed from a copy that bears this typed signature.

Continue with Document 50