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

Department of State Intelligence

                           

80. Memorandum From the Secretary of State's Special Assistant for Research and Intelligence (McCormack) to the Under Secretary of State (Acheson)

Washington, October 27, 1945.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 58 D 776, Birth of the Intelligence Organization in the Department of State. No classification marking. The memorandum bears the handwritten annotation, "I shall be glad to help in any way. DA."

After listening to your statement this morning on the intelligence needs of the Department,/1/ I feel strongly that you ought, if you possibly can, to be a witness before the House Appropriations Committee and also before the Senate Committee, if a full development of our plans is necessary before that Committee.

/1/Probably a reference to Acheson's October 27 meeting with senior officers of the Department to discuss the newly established intelligence organization. See Acheson, Present at the Creation, pp. 159-160.

I suspect that we will have a hard time convincing either Committee that we should add a thousand people to the State Department's rolls. However, I do not think our estimate is padded or that the intelligence requirements can be met by a substantially smaller staff, especially in view of the certainty that G-2, A-2 and ONI will be doing less and less in intelligence analysis and research as their demobilization proceeds and budget problems catch up with them.

Your appearance before the Committees might be decisive in persuading them of the importance of accurate foreign information under present conditions and, still more important, of the Department's lack of facilities for that purpose at the present time. I cannot do a good job on the latter point nor nearly as good a job as you can do on the former.

81. Memorandum From the Assistant Secretary of State for Administration (Russell) to Secretary of State Byrnes

Washington, November 3, 1945.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Decimal File 1945-49, 101.5/11-345. No classification marking.

I have reviewed with considerable interest the Report submitted by the Bureau of the Budget to the President on the Organization of Intelligence Activities in the Government./1/ I find myself in general agreement with the conclusions reached in the Report.

/1/Dated September 20. (Ibid., RG 51, Records of the Office of Management and Budget, Director's Files, Series 39.27, Intelligence) See the Supplement.

It should be noted at the outset that this Report primarily directs itself to the creation of a general over-all intelligence set-up, combining and coordinating the intelligence activities of all interested departments. Its conclusions, though, can be applied with equal logic to the intelligence operations of a single department. The principles of organization are sound and should be applied by the Departments themselves in their own set-ups.

In my judgment, the fundamental point made by the Budget and reiterated time and again throughout its Report is incorporated in #2, Summary of Conclusions, appearing at the bottom of page 2 and at the top of page 3, of the letter of transmittal to the President./2/ It is as follows:

/2/Document 38.

"The principal intelligence operations of the Government should be organized at the point where decision is made or action taken, i.e., at the departmental, or lower, level and not within any single central agency. Each department (or subdivision of a department) which has important responsibilities in international matters or which has responsibilities for providing the public with information about foreign countries should provide for a competent foreign intelligence operation."

Again, on page 9, the Report itself puts it:

"The intelligence needed to assist wise decisions and support informed action must produce a knowledge and understanding of all the factors involved. Further, it must be at hand. Extreme centralization of the intelligence operation is no more workable than would be the centralizing in one agency of the job of producing all statistics for the Government. The intelligence operation is handmaiden to the action-taking and policy-determining groups. It must be sensitive to their needs. ...A department which will be held responsible for its decisions and actions must in turn be able to hold accountable to it the operation which produces intelligence on which those decisions and actions will, in part, be based.

"The principal foreign intelligence operations of the Government therefore should be viewed as being organized at all places where decisions are made and action taken, namely at the departmental, or lower, level."

Speaking particularly to the continuance of a large central organization such as OSS, the Report on page 12 deprecates the tendency "to conclude that what is needed is the continuation on a permanent basis of some such large scale central operation as exists now in the Office of Strategic Services. Such a conclusion fails to take into account the fact that the principal intelligence operations of the Government must be organized at the point where decision is made."

Translating these principles, the validity of which can hardly be questioned, into the organizational set-up of the State Department, the decision must be made as to where the level of operations is in the Department or, to use the language of the Budget, "the point when decision is made or action taken, i.e., at the departmental, or lower, level and not within any single central agency." This obviously does not mean the Secretary or Under Secretary. So to conclude would mean that these officials would be completely immersed under a blanket of operating decisions, many of a comparatively trivial character. To paraphrase the Budget Report, there might be some justification for such extreme centralization if "all policy and action affecting our foreign relations" were centered at the level of the Secretary and Under Secretary. But that isn't the fact and can never be the fact. The point of centralization, it would seem, would be the geographic desks, which should function, in my opinion, directly under the Secretary and Under Secretary. These desks represent the level of operations. They must take certainly the initial responsibility for suggesting decisions and actions to the Secretary and Under Secretary. If that be true, they must "in turn be able to hold accountable to it the operation which produces intelligence in which those decisions and actions will, in part, be based." It accordingly follows that, except as hereinafter stated, intelligence should be attached to and made the "handmaiden" of the geographic desks.

The creation within the Department of a centralized, over-all intelligence group in the Department is as illogical as the centralization of governmental intelligence operations in a single agency. The language of the Budget Report may be as well applied to the Department as a whole as it can be to the entire Government: "Extreme centralization of the intelligence operation is no more workable than would be the centralizing in one agency of the job of producing all statistics for the Government."

Indeed, the plan submitted by Colonel McCormack is completely at variance with the principles stated in the Budget Report. It contemplates a centralized intelligence unit, not accountable to the operating levels. If a centralized over-all government intelligence unit is not workable--the Budget's conclusion--then it follows that the proposed plan of extreme centralization in the Department itself is not workable.

It does not follow, however, as the Budget Report so cogently emphasizes, that there is not need for a top level intelligence unit in the Department as the Budget envisages for the Government as a whole in its conclusion #5, stated on page 3 of its memorandum of transmittal. There is, of course, need for some high-grade group "organized to analyze reports from the point of view of a department as a whole", to provide coordination with other agencies, and to furnish general over-all direction to intelligence operations. This in itself is a heavy and highly important responsibility. But, to quote again from the Budget Report, this "research staff should be small and concerned primarily with bringing together intelligence available" throughout the Department "to fulfill a particular need."

In conclusion, I feel that the Budget Report amply supports the grave misgivings that I have about the proposed organization for Colonel McCormack's unit, which, if adopted, would mean that the Department would "continue a complete structure superimposed on top of" the existing structure of the Department and would expose the Department to the charge that it was incorporating the parts of OSS transferred to it without any "considerable readjustment and curtailment."/3/

/3/Russell canvassed at least some of the geographic divisions on their use of OSS reports during the war. (Memorandum from Braden to Russell, November 3; Truman Library, Papers of J. Anthony Panuch; and memorandum from Durbrow to Russell, November 2; National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 58 D 776, Birth of the Intelligence Organization in the Department of State) Both are in the Supplement.

D.R.

A final thought: Intelligence is only as good as it is translated into action. Where is that? The geographic desks./4/

/4/The postscript is handwritten.

82. Memorandum From the Assistant Secretary of State for Administration (Russell) to Secretary of State Byrnes

Washington, December 29, 1945.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 58 D 776, Birth of the Intelligence Organization in the Department of State. No classification marking. Also sent to Under Secretary Acheson.

A Departmental Order prescribing the future organization of the Office of the Special Assistant for Research and Intelligence must be issued by January 1, 1946, at which time the interim organization must terminate.

The Special Assistant for Research and Intelligence proposes the following organization:

	Personnel (authorized by FY 1946 budget)
The Office of the Special Assistant for Research and Intelligence (immediate office of Special Assistant, executive office, programming group and special estimates staff).	67
The Office of Research and Intelligence and 7 divisions:
The Office of the Director of R and I	35
Division of American Republics Intelligence	35
Division of British Commonwealth Intelligence	17
Division of Europe, Near East and Africa Intelligence	118
Division of Far East Intelligence	117
Division of USSR Intelligence	74
Division of International and Functional Intelligence	47
Division of Map Intelligence and Cartography	105
Sub-Total for R and I	548

The Office of Intelligence Collection Dissemination consisting of 5 divisions: Office of the Director of I C and D	0
Intelligence Reference Division Division of Intelligence Acquisition & Distribution Division of Biographic Intelligence	173
Presentation Division	74
Outpost Division (4 in U.S./70 overseas)	74
Sub-Total for I C and D	321
TOTAL	936

The organization proposed by the Special Assistant for Research and Intelligence for his immediate office and for the Office of Intelligence Collection and Dissemination is generally acceptable to all Offices of the Department.

An irreconcilable difference of opinion exists with respect to the organization of the Office of Research and Intelligence with its five geographic divisions.

The position of the geographic Offices as stated by both Mr. Dunn and Mr. Braden and shared by their subordinates is that the geographic intelligence divisions of the Office of Research and Intelligence should be integrated into the geographic and functional Offices. Their view is:

"Research activities in the Department of State, except for a relatively small general research group, must be tied organizationally with operations in order to be of real value. The work of nearly one thousand persons now proposed for research and intelligence work of the Department can be made useful, and barren efforts avoided, if a good part of the personnel is integrated closely with the operating offices of the Department.

"Moreover, if the research personnel is retained in a central organization, a difficulty more serious than wasted talent is likely to result. To retain able research men, they must be given a voice in recommending policy. Those now being brought into the Department should be given such a voice. But the policy recommendations of a research unit which is not organizationally integrated with operations are very likely to be theoretical judgments with little basis in reality. Policy, to be sound, must be based on the closest contact between day-to-day operations and good basic research.

"It will hardly be argued that policy recommendations from two points of view, operations and research, would be useful to the executive offices of the Department in making their policy decisions. Not only do the executive offices have no time to devote to selection, but more important, recommendations based either on operations or research exclusively are bad, and two bad policy recommendations are not useful material from which to make a good selection. What is needed is a linking of operations and research in the closest feasible manner. We are convinced, through experience and judgment, that this can never be done as long as the two branches are organizationally separate."/1/

/1/The document from which this quotation is taken has not been identified.

The economic Offices, although sharing in part the views of the geographic Offices, suggest that the proposed organization of the Office of Research and Intelligence with its geographic intelligence divisions be temporarily approved subject to a future review of the basic difference between the geographic Offices and the advocates of the highly centralized organization.

The position of the Special Assistant for Research and Intelligence may be summarized as follows:

"The intelligence organization should work as one central block. There should be no thought of breaking it down into geographical and functional units and distributing these among parallel operating units in the Department. The chief argument against such a fragmentation of forces is that maintenance of present research standards would be difficult if not impossible. Today the major part of the staff in question has had some four and one-half years of common experience; the work of one unit has been continuously compared to that of others; recognized standards of performance have emerged with standard editing and styling practices. Above all, the stimulus and cross-fertilization of minds working on a variety of problems has been of general benefit and has broadened and deepened the treatment of subject matter all around. With a destruction of staff unity these standards and practices would be hard to reestablish and the loss of them would be irreparable. The centralization of intelligence research in offices which have the entire responsibility for the research and intelligence field, and which have no responsibility for operating decisions, makes it possible to attain an independence and integrity of judgment which would not be possible if research were the responsibility of the operating offices. Research subordinated to offices whose primary responsibility is operating decisions would inevitably tend to reflect policy views."/2/

/2/McCormack criticized this quotation as an inadequate statement of his views in Document 83.

In addition, the Special Assistant stated that Judge Patterson will accept this Department's proposal for a unified intelligence authority only on the condition that the State Department establish an integrated and independent departmental intelligence organization. The Special Assistant believes that if the proposal of Mr. Dunn and Mr. Braden is adopted, the Department of State will not have an integrated and independent intelligence service which will meet Judge Patterson's demand.

There are four alternative solutions to the controversy:

(1) The organization proposed by the Special Assistant may be adopted.

(2) The organization proposed by the Special Assistant may be established for a period of three months, at the end of which period the geographic and functional intelligence divisions of the Office of Research and Intelligence shall be transferred to the geographic and functional offices of the Department.

(3) The organization proposed by the Special Assistant may be adopted temporarily upon the express understanding that a final decision on the ultimate location of the Office of Research and Intelligence will be made on or before March 31, 1946.

(4) The proposed Office of Research and Intelligence may be transferred immediately to the geographic and functional Offices.

The arguments in favor of alternatives 2 and 3 are that:

a) The changes and moves in the physical location of Offices necessary for effective integration of the geographic and functional intelligence divisions of the Office of Research and Intelligence with the geographic and functional Offices can not be accomplished in less than three months, and

b) The suggested delay of three months would enable the Special Assistant to recruit, train and organize research personnel so that the geographic and functional Offices would receive trained intelligence staffs with common standards and techniques.

Personally, I recommend the approval of alternative 2 (i.e., the organization proposed by the Special Assistant will be established for a period of three months, at the end of which period the geographic and functional intelligence divisions of the Office of Research and Intelligence shall be transferred to the geographic and functional Offices of the Department).

I believe that research at the geographic level must be under the immediate direction of those who are to use it. In my judgment, the divorce of research from the policy action taken after the evaluation of information will lead inevitably to wasteful duplication and to competing evaluations of information which will breed confusion and disorganize the operations of the Department. If this reasoning be sound it would be unwise to adopt an improper departmental organization in order to secure Judge Patterson's approval of the Department's proposal for a united intelligence authority. I believe that the Special Assistant will continue to have under my proposal (alternative 2) a sufficient central intelligence organization to meet Judge Patterson's stipulations.

The immediate integration of the proposed Office of Research and Intelligence into the geographic and functional Offices as required under alternative 4 would be impractical because of the lack of office space in the State Department building which would be required immediately. It would also deny the Special Assistant the reasonable opportunity to recruit and train the intelligence personnel along the line of uniform standards of performance.

Whatever alternative may be approved, the divisions of the Office of Research and Intelligence should be changed to conform to the geographic pattern established for the other Offices of the Department. No justification can possibly exist for different geographic breakdowns. It would place the Department in a ridiculously inconsistent position to approve a geographic division for a new Office of the Department wholly different from that established and approved for the traditional Offices of the Department./3/

/3/See also the endorsements of Russell's position by Assistant Secretaries Braden and Dunn in memoranda to Secretary Byrnes, both December 31. (National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 58 D 776, Birth of the Intelligence Organization in the Department of State) Both are in the Supplement.

The Department order to implement alternative 2 is attached./4/

/4/Not found.

D.R.

83. Memorandum From the Secretary of State's Special Assistant for Research and Intelligence (McCormack) to Secretary of State Byrnes

Washington, December 31, 1945.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 58 D 776, Birth of the Intelligence Organization in the Department of State. No classification marking. Also sent to Under Secretary Acheson.

Mr. Russell's proposal for the intelligence organization/1/ modifies the one recommended by the Intelligence Advisory Board in four particulars, of which two are not important enough for the attention of the Secretary. The two important points are:

/1/Document 82.

a) It provides for dismemberment of the Office of Research and Intelligence after three months (March 31, 1946); and

b) Of the proposed geographical divisions of that Office, it leaves only the American Republics unit in the status of a Division and lumps all the rest in a single Division of European, Near Eastern, African, and Far Eastern Intelligence.

With respect to the latter point, Mr. Russell's memorandum says:

"Whatever alternative may be approved, the divisions of the Office of Research and Intelligence should be changed to conform to the geographic pattern established for the other Offices of the Department. No justification can possibly exist for different geographic breakdowns. It would place the Department in a ridiculously inconsistent position to approve a geographic division for a new Office of the Department wholly different from that established and approved for the traditional Offices of the Department."

It is difficult to see anything "ridiculously inconsistent" in an intelligence agency geographically subdivided into (1) American Republics, (2) British Commonwealth, (3) Europe, Near East, and Africa, (4) Far East, and (5) USSR. Those are the main politico-geographic subdivisions of the world. It is believed, on the other hand, that the alternative proposal is quite illogical in setting up the Latin American unit as a Division, with 35 people, and then lumping all the rest of the world, with 326 people, into another Division. The political considerations that require an Assistant Secretary for Latin American Affairs have no bearing on an intelligence organization. Therefore that unit should have the same status as all the others. All should be Divisions of the proposed Office, or all should be reduced to the next lower status (at the expense of adequate Civil Service grades and the certain loss of key personnel). To do otherwise will lift the Latin American unit to a status that it is not entitled to have.

As proposed by me, the geographical Divisions conform generally to the Political Offices, but not exactly, because the present organization does not lend itself to precise conformity. Mr. Clayton's and Mr. Benton's geographical breakdowns likewise do not conform precisely to those of the Political Offices. In each case the problem is different. The Political Offices can hardly claim that their geographical breakdowns are either immutable or completely logical, when, for example, they put New Caledonia under Europe and Greece under Middle East and Africa.

It is strongly recommended that the organization as proposed by the Intelligence Advisory Board be approved.

As to whether the research operation should be decentralized to the geographical and functional offices, the argument for decentralization is made as follows:

"I believe that research at the geographical level must be under the immediate direction of those who are to use it. In my judgment, the divorce of research from the policy action taken after the evaluation of information will lead inevitably to wasteful duplication and to competing evaluations of information that will breed confusion and disorganize the operations of the Department."

There is also a quotation (at page two) of the views of the Geographic Offices. My views to the contrary are represented by a quote from a draft prepared by a member of the Working Committee of the Intelligence Advisory Board, which was not in the Committee's report and is not an adequate statement of either my views or theirs. A full statement of the Committee's views appears in its report.

My own view is, briefly, that the chances of keeping the R&A Branch together, strengthening it with new personnel, depend on its maintenance as a unit. It is an integrated organization with common management, procedures and files. It is flexible, in that personnel from one geographic unit can be shifted to meet peak demands in others. It does a whole job of processing incoming information and collating it for everybody's needs. It is independent of policy makers and adheres to the standard of intelligence offices, that they must keep out of policy and maintain objectivity, since their mission is fact-finding.

That an intelligence organization must be free of operations or policy involvements is fundamental. That such freedom could exist in the 20-odd Divisions of the Geographic Offices is unthinkable.

In my opinion, decentralization would destroy the R&A Branch. It would give the Geographic Offices some additional personnel, but it would end all possibility of organized State Department intelligence, and the President's idea of State Department leadership in government-wide intelligence could not be attained.

A centralized intelligence operation within the Department can serve the needs, not only of the geographical desks, but of the economic organization, the Office of Public Affairs, the Office of Special Political Affairs, the various Committees which play such an important role in the Department, and such quasi-Departmental committees as the Far East Advisory Commission and the Interdepartmental Committees. A Research and Intelligence unit decentralized to the geographical divisions can serve only those divisions.

The centralized operation can look at the national intelligence problem as a whole, coordinating the work of its component parts and gearing itself into the other intelligence organizations of the government. Within each of its component units, the problems of any area can be looked at in all aspects, since the political scientists, the economists, the geographers and other specialists belong to a single unit, working closely together and having common files and a common flow of information.

The interests of an intelligence office, in its regional divisions, go far beyond the interests of the geographical desks, which are concerned with current problems arising in the conduct of our foreign affairs. The geographical desks have neither the time nor the training to engage in a systematic compilation of basic information for future intelligence purposes. Even if they had, they still could not do it, because different habits of thought and a different frame of mind are required for research work than for the daily operating job.

Decentralization of the research and intelligence operation is not going to eliminate the need for centralized activity. It is only going to make more difficult the attainment of the President's objective of a coordinated government-wide intelligence program.

The proposal would destroy the effectiveness of the R&A Branch, assuming that all the personnel would continue to perform the functions that they now perform. That, however, would not happen. To state the problem in terms of numbers, in the regional divisions of IRIS there are 272 professional employees, half of whom are strictly economists or geographers, leaving about 136 who could be decentralized to the 19 geographic divisions of the Department, as follows:

Far East	41
Europe-Africa	59
Latin America	16
British Empire	3
USSR	17
TOTAL	136

This is an average of less than 7 persons per Geographic division. Included in the 136 there are perhaps 15 key people who have kept the organization together. These 15 people are scholars who perform or supervise research and who well know that the decentralization of the R&A Branch would destroy its usefulness. I doubt if any one of those people would stay in the operation if it were decentralized. Practically all those who have discussed the problem with me have stated that they would resign at the first opportunity if such a step were taken.

If the operation is decentralized, the personnel who go to the geographical desks will have find their futures in those divisions. The problems of promotion and advancement in the geographical units will be quite different from those in a unified research organization. The good opportunities will come, not in research but in operating and policy jobs; and there will be an absorption into such jobs of such good personnel as will remain. That is what happened when the Territorial Studies unit was decentralized. No vestige of it, I am informed, now remains in the Department.

It is strongly recommended that the Office of Research and Intelligence be set up, as proposed, as a definitive organization. If, during the fiscal year 1947, changes in the direction of decentralization appear desirable in the light of experience, they can then be made. To set up the organization in a particular way does not mean that it can never be changed. It does, however, give assurance that those responsible for creating a State Department intelligence organization will have control of their personnel and the opportunity to work out their relations with other departmental units within a definite framework of responsibility.

84. Memorandum From Secretary of State Byrnes to the Assistant Secretary of State for Administration (Russell)

Washington, January 5, 1946.

//Source: Truman Library, Papers of J. Anthony Panuch, State Department, Research and Intelligence, #1. No classification marking. A handwritten notation on the source text reads: "To General Nelson--For implementation and action. D.R."

Referring to your memorandum of December 29,/1/ the proposal of the Special Assistant for Research and Intelligence involves fundamental changes in the organization of the Department.

/1/Document 82.

Your memorandum states that the interim organization must terminate immediately. Because it is necessary for me to leave on Monday/2/ to attend the UNO meeting in London it is impossible for me to give to the subject the consideration it should receive before reaching a decision making permanent the proposed change in organization.

/2/January 7.

Therefore I am adopting the third solution suggested by you, with one slight change.

I wish the organization proposed by the Special Assistant to be adopted temporarily upon the express understanding that a final decision on the ultimate location of the Office of Research and Intelligence will be made on or before March 1st.

James F. Byrnes

Continue with Document 85