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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

                           

85. Report From the Assistant Secretary of State for Administration (Russell) to Secretary of State Byrnes

Washington, undated.

//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. Attached to a February 25 covering memorandum in which Russell noted that it was in response to SC-185 and reminded Byrnes that according to his directive of January 5 (Document 84) the issue was to be determined by Byrnes before March 1. The covering memorandum and the full text of the report are in the Supplement. SC-185, February 12, is not printed. (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) See the Supplement. This report, also known as the "Russell Plan," is printed in Senate Committee on the Judiciary, Subcommittee To Investigate the Administration of the Internal Security Laws, 83d Congress, 1st Session, Hearings on Interlocking Subversion in Government Departments, part 13, pp. 865-867.

On February 25 Byrnes sent McCormack a note acknowledging one from McCormack and transmitting SC-185. Byrnes said: "I cannot make a decision in this matter by the 1st, and I will not do anything about it while you are away." (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)

[Here follows a table of contents.]

I

Introductory

On 12 February 1946 the Special Assistant for Research and Intelligence submitted to the Secretary's Staff Committee Document SC-185 entitled "Permanent Location and Organization of the Office of Research and Intelligence" (ORI). By direction of the Secretary, this document was referred to the Assistant Secretary for Administration for consideration and clearance, in accordance with Departmental Order No. 1356 (Tab A)./1/

/1/Not printed.

This paper involves an issue on which there is an irreconcilable difference of opinion in the Department. The issue is whether, as the Special Assistant contends, the intelligence activities of the Department shall be centralized--that is, organized outside of, and not accountable to, the policy offices of the Department, or whether, as held by Assistant Secretaries Dunn and Braden, such activities, to the extent necessary, shall be integrated with, and made responsible to, the Offices of the Department charged with policy development and formulation.

[Here follow sections II-V, Prior History of Controversy, Basic Elements of the Problem, Analysis of Argument in Support of Centralized Intelligence Organization, and Conclusion.]

VI

Recommendations

It is recommended that:

1. The functions of the geographic intelligence divisions of the Office of Research and Intelligence (ORI) be transferred to the geographic offices of the Department and that ORI be renamed as the Office of Intelligence Coordination and Liaison.

2. Subject to appropriate policy control by, and the instructions of, the Standing Committee on Intelligence hereafter proposed, the Office of Intelligence Coordination and Liaison, in collaboration with the Office of Intelligence Collection and Dissemination, should perform the following functions:

(a) Represent all interested elements of the Department on the staff of the National Intelligence Authority.

(b) In cooperation with the geographic and economic offices, prepare special intelligence estimates for the Secretary and the Under Secretary, the Assistant Secretaries, and for the National Intelligence Authority.

(c) To establish and maintain standards of research and analysis throughout the Department.

(d) To formulate, in consultation with geographic and economic offices, a Departmental program for basic research, and to coordinate and stimulate its execution.

(e) To organize and supervise cooperative projects in research cutting across the lines of the geographic and economic offices.

(f) To maintain a central clearing house of information regarding research studies prepared or planned anywhere in the Department.

(g) To maintain liaison with other agencies of the Government, and with private institutions, for the purpose of utilizing all possible research resources to meet the Department's needs.

(h) To conduct specialized research on economic or other technical subjects.

4. The Secretary should appoint a Standing Committee on Intelligence consisting of the two Assistant Secretaries for Political Affairs, the Assistant Secretary for Administration and the Special Assistant for Research and Intelligence to:

(a) Supervise the establishment and coordination of Departmental intelligence objectives and policies.

(b) Subject to the direction and control of the Secretary, to formulate and supervise the implementation of Departmental policy with respect to the National Intelligence Authority.

(c) To approve participation by the Department in any centralized operations or projects which the Director of the Authority may propose.

4. The transfer of functions, personnel and facilities envisaged in recommendation (1) above should be executed in such manner as to leave the Special Assistant with adequate resources to carry out his mission as redefined in recommendation (2).

5. The phasing of the transfer and the disposition of the personnel, functions and resources of ORI should be left to the determination of the Assistant Secretary for Administration, with due regard to the recommendations submitted by the Special Assistant for Research and Intelligence.

6. Each geographic office shall organize and maintain a Division of Research, set up with geographic sections corresponding to the other divisions of the office. The establishment of such offices and the timing thereof shall be under the supervision and direction of the Assistant Secretary for Administration.

86. Memorandum From the Assistant Secretary of State for American Republic Affairs (Braden) to Secretary of State Byrnes

Washington, February 25, 1946.

//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.

After my February 6, 1946, conversation with you/1/ when I expressed my opposition to the idea of making permanent the Office of Research and Intelligence, Staff Committee memorandum SC-185 treating this same subject was received by me. Because of the vital issues raised in this document, I respectfully submit to you my views in the premises.

/1/No record of this conversation has been found.

I believe in doing first things first. In order that the Department of State and Foreign Service may competently perform the functions assigned to them by law, it has long been apparent to those of us who have been operating in our foreign diplomatic missions that the first things are: (a) to rebuild the morale which has suffered serious damage during recent years; (b) to support the Department and Foreign Service with adequate personnel, funds, and facilities; and (c) to make such changes in organization and administration as may be clearly indicated as the result of careful analysis and study.

"Intelligence" as used in SC-185, is just another name for "Information" which the Department and the Foreign Service have been gathering, reporting and analyzing, and on the basis of which foreign policy has been formulated for 150 years. These activities are at the core of the Department's functions. If its performance is to be improved, we must build on, strengthen and support our existing organization.

SC-185 advocates adoption of a new, preconceived plan developed outside of the Department by people obviously unfamiliar with the Department and Foreign Service and their needs and work. Its net result would be not to strengthen the existing organization of the Department, but to implant upon the Department another already established organization, cutting across and dividing the basic responsibilities of the Department's geographical offices. In effect it attaches a "booster" without first diagnosing what is wrong and then repairing the motor.

The plan in SC-185 is based upon the false premise that in the formulation of foreign policy there are two separate and distinct processes--(1) the analysis, evaluation and interpretation of facts bearing on problem; and (2) the decision as to what should be done. The fact is that in diplomacy the decisions which make policy must at every step be intimately related to the most thorough knowledge and analysis of conditions, problems, personalities and national characteristics. The geographical offices cannot be relieved, as this plan proposes, of the "burden" of gathering the fullest possible information on the problems with which they deal, and be expected to operate efficiently.

To make permanent the plan now proposed, far from clarifying the Department's operations, as is claimed in SC-185, would produce duplication, divided responsibility and unwarranted expense, with resulting inefficiency and confusion.

The staff which, under SC-185, would take on this vital responsibility is unproven and without diplomatic training. It has been qualified by no stiff examinations as has our Foreign Service. It has scant experience in the rough and tumble of the field.

I will not encroach upon your valuable time by answering in detail the many arguments presented in SC-185, but do respectfully call your attention to the following points:

(1) The statement that only the ORI can provide the right kind of professionally trained personnel disregards completely the far higher professional training, qualifications and experience of the Foreign Service and Department, whose loyalty and integrity have been proven not merely over a few years but for decades. Moreover, the geographical divisions are staffed with men thoroughly familiar with the problems to be studied, and therefore far more able to make analytical studies fit the practical needs of our foreign relations.

(2) The argument that fact finding must be separated from policy decision may hold true in ascertaining facts about a military situation, but is completely invalid for the purpose of evaluating and interpreting political situations.

(3) The analogies to juridical practices are not pertinent.

(4) The paper complains that the morale of the ORI has deteriorated in the last few months because of the uncertainties surrounding its continuance. The Foreign Service morale has gone down also, but only after years of neglect and worse. The morale of the Department and Foreign Service organizations would suffer disastrously if a totally new organization were given responsibility for this essential aspect of their work. The reporting of our Foreign Service would certainly suffer if the officers in the field knew their reports were no longer to go directly to those responsible for policy decisions, but merely into a mechanical research operation. If their reports are to go to both, there would result the costly duplication to which I have already referred.

(5) The criticism of ARA's analysis section is unjustified and uninformed. Admittedly lacking in personnel and space, this section has been of great service precisely because it operates as an integral part of the geographical office and is in constant contact with the problems which that office faces.

(6) It is not surprising that SC-185 evidences such a complete lack of knowledge of the operations of the geographical divisions and of the Foreign Service, since ORI has no one experienced in this work. Nor have my principal assistants and I ever been consulted by the ORI as to our operations and organization. That no difference of opinion on this subject was evidenced until October 27, 1945, is due to the fact that neither my assistants nor I ever heard of the proposed plan until October 31, 1945.

There is a relatively small job of correlation for a central intelligence office to do. Among the first things to be done would be to establish an efficient filing unit in the Department. A small staff could be set up to bring together in one place the information received from the various geographical areas, to maintain liaison with the interdepartmental intelligence organization and other agencies. To direct and supervise work of this kind I recommend the establishment of a small committee, consisting of the two political assistant secretaries and the Assistant Secretary for Administration who would be the chairman.

I am, however, emphatically opposed to superimposing on the geographical offices and the Foreign Service another organization which would duplicate their basic responsibility for analyzing and interpreting the situations on which they must everyday--and frequently with the utmost speed--recommend decisions of policy. Rather than create this duplication, we must first strengthen the geographical offices and Foreign Service with the personnel, space, and administrative services that are so badly needed and for which we have been pleading for years.

SB

87. Memorandum From the Deputy Assistant Secretary of State for Administration (Panuch) to the Assistant Secretary of State for Administration (Russell)

Washington, April 16, 1946.

//Source: Truman Library, Papers of J. Anthony Panuch, State Department, Research and Intelligence #2. Secret.

SUBJECT
Progress of attempt to settle L'affaire McCormack

Things are not going so good in the "settlement" of the above matter. Indeed, I am afraid we, i.e., the Secretary and in a lesser degree you and I are going to end up "in the middle" again despite our noble intentions. Here is why.

1. McCormack's Gethsemane Hour

On Thursday, Al McCormack came to see me to seek my advice as to how he should quit. He said that on the preceding day he had had an unpleasant session with the Secretary (who was quite unfriendly) at the conclusion of which he (McCormack) advised the Secretary of his intention to resign immediately. The Secretary (according to McCormack) told Al that in his own interest he should quit after the Congress restored the Intelligence cutback. I advised McCormack strongly to accept the Secretary's suggestion in this regard, and he said he would think it over and let me know.

2. Reprieve

On Friday, I reported the above to you to be passed on to the Secretary. You asked me whether there was any chance of securing McCormack's concurrence to our compromise plan of Intelligence organization filed with the Secretary on 25 February 1946, and it was decided to summon McCormack to discuss this possibility with him. You told the Secretary of your intention to do this. He said "OK" but that he had to have a decision on the matter by Tuesday, 16 April. Accordingly, we met with McCormack on Friday forenoon and urged him to relax his intransigence. He said he would consult Tyler Wood, a fellow Princetonian, and let us know. That afternoon Tyler Wood phoned you, stating that he was authorized to negotiate a settlement on behalf of McCormack. You authorized me to represent A-R in these negotiations. On Saturday, I sent Wood a copy of McCormack's brief of 12 February and our report of 25 February (i.e., the Russell plan) for study before undertaking his efforts at conciliation.

3. The Old School Tie

On Monday, 15 April, Wood conferred with me, and I outlined to him the basic issues involved in the controversy. It became clearly evident very quickly that poor old Ty did not "know the score." Furthermore, it was apparent that he had no intention of attempting to negotiate an acceptance of the Russell plan or even some formula based thereon. Indeed, he expressed confidence that he could "sell" the political divisions the McCormack plan. I pointed out that what he hoped to sell in 48 hours had been the subject of an irreconcilable difference of opinion since 1 October. Nevertheless, he stated he was certain that this could be done in that "Doc" Matthews, a classmate of McCormack's at Princeton, was "for" McCormack's plan, and, with the Doc's backing, he (Wood) felt the other political divisions would be a pushover--except maybe Braden, who could be dealt with after everyone else was "lined up."

4. Briefing The Conciliator

I told Wood that in my opinion this was a naive estimate of the situation--but that I did not wish to discourage any method that would bring about a settlement of the present wrangle and that he was free to proceed in any way he saw fit. I pointed out to him, however, that A-R occupied a judicial position in the dispute and could not become a part of any plan to "gang up" on Braden; that we expected him to negotiate with all of the Geographic Divisions with his cards on the table "face up." He allowed that this was his intention and that he would "talk turkey" with Braden despite McCormack's hatred of him. I left him with this thought as a guide to his negotiations:

(a) That, in my opinion, the Russell plan was the ticket; but that we did not object to some other formula provided;

(b) It was workable and acceptable to all of the Geographic Divisions; that harmony was the sine qua non of any formula;

(c) That under any plan (whether (a) or (b)) McCormack had to confine himself to overt intelligence and that secret intelligence must remain as at present.

i

While I was under the impression that everyone was interested in pouring oil over the controversial waters, McCormack's side launched a psychological press blitz over the week-end, to wit:

Sunday--N.Y. Herald Tribune

Article by William Attwood, laudatory of McCormack and derogatory of Congress, career diplomats and Braden.

Monday--Washington Post

Savage editorial written apparently by Schwarzwalder of the Bureau of the Budget (via Wayne Coy) condemning political and foreign service officers for opposing McCormack.

The two editorials above-referred to offset Drew Pearson's patriotic effort in his Sunday broadcast to break the impasse by appealing to McCormack to accept the Russell compromise plan.

6. Who's Who on Intelligence (As of 6:00 P.M., 15 April)

In terms of key personalities, a round-up of key personalities and their current positions on intelligence is as follows:

The Secretary--A settlement must be reached by Tuesday, April 16th.

Acheson--Originally for the McCormack plan. However, is now sick of the whole business and will have nothing more to do with the controversy.

Dunn--Standing pat on the Russell plan.

Braden--Standing pat on the Russell plan.

Matthews--While embarrassed by the fact that he is a Princeton classmate of McCormack's, is for the Russell plan. He needs research people but does not want any of McCormack's intelligence characters in his organization.

Loy Henderson--Standing pat with Jimmy Dunn and unalterably opposed to McCormack's plan.

John Carter Vincent--Views unknown at the present poll. However, in Dunn's absence he will probably be influenced by Ben Cohen's views. These, on past performance, would be against the Political Divisions.

Bob Reams--100% for the Russell plan and unalterably opposed to McCormack plan.

Fred Lyon--100% for the Russell plan and unalterably opposed to the McCormack plan.

Fred Searls--For the Russell plan.

Franz Schneider--For the Russell plan.

Private Views of Officials of War, Navy, NIA, FBI and Congress:

Outside of the Department, in the other agencies concerned with intelligence, i.e., War, NIA and FBI, there is increasing impatience with the endless intelligence row which has been raging in State. The view has been repeatedly expressed by Admiral Souers and Colonel Douglas of NIA and by J. Edgar Hoover of FBI that the Secretary should take prompt action to determine the dispute so that these agencies can begin to cooperate with State in the intelligence field on an effective basis.

The views of Congressman Rabaut and Congressman May are well-known to you.

Supporters of the McCormack Plan

Support for the McCormack plan is concentrated chiefly in the Bureau of the Budget (Schwarzwalder), the Washington Post (Wayne Coy) and the New York Herald Tribune (Joe Barnes).

Conclusion and Recommendation

Conclusion

There is only one recommendation that can be made. The row must be immediately settled, i.e., by the close of business 16 April on a mutually livable formula or it must be determined immediately and finally on the merits.

The best interests of the Department, indeed the best personal interests of the Secretary, make such action imperative.

Recommendation

If A-R does not report to S by the close of business 16 April that a satisfactory settlement has been negotiated, the Secretary should immediately sign the orders (now before him), putting into effect the recommendations of the Russell plan of 25 February 1946.

J. Anthony Panuch

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

Washington, April 18, 1946.

//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. For a copy of Panuch's handwritten note to McCormack enclosing a copy of Russell's memorandum (ibid.), see the Supplement.

I am satisfied that no compromise of existing Departmental differences with respect to the organization of the Office of Research and Intelligence is possible at the working levels. The discussions now in process hold no substantial promise of reaching a settlement of the basic issues involved and will in all probability result in the reopening of the controversy with renewed bitterness.

I believe that in the best interests of the Department this issue must be promptly and finally determined. On February 25, 1946, I submitted to you my report on this matter, together with my recommendations as to its final disposition./1/ I reaffirm the conclusion and recommendations of that report.

/1/Document 85.

Donald Russell

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

Washington, April 20, 1946.

//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.

I attach Colonel McCormack's proposed order on Intelligence./1/ It represents no real change in his position with one exception: upon "mutual agreement" the area intelligence groups may be detailed to the geographic offices. This provision, which has been previously understood orally, was added because Colonel Ty Wood states that inevitably the result of this policy of "mutual agreement" will be an organization such as that I recommend, which incidentally Colonel Wood personally recognizes as "theoretically sound". If the result is to be the administrative set-up I have recommended, why not issue my proposed order and end the Departmental bickering and indecision? Let's get to the right result now and end the backbiting.

/1/The proposed order 133.20 was sent by Tyler Wood to Matthews, Henderson, and Vincent under cover of a note of April 19. (Ibid.) See the Supplement.

To follow Colonel McCormack's plan, knowing that ultimately we will reach the result I propose, will bring continued Departmental strife. I believe the adoption of my proposal is the only way to tie the organization together. This is not a question of Intelligence--it is a question of sound Departmental organization.

I am also attaching the proposal submitted by me./2/

/2/Document 85.

DR

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