Foreign Relations of the United States, 1945–1950, Emergence of the Intelligence Establishment

276. Memorandum From the Director of the Policy Planning Staff (Kennan) to the Under Secretary of State (Lovett) and Secretary of State Marshall⁰

Washington, May 19, 1948.

Attached is an NSC paper, Director of Special Studies, dated May 10, 1948.¹ This is an important matter—expansion of covert activities and establishment of a central directorate over all such activities. I would be glad to explain it personally to you, if you wish.

The underlying paper has been cleared with Bohlen but not with other offices of the Department because it intimately involves NSC 4–A, a document knowledge of which for security reasons has been limited to you, Assistant Secretary Allen, and the Policy Planning Staff. It is, however, based largely on and adheres to the fundamental principles of one prepared by this Staff, entitled “Political Warfare”.² Our paper on political warfare was made available to Mr. Bohlen, Mr. Allen, and the four geographical offices. They either gave affirmative approval or indicated no objection. I therefore feel that the attached NSC paper would be generally acceptable to them.

Outside of this Department, the underlying NSC paper has been cleared by the other consultants to the NSC and, I understand, it has been approved in principle by Mr. Forrestal and the JCS.

The recommendation that the Director of Special Studies (covert operations) be directly under the NSC does not represent the ideal solution sought in the attached NSC paper. Organizationally, the ideal solution would be to place the Director of Special Studies, for cover and intelligence reasons, under the Director of CIA. S/P did not recommend this solution because, at the present time, the CIA set-up in respect both to personalities and organization is not favorable to such a development and it is not likely that there will be any material change in this situation in the near future. We therefore reluctantly decided to let the CIA sleeping dog lie and recommend a separate organization which might at a later date be incorporated in CIA.

Subsequent to approval of the attached paper by the NSC consultants, I received a copy of a memorandum to Admiral Souers from the Survey Group headed by Allen Dulles (Tab A).³Dulles hits the organizational problem head on, recommending (a) removing secret intelligence from CIA and placing it, with covert operations, under a separate director or (b) placing covert operations under CIA—which we feel should not be done at this time. I have high regard for Dulles’experience and knowledge in this field and, therefore, attach great weight to his recommendations. But the implications of his recommendations are so far-reaching that I think they should be discussed by you and Mr. Forrestal rather than in the lower levels of NSC.

Meanwhile, time is running out on us. If we are to engage effectively in intelligent, organized covert activities, appropriations must be obtained from the Congress. Congress, however, is soon to adjourn. Therefore, if we are to get into operation in this field before the end of summer, Congress must be approached immediately with a request for the necessary funds.

Recommendations:⁴

It is recommended that :

1. You approve the principle underlying the attached NSC paper that this Government expand and bring under unified direction its covert activities;

2. You propose to Mr. Forrestal that together, in your discretion, you invite Dulles either to (a) replace Hillenkoetter as Director of CIA, with covert operations under him, or (b) assume directorship of covert operation and secret intelligence under Hillenkoetter, or (c) accept the position of Director of Special Studies as recommended in the attached NSC paper;

3. If Dulles accepts, you ask him (a) to present for your and Mr. Forrestal’s approval his plans for covert operations and (b) immediately to approach Congress for the funds necessary to conduct these operations;

4. If Dulles declines, you ask him to recommend a Director of Special Studies as proposed in the underlyingNSC paper.

George F. Kennan ⁵

0. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Policy Planning Staff Files 1947–53: Lot 64 D 563. A May 11 version of this memorandum (ibid.), is in the Supplement.
1. Document 274.
2. Document 269.
3. Document 275.
4. There is no indication on the source text that Marshall approved or disapproved the recommendations.
5. Printed from a copy that bears this typed signature.