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

35. Memorandum From the Assistant Director for Administrative Management, Bureau of the Budget (Stone) to the Assistant Director, Bureau of the Budget (Appleby)⁰

Washington, October 26, 1945.

SUBJECT

• Comments on Proposal “U.S. Secret World-Wide Intelligence Coverage”¹

Attached is a draft of a reply from you to Tom Clark covering his plan for a new intelligence setup.² The plan is analyzed below.³ This memorandum does not comment upon the question as to whether this country will or will not engage in any clandestine intelligence operations. Also, comment is limited to the proposal as presented. This is more difficult to do than if the plan had been presented in more detail. Other than stating that the plan is similar to that in operation in South America and supplying a chart, the document only contains three paragraphs outlining the plan itself. These three paragraphs provide for a joint operation in every country of the world without stating how joint operation is to be achieved; for a top group to determine basic policy, and for an operational committee, without stating either what basic policy is or what the operational committee would do; and provides a unit for evaluation of material supplied by the three agencies. (Later a reference is made to one agency.)

Certain elements of the proposal and of the arguments in support of it appear to have validity.

1. There is a need for a “legal” (or perhaps it would be better referred to as “security”) attaché. I have previously commented on this in a memorandum of September 19, a copy of which is attached.⁴

2. Geographic concepts as a basis for delimiting the operations of several agencies in the security intelligence field are not valid.

3. “Police” functions and the collection of a limited kind of intelligence relating to the police function can be combined.

The weaknesses of the proposal as presented are largely those of omission.

1. In using the South American experience as the basis for planning a world-wide system the proposal fails to consider the vast difference between the two situations. In South America, our operations were not directed primarily at the countries in which they were conducted. Our operation there was not secret in the sense that it would have to be in the big league. It was aided greatly by Hemisphere defense agreements. Most of the countries were at war as allies. A whole series of actions resulting from our intelligence was possible by agreement (the interning of alien suspects, the Proclaimed List, cooperation of the countries involved in shutting down radios, effecting travel control, etc.). Even under these most favorable conditions, the operation in South America could not be characterized without reserve, as it is in the document, by such phrases as secret, economical, efficient, proved effectiveness, no elaborate superstructure, simplicity of structure, flexibility of operations, assured secrecy, no embarrassment.

2. The plan seems to contemplate the centering under the legal attaché of all undercover agents and liaison with other intelligence agencies. It also apparently envisions no other secret intelligence operation in the Government. The memorandum clearly indicates the limited view of intelligence from which this springs. Security intelligence properly done requires the use of some secret activity. To center all secret intelligence, however, in the security agency would be to inhibit the development of any really basic intelligence and would probably find us in any future emergency again, as at Pearl Harbor, on alert no. 1 (i.e., against sabotage). Daily conferences with the Ambassador under this system would tend to enshroud him in a picture of “threats to democracy” and “intrigue” that would warp his over-all view.

3. The same objection arises from centering coordination in the security agency. The proposal simply adds an Assistant Secretary of State to the present Interdepartmental Intelligence Committee, calls it an Operational Committee, and apparently relies on it for coordination.⁵ The present IIC has been a device for securing cooperation in triplication rather for attaining any coordination. Such a committee, working only under basic policy and relying principally on daily meetings in the Embassy, is not an adequate coordinating mechanism. Delimitation by dictionary, i.e., “legal,” “military,” “naval” will not work. Coordination can only be achieved by the central preparation of detailed operating plans. Coordinating authority should be centered in the interdepartmental committee which the President on September 20 directed Secretary Byrnes to set up. If the current thinking of key persons in this field is any guide to the possible decision of the interdepartmental committee, secret intelligence will not be centered in any one department but will be conducted primarily centrally or under strong central direction. The Justice proposal actually would permit FBI to have all responsibility for secret intelligence under only the mildest kind of direction.

Attached is a suggested reply to Mr. Clark. Both this memorandum and the reply to Mr. Clark have been cleared informally with Colonel McCormack, Special Assistant to the Secretary of State for Research and Intelligence.

Stone

0. Source: National Archives and Records Administration, RG 51, Records of the Office of Management and Budget, Director’s Files, Series 39.27, Intelligence. Confidential.
1. Document 17.
2. The draft is not printed. For the reply as sent, see Document 37.
3. This and the preceding sentence are handwritten on the source text.
4. Document 11.
5. A Presidential directive of June 26, 1939, instructed the FBI and Army and Navy Intelligence to coordinate their investigations of espionage and sabotage cases and ordered the heads of the three services to act as a coordinating group. A Department of State representative participated informally. For details, see Troy, Donovan and the CIA, pp. 12–14, 16–21, and 46–51.