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

415. Memorandum From the Secretary of State’s Special Assistant for Research and Intelligence (Armstrong) to the Under Secretary of State (Webb)⁰

Washington, February 16, 1950.

SUBJECT

• Status Report on Problems Relating to CIA

I believe it would be helpful if I gave you a brief status of report on the various problems which we have under discussion with or about CIA.

At the start I would like to point out that there are a number of areas of CIA operation where the Department is quite satisfied and where no substantial issues exist as between the Department and CIA. Notable in this connection are the following:

• Office of Scientific Intelligence;
• Contacts Branch (exploitation of foreign intelligence from domestic sources, U.S. business firms, etc.);
• Foreign Voice Broadcast Monitoring.

These come generally under what are known as “services of common concern,” i.e., activities which can best be performed centrally. CIA performance appears to be adequate.

The areas in which difficulties are arising and the present status of the problems are as follows:

1. OSO–OPC relationship (secret intelligence vs. secret operations). You are aware that this problem is complicated by an extremely difficult organizational question and by a delicate element of personal relationships. General Magruder has drafted a memorandum¹ intended to “smoke out” Secretary Johnson’s attitude. On the basis of this memorandum Secretary Johnson has concurred in his discussing the question with the Department. The Department can probably agree with General Magruder’s memorandum in most sections, but finds a number of points on which far more detailed clarification is required—elements in which there may arise differences of view. Discussions are continuing between the Department, NME, Hillenkoetter and Wisner, which we are hopeful will result in a draft NSC directive for your approval.²

2. National Intelligence Estimates. This complicated and technical question has been before you only to a limited extent in connection with NSC 50 (action on the Dulles Report) and related discussions with Hillenkoetter. It nevertheless is one of the most serious issues between the Department and CIA and will almost surely have to be taken up in the NSC in order to give proper direction to CIA.

In essence the problem is this: The Department and the NME believe, as did the Dulles Committee, that CIA in its research intelligence activity should utilize the resources of the various departments and produce the best possible integrated national intelligence estimates on the basis of departmental contributions. CIA, on the other hand, has interpreted its directive to “produce national intelligence estimates” to mean that it must do all of the research on all subjects which might be called for by the President, the NSC, or the individual departments, and regardless of the resources of the several departmental intelligence arms. CIA, through various papers and activities has indicated that they do not accept the NSC interpretation of national intelligence to be that intelligence which transcends the competence of any one department, but instead has taken national intelligence to mean anything which they find appropriate to prepare. Consequently CIA’s research organization (ORE) has grown out of all proportion, it constitutes a duplication of departmental, particularly State, research intelligence activity, and—most important—few true national intelligence estimates are forthcoming.

We have prepared a staff paper covering the various facets of the difficulty. We are now combining our ideas with those of General Magruder.³ We propose very soon to raise the problem to you with the recommendation that you devote sufficient time to brief yourself on its complex nature and to advise us on what you consider the proper course of action from that point on. It might be necessary to submit the question to the Security Council for definitive resolution.

3. Program for Cooperation between Department and CIA on “Cover” (STOSO Agreement). A proposed agreement for revision of arrangements for administering CIA people under Foreign Service cover has been under review by the Department for a number of months. The proposal is in the hands of Mr. Rusk for consideration prior to discussion with Mr. Peurifoy. A positive recommendation should come to you shortly.

4. CIA Budget. Following NSC approval of the submission of the CIA budget, the Department, in collaboration with the NME, has drafted a number of comments on the budget for the NSC, which you have approved in draft.⁴ This will now be reviewed by Secretary Johnson as a joint NME–State statement.

0. 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, State–CIA Relationship 1949–1956. Top Secret. Drafted by Howe. The date is handwritten on the source text.
1. Document 408.
2. Document 419.
3. See Document 420.
4. Document 417.