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

59. Memorandum From the Chief of the Operations Division, War Department General Staff (Craig) to the Members of the Lovett Committee⁰

Washington, December 18, 1945.

SUBJECT

• Reconvening of Special Committee on Central Intelligence Agency to advise the Secretary of War on the State Department proposals

1. There are basic differences of approach between the Central Intelligence Organization recommended by the Special Committee in its report to the Secretary of War and the State Department proposal. The fact that the State Department proposal is worked out in considerable detail, with many features that are not acceptable to the War Department, has tended to delay a decision on the basic differences. If the important points can be solved now, these details can be dealt with by negotiation or by the Agency itself after its creation.

2. The Special Committee’s recommendations to the Secretary of War should therefore confine themselves to the basic differences between the two plans. In considering these, and the extent to which they are eliminated by the concessions in Mr. McCormack’s modifications, the Special Committee should bear in mind the advantage of reaching an early agreement with the State Department to permit some form of organization to come into being promptly. If there is long delay, there is a real danger that the personnel and going-concern value of the OSS group will be lost. In this sense, nearly any form of organization will be better than none.¹

5. Although Mr. McCormack’s memorandum of December 15, 1945,² indicated that there are only two open questions, the status of the Executive Secretary and the nature of the Advisory groups, (the latter of which has lost its importance in view of Mr. McCormack’s concessions), there are in reality at least three other important issues. Each of these, together with the first point mentioned by Mr. McCormack, is discussed below:

a. Independent Status of the Agency. The War Department plan calls for a centralized, independent agency, separate from the State, War and Navy Departments, and with its own personnel. The State Department plan calls for a mere committee of representatives of the three departments, operating through personnel detailed from the three departments. Although the War Department plan is preferable in this respect, it will require legislative authorization at the expiration of the First War Powers Act and, under the Independent Office’s Appropriation Act, 1945, will in any event require specific appropriations within one year of its creation by Executive Order.

Recommendation: That the Special Committee advise the Secretary of War to accept the State Department proposal in this respect, on the conditions that the State Department agree to the action recommended in subparagraph c below and that the State Department agree to the action to insert a provision to the effect that the Authority shall consider the advisability of legislation establishing an independent central intelligence agency under the direction of the Authority.

b. Status of the Executive Secretary. The War Department plan calls for an independent Director. Under the State Department plan, the Executive Secretary, although appointed with the approval of the Secretaries of War and Navy, is named by the Secretary of State and must be a State Department official. Mr. McCormack’s concession that the Executive Secretary must be responsible to the Authority and may be removed by a majority of the Authority, goes a long way to meet the War Department’s objections, but does not do so entirely. The implication that this is primarily a State Department show still remains. It should be eliminated in the interest of achieving maximum cooperation as well as to make provision for a possible future period in which the military interest in intelligence may be predominant.

Recommendation: That the Special Committee advise the Secretary of War to accept the State Department proposal as amended in this respect, subject to amending the first and second sentences of paragraph 5,³ and inserting an additional sentence after the second sentence of paragraph 5, as follows:

“The Executive Secretary will be appointed by the Chairman with the approval of the Secretaries of War and Navy Authority. If any person appointed as Executive Secretary shall not be, at the time of his appointment, an official of the Department of State State, War or Navy Department, he will be appointed as such an official of one of such departments, as recommended by the Authority, before assuming his duties as Executive Secretary. The first Executive Secretary shall be, or shall be appointed, an official of the Department of State.”

This recommendation requires the deletion of the phrase “and may be officers of the Army or Navy” from the sentence beginning “Deputy Secretaries will be” in paragraph 5.

c. Functions of the Agency. The War Department plan envisages the agency as an operating group, in addition to its coordinating functions. This appears in the provisions that it shall, “a. Operate as the sole collection agency … in the foreign espionage and counter-espionage fields”, and “e. Accomplish the evaluation and synthesis of intelligence…”. The State Department plan assigns the agency primarily coordinating and policy-making functions, although it permits the establishment of centralized operations when the Authority so determines. This point is of importance to the War Department for the following reasons:

(1) It is felt that there is a definite need, in the field of high-level, long-range politico-military intelligence, for an expert research and analysis unit relatively independent of any of the Departments.

(2) It is believed that clandestine operations must be centrally controlled.

(3) It is fraud [feared?] that the value of the OSS organization will be lost if allowed to continue in its present dispersed condition and equally if assigned entirely to the State Department.

Recommendation: That the Special Committee advise the Secretary of War to insist that synthesis and evaluation and foreign espionage and counter-espionage be recognized as primary functions of the agency and that the appropriate OSS personnel, particularly the research and analysis group, be made available in the first instance to the agency, subject in all cases to the right of the Authority to determine that any such functions and personnel should be decentralized to one or more of the existing intelligence agencies.

d. Management by Committees. The State Department plan calls for the creation of numerous committees to deal with each major phase of the agency’s functions. The plan states that “such committees will be the primary means by which the Authority will carry out its mission” (par. 7). The War Department does not believe that committee management is suited for all phases of the agency’s functions, perhaps because it sees the agency as having more operating functions than are called for by the State Department plan. In any case, this is a matter that can best be left to the agency to work out for itself in the light of experience.

Recommendation: That the Special Committee advise the Secretary of War to approve paragraph 7 of the State Department plan, subject to the following:

(1) Amendment of the first sentence as follows: “The Authority, upon recommendation of the Executive Secretary, will may establish committees each of which will cover a major subject, area or kind of operation to deal with any of the subjects, areas or kinds of operations within the purview of the authority.”

(2) Deletion of the second sentence of paragraph 7.

(3) Deletion of paragraph 13 and consequent renumbering of subsequent paragraphs.

6. If the above recommendations are approved by the Secretary of War and accepted to by the Secretary of State, the major obstacles to agreement will have been removed. Although a number of details of the State Department proposal will remain to be worked out, they can be solved either by negotiation or by leaving them to solution by the agency itself. The following are examples of such matters:

a. Advisory Groups. Mr. McCormack’s concessions have narrowed the differences to a point at which they should prove readily adjustable by negotiation. They have chiefly to do with nomenclature and minor revisions in the description of functions.

b. Definition of Intelligence and Security Intelligence. The State Department proposal should be made more precise to eliminate any indication that the agency may conduct espionage or counter-espionage in the United States and to exclude any police functions. This can be accomplished in negotiations.

c. Control over Other Agencies. It may be necessary to limit the Authority’s right to control and direct agencies other than the State, War and Navy Departments. This can also be left to negotiations.

d. Independent Budget. This question, as part of the larger question of the independent status of the agency, can be left to the determination of the agency itself.

Recommendation: That the Special Committee make no recommendation to the Secretary of War on these matters and other relatively minor points of difference.

H.A. Craig ⁴

Major General, U.S.A.

Attachment⁵

Rider “A”

3. In view of the fact that the Secretary of State is apparently supporting Mr. McCormack’s proposals, the War Department must choose between two courses of action. It must determine either to make the maximum concessions to meet the State Department views, refusing to concede only on vital matters, or to adhere to the original War Department plan and rely on its being forced upon the State Department by the President. This memorandum is written on the assumption that the first course is to be adopted, which seems to be implicit in the Secretary’s instructions to War Department representatives that they should attempt to reconcile the differences with the State Department.

4. In this connection, the question of personalities becomes important. If the War Department is committed to acceptance of Mr. McCormack as the first director or executive secretary of the agency, it would appear advisable to let him have the kind of organization that he wants, at least at the outset, rather than to force him to operate with a type of organization of which he disapproves. On the other hand, if the War Department intends to oppose Mr. McCormack’s candidacy, it would seem very advisable that the War Department immediately attempt to select a candidate of its own. Otherwise there is a good prospect that Mr. McCormack will soon be entrenched in a position from which it will be difficult to dislodge him.

0. Source: National Archives and Records Administration, RG 263, Records of the Central Intelligence Agency, Troy Papers, December 1945. No classification marking.
1. At this point Craig indicated by hand that “Rider A,” which is printed as an attachment, should be inserted.
2. Document 56.
3. References to this and to other numbered and lettered paragraphs and subparagraphs of the Department of State proposal are to the attachment to Document 54; see the Supplement.
4. Printed from a copy that bears this typed signature.
5. No classification marking.