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

97. Memorandum From the Director of the Strategic Services Unit, Department of War (Magruder) to the Assistant Secretary of War (McCloy)⁰

Washington, October 25, 1945.

SUBJECT

• Strategic Services Unit as of mid-October, 1945

1. This report is submitted pursuant to your letter of 26 September 1945.¹ It covers significant changes during the first half of October in the situation described in letter to you dated 9 October 1945,² subject: Strategic Services Unit as of 1 October. Reference should be made to that letter for a more complete description of SSU’s organization in the field and its continuing activities.

2. The total personnel strength of SSU has been reduced from 9,058 as of 1 October to 7,640 as of 19 October. Of the latter figure, nearly 3,000 persons—either in this country or en route home or awaiting transportation from abroad—are in process of separation. By 1 December it is estimated that overall SSU personnel strength will be reduced to 1,913. Details of present and contemplated future deployment are set forth in the table attached hereto as Exhibit 1.³

3. A provisional organization of SSU has been prescribed by General Order No. 2 dated 12 October 1945, attached hereto as Exhibit 2.

4. In addition to secret intelligence, counter-espionage and administrative services units, the portions of OSS transferred to SSU included related para-military activities. To reduce these related activities and at the same time create an efficient peacetime clandestine intelligence agency has required great care so that necessary elements and assets of the para-military branches will not be lost. In order to assure maximum effectiveness of the peacetime unit, steps have been taken to incorporate personnel with experience in the specialized training given by OSS (Schools and Training Branch) techniques of photographic intelligence (Field Photographic Branch) and the production of personal documents and identity papers (CD and Reproduction Branches) required for clandestine operations. In addition, so that the United States may in the event of future wars be prepared to use effectively and to develop doctrines and techniques used by OSS in this war for sabotage, support of underground forces (SO Branch) and clandestine subversion of enemy morale (MO Branch), personnel have been incorporated in the reduced organization equipped to collect and process intelligence on future foreign developments in these techniques. While in all cases the number of people to be retained is very small, outgoing personnel must be screened with care to select the best fitted persons.

5. The SSU budget for the current fiscal year has been reduced by the House to $8,500,000. (H.R. 4407) Of this sum $2,846,176 remains unobligated. (See Exhibit 3) This balance will not cover SSU operations beyond 1 January. Thereafter an additional appropriation of $625,000 per month will be required if the assets of SSU are to be preserved until the effectuation of plans for peacetime intelligence. The above unobligated sum, which must be available if SSU is to continue in operation until 1 January, makes no allowances for contingencies and depends upon adherence by the State Department to a previously projected plan of reduction in force. In addition if this sum is to be sufficient it is necessary to have Congress alter the form of the appropriation in the House Bill to shift approximately $600,000 from the vouchered to the unvouchered funds category. (See Exhibit 3) Steps are being taken to do this.

6. Overseas Missions

a. Great Britain. Activities continued along the lines described in the above-mentioned letter of 9 October. Intelligence was made available on a regular basis to the American Delegation, Council of Foreign Ministers.

b. France. An interesting aspect of continuing operations was X–2’s control of certain enemy agents—with the knowledge of the French—so as to uncover any revival of enemy intelligence.

c. Germany. Clandestine activity was stepped up in areas [8 lines of source text not declassified].

[1 paragraph (7–1/2 lines of source text) not declassified]

e. MedTO. X–2 conducted penetrations designed to uncover subversive activities against Allied interests and continued its work relevant to the complete liquidation of the former German Intelligence Service in Italy and the Balkans. In addition, it performed general security services for all American agencies. Work on the Intelligence Photographic Documentation Project (IPDP) was being brought to a close by SSU, but an effort was being made to have this project continued by other branches of the service.

[4 paragraphs (1 page of source text) not declassified]

j. Hawaii. This mission closed on 15 October.

7. Action has been initiated to transfer from the SSU rolls personnel engaged in the following activities:

a. War Crimes. Request has been made of Mr. Justice Jackson that he review SSU personnel engaged in this work (see letter of 9 October) to determine whether they might not be transferred to the Office of Counsel under the Assistant Secretary of War.

b. Strategic Bombing Survey. Negotiations are under way with the U.S. Strategic Bombing Survey (USSBS) to secure agreement for the transfer to USSBS of 51 persons now furnished by SSU on 120 days’ temporary duty for employment in the strategic bombing survey of Japan. All but one of these are at present under orders to proceed to Japan.

c. Intelligence Photographic Documentation Project. Recommendation has been made that this project be transferred to the jurisdiction of the Joint Topographic Subcommittee of the JIC of JCS. If adopted, this recommendation would permit a reduction of 132 members of the Field Photographic Branch now engaged in this work.

John Magruder ⁴

Brig. Gen., USA

0. Source: Central Intelligence Agency Records, Job 83–00036, Box 3, Folder 16. Secret; American Eyes.
1. Document 95.
2. Document 96.
3. Exhibits 1–3 are in the Supplement.
4. Printed from a copy that bears this typed signature.