Foreign Relations of the United States, 1950–1955, The Intelligence Community, 1950–1955

24. Memorandum From the Secretary of State’s Special Assistant for Intelligence and Research (Armstrong) to the Under Secretary of State (Webb)¹

Washington, September 14, 1950.

SUBJECT

• Review of Relations with CIA

The purpose of this review is twofold:

1. To give you a general roundup of the state of our relations with the CIA at this juncture, as a new Director is coming in;

2. To ascertain which, if any, issues should be discussed with Admiral Hillenkoetter as a result of your letter,² written just prior to your departure for Europe, in which you suggested getting together with him to take up any problems which exist in relation to one particular phase of the Department’s relations with CIA, namely, secret intelligence [1 line not declassified].

Any review such as this naturally focuses on areas of difficulty; these, however, must be kept in the perspective of our total relations which in a great number of areas are on the whole satisfactory. In this connection it should be pointed out that the Department’s relations with CIA on the following important matters are of the best:

1. Defectors—each case invariably presents a knotty problem, but in the course of the last six months they have been smoothly and cooperatively dealt with by the Department, CIA, and the Military Services.

2. Foreign Broadcast Monitoring—an important “service of common concern” in which CIA produces for the Department and other agencies a vast quantity of voice monitoring reports.

3. Scientific Intelligence—A “service of common concern” and also a coordinating mechanism in which CIA’s performance has been good. This office also works very closely with U/A, Mr. Arneson.

4. Contacts Branch—again a “service of common concern” in which CIA exploits the foreign intelligence available in the US through contacts with foreign nationality groups and individuals and US business firms with representatives abroad.

I should point out also that whereas the problems which I shall discuss below are focused primarily in OSO (secret intelligence) and ORE (research intelligence) it should not be construed that trouble exists with these offices on all points. Rather, there is a wide area of cooperative effort and useful collaboration and liaison with only a few, if significant, areas of disagreement on policy or method.

By way of general comment I would like to indicate that there are two factors in CIA attitude and method which we find difficult to deal with and which are often a source of misunderstanding:

a. CIA is reluctant to give us full information—especially voluntarily, but even after request. This applies to some intelligence information and also to activities in which they participate. In this it is our view that they carry security too far, or use security as an excuse for withholding information.

b. Similarly, we find CIA reluctant to come to us directly with their problems, to identify issues and seek solutions directly. We get complaints, but we find an unhealthy lack of direct approach to us by senior officers seeking constructive solutions to problems large and small which inevitably arise.

The following outline summarizes the points of difficulty, present and potential, in our relations with CIA.

I. Coordination of Intelligence Activities.

The Department has long felt that CIA has been deficient in fulfilling its responsibilities for leadership and direction in the coordination of intelligence throughout the Government. This responsibility within CIA is fulfilled essentially by two mechanisms:

a. The Intelligence Advisory Committee (IAC) composed of the Chiefs of each of the intelligence services, advisory to the Director.

b. A staff office (COAPS) composed of officers contributed by the various agencies and headed by a State Department officer, responsible to the Director and charged with formulating any procedures for the coordination of intelligence activities.

The Department is confident that change for the better can be anticipated not only by virtue of the new Director who will assume the chairmanship of the IAC and should fulfill the leadership expected of the Director of CIA in coordination matters, but also through the appointment of James Q. Reber as the State Department officer in charge of COAPS, who will also be Executive Secretary of the IAC.

I believe that no useful purpose would be served by discussion of this matter with the outgoing Director.

II. Intelligence Collection Programs.

This problem, which has very wide implications and is pointed up by the Korean incident, is discussed in a separate, accompanying memorandum.³

No useful purpose would be served by a discussion of the matter at this time with the Director.

III. Research Intelligence and “National Intelligence.”

The difficulties which have arisen between the Department and CIA in this area stem from divergence of views as to the nature of “national intelligence” and the method of producing it on the one hand, and, on the other, a conflict of ideas on the location of responsibility in the Department and CIA for the production of research intelligence in the political and economic fields. The latter of these two problems is perennial and may in some measure be clarified with a solution to the problem of national intelligence. In any event, the steps necessary to bring this problem to a solution will only come in time and should be improved with the arrival of the new Director.

Some advance has been made in the problem of “national intelligence” which was sharpened by your exchange of Admiral Hillenkoetter on the joint State-Defense proposal. General Magruder has made a preliminary exploration with Admiral Hillenkoetter and believes that an area of agreement may be possible.

Pending the outcome of these negotiations and the installation of the new Director on whose decision any final revision will depend, I believe no useful purpose would be served in raising this matter with Admiral Hillenkoetter.

IV. Organization for Secret Intelligence (OSO) and Secret Operations (OPC).

You will remember that some months ago general agreement was reached between the Department of Defense, CIA/OSO, CIA/OPC, and ourselves on a reorganization which would combine OSO and OPC and would take the form of an NSC directive (proposed NSC 10/3).⁴ Further action on this document, however, was delayed pending a solution to the problem of personnel involved in the reorganization and now must await the new Director for action and implementation.

No useful purpose, therefore, would be served by discussions on this matter with Admiral Hillenkoetter. However, you should know that although there is no disagreement as between the Departments of State and Defense and CIA on this question, the Defense Department is currently considering a revision of authorities for wartime with respect both to OSO and OPC activities, and this may present some difficulties.

V. [Heading and 10 paragraphs (49 lines) not declassified]

VI. CIA Budget.

Each year the CIA submits an over-all budget figure to the NSC prior to submission to the Bureau of the Budget. It appears that over the course of the last few years no agency—neither the NSC nor the Budget Bureau nor the Office of the President, nor, for that matter, Congressional committees—examines the CIA budget with any thoroughness to warrant assumption of the responsibility for approval.

At best it is a very difficult matter to determine what degree of review should be made of the CIA budget to bring about a balance between the security factors which are obviously involved on the one hand, and the minimum requirements for assumption of responsibility by the Secretaries of State and Defense in the NSC, on the other.

Last year at your suggestion General Magruder and Halaby for Defense, and Sheppard and Howe for the State Department, were given an informal presentation of the budget programs for some of the offices of CIA. This was an initial step on the part of the NSC to form a basis for judgment for approval of the budget. Since that time an effort has been made by the Departments of State and Defense to arrive at a formula for an annual review of the budget. Consideration was given, for instance, to the possibility of appointing each year a special ad hoc high level group under the NSC for this specific purpose. More acceptable seems the possibility that the Director submit to the IAC on a secure basis for its comment the budget programs of the several CIA offices so that the NSC would at least have the benefit of the IAC advice.

This problem has advanced no further and almost surely should await the installation of the new Director and a new look at the problem with him. (As yet no discussions on this subject have been held with CIA itself.) In the meantime, no purpose would seem to be served in a discussion of the problem with Admiral Hillenkoetter.

General Conclusion.

1. The Department’s relations with CIA are, with some exceptions, satisfactory.

2. The areas of difficultly are by no means impossible of solution and most, if not all, should be soluble with the new Director.

3. Although you asked to have a meeting with Admiral Hillenkoetter on your return, we know of no problems between the agencies which are of a kind that can be solved by such a discussion.

Recommendations:

1. That you take the opportunity to ask Admiral Hillenkoetter if he has any matters he wants to discuss, but you do not press for a meeting.

2. That you consider showing this memorandum to General Smith on a personal and informal basis soon after he takes office.⁵

W. Park Armstrong, Jr.

⁶

1. Source: Department of State, A/MS Files: Lot 54 D 291, CIA 1948–1952. Top Secret. The memorandum was under cover of a September 19 memorandum from C.E. Johnson of the Management Staff of the Bureau of Administration to Humelsine, which indicates that a September 20 meeting was scheduled among Webb, Humelsine, Armstrong, and Howe to review relations with the CIA and Johnson’s recommendations for changes in the proposed memorandum to Webb. Johnson recommended adding a statement on the inadequacy of CIA’s intelligence collection and production. He further wanted to delete the reference to showing the memorandum to Smith, preferring this be conveyed to Webb orally. He also believed Smith should be invited to the Department for the meeting and briefed on the Department of State role in and capabilities for intelligence.
2. Not found.
3. Dated September 14; attached but not printed.
4. Further information on the proposed merger is in Foreign Relations, 1945–1950, Emergence of the Intelligence Establishment, Document 419. The draft NSC 10/3 is printed as an attachment to that document.
5. A handwritten comment in the margin just below this paragraph reads, “Is this adequate?”
6. Printed from a copy that bears this typed signature.