Counter-Espionage (X-2)

This section was taken from the official history of OSS. The text has been slightly edited.

Counterespionage (CE) is a distinct and inde-pendent intelligence function. It embraces not only the protection of the intelligence interests of the government it serves, but, by control and manipulation of the intelligence operations of other nations, it performs a dynamic function in discerning their plans and intentions, as well as in deceiving them. An effective counterespionage organization is therefore an intelligence instrument of vital importance to national security.

The development of a secret intelligence organi-zation makes protective counterintelligence inevitable. However, to confine such activity to its protective aspects would be to eschew the development of the affirmative phases of counterespionage, which give it its unique and distinct value.

A counterespionage organization usually develops slowly. Basic to it is the vast body of records, which is the key to its operations and which normally takes years to accumulate. A second requirement, however, no less vital, is skilled personnel familiar with the intricate techniques by which the intelligence efforts of other nations may be controlled and directed.

The United States lacked these basic factors. At the outbreak of the war, its counterintelligence activities were performed by several agencies and departments of the government and the armed forces, principally FBI, G-2, and ONI. Fortunately, the domestic security problem, most important at that time, was efficiently handled by the FBI, which kept itself alerted to threats from beyond US borders by liaison with Allied security services, chiefly those of the British. With respect to areas outside the Western Hemisphere, however, the United States had virtually no security protection. Also, the divisions of interest of the various American organizations concerned with counterintelligence and the limitations upon their several missions had resulted in incomplete and duplicative records, which were scattered and uncoordinated. The lack of complete past and current records of enemy espionage organizations, their personnel, and activities made the effective pro-secution of counte-espionage seem impossible.

The development by COI/OSS of a secret intelligence organization to operate outside the Western Hemisphere made it obvious that it would be necessary to establish a security organization for its protection. It is, of course, inevitable that a secret intelligence agent in a foreign area will attempt to acquaint himself with the intelligence activities and undercover personnel of other nations operating in the same area. This, however, provides only localized and uncoordinated knowledge. Furthermore, it does not take advantage of the affirmative possibilities inherent in the possession of such knowledge, if it is coordinated with related data and supported by an efficient centralized organization.

It was widely recognized that centralization was the key to counterespionage. This may be said to be true of secret intelligence generally. When it became apparent in early 1942 that SI would have to set up some form of security organization, the question of centralization was raised. By midsummer, the subject had been discussed by COI/OSS, not only with other agencies and departments of the government, but with the British Security Coordination. Such discussions stimulated the move to establish a CI division in SI.

The British had been sharing with COI, G-2, FBI, ONI, and other interested agencies certain counterespionage information. Experience gained in unraveling Axis espionage and sabotage organizations had developed a high degree of efficiency in the coordinated net of security services, which the British had long maintained. In addition, they had built up over many years one of the essential instruments for CE work—a comprehensive and current registry on hostile and suspected persons and on their organizations and relationships. Nothing remotely like it on overseas CE intelligence was available to American agencies. Nor could such a body of records be produced except after decades of extensive operations. Therefore, the British were particularly anxious that the handling of the information, which they made available to the American services should be consonant with the highly specialized CI techniques they had evolved. This demanded carefully trained specialists, solely concerned with CE material loosely coordinated with US agencies.

In August 1942, therefore, representations were made by the British, which strongly suggested an arrangement between the British and American agencies that would provide a more restricted and secure channel for the handling of CI information. If such an arrangement was concluded, the British indicated that they would be willing to make available all the CI information in their possession. The significance of this offer to the development by the United States of a counterespionage organization cannot be overstated. The United States was given the opportunity of gaining in a short period extensive CE records, which represented the fruits of many decades of counterespionage experience. Further-more, the British offered to train American personnel in the techniques essential to the proper use of those records and the prosecution of CE operations.

The proposed arrangement envisioned the establishment of a civilian CE organization within OSS—in short, an American entity similar to MI6(V) and MI5, the British services for overseas and home security respectively, both of which were civilian services only nominally under military control. Following preliminary discussions in the United States, Donovan designated one of his special assistants to proceed to London in November 1942, where he worked out with the British arrangements whereby a small liaison unit of the projected CE organization would be stationed in London. Procedure for transmission of the CE material to the United States also resulted from these discussions.

At that time it was intended that the new CE unit to be established within OSS should become the exclusive link between British and American CE services. FBI, however, had long maintained a close and cordial liaison with British security services, particularly MI5, in the interests of American security in Western Hemisphere. It was therefore agreed that FBI, in view of its jurisdiction over CE in Western Hemisphere, would continue its independent liaison with British services insofar as exchange of CE information relating to that area was concerned.

Definitive arrangements having been concluded, a Counterintelligence Division within the SI Branch of OSS was established by General Order No. 13 of 1 March 1943. Arrangements were made to send four officers and four secretaries to London for the sole purpose of preparing the British channels to the United States. This group arrived in London by the end of March. The American offices of the Division were established in the OSS headquarters in New York City, which adjoined the offices of the British Security Coordination. CE material from overseas and from Washington was received through the British in New York and was indexed and carded by the CI Division there. The New York office served as headquarters for the new Division for some six months.

As the CI Division of SI expanded, realization of the full possibilities of counterespionage, together with certain problems of relationships both within OSS and with various British agencies, made it evident that the ultimate development of the CE function would not be possible if its divisional status was maintained. In the first place, counterespionage, as explained above, serves a greater purpose than the protection of secret intelligence activity. Secondly, the British SIS and their domestic and foreign security services were totally separate and distinct organizations between which rivalry existed. Also, COI/OSS policy had been from the beginning to maintain complete independence in the secret intelligence field, whereas close cooperation and collaboration with British CE were essential to the CI Division. As has been noted, it is doubtful that the activity could have been more than nominal during the war years had not the cooperation of the British been offered and advantage taken of the unique opportunity thus presented.

An additional factor which complicated the position of the new Division as a part of SI was that the approach to Controlled Enemy Agents (CEA) necessarily had to functional, in effect, as opposed to the geographic setup of the SI desks; that its Registry (which formed its major activity in the United States) had to be completely separate; and that CE security problems were distinct from those of a secret intelligence service.

In view of these factors, it was proposed that the Division be given independent status as one of the intelligence branches. In this proposal SI concurred on 15 June 1943. Therefore, General Order No. 13 was recinded and a new order issued to create the Counterespionage Branch (X-2) of the Intelligence Service of OSS.

X-2 was therefore free to develop the possibilities of CE in the protection of the security of American intelligence activities abroad, as well as the protection of national interest in foreign areas. In addition, the Branch was in a position to take advantage of long British experience and knowledge of the techniques of manipulating enemy agents and therefore to enter the intricate field of CE operations.

The London office of X-2 soon became, and remained for the duration of hostilities, the base for the control of CE operations in Europe. The broad liaison established in London, consequent upon the elevation of X-2 to branch status, diminished the significance of the relations with the British in New York. Further, the arrangements for carding and processing of incoming material in New York, useful while the American carders were in the tutorial stages and needed the help of their British colleagues, became awkward when that stage had passed. Much of the material arrived initially in Washington, had to be transmitted to New York, for a short time, and then returned to the permanent and central X-2 Registry in Washington. In addition, CE material had to be screened from the mass of information flowing into other OSS branches in Washington, and such material could not be conveniently sent to New York for carding. Therefore, in September 1943, the research work in New York was discontinued and the files transferred to Washington. The move facilitated the work of X-2, tightened the unity with which the Branch operated, and placed the control of the Branch closer to the central authority of OSS.

By September 1943, X-2 was therefore in a position to address itself to the job of developing a major security organization in the remaining period of the war.

Organization
In January 1944, by the end of the formative period, it was possible for X-2 to lay out a firm plan of branch organization. An assistant Chief, who served as head of the office in absence of the Chief, dealt with current policy problems. The Administrative and the Liaison Officers, together with a Deputy Chief, reported directly to him.

The Administrative Officer was responsible for all budget and finance matters, the procurement of office personnel, arrangements for home and overseas travel, and other administrative functions.

The Liaison Officer established and maintained channels for the exchange of intelligence with other branches of OSS, with ONI, G-2, FBI, State Department, Office of Economic Warfare (OEW), X-B, and other American and Allied agencies.

The Deputy Chief had charge of the procurement of military and civilian personnel for overseas duty; for the headquarters services to overseas operations and research; for the training, indoctrination and briefing of all personnel; and for the organization of field offices and field communication procedures. He had under him a field procurement and training officer.

The Deputy Chief was assisted by an Executive Officer whose main concern was the four offices, which handled Security, Planning, Personnel, and Training.

Headquarters intelligence activities were organized under an Operations Officer and a Director of Research who reported to the Deputy Chief.

The Operations Officer was responsible for all overseas operations; for all routine functions in connection with procurement for overseas personnel; for cover, communications, and other like arrangements.

The Director of Research supervised the work of the "geographical" desks—divided on the basis of theaters of war—where reports were processed and marked for carding and for distribution. He also supervised the Traffic Index and Registry Section, which maintained the card index system of enemy agents, organizations and their relationships, maintained files of documents and cables, and received, recorded, and dispatched all X-2 documents. Under him were four desks for special studies: The Enemy Intelligence Organization Section—which produced overall studies for use in operational planning and for the information of field personnel—the Watch List Unit, the Insurance Intelligence Section, and a CE/Smuggling Section. The X-2 Art Unit was added to these special sections a year later.

The first drastic change in the early arrangements for handling the intelligence (Registry-Desk) activities in the Washington headquarters came in April 1944, when the Divisions of Operations and Research were abolished. Their functions, hitherto separated, were combined under geographic area offices, supervised by Theater Officers. The Carding Section was discontinued as a unit, and its files were divided among the geographic area offices. Thereafter, the carding was done under the immediate direction of the area intelligence officers. The alphabetical control card file, which showed the location of all personality cards, was located in the X-2 Registry. The Office of Special Studies continued as an independent unit on the same level as the Theater Offices and reported directly to the Deputy Chief. The former Director of Research was made Coordinator of Analysis to assist him.

A further change was made in November 1944 with the creation of the Office of Executive Assistant to the Chief of the Branch. This officer was given authority to act in the name of the Chief over the entire Washington X-2 organization. At the same time, a Chief Intelligence Officer was appointed to supervise the work of all intelligence personnel, this eliminating the Office of the Deputy Chief.

The Office of Special Studies was abolished, as was that of the Coordinator of Analysis. These functions were place under the Chief Intelligence Officer, as were those of the Theater Officers. A vetting Officer was placed on this staff, and the X-2 Registry was taken from the administration office and put under his direct control. This adjustment placed all research activities—intelligence reporting, the making of intelligence records processing, and the like—under the direction of the Chief Intelligence Officer. One of the purposes of the change was to bring headquarters handling of intelligence into line with that of the London War Room, which had been set up to assist SCI units with armies and army groups in the field after D-day.

The reorganization symbolized the fact that the field offices, controlled and directed in the beginning by the area desks, were largely self-sufficient. The executive function was on the receiving end, either of requests for services, which could be handled by administration or for information, which could be produced by a staff intelligence officer.

Registry
One of the main coordinating CE instruments is the body of records—of foreign, enemy or potential enemy personnel, organizations, relationships, activities, known plans—kept by the registry section. In a certain sense, the organization exists to produce its files of current, tested, and readily available information and to apply them to the protection of national interests. It is, therefore, at once an end and means of all CE activities, being the focal point at which all lines of such activities meet. It thus provides the basis for the coordination, which is essential. The files provide leads for the filed, which in turn produces material for the growing accumulation of data in the files. The CE registry may supply data useful in illuminating decisions on the application of national policy in certain areas or for the light it can throw on the problems met by CE workers in the field. No positive intelligence collecting agency can operate safely for long without the protection CE files can afford to its agents.

CE cases may take years to mature. Items in the files that have every appearance of being dead can suddenly become of primary importance. Thus it is known that enemy organization will normally plant as many "sleeper" agents as they can to be alerted and used at a later date. It is well in all cases to go on the old CE axiom: "Once an agent, always an agent—for someone." Such individuals may not be important in themselves, but they will in due time be visited by and call attention to more significant figures.

The assembling of CE records is usually a long and expensive business. The European intelligence services—because of the geographical, industrial, military, and political situation of their states vis-a-vis their neighbor states—have been forced to recognize the significance of security information. They never go out of business, and they regard the money laid out for keeping up their files as money well spent. CE operations cannot be mounted quickly and still be made to yield useful returns.

Liaison with other government agencies and the intelligence services of friendly governments and, on occasion those of unfriendly ones, provides a valu-able source of CE information. This is particularly true in time of crisis or of war when mutual interest can be served by exchange of information, thus the X-2 liaison in Washington with FBI, G-2, ONI, State Department, Office of Censorship, Treasury Depart-ment. Foreign Economic Administration (FEA) and Office of War Information (OWI), was carefully maintained throughout the war. The reports passed on by other branches of OSS also added valuable material to the files. The richest sources, however, were those opened to the Branch by the British, and, in varying degrees, by other Allied services.

Like control of the enemy's pouched messages, the interception, when possible, of his telephoned, telegraphed, or wireless messages provided positive and security intelligence of the highest value. A CE organization inevitably secures—especially in war-time from captured agents—information very useful to the cryptographic department of its government; in turn, such relevant information as those departments pass on is used to protect the security of national interests. Interchange of mutual services apart, there is normally in all major intelligence systems a close tie, based on security considerations, between the overseas CE organization and the departments that work on codes.

The improvement of the mechanics of the Registry, and of the related processing of reports by intelligence desks, was a matter of constant concern to X-2. The efficiency of the CE Registry is an index of the efficiency of the organization that exists to produce and apply it; any maladjustments in the organization of the headquarters office is felt there seriously; maladjustment in the Registry, in turn, reacts on the work of the liaison section and on the operations of the agent network. The basic principle that the CE reistry must be separate from other intelligence registries and be served by people trained in CE methods and procedures was recognized at an early date; when an independent section of the OSS Registry within X-2, manned by Branch personnel, was established. It took some time, however, to get the Registry and desk arrangements running smoothly. Such arrangements aimed at a full and free flow of information from and to the field, a speedy, accurate recording system, and an organization of the records which would at once reflect the worldwide unity of the agency and make all items easily available. In the beginning, the Registry-desk problems arose chiefly from a lack of experience and of trained personnel.

The Branch Chief was able to announce in September 1945 that X-2 had received a total of more than 80,000 documents and reports and 10,000 cables, yielding a card file of some 400,000 entries. Lists, reports, and studies based on this material had been distributed to US departments and agencies, to Allied organizations, and to X-2 offices in the field. In the period 1 April 1944 to 1 April 1945, for example,

X-2/Washington distributed 2,780 classified reports, ranging from overall studies to reports of more usual length, to government depart-ments and agencies.

Personnel Procurement and Training
The Personnel Procurement and Training and the Administrative Sections were faced with multiple difficulties, which inevitably grew out of the rapid expansion of the Branch in the first six months. The task of carrying through the necessarily slow processes of contacting, checking, assessing, indoc-trinating, training, and briefing more than 200 CE workers and subsequently dispatching a large percentage of them to the field was particularly formidable in view of the Branch's rigid security standards. The strictness of the procedural and security arrangements of a CE machine, the tightness of allotments of Army and Navy personnel during those months, the shortage of transportation, and other elements in the wartime situation restricted freedom of choice and movement.

With settlement of policy and practice with respect to recruiting and training and the acquisition of a larger number of more experienced officers in the Washington field office to help with the program, the training of the 400 recruits, later added to X-2, became more manageable. A formal indoctrination course, which followed attendance at the assessment school, was set up in June 1944 for overseas personnel. It was given in part in the headquarters offices and in part at a staging area in New York City while personnel awaited transportation to the field. A month later a program was established for the training of headquarters officers and secretarial workers.

Percy E. (Sam) Foxworth, Special Agent in charge, FBI, New York City.
PHOTO

Inter-Branch Relations
All matters of inter-Branch policy were determined in Washington. Questions arising on matters within the jurisdiction of the London office were decided in Washington on information from London. As the field operational control office, London was vested with the authority to make decisions necessary for field operations in Europe, North Africa, the Balkans, and the Middle East.

Problems of adjustment were inevitably numerous in the first few months—especially those that involved interpretation of the basic principles of X-2 to other branches of Special Operations (SO) and to other agencies.

The peculiarities of a CE organization were for a time not fully understood within OSS and the necessity for special X-2 arrangements was not at first acknowledged. The need for separateness of its Registry was one such matter. Unique CE security regulations, especially with respect to cable communications, was another.¹ Also, Special Training (ST) had originally based its curricula on the special needs of SI and SO, and changes, which were necessary for the adequate training of X-2 personnel, could only be brought about slowly. Misapprehensions as to the close relations between X-2 and the British services were not infrequent. For the last months of 1943, then, the establishment of Branch policy in these respects was one of the main preoccupations of the Branch Chief and his assistants.

The definition and adjustment of such policy decisions in terms of the organization and work of the Branch were constant. Frequent adjustments within the frame of established policies were called for by management difficulties that arose from forces beyond the control of the Branch—the regulations of other services and the like—and by those that came from the necessarily exploratory and tentative character of the organizational pattern during a period of very rapid expansion.

Liaison With Other Agencies
One of the chief activities of X-2/Washington was the transmission of CE information to other user agencies and for that reason the Liaison Section was one of its busiest units. In addition to responsibility for arrangements within the Branch to expedite liaison with Allied services, the Section maintained continuous liaison with State Department, G-2, ONI and FBI, as well as with Air Intelligence (A-2), the Office of Censorship, FEA, OWI, Treasury (including the Bureau of Narcotics, Secret Service, War Refugee Board, Foreign Funds Control, Bureau of Customs, Bureau of Internal Revenue), and such other governmental departments and bureaus as were interested in CE information. It also maintained the American contact with British counterintelligence and British Imperial Censorship.

In the year before the German collapse, more than 3,000 reports were disseminated to Washington agencies. Of these, 682 went to the Office of Censorship, 410 to FBI, 977 to G-2, 480 to State, and 125 to ONI. In addition to such disseminations, X-2 made available to FBI a list of approximately 5,000 documents of an intelligence nature from its records. The liaison with FBI was concerned largely with the exchange of information on the overseas background of persons of interest to the Bureau; with intelligence regarding enemy agents who might operate in the United States; and with the coordination of policies and arrangements for the handling of certain double agents prior to their departure from Europe for the United States.

Special Units
A Watch List Unit was set up in July 1943 to collect for dissemination to the US Office of Censorship, British Imperial Censorship, and French Censorship all CE information derived by X-2 from the communications of known or suspected agents. The Unit listed all names of such agents and their cover addresses, letter boxes, or mail drops so that enemy communications could be intercepted and surveyed. It was possible for the Unit to pass on to the censorship offices with which it cooperated studies not only on persons and organizations but also on methods of secret communication. In turn, it received like information from those offices.

An Insurance Unit was established when X-2 headquarters were in New York, and its work was directed from there throughout the existence of the Branch. Its function was the detection of enemy intelligence activities operated through insurance cover. As its work progressed, it evolved into an X-2_SI unit, with its most profitable investigations those of a secret intelligence nature. Never a large unit—it was staffed by six officers who were insurance experts—it did impressive work. For example, its London office secured, after other American intelligence investigations had failed, information valuable to the military, naval, and especially air commands with regard to the Far East, as well as Europe. The procurement of such information illustrated once more the intelligence principle that the richest intelligence on an area frequently can be gathered at a point outside that area.

A CE Smuggling Unit, planned toward the end of 1943, was designed to coordinate information on smuggling from all available sources because of the frequent tieup between that activity and espionage. It was hoped that such a unit, surveying, for instance, the smuggling traffic between Iberia and South America, could produce for OSS, FBI, and other American intelligence agencies studies on the relations between various Fascist intelligence systems, their communications, etc. Actually, this promising plan came to nothing because of a shortage of officers. As a result, the geographical desks had to deal piecemeal with such problems as they arose.

An X-2 Art Looting Investigation Unit was established in the second half of 1944, when it became apparent that the Germans intended to carry on with plans for subversive action after the cessation of hostilities and were making arrangements for a supply of funds during the post-hostilities period. It was known that various sorts of treasure, in the form of items of small bulk but great value (jewels, paintings, objects d'art), which could be converted into money, had been stolen or otherwise acquired and were being stored at various places in Europe. The Allies appointed the Roberts Commission and the McMillan Commission to advise the US War Department and the British War Office, respectively, on questions involving the return of such objects to their rightful owners. X-2 was primarily interested in the people who would attempt to dispose of works of art of this kind, as a source of information on current and future activities and plans of the enemy. The staff of the Art Looting Investigation Unit, which was related to the commissions mentioned above, worked under the direction of the London office.

OSS Field Security
The rapid growth of CE files, resulting from Washington and London liaison and from field operations, made it possible by early summer of 1944 for X-2 to be increasingly useful to OSS field security at a time when SI and other OSS operations ramified on the European Continent. Pursuant to a directive from Donovan, X-2 took over the CE investigation of a large number of new categories of OSS personnel: In July 1944, 677 names were vetted;² in August, 1,167. Field stations of American agencies, other than OSS, had recourse to X-2 files for the vetting of employees, especially in enemy territory under American control, as did foreign offices of the State Department in connection with visa applications and arrangements for the entry of members of foreign missions to the United States. Such work was performed under the supervision of an X-2 Vetting Officer.

By 1944, also, careful studies of prisoner-of-war lists were undertaken through liaison with the Captured Personnel and Materials (CPM) Branch of MIS, with increasingly interesting results. Subsequently, an arrangement was made whereby an interrogation officer from CPM was assigned to X-2 for CE liaison. He was briefed by X-2 from its files so that CPM could use the material without endangering the security of sources. Relations with the office of the Provost Marshal General were maintained to locate prisoners of war in order that identifications of certain prisoners as known or suspect agents could be supplied.

Field Operations
The principal function of CE was to penetrate the enemy's or potential enemy's closely guarded undercover intelligence services in order to discover his intelligence objectives. Knowing the enemy's aims, it was the further function of CE to neutralize his intelligence efforts or control and direct them to its own purposes.

One of the principal methods by which this was accomplished was the manipulation of double agents, that is to say, captured agents who would be persuaded to continue their activities for the enemy, ostensibly in good faith but actually at the direction of X-2. Various forms of pressure were brought to bear upon such agents, depending upon the particular situation. Generally, however, the motivations of self-interest and self-preservation were sufficient. A second standardized form of double-agent operation would be the case of an agent recruited by X-2 and infiltrated into enemy territory to induce the enemy to employ him as an agent and return him to Allied territory.

In both of the above basic types of double-agent operations, there were varying benefits from the stand point of intelligence. The controlled agent could call for supplies or money. His reports to the enemy could attract replies, which revealed not only actual or projected enemy intelligence activities, but enemy intentions of greater magnitude. Further, such a controlled agent could serve as a magnet to draw other enemy agents into the CE-controlled network.

Such operations naturally required the utmost delicacy in handling. The two basic types of operations mentioned above were subject to an infinity of variations and adaptations, depending upon the particular circumstances. On occasion, operations involving controlled agents became extremely complicated. The enemy, of course, engaged in the same types of activity. Thus, an enemy agent might be infiltrated into Allied territory to seek employment as an agent. His objective would be to return to enemy territory, ostensibly working for an Allied service, but actually operating for the enemy. Such an agent might be tripled, if his real purpose were discovered when he sought employment with Allies.

Another variation would be a captured agent who might agree to be doubled, that is, to continue ostensibly operating his radio or other channel of communication for the enemy while under Allied control. If the enemy realized that such an agent had been "turned," he might try to feed the Allies deceptive material in the form of questionnaires. However, if it were realized that the enemy was aware of Allied control, the agent might be quadrupled in an intricate operation of deception and counter-deception. On occasion, the oration might become too complicated, whereupon it would be dropped.

One of the principal uses of double agents was to feed the enemy such seemingly good information from a given area that he would feel no need of sending additional agents to the region. In this fashion, X-2 could gain complete control of the intelligence, which the enemy received from a particular area.

There were infinite variations in methods of manipulating agents. They depended solely upon imagination, ingenuity, and judgment. The value of success in such operations was, of course, great. Control of the enemy's intelligence instruments provided an important channel of deception; examination of the enemy's intelligence question-naires to agents gave an indication of what he wished to know and thereby provided a basis for deducing his plans and intentions.

A primary principle was not to induce open defections on the part of enemy agents. If the enemy were aware that one of his agents had defected to the Allies, not only was an important channel of deception and a source of information closed, but the enemy would be inclined to send other, and perhaps more successful, agents to the region in question.

The actual operations of X-2 were, of course, carried out in the field. It was the function of the Washington headquarters to receive and preserve in usable form the fruits of field operations. The Washington Registry, however, made many field operations possible. The central Registry, in which was collected all available data concerning enemy intelligence organizations, agents, and subagents, as well as organizational and individual relationships, provided the coordinating instrument, which was vital to success in counterespionage. Those files did not lose their value at the conclusion of the given operation, or of a war.

Individuals or relationships, which have seemed dormant for a long period, may become active again and provide the key to detection of widespread intelligence activities.

The uncoordinated fragments of enemy subversive personality lists, which had existed in June 1943 when the Branch was established, had by 1945 grown to a registry of some 400,000 carded names. These records, together with those of the FBI, provided a foundation for American security intelligence.

By October 1945, when OSS liquidated, X-2/Washington had become the headquarters for a widespread net of overseas stations, with a total of some 650 personnel. London was operational headquarters for North Africa, Western Europe, the Balkans, and the Middle East, with missions in France, Belgium, Italy, Germany, Austria, Switzerland, Sweden, Spain, Portugal, Rumania, Bulgaria, Hungary, Greece, Turkey, Syria, and Egypt. CE work in India, Burma, Ceylon and China had been organized around headquarters in New Delhi, Myitkyina, Kandy, Kunming, and Shanghai, each of which reported directly to Washington.

In addition to the valuable files of CE intelligence kept current by these stations and the reports resulting from liaison, X-2 had developed two other major elements of an effective CE organization: A pool of trained and experienced personnel and a net of relationships, principally in the form of basic agreements and operating contracts, with Allied counterespionage services at home and abroad.

Virtually all of the X-2 staff had received extensive CE operational training and experience in cooperation with Allied specialists in such work, both in the United States and overseas. The high success of a number of exclusively conducted X-2 operations in the field indicates the degree to which the staff of the Branch benefited from this experience.

In the two years and four months of its existence, X-2 worked out firm agreements with the FBI, G-2, and the State Department. In London, the basic operating agreement that was negotiated in 1943 with MI6(V) was supplemented by a scarcely less important agreement with MI5 in early 1944. X-2 thus gained full access to the experience and extensive files of both the external and internal British CE services. Similar working agreements were concluded with the French services. Liaison contacts were established with the competent services in liberated countries, notably Belgium, Holland, Denmark and Norway. Basic agreements with the military, for example, SHAEF, AFHQ, Com Z, and 6th and 12th Army Groups, implemented by SCI units had prepared the way for X-2 to service the occupation authorities after the collapse of Germany. Similar agreements in the Far East had opened up an additional field of operations.

Starting at a late date, X-2 developed a CE organization for wartime service, which could take its place among the major security services of the world. No small part of the credit for making this achievement possible was due to the records and experience made available by the British. In the course of exploiting that opportunity for wartime purposes, the United States assembled the elements of an effective CE service.

(b) X-2/London
A Counterintelligence Division of SI, organized March 1943, became the Counter-Espionage (X-2) Branch of OSS by June of that year. Despite the late start, by 1945 the United States had acquired an experienced group of professionals in the complicated techniques required for the protection of US services abroad. The advance was made possible by the extensive cooperation of British MI6 (Section V) and MI5.³

The British Services
From the beginning of the war, the British had urged creation of such a service either in OSS or jointly between OSS and the FBI. After it had been formed, the British carried out a thorough policy of offering the new section complete access to files in London, sources, secret methods, procedures, and knowledge of the personnel, organization, and operations of what was probably the world's most experienced and efficient, and therefore most carefully safeguarded, security system.

Characteristic of the apprentice training offered OSS by the British was that given to some X-2 members in the double-agent section of MI5(B). These officers were assigned desks in the offices of that section and had free access to the files of double-agent cases, to the traffic of current ones, and to the officers who had directed or were directing such cases. Normally, in the course of their study, they met both double and controlled enemy agents whom the British were operating, helped to gather the "chicken feed," which was to be transmitted to the Germans, and learned the relationship between the section to which they were attached and the other intelligence organizations which shared the exploitation of double-agent networks. One American officer was given a desk in the room of the director of the double-agent section and was made party to all conversations and conferences on problems arising in connection with management of current British cases, some of which were of a long-range character and therefore involved the highest security. When the secret methods of the British agencies were fully understood, the importance of the security risk they took was appreciated as overwhelming.

It was on this basis that X-2/London opened offices adjoining those of the British and began in March 1943 to learn the job. It became obvious early that London would have to be the center of X-2 operations in Europe, North Africa, and the Middle East due to the presence in London of other Allied counterespionage services and the sources of intercepted material, which were available only there. It was clearly impossible to transmit in a short time the vast stores of CE material in the British Registries, made available to X-2 through its liaison with MI6(V). Until the Washington CE files had grown from liaison sources, and from X-2's own subsequent field operations, to something like the quantity of those in London, action on cases of American interest would have to be handled by the group stationed in England.

This decision was not intended to, and did not, stop the flow to the United States of CE material of all classifications. The accumulation of CE files in the OSS Registry by the end of the war attested to the steady and voluminous flow of CE reports and studies from the London desks to those in Washington. It did mean, however, that, on the whole such material would be of use there chiefly for information purposes and for organization into a basic American registry of CE intelligence relating to areas outside the Western Hemisphere.

Other Liaisons
The prime necessity of maintaining a direct and close coordination, not only with the British but with other Allied CE agencies was another important consideration in centering American overseas CE headquarters in London_at least until the last stages of the war. The headquarters, files, and staffs of the Free French, Norwegian, Dutch, Belgian, Polish, Czech, Greek, and Yugoslav Governments were located in London, as were those of the French Service de Securite Militaire. The eagerness of the chiefs and officers of these services to cooperate with the Americans provided an opportunity that no American CE group could disregard.

Liaison with the French was closer than that with other agencies, although it never reached the level of that with the British. British counterespionage agencies were unwilling to admit the French services and reserved joint operation to X-2 only.

Source material came not only from Allied counterespionage services but also through liaison with SHAEF Evaluation and Dissemination Section, Combined Services Detailed Interrogation Center (U.K.), London Military Documents Center (the earlier Military Intelligence Records Section), War Department, War Office, War Crimes Commission, Special Operations Executive (SOE), Admiralty, FBI, ONI and US Army Central Registry of War Criminals and Security Suspects.

Training
CE schooling of the more formal kind supple-mented the apprentice training. From the earliest days, English and French officers from London headquarters or from the field shared their experiences with X-2 personnel in frequent formal training talks. The subjects of these talks ranged from notes on communications, office procedures, and the like to analyses of the overall CE situations in certain areas. One series illustrated the interrogation methods of the Germans (by men who had been interrogated by them) and of the English (by men who had conducted the interrogations of enemy agents). Such English establishments as central registries, interrogation centers, and training schools were open to X-2 officers for observation visits. Another principal element in the X-2/London training was the schooling that grew out of the day-to-day association with colleagues in the British and other Allied CE services.

Desks
X-2 was first organized on a regional basis to match British opposite numbers: (1) The Western European section was established with three main desks, French (including Belgian and Dutch), German, and Swiss; (2) the Iberian section included Spanish, Portuguese, Italian and_through 1943_North African desks; (3) The Scandinavian; and (4) the Middle Eastern sections (established during the first quarter of 1944) handled the affairs of their areas under an arrangement of one desk each. American CE interests in Eire were covered by an officer who made visits to Dublin at regular intervals and kept close liaison with the section of MI5 that dealt with British security problems in southern Ireland.

In May 1944, Reports section was added to these and placed under an officer whose responsibility was the supervision of all X-2/London reporting procedures.⁴

The work of these desks comprised the bulk of X-2 activity: carding, collating, and interpreting all reported items of CE information in terms of the centralized intelligence available in land through the London registries; preparing notes for the field based on these studies, embodying information, suggestion, and direction; answering specific inquiries of field officers; preparing, for Washington and the field, handbooks, and other overall studies of the CE situation, enemy organizations, and enemy methods; disseminating relevant intelligence items to other Allied agencies; and conducting liaison with other OSS, American, British, and Allied offices.

X-2 also personally checked SI agents against the British files, as well as employees of other US agencies. Such vetting had disturbed SI/X-2 relations for some time, because SI feared that the tracings would reveal its agents to the British services. Growing recognition by the other branches of OSS that such revelations could be avoided and that the benefits received from that service were valuable enabled X-2 to carry out more fully the directives of the Joint Chiefs of Staff and of the Director, OSS, to safeguard the undercover operations of the other branches in the field. Further evidence of profitable cooperation between SI and X-2 was the preparation by the X-2/French Desk, in July 1944, of CE briefs used for SI agents who were dispatched into five areas in France during that month. As the armies advanced, X-2 also conducted interrogations of SI agents who had been overrun by the armies and had been returned to England.

Preparing Special Counterintelligence Teams (SCI)
In preparation for the invasion of Europe, the X-2 intelligence sections for the areas to be occupied had two main tasks: the gathering of as great a store of basic counterespionage files as possible from the registries of the British and other Allies; the preparation of a machine consisting of Special Counterintelligence teams⁵ for work with invading armies, and a headquarters War Room to support their operations.

These tasks were clearly parts of the one main purpose: the liquidation of the enemy intelligence and subversion services. The earlier operations, from neutral countries and newly gained footholds in Africa and on the Continent, aimed at drawing a tight intelligence ring about the periphery of enemy-occupied and dominated Europe; those that accompanied the attack of the armies applied in the field the stores of intelligence so far gathered toward the neutralization and control of enemy services.

There was in London a startlingly large and accurate mass of data on individual enemy agents and their organizational relationships, on channels of communication and the like; it was possible not only to list and map enemy offices and operational stations, communications chains and training schools, but also to pinpoint the location of individuals and of related groups of the German satellite undercover agencies. This information had been gathered from the activities of Allied CE stations in neutral countries, the surveillance of known enemy chains, the operations of double agents and controlled enemy agents, the interrogation of defected or captured enemy agents, censorship sources and various other means. The SCI teams carried this information to the field with them—information, which they, and the CIC teams of the armies, exploited with results that expanded at times in almost geometrical progression: the swift capture and interrogation of one pinpointed agent led to the identification and location of one, two, or three others, who each might yield like identifications in his turn.

Members of the SCI teams to accompany American armies in the field were trained and briefed in the X-2/London office, and, for a group of selected officers, in the double-agent section of MI5 (B). The training consisted of formal lectures on enemy organizations and their relationship; the study of CE files of invasion areas; classes in codes and communications procedures; work with desk personnel in the preparation of SHAEF cards, target lists, and the like; land discussion and study group meetings with experienced British and American officers.

To supply a stream of information to SCI and CIC teams in the field, a series of cards was prepared by MI6 (V) and X-2. These were file cards, edited in a standard style, on which were summarized in a complete but compact form all information available from all sources on a single enemy or suspect personality. Cross references to organization and personal relationships were contained in the data given or were specially noted. A maximum use of symbols and abbreviations made it possible to pack the cards with information, so that reference to related cards could provide the basis for a quick but fairly thorough interrogation. Additions were to be made to these cards as new information came in; when need arose, amended new cards were to be printed and distributed. The cards were produced in several colors: data on persons connected or believed to be connected with the Abwehr or the Sicherheitsdienst (the main target of Allied CE agencies) were printed in pink cards; those on political quislings and collaborationists, on buff; those on friendly persons, on white. The Evaluation and Dissemination Section (EDS), which was set up by SHAEF to collect and collate information on the Nazi Party, police, paramilitary organizations, etc., received the pro forma of the pink cards assembled by X-2 and MI6(V), and printed and distributed them to the CI staffs.

War Room
In late April 1944, the training of the SCI units and Western European Desk's arrangements to serve them, were tested in a three-day field exercise carried out, together with SI and SO units, at Horsham under simulated battle conditions. An analysis of the weakness of the liaison and communications methods, brought out under this test, indicated the need of more standard procedures, which were accordingly prepared and published in May. The document fixed the terms under which a joint British and American headquarters' Western European Desk, to be known as the SCI War Room, was to operate, and defined the relationships between SI, SO, and X-2 with respect to the handling of agents, the interchange of information, and the interrogation of certain categories of persons. The plan established two separate organizations in Chief of Staff to the Supreme Allied Commander (COSSAC). One of these was the Evaluation and Dissemination Section (EDS) to compile, analyze, edit, and distribute (a) the semi-overt type of counterintelligence (on collabora-tionists, police, political papers, etc.), and (b) such secret intelligence as MI6/X-2 furnished it for production and distribution in the form of handbooks and pink SHAEF cards. The other was the so-called SCI War Room, an unofficial arrangement completely under the control of MI6/X-2 for the purpose of servicing SCI unites in the field and EDS in London.

The SCI War Room contained master maps pinpointing all known German agents and espionage centers, including "national" subagents of Allied-controlled German agents. It was a headquarters desk, geared to serve as the operational and intelligence base for the units with the armies. In the period before the liberation of Paris, it handled all requests, even for supplies, from the field.

Besides the normal desk work of receiving, processing, carding, and distributing the mass of information from all sources and preparing target lists and studies for the unites, it answered queries for checks on arrested or suspect agents, assisted with fuller information for field interrogations, and arranged with field units for shipment to the UK interrogation centers of enemy agents of importance or special promise as double agents. By September 1944, X-2 began to receive and distribute through the

War Room copies of the valuable "020 Reports"⁶ (on the interrogation of enemy agents at Camp 020, the chief British interrogation center for agents apprehended in the United Kingdom or brought there from other countries). Until a special Vetting Desk was set up at the end of 1944, the War Room had also the task of carrying through security tracings on an increasingly large number of SI agents recruited in the files as military operations progressed.

Reorganization
In early March 1945, a reorganization of the War Room and desk system was accomplished, which (a) made of the War Room a broader and less secure agency, and (b) gave to the desks the job of handling double agents. The desks were now organized, not according to countries within the SHAEF area of responsibility, but according to branches of the German intelligence services.

The SHAEF G-2 Joint Counterintelligence War Room was to work directly for the SHAEF Counterintelligence Branch (CIB) staffs during the last phase of military operations and through the liquidation period that would follow the collapse of Germany. It was based on the large and efficiently staffed MI5 registry, together with that of MI6, and a number of posts in it were assigned to MI5 officers, secretaries, and clerical help. The French services were also admitted to participation.⁷ The Director and Deputy Director were attached to SHAEF and were not responsible to their respective Services. The War Room had neither concern with the running of agents, although it did receive relevant information produced from such operations nor was it responsible for German activities outside the SHAEF area except for Austria, which, by special agreement, was to be the concern of the War Room during the occupational phase.

The new War Room was looked upon by the CIB staffs as part of their own machine, and they had recourse to it constantly for information on the German intelligence services and guidance in the conduct of their operations. This relationship made for a diffusion of information on enemy intelligence personnel and organizations to lower field units, which had hitherto known little or nothing about them. The War Room assisted in training and briefing interrogators assigned to American Interrogation Centers, a number of whom came to London for study and conference. It also sent to the field overall studies on enemy sabotage activities and methods, although none was prepared on such general topics as types of agents employed, missions, cover stories, etc.⁸

At the same time, it was decided that the London headquarters' handling of double-agents cases should be done, not by the War Room, but by the appropriate desks of X-2 and MI6(V), with the understanding that information derived from double-agent sources necessary for the operations of the CI staffs would be transmitted to the latter in a secure form by the War Room staff.

Desks were also relieved of the manual work of producing or amending SHAEF cards, by an arrangement that had all checking and processing, as well as the making of new entries on cards, done by a staff of expert women at the Registry. The translation, evaluation, and distribution of all in-coming captured documents were managed by a single section under the direction of an experienced officer, who supervised the production of English precis of relevant documents and of accession lists of all documents for officers of the interested desks. That officer also supervised Registry action on his material. Such work as overall studies, including the London weekly survey of the CE situation for SHAEF, was taken care of by a small section of expert editors.

The most striking of the new features, however, was that the desks were assigned, not to the study of the GIS in certain areas, but to that of highly particular sections of the Abwehr or the Sicherheitsdienst themselves. Thus the several desk officers could become final experts on assigned sections and subsections of the German Intelligence Service (GIS). Given that concentration of specialty, an officer could have at his command all the information available on his subject and could, therefore handle more business more effectively in a day then he could if his interests were more dispersed and the necessity of refresher reading on various kinds of scattered cases necessary. Such functional arrangement of targets was an ideal one for a CE agency since the targets were not areas, but enemy undercover agents and operations themselves. Normally the area desk was the only

workable solution to the problem of world coverage; the final integration of data had to take place in general study sections working with registry files. In 1945, however, the enemy undercover agencies were concentrated in a small enough area to permit desk specialization.

An X-2 London Desk
A typical desk history, through the various reorganizations, was that of the German Desk, which began its work in January 1944. As was true of all the London desks, its first activities centered chiefly on the job of building up its basic file of records from the large accumulations of the counterpart British desk. It focused on the enemy undercover organizations in Germany, which for the purposes of the Desk, included Austria.

In August, of 1944, the Polish, Czechoslovak, and Swiss desks were incorporated into a German Desk, in preparation for a German War Room to service SCI teams and the filed stations, before and after the German surrender. Actually, no such War Room came into full operation for the season that the joint Z-2/MI5/MI6 SHAEF, G-2 Counterintelligence War Room came into being in time to deal with the mass of work on the arrests, interrogations, and the like, that came with the decline and collapse of the German military strength. The new arrangement left to the Desk the management of all special cases and the processing and distribution to Washington of the reports transmitted to it by the War Room on German cases. Lists of suspect persons, organization studies of the GIS, and area target lists and similar material made in preparation for the support of the field teams in Germany were, despite the change, distributed to the field.

Targets list, worked out from sources ranging from Top Secret material to German telephone books, were found to be highly useful to Theater-Forces (T-Forces) and CIC teams, which went into towns and cities with the first army units. Such raids yielded in turn, from captured documents and the speedy interrogations of captured GIS personnel, fuller and more recent information of target ahead. A staff of the German section in the Paris office worked on this project exclusively. Its lists, produced and distributed at top speed, were, when time allowed, supplemented and corrected by cabled and pouched notes drawn from the London files of the German Desk and of the War Room. Headquarters could, by this time, draw on fully checked and detailed interrogation reports of captured or defected German officers and agents of high grade. Toward the end of the fighting and after, only the more highly placed and more knowledgeable members of the GIS could be given thorough interrogation. They would yield more information of the significant personnel in the echelons below and above them, with the least expenditure of time and energy.

The German Desk collaborated with the War Room, not only in making target lists, but in the preparation of studies and reports on the methods and techniques of German intelligence services, recent changes in the relationships among branches of the various German services, their plans for long-range resistance, sabotage and intelligence operations, and related activities.

During the period of settlement after VE-Day, the Desk served the X-2 staffs at Wiesbaden, Frankfurt, Munich, Salzburg, Berlin, Stuttgart, and Bremen. All special cases handled by these stations were directed by the London German Desk.

The SHAEF War Room aimed at rapid self-liquidation as possible. By the end of the summer of 1945, the German intelligence services had disappeared as organizations. By that time, too, the Counterintelligence Branch (CIB) staffs were in a position, with the information provided by the War Room, to take over much of the work hitherto done by that unit. In September 1945, it was terminated, and X-2 London remained the controlling center for US counterespionage operations in Europe.

The War Room had been an arrangement for the servicing of the mobile CE units that mediated between the London registries and the CIB staffs with armies and at army groups. However, much CE data one X-2 filed unit might carry with it, it was unlike SI or SO field units in its continued dependence on the central registries. Swift recourse to the full information in the central files was a prime requisite for counterintelligence and counterespionage operations. Control had to rest at the center in which the registries were located.

The only serious division of authority occurred in September 1944, when a Paris office was established to coordinate, under London direction, US counterespionage in France. Despite the difficulties inherent in this division, the office and the SCI teams offered an excellent opportunity for many of the X-2/London personnel to test independently, in actual field operations, their extensive British training.⁹

Insurance Unit
The Insurance Unit had been established in Washington under COI and continued under Z-2 because of the counterespionage value of its researches.¹⁰ The London unit was initiated in February 1944 to tap British insurance companies for intelligence on firms in enemy territory. Its main product, however, was positive secret intelligence, and its chief liaison within OSS was with the Research and Analysis Branch (R&A). Outside OSS, it worked with FEA and other American and British agencies responsible for assembling economic intelligence and target information for Army, Navy, and Air Force commands from the files of insurance and other commercial sources in the United Kingdom.

Before writing, for example, a fire policy, an insurance company must make decisions based on thorough studies of the locations to be insured: buildings, docks, warehouses, industrial plants, and related installations. No company will consider insuring a building unless it has complete blueprints of the construction plan, details of wiring and hundreds of other facts, which can be evaluated only after a complete study of the physical composition of the area. Obviously, such detailed and current information was of great intelligence value. An exhaustive indexed library of such material—architects' or insurance engineers' plans, detailed inspectors' reports, copies of fire insurance schedules, photographs of establishments, waterfronts and towns, harbor town, street, water supply, police land fire plans, city and telephone directories, and the like—provided current, checked data of a kind that only large chains of expensive agents could have gathered at great risk and with much uncertainty.

At first, the Insurance Unit's chief problem was that of care in approaching the British companies. It was important to know by how many intelligence research agencies they had already been approached and how thoroughly their sources of information had been canvassed. It took some time and much tact to discover that the FEA mission, which was cooperating with a Far East Foreign Service officer attached to the American Embassy, had by one means exhausted available sources.

The Unit's first liaison was with the Fire Officers Committee, a group of senior officers of insurance firms, which had been providing the RAF with material for target folders on industrial objectives on the Continent. Through this Committee, it was possible to examine files which turned up items of value on the Far East that had never been collected before. The discovery led to an arrangement to index methodically, through one project, all such information on each area of the Far East, in the files of all the companies in London engaged in international business. The manpower problem was solved by the companies providing clerical help, which would work under direction of the Insurance Unit. A system of symbols and of protected channels assured the security of the operation.

From the beginning, the Unit forwarded material to Washington, for the R&A Branch there, and carried out research on industrial and other installations in Far East at R&A request. The work led to direct liaisons with various Far East divisions of the British services and agencies, including Navy Intelligence Division-21 (the collection agency for Inter-Services Topographical Department, ISTD), which had contact with some two thousand British firms with interests abroad and had indexed the materials available in the UK for all prominent firms with Far East interests. The liaison made the files of NID-21 available to the unit and opened the way to profitable direct liaison with various sections of ISTD itself. ISTD, in turn, developed like liaisons with Ministry of Economic Warfare and with A-13(c) l of the Air Ministry. The Unit had a channel to the War Office through the geographic section of R&A. Thus, by June 1944, it was sending Far East material reproduced by it to OSS/Washington and to FEA through FEA/London. It was, in like manner, distributing information to ISTD, NID-21, Ministry of Economic Warfare (MEW), A-13(c)1, and to the Ministry of Home Security, (which prepared target folders for the strategic bombing of Europe and, later, of the Far East, particularly Japan).

An example of the kind of service the Unit was able to give Washington was the reply to a questionnaire calling for detailed information on 94 installations and activities in the Hong Kong area. The Unit returned answers on 64 items. Much of its information came from insurance sources; other important items were obtained through its liaisons. The War Office handed to the Unit complete engineering details of railway lines. The Admiralty provided complete plans and up-to-the-minute intelligence reports on naval installations. ISTD made available all its information on both topographical and economic matters and also introduced the Unit to the British Crown agents, who opened their files to the Unit. NID-21 approached all commercial firms known to have interests in the area for relevant data.

The Unit also maintained coverage of the European Theater. For example, it provided important intelligence for the Eindhoven airborne operation of September 1944. Through its index, the Unit knew that buildings in Eindhoven, which were on the Allied priority list had been insured by London companies since 1926. Complete and accurate plans of the entire area were speedily made available to the Allied military authorities.

Establishment of Central Intelligence Agency

Substantive Authority Necessary in Establishment
of a Central Intelligence Service
In order to coordinate and centralize the policies and actions of the Government relating to intelligence:

1. There is established in the Executive Office of the President a central service, to be known as the__________ as head of which shall be a Director appointed by the President. The Director shall discharge and perform his functions and duties under the direction and supervision of the President. Subject to approval of the President, the Director may exercise his powers, authorities and duties through such officials or agencies and in such manner as he may determine.

2. There is established in the an Advisory Board consisting of the Secretary of State, Secretary of the Treasury, the Secretary of War, Attorney General, the Secretary of the Navy, and such other members as the President may subsequently appoint. The Board shall advise and assist the Director with respect to the formulations of basic policies and plan of the _________.

3. Subject to the direction and control of the President, and with any necessary advice and assistance from the other departments and agencies of the Government, the _________ shall perform the following functions and duties:

(a) Coordination of the functions of all intelligence agencies of the Government, and the establishment of such policies and objectives as will assure the integration of national intelligence efforts;

(b) Collection either directly or through existing Government Department and agencies, of pertinent information, including military, economic, political, and scientific, concerning the capabilities, intentions and activities of foreign nations, with particular reference to the effect such matters may have upon the national security, policies, and interests of the United States.

(c) Final evaluation, synthesis and dissemination within the Government of the intelligence required to enable the Government to determine policies with respect to national planning and security in peace and war, and the advancement of broad national policy;

(d) Procurement, training and supervision of its intelligence personnel;

(e) Subversive operations abroad;

(f) Determination of policies for and coordination of facilities essential to the collection of information under subparagraph (b) hereof;

(g) Such other functions and duties relating to intelligence as the President from time to time may direct.

4. The __________ shall have no police or law enforcement functions, either at home or abroad.

5. Subject to paragraph 3 hereof, existing intelligence agencies within the Government shall collect, evaluate, synthesize and disseminate departmental operating intelligence, herein define as intelligence required by such agencies in the actual performance of their functions and duties.

6. The Director shall be authorized to call upon departments and agencies of the Government to furnish appropriate specialist for such as may be required.

7. All Government departments and agencies shall make available to the Director such intelligence material as the Director, with the approval of the President, from time to time may request.

8. The shall operate under an independent budget.

9. In time of war or unlimited national emergency, all programs of the _________ in areas of actual or projected military operations shall be coordinated with military plans and shall be subject to the approval of the Joint Chiefs of Staff. Parts of such programs which are to be executed in a theater of military operations shall be subject to the control of the Theater Commander.

10. Within the limits of such funds as may be made available to _________ the Director may employ necessary personnel and make provision for neces-sary supplies, facilities and services. The Director shall be assigned, upon the approval of the President, such military and naval personnel as may be required in the performance of the functions and duties of the _________. The Director may provide for the internal organization and management of the __________ in such a manner as he may determine.

Executive Order 9621

Termination of the Office of Strategic Services
and Disposition of Its Functions
By virtue of the authority vested in me by the Constitution and Statutes, including Title 1 of the First War Powers Act, 1941, and as President of the United States and Commander in Chief of the Army and the Navy, it is hereby ordered as follows:

1. There are transferred to and consolidated in an Interim Research and Intelligence Service, which is hereby established in the Department of State,

(a) the functions of the Research and Analysis Branch and of the Presentation Branch of the Office of Strategic Services (provided for by the Military Order of June 13, 1942), excluding such functions performed within the countries of Germany and Austria, and;

(b) those other functions of the Office of Strategic Services (hereafter referred to as the Office) which relate to the functions of said Branches transferred by this paragraph. The functions of the Director of Strategic Services and of the United States Joint Chiefs of Staff, relating to the functions transferred to the Service by this paragraph are transferred to the Secretary of State. The personnel property, and records of the said Branches, except such thereof as is located in Germany and Austria, and so much of the other personnel, property and records of the Office and the funds of the Office as the Director of the Bureau of the Budget shall determine to relate primarily to the functions are transferred to the said Service. Military personnel now on duty in connection with the activities transferred by this paragraph may, subject to applicable law and to the extent mutually agreeable to the Secretary of State and to the Secretary of War or the Secretary of the Navy, as the case may be, continue on such duty in the Department of State.

2. The Interim Research and Intelligence Service shall be abolished as of the close of business December 31, 1945, and the Secretary of State shall provide for winding up its affairs. Pending such abolition:

(a) the Secretary of State may transfer from the said Service to such agencies of the Department of State as he shall designate any function of the Service,

(b) the Secretary may curtail the activities carried on by the Service,

(c) the head of the Service, who shall be designated by the Secretary, shall be responsible to the Secretary or to such other officer of the Department of State as the Secretary shall direct, and,

(d) the Service shall, except as otherwise provided in this order, be administered as an organizational entity in the Department of State.

3. All functions of the Office not transferred by paragraph 1 of this order, together with all personnel, records, property, and funds of the Office not so transferred, are transferred to the Department of War; and the Office, including the Office of the Director of Strategic Services, is terminated. The functions of the Director of Strategic Services and of the United States Joint Chiefs of Staff, relating to the functions transferred by this paragraph, are transferred to the Secretary of War. Naval personnel on duty with the Office in connection with the activities transferred by this paragraph may, subject to applicable law and to the extent mutually agreeable to the Secretary of War and the Secretary of the Navy, continue on such duty in the Department of War. The Secretary of War shall, whenever he deems it compatible with the national interest, discontinue any activity transferred by this paragraph and wind up all affairs relating thereto.

4. Such further measures and dispositions as may be determined by the Director of the Budget to be necessary to effectuate the transfer or redistribution of functions provided for in this order shall be carried out in such manner as the Director may direct and by such agencies as he may designate.

5. All provisions of prior orders of the President which are in conflict with this order are amended accordingly.

6. This order shall, except as otherwise specially provided, be effective as of the opening of business October 1, 1945.

Harry S. Truman
The White House
September 20, 1945

Recommendations from the Bureau of the Budget, Dated 20 September 1945

Many of the specific changes to internal organization that are indicated from a consideration of the conclusion are of interest or concern only to one department. Recommendations applicable to a single department are presented in broad terms only when they are of general interest to illustrate the broad principle involved. Recommendations, concerning proposed change or action of common or over-all concern, are, however, presented to some detail.

The greater portion of this section of the report is thus devoted to the proposed central coordinating machinery. This should not lead to the assumption that the creation of central machinery is view as the most important step to be taken. Of far greater importance is the creation of strong departmental organizations particularly in the State Department, and the separation of security intelligence operations from the more basic intelligence operations especially in the State, War, and Navy Departments.

More Widespread Understanding of Intelligence
Throughout this memorandum it has been noted how vital to a more adequate Government-wide foreign intelligence program is a more wide-spread understanding of what intelligence is, how it is produced and how the intelligence agency relates to and serves the action-taking or policy-determining groups. No specific recommendation is possible.

Conduct of the Intelligence Operation at the Departmental Level Each department (and in some cases subdivision of department) which has important responsibilities in international matters including our national defense, or which has public responsibilities for providing foreign information should provide for a competent foreign intelligence operation.

The kind of facilities which will be required in the various departments and their size will vary. Except in the case of departments with major responsibilities, such as the State Department, the facilities can be quite small.

In each case however, some provision must be made for the following functions:

1. The careful determination of the departments' actual requirements. This determination will require the development in each department of a Planning Staff. The requirements of the department of a Planning Staff will need to be expressed in accor-dance with a standardized terminology and classification of intelligence and will need to be stated in sufficient detail to guide reporting, either by activities of the department itself or of other departments on which on which the department may rely for information.

2. The systematic cataloging and utilization of all possible sources to supply the needed information or intelligence.

3. The thorough analysis and evaluation of information through research techniques. In this way new information is tested against the accumulated knowledge and established facts of the past and a complete and digested picture is available in which each pertinent piece of relevant information is present and in the right place with the whole so interpreted that conclusions can be drawn and trends are visible.

4. Careful dissemination of the resultant evaluated product rather than the mere distribution of incoming reports `of interest'. The intelligence office must be responsive to the needs of its department and see that those needs are supplied in full and when needed. On the other hand, it must protect the department from the voluminous flood of casual, unrelated, and unevaluated reports or scraps of information. Just as one expects its statistical office to analyze, tabulate, and summarize data and point to its significance, so in its search for knowledge and foreign nations, peoples, conditions or events it must look to its intelligence office to do a similar job on the raw material of foreign information.

Our wartime experience has shown that the need for foreign information and intelligence in any department far exceeds the ability of its intelligence office to secure or produce without the utilization of facilities that exist elsewhere. In each case therefore, whether the intelligence facilities provided in a de-partment are large or small, the responsibilities of such groups would include not only responsibilities of their departments but to total Government program as well. In the latter category are responsibilities such as (1) to participate in the planning of a Government-wide program, (2) to interpret the needs of their agencies to the other agencies of which they may rely for evaluated summary intelligence, (3) to review the adequacy obtained through the competency of result with respect to intelligence obtained through other agencies, (4) to serve as the liaison point between their agencies and the intelligence groups of other agencies. In general, the departmental intelligence units should only establish such independent facilities for collection, evaluation or dissemination as are constant with their role in a Government-wide program.

The success of our post-war intelligence operation rests on the creation within the State Department of an intelligence operation with responsibilities such as those stated above. The creation of a centralized intelligence operation in State Department would not only provide that Department with facilities it has long needed. In addition it would serve to provide the place where leadership of Government-wide intelligence activities would be centered.

The intelligence operations of the Army and Navy Departments need to be readjusted to post-war needs. The war has been responsible for an emphasis on current news as exemplified in daily situation reports and on operational intelligence as reflected in large scale order—of battle operations. Neither the organizations nor organization nor the staffing have been fully developed to serve the purposes of active Army and Navy Department participation in interdepartmental discussion of high future policy. In the Navy Department as an illustration, the entire intelligence mission is stated to be in support of the fleet. In neither of the two Departments has sufficient emphasis been given to research and analysis nor has provision been made for all available information to be brought together at one point for evaluation. Further, as already pointed out both still permit an over-emphasis on security intelligence to interfere with the full development of more basic intelligence.

Other Departments such as Commerce and Agricul-ture need to recast their intelligence organizations so as to become participating groups in a total Government-wide foreign intelligence program.

Separation of Security Intelligence Activities
The security intelligence activities either at home or abroad, serving internal security purposes should be separated organizationally from the more basic intelligence activities, except for the mutual exchange of highly evaluated and summarized reports of general import (not merely of "cases"). It is further recommended that an integrated security program including the security intelligence activities that support it be planned for the Government as a whole.

The implementation of the first recommendation will require action in a number of departments, not necessarily simultaneously.

In the State Department, for example, the creation of new central intelligence facilities should not be accompanied by a transfer of activities now centered in the Office of Controls in the Division of Foreign Activities Correlation.

In the Navy Department some separation had been undertaken by the creation of new intelligence facilities in the Office of the Commander of Chief apart from the Office of Naval Intelligence which is the principal Navy Department organization concerned with security and security intelligence. These new facilities offer the possibility of becoming the nucleus for an expanded basic intelligence operation in the post-war era when the needs for strictly operational intelligence will be greatly curtailed irrespective of whether the Office of the Commander in Chief is retained is or not. The role of NO, however, as the central staff agency for security matters is not clear, and a number of related activities, not only in Bureaus and Auxiliary Services but in the Office of Chief of Naval Operations itself, are not now coordinated under a single head or staff unit.

In the War Department, too, some separation has resulted from the reactivation of the Office of the Provost Marshal General. The predilection for continuance in field of security intelligence, however, still permits the Military Intelligence Service to become too engrossed with matters that could be further centralized outside MIS. Further, because of its organizational placement the PMG cannot be fully effective as a staff agency to coordinate all security matters. In both the War and Navy Departments the separation of the security intelligence operation and the more basic foreign intelligence operation should be furthered and the security intelligence an the various forms of internal security operations be more closely coordinated.

The implementation of the second recommendation will require the creation of an interdepartmental coordinating committee described below.

Coordination of Intelligence and Security Operations
To insure that the intelligence and security activities of the Government, carried on by a number of agencies, fulfill all the national requirements, that they are developed as a total program producing the maximum result with a minimum of duplication, overlap and confusion and that adequate planning is accomplished for their expansion in any future emergency, it is recommended that two interdepart-mental groups be organized under the leadership of the Department of State.

To one group, which would consist of the Assistant Secretaries of State, War, Navy and Commerce, would compose an Interdepartmental Intelligence Coordinating Committee. It would be concerned with developing an integrated Government-wide foreign intelligence program. It also would be concerned with planning for the future.

The other group, consisting of the Assistant Secretaries of State, War, Navy and Treasury and the Assistant Attorney General, would compose an Interdepartmental Security Coordinating Committee. It would be concerned with developing an integrated Government-wide internal security program and of an integrated Government-wide security intelligence program. It also would be concerned with planning for the future.

These two groups by direction of the President and by means of planning conducted by permanent staff of their own working through sub-committee including representatives of any agency of interest either as customer or contributor, would develop a series of specific operating plans. These plans would serve as common directives for the assignment of operating responsibilities among the departmental intelligence and security agencies. The manner in which such planning would be conducted will be the same in both the security coordinating committee and in the intelligence committee, and is described below.

Except as directed later under `Conduct of Central Operations' the committees would have no responsibilities for the production of intelligence itself nor for the conduct of operations. Rather their responsibilities would consist of the following.

1. To develop a detailed and clear statement of the national intelligence objectives and requirements, including those of all departments and agencies.

2. To determine the means in terms of actual operations for meeting the national intelligence and national security requirements.

3. To assign, through a series of specific operating plans, operating responsibilities to the various departments.

4. To review the adequacy and economy of the total intelligence program of the Government and of the total security program of the Government.

5. To develop plans, legislation and other instruments in readiness for the adjustment of the intelligence and the security programs in the event of emergency or other changed conditions.

The above list of responsibilities describes in effect the steps in planning. The visible result of such planning and, therefore, the principal concern of the committee would be the operating plan itself. Each operating plan when issued would reflect the determination of the appropriate committee under each of the first three continuing an long range responsibilities shown above, i.e., the requirements, the means for their accomplishment, and the specific operating assignments allocated to the various departments and agencies. When issued, the specific operating plans would be directives to the department and agencies. When issued, the specific operating plans would be directives to the departments and agencies would adjust their operations to conform to them.

Production of High Level Intelligence
The need to provide for some facilities to serve groups at a level above the departments themselves is one which should be anticipated but action is not now recommended.

With principal intelligence activities of the Government being carried on in the departments in accordance with a planned and coordinated program, such intelligence as may be needed at the top of the Government can be produced through or secured from the intelligence operations in the department. The State Department would provide the principal facilities for bringing to bear on any high level problem the total intelligence available anywhere in the Government.

Should it later be found, however, that independent facilities are desirable to serve the President in the occasional instance in which he may wish direct and immediate access to the intelligence involving a matter of high decision, these facilities, which should be organized in his own office, can be small and need not engage in large scale initial research and analysis on original raw material.

Conduct of Central Operations
The strengthening of intelligence activities in the departments and agencies and their coordination by a central planning staff are the principal means of providing a total operation serving the total national needs. Central facilities should not be created, therefore, to engage in operations which can be performed at the departmental level.

The planning conducted by the two coordinate committees may result in a decision that some types of operation may be found to be practicable only if operated centrally or under strong day to day central direction. It is recommended that any such services as is determined to require centralization, be conducted as an interdepartmental service under the appropriate coordinating committee.

CONTINUE CHAPTER 3