The Origin and Development 

of the CIA in the 

Administration of Harry S. Truman 

A Conference Report 

Center for the 

Study of Intelligence 

CSI 95-001 

March 1995 
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The Origin and Development 

of the CIA in the 

Administration of Harry S. Truman 

A Conference Report 

Center for the 

Study of Intelligence 

Reverse Blank 

Foreword 

The conference on "The Origin and Development of the CIA in the 

Administration of Harry S. Truman" was held on 17-18 March 1994, at the 

Ritz-Carlton Hotel in Tyson's Corner, Virginia. Jointly sponsored by the 

Harry S. Truman Library and Institute and CIA's Center for the Study of 

Intelligence, it brought together roughly 200 scholars, government officials, 

and representatives of the media and public interest groups to explore how 

CIA came to be established in 1947 and how the Agency evolved through 

the end of the Truman Administration in 1953. 

Panels of distinguished scholars and government officials addressed 

Truman's relations with the first four Directors of Central Intelligence; 

CIA's origins in the Office of Strategic Services (OSS); the Cold War in 

Europe and Asia during the Truman years; the development of intelligence 

collection, covert action, and analysis during CIA's early years; and records 

and research associated with these topics. CIA Director R. James Woolsey 

addressed the conference during a session at CIA Headquarters at the end of 

the first day. 

The report contains material which is or may be copyrighted by the 

panelists and other speakers to whom each presentation is attributed. Unless 

a speaker was a US Government employee at the time of presentation, permission to copy or further disseminate any or all of this report must be 

obtained from the individuals concerned. Works of US Government 

employees are deemed to be in the public domain. 

Hosting such public conferences is one aspect of the efforts of CIA's 

Center for the Study of Intelligence to implement the Agency's policy of 

increased openness to the public. The Center's mission also includes conducting research on intelligence; writing intelligence history; declassifying 

historical documents on intelligence; and publishing books, monographs, 

and Studies in Intelligence, a quarterly journal. 

This report was prepared from an audiotape transcription provided by 

Helen Sustachek. Additional copies can be obtained from the National Technical Information Service, telephone (703) 487-4650, fax (703) 321-8457. 

Ill 

CSI 95-001 

March 1995 

Table of Contents 

Page 

Foreword iii 

Thursday, 17 March 

Welcome 1 

General Donald Dawson, President, Truman Library Institute 

David Gries, Director, CIA Center for the Study of Intelligence 

Session I: President Truman and Four Directors of Central Intelligence 2 

Christopher Andrew, Cambridge University 

Mary McAuliffe, CIA History Staff 

Session II: From OSS to CIA, 1941-1950 11 

Panel A: OSS and the Origins of the CIA, 1941-1947 

Barry Katz, Stanford University 

Thomas Powers, author, Royalton, Vermont 

Panel B: CIA: The Eady Years, 1947-1950 H 

J. Kenneth McDonald, CIA History Staff 

Wesley Wark, University of Toronto 

Luncheon Address: 19 

Richard Neustadt, Harvard University 

Session III: The International Context: 1945-1953 21 

Panel A: CIA and the Cold War in Europe 

Deborah Larson, UCLA 

William Colby, former DCI 

Panel B: CIA and the Cold War in Asia 30 

Nancy Tucker, Georgetown University 

Harold Ford, CIA History Staff 

Keynote Address: R. James Woolsey, Director of Central Intelligence 39 

"Intelligence and Democracy: The CIA and American Foreign 

Policy" 

Friday, 18 March 

Session IV: CIA at Work, 1947-1953 48^ 

Panel A: Espionage and Covert Action 

Richard Helms, former DCI 

John Ranelagh, author, Cambridge, England 

Panel B: Estimates and Analysis 59 

John Prados, author, Takoma Park, Maryland 

Richard Betts, Colombia University 

Luncheon Speakers: 65 

Lawrence Houston, first CIA General Counsel 

John Warner, first CIA Deputy General Counsel 

Walter Pforzheimer, first CIA Legislative Counsel 

Session V: Research, Records, and Declassification Today 69 

Benedict Zobrist, Director, Truman Library 

David Gries, Director, CIA Center for the Study of Intelligence 

Anna Nelson, American University 

Session VI: The Legacy of Harry Truman's CIA 75 

John Lewis Gaddis, Ohio University 
President Harry S. Truman 

"To the Central Intelligence Agency, a necessity to the President of the 

United States, from one who knows. Harry S. Truman, June 9, 1964" 

(inscription with photograph hanging at CIA Headquarters). 

347461PM 3-95 

VI 
Welcome 

Gen. Donald S. Dawson, President, Truman Library Institute for 

National and International Affairs 

David Gries, Director, Center for the Study of Intelligence, CIA 

"This conference is about the Central Intelligence Agency, why it 

came into existence and how it grew," Donald Dawson declared in welcoming the conferees. He said Harry Truman noted in his memoirs that 

when he became President, "I found that the needed intelligence information was not coordinated in any one place and that the information often 

conflicted." Truman took steps to improve the system, and, after CIA came 

into being, he began to receive a daily digest of information from abroad 

and conferred each morning with the Director of Central Intelligence. 

David Gries, in his opening remarks, showed the assemblage the plain 

three-ring notebook that held the briefing papers that routinely were passed 

to President Truman by CIA's Meredith P. Davidson, who was in the audience and was subsequently introduced. Gries also cited the inscription Truman wrote on his photographic portrait in the main corridor at CIA 

headquarters: "To the CIA, a necessity to the President of the United States, 

from one who knows." 

Observing that it was 47 years since Truman signed the National 

Security Act of 1947 that established the Central Intelligence Agency, Gries 

sought to put its enactment in context by recalling major historical events of 

that period. The President sent the act to Congress on February 26, signed it 

on July 26, and it took effect on September 18. During that seven-month 

period, "five defining events of the Cold War" occurted: The Truman Doctrine involving aid to Greece and Turkey was initiated; groundwork for the 

NATO Alliance was laid in Europe; the Communist coup in Hungary 

occurred; the Marshall Plan for European recovery was announced; and 

George Kennan, "Mr. X," enunciated the containment policy in Foreign 

Affairs. 

Gries pointed out that hundreds of documents relating to CIA and the 

Truman Administration were assembled in the book the Center for the Study 

of Intelligence had released that morning entided CIA Cold War Records: 

The CIA Under Truman, and copies were available for all attendees. 
Session I: President Truma n and Fou r Directors of 

Centra l Intelligence 

Christopher Andrew, Cambridge University 

Mary McAuliffe, CIA 

Christopher Andrew, who said he had been invited to talk about Truman's attitude toward intelligence, began by asserting that the Truman presidency stands out in American intelligence history for two contrasting 

reasons. First, "No President since Truman has known as little as he did 

when he became President." Determined that no future President should 

have to endure what he had, Truman assured the CIA as his Presidency was 

drawing to a close in November 1952 that "I am giving this new President 

(Eisenhower) more information than any other President ever had when he 

went into office." He also assured that no future Vice President would be as 

ignorant about intelligence as he had been by promoting an amendment to 

the National Security Act of 1947 that made the Vice President a statutory 

member of the National Security Council. 

The second reason was that "the Truman Administration did far more 

than any other administration in American history to shape the American 

Intelligence Community." This happened because of the circumstances prevailing during that period: Truman presided over the end of World War II, 

the beginning of the Cold War, and most of the Korean war. "No incoming 

President of the United States had ever received intelligence as stunning as 

that Truman received a week after he became President." Beginning in 

April 1945, "he was indoctrinated into the two biggest secrets in the history 

of modern warfare: the atomic bomb and ULTRA." SIGINT gave him a 

dramatic insight into the last days of the Third Reich and, more important, 

into the four final months of the Pacific War, including Japan's surrender 

maneuvers. 

As a result, by the end of the war Truman was impressed by SIGINT 

but still deeply suspicious of human intelligence, Andrew said. This was the 

basis on which, in September 1945, he made "two crucial decisions...which 

had an enormous impact on the subsequent development of American intelligence." On September 20 he signed Executive Order 9261, closing down 

OSS and dividing what was left of it between the State Department and the 

Department of the Army. "A week earlier he had signed a Top Secret memorandum authorizing the peacetime continuation of SIGINT operations in 

collaboration with the British. Truman's memorandum became the cornerstone of an unprecedented and still unique peacetime intelligence alliance. 

Over the next three years, Anglo-American collaboration led to the construction of a global SIGINT network including Canada and Australia as 
Maj. Gen. William J. Donovan. 

He was wartime head of OSS. 

Under President Roosevelt, he 

set out "to invent an American 

intelligence establishment (with) 

no models to build on. " Later he 

"irritated peers and superiors 

alike with his personal ambition 

and single-minded drive for 

an independent and powerful 

DCI." 

Portrait h\ Thomas E- Stevens 347462PM 2-95 

well as the US and the British Empire." Andrew predicted there will be 

"tens of thousands of fascinating Ph.D.'s" on how the decrypts from this 

network informed American foreign policy during the Cold War. 

Truman's gradual conversion to the idea of having an agency for foreign intelligence and covert action progressed during the three years following those two momentous decisions. What he hoped for in founding the 

Central Intelligence Group, CIA's immediate antecedent, "was help in coping with the deluge of contradictory cables, dispatches, and reports on the 

complex problems of the outside world." He told Admiral Souers, the first 

Director of Central Intelligence, that he needed a daily digest of all those 

messages. It was provided and became the forerunner of The President's 

Daily Brief. After promoting the National Security Act of 1947 which created CIA, Truman the following year authorized the beginning and, during 

his second term, the rapid expansion of peacetime covert actions by US 

intelligence agencies. Andrew enumerated some of the activities conducted 

under Truman's authority—to combat Communism in Greece, suppress the 

rebellion in the Philippines, and support anti-Communist parties in the Italian elections of 1948, as well as several operations behind the Iron Curtain. 
In addition, it was Truman who established the principle of "plausible deniability" of Presidential responsibility for such actions by signing NSC 10/2 

in June 1948. 

In October 1952, in one of his final acts as President, Truman founded 

the National Security Agency to bring order out of chaos that by that time 

had reappeared in the US SIGINT community during the Korean war. 

During his 20-year retirement, Andrew noted, Truman seemed 

amazed, even somewhat appalled, by the size and power of what he had 

brought into being, "the biggest peacetime intelligence community in the 

history of Western civilization." 

Mary McAuliffe agreed with both of Andrew's hypotheses, adding 

that CIA probably would not exist today had it not been for the intense 

international situation the United States faced in the aftermath of World War 

II. President Truman's growing commitment to a peacetime intelligence 

organization, she said, developed in the larger context of his commitment to 

the Cold War during which CIA became one of the major institutions active 

in it. 

CIA's predecessor, the Central Intelligence Group (CIG), was established by Truman in the Presidential Directive of January 22, 1946. "It had 

one overriding purpose: to coordinate, evaluate, and disseminate intelligence and thereby prevent another Pearl Harbor from happening in what 

was an increasingly unstable world." McAuliffe observed that it conformed 

to a longstanding proposal of the Joint Chiefs of Staff that had called for "a 

permanent central intelligence agency that would coexist rather than compete with the long-established intelligence organizations in the State, War, 

and Navy Departments." The proposal had specified that "such an organization would synthesize the information received from the other intelligence 

organizations and in general serve in a subordinate role." 

At Truman's insistence, the CIG immediately began to help the President deal in an orderly fashion with the huge volume of information on 

national security situations that was inundating him. This led to the Daily 

Intelligence Summary Andrew referred to, which first appeared on February 

15, 1946. Publication of a weekly summary began the following June, and 

the two summaries became models for a succession of later CIA serial publications. 

As CIG's first Director, Truman appointed RAdm. Sidney Souers 

who, until then, was Deputy Chief of Naval Intelligence. He spent much of 

his brief tenure helping to establish his new organization's legitimacy during the critical early months of 1946. "Souers was well suited for the task as 

the first leader of our first peacetime organization," McAuliffe said. Unlike 

Maj. Gen. William Donovan, who headed OSS and "had irritated peers and 
RAdm. Sidney W. Souers. 

He was the first DCI and Director of Central Intelligence 

Group, CIA's predecessor 

His "nonconfrontational style 

brought CIA a period of relatively smooth sailing during 

important early months of its 

career...." 

Portrait by Clarence Lamont MacNeliy 347463PM 2-95 

superiors alike with his personal ambition and single-minded drive for an 

independent and powerful DCI (Director of Central Intelligence), Souers 

had no personal stake in CIG. He hadn't even wanted to be DCI. Furthermore, in dealing with people, (the two) were light years apart. Souers trod 

lightly; Donovan did not.... Souers' nonconfrontational style brought CIG a 

period of relatively smooth sailing during important early months of its 

career, especially in its relations with its supervisory and advisory boards, 

the National Intelligence Authority, and the Intelligence Advisory Board." 

Lt. Gen. Hoyt Vandenberg, a ranking member of the Intelligence 

Advisory Board, was a logical choice to succeed Souers when he retired. 

Vandenberg immediately set to work to give CIG more independence and 

stature, and McAuliffe stated his impact on the new organization was considerable. Vandenberg improved CIG's budgetary position "from having to 

beg for funds as the need arose to the more businesslike arrangement of specific departmental allotments over which the DCI had dispersal authority. 

He also expanded CIG's role beyond that of a coordinating body and established the organization as an independent player (in both the production and 
Lt. Gen. Hoyt S. Vandenberg. 

He improved CIG's budgetary 

position, expanded its role 

"beyond that of a coordinating 

body, and established the organisation as an independent 

player" in both the production 

and collection of intelligence, 

moving decisively into espionage. 

Portrait by Clarence Lamont MacNeliy 347464PM 2-95 

collection of intelligence,) moving decisively into espionage. After the war, 

Truman had disbanded the OSS but retained the remnants of its espionage 

and counterespionage capabilities in a Strategic Services Unit, which he 

temporarily housed in the War Department. CIG acquired those remnants 

and, in July 1946, Vandenberg placed them under a new Office of Special 

Operations. The tense state of world affairs at that time provided "a persuasive backdrop for Vandenberg's efforts to turn CIG into a permanent central 

intelligence operation," McAuliffe said. "In scarcely more than six months, 

Vandenberg had significantly enhanced CIG's activities as well as strengthened the DCI's position. Nevertheless, he knew that until the fledgling organization received independent status it would remain weak and vulnerable," 

He focused on achieving that goal but first "had to persuade the White 

House, which was reluctant to bring such legislation before Congress while 

the Army and Navy were still at loggerheads over the difficult problem of 

national defense unification.... In the end, to avoid any controversy that 

might threaten the defense merger bill, the White House agreed to include a 

section establishing a central intelligence agency, but kept it brief and 

unspecific." The only real reservations that were expressed centered on 
RAdm. 

Roscoe H. Hillenkoetter. 

He had little taste for either 

bureaucratic infighting or 

empire building. He spent threeand-a-half troubled years as 

DCI and became first Director 

of the CIA, CIG's successor 

Portniit h\ ( "/'/ 347465PM 2-95 

fears of fostering an American Gestapo. "The lawmakers resolved this issue 

by specifically forbidding the Central Intelligence Agency any police, subpoena, law enforcement, or internal security functions." With these constraints. Congress approved the National Security Act in July 1947. 

By this time Vandenberg had left to lead the new independent Air 

Force, and RAdm. Roscoe H. Hillenkoetter succeeded him as DCI. Virtually everyone, including Congress, expected CIA to collect, analyze, and 

disseminate intelligence for senior policymakers, just as CIG had done. No 

one, according to McAuliffe, anticipated the dramatic changes that were 

about to occur, specifically regarding covert operations. Yet even those 

activities "carried little negative baggage." In fact, they seemed "a logical 

and, at the time, commendable extension of Truman's containment policy.... Indeed, CIA's successful intervention in the Italian election of 1948 

won Hillenkoetter a personal commendation from the President. Italy did 

not go Communist, the United States held the line, and scarcely anyone at 

the time was concerned about the implications of interfering in the democratic processes of other nations." 

Hillenkoetter, however, had littie taste for either bureaucratic infighting or empire building, and he spent three and a half troubled years as DCI. 
U. Gen. Walter Bedell Smith. 

He "moved quickly to improve 

the quantity and quality of 

National Intelligence Estimates, 

tightened up CIA's central 

administration, and overhauled 

the Agency's structure. " 

Portrait by Williaitt F. Drap< 347466PM 2-95 

McAuliffe observed that the rest of the Intelligence Community adamantiy 

refused to cooperate with the new Agency, which they feared might grow 

strong enough to dominate them. Hillenkoetter's detractors were numerous, 

she said, and included Allen Dulles, who chaired a group commissioned by 

the National Security Council to examine the new intelligence agency. The 

Dulles Report "prompted some of the most devastating criticism leveled at 

Hillenkoetter and the Agency" and was his "death knell as DCI. CIA's failure to predict the outbreak of the Korean war may well have been the last 

straw convincing Truman that a new Director of Central Intelligence was 

indeed necessary." 

As Hillenkoetter's successor, Truman selected Lt. Gen. Walter Bedell 

Smith, who had been Eisenhower's chief of staff during World War II and 

was Ambassador to the USSR from 1946 through 1949. Smith provided the 

leadership that was so desperately needed at that point in CIA's history. He 

"immediately went to work to overhaul and reorganize CIA and its relations 

with the Intelligence Community, enacting many of the reforms the Dulles 

Report had recommended. Smith moved quickly to improve the quantity 

and quality of National Intelligence Estimates, tightened up CIA's central 

administration, and overhauled the Agency's structure." 
Covert Action Operations 

Mary McAuliffe defined covert action operations as the general term 

for secret efforts to influence or subvert a foreign adversary, such as 

through political action, economic destabilization, paramilitary activity, and secret propaganda. She pointed out that the term does not 

encompass either espionage or counterintelligence which, along with 

covert action, are subsumed under the larger heading of clandestine 

operations. 

"Nevertheless, covert action operations rather than intelligence collection and production now increasingly defined and dominated CIA." The 

Office of Policy Coordination (OPC) had expanded by the time Smith 

became DCI, and he attempted to gain some sort of control over it by annulling its virtual independence and placing it under the DCI's authority. "He 

had become greatly concerned that the scale and energy of OPC enterprises 

as well as its lack of accountability and discipline would eventually undermine CIA's intelligence mission," McAuhffe stated. Smith brought in Allen 

Dulles to provide stronger leadership over intelligence collection and covert 

action operations and in mid-1951 made him the Deputy Director of Central 

Intelligence (DDCI). 

Smith, however, was unable to deter or control the rapid expansion of 

CIA covert operations. In February 1953 he left CIA when Eisenhower, 

then the newly elected President, asked him to become Undersecretary of 

State, "a move most insiders understood as the new President's way of 

opening the DCI position for Allen Dulles. Smith left behind a more sensibly organized CIA, one more at peace with its sister departments, and one 

whose intelligence mission was more clearly defined," McAuliffe concluded. It became Dulles's role "to complete what by then was well under 

way: converting CIA into a vigorous department of the Cold War to deal in 

its own ways with the Soviet threat." 

During the subsequent question period, Walter Pforzheimer, a former 

CIA officer who participated in those formative years, contributed some 

observations on McAuliffe's presentation. He asserted that perhaps the biggest controversy on Capitol Hill involving CIA when the National Security 

Act of 1947 was being considered was whether the DCI should be a military 

officer or a civilian. The alternatives remained in the 1947 Act, and the 

issue was not resolved until the 1953 legislation was passed, which specified that a military officer could serve as DCI or DDCI but that two military 

officers could not fill both positions at the same time. Pforzheimer also 

stated that Hillenkoetter's dislike of DDCI-designate William Jackson was 

so intense that he refused Walter Bedell Smith's request to appoint Jackson 

to the DDCI position for the few weeks before Smith took office. Nor was it 
generally accepted, according to Pforzheimer, that Dulles should be DCI as 

McAuliffe had suggested because a substantial group, including Smith, 

strongly opposed his appointment. The alternative, endorsed by Smith, was 

to bring in General Donovan, wartime head of OSS, as President Eisenhower's DCI. 

A questioner took issue with the "complimentary terms" with which 

Christopher Andrew had described the Anglo-American intelligence relationship, submitting that the relationship was "deeply flawed" and "compromised" because members of the British Intelligence Community were 

agents for the Soviet Union. "Given this," he asked, "who was the relationship good for?" Andrew acknowledged that Cambridge, where he teaches, 

was the university of well-known Soviet spies Philby, Maclean, Burgess, 

Blunt, and Cairncross but asserted he nonetheless could give an impartial 

response. He noted that treachery within the Intelligence Community is "a 

problem not unknown in the United States over the past few weeks," alluding to the indictment of CIA's Aldrich Ames for being a Soviet spy, and he 

cited the fact that during the Truman years there were three Soviet agents 

within the National Security Agency (NSA). "Nonetheless," Andrew 

affirmed, "both sides of the Atiantic have gained far more than they've lost, 

not simply from the military alliance in NATO but also from the intelligence alliance which began during the Second World War." 

10 
Session 11: From OSS to CIA, 1941-1950 

Panel A: OSS and the Origins of the CIA, 1941-1947 

Barry Katz, Stanford University 

Thomas Powers, author, Royalton, Vermont 

Before World War II, Barry Katz stated, the United States "had been 

strikingly lacking, almost uniquely among the Great Powers, in establishing 

any kind of systematic clearinghouse of foreign intelligence. The war had 

been raging for almost a year when President Roosevelt began belatedly to 

address the looming need for a continuing assessment of America's strategic position." His first move, in July 1940, was to charge William Donovan 

with a series of overseas missions to Europe and around the Mediterranean 

Basin to evaluate the strategic situation in those areas and associated US 

intelligence needs. When he returned, Donovan submitted a memorandum 

to the President recommending an organization for developing strategic 

information that would be staffed by "a corps of carefully selected minds 

equipped with the knowledge of foreign languages and the latest research 

techniques." A month later, on July 11, 1941, Roosevelt acted on this recommendation by signing an Executive Order designating the appointment 

of a civilian Coordinator of Information (COI). Donovan was assigned to 

this post and was instructed, in the enabling legislation, "to collect and analyze all information and data which may bear upon national security." 

Donovan immediately set out "to invent an American intelligence 

establishment.. .probably the line in my talk," Katz said, "that needs most to 

be emphasized. With virtually no precedent, virtually no models to build 

upon, Donovan really did set out to build this thing from scratch. There was 

no sense of how to do it right, how to do it wrong, simply because it hadn't 

been done before." Katz asserted that "the accomplishments as well as the 

embartassing failures of OSS always have to be evaluated against the tabula 

rasa from which Donovan had to begin. He drew his first wave of recruits 

from the military services, from within the Roosevelt Administration and, 

perhaps his greatest innovation, from the nation's colleges, universities, and 

research institutes." 

"For about a year, the Coordinator of Information led an uncertain and 

shifting existence as the aggressive Donovan attempted to claim functions 

of intelligence gathering, propaganda, espionage, subversion, strategic and 

post-war planning, and more.... By the end of his first year he had hired 

1,851 employees, and the organization was growing fast and uncontrollable. 

The COI "was doomed in such circumstances to be viewed as a dangerous 

and amateurish interloper among the more established offices of the Departments of War and State and, accordingly, after about a year of jurisdictional 
rivalries and being cold-shouldered at every opportunity, the organization 

was radically restructured. The overt propaganda functions of the old COI 

were severed and autonomously constituted as the Office of War Information. Donovan was allowed to retain control of the functions of intelligence 

gathering, research and analysis, to which was added an operational branch 

that would conduct clandestine activities in enemy territory and enemyoccupied territory. On June 13, 1942, streamhned and staffed with its first 

generation of agents and analysts, the American intelligence establishment 

came into its own, now named the Office of Strategic Services (OSS)." 

OSS was given a two-part charge by the President: first "to collect and 

analyze such strategic information as may be required" and, second, "to 

plan and operate such special services as may be directed by the United 

States Joint Chiefs of Staff." Katz considered this functional division 

between intelligence and operations as "perhaps the most enduring legacy 

of the OSS." He acknowledged that, by far, the most famous exploits of the 

wartime OSS were carried out by its several operational branches, including 

sabotage, supporting resistance movements, raids and other irregular combat missions, psychological warfare, and black radiobroadcasts. As important as many of these covert missions were, the drama surrounding them, in 

Katz's opinion, has led to "a quite disproportionate focus on the covert 

operational aspects of OSS as opposed to its more mundane intelligence 

functions." Less flamboyant but more fundamental were the intelligence 

branches of OSS. "Donovan always insisted that the functions of research 

and analysis lay at the heart of any modern intelligence agency." Accordingly, "the largest of the intelligence units was the Research and Analysis 

Branch directed by historian William Langer of Harvard. R and A drew 

heavily on regional and functional specialists from the American and refugee communities, including an astonishing number of internationally recognized scholars." Among them were five future presidents of the American 

Economic Association, seven future presidents of the American Historical 

Association, two Nobel laureates, and various Pulitzer Prize winners. "The 

Research and Analysis Branch produced analytical reports on economic, 

political, geographical, and cultural topics pertaining to all theaters of operations as well as the USSR and Latin America." 

"The Office of Strategic Services was designed to be an apolitical service agency, specifically excluded from the policymaking process in Washington and strictly subordinated to the military theater commanders 

overseas." According to Katz, OSS gained "a reputation for disinterested 

objectivity" and made "a number of significant contributions to the war 

effort." He summarized its principal activities: "softening-up operations" in 

North Africa in advance of the landings there ("the first major test"); development of a program of strategic aerial warfare based on precision bombing 

of selected industrial targets ("an early application of economic theory to 

military practice" which "remained a basic strategic concept until well into 

the nuclear age"); close cooperation with military forces in the North African and Italian campaigns and in the Balkans (including the Allen Dulles 

mission to secure the surrender of German troops in Italy); the penetration 

12 
of Nazi Germany by OSS operatives (to identify strategic targets and promote resistance, sabotage, and subversion); planning for the postwar governance of Germany and German-occupied territories; identification of 

prominent Nazis to be investigated for war crimes; and preparation of 

extensive documentation for the Nuremberg Trials. The OSS was also 

active in the Asian and Pacific theaters, but Katz said that even to list them 

would require more time than is available. 

OSS was abolished by order of President Truman on September 20, 

1945, and the termination became effective on October 1. "Between 1945 

and 1947, as the shooting war against German Fascism turned into a Cold 

War against Russian Communism, the international political order was 

turned upside down. Although there would be strong family resemblances 

between OSS and CIA," Katz observed, "they belonged to fundamentally 

different worlds." 

Picking up on that theme, Thomas Powers likened the transition 

between OSS at the end of World War II and the establishment of CIA to 

the present time when the Cold War has ended and "there are calls now as 

there were then for a considerable revamping of intelligence." He said he 

would cite one example of the kind of "slippage" that can occur while there 

is tinkering with the machinery and organizational framework of an intelligence agency. Powers suggested the cost incurred when OSS was disbanded was a loss in intelligence capabilities regarding Soviet nuclear 

capabilities. This question was considered often by the Central Intelligence 

Group and later by CIA. But the organization that had principally been 

involved in producing intelligence on atomic matters was the Manhattan 

Engineering District under Gen. Leslie Groves, which had produced US 

atomic bombs. Most of that organization was absorbed by the Atomic 

Energy Commission that was established in 1946. The exception was the 

office that had dealt with atomic intelligence which, after much haggling, 

went to CIG. 

As Powers put it, there were "two years of fooling around," moving 

personnel and files while intelligence was being reorganized. Meanwhile, 

the Russians were working on their bomb, and a lot of people were trying to 

figure out when they would get it. He cited a CIA memorandum dated 20 

September 1949 that is reproduced on page 319 of The CIA Under Harry 

Truman, the Agency History Staff's collection of declassified documents. It 

said the USSR would have an atomic bomb in three years, whereas the 

Soviets at the time had already detonated one on 29 August. The date of the 

CIA estimate also demonstrates that the Agency had been shut out by other 

intelligence organizations, which had been arguing about the significance of 

radioactive debris collected by an Air Force plane in early September. President Truman announced the first Soviet atomic explosion on September 23. 

Powers described this series of developments as a classic example of the 

kind of slippage that can occur when organizations are in transition. "We 

paid a price, and the price was surprise." 

13 
Session II: From OSS to CIA, 1941-1950 

Panel B: CIA: The Early Years, 1947-1950 

J. Kenneth McDonald, CIA 

Wesley Wark, University of Toronto 

Ken McDonald recalled Yale historian C. Vann Woodward's dictum 

that the twilight zone that lies between living memory and written history is 

one of the favorite breeding places for mythology. "On looking back at the 

Truman Administration," McDonald observed, "we're about into that twilight zone. In fact, CIA has probably been in that zone from its inception, 

breeding myths almost from the day it was born." This is so, he explained, 

because of the enormous secrecy that always surrounds a foreign intelligence organization such as CIA and the consequent classification—until 

very recently—of almost all of its historical records. "The purpose of this 

conference, he continued, "is to try to demythologize the Central Intelligence Agency." 

To outiine CIA's history from 1947 to 1950, McDonald spoke of "five 

decisions, events, developments," which were turning points in CIA's early 

days that have also influenced its evolution over the years. These five developments were, first, RAdm. Roscoe Hillenkoetter's appointment as the 

Director of Central Intelligence (DCI) in May of 1947; second, the passage 

of the National Security Act two months later; third, CIA's substantial commitment to covert action when the Office of Policy Coordination was 

formed in the summer of 1948; fourth, the Dulles Report of early 1949, 

which criticized CIA's failures in coordinating intelligence and producing 

National Intelligence Estimates; and lastly, Truman's appointment of Gen. 

Walter Bedell Smith as the DCI, which began "a new period of re-invigoration, reform, and reorganization" for CIA. 

The first of these events. Admiral Hillenkoetter's appointment as DCI 

in May 1947, was perfectly logical and in many ways sound. He was an 

experienced intelligence officer who inspired a great deal of loyalty in people who worked for him. Noting that Hillenkoetter was a man of considerable intelligence and perception, McDonald disclaimed any intention to 

denigrate him, "but if you compare and contrast him with his predecessor, 

Hoyt Vandenberg, and his successor. Bedell Smith, you will begin to see 

why Hillenkoetter was an unsuccessful Director of Central Intelligence." 

He was a new and unknown rear admiral, while Vandenberg and Smith took 

office as three-star Army generals with substantial public reputations from 

brilliant wartime careers. "When Hillenkoetter took office on 1 May 1947, 

14 
he was given a job of enormous proportions. The National Security Act, 

then on the verge of passage, included only a short and vague description of 

the new Central Intelligence Agency, whose actual definition and role 

would depend heavily upon the leadership of its first director. Hillenkoetter, 

who had no real taste for the cut and thrust necessary to survive and succeed 

in Washington, was simply the wrong man for this defining role. Vandenberg and Smith both had what Hillenkoetter lacked: a real instinct for power 

and the rank and prestige needed to succeed in bureaucratic infighting. 

McDonald quoted R. Jack Smith, a CIA officer of that period, who wrote in 

his memoirs, "Our director was Rear Admiral Roscoe Hillenkoetter, a thoroughly decent, unpretentious man, but a rear admiral. In the hierarchical 

maze of Washington, his authority scarcely extended beyond the front 

door." 

While the 1947 National Security Act established CIA principally as 

an organization to coordinate departmental intelligence activities and to 

"correlate and evaluate" intelligence, it was understood that it would also 

collect foreign intelligence as its predecessors the Strategic Services Unit 

(SSU) and the Central Intelligence Group (CIG) had done, even though neither the Act nor the debate before its passage spoke of this espionage function. What later came to be called covert action, on the other hand, was 

unmentioned in the Act because it had not been considered at all. The Act's 

primary purpose, McDonald noted, was "to create a National Military 

Establishment (which eventually became the Department of Defense), an 

independent air force, a statutory Joint Chiefs of Staff, and a National Security Council to coordinate national security policy. A short section establishing the CIA was tacked on to the Act. Although Vandenberg had 

convinced President Truman that the United States needed a statutory CIA, 

the Act included the Agency as unobtrusively as possible, to avoid provoking debate that might endanger the Act's principal objective, to unify and 

restructure the US military establishment." 

CIA's commitment to covert action began in a small way in the fall of 

1947. Since the Soviets were vigorously subverting West European governments and subsidizing Communist parties, many US officials—especially 

the State Department—sought new ways to help our friends counter Soviet 

influence. The issues were how to do it and who would have the responsibility. Originally, the new covert action role was assigned to the State 

Department, but Secretary of State George Marshall rejected it, convinced 

as he was that such activities would undermine the credibility of US diplomacy. In late 1947 the NSC added the covert action responsibility to CIA's 

espionage unit, the Office of Special Operations (OSO). "Although OSO 

did some very effective covert action, especially in the April 1948 Italian 

elections," McDonald continued, George Kennan, first Director of State's 

new Policy Planning Staff, pressed for a new organization specifically 

designed to handle such operations. In the summer of 1948 the NSC therefore established a new Office of Policy Coordination (OPC), which found a 

dynamic leader in Frank Wisner, a deputy to the Assistant Secretary of State 

15 
for Occupied Areas, who had served with distinction in the OSS. Although 

OPC was administratively part of CIA, Wisner took his directions from the 

Secretaries of State and Defense, largely bypassing the DCI. McDonald 

pointed out that Hillenkoetter, to his credit, had opposed the whole covert 

action concept for CIA, but that OPC nevertheless rapidly grew into an 

almost autonomous empire. 

In 1948 the National Security Council commissioned the Dulles 

Report, a study of CIA produced by a three-man committee chaired by 

Allen Dulles, who later became President Eisenhower's DCI. Although it 

was expected to be a routine survey of CIA, when submitted in January 

1949 the Dulles Report turned out to be a "devastating critique" of the 

Agency. The criticisms, McDonald explained, were principally that the CIA 

and DCI were not effectively coordinating what we would today call the 

Intelligence Community. CIA, the report contended, was adrift. "Having 

become engrossed in current intelligence, it had failed to produce national 

intelligence estimates regularly and systematically." Endorsing most of the 

report's criticisms in July 1949, the National Security Council directed 

Admiral Hillenkoetter to make the necessary changes and reforms. 

While the NSC's action was a vote of no confidence, Hillenkoetter 

remained in office for another year and half. It was only in the summer of 

1950, after the North Koreans attacked South Korea, that President Truman 

sent Admiral Hillenkoetter back to sea and appointed Walter Bedell Smith 

as DCI. (Stomach surgery for ulcers kept Smith from taking office until 

October.) Unlike the unassuming Hillenkoetter, Smith had rank and enormous prestige—he had been General Eisenhower's chief of staff from the 

North African campaign through the conquest of Europe, and President 

Truman's Ambassador to the Soviet Union at the outset of the Cold War. 

Demonstrating "tremendous drive and an enormously forceful personality." 

Bedell Smith took the Dulles Report as his agenda and systematically reorganized the CIA. He immediately took control of the sprawling and quasiautonomous OPC, informing Frank Wisner that henceforth his orders would 

not come from the Secretaries of State and Defense, but from the DCI. 

Smith systematized the production of estimates by creating the Board and 

Office of National Estimates, both headed by William Langer, a distinguished Harvard professor of diplomatic history. The new DCI also reorganized CIA's structure into the directorates that still exist today. 

In the light of these accomplishments, McDonald regards Walter 

Bedell Smith as "one of the greatest Directors of Central Intelligence." 

Before he left that position, however. Smith recognized that, although he 

had brought OPC under the DCI's control, its huge expansion of covert 

action still "threatened to engulf CIA." "In October 1951 Smith told his 

staff that covert operations had become so large in comparison to the 

Agency's intelligence function, "that we have almost arrived at a stage 

where it is necessary to decide whether CIA will remain an intelligence 

agency or become a 'cold war department'." "Although we must admire 

16 
General Smith's great achievements in reforming CIA," McDonald concluded, "we must also regret the enormous excursion into covert action that 

even he could not stop, and whose consequences would plague the Agency 

for many years to come." 

In his presentation, Wesley Wark stated that there are some startling 

features associated with the US entry into the intelligence game as a permanent player in peacetime. One, he said, is the rapid pace of change experienced by the CIA and the US Intelligence Community after 1947. "Change 

not only came quickly but was largely unplanned. If there ever was a blueprint, it was rendered irrelevant by ad hoc US responses to Cold War pressures and by the vacuuming up of new missions by a CIA which, in this 

feature at least, closely resembled its wartime predecessor, the Office of 

Strategic Services. What began in 1947 as a small analytical reporting unit 

to provide coordinated intelligence assessments for the President quickly 

mutated...into an agency with significant psychological warfare, covert 

operations, and foreign intelligence gathering capabilities. An agency 

which had its sights first set on the frontiines of the Cold War in Europe 

soon came to have a global mission, with increasing emphasis on political 

instability in Latin America...and a major role in Asia following the socalled loss of China, the subsequent establishment of a major intelligence 

base on Taiwan, and the outbreak of the Korean war in 1950." 

A further feature of the late and fast US entry into intelligence which 

marks the US experience as unique, according to Wark, "concerns the way 

in which the United States constructed its new intelligence system in public. 

This was historically unprecedented. Like the evolution of a Central Intelligence Agency, the public unfolding of a debate over the nature and purpose 

of intelligence was unplanned but probably inevitable." Wark stated that the 

origins of this debate were in "the politics of leaking" but that it was sustained by the press and sporadic congressional interest and by public anxiety. "That the United States might need to construct a permanent 

intelligence service in peacetime raised the spectre not just of Soviet espionage (but also) the emergence of an American gestapo." The Chicago Tribune's, publication in February 1945 of General Donovan's "Top Secret 

plan" for a postwar OSS contributed to this anxiety, and after the Truman 

Administration abolished OSS the following September, Donovan counterattacked. He leaked favorable press accounts of OSS achievements during 

the war and helped promote publication of the memoirs of OSS colleagues. 

In a major article entitied "Intelligence: Key to Defense," published in Life 

Magazine in 1946, he argued that intelligence was necessary for a world 

power such as the United States had become. 

Wark identified Hanson Baldwin of The New York Times as "perhaps 

the most sophisticated commentator in the American press on intelligence 

matters during the early years of the Cold War" and "the principal journalistic crusader for a strong American intelligence system. In his first article 

addressing this theme, printed in October 1945 and entitied Atomic Age 

17 
Lessons, Baldwin conjured up a vision of an atomic Pearl Harbor and 

coined the phrase that would become his trademark: 'An adequate intelligence service...is today the first line of defense.'" In 1946 and 1947, he 

wrote "a series of thoughtful and articulate pieces...all loosely tied to the 

ongoing struggle to create a centralized peacetime intelligence service in 

Washington....Baldwin kept a close watch on intelligence developments in 

the US Government and attempted to use his journalism to stimulate further 

improvements in the nascent intelligence system and to alert the public to 

what he saw as laggardly or ineffectual measures." 

"Running parallel to this journalistic debate on the issue of American 

intelligence needs was a more academic investigation which saw the publication of a first generation of analytical works on intelligence as a government activity." Wark recounted that, "Walter Langer contributed occasional 

articles to scholarly journals on the subject, and David Bruce, former OSS 

station chief in London during the war, wrote, sometimes anonymously, for 

highbrow magazines like The Atlantic Monthly. "But the "crowning 

achievement" of this kind was the book Strategic Intelligence for World 

Policy, published in 1949, by Sherman Kent, Yale historian and OSS veteran (who later became chairman of CIA's Board of National Estimates). 

"Kent advocated special attention to what he called speculative evaluative 

intelligence designed to give policymakers a sense of the direction in which 

world politics were headed." 

In Wark's judgment, "The academic investigation, like its journalistic 

counterpart, helped keep attention focused on intelligence issues and helped 

codify problems in the American conduct of intelligence. The journalistic 

investigation helped to define the role of American intelligence in the postwar world and helped accustom the American populace to the need for 

intelligence." 
Luncheon Address 

Richard E. Neustadt, Harvard University 

In order to provide some insights about President Truman and "add a 

certain flavor" to the conference. Professor Richard E. Neustadt, who 

worked for the Truman Administration in the Bureau of the Budget and 

then on the White House staff, told some stories. The first concerned a personal encounter he had with the former President in the mid-1950s. Mr. 

Truman, Neustadt said, told him the decision to proceed with research on 

the hydrogen bomb had not been a difficult one, even though a breakthrough on how to develop such a weapon had not been achieved and the 

trigger had not yet been invented. The President was convinced the Soviets 

did not have the capability to build one that would be the equivalent of a US 

version because "after all, they're essentially peasants, not Americans." But 

when the scientists involved asserted that the USSR might be able to do so, 

whether we did so or not, Truman realized he had no alternative; US policy 

had to be based on that premise: "I could not bind my successor, [he said,] 

to nuclear inferiority." 

"Mr. Truman had faith in the United States and in the linear character 

of progress. He did not in his heart believe that anything fundamentally bad 

could happen to the United States." Such faith, Neustadt acknowledged, 

"doesn't exist anymore, but you have to remember it existed then." 

He told some other stories that underscored Truman's deep loyalty to 

people he trusted, like Dean Acheson, adding that the President "had the 

inverse feeling about people who had earned, in his view, his mistrust." 

Neustadt believed one of them was Bill Donovan and that this was the genesis of Truman's initial antipathy toward a central intelligence organization. 

"[He] acquiesced very cheerfully in the demise of OSS. My suspicion is he 

was the more cheerful because of his feelings, for whatever reason, about 

Colonel Donovan." According to the gossip Neustadt heard in the White 

House at the time, James Byrnes, then Secretary of State, wanted State to 

inherit the functions of OSS. Budget Director Harold Smith not only 

wanted OSS dismantled but also "did not want an organization of that character in the executive office of the President." 

Truman believed as they did that "the permanent functions of the 

government should go to the permanent departments of the government and 

be under the supervision of responsible Cabinet officers." Later, when the 

issue was the extent of the DCI's control, he apparently shared Admiral Hillenkoetter's view that the legitimacy of the intelligence collection and analysis functions would be put at risk by adding covert action. Truman yielded 

only when Dean Acheson and Walter Bedell Smith, in response to the perceived demands of the Korean conflict and its implications for the EastWest conflict, insisted on extending DCI control to the Office of Policy 

Coordination, which then had responsibility for covert action. 

19 
Neustadt's last story related statements he personally heard Truman 

make about his foreign policy after he left office. " 'Hell,' he said, 'That 

wasn't [my] foreign policy. I never could have gotten those things through 

the Republican 80th Congress.' (They only got through because of Stalin.) 

'It was Stalin's foreign policy.' " Neustadt's assessment was that Truman 

did not view East-West rivalry in apocalyptic terms. "He did not think the 

United States was going to be defeated. He never lost the view that the 

Soviets weren't Americans and that, technologically, they couldn't keep 

up.... His faith in the outcome was limitless. Maybe he wasn't so dumb 

after all." 

20 
Session III: Th e Internationa l Context: 1945-1953 

Panel A: CIA and the Cold War in Europe 

Deborah Larson, UCLA 

William Colby, former DCI 

"The CIA had a particularly important role to play in the early part of 

the Cold War because the Soviet threat was perceived to be primarily political and psychological rather than military," Deborah Larson began. 

"Accordingly, Washington poured resources into psychological warfare. 

What I am going to talk about today is the European context for this interest 

in covert operations and psychological warfare. I'm not a veteran of covert 

operations, .. .but I'll give you the academic point of view." 

"In February 1947, Greece was on the verge of falling under the control of a Communist-led guerrilla movement. George Kennan warned that 

the fall of Greece might have a bandwagon effect on the rest of Europe. 

Communist parties in Italy and France would be strengthened. Other states 

would believe that Communism was the wave of the future.... In the Truman Doctrine speech in 1947, Truman requested $400 million for aid to 

Greece and Turkey. Although the Truman Doctrine was directed specifically at Greece and Turkey, US officials knew that much greater aid would 

be needed for Western Europe. In 1947 there was a serious economic crisis 

in Europe brought about by the wartime destruction and unusually harsh 

winter and disruption of traditional trading patterns. Europeans were starving and shivering in the cold, and to make matters worse there was a shortage of coal. In April the French pleaded for additional shipments of grain so 

that they would not have to reduce bread rations. Forty-five percent of 

Europe's imports were paid for with US assistance. When the US began 

reducing its loans, the Europeans would have to cut purchases of food and 

fuel, which could lead to massive political unrest." 

"State Department officials feared that the Europeans might turn to 

Communism out of despair and desperation. Both Italy and France had coalition governments in which the Communists were represented. Communists held four cabinet positions in France, including the posts of Vice 

Premier and Minister of Defense. About one-third of the electorate in 

France and Italy supported the Communist Party. In the 1946 elections in 

France, the Communists received the largest number of votes. Italian moderates were uncertain of American support and unwilling to offend the 

Soviet Union by casting out the Communists. The Truman Administration 

was worried that the Communists could win power through elections in 

21 
Italy and France. Communist regimes in Italy and France might negotiate 

agreements with the Kremlin and take their countries into the Soviet orbit. 

Bolstered by the Truman Doctrine and by the hope of US financial assistance, the Governments of Italy and France in May 1947 excluded the Communist members. On June 5, 1947, Secretary of State George C. Marshall 

offered the Europeans assistance for reconstruction. The most important 

objective was to prevent Communism from advancing into Western Europe. 

The Marshall Plan and the Truman Doctrine were both aspects of the containment policy, the use of economic and military assistance to block the 

spread of Communism." 

"Although the Truman Doctrine had anti-Communist rhetoric whereas 

the Marshall Plan was purely humanitarian in its rhetoric, the Soviets were 

much more threatened by the Marshall Plan than they were by the Truman 

Doctrine. Stalin was not alarmed by US aid to Greece because the Soviets 

were not supporting the Communist uprising in Greece. Stalin considered 

Greece to be in the Western sphere of influence. The Marshall Plan, and 

particularly US plans to rebuild Germany, terrified the Soviets. One of the 

objectives of the Marshall Plan was to rebuild the Western zones of Germany. The Soviets were afraid that the United States was planning to use 

Western Europe as a base for attack. Otherwise, Soviet officials reasoned, 

why would the Americans be so generous with their capitalist rivals? Why 

would the US spend millions of dollars to build up other countries' economies? ... " 

"Stalin's fear of Germany and the Marshall Plan led him to take several actions which frightened the United States. The first Soviet reaction 

was the establishment of the Cominform. The Cominform, or Communist 

Information Bureau, was the director of the international Communist 

Party.... his was mainly a symbolic gesture because the Cominform had no 

real power. But Americans feared the spreading tentacles of Communism. 

Stalin put Zhdanov, a hard-liner, in charge of the Cominform and of carrying out ideological activities.... Zhdanov told the first organizing meeting 

of the Cominform in September that the Marshall Plan was aimed at overthrowing the new democracies in the Balkans. He explained that the Marshall Plan was designed to lure Eastern Europe into a trap and shackle them 

with the fetters of dollars. Just as the Truman Doctrine was the US declaration of Cold War, so [Zhdanov's speech] was the Soviet declaration of Cold 

War. He said the world was divided into two camps, capitalism and socialism. It was a mirror image of the Truman Doctrine." 

"At the same meeting Zhdanov told representatives from the Italian 

and French Communist Parties that they should struggle against the Marshall Plan. The Italian and French Communists were not pleased with these 

instructions. During the war (they) had cooperated with the non-Fascist parties and had won considerable support doing so. Now, the Soviets told them 

they should try to block the success of the Marshall Plan by engaging in 

22 
strikes, walkouts, riots, even though this would slow down economic recovery and worsen the plight of the working man. In fact, the strikes and walkouts carried out by the Italian and French Communists backfired because 

they resulted in loss of support. But the strikes did frighten Western liberals 

and Social Democrats." 

"On September 16, 1947, the CIA circulated the first of its monthly 

reviews relating to the security of the United States. The memo stated that 

only the Soviet Union could threaten the security of the United States but 

the Soviets were presentiy incapable of military aggression outside Europe 

and Asia. Even though they were conducting political, economic, and psychological warfare against the United States, the greatest potential danger to 

US security, according to the CIA, lay in the possibility of the economic 

collapse of Western Europe and the consequent accession to power of elements subservient to the Kremlin. ... " 

"In 1947 the CIA provided funds that helped defeat the Communists 

in the French elections. The CIA also subsidized non-Communist unions in 

France, helping to split them off from the Communist unions and averting a 

general strike. In response to the challenge presented by the Cominform, the 

United States decided to resort to psychological warfare against the Soviet 

Union, which meant primarily propaganda. In December 1947, National 

Security Council Directive 4/A put the CIA in charge of covert psychological operations. US psychological warfare was a necessary complement to 

the huge financial resources the US was spending in the Marshall Plan. It 

was designed to prevent the Communist parties from sabotaging the success 

of the Marshall Plan through the use of propaganda or agitation. The initial 

theater of psychological warfare was in Italy. James Jesus Angleton was 

placed in charge of the covert Italian operations. The CIA subsidized the 

center-right in Italian politics. The Truman Administration poured in about 

ten million dollars to pay for local election campaigns, bribes, and propaganda." 

"The Marshall Plan could not succeed if the Soviets interfered with 

German recovery. European recovery needed German coal, steel, and chemical fertilizers. Because the Soviets had a veto, the Control Commission in 

Germany could not operate effectively. The Western countries decided to 

take matters into their own hands. In February 1948 the United States, Britain, France, and the Benelux countries opened a conference on Germany in 

London to which the Soviets were not invited. They decided to unify the 

Western zones, giving the West Germans control over their government, 

[and to institute] currency reform." 

"Stalin saw the United States engaged in an effort to rebuild Europe, 

rebuild Germany, extend American influence over Europe, using dollars to 

isolate the Soviet Union. As part of his reaction to the Marshall Plan and 

steps toward the formation of a West German government, Stalin cracked 

down on Eastern Europe. He had 'nondemocratic' politicians shut out of the 

23 
Governments of Hungary, Poland, and Czechoslovakia. In Bulgaria opposition leader Petkov was executed; in Poland, 17 non-Communists were tried 

as traitors; in Hungary prominent members of the opposition had to go into 

hiding. Until this time, the Czechoslovakian Government had managed to 

maintain a democracy; they did whatever the Soviets wanted in foreign 

affairs, and in return they were left alone to manage their internal affairs—a 

classic sphere of influence. In February 1948, 12 non-Communist members 

of the Czech cabinet resigned in order to force a new election. The Czech 

Communists used this as an opportunity to establish a Communist government. After taking over, the Communists carried out purges and trials of 

political opponents. There was no direct evidence of Soviet involvement; 

the Soviets only had 500 troops in Czechoslovakia at the time. On March 10 

the non-Communist premier, Masaryk, jumped to his death from his bathroom window. It is unclear if it was suicide or murder. There is some evidence that Masaryk was about to flee the country and in order to avoid 

embarrassment was murdered and pushed out the window." 

"The Czech coup seemed to prove that democratic institutions were 

more fragile than had previously been believed. United States officials 

inferred that Soviet dominance was likely to come about through local subversion, not military conquest. Truman used the Czech coup to get the Marshall Plan through Congress, restore the draft, and increase the military 

budget for air power.... In light of the coup, the Western European countries became concerned about the military imbalance in central and eastern 

Europe; the Soviets had thirty divisions [there] whereas combined French, 

British, and American forces amounted to less than ten divisions. In March 

1948 Britain, France, and the Benelux countries signed the Brussels Treaty, 

which created the Western European Union, a predecessor of NATO. Under 

the Treaty, the five countries agreed to cooperate with one another militarily. The British asked the United States for a firm commitment to defend 

Europe against aggression, but...Congress was wary of permanent US commitments to Europe." 

"For various reasons, the Communists did not win in the Italian elections in 1948; instead, the Christian Democrats won 48.5 percent of the 

popular vote. The defeat of the Italian Communists showed that the 

momentum of Communism could be stopped. Heartened by the Christian 

Democrats victory, the Truman Administration decided to increase support 

for covert operations. Kennan pushed hard to make special operations permanent and to enlarge the scope of covert operations. In June 1948, NSC 

10/2 superseded NSC 4/A. NSC 10/2 established a new covert operations 

branch within the CIA, the Office of Policy Coordination. It was authorized 

to carry out propaganda, economic warfare, sabotage, and subversion 

against hostile states." 

"In order to reassure France about the formation of a West German 

government, Washington began to coordinate military plans with the British 

and French. Senator Arthur Vandenberg, a former isolationist who headed 

24 
the Senate Foreign Relations Committee, sponsored a Congressional resolution that became the basis for NATO. [Secretary of State] Dean Acheson 

promised Congress that American troops would not be stationed in Europe 

permanentiy but only until Europe recovered. The Truman Administration 

did not regard the Soviet Union as a military threat. US troops were 

intended to reassure Europe and prevent panic, so that recovery could get 

under way. But now the Soviets were alarmed. The Americans were breaking a tradition that went all the way back to George Washington, that of 

avoiding alliances except in the case of war. The Soviet Government 

pointed out that an American-West European alliance was proposed in 

peacetime when nobody threatened the security of either the United States 

or Western Europe." 

"The Soviets were even more concerned about Western steps toward 

establishing a government in the Western zones of Germany.... On June 18, 

1948, the Western countries announced that they were going to issue a new 

currency for the Western zones ... the Soviet response to the currency 

reform was to blockade West Berlin. On June 24 the Soviets closed off all 

routes to Berlin except by air. The city had enough food for 36 days. Berlin 

was a Soviet hostage. Stalin's goal was to pressure the Western countries 

into giving up the idea of establishing a separate West German government, 

but the blockade had the opposite effect; it hastened progress toward establishing a West German government and incorporating it into NATO. Truman chose to airlift supplies to Berlin as a compromise between retreat and 

war. Finally, in May 1949, the Soviets lifted the blockade. They had failed 

entirely in their aims.... The Berlin blockade led to the formation of NATO 

in April 1949. France decided that the Soviet Union was now a bigger threat 

than Germany." 

"The Berlin crisis was part of an action-reaction syndrome: Marshall 

Plan, Czech coup, currency reform, Berlin blockade, NATO. Each side perceived the other's defensive actions as offensive. Each side took countermeasures. The result was a spiral of conflict that neither side intended.... 

After the North Koreans invaded the South in 1950, US officials feared for 

a brief period that the Soviets might resort to war in Europe, such as 

between East and West Germany. United States covert action continued in 

France and Italy throughout the 1950s as the psychological warfare continued. " 

"That," Larson declared in conclusion, "was the Cold War." 

William Colby, addressing the role of CIA in Europe during this 

period, began by explaining, "We had just finished the Great Crusade 

against Fascism." The United States had 12 million people in the armed 

forces in 1945, but by the end of 1946 there were about a million and a half, 

the remainder having been sent home. "We then were faced with the fact 

that there was a remaining threat, and many in my generation considered 

the Cold War was merely a continuation" of the kind of totalitarian threat 

25 
Hitler had posed. There were some obvious differences: former allies had 

become adversaries, and the French and Italian resistance forces with which 

the Allies had worked during the war against Germany became major subversive forces. When France was liberated in 1944, a large portion of southwest France was taken over by Communist units which tried to establish 

Communist governments there, using even executions to achieve that end. 

"That was the first scent that something was wrong in our relationship" with 

them. "We saw the Communist parties develop with the Cominform's 

enthusiastic support in countries like Italy and France and...that they were 

building their legal forces, not only the [political] parties but Communist 

trade unions, farmers' groups, cooperatives, youth groups, womens' 

groups, lawyers groups—the whole panoply of international fronts for the 

Communist political offensive." 

"CIA's initial reaction to this was, of course, to try to reestablish some 

intelligence capabilities in Europe," Colby continued. "We turned first in 

many cases to developing liaison relationships with governments. That 

included one that was quite controversial: the establishment of a relationship with General Gehlen and his (intelligence) service in Germany, which 

had concentrated during World War II on Eastern Europe and Soviet actions 

there (and had) a fund of knowledge that was very handy to us. We sensed 

that it was politically delicate, but at the same time the threat demanded that 

we take such steps.... At the time it seemed quite a reasonable thing to do. 

We did not consciously establish links with Nazi groups but rather with 

members of the Wehrmacht,...a number of whose officers had participated 

in the plot against Hitler." 

Colby said his first assignment in Europe for CIA was to help prepare 

for a possible Soviet occupation of Western Europe—stashing supplies, 

doing some training, and establishing networks of potential resistance organizations in Scandinavia, where he had operated during the war. "We began 

by using the same tactics and techniques that had been so successful during 

the war, parachuting agents into the Baltic countries, Poland, and various 

other countries.. .only to find out that in some of those areas we were taken 

in by the very authorities we were trying to oppose. They managed to fool 

us in Poland rather thoroughly; the agents we dropped disappeared in a very 

short time. We discovered that action in a Communist totalitarian society 

was a very different thing than action in Nazi-occupied Europe or even in a 

Fascist society." 

CIA operators then tried new techniques, using defectors and refugees 

to develop agents in Eastern European countries in order to learn something 

about the policies and programs of the new governments there. These operations, according to Colby, "were moderately effective." He cited Radio 

Free Europe and Radio Liberty as the one significant offensive effort 

"against the occupied territories and the USSR itself. It gave the people in 

those areas "an alternative view of what was happening." revealing to them 

Stalin's labor camps and prisons. "We began the process of showing the 

26 
reality of life under Communism as against the so-called glories of Socialism that were being touted. And we tried to support the concept of the captive nations: the fact that nations in Eastern Europe had been captured by a 

foreign and alien society." The objective was "to create a climate of opinion 

that those countries were suppressed" and that other European countries 

were similarly threatened by the spread of Communism. 

Colby also described the major political and psychological programs 

that were conducted in Western Europe. "There was a danger that several of 

these countries might vote themselves into Communism by error or by 

fraud. It was a problem of strengthening the resistance to Communism." 

Colby acknowledged that inasmuch as the Communists were on the 

far left of the political spectrum, the question can be asked, "why didn't we 

turn to the Right" for support in resisting Communism? The answer, he 

said, was provided by "some very smart people who were running our programs at the time. They said, 'you can turn to the Right [but] at that point 

you leave the Center open to penetration by the Communists, and if they get 

both the Left and the Center, they've got the victory. The battie for the loyalties of these Western European countries will be a battle for the Center, 

and the Right is irrelevant because it has nowhere else to go.' So a very conscious program and policy was developed to strengthen the Center, the 

democratic forces in Western Europe, so they could revisit the entreaties of 

the Left." 

"Similarly," the former DCI continued, "there was an intellectual contest, a very important one. The challenge was whether intellectuals would 

sympathize with the changes advocated by the socialist nations or find more 

value in the importance of freedom—free speech, free press, free broadcasting, and so forth. So CIA, again seeing that the Center was the contested 

area, began to support groups of intellectuals, the Congress of Cultural 

Freedom for instance. We had to meet the Communist peace offensive. . .which tried to identify the Soviet Union and Eastern Europe with the 

cause of peace and (contended that) it was the West that was building up its 

forces and threatening to end peace. This was carried on at massive expense 

by the Communists at world congresses of peace, at youth congresses (and 

similar international gatherings). So as part of the effort to meet that challenge, we began to support groups in the West and in this country which 

would participate in those congresses, who would speak for the importance 

of freedom (and) real peace rather than the peace of the gulag." 

Colby affirmed that "a very famous lady who was very antiestablishment for many years" acknowledged that she was supported by CIA when 

she went to one of those congresses. "She said the interesting thing about it 

was CIA never told us what to say. They just said go over there and act like 

a free American student. That's ah you were asked to do, nothing more than 

be yourself. And she, I think for good reason, couldn't find anything very 

wrong with that, even though CIA had paid the very modest expenses." 

27 
After the Soviets "held a peace conference in Vienna of which they lost 

control, they never tried to hold another one outside the Iron Curtain 

because they wanted to have absolute control of the scenarios for such congresses." 

The US countermeasures begun under President Truman in the early 

1950s, in Colby's view, were helped by Soviet actions, such as the coup in 

Czechoslovakia and the suppression of the revolution in Hungary in 1956. 

"We lost some of those efforts," he admitted. "We lost in Albania because 

there were traitors in our midst—the British group [Philby and his collaborators]. But the occurrence of these rebellions dramatized the fact that freedom was very much the objective of many people in that area. By the '60s 

the major battie had ended; Western Europe was protected. It had been 

threatened by the Red Army, which was met by the NATO Alliance; it was 

threatened with economic collapse which was met by the Marshall Plan; 

and it was threatened by subversion." 

"In the '60s we began to see the revelations" of CIA's covert activities. 

The Bay of Pigs was a revelation of a sort, but the book Invisible Government really started it. Then came the Ramparts articles showing CIA had 

had a relationship with the National Student Association. Following such 

exposes, the Agency began "a phasing down" of some of those activities, 

including in Italy where the situation improved and the need for the support 

of the Center parties declined. Colby summarized by saying, "If you look at 

the record of CIA in those early days, we set up the systems by which we 

had to meet a whole new kind of world warfare. It was a war, a political 

war, and we made some mistakes. We did some things wrong, but overall 

I'd give us a good B plus." 

During the question period, Colby was queried about how beneficial 

CIA cooperation with Gehlen's organization had been. He replied that he 

had not dealt directiy with Gehlen but that it was always "an arms-length 

relationship" with the main value being access to "somebody who knew 

something about East Europe and...Ukraine and Russia." Gen. J. Lawton 

Collins, from the audience, volunteered that he was in the intelligence division of US Forces in Europe which dealt with the Gehlen group before it 

was turned over to the CIA. According to him, Gehlen's people "had a tendency to tell you what you wanted to hear, so you had to be a little cautious 

with them." He added that at the time he and many others in the military did 

not think the United States should be spying on our former friends and 

allies. 

Another questioner asked whether the two speakers thought Soviet 

archives will ever yield anything that will help us understand how much of 

a threat the Soviets really were, because much of what we did was a reaction to that perceived threat. Colby cited a Soviet document on a briefing for 

Khruschev about the Korean war which, as he recalled, said Kim Il-song 

made "something like 37 requests" for Stalin's permission to start the war 

28 
but was repeatedly turned down. The thing that changed Stalin's mind was a 

Soviet assessment that the United States would not react, whereupon he 

gave his permission. Colby pointed out that this coincided with Dean 

Acheson's speech at the time in which he excluded the Korean Peninsula 

from the areas he designated were important to US interests. "So here was a 

very well-founded assessment which.. .didn't turn out to be a correct assessment because Harry Truman wouldn't stand for [a North Korean conquest 

of the South]." 

A similar case was the question of who on the Soviet side had the 

authority to use nuclear warheads during the Cuban missile crisis. The 

United States, according to Colby, had assumed that the Soviet commander 

in Cuba was subject to Moscow's control on the question. That was true, he 

said, for the long-range nuclear missiles but not for the tactical ones, 

because the Soviets feared their conmiunications relay ship in the Atlantic 

would be taken out in the event of an American invasion, and that authority 

could not be granted in a crisis. So the local commander actually had 

authority to use the tactical weapons, which could have engendered a 

nuclear holocaust if the United States had invaded and been met by a 

nuclear response. 

Norman Polomar of the US Naval Institute, commenting on what had 

been said about documentation and perceptions, submitted that, "We have 

to be very careful with some of the documentation we're getting from Russia now. I'm working on a Soviet Russian naval history program with the 

Russian Navy, and there are documents that they contend just no longer 

exist because as leadership changed, certain documents were trashed." In 

some cases, even records that documents existed were destroyed because 

people were instructed to get rid of anything reflecting the policies of their 

predecessors. "There are major gaps in their archives that I had a feeling we 

and they themselves may not even be aware of at this stage, going back to 

the 30s and 40s." 

Vladimir Pozniakov of the Institute of General History in Moscow 

volunteered on that point that, "Even if some naval records were destroyed, 

it doesn't mean that there are no traces whatsoever." According to him, the 

peculiar feature of Soviet archives system is that all the major documents or 

copies of them or special memorandums on them were sent to the Party 

Central Committee, "and you can always find a lot of documents there [that 

are] not, say, in naval or army or intelligence archives. It is my own experience." 

29 
Session III: Th e Internationa l Context: 1945-1953 

Panel B: CIA and the Cold War in Asia 

Nancy Bernkopf Tucker, Georgetown University 

Harold Ford, CIA 

For Nancy Bernkopf Tucker the moment that symbolized the developments of the Truman era with reference to the Cold War in Asia was 

Dean Acheson's speech at the National Press Club on January 12, 1950, in 

which he placed Taiwan and Korea outside the US defensive perimeter in 

Asia. "Why was this such a significant address?" she asked. "Because in 

one stroke it encapsulated the basic dynamics of the policies, pressures, and 

problems that characterized the Truman Administration's interaction with 

Asia between 1945 and 1953." 

"Specificafly, the speech demonstrated four critical realities. First, it 

made clear that the hearts and minds of policymakers in the Truman 

Administration were deeply immersed in European affairs. Asia was decidedly less significant in their view, ranking at the bottom of most lists of priorities. Even after the war broke out in Korea, for instance, triggering a 

great escalation in the US military budget and approval of National Security 

Council Directive 68, much of the additional money appropriated went for 

the militarization of NATO and the United States rather than to fight in 

Korea...." 

"This Atlanticism related intimately with another decisive variable: 

the effort to take note of the limits of US resources and the need to focus on 

defensible strong points of clear value to the United States. This was, of 

course, in absolute contrast to the posture of the 1947 Truman Doctrine, 

which had suggested US involvement everywhere. Now the focus was rhetorically where it had always been realistically: on Europe, the Middle East, 

and occasionally Japan. Retrenchment also reflected the earlier decision by 

Truman to retreat from the anticolonialism of his predecessor. Whereas the 

elimination of colonies and the fostering of democracy was desirable in 

Asia, Truman was loathe to risk relations with US allies or dissipate 

resources in pursuing quixotic goals." 

"Third, the willingness to place Taiwan and Korea outside the US 

defensive perimeter suggests, I believe, that the Cold War had not yet 

arrived in Asia in full force. Acheson, in taking this position, was simply 

reiterating a perimeter strategy articulated the previous year by Gen. Douglas MacArthur and reinforced by Joint Chiefs of Staff insistence that Taiwan was not important enough to warrant use of US troops to save it from 

30 
Chinese Communist takeover, predicted by the CIA to be probable during 

the summer of 1950. The speech also reconfirmed the announcement by 

Harry Truman on January 5, 1950 that the United States was disengaging 

from the Chinese civil war after years of funneling large amounts of aid to 

Chiang Kai-shek and trying unsuccessfully, through Gen. Patrick Hurley 

and then the Marshall Mission, to mediate a negotiated settiement. 

Although Soviet involvement on the island of Taiwan was considered an 

alarming prospect because of danger to sea lanes, this was still great power 

rivalry rather than ideological conflict and not yet powerful enough to 

project the United States into a full-scale war with the Communist Chinese.... Similarly, there was a perception of Korea as peripheral and 

expendable, with complicated and dubious politics. The United States had 

welcomed Soviet troop withdrawal late in 1948 and then pulled its own 

forces out with alacrity in June of 1949." 

"Finally, point four about the Acheson speech, was the reception that 

the speech evoked in the United States. That clearly demonstrated the difficulties that Truman faced at home because of Republicans frantic to recapture the Presidency after what would soon be 20 years of Democratic party 

dominance, and, increasingly, the tensions bred by the aspirations of a particular Senator named Joseph McCarthy. Acheson was first pilloried for 

having abandoned a loyal American ally on Taiwan and later for having 

issued an invitation to the Soviets to invade South Korea. There were calls 

for his resignation, and no one remembered that his remarks had been well 

within the parameters of policy concurred in by the military establishment." 

"The outbreak of the war just five months later caught Americans by 

surprise, an intelligence failure and a cause for much alarm lest it herald 

Soviet encroachment in Europe as well. The war did resolve uncertainty 

about the lengths that the United States would have to go to cope with the 

Soviet Union. It ended the reluctance to militarize NATO and the United 

States, and it eliminated indecision about commitments to Korea, Taiwan, 

and Southeast Asia. Earlier gestures had demonstrated the Truman Administration's concern about potential Soviet expansion in Asia. Some historians have suggested that the decision to drop the atomic bomb on Hiroshima 

and Nagasaki was informed in part by a desire to use atomic diplomacy to 

constrain Soviet aspirations in Europe and Asia." 

"Later, the reversal of occupation policies in Japan—with its abandonment of political purges, unilateral termination of reparations payments, 

and preservation of the Zaibatsu industrial monopolies—was designed to 

strengthen an economy whose continuing fragility risked domestic turmoil, 

regional instability, and vulnerability to Communist contagion through 

infiltration or dependence on Communist markets. So, too, the secret provision of financial support to Paris, beginning in 1945 and becoming public in 

February of 1950, allowed France to free resources better to fight in Vietnam against a Communist insurgency. This, too, indicated a willingness on 

the part of the Truman Administration to try to stop the growth of Soviet 

power in Asia." 

31 
"With the Korean war, anti-Communism for a time became all encompassing. Prior to Korea, Acheson had successfully sidetracked those in the 

State Department, the military, and among the public who were most belligerent, ignoring men who wanted to place troops in Taiwan or stage a coup 

against Chiang Kai-shek in order to create a stronger, more responsive government on the island. In contrast, Acheson thought a lot about the likelihood that Mao Zedong might be another Tito, and he convinced the 

National Security Council and the President to approve an economic policy 

which allowed for limited trade with Communist China, recognizing the 

benefits to Japan. But with the war, efforts to see Communism as anything 

but monolithic ended. Aggression necessitated forceful response to make 

containment credible. It also gave Truman the opportunity to demonstrate to 

his critics that he was tough. The results of the attack can be seen in six 

immediate and longer term developments." 

"First, Truman ordered the Seventh Fleet to patrol the Taiwan Strait so 

as to prevent the anticipated Chinese Communist assault on the island. It 

also constrained Chiang Kai-shek, deterring his efforts to return to the 

mainland and at the same time drag the United States into a war with China. 

Although meant to be temporary, Truman found it subsequentiy impossible 

to extricate the United States from this commitment, and Dwight Eisenhower would eventually be forced to accept a mutual defense treaty with the 

Nationalists as a result." 

"Secondly, the Administration provided technical advisers to the 

French in Indo-China, supplementing earlier financial aid. This, of course, 

was the entering wedge for full-scale US commitment later." 

"Thirdly, in 1951 the Japanese Peace Treaty was signed without either 

the Soviet Union or the Chinese Communists adhering, since they believed 

that the Treaty represented a threat to strengthen Japan dangerously and 

also would assure continued basing of US forces in Japan." 

"Fourth, the war led to the restructuring of the United Nations, replacing an institution based on great power agreement with a new organization 

based on the Uniting For Peace resolution, which made it possible for the 

General Assembly to vote to bypass a Security Council unable to act, 

should a Soviet veto be cast. The assumption was that, since the United 

States controlled the General Assembly, if the United States wanted something to happen it could always make that come to pass." 

"Fifth, the North Korean attack led the Truman Administration to the 

folly of trying to reunify Korea. Ignoring both the authoritarianism and 

ineffectiveness of the Rhee regime and the warnings from Beijing that US 

troops must not cross the 38th parallel and threaten China's borders, the 

result proved to be a wider conflict with American and Chinese boys killing 

each other on the Peninsula. Still it was not as wide a war as some elements 

of the US military and Chiang Kai-shek hoped it would become when they 

advocated blockading China, deploying Nationalist Chinese troops on the 

32 
Korean Peninsula, and aerial attacks, perhaps even nuclear ones on Chinese 

supply lines and cities. The world was spared such a conflict because all the 

belligerents and most of their supporters recognized the futility of massive 

engagement. On the other hand, the Korean conflict entrenched Sino-American antipathy for the following twenty years." 

"The sixth is the only really positive result of the Korean war: the fillip it gave to the Japanese economy. For many Americans, Japan was really 

the only important actor in Asia because it had the potential of being the 

industrial engine for the region. The fact that war procurement invigorated 

Japan's faltering economy they perceived as critical." 

"There were other developments in these years not influenced by the 

war in Korea that also demanded attention from Washington. First of all 

there was a struggle for independence in the East Indies between 1945 and 

1949 which eventuated in the end of Dutch colonial rule. In this prolonged 

conflict the United States took a decisive part by threatening to suspend all 

economic aid to Holland if it did not grant independence. Unfortunately, or 

maybe fortunately, US motives here were not primarily respect for selfdetermination but rather were influenced by the weight of domestic US and 

international criticism of Dutch policy, which threatened to undermine support for European economic recovery programs. At the same time, the 

United States Government worried about continuing instability caused by 

Dutch policies and the Dutch inability to end guerrilla warfare which had 

the potential of producing a Communist government." 

"Secondly, in 1950, the Chinese Communists brought their form of 

liberation to Tibet. Concern about this development and American eagerness to destabilize Beijing would lead to significant and prolonged CIA 

involvement in resistance efforts. 

"And thirdly, in Burma remnants of Nationalist Chinese armies, 

which fled the Communist victory in 1949 and 1950, set up bases for continued civil war. During 1951 they staged two unsuccessful attacks on Yunnan Province. But, the lack of success did not deter either the Nationalists or 

the CIA. Operations would continue through the Eisenhower, Kennedy, and 

Johnson Administrations, sometimes with US support, sometimes without, 

and sometimes with support so covert that it would continue even when 

much of the US Government believed that it had ended." 

"The Truman Administration, then, was confronted with a galaxy of 

problems in China, Japan, Korea, Indonesia, and Burma to which it could 

bring to bear little prior knowledge or thought, about which it could muster 

only limited interest, and for which, as Hal Ford will doubUess make clear, 

covert solutions often look more appealing than conventional policies." 

"Let me end by returning to the beginning. Recent revelations from 

Soviet and Chinese Communist archives ironically suggest that the 

Acheson speech, my symbol of the times, may have been as disastrous an 

33 
error as contemporary critics insisted. A 1966 report prepared for the Soviet 

Foreign Ministry, which Katherine Weathersby read and translated in 1993, 

shows that the North Korean attack was not a Soviet effort to test American 

power or to tie Washington down in an Asian war, or to expand Soviet 

power and control. In fact, Kim Il-song had to plead with Stalin for support, 

and Stalin's hesitancy was finally breached only because Stalin was convinced that the United States would not intervene. How was he convinced? 

The Acheson Press Club speech was not the only evidence, but it did weigh 

heavily. Similarly, Mao Zedong was preoccupied with preparing to attack 

Taiwan so as to bring the Chinese civil war to a successful conclusion. He, 

too, believed Acheson, and he not only thought the United States would 

refuse to be involved in Korea but, more importantiy for him, he concluded 

that the United States would not interfere in the liberation of Taiwan, which 

he was in the process of planning." 

"So in the end, McCarthy and those others whom Acheson dismissed 

as neanderthals may have had a point: his statements were probably ill 

timed. In the larger sense, however, the critics were as destructive and perverse as Acheson asserted. By trying to ensure that judgments regarding 

Asia be made entirely on the basis of anti-Communism, such people were 

wrong in their analysis of what was happening in China, irresponsible in 

overlooking the difference between ideological-driven strategies and policy 

determined by great power rivalries, and foolish in making it possible for 

other governments to manipulate Washington by limiting legitimate parameters for decisionmaking. The arrival of the Cold War in Asia narrowed 

options and imagination, ensuring that hot war would continue in Korea and 

reoccur elsewhere, most painfully in Vietnam. For this, both the Truman 

Administration and its opponents bear a significant degree of responsibility." 

Harold Ford introduced himself by saying that in 1950-51 he was the 

Headquarters' case officer in CIA responsible for backing up OPC's most 

ambitious China operations. He offered a couple of preliminary remarks 

about the nature of the Cold War in Asia, which he felt was quite different 

from that in Europe. "There were misconceptions on both sides [in Europe]. 

Nonetheless, I'm not convinced that the Cold War began in 1947. I recall 

that President Roosevelt before his death was concerned about Soviet misbehavior, backing off in many important ways from Yalta even before his 

death. 

"The key event that precipitated the Cold War in Asia was, of course, 

the North Korean invasion. Prior to that time CIA had been running some 

successful OSO or intelligence-gathering operations, and I think I'm right 

that the only covert operation of any consequence prior to the invasion was 

sending Colonel Landsdale and a small team to the Philippines where, as 

you know, CIA and Col. Ed Landsdale helped Defense Secretary Ramon 

Magsaysay turn back the Communist-led Hukbalahap rebellion. But the 

event which spurted large-scale US covert operations was the North Korean 

34 
invasion and then, five months later, the massive Chinese Communist intervention.... The US Intelligence Community did not predict the North 

Korean invasion [or the Chinese Communists' intervention]. 

"I call your attention to the books that you have (CIA Cold War 

Records, The CIA Under Harry Truman). On page 351 [there is] an estimate—from not just the CIA but the then American Intelligence Community—of 12 October 1950 which concluded: 'There are no convincing 

indications of an actual Chinese Communist intention to resort to full-scale 

intervention in Korea.' Not so good. One of the reasons for that was the 

overweening influence upon estimates, as I understand it, of the man who 

knew the most about those questions at the time, and that was Douglas 

MacArthur. He and his headquarters consistentiy downplayed the likelihood of significant Chinese intervention. Thanks to the State Department's 

release of earlier documents now in their published series, we learn that on 

24 November 1950 Douglas MacArthur visited frontline troops, American 

troops in Korea, and assured them that the war would soon be over and 'you 

will be home for Christmas.' Less than 24 hours later, Chinese Communist 

units struck US-UN troops in enormous force." 

"Now the question was, how should the United States respond? MacArthur—a virtual law to himself and, remarkably, still a hero—recommended that the United States take extreme measures against China. In 

Washington, the Joint Chiefs of Staff, fearful of global war, urged more 

measured responses. As we know, the latter argument won out. The Truman 

Administration proceeded to fight a limited war in Korea and, as part of that 

decision, directed CIA to take any and all measures it could to aid and abet 

the effort in Korea, especially measures that might impair Communist 

China's ability to wage war there." 

"Our covert operations were of two kinds. One was in the immediate 

war theater in and around North Korea, and there CIA people did a lot of 

successful and good things in conjunction first with US Navy people. They 

reconnoitered before the Inchon invasion, a very successful invasion that 

MacArthur did pull off in September 1950. CIA people established escape 

and evasion teams. They ran intelligence teams into North Korea and 

China. They were able to energize some 1,400 anti-Communist Koreans in 

North Korea. And CIA, having taken over China Air Transport (CAT), performed fine duties there because, by the time of the armistice in mid-1953, 

CAT had flown some 15,000 support missions to Korea and overflights of 

enemy territories. One such flight ended in disaster in November 1952 

when two American officers were downed in Manchuria and captured by 

the Chinese." 

"The largest and most ambitious CIA efforts to assist the Korean war, 

however, were embodied in two simultaneous OPC China operations—or, 

more correctly, two and a half operations—which sought to support and run 

some tens of thousands of claimed anti-Communist guerrillas in China who, 

if armed and supported by the United States, could supposedly harass and 

35 
damage PRC lines of communication and hence Beijing's ability to support 

its war effort in Korea." 

"The first of these two OPC endeavors operated with and through the 

Nationalist Chinese Government on Taiwan, despite the fact that official US 

policy toward the KMT had grown cool following the collapse of Chiang 

Kai-shek's regime on the mainland and $2.2 billion worth of US assistance—which probably, I interject, was another reason why it seemed that 

we were shifting attention to Europe, because we had tried with what 

seemed to be our strongest ally out there, these great armies of the 'Gimo, 

and it had been proved a failure. But now with US-UN forces in jeopardy in 

Korea, the Truman Administration, acting through CIA, was receptive to 

Taipei's claim that it had—and this is the exact figure—one million six hundred thousand anti-Communist guerrillas still answerable to it on the mainland. I saw that report and that map when it first hit Headquarters.... Then, 

making use of close contacts and collaboration the US Navy had had during 

World War II with Chinese Nationalist intelligence, in early 1951 CIA, I 

included, set up a business firm on Taiwan called Western Enterprises, 

which was a not-very-covert cover for supporting Taipei's claimed 1.6 million assets on the Mainland.... Western Enterprises grew to several hundred 

officers on Taiwan, where they assisted the Chinese Nationalists in guertilla 

warfare training, logistic support, propaganda, small-boat operations in the 

Taiwan Strait, and overflights of the mainland, which became deep overflights in 1952 when OPC and CAT picked up an unmarked B-17. Nonetheless, the results of OPC and the Chinese Nationalists were so-so, and with 

the coming of the armistice, that operation was subsequently scratched." 

"The second operation that OPC was running simultaneously supported various so-called Chinese Third Force leaders, most of whom had 

become refugees in Hong Kong following the fall of the mainland. They 

maintained that they were answerable to neither Beijing nor Taipei, and 

claimed that they still had tens of thousands of anti-Communist guerrillas in 

South China responsive to their direction. These refugees were a mixed bag 

of officers, feuding among themselves. Some were former South China 

warlords, some were so-so Nationalist officers, and some were former outstanding Nationalist officers, especially one Gen. Tsai Wen-chih who had 

earlier become crosswise with Chiang Kai-shek for having disobeyed the 

Gimo's orders, and had stood and fought successfully on the mainland 

when he'd been ordered to retreat. That operation, the Third Force, until 

1953 involved OPC and CIA setting up a $25 million training base on the 

island of Saipan in the Marianas and there training Third Force Chinese in 

guerrilla warfare skills of various kinds. Later, operating out of Japan, it 

infiltrated numerous paramilitary teams into China. But in the end, like 

Western Enterprises, this operation, too, gained very littie." 

"The third OPC China operation is the one Professor Tucker told you 

about. I call it half an operation. This was the support of Nationalist Gen. Li 

Mi. He and his small army had been pushed out of Yunnan and into northern Burma. He claimed in late 1950 that he still had four thousand troops 

36 
loyal to him there and many more still answerable to his direction in the 

mainland. OPC thereupon supported his effort to reinvade Yunnan and 

harass Chinese Communist lines of communication. The operation proved a 

fiasco. He invaded twice to a distance of 60 miles, was thereupon pushed 

out twice. In the end, long diplomatic wrangling finally brought about the 

subsequent exfiltration of Li Mi and some of his people to Taiwan—though 

many others of his people remained in Burma and upper Thailand, where 

they became farmers—poppy farmers." 

"Now forty years later, what do we say about the varied success of 

these operations? The most successful clearly were those of CIA in the Philippines, where a splendid leader turned back the Huk challenge and subsequentiy became President of the Philippines—probably, at least in my view, 

the best President the Philippines has had—but who was tragically killed in 

an airplane accident in 1957." 

"CIA's operations in and around the war effort in North Korea were 

successful in many modest ways. The two big ambitious efforts, Western 

Enterprises and the Third Force, achieved only minor results despite heroic 

efforts by CIA and the many Chinese who staked their lives on these operations. Most of the teams infiltrated into the PRC were never heard of again. 

At best, these operations can be judged to have put some strain on Chinese 

Communist security forces and doubtless caused Beijing to divert some 

military units from commitments elsewhere. The Li Mi operations were a 

disaster from conception to completion...." 

"How should we assess or what conclusions can we draw from these 

experiences? First, starting from a small operational base of officers and of 

experience—including my own, I was green and brand new—CIA did 

make heroic efforts to assist the US-UN effort in Korea." 

"Secondly: Nonetheless, here as in other CIA paramilitary operations 

later, good intentions, enthusiasm, and frenetic effort were not enough. To 

be successful such operations must have something very positive to work 

with on the ground. This we did obtain in the Philippines, especially in the 

person and character of Ramon Magsaysay. One reflection of the success 

which he and Colonel Landsdale achieved there is the fact that the latter 

subsequentiy became the model hero of a novel. The Ugly American. And, 

as for Western Enterprises and the Third Force, they doubtiess had few significant assets to work with on the mainland on which to base operations." 

"Third, in 1950-53 many problems combined to thwart Western 

Enterprises and the Third Force. Chief among these are the fact that the 

mainland assets which the respective Chinese leaders claimed. Nationalists 

and the Third Force alike, were grossly inflated from the start; and the overwhelming strength of Communist China's Security Forces almost certainly 

wrapped up such antiregime guerrillas as existed." 

37 
"Fourth, throughout its lifetime the Third Force suffered from intense 

factionalism." 

"The fifth conclusion: The efforts of the US Government to support 

and administer the ambitious Third Force and Western Enterprises' operations were of necessity hurried, piecemeal, and somewhat ramshackle." 

"Sixth, operations of their size, complexity, and priority rendered 

effective security almost impossible. Both the Western Enterprises and 

Third Force operations were almost certainly penetrated by the other, and 

each almost certainly was penetrated as well by the Chinese Communists." 

"Seventh, the efforts of Li Mi were stillborn from the start. Even if his 

small forces had been able to harass Chinese Communist forces in southernmost Yunnan, that would have had virtually no significant effect on the ability of Beijing to conduct its war effort in far-off Korea. Moreover, the Li Mi 

operation damaged US relations with Burma and with the UK and helped 

beget a vexing drug problem in upper Burma and Thailand that exists to this 

day. Somewhere in CIA's files I hope there is still on file a blistering critique 

of the Li Mi Operation written in 1951 by an OPC officer I am too modest 

to identify." 

"Eighth, in Washington's early 1950s, secrecy and frenetic deadlines 

led to a situation where OPC to some degree proceeded on its own, not 

being able to check carefully or fully even with other offices of CIA, some 

of which I subsequentiy found out already had extensive files on much of 

this material which OPC was doing from scratch." 

"Ninth, in Washington all three OPC China operations—Western 

Enterprises, the Third Force, and Li Mi—suffered from super enthusiasm 

and super salesmanship of these operations to policymakers, who were 

faced with a horrible situation in Korea and convinced that something had 

to be done to aid the war effort." 

"Finally, in the case of all these three priority China operations, their 

operational assumptions were checked only hurriedly with senior US intelligence and policy officials, who were not themselves part of these efforts 

and who could have looked at the respective assumptions freer of operational enthusiasm and commitment. Hence, one of the most important lessons that these three China efforts could have bequeathed to future CIA 

paramilitary operations was the need from the outset to carefully check the 

assumptions of such proposed operations with outside senior review. Unfortunately, sometimes thereafter this was not adequately done; the most serious result a decade later was the Bay of Pigs." 

38 
"Intelligence and Democracy: 

The CIA and American Foreign Policy' 

Address by R. James Woolsey, DCI 

(The following excerpts from Director R. James Woolsey's address 

focus on his references to President Truman's leadership as the United 

States dealt with international conditions following World War II, CIA's 

role and development during that transition, and critical issues the Agency 

now faces in the post-Cold War period.) 

"I'd like to begin by focusing on President Truman: the man, the President, and the mission. President Truman's life spanned the remarkable 

challenges that faced our country in the first half of this century: the crusade 

for democracy in what historians called the "Great War," the period of illusory isolation, the formation of the Grand Alliance and with it the defeat of 

Fascism, and then, the beginning of the Cold War. Truman represented not 

only the essence of leadership, he symbolized the spirit of America, and the 

coming of age of American power and global responsibility in this century." 

"A nation's mettie is tested in times of great challenge or crisis. When 

President Truman established the CIA in 1947, 'crisis' would be an apt 

description for the condition of an unstable, war-ravaged world." 

"...He presided over what should have been one of our nation's most 

joyous occasions: the defeat of Fascism in 1945. Yet no one would have 

predicted in the summer of 1945 that within a year Stalin would be proclaiming the incompatibility between Communism and capitalism; within 

two years Truman would have to ask the Congress for urgent funds—first 

for Greece and Turkey, then for the reconstruction of Europe; within three 

years the people of Berlin would be cut off from freedom; within four years 

China would be added to the ranks of Communist powers; and within five 

years American forces would be fighting a major war in Asia. No one could 

have believed during that glorious summer of 1945 that certain victory 

would be followed first by uncertain peace, and then by war. Those five 

years were easily as startiing at the time as the last five years have been to 

most Americans." 

"As scholars and historians you have made major contributions to our 

knowledge of the Cold War. But let me just add this one thought: there was 

nothing preordained or automatic about the decisions Truman and others 

made. After four long years, the American public did not want to hear of 

sacrifice, struggle, or war. None of these would have been a winner in the 

polls. None would have made good sound bites. Yet, as Truman, watching 

the events unfolding in Europe, wrote in his diary, 'It can't happen that way 

again.' He was referring to the possibility of America once again rising too 

slowly, responding timidly—unsure of itself and its role in the face of 

another threat, this time the threat posed by Soviet Communism." 

39 
"Two days after the surrender of Nazi Germany, Truman wrote to 

Eleanor Roosevelt, 'patience must be our watchword if we are to have 

world peace.' Within a year that patience had been exhausted by the policies of the Soviet Union. Yet, as is our American habit, even as we implemented the policy of containment, we vigorously debated its very meaning. 

Did Stalin really mean to overtun Europe? Was the threat ideological? Military? Political? Psychological? How appropriate was our response? Didn't 

we exaggerate the threat?" 

"Dean Acheson's definition of our mission, looking back now over 

nearly half a century, has stood the test of time quite well. In the preface to 

Acheson's memoirs. Present at the Creation—memoirs which he dedicated 

to Truman—Acheson described the mission in these terms: 'to create half a 

world, a free half...without blowing the whole to pieces in the process.' " 

"To create this free half, President Truman needed to summon an 

American people still unaccustomed to global responsibility, to tell them to 

bid farewell forever to isolation. His guide for American leadership was 

straightforward: a vision of a world where liberty would be secure, a determination not to repeat the isolationist folly of the past, and plain hard 

work." 

"But Truman also had to ensure the means with which to protect the 

security of the nation for, as Churchill once said, 'Rhetoric was no guarantee to survival.' Truman knew that, regarding national security, while power 

without principle was morally unsustainable, principle without power was 

neither morally nor physically defensible. So he set out to reorganize both 

the way we think and what we do in providing for the defense of our nation 

and our values. The Marshall Plan was a remarkable example of this change 

in thinking: helping others to overcome the fear of want, the fear on which 

tyranny preys." 

"But there were other measures which proved equally, if not more, 

difficult to implement. President Truman had to get the Congress and the 

American people to accept the necessity of maintaining strong armed forces 

in peacetime—something which ran counter not only to American history, 

but in a sense to the spirit of the Constitution. His notes and diaries were 

peppered with frustration over the rapid, and in his view, reckless demobilization, and over his failed attempts to sustain selective service or to have 

Congress enact universal military training. Before World War II, General 

Marshall, then Army Chief of Staff, complained that for years America had 

time but no money; by 1940 it had money but no time. Truman was determined not to let history repeat itself." 

"To help him craft responses to the Soviet Union, to deal with an 

unsettied world, to sort through the many reports, hypotheses, and analyses 

coming from his departments. Cabinet officers, and aides, Truman also 

decided to establish a permanent intelligence structure. As you all know this 

40 
was not an easy decision for him, for he had misgivings about the place for 

such an organization in a democracy. His misgivings reflected a fundamental paradox: sanctioning acts abroad—in a word, espionage—which would 

be antithetical to our laws and principles if conducted at home." 

"...The mission of the CIA throughout the Truman Administration— 

and, indeed, throughout the Cold War—can perhaps best be captured by 

three verbs: to explain, to warn, and to spy. Our work began with analysis to 

help the President and his advisers sort through the signals coming from the 

East—often puzzling, at times belligerent. We began providing the Daily 

Intelligence Summary on February 15, 1946, one week before George Kennan's famous long telegram from Moscow. In July the newly established 

Office of Reports and Estimates drafted ORE 1, 'Soviet Foreign and Military Policy.' It was written at the request of Presidential Counselor Clark 

Clifford, whose subsequent report on the Soviet Union mirrored much of 

the analysis in George Kennan's telegram. Countiess reports, briefs, and 

estimates were to follow." 

"Just as American foreign policy followed no preordained course, the 

same could be said of the evolution of the CIA. Whether in Europe, in the 

Far East, or in regional hot spots in the Third World, as successive Administrations continued to meet the challenge from the expansion of Soviet Communism, and the transformations under way in the international system, 

CIA analysts and officers were called upon to provide critical assessments 

and to spy, to steal secrets from those who wished us harm." 

"Today we are declassifying thousands of pages of analysis—including 500 National Intelligence Estimates on the Soviet Union—indeed 

nearly 300 have already been turned over to the National Archives. We are 

also declassifying thousands of pages on some of the key covert operations 

we conducted during what President Kennedy once called the long, twilight 

struggle—the Cold War." 

"No doubt, Truman, Acheson, Marshall and others would have been 

gratified to see the result of their work. Three years ago, after the failed 

coup in Moscow, Paul Nitze commented that he and George Kennan would 

argue in earlier times over how long containment would be needed in order 

to achieve the desired results. Nitze thought it would take three to four generations; Kennan, three to four years. It took four decades." 

"Today, with the demise of the Cold War, we no longer face a single 

overarching threat. But, our environment is not problem free. Just as we did 

not anticipate the Cold War at the moment of freedom's triumph over Fascism, so too today we have been surprised by some of the challenges which 

have awaited us beyond the Cold War. Who would have thought that one 

year after the Berlin Wall fell that American troops would be disembarking 

by the hundreds of thousands into the Saudi desert, prepared to liberate 

41 
Kuwait? Who would have thought that North Korea would vault to near the 

top of our national security agenda as it did last year?" 

".. .The Cold War has ended, but history has not, and neither has conflict. Samuel Huntington has labeled some of these conflicts as the clash of 

civilizations occurting along the ethnic faultiines throughout the globe. The 

term ethnic cleansing has become part of the language of international politics—hardly a reassuring thought when less than 10 percent of the 170 

nations around the globe are ethnically homogeneous." 

"Some of the conflicts we are witnessing today stem from the implosion of the former USSR, or the dissolution of Yugoslavia. Others stem 

from hostilities which preceded the Cold War and continue to this day, such 

as in the Middle East. Although we can, of course, not solve each of them, 

we had best understand them." 

"Still other conflicts know no national boundary. They can take a relatively benign form—such as disputes over international trade—or they can 

prove deadly to people or to whole nations: proliferation of weapons of 

mass destruction, terrorism, or drug trafficking." 

".. .The task for CIA in this uncertain world is threefold: 

• First, to help nurture the remarkable—indeed, revolutionary—gains 

from the past five years; 

• Second, to counter efforts by states such as North Korea, Iraq, Iran, 

Libya, and others to undermine our hopes for a more peaceful world; 

• Third, to be prepared for the unknown, for crises which can occur at 

any moment and which could threaten our interests and test our 

resolve." 

"Let me share with you today several critical issues on our intelligence agenda, beginning with the revolutionary changes in Russia and the 

former Soviet Union." 

"...Our task is to step back, to separate what is transient from what 

could be more permanent, to help the President and Congress sort out the 

confusing and often conflicting aspects of political and economic changes, 

not only in Russia, but throughout the former Soviet Union. Let me cite several examples." 

"...In addition to monitoring and evaluating economic trends, we also 

continue to monitor the disposition and status of Russia's 27,000 or so 

nuclear warheads as well as the strategic systems deployed to deliver these 

weapons. The combination of declining morale in the military, increased 

42 
organized crime, and efforts by states such as Iran to purchase nuclear material or expertise, all make monitoring a major concern for us throughout this 

decade and beyond." 

"We are also monitoring the state of Russia's general purpose 

forces...." 

"Our analysis is not directed solely at Russia or how it interacts with 

its neighbors, but encompasses how the other states of the former Soviet 

Union are faring. The largest of these—Ukraine—is of particular concern to 

us, because its picture can only be described as bleak. Reform has been nonexistent, inflation is rampant, and nearly half of the population is living 

below the poverty level. Moreover, although the shipment of nuclear weapons from Ukraine to Russia has begun under the terms of the US-RussiaUkraine Trilateral accord, this is a long-term process which could be buffeted by any number of irritants between these two countries, whether they 

entail the flow of energy supplies to Ukraine or tensions over Crimea." 

"The Middle East is another area where we have seen great promise 

and great challenges. Our work includes providing direct analytical support 

to our negotiators involved in the peace process, and monitoring existing 

agreements covering the Sinai and the Golan Heights. If there is a breakthrough leading to a comprehensive settiement on the Golan Heights, we 

stand ready to do all we can to help monitor any agreement." 

"But if intractability has given way to promise in some parts of the 

Middle East, there are two regimes in particular, Iran and Iraq, which continue to threaten our interests.... Iran continues to maintain its implacable 

hostility, and to undermine our security interests and those of our friends 

and allies in the region. In particular, terrorism remains a central foreign 

policy tool for the Iranian Government, and its support for Hizballah and 

other such groups from Algeria to Tajikistan has not abated." 

"We are especially concerned that Iran continues to develop its ambitious multibillion dollar military modernization program and to pursue 

development of weapons of mass destruction. In fact, we believe that Iran is 

beginning to attempt to develop nuclear weapons, and that it will seek help 

from outside sources to move its program beyond its early and rudimentary 

stage." 

".. .As to Iraq, let me be clear: Iraq's leadership continues to engage in 

half measures and duplicity in attempting to circumvent UN Security Council resolutions. This puts a heavy burden on the Intelligence Community." 

"Our work remains critical to the success of UN efforts to find and 

destroy Iraq's weapons of mass destruction and Scud missiles. As a result, 

more of Iraq's arsenal of weapons of mass destruction have been destroyed 

by the UN than by all the hostilities during operation Desert Storm. But 

43 
much needs to be done. Saddam's regime is still trying to retain its expertise 

to develop nuclear weapons and is hiding dozens of Scuds, hundred of 

chemical munitions, and virtually its entire biological weapons warfare program." 

"There are no easy solutions to the threats posed by these two 

regimes. For years we in the Intelligence Community will need to monitor 

their military programs, to uncover their attempts to establish clandestine 

procurement networks aimed at obtaining material and expertise for development of weapons of mass destruction, and to piece together a picture of 

their tertorist activity. We cannot relax our guard against such governments." 

"Let me now turn to North Korea, a country that played a critical role 

during the Cold War and that can substantially affect our hopes for a peaceful world in the post-Cold War era...." 

"Topping the list of challenges presented by North Korea is its effort 

to develop its nuclear capability. North Korean cooperation with the IAEA 

has been anything but thorough—indeed. North Korea continues to insist 

that it is not bound by the Non-Proliferation Treaty. As I have testified 

before the Congress, we estimate that North Korea may have extracted and 

processed enough plutonium from its Yongbyon reactor for at least one 

nuclear weapon. We will continue to support policymakers working to 

resolve through diplomatic means the serious concerns raised by North 

Korean actions. We have also taken additional steps in cooperation with the 

defense community to improve further our ability to ensure strong intelligence support to our military forces." 

"Another challenge is North Korean development of ballistic missiles—including those in the range of 1,000 kilometers and greater—which 

can be made capable of carrying nuclear, chemical, or biological weapons...." 

"We can confirm that the North Koreans are developing two additional missiles with ranges greater than the 1,000-kilometer missile that it 

flew last year. These new missiles have yet to be flown, and we will monitor 

their development, including any attempts to export them in the future to 

countries such as Iran. Unlike the missiles the North Koreans have already 

tested, these two—if they are developed and flight-tested—could put at risk 

all of North East Asia, Southeast Asia, and the Pacific area, and, if exported 

to the Middle East, could threaten Europe as well." 

"Beyond the challenge that North Korea poses to stability in the Far 

East, it, along with other countries such as Iran, Iraq, and Libya, threaten to 

undermine our efforts to halt the proliferation of weapons of mass destruction. The proliferation of these weapons is not a new problem, but it is a 

44 
growing one. Today there are 25 countries—many hostile to our interests— 

that are developing nuclear, biological, and chemical weapons. More than 

two dozen countries alone have research programs under way on chemical 

weapons. Added to the problem is the fact that ballistic missiles are becoming the weapon of choice for nations otherwise unable to strike their enemies at long ranges." 

"Such countries will resort to every means to circumvent international 

agreements or safeguards in order to obtain the necessary material, technology, or expertise. Moreover, some of these countries may place littie stock 

in the classic theory of deterrence which kept the Cold War from becoming 

a hot one between the US and the Soviet Union." 

"The task for us in the Intelligence Community is a daunting one. We 

need to decipher an intricate web of suppliers and end users; we need to distinguish between legitimate and illicit purposes, particularly for dual-use 

technologies; and we must help track the activities of others and work to see 

that the flow of material, technology, and know-how is interdicted." 

"Proliferation is not the only crisis transcending national borders. We 

also devote considerable efforts to countering terrorism and drug trafficking. Terrorism is not solely a Middle Eastern phenomenon: it is still being 

used in Latin American and Western Europe. Nor does it show signs of 

abating: on the contrary, terrorism could rise as a result of growing ethnic, 

cultural, and religious turmoil throughout the globe...." 

"...Attorney General Reno and I are committed to strengthening our 

cooperative efforts so that the world of intelligence and the world of law 

enforcement can work effectively to thwart the plans of tertorists here and 

abroad." 

"We also cooperate with FBI—and with DEA—to counter drug trafficking. For example, we provided intelligence support that was essential to 

the success of Colombia's Pablo Escobar Task Force. We continue to focus 

our attention on obtaining information necessary for disrupting and dismantiing the entire process of drug trafficking—from transportation to finances, 

to the chain of command—whether in Latin America or in the Far East. No 

one agency can tackle this problem alone." 

"Let me mention one final area: our growing work in the field of international economics. Although economic analysis has been part of our intelligence functions for decades, international economics per se took a back 

seat during the Cold War. No longer." 

"Today we provide policymakers with analytical support on world 

economic trends, as well as analytical assessments to trade negotiators, as 

was the case over GATT." 

45 
"We provide our expertise in trade, finance, and energy to help 

Administration officials thwart efforts by countries such as Iraq, Libya, or 

Serbia to circumvent UN sanctions." 

"We assess how governments violate the rules of the game in international trade. This does not mean that we are in the business of industrial 

espionage. But it does mean that we are paying careful attention to those 

countries or businesses who are spying on American firms, to the disadvantage of American business and workers, and those foreign governments or 

firms that try to bribe their way into obtaining contracts that they cannot win 

on the merits." 

"The challenges I have raised by no means exhaust the list of issues 

we follow in the Intelligence Community. The intelligence we provide must 

be timely and must address these, and other critical needs. In addition, our 

intelligence must be credible, and that can often mean providing unwelcome news. Yet, if we tailor the analysis to tell people what they want to 

hear, we lose all credibility and our work becomes of littie use to anyone. 

One reason for creating an independent CIA was to free it of institutional 

biases. And so, I ask CIA employees to—in effect—honor the spirit and 

intent of President Truman by following one set of instructions, and that 

is—regardless of the issue—call 'em like you see 'em." 

"Let me conclude with a few comments about the nature of intelligence work itself. In the ranks of CIA today you will find political and 

regional specialists sifting through the historical record of groups, causes, 

and nations. You will find scientists tracking technological breakthroughs in 

such areas as communications and missile technology. You will find economists and financial analysts, evaluating global financial or trade flows, or 

uncovering money-laundering schemes by organized crime or terrorists. 

You will find military analysts tracking the programs of potential adversaries in order to gain a better understanding of their military capabilities and 

intentions." 

"We rely on these people to integrate large quantities of information, 

to form and test hypotheses, to search for corroborating or contradictory 

evidence—and to do so often under intense time pressure. Above all we 

rely on them for their diligence, their persistence, and their dedication." 

"But, ours is also a world of espionage: We rely on electronic intercepts, satellite imagery, and human reporting to conduct the world's secondoldest profession—spying." 

"...Amid the uproar over the Ames case there have been questions 

about the continued need for espionage, as well as our inability to uncover 

such heinous acts earlier. Let me share with you a few thoughts." 

46 
"With expertise in the world of space, of micro-electronics and of 

computer chips we can, and do, develop a remarkable capability to obtain 

information which can thwart threats to our security. But there are places 

where the most sophisticated engineering feats can fall short, and where 

human reporting may be the only source to tip us off to impending threats. 

Moreover, even when we uncover with technical means news which could 

be disturbing or alarming, policymakers inevitably ask us two questions: 

'are you sure?' and, 'do you have a second source?' Human reporting— 

from case officers in the field and the agents they recruit—sometimes stands 

alone, but often can provide important corroboration for what we have otherwise picked up. In short: satellites can tip off spies; but spies can also tip 

off satellites." 

"...In all these difficult matters, it is not a bad guide to ask ourselves, 

'how would Harry Truman have handled this problem?' " 

"On April 3, 1949, the eve of the signing of the North Atiantic Treaty, 

President Truman invited the foreign and defense ministers of the NATO 

signatory countries to a private meeting in the White House. With Secretaries Acheson and Marshall present, Truman described their collective task in 

the following words, 'Great problems call for great decisions.' " 

"Great decisions await us every day—in advancing peace, in thwarting aggression, in keeping our nation and its citizens safe and secure. The 

CIA will learn from both past mistakes and successes. I will make the necessary changes in our security procedures and programs—and we will move 

on, to support the President and the Congress in helping them understand 

the outside world and to chart the course for America's future. In the midst 

of another great transformation in the international arena, we owe that to 

you, and to the American people." 

47 
Session IV: CIA a t Work , 1947-1953 

Panel A: Espionage and Covert Action 

Richard Helms, former DCI 

John Ranelagh, author, Cambridge, England 

Former DCI Richard Helms said he would talk about the atmosphere 

in Washington at the time being discussed—the period of the SSU, CIG, 

and the earlier days of CIA. The SSU people from OSS who were picked up 

by CIG after the war and then came into CIA at its founding were housed in 

four temporary buildings along the Reflecting Pool near the Lincoln Memorial, "ugly buildings which were hot in the summer and cold in the winter, 

cramped quarters if I've ever seen them." The occupants were "survivors of 

World War II," a very diverse group—some from the military, some from 

the OSS, including "individuals who hardly knew the English language and 

yet were extremely valuable in the postwar period." In World War II if you 

had come to the United States and joined the military services, you could 

rapidly become an American citizen. In addition, during the OSS days great 

effort was made to recruit linguists throughout the country, including Mormon missionaries who, it was discovered, "were a great treasure trove of 

linguistic ability." 

Helms stressed that trying to hold together a representative group of 

intelligence officers to man this organization was a considerable problem. 

Except for the regular Army and Navy officers and enlisted men, "anybody 

who was wearing a uniform after 1945 was trying to get out of it." Moreover, "we had all of the problems of a new intelligence organization to 

resolve. We had inherited these things from the OSS, but what underpinning 

did they have in our government? They had almost none. After all, the OSS 

was a figment of Donovan's imagination which President Roosevelt 

brought into existence through an Executive Order." Part of the SSU was 

passed to the State Department and the rest was put in the War Department, 

although "there wasn't a one of us who ever went near the Pentagon." 

Helms paid tribute to two officers who, "by some extraordinary good fortune, "were the first two bosses of the SSU-CIG group: Gen. John Magruder 

and Col. William W. Quinn, whose names "seem to have receded into history." Both, he affirmed, were keen intelligence officers who, along with the 

US Army, "fought a very good battle to keep us together" and protect the 

fledgling organization from being consumed by other parts of official Washington. "Somehow they managed to keep this boat afloat." 

One of thfe'difficult problems that arose rather early, according to 

Helms, resulted from the decision to take responsibility for intelligence in 

48 
Latin American away from the FBI, which had it during the war, and give it 

to the SSU. "This enraged Mr. J. Edgar Hoover but, since it was a Presidential order, he had to give it up." When the SSU took over that responsibility 

and its people went to FBI offices in the various Latin American capitals, 

they found "there was nothing there, no repository of the things the FBI had 

been able to achieve during World War II, or any of their contacts or knowledge of the area.... We obviously had to find some people who knew something about Latin America and were successful in recruiting some of the 

FBI agents who had worked there." 

From the very beginning, however, "the Agency and the Bureau did 

not have what you would call connubial relations. It was finally worked out 

over the years as to how we were going to proceed, and with its ups and 

downs I think the country was pretty well served. But there was nothing we 

could do in the Agency to make Mr. Hoover happy about the fact that he 

didn't like the Agency in the first place. He didn't like its people in the second, and as far as he was concerned it was quite unnecessary." Helms did 

not want to demean the Bureau, however. The people in it, he said, "do an 

extraordinarily good job, but their culture is very different from that of the 

CIA or any of its predecessors, and it's very hard for the two to communicate sometimes on a problem which is very sensitive to either one or the 

other.... And so when I read in the paper about the difficulties over the Ames 

case, none of it surprised me at all. The alleged love and affection between 

directors of the two organizations has very little to do with the fellows who 

have to do the work every day of the week." 

Counterintelligence operations in CIA, Helms declared, started with 

two individuals. One was William Harvey, "who came to us from the FBI 

because he somehow had gotten into Mr. Hoover's black book," enough so 

he joined the Agency. His job in the Bureau during the war had been to deal 

with Soviet agents in the United States, so he was up-to-date on what the 

FBI had in this field. The other was James Angleton, who was trained by the 

British, ran double agents in Italy, and brought to the Agency a very real 

sense of how counterintelligence should be run. Between these two, "we 

began to develop a counterintelligence approach, and the answer to whether 

it was successful or not is that the Agency was certainly not penetrated at 

any level that made any significant difference until very much later, I think 

after Angleton left. He has been much abused by two books...but I think a 

littie balance in these things might be desirable." (Later in his talk, the 

former DCI said he had forgotten to mention that it was Harvey who, in 

1951, had first suggested that Kim Philby was a Soviet penetration of the 

British SIS.) 

Helms acknowledged that before the Ames matter is finished a lot is 

going to be said and written about counterintelligence, and he warned that 

whatever improvements are made in the way it is conducted will not be 

foolproof. In his opinion, "although the Ames case may be big at the 

moment, it will simply take its place with some of the more serious ones 

that the Allies had since Worid War II." 

49 
Regarding covert action, he said OSO and the new Office of Policy 

Coordination estabhshed at George Kennan's behest had a difficult time 

working together—"two separate organizations, both in CIA, both operating overseas and with a tendency to compete for agents, for networks, for 

liaison relationships, for relations with the State Department. In many 

respects it was a nightmare. The OSO was small; OPC was getting larger by 

the moment. When the Korean war came along it really exploded. The OSO 

people felt the OPC were a bunch of cowboys." It was General Walter 

Bedell Smith who decided to merge the two organizations. "There was lots 

of turf warfare and lots of undercutting, but the merger came off rather well 

after a year or two, and then we had what I think was a much harder hitting 

organization which was tied together, shared experiences and, above all, did 

not compete for the few good agents who were around." 

"The early days of the Agency as far as Capitol Hill was concerned 

can only be described as halcyon. We reported to four committees of the 

Congress—the Armed Services and Appropriations Committees in the Senate and House of Representatives. The Appropriations Chairman in the 

House when we started out was Clarence Cannon, who used to have hearings on the Agency's budget with just two or three other Representatives 

present. He would end the session by pointing out very carefully to the 

Director that he should not go around talking to a lot of Congressmen 

because they leaked all the time, that he would take care of the budget and 

not to worry about it, and that secrecy was all important in this kind of 

activity. The same situation existed in the Senate where there was finally 

one committee composed of the chairman of the Armed Services Committee, the chairman of the Appropriations Committee, and about four other 

Senators. That was it. One staffer." 

"The budget was never hidden from the Congress as has been 

charged; it was laid out in minute detail for these gentlemen to examine. 

But that was back in the days when powerful committee chairmen ran both 

Houses of Congress. They felt that this fledgling organization deserved the 

chance to get going. The Cold War was ominous, and they were behind the 

Agency. So when 1975 came along and many of those secrets were suddenly pulled out in the Church Committee, there were a lot of people in the 

intelligence world who felt they had been betrayed in the sense that they 

had always been assured in Congress that these secrets were going to be 

kept." 

Helms stated that operations against the Soviet Union in those days 

were run almost entirely from the Berlin base. "We had nobody in Moscow. 

We had no overhead reconnaissance. Occasionally, a defector would come 

along providing useful information.... Gradually, one by one, we got agents 

like Popov and Penkowsky who contributed enormous amounts of information. But that was not satisfactory; it was not until we developed various 

kinds of overhead reconnaissance for which the Agency can take full credit, 

such as the U-2 and the SR-71, and photographic satellites." 

50 
"I think it's fair to say in closing that when General Smith and Allen 

Dulles took over at the Agency things really started to happen.... This is 

when the spirit picked up, when things began really to get tightiy organized, 

and the Agency 'took off' for the ensuing period of the Cold War." 

"I want to conclude this talk by observing that, since I was privileged 

to be present at the onset of the Cold War as well as at its conclusion, I 

would like to voice the hope that we can do as good a job of dismantiing 

this particular apparatus as President Truman did of constructing it in the 

first place. Transition periods like the one we're in—transition periods in a 

democracy—have a tendency to be somewhat disorderly since public opinion is diffuse, diverse, and divided. Where do we want to head, and how do 

we get there? Well, one consideration should be kept in mind, and firmly so: 

Great technological breakthroughs spawned by the urgency of war, hot or 

cold, do not have behind them the same driving force in peacetime. Therefore, let us be careful not to destroy what we already have by an excess of 

zeal to return to budgets dedicated solely to social issues. Today I'm thinking particularly of the marvelous photographic satellites devised and 

designed by a scientist of the Central Intelligence Agency. Such inventions 

may not have been part of Mr. Truman's dream for the CIA he founded, but 

they turned out to be the solution to the paramount intelligence enigma of 

the Cold War: Soviet military strength and what it entailed. They still serve 

an essential intelligence purpose today and every day, and they will for a 

long time to come." 

John Ranelagh began by saying, "What I'm going to try to do is put 

some sort of historical perspective on the period '47 to '52, the Truman 

Presidency era of the CIA. 

"David McCollough's biography of Truman mentions the Agency five 

times in 992 pages. He concludes that Truman 'never expected the CIA to 

become what it did.' I should say right away that it is doubtful if Truman or 

anyone else had any clear idea of how the CIA would turn out in the late 

1940s. Great institutions work out their own destinies in relation to the societies that surround and supply them. Espionage and operations, for example, took time to gear up, so it is not surprising that people might have been 

surprised by later activity in those areas. It took time because America had 

not yet worked out how it would conduct the Cold War and did not want to 

imagine itself doing so. I think, therefore, it's worth having a look at the 

nature of the age when the CIA came into being." 

Uncertainty and concern about international relations and national 

security were central factors during Truman's presidency. "1945-1950 was 

a period of particular tension, both about the immediate present and the 

future. On the third of November 1947, John G. Winant, who'd been 

Ambassador to Britain during the war, committed suicide in general despair 

at the future of the world. On that day Lenin's seizure of power in 1917 was 

closer in time than John F. Kennedy's assassination is to us today. Winant 

was followed 16 months later in 1949 by Jim Forrestal, the first Defense 

51 
Secretary, who committed suicide for similar reasons. A band of savage and 

cranky conspirators who had seized Russia looked as if they were taking 

over the world." 

"With the Korean war, the age was simultaneously defined as SovietAmerican polarization and was so institutionalized for the next 40 years 

until the collapse of the Soviet Union. So at the moment of the Agency's 

coming into being in 1947, nobody knew what shape it would have because 

nobody knew the shape the unformed world would actually take. At the 

highest levels in Washington, for example, it was thought that a third world 

war might actually break out, and 1952 was considered to be the most likely 

year for this to happen. There's the famous telegram from Lucious Clay in 

Germany, 5th of March 1948, when he declared that he thought that war 

with the Soviets might come with dramatic suddenness. Eleven days later, it 

is reported, the young CIA said in an estimate that it did not think that war 

would start within the next 60 days. Early Agency reports and estimates are 

peppered with headings such as, 'Assessment of a Country's War Potential' 

and 'Preparedness for War.' The level of tension implicit in General Clay's 

expectations and the Agency's principal analytical concerns simply 

reflected the period. The Korean war finally conditioned and began giving 

clear shape to the age." 

"So we have two stages: the Creation Period from 1945, and then the 

Shaping Period, beginning in 1950 with the Korean war." 

"First, the Creation Period. There was a great sense of rethinking 

American's place in the world after 1945. In 1947 the Agency was formed 

in what amounted to a second industrial revolution, where developments 

were accelerated. In the previous ten years, radar, the jet engine, supersonic 

aircraft and supersonic guided missiles, the atom bomb, intercontinental aircraft and rockets, the backpack radio, plastic, photocopiers, nylon, computers had all come into being. Immediate past history was all defining. The 

Russian Revolution of 1917—more accurately a coup d'etat—had brought 

home the significance of long-range covert penetration, subversion, and 

organization." 

"The mind-set of politicians and of the people who formed the 

Agency was shaped by their experience in World War II, most directly by 

the shock of Pearl Harbor. The 1939 Nazi-Soviet Pact also had a devastating impact on this first national intelligence generation, and they sought not 

to repeat American habits of improvisation and instead carefully to plan 

responses. A high proportion of young Agency people had taken heavy personal risks during the war. They knew hortor. Espionage and operations to 

keep peace seemed an infinitely preferable alternative. Into the early 1950s 

it was not clear that containment would succeed. But to these young men 

and women intelligence was akin to Lawrence of Arabia-type work in the 

developed world: brave, sophisticated and, above all, economical of life. 

'No more Pearl Harbors' was the cry after 1945 and was at the heart of the 

planning and establishment of the CIA as an Agency of armed peace." 

52 
"World War II had seen the United States encounter totalitarianism 

without real mastery of intelligence. It was followed immediately by a new 

world of permanent struggle with no clear limits and unknown but rightiy 

feared consequences attaching to actions large and small. For almost two 

years after the end of the war. Communists shared power in Belgium, 

France, and Italy. Communist Parties in the West received not-so-secret 

Soviet funding. The strikes on the Marseille waterfront and at Italian food 

depots that mushroomed in 1946, guerrilla movements in Greece, Malaya, 

the Philippines, Vietnam, Indo-China, the independence of India, the creation of Pakistan and the medieval-like religious war that followed, China 

falling to the Communists, Whitaker Chambers' testimony implicating 

Alger Hiss in the Red American underground, murderous conflict in the 

dark alleys of Berlin, Jan Masaryk thrown from a window to his death by 

Communist secret police in Czechoslovakia in 1948—all looked, with justice, to be foaming surface-traces of a Great Red Shark racing to attack 

underneath. In Europe by the end of 1947, about 116 million people and 

about 577 thousand square miles were either under Soviet occupation, had 

Soviet-controlled governments, or had been incorporated into the Soviet 

Union since 1939. It was clear that a completely new experience faced the 

war's undamaged country, America, and only America could act to withstand Red imperialism. 'What to do and how to do it' were the operative 

questions." 

"The maps had not been drawn. No one had written the book on ideological war. The great game had moved outward from Central Asia to Central Europe, and America had never played the great game before. It had 

neither the desire nor the people to be involved in the colossal civil war in 

China in the 1940s. Its policy had been to keep out of the entanglements of 

alliance systems. Now it found itself in alliance with allies of dubious background, stability, and purpose. The United States under Truman had inherited every enemy the Soviets had. After all there was no one else but 

America to turn to after 1945. The Soviets had intense and extensive experience of dirty work, and America did not. What is more, America traditionally had rejected dirty work and to the present day finds it very hard to accept 

anything that smacks of it. But Truman found that, willy-nilly, his country 

was involved and that some strategic direction and control was necessary." 

"Truman felt the only way to learn was by doing, so he did. He sought 

resolution and cool action rather than some great theoretical scheme. Early 

Cold War experience together with the obvious contraction of British power 

showed him clearly that the Central Intelligence Agency coupled with coordinated national security policymaking objectives was an essential step to 

take. Thoughtful people, not the least Truman himself, were trying to put 

systems in place that would at the least enable the United States to be better 

prepared to contain shocks and changes in less response time. From 1945-

1947 these preparations themselves affected the shape that was to come. 

New Deal experience at home was applied to the foreign front. It was a 

time, therefore, of great institutional incubation. But institutions are set up 

to handle the preoccupations of the people who set them up, and it is 

53 
instructive therefore to look at what was being done. The Defense Department, National Security Council, the CIA, Atomic Energy Commission, Air 

Force, Joint Chiefs of Staff, policy planning at State were all being planned 

and formed. Centralization and gearing for the struggle with the Soviets 

was the double helix that bound the new organizations together." 

"There were appalling Army-Navy-Air Force fights in the 1940s that 

cost one Secretary of Defense and one Chief of Naval Operations their 

jobs.... The CIA's creators, beginning in many ways with Bill Donovan and 

the OSS veterans, fought for an Agency that would be above interservice 

conflict, that would be the President's and not the brass's, and that could 

concentrate all intelligence information so as explicitly to forestall another 

Pearl Harbor. They set about creating a declared civilian, permanent, worldwide, large-scale, comprehensive intelligence agency that came into being 

in 1947 with an elite talent pool" and a Director of Central Intelligence who 

was functionally at Cabinet level. "Congress's role should not be underestimated either. In 1946 the House rejected a proposal to spend $1 million on 

cancer research but a year later was perfectly willing to spend tens of millions establishing the Agency.... The understandings and relationships that 

then inhibited Congress produced the votes, the law, and the funds. This 

would probably be impossible to achieve today." 

"The part that Truman played was of enormous importance. He was 

far more important at the beginning than at the end. His conviction and 

drive made much of the institutionalizing happen.... There was no surrogate 

for the man in the White House in 1947. He was the only official that could 

make the decision to confront the Soviets to some degree on their own 

ground, and that decision was what the Agency represented. Eisenhower, in 

contrast, might well have rejected the Agency, reasoning that it would be 

better to avoid fights that could easily be lost." 

"Truman was the first President from Congress since Harding, and 

Congress was not beating at him. But in 1946 the 80th Congress had come 

in with a strong Republican majority, and there was a sense that political 

time was running against Truman and the Democrats. Political observers 

assumed that Truman would not win the 1948 election, that there would be 

a Republican President and a return to a 1919-like situation with tariffs and 

a focus on Asia. The Republicans wanted a voice—Republicans had been in 

a minority for 15 years—and so did Congress as a whole. 'The do-nothing, 

good-for-nothing Congress' Truman called it. Congress had been left out of 

foreign policy making and some of the most significant decisions of the US 

Government since before Pearl Harbor: no Senator or Representative had 

really known that they had voted for the Manhattan Project.... The 1947 

National Security Act creating the Agency, the National Security Council, 

and the Defense Department was a gesture to Congress, which was being 

told who was in charge and was being involved in defining who should be 

in charge. At the same time Congress was encouraged to reorganize the 

Presidential succession with the 1947 Succession Act. The Speaker of the 

54 
House was now placed after the Vice President in order of succession. From 

1886 to 1947 the Secretary of State and the whole Cabinet had stood 

between the Speaker and the Presidency. Congressional vanity was being 

placated." 

"Military intelligence, of course, has always been part of the framework: it's automatic. The struggle at this time was to gain political and military acceptance of an addition to military intelligence giving the 'no more 

Pearl Harbors cry' added potency. Pearl Harbor had been a failure of military intelligence. But after 1945 it was a cold, not a hot, war that was being 

fought, the kind of conflict that military intelligence is simply not set up to 

do. It needed political types to [fight] it. From the start, despite appointments from the military, DCIs with the exception of Hillenkoetter were 

political. Putting to work in peacetime the special OSS skills was the addition to the military intelligence framework that they achieved: the skills of 

political analysis and micro-operational experience. In securing this 

achievement, combating military influence on the Hill was the first success 

of the OSS veterans. Maintaining momentum so that the CIA was established and maintained was their second. Their compromise was actively to 

seek not to attract the attention of or interference from the military. Thus, 

too, the military ranks that adorned each DCI under Truman. But the idea of 

the Director of Central Intelligence as the overall coordinator of intelligence 

was a dead letter before it began. The generals and admirals won that one. 

All the civilians on the sidelines could not bring about a central unity." 

"In placating the military, the Agency's founding generation was 

again successful. Espionage and operations were always the areas that the 

military and politicians would be most sensitive about. So OSO in the 

Agency was quiet and sophisticated; OPC in contrast, formed under State 

auspices, collected many of the gung ho types that drew attention and campaigned for operations. They were to come into their own after 1950. They 

reflected both Truman's temperament—treading on people's toes if they 

were trying to tread on his—and the American desire to do something." 

"So now I turn to the second phase of the Truman years, namely, the 

Shaping Period ushered in by the Korean war in 1950." 

"At its start the Agency was more of a covert action organization than 

an espionage one. This is a difficult point to press since the two went very 

much together at the time. Technical intelligence was important and significant. [The Agency had] inherited the wartime achievements of Magic and 

Ultra, but it was not employing a large number of people, and its output was 

not voluminous. While Truman was impressed by communications intelligence—one of his last acts as President was to create the National Security 

Agency—intelligence in the Truman years was still a warm body activity. 

The great technical breakthrough was Carl Nelson's achievement in the 

Office of Communications in 1950 when he broke the Soviet cipher and 

coding process. But it was not really until the development of the U-2, just 

55 
outside our span, that what had been an espionage famine became a feast. 

This was because technical intelligence was not so advanced in the early 

years, and this meant that the Soviets, the Red Chinese, the North Koreans, 

and so on were less known. Consequentiy, there were more Pearl Harbors, 

notably the North Korean attack on the South in 1950 which was predicted 

by no one. It was too close a parallel; an enemy had massed its forces and 

launched a surprise attack without the United States being prepared. It dictated change." 

"The change was Bedell Smith. His appointment as DCI in October 

1950 marked a fundamental shift in the importance of the Agency and of its 

bureaucratic clout. In turn this represented a clarification of Truman's mind. 

General Smith was the first absolutely first-class staff officer to be DCI. He 

enjoyed the confidence of the civilian and military leadership at the highest 

levels. Cold War, espionage, subversion, continuing conflict in Korea 

needed political types, and this had also called for Smith as a new kind of 

intelligence chief. He had political-military experience, second only to 

Eisenhower's, of running a great alliance war. With Smith the Agency had 

the Director who put it unmistakably at the top table and gave it the force to 

fend off State and the Pentagon." 

"The clarification of Truman's mind which prompted Smith's appointment was in step with the reality that Korea represented. As the early 1950s 

unfolded, it was clear that the chance of direct, as opposed to indirect, conflict was less and less and that the secret world would register most of the 

indirect conflict. Thus, Truman considered that it was suitable and safe to 

promote intelligence and support secret conflict (secret in that it was kept 

from Americans; it sure as hell wasn't kept from the Soviet leadership). 

And this is where the move began towards operations. The Korean war 

argued that the Soviet Union was not going to launch a direct attack and that 

direct conflicts could be limited and contained, if only at the cost of Douglas MacArthur's career...." 

"As I have already indicated, covert actions carried more weight at 

home than espionage at this point. Espionage had not penetrated Moscow, 

had not forewarned about North Korea's and subsequentiy China's plans. 

And the Korean war early on showed that Cold War might be a hot contest 

between two secret networks." 

"I mentioned earlier the elite pool that the Agency drew from at its 

start. It should not be overstressed, but it should be noted. The elite and 

wealthy families that sprinkled Donovan's OSS lent their gloss to the CIA, 

taking the curse off secrecy. Traditionally, intelligence services tend to be in 

the hands of oddballs—the necessary paranoia of the profession pushes 

toward this—but by placing intelligence in the hands of people with a solid 

stake in the republic, the creators of the Agency averted such oddballism." 

"The strong magnet for the elites, especially intellectual ones, was 

that the Agency in America was engaged in a struggle for the world. There 

56 
was an enormous and exaggerated sense of the power of social and behavioral science when new experts and new subjects mushroom daily. The CIA 

represented a vision of the management of information which was a contemporary social science dream; it developed social science intelligence, 

itself a followthrough from the OSS. Incorporating analysis was the most 

unusual aspect of the Agency in the early period and is a unique American 

contribution to intelligence organizations generally. The Agency could and 

did reject military analysis from the Pentagon that it deemed inadequate, 

which was a real test of its power and authority. The unsung Hillenkoetter 

deserves particular tribute on this score. It did not stop the military getting 

their views across, but the Agency and the DCI could prevent the central 

stamp being put on them." 

"All this, in turn, acted to advance intellectuals. The idea of a world 

struggle was an intellectual way of looking at events. That there was a real 

struggle of ideas and ideology enhanced this, and the Agency in its early 

analytical emphasis locked in people with an intellectual perspective. Journalists with claims to reflective interests, like the Alsop brothers, saw the 

struggle with the Soviets in ideological terms and were Agency channels to 

a wider world. Tom Braden, that unlikely ambassador of the International 

Organizations Division in the Directorate of Plans at the time, said, 'We had 

a vast project targeted on the intellectuals—the battie for Picasso's mind, if 

you will. The Communists set up fronts which effectively enticed a great 

many—particularly the French—intellectuals to join. We tried to set up a 

counterfront.' Agency support for Radio Free Europe and Radio Liberty, for 

the National Student Association and the International Student Conference, 

for the Congress of Cultural Freedom, for Encounter, Monat and Preuves 

was the result. The whole operation was an entirely natural rifle action of 

elite sensibilities." 

"So, to sum up," Ranelagh stated, "when the Agency came into existence, its job was the struggle for the world. It was seen by contemporaries 

as a clearing house. Today it is worth noting that, in the decades that followed, the Soviets always attacked the Agency for its subversion, not its 

espionage. To outsiders, covert operations were to become the Agency's 

defining activity." 

"Second, Truman was not a philosopher; he was a problem solver. He 

was clear about what he did and, despite his subsequent hesitancy to 

acknowledge some of the logic of some of his actions, operations were in 

tune with his temperament. He was motivated by immediate practical concerns and did not scan the far horizons. He signed off on the Agency 

because he and the country needed it." 

"Third, the Agency was a creature of its Age. Immediate past history 

of subversion, surprise attack, and war was crucial to its nature. The experience and mind-set of the veterans of the OSS who campaigned for a centralized peacetime civilian agency had a direct bearing. The great tribute to the 

57 
Agency's leadership of the decades is the way that it has adapted to 

change—most importantly during the 1970s—moderating itself, finding a 

place for secrecy in a democracy." 

"Fourth, the Korean war forced a clarification in Truman's mind that 

resulted in Bedell Smith's appointment and the Agency having real clout in 

Washington. It also resulted in an acceptance that the Cold War would in 

part be a secret struggle between secret organizations, and this in turn 

spawned operations." 

"Today, as Dick Helms has reminded us, we are at what could be 

another dividing gap—not the end of history but another phase, just like the 

late 1940s. We do not today have a new world of order; we have another 

interim period during which we have to make up our minds about what kind 

of world we are seeking and what kind of world we are really likely to face. 

There are, of course, differences between then and now. America, for example, is relatively less powerful than it was 45 years ago. But the most important contrast is one of attitudes. In his farewell speech to the Agency in 

1952, Truman said, 'We are at the top and the leader of the free world— 

something that we did not anticipate, something that we did not want, but 

something that has been forced upon us.' Today, America is fundamentally 

bored with being a world power although, just as before, it is still the most 

authentically great one." 

During the subsequent question period. Helms was asked whether he 

believes there is information about operations or activities during CIA's 

early years that still would be inappropriate to declassify. The former DCI 

replied, "There was a question whether certain documents should be declassified for this conference on operations in France and Italy during the period 

of President Truman's Administration. But there's a very important election 

coming up in Italy shortiy, and it was felt that it would be very undesirable 

to lay out what the Agency had done in Italian elections at the end of the 

'40s and early '50s. Certainly these things are known to historians; there's 

no particular secret about them. But all you have to do is declassify these 

papers at this particular time and it'll be headlines all over Italy. There will 

be the assumption that we're messing around in Italian politics again, and 

this is the kind of headache that I think the State Department and the White 

House don't have to have. So I think this question of declassification not 

only has to be ad hoc, if you want to put it that way, but also there are still 

certain things that...aren't necessarily items that we need in headlines in the 

modern context." 

58 
Session IV: CIA at Work , 1947-1953 

Panel B: Estimates and Analysis 

John Prados, author 

Richard Betts, Colombia University 

John Prados acknowledged that CIA had provided this panel a "foothigh stack" of estimates that were produced during the Truman Administration but that it wasn't a complete set of those published during that period. 

Thus, he cautioned, some of the conclusions drawn from his survey of the 

estimates might very well change following declassification of additional 

material. Moreover, the number of deletions in the released estimates was 

up from what it had been in previous releases, including almost all footnotes, which often are especially helpful to historians. 

As for the estimative process, he stressed that the reports and estimates produced do not constitute all intelligence. "This is not current intelligence; it's not supposed to be telling you what's happening today. The 

subject of the estimate is predictive." The objective is "to give the policymaker, the decisionmaker, an idea of what to decide and how to decide it." 

Another caveat Prados mentioned was that the records he had seen "do not 

tell us what Harty Truman actually did with the estimates he received. So 

again there's a disconnect between what we know about the estimates themselves and what we know about their impact." 

The organization that did these estimates, the Office of Research and 

Estimates (ORE), existed first within the Central Intelligence Group and 

then within the Central Intelligence Agency. It was among the first units 

formed. One of the main struggles in the period from 1945 through 1952, 

Prados observed, involved getting the organizations in the Intelligence 

Community "to agree to comment on the estimates, establishing that the 

entities doing the estimating could have access to (relevant) materials from 

all the other entities, and winning credibility for the (final products)." In this 

early period, the coordination on the estimates was done informally by OER 

personnel; in contrast to recent practice with National Intelligence Estimates, the Director of Central Intelligence and even the Assistant Director 

for Research and Reports at the time typically did not see the text of an estimate until it was already in print. 

Prados proceeded to assess, by region, major conclusions in estimates 

done during those early years. 

59 
The record on China was "pretty good." "CIA was predicting from an 

early date that the Nationalist regime of Chiang Kai-shek had littie chance" 

of surviving on the mainland. "The first estimate of that set predicted the 

fall of the Chinese Government at any time," and subsequent estimates 

anticipated the imminent end of Nationalist Chinese resistance. "The CIA 

also observed, forthrightiy in my opinion, that the Communist revolution 

then in progress was 'part of a long-term revolution, the course of which 

will be essentially determined by local or national factors and only to a limited degree subject to external pressures by either the Soviet Union or the 

United States.' That's in ORE 45-48." The intelligence estimates missed, 

however, on "the ability of the Nationalist Chinese to hold out on Taiwan." 

On the Middle East, five different estimates published before and during the first Arab-Israeli war were reviewed. "Many of them read like think 

pieces that might have been produced by the State Department. For example, there (was) argumentation in the CIA estimates about why the United 

Nations should 'reconsider' the UN partition plan that created Israel. The 

CIA did predict, seven months ahead of the event that (partition) would lead 

to a war between Arabs and Israelis. It did predict in the middle of that war 

that the truce—there were several truces—would benefit the Israelis rather 

than the Arabs." The estimates also had good material on the mechanisms 

the Israelis were using to import weapons and equipment during the truces. 

Prados asserted that some of the worst estimating was done on 

Greece. "The assumption of monolithic Communist control from Moscow 

led the CIA into some of its worst analytical errors." At a time when, in 

fact, the Greek Government was winning against the rebels, CIA predicted 

it had no chance unless there was major US intervention with all available 

forces. A later estimate failed to detect that Moscow, according to historical 

sources, had ended its support of the Greek guerrillas about ten months earlier; CIA was still asserting that there was no letup of Communist support. 

This failure, he noted, was replicated in estimates of Soviet intentions in the 

context of the Greek situation. 

On the other hand, he judged that the Agency "did a very good job on 

Berlin. Estimates took a nonalarmist view of the situation from the very 

beginning, concluding that the Soviets were not likely to attack there. This 

analytic viewpoint was maintained through a series of estimates despite 

countervailing pressures from other parts of the US Government. The main 

threat from the blockade was declared to be to the Agency's ability to conduct intelligence operations out of Berlin. It was predicted several times 

from 1948 to 1952 that the Soviets might very well organize an East German Government. 

Prados described the contrast in assessments of Soviet intentions that 

were made in estimates before and after the Korean war started. In the summer of 1950, just before the war, CIA was very forthright when an ORE 

60 
report predicted the Soviets' possession of an atomic weapon would not 

have a great impact on their foreign policy and would not lead them to 

attack when they might not otherwise do so. Because that ORE report was 

so controversial, every other participating US agency dissented. Then, in 

November 1950, the apparatus for making national intelligence estimates 

was established by DCI Walter Bedell Smith, and a Board of National Estimates was created. An initial series of estimates was done on a crash basis. 

NIE 3 "concluded that the Soviets might well attack during their period of 

relative strength as a result of having the atomic weapon and the invasion of 

South Korea, that these advantages would disappear by 1954 because of the 

NATO buildup, and that the peak period of that advantage would exist during 1952. If you look at United States defense budget planning for this 

period you will see that in fiscal '52 and onward the assumption is built into 

the defense budget planning that 1952 needs to be the year during which the 

United States has peak military power. That's directly related, I think, to 

this conclusion in NIE 3." 

Prados stated that another in this initial series of important crash estimates was NIE 11, which "contained the somber conclusion that Soviet 

aggression against the West was likely regardless of the outcome of the 

Korean war. In fact, it concluded the 'USSR is prepared to accept and may 

be seeking to precipitate a general war between the United States and China 

despite the inherent risk of global war. The possibility cannot be disregarded that the USSR may already have decided to precipitate global war in 

circumstances most advantageous to itself through the development of general war in Asia. We are unable on the basis of present intelligence to determine the probability of such a decision having in fact been made.' This 

prediction was extended a few weeks later in NIE 15, which...saw the Soviets operating from a position of great strength and said that, in fact, the 

Kremlin might have already made the decision to proceed to a global war." 

"Later National Intelligence Estimates stepped back from that degree 

of concern. When they got to NIE 25 in the fall of 1951, they were able to 

conclude that the Soviets would not initiate a global war even if they 

thought it was to their advantage because they could do things that were 

short of global war that were advantageous to them, and a global war was 

not. Ludwell Montague, who at that time was a member of the Board of 

National Estimates after having headed the unit that did estimates during 

the '40s, says that this NIE 25 was a watershed in CIA estimating because it 

was able to step back from these somber kinds of predictions." 

On the Soviet nuclear weapons issue, "the CIA was good at the very 

beginning and got worse as it got closer to the event. That is, in 1945 and 

'46...the CIG was predicting that the Soviets might have a nuclear weapon 

in production in five years, and that they might have a heavy bomber of the 

type of the B-29 by 1948. Both of those events in fact came to pass; the 

Soviet weapon was in production in 1950, and in 1948 the Soviets did 

exhibit their version of the B-29 in the Moscow air parade.... [CIA was] 

61 
still predicting five years until production after the Soviets had tested [a 

nuclear weapon]." Prados offered a partial explanation: "Throughout this 

period the intelligence authorities were having difficulty getting the military 

intelligence agencies to share their information with CIA. And getting FBI 

reports and State Department cable traffic in some cases was even a problem in terms of access. So it is possible that the estimators trying to predict 

the Soviet A-bomb were not getting access to the kinds of material they 

needed to change that initial impression...." 

"In general, I think that CIA predictions through this period were 

pretty good," Prados concluded. "They responded to a set of situations that 

were [highly important] to the United States.... They were aware of the 

emerging trends and postulated the factors, if not always drawing the right 

conclusions. In baseball if you have a .500 batting average you're doing 

pretty well, and I think that the Central Intelligence Agency Estimates in 

this period were probably better than .500.1 don't think you can ask much 

more than that." Prados added that throughout this period everyone 

involved was dissatisfied with the system for estimating, and a bureaucratic 

struggle to establish the estimative process at the CIA was in progress. 

Richard Betts said he wanted to discuss briefly the organizational 

evolution or bureaucratic political background of analysis and estimates in 

the Truman period, and then would focus on the record of estimates on 

Korea, "the main alleged intelligence failure of the period and also an 

example of the generic problems and issues that have persisted in the business of estimating." He acknowledged he has a reputation for "pessimism 

about how much can be expected from intelligence analysis," and for arguing that a "high incidence of surprise cannot be avoided...the imperfectibility of intelligence and the inevitability of surprise." But after looking at the 

declassified estimates on Korea, he didn't think those arguments required 

significant revision. 

"The Truman Administration was the formative period for establishing this whole new bureaucratic infrastructure for analysis and estimates—a 

period of ferment, growth, and change in the process in a very short time.... 

There was a rapid increase in the size and function of the CIG, and this led 

to an independent role in intelligence production that outstripped coordination as the primary mission.... The President's Daily Summary became 

ORE'S main priority. Current intelligence came to dominate the effort as 

opposed to long-range estimates." Such a tendency, Betts pointed out, 

prompted complaints in later generations in the Intelligence Community, 

but "it's probably inevitable that current intelligence will be what is most 

relevant at the top of the government." 

As for Korea, "The record in estimates is better than a lot of the folklore or comments earlier in the conference have suggested. And the inadequacies in them—the failure to predict—reflect generic problems in 

estimating, most of which have never been solved satisfactorily in more 

62 
than 40 years since North Korea attacked, despite lots of efforts.... My bottom lines on this case would be that estimates before June 1950 did predict 

North Korean attack under circumstances roughly similar to those that ultimately obtained, but without specifics about timing and with equivocation 

and mealymouthed language about probability. But this was the only reasonable approach that one could take until close to the event, and did not 

provide the proper alert.... [However, that] is essentially a problem of current intelligence or tactical intelligence rather than long-range estimating of 

the sort one expects in NIEs. It brings us back to Sherman Kent's point, 

'Estimating is something you do when you don't know.' " 

Exemplary passages from the estimates were cited to support these 

conclusions. In 1949, just before the US troop withdrawal, ORE 349 argued 

that, "Withdrawal of US forces from Korea...would probably in time be 

followed by an invasion [and] would probably result in a collapse of the 

US-supported Republic of Korea. Continued presence in Korea of a moderate US force would not only discourage the threatened invasion but would 

assist in sustaining the will and ability of the Koreans themselves to resist." 

Betts found this of particular interest on several counts. "First, it did 

more or less predict the eventual outcome, although perhaps not in a form 

that ultimately would be useful for dealing with the problem as we faced it. 

Secondly, in a sense it was perhaps too pessimistic about the future and the 

chances for political survival of the regime in the south. And third, the flavor of the estimate comes very close to policy advocacy. It evokes all of the 

problems I have always thought make the question of politicization 

extremely difficult to deal with...it's very difficult to do a trenchant analysis 

and an objective assessment of reality on a controversial and important matter that does not verge on clear implications for policy (and appear)—at 

least for anyone who disagrees with the analysis—as advocacy that contaminates proper objectivity." 

Betts also was intrigued by the Army's dissent from ORE 349. He 

thought it probably reflected the Army's interest in shedding the burden of 

the occupation of South Korea at a time when forces were being cut drastically and other priorities seemed much more pressing. The dissent struck 

him as "an unusual inversion of the more common tendency for military 

estimates to be more pessimistic or alarmist than CIA analyses." It argued 

that the Army "does not believe that US troop withdrawal would be the 

major factor in the collapse of the Republic of Korea.... Political factors 

other than the presence or absence of the United States troops will have a 

decisive influence on the future course of events in Korea." 

The most famous estimate, ORE 1850, was issued on 19 June 1950, 

less than a week before the actual attack. It said, among other things, 

"Trained and equipped units of the Communist People's Army are being 

deployed southward in the area of the 38th Parallel. Units there equal or 

63 
surpass the strength of southern Korean Army units similarly deployed. 

Tanks and heavy artillery have also been moved close to the Parallel in 

recent months. At the present time the northern Korean forces are probably 

psychologically prepared to fight wholeheartedly against southern Korean 

troops." 

Noting that President Truman had written in his memoirs that there 

were ample warnings about the possibility of a Communist attack in Korea, 

Betts observed that the problem was that they came amid similar warnings 

about possible aggression in numerous other places around the world. Thus, 

the Korea warnings perhaps were affected by the classic "noise" problem. 

"There was not such a good record about the problem of Chinese 

intervention in the fall and winter of 1950." Betts quoted from an estimate 

of 12 October 1950: "Despite statements by Chou En-lai, troop movements 

to Manchuria and propaganda charges of atrocities and border violations, 

there are no convincing indications of an actual Chinese intention to resort 

to full-scale intervention in Korea. Barring a Soviet decision for global war, 

such an action is not probable in 1950." 

According to Betts, "There are some other deficiencies that appear, 

with the benefit of hindsight, in some of the prewar estimates about Korea. 

One was a fairly consistent flavor of simplistic, categorical emphasis on 

Moscow as the decisionmaker for North Korea coupled with negligible 

attention to Kim Il-song as a factor in his own right." There also were 

"numerous contradictions in several estimates about the issue of Communist support in South Korea, which suggested that some of the judgments 

may have been made rather offhandedly or on the basis of limited information or reflection." 

"I'm not sure," he said, "how much in the way of very trenchant conclusions can be drawn from what we can see of the record of estimates in 

the Truman period. The organizational shift to independent production may 

have been the only way, in terms of bureaucratic political realities, for CIA 

to carve out a dominant role in the process. Given the tenacity and possessiveness of the departments, that's a general organizational phenomenon. 

The estimates themselves were problematic in many ways—often delphic, 

hopelessly hedged, or sometimes superficial and obvious in their conclusions. But they are probably not far from as good as we could realistically 

expect them to be, given the inherent uncertainty involved in most of these 

issues, which really precluded judgments that would not fudge and hedge." 

"Finally, it's not clear to me how much later evolution of the organization and process brought progress in the quality of estimative products. I 

don't know how one would seriously try to measure this; I can't prove the 

point. All I have is the impression that, stacked next to a random sample of 

NIEs I remember reading from other periods, including the '70s and '80s, 

the early ones from the Truman Administration don't appear to me to be 

primitive and markedly inferior." 

64 
Luncheon Speakers, Friday, 18 March 1994 

Lawrence Houston, John Warner, Walter Pforzheimer 

After the luncheon, David Gries introduced three former senior CIA 

officials who were in the legislative process leading to the National Security 

Act of 1947 that established CIA. They had been invited to relate their 

experiences in connection with that process. Lawrence Houston was the 

Agency's General Counsel from 1947 to 1973. John Warner was the first 

Deputy General Counsel. Walter Pforzheimer was the first Legislative 

Counsel. 

Lawrence Houston said he returned to Washington in the fall of 1945 

after serving eight months in OSS as Deputy Chief of the Middle East Theater in Cairo. Shortiy thereafter, OSS was abolished and its research and 

analysis group was put in the Department of State. The operational part 

went to the Strategic Services Unit under Secretary Royal of the Army, with 

the function ostensibly of liquidating all the OSS operations around the 

world. 

"In January of 1946 we were busy with our liquidation problems 

when we got word of the creation of the Central Intelligence Group." In taking on the numerous and complicated problems associated with establishing 

CIG, it was learned that legislation had been passed in 1945 stating that no 

organization established by the President without Congressional participation could exist for more than one year. Consequentiy, Houston said, he and 

John decided that legislation for a permanent organization should be 

drafted." 

"When Hoyt Vandenburg became CIG director in the spring of 1946, 

he directed that the draft legislation should be cleared with the White 

House. The new White House Counsel with whom Houston and Warner 

met was Clark Clifford, who was "extremely helpful." They also got cooperation from the Bureau of the Budget, the Comptroller General, and other 

parts of government. This led eventually to putting enabling legislation 

regarding CIA in the National Security Act then under discussion. And so 

CIA became an established entity in September of 1947, and we began 

working under a new Director, Admiral Hillenkoetter." 

Later that fall, after one of the first National Security Council meetings, Secretary of the Navy Forrestal approached Hillenkoetter and 

expressed his concern about Moscow's increasing international activity in 

labor, education, and political affairs, asserting, "We've got to do something 

to stop the Russians and their rapid spread around the world. Secretary Marshall in the State Department doesn't want State to do it, and I think he's 

right. The military can't do it. Could you take it on?' 

65 
Hillenkoetter thereupon queried Houston whether CIA had the authority to undertake the action necessary, and he advised the Director that there 

was no legislative authority for that because "the aim of our legislation had 

been entirely in the field of intelligence." When pressed further, Houston 

wrote a memorandum saying, "If the President, as Commander-in-Chief 

and with responsibility for the conduct of foreign affairs, gives us the proper 

directive, and if Congress gives us the funds to carry them out, we can do 

the work." "That was how we got into what is now called covert action," 

Houston concluded. 

John Warner said he was assigned to OSS in December of 1944, "so I 

was there through the whole period of SSU and CIG." He wanted first to 

talk about the provision of the National Security Act of 1947, Section 102, 

D3, which states that "The Director of Central Intelligence shall be responsible for protecting intelligence sources and methods from unauthorized 

disclosure." Many DCI's, he said, later lamented this burden and responsibility because there is no concomitant authority to help fulfill that responsibility. According to Warner, the language in that section came from the 

Truman directive of 22 January 1946. "In the discussions of the early drafts 

to set up the CIG, Army intelligence was concerned about this new entity 

coming into the picture, and they wanted assurances that their intelligence 

sources and methods were protected." 

"So what was originally formulated to protect other agencies' sources 

and methods eventually became a tool and a provision relied on by the 

courts in implementing the DCI's responsibility to protect intelligence 

sources and methods. It was raised in hundreds of lawsuits over the years 

since then, and the courts said we must protect intelligence sources and 

methods because the Director is responsible for doing it." 

Warner then turned to the subject of confidential or unvouchered 

funds. He quoted Section 10(b) of the CIA Act of 1949, which states, 

"Sums may be expended without regard to the provisions of law and regulations relating to the expenditure of government funds, and for objects of a 

confidential, extraordinary, or emergency nature, such expenditures to be 

accounted for solely on the certificate of the Director, and such certificate 

shall be deemed a sufficient voucher." "In other words," Warner told the 

group, "this is a blank check to the Director of Central Intelligence to spend 

it any way he sees fit." 

Warner added that the language was taken verbatim from the OSS 

Appropriation Act. "Where else could I find such a source?" However, confidential funds began with "our original master of intelligence, George 

Washington. When the Constitution became effective in 1789, secret funding for foreign intelligence was formalized in the form of a contingent fund 

for use by the President. In a speech to both Houses of Congress, the forerunner to the annual State of the Union message. President Washington 

requested a contingency fund designated for defraying the expenses incident to the conduct of foreign affairs. In the Act of July 1790, Congress 

66 
appropriated the money, and that has been repeated all the way up to OSS 

and now the CIA. This confidential fund, unvouchered funds, is the basic 

tool which enables CIA to conduct espionage, clandestine activities, the U2, the SR-71 and all the various covert operations. Without this you are 

unable to spend money secretiy in a way that is not publicized and subject 

to audit and leaks." 

With the termination of OSS, CIG had no statutory authority for 

unvouchered funds, and Warner described how the problem initially was 

resolved. He credited Houston, who with a lot of help from the Bureau of 

the Budget and the Comptroller General, established a working fund "without clear legal authority." It was agreed this was for a valuable purpose, but 

the law Houston mentioned in his talk stipulated that CIG funding would 

cease after a year because the initial funding had come by Presidential 

order, not Congressional authorization. Warner explained that the group 

acted in the expectation that, with drafting of the National Security Act proceeding in both SSU and CIG, "soon we would have appropriate legislation 

to back this up." 

He pointed out that the portion of the National Security Act relating to 

CIA contains a statement of its functions but does not include all of the provisions that later were incorporated in the CIA Act of 1949, including the 

section on unvouchered funds. Because CIA was a lesser part of the 

momentous bill setting up a Secretary of Defense and the new Air Force, it 

was decided as discussions with Congress progressed that details about 

CIA, including its unvouchered funds, would overburden the bill. Hence, 

the enabling provisions were dropped, and the National Security Act simply 

established CIA and stated its general function. Two years later, the CIA 

Act of 1949 provided the authority to have unvouchered funds. 

Warner added that, while a number of other agencies—the Army, the 

State Department, the old Atomic Energy Commission, the Department of 

Energy—have or had confidential funds, "CIA is the only Agency that 

spends a major part of its appropriation under this authority. Sometimes, in 

prior years, it went to over 50 percent of money that was spent. Otherwise, 

the funds available to CIA are subject to audit." 

As a final note, Warner referred to Section 102(d)(4) of the National 

Security Act, which states that the CIA "shall perform, for the benefit of the 

existing intelligence agencies, such additional services of common concern 

as the NSC determines can be more efficientiy accomplished centrally." 

"That means espionage," he said. "The Congress was unwilling to put into a 

United States law that CIA was to be authorized to break the laws of every 

other country in the world. So that's why it was masked this way. The next 

day there was a National Security Council Directive saying 'CIA, you'll 

conduct espionage.' " 

67 
Walter Pforzheimer related some of his experiences as CIA's legislative Counsel while the National Security Act of 1947 and the CIA Act of 

1949 were being considered. He described in some detail why the key drafters of the 1947 Act from the Pentagon and the White House tried to omit 

references to the roles and missions of CIA, especially in any specificity, 

because they feared that would precipitate discussions of the roles and missions of the various armed services, then in considerable controversy. He 

also discussed the attempts by "old-line" G-2 officers to forbid any clandestine collection activity by CIA. Pforzheimer then explained his own crucial 

role in preventing Senator Brian McMahon of Connecticut from eliminating 

the Agency's authority for confidential funds from the proposed CIA Act of 

1949. 

68 
Session V: Research, Records, and Declassification Today 

Benedict Zobrist, Truman Library 

David Gries, CIA 

Anna Nelson, American University 

"The Truman Library at Independence, Missouri, has had a modest 

but important role in historians' attempts to understand the Central Intelligence Agency and evaluate its work during the Agency's early years," 

Library Director Benedict Zobrist said. "Our holdings are not large 

but...have represented for some years a significant portion of the primary 

documents about the CIA for the Truman period that are available for 

research." 

Most of the library's CIA-related documents are in President Truman's papers. His office file, called the President's Secretary's File, was 

only conveyed to government custody after his death, when his will was 

implemented in 1972. "These papers contain presumably all, or almost all, 

of the CIA briefing information that came to the President," except for the 

daily intelligence summaries which were not retained in his White House 

files. The intelligence documents in the President's Secretary's File total 

about 15,000 pages, and about 40 percent of them are situation reports and 

other materials relating to the Korean war. The remainder includes reports 

prepared by different offices in the CIA.... About 350 pages from this series 

remain completely or partially classified." 

"Other portions of the Truman Papers also contain CIA materials," 

Zobrist stated. "The confidential file in which the White House central files 

unit stored especially sensitive material has about 800 pages of CIA material, most of it relating to the Agency's Foreign Broadcast Information Service. In addition, the official file includes about 250 pages of unclassified 

material about the Agency. The National Security Council files have about 

3,000 pages relating to the CIA, some of it duplicated in Truman's office file. 

This file includes several folders of cortespondence of the Executive Director of the National Security Council regarding CIA. About 500 pages from 

this collection remain completely or partially classified." He also mentioned 

Psychological Strategy Board files in the Presidential papers, comprising 

about 33,000 pages, as "containing CIA equities." The Psychological Strategy Board was established by Presidential directive on June 20, 1951, "to 

authorize and provide for the more effective planning, coordination, and 

conduct within the framework of approved national policies of psychological operations." About half of that collection is still classified. 

69 
Other intelligence-related papers that are kept at the Truman Library 

include those of Budget Director James E. Webb which "have a few documents relating to the CIA's budget requests but contain no specific information on that sensitive subject." However, the papers of Defense Secretary 

Forrestal's Special Assistant, practically all of the paperwork that passed 

through the secretary's office, provide "a remarkable overview of CIA 

activities in this early period." In addition, there are three interviews with 

RAdm. Sidney Souers in which he discusses his work as Director of the 

CIA and Executive Secretary of the NSC, about 50 pages of correspondence with Allen Dulles, materials relating to the OSS, and memorandums 

from Maj. Gen. William Donovan to President Truman. 

David Gries announced that he would try to answer three questions: 

"What have we [CIA] declassified from the Truman period? What are the 

current plans for further declassification? And what is our general policy 

toward historical records?" 

In answering the first question, he said most of the OSS records—"at 

the instigation and with the encouragement of Bill Casey" —are now in the 

National Archives, and that those "9-million-odd pages," according to the 

people there, are among the most used documents they have. Included are 

most Truman-era estimates and assessments, of which "just a little bit" 

remains classified, 20,000 pages of documentation for Arthur Darling's 

Central Intelligence Agency, An Instrument of Government to 1950, and 

Ludwell Montague's General Walter Bedell Smith as Director of Central 

Intelligence, October 1950 to February 1953, plus the sources for nine of 

the ten chapters of Organizational History of the Central Intelligence 

Agency, 1950-1953 by George S. Jackson and Martin P. Claussen. 

Regarding curtcnt plans for declassification, Gries said the Agency's 

Center for the Study of Intelligence has authority to review 11 significant 

Cold War covert actions, three of which relate to the Truman period. Work 

on operations in Korea during the Korean war is expected to begin later this 

year, and operations in support of democracy in France and Italy will be 

done in 1995. CIA also is a major contributor to the State Department's Foreign Relations of the United States (FRUS) series but, "until we had our 

review program in place and the backing of, first, [former DCI] Bob Gates 

and now [present DCI] Jim Woolsey, we were simply unable to comply with 

the requests for documents that we received from the Department." He said 

one of its forthcoming volumes, tentatively titied Intelligence and the United 

States Foreign Policy, 1945-1950, will, of course, contain numerous items 

from CIA. "We have today a very full relationship with the State Department 

in supplying documents for volumes of FRUS that are in preparation. "In 

addition, another 20,000 pages, approximately, of documentation for the 

books by Arthur Dariing and Ludwell Montague have yet to be declassified, 

but will be as soon as possible, as will the sources for the final chapter of the 

Jackson-Claussen book. The classified material Ben Zobrist mentioned is in 

the Truman Library will also be reviewed for declassification. 

70 
Gries then covered the key elements of the Agency's openness policy. 

Regarding Cold War covert operations, he described the difficulties 

involved in getting them declassified. "When you're dealing with covert 

action which involves human beings who, [having received] a pledge of 

confidentiality, agreed to help the United States, you are taking grave risks. 

We have made mistakes in the past which we deeply regret, and we intend 

to be very careful. Don't expect speed [in this process], but we will do what 

we say we're going to do." 

"We're going to continue this conference series and have several more 

planned." One in the fall, to be conducted jointiy with Harvard University, 

will be on estimating Soviet strategic capabilities, and by that time the 

Agency will have declassified and made available to scholars "all strategic 

estimates on the Soviet Union through 1984." He told the audience "we're 

open to suggestions" regarding other conference topics and "if you have 

some good ideas, we would like to hear from you." 

Declassification of the archive of the journal Studies in Intelligence 

continues, and 500 articles from it have been deposited at the National 

Archives. Another 500 have not yet been released, he said, because they 

were reviewed in the past under a different set of guidelines, but a substantial number of them will be releasable under present guidelines. An index of 

those articles released will be published, as has already been done for the 

initial group of Studies articles that were released. In addition, the second 

annual unclassified edition of Studies will soon be available through the 

National Technical Information Service. 

Gries then described the program called block review, a concept DCI 

Woolsey introduced in September, 1993, for reviewing and declassifying 

30-year-old analyses, grouped by subject. It involves "a rather hurried 

review, and the reason we can do it is that properly prepared analysis does 

not contain references to sources and methods. It is what we call finished 

intelligence and should be much easier to go through." The first such block 

will be all analyses on Vietnam from the beginning to 1964. Gries thought 

that Korean war analyses might be another suitable subject for this method 

of review. 

"We also continue to work on older CIA histories, classified histories 

produced by our history staff.... The history of Allen Dulles as Director of 

Central Intelligence is nearly complete and will be available this year." 

Sherman Kent's monograph on the tradition and practice of producing 

national estimates is finished and will be available as well. 

Gries mentioned the quarterly newsletter through which the Center for 

the Study of Intelligence endeavors to inform the scholarly community of 

"our schedule, our conferences, and our declassification plans." He reiterated that the DCI's intention is "to enrich the historical record without 

[compromising] the pursuit of our central mission to provide intelligence 

71 
and analysis to the President and his senior officers. We think it can be 

done. We are limited only by our resources." 

Anna Nelson said she would like to concentrate on the documents in 

the National Archives from the standpoint of the researcher, "...somebody 

for whom you're doing all this work." "There are in fact three groups of 

documents in the Archives that reflect the period of Truman's Administration. They are the intelligence estimates, 11 boxes that contain articles from 

Studies in Intelligence, and the history series which contain the information 

used by Ludwell Montague and the various histories written about the organization." However, she pointed out, the memorandums in the publication 

distributed at the conference, CIA Cold War Records, The CIA Under Harry 

Truman, are not yet in the Archives. 

The National Archives does not have a list of the Estimates that are 

still classified. The available ones have been released in their entirety— 

"nothing has been redacted"—and many more of them are on the USSR 

than on any other country. "There is no doubt that their release is a giant 

step toward our understanding of the evaluations of the Intelligence Community. The Estimates include a list of distribution, who saw them—or 

where they were sent, whether anybody looked at them or not—and there 

are notations as to the disagreements among the various members of the 

Intelligence Community. But to a researcher, reading them is a very disquieting experience. It is so difficult to discover their relationships to policy.... 

We want to know how policy was made. We'd like to know who argued out 

the conclusions of these National Estimates. We need to know more if we're 

going to understand how the policy came to be created. Establishing cause 

and effect is always difficult when there are no ancillary documents.... It 

really does become a guessing game.... We'd like to know more about their 

impact. Here, as elsewhere, these Estimates tend to lead the researchers to 

more questions than answers." 

"The Studies in Intelligence, as you all know, are not really records. 

Agency records. They are a collection of articles from the internal classified 

journal that was started in 1955. The articles are very interesting—a very 

wide range of subjects: one on Napoleon, one which talks about using aerial 

reconnaissance photos for studying an aspect of the Holocaust, and, of special interest for us today, one on Truman and CIA covert operations. So it's 

a very interesting collection. In general, it does contribute to our understanding of what people in the Agency were interested in and thinking. I 

have to confess, however, that the way the researcher finds them is not very 

user-friendly. I assumed it was a journal and that when I opened my boxes 

I'd see something bound or organized by month. But that's not so. They're 

xeroxed articles, and they are in file folders identified only by number.... 

There are, of course, sentences and words blacked out. There are some articles with authors who will remain anonymous under the heavy black rectangles where their names appeared. We are not told whether articles are 

missing; some clearly are. There is no list of articles still classified." 

72 
"The third collection actually contains material researchers associate 

with archives: memoranda, summaries of interviews, information that cannot be found in the official written record. This is the history series, primarily the files of Ludwell Montague. It's the kind of information that could 

help us understand the bureaucratic struggles, the conflicting personalities 

that influence policy. Clearly personalities matter a good bit to the way in 

which policy develops. In these boxes, for example, we learn that Sidney 

Souers told Montague that it often seemed as if no agency wanted a CIA 

unless they could control it. We learned that Bedell Smith thought Allen 

Dulles was a 'fair operator' of clandestine operations but a weak administrator. And then we find that William Jackson thought Dulles was a man of 

arrogance and self-satisfaction whose brother engineered his position as 

DCI. Now, whether these are accurate is not the point. The point is, these 

comments illuminate important relationships...." Unfortunately, this collection also contains an inordinate number of shocking pink withdrawal cards, 

so many documents are still classified. 

"Some information, of course, is always an improvement over no 

information. And those who have been battiing the Cold War mentality in 

the Agency and successfully [declassified] the information are really to be 

commended and congratulated. But the Agency has, in fact, released very 

few of its records. As a matter of fact, it's only in the last couple of years 

that State Department historians have been allowed into CIA to read records 

and choose what might go into foreign relations volumes. That is a very 

important change. If the CIA is seriously interested in promoting the study 

of intelligence, if it really wants to help us understand the internal culture 

and its role in the making of foreign policy, then it will have to consider, it 

seems to me, a number of changes." 

"First of all, declassified documents should be released with the file 

markings that indicate their origins, their course through the Agency, and 

what's been withdrawn. That's the way every other agency does it. These 

published collections of pristine documents are very difficult to evaluate 

and leave the researcher to suspect that important documents have been 

withheld, even when that assumption may not be cortect. So I think it's 

important to make that change.... We really need to know something about 

what archivists call provenance, where [the documents] sat in the files and 

where they went." 

"Secondly, the passage of time is going to have to one day be 

acknowledged by new classification procedures. The Truman Administration came to an end more than 40 years ago. There may still be individuals 

who require protection; in fact, I'm sure there are. But is it necessary to protect codes that have been obsolete for 25 years? Or is the information 

merely indicating the presence in US embassies of the CIA? Will security 

be breached if the State Department releases a document with a certain 

combination of letters long since replaced?" 

73 
"I think it's time to ask questions like that because, remember, we're 

not just talking about what is in the CIA records in the CIA building. We're 

talking about records that have CIA equity; that is, in which the CIA has an 

interest. This business of declassification is a very byzantine one, and I 

think that we have to understand there's a difference between the kind of 

records [with information about] sources and methods that are in the CIA's 

files and those records which CIA has an interest in, for one reason or 

another, that are in other agencies' files. The CIA must acknowledge that 

there are different levels of documents that concern intelligence. Montague's papers, the sources that he used to write his book, are not as important as documents that reflect US covert activities behind the Iron Curtain. 

Do they have to be looked at in the same way, page by page, line by line? 

That's a question that ought to be asked, about the level of the necessity for 

review." Nelson submitted that CIA authorities ought to ask themselves, 

"with an open mind," whether documents with CIA "equity" in other agencies could be given a kind of "bulk declassification" suggested by recent 

efforts to change governmentwide declassification procedures instead of the 

painful and expensive reviews they now receive. 

"I'm suddenly reminded of the trendy new phrase virtual reality" she 

mused in closing. "The Agency has come close; it hasn't gotten there yet. 

When the CIA decides to relax its demands for page-by-page review of 

every national security document from the Truman years, then researchers 

will begin to understand the dynamics behind the formation of the Agency 

and its role in American national security policy." 

74 
Session VI: The Legacy of Harry Truman's CIA 

John Lewis Gaddis, Ohio University 

"My role as the final speaker at this conference was to summarize and 

perhaps to suggest some directions in which we might go from here. I 

should stress that I do so not as a practitioner of intelligence history but 

much more as a consumer of it and sometimes as a critic of it as well. But I 

also do so as one of the original members of the CIA Historical Review 

formed by Bill Casey in 1985.... The process that has brought us to this 

point today really did begin with this person who was in many ways the 

most secretive of DCIs. I think he set the process in motion because he considered the verdict of history to be quite important." 

"Our experience with Bill Casey suggests something of the tensions 

that exist between the competing requirements of secrecy and openness. It's 

something, of course, that comes with the territory for anybody who is trying to do contemporary history on the basis of any official records. It needs 

to be said as well, apropos of this tension, that the record of the United 

States Government in making official sources available to historians is still 

better than that of any other major participant in the Cold War, even taking 

into account the fragmentary release of Soviet, East European, and Chinese 

sources, and even taking account—I know my British friends will agree 

with me—of the workings of a true 30-year rule. As far as I know MI-6 has 

yet to organize a conference like this." 

"At the same time, however, one cannot help but be struck by the 

amount of time that has passed since the events we have been discussing 

actually took place. There has been time for not just institutions but also the 

cultures that grew up within institutions to get locked in and to take hold. It 

seems to me that what we face today, as Dick Helms was suggesting earlier, 

is the need to adapt the CIA culture and all other forms of Cold War culture 

to an environment that could hardly be more different from the one that 

gave rise to them almost a half century ago. Historians, whose task is to 

show how past environments differ from those that now confront us, can, I 

think, play a valuable role in that process of institutional adaptation." 

"But before we can do that, we historians need to remind ourselves that 

we have our own forms of cultural lock-in that sometimes get in the way of 

our playing this role in institutional adaptation. At one end of the spectrum 

there is our affinity for anecdotalism, the tendency to value colorful particulars over careful, comparative generalization. Spy stories, after all, are not so 

different from sea stories, which is to say that they're entertaining. But sometimes it's difficult to know just what to make of them all. I recommend to my 

students the suggestion of one of our best historians of intelligence, Robin 

Winks, who advises frequentiy asking the rather rude question. So what?" 

75 
"The other end of the spectrum is the tendency of historians, when we 

do generalize, to do so rather crudely. We often seem to want to divide all 

known interpretations into such unimaginative categories as orthodoxy, 

revisionism, or postrevisionisms. We ought to do better than that; the world 

is more interesting than that. But at the same time I have to say I don't think 

we're going to do it by borrowing from our colleagues in international relations theory, who have labored mightily to produce static, reductionist, 

overquantified, and thoroughly boring models of the international system 

that have now been proven embarrassingly irrelevant by the way the Cold 

War ended." 

"The most fruitful approach might be to try to get beyond our tendency as historians to pigeonhole and the tendency of the international relations theorists to overtheorize; to begin to think about how we might look at 

an institution like the CIA, or other products of the Cold War, in a way that 

parallels some of the work that's being done in the physical and biological 

sciences on something called complex adaptive systems. It's in that context 

that I'd like to frame my remarks this afternoon as a way of trying to pull 

together what we've heard so far." 

"Well, you might ask, what is a complex adaptive system anyway? As 

the name implies, a complex adaptive system is an entity in which multiple 

agents interact with one another in ways that evolve over time. The model 

might fruitfully be applied to the Soviet-American relationship during the 

Cold War, which certainly was in many ways a complex adaptive system. 

And it seems to me it could be applied as well to the particular institutions 

that Soviet-American competition produced—one of which was, of course, 

the CIA." 

"Now, complex adaptive systems have certain common characteristics. First of all, they reflect a high degree of sensitivity to initial conditions, 

which is only to say that conditions encountered and decisions made at the 

beginning of a process tend to have greater influence on the nature of that 

process and on the structures that emerge from it than the conditions 

encountered and the decisions made further down the pike. What happens at 

the beginning is critical." 

"Secondly, complex adaptive systems exhibit a tendency for complicated patterns of behavior to emerge over time from the operation of just a 

few simple rules. Just a few basic guidelines can give rise to an astonishingly 

complicated set of activities. Complex adaptive systems tend to be self-organizing, which is to say that once they are set in motion they do not require, 

and often tend to resist, external efforts to reshape or reorganize them. Complex adaptive systems tend to be self-perpetuating, which is to say that they 

tend to remain in existence for some time after the conditions that gave rise 

to them have ceased to exist. They are, however, subject in such situations to 

abrupt shifts in direction, or even at times to complete collapse." 

76 
"Finally, complex adaptive systems do not lend themselves, beyond 

these very general rules, to forecasting. Consequences produced are often 

quite at odds with the intentions that went into them, and sometimes the 

only way to explain what happened is through 'retrodiction,' which is historical investigation." 

"All of which brings us back to why we're here today. So let me 

experiment, and see how this model might help us make sense of some of 

the things that we've heard." 

"First of all, sensitive dependence on initial conditions. This entire 

conference has been premised on the notion that if you want to understand 

the history of the CIA you've got to understand the particular circumstances 

of its founding. The point repeatedly was made—by Chris Andrew, by 

Mary McAuliffe, by Ken McDonald, by John Ranelagh—that, even if Truman himself may not have had a particularly sophisticated appreciation of 

the nuances and practices of intelligence, nonetheless what happened during Truman's administration set the pattern for the future. And it would be 

difficult to understand any aspect of the CIA's history apart from that initial 

set of conditions." 

"But that requires we historians to make an imaginative leap, to get 

back into that very different time frame and try to get a clear sense of how 

people at the time saw things, even if we don't necessarily always approve 

of these visions. One of the things that clearly emerged from several of the 

presentations we heard at this conference was that, rightiy or wrongly, people in 1947 did see a security threat of major proportions, not in the sense 

they expected a Soviet invasion of Western Europe the next morning, but 

rather because they feared a psychological collapse in Western Europe that 

might produce the functional equivalent of an invasion: The spread of 

Soviet influence through the choices demoralized Europeans themselves 

might make at the polls." 

"This sense of insecurity that was so strong among the Americans of 

1947 grew out of two separate but related prior events. One of them, as 

Barry Katz and Tom Powers suggested, was the trauma of Pearl Harbor, the 

event that gave rise to the creation of the first major American intelligence 

organization, the OSS. And that shock of being surprised is something this 

country has never gotten over, and it has profoundly influenced our thinking 

about security." 

"The other prior circumstance that contributed to the attitudes of 1947 

was the fact that VE and VJ Days marked the defeat of European Fascism 

and of Japanese militarism but by no means the defeat of authoritarianism, 

which still—as Bill Colby and Dick Helms suggested in their presentations—looked like it might indeed be the wave of the future. The particular 

set of circumstances that had arisen in the Soviet Union—whereby one 

77 
tyrant had remodeled an entire country to become a reflection of his own 

paranoid personality—was the other critical condition that was present at 

the creation of the CIA." 

"The CIA cannot be understood, it seems to me, apart from that context. And it was this concern, of course, that accounts for the reversal of 

President Truman's initial instinct that the nation needed no peacetime 

intelligence apparatus, a shift in his viewpoint nicely documented by Chris 

Andrew in his presentation." 

"A question historians of the Cold War are going to have to look at 

more carefully than they have up to this point is this: At what point did 

these initial conditions of insecurity about the future of free institutions 

begin to fade away; at what point could it be said that the circumstances that 

made certain responses appropriate in the context of 1947-48 had begun to 

shift? Was it with the Marshall Plan that we regained our self-confidence?...the successful outcome of the Berhn blockade in 1949?...the limiting and management of the Korean war? We know that by the time 

Eisenhower came into office he was taking a much more self-assured attitude about the prospects for the West than had been characteristic of the 

early Truman Administration." 

"It becomes important to try to document when Western self-confidence was restored, because it helps us to understand, with regard to the history of the CIA, when the initial conditions that gave rise to its founding 

had begun to evolve into something else. It provides us, therefore, with a 

standard against which we might measure the extent to which the CIA 

changed itself in such a way as to remain in tune with its environment. 

That's a point I want to come back to later." 

"A second point about complex adaptive systems is that simple rules 

tend to produce, over time, complicated behavior. I could not help but be 

struck, in reading over the National Security Act of 1947 and NSC 10/2, the 

authorizations for covert operations, by how inadequately the bland and dry 

language of these documents foreshadowed the train of circumstances set in 

motion by them. It was a long way from the simple and rather naive intentions of George Kennan, when he encouraged the development of a covert 

action capability for the CIA, to the tangled web, the 'wilderness of mirrors,' of a James Jesus Angleton. And yet we can see in this precisely what 

I'm talking about: how simple intentions at the beginnmg of a process can 

lead to unforeseen and infinitely complicated results at its end. We need to 

know a lot more, therefore, about just what that process was." 

"The simple rule that appears to have been in effect in the early days 

of the CIA was that if the other side did it, it was okay for us to do it too. 

The point was made by John Ranelagh that the Soviet side had had a lot 

more experience with covert operations than we did. We had dabbled with 

such activities, of course, in the context of World War II, but they were new 

78 
to us as a peacetime practice. We came to them because of the sense of insecurity that was so pervasive at the time. Perhaps the best expression of this 

mentality was that dramatic line in NSC 68 which says, in effect, that the 

national interest will not be compromised by anything that we do, by the 

use of any means whatever to defend the national interest." 

"Now, it seems to me that that simple rule—call it moral relativism if 

you will—produced adaptations over time leading to immense complexity. 

First of all, a symbiotic relationship developed between the CIA and its 

counterparts on 'the other side,' in which each determined the legitimacy of 

the other's actions. Another problem that arose from it was something Ken 

McDonald and Dick Helms both talked about, which was the progressive 

alienation of CIA from the society it served because it felt obliged to use 

means that could not be defended publicly within a democratic framework. 

So a kind of compartmentalization from society took place with the gradual 

descent of the CIA into covert operations at this particular time, with results 

that I think we would all acknowledge were unfortunate in many ways." 

"Then, finally, as a result of this, very difficult moral dilemmas arose 

for the people who had to function in this environment. This is something 

we outsiders should take very seriously indeed. I don't necessarily mean 

that all of the people on the inside agonized over these matters, but I suspect 

more did agonize than did not. This is a dimension of CIA history that we 

may never fully recapture, but we certainly should try to. Again, it's a 

spinoff of a simple rule: that in conditions of ultimate insecurity it becomes 

acceptable to do everything the other side is doing to try to deal with that 

problem." 

"What this all boils down to is a classic case—maybe even a classic 

tragedy—of a situation in which a broad definition of means available may 

well have corrupted ends. The old relationship between ends and means is 

absolutely basic in human history, and it's very important that we historians, 

whether working within CIA or outside CIA, address that issue bluntiy, 

head-on, and candidly, with a view to trying to understand how far along the 

way the means were appropriate, at what point they became counterproductive, and at what point they began to corrupt the ends they were intended to 

serve? Why does that happen? Why does it take so long for people to realize 

that it's happened? Why does it take, in the case of the CIA, the functional 

equivalent of a catastrophe, the Church Committee hearings of 1975, to 

bring home to the Agency the extent to which its own practices had 

departed from what could be justified and explained openly to the American 

people?" 

"These are all, I think, fair questions that should be raised. And they 

are all in one way or another a reflection of the complications one gets into 

from the application of so simple a rule as: 'if they did it, it's OK for us to 

do it.' " 

79 
"A third element in the behavior of complex adaptive systems is 

something called self-organization, and I think it helps to account for what 

happened with respect to this earlier set of problems. When George Kennan 

first encouraged the CIA to get into covert operations, it was with the idea 

that these activities would be carefully calibrated as instruments of national 

policy. Looking back on it now from the standpoint of what we know, I 

would be prepared to defend the proposition that at no point between the 

years 1948, when Kennan set up this process, and 1975 when the Church 

Committee really opened it up to public scrutiny—at no point during those 

years did CIA covert operations meet this test of being a precise instrument 

of national policy." 

"Now, you can explain this in several different ways. You can say it 

was Kennan's naivete, that he did not realize once he got this process going 

how hard it would be to control. That certainly is true, but I think another 

explanation was a tendency toward self-organization that was a function of 

the rules under which the CIA operated in those early days. The Agency, 

and particularly the OPC, was never particularly responsive to external control and perhaps—given its task, mandate, and methods—it could never 

have been. The requirements of secrecy, the concept of 'plausible deniability' involve organizing yourself in such a way that you are not subject to 

external control. And yet, of course, we're all painfully aware of the problems that can arise from such situations. The organization and functioning 

of OPC provides a very good illustration of this principle of self-organization: as the process gets going and it is very difficult to control from the outside, it takes on a life of its own." 

"I'd like, in this context, to say a word parenthetically about the whole 

issue of elitism or, as some people call it, old-boyism in the CIA. The subject was alluded to by John Ranelagh, but it's surprising the subject hasn't 

come up more frequentiy in this conference because, as you know, it comes 

up very frequently in the literature that's written about CIA. I must confess 

to never having found the existence of elitism within the CIA to be as sinister a phenomenon as many people do. I'm sorry, I just have never been convinced that Yale University really did have a secret plot to rule the world. 

Who came into CIA, where they came from, what their connections were, 

all of this needs to be understood in a somewhat broader context than the 

way historians have dealt with this subject up to now." 

"It seems to me the problem of who was running and who constituted 

the CIA reflected a larger problem characteristic of the late 1940s, which 

had to do with the whole business of having a national security state. This 

was a totally new development in peacetime for the United States. It 

required a kind of training, a degree of linguistic and analytical ability that 

most Americans, in what was still very much an isolationist age, simply did 

not have. It seems to me that it was not so much the determination of a 

secret society or a secret elite somehow to seize power as it was the necessity of confronting a different kind of world and calling forth a different 

kind of expertise from what most Americans had in that period." 

80 
"Besides, has there ever been anywhere, under any circumstances, an 

intelligence organization that was not elitist in one form or another? Elitism 

may well come with the territory. It is one more form of self-organization, 

but it is one that has become highly visible in the books, articles, and movies about the CIA. I hope that we historians will find somewhat more 

sophisticated ways to deal with this issue." 

"Self-perpetuation is another characteristic of complex adaptive systems. Like many other such systems, CIA, once it established and organized 

itself, fell into the assumption that the particular niche it had carved out for 

itself, the circumstances in which it had become relatively comfortable, 

would continue to exist indefinitely. That's quite characteristic of how organizations tend to function in these situations. Looking back on it now, the 

Agency, it seems to me, was not sufficientiy sensitive to the shifts in external environment that over time cause methods that had worked in one context to work less well when applied to others." 

"You can see this in geographical terms if you think about the difference between Bill Colby's and Hal Ford's talks yesterday afternoon. What 

Colby was laying out for Western Europe was a record of almost unparalleled success, while what Ford was describing for Asia was a very mixed 

record ranging from, as he put it, success to disaster. Right there you can see 

a clear example of the extent to which the transfer of techniques from one 

region to another, at almost the same time, did not work particularly well." 

"You can do this same kind of analysis along a temporal axis, looking 

at the extent to which techniques transported over time worked less well as 

time went on. None of this is particularly surprising: time does pass. But the 

Agency did find itself surprised at several points along the way, through its 

insensitivity, to how much the external environment had changed. If you 

think about such episodes as Indonesia in 1958, the U-2, Bay of Pigs, certainly the Church Committee investigations, even Iran-Contra, all these can 

be understood, it seems to me, as failures to assess accurately the environment in which the organization was functioning. All of them reflect the tendency to transfer from the past techniques and procedures that were less 

appropriate to the present." 

"None of this is in any way unique to CIA; I think it is a characteristic 

of large organizations in general and how they tend to function. The processes that produce this problem are so simple that historians and theorists 

of public policy often walk right past them without seeing them. They can 

be very simply expressed in a few basic maxims: Time passes; conditions 

change; and institutions adapt. But refine the statement just a little, because 

there's a difference in the way these things happen. Time passes at a regular 

rate; we can measure its passage very precisely. Conditions change at a 

gradual rate that is not always completely regular. Institutions tend to adapt 

at a very irregular rate, going merrily along their way until they get into 
some kind of a crisis, at which point they're forced to undergo dramatic and 

wrenching change." 

"One can find parallel examples in the history of evolutionary biology, 

which provides not a bad model for looking at the overall history of CIA. 

An environmental biologist would suggest that the healthiest condition for 

an organism is one in which it's constantiy having to make small adaptations along the way; it's constantly in a state of manageable crisis, and it 

doesn't become too comfortable in its own niche. Organisms that become 

too comfortable often wind up going the way of the dinosaurs." 

"Finally, a word about forecasting and prediction in relation to complex adaptive systems. I said at the outset that one of the characteristics of 

such systems is that it's very hard to predict, at the beginning of one, what 

its subsequent evolution is going to be. The same observation has been 

made here several times about the CIA. John Ranelagh said this morning 

that no one in Truman's era could have guessed what the CIA would eventually become over time. That doesn't surprise me, because very few people 

anywhere guessed the course that the Cold War itself would take over this 

period. That was a surprise to everybody. Clairvoyance extended over great 

sweeps of time is a gift that's granted to very few." 

"The task for historians, it seems to me, is to ask the question: 'how 

exactiy did we get from there to here, admitting that we can't be clairvoyant?' We can't see what's coming, but we can certainly go back and try to 

trace the process by which we got from that very different set of conditions 

to where we are right now. But historians, before they begin to answer that 

question too smugly and too superficially, probably ought to supplement it 

with another question that they should ask themselves. It's very useful for 

those of us who were not there on the scene, were not present at the creation, to ask what we would have done if we had been there, confronted 

with that same set of conditions and dilemmas. It's always worth remembering, in writing history, that people at the time don't know what's going to 

happen next, even though the historian does. Now, historians are normally 

not as arrogant as are certain unnamed social scientists, but they do have 

their moments, their flashes of artogance if you will. These tend to arise 

from the failure, in dealing with controversial subjects like the ones we've 

been discussing here, to ask that rather humbling question: 'what would I 

have done if I had been in that situation?' " 

"Another useful exercise for historians is to recognize that things did 

not necessarily have to have happened in the way that they did. There are an 

infinite number of paths from the past to the present, although if any of the 

others had been followed we might be in a completely different present 

from the one that we're in right now. It's important to question determinism, 

to be skeptical about the idea that things could only have happened in the 

way that they did. It's important to ask the question that Dick Helms was 

suggesting to us this morning: 'what if?' What would have happened if one 

82 
of these alternative paths had been taken? What if the CIA had never been 

created? Or what would have happened if the CIA had existed but in a very 

different form, say with no covert action capability? Or what if the CIA had 

existed in the same form but with different policies and practices along the 

way? How would things have been different? It's very interesting and I 

think a thoroughly responsible exercise for a historian to go through." 

"Bill Colby, I thought, raised that kind of question yesterday afternoon when he asked: 'what if there had been more emphasis on technical 

means of collection and less on HUMINT, at least at the earlier stages in the 

late '40s and the early '50s?'. But that question, to which several people 

have returned in the course of our discussions, raises an even more fundamental point, also referred to by Colby and by Helms: that there really was 

an intelligence revolution that took place along the way. We have focused 

on the revolution that took place with the founding of OSS and CIA, but we 

perhaps need to give equal attention to the equally important intelligence 

revolution that occurred about halfway through the history of CIA. This 

was the shift to 'national technical' means of collection, to overhead reconnaissance and especially to satellites, which it seems to me have had a revolutionary significance which has yet to be fully discussed at this 

conference." 

"Part of the implication of this midstream revolution in the history of 

the CIA was actually a fundamental turning point in the history of inteUigence altogether. Intelligence activities in the past had been oriented toward 

the collection of information on one's own part and the denial of information to the other side, or at least the denial of information by providing disinformation to the other side. The idea had been to keep the other side in the 

dark, not to share information." 

"But think for a minute about what the full implication of the reconnaissance revolution has been. We had got to the point by the time of the 

1972 Salt I Treaty, at which it was very important to share information with 

the other side to make sure that the other side had accurate knowledge of 

our capabilities, just as it was important for us to have an accurate knowledge of theirs. And those of you who were involved in the negotiation of the 

Salt II Treaty will remember that we even came to the point of configuring 

our cruise missile systems so that they would be visible to satellites from 

the other side, and we were talking to the Russians about how they could 

make their weapons systems visible to us as well." 

"There's a very interesting philosophical point that has yet to be discussed in all of this. Does stability in an international system come more 

from mutual opaqueness or, alternatively, is stability more likely to arise 

through mutual transparency? Could it be better for the other side to know 

your own secrets and for you to know those of the other side? One of the 

greatest ironies of the Cold War is the extent to which, at least in the field of 

83 
arms control, we worked ourselves around to that latter conclusion: transparency did turn out to be better than opaqueness in the latter Cold War." 

"One of the interesting things we'll be looking for in the Soviet 

archives has to do with a particular application of that question: Was it a 

good thing or a bad thing that British and American intelligence were penetrated to the extent that they were in the 1940s? Bad, of course, for the people who got killed as a result, but did it stabilize the Soviet-American 

relationship? Did it make our behavior more predictable to Stalin? Did he 

use that information in the best possible way? Was it harmful? Destabilizing? We don't know the answers to these questions, but our experience later 

on with the reconnaissance revolution, it seems to me, ought to push us into 

asking such questions about espionage itself in this early period. But, of 

course, that is to raise a more fundamental question: what is the whole purpose of espionage and intelligence anyway?" 

"In conclusion, let me come back to a point Mary McAuliffe raised in 

one of the earliest presentations, which is the importance of putting intelligence history into the larger context of diplomatic and international history. 

Intelligence history has far too long been written as a kind of a subspecies, 

as sophisticated buffism, so to speak. We have yet to make the real linkage 

between intelligence history, diplomatic history, military history, and even 

economic history which is certainly going to be important in the latter years 

of the Cold War. We need to think about how intelligence history can be 

integrated with these other approaches. I think there are a couple of things 

that need to happen to facilitate that process of beginning to treat intelligence history as normal history." 

"For one thing, with all the admirable progress that the Agency has 

made since our initial meeting with Bill Casey some nine years ago, I quite 

agree with what Anna Nelson was saying this afternoon. A lot more 

progress toward openness with respect to CIA historical material needs to 

be achieved. I don't think anybody here would question the need for secrecy 

with respect to current, recent, and even in some cases intelligence activities 

that are fairly distant in time. But I come back to the point that I started 

with: four or more decades is a very long time indeed. I find it very difficult 

to beheve that any aspect of CIA activities during the Truman Administration, apart from the exposure of the very few surviving personnel who were 

involved, could today endanger sources, methods, operations, or current 

policy. 

"I return to the point Dick Helms made in applying a sort of 'Italian 

elections test' to declassification: 'There are Italian elections coming up, so 

it wouldn't do right now to declassify the way that we sought to manipulate 

the Italian elections of 1948.' My response to that is, that there are always 

Italian elections coming up; you can pick no point in time at which there 

isn't an Italian election coming up. I think this is a clever Dick Helms 

excuse rather than a valid rationale." 

84 
"I would propose a different standard: call it 'the Queen Victoria test' 

for the declassification of documents. The test is a very simple one: If the 

document is closer in time to her era than to ours, then it's really time to 

open it up. And that means opening entire files, as Anna Nelson was saying, 

not just individual documents. It's great to have the individual documents, 

but the true history that we're talking about—the kind of integrated, sophisticated history we need—will not be written until it can pass the 'Anna Nelson test' that she laid out very clearly for us this afternoon." 

"I would hope also that those responsible for declassification in the 

Agency would recall a point I heard an Agency veteran make during one of 

our advisory committee meetings several years ago: if an agency devotes 

too much effort trying to keep too much secret over too long a period of 

time, it is very likely to lose track of what really is worth keeping secret 

right now and in the future. A certain confusion about standards sets in, 

reflecting the massive effort that is required to maintain a system of classification and review that has become so burdensome, so cumbersome, and so 

expensive." 

"The other thing, it seems to me, that needs to happen if we're to move 

the field of intelligence history into a more sophisticated realm and relate it 

to other forms of history, is that historians themselves are going to have to 

make a greater effort to put their work into a truly international context. 

Although you would never know it from reading some accounts, the CIA has 

always been part of a wider world; it's been embedded in a complicated network of relationships, events, situations. Virtually everything the CIA has 

done over the years it has existed has, in one way or another, been a response 

to, or perhaps an effort to influence, something that was happening beyond 

the boundaries of the United States. Yet most histories of the CIA so far, like 

most American diplomatic history in general, are written as if the area inside 

the beltway—or whatever the functional equivalent may have been in the 

Truman Administration—is the center of the known universe and that everything else that happens is just a response to what goes on here, on this littie 

patch of ground. This is a kind of historiographical navel contemplation, if 

you'll pardon my saying so, and now that documents are beginning to open 

up from the other side, it's high time that we historians recognized that there 

is littie excuse for continuing to indulge in it." 

"I think we historians also need to recognize—that is, the more conspiratorially minded among us need to recognize—that the CIA was not 

always supercapable or supercompetent. The CIA did not give the fatal 

push to every sparrow that fell to earth everywhere during the Cold War 

years; there was a good deal of pushing back from the other direction; and 

there were a lot of sparrows that either fell or did not fall quite on their own, 

regardless of what the CIA or the KGB or any Russian or any American 

did. Once we historians come to see that pattern and begin to incorporate 

that complexity into our scholarship, then the whole field of Cold War history will become a lot more interesting and a lot more significant than it is 

now." 

85 
"One thing this conference has demonstrated though—and I have 

come back to the point with which I began—is that it is now possible to be 

serious about a cooperative and mutually beneficial relationship between 

the Intelligence Community and the historical community. We are indeed 

much closer than I ever thought we would be to the kind of thing that Director Casey was talking about with us in that meeting in March of 1985. I 

think Casey was more sincere in this than many people at the time would 

have given him credit for, and it seems to me that the Agency itself has 

demonstrated its sincerity, its goodwill, and its seriousness about these 

efforts in helping to arrange the meeting from which we've all benefited so 

much over these past two days." 

86