A  BRIEF  HISTORY  OF  THE  SIGNAL  INTELLIGENCE  SERVICE 
by 
Williajn  
F.  Friedman 
v.. 
June  29,  1942" 
DECLASSIFIED  pe:  Sor..  2.  E.  C.    \1~~' 
by  Director,  NSA/C.1:;*/.?;  C£~ 
?-'"■'•■  ?i-~-'jt~.J 
*mti  DztelLfe&JLl*
k  .;?:!£?  HISTORY  0?  TZ2  SIGSAL   C'TSLLIGSNCS  SZRVTCS 
l.m  'prior  to    Juno    1917  no   department   of  the   Go~emrsnt   conducted 
ervotara  lytic  activities  -vhatsoever.      ?rca   June   1915   to   about   Hay   1918 
a  considerable   amount   of  T?orr  along  these   lines  •  ras   conducted  purely  as 
a  patriotic    enterprise  at  his   o-sn   expense  "by  Hr«    George   Fabyan,   vrhoso 
:    Riverbank  Laboratories- at   Geneva.,    Illinois,    organized  a  small   group  of 
fairly  we II -train ad  cryptanalysts   to  7*orlc  upon  such   codes   and  ciphers 
•        -  :;.■•■■■;•.        .-•••'■         '    :    •     ..•;';•  •        ;" . 
as  -c-ere  fonvarded  by  the-  7far,    rJavy.,   State,    and.  justice  Departments .      The 
undersigned   directed  the    crypt  analytic   operations  and  training  at  the 
HirerbfiJLt  Laboratories  froa  the  tine   of  the   inception  of   this   v.crk   until 
-,    its   close  thereat   in  1919,    except   for   a.poriod'of  a  year   v&ea  he  "rras  ■ 
*••••*  -     •  ..  •  '_'*-';  -    - 
1st   Lieut.,    IcTD,    s  erring   at   GH^-AZ?  in  the   Gemap -code    solving-^  Action. 
2^      In   June    1917   the    crypt  analytic   activities,    cf   the  TTar   Department 
rere-  initiated  by   Colonel  Van   Dersn,    G-2,    ^ith   the    comissioning    of  n-    0. 
Yardley  as   1st   Lieut.,    LClD*      Yardley,   no   had  been  a   telegrapher   at   the 
State    Department  and  had  taken  scene   interest   in   cryptography,   vras    giren 
t^o    civilian  employees '  to  assist  his*      Ih©  vrcrk  grev  rapidly  and  by  the     . 
au-trusn   of   1917  the    increased  staff  7.-as    organised  as   a    section   designated 
e~s   ia-8,   Trhich'-^as   subdivided    into   6    subsections   Tdth   duties   as    indicated 
vsry  briefly  belcr*:     -v-  •/ 
(1)      Code  and  cinher   solution  subsection.    -     This   subsection 
-as  Trhat  -ould  now  be  called  the  cryptenalytic   subs  action.      It   -as   the 
largest  of  the  subsections  of  L!T-8     and  perforosd  the   cryptnr.a lytic  -*ork 
net  only  for  the  ?/ar  Department  but  also   for  all  ether  Gorsrnr.gr«trce~art- 
r-nts.    irciudiro;  1:avr ,    State,    Jus  tic's,    ^r.c.   the  trrp  cerscrrhirs — Cable-
.-r.'l  Z^-^rXt    Hhish   '^re  then  se-^arate  cr_v-  :'.  •-  iors.  *      ' 
(2)  Cede  and  cipher  ccnoilaticn  lubsectica.  -  respite  the  fact 
that  under  Amy  regulations  the  compilation  and  revisioa  of  cccss,  \Tas  a  , 
function  of  the  Chief  Signal- Officer,  compilation  activities  under  the  - 
Signal  Corps  were  apparently  in  a  moribund  state.   Information  having  been 
"•  •         .•"."'  •   •  • 
received  that  the  Gennena  possessed  'copies  of  the  17ar  Department  Telegraph 
Code  MI-S  deer.ed  it  advisable  to  establish  a  code  ccirpHation  subsection, 
and  that  subsection  produced  several  "codes  "such  as  Military,  Intelligence  ^ 
Codes  No.  5  and  No.- 9,  scaU.  pocket  codes  for  secret  agents,  and  the  like. 
(3)  Training  subsection.  -  In  addition  to  training  its  c-src-1-.  - 
*  *  -  .  *  "•  *  *-«r  -     .. " 
personnel  1:1-8  trained  the  inajority  of  the  personnel  sent  overseas  fcr- 
cryptar.a  lytic  duties  with  field  forces,  both  AZF   and' Siberia. 
*  *  "  * 
(4.)   Secret  inks,  subsection.  -  A  laboratory  -as  established 
„or   the  preparation  of  invisible  inks  for  use  by"onr  crm  agents.   It  also 
exa.tired  letters  for  secret  ink  writing  and  an  average  oi  ever  20C0  letters 
ner  ~esk  were  examined  for  the  military  and  postal  censorship  frcn  July  1, 
1918  to  ?eoi-^ry   1,  1919.   *  .'.-"; 
(5)  Shorthand  subsection.  -  This  subsection  iras  organised  to  -• 
handle  texts  in  various  shorthand  systems,  especially  C-eman,  -hich^ad  ■ 
to  be  deciphered. 
(6)  Cci-runicaticns  subsection.  -  This  7/as  established  in  UI-8 
fcr  handling  messages  tc  and  fron  niiitary  attaches  and  intelligence 
officers  serving  abroad.   In  a  period  of  9  months  it  sent  and  received 
about  25,OCO  such  ces sages,  practically  all  in  code. 
3.  At  the  height  of  its  development,  which  nas  reached  in  November 
1913,  Ul-8   Tras,  fcr  those  days,  a  rather  large  unit,  consisting  cf  IS 
02!
officers,  7J.   civilian  cryptographers  a=d  cry-pU::*2v sts,  and  3.09  typists 
at.6.   stenographer  a.  Tne  tioe  had  cess  for  the  establishment  of  a  definite 
policy  for  the  future.  How,  the  guiding  heads  of  Viilitary  Intelligence 
at  that  tine  fuTLx; recognized' the. high  importance  and  value  of  the  services 
"  «!•"*•  *"•  •  • 
-     •  -     '   '     *  •„.•..•»-—.  '   . 
rendered  by  -the  cryptanalytic-  bureau,  because  they  had  been  in  positions 
nhere  the  oroducts -of'the  daily  activity  of  the  bureau  cane  directly  to 
notice  and  they  could  no4  fail  .'to  note  the  influence  and  bearing  nhbh  - 
.  '     '   v.-.  ...    .   '•-.-  «     -::.   '  '.  •  .  .  -■  •; 
the  work  had,  not  only  upon  th9  military  and  naval  but  also  wpon  the  ;-.. 
..-••'*-..       .  -  *  •  -          •  *  '-  "•  • 
diplov-etic,  political,  and  economic- phases  of  the.  conduct  of  the  wax,  - 
They  therefore  had  .practical  experience  in -the  natter  and  could  bring  -     _  , 
.  -  ;-.  "  .V;:.-^-.^.--   •;.."--.•..•  •'  •  .'-•>  '•  -t       ::;.\. 
the  -rtei^mt  of  their/position  of  influence  and  their-  actual  experience- to  ■  ..  ^ 
bear  ur-on  those  in  charge  of  the  purse  strings,  rrith  the  result  that  they 
x/ere  able  to  obtain  funds  sufficient  to  keep  a-  fairly  large  organisation 
...  ...  •      '•  •<.  '*  '. 
-intact 'for  a  year  or  two.     An  annual  appropriation  of  .;1OO,OO0  ~*as     recom- 
mended in  a  C-2  study  dated  L-ay  16,   193-9  to  be  used 
as   follows: 
Rent,   light   ,.  and  heat   -  ■'"":,'  v3,900      .  .--  -  -      j 
Reference  books  "-""    .  10°  . 
rsrsonnel:     Chief  ;•  \  .     .'    .. .  •  .  6,000  .'•; 
'.         10  code   and  cipher  experts  €•  -73,000  30,000      - 
'       '."••     15  code  and  cipher  experts   ©  $2,000  30,000       • 
"*"  25   clerks  ©  Cl,2CC  ";  .70^000 
•r  •  Total  :)1C0,000 
The   ites:  fcr  "rent,   light,   and  heat"    is   explainable  -hen  5-t  is  noted  that 
the  bureau  ras   to  be  coved  from  rFashir.gton  with  a  vie~  to  hiding  its 
-xistenc-        Of  the  $100,000  recorrcended,    the  State  Derartnsnt  ras   to   pro- 
~ids   ZlZ  fZZ0  ar.d  360, 000  -as   to  be   provided   fcr   expenditure  by  the  A.    C.    cf
S,    C-2  on   "confidential  memoranda"   ?.,  :.-.st  funds  pertaining   to    "Contingency 
military  Intelligence  Division"— that  is,    by  vouchers  not   subject  to   review  by 
* "     i 
-the  Comptroller  General.     The  paper  confining  the  re  contends  tLons  made  by 
the  A.  C.  of  S,    G-2  to  the  Chief  of  Staff  was   «or.-^dn   and  initialled  by 
Acting  Secretary  of '  State   Polk  on  May  17,   1919,    and  on  Kay  19  it  was 
approved  by  the  Secretary  p£  Tfax  over  the  Signature   of  'General  liarch,    Chief 
of  Staff.     The  plan  was  put  into   effect,    the  bureau  was  installed  in   a 
private  house  at" 22  East  3Sth  Street,   Hew  York  City,    and  all  personnel 
.  .    ■.•'..'.    '    ".;      .         -  '•"..'•-?•    .-.-»  -I;'"-'  '<*.Vj 
together  with  existing  records  were  moved  .thereto. 
.  .     •--.■/.   :  *  •'•  ■■  :   -•   •"  •?/.••*   .-A"- -/'I ^  •"        •  -     - 
4.'       It  ij?  inoortant  to  note   that  at  that  -time  no  provision  whatsoever 
*as  made  for  radio  intercept  as   a  source  of  r air  material  for    crypt-analysis . 
...         *  • 
A  few  words  on  this   subject  nay  not  be  amiss.     Badio  intercept  of  fixed 
station  material  in  the'ifl  S.  by  the  Army  during  our  active  participation 
ijn  the  last  war  "rras  rather  fragmentary.      The  work. was,    of  course,    a 
responsibility  of  the   Signal   Corps,    but  radio   communications   could  hardly 
compete  with  c  ,ble   and  wire   communications  as  a  source   of   raw  material 
because  not  oc.'.y  did  the  large   governments  use  cable  in  preference  to 
radio  but  also   radio  as   a  means   of   communication  between  widely  separated 
fixed  stations  was   then   in  its  infancy.     The  Signal   Corps   did,    however,    have 
-what  were  called  "mobile   tractor"  units  stationed  on   the   southern  border, 
and  in  late  191S   one 
large  intercept  station  was  established  at  Houlton,   !£aine,   for  the  purpose 
of  copying.  trans-Atlantic  radio.     The  large  intercept  stations  maintained 
by  the  Signal   Corps  in  the   KEF  did  furnish   a  large  quantity  of  diplomatic 
traffic  Ttiich  was  forwarded  as  raw  material  to  G-2  in  Washington,    but  as 
soon  as   the  war  was  over  all   these  sources  of  intercept  material  were 
Qk
abandoned. 
This  "sras,    of  com: rse i 
tme  to  a  certain  extent  but  -as  .not  07  any  seans   the  whole  truth.     At  any 
*r.    -  -  - 
rate  by  1929   the  flcrr  of  csssages  furnished'  G-2  had  dwindled- to    a  mere 
trickle.     In  about  the  year  1926.  the  intercept  stations  of  the  Coast  Guard 
*  •     *  *  * 
submitted  to  ne  informally  a  f  e*  radio  intercepts  of  what  appeared  to  be 
*  •  ■ 
Japanese  code  messages,  but' these  -Fiere  only  sporadic  occasional  intercepts 
•     ■  .  ■      - 
of  transmissions  in  the  Far  East/    TheyWe  usually  fragmentary  and 
afforded  ven'  do  or 'material.     Such   as  they  *ere,   bovver,    these   occasional   . 
» -  -  •  •  '{•.'■' 
messages  were -turned  o^er  to  0-2."    There  4re,  '  therefore,    clear  indications 
that,  if  a  serious  attempt  -sere  made  to   obtain  this  material  better   copy 
could  be  obtained.     Ec^ever,  no  pressure  t^s  brought  on  the  Signal   Corps 
» -  #  • 
to  set  up  a  regular  intercept"  service,    and  aside  from  a  feirr  relatively  _ 
•*eak  efforts  to  establish  an  intercept  station  in  the  Philippine  Department 
there  tt*3  no  real  intercept  service  until  after  1929,  when  responsibility 
f  =r  crrptanalysia  Tras  transferred  from  G-2  to  the  Signal  Corp3 .     Hott   this 
OS
c2L^.e   to  pass  '•    -:1  soon  be  detailed. 
5.     As  indicated  in  Par.  3  above,    the  $100,000  appropriation  set 
*"  ...  •  »-    , 
np  in  1919  took  care  of  the  bureau  Tor  the  FX  1920,   that  is  Trcn 
July  1,  1919  to   June  30,   1920,.  but '7*1  en  in  June  1920  it  cane  tine  to 
set  up  the  budget  for  TI  1921,  -the  purse  strings  -*ere  already  beginning 
to  ba  pulled  tighter.     Hairy  or  the   "old-timers"  in  G-2  had  gone   to  other 
assignments;   those  remaining  and  the  newcomers  in  G-2  apparently  had 
neither  the  background  nor  the  influence  to  press  the  natter.     The 
•       •    -  -  '•:■  '.;••• 
appropriation  tss  at  once,  cut  in  half ,    that  is,   to   $50,000,  of  which   the 
State  Department  share  •  still  continued  'to  be  $40,000.      The  theory  -i*as, 
evidently,    that  since   the'fork  done  by  the  bureau'Ttas  primarily,   if  not  solely, 
for  and  of   interest  to   the  State  Department,    all  or  nearly  all  of    the  funds 
should  be  provided  by  that  department.     The  ttar  D&partnent  overlooked  some 
•v. 
very  imoortan-t  points  in  the  situation — points  T«hich  Trill  be  brought  up 
and  enphasizad  later  in  this  summary.      -4i  order  not  to  break  the   continuity 
of  the  history  at  this  poin£,   it  Trill  be  stated  merely  that  year  by  year 
the  funds  provided  for   the  maintenance   and  operation  of  the  bureau  became 
mere   and  more    constricted  until  by  the   autumn  of  1929   the  f  blla*ing  tabula- 
tion, based  upon  a  letter  dated  July  17,   1929  from  !!ajor  0.  S.  Albright,    G-2 
to  the   Chief  Signal  Officer  (General  Gibb3),    sho~s  honr  the   bureau  had 
been  oermitted  to   deteriorate:  " 
■ 
Rent                               '  03,000 
Books, postage, travel,  transportation, misc.  2,370 
Personnel:     1  Chief   (Yardley)  7,500 
1  Code  b.  ciperoexpsrt  3,660 
1  translator  (Jap)  3,750
1  secretary  l,£CO 
'*.••••       1  clerk-typist    -  1,600  ,-     • 
■  .-.'.       '■      ;,":•»  ;:,1  clerk-typist  *  1,320  .        .';.•'- 
•  I'  '''''•'-    .    •."'■■'•Vv\-'  /Total         $25,000  ":  T 
In  the  foregoing  total  appropriation  of  $25,000  the  State   Department 
furnished  $15,000,  thenar  l^sp'artaent  $10,000.      The   activities  of   the 
bureau  had  by  this  -time  become  .so  "redded  that  it  rras   sending  in   only 
occasicaaX  translations  of  a"f  err  Japanese  dip}  onatic 
•*     '  ••■*':••:.'•*•'....  .  • 
nsssages."    #o  research  "rrhatsocver  jras  conducted  in  cryptanalyso.  s ;     uuere 
Trare  no  training  activities,   no  intercept,   no   cod9   compilation,    no  •    ' 
secret  ink  Trark.     The  pesrsonnel' consisted  of    six  persons   all   told  and 
.    .  .  -.  . 
*"  •  ■   .*■  .....*. 
37^  of  the  total  payroll  Trent  to  one  nan,   tco*  had  little  -interest 
other  than  to  continue  as  long  as  possible  to  maintain- himself  in   the 
*  *  *    *     • 
sinecure   into  -fchich  he  had  been  permitted  to   establish  himself .  *  
• 
6  '.     In  the   summer ' of*  19 2y  Major  0.  S.   Albright,   Signal  Corps  ,  had 
been  assigned  to  G-2  to   serve  on  the  Staff  of  the   A.   C.   of  S.,   S-2  to 
supervise  and  coordinate    such  of  the  cryptographic  and  cryptanalytic 
activities  of  the  TTar  Department  as  "remained.      After  a  careful  study 
of  the  situation  and  an  appraisal  of  ho-rr  the  existing  cryptanalytic 
bureau  ^ras  and  tos  not  serving  the  functions  for  "*hich  it  had  been 
intended,   Hajor  .Albright  came   to   the  conclusion  that  the  entire   picture 
-was  -nrong.     Ke  felt  that  the  product  (I1  bulletin")   Tthicfa  the  bureau 
*.7as  turning  out  every  feir  days  iras  indeed  of  primary  interest  for  its 
o*nn  sake  to  the  State  Department  and  while  the  Mar  Department  had 
a  i 
-7-
» •        t 
nrly  a  secondary  interest  In   .the    "bulletin"  for  the  information  i 
gave,   the  primary  interest  of  Vie  Tfar  Department  in  cryptanalytLc 
studies  in  teace  tine  i*as   that  it  "*as  intended  to  provide  a  nsans    #      r 
for  training  of  personnel  for  jsaediate  war-tiae  effectiveness • 
•  * 
liaoor  ilbright  found  that  not;only  xra.3  there  very  little  if  any 
training  being  conducted  hut  also  that  all  the  persons  in  the 
bureau,   except  far  one  clerk  receiving  the  least  pay,  were   "getting 
along  in  years0— their  potential  usefulness  for  possible  var  "tiac 
service  practically  nil.      Moreover,    the'  bureau  *as  norr  hidden  a^ay  • 
in  a  ouhlic  office  building  in  Heir  *ork  (under  cover  of   the   °Code  ;_  .. 
Compilation  Cospajrj*  for  alleged  purposes  of   security)    and  far 
a-^ay  fraz  direct  supervision  of  anybody  connected  vrith  the   v«ar 
Eenart-ent  or  of  G-2-^so  that  nobody  knew  Trhat  ?.as  going  on,  hoir.. 
the   office  iras  adninistered,    etc.     Tardley  c-vot^d  nost  of  his   tise 
to   tic  or  thrse  private  enterprises   (conmercial  cede  compilation, 
real  estate  brokerage,    consultant  in  code  natters  to  commercial 
fims)    and  he  ^3  having  a  "field  day1'  at  Government  expense.    -There 
^tere,   in  addition,    several  other  "^eighty  factors  ^hich   motivated 
Jlajor  Albright  in  preparing  a  G-2  study  recommending  that 
the  bureau  be  taken  out  of   G-2  and  its  functions   tranif  erred  to   the 
Signal  Corps,   chief  aaor.g  -which.  *as  the  desirability,  if  not  necessity,    of 
placing  aTL  -cryptographic  and  cryptanalyii c  "nork  of  the  !7ar  Departasnt  unde: 
one  agency,   rather   than  distributing  it  anong  'three  (The  Adjutant  General, 
for  printing,   storage,  issue,    and  accounting  of  codes;   The  Chief  Signal 
Officer,   for  compiling  codes  and  ciphers;   Military  Intelligence  for 
solution  of  codes  and  ciphers).     \  cenorandum  on  the  s  ane  subject  "was 
-8-
t---.>-  -"-a    ^y   j  ivrju,       Ti-«    «« .    £••    "i— Si —      -      ...    •' r.^.    *  _— —a    < — a    ~..  <=._  _j_...a  . 
Section  cf  G-2,    ar.d   is.  also  attached  '.-"-to  The   reasons  - 
=riven   in  I^ajor  Albright's   study-  and  in  Col.   Wilson's  ne=orandinn  were* -:,':..  ..  . 
apparently-  deened.  valid "by  "the- Chief  of  Staff,    for-  Kajcr  Albright1  s  -  -•*:      • "- . 
recocsendiiticiis  were . appro ved  in  April  1929   and  steps  ^ere   soon   initiated 
by  G-2  and  the  Chief  Signal  Officer  to  put  them   into  effect.      The   re com-      . 
Dendations   carried  with  -£hem  cerely  the  wording  of  a  changes   to  be   made   in 
AR  105-5,   specifying  the  duties   of.  the  Chief  Signal  Officer^  these ^  duties   - 
being  enlarged  to   include  the  printing,    stcrage,    distribution,    and  account- 
ing  of  cede 3  and  " in.  time   or  war  the -.interception  of  enemy'radio   apd_wire 
traffic,   the  genionietric  location  of.eneiny  radio  stations,    the   scluticri^of 
intercepted  enemy  code   and  cipher  messages;   and  laboratory  arrangements^ ;  ^    . 
.  .  •  .  •  —  -  .•••     •».*•■---  .  .    .__     _ .-»-  •- 
for  the  employment  and  detection  of 'secret   inks."    •  -.  •■ '  ~  z  '?  "   -/ 
7.     Eowever,   before  anything  could  be   dene  actually  to*  transfer -the-- 
"activity  a  new  and  very  disturbing  factor   entered   into  the  picture.       In 
jirch  1929  a  new  administration  took  office,    in  which  1-r.   StiT.scn  became 
Secretary  of  State."'    For.  i:  few  "-weeks  no  "bulletins11    from  the   cryptanalytic 
*  *  +,"      .;"■  *  *    * •  _j   v^    ..."  " 
bureau  in  Hew  Tork  T/ere  given,  hir.*,'  the  intention  being  to  "go  slow"-  uriLil 
he  had  beccr.e  sufficiently  well. oriented  in  the  duties  of  his  office  to  • 
•  .---■*.         —    .  \  ■  "         ■  ■  "     *  '.■'''?'■'• 
"•':>;/  *?r'.'  '-''■•rr*i'>:  ■'.'■'  •'  •   •;-:.:^.      •: 
-irarrant  bringing  to"  his  "attention  the  highly  secret  activities   engaged  in   • 
by  T7ar  and  State  Departments  by'  ceais   of  funds   provided  in  large    part  by      - 
-  -    -       t-  .      •  s  ' 
-■/■- 
■  'i'-'<i>- 
'  the  latter  Department.  r:-'Early  in  Hay .1929,  however,  the  tir.e  was  deemed 
•"  *       '•?        ■  '.  """•  
' 
'ripe  for  this  measure/,  but  it  ras  irith  scroe  trepidation  that  a  few  trans - 
'  lations  of  Japanese  code  nessages  were  placed  on  Ur.  Stiirson- s  desk.   Eis 
reactich  was  violent  and  his  action  drastic.  Upon  learning  how  the  material 
was  obtained,  he  characterized  the  activity  as  being  highly  unethical  and 
-9-  »
e 
v 
jdtfcl^-cd  that  it  -sould  cease  imrediatglv,  so  far  es  the  State  Ddp-rtment 
vras  concerned.   To  put  teeth  into  his  decision  he  gave  instructions  that 
the  necessary  funds  of  the  State  Department  would  be  withdrawn  dt  once* 
It  772LS  only  after  considerable  pressure  by  the  £.  C.  of  S.,  G-2'tbat  he 
—as  dissuaded  from  this  ccu^rse,  which  might  have  had  serious  consequences 
by  suddenly  throwing  cut  of  employment  the  six  people  concerned,  at  a.  tine 
of  severe   economic  depression.  For  these  workers  had  only  special  training 
in  a  field  wholely  useless  to  commercial,  industrial,  shipping  or  banking 
firms,  or  to  other  government  departments,  or  to  educational  institutions. 
•  *       »  • 
An  arrangement  was  therefore  made  to  close  the  office  immediately  so- far 
.  -  .  *.—   „••*-.  .-  .*.-'--  ••*-' 
as  active  "work  was  concerned  but  to  keep  the  personnel  on  the  payroll  for 
■  .  *  .  -       * 
« 
the  tire  necessary  to  wind  up  affairs,  and  get  the  files  in  shape  ready 
to  turn  over  to  the  Signal-Corps 1  •  This  took  a  couple  cf  months r.  and  at  the. 
end  of  Jure  1929  the  employees  were  given  three  months  r  pay  "in  advance" 
in  a  lur.p  sm;  to  tide  then  over  the  period  in  which  they  might  be  -jobless. 
Since  they  had  been  paid  out  of  "confidential  funds"  they  had  no  civil  . 
« 
service  status  and  no  retirement  benefits;  moreover,  they  trere  ineligible 
for  transfer  to  other  Government  positions.   The  danger  was,  of  course, 
--.".*■  -t 
that  their  dissatisfaction  with  what  must  have  appeared  to  then  as  high- 
handed, arbitrary  action  en  the- part  of  a  new  official,  and  that  their-.'    ; 
helplessness  in  the  serious  personal  situation  created  for  their,  by  his:-.  • 
drastic- action  eight  lead. them  to  indiscretions  which  might  prove  most 
enbarrassing  to  the  Government  and  have  serious  consequences  upon  national 
defense.   It  turned  cut  that  whatever  their  private  feelings,  aU  the  dis- 
charged personnel,  except  the  chief  beneficiary  of  the  old  regime,  remained 
Icyal.  and  did  the  best  they  could  to  find  jobs.
^, 
.     .       6.       In   October   1929    I  V3.s    sent   to   Sow  York  to    take    over  the   bc^iod  up 
records    *M    files  and   to    oversee-  their    transportation  to    Tr'ashingtcn.      The 
cryptanalytic    activities,,  re  search,  .and   training   now  being  under  tho_Chief 
Signal  Officer,    steps   were  takoa  to- 'reorganize   the  bureau  and  its  -rork.-  ;  _  ^ 
•   *.-—     -   .  -  .  •     .  •  *^  *  *  *  •  *  * . 
The  funds   available  were,-  of  course,.  very  slin— -only  ?<hat    retrained,  of  the 
Tfar  I>epartiaent  Ts    contribution  of .  $10,0OO  for   the  :FY  1930  was  available, 
-  -  -  -  •  •  (_•■-••. 
because  the   remainder  of  the    State  "Department  «s    ztA-re   of  £15, COO r'' as   indi- 
cated above,    had  already  been  withdrawn  by  the   State   Department.      An  offer 
of   employment  was  nade   to   llrs,    TTilson,   the    Japanese   eicpert   with   Tardley,"but 
sho  was   unable   to    accept,*  since    it   involved  moving  to  TTashington  and   she 
had  a  husband   and  child  in  Hew.  York. '.  Another  'employee,    Hr,   .Victor  YTeisskopf, 
had  a  business    in  New  York   and  refused  to   2075  to  "rTashington.      Tr*e>  fenaie 
clerical   employees  wera.deened  unsuitable   for    our  purposes    and,   sorecver,  "    . 
•  -'*•...  •      •  '  y     -  .        •*.■"•'_-- 
ha  Ting   no   Civil   Service   status    they   could  not   be   t^lcen.    en  by  transfer. 
An  of  far   of  temporary  employment   -sols  na.de   tc   Yardlev  buf'he    refused   the 
tender.       Instead,"  he    proceededt   secretly   to    -pre^rc  a  book:  which  first 
appeared  in   the  form,    of  a2*ticles    in  the    Saturday  Evening   Post   and  which    V.T  _ 
in  much   expanded  form   later  appeared  under   the   title    "The  American  31ack 
-  * .  .*  "".  ■  *  **  "  •  * 
r-Uo^%^T-.w      xhe  book  and   articles   were  highly  sensational  and  nade    damaging 
disclosures-,  concerning  the   most    secret  activities   ever    conducted  by   the 
■  •  •  7  •  -   .  *  •*  •  ■ 
-■.«•.-  •  .  •■"-.•"■  ■     •  . 
Government.  ".^Before  the   appearance   of   the   articles   and  book,   however,    he 
•  ■•:•"•.-  ;  •::'"'-    .  '  / 
had  taken  certain  stems    to   protect .hins elf  fron   possible   prosecution   for 
his    disclosures,   aaong  which  was   to- resign  his    cennission   as   liajcr    in   the 
Military   Intslligenoe  Reserve.       Of   course,    had  the   authorities    understood 
the  real   purpose   of  his    resignation  they  night   have   prevented  it   so    as    to 
retain   sooe   hold   on  his.      But   being   in   ignorance   of  the    real  notives   and 
deening  it   just  an  act   of    pique,    tne   resignation  v/as   accepted.      The   unTortunato
ro_-  ..-...,-,  cs    attsr.d?-nt  irocn   the   lublicati rr.   cf.  the   bcc.<  j-^y;    I  .!_*  iOi-^XiLk^on 
r. •-*  -  c  5r. .      S  uf  f  i ce    it  to  jar  tia 
orrr  precarious  relations  with  Ja^aa  -ere  brought  to  • 
a  boiling  point  when  about  30,000  copies  of  the  Japanese  translation  of  The 
American  Black  Chamber  were  3oid  in  Tokyo  in  a  period  of  less  than  a  month, 
(perhaps  the  book  was  subsidized  07  the  Japanese  Government  itself.).  The 
bad  oc  >r  into  which  all  cryptanalysts  and  cryptanalytic  activities  fell,  as 
a  result -of  the  difficulties  which  the  publicity  g^Lven  the  iratter  "by  Tardley's 
disclosures  occasioned  high  government  officials,  had  a  bad  effect  upon,  the 
attempted  reorganisation  cf  the  cryptanalytic  bureau  by  the  Chief  Signal  ;    -     • 
*  i 
Officer.      Funds   were  hard  to  get,    and   State  Depar-bnent   support  ?«.s    laclriDg,. 
if   not    in   the   other  direction  altogether.      The  rscst   serious    consequences 
cf   Yardley's    disclosures,    hcTrcver,*   cssie   10  years   later  and^thsir   effects 
can   hardly  be    estimated.      I  refer  here  to   the    jolt  vdiich   his   book  s*^ 
the   Japanese   cryptographers,   leading  ^^  out   **  th&Lr   oli3srul   iterance 
and  causing  the*  to    develop  really  complex  r.ethods  which   are   nc^   giving  us 
rany  difficulties.      Tbe    same    is    true   probably  as    resets,    the    C-erran.  and 
,  Italian  cryptographers  —  their   education  has  been  entirely  at  Uncle    Sa-'s 
exwnao   and   the   final   ccnsecuocces   cf  Y&rdley's   vork  can  not  yet  be   foreseen. 
They   mav  -^oll   turn    out   to  be  disastrous*  /  1    • 
* 
9*      Hc-jrover5    the   Chief  Signal   Cfficer   proceeded,    energetically  as 
possible  under   the-  circuastancos ,    to   carry   out   the  mission   assigned  hin. 
The    coda  and    ciphor   solving   section  ^as   placed  under  the  Ti'ar   Plans    and 
Training   rivisicc   since   the   compilation  section  wis   already  there.      A.  rather 
iatalla**    ciractivo   *r.ich   vas    pra-p/Lrod  by  G-2   and    aooroved  by  the   Secretary 
-12-
O" 
of  ^ar  ^Exhibit   4/*   bccane  -the    guiding    plan   of    t:>-    r  .-..-rganized   sorvico, 
.-nhioh  ws-s    now  nanod  tie    Signal    Intelligence   Ser-vi  ::.       I  ^    personnel-   con- 
•     *  ■•••.._;..■—■•..  ..  1  ■       -    f  .  •        - 
sisting   of  rr/self  and.  ono   or  t-so^olcrka    soon,  ws_s   au^r^ed   07  a.  hair,  dozen- 
aora   employees.      Training  literature  and   courses  Trere   prepared  and   put 
into   good   -usage  at  .once.     A  great   deal  -rras    dene    in  expanding  our    cryptographic 
work  also  ,   by  preparing  rvsezTe   editions    of   existing   codes,    compiling  new 
codes   and    ciphers,    developing  cipher-  apparatos,'  and   so    on.      Cryp banal ytio 
work  was   put   on  a  firn'basis   of  /research   and  training,    vrith  emphasis    on   th^e 
lattsrr    for   there   existed  no   intercept   sor,'i«   2nd   the    raw  notorial   couM 
not  "be    obtained 
1  nence  an    intercept   service  - 
I  •  V..  .-.-        : 
new  ^s    organised,  and  grew  very   slowly.      All  phasBs    of   signal-intelliger.ee 
Ksro   unified  under   one    service   and'taken  .unier .  study    and    action.      Lloreover, 
\*  -    -t-'--.. .-.-..  ......  . 
cooperation  "=it  h  trie   Favy  in  the  work  ws.s    also    initiated.      How  the    activity 
h-.s    expanded   since    tnsn  recuires   no    comment    at  this    time.      However,    a   few 
words   about   rolsLticns   Kith  ths.-lTavy  are   pertinent. 
10,      Cr-rstanalytic   activities    in   our   It^vy  Departmerrt  werG   practically 
•    •      »■  -  J  ••*  *******  • 
ncn-existent  until   after   the   close,  of   the    last  war, 'during  whioh-,   as   was 
noted  above,   T^aterar  problems   they  had   in  cryptanalysis    were  referred   to 
LU-3-      3ut    in  1921  the   Kavy,   recognising   the    inpertant    role  which   crypt  - 
analysis   was  bound   to  play    in  future,   hagan  building  up   a   large   unit    in 
the   h?avy   Department,  with  echelcns    afloat*-    '"ho  re&s    the    Amy  placed    c=i-pha.s±s 
upon   civilian   training,   the   !Iavy  placed  emphasis  upon  officer  training;    and 
for    each  dollar  tie  Amy  was  able   to    obtain  for   cryptanaiytic   and    crypto— 
graphic  work  the   Ifavy  tos   able   to   obtain   threo   to   five   dollars,   until  by
^939*    ^s    Czr  as    cocc&rsad  numbers    of    officers   and   civilian    personnel 
emga^od   la  those  activities,    amount  of    oquipaent   on  hand,    and   funds 
available    fgr    research,." the -Navy  had  considerably -outstripped   tho  Arzzy.  ■    .  '  1^ 
However,    it  say  "bo   said,   with   some'  justifiable  pride  perhaps,    that  -rrhile         "  •   - 
they  -xere  ahead  of  us   in  quantity  "we  -were  ahead  in   quality,    for  all   the 
iraocrtant   developments   in  "both  the    crypto  graphic  and  the  cryptanalyfcic 
fields  must  be   credited  to  Army  personnel*     At  first,   cooperation  bct-».-een 
"the  tr^>    services  "was    intermittent   and   at  tiaes   very   indif ferent-- -the    uxual  .     '     _: 
mutual    roscic ions*  and   jealousies    pervaded  cur   relationships.      But,    J-appily,  .. 
Cor    tho    cast  threo;to  "five    years    cooperation  has  been  nubh  more  -wholehearted,   -•     _-_ 
•with  the   result    that   it  may  new  be   said  Tvithout "reserve -that, 'as    regards-      .      .*'-"--; 
their    crvoto^rashic   and   cryptanalytio    activities,    cooperation  bet-re  en  the"-  ._---.-  ..•_     •. 
Army  and   Savy  is    so   close,  as"  to   be"  the    sa=e   as   though  they  ~e re.  under;- one 
head.      This,    of   course,-  is    as    it   should  be  and  must  be    in   order  to   r.ain  the        ;        -%  \ 
desired  result   frcco  such  activities.  „  _  '    ■■    ^..  ..  /.. 
11.      -It  ~ould   be   of  utmost    value   to   the  timing   of  this  war   if  tha  ■ 
:  •     •.-;::.-.:  .-    -■  .    -"  "••■••  ■   "     •'  •     ;•■:' 
Government  -cere   nenr  in  a  position  to    read  the    codes   and  ciphers    of   all    the 
foreign   peters   Trhose   actions   and   probable   intentions   are   of   interest  and  , 
importance   In   oca:  prosecution  of    the  tot.      It   could  have  b6en  in  this    f or-tu- 
nate   position  had   it   given   to   cryptanalytic  studies   the  attention   nhlch   it  '*••.- 
deserves    during   peacetime    and- had  provided  funds   for   their    continuity    on 
a   scale   sufficient  for  the   purpose  for  r;hich  they  are   intended.      The  carter 
can  be   summarized  very  aucclnctly   in  this    statement:      Actual   or   physical 
^arl'are   is    int  ermittant?but  mental,    that  is,- crypt  analytic   warfare   is    con- 
tinuous.     It  is  vital   that   this   be  understood  ay  those  who    exorcise   tho   control 
rrer  such  studies, and  a  fe^  -rrords  on  this  point  are   given  in  the  naz^:  paragraph. 
Ik
12.'     There  are   four  basic  reasons  -?.hy  continuity  in   crypt  analytic 
studies  is  so  important. /'Ihey  mil  be    discussed  briefly  undsr   separate 
subparagraphs-  -..••-^i;-"'.  •'.•".    •  ..:'\  r  /:  ''**.'  .         - 
•  •■•.'....  . v*     ■  .  "    ■  -J.   •  ■        - 
•\(1)     It  aiist  be  realized  that  cryptanalytic  activities  have 
no  counterpart  in  civil  life.      Therefore,    on  the  outbreak  of  ".Tar  there 
is  no  important  source  iron  ?jhich  trained,    experienced  personnel   can. 
be.dra-nn  for  iimediate  usefulness.     Since  skill  in  crypt  analysis    can 
hardly  be  developed  in  a  short   tine  and  cryptanalytic  units  capable   of 
producing  quick  results  can  .not  be  improvised  in  a  hurry,    unless   there 
is  a  good-sized  nucleus  of  such  trained  and' experienced  personnel  no 
good  cryptanalytic  operations   can  be  conducted  in   the   early- phases  of   a. 
■     •■■■  .-..•«  •  "     *  . 
-*ar,    that  is,   just  at  the  tine  *hen  results  can  usually  be  obtained  nost 
easily  and  rhen  such, results  are   extremely  important.     Moreover,   it  is   in 
the  upT?er  strata  of   cryptanalytic  brains  that  continuity  in  studies   is 
sost  inportant.     It  is  possible,    under  pressure,    to  obtain  large  numbers 
of  recruits  of  high  intelligence  from   colleges  and  universities,    but 
until   they  have  had  at  least  five  years   actual  experience   and  training 
the7  are  Tholly  unprepared  to  attack  the  most  difficult  problems 
encountered  in  nod  em,    up-to-date  secret  ccnnunic  aticns .      Consider   the 
present  npurplew  systen,   for  example.      It  required  alucst   tro  years  of 
concentrated  effort  to   break  doTra  this    systen  and  it  *.7as  indeed  fortunate 
that  this  had  been  accomplished  by  September  1939.     If  ^e  had  not  been  able 
to   start  tins   study  until  Dec  saber  1941  it  vould  not  have  been  possible    to 
read  those  messages  short  of  txo  years'    study,  if  at  all,    because   the 
problec  is  so   difficult  to  begin  -with  and  moreover  the  volune  of   traffic 
available  for  analysis   -rould  be    so.  snail  compared  to  xhat  it  tsis  before 
Decenber  7,  1941.     Moreover,   if  -*e  did  not  have  the  tno  years1    experience  ^  ^
•J--CM 
.    ;.\~j*&  ^uld'be   ex-trwal/scre   difficult,    if   it    could  bo  • 
done    :c   O  I   b-fcre   too   late   to   bo   useful.      Acnin,    our   F»eat   difficulties^ 
*ith    Japanese"  military  syrbesa'aro"  in  largo    F"^   occasioned  by  our    failure 
to   devote  .sufficient    study  .to  those   alters    ever   the    past  fenr  years;    but 
it  crust  bo    realised  that    iinitcti ctus    en   funds   and   personnel  nads    such;      ." 
' —  ."  •■..-•• 
studies    impossible   because    with  the  snail    staff    of  SIS   personnel    fron   1930 
to   1940   it  'r&s  all   that   this    personnel    could    do   to   keep   abreast   of   the 
"Japanese   diplomatic  systems,   for  -shich.   G-Z  ^s    clanoring. 
"■•'•"  (2 )""  Continuity  in  cryptannlytic    studies   also    requires    continuity 
■■•••■         •  "'  •-       ■      ■     .    •         .-•       ••  ..t.t    ..    ■        v:-'  -    .  ".-     >    ''- 
«»,"  ^tercoot'^oric,   f or  '-crithou-t  the-basic   raw  material   no   studies   at   all    can 
be   conducted  on  actual   traffic    and   purely  theoretical  studies   ray  be    far    off 
» -     .  ...-»».»•   •„_         «  -  »  «  ""■**"— 
.  »I_J|[-  »  ^^  » *^^ .■  ^ ^  ~. r       ■-      ..^        .  -  *     —  .«.» 
the  real   target  altogether',  '.no  natter _  hov. successful,     .Continuity   in    inter- 
cept rrork  means/ of    course/'that    the    ecu  ipse  at    and   personnel    cf    the^ inter- ^ 
ceot    service   have 'to  be  maintained  and  thus    there   are  available   on  the   out- 
break   of  -*ar,    for    immediate,   useful  work.      Unless    cryptanalytic    studies    are 
#  .  •  *       ' 
pursued  the  need  for  the  %minteaance    of   adequate   intercept   stations    soon 
disappears,   for    it   presently  begins   to    look   as    though  the  xork   done  by  the 
intercept   oersonnel    is   useless    and  funds   for  this   activity  are  TfithdraTni. 
(3)      Continuity  in   cryptanalytic    studies    is    necessary  because'-    - 
cryptanalysis    Is   not   a   static   science   or   art — it  must  progress   as   the ;  r  '■•. 
cryptographic  science  progresses.      In  the    past  far  y^ars    great  strides   have 
been  made   la  the   latter,    especially  as   regards    the   development    of    complex 
electrical    and  mechanical    cryptographic    devices    and  machinery.      Moreover,    - 
the   cryntanalytic  ^ork  done    during   the   last  "*ar  has  been  publicised.      As 
alluded  to   above,    "The   American    Black  Chamber"    in  particular  has    exercised 
a  -rride   influence   in  putting   certain  nations   -*hich  had  been   cuite   backr.-ard 
in  their    cryptography  en   their    ruard,    causing   then  to   tr.-t-o    in   studies   and 
t 
-lSn  * 
1(
v_- 
d^-r^lo^26nts    for    the   inprovenont •  of    their    codes    arid    ciph=»-2..      The    resvSz  is 
that    the    cryo  to  graph  io    systeas    of   those   nations   have*  boccse    sore   andjnor©   . 
...      •  ---■*...-  -;,-._-     -  ■.•-•-.v/i'-V/rV.  -    •■:    •"-.  '-  ■•■;v£:->;'<. 
difficult  to  nsalyzo.      3ut  it 'is  ""important  to   noto   that   improvement    in'r;.'.  '"' 
cryptography  ustja lly  cones   in  .successive   snail  stops,   and  if  tho    opposing 
cryptanalyst   enn  "keep   in  step  -.dth  these   progressive  increases    in   cempicxity 
he  can,   as   a  rule,  "be   in"  a  position  to  road  the   new  systcsas   almost  as  fast 
as  they  are   put   into   usage,   but    if   there    is   much   of  a   lag   in   the    cryptanalys  is 
•  ■*.■»--  .  .  .     - 
tho   cryptography  gets   too  far  ahead  for  the ' cryptanalyst   to    catch   up    quickly. 
(4)     Finally,   it  may  be  noted. that   continuity   in   crypt  analytic 
studies  brings    Inprovenents    in  our  "own  'cryptographic   systeros   and  methods, 
-without  -which  to  say  be  lulled  into    a  false,  sense    of,  security  and    regain 
blissfully  ignorant   of   what  soce   foreign  crypt  ana  lytic   bureau  nay  be   doing 
Tilth   our  supposedly  secret  nsssages,     .It  can  bo  sai_d  that    the    greatest -bloYr 
that   can  be   dealt    to   signal    intelligence  -work  is   lops    of   continuity  in 
^*  *mwhhmm_^        mb^mv        — — ' i     ■  mill—  «^M ■— »— ^ 
cryotanalytio    studies,    for   ii;  caa^s  that  a   disastrous   blo"?r  has   been   delivered 
to    technical    efficiency  of  both   the    cryptographic   and  cryptanalytic    services 
for  -rar-tine    functioning.
^' 
>: 
14.      F?PHlly,    if  -ce  are  not   to   repeat   ooce  core   the  mistakes  made 
a-t  the    close    of   t2ae   last  Trar   in   respect- to   signal   int ell i gene e "work,    every 
erfor*t   should   be  rs.de  to    pla.ee   the    present   or gani z a tipn   on   the   cost    fli-a., 
permanent   foundation  it  is   possible  to   erect.      The    service    should   not  be 
considered  as  merely  an  appendage  to   the   functions   performed  by  -Zta    Sigr^l 
Corps    only  in   time    of  t.^lt  but  as  a  permanent   service   that   operates    on  a 
large    scale   in  peace   time   as  v.'oll  as   in  tot   time. 
June   29,    1942. 
Allies   F.    Friedman, 
aead  Cryptanalyst.