THIRD SEMI-ANNUAL REPORT OF IAC AD HOC COMMITTEE ON EXCHANGES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61-00391R000100180039-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 9, 2016
• Document Release Date: July 13, 1998
• Sequence Number: 39
• Publication Date: February 11, 1958
• Content Type: PERRPT

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I N T E L L I G E N C E A D V I S O R Y C O M M I T T E E
Third Semi-Annual Report of
IAC Ad Hoc Committee on Exchanges
The attached Third Semi-Annual Report of the IAC Ad Hoc
Committee on Exchanges, dated 11 February 1958, will be placed
on the agenda of an early IAC meeting, for noting,
25X1A9a
Secretary
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Third Semi-Annual Report of
IAC Ad Hoc Committee on Exchanges
1. Authorization
The LAG Ad Hoc Committee on Exchanges was established pursuant
to LAG action of 28 February 1956, for the purpose of maximizing the
intelligence yield from East-West delegation exchanges. IAG-D-103
has served as a guide and general terms of reference.
II. Organization
The Committee consists of representatives from the Departments
of State, Army, Navy, Air Force, the Joint Staff, CIA, and AEC. USIA
also attends on a regular basis. CIA provides the Chairman and the
Secretariat. The Committee does not have a subcommittee structure
but seeks the advice of existing substantive committees or subcommittees
of IAG or appoints ad hoc groups for cases in which no extant group is
competent.
111. Aims and Activities
This report covers the activities of the Committee during the
period 1 June 1957 to 31 January 1958. As in the past, the Committee's
activity has been largely dependent on the over-all progress of ex-
changes with the USSR and the Satellites. The principal development
in this period has been the negotiations conducted on the US side by
Ambassador Lacy, culminating in the agreement signed 27 January
1958. Prior to these negotiations, there was discussion, initiated
by the Soviets, of the possibility of exchange visits extending for
periods of three-six months, substantially longer than past practice;
in the industrial field, however, these negotiations have led to no
immediate result.
During the reporting period, actual exchange activity was not
great, with many pending exchanges held in abeyance during the
high-level negotiations with the Soviets. A total of only six exchanges
were completed during the reporting period, of which three were with
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In this situation, the principal activities of the Committee have
been as follows:
a. Advising the Department of State on the intelligence
aspects of exchanges and exchange proposals. In the early
stage of the high--level negotiations, the Soviets presented a
long list of exchange proposals in economic, scientific, and
technical fields. In large part, these subjects had been
previously considered by the Committee, which reviewed and
supplemented previous work and provided support for the
State Department on this area of the talks. This support has
continued throughout the negotiations, with the Committee
also submitting priority proposals for US initiative, again
from previously considered projects. Although only three
of the projects reviewed have been specifically covered by
the Agreement (steel, iron ore, and plastics), it is antici-
pated that other industrial projects will materialize over the
next year.
Earlier, at the time of the Soviet proposal of longer
term exchange visits, the Committee reviewed the 14
fields suggested by the Soviets and provided customary
estimates of net intelligence advantage, together with sug-
gestions of four additional fields for US initiative.
Apart from proposals originating via the negotiations,
a number of private US groups and institutions have come
forward during the reporting period with proposals involving
exchanges, and these have been similarly reviewed by the
Committee.
In the aggregate, apart from updating previous reviews,
the Committee has assessed from the intelligence stand-
point and advised the Department of State concerning 10
short-term exchanges, and 14 long-term exchanges, and
has under consideration at the present time seven proposals
initiated by private US groups.
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b. Suggesting exchange proposals for US initiative.
Apart from the four priority long-term proposals mentioned
above and revising and assigning priority to several pro-
posals previously submitted, the Committee has not been
active in this area in view of the substantial backlog already
available.
co Assisting in the carrying out of exchanges. In this
field, Committee activity has increased noticeably. The
technical consultants for 13 different exchange proposal fields
have provided support for the Department of State during the
reporting period. In some cases the support has required
several conferences with the US industrial group involved,
both alone and in company with the Department of State repre-
sentatives. In this way the current developments in intelli-
gence constantly are brought to bear on the negotiations in
the various fields. This is not to say that the intelligence
suggestions are always carried out, since on occasion private
or policy aims are overriding.
d. Coordinating intelligence interest and activities.
Since exchange activity was not great during this period, the
mechanisms for coordination in briefing or debriefing were
not given a true test. In most cases, however, performance
lends confidence to the belief that the procedures are funda-
mentally sound.
e. Evaluating the exchange program. In response to
an informal request from the Department of State, the
Committee has prepared an evaluation of the intelligence
results of the exchange program as conducted since
February 1956, when the Committee was created by the
IAC. In effect, this evaluation- -attached hereto as Annex
A- -constitutes an updating of IAC -D -103, the original IAC
assessment of the exchange problem and prospects. In
submitting it, the Committee wishes to emphasize the interim
and incomplete nature of the conclusions reached regarding
the total exchange program, in the light of the fact that the
conduct of exchanges with the USSR over these two years
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has been spasmodic and has not included as yet any sub-
stantial number of the projects to which the Committee
has devoted most of its attention.
IV. Prospects and Emerging Problems
The agreement signed with the Soviets on 27 January 1958 gives
clear promise of a substantial increase in exchange activity. This is
particularly true of scientific areas and the area of education with
which this Committee has not hitherto been substantially concerned.
A number of specific projects in agriculture and medicine have been
agreed to. In other technical and industrial areas few specific
projects were approved. However, as indicated above, additional
projects are expected to develop during the year.
With reference to the funding problem--extensively discussed in
past reports of the Committee--developments during the reporting
period gave promise of great improvement. It now appears virtually
certain that substantially increased funds will be available both from
within the IAC and from private companies and organizations, which
have shown much greater interest in observing Soviet developments
than in the past.
In the aggregate, the prospect seems far more clear than at any
time in the past for a marked expansion in exchange activity over the
next year. Through the activities of its members, technical con-
sultants and secretariat, the Committee is in constant touch with
developments, and stands ready to provide the support necessary
to a developing program.
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ANNEX A to
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Interim Evaluation of the Intelligence Aspects
of the East-West Exchange Program
1. Summary of activity. Prior to the time the IAC Ad Hoc
Committee on Exchanges was established, February 1956, there were
two major official exchanges, Agricultural and Automation. Since
that time there have been ten more exchanges, seven with the USSR
and three with Poland. The volume of formal exchanges has thus been
small. There has, however, been a very substantial volume of non-
exchange travel, attendance at conferences, etc. , which has provided
additional evidence of present and potential intelligence value in this
area.
2. General evaluation. The formula developed in IAC-D-103
and used since by the IAC Ad Hoc Committee on Exchanges for weighing
exchanges is a balance of US intelligence gain versus Soviet intelligence
and technological gain. Under this formula, the twelve exchanges to
date would result, in our judgment, in a moderate net advantage to
the US.
This judgment can best be explained by touching on the pertinent
factors in each of the twelve exchanges. The Agricultural and Auto-
mation exchanges were carried out prior to the creation of the
Committee as the medium for organized intelligence support. In the
case of the Agricultural exchange, as mentioned in IAC -D -103, the
Soviets refused to supply detailed information promised the US
delegation. This, together with the fact that the US showed the
Soviet delegation all items and installations in which they expressed
an interest, resulted in a slight US deficit. In the Automation case,
on the other hand, US industry was quite restrictive in its hospitality
to the USSR delegation, and the US group visited about eleven Soviet
installations which had not been seen by US specialists since World
War II. The advantage in this case was to the US.
In the third completed exchange, Epidemiology, in 1956, both
delegations were quite satisfied with the treatment they received,
with the exception of the fact that the US group was not permitted to
visit Soviet military-medical installations. The US delegation
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brought back samples of vaccines, medical literature, and sub-
stantial information on Soviet medical research. The Soviet
delegation was technically competent and probably made some
gains from visiting- US research institutes. In this case, the net
gain probably was to the US because of comparative availability of
information.
In the Housing exchange, also completed in 1956, there was
probably little gain on either side. Most of the US methods observed
by the Soviets were well known and while more advanced, could not
be easily applied in the Soviet building industry. The US delegation
confirmed a number of facts and learned certain relationships of aid
to US analysts of the Soviet housing problem.
The Mass Feeding exchange (1956-57) had only a limited intel-
ligence interest since military installations were eliminated. The
net gain was probably to the US since little technical information
could have been obtained by the Soviets.
In the case of the Radio Engineering Conference-Tours (early
1957) , neither delegation was satisfied with the tour it received,
but the US team was highly qualified and they made worthwhile
observations and obtained equipment samples that were of sub-
stantial value. Net gain was probably to the US.
Three 1957 exchanges with Poland, housing, steel, and coal,
were well organized. The US teams were afforded access to all
installations of interest and were able to obtain answers to all
questions. In the interest of political relations with Poland, the
Polish teams were also well treated. The factor limiting US gain
here was the relatively low priority of our need for intelligence on
Poland in these fields, so that the net gain was probably on the Bloc
side.
The Peat-Taconite exchange with the USSR in 1957 was esti-
mated by the Committee in the planning stage to be to the net
disadvantage of the US. This estimate was probably valid. Although
the Soviets were quite fair in showing the US delegation all aspects
of their peat processing and research, the taconite processing is of
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a higher strategic value and the Soviet attitude indicated that, even
though they were fully familiar with US literature, the observa-
tions were of value. The net US disadvantage was probably slight
because the US got Soviet iron reserve information from the visitors.
The negotiations in the Public Health exchange resulted in
minimum acceptable tours. As a result there was limited gain for
either side, probably about even.
In the last exchange, the Scientific Metallurgical exchange, all
reports are not available, and a fair judgment cannot, therefore, be
rendered. Preliminarily, it seems that the US delegation acquired a
good deal of worthwhile information. The Soviet delegation, on the
other hand, was afforded a slightly better tour than the US delegation,
including one installation which they have been striving to visit for
the past two years.
3. Non-exchange travel. As indicated earlier, additional
evidence of intelligence potential has been provided through the sub-
stantial amount of conference attendance, much of which was on a
loosely reciprocal basis. In many cases the US received information
of value, both from Soviet attendees at conferences in the US and
from US attendees at Soviet conferences. It is more difficult to
estimate the Soviet gain involved in conference attendance since
much of it undoubtedly stemmed from extended conversations with
US scientists, rather than from the papers presented or the exhibits
viewed, which were in all cases reviewed from a security standpoint.
4. Specific items of US gain. Assessing the total intelli-
gence results of exchange and travel, we believe the US has gained
more significant intelligence in the important field of radio-elec-
tronics than in any other. In the first place, the large number of
US-USSR contacts have made possible a more realistic assessment
of the "state of the art" in the USSR. Until recently the Soviet
electronics capability was underestimated in many respects. Many
interesting details of,Soviet accomplishments and difficulties in the
components field were brought out. Among these were the fact
that civilian TV and radio set subassemblies are manufactured to
military specifications, information on factory costs, sales price,
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wage structure, incentive systems, problems and procedures under
the decentralization policy, projected growth rates for electronics
output, projected plan acceleration of Soviet microwave relay
systems, and the fact that the Soviets have a total of twenty-four TV
transmitters. Deficiencies such as inadequate life-testing, rough
handing and contamination of parts, difficulties in development of
wide band microwave equipment, and dependence on East Germany
for ionospheric sounders, were all detected. Also, indications that
the USSR may be ahead of the US in knowledge of scattering properties
of finite cylinders, and the first indication that the Soviets were going
to use the 20-40 megacycles frequencies for earth satellite radio
transmissions were uncovered in various contacts.
In the metallurgical fields, despite the fact that the results
are not in on the largest exchange, some useful items were developed.
The nature of the USSR iron ore reserves and significant information
in the field of high temperature alloys, particularly molybdenum,
were revealed.
In the medical field, viral and bacterial agents which were under
study in the USSR were brought to the US as were samples of new
vaccines. The many visits by medical specialists have improved our
capabilities for estimating the medical picture of the USSR.
In the housing field, statements from high Soviet officials
clarified ambiguities in official Soviet statements which had puzzled
US analysts for some time. Information on constructure costs,
urban planning, and types of dwellings, provided background for an
Air Force dynamic load analysis of recent Soviet construction, as
well as material for other surveys. Material bearing on the Soviet
manufacture of ball bearings and the operation of motor vehicle and
tractor plants was also supplied by delegation members. Other
information provided clarification of Soviet demographic and labor
force data. Observation by members of the US delegation may
prove to be of value in assessing current status of the Soviet Civil
Defense Program.
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In the scientific field, a great deal was learned about general
and specific capabilities. This included unmistakable evidence that
Soviet physicists are fully aware of the fundamental problems of
theoretical physics and are engaged in advanced work in the quantum
field theory. (Specific information on location and characteristics
of the 10-BE V-proton synchrotron and the proposed 50-BE V-particle
acceleration was also obtained, but it seems the Soviets were happy
to exhibit these.) At one meeting, several papers heretofore re-
stricted to the USSR were made available.
Nearly .every planned Soviet contact has contributed some de-
tails which aid in the general analysis of various Soviet economic and
scientific sectors. A knowledge of the "state of the art," the extent
of the application of technology, the quality of the human agent that
applies to technology, and the various statistical clarifications are
all necessary to accurate predictions of future capabilities. The
great volume of biographic information obtained under the program
is extremely useful to various intelligence problems. There is, in
addition, an intangible but real gain in the incidental information
derived from conversations that has contributed substantially to our
knowledge of social and economic conditions in the USSR.
5. Specific items of Soviet gain. The task of compiling
specific details on the Soviet gain is much more difficult. There
are no known instances in which the Soviets were permitted to see
classified or closely held US projects. The amount of technical
information the Soviet delegations have gained from observations
can only be estimated when significant changes in policy or method-
ology directly reflect such observation. No specific instance of
such changes, except the agricultural ones mentioned in IAC-D-103,
is now known, although admittedly sufficient time has not elapsed
to permit extensive changes to show up. One possible indication
that the Soviets may not have learned as much as desired from the
tours to date is the constant complaint that they are not given suf-
ficient time in any one place, and the fact that the Soviets have
recently stressed long-term, exchanges.
On the other hand, one US physicist stated that the Soviet
professor Vekaler had a terrific capacity for observation, analysis,
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and retention, and carried back to his country as much information
as "any ten US scientists" could absorb in a visit. Such indications
of interest as the surreptitious pocketing of a tube part by a Soviet
delegate, close inspection of a die-making technique not known to
be in use in the USSR, and detailed study of the new fully automatic
grid machine at a US plant showed possibilities of small specific
gains, even though the items have been fully publicized in the US.
In personal contact between Soviet and US scientists and technical
personnel, it appears probable that the US representatives have
spoken somewhat more freely than the Soviets and that the Soviets
have derived considerable technical benefit from such contacts.
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