CIA PROGRESS REPORT , OCTOBER 1950 TO DECEMBER 1951 ORR SUGGESTION ON SECTION II, HISTORICAL SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00662R000300090004-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 29
• Document Creation Date: November 9, 2016
• Document Release Date: July 9, 1998
• Sequence Number: 4
• Publication Date: November 5, 1951
• Content Type: REPORT

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25X1A9ap
is Report, October 1950 to December 1951
on Section II, Historical Summary
world war n, although thinking About the use of economic
intelligence and some experimentation, took place, the effort
largely passive and subordinate to US Government opeurations*
even this passive interest was allowed to lapse
despite the fact that the main issues of our tree snare primarily
preoccupied by economic forces and dominated by the major protagonist
of matertaliam, the Soviet. NSCID 3 dated 13 January 1948 in
tar in intelligence production suffered
the continuing subordination and brW antation of the economic intalli.--
ge co role by assigning this field to each agency "in aoccardaeeaoe with
first recognition that eogn tp
intelligence (or
basic unity and a omwas.
ness of interest, to all departmental # #rk and, therefore, falls into
a role of '" on concern' which makes it a duty of CIA to under
an a primary mission,
problem remains that esoaawic intelligence has been pees eserspto ri2y
inaugurataed, lacking in tradition or fetes as compared to a long history
of military and political intelltgsnce,
Add to this that the as4o conditioning cause of the focus on
sconcuic behavior and. interpretation, the industrial revolution, a -
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while ralstively nswr at an mown point of time in its develop-
ment or historical Vale.,
In point of view of Via Soviet problem, literally thirty,,-tire.
years a secret economic history *nst be tuned overnight. The bits
and pieces which have floated arou 1 through the business o ty,
through other tnta2l4g?nce roles, throw other goverment processes,
must be brought t ether to focus on national intelligence problems.
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C Progreea R ort... O ober 1$50 U ouiw X951
0 Contrite an 3acti cn III, Parxt 2,, Cowd atati on
CU's B*U BleapwaitY
( a cation itself,, it is
It is also true that specific
pointing responsibilities arad si sl
allocation does not permit incorporating the
points of view. Thaoreti*&lI7,
agencies and working unite--card be w4bodW
of vi.
Actually, this is p}rsi*d3,y and practiaMy isapossible
Program of incorporation weld be b
axis the program ebould co riase-
national needs.
Coordinati is p*rtivalarlI necessary in e n c intell e
ThUs the Department of states be# always been pa nant in the
fields inn lud1.ng poetical
of :
activi'st'. The,
in
on the ooe bond* ad the separation of econmic into
was recaog ai sed in the earlier National Int.liig+
NSCIII 3$ places upon CIA the res
as production of foreimp sooncodc
cu-ry out this responasibility. The production respcas.:
with later on in this paver. To awry out the
R has estbliabed the c Intell ttee. This oomedttess
in coordination
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chairmanned by CIA, embodies not only the pertinent units within the other
intelligence departments but also other government agencies whose interests
bear on the economic intelligence field. In turn, the EIC is in the process
of forming specialized subcommittees such as Agriculture,
portation, etc., in which all relevant government talents and concerns
be brought to bear on specialised problems, While the primary producti
responsibility of ORR concerns itself largely with the Soviet Orbit, the
coordination seeks to pull together all the valuable work and into
being done on the non-Soviet areas which involve the national security
interests, The coordination role also seeks to make the greatest use of
departmental, cork on the Soviet orbito ftd ls, it is very d:
a fine line between those issues which are primarily departmental (particu-
larly concerning the Soviet problem) and those which involve the national
security,, the guide rule is one of preventing duplication in the main effort
while making use of overlap from different agency points of view. The above
has been coupled with a stress on informal working level coordination in
order to insure a maxIma exchange of information and ideas, The particular
need for coordination in the economic field is demonstrated by
of agencies which have already participated in the EIS. This is apps
mately 20 besides the IAC membership and includes Commerce, ECA, Interior,
and Agriculture. Prior to the reorgani-satin: of CIA, the role of a
intelligence was so subordinate that coordination in this field was omitted.
To illustrate the part that such coordination is playing in allocat
the EIC is at present carrying on a survey of all the work being done in the
United States Government on the Soviet economy with a view. to uncovering
the most serious gaps and agreeing on how to fill them. In coordinating
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major probUm edwaat all
in mss,, the BIC has bem a
the pertinent data and
cast age ee With the d on t Sam Orbit
tom. Uwe t
Of the M
the
prob1 ,
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IM
The need far springs fr the ray realiaeod esaity for
cor sntrated asaon+cwic at4ligmaae * research on problem vital to the
national security. ORR's role includes both coordinating sad service-
of-Demos concern activities in the production of oconomaio intelligence.
This office also carries forward two functions inherited from its
Ystimates -> coordination of
ing centralized
map intellige
essity for basic econaaio research boom, evident follmAng
ld war l , particularly as a result of such studies of operational
success or failure as the strategic barbing survey. Attacks on the
bearing target-aystea, for exasaple, had been preceded rather by studies
of its vulnerability as a physical target and the realisation of the
general importance of bearings to ins sistry, than by drawing an adequate,
integrated, econc w-intelllge a picture dealing with the dy .cs
of a living econc y - stockpiles, dispern_ gin, substitutes, changing
requirements,
;onaic intelligence
a consultant group, primarily as advisors to the area
divisions, and a further step a taken in the organization of half the
division into a purely economic branch to follow current
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Progress Report, III, 4 - MR
economic activity it the Soviet orbit. Only
however, was authoritative economic research reco
le major
function of an entire office within the intelligence co unity. ; oonom
intelligence relating to the national security was made a responsibili
of CIA by C,LD 15 in June of 1?51. -
T116 transfer to another offices 0C1, of the teary reaponsib
for current intelligence permitted CRit to shift its focus of attention
from the analysis and interpretation of tae current flow of intelligence
documents to an intensive search for every scrap of information, current
or old, in top secret files or in public libraries, abroad or at
bearing on fundamental economic intelligence problems
tie analyst, freed troy, the demands of processing the c
could address himself to true resoaren, utilizir researc
methods, and disciplines. This nae meant that OR R could corici
flow,
energies on trying to find real solutions to a few key problems on which
the national security critically depends.
In CRn' a concept, economic Intelligence serves five purposes in
support of policies to preserve the national. security,* (1) to estimate
t :,e as tude of possible present or future
advent of 0Ri3,
ourselves auxi
our allies} (2) to estt mate the character and location of possible present
and future throats; (3) to assist in eatinating tie intentions of the
potential enemy; (4) to assist the policy r in deciding what can be
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Progress Report, III, 4 - GRR page 3
done to reduce the possible threat by seizing on or creating economic
vulnerabilities; and (5) to assist in estimating the possible develop-
went of the East and the West over a period of years under the assumption
that war does not occur during that interval.
ORR determined to concentrate first on the econoor of the Soviet
Union and those of its satellites, both in -view of the CIA responsibility
for "foreign economic intelligence relating to the national security"
in the present crisis, and because in this sphere the economic approach
seemed to offer its greatest advantages.
In the first place, the militant materialism of the Soviet p a.aied
economy in its very movement from political decision to total and minute
planned implementation cannot help but radiate factual econanic evident
reflective of the political decisions. Secondly, the basic unity of
industrial processes and economic relations41.ps throughout the world
provides a basis for interpolation and extrapolation. The skilled
engineer and the competent economist, thoroughly posted, the one in
US technical processes and the other in research tools, should
find it easier to build on the fragrentary and sometines scanty informa-
tion available than wonid their counterparts in the political and,
military fields.
Roth the fragmentary nature and the uncolate d state of current
information and the lack of basic earlier investigations have influenced
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Progress Report,, III, 4 - M p
(RR's method of approach to Soviet economic intelligence - that of
successive approximations. Current demands on ORR for intelligence
support make it impossible steadfastly to remedy the sins of omission
of the last thirty-three years and recover the basic data of Soviet
economic history in an atmosphere of authoritative research. Therefore
the ORR program must reach interim conclusions in successive waves, each
narrowing the outer limits of maxima and minima of Soviet capabilities;
it must constantly repeat a cycle of review and examination of informa-
tion that is available, selection of points of greatest weakness, con-
centration of production on these points,, then re-review and reex ination
to determine whether emphasis should be shifted. Such a program, though
possibly in some respects less than ideal, will contribute eventually to
a sound economic basis under political and military intelligence factors;
considerable progress has already been made in this direction.
The first six months of 1951 were spent in making as thorough an
inventory as was possible of ghat CIA knew about the Soviet economy. The
primary emphasis, however, was in exposing what was not known, and what O R
considered should be known, about soviet economic capabilities. This
exercise, while pooling much information which existed heretofore in the
minds or files of analysts in fragmentary form,, was most enlightening on
the brave deficiencies brought to light for the first time in an orderly
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Progress Report, III, 4? -- MR P.
fashion. Signal contribution was made in the petroleum field on more
precisely apiroximating for the first time the Soviet economy's requirements
for petroleum products and the availability of aviation fuel. In the
electronics field, the assembly and analysis of all, known data authorita-
tively confirmed the previous intelligence hunch of the Soviet economy
relative weakness on this score. In all the various economic sectors*
hover, gaps were found, of varying degrees of seriousness, down to a
complete deficiency of information in the vital field of construction
(biggest si glee consumer of steel and labor in the US econ :ay), and an
al?n:ost total deficiency in information concerning the eci ,caul- end ineering
industries supporting munitions production. A clear priority prrra for
filling these gaps is not jet established, but by making an attack on a
broad front by the et hod of successive approximations, it should be possible
within the next year to narrow t ',e field for definitive study, particularly
in conjunction with the work of the Economic Intelligence Committee.
Tnls ce ittee has been more fully treated in Section IIII, Part 2,
Coordination, of this report. In brief, pending coospletion of its
organization, this committee has acted on interim arrangements for pooling
information and work in support of national intelligence estimates, has
proven itself already a very useful instrument in securing within the
intelligence co ni.ty an agreed approach on specific intelligence problems,
both of production and of requirements for information.
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Progress Report, III, 4 -
page 6
(lilt also has a responsibility for coordinating research done outsi
the government on matters of interest to the intelligence
There has not yet been time to develop an extensive program for systemati-
cally tapping the knowledge and talent available in universities and
25X1A5a1 private research institutes, but a start has been made with a pilot project
central, purpose of this project is to bridge the gap between the knowledg
of Soviet society acquired by scholars and the requirements of operating
officials for guidance in exploiting the cold mar vulnerab: .ties of the
Soviets. New techniques for focussing aaadvAc understanding on
problems are being developed.
The National Intelligence Survey program, established by NSClll 3 in
early 1948 and taken over by O RR frCm its predecessor office as an alrea4 r
mall-developed activity, involves both the coordinat:
planning and directing a ccxaplex interagency program for the collection,
production, and maintenance of basic i.ntelligencee, and also the exercise
of extensive CIA editorial and review responsibilities. Progress has
been made in the establishment of permanent staffs in the contributing
agencies., the augmentation of collection capabilities and the general
improvement in the effectiveness of interagency coordination. It has not
as yet been possible, hovever, due to factors beyond the control of flR:
or the Agency, to exact fulfillment of production schedules. The
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Progress Report, III, 4 - CRR
Page 7
outbreak of the Koreaui war caused almost total stoppage of =HIS product ion
by the agencies of the National Military Istablishment and considerable
reduction by State; only fifty percent of production goals for fiscal 1951
were not. Current production also is running considerably behind the
fiscal 1952 schedule. It is possible that the solution may lie in CIA
financial support of units in Defense agencies, such as is now provided
for State and for some other contributors, to provide stability of
capabilities in these agencies treat will ensure continuity of balanced
NIS production in conformity with scheduled cotmaitaeatse
The Geographic Division, ORR, was a well-developed service of common
concern when transferred to CHRIS predecessor office from the Departaaent
of State late in 1947. It has continued to maintain an extensive map
library reference service on a current basis and to produce geograparic
and W intelligence of common concern to the intelligence agencies.
Support activities, in addition to preparation of a large variety of base
maps needed for research, planning, and presentation programs, include
providing "locational" intelligence, such as teat needed for surveys of
vulnerability of strategic foreign installations. An important current
project is the analysis of Soviet capabilities in the fields of mappi,
aerial photography, and geodesy. Geographic Division enters into the
coordinating role with responsibility for Chapter IX, Map and Cnart
Intelligence of the NIS program, and with the coordination of requirements
for the collection of maps and mapping information on foreign areas from
both foreign and daaestic sources. Recent additions to the Divisions s
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Progress Report, SIT, h - ORR
responsibilities '-iavs been that for furnishing graphic support to vario
parts of CIA and that for conducting an augmented geographic research
and cartographic effort in support of CIA operational pla mirig and field
activity.
Because of the practical limit of hiring perso al for all specialized
fields and the great need for drawing oa the full US resources for the
best possible judgrraents, ORR is e3zgaged in an extensive program of utilizing
consultants from outside the Government --- including both business and
industrial specialists and academic authorities -?- both for its own benefit
and that of opposite number agencies. A consultant panel on aircraft.,
12-16 November 1951, enjoyed also full participation by Air Force lntelli-
gerbce. Such consultants have been most willing to serve, and it Is
anticipated that OW will in future be able to make even greater use of
their generous help.
Throughout the year :much of (M's t
a great variety of operations -
mental auspices and, wit in the agency, Vie acts vi
Current Intelligence, Policy Control, and National
upport of
the offices of
initial beginning of providing no support for the Office of National
Estimates., ORH has cane to providing some M- in some canes the bulk -
of the support for almost all the national estimates. In additionv MR
has provided basic data and assumed leadership in discussions on a cono sic
25X1 X7 matters in international intelligence conferences
Support activities such as this paragraph
25X1X7
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Progress Report, III, 4 - CAR page 9
lists, however worthy and important the ends that they have served, hare
of course been carried on at the expense of time that would otherwise
have been devoted to basic research.
The problems that ORR considers of sufficient moment to present in
an Agency report of this nature are detailed in the a propriate section
and part (TV, 7). The r are t aerefore here m,erly listed, to ccxj fete the
picture of ORR in the processing of intelligence. First in seriousness
is prop; ably that of the organization of existing but scattered information
in such form that it can be reached and used by the intelligence analysts;
second is placed the problem of need for access to operational. knowledge
which ;plagues other parts of the agency' as well as i :JR?t; the third problem
also is not peculiar to ORZ, thou h bearing with particular force on this
office -- that of the need for s?oeedier security and other administrative
action on incoming personnel and for so e reaso :able net',.od of utilizing
unclearable i ndividual.s; the final problem is t%e ;need for more direct
contact between the ORR anal rsts and the field collection facilities,
which is peculiarly important in economic intelligence.
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CIA Progress Reports October 1950 to Dec 19%
section IV', 7, Specific Problems of the caste of
Problem 1, '~' ?icy , MAI - d for
The identifying of relevant informotic its organization
usable form is probably the first "houaokeeep
field. While this problem in Soviet eoon*PU
by the variety of contexts in which bits of
separation of these bits in time and
also true that the peculiar complexity
factors for example, the series of coal to iron ore
offer hope for fruitful solution of this priority problem.
A modern economy cannot function without pooling off fragments
of evidence of a most positive, concrete ztatavo which, regardls
the precautions taken by the operators of that sconcse -, cannot fail to
give, if only the fragments can be identified and arranged., an accurate
picture of the econa in operation. The difficulty lief
referenced form so as to sunnon up the original context of
account for the missing gaps.
The American gift for mocha
in licking its pro of
organisation has been woefully lackIng in efforts to tackle the crucial
problems of intelligence on A. sufficient scale. mtacei cittte].l,igeettas
processors are not in a position to lay out their precise require is
for field collection when they cannot appraise the inforeettion already
existing in US Government files and other repositories. This body of
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Progress Report Ws 71 O Problem 1
page 2
information exists in tens of milli
classified. Significantly large volumes of bo,
millions
in the original Russian, remain upl.oited and
of reports reflecting economic evidence in classified mat
the intelligence co un ty are not readily ac,, ssible. The present 1 1x
of facilities for "capturing" these materia mew that it is
to bring together in focus all the el nts bearing on any sing,
blew, to say nothing of the Soviet econUny as
ORR and the economic intelligence ooh ty`
ossible
broader support from "hoekeepiaaga facilities. American organisational
genius :mwt be specifically directed towxd final location, abstracting,
cataloguing, cross-refer sing, and generally making available the vast
amount of existing information on the econaq of the Soviet area. while
swathing is being done now, those responsible need greater administrative
support and an enlarged charter if they are to proceed properly.
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CIA Progress Report, October 195D to December 1961
Section IV, 7, Specific problems of the separate offices
ORR Problem E, Necessity for operational knowledge
Types of operational knowledge at present largely withheld from
ORR are required for two specific purposesi watching for developments
in the USSR analogous to those which have already taken place in the
US; and estimating Soviet capabilities and vulnerabilities more accurately.
Modern economics is, in reality, a large number of specialized
subjects, complicated by continuous revolutionary technical change;.
Theoretically, every required type of specialized knowledgeability
would be present in personnel within the ideal central intelligence
agency or at least in the government intelligence community. The pace
of change in technical developments, however, is so rapid, and so in-
creasingly comes under the security wraps of US operations and counter-
measures, that it is difficult for the knowledgeable agency analyst to
know what to look for in the foreign field without the parallel know-
ledge of domestic activity.
Because military development embraces specialized economic develop-
ments, important domestic data are put outside of the ken of the economic
intelligence analyst. These developments have sometimes revolutionary
significance in terms of the use of new materials or different processes,
The economic analyst is severely handicapped in knowing-what to look
for in the foreign field unless he knows about these domestic develop-
:ments, At present, however, many domestic developments are classified
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Progress Report, IV, 7, ORR Problem 2 Page 2
in such fashion that the intelligence specialist has no access to then
and is thereby precluded from intelligent inquiry in the parallel
foreign field.
An example of these restrictive practices is the background of
ORR's recent receipt of a request for information about Soviet pro-
duction of optol (catechol), Normal domestic production of this item
(75 tons a year) is of minor significance among literally tons of
thousands of chemical products turned out. It is not physically possible
to cover all chemical items, and therefore priority attention must be
given those items known to be of the most importance. In this case,
through indirect and somewhat indiscreet sources, it vas learned that
optol is of paramount importance In certain new US weapons production,
and may be a key to determining the extent of similar Soviet production.
It will be necessary, however, because the evidence of such 3
production is bound to be fragmentary and indirect, to have more
quantitative and qualitative data from the military's operational uni
before appropriate requirements can be set and coverage arranged.
Another aspect of the security separation by the military of demeatic
planning and operational information from the intelligence function
is that it seriously blocks the effort intelligence-wise of defining
Soviet vulnerabilities and capabilities.
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Progress report IV, 7, ORR. Problem 2
?RR'a exploration of Soviet strengths and weaknesses presupposes
a knowledge of domestic strength, including weapons, which would provide
a natural or unquestionable advantage over any given Soviet condition,
Unless this domestic strength is known, the condition of 3oviet vulner-
ability cannot be recognized.
The history of Soviet atomic development is an excellent
point. Had the intelligence community known the economic factors
necessary in any one of several fields for the production of atomic
energy, it would have been relatively easy to estimate the dependence
of the USSR on the US for realisation of its own production. In the
field of machine tools alone, it would have been possible to act upon
the vulnerability of the USSR in this respect by withholding those
unique tools and instruments the Soviet found it had to purchase on
the US market to build the USSR atomic energy plants or even to effect
covert measures which would have mislead the USSR into undertaking
wasteful processes at the sacrifice of other economic goal.
Again, the present US weapons strength, while it remains unknown
to the intelligence coa/nunity makes it impossible to accurately estimate
the extent of Soviet industrial vulnerability to Western war measures,
or to even define the context of Soviet vulnerability, as it relates
to factors of decentralization, stocktiling, recuperability, etc. All
of these factors and others only have significance when related to the
magnitude of effect of US planned operations.
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Progress Report, IV, 7, ?PP Problem 2
Page 4
There are undoubtedly from the military point of view 'chat sews
to them good reasons for the restrictions imposed; against these
reasons, however, the serious disadvantages to intelligence icnowled
and consequently to the national security interest must be weigh
The above-cited examples are not unique and only serve to emphasize
the unity of the modern war and the modern economy. Up to the present
time such of such needed data on domestic military development has been
refused ORR by the military departments.
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CIA Progress Report, October 1950 to December 1
Section I!, 7,r Speck problem of the
O U Problem 3, $ ' ty. a i tment6 sad u lisation
Ca etent personnel representing the maxW dif
disciplines and technical backgrounds necessary for the aman nation of
economic intelligence will always be a major problem. The pr
necessity for security screening, and the results thereof, have deprived
ORR of some of the best talent available in the country today as
imposing long delay on the processing o
The long processing involved in the case of those
are cleared has had serious effects on CM efficiency. The
office*
screening for one person has meant that it was impossible to drus, on
other resources until. security decisions were made. This, in turn, has
reflected adversely both an the substantive work and programing, and on
discussions on an administrative and budgetary level.
difficulties of administration and recruiting have made inroads on the
time of key personnel and hanre involved therefore sacrifices
etantive progress.
It should be possible to arrange a different typo of olesrawe
to establish procedure for utilizing unclearabie personnel. The rn er
of people knowledgeable in the Soviet field is extremely limited; sores
cannot be fully cleared, and many of the most useful cannot be
Partially cleared. SO" WV must be found whereby OUR can drew on this
pool of talent as needed. The US intelligence cea unity has no such
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Progress Report, IV, 7, ORR Problem 3
richness of weans in the present struggle as to be able to let any
im-
portant segment of then be unutilize>d.
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CIA Progress Report, October 1950 to Dec+
Rion IV, 7, Specific problems of the separate offices
ORR Problem b, C ontac t burn OM analysts and field a
Although s? progress ha
field collection mission closer
to be done.
The essence of the problem is that
imposed by the information - collectors' to protect their so
tended to prevent the analyst from giving pr,pe;
exploitation, and also prevented the analyst from knowing ab
limitations of the collection facilities,
In the former case, the intervening numbers of people in th
runication circuit has caused a
the proper undee
of what information wanted by the analyst, and the
erstandirig by the analyst of what the source had to offer.
again is a problem particularly acute in the economic field, where
technical specialization plays
.for brothers of the same international t ai.
relatively close together In understanding before a subject be di
firm results.
In the latter case, because of security, the analyst has not had
adequate knowledge of the general lialtationg and peculiar problems of
field collection. As a result, the
overloaded the collection
apparatus and spread broadcast requirements ill-suited to the collection
facility, with a resulting mutual, frustration and lack of results.
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Progreso Report, IV, 7, ORR Problem 4 Page 2
During the past year more direct contact has been established
with 30, 00, and with the foreign service reporting facilities in the
25X1 X4 State Departments
an initial ORR participation
in the field of collection by t -7,o field representatives has been under-
taken with a view to giving more intensive guidance on the collection
of economic information there.
In the resolution of the main problem, the effort in
can only be considered a very small first step. O PR ;lust intensify
its direct field guidsnoe in other areas.
25X1X4
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 25X_1,A9a
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CIA ~'rc-gress Report- octobe-r 1950 - December 1951
ORR Suggestions on Section I, Intelligence and the Nationali!Z l Po,
A . Responsibility of the Intelligence Process toward the Democratic State
The Soviet problem imposes a particularly important and peculiar
responsibility on the intelligence process-within the context of the
democratic state. Two conditions ,:ske this responsibility a thing different
and apart from historical circumstances of the past: first, the opposition
between the fundamental asstuept ion that a working democracy must have free
communication and the fact that the USSR, more than any other state in
nodeern timear has denied this assumption within its own territories and
particularly in relation to of er states; second, the strain imposed on the
coitnmieations process by the increasing plethora of ideas and specialized
information.
The first condition means that all information flowing from the Soviets
is classified in one form or another, and therefore passes over to a very
restricted democratic-state group of users, since the very classification by
the Soviets forces a classification and restriction within a democracy. In
turn, counter-a:asasurea undertaken by a democracy nzat be equally eLmsifted
and restricted. Such a condition raises the moot question as to how public
sentiment-traditionally the driving force behind government action in the
United States-can be formed, and, alternatively, as to how an uninformed
public can act in such a vacuum. Inasmuch as the problem of checks and
balances within the small group receiving information through classified
channels is a serious one, a tremendous responsibility is placed on the
relatively few people who must react in reporting this data within the
democratic tradition,
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This basic problem is magnified by the second
amount of new information to be passed through the co
ations system.
TechnoloEr and specialisation in raerq fields are superimposed on the normal
communication process already burdened by considerations of security and for
the speed of reporting. A corolary fact is the physical impossibility for
all the relevant specialties to be encompassed by the necessarily limited
number of personnel in this narrow intelligence-communisations Mel. The
must therefore be a compromise between. the de nds of security for
the number of ix~dividvals with access to the intelligence channel and the
demands of interpretation for bringing all specialized talents to bear
a relevant problem.
One feasible solution sees to be the bringing in of leadership in all
fields--both technological and political--cyder the security tent, in
atmosphere of freedom of examination and one in which the norms, ch
balances z ll continue to eft.
B. rtm" of Wit; In in the National Po Structure
The essential role of polio-waking is to meet present or anticipated
problems by forward planning] its role therefore is for future-action
guidance. It is a=iomatic that policy must be based on all present known
factors and all probable future factors. The intelligence process partici-
pates In both of these locations in time. The intelligence product itself,
how ar, must be created before the policy is formulated, and therefore
must be dominated by a sense of future pertinency the factor of security
classifications in the intelligence process signifies that an attempt has
been made to include all known data or factors, regardless of the foreign
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intent to withhold such data and regardless of the effect that such factors
may have on the domestic policy making.
Cared with the several other fields (or disciplines) whi
an the catalogued areas for determining policy (politi
ofic, sociological, etc.),* the new field of economics by its nature lends
itself to a more precise use in forcasting. This means that because
dynaic interrslationebip of economic factors the economic field has a
deterministic character,-its shadow falls in front of it. Troops may be
shifted around, notes may be exchanged among ambassadors, ultimata or
propaganda theses may be changed overnight; but a steel mill cannot be
moved in such a short time and an industry's production course can be changed
only &xadually by political decisions made months before. The decisions
revolving around guns or butter reflect themselves in all the facets of an
econo,g. 'particularly in the planned econooV.
In a democracy, and particularly in traditional United States Policy.
makings the key Policy reaction has been initiated by an external threat..
Although political or military intelligences may indicate the existence of a
threat, it in primarily the role of economic intelligence to measure the
magnitud% or outer limits, of the threat. This means that economic inter.
Bence not be the basis for estimating the threat as real,, potential, or
pure bluff. With the adequate use of pr ecise c intellige, it is
then possible to for ulate a more adequate and effective
words, the more adequate economic intelligence is, the m
measure the magnitude of the threat and set the precise
necessary counter-measures,
in other
it Of the
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Sesurity lnformaticn
CIA Progress Report, Ost 1950 to Dec 1951
Section IV, 9, Specific problems of the separate offioes
ORR Problem d, Car partasralaalisation of Information
The security emaaaparbaentalisation that exists in the intelligence
oc s mity poses i problem ocnr*oted with, but of a different type from, that
of the organization or existing information (Problem 1). Beams of the mature
of ceonomia-intelligence later evidence (its interrelationships and the
fundamental determinism of economic processes), it is vital that the flow or
information on the Soviet sphere should not be foroed into the parallel channels
unfortunately eharsteristic or classified information but should be ssldod at
all levels. Each fraagsaarnt of evidence has many different use*. The daily output
of a coal nine can reflect, when related with other known factors, trends in
per production, or quantity and volume of steel, or failure adequately
to use capital goods such as coal-mining machinery, or leak of timber for pit
props, or productivity of labor. Such a piece of evidence m in turn be of
both short-terse and long-term sigaaiifieanoe. The ri one short pristoner-
of-mr.r report an the prober or converters observed in a ohemioal factory can
significantly change an estimate on the Soviet ohemaal-industry output and
p+tssib and capabilities, and possibly an the total Soviet sda capability
to support a war. Proprietary interest, no matter what jurisdictional limits
may have boon d efined, must be over-riddej if a successful exploitation or
economic intelligence is to be made. With a reasonable certainty that he
possesses all the information that is available, the analyst sometimes is
Justified in finding the lack of information of equal significances with
its presence.
I still think this a little slonder-IM
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31 October 1951
PROBLEM OF COMPARTMENTALIZATION OF INFORMATION
_ # e--t3'1e"~iousekeepiri problem ie funeh a tal o the c
-inl~ prcre8ss, the security compartmentalization which exists poses
c~ e,rru ttcf r ch; f o~-? ~'Js4 Yys-I fi~p.~ rTU 0-i-1, 4,c# ?
different type o prebJ.em. Because of he nature o economic intelli-
gence evidence (its inter-relationships and the fundamental determinism
of industrial processes) ant' ~a-on
~.w-rtarf ' e T 4~ee.-e~e~ii die oy' egos
to o p el c ianne s u"E't sh e me a^E` levels Each fragment
of evidence has many different uses. The daily output of a coal mine,
when related with other given factors, can reflect trends in power produc-
tion, or quality and volume of steel, failure to adequately use capital
goods such as coal mining machinery, lack of timber for pit props, or
productivity of labor. In turn such a piece of evidence may be both
r, ~orr"
of short-term and long-term significance. The case of one aaM*1 prisoner-
of-war report on the number of converters observed in a?chemical factory
can significantly change an estimate on the Soviet chemical industry
output, capabilities, and possibly the total Soviet capability to support
a war.. Proprietary interest, no matter what jurisdictional limits may
have been defined, must be over-ridden if a successful exploitaVon of
economic intelligence is to be m e#veii all the information that
4 . ~ .+
is available, the lack of information may--be quay- sig ficantss-
vu- ~ r~ u& I-14 C
w
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