AREAS OF RESPONSIBILITY FOR ECONOMIC INTELLIGENCE RESEARCH AND PRODUCTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B00970A000100020006-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: July 31, 1998
• Sequence Number: 6
• Publication Date: June 8, 1954
• Content Type: MFR

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8 June 1954
25X1A9a
SUBJECT: Areas of Responsibility for Economic Intelligence Research
and Production
A meeting was held in DCI's office from 1500 to 1545 hours on
7 June 1954. The following were present :
Allen W. Dulles CIA
Robert Awry, Jr. CIA
W. Park Armstrong, Jr. State
Fisher R. Howe State
Philip H. Trezise State
CIA
Background: The specific purpose of this meeting was to reach agreement
on e a ocation of responsibility for the research and production of NIS
Chapter VI (Economic) on the Soviet Bloc areas. The broader issue involved
the areas of responsibility for all economic intelligence research and
production as set forth in the proposed DCID 15/1, although this document
was not specifically mentioned in the meeting.
1. Mr. Dulles opened the meeting by expressing his general views on
the subject. He felt the time was appropriate to make a clear-cut division
on the areas of responsibility for economic intelligence research and
production: State to have the principal responsibility in the Free World;
CIA to assume that same responsibility for the Soviet Bloc.
2. Mr. Armstrong replied essentially in the vein of his previous
memorandum to DCI: in respect to the NIS Program, he felt that certain
sections of Chapter VI, specifically Sections 60 (Introduction) and 65
(Trade and Finance), should be the responsibility of State in view of their
political implications; in the main, Sections 61-64 should be done by CIA
with assistance of State and the Defense Agencies as indicated in his
memorandum.
He noted that State needed a modicum of economists specialized on
the Soviet Bloc to fulfill departmental requirements. He further observed
that State had had the responsibility for Chapter VI for over five years
without any serious questions being raised over the duplication of effort
between State and CIA in the economic intelligence on the Soviet Bloc.
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3. Mr. Amory replied that when the original allocation of
responsibility for Chapter VI was laid on, ORR "wasn't even a twinkle
in anyone's eye". The present situation was quite different. In
comparison with. some? analysts in OM specialized in the Bloc, 25X9A2
excluding those assign! to N"IS work, the Economic Research Area in
ORR had a working organization of well ovei assigned wholly to the 25X9A2
Soviet Bloc. There was little question, there ore, as to the relative
ca abilities of the two shops. ffJr. Trezise noted that the figure of
25X9A2 analysts mentioned by Mr. Amory was far more than OIR had on board
for Soviet Bloc research.?'
4. Mr. Dulles again returned to his fundamental thesis. He was
convinced as a matter of principle that CIA should take over primary
responsibility for the Soviet Bloc in the economic intelligence field.
Moreover, he was having increasing difficulty with the Congress over
supporting two separate activities doing essentially the same thing.
He had sold the Congress on the ORR activity. It was a sound position
since the Congress knew that much of the economic information on the
Bloc was derived from covert sources available to CIA. He could not,
having made this point with the Congress, turn around and seek appropriations
in support of State's operations in the same field. In fact, to further
attempt such support might well prejudice other CIA appropriations to the
ultimate disadvantage of both agencies.
5. At this point Mr. Armstrong wanted to know if this principle of
division of responsibilities applied to the broad field of economic
intelligence as well as to the NIS Program.
6. Mr. Dulles replied in the affirmative. Mr. Amory added that the
NIS was only one aspect of this broader problem. In his opinion, ORR was
fully capable and should have the primary responsibility for economic
intelligence research and production on the Soviet Bloc, leaning on State
for economic intelligence support for the Free World (non-Soviet). He felt
that any other arrangement was inefficient and a wasteful use of the tax-
payer's dollar.
7. Mr. Armstrong said he was still responsible for satisfying
departmental requirements for the Soviet Bloc and would need to maintain
a small group of economists for this purpose.
8. Mr. Dulles said he would have no objection whatsoever to this
proper function and would do everything possible to assist State in
carrying it out. In view of the restrictions on use of HIS funds in
FY 1955 appropriations, he asked Mr. Amory if he could obtain additional
funds from other than NIS appropriations for FY 1955. W. Amory felt that
he could lay on several special projects which would make funds available
to State in the approximate amount which State had lost from NIS funds
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9. Mr. Dulles then asked whether or not State had any intention
of obtaining MIS funds for future years under the State budget.
.Jr. Armstrong said State had considered this but it did not appear
feasible: 1) because State had difficulty securing from the Congress
the consistent level fro-ii year to rear of .appropriations necessary to
keep MIS production consistent with JCS requirements; and 2) Staters
open budget hearings were incompatible with the security aspects of the
lIS Program.
10. Mr. Howe wanted to know if CIA proposed to take over the Bloc
economic intelligence responsibilities reposing in the Defense Agencies
as in the case of State. 11r. Amory replied that the Defense Agencies
had to maintain certain economic intelligence capabilities to serve
operational requirements in line with departmental missions., such as
submarine construction. Howrever, CIA was proposing to take on the
primary responsibility in 'hose areas where unnecessary duplication
existed in economic research on the Bloc, in particuJAr certain research
done by the Air Force involving plant analyses, and possibly in some
aspects relating to transportation.
11. Other points discussed included the size and budget support of
the MIS Program within State and as a whole, and the time required to
complete the entire Program. The meetin- closed titi.th Mr. Dulles restFting
his views on the proper division of responsibilities between State and
CIA, and within this fram~o give State additional fiscal support
at least to the extent of for FY 1955, which funds State could use
for any purpose which did not clearly duplicate work being done by CIA. 25X1 Al a
This could include review of CIA materials and correlation of then for
departmental use or could extend to projects in the free world where State
found itself short of personnel and confronted with increased loads as a
result of unforeseen developments in the world situation.
SuComment: 1&. Dulles appeared to state his final position on the
subject. He left no doubt that he could not further support State in the
allocation of responsibility for producing MIS Chapters VI on the Soviet
Bloc, but was willing to approve State's maintaining a small group of
Soviet Bloc economic analysts: 1) to analyze and interpret for State
Department users material prepared in ORR; 2) to examine the same critically
for purposes of effective participation in the national estimating process;
and 3) to fulfill unique departmental requirements on the Soviet Bloc.
Other than that the DCI felt com. el_led to make a clear-cut decision, that
would be comprehensive to Congressional committees and the NSC, to the
effect that primary responsibility for production of general economic
intelligence on the Soviet Bloc would be performed as a service of coon
concern by CIA.
25X1 A9a
ROBERT AUORY, JR.
Deputy Director/Intelligence
Distribution:
Original and 2 copies to DD/I
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