MEMO FOR MAJOR GENERAL HAROLD AARON AND REAR ADMIRAL E.F. RECTANUS FROM EDWARD W. PROCTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000700110020-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: February 7, 2006
• Sequence Number: 20
• Publication Date: August 14, 1974
• Content Type: MF

Approved
or Rely 2006/03/10 : CI X80 @ 4 0 ' &1j Q gq
MEMORANDUM FOR: Assistant Chief of Staff for
Intelligenc e
Department of the Army
Mr. Colby suggested that I send you the
attached material on CIA's Military Economic
Advisory Panel.
As a first stage, the Panel concentrated on
the work done solely in CIA. The members of
the Panel were, however, broadly exposed to all
the literature--including the criticisms of CIA's
work- -in the field. During the coming year they
will have the opportunity to speak to consumers
and other intelligence producers in their sphere
of interest.
Deputy Director for Intelligence
LACES
10-101
FORMH lo l REP
WH II CH MAY BE USED.
14 August 1974
Proctor (DATE)
Ed
~rdW.
Rear Admiral E. F. Rectanus
MEMORANDUM FOR- ;Director of Naval Intelligence
Department of the Navy
Mr. Colby suggested that I send you the
attached material on CIA's Military Economic
Advisory Panel.
As a first stage, the Panel concentrated on
the work done solely in CIA. The members of
the Panel were, however, broadly exposed to all
the literature--including the criticisms of CIA's
work--in the field. During the coming year they
will have the opportunity to speak to consumers
and other intelligence producers in their sphere
of interest.
~ 14 August 1914
dti rd W. Proctor (DATE )
Deputy Director for Intelligence
0 NO - RELA ES 4 lOI WHICH MAY F BE MUSED101
1 AUG 5
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 App
Ml'. VY .1111CL111 11 . 1v1%-;.L c.L1
MEMORANP"M FOR: Special Assistant to the
oved For Relevas 2006/03/10 :AIB?8ROQ01100 0-
Security
Main Treasury
Mr. Colby suggested that I send you the
attached material on CIA's Military Economic
Advisory Panel.
As a first stage, the Panel concentrated on
the work done solely in CIA. The members of
the Panel were, however, broadly exposed to all
the literature--including the criticisms of CIA's
work- -in the field. During the coming year they
will have the opportunity to speak to consumers
and other intelligence producers in their sphere
of interest. 14 August 1974
w rd W. Proctor MATE)
Depu Director for Intelligence
FORM NO. lol REPLACES FORM 10-101
1 AUG 54 WHICH MAY BE USED.
Major General G. J. Keegan
MEMORANDUM FOR: Assistant Chief of Staff,
Intelligence
Department of the Air Force
Mr. Colby suggested that I send
attached material on CIA's Military You the
Advisory Panel. Economic
As a first stage, the Panel concentrated on
the work done solely in CIA.
the Panel were, however, broadThe members Of
ly exposed to all
the literature--including the criticisms of CIA's
work--in the field. During the corning
will have the opportunity to speak to o sumersy
and other intelligence producers in their sphere
of interest.
14 August 1974
Edwarld W. Proctor (DATE)
FORM N Deputy Director for Intelligence
R
101
EPLACES FORM 10.101
WHICH MAY BE USED.
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 Appro
of interest.
Mr. Leo Cherne j
ed Ng1 M06109/:1 PFIAB 801301495R0 0110020?
Old Executive Office Building
Mr. Colby suggested that I send you the
attached material on CIA's Military Economic
Advisory Panel.
As a first stage, the Panel concentrated on
the work done solely in CIA. The members of
the Panel were, however, broadly exposed to all
the literature- -including the criticisms of CIA's
work- -in the field. During the coming year they
will have the opportunity to speak to consumers
and other intelligence producers in their sphere
14 August 1974
'rd`~ Proctor (DATE)
W
W.
Edwa
Deputy Director for Intelligence
ED.
F ORM t AUGN54 '01 WHICHCMAYFBEMUS10-101
Mr. William Hyland
MEMORANDUM FOR: Director, Bureau of
Intelligence and Research
Department of State
Mr. Colby suggested that I send you the
attached material on CIA's Military Economic
Advisory Panel.
As a first stage, the Panel concentrated on
the work done solely in CIA. The members of
the Panel were, however, broadly exposed to all
the literature--including the criticisms of CIA's
work- -in the field. During the coming year they
will have the opportunity to speak to consumers
and other intelligence producers in their sphere
of interest.
14 August 1974
Edwar W. Proctor (DATE)
Deputy Director for Intelligence
FORM N '0' WHICH RELACES
MAY FORM
1 AUG 54
BE USED. 1
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U,_
Executive Registry
MEMORANDUM FOR: Director of Central Intelligence
FROM Deputy Director for Intelligence
SUBJECT First Annual Report of the Military
Economic Advisory Panel
1. As you know, last year I formed a panel of
consultants to advise me on the adequacy, validity
and usefulness of our military economic analysis work
and on ways to improve it. The membership of the
Panel includes:
2. A copy of the first report of the Panel is
attached. It is a sound document with suggestions and
recommendations that are well considered and worthy
of our attention. The report is generally commendatory
of our work, but we by no means get off scot-free. I
will highlight the principal points made and comment
briefly on our plans to do work along the lines suggested.
You may wish to consult the full report for greater
detail.
25X1
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3. From my point of view, the principal con-
clusions inthe report are that we should continue
to focus on'aggregate money values as an overall
measure of the Soviet military effort and its major
components and that the direct costing method we
have been using is basically sound. These conclusions
came after a thorough review of various alternative
approaches and discussions of the kinds of problems
we have with some of our consumers. In this connection
the Panel had three recommendations:
--Technical complexity: The Panel recommended
that a comprehensive and authoritative manual
be prepared to fully document the complex pro-
cedures of direct costing and to explain the
ways the results can and cannot be used. The
basic computer program documentation can probably
be completed in FY-1975, but the full data base
documentation cannot be achieved until FY-1976.
--Problems of effectively communicating the results
of the analysis: Several suggestions addressed
the problem of how to improve consumer understand-
ing and acceptance of military economic measures.
One was to broaden' the work by including--in
addition to annual military budget-flows--measures
of annual value of inventory of military stocks.
Another was to commission a theoretical study by
an external research contractor to examine the
conceptual issues in measuring and comparing
defense efforts and burdens. Both these suggestions
are good ones, and I will have them pursued on
a priority basis.
I
--Finally, the Panel stressed the need for greater
openness of communications. There were mixed
views on how far to carry this openness, but
as a general principal we are encouraged to
relax existing barriers if at all possible.
In your briefing of Senator Proxmire, and his
subsequent issuance of the unclassified portion
of the hearings, you have already taken steps
to accommodate the Panel's suggestions. I will
give further thought to the pros and cons of
freer use of our data with the Proxmire Sub-
committee and others and report to you at a
later date.
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4. In commenting on our work on the Soviet economy
in generals the Panel described OER as "an important
national resource whose work makes a major contribution
to Western appreciation of Soviet reality." The Panel
emphasized the need to continue our annual estimates
of Soviet national income and product (GNP) and expressed
some concern about what it viewed as a "disposition to
reduce the effort devoted to this topic." Although the
Panel's views on this matter might reflect some parochial
bias of academic economists, I share their concern and
intend to do what I can to preserve this capability
against the erosive effects of tight personnel ceilings
d
d
d
f
i
f
h
eman
an
the
s
or more work on the econom
es o
t
e
Free World.
5. I met with the Panel in late July to discuss
these and other aspects of their report. I will ask
them to meet again later this year to review the steps
being taken to meet their suggestions and to provide
additional guidance to the Offices of Economic Research
and Strategic Research on their research programs for
FY-1975. I view the Panel as a continuing body which
will meet one or more times a year to provide independent
appraisals of our work.! The present members have agreed
to continue to serve to'the extent that their other
professional duties permit. Furthermore, in a private
session with the members of the Panel, the Chairman
strongly recommended that John Paisley--who recently
retired--be asked to become a member of the group. I
am pleased to report that John has accepted my invitation
to do so.
25X1
EDWARD W. PRUUTUR
Deputy Director for Intelligence
Attachment:
First Report of the
Military Economic
Advisory Panel
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SUBJECT: First Annual Report of the Military
Economic Advisory Panel
Distribution:
Orig. - Addressee w/att.
1 - ER w/att.
1 -
Mr. Carver w/att.
1 -
Gen. G
raham w/att.
1 -
Adm. d
e Poix w/att.
1 -
Mr. Sc
hlesinger w/att.
1 -
D/OER
w/att.
2 -
DDI
2 -
D/OSR
1 -
SR/PA
OD/OSR:I
(6 August 1974)
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