LETTER TO MR. W. K. SCOTT FROM (SANITIZED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R001300310006-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 19, 2016
• Document Release Date: February 15, 2007
• Sequence Number: 6
• Publication Date: September 16, 1953
• Content Type: LETTER

Approved For Release 2007
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ftnc*rely yours
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15 September 1953
CO; Addressee Orig & 1
Signer - 2a/
AD/CD -
Cable Branch - 1
RQM/OIS - 1
CON F! sfCUR1T. -%TIC N
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S EP 16 1953
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departmental papers. The accompanying chart presents the findings of an
EIC survey of professional personnel engaged in economic research on the
Soviet Bloc, effective 1 January 1953. Although the number of profeessiona45X9
personnel conducting economic research F- lit is not
believed that the totals of the other agencies have changed significantly.
6. Points 1 through 5 above argue that CIA should have responsi-
bility for economic intelligence on the Soviet Bloc as a central service
of common concern. However, it must be emphasized that this assignment of
responsibilities should not preclude research on this subject in the other
IAC agencies. It is essential that the other IAC agencies be permitted to
do research in this field, because CIA's research effort will not be able
to meet all of the needs of other agencies. The Air Targets units in Air
Force, for example, require detailed industrial plant analyses and CIA is
not prepared to satisfy all Air Force requirements in terms of substantive
detail, focus, or timing. Similar situations exist in relation to the
requirements of other IAC agencies and these agencies must be authorized to
produce supplementary intelligence as required. CIA has developed its
research materials on the Soviet Bloc economy to the point where the need
for supplementary research by other IAC agencies has been considerably
reduced.
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BASIS FOR PROPOSED ALLOCATION OF ECONOMIC
INTELLIGENCE PRODUCTION RESPONSIBILITIES
It is proposed that CIA be assigned responsibility for production of
economic intelligence on the Soviet Bloc as a central service of common
concern. Other agencies may draw on this intelligence produced by CIA
and may produce such additional economic intelligence on the Soviet Bloc
as is required to meet their departmental responsibilities. The reasoning
behind this proposed allocation is as followst
1. 'While it might be possible to separate out some subjects for
primary allocation to individual agencies, as a general proposition the
numerous subjects requiring economic research are not readily separable,
as is assumed in the Department of State proposal (TAB A). To the contrary
they are most effectively and efficiently handled in an integrated way.
To cite one example, a separation of research on the standard of living
from research on agriculture, as proposed by the Department of State draft,
would yield a distorted, compartmentalized conclusion and would not permit
a meaningful analysis of a particular situation. The interrelationship of
these two subjects was clearly demonstrated by the recent Malenkov speech
and by the related food and living standard problems which prompted the
recent outbreaks in East Germany. Another example of the irrationality of
separation is found in the close connection of research on government plans
and research on sectors of industry. The Soviet practice of giving
industrial production data as percentages of planned accomplishment is
well known and statistical data on Soviet industry are often presented in
relationship to plan goals. Therefore, research on Soviet plans should
not be separated from research on sectors of Soviet industry, as proposed
in the Department of State draft. Many, many more examples could be given.
2. It is important to have centralized and integrated economic
research on this area if the reports and statistical data are to be made
reasonably consistent. One of the main problems for the consumer of
economic intelligence in Washington isthat numerous reports on related
subjects contain conflicting data. A trade report, for example, might
give one figure for Soviet petroleum exports while a petroleum study might
have quite a different figure. Allocating research on international trade
to one agency and research on industries such as petroleum to another simply
compounds this difficulty. This is simply one example of hundreds that
might be cited.
3. Because of the paucity of information caused by Soviet Bloc
security restrictions, any meaningful research on the Bloc requires
intensive analysis by a large number of highly trained personnel using all
sources of information - some of which are highly sensitive. It would not
be possible for any single agency to justify hiring the number of personnel
DOC- 1_JMENT NO.
NO CHANG
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required to service other agencies solely on the basis of its departmental
responsibilities. However, this effort could be justified by ORR/CIA
working for all agencies as a service of common concern.
1. As recognized in the statement of "Policies" in the proposed DCID
"any agency may make such studies as it believes necessary to supplement
intelligence obtained from other agencies in order to fulfill its agency
functions. . . ." However, research to meet specific departmental needs
is usually designed for a particular purpose and does not provide the
detailed intelligence research required by other agencies which may wish
to focus the research material on quite different departmental problems.
To undertake the depth and breadth of research needed for economic intelli-
gence studies designed to serve more than one agency would require more
effort than could be justified by one agency's departmental requirements;
and, contrary to NSCID 3, paragraph 1, c C4), would require a departmental
intelligence component to develop intelligence in fields outside its
dominant interest. For example, certain covert CIA offices require studies
of the organization of the Soviet economy that are much more detailed than
would ever be provided by DRS/O]R in meeting its departmental responsi-
bilities. If, on the other hand, ORR/CTA were to prepare detailed research
papers on this subject as a service of common concern they would not be
specifically focused on a departmental problem and would be sufficiently
detailed to be useful to a number of consumers intensely interested in this
subject including State, Air Force (Air Targets), CIA (LID/P), etc. Such
studies would of necessity include: details of ministerial organization;
lines of authority; inter-relationships between activities in one ministry
(sales, supply, etc.) and between the different ministries; locational
aspects; key personnel, etc. This again is only one example of many that
might be cited. Very little imagination is required to extend this reasoning
to such fields as international trade, economic policies, government budgets,
etc.
5. If any agency were to be allocated the primary or dominant interest
in subjects such as these, it would be expected to provide detailed research
studies on them as a service of.common concern to the rest of the community.
As noted in the statement of "Policies" in the proposed DCID, "any agency
charged with primary responsibility in a particular field,,,.will, normally
carry out all or most of the research in that field." The Department of
State, for example, would require over a hundred professional personnel to
undertake the research required to satisfy the needs of all agencies for
intelligence production on those subjects for which it would be responsible
in the Department of State draft, Moreover, although it is outside the
bounds of this intellectual presentation, it is clear from the present mood
of Congress that the Department of State cannot expect to augment its
economic research staff to this extent. The number of personnel in the IAC
agencies today, plus or minus any changes they might reasonably be expected
to make, would probably be adequate to meet staff requirements for economic
intelligence (including Air Force needs for target studies) if they utilize
the results of current and future ORR/CIA, research in preparing their
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ANNEX C TO DCI DIRECTIVE 15/1t
RESPONSIBILITIES OF THE CENTRAL INTELLIG CE AGEJY
1. Economic geography, including magnitude, location and
quality of natural resources and potentialities for
exploiting such resources.
2. Studies of non-military commodities, including analysis
of production, stocks, requirements, and consumption
patterns.
3. Analysis of plant capacity, technology, and other
factors affecting output of various industries,
including mining, electric power, and manufacturing.
?i. Inter-industry studies.
5. Transportation and communications, drawing upon the
work of Defense agencies.
b. Agricultural production and technology.
7. Clandestine trade and other covert economic activities,
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IAC-)-22/1 (Revised)
29 May 1951
TFRAS OF REFERENCE FOR TIE
ECONOMIC INTELLIGENCE COMMITTEE
1. The Director of Central Intelligence with the concurrence of the members
of the IAC has established an Economic Intelligence Committee, on which shall
sit designated representatives of those agencies charged with primary
responsibility for foreign national security intelligence, i.e., the
Departments of the ArnV, Navy, Air Force, State, the Joint Chiefs of Staff,
and the Central Intelligence Agency. Any other agency whose interest or
competence may be relevant to the particular problem under examination may
be invited also to sit with the Economic Intelligence Committee.
2. The representative from the Central Intelligence Agency shall serve
as Chairman of the Economic Intelligence Committee, and he shall supply
the secretariat.
3. The Economic Intelligence Committee.shallt
a. Arrange concerted economic intelligence support, on
selected major issues, for studies of interagency interest
requested by the Intelligence Advisory Committee, the Joint
Chiefs of Staff, etc*
b. Arrange for the mobilization of the data and analysis
available, relevant to appropriate operating problems of any
member agency requesting assistance, or of any other agency
dealing with economic security problems, which may request
assistance.
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c? Examine continuing programs of fundamental economic
research relating to the national security throughout the United
States Government and recommend to the IAC for appropriate action
allocation of responsibility for specific fields of inquiry where
such allocation appears appropriate.
d. Review and report to the TAG from time to time, on the
pertinence, extent, and quality of the data and analyses available,
bearing on the issues analyzed.
e. Recommend to the IAC for appropriate action priorities and
allocation of responsibility for the collection and analysis to fill
specific gaps in the economic intelligence needed for national security.
f. Maintain a continuing review of the foreign economic intelli-
gence activities of the United States Government as they relate to the
national security*
g. Make such special reviews of economic intelligence distri-
bution and processing procedures as may appear useful, and make
recommendations for improvement to the Intelligence Advisory Committee,
which shall have responsibility for instituting such action as it may
Judge appropriate.
he Prepare coordinated reports which present the best available
foreign economic intelligence,
4. In carrying out its responsibilities, the Economic intelligence Committee
may set up such subcommittees and working parties as may be judged necessary.
5e When arir member agency is unable to accept a recommendation of the
Committee, the matter may be referred to the Intelligence Advisory Committee.
All agencies directly concerned shall be asked to sit with the Intelligence
Advisory Committee for the consideration of such questions.
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)RAI DUM FOR: Director of Central Intelligence
SUBJECT : Proposed CIA Position on a DCID 1511
REFERS[JCES : (A) Letter to Acting Director of Central Intelligence
from the Special Assistant for Intelligence,
Department of State, 28 August 1953
(B) Department of State Draft of a Proposed DCID 15/1,
17 August 1953 (Tab A)
A. Problem.
To present and explain a proposed CIA position in regard to a DCID
15/1 and to provide a draft Directive representing this position.
B. Facts Bearing on the Problem.
1. NSCII) 1 states that the Director of Central Intelligence shall
perform for the benefit of the existing intelligence agencies such
services of common concern as the National Security Council determines
can be more efficiently accomplished centrally. By implication in NSCID 3,
the production of economic intelligence on the Soviet Bloc is of common
concern to the intelligence agencies. Research in depth on the Soviet
economy in its entirety can, in view of ORR, be more efficiently accomplished
centrally, and therefore logically falls to CIA (Tab B).
2. NSCID 3 states that any intelligence agency may call upon other
appropriate agencies for intelligence which does not fall within its own
field of dominant interest and that such requests shall be made upon the
agencies in accordance with their production capabilities and dominant
interest. There is no implication in that Directive that the Department
of State or the Military Services have dominant interest in the economic
intelligence field. Furthermore, the Department of State, as an example,
cannot undertake the depth of research required to meet the needs of other
intelligence agencies in those fields which are allocated to the
Department of State in its draft proposal (Tab A).
3. NSCID 3 further states that the Director of Central Intelligence
will seek to minimize the necessity for any agency to develop intelligence
in fields outside its dominant interests. It is understood that the
research organizations of CIA were, in part, established to assist the
Director of Central Intelligence in providing intelligence production in
areas not of dominant interest to individual intelligence agencies.
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db t
4. With reference to DCID 3/4, the assignment of production
responsibility in the field of economic intelligence is not comparable
with the problem of allocating such responsibility in the field of
scientific and technical intelligence. DCID 3/4 divides: responsibility
in the scientific and technical field between the Department of Defense
and the CIA, allocating those subjects that are clearly of direct military
importance to Defense and assigning the subject of fundamental research
on the basic sciences and medicine to CIA. The various subjects requiring
research in the field of economic intelligence are so interrelated (as
noted in Tab B) that any artificial separation of research responsibility
would reduce the efficiency- and. effectiveness of the total research effort.
5. As a result of the recognition over two years ago of the paucity
25X9 of economic intelligence research on the Soviet Bloc, ORR, as a matter of
EaM common concern, shifted its research effort from world-wide coverage to a
concentration on the Soviet Bloc, and greatly simale ned this effort.
As of January 1953 doing full time
A research on the ASo a oc; a Department o State had 29, including
those working on NIS; the Department of the Army had 31; the Department
of the Navy had 15; and the Department of the Air Force had 219 (see
chart, Tab B). It is understood that the relative proportions have not
changed significantly since that time.
Co Discussion.
1. At the present time, CIA has in its Office of Research and Reports
the broadest research program on the Soviet Bloc and the largest number of
personnel engaged in such research within the intelligence community. The
only other sizable organization conducting such research is in the
Department of the Air Force. However, this Air Force effort is primarily
concerned with target intelligence, and the emphasis is on the production
of specialized studies in support of war plans. The Air Force has been
drawing increasingly upon the resources of CIA as this Agency has developed
competence in the field of Soviet Bloc economic research.
2. The Department of State proposal for a DCID 15/1 (Tab A) is
unrealistic in the light of the Department's present and foreseeable
research capabilities. On the other hand, the ORR proposal for a DC]]) 15/1
(Tab C) reflects the existing capabilities to produce economic intelligence
on the Soviet Bloc and the lack of any dominant interest in the field by
either the Department of State or the Military Services. In essence, the
ORB proposal states that CIA will produce, as a matter of common concern,
the bulk of the economic intelligence on the Soviet Bloc and that other
agencies may supplement this for their departmental needs as necessary.
3. The ORR proposal is couched in such terms as not to specify the
numbers of people which other agencies require in the discharge of their
departmental responsibilities for Soviet Bloc economic intelligence, nor
does it attempt to allocate in rigid fashion the specific areas in which
other agencies may do such research.
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D. Conclusions.
That neither the Department of State nor the Military Services
have dominant interest or primary responsibilities for the production
of economic intelligence on the Soviet Bloc; that this intelligence
production is a matter of common concern and can be most efficiently
accomplished centrally in CIA, because it requires research in depth
and an integrated approach to the entire economic structure; that the
Department of State proposal does not abide by the intent of NSCID 3
to minimize the necessity for any agency to develop intelligence
production capabilities in fields outside its dominant interest; and,
that other agencies should supplement the economic intelligence
production on the Soviet Bloc produced by CIA in order to meet their
departmental needs.
E. Action Recommended.
That, if a DCID 15/1 is to be considered at this time, the DCI
accept the draft proposal contained in Tab C as the position of this
Agency.
ROBERT AMORY, Jr.
Deputy Director/Intelligence
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Security Information
]J September 1953
MEMORANDUM FOR THE DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE
SUBJECT: State's Proposed Directive on Bloc Economic Intelli-
gence Production
Attached find fairly detailed staff study of Park
Armstrong's proposed directive on Bloc Economic Intelli-
gence Production.
I suggest that as the next move you send the
attached letter to Armstrong and see how he reacts. Frankly
the status quo is OK because I as DDI last spring instructed
AD/NE to look to ORR as the primary contributor of economic
sections of estimates on the Bloc. But if Park insists on a
directive, let it be very simple and to the point.
I have tried not to labor the decisive point that he
just doesn't have a tiny fraction of the resources he would
require to implement his draft but I do feel a minor hint
is in order, as in my last paragraph, that. we are not un-
aware of the inconsistency of his asking us to take over
certain basic responsibilities of State and simultaneously
seeking more functions)
ROBERT AMORY, JR.
Deputy Director/Intelligence
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