SECOND ANNUAL PROGRESS REPORT TO THE IAC OF THE ECONOMIC INTELLIGENCE COMMITTEE JULY 1952 - JUNE 1953

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00750A000700070050-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: March 2, 2001
• Sequence Number: 50
• Publication Date: August 15, 1953
• Content Type: REPORT

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T,M1 niT yyrmt TTTT_%ITTRA TYr1TT
15 August 1953
SECOND ANNUAL PROGRESS REPORT TO THE IAC OF THE
ECONOMIC INTELLIGENCE COMMITTEE
July 1952 - June 1953
C
I. Authority for the Economic Intelligence Committee
In accordance with a directive from the National Security Council
(NSCID 15, issued 13 June 1951 and corrected 22 June 1951), the Director
of Central Intelligence, in June 1951, formally established the Economic
Intelligence Committee. This action and the terms of reference for the
Committee were concurred in by the IAC. (IAC D-.22/l, revised 29 May 1951)
II. Organization of the Economic Intelligence Committee (Tab A)
The EIC, chaired by the Assistant Director for Research and Reports,
CIA, is composed of representatives of the IAC agencies who sit as full
members, and representatives of some twenty non-IAC agencies who, as
associate members, are invited to sit with the main committee on matters
in which their respective departments have particular competence and
responsibility.
Assisting the main committee in its responsibility for reviewing the
adequacy of economic intelligence and for the preparation of basic research
papers are nine permanent subcommittees covering major foreign economic
fields. Three additional subcommittees have been proposed and will be
established within the next month in order to provide more comprehensive
coverage of the major economic sectors. In addition to these subcommittees
on substantive economic fields, the EIC has activated a subcommittee on
Collection Requirements and Facilities for Collation.
When the EIC is required to focus available economic intelligence on
specific problems of importance to national intelligence, special working
groups are established on an ad hoc basis.
III. Responsibilities and Accomplishments of the Economic Intelligence
Committee
The major responsibilities placed by the IAC on the ETC in its terms
of reference are outlined below, together with an indication of the EICts
progress in the past year in meeting these responsibilities. The respon-
sibilities outlined in section 3 f, g and h in the IAC terms of reference
are interrelated with 3 a through e and are reported upon under these
headings.. (Tabs B and C list the entire EIC production over the past two
years.)
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a# Res onnsib lity: "The EIC shall arrange_ ncerted
economic !e 1z once support, on selected for issu or
s u e n er-agency n crest requested by the Intelligence
Advisory Committee, the Joint Chiefs of Staff, etc?"
rrro res~sr The EIC has produced on a coordinated
basis nine mayor studies, related to the national intelligence
issues at the request of the IAC or the Office of National
Estimates, CIA, on such important problems as Communist China's
trade and the shipping involved in this trade, the capacity of
the Trans-Siberian railroad, and the economic factors relating
to Soviet capability for electromagnetic warfare. Four of the
nine studies have been directly coordinated with
on a fact-finding basis. (Tab B)
b. Res onsibilit i "The EIC shall arrange for the
mobilization o he ata and analysis available, relevant to
appropria e operating problem of any member agency requesting
assistance, or of any other agency dealing with economic
security problems) which may request assistance."
'Progress: Two EIC studies, initiated in response to
requests rom individual member agencies, have been completed,
Three others, are still in progress. In addition the EIC has
initiated four studies to fill important intelligence gaps.
(Tab B)
c. Responsibilit "The EIC shall examine continuing
ro rams mental economic research re ating to the
na ionaT security throughout the United States Government and
recommend to the IAC for appropriate action allocation of
responsibility for specific fields of inquiry where such allo-
cation appears appropriate."
Progress= The ETC has completed eight survey reports
relating T -o economic intelligence research programs; three
reports were concerned with the allocation of US Government
personnel engaged in economic intelligence research; one report
reviewed the adequacy of research programs on Communist China,
one report reviewed the intelligence program
and the remaining three reports were in the continuing series
of periodic EIC surveys of the status of all economic intelligence
research projects on the Soviet Bloc undertaken within the US
Government. Two other surveys to meet this responsibility are in
progress. (Tab C)
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d. Responsibilit "The EIC shall review., and report to
the IAC from time to m*e on the ertinence extent, and
quality of the data and analyses ava a tee, hearing on the
issues analyzed,ft
Progress: While the EIC naturally looks for guidance
on economic in e ligence priorities from the TAC, ONE, CIA,
and the individual departments, the EIC also seeks through its
subcommittees to identify, on its own initiative, those priority
intelligence deficiencies which require action by the intelli-
gence community, In this regard, six survey reports have been
completed, and three others are in process, on the priority
research and collection deficiencies for major economic intelli-
gence fields. (Tab C)
e, Res onsib is "The EIC shall recommend to the IAC
for appropria e action priorities and allocation_of responsi-
bilities for the collection and analysis to fill specific gaps
in the economic ante gence needed for national security."
Progress: The ETC, through its Subcommittee on
Requiremen s an acilities for Collation, has assisted in the
development of three special collection programs for the IAC,
namely:
reeportingprogram; and an instruction for
a peripheral
lr
the uid, nce of economic re ortingg officers It also
has prepare two reports on the facilities for col ating intelli-
gence data, including a report on the handling of foreign
language materials which contributed to the prepara ion of
SG D on this subject. In addition, the Subcommittee has
prepared and coordinated the requirements of the IAC agencies
for economic reporting by the Foreign Service on some 111
Foreign Service posts and has completed the requirements for
world-wide periodic Foreign Service reporting on minerals.
IV. Major Problems and Objectives
In the coming year the EIC will seek to meet its responsibilities as
outlined above and will continue to place its greatest emphasis on problms
concerning the Soviet Bloc, The EIC feels that, in general, satisfactory
progress has been made over the past 'ear~.but rerognizeb that there area
imp sc an :. dofic :erc e req firing' special . attention:
a. Certain projects have tended to be unduly drawn out
and improperly directed and coordinated. The study of "The
Economic Capability of the Soviet Bloc to Support a General
25X1 C
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War" is a specific case in point. On this project it appears
that efforts to use the "input-outputs' technique were premature
in terms of inter-agency capabilities. Moreover, the lack of
coordination through the Working Group resulted in the prepara-
tion of a CIA rather than an EIC paper. Nevertheless, the ex-
perience gained in the use of this input-output technique was
valuable and did provide information useful for CIA contribu.-,
tions to NIEss 6L and 65. As a result of a recent request of
the IAC, the EIC will review work already completed on this
subject and will undertake another study to provide whatever
additional intelligence is required.
b. The EIC as a group has not yet analyzed the meaning
of several of the government-wide research and personnel surveys
completed through the EIC Secretariat. Each agency has simply
used these "inventory" findings for their own purposes*
c. The EIC has not devoted sufficient time to guidance and
review of subcommittee activities on substance research problems.
Of necessity a large part of the EIC effort up to now has been
on inventories and procedural matters, such as the subcommittee
surveys,
d. While the completed Subcommittee Surveys noting priority
research deficiencies have been approved by the EIC and have
een useful for working level coordination, they have not been
analyzed by the EIC for the purpose of taking coordinated action
among the individual agency research programs.
e. The surveys noted in d above have also outlined priority
collection deficiencies. While some collection action has been
taken on these gaps, a great deal more needs to be done through
the Requirements Subcommittee on coordinated basis. In addition,
field coordination needs to be encouraged,
f. Surveys of some important fields have not been initiated
because Subcommittees have not yet been established to cover all
major economic sectors.
These problems will have the concerted attention of the EIC over the
next 12 months.
Otto E. Gutkb
Chairman
Economic Intelligence Committee
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