NOTES ON THE EARLY DCIS

• Collection: FOIA Collection
• Collection: Declassified Articles from Studies in Intelligence: The IC’s Journal for the Intelligence Professional
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• Document Release Date: July 30, 2014
• Case Number: F-2013-02322
• Publication Date: April 1, 1989

Approved for Release: 2014/07/29 000621340TITLE: Notes on the Early DCIsAUTHOR: William Henhoeffer and James HanrahanVOLUME: 33 ISSUE: Spring YEAR: 1989Approved for Release: 2014/07/29 000621340pproved for Release: 2014/07/29 000621340'STUDIES IINTELLIGENCEA collection of articles on the historical, operational, doctrinal, and theoretical aspects of intelligence.All statements of fact, opinion or analysis expressed in Studies in Intelligence are those ofthe authors. They do not necessarily reflect official positions or views of the CentralIntelligence Agency or any other US Government entity, past or present. Nothing in thecontents should be construed as asserting or implying US Government endorsement of anarticle's factual statements and interpretations.Approved for Release: 2014/07/29 000621340Souers speaks outApproved for Release: 2014/07/29 000621340NOTES ON THE EARLY DCIsWilliam HenhoefferJames HanrahanSECRETIn 1969, Ludwell Montague, a member of the CIA's Board of National Estimates,interviewed Rear Admiral Sidney W. Souers, the first Director of Central Intelligence(January?June 1946). Montague was gathering material for an official history of GeneralWalter Bedell Smith, the fourth DCI. Montague had come to know Souers well from 1944 to1950, when Souers successively served as Deputy Chief of Naval Intelligence, DCI, andExecutive Secretary of the National Security Council (NSC). As excerpts from the interviewreveal, Souers pulled few punches in talking about his predecessor, General William Donovan,Director of the Office of Strategic Services (OSS), and about his own successors as DCI: Lt.General Hoyt Vandenberg (June 1946?May 1947), Rear Admiral Roscoe Hillenkoetter (May1947?October 1950), Smith (October 1950?February 1953), and Allen Dulles (February1953?November 1961).Montague's BackgroundAs a colonel in Army Intelligence during World War II, Montague served as ExecutiveSecretary of the Joint Intelligence Committee (JIC). The committee was subordinate to theJoint Chiefs of Staff (JCS), and it was composed of representatives of the intelligencecomponents of the armed services, the Department of State, the Foreign Economic Adminis-tration, and the OSS. Montague opposed Donovan's 1944 proposal for a postwar CentralIntelligence Agency; he claimed that a plan that he himself worked on in his JIC capacity?JIC239/5, mentioned in the interview?was the basis for the Central Intelligence Group (CIG)established in 1946 and, by extension, for the CIA itself. Others have judged that the CIAembodies the fulfillment of Donovan's proposal and the discarding of JIC 239/5.After a brief postwar tour at the Department of State, Montague headed the CIG's CentralReports Staff, which produced a Daily Summary of Intelligence and a weekly wrapup forPresident Truman. When the CIA replaced the CIG, Montague helped set up the Office ofNational Estimates. He served as a member of the Board of National Estimates until hisretirement in 1971.Setting the StageBefore responding to Montague's specific questions, Souers reminisced about his careerand about the bureaucratic politics surrounding the creation of the CIA. Montague'sreconstruction of Souer's wide-ranging remarks, which follows, paints an interesting picture ofpostwar power politics in Washington. For the sake of coherence, we have inserted explanatoryinformation at appropriate points in the account.? ? ?Before the war, Souers was a Naval Intelligence reserve officer. Naval Intelligence as hethen knew it was chiefly concerned with plant security in the US and with target data onforeign industrial plants. Souers was assigned the task of obtaining target data on certainSECRET 27Approved for Release: 2014/07/29 000621340Approved for Release: 2014/07/29 000621340SECRET DC1sREAR ADMIRAL SIDNEY W. SOUERS, USNR23 JANUARY 1946-10 JUNE 1946LIEUTENANT GENERALHOYT S. VANDENBERG, USA10 JUNE 1946-1 MAY 1947GENERAL WALTER BEDELL SMITH, USA7 OCTOBER 1950-9 FEBRUARY 195328REAR ADMIRALROSCOE H. HILLENKOETTER, USN1 MAY 1947-7 OCTOBER 1950THE HONORABLE ALLEN W. DULLES26 FEBRUARY 1953-29 NOVEMBER 1961Approved for Release: 2014/07/29 000621340SECRETApproved for Release: 2014/07/29 000621340DC's SECRETchemical plants in Japan from the American industrial engineer who had designed and builtthem. The man was repelled by the idea. He felt an obligation of honor to his Japaneseemployers, and he was not disposed to facilitate the destruction of his own creations. Souers gothim to talk by putting forward some ignorant suppositions regarding those plants, which movedthe engineer to correct Souers' mistakes.Souers was not a Truman crony when he was made DCI. He had been a pillar of theDemocratic Party in St. Louis, so that Truman knew who he was, but they had never met.Souers recalls having been appalled when Truman was first nominated for the Senate. Histhought was, -I would not hire that man in my business for more than $250 a month." Souerslater became a warm admirer of and confidential adviser to the President.James Forrestal was Souers' particular friend in official Washington. They becameacquainted when Forrestal helped to finance Souers' reorganization of the General AmericanLife Insurance Company. When Forrestal became Secretary of the Navy, he asked Souers toaccept a position in the financial administration of the Navy Department, but Souers declined.If there was going to be a war, Souers wanted active service overseas.Souers became the Director of Intelligence at the headquarters of the Caribbean SeaFrontier in Puerto-Rico, where his chief concern was the protection of naval installations fromsabotage. His wife was not allowed to go to Puerto Rico. Lonely and bored, Souers finallyinvoked Forrestal's friendship in order to escape from Puerto Rico. Thus, he became DeputyChief of Naval Intelligence in Washington, under Commodore Thomas B. Inglis.Inglis opposed the 1944 Donovan plan providing for an independent and autocratic DCI,but he favored JIC 239/5, which provided for a CIA under the control of the Secretaries ofState, War, and Navy. In September 1945, President Truman instructed Secretary of StateJames Byrnes to develop a plan for organizing national intelligence. The final version of thisplan, which was submitted in December 1945, called for the Secretary of State to occupy themost powerful position.During the controversy over this plan, Souers prepared for Inglis a paper designed to getthe JCS to revive JIG 239/5. Inglis was for the paper, but he hesitated to sign it. Admiral ErnestJ. King, the Chief of Naval Operations, was thought to be violently opposed to any sort of CIA.Souers, however, persuaded Inglis that it was his duty to recommend the best solution. To theirrelief, King passed the proposal on to the JCS without comment. The JCS subsequentlyrecommended the JIG 239/5 solution to the Secretaries of War and Navy, which enabledForrestal to urge it upon Byrnes and Secretary of War Robert P. Patterson. It was the basis ofthe President's letter of 22 January 1946 that established a central intelligence service.Montague mentioned having seen a note from Souers to Commander Clark Clifford, thena White House naval aide, urging that the President be persuaded to adopt the JCS plan inpreference to the State Department one and remarking that this advice was disinterested, sinceSouers would not accept appointment as DCI, even if it were offered him. Souers was eager toget back to his business in St. Louis, but was stuck in Washington because he had promised tostay until the issue was resolved. Forrestal wanted Hillenkoetter to be the first DCI, butAdmirals Leahy and Denfeld vetoed Hillenkoetter and insisted on the appointment of Souers.This was not a matter of personal favor, since Leahy subsequently obtained the appointmentof Hillenkoetter, who had been his aide at Vichy. It was just that both knew that Souers wasfamiliar with the JIG 239/5 background and that Hillenkoetter was not. In the end, Souersreluctantly accepted the appointment, just to get the CIG started, with the understanding thathe would stay for only six months. Souers met Truman for the first time when he went to theWhite House to help draft the President's letter.SECRET 29Approved for Release: 2014/07/29 000621340Approved for Release: 2014/07/29 000621340SECRET DCIsOn being selected to be DCI, Souers was transferred from the Office of Naval Intelligenceto the Office of the Secretary of the Navy. He and Inglis were made rear admirals on the sameday.Truman regarded the CIG (and the CIA) as his personal intelligence service. Its job was tokeep him personally well informed of all that was going on in the outside world. That is whythere was so much pressure to have US operational information, as well as foreign intelligence,in the CIG Daily Summary.From the first, Souers was looking for a long-term successor. The Intelligence AdvisoryBoard (JAB), which advised the CIG, contained some candidates. Its regular members were theheads of the intelligence services of State, War, Navy, and the Air Force. Initially, these wereColonel Alfred McCormack of State, Lt. General Vandenberg of Army (G-2), Rear AdmiralInglis of Navy (ONI), and Brig. General George C. McDonald of Air Force (A-2). Occasionally,when invited by the DCI, the Director of the FBI or his representative attended JAB meetings.Vandenberg seemed a better candidate than Inglis because he was the nephew of Arthur.Vandenberg, a prominent Republican Senator. The Senator's support for legislation to establishthe CIA was especially desired, in order to keep it from becoming a party issue. But Gen.Vandenberg's ambition was to become Chief of Staff of the Air Force. Souers asked him if hethought that he would be made Chief of Staff just because he was handsome. Obviously, thebest way to make himself personally known to the President and the prospective Secretary ofDefense would be to serve in their presence as DCI. That persuaded Vandenberg to accept theDirectorship. He had no long-term interest in the CIA, but Souers was himself past caring aboutthat in his impatience to get back to St. Louis.Inglis was opposed to Vandenberg and Hillenkoetter. He evidently did indeed want a CIAbut only as a common service agency under IAB's control.Souers was never a member of the White House Staff. As DCI, he was a naval reserveofficer on active duty in the Office of the Secretary of the Navy. On being relieved as DCI, hewas relieved from active duty and was enrolled as a White House consultant, but he neverfunctioned in that capacity. He had no further contact with the White House, until he wascalled back to be Executive Secretary of the NSC in September 1947.The National Security Act of 1947 described the Secretary of Defense as -the principalassistant to the President in all matters relating to the national security.- That sentence wasintended to give the Secretary of Defense a status superior to that of the members of the JCS,who had been insisting that they were the President's principal advisers in relation to suchmatters, as they indeed had been from 1942 to 1947. Forrestal interpreted this sentence tomean that he was, in effect, Deputy President for National Security. He regarded the NSC asa coordinating mechanism subordinate to his prerogative as -Deputy President- and theExecutive Secretary and the DCI as his personal agents. He demanded that Souers andHillenkoetter establish their offices in the Pentagon next to his. They demurred, but Forrestalinsisted. Thereupon, they practiced a small deception on him. They had a one room in thePentagon, not too near to Forrestal's office, in which they kept one girl with two telephones andtwo squawk boxes. If Forrestal called one of them, the girl said that he was out at the moment.She then called him at his real office, and he returned Forrestal's call. Souers kept a car anddriver constantly ready. If summoned to Forrestal's office, he could get there almost as quicklyas, say, the Secretary of the Air Force could from within the Pentagon. Presumably,Hillenkoetter did the same thing.Eight months after Hillenkoetter took office as DCI and only five months after the passageof the National Security Act, the NSC set up a Survey Group to examine the CIA and -national30 SECRETApproved for Release: 2014/07/29 000621340Approved for Release: 2014/07/29 000621340DC/s SECRETorganization for intelligence.- The Survey Group, which was composed of Chairman AllenDulles, William H. Jackson, and Matthias F. Correa, submitted its findings to the NSC on 1January 1949. It proposed a substantial reorganization of the CIA and greater leadership for theCIA over the rest of the intelligence community.Specific Questions Answered By SouersWhy was the Survey Group set up? Was the NSC aware of some problem with regard tothe CIA?The NSC as a whole was unaware of any probleni with the CIA. Forrestalcertainly was aware of tension between Hillenkoetter and Inglis, but he thought thathe had resolved that by directing Inglis to support Hillenkoetter. He did not realizethat there was any particular problem requiring investigation. The origin of theSurvey Group was actually quite casual. Souers reminded Forrestal that the NSC wassupposed to supervise the CIA. Forrestal said that the NSC had no time for that andthat Souers should do it as Executive Secretary. Souers replied that he had no suchauthority. Moreover, if he had wanted to supervise the CIA, he would still be DCI.They agreed to set up an independent, outside group to keep check on the CIA fromtime to time for the NSC. They did not anticipate such a devastating report as thatwhich the Survey Group eventually rendered.Who chose Allen Dulles to head the Survey Group?Forrestal did. He chose all three members of the Group. Souers would not havechosen Dulles, whom he identified with the OSS, a bad model for the CIA. Donovanhad been arrogant and arbitrary; he had misled the President by sending himunevaluated information. Dulles was a member of Governor Thomas Dewey'sentourage, and he had been coaching Dewey to attack the CIA. That was mainlyabout Hillenkoetter's performance in relation to the riots in Bogota, Colombia, inApril 1948 that disrupted the conference preparing the charter for the OAS. The CIAwas blamed for failing to predict the riots, but Hillenkoetter maintained that Statehad ignored the CIA's warning. Dulles had also been receiving complaints againstHillenkoetter and the men surrounding him from former colleagues in the clandes-tine services. Thus, there may have been some thought of neutralizing these attacksby putting Dulles in charge of an official investigation of the CIA. But the mainconsideration was that Dulles was personally known to Forrestal, who was impressedby his reputation as a clandestine operator in Switzerland during the war.What about W. H. Jackson? Was the NSC aware that he was the originator of the -boardof directors- concept that Inglis advocated in his war on Hillenkoetter?Forrestal also picked Jackson. The choice had no doctrinal significance. It wasjust that Forrestal knew Jackson personally, and deemed him to be knowledgeableabout intelligence, particularly about the British system.Why Correa? He seems to have done nothing much, concerning himself only withcounterintelligence and relations with the FBI.Correa had had some counterintelligence experience, but, as in the cases ofDulles and Jackson, the main reason for this appointment was that Forrestal knewhim personally and deemed him knowledgeable. He had been Forrestal's favoriteaide, and he had been designated to work with Souers to defeat the State Departmentplan and to promote the -Navy plan,- which was actually JIC 239/5.SECRET 31Approved for Release: 2014/07/29 000621340Approved for Release: 2014/07/29 000621340SECRET DCIsHillenkoetter's response to the Survey Group report implied that Dulles was seeking todestroy Hillenkoetter in order to get his job. Was Dulles ever considered to succeedHillenkoetter?Dulles and Jackson were certainly not the disinterested and impartial investiga-tors that they were supposed to be. They were both prejudiced against Hillenkoetterbefore they began their survey. But the fact remains that Hillenkoetter was a disasteras DCI. He was not qualified to be DCI and should never have been appointed. Fromthe date of the Dulles-Jackson-Correa Report, 1 January 1949, it was generallyunderstood and agreed that Hillenkoetter must go. Many men were considered forappointment to succeed him, but Dulles was never considered, insofar as Souers wasaware. Certainly, Souers would never have recommended Dulles to be DCI. Dulles'interest was too narrowly concentrated on clandestine operations. Moreover, he wasof the "dictatorial" OSS school.If it was agreed that Hillenkoetter must go, why did it take 18 months to find areplacement?Because Truman hated Louis Johnson. In 1948, the Truman campaign was veryshort of money. Someone persuaded Johnson to help raise contributions by promisinghim his choice of a cabinet position. Truman knew nothing of that at the time andwas outraged when he heard of it, but felt bound by the commitment. Johnsoninsisted on being made Secretary of Defense. Truman kept Forrestal in office longafter everyone knew that he should have been relieved, just to avoid having toappoint Johnson. When Forrestal killed himself, further evasion was impossible.Secretary of State Dean Acheson refused to suggest a replacement for Hil-lenkoetter because he considered it inappropriate for him to do so. Johnson proposedMaj. General Joseph T. McNarney, which made good sense. As Deputy to Chief ofStaff General George C. Marshall in World War II, McNarney had drafted a directivestrengthening the role of the OSS. But Truman would not have McNarney, justbecause Johnson had proposed him. Johnson proposed a succession of other names,but Truman turned them all down, for the same reason.Who proposed Bedell Smith, and when?In early July, Souers told Truman that the outbreak of the Korean War made itimperative to replace Hillenkoetter without further delay. Truman responded byasking how Bedell Smith would do as DCI. Souers does not know who suggested Smithto Truman. Marshall might have, or Averell Harriman. Harriman had a high regardfor Smith, because Smith had made possible Harriman's escape from Moscow, byaccepting that ambassadorship when no one else would. But Souers thinks thatTruman may have thought of Smith himself. Truman had a high regard for Smith asAmbassador to Moscow and considered that he really understood the Russians.Truman would also have considered that Smith, a general who had been anambassador, would be acceptable to both State and Defense. It is highly unlikely thathis consideration would have gone any deeper than that. Smith was nominated on 18August 1950.How was Jackson chosen to be Smith's deputy?Smith came to Souers and said, "I know nothing whatever about this businessand need a deputy who does. Whom would you suggest?" Souers suggested Jackson,32 SECRETApproved for Release: 2014/07/29 000621340Approved for Release: 2014/07/29 000621340DCIs SECRETas the member of the Survey Group who had represented the cooperative approach?as distinguished from Dulles, who was of the -dictatorial- school.How did Dulles come to be chosen as DDP?Smith, prompted by Jackson, wanted Dulles to take charge of clandestineoperations, for which he was well suited by experience, but feared that Trumanwould veto the appointment of a Dewey partisan. Souers arranged for Truman toreceive Dulles at the White House, after which Truman consented to his appointmentas DDP.What is the story behind Smith's promotion?When Eisenhower was appointed Supreme Allied Commander in Europe, heasked for Smith to be his Chief of Staff. Truman said no. Smith was indispensable asDCI; besides, the DCI was a more important position than Chief of Staff. So Mai.General Alfred Gruenther was sent to be Eisenhower's Chief of Staff. Later,Eisenhower asked to have Gruenther made a four-star general. Truman was willing,but Souers reminded him of what he had said about the relative importance of beingDCI and suggwed that Smith also be given four stars. Truman directed the Army topromote Smith as well as Gruenther, but, when the promotion list came out, Smith'sname was not on it. Souers brought this to Truman's attention, and Truman refusedto promote anybody until Smith was promoted. Souers attributed the omission ofSmith's name to the animosity of Omar Bradley, Lucius Clay, and the West Pointclique in general toward Smith.Smith's appointment as Under Secretary of State cleared the way for Dulles to becomeDCI. Had it been intended from the first that Dulles should succeed Smith?Smith certainly never had any such intention. He disliked Dulles. He wanted toremain as DCI and hated the idea of going to State, but he was forced to go byPresident Eisenhower, whose wishes he could not refuse. Smith told Souers thatLucius Clay had persuaded Eisenhower that it would be improper for both thePresident and the DCI to be military men, which seems a far-fetched idea and aflimsy pretext. There was a great deal more impropriety in appointing a brother ofthe Secretary of State to be DCI.Was Smith's appointment as Under Secretary, then, a devious device to make Dulles DCI?Draw your own conclusions.SECRET 33Approved for Release: 2014/07/29 000621340