FIFTH SESSION: THE END OF THE CIVIL WAR TO PEARL HARBOR
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CIA-RDP91-00587R000201000007-4
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FIFTH SESSION
The End o[ the Clvll War to Pearl Harbor
A landmark court decision regazding the nation's intelligence service stems from the Civil
War. William A. Uoyd, under personal contract to President Lincoln, was sent south to
collect tactical and political information. He was to be paid 5200 a month, but when the war
ended and he returned north, his case officer had been assassinated and he was reimbursed
for expenses only. He took the matter to the Court of Claims seeking additional compensa-
tion.
The US. Supreme Court, in deciding the case [92 US 105, 105-107 (1876) Enoch Totten,
Admr., App., vs. United States], acknowledged that the President had the authority to employ
secret agents, that all such agent contracts aze binding on the govennment, and that the sums
should be paid from the Contingent Fund. Yet, because Uoyd had taken the matter to the
courts, it ruled against him, stating:
"The service stipulated by the contract was a secret service; the information sought was to
be obtained clandestinely and was to be communicated privately; the employment and the
service were to be equally concealed. Both employer and agent must have understood that the
lips of the other were to be forever sealed respecting the relation of either to the matter. This
condition of the engagement was implied by the nature of the employment, and is implied in
all secret employments of the Government ... If upon contracts of such matters an action
against the Government could be maintained in the Court of Claims ...the whole service in
any case and the manner of its dischazge with the details of its dealings with individuals and
officers, might be exposed to the serious detriment of the public. A secret service, with
liability to publicity in this way, would be impossible ...The publicity produced by an action
would itself be a breach of a contract of that kind, and thus defeat recovery ..: '
In this decision are the roots for the so-called "Glomaz defense," that is, the government
is not admitting such information exists, but j~ it does indeed exist, it would be properly
classified and could not be disclosed. The Supreme Court decision put it this way:
"It may be stated, as a general principle, that public policy forbids the maintenance of any
suit in a court of justice, the trial of which would inevitably lead to the disclosure of matters
which the law itself regazds as confidential, and respecting which it will not allow the
confidence to be violated ...Much greater reason exists for the application of the principle to
cases of contract for secret services with the Government, as the existence of a contract of
that kind is itself a fact not to be disclosed."
[Similaz language stressing the necessity of secrery in intelligence matters may be found in
the 1984 decision of the U.S. Supreme Court in the Sims case. For example, "Disclosure of
the subject matter of the Agenry's reseazch ei~orts and inquiries may compromise the
Agency's ability to gather intelligence as much as disclosure of the identities of intelligence
sources ...The inquiries pursued by the Agency can often tell our adversaries something that
is of value to them ...Accordingly, the Duector, in exercising his authority ...has the power
to withhold superficially innocuous infonmation on the ground that it might enable an
observer to discover the .identity of an intelligence source."
[The high court also made a telling observation that is, no doubt, not unfamiliaz to those
in this room: "Foreign intelligence services have both the capacity to gather and analyze any
information that is in the public domain and the substantial expertise in deducing the
identities of intelligence sources from seemingly unimportant details ... In this context, the
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very nature of the intelligence apparatus of any country is to try to find out the concerns of
others; bits and pieces of data may aid in piecing together bits of other information even when
the individual piece is not of obvious importance in itself." The court noted that even
disclosure of the fact that the CIA subscribes to an obscure but publicly available Eastern
European technical journal could thwart the Agency's efforts to exploit its value as a source
of intelligence infonmation. "A foreign government," it said, "can learn a great deal about the
Agency's activities by knowing the public sources of information that interest the Agenry."]
After the Civil War, Presidents continued to dispatch secret agents whenever national
needs dictated. As we have seen, often the very prominence of a person enhances his or her
value in exerting influence or pressures on parties abroad. In-most such cases, the secret
aspect is that the prominent person is actually an agent of the United States Government
employed to propagate views or engage in activities consistent with covert national polity. In
recent years this has been called "Track II," but such is really only a new name for an old
practice.
In 1865, for example, Governor Oliver Hazazd Perry Morton, the Governor of Indiana,
went abroad on behalf of the War Depaztment to report on systems of sanitary regulations,
transportation and subsistence of troops in the armies of Genmarry, France and Italy.
Enroute, he stopped in Washington where he received a secret assignment from President
Johnson. Morton was ideal for such a mission. He had been a strong supporter. of the Union
throughout the civil waz, including dissolving the state's legislature when the Peace
Democrats gained control of it during the elections of 1862 and running the state throughout
the waz without ever summoning the legislature into session. His instructions from President
Johnson were to give intimations to Napoleon that he must withdraw French troops from
Mexico. The tasking was so sensitive that he was expected to keep it secret even from the
American Minister to France, John Bigelow. Thus, Morton saw the emperor through the
courtesy of Bazon Rothschild rather than through the good offices of the US. Embassy.
[Unsaid here was a long list of U.S. objections to Napoleon's puppet emperor of Mexico,
Maximillian, including Maximillian's encouragement of former-Confederate settlers; Further,
the ~Jnited States was giving its "unofficial" support to Juazez as a replacement. In the end,
Napoleon agreed to withdraw French Forces in eighteen months. But, it was too late for the
Mexican emperor with an Austrian accent. He was captured and executed by the Juaristos.]
In 1866, Secretary of State Sewazd's expansionist dreams resulted in the dispatch of a
mission, strictly secret in nature, to Santo Domingo. Frederick W. Seward (the Secretary's
son) and Admiral David D. Porter were reminded that previous efforts had been thwarted by
Spain on each occasion it had learned of our moves there. Success, they were told, could be
expected only if "caution, secrery and despatch" were observed. [A similaz mission three years
later by Orville E. Babcock, President Grant's secretary, was kept secret even from the
Secretary of State.]
In 1867, a secret agent was sent to Hawaii to investigate the situation there and to
promote favorable opinion towazds annexation by the United States rather than a treaty of
reciprocity then experiencing ratification difficulties. Anti-American feeling was certain as a
result of the reciprocity treaty, since there were those who felt it would draw Hawaii into the
American sphere of influence. On the other hand, the annexationists believed that such a
treaty would hinder and postpone annexation. The American minister, of course, would be
expected to use his influence on behalf of the reciprocity treaty, but only a secret agent could
address Secretary Sewazd's expansionist hopes for annexation of the islands. Chosen for the
task was Zephaniah S. Spaulding, who ulitimately reported back to Seward that if the United
States wanted the Hawaiian Islands it had to "take or buy them." [Spaulding's mission
remained a secret for some twenty-five years.]
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In 1870 a small investigative arm was established in the Department of Justice, staffed
mostly by Secret Service agents seconded to the Attorney General and supplemented by
Pinkerton agents. This small core, combined with the U.S. Secret Service, had the unclear
charter for domestic security and counterintelligence operations yet, in effect, both were
staffed by Secret Service agents.
Perhaps the best evaluation of this period is that of Thomas Miller Beach, a British intel-
ligence agent who aemd under cover in the United States from 1867 to 1888, as part of a
network the British and Canadians maintained along the border and in such cities as Chicago,
Detroit and Buffalo. Tn his memoirs, Beach provides this critigiu of the American service:
"America is called the Land of the Free, but she could give England points in the working
of the Secret Service, for there, there is no stinting of money or men."
A pattern of concern was also beginning to develop in regard to Canada Throughout the
nation's history, beginning with the American Revolution, there had been attempts to draw
Canada into the Union. The British, on the other hand, were seen as having designs which
mught best be mounted against the United States from Canada [In time, the Army even drew
North.]~~ ~~ for a possible invasion of the United States from its neighbor to the
Annexation was in the mind of President Grant in 1869, when he dispatched James
Wickes Taylor to the area of the Red River rebellion in Canada. The inaurection there was
not understood in Washington. It grew out of the interests and desires of French and Roma{
Catholic elements there who cherished dreams of building another Quebec on the banks of
the Red River. Yet, their protests were certainly a manifestation of unwillingness to be a part
of the British Dominion, even though the resort to arms was not pro-annexationist. Whatever
the outcome, it was a com~enient opportunity for clandestine activities to determine if
sentiment existed in the Selkirk area--or even more-for annexation by the United States.
Taylor's instructions warned: "All your Proceedings under this commission are to be strictly
confidential, and under no circumstances will you allow them to be made public. This
injunction includes the fact of your appointment." Pro-annexation sentiments, Taylor
learned, did not exist.
The nail for intelligence was great. In 188Q General William T. Sherman iru~cted all
officers traveling abroad to make military observation and report them to the adjutant
general. In 1881, the Army devised the -idea of "Hunting and Fishing heave," a means by
which otfiozra could be dispatched to conduct terrain reconnaissance, with Canada as a
principle target, yet provide some degra of official deniability. Captain Daniel Taylor
performed such a reconrraiaaance along the St. Lawrence River in 1881, and in 1890, Lt.
Andrew Summers Rowan (of later "message to Garcia" fame) did a detailed recoru~aissance
of the entire line of the Canadian Pacific Railway.
[T7re nail for arch intelligence incxeased, and in 1902, the Military Information Division
of the Army instructed commanding otfioera of a number of frontier posts to send secret
tactical recaonnaiasar~ce missions into Canada for mapping purposes, "Hunting and Fishing.
~? ~ ~ ~Y t+~gulationa, in one form or another, until 1928. Perhepa one of the
most daring. as well as most publicised, intelligence missions of this type was that of lot
Lieutenant (later Brigadier General) Henry H. Whitney to Puerto Riw in 1898. Whitney in-
filtrated Puerto Rico by signing on as a crew member of a British tramp ateanrer. Before his
arrival, however, the story was leaked and neavapaper articles discussed his secret mission at
length. Forewarned by the Aakrican media coverage, Spanish authorities conducted an
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extensive search of the ship on its arrival, but failed to detect or apprehend him. He not only
landed safely, but was able to conduct a thorough reconnaissance of the southern part of the
island.]
The period saw heightened interest in military intelligence. The Office of Naval Intel-
ligence was established within the Bureau of Navigation in 1882 for the purpose of "collecting
and recording such naval information as may be useful to the department in time of waz, as
well as in peace." Because ONI had been established by departmental order, not an act of
Congress, Congress refused at first to appropriate funds for it and the newly-formed Naval
Waz College. One of those campaigning on the Navy's behalf was a mugwump civil service
commissioner, Theodore Roosevelt, who would later note that "The Chief of the Office of
Naval Intelligence has got to be the man on whom we rely most for initiating strategic work."
Also in 1882, the first Naval attache was dispatched abroad.
In 1885, the Waz Department followed suit with its own Bureau of Military Intelligence in
the Adjutant General's Office "to gather and file information concerning the military or-
ganizations of foreign countries in which .. ,the United States might become interested."
(The Bureau was staffed with one officer and one clerk], and President Cleveland approved
sending military attaches abroad. In 1886, the Corps of Indian Scouts was created by
Congress, officially affirming a practice initiated at the time of the civil war, or even before,
yet which was soon to see final muster. By 1892, the infant MID was threatened by absorption
by the Signal Corps, an act blocked by the Adjutant General's office which was protecting its
turf, not MID.
In 1888-89, the Congress approved officially the institution of a military attache system
and the Army began dispatching attaches abroad. It might almost have boon in self defense.
The Spanish had placed attaches here immediately after the civil waz, in fact one of them had
walked off with a plan of our Atlantic coastal defenses in 1898. France, Russia and Peru
followed suit by sending attaches, soon followed by those from nations lazge and small. And, a
minor point, the Navy had its attaches in place for almost six years. The nature of the
attache's duties were cleaz to one Boston newspaper: "The accomplices he corrupts and the
spies he employs may be hanged or shot, but the attache goes free."
As the Spanish-American waz approached, informal arrangements were made to poach a
few clerks from other Navy offices to complement the Office of Naval Intelligence. A few
more clerks were smuggled in under the annual "Increase in the Navy" appropriations bill. It
was not until 1899, in the aftermath of the waz, that Congress appropriated funds to establish
a clerical staff for ONI.
The conflict was a time of testing for the newly-created intelligence organizations. Army
and Navy agents in the field gathered military gossip about Spain. ONI hastily assembled
agent networks which, in retrospect, had a successful track record in collecting both political
and strategic intelligence. Andrew S. Rowan of MID penetrated the Spanish lines and
contacted the insurgent leader Calixto Gazcia. Victor Blue, a future chief of staff of the
Pacific Fleet, crossed the Spanish lines three times to make contact with partisans and
determine their supply needs. The Signal Corps' intelligence unit severed Cuba's cable to
Spain and had a fleet of balloons deployed for airborne reconnaissance. In Spain, penetration
was effected by aSpanish-American graduate of West Point whose identity authorities have
never disclosed, but who some naval historians say was Aristides Moreno who served later as
Goneral Pershing's chief of counterespionage in France during 1917-18. The only set-back
was refusal of the Cuban Expeditionary Force to accept the concept of an MID "Department
of Intelligence in the Field," then considered an unprecedented attempt to intrude into the
responsibilities of a field commander. Fortunately, this was not the case in the Philippines,
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where an independent Military Intelligence Division existed until absorbed by MID in 1902.
There were also serious problems to be faced on the home front. Reports were received
that Spanish agents were about to raise the holy banner among the Catholic masses of North
America. Other reports said the Spanish were planning to sabotage installations and poison
American troops. Firmer proof was obtained from undercover operations that apro-Spanish
element was willing to bring strife to cities with lazge Spanish communities, such as Tampa,
Florida. Money was raised in New Orleans to purchase a gunboat for Spain and for transmit-
tal to Spanish forces in Mexico. The Spanish Admiralty ordered the destruction of naval bases
along the American coast and reports were received that Spain's four armored cruisers might
bombard coastal cities. A letter was intercepted which described the coastal defenses of San
Francisco and explaining how they could be circumvented. Another letter, posted from
Wyncote, Pennsylvania, and addressed to Ramon de Carranza, a Spanish agent in Montreal,
was intercepted and found to contain a detailed description of the sea approaches to Philadel-
phia, the hazards of attempting a bombardment, and the potential damage that might be
inflicted on the commercial azea of the city.
[The threat of bombardment faded quickly; In April 1898, two days before Spain's declaration
of war on the United States, the United States blcekaded Cuba and the second Spanish fleet
at Santiago de Cuba was destroyed.]
Spain was quick to seek out others who would betray the nation. One agent, George
Downing, had been a petty officer on the Brooklyn. For a price, he agreed to obtain informa-
tion of a strategic nature from the Navy Department and from government navy yazds. His
mistake was meeting with his Spanish case officer in a Canadian hotel with thin doors--a U.S.
Secret Service agent was on the other side taking notes. Downing was arrested in Washington
in the act of mailing a letter about Navy movements; two days later he hanged himself in his
cell. Another of Carranza's schemes was to recruit persons who would enlist in the American
forces for service in Cuba or the Philippines. Once landed, they would cross the lines to the
Spanish side with intelligence of American troop dispositions.
Carranza turned to a Canadian detective agenry for assistance, and was referred to a
former prize-fighter, Frank Mellor. Mellor got two soldiers drunk and bribed them to spy for
Spain. One of them sobered long enough to report the recruitment. His partner in the rectvit-
ment actually joined the Third US. Cavalry, but was arrested based on the testimorry of the
first. [He was held in prison without trial until the end of the war, then released. Com-
promised, Mellor headed for Tampa and his own attempt to eNist in the American forces
bound for Cuba. Thanks to Canadian liaison, a telegram from Mellor to Carranza was inter-
cepted, and Mellor taken into custody. Yet, the Canadian information could not be used as
evidence at Mellor's trial, so a surreptitious entry was made into Carranza's home in
Montreal. A letter located in the seazch proved the existence of the Spanish spy ring; the
Secret Service arranged for it to be translated and published in a New York paper, and the
cooperative Canadians expelled Carranza. [It has also been alleged that the version published
in the American press was an "adaptation" of the original taken from Carranza's apartment;
others say it was a forgery unlike the original.) The counterintelligence effort was not a total
success. Even after the departure of Carranza and his colleagues, intercepts continued to turn
up letters to them, in unbreakable cypher, sent from the United States.
The U.S. Secret Service, to meet the counterintelligence needs of the war had strayed afar
from its limited charter under the Treasury Department. Its most widespread activity had
been the surveillance of suspects, many of whom where warned that the government was
aware of their sentiments and intentions and told to desist. A total of six hundred persons
were tailed for varying periods.
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With the end of the war and demobilization, the ONI's networks were all but scrapped;
few saw the need for an energetic and continuing intelligence capability. In 1903, a G-2 was
established, with an attache office, indexing and library, map and photographic section,
historical section and monograph and publications section. It was short-lived, and merged
with G-3 (Plans). Further proof of the disinterest, if not hostility, to intelligence came in the
emasculation of the Military Information Division in 1908, when it was became adead-letter
office for intelligence reports, a map and document library without analysis or dissemination,
at the Army War College. Any semblance of its former form was phased out and replaced by a
Military Information Committee comprised, it is said, of "personnel with no knowledge of the
intelligence unit's aim and no interest in learning them ...men who officially ruled American
military intelligence until 1917 and the advent of WWI."
That same yeaz, 1908, saw the birth of the Bureau of Investigation in the Department of
Justice. It was not a natural birth. When the investigative bureau in the Department of
Justice, staffed by U.S. Secret Service personnel, gained the conviction of a senator and a
member of the House for land fraud, the Congress retaliated by limiting the Secret Service's
charter to presidential protection, a responsibility it had been given in 1902, and treasury
offenses, with investigation of members of Congress prohibited in regazd to the latter.
Attorney General Chazles J. Bonaparte (the grandson of one of Napoleon's brothers) who
had been seeking approval for ainternally-staffed Bureau of Investigation, was met with quick
campazisons to the intimidations of Napoleon's police minister, Fouche, and a round of
horror stories about detective police systems in Russia, Britain and France. The House and
Senate appropriations committees reported against the proposal and the Congress prohibited
the Justice Department's practice of borrowing agents from the Secret Service. The Attorney
General nevertheless established his Bureau of Investigation, forerunner of the FBI, during a
congressional adjournment, pleading that the Congress had forced his hand by denying him
the use of Secret Service investigators.
As with Presidential agents, when military intelligence missions were required, personnel
were recruited ad hoc. An example of this was a joint intelligence mission launched in 1909.
~vo military officers were sent on a two yeaz reconnaissance of Taiwan, the Ryukyus, the
Japanese home islands, Korea and Manchuria Commander Joseph "Snake" Thompson of
the U.S. Navy Medical. Service and 1st Lt. Consuelo A. Seoane, 3rd Cavalry, traveled under
assumed names and South African nationality, posing as naturalists while mapping Japanese
fortifications and coastal facilities. To enhance their cover, they collected specimens and
maintained bogus diaries of botanical finds--for the benefit of Japanese surreptitious entry
teams--and checked in regulazly with British consulaz authorities to affirm Crown protection
due South African nationals.
Similazly, when communications intelligence about the Mexican Army was desired, the
task was given to the Arizona National Guazd. They were quite successful in the assignment,
crossing the border and stringing eland-line "tap" to a Mexican military telegraph pole:
There were those who recognized the need for an informed military intelligence estab-
lishment, but their efforts were not always wise or successful. Shortly before World Waz I, for
example, the Commandant of the Command and General Staff School, Fort Leavenworth,
acting on the suggestion of the Chief of the Waz College Division, determined to prepare a
regulaz intelligence publication for appropriate Army distribution. The first issue, which drew
on intelligence reports forwazded to the Command and General Staff School, resulted in a
strong note of protest from the British One item in the new publication, they said, had been
given to the U.S. Military Attache in London only after securing his solemn promise to
maintain it with utmost secrecy. The promising intelligence publications program came to a
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complete halt.
In the summer of 1915 there were stirrings at the national level. President Woodrow
Wilson and his Secretary of State, Robert Lansing, agreed to vest overall control of American
espionage in the Department of State because of the delicate diplomatic questions of the
time. Wishing to enjoy the end product of intelligence work without sharing the stigma
attached to it, they delegated to State the role of filtering and evaluating foreign intelligence
before supplying it to the chief executive.
During the period prior to US. entry into WWI, perhaps the most active secret agent was
Col. Edwazd M. House. House enjoyed an intimate personal relationship with President
Wilson, to the extent that on one mission to Britain, in 1913, Ambassador Page described him
to the British as the "silent partner" of President Wilson. In 1915, he was in Europe once
more with an offer of US. mediation that was kept secret even from Ambassador Page.
Elaborate pains were taken to conceal the real object of his mission from the public, and the
President twice was quoted as denying that House was abroad on a mission connected with
peas. The mission proved abortive, and the destruction of the Lusitania delivered the coup
de grace to his efforts.
Before the United States entered the war, the State Department tried to preserve every
appeazance of neutrality and to ensure that America's secret agents did not appeaz to be
operating exclusively against either the Allies or the Central Powers. One appalling example
of this is seen in the handling of a German germ wazfaze operation conducted out of
Baltimore. Animal and flu viruses which had been brought into the city aboazd a German
submarine making a "good will" visit, were cultivated in a secret laboratory in Silver Spring,
Maryland, then taken to Norfolk-Newport News where horses and mules destined for Britain
were infected. On arrival in Britain the infection had infected all the animals and they had to
be destroyed. Although the nation suffered an epidemic of influenza, it could not be traced
positively to the flu virus cultivated in the laboratory. Indictments against the influential
German-American families involved in the germ warfaze plot were sought and obtained, but
they were never prosecuted. When the waz broke out, they made common cause with their
government and became "good'Americans."
This all changed in 1915 with the departure of William Jennings Bryan as Secretazy of
State and the ascendanry of Robert Lansing to the post. Continuing revelation of German
intrigues in this country inspired the establishment of an espionage organization under the
Office of the Counselor, the second-ranking post in the Depaztment of State. Named to run
national intelligence was Frank Polk a prominent New York Democrat and a distant kinsman
of former President James K Polk.
Polk advised the Wilson administration on the legal aspects of American neutrality and, at
the same time, supervised the work of vazious government agencies in the field of
counterespionage and the alleged violation of American neutral rights by belligerent powers.
In the meantime, the Germans were busy in America. From his offices in the Hamburg-
American Steamship Line in New York, Dr. Heinrich F. Albert directed commercial
espionage activity. One operational venture traced to Dr. Albert was his attempt to purchase
the Bridgeport projectile Company. The scheme had several purposes: 1) The Germans could
produce armaments there for non-attributed shipment to anti-British insurgents; 2) The plant
could take orders from the Allies, but fail to fill them; and, 3) The firm could be a vehicle for
receiving technical information from the United States Government. [`T'his tactic was
repeated by the pazallel network of the CPUSA during the 1950's.] Clandestine operations,
including sabotage, where duected by Fritz Von Paper from a Wall Street advertising agency.
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The office of the German Naval Attache, Captain Karl Boy-Ed was involved in such activities
as gun-running to the troubled British territories and possessions. Superimposed on this was
Captain Fritz Von Rintelen, sent unilaterally from Berlin and charged with encouraging anti-
Yanqui feeling among the Mexicans and recruiting Irish-Americans to sabotage allied ships
sauling for Britain. Animosities arose between Von Rintelen and the residents in America,
who promptly compromised him by describing his work in indiscreet messages. Alerted, the
government let Von Rintelen sail for Europe, but alerted the British, who picked him up at
the other end. Then a Secret Service agent stole Dr. Albert's briefcase as the German nodded
in a New York subway. The documentation of the German maneuvers complete, Von Papen,
Boy-Ed and Albert were png'ed in the fall of 1915, but their subordinates were allowed to
remain in place under Federal surveillance.
Discovery of other German operations was soon forthcoming. The German Ambassador
was identified by an American businessman as one of those attempting to purchase the Union
Metallic Caztridge Company, and ultimately the Winchester and Remington Arms
Companies. The American intermediary was rolled up as was the German case officer. In
December 1915, the Secret Service broke up an Austrian intelligence ring which was
developed to create unrest in American steel plants employing Hungarian, Slovak and
German workers, when they arrested and then released a secretazy of the Austrian Embassy-
after confiscating the incriminating papers. And, in 1916, the Secret Service closed in on Von
Papen's successor on Wall Street, coincidentally as the German had removed four bundles of
incriminating papers from a safe and was preparing to take them to the German Embassy in
Washington. The papers, weighing some seventy pounds, detailed the names and phone
numbers of German and German-American agents in the United States. In addition, the
contents shed light on the plans of German intelligence to foment rebellion in India and the
fact they were financing the Easter Rising in Dublin.
Nineteen Sixteen was a yeaz of anomalies. The Army's 1st Aero Squadron was detached
to the punitive expedition into Mexico, but instead of being employed in aerial reconnaissance
the planes were assigned to serve as couriers. Col. Ralph Van Demen of MID initiated secret
intelligence efforts contrary to the orders of the Chief of Staff, not admitted until a week
before the United States entered the waz. The House of Representatives defeated anti-
espionage legislation proposed by the Attorney General. Secretazy of State Lansing created
the Bureau of Secret Intelligence funded with confidential funds, much of which came from
American businessmen, an organization that would survive only four yeazs; On the departure
of Secretary Lansing, the agents were transformed into passport investigators instead of
continuing as an intelligence azm of the new Secretary. The Attorney General stated his
reluctance to investigate German sabotage and espionage in the belief that local, rather than
Federal, laws applied. President Wilson authorized the Treasury Department to investigate
German agents, prompting aturn-azound by the Attorney General who, without congres-
sional authority, directed his 300-man Bureau of Im+estigation to investigate German
espionage. (Without congressional funding, the Bureau of Investigation was forced to use cars
"borrowed on paper" from cooperative American businessmen and aided in the estab-
lishment of aself-funded private investigative arm, the American Protective League.]
There were the inevitable feuds as well. In January 1916, the Director of Naval Intel-
ligence complained to the Chief of Naval Operations that the Assistant Secretary of the Navy
was attempting to usurp the control of the DNI over intelligence by organizing his own secret
intelligence bureau. The Navy intelligence chief asked, unsuccessfully, which office held
responsibility for coordination of intelligence activities within the Navy Department. The DNI
survived the crisis, but what of the Assistant Secretazy of the Navy who dabbled in intel-
ligence? Franklin D. Roosevelt went on to become the Constitutional manager of intelligence
for the nation.
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The US. declazation of waz against Genmarry in World Waz I stemmed from an intel-
ligence success, the interception and decoding by the British of the infamous Zimmerman
ttltgram. Farly in 1917, the British con5ded to Polk that they had broken the German codes,
and confidently pasxd a copy of a message xnt in January 1917 to the Genman Ambassador
in McACO. The message, written by German Foreign Secretary Alfred Zimmerman, said:
"We intend to begin on the 19rst of Februazy unrestricted submarine warfare. We shall
endeavor, in spite of this, to keep the United States of America neutral. In the e~rent of this
not succeeding. we make Mexico a proposal of alliance on the following basis: Make war
together, generous financial support, and an understanding on our part that Mexico is to
reconquer the lost territory in Texas, New Mexico and Arizona."
Polk showed the message to Wilson and Lansing. Unsure that the British were providing
reliable information and suspecting it might be a ploy to get the United States into the war,
Wilson arranged to have another copy of the message, which had gone through telegraphic
links to which we had access, deciphered and conf9rmed. On March 1, 1917, the decoded
message surfaced in the American press. On April 6th, President Wilson nought and obtained
a declazation of waz baxd on the communications intelligence we now know as the
"Zimmerman Telegram." Mon on this in a moment.
As waz developed, Polk became coordinator of those agencies created or developed for
the purpose of gathering intelligence abroad. Under him the espionage bureaucracy
flourished, yet he restricted his rote to deciding intelligence policy and coordination, leaving
the enabling powers--the training, payment and dispatch of legions of agents-to the
concerned departments. A good deal of the wartime espionage direction fell to Gordon
Auchincloss, the son-in-law of Colonel House, who was appointed assistant counselor in May
1917. At f9rst Auchincloss' office was located in New York so that he might contend with the
large immigrant population and corresponding. enemy activity there. When offensive
espionage became the priority, he relocated to Washington.
Before long, the waztime activity at State was actually under the control of three men,
Polk, Auchincloss and Col. Houx, assisted by Richazd Crane, Secretary Lansing's private
secretary. Another of Polk's aides, Paul Ftiller, a New York attorney who had seaetly
negotiated with "Poncho" Villa in 1914, supervised intelligence operations in Cuba They
secured the cooperation of all the major intelligence organizations, including the nu7itary and
many local officials and police. The counxlor also coordinated, directly and indirectly, the
work and informational product of private organizations purporting to be patriotic in
chazacter, such as the American Protective League and the private detective agencies
irnrolved with the Army in domestic counter-espionage. The liaison with the Army, surpris-
ingly, was abreak-through As late as May 21, 1917, the Secretary of War had prohibited in-
telligence liaison eNen within the Army. [The Waz Department took over counterespionage, a
later G-2 said, "due to the inability of the civil authorities to meet the situation at that time."]
In 1917, despite the opposition of the Chief of Staff who believed that no military in-
formation xrvice was needed--we could rety on British and French organizations to 1911 thiose
needs-Van Demen used back-cha~ukla to circumvent him. On May 11,1917, the Military In-
telligence Section [two ol~eera and four clerks] was eatabliahKd by the Secretary of War.
Under Van Demen'a leadership it evolved quickly into the Mditary Intelligence Division with
a one million dollar congreaaional appropriation. He auoceeded in centralizing the Army Map
Service, the attache system, intelligence command, the Army's Seauity Agency and a new or-
ganization, the Corps of Counterintelligence Police, which wan charged with "negative intel-
ligence" (the term for counterintelligence). The CCP saw a rapid wartime growth, particularly
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in French-speaking investigators for duty in France, but by 1934 it was reduced to 15 agents.
Van Demen was approached by Herbert Yardley, a State Department code clerk who had
dabbled in code-breaking and had been frustrated by the Department's refusal to accept his
warning that US. coded message were being read by other nations. Van Demen azranged
Yardley's commission and placed him in chazge of MI-8, MIS' code and cipher bureau,
funded in the main by the Department of State, with the remainder of the monies coming
from the Army and the private sector. [At the State Department's request, the Navy was
e~clnded.] Training of cryptanalysts began and the Radio Intelligence Service, the overseas
counterpart to MI-8, was created. Van Demen's success was short-lived. When a German
anent was arrested in company with one of his agents and a British agent, both of whom had
been involved in a joint operation to penetrate the German net, the Department of Justice
complained bitterly of Van Demen's invasion of their turf and he was banished to the
European waz zone where he became G-2 of the AEF.
Following the Bolshevik seizure of power in Russia in November 1917, President Wilson
established a group of experts, called The Inquiry, to determine American waz aims and
strategy for the anticipated peace. Under the guidance of Col. House and with Walter
Lippmann as secretary, the group soon expanded to 150 researchers, mostly academics of
diverse backgrounds. Although not engaged in espionage, its reseazch and analysis definitely
made it a part of Wilson's intelligence community, and at times provided "cover" for some of
tltd State Department's intelligence efforts. In Russia, the Department lost an agent,
Xenophon Dmitrevich de Blumenthal I{alamatiano, and almost lost an Allied agent who
though American-funded, was. a British subject--W. Somerset Maugham
Another wartime body, the Waz Intelligence Board, was created to direct domestic
security against German espionage and sabotage. Chaired by the Superintendent of the
Bureau of Investigation, its members represented the military services, Internal Revenue, Im-
migration, US. Marshals Service, Treasury and the Post Office. Three representatives from
the private American Protective League were also included on the Board.
The conflict also saw the establishment of the nation's first permanent combat intelligence
system. On 31 August 1917, General Pershing created the Intelligence Section, General Staff,
and by the end of the yeaz had ordered creation of a Regimental Intelligence Service.
Training began immediately and by mid-1918 an Army Intelligence School had been estab-
lished in Europe. Regimental and battalion S-2's were given the manpower and the sole
purpose of collecting intelligence. This wartime precedent led to the inclusion of intelligence
sections at the battalion, regimental and brigade level when the Army was restructured at the
end of the war-albeit the poor intelligence officer at the battalion level also found himself
detailed as adjutant, plans and training and supply officer.
The waz also brought some maturity to American political thinking. During the pre-war
yeazs, the United States had pursued aloft-line against Indian nationalists plotting the
overthrow of British power in their homeland. With waz imminent US. authorities had swept
up more than fifty Indians, one of whom agreed to collaborate. He exposed German funding,
a Japanese plot out of Mexico to sabotage the Trans-Manchurian Railway, and some
Moscow-oriented Indian revolutionaries--including one who was arrested with his mistress-
secretary, Agnes Smedley, who years later would be identified with Soviet espionage activities
throughout the Faz East. Another arrested was James Larkin, general secretary of the Irish
Transport and General Workers Union and founder of the Itish Citizens Army which had
fought in the Easter Rising. Lazkin, in the United States for a speaking tour, was convicted of
anarchism and sent to Sing Sing. [Pardoned by Governor Al Smith in 1923, Lazkin left
America to become Ireland's representative on the Comintern.] The reality masked by the
single azrest of Larkin was to blunt the successes of the Germans among Irish-Americans.
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Here, political realities dictated that there be no show-trials which could azoux the Irish-
American voters against Wilson and the Democratic Party. It was hoped that the trial of the
Lndian nationalists, and the arrest of Larkin would xnd sufficient message to cool their azdor,
yet keep the political situation stable. And, there was innocence,too; ONI came up with a
disturbing list of some 105,000 suspects worthy of further irrvestigation; President Wilson,
recognizing the names of some of his friends on the list, ordered it destroyed.
In 1918, there were proposals that something be done to coordinate peacetime intel-
ligence. One plan called for the creation of a Bureau of Intelligence with a director appointed
by and reaponaible to the President. Too many turfs would have been trod on, and the plan
was doomed. Another concept was a clearing hoax, without a central bureau, to compare
reports and to assign im+estigations. That plan was shelved when the MID pointed out that it
was already xrving as such a clearing hoax, receiving and indexing reports from the various
intelligence components. Proprietary interest xt the stage for a disaster yet to come.
At State, Frank Polk, by now an underxcretary, was at work attempting to build a
peacetime foreign intelligence system before his term of offiice aspired. In 1919, when
Secretary Lansing was attending the Peace Conference, Polls established the "American Black
C~amber,> the peace-time version of Yardley'scode-brwicera, discreetty stashed in New York
away from the prying eyes of Washington. And, foUawing I.aming's unacpeded resignation in
February 1920, Polk established the "foreign intdligence section" of the Department to
continue tapionage coordination in peacetime. Polk left the Department four months later, in
June 1920.
The waz ended, MID went into rapid decline. It was reduced in strength and assigned
throe functions: 1) disseminate information to the press; 2) maintain military morale; and, 3)
decode meaaages. A yeaz later, the MID ordered all im+estigatiom of civilians to cease and
instructed MID personnel to confine their imrestiga-tiom to military rexrvations. Fn 1921-22,
military attaches were recalled, not to be replaced, from Belgium, Czechoslovakia, Equador,
Egypt, Holland, Hungary, Sweden and Switzerland. From a peak of 1,441 in 1918, by 1922
MID had been reduced to 90. From a budget of S2S million in the last year of the waz, its
budget was 5225,000. The mood was expressed best in 1924, when the Cavalry lownal noted
the "decreasing importance under condition of modern warfare of the obsolescent secret
service and spy systems." The decline of MID wasn't reversed until 1939, at which time its
headquarters personnel numbered onty 69.
In the Navy, things weren't going weU either. In 1930, for example, intruetiom warned
that the State Department would disown any attache who was exposed in the use of dubious
methods. It noted: "T7iere have been xveral occasion when foreign attaclxa have been
caught while indulging in questionable activities that wrre intended to bring in particularly
desirable information. In each case the reputation and career of the officer concerned did not
profit from their mistaken zeal:' Naval attaches weren't forbidden to ux spies, they just
shouldn't get caught. And, of course, the infraction had its tinge of morality, warning
attaches against the ux of immoral women as agents. "A woman that will xll herself is
usualty willing to xll her employer."
There was a strong xnse in the Congress against anything covert, both a cause and a
reflection of the downturn. in intelligence during. the 1920's and 1930'x. As one historian has
noted, "Americans have liked to think that spying. as an established. normal activity of
government, wax one of the things that had no place in our national life. The social, political
and diplomatic spy work of European countries belonged, they felt, to an Old World tradition
happily left behind."
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One telling example of this may be seen in the Department of State. In 1927, Secretary of
State Kellogg abolished the various intelligence-coordinating sub-units of what we have
referred to as the Office of the Counselor, in that year known as U-1, ending the important
relationship in intelligence matters that existed between State, Justice, the Army and the
Navy. Henceforth, the Department advised the FBI, ONI and MID, the special functions of
U-1's branches would be surrendered to the geographic divisions of the Department of State.
Excluded from the dismemberment was a legacy of Frank Polk, the Office of the Chief Special
Agent, known as U-3, whose duties had included acquiring codes for the Black Chamber, su-
pervising agents and pseudo-agents, as well as investigating organizations and individuals
abroad suspected of subversive activity and protecting foreign dignitaries visiting the United
States. It would continue, the Department said, but henceforth would be called the Bureau of
the Chief Special Agent and would deal with "all matters relating to Communism or
Communist activities." Operating under the chief of the Eastern European Division of the
Department, the unit did an admirable job of tracking Comintern agents, working in liaison
with similaz units in allied nations, and gaining information about Soviet undercover ventures.
Political perceptions of the USSR changed both in the government and the Department
during the 1930's, and in 1939 the office was abolished, its personnel retired and its extensive
Soviet library donated to the Library of Congress.
Two yeazs after the dismantling of State's intelligence coordinating function, the Black
Chamber was also to fall victim to new attitudes. In 1929, after Henry L. Stimson had been in
ofi~ce for a few months as Herbert Hoover's Secretary of State, Herbert Yazdley who
operated the the "Black Chamber" felt it was time Stimson lost some of his innocence. He
sent Secretazy Stimson copies of an important series of diplomatic messages which had just
been decrypted.
Stimson was shocked; To the new Secretary of State, the "Black Chamber" was a violation
of the principle of mutual trust on which he conducted both his personal affairs and foreign
policy. He was guided then, he explained in his memoirs almost two decades later, by the
belief that the way to make men trustworthy was to trust them. He was dealing as a gentleman
with other gentlemen sent as ambassadors and ministers from friendly nations, and
Gentlemen do not .read each other's mail "
The Secretary withdrew all State Department funding from the Black Chamber, and it fell.
Fortunately, shortly before Stimson's fateful decision about Yazdley's group, the Army
had decided to give the Signal Corps (instead of MID for which Yazdley worked officially)
responsibility for both signal security and signal intelligence. The resulting Signal Intelligence
Service remained a sepazate entity, filling the void created by the end of the Black Chamber,
until 1944 when it was merged into MID.
We were back in the ad hoc mode that had seemed to plague our national intelligence
effort after every waz. When an estimate of the German Air Force was needed, Charles
Lindbergh was prevailed on to destroy his reputation with a "good will" visit to Germarry and
its military air bases. (T7ie estimate he penned for the signature of the US. Military Attache
in Herlin was wrong, despite his good intentions. The Germans had shuttled aircraft about
from field to field so that at each visit Lindbergh was, unknowingly, counting the same
planes.) When the President needed information on German rearmament he funned to
scholars, businessmen, industrialists and reporters, just as other Presidents before him had
prevailed on such persons to serve as executive agents. Dilettantes agreed to hike through
Germany, observing what the President had asked them to observe. The President established
a small secret intelligence agency in Washington's National Press Building, headed by John
Franklin Carter ("Jay Franklin"), a liberal radio commentator and journalist. [What little is
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known about the activities of the Carter organization makes it appeaz to have focused a sig-
nificantportion of its activities within the United States, particularly in Washington, yet it was
also given the special duty of investigating suspected Japanese nationals and Japanese-
Americans on the West Coast. After the waz, Cazter proposed, unsuccessfully, that his group
was ideally suited to be continued as the civilianized peacetime intelligence agency being
proposed by William J. Donovan and others.] And, shades of the past, the FBI and MID
formed an alliance with Van Demen, to make use of the private intelligence organization he
had formed after being fired in 1929.
In 1938, an unexpected series of events reversed the trend. Leon G. Tlirrou, a special
agent of the FBI's New York office, had joined the MID in an investigation of German
espionage, resulting in the azrest of some of the German agents im+olved. The State
Department wanted to drop the whole matter, and the Attorney General attempted to gag
Hoover and 'Itirrou. Hoover held his tongue, but Turrou did not. The indictments of the
Getman agents were handed down at 4:30 p.m. on June 20th At 5:00 p.m. Turrou submitted
his resignation to the FBI and at 5:15 p.m. signed a contract with the T w y~g ~ to do a
series of articles on German espionage. That evening, after a series of frantic and heated
phone calls between Harry Hopkins at the White House, J. Edgaz Hoover, Attorney General
Cummings and US. Attorney Lamaz Hardy, it was cleaz that 'Ilurou had additional informa-
tion which, if published, would precipitate a major domestic and international crisis.
Therefore, it was decided to meet 'hirrou's challenge head on by coming out in favor of more
money for intelligence purposes and acknowledging the seriousness of the spy threat. By
preempting Turrou's presumed argument about national weakness in the area, and seeking an
injunction to block publication of the articles, Roosevelt hoped to gain time to quiet the issue.
At President Roosevelt's press conference of June 24th, it was obvious that 'Itirrou had
achieved his objective of forcing the administration to take a more positive stand about
expanding the intelligence service. According to the New Yon~c 7Fmts: "President Roosevelt
disclosed today that he favors large appropriations for the expansion of counterespionage
activities within the United States." But, still sensitive to international issues, the President
had a caveat: "In calling for more funds for the Army and Navy Intelligence Corps, the
President wanted it cleazly understood he would not sanction espionage by American agents
abroad." That same day, in an announcement reportedly drafted by Turrou, the New Yogic
Post announced that it had agreed to withhold the series until the completion of the
espionage trials. Turrou had achieved his goal and, in fact, the series was never published.
That same yeaz, Adolph Berle was named assistant secretary of state on the initiative of
President Roosevelt. Even in the face of fascism, Berle was uncertain about the validity of
America's mission and the legitimacy of "dirty" operations used in its pursuit. like Kellogg
before him, he lacked faith in the existing intelligence system. As a result, he failed to gather
into his hands the strings that might control American intelligence.
In 1939, MID protested that the FBI was not pursuing its presumed role in counter-
espionage. As a result, President Roosevelt announced that all investigations of espionage,
sabotage and counter-espionage would be conducted solely by the FBI, MID and ONI. Three
months later he issued another order assigning the function to the FBI only, yet failed to
rescind the original order. Also in 1939, the President, by Executive Order, authoriud the
immediate employment, without competitive requirements of Civil Service, in "highly con-
fidential positions in the State, War and Navy Departments." The Ducetor of Naval Intel-
ligence took the initiative, urging that an intelligence council be formed to make strategic
sense out of the massive intelligence information being generated; his proposal failed.
At State, Adolph Berle was soon to be converted. In 1940 he attended a meeting at the
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FBI of what was called the Committee on Intelligence Service. As the meeting progressed, he
became disturbed at an attempt to integrate foreign and domestic espionage. He noted in his
diary, "we had a pleasant time, coordinating, though I don't see what the State Depaztment
has to do with it." He soon had second thoughts, and at the next meeting of the group he
convinced MID and the FBI of the need for "a secret intelligence service."
That year, the Navy established a cover operation in New York (the Wallace Phillips or-
ganization) to conduct clandestine collection with a worldwide network of operatives and
observers. The Director of Naval Intelligence also won approval to disseminate technical,
statistical and similaz information, but was refused authority to evaluate and disseminate
certain aspects of military intelligence such as projections of enemy intentions, or to dissemi-
nate such information and its evaluation--in the inter-service squabbles the Waz Plans
Division had exclusive rights to that authority. General Omaz Bradley, writing ten years later,
placed it in perspective: "The American Atmy's long neglect of intelligence training was soon
reflected by the ineptitude of our initial undertakings. For .too marry years ... we had
overlooked the need for specialization in such activities as intelligence"
In 1941, the Waz Powers Act was adopted, penmitting the interception and examination of
communications by wire or radio between the United States and foreign countries, at the
discretion of the President. A Joint Anmy and Navy Intelligence Committee, later renamed
the Joint Intelligence Staff, was formed.
Frustrated at having to be his own intelligence officer, weeding through reports sent him
by eight agencies, in July 1941, Roosevelt appointed William J. Donovan as Coordinator of
Information, "to collect and analyze information and data, military and otherwise ... to
interpret and correlate such strategic infonmation and data ... [anti] carry out, when
requested by the President, such supplementary activities as may facilitate the securing of
strategic information." There were exceptions to Donovan's sphere of influence:
+ The FBI insisted on, and gained, exclusive responsibility for intelligence and
counterintelligence in the Western Hemisphere; Working under J. Frdgaz Hoover, the newly-
created Special Intelligence Service, operated in Latin America from July 1, 1940 to Mazch
31, 1947.
+ The military services gained this assurance: The COI shall not, in any way, "interfere
with or impair the duties and responsibilities of the regulaz military and naval advisors of the
President as Commander in Chief of the Army and Navy."
At the end of summer, the Chief of Staff, George G Marshall, issued an order that ac-
knowledged that "The military and naval intelligence services have gone into the field of
undercover intelligence to a limited extent." and accepted the premise that "the undercover
intelligence of the two services should be consolidated under the Coordinator of Informa-
tion." The Navy, with the massive New York-based Phillips organization at stake, held out
until Vincent Astor, at Donovan's suggestion, suggested that it might be necessary to call the
Navy's secret operations to the attention of President Roosevelt, a rather cleaz indication-that
the Navy had never briefed the President about them.
General Marshall's agreement to transfer the undercover units to COI carried one
disclaimer: "In the event of or the immediate prospect of arty military or naval operations by
the United States forces in any part of the world, however, the armed forces should have full
power to organic and operate such undercover intelligence organizations as they may dam
necessary.
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It came to pass. In 1942, General George V. Strong, the G-2 of the Army and one with an
intenx hatred of the OSS, the successor to COI, established his own intelligence system
under the control of Col. John V. Grombach As one obxrver has noted: `"Phis raulted in
one of the most unusual organizations in the history of the federal government. It was
developed completety outside of the normal government structure, used all of the normal
cover and communications facilities normally operated by intelligence organizations, and yet
never was under any control hom Washington."
[T7ie Grombach organization, according to one of its members, continued after World
War II with agents xrving under Army civilian cover in US. Embassies behind the Iron
Curtain. There, the member said, the Grombach group was eminently successful in smuggling
key Bloc figures to the free world. One author has noted that the organization, which was
supported by subsidies from other government departments--a broad hint of State
Department irnolvement, consistently produced intelligence reports which gave no indication
of place of origin, and flatly refused to identify its sources to CIA, which it considered
insecure.
(The Grombach organization, the author says, soon turned to production of "dirty linen"
reports attacking those in CIA it considered "sinister," and before long began feeding them
to Senator Joseph R McCartlry as "not only its right, but its reaporwbility." They even
proposed that the entire organization go to work for the Senator doing nothing but im+es-
tigating employees of the United States Government. The government conducted that a falx
network, leaning heavily on the product of European "paper mills,,' was at work and doxd
down the operation m the late 1940s.J
The library of Congress immediatety established a Division of Speaal Information, an
extensive central reference function in support of the COI, and the Army and Navy agreed to
transfer existing secret intelligence functions to Donovan's organization. Recruitment of
personnel began, and the beginnings of America's wartime secret intelligence organization
were in place by the end of December, three weeks after the Japanese attack on Pearl harbor.
The disaster came and the nation was unprepared politically and militarily. As Roberta
Wohlstetter wrote in Pead Xarbor. Warning and Drcision:
"We can now see what disaster it was signaling, since the disaster has occurred, But before
the event it is obscure and pregnant with conflicting meanings. It comes to the Qbserver
embedded in an atmosphere of `noise,' i.e. in the company of all sorts of information that is
useless and irrelevant for predicting the particular disaster ...Apparently human beings ktave
a stubborn attachment to old beliefs and an equalty stubborn resistance to new material that
will upset them."
There is a lesson in all this, and none said it better than President Woodrow Wilson in
disu~ssing his dilemma at the time of the Zimmerman Telegram:
"You have got to think of the President of the United States as the chief counsellor of the
Nation, elected for a little while but as a man meant constantly and every day to be the
Commander-in-Chief of the Army and Navy of the United States, ready to order them to any
part of the world where the threat of war is a menace to his own people.
"And you cannot do that under free debate. You cannot do that under public counsel.
Plans must be kept secret.
"Knowledge must be accumulated by a system which we have condemned, because it is a
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spying system. The more polite call it a system of intelligence.
"You cannot watch other nations with your unassisted eye. You have to watch them with
secret agencies planted everywhere.
"Let me testify to this my fellow citizens, I not only did not know it until we got into this
war, but did not believe it when I was told that it was true, that Germarry was not the only
country that maintained a secret service. Every country in Europe maintained it, because they
had to be ready for Germany's spring upon them, and the only difference between the
German secret service and the other secret services was that the German secret service found
out more than the others did, and therefore Germany sprang upon the other nations
unaware, and they were not ready for it."
Nadi This lecture contains copyrglited matena% both of the lecturer and of others and is
intended solely for student use. It should not be repnnductd or cited in publication.
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