LETTER TO MR. HAROLD D. SMITH, DIRECTOR FROM WILLIAM J. DONOVAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00610R000100130008-5
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: June 5, 2002
• Sequence Number: 8
• Publication Date: August 25, 1945
• Content Type: LETTER

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DONOVAN LETTER TO DIRECTOR OF THE BUDGET
WITH ACCOMPANYING "PRINCIPLES WHICH SHOULD
GOVERN THE ESTABLISHMENT OF A CENTRALIZED
U.S. FOREIGN INTELLIGENCE SYSTEM."
The unfortunate publicity given to the Donovan Plan
and to JIC 239/5 forced them into a long retirement. Also
during the first half of 1945 the tempo of the war in
Europe and the Far East was such as to occupy the full
energies of all intelligence agencies. Within OSS consider-
able thought was being given to the theory and principles
of field organization for a peace-time secret intelligence
system, but the place which that would occupy in a national
iniAlligence organization was left without much published
discussion.
Immediately following V-J Day, however, the matter of
liquidation of the war agencies came to the front and the
OSS was threatened with extinction. In this connection the
Bureau of the Bugget played a leading role. This explains
why General Donovan raised once more, and this time with
Mr. Smith, the question of a centralized intelligence service.
It is interesting to note in the letter the clear indication.
that Donovan personally expected to be out of the picture
entirely by the end of the year.
Donovan's presentation again brings forward his propo-
sal to put the centralized service directly under the control
.of the President, with an advisory board made up of the
Secretaries of State, War, Navy and Treasury, or their repre-
sentatives. The inclusion of Treasury was probably due to the
Importance which Treasury had assumed as a customer for Intel-
ligence because of its great interest in Safe Haven matters
and other types of fiscal Intelligence and counterintelligence..
It is not clear from the documents whether this renewal
of the Donovan idea was the stimulus which drove the JCS to
the completion and presentation of their counter-proposal,
embodied in JCS 1181/5. It is, however, interesting to note
that the date of this document as finally amended, 19 September
1945, was but one day in advance of the announcement of the
dissolution of OSS. The division of the OSS corpse between
the State and War Departments was ordered to be accomplished
by 1 October.
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?r. Harold 3mith, eirector
3ureau of the 3udert
xecetive Office of the ''resident
lashimp;ton, J). C.
dear ;Ir. Imith:
,1
OR0001002taii.
2 August 1,45
In answer to your communication of Auguet 23, 1345 in
reference to further reduction of personnel, ye are woreing under
what ie in effect a liquidation budget. Within its provisions ve
have taken steps to terminate any of our operational (as distielet
froe intelli,3ence) activities and to reduce the reeninine pars to
a size consistent with ?reaent eblieatiens in the !sr ]ast, ia ;he
occupation of -;ernany and !eistria, and in the usinteaance af
ia the eiddle :gist on the Lsiatic and -hirenean contlnents,
As our liquiatioa eroceeds it will become increasiaeey
uifficult to exercise our functions so that we have feunti it eeees?
sary to set up a liquidating comlittee with procedures and centrels
to erovide for the adual eliaination of our services in sten lith
the orderly reduction of eersonnel.
It is our estimate, however, with the strictest ecoleny
of nanpower ane of funds the effectiveness of 333 as a War A,Tarey
will end as of January 1, or at the lateet ?ebruary 1, 13.G, st
which time liquidation should be comeleted. At that noint I wish
to return to private life. Therefore, in considerin the diseori
tion to be made of the assets created by 0313, I speak as a ',rivet?
citizen concerned with the future of his country.
In our 7rovernment trxay there is no peraanent ae;ency to
take over the functions 'which 333 will have then ceased to eerrere.
?hese functions utile carried on as incident to the war are in
reality essential in the effective discharge by thie natiom of its
eeseensibilities in the organization and malatenance of the -male.
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btkiti?
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Since last November, T. have oointed out the immedieto
necessity of setting up such an a,eency to take over the veluable
assets created by 333. Amon3 these assets uns the establishment
for the first time in our nation's histery of a forei3n secret
intelligence service which reported information as seen ti.routfn
Anerican eyes. As an integral and insoParablo part of this eervice
there is a group of speoialists to analyze and evaluate the natnrial
for Presentation to those who determine national Policy.
It is not easy to set u a modern intellilence sys7..;e2.1.
It is more difficult to (:o 33 in timeoL peaee than in tile 1.
It is ileortant therefore that it be dons before the ..;ar
Agency has disappeared so that profit may be made of its experience
and "know hoe in deciding how the new agency may best be coneucted.
I have already submitted a plan for the establishmeat of
a centralized systea. lowever, the discussion of that proposal
Indicated the leed of an agreement upon certain fundamental rin-
cinles before a detailed Plan is formulated. If those concernec
could agree upon the prineiplee within which such a system shoOd
be established, accentance of a common nlan would be more email;
acIdeved.
,iecordingly, 1 attach a statelent of principles, the
soundness of which 1 believe has been established b. etude an. by
practical experience.
3incerely,
jilliam S. Donovan
Director
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