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CHAPTER
4 CONTINUED
FBI Intelligence AuthorityAnd Subversion
There is no evidence that either the Congress in 1916 or Attorney General
Stone in 1924 intended the provision of the appropriations statue to authorize
the establishment of a permanent domestic intelligence structure. Yet
Director Hoover advised the Attorney General and the President in 1938
that the statute was "sufficiently broad to cover any expansion of
the present intelligence and counter-espionage work which it may be deemed
necessary to carry on."76 Because of their
reluctance to seek new legislation in order to keep the program secret,
Attorney General Cummings and President Roosevelt did not question the
FBI Director's interpretation. Nevertheless, the President's approval
of Director Hoover's 1938 plan for joint FBI-military domestic intelligence
was a substantial exercise of independent presidential power.
The precise nature of FBI authority to investigate "subversion"
became confusing in 1938-1939. Despite the references in Director Hoover's
1938 memorandum to "subversion," Attorney General Cummings cited
only the President's interest in the "so-called espionage situation."77
Cummings' successor, Attorney General Frank Murphy, appears to have abandoned
the term "subversive activities."78
Moreover, when Director Hoover provided Attorney General Murphy a copy
of his 1938 plan, he described it (without mentioning "subversion")
as a program "intended to ascertain the identity of persons engaged
in espionage, counter-espionage, and sabotage of a nature not within the
specific provision of prevailing statues."79
Moreover, a shift away from the authority of the appropriations provision,
which was linked to the State Department's request, became necessary in
1939 when the FBI resisted an attempt by the State Department to coordinate
domestic intelligence investigations. Director Hoover urged Attorney General
Frank Murphy in March 1939 to discuss the situation with the President
and persuade him to "take appropriate action with reference to other
governmental agencies, including the State Department, which are attempting
to literally chisel into this type of work. . . ." The Director acknowledged
that the FBI required "the specific authorization of the State Department"
where the subject of an investigation "enjoys any diplomatic status,"
but he knew of "no instance in connection with the handling of the
espionage work in which the State Department has had any occasion to be
in any manner or degree dissatisfied with or apprehensive of the action
taken by Bureau agents."80
Director Hoover was also concerned that the State Department would allow
other Federal investigative agencies, including the Secret Service and
other Treasury Department units, to conduct domestic intelligence investigations.81
The FBI cited the following example in communications to the Attorney
General in 1939:
On the West coast recently a representative of the Alcohol Tax
Unit of the Treasury Department endeavored to induce a Corps Area Intelligence
Officer of the War Department to utilize the services of that agency
in the handling of all investigations involving espionage, counter-espionage,
and sabotage. . . .
A case was recently brought to the Bureau's attention in which a
complaint involving potential espionage in a middle western State was
referred through routine channels of a Treasury Department investigative
agency and displayed in such a manner before reference ultimately in
Washington to the office of Military Intelligence and then to the Federal
Bureau of Investigation, that a period of some six weeks elapsed. .
. .82
During a recent investigation . . . an attorney and Commander of
the American Legion Post . . . disclosed that a Committee of that Post
of the American Legion is conducting an investigation relating to un-American
activities on behalf of the Operator in Charge of the Secret Service,
New York City.83
Consequently, at the FBI Director's request, the Justice Department asked
the Secret Service, the Bureau of Internal Revenue, the Narcotics Bureau,
the Customs Service, the Coast Guard, and the Post Office Department to
instruct their personnel that information "relating to espionage
and subversive activities" should be promptly forwarded to the FBI.84
The Justice Department letter did not solve the problem, mainly because
of the State Department's continued intervention. Director Hoover advised
Attorney General Frank Murphy "that the Treasury Department and the
State Department were reluctant to concede jurisdiction" to the FBI
and that a conference had been held in the office of an Assistant Secretary
of State "at which time subtle protests against the handling of cases
of this type in the Justice Department were uttered." Hoover protested
this "continual bickering" among Departments, especially "in
view of the serious world conditions which are hourly growing more alarming."85
Two months later the problem remained unresolved. Assistant Secretary
of State George S. Messersmith took on the role of "coordinator"
of a committee composed of representatives of the War, Navy, Treasury,
Post Office, and Justice Departments. The FBI Director learned that under
the proposed procedures, any agency receiving information would refer
it to the State Department which, after analysis, would transit the data
to that agency which it believed should conduct the substantive investigation.
FBI and Justice Department officials prepared a memorandum for possible
presentation to the President, pointing out the disadvantages of this
procedure:
The inter-departmental committee by its operations of necessity causes
delay, which may be fatal to a successful investigation. It also results
in a duplication of investigative effort . . . because of the lack of
knowledge of one agency that another agency is working upon the same investigation.
The State Department coordinator is not in a position to evaluate properly
the respective investigative ability of the representatives of particular
departments in a manner comparable to that which the men actually in charge
of an investigative agency may evaluate the proper merit of his own men.86
Endorsing this view, Attorney General Murphy wrote the President to urge
abandonment of this interdepartmental committee and "a concentration
of investigation of all espionage, counterespionage, and sabotage matters"
in the FBI, the G-2 section of the War Department, and the Office of Naval
Intelligence. The directors of these agencies would "function as
a committee for the purpose of coordinating the activities of their subordinates."
To buttress his recommendation, the Attorney General pointed out that
the FBI and military intelligence:
". . .have not only gathered a tremendous reservoir of information
concerning foreign agencies operating in the United States, but have
also perfected methods of investigation and have developed channels
for the exchange of information, which are both efficient and so mobile
and elastic as to permit prompt expansion in the event of an emergency."
Murphy stressed that the FBI was "a highly skilled investigative
force supported by the resources of an exceedingly efficient, well equipped,
and adequately manned technical laboratory and identification division."
This identification data related "to more than ten million persons,
including a very large number of individuals of foreign extraction."
The Attorney General added, "As a result of an exchange of data between
the Departments of Justice, War and Navy, comprehensive indices have been
prepared."87
President Roosevelt agreed to the Attorney General's proposal and sent
a confidential directive drafted by FBI and Justice Department officials
to the heads of the relevant departments. This June 1939 directive was
the closet thing to a formal charter for the FBI and military domestic
intelligence: It read as follows:
It is my desire that the investigation of all espionage, counterespionage,
and sabotage maters be controlled and handled by the Federal Bureau
of Investigation of the Department of Justice, the Military Intelligence
Division of the War Department, and the Office of Naval Intelligence
in the Navy Department. The Directors of these three agencies are to
function as a committee to coordinate their activities.
No investigations should be conducted by an investigative agency of the
Government into matters involving actually or potentially any espionage,
counterespionage, or sabotage, except by the three agencies mentioned
above.
I shall be glad if you will instruct the heads of all other investigative
agencies than the three named, to refer immediately to the nearest office
of the Federal Bureau of Investigation any data, information, or material
that may come to their notice bearing directly or indirectly on
espionage, counterespionage, or sabotage. 88(Emphasis
added.)
The legal implications of this directive are clouded by its failure to
use the term "subversive activities" and its references instead
to potential espionage or sabotage and to information bearing indirectly
on espionage or sabotage. This language may have been an effort by the
Justice Department and the FBI to deal with the problem of legal authority
posed by the break with the State Department. Since the FBI no longer
wanted to base its domestic intelligence investigations on State Department
requests, some other way had to be fond to retain a semblance of congressional
authorization. Yet the scope of the FBI's assignment made this a troublesome
point. In 1936, President Roosevelt had wanted intelligence about Communist
and Fascist activities generally, not just data bearing on potential espionage
or sabotage; and the 1938 plan provided for the FBI to investigative "activities
of either a subversive or a so-called intelligence type."89
There is no indication that the President's June 1939 directive had the
intent or effect of limiting domestic intelligence to the investigation
of violations of law.
Consistent with the FBI Director's earlier desires, these arrangements
were kept secret until September 1939 when war broke out in Europe. At
that time Director Hoover decided that secrecy created more problems that
it solved, especially with regard to the activities of local law enforcement.
He learned that the New York City Police Department had "created
a special sabotage squad of fifty detectives . . . and that this squad
will be augmented in the rather near future to comprise 150 men."
There had been "considerable publicity" with the result that
private citizens were likely to transmit information concerning sabotage
"to the New York City Police Department rather than the FBI."
Calling this development to the attention of the Attorney General, the
Director strongly urged that the President "issue a statement or
request addressed to all police officials in the United States: asking
them to turn over to the FBI "any information obtained pertaining
to espionage, counterespionage, sabotage, and neutrality regulations."90
A document to this effect was immediately drafted in the Attorney General's
office and dispatched by messenger to the White House with a note from
the Attorney General suggesting that it be issued in the form of "a
public statement."91 In recording his discussions
that day with the Attorney General's assistant, Alexander Holtzoff, FBI
official E. A. Tamm referred to the statement as "an Executive Order."
Tamm also talked with the Attorney General regarding "the order":
Mr. Murphy stated that when he was preparing this he tried to make it
as strong as possible. He requested that I relay this to Mr. Hoover as
soon as possible and stated he knew the Director would be very glad to
hear this. Mr. Murphy stated he prepared this one on the basis of the
memorandum, which the Director forwarded to him.92
The President's statement (or order or Executive Order) read as follows:
The Attorney General has been requested by me to instruct the Federal
Bureau of Investigation of the Department of Justice to take charge
of investigative work in matters relating to espionage, sabotage, and
violations of the neutrality regulations.
This task must be conducted in a comprehensive and effective manner
on a national basis, and all information must be carefully sifted out
and correlated in order to avoid confusion and irresponsibility.
To this end I request all police officers, sheriffs, and other law
enforcement officers in the United States promptly to turn over to the
nearest representative of the Federal Bureau of Investigation any information
obtained by them relating to espionage, counterespionage, sabotage,
subversive activities and violations of the
neutrality laws.93
The statement was widely reported in the press, along with the following
remarks by Attorney General Murphy at a news conference held the same
day:
Foreign agents and those engaged in espionage will no longer find this
country a happy hunting ground for their activities. There will be no
repetition of the confusion and laxity and indifference of twenty years
ago.
We have opened many new FBI offices throughout the land. Our men are
well prepared and well trained. At the same time, if you want to this
work done in a reasonable and responsible way it must not turn into a
witch-hunt. We must do no wrong to any man.
Your government asks you to cooperate with it. You can turn in any information
to the nearest local representative of the Federal Bureau of Investigation.94
Three weeks later Murphy reiterated that the government would "not
act on the basis of hysteria." He added, "Twenty years ago inhuman
and cruel things were done in the name of Justice; sometimes vigilantes
and others took over the work. We do not want such things done today,
for the work has now been localized in the FBI."95
Two days after issuing the FBI statement, President Roosevelt proclaimed
a national emergency "in connection with and to the extent necessary
for the proper observance, safeguarding, and enforcing of the neutrality
of the United States and the strengthening of our national defense within
the limits of peacetime authorizations." The proclamation added,
"Specific direction and authorizations will be given from time to
time for carrying out these two purposes."96
Thereupon, he issued an Executive Order directing the Attorney General
to "increase the personnel of the Federal Bureau of Investigation,
Department of Justice, in such number, not exceeding 150, as he shall
find necessary for the proper performance of the additional duties imposed
upon the Department of Justice in connection with the national emergency."97
President Roosevelt told a press conference that the purpose of this order
expanding the government's investigative personnel was to protect the
country against "some of the things that happened" before World
War I:
There was sabotage; there was a great deal of propaganda by both
belligerents, and a good many definite plans laid in this country by
foreign governments to try to sway American public opinion.
. . . It is to guard against that, and against the spread by any
foreign nation of propaganda in this country, which would tend to be
subversive—I believe that is the world—of our form of government.98
President Roosevelt never formally authorized the FBI or military intelligence
to conduct domestic intelligence investigations of "subversive activities,"
except for his oral instruction in 1936 and 1938. His written directives
were limited to investigations of espionage, sabotage, and violations
of the neutrality regulations. Nevertheless, the President clearly knew
of and approved informally the broad investigations of "subversive
activities" carried out by the FBI.
President Roosevelt did use the term "subversive activities"
in a directive to Attorney General Robert Jackson on wiretapping in 1940.
This directive referred to the activities of other nations "engaged
in the organization of propaganda of so-called `fifth columns'" and
in "preparation for sabotage." The Attorney General was directed
to authorize wiretapping "of persons suspected of subversive activities
against the Government of the United States, including suspected spies."
The President also instructed that such wiretaps be limited "insofar
as possible to aliens."99
With respect to investigations generally, however, the confusion as to
precisely what President Roosevelt authorized is indicated by Attorney
General Francis Biddle's description of FBI jurisdiction in 1942 and by
a new Presidential statement in 1943. Biddle issued a lengthy order defining
the duties of the various parts of the Justice Department in September
1942. The pertinent section relating to the FBI stated that it had a duty
to "investigative" criminal offenses against the United States
and to act as a "clearing house" for the handling of "espionage,
sabotage, and other subversive matters."100
This latter "clearing-house" function was characterized as a
duty to "carry out" the President's directive of September 6,
1939.
Four months prior, President Roosevelt renewed his public appeal for
"police cooperation" and added a request that "patriotic
organizations" cooperate with the FBI. This statement describes his
September 1939 order as granting "investigative" authority to
the FBI and not simply a "clearing-house" function. However,
the President defined that authority as limited to
"espionage, sabotage, and violations of the neutrality regulations"
without any mention of "subversion."101
The statement was consistent with Attorney General Biddle's internal
directive later in 1943 that the Justice Department's "proper function"
was "investigating the activities of persons who may have violated
the law."102
A similar problem is involved with the authority for "counterespionage"
operations by the FBI and military intelligence. President Roosevelt's
confidential order of June 1939 explicitly authorized the FBI and military
intelligence to handle counterespionage matters, and the 1938 plan used
the terms "counter-espionage" and "counter-intelligence."
However, none of the President's public directives formally authorized
counterespionage measures going beyond investigation; and the Justice
Department's regulations made no reference to this responsibility.
Presidential Directive
Directive of the President of the United States
June 26, 1939:
"It is my desire that the investigation of all espionage, counterespionage,
and sabotage matters be controlled and handled by the Federal Bureau
of Investigation of the Department of Justice, the Military Intelligence
Division of the War Department, and the Office of Naval Intelligence
of the Navy Department. The directors of these three agencies are to
function as a committee to coordinate their activities.
"No investigations should be conducted by any investigating
agency of the Government into matters involving actually or potentially
any espionage, counterespionage, or sabotage, except by the three agencies
mentioned above.
"I shall be glad if you will instruct the heads of all other
investigative agencies that the three named, to refer immediately to
the nearest office of the Federal Bureau of Investigation any data,
information, or material that may come to their notice bearing directly
or indirectly on espionage, counterespionage, or sabotage."
Letters To/From ONI
H.G. Dohrman to Ellis
369 South Pacific Avenue
Pittsburgh, Penna.
April seventh 1934
My dear Captain Ellis:-
Have been much disquieted lately by the news constantly trickling in
revealing the very widespread scope of existent radical activities.
My own impression is that the calling of the strike at the works of
the New York Shipbuilding and Drydock Co., was a tactical error, for
thereby it focused the attention of the nation upon the danger to the
nation of the interruption of our belated shipbuilding program. Some
master mind among the radicals must have been asleep for they well know
that strikes called in a half-dozen or more plants fabricating essential
elements of naval construction will as effectually block progress towards
the completion of the ships, as will a single prominent strike.
Deem it unfortunate that it was publicly noted that the modernization
of two ships of the battleship squadron was advisedly postponed.
I write with the full knowledge of the fact that no emergency requires
the return to active duty as such officers as myself and that therefore
no compensation is either asked or expected.
For something over one year, while attached to the Bureau of Ordnance,
worked under the late Commander A.L. Norton, on a very extensive program
of anti-radical work, directed towards uncovering such movements, issuing
advance warnings of all those likely to interrupt the continuous flow
of navy material, or to be destructive to life and property.
My understanding, through my old time friend the late Vice-Admiral
Niblack, was to the effect that Intelligence was kept advised of our
movements as made or proposed. My number was "7 _ 6".
We were able at that time to command, without expense, the services
of the intelligence divisions of several of our greatest corporations,
of men prominent alike in civil life and the clergy.
It is not purpose to convey to you the impression that the excellence
of that service, and numerous commendatory letters and verbal statements,
indicated that it was distinctly serviceable, can be repeated.
Wide and continued travel was necessary and much personal, as well
as departmental, expense was incurred. Like almost every other man in
business have suffered reverses that prohibit personal expenditures
of that nature; however, my desire to be of service to the Navy is as
ardent as it has been these forty-odd years.
The basis of that war time interchange of information was based on
the inviolability of all such information, which was received, digested
and the important portions forwarded where needed. Such Navy information
as it was not incompatible with the public interests to reveal was passed
along and information from private conversations between Captain Norton
and myself and sources were never mentioned.
This afternoon, in the course of a two hour conversation with the
executive head of the greatest of these private intelligence organizations,
he expressed a willingness to renew in somewhat the same form the old
relations. As a matter of fact this man and myself have almost weekly
conversations and exchange information upon such subjects, for I still
keep in touch with several of the best of our former men. One in particular
visits constantly every place of consequence on the Mississippi and
all of its tributaries, covering the entire Middle West, inclusive of
the extreme northern and southern portions thereof. I am confident that
he will gladly report conditions exactly as he finds them, and I may
say that such reports as he may make can be absolutely relied upon.
Have known him well for thirty-five years, he is professionally highly
competent and his judgment sound.
If the idea appeals to you believe I can secure for you the cooperation
of at least three of the nation's greatest industrial intelligence organizations,
whose services will not cost the Bureau a penny. My own duty would be
to act in the capacity of a screen, removing all non-essential information
before forwarding the result to you.
I shall be glad to contribute as much time as possible and postage,
unless it is in the end the latter should become burdensome, for these
days we have to carefully scrutinize even such relatively small items
as postage.
In the manner above suggested it will be feasible to cover, in a fairly
thorough manner, radical activities promising future potential harm
to the Navy, over the most prominent of the centers devoted to the fabrication
of steel and to the kindred industries that often are found in steel
districts.
In any event am offering the above for your thought; if the idea does
not seem either sound or practicable to you, do not hesitate for a moment
to say so.
It may be proper to add that in, to me, a highly expensive adventure
into the soft coal industry, as president of an operating company kept
the Tri-State Operators so fully advised of every movement of the military
strikers, that violence and loss of life in our district was almost
negligible throughout the strike period of 1922 and 1923.
I fully understand that it is often impossible for a Bureau Chief to
do officially what he would like to do personally, even though no cost
be attached to the Bureau. I know that much even if we didn't have a
General McCord in that day.
Believe me to be with warmest regards and best wishes.
Cordially,
H. G. Dohrman
Ellis to Dohrman
Op-16-B-2
Apr 12, 1934
My dear Dohrman:
I am very grateful indeed to receive your extremely interesting letter
of April 7th in regard to radical activities in the shipbuilding
and steel industries.
Naturally this office is very much interested in receiving information
along the lines you suggest and I assure you that your generous and
patriotic offer to devote your time and effort without compensation
to securing such information is greatly appreciated.
If you can arrange to keep in touch with the private intelligence organizations
which you mention and secure a flow of information regarding the current
activities of radical groups, I shall be very glad to provide for the
matter of postage.
Thanking you for your communication and with assurance of my personal
regards.
Very sincerely,
/s/ Hayne Ellis
Rear Admiral, U.S.N.,
Director of Naval Intelligence
Dohrman to Ellis
April twentieth 1934
My dear Admiral
Thank you for your cordial letter of the 18th, I sincerely
hope that your ten days leave will prove to be both pleasant and beneficial.
Am now able to definitely say that we will have the hearty cooperation
of the following:-
The Aluminum Company of America,
The Carnegie Steel Corporation,
The Jone and Laughlin Steel Corporation, and
The National Steel Corporation
The first and fourth at present time have no special intelligence service
of their own, but do have excellent police organizations together with
an unofficial but usually effective inside organization.
These concerns have plants in almost every important manufacturing
district of the nation and information will be received from all of
them.
Other sources previously mentioned, and some only considered but not
yet mentioned, will materially add to the area covered and the efficiency
of the service. When all arrangements have been completed, you will
be duly advised.
If a list can be procured from C&R Ordnance and Aeronautics giving
only the plants holding Navy contracts, the material under fabrication
being impossible to obtain elsewhere, we will do our best to advise
all such plants in advance of visits from agitators, etc. Plants making
material that can be secured from numerous other plants of like type
need not be included in such lists. The material being fabricated or
the amounts of the several contracts are immaterial: our sole aim will
be to insure, if possible, the uninterrupted flow of Navy material.
So far all former members of our old wartime organization who have
been approached and had the situation explained to them, have agreed
to go along with us.
With sincere good wishes,
Cordially,
/s/ H.G. Dohrman
Dohrman to Ellis
April twenty-seventh, 1934
My dear Admiral:-
Supplementing my informal report of progress made as of the twentieth,
am glad to be able to advise you that negotiations have been closed
with the following:
New York Central Ry. Lines
The Pennsylvania Railroad
The Westinghouse Electric & Mfg. Co., and,
D.W. Sowers.
The latter is the executive head of a very efficient Buffalo (N.Y.)
organization, maintained at private expense and not for profit, whose
business it has been for approximately twenty years to combat radicalism.
I know by experience in cooperating with it in the past how very efficient
it has been. Mr. Sowers is president of a large manufacturing concern
there that bears his name., and he had promised us cordial and prompt
cooperation. His card files contain the names of some 4,000 actual and
semi-radicals.
When our intelligence clearing house once gets going in good shape,
we hope that it will be of value to you.
You will note that we gave covered, with the exception of the New England,
Southern and far Western states, the heart of the nation's manufacturing,
and through one of my old men, to whom previous reference has been made,
a considerable portion of the South will likewise be covered.
As you will appreciate, it is something of a task to coordinate these
varied sources of information, and to put the information received into
shape for instant dissemination.
The time is certainly ripe for action. There were no evening papers
here today, one paper had it's large windows smashed with bricks, etc.
A strike of the folders.
In each case those cooperating with us have been advised, in advance,
that the sources of information would not be revealed, and that each
participant would receive only the information appertaining or useful
to them. Some of those interested with us have excellent organizations
already, others possess the nucleus. As often hapens the organization
that needs it most has the poorest present service of information.
With best wishes and regards,
Cordially,
H.G. Dohrman
Dohrman to Ellis
April thirtieth 1934
My Dear Admiral:-
The enclosure103 will illustrate the method of gleaning
information adopted. You already know the institutions whose intelligence
service has been placed at our disposal and with whom we now arranging
inter-communicating services.
If you have two or three hundred of the green second sheets, like
the enclosure, can use them to advantage. The green gives quick identification
in our files.
The enclosure represents the 18 plants employing almost 17,000 men,
the plants being distributed throughout the states enumerated, and all,
as you have doubtless already gathered from the keyed numbers, being
those of a single concern.
The other concerns are as large or larger, though their interests
are not so widely scattered.
While all operations for the present are being conducted from the local
Carnegie Steel offices, the probabilities are that the several concerns,
later, will provide a separate office, as the work so far gives promise
of assuming a considerable volume.
Conditions are not good here; four local theatres were bombed here
last night due to the rivalry of two unions, one anti-AFL. A street
car strike is brewing, the truck drivers and garage attendants seem
likely to "go out," so there is the devil to pay generally
around here.
With best wishes and regards,
Cordially,
/s/ H.G. Dohrman
Hoover to Ellis
Division of Investigation
U.S. Department of Justice
Washington, D.C.
May 21, 1934
Rear Admiral Hayne Ellis
Director, Naval Intelligence
Navy Department
Washington, D.C.
Dear Sir:
I am in receipt of information from the Pittsburgh Office of this Division
to the effect that it has been learned from a reliable source there
that one Horatio Garrott Dohrman is active in that vicinity in soliciting
funds and organizing a unit for the alleged purpose of investigating
communistic and other subversive activities. It is reported that Dohrman
has represented himself as a former Lieutenant Commander in the Navy,
in view of which it is believed that this information may be of interest
to you.
Very truly yours,
/s/ J. E. Hoover
Director
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CHAPTER 4
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