Meader/Postwar Report

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Report written by Capt. Ralph I Meader to the Vice Chief, Naval Operations, Jan 1949.

This document from National Archives, Record Group 38, Box 74 [nb: this is a correction]

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TOP SECRET

21 January 1949

From: R. I. Meader, Captain USNR To: J. N. Wenger, Captain USNR Subj: 14 Days Training Duty, Report of 1. Attached is a report covering my assignment during my training duty period 7 January to 21 January 1949. 2. May I express my appreciation for the complete and cordial cooperation I received while carrying out my assignment.

R. I. Meader
Captain, USNR

ATT.

[stamped : TOP SECRET–crossed out by marker– and FOR OFFICIAL USE ONLY]

PART I

of Report to Captain J. N. Wenger, USN

At the beginning of World War II, the personnel assigned to Naval Communications Intelligence were faced with the tremendous problem of acquiring from scratch the highly complicated analytical equipments required to cope with the then existing sophisticated systems of enemy encipherments. Except for certain IBM equipments, only one major device was in process of design at the time of Pearl Harbor. This was a project originated through the Bureau of Ships under an NDRC Contract with M. I. T. Early in January 1942, a survey of the then known urgent requirements of CNO was made. The Bureau of Ships immediately started action to acquire equipments by placing contracts with Eastman-Kodak Company, IBM, Gray Manufacturing Company, and the National Cash Register Company in the established methods of the Bureau.

It soon became apparent that the peculiar needs of NCI were such that due to continually changing requirements and to the necessity of instituting extraordinary security measures, special treatment had to be devised if equipments were to be obtained in time to be useful in the active prosecution of the war, and if security were to be maintained.

The following examples are given to illustrate the difficulties of applying standard procedures of procurement for the specialized equipment required by Communications Intelligence:

1. Japanese Speech Privacy

It was known before Pearl Harbor that the Japanese used a particular type of speech privacy system for overseas circuits. This speech privacy system was comparatively simple and offered no difficulty in theoretical breaking. The matter of equipment development to exploit the theoretical method of breaking was handled through the National Defense Research

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Council and a contract with the Bell Laboratories. Excellent theoretical results were obtained from Bell Laboratories. However, the equipment for exploiting this speech privacy system was delivered in 1945, long after the usage of the system had ceased. Therefore, although from a long-range point of view excellent basic work was carried out, from a practical point of view, the results obtained were zero.

2. Photographic Scanning Machines

In the fall of 1941 it was decided that as a result of lengthy discussions between the Army and Navy, optical scanning techniques provided an effective means for performing certain basic analytical processes. Contractual relations were arranged with the Eastman Kodak Company to develop two machines of this type – (a) the Tetrograph Detector, and (b) the Index of Coincidence machine. The protracted correspondence in order to establish the specifications of these proposed devices is a matter of record.

The first model of the Tetrograph Detector did not perform. It was necessary to return it to the contractor for revision and even on the second delivery it still did not perform. In order to get any results from the equipment, it was necessary for technical personnel assigned to the Naval Communications Annex to completely rebuilt the device.

The Index of Coincidence machines achieved some success. However, their history was one of constant difficulties and continual changes by Annex personnel in order to achieve any significant results.

3. Radio Fingerprinting

Early in the war it was realized that methods short of analysis must be applied to get any information concerning submarine activities in the Atlantic. The art of radio fingerprinting had been pursued by

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Naval Communications Annex personnel both at the Annex and at the Naval Research Laboratory. In order to supplement this activity and bring to bear the best talent, a contract was arranged with the Bell Laboratories and extensive researches were carried on at the Bell Laboratories and at Holmmdel, New Jersey. These investigations extended over a period of about two years and the results obtained were extremely weak. The principal reason for the lack of results was undoubtedly the unfamiliarity of the Bell Laboratories personnel with the practical aspects of the problem.

There was also a definite inter-relationship between the various types of equipment needed. This fact had a great bearing on the decision to concentrate our efforts in one activity. In order to successfully develop machines in the quickest possible time, it would have been necessary to divulge to the engineers of the various contractors considerable highly classified information. Widespread knowledge of the purposes of these machines was an extremely dangerous procedure and in fact, it was not deemed feasible to permit this. By concentrating in one contractor, a very few persons needed the whole story. Complete control could be maintained. The project engineers could be given such information as was necessary to develop their projects so long as the top technical level dedicated-administering and guiding all the projects had complete knowledge of the basic requirements. Had we continued to spread the work through several contractor organizations, many more people would have to be let in on the “inside” and our danger of compromise would have been very real.

In attempting to procure equipments of practical value quickly, there was a continuing problem of security. Relationships with the Eastman Kodak Company, the Electromatic Division of IBM, Gray Manufacturing, and others illustrate these difficulties.

The knowledge that equipment produced by the Eastman Kodak Company was not

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meeting the requirements of performance was, of course, transmitted to the Eastman Kodak Company. The primary factor causing the lack of performance as indicated by the Eastman Kodak Company was the unfamiliarity of the Eastman personnel with the operational requirements. It was extremely difficult to furnish these personnel with sufficient operational requirements to make their equipment effective and yet not overstep the bounds of security.

The same situation occurred with the Electromatic Division of the IBM Corporation. In this case there were other complications. The high classification of the equipment made it very difficult for that company to carry out the work since they had not area segregation in their plant. In order to get the equipments completed, it was necessary to reduce the classification and make special arrangements so that the work carried out would in no way reveal the end use. These arrangements, of course, reduced the efficiency of performance of the contractor.

The relationships with the Gray Manufacturing Company showed strongly the necessity for having this type of equipment developed with sole responsibility on a single contractor. The Gray Manufacturing Company developed the comparator portion of the 70mm. comparator equipment. The National Cash Register Corporation developed the printer counter unit. The tape punching equipment was developed at M.I.T. There were tremendous difficulties in integrating these three portions into a single system. Upon delivery of the first comparator unit, it was necessary for engineers from the Gray Manufacturing Company to work at the Naval Communications Annex in revising the equipment so that it would work with the printer counter unit. The punch developed at M.I.T. had to be completely abandoned because the results did not perform in the scanning unit of the comparator. This experience can be paralleled by others which prove definitely that all components of a single system must either be developed by a single contractor or the complete responsibility placed on a single contractor for subassemblies of the complete system.

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In addition to this, procurement of components and raw material presented a great problem. All branches of the armed services were competing with each other for the acquisition of essential material. In a great measure the same components and materials were common to all projects. Tubes, resistors, wire, switches, relays, chassis, cabinets, etc., were just a few. By organizing one central group to handle the procurement, priorities, expediting, etc., this service was performed for all projects; orders were combined and materials switched as the necessity arose from one project to another. In fact, this group would have had to be duplicated in certain measure for all projects had they been separated in various contractors’ plants. it is useless to think that such an important function could have been taken over by regularly constituted agencies such as the various INM – Electronics Control Board, etc. These agencies had to serve many activities of the Navy – CI procurement was just one more added to their list. Even with one group organized for this purpose, it would found necessary to appeal to the CNO for aid. This resulted in Admiral Horne, of CNO, directing Rear Admiral Kelcher to step in, without disclosing the end use of the material, whenever our deliveries were unsatisfactory and to break bottlenecks by ordering other Naval procurement agencies to give way to this all-important business of CI.

A still further advantage was derived from the fact that the entire staff engaged in this work was very flexibly organized and large groups of personnel could be pulled off one project and concentrated on any other that had suddenly become imperative. The information necessary to accomplish the actual fabrication and assembly of equipments was, in many cases, of a Top Secret nature. This work could only be done by qualified Naval personnel for security reasons. By concentrating our efforts in one location, it was possible to assign Naval personnel to this work under ideal conditions. Security control, military control, morale and health conditions could be maintained at very high levels.

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There is ample evidence to support these contentions. The fact that all during the war not one leak in security was traceable to this activity was evidence of our ability to maintain security. The morale and living conditions existing at Dayton, Ohio are shown by the report of Captain Allen which is attached. The speed with which tasks were accomplished is evidenced in the record of the activity at Dayton which is made a part of this report.

Experience gained during the first six months of the war is indicated that the following fundamental essentials are absolutely required as a foundation upon which to build this type of a war time organization:

1. One contractor should be selected having competent and completely cleared development engineering personnel, large manufacturing and assembly capabilities available for this work, and located within easy distance to the Central Naval Intelligence Group (Washington D.C.) for liaison.
2. The key personnel of the contractor must be willing to accept rapid and repeated changes in and specifications (forced on the CI group by enemy action).
3. Local conditions at the contractor’s plant must lend themselves to complete security requirements.

After a careful study, it was decided that the National Cash Register Company fulfilled all of the above initial requirements. A “best efforts” development contract was entered into between the Bureau of Ships and the National Cash Register Company in the late spring of 1942. Steps were taken to immediately enlarge the engineering staff of the contractor. The development engineers went to work on the problems submitted to them by the CI group in Washington. While equipments were in the early design stages, it became more and more apparent that the end result would be equipments of a highly complicated nature unlike any other apparatus that had as yet been constructed. Even

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in those early stages the problem of operation and maintenance of such gear loomed up as a major problem. A decision was made to institute a plan of sending Naval personnel into the plant of the contractor during the early assembly stages of the equipments and having these Naval personnel actually work under the direction of civilian engineers in assembling, testing, debugging and operating the equipments. When the equipments were ready to be delivered to CNO in Washington, these Naval personnel were transferred back with the gear to Washington to maintain and operate the equipments. In addition to the above, jobs such as the wiring of cross wired wheels could only be done by Naval personnel directly under the jurisdiction and control of authorized Naval officers.

The advantages which were gained by the foregoing procedure follow:

1. Complete control over a group of technically trained personnel to accomplish the needs of the CI organization.
2. Uninterrupted applied research and development along lines applicable to RAM equipment for CI use.
3. Complete control over security.
4. Responsibility for procurement of raw material and components necessary to RAM rested in one pgnmbr.
5. Efficient training of maintenance and operating personnel, trained by actually assembling, testing, debugging and operating the equipment before the equipment was delivered to CNO.
6. The closest kind of liaison between this contractor and CNO’s CI group, making possible the rapid and repeated changes necessary as information was obtained.
7. A minimum of delays due to red tape, etc., in a mission where time was of the very essence.
8. The use of Naval personnel in manufacturing procedures, knowledge of which in the hands of unauthorized persons could be disastrous to the

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whole program.

In order to accomplish the above objectives, it was necessary to contract with a civilian organization having:

1. Competent engineering staff flexible enough to permit great expansion. Note that the National Cash Register Company’s Electrical Engineering Department in July 1942 was composed of 17 individuals. This department was increased to some 1200 persons at the peak of operations.
2. Relatively large manufacturing facilities–the National Cash Register Company is in peace time one of the country’s largest manufacturers of small parts. In addition, this company is located in Dayton, Ohio, where there are hundreds of small shops experienced in precision work and available for subcontracting.
3. A location within the contractor’s plant for the processing of this work under adequate security conditions. A building isolated from the main buildings of the National Cash Register Company was devoted to this work and placed under a 24-hour Marine guard.
4. Proper housing and recreational facilities for Naval personnel. This was extremely important inasmuch as enlisted personnel were doing the same kind of work that civilians were doing the civilians were receiving two and three times as much take-home pay. To compensate for this pay differential in some measure, living conditions and recreational facilities had to be the best possible. To this end the Naval personnel were housed in “Sugar Camp”, an NCR facility at Dayton. Adequate housing (six Waves to a cottage containing two rooms, shower and toilet facilities) was available, as well as a large outdoor swimming pool, baseball diamond, dining hall, dance hall, auditorium wired for sound projection and a general lounge.
5. Proper medical care of the Naval personnel. A building located within

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the confines of the National Cash Register Company’s “Sugar Camp” was utilized as a sick bay, containing examining rooms, 10-bed hospital and laboratory spaces in addition to Medical Department dedicated-administrative offices.

6. Proper housing facilities for the Marine Guard. This was accomplished in spaces within the building occupied for this work at the National Cash Register Company. It was found highly advantageous to have the guards housed on the premises where the work was done.
7. Location at Dayton, Ohio, was within 12 hours by rail and 3 hours by plane from Washington, D.C., making the necessarily close liaison extremely easy.

There were certain factors, however, that gave rise to considerable difficulty and if possible should be avoided in any future mobilization of this wartime effort. The outstanding causes of trouble were:

1. The contract written with the NCR was of the “no profit” type. While this was done at the request of the contractor in the spring of 1942, it was definitely the wrong thing to do. The contractors, as their lucrative fixed price war contracts increased, were very reluctant to use their personnel and facilities for no profit at the expense of increasing their profitable work. We reached a stage where 93% of all our specially designed parts were let out to subcontractors. Many of these contractors were incapable of executing precision work and their equipment was such that delays which were intolerable resulted. This became so serious that a meeting was held at the Navy Department in Washington, at which the management of the NCR Company was directed to be present. It was necessary to direct the contractor to prosecute whenever possible the work in his own plant under threat of the Navy exercising its wartime prerogative of

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taking over. Conditions under which this work is accomplished must be as attractive to the contractor as any other wartime endeavor in order to get the complete utilization and cooperation of the contractor and his facilities.

2. The mixture of Naval personnel with civilian personnel continued to be a bone of contention with the management of the contractor. The contractor objected to having personnel in his plant over whom he did not have complete control. It should be borne in mind that the civilians employed under this contract by the contractor, who were subject to draft under selective service, were deferred solely at the request of the Navy and solely for the purposes of working under this overall project. This applied even to the pgnmbr of the department processing this contract. This situation became critical when certain civilians refused to work overtime even when such overtime was deemed absolutely essential to the successful prosecution of the war. However, nothing actually was done except to handle each case individually and to continually pacify the civilians as much as possible. Some method should be devised, however, to overcome a repetition of this condition. Certain alternate suggestions will appear later in this report.

When the need for training naval personnel at the plant of the contractor was recognized, CNO requested Secretary of Navy to establish the activity known as the United States Naval Computing Machine Laboratory at Dayton, Ohio. On December 9, 1942, an officer attached to the Bureau of Ships was ordered to Dayton, Ohio, for additional duty as Officer in Charge of this new activity. This was the same officer who had been dedicated-administering for the Bureau of Ships the Navy Contract with the National Cash Register Company.

At this point all the facts leading up to the establishment of NCML should be reviewed and re-emphasized. This, of course, covers the basic functions it

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was intended to have this activity perform. Up until this time, the dedicated-administration of the research and development contract between the Navy Department and the National Cash Register Company had proceeded along established lines under the direction of a representative of the Chief of the Bureau of Ships who also acted as the representative of the I.N.M. This contract dedicated-administration continued as before. However, the National Cash Register Company requested the representative of the Chief of the BuShips to provide an armed guard 24 hours per day as a security measure. The company also requested the Bureau representative to take over a large measure the growing procurement problem. Because of these requests of the National Cash Register Company, in addition to the problems of handling the personnel sent to Dayton for training purposes, the Ship’s Crew at the USNCML grew to a point where at the peak of operations there were attached:

Officers – Officer in Charge Executive Officer 1 Medical Officer 2 Navy Nurses 4 Officers assigned to procurement 1 Officer – Cost Accountant Enlisted Personnel – 17 Marines 4 Phm. Mates 4 Hospi. Corps. 8 Yeomen

Except for the members of the Medical Department and the executive officer, the above “Ship’s Crew” would have been absolutely essential in the dedicated-administration of the National Cash Register contract even though no naval personnel had been sent from CNO for training or other duty. However, in June 1943 there were some 65 officers and 500 enlisted personnel stationed at the USNCML for training purposes. To reiterate, the fundamental purpose in asking the Secretary of Navy to establish the activity at Dayton was to provide the proper authority for the complete military dedicated-administration of naval personnel sent on temporary additional duty orders for training duty. It had nothing to do whatever with the dedicated-administration of the National Cash Register Company contract. However,

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because of the existence of this activity in Dayton, those officers assigned to procurement and to expedite purchases of materials, the officer assigned for accounting duties and the Marine Guard were attached to the NCML.

During the summer of 1945 the Chief of Naval Communications, Admiral J. R. Redman, made one of his periodic inspections of the activity at Dayton. At that time he requested the Officer in Charge to start planning a peacetime equivalent of the combination of the National Cash Register Company and the USNCML. As a result of this request, the present ERA, Inc., was organized and located at S. Paul, Minnesota. Engineering Research Associates, Inc., took the place of the national Cash Register Company and the USNCML was transferred from Dayton to St. Paul.

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