As we have said, the KGB does not look for this information in public documents. Neither is it interested in monitoring foreign radio transmissions and distilling from them crumbs of random information. It procures the military secrets of foreign governments from the classified files of the general staffs of those countries, from the secret reports of foreign defense ministries, from military research laboratories and proving grounds, and so it knows that what it gets represents, even if incompletely, the true facts on which Soviet policy makers can confidently base their decisions.
In wartime, military intelligence becomes the principal function of every branch of the Intelligence Directorate of the KGB. The main task of its field posts, its underground residenturas abroad, is then to inform the Soviet government by radio and other means about the war plans of the enemy, his troop concentrations and movements, the size of his uncommitted reserves in men and materiel, and the extent of the damage inflicted on the enemy by the air forces of the Soviet Union and its allies. Diplomatic intelligence concentrates the efforts of its informants and secret agents on watching the relations among the governments of the enemy coalition, with special emphasis on frictions among them. The residenturas must keep a sharp eye also on Russia's allies in the war, immediately signaling to the Soviet government if an ally puts out peace feelers and is gravitating toward a separate peace with the enemy. It may be recalled that during World War II the Kremlin sounded an alarm when it intercepted rumors that British representatives were about to meet in Franco's Spain with emissaries of Hitler. During the worst days of the last war, when Russia's defenses were crumbling and the Western allies were slow in opening a second front, there were moments when the Western leaders were jittery at the thought that Stalin might try to save what was left of the country by making a separate peace with Germany.
While the residenturas abroad keep the government informed of the enemy's grand strategy and his capabilities and vulnerabilities, day-to-day tactical or combat intelligence is taken care of by the intelligence sections of the Soviet armed forces and by the special detachments (Osoby Otdel) of the KGB attached to all army units down to the regimental level. It is their duty co supply the Soviet commander with data on the size, disposition, and fighting strength of the enemy force with which the troops under his command will soon be locked in battle. The standard sources of military intelligence are supplemented by material obtained in raids the KGB guerrilla detachments make on enemy headquarters, by ground and aerial photo reconnaissance, and by the interrogation of prisoners, refugees, and spies who pose as refugees.
The third line of Soviet intelligence is called economic intelligence, which contrary to what might be supposed has little to do with studying the economy of foreign countries. It was created for the purposes of exercising State control over Soviet export and import operations and of protecting Soviet foreign trade from the pressures and abuses of international cartels and other organizations of monopolistic capital.
In the 1930's, for instance, the Division of Economic Intelligence discovered that the biggest electric concerns of the world had entered into a "gentlemen's agreement" according to which they would not compete with each other in their dealings with Soviet Russia and would overcharge her on purchases up to 75% over current world prices. I myself saw a letter signed by the vice president of General Electric Co. addressed to the presidents of the German AEG and the Swiss Brown Bovery Co. which contained a list of prices made up especially for the Soviet Union 60 to 75% higher than the regular market prices. General Electric tried to justify this extortion by pointing out that Russia's credit standing was "not too good." The gentlemen's agreement was finally broken up by the Soviet government, but not before Soviet trade had suffered losses totaling tens of millions of dollars.
The fourth line of Soviet intelligence is misinformation. The Soviet government is interested not only in obtaining information about the policies and impending moves of other countries but also in misinforming and misleading the foreign governments concerning its own position and intentions. But whereas in procuring secret information from abroad the intelligence officer is given free rein to steal whatever he considers valuable, the task of misinforming the outer world about the Soviet Union cannot be left to the discretion of the individual officer or even of the intelligence service as a whole. What false information or rumors should be deviously placed within earshot of some foreign government is a question of high policy, since the purpose is to induce this government to do what the Kremlin wants it to do, perhaps to bluff it into inaction or into making a concession. In this area, therefore, Soviet intelligence cannot act without specific directives as to the substance of the misinformation and the way it should be planted.
When in the 1930's, for instance, the Soviet government wanted to obtain a mutual defense treaty with France in order to counteract the growing menace of Hitler's Germany, Soviet intelligence was given instructions to introduce into French General Staff channels certain pages from a German army report which showed that Germany was planning to occupy the Rhineland at the beginning of 1936 and invade France within eighteen months after that. Similarly, at about this same time, an effort was made to shake England out of her complacency by slipping into British intelligence channels (through a German double agent) inflated figures concerning German aircraft production; these created quite a stir in the highest councils of the British government. Here the task of the misinformation desk of the NKVD had been to fabricate ostensible photocopies of the German documents with such skill that they would seem genuine even to trained military experts.
During the Spanish civil war; in which a Russian tank brigade fought against the forces of General Franco and Russian pilots flew the newest and best Soviet fighter planes (I-15 and 1-16) and medium bombers (CB) against the German air squadrons supporting him, the misinformation desk was ordered to introduce into German military intelligence channels the information that these Soviet planes were not of the latest design, that Russia had in her arsenal thousands of planes of second and third succeeding generations possessing much greater speed and higher ceiling. In August 1937 German experts had examined and tested two Soviet I-16 fighters when they landed by mistake on an enemy air strip in the Madrid sector, and they had been amazed at the quality and performance of the planes, which in some respects surpassed German fighters. Now the false information that the Russians had on the production line still better and more modern models served Stalin's evident aim of impressing upon Hitler that the Soviet Union was better armed than he thought and that it would be wiser for Germany to have Russia as a partner than as an opponent.