THE OFFICIAL U. S. BULLETIN: SATURDAY, DECEMBER 7, 1918. 35 FULL TEXT OF ANNUAL REPORT OF THE CHIEF OF STAFF, U. S. ARMY partment property lield in cars were con­gesting various Atlantic ports. Steps were taken which relieved this condition and brought about an orderly movement of the traffic when and in the quantities desired. The value of the inland traffic service was soon demonstrated and led to a reorganization, with authority to take over the transportation organizations of the various bureaus of the War De­partment, both at Washington and throughout the country, so that as now organized the chief of the inland traffic service exercises direct control of the transportation of troops, of the sup­plies of and for the various bureaus of the War Department, and for the contractors working for the several bureaus. This control extends Over the entire country through the medium of representatives stationed at various traffic centers. Working in conjunction with the Rail­road Administration has resulted in minimizing the burdens of the carriers. The work has been performed most effi­ciently. More than 5,000,000 troops have been moved from their homes, from one camp to another, and from camps to the points of embarkation within the period covered by this report. Arrangements have been made by which this branch will take charge of all express movements for the War Depart­ment, as well as the tracing of the move­ments of all War Department property, including the contractors and others for the various bureaus. Purchase and Supply Branch. The Purchase and Supply Branch is or­ganized into the following subsections: Supply Program, Purchase, Production, Finance, and Emergency. The Supply Program Section receives the Army program and compiles the re­quirements of the Army in terms of both articles of issue and commodities, which are furnished to the War Industries Board, Shipping Board, War Trade Board, and other Government agencies. A comprehensive study of the require­ment obligations of the United States and the allies is in preparation, and a large number of outstanding questions of dis­placement have been disposed of and sup­plied. The Purchase Section provides for the consolidation of procurement of numerous articles of issue and raw material; has evolved a standardization in the form of contracts; prepared standard clauses for insertion in contracts to establish a stand­ard purchase policy and legal procedure therewith ; conducted investigation for re1 ducing the number of types of articles purchased; leased and purchased all the real estate theretofore negotiated for by different departments, and supervised the commandeering and appraisal of all prop­erty for the use of the War Department. It also cooperated with the War Indus­tries Board for clearances on behalf of the War Department. The Emergency Section supervised the preparation of and issued standard speci­fications for paint, boxing, crating, and baling, and established a surplus inac­tive supply service to provide for the utilization or disposition of obsolete in­active surplus supplies. The Production Section provides for the fulfillment of promised deliveries of products in accordance with approved schedules. The Finance Section lias standardized accounting, fiscal methods, and daily re­ports to show allotments, expenditures, and requisitions on the Treasury-in fact, a brief and complete statement in con­solidated form of the daily financial oper­ations of the War Department. A liaison officer has been appointed for each of the supply agencies. These offi­cers and their representatives form a centralized liaison organization under the direction of an officer of this branch, from which radiates lines of direct and speedy communication to each of the bureaus and corps. All conduct with these sup­ply agencies is carried on through this liaison organization, which furnishes an effective means of coordination. In the Administrative Section of the division a branch was set up for indus­trial research, having for its object the saving of cargo space, and investigations were made with this end in view. Regu­lations were issued with reference to box­ing, baling, and crating, and marking over-seas shipments in cooperation with the various bureaus and outside experts. Special investigations were undertaken on the practicability of transporting boned beef to France instead of the com­plete carcass, as at present; the practi­cability of various substitutes for woolen cloth; the extent to which fiber contain­ers can be substituted for metal contain­ers. The work has been in charge of Dr. Arthur A. Hamerschlag. Military Intelligence Division. The Military Intelligence Division has as director Brig. Gen. Marlborough Churchill, United States Army, Assistant Chief of Staff. This division, which had been a branch, first of the War Plans Di­vision and then of the Executive Division of the General Staff, was separated com­pletely and made an independent division by general orders which reorganized the General Staff, thus putting the Military Intelligence Division on a par with simi­lar services of general staffs of other nations of the world. The duties of the Military Intelligence Division consist, in general, in the organi­zation of the intelligence service, positive and negative, including the collection and coordination of military informa­tion ; the supervision of the department intelligence officers and intelligence of­ficers at posts, stations, camps, and with commands in the field, in mat­ters relating to military intelligence; the direction of counter-espionage work; the preparation of instruction in military in­telligence work for the use of our forces; the consideration of questions of policy promulgated by the General Staff in all matters of military intelligence; the co­operation with intelligence branches of the general staffs of other countries; the supervision of the training of officers for intelligence duty; the obtaining and issu­ing of maps; and the disbursement of and accounting for intelligence funds. Coordination of Work. One of the important functions of the Director of the Military Intelligence Di­vision is that of coordinating the work of this service with other intelligence agencies. Possible duplications of work and investigation by the State Depart­ment, Treasury Department, Department of Justice, Navy Department, War Trade Board, and the War Department are avoided or adjusted at weekly confer­ences held at the Department of Justice and attended by representatives of these departments who consider matters of common interest. For a similar purpose the Director of Military Intelligence is a member of the Fire Prevention Commit­tee, the War Industries Board, and the National Research Council. For the purpose of securing close co­operation between the military intelli­gence services of the nations associated in the war, the British and French Gov­ernments were requested by the United States to send officers to this country for liaison duty. These officers have been of great assistance in accomplishing this end, because of their knowledge of the details of intelligence work in Europe. Eight Sections Established. For the performance of the service for which the Military Intelligence Division was developed, eight sections have been established, each dealing with its peculiar problems, and working in close liaison with its fellows. They are as follows: M. I. 1. This is the administrative and coordinating section. Its duties are to assist the director in supervising the work of the various sections, to account for the intelligence funds, to keep accu­rate records and files of the correspond­ence and reports of the division, to select and commission officers for this division, and to hire and supervise civilian per­sonnel. M. I. 2. This is the Positive Intelligence Section. It is the province of this section to gather combat information and supply it to our fighting forces. It gathers politi­cal information from all countries now in the war against the United States, or likely to enter the war on the side of the enemy. It attempts to estimate the pys- chological situation in enemy or prospec­tive enemy countries. Further than this M. I. 2 develops plans for propaganda in foreign countries, prepares monographs on conditions in foreign countries, and keeps them up to date. It distributes this information to the proper authorities. M. I. 3. The functions of this section consist in the organization, instruction, and supervision of the Negative Intelli­gence Service within the military estab­lishment ; more specifically it protects the Army by the prevention and detection of enemy and disloyal activity among the military, including civilian personnel un­der military authority and in volunteer auxiliary organizations. Watch on Enemy Agents. M. I. 4. The function of M. I. 4 is the collection, collation, and proper dissemi­nation of information with respect to the activities of enemy agents and propa­gandists in this country, and movements outside the Army calculated to hinder the successful prosecution of the war. M. I. 5. This section is concerned with the maintenance of close correspondence with military attaches abroad who col­lect information concerning the activities of enemy agents and other matters of military value. It digests all such in-