To M I 4 was intrusted the extremely important work of counter-espionage among the civilian population. It investigated the activities of the enemy in propaganda, in sabotage, and in the establishment of communications with the home country; it investigated such of his trade activities and financial transactions as might impede our successful prosecution of the war; it discovered enemy influences among political, racial, and religious groups and in labor organizations, and it watched persons throughout the nation who, though not associated with the enemy, were nevertheless engaged in pacifist, revolutionary, and similar activities which were likely to interfere with our military operations. The section operated through many agencies. As a branch of the War Department, it employed intelligence officers serving with troops in the various camps and cantonments, who furnished the section with much valuable information relative to civilian activities which reacted upon the army. Similar information was furnished by the departmental intelligence officers, stationed at the headquarters of the several geographical departments of the army, and by the military attachés in foreign countries. The Department of Justice, the State Department, and the Office of Naval Intelligence also actively co-operated with the section. By the establishment of a system of counter-espionage in foreign countries the section succeeded in frustrating many of the German plans at their source and in counteracting enemy propaganda which, had it gone unchecked, might have had the gravest results. The German method of organized propaganda was well illustrated by the operations of the Chilean-German League, which was founded in October, 1916, by Chileans of German descent, its membership including commercial agents, priests, professors, physicians, merchants, and school-teachers. In a circular dated Valparaiso, October 24, 1917, and marked “Confidential,” the management of the local branch of the league at Valparaiso announced a meeting to be held jointly with the representatives of all German societies of the city for the purpose of founding a propaganda committee. The necessity for starting a propaganda on a large scale was pointed out, and the main object of the league, that of urging the maintenance of neutrality by the Chilean Government, was described in detail. The importance to the Allies of the German ships in Chilean waters was also emphasized, the circular saying, in part: “... if we succeed in postponing the rupture of relations by this propaganda only for weeks, we have aided Germany and her allies to the extent of millions, harming the Allies at the same time by millions.” Though the league succeeded in preventing Chile from joining the Allies, the vigilance and energy displayed by the agents of our counter-espionage service in that country practically nullified the effects of the league’s propaganda in South America.