By the start of World War II, Murphy ran a "secretive EUR/X unit" as an "embryonic intelligence service" within the State Department.
[1] By June 1945, Murphy had become special assistant to the Director of European Affairs at the State Department (later ambassador) H. Freeman Matthews.
[2][10] According to historian Ted Morgan: Ostensibly, there were two camps inside the State Department, one of which, led by Acheson and McCormack, wanted to build up a centralized intelligence unit.
Panuch worked closely with Raymond E. Murphy, who ran a mysterious State Department Office called EUR/X, devoted to the study of worldwide Communist subversion.
Murphy warned Panuch that, prior to the demise of the wartime agencies, the Communist-controlled United Public Workers of America had only one member inside the State Department.
"This means that the Department now has a first-class headache," Murphy wrote Panuch, since Congress was placing riders on all appropriates bills, stating that no part of the funds could be used to pay the salaries of employees who sanction the right to strike against the federal government.
[11] After hearing from a TIME magazine colleague on secondment to State (Samuel Gardner Welles), Murphy visited Whittaker Chambers twice at the Pipe Creek Farm, first on March 20, 1945, then on August 28, 1946.
[3] In 1942, Murphy partook in preparation of a "White Book" analyzing Nazism, along with colleagues Francis Z. Stevens, Howard Trivers, and Joseph M. Roland, and published as National Socialism: Basic Principles.