Tracy was born in Manhasset, Long Island, New York to Courtlandt Dixon Barnes and Katherine Lansing Barney.

He graduated from Harvard Law School in 1937 and was hired by William Harding Jackson as an associate (1937-1939) at the Wall Street firm of Carter, Ledyard & Milburn.

[1][2] As World War II began, Barnes was commissioned as a 2nd Lieutenant and was one of the first persons to attend the US Army-Air Forces Air Combat Intelligence School at Harrisburg, PA in June 1942 along with his '2nd cousin' John Hay 'Jock' Whitney.

[3] During World War II he served first with United States Army Air Forces intelligence with the Office of Strategic Services.

In 1960, he was appointed Assistant Deputy Director for Plans, under Richard M. Bissell Jr., with direct responsibility for the CIA operation leading to the Bay of Pigs Invasion in April 1961.