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[[File:Badge of the United States Secret Service (1875-1890).png|thumbnail|left|250px|Figure 2. The Secret Service was responsible for foreign intelligence in the late 19th century.]]
Modern American espionage begins in the late 19th century. This included Grover Cleveland calling for assigning military attachés in foreign countries to gather more information about different countries. John Wilkie became head of the US Secret Service in the 1890s and became noted for breaking up a Spanish spy ring in Montreal during the Spanish-American War. The Secret Service (Figure 2), in fact, was created as a result of the Civil War (in 1865) and for its first few decades mostly focused on combating counterfeiting of the US currency and other acts that could sabotage the US economy, such as smuggling.
In 1908, the Bureau of Investigation, what eventually became as the Federal Bureau of Investigation (FBI), was formed. Initially, they focused on policing activities and against organized criminal activities such as prostitution. However, they also engaged in domestic surveillance. This was tested in World War I, where they were able to discover German agents and saboteurs. Nevertheless, in World War I, the US was still not effective in foreign espionage. Most intelligence from World War I depended on British spy services that were established.<ref>For more on the rise of American spying after 1865 and until World War I, see: Hastedt, Glenn P., ed. 2011. <i>Spies, Wiretaps, and Secret Operations: An Encyclopedia of American Espionage</i>. Santa Barbara, Calif: ABC-CLIO.</ref>