The espionage act was mainly passed to keep people from transferring materials/information to the enemy or interfering with military operations. The Espionage Act is more or less the way to enforce these Executive Orders and gives them Congressional and legal sanction it is what gives the "SECRET" stamps any legal meaning. The guidelines on how the information needs to be handled is defined by the aforementioned Executive Orders (every President issues a new one Obama's was Executive Order 13526). What the Espionage Act has evolved into is general legal "teeth" behind a system of regulating American defense-relevant information. (There are only a few exceptions to this in US law one of them is the patent secrecy law that was passed at the same time as the Espionage Act - again with the technical fears - the other is the later Atomic Energy Act.) Typically this only applies to information generated by the government itself - you can't, under the Espionage Act, classify "public" information, or information created by a private source. The "defense information" bit means that the President can, through Executive Orders, define the requirements for what is a secret and what is not. The punishments go up depending on your intentions - if you're deliberately trying to hurt the US or help its enemies, the punishments are higher than if you, say, accidentally give it away or give it away with really good intentions. What it says is basically that if the US government deems a class of information "defense information," they can punish you if you do a variety of things with it. OK, so they passed the Espionage Act right at the end of it. Secrecy in war from WWI forward had that but introduced new and important categories like "what kind of super cool new weapons am I working on" and "what kind of information have I intercepted about the enemy." (The submarine was the "wonder weapon" of WWI and the cause of a lot of American fears.) Secrets in war prior to WWI were more along the lines of "how many troops are here and how many of them are going to be somewhere else in three days" and things like that ("troop movements"). Why? Fears of German spies, fears of local insurrection, and new fears about the role of technical information in war. You had lots of informal secrecy, but very few laws about it - very few ways in which the government could say, "ah, I consider this information to be secret, and if you violate that understanding, I can punish you." Prior to the Espionage Act, secrecy was largely what I call "contractual": you signed a piece of paper that said, "I agree to keep this secret, and if I fail, you can do stuff to me," which is very different from a "compulsory" secrecy regime where if you give away something that is considered secret, you can go to jail, whether you agreed to keep it secret or not. There were some military regulations as to what to do if someone was spying (who was in the military), but that was basically it. There were basically no laws about it until the 20th century. Official secrecy in the United States is remarkably recent. So a little backstory on the Espionage Act and how it works.
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