72. Memorandum From the Assistant Secretary of State for Administration (McCarthy) to the Under Secretary of State (Acheson)0

Mr. Acheson:

I am at present faced with innumerable problems, some of them of very great magnitude, for which I cannot recommend solutions until I have some information on the subject of organizational lines. For example:

Mr. Hoover wants our advice as to what he shall tell the Appropriations Committee about the disposition of his special intelligence organization covering South America. This costs about 3–1/2 million dollars a year, and Mr. Hoover will probably have to give testimony on the subject within the next ten days. If we are to have a Special Assistant for Intelligence, the recommendation on this should be his.

I am also receiving numerous applications, either oral or written, from the highest type of personnel who are available anywhere, but whom we must pick up now if we are actually to secure their services. With our present divided personnel system, however, it is difficult to convince these people that we really have something good for them.

Our estimates must go to the Budget very shortly, but I have no way of knowing how to set up the requirements of the Offices of the Secretary, the Under Secretary and others until we determine upon some organizational plan.

Most confidentially, I understand that Mr. Kurth, who is our budget man and who is virtually irreplaceable, will offer his resignation shortly in order that he may accept a better job with the Treasury. Under our present organization I have nothing better to offer him; under a new arrangement, I believe I could move him up and thus save his services for the Department.

It seems to me that it will be highly desirable to secure the Secretary’s approval for taking the following steps immediately, in order that we may know at least in what direction we are proceeding. I, therefore, recommend:

That there be appointed a Deputy Under Secretary, who would not be a policy officer but who would be responsible for the coordination of business within the Department and general overall relations with [Page 188] other Departments. His office should be adjacent to yours, preferably between yours and the Secretary’s. Under him would be the Central Secretariat. In addition, the Offices of Near Eastern and African Affairs, Far Eastern Affairs, European Affairs, and Controls would report through him to the Under Secretary, but he would not be in a position to overrule any of these on matters of policy as they proceeded to the Under Secretary.
That the organizational units under the Assistant Secretary for Administration be regrouped in such a way as to form four offices: Personnel, Administrative Management, Budget and Finance, and Central Services, and that each of these offices be charged with both Departmental and Foreign Service activities within its field.
That there be appointed an Assistant Secretary for Transportation and Communication, and that the Office of Transportation and Communications now under the Assistant Secretary for Economic Affairs be transferred to this new Assistant Secretary.
That Mr. Russell be assigned as Assistant Secretary for Congressional Relations and that his office be combined with that of the Legal Adviser.
That there be appointed a Special Assistant for Research and Intelligence, and that he proceed to build an organization as conceived by the Bureau of the Budget, and, I believe, all others concerned.

Unless we are to get a quick determination on some or all of these matters, I shall have to proceed on the assumption that the old organizational chart and Departmental Orders will continue to apply, and make budgetary and other arrangements accordingly.

McCarthy 1
  1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Office of the Assistant Secretary for Administration—Subject Files, 1944–47: Lot 53 D 28, Box 15, Folder Nelson, Otto L. No classification marking.
  2. Printed from a copy that bears this typed signature.