Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

700.5-MAP/7-2351

The Deputy Director of International Security Affairs (Coolidge) to Senator Henry Cabot Lodge, Jr.

Washington, July 23, 1951.

Dear Cab: Thanks a lot for sending me your draft bill¹ creating a single agency to administer the Mutual Security Program. While I have discussed it with a few people here, I have not felt at liberty to ask our legislative drafting experts to go over it, and so my comments don’t cover problems of technical detail.

My comments are on the premise that Congress will insist on a single agency, though as you know I think the logic is that the State Department should continue to coordinate and to allocate funds. The views of Hoffman et al are based on the erroneous belief that the State Department “operates”. Even if Point IV is to remain in State, it is largely organizing personnel from other departments to operate the programs.

My comments are as follows:

1. You have fitted the agency into existing legislation very neatly; I was afraid that to create a new agency which does more than the ECA now does would require a complete rewrite of that Act.

2. You are right in having in Defense the operation of the military end-item program. For the new agency to attempt to do that would create the greatest confusion, duplication and inefficiency.

3. As I see it, the big problem is how to ensure that the new agency will not take over the direction of the foreign policy of the United States (e.g., FEA in the last war). It is not enough to say that ECA did not do so, for at least three reasons. First, ECA was a temporary organization, with an expiration date of June 1952. Second, it had a much smaller field of operation than will the new agency, which will have new responsibility for military aid, cover far more countries, and will be beset by the political problems which the creation of NATO produces. Third, ECA has been headed by two men of unusual character and breadth. So the performance of ECA is in my view no gauge of what a future administrator, with the all too common desire to enhance his power, will do as the head of a permanent agency distributing a lot of money annually to most of the free nations throughout the world.

4. Ways to meet this danger, which I believe to be very real (even after discounting my connection with the State Department), are not easy to prescribe. The following might help:

a. Place a time limit of say four years on the existence of the new agency. Congress would then take a look at the whole situation at the end of that period. Incidentally, this might stimulate the foreign countries to greater effort by making it clear that we don’t propose to carry them forever. Probably we will wish to continue many Point IV programs and some aid to a few countries, but they could be continued in a shrunken agency or transferred back: to State as then seems best.

b. Give to the Bureau of the Budget the allocation of funds to the Department of Defense and the new agency. This would not reinstate the power which is now alleged to exist for the State Department to run off with the ball, but at the same time would prevent the new administrator from doing so.

c. Strengthen the language regarding cooperation between the new administrator and the Secretary of State, so that the former must follow the guidance of the latter in matters of foreign policy.

5. In connection with the above problem, I query the advisability of establishing in the Act a series of regional economic ambassadors. It seems to me they would inevitably dominate our ordinary ambassadors in the region. The one in Europe is bad enough and has worked principally because it has been filled by such broad gauge men. I believe that the present system abroad is working as well as the frailty of human nature permits and that such problems as have arisen are due to clashing personalities and would have arisen within a single agency.

These comments are purely personal. I know the matter is complex enough so that they do not cover all the problems which the change you propose will create, but I hope they will be of some help to you. Let me know if I can do more.

I hope the trip was worth while.²

Sincerely yours,

Charles A. Coolidge

1. The draft bill does not accompany the source text. It was not introduced by Senator Lodge.
2. A party consisting of nine members of the Senate Foreign Relations Committee, including Senator Lodge, visited Europe from July 7 to July 23 to obtain a first-hand report on the effectiveness of the United States aid program, the European production and defense effort, and related matters. A similar factfinding mission, consisting of 18 members of the Foreign Affairs, Armed Services, and Appropriations Committees of the House of Representatives had visited European countries from June 9 to June 18.