700.5–MAP/10–1051

Memorandum by the Director of the Management Staff (Heneman) to the Under Secretary of State (Webb)1

Pursuant to your request, I am attaching for your consideration a staff memorandum concerning alternative methods for submitting the 1953 Mutual Security Program. The advantages and disadvantages of submitting one to three bills are discussed.

This memorandum incorporates suggestions made by Messrs. Coolidge, Ohly, Martin and Brown2 of the Department and by Mr. Finan3 of the Bureau of the Budget.

Your views on this matter should be communicated to Mr. Coolidge and Mr. Ohly as early as possible.

H. J. Heneman
[Page 409]
[Annex]

Staff Memorandum

Subject: 1953 submission for the Mutual Security Program

An early decision on the manner of presenting the 1953 Mutual Security Program is desirable, since the decision will influence to a considerable extent the procedure by which the 1953 program is developed for presentation to the Budget Bureau and Congress. The program is already in the early stages of development and authorizing legislation, including the amounts, is to be submitted to the Budget Bureau by November 15.

The component elements of the total program for 1953 will presumably include:

a.
Military end-items and training (including infra-structure and similar costs if these are to be treated as Mutual Security rather than regular national defense items).
b.
Economic aid in support of military production or otherwise directly related to military effort (including technical assistance of the European type, for productivity and similar purposes).
c.
Economic aid to underdeveloped areas having a substantial supply or construction element in addition to technical assistance, but not primarily designed to support a military effort. This would include such programs as those currently contemplated for certain countries of Southeast Asia and for India.
d.
Technical assistance under the Point Four Program, including contributions to UN technical assistance.
e.
Contributions to the UN relief and rehabilitation programs for Korea and for the Palestine refugees.

There appear to be three alternative ways in which the total program containing these elements can be presented:

Alternative A would be to have a single bill including all the above elements, as was the case this year. Presumably such a bill would have a common statement of purpose and a single set of general provisions, with the substance of the program broken down either regionally, as this year, or functionally (military vs. economic vs. technical assistance), depending on which breakdown would enable a better presentation.

Alternative B would be to abandon the single-package approach in favor of three separate bills—one for military end-items and training, one for economic aid in support of the military effort, and one for aid to underdeveloped areas, which would include Point Four and might also include the Southeast Asia and India type of combined economic and technical aid and the UN Programs for Korea and the Palestine refugees. The theory of this arrangement would be to divide the program according to the administering agency, with Defense responsible [Page 410]for the military programs, the new Mutual Security Agency for the economic aid in support of the military effort, and the State Department for the balance.

Under this plan the handling of the Southeast Asia-India type of program combining technical assistance with substantial economic grant aid, would depend on whether the Administration is content to accept the Conference bill restrictions on the future functions of the Mutual Security Agency. This decision in turn will be affected by the size and kind of programs planned for those areas. The Mutual Security bill as reported by the Conference would appear to prohibit the Mutual Security Agency from administering any programs of the Southeast Asia-India type after June 30, 1952, so that in 1953, unless this provision is changed, these programs would presumably be amalgamated with Point Four and would be administered by State. If these programs will in fact be reduced to little more than technical assistance programs in 1953, there would be no reason to alter this arrangement. However, if they are to contain substantial elements of emergency economic aid, it might prove desirable to seek to have them administered by MSA, in which case they should be included with other temporary economic aid in the second of the three bills.

Alternative C would be to have two bills—one including military aid and supporting economic aid, and the other including Point Four and the UN Programs for Korea and the Palestine refugees. The general theory of this arrangement would be to separate those programs directly related to the military build-up from those designed to promote security by giving help to underdeveloped areas. The Southeast Asia-India type programs would logically belong in the latter category, but might be put in the first bill if MSA were to be the administering agency.

Relative Advantages

From a practical standpoint, in the light of this year’s experience, there are certain advantages to be gained from adopting Alternative B, the three-bill plan. In effect, it would put the responsibility on each of the three administering agencies to justify and defend its own share of the program and the accompanying legislative provisions. This should make for a more aggressive justification for each separate segment. In addition, it would make it possible to capitalize on Congressional support for those parts of the program which are strongest, without having them adversely affected by Congressional reaction to other program segments with less inherent appeal or less adequately presented.

Disadvantages

However, on examination, the three-bill alternative would seem to have some very serious disadvantages which should be carefully weighed before any decision is taken. Among these are: [Page 411]

1.
It would be in effect a denial of the principle which has been made with great insistence in this year’s presentation—that the military and supporting economic aid are interdependent, and to a considerable extent interchangeable, means to a single end of building defensive strength. This applies with most force to Europe, including Greece and Turkey, but would also be significant in the programs for Formosa, Indo-China, and the Philippines.
2.
The Conference bill as reported lays great stress on the integration of the assistance programs both at home and abroad and makes the Director of Mutual Security directly responsible for the preparation and presentation of the total program. While this would not preclude separating the program into three bills, that would not appear to be a step in the direction of more effective integration of the total program.
3.
The Bureau of the Budget and the Committees of the Congress have for some years now been pressing for a complete single package presentation for foreign aid. The Administration has frequently been criticized for presenting foreign aid items piece-meal and in fragmentary form.
4.
Three separate bills would make it more difficult to have adequate provisions for transferability between the several types of aid or between regions—a flexibility which was considered important this year and presumably would be again.
5.
There would be less opportunity for the State Department to make known its views on the foreign policy implications of military and supporting economic aid if these were handled in separate bills with other agencies primarily responsible for presenting them.
6.
Separate bills would probably delay the process of hearings and Congressional action since, if the same Committees of both Houses handled all of them, they would have to take up each of several bills in succession. On the other hand, if military aid were in a separate bill it might be handled by the Armed Services Committees, which would further weaken the unity of the program.

Because of these disadvantages, most of which also apply, though with less force, to the two-bill alternative, the weight of argument would seem to be in favor of again presenting the program in a single bill, perhaps with primary subdivision between three major types of aid rather than by regions. However, serious consideration should also be given to Alternative C, which is free from the major disadvantage of the three-bill approach in that it recognizes the interdependence of military and supporting economic aid. One advantage of Alternative C is that it would permit a separate emphasis and attention to be focused on the problems of underdeveloped areas, avoiding the impression that they have a disguised military purpose. Programs for underdeveloped areas are as truly a part of our total security effort as assistance devoted directly to building military strength, but they do involve a different approach and emphasis and will presumably run for a longer time than the large-scale military build-up.

Consideration should also be given to whether the advantages of Alternatives B or C could not be obtained as well by separate titles within a single bill, since in any event the Director of Mutual Security [Page 412]will, under terms of the Conference bill, be responsible for all phases of the presentation.

  1. The source text was transmitted by William J. McWilliams, Director of the Executive Secretariat, to Charles A. Coolidge, Deputy Director, International Security Affairs, on October 10, with the following notation: “Mr. Webb has gone over the attached memorandum from Mr. Heneman concerning alternative methods for submitting the 1953 Mutual Security Program.

    “Although he does not wish to give you a flat decision which will bind your hands on this matter, it is his opinion that Alternative C is the best way to handle the program in 1953.”

    Additional documentation on the development of the Mutual Security Program for Fiscal Year 1953 will be presented in a subsequent volume in the Foreign Relations series.

  2. Ben H. Brown, Jr., Deputy Assistant Secretary of State for Congressional Relations.
  3. William F. Finan, Assistant Director for Administrative Management, Bureau of the Budget.