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

700.5 MAP/4–1151

Memorandum by the Technical Cooperation Administrator (Bennett)² to the Under Secretary of State (Webb)

[Washington,] April 11, 1951.

Subject: Assignment of Responsibility Between State Department and ECA

I have just learned that the actual wording of the President’s letter of April 5, 1951,³ dealing with State–ECA relationships includes the following:

• “ECA should . . . administer Congressionally authorized economic assistance programs to countries in Southeast Asia and the Near East. In addition, ECA should be responsible for such special types of aid as . . . the food program for India. The ECA should provide economic staff work for the United States in connection with United Nations administered programs for . . . the Palestine Refugees. . . .”⁴

Tentatively, many officials in the Department of State appear to be interpreting this language to mean that the operation of the entire Point 4 program for Southeast Asia and for the Near East is transferred to the ECA.

Considerable doubt is raised also as to what happens to South Asia. Task Force II on Foreign Economic Assistance already has assigned to ECA the responsibility for preparing budget materials for Congress in support of economic aid to South Asia on the assumption that they would administer that program also, including Point 4 in India and Pakistan.⁵

I find it difficult to believe that the President meant to do by an indirect method something which he could have and indeed was urged to do by a direct method. Neither can I believe he intended to leave the TCA in the State Department but transfer most of its activities to ECA. It would be difficult to explain to the Congress a Point 4 Administration limited to (1) the independent countries of North Africa and (2) the Latin American program, most of which is administered through the IIAA.⁶

Following are some of the major steps that have been taken by TCA outside of Latin America since the appropriation for the Act for International Development became available last September:

1. An extensive program of rural development has been planned and is starting in Iran. Additional projects are getting underway in research and in road construction. Within only a week’s time, we have made all necessary arrangements to aid Iran in an emergency program for combatting a locust plague.

2. Good publicity has been obtained on the Horace Holmes agricultural program in India, and recruitment is underway to extend this work. There are other individuals on the job in India in different phases of agriculture, minerals and water investigations, social welfare, and statistics. Agriculture in Ceylon and Pakistan and minerals surveys in Nepal and Afghanistan are other significant activities in South Asia. While there have been delays in getting technicians on the job we will soon have quite substantial agricultural programs underway particularly in India and Pakistan. Arrangements have been made to bring about 50 Indians and nearly 100 Pakistanis to this country for training.

3. Extensive arrangements have been made for a cooperative program with the American University at Beirut for the benefit of the Arab States, and with the Near East Foundation for substantial work in a number of these States. Extensive water and agriculture-potential surveys are underway in Saudi Arabia and a nine member party is getting started this week on a survey to determine the development possibilities of the Litani River basin in Lebanon. Projects in agriculture, health, education, vocational training, rural improvement, and water supply are either underway or about to be activated in most of the States from Egypt through Iran.

4. Joint planning has been undertaken in Ethiopia, Libya and Eritrea and we will have substantial projects underway shortly in each of these areas, again primarily in the field of agriculture.

5. The existing economic and health missions to Liberia have been expanded.

6. Joint Commissions have been established in Iran and Iraq.

7. General country agreements in accordance with the Act for International Development have been signed with Israel, Jordan, Saudi Arabia, Afghanistan, Ceylon, India, Pakistan, Nepal, Iraq, and Liberia providing for long-range cooperation in economic development.

8. Numerous additional project requests have been received and approved and the recruitment and clearance of specialists is in process.

Initiation of these programs was preceded by long planning and negotiation within the countries of that area based upon the original Point 4 concept set forth in P.L. 535. The programs are being carried out through Stanley Andrews’ organization in the Department of Agriculture, the Federal Security Agency and other agencies as well as by this Department directly. To my knowledge there has been no discussion with the other agencies of a possible transfer of these activities and personnel to ECA. Such a transfer and the reorientation of programs that would follow could not but affect seriously the cooperative relations established both here and in the host countries.

Paragraph 9 on page 3 of the President’s letter provides that “wherever there is an ECA Mission in a country concerned with the general economic development of that country, our objective should be an integrated U.S. economic staff in the country serving all U.S. needs.” I had hoped that responsibility for general economic development of underdeveloped countries would remain with the State Department and that ECA would be used by us as an action agency where that appeared to be the most logical procedure.

In view of the uncertainty concerning the intent of the President’s letter, it seems to me that an effort should be made immediately to obtain a clarification.

2. Dr. Henry G. Bennett had assumed direction of the Technical Cooperation Administration (TCA) on December 7, 1950. The TCA was established in the Department of State on October 27, 1950, by Departmental Announcement 212 (for text, see Department of State Bulletin, November 13, 1950, pp. 793–795). The enabling instruments were the Act for International Development, June 5, 1950 (Title IV of P.L. 535) (64 Stat. 204) and Executive Order 10159, September 8, 1950 (15 Federal Register 6103).
3. For President Truman’s letter of April 5, to the Secretary of State and the Administrator for Economic Cooperation Administration (Foster), see the circular airgram of April 12, 1951, p. 290. The letter described the main outlines of a foreign aid program that reflected a marked shift in emphasis from the general economic aims (economic reconstruction and recovery) of earlier economic aid programs to economic aid in support of “military build up”. The letter necessarily dealt with the issue of the organization of the Executive Branch to carry out such a program.

4. The paragraph reads in full:

   • “2. ECA should be made responsible for economic and technical assistance, as authorized by the Congress, to Western European countries and their dependent overseas territories in completing the European Recovery Program and in support of military programs under the North Atlantic Treaty. It should also administer Congressionally authorized economic assistance programs to countries in Southeast Asia and the Near East. In addition, ECA should be responsible for such special types of aid as economic assistance to Yugoslavia, and the food program for India. The ECA should provide economic staff work for the United States in connection with United Nations administered programs for Korea, the Palestine Refugees, and the International Children’s Emergency Fund. The ECA would consult, advise and assist the State Department in the exercise of the latter’s responsibilities as the primary channel of U.S. representation to the United Nations and its affiliated organizations with respect to those programs.”

   In an effort to clarify and implement the provisions of this paragraph, the Management Staff, a staff arm of the Deputy Under Secretary of State for Administration (Humelsine), on April 10, circularized a memorandum to the regional bureaus of the Department of State on the following questions:

   • “1. Should we take the position that TCA will operate economic aid and technical assistance exclusively in Latin America, Africa (outside DOT areas), and South Asia?
   • 2. Should we assume that TCA will not carry on any such activities in the areas mentioned in the letter where ECA is to operate the foreign assistance programs?
   • 3. How can we justify to Congress separate administration of similar programs of economic aid and technical assistance in different areas of the world?” (Memorandum by the Director, Management Staff (Heneman), to the Department offices concerned, April 10, A/MS Files, Lot 54 D 291, Drawer 48, “Pt. IV/TCA Organization: Intra/Inter Departmental Organizational Relationships”)

   The replies from the regional bureaus, the Bureau of United Nations Affairs, the Director of International Security Affairs (S/ISA), and TCA itself are not printed, as their points of view are fully reflected in this and other documentation that follows. (The unprinted documentation is found in the A/MS Files as cited above.)

5. The Executive Branch was absorbed at this time in the preparation of an Administration position on the mutual security program that was to be presented to the Congress for FY 1952. For documentation on the overall foreign assistance program, with specific emphasis on military aid and economic aid in support of military programs, see pp. 266 ff.

   The specific thrust of this section was in the direction of the Department of State’s efforts at this time to separate Point Four-type aid—economic aid to underdeveloped countries in the form of technical assistance—from economic aid of the military support type; and the Department’s efforts to establish a form of organization that would reflect this separateness.

6. The Institute of Inter-American Affairs (IIAA) was a U.S. Government agency that administered a well-established technical assistance-type economic aid program in Latin America prior to the genesis of the Point Four program in 1949. The most recent enabling legislation was incorporated in the act of August 5, 1947 (61 Stat. 780). For information regarding the IIAA and its program, see Department of State Bulletin, June 19, 1949, p. 795.