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

A/MS Files, Lot 54 D 291, TCA Program

The Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee) to the Under Secretary of State (Webb)

confidential

[Washington,] April 25, 1951.

Subject: Organization of Aid Programs

The following line of reasoning substantiates the position which I took at the meeting on April 23rd in favor of the transfer of Point Four functions to ECA.¹

1. Where substantive funds are available, technical assistance becomes part of a total assistance effort.

2. This total effort manifestly requires unified field direction. If not, there would be two competing agencies doing the same thing: promoting economic development. This will lead to confusion in the mind of the foreigner, if not to confusion in our own ranks. I understand this position has been taken by the Bureau of the Budget and is acceptable in several quarters of the Department.

3. If technical assistance alone, without substantive funds, is all that is available for certain countries, the case against separating its administration from the administrative agency handling programs involving substantive funds as well as technical assistance lies on three counts:

(a) It will result in competition in the domestic employment market, and confuse our own public through different standards and criteria for employment;

(b) It definitely relegates certain countries to less preferred treatment;

(c) It creates difficulties in emergencies where it might otherwise be possible to draw on funds included in other countries’ programs.

4. The case for using another agency, not the Department, to operate foreign aid programs may be stated as follows:

(a) It is not considered a proper function of the Department to carry on such operations as buying, selling, establishing back credits, etc., all of which are essential to effective assistance programs;

(b) The Department accrues to itself all the blame that will arise from the opposition if the program is not successful in every detail;

(c) The Department is exposed to reactions from Congress and others if it does not hire people whom they want it to hire;

(d) It puts on the Department the entire onus of asking for money from Congress. This always incurs an unfavorable reaction, which tends to influence Congress in its attitude toward the Department.

(e) ECA has a good record for getting appropriations and arranging for better conditions of employment—i.e., higher salaries and easier security restrictions;

(f) Use of ECA as a successor will draw away from the Department criticism that otherwise would be entirely directed at the Department;

(g) Use of a Departmental Bureau, i.e., TCA, to conduct part of the economic development program would confuse the responsibility of the ISA and E bureaus with respect to Departmental coordination of the direct ties which the regional bureaus should have with other agencies;

(h) Removal of Point Four to ECA would at once settle the relationships between Point Four and the technical agencies of government. It is generally admitted that this program has been too much decentralized with consequent loss of initiative and effective action.

5. It is believed that the Institute of Inter-American Affairs should serve as a model for an Institute of Near Eastern and African Affairs, and that both organizations should be developed under ECA with provision for State Department representation on Boards of such institutions, to formalize liaison responsibilities.

These institutions would then be able to avail of ECA resources for obtaining personnel and supplies, etc., as well as the resources of the Department and of other agencies.

1. The minutes of this meeting are not printed. Minutes of the Under Secretary of State’s regular staff meetings with the policy level officers of the Department are found in Lot 53 D 250, Boxes 1644–1646.