A/MS Files, Lot 54 D 2911

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

Subject: Organization and Administration of the Point IV Program Within the Department of State.

We studied Dr. Bennett’s reorganization plan contained in his memoranda to you of May 18, 1951,2 and feel that the proposed changes are generally sound. We think it would be advisable, however, not to proceed with the necessary action to give effect to these changes until there is a firm decision on the agency responsibility for the operation of the Point IV Program. We understand that the President plans to refer the issue to NSC for decision and it may even turn out that the final decision will come only through congressional action.

Regarding Dr. Bennett’s plan of reorganization, we would like to make the following comments:

Program and Policy Formulation—We agree with Dr. Bennett that there is a need for clarification as to who has the responsibility for developing programs and carrying them out within the Department. At present the responsibility for developing country programs rests primarily in the regional bureaus with the primary responsibility for carrying them out in TCA. These responsibilities should be centralized in TCA in order to permit a more effective operation of the program. The role of the regional bureaus should be limited to the review of the proposed programs developed by TCA for their effect upon U.S. foreign policies and objectives in the country or region involved. The regional bureaus should, of course, offer suggestions and give policy guidance with respect to the Point IV Program development in their areas. This is a fundamental change in the plan of reorganization and is a sound proposal in our opinion.

Institute of Inter-American Affairs—The plan proposes to integrate more closely the IIAA with TCA by reconstituting the membership of the board of directors and assigning the chairmanship to the administrator of TCA. We think that this is generally a good idea, but the Assistant Secretaries of Inter-American Affairs and Economic Affairs should remain on the board. The separate identity of IIAA should not be destroyed because of the good will it has created in Latin America.

Parallel regional institutes would appear to be desirable for operations in the eastern hemisphere. Under the present division of countries between TCA and ECA, however, there would not seem to be [Page 1651] much point in considering the establishment of such an institute for South Asia and the Far East.

Point IV Missions—We agree that Point IV staffs in our missions ought to be established. However, the Point IV Mission Chief should be subordinate to the Ambassador and his communications with TCA should pass through regular State Department channels. In addition, the Ambassador should be charged with responsibility for the country program so as to achieve closer integration of the Point IV mission with the embassy. The necessary freedom of action by TCA can be secured through redefining responsibilities within the Department. This freedom of action combined with an adequate staff under the direction of the Ambassador should produce effective action in the field without the disadvantage of removing the program from the control of the Ambassador.
Relationship with other U.S. Agencies—We agree that some modifications will be necessary in the present management plan so as to provide TCA with greater control over the activities of other government agencies in the Point IV Program. As Dr. Bennett points out, however, it would seem more appropriate to undertake this problem after the position of TCA within the Department is redefined.

In addition, there are a number of small points that would have to be considered such as the necessity for assignment of positions by TCA to the regional bureaus to support the additional work load created by the program, post audit of program operations by regional bureaus, and others.

It is recommended that you give general approval to the proposed plan of reorganization, but suggest to Dr. Bennett that action to effect the proposed changes be deferred pending ultimate decision on the agency responsibility for the operation of the Point IV Program.

  1. Drawer 48, Folder “Point IV Organization: Reorganization of the Point 4 Program.”
  2. Covering memorandum printed, supra; accompanying attachment not printed.