Secretary’s Memoranda, Lot 53 D 444

Position Paper 1

Arrangements within the executive branch for the conduct of our foreign economic aid programs must be designed to insure that such programs give maximum support to our foreign policy objectives. Financial and budgetary procedures are an important part of those arrangements, and should, accordingly, take the following form.

First, foreign assistance funds should be appropriated to the President as has been the practice in past years. Second, foreign assistance funds should be allocated to the operating agencies in a manner which will give the operating agencies maximum flexibility in carrying out their responsibilities. At the same time, arrangements should insure maximum coordination of programs at the departmental level, but, in the event any issues are not resolved at that level, they should be presented to the President through the Bureau of the Budget. The allocations should be made, therefore, by the Secretary of State under procedures approved by the Bureau of the Budget; should be for [Page 289]periods of not less than a quarter year; and should be based on regional or functional programs developed by the operating agencies. In making these allocations the Secretary of State should secure the advice of the Director of International Security Affairs who would develop his recommendations in consultation with the International Security Affairs Committee. Allocations to participating agencies for administrative expenses will be determined by the President. Foreign assistance budget estimates should be submitted by the operating agencies to the Secretary of State for coordination and review by the Director of International Security Affairs in consultation with the International Security Affairs Committee, and for submission by the Secretary of State to the Bureau of the Budget. The operating agencies would carry the major part of the burden in presenting budget estimates in budget hearings before the Bureau of the Budget and the Congress. The Bureau of the Budget should seek advice from the operating agencies as well as the Department of State in making apportionments.

  1. This paper was presumably the result of an interdepartmental effort coordinated by the Bureau of the Budget (see memorandum of Acheson–Lawton conversation, supra). A notation at the top of the source text by Special Assistant Battle indicates that this paper had been seen by the Secretary of State. A covering memorandum, also by Battle, states that the paper had been discussed by Secretary Acheson and Under Secretary Webb on the morning of April 3, and expressed the belief that the paper was that discussed by the Secretary and Mr. Lawton.