800.00 FA/4–1251: Circular airgram

The Secretary of State to Certain Diplomatic and ECA Missions 1

This is a Joint State–ECA Message.

Quoted below for your information is a letter dated April 5, 1951 from the President to the Secretary of State and the ECA Administrator setting forth certain guidances on the administration of foreign aid programs. State and ECA recognize the need for further interpretation and will keep missions informed from time to time.

“The executive branch will shortly submit to the Congress proposals for foreign assistance programs for the fiscal year 1952. These proposals will reflect the changing circumstances in the international situation and will require adjustments in the arrangements which have been made for the administration of our foreign aid programs. This letter is concerned with certain adjustments in the roles of, and relationship between, the Department of State and the Economic Cooperation Administration in the administration of foreign economic and technical assistance programs.

“It is essential that all our overseas programs be fully coordinated with each other in support of our primary foreign policy objective, namely, the preservation and strengthening of the free nations of the world. To achieve this objective in the administration of foreign economic and technical assistance programs, the following policies shall guide the Department of State and the Economic Cooperation Administration.

“1. The scope and complexity of foreign economic and technical assistance programs and the need for maximum continuity and dispatch in their performance warrant the continuation of ECA as a separate agency to carry on such programs. The Congress should be requested to repeal the present date for termination of the ECA.

[Page 291]

“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.

“3. The Secretary of State, under my direction, is the Cabinet officer responsible for the formulation of foreign policy and the conduct of foreign relations, and will provide leadership and coordination among the executive agencies in carrying out foreign policies and programs. The ECA, like other agencies engaged in administering specific overseas programs, will need to advise and consult with the Secretary of State and his staff to facilitate this responsibility for over-all foreign policy and program coordination. In the event that there is disagreement between the Secretary of State and the ECA Administrator regarding proposed ECA policy or program actions, no action should be taken until a joint statement has been submitted and the issues have been resolved by the President.

“4. Financial and budgetary procedures are an important part of the arrangements to insure that foreign economic aid programs give maximum support to our foreign policy objectives 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. Accordingly, the Secretary of State, after recommendation from the International Security Affairs Committee where appropriate, should make [Page 292] the broad decisions concerning the use of funds as between (a) military end-item assistance and economic support and (b) major political areas. The Secretary of State should make allocations of funds to the operating agencies under procedures to be approved by the Bureau of the Budget. There should be an initial allocation early in each fiscal year of the bulk of the available funds, a moderate balance being reserved for adjustments later in the year to preserve flexibility. 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 International Security Affairs Committee and there-after submitted by the operating agencies 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 in the Congress. The Bureau of the Budget should seek advice from the operating agencies as well as the Department of State in making apportionments.

“5. Existing arrangements for policy and program coordination (including the International Security Affairs Committee) as provided in the interagency memorandum of understanding approved by me on December 19, 1950, shall be effectively maintained.

“6. The ECA Office of Special Representative in Europe should provide the economic staff work required by the U.S. Deputy in the North Atlantic Treaty organization. As previously determined, the U.S. Deputy shall provide leadership among U.S. regional representatives in Europe to achieve a coordinated political-military-economic effort among our overseas representatives in the North Atlantic Treaty organization. In the event that differences occur between the U.S. Deputy and the ECA Special Representative in Europe which cannot be resolved by them, no action should be taken until the issue is jointly submitted to and resolved in Washington by the two agencies concerned.

“7. To obtain maximum efficiency and economy, to avoid duplication or uncoordinated effort, and to preserve the long-range economic objectives of the Organization for European Economic Cooperation, we should promote integration of the economic work of the North Atlantic Treaty organization and the Organization for European Economic Cooperation.

“8. At the country level all U.S. representatives to that country must speak and act in a consistent manner. The U.S. Ambassador is the representative of the President of the United States to the country and is [Page 293] responsible for assuring a coordinated U.S. position. He should be fully supported in the exercise of this responsibility by all U.S. representatives to the country.

“9. To prevent duplication and to assure maximum efficiency and coordination, 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. While the specific organizational arrangements may vary from country to country, this objective can best be met by having the officer in charge of such an integrated staff serve as both ECA Mission Chief and as principal economic officer in the Embassy. The State Department and the ECA, with the guidance of the Bureau of the Budget, should work out measures to accomplish the objective.

“10. General policy and program directives from ECA to its missions overseas should be substantively coordinated with the State Department and identified as coordinated instructions.

“11. The changing nature of our international programs makes effective arrangements for coordination at the country level increasingly important. The Ambassador should see to it that the ECA Mission Chief is fully and currently informed on matters which affect the ECA program. The ECA Mission Chief in a country should keep the Ambassador fully and currently informed of ECA activities. He should consult with the Ambassador on matters involving U.S. policy or program determinations affecting the country. This does not mean supervision by the Ambassador of day-to-day ECA operations; such supervision is the responsibility of the ECA Mission Chief. Where the Ambassador objects to a proposed action by the ECA Mission Chief or his staff and the issue is not resolved at the country level, the question shall be referred to higher administrative levels by a joint written submittal, and the Ambassador may, if he so desires, suspend the action until the question is resolved.

“The foregoing establishes the major framework within which the Department of State and the Economic Cooperation Administration can work for the sound organization and administration of our foreign assistance programs. I shall expect the two agencies, with the Bureau of the Budget providing general leadership on my behalf, to develop specific arrangements in accordance with this general guidance.

“I am sending an identical letter to the Economic Cooperation Administrator.”

  1. Sent to diplomatic and Economic Cooperation Administration missions in Bangkok, Djakarta, Manila, Rangoon, Saigon, Seoul, Taipei, Tokyo, Bern, Brussels, Copenhagen, Dublin, Lisbon, London, Oslo, Paris, Reykjavik, Rome, Stockholm, The Hague, and Vienna. Copies were also sent to Ankara and Athens on April 13.