Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 1

103 FOA/11–1253

The Secretary of State to the Director of Foreign Operations (Stassen)¹

confidential

[Washington,] November 12, 1953.

Dear Harold: I have recently taken the opportunity to review with some of my colleagues the subjects covered in our exchange of letters with respect to your reorganization plans for the Foreign Operations Administration.² Although I know that you and I understand and agree on the basic relationships between FOA and the State Department, I believe that the fullest possible clarification of our respective responsibilities is needed to enable our staffs to carry out their assignments effectively and with good teamwork.

I am concerned by the many communications from the field which have been received in reply to your circular telegram of August 31 (Musto 15, Tecto 41).³ Such replies have come not only from U.S. chiefs of diplomatic missions but in a number of instances from your own chief representatives abroad, either requesting clarification of the role proposed for FOA staffs overseas or questioning the wisdom of applying your instructions to FOA staffs as they have interpreted those instructions. I have in mind Ambassador Kemper’s letter to you in which he states that in undertaking activities in the fields of investment and trade development, your agency will be engaging in exactly the same activities to which the Embassy gives a very large part of its time and effort. This concern is supported by a communication from your country director at Rio de Janeiro, Mr. Robert G. Groves. He fears that duplication of investment and trade activities by the Embassy and FOA mission might detract from good will toward the technical assistance program and lessen chances of achieving U.S. policy objectives. I have also in mind a series of messages from Karachi which includes messages from the Ambassador and from your Mission Director, as well as a joint message. All of those urged that the present organization be maintained.

In other instances, while I have not seen any messages from your mission directors for the same countries, the ambassadors have strongly urged clarification of our intent. For example, Ambassador Donovan at Bangkok has expressed grave concern over the statement contained in your message that trade and investment and economic analysis functions should be performed by the FOA mission, since these are Embassy responsibilities and “ridiculous duplication” would result from their performance by the FOA staff. Ambassador Spruance at Manila has also requested instructions as to how the economic functions of the Foreign Service are affected by your circular instruction. He states the functions you have outlined for the FOA mission “could result in wide duplication of the type which Reorganization Plan 7⁴ seeks to reduce or eliminate.” Ambassador Pheiffer, Dominican Republic, has sent me a copy of a memorandum which he prepared at the request of Congressman Donald Jackson. In this memorandum also, Ambassador Pheiffer envisages direct duplication between the economic sections of the diplomatic missions and of the consular offices on the one hand and your mission on the other, if all the activities outlined in your circular instruction are assigned to the FOA staff.

I believe you will agree that those reports demonstrate an undesirable lack of clarity in the understanding of their respective responsibilities by our overseas staffs.

You will recall that in my letter of September 28 I proposed that, in the interests of greatest economy and efficiency, the FOA overseas staffs should not undertake activities which the Embassy economic staff is equipped to perform. In all diplomatic missions the economic section is primarily organized to work on economic analysis and reporting, trade and investment opportunities, and related economic matters, and is charged with performing such functions for the government as a whole. I fully appreciate your interest in such matters and their close relationship to the activities which you are charged with administering under Reorganization Plan 7. However, I do feel that the work of the economic sections of the Embassies can be fully related to the efforts of your field staffs if we forcefully pursue a policy of integrating our staffs on economic matters under the common leadership of a single individual who will serve both the Department of State and FOA. This arrangement would maintain the traditional and unavoidable responsibilities of the Embassy in the field of foreign economic affairs and would provide you with those activities and services which are essential to the successful operation of the aid programs. It will also serve to clarify the confusion that has arisen in the field on the respective responsibilities of the Embassy and FOA field staffs on economic matters.

I am pleased to note that you agree that we should move in the direction of eliminating FOA field staffs in countries where aid is no longer furnished. We should keep all such cases under continuous review to assure that the most efficient, economical and effective arrangements are in existence.

Another factor which has increased my concern about the foregoing matters is the Budget Bureau’s indication that it feels that there are possible duplications between the work of the Department of State and FOA overseas. I feel that we must take positive steps to correct this impression before the Fiscal Year 1955 Mutual Security Program is presented to the Bureau. As a means of doing so, I suggest that circular telegrams to appropriate areas be prepared jointly by your representatives and mine, the purpose of which would be to clarify the operating relationships in the field between members of our respective organizations. It is my present thought that such telegrams would prescribe somewhat different patterns of cooperation, depending upon the missions to which they are addressed. I have asked Mr. Nolting to be available to work with whomever you may designate on this task.

In view of Mr. Dodge’s interest in those matters, I am sending him a copy of this letter.⁵

Sincerely yours,

John Foster Dulles

1. Drafted by Orwick on Nov. 11, with the assistance of Nolting. Cleared by Sargeant, Waugh, Lourie, and Walter B. Smith.
2. Reference is to the letters from Stassen to Secretary Dulles of Aug. 25 and Sept. 30, 1953, p. 642 and supra, respectively, and to Secretary Dulles’ letter to Stassen of Sept. 28, p. 653.
3. The telegrams, messages, letters, and other communications referred to in this and succeeding paragraphs are not printed.
4. See the editorial note, p. 628.
5. Secretary Dulles met with Stassen on Dec. 2 to discuss a number of matters. The memorandum of their conversation, drafted by the Secretary on the same day, reads in part as follows: “Mr. Stassen spoke of the possibility that Congress might want to send FOA back to State. I said I was reluctant to see us take on these economic responsibilities, that I thought things were working pretty well at present except that his people in the field seem to create some jealousies vis-à-vis the regular Foreign Service people. Stassen said he thought that if FOA should continue as a semi-permanent agency they should develop some kind of economic Foreign Service which would keep their people into alignment with ours so far as salary perquisites, etc., were concerned.” (U/MSA files, lot 56 D 551, “Secty Memos of Conv.”)