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

A/MS files, lot 54 D 291, “TCA/Pt. IV Reports, Briefing Statements”

Memorandum by the Deputy Under Secretary of State for Administration (Humelsine) to the Under Secretary of State (Bruce) ¹

[ Washington ,]June 9, 1952.

• Subject:
• The Point 4² Program and the Technical Cooperation Administration

There follows a brief summary of some of the current problems which affect the conduct of the Point 4 program.

1. Program Scope and Philosophy

One of the major unsolved problems of the Point 4 program is the need for a clear definition of its scope and philosophy in relation to other United States foreign assistance activities. TCA continues to favor relatively restricted programs centering around the supply of technical services, directly related supplies and materials, and the training of foreign nationals, with major emphasis in the fields of agriculture, health and education. TCA has also stressed the desirability of a gradual, long-range approach, although it is willing to undertake an accelerated program of this same general type in more critical areas such as the Near East and South Asia. Finally, TCA has laid great stress on the non-military, constructive and humanitarian nature of the Point 4 program as contrasted with defense related economic assistance.

This concept was publicized by Dr. Bennett³ with great success and its relatively low cost and “shirt sleeve” approach have undoubtedly contributed greatly to the substantial support manifested for Point 4 by Congressional and private groups which have been lukewarm or cool toward other elements of our national program for mutual security, particularly defense-supporting economic aid. One indication of Congressional feeling on this point was the recent action of the House in restricting the materials component of Point 4 programs to not more than three times the technical services component, and in cutting in half the non-defense supporting portion of the Administration’s economic aid recommendation for Southeast Asia. (The restriction was removed in conference, and the cut partially restored.)

In spite of its undoubted political and popular appeal, this definition of Point 4 raises several very serious problems. In the first place, the stress laid on the non-military nature of Point 4 makes it more difficult to achieve adequate coordination with other elements of our total security program such as the development of vital materials abroad, and the gradualist emphasis creates problems of timing in relation to more immediate defense and political goals involved in the short range timetable for strengthening the free world.

In the second place, some of the arguments and efforts used in support of this Point 4 concept have played into the hands of those who were unsympathetic to the Administration’s proposals for MSA–ECA economic assistance, so that the Executive Branch as a whole has been working to some extent at cross-purposes.

Thirdly, and perhaps most important, the present Point 4 concept, by definition, excludes relief activities, capital goods in any appreciable volume, and current supply and consumers’ goods in general. Therefore, it leaves unanswered the problem of what to do when any of these purposes are considered to be necessary in the United States interest to cope with particular problems in those areas of the world where conditions are critical but defense ties with the United States are not close enough to justify a defense-supporting economic aid program under MSA authority. This dilemma has been answered in the case of the Palestine refugees by using the United Nations as the vehicle, and in the case of Israel, by special legislative authorization for a United States aid program. TCA has attempted to explain the proposed programs for India, Pakistan and Iran as exceptions to the general philosophy, but this has only served to make them vulnerable, as evidenced by the House action mentioned above. This same problem lies at the root of the controversy with respect to Ambassador Locke’s⁴ functions and program in the Near East. The whole matter of program philosophy and scope in the Near East and South Asia is a major issue between TCA and NEA.

This situation forces the United States to fall back on one of three alternatives, none of which are really satisfactory from the standpoint of total national interest:

(a) to have only a technical assistance program, even though political realities indicate the need for something more;

(b) to have two programs under two different administrative agencies, leading to possible confusion and rivalry in the field and double sets of country relations; and

(c) to have two programs with different legislative authorizations but administered by the same agency, TCA, which would be understandably confusing to the local governments and leaves the larger scale program vulnerable to the sort of Congressional attack which has just taken place.

The fourth and most logical alternative is ruled out under the present Point 4 concept and philosophy. That would be to use the Act for International Development⁵ (with amendments if necessary) as the basic vehicle for United States aid programs in underdeveloped areas, with a scope broad enough to embrace whatever needs to be done in our interests in those areas, and with the content of each country program to be determined each year by Administrative and Congressional action on the basis of the actual needs and urgencies rather than by application of automatically limiting criteria.

Another aspect of this same general problem is the lack of emphasis in TCA on the investment and capital phases of economic development. While there is a Special Assistant to the TCA Administrator concerned with this problem, it has not been given adequate attention, nor is it much in evidence in country planning. A logical corollary of greater emphasis on the investment aspect of economic development would be closer ties between TCA and public lending sources such as the Export-Import Bank and the International Bank. This whole matter of the encouragement of developmental capital, particularly through private investment, is one in which the chairman of the International Development Advisory Board, Mr. Eric Johnston, is especially interested.

2. Program Execution

Another major problem which confronts TCA is the necessity for setting up the basic mechanics and processes to insure that after country programs have been approved, work actually gets underway and progresses as speedily as the urgency of the situation demands and local conditions will permit. This really boils down to four things: defining specific responsibilities for action here and in the field; devising and instituting the necessary processes for project authorization, issuance of funds, recruitment and assignment of technician personnel, procurement and shipment of supplies and selection of trainees; working out the precise form and nature of cooperative institutions or dealings with host governments; and securing timely information and checks on program progress through a program reporting system.

While a good deal has been achieved in the last few months along all these lines, it has been through a large number of spot decisions by individual program officials, and there has been a general lack of systematic procedures, uniformly understood and applied—a lack particularly felt in the field. This has been due primarily to the lack of any central impetus on these points, in the absence of an Administrator and without a clearly defined central responsibility for these matters under an Assistant Administrator for Management. Both these posts have now been filled and intensive work is progressing on all of these fronts, with priority emphasis on information and instructions needed by people in the field. Three members of the Management Staff are working full time with TCA on this project.

3. TCA Relationships Within State Department

Under the general plan of reorganization approved last Fall, it was intended that TCA should function within the State Department as a semi-autonomous, straight line entity with full responsibility for program operational matters, with specific ties to the regional bureaus and, as appropriate, to other Department units for policy guidance and program review, and drawing on the Department’s administrative facilities for administrative services to the extent that those facilities could effectively serve their program needs. The broad lines of this relationship are by now quite well understood in TCA and throughout the rest of the Department, but the specific application has occasioned considerable controversy and is not fully defined in all respects. The regional bureaus, particularly ARA, have tended to interest themselves and get into operational and administrative matters as well as their primary policy role. As mentioned above, TCA and NEA have had a major difference of opinion on policy itself in the Near East. TCA has sometimes leaned toward separatism to an unnecessary extent and has not always kept appropriate Department units informed of its actions and proposals. The administrative sections of the Department have been slow to grasp the extent to which the administrative needs and requirements for the Point 4 program on such matters as budget and accounting, personnel administration, and procurement, require different policies and methods than those appropriate for other Departmental activities. A succession of incumbents in the position of Special Assistant for Mutual Security Affairs has delayed the working out of a mutual understanding as to the Special Assistant’s responsibilities with respect to the Point 4 program.

With the exception of the TCA–NEA policy disagreement, most of these differences have been resolved or are nearing solution. There will, however, be a continuing necessity to restrain the TCA centrifugal tendency and the restrictionist tendencies in the rest of the Department. This is as much or more a matter of attitudes and mutual understanding than of specific directives or organizational arrangements. Mr. Andrews appears very cooperative and understanding on these as on most other relationship problems affecting TCA.

4. Field Relationships

There has been very considerable misunderstanding and confusion in the field as to the respective responsibilities and relationships of Point 4 Country Directors, Chiefs of Mission and other sections of the diplomatic mission. Essentially the problem has been to find workable middle ground between two extremes—one in which the Chief of Mission displayed relative indifference to the Point 4 program, did not give it active and vigorous support and treated the Country Director and Point 4 personnel as though their activities were remote from his responsibilities; and the other in which the Chief of Mission and other mission officials concerned themselves not only with major policy issues but extensively with operational and administrative details to an extent which seriously hampered the Country Director in executing his assigned functions.

To a large extent these difficulties seem to be traceable to misunderstanding stemming from lack of a clear Departmental directive specifying responsibilities and relationships desired. All concerned are in agreement that such a directive is badly needed; a draft instruction for this purpose has been drawn up in A/MS and is presently being cleared by the units concerned, principally TCA and the regional bureaus.

5. The Institute of Inter-American Affairs

The IIAA, a government corporation which has for ten years administered a program similar to Point 4 in Latin America, was brought into the Point 4 program by the Act for International Development and was intended under the reorganization of last Fall to become an integral part of TCA as its regional service for Latin America. Although the IIAA is housed in the TCA building and submits its programs to the TCA Administrator for approval, the degree of integration actually achieved thus far is not great. It retains its separate administrative services, different procedures and sets of field instructions, and its own communication series. It has, however, instituted Country Directors to provide field integration for the several functional field parties which formerly reported individually directly to Washington. It has also moved, at the Washington level, to set up a program office to provide a more integrated regional approach. Finally, some IIAA people have moved to equivalent positions in TCA, thus providing a personal linkage at those points.

There are two principal reasons why integration has not progressed further: First, the embryonic condition of the TCA organization and administrative structure and its much greater dependence on the central State Department administrative facilities, which caused the IIAA to feel that the efficiency of its operations would be lessened by an actual merger of functions; and Second, a deliberate desire on the part of the President and Vice President of the IIAA to keep the Institute’s operations self-contained and separate as far as possible as a matter of principle. At the same time, TCA, lacking a permanent head until recently, was unwilling to press the issue.

While a greater measure of integration is desirable and should be sought, the fact remains that the Point 4 program in Latin America is in being and moving along, whereas it is barely started in other areas. Therefore, it seems undesirable to waste much time and effort of key people on pressing for rapid and complete integration of IIAA into TCA with the possible risk of disrupting a going program, when the main and most critical job should require the pressing attention of TCA officials. There are certain specific points where IIAA practices and instructions need to be brought closer into line, such as communication practices and field relations of their Country Directors and field party chiefs to Chiefs of Mission. Mr. Andrews is aware of this problem, which is primarily an internal one for TCA, and he should prove capable of handling it.

6. Participating Government Agencies

Another Point 4 problem which has yet to be fully resolved is the appropriate role of the other government agencies participating in the program—Departments of Agriculture, Interior, Commerce, Federal Security Agency, etc. Under the original plan of administration, these agencies were actually delegated responsibilities for particular functional segments of the program—agriculture, health, education, etc. TCA allotted them funds and they then employed personnel, sent them out to the field, administered projects, received reports, etc. In practice this has not been satisfactory for two main reasons: First, because it resulted in a series of unrelated functional projects rather than a truly integrated country program; and Secondly, because the participating agencies insisted on performing the administrative support for these field projects in their Washington headquarters—handling of payroll, purchase requisitions, travel, etc. so that the technicians in the field lacked any definite knowledge as to, just what the program budget was, where it stood, and the status of their supply requisitions, personnel actions, etc.

Because of this, one of the aims of the reorganization last Fall was to centralize authority over all aspects of the program more fully in the TCA Administrator, with the participating agencies acting as TCA agents for specific matters such as the recruitment of technicians or the processing of foreign trainees. The negotiation of these changes presented tactical problems which Dr. Bennett wished to handle in his own way and on which he was making considerable headway at the time of his death. However, a marked change of attitudes then ensued in the participating agencies, and little further progress has been made in really achieving a significantly tighter central control at the Washington level. There has been a formal redefinition of agency responsibilities but it does not constitute a great change from the previous picture.

The real test of this matter, however, lies in the field; the creation of the post of Country Director cannot help but go a long way toward a unified program administration, provided the agencies do not try to keep their people out from under his control. The best real hope for progress along this line, therefore, lies at present in strengthening the hand of Country Directors in the field rather than attempting further reshuffling of responsibilities in Washington. This is especially true because the new Administrator, Mr. Andrews, having previously been active in the program as a representative of one participating agency, the Department of Agriculture, is naturally not wholly convinced of the need of any greater centralization at the Washington level.

Carlisle H. Humelsine

1. According to a handwritten notation on the source text, this memorandum, drafted by Carroll S. Hinman of the Management Staff, Bureau of Administration, was not signed but used as part of a briefing memorandum for the Under Secretary.
2. The term “point four” was derived from President Truman’s inaugural address on Jan. 20, 1949, in which he proposed, as the fourth point in his foreign policy program, that the United States extend the benefits of its technological and scientific advances to the underdeveloped world.
3. Henry G. Bennett became the first Administrator of the Technical Cooperation Administration on Dec. 1, 1950. For an expression of his views, see “The Engineer and Point Four,” Department of State Bulletin., July 16, 1951, pp. 107–111.
4. Edwin Allen Locke, Jr. was assigned to Beirut, Lebanon, on Nov. 15, 1951, as the Department’s special representative for coordinating economic and technical assistance in the Near East, with the personal rank of Ambassador.
5. Title IV of the Foreign Economic Assistance Act of 1950 (Public Law 535), enacted June 5, 1950; for text, see 64 Stat. 204.