Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

247. Letter From Secretary of Commerce Hodges to Secretary of State Rusk¹

Washington, August 21, 1964.

Dear Dean:

I had hoped that we would be able to continue our conversation on the State/Commerce agreement² at an early date, but unfortunately this seems not to have been possible for you. So that we can come to an early agreement on next steps. I think it best to set down the major problem areas, and I hope we can come to an early agreement.

1. I feel very strongly that we should establish a single economic/commercial career, such as we proposed in April.³

We have gone part of the way in achieving this through the method your people have proposed for handling promotions. I understand that four functional panels have been established, consisting of four members each, which will consider the promotion of both commercial and economic officers and that Commerce will have voting membership on these panels. The recommendations of these panels will be reviewed by the various Foreign Service Selection Boards consisting of seven members, and Commerce will have one voting member on each of these Boards.

But, this does not go far enough. We should make it clear that economic and commercial officers share the same career opportunities and are judged by similar precepts.

2. We propose that all officers be designated as “economic/commercial” both on their records in the Department and at their posts.

Despite the fact that the State/Commerce agreement of 1961 contemplated designations of Commercial Counselors and Commercial Ministers, only four Commercial Counselors have been designated; several embassies rejected suggestions that Counselors be named at their posts. In order to reflect the integration of these services and to raise career expectations to the appropriate levels, this single designation is necessary.

3. Commerce should participate fully in the assignment of all “economic/commercial” officers overseas, since their functions are so closely related and since we are deeply concerned over the priority assigned to our programs.

Currently, we are involved only in assignments of commercial officers. In instances where there is disagreement between our respective staffs, I think that senior officers of both Departments should review the proposed assignments so as to reach agreement. In cases of serious disagreement over senior assignments, we would expect a review at Secretarial levels.

We propose that the budget for the economic/commercial service be prepared jointly by State and Commerce, that it be presented to Congress within the State Department budget, and that supporting testimony be given by Commerce officials as appropriate.

4. The State/Commerce agreement we signed in 1961 contemplated the Department of Commerce undertaking responsibility for preparation of budget estimates and presentation to Congress. This was never put into practice; rather, various compromise and delayed techniques were employed, as you know, and without success. You and I took personal interest, but at a late stage.

5. The Foreign Service Inspection Corps should give special consideration to Commerce Department interests in their inspections. In addition, joint inspection of the economic/commercial service should be provided where desired by the Department of Commerce.

There are other details, on other matters, which our staff can work out and agree on, but the basic decision is to have you designate the economic and commercial as one service, and I hope you will agree to this request.

Frankly, Dean, I’m disturbed as a taxpayer and as a member of the President’s “team” with you that we are frustrated down the line so often on these matters. I feel this so strongly that I may recommend to the President that he instruct us to combine our economic staffs of State and Commerce here in Washington and make a substantial savings in money and cut out unnecessary duplication.⁴

Looking forward to hearing from you soon, I am,

Sincerely yours,

Luther H. Hodges ⁵

1. Source: Washington National Records Center, RG 40, Secretary of Commerce Files: FRC 69 A 6828, State Department Agreements—1964. No classification marking.
2. See footnote 2, Document 240.
3. Hodges presumably meant March, not April; see footnote 5, Document 240.
4. Indicative of Hodges’ frustration was his August 31 letter to Crockett, in which he wrote that he was “most disturbed” at the misimpression Crockett had received that his remarks before the Senate Appropriations Subcommittee “were critical of your handling of the State/Commerce relationship and were directed at you personally.” Hodges also noted that the House of Representatives had denied their joint appeal for additional funds for commercial attaches. (Washington National Records Center, RG 40, Secretary of Commerce Files:FRC 69 A 6828, State Department Agreements—1964)
5. Printed from a copy that bears this typed signature.