FOREIGN RELATIONS, 1950, VOLUME I


In the case of the first title of the;bill the Department of Defense and
ECA are both involved as "operating agencies". Furthermore, the
pattern of an appropriation.to the President with responsibility for
general direction and the allocation of funds by the Secretary of State
has already been established under ,the MDAP. In the case of the
underdeveloped areas programs funds would presumably be allocated
to the ECA, the IIAA, the United Nations (for technical assistance)
and possibly other agencies. Maximum flexibility is desirable. Al-
though it is not assumed that the State Department will act as an
operating agency in the conduct of these programs it is essential that
it maintain effective control over the amount to be allocated and the
general nature of the programs. These matters are a significant part
of our foreign policy. In the case of programs for underdeveloped
areas, as pointed out in the Gray Report technical assistance, public
loans and efforts to stimulate private investment as well as grants for
supplies must all be closely coordinated. No other agency is in a posi-
tion to exercise such coordination.
  lIt has been demonstrated that the 'State Department cannot fulfill
,these functions on -a purely liaison basis. It must have control over
the funds and approval of the specific programs to be undertaken. It
should, of course, exercise this responsibility in full consultation with
other interested agencies in the Government and it is assumed that
inter-departmental machinery for discussing major problems would
be established. The same type of relationships as have been proposed
for the Director of Security and Assistance in connection with the
Military 'Security Program 6 might be applied in the case of the
programs for underdeveloped areas.
  Even though the State Department does not itself "operate" the
  foreign assistance programs it seems essential that it take the lead in
organizing the presentation to Congress and justifying the programs.
The programs will be approved by Congress only if it is convinced
that they will help attain essential foreign policy objectives of this
country. The basic responsibility for justifying the existence of the
programs and their general character and scope must be carried by
the State Department since they must be related to our broad security
and political objectives. Furthermore no other single agency of the
Government is in a position to speak in connection with all aspects
of these programs. Although the full support and participation of
ECA, Defense and the other agencies should be sought, the principal
responsibility for organizing the presentation of the programs should
be assumed by the State Department.

   Regarding new interdepartmental organizational arrangements in the areas
of international security affairs and foreign assistance, see memorandum
of
understanding, December 19, p. 484.


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