COMMITTEE FRINT

ADTh1:INISTRATION OF UNITED STA.TES AIDFOR A .EUROPEAN RECQVERY PROGRA11

REPORT

COI\'lMITTEE ON FOREIGN RELATIONSUNrrED STA'fES SENATE

ON

",tlJ)MUUSTRATION OF UNITED STATES .AID FOR

A EUROPEAN RECOVERY PROGRAM

8ulnriltted at the I;equest oX the Chairman of the~Committeeby

THE BROOKINGS INSTITUTIONJanuarJr 23, 19M!

Printed far the 'use of tbe Committee on FOl'eig"n Relations

UNI'1'ElD STATES

(iOY.ERNMEN'l' PRINTING OFFICE

WASRrnG'.rON : 19~6

C01:f11lIT~I'mE ON FOREIGN UELA'J.ilONS

.ARl'IiU& II. YANDEJ:>'13I;Jf{O, ~.I1ebl~!lI.l, (JhairtM,J

Alt'IRUR CAPI'~J{, l\J!ini:@j. TOn CONNM,:rs, T~Y[l9

'\\'ALLACE II, 'iVI:UTE•.In., )dIiIne, WlLL'IER b'. mWR(t.El. Georglll,ALEXA:~mEi{ WII,Ex, Wllw)D/,fbi lWBEllVr 1'. 'VAQXJ!i1i:, New rlltkn, A,LEl1iANPfiR SMITH, N',,-w Jet:'''F ;ELBERT D, TIIO~Uf:l. Ut(l.ll;BQ1;JIUCEJ XL lIICr\:EN1.00P:EJ'{, Ie.wlt ALBInI W. IM.HKLEY. It~ttLl1clryI1J!lNR~ CABOI' :r~ODGD, Jlt., .J:rI'lB8ad")fjett.~CARl.. A. UNreEl, NIjW :,\!cxi{i)

!"UANcm O. Wir.G(l~ Ohic! of S~(tjJ

c. C. O'DAY, mer7>-

n

IN'fRODUCTORY NOTE

Even before, tbe COl1:li'llittee, 011 Forei,gr1 Relations began its 8t~cly

of, t,he EUFoIJean r~c,',;o\r,ery l?n?~',am," ~t was O1ppar{jl'lt' tl1iit,t,he rna,J,' (}1'prQbleJ1l8 lllyolved lii tim adll1JnlstmtlOll of such a program deservedvery careful consideJ;l:ttiol1. AccQrdingly, au Decemb~,r 30, 1947, thechairman of the committee request~d the Bl'QokJngs Institution toprep~l;~ a brio! analysis of ,the !!Htin n.dmiuistratiye PI;oposals thatflu ve been put fot'watd~ talnng mto llccount the experR~nce of ourGov~tmnent with resIJec:t to sinli1tll' progrltms duJ.'ing recent years.It W:lS believed that os a result of :t:.t1ch a. studv cedain basic pl'inc.iplE'"smight €mer~~ Wllkh would be o~ ~1.'3sisb.mc~t to tl-~e c,:l11unittee in it.;atten~pt to hncl the, type of admmlstrntlve ol'ga'IllZ11t1on that wouldhelp Insure ~tn effectlve E:RP. '.

The l-e})Ort of the Brookirtml Institution is printed Ilerewith :forthe lISe. of the Senate and the Committee OIl FOl'eign Relations. TlweonelusiQns of the Brookings Institution wHI he :loumI on pages 15to 20" -

m

OONTENTS·

Introdllct,ioll ~_ W~~~~~ ~~~~~ .,_~~..

Part 1. The natnfl} of th£;l probIQm~_~~ ~~ ••••Part 2. Outs,tMClrng iSSU88_~ ~~ = •••••~~~ _

!. Status andform of the D,GW ugeJlcy =_ •••~••••~ ~__L Stat,us of the new agejjcy.:'_=~__~=== ~ =2. Orgalliz!I.,tionp,! form ami $tt1tcturEl~ = ~ _

II. RBSponsibWty for the ¢:x:~!;ution of the prograffi =__

1. BrQad programs find gCll€flll poltck,s. =_ •••• ~.~2, Negotiation ¢f agreements with foreigIL couniri~_ =•• _••3. Control of tile fundg~__ ~ -=~~._A •• ~ _4, Determination of methods Of fu1rllH;:ingA_~ _5. ntiJizaHon of B:iisting l!'edeml agenci~~~A_~_~ _e, .'\dministratiQJ:l of exp(,)r~. t(l!d;rors ~ _7. Admmist;ratlon of' (lth01' a1d ptogramfL - _

HI-Farm ulld responsibilities {~f lil'H'; overseas orgtmiz;l1tion _1. Form (Jf t·hi;; ¢rgtiuizatiQll in individual cl')lmtri€9 ~- •• -2, Smtu!3 and reiSPonsibilit.ies of tho chief represent.ative in

Europe•••• = ~. _._.~_~

Pm 3. COYiclll,~iOtl,9. .:. = ._. _ ~ _~ .'__

L Creat.ion and statua of.!l, n(lwagefi(jv=_._. ~ ~ _Z, ,A s~ng]B .idniinistl'fLto:t' of Cl1,binet 6ia.tl~$ __ ._ •• . _3. Fo:tlnof the ag"'n(ly ----==-•••••-.----------------------~.1. Advisory bodle$ and p\lblicit.y~ ~_e__~__. ~_._

o. lle-lation~ "\vltbQthellage1J(!ics===~ '';' ~""" =""''''== ~ ~~.".""

e. The position of too Depal'Lment of State_~ ~ =~_._=~~~~

7~ Overse!l$ Qr-~anizfttion in indhddufll cdunt.rl~=.,.,." ... •__ ~_,-"~"'''' __ .... _8, Repro.-selltaUQll in orgrmi.zationB of pfi.rticip.atLog ~oQntrie9 ~ •

v

ItOl!;ll'

1:2-15·5688

'910101111121313

14151516.161'(17181920

R:EflOR'r ON ~~D!\HNIS'1'RATI0NOF UNITED STATES AIDFOR A EUnOPEAN RECOVERY P.ROGRAM

I}i'IB,OPUOTIQN

This report (In Ute: admlllislrlLtioI\ of United. Stfl.t~s aid for n. Eur{1~pev..n l'~c6vel'Y pi'ogdtIillulS l)~en p~'epal'ed~l,:t th.~ iequest of thQ chair­man of thoCoIl'lliLitt(l6 011 J1ore}g,'1l UelatiOflf;l,of tJle lInit.ed Stati.1SSenRw. In his reqli~.st'j the Cl111.1l'tlltln !l5ked tlU'1 Brookings lristitu=Han to tmdcrt[lJl:a n ri~pid l'e\~ww l1uc1 .. al1pl~·si5 (J,t theJJri,ll.e.ipa! pro=pm:.~ls ~bat h(l,ve been fJ1ade ~ol" ~he ,~dm,inlstravqn ?f.the.prqgL'pil1,talnng mto account the experrencew1.th.:tJ:te nc'tn}mlStrabon (,ff· slOl1Ia.r1'>ro~l~:ams 41,\,dng the B[\st X{lW Xe?-J:'$; _ 'PpCW tb~ J?~S~S of this ;3t:u.d;r.~aIL Al!.ctependent a.pptnmal was ,t"Cqll~t~g ()£ the reqmrfHuents f9~ allu~lmh1-istl'aUv'e orgllili~rt.tio?- tha!, would 'U1stu'(} jnuxtmfu:n bu~i11es~, etli~cumcy in pl'ope.r c90r\ltqfitl()~ Wlp:lother aspects OT our I0reign l)(llkyand th l1 co:ndm:t o£ £ore,Ig;ll re1attons. . _. Iu thiS l.lnclerti}kin$'; El. r~~e'1f has hem'}, rq~c~e of the t.h~e majorproposals mna;n.a-tlPll' ir9J.J} WJthini:!16 gQ.verx:-menf;~ J.lame.ly the· reportbyt1;l.e PJ:~sident;$ emilTIllttoo Ol1FQ~~lgn. AId (lmo\vn lJ.~U'le Ha.l~ri~nUlll cominittee) ~ th~ 'reports of the HQti:~IJ.SelectCommittee: on For­ei~tI:lAid (knowi{~s the.Bert~~e(,mmittep,) and the Nll, R. R~ 4~79(J]'lG }{¢rter bill), that ~inbodHls.tIle re<:.Qmrae;ndntions ~f thE;\ com­nuttee; and the specia~ m~sage f~'()m. th~ Pre~a4ent to the. Oo~.greseon Decembtl:r l.9, 1947, toget11er WIth the: ,draft Ifill (~'llbseqm111.tly in~ttoch~ced as· H'r :R. 4840) .amI tlle s.uPPQl"tJn~ r~.pqrt. submitt:ecl by th~Dcpi\.l'tm~l1,t of St~t~e, . Exte:pS1v~ cCJ.t:tsultat':IOlls wete 11el(1'1Vi~h manypersons. who .P~ticl]?,a,tad.111. t~e l?rep~nt;JJ.tnof the £oF~goln.!5 p:to~posals and l;:01l51clerntlon Wgl9 gl'V~.g to tIll;3 bases. upon wInch thelr'con-cl't,l.si6ns were drown, . " .

~I\.ccouut haSB.Iso b.emi t.nken of the :Ri'oposa}$ ,£01' adnl'ihistration oft,h.e. prog\~pm tha.t ha,ye been FlIt forws,!'d: py phtate orgal1iz~tiQlis.. suchas the Ch;:rnibel'():[ COjIlil1erC~, of ~)1G, lJrutl9d. Shd::cs~ the.NQ.tio:ti~tl :~sso~c!a_t.ifil~ of }'1:~'l;).llia~~ltrel'S,.th~ N~ti~nd F6teig.p';trade Ootlt1.cllj . the{JQngl"eSB of Indust.I~lRlOrgamzations,and tbe~utlQllalPlanJ;lll1g A.s­soc.iatiOti~-tQ name Quly 0. fBw---unc1 of pr.Qp~(lsll~Mdsugge,%ions 0.£ u.mQr~ illfQrro.al nature li1ade ?YPI;lv·at~. inc1ividu~ls both i~ide andoUb51de. t.he Govel'lUnent, Fmn.lly, re~~nt Am;er1can. programs foroversel:1-$ ;relief, eG(1).onllc. deYelopment., _il~d mel 'YerG :r~vi~'iYec1 bymembsrs of oUt' stair who have had exteIi.Slve experIence m this gen­eral field•• Th,e'results o'fthis st.udy fin~ thecot1chI$i0!ls rea~ed arepl'ese.ntoo1p; th~ t~lre~ pa~~3 of this repo~t, :par~ :t0Ut11ill':JS hnefly the nAtUrE! ofthe ftdmllllstranv~problems mvolvecl mUle proposed European re~

1

2 mUROPEAN RECOVlliRY PROGRA~r

C(i'verj~ p:cogl'am. The Qutsbllnd:i~ issues that the Congress faces indeool'mi),)in~the ehuraeter of the aUministrative. ntrOTlgements for ~he .progl"fi111 al~ se.t forth In. part 21 togeth~r with a BU):)lYJ1o.:CY.OI the mltlnarguments thut havi'i been uclvttl1c;e.d wIth respect to each Issue. Partasta,t~s the conclusions reach!'id. .

.PART 1, TI-rn NA1'UllE O:E' THE PROBLB~

The oilmhlist.'rfit.ioll, ofUlllted St,atli5s aiel 'for a Elil;opcall wcovei'YptOgt'iln1; in its mal1ifold policy a.ml operating :lspeds, must he con~t}icl~J;gdin l'chttion tQtheba$iQ q'bjcctives of Ut01Jtogl'~,m.. The centl'ulPt1rp()S~i.g to help .th.E\ p.<lrti9i.pa.t.'ing c?lmtries,· iUlfivid.un-~l~r iLnc1 as. agnmp, to help t:hel[1selves In lli21ucvm.g econon.ilc stabIlIty and 111stl'flngthening fr~e instit.utions. Th~ a.ttaiument (rf this purpose 1'13­

gnire.s the 9peratioll of n. giganttc roreigll ecoI1,omic 12rograill, whi?h,in sorne of It,S phtl.s~~~ r~fl)::tal:::e5 o-f the C~HH'actel' ofbuSltl.~~S entllrpr~se,liut, the. iH.lmm.H.:tranon of the pl'ogl'am I:':! not merely u, l:ms1rte.ss rl1fLtt.er.III Hlg. mlt.ui'u of the case, the Pl'ogL'tUn 11l:volve3 l'elltt1Qns !1.n1ong SOY'­erejgn Dfttio:IlS· ft,nd is, thel'e£otB, rn13xhicllhly bound up with a widetn.llg~. of Url'it.ecl Stat-as £\we.lgn polic:esat tho highest level 01 gQvcrn­ment,

Once Congress appToves the program; bilateral agree.ments must l)Bne..gotiatecl by tl1i!l United StatGs Gov61'lUncnGwith each participatingEu~oJ?eft~' ~olU:try~ unde~l' which tl~B httl:e~ will be reqnire!} tC) ag~l)tCCxr:fI,m obhgn,hoES~ Yftrymg Elcc.ordmg to cn'cumsblllces lus a cOJ)Chtl()ll

Q£ I'e.ceiving aiel. Simu1ttl,ri.t:ol\sly, S0111Q [~rrangement<j will hn.ve to beworkgd out~with the o1,"eI'~al1conthluing m'Q'Ul1izl1tion that jt is expected'Yi.!l b.G. creah~d iJ:! Emope by,mt11til~~.Ql'afagreen?ent among. the IlilX~tIClplltrng c.Olmtrl~S. From tune to LImo UH~r(l WIll he need £orsuhE'.e~

qllellt negotjat~mlsinvQlving possil)l~ mo(1i?qa~ion3 of. these basicH{,'1.'e~mcl1ts. Th~ p1'ograi.Yl. thus cn11s for~he.lIJ;ltlal (\stablishm{$llt and1.JOSSlb.l(j lute.!' I.'.e... \'J.SlOn of 11-... I.JeW set., ot reJat.]!lllsh11?S amo.~~g [L lllrge nu.m~bel' of gov€rnmcnt.$. It also calls Tor specml hmSQll WIth 11 numbEn: ofexisting altd col1teltlpHlted il1b}rIlUtionnl Ol'g&111zatiom, both EilJ;'Qpe·i;lufiud generfl.l~ in ac1r1itjon to th~ Sl)Qdal organization set 'up b~ theparticipating cotllltrie~. . .. ." .. '. .

The day-to-dll.J nc1nl111If;:!;ntbvc ope!:'ntlr:ms of tl1B Pl"o,f,'TUrn WIll tfl.kcplace with~l the ,frmnewodc pl'ovld~d"by this complex of u~ree,ments~The sl1ppl:rmg of tho goods rmel s~r\'lces und~T these ugreements cannotb,~ llnmllecl si:nply hy tUl'n ing I'm \'!xporienc<!(l rnlTchrlshlg a.,gI~J}t ](iOS~WIth the requIslte funds. A program must nrat bepl:nmed=1h r€1a~tioil to the specific needs of l?11C'11 of the. pnrtic:ipating countries n,ndwith due rega.rd to a1·11ila.bl~supplies in the United States1 as we11 as totlUI possibility of Obb\lnh'l,g E:!)n:l~ rlC>rtion of the matj¢:t,'ials from QtheL"c.o1mt1'ies, .. Th~te. is thus tcquired n, widoe. knowledge of ec.onomic <:(m.~<litions in Enl'OI::ie; thccnpncity• of tlle. dome.stie e.conmyw, 1JOsElhiHt.iesin inh'l'Iltitioun! trlide~ and ll'egotintiollS with torein;n. government.s!ns well as s1rill in l'OLltiile bnsiness operations. ~ ~.. ..'Since. Ol:ieof the objectives o'r tIle pl'ograln is to 1!l'(,Imote raU1e:r.'

tlt'::mntard t.he resumption Qf commei'cial opBmtions between C01U\,t;d(~s, nmch.o£ the procur~nleQt is expected to hfl carried ont tltt"l"Hlghnormal busmess chllllnels. ;;ju.ch pm:chases WIll, howe'fer, hfiv~ to

EUROPEA~ R~COVERY PROGRA~1

be, gnlded by the administrat.:iOll t·Q insnJ:~e cOllformity wHh tl1e pto~gram.. E:.'qJQl:t controls, pti.orities j and powers of allQ(~llti(in willckrubtlC:'!ss be required in some Cll,ses to It'ssel1 the ndverst~, effL~ct on tlw{k.l111es.ti~, eCi)110m,,\r. Provision will hl1v~ to be made for the €'fficlentliSE: or tr(Olsp(ltt ~:fl1ciliti~s ,vithill thoU1"lited StnJ€s and in OVI~rSl'r~f!.s11ipn~l(mts.• The, employment. ():I. QVe~'3!2fU~ ttitnsJ?Orto,t1on ;t,"(Lbe~ ~tlchquestIOns. of. pohcy EtS th£1 dlsl:.nbuholl (J f efn~goes betw~el1. UlutedHtntesn.nd :totQigl\-flag vCE.'3els~ th(lSC. concerning the sale Or duu'ter'()f Unit(:(l States Govenl1nent-ownecl ships. the,inter@tsof the Un.itedStfltes meichn,nt; )lJal'ine [I.ud t,he natimi.al defense, :1nd TJtohlmns ofc(Jo~>(ljnntio~lin pl.'o(~.m:emellt, alltt Qpe1't~tio.n 0:1: shippipg..~ I~1portLLntdeols1ons,..y]1l1~Iso 11.eed to be 111tldB (lit it, wule mnge of hn!tncmlpL'ob~

lems. rclatin~ both t.o the expenditure oJ: GoYermnent fundsarid to- thestbntl]ation of privfi.t.e finn.neillg.. :nerallY ofthesG flctivitSes will ha}'e a" c1ired hearing?11 the gapfi,eH.y)hea1th, and strength of the l'J..IIHll'lCUll economy Hnd, 1:t()11l thIs sb1l\d~point~ they urI] obviously not QxclusivdJ, the concern of the a(1Jnillistra~

tion of tho(!. E\4I:"op~;:m reCIWCl'Y p~·ogl'a.m, In some ca.ses the clb:ect~u:isista.nce of 11lfltly depftrtnlents of l1H~ Govermncub will be IV;'Ce8S.iU'Y.The decisions to be made llffect the policies not only (r[ thc~ Depf~ttJ:nQ.ntof State. but i~,l:-:.(} in some illstanC(~S the Depnrtlrwnl'.f; of the rrl'l:;(ISlU'Y,

C0ll11ner'Ce, and Agricultnre~the :J:,IHitar:v E5t.{Lblishmellt~ tb~, Mal':itlIn,eComn~issi{)n~and other ftgencies 0:[ ~he <J.?ve.l'JlrnenL

At thQ. E,urope::tn {mdj the uclmullstrm:nre p:roLJlems are oT the m.ostdiYel'BC ('haI·\l('t~~I'. 'The ltdmiliistl'Fdion will be concel'Eed~ in. ever)'l}Rl'tidpatin.g country, 'Nii;h su.;::h pr(,l)lol~lS as tl.l~ foIlo,v'l,bJ;g; 1'hQ :t<lc­'IU!lC;Y' of r~e~;n'el'Y Pl'Ogl'fill1$ ;met]~od8 of alloc[lt~ng, \:hSl.;1:1l:mtll!g~ (LIllIUSIng Arlli?,i:lCnn ::mpphcs; fl'endslB export Ilud Im}XH't tJ:.'ltdp, mdud~Ing fi-flde with nonlX11'ticipndng EUl'opeau ~Ol1Jltri~s; cutteney r{~f(JnI).ftl1d. exd1ange st.ubiliza.tiOTl: fiscaJ policies; thClllS~ (mel cont.rol Qr localeuri·l~tJ(·:jes cleposited iTl, f:mnlH\l'ked 01' spe.dalnccol.lnts, llnd:f>ll~mtatin~the sa.Je. of spccbJ lllctb:riaIs to th.1) Unit12(] Stateslol" stoek piling- nomlotht~l,' T21Jl'pOseB. Il~.C011neet.iol1,w. ,ith joint. t\ml~:;'J:~n.kh:.g,'S thCl~.tl'anE.cen(.l.fhE~ efforts of p:ntwultn' eoulltrles~ the adlYillllstmnon wIll need t()

(:ollall{lmte .c~Ose]JT with the,ol'g'arriziltiol1, ('.sf;nbli:shcd for that l?Ul'POS~b~1 the PUl'tlc1lJEttIng' CQUntrHIS,

. 7iO l,neve.n.t thQ'!Jo.ssih:Uit,y ()£ dissi.rnl;t~I1g or mistlshlg' the fii<l given,It l~ Yltully nnpol'tn,nt that, the adllllll.lSU'MiollSt3t up Ce.1tlun tests bywlw~h to Er<....ugl'.t.he, general progre!;:s ot tltei Vl'ogmm n.s.a ,yll()h~ and thedegl,'ee of compbance oil the. p::u:t of thG Enl"opeun cQnlltrh~s individn~;dly and <?ollectivr.ly. tineh tC\sts mllst bCl worked ont, \l'lth responsible.oftjdals of the European governments. Becnu~c of consl:fl.ntly chang~

iug conditions the adminlstrutioll "will nc~ed to have disct'ctioil withiilthefl'l1l1lc,\\TO'.l'lc of t,ho commitments made:ill tJiC gOVCl'uiJ.lg agreements.It is 00V5011S t!1n,t such d~cisiol1s Ilfi.ye an important b~m:ing fHllna:nyaspests of ,Ameri~unforeign policy, e~'31)ecidly if OCiJlH;10US tldse fOJ,~ thetermlllft.ho!\ of mel.

WQ~t.ern GerlTH~llY will. pl'l;selit mrUlJC speciCtl prohlems,. wIl(~tl1el'Am€l'J()Un e.cmlOllllC op€ratw1ts there [ll'e mtegl'ated \vith the Pl'O.gt'il1l1w(wkerl out· fOl' the 16 EUl'opeancountdes (jl' l:l1erely eoorcliullted"1vithit. The ~itU:ltiOl1. in Gel'mf~nyCliffers, hQwevQl', from that in the otfiQt

iMt:i2-4S-·-.. ,·~2

4cotrhtdes be:caus(', tlu;lTo :is no sovereign Ge,l'D1ll11 QO\'01'nmcnc withwhieh to deEcl, tLILd di:rer.;t operations are, therefore lllyolvm1. TheserO}?eratiDllS llte c;ompli~ilt.edby th~ fact that t~ley need to h~ c,()o.r~~ill.i\t,:,dwlt.h the oprn:-a.tioL1S of thl3 'Other tvw occup,ymg PI)'\Vel'S; (TrecH:' Bl."lt::l-Hland France.

Two thing-3 IU'e, evident from this brief otltlill(! of th.e.l1at'm:e of theprogl'um: ]'irst, the ;:J,dmi:rdstrll.tivB tll.sk is 01111 or e:xtrnordh1!1l'Y mag­nitude. ~ncl comt)lBxit:y, reqtdl'ing- all. u~lu~uill ~Oll1bination of expcI:'i­~nce, slnll l lend Judgment i and seeol1c1; It 1$ l)mdl~.t' ti, purely busllles3Job nor [I; pm:e1y governmental operatIOn; but a, nn.xture ()f both. Th~

pl'obleUl before the Congress is th\18 to '~l·e[L[ea.<:lminj~tl'atiYe Irutchiu=cry that .willinSllte, n,neifer,;tive cm'1'Y1l1g out of theJ bll.~iness flf3pec.ts01 the program in proper c.oordirultiOJl'\vith the requirements ox ourd@ll~.St:iC,eCOll0my and at, tho sfllUe. t.hne prOlTlote. to the Tullest possihlB'cxtr:n\:; the atttl,lntl'tE'l)t· of tIm Nn,tion~g forcign-polic::r objectives.

P.ART 2. OUTSTANDING ISSUl"~5

Thf\ major is.Slues. t.hn.t the (:10l1g"l'eSS f[t\J~s in detel'lUinll1g' tl)e, c.rHtr­acte.t" of t.he adnlil1lstl.'tttiye !ll'l'Rugeuwn,ts £OJ: the European recoveryprogmul Rl'iEe both tl'~m (~iire'L'elJCe8 i~l cwnl~la.t.ionsof tllsks to b~ P~i:u:formed and frorn vat}TJl1g mtcTpret.utlOlW of the 'results of the iHlnun­18t1'nti \'lO; e,:{lieri~nce of tllo GOVC1')llilel1t, (j'ilpec.ially during and sincethB Wdl', in adminish::l'ing similu.t· progl'ltl1iS. _ . ' -

Dosp5te these differences, cUJ:l'eni; pl'OPQ::wJs for ~ldmillistering th~)'progl'am seem to lJ(;! ll~ agreement on the foUo,'ring point.s : .

.. L A rWN,' (t(le-J1i1y.=Pritnlll''y l'esponsibUity Tor- julrninhbwil1g theprogram. ~hotlid be, lodge,d in 0l1WN tempOral)' adn~injstrat.iv~agency­SucceRs of the pro::.rru)ll )8 SO J.nrpOl'tl:ttlt to the lmtlOllrd well~belng ofthe: Unitod Stnt~s tllat Ole organizationa.l Rl'l'il.ugements for thl~ ag~ncy

should .ho., dl?;sigll~(l ~o ~ttl'act men of outstandulg' ability to the Gov­€U'11IIHmt for sen'1ce m It.

2, Tke n{;.";Jr[ tOt 1li';J}.;bility.~Theunpl'€d3dable situations thRt nUL.)'lul've ~o b~" j~ll(~ed tlud th~ speed tlm,ti~nt7(:f2S$IJ.l.'.Y in {~arryinJ;,out t)lepl'ogl'am If ,t 18 to Pi;:! efFe~hvt!, ri:"qun"e tlUlt a large degree or nnaucHllauee~ldlUinistrl\.t.ive flexibility ;3hould be inherent. in any m·gil.lliz~tti()nthat 5s estnhlishetl.

3. OJ',~/(mi::;;aUo'r~ abf'o1ul.~The op,erntious required in Emope. rn'Bof SUChPrllIHJ):Y importance t.hat un overseas: Ol'g"H.1\.jz.atlon 'l,yill be,eSst,m tit'J. .

Beyond th~se arefls9'£.Elgt.'e~nH311t:ll~o~vevel'~He fl11U13f issues tb.!lt 111l1stbe l'{jsolvet:l Ul pJ..'€8cl'lbm,g the ur]Ull111Stt:tLIV(l :ll'l'flngemcnts to!' theprogram. Som@ of t.hese :r:1~t be. ~letel'lllim~t~ by ~he Cong~es:s. Others~nay be left. for IlltCl' ~ldn:nJllstrr~h".;.dete1111lnahol.l? lJ)'(wtded thrlt th'!lCOllg1'0S8 lays dOWll the guiding principks: l'h~:ssl1es nntlincd in.this section do not em1"lpl'iSB L'tU of the malty IssueS tJwt 1111.1.131. be:. fHeed.But they nppefll' to bo ()£ key impMtil.nCc, in d€~terlninilJgthe clmract.eror the administrative, (}l'l;a.Ilgemel1ts t.hat. should be establi~lwd.

To ch1.1'Hy thflll1.'oblem and Bha:1.'p~n the discussion the tllflin ultel'11a­tiYEls th:tt. hn,Ye been pl'oposarl for the solution of the.se outst.J,'lndinKissues are. pn~6ent£la b(!lmv. For J?urpo:::es of discussion; thEl issues arrtgrouped mto t,lll~e bl'ot1d categOl'les:

EtJl:=tOPEAN RECQVEiRY I'ROGRAM 5

(1) Tho\1.:< .l'elnt.ipg to tl:li~1 st~tnfj in the G'O'vermuent o~ thg nfl\'?:llgellcy} QspeCHll1y Its l,·eJatwn.slnp to Ult! Dep~Lrtment of Sbtt,e, andtho ol'g:miza.ticlllrll form and strneture of. the agr.mey;

(2) 1']1(18(\ involved in the nSiiiglllJ)(mt of admiuistrntive !'espf)ll::;i~

1Jiliti.es,for the C'xec1;ltion of t}H~ Pl'Ognun ; and, . '.' ...... ,{3) .. I'lwso tovel'l1l~ the fOl'lH and l'esponslhl1uH;S of the rl"verserrs

i):t'g£rnization for the pl:og'l'Hrl1. .Conclu"'iions \ViU1 reslicct to the8(~ vuriou:;! issl~es aI'e:rg;s~l'Ye(l for

part aof tbJs report.

;f.. a':t'A~U8 A~'TI TOIl..l\l: (IF 'l'IlE NEW AG1'lXm:.

Although there is gelletalf1~J:e(~lllcnt tlUlt the CfJ11gL~~!i'..s .. should~stulJlish fL single, ag(:lley tl1at.";'onld IH~ pl'imnrily responsihl(~, foradrnillistecl'ing l:nlted Stntr;'.~ aid for :1; EUL'()p~:'ttn recov(~.ty program;thero ate wide di:ffcl'e1w~~ (If 0p~l1jon em two points ~ (1) The shttusin the Ctovl;mnlent to be given the n~w tlgt~nc:y; and (2) its ()):ganiz(\­tjmUlI fIJ1'nlll..ncl strudnr(!.1. /Sf:atus .of th(~ '1M·1/) agency

'Th(jre, [U;e vlLl'ying opinions on the degrli~ (,f autonomy to 111], given!JIG lWW ngerwJ', and these are l'cfh;ctcdm (~UlTent PI'0110Sids. ,At tImCO!:'{'> of this iS~lIe iB the: p~rplexing and in1pol'tmlt (lU(!st~on of the. 1'8­lat,10n b('twf'{~n the n~~w ugt'*~.Y',lind the D~pm..'tment oft>tute, There~LPlwnJ: to he 10m' mnl11 altm Ylllttn'cs; ...

(I) A flew agency wJthin the Deplrttmen~ o:f State, intermtllyantnumnous l::nlt directly subj(;'!d to the nuthoritv of the Secretary Q:fS~n~(J,::l,nd th(~ hend of it l'~u&ingwith, but nIter; th<; Under Secl'G;hu'yDt Sh~h~;

(2) All ~i~~l1ey sepui'nte Tl'Om the DeoPl'lT'tllIC'l1t of St~~tc but sub·jeet; to the CtiJ:ecti{lH nlHl conhol of t.he Secretary of State in ullm~l tte.:l'S atI;ecting tl~(! (~ondl.lct.of foreign po.1ic;,', .

(8) A "separate" 11geney 111 Hl,f~ exeenhve bmnch oft.he Goyern­meJrt. subject. only tel the di.l'ectio:l and control of. the Pl'esldent in hisrol<J tis thl~ Chief 'Executive ~ and

(4,) An "independent" flgi2t1CYI lndepB!ldelJt. in t.he 8f}IlSe tlw,t it'w'ould 1m largely ft:ce from the control of the Chief E::;:;e,.{mtivc, as istlle: cnSEl with 11Hi..11.)1 of the Gove:l'11Ji1ellt COl'pol"i.l,tions ~trJd o~f t.he in­dependent ngl}llcicH tlltd commls:;iOI)S that pt=!d(JJ;Dl rcgulat.o!'y or qllusi~

jndicial flll1ct ions.Crellt.k~~l q:f [tn tl1t.ernaUy mtf,onnmol1$ tlge1.1cy .with~n the Depatt­

111;nt, (}~ ~bltt., Rllfl c!u'edly subJect. t~o the. rmthOl'lty of th~ SQc.ret:'!.1:Yof 8ta tt,j would. It IS <11'gl1ed, chuIfv once and fo1.' all LIe relatlOllof the head or the new agellCY to thB S€cretnl'y or Shlta IUlI:f in tIllSmamwl' ,\yoll1d insul'@ unifi~d action In foreign policy and fix: iW­eonnhlbiJity l)oth to the Pte~"idcntana to tlw C'C)I:lgi'€ss. ~ .Agrdnst thisit i:o;; al'glled that the Pl'0l)CJsal wcmld impose on the Secretary of .. St:lt~responsibilities for pl'ocm'ement, allocation, and dclh'el'y of goods lIndservices tJl!tt would inject, him into {(Qm€8tic ttgl'iellltUI'u..1, iildustrifll,l112d fhwJICial probIer.os;..,~xtending ftlT beyond the usuall'espoIlSibilitj,~.sof the Department of chlte.

The alternl1tive (II sepal'ating tl~e, agency from the Department QiShlte and subjecting it to the clin:ctiol1 a,lld control OI the Secretnry

of State only in matters nffectlng tl1e condllct of £\weign poli0y would,it is c1idmed i concentrate in th~ n(1'iV agency aU the fnnctions relatingto d0111E;stic and !ol"eif,t'J.'1. operttMol1s of lyroeurement and deliv,}l'y that,nxe ot t1 bU9i1li~s.=; natm'e.} nud ll~rtv~ ill'lly the, foreign~p{~Hcy aspeet~'!Jfthe pl'ognwl subject. to control b:( thS Sec{'etcl]:y of StfLt~. On Owothel' hanel, itis nrgtJ.etl tlmt the division ofnnthul'it)' under this Pl'(}~pasal Iy(~uld inevitably lead to adlllinish.·H.tiy~,(:ontlict~between tJ:ehead of the 11ew agency and t.he; Sectettll':1 of State, \'"hICh the Pre81~dent. ultimately woukl 1ULV& to settle ]Jl hi.s talc both [1S the ChiefExecutive aml'~s the ofllcinl chal'ged by the Constitution witI), tho. C011-

duct of th~ foreign relaHons of the United States. .Ttm cl"Qu.tion Of 11 sepa.rate ugenc:'f' in tho executive, b1'111'1011 of the

G(lYcrllll.1~nt$ubjcctonly to thE! directioll t1]ld cont:l;ot oJ: th.13 Fl'esi~

dent ,vQuld htw(~the gt~ttt f1cdvnJlttlgeS j it is ('.lfl!,ill:l('d~ both of 5ns1.t1:ingcentralization or l"T~5ponsibi1ity anel unity o:E ulhninistn\tion and 0"£giving ultimate nnthority to th;~President in Ids COl1s.:titutkmnll'ole o~fl>espoi\slbility .£OL' the. cOl1Cluct of Ul1itecl States fOl'€ign relations•.A.gitillgt this it is argued that. this prbposnl would lead to gn;ut~l'ttdl11ini:strati'Ve conflicts thl1ll in t.h('; pr(;~vious altGl'md;.ive, :?illce dIE:)

l€gislative <livisioll of responsibilitv. would be ,gtecLtc]' vdth. the COll~sequent risk of imprdril1g the. Pl'(!o.."tfgtl IDHl nntli,irity u:f die Secretary0:[ State as the. (lsurd spokcsm:'\l1. -tor tIll) United States in foreign­l)olicy matters. One. Cllrre:ut P);op()~al s€(']{s to llleet this :1l'gmnent-byl'nllkiilg the Se<;J,'cblry Qf Sb~te n. l11r;lllber of the llchisol'y bC)iltd to theh({~d of tho lie~v n~e.n(W~tlicbOiled. having tIU', fHYw.el' "'to CSl;:lblh;h and<ld]ust gSll(!l'ttlllOhr::lt:!s" fDr the agency.

~:\nothcI,' :It'gl!rnet1~ made ngll,i~l.£t the proposal ;rOt' ;l. $€pnrnte ageuc::ysnbJed to Pl'€rHdl.':lltutl contraIlS th~lt SHGh an. naency wonld be mores\.ls(~{\ptibl(:} to '~po1itics?~ in its !ldUlinlstl'fttiv{~ ci]1rrn.dons. Estnbli5h~11lW~~lt of un. "indcpendent'l o,gellcw would, itols dn.ilned, mrercomc this0ifnen.lty by P!ilchl.g t11e ngenc~ in the l?(}sitjtH~ of be1ng !llJ~e to peL'­form Its functIOll£' III [i. nonpfU'tJSilllI;Ji'h10!1 nnd thug to elmlll"W.te [my~l1spicion of "politicsP in its (Jper~~t.ion$1 The, cmmteral'gm1l0nt~ how­eyel', is t,ha(~ it might ineffec:t t€1110Ye, :fr()ll1 Pl'€si.clel1tinl control an ill)­

pOl-tallt part, of his cone,tit.utiQrlnll;('Sponsibility for the (~ol1dl1ct. Qithe fOl'fJign l'elnt1011s of the United States. -A 'current propos,a] for~m c~il1d01?endel1,f~agency would nie€t this ohjection by l.'equlrlI1g the':l;1stablisb.ulelW' hy t.he President, of the "progmills of Unite[l Shtesaiel to :tm:ejgn COlultries, and poHcies in COlllleetklIl therewith" that theub~nc~'wouldhave to follow.'" r~ 'J • 7' , ,1 <.';:t, LJ~I,qa11J7£a,;Wrla~' fo'{"Jli" I:tl1wlit'i'UO'i(J~'e

7'11~ iS~11{\ of whnt forti) and stl:udure to give the new agency has twoprmclpnl aspects:, (1) The clwice between a ool'porate or P;'llonCQrpQ:r:ate 101'111 ofor&~nizatiQu;apd., .. . ...• ..' ,

(:6) The ChQIC~ l~etween direehon by a. El.ngle. admInIstrator 0); byl1,b(Jatd or cmn'iilISSlon.

~rhe tW() ql1(~sHons are den.1t wlth hero independently of each utIlel,',beeanse the:t(; 11,ppears to be nothing inh<;l'ent in the corporate form ofol'ganiZ(Ltion to require a board inst~itd oil1 single adnunistl'atol' tohead the new agenc.y, III Tact, Dne current proposal is fot' ~" COl'I?Ol'a~

7

tiOll headed hy ttl] ~:Htlllini!Str'DJOl" Similnrly there ttppClal'S to henothing inhere.nt in tho noncorpOl'ftte I01'1'n to l:erpxire a sh1gle adm.in~istrtrtol' instea(l of ~'l boai'd,• 1'~U3 p:dllcipal ac1YfLl)~tages clfti~ne(l tor the corporat.e f0tl~1 o:t organ.­lzatlon fll'e hm:folcl: Fu'St, that It would Im,ve great finnncll1t and aa.­luinist.nttiv-e flexibility bcelluse it would b~ tre.£! !l'om the, :liol'mal Gov­ernmout :regulat.ions 17e]nthIg to pI'Onn'eluent, ller,sOl1nel, and a.uc1iting;imrl sBconcl that it ,lIGuld be mom <\businC:,'ss-like'~beoluse it could ent~J:

into c;ontr,\ets, sue llml DB sued, setne dahns in its o'lvn Dame., nod in.gen~i'al nSB (ltdh11ll'Y pusiness iilltlncial c(mtrols fIr-.d practices in [l,

prflgtam that lS esSel1ti~lnJr of a business chn.l'fl,d~l" . ,Agl1inst. this itls ftrgued that the tl,cll:nh'ljstratlve mul fillancinl 'll~~ibilit\r of ~1, Cbl'PO­l:~tte -IQrmmay be. obt~J11.ed ill. th~ nQucol'p0l'[\te £QP,!-l l~y /="idng thonew agency t!le necessn.:ry 8::-;:emption f.t'Q.m t.l10 pro.v~sl0l1S of,lu..w nor­l~lfl:n~" govenu;tlg J2ro9u,l,'ement, p(~rsohnel~ and IlUdltmg, . I~. l~ arguedturthel' thnt the onSl11ess umtIogy should not be push(!(l too far he~cause that WQuld be plrtcing 1l11lJiJe emphasis on the lmslHe:.,s reatm'(':'!at the e.xpel1he of the forei.gn lwIi~y and oth~);; g;'(Jvermllental icnturcso1~ the pl'ogrtuD.

RegnnlIcss (If wb~ther the nG'IY agency"\Yll;."$ (rf tIIe cOl'p01'ah~ or 11011­corp(}l'nt\~ form, it is doinwd th:lt 1vith il single :;ulministrator at. thehead of it the ceJlf.t;ll1zfLtion of contl'ol and l'cspousIhiHtJ fo'r' operu­tiol1S under tJte European recoyery rm)gl'am vi(}uId be rtssuI'e~l andtJH~. rapid itdlldnistrl1tive de('i~iot)s that ,vill he requil'Hl could br;;made, But, against this it is argued that 1;00 much powQr wonlcl lH:)

cOlleentmt.<;cl in one lt1divjdnnJ fo1' tho lul'g,~ llmmeiul outla.}'s fttlcl:tor the basic .poHc'J; del~isions t.lH~t :;,ill be l'eqtiirecl und~r the progrllITl,

To de.a! 'wIth tIns latter vomt, At hEts been proposed that the Con­gress ShOlll(l Cl'C:'llte an fHhh;ory board to the uclm.i1l1stl'atol' withpowel' t.o estnplish rLncl adjust ,q6n~l'nJpolicic'8, }Hlt with the deal,'understandJng that the opcr:nU,li'g dedsiol1s ~hou]d be llH:tdc by thoIH~[HI of the nf.\W agency. '1\\'0 sepnrate n1'gurnents? however, al'e1'IJllde agl1inst t.his proposn1. Fhst, it is d(l,.ime:d thut C<mgl'ess shouldnot est~ihlbh sueh a, hody by In.,·. but that if expel'ienc~hldicates thlltt.he adminlstratoi' 'yollld IJcn~Rt iTom tlle a(lvi(~e of a. consultativebody it Muld b<'J established at any time by Executive order, SEcond,it. is fl,tgl1ed that an uclvisoty board is wit, enough 1111d tl1flX the con~trol of the 0l)~nttimu; should be, vested in fl bip.u.,tisltn or nonpul't1­ilnn board of priVl1tBPN'SQl1S1 possessing the neC0&'''>lu:r business'expcrience!. jltdtpl1el~t, ::md manl1gel"ia~ en pn.ch;;y to aC,hhwe the n1l1:d­mum b(~n8'tits of 'ivllH:h the progtfltll l,8 cCt!?tible. TIllS 'iYQuId assure)it is cl:dmed, brofid lX!IH'('Jsentuti()t!: ill the, determination of the policiesand operations of I.henew agency and t.hus would assist in :n1Uilltltin~ing 'puhlj~ ()o)lfid~m~e, tlmt the Pl'o..,.~l'nin W:.I.E; b.ejn~.r, canie~:l out. inthe best mtel.'13sts of th~ countr,)! ftS [t v.hole. Ag:Ul1st t.hIS secomlt,:YP~1 of argument: it is dllhned expel'ience has shown thnt th(l boal'dtJIH~ of ol'g:111izatioll is ulnyi~ldy~ which mtlitRb:~s ll.gaim;t l,'upidoperating dee·jsions und fiexibility in ndmlliistl"ntlon. -IJubHe con~

fldencB 'in tIle uperations oE the mnv IJgency CQuld be lYI5tilled, it isn:rgucd, by the, Cl't!;\tiOJl or an !1.cIyisoey gTt:.mp CQuslsting of repl'BSen­tatives Qfthe ,Public, bl!sine~~;agricultn,r~l Ul;d lahol', OIl lincs B~mDnrto the gron]? In the OffiC0 or 'y\rm' MohlhzatlOll antI ReCOll'i'(!rSlol1.

8

n. lm:$l'ONSIUILITY ltOn;TI:rB EX11:CUTION Ol~ 'J'ill':: PROGltA i\C

Th£'! i$Sli~S nrlsing out of the< assignment o£. general responsihilitie,sfor the execution of the program center around seven p:dncipill points,First thcl'01s thGl qllestioll of t~'lC ildJn~n?"tl'utiv,~.cle~.el'lnin~tionof bI'QU4Ill,'ogl'ml1.s nnd g€rwral O!Je!'utmg POhCIC~:~l all wlthmtbc :l:'l'nme\yoi'k ofthe! ovel'-iLlllim..1tntiollS oll. EUl'Qpenn aid Il1'E!:<.:edbed by tIle Congress,CJlosely l'€lntod to this lU'~ two QtheI: Issues: TIll) negot.ia.,tiou of n.gl'ee­ments -wit!~ for~i~ngovernmentS; and the control O! the :tU1:ds thuj;aremade. nvmlabl~ tal'· the program, Next acre. rOUI' lssues chl'e r;tly COll­ngctec1 with I:;lcillt\Lting the procurement arld delivery of United Stnt.esaid; detei'iTIlllfltioH 01: the methods of finrmcing;. the manner in 'l,vhjehUte services ~lIKl Iadlities of l:!~i~til1g])~d(!,lTtlagencies arc to be utilized ;the [lurninistratioll of export controls; utlfl ',vI1l.tt r(lspon$lbilit1:~~, ifallY, the new ngeJ,lcy is to hrLVe in ;i.'elation to other £Ol'dgn'llicl 1?ro~grams tmdeI:'tlll~C11 with United States funds,

All theE.<: )s:mes Jll11St be viG~~ed in the ITght. ()I the gmltitally ngi.'e,~dopi.nion thnt .finiliwial ~lnd ll,dmilllstmtive fh:lxibilit;y mu:,;;t prev,dl inthe execution of fhe program.

1, 131'oad pl'O{lrmn8 and f/ene'l;a~ poUciesIrnpOl·tant problems adse because I'f~qutrements for Ul1Jted States

nid nnder t]Je Ell.t'fJljefl.ll1:ec01.'\?;t;y pl'()gJ.'ii-tll must be fitted in lyith UnitedStates eXpol'ts to nthel' pads (If the world. Existing ngeH.des of theGOvT'rIjJ:l1ent" espcoiaJly the Departments of the Tl'l;ll3Ul',Y, (JoHi111ercc,.AgricLlJ bn'e~ Interior, tahoI', the Nati<JIjnl Mi] it.a l'y EstllbJislm1cnt,~ :Hlftth~} JHn ritime Commh,slol1 fU'f;) conc{~rned 'VitI)" U1C lmpaet. on the iu.neri­tun (~(~I)nomyof :rore.ign. t'equjl'~rt;IehtB forUllited States exports.... SOlile(xl these d~L1itrtrnp,nt,s, HI adchtLon to tIK' DeplU'ttnent ()£ Statl;\, (lIsahave nn interest, in the fO/.'flign llBpects Q1 tlH~prf)hlt'msi nnd the over­all dec::isinns of lmtiol1:11 pl)m~;y ibn!: tf..ll1C01'1I ,several dQptll'tments lIla.y

nltinmtely l'N]11i eo Presidenti:tl dl!c.ision. ,'this issue has tht't:e }Jl'incipaI fellhW0s: (a) trhe agency that :4honld,

in t.he first inStftl:~e: be' r~f;,pon~lblC\ :f01' inJiiat}ng ~]~(1 slion~m'ing ,n'o­gl'Unp3.fl.ru~Opt'.r!,!tmgpolrcles tot' Eur<~pe;'~J1 Iud ;\0) the ~XtE'l)t of theparl:l('JVfttlQU of on~er Federal ng,erw18s m t~lI~ t~)rm\]!n tUlg proc.es~;and (G} the ll1i;:dumtsm needed to UlSUl'c C():rdu:.attoll of El.U'f..>pl;:m rndwith othel' domestic and foreign policies of the United StnteH beforefinl~l apptovitl is giY~n. ~. ". . . "'. ,.,

rrhero ~u'e two mam l)l'Opo.wls I01~ t,11Q ttg('lllGJl that 18 to lmt.mte and.S;P0l1i301' t,he pr.o~m.m Itnd policies: The mny ngc:!l1cy that· would b~~ e3tab"hsh.G\l to udlmmstcl' the p. tOgl'Elnl j 0;' :il1oth~l' a.geJ.icy, ofle.n suggestB-das bi?mg one tImt w~)uld be a pa,rt of the uJhce of th0 Pl'c,mlent. Pro~

ponents of the pInn for u~lng: the lIBW ag(!)}cyfm: this l~n~l)().3i~ Hl'l;rUEltLwt unless th(~ t\gency pr111ClIHtlly l'£:spQrtEnble for udmm12tenrig theaiel is also teslJonsiblt:l for initiating programs and policles for if, :1d~ministl'ativc<xmfnsion 1S 31lreto result. Those who :fltvot' using u. small_~[mtl'nl planning ftgellc:r ~l11im tlUlt tho proble.111 is klyger tlmri'(10'\ielop~lng IJrograms m~d pphCHJ'..S,. for E?l'?pcILn ~t~d~ anc~ tllilt aI'\' over-allngellcv would HlfLl1ltmll the unparbnht.y that IS reqm:red.-n]s :mpli.:.iid luaU the majol; propostlls thl1.t while; prinu1ry responsi~

bility fur inith"tillg and sponsoring progra.ms nnd polideg should re.st

9

1J

""it]) one El,genC:'h th~ latter "'ivouhl hu."7e to esta151ishl'elationg at theworking Ie'\'731 wit.h other agm~e.iC!scmlcern~cl. r:t"'he advanblges of (~st(th·lii::.hing these intel'connedi<llis fl~\J Oltrious. ,Any cot.111tcl'urgumentwould ha.ve to rest on the (lSSUlllphon thfLt the srngle, ugellc'y could take,sole responsibility for all ccollomie activity in t,llE~ foreign auct t1OJn~st.ic.fie]ds). including -even the det.el'mim\tion 01 the nvaiJability or eoltl~modjties 101' consumption in the Unit~d. Stfttes. None of til6 Cl.ute,nt,p:rop05G)S has gone ftS fell' itS this. 'f'he m"llX of the administl'lttiveproble111~ howe~H::r, is .tQ detcrmin~ ,the m12cl~q.:riism for giyiJ)g.lY~ightto the VleWS of the lhffenmt ngencl~sl ~Uld for 1'(~'501vmg <:ontbcts be~

tween th~~Y;o, in eshlhlishing tile prognuns n,nd poHci'2s -:for European.{~id. On the one h;:md it 'is argm~d thnt, the. :mUuJtizinr;.>; legisltltion~!ll)ll1d 1.=)l;'e6(~,rrb.e tIlls rneeh~misl]i iFl..• C}ct~lil.f.i.lHlnlearl:r fixh~Sl.?Oli8ibili-..·.h~s and prOl::edm'13B, Agamst Hn8 1t 1~ ~lJ'gl1l?d that to do EO would:t"r~duce adruinl;;ll'utivc fl~~xibility~ especially sil1cf} most. of the currentpropmmJe Uj£Sl..Hfll! that. the Pl'csidcTrt RS Chle;f Ex<:':cutive would he l'e­s.'p.u.u:;1ible i..n t:h.e fin.ni analysis for resolving (~Ol1n.icts among tho .pgen~des. Therorore, J1(~ should j it is dftirned, be given the freedom. toB:::tnbHsh suellI1(;lw procedures as he may de~l'().necessary. or to eontinU€lthose no\';r in existence. . ,..ti '7 ,.; j' . J 'tt" t 'rq, 1. . e[l(J(.,at'wn 0' (l!Jreemen,:,!{ 'WI oil. T97'rJ1g'll. CO'Wines

ThL:~ isst"tc depends ][tl'gely 011 tho l'c1ati~n that ii;; t.o pteYu.i1~ beF,"centIle new a.gencv l\ml the D,~pfLl-tlrtentof tltfLte. It ~1rli';.!,iS prll\clpallJ'with. l'(~speet to~tIle b:l.sj(~ [lnd :;;uhsirlia!.'y l1.g1'cements witlt pa,l't·icipatil1g'~m"OIleJm ~OVel'l1lI!ent.s~ bpi', to SOlil€; ext~i1t it [11$0 affects r1e{,!;otint.ip1l5t.h[lt may lJe reqUlred w,lth n~ill"EHl'Ql~{WXL gOYeI'lUU[;nts concern mgthe prQQmemeut uud fmftllC111,g of "offsllOl'e" ilSSlstil)lee. .1'11en::~,uppear to be three posaible, so[uHons. _ Pril11ltry tC'spoI1Sibility fOI:

llC'gOUfltlJtg' theuf.,'Tecments might, be_](xlgecl by legishUQn,Jn.(ci) thelIClwage.n.t:Y1 (0) the, De.pnrtrnent of St:~tc, or (e) the P~'e~I::l(m~,

No Pl'0pclsal so fur lmrd~ lodges complete l'Q::poHl:ablhty 111 the.l1Ji.r\V ag~f1{:·Y~ i."lml t.he arguulont.s deal wHh tile clcp;r·ee. in wIlicll th~

Preshl()nt 01' other ilg{\llr:.les should pitrticipn,te. 'l'he pl'oponents ofplncfng maxlnmm r('snomdbiHty with the new tlgency Ul'glll} t.hatit :is nct,e?silry t? fbI l'e~ponsibility for these neg?tj~ttIQns wliA~'l'(', fromtI~IjPl"il(>tl('lllpmnt of vlCw)~lH~Jlll~l~llg,namely, m th~ agel~cy chal'g(~t1

wIth the ~ul~ce~sfnl,opcrntIr.>l'l D-t the program. lJ.'be 11l1~1J! .(':QU~ltCl'­urgument 1S that tIns wDuhl i'(llIlOVe tIle pnmary responslbl hty tromthe p]nce where it con2tit,utJon~Uyb<:longs, I1mtlel:r. ,Ylth the Presidentor, by !lis~lelegati~m,with the .S~c.rctnry of Stnte: " .

To Just:dv p]uew.g l'e.spomalnhtv \1'lth the Seeretul'Y o£ State tItenll'ther argtlr~1\~nts are fLddeclthnf tilis is necessary to 'avoid the l'iskof hl1ving two £ondgn policies, £tm1 thfl(onIJ~ the bflsic. n.gteements I1reto 1::13 negotktted by tIle Department of tHnte in cOllsultation ,vitll thellelv age.Dey, the latteL' being free to negotiate Eubs~ql1ent subsidiaryagreements in consultation wtth otheL' appI'(,pl'iate flg'enclc-s.

:Finnlly, tIle. argument is :Hlvl1uced Tor placing the re::pousibilityvdth the Pr~sidellt on t.ho gl'011lld tbat, from the 6mstitutional stnnd­point thatiswhel'El it. legitlly be1<mgs. On the othel' hand: it is pointedout. that SillC~ th_G .Fresident will ill pl'Etctic(!(lelegate this lluthority t.othe Secretary of Htate, or sc>me other officer of the GovCl'nrnellt, thlstact should 1)1) r,~cogl1iz;ed in framing legislation. '

10

S. rJontyol of Me ,nl/ndaAdministrative, eontro1 of the TLmds tl1at will be <1ppi'opdatetl 1m.'

EUt'opco.n aiel is especially irnpm'tnnt 11'01".1 th~ standpoint 01 deteI'­mining tll~ oye.r-alrpl:'O~11'1ms:md pOlieics to hBfollo''\'GII. The altel'~natives thut Iutve b~(m proposed ltl'li} to '''(.:lst control in (u) Hie neT'tag(~nq': nnd (b) the, President.

Tho ar£!'ument l1dvnneetl fOl' yesUng contl'ol of HIe fm1ds in tIle newagenC',~~',tllrough (ljl'(,Gt n.ppropdat.iQr'l. to it, i~ that, centralization of:responsibilit.y rmd i\CGOUli}nbiIity to]' the operations of the programwould therd;Ti~ be inc]'eased. AQ;idnst thIs it. is tH'g1lecl t]lnt the (~imb'olof tlH? fund::; ~'jhouJd !to lNith tlt6 Pi'{'~,!jd(mt tlwough direct appr:npria­t,ion to hi rn becan&Q QthCl' \V1 ~;~ cxpeltditm.'emighL be, ]1l[i(le in a l!lllIllH::]'detrhnentlll tQ tTnitqd Stat~g foreign l'e]atioll5 or too ltLtfl adequatelyto- :fu~·t.lwl' them, , In the, I,lltter pc..).::,.:slbqitY1 the question 'would a~'is;c..wh~3ther ,t.ho ne'\\'" llg("I~(;Yj,]f gn'~Ill:~:;:GJn~lvt\; conho]1'1v0.uhl c\t [tny tImebe Jlwrl;(lmg the (',onslltntIOJHtl pl'Cl'ogntlVEif'i of the Prc2lC.fent.4. [),J!e;l'lni"w#on, I)f mdAod8 of finanfihlrJ

TIlt; funclaruentril (lUesti<m lmdel' this bSllC l'Qrm'::1 te"! t1m dlOieebet.'H~lm the n] ternaHves of .(a,") strkt congressional COlI tro] til ronghlegis]utive definition oi~ lYl0thocls to b~ used. and, (b) len;ving d]sel'(~~t.ion to thB lie,,,, ;Ig~nc.y in tho int~l'(,St, [)f [~dmjni2ti·ative [[('sibility.

It lS i.1l'~t/l?d tlwt there should b~ a ~hmr dolitl1itaHMl of 'functionsbetweel~ ip? pew :-~gency n.nd th.e I~xp01.'l;-ID1po}t BQnk~ and that th~:reswmslblhtlesof each Wider th'2 J'::Ul'(fl1efllH1Jrl program ;;;h(mld befixed b~·legisl\~tion.. Cn:r,l'<:mt p,rQ,P0SD}S WQuld ~ve to the nQ}',r D.g-en,?:Y'the JH']lli:U:y :fUJ).(~twn of IHhnml:stCl'Hlg only that, IJart, ot tlli.~ ~ncl

pl'ogrnm, (:ollsi~,ting ptinciprtlly or fQ ckt1 flleIs, fl.Dd fertilizer" tbM,I'nW;,t bC'!, fori-he most palt, pw)Vidcdin th(lfo1'll1 o:f gnmts, ~lnd wouldassign tOo the Expol't-lmpol't Bnnk the tuspot1sibi1ity fm" [til lonl'l.s~oyel'iJ1g C01Yllllodit.ies to 1)(~ processed. and (lcI.'ta.in types or speei~lli~ecle,quip:tI1Gnt.Thig 'would be done, on. the \~$smnpU(nx thnt the. Inte:r~national 13m),]\; w(iukl provide the necessary loans [01' cll..pihl ~xpansion.It iscJahIH~d.that hi this WILY confl.lsl<m ,y(mld be Hvoidecl that n:li(!ht

'H'SllH from ,?'ranting jn the fOI'ill of fonns fl.(hanc~"s thv.t flre. in 1,"c,n.1itygl'llnts. nt1d UHl,t:}, c:.lretlll nnd ri,Q;id distinction bet,'\veen f.he tw[)wo111dencourage the flow of pL'ivate'investment by eHrninfl.t.ing: :from theoblig"alions of thB recipi(mt countries dt"bts that Imclnot 'J(~en irwurrGdw.itll:· n,ny genuhw ll.-..::pectution or I'eIHI.Yllwnt.

On ths othelT haud, l;]ie mfiln arguInent uc1yunced f<rr. le:,i),ving clis~

ctetion to the agency in thiii hnpodallt matter is that thQ l)l'ogl'flJP t~Sit. c1evelopswil1 Chi11ig~ eonsiderfLbly t.he needs fol' financing particularC(llll1tlOdities to pkwticulal' der:tlnations. An ntt;enwt to dofine beforl)~bawl fllCl"hods of fin[cndnu: by tvpes M f\.!5sisbi,nce w()u1c1l)l"{Jvel1t the11my adminIstration from varS'itJg the metbod_s in necc}1'dnncc with thechangiJlgciremnstancl's in the l'eeipient countries affecting their ~Lbilityt,o rnake pn,yment. It,]S a]so itr.gilcrl that., whhin the, loan Ct,tE~gorynfassistance, there 18 need 0:£ cOlli-)jclgl'uble flexibility wit-h. a 'View to taking{J,d\'[m~Hge oi fill olJPort~nitics to enl,ist private c[l)..pit'fll~ including thefinancrng (}f Til,,,,· rnatel'uds llnrl eqmpment neceSSHl'Y to expand theopel'[l,tion of existing EW:OpC:1U prOductive facilities-, Furthermore,it is poillt~d QUI:: tha.fin the nbscIlce of IB3'lsJative definition of l11f!thods

EUROPEAN RECOVERY PRQGRA~I 11

of fu1flf\dng'J the' Congress would ::'~ilI 1'0Utln ~ ge:U~J;'al c~nt,rol avei:de'~t!lopmg; th8 progl'atll\ beCftUSe of the neces81tyo'f uu"kmg nmlulL!npIll'Opl"intlons, . FfnnlIy~ n is drLimed that cliSCteUnll and flexibilityin the administnltiol1 of the, aid c(mlcl be, combined with legiskctivediredion to consult. with th(~ )f(ltionnJ Acl'.'isOl'Y Cmmcil and to ll1fl,ke,liSe. of exhtillg [lgflU('les j for the PUtp()SC ofintegrnJiJlg the fuH'IudalOlwl':ttion~ of tIlE; Pl"Ogl'rHl1 with the established. nlt'chnnisms :f01, ddN-'lnililng the O\'cl'-idl jntemntiQ1Hl.l monetary [mc} investment. poli,~y ofthe united States..~ Trt '{" ., t·· ,. F i·· . 7 .'V, (., '.!~ vmfum, (j e,t}NJtlHr!eUJJY.lc, u!lerWuw

Exist.iI~g agencf~s :'l.J:~ aJl'ca,dy pm:f{)1,'mi1Jg~ri1portant. i1itJetiOlls ()fthe t~;Tl(~ 11lYQlyed HI the pra~urmnentand dehv~ry ::rfjwl tf)Eur~p~';e.13IHi:<::lall;:,' lhe Dep:ciL'tlTtents o'l n~e Treasury; AgtJ,clt!tnre, InterIor,COrnml~l'Ct~1AI'lUYl [he Office of Defe,n~eTranslJm:tuufm! and the Inter­state CQlDlnerGe Comrn1sslO11. Thcalta'lUttivQS fH'S (a) to m£lk(!. the.most .of tl:t'~.e existing agencics1 Qr (b) to combitie nJI t1u~ UeGe,5s.txyfnnctJOl1.$ m the llew agency.

The t~l'gnment niLvHnc~d for nsing~ to the gl'crdes(: extent pl'actknbTe,@xistil1,U' ))lachinerv f\& it E:hmds is (hnt. to tnlnsfel' staffs and 'fundi(H1s11'OlL.1 eiirstiHrr:" ageIl(!.i\;.. ,:-,·.' tf.·.}[<he1ll3\'i.'. tl.ge.llGY would i.lOe. only requirf!. d.l'f.l.",.".tlC

h . .. 1 ' ··t '' 1 i ! fc ' ftll~f!S m t.IS perl1H\nent aUlilnlS ratlTO, ( e]~ill':il'llmts'oi':: ~)nl'pQs~

that lsonly temporary, but w()ulcl also s(~rlrJnsl,y nl[ed, the C;!lhc!'ency (Ifop~ndl(1n;: gr!Ul'E:d, as they" t:111'1'lmtly- [I)'o, t (J the fl'1qmnvod,;; and .::001'=

,dinl\ted opcl'fLtinTlR or their :J:esper:tjvc ng(lndes. On tit(! oUlet' hand, it,1R argued that HnTc,~g t11(~E'(~. Opl2;I'ntimHl\'·[~rt~ to be Iltiliz~d by tmnsfel,'~

rill/! thE-In to the inwJt'di:Jtedire:dion :It"HI cont1'01l'lt the new n~encv~the)~8 ,'(nurd be not only extensive rluplication between the, stait ;}n"d(lper'lltlOl1R 0.£ the new flgeU(:y ilnd t,ho:,;('. of l!xistiug agel1(~i~s ~'() thei:1eh'illH~nt()I the program, bm, nisa the l'j~k of too grecat fL ddluslon ofoperating'de-cisiolis. 'fo meet this bttm' pohl't~it', 1S daime(l thnt ma­('ldn(~)'V eOlild be t'I'{,wtcd :fOt the centralization and cool'dinatlon ofdl'dsh)'ns. A.Hel the furtber eb:im is madfl th:.\t ht re.spect to ;3.oroe fmlC­tio 11 !i"1 ~;;;p(~dtlnJf the (1il'c:cttO!l oi (lV€l'Sell$ shipping! such IJla(~hjncr,v

'\'in haTO to bo created t'egtU'dl-e~sor lvhethel' the itmet10Ds nn~, ullO'\vedto rf'lilain in f~X]gUng ag't!llciGs 01~ nre, h'lmstetl'E!d to tho new agency.

{f,,.:ldmini.9fration oj et(;f)m·t {}()'n{,'fJ(s

Special impol'tanctJ :l,tt:lches to this issue h0ClLt1~(~ of the wr)rltl~wk1e

l'al1g(~ of Unit~d States e:q:lOrts. The alternatives pro]J{ised iU'e ~ (a)To l;l't:nin the IH'{~SeJlt nn~Hlg(m1(:!liI:!:);and (b) to tl':l1lsfer !he f\(hn]nig~tta li(J)l of the controls to th{HI(fW Llgel1ey,

I'll\" fltglllnent adv:1llce:d for l'p.tuilliug tlm ()peration of export. C<)11­tl'o]s in 1.J18 DGp(j;rtm.on~ of L~nllrnere~l'ill con5ultv,thYrl with the lte'",ff..gellcy and otbel' llg€,<l1Cres C\~lI cel'ned 1 IS that, a half~,ncl~ must be strITckb~;tween the t~jh.l J~[~eds of ~urol?eal;e~')lll1tlci:s" '::I:1eh tl~e 11~~'V (lgimC:Y'Wdl present, mId ('hB nee.d:s of t 10 l:J!lted ,......tl1b.~~ ,md tho re~t. or tIleworld, 'vhichother ngellcics ,vill })l'€oonj!" In t1~e~~YeJ1t of n. dislmtebet\veen tlle new agel1.ey amI the Depanment ot Commerce 01' otherv..ge>llCh.·,'3~ th~ settleinent of it, would, as in other (?llseS~ l'~qnlre appealto t,he Pl'~sidelit as Chief Executive.. It is. pointe.d out that it would.be a disadva.nhtg~ ii\ by centrLJ1izing powe"1'S oyer expOlt (~Ol1tl'OJs inthe new l),geney, tho. latter '\VB.S compeUed to act. a.s. both ndVOc~lte andjudge in prtSSiilg: on Emorl'U11, claims,

12

ThO$13. \V1lO Iflvor plflClflg in the new ng(m(~y aU respmlsibility foriHh,ninisteriDg (;'J~H(lrt. c9Dt1'O]S ,btlse tJti.:1iT ftl'gwnent pl'imHl'il,v \>1) tlll~ohurn. that f1dmmlstrahon of thes~ ~'ol1tr()ls on nIl OVi;!L'-Ull basIs by

. it, secOl/d ngcllCY would hnndi(~(q! the :rapid and emcient:ulI'(~inlstr:t~twn ot the. European l'ecov~rJ' p.rognll1 by the nW'iY<1gel1.cy~SIll(~e thegl'ea,test, need for tho. USB of expDrt cOl1tl'ols would arise l'nnl.l thett1(ttrll'ernent.s of Chi} [tid plX)gmm.

7, .ild7ilinist1'r.dion oj otJu;y aldpi+Or/J't1liUl)t, i~ gCl1Ci'r111y ,1ssumed ~hn,t, the i,L1te.rint-~idp:n)gmm no:v hei!lg

admlnlsh'red by the Deparunent OI St.~te WIll be b:alltiferrerl to thenew t1g'81]cJ'. Two other ll1ujor pnJb!ems l'emil1tl:; however: The l'C­spo!ls:ibiUty or thB l1ew agency :for administeringeconondc t(~lmbili­tntiol1. amI l'ecollst,l'udion of wc,stern Germany hi the Enropen 11

recovery Pl"ogT<lU1; a.nd lor nIl other fOl'eign-n3d ·prag;l"<lmt:3, indndin!:!;such l'H'ogtllJl1S as Greek-'Turkish aid !HHI possiblfil luture programs.of gtBuL0.i; llidto sud:), fH"fjHS fl2 China :LIld Latin AlnerJcfl, TIH,~-nJUn:­THl,ti,,"C'S nrc (a'l to eOI1.tenb:lde opm'utions sirnHaJ; to ot' Gmmeeted withthose to be b~r:rorme(l ill the European !?l'ogrnm in the. li'!)W' agencyor (b) to disperse the 0pE:l'1jtkms lUilO11.g- otllol' ageneies.

GI3I'IUfllty pl'Qser~ts an lSSlle of irnmedi:\te and edticfl.l importance h~­cause of its central position ill. thB .Em'op~ln f\C0l1eJU1jc. sJrstem. AtprBscnt. the DCopn.ttmcnt or theJ\.l'ti'lr is th~ respolJsible opm.>ath::gageney, :lltIlollgl~ it has been 8ugg0ste~(~ that ~1c ('.~vil a.cl.ministnttiou Im..YSOO1.1 :::upel'sede tIm Army in :WU1e ()£ Its fll!lctlOllS. 'Vhn.tcvel' step is.taken in this cHr(;dioll, the Ar:TI1V will stHl be n"spf)l1sible in SOIlW re­spects as (,he o<;cnpllUQl'i :mthol'ity; and the ne-ed will tU1Sl; :£Ql'cool'dina-timl of nedvitjes. . .

Thc~ arl!UlDcnt a'l1vnuced llol' CB'ntel1n<J' the r('l~vllllt ~cul'ldmie fnl1c­tions for (j-ermiuIY ill tho;; n-ew agel1cJl is tllll,f, it wottldhe he:st, equippedto detil, as ;t part 0'£ the r}\'el'-all pl'(lgrtlHl, with the coml)li('n.tl~a eco~

n01l1ic problems ox Germun l'C'c(JrBtilletioD•. Ag:ninst ~Ldopting thisC'OLIl'se it is :il'p-;llec1 tImt the politic:tl and li1ilitLuv aspG.cts of the G{!,r~nlun prohlem ril'o SD intertY'Itined with the, econOI1'li;;l that it wOllldlll3 dis­ndVlI1JtagQOns to mn!ie the new ag~lH~Y rnahdy r(\~pC!mi])le, for,' t,he cco­nomi c :rllUdiollS, It is. eln;imet[ l1o'lvr;'Vet. that provided there '\VllSpt'opel' consultation with the Dcp'artH1(mts (If Stl\Ce uml ArmYI the newagencJ/ migJ:'lt, wedl mnk,,~ l'c;qm:'sts to the Congress :fOl' aid to Gcrm:;my~\6 prLrt of Its over-nIl progtmn.

It is pointed ollt that the ac1vlllltU2:{;\ of consolJdrd:tng" the adli,1inis­trat5on. 01 aU o~hel' pt~)gmm:'J of I?reign f~i(], l'e~al'd]ess ?£ tYP.(l~ inthe new agency IS that It would aVOid the d:i.£hcn1tles expentlncccl clnr­:ing l1tld nfter the WIll' from the dispClrsJll or progrums aInong nge-.nc.ies.On th~ other lmnc1; l)J;'()grams snch lIS th~ current :lid to Greece nndTurkey bn;v0 certain military features whicb: it i.EI a,rgl.lcd, nutke it hn",possible to flc1htinjgj:el' th~1U 011 the mOl"O bu~iness)jlm basis cOlltmn­plllte.d for the E·urope.an-uid progtf1h1. In the case of possible futureaid to Lutin ~'\,mel'icRl for exa.mple, it is argued that these milibl.l",fentm'p:s might not b,e pre~ont gO strongly, a;!ld t.11at g1.~(>~t aclvuntfl:ge3from 9H~ POl11t or vlew.of general p.rogl'~mmg and polIcy. as 'Y011 U,SoperatIOlls would be.dern:edfrom comblllUlg snch future md wIth th~European program m a sIngle agency.

EUROPEAN RECOVffiRY PROGRA~{ 13

Although th('T~ is general ug'l'Mlmmt that an oVel's(~as utganization1'rill be :'{!qllir~d in comle~t.ioll with the Elll'Qpequ tQcovc:ry In·o.gl'[I,)?,~,rwo Ula]Ol' pomts (\1'0 ilt lS8lUl; (l)The, form or tho Ol'gnnl~ahon )11h](lividual countl'h:~; Elucl (2-) t.he::,iatus amI responsibilities or thechief t'~pr~;sentatha T01' the pro6r1,'(tDJ, in Enrope. Both or these) int1u'n~ l:~effc(~t the hiL$i~, lEsuc ott the at.fltns o£ the now' tt~rellCY in theUnited States, especinlly its l'e.hltioll (.0 the De·p["drtlent oi State.1. Fm'1I7J af tlw op[fo"nlzat'lon i·Jl. lndfJ/fld'l,wl oo1tm.t-J'le&

'There is n.gI'eement tlHtt, SI.J~eiEll representatives 'i,tith ft1?l2I"OI)l'.iatestair wHI 00 required to admhIistcl' the operations in l;)tt{~h Europea.ncCluniQ'paL'liciputillg in thoptogral'I1.. n~.the.d~eisi.~lnjs l-11ilde at theone (;):s.tL'l:;~me, hOV'CYCI" tIHl~ tl1tH1C'.V agenoy In the Umtec1 Stat~s shouldbe Sepl1t'Hte 'in ~tatus from tl1l,~ Dep"ittnlent of State, tlU::'1 quastion 01\,,11 ether t!l<:ll.'C should b~ ~~ seplll'1ltc oversens organization will be rai.'3eil.in .its rnost l1.cute fornl. On the. other l:Hl.lld, if the 11ecJsio)) is JJltHl(!, atfhe othel' extrerne,thnt- the J1BW .\gellcy should be 'ivholly wichin thefn1.l1113'\'~l'kof !.h.e D.. eplt.l'tmen~ 0. f St.~l.lt. e~.. the qu.c.st.ion D1~jJ nof.ilpp,euTSO prC\8S111g'. On the :~sstUnptlon thut the new tlge1'l(;.y In the. UmteclStates is separate in shltus from the IJe.partment of State, the £Otl'1)(1£ the. overseas orgr'ltlizrLtioll wOllld in hn,'g~ m,msurc be detm'ltllned hvfiye decisioI1s 011 sllbsldh\.x;y iE$UeS = (1) i:>toccdure5 to IJe 'U$ed for re'·t~ruitin~ and Hppoir:t,ing OV.(~l·SNlS l)erS~)l1r,Hl! t~nd the pay all(l allowll,l1C~Sto b~ grnm them; (2) th~ hlle of l'eSpOilS]bJhC;y' bet\veen the neW agency[tlld the l'1:ipr..::sentntiYe:$ over.sellS for tbe pro Cfl'U m ; (3) '\\'lmther thel'eprcsentMives ovetsNlf:\ for tlm Pl'Ogl'illIl sho1"lld c.onstitntc [t sepunl.temis:;lQl1. OJ.' be consolidMt'c;1 with ~xisting United. StrLtocs cliplo11,1ll,tl;()missions; (4) control over 9omml1nkations between tb~~ l1ew agency<nld Hie: ov~rfHHI,:1 r~pJ,'esfmttltrves :for th{;~ JJl'()gt.'l),lYl; ilncl (,J) th<:3' contr()l~ifrmy, to b~ oxerre(llJy the United States nmbrlSSndOl's OV(~l' the negotia,­tion.s undm'taken bet\yee.n t.ha oversellS l:epresEntntives f01' the. p:rOgtll.rr1and tlH~ govCl'mnents oJ :foreign conntries. . . ..

In order to attl:act q1.l(\1ified perlo(}1Hlel from the husiness v;odd forthe {)V~1'gel18 I)perati(JJl;'i~ it. is chiimed thnt tbe heod o:f tIle lH'i\~';" agenc'J:shouhl bt} fre~ to E\ngr..ge tt st·aiI \vith the. necesslwy qunlificntioDs ",',Tith­out, being pIHlulJr~ re~tl'ict~(i by regu1n~ions; gOYI~Tning nIJPoj~ltm~n!$:llld pay of FOl'e.lgn I::)ervlce l'eSel:VQ; othecl's. On the oi;h~t §IdQ It. 13llrguQcHhnt to lIS!'; l')U('11 reerllitTnent n.nd flppol11ttmmt p1'ocodtll'($ 'with­out l-eglU'd to those. llsed by the DeIJartment of State and t.o provide.g;l:ell(et pity fIDel pl'illih'ge:s for th~ spednl perS()lllld than thel!'m:cignService oHkcl'S nl'C no\y r€(~eiving would be d isruptiv\!' of, fiJ1il demQl'nl=iZll;g t(~, the existil1g' ~::affs ~)f Almn'icnn mis:ion$l\pro~l(!. ,

SpeC1ull'epl'QS~utatlves for tIw· program 111 the Indn'lcltHtlcountrles(;Ot~ld rept1l.."t eitlHlt directly to the heEtd d the new l1genc.~y (Jl' to himthrough the nmbn.ssttdol' 01' the Department of State, Un1t.y of ~\U­thority ~nd administratioll demands, it,1S llJ'gucd; that thefipeciall'ep~l'csentatwes should report. to the heud 01 the l1~W agency. On t.he otherhand, it is ft.rgnec1 that l'l1l1t!ss these repJ:esentativl;s r~portec1 thl"01.lghtIle umbassa.dm.·, there would be bound to be lfLck of cool'<Hn::tt.ion and

14 EutWP.EJAX RECOYERY 1(!ROGRAM

even conftic.ts be.t.weelt the n!llbf:l~Sfid(}rand t.he specinll'epresenttltlYesrh.) the detriment of United States interests and objectives,

Tho £ll'gmnCl1t ill ra:vOl' of maintn:inillg it special mi!':'sion for th~}11'ograrn in (~~ch count.ry is that the orgunizatirnl must pl'eserre U.s ownidentity for efHdellc:y 1afitt,LI1.2; its wot'k in indivichml ,~otmtl'ie8 intothc\ I1et,,,ork of o})eratiol1s l111aet the ptogmm. Bnt it is also pointedout on ale Dther side tJmt if this mi:ssiOll wete c0f1501idilt,f~d with t,he€'lubassies, cel't,rdn adv~mtllges wotlld he obtaJl1ed from doser T(~lfltion.sbetween the ~tfLffaand Jrom t.Ile joint use of 5erviees a11(1 facilities, Ah1id(ll~ ground betwBen the twr:> hilS been silggesh3d in providing thatthe b~:i(l of the new rtgeucy org;:mizntion in ~nch individual cQiintl's,~Yen if thB orgrtniz:Hfoll is tL $~pal'nl:e ~nlssion,!;}l(jnlc1 }l,fl,V.B di~e(:t nc~e~'Jito the ilmbus~~ldol'as an ef:'E;entmll'(~qU1rcrnel1tIn dllplIeat,mg HI the fieldthe S~lJ€guat"ds thr\t ,\youldbe estllblished in theUnitEKl Sttll:(}f). topl'O':'teet foreign-polio)' ohjectives. The n:lnbassrrdOl.' (111 Ius part shoulCl hI'}informed 01 nIl uctiviti~s of thernissiou.

..t\n acute question is raised) hQwcye,t, T~g[l]'(ling Hle control of COl11­~l11.nlic.atiQ~]s he~'lYften thel'ep),'es~nt.[ltives in tl1e (ieh~ ~m~l the Ilew agencym the Umted States. On the ant'" ]wnd j CO[lln:nmlC:ltlons bet.'iYeen thetwo couM. tukf\ pluce ,vlthout any pl'ovlsic.n that t.he IlmbllSSDJ::k}l' orthe Department of S~['I.t(j be infOJ:rned,. On th.0 other hand~ all SUell(':f>llllllUnicaticms could be subjeet t<) the complete cOlltl'ol (If the. ml1-bfl.ssa4m: find the Dcpa.l'tuleui:;of St.nt.e. Again a, middlegr01U!d NmthilS beell sugge~ted ,YQuld be that or .the ~LInbasgfl,d(~Fh~Yi])g Il,ccess ttl,rdl '30U1h111llIcaholl~ betweert the ,specmll:epresentatIvc In. Europe nJ.: ...,the ]l~W ug~n(~y in ~'lH.\ United St.at.(~s. This pl'O<~edm~ewould11Ot~ li-',

is claimed, p:t'eventtheEB represEmtl1,tivesfl:om conmnmkating directlywith the, hQad of the new agency but; t.he [I,mbassador would JmvG tllBright to cornment und, if nECe~'3SII'Y, reg~8tel:' objectioll.., from thestrim.lpo511t oj: fOl'cign polic.y be:rOI'u fIction wilstaken~

..,Negotintiol1l': and discussions bet:wE!cn tht;l sPl9cin:1 repl'e.'lel1Tntives 101'the progl'Jlm [\,nd the :foreign governrl1ents is it IJroblem sirnila:l' to tIm~bove. ~It has b.een i\rITnecl. tI)i1,tsunh l}egQtintion~ should not be sub­Ject, to the control of the aml)llssndoJ: S1l1CB Qpe:rntmg pl'obJems would}Je for tlH) rnO$t pu.rt, involved, ,.t\g".Jnst tbis, howe-yc-r, it is cJaime.(l1lIat it is diJllcult to distinguish in .1rnch dir=CllSsiQ118 lmd negot,lationsbetween policy and te(:hnic~l matters, A compx'olnise bet'....een thesetwo vi~ws I:H'1.s lJeen, sn~ge.,sted by giving t9 fl}e rel?~'csentatlves or ,thene·w il.genc.J the ant.11ol'1Lv to conduct.ne,Q;obatlOns- WIth l'eptesentatlvesof it foreign gQvernment:",rhile keepil1gtJle COllrse of :negotlations sub­ject to comment flnd objection by the 11.l11bassador :18 tIie, chief l:epre-seutntive o:f the UnIted Stat.es Government inth[Ll~cCli1ntry. .

2. Btat'rHi and ·rt~8p(m8{Ml#i.e8a/Me ohief 1'f~J}f>e.~·O'fl..t{l;tl·v('. in EU''I'Ol;eThere appNll'S to I:J~ gepel'al agreement thfJ,t. the chie·f represeJ!tative

should Imve n.mbassudol'loJ l'ffiik :l.1lcl that. he should bf~ u-c.credlted toany continuing European Ol'gnnizatIon for administering aiel toElir(Jpe. and possibly be the United Stutes representrl.tilll5 on the United:NIltions EconQrnic Comm-issian £01' EUI'(lpe. The questions :temElin ofthe fJ.mctions to be pe.rfolmed and wh(',ther the c·hiet representativew<mld be mrHle responsible to tJtB administrator of the new ngenc:;", totile President, or to the Secretary of State. The b\70 qUl;;stiollS am

15

I

I

interrelated, but it is argued that wlmtevcrthe line of responsibility,in the interest 4)f fle:¥ibffity of acbniuistl'utkl1l) th~ :fllnctionB and re­spotlsibilitif'E .of thf?: chief )'epresento.t,i \'1:1 should not. be too closelyde~e~l by ~e~s~ativeel1!~tn1ent. On tha (}th~:t side~ it is ~rgucd thatexplICIt legu;1u.t1vel));OVlBlons $hould bOlUade on tJJ.ese pomts be.C~lU8e

of the importance. of the position amI the heavy responsibilities thatmight 00 IDYolved. .

rhe principal point ltt iSSl1B itl l'eg(~.rd t,o Jhe funcHonsof tbe chiefl~pl'f-'_:;~ntat.ivelsthe eXl:.e.n.t to which he will have the power to direct.the operations of t.he special l.'epl'es('.ntath'cs £01' the progl'u,m in dIeindividm\l ?otlll~l'ies. r~ ~8 nrgued that. 1)12, sho!lld he gh~~n consi.d~l'­able poweE' 111tIllS l"cspeet, III order to pl'OYlde nioeal pC)lllt of adn:lllllS~trat~\'"e nllth(Jl'itJ in Ellr,opc. AgaiDst. this the lU"f,tument is made t1uttIt lmght. cntl1ctoss the.lmes or anthority he-tweep the Imud ~f the newagency and the sp~cial ~'epr~s~.nt£lth"'csin individlUll c,ount'rie,<; ns wellas confuse the relutio;ns between the n@w ngenoy Ilnd the Depal'tmentoi Stnte,H is cl:tirued t'hnt 1n view of the rnlH~.l·ellt clifficultv of dl~cicl­

ing ~Jef{)rchaudthefelntii'€; tnt~l'it;sl):f th,ese nlternatives; th~ IuncUOllso£ t.-he... chic.,f. rG1Jresentu.ti\:e.shoul~d no." t. bt,'J. c1Q8~,Y ..<1efi.l1ed by].c.f!i.i.slation:but left to be worked out m tIle hght of f;-Xp~l'ml1ce.although the neces-sity of giving him some cool'Cli:mit'ltig:fl1iictioll ShQtlld be £eco;gnized,

SillM the i~l1nct.ioD.3 of the l'epreSE11itative 'would illli.ny event inV(~lYe11im in £oreign-p6liey quest.ions atu high le,Yel~ an !'ll'g"muent. lul,s be('.lladv~ncedc for ma~ng ?im. responsi1:~ledlJ:ectly to the; P resi,del1t. 'rlle,counteru:tgument m. fnvor of ma]nng. hun l'espomnble 4H'f~ctly a.n,dfinally to the hf!Hd of the new agency 1S based on the bellef tlutt thISwould cOJltl'ibt!t:e 't.o maximum unity in the. adlttlni.;;tl'atlQI1 of the pro~gram, both in the Unit.ed Sta~a llndnbroud.

PART 3. C(lKCli1J5IO~S

An examination of the issues lnvolvea ill the, cstnblishment ('If an'effective. Ql'ganlzMion foJ:' tJ1C tl,clmjnist.rntiOll of the European re­C.QY01'J' pl'ogl'mn, iu theligllt ox tUi o.ppl'aisal of t,he c0l11}Jlex natm."E', orthe proJJlem Rnd f),£ the. les~ons of recent cxpenence, 1011ds tis to the'Conclnsions stated heh)w. These ~onclusion8 relate to what ill our .judgment nl'e nU} majtli' reql.li:t~mellts for such all organization andsome ~f t.h~ m,ain lJrin~ipl~,s t.llI1t shoull1guide its establishmemt o..l1(l.opel.':.1.t.lOll. Axtention IS gIven only to tl1o::e L1SpeetB of cllQ pl'oblt;o,luwhich h001' directly on the administrati'r'e 'l;J.l'l'ungcments IQ.t' the Euro­pealil'BCOvery program now undct disclli;)siOJ,l.L(l1·/3uthm.. tt'{1d iJtat'UfJ of fA 1IC'W age'naY

The; ll).agnitnde. and 81?Bcinl cluttacter OI. the task to be pETlormadl'cquil'€ thri c.reation of a ll(}W anc1 sepanlte opel'o,tin cr agencJ. The fie..;f.iv-.ities invoh'·ed· in earryillg out the, progralll 'Vi'll? constitute, an im­pQrtfLllt seJ~n~e1tt of the l~rger arel1 o~ the c?ucluct of .Unite,d States:for~lgn r~r.'it:lOns, for wluch the. Pl'€:8lClent 18 rcspon~ilbl~ under t116COl1stitution, These nctivith~s will hflve 0, he~yy impact on the }Joli­aiM and operations o:fother depnrtmel1ts and agencies. that d.eal ,\yithdomest.ic ...fl'n.hsunder the direction of the Chief Execut.ive. Th~ne'Wagepcyc.ollId function. MTecHv~ly~t.her6:£ore,only if it were. to be made,an mtegml Iw.rt, of the I2xcr:ntl've btanchof the Govermncnt.

16 EunOPEAX nBCO\~~¥ PROGnA)~

To placo the llew ilgency ill the, Deval'tmont. or Sfate would lUi pose;upcm the S~cretaryof State responsibility:fol' a, wide l'fl11ge of.!lctivi­ties ill the eC(n1omic and business field. ROi,YCVC1\ because or the re~sponstbilities lodged in the Department of State 1vith respect to tll6':formulation and execution of foreign policies, it is essential thnt itsposition 1113 adequately safeguarded.

I-Ie.nr.~, fl. new Q,11c! separaro ugency shon.ld be, created in thesxt;:cutive htilllCh of the Govermmmt to serve M the £oco.l pointof the. ndmillistru.tkm of tbe progl'Ull1, ItShOllld iune.tion througheffecth'13 1Yorking relation,s with tho Depllrtnltmt. of Stf1t~ and thoot.her agencies o't the Grrrl;rnIrJeut which are deSCl,jbed below.

'2. A sin.qle ad1nin;1.,~f;rato'J' of Oabin.et (jtat'U.tJExperience hU:3 demonstratec1 tJlut'in an ope,rntion of such n1ag~

uitmle~ r.equiting speed of decision ~mcl 02e11tl':llizfl.tiQn of re':iponsibHityfor poJic.y, .jJ,. singl~ £tdminist.rntQr is 11101"6 satisfudory thun ~1. boardm,. a com:illit.tee.

For an efl'ec:tiv~ pel'fm'ffial1f2('l OT his £unctiolls, the !'Ldminist.ratOl"w!lI need to be given a sta,h1E,; th at wi}11)ut. him on II footing of equalit,ywIth t.he h,eads o~ tl~e other age1lC1e.5 an~ del?ft.ttme.nts. of the G?V­erUJll.e.llt wIth lV"hlCh It ,W1U be nCeCE;Sl1ry for him to develop effectlyeworking rela,tionships. N0 ~yste~ of. inteplgcrl(}~' cO{)i'tlination has'Vet been deVIsed tbat can escn,p{!; thu nece;:slt~, of hnal I.:tPpCllls to thePresident as the superior fLuth01:itv In tha event [rf nnl'eoollciled {lii­fet:etwes bet,vsen the. head::s 01 tlm"nge,ncie,s in:vol\ted. It is essential, .the.refol'~~ in this CfLSC to make. sure, that i.be administrllWl' will haveas direct an UCoCt::!8S to the. President ~i,S the, hen.ds of til(;, other nge.ndes-)'Vith whieh he ""ill ncec1 to coordinate his p,ctiviHes.' ..<

Henee, the J.'I,~sJ?{wlsibililies assigned to the n(lVi" agency and thepowel'S given to itshal1ld be vested in. a siIlglu u.dministrllt,OL' whoshotdd lJe upp{)inted by the Pef:sjd£mti ,yitJl. tho ftdvic0 llnd (;on,~

sent of tlle SenaLe, amI who should sel've at the pJ;'esidemesplcusul'e. Tlw rank or the ndmhlistrutot' 3hollId bo the equivalentof n, Cabil1~t OmCC1:~ find he ShOl1lt1 be l'~sponsihle only to theI)resident,.

S. Fann of the. agrJ,iW;1JThr;, form of ilIa new ~lgellcy must be SQch ns to prov~desnmcient

flexibIlity Qf sh.'uctUl~e and openltion and t{}attrtl,c~ QU~'8tl111dil1gP~l'­SOllfiBJ. If the Congress makes the necessnry authQl'lZl1tionfor eX('Jnp­tion Irom exi~t1ng regulations, this is pO$sible whet.heJ.'. t1~e for,m ofthe agency is cOl'pomte or nQncQrp{:n'a~G. 011. hfJlal~Ce, the. :nl}ncorvo~rute form iYould appear to be more 111 keepmg WIth the suggestedposition o£the l1ewiIge.nc:y in th{9 executive bl'a:nch of the GOYCrnmellt01'1 a plane WitJI Cabhiet (1cpartments. .

lienee, tbe 11(>W agency SllOUld have a .noncorpol'a.te form, but:the: administrator sfioulcl be €:t81l1pted from exist.1.l1g limitK'tt.ionson sttln.ties for a lin::Med nu.mh~r of his personnel; 0111:181' diemcompensatiolll111d travel allowances; and, OS ne.cessary, on makingcontmd:s uncI 011 the eX!Jr.mclitme of Gover.:runent ftmds. Theudmini~t.l'atm' shQuldmil,intain an adequate s~vsttJm of Mcounting

EUROPEAN RECOVERY PTIDGnA~f 11

und ~ontl'ol, subject to posHmrlit by the General ACColmtingOilice in Hf'cQrdul'lCe "ith comll1eL'cial pl'u.ctice3.

,7, A(z.~:i-sor~ll boilie.'J and· publiaittlBcc['tUse"of the l'flnge of pi:~b]ellls ilt'Vc)lv(~d and the ftl,l:~l'Bil(:lting

conserim',Uccs of Ule progl'llm: IHlblk, confidence in the WJdetl;akingwill bp, incl'E',f1,S("d. if provision )S lfJl:\.de fol' the {ldJli.inist,w,toJ: to lUlvet,ha benefit; through c~msultaHon l;l.nd advice, of the kl1o·,vIedge and,experience of pl'ivd~ (\Jtizeus. Fol,," th~ iStrrne rea~,otl., the. fullest practi~c~tble 1l1easute of publicity 8houId be given to the Opel'<ltiolls underthe program.

Herwe, there shoulcl be crentcd an advisor), committee or board,eomposed of ~trIillellt ddzeus of broad ti,n,cfvu':ried experieJH~e~ tobe ill)!?ointe:d IJV the Pre~ichmt.. It. shoul\l be J~1ade clell:l' .t.hat~,he:commlttBlt or Exiu,I'd should not be vested wlth ac1UUlm;.trabvBresponsibility; bilt should only be ach,isol":r to the adm,inistratol';\\'ho should nul~ uS 5ts chu5xrno.u. The u([rrtlnlsh'cttoJ: SlH>111d bei~uthol'ized ~,o set. til? speeial 11dvisory bi!cUe5 and to. cou':mlt with:representatlVl2s of llldustrv, htb{tI,~, ag!:lc;u1t.ur€~ and vnt,h otherprivate citizens. Pel'iodl()"reports should be :made by the P.teSt:",dent to thfl CongX'ess concern5ng t.h.e [J;,ct.ivitles unde!.' the progru,lll•.

5. Relati.f)"H$ ?,plth athm' aS7enfJl.e8In admil1istl:~ring the IJl'ogl'ftID, it is importLlnt t.o i),void .a SlJlit

~l'ri)ngerneDt that wOll.ldcenhr authority for 'p?~i~y dcte1'll1inat~on~l\ ohe depaI'tmE:llt 01' ngm~(w l1ucl 'Vest respouBlblhLtC$ for e~ec,ut.lon

111 £lnother agency, .EXpel'lC]J{,eB liftS amply clmll0nstl'ated the llnpl'i1c",ticn,bility or acl11eYillg the ncre:::,sfl,ry l.mit,J' of directioll lllltl adrnlll-'istmtion by that rnethod, Such. n (~onec,pt. of administ1:ation is MStm~Hally negative or at Inost. pCll'll1issivec in thut it soc-s lfU\.n}! limitllt.1011S:b.ut offers :few (~irectjolls Tm: (Jo;:;i.t.ive. [lCtiOI1. In. this ,cllSC,,it is es~n­bnl to pInes prmmrv rl'spol1s1blht.y fO!' the. fOJ'mu1ntlOTl ,of opBrntmg'poJieil\s filld pl'ogrnins c.Iea.rly upon the ofiicial who also ha.s the ),'e­spollsitdJity for seeing' to theft e::u~cllti()n. Only by such c()n{'etltra~

Hon of resl)onsibilit'Jl' "Cft!) thot\!, be ilde(lU~\te cOGI~\.lb)at.iDn of the com­ple.x cOllsideri,lti 011S involved fLltd the. sIJ.'()1ig SPOHMl'ship. tlutt willbe. necessary if the Pl'o~v[un l'cquLl'emC'uts Eu'e to l'e(,Biv(~ t.he full l'eeog~nitiOll Wh1C11 tlwir Hlent WB.l'l',mts. -

Hmwe, Uw n.dmin~stl'at.or~stlbjed to the oYer-aU l1uthm'ity ofthe Pl·eskknt,~. should b€-) l'cspol1sibl;.'l I<H' formt11atin~ progrrtll1s,det.el'tnining Jlnal1cinl and material l'eqUll'ements l incl, in con~sllltr~tio]1 \vith the depal'tmG-!lts fmd agencieS' concerned, instldng'the flllhIlmenI. of tlw::e l'eqml'ements.

In obtaining fi.110C:ft.i011S ofscill"Ce 1111lterials abel S(ll'Vices, the:adll11nist:.rator sholl.Td proceed in ~o11Bulta.tion wit.h tlle c1cpf1,rt~m€mts Qr ~l.gf;mcie..", tlmti a.re responsible for ~ollS{',rvil~g supplies...The procedlU'es or sE8eml m'rungeulel1ts reqUIred for mtel'fLgencycOllsultll.tion and assistance in the alJoclltioll proce,ss shotllc1 bePl'~sc];'ibed :fronl tim~ to t.ime by tIle. J t l'e.<>3.denc, lH the.J-ightofe;;:pe.nence. T.hese proce~lures:shouk~ COVel' both ~lOinest.h} (Ll]oe.tJ,,~hOllS and fOl'eIgn anocntlOns~ U1cIudmg <;.ommm'clal exports~ an,dshQuld be c~u'ded out wi.thin tIle £l'uJnewol'k {If the existin.g

'18 EURO:l?EAN rmCOVBi:l:Y l?'ROGEAM

arrOllgem.ent-s I01' tile, ad.minisb:ation of export und othel' c(m~

tl'ols hlVolvcaill the exc<:mtioll 9£ tht'!ol'n·ograiII. III case agTeGl1i.(mtcanIlOt, b;;>. l'~ncbed with reslJeet to the nllOCfdlO1J of scarCe mutE~1:in.lS1tJlO matter would of (;OUl'S~ ]l,n~e to lJQ. reforted to the Preaidellt.

Tho,;. ndministratm' should hu.vethe responsilJilit3' f<)r det-et'1llin- .ing \vljllt, se,rvlcl;\S of procul'eme.llt, st,ora.ge, transportation. orot·h~l' lmmlling' Lite nBCes.S1U'y to iri.sure. tlolive.rv of 3upplie's in(;onfo:rrni~y with appl'ovedprQgrau1sl anel. sh?ul'cl be, t'espollsiblefor l'iorkmg out ltrrangemcllts Jot' the e:ffectrVt; perfOl'mnDC(l atthesi3ser,rice.s, Henee,he should dete.l;minc \vJ1en sU1Jplies areto be purchused thrQugh nrivl).te trade f"i.ciliti~sand wlitm puhlicprQCUl'elllCIID is nec(':ss,tu'Y.- He should ha.ve authorit), to ent.ei' intoarrELn~ernents with other agendes £{u' the Iltilizat.ion of theirIl.tcilith:ls or petso~U1el ill, cUl'l'ylng out tllGse :functioll","" on sucht,crms as Jua.ybe mntually agl'e€d up()n~ to pr~vent c1l1plic:.a.tiollof fne:iHties, to insure effident pel'fQrrnanc.e of the ne.cesSfil";Y pro.,eu;remellt alld handling sel'\71Q0s, Ilnd to protf:ct his position. ast.he offidfllpl'imariJy respopsibhdol' (j:-::ecution Qf the pt~~rQ1tl.

The control and l:dloe~ttlOn of :t\lllds~ under the pr(H'ISlOU5 ofthe. legislntio!l~ should TJl~ the l'(\spollsibilit.y of thE'! I'l'esiclent. •

,rIlle finfln~HI1 arrangemonts to be U5~d should be UH~ :reSpODsI­1Jility of the adm.inistrator, luconsultttHoll with the Nath:lllulAdyisory CI)t1l1cil 011 blternatiollnl Monet.nl'Y und Binunclal PJ'oh­Iems, If dec.isiou is made to !Ji:!:I:l:l'lit. the E~qJQrt~Ill1po....t Brmkto Ret US tho nd1l1jnistrRtm'~s agf'nt ill .[trranging lOfLlls to thepUl,'t,icipating CQUilt.I,·.iesl its antlvn'ity should be uccol'clinglyUm~'lH:le(t .

'fhe P:l.'osic1eut ShOllld be. given authority t,o ttElmd:er to the l1ewageney the, ad.n~inis.tl'aH(Jn 0-£ any etU'rent. pl'ogrftnlg involvingUl11tecl St.,tes fcreign nid to partIcipating countdcs.. The ques­tion. (II ,vhether the ~ulmil1istratio:ll o:E~my future :foreign-aidprograms should bB made th(~, res.ponslbility oJ the Hew n.gencyshould bCl left fot <1etormination by the G0l1g1'ess as the occasionarises.

fJ. Tlw 7JOflition of Me J)ej)ar!;m.ent of StateBeen-use of tIle l:'Bsponsibilitir;.,i:; vested in the Deparb11en~of8ta.te.

in connection with the. conduct, or foreign l.'ehttions j Ule position ofthis Departlli.ent in th® [tdm.iIli$t~tlltion oft-he Ellropean recovery PI'O­grmn is obviously' of paramount imporh:mc0. The Depattm~11t isvitally cf'llcemecl "with n~l opel'a.t~{)n8 lIlH;ler tl;o, pl'ogram ~hat UUl.yn!feet tIlls country's fm:elgn relatlOJ1S and POlICIes. OC{mSlOll...~ mayurise in wIdell 1). ehoIce· may need tab£! luadl}'beh'Fcml decisions lmdot;'the pl'ogtl1IDamt 1Tloi'egen~ru.l fOl'cign-]Jol.icy decisions.. A.6:aI1ue~InBnr.s, tiH~refol'e. arB. nece.ssurv tmc1el" which the fHhninistrntol' a)"1c1the Seel'(lfal'.y of'ShLte would ~o cOIl~er,t their. respediv(~ act.i,dties ust.o str0ngthe]~ u.mlmulm more effectIve the cQn~u(;t of Lhe CO\l.utl',Y's ,foreign telatlQl1s. .. .

IIence~ while. the Pt'esident n10n(\ should. henuJhorized to €uteriuto fOl'mal, ngteements ,,:ith !01"eign govel:nme~lts~ withintheBcol)e presctlbed by the leglslaboll, and to dat~e.t'l:nU1e phe methodsand l)l'ocedul'~ for t.he conduct of t11.~ negohatlons lllvolved) be

EvROF~AN RECOVERY ~ROGRA~l

shoulcl1 in practice, ('hl)r~e the Sgcl'~hn'y o·f Stats "\vlth l'c,sponsi Q

bil:ity, under his flUthol.'itJ, 101' the conduct ryr negotia,tiolls fot' tl1~

concl':ls1on of initial1Jasic llgl'ee11l.mlt.s und ror snbscctuent m()c1ifL~catiolls of them, with SL1ch pllTt.idpatioll by the mhnhlifl.tl'n,tm: asthe latter may. "\vith the Pl'csidl;:nl's ftPP1"ovli.l~ d~em neeessat"y.Simihwly, th.e 'Pl'esiclent should chnrgfl the fu1roini::::.tratol' with1'0sponsihllity, lUi.der his nltthorit:;Y', lor t11l~ cOl1Clnct of :ru~gotia~Hail:'; with iOl~elgtl gove:rnmellts relative to ope:l'ut1ous nnder theIH:,ogr£ltrl, with such pu't'ticipntion by thf\ See!.'et.ar:y ox State 115 thelaUe,}' tnU,y j wlth Uui appl',f.lVltl ()f thB Pr0sic1e.nt, 'demn nec.essnry.

'The ndminiBtmtOl' should k€ep Lhe SG!crehtry of Stille fully.111d Cll1'1:{!.utly infotl1.H:d 011 ~1l l1dlml (ll' Pl'03pedhrB activitiesof the )lOW agency; n,i1d, cOl1l"el'sdy, the Seel'£tnrs QJ Sklte.shonld k~Qp the adm.il1httfltor lully l1I1d cUl'l'€mtly inrotm.ed onpm:til1ent depatbnej:ltnl pplidtlS and c1e;v~l(lpn)Emts. To thisend IJffccthte working relatiolls shouhl be, established betweenthe IHl..V agl;ll1cy and 'the Depfll'tJl1B11t of St[\H~, . I

The See:roetal'Y of State slwuld hR'\ie, the uuthorit:''V to request'.the flclnlcil1ist.mior for ltltoruln.tkm on a.ny m~)tte1'8' thaLin hisjudgr.l1ent hnYt) [m imporbnt bearing' on the condud of foreignpoHcy.lIe should ha\'1) the right, to -ent.e.r objecti(ln~, to any Pl'()~

IJosed action bv the ndministrato1.;j to n:u1ke l}I"OpQsals to t.he i1d~ministratdl'; ~nld to cnlll.lttf:ntion to tbe COllse.qUt3DcCEl of :£~",ilureto net.. In the ef\Se 01 objed,ioll to ccmt()mphJed :1.ction. suchflction should be deTenccl nntil t]lt; differences of ,,-lew atc fld~fusted by commltation between the Secretn,l'Y of Stut€: aml theadministrc1tdt"l 01' by clee1sion ()f 111(': PreshlCl~lt. The: :sunm pi'on­es.'3 or udjustm~nt should ll.pply to oth~..I.' differences of 'View.

7. Ot'6'l'.f3eilS m'[/ani2m~'i()n·in inrU1ddu,aZ oonnt·.,.ies~n f?1'Ir1U1a.tin~: eU1.'r3d!~g. Oll~; and reyj~winp':_ pJ,'ogram~~ :represen·,

t:1tl011 m ench of the pal'b(npf-ltll1g cotlUtl'WS mIl be. I'i29.'I.l1l'ed. Sud!represGntat,ivcs must hftVe. special comp(~tence. ior dellling with t.hemony t~cl1J1iCl1.l u;,;peets of the n~co\"el'Y program In tl\.eir work theywill- necfrS;:fl:dIJ be in int5mnJe cont(icf with ll111tW departfnents {)l'the pardcipatfng gO\"emments,lHlc1 the heua of the group will (111occlisionhave to cDrrt(A' with the, highest offit;ials. 'l~here is need,thererOl'e, for effectivE! 'reladcH:is lvith the regular e.r.nDnsBie8 unclll;.gR~tio11s (If the Un.it..ed Stutes in tl~BseCDUlltrie-.<;.

·He.nec; the speeinl relJ:L'li:'senf.iltives fo!' the ]1rogrn.tn in e'1.ch hltli~vldnal country should be ol;ganized illtO it special mls"l.on, th!?; headtJf 'which ;;h.0111d be made n memb"ot' of thel'eg-tl'hn' mJssioJl hI. thatcountry :;md should IH1'~C a ruuk second onlv to thnt (If the e11ier of't11C regu1nrrliplplllnticrnissil'Jllinthat. COt(ll(l'Y, The hE':ld 0'1 tho,spedrrl mission should hcn~8ponsib]e, to t]1t2,tl.clJj)il1.1str:\tor~hutshould keep the iunbass[\cdol' or minister cUl'rently audfully in~

fqrmed Con aU h~s nctjY~HeBl;. [\{itua1 (}1' clOntemplfLted: "J:ht, chie.ror ,the. i'f~guhu: chpl\imatJo lillB~ion slHH11t11mv€l the :l'lght to enterObJectIOns tot:ontelnplatecl flCT1tJllS, to Jrltlke prl)p05als to thl.? h(1['[,dof ,thef!pedal rniss]()u': Hnd. to c:.un~ [Ltt.~nt5on.h) tll{). eOIl$eqll!OllHX'~ offl'ulul'e to act. In the case elf oh1ec,tlOu to n cOJJlempl,ltQc1 action",

20

tho proposed "cHon sh.ould be defGrred pen,ding reference of thelllfl.ttCl' to 'Wl1sbinb>i:Qil fo1' detel'minl1tiol1. The ht3ad of the specialmission should befn;c to COlllllllmicft.te dh'ectlv with the ~ldmillis­

tr[l,tor~ 'with the hends of the other special mi~siol1s) undwith thespedfill'epreiie,ntntiYe refenecl to belo\\!, , " '

For the performllllce of his ftmctiQns 11broad, the [lclministi"RtOl.;shoulr:l hn.ve.. the authority to re,cruit thE} nctJessarypr;,l'sol111eL Th!:)pay o.nd 'al.1owllnCQ-S of "tho representatives lor the progen:tX!: inindividual cotmtries should cOl'l:eil!1ond to tll03Q of FOl'ei!'11 SBl'V~3ee. reserve oflilwrs 'who might be performing Bhnilar tasl.;:s, withthe ul1derst~uldillgt.hat, in the eyeilt that it is impossible to obta.inqualified IJe,rsol1uel on' '~hese term.s for c:ertaill of the ne.c.essa.rypositions, the President ~lwuld Imve. t.he power to exempt thesepositiolls from existinO' limitations. 'The nmninistl'otOl; shouldn.R'Ye the, I'ight, with the approval of the Secrehtry of Sk\te-. torecruit personnel through the f~\cmtiesof the FOl'eigll &x'vice. butshould not be l'estl'iclcd solely to that. method. '

[> R' t ' " ",. 't' '" :/' " 't'·, ' t'Q. ".,6prese·t/.;atzo·n tn ol'gamBC!, ·'lOnE,' of p(l1'o./wzpa, ,vng co'Un i'l1..e.sTho SUC(;(!SS of t.he whole European t€(j,(i\'(~i'Y prog-rnm\yill clepencl

in lal'gc In(>(tSllre upon the effective (mOp(!l'~ltiQn ftIlI0Jlg the plli'tidpl\t~in.g count.ries-which they IUli'hl tlHHnse]ves pledged. To achieve. thisPUl'pose it, will b{Jnecessary :rOL' UleEe countries Eo (Je.yclop eontinuiuA':orgrmiziltions thr~ughwhich ':':-0opei.'fttlve :pluns and projects can bemnde e.lf(Jcdve, lll'ovision should t11e1'(:£01'O be: made< fm: l'opresenh'l,­Han of [-tv:J United Stutes in ~uch org~mization:5 :18 li1fty be esta,hlishccl

}~(},n{:e, ther0 should be. IJppointecl by ,the Presldfmt.,.wiUl thendvH~e and consent of the Senat.e, a specml t't;>preBentntlVe of theUnited Sta,(es GOYC}'nril€Fl; \'Vith a l:ailk ~qllival<!nt to that e,f a~larnb:LSE.:.tc1or. The fmlchQl1s of thIs ofliei:l1 should relate Pl'l­m:u.'ily to llmt.Cl2l'S whid\ require jQLllt negotia ti(HJ. with two 01'niore ~ pEl.l'ticiptlting ~mmtt'ies and c:nmw['. th~re£ol'e be handled'through tha' repi'(1SBntatives esttl.b1ishe<1 1n bldiridna1 countries•.1Iisiilstrndiol1s ou. SUdl 'mfttters shollid be £oxn1l.llated ill COll­f(lr1nity with. the g(mel"fll irrr:inlgemeuts eghlbli!3hecl in the UnitedSJia.tes for the., ac1mlni,sb>a ti.on of th~ Pl'O~l'fl1l1 nnd its integl'fltiQ:rtWIth the foreIgn polley of tJle 1Jmted Shttes. He sbould. ke(!pthe ndl~llnist.l':'dm'~.tIle S€·c1'eary of Stflt.e~ and tho hml~s of thaembrrssles I1nd legntlOllS conce.rne<l fully and currently, Htfotmec1of his activities. He sbould cnl1sult ,vjtb the heads of'the specialDJ,issioIl!3 and the chiefs of the :regu1:u' lniEsions~ meet with tJ.muU{il l1eCeSS~ll'Y~ and be entitled to reeeive their assist,ance.

o