I wish to thank the committee for the opportunity of testifying on Reorganization Plan No. 7. Under the able leadership of President Eisenhower, as expressed in this plan, there is proposed a more efficient organization which will permit a more successful and effective conduct of American foreign policy.

The President, in his message covering Reorganization Plans 7 and 8, has clearly expressed the importance of setting up more orderly organizational arrangements to develop and carry out United States foreign policy. He said:

We have come to know that national security entails mutual security with other free nations. And we have come to know that their freedom in turn depends heavily upon our strength and the wisdom with which we use it.

To meet the challenge of this responsibility effectively--to convert earnest intent into constructive fact-we must achieve the most efficient and cohesive possible organization for the conduct of our foreign affairs. Slackness, confusion, blurred authority, and clouded responsibility-any of these can defeat the noblest purposes of any foreign policy.

Mr. Chairman, I would like to use the limited time at my disposal to stress the importance and advantages of this plan from the point of view of efficient operations and good working relationships among the several agencies necessarily concerned.

In discussing these points I have in mind the whole of the President's reorganization package as it affects foreign economic operations that is Executive Order 10458 and the related executive actions, as well as Reorganization Plan 7. As Mr. Hughes has emphasized, the plan is the keystone of this reorganization structure.

As I see it, the new pattern of organization which will come out of the reorganization plan and the accompanying Presidential actions will have three great advantages:

One. It will more clearly fix responsibilities among the various agencies involved.

Two. It will permit better coordination of programs in the foreign economic field, thereby increasing their effectiveness, individually and in total.

Three. It will permit substantial improvements in efficiency and economy in the operation of the program.

Let me deal briefly with each of these points in turn.

First, as to clarity in agency relationships, the previous situation was unnecessarily confusing.

Take the key matter of relationships between the Director for Mutual Security and the Secretary of State. By tradition, the Secretary of State is, and should be, the sole repository of authority, under the President, for all matters of foreign policy as such. But under the Mutual Security Act of 1951 the Director for Mutual Security was specifically made a part of the Executive Office of the President. Whatever the reasons which dictated these arrangements in the past, a continuation of them under present circumstances is clearly unnecessary and undesirable.

There has also been the question of the relationships between the Director for Mutual Security and the head of the Mutual Security Agency. They were, of course, the same person. I have heard the wise saying, "Physician, heal thyself." This apparently was a case of "Coordinator, coordinate thyself." This dual role tended to put me in the difficult position of having, in some cases, to serve as both an advocate for one side of an issue and a judge.

The present plan eliminates a major portion of this problem and makes the whole set of relationships a good deal clearer than they were before. I think we can rely on this clear definition of responsibilities and on the good will and good sense of the parties concerned to avoid the remaining theoretically possible difficulties.

The second advantage of the new setup, as I have said, will be to? permit full operating coordination of the various foreign-economic operations in which the United States participates. The United States, as you know, is now operating bilateral assistance programs with our allies under three different major, and several different special, sets of legislative authority.

In addition, we are participating in a number of aid programs operated by the United Nations and other international organizations. The Congress wisely gave the Director for Mutual Security under the President central control of the funds involved and coordinating authority over all of these programs. But direct operating authority ran to only two of the programs-the MSA operations in Europe and in four countries in Southeast Asia. In the case of the TCA program this authority ran through the Secretary of State to a statutory administrator of technical cooperation and in the case of Latin America-further through a statutory Board and a President of the Institute for Inter-American Affairs.

After running through all these relay stations it is no wonder that the current of authority was somewhat weak and erratic by the time it got to where it was going.

Given this situation, and the differing history and backgrounds of the various programs it is also no wonder that, when I became Director I found differences in methods of operating and in contracting for the services of other agencies, situations of competition for technicians and services and other unjustifiable administrative confusions.

Even more significant were differences in program standards and methods. In most cases these were dictated by real differences in the situations the programs were designed to meet. In others, however, they were accidental, arising simply because the particular project was administered by one agency instead of another.

Thus, for example, practically no supplies or equipment can be provided to a project under the U. N. technical-assistance program; under TCA the possibilities are broader but still limited; under MSA the full needs of a project can be met if necessity is established. On the other hand, the situation is reversed in terms of the amount of local contributions required for a project. Here U. N. is the least demanding, TCA insists on a larger contribution, and MSA commonly insists that the full costs of a project be paid in local currency by the recipient country.

It is little wonder that countries being aided felt somewhat confused. The situation prevailed where, if they wished, other countries could "shop around."

By putting management of United States operations in all of these programs under one operating agency, I am confident that we can not only correct these accidental discrepancies but achieve a positive interchange of experience and coordination of programs which will strengthen them individually and collectively.

We have a foreign-policy objective of a just peace with freedom and security which requires a variety of economic measures to support it.

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Depending on the situation, the required measures may be defense support or technical assistance or special economic aid. They may require direct United States operation or they may run best through a Ü. N. agency.

By utilizing all of these resources flexibly under unified direction— with, of course, full regard for the applicable legislative provisionsI am confident we can get a bigger return in terms of United States and free-world objectives for a smaller expenditure to the United States taxpayer.

With one agency responsible for United States foreign-assistance operations, a great deal of confusion of who is administering what will be clarified. Types and forms of assistance can be better balanced in relation to country needs and the defense of the free world.

Directly on the matter of administrative efficiency, I am certain. that opportunities for increased economy and effectiveness under the new setup will be obvious to the committee. As I have pointed out, one now has to go through four layers of overhead before you come to the man doing the work on Latin American technical assistance, for an example. There are duplications of staff and technical services which can be eliminated with significant savings in personnel and other administrative expenditures.

At this point let me emphasize again that all these programs and operations which I have discussed as the responsibility of the Director of the Foreign Operations Administration will be planned and carried out under the direct supervision of the President and in conformance with United States foreign policy as determined by the Secretary of State, military policy formulated by the Secretary of Defense, and the Secretary of Treasury's judgment on monetary and fiscal policy. The participation of the Director of Foreign Operations in the sessions of the National Security Council, the Cabinet, the Munitions Allocation Committee, the National Advisory Council on International Monetary and Financial Problems, and the Defense Mobilization Board assures normal and regular awareness of overall policies and effective implementation of program decisions.

At the overseas country level all operations will be under the leadership and direction of the Ambassador. While the economic and technical staffs will communicate directly with the FOA headquarters, the Ambassador and the Secretary of State at all times will be able to assure achievement of a single United States objective.

The nature and scope of the United States programs and interests in each country will condition the size of the mission and will be considered on a country-to-country basis. In all countries, there will be integrated use of personnel to the greatest extent practicable.

The reorganization plan and related Executive actions also terminate the situation of four American ambassadors in Paris which has become a symbol of the proliferation and confusion into which the administration of our foreign affairs had grown. I am pleased to be able to report that, under the new arrangement decided upon and the instructions issued by the President, there will be only our regular Ambassador to France and one United States Ambassador to the international organizations-especially NATO and the OEEC-which have their headquarters in Paris.

Both of these men will be directly under and responsible to the Secretary of State. The representative to regional organizations will

be assisted by staffs provided by the Foreign Operations Administration as well as by the Department of State and the Department of Defense. The confusion which resulted from a regional office in Paris having control over the country missions in Europe has been eliminated and total staffs in the regional office are being substantially reduced.

One final point on which I should like to comment is the relation of this plan to the point 4 concept. All of us know that point 4 has become a symbol of hope in many areas of the world. It represents the desire of the American people to share with other people the benefits of our freedom and economic and social progress in order that they, too, may realize, through their own efforts, their human and material potential. It has served to identify United States cooperation and assistance. I can assure the committee that nothing in this reorganization is intended to change what this concept represents.

The internal organization of the proposed Foreign Operations Administration has not yet, of course, been finally determined, but it is my conviction that it should reflect integration of United States program and efficiency of United States operations.

In conclusion, I should like to stress again that these reorganization plans so relate responsibilities to provide for the maximum teamwork in executive-branch conduct of foreign affairs. As President Eisenhower has said:

Such teamwork is essential to our success in the conduct of foreign affairs and to the achievement thereby of a greater measure of peace, well-being, and freedom throughout the world.

Now, Mr. Chairman, I have just a few charts which I think focus up the organizational situation and, if that chart stand might be brought up a little closer to the chairman or to the committee, so that the chairman and others can see, I would like to, first, have passed around also, we have small copies the executive branch of the Government organization chart.

The committee clerk has them.

Will you pass those charts around, those copies, so that we can directly go into the administrative and organization problems and move that we are making?

Mr. BROWNSON. If we can suspend for just a minute, if you will, Mr. Secretary, until those charts are in the hands of the members, I think it will be very helpful.

Mr. STASSEN. Fine. They can be passed around, and we will get them in shape.

(The chart referred to together with other organizational charts appear on pp. 96–98.)

Now, there will be small copies handed out to you on these.

Mr. Chairman and members of the committee; the form of organization at the time the President asked me to become Director for Mutual Security-picking up, first, the executive branch of the Government, you have this dual situation: You will find the Director for Mutual Security in this circle here of the Executive Office of the President. It is right in this position-Director for Mutual Security-in other words, in the same group as the Director of the Bureau of the Budget, and listing the White House Office, and so forth.