MEMORANDUM

To: Mr. Henry A. Kissinger

SUBJECT: AMERICAN FOREIGN RELATIONS -- The Formulation and Conduct of Foreign Policy

It is a sunny August Saturday afternoon in New York. Along the great thoroughfare below my writing table, traffic moves in ordered quiet. The mainline of a giant railway system marks its being only by discreet gratings hidden behind clipped hedges. On the avenue above, escorted dogs, bright taxis and parked lines of automobiles along the zoned cliffs of restrained apartment and office monuments dedicated to meet the food, clothing, shelter and communication needs of a world population at a profit give the street its personality.

The air conditioner is turned off. It is noisy to my unaccustomed ears and besides the day is cool. So are the television and the radio. The melodious or strident or frenetic appeals to the eye and ear for the better beverage, the tastier tobacco and the gadget to be paid for later -- all are still. There is nothing to impede the marshalling of my thoughts -- except the news.

The news is not good. The President asked the national TV and radio networks for one-half hour last night to present his Secretary of State and have him report to an audience of 70 millions, larger than the expected vote in the forthcoming November elections, on the latest threat to world peace and to our own security. The Egyptian dictator, frustrated and angry at unsuccessful blackmail, repudiated international agreements

2

and cancelled the contracts that have survived three-quarters of a
century of conflict in operating the world's most travelled canal.
Like the robber barons of the Dark Ages on the Rhine, he would exact a
toll of whimsy from all who must pass that way. The issue involves the
essence of international relations. If there be those who feel the
United States interest is limited to the moral aspect of the crisis,
let them remember that the Panama Canal is also operated by a company
and Panamanian sovereignty was recognized in the original lease.
There the parallel stops but the issues transcend any national interest.

To return to the news. The ambassadorial members of the
NATO Council yesterday called on Iceland, a charter member of the
alliance, to withdraw its request for the removal of the NATO garrison
of American troops who man the island's air and communications installa-
tions and are its only defense. These installations were constructed
under the NATO authority and are an essential element of the NATO
security.

At the other end of the arc of NATO defense, yesterday the
Greek armed forces engaged in maneuvers from which their British and
Turkish allies were excluded by suicidal political differences in the
eastern Mediterranean.

To go on with the news; the German and Japanese, whose
return as world powers -- but with a public philosophy and restored
economy -- has been supported actively by the United States in its
search for an element of strength against an expanding Soviet imperialism;

3

they are not happy.

The Germans are sensitive to any international action they feel may have an effect on basic preoccupation with reunification. Within the day of the British invitation to attend a 24-hour conference on the Suez Canal, Adenauer, from his Black Forest retreat, asked why West Germany is invited as a maritime power rather than as the successor to the German government that was a guarantor of the 1888 International Agreement on freedom of transit of the canal.

The Japanese, now with their foreign minister negotiating a peace treaty in Moscow, yesterday were rebuffed by the Russians in their demand for the return of the Kuriles. These islands were awarded to the Soviet at the Yalta Conference. Japan whose population of 90 millions is dependent on imports of raw materials and exports of manufactures to give its people a minimum standard of living suffers an ever growing frustration. Because of its low cost economy, it is denied more and more access to the markets of the West. Even the United States with its overall interest in Japan as an element of strength in the Far East provides the Japanese mills with surplus American cotton -- but denounces in the clothing centers of the very states where the cotton is grown the sale of Japanese piece goods.

So the foreign news is not good. Nor was it yesterday. It may not be good tomorrow. And as an American I must look for the good in the not-so-good. For an American, whether natural-born or naturalized, is essentially optimistic. To seek the silver lining in any cloud however ominous is a basic element in our national

4

consciousness. For most of us it is the reason for our being in this
continent.

When the challenge of world peace is dramatic, it is
easier to mobilize American and world opinion to defend the peace.
With all of our media for mass communication, it is easy today to
develop in the United States a national opinion on any moral issue.
Again as an American I must advance the assumption that unless our
national leadership is competent to provide means to actively
implement the national consensus, that leadership is challenged. And
if responsible authority under the pressure of circumstance attempts
implementation by improvisation, the resulting confusion would undermine
not only the leadership but the instruments of implementation themselves.

When we review the events of the last decade since the end of
World War II, there must be noted a succession of improvisations to meet
unexpected situations. Out of that war came the recognition of two
great powers -- the United States and the Soviet Union -- and the
wreckage or diminished power potential of other states, enemy or friend,
who for a century after the Congress of Vienna had managed to maintain
world equilibrium and expanded an era of colonialism that enriched
Western Europe and sowed the seeds of rebellion in the minds of the
colored races.

The organization of the United Nations was based on the concept
of a world order where peace would be guaranteed by the unanimity
of great powers: the United States, the Soviet Union, the United
Kingdom, and such other powers they held at that time to be great --
France and China. The idea was appealing because only the great

5

powers could initiate a general war. Colonialism would be eliminated gradually by the emergence of new nationalities from under the wing of the Trusteeship Council and the International Court of Justice would adjudicate those questions disturbing the relations between states that could not be settled by the General Assembly of the United Nations.

Vision of a world order guaranteed by the unanimity of the great powers barely survived its conception. The instrument of Fate was Stalin whose suspicions recognized no friends, either at home or abroad, and whose ambitions brooked no competition. The United States had demobilized its tremendous military power and its supporting economy in response to popular outcry. This demand was based partly on the belief that the Russian allies would cooperate in the general effort to keep the peace and partly on the active work of those elements in our own population striving knowingly or ignorantly on behalf of Russia, who promoted this belief.

The United States, the United Kingdom and France, without effective power in being were preoccupied with the urgencies of restoring or reorganizing their economies disrupted by war and both reorganization of the psychology and economies of their late enemies under American or four-power military governments. They were unable to prevent Stalin from creating a band of Soviet controlled states reaching from the Baltic to the Black Seas nor were they able to forestall subversion of China.

6

They were alerted only when the United States became
aware of the extent of Communist infiltration of this country, in
elements in the working press, in the theater, the cinema, some
labor unions, the law and some sensitive areas in Government; and
in the international field, the Soviet attempt at the Berlin
Blockade, civil war in Greece and threats against the Turks. Working
behind the limits of violent nationalist prestige and rebellion
against colonialism, confusion was spread by Communist agents and
funds to many areas in Asia, Africa and in South America. Great
Britain and France did not escape attempts at Communist infiltration.
In effect, by 1947 it became apparent to the former allies of Russia
that they must reorganize and if necessary fight for their national
lives or succumb to the spreading slavery of Soviet dominion.

Efforts to meet the challenge need no retelling here.
The Truman Doctrine, The Marshall Plan, the Mutual Security Administration,
the International Cooperation Agency, the Berlin Blockade, the military aid to
Greece and Turkey, the United States support of the United Nation's
struggle to save Korea -- the guerilla wars in Indochina and Malaya --
these are some of the devices used by the United States and its allies
in NATO and SEATO to halt the Soviet expansion and to help invigorate
the economies of populations determined not to be doomed and to support
the new nations who strove within their means to reinforce their
independence.

Realization of the danger to the existence of the American
people and their way of life was brought home to them with telling
effect. The prestige of General Marshall and Mr. Lovett in the State

7

Department, the non-partisan support of Senate stalwarts like Vandenberg and George, the news that the Russians had produced an atomic explosion in 1947 and cancelled American monopoly of nuclear weapons -- these influences supported the Administration in mobilizing American public opinion to support a new defense effort symbolized by the integration of the three armed services and the recall of American youth to military service, to utilize the strong American economy to support European powers in their efforts to rebuild new strength from the wreckage of war.

For nearly ten years, this country has accepted the sacrifices in manpower and money grants considered necessary to plan and to have in being a military potential in the air and on the sea more effective than a combination of enemies led by Russia. To encourage powers held in alliance with us and other states seeking to safeguard their interests by reinforcing their economies, the Congress has voted more than $50 billions in military and economic assistance. There is no lagging in the people's will. This very year, the Congress appropriated $1 billion more for defense than was recommended by the Executive because of conflicting technical estimates of the relative weights of American and Soviet airpower, research and development of nuclear missiles. And the Senate, immediately before adjournment for the electoral campaign, instructed its Foreign Relations Committee to inquire into the "conception, scope and effectiveness" of the foreign aid program. The Committee was granted $300,000 to do the job and was instructed to collaborate with the Senate Armed Forces and Appropriations Committee Chairmen, authorized to employ independent investigators, and submit a report by January 31, 1957 to be available to the new

8

Congress when it convenes in association with the new Executive administration. The press today announced the probability that the President of Columbia University in New York will head the private investigation in this program.

This short review of contemporary events that cast their shadows over the peace and plenty of the scene on which I look, this deterioration in the world order since the military victories of 1945, brings first to my thoughts the tremendous change that has taken place in our national outlook in the past forty years. I can well recall the state of mind when as an independent voter in Maryland, then as now a border state, about to mark my first ballot I decided to support Charles Evans Hughes rather than Woodrow Wilson. The shibboleth, "He kept us out of war" rang hollow in my ears; so from the polling booth I sought enlistment in Theodore Roosevelt's volunteer division that was denied existence and from there to the R.O.T.C. training camp to be ready for American entry into the war that I felt to be inevitable. Our country was ill-prepared for this conflict. Even when it was over and our contribution of 2 million strong expeditionary forces and billions of dollars in supplies were determining factors in military victory, there was no national consensus to insist on a realistic peace. We retired from the confusion of Versailles and under the dictum of a later President, "They hired the money", for 20 years American public opinion was preoccupied with its domestic political affairs. The Navy was retained at the agreed level of 5-5-3 with Britain and Japan under the Washington Treaty and the regular

9

Army dropped to an enlisted strength below 75,000 in 1939.

The air arm was neglected until Lindbergh electrified the world by his modesty, his endurance and his skill.

Today, to quote Adolf Berle's contribution to the Declaration of Chapultepec in February 1949, "Peace is indivisible" and our people know it. If we are to have peace, we must help others who desire peace to share in the world's plenty. A new plenty that we can help create from the fruits of scientific research and adjustments to a changing environment.

These desired conditions are neither spontaneous nor automatic. -- no Venus from a sea shell -- nor automatic -- behind automation is a determining skill. Our national motto is now "In God We Trust" but we do not show to others as its reverse, "God Helps Those Who Help Themselves". We are not God. Then in human humility out of our plenty we face the responsibility of continued use of our resources in population and production for an indefinite time in the long, long struggle to organize and hold the peace.

We face no momentous threat to our security from within our own borders. In our economic life, the relations between capital and labor are determined by a basic respect for the national interest -- to insure their own salvation. Our social relationships not withstanding the tensions of minority adjustment and environmental pressures are adjusting to a national consensus. Pressure groups do not look beyond our shores for help to undermine the majority.

The threat to our peace lies abroad. Determined to meet the challenge, to allay the threat, to help the weak -- never before

10

in time of peace has there been such emphasis on our foreign relations
and never before so much concern with the formulation and implementation
of foreign policy.

Improvised measures to meet new situations have imposed
additional burdens on the Secretary of State and his department, the
traditional agency for the assessment of international problems,
political recommendations to the President and implementation of
decision through the recognized organs for conducting foreign relations.
But the Department of Defense with its unprecedented foreign commit-
ments is unwilling to defer to State Department opinions/situations
and problems regarded as primarily military in nature. The Treasury
Department, increasingly involved in this international financial maze
takes the same position with regard to State. The Department of
Agriculture, charged by the Congress to unload our surplus agricultural
products without wrecking the customary markets of our friends, finds
itself alone and uses its own agents for highly specialized service.

New agencies in the fields of foreign economic assistance,
information, propaganda and psychological warfare complicate further
the relationships between the Executive Departments. And in the end,
the White House Secretariat has to expand its staff to coordinate
activities and assess situations for the President's decision.

Many studies have been made in the past nine years with a
view to streamlining the conduct of foreign relations. Some of them
have been accepted in whole or in part such as the Brookings Institution
Report of 1951, the Reports of the Hoover Commission, the 1953 Rockefeller
Commission recommendations for the reorganization of the State and

11

Defense Departments, the Mutual Security Administration, the United
States Information Agency, and the Wriston recommendations for an
integrated foreign service. But the difficulties continue as the
world situation becomes more complicated.

Questions as to the effective relationship between the
Executive and the Congressional powers, the proper limits of Executive
discretion, the relationship of the military to the civilian branches
of the government in the field of foreign relations, the continuity
of foreign policy on a non-partisanship basis -- and the development of
public support -- these must be faced and solutions suggested not on
the basis of improvisations to meet today's incidents but rather on
the assumption of a proliferation of the forces working against us and
the necessity for us to seize and hold the initiative if we are to
secure the peace.

Let us look at the State Department as the traditional
agency for the conduct of foreign relations. During the past 50 years
it has had a checkered career. The memory of such giants as John Hay
and Elihu Root is dim. In the succeeding years, men of great character
and prestige and competence such as Robert Lansing and Cordell Hull
did not enjoy a close association with wartime presidents who pre-
ferred to conduct their own foreign relations by the media of personal
confidents. On the other hand, Colonel Stimson added luster to the
State Department in the Hoover Administration. The last two presidents
have leaned heavily on the prestige of General Marshall, the ability and
courage of Dean Acheson, and the legal wisdom and moral conviction of
Mr. Dulles.

12

At the opening of the century, the State Department huddled in Victorian isolation in one corner and the cellars of the old State-War-Navy building, was staffed at the top and at the bottom at home and abroad under the principles of the political spoils system. Continuity of policy lay in the minds of such long service careerists as Alvey A. Adee and young Wilbur Carr. Appointments to consular posts paid in fees and not wages were made by the party in power after the presidential elections. Then Theodore Roosevelt in 1906 established a non-political career consular service paid in wages with appointments made on the basis of competitive examinations. But the selections at the top end of the foreign establishment, then as now, 50 years later, were determined as a perogative of the President, free to choose as his ambassadors those citizens presented to him by his own party as deserving of special recognition and reward. The country has acquiesced in the continuity of this procedure. Surely it is agreed the President must be free to name as ambassadors and his official representatives -- to act for him in his relations with the sovereign of another state -- persons not subject to any limitation of choice beyond confirmation by the Senate. Certainly it must be conceded that the President under the responsibility for determining foreign policy should be free to name any citizen to represent him whom he considers most competent to implement American foreign policy in a given country. However the practice as modified in this past decade is that the party organization submits to the President a list of cleared names to whom the party owes a debt for past services or

13

gifts as available for presidential appointment at home or abroad.

The State Department also has a list of names of professional officers considered suitable to represent the President subject to his desire.

Secretary Dulles, on his appointment in January 1953, requested a committee of retired professional ambassadors to review the career list and present their own recommendations. These names were subject to his approval and presidential selection as well as party clearances.

Party clearance was not however a new procedure. As far back as the first Franklin D. Roosevelt administration, applicants for foreign service jobs outside of the classified civil service and as far down as an annual salary level of $1800 were subject to political clearance.

-14-

To return to the appointment of Ambassadors to discharge political
obligations as opposed to the principle of a non-political foreign service
establishment similar to the commissioned personnel in the Armed Services.
The basic concept of non-political and professional military service in the
United States was not only to promote efficiency and reward experience in
the public service but also to remove from extension to the United States
the possibility of armed revolt and resulting dictatorships -- so prevalent
among the new states of the 19th and 20th centuries.

I submit that the haphazard and whimsical appointment of Ambas-
sadors under the guise of Presidential freedom of choice is a significant
weakness in the conduct of our foreign relations. The Ambassador must
be the official and personal representative of the President to the Sover-
eign of a foreign country, Not only invested with representative respon-
sibility and access to the head of that State, he should also have access
to the President and not be limited in his American domestic relationships
to a Deputy Assistant Secretary of State -- nor as frequently happens --
to a junior country "desk" officer.

Abroad in the country of his residence his position as the principal
authority and head of all American official activities, an operator more
than a coordinator, must be recognized by all interested agencies as
it is recognized by the officials of foreign government.

Such position and authority fits into the pattern of international
relations and has proved its worth in a century and a quarter of increas-
ingly complex intergovernmental activities. The Ambassadorial rank

- 15 -

and prestige need to be reaffirmed at home as well as abroad. Let
there be an end to naming as Ambassadors every Tom and Bill sent
abroad on a special job or junket. Let us not forget the spectacle
of a few years ago of four American Ambassadors appointed simul-
taneously for service in Paris getting into one another's way and
hair and spreading acrimony and confusion -- not only among our
own people who did not know which one they served but the foreign
governments, our friends, unable to know which way to turn to get
action on urgent problems.

I do not recommend that Ambassadorial appointments be
restricted to outstanding professional diplomats. Although many
careerists have enjoyed Ambassadorial appointments in the past
quarter century and in larger numbers under Mr. Truman's and
General Eisenhower's administrations, the personal expenses neces-
sary to operate successfully in the most important capitals are beyond
the scope of men and women without private fortune. The day is still
distant when the Congress, reflecting the popular will, grants accountable
representation allowances to American diplomats equivalent to those
given their foreign colleagues by all other countries.

Then, too, the career foreign service has no monopoly in
negotiating ability, representational aptitudes nor executive capacity.
In our country, in my opinion, Ambassadorial appointments should be
kept open to all citizens; representatives of business, labor and the
professions should compete with the best of the careerists in the

- 16 -

interest of the best performance. But the political payoff and career selection by favoritism must be abandoned in the national interest.

No new law is necessary to bring about a change. The remedy lies ready to hand -- all that is needed is an announced policy by the Administration in power. Ambassadors to represent the President must support his policies, certainly his foreign policy. It is unthinkable they would accept appointment if they oppose his domestic policies -- where the lines between here and there are so tenuous today and more so tomorrow.

Given this reservation, I would suggest the President convene a committee of citizens, none of them holding political office, familiar in their thoughts and activities with the problems of foreign relations, representative in their selection geographically and socially, who would examine with the Secretary of State the names of persons, private citizens and public servants including career diplomats, and submit a list to the President as recommendations for appointment to Chief of Mission. The committee should not be so small as to be overburdened nor so large as to be unwieldy. I would suggest two from each time zone to assist the Secretary of State.

Such an arrangement for the recommendation of Ambassadorial appointments below the level of Presidential personal preferences would remove some of the public's low opinion of the State Department and its work. Instead of dismissing political appointees with a joking reference as to how they pass their time, instead of wondering if the

- 17 -

State Department, in its bureaucratic recesses, connives to push favorites and freeze outsiders, the public mind would react favorably to the demonstrable necessity of selecting the best skills available in the country to implement policy and to conduct efficient organization abroad -- provided the lines of administration are clean and unincumbered.

To insure this it will be necessary at least annually to recall Ambassadors for consultation in the United States. Not only should they have access to the Presidency when the problems are of moment, but to the heads and responsible officers of all agencies where there is a direct and weighty interest. It may be said that such an arrangement exists now, but my experience and observation is that it is not organized and is utilized infrequently and dependent on personal whimsy.

Once recalled for annual consultation, the Ambassador's services should be utilized for planned public speaking tours before the growing and almost innumerable audiences of men and women and adolescents in clubs, councils, colleges and secondary schools throughout the country, on topics within his field of activity and related to the audience's range of interest.

The President and the Secretary of State perform a great and appreciated public service when they present by television an urgent problem of foreign policy. If these demonstrations were supported throughout the land by intelligent and appealing discussions of the situations in various countries and their attitudes toward the United States, the arrangement would implement the Ambassadors' speeches to audiences abroad where he presents the American point of view to interested foreign groups.

- 18 -

So much for the Ambassadors' role in foreign relations, his selection, his status and his functions at home and abroad. Let us now have a look at the foreign service of the Department of State and the foreign services and agencies of other departments and independent organizations of government.

The consular service in its appointments, tenure and compensation was removed from the political spoils system in 1906. In succeeding years until it was amalgamated with the diplomatic service in 1924 to become a career American Foreign Service, it continued to grow slowly in numbers and importance of functions under the sedulous and somewhat jealous direction of a consular bureau. Applicants were selected from competitive examinations and promoted on merit. Their duties, administrative and judicial, related to the welfare of citizens travelling and doing business abroad, the protection of American vessels and seamen, investigation and issuance of visas to aliens visiting the United States, the administration of consular courts in extraterritorial areas, trade promotion, writing of commercial and economic reports -- and in colonial areas where there were no diplomatic missions semi-representational activities.

After the end of World War I, expanding American commercial interests required the selection of trained economists appointed as specialists to posts of particular interest to American commerce and industry.

- 19 -

The diplomatic service during the years prior to 1924 and the enactment of the Rogers Act had another history. With no fees to pay their living expenses, diplomatic secretaries, like the British diplomatic service and the officers of the Royal Navy, were recruited largely from American families of wealth and education willing to pay their own way for the privilege of public service in diplomatic missions. When it is remembered that until 1924 the range of salaries for diplomatic secretaries ran from $1200 to $3600 a year without rental or living allowances, the number of applicants for appointment was never large. Nor were the criteria of selection very severe. The result was a service at one extreme staffed by highly dedicated, unusually well educated and sophisticated men, but infiltrated further down by socially acceptable parasites. The two services abroad had few contacts. Diplomats were the children of Mary, the consuls the sons of Martha and of toil.

The Rogers Act changed all this in law and eventually in practice. Applicants for the foreign service submitted to a common and severe examination, and all successful candidates were first commissioned as Vice Consuls for initial training. Senior officers were selected for recommendation to the President for appointment as Chiefs of Mission. Competition arose immediately -- would ambitious officers advance more rapidly under diplomatic as opposed to consular assignment -- an issue that is still alive.

- 20 -

Under the expanding economy of the Coolidge and the first
years of the Hoover Administrations, the new foreign service became
so engrossed with its own adjustments that a vacuum developed in the
field of trade promotion and commercial interest. Economic specialists
were too much occupied with the potentialities of the new order. Into
this space the Department of Commerce, organized its own foreign and
domestic service. Under the able direction of Dr. Julius Klein,
trained economists and active businessmen were drawn into the new
service and soon found themselves established as Commercial Attaches
in the more important diplomatic missions and Trade Commissioners in
the principal consulates. Regional offices were organized in the
principal cities of the United States and in lesser centers affiliations
were made with local Chambers of Commerce.

The new foreign service had an asset never acquired by the
State Department, a domestic relation to the American community in its
most alert sector -- business.

In many places abroad there was violent jealousy, sometimes
shown publicly, between the two foreign services. Where consular
officers were alert and competitive, they pounded at the same commer-
cial, industrial, banking doors as their Department of Commerce opposite
numbers. Although when they visited Chambers of Commerce and business
houses in the United States while on leave, they were the trained seals
of the local bureau.

- 21 -

The depression of 1931 and election of Franklin D. Roosevelt put an end to this burgeoning of bureaucrats. All foreign services were cut drastically in personnel and appropriations, and many Commerce Department officers were let out, they alleged, through political persecution.

What was left of the Commerce foreign service was amalgamated with the State Department Foreign Service in 1937. Some former career officers have since been appointed as Ambassadors by Presidents Truman and Eisenhower. Among them have been distinguished successes.

Last year there was a movement again in the Department of Commerce to constitute a foreign service of trade promotion that would seek a place abroad somewhere between the economic and commercial sections of the Embassies and the economic and commercial activities of the International Cooperation Administration. But the integration of all official economic and commercial activities under the ICA Head of Mission as Economic Minister or counselor to the Ambassador seems to have closed the gap. At the same time it must be borne in mind that the Department of Commerce has special foreign interests that can only be served by the appointment of specialists with appropriate rank to serve its interests.

The Department of Agriculture has a dual foreign interest. For 25 years it has stationed its specialists in areas abroad producing

- 22 -

large quantities of cereals and fibers for export -- competition with American raw agricultural products. In recent years it has been charged by the Congress with a disposal of surplus foodstuffs and cotton in conjunction with the foreign aid program. Withholding of surplus cotton from world markets has been a help to the economies of Brazil, Egypt, Mexico and Turkey. The use of these surpluses to encourage support of American objectives in foreign relations or to deter action detrimental to our interests is so important an element in our economic power that decisions must be coordinated at the highest policy levels. With the Department of Agriculture, like the Department of Commerce, represented on the State Department's Board of Examination and Review, the place of Agriculture's representation abroad would appear to be satisfactorily established in Embassy organizations under the Ambassador's direction and within the framework of the ICA -- economic integration. The role of Agriculture, so long as there is surplus production for possible foreign consumption, must be considered in policy assessments and formulation along with State, Defense and Treasury.

The Treasury has an ever growing role to play in foreign relations. It far transcends the foreign activities of the Customs, Narcotics and Tax Bureaus. As part of its basic responsibility for securing the American economy, it has a vital interest in the financial structure of others -- friendly, alien and neutral. As Chairman of the National Advisory Council, the Secretary of the Treasury determines the instructions to American representatives on the International Monetary Fund and the International

- 23 -

Bank for Reconstruction and Development. He has taken strong positions
from time to time on requests for economic aid, particularly with regard
to applications for loans or grants to bolster the weakened revenues of
countries in the ICA orbit. Since these decisions are an integral part
of our foreign policy, it is a question whether they should not be
expressed by the Secretary of State, certainly from the point of view of
foreign representation. The place for Treasury representatives is to be
found in the Ambassador's official family as an element in the economic
mission, reserving the right as with Commerce, Agriculture and Labor
for direct Departmental contacts on technical subjects.

The Department of Labor's interest in foreign affairs focuses on
the relations between government and organized labor. These present
delicate problems, especially in newly organized and underdeveloped
industrial areas. There are countries where American official attempts
to train or guide labor organizers are resented as an intrusion into
domestic relations. Notwithstanding the pressure from AFOL-CIO to
introduce Labor Attaches, the decision on the propriety of assignment
and the direction of activities has a direct bearing on official foreign
relations. The State Department's political recommendations obviously
should be determining. Labor Attaches where appointed should function
like Treasury and Agriculture under the Ambassador's direction within
the framework of the Economic Minister's organization.

- 24 -

The Department of Defense is the colossus in reality of the United
States. It must be so now and in the foreseeable future, for it is the
guarantor of our physical security, and not ours only. Armed forces of
other nations opposed to Soviet expansion are to weak to defend them-
selves separately and must rally around this focus of strength if they
would hold the peace. In this country it is no easy matter to gauge
the influence and power of the Defense Establishment. With annual
appropriations in excess of 30 billions of dollars, Defense expenditures
extend to every part of the nation and reach into each Congressional
District. Quite apart from this influence on industry and the popular
will, the continued necessity for military conscription is a preoccupation
to every youth approaching military age who must elect the kind of
service best suited to his situation or accept conscription and military
utilization as determined by defense necessities.

The Defense Department is a principal factor in our foreign
relations. Apparently, although in reality not as much as the economic
factor, it is a most important element because it is more in evidence.
Defense commitments to Germany and to Japan detail substantial troops
and equipment to those countries to deter attack and help them rebuild
a defense establishment sufficient to their own needs, plus a proportionate
share in the defense of their areas. American allocations of air power,
arms and equipment, training personnel and experts to operate new
weapons and communications to the NATO and SEATO allies place the
Defense Department in direct contact with their military establishments,

- 25 -

and in the field of direct bilateral military assistance by far the larger
fraction of this year's $4 billion foreign aid program is assigned to the
Department of Defense to be distributed under its direction.

The effect of the impact of these overseas defense activities
on our foreign relations is not easy to assess. The Congress is concerned
especially with respect to the foreign aid program. Progress in research
and development of new military weapons and their use imposes continuous
strategic reappraisals.

The guided missile is more than a symbol of strategic and
tactical potentials. Its effect on the expansion of air power in
the next few years can only be guessed, while the reduction of ground
forces -- a formidable cost element in every military establishment --
engages the attention of all governments.

At the same time the debate is begun in the United States whether
advances in military science will permit a reduction of three-quarters
of a million in military manpower by the end of the next four years.
The Defense Minister of the Soviet Union yesterday stated in reply to
questions submitted to him by an American correspondent on military
matters that the day of large land armies is not past. But the Marshal
added that the announced reduction of nearly 2 million men in Soviet
defense forces was determined by economic as well as military considera-
tions. Britain and France, after cutting back their military budgets to
ease their ailing economies, now find themselves forced to recall
reserves and reactivate their armed forces to meet the challenge to the

- 26 -

national security in the seizure of the Suez Canal.

The presence of American military forces stationed abroad is a constant source of friction with local populations. How can it be otherwise? Ours is the highest cost economy in the world. We would keep it so. Foreign service is a period of the soldier's military duty. He may be briefed to be circumspect but not to be a missionary. And old and proud cultures are selective about missionaries. The Defense Department for the sake of troop morale and visiting Congressmen who have direct political interests in the welfare of the conscript soldier tries to supply troops overseas with the same facilities of living they enjoy in the United States. Fringe benefits are provided to ease their adjustments to a strange environment.

The impact of American schools, commissaries, automobiles, electric kitchen equipment and toilet accessories is something of a shock to most foreign communities. Their conservative elements resent the alien and his gadgets. An eager youth demands them for himself. Icelandic requests that NATO American troops withdraw from its defense, although it has no defense potential of its own, illustrates the successful Communist exploitation of a social irritation. The situation in Germany is potentially more difficult because the Germans cannot escape the memories of conquest. Julius Caesar's comments on the psychology of the peoples beyond the Rhine should never be forgotten.

Even in Turkey -- an enthusiastic and understanding American ally -- the popular good will is showing some strain under the pressure of American

- 27 -

opfluence as contrasted to the low level of their own austere living.

The Department of Defense thus finds itself a supreme commander, confident of our own national support and willingness to sacrifice, but obliged to make continuous adjustments to the military, psychological, social, economic and political pressures working on his allies if the fortress of an armed peace is to be held.

The Defense factor in foreign relations, its importance in the formulation of foreign policy, was recognized in the creation of the National Security Council in 1947, and the ever closer relationship of the Joint Chiefs of Staff to the Secretary of State.

- 28 -

So much in brief review concerning the positions of interested
permanent executive departments on the formulation and execution of
foreign policy, and their stake in effective foreign relations. Now there
must be considered the roll of specialized agencies operating in the foreign
field: the Foreign Aid Program (military and economic), the Information
Agency, the Council on Psychological Warfare, the Intelligence Agency, and
the United States representative on the Security Council.

To consider the last first, there is a national consensus that
the United Nation's organization is a unique international body dedicated
under its Charter to the promotion of world peace. The Congress, with
popular support, underwrites more than a third of its cost of operation.
Organization of American participation in United Nation's activities within
the Department of State appears satisfactory to all concerned agencies,
and imposes no strain on the department; an administrative procedure for
locating and training the skills necessary for effective continuous duty
in United Nation activities is yet to be developed. It is a minor necessity,
and well within the competence of a revitalized State Department adminis-
tration. Attendance of the United States Security Council's representative
at cabinet meetings--as a courtesy--may be encouraged. If the attendance
implies an authority coordinate with the Secretary of State, it might well
be taken as an intrusion on his primary responsibility, and its continuance
discouraged.

The Central Intelligence Agency, coordinating its activities with
the National Security Agency and responsibility through the National Security

- 29 -

Council to the President, would appear to have the consensus of support of
other agencies
all those with whom it cooperates. Should there arise frictions in
coordination, the National Security Council would have ample authority to
ease them.

The Coordinator for Inter-American Affairs during World War II
performed with brilliant success a most useful mission in mobilizing public
opinion favorable to the United States and its objectives among the peoples
of the Latin American Republics. It is suggested that the Special
Assistant to the President on psychological warfare, along with his other
duties, should be given responsibility for the direction and organization
of the United States Information Agency on the same organizational lines
as the Coordinator's Office during the last war. The State Department,
charged with promoting official relations with foreign governments, should
not have its effectiveness impaired by making it a propaganda agency. The
Information Agency directs its activities to foreign public opinion rather
than to governments. It may not then have its organization included in
departments charged with formal foreign contacts. While an argument can
be made to have it operate under the responsibility of the National Security
Council, it would appear to have greater flexibility under the Psychological
Council as an independent executive agency. It has been greatly handicapped
in its recruitment and training by the uncertainty of its status, and its
tenuous relations to private activities in the propaganda field. These
difficulties would be surmounted if it is given some permanent standing,
and its employees recruited freely from the field of public relations material
available in the United States, and on a basis of remuneration as free as

- 30 -

the Intelligence Agency.

An argument that has been advanced in favor of the United States
Information Agency separate foreign service would emphasize security of
tenure and prestige of position, rather than functions and skill in operation.

For effective administration and personnel housekeeping abroad,
Embassy administrative facilities would continue to be utilized, and the
principal information officer, whatever his title, would be subject to the
Ambassador's direction in the coordination of his activities to insure a
clean line of foreign policy implementation.

To my own knowledge, this type of foreign organization has been
attempted in four countries with some success, even under the vague and
changing conditions of the information program.

The Foreign Aid Program -- military and economic-- technical
assistants and bi-national institutes-- is currently under Senate investi-
gation. Why is this evidence of Congressional concern at this time? Apparently
not partisan and not related to the Presidential campaign. Leading and
experienced Senators of both parties voted for it, and, furthermore,
directed that a report on the inquiry be submitted in January 1957 for the
attention of the new Congress under the new administration.

This action was taken after the Secretary of State, accompanied
by the Chairman of the Joint Chiefs of Staff, and with a public declaration
of strong Presidential support, had asked the Congress to authorize nearly
$5,000,000,000. compared to an appropriation of $3,000,000,000. last year
of new money for foreign aid and acquiescence in a ten year program to
meet the Soviet's "New Look" of political, economic, and psychological chal-
lenge. The Congress finally voted $4,000,000,000, or a 20% reduction below the

- 31 -

requested amount, granted by a reluctant House and the more acquiescent Senate. The response to a ten year program is the current Senate investigation.

Why is this Congressional reluctance? The committee hearings revealed the complaint that the presentation, if not prefunctory, was not convincing. The Chairman of the House Foreign Affairs Committee opposed the request as an attempt to expand and extend indefinitely an emergency program which had already served its purpose. On the floor of the House were heard tirades against the "give away" and appeals for the reduction of taxes. Individual countries, recipients of substantial aid, like Yugoslavia, Egypt and India were singled out for political attack.

The fact that the conditions which first prompted the aid program have changed for the worst received little attention either in the Congress or in the home. It is true the program was instituted as an emergency measure to rearm our Allies, and to build up their economies to meet a challenge of military invasion and political subversion in countries around the Soviet controlled periphery. It is true the advance in mass destructive power of new weapons abated the fear of general war as an invitation to genocide. It is likewise true that means of production have been restored and many states, if they are willing to make the budgetary sacrifices, can make substantially greater contributions to their own defense--if not to the common cause. But along with these conditions there is a clamor for more and more aid, an unwillingness to undertake financial reform, and a growing disposition abroad to criticize the American attitude as condescending.

"Mutual Security" is much referred to as "Aid".

- 32 -

Amid all these factors in the situation there are murmurs of diplomatic ineptitude and bungling abroad, and confusion and delay in the formulation of foreign policy at home, while it is alleged the Soviet leaders enthusiastically presenting the "New Look" attack the very heart of the Western economy in the Middle East, and cajole the waivering, the underprivileged, and the fearful peoples that the only route to a Pax Orbis is Pax Sovietica. It is to be hoped, ferverently, that the Senate investigators would receive every possible assistance to help them define the world danger as it exists, and enable them to recommend a policy of international cooperation over the next ten years, which will add to our own strength and security, and present to the free peoples a tangible basis for the hope of peace in our time. And let them not forget the slaves, cowering in fear of their thoughts, behind the barriers of cruelty and tyranny over body and mind.

Whatever the conclusions of the Congress may be next year with respect to the foreign aid program, it is patent that some kind of American assistance, particularly in Asia, the Near East, Africa, and South America, will have to be forthcoming in the foreseeable future. Continuance of the present program on an emergency and improvised basis impairs its usefulness to the United States and its utility abroad. Policy must be defined acceptable to the Congress and supported by our people as an aid to our own security, and regarded as useful in the development of closer understanding by our foreign relatives.

The Secretaries of Defense, State and Treasury are concerned immediately in its formulation by the President, and a clear line of

- 33 -

direction and organization must insure its effective implementation abroad
under the responsibility of the Ambassador.

The foreign aid program is a factor of great weight in the conduct
of our foreign relations. For this reason the Secretary of State has the
greater responsibility for assessment of situations and formulation of
policy. The Secretary of Defense has great interest not only in assessment
and formulation, but also its implementation. It is suggested that the
Secretary of the Treasury be made a member of the National Security Council,
and the Secretary of State present his recommendations to the President
through this agency, over which the President presides.

Implementation of policy decisions would become, then, in the
responsibility of the State Department's representative on the Planning
Board, and a clear line of directive to the field of operations--already
effective when working as a country team directly under the Ambassador.

In this study thus far, it is intended to advance the thesis that
additional organization of the President's Secretariat is not necessary
to expedite the assessment of international problems, formulation and imple-
mentation of foreign policy decisions, except in the fields of information
and the foreign aid program. The increased importance of the National
Security Council is recognized. If the staffs of the Planning Board, and
the Operations Coordinating Board are effectively manned, the flow of assess-
ment to decision to implementation can be maintained adequately and rapidly,
provided the lines of responsibility are drawn and recognized. No executive
can operate on a committee basis where a free veto exists. There are those
who believe the complex of foreign relations is overstaffed and undermanned.

- 34 -

If the best skills can be obtained, and administrative
processing be subordinated to more time for thought, then the mechanics
of implementing decision present no great obstacle.

To relieve the President of routine duties wherever possible,
and to provide a continuing and close relation to the Senate, there
is suggested the possibility of the Vice President sitting on the
National Security Council. He does act as Chairman in the President's
absence, but without any of the functions of decision reserved
constitutionally to the President.

If the Vice President could preside as an established practice,
he need not have either vote or veto, but considerable time and
deliberation would be save the President in arriving at decisions. The
Vice President would be more currently informed on problems of moment,
and with the approval of the President, he could be a continuous and
hitherto unused channel of communication to the Senate. The arrangement
would in no way affect the customary and useful appearance of
departmental secretaries before Congressional committees, it would
only provide a secure communication facility at a high level, safeguard-
ing the perogatives of the executive and legislative powers--and
providing another evidence of that capacity for cooperation that is
part of the genius of America.