Foreign Relations of the United States, 1950, National Security Affairs; Foreign Economic Policy, Volume I

Department of State Administrative Files¹

Memorandum of Understanding Between the Departments of State, Treasury, and Defense and the Economic Cooperation Administration

[Washington, December 19, 1950.]

Organizational Arrangements Within the U.S. Government for Policy Formulation and Implementation With Respect to International Security Arrangements and Military and Economic Assistance for Mutual Defense

1. The tremendous step-up in our foreign and domestic programs for increasing our own national security and that of the other free nations makes it imperative that we carefully examine the organizational arrangements within the U.S. Government for carrying out these programs. Certain aspects of these arrangements require urgent consideration and immediate decision.

2. The most urgent organizational problem which we now face involves the proper framework in which the questions relating to the North Atlantic Treaty and economic and military assistance programs can properly be coordinated. With respect to the organization in Washington, two basic decisions need to be made: (a) the proper relationship among State, Defense, the Economic Cooperation Administration, and the Treasury, on an interdepartmental basis; and (b) the adjustments which must be made within each of these agencies as a basis for an effective and coordinated Government-wide effort. The following arrangements are agreed to as a first step in resolving these questions.

3. a. A Director for International Security and Assistance Affairs^* will be appointed in the Department of State. He shall occupy the senior position authorized by Section 406(e) of the Mutual Defense Assistance Act of 1949 as amended.

b. The Director for International Security and Assistance Affairs, on behalf of the Secretary of State, shall represent and speak for the Department of State on matters of policy and program relating to the North Atlantic Treaty, other similar international programs, and military and economic assistance for mutual defense. He shall be responsible for coordinating all activities within the department related thereto. He shall have the authority, responsibility, and staff necessary to assure that he can speak positively and expeditiously on behalf of the Department of State.

c. In addition, the Director for International Security and Assistance Affairs, on behalf of the Secretary of State, shall be responsible for providing continuing leadership in the interdepartmental coordination of policy and program with respect to the North Atlantic Treaty, other similar international programs, and military and economic assistance for mutual defense. In performing this function on behalf of the Secretary of State, the Director for International Security and Assistance Affairs will be exercising responsibility for the Government as a whole.

4. a. There shall be appointed an Assistant to the Secretary of Defense for International Security Affairs. He should occupy one of the three positions, other than the senior position, authorized by Section 406(e) of the Mutual Defense Assistance Act of 1949 as amended.

b. The Assistant to the Secretary of Defense for International Security Affairs shall have the same responsibility and authority within the Department of Defense as is provided in paragraph 3.b., for the Director for International Security and Assistance Affairs with respect to the Department of State.

5. The Economic Cooperation Administrator and the Secretary of the Treasury shall each designate an official who shall have the same authority and responsibility with respect to his agency as is provided in paragraph 3.b., for the Director for International Security and Assistance Affairs with respect to the Department of State.

6. a. The review and coordination of policy and program as between the several departments and agencies shall be carried on by a senior staff committee to be known as the Committee on International Security Affairs. The State Department Director for International Security and Assistance Affairs shall be the Chairman. In addition, the membership shall consist of the Assistant to the Secretary of Defense for International Affairs, a representative of the Special Assistant to the President, Mr. Harriman,² and the ECA and Treasury officials provided for in paragraph 5. Representatives of other departments and agencies may be asked to sit with the Committee as appropriate.

b. The Committee on International Security Affairs shall establish such permanent or temporary working groups as it finds necessary and shall develop such arrangements as are necessary for guiding interagency coordination outside of the Committee.

7. It is essential that operating responsibility be delegated to the greatest possible extent to those agencies which are equipped to handle it. This means that with respect to mutual defense and within the framework of established policies, the Department of Defense has primary responsibility for determining the military character of international programs, for developing and implementing the end item and military training programs, and for developing U.S. determinations as to military requirements in the formulation of programs for military production abroad; and the Economic Cooperation Administration shall have primary responsibility for developing and implementing plans for economic assistance required to support an adequate defense effort abroad, and for implementing approved programs for additional military production abroad.

8. The foregoing administrative arrangements shall be carried on with due regard for the established responsibilities of the National Security Council and other officials and agencies of the Executive Office of the President, and of the National Advisory Council on International Monetary and Financial Problems, and the existing authorities and responsibilities of these officials and agencies are in no wise modified by this agreement. This means that the National Security Council shall continue to be the agency “to advise the President with respect to the integration of domestic, foreign and military policies relating to the national security”.

9. Arrangements should likewise be made as quickly as feasible for improved coordination between U.S. Government officials and representatives at both the regional and country levels.

1. Lot 54D291, consolidated administrative files of the Department of State. 1949–1960.
2. In a covering memorandum transmitting this approved paper to the Director of the Bureau of the Budget on this same date, the President suggested the deletion of the words “and Assistance” from the title of the Director. [Footnote in the source text. A Department of State press release of January 4, 1951, announced the establishment of the position of Director, International Security Affairs and the appointment of Thomas D. Cabot to serve in that capacity. For text, see Department of State Bulletin, January 22, 1951, pp. 155–156.]
2. W. Averell Harriman, Special Assistant to President Truman; Special Representative in Europe for the Economic Cooperation Administration, 1948–1950.