768.5–MSP/12–351
The Acting Secretary of State to the Acting Administrator for Economic Cooperation (Bissell)1
My Dear Mr. Bissell: I am writing to confirm to you the Department of State’s understanding of the organizational arrangements [Page 1868] to be put into effect by the Department and the Economic Cooperation Administration (Mutual Security Administration) in connection with the administration, in Yugoslavia, of the United States program of economic assistance to that country.
The arrangements covering administration of the assistance made available to Yugoslavia have in my view been well adapted to serve our policy objectives in Yugoslavia and have proved a fine example of cooperation between the agencies. In view of the enactment of the Mutual Security Act of 1951 and the President’s notification to the chairmen of certain committees of Congress on November 7, 1951,2 that economic assistance will be furnished to Yugoslavia as a result of his determination that the increased ability of Yugoslavia to defend itself is important to the preservation of the peace and security of the North Atlantic area and to the security of the United States, it is apparent that measures must be taken to clarify arrangements for appropriate United States representation in Yugoslavia for the administration of the contemplated program of economic assistance under this legislation.
The Department understands that this program, which under Section 101(a) of the Mutual Security Act of 1951 is to be carried out pursuant to the provisions of the Economic Cooperation Act of 1948, will be administered by the Economic Cooperation Administration (Mutual Security Administration). In regard to the economic mission in the recipient country provided for under Section 109 of the Economic Cooperation Act of 1948, reference is made to recent discussions between representatives of the Department and of the Economic Cooperation Administration (Mutual Security Administration) and in particular to the recommendations concurred in by yourself, Ambassador George V. Allen, Mr. Paul R. Porter and Mr. Richard F. Allen, which are set forth in telegram Repto 5649 from Paris to ECA Washington dated November 10, 1951.3 The Department of State agrees with those recommendations.
The Department of State agrees that Mr. Richard F. Allen should be appointed Chief of the ECA/MSA Mission in Belgrade [Page 1869] and be paid by the ECA (MSA). He will continue to serve simultaneously as Counselor of Embassy for Economic Affairs. I assume that the Department and the Ambassador will be consulted by the Economic Cooperation Administration (Mutual Security Administration) in regard to the size and character of the staff which will assist Mr. Allen in the administration of the program, and that no personnel will be sent unless agreed by the Ambassador. It is understood that Ambassador Allen, in furnishing appropriate notification to the Yugoslav Government of the personnel of the economic assistance staff, will also notify that Government of the appointment and responsibilities of Mr. Richard F. Allen as Economic Counselor and Director of the Assistance Staff.
In view of special political considerations which require close and continuing direction by the Ambassador of all aspects of United States policy in Yugoslavia, including the programs of military and economic assistance, it is considered necessary that the ECA/MSA unit, in its relations with the Yugoslav authorities, should be regarded as a part of the Embassy. Accordingly, the article on United States personnel for administration of the economic aid program, to be included in the bilateral agreement to be concluded with the Yugoslav Government in accordance with the relevant United States legislation, should follow the recommendations made in telegram Repto 5649 from Paris referred to above.
This deviation from the standard phraseology used in all of the previous economic aid agreements with European countries is not intended, however, to alter the substance of the usual Mission-Embassy relationship. Both as a matter of practice and by law, the Chief of the ECA (MSA) Mission is appointed by and receives his instructions from the Director for Mutual Security in MSA matters. The economic assistance staff will, within the United States Government, constitute a regular ECA (MSA) Mission, and its activities and those of the Embassy will be coordinated under the leadership of the Ambassador. It is understood that ECA (MSA), in making any future appointments of Chiefs of this ECA (MSA) Mission, will consult with the Department of State in the usual manner.
I should be glad to have your confirmation that the proposals set forth in this letter have the approval of the Economic Cooperation Administration (Mutual Security Administration) and may be considered henceforward as jointly determined by the Economic Cooperation Administration (Mutual Security Administration) and the Department of State. We understand that detailed arrangements for staffing, administrative support, etc. will be discussed in Paris by Mr. Fite of OSR with Mr. Graham Martin of the Embassy with [Page 1870] a view to their submitting proposals to Washington and to Belgrade for consideration.4
Sincerely yours,
- According to a covering memorandum from Bonbright to Webb, which was attached to a draft copy of this letter and was dated November 29, this letter was based on joint recommendations made by Allen and Bissell when they were both in Paris. (868.00R/12–351)↩
- See the memorandum by Webb to the President, Document 934.↩
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Telegram Repto 5649 summarized the agreement reached in Paris and recommended changes in the wording of the bilateral agreement. It also pointed out that in light of Yugoslav sensitivity resulting from unhappy experiences with numerous autonomous Russian missions, there should be no reference to the establishment of a new economic mission in the text of the bilateral agreement although as a matter of fact and of law there would be a new mission in Belgrade. (ECA message files, FRC 53A278, Paris)
The text of the “Economic Cooperation Agreement Between the United States of America and the Federal People’s Republic of Yugoslavia,” signed by Ambassador Allen and Foreign Minister Kardelj in Belgrade on January 8, 1952, was transmitted to the Department of State, along with certified copies in both English and Serbo-Croatian, in despatch 659 from Belgrade, January 11, 1952. (868.00–R/1–1152)
↩ - In a letter to Webb on December 12, Bissell expressed his confirmation of this agreement. He noted that copies of this exchange would be sent to Belgrade and to the OSR in Paris to guide their future actions in this matter. (868.00–R/12–1251) As Bissell indicated, this correspondence was quoted verbatim in an airgram, Torep A–2143 of December 13, to Paris and repeated to Belgrade. (768.5–MSP/12–1351)↩