CHAPTER II

RECENT DEVELOPMENTS IN GOVERNMENT ORGANIZATION AFFECTING FOREIGN AFFAIRS

The major changes in the organization of the United States Government between the First and Second World Wars were concerned mainly with domestic agencies and the conduct of domestic affairs. The primary focus of national attention was on the domestic scene. During the Second World War, there was a proliferation of governmental agencies that were concerned in one way or another with the administration of foreign affairs and overseas operations. This development began to occur even before the United States had entered the war.

After the attack on Pearl Harbor and the declarations of war, the processes of organization and reorganization were hastened. The wartime governmental machinery reached full development by the end of 1943. It then included such major agencies as the Foreign Economic Administration, the Office of War Information, the Office of Strategic Services, the Office of the Coordinator of Inter-American Affairs, and the War Shipping Administration, all with large staffs abroad. It also included the Office of War Mobilization, the special war agencies concerned mainly with war production and affairs at home, and the expanded armed services.

During this entire period, the position of the Department of State and the Foreign Service in the field of foreign affairs as a whole was far from central. Major political and military relationships with the principal allies were being handled directly by the President, with extensive use of personal emissaries and also with extensive use of military channels of communication for matters concerning which security was a factor. At the same time, the military commands of the Allies were working together, while the wartime civilian agencies were likewise working directly with their opposite numbers through the machinery of the combined boards and in other ways. A proportionately larger and more varied business was handled through regular diplomatic channels in the case of the smaller allies and the neutrals, but the influence of the emergency agencies was widespread, even in those cases.

The Department of State had little desire to take on emergency tasks at the beginning of the war. Nevertheless, the Department

found it increasingly necessary in 1942 and 1943 to insist on its prerogatives respecting foreign policy, and to seek an active coordinating role in order to maintain them. In July 1943, however, the Director of War Mobilization was authorized to settle conflicts among the several existing foreign economic agencies and the Department of State. In September 1943, the Foreign Economic Administration was created as a consolidated agency with sweeping authority to coordinate and carry on the foreign economic activities of the war, under the general supervision of the Director of War Mobilization and subject to foreign policy guidance by the Department of State. That ended the bid of the Department of State for an active part in the administration of the war; it turned its attention to the important but less immediate problems of post-surrender planning and was able to exert only a limited influence thereafter so far as current war activities were concerned.

THE DEMOBILIZATION OF WARTIME FOREIGN

AFFAIRS AGENCIES

An early end of hostilities had been foreseen for some months before it occurred in August 1945. This interval was used, among other things, to plan for the demobilization of the wartime machinery of government.

The Office of War Information was abolished as of August 31, 1945; its foreign information activities and personnel were transferred to the Department of State, along with certain of the activities and personnel of the Office of Inter-American Affairs. The latter office survived as an organizational entity until the following year, but was abolished in May 1946 when its remaining functions were transferred to the Department of State.

The Foreign Economic Administration was liquidated as of September 27, 1945. Its activities and personnel relating to lend-lease, liberated areas supply and procurement, foreign relief and rehabilitation, and foreign economic and commercial reporting were transferred to the Department of State; other activities and personnel were transferred to the Reconstruction Finance Corporation and to the Departments of Agriculture and Commerce. The Office of the Army-Navy Liquidation Commissioner was also transferred to the Department of State on September 27, 1945, which thereby took over the disposal of war surplus property abroad.

The Office of Strategic Services was terminated as of October 1, 1945. Its functions and personnel dealing with research and analysis were transferred to the Department of State; its other functions and personnel were transferred to the War Department.

The rapid dismantling of the war agencies reflected in part the general feeling that the problems which had led to their establishment

would soon disappear with the ending of actual hostilities. This feeling was reflected, for example, in the early suspension of lend-lease aid. The transfer of activities and personnel to the permanent departments of the Government was intended to facilitate the liquidation of activities and the dismissal or absorption of personnel.

At the same time, it was becoming clear that many of the new foreign affairs activities should and would continue. Some consideration was doubtless given to the possibility of continuing the Foreign Economic Administration, the Office of War Information, and the Office of Strategic Services; but the weight of opinion was strongly in favor of turning over their remaining activities to the established departments of the Government.

The main issue at the time arose over the division of foreign economic activities between the Department of State and the primarily domestic agencies, particularly the Department of Commerce. Both departments took over large groups of personnel from the Foreign Economic Administration, and both found themselves engaged in carrying on similar activities in the promotion of international trade for a considerable period.

The effect of the agency transfers upon the size and character of the Department of State was obvious. It gained several thousand new employees at home and abroad and found itself confronted with many new administrative responsibilities of a highly specific character.

THE FOREIGN SERVICE ACT OF 1946

As previously noted, the overseas staffing demands of the war were met in part by the staffs sent abroad by the war agencies. These staffs greatly outnumbered the Foreign Service at the end of the war. The heavier workload of the Foreign Service itself was met by the establishment in 1941 of the Foreign Service Auxiliary, which by the end of the war was larger than the regular service.

Reorganization of the Foreign Service was clearly necessary in 1945. Emergency and auxiliary staffs required regularization in some manner. Provisions for administrative, fiscal, and clerical personnel required modernization. Demands for the employment of specialist personnel required a permanent solution. Pay levels were inadequate. The result, after intermediate legislation in 1945 and the so-called Manpower Act in 1946, was the Foreign Service Act of 1946. The act provided a marked increase in pay and allowance levels, thereby facilitating recruitment, and it established the basic structure within the Foreign Service that still prevails. It provided for two career services, one for officers, the other for staff, and it provided for the temporary employment of specialists up to 4 years as foreign service reserve officers. The act also provided that career officers must be assigned for

duty in the United States for at least 3 of their first 15 years of service; provisions for more frequent home leave were also included.

Many of the provisions of the act were accepted as clearly desirable and noncontroversial. There was no doubt, however, that in its basic drafting the statute was responsive mainly to the desires of the existing group of career officers. It reaffirmed and continued the distinction between departmental and foreign service personnel. It created a new statutory position, that of the Director General, with responsibility for administering the Foreign Service, and provided that the position could be filled only by a career officer.

The provisions that tended to build up the separatist character of the career officer corps and to impede administrative control by the Secretary of State were considered objectionable at the time by some of the President's staff advisers. The President gave serious consideration to the possibility of vetoing the enrolled bill. Nevertheless, he decided to approve the bill and issued a statement commenting on the improvements in which the legislation would result. The basic problem of relationship between the Foreign Service and the Department of State, although affected by the legislation, was not new. It received further attention in connection with legislation enacted in 1949.

ESTABLISHMENT OF THE DEPARTMENT OF DEFENSE

The War and Navy Departments and the armed services were extensively reorganized in the early years of the Second World War. The Air Force received increasing recognition; the problems of unified command in the field were faced; the Joint Chiefs of Staff was established; supply organization was streamlined.

These and many other changes involved setting aside the statutory provisions of peacetime legislation. This was mainly done under the sweeping Presidential authority of the First War Powers Act, authority which was scheduled to expire 6 months after the end of the

war.

As the war progressed, there was increasing recognition that it would be undesirable to return to the prewar patterns of organization for the armed services. A select committee of the House of Representatives gave active consideration in the spring of 1944 to the establishment of a single department of the armed forces. The Joint Chiefs of Staff set up a study of the question: "What is the organization which will provide the most effective employment of our military resources in time of war and their most effective preparation for war in time of peace?" This study resulted a year later in a recommendation, not unanimous, for a single department. The Joint Chiefs, however, took no action.