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Letter to the President of the Senate and to the Speaker of the House Transmitting Bill Implementing the Message on Foreign Aid

May 26, 1961

Dear Mr.__________:

Transmitted herewith for consideration by the Congress is a draft of a bill which would carry out the principal recommendations set forth in my message on foreign aid of March 22, 1961.

The legislation is drafted to provide for aid to social and economic development under an Act for International Development and to provide for military assistance under an International Peace and Security Act. It is designed to provide the concepts, the means, and the organization for programs of foreign aid attuned to the needs of the decade ahead.

The Act for International Development seeks authorization for appropriations of $1.690 billion for four major purposes:

a. To assist and support nations whose independence or stability depends upon such help and is important to our own security;

b. To provide for our share in certain programs under multilateral auspices;

c. To provide grant assistance to less-developed countries primarily to assist in the development of their human resources; and

d. To establish a Presidential Contingency Fund to meet the unpredictable exigencies with which we will doubtless be confronted during the forthcoming year.

The Act for International Development also seeks authorization by the Congress to make loans, repayable in U.S. dollars, to promote the economic development of less-developed countries and areas with emphasis upon long-term plans and programs designed to develop economic resources and increase productive capacities. For this purpose I am asking the Congress for long-term authority in the form of public debt transactions which would make available for this purpose $900 million in Fiscal Year 1962 and $1.6 billion in each of the following four years. Additionally, repayments of previous foreign loans of about $300 million annually would be made available for development lending. Authority to make firm long-term commitments is of paramount importance. Real progress in economic development cannot be achieved by annual, short-term dispensations of aid and uncertainty as to future intentions. To make investments in economic development more effective, the terms and conditions of the investment should be related to the establishment of sound long-term development plans and the achievement of specific targets. While the methods proposed represent a departure from previous patterns in economic aid programs, they conform to the traditional techniques of numerous other governmental operations. These methods are essential to our new approach to development assistance and to the effectiveness of that approach.

The International Peace and Security Act will continue the program of military assistance which constitutes an integral part of our whole security and defense posture. It is essential that this program be maintained and continued in the present international climate. Appropriations will be sought to provide for the United States' share of maintaining forces that already exist, to complete undertakings initiated in earlier years, to give increased emphasis to internal security, and to provide for a limited and selected modernization of forces in areas under particular duress. I envisage a continuous review and assessment of the needs for military assistance around the world and continuing discussions with our allies and associated nations to determine the extent to which expenditures for defense can safely be lessened. Such adjustments necessarily may not be accomplished overnight, and, in any case, neither we nor our allies can afford a relaxation in the maintenance of an effective collective deterrent to armed aggression. The increasing problems of internal security with which we are confronted reflect an expanded utilization of the technique of indirect subversion which demands new and more vigorous counter measures if the spread of international communism is to be prevented. Assisting developing countries to create and maintain an environment of security and stability is essential to their more rapid social, economic, and political progress.

The achievement of our goals requires effective organizational arrangements to execute these programs. In this regard, Section 604 of the Mutual Security Act of 1960 placed two requirements upon the President: (1) To have a study made of the functions of, and the degree of coordination among, agencies engaged in foreign economic activities, with a view to providing the most effective means for the formulation and implementation of United States foreign economic policies and (2) to include in his presentation of the fiscal year 1962 mutual security program to the Congress his findings and recommendations resulting from that study.

To fulfill the first requirement, at the request of the President the Bureau of the Budget conducted a study of the existing situation and prepared a descriptive and analytical staff report. That report and the results of studies initiated by this administration have been available to executive branch officials concerned with foreign economic affairs. The recommendations which follow constitute my response to the second requirement.

My decisions on foreign affairs organization are predicted on the following principles:

First, authority for the conduct of activities which advance our foreign policy objectives should be vested in the President or other officials primarily concerned with foreign affairs.

Second, international activities of domestic agencies should be clearly either (i) necessary extensions of their normal domestic missions or (ii) undertaken on behalf of and in support of programs and objectives of the appropriate foreign affairs agencies.

These guidelines are particularly important for our foreign development assistance program. Domestic agencies can and should make a substantial contribution to the success of this program, and I will expect the foreign affairs agencies to make maximum use of their resources, skills, and experience.

My proposals for the organization and coordination of foreign aid are based also on the concepts and principles set forth in my March 22 message to the Congress--specifically, the critical necessity for unified administration and operation of foreign development assistance activities carried out in accordance with integrated country plans. These proposals will be put into effect by appropriate executive action.


Responsibility and authority for the formulation and execution of the foreign development aid programs will be assigned to a single agency--the Agency for International Development--within the Department of State. It will replace the International Cooperation Administration and the Development Loan Fund, which will be abolished. The new agency--AID--will be headed by an Administrator of Under Secretary rank reporting directly to the Secretary. of State and the President. The internal organization of AID will be geographically focused to give operational meaning to the country plan concept. Thus, the line authority will run from the Administrator to the Assistant Administrators heading four regional bureaus and, through the Ambassadors, to the chiefs of AID missions overseas. The four Assistant Administrators will be equal in rank to the geographical Assistant Secretaries of State and will work closely with them.

The proposed rank of the AID Administrator and the relationship between AID and other elements of the Department of State highlight a fundamental fact: Economic development assistance can no longer be subordinated to, or viewed simply as a convenient tool for meeting, short-run political objectives. This is a situation we can ill afford when long-range, self-sustained economic growth of less developed nations is our goal. Development assistance, therefore, must--and shall--take its place as a full partner in the complex of foreign policy.

The new agency will develop the full potential of the use of agricultural commodities as an instrument of development assistance. The Department of Agriculture will continue its active role in respect to commodity availability, the disposal of surplus stocks, international marketing, and the relationship of domestic agricultural production to world food needs. In view of the interrelationship of domestic agricultural products and their use for foreign policy purposes, I shall rely on the Director of the food-for-peace program, Mr. George McGovern, to advise me in the formulation of policies for the constructive use of our agricultural abundance as well as to assist in the overall coordination of the program.

The Peace Corps, too, has a special significance in our international development efforts. It will continue as an agency within the Department of State, and its Director will have the rank of Assistant Secretary of State. The Secretary of State will establish arrangements to assure that Peace Corps activities are consistent and compatible with the country development assistance plans. These arrangements will assure that the Peace Corps activities and AID programs are brought into close relation and at the same time preserve the separate identity and the unique role and mission of the Peace Corps.

The principal assignments of authority for the administration of military assistance are satisfactory and will remain unchanged. The Department of Defense has operational responsibility for approved programs. In recognition of the fact that military assistance should clearly serve the foreign policy objectives and commitments of the United States, the Secretary of State provides continuous supervision and general direction of the program, including the determination as to whether there should be a program for a country and the value of that program.


The self-help efforts of less developed nations, together with coordinated external assistance from economically advanced nations, must be coupled with a constructive approach in dealing with international commodity problems and barriers to international trade. Each of these approaches is needed if the goals of economic growth and stability are to be reached.

The relationship of trade, aid, and other aspects of foreign economic policies involve the interests of many agencies of Government, particularly when both foreign and domestic economic considerations are an issue. It is, there. fore, essential that interagency consultation and coordination be as meaningful and productive as possible and that the Secretary of State become the focal point of responsibility for the coordination of foreign economic policies. With these requirements in mind, I abolished the Council on Foreign Economic Policy, which had been chaired by a Special Assistant to the President. I have assigned the functions of the Council to the Secretary of State. I shall expect him--in facilitating executive branch coordination--to choose whatever mechanisms he finds appropriate, including the formation of interagency working groups. This assignment will strengthen the affirmative leadership role of the Secretary of State in the development and integration of foreign economic policies. I have every confidence that the views of agencies concerned will be brought to bear on such matters early and fully.



The ambassador, as representative of the President and acting on his behalf, bears ultimate responsibility for activities of the United States in the country to which he is accredited. His authority will be commensurate with his major responsibilities. Presidential action has already been taken to strengthen the role of our ambassadors, and further executive action is being undertaken to clarify their responsibility and authority.

In light of the above recommendations and in the earnest hope and expectation that the United States will meet its challenges and responsibilities in this decade of development in a forthright, affirmative manner which can engender the respect and cooperation of the community of free nations, I urge the early consideration and enactment of this legislative proposal.

Respectfully yours,


Note: This is the text of identical letters addressed to the Honorable Lyndon B. Johnson, President of the Senate, and to the Honorable Sam Rayburn, Speaker of the House of Representatives.

For the President's statement upon signing the Act for International Development, see Item 969.

John F. Kennedy, Letter to the President of the Senate and to the Speaker of the House Transmitting Bill Implementing the Message on Foreign Aid Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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