Foreign Relations of the United States, 1951, European Security and the German Question, Volume III, Part 2

ECA message files, lot 53 A 278, box 79, Frankfurt Ecato: Telegram

The Administrator for Economic Cooperation (Foster) to the Office of the United States High Commissioner for Germany, at Frankfurt¹

secret

Washington, June 22, 1951—9 p. m.

Ecato 668. Reference: a) Toeca 551, rptd Paris Torep 537, b) Toeca 611, rptd Paris Torep 590.² Agree that reluctance FedRep increase taxes and resist increasing admin and welfare expenditures weakens possibility obtaining satisfactory defense contribution. Not sure, however, that clarification Ger defense role would bring about basic change this trend.

Regardless of Ger’s status, question of equitable contribution to defense effort will arise. Resistance to occupation costs expected, but even after contractual relations Ger shld provide in substantial measure internal support for Allied troops stationed there, in addition to own forces.

Thus, establishment of a budget pattern rigid with non-essential expenditures wld jeopardize prospect of adequate contribution, and as result whole concept burden sharing, not only in FY 52 but in future also. Realize it is difficult for FedRep to resist present political pressures for increased nonessential spending. However, if Ger is to play proper part in Western defense, these non-defense expenditures wld any event ultimately require relative reduction favor defense expenditures with consequent greater political pressures to be faced.

Suggest, therefore, that you continue to exert maximum pressure on FedRep to increase taxes and decrease non-essentials.

In discussions with FedRep you shld re-emphasize:

(1) FedRep asked for increases Allied troop strength

(2) All countries will have to forego additional non-essential expenditures favor defense. Recent discussion over U.K. budget prime example.³

We not optimistic that your best effort this direction wld prevail in changing situation. However, in addition to importance precedent for future years of obtaining satisfactory defense contribution now, you aware that aid justification based in part on assumption defense contribution of DM 9 bil magnitude. In view fiscal situation outlined reftels (a) and (b) can we realistically continue to think in terms this level? Pls comment soonest.

Separate cable follows discussing reftel (b) at greater length.

Foster

1. Repeated to Paris.
2. Toeca 551, supra; Toeca 611, not printed.
3. For documentation concerning the size and presentation of the British defense budget, see volume iv .