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

ECA message files, FRC acc. no. 53 A 278: Telegram

The United States High Commissioner for Germany (McCloy) to the Administrator for Economic Cooperation (Foster)¹

secret   priority

Frankfurt, March 23, 1951—8 p. m.

Toeca 301. Ref (a) Frankfurt Repto 186 rptd Dept Repto 1218,² (b) Ecato 290 rptd Torep 1898.³ Unquestionably Berlin will continue require external assistance at least through FY ’52 if US policy objectives to be achieved. Believe generally agreed throughout interested US agencies inadvisable grant Berlin separate dol aid. You are familiar difficulties drafting para in bilateral agreement re FedRep aid to Berlin which wld be satisfactory to both signators. While this para has been useful to us in negots with FedRep, it does not permit rigid definition volume support FedRep obligated to give Berlin. In practice we have had little difficulty getting FedRep agree to our proposals use ECA and GARIOA funds aid Berlin. However, on aid to budget and stockpile where FedRep’s own budgetary funds involved considerably less successful in obtaining level financial support desired by us.

If we are to have reasonable prospect success in obtaining commitment from FedRep to carry Berlin budget deficit in entirety, must be in position inform FedRep this type aid considered to be part of def contribution. As reported Bonn tel to Dept 660, rptd Paris 192, satis reply recd from Adenauer in response McCloy ltr of Mar 6.⁴ Do not recommend, at least for present, making further dol aid contingent on FedRep aid to Berlin budget. Our judgment extremely ill-advised introduce further condition to substance McCloy ltr since wld tend prejudice maximum immed progress toward reorientation FedRep’s econ and fin policies by diverting concentration of effort from dominant issue.

Can expect considerable divergence of views as to what types expenditures constitute def contribution. Also expect at least several months will elapse even before guiding principles established. Ref (b) was sent in full consideration larger context. Our thinking influenced by time element and necessity conserve GARIOA counterpart. Notwithstanding drawback our suggestion to count Berlin budget aid part FedRep contribution prior to establishment guiding principles, it shld not set dangerous precedent since in our view all FedRep direct aid to Berlin must ultimately be included FedRep contribution if such aid is to continue at required level. Must face up to fact bilateral agreement has serious limitation vis-à-vis obtainment aid for Berlin from FedRep. If you accept our view inadvisable tie in Berlin budgetary aid to allocation dol aid balance FY ’51, believe you will concur announcement to FedRep Berlin aid considered by US as part def contribution.

Ref (b) recd after preparation this cable. Since negots budgetary aid to Berlin shld not be further delayed, pls expedite promised definitive reply.

McCloy

1. Repeated to Paris and Berlin.
2. Not printed; it requested HICOG to spell out “implications of considering FedRep contribution Berlin budget to be a defense contribution.” (ECA message files)
3. Not printed; it asked HICOG to refrain from any statement that Federal aid to Berlin would be judged as part of the Federal Republic’s contribution to defense. (ECA message files, box 78, Frankfurt Ecato)
4. Neither printed.