MSA telegram files, lot W–130, “Bonn Tomus”: Telegram

No. 149
The United States High Commissioner for Germany (McCloy) to the Mutual Security Agency1

confidential priority

Tomus 18. Personal for Kenney2 and Harriman. Result consideration of econ factor relevant to determination amount FY 1953 aid for Ger, MSA Mission has estimated aid requirements at $135 million. Documents being forwarded prior to discussions Wash next week with Harris. On assumption ratification EDC treaty and contracts concluded by 1 Jan 1953 Mission forecast deficit $135 million. However, Mission believes illustrative figure $113 million representing across the board cut of 29.5% in original estimates may be sufficient.

While case for econ aid to Ger is compelling one, especially in view of West support and Berlin requirements, I want to emphasize polit considerations in favor of continued aid at least equivalent to [Page 349]FY 1952 level were never greater. As discussions and debate over the contracts and EDC treaty alightning GDR [aligning GFR?] with West gain momentum and attacks on contracts and treaty are intensified, failure to announce continuance of substantial econ aid to Ger while other Eur countries are continuing to receive it wld probably result in adverse reaction prejudicing ratification. Opposition has always maintained that Adenauer Govt cld have obtained more favorable treatment from West by harder bargaining and wld cite diminution in aid greater than that required by across the board reduction neces result reduction in appropriation, as evidence govt’s softness on entire complex its relationship to West. Even Adenauer’s supporters wld be shaken by an announcement that Amer econ aid is being substantially reduced or cut off just at the moment when Gers are getting ready to commit themselves to West and are undertaking considerable financial obligations for def rearmament, debt repayment, etc. Substantial reduction of aid to amount below last year’s level or complete cessation might have repercussions serious enough to shake stability of coalition.

Because of delicacy of Ger polit situation and Gers peculiar sensitiveness to any suggestion of discrimination against them I strongly urge, if only from polit angle, that aid be continued. Even tho I believe continuation of aid fully justifiable on econ grounds alone, particularly because of def requirements neces if, as it seems most likely, def period commences 1 Jan, I want to particularly urge careful consideration of aid decision in light of its effect on Ger’s internal polit situation and her integration with West.

McCloy
  1. Repeated to Paris personal for Draper.
  2. W. John Kenney, Deputy Director for Mutual Security.