Foreign Relations of the United States, 1955–1957, Central and Southeastern Europe, Volume XXVI

136. National Security Council Report¹

NSC 5727

Washington, December 13, 1957.

DRAFT STATEMENT OF U.S. POLICY ON GERMANY

General Considerations

A. Significance of Germany to U.S. Policy

1. Germany is of vital importance to the United States:

a. Germany’s location in the heart of Europe and its considerable material and human resources make it a key area in the struggle between the Communist and Free Worlds.

b. The division of Germany is a chronic source of European instability and East-West friction, and a possible source of major armed conflict.

c. The future development and orientation of the Federal Republic will significantly affect the development of Europe as a whole.

2. U.S. policy toward Germany cannot be separated from the larger issues of U.S. global policy or European policy:

a. The reunification of Germany would involve a major readjustment in relations between East and West, because of the strategic importance to the USSR of its position in East Germany and because of the close relationship of the United States and Western Europe with West Germany.

b. Major U.S. decisions on such matters as U.S. troop deployment, use and disposition of nuclear weapons, and disarmament could have important effects on our relations with West Germany and hence on our position in Europe.

c. The development of a strong Western Europe will not be possible without German participation and cooperation in common European political, economic, and military institutions.

B. Major Policy Factors

Political and Economic Stability of West Germany

3. The Federal Republic is now the strongest economic power in Western Europe, has a stable political system, and is playing an increasingly prominent role in European and world affairs. As a result of the recent decisive electoral victory of Chancellor Adenauer’s government, the prospects are good, at least for the next few years, for a moderate stable government allied with the West. Political extremism of either the Left or the Right is not now significant. The continued economic and political strength of the Federal Republic is very important to the success of U.S. policy in Europe.

The Division of Germany and the Problem of Reunification

4. The division of Germany is a potential source of armed conflict and therefore a potential threat to U.S. security. Reunification will remain a central aim of West German policy and is a strong motivating force among the people of both East and West Germany. Until now West Germany has agreed with the United States and other Western powers in seeking reunification through free elections and avoiding any moves toward reunification which would jeopardize either West Germany’s security or a unified Germany’s political and military association with the West. At the same time, the USSR has rejected all Western proposals to settle the German problem through free elections, has insisted the problem must be settled by negotiation between the “two German states”, and more recently has indicated it would not enter into discussions of any kind with the Western Powers on the German problem. There is no early prospect of Soviet agreement to a reunified Germany which might become militarily associated with the West. The USSR would also demand a very heavy price from the West in exchange for any diminution of its tight control over East Germany.

5. The West Germans have three possible lines of policy open to them. Broadly stated, these are:

a. To seek a rapprochement with the USSR and the Satellites, in order to achieve reunification while preserving an acceptable degree of independence from Soviet control. This alternative would be given little consideration in West Germany unless the United States acted in such a way as to signify abandonment or critical reduction of defense commitments in Western Europe.

b. To follow an independent course in foreign affairs, eschewing military alliances and counting on a stalemate between East and West which would enable West Germany to achieve a strongly independent neutral posture. So long as their present confidence in the effectiveness and reliability of U.S. security assurances continues to exist, however, most West Germans would not consider this alternative seriously unless there was some better prospect than at present of attaining reunification thereby.

c. To remain firmly attached to the Western alliance, in confidence that the strength and resolution of the West will protect West Germany against any attack while it attempts to enlarge its role in the Western alliance and in the world at large. During the next few years close cooperation with the Western alliance seems likely to be regarded not only as the sole workable alternative for West Germany, but also as affording opportunities for expansion of trade and influence.

6. However, in order to retain West German association over the longer run and to reduce the likelihood of West German unilateral efforts to solve the reunification problem, the West must continue to convince the West Germans that it will seek, as and when possible, to achieve unification. The West Germans fear that the United States may make an agreement with the USSR of major character (such as a comprehensive disarmament agreement) without settling the problem of German unification. In addition, the United States might have difficulty convincing the West Germans of its sincerity in reunification were it to oppose a Soviet offer for reunification which the West Germans considered did not endanger their security and which was made at a time when the West Germans discounted the danger of Soviet aggressive designs. However, if the United States were willing to guarantee such a settlement, the readiness of West Germany to accept it would be increased.

7. Since the Geneva Foreign Ministers Conference of 1955 the Soviets have from time to time proposed the withdrawal of foreign troops from Germany, but have not linked withdrawals to German reunification. More frequently they have proposed withdrawal of all foreign troops from Europe, the liquidation of all foreign bases, and the abolition of all military pacts. In the West, various proposals for troop withdrawals have also been put forward, but these have been linked with an agreement on reunification and have been couched in terms of troop withdrawals from the center of Europe. Proponents argue that troop withdrawal proposals, if combined with satisfactory assurances of security for the West and with an agreement on reunification, might provide a feasible approach to removing the major irritant of a divided Germany. Proponents argue that such withdrawals would also reduce the threat of conflict which exists in the present confrontation of hostile Soviet and Western forces in the center of Europe. A major appeal to the United States of a plan providing for the withdrawal of Soviet troops from Eastern Europe, without jeopardizing the security of Western Europe, would be the elimination of the major instrument of Soviet control in the area. At present, however, there is no indication of any Soviet interest in a withdrawal of forces on both sides under conditions which would provide reasonable assurances of security for the West. Furthermore, the West German and other Western European Governments would be strongly opposed to any significant reduction in the number of U.S. forces stationed in Germany, until there is some indication of change in the Soviet position regarding security and reunification.

8. Proponents of German neutralization have argued that the Soviets will agree to reunification only upon terms which guarantee the neutralization of a unified Germany, and that the West Germans themselves may eventually accept a neutralized status outside NATO in order to achieve unification. They also argue that neutralization is not too heavy a price to pay for Soviet withdrawal from East Germany (and possibly other Satellites) and the diminution of the considerable dangers to peace inherent in the present division of Germany, the isolation of Berlin, and the confrontation of large hostile forces in Central Europe.

9. The United States has maintained that the neutralization of Germany is not acceptable under present conditions for the following reasons:

a. West German military association with Western Europe is very important to strengthen NATO capabilities in Europe.

b. Financial and political considerations probably would militate against relocation elsewhere in Europe of NATO forces withdrawn from West Germany, and might lead therefore to sizeable force withdrawals from the Continent.

c. A neutralized Germany would have such different political interests from those of the NATO allies that it would not participate fully in the efforts to achieve greater Western European integration. Without such German participation, Western European integration is not likely to progress far enough to enable Western Europe to achieve the strength and prosperity which would best assure its independence over the long run.

d. As long as Western Europeans continue to feel that their security depends on U.S. participation in a strong NATO alliance, a unilateral U.S. proposal for neutralization would undermine the present West German Government and ties with the West as well as the support of other European Governments for NATO. Efforts to obtain the agreement of our NATO allies to such a proposal would run serious risks of having the same results.

The Relationship of the Federal Republic to the Western Community

10. The participation of the German Federal Republic in a strong and effectively integrated Western European Community is essential if Western Europe is to realize its maximum potential as a counterweight to Soviet power. The success of the Community may likewise have a decisive bearing upon the completeness and dependability of West Germany’s association with the West. West German participation in an effective Western Community constitutes the best guarantee that West German strength will be used constructively, rather than independently, for the achievement of narrow nationalistic aims.

11. West German disposition to cooperate with other Western countries stems in part from belief in the over-all superiority of the West. Recent evidence of Soviet scientific achievements has led the West Germans to believe that the United States and its Western allies must increase their efforts in order to maintain Western military and over-all superiority.

12. To an increasing extent the Federal Republic has assumed a leading role in the movement for Western European integration, and is participating actively in the European Coal and Steel Community, the embryo European Economic (Common Market) Community, and the Atomic (EURATOM) Community. The West German attitude will be important in determining the future direction of these Communities, especially the rate at which the Six Members thereof² move toward full economic union and toward increased political unity. It will also be important in determining many related matters, such as the kind of commercial policy the Six Members adopt in their trading relations with the outside world, and the ultimate character of a broad free-trade area which has been proposed to associate the United Kingdom and other Western European countries with the Six. However, increased economic strength and the avoidance of financial crisis in France and the United Kingdom may be the critical factors in determining the rate of progress of these institutions; and should it prove to be essential for them to obtain substantial foreign financial assistance, the willingness of the West Germans to provide a proportion of such aid would be important.

13. The West Germans have some sense of dissatisfaction with their political relations with the West. They apparently expected, when they were given sovereignty, that they would enter more fully into the councils of the West. They feel that their actual and potential strength entitles them to play an increased role. They profess to find their role in NATO unsatisfactory. What they would probably like is a “political standing group” consisting of the United States and the United Kingdom, France and Federal Republic. The smaller European countries (particularly Italy and the Benelux countries), while recognizing German reunification as a U.S.–U.K.–French responsibility, are bitterly opposed to any system of regular Great Power consultation which they fear would exclude them from any voice in the formulation of Western policies.

The Federal Republic’s Relations with Eastern Europe (including East Germany)

14. The Federal Republic has made it a cardinal point of foreign policy, as recently confirmed by its severance of relations with Yugoslavia, not to maintain diplomatic relations with countries which grant diplomatic recognition to the so-called German Democratic Republic. It has made an exception only in the case of the Soviet Union.

15. The Federal Republic’s official relations with the Soviet Union, always quite reserved, have become increasingly cool. These relations have not thus far contributed to the achievement of the maximum objectives of either power—for the Soviet Union, the detachment of the Federal Republic from the West; and, for the Federal Republic, progress toward German reunification. Even with respect to the minimum objectives—for the Soviet Union, considerable expansion of trade and cultural relations; and for the Federal Republic, the repatriation of all German nationals in the Soviet Union—progress has been minimal.

16. In its relations with the Satellites other than East Germany, the Federal Republic appears to be moving toward a position of greater flexibility. In particular, the Federal Republic will seek to strengthen its economic ties in Eastern Europe. The West Germans consider that their interests are served by encouraging Communist deviation from Soviet hegemony. However, West German policy is as yet uncertain and cautious because of (a) the desire to prevent a broader recognition of the East Zone government; (b) uncertainty as to whether establishment of relations with Poland and other Eastern European countries would in fact loosen Soviet control over Eastern Europe; and (c) the extremely sensitive political issue of the Eastern boundaries of Germany.

17. Any expansion of West German influence in Eastern Europe which loosens the ties between the USSR and the Satellites would advance U.S. objectives in that area. In view of the problems just cited, however, this can best be accomplished in the immediate future through the development of West German economic relations with the Eastern European countries (other than the Soviet Union) rather than by the establishment of diplomatic relations. West German trade missions in selected Eastern European countries would provide for official West German representation and could, to the extent that the Eastern European governments desire political contact with the Federal Republic, provide a cover for such contact. However, more extensive consultation with the Federal Republic on U.S. economic and political policies affecting the Eastern European countries would help to enhance and direct West German energies in that area.

18. The Western Allies have taken the position that the Oder–Neisse line is temporary and that the final boundaries of Germany should be fixed in a peace settlement with the agreement of an all-German Government. They have taken no position on where the boundary should be. The Federal Government has from time to time hinted at the desirability of finding some compromise solution of the border question. However, it would be unwise for the United States to take a position on the boundary, at least until prospects for a settlement are more promising, because to do so would incur the ill will of either the Poles or the Germans, or both.

19. In East Germany the present Communist regime, though overwhelmingly opposed by the population, will be strongly entrenched as long as it is backed by massive Soviet military strength. The USSR has made clear its determination to maintain its power position in East Germany. The East German regime appears to be about to launch an intensified campaign to reduce Western influence on the population by reducing contacts between East Germany and the West. The Federal Republic fears Western involvement with Soviet military forces in the event of any large-scale uprising and has therefore strongly encouraged the East German population in its avoidance of active measures to change the existing situation. The Federal Government favors continued non-official economic relations with East Germany because it considers the Soviet Zone a source of needed commodities (e.g., brown coal). It also believes that a limited shoring up of the East German economy is an important factor in reducing the danger of an East German uprising and is a humanitarian duty towards less fortunate countrymen. (For a fuller discussion of U.S. policy toward East Germany, see Supplement II to this paper.)

Berlin

20. The Berlin situation calls for the utmost vigilance on the part of the Western Powers. The Western Powers are publicly committed to defend their position in Berlin, and the loss of this position would have incalculable consequences in undermining the Western position in Germany and the world at large. Yet Berlin remains isolated behind the Iron Curtain and exposed to constant Communist pressures and harassment. While the pattern behind recent increased difficulties is not easy to discern, it seems probable that Communist efforts are directed at this time more toward sealing off the Soviet Zone from Western influence than toward a major interference with the Western lines of communication to Berlin. (For a fuller discussion of U.S. policy on Berlin, see Supplement I to this paper.)

The Federal Republic’s Role in Western Defense

21.³ Because West Germany was not psychologically or administratively prepared, some delay and difficulty was inevitable in the creation of West German armed forces. But the principal obstacles to building up an effective West German force have been, and will probably continue to be, uncertainty as to the basic strategic concepts upon which forces and weapons systems should be built and, to a lesser degree, a lack of popular enthusiasm for the costs and sacrifices involved. Force goals for West Germany, originally worked out in consultation with the West German Government in the course of EDC planning, were endorsed by NATO in 1952 and were established by the North Atlantic Council in 1955 as a major contribution to the “shield concept” for the defense of Europe. West Germany will fall far short of attaining these goals ([less than 1 line of source text not declassified] Army divisions by the end of 1958, [less than 1 line of source text not declassified] air squadrons by the end of 1959, and an overall personnel strength of [less than 1 line of source text not declassified] men by the end of 1959). In December the NATO Council approved the following West German force goals for 1958: [less than 1 line of source text not declassified] Army divisions, [less than 1 line of source text not declassified] naval vessels, and [less than 1 line of source text not declassified] air squadrons (including [less than 1 line of source text not declassified] undergoing operational training). West Germany is expected to meet these 1958 goals. Following approval (probably in the spring of 1958) of the NATO Military Committee Document (MC–70)⁴ on minimum essential NATO force requirements during 1958–1963, in the consideration of which West Germany is participating, revised West German military plans for the period beyond 1958 can be expected.

22.⁵ The Federal Republic presently has approximately 120,000 men in the armed forces, and recent planning figures show an interim strength goal for the armed forces (excluding territorial forces) of 303,000 men by 1961. The Army consists of seven divisions: three infantry divisions already committed to NATO; two armored; one mountain; and one airborne. All seven are understrength and possess only a limited combat capability. By March 31, 1959, the West Germans expect to have nine divisions, one at only brigade strength. The Navy’s present combat capability (principally minesweeping) is quite limited. A naval construction program is underway but will not be completed until 1961. The Air Force is still being organized and trained and has no combat units—primarily because of the difficulty of obtaining qualified pilots and land for airfields, and because of preoccupation with the implications of advanced aircraft types and missiles. West Germany has recently indicated an interest in integrating short-range tactical missiles in its NATO-committed forces. West German defense expenditures, although mounting, are only about 4.4% of gross national product as compared with 10.4% for the United States, 7.9% for the United Kingdom, and 7.6% for France. However, the Federal Republic has indicated to NATO that West German defense expenditures will increase sharply in 1958 and subsequent years.

23. The United States has agreed to furnish the Federal Republic approximately $900 million of military equipment as grant aid. Most of this matériel has now been delivered and no further aid is now contemplated, except for nominal amounts for training and possibly a modest mutual weapons development program. Present West German contracts for arms purchases outside West Germany total $1 billion, with approximately one-third of that total place in the United States. The West Germans at present are producing little military equipment other than transportation equipment and soft goods. West German manufacturers have been reluctant to engage in arms production, but this attitude is changing.

24. The West German financial contribution to the support of other NATO forces in West Germany has undergone successive annual reductions from a level of $1.7 billion per year agreed to in May 1952 to a level of $346 million for the period May 19, 1956–May 19, 1957. In May 1957 negotiations resulted in a West German agreement to make what the West Germans claimed to be a “final” contribution of $285.7 million, of which the U.S. portion would be $77.4 million (half that of the preceding 12 months). The United States accepted this reduction, but reserved the right to request an additional $77.4 million for the balance of U.S. FY 1958, after the West German election. In November 1957, the United States sent a formal note requesting the $77.4 million, to which no reply has yet been received.⁶ On December 3, 1957, the British, after failing in negotiations to have the Germans furnish 50 million pounds ($140 million) to cover the Deutschemark requirements of British troops in Germany for the year beginning April 1, 1958, invoked in the NATO Council the clause in the Brussels Treaty under which the United Kingdom reserved the right to withdraw troops committed to the Continent in case they encountered financial difficulties, including those of a foreign exchange nature. In doing so the British said that if satisfactory financial arrangements could not be worked out they would have to reconsider the whole question of how many troops they could maintain on the Continent.

25. Inability on security grounds to disclose more fully to the West Germans information regarding certain weapons systems, has inhibited the Federal Republic in making the decisions needed for a rapid military build-up. Security factors also have limited the scope of technical relations between West Germany and the arms-producing countries, particularly the United States, and have prevented the effective utilization of West German potential in the research and development field. The NATO meeting and implementation of the principles enunciated in the Eisenhower–Macmillan talks should facilitate disclosure of technical information to the West Germans, particularly if the industrial security system in West Germany is improved. The prohibitions in the Brussels Treaty on the West German manufacture of certain types of weapons, particularly missiles, also limit the West German contribution to the development and production of these weapons. These limitations (other than those on atomic, biological or chemical weapons) can be amended or cancelled by a two-thirds vote of the Western European Union (WEU) Council of Ministers, provided a request from the Federal Republic is supported by a recommendation by SACEUR. The Federal Republic has not been disposed to date to initiate requests for modifying these limitations, although there have been indications that the West Germans are interested in undertaking with their neighbors, particularly France and Italy, research concerning nuclear weapons, leaving production of such weapons to their allies who are not restricted by treaty. Additionally there are indications that the West Germans are looking toward the development and manufacture in West Germany of shorter-range missiles.

The Federal Republic’s Relation to Underdeveloped Areas

26. The Federal Republic has exhibited a lively interest in the underdeveloped areas. Its principal interest has been in expanding West German trade, but it has exhibited a healthy awareness of the basic political problems in these areas and of the need for combatting Soviet influence.

27. It is evident from the size of West German gold and foreign exchange reserves ($5.75 billion as of October 31, 1957) and the current rate of increase (about $2 billion a year) that the West Germans could provide a great deal more capital for foreign investment than they have provided in the past. Short and medium term credits have generally been provided where necessary to maintain the level of West German exports. However, the volume of West German long-term lending and direct investment by West German firms has not been large, in part because of the strong internal demand for capital in West Germany itself. The government has been reluctant to make public funds available for public lending even in a fashion analogous to the U.S. Ex-Im Bank. There have recently been a number of West German suggestions for increased coordination or new methods of coordination with the United States and other industrialized countries in the assistance field, but these suggestions appear to reflect hopes that further U.S. or international funds could thereby be obtained to supplement whatever rather circumscribed efforts the West Germans have been prepared to make themselves.

28. Recently there have been some indications of a greater willingness on the part of the West Germans to extend credit abroad,⁷ although they are still attempting to limit their credits to sound loans of medium term. West German officials have begun to give active consideration to the establishment of a new government mechanism to facilitate extension of external government credits.

Basic Objectives

29. Restoration by peaceful means of Germany as a united state, firmly attached to the principles of the United Nations, with freedom of action in internal and external affairs, capable of resisting both Communism and neo-Nazism.

30. Firm association with the West of the Federal Republic and ultimately of a united Germany through the North Atlantic community, preferably as a member of an integrated European community.

31. A contribution by the Federal Republic, commensurate with its human and material resources, to the defense of the West and to the solution of problems confronting the West.

32. Prevention of Soviet domination over all Germany and elimination of Soviet power in East Germany.

33. Maintenance of the Western position in Berlin, pending the reunification of Germany.

Major Policy Guidance

34. Continue to promote effective actions by the Federal Republic to further European integration through such arrangements as the Coal and Steel Community, the Common Market, EURATOM, and ultimately the Free Trade Area.

35. Seek a more rapid build-up of the West German forces to be contributed to an integrated NATO defense and a greater utilization of West German resources for the common defense. In particular:

a. Support the elimination of the restrictions in the Brussels Treaty on West German contributions in the missiles field.

b. Encourage the utilization of the West German scientific potential for Western defense.

c. Promote the development of a mutually acceptable degree of industrial security which will permit a fuller utilization of West German facilities and resources for weapons production and for research and development.

d. Establish through NATO agreed force goals for West Germany and encourage the development of West German forces along lines which will result in their inclusion in an integrated NATO military structure and which will not involve the establishment of a completely independent West German military capability.

e. Continue to provide essential U.S. training for West German military personnel, including a minimum amount as grant aid for certain types of training considered necessary to maintain U.S. influence upon development of the German defense forces.

f. Provide, as appropriate, assistance under the Mutual Weapons Development Program.

g. Be prepared to sell to West Germany appropriate types of materiel consistent with availabilities and priorities.

36. Continue to seek an appropriate West German financial contribution to the support of Western forces in West Germany until West Germany gives evidence that it is assuming its full responsibility for achieving NATO agreed force goals for West Germany.

37.⁸ On the basis that it is in the best interest of all countries concerned to discourage production of nuclear weapons by a fourth country, seek to persuade West Germany not to undertake independent production of such weapons. Assure West Germany that the United States will actively support the NATO decision to establish stocks of nuclear weapons which would be readily available for the defense of the alliance in case of need.

38. Maintain West German confidence in the intention of the United States to fulfill its NATO obligations.

39. Support a more significant role for the Federal Republic within NATO as it evidences its willingness to assume its full military responsibility within NATO.

40. Make clear to the West Germans that while urging them to accelerate their defense activities we are also urging (a) the United Kingdom to continue to make a substantial contribution to the defense of Continental Europe and (b) France to reconstitute its forces committed to NATO.

41. Encourage the Federal Republic to assume a greater measure of responsibility in activities of international organizations where U.S. interests are likely to be advanced thereby.

42. Encourage substantially increased West German financial and technical assistance to underdeveloped areas, both directly and through appropriate international institutions, and West German cooperation in countering Soviet penetration of such areas. In particular:

a. Consult in appropriate ways with the Federal Republic with a view to inducing it to assume increased responsibilities toward the underdeveloped areas.

b. Make clear to the West Germans that U.S. public funds cannot be expected to be available in sufficient amounts to make it unnecessary for West Germany itself to extend additional credit if its exports are to be maintained.

43. Continue to press for the reunification of Germany through free all-German elections, and under conditions which would take into account the legitimate security interests of all countries concerned. Make clear that reunification is essential to any genuine relaxation of tension between the Soviet Union and the West, but that the United States will not agree to any reunification involving (a) Communist domination of a reunified Germany; (b) a federated Germany which perpetuates the existing Government of the German Democratic Republic; (c) the withdrawal of U.S. and other allied forces from West Germany without an effective military quid pro quo from the Soviets and the Satellites; or (d) the political and military neutralization of Germany.

44. [Although it is not now propitious for the United States to advance major alternatives toward achieving German unification, such as neutralization, the United States should give continuing consideration to the development of such alternatives (which may be later required by developments in either West Germany or the USSR or both) with a view to the long-run solution of the unification problem.]⁹

45.¹⁰ Encourage the development of economic relations at this time between the Federal Republic and the countries of Eastern Europe (other than the Soviet Union) on a basis consistent with U.S. economic defense policies and over-all trade and assistance policies which will contribute to the development of the independence of these countries from the Soviet Union. To this end consult with the Federal Republic from time to time.

46. Maintain the Western position in Berlin, even to the extent of resisting Soviet pressure at the risk of a general war, in accordance with Supplement I to this paper.

47. Hamper the Soviets from making effective use of East Germany and oppose efforts to achieve international recognition and internal acceptance for the East German regime, in accordance with Supplement II to this paper.

1. Source: Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5727 Series. Secret. A cover sheet, a note from NSC Executive Secretary Lay stating that the Report would be considered by the Council on December 23 (although not actually done until February 6, 1958), a table of contents, a financial appendix, and a military annex are not printed. Supplement I (Berlin) and Supplement II (East Germany) are printed as Documents 213 and 237.
2. Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. [Footnote in the source text.]
3. A notation on the source text indicates that paragraph 21 was revised on January 3, 1958. No original text of the paragraph has been found in Department of State files.
4. Not found in Department of State files.
5. A notation on the source text indicates that paragraph 22 was revised on January 2, 1958. No original text has been found in Department of State files.
6. As the West German contribution to the support of U.S. forces in West Germany has declined, German dollar receipts from expenditures by U.S. military forces in West Germany have risen. Total receipts from such expenditures have reached a level of $408 million in FY 1957 and, without the additional $77.4 million contribution requested from the West Germans, could reach a level of $500 million in FY 1958 exclusive of offshore procurement. [Footnote in the source text.]
7. The West Germans have made the maximum portion of their IBRD subscription which is subject to call available for lending by the Bank and have in addition lent $175 million in U.S. dollars to the Bank. The Government has established a very small foreign aid program with funds of $12 million, largely for technical assistance, $2 million of which it has agreed, through NATO, to lend to Iceland. West Germany has also committed itself to providing a $200 million contribution to the overseas investment fund of the Common Market. It also appears probable that credits will be provided to India which will postpone payments of perhaps $250 million coming due on Indian imports from West Germany. Some credits for new Indian orders may also be made available. [Footnote in the source text.]
8. A notation on the source text indicates that paragraphs 37–42 were revised on January 2, 1958. No original texts have been found in Department of State files.
9. Supported by Treasury, Budget and ODM. [Brackets and footnote in the source text.]
10. A notation on the source text indicates that paragraphs 45–47 were revised on December 18, 1957. No copies of the original texts have been found in Department of State files.