254. Memorandum of Conversation0


  • German Aid to Underdeveloped Countries


  • The Secretary
  • Under Secretary Dillon
  • Under Secretary Merchant
  • Ambassador Dowling
  • Counselor Achilles
  • Assistant Secretary Kohler
  • Assistant Secretary Berding
  • Mr. Hillenbrand, GER
  • Mr. Vigderman, GER
  • Mr. McKiernan, GER/GPA
  • Mr. Miller, GER
  • Mrs. Lejins, LS
  • Foreign Minister Heinrich von Brentano
  • Ambassador Grewe
  • Mr. Felix von Eckardt
  • Dr. Karl Carstens
  • Mr. Franz Krapf
  • Dr. Franz-Josef Bach
  • Mr. Peter Limbourg
  • Mr. Karl-Guenther von Hase
  • Mr. Heinz Weber
  • Mr. Hermann Kusterer

Under Secretary Dillon noted that the President and the Chancellor had agreed that morning on the importance of aid to underdeveloped countries.1 Mr. Dillon said that he wished to make it clear how we—including Congress—look on this question. Although there has been an increase in the amount of German aid, the amount is still not in keeping with the Federal Republic’s economic capacity. The figures submitted by State Secretary Karport during his recent visit were the best example of this. There had been a marked increase in German aid from $32 million in 1957 to $105 million in 1958 and $125 million in 1959. However, [Page 675] this effort should be compared with the $390 million spent by the United Kingdom and the $500 million spent by France in Africa (excluding Algeria) in 1959. On the other hand, it must be admitted that there were substantial private German investments, possibly equaling private British investments.

The Under Secretary said that neither the United States nor the United Kingdom regards medium-term credits, i.e., credits for less than five years, as real economic aid. We are speaking only of longer-term credits. While we recognize that Germany does not have the experience of the United States and the United Kingdom in the post-war capital market, public opinion is an important factor and the German effort might be taken into consideration in Congressional discussion of the return of vested German assets.

Foreign Minister Von Brentano said that he had met Mr. Harkort in New York and been informed about the latter’s discussions here. The Foreign Minister said that he himself was not a financial expert and therefore preferred to avoid detailed discussion. However, the figures cited by Mr. Dillon did not adequately reflect the German effort. The Federal German Government cannot make direct loans and the actual figures for direct aid are thus small. However, there will be DM 50 million this year and DM 70 million next year. On the other hand, indirect contributions must be taken into account, for example the DM 1 billion lent to India and secured by “Hermes” guarantees. The Foreign Minister agreed that more should be done on long-range planning. He had met with Ministers Erhard and Lindrath a few weeks earlier to discuss such planning, and the possible use of profits from the Volkswagen plant had been discussed.

The Foreign Minister added that the Federal Republic is also obliged to pay $200 million in the European Economic Community to help in the development of associated territories. The next EEC meeting will receive more information on this subject from member countries, including the Federal Republic. The Foreign Minister hoped that more progress would be made on the German side by then.

In conclusion, the Foreign Minister said that the Germans concurred with the American view that the cold war might well be decided in the developing countries.

  1. Source: Department of State, Conference Files: Lot 64 D 559, CF 1610. Confidential. Drafted by McKiernan and approved in U on March 26 and in S on March 28. See also Documents 253 and 255.
  2. See Documents 250.