261. Letter From President Eisenhower to Chancellor Adenauer 0

Dear Mr. Chancellor: I am writing to you on a personal and confidential basis not only as my good friend of long standing but also as the leader of a nation whose economic and financial power has grown to great dimensions in the community of the free nations. With that power has come an equal responsibility for the success of free nations and our free economies in a critical and rapidly evolving era of the world’s history. Upon us both rest great responsibilities that, I think, our two governments should consider together.

In the financial and economic sphere, no less than in the political and strategic sphere, mutual understanding and cooperation between Europe and the United States are vital.

In the United States, we recognized this when in 1948, we established the Marshall Plan. Despite impending elections, inflationary pressures, and heavy demands upon our resources from our own people, we gave a priority to the pressing need to restore Europe to economic and financial health and strength. We diverted goods to Europe and provided from our budget the means which Europe lacked to finance these goods.

After the Marshall Plan came the need for military assistance to fend off the Communist threat and the need to give aid to less-developed countries. At that time, I myself testified before our Congress, as Commander of the NATO Forces, that the need for military assistance would be temporary. Ever since, the American people have hoped that the burden of our foreign expenditures, economic and military, would eventually be lifted or at least substantially reduced by the cooperation of other nations.

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Today the situation has substantially changed. The success of the Marshall Plan has led to the full recovery of Europe. The United States is now paying out to foreign countries more than we receive from our sales to them. This means that certain surplus countries, and notably the Federal Republic of Germany, are accumulating short-term dollar claims on the United States on a large scale. We meanwhile have lost, in the course of two and a half years, substantial amounts of gold while at the same time additional short-term dollar holdings have accumulated in other industrial countries. I believe that this burden upon our balance of payments should be reduced in a very substantial degree during the forthcoming year.

The Federal Republic is now the country which most nearly approaches the international financial and economic situation of the United States in 1948. It is consistently taking in from other countries far more than it is paying out. A continuation of this situation would stimulate demands for trade restrictions and threaten the future of economic development in the free world.

I have great admiration for the statesmanship which you have displayed in leading the Federal Republic to unparalleled internal economic revival and in promoting the constructive advance of the European Continent. I now ask you to give your personal attention to the wider area of your nation’s financial and economic relations with the United States on the one hand and the developing countries on the other.

The broad courses of action are clear. Long-term financing from Germany is needed for development in the less-developed areas. A way should be found also to finance the dollar cost of defense which now falls on the United States.

Finally, a larger market is needed in Germany for the goods of the United States and of the developing countries.

Action along these lines would conform to economic reality. Moreover, it is essential to maintain the political strength of the free world. And insofar as aid to less-developed countries is concerned, it commends itself both as a moral act and one in the self-interest of every industrialized nation.

Failure to make prompt, decisive and substantial progress in these directions may well set in motion cumulative events of a serious disruptive character, deleterious to world trade and prejudicial to the position and prestige of both our countries as leaders of the free world. Once set in motion these disruptive forces would be difficult to restrain. In my view, the next year is an important one in this respect.

I am sure that you will appreciate the strength of my conviction in this regard, but naturally I can set forth in this letter only the outline [Page 694] of the problem. Many technical and detailed considerations need to be discussed between our two governments. For such discussions with your staff, Cabinet, and, if you so desire, yourself, I suggest that I send to Bonn Secretary Anderson and Under Secretary Dillon of my Cabinet at a time that may be convenient to your government and to my two representatives. The two representatives I suggest have already had the opportunity to discuss these problems with Minister Erhard and President Blessing.

With warm regard,

Sincerely,1

  1. Source: Department of State, Presidential Correspondence: Lot 66 D 204. Personal and Confidential.
  2. Printed from an unsigned copy.