49. Telegram From the Department of State to the Embassy in Germany 0

662. For Ambassador from Ball. Paris pass USRO Stoessel, McGuire and Riddleberger. Two separate subjects of current interest here are [Page 126] (a) additional “burden-sharing” arrangements with FRG to help alleviate pressures on US balance of payments, especially in regard to foreign exchange drain connected with present as well as increasing US military force level in FRG, and (b) overall magnitude FRG aid for LDC’s 1962 and following years.

Defense and Treasury extremely anxious transfer to FRG large portion foreign exchange costs involved in stationing US troops in FRG, including foreign exchange costs any American troop build-up there. Present indications are this year’s deficit US balance of payments if continues to increase at present rate could approach $3 million. While generally recognized inadvisable take any action this time that might interfere with current negotiations, felt some sort general exploration subject may be called for now.

Anticipate renewed efforts after September 17 by US agencies and nearly all LDC’s to obtain large-scale developmental assistance for LDC’s from FRG. I intend coordinate US approaches this regard primarily through DAG. To provide basis US estimate how much aid FRG may be expected or persuaded render various countries, as well as to assure continued, active and effectual FRG participation aid field, more definite FRG commitments essential. Elections soon will no longer be excuse not facing up to much more substantial budgetary appropriations this purpose.

Your comments these subjects urgently requested, including your opinion advisability raising them with Brentano in most general way during FM Washington meeting. Approach on aid, of course, would be made entirely separately from discussion troop costs.

  1. Source: Department of State, Central Files, 811.10/9-1261. Secret; Priority; Limited Distribution. Drafted by Joseph E. O’Mahony (EUR/GER) on September 10; cleared by Freshman, Sullivan (Treasury) and Henry J. Kuss, Jr. (DOD/ISA) in substance, Sidney Schmukler (E/OFD) and John C. Renner (EUR/RA) in draft, and David Korn (S/S); and approved by Ball. Repeated to Paris.