104. Editorial Note
West German Chancellor Ludwig Erhard visited Washington September 24–27, 1966. In a telephone conversation on September 24, most of which focused on a possible cut or suspension of government spending along with a tax bill to balance expenditures and revenue and to bring about an easing of interest rates, President Johnson and Secretary of the Treasury Fowler also discussed what the President might say personally to Erhard on the question of U.S.-West German “offset” payments for the support of U.S. forces in Germany. Fowler emphasized that the Germans should “pay up in advance … their money obligations to us … between now and next June 30.” They had “paid up to date only 20 percent of their 2-year commitment,” he continued, and “we ought to be awfully firm on Erhard to pay up,” especially since the German economy was in good financial condition.(Johnson Library, Recordings and Transcripts, Recording of Telephone Conversation between President Johnson and Secretary Fowler, September 24, 1966, 4:15 p.m., Tape F66.26, Side A, PNO 1) For a memorandum of President Johnson’s conversation with Erhard on September 26 on this and other defense issues, see Foreign Relations, 1964–1968, volume XIII, pages 471–478.
In a telephone conversation with President Johnson later the same day, Secretary of Defense McNamara reported on his just concluded meeting with German Defense Minister Kai-Uwe von Hassel. On the question of offset payments, McNamara said that the German position was complicated, and he concluded from his conversation with Von Hassel that the Germans “would fulfill the present offset agreement, but it would lag along a while.” McNamara argued that “one of our objectives must be to put ourselves in a position so that we can say to Mansfield that they did fulfill it, even though it’s by hocus pocus.” He concluded that the result would be “satisfactory to me, and I think Joe [Fowler] would [Page 304] probably accept it grudgingly ultimately.” (Johnson Library, Recordings and Transcripts, Recording of Telephone Conversation between President Johnson and Secretary McNamara, September 24, 1966, 7:40 p.m., Tape F66.26, Side B, PNO 1)