96. Circular Telegram From the Department of State to Certain Posts1
2237. Direct and indirect US expenditures associated with Viet Nam military operation and support thereof are exerting adverse impact on US balance of payments. Cabinet Committee on Balance of Payments is seriously concerned with these developments and US Government at highest level desires mitigate this impact to utmost feasible extent.
US assumption of worldwide military and political responsibilities provides major benefits, economic and financial as well as political, to nations of Western Europe. Europeans should not expect US to continue carrying financial burden these responsibilities with Viet Nam costs as they now appear and simultaneously to fulfill demands of finance ministers and central bank governors with respect to balance of payments equilibrium without resort to measures which are not in interest either of Europe or US. We believe time has come when European nations should demonstrate intention to cooperate more fully with US in financial field.
US will be making financial approaches to most industrial nations of Europe which have long-term debt to US seeking prepayment of all or part of outstanding obligations. In some cases there will also be discussions concerning reserve policies of monetary authorities. Since extreme care must be taken to avoid misinterpretation of US action and loss of confidence in the US dollar, approaches will be conducted quietly under cover provided by scheduled multilateral meetings and with approaches tailored to specific country situations. In some cases active support of Ambassador and political elements of Embassy may not be necessary, but where requested and likely to contribute to success of endeavor such support should be provided.
Separate messages to individual posts follow.
- Source: Department of State, Central Files, FN 12 US. Secret; Limdis. Drafted by F. L. Widman (Treasury) on May 13; cleared by Winthrop Knowlton (Treasury) (in draft), Ralph E. Lindstrom (E/OMA), Francis M. Bator, Marvin W. Humphreys (S/S), Walter J. Stoessel (EUR) (in draft), and George S. Springsteen (U); and approved by Anthony M. Solomon (E). Sent to Bonn, Brussels, The Hague, Madrid, Rome, Vienna, and Paris.↩