Foreign Relations of the United States, 1969–1976, Volume XXIX, Eastern Europe; Eastern Mediterranean, 1969–1972

197. Telegram From Helmut Sonnenfeldt of the National Security Council Staff to the Presidentʼs Assistant for National Security Affairs (Kissinger)¹

Washington, July 30, 1970, 0024Z.

WH 01228. Subject: Romanians Want a Better Deal on Flood Assistance.

1. We are facing an issue with the Romanians which turns on the conversation the President had with Foreign Minister Manescu during his San Clemente visit.² The issue is the degree of generosity we should show the Romanians in connection with our offer of flood relief assistance.

2. Ambassador Bogdan came to see me on July 24 to urge that sympathetic attention be given to the Romanian request for some action to save the Romanians from having to pay some $2.3 million, mostly in hard currency, for transportation costs involved in getting the $6 million of PL 480 emergency feed grains to Romania. Bogdan said he discussed this with you twice including on July 21,³ and that you told him to follow up with me. All I could do in the event was to listen to Bogdan without being able to give him more than general assurance that we would try to be helpful, which I gather from Bogdan you had done also.

3. In Bucharest, meanwhile, Manescu called in Meeker⁴ to make the same appeal which he said was based on his conversation with the President in San Clemente. The Romanians seriously need the greatest amount of feed grains, but are hard pressed to come up with the transportation costs. They reason that for them to pay these costs would effectively cut the $6 million assistance by one third. When the assistance had been considered earlier, no one focused on the transportation costs.

4. In fact, we have been quite generous in putting together the current assistance program. In calculating the $6 million figure, we had used a rate lower than the Commodity Credit Corporation rate, and thereby we assumed some $300,000 extra costs. In addition, we had already offered to assume the differential cost (some $1.2 million) on the 50 per cent of the tonnage that we require to be shipped on US bottoms (US flag carriers cost about double that of foreign carriers for these commodities). Thus, the $6 million grant in fact amounts to a budgetary cost of $7.5 million.

5. State has now come up with an option⁵ to present to the Romanians—reduce the amount of grains granted from $6 million to about $5.2 million, but pick up the full cost of the 50 per cent of the tonnage that must be carried in US ships. The total budgetary cost to us would remain roughly the same, but the costs to the Romanians would be reduced to half, most of which would be in soft currency. However, Romanians would then receive $0.8 million less feed grains. This alternative option is the best offer that the bureaucracy has been able to come up with. Agriculture particularly had balked at any greater budgetary costs in part because they could be accused by Congress of increasing what amounts to a subsidy for a potential grain export competitor.

6. The Romanians will probably consider this alternative inadequate because it would reduce the amount of the badly needed feed grains, but they would of course accept either this or the original proposal. The question therefore relates to the extent of the commitment to Manescu made by the President. But, the question is how generous we wish to be.

7. Bergstenʼs office and I have investigated other alternatives which would be viable if White House pressure was applied to the bureaucracy. We could continue the $6 million grain offer and pick up the entire cost of ocean transportation. This would mean an additional budgetary cost to us of some $3.5 million over either of plans offered by the bureaucracy. Under this, the Romanians would pay nothing.

8. The other possibility would have us pay the full transportation cost of the 50 per cent shipped in US bottoms (as under Stateʼs alternative), but would retain the full $6 million grain offer (not reduced to $5.2 million as in Stateʼs alternative). This would mean an additional budgetary cost to us of some $1.15 million over either of Stateʼs proposals, the Romanians would still have to pay some $1.15 million, probably in soft currency, for the other half of the transportation.

9. Please instruct whether you consider Stateʼs proposals (para 4 and 5) consistent with the Presidentʼs commitment to Manescu, or whether you wish White House pressure applied in order to increase the generosity along the lines of one of the alternatives in para 7 and 8. This is a matter of some urgency.⁶

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 703, Country Files—Europe, Romania, Vol. III Jul 1970–Dec 1971. Confidential. Sent to Haig for Kissinger, who was in San Clemente. According to a typed notation the message was received in the Los Angeles command center at 7:37 p.m. July 29.
2. June 29. No memorandum of conversation was found. A June 28 briefing paper is ibid.
3. No record of a discussion has been found.
4. July 17. Meeker reported on his discussion in telegram 1815 from Bucharest, July 18. (National Archives, Nixon Presidential Materials, NSC Files, Box 703, Country Files, Europe, Rumania, Vol. III, Jul 1970–Dec 1971)
5. Outlined in telegram 119058 to Bucharest, July 24. (Ibid.)
6. Kissinger wrote on the message: “Take 4 & 5. It is something. HK”