Foreign Relations of the United States, 1958–1960, Berlin Crisis, 1959–1960; Germany; Austria, Volume IX

258. Memorandum of Discussion at the 439th Meeting of the National Security Council⁰

Washington, April 1, 1960.

[Here follow a paragraph listing the participants at the meeting and agenda item 1.]

2. Significant World Developments Affecting U.S. Security (NIE 23–60)¹

Mr. Dulles summarized NIE 23–60 dated March 22, 1960 on “The Outlook in West Germany”. He said the Estimate had concluded that the West German state would continue to be governed by the Adenauer coalition (Christian Democratic Union/Christian Socialist Union) beyond 1961, even in the event of the death of Adenauer. West Germany would reject extremism and militarism, would probably continue to enjoy economic prosperity, would seek security in the context of the Western alliance, and would press its own views vigorously and assert its independence to a greater extent than heretofore. This forecast could be upset by various contingencies which now seemed unlikely, such as an international economic depression which would affect major portions of the West German export market. A serious impairment of Western rights in Berlin or a major withdrawal of U.S. forces from Western Germany would also tend to be a severe shock to the government and people of West Germany. Adenauer and his associates have come to have some doubts about U.S. determination to risk general war for the defense of Western Europe. These doubts were reinforced by the doubts Adenauer experienced before his recent trip to the U.S. concerning our determination to remain firm on the question of Berlin. If there is any serious impairment of Western rights in Berlin, the West Germans would demand additional guarantees and concrete manifestations of support from the West. West Germany would not oppose some reduction of U.S. forces in West Germany after the latter country’s own military build-up had resulted in the creation of substantial military strength. The West Germans will continue to emphasize the maintenance of a strong NATO to which the U.S. is firmly bound. Because of their misgivings over our determination, the West Germans will be inclined to press their own interests strongly and to take an independent line in foreign policy. West Germany will press for independent weapon production capabilities, will seek an increase in U.S. missiles stationed in Europe and a voice in their employment. West Germany may also want a continental military system with its own nuclear capability. Mr. Dulles then reported that NIE 23–60 contained a dissent by the State Department, which believed that a growing lack of confidence in Germany concerning the ability of the West to protect the political and territorial integrity of the Federal Republic, exploited by continued Soviet pressure, could stimulate a trend toward nationalistic independence on the part of the West Germans, a trend which could lead ultimately to the isolation of West Germany and the creation of a situation from which accommodation with the USSR might result. The majority view in the Estimate was that accommodation with the USSR could be anticipated only if West Germany became convinced that it was being abandoned by the U.S. Mr. Dulles said the Estimate also concluded that close ties with France would be a key element in West German policy, barring the departure of De Gaulle. However, any successor to Adenauer might have less cordial relations with De Gaulle than Adenauer has. Finally, Mr. Dulles said West Germany would probably favor the development of multilateral Western assistance programs to underdeveloped countries, but would proceed with caution in implementing any such programs.

Secretary Herter said he was inclined to concur with the majority viewpoint contained in the Intelligence Estimate rather than with the State dissent. He felt the situation described by the State dissent was, as far as could be seen at the moment, unlikely to develop. He asked whether Mr. Dulles had any views on the Bavarian elections.² Mr. Dulles said that although the Socialists had gained a substantial victory in the Bavarian elections, this development would be unlikely to have a major effect on West German policy since it was difficult to distinguish a Bavarian Socialist from a Conservative. The President remarked that the Bavarian Socialists must be similar to the Radical Socialists in France. Secretary Herter wondered whether the outcome of the Bavarian elections might weaken the position of Strauss. Mr. Dulles said such might be the result; he would make a further study of the situation.

Secretary Anderson reported that the West Germans were embarrassed by their large holdings of foreign exchange. Consequently they have sent $600 million to the U.S. as an advance payment on their mutual security obligations. This sum has been invested in short-term U.S. Government securities. By contrast, the U.K. is becoming sensitive to its losses of foreign exchange. The U.K. Government was considering inserting a statement in the next Budget Message that the U.K. held $800 million to a billion dollars worth of U.S. industrial securities. It had not yet been decided to make such a statement because of its possible effect on the stock market and because the Laborites might say to the Government, “Why were not these securities sold last October when their value was greater than at present?” The President wondered whether it was not to our advantage to have funds such as those sent here by West Germany invested in our securities. Secretary Anderson said these funds would be invested in our securities even if held by the Germans until payments were due. In response to a question from Mr. McCone, Mr. Dillon said that the German reserves of foreign exchange amounted to $5 billion. Secretary Anderson said the Germans were shying away from foreign assistance programs because a large proportion of any sum which they provided in assistance to underdeveloped countries would be spent in West Germany. Germany preferred to lend money to underdeveloped countries if the money would be spent elsewhere than in West Germany. Secretary Anderson said the advance payment by West Germany on its mutual security obligations had raised the question in his mind whether we should suggest that various other European countries take similar action. The President thought it might be desirable to make such a suggestion. Mr. Stans³ said advance payments by European countries on their mutual security obligations before June 30 would be very helpful. Secretary Herter asked when these mutual security payments were actually due. Secretary Anderson replied that the payments were due when Defense delivers the equipment. Mr. Dillon said various countries were buying military equipment from us for cash; the West Germans had simply put up the cash in advance of receiving the equipment. Secretary Anderson said that as a matter of book-keeping, the West Germans could show their advance payment as a payment made, but we could not show it as a payment received until we made the necessary deliveries of military equipment.

[Here follow the rest of agenda item 2 and agenda items 3–5.]

Marion W. Boggs

0. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Boggs.
1. A copy of this 17-page paper is in Department of State, INR–NIE Files.
2. In the Bavarian election on March 27, the SPD won the Mayor’s race in Munich and Regensberg.
3. Maurice H. Stans, Director of the Bureau of the Budget.