70. Letter From Secretary of the Treasury Dillon to Secretary of State Rusk0
Dear Dean: You will recall that I mentioned to you a few weeks ago my feeling that the Treasury could be of help to you in your perennial effort to obtain more adequate defense contributions from our NATO allies. As I pointed out, it has seemed to me that part of the problem lies in the fact that the Finance Ministers of our NATO allies have been able to avoid all personal responsibility for the decisions reached by their colleagues in charge of defense and foreign policy. This leaves them free to actively oppose within their own governments the appropriation of the funds required to meet agreed goals. This they have not hesitated to do even though agreements by NATO national representatives are supposed to be government commitments. Last fall’s struggle in the German Government was but the latest and clearest example of many such cases.
It would appear to me that Stikker’s current initative on military planning1 may present a useful opportunity to consider ways and means of tying the European Finance Ministers more closely into NATO decisions so that they will feel responsible within their governments to provide the funds needed to meet agreed force goals. As you know, this was the original thought behind the practice of including Ministers of Finance in the December Ministerial meetings. Since no substantive tasks have been assigned to the Ministers of Finance at these meetings, their attendance has become purely symbolic, and indeed some of the more important Ministers, i.e., the German Minister, seldom even bother to attend. I also feel that unless we can find a way to make better use of the Finance Ministers, serious consideration should be given to relieving them of the necessity of attending these meetings.
Irrespective of your decision on this larger question, I believe that the Treasury could be of substantial help to the Departments of State and Defense in preparing the U.S. position on the capacity of our allies to finance any given military program. I note that Stikker has proposed to, “examine the financial and economic implications for member countries collectively and individually of providing the forces called for in MC26/4.” In particular, he has proposed to attempt to determine, “ [Page 168] whether member countries were capable of a greater financial and economic effort in favor of defense and were bearing an equitable share of the common defense burden.”
I am glad to know that we are supporting Stikker in this effort and believe that the Treasury’s resources can be of substantial help in reaching our overall objective of bringing NATO strategy, forces and budgets into rational balance. In particular, the Treasury should be able to help in the critical analysis of the estimates of financial capabilities of individual NATO countries prepared by the International Secretariat. In view of the importance of this matter in our overall NATO objectives, political, strategic and financial, as well as to our balance of payments, I am taking the liberty of sending copies of this letter to Bob McNamara and Mac Bundy.
With best wishes,
Sincerely,
- Source: Kennedy Library, National Security Files, Subjects Series, Balance of Payments and Gold, 6/62-6/63. Secret. The source text is a copy sent to McGeorge Bundy by Dillon on March 19. Dillon’s covering memorandum reads: “Since the attached letter deals with a matter of considerable importance to our balance of payments, I would appreciate it if you could bring it to the President’s attention.”↩
- Documentation on NATO Secretary-General Stikker’s initiative is printed in volume XIII.↩
- Printed from a copy that indicates Dillon signed the original.↩