The Reluctant Rich

Most of the rest of the world cheered the West German economic miracle. Infinite hard work, self-denial and good direction had put a war-racked people back on its feet; in an exposed sector of the cold war, a trouble spot became a source of strength. Now, with its industry rebuilt and its commerce thriving, how was West Germany using its strength? To the alarm of many of its allies who had helped the Germans in their time of trouble, West Germany is acting like a penny- pinching miser among nations, more intent on adding to its riches than on taking its responsible place in the world as a major creditor nation.

Replying with Excuses. West Germany's gold and hard-currency reserves have increased at the spectacular rate of $1 billion a year, now stand at $7.34 billion, more than double Britain's holdings. For four years, the Western allies have been pressing the Germans to channel some of this burgeoning wealth into foreign aid to underdeveloped lands. But Bonn answered with excuses: in 1957, Chancellor Konrad Adenauer protested he could not strain his budget in an election year; in 1958, it was a brief recession; since then, only a pittance has been produced, none of it very philanthropic.

Adenauer's experts claimed that West German aid abroad in 1959 amounted to $820 million. But the claim is more impressive than the reality. The Germans include in the total their contributions and their profitable loans to the World Bank. Also included is the "cost" of sales abroad under Bonn's short-term credit plan that gives guarantees to German firms selling in hard-up areas of the world; in many cases, struggling small nations operating under this system repaid the Germans with dollars granted them under U.S. aid programs, adding further to West Germany's currency reserves. Actually, West Germany last year coughed up a mere $5,000,000 in cash grants, loaned abroad (at 5% to 6%) only $100 million in long-term credits.

Letter from Ike. All this did not go down well with those who recalled that sympathetic creditors, mostly U.S., for-gave over $1 billion in German prewar debts at the 1952 London Debt Conference, and that the U.S. Government agreed to wipe $2.2 billion in postwar aid debts off the books to help the Germans along. And though West Germany's defense depends largely on keeping U.S. and British troops stationed on its territory, the Germans have doggedly insisted on trimming their share of the costs of maintaining and supporting them. In 1958, German troop-support payments to Britain were sharply reduced, and half the $600 million Bonn promised for U.S. defense forces in 1957 has never been paid.

The current international gold crisis has made the problem increasingly critical. The disproportionate U.S. contribution to Western defense and foreign aid is a major part of the gold exodus that has lowered U.S. bullion reserves from $24 billion in 1948 to $18.5 billion today. In September, U.S. officials spoke bluntly to Bonn's visiting Economics Minister Ludwig Erhard. But the real holdout appears to be Chancellor Konrad Adenauer. President Eisenhower himself has private- ly written Adenauer asking for more German help. Later this month, both Secretary of the Treasury Robert Anderson and Under Secretary of State Douglas Dillon will travel to Bonn to put the case to the Chancellor in person. They are considering slashing local purchases of German supplies for U.S. troops stationed in Germany; there is even talk of sending home the families of U.S. servicemen to cut dollar spending in Germany further.

Aware of Washington's rising anxiety, Bonn talks of a new, $710 million aid scheme for underdeveloped areas, to be financed partly by private industry. But this project is vague and undefined, and the government has not thrown its full weight behind it. Nor is there assurance that businessmen will go along; significantly, Wirtschaftsdienst, the influential organ of industry, recently complained that Germany's own internal expansion requires all the spare cash available. But, although Konrad Adenauer would be able to protest that another election is coming up, it looked as if the Germans might be hooked for at least some contribution. Reporting the impending Dillon-Anderson visit, Hamburg's Die Welt commented gloomily: "The Federal Government is disturbed . . . giving up money seems inevitable."

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