Niggling Response

When the Germans last fall gave a dusty answer to U.S. pleas for help in redressing the U.S. loss of gold, many U.S.

officials figured that the Germans were shrewdly saving their concessions for the new administration. Last week Economic Affairs Minister Ludwig Erhard knocked these hopeful expectations flatter than a Flensburg flounder. His big black cigar jutting out of his pink-cheeked face, Erhard formally handed U.S. Ambassador Walter Dowling a seven-page financial aid plan that called for little or no real contributions from Germany's overstuffed pocketbook.

The Germans said that they would be willing to help out by making early repayment of $787 million they owe the U.S., provided that the U.S. take $187 million off that amount as credit for the estimated value of German assets seized by the U.S. in World War II. They would also agree to prepay about $350 million on current U.S. arms contracts and boost Germany's share of NATO housekeeping costs by $18 million. On paper, the total contribution came to about $1 billion, but practically all of it was money the U.S. was going to get anyway. In addition, the Germans quietly shelved the billion-dollar program of aid to underdeveloped countries that had been announced with such fanfare last fall as their great gesture to help share the U.S.'s foreign aid load in 1961. Adenauer's Christian Democrats pleaded that they face elections this fall, dare not confront the voters with such a costly program.

The niggling German response left U.S. officials in Bonn openly angry. Retorted one German: "Much of American postwar aid to Germany came from food and military surpluses, which were given painlessly --why can't we do the same?" Erhard himself argues that the U.S. balance of payments' deficit is onlytemporary--the result of a capital outflow that can soon be ended. Shifting a billion across the ledgers just now and cutting the German bank rate from 4% to 3 1/2% to reduce the temptation to investors to move their funds from New York to the Frankfurt money market, says Erhard, are help enough for the dollar. The new U.S. Administration is busy taking a long, hard look at the bal ance of payments problem, and the word from Washington is that the Germans will have to unbend a lot more.

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