Money and security : troops, monetary policy and West Germany's relations with the United States and Britain, 1950-1971 /

By Hubert Zimmermann | Go to book overview

7
The Bargain Slowly Unravels: Offset, Troop
Reductions, and the Balance of Payments,
1962–1965

MANAGING THE OFFSET AGREEMENT

With the exception of the target figure, the offset agreement had been rather vaguely formulated. The question of its actual implementation has received no attention in the scholarly literature, although a closer look at the offset mechanism offers interesting perspectives on the management of the transatlantic alliance by the United States. Particularly conspicuous is the relative absence of the State Department and the Auswärtiges Amt in this context. In the United States offset was managed by the Pentagon, with some participation by the Treasury Department; only when problems raised the issue to a politically sensitive level did the State Department become involved. A team of highly motivated Pentagon and Treasury experts began to travel regularly to Germany to discuss projects and orders. These frequent trips to Bonn by Henry J. Kuss and Charles A. Sullivan, the Pentagon and Treasury officials in charge, soon caused considerable irritation at the U. S. embassy in Bonn, which felt bypassed and warned of the absence of political considerations in the multimilliondollar deals concluded between the West German Ministry of Defense and the Pentagon salesmen.1 In August 1962 officers at the American embassy concluded, somewhat resignedly, that “State is no longer trying to keep fully abreast of the machinations of Messrs. Kuss and Sullivan. We have neither the manpower nor the money. ”2 Very soon a kind of military-industrial complex dealing with offset emerged at the Pentagon. Its existence was closely linked to the rise in German military purchases, but it soon expanded its activities to a global scale. From 1961 to 1966

____________________
1
Tyler to McGhee, Apr. 16, 1964; and McGhee to Tyler, Apr. 18, 1964; both in McGhee papers, 1988 add., box 1.
2
C. Arnold Freshman to Dowling: your meeting with Dillon, Aug. 8, 1962, NA, RG 59, DF 1960–63, 862a.10/8-862, box 2658.

-143-

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