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The Nome Nugget
Nome, Nome County, Alaska
What is this article about?
Since 1949, the US has lost about $6 billion in gold reserves to West Germany amid expanding trade and US aid to allies, leading the US to pressure Germany to assume more burden for aiding underdeveloped countries, despite NATO covering much of Germany's defense costs.
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Rakes In $6 Billion
Of American Gold
By J. M. ROBERTS
Associated Press News Analyst
Why is the United States, after two years of pressing her allies to assume more of the burden of aid to underdeveloped countries, is now putting the bee on West Germany more directly than anyone else?
It's because Germany is the one which raked in the gold which has been flowing from the United States.
In 1949 the United States had more than $24 billion worth of gold. Germany had none.
Since then the U.S. supply has gone down approximately $6 billion and Germany has approximately $6 billion.
Germany has taken skillful advantage, with the aid of hard work, of the expanding free world economy which was based for many years after the war almost exclusively on American aid. German trade has grown amazingly.
As other economies have penetrated world markets, the share of the United States has shifted more and more to the countries which she continues to aid. Her net income in the export-import field is still about $3 billion annually, but when foreign aid bills are paid she has a deficit, and that's where the gold has gone.
When other countries lacked the dollars to do business, the United States filled the gap, in addition to giving away billions to bolster newly emerging states.
When other countries began to show profits, the United States started demanding that they take over part of the aid lead. Some progress was made, but not much.
Total aid has increased, but the U.S. share has not been reduced and, indeed, political factors suggest that it may even have to be increased.
Another reason why West Germany is expected to shoulder a larger share is that, even now that she is rearming, the Western Allies are still paying, through NATO, a large part of her defense expense. She has had a freer hand for economic expansion, relatively, than anyone else.
This, despite her cooperation in the European community, has left points of abrasion in her relations with Britain and France, who find her cutting into markets which they have considered their own.
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Where did it happen?
Foreign News Details
Primary Location
West Germany
Event Date
Since 1949
Outcome
u.s. gold supply down approximately $6 billion; germany has approximately $6 billion; u.s. net export-import income about $3 billion annually but deficit after foreign aid; total aid increased but u.s. share not reduced; western allies pay large part of germany's defense expense through nato; abrasion in relations with britain and france over markets
Event Details
The United States is pressuring West Germany to assume more burden of aid to underdeveloped countries because Germany has accumulated approximately $6 billion in gold from the U.S. since 1949 through expanding trade in the free world economy based on American aid. As other economies grow, U.S. trade shifts to aided countries, creating deficits paid in gold. When countries show profits, U.S. demands they share aid lead, with some progress but U.S. share remaining high. Germany benefits from freer economic expansion and NATO-covered defense costs while rearming, causing tensions with Britain and France over market competition despite European community cooperation.