Henry V. Kiebler

Sincerely yours,

Kind regards.

I look forward to meeting you on the 16th.

the nights of March 18 and 19.
at the Commander Hotel, 16 Garden Street, Cambridge, for
We have made hotel reservations for you and Mr. Stolber

the Seminar Room of the Center.
day, adjourning around 2 P.M. All sessions will be held in
tional Attairs. The meeting will probably go through the
we plan to assemble at 9:30 A.M. at the Center for Interna-
as the most convenient date for all concerned. Accordingly,
contacting all participants, Friday, March 19 has appeared
the projected conference on the peak apout Germany. After
Mr. Stolber has properly been in touch with you about

Dear Professor Roskamp:

Detroit, Michigan
Wayne State University
Department of Economics
Professor Karl Roskamp

4 March 1962

THE UNIVERSITY OF MICHIGAN
CENTER FOR RESEARCH ON ECONOMIC DEVELOPMENT

307 S. STATE STREET
ANN ARBOR, MICHIGAN 48104

WOLFGANG F. STOLPER, DIRECTOR
ASSOCIATE DIRECTORS,
RICHARD C. PORTER
MONTAGUE YUDELMAN

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TEL.: 764-9490

February 11, 1965

Professor Henry Kissinger
Center for International Affairs
6 Divinity Avenue
Cambridge, Massachusetts 02138

Dear Professor Kissinger:

I have had another chance to go over the manuscript carefully with my colleague, Professor Roskamp, and I am enclosing two copies of the revised draft of our joint paper. Most of the changes have been minor, but the section on the future, pp. 45-49, has been completely rewritten and expanded by about one page. Also, our tables have been checked and the text made completely consistent with the tables. Finally, a short bibliography has been added. The bibliography can, of course, be omitted or expanded almost indefinitely.

I shall expect to hear how you like the piece and also when you expect us to come for the meeting during the middle of March.

With best regards, I am

WFS:ed

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TEL.: 764-9490

March 1, 1965

Professor Henry A. Kissinger
Center for International Affairs
6 Divinity Avenue
Cambridge 38, Massachusetts

Dear Professor Kissinger:

Thank you very much for your letter of February 26 and the suggestions concerning our manuscript. I shall be in Cambridge on March 19th and would appreciate it if your secretary could reserve a hotel room for me for the nights of March 18 and 19. I assume that you have also invited Professor Karl Roskamp. I believe that his presence would be quite essential because he has all the details at his fingertips.

I have not yet had a chance to look in detail at the comments which Mr. Kaiser has made. You may know that I have also received a long letter from Charlie Kindleberger which I have tentatively answered. I shall, of course, try to reformulate the manuscript along the lines which you and Mr. Kaiser have suggested. Whether we will succeed in finishing the revision in time remains to be seen, but Roskamp will spend Thursday, March 4, and Saturday, March 6, in Ann Arbor with me.

In general, I agree that one can easily shorten the tables and I shall do my best to make the article more readable for the general reader. I also recommend that we agree that the treatment of reunification, etc. is rather superficial. One reason is that I have not really studied the latest developments in East Germany.

I also agree that we should have put more into the text on the impact of the common market on Germany and we will take care of this. Similarly, it is not too difficult to allow for the impact of foreign aid. For the rest, I prefer to leave it at that now, until I have had a chance to study the comments in detail.

With best regards,

WFS:ed

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TEL.: 764-9490

January 27, 1965

Professor Henry A. Kissinger
Center for International Affairs
Harvard University
6 Divinity Avenue
Cambridge, Massachusetts 02138

Dear Professor Kissinger:

I just got your letter of January 19. During the week of March 15 I would be free any day except Thursday, the 18th, when we expect Professor Just Faaland from Bergen for a lecture. The most convenient day would, of course, be the weekend starting Friday, March 19.

I wonder whether it would not also be advisable to bring Professor Roskamp into the discussion. I have not mentioned anything to him as yet until I receive your approval.

Professor Roskamp has written me that he still suggests a few changes and I will, in any case, work with him on improving the manuscript further as long as this is feasible. The future problems of Germany, including German reunification and European integration, begin to intrigue me considerably and I think the whole problem seems again to be on the carpet. I am therefore quite anxious to talk with you about a possible book. I plan to take a sabbatical in the academic year 1966-67 when I would be free to do the research and write a book; a co-authorship with Roskamp would also be indicated.

With best regards, and expecting to hear from you upon your return,

WFS:ed

Secretary
Jean Blanchard

Sincerely yours,

at that time.
I will bring your letter to his attention
office at the beginning of next week and
He is expected to return to the
of your letter of January 27th.

I am writing to acknowledge the receipt
In Professor Knausiger's absence.

Dear Mr. Stolper:

Ann Arbor, Michigan 48104
207 South State Street
The University of Michigan
Center for Research on Economic Development
Director
Mr. Wolfgang F. Stolper

February 1, 1962

26 February 1965

Mr. Wolfgang F. Stolper, Director
The University of Michigan
Center for Research on Economic Development
307 South State Street
Ann Arbor, Michigan 48104

Dear Mr. Stolper:

After having contacted all participants of our projected
conference about the book on Germany, Friday, March 19 has
appeared as the most convenient date for all concerned.
Accordingly, we plan to assemble at 9:30 A.M. at the Center
for International Affairs. The meeting will probably go
through the day, adjourning around 5 P.M. All sessions will
be held in the Seminar Room of the Center.

Since the participants should receive the papers a few
days before the conference, please let us have your paper by
March 12 at the latest. Since we are not sure whether we
have enough secretarial help to produce mimeographed versions
of all papers, we might have to xerox them, and for that
reason a readable copy will be greatly appreciated.

A word about the substance of your paper. I have read it,
and so has Karl Kaiser, who is helping me with the book.
He has made some comments, which I substantially agree.
He has also made many marginal notes I would add to Karl's
comments that your paper, as it stands, is a little too much
addressed to the technical economist, and not enough to the
general reader. I wonder whether you would have time to make
a revision. Do you suppose that you might keep this in mind?

Do you want us to make hotel reservations for you? I
look forward to seeing you on the 19th.

Best regards.

WOLFGANG F. STOLPER, DIRECTOR

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TEL.: 663-1511 EXT. 3204. 2260

December 30, 1964

Professor Henry Kissinger
Center for International Affairs
Harvard University
6 Divinity Avenue
Cambridge 38, Massachusetts

Dear Professor Kissinger:

I am enclosing two copies of the paper by Professor Roskamp and myself on economic development in the Federal German Republic. I couldn't resist a slight naughtiness in calling the paper Planning a Free Economy. However, the title does give the tenor of the paper, which is quite clearly that the Federal Republic has produced a number of very good economic policy makers who are flexible and, unlike East Germany, are not bound rigorously by dogmatic preconceptions.

I am very curious to know your reactions. Roskamp and I intend to send, at a later date, a short bibliography on West and East German development which might be useful -- not more than two pages and possibly only one.

I am off to Tunis again for a week on January third, followed by a two-week visit in Nigeria. I expect to be back during the third week in January and after that expect to stay put for a while. I hope that by that time I will find your reaction and that that reaction may not be too critical.

With best wishes for a happy New Year, I am

WFS:ed

WOLFGANG F. STOLPER, DIRECTOR

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TEL.: 663-1511 EXT. 3204, 2260

December 24, 1964

Dear Professor Kissinger:

This is just a brief note to set your mind at ease. The manuscript is finished in first draft and the revision is almost completed; in fact, about half of it is already dittoed. I have just returned from Tunis where I was for AID and shall go back there for one week early in January. You will, however, have the manuscript shortly after the first of the year.

While I was writing the manuscript, it occurred to me that my former assistant, and now colleague and friend, Karl Roskamp, who, as you may recall, collaborated with me on the East German book, should really be asked to join me in writing the present contribution. I did not bother you with this particular piece of information since I assumed that you would have no objection. I would very much hope you won't mind if the contribution appears jointly under his and my name. It will be so submitted. May I also trouble you to split the honorarium in half, sending half of it directly to Professor Roskamp at Wayne State University when you have accepted our contribution.

I hope very much to have another chance to talk with you. I suppose when my present manuscript on planning without facts has passed the editors and goes to the final process of revision before being sent to the printers, I will have a chance to come to visit in Cambridge. One reason is that I think the article which we are writing really requires the treatment of a book and I would like to talk with you about the possibility of writing such a book jointly with Karl Roskamp some time during the next few years.

In the meantime I would like to wish you a merry Christmas and a happy New Year.

WFS:ed

October 2, 1964

Mr. Wolfgang Stolper
Director
The University of Michigan
Center for Research on Economic Development
307 South State Street
Ann Arbor, Michigan 48104

Dear Mr. Stolper:

Thank you for your nice letter
of September 15th which reached me
while I was in Europe.

You were quite correct. Your paper
is not expected until around Christmas.
When I did not hear from you, I simply
got a little nervous.

Your suggestion of how to deal
with your essay strikes me as original
and fascinating. I have really no
suggestions to make. A length of about
fifty pages would be exactly right.

I look forward to seeing your paper.

Kind regards.

WOLFGANG F. STOLPER, DIRECTOR

September 15, 1964

Professor Henry Kissinger
Center for Internation Affairs
Harvard University
6 Divinity Avenue
Cambridge, Massachusetts

Dear Professor Kissinger:

I feel very apologetic for my long silence. My only excuse is that I thought
that it was understood that I would not get around to work on my chapter until
after I had finished the manuscript promised to Ed Mason during the summer, and
I also was under the impression that it was understood that my manuscript would
not be delivered until about Christmas. This does not mean that I should not
try to get it to you earlier but I understood the latter to be my deadline.

I have read carefully through the transcript of the tape which Mr. Kaiser sent me. There is very little which I can add. Obviously, most of the points which have to be made have been mentioned during the discussion which I regret deeply I was unable to attend.

Perhaps my own approach differs only slightly and only in the following respects. The first is that I am quite impressed by the essential similarity in development in different countries. Germany has had the longest period of the most rapid growth in its history and data for national income, of a sort, go back to 1857. Never in history has there been such a long period of such growth and such welfare for so many people. What really interests me, however, is that this, roughly, is true everywhere else also in the western world and therefore one of the interesting points to establish would be that Germany has, through her decision to integrate with the western world, succeeded in partaking of that growth while, for example, East Germany by integrating with the wrong part of the world had not succeeded in doing so. I think to see the German miracle as part of something wider gives it a depth which could not otherwise be had.

Secondly, however, I have been impressed with the amount of sheer luck which has enabled the Germans to achieve their growth. However, the manner in which I wish to stress that (if I succeed) is that really anything anybody can expect economic policy makers to do is to grab opportunities when they arise. In the book which I have just finished, Planning Without Facts, which deals essentially with my planning experiences in Nigeria, I stress the idea that the long-run should be seen essentially as a sequence of short-runs and that the whole planning problem consists not in picturing the future and then establishing the best path

Professor Henry Kissinger

- 2 -

September 15, 1964

to a preconceived future, but rather in opening up new opportunities to a country and in taking the chances as they come. Flexibility and increased choice seems to me to be essential characteristics of good planning.

It is this kind of idea which I would like to develop in the German case in connection with their economic policies. It seems to me that it can be very misleading to deal with economic policy through the pronouncements of the policy makers. After all, even though Erhardt at one time was a professor and therefore, as a professor, should be judged by what he says, his job as Minister of Economics was not to write beautiful articles but to get business men and workers to behave in a certain manner. And it seems to me that for a number of reasons he succeeded eminently in that.

There is another point which deals with the modesty of the unions and, in general, the stress of the so-called neo-liberal school of Eucken and others. Their liberals may seem to us rather banal and self-evident, but at the same time it is quite clear that they operated in the German context in which in the past even rudimentary economic knowledge was absent, and in which in general people were not accustomed to think of the economy as a working system. They were, rather, used to thinking of the economy as individual production units in which business men and the government could make arbitrary decisions within a very much wider range of choices than was realistic. To get across the notion of independence and the notion that there was a role for government was a major achievement, I think. The fact that all of this is understood in Anglo-Saxon countries, and in particular that Keynes' radicalism is conservative by comparison with the conservative liberalism of the Germans in this respect, is beside the point. This is something to amuse a historian, but not something which is necessary to explain what happened.

There is also a case of the modesty of the unions. I think that part of this modesty can also be explained in terms of the fact that everybody in Europe became conscious of the dependence upon outside factors. Naturally, there is the instance of the Dutch unions' reducing wages when there was balance of payments trouble and in getting a wage raise when the balance of payments made that again possible. Nobody has suggested that Dutch unions were particularly docile but it was a fact nevertheless. In France, the achievement of DeGaulle, it seems to me, is much more that he has suppressed the latent hatred of Frenchmen for each other and has made their general distrust of each other inoperative. This alone seems to me sufficient to explain much of the development in France and one does not need any very sophisticated planning methods to explain it. I know that I am in a minority in these views, but I think we will try our best to work them out a little bit.

For the rest, I would like to soft-pedal the role of unions and of the codetermination. The reason is simply that I am rather ignorant on this particular subject and it is very easy to make a fool of one's self by an apparent depth of observation of phenomena which probably do not bear such a deep explanation.

I shall try to keep you informed of my progress and hope that this letter has allayed some of your misgivings.

September 17, 1964

Dr. Wolfgang F. Stolper
Director
The University of Michigan
Center for Research on Economic Development
307 South State Street
Ann Arbor, Michigan 48104

Dear Dr. Stolper:

In Professor Kissinger's absence,
I am writing to acknowledge the receipt
of your letter of September 15th.

He is scheduled to return to the
office at the end of this month and I
will bring your letter to his attention
at that time.

March 12, 1965

Professor Karl Roskamp
Department of Economics
Wayne State University
Detroit, Michigan

Dear Professor Roskamp:

I am sending you a copy of the
papers which we have mimeographed for
the Conference.

I thought it would speed things
up if you might have a chance to go
over them before the meeting.

I look forward to seeing you
on Friday.

Kind regards.

Sincerely yours,

Henry A. Kissinger

March 12, 1965

Professor Wolfgang F. Stolper
Center for Research on Economic
Development
The University of Michigan
307 S. State Street
Ann Arbor, Michigan 48104

Dear Mr. Stolper:

Kind regards.

March 31, 1965

Mr. Wolfgang F. Stolper
Center for Research on Economic Development
University of Michigan
307 South State Street
Ann Arbor, Michigan 48104

Dear Mr. Stolper:

It was a great pleasure to have you here and I think you
made a very major contribution to our Conference.

I think we discussed your paper sufficiently when you were
here. May I suggest that in revising it it would be helpful if you
expanded the somewhat compressed material of the beginning. As I
understand it one of your basic points is that the general slogans
which explain German economic recovery are not adequate. I think
it would help if you expanded somewhat in explaining what these pre-
conceptions are and why you disagree with them. I think your paper
would be even stronger if its excellent factual material were set in
some theoretical framework rather than stand by itself.

I also wonder whether you could not reconsider your views
about agriculture. What you say may be economically correct. Still
it is a psychological and political problem. Moreover, I am not
convinced that the way of proving that something is unimportant is not
to treat it at all. If you believe that the agricultural problem is
unimportant, why don't you say this explicitly and explain why in a
few paragraphs. Some expansion of your paper would certainly be
permissible.

In thinking over the problem of how we might best proceed, we
have come to the conclusion that a meeting in Europe in June would
probably be premature. Our present plan is, therefore, to have the
next meeting in Cambridge either during the week of July 18th or during
the week of July 25th. Which of these two weeks would be suitable for
you and Mr. Roskamp? We are then considering the possibility of a
meeting in Europe at the end of September or early in October.

Mr. Wolfgang F. Stolper

- 2 -

March 31, 1965

I am enclosing the notes of the meeting 66r whatever use
they may be to you in revising your paper. We would need the
revised paper by June 15th.

With kind regards.

P.S. Your expenses are being taken care of by our Administrative
Department and a check will be mailed to you under separate cover.

P.2. Your expenses are being taken care of by our Administrative

Henry V. Kieisinger

With kind regards.

revised paper by June 12th.
they may be to you in reviewing your paper. We would need the
I am enclosing the notes of the meeting etc. whatever see

Mr. Wolfgang K. Stolper

March 31, 1962

AREA CODE 313
TEL.: 764-9490

March 26, 1965

Dear Professor Kissinger:

May I turn in, first of all, my expense account as follows:

1. Round trip ticket, Detroit-Boston-Detroit, tax free $97.90
2. Airport taxis, Ann Arbor-Detroit Metro Airport and return 20.00
3. Airport taxis, Boston-hotel and return 9.00
4. Commander Hotel and meals taken there 23.47
Total $150.17

I enclose the hotel bill and duplicate air ticket in case this is required by your Accounting Department.

Karl Roskamp and I are getting together for the first of several sessions on Monday. We will, as soon as possible, send you the outline of the project that we talked about. I have in the meantime talked with my colleagues here and they all agree that it would be quite desirable and proper for me to supply the secretarial services, office supplies, etc., but they ask that some of the materials which we may have to purchase (books, etc.) be included with whatever we submit to you. None of these are major items.

We will also make a beginning of the review of our paper. I understand from our discussion that we are permitted to expand it in order to make it more readable. I have already made a number of notes where we will include and expand -- none of which ought to take up very much space.

I enjoyed the meeting very much and am looking forward to our further collaboration. Needless to say, I am rather looking forward to the brief trip to Lake Como.

With best regards, I am

WFS:ed

April 5, 1965

Mr. Karl W. Roskamp
Department of Economics
Wayne State University
Detroit, Michigan 48202

Dear Mr. Roskamp:

Thank you for your letter of
March 31st. It was a pleasure to meet
you.

A check for your expenses is being
sent to you.

I am enclosing a copy of the letter
to Mr. Stolper as well as a copy of the
notes that were taken at the meeting.

With kind regards.

Henry V. Klaasen

Sincerely yours,

With kind regards.

notes that were taken at the meeting.
to Mr. Stolper as well as a copy of the
I am enclosing a copy of the
sent to you.

you.
March 31st. It was a pleasure to meet
Thank you for your letter of

Dear Mr. Roekamp:

Detroit, Michigan 48203
Wayne State University
Department of Economics
Mr. Karl W. Roekamp

April 2, 1962

WAYNE STATE UNIVERSITY

COLLEGE OF LIBERAL ARTS

DETROIT, MICHIGAN 48202

DEPARTMENT OF ECONOMICS

March 31, 1965

Professor Henry A. Kissinger
Center for International Affairs
Harvard University
6 Divinity Avenue
Cambridge 38, Massachusetts

Dear Professor Kissinger:

I had a safe trip back to Detroit after the stimulating conference on
the book on Germany.

Today I met Wolfgang Stolper in Ann Arbor and we worked hard to make
the suggested changes in our manuscript. I also drafted a research
proposal for a detailed study of the economics of German unification
which you requested. I think that I will be able to send it to you
sometime next week.

Enclosed is a statement on the cost of my trip to Cambridge. The total
amount is $133.83. I would appreciate a refund.

Kind regards.

KWR:em

Enc.

April 20, 1964

Mr. Wolfgang F. Stolper
Director
Center for Research on Economic Development
The University of Michigan
307 S. State Street
Ann Arbor, Michigan 48104

Dear Mr. Stolper:

I am delighted that you will
participate in the symposium on Germany.
We will have a meeting at the end of
this week and then another one in October.

I wonder whether you would consider
doing a brief outline of your book. It
would not have to be more than a few pages
but it would help me and probably a few of
the other contributors.

Best regards.

Henry V. Klaasen

Sincerely yours,

Best regards.

the other contributors.
put it would help me and probably a few of
would not have to be more than a few pages
doing a brief outline of your book. It

this week and then another one in October.
We will have a meeting at the end of
participate in the symposium on Germany.

I am delighted that you will

Dear Mr. Stolper:

Vern Arperr, Michigan 48104
303 S. State Street
The University of Michigan
Center for Research on Economic Development
Director
Mr. Wolfgang F. Stolper

April 30, 1964

AREA CODE 313
TEL.: 764-9490

April 5, 1965

Professor Henry A. Kissinger
Center for International Affairs
6 Divinity Avenue
Cambridge, Massachusetts

Dear Professor Kissinger:

Thank you very much for your letter of March 31 and the extensive notes on our meetings.

First, as to dates of meeting. In a way I am sorry that we won't meet in June in Bellagio. My summer commitments are as follows: I have to be in Colorado for an AID conference on Nigeria between July 14 and 17, and I have accepted an invitation to an International Economic Association conference in Washington from the 21st to 31st of July. Both are important meetings for me although I suspect that I may be allowed to be a day, or possibly two, late to the Washington conference. Monday, July 19, and Tuesday, July 20, would be feasible for me, however.

Karl Roskamp, on the other hand, who happens to be sitting across from me at my desk at this moment, will be unable to come to Cambridge since he will be in Europe from June to August. Both of us could come in October for a short period in Europe if this is desired.

As for your comments, we have already taken care of most of what you suggested. In particular, we have added roughly four typewritten pages, between pages 2 and 3, about the social market economy, the late Professor Eucken's contribution, and somewhat also of the problems of equity. We may have to revise some of it again but a first draft has been typed. We also inserted one and a half pages on page 50 to deal specifically with the structural changes which Mr. Kaiser wanted -- the share of GNP going to different sectors -- and we have already, on page 57, inserted a comment of one page to deal with the farm problem. We agreed, of course, with your comments that regardless of how important or unimportant this problem would be if seen only in an economic context, it nevertheless has to be dealt with.

None of these suggestions deal with the other problem on which we are working; namely, the independence of monetary and fiscal policy in the common market. We have run into considerable difficulty on that point since there is remarkably little literature on the subject. I have taken the step of sending

Professor Henry Kissinger

April 5, 1965

Page 2

the present draft of the manuscript, including the pages you have not yet seen,
to my friend Günther Harkort, who is the German ambassador to the common market,
and have requested that he not only read the manuscript critically but also
to send me documents of the community relating (a) to the agricultural program
and (b) to the problem of a common monetary and fiscal policy. The final
version will have to wait until I hear from him -- which ought to be very soon.
I have at the same time written to Professor Egon Sohmen in Saarbrücken
requesting the latest document of the German Wissenschaftliche Beirat which
also ought to give some clue on what might possibly go on.

If I understand correctly, your comment on the integration of the facts, this
can be dealt with fairly easily by including the tables in the text and
specifically referring to them rather than in the appendix.

None of your suggestions cause major difficulties except, of course, our
own decision to do something more on independence of action.

I enjoyed the conference a lot and felt a bit bad about being an enfant
terrible. I hope I was not too tactless. I am reassured by your friendly
reception and even more by the assurance that space is not a major consideration.
I really believe that when the paper is finished, it will be a contribution
to the understanding of West German growth.

Karl Roskamp and I meet regularly all day each Monday to work on the paper and we expect to have it in your hands in ample time before June 15. You will also presently receive the outline of the research we propose.

As for the latter, I would like also to draw in Professor Heinz Kühler of
Amherst, who knows more about Soviet Bloc foreign trade and specifically
matters in East Germany, and who has a great deal of material accumulated
which complements what I have in my library. The plan now is that I will take
a leave of absence in 1966-67 which I will start with a Fulbright Professorship
in Heidelberg during the summer semester to which I have just been appointed.
Karl Roskamp tells me that he is also eligible for a sabbatical in a year and
plans also to spend it in Europe. I think all of these facts will play a
role in the manner in which we submit our proposal for a book on reunification,
East German developments, and European political affairs later in April or
early May.

Please give my best regards to Mr. Kaiser. In the meantime, I am

WFS:ed

AREA CODE 313
TEL.: 764-9490

May 26, 1965

Dear Professor Kissinger:

Although I have never received an acknowledgment of the fifteen
copies of the third revision which was sent to you some time ago, I assume
that they have safely arrived.

I have, in the meantime, had communications with my friend, Harkort,
who wrote some rather interesting comments. Most of his suggestions had
already been taken care of in the writing which you have, since they were
based on a number of documents he had sent me. A few additional changes
which he has suggested are enclosed. Would you please have Mr. Kaiser
distribute the fifteen additional copies? Naturally, I am not in a position
to say that these changes were made at the suggestion of Mr. Harkort.

Unfortunately, I have not yet heard any reactions on the German
proposal. I am all ready to send you this proposal in a final form but
hesitate to do so until I get some comment or encouragement from you.

Finally, as to the meeting in July, it looks now that I will not be
back in this country before about July 21, and I would therefore appreciate
it if the meetings could be held early in August rather than in June. If,
however, you decide to have the meetings in Europe, I could manage to attend
there, since I will be in Tunisia for AID from June 15 to at least July 15
and probably to July 21, that is if the contract with AID is signed in time.

With best regards,

Yours,

Wolfgang F. Stolper

WFS/he

AREA CODE 313
TEL.: 764-9490

May 10, 1965

Professor Henry A. Kissinger
Center for International Affairs
Harvard University
6 Divinity Avenue
Cambridge Massachusetts 02138

Dear Professor Kissinger:

I have sent fifteen copies of the third revision under separate cover. I think the manuscript is now basically in good shape. Since this particular version was finished, I received a letter from my friend Harkort with a number of suggestions for further improvement. Roskamp and I will go through the manuscript once more but I believe that we have already allowed for most of the suggestions which Harkort made. In any case, whatever changes will be made can either be written into the manuscript or we can supply individual pages. I should hate to have the whole thing rewritten again.

I would of course be curious to get your comments and also some
possible reactions to the research proposal. I have in the meantime
received some further comments from Professor Khler but I hesitate
to submit a final draft proposal to you until I have heard your own
views.

With best regards, I am

WFS:ed

# Proposed Research on Problems of German Reunification

## A. Statement of the Problem.

1. As a result of World War II, Germany, a formerly well integrated area, was split into several parts. Part of East Germany fell under Russian and Polish domination. Central Germany became under Russian auspices what is now the "German Democratic Republic" (GDR), Western Germany became the "Federal German Republic" (FR). The cold war caused these parts to drift apart rapidly. West Germany became integrated into the western world, the GDR into the East Bloc and former East Germany, with the German population expelled too, was settled by Poles and Russians. In spite of this drifting apart, there are, however, powerful forces in Germany and elsewhere which, recognizing that a divided Germany must remain a permanent source of international tension, seek reunification of the country. The reunification issue has generally centered on West Germany (FR) and Central Germany (GDR) and has left the problem of the former eastern parts peripheral and undecided.

2. With respect to reunification of Germany, two attitudes have evolved. The first one is based on the hope that reunification will occur in one step as the result of free electons, with Russian troops some day gracefully leaving, the GDR and the present Communist regime dissolving itself. West Germans in one big push would take over, reorganizing the country and bring it up to West German standards. This approach seems unrealistic, though still adhered to by many members of the West German government.

-3-

interpretable in western terms. Only very few specialized West German
economists have seriously studied the economy of the GDR and the most
outstanding among them G. Abeken, is now of high age. The basic study
of the structure of the GDR economy was produced by Stolper and Roskamp
under the auspices of the Center for International Studies at M.I.T.,
Cambridge, Mass., in 1955/60, and the basic study of the international
economic relations was undertaken by Prof. H. Kohler of Amherst College.

6. The GDR, less recently followed other communist countries in relying increasingly on the price mechanism and indirect methods of control and appears to have gone even further in this direction. This points in the direction that the East Germans may ease up internally and that they will seek more economic and other contacts with the West. If the economy should, because of less rigid planning, perform more satisfactorily, direct controls may become unnecessary and with it improved relations between the two parts of Germany become practical as well as advantageous to all participants.

7. There can be no doubt that an increase in trade volume with western countries and in particular West Germany would boost the performance of the East German economy. In undivided Germany, interregional trade between the area of the FR and the area of the GDR was large. The split of Germany severed East Germany from some vitally needed West German resources, which could be obtained from the East Bloc only with difficulty if at all. The enforced reliance on domestic East German resources, especially in the energy and basic products industries,

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greatly reduced the efficiency of the economy. The East Germans are
well aware of the importance of trade with West Germany and therefore
they have more than once attempted to raise the volume of interzonal and
international
/trade.

8. In order to assess intelligently the possibilities of increased East-West relations, the following information is essential:

a. <u>The economic performance of Germany.</u> At present we have information on East German GNP, in meaningful western terms, only up to 1958. We require GNP data with breakdowns by main economic sectors up to 1965. This new study would not be as detailed as the previous one (Structure of the East German Economy), but it should provide all desired basic information.

b. <u>The structure of East German international trade, including interzonal trade.</u> Professor Heinz Köhler of Amherst has done the pioneer work in this area and would be able to thoroughly analyze the East German international trade situation. Such a start would, among others, provide information on how changes in the performance of the economy affected trade patterns and how West German policy might influence this.

c. <u>The East German planning mechanism and its changes.</u> This study would be relevant also to the degree of internal political and economic control.

It would deal with <u>alloksekative</u> institutional arrangements and administrative procedures. Some work on this was already done in the form of a background study for <u>The Structure of the East German Economy</u> but it dealt essentially with the early postwar period.

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B. <u>Statement of Procedure</u>.

Above study should be conducted in two stages during 1965-67.
Participating would be Professors Karl W. Roskamp, and Heinz Köhler as
senior authors, and Wolfgang F. Stolper as junior author, if so desired.

In 1965-66, Professor Roskamp would work half-time in the Center
for Research on Economic Development at The University of Michigan at
Ann Arbor. During this time, the <u>Structure of the East German Economy</u>
should be brought up to date as outlined in the preceding section of
this proposal.

To enable Roskamp to do this work, he needs coverage of half of
his salary and some additional funds for the purchase of books and
documents. If possible, some of the funds for the acquisition of
books and documents should be made available to Roskamp in the summer
of 1965. He is spending the coming summer in Europe and will would like
to take this opportunity to acquire needed materials.

Professor Stolper will furnish, out of the resources of the Center
for Research on Economic Development, secretarial help and provide
office space during 1965-66.

During 1965-66, Professor Köhler will work half time in Amherst
University to complete the first part of the trade study as indicated
above. For this he would need coverage of half of his salary.

By the end of 1965-66, a preliminary manuscript should be ready.

[LC]

Budget

Summer 1965
Roskamp
book $300 $ 300

Academic year 1965/66
Roskamp
1/2 salary
(academic year total
$13,000)
6,500

Köhler
1/4 time
3,250

Summer 1966
Roskamp
Full Salary 4,667

Köhler
" " 4,667

Books and Microfilm 600
Travel to and in Europe, Köhler 750

Academic year 1966/67
Roskamp
1/2 salary 7,000
Travel to and in Europe 750

Köhler 7,000

Stolper
Travel in Europe 400

Summer 1967
Roskamp
1/4 salary 4,667

Köhler 4,667

Travel to and in Europe
Roskamp 750

Köhler 750

1 000

47 718

AREA CODE 313
TEL.: 764-9490

April 28, 1965

Professor Henry A. Kissinger
Center for International Affairs
Harvard University
Cambridge, Massachusetts 02138

Dear Professor Kissinger:

I hasten to answer your last letter and refer also to the telephone conver-
sation we had today.

First, I would prefer it if our meeting would be about August 1, but it
would be quite possible for me, I am sure, to go to Cambridge for a day
some time between July 21 and 31 from Washington.

Secondly, Karl Roskamp and I have begun to make a tentative proposal for
the book we talked about and into which we wish also to邀 Professor
Heinz Kühler of Amherst; we have talked with him about it on the phone.
You will receive very soon the tentative draft for your comments. In the
meantime, however, Karl Roskamp will go to Europe this summer to visit and
I wonder whether you could make $300 to $500 available to him to cover the
purchase of material, microfilming, and some internal traveling. The latter
is necessary -- or desirable -- because he will primarily spend his time in
France, the home of his wife.

Finally, I am happy to tell you that Roskamp and I have thoroughly worked
through the revisions of the manuscript. I have also taken the liberty of
sending a draft to my friend Günther Harkort, the German Ambassador to the
Common Market, who has commented briefly in a letter; he has also sent me
a number of documents.

The changes in the manuscript (which is now being fixed up and will be
ready to send to you very soon) are as follows:

1. All tables have now been inserted in the appropriate places in the text and a new table has been added in response to the criticism that we should discuss concentration of foreign trade. I thought it best to discuss each concentration in terms of East and West German trade with the East Bloc and Soviet Russia.