Secret White House Tapes

868–15

About this recording

868–15
  • President Richard M. Nixon
  • Henry A. Kissinger
  • Julienne L. Pinneau
  • George P. Shultz
March 3, 1973
Conversation No. 868-15

Date: March 3, 1973
Time: Unknown between 1:10 pm and 2:07 pm
-39-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)


Location: Oval Office

The President met with Henry A. Kissinger, Julienne L. Pinneau, and George P. Shultz; the
White House photographer was present at the beginning of the meeting.

Introduction

Pinneau's departure

[Photograph session]

Pinneau's work with administration

Pinneau's new job
-United States Information Agency [USIA]
-James Keogh

Meeting with Kissinger

Pinneau left at 1:12 pm.

Kissinger’s meeting with Quadriad members
-Length

US monetary policy
Kissinger’s knowledge
-Floating exchange regime
-Intervention
-Willy Brandt's letter
-Europe
-Common float position
-Impact on US
-European integration, world stability
-Kissinger’s viewpoint
-Common float
-Political impact of devaluation
-Speculation, devaluation
-Perception of US weakness
-Consultation with US
-US intervention
-40-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Statement to Brandt
-US procedural objection
-Basis for later action
-Objection to Brandt's letter
-Edward R. G. Heath
-Reply to president
-Shultz’s telephone call to Anthony P. L. Barber
-Position on common floating of currency
-US reaction to common float proposal
-Reply to Brandt
-Exchange rates
-General compared with unilateral action
-Impact of float on Japan
-Need for consultation
-Intervention to defend US exchange rate
-Minimum demand
-Consultation
-US options
-Common float
-US objections
-Paul A. Volcker
-Intervention
-Acquiescence in European integration
-US concerns
-Brandt's letter
-US interests
-European integration
-Benefit to world security
-Conversation with Heath

Floating of currency
-Kissinger
-Political implications of float
-Europe
-Consultation with US
-Options

Europe integration
-US position
-41-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Wording of statement
-Support for integration
-Europe, Atlantic
-Need for consultation with US, Japan
-Monetary situation
-Compared to US-USSR initiatives
-European actions
-Unilateral, consultation
-Japan’s interests
-US actions

Exchange rates
-US course of action
-Massive intervention in currency markets
-Floating exchange regime
-Shultz, Herbert Stein
-US interests
-Devaluation
-International reaction
-Smithsonian Agreement
-February 12, 1973 devaluation
-US weakness
-Floating exchange regime
-Economists’ views
-Progress
-August 1971, February 193
-Milton Friedman
-Support

President's letter to Brandt and Heath
-Active US policy
-Japan, Europe
-US devaluation
-Passive US policy
-European integration
-Substitute for Atlantic, world cooperation
-Consultation with US

Intervention
-42-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Shultz’s opposition
-Risks
-Arthur F. Burns
-West Germany
-Formal US devaluation
-Congress, International Monetary Fund [IMF]
-Dollar reserves
-West Germany
-Exchange rate parity fluctuations
-Japan
-Burns's recommendations
-US bargaining position
-Borrowing against West German Mark
-US intervention to defend exchange rate
-Common float
-Failure
-National float
-Weaknesses
-West Germany
-US intervention
-Obligation
-Smithsonian Agreement
-Letter to Brandt
-Devaluation statement
-Congress
-Critique
-Support for float
-West Germany
-Belief in US non-intervention
-New York bankers
-Alfred Hayes
-Support for US intervention
-Reasons
-Stable currency markets
-Speculation

European integration
-Kissinger’s viewpoint
-Desirability
-43-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Atlantic unity
-US intervention in currency markets
-Moves toward common currency
-US intervention in currency markets
-West German participation
-West Germany’s position
-Cooperation with US
-Common float

US intervention
-Impact on European moves for common currency
-Delay

Europe’s common currency
-Difficulty
-Exchange rate parity
-Italy, Great Britain
-Crisis
-German cooperation with US

US intervention
-Economic impact

US policy toward common float
-Kissinger's concerns over inaction
-European independence, unity
-Impact on Atlantic alliance
-Kissinger's recommendation
-Letter from President
-Atlantic unity
-Alerting Japan
-US intervention to defend exchange rate
-Kissinger’s recommendation
-US support of Europe’s proposal
-US interests
-Shultz
-US rejection of fait acompli
-Brandt’s letter
-Heath’s response
-44-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Japan

European moves toward common float
-France
-Anti-American rhetoric
-European independence
-West German actions
-Belief in US non-intervention
-Great Britain
-Floating exchange
-Support for fixed exchange in Europe

President’s letter to Brandt, Heath
-Intervention options
-Impact on terms of trade
-Congress
-Reaction
-Currency swaps
-Risks
-Costs
-Burns's forthcoming testimony
-Exchange rate parity
-Price of gold
-Non-intervention option
-US bargaining position
-European moves toward common float
-Disagreement
-Failure
-West Germany
-Consultation with US
-Defense of rate parity
-France’s position compared to US

Shultz’s view of US intervention
-Burns’s position
-Flexible exchange rates
-Burns’s position
-Non-intervention
-Leverage
-45-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Flexible negotiating position

US policy toward common float
-Political implications
-Domestic
-New York bankers
-View of nation
-US leadership
-US interest in a divided Europe
-President's letter to Brandt
-Need for consultations
-Europe’s skepticism
-Independent action
-US intervention
-Conditions
-Europe’s response
-Heath, Japan
-US assertion of leadership
-Consultation with US
-Leverage in other negotiations
-Mutual and Balanced Force Reductions [MBFR], Nuclear
agreement

US relations with Europe
-US economic strengths
-US interests

Kissinger’s interpretation of Brandt's letter
-Heath
-Deal
-US intervention
-Europe’s rejection
-West Germany
-Need to float currency
-Brandt’s promise
-Blame on US

US intervention
-Imposition compared to offer
-46-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Europe’s response
-Float, consultation with US
-US negotiating leverage

President's letter to Brandt
-Support for European integration
-Impact on Atlantic alliance
-Unilateral decisions
-US, Japan
-Common float
-US input
-Intervention
-Japan
-Brandt
-Agreement without US support
-Dealings with France
-Heath
-Nuclear issues
-Dealings with President

US intervention in monetary system
-Shultz’s viewpoint
-Exchange rates
-Need for convertibility
-Equilibrium
-France’s opposition
-US military and aid operations, investments
-Separation of trade from monetary problems

President's letters to Heath, Brandt, and Japan
-Importance
-Kissinger’s recommendations
-European alternatives
-Responses by Europeans
-Intervention
-Advantages of European initiative
-Question about intervention
-US responses
-Advantage of European initiative
-47-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Compensation for US
-Europe’s position specified
-Intervention, float
-Intervention

European float of currency
-Workability
-Chances
-West Germany, France, Belgium, Netherlands, Luxembourg float
-Workability
-Chances
-Brandt
-Problems
-Great Britain’s response
-US bailout
-European integration
-Failure
-US response

Letter to Brandt
-Alternatives to common float
-US support

European integration
-US policy toward
-Official
-Unofficial
-Steps toward common economic policy
-Action only by pressure
-US support
-Economic compared to defense integration
-Working against US interests

President's letter to Brandt
-Draft
-Kissinger and Shultz

Shultz's trip
-Europe and USSR
-48-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)


-Advisability
-Length

-Energy, tax, trade issues
-Postponement
-Shultz’s return from Europe
-Shultz's trip to USSR
-Impact

Most Favored Nation status [MFN] for USSR
-Helmut (“Hal”) Sonnenfeldt’s concern
-Shultz's talks with Jacob K. Javits
-Trade bill
-Jackson Amendment
-Senate supporters
-President's request for authority
-Congressional veto power
-Advantages
-Jackson Amendment
-Javits’s recommendations
-Sonnenfeldt’s concern
-Kissinger’s critique
-USSR
-President’s support

Shultz’s trip
-Advantages
-Consultation with Europeans
-Problems
-Congressional vetoes
-Kissinger’s viewpoint
-Postponement
-Letters

Kissinger left at 2:07 pm.

William E. Simon
-Treasury Department
-Abilities
-49-

NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. June-2010)
Conversation No. 868-15 (cont’d)



Shultz left at 2:07 pm.
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