121. Remarks by President Nixon1

[Omitted here are brief introductory comments.]

I am convinced, on the basis of the evidence of the past year, that we are not only participating today in a great moment in history, but that we are witnessing and helping to create a profound movement in history.

That movement is away from the resolution of potential conflict by war, and toward its resolution through peaceful means. The experienced people gathered in this room are not so naive as to expect the smoothing out of all differences between peoples and between nations. We anticipate that the potential for conflict will exist as long as men and nations have different interests, different approaches, different ideals.

Therefore, we must come to grips with the paradoxes of peace. As the danger of armed conflict between major powers is reduced, the potential for economic conflict increases. As the possibility of peace grows stronger, some of the original ties that first bound our postwar alliances together grow weaker. As nations around the world gain new economic strength, the points of commercial contact multiply along with the possibilities of disagreements.

There is another irony that we should recognize on this occasion. With one exception, the nations gathered here whose domestic economies are growing so strongly today can trace much of their postwar growth to the expansion of international trade. The one exception is the United States—the industrial nation with by far the smallest percentage of its gross national product in world trade.

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Why, then, is the United States—seemingly with the least at stake—in the forefront of those working for prompt and thoroughgoing reform of the international monetary system, with all that will mean for the expansion of trade now and in the future?

One reason, of course, is our national self-interest. We want our working men and women, our business men and women, to have a fair chance to compete for their share of the expanding trade between nations. A generation ago, at the end of World War II, we deliberately set out to help our former enemies as well as our weakened allies, so that they would inevitably gain the economic strength which would enable them to compete with us in world markets. And now we expect our trading partners to help bring about equal and fair competition.

There is another reason, more far-reaching and fundamental, that motivates the United States in pressing for economic and monetary reform.

Working together, we must set in place an economic structure that will help and not hinder the world’s historic movement toward peace.

We must make certain that international commerce becomes a source of stability and harmony, rather than a cause of friction and animosity.

Potential conflict must be channeled into cooperative competition. That is why the structure of the international monetary system and the future system of world trade are so central to our concerns today. The time has come for action across the entire front of international economic problems. Recurring monetary crises such as we have experienced all too often in the past decade, unfair currency alignments and trading agreements which put the workers of one nation at a disadvantage with workers of another nation, great disparities in development that breed resentment, a monetary system that makes no provision for the realities of the present and the needs of the future—all these not only injure our economies, they also create political tensions that subvert the cause of peace.

There must be a thoroughgoing reform of the world monetary system to clear the path for the healthy economic competition of the future.

We must see monetary reform as one part of a total reform of international economic affairs encompassing trade and investment opportunity for all.

We must create a realistic code of economic conduct to guide our mutual relations—a code which allows governments freedom to pursue legitimate domestic objectives, but which also gives them good reason to abide by agreed principles of international behavior.

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Each nation must exercise the power of its example in the realistic and orderly conduct of internal economic affairs so that each nation exports its products and not its problems.

[Omitted here are comments relating to domestic economic matters and to recently concluded agreements with the Soviet Union.]

We recognize that the issues that divide us are many and they are very serious and infinitely complex and difficult. But the impetus that will make this negotiation successful is the force that unites us all, all the 124 nations represented here today: that is a common need to establish a sound and abiding foundation for commerce, leading to a better way of life for all the citizens of all the nations here and all the citizens of the world.

That common need, let us call it the world interest, demands a new freedom of world trade, a new fairness in international economic conduct.

It is a mark of our maturity that we now see that an unfair advantage gained in an agreement today only sabotages that agreement tomorrow.

I well remember when I was a first-year law student, 32 years ago, what the professor of contracts said as he opened the course. He said, “A contract is only as good as the will of the parties to keep it.”

The only system that can work is one that each nation has an active interest in making work. The need is self-evident. The will to reform the monetary system is here in this room, and, in a proverb that has its counterpart in almost every language here, where there is a will there is a way.

We are gathered to create a responsible monetary system, responsive to the need for stability and openness, and responsive to the need of each country to reflect its unique character.

In this way we bring to bear one of the great lessons of federalism: that often the best way to enforce an agreed-upon discipline is to let each member take action to adhere to it in the way that is best suited to its local character, its stage of development, its economic structure.

For its part, I can assure you, the United States will continue to rise to its world responsibilities, joining with other nations to create and participate in a modern world economic order.

We are secure enough in our independence to freely assert our interdependence.

These are the principles that I profoundly believe should and will guide the United States in its international economic conduct now and in the years ahead.

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We shall press for a more equitable and a more open world of trade. We shall meet competition rather than run away from it.

We shall be a stimulating trading partner, a straightforward bargainer.

We shall not turn inward and isolationist.

In turn we shall look to our friends for evidence of similar rejection of isolationism in economic and political affairs.

Let us all resolve to look at the ledgers of international commerce today with new eyes—to see that there is no heroism in a temporary surplus nor villainy in a temporary deficit, but to see that progress is possible only in the framework of long-term equilibrium. In this regard we must take bold action toward a more equitable and a more open world trading order.

Like every leader of the nations represented here, I want to see new jobs created all over the world, but I cannot condone the export of jobs out of the United States caused by any unfairness built into the world’s trading system.

Let all nations in the more advanced stages of industrial development share the responsibility of helping those countries whose major development lies ahead, and let the great industrial nations, in offering that help, in providing it, forgo the temptation to use that help as an instrument of domination, discrimination, or rivalry.

Far more is at stake here than the mechanics of commerce and finance. At stake is the chance to add genuine opportunity to the lives of people, hundreds of millions of people in all nations, the chance to add stability and security to the savings and earnings of hundreds of millions of people in all of our nations, the chance to add economic muscle to the sinews of peace.

I have spoken this morning in general terms about how we can advance our economic interdependence. Later this week, Secretary Shultz will outline a number of proposals which represent the best thinking of my top economic advisers. I commend those proposals to you for your careful consideration.2

The word “economics,” traced to its Greek root, means “the law of the house.”

This house we live in—this community of nations—needs far better laws to guide our future economic conduct. Every nation can prosper and benefit working within a modern world economic order that it has a stake in preserving.

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Now, very little of what is done in these negotiations will be widely understood in this country or in any of your countries as well. And very little of it will be generally appreciated.

But history will record the vital nature of the challenge before us. I am confident that the men and the nations gathered here will seize the opportunity to create a monetary and trading system that will work for the coming generation—and will help to shape the years ahead into a generation of peace for all nations in the world.

  1. Source: Public Papers of the Presidents of the United States: Richard Nixon, 1972, pp. 907-908. The President spoke at 11:18 a.m. in the Ballroom of the Sheraton Park Hotel at the opening session of the annual meeting of the Boards of Governors of the International Monetary Fund and the International Bank for Reconstruction and Development.
  2. See Document 122.