110. Editorial Note

In the late 1960s and early 1970s, U.S. policymakers gave advanced thought to the nature of the U.S. response to international monetary crises and the need to restructure the international monetary system. Papers on these matters looked at such issues as currency devaluations and appreciations, suspending the dollar’s convertibility to gold, and changing the official price of gold, all policy issues that, if their consideration became public knowledge, could lead to intense, destabilizing speculation in foreign exchange and commodity markets. Papers on such issues, therefore, were usually classified and received very limited distribution.

Records pertaining to anticipatory, long-term international monetary planning during the Nixon administration in the Washington National Records Center, Department of the Treasury, Deputy to the Assistant Secretary for International Affairs: FRC 56 83 26, Contingency Planning 1965-1973. (This also contains documents on planning for currency crises during the Johnson administration.) Included are papers on possible foreign exchange crises in 1969 and 1973, a possible float of the pound, and an “excessive” devaluation of the French franc. In 1972 concern centered on a possible breakdown in 1973 of the December 1971 Smithsonian Agreement on exchange rate realignment. The sole contingency planning paper regarding the U.S. Negotiating Position on Gold is printed as Document 153.

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Several “contingency” papers prepared in late 1970 and early 1971 out of concern with the continuing balance-of-payments deficit and as the foreign exchange markets heated up in May 1971 are in the Washington National Records Center, Department of the Treasury, Files of Under Secretary Volcker: FRC 56 79 15, 1971 Contingency Planning Papers. These papers, dating from November 23, 1970, to May 9, 1971, anticipate the suspension of the dollar’s convertibility to gold announced as a part of President Nixon’s New Economic Policy on August 15, 1971.

During the Nixon administration much of the early work on contingency planning was done in the Volcker Group and many of the documents are ibid., Volcker Group Masters:FRC 56 86 30. Volcker Group documents from the Spring and Summer of 1971 focus on such issues as limited exchange rate flexibility, and none of the documents from that time presage the 10 percent import surcharge and suspension of the convertibility of the dollar to gold the President announced on August 15, 1971.