125. Editorial Note

As currency uncertainties emerged in early May 1969, due to the imminent change in the French Government and renewed speculation that the German Mark would be revalued and the British pound devalued or allowed to float, policymakers began to consider options for actions by the U.S. Government.

A May 7 paper entitled “Policy Considerations in Current Monetary Situation” had a short-term focus related to the current crisis, while a May 10 draft memorandum to the President on the Secretary of the Treasury’s letterhead entitled “U.S. Policy Options With Respect to International Monetary Evolution” looked to the longer term evolution over the next decade. Both papers are 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, Current Problems and Contingency Planning 4-10/69. There is no indication that the draft memorandum went forward to the President, but many of the ideas in the memorandum are included in the paper prepared for the meeting with the President on June 26; see Tab B to Document 131.

On May 10 Bergsten sent Kissinger a memorandum that reads as follows: “Following is the memorandum which you requested, which Dick Cooper (who flew down for the day) and I wrote today. Volcker would not commit himself to prepare an options paper so we proceeded fully on our own. The Volcker Group will meet tomorrow night.” (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 309, Balance of Payments) The paper Bergsten referred to has not been found, but attached to another copy of his May 10 memorandum is a May 2 memorandum from Cooper to Kissinger on “Implications of Gold Suspension and a Floating Pound.” In a May 13 memorandum to Kissinger on “The International Monetary Situation,” Bergsten indicates that his and Cooper’s May 10 paper set out options for the current crisis. (Both ibid., Agency Files, Box 215, Council of Economic Advisers—Secret) No record of a May 11 Volcker Group meeting has been found.