198. Letter From the Chairman of the Board of Governors of the Federal Reserve System (Burns) to President Nixon 1

Dear Mr. President:

I think you ought to know this: Unemployment in recent months has risen in every foreign country belonging to the so-called “Group of Ten”; namely, Belgium, France, Germany, Holland, Sweden, Switzerland, the United Kingdom, Canada, and Japan. For some reason that eludes me, the Italian figures on unemployment are ambiguous; but it seems clear from other data, particularly on industrial production, that Italy is in trouble.

I am by no means ready to conclude that an international recession has begun. But the evidence at hand does seem to support the view that the rate of growth of the outside economy is definitely slowing down. This may have far-reaching implications for the kind of monetary and trade settlement that we can work out with the outside world.

Sincerely yours,

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Name Files, Box 810, Arthur Burns. No classification marking. Attached to a November 18 memorandum from Hormats to Kissinger recommending Kissinger sign a transmittal memorandum to the President that summarized Burns’ memorandum. On Hormats’ memorandum Kissinger wrote “OBE.”