210. Editorial Note

The G-10 Deputies met in Rome on November 29, 1971, at 3:30 p.m. A paper entitled “Highlights of Meeting of Deputies of the Group of Ten,” which summarizes the Deputies’ discussion, is in the Washington National Records Center, Department of the Treasury, Records of Secretary Shultz:FRC 56 80 1, Rome G-10 Meeting 11/30-12/1/1971. Section I of the paper was drafted in Secretariat format and may be Chairman Ossola’s draft of his prepared remarks for the opening of the G-10 Ministerial on November 30. Section II is presumably a U.S. draft of Volcker’s response to Ossola and remarks of other Deputies following Volcker’s intervention.

Section III of the paper, entitled “Comments on Volcker Statement of U.S. Substantive Position,” is the U.S. record of the Deputies’ debate about releasing the U.S. position. “After the Volcker statement, including his intention to make the statement public, all of the other nine delegations expressed the view that publication of a formal U.S. statement before the Ministers met would inject an element of inflexibility into the U.S. position that would change the whole atmosphere of the discussions. The French, in particular objected to the last sentence of paragraph 5 dealing with no dual markets, mentioning this passage as not appropriate in light of the forthcoming Nixon-Pompidou meeting…. Mr. Volcker argued that the U.S. statement was an attempt to put forward a reasonable, realistic position that met the desires of others for the U.S. to be more specific. The U.S. was concerned that parts of the U.S. position would be leaked in an unfavorable light. The position had to be seen as a package.” The paper that Volcker presumably gave the G-10 Deputies was transmitted to the White House on November 30; see Document 211. No other paper that might have been the text of that proposal was found in White House, Treasury Department, or State Department records. In his memoirs Volcker reports giving the Deputies a paper with the U.S. proposal. [Page 579](Paul A. Volcker and Toyoo Gyohten, Changing Fortunes: The World’s Money and the Threat to American Leadership, Times Books, 1992, page 85)

On November 30 Secretary Connally met with Prime Minister Colombo and Treasury Minister Aggradi at 9 a.m., prior to the G-10 Ministerial that would convene later that day. Colombo said that he understood the United States had distributed a document to the G-10 Deputies the previous day. Subsequently, Aggradi returned to that point and said “the document distributed by the U.S. yesterday has caused concern to all the Europeans. The document seems to broaden the debate back to general principles rather than focusing it on specific problems. He was afraid that when the Ministers of the Six would meet at 11:00 A.M. that morning they would be very reticent to go forward with the idea of presenting their common proposals to the G-10 meeting.”

Connally replied that “he could not agree that the United States’ document was broadening the issues. We have been consistent from the very beginning in holding that the areas for discussion were three: currency realignment, trade issues and burden sharing. It is true that up to now we have not been very specific on trade and burden sharing because we were afraid of being put in the position of seeking to dictate to others. However, the United States has been taken to task as being overly silent, and thereby of obstructing negotiations, because it did not put forward specific proposals. Now that we have been more specific there are objections because we have done so. What is the European position then? Do you want us to be specific or don’t you?”

As the discussion concluded Connally made two points: “First of all, he recognized that the G-10 was not the ideal forum for tackling questions of trade and burden sharing. Yet it was after all true that the ultimate decision on these matters rests with heads of government and not with individual ministers and the decisions could therefore be expressed in this forum. Secondly, in a philosophical vein, he wanted it understood that in these times of fast change the United States is deeply committed to continuing and to strengthening free trade policies. We are strongly concerned that the existence of various international entities such as the IMF, the OECD, the EEC and the GATT are not always coordinated and tend to impede the solution of problems. In a fast moving age, when problems arise we cannot afford to be bogged down by hide-bound institutional arrangements or by considerations of pride and prestige of nations or heads of State.” The memorandum of the conversation is in the Washington National Records Center, Department of the Treasury, Records of Secretary Shultz: FRC 56 80 1, Rome G-10 Meeting 11/30-12/1/71.