[Page 141]

57. Memorandum From Secretary of the Treasury Connally to the President’s Assistant for International Economic Affairs (Peterson)1

CIEP Study Memorandum #12 rightly focuses on some key issues before the Administration. We will be sending along some suggestions for the first three items shortly.

However, I believe the memorandum raises, by indirection, important organizational issues that need to be resolved. Specifically, paragraph 4, which calls for a basic review of our approach to balance of payments and international monetary problems, seems simply to ignore existing responsibilities of the Treasury and present coordinating machinery.

I have assumed that the deliberations and responsibilities of the Volcker Group were to be continued—this has been the channel for issues such as those posed in paragraph 4. Obviously, as appropriate, the results of the Volcker Group work could be reviewed at sessions of the Council on International Economic Policy. I do not know whether you contemplate some other procedure; if so, we had better clarify this now.

Although not raising the matter directly, your memorandum also brings to mind a second issue—that of the role and function of the National Advisory Council on International Monetary and Financial Policies in coordinating, under Congressional mandate, our international lending activity. We have assumed that the NAC, too, would maintain its responsibilities and that its functions would not be the subject of any jurisdictional grab by others. As you know, the day to day work in this area for the past twenty-five years has been conducted quietly and efficiently at the staff and Assistant Secretary level.

In view of the creation of the CIEP, it may be that matters referred by the NAC Alternates to the Principals in the past would, hereafter, go to the Council. I would be prepared to function on that basis.

John B. Connally 3
  1. Source: Washington National Records Center, Department of the Treasury, Files of Under Secretary Volcker: FRC 56 79 15, CIEP Study Memoranda. Confidential. This memorandum and Document 58 are attached to a March 12 memorandum from Assistant Secretary Petty to Connally to the effect that the CIEP’s effort to get jurisdiction over balance-of-payments and international monetary issues was paralleled by State’s effort to be the focus for coordination of all foreign assistance agencies, which would impinge on Treasury’s responsibilities for the international financial institutions.
  2. Document 55.
  3. Printed from a copy that indicates Connally signed the original.