Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

172. Action Memorandum From the President’s Assistant for International Economic Affairs (Peterson) to President Nixon¹

Washington, January 14, 1972.

SUBJECT

• Policy Statement on Expropriations

The policy statement—attached for your review²—on expropriations required by NSDM 136 has been formulated by an interagency committee of Treasury, State, NSC and the Council on International Economic Policy. The views of others, both within and without the Government, have also been taken into account. Dick Allen chaired the committee. There are two issues which will require Presidential determination:

1. who makes the statement, and

2. when the statement should be made.

1. Who should make the Statement

Treasury, and specifically John Connally, believes you should make the statement. Treasury feels that the importance of the expropriation issue, reflected by the rising concern of American foreign investors, merits a Presidential announcement. John Connally believes the statement will be very advantageous for you in domestic political terms. John also feels that it would be a serious error if Secretary Rogers were to make it, not only because you get less credit, but because the State Department is a far less credible source for this kind of policy statement. If you were to choose not to make the announcement, he would find it more acceptable if I were to make it in your behalf, though he clearly prefers your making the statement in your own behalf.

Secretary Rogers, while quite agreeable to your issuing the statement, believes that you would be better protected against both foreseeable adverse reactions, particularly in Latin America, and possible unforeseeable reactions here and abroad if he were to issue the statement.³ He further argues that it is essentially a foreign policy issue on which he should take the heat for you. He would object to my making the statement on your behalf on the grounds that he, as the senior U.S. spokesman for foreign policy should do so.

My first recommendation is that you read the statement before making any decision. I believe it has enough in it that supports development abroad that the domestic political benefits probably outweigh the foreign policy costs. Very important, John Connally feels so strongly about this that you will want to consider whether it is worth taking a course of action he opposes. It is not as “Presidential” a kind of statement as I would like but given the total situation, including Connally’s strong views, I think you should make it. Henry Kissinger agrees.

As to the method of making this announcement, I would prefer it be issued in your behalf through Ron Ziegler’s office but not with any strong personal involvement on your part which might, on balance, not be in keeping with your Presidential peacemaker role.⁴ Then, Connally, I and others can see to it that you get credit for the decision with the domestic interests.

I recommend⁵

• Option 1—The Statement be made by the President.
• Option 2—The Statement be made by the Secretary of State.
• Option 3—The Statement be made by a White House spokesman, perhaps Pete Peterson, on the President’s behalf.

2. When the Statement Should be Made

Treasury identifies an urgency to make the statement very soon, before Congress reconvenes, since passage of legislation covering replenishment of funds for international finance institutions may be affected. The legislation will probably be considered by the House quite soon after Congress reconvenes. Furthermore, the draft legislation currently before Congress includes the Gonzalez amendment,⁶ unpalatable to Secretary Connally and others, which would require the U.S. to withhold support for multilateral loans in the case of uncompensated expropriations. Early issuance of the statement would strengthen the Administration in opposing this amendment. State and NSC have no objection to an early statement; I also believe it should be made now.

Make announcement very soon, before Congress reconvenes⁷

Make announcement later

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 219, CIEP. Secret; Eyes Only. Attached to a January 17 memorandum from Hormats to Haig, which reported Kissinger’s agreement with the recommendation that the statement be issued by the President very soon. Hormats recommended Haig forward Peterson’s memorandum to the President.
2. Not printed. The Presidential statement was issued on January 19; see footnote 9, Document 157.
3. See Document 171.
4. On January 18 Peterson sent a memorandum to Rogers, Connally, and Stans informing them the President had directed the immediate release of the statement on his behalf by the White House Press Secretary. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 219, CIEP)
5. None of the Approve/Disapprove options under the Options listed below is checked or initialed.
6. Legislation containing the Gonzalez Amendment, which required negative votes in the IFIs for assistance to countries that had expropriated U.S. property, was signed into law on March 10, 1972. See also Document 176.
7. Neither of these options is checked or initialed.