14. Editorial Note

Western European and Japanese foreign exchange markets reopened in mid-February 1973. A modicum of calm temporarily returned to the markets, but, by the final week of February, speculative pressure had again mounted against the dollar. Western European central banks [Page 49] once again absorbed massive sums of dollars in an effort to support the value of the dollar. The speculative pressure quickly grew too great, and several Western European exchange markets were closed on March 2. In a press conference that day, President Richard Nixon professed his faith in the fundamental strength of the American economy and the dollar, proclaiming that the United States would “survive” the “international attack upon it [the dollar] by people who make great sums of money by speculating.” The President also said: “Let me say there will not be another devaluation. I would say, second, we are going to continue our program of fiscal responsibility so that the dollar will be sound at home and, we trust as well, abroad. And we also are going to continue our efforts to get the other major countries to participate more with us in the goal that we believe we should all achieve, which we set out at the time of the Smithsonian and other agreements, and that is of getting an international monetary system which is flexible enough to take care of these, what I believe are, temporary attacks on one currency or another.” (Public Papers: Nixon, 1973, page 159)