292. Memorandum of Conversation1

PARTICIPANTS

  • President Ford
  • Dr. Henry A. Kissinger, Secretary of State and Assistant to the President for National Security Affairs
  • Lt. General Brent Scowcroft, Deputy Assistant to the President for National Security Affairs

President: It makes me mad the way we have procrastinated on uranium enrichment.

Scowcroft: Lynn has held it up.

Kissinger: We are missing a chance to get a stranglehold like OPEC has on oil.

President: We will be ready to go by June 30.

Kissinger: There is another of these economic deals coming to you. I am not reliable on economic matters. But these issues are not basically economic. My role is to project an image of the U.S. which is progressive. Greenspan is a theoretician. He wants to vindicate a system which no one will support. Schmidt told me that unless we pull ourselves together on raw materials, he will go it alone.2 I want to fuzz it up. I don't want to accept a New Economic Order but I don't want to confront Boumedienne.3 I want to fuzz the ground. On substance I agree with Simon. I am not against Simon—only Schlesinger. [Laughter]4

President: Let them work out commodity agreements—they won't work.

[Page 1004]

Kissinger: We made points with Giscard and Schmidt with my Kansas City speech,5 and we said nothing.

President: When does this come up?

Kissinger: I think perhaps we can work it out. Perhaps Monday.6 I just want to be able to say "we have heard you and we are willing to discuss raw materials"—but not agree to indexing.

President: Let me look at the language. But I see no reason to talk theory when we can in a practical way just screw up the negotiations.

Kissinger: I don't think we should buy the New Economic Order or say the present system is great with just a little tinkering.

President: I agree.

Kissinger: Take the Brits. If we could say, "They have come out with proposals. We don't agree on all the points but think they have asked the right questions." I think we should be tough on the substance, but not on the theory.

President: If it comes up, I will express it in my way because that's the way I feel.7

[Omitted here is discussion unrelated to commodity policy.]

[Kissinger:] Schmidt's course is very similar to yours. President: He certainly is more capable than Brandt.

Rumsfeld:8 How about Bahr?

Kissinger: He is soft-headed—a pro-Communist.

You have money in the bank with the European leaders who have met you. Schmidt thinks we have underestimated the depth of our economic difficulties. He thinks we have no one who knows what he is talking about in economics. He likes Shultz.

President: That's interesting, because Shultz is like Alan [Greenspan].9

Kissinger: Yes, but Shultz knows foreign policy and he doesn't push the theory. Shultz wasn't too different than Connally—whom the economists hated—but he gave them a feeling of participation.

[Page 1005]

Schmidt will separate from us on raw materials if we insist on theoretical positions, because he can't afford a depression. That is what he is most interested in. I would like to send him a speech draft.

He will not follow us on a confrontation course with the LDC's. If he won't, neither will France, Great Britain or Japan. He wants to work with us. If you can reassure him on the economic facts…. If we will work with him on the economy, he will support us on everything else.

President: What does he want?

Kissinger: He likes the idea internationally of doing what you did domestically—an economic conference. To see how we can build in growth. There will be opposition—but internationally you don't have to agree to anything but talk.

The second thing—if you got some world leading economists over here for a meeting—private people.

Rumsfeld: It is a spectacular idea.

Kissinger: I would announce it when you got back, but tell him when you have lunch.10

Rumsfeld: Goldwin could start on it now.

Kissinger: The trick in the world now is to use economics to build a world political structure.

President: How would Alan react?

Kissinger: We wouldn't oppose it but he would want to discuss theory. We should not raise the theoretical system but will support whatever works. We can object to individual ideas on many grounds but not on grounds of a theory that no one will buy.

Schmidt is pathological on a few points—one is offset agreements. He will not agree to another one. Our Treasury group want to push it. If we insist, he will pull money out and put it back in.

You should confirm your close cooperation with him. He is your closest ally. You have done wonders with Giscard, but you can't rely on France.

[Omitted here is discussion unrelated to commodity policy.]

  1. Source: Ford Library, National Security Adviser, Memoranda of Conversation, Box 12. Secret. The conversation took place in the Oval Office.
  2. On May 21, Scowcroft sent President Ford a memorandum transmitting Kissinger's report of his breakfast meeting with Chancellor Schmidt in Bonn. Kissinger noted that the Chancellor "considers a forthcoming approval on commodities as essential. If US insists on status quo, Federal Republic would go it alone and Europe would separate from us." (Library of Congress, Manuscript Division, Kissinger Papers, Box CL 143, Geopolitical File, Germany (Federal Republic of Germany), Chronological File, May 1975)
  3. President Houari Boumedienne of Algeria was a leading spokesman for LDC issues.
  4. Brackets are in the original.
  5. In the report on his May 21 breakfast meeting with Schmidt, Kissinger noted that the Chancellor "welcomes the readiness of the Kansas City speech to consider a new commodity approach as he himself has advocated for some time." Regarding Kissinger's Kansas City speech, see Documents 288 and 289.
  6. May 26.
  7. From May 28 to June 3, President Ford traveled to Belgium, Spain, Austria, Italy, and Vatican City. During his May 28–31 visit to Brussels, where he attended a NATO summit meeting, he held bilateral meetings with NATO heads of government and state.
  8. Rumsfeld was called into the Oval Office earlier in the conversation.
  9. Brackets are in the original.
  10. President Ford and Chancellor Schmidt had lunch on May 29 in Brussels. A memorandum of their conversation is in the Ford Library, National Security Adviser, Memoranda of Conversation, Box 12.