4. Letter From President Nixon to Japanese Prime Minister Tanaka1

Dear Mr. Prime Minister:

The renewed disturbances in currency markets in recent days forcibly bring to our attention the need to deal effectively with the remaining deep-seated imbalances in world payments. Because the continued Japanese–United States imbalance is so central to this problem, I am impelled to contact you directly, and with a sense of great urgency.

I believe the time has come for decisive action, including specifically a realignment of the dollar-yen relationship of the required magnitude. I fear that delay in this matter can only gravely risk long-lasting damage to the fabric of open international economic cooperation.

My sense of urgency is founded in large part in the thought that, in the face of continuing pressures on our trade position and on the eve of major trade negotiations, the world faces a turning point with respect to the solution. By forceful action, we can together control events in a manner that will preserve our open trading relationship, contribute to our mutual prosperity, and provide strong support for our vital relationships in other areas. In contrast, failure to act in a positive spirit and with great vigor could leave us without defense against these forces in every country, including the United States, that would fragment the world economy and drive us apart.

In the circumstances, I have asked Mr. Paul Volcker, Under Secretary of the U.S. Treasury for Monetary Affairs, to fly to Tokyo tonight to relate in fuller detail our thinking, and particularly the reasons for our conclusion that action must be taken immediately in the exchange rate field if we are to remain in command of the situation.

I know you have thought long about these matters, and I look forward to a prompt and positive resolution. It is vitally important that Japan and the United States as the Free World’s two strongest economic powers move forward together to solve this crisis.2


  1. Source: National Archives, Nixon Presidential Materials, White House Special Files, Staff Member & Office Files, President’s Office Files, President’s Handwriting, Box 20, Feb 1–15, 1973. Confidential; Limdis.
  2. President Nixon added the last sentence by hand. The original, which is presumably the text to be submitted to Tokyo, is unsigned.