101. Memorandum of Conversation1
SUBJECT
- Summary of the President’s Telephone Call to FRG Chancellor Helmut Schmidt
PARTICIPANTS
- President Jimmy Carter
- FRG Chancellor Helmut Schmidt
The President and the Chancellor exchanged greetings.
The President said that he had called to say he had read with care—and deeply appreciated—the Chancellor’s recent speech in Hamburg.2 It reflected the President’s sentiments exactly, and would show that reports of disagreement between them are false. He just wanted the Chancellor to know that he cherishes the deep friendship between them and between our peoples.
Chancellor Schmidt replied that it was kind of the President to say this. This morning, he had given his annual “state of the union” speech, and in it there were two or three pages devoted to the deep-seated and deep-rooted relations between our two peoples, and the historical ties. He would like the President to have the full text, and would arrange for the U.S. Ambassador to get one.3
The President said he knew they were thinking alike on this; and he asked how things are going in Germany.
Chancellor Schmidt replied that, in terms of the domestic situation, there are two complexes of different factors. On the one hand, there is, stronger than before, the problem of labor disputes, since they have about 1 million people out of work. But on the other hand, the economic situation is going up. In the last quarter of 1977, they had a real increase in growth of 6%, calculated on the “Anglo–American” yardstick. This was an enormous upswing, though he could not say whether it would endure into the first quarter of 1978. But the domestic outlook is fine. The foreign outlook, however, is not as good, especially with exchange rates and currency. (The President agreed.) U.S. officials from Treasury, and German officials from the Finance Ministry, will be working together this weekend, on a common communique, which should show the market what we jointly would do.4 We should do all that we can to defend the dollar.
The President said he looked forward to seeing the communique and was sure it would be very positive. On energy, we are moving forward here. On natural gas, we should have a result shortly. He is invoking the Taft–Hartley Act, with regard to the miners.5 Some coal production is going up—though the miners are certainly an independent lot. He cannot predict the outcome of the strike.
Chancellor Schmidt asked about a natural gas vote in the Senate.
The President replied that a compromise proposal had come out of the Senate conferees, and was going to the conferees of the House. Following that there would be a vote.6 This is the first breakthrough in months on energy.
Chancellor Schmidt returned to the subject of currency. Their chances would be great of convincing the market, if there were no limit on the instruments and the quantities that would be employed. The smaller the quantities available, the less convincing would be their effect. They need to make the market believe that enormous quantities of resources are available, and then they probably won’t have to use them.
The President said that he understood. Perhaps this could be reflected in the communique this weekend.
Chancellor Schmidt said that this was a consequence of his meeting with Mike Blumenthal, recently.7
The President said that that was a productive talk. And he said that we were happy to have had the Finance Minister here.8 He is looking forward to having the Chancellor here in May for the NATO Summit. But if in the meantime there are any problems, at any time, the Chancellor should send a dispatch or phone him, and they would get it resolved.
Chancellor Schmidt said he would do so if necessary. He thinks that on currency questions, SALT, and the neutron bomb, we are having very close consultations, for which he is personally gratified. These are very deep consultations.9
On the other hand, at the time of the NATO Summit, he would be going for two days beforehand to the UN Special Session on Disarmament to give a speech. There would be some time in between—perhaps Saturday the 27th, or Sunday the 28th, or Monday the 29th—if the President thinks it would be worthwhile to have a private chat, he would be happy to come by, perhaps just to slip into the White House for a talk.
The President said that this was very good, but they should see how things go. He does not have his schedule with him, but that they could work it out, if it seemed advisable.10 He added that last night he had got a message from Siad Barre, saying that he is withdrawing his forces from the Ogaden. We have no confirmation of the message, as yet.
Chancellor Schmidt said he had had the same message.
The President said that it isn’t clear whether this is just Somalia forces, or includes “liberation forces” as well. He hopes, however, that this can bring an end to the immediate conflict, and then lead to getting Cuban and Soviet troops out.
Chancellor Schmidt said that he has become increasingly concerned about Soviet and Cuban presence in that part of the world.
The President said that the Cubans are only surrogates for the Soviet Union, and go wherever the Soviet Union sends them. They are better trained than most African forces. But this puts the United States in a bad position. However, there is some natural inability for them to keep up a permanent presence, since they are not at all for economic and humanitarian purposes, as opposed to military involvement.
Chancellor Schmidt asked about new developments in Rhodesia.
The President said that he had met with David Owen yesterday. They had agreed to adhere to the Anglo–American proposal, and believed that the internal solution could not endure, unless it gained broader acceptance.11
Chancellor Schmidt asked whether any language had been put out publicly.
The President said yes—and that he has a press conference this afternoon at which he is sure to be asked about it.12 David Owen and Cy Vance also met yesterday afternoon, and put out a common statement after the meeting. He would see that the Chancellor got it.
Chancellor Schmidt said that they would use the same line of language.
The President said that he looked forward to seeing the Chancellor here, and wanted to reaffirm their friendship.
Chancellor Schmidt thanked the President very much and extended his regards to Mrs. Carter. Could they have their press secretaries say that they had talked?
The President agreed and wished the Chancellor good luck.
(The call concluded 8:34 a.m.)
- Source: Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 36, Memcons: President: 2–3/78. Secret; Sensitive. Carter spoke to Schmidt from the Oval Office. At the top of the page, Carter wrote: “ok. J.”↩
- On March 8, Brzezinski supplied Carter with the portion of Schmidt’s March 3 speech to the Ostasiatischer Verein in Hamburg dealing with U.S.-FRG relations. (Memorandum from Brzezinski to Carter, March 8; Carter Library, National Security Affairs, Brzezinski Material, Country Files, Box 24, German Federal Republic 1/77–3/78)↩
- In telegram 4443 from Bonn, the Embassy provided the text of Schmidt’s comments on U.S.-FRG relations, part of his March 9 speech to the Bundestag on the “state of the nation.” (National Archives, RG 59, Central Foreign Policy File, D780108–0865)↩
- On March 13, the United States and the Federal Republic of Germany announced that they had agreed on joint intervention in currency markets by both finance ministries, the Federal Reserve Bank, and the Bundesbank to support the dollar. (Clyde H. Farnsworth, “Plan is Announced by U.S. and Germany to Stabilize Dollar,” New York Times, March 14, 1978, p. 1)↩
- On March 6, Carter invoked the Taft-Hartley Act in response to a coal strike by 160,000 members of the United Mine Workers. (Ben A. Franklin, “Carter Invokes Taft-Hartley Act to Compel Miners to Halt Strike, Says ‘The Law Will be Enforced,’” New York Times, March 7, 1978, pp. 1, 24)↩
- Reference is to a tentative Senate agreement on deregulation of natural gas prices announced on March 7 and presented to House leaders on March 8. (Adam Clymer, “Gas-Price Accord Nearing in Senate, Conferees Believe,” New York Times, March 8, 1978, pp. A1, D15; Steven Rattner, “Senators Present Natural Gas Plan to House Leaders,” New York Times, March 9, 1978, pp. D1, D12)↩
- Reference is to Schmidt’s February 13 meeting with Blumenthal. See Foreign Relations, 1977–1980, Volume III, Foreign Economic Policy, Document 111.↩
- Reference is to Lambsdorff’s early February trip to Washington for talks with U.S. policymakers. Telegram 2549 from Bonn, February 9, reported: “The current story circulating in the FRG Government is that Minister of Economics Lambsdorff mistakenly exchanged briefing books with Ambassador Strauss during their recent meeting in Washington. It didn’t matter, the positions were identical.” (National Archives, RG 59, Central Foreign Policy File, D780061–0566)↩
- On March 4, Aaron and Blech met to discuss USSR–FRG relations, ERW, and SALT. A record of this meeting is in the Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 33, Memcons: Aaron, David: 1–10/80.↩
- Carter and Schmidt held a breakfast meeting in the Oval Office on Tuesday, May 30 from 8:04 a.m. until 9 a.m. (Carter Library, President’s Daily Diary) No U.S. memorandum of conversation for this meeting was found; for a German record, see AAPBD 1978, Document 168.↩
- See Foreign Relations, 1977–1980, Volume XVI, Southern Africa, Document 195.↩
- See “The President’s News Conference of March 9, 1978,” Public Papers: Carter, 1978, pp. 489–498.↩