Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

115. Record of Meeting¹

Chequers, England, January 21, 1967.

RECORD OF MEETING AT CHEQUERS ON SATURDAY, 21ST JANUARY, 1967

PRESENT

• Chancellor of the Exchequer
• Mr. Secretary Fowler
• Mr. Deming
• Mr. Bator
• Sir William Armstrong
• Sir Denis Rickett
• Mr. Ryrie (Secretary)

Meeting of Finance Ministers on Monetary Policies

Mr. Secretary Fowler said that in his view the object of the meeting should be to make it easier for those responsible for monetary policies in the leading countries to understand how their policies affected others. It was important to press the Germans to take more fiscal action so as to enable them to adopt easier monetary policies. He did not think that it would be possible for those present to commit themselves to specific courses of action, but an effort should be made to reach a consensus on the general direction which policy should take.

The Chancellor of the Exchequer saw the object of the meeting as being to put some pressure behind Central Banks where necessary to take action to lower interest rates and Governments where appropriate to take action which would make it easier for Central Banks to lower interest rates.

An American draft communique was considered.² The Chancellor of the Exchequer thanked Mr. Fowler for providing this draft and said that he and his officials would consider it further.

[Here follows discussion of the Common Market; see Foreign Relations, 1964–1968, volume XIII, pages 529–530.]

International Liquidity

The Chancellor feared that a failure to reach agreement in the discussions on international liquidity was a real possibility and a question might arise whether all the other Continental countries would be willing to enter an agreement without France. He thought that the French Government would go on using international monetary questions for political purposes against the United States. He interpreted their recent moves on gold as motivated partly by fear that agreement would be reached without them on a new form of international reserve asset.

Mr. Secretary Fowler expressed his agreement and said it remained to be seen how far the French would go to obstruct progress. From a certain point obstruction could be counterproductive from their point of view. He was firm of the opinion himself that the only course was to press ahead with the negotiations and not allow ourselves to be diverted by the French tactics.

It was the opinion of both sides that the recent Belgian proposal,³ purporting to be a possible basis for a compromise between the French and the “Anglo Saxon” points of view, could not be taken seriously.

1. Source: Johnson Library, Bator Papers, Chequers Trip, Box 8. Secret. No drafting information appears on the source text. Copies were sent to 10 British officials and Bator. An attached note from Bator to Eugene Rostow, February 1, indicates that the “attached is for your personal information. Please do not circulate.” Bator added that he was also sending copies of this record to Walt Rostow, John Leddy, Tony Solomon, Bob Bowie, Nick Katzenbach, and John McNaughton.
2. The undated draft communique is ibid., Bator Papers, Chequers Meeting, January 21, 1967, Box 8.
3. Presumably reference is to a December 27 paper distributed by National Bank of Belgium Governor Ansiaux to Governor O’Brien of the Bank of England and Charles Coombs at the Federal Reserve Bank of New York following a recent meeting of the three in Basle at the Bank for International Settlements. A copy of the paper, with its “compromise formula,” was sent to Under Secretary of the Treasury Deming by C. de Strycker of the National Bank of Belgium under cover of a letter dated January 4, 1967. The de Strycker letter and Ansiaux paper were distributed to members of the Deming Group as DG/67/9 by George H. Willis on January 9, 1967. (Washington National Records Center, RG 56, OASIA Files: FRC 75 A 101, Deming Group) In the closing paragraph of his letter, de Strycker looks forward to discussing the compromise formula with Deming when they planned to meet in London in about 3 weeks, presumably a reference to the G–10 Deputies Meeting on January 24 at Lancaster House, following the January 21–22 meeting of Finance Ministers at Chequers (see Document 116). The G–10 Secretariat report, DG/67/63, indicates that both Deming and de Strycker were at the Lancaster House meeting. (Washington National Records Center, RG 56, OASIA Files: FRC 75 A 101, Deming Group) The U.S. Delegation’s minutes of the Lancaster House G–10 Deputies meeting are papers DG/67/31 and DG/67/31, Supp. 1, distributed to members of the Deming Group by Willis on January 30 and February 2, 1967, respectively. These reports of the Deputies meeting refer to a forthcoming French proposal that would first be discussed in the Monetary Committee of the EEC; see footnote 4, Document 116.