Office of the Historian

215. Telegram From the Embassy in Germany to the White House1

Bonn, November 21, 1968.

For Walt Rostow from Fried. Meeting is now at a very critical point. The Germans have been unwilling to budge from their offer of a 4 percent border tax adjustment and have ruled out any revaluation. Ortoli said this morning that if the Germans cannot do more the French would have to consider 15 percent. They would do less if the Germans do more. Our hope now is to get the French down to 10 percent or less with no other changes in parities. The British look as though they will hold firm and not move. But we need a credible package that will stop speculation.

Fowler proposed in the Ministers’ meeting this morning that the German Government announce a best effort undertaking to seek approval for a border tax adjustment of 7–1/2 percent in place of 4 percent. We believe an improvement of the German offer along these lines coupled with the credit package we think we can get and the willingness of others to hold their parities could provide a reasonably successful outcome to the meeting.

Fowler would like to have a Presidential letter to Kiesinger along the attached lines to be used at his discretion in the next few hours. He is not at the moment confident that the impasse can be broken and will use the letter only if the prospects are there.

Draft letter follows.2

  1. Source: Johnson Library, National Security File, Subject File, Monetary Crisis, November 1968, Cables and Memos, Vol, 1 [2 of 2], Box 22. Secret; Sensitive. The source text, identified as “Bonn Telecon 21,” bears no additional information on the place, date, or time of transmission, but the telegram was received at the White House on November 21, 10:34 a.m., as identified in the Washington-Bonn Telecon Chronology of Events for November 21. (Ibid.)↩
  2. The undated draft letter (Bonn Telecon 22) is ibid. The President cleared the letter with one suggested change, and added the following instruction: “He wants you to use your judgment as to whether or not this letter is used. But it is his judgment that you should not use it unless you feel there is a ‘good possibility or even probability’ that it would be decisive. He would wish to avoid engaging the President in an effort to move the Germans that failed.” (Message from Rostow to Fowler (Washington Telecon 19), November 21; ibid.) No evidence has been found to indicate that the President’s letter was actually delivered to Kiesinger.↩