Office of the Historian

220. Paper by the President’s Special Assistant (Rostow)1

Washington, November 22, 1968.

CREDIT PACKAGE

1.

The G–10 meeting is arranging a $2 billion package for France:

  • —U.S. share is $500 million,
  • —German share is $600 million.

This is short-term money, about six months, intended to provide psychological support and to finance short-term speculative capital flows. Generally, under these circumstances and if the over-all program is effective, this type of credit is used little, if at all. The Federal Reserve will put up $300 million of the $500 million, and the Treasury, through the Exchange Stabilization Fund, will put up $200 million.

2.

In addition, France will arrange a stand-by credit at the International Monetary Fund of $985 million, which is the full limit of funds available to it through that institution.

Through the mechanics of the IMF, and assuming they draw the full amount of $985 million with a good portion in U.S. dollars (as opposed to other currencies), this would mean that the full gold tranche position of the U.S. at the IMF will be re-established—which means that the United States will have virtually automatic credit of one billion two hundred ninety million dollars available to us from the Fund—a position we have not been in for about five years.

Walt
  1. Source: Johnson Library, National Security File, Subject File, Monetary Crisis, November 1968, Cables and Memos, Vol. 1 [1 of 2], Box 22. Secret. An attached memorandum from Rostow to President Johnson, November 22, 10:10 a.m., notes that the paper printed here outlines the credit package referred to in paragraph 3 of Fried’s message (Document 219). The source text is apparently the retyped verbatim text of a telegraphic message sent by Fried to Rostow in a Bonn telecon, but this message has not been found.↩