252. Telegram From the Department of State to the Embassy in Germany1
130816. Deliver following message from the President to Chancellor Kiesinger as soon as possible:
“March 15, 1968
Dear Chancellor Kiesinger:
By now you will know that the Bank of England has acted to close the London gold market and that the governors of the central banks, active in the Gold Pool, have been invited to meet in Washington this week end.
[Page 645]It is plain that we have at hand the means to overcome the dangers caused by the disorder in the gold market. The speculators are banking on an increase in the official price of gold. They are wrong.
We can act together through the central banks to contain the speculative movements of funds that will almost surely occur in the next few weeks. Above all, we can act promptly to ratify and implement a plan for Special Drawing Rights as a means of replacing the reserves destroyed by speculation since the devaluation, and of meeting our needs for growth in reserves.
But it remains true that these financial disorders—if not promptly and firmly overcome—can profoundly damage the political relations between Europe and America and set in motion forces like those which disintegrated the Western world between 1929 and 1933. That is why the meeting in Washington this week end—and the cooperation it must organize—is of extraordinary importance to us both.
I hope that we can remain in close touch as our bankers and ministers work to devise means to overcome these dangers.2
Sincerely, Lyndon B. Johnson”