Preface

The Foreign Relations of the United States series presents the official documentary historical record of major foreign policy decisions and significant diplomatic activity of the United States Government. The Historian of the Department of State is charged with the responsibility for the preparation of the Foreign Relations series. The staff of the Office of the Historian, Bureau of Public Affairs, plans, researches, compiles, and edits the volumes in the series. Official regulations codifying specific standards for the selection and editing of documents for the series were first promulgated by Secretary of State Frank B. Kellogg on March 26, 1925. These regulations, with minor modifications, guided the series through 1991.

A new statutory charter for the preparation of the series was established by Public Law 102-138, the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993, which was signed by President George Bush on October 28, 1991. Section 198 of P.L. 102-138 added a new Title IV to the Department of State’s Basic Authorities Act of 1956 (22 USC 4351, et seq.).

The statute requires that the Foreign Relations series be a thorough, accurate, and reliable record of major United States foreign policy decisions and significant United States diplomatic activity. The volumes of the series should include all records needed to provide comprehensive documentation of major foreign policy decisions and actions of the United States Government. The statute also confirms the editing principles established by Secretary Kellogg: the Foreign Relations series is guided by the principles of historical objectivity and accuracy; records should not be altered or deletions made without indicating in the published text that a deletion has been made; the published record should omit no facts that were of major importance in reaching a decision; and nothing should be omitted for the purposes of concealing a defect in policy. The statute also requires that the Foreign Relations series be published not more than 30 years after the events recorded.

Structure and Scope of the Foreign Relations Series

This volume is part of a subseries of volumes of the Foreign Relations series that documents the most important issues in the foreign policy of the administration of Richard M. Nixon. The subseries will present a documentary record of major foreign policy decisions and actions of President Nixon’s administration. This volume documents U.S. general foreign economic policies and U.S. international monetary policy during President Nixon’s first administration from 1969 through 1972. Volume IV, to be published in 2002, will include documentation on U.S. policies on foreign [Page IV] assistance and international development, trade, expropriation of U.S. properties abroad, and commodities and strategic materials for the first Nixon administration.

Focus of Research and Principles of Selection for Foreign Relations, 1969-1976, Volume III

The editor of the volume sought to present documentation illuminating responsibility for major foreign policy decisions in the U.S. Government, with emphasis on the President and his advisers. The documents include memoranda and records of discussions that set forth policy issues and options and show decisions or actions taken. The emphasis is on the development of U.S. policy and on major aspects and repercussions of its execution rather than on the details of policy execution.

Compared with their ongoing preoccupation with international political and strategic policy, President Nixon and his Assistant for National Security Affairs, Henry Kissinger, did not express much interest in foreign economic matters. They nonetheless understood that domestic and foreign economic developments could have profound effects on their political programs and goals. In particular, the Nixon administration inherited a serious U.S. balance-of-payments deficit, which threatened to destabilize the international economic system. During the first term, 1969-1972, Nixon administration officials undertook an intensive re-evaluation of U.S. monetary and trade policies. From this reappraisal came several foreign economic initiatives, many of which were formulated in the Department of the Treasury, to try to stop the flow of U.S. capital abroad.

The first part of this volume documents the various foreign economic options that Nixon administration officials considered in trying to alleviate the balance-of-payments problem. Some of the following proposals were stillborn, but others became Nixon administration initiatives: reduction in non-military U.S. personnel stationed overseas; efforts to get Japan and especially West Germany to offset the costs of the U.S. military presence abroad with the purchase of more U.S. military equipment; reduction in the Interest Equalization Tax; revaluation of exchange rates of countries with trade surpluses; opposition to foreign governments’ preferential trade policies; reductions in foreign aid; and reform of the international monetary system.

The second part of this volume treats the administration’s interest in reform of the international monetary system. President Nixon and his economic advisers increasingly believed that the creation of a new economic system could alleviate major U.S. fiscal problems, such as tariff inequities and declining gold reserves. One proposal called for major European nations’ acceptance of the International Monetary Fund’s plan of Special Drawing Rights (SDRs). Another called for flexible exchange rates. Nixon administration officials hoped to persuade individual countries, especially [Page V] in Europe, to devalue or revalue their currencies, abolish fund controls, and agree on common trading rules, all of which would avert a large-scale financial crisis and promote international trade. Ultimately, the collapse of the British pound and European disagreements over currency revaluation prompted President Nixon to announce his New Economic Policy in August 1971, which ended the convertibility of dollars to gold and imposed a 10 percent surcharge on imports, as well as imposing domestic wage and price controls for 90 days.

Editorial Methodology

The documents are presented chronologically according to Washington time or, in the case of conferences, in the order of individual meetings. Memoranda of conversation are placed according to the time and date of the conversation, rather than the date the memorandum was drafted.

Editorial treatment of the documents published in the Foreign Relations series follows Office style guidelines, supplemented by guidance from the General Editor and the chief technical editor. The source text is reproduced as exactly as possible, including marginalia or other notations, which are described in the footnotes. Texts are transcribed and printed according to accepted conventions for the publication of historical documents within the limitations of modern typography. A heading has been supplied by the editors for each document included in the volume. Spelling, capitalization, and punctuation are retained as found in the source text, except that obvious typographical errors are silently corrected. Other mistakes and omissions in the source text are corrected by bracketed insertions: a correction is set in italic type; an addition in roman type. Words or phrases underlined in the source text are printed in italics. Abbreviations and contractions are preserved as found in the source text, and a list of abbreviations is included in the front matter of each volume.

Bracketed insertions are also used to indicate omitted text that deals with an unrelated subject (in roman type) or that remains classified after declassification review (in italic type). The amount of material not declassified has been noted by indicating the number of lines or pages of source text that were omitted. Entire documents withheld for declassification purposes have been accounted for and are listed with headings, source notes, and number of pages not declassified in their chronological place. All brackets that appear in the source text are so identified by footnotes.

The first footnote to each document indicates the source of the document, original classification, distribution, and drafting information. This note also provides the background of important documents and policies and indicates whether the President or his major policy advisers read the document.

[Page VI]

Editorial notes and additional annotation summarize pertinent material not printed in the volume, indicate the location of additional documentary sources, provide references to important related documents printed in other volumes, describe key events, and provide summaries of and citations to public statements that supplement and elucidate the printed documents. Information derived from memoirs and other first-hand accounts has been used when appropriate to supplement or explicate the official record.

The numbers in the index refer to document numbers rather than to page numbers.

Advisory Committee on Historical Diplomatic Documentation

The Advisory Committee on Historical Diplomatic Documentation, established under the Foreign Relations statute, reviews records, advises, and makes recommendations concerning the Foreign Relations series. The Advisory Committee monitors the overall compilation and editorial process of the series and advises on all aspects of the preparation and declassification of the series. The Advisory Committee does not attempt to review the contents of individual volumes in the series, but it makes recommendations on problems that come to its attention.

The Advisory Committee has not reviewed this volume.

Presidential Recordings and Materials Preservation Act Review

Under the terms of the Presidential Recordings and Materials Preservation Act (PRMPA) of 1974 (44 USC 2111 note), the National Archives and Records Administration (NARA) has custody of the Nixon Presidential historical materials. The requirements of the PRMPA and implementing regulations govern access to the Nixon Presidential historical materials. The PRMPA and implementing public access regulations require NARA to review for additional restrictions in order to ensure the protection of the privacy rights of former Nixon White House officials, since these officials were not given the opportunity to separate their personal materials from public papers. Thus, the PRMPA and implementing public access regulations require NARA formally to notify the Nixon estate and former Nixon White House staff members that the agency is scheduling for public release Nixon White House historical materials. The Nixon estate and former White House staff members have 30 days to contest the release of Nixon historical materials in which they were a participant or are mentioned. Further, the PRMPA and implementing regulations require NARA to segregate and return to the creator of files private and personal materials. All Foreign Relations volumes that include materials from NARA’s Nixon Presidential Materials Staff are processed and released in accordance with the PRMPA.

Declassification Review

The Information Response Branch of the Office of IRM Programs and Services, Bureau of Administration, Department of State, conducted the declassification review for the State Department of the documents published in this volume. The review was conducted in accordance with the standards set forth in Executive Order 12958 on Classified National Security Information and applicable laws.

The principle guiding declassification review is to release all information, subject only to the current requirements of national security as embodied in law and regulation. Declassification decisions entailed concurrence of the appropriate geographic and functional bureaus in the Department of State, other concerned agencies of the U.S. Government, and the appropriate foreign governments regarding specific documents of those governments.

The final declassification review of this volume, which began in 1999 and was completed in 2001, resulted in the decision to withhold about .03 percent of the documentation proposed for publication; no documents were withheld in full. The editor is confident, on the basis of the research conducted in preparing this volume and as a result of the declassification review process described above, that the documentation and editorial notes presented here provide an accurate account of U.S. general foreign economic policies and U.S. monetary policy from 1969 to 1972.

Acknowledgments

The editors wish to thank officials at the Nixon Presidential Materials Project of the National Archives and Records Administration (Archives II), at College Park, Maryland. The editors also wish to acknowledge the Richard Nixon Estate for allowing access to the Nixon Presidential Recordings and the Richard Nixon Library and Birthplace for facilitating that access.

Bruce F. Duncombe collected documentation for this volume and selected and edited it, under the supervision of David S. Patterson, General Editor of the Foreign Relations series. Matthew L. Conaty provided research support in the final preparation of the volume. Rita M. Baker and Vicki E. Futscher did the copy and technical editing, and Susan C. Weetman coordinated the final declassification review. Do Mi Stauber prepared the index.