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August 17, 1974 - Ford, Kissinger
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1552754
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August 17, 1974 - Ford, Kissinger
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Memoranda of Conversations (Nixon and Ford Administrations)
Ford Administration Memoranda of Conversations
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Iran
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1974
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File scanned from the National Security Adviser's Memoranda of Conversation Collection at the Gerald R. Ford Presidential Library
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
SEGRET/NODIS/XGDS
MEMORANDUM OF CONVERSATION
PARTICIPANTS:
President Ford
Dr. Henry A. Kissinger, Secretary of State and
Assistant to the President for National Security
Affairs
Lt. General Brent Scowcroft, Deputy Assistant to
the President for National Security Affairs
DATE AND TIME:
Saturday, August 17, 1974
PLACE:
The Oval Office
Kissinger: On the energy situation, we have to find a way to break the
cartel. We can't do it without cooperation with the other consumers. It
is intolerable that countries of 40 million can blackmail 800 million people
in the industrial world.
We have to get into position carefully so we don't get out ahead and
our allies don't move in to pick up the pieces and get an economic
advantage. That was the purpose of the Washington Energy Conference.
We are getting the IEP by the end of September. It is effective only
NSC MEMO, STATE DEPT. GUIDELINES, 3/9/04
against a selective embargo and it creates a framework for communica-
tion. The Europeans probably think we should use it only passively.
MARA, DATE 3/25/04
Simon wants a confrontation with the Shah. He thinks the Saudis
would reduce prices if the Shah would go along. I doubt the Saudis
want to get out in front. Also the Saudis belong to the most feckless
and gutless of the Arabs. They have maneuvered skillfully. I think they
are trying to tell us -- they said they would have an auction -- it will
never come off. They won't tell us they can live with lower prices but
they won't fight for them. They would be jumped on by the radicals if
E.O.
they got in front.
FORD
&
GERALD
CLASSIFIED BY HENRY A. KISSINGER
BY
EXEMPT FROM GENERAL DECLASSIFICATION
SEGRET/NODIS/XGDS
SCHEDULE OF EXECUTIVE ORDER 11652
EXEMPTION CATEGORY 5 (b) (1,3)
AUTOMATICALLY DECLASSIFIED ON Imp. to det.
SEGRET/NODIS/XGDS
2.
The Shah is a tough, mean guy. But he is our real friend. He is
the only one who would stand up to the Soviet Union. We need him for
balance against India. We can't tackle him without breaking him. We
can get to him by cutting military supplies, and the French would be
delighted to replace them.
President: He didn't join the embargo.
Kissinger: Right. Simon agrees now, though. The strategy of tackling
the Shah won't work. We are now thinking of other ways. First, we have
to get the IEP going. Second, we have to use the Library Group, an
informal finance group which is meeting on 7 September to raise the
problem of oil prices and work for a coherent structure to deal with it.
Third, there is a meeting of the IMF board at the end of September, and
the UN Foreign Ministers will be here. We thought of assembling the
Finance and Foreign Ministers then and put a more daring action
program to them. It will be refused -- like the February Energy Con-
ference. France won't go along. That is okay, because in six months
they will be eager to join. If there is a crisis, we will be out in front
and can organize it. We will get some cooperation, though.
But as a precondition, we need to get our own energy program
in hand. Conservation has gone by the board. If we don't show a
shrinkage; our allies won't. There is a forty percent chance of a
Middle East blowup.
President: There is no problem getting conservation started again,
but the coal moratorium is a problem. Maybe that gives us a lever to
get conservation going again.
Kissinger: If the public focuses on the fact this is not just a coal strike
but an energy crisis.
President: We don't have to attack the workers but show it as an
illustration of the energy problems.
Kissinger: Everyone now agrees on the necessity of what we proposed
at the Washington Energy Conference.
President: The conservationists are launching an offensive and this
would give us a chance to fight against it on grounds the crisis continues.
FORD
?
SEGRET/NODIS/XGDS
GERALD
SECRET/NODIS/XGDS
3.
When the consumers get organized and we start dealing with the
producers if it worked as you wish - - what would you do?
Kissinger: We are organizing the consumers. Then we are organizing
bilateral commissions to tie their economies as closely to us as possible,
So we have leverage and the Europeans can't just move in in a crisis.
We want to tie up their capital.
When the Shah sees us organizing the consumers - - he will see, if
we don't do it in a way appearing threatening to him.
I perhaps should visit him in October, in connection with the
Soviet trip, and talk about bilateral arrangements.
President: Does he want higher prices?
Kissinger: Yes. He has limited supplies. He knows the profit is higher
on petrochemicals and that the Saudis get more from the companies in
everything.
We won't be in a position to confront the producers before the
middle of 1975. We have got to get rolling.
President: We have the Alaskan pipeline, and ERDA. I'm glad Scoop
moved.
Kissinger: We called him yesterday and he was conciliatory. You
might consider talking to him again next week. I told Dinitz he had to
help us here and that Rabin had to come in early September.
President: We have to give Scoop his amendment.
Kissinger: If you get waiver authority, that Congress would have to
veto, it's okay.
President: What he wants is his amendment. The supporters don't
understand the waiver authority.
Kissinger: The Soviet Union won't buy going in every year for legisla-
tion. They will complain about this, but will go along with it.
A Member of Congress last night said they want a compromise.
&
FORD
SBCRET/NODIS/XGDS
GERALD
SEGRET/NODIS/XGDS
4.
President: If we can pull it off and get the bill, it is the best thing we
can do.
Kissinger: Next week you will be hit with a recommendation for export
controls. I would like a chance to comment.
President: I notice the Japanese are buying heavily.
Kissinger: That is the problem. It leads to scare buying -- - - like surpluses.
Commodities are one of our big foreign policy tools.
President: Who is for it?
Kissinger: Not Butz. I think OMB and Treasury.
I will have a paper for you on Monday. I want to ensure it won't be
decided on domestic grounds alone.
President: It won't be.
FOHL
&
SEGRET/NODIS/XGDS
GERALD
&
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DECLASSIFIED
FORD
?
E.O. 12968, SEC. 3.5
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES,
BY We
NARA, DATE 13/25/04
GERALD
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