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July 27-28, 1975 - Ford, Kissinger, FRG Chancellor Helmut Schmidt, Foreign Minister Hans-Dietrich Genscher
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July 27-28, 1975 - Ford, Kissinger, FRG Chancellor Helmut Schmidt, Foreign Minister Hans-Dietrich Genscher
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Memoranda of Conversations (Nixon and Ford Administrations)
Ford Administration Memoranda of Conversations
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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
SECRET/NODIS/XGDS
MEMORANDUM OF CONVERSATION
PARTICIPANTS:
Helmut Schmidt, Chancellor, FRG
Hans-Dietrich Genscher, Deputy Chancellor and
Minister of Foreign Affairs, FRG
President Gerald 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:
Sunday, July 27, 1975
9:50 - 10:45 a.m.
PLACE:
The Chancellery
Bonn
Secretary Kissinger told stories about Adenauer. ]
Schmidt: Confidence and discretion are rare qualities.
These are special paintings. This one is by Nolde. He is not known in
your country. This other one has no artistic value, but is by the founder
of the German Social Democratic party over 100 years ago. It did not
stem from Marxism. He in fact criticized it.
[There was a discussion about the suffrage. ]
Schmidt: We had Giscard here yesterday. This is a regular thing. Every
six months our Cabinets meet.
Kissinger: What language do you use?
FURO
SEGRET/NODIS/XGDS
DECLASSIFIED
E.O. 12958, SEC. 3.5
SECRET- - XGDS (3)
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES State Deview 3/10/04
CLASSIFIED BY: HENRY A. KISSINGER
BY We
, NARA, DATE 5/24/04
SECRET/NODIS/XGDS
2
Schmidt: Giscard and I always talk in English. He has a very elegant
vocabulary. It is clear to me that in his attitudes toward the U.S. he is
different from any French leader you have met.
The President: I feel we have a good relationship. Of course I didn't really
know his predecessors.
Schmidt: He thinks highly of you and Secretary Kissinger.
[There was a discussion of Giscard and the next French elections, and Chirac. ]
The President: We had a difficult situation in Congress on this Turkish aid
matter. It's the most irresponsible matter in my 20-odd years in govern-
ment. The Speaker worked hard with me, but we lost 216 to 206.
Schmidt: [To Genscher] Will you tell the President what Demirel said about
Turkish aid?
Genscher: [Translation inaudible. ]
Schmidt: May I add a bit about the situation in Turkey? Demirel has only
a slim majority and elections are required within a year. Ecevit is consi-
dered to be associated with the Social Democratic parties in Europe. He
is making a clear threat to overthrow Demirel if there are any concessions
on Cyprus. We have tried to dissuade him from this, but without success.
So if Demirel is to come forward with concessions, he must be able to have
some success with regard to America.
Kissinger: That is exactly correct.
Schmidt: Giscard didn't understand this.
The President: We tried to explain this to over 300 people in the House,
at three breakfasts at the White House. But the Greek-Americans have a
very effective lobby in AHEPA. It was more effective in this case than
the Israeli lobby. They were intelligent; well organized and emotional.
Kissinger: And there was nothing specific on which to negotiate.
Schmidt: The facts are the Turks are behaving badly, and then there is
this dangerous Makarios. Karamanlis is afraid of Makarios.
SEGRET/NODIS/XGDS
SECRET/NODIS/XGDS
3
The President: The Greek-American community kept saying Turkey
had to make concessions prior to moving, but for the reasons you gave,
it could not be done.
Schmidt: Demirel is a serious man and you should show him you under-
stand his problems.
The President: Papandreou is a very bad influence. If the Greek situation
ever went that way, it would be bad.
Kissinger: If we could get a negotiation going, we think it would move fast.
The dispute over territory is now between 25% and 32%. The one big pro-
blem is that Makarios would have to leave. Ecevit though wants to use
Cyprus to break up the Demirel coalition.
Schmidt: Ecevit will even threaten an anti-NATO direction. In Greece
also there is a strong current against NATO.
Kissinger: My fear in Greece is the young army officers will be like in
Portgual.
Schmidt: Papandreou is a very dangerous man, but very skillful.
Kissinger: He is viciously anti-American. He has an American wife.
The President: Any new developments in Portugal?
Kissinger: Our analysis is that Carvalho gained.
Schmidt: Among the three, Costa Gomes is the most moderate. Goncalves
is an idiot. Don't write that down.
Kissinger: Antunes didn't go to the last Council meeting for fear of arrest.
Schmidt: Antunes made a bad tactical move at the last meeting by asking
for the removal of Goncalves. But the Portugal situation is still not clear.
A rightist reaction is not to be excluded after the economic unrest. Even
the brave Socialist Gomes won't be able to govern. No one there under-
stands how to govern, especially in the economy. Even the Communists
don't understand the economy and would have to rely on the outside and I
don't think the Soviet Union is eager for that.
SECRET/NODIS/XGDS
SEGRET/NODIS/XGDS
4
Kissinger: I think if we make clear we would help the moderates but not
the radicals, then we have a chance.
Schmidt: Giscard is of your thinking on Portugal -- more pessimistic
than the rest of us.
More serious is Italy. The Christian Democratic Party is worn out.
There are only two people who have a chance -- Colombo, who is weak,
and Carli, head of the Bank of Italy, who is on his way out. I think we
should get the Socialists and Social Democrats to join the Christain
Democrates or else the Communists will enter the government.
Kissinger: We are exploring getting Martini, the Socialist, to the U.S.
It is a delicate move, though. The new head of the Christian Democrats
is an ally of Moro but not strong.
Schmidt: The whole economic situation in Italy, despite the appearance
over the last year, is deteriorating. Unemployment will rise, the dif-
ferences between North and South will grow; the Communists have shown
themselves excellent administrators and have detached themselves from
Moscow to become more attractive.
If the economic situation of the world were going up, the economic situation
in Italy would be drawn up with the rest. If that doesn't happen, the economic
situation in Italy would deteriorate rapidly. But let's save the economic
situation for the broader meeting.
Giscard says what I have been saying since a year ago May. I have kept
quiet currently because I too am pessimistic. He says the greatest threat
to the West is not the Communists or the Southern flank of NATO, but the
economic ability of the West. If it were a political or military crisis, the
leaders would get together and act. Since it is economic, we leave it to
our Finance Ministers. If we leave it this way for five years, there will be
a political disaster. He thinks the Western leaders have to get together
to make a last attempt. He thinks it is a dramatic situation.
Wilson is more hesitant because he fears creating expectations.
The President: His situation is different.
Kissinger: He is already in the situation Giscard wants to prevent.
SECRET/NODIS/XGDS
SECRET/NODIS/XGDS
5
Schmidt: His inflation rate is twenty percent. The Saudis are losing their
money at twelve percent because of inflation. How long will they continue
that? The British are aware of it -- Callaghan is more afraid than Wilson.
The President: Wilson may be afraid of a meeting to expose what the
situation is and raise expectations.
Schmidt: Wilson would come, but he is not enthusiastic. This is one topic
for the Quadripartite lunch at Helsinki.
Let me speak a few frank words. The leadership here should be by the
United States. Your strong leadership is needed, without appearing to do so.
The President: That is difficult. What would you recommend?
Schmidt: The British will have unemployment it will soon be six percent.
In France, it is also too high. Ours is too high, slightly over one million,
and by February it could go to 1.5. Don't take this down. We are an export
economy. Our exports to the U.S. have fallen to less than 50 percent over
the last year. Our industrial activity is down to 65 percent of capacity.
It is the same with France.
The President: Ours is about 75 percent.
Schmidt: My obsession is with the fact that the economic leaders in the
U.S. - Simon, Greenspan, and regretably even Burns - look too much to
domestic problems and not to world effects. For example, New York City
banks are 3 percent higher, so people sell German bonds back in order to
get the higher New York rates. Also the dollar is rising so people seek pro-
fit by switching from marks and francs into dollars. So floating currencies
-- of which I was a great advocate when the rate is so volatile, could
destroy the Western economies.
The President: I read a piece by Laffer, who is opposed to the float. But
the Ame rican consensus in the United States is to float.
Kissinger: But five years ago they were all for rigid rates. The Chancellor's
point is that the uncertainties of fluctuating rates could undermine political
stability.
Schmidt: In all of Europe, the boards of the big industrial companies are
so skeptical they do not invest, so employment stays low. My program to
SECRET/NODIS/XGDS
SEGRET/NODIS/XGDS
6
create domestic demand -- we lowered taxes, made money cheap, we
gave investment credit, we held back wage requests by persuasion --
didn't work because foreign demand for goods dropped badly. Domestic
demand reacted well, but about two-thirds of the total demand is foreign,
so that is the critical aspect. Also, many of the consumers saved rather
than investing. Savings are the highest since Kreisler.
The President: The same with us. Heavy investment goods aren't selling.
Housing.
Kissinger: What is your solution?
Schmidt: There is another negotiation coming. If OPEC announces a ten
percent price hike -- the Shah wants 30 percent the increase will add to
this pessimism. In order to get things under control, we first must show
that we wantno confrontation with OPEC but we will cooperate to work
things out. Second, if we could tell the world we see the dangers eye to
eye and will concert our actions to meet it even if we don't actually do it.
Kissinger: We will be under domestic pressure for a confrontation with
OPEC. Would you explain this to the President and also the need to concert?
Schmidt: We would react negatively in Europe to a confrontation with OPEC.
If oil prices go up, it eventually benefits the U.S. and the Soviet Union, who
are rich in raw materials. But there is no chance for Europe, who could not
stand a confrontation. They need stable prices and assured supply.
If there is any different outlook on oil in Europe, it is in Great Britain, which
will soon have its own supply. The Europeans want to come to terms with
the energy suppliers.
The President: Is there a negotiating area with respect to price and supply?
Schmidt: Yes, but we can't join a policy of confrontation. It would SO
raise unemployment as to be disastrous.
The President: My immediate reaction is favorable to a meeting. Simon
is a hard liner. My tendency is to work closely -- on the economic side
the perception of us working closely would help us with the producers and
the Soviets.
Kissinger: But we should pr epare carefully so there are results.
SECRET/NODIS/XGDS
SEGRET/NODIS/XGDS
7
Schmidt: We have confidence in Shultz. Simon and Greenspan are domesti-
cally oriented.
Kissinger: But Shultz is difficult to use in a governmental body. Could we
use a private group.
Schmidt: I agree that a meeting should be carefully prepared. Heads of
government are not equipped to discuss such matters without preparation.
The President: I have full confidence in Shultz, but we couldn't, we use him
officially. He has the confidence of the Congress also.
Schmidt: If an economic conference should take place this year, we shouldn't
expect too many results. If we could create the impression we intend to
work together and coordinate our policies, that will be enough. It should be
done before the real winter comes.
The President: What do you think OPEC will do?
Schmidt: The Saudis will try to retard any such step until the end of the year.
Not so with the Shah and Algeria. Of Perez I am not sure -- he is annoyed
with the United States.
Kissinger: Mostly for domestic reasons.
Schmidt: We are having a study completed now. I think there are differences
opening up among the OPEC countries.
Kissinger: If we stick together.
Schmidt: Yes.
Kissinger: We have looked at commodity agreements to see how we could
split up the producers.
Schmidt: I think we could separate the poor, non-oil countries from OPEC.
Kissinger: And some non-oil commodity countries. Right now they are
all tied up together.
Schmidt: What is the situation in Japan?
SEGRET/NODIS/XGDS
SEGRET/NODIS/XGDS
8
The President: We have a meeting with Miki the day we get back. I had
a good trip there last fall. I think it was a good trip and it reassured
them. Economically, I think they are better off than Europe. They have
oil agreements with China. I think they are better off now than a year ago.
Kissinger: The collapse of Indochina has had a more profound effect in
Japan than anywhere else.
Schmidt: In what direction?
Kissinger: In a more self-assertive way to separate from the U.S. For
the first time they have asked to discuss defense matters at the Prime
Minister level.
The President: Yes. With Tanaka, we didn't discuss defense.
[The party then joined the plenary meeting.
Schmidt: Let me welcome you again in this broader session. We agreed
to discuss economic and financial matters, reserving the others for tonight
on the boat. Would you begin, Mr. President?
The President: Thank you very much. We are delighted to be here. Let
me outline our domestic economic situation. Last fall at the economic sum-
mit conference in Washington there was a consensus that the real problem
was 12-14 percent inflation. Not one economist recognized the coming
precipitous rise in unemployment. People last winter stopped buying high-
value investment items and began to save. The result is high unemployment
and recession. We have had very high inventory liquidation -- almost at an -
alarming rate. The past two months, things have been encouraging. In-
flation is down to about five-six percent. Unemployment is about nine
percent, but there are encouraging developments. New unemployment
is at 400, 000 when three months ago it was 600, 000. We estimate the
unemployment rate by year end will be eight percent and by mid-1976 at
7.5-7 percent. GNP was bad the first quarter, somewhat better the second
quarter, and four-five percent the third quarter and seven percent in the
fourth quarter.
Some economists think it would go to nine percent. We have some fiscal
problems. Our deficit is now about $60 billion. Congressional pressure
may force it to around $70 billion. Next year's forecast depends partly
SECPET/NODIS/XGDS
SECRET/NODIS/XGDS
9
on whether there is a tax reduction. If there is, it would be $35-40
billion; with a continuation of the tax credit, it would add $15-20 billion.
We are encouraged by the signs in home building. By year end, the rate
could be one/one-half million, up from 700, 000.
Automobiles have been bad, The savings rate is the highest it has been
in years. The consumer confidence factor has improved recently. Of
the tax rebate, only $2 of the $10 billion has yet been spent, so that is
potential spending. Our balance of trade is encouraging, although that
doesn't help in the world economy
Schmidt: That discourages us.
The President: Interest rates are declining. The supply of money is
above the rates the Federal Reserve Bank has projected: 11-12 percent
as compared to seven-eight percent. We think inflation will be around
five-six percent and unemployment seven-eight percent. That is my
general appraisal.
Schmidt: Thank you. I would like Friderichs to give us a brief review.
Minister Friderichs: Our real GNP for the first quarter is from 3.5 to
4 percent. The price increase was about 4-5 percent; however, it was
above five percent seasonally adjusted. Capacity utilization was below
70 percent - - the worst in heavy industry. Domestic demand has been
stabilized by domestic programs. The main difficult is in exporting. We
export 23 percent of our GNP and exports are down in real terms by 16
percent. New demands are down 22 percent. This in net is our economic
situation.
Exports to the U.S. are important to us. In energy policy we have exchanged
views. For this winter, our consumption has declined and stocks are high.
We must assume there will be oil price increases, probably from $1 to $1.50
a barrel. The key countries to watch are Algeria and Venezuela. We are
worried about the winter of 1976-77 because if the economic situation in
industrial countries improves, oil demand will rise. For other commodities,
discussions have been held. We expect some raw material agreements.
We are thinking for a new device using IMF gold to stablize prices.
Schmidt: Pohl would sketch out our financial situation.
SECRET/NODIS/XGDS
SEGRET/NODIS/XGDS
10
Pohl: We are facing our biggest budget deficit - - about 60 billion DM.
This results from a tax cut and increased expenses. We have no trouble
financing it because the private sector hesitates to invest and savings
are up.
In the IMF negotiations, I think we are close to compromise. I think an
agreement on increase in guarantees is possible by the end of August and
also an agreement on gold transactions. On this we are closer to France
and the European position is generally unified. On the use of IMF gold,
we are closer to an agreement.
The exchange rate system issue is still open, with basic dispute between
the U.S. and Europe. The differences are not bridgeable right now. We
are pleased that the dollar ratehas gone up. Your interest rates are higher
than ours and that worries us.
Schmidt: Thank you. Let me add a few words from the European, not
German, viewpoint. It is in the interest of Europe that you make the
Federal Reserve Board realize their interest rate policy is not just a
domestic concern. Your high rates bring up the price of the dollar which
is good, but it disrupts our capital markets. I think France will not try
to block the results of the IMF.
The future regime of world exchange rates, after the collapse of the
Bretton Woods system, won't be solved at the IMF meeting, but I think
it is not insoluble. Since the U.S. is the strongest country monetarily
tradewise we are about even it must overcome its domestically oriented
mind. We need a fixed but adjustable rate system. In the meantime we
should bring about a common management of the float to avoid these
devastating fluctuations. For smaller companies, it is difficult to deal in
dollars when you don't know whether there will be a ten percent change
within six months. In the Bretton Woods system, all currencies were
pegged to dollars and all transfers were in gold. You stopped that in 1971,
and we understand that. If you won't transfer gold you have to participate
in manageing the rates so they are predictable over the longer period.
This inflation and oil and commodity prices are the real problems of the
world economy.
The political effects of the recession -- really a depression -- threaten
political stability in several countries -- Italy, where the Christian Demo-
crats may accept the Communists in government. France also, where
there is always a potential for domestic upheaval. The British problem
SEC/NODIS/XGDS
SECRET/NODIS/XGDS
11
is not social unrest, but strikes and paralysis. Here also, the problem
is not upheaval, but bad election results. I don't know about Japan.
The economic problems are a greater threat to the West than the Soviet
Union, the Middle East, or Southern Mediterranean problems. Giscard
and I both feel that the strongest country -- the U.S. -- must take the
lead. It is a dramatic situation.
The President: I concur that we must integrate our economic thinking
and actions, both because of the domestic political situation in Europe
and also in the United States. We have gone through a traumatic economic
situation over the past year. The American people have gone through it
with patience and stability. Compared to the 1930's, it is quite surprising.
We are anxious for economic and political reasons for economic improve-
ment. We have an election next year and want to enhance the economic
improvement in the months ahead. I think we can make progress in
concerting our policies.
Schmidt: We can continue at lunch. We are relieved at your statement
about cooperation. We are at your disposal any day or night. I look
forward to the Quadripartite meeting in Helsinki, where we can discuss
how to bring about this cooperation. Our private entrepreneurs - - more
in Europe than in the United States, because you were the first into a
depression and now, properly, the first to come out - - need this sense of
cooperation in order to give confidence.
[The meeting ended. ]
SECRET/NODIS/XGDS
SECRET/NODIS
DEPARTMENT OF STATE
Memorandum of Conversation
TIME: 11:15 a.m.
DATE: July 27, 1975
PLACE: Schmidt's Con-
ference Room, Federal
SUBJECT:
(This followed a more restricted
Chancellery - Bonn
meeting in which only the President,
the Secretary and General Scowcroft participated.)
PARTICIPANTS: German
Chancellor Helmut Schmidt
Foreign Minister Hans-Dietrich Genscher
Economics Minister Dr. Hans Friderichs
State Secretary Dr. Walter Gehlhoff, Foreign Office
State Secretary Karl Otto Poehl, Finance Ministry
Political Director Guenther van Well, Foreign Office
Ambassador Berndt von Staden
State Secretary Dr. Manfred Schueler, Federal Chancellery
Dr. Carl-Werner Sanne, Federal Chancellery
and several others
American
The President
The Secretary
Ambassador Hillenbrand
General Scowcroft
State Dept. Guidelines State liview 3/10/04
Counselor Sonnenfeldt
Assistant Secretary Hartman
DECLASSIFIED
E.O. 12958, Sec. 3.5
NARA, Date 5/24/04
President: I welcome this discussion of the economic
situation and in fact I would like to tell you in a little
bit more detail where our economy stands. In September of
last year, we had a series of economic summits. The con-
sensus was that the real problem was the 10-12 percent
inflation rate. But now looking back on it, I can say
that there was insufficient recognition of the tremendous
problem that recession and unemployment could cause for
us in the coming years. During this time, we have seen
savings rise, buying stop and the early inventory accumu-
lation has in fact been drawn down. Therefore, production
has been cut and there has been a significant rise in
SECRET/NODIS
EUR: AAHartman
GDS
(Drafting Office and Officer)
FORM
DS- 1254
2 65
M
SECRET/NODIS
-2-
unemployment. Last September, it was at a rate of about
5 percent; it is now up to 9 percent which is the highest
since our Great Depression. In the last six months
there has been a significant drop in inventory; in
fact this has been the highest drop in history. The
decline in production levels has been alarming.
In the last two months, however, we have seen some
encouraging signs. Our rate of inflation is now running
at about 5-6 percent. Lately, the wholesale price index
looks as though it is leveling off.
While unemployment is at 9 percent, the latest figures
show that there is an increase in the overall number of
jobs and that, therefore, much of the unemployment is among
new workers entering the employment market for the first
time. It is now running at about 400,000, down from 600,000
people. There are more people currently being employed--
some 400,000. The forecast is that by the end of 1975
unemployment will be down to 8 percent and by mid-1976 it
it will be somewhere between 7 and 7 1/2 percent. This
is still too high, but the direction is good.
In terms of our growth, it is now something like 3 1/4
percent; it soon will be up between 4 and 5 percent.
Next year we hope GNP will grow by 7 percent, and it could
get as high as 9 percent.
We do have a tremendous fiscal problem. We are now running
a deficit of close to $60 billion. That is roughly 2 per-
cent of GNP, but there is pressure by the Congress and
some economists to force that up to close to $70 billion.
We do not want to allow our deficit to get that high.
Part of our forecast depends on what Congress does about
tax reductions and whether they extend last year's tax
reduction. We are estimating next year's deficit at
$30 billion and, if the tax reductions are extended, that
could add another $12 billion.
On the favorable side, housing starts and home building
have gone up. We have now worked off the inventory of
houses. New starts will be up by the end of 1975, perhaps
SECRET/NODIS
SECRET/NODIS
-3-
as high as 1.5 million. Before this had gone down to
some 700,000. The auto area has been disappointing
this year, but for the first time now purchases are
moving up. In fact, all manufacturers' employment is
higher now. The savings rate is the highest ever, and
we hope that, with confidence building up, there will
be additional spending. Tax rebates of some $10 billion
have mostly been saved; only about $2 billion has been
spent. The rest went for reduction of debt or savings.
And then, as you can see, our trade figures are much
better. Interest rates have shown a downward trend,
although the Federal Reserve System has forced them up
somewhat. Money supply has risen between 10 and 12
percent. The Fed would like to keep that growth between
5 and 7 percent in order to control inflation. To sum
up, we are going to try to hold our inflation between
5 and 6 percent; unemployment, between 7 and 8 percent.
And we think there are encouraging signs that we are
moving in that direction.
Schmidt: I would like to ask Mr. Friderichs to comment
on our situation.
Friderichs: We are looking for a growth in our GNP of
3.5 to 4 percent. Our inflation rate is now down to about
6 percent versus a higher figure in the first six months
of the year. Unemployment is at about 4.5 percent. In
June, capacity was below 70 percent as far as utilization
is concerned, but it was worse in basic industries.
Demand seems to be stable, and there is some possibility
that it can be expansionary when you take into account
our foreign dealings. Federal expenses are up 8 percent.
Our income in the federal budget is down 3 percent.
Exports are down in real terms--some 16 percent. Imports
are down 22 percent. Exports to the United States are
very important for us.
We also have problems with our energy policy, and we have
been exchanging views on this. We have no problem in
voluntarily limiting our consumption; that certainly has
been going down. We feel that another price increase on
oil will come, and this will be anywhere from a $1 to
$1.50. The key here is in Algeria and in Venezuela where
they take a very tough position. I plan to go to Iran to
SECRET/NODIS
SECRET/NODIS
-4-
see whether they really mean it when they talk about
larger price increases. We are very worried about the
winter of 1976-77. If our economy turns up, we will
be needing more energy, not less. There is also a raw
material price problem throughout the world. We have
discussed this in the OECD and in Washington. We do
not expect that raw materials producers will help very
much. We don't like the idea of fixing prices. We don't
like the idea of transferring wealth. But we do not
exclude certain types of agreements which might help to
produce export stabilization. We also like the idea of
using IMF gold.
Schmidt: I would now like to ask State Secretary Poehl
to comment on the monetary and budget problems.
Poehl: We have been in a deep recession, and we now
have our biggest budget deficit of some DM60 billion. This
has been caused mainly by a tax cut and an expansion of
expenditures. We have deficit financing by savings and
private sector borrowing is down. On the monetary side,
we look forward to negotiation in the IMF in August and
September. We think that we are close to a compromise
and it is possible to reach agreement. The agreement perhaps
would not cover all aspects of our relations, but if we
could reach agreement on a quota increase in the IMF and
some agreement that central banks could exchange gold,
that would be a singificant step forward. There seem to
be some difficulties with Arthur Burns on this, but we
are reaching a common European position that we think
should be accepted by the United States. The third area
is on IMF gold. They have about $6.5 billion worth of
gold which, at today's values, would be almost $25 billion.
We have already reached some agreement in Paris on the use
of this gold, and we think it would be important for
the IMF to finance some of the LDC needs with revalued
gold stocks. This would then help the most seriously
affected (MSA) countries. They need about $30 billion
to help them.
On the exchange rate system, however, I don't think we
can reach agreement. There is too much of a difference
between France and the United States. This is not
SECRET/NODIS
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-5-
bridgeable at this time and, therefore, I would exclude
that as one of the areas on which we could reach agree-
ment in the fall. But we do need closer cooperation.
We have been quite satisfied that the dollar has moved
up but we are not sure that this can last. The trade
balance is improving; your interest rates are up above
our own FRG rates. This may be good in terms of foreign
effect, but it is hard on our domestic policy. There
arelimits as far as stimulation is concerned.
Schmidt: I would like to add a point. Earlier you
mentioned the liaison you have with the Federal Reserve
System. It is in the interest of all of us for you to
use this influence that you have on the Federal Reserve
decisions to make interest rate policy in the United
States more responsive to worldwide interests. We now
have a lot of short-term capital which is going to the
United States /because of your high interest rates/.
While this is good in terms of strengthening your
exchange rate, it hurts our markets. We need to harmonize
these policies. I have had a confidential talk with
President Giscard and he believes that we need to have
some system for harmonizing our policies. If we can
find this method, he certainly will not block results.
It seems to me that we cannot now reach agreement on a
future exchange rate regime. After Bretton Woods we have
not agreed on what the future system should be, and per-
haps that is not soluble at this time. But I ask you to
understand that there is great anxiety in Europe over
the US financing which has led to a strengthening of
your interest rates. Europe fears that American authori-
ties will be too domestically oriented in making their
policies. If we can succeed in arriving at a system of
fixed but adjustable exchange rates, then perhaps we can
agree that that is the ultimate goal and in the meantime
agree on some form of common management for our present
floating-rate system which would prevent devasting move-
ments in the rate. Otherwise, we risk to deal in dollars,
and those dollars can change value very quickly and affect
world business confidence. It is necessary for the United
States to play a more active role. For 25 years you have
not intervened to support the rate of your currency. The
US must be much more active. We are not asking that you
SECRET/NODIS
SECRET/NODIS
-6-
support a fixed rate but that you help to manage the
rates in order to keep them stable. That is why we
would like to have adjustments and not just fixed rates.
But we urge you in the future to participate more in float
management so that it can be more a source of stability.
We are not asking that you intervene in gold but that
the intervention take place in foreign currencies. The
Fed must buy and sell dollars.
Giscard is right about the bad effects of uncertainty,
particularly for smaller countries. This plus inflation
and the oil and commodity price problem has led to serious
political effects, and we face even great political
instability. Look at Italy where the Christian Democrats
are being weakened in favor of the Communists. In France,
too, there is the potential for domestic upheaval. In
Britain, you have strikes and political problems. Even
in Germany there is a potential danger. Not so much of
social unrest but it certainly could be bad for the SPD
and, as you know, we have elections in October of 1976.
On Japan, you probably know more about them than I do
but I'm sure the situation is equally serious there. I
think we should pay great heed to the words of Giscard
when he says that the economic situation is a greater
danger to Western cohesion than the Soviets are today
or even the Middle East or Portugal. I have spoken to
Giscard, and I stress that what I am saying today is
spoken on his behalf as well. The US is the strongest
country in the world and, therefore, it must act and
not appear to be or in actuality be unconcerned. It is
necessary to have a common effort.
President: I wholly concur with everything you have said.
I believe strongly that there should be integrated eco-
nomic thinking and actions. It is impossible for us to
ignore the domestic political situation in Western Europe
and also in the United States. It would be traumatic if
we are not able to deal with our economic problems.
Despite inflation and unemployment, we must have stable
political policies. The United States is reasonably
stable and therefore we can be helpful. Our situation
SECRET/NODIS
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-7-
now is better than the 1930's and this ought to help
us resolve the problem. There is a narrow line, how-
ever, between encouraging inflation and mitigating
recession and unemployment, but I can assure you that
we want to see our economy improve. After all, we have
elections too in 1976, and we know that in election times
people like to run on peace and prosperity. We will do
all that we can to enhance improvement, and we will be
glad to work withyyou. We think we can come forward
with integrated economic policies, and these will be
beneficial in avoiding political problems. We are
particularly anxious to work with you on energy policies.
Schmidt: We are relieved to hear your statement on
cooperation. We are at your disposal. Our experts can
fly to Washington or you can send experts here. We do
look forward to the discussions in Helsinki with Giscard
on how to bring about economic cooperation. You are
getting out of the recession. The private sector needs
confidence, and we can get it by showing our cooperative
spirit.
President: Good. The US is willing to have discussions
at any level, and we are certainly well aware of the
confidence factor.
/σₙ the lawn, the President and the Chancellor made state-
ments supporting cooperation in managing domestic economic
policies?
Schmidt's Toast (following lunch)
Schmidt: Mr. President, we welcome the close bonds between
the Federal Republic and the United States and between
Europe and the United States. These are of the greatest
importance for us and Europe as a whole. In our one-
day talks here, we can only pick a few subjects and we
have talked about the economy. We will talk about it
again in our Four Power meeting in Helsinki. We are
satisfied with the closer ties with France. It is a
nightmare for any German Government to be aware of the
SECRET/NODIS
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-8-
necessity to have solid ties and cooperation with the
United States and, on the other hand, the necessity
of having close relations with France. We do not want
to choose between the two demands. There have been
rather curious difficulties with France in the past
but this now seems to be part of history. From a
European point of view we are thankful that these
arguments are not with us today. We think that a
Four Power meeting is good. It cannot solve all the
problems, but it is a psychological necessity. It can
lead naturally to greater and closer cooperation. This
we can try to make stronger. I think that the new weight
and force of Giscard should help us in the joint economic
management of our economies. We were reluctant at first
but we think that this can serve two purposes: first, it
can build confidence in our business if they can see us
cooperating; second, closer contact can achieve greater
and more positive results in our economy. We also need
a bigger group where Japan can participate and we are
willing to be included and to be helpful. Secretary
Kissinger has been quoted as saying that things are getting
more unmanageable. He should not say this publicly, but
he is right. It is high time to preserve our society and
our political stability in Italy as well as elsewhere,
and the only way to do this is to work together. I would
like to raise my glass to you, Mr. President, and to
our cooperation.
President: I want to reiterate how grateful I am for the
reception that you have accorded Mrs. Ford and myself.
It illustrates the deep friendship which we appreciate
very much. The most outstanding part of our discussions
has been in the economic area both here and in Brussels
and earlier in Washington. I recall vividly our meetings
and our discussions of the economic issues. Your visit
to Washington occurred at an opportune time when we were
going through a transition in our thinking from a concen-
tration on inflation to one of recession and unemployment.
And I think that the suggestions that you made--many of
them--were incorporated into our plans that we submitted
to the Congress in January. In implementing these plans,
it has been helpful to have consultations with you.
SECRET/NODIS
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-9-
We are now recovering from our recession and moving
toward stronger economic activity. We thank you very
much for your advice.
You are right in saying that US-French relations are
better. We recall our discussions on how we might
improve those relations. Then, in Martinique, we laid
a foundation for better relations with France. We see
no reason why a continuation of this trend is not
possible. Again, I thank you for your suggestions and
help.
These discussions are necessary for the future. I pledge
to you that we will exchange information and that we will
work with others together in this effort. We should
work together in the energy field, in the finance field
and in the defense field. As far as our energy program
is concerned, we cannot proceed only for ourselves. Our
future is tied with yours and we look to our cooperative
efforts in the International Energy Agency and elsewhere
to work with you.
In the national security area, we believe that NATO
should be strengthened, and we will work to that end
in Brussels. It is natural for Europe, the United States
and Canada to coordinate their efforts and work closely
to that effect. I come here as I first indicated with
a close identity of purpose, and I think our discussions
have gotten off on the right foot.
I therefore would like to propose a toast to the
Chancellor and German-American friendship.
/Later in Helsinki, Chancellor Schmidt gave us a
memorandum which is attached on "International
Concertation of Economic Action. "7
SECRET/NODIS
Private Memorandum
on International Concertation of Economic Action
by Helmut Schmidt
After the high-level talks on the world economic situation,
which has led to a tangible improvement in the climate, what
is important for us now is to agree on concrete steps to
stabilize the world economic situation. Otherwise I believe
there is a danger of a set-back in international public
opinion.
1. Our most pressing task is to reactivate private invest-
ment and to get back to a satisfactory rate of growth.
The Federal Republic of Germany and France have therefore
agreed at the end of August to put into effect new
conjunctural programs, based chiefly on public investments,
B.O. 12958, Sec. 3.5
By 5/24/04 3/10/04
to stimulate domestic demand. Denmark will follow suit.
Dept. Guidelines state feview
It can be assumed that this course will also be adopted
by the Benelux countries. The British program steers in
DECLASSIFIED
NARA, Date
the same direction: Its primary aim is to curb wage costs
and inflation-rates, since economic growth in Great Britain
State
has suffered primarily from wage cost inflation. The US
Government should examine whether the upswing in the USA
is already so secure that no further fiscal measures are
necessary.
2.
In order to encourage firms to invest, I reel it is necessary
to continue the cheaper money policy.
However, the German Federal Bank is here increasingly coming
up against limits set by the monetary policy of the Federal
Reserve Board. The Federal Reserve Board has in recent weeks
returned to a tighter money policy which in the United States
has already led to a rise in interest-rates. This means for
the German Federal Bank that it is not only psychologically
but in particular also in practice very difficult to stick
to its low interest-rate policy, which is essential to reactivate
our economy, because the manifestly higher interest-rates in
the United States exercise axpull on our money and bond markets.
Other European countries, too, feel unable to make money still
cheaper.
The Federal Reserve Board should not gear its money supply
and interest-rate policies solely to American domestic con-
siderations, but should also take more account of the
international repercussions of its policy.
I suggest that the Directors of our central banks should,
if possible by the end of August, agree on a co-ordinated
policy to lower interest-rates. Concerted action in the field
of interest-rate policy would not prejudice the strengthening
of the dollar rate, which we welcome.
FORD
3.
In the preser situation it is psycholoc cally important,
if the economic situation is to improve, for
the Annual Assembly of the IMF to produce concrete results
in a range of monetary policy questions. Only in this way can it
be demonstrated that the present world monetary system is
also viable in times of economic crisis.
I do not, however, believe that the United States and France
will reach agreement quickly on a future exchange-rate system.
We should therefore not attempt to find a solution to this
problem at the IMF Annual Assembly. Nevertheless, the settle-
ment of this question is of vital importance for the world
economy and for world affairs in general, SO that we should
put this down as an item for discussion at the planned economic
summit conference.
It should not be difficult, on the other hand, to reach agree-
ment on the increase in IMF quotas and also, in this connection,
on the fixing of new quotas. The United States could agree
without risk to reducing its quota to under 20 %, as its
blocking minority is not to be affected.
As far as the question of gold transactions among the central
banks is concerned, I see only minor differences of opinion.
In Europe no one is thinking of a return to the gold standard
or of the re-introduction of an official gold price. The United
States could therefore be satisfied with a global limit
on gold transactions.
As regards the utilization of IMF gold there are no longer
any fundamental divergences of view. The Federal Republic
believes in principle that the utilization of the IMF gold
on the basis of a division into three equal parts would be
the right course, but it would also agree to a different basis
for allocating it.
4.
Before the end of this year a summit conference should be
convened to discuss questions of the world economy and the
world monetary system. As I see it, the participants would
be the United States, Great Britain, France, Japan, the Federal
Republic, and possibly also Italy.
The Conference should be prepared by the personal representatives
of the heads of State and Government.
I suggest that at the luncheon of the Four in Helsinki the pro-
posal of Giscard d'Estaing to convene a summit conference be
adopted.
5.
The Paris meeting to prepare the conference on oil and raw
materials questions should be resumed at the beginning of
October. The invitations to this meeting should be sent out
by the end of August, that is, before the OPEC meeting.
5
The Federal Republic supports the proposal to set up, in
addition to the three commissions suggested by Secretary
of State Kissinger on energy, raw materials and development
questions, a fourth commission to deal with financial
questions related to the subjects discussed in the other
three commissions. I consider that this fourth commission
could deal, for example, with the repercussions of the
OPEC price policy on the monetary system, the money and
capital markets and the balance-of-payments situation of
the industrialized and developing countries. In recent
months these problems have receded into the background as
a result of the recession. When the world economy picks
up, they will again become more acute.
The inclusion of these topics in the dialogue seems to me
the right way to ensure that the OPEC countries assume a
greater share of the responsibility for the stabilization
of world economic relations.
6.
In general we attach great importance to a co-operative
approach to the oil-producing and the developing countries.
Any aggravation of the conflict leads in the industrialized
countries dependent on the world market to deepening
pessimism and recession. At the end of August my Government
will transmit to you a general concept based on both
careful analysis and on systematic discussions with the
most important oil-producing and developing countries.
FOR IMMEDIATE RELEASE
JULY 27, 1975
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
(Bonn, Germany)
THE WHITE HOUSE
REMARKS OF THE PRESIDENT
FOLLOWING HIS MEETING
WITH CHANCELLOR SCHMIDT
THE PALAIS SCHAUMBURG
12:10 P.M. (Bonn Time)
Mr. Chancellor, ladies and gentlemen:
Let me express on behalf of Mrs. Ford and
myself our great gratitude for the warm reception that
we have received from you and Mrs. Schmidt and from the
German people.
It is a great privilege and pleasure for
Mrs. Ford and myself, as well as my colleagues, to be
in Germany, and I have appreciated very greatly the
opportunity to meet with you this morning and to discuss
with you and your associates the problems that you
mentioned: the general political situation and the
economic circumstances, both in Europe as well as in the
United States.
Let me say with great emphasis that all of
us in the United States are deeply grateful for the
wonderful contribution that people from your country
have made in the history books of my country, and I
should say that all of us, as we approach our Bicentennial
in the United States, are most appreciative of the very
generous gift given to the United States when President
Scheel was in my country a few weeks ago.
The importance of discussions on the economic
field, of course, are very, very vital. We in the
United States are making a turn toward a healthier
economy. We. have bottomed out, as they say in the
United States, and are slowly beginning an upturn in
our economy.
We fully recognize that the economy of the
United States is an integral part of the economy through-
out the world, and particularly that of Western Europe.
It is my intention, on behalf of the United States, to
work very, very closely with you in Germany and the other
European countries to make sure that the progress we
are making is also progress that can come in Europe,
as well as the rest of the world.
MORE
Page 2
We, of course, are on our way to the meeting
in Helsinki, where 35 nations will get together on the
CSCE arrangements or agreements.
I believe that the Helsinki meeting can and
will be a further step in achieving what we all want-
the betterment of relations between East and West.
I am optimistic that the results achieved in
Helsinki will be for the better. I look forward to
my participation as a result of the long negotiations
that have taken place.
Let me conclude my observations by saying
that in the field of energy, in the economic field, in
the political field, in the defense field, the policies
of the United States will be closely aligned with those
of your Government, Mr. Chancellor, and I look forward
to the further discussions that I will have with you
here, as well as in Helsinki, so that your country and
mine and the rest of the world will be the beneficiaries.
Thank you very, very much.
END
(AT 12:15 P.M. BONN TIME)
JULY 27. 1975
Office of the White House Press Secretary
(Bonn, Germany)
NOTICE TO THE PR SSS
The following is a statement by the Federal Chancellor Helmut Schmidt
on Sunday, July 27, 1975, following his talk with the President of the
United States. (Transcribed and translated by the U. S.I.S.)
Ladies and Gentlemen, 1 would like to repeat here how extremely thankful
the German Federal Government is--and I believe that one can say the same
for all our citizens-that the American President and the American
Secretary of State are visiting us here on their way to Helsinki and to other
European capitals. The visit is not yet over, and for that reason I can only
report at the moment on our talks up to this point.
The two Chiefs of Government and the two Foreign Ministers spoke this
morning about political problems of a general nature, which will also be
discussed in Holsinki. Then in a somewhat larger group, in which, on
the German side, the Federal Minister for Economics took part, we turned
to problems of the world economy. We are convinced of the necessity of
cooperation in the areas of economic policy, credit policy, and currency
policy. since we are aware that the entire western world's economy has
come into severe difficulties as a result of the current recession.
The American President la somewhat more optimistic regarding the
development of the American political economy than he was when we
last had the opportunity to speak with each other. But I assume that
he will tell you that himself.
###
MEMORANDUM
Ed 4
THE WHITE HOUSE
WASHINGTON
DECLASSIFIED
SECRET/NODIS/XGDS
E.O. 12958 (as amended) SEC 3.3
MR # 09-118, #5
state rev. 3/10/04; C.A etr 10/22/09
By dal NARA, Date 12/3/09
MEMORANDUM OF CONVERSATION
PARTICIPANTS:
Helmut Schmidt, Chancellor of the Federal
Republic of Germany
Hans-Dietrich Genscher, Deputy Chancellor and
Minister of Foreign Affairs
President Gerald R. 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 Seurity Affairs
DATE AND TIME:
Monday, July 28, 1975
8:35 - 9:05 a. m. [Breakfast]
PLACE:
Schloss Gymnich
Bonn, Germany
SUBJECTS:
Portugal; Energy; MBFR
The President: Are there any new reports on Portugal?
Secretary Kissinger: No. Except for a clash between the Communists
and Socialists.
Chancellor Schmidt: It's good they clashed in the open so that they
[the Socialists] can't be pushed aside. Soares is a courageous man. If
only he were as wise as he is courageous. His party has enormous
good will and lack of organization.
The President: How can we be helpful? We think it is very serious.
Chancellor Schmidt: You could prevent open Soviet interferences. Thus
far they seem to be avoiding that. The various Communist parties are
working for their own versions of the Portuguese Communists.
SECRET- XGDS (3)
SECRET/NODIS/XGDS
CLASSIFIED BY: HENRY A. KISSINGER
SECRET/NODIS/XGDS
2
The President: How do you analyze the Azores?
Chancellor Schmidt: We hope to hear from you on that - - your
intelligence is better.
The President: There's a group seeking separation of the Azores from
Portugal.
Chancellor Schmidt: I hear they are being organized by the CIA.
[Laughter]
Secretary Kissinger: Not yet.
The President: What would the European reaction be to Azorean
independence?
Chancellor Schmidt: In the East they would say it is due to Soviet
interference. The West would not accept it but would say that things
have to get worse first.
Here is my note on my conversation with Giscard. Giscard
and I wanted to propose to you that we make it understood the OPEC
discussion be kept in the Foreign Ministries and not be scattered among
the different ministries. After this, Giscard has a point in proposing
a fourth commission, because whether it is oil and investment stemming
from that or commodities and stabilization funds, economic aid, it all
comes down to financial questions. It is better to deal with them in
one committee rather than scattering them among the other three
committees.
Secretary Kissinger: There are two problems. Simon won't like it.
The other is that France continues maneuvering. We worked out a position
earlier and they gave half of it up as soon as they met with the Saudis.
Chancellor Schmidt: When did this happen? He didn't mention it.
Secretary Kissinger:
Two weeks ago.
Chancellor Schmidt: The other point is that the invitations for the
dialogue should go out before the OPEC meeting -- the middle or the end
of August, for a date -- Henry says about the 6th of October. This would
show that something was being done and give the Saudis an argument for
trying to postpone a price rise, at least until the year end.
SECRET/NODIS/XGDS
SECRET/NODIS/XGDS
3
The President: That would be helpful to our economic recovery. We
have some important provisions now before the Congress -- to decontrol
old oil. I would like to decontrol it together. It is now $5.25. New oil
is $13.50; imported oil is $11.50. I now have a phased program before
the Congress.
Chancellor Schmidt: The international implication is that the sooner the
price goes up, the less international oil the U.S. will buy.
The President: The highe r price should stimulate domestic production.
With Helsinki off the agenda, can we make progress on MBFR?
Chancellor Schmidt: The dust must settle first, but it will eventually
become the next item on the agenda.
Secretary Kissinger: We are now discussing Option III, without a complete
agreement.
The President: What are the problems?
Secretary Kissinger: There are some who object to discussion of
nuclear matters. Then there is also implicitly a ceiling when forces are
withdrawn.
Chancellor Schmidt: I think I was one of the inventors of MBFR -- in the
latter part of the '50s. Once one starts to discuss reductions mutually,
it is easier to tell the Congress that you can't reduce unilaterally. This
is what led the U.S. to agree to try MBFR. Things have not gone too
energetically, and I am content to have it that way. As long as we can
hold the Congress off, what is the hurry?
Secretary Kissinger: But the Congress one day will say that since they
can't be negotiated, they must be done unilaterally.
The President: I think it will come sooner than later. Vietnam held it
off, but I think it will not last long.
Chancellor Schmidt: Could we tailor progress to your domestic
necessities?
The President: That would be helpful.
SECRET/NODIS/XGDS
SEGRET/NODIS/XGDS
4
Chancellor Schmidt: On the substance, I can't say anything.
Secretary Kissinger: On the substance, we need a serious review.
It is a ridiculous position. We have put forth Option III. Perhaps some
serious people should get together to decide what a serious proposal might be.
Chancellor Schmidt: Then we will do it to suit your pace. We are under
no pressure.
The President: I think now that CSCE is out of the way, the Congress
may push again. The Congress can be most difficult. Vietnam kept it
out of the debate last year, but we could have a bad year if it looks like
stalling.
Chancellor Schmidt: We don't want to stall, but we have no reason to
push. There are some pushing in my party but that I can handle.
GERALD,
THEREY
SECRET/NODIS/XGDS
5
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FORD
DECLASSIFIED
E.O. 12968, SEC. 3.5
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES State Deview 3/10/04
BY Wa
NARA, DATE 5/24/04
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I think if we encle chun am would help 6
instructs introding then are have a aranx.
S
Gracied is from thinking on
chms intere
Was jerio is Italy The CD iman is
ant. Then and only 2 pine who home ahome-
untill is work t Carh, heady
book of Hug (?) who ison any out
Ithik un should got - In td Dit
pain - CD or ebec Custo will entre
C gant
K
We explaing getting (de) marting Serimbet
toc US. Ha debiate woul the The new
co hand is allyd more but int string
S
whole ewn hrt in study, hopits oppension
area but yr is determinating Universighment
will usi, diy het north+ Somth will
grow; Cresto have thous Wellht
administratives x have detailed from Mamn
to home here
If c eine set f world who young up, C
em it in 2th mm/dh chann my. of
that dresn't happen, econ it in study
world ditermant engilly Best wt Twe
even int fu C have enty
S Grainel s up what I here saying fine
rayo may. I have hight friet pack with
because 2 to Heroy
throut to west is and Crusts sorether
front of Natr, but earn ability of wet
Sp nt it who pal r and errors, C burden
world yet topether a act. Since it is lary
we haven't toam frimer instructions. five
leave it 5 yes, there will he a political
choices He thinks weatern haves have
get tryther to where lest atthor the
think it a character sat
Withon more hurtnet home to
from enating enformation
P
NS S nt is chy.
K
He in int Crainl muto To jument
S
His influting unti in 20 b. Sundis che
busing them many 12% be more of
Hm ling will they contract Chrit? Ba me
anne fit $ me april Am
with
P
With many be april of a unty X hypere
What my got is + since experiation
is
W idsen world chine, but he not This
is one topic for d man Quddhi, hn h at Himh
interprepent a pen first words This
here should he by cLS your Hry
is mudic w/o cygering to
In 79.
P Frat is dig. What amld you recommed
S Br and have enexployent west som he
19, In Fr it whoto high One is To
high, shipty are / mil A by Fish and
got 1.5 (dnt tablet this dmm). We and on
X One X trus have former to
be artists thru5015 check lost you Om ruther
though is and been to 65% of enguish. Snar
w/ Fr.
P
Ones ant 752
S
my Freshire 15 em halks in
US - Smire, Genersyon, requesting sm
Brnsas- bak to much To destribe prost
art To world effect. Fr example Nyc lorb
an 3 To hogher, to proph sell an, bunb
both in in & pt bighn NY rates. ago
drum is ising so purch seep project by
Remithing por works + froms inth
drillars. So florting currences - of which
I avty againt - when rate is so
unintite, smill destry C werther benefing
P I to vala press by happen, who sppail
to flont. But us Inverves incensions his
is finat.
K
But 5-yrs ago they for rigist raths, Charmless
print is that investanties of the the
Take could muthinize pur stability
I
Inaliaf Eun, i boands of hig michs
are to & bectimed thing di ust
unit - to engloyerent stay know
my mog to with character charamt
Invered taxes, made waring ching, your
himit andit, hold bask anye upulate by
personation - didn't work become prign
channed for groub dropped boully Derector truenst
united will, hat about 2/3 of total Immail is
foreign so that is 2 critical arpect, also,
Unry of C momes haved salth ratter
them univisiting Saving are find
Kreishn (?)
P
Sume w/us mil Heavey investment perseb not
sellings Huming
K
What your which
S
True another wyotcom of open
announts 10% - Shuh wants 30 yo- 1
it will and to this pissimi &n arbits
get things when control, we first not Home
The emportation w/ope, but eng to work
things ant. 2 ad if and could tell c would and
The dmyrs eye D syst will emert
am actions to mut in we if and Init
actually it
K
Wrens be made prepare for
unportation w/ Open World you X plain
this to P t also - und to connt
S
We world unit vegatively in Em to
importation w/o/en of oil prices go up
at eventionly benefits USJ SU, who
an with in Also can in aterials But no
chance for Em, who could urt stand
importation. Thry need ita v) price &
arkmed supply.
r the is any life anthork on and in Em it
is in Br, which will serr hme its mm
supply Euro events to canse to
supplies
P
Is there a anyot drea w/regent A print
supply?
S
Yes, but we nnt join a krhing of componention
it would socials emeroploy a I he
christmas
P my irimal exaction is /oneswth & a
moeting from is a hand him. my
terming is to work elisity - one lim fish
C perception of and working check world boby
w/ produces + SU.
K
But use should pryment so The and
results.
S
See home ent. in ShaNtz Service &
ans downsting criential
K But Shulty dif. to use in gental body build
me bold prints pays
S
Japel a unty should he carefully prepared
heads of govt an unterpringed to chizens
such matters w/ I prop.
P I have full enf. in Shatty, but under't use
him spirmth He hms of
* Putin call for 1005.20 trading
9
abo,
S of che econ conf. should the Mnu this your,
in shmedn't exect to may usults &
we could water engression we intend &
work togethinx and our potices that will
he brand It should be love hyre I val
with corms.
P
What dayan think Operatill dr?
S
S antio will they to utand my such step
tit ml of year. Wrt to Shinh - algerin, of
Perez I ent force he anamyed w/ US
K
Unity for I norstic Unsers,
S.
Wr homing a study enuplited was Athik
there ones dif June my amonge Open
contries
K of me this together
S Yes.
K We have brabal at examity d guarts &
yet hm we emill split up
S & chink we would reports poor, non and
contribus from plus
K
and same nm- and minh emithies Right
now they and allobrid 57 Ingether
on
what iP at in pager
P
Wenty Impi day 2 get back & had your
trip last fall In Ithib it a ford try &
sinsomed them. E can d think they in better
wo then Em. They have ail dystiments w/
Unia. & this they with w mother or ago.)
K The crllaged of Indochine has had one properd m
effect in form then
S
In what dinition
K
In a more self- assential any to separate
from US. Fn 1ˢᵗ time thing has what &
chrises def unthis at PM buel.
P
Yes. W/Twerker, we lidnk drive wifen
(Jamid tamper phrice unty)
S
het the unless you again u this browner
session 3 l agualts to chick ever
+ from uniths, vocum who for trant
one boat. asued you hipin
P
Termh you was wh use designt
to has have. her he where cheer dranstic
em it. hort fail at ever copy there
Engeners C cent pub was 12-14% ingethin
Zut and scon, may C criming precep
use in enderployeent. Bee lastermite of
investment + engention mying
high + beganite four, R bult is
bigh + undersion use time
had very bigh injustry about
celaning. Part 2 munh things have here
bromaging repation clam to celmt 5-690
about 9% buttans an injury
discuts im is at4 RD When
3 was ayo it was 6 , RD. We Rotricts
unerydozent bate by your and 890 time 76
11
7 1/2-190 GN P was and 1ˢᵗ ytr, sourhat
better 2nd geth, & 4-5% 3rd ftr + 2% in
4th ptr. JSons even think it and 70 & 99,
We have sous fracel pub. On different
is none about 60 bill, Cry. presoura is
at to around 70 bil. West yr forest
depends party on whither tax whition of 10
it world be 35-40 bil; w/ contribution of
tamp exactit it would add 15-20 his
by signs in have brielding
By you and ratt should he 1½ mil by form
You 1000, anto have hum bnd. Samings eats
highest have hum in years Crymver
imputions favth has improved sounth
of tax rebati, only 290 fr Z of 10 bil has
yet him spent, to that is patiential Huming
Om bolmee f trush is the that
driven't help in would every
S
That charamages No.
P
Intert notes am diating Siggly from
is alone raths FRB has projected 11-12% as
company to 1-8% We think inglation will
he around 5. 6%, 7-8% That
by good afformal
S
Thank you smould like Findnich I ugh
give us a his wins.
F
Occ revearip 1st 3th -3,5%-4%, Price
universe that 6% oree a you aydr University
about 4.5%, howher, about 500 reasonably
Cugants untily the below 20% wast in
has hm
himing undrestry. Demotric claimed is statement
by deverstrie progo for Win dig is in
X. We X 23% of GNP + X drun in and
tens by 1640 him chand is classes
22% Trins in net is am line int.
X to U & is important to no.
we hme x changed who Fee this counter, are
important has chilmider Hunk high has
unst assume out frice x, pub $1 $ 1.50.
That hey continue to worth an algine & Verymbs.
We world about 26->> because 3f
even it in with Unities ungernes, air
discount will T, Fr own undition chamacin
have has hald. Wedn't
for with use expert that your writing
aparements we thinking for wm
INIF good to etability prices.
S*
Pohl and you whites antome francied one
Pohl We form on bygst indyet lef- about
60 but DM, This would por they ent
A explances we howe we timbh froming it
he cound primts fester health to munt
sming and up.
In IMF wyat I this une an else to everyons
I think ayunemation in garaters posite by
and any & abs against on good homathis
On this and on Cheer to Fr t Feno priting
is genlly anifid ase $50.5 gold and are
Umanu Fridish
Verstneh Shirler
accurity Puhl
Samu
Clser to against Xchongr into system issue
still rm, w/ before dispute but use Earn. Dif
wrt witht now. We on phased $ rath
has your crop. your intent into one importher
amo &that anims is
S
Trank your Let the and a for words from
Ern, wt Gn. uniging Stevi what
of Em that purch FReen FRB
unhje am interst rate puting unt just
a tomether email your bigh rxtro bing
up price of -$ which is goint good, but
nt drights one engin unappets. schip
Fs will m55hg & bluebe uselty I Mr my
The friture of world Xchnge lates, often
Burton woods, went be zahrel atme
inty, but & thats it int insertigh. Since
us is strught unity monitarity- truch
wise am about home F unit versous
the dransting resent mind We evel forever
but adjustants Morts system in washine are
should bing about enroner urganity flont
to anmil three depor chrosturing finctruction
Fn smills at is chip to clealm
* when you lout know whither then and
he 1090 change no/inls me. In Batton
useds, all ussemin prygect to t timesfers
werein gold. you stopped that in (a we
Chrt of you crosit Transporteril
you have in managery
14
rath to they an productable longer kind
This, inflution TOW and & unity princism C.
Mal purb of world emy.
Thopa. effects of c-scession - unthod
dipression - threaths potitied in
several - staly, when CD may
accept Gut publit France alp, artere
them almays a patisfied for drubtn
underward Br, wotkrout must, hat
thinks op anatysis. Here age, wrt eightend,
hit had wents I clmit from
what person The them pub are grenth
threat DC to what them su, NIE, or Southern
Emit pub. Ground x I borth ford Unit C
struggent country - c US- most tabs c and
set
P
I conce we just intryents ans leon thinking
factimo, holb bomse of christin prl it
in E m but in US. we hme gene Then
transmite event own just rs. and people
have gone them it wy pothernic & Sungord
to 1930's it 12 quit sungrising We are
anfins forem & for Unins for laon injuryment
wihme eduction next ye y mts informa even
import in mos ahead. stark and
cm vita proy in inventing are
poties,
S To we yen writing at brunk. We chined
at your statuat a cry evition we
15
anot your obspisal any day or may ht.
& back formal LB pundri int, in Harmbir
where meansisis hourt his about this
every, One premate entrepress - was in
Een chm SS you 11 into
& hour - property - c/ Font- wed this serve
of 50 corp, in crohe to your inferctual
DECLASSIFIED
/Schmidt/HK 7/28/75
E.O. 12958 (as amended) SEC 3.3
GERALD
MR # 09-118, #5
P
state rev 3/10/04, CiAlth 10/22/09
THE WHITE HOUSE
THE WHITE HOUSE
By dal NARA, Date 12/3/09
WASHINGTON
WASHINGTON
Bonn
P any nm uports M Part,
it hat very thip have off get anse first
S He ad is any wrth on conversation w/assond
K no. Ejecyt for a Cent- for Clush
S Styard they closhed in open so
Inserved 1 2 wanted to propose to your am
what indistral C ple disersions
(5. ) emit he pushed Somes is
be enytime foreign immestion X ent
emagement - if only as unise as emageno,
scottered army lif. immistion. often
Hes justs has ensirers gastevill t
4th Chan, because white it is and
this, Ground hrockport in proposing a
lach
P Amercasive for wolkful. wethink it
+ from invistment sterning fini thm
very
a condition X staway. atn funds, less
S you cauld present open for intryearies.
and, stall comes & promot
Thus for they takm to haviding chart The
questions. Betth to dent w/ them in
varing Crust parties are working for Chin
1 inte whentorm terthing then
one version, of c Pest censts
arong conter 3 anter
P Hm ch you arively zer a 3000
K Therease 2 prito, Sinon went lite in.
S we hopets hear from your that your
The other is Fr. writing massuring
intil in better
We world and a position earlin
P There is a group sufing separation
they give 1/2 of it up as zon as they
S hear they here ungel by C,A (hough)
met w/c Samirs.
K wrt yet
P what would Erno un this he &
S When et? chil this hypren the bent
agre everydre
K 2. who yo
S In Ext they would they it due to for
S The 3lm point is that invitation
interpreme. Wet would par diclaret
for C. character should go ant enfore
Open - institute or end of any, for
3
THE WHITE HOUSE
THE WHITE HOUSE
WASHINGTON
WASHINGTON
a duty -KK samp about 60 A Thinmil
S I think 2 no and - envintors of
shom something was heing chane K give
MBER - in Cen enthe 50's.
Samis am august for trying T fortyone
Once one starts to disires reductions
a price vise, at unit at geor end.
unitually, it is easin to as eong you
P That mark he halpful X e.cm Marry.
can't reduce There what
we have same injustment provior
hdc US to again to try NIBER, Things have
withouse to engethenely X dum controst
am before - Cony - to ant.
I would like to decument altracthes. now
to uan it that uny. as long as are can
5-25. has and 350, Moil 1150. I now
horld long off, what is hung.
have a phosed prog where C emg
K But mg one dry will say seriol they
S lutl impluenting is sower piter Yours
cant w wegot they must be done
up, - less with at us will his FR
pruh he price should strimbets drustic
P Ithish it will came sourn them enth.
provider
with Hedsing No agenda, curr we more
I/N hald in off, but 2 think it will not
prog on NIBER
last long
S Doyt unext attle 1st ant it will
be course with item or
S Comel ene tuke king to year christic
the ayroldon
P That world he harpful.
K wear now drowsing oftin III,
w/o complete agreement
5 On subtonce, I country anything
P What ans ports.
K Ou substimes, an winda things units
It is a- indivinum pointing we home
K Thoram 20ml who object To discrosing
of cmc. anothers. Then there is also
put forth optim III. Puhaps sour
inplicates a withing when forces are h/drmn
Jenni people zhould get tyether
5
THE WHITE HOUSE
Bugs GERALD
WASHINGTON
to date white him program mill
wright he.
RS Them cm will du it to sent your
pace. we an made no mane
P Ithish um that Cs C E is contifican,
Cruy may pursh a goin any can he
mosting. VN hyt it and of arbats
lest year, hate will home bollyer
M it brew the stathing
S we drit contt stall, but hms no
Mason is purh. There form pristing
in my party tnt 2 Um brundle.