The gold battles within the Cold War: American monetary policy and the defense of Europe, 1960-1963

Diplomatic History

Volumn 26, Issue 1, 2002, Pages 61-94

  Gavin, Francis J ^a  

^a NONE

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EID: 0345807427     PISSN: 01452096     EISSN: None     Source Type: Journal    
DOI: 10.1111/1467-7709.00300     Document Type: Article

References (195)

1. See Arthur Schlesinger, A Thousand Days, John F. Kennedy in the White House (New York, 1965), 601; W. W. Rostow, The Diffusion of Power, An Essay in Recent History (New York, 1972), 136; and memcon between Kennedy and Adenauer, 24 June 1963, U.S. Department of State, Foreign Relations of the United States, 1961-1963 (Washington, 1995), 9: 170. Schlesinger also quotes Kennedy as saying "What really matters is the strength of the currency. It is this, not the force de frappe, which makes France a factor." George Ball claimed that Kennedy was "absolutely obsessed with the balance of payments." See George Ball Oral History, no. 2, AC 88-5, 29, Lyndon B. Johnson Presidential Library. Austin, Texas.
2. See Arthur Schlesinger, A Thousand Days, John F. Kennedy in the White House (New York, 1965), 601; W. W. Rostow, The Diffusion of Power, An Essay in Recent History (New York, 1972), 136; and memcon between Kennedy and Adenauer, 24 June 1963, U.S. Department of State, Foreign Relations of the United States, 1961-1963 (Washington, 1995), 9: 170. Schlesinger also quotes Kennedy as saying "What really matters is the strength of the currency. It is this, not the force de frappe, which makes France a factor." George Ball claimed that Kennedy was "absolutely obsessed with the balance of payments." See George Ball Oral History, no. 2, AC 88-5, 29, Lyndon B. Johnson Presidential Library. Austin, Texas.
3. See Arthur Schlesinger, A Thousand Days, John F. Kennedy in the White House (New York, 1965), 601; W. W. Rostow, The Diffusion of Power, An Essay in Recent History (New York, 1972), 136; and memcon between Kennedy and Adenauer, 24 June 1963, U.S. Department of State, Foreign Relations of the United States, 1961-1963 (Washington, 1995), 9: 170. Schlesinger also quotes Kennedy as saying "What really matters is the strength of the currency. It is this, not the force de frappe, which makes France a factor." George Ball claimed that Kennedy was "absolutely obsessed with the balance of payments." See George Ball Oral History, no. 2, AC 88-5, 29, Lyndon B. Johnson Presidential Library. Austin, Texas.
4. Michael R. Bechloss, The Crisis Years, Kennedy and Khrushchev, 1960-1963 (New York, 1991).
5. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
6. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
7. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
8. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
9. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
10. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
11. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
12. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
13. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
14. See William S. Borden, "Defending Hegemony, American Foreign Economic Policy," in Kennedy's Quest for Victory, American Foreign Policy, 1961-1963, ed., Thomas G. Paterson (New York, 1989), 83-85; David Calleo, The Imperious Economy (Cambridge, MA, 1982), 23; idem, Beyond American Hegemony, The Future of the Western Alliance (New York, 1987), 13, 44-52; Frank Costigliola, "The Pursuit of Atlantic Community, Nuclear Arms, Dollars, and Berlin," in Paterson, ed., Kennedy's Quest for Victory, 24-56; Paul Kennedy, The Rise and Fall of the Great Powers, Economic Change and Military Conflict from 1500 to 2000 (New York, 1987), 434; and Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York, 1997), esp. 94-108. Despite the promising title of her book, Kunz does not link the dollar crisis to the political crisis between the Kennedy administration and its NATO allies. For interpretations that see Kennedy's monetary policy as a series of "ad-hoc" expedients designed to maintain the privileged place the dollar held in the postwar "capitalist world-system," see Borden, "Defending Hegemony," 57-62, 84; David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington, 1973), 88-89; John S. Odell, U.S. International Monetary Policy: Markets, Power, and Ideas as a Source of Change (Princeton, 1982), 88; and Susan Strange, International Monetary Relations (London, 1976), 82, 207.
15. Again, the professional literature on international monetary economics is quite large, but for the best works see Robert M. Stern, The Balance of Payments: Theory and Economic Policy (Chicago, 1973); Richard Cooper, The International Monetary System: Essays in World Economics (Cambridge, MA, 1987); and Paul de Grauwe, International Money: Post-War Trends and Theories (Oxford, 1989). For an excellent examination of the postwar period that combines the best of historical and economic analysis see Harold James, International Monetary Cooperation since 1945 (New York, 1997).
16. Again, the professional literature on international monetary economics is quite large, but for the best works see Robert M. Stern, The Balance of Payments: Theory and Economic Policy (Chicago, 1973); Richard Cooper, The International Monetary System: Essays in World Economics (Cambridge, MA, 1987); and Paul de Grauwe, International Money: Post-War Trends and Theories (Oxford, 1989). For an excellent examination of the postwar period that combines the best of historical and economic analysis see Harold James, International Monetary Cooperation since 1945 (New York, 1997).
17. Again, the professional literature on international monetary economics is quite large, but for the best works see Robert M. Stern, The Balance of Payments: Theory and Economic Policy (Chicago, 1973); Richard Cooper, The International Monetary System: Essays in World Economics (Cambridge, MA, 1987); and Paul de Grauwe, International Money: Post-War Trends and Theories (Oxford, 1989). For an excellent examination of the postwar period that combines the best of historical and economic analysis see Harold James, International Monetary Cooperation since 1945 (New York, 1997).
18. Again, the professional literature on international monetary economics is quite large, but for the best works see Robert M. Stern, The Balance of Payments: Theory and Economic Policy (Chicago, 1973); Richard Cooper, The International Monetary System: Essays in World Economics (Cambridge, MA, 1987); and Paul de Grauwe, International Money: Post-War Trends and Theories (Oxford, 1989). For an excellent examination of the postwar period that combines the best of historical and economic analysis see Harold James, International Monetary Cooperation since 1945 (New York, 1997).
19. For the conventional wisdom on the Kennedy's "flexible response" policy see John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (Oxford, 1982), 198-236; and Jane E. Stromseth, The Origins of Flexible Response: NATO's Debate over Strategy in the 1960s (New York, 1988). For the idea that the U.S. government was firmly committed to a NATO system based on a strong, permanent American presence, even in the Eisenhower period, see what has become the classic work on American foreign policy during the Cold War, Gaddis, Strategies of Containment, 168. For a reinterpretation of the flexible response doctrine see Francis J. Gavin, "The Myth of Flexible Response: American Strategy in Europe during the 1960s," International History Review Volume XXIII, 4 (December, 2001).
20. For the conventional wisdom on the Kennedy's "flexible response" policy see John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (Oxford, 1982), 198-236; and Jane E. Stromseth, The Origins of Flexible Response: NATO's Debate over Strategy in the 1960s (New York, 1988). For the idea that the U.S. government was firmly committed to a NATO system based on a strong, permanent American presence, even in the Eisenhower period, see what has become the classic work on American foreign policy during the Cold War, Gaddis, Strategies of Containment, 168. For a reinterpretation of the flexible response doctrine see Francis J. Gavin, "The Myth of Flexible Response: American Strategy in Europe during the 1960s," International History Review Volume XXIII, 4 (December, 2001).
21. For the conventional wisdom on the Kennedy's "flexible response" policy see John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (Oxford, 1982), 198-236; and Jane E. Stromseth, The Origins of Flexible Response: NATO's Debate over Strategy in the 1960s (New York, 1988). For the idea that the U.S. government was firmly committed to a NATO system based on a strong, permanent American presence, even in the Eisenhower period, see what has become the classic work on American foreign policy during the Cold War, Gaddis, Strategies of Containment, 168. For a reinterpretation of the flexible response doctrine see Francis J. Gavin, "The Myth of Flexible Response: American Strategy in Europe during the 1960s," International History Review Volume XXIII, 4 (December, 2001).
22. For the conventional wisdom on the Kennedy's "flexible response" policy see John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (Oxford, 1982), 198-236; and Jane E. Stromseth, The Origins of Flexible Response: NATO's Debate over Strategy in the 1960s (New York, 1988). For the idea that the U.S. government was firmly committed to a NATO system based on a strong, permanent American presence, even in the Eisenhower period, see what has become the classic work on American foreign policy during the Cold War, Gaddis, Strategies of Containment, 168. For a reinterpretation of the flexible response doctrine see Francis J. Gavin, "The Myth of Flexible Response: American Strategy in Europe during the 1960s," International History Review Volume XXIII, 4 (December, 2001).
23. At first glance, McNamara and the Office of the Secretary of Defense seems an odd ally for Treasury's troop withdrawal policies. But as will become clear, while McNamara supported a conventional buildup by Western Europe, he also supported downsizing U.S. conventional forces in Europe. George Ball claims that McNamara was almost as obsessed with the balance-of-payments problem as the president, "Because Bob was prepared to distort any kind of policy in order to achieve some temporary alleviation to the balance of payments, which again to my mind was a function of his preoccupation with quantification." See George Ball Oral History, no. 2, AC 88-3, 29. For additional evidence of McNamara's willingness to distort budgetary and security policy because of the balance of payments see Deborah Shapley, Promise and Power: The Life and Times of Robert McNamara (Boston, 1993), 225-26.
24. De Gaulle claimed the system allowed for "l'hegemonie americaine." See press conference, 4 February 1965, from Charles de Gaulle, Discours et messages, vol. 4, "Pour l'effort, Aout 1962-Decembre 1965" (Paris, 1993). See also Raymond Aron, Le Republique Imperiale (Paris, 1973); Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 380-82; and Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 287. For the economic theories behind de Gaulle's beliefs see Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
25. De Gaulle claimed the system allowed for "l'hegemonie americaine." See press conference, 4 February 1965, from Charles de Gaulle, Discours et messages, vol. 4, "Pour l'effort, Aout 1962-Decembre 1965" (Paris, 1993). See also Raymond Aron, Le Republique Imperiale (Paris, 1973); Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 380-82; and Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 287. For the economic theories behind de Gaulle's beliefs see Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
26. De Gaulle claimed the system allowed for "l'hegemonie americaine." See press conference, 4 February 1965, from Charles de Gaulle, Discours et messages, vol. 4, "Pour l'effort, Aout 1962-Decembre 1965" (Paris, 1993). See also Raymond Aron, Le Republique Imperiale (Paris, 1973); Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 380-82; and Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 287. For the economic theories behind de Gaulle's beliefs see Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
27. De Gaulle claimed the system allowed for "l'hegemonie americaine." See press conference, 4 February 1965, from Charles de Gaulle, Discours et messages, vol. 4, "Pour l'effort, Aout 1962-Decembre 1965" (Paris, 1993). See also Raymond Aron, Le Republique Imperiale (Paris, 1973); Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 380-82; and Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 287. For the economic theories behind de Gaulle's beliefs see Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
28. De Gaulle claimed the system allowed for "l'hegemonie americaine." See press conference, 4 February 1965, from Charles de Gaulle, Discours et messages, vol. 4, "Pour l'effort, Aout 1962-Decembre 1965" (Paris, 1993). See also Raymond Aron, Le Republique Imperiale (Paris, 1973); Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 380-82; and Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 287. For the economic theories behind de Gaulle's beliefs see Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
29. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
30. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
31. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
32. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
33. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
34. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
35. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
36. For two good accounts of the negotiations and results of the Bretton Woods Monetary Conference see Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and the Prospects of Our International Economic Order, rev. ed. (New York, 1969); and Alfred E. Eckes, Jr., A Search for Solvency: Bretton Woods and the International Monetary System, 1941-1971 (Austin, 1975). See also the collected essays in Orin Kirshner, ed., The Bretton Woods-GATT System: Retrospect and Prospect after Fifty Years (Armonk, NY, 1996). For an excellent, more recent account see Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996). For a less enthusiastic interpretation of Bretton Woods see Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley, 1977). The economic ideas and philosophy of John Maynard Keynes had an enormous effect on monetary negotiations. See especially D. E. Moggridge, ed., The Collected Writings of John Maynard Keynes, vol. 25, Activities: Shaping the Post-War World-Bretton Woods and Reparations (London, 1980); D. E. Moggridge, Maynard Keynes: An Economist's Biography (London, 1992); and Robert Skidelsky, John Maynard Keynes, The Economist as Savior, 1920-1973 (New York, 1992).
37. I use the term "system" loosely, as it can be debated when the Bretton Woods system actually began. De Gaulle and Rueff essentially ignored the whole concept of Bretton Woods and argued that the flaws in the system could be traced to the Genoa conference of 1922, where the principle that sterling and dollars could supplement gold as a reserve asset was established, therefore creating a "gold-exchange" standard. An argument can be made that the Tripartite Agreement between the United States, Great Britain, and France in 1937 is the key event, because the United States declared its intention to convert dollars into gold at $35/oz. Other possible starting dates are July 1944, when the Bretton Woods agreements were signed; 1947, the year that it became clear that sterling would not be a reserve currency and the United States reaffirmed its commitment to redeem dollars for gold; or the end of 1958, when many Western European governments removed the restrictions on current account convertibility for their currencies. Most scholars accept 1958. See Francis J. Gavin, "The Legends of Bretton Woods," Orbis (Spring 1996): 3-16.
38. See Barry Eichengreen, Globalizing Capital: A History of the International Monetary System (Princeton, 1996), 7-44. Recent scholarship suggests the "classical" gold standard of the late nineteenth and early twentieth centuries may not have been as "pure" as was once thought and, in fact, shared many characteristics of later gold-exchange systems. See especially Giulo M. Gallarotti, The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1880-1914 (New York, 1995).
39. See Barry Eichengreen, Globalizing Capital: A History of the International Monetary System (Princeton, 1996), 7-44. Recent scholarship suggests the "classical" gold standard of the late nineteenth and early twentieth centuries may not have been as "pure" as was once thought and, in fact, shared many characteristics of later gold-exchange systems. See especially Giulo M. Gallarotti, The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1880-1914 (New York, 1995).
40. Milton Friedman, "The Case for Flexible Exchange Rates," in Essays in Positive Economics (Chicago, 1953), 157-203. Economists often call the post-Bretton Woods system a "dirty float" because of widespread government intervention in global currency markets since 1971.
41. Paul Volcker and Toyoo Gyohten, Changing Fortunes, The World's Money and the Threat to American Leadership (New York, 1992), 7-8.
42. In practice, gold inflows and outflows were often "sterilized" under the gold standard, which just meant that gold was added or subtracted from the national treasuries without changing the domestic monetary base. But even with some sterilization, the gold standard was nowhere near as stable as was once thought. See Gallarotti, The Anatomy of an International Monetary Regime. The United States is a case in point. During the nineteenth and early twentieth centuries, the United States ran large trade deficits and was a net importer of capital. Furthermore, a large portion of U.S. exports were made of agricultural commodities whose prices were very unstable. A sudden fall in foreign investment (caused by, for example, a banking crisis in Europe) or a drop in agricultural prices could mean a deterioration in the American balance of payments, the loss of gold, domestic deflation, and a fall in prices (particularly agricultural commodity prices). This made the whole question of U.S. participation in the gold standard a divisive domestic political issue and was perhaps the key factor in William Jennings Bryan's popularity during the 1896 presidential election. It is not a coincidence that as the U.S. monetary position became stronger and more stable after 1896, Bryan's political popularity waned considerably. See Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867-1960 (Princeton, 1963), 89-188; see also Milton Friedman, Money Mischief: Episodes in Monetary History (New York, 1994), especially the essays "The Crime of 1873" and "William Jennings Bryan and the Cyanide Process."
43. In practice, gold inflows and outflows were often "sterilized" under the gold standard, which just meant that gold was added or subtracted from the national treasuries without changing the domestic monetary base. But even with some sterilization, the gold standard was nowhere near as stable as was once thought. See Gallarotti, The Anatomy of an International Monetary Regime. The United States is a case in point. During the nineteenth and early twentieth centuries, the United States ran large trade deficits and was a net importer of capital. Furthermore, a large portion of U.S. exports were made of agricultural commodities whose prices were very unstable. A sudden fall in foreign investment (caused by, for example, a banking crisis in Europe) or a drop in agricultural prices could mean a deterioration in the American balance of payments, the loss of gold, domestic deflation, and a fall in prices (particularly agricultural commodity prices). This made the whole question of U.S. participation in the gold standard a divisive domestic political issue and was perhaps the key factor in William Jennings Bryan's popularity during the 1896 presidential election. It is not a coincidence that as the U.S. monetary position became stronger and more stable after 1896, Bryan's political popularity waned considerably. See Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867-1960 (Princeton, 1963), 89-188; see also Milton Friedman, Money Mischief: Episodes in Monetary History (New York, 1994), especially the essays "The Crime of 1873" and "William Jennings Bryan and the Cyanide Process."
44. In practice, gold inflows and outflows were often "sterilized" under the gold standard, which just meant that gold was added or subtracted from the national treasuries without changing the domestic monetary base. But even with some sterilization, the gold standard was nowhere near as stable as was once thought. See Gallarotti, The Anatomy of an International Monetary Regime. The United States is a case in point. During the nineteenth and early twentieth centuries, the United States ran large trade deficits and was a net importer of capital. Furthermore, a large portion of U.S. exports were made of agricultural commodities whose prices were very unstable. A sudden fall in foreign investment (caused by, for example, a banking crisis in Europe) or a drop in agricultural prices could mean a deterioration in the American balance of payments, the loss of gold, domestic deflation, and a fall in prices (particularly agricultural commodity prices). This made the whole question of U.S. participation in the gold standard a divisive domestic political issue and was perhaps the key factor in William Jennings Bryan's popularity during the 1896 presidential election. It is not a coincidence that as the U.S. monetary position became stronger and more stable after 1896, Bryan's political popularity waned considerably. See Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867-1960 (Princeton, 1963), 89-188; see also Milton Friedman, Money Mischief: Episodes in Monetary History (New York, 1994), especially the essays "The Crime of 1873" and "William Jennings Bryan and the Cyanide Process."
45. See especially Moggridge, Keynes, An Economist's Biography.
46. The system did allow for IMF-approved changes in par value. But exchange rate variations were difficult because they unsettled foreign exchange markets and it was hard to get countries to agree to shifts because they feared the adverse effects on their terms of trade. Speculators always knew the direction of any revaluation in advance, guaranteeing windfall profits whenever exchange rates were changed. Countries were equally reluctant to sacrifice full employment and social policy goals for balance-of-payments purposes. In the end, this meant that there was no effective means to automatically close balance-of-payments gaps.
47. For the best accounts of how monetary relations were structured in Western Europe during the late 1940s and early 1950s see Michael J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952 (New York, 1987); Alan S. Milward, The Reconstruction of Western Europe, 1945-1951 (Berkeley, 1984); and Brian Tew, The Evolution of the International Monetary System, 1945-1988 (London, 1988).
48. For the best accounts of how monetary relations were structured in Western Europe during the late 1940s and early 1950s see Michael J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952 (New York, 1987); Alan S. Milward, The Reconstruction of Western Europe, 1945-1951 (Berkeley, 1984); and Brian Tew, The Evolution of the International Monetary System, 1945-1988 (London, 1988).
49. For the best accounts of how monetary relations were structured in Western Europe during the late 1940s and early 1950s see Michael J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952 (New York, 1987); Alan S. Milward, The Reconstruction of Western Europe, 1945-1951 (Berkeley, 1984); and Brian Tew, The Evolution of the International Monetary System, 1945-1988 (London, 1988).
50. This is a common problem with a gold exchange system. Any country that ran a payments deficit could settle it with dollars or gold. Many Europeans naturally wondered how fair it was for the united States to settle its deficits in dollars, its own currency. But economists now recognize that some part of this deficit was the result of the demand for dollars for reserve purposes, meaning that countries wanted to hold dollars in their central banks for liquidity purposes, not for purchasing American goods and services. So part of the deficit was not a deficit at all, and the actual "equilibrium" point for the U.S. balance of payments was not zero. But that was not well recognized at the time. See Stern, The Balance of Payments, 152.
51. This was the scenario laid out by Robert Triffin in Gold and the Dollar Crisis, The Future of Convertibility (New Haven, Yale, 1960). This book was very influential, and the "Triffin thesis" was much discussed by economists and policymakers on both sides of the Atlantic. But as Barry Eichengreen demonstrates, the Great Depression was worsened not by competitive devaluations but by the deflationary policies pursued in order to maintain the gold standard. Nations that went off gold and devalued for the most part came out of the Depression quicker and in a more robust fashion than those that stayed on the gold standard. See Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (New York, 1995).
52. This was the scenario laid out by Robert Triffin in Gold and the Dollar Crisis, The Future of Convertibility (New Haven, Yale, 1960). This book was very influential, and the "Triffin thesis" was much discussed by economists and policymakers on both sides of the Atlantic. But as Barry Eichengreen demonstrates, the Great Depression was worsened not by competitive devaluations but by the deflationary policies pursued in order to maintain the gold standard. Nations that went off gold and devalued for the most part came out of the Depression quicker and in a more robust fashion than those that stayed on the gold standard. See Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (New York, 1995).
53. For Eisenhower's desire to pull American troops out once Western Europe recovered see Marc Trachtenberg, History and Strategy (Princeton, 1991), 163-68, 185-87.
54. Memorandum of conference with President Eisenhower, 4 November 1959, Whitman File, DDE Diaries, Dwight D. Eisenhower Library, Abilene, Kansas. For a more complete analysis of Eisenhower's monetary policy during the gold crisis see Francis J. Gavin, "Defending Europe and the Dollar: The Politics of the United States Balance of Payments, 1958-1968" (Ph.D. diss., University of Pennsylvania, 1997). Note that there was an important strategic clement to the debate over monetary policy and troop withdrawals; the State Department suspected that Eisenhower was using the balance-of-payments deficit as an excuse to pull out troops for political reasons. See memorandum from the assistant secretary of state for policy planning to Secretary of State Herter, 29 October 1959, FRUS, 1958-1960 (Washington, 1993), 7: 494-96. Many State officials had been trying to move NATO policy away from such a heavy reliance on the nuclear deterrent for several years. Assistant Secretary of State for Policy Planning Gerard Smith attacked Eisenhower's assumption that any conflict with the Soviet Union would automatically escalate to general war. "Almost two years ago Foster Dulles on a number of occasions told the Secretary of Defense and the president that he believed this principle was obsolescent and that we should be developing a new strategic concept and military posture to implement it." If the balance of payments and gold crisis forced a troop withdrawal, the administration should be honest about it. "If economic factors require us to weaken American military influence abroad, I think it is most important that we not fool ourselves by rationalizing such retraction as being warranted by the military situation."
55. Memorandum of conference with President Eisenhower, 4 November 1959, Whitman File, DDE Diaries, Dwight D. Eisenhower Library, Abilene, Kansas. For a more complete analysis of Eisenhower's monetary policy during the gold crisis see Francis J. Gavin, "Defending Europe and the Dollar: The Politics of the United States Balance of Payments, 1958-1968" (Ph.D. diss., University of Pennsylvania, 1997). Note that there was an important strategic clement to the debate over monetary policy and troop withdrawals; the State Department suspected that Eisenhower was using the balance-of-payments deficit as an excuse to pull out troops for political reasons. See memorandum from the assistant secretary of state for policy planning to Secretary of State Herter, 29 October 1959, FRUS, 1958-1960 (Washington, 1993), 7: 494-96. Many State officials had been trying to move NATO policy away from such a heavy reliance on the nuclear deterrent for several years. Assistant Secretary of State for Policy Planning Gerard Smith attacked Eisenhower's assumption that any conflict with the Soviet Union would automatically escalate to general war. "Almost two years ago Foster Dulles on a number of occasions told the Secretary of Defense and the president that he believed this principle was obsolescent and that we should be developing a new strategic concept and military posture to implement it." If the balance of payments and gold crisis forced a troop withdrawal, the administration should be honest about it. "If economic factors require us to weaken American military influence abroad, I think it is most important that we not fool ourselves by rationalizing such retraction as being warranted by the military situation."
56. For the bureaucratic struggles between State and Treasury over the question of troop withdrawals and the dollar and gold crisis see memcon, president, Herter, Reinhardt, Merchant, and Kohler, drafted 22 October 1959, in Whitman File, DDE Diaries; and FRUS, 1958-1960 (Washington, 1992), 4: 129, 130, 134, 520-38, 539-42.
57. Memorandum, 9 November 1960, FRUS, 1958-1960, 4: 131. Certainly, Eisenhower was shocked by how quickly the US. monetary situation had deteriorated. Several years earlier, the administration had used its enormous monetary power to compel the British to abandon their Suez adventure. It appeared the Europeans were developing the same capacity to affect American policy. For an example of how the Eisenhower administration used explicit threats of monetary coercion against the British during the Suez crisis see telegram from embassy in Washington to British Foreign Office, 2 December 1956, PREM 11/1826, XC 7840, Public Record Office, Kew, England. See also Jonathan Kirshner, Currency and Coercion, The Political Economy of International Monetary Power (Princeton, 1995), 63-82.
58. Memorandum, 9 November 1960, FRUS, 1958-1960, 4: 131. Certainly, Eisenhower was shocked by how quickly the US. monetary situation had deteriorated. Several years earlier, the administration had used its enormous monetary power to compel the British to abandon their Suez adventure. It appeared the Europeans were developing the same capacity to affect American policy. For an example of how the Eisenhower administration used explicit threats of monetary coercion against the British during the Suez crisis see telegram from embassy in Washington to British Foreign Office, 2 December 1956, PREM 11/1826, XC 7840, Public Record Office, Kew, England. See also Jonathan Kirshner, Currency and Coercion, The Political Economy of International Monetary Power (Princeton, 1995), 63-82.
59. For the documents on the disastrous Anderson-Dillon trip to the Federal Republic of Germany see memorandum of conference with President Eisenhower in Augusta, Georgia, 15 November 1960, in FRUS, 1958-1960 (Washington, 1992), 4: 134-39; cable to Herter from Dillon, copy of cable to the president from Anderson, 23 November 1960, in UPA, DDE Office Files, Administration - International Series, Anderson, Eisenhower Library; memorandum of conference with President Eisenhower, 28 November 1960, FRUS, 1958-1960 4:142-47; for a contemporary press report see "Communiqué on Anderson-Dillon talks with W. Ger leaders indirectly admits failure of mission," New York Times, 23 November 1960.
60. For the documents on the disastrous Anderson-Dillon trip to the Federal Republic of Germany see memorandum of conference with President Eisenhower in Augusta, Georgia, 15 November 1960, in FRUS, 1958-1960 (Washington, 1992), 4: 134-39; cable to Herter from Dillon, copy of cable to the president from Anderson, 23 November 1960, in UPA, DDE Office Files, Administration - International Series, Anderson, Eisenhower Library; memorandum of conference with President Eisenhower, 28 November 1960, FRUS, 1958-1960 4:142-47; for a contemporary press report see "Communiqué on Anderson-Dillon talks with W. Ger leaders indirectly admits failure of mission," New York Times, 23 November 1960.
61. For the documents on the disastrous Anderson-Dillon trip to the Federal Republic of Germany see memorandum of conference with President Eisenhower in Augusta, Georgia, 15 November 1960, in FRUS, 1958-1960 (Washington, 1992), 4: 134-39; cable to Herter from Dillon, copy of cable to the president from Anderson, 23 November 1960, in UPA, DDE Office Files, Administration - International Series, Anderson, Eisenhower Library; memorandum of conference with President Eisenhower, 28 November 1960, FRUS, 1958-1960 4:142-47; for a contemporary press report see "Communiqué on Anderson-Dillon talks with W. Ger leaders indirectly admits failure of mission," New York Times, 23 November 1960.
62. Secretary Herter's speech to the NATO ministerial meeting, "NATO Long-Range Planning," 17 December 1960, FRUS, 1958-1960 7:679.
63. Theodore C. Sorensen, Kennedy (New York, 1965), 406. See also John Kenneth Galbraith's letter to the president from October 1960, in his Letters to Kennedy (Harvard, 1998), 29-31.
64. Theodore C. Sorensen, Kennedy (New York, 1965), 406. See also John Kenneth Galbraith's letter to the president from October 1960, in his Letters to Kennedy (Harvard, 1998), 29-31.
65. Richard Reeves, President Kennedy: Profile of Power (New York, 1993), 23.
66. "Report to the Honorable John F. Kennedy by the Task Force on the Balance of Payments," 27 December 1960, from file AP/SD & WNA/Report to the president on the Balance of Payments, 25 February 1963, found in the Papers of Dean Acheson, Harry S. Truman Library, Independence, Missouri.
67. Reeves, President Kennedy, 27-28.
68. A useful study on Roosevelt's policymaking style is Robert Dallek's Franklin D. Roosevelt and American Foreign Policy, 1932-1945 (New York, 1995). For a discussion of how the Kennedy administration consciously set out to create a different foreign policymaking structure than Eisenhower's see Frank A. Mayer, Adenauer and Kennedy: A Study in German-American Relations, 1961-1963 (New York, 1996), 9. For Kennedy's inability to make decisions about long-term policy see George W. Ball, The Past Has Another Pattern (New York, 1982), 167-68.
69. A useful study on Roosevelt's policymaking style is Robert Dallek's Franklin D. Roosevelt and American Foreign Policy, 1932-1945 (New York, 1995). For a discussion of how the Kennedy administration consciously set out to create a different foreign policymaking structure than Eisenhower's see Frank A. Mayer, Adenauer and Kennedy: A Study in German-American Relations, 1961-1963 (New York, 1996), 9. For Kennedy's inability to make decisions about long-term policy see
70. A useful study on Roosevelt's policymaking style is Robert Dallek's Franklin D. Roosevelt and American Foreign Policy, 1932-1945 (New York, 1995). For a discussion of how the Kennedy administration consciously set out to create a different foreign policymaking structure than Eisenhower's see Frank A. Mayer, Adenauer and Kennedy: A Study in German-American Relations, 1961-1963 (New York, 1996), 9. For Kennedy's inability to make decisions about long-term policy see George W. Ball, The Past Has Another Pattern (New York, 1982), 167-68.
71. The French were convinced that Kennedy had no idea of what he was doing on the balance-of-payments question. See Alphand's comments about Kennedy in Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 381; and Herve Alphand, L'etonnement d'etre (Paris, 1977), 381.
72. The French were convinced that Kennedy had no idea of what he was doing on the balance-of-payments question. See Alphand's comments about Kennedy in Jean Lacouture, de Gaulle, The Ruler, 1945-1970 (New York, 1992), 381; and Herve Alphand, L'etonnement d'etre (Paris, 1977), 381.
73. The swap arrangements were standby credit lines that allowed participants to draw on each other's currencies in order to defend their own exchange rates. The increased IMF credit was arranged through a procedure called the General Arrangements to Borrow, which were negotiated at the end of 1961. While connected to the IMF, these arrangements were unique in that they gave the lending countries some discretion over the size and use of the loans. For an excellent discussion of these innovations see James, International Monetary Cooperation since Bretton Woods, 159-65.
74. Werner Knieper, a Ministry of Defense official, told American negotiators that "a long-range FRG commitment on military procurement in the U.S. was . . . not acceptable - not even 'in principle.'" Large-scale procurement in the United States would alienate important French and British military suppliers and undermine the joint European production programs the Eisenhower administration had supported. The German attitude might be different if missile systems that could deliver nuclear weapons were included in the purchase list, but Knieper admitted that such decisions would have to be made at a much higher level. See memcon, 4 January 1961, "Federal Republic Procurement of Military Equipment in the U.S. to Assist in the Latter's Balance of Payments Problems," Declassified Documents Collection (hereafter referred to as DDC) 1991, no. 2559. See also Dowling to State, 13 January 1961, DDC 1991, no. 1849.
75. Rusk, memo for the president, "German Balance of Payments Proposals and Your Meeting with German Foreign Minister von Brentano on February 17," UPA, National Security Files, Western Europe, 1961-1963, Germany, reel 9, 363; "Points which the president may wish to emphasize in discussion with foreign minister von Brentano," 16 February 1961, UPA, President's Office Files, part 5, Countries file, Germany, reel 8, 738, 1-2; "Draft Aide Memoire for Brentano," 16 February 1961, UPA, President's Office Files, Countries, Germany, reel 8, 731.
76. Memo, Kennedy to Rusk, undated (but probably early February 1961), UPA, President's Office Files, State, reel 23.
77. For a detailed account of the shift in negotiations see Hubert Zimmerman, "Offset and Monetary Policy in German-American Relations during Kennedy's Presidency, 1961-1963," unpublished manuscript. In addition to the offset agreement, the administration successfully pushed the FRG on several fronts connected with the balance of payments. The Germans increased their foreign aid program considerably. They also prepaid $587 million of their postwar debt. Trade restrictions against American poultry were liberalized. The deutschmark was revalued by 5 percent. Most importantly, the Bundesbank was persuaded to hold its reserves in dollars and not gold, a controversial arrangement that the Federal Republic refused to formalize or publicize until 1967. See memo, Rusk to the president, "Recent German Measures Relating to United States Balance of Payments," 9 July 1961, FRUS, 1961-1963 9: 120-21.
78. Memo, Dillon to Kennedy, 14 September 1961, President's Office Files, Departments and Agencies, Treasury, 89, John F. Kennedy Presidential Library, Boston, Massachusetts.
79. Walter Heller, memo for the president, "Current Status of 'Lend-Lease' or 'Mutual Support' Plan for Financing U.S. Troop costs in Germany," 8 September 1961, UPA, President's Office Files, CEA, reel 7.
80. For evidence that the Franco-German bloc came into existence in 1962, and that its policies were meant as a rejection of Kennedy's Berlin and nuclear sharing policies, see Hans-Peter Schwarz, Konrad Adenauer, German Politician and Statesman in a Period of War, Revolution, and Reconstruction (Providence, 1997), esp. 590 and 605.
81. For the best account of both the dispute over Berlin policy and nuclear sharing from the European side see Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 203-65. See also Mayer, Adenauer and Kennedy, 45-74; and Schwarz, Adenauer, 513-712. Schwarz's account is somewhat unbalanced: he calls Kennedy's Berlin strategy the "appeasement" strategy and credits Adenauer for saving Berlin (even while admitting that the German chancellor was prepared to let Berlin fall without a war). For the American side of the story see Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement, 1945-1963 (Princeton, 1999), 251-402. Another good source is the diary entries for 1962 and 1963 in C. L. Sulzberger, The Last of the Giants (New York, 1970).
82. For the best account of both the dispute over Berlin policy and nuclear sharing from the European side see Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 203-65. See also Mayer, Adenauer and Kennedy, 45-74; and Schwarz, Adenauer, 513-712. Schwarz's account is somewhat unbalanced: he calls Kennedy's Berlin strategy the "appeasement" strategy and credits Adenauer for saving Berlin (even while admitting that the German chancellor was prepared to let Berlin fall without a war). For the American side of the story see Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement, 1945-1963 (Princeton, 1999), 251-402. Another good source is the diary entries for 1962 and 1963 in C. L. Sulzberger, The Last of the Giants (New York, 1970).
83. For the best account of both the dispute over Berlin policy and nuclear sharing from the European side see Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 203-65. See also Mayer, Adenauer and Kennedy, 45-74; and Schwarz, Adenauer, 513-712. Schwarz's account is somewhat unbalanced: he calls Kennedy's Berlin strategy the "appeasement" strategy and credits Adenauer for saving Berlin (even while admitting that the German chancellor was prepared to let Berlin fall without a war). For the American side of the story see Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement, 1945-1963 (Princeton, 1999), 251-402. Another good source is the diary entries for 1962 and 1963 in C. L. Sulzberger, The Last of the Giants (New York, 1970).
84. For the best account of both the dispute over Berlin policy and nuclear sharing from the European side see Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 203-65. See also Mayer, Adenauer and Kennedy, 45-74; and Schwarz, Adenauer, 513-712. Schwarz's account is somewhat unbalanced: he calls Kennedy's Berlin strategy the "appeasement" strategy and credits Adenauer for saving Berlin (even while admitting that the German chancellor was prepared to let Berlin fall without a war). For the American side of the story see Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement, 1945-1963 (Princeton, 1999), 251-402. Another good source is the diary entries for 1962 and 1963 in C. L. Sulzberger, The Last of the Giants (New York, 1970).
85. For the best account of both the dispute over Berlin policy and nuclear sharing from the European side see Georges-Henri Soutou, L'alliance incertaine, Les rapports politico-strategiques franco-allemands, 1954-1996 (Paris, 1996), 203-65. See also Mayer, Adenauer and Kennedy, 45-74; and Schwarz, Adenauer, 513-712. Schwarz's account is somewhat unbalanced: he calls Kennedy's Berlin strategy the "appeasement" strategy and credits Adenauer for saving Berlin (even while admitting that the German chancellor was prepared to let Berlin fall without a war). For the American side of the story see Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement, 1945-1963 (Princeton, 1999), 251-402. Another good source is the diary entries for 1962 and 1963 in C. L. Sulzberger, The Last of the Giants (New York, 1970).
86. The administration had ordered a military buildup and authorized direct negotiations with the Soviets. Adenauer and de Gaulle feared that the American policy might lead to a war through miscalculation or dangerous concessions to the Soviets that undermined West European security. Both the French and West German government went to great lengths in the first half of 1962 to block any negotiated settlement with the Soviets over Berlin. See Trachtenberg, A Constructed Peace, 283-351.
87. For a summary of the nuclear question from the European response to the "flexible response" strategy see Schwarz, Adenauer, 663-65; and Soutou, L'alliance incertain, 214-29.
88. For a summary of the nuclear question from the European response to the "flexible response" strategy see Schwarz, Adenauer, 663-65; and Soutou, L'alliance incertain, 214-29.
89. The Europeans feared that by emphasizing conventional forces, the credibility of the U.S. promise to use strategic nuclear weapons against a Soviet attack would be compromised. This would weaken deterrence. And by demanding a monopoly over NATO's nuclear forces, the Kennedy administration appeared to be pursuing the most blatantly hegemonic policies vis-à-vis its allies. If the United States was the only NATO country with strategic nuclear weapons, then Western Europe would be completely dependent on the Americans. The administration tried to save face by offering NATO something called the Multilateral Force. MLF was a State Department proposal to develop a seaborne nuclear force that would be manned by any NATO country that wished to participate. But as the Kennedy administration refused to give up the American veto on the firing of the force, it was of little interest to the French or British, although the Germans were very interested. The French called this whole concept the "Multilateral Farce," and there is some evidence that Kennedy himself agreed with this assessment. For evidence that Kennedy had moved away from supporting MLF by late 1962 see McNamara's comments, "Anglo-American Meeting," 20 December 1962, PREM 11/4229; Anglo-American meeting, 19 December 1962, FRUS, 1961-1965, (Washington, 1994), 13:1097. See also the apparent willingness to trade MLF away if the Soviets offered something meaningful, FRUS, 1961-1963 (Washington, 1995), 7:728 notes, 732, 735, 780-81, 790. Note that Kennedy himself called the MLF a "facade"; see FRUS, 1961-1963 13:499, 173, 367, 502-3.
90. The Europeans feared that by emphasizing conventional forces, the credibility of the U.S. promise to use strategic nuclear weapons against a Soviet attack would be compromised. This would weaken deterrence. And by demanding a monopoly over NATO's nuclear forces, the Kennedy administration appeared to be pursuing the most blatantly hegemonic policies vis-à-vis its allies. If the United States was the only NATO country with strategic nuclear weapons, then Western Europe would be completely dependent on the Americans. The administration tried to save face by offering NATO something called the Multilateral Force. MLF was a State Department proposal to develop a seaborne nuclear force that would be manned by any NATO country that wished to participate. But as the Kennedy administration refused to give up the American veto on the firing of the force, it was of little interest to the French or British, although the Germans were very interested. The French called this whole concept the "Multilateral Farce," and there is some evidence that Kennedy himself agreed with this assessment. For evidence that Kennedy had moved away from supporting MLF by late 1962 see McNamara's comments, "Anglo-American Meeting," 20 December 1962, PREM 11/4229; Anglo-American meeting, 19 December 1962, FRUS, 1961-1965, (Washington, 1994), 13:1097. See also the apparent willingness to trade MLF away if the Soviets offered something meaningful, FRUS, 1961-1963 (Washington, 1995), 7:728 notes, 732, 735, 780-81, 790. Note that Kennedy himself called the MLF a "facade"; see FRUS, 1961-1963 13:499, 173, 367, 502-3.
91. The Europeans feared that by emphasizing conventional forces, the credibility of the U.S. promise to use strategic nuclear weapons against a Soviet attack would be compromised. This would weaken deterrence. And by demanding a monopoly over NATO's nuclear forces, the Kennedy administration appeared to be pursuing the most blatantly hegemonic policies vis-à-vis its allies. If the United States was the only NATO country with strategic nuclear weapons, then Western Europe would be completely dependent on the Americans. The administration tried to save face by offering NATO something called the Multilateral Force. MLF was a State Department proposal to develop a seaborne nuclear force that would be manned by any NATO country that wished to participate. But as the Kennedy administration refused to give up the American veto on the firing of the force, it was of little interest to the French or British, although the Germans were very interested. The French called this whole concept the "Multilateral Farce," and there is some evidence that Kennedy himself agreed with this assessment. For evidence that Kennedy had moved away from supporting MLF by late 1962 see McNamara's comments, "Anglo-American Meeting," 20 December 1962, PREM 11/4229; Anglo-American meeting, 19 December 1962, FRUS, 1961-1965, (Washington, 1994), 13:1097. See also the apparent willingness to trade MLF away if the Soviets offered something meaningful, FRUS, 1961-1963 (Washington, 1995), 7:728 notes, 732, 735, 780-81, 790. Note that Kennedy himself called the MLF a "facade"; see FRUS, 1961-1963 13:499, 173, 367, 502-3.
92. The change between Eisenhower's policy and Kennedy's military policy was more complicated and nuanced than the simple move from a strategy of "massive retaliation" - the immediate and massive use of U.S. nuclear forces against the Soviets in the event of an attack - and flexible response. Eisenhower's views on independent nuclear forces was at times contradictory; he seemed to support the idea of a French and even a West German atomic force, but was unwilling to risk much political capital to do anything about it. And almost every one of his top advisers believed that by the end of the 1950s, the development of Soviet strategic forces that could hit the United States meant that the threat of "massive retaliation" was no longer a viable policy. In fact, most aspects of the flexible response doctrine had their origins in the Eisenhower administration. For his part, Kennedy was not, as the Europeans generally believed, vehemently against the Europeans having independent nuclear forces, although many of his advisers in the White House and State Department certainly were. For a reinterpretation of the origins and real meaning of the flexible response doctrine see Gavin, "The Myth of Flexible Response: United States Strategy in Europe during the 1960s," International History Review Volume XXIII, 4 (December 2001).
93. Much of the changes in strategy had to do with the problematic question of what to do if the Soviets closed off West Berlin. In this respect, the general thrust of Kennedy's policy was not so much different from Eisenhower's; neither believed that the threat of a full-scale nuclear war would be a credible response to a Soviet move on West Berlin. Both presidents wanted to be able to ratchet up the escalation ladder more slowly, demonstrating resolve with each step but giving the Soviets a chance to see U.S. determination and back down. Eisenhower described the whole process as a poker game, and Kennedy simply wanted to have as many chips as possible to play with before having to call. To successfully implement such a calibrated policy, the American president would need strong conventional forces, and he would need complete command and control over the West's nuclear forces. But the important thing to remember here is that this whole strategy was designed with the unique difficulties the Berlin crisis presented - a city within enemy territory, surrounded by Soviet forces, where Khrushchev could control the intensity of the crisis. Absent Berlin, Kennedy, much like Eisenhower, believed that the United States could significantly decrease its conventional forces in Europe and rely on nuclear deterrence alone. For this view see Kennedy-Bundy-Rusk-McNamara meeting, 10 December 1962, FRUS, 1961-1963, michofiche supplement, vol. 13-15, document 27, and Kennedy-McNamara-JCS meeting, 27 December 1962, FRUS, 1961-1963 (Washington, 1996), 8:449, and memorandum for the Record, "Joint Chiefs of Staff Meeting with the president, February 28th, 1963 - Force Reductions in Europe," 28 February 1963, FRUS, 1961-63, 13.
94. Much of the changes in strategy had to do with the problematic question of what to do if the Soviets closed off West Berlin. In this respect, the general thrust of Kennedy's policy was not so much different from Eisenhower's; neither believed that the threat of a full-scale nuclear war would be a credible response to a Soviet move on West Berlin. Both presidents wanted to be able to ratchet up the escalation ladder more slowly, demonstrating resolve with each step but giving the Soviets a chance to see U.S. determination and back down. Eisenhower described the whole process as a poker game, and Kennedy simply wanted to have as many chips as possible to play with before having to call. To successfully implement such a calibrated policy, the American president would need strong conventional forces, and he would need complete command and control over the West's nuclear forces. But the important thing to remember here is that this whole strategy was designed with the unique difficulties the Berlin crisis presented - a city within enemy territory, surrounded by Soviet forces, where Khrushchev could control the intensity of the crisis. Absent Berlin, Kennedy, much like Eisenhower, believed that the United States could significantly decrease its conventional forces in Europe and rely on nuclear deterrence alone. For this view see Kennedy-Bundy-Rusk-McNamara meeting, 10 December 1962, FRUS, 1961-1963, michofiche supplement, vol. 13-15, document 27, and Kennedy-McNamara-JCS meeting, 27 December 1962, FRUS, 1961-1963 (Washington, 1996), 8:449, and memorandum for the Record, "Joint Chiefs of Staff Meeting with the president, February 28th, 1963 - Force Reductions in Europe," 28 February 1963, FRUS, 1961-63, 13.
95. Much of the changes in strategy had to do with the problematic question of what to do if the Soviets closed off West Berlin. In this respect, the general thrust of Kennedy's policy was not so much different from Eisenhower's; neither believed that the threat of a full-scale nuclear war would be a credible response to a Soviet move on West Berlin. Both presidents wanted to be able to ratchet up the escalation ladder more slowly, demonstrating resolve with each step but giving the Soviets a chance to see U.S. determination and back down. Eisenhower described the whole process as a poker game, and Kennedy simply wanted to have as many chips as possible to play with before having to call. To successfully implement such a calibrated policy, the American president would need strong conventional forces, and he would need complete command and control over the West's nuclear forces. But the important thing to remember here is that this whole strategy was designed with the unique difficulties the Berlin crisis presented - a city within enemy territory, surrounded by Soviet forces, where Khrushchev could control the intensity of the crisis. Absent Berlin, Kennedy, much like Eisenhower, believed that the United States could significantly decrease its conventional forces in Europe and rely on nuclear deterrence alone. For this view see Kennedy-Bundy-Rusk-McNamara meeting, 10 December 1962, FRUS, 1961-1963, michofiche supplement, vol. 13-15, document 27, and Kennedy-McNamara-JCS meeting, 27 December 1962, FRUS, 1961-1963 (Washington, 1996), 8:449, and memorandum for the Record, "Joint Chiefs of Staff Meeting with the president, February 28th, 1963 - Force Reductions in Europe," 28 February 1963, FRUS, 1961-63, 13.
96. Bundy to the president, "Action on Nuclear Assistance to France," 7 May 1962, President's Office Files, box 116a, Kennedy Library. See also Paul Nitze, From Hiroshima to Glasnost: At the Center of Decision - A Memoir (New York, 1989), 211.
97. Bundy to the president, "Action on Nuclear Assistance to France," 7 May 1962, President's Office Files, box 116a, Kennedy Library. See also Paul Nitze, From Hiroshima to Glasnost: At the Center of Decision - A Memoir (New York, 1989), 211.
98. See, for example, Sulzberger, The Last of the Giants, 1004-5 for evidence that the administration may have offered France nuclear assistance if it agreed to sign the partial test ban treaty.
99. Dillon, memo for the president, 25 May 1962, National Security Files, Departments and Agencies, Treasury, box 289, Kennedy Library.
100. Jones to State Department, 13 June 1962, UPA, President's Office Files, Treasury, reel 25.
101. Memo of meeting between the president, Ambassador Alphand, M. Malraux, and McGeorge Bundy, 11 May 1962, FRUS, 1961-1963 13: 695-701.
102. Gavin to the State Department, 28 May 1962, ibid., 705-7.
103. Gavin to the State Department, 16 May 1962, ibid., 702-3.
104. President to Gavin, 18 May 1962, ibid., 704.
105. Gavin to Rusk, 12 July 1962, UPA, National Security Files, W. Europe, France. See also Heller, memo to the president, 16 July 1962, UPA, President's Office Files, CEA, reel 9.
106. Memcon, "Payments Arrangements Among the Atlantic Community," 20 July 1962, FRUS, 1961-1963 13:733. See also Ball, memo for the president, "Visit of French Finance Minister," 18 July 1962, UPA, National Security Files, W. Europe, France. For direct indications of Kennedy's willingness to withdraw American troops from Europe - and even completely "haul out" if pushed too far by the French and West Germans - see "Visit to the United States, 9-17 September, 1962," DEFE 13/323, PRO. For Kennedy agreeing with Eisenhower that the United States should reduce its conventional force presence in Europe see "Conversation between President John F. Kennedy and Dwight D. Eisenhower," 10 September 1962, Presidential Recordings, JFKL, transcribed by Erin Mahan.
107. Memcon, "Payments Arrangements Among the Atlantic Community," 20 July 1962, FRUS, 1961-1963 13:733. See also Ball, memo for the president, "Visit of French Finance Minister," 18 July 1962, UPA, National Security Files, W. Europe, France. For direct indications of Kennedy's willingness to withdraw American troops from Europe - and even completely "haul out" if pushed too far by the French and West Germans - see "Visit to the United States, 9-17 September, 1962," DEFE 13/323, PRO. For Kennedy agreeing with Eisenhower that the United States should reduce its conventional force presence in Europe see "Conversation between President John F. Kennedy and Dwight D. Eisenhower," 10 September 1962, Presidential Recordings, JFKL, transcribed by Erin Mahan.
108. A gold guarantee was an American promise to overseas central banks ensuring the gold value of the dollar in the event the United States devalued its currency. One of the reasons central banks did not want to hold too many dollars in their reserves was the fear of these dollars suddenly losing their value it the American government devalued. A gold standstill would be an agreement where central banks holding dollars agree to not purchase gold from the U.S. Treasury for a specified period of time.
109. Memo, Coppock to Johnson, 1 August 1962, DDC 1993.
110. Memo, Kaysen to the president, 6 July 1962, FRUS, 1961-1963 9:138.
111. Memo, Ball to the president, "A Fresh Approach to the Gold Problem," 24 July 1962, Papers of George W. Ball, box no. 15b, "Memorandum to the president on the Gold Problem," Seeley G. Mudd Manuscript Library, Princeton University, Princeton, New Jersey.
112. Dillon, memo for the president, 7 August 1962, Acheson Papers, State Department and White House Adviser, Report to the president on the Balance of Payments, 2-25-63, Truman Library.
113. The tapes of the top meetings to discuss international monetary strategy have recently been made available. The sharpness of the dispute between Dillon and Roosa on one hand and Ball, Kaysen, and Tobin on the other comes out quite clearly. So does Kennedy's frustration at being unable to determine what policy to chose. For transcripts see Tape 11, 10 August 1962, 11:20 A.M. -12:30 P.M., President's Office Files, transcribed by Francis J. Gavin, and Tape 14, 20 August 1962, 4:00-5:30 P.M., President's Office Files, transcribed by Francis J. Gavin.
114. Memo, president for the secretary of the treasury, the undersecretary of state, and chairman of the CEA, 24 August 1962, National Security Files, Department and Agencies, Treasury, 6/62-4/63/289, Kennedy Library.
115. The whole subject of high-level monetary negotiations during the Johnson-Leddy mission was shrouded in mystery and innuendo. When Leddy and Johnson asked Giscard what Chancellor of Exchequer Maudling's thoughts were on the subject, Giscard replied that "the two were in agreement that there should be high level secret discussions of the subject." (Memo from Dillon and Ball to the president, 12 September 1962, with attachment, memo for Dillon and Ball from Johnson and Leddy, 10 September 1962, FRUS, 1961-1963 9:146.) Giscard did not tell Johnson and Leddy what the "subject" actually was. Was it the hoped for initiative to limit gold takings? Giscard didn't say, and the American representatives thought it imprudent to ask. Several days later, British representatives asked the Americans what Giscard had said, and after being told, observed that "the whole affair was mysterious." The next day, French officialssaid the same thing! The American team decided to drop the issue until after the IMF and World Bank meeting, because they believed that "open pressure on the French might lead them to think that political questions could be successfully interjected."
116. See Jacques Rueff, Le lancinant probleme des balance de paiments (Paris, 1965).
117. Press conference, 4 February 1965, from de Gaulle, Discours et messages, vol. 4: "Pour l'effort, Aout 1962-Decembre 1965."
118. De Gaulle's biographer, Jean Lacouture, argues that de Gaulle was interested in attacking the privileges of the Americans during the Kennedy period. See Lacouture, de Gaulle, 381.
119. Alphand, L'etonnement d'etre, 380-81.
120. Memo for the secretary of the treasury, 19 January 1963, UPA, President's Office Files, Treasury, reel 25.
121. Summary record of NSC executive committee meeting, No. 38 (Part II), 25 January 1963, FRUS, 1961-1963 13: 488.
122. For the issues surrounding France's rejection of Great Britain's application to enter the Common Market and de Gaulle's rejection of Kennedy's offer of nuclear assistance see Soutou, L'alliance incertaine, 230-40. In large measure, de Gaulle was reacting to the result of the Anglo-American Nassau conference, where Kennedy offered British prime minister Harold Macmillan the Polaris missile system to replace the Skybolt missile, which had been canceled. Kennedy offered de Gaulle the same weapon; but since he did not have the submarines to fire the weapon, he considered the weapons worthless. It turns out that Kennedy was willing to discuss any aspect of the offer, including helping de Gaulle build the submarines. Marc Trachtenberg argues that the French were genuinely interested in this offer until George Ball essentially sabotaged Kennedy's policy during his January meeting with de Gaulle. See Trachtenberg, A Constructed Peace, 359-70. Kennedy commissioned Richard E. Neustadt to write an in-house history and analysis of the events that led to the disastrous Nassau meeting and subsequent de Gaulle press conference. See the recently declassified "Skybolt and Nassau, American Policy-Making and Anglo-American Relations," 15 November 1963, Papers of Francis Bator, Johnson Library.
123. For the issues surrounding France's rejection of Great Britain's application to enter the Common Market and de Gaulle's rejection of Kennedy's offer of nuclear assistance see Soutou, L'alliance incertaine, 230-40. In large measure, de Gaulle was reacting to the result of the Anglo-American Nassau conference, where Kennedy offered British prime minister Harold Macmillan the Polaris missile system to replace the Skybolt missile, which had been canceled. Kennedy offered de Gaulle the same weapon; but since he did not have the submarines to fire the weapon, he considered the weapons worthless. It turns out that Kennedy was willing to discuss any aspect of the offer, including helping de Gaulle build the submarines. Marc Trachtenberg argues that the French were genuinely interested in this offer until George Ball essentially sabotaged Kennedy's policy during his January meeting with de Gaulle. See Trachtenberg, A Constructed Peace, 359-70. Kennedy commissioned Richard E. Neustadt to write an in-house history and analysis of the events that led to the disastrous Nassau meeting and subsequent de Gaulle press conference. See the recently declassified "Skybolt and Nassau, American Policy-Making and Anglo-American Relations," 15 November 1963, Papers of Francis Bator, Johnson Library.
124. For the origins, meaning, and implications of the Franco-German treaty see Lacouture, de Gaulle, 333-62; Schwarz, Adenauer, 662-75; and Soutou, L'alliance incertain, 241-59.
125. For the origins, meaning, and implications of the Franco-German treaty see Lacouture, de Gaulle, 333-62; Schwarz, Adenauer, 662-75; and Soutou, L'alliance incertain, 241-59.
126. For the origins, meaning, and implications of the Franco-German treaty see Lacouture, de Gaulle, 333-62; Schwarz, Adenauer, 662-75; and Soutou, L'alliance incertain, 241-59.
127. Summary record of NSC executive committee meeting No. 39, 31 January 1963, FRUS, 1961-1963 13: 158.
128. Memo, State to Bundy, "A Proposal for Strengthening our International Financial Position," 24 January 1963, RG 59, SF 1963, FN 12, box 3451, National Archives II, College Park, Maryland.
129. Remarks of President Kennedy to the National Security Meeting, January 22, 1963, FRUS, 1961-1963 13: 486.
130. Summary record of NSC executive committee meeting, No. 38 (Part II), 25 January 1963, ibid., 486-87.
131. Summary record of NSC executive committee meeting, No. 39, 31 January 1963, ibid., 159-61.
132. Summary record of NSC executive committee meeting No. 40, 5 February 1963, ibid., 178.
133. Memorandum for the record, "Joint Chiefs of Staff Meeting with the president, 28 February 1963 - Force Strengths in Europe," 28 February 1963, ibid., 517.
134. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his - albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
135. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his - albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
136. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his - albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
137. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his - albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
138. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his -albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
139. For the idea that U.S.-Soviet relations moved toward "détente" during 1963, which made it possible for the superpowers to cooperate on a range of issues, from Berlin to nuclear proliferation, to the consternation of the Germans, see Mayer, Adenauer and Kennedy; Vladislav Zubok and Constantine Pleshakov, Inside the Kremlin's Cold War: From Stalin to Khrushchev (Cambridge, MA, 1996), esp. 236-74; Schwarz, Konrad Adenauer, esp. the chap. titled "We Are the Victims of American Détente Policy," 687-99; and Trachtenberg, A Constructed Peace, esp. chap. 9. Note the following analysis of superpower relations after the Cuban Missile crisis from Zubok and Pleshakov Inside the Kremlin's Cold War, 271: "By the end of the crisis, Khrushchev began to lean on the idea of joint management of the world with the United States much more than his Communist creed and his - albeit very crude - sense of social justice permitted. . . . The taming of the Cold War, fifteen years after its inception, and almost a decade after Stalin's death, finally happened." As Schwarz points out Adenauer saw these developments as a threat to the Federal Republic's security, "Adenauer again complained bitterly about the American, they would deceive no-one, but they were a people at the mercy of such changing moods! . . . Adenauer's immediate entourage was very familiar with his obsession that the Kennedy administration . . . was prepared to come to an American-Soviet arrangement over Berlin and Germany, despite the Cuba crisis. He became more and more obsessed with this idee fixe as 1963 advanced. Every event aroused his deepest distrust. . . . The lowest point in relations with the United States was reached in August 1963 during the quarrel about the GDR signing the Test Ban Treaty." Schwartz, Adenauer, 666.
140. Memo, Rostow for the president, "Balance of Payments Problem," 4 February 1963, FRUS, 1961-1963 9:161.
141. Memo, Dillon for the president, February 11, 1963, ibid., 163.
142. Reeves, President Kennedy, 431.
143. Transcript of oral history interview with Dean Acheson, 31, Kennedy Library.
144. "In this whole discussion I have not mentioned the possibility of a change in the rate of exchange of the dollar. This is not because there is anything in the nature of the universe or the Constitution or good common sense to prevent the consideration of this matter at an appropriate time. . . . I do not think that time is now. . . . I did not want you, however, to think I thought this subject unmentionable." Acheson to the president, cover letter for Dean Acheson, "Recommendations Relating to United States International Payments Problem," 25 February 1963, President's Office Files, 27, Special Correspondence Series, Kennedy Library.
145. Acheson oral history, Kennedy Library.
146. "Meeting between the president and Mr. Dean Acheson, February 26, 1963, 11 AM, on Balance of Payments," 27 February 1963, FRUS, 1961-1963 9: 46.
147. Ibid., 46.
148. George Ball, memorandum for the president, "Negotiations at Political Level for Supplementary Financing of Balance of Payments Deficit," 2-3, Ball Papers, box 15b.
149. Rostow to Ball, "Negotiating Posture Balance of Payments," 26 March 1963, UPA, President's Office Files, State, reel 24, 1.
150. George Ball, memorandum for the president, "Negotiations at Political Level for Supplementary Financing of Balance of Payments Deficit," 22-2, Ball Papers, box 15b.
151. Memorandum for the record, "Meeting with the president, April 18, 1963, 10:00 A.M. to 12 Noon - Balance of Payments," 24 April 1965, National Security Files, M&M, Meetings with the president, 4/63, 317, Kennedy Library, 4-5. For Ball's proposal to restrict the sale of foreign securities in the United States see George Ball, memorandum for the president, "The Possible Restriction of the Sale of Foreign Securities in United States Markets," 16 April 1963, Ball Papers, box 15b.
152. There is an unsigned memo, perhaps written by the Cabinet Committee on the Balance of Payments, which rejects capital controls and "extraordinary new arrangements" to fund the deficit. Instead, it recommends that the United States "cut down" and "reduce" American contributions to the common defense. Unidentified and unsigned memo, "The Balance of Payments," 26 April 1963, President's Office Files, Departments and Agencies, Treasury, 4/63, 90, Kennedy Library.
153. Memorandum from the president to the Cabinet Committee on the Balance of Payments, 20 April 1963, President's Office Files, Departments and Agencies, Treasury, 4/63, 90, Kennedy Library.
154. Memorandum for the record, "Meeting with the president, April 18, 1963, 10:00 A.M. to 12 Noon - Balance of Payments," 24 April 1963, National Security Files, M&M: Meetings with the President, 4/63, 317, Kennedy Library.
155. Kitchen to Johnson, "Present Status of Defense Balance of Payments Problems Affecting State Department's Interests," 4 March 1963, RG 59, SF 1963, FN 12, box 3451, 2.
156. See, for example, Brussels to State, 28 May 1963, RG 59, SF 1963, Def 6, box 3747, Paris to State, 23 May 1963, RG 59, SF 1963, Def 6, box 3747.
157. Rusk to Missions in the NATO capitals, 18 June 1963, FRUS, 1961-1963 9: 596-97.
158. Memo, Johnson to Rusk, "Political Effect of Troop Withdrawals from Europe," 17 May 1963, and attached report, "The Implications for US National Interests of American Military Retrenchment in Europe," RG 59, SF 1963, Def 6-8, box 3749.
159. Memo for the record, "Troop Withdrawals," 4 September 1963, RG 59, SF 1963, Def 6-8, box 3749. See also memo, McNamara to the president, "Reduction in Department of Defense Expenditures Entering the International Balance of Payments," 16 July 1963, FRUS, 1961-1963 9:73.
160. Memo for the record, 12 September 1963, FRUS, 1961-1963 9:87.
161. Memo, Rusk to Kennedy, "Department of Defense Proposals for further Reductions in Balance of Payments Drain," undated, ibid., 89-93. See also Popper to Schaetzel, "Points for Discussion with Ambassador Finletter," 19 September 1965, RG 59, SF 1963, Def 6, box 3747.
162. Memo, Rusk to Kennedy, "Department of Defense Proposals for further Reductions in Balance of Payments Drain," undated, ibid., 89-93. See also Popper to Schaetzel, "Points for Discussion with Ambassador Finletter," 19 September 1965, RG 59, SF 1963, Def 6, box 3747.
163. Memo, "Meeting on Defense Proposals for further reductions in balance of payments drain, 19 September 1963, 4 PM," 23 September 1963, FRUS, 1961-1963 9: 98.
164. Remarks by Roswell Gilpatric, deputy secretary of defense, at the Annual UPI Editors and Publishers Conference, 19 October 1963, RG 59, SF 1963, Def 6-8, box 3749.
165. John G. Norris, "Pentagon to Seek Showdown on Basic NATO Strategy," Washington Post, 20 October 1963.
166. Johnson to Rusk, "U.S. Policy on our Public Position on Troop Withdrawals," October 21, 1963, RG 59, SF 1963, Def 6-8, box 3749.
167. Ibid.
168. Memo, Bundy to Gilpatric, 18 October 1963, National Security Files, Departments and Agencies, Defense, box 274, Kennedy Library.
169. Ibid. See also Weiss, memorandum for the record, 24 October 1963, RG 59, SF 1963, Def 6, box 3747.
170. Telegram, State Department to embassy in Germany, 30 July 1963, FRUS, 1961-1963 9:184-85. See also 184, n. 1. See also telegram, State Department to embassy in Germany, 11 July 1963, ibid., 176.
171. Telegram, State Department to embassy in Germany, 30 July 1963, FRUS, 1961-1963 9:184-85. See also 184, n. 1. See also telegram, State Department to embassy in Germany, 11 July 1963, ibid., 176.
172. Memo of conversation, "Military Offset Arrangements; Developmental Assistance Activities," 15 November 1962, ibid., 157.
173. Karen Erika Donfried, The Political Economy of Alliance: Issue Linkage in the West German-American Relationship (Ph.D. diss., The Fletcher School of Law and Diplomacy, 1991), 110.
174. Kennedy Library Tape No. 102/A38, 30 July 1963 meeting, second side of cassette no. 1, right after first excision (43, 26).
175. Gesprach des Botschafters Freiherr von Welck mit Staatspasident Franco in 29 Madrid, May 1963, Akten zur Auswartigen Politik der Bundesrepublik Deutschland (Munich, 1963), vol. 1, no. 185.
176. Ibid., no. 185, footnote 9.
177. Memo of conversation, "Trade and Fiscal Policy Matters," 24 June 1963, FRUS, 1961-1963 9: 170.
178. Memcon, "U.S. Troop Reductions in Europe," 24 September 1963, ibid., 187.
179. Gesprach des Bundeskanzlers Adenauer mit dem amerikanischen Verteidigungsminister McNamara, 31 July 1963, Akten zur Auswartigen Politik der Bundesrepublik Deutschland (Munich, 1963), vol. 2, no. 257.
180. See the sources and Adenauer quote in footnote 77.
181. Kennedy-Bundy-Rusk-McNamara meeting, 10 December 1962, FRUS, 1961-1963, vols. 13-15, microfiche supplement, document 27.
182. See Schwarz, Adenauer, 688, "This was linked to a situation of considerable change in the international political scene, which was considerably altered in the spring of 1963. Kennedy and Khrushchev drew the same conclusions from the Cuban crisis. After they had stared into the abyss of nuclear war, they believed it advisable to turn to détente. . . . This meant, that in Europe, the Soviet Union must also be prepared not to make any more threats to the Western allies' encalve of Berlin. The acceptance of the GDR and the Wall were also the price of détente. U.S. and British readiness for an agreement in arms control also had to be taken into account; this would be at the cost of basic German positions that until then had been vigorously defended" (emphasis added).
183. For a document showing the Germans analyzing and weighing all their foreign policy options, but suggesting that the FRG had little choice but to follow the American line, see "Aufzeichnung des Staatssekretars Carstens," 16 August 1963, Akten zur Auswartigen Politik der Bundesrepublik Deutschland (Munich, 1994), vol. 2, no. 306.
184. This quote is taken from Hubert Zimmerman, "Dollars, Pounds, and Transatlantic Security: Conventional Troops and Monetary Policy in Germany's Relations to the United States and the United Kingdom, 1955-1967" (Ph.D. diss., European University Institute, 1997). Original document is from the Papers of George McGhee, 1988 add, box 1, memorandum on von Hassel Rusk talks, 10 October 1963.
185. Background Paper, "Germany and the U.S. Balance of Payments," 20 December 1963, National Security Files, Country File, Germany, box 190, Johnson Library. See also Soutou, L'alliance incertaine, 265.
186. Brief Talking Points on Offset Agreement, 26 December 1963, National Security Files, Country File, Germany, box 190.
187. The story of the battle within the West German CDU/CSU parties over foreign policy is told in Schwarz, Adenauer, 676-98. There were many other issues involved in Adenauer's removal from the chancellorship in the fall of 1963, including the infamous "Spiegal" affair. But it is clear that Ludwig Erhard understood the implications of Adenauer's turn toward France, a policy he reversed upon entering office. Part of this reversal included an affirmation of the U.S. troop-offset link.
188. "Excerpt from Proposed Speech by Secretary Rusk at Frankfurt, Germany, on Sunday, 27 October 1963," RG 59, SF 1963, Def 6-8, box 3749.
189. "President's news conference statements on US Troop levels was widely covered in Saturday's German press under such headlines as, 'Kennedy puts an end to speculation' (Die Welt), Kennedy decides against troop withdrawals from Germany' (Frankfurter Allgemeine Zeitung); and 'Troops remain in Germany' (Deutsche Zeit Ung)." Bonn to secretary of state, 2 November 1963, RG 59, SF 1963, Def 6-8, box 3749.
190. McNamara to the president, 19 September 1966, Papers of Francis Bator, box 21. Also in National Security Files, Trilateral Negotiations and NATO, box 50, Johnson Library.
191. The transatlantic bargain between the United States and the Federal Republic of Germany would be threatened in 1966 and 1967, until a new arrangement was negotiated during the Trilateral Talks. See Gavin, "Defending Europe and the Dollar," chap. 5; and Gregory Treverton, The Dollar Drain and American Forces in Germany (Athens, 1978).
192. The transatlantic bargain between the United States and the Federal Republic of Germany would be threatened in 1966 and 1967, until a new arrangement was negotiated during the Trilateral Talks. See Gavin, "Defending Europe and the Dollar," chap. 5; and Gregory Treverton, The Dollar Drain and American Forces in Germany (Athens, 1978).
193. There are other historical examples of the interconnectedness of monetary and security policy in international relations. As Marc Trachtenberg and Stephen Schuker demonstrated in their studies, the Franco-German clash over reparations after WWI - an ostensibly economic clash that on the surface seemed to be over highly technical monetary issues - in fact masked a fundamental dispute over the shape of the balance of power in Europe after the First World War. See Stephen Schuker, The End of French Predominance in Europe: The Financial Crisis of 1924 and the Adoption of the Dawes Plan (Chapel Hill, 1976); and Marc Trachtenberg, Reparation in World Politics: France and European Economic Diplomacy, 1016-1923 (New York, 1980).
194. There are other historical examples of the interconnectedness of monetary and security policy in international relations. As Marc Trachtenberg and Stephen Schuker demonstrated in their studies, the Franco-German clash over reparations after WWI - an ostensibly economic clash that on the surface seemed to be over highly technical monetary issues - in fact masked a fundamental dispute over the shape of the balance of power in Europe after the First World War. See Stephen Schuker, The End of French Predominance in Europe: The Financial Crisis of 1924 and the Adoption of the Dawes Plan (Chapel Hill, 1976); and Marc Trachtenberg, Reparation in World Politics: France and European Economic Diplomacy, 1016-1923 (New York, 1980).
195. For example, what is the real relationship between the monetary chaos of the 1920s and 1930s, the collapse of the international monetary system, the intensification of international political rivalry, and the origins of the Second World War in both Asia and Europe?