7. Lyndon Johnson, The Vantage Point (New York: Holt, Rinehart and Winston, 1971), 315.
8. Sir Alec Cairncross, Sterling in Decline: The Devaluations of 1931, 1949 and 1967, 2nd. ed. (New York: Palgrave Macmillan, 2003), 191.
9. The Gold Pool loss figures come from Federal Open Market Committee meeting minutes, November 27, 1967, 3.
10. When the Algerian gold sale was reported in the press, the amount was put at “more than $100 million”; New York Times, December 11, 1967. Minutes from the Federal Reserve Open Market Committee put the figure at $150 million.
11. Francis J. Gavin, Gold, Dollars & Power: The Politics of International Monetary Relations 1958–1971 (Chapel Hill: University of North Carolina Press, 2004), 3. A detailed account of the often acrimonious debates leading the committee to recommend capital controls is in James E. Anderson and Jared E. Hazleton, Managing Macroeconomic Policy: The Johnson Presidency (Austin: University of Texas Press, 1986), 197ff.
12. The remarkable itinerary of Johnson’s December 1967 trip is recalled in Sid David, “When LBJ Took a Flying Leap at Peace,” Washington Post, December 24, 2007.
13. Trowbridge’s remark is in “No ‘Basic Change’—Controls First for U.S.—No Time Limit Set for Their Duration,” New York Times, January 2, 1968.
14. The President’s News Conference at the LBJ Ranch, January 1, 1968, The Johnson Presidential Press Conferences (New York: Earl M. Coleman Enterprises: 1978), 2:881–888.
15. “Travelers and Agents Dismayed by Johnson’s Call for Cutbacks,” New York Times, January 2, 1968.
16. Milton Friedman, “The Price of the Dollar,” Newsweek, January 29, 1968, 72.
17. Report on Our European Balance of Payments Trip, January 7, 1968, Papers of Francis M. Bator, “B/P—Katzenbach & Deming, January 1968,” Box 17, LBJL.
18. See, for example, Benjamin Read, “Memorandum for Mr. Walt W. Rostow,” January 29, 1968, in Papers of Anthony Solomon, Box 22, Folder 4 (Balance of Payments Program 1), LBJL.
19. “The Latest Gold Rush,” The Economist, March 9, 1968, 58.
20. Humphrey to Barefoot Sanders, March 13, 1968, Papers of Barefoot Sanders, Box 29, Tax Bill 1/68–3/68 file, LBJL. Cited in Julian E. Zelizer, The Fierce Urgency of Now: Lyndon Johnson, Congress, and the Battle for the Great Society (New York: Penguin Press, 2015), 287–288.
21. Nearly a quarter of the Senate did not cast a vote on the gold cover legislation. Several senators “paired” their votes—a yea combining with a nay and agreeing not to formally vote—and nine Democrats (including Ted and Bobby Kennedy and Walter Mondale) acknowledged support but did not cast votes.
22. Javits, however, voted with the administration on the gold cover legislation.
23. Congressional Record—Senate, March 12, 1968, 6162–6163.
24. “Swiss Bankers Close Counters Early, But Say Gold Orders Continue Rise,” Washington Post, March 15, 1968.
25. Cable from Harold Wilson to President Johnson, March 14, 1968, Papers of Francis M. Bator, “Gold Crisis, March 13–16, 1968, FMB Washington Trip,” Box 10, LBJL.
26. “10 at Washington Parley Seek to Solve Gold Crisis,” New York Times, March 17, 1968.
27. Joseph W. Barr Oral History Interview II, 1/16/70, by Joe B. Frantz, LBJL, 11.
28. Francis Gavin has done at least as much archival work on the March 1968 gold crisis as any other scholar. These quotes come from chapter 7 of Gold, Dollars & Power. I have relied on his work throughout this chapter as a supplement to my own archival research. Another valuable source is Robert M. Collins, “The Economic Crisis of 1968 and the Waning of the ‘American Century,’ ” The American Historical Review 101, no. 2 (April 1996): 396–422; however, some important Johnson material has come to light since Collins’s article was published.
29. T. P. Nelson, “Memorandum for the Secretary,” June 14, 1968, Papers of Henry Fowler, Box 83, “Domestic Economy: Gold” Folder, LBJL.
30. Robert A. Gilbert, Gold Mining Shares: An Institutional Study (New York: Investors’ Press, 1968), 16.
31. Murray Rothbard, What Has Government Done to Our Money? 4th ed. (Auburn, AL: Ludwig von Mises Institute, 1990), 88–89.
32. See Skousen’s essay “Murray Rothbard as Investment Advisor” in Man, Economy and Liberty: Essays in Honor of Murray N. Rothbard, ed. Walter Block and Llewellyn H. Rockwell Jr. (Auburn, AL: Ludwig von Mises Institute, 2007).
33. William F. Rickenbacker, Wooden Nickels or, the Decline and Fall of Silver Coins (New Rochelle, NY: Arlington House, 1966), 9, 156–157.
34. As of this writing, the Free Enterprise Institute still exists as a collection of online study material. Its Web site is at http://www.fei-ajg.com/index.html#aboutFEI.
35. Brian Doherty gives a succinct account of Galambos’s influence and eccentricities in Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (New York: Public Affairs, 2007), 323–326. A firsthand recollection from his close associate Alvin Lowi Jr. is in Walter Block, I Chose Liberty: Autobiographies of Contemporary Libertarians (Auburn, AL: Ludwig von Mises Institute, 2011), 200–205. The story about Galambos’s putting money in a jar every time he said the word liberty comes from Jerome Tuccille, It Usually Begins With Ayn Rand (San Francisco: Fox & Wilkes, 1971), 62. Harry Browne’s warts-and-all portrait of “Andrew Galambos—the Unknown Libertarian” was published in Liberty, November 1997.
36. Don and Barbie Stephens, The Survivor’s Primer & Updated Retreater’s Bibliography (Glendale, CA: Stephens Printing, 1976), 11.
37. Harry Browne, How You Can Profit from the Coming Devaluation (New Rochelle, NY: Arlington House, 1970), 85–86.
Chapter 9: This Time for Real
1. Onno de Beaufort Wijnholds, Gold, the Dollar and Watergate (New York: Palgrave Macmillan, 2015), 88–89.
2. Memorandum, “Limited Gold Convertibility in a Cooperative Framework,” William B. Dale to Paul Volcker, March 10, 1969, Record Group 56, Department of the Treasury office for the undersecretary of monetary affairs, Box 11, Folder “Gold,” NARA.
3. Dale was interviewed by Thomas Forbord and cited in his 1980 Harvard PhD dissertation, “The Abandonment of Bretton Woods: The Political Economy of U.S. International Monetary Policy,” 244.
4. The unnamed official was interviewed by Joanne Gowa for her valuable account Closing the Gold Window: Domestic Politics and the End of Bretton Woods (Ithaca, NY: Cornell University Press, 1983), 69.
5. Charles Ashman, Connally: The Adventures of Big Bad John (New York: William Morrow, 1974), 207–208.
6. Charles A. Coombs, The Arena of International Finance (New York: John Wiley & Sons, 1976), 219. Coombs’s clashes with Connally make him perhaps a biased observer; still, Connally objectively exhibited disdain for international monetary niceties on many occasions.
7. Connally’s speech “Mutual Responsibility for Maintaining a Stable Monetary System” was published in the Department of State Bulletin, July 12, 1971.
8. Nixon’s first discussion with Connally about joining him on the 1972 presidential ticket appears to have been on July 19, 1971; see Haldeman’s entry for that day in The Haldeman Diaries: Inside the Nixon White House (New York: Putnam, 1994).
9. Hendrik Houthakker, “The Breakdown of Bretton Woods,” in Economic Advice and Executive Policy: Recommendations from Past Members of the Council of Economic Advisers, ed. Werner Sichel (New York: Praeger, 1978).
10. Louis Harris, “Muskie Still Leading Nixon,” Chicago Tribune, July 19, 1971.
11. I have relied throughout this chapter on Allen Matusow’s comprehensive book Nixon’s Economy: Booms, Busts, Dollars and Votes (Lawrence: University Press of Kansas, 1998).
12. James Reston Jr., The Lone Star: The Life of John Connally (New York: Harper & Row, 1989), 396. Reston’s source was Jim Smith, who lobbied Congress for Treasury in the early 1970s.
13. “Contingency Planning: Options for the International Monetary Problem,” March 14, 1971. Papers of Paul Volcker, New Yor
k Federal Reserve, Box 0108477, 57–58.
14. “Shift on Monetary Set-Up Is Proposed in the House,” New York Times, June 4, 1971.
15. Volcker, “Contingency Planning,” 52.
16. FRUS, 1969–1976, vol. 3, document 157.
17. Thomas Forbord, “The Abandonment of Bretton Woods: The Political Economy of U.S. International Monetary Policy” (PhD diss., Harvard University, 1980), 249.
18. Richard Nixon, Six Crises (New York: Touchstone, 1990), 309–310.
19. Nixon conversation 545-1, July 24, 1971.
20. “The Basis for Lasting Prosperity,” address in the Pepperdine College Great Issue Series at the Beverly Hilton Hotel, Los Angeles, December 7, 1970, https://fraser.stlouisfed.org/title/?id=449#!7961, accessed on September 6, 2015.
21. Bob Woodward, The Last of the President’s Men (New York: Simon and Schuster, 2015), 74.
22. See, for example, Burton A. Abrams, “How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes,” The Journal of Economic Perspectives 20, no. 4 (Fall 2006): 177–188. Abrams asserts bluntly: “Richard Nixon demanded and Arthur Burns supplied an expansionary monetary policy and a growing economy in the run-up to the 1972 election.”
23. Statement by Arthur F. Burns, Chairman, Board of Governors of the Federal Reserve System, before the Joint Economic Committee, July 23, 1971, 2–3.
24. Nixon conversation 545-3.
25. Charles Colson, Born Again (Old Tappan, NJ: Chosen Books, 1976), 62–63. Colson’s account of the spring and summer of 1971 seems at best garbled. For example, he says he attended the July 24 meeting in which Nixon recommended that Colson plant negative stories about Burns; the White House tape shows otherwise. Burns wrote in his diary that in 1974, Colson told him about a plot to smear Burns hatched on the presidential yacht Sequoia, with Colson, Haldeman, Caspar Weinberger, and others in attendance. However, Colson’s book places the Sequoia trip in May, too early to have been retaliating for Burns’s July testimony. Nonetheless, Colson’s account of leaking the story to the Journal is credible.
26. “White House Hints It Plans Attack on Reserve Board’s Independence,” Wall Street Journal, July 29, 1971.
27. Haldeman Diaries, 332.
28. Ibid., 335–336.
29. The details about Volcker’s plans come from William Silber, Volcker: The Triumph of Persistence (New York: Bloomsbury Press, 2012), 82.
30. Paul Scott, “Devaluation of Dollar Seen As a Possibility,” Lebanon Daily News, August 6, 1971, 17.
31. Haldeman Diaries, August 9, 1971. Nixon and Haldeman thought presidential adviser Pete Peterson was behind the leak.
32. Transcript of Executive Office Building tape, August 12, 1971, in The Nixon Tapes: 1971–1972, ed. Douglas Brinkley and Luke Nichter (Boston: Houghton Mifflin Harcourt, 2014), conversations 562-6.
33. Safire wrote one of the first eyewitness accounts of the Camp David weekend in Before the Fall: An Inside View of the Pre-Watergate White House (New York: Da Capo Press, 1975), 509–528. Haldeman’s recollections were published in his Diaries. Another useful, if secondhand, account of the meeting is Henry Brandon’s The Retreat of American Power (New York: Doubleday, 1973).
34. Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969–1974, ed. Robert Ferrell (Lawrence: University Press of Kansas, 2010), entry for July 8, 1971, 47–48.
35. Before the Fall, 527.
36. Richard Nixon, Address to the Nation Outlining a New Economic Policy: “The Challenge of Peace,” August 15, 1971.
37. Eugene Rostow, “Devaluation by Agreement, Not Fiat,” New York Times, September 5, 1971.
38. Coombs made his comment in a debate with Milton Friedman, reproduced in The Balance of Payments: Free Versus Fixed Exchange Rates (Washington, DC: American Enterprise Institute, 1967), 185.
39. Securities and Exchange Commission Litigation Release No. 6638, December 12, 1974.
40. “ ‘Colossal’ Fraud in Coins Reported,” New York Times, July 11, 1974.
41. James C. Treadway Jr., “SEC Enforcement Techniques: Expanding and Exotic Forms of Ancillary Relief,” Washington & Lee Law Review 32 (1975): 649.
42. Harry Browne, You Can Profit from a Monetary Crisis (New York: Macmillan, 1974), 5, 142, 240.
Chapter 10: Legal at Last
1. 93rd Congress, 1st session, H.R. 435.
2. I am grateful here for the concise but detailed summary provided by Edwin J. Feulner Jr., “How the Gold Bill Was Passed,” Euromoney, November 1974, pp. 47–48.
3. “Bill Seeks Legal Gold Ownership,” Chicago Tribune, June 7, 1971.
4. Crane’s gold coin collection was revealed in Jack Anderson’s Washington Post column “Washington Merry-Go-Round,” January 6, 1975.
5. See the interview with former Crane aide Ken MacKenzie in 100 Voices: An Oral History of Ayn Rand (New York: Penguin, 2010), “1970s” section.
6. Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969–1974, ed. Robert Ferrell (Lawrence: University Press of Kansas, 2010), September 10, 1971 entry, 55.
7. “The Winners and Losers from Devaluation,” Time, February 26, 1973.
8. Memorandum for the President, FG 56, George Shultz papers, Box 6, file “Gold Sales,” NARA.
9. Treasury Undersecretary Paul Volcker to Wright Patman, chairman, House Banking and Currency Committee, July 13, 1973.
10. See, for example, Secret Diary of Arthur Burns, March 17, 1974 entry, 121–122.
11. Department of the Treasury News Release, WS-27, June 11, 1974.
12. Federal Open Market Committee meeting, Memorandum of Discussion, January 20–21, 1975.
13. George Mahon, quoted in “Congress Rejects, then Approves IDA Funds,” CQ Almanac 1974, 30th ed., 517–519.
14. “House Curb on Aid ‘Disaster’ for Poor, McNamara Says,” New York Times, January 25, 1974.
15. Treasury Secretary William Simon to Federal Reserve chair Arthur Burns, FRUS, vol. 31, document 65. The letter is undated, but it refers to the Senate vote as “yesterday,” implying that it was sent on May 30.
16. Congressional Record—House, July 2, 1974, 22008.
17. Congressional Record—House, July 2, 1974, 22003.
18. See FRUS, vol. 31, Document 68. Also, Burns wrote in his diary for April 4, 1974, that Shultz had told him that Ash “is heavily involved in gold stocks.” Ash and a business partner owned a ranch in Nevada that would later be sold to Newmont Mining and help that company dramatically improve its gold production in the 1980s. See Water Guzzardi Jr., “The Huge Find in Roy Ash’s Backyard,” Fortune, December 27, 1982, 48–65.
19. Arthur Burns to William Skidmore, August 9, 1974. White House Records Office: Legislation Case Files, Box 1, “8/14/74 S2665 US Contribution to the International Development Association” file, GRFL.
20. FRUS, vol. 31, document 71.
21. Feulner, “How the Gold Bill Was Passed,” 48.
22. Transcripts of terHorst’s press briefings are in Box 1 of the Ron Nessen file, GFL. The one for August 14 can be found online at http://www.fordlibrarymuseum.gov/library/document/0151/1671247.pdf. TerHorst lasted as press secretary only a month; he resigned in protest over Ford’s pardon of Nixon.
23. “Gold Rush Beginning at Canadian Banks,” New York Times, March 2, 1974.
24. “Big Board Approves Gold-Bar Sales Plan,” New York Times, August 5, 1974.
25. Ford, like his immediate predecessor, displayed little interest in the generic question of whether or not individuals ought to be able to purchase and own gold. His aides were clearly driving the policy. In mid-November, Ford sent a handwritten note to Treasury Secretary Simon: “What are we doing + when on the gold purchase + sale matter?,” prompting Simon to brief the president again on the matter. President’s Handwriting File, Subject File, Box 19, Finance—Gold, GRFL.
26. Memorandum From Secretary of the Treasury Simon to President Ford, November 18, 1974. FRUS, 1969–1976, vol. 31, document 77.
> 27. FRUS, Foreign Economic Policy, 1973–1976, vol. 31, document 76.
28. Harkin comment in “There’s Gold in Fort Knox,” Los Angeles Times, September 24, 1974.
29. A copy of Conlan’s telex message is in the William Simon papers at Lafayette College in Easton, Pennsylvania, Series 3B, Drawer 23, Folder 1, “Gold.” A stamp indicates that Simon saw the message.
30. Accountability and Physical Controls of the Gold Bullion Reserves, FOD-75-10, U.S. Government Accountability Office, February 10, 1975. Well into the twenty-first century, there are goldbugs who insist that the members of Congress and the GAO were duped into mistaking fake gold bars for real ones, or that the actual weight of the bars was not as reported.
31. Pool Report on Ford’s Morning Skiing, December 31, 1974, White House Press Releases, Box 6, GFL.
32. “Gold Sales Find Scant Response from U.S. Buyers,” New York Times, January 1, 1975.
33. The conflicting state approaches are described in Neal S. Solomon and Linda D. Healy, “State Attempts to Tax Sales of Gold Coin and Bullion in the United States: The Constitutional Implications,” Boston College International and Comparative Law Review (1982), 297–344.
34. “The Biggest Gold Market: Futures,” New York Times, August 12, 1975.
35. FRUS, vol. 31, document 80.
36. Of course, another perspective was possible. A rising gold price could also coax the Soviet Union into selling its gold reserves—as did happen in the 1980s—which could be seen as a strategic gain for the United States.
37. See “Big Boom in a Barbarous Relic,” Time, February 26, 1979; and “U.S. Finds Few Gold Buyers; Accepts Bids of $153 to $185,” New York Times, January 7, 1975.
38. Details about the Krugerrand come from A Comprehensive Guide to the Krugerrand, a pamphlet published by the bullion dealership organization GoldCore in 2013.
39. “Business Briefly,” Broadcasting, July 12, 1976, 9.
40. A very useful summary of antiapartheid activists targeting Krugerrand advertising is by Barbara Demick, “An Ounce of Love?” More, December 1977, 25.
41. “The Pedigreed Gold System: A Good System—Why Spoil It?” Report on the Subcommittee on International Exchange and Payments of the Joint Economic Committee, Congress of the United States, December 1969, 5.
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