Documents / FOIA release
This Top Secret study by the Interdepartmental Coordinating Group on Germany and Berlin, dated July 12, 1961, and released by the Central Intelligence Agency, answers NSC Directive No. 58 of June 30, 1961. It sets out courses of action for the Berlin crisis but does not judge their merits. It covers imminent presidential decisions, a three-phase timetable running to January 1, military preparations and mobilization, covert action, economic sanctions, public information, negotiating positions and checkpoint procedures for East German personnel.
“Cooper”8 pages
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# SECRET # Appendix B The Swiss also are increasingly cooperating, but there are limits to the extent to which they will be willing to hold dollars rather than gold. A moderate build-up in gold reserves of the primary producing countries should not in itself occasion great concern on our part. Movement of funds out of Germany, as a result of the Berlin crisis, could indirectly occasion a drain of gold from the United States, if the funds were moved to countries whose central banks are less willing than the Bundesbank to hold their international reserves in dollars. The additional credit facilities in the International Monetary Fund can hardly be expected to become available before the end of 1961 at the earliest. It is possible that in the event of emergency some special ad hoc arrangements could be made, but probably not in sufficient magnitude to deal with a very large speculative drain of U.S. gold. The United States has taken action to make the holding of gold abroad for hoarding illegal by persons subject to U.S. jurisdiction. Demands for gold for hoarding may continue to come from the Middle East, the Far East and Continental Europe, and might push the price of gold higher on the London Gold Market. As in the case of the last quarter of 1960, such a development can contribute to speculation against the dollar, and decisions would have to be taken as to whether or not to permit a premium price to develop. The main danger in a gold outflow arises from the fears that might be generated if the United States lost $2 or $3 billion of gold and approached the 25 percent gold cover level. While we still have about $5 1/2 billion in free gold above this limit, foreign countries may be concerned that we would apply exchange restrictions rather than break through this level. The President made clear in his State of the Union message last January that we were prepared to utilize our full gold reserves, if necessary, to support the dollar. At the present time legal authority exists for the temporary suspension of the gold cover requirement. This authority is in the hands of the Federal Reserve Board, and the Board feels that this power was intended by the Congress to be used only for a very short period, and that Congressional action to regularize any such use would be necessary as soon as it were possible to do so. Congressman Multer proposed at this Session a bill which would eliminate the gold cover requirement, but
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FOIA release, from the cia-readingroom collection. The PDF is mirrored here; the original link is above. The text was read from the page images by GLM-OCR; expect the odd misread word. 163 pages are in the text index: search them above, or from the library's search.