Foreign relations of the united states 1969–1976 volume XXXVII energy crisis, 1974–1980 department of state washington
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Telegram From the Department of State to the Embassy in
Washington, November 12, 1974, 0225Z.
248868. Subject: Response to Giscard Initiative. For the Charge´.
1. You should transmit the following letter to Sauvagnargues:
2. Begin text: Dear Mr. Foreign Minister: I wish to thank you for
your letter of explanation on President Giscard’s proposals for a
We also appreciated the talks Mr.
Brunet had in Washington.
Source: Ford Library, National Security Adviser, Presidential Country Files for
Europe and Canada, Box 4, France—State Department Telegrams from SECSTATE–
NODIS (1). Confidential; Immediate; Nodis. Drafted by Hartman, cleared by Enders and
Sonnenfeldt, and approved by Kissinger.
On October 23, Sauvagnargues wrote to Kissinger: “I wanted to let you know that
the President of the Republic will mention, during his press conference tomorrow, the
problem of energy, and will propose the convening of a conference grouping a certain
number of states which produce oil and a certain number of industrial consumer states as
well as certain non-industrial consumers. The President considers that it is indispensable
to put the good will of the producing states to the test.” (National Archives, RG 59, Cen-
tral Foreign Policy Files, P820121–1459)
On November 1, Sauvagnargues sent a message to Kissinger, informing him that
he wanted Brunet to travel to Washington on November 3 to “make clear” the French
“point of view.” (Telegram Tosec 459/240276 to Islamabad; ibid., Central Foreign Policy
Files, D740312–0249) Kissinger responded that he was “concerned” about the French pro-
posal, in both substance and timing, in that “it was announced without any prior consul-
tation” with the United States. (Telegram Secto 363/4 from Isfahan, November 2; ibid.,
D740333–1058) Ingersoll reported that, in their November 5 meeting in Washington,
Brunet began by giving him a “‘non-paper’ explaining French reasons for calling multi-
lateral energy conference and its relationship to other aspects of an overall energy
strategy,” and in subsequent oral points went “beyond earlier French presentations and
in some cases appeared to be attempts to respond to initial US criticism.” (Telegram
Tosec 717/243012 to Rome, November 5; ibid., D740316–0548)
August 1974–April 1975 71
3. As you know, we have always favored a producer-consumer di-
alogue that is well-prepared and has some prospect for a constructive
outcome. It has been our view that such an outcome requires the devel-
opment of consumer solidarity in the fields of emergency sharing, con-
servation and financial management. We have felt that these were nec-
essary ingredients and should move in parallel with the preparation of
positive proposals to put before the producers.
4. We intend to proceed with this approach in the IEA and other fo-
rums and look forward to exchanging ideas with the French Govern-
ment as well at an appropriate time when our thoughts are in more
5. I have read an account of your speech in the National Assembly
and I am disturbed by the fact that another French Foreign Minister has
once again raised the specter of condominium. I do not understand the
sensitivity to the June 22, 1973, agreement. It is never invoked or even
referred to in the terms you used by anyone other than France. This is
particularly regrettable because of the authoritative and solemn com-
ments I made at last year’s NATO Ministerial meeting in Brussels in re-
sponse to your predecessor’s statements.
I take little comfort in the im-
proved tone of our relations if so basic a suspicion remains and is
promoted in public. In our interdependent world, Europe has as much
or more interest in influencing American decisions as we do in influ-
encing yours. I greatly fear for all our futures if we cannot overcome
these barren philosophical disputes. We are facing a crisis in the West
where all our energies must be devoted to constructive cooperation.
Domination is not the issue; survival is.
The November 6 speech included a section on U.S.-Soviet relations in which the
French Foreign Minister said: “Recent history, moreover, has shown the limits of the June
22, 1973 agreement by which the United States and the USSR appear to have sought to
arrogate to themselves a kind of right to arbitrate the difficulties of others. The super
powers showed themselves powerless to prevent the outbreak of conflicts, including one
which could have, and still can, by its consequences, endanger world peace.” (Telegram
26518 from Paris, November 8; ibid., D740321–0774) The U.S.-Soviet accord to which Sau-
vagnargues referred is the Agreement on the Prevention of Nuclear War.
At the December 10, 1973, session, Michel Jobert said that the June 22 agreement
between the United States and the Soviet Union “was of great concern to most of the
countries represented in the Council,” and asked whether “it was necessary for this coop-
eration between two ‘adversary-partners’ automatically to take priority over consulta-
tion within the Atlantic Alliance.” Kissinger responded by accusing Jobert of misinter-
preting the agreement and then repeated its provisions for clarification. He added that
if Jobert continued to repeat his “erroneous” interpretation of the accord that it could not
be “inadvertent.” (Telegram 14640 from London, December 12, 1973; ibid., [no film
72 Foreign Relations, 1969–1976, Volume XXXVII
6. I am also looking forward to our discussions when we meet in
Brussels in December and later in Martinique.
Warm regards. Henry
A. Kissinger. End text.
The NATO Foreign Ministers met in Brussels December 12–13, and Ford met with
Giscard on the island of Martinique December 15–16.
The Embassy delivered Kissinger’s letter on November 14. (Telegram 27112 from
Paris, November 14; Ford Library, National Security Adviser, Presidential Country Files
for Europe and Canada, Box 4, France—State Department Telegrams to SECSTATE–
Washington, November 13, 1974, 0228Z.
249878. Subject: Letter to Chancellor Schmidt. For the
1. Please deliver the following letter from the Secretary to Chan-
cellor Schmidt, and only repeat only to the Chancellor, the morning of
Wednesday, November 13, pointing out that the Secretary hopes for an
2. Begin text: Dear Mr. Chancellor: President Ford has asked me to
give you our views on the next stage of cooperative efforts to deal with
the current oil crisis. I should emphasize that these views are being
passed only to you, and have been communicated to no other officials
outside the US Government.
3. From our discussions in July,
I know you share our concern
over the corrosive effect that strains emanating from the oil crisis can
have on the strength of the Western democracies and the Alliance. You
have contributed significantly to efforts beginning with the Wash-
ington Energy Conference to build the unity of purpose among the
Source: Ford Library, National Security Adviser, Presidential Country Files for
Europe and Canada, Box 6, Germany—State Department Telegrams from SECSTATE–
NODIS (1). Confidential; Niact; Immediate; Nodis. Drafted by Enders and Paul H. Boeker
(EB/IFD), cleared in EUR, and approved by Kissinger.
Kissinger is presumably referring to his visit to Germany July 6–8 to brief West
German officials on the Moscow Summit.
August 1974–April 1975 73
major Western powers which is necessary to deal with this threat. For-
eign Minister Genscher and Finance Minister Apel have helped carry
forward this effort in the Washington meetings in September.
4. In more recent discussions in Bonn, US representatives have re-
viewed the evolving strategy for consumer country cooperation with
State Secretary Poehl, who will have reported these discussions to you.
I want to raise with you two elements of this strategy in particular, fi-
nancial solidarity and the organization of further discussions.
5. As you have stressed, financial cooperation is essential. We both
realize that the US and the Federal Republic would be net providers of
finance to any new recycling facility. That, of course, will mean per-
suading a potentially reluctant Congress and Bundestag. The President
has, however, come to the conclusion that the US—and almost surely
the Federal Republic—would be compelled to provide as much or
more financing to the weaker economies bilaterally if we have no new
facility. A suitably large facility would have such an effect on confi-
dence in the financial system and the creditworthiness of participating
governments that the eventual requirement for official financing would
be reduced from what it otherwise would be. The Federal Republic
should also find considerable advantage in having the strong econ-
omies of the US, Canada, and Japan join with it in a general consumer
country facility rather than relying only on a European recycling
system in which the Federal Republic alone is linked with most of the
prospective net borrowers.
6. We see financial cooperation as an essential supportive element
of a broader cooperative strategy. If all countries, the weak and the
strong, are to stick together in a program of energy sharing in emer-
gencies, conservation, and research and development of new non-
OPEC energy supplies, some will require financial support. Assuming
that the stronger economies cannot count on remaining islands of sta-
bility, it would appear in our interest to provide this support. If a con-
sumer country recycling facility is to serve its purpose, I believe it
should be convincingly sufficient to meet all contingencies. We intend
to propose a $25 billion facility of callable commitments for 1975.
7. Regarding further international discussions, I feel that the
meetings of the Five have now progressed to the stage where the pro-
posals they have considered and developed should be presented to a
broader group of industrial countries. We suggest that we develop the
programs on conservation and new supplies in the International En-
ergy Agency and the recycling proposal in the Group of Ten. I also in-
According to telegram 14398 from Tokyo, November 6, Enders and Cooper were
scheduled to meet with Poehl and Lautenschlager on the morning of November 8 in
Bonn before returning to the United States. (National Archives, RG 59, Central Foreign
Policy Files, D740318–0715) No other record of the meeting has been found.
74 Foreign Relations, 1969–1976, Volume XXXVII
tend to propose a January meeting of participating countries in these
efforts, at the Ministerial level, to take the political decisions to put both
into effect. Such a meeting of Ministers could conveniently convene in
Washington in mid January just prior to the meeting of the IMF’s In-
terim Committee of Governors.
8. We all will have political problems with a program of the magni-
tude we propose, but the magnitude is a reflection of the problem we
face. In both our countries we will undoubtedly encounter critics who
find it momentarily cheaper and safer to wait for miracles. But I suspect
that you share my view that the oil price is not coming down now on its
own and will not come down later unless we act now to create the ob-
jective conditions that will eventually accomplish this.
9. President Ford has asked me to advance some of these proposals
in a speech I am giving November 14 in Chicago.
At that time I also in-
tend to say that we will attend a producer/consumer meeting, while
stating that such a meeting should await action by consumers on the
cooperative program we have begun.
10. We hope that you can support these suggestions which were in
part generated by the concerns you expressed in June. If you have any
urgent views prior to my speech we would be glad to consider them.
11. Warm regards, Henry A. Kissinger. End text.
In the speech that he gave in Chicago on November 14 before a University of Chi-
cago Board of Trustees banquet, Kissinger provided a “Blueprint for Consumer Coopera-
tion” in which the consuming countries “must act in five interrelated areas”: 1) acceler-
ating “our national programs of energy conservation” and coordinating them “to insure
their effectiveness”; 2) pressing on with the “development of new supplies of oil and al-
ternative sources of energy”; 3) strengthening “economic security—to protect against oil
emergencies and to safeguard the international financial system”; 4) assisting the “poor
nations whose hopes and efforts for progress have been cruelly blunted by the oil price
rises of the past year”; and 5) entering into a “dialogue with the producers to establish a
fair and durable long-term relationship” on the “basis of consumer solidarity.” For the
text of the speech, see Department of State Bulletin, December 2, 1974, pp. 749–756.
According to telegram 17793 from Bonn, November 13, Schmidt told Deputy
Chief of Mission Frank E. Cash that because he had not had time to consult with his Cab-
inet, he could not “do much more than give off-the-cuff reaction” to Kissinger’s letter.
The Chancellor believed that the proposal for a January meeting would lead to a “con-
frontation with the French” and, therefore, was “not a good idea,” adding that Giscard’s
proposal was “not unnecessary.” On financing, Schmidt was “not quite sure” that West
Germany “would be compelled to provide financing to degree indicated” in Kissinger’s
letter and that public mention of the “big fund” project discussed in both the G–5 and the
Library Group forums would put his country in a “very difficult spot.” Finally, he “fully
agreed” on the “necessity of sticking together in energy sharing, conservation, and re-
search and development of new non-OPEC energy supplies” and that, if the industrial-
ized powers could not achieve “essential cooperation” on energy, the consequences
would be “very bad.” (Ford Library, National Security Adviser, Presidential Country
Files for Europe and Canada, Box 6, Germany—State Department Telegrams from
August 1974–April 1975 75
Telegram From the Department of State to the Embassies in
Japan, the United Kingdom, and France
Washington, November 14, 1974, 0554Z.
250994. Subject: Letter From Secretary to Foreign Minister.
1. Please deliver the following letter to the Foreign Minister not be-
fore 5:00 PM local time Thursday, November 14 in Europe, and as early
as possible during the business day in Japan, Friday, November 15.
The Secretary’s speech referred to in this letter will be delivered
Thursday, November 14 in Chicago at 9:25 PM local time.
ask that the Secretary’s letter be held in strictest confidence until he de-
livers the speech.
2. Dear Mr. Minister: The effects of the energy crisis have now be-
come manifest—in more rapid inflation, arrested growth, increasing
strains on the international financial system and narrowing opportu-
nities for governments to control their countries’ own political and eco-
nomic destiny. This relentless course of events lends new urgency to
our joint efforts to design and carry out an effective strategy to over-
come the problems emanating from the energy crisis.
3. The USG believes that the conclusion is inescapable that cooper-
ation among the major oil consuming areas of Europe, North America
and Japan is the fundamental prerequisite for an effective program of
action. The crisis itself defies national solutions. But working together
we do have options which we do not have separately. Whereas no
country alone, except possibly the United States, can protect itself in a
selective embargo, together we can do so.
4. We now need to move further in the cooperative endeavors
begun this year at the Washington Energy Conference and carried for-
ward in subsequent deliberations. Our work has now progressed to the
stage where we should advance some of the proposals we have been
considering among the Five to the broader group of countries that will
need to act on them. As a part of this process, I intend to present some
U.S. proposals in a speech on the evening of November 14 in Chicago. I
want to share with you some of the reasoning behind these proposals,
as well as the nature of the proposals themselves, although our general
thoughts are already familiar to you.
Source: Ford Library, National Security Adviser, Presidential Country Files for
East Asia and the Pacific, Box 8, Japan—State Department Telegrams from SECSTATE–
NODIS (1). Secret; Niact; Immediate; Nodis. Drafted by Boeker; cleared by Hartman,
Enders, and Habib; and approved by Eagleburger.
Kissinger sent the same letter to Genscher on November 14. (Telegram 250993 to
Bonn; ibid., Presidential Country Files for Europe and Canada, Box 6, Germany—State
Department Telegrams from SECSTATE–NODIS (1))
See footnote 4, Document 17.
76 Foreign Relations, 1969–1976, Volume XXXVII
5. On the important question of oil price, the producers have made
it clear that political persuasion or negotiation is not now going to re-
sult in any notable price decrease. The alternative left us is, therefore,
the difficult but workable one of action on the consumer side (1) to
create the objective conditions for an eventual price reduction, and (2)
to protect the vitality of our economies in the interim period of high oil
prices. To achieve the first objective consuming countries need major
new efforts both to reduce demand for oil through conservation and to
develop new sources of energy supply. In the period until these actions
reach full effectiveness consuming countries, as we have recognized,
need to complete two safety nets, one to deal with any new oil supply
emergency and the other to deal with any potential inability of the fi-
nancial system to recycle the huge flow of oil funds.
6. Energy conservation offers us the most immediate prospect of
relief from high oil prices. For political as well as economic reasons ef-
fective conservation must be a collective effort. At a minimum we
should collate our individual country programs for 1975 to make sure
that we are doing enough. The U.S. will propose that the industrialized
countries set the goal of reducing their consumption from what it oth-
erwise would have been by three million barrels per day (150 million
tons at an annual rate) by the end of 1975. The United States has already
announced a program to reduce our consumption of imported oil by
one million barrels per day in 1975. In the context of a common goal of
consuming countries, the United States is prepared to achieve further
7. In dealing with recycling of oil funds, we need to consider three
basic objectives: to protect the integrity of our financial institutions, to
ensure that no nation feels forced to pursue disruptive policies for lack
of adequate finance and to make sure no consuming country is com-
pelled to accept financing on intolerable political and economic terms.
The task for governments is to provide a back-up, intergovernmental
facility that can augment private recycling whenever necessary. Such a
safety net would help assure the stability of the entire system and the
creditworthiness of participating governments.
8. With these considerations in mind the United States is pro-
posing that the industrialized countries create a common loan and
guaranty facility to provide a means for recycling up to $25 billion in
1975. Governments would individually choose how to meet their com-
mitments to such a facility, but presumably most would choose to do so
by borrowing. Calls on governments’ commitments to provide funds to
the facility would be made in connection with specific decisions of par-
ticipating governments on support to countries in need of financing,
after full resort to private opportunities and reasonable self-help
9. We are already considering new ways of assisting developing
countries in their acute financial problems. We need to consider new
August 1974–April 1975 77
possibilities of providing highly concessional financing to the devel-
oping countries most seriously hurt by the current crisis. In particular,
special financing of the IMF needs to be provided on terms more suit-
able to these countries’ needs.
10. As you know, the US has always been in favor of a constructive
dialogue with oil producing countries. Consumer country cooperation
is not antagonistic to consumer-producer cooperation, but an essential
preparation for this broader dialogue.
11. The USG hopes that consuming countries can move promptly
to broaden our cooperative effort. The new International Energy
Agency is best placed to develop a program of action on conservation,
new supplies and preparation of consumer positions for the eventual
consumer-producer dialogue. We suggest that the Group of 10 Finance
Ministers develop a proposal for financial cooperation looking to enact-
ment within the OECD framework.
12. The issues and tasks before us comprise a program of consider-
able magnitude, requiring difficult political decisions. But just as the
turmoil of the immediate post-war period became a moment of great
creation in international cooperation, so can the energy crisis of today
be one leading to historic achievement through cooperation. The eco-
nomic facts of today are stark, as they were in 1947–1948. The structure
emerging from that challenge has secured our democratic institutions,
economic progress and security for a generation. These achievements
are now threatened. But with the same political vision, courage, and
above all, cooperation that sustained us in the earlier years, we can
meet the new energy challenge.
13. I look forward to working with you on these tasks in the period
immediately ahead, and hope that we can count on your support and
that of your government for the proposals we have made.
Signed Henry A. Kissinger.
14. For Paris: Final sentence of letter should end with words “im-
mediately ahead”, eliminating all thereafter from “and hope” through
“we have made.”
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