The United States agreed on Saturday (18 December) to devalue the dollar and withdraw the 10 per cent import surcharge as part of an international monetary settlement with the other members of the Group of Ten - the richest non-communist nations.
GV Press conference in progress with Connally speaking
SV Connally speaks
TRANSCRIPT: SEQ 2: CONNALLY: "I think President Nixon put it best, and I would repeat his sentiments at least that we don't view the outcome as setting aside winners against losers. I think everyone gave something -- some perhaps more than others. Whether or not that's true, time will tell. We were dealing with the uncertainty of the future, no one can know precisely what the economic future of each nation represented is going to be. Obviously feelings ran deep, everyone in that hall knew quite well that they were dealing with matters of the highest priority and the highest importance to their own national Governments, that the economic well-being of the nations represented as well as the developing nations that were not represented, were being decided there. So far as the United States is concerned, we came a long way. We, as you know, are changing the price of gold, or will do so, with a recommendation to the Congress that they do so, to 38 dollars an ounce from 35 dollars an ounce. This represents a devaluation of the dollar in terms of the price of gold of 8 point 6 per cent - 8 point 57 to be precise. The net result of the negotiations gives the United States a weighted average increase of approximately 12 per cent."
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Background: The United States agreed on Saturday (18 December) to devalue the dollar and withdraw the 10 per cent import surcharge as part of an international monetary settlement with the other members of the Group of Ten - the richest non-communist nations.
Treasury Secretary John Connally made the announcement on Saturday night, quoting the change in value in terms of an 8.57 per cent rise in the value of gold against the dollar. But most observers later converted this into a 7.89 per cent drop in the value of the dollar against .gold - both figures are correct.
The agreement involves revaluation of other major currencies - including the Japanese Yen and the West German Mark - against the dollar. It was hailed by President Nixon as "the most significant monetary agreement in the history of the world".