Manuscripts/Mixed Material Interview with Nicholas A. Rey
REY: The Nixon administration. I said, “Sure, why not.” This is not working right. It gives me a chance to see what other firms I could go to later. So I went back down, took the family, brought them back down to Washington. I spent ten months of 1970 down here. Well the fall of 1970 to the spring of 1971 down here, spring, early summer of 1971. This was a fascinating commission. It had a lot of very good businessmen, lawyers commissioners, outside commissioners. Nobody from the government. It would decide what U.S. foreign economic policy should be and provide advice. It was your classic study commission, you know, the president didn't know what to do, and they didn't know what to do, so let's have a study commission and dance and obfuscate until we need to do something. So that was set up for that. I was responsible for writing several of the chapters as a staff man. We had a very good staff. The staff director was a man named Isaiah Frank who is a professor of economics still, even though he is in his mid-'80s, at Johns Hopkins. There were various CEOs of major corporations, which again on the commission. We did a lot of interplay between the staff and the CEOs. So I got a lot of feel for what these people think and how they act, etc., which again was very helpful to me in later life when I got into the business of client relationships.
Q: During this time the Nixon administration more than most was very heavily involved in economic policy including going off the gold standard and all that. The Nixon shoku as they called it.
REY: Yes, I can explain all that.
Q: Would you talk about the approach that you all were taking. mean basically the whole problem is a deficit wasn't it?
REY: Yes. There was a big balance of payments deficit. The dollar was weakening around the world, even though everyone needed the dollar because it was the reserve currency. But there were all sorts of problems, and we were still on sort of the semi not gold standard but whatever you called it in those days. Our report was issued on July 27, 1971. I think it was the date of the report. Literally one week later we had the Nixon shoku. Our report was, and I had to write them, those chapters, or was very much involved in writing those chapters, was vehemently opposed to going off the $35 an ounce gold exchange system we had, and more importantly we were against going to a flexible exchange rate system. So that report had a life of about one week before Secretary Connelly threw it out.
Q: What were some of the arguments pro and con at that time?