(7 of 10)
Still, the major concession that De Gaulle wanted could not be extracted from Bonn. As the Germans well knew, a revaluation-induced increase in the cost of their goods sold abroad would almost certainly have pinched corporate profits at the same time that it increased unemployment. And what made both effects particularly untimely as far as Chancellor Kurt Kiesinger's government was concerned was the fact that national elections will be held next year. As Kiesinger publicly declared, "The ills of the sick should not be cured at the expense of the healthy one."
French and German intransigence sent Europe's monetary system reeling toward the brink of crisis. On the day that Schiller, chairman of the Group of Ten, summoned the world's leading central bankers and finance ministers to an emergency meeting in Bonn, demand for gold in London hit the highest level since March. In New York, sterling hit rock bottom at $2.38. In Swiss money markets, it slipped even lower. The dollar, by comparison, weathered the crisis fairly well, reflecting general confidence that the U.S. was finally doing something convincing about its balance of payments problem.*
Shouting Match
When the money men assembled in the barracks-style structure that houses the West German Economics Ministry, Schiller wasted little time in making clear his opposition to the revaluation of the mark. As the meeting dragged on into evening, tempers began to flare. "They did everything except throw chairs at each other," said one participant. Bitter exchanges broke out between the world's leading monetary managers. According to one report, Britain's Chancellor of the Exchequer lectured the West German Finance Minister "as if he were a member of the Conservative Opposition." Jenkins himself was heckled outside the ministry by Germans who were protesting against British efforts to encourage a mark revaluation. The demonstrators carried placards that read SCHILLER AND STRAUSS, DON'T BE BLACKMAILED! and WILSON, HANDS OFF THE D-MARK!—a reference to a telegram that British Prime Minister Harold Wilson had sent to Chancellor Kiesinger in an effort to enlist West German support for an upward pricing of the mark.
At one point in the proceedings, Schiller snapped at the U.S.'s Fowler: "Let us be clear that the mark is not undervalued, but that the dollar is overvalued." Fowler replied with an extraordinary paean: "Gold is the sun," he said, "and the dollar is the earth. The earth revolves around the sun and the relationship doesn't change." Retorted Schiller: "Then I guess we're all just little satellites launched from Cape Kennedy." After Jenkins and Fowler had characterized the German trade tax concessions as inadequate, Schiller declared, "If the lopping off of one third of our export surplus is not a sacrifice, then it is obvious that we have quite different concepts of social values."