This week marks the jubilee of the Kennedy-Nixon debates. It was on September 26, 1960, that the two future presidents took the stage in the first of their four rounds. It struck us, as we watched them over the weekend, as it struck us when we watched them originally, that they were conducted on a remarkably high plane. The transcript runs to something like 44,000 words, the length of a modest book, and the sloganeering was, in both camps, kept to a minimum. History, however, shows us that they failed to see the monetary catastrophe that lay ahead, a sobering thought in the current crisis.

It turns out the topic is struck upon in the third debate. It was the 16th year of Bretton Woods, which had set up a kind of gold standard, and the dollar was under pressure. Charles Van Fremd of CBS News put the question to Nixon, by noting that in the past three years there had been “an exodus of more than four billion dollars of gold* from the United States . . .” Von Fremd attributed the outflow to the fact that “exports have slumped and haven’t covered imports” and to “increased American investments abroad.” He asked Nixon, “how would you go about stopping this departure of gold from our shores?”

“The first thing we have to do is to continue to keep confidence abroad in the American dollar,” was how Nixon began his reply. That meant, he said, that “we must continue to have a balanced budget here at home in every possible circumstance that we can, because the moment that we have loss of confidence in our own fiscal policies at home, it results in gold flowing out.” He also called for an increase in exports. And he declared that America “must get more help from our allies abroad in this great venture in which all free men are involved of winning the battle for freedom.”

“The United States cannot continue to carry the major share of this burden by itself,” Nixon declared. “We can [carry] a big share of it, but we’ve got to have more help from our friends abroad; and these three factors, I think, will be very helpful in reversing the gold flow which you spoke about.”

“The difficulty, of course,” Kennedy responded, “is that we do have heavy obligations abroad, that we therefore have to maintain not only a favorable balance of trade but also send a good deal of our dollars overseas to pay our troops, maintain our bases, and sustain other economies. In other words, if we’re going to continue to maintain our position in the sixties, we have to maintain a sound monetary and fiscal policy. We have to have control over inflation, and we also have to have a favorable balance of trade.”

The senator from Massachusetts also warned against protectionism abroad. “Many of the countries around the world still keep restrictions against our goods, going all the way back to the days when there was a dollar shortage. ” He said we would have to “persuade these other countries not to restrict our goods coming in, not to act as if there was a dollar gap,” and to “assume some of the responsibilities that up till now we’ve maintained, to assist underdeveloped countries in Africa, Latin America and Asia make an economic breakthrough on their own.”

In the event, Kennedy won the election, and his intentions in respect of gold were a question throughout his administration. At his 39^th press conference, in July 1962, he had vowed to maintain the value of the dollar. “We are not going to devalue,” he said. He warned that America had put $50 billion into Europe alone since 1945 and wasn’t asking the Europeans “to do anything but meet their responsibilities for their own defense.”

Quoth he: “This country is a very solvent country. So I feel it requires a cooperative effort by all of those involved in order to maintain this free currency, the dollar, upon which so much of Western prosperity is built. I have confidence in it, and I think if others examine the wealth of this country, and its determination to bring its balance of payments into order, which it will do, I think that they will feel that the dollar is a good investment and as good as gold.” But the behind the scenes there was pressure, and the Internet gives us some glimpses of him conferring with his advisers about gold:

After Kennedy was assassinated, Lyndon Johnson acceded to the presidency and, in 1965, signed the first legislation of retreat — the Coinage Act of 1965. It superseded at least some aspects of the Coinage Act of 1792, in which the Second United States Congress had defined the dollar as 371 ¼ grains of pure silver, the same as was in a coin then current called the Spanish milled dollar.

President Lyndon Johnson, at the signing of the 1965 act, issued this warning: “If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin.” At the time, the price of silver was almost precisely the same as it was in 1792, or $1.29 an ounce. Today silver is worth $21 an ounce, having risen sharply since the first of the year.

It was President Nixon who, in 1971, closed the gold window and began the end of the Bretton Woods system. It had taken but 11 years from the debate and all the fine words, of both candidates, for the system to come apart and for the great inflation for the 1970s to be unleashed. They were years that remind that the policy errors involved both Republicans and Democrats, who failed to think about money and the enumerated monetary powers and disabilities of the Congress in the terms in which the Founders thought about them.

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* With gold at $35 an ounce, that was the equivalent of 114,285,714 ounces of the metal. At today’s prices, that would mean the outflow over three years of $147 billion worth of gold.