An announcement of a new monetary regime has to persuade at once, before anyone can see whether it works, and it has to say enough about the future to be believed without binding its authors to a path they may need to leave. A suspension of convertibility, which stops an obligation without cancelling it, and a change in the way a central bank operates, which keeps the targets and changes the method, are both decisions of this kind.
This article asks a single question of two such announcements: did they write down what would be looked at again? The question has three parts. Did the text present its act as temporary, and did it name the date or condition on which the act would end? Did it name what would be watched, so that a later reader could tell whether the act had done what it was meant to do? And did it say who would bear the cost while the act was in force? These questions can be answered from the wording alone, without knowing what came after. A listener on the evening of 15 August 1971 or a reporter in the Board Room on 6 October 1979 had only the words.
The two announcements share a form and differ in nearly everything else. Both were made on a weekend. Nixon spoke on television on a Sunday evening; Volcker held a press conference on a Saturday and told the reporters there that the Federal Reserve wished to say what it had to say as soon as was sensible, and preferably while markets were closed. Both changed a rule of money: the first, the convertibility of the dollar into gold; the second, a practice of holding the overnight rate between banks within a narrow range. One came from an elected executive speaking to the nation; the other from an appointed central banker speaking first to the press and then, on 17 October, to a committee of Congress. One person connects them: Silber's biography describes Volcker's role in the end of the dollar's gold convertibility in 1971 as well as his leadership of the Federal Reserve in 1979 (Silber 2012).
The contribution is to two debates, read through texts that the debates usually treat as given. On 1971, Gowa's account of the closing of the gold window as a result of domestic politics (Gowa 1983) is set beside institutional histories that follow the breakdown of the par value system and tie each regime to repeated crises, the interests of the major powers and, in Eichengreen's case, capital controls that eroded (James 1996; Eichengreen 1996). On 1979, the documentary account by Lindsey, Orphanides and Rasche, in which the change of procedure was a way to permit larger swings in interest rates and to signal commitment against inflation (Lindsey, Orphanides and Rasche 2005), is set beside Silber's argument that Volcker's persistence was central to the outcome (Silber 2012). Neither pair is a quarrel the authors conduct with each other by name. They are set side by side here because each pair answers a question about why the act was taken, and the announcements answer a different question: what the act promised about its own review. That question bears on a third, older debate, between the case for rules and the case for a rule with an escape clause (Kydland and Prescott 1977; Bordo and Kydland 1995), and on a fourth, about whom an emergency announcer answers to (Posner and Vermeule 2010; Tucker 2018).
The argument is that the two announcements located the object of review in different places. The address of 1971 attached a condition of ending to the tax on imports and tied it to the conduct of other countries; to the suspension of convertibility it attached the word temporarily, an exception clause and no condition at all, and it pointed towards a reform of the international system that others would have to join. The texts of 1979 named what would be watched, money and credit against ranges already reported to Congress, named a condition of removal for one instrument in general words, and declined to name either a range for the freed rate or an end for the new procedure. A smaller point concerns the modern records of these two days, the form in which most readers now meet them: they keep the dates carefully and lose most of what the actors wrote about review.
The article does not judge whether either act was right, or whether either caused what followed. The study from which it is drawn holds that people decide, and that a reading of their records can show what was known, promised and left unsaid, but not whether the decision was wise.
Section 2 lays out the debates; Section 3 states the evidence, including a limit on quotation that shapes the whole article, and how the ledger of Meridian's study of emergency acts in money and credit was made; Sections 4 and 5 read the two announcements; Section 6 sets them side by side; Section 7 concludes.