August 21, 1971

Sup Ct reverses itself, agrees to allow pros candidacy of Nguyen Cao Ky; ruling apparently made on order of Nguyen Van Thieu and at urging of US Embassy; Nguyen Cao Ky aides say he no longer wants to run; Bunker met last night with Nguyen Van Thieu and in morning called on Nguyen Cao Ky in what was seen as effort to persuade him to run if Sup Ct reversed self; observers and diplomats in Saigon view prospect of uncontested contest as a failure for US policymakers in Vietnam; Duong Van Minh reptdly was furious after recent meeting with Bunker at which Bunker sought to persuade him to run; Bunker again confs with Nguyen Van Thieu; is accompanied at outset of talks by Sen R Dole; Dole says there will be critical reaction in US to a one‐man race; details on evidence of alleged rigging of election offered by Duong Van Minh to Bunker and to Deputy Amb S D Berger; Duong Van Minh supporters say Bunker did not offer to have general's documents investigated

IMF takes note of Nixon's action and formally announces that US is in violation of its obligations by not maintaining dollar at its fixed par value in internatl transactions; says it 'welcomes' US undertaking to collaborate with IMF to promote exch stability, maintain orderly exch arrangements with other members and to avoid competitive exch‐rate alterations; releases cablegram from managing dir Schweitzer saying prospects are for disorder and discrimination in currency unless prompt action is taken; Schweitzer says he intends to press for rapid action to reach agreement on appropriate exch rates and other measures which will restore system to effective and lasting operation; holds varying experiments with wholly or partially floating rates will not give reliable results on what eventual exch rates should be; high officials in IMF say true devaluation of dollar by way of slightly higher gold price would make it easier for other countries to make small upward revaluations for their currencies; hold such move would lead to more realistic exch rates among currencies; envision gold price in $37 to $39 range

Justice Dept announces that it plans to seek ct order next wk requiring Smith to obey Nixon wage‐price freeze; move seen indicating that Nixon Adm is determined to have as few exemptions to freeze as possible; Cost of Living Council, issuing its 3d set of rulings on specifics of freeze, states that employes scheduled to receive pay increases upon completion of educ requirements may get them because action is bona fide promotion; question of whether council's rulings on wages and prices are legally binding remains unresolved

BLS Consumer Price Index up 0.6%, July, 0.4% above natl level; Bienstock cites phone rate increase and recent rise in sales tax on various items; BLS repts index has risen 3.5% since Jan, 1.1% over natl level; Bienstock illus

announcement by Pres Nixon to greet Emperor Hirohito and wife during their visit to Anchorage seen representing gesture toward Japanese at time when US relations with Tokyo have been strained by econ actions of Nixon