Economic advisor to presidents set monetary policy

Anthony Solomon, an international economic advisor to three presidents who later played a leading part in setting federal monetary policy, died Jan. 18 of kidney failure at his home in New York. He was 88.

Solomon held high-level positions in the State Department under presidents John F. Kennedy and Lyndon B. Johnson and later had a three-year stint as undersecretary of the treasury during the administration of Jimmy Carter.

Solomon was a businessman and college professor who became an authority on trade and economic matters. In 1979, as a treasury undersecretary, he helped orchestrate the effort to freeze Iranian assets after the Iranian revolution overthrew Shah Mohammed Reza Pahlavi.

In the early 1980s, as president of the New York Federal Reserve Bank, Solomon was “a powerful figure in the nation’s central bank system,” according to Washington Post columnist Hobart Rowen, and “second only to Fed Chairman Paul Volcker” in his influence on federal economic policy.

Solomon combined his academic interest in economics with firsthand experience in business. In the 1950s, he lived in Mexico and operated Rosa Blanca Products, which made processed soups. He sold the business to General Foods in 1961, became a millionaire and devoted the rest of his career to economic troubleshooting.

He was teaching at Harvard University in the early 1960s when Kennedy asked him to lead a group developing an economic policy for Micronesia, then administered by the United States. That assignment led to appointments as deputy assistant secretary of state for Latin America from 1963 to 1965 and assistant secretary of state for economic affairs from 1965 to 1969.

A hallmark of Solomon’s career was his belief that free trade was a key element in creating free and open societies. In 1965, after widespread civil disturbances erupted in the Dominican Republic, Solomon helped reestablish economic stability in the island nation and personally oversaw the distribution of food from government warehouses.

From 1969 to 1972, he directed the International Investment Corp. for Yugoslavia, an organization affiliated with the World Bank. It was one of the first efforts to establish joint ventures between Western businesses and corporations within the Communist bloc.

At the Treasury Department in 1977, Solomon instituted the “trigger-price mechanism,” which protected U.S. steel products from cheaper foreign competitors by increasing tariffs until the imports reached a minimum “trigger price.”

In the late 1970s, Solomon negotiated a compensation arrangement with China over American assets seized after the Communist revolution of 1949. As president of the New York Federal Reserve Bank from 1980 to 1984, he helped devise policies to alleviate a Latin American debt crisis.

Solomon was born Dec. 27, 1919, in Arlington, N.J., and graduated from the University of Chicago. In the 1940s, he oversaw U.S. lend-lease policies in Iran. He received a master’s in economics from Harvard University in 1948 and taught at Harvard before entering business in Mexico.

He was an advisor to U.S. Rep. Wilbur Mills (D-Ark.), chairman of the House Ways and Means Committee, in the 1970s and served as chairman of the executive committee of the Peter G. Peterson Institute for International Economics in Washington. In the late 1980s, he was chairman of S.G. Warburg Inc., an investment banking firm.

In 1976, Solomon established the Nicky Solomon Foundation to seek ways to prevent violent crime. It was named for his 21-year-old daughter, who was a student at George Washington University when she was killed in her apartment in 1976.

His wife of 48 years, Constance Kaufman Solomon, died in 1998.

Survivors include two children, Adam Solomon of New York City and Tracy Solomon Ford of San Rafael, Calif.; and two grandchildren.