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Conversation: 519-011

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Start Date: Monday, June 14, 1971 7:02 PM

End Date: Monday, June 14, 1971 7:29 PM

Participants:

Nixon, Richard M. (President)Bull, Stephen B.Connally, John B.Shultz, George P.McCracken, Paul W.Burns, Arthur F.Sanchez, ManoloButterfield, Alexander P.

Recording Device: Oval Office

Full Tape Conversation Start Time: 02:37:45

Full Tape Conversation End Time: 04:03:00

519a.mp3

519b.mp3

519c.mp3

NARA Description:

On June 14, 1971, President Richard M. Nixon, Stephen B. Bull, John B. Connally, George P. Shultz, Paul W. McCracken, Arthur F. Burns, Manolo Sanchez, and Alexander P. Butterfield met in the Oval Office of the White House from 3:02 pm to 3:29 pm. The Oval Office taping system captured this recording, which is known as Conversation 519-011 of the White House Tapes.

Nixon Library Finding Aid:

Conversation No. 519-11

Date: June 14, 1971
Time: 3:02 pm - 3:29 pm
Location: Oval Office

The President met with Stephen B. Bull

     Greetings

Bull left and John B. Connally, George P. Shultz, Paul W. McCracken, and Arthur F. Burns
entered at 3:02 pm

     Greetings

     Weather


******************************************************************************

BEGIN WITHDRAWN ITEM NO. 1
[Personal Returnable]
[Duration: 1m 43s ]


END WITHDRAWN ITEM NO. 1

******************************************************************************
                                              25

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/08)



     Wedding
         -Network coverage
              -Columbia Broadcasting System [CBS] citation of various costs
              -Dan Rather demeanor
              -Edwin P. Newman, Barbara Walters
              -Connally interest

     McCracken report                                             Conv. No. 519-11 (cont.)
         -Economic problems
              -Sluggish economy

Manolo Sanchez entered at unknown time after 3:09 pm

     Refreshments

Sanchez left at unknown time before 3:29 pm

     McCracken report
         -Economic problem
              -Prices
              -Inflation
                     -Impact on polls
              -Polls
                     -Domestic Council
                     -Domestic information
              -Priority of attack
                     -Inflation versus unemployment
                           -Regional difference
                                 -West versus East coasts
              -Price reforms
              -Level of unemployment
         -Wage/price program
         -Retail sales
              -Seasonal variations
         -Psychological impact
              -Media coverage of economic stories
         -Production figures
              -Significance
         -Federal Reserve Board
         -Commerce Department memoranda
         -Production index
              -Input
                                         26

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                  (rev. 10/08)



     -Trend in personal income figures
     -Timing of government measures
          -Past measures
                -1960 steel strike
                -Effect

Connally report
    -Optimism                                               Conv. No. 519-11 (cont.)
    -Problems
           -Inflation
           -Interest rate rise
                 -Early indications
                       -First Pennsylvania Corporation
                       -Smaller banks
                       -Chase Manhattan Bank
                       -Bank of America
           -Prime rates
                 -Reasons
                       -Money supply
                              -Theoretical agreement
           -Fear of inflation
           -Labor costs
                 -Gordon M. Metcalf
           -Recommendations
                 -International Monetary Fund [IMF] rules
                       -Possibilities
           -International remedies
                 -International conference
                 -Necessity of clear goals
                 -United Nations
           -International situation
                 -England
                 -Germany
                 -France
                 -Japan
                 -Common Market talks
                                            27

                       NIXON PRESIDENTIAL MATERIALS STAFF

                                   Tape Subject Log
                                     (rev. 10/08)



******************************************************************************

BEGIN WITHDRAWN ITEM NO. 2
[National Security]
[Duration: 2m 9s ]


    GERMANY                                                          Conv. No. 519-11 (cont.)


END WITHDRAWN ITEM NO. 2

******************************************************************************


             -US budget
             -Wage control moves
                  -Public pressure
                  -Proposals for a bill
                        -Council of Economic Advisors [CEA]
                        -Abuse of economic powers
                        -Timing of submission to Congress
             -Proposed contact with West German leaders
                  -Willy Brandt
                  -Egon Bahr
                  -Rolf Pauls
                  -Alex Möller
                  -Karl Schiller
             -Construction industry
             -Wage/price bill
                  -Intermediate efforts
                  -Goals
                  -Selective nature
                  -McCracken’s concerns
                        -Inflation
                        -Unemployment rate
                  -President’s concern
                        -Feasibility of action
                        -Public relations effect of anti-inflation moves
                        -Wage and price freeze
                                   28

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/08)



      -Other ways to accomplish goals
            -Cabinet committee
                  -Problems
                        -Wage and Price Board
                              -Advantages
                        -Political
                        -Management/labor overtones
                        -Davis-Bacon Act                     Conv. No. 519-11 (cont.)
      -Trends in wage costs
            -Productivity gains and labor costs
                  -1970
                  -1971 prospects
                        -Metals and construction industry wage settlements
                  -1972 prospects
                  -Upcoming contract negotiations
                        -Longshoremen
                        -General Electric
                        -Fred J. Borch
                        -Railroads
                        -Airlines
                  -Inflation
                        -Expansion
                        -Interest rate rise
                              -Effect
                              -Implications
-Interest rates
      -Effect of short term rise
      -Inventories
      -Inflation
      -Effect of rate increase
      -Revenues
      -Deficit
            -Expenditure estimates
-Legislation
      -Upcoming meeting
      -Veto strategy
      -Spending
            -President’s efforts
                  -Evaluation of legislative efforts
                  -Budget manipulation
                  -Shortcomings of Congressional efforts
                  -Administration counter
                                   29

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/08)



            -Budgetary maneuver
                  -Inflationary fears
                        -Effect
            -Stimulation of economy
                  -Fiscal measures
                        -Effect
-Administration “Money Side” efforts
      -Internal Revenue Service [IRS]                   Conv. No. 519-11 (cont.)
      -Tax code
            -Production of jobs
            -Depreciation allowances
                  -Timing
-”Defensive” posture of administration
      -State of economy
      -Unemployment
            -Upcoming statistics
-Tax reform
      -Schedule acceleration
-Fear of inflation
      -National debt
      -Fiscal reasons
      -Unemployment rates
      -Alleviation
-Price and wage front
      -Energetic advance
-Halt in fiscal expansion
      -Effect
            -Confidence building
            -Interest rates
                  -Impact next year
-Emergence of a “New World”
      -Previous economic problems
            -Effect
      -Spread of trade unionism to public employees
            -Use of strikes
                  -Effect on other workers
      -Changing of strike psychology
            -Need for new economic policy/firm action
                  -Inflation
                  -Progress
                  -Unemployment
-Wage/price effect
                                    30

                NIXON PRESIDENTIAL MATERIALS STAFF

                            Tape Subject Log
                              (rev. 10/08)



      -Wage Board Employee Bill
            -Reincarnation
            -President’s action in past
            -Content
            -President’s future action
-Wage and Price Board
-Wage and price freeze
      -Best approach                                           Conv. No. 519-11 (cont.)
            -Burns’ view
      -Preparatory actions
            -Steel industry role
                  -Role of Cabinet Committee on Economic Policy
      -Lifting of wage and price freeze
            -Simultaneous caveat
      -Necessity of conveying proper attitude to nation
            -Willingness to take strong action
-Democratic interference
      -Administration response
      -Democratic attacks on the deficit
            -Amount
-Inflation expectations
      -Effect
            -Impact on election
            -Interest rates
            -Money supply
      -Connally’s view
            -Cabinet Committee on Economic Policy
                  -Problem of timing
                  -Need for timely action
            -Need for overt action
                  -McCracken report
                  -Timing
                        -Steel negotiations
                              -President’s action
                                    -Discussions with steel industries
                              -Credibility
            -Need for open options
            -Need for wage/price freeze
-Wage and price freeze
      -Cessation of President’s powers
            -Application for reinstatement from Congress
            -Implications for timing of power use
                                       31

                    NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                  (rev. 10/08)



                 -Extension of power
     -Congressional contact
     -Contact with steel people
     -Unemployment and inflation
     -Tax relief bill
     -New spending requests
     -Deficit control
     -Wage and price freeze                                Conv. No. 519-11 (cont.)
          -Shultz’s view

Discussion with steel people
     -Shultz’s role
     -William F. Hausman [?]
     -James D. Hodgson/J[ames] Curtis Counts/Shultz role
     -Meeting with President
     -Administration position
           -Steel problems
                 -Recognition
                 -Changes necessary
                 -Administration help

Labor problems
     -Longshoremen’s Union/Postal Workers’ Union
           -Post-strike behavior
           -Administration contact
                 -Counts’ role
           -Productivity bargain
     -Electrical industry
     -Steel industry
           -Union demands
                 -Cost of living raise
           -Cost problems
                 -Work orders
           -Post-settlement administration strategy
                 -Wage and price control
                 -Cost remedies
     -Business participation in economic recoveries
           -1913-1914
           -1933
     -Cycle of recessions
     -Business concerns
           -Profit margins
                                                32

                              NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/08)



                 -Psychology
                 -Pace of expansion
                 -Wage and price controls
                      -Treatment of administration by liberal press
                            -New York Times
                                 -Lockheed Corporation

Alexander P. Butterfield entered at 3:25 pm                           Conv. No. 519-11 (cont.)

                        -President’s schedule

Butterfield left at 3:26 pm

           -Quadriad differences
           -National Railroad Passenger Corporation/American Track [AMTRAK]
                -Contact by aide of President
                      -[Name unintelligible]
                      -John A. Volpe
                      -Discussion with railroad executives

     Next Quadriad meeting
          -Budget figures
          -President’s meeting with Burns

     Interest rates
           -Comment by Quadriad officers

Connally, Shultz, McCracken, and Burns left at 3:29 pm