Nixon White House Tapes › Tape 10 › Conversation 010-109
Nixon phone call with Safire on Phase II economic policy and Price Commission
Wednesday, October 6, 1971 · 9:23 PM–9:31 PM ET · White House Telephone · 8 min
AI Summary
President Nixon and William Safire discussed revisions to a speech regarding Phase II economic controls, specifically focusing on how to address corporate profits without alarming the business community. Nixon insisted on narrowing the language to target only "exorbitant" or "windfall" profits, ensuring that the Price Commission would not be perceived as having broad regulatory authority to monitor all business earnings. Consequently, they decided to strike several paragraphs and soften the rhetoric surrounding mandatory controls on dividends and interest to avoid unnecessary political or economic friction.
- Phase II economic policy
- Price Commission
- Windfall profits
- Wage and price controls
- John B. Connally
- George P. Shultz
Audio
Transcript (AI-generated)
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Bill, what I think on the business, on the profits and so forth, the thing that concerns me is that the way it reads, even with our changes, it sort of leaves the price commission with the power to sort of look at all businesses and all profits, even though we refer to only windfall profits.
If you look at page six and the bottom page seven, top page seven,
I think that the way you could do it is one way to avoid doing what you say is to touch it, but I would only encourage a far better way, a better way, is rather than make sure it's a work.
Not that business passes along a fair share of its cost savings to the consumer.
You see, that's a very general thing, and I don't want to put that in that way, is to say that we're a business, we're a business, as a result of a...
of holding down wages or of the free, we can't call it freeze, of holding down wages.
Wage restraint.
As a result of wage restraint, makes exorbitant profits that that business will pass along a fair share of its cost savings to the consumer.
See?
Zero in on that thing.
See what I mean?
All right.
Let's see.
Now, the exorbitant point we made earlier.
I know.
I know.
But on the other hand, then we go into all businesses later.
I mean, it sort of looks like we're going to look at profits of all businesses, and we just don't want the price commission doing that.
Circumstances could arise in some cases that might generate exorbitant profits, you see.
And... What you want to do is narrow or limit the number of businesses that... That's right, is to provide that where?
That where as a result of... Or where there are windfall profits.
That actually is what Connelly wanted to avoid when you start spelling out exactly when you would move in to force them to.
Yeah, but on the other hand, if you say that make certain that business passes along a fair share of its cost savings to the consumer, that's awfully broad.
I mean, I'm just afraid that it's going to give them a sort of a hunting license to go in and the nadirs and the rest to say, Christ, gee, I'm making too much, see?
I don't know.
Well, maybe that's one thing that... What about cutting that whole paragraph?
Mm-hmm.
And that's not fair.
We won't let that happen.
Even though prices are held down, that might generate exorbitant profits.
That's not fair.
We won't let that happen.
Then we'll cut the next two paragraphs.
Well, then you... No, but that doesn't quite...
I mean, not even talk about the next two.
Right.
The cost savings and so forth.
Right.
Well, then you don't say how you're going to do it.
It makes it look like you're going to have an excess profits tax, and we don't want to say that.
True.
Is that...
The way we got it now is a far better way is for business to pass along.
Well, for business to pass along.
Well, I think you better...
on that point just have march type up to there see and then in the morning you check with conley to be in schultz i think those are the two that wouldn't understand it best to be sure that we are not i just don't want something here that's going to chill the hell out of the business uh you know at this point i mean it isn't worth it because we're not going to do a hell of a lot it's just this is pure cosmetics pretty much cosmetics we're not it's not going to happen see
Well, you know, there are only three ways they can get rid of their funds.
Dividends.
Yeah, I know that.
And 1%, if it's passed along to the consumer, might be good.
That's right.
I know, but if you...
I just don't want the Price Commission to look into the profits of all businesses and say, this is too high, this is too low, and so forth and so on.
Yeah.
That'll just shock the hell out of business.
We've just got to say, even though prices are all...
So in some cases, it might generate exorbitant prophecies.
That's not fair.
But then you could say, in such cases, you could say, in such cases, in such cases, business should pass along a fair share of its cost savings to the consumer.
That's the way to do it.
Get it?
Such cases... That's not fair, and we won't let that happen.
In such cases... Business should... Should pass along a fair share of its cost savings to the consumer.
Got it?
Got it.
In such cases, and then go on.
We have lived too long with psychosomes, and only there are times of some price reduction psychology.
Strike the next sentence, and then the next.
That does it, I think.
That narrows it.
Okay, so we're killing the last paragraph on the bottom of the page.
Right?
One way to avoid it.
That goes out, yeah.
In such cases, business should pass along a fair share of its cost savings to the consumer.
We have lived too long with a psychology that assumes the only direction for some price reduction psychology.
This is not only in the public interest, but it makes good competitive business sense.
See?
Right.
Then we're talking only about windfall profits and not about any other kind of profits, see?
Yeah, we described it as exorbitant rather than just excessive.
That's right.
That's right.
I think that's better.
I don't like it at all, but let's just put that much in and no more.
Okay, now, of course, you could just drop the whole subject of profits, but you'll be kind of criticized for avoiding it, I think.
We've got to have profits.
I guess everybody wanted it in, you know?
It's...
Or did Connolly want it stuck out completely?
No, he just wanted it played down compared to the... Well, this plays it down quite a bit, you see.
Yeah.
We've reduced it a hell of a lot here.
Be sure that Schultz, you know, didn't object to it at all because it makes it easy to deal with laymen.
Now, incidentally, on the mandatory controls, I want you to check that thing in the morning with Connolly.
We can knock that out if he doesn't like that.
right for standby controls over dividends and interest rates i kind of like it myself although i don't know i take that out i just don't think we need to need to hit that all right you say it's in the national interest to hold down interest rates
I just strike the mandatory, I will ask the Congress to let them control that in the briefing.
Okay.
Just the less we say about that, the better.
All right.
Okay, no, I think that improves it, yeah.
It takes a little of the...
Sort of the demagoguery out of it, too.
Yeah, yeah.
Then you come over to the last, I think the last page, you can work on it, you'll have something.
Yeah, I'll have something in the morning.
Something in the morning, fine.
All right.
We'll let Marge go ahead.
Great.
All right.
NARA Description
On October 6, 1971, President Richard M. Nixon and William L. Safire talked on the telephone from 9:23 pm to 9:31 pm. The White House Telephone taping system captured this recording, which is known as Conversation 010-109 of the White House Tapes.
Nixon Library Finding Aid
Conversation No. 10-109
Date: October 6, 1971
Time: 9:23 pm - 9:31 pm
Location: White House Telephone
The President talked with William L. Safire.
[See Conversation No. 285-4]
Phase II speech draft
-Profits
-Price Commission
-Windfall profits
-John B. Connally
-Wage restraint
-Ralph Nader
-General Motors [GM]
-Cost savings
-Excess profits
-Marjorie P. Acker
-Connally
-George P. Shultz
-Price Commission
-Profits
-Windfall
-Consumers
-Mandatory controls
-Connally
-Safire's schedule
-AckerAlso recorded on October 7, 1971
- 284-022 8:40 PM · 16 min — President Richard M. Nixon, William L. Safire, and Nellie L. Yates met in the President's office in the Old Executive Office Building at an unknown time between 8:40 pm and 11:59 pm.
- 010-105 8:54 PM · 1 min — President Richard M. Nixon, White House operator, and Nellie L. Yates talked on the telephone from 8:54 pm to 8:55 pm.
- 285-002 8:55 PM · 4 sec — President Richard M. Nixon and the White House operator met in the President's office in the Old Executive Office Building at an unknown time between 8:55 pm and 9:18 pm.
- 010-106 9:18 PM · 7 sec — President Richard M. Nixon and the White House operator talked on the telephone at 9:18 pm.
- 010-107 9:18 PM · 14 sec — President Richard M. Nixon and Marjorie P. Acker talked on the telephone from 9:18 pm to 9:19 pm.
- 285-003 9:18 PM · 13 sec — President Richard M. Nixon and Marjorie P. Acker met in the President's office in the Old Executive Office Building from 9:18 pm to 9:19 pm.
- 010-108 9:23 PM · 11 sec — President Richard M. Nixon and the White House operator talked on the telephone at 9:23 pm.
- 285-004 9:23 PM · 6 min — President Richard M. Nixon and William L. Safire met in the President's office in the Old Executive Office Building from 9:23 pm to 9:31 pm.
Cite this conversation
Conversation 010-109, October 7, 1971. White House Tapes, Richard Nixon Presidential Library and Museum, National Archives. Audio and AI transcript via Easy Nixon, https://www.easynixon.org/tapes/010-109 (accessed September 19, 2026).