Conversation No. 462-13

Date: March 5, 1971
Time: 11:06 am - 1:05 pm
Location: Oval Office
                                                                     Conv. No. 462-12 (cont.)
The President met with John B. Connally, Arthur F. Burns, George P. Shultz, and Paul W.
McCracken

     Greetings

     President’s March 4, 1971 press conference
          -President’s statement about the press

     Quadriad meetings
         -Format
         -McCracken’s and Burns’ roles
         -Format

     Rolls-Royce
          -White House news summary
               -Lockheed
                      -Possible deal
          -Current situation
               -British government involvement
                      -Assessment of cost
               -Connally’s statements to British ambassador
                      -Administration’s position
                            -Negotiations
               -New Rolls-Royce offer
                      -Costs
                            -Guarantees
                      -Possible restrictions and delays
                      -Guarantees
                      -Possible Lockheed bankruptcy
                      -Dan [Surname unintelligible] response
                      -Connally’s response
                      -Airlines’ response
                      -Lockheed’s financial situation
          -Connally’s actions
                                          41

                      NIXON PRESIDENTIAL MATERIALS STAFF

                                  Tape Subject Log
                                     (rev. 9/08)



           -Banks
           -Charles C. Tillinghast, Jr.
           -Banks, airlines, Lockheed
           -George R. S. Baring [Earl of Cromer]
           -Tillinghast

James S. McDonnell of McDonnell-Douglas
     -Previous conversation with Connally                  Conv. No. 462-13 (cont.)
          -DC-10 compared with L-1011
          -Lockheed
          -Trans World Airlines [TWA]
          -United Airlines
                -Sales
          -Future problems
                -L-1011s
                -DC-10s
     -Possible merger with Lockheed
          -John N. Mitchell
          -President’s position
          -Pratt and Whitney
          -TriStar
          -Financial obligations
          -Subcontractors

Aircraft industry
     -Outlook
     -Administration policy
     -Secor D. Browne
     -Richard W. McLaren
            -View of possible merger
     -Peter M. Flanigan
     -American Airlines, TWA
     -Braniff
            -President’s position
            -Lyndon B. Johnson’s position
     -Need for White House staff expert
            -The President’s view
            -Department of Transportation
            -General Lucius DuB. Clay, Jr.
            -Thomas E. Dewey
            -Herbert Brownell
                  -Pan American Airlines’ interests
                                       42

                   NIXON PRESIDENTIAL MATERIALS STAFF

                               Tape Subject Log
                                  (rev. 9/08)



         -Dewey
    -Connally’s concerns
    -Banks’ and insurance companies’ concerns
         -Lockheed-Rolls-Royce merger
    -Financial situation
         -United, American, Eastern, TWA, and Pan American Airlines
               -Profits
               -Effect on Wall Street                            Conv. No. 462-13 (cont.)
         -Thomas S. Gates, Jr.
    -A possible meeting
         -Flanigan’s work
    -Possible need for White House expert
         -Jeb Stuart Magruder
               -Supersonic Transport [SST] work
         -Qualifications
               -Banking, insurance, airline, and Civil Aeronautics Board [CAB]
                      jurisdictions
               -Chief executive officers
                      -Bert S. Cross
                      -Robert C. Tyson
               -Clay
               -Dewey
               -Albert H. Smith, Jr.
               -Walter N. Thayer
               -Frederic G. Donner
         -List of recommendations
               -Shultz’s role
    -Lockheed merger
         -Mitchell
         -McLaren
         -President’s position
         -Possible Connally conversations
         -President’s goal
         -Mitchell
         -Dan [Surname unintelligible]
         -Justice Department
               -Possible leak

Unemployment
    -Figures
         -Trend
    -Average work week
                                  43

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                             (rev. 9/08)



-Rates of employment
-Size of workforce
      -Factors
-Figures
      -Administration stance
           -Public relations
                 -Public statements
                       -President’s position              Conv. No. 462-13 (cont.)
                             -Unity
           -Comparison to 1930s
                 -Franklin D. Roosevelt’s speeches
                       -Confidence
           -Credibility
                 -McCracken, Shultz
                 -Confidence
                       -President’s position
                 -Roosevelt’s example
                 -Public statements
                       -Administration spokesman
                       -President’s comments
                             -Laos
                             -Cambodia
                 -Compared with Dwight D. Eisenhower’s D-Day landing
                 -Compared with President’s Vietnam policy
      -Press position
           -Bias
      -Administration position
-Possible wage and price controls
-Figures
      -Administration position
           -Credibility
                 -Press
           -Federal Reserve Board
                 -Burns
                       -Economic policy
                 -Effect of criticism
           -Need for unity
                 -Eisenhower administration example
                       -Federal Reserve Board
                       -George T. Humphrey
                       -Robert B. Anderson
                       -Jim Bains [sp?] [?]
                                        44

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                   (rev. 9/08)



                -Burns’ position
                -Press
                     -Credibility
                     -President’s timing of press conferences
                     -President’s statement about press at March 4, 1971 press conference

Quadriad
    -Relationship with the President                          Conv. No. 462-13 (cont.)
    -Burns
         -President’s relationship
    -Advisory capacity
         -Compared with President’s use of Henry A. Kissinger, William P. Rogers, and
               National Security Council
               -Response to press conference question
    -Federal Reserve Board
         -Burns
         -Position
    -Shultz
    -McCracken
    -Connally
         -Uses
               -SST testimony

SST
      -President’s decision
            -Burns’ position
      -Testimony
            -George H. Mahon’s assessment
            -Connally
            -Warren G. (“Maggie”) Magnuson
            -William Proxmire
                  -Support
                  -Compared with Wayne Morse
                  -A previous filibuster
      -Administration’s position
            -Importance

Interest rates
      -Need for a decrease
            -Connally’s view
      -Percentage
      -M1 money supply
                                       45

                    NIXON PRESIDENTIAL MATERIALS STAFF

                               Tape Subject Log
                                  (rev. 9/08)



     -Need for administration action
     -Prime rate decrease
           -Extent
           -Effect
                 -General Motors
                 -Average American
     -Foreign capital
     -Burns’ view                                           Conv. No. 462-13 (cont.)
     -M1 money supply
     -Federal Reserve Board action
           -Long-term rates
     -New public offerings of corporate securities
           -Trends in recent years
           -Current situation
           -Reasons
                 -Expansionary effect
                       -Effect on interest rates
     -Federal actions
           -Monetary policy
                 -Possible negative effect
     -Banking
           -Charles G. (“Bebe”) Rebozo’s view
     -Effect of prosperity
     -Statements by Burns and Connally
           -Internal, public
           -Alfred Hayes’ press conference
           -New York Times
     -Possible Federal actions
           -Short-term rates
           -Long-term rates
           -Burns’ forthcoming Congressional testimony

Dupont brokerage firm
    -Possible insolvency
    -Connally’s previous conversations
          -Gustave L. Levy of Goldman Sachs
          -Bernard J. (“Bunny”) Lasker
    -H. Ross Perot
          -Financial support
                -Connally’s efforts
    -Possible Securities and Exchange Commission [SEC] action
    -Possible action by Burns and Connally
                                        46

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                   (rev. 9/08)



           -Call from Connally to Perot
     -Possible action by Perot
           -SEC
                 -Possible actions
                 -Possible meeting between Perot and SEC
     -Securities Investors Protection Insurance Corporation [SIPIC]
     -SEC and Federal Reserve Board rules
           -Violations                                           Conv. No. 462-13 (cont.)
           -SIPIC
                 -Possible actions
                       -Burns’ view
     -Connally’s forthcoming call to Perot
           -Administration efforts
     -President’s instructions
           -Lockheed and Penn Central comparisons
     -Anti-trust actions
           -Shultz’s instructions
                 -Study
           -Domestic Council review
                 -John D. Ehrlichman
                 -John W. Dean, III and Egil (“Bud”) Krogh, Jr.
           -President’s position
                 -Enforcement
                 -Mergers
                       -Criteria
     -Dupont family actions
     -Perot’s actions
           -Withdrawal of financial support
           -Purpose
     -Stanford University research study
     -Connally’s forthcoming call to Perot

Milk price supports
     -Parity level
           -Clifford M. Hardin
     -Importance
     -Wilbur D. Mills
     -Department of Agriculture, Shultz’s position
     -Cost estimates
           -Department of Agriculture
           -Mills
     -Importance
                                           47

                         NIXON PRESIDENTIAL MATERIALS STAFF

                                    Tape Subject Log
                                       (rev. 9/08)



         -Mills
         -Cheese
         -President’s position on parity level
         -Cost estimates
               -Land O’ Lakes of Sarasota, Florida
         -Possible effects
         -Mills
         -Hubert H. Humphrey                                        Conv. No. 462-13 (cont.)
         -Mills
         -Farmers’ lobby
               -1970 campaign
               -Compared with Congress of Industrial Organizations [CIO]
               -Mills
         -Cheese, school milk
         -Farmers’ lobby
               -Program
         -Effect on textile quotas
         -Government actions to date
               -Cheese for school lunch program
                     -Office of Management and Budget [OMB] response
               -Political and trade implications


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BEGIN WITHDRAWN ITEM NO. 1
[National Security]
[Duration: 58s ]


    JAPAN


END WITHDRAWN ITEM NO. 1

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    Milk price supports
         -Farmers’ lobby
               -Price goal
         -Possible effect on production
                                        48

                    NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                   (rev. 9/08)



          -Hardin
     -US consumption of dairy products
          -School lunch program
     -Effect on farm program, economy as a whole
          -Mills
     -Possible action
     -Cheese and school milk program
     -Possible meeting between the President and Mills        Conv. No. 462-13 (cont.)
          -An anecdote
     -House Ways and Means Committee
          -John W. Byrnes
          -Mills
          -Byrnes
          -Social Security and Welfare Reform
     -Possible meeting between Connally and Byrnes

President’s schedule
     -Nelson A. Rockefeller
     -Rochester trip cancellation
     -Forthcoming Evening at the White House
           -Thelma C. (Ryan) (“Pat”) Nixon’s birthday party
           -Invitations
           -Entertainment
                 -Irish singers
           -Irish Prime Minister [John M. (“Jack”) Lynch]
           -Refreshments
           -Shultz’s wife

Ireland
      -Lynch
      -History
           -Great Britain
           -Potato Famine
                -Immigration to US
      -View of US

Economy
    -Capital expenditures
         -Increases
         -Trend
               -Importance
         -Commerce Department figures
                                        49

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                   (rev. 9/08)



     -Need for credibility
          -Press
                -President’s relations with the press
                      -Statement at March 4, 1971 press conference
     -Money supply
          -Report by Burns
                -President’s understanding
                -Federal Reserve Board action                   Conv. No. 462-13 (cont.)
                -Hayes
          -President’s understanding
          -Weekly figures
                -President’s staff’s understanding
          -Bankers’ position

President’s staff
     -Kissinger and Rogers
     -Need for unity
     -Comparison with Johnson’s staff
           -Clark M. Clifford
                  -Vietnam policy
           -H. H. Humphrey
     -Need for unity
           -Teamwork
           -James B. (“Scotty”) Reston
           -Winston S. Churchill’s On the Eastern Front
                  -Lessons of World War I
                       -Leadership
                             -Austria
                             -Soviet Union
                             -Germany
                             -Erich F. W. Ludendorf
                             -Helmut von Moltke

Economy
    -Quadriad
        -Press comments
              -President’s response
        -Meetings
        -Frequency of President’s contacts with individual members
    -Money supply
        -Connally’s testimony
              -Shultz’s, McCracken’s, and Burns’ responses
                                              50

                        NIXON PRESIDENTIAL MATERIALS STAFF

                                   Tape Subject Log
                                      (rev. 9/08)



         -Wage and price increases
              -Effect on individual savings
                    -President’s position
         -Need for unity
              -Burns, McCracken, Connally
                    -Effect
              -President
              -Ronald L. Ziegler                             Conv. No. 462-13 (cont.)


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BEGIN WITHDRAWN ITEM NO. 3
[National Security]
[Duration: 3m 59s ]

    MIDDLE EAST

END WITHDRAWN ITEM NO. 3

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    Economy
        -Need for unity
        -Interest rates
              -Burns’ forthcoming Congressional testimony
                    -Connally’s response
                         -President’s position
                         -Federal Reserve Board
                    -Press reports
        -Burns’ report to the President

    President’s schedule
         -Forthcoming Rockefeller meeting
               -Time
               -Purpose
                     -Revenue sharing
                     -Reorganization

    Connally’s schedule
        -Possible meeting with Rockefeller
              -New York
                                               51

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                          (rev. 9/08)




Burns and McCracken left at 12:47 pm

          -Possible press briefing

Rose Mary Woods entered at an unknown time after 12:47 pm

     Evening at the White House                                Conv. No. 462-13 (cont.)
          -Invitations
                -Cabinet members
                -Mr. and Mrs. Burns
                -McCracken
                -Connally

Woods left at an unknown time before 1:00 pm

Ziegler entered at an unknown time after 12:47 pm

     Unemployment
         -July 1
         -Press coverage
               -James D. Hodgson’s statement
         -Post-Quadriad briefing
               -Press questions
               -Connally’s possible statement
                    -Compared with confirmation testimony
                    -Connally’s role
                    -Compared with confirmation testimony
                    -New plant and equipment figures
                          -Shultz’s view
                    -Tone, content
                          -Shultz’s view
                          -President’s view

Ziegler left at an unknown time before 1:00 pm

     Burns
          -Actions
                -Effect on Administration
          -Shultz
          -Position
          -Interest rates discussion
                                              52

                              NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                          (rev. 9/08)



           -President’s demeanor

     Building trades
          -Agreements
                -Davis-Bacon Act
                -Acceptance prospects
                -Administration follow-up
                      -Possible problems                           Conv. No. 462-13 (cont.)
          -Wage and price freeze
                -Possible labor response
          -Davis-Bacon Act
          -Wage and price controls
                -President’s position

Alexander P. Butterfield entered at 1:00 pm

     President’s schedule

Butterfield left at 1:02 pm

     Milk price supports
          -Shultz’s preparation
          -Mills
          -Administration position
          -Possible announcement
                -Effect
          -Department of Agriculture
                -President’s position
          -Political implications
          -Compared to steel
                -Connally’s view
          -Farmers
                -Importance
                -Parity levels
                -Importance compared to other industries
                      -Grain negotiations with Great Britain
                -Connally’s conversation with Hardin
                -President’s position
                -Cheese

     President’s schedule
          -Rockefeller meeting
                                             53

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                          (rev. 9/08)



                -Shultz’s attendance

     Connally’s schedule
         -Hardin
         -New job
         -Confirmation testimony
         -A party in New York
               -John Loeb [?]                                  Conv. No. 462-13 (cont.)
               -Rockefeller

Connally and Shultz left at 1:05 pm