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Conversation: 542-004

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Start Date: 22-Jul-1971 10:51 AM

End Date: 22-Jul-1971 11:36 AM


Nixon, Richard M. (President)McCracken, Paul W.Sanchez, ManoloWhite House operatorConnally, John B.Rumsfeld, Donald H.

Recording Device: Oval Office

Full Tape Conversation Start Time: 01:17:30

Full Tape Conversation End Time: 02:02:46



NARA Description:

On July 22, 1971, President Richard M. Nixon, Paul W. McCracken, Manolo Sanchez, White House operator, John B. Connally, and Donald H. Rumsfeld met in the Oval Office of the White House from 10:51 am to 11:36 am. The Oval Office taping system captured this recording, which is known as Conversation 542-004 of the White House Tapes.

Nixon Library Finding Aid:

Conversation No. 542-4

Date: July 22, 1971
Time: 10:51 am - 11:36 am
Location: Oval Office

The President met with Paul W. McCracken.

     Foreign policy
          -The People's Republic of China [PRC]
               -Recent US initiative
                     -William P. Rogers
                     -Henry A. Kissinger, the President
                                -Confidential nature of effort
                                      -Secret channels
                                            -Other foreign governments
          -US-PRC relations and US-Union of Soviet Socialist Republics [USSR] relations
               -Surprise element in breakthrough
                     -Absence of contact during past twenty years
                           -Great Britain, France
               -Kissinger's conversation with Chou En-lai
               -Kissinger’s conversations with the USSR
          -PRC initiative
               -Youth reaction
                     -Generation differences
                     -Future outlook
               -Press coverage
                     -TV commentator
               -Staff meeting
                     -Discussion of breakthrough
                           -The PRC
                                -Position in the world
                                      -Other Communist countries
                                            -North Vietnam
                                -Reasons for action

Manolo Sanchez entered at an unknown time after 10:51 am.



                                     Tape Subject Log
                                       (rev. 10/08)

Sanchez left at an unknown time before 11:36 am.

     The economy
          -John B. Connally (?)
          -Council of Economic Advisors [CEA]
                       -McCracken's possible departure
          -Changes in policy
          -July statistics
          -Possible action
                -John Kenneth Galbraith's comments
                       -Wage and price controls
                -Projections for balance of 1971
                -McCracken's role
                -Defense Department manpower and defense industry
          -McCracken’s forthcoming resignation
          -Rate of expansion
                -Projection on increase
          -Possible action
                -Tax initiative
                -Wage and price controls
                       -Labor issues
                            -Steel strike settlement
                                  -Winton M. (“Red”) Blount
                            -Postal strike
                -McCracken, Herbert Stein, Ezra Solomon
                -Psychological perceptions of economic situation
                       -Compared to reality of situation
          -George Meany
                -Connally, Arthur F. Burns
          -McCracken's view of administration’s approach
          -Recommended approach
                -Tax action


                     Tape Subject Log
                       (rev. 10/08)

-International trade
      -Effect of forthcoming PRC trip
      -Need to improve US competitiveness
      -Exchange rate of the US dollar
      -Effectiveness of action
      -Price of gold
            -Fixed price
                  -Treasury Department                  Conv. No. 542-4 (cont.)
                  -Paul A. Volcker
      -Possible weakening of the dollar
      -Comments at international economic conferences
-Possible conversation between McCracken and Connally
-The Department of the Treasury
      -Reluctance to change
      -Staff’s backgrounds
-Gold prices
-Exchange rates
      -Ten percent change
      -Balance of payments
-Elimination of trade barriers
-Technical aspects of dealing with the price of gold
-Impact of action
      -Confidence in the dollar in financial markets
      -Domestic impact
            -Possible inflationary effect
                  -Labor unions
      -Connally's view
            -Yankee trader
-Action on taxes
      -Value added tax [VAT]
      -Burden of the middle income worker
      -Tax structure
            -International context
      -National sales tax advantage over national income tax
            -Michigan example


                                     Tape Subject Log
                                       (rev. 10/08)

         -Effect of resignation
                     -School semester at university
                          -Teaching job
              -Proposed economic action

     The economy                                                     Conv. No. 542-4 (cont.)
                -Effect of defense industries
                      -Vietnam troop withdrawals
                      -Southern California, Seattle
                            -Defense and aerospace jobs
          -Other issues
                -PRC initiative
          -International economic action
                -Weakening of the dollar
                      -Financial crisis
                -International trade
                      -International political position
          -McCracken’s pending resignation
          -Current situation
                -Retail sales, inventories
                -Gains in July statistics
          -Frequency of McCracken's meetings with the President
                -Stein, Solomon
                -Connally, George P. Shultz

[The President talked with the White House operator at an unknown time between 10:51 am and
11:32 am]

[Conversation No. 542-4A]

[See Conversation No. 6-182]

[End of telephone conversation]


                            NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/08)

     The PRC initiative
          -Effect of action

[The President talked with Connally between 11:32 am and 11:35 am]

[Conversation No. 542-4B]

[See Conversation No. 6-183]                                          Conv. No. 542-4 (cont.)

[End of telephone conversation]

         -Forthcoming telephone call to McCracken

     Solomon's schedule

     Forthcoming 1972 election (?)
          -Foreign policy
               -Laos, Cambodia, Vietnam war

Donald H. Rumsfeld entered and the President left at 11:36 am.

     McCracken’s staff

McCracken left at 11:36 am.