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Conversation: 606-002

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Start Date: 28-Oct-1971 3:03 PM

End Date: 28-Oct-1971 5:54 PM

Participants:

Nixon, Richard M. (President)Connally, John B.Burns, Arthur F.McCracken, Paul W.Shultz, George P.Peterson, Peter G.Flanigan, Peter M.Bull, Stephen B.Ziegler, Ronald L.Kissinger, Henry A.

Recording Device: Oval Office

Full Tape Conversation Start Time: 00:04:26

Full Tape Conversation End Time: 02:55:23

606a.mp3

606b.mp3

NARA Description:

On October 28, 1971, President Richard M. Nixon, John B. Connally, Arthur F. Burns, Paul W. McCracken, George P. Shultz, Peter G. Peterson, Peter M. Flanigan, Stephen B. Bull, Ronald L. Ziegler, and Henry A. Kissinger met in the Oval Office of the White House from 3:03 pm to 5:54 pm. The Oval Office taping system captured this recording, which is known as Conversation 606-002 of the White House Tapes.

Nixon Library Finding Aid:

Conversation No. 606-2

Date: October 28, 1971
Time: 3:03 pm - 5:54 pm
Location: Oval Office

The President met with John B. Connally, Arthur F. Burns, Paul W. McCracken, George P.
Shultz, Peter G. Peterson, and Peter M. Flanigan.

     Greetings
          -Burns

     Tricia Nixon Cox
           -Schedule
                -New York
                -Edward W. Brooke
                                         2

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                  (rev. 10/06)
                                                          Conv. No. 606-2 (cont.)


The President's schedule
     -New York
     -Chicago

Texas
     -Connally's schedule
           -Leonard F. McCollum
     -Spiro T. Agnew
     -George H. W. Bush

United Nations [UN] vote expel Taiwan
     -The President’s view
     -People’s Republic of China [PRC]
     -South Africa
     -Belgium
     -South Africa
     -Portugal
     -African nations
     -Asian nations
     -Israel
           -Middle Eastern nations
           -Congo
           -Latin America
     -Arabs
     -PRC

US foreign policy
     -International Labor Organization [ILO]
           -George Meany
           -Taiwan
           -The President’s view
           -Meany
           -Shultz’s view
           -Arnold R. Weber
     -Labor representatives
           -Meany's suggestion
           -James R. (“Jimmy”) Hoffa
                                         3

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                  (rev. 10/06)
                                                          Conv. No. 606-2 (cont.)


Quadriad meeting
    -Schedule
          -Part One
                -Peterson
                -Flanigan
                -International concerns
                -Connally’s forthcoming trip to Asia
          -Part Two
                -Domestic situation
                      -Monetary policy
    -International concerns
          -Connally’s forthcoming trip
                -Itinerary
                      -Japan
                      -Indonesia
                      -Thailand
                      -Saigon
                      -South Vietnam
          -Peterson
                -Working group

International monetary situation
      -Timing for solutions
           -Japan
                 -Currency valuation
      -Connally
           -Congress
           -Business leaders
      -Timing of negotiations
      -Stock market
      -Japan
      -Canada
      -Europe
           -William D. Eberle
      -France
           -Georges J.R. Pompidou
           -Surtax
                 -Germany
                 -Latin America
                       -Mexico
           -Peterson’s view
                                  4

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                            (rev. 10/06)
                                                    Conv. No. 606-2 (cont.)


           -French policy
                 -Germany
                 -Agriculture
     -Connally
     -Henry A. Kissinger
     -Currency revaluation
     -Gold price question
           -Germany
           -Japan
           -US position
           -International Monetary Fund [IMF]
-Monetary situation
     -Convertibility issue
           -Phase One
-Trade
     -Less developed countries
           -Mexico
           -Taiwan
           -Korea
                 -Trade surplus
                       -Effect
                            -Exchange rates
     -Surtax
-Monetary situation
     -Gold price
     -France
     -Surtax
           -Japan
           -Canada
           -Europe
-European community
     -Forthcoming summit
           -Monetary situation
           -Burden sharing
                 -Defense
                       -US role
     -Loans
     -Aid programs
-Japan
-Canada
-Europe
                                   5

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/06)
                                                    Conv. No. 606-2 (cont.)


     -Trade concessions
     -Agriculture
     -Domestic impact of negotiations
           -1972 election
           -Future trade legislation
     -Eberle
     -German offset agreement
           -State Department
           -Paul A. Volcker
           -Connally’s view
     -Trade
           -Politics
           -Agriculture
     -Concessions
           -Timing
                 -Political benefit
-Domestic agriculture prices
     -Political considerations
           -Burns’s view
     -Price of corn
           -Dock strike
           -Ohio, Indiana, Illinois, Iowa
     -Price of wheat
     -Price of hogs
     -Farm income
           -Price of corn
     -France
     -Germany
           -Willy Brandt
           -Political parties
                 -Christian Democratic Party
-France
     -Political consideration
           -Socialists
     -US relations
           -Economics
           -Middle East
           -The President’s view
                 -US policy
                 -Pompidou
     -Accumulation of gold
                                     6

                NIXON PRESIDENTIAL MATERIALS STAFF

                            Tape Subject Log
                              (rev. 10/06)
                                                               Conv. No. 606-2 (cont.)


            -Farmers and small shopkeepers
      -Monetary situation
            -Price of gold
                  -US dollars
                  -Francs
      -Politics
            -Price of gold
            -Gaullists
      -Monetary situation
            -Gold prices
                  -Convertibility
                  -French domestic politics
                  -Peterson’s view
                  -Connally’s view
                        -Pompidou
                        -Devaluation
                  -Burns's view
                        -Burns’s previous conversation with French officials
                             -Francs
                             -Valery Giscard D'estaing
                             -Oliver B. Wormser
                             -Franc valuation
            -Japan
            -Great Britain
-Price of gold
      -Effect of change in price
      -Congressional interest in gold prices
            -Henry S. Reuss
            -William P. Proxmire
            -Historical review of gold prices
                  -Inflation
                  -Market system
      -Foreign nations
            -South Africa
            -Union of Soviet Socialist Republics [USSR]
            -France
-Monetary situation
      -Convertibility issue
            -Gold
                  -Special Drawing Rights [SDR]
                  -Japan
                                   7

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/06)
                                                           Conv. No. 606-2 (cont.)


                -Great Britain
                -France
                -Germany
                -Italians
-Great Britain
     -Lord Leslie Kenneth O’Brien
     -Anthony Lysberg, Lord Barber
     -Civil Service
           -Barber
                 -Burns’s view
                 -Connally’s view
           -Edward R.G. Heath
-US objectives
     -Gold prices
     -Trade
     -Japan
     -Canada
     -Trade
           -Impact on foreign policy
           -Peterson’s view
                 -Balance of payments
     -Europe
           -Group of Ten meeting
                 -European Economic Community
                      -Gold
                      -Volcker
-Gold prices
     -France
     -IMF
     -Leaks
     -Proxmire
     -Reuss
-Monetary situation
     -Exchange rates
           -US goals
           -Floating exchange rates
                 -Connally’s previous address to the IMF
                      -Party roles
                      -Effect on price of gold
     -Gold issue
     -Exchange rates
                                               8

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/06)
                                                               Conv. No. 606-2 (cont.)


                     -Fixed compared with floating rates
                          -Trade
                          -Burden sharing
                -Japan
                -Canada

Stephen B. Bull entered at an unknown time after 3:03 pm.

     The President's schedule

Bull left at an unknown time before 4:11 pm.

     International Economy
           -Separability of issues
                -Canada
                -Japan
                      -Currency
                -Germany
                -Goals for negotiations
                      -Realignment of currency parities
                      -Convertibility issue
                             -SDRs
                      -Trade
                             -Japan
                                   -Tariffs
                                   -Import quotas
                             -Canada
                             -Europeans
                                   -Agriculture
                -Monetary system
                      -Role of gold
                      -US dollar
           -US concerns
                -Monetary system
                -Trade adjustments
                -Burden sharing
                      -European views
                -Convertibility
                      -Exchange rates
                -Domestic politics
                      -Connally’s view
                                                 9

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/06)
                                                                Conv. No. 606-2 (cont.)


                           -Realignment of currency
                                -Impression of US gains
                                -Trade concessions
                           -Defense burden sharing

Bull entered at an unknown time after 3:03 pm.

     The President's schedule
          -Photograph opportunity

Bull left at an unknown time before 4:11 pm.

     International economy
           -US policy discussions
           -Canada
           -Europe
           -Forthcoming US-USSR Summit
           -Canada
           -Europe
                 -Brandt
                 -Charles A.J.M. De Gaulle
                 -European security
                 -Middle East
           -Japan
           -Forthcoming US-PRC and US-USSR Summits
           -France
                 -Domestic Politics
                      -Pompidou
                      -Giscard d'Estaing
           -Connally's forthcoming trip to Asia
                 -Japan

Ronald L. Ziegler entered at 4:11 pm.

     The President's schedule
          -Photograph opportunity
               -Connally’s forthcoming trip to Japan
               -Location

Ziegler left at 4:12 pm.
                                               10

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                         (rev. 10/06)
                                                                   Conv. No. 606-2 (cont.)


     Forthcoming Quadriad meeting
          -Canada
          -Japan
          -Connally
               -Schedule
                    -Discussions
                         -Burns

     Public relations
          International economics
                 -Japan
                 -Canada
                 -Trade
                       -McCracken’s view
                       -Trade compared to monetary situation
                       -Textile Agreement
                             -The President’s view
                       -Automobiles
                             -Japan
          -Reaction in US on UN vote to expel Taiwan
                 -Delegate behavior
                       -Africans
                       -Ronald W. Reagan
                 -African nations
                       -Botswana
                             -State Department
                             -South Africa
                                   -The President’s view
                             -Mexico
          -Mexico

     Schedule

The President, Connally, Flanigan, and Peterson left at 4:17 pm.

     Economics
         -Redemption of bonds
         -Convertibility
         -Price of gold

The President and Connally entered at 4:23 pm.
                                                 11

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/06)
                                                               Conv. No. 606-2 (cont.)



     Domestic economy
         -Treasury Department
         -Leading economic indicators
         -Henry Morgenthau, Jr.
         -Gross National Product [GNP]
               -Third quarter figures
               -Inventory
               -Sales
         -Money supply
         -History of business cycles

Bull entered at an unknown time after 4:23 pm.

     The President's schedule
          -Forthcoming meeting with Henry A. Kissinger

Bull left at an unknown time before 5:02 pm.

     Domestic economy
         -Business cycles
               -Recoveries
               -Recession
               -Factors in economic recovery
         -Employment
               -Length of work week
               -Household survey
                     -Payroll figures
         -Final sales
               -Government compared with private
         -Retail trade
         -Consumer spending
         -Business capital investments
               -Burns’s view
                     -Investment tax credit
         -Third quarter
               -GNP
               -Unemployment
         -Investment tax credit
               -Effect on economy
               -Consumer demand
                                    12

                NIXON PRESIDENTIAL MATERIALS STAFF

                            Tape Subject Log
                              (rev. 10/06)
                                                     Conv. No. 606-2 (cont.)


-Taxes
      -Deductions
      -Social security taxes
            -Proposed increase
-Congress
-Fiscal compared with monetary stimuli
      -Budget deficit
-Possible business stimulus
      -Consumer spending
            -Capital spending
      -1972 election
-Investment boom
      -Excess capacity
-Possible reduction of taxes
      -Congress
-Business
      -Feelings about wage and price controls
            -Money supply
                  -Inflation
-Expenditures
      -Agriculture
      -1972 election
-Agriculture
      -Price support for corn
      -Dock strike
            -Taft-Hartley injunction
                  -Local effects
                        -Price of corn
                        -Lake Charles, Louisiana
                        -Texas
                        -New Orleans
                        -Philadelphia
                        -New York
-Budget deficit
      -Revenue sharing
      -Outlays in politically critical states
            -Michigan
            -California
-Monetary situation
      -Currency in circulation
            -Rate of savings
                                             13

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                     Tape Subject Log
                                       (rev. 10/06)
                                                                      Conv. No. 606-2 (cont.)


                -Federal Reserve system
                -Savings deposits
                -Federal Reserve system
                -Loans and investments of commercial banks
                -Business purchases of foreign currency
                      -US Treasury
                -Individuals' purchases of securities
                -Interest rates
                      -Federal Reserve policy
                      -Relationship to economy
                      -Prospects for 1972
                -Money supply
                -Wall Street brokers
                      -Concerns about liquidity
                      -Flanigan
                      -Previous announcement of wage and price controls
                      -Burns’s views
                      -Bernard J. (“Bunny”) Lasker
                      -Burns's possible meeting
           -Mood of the nation
                -Texas
           -Money supply
                -Citibank
                -Interest rates
                -Inflation
                -Federal Reserve policy
           -Recent performance
                -Inflation
                -Corporate profits
                -Employment
                -Corporate profits
                      -Capital investment
                      -Unemployment

Kissinger entered at 5:02 pm.

           -Mood of nation
                -Pay Board
                -Price Commission
           -Taxes
                -Senate Finance Committee
                                   14

                NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/06)
                                                           Conv. No. 606-2 (cont.)


            -Personal exemption
      -Wilbur D. Mills
-Interest and dividends
      -Committee's guidelines
            -Effect on Pay Board
            -Ideal rate
                  -Inflation
            -Effect on Pay Board
-Connally’s forthcoming trip to Asia
-Money supply
      -Fiscal and monetary policies
            -Post-freeze program
      -Economy
            -Third quarter compared to second quarter
                  -Private demand for goods and services
                        -GNP
      -Interest rates
            -Inflation
      -Interest rates
      -Expectations of the public
            -Federal Reserve's policy
      -Interest rates
      -Private sector expansion
      -Flow of funds
            -Government deposits
            -Savings deposits
-Historical perspective
      -1960
            -Steel strike
            -James P. Mitchell
            -Time, Life, Fortune magazines
            -Burns
            -Mitchell
            -Burns’s view
                  -Federal Reserve system
                  -Taxes
            -Unemployment
            -Robert B. Anderson
            -Maurice H. Stans
            -Raymond J. Saulnier
            -Mitchell
                                               15

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/06)
                                                                          Conv. No. 606-2 (cont.)


                     -The President
                     -Unemployment
                          -Inflation
                     -Dwight D. Eisenhower
          -Inflation
                -Interest rates
          -Political significance
                -The President’s view
                       -Unemployment compared to inflation
                       -Inflation
                             -Compared to other industrialized nations
                             -World War II
                             -World War I
                       -Economy
                             -Inflation
                             -Objective for February 1972
                             -William McChesney Martin
                             -George T. Humphrey
                                   -Conversation with the President in 1964
                                        -Federal Reserve system
                                              -1960

     McCracken's schedule
         -Tokyo
              -Eisaku Sato
              -Connally’s forthcoming trip

Burns, McCracken and Shultz left at 5:20 pm.

     Previous conversation between Shultz and Connally
          -Gold price
          -Convertibility
          -Possible memorandum from the President
                -The President’s policy

     International monetary situation
           -Convertibility
                -McCracken
                -Burns
           -IMF
                -Jelle Zijlstra
                                        16

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                Tape Subject Log
                                  (rev. 10/06)
                                                                    Conv. No. 606-2 (cont.)


                -Netherlands
     -Burns
           -Zijlstra
           -Volcker
           -Views on gold
     -Convertibility
     -Peterson’s views
           -Timing of negotiations
           -International banking
     -US foreign relations
           -Connally’s views
                 -British
                 -Germans
                 -Policies' effect in 1972
                       -Revaluation of currency
                       -Surcharge
                             -Revenue
                             -Imports
                       -Revaluation of currency compared to trade
                 -SDR
                 -Gold prices
                 -Pay Board and Price Commission
                 -France
                       -Trade negotiations

US politics
    -UN vote to expel Taiwan
            -Democrats
                  -Connally’s view
                       -Lawrence F. O'Brien
                       -Racial make-up of party support
            -The President's statement
            -Portrayal of UN delegates
                  -Columbia Broadcasting System [CBS]
                       -Kissinger’s view
                  -Connally’s view
            -Delegates

Connally's forthcoming trip to Asia
    -Kissinger’s forthcoming memorandum to Connally
           -Okinawa
                                  17

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                            (rev. 10/06)
                                                           Conv. No. 606-2 (cont.)


          -Sato
          -The President’s instructions
                -Voice of America [VOA] station
                -American bases
                     -The President's conversation with Takeo Fukuda
                -Japan
                     -Ratification of the treaty
-Vietnam
      -Ellsworth F. Bunker
            -Relationship with the President
-Kissinger’s forthcoming cable to Connally
      -Talking points
      -Indonesia
      -Thailand
      -Lt. Gen. T.N.J. Suharto
            -Kissinger’s view
                  -State Department
                  -Soviet Union
                  -US assistance
                        -Level of assistance
                  -US Ambassador to Indonesia
      -US-PRC relationship
            -Indonesia
            -Thailand
-Staff
      -William H. Sullivan
      -Herman H. Barger
            -State Department
      -Sullivan
            -Kissinger’s view
            -W. Averell Harriman
            -Laos
            -The President’s view
-The President’s instructions
      -Sullivan’s possible participation
            -Connally’s meetings
            -Japan
            -Suharto
      -Barger’s possible participation in meetings
      -Sato
      -Participation of US Ambassadors in meetings
                                 18

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                            (rev. 10/06)
                                                     Conv. No. 606-2 (cont.)


      -Forthcoming letter from Kissinger to Sato
      -Connally's relationship with US Ambassadors
           -Vietnam
           -Thailand
                  -Kissinger’s view
                  -Leonard Unger
      -Thailand
           -Thanom Kittikachorn
           -US-Thailand relationship
                  -US role in Southeast Asia
           -[Unintelligible]
           -State Department
                  -Military assistance program
           -Thanom
                  -The President’s view
           -Nixon Doctrine
           -US-PRC relationship
      -US role in Asia
           -Indonesia
           -Thailand
           -Military and economic roles
      -South Vietnam
           -Bunker
           -Nguyen Van thieu
                  -Connally’s possible meeting
           -Democratization
           -The President’s view
      -Francis J. Galbraith
           -Suharto
           -Indonesian Foreign Minister Adam Malik
                  -The President’s view
-Philippines
      -Timing of Connally’s visit
      -Ferdinand E. and Imelda Marcos
      -Carlos P. Romulo
      -US role in Asia
           -Vietnam
                  -US objectives
-Japan
      -Negotiations
           -Burns's view
                                             19

                        NIXON PRESIDENTIAL MATERIALS STAFF

                                     Tape Subject Log
                                       (rev. 10/06)
                                                                   Conv. No. 606-2 (cont.)


                         -Convertibility
              -European economic community
              -PRC
              -US role in the Pacific
                   -Thailand
                   -Indonesia
                   -Group of Ten
                   -The President's interest in the Pacific area
                   -Importance of the Pacific to US
              -Supersonic transport [SST]

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BEGIN WITHDRAWN ITEM NO. 11
[National Security]
[Duration: 12s ]


    JAPAN


END WITHDRAWN ITEM NO. 11

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                   -The President’s view
              -Kissinger's forthcoming meeting with the Japanese Ambassador
                   -PRC

    Connally's forthcoming trip
        -Kissinger’s forthcoming memorandum
               -Japan
                     -Okinawa
        -The President's forthcoming visit to PRC
               -US-PRC relationship
        -US policy toward South Vietnam
               -Thieu
               -Thailand
               -Suharto
               -US policy
                                              20

                            NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                         (rev. 10/06)
                                                                 Conv. No. 606-2 (cont.)


                      -The President’s view
                      -Senate
                      -Congress
                      -US public opinion
                -PRC
                -Kissinger’s forthcoming memorandum
                      -Saigon
                      -Timing
                -Bunker
                -Sullivan
                -Thieu
                -Ngo Dinh Diem
                -The President’s instructions
                      -US policy toward Thieu
                            -Sullivan
                            -Barger
           -Forthcoming letters from the President
                -Marcos
                -Suharto
                -Sato
                      -Participation of US Ambassador
                      -State Department
                      -Economic matters
                      -Fukuda
           -Aircraft

     Idanell (”Nellie”) Connally
          -Participation in trip to Asia

     Connally's trip
         -Itinerary
                -Elmendorf Air Force Base
                -Adm. John S. McCain, Jr.
                -Tokyo
                -Saigon
                -Nellie Connally

Connally left at 5:54 pm.

     Kissinger's assignment
          -Talking paper for Connally
                                              21

                             NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/06)
                                                                       Conv. No. 606-2 (cont.)



     Connally trip
         -Sullivan
                -The President’s view

     Kissinger's schedule
          -Forthcoming State Dinner for Josip Broz Tito

Kissinger left at 5:54 pm.