Nixon White House Tapes — Conversation 006-172
Date: Wednesday, July 21, 1971 at 2:39 PM
Participants: Nixon, Richard M. (President); Connally, John B.
Recording device: White House Telephone
Source: https://www.easynixon.org/tapes/006-172

This transcript was generated automatically by AI (WhisperX) and has not been reviewed for accuracy. Do not cite it as authoritative.

[0:01] Hello.
[0:01] Mr. President, I have Secretary Conley calling you.
[0:03] Yeah.
[0:06] All right, thank you.
[0:07] Hello.
[0:08] Yes, hi.
[0:08] We have to do a refinancing, which is normal in its scope.
[0:12] I wrote you a note about it yesterday, the day before, of about $5 billion.
[0:18] This is just normally a routine thing, but today we think we're going to announce that we're going to use the authority which Congress gave us earlier this year to issue...
[0:30] some bonds in the 10-year time frame, 10-year bonds.
[0:35] This will be the first time we've used the authority to issue bonds longer than seven years at more than the 4.25% interest rate.
[0:43] We'll put them out at 7%.
[0:45] And then we're going to have to discount them a bit to make them marketable.
[0:50] But I wanted just to tell you about it.
[0:52] I don't think we've talked about it.
[0:54] We've met with all our investment bankers committee.
[0:57] We've met with the American Bankers Committee.
[0:59] But I sure didn't want to do it without you just knowing about it.
[1:02] I think it's fine.
[1:03] I think it's all right.
[1:04] I'm going to be criticized by Patman and Royce.
[1:08] for issuing these 10-year bonds at this rate of interest, but hell, this is what the rate of interest is, and we got to finance this debt.
[1:17] Yeah, yeah.
[1:18] But I just wanted to know.
[1:19] Well, there's nothing, you mean it's the only way you can really get the money, I guess.
[1:22] Oh, yeah, oh, yes.
[1:23] Now, we don't have to issue the 10-year bonds, but we're issuing only probably half a billion of 10 years.
[1:31] We think that's all that will be taken up.
[1:34] Does it have an effect on interest rates generally?
[1:37] Well, no, we don't think so, and we've been arguing about that for two hours.
[1:44] And the reason we're doing it the way we are is because we don't think it'll affect.
[1:48] As a matter of fact, we think it might have.
[1:49] They all argue that it'll have a salutary effect on long-term rates.
[1:53] I don't think so, but all the financial experts think it will.
[1:56] I don't.
[1:57] But I don't think it'll hurt it.
[1:58] Right.
[2:00] We don't have to issue it, but out of the $5 billion, see, we again are crowding too much of our debt in too short a period of time.
[2:06] I see.
[2:07] We've got to get some of this debt over a longer span of time.
[2:11] This is why we fought so for the authority.
[2:13] Right.
[2:14] But even so, we won't put out but probably half a billion out of the $5 billion refinancing.
[2:20] Sure.
[2:20] It won't be but 10% of it that will go in the long-term 10-year time frame.
[2:25] But I don't think there's any problem with it at all.
[2:31] I'll take some flack because of it, but I want you to know it because we're using this authority for the first time.
[2:36] Sure.
[2:37] Well, you've looked it over, and if that's the thing to do, that's what we'll do.
[2:41] Fine.
[2:42] All right, sir.
[2:42] And I'll see you at 3 anyway.
[2:44] 3 o'clock.
[2:44] Right.
[2:45] Right.
[2:45] Okay.
[2:45] Thank you.
[2:46] Good.