Nixon phone call with Colson on Arthur F. Burns and New York Stock Exchange

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Hello.

Mr. Colson, Mr. President.

Yeah, okay.

There you are.

Yeah, yeah.

A report from, well, I talked to four people at the lunch.

I would say that he, on balance, did a very good job and a helpful job.

Good, okay.

He said he would provide whatever money was needed.

that he didn't think that we needed to increase it right now, which provoked quite a discussion in the meeting, because a lot of people got up and said, you do.

But Cleary's opinion was that it was very upbeat.

Lasker, you know, Bunny's very emotional.

Bunny said, God, we've got to do something about the international situation.

That's typical of, I mean, Lasker's a traitor.

He gets excited.

Cleary, I think,

I talked to Al Gordon.

He said, don't worry about things.

He said, they're going fine.

He said, you're going to go through a shakedown period here of a few more weeks.

He said, everybody looks for it to turn around.

It's a better time to have it happen, and you'll get a sustained growth over the next year.

Gordon did say that the international situation was bothering people.

Right.

I understand that.

As a matter of fact, that came from everybody.

That's from everybody in New York.

You would expect that.

You would expect it in New York.

You've got DiNunzio, Levy.

Right.

Cleary doesn't seem to be bothered by that.

He said that's one of the typical excuses.

Well, it's an excuse, but we'll put that to Connolly and you can pass it on to Kisner.

It's got to be put to rest.

We will, but that's going to take three or four weeks, you know.

Well, as Gordon said, if you do it by the first of the year, you're fine.

The general feeling, I was surprised to hear this, was that

But Burns, who has great credibility, talked about you a great deal and said that the president has enormous support across the country.

He's doing the right thing.

You guys stop worrying about labor.

They're going to go along.

The president is leading and the people are behind him.

The Federal Reserve Board will provide a moderate expansion in the money supply as desired.

Then he got some comments about that.

And he said, all right, if we need to, we will provide a vigorous expansion through money supply.

So he really, he delivered the goods for us in terms of the money supply question.

It was interesting.

Cleary thought he was very upbeat on money supply.

Lasker thought he wasn't.

That's typical.

Money tends to be a little bit...

All right, but who knows?

Money reflects a hell of a lot of traders, though.

Well, he reflects the floor traders.

That's right.

He's down there with them all the time.

Get to the investment side, and they don't get the day-to-day pay.

You know, money comes off the floor after it goes down 11 points.

Yeah, he's really worried.

And he'll be up the next day when it's up 11 points and thinks everything's in hunky-dory, and neither is correct.

Neither is correct.

Really, Cleary and Levy...

And Gordon, I take as very solid guys.

And from the three of them, we got very good reports.

And it was well received.

They thought that Burns did his job well, and they do feel that the pressure has to be kept on him because his normal tendency is to shrink it.

heavily about inflation.

Yeah, I know that worries people.

That worries people because they think maybe he isn't fixing expansion.

But he balanced it off all right.

Well, that's good.

Well, we've done the best we can.

You know, how did the story get out to the effect that the White House had forced him to go up there or some damn thing?

I saw that in the news summary.

Well, I saw that in, I guess it was the Post yesterday morning.

I haven't any idea.

Do you think one of Burns' people put it out or something?

No.

I don't know.

I can't understand.

Burns wouldn't have done it, I'm sure.

No, I don't think he would.

And the only people around who knew about it were Sapphire and myself and Flanagan.

I sure as hell didn't talk to anybody.

No.

I trust Sapphire didn't.

I just don't think he would.

No, I don't either.

I think he's sensitive about that.

I don't think Pete would.

I don't know how the hell that could... As a matter of fact, I read the whole story.

They may have just interpreted it, frankly, from the fact that he was going up because he announced that he was.

Yeah.

And this was not off the record.

He did talk to reporters.

And so it was at his choosing, by the way.

And it was the whole Board of Governors of the New York Stock Exchange.

So I suspect that actually, Mr. President, when he announced he was going, some typical wise reporter figured, well, the market's in trouble, so Burns is going up.

It's the first time he'd ever addressed the New York Stock Exchange.

That's what he did.

Yes, I think so.

I think he had a helpful effect.

Gordon, by the way, doesn't feel we should be alarmed.

Gordon said... Usually, Gordon can be very negative at times.

Well, he said, I think things are in great shape.

He said, the only thing people...

Internationally.

They're talking about that, and they're still concerned about a profit squeeze.

They're afraid that... Profit squeeze?

Well... God, with a control on inflation and the rest, they're going to make some money.

Well, that's right.

And I said that to Al, and he said, well, it's just going to take people a while to get that point across.

And he said...

Well, they all want their hands held, don't they?

That's right.

Everybody I talked to tonight made the same point, that afterwards everybody was walking around saying, well, you know, we've got to know what they're going to do next down there, and it becomes a goddamn dependent on...

Waiting every day for what we're going to do.

Yeah, but apparently the present excuse is the international thing, and...

I see.

That's substituted for uncertainty over Phase II, huh?

Well, I think so.

I think, as a matter of fact, in another week, the Phase II stuff is going to be clear.

Oh, sure.

Conley will have a hell of an effect up there next Tuesday.

He can talk about the international thing in a way that I think if he's properly briefed in advance, he can put their fears to rest.

For a while, yeah.

Labor is going to stay in, Mr. President.

Are they?

Well, Meany told Fitzsimmons, I just got the report tonight also on this, but

privately the two of them talked today and while they didn't get what they wanted out of the meeting this time they lost by one vote on a couple of key things they did detect that we had been helping them and because some of the regulations that went into that meeting today were ones that Schultz had told Meany yesterday we were responsible for and Meany told Fitz just before he left for Florida he said

look, we're not walking out of this thing.

We'll stay with it.

We'll fight it.

We'll raise hell over it.

We'll stay in the meetings and try like hell to fight for our people, but we aren't going to get out.

And he stated it very categorically to Fitz.

So Fitz called me this afternoon.

He said, I don't think you have to worry.

He said, Meany isn't going to leave it.

I'm sure as hell not going to leave it.

And he

Yeah.

So he said, I think labor is going to stay with it.

So we may have ended up, frankly, with the best of both worlds.

Or doesn't appear we caved in.

We didn't give them, I mean, they didn't get a damn thing today, but they knew that we were behind the scenes trying to help them.

Yeah.

I think that took some of the sting out of Meany's feeling last week that Weber, Meany's problem last week was he thought Weber was... Our boy.

Was our boy.

And in fact, Weber wasn't.

He was...

We couldn't control them.

We were trying to and couldn't.

But now, Schultz called me yesterday and he said, here's what we're going to try to put across for you.

And our two friends, Piagini and Siciliano on the business side, voted with Labor today, which was a clear signal that we were helping.

So I think they're going to stay with it.

And that uncertainty will be removed that Labor stays in.

The regulations come out.

Conley talks, I think we'll get over this.

Good.

Okay.

We just have to tell them and get them off their desks.

That's right.

Well, don't worry about it.

Let it run for two or three more weeks.

We'll get them off their bottoms.

All right.

Thank you, Mr. President.

Nixon phone call with Colson on Arthur F. Burns and New York Stock Exchange

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Nixon Library Finding Aid

Also recorded on November 12, 1971

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