Nixon phone call with Connally on Economic Policy and Banking

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Secretary Connolly.

Good morning, sir.

How was Richmond?

Just great.

You got a minute?

Yes, sir.

Give me a little rundown on their attitudes and so forth.

Mr. President, they couldn't have been nicer.

They said they had the largest crowd that anyone had ever seen in the hotel.

They had the tables on the stage.

They had tables in the balcony.

It was a very excellent affair.

We had a very small reception before we went in.

We had a

I met with the directors of the chamber after the speech was over.

They were very, very kind to me, but it was a very enthusiastic group.

I talked about political affairs.

And, of course, the governor was not there.

He was sick.

But the lieutenant governor, Earl Howell, was there.

The attorney general was there.

Congressman Satterfield was there.

Mrs. Holton, the governor's wife, was there.

And Nellie and all the ladies sat down at the table in front of us and had a great time.

They think you're in awfully good shape.

They don't...

I talked to... Did that subject John of that terrible Richmond decision?

Oh, I hope that you...

If you could, I hope that you made it clear that I didn't appoint that judge.

Well, I don't want to blame Johnson, but damn it, you know, that son of a gun is no good.

Mr. President, I just made a crack at one point without getting into it.

In my speech, I said that...

that I didn't think that you believed in a government where a bureaucrat from Washington or a federal judge ought to tell the people how to run their business.

And my God, they just came unglued.

I didn't make any reference to anything else.

I just said that you didn't think that the bureaucrat in Washington, or even a federal judge, ought to dictate to people the course of their life and what they ought to do.

And they just came, just wild applause.

Wild, sustained applause.

No, that's the way to get it across.

You don't have to spell it out.

No, no.

And, you know, I didn't refer to any issue, no names, no nothing.

I just did a general proposition.

Right.

That's great.

But they received it exceedingly well, I thought.

Well, they all said that, and there was no question about it.

Of course, they loved Powell.

And they liked Powell.

It was a very popular appointment.

His partner, Buford, is the incoming president of the chamber.

Oh, great.

And he was there.

I'm glad you did this.

Bob Buford.

There were about 800, 900 people there, and they turned them away.

They turned away, I don't know how many, but...

a hundred or so requests for additional tickets.

They just couldn't accommodate them.

And they all said Ms. Houlton, the wife of the governor, told Ellie that she'd never seen a crowd like that in the hotel for any occasion.

And so it was a good turnout.

Well, if it isn't too much of a darn burden, the more you can hit those audiences, John, it's just terrific.

Well, I'm going to Pittsburgh this coming week.

Great.

What's your forum there?

It's the Pittsburgh Chamber.

Oh, good.

Well, you see, the Chamber, you see, as the street name, they're a main street business.

That's right.

They've got lawyers and doctors.

That's right.

And also, they're always covered, aren't they?

That's correct.

They're covered, and it's all across the board.

You get them big and little, all, you know, young and old, and men and women.

So it's good for them.

Good.

I was going to tell you that when I just took Stans and Peterson and Flanagan out and announced the change of the guard.

But in presenting Peterson, I said that Secretary Connolly and I had discussed the matter and that he felt, as I did, that the best qualified man in this very, very important field would be Peterson.

So I thought it was good to get that.

I just know that that's the way I put it.

And Pete liked it that way, too.

So it shows them where it is.

The other thing I was going to ask you was this.

I was thinking after our meeting, if there were some way you could reach bankers.

Now, you know, we can talk all we want about, I mean, George Schultz, when I talked to him afterwards, I said that, you know, about this M1 thing, he says Arthur's, that it was very significant that Arthur admitted that M1 had not moved up enough and that he was having trouble with Hayes.

New York Bank, well, and that he asked if we could do something about Bremer.

Well, we're going to try to do something about Bremer, but we can't let Arthur have the name, the successor, or so forth.

But my point is that apart from that, the bankers are a panicky, timid bunch of people.

I was wondering if a speech by you

to bankers or a meeting with bankers or something could maybe have some effect.

I don't know how much rhetoric does with these guys.

Well, a lot does.

I met with a bunch of them yesterday morning, Mr. President, with bankers.

In a private meeting?

About 30 of them, yes, sir.

That's good.

What did you tell them?

Well, they're not all at this particular meeting.

It had to do with the refinancing.

But they're not all that flooded with money, and I don't like to argue with others when we get in front of you.

But they're not flooded with, and they're not looking yet for loans.

They're pretty well loaned up, and it depends on what part of the country you're in.

All right, then let's get the money out.

There's no reason why we can't have the money out.

We're going to get the Brimmer.

The Brimmer and I put a high priority.

I told Schultz to get ahold of Rogers and say we've gotten him and had to have some appointment for him, and if he'll take it.

And then let's get another man on that board that we need.

Well, I'll get Bill Camp, too, working on these bankers.

Frankly, he's got as much influence or more of them than anybody.

And they like him, and I'll get him to do it, and I'll do it.

We all have daily contact.

Can I suggest this, that if...

If with the bankers, John, if with the bankers you feel that I could be helpful at some point in a small group, I don't know.

I understand.

I'll do it.

But it has to be totally off the record, of course, because getting up and telling bankers to loan money is like telling people to buy stock.

Mr. President, I don't think there's any problem.

These bankers have got their interest rates down.

They're not complaining about anything.

They are uncertain because, frankly, they don't think the Fed, if they've got one complaint, they think the Fed is not going to keep this easy money policy.

They think they're going to turn it around.

That's what their concern is.

Then, all right, we'll get at that.

And so what I'm trying to assure them is that we're going to continue to have this type of easy money policy for some time to come.

And that's their concern.

They have two concerns.

One, they're afraid the Fed's going to tighten up on money supply.

Number two, they're afraid of inflation.

They're afraid we're going to turn this thing loose.

Those are the only two fears they have.

When you see output per man hour, John, going up as it is, and the other things, I think the inflation thing for a while is...

There's going to be other controlling forces in addition to our wage price board.

I agree.

That output per man hour figure yesterday was a hell of a good one.

Excellent.

It sure was.

What is this?

Did I catch you on another thing?

Did you get pageant management?

Talk to him.

He's called me this morning.

Unfortunately, I was up on the hill at a meeting yesterday.

and I've got a call in to him now.

He's going to call back this afternoon.

Yes, I talked to him.

I talked to him within 30 minutes after you talked to me.

He's extremely flattered, extremely interested.

He said...

he had a problem he sold his company as you know the first national city yeah and it uh immediately after that they hit on some hard times because of the general business conditions and he he was pulling them out on the long road back and he didn't want to run out and leave them and i said well helen uh the road's going to be better now anyway sure and so he was he wanted 48 hours and he's called me back this morning so i'll have something for you this afternoon on that yeah the other thing is that uh

Keep your eyes open for, you know, other people hearing this like that.

Roger.

When we get to an appointment that we can make, let's just get one of our friends in.

Roger.

I mean, not only our friends, but there are so many good men.

We always seem to sort of come up with the same, you know, tired people.

I agree.

Golly, and there are guys just itching to do things.

There sure are.

The trouble is, you know, the trouble is a guy is really successful at everything.

He doesn't want to root himself out and go over to bond.

There are not many of us that are willing to be so goddamn silly.

Isn't that right?

Well, I'll tell you, after you go down and catch that...

Marlon, you'll feel better.

Yeah.

Okay, John.

All right, sir.

Thank you.

Nixon phone call with Connally on Economic Policy and Banking

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Nixon Library Finding Aid

Also recorded on January 27, 1972

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