Nixon White House Tapes — Conversation 086-003
Date: Wednesday, December 15, 1971 at 12:08 PM
Participants: Nixon, Richard M. (President); Mansfield, Michael J. ("Mike"); Scott, Hugh; Tower, John G.; Albert, Carl B.; Boggs, [Thomas] Hale; Byrnes, John W.; Ford, Gerald R.; Patman, Wright; Widnall, William B.; Mills, Wilbur D.; Connally, John B.; McCracken, Paul W.; Stein, Herbert; Peterson, Peter G.; Shultz, George P.; Volcker, Paul A.; Kissinger, Henry A.; Scali, John A.; MacGregor, Clark; Timmons, William E.; Safire, William L.; Samuels, Nathanial; Solomon, Ezra; White House photographer
Recording device: Cabinet Room
Source: https://www.easynixon.org/tapes/086-003

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 Do not cite it as authoritative.

[35:42] John Burns.
[35:44] So we'll wait.
[35:48] We'll wait until a couple of others get here before we have a question.
[35:57] All right, well, I'll take a little bit of Robert.
[36:01] After the speaker, and then me, after, is that all I see?
[36:06] What I think so is that probably
[37:00] over half the time was spent on matters other than the ones we're going to discuss today.
[37:05] This is a very far-reaching talk.
[37:08] Pompidou, you know, has been to Russia and has been to Congress in Paris, and it would be a very valuable insight into his evaluation of Soviet-era views on our policy in general.
[37:26] I in turn, of course, talk in a considerable length about European problems, bilateral problems, and with regard to the issue of peace in Moscow.
[37:38] So in that respect, I would say it's the best meeting that has probably occurred in America, Mr. President, for a long time.
[37:46] Our relationship is great.
[37:48] You don't like it.
[37:50] It's not good.
[37:51] It's the best part of it, mostly.
[37:54] Perhaps because of what they've done, but we've gradually, we've gradually, we've gradually, we've gradually, we've gradually, we've gradually, we've gradually, we've gradually, we've gradually, we've gradually,
[38:20] No, I have to say, it's fair to understand that the French-speaking community is extremely valuable.
[38:27] I thought so.
[38:27] I thought so for both of us.
[38:28] It was the most broad-based conversation.
[38:32] And I congratulate the French-speaking community for improving this time.
[38:38] A fundamental to our relationship to the French is the matter of the international monetary situation on which we did reach agreement with the French.
[38:50] John will explain the technical factors for that and what the agreement does mean and what it does not mean.
[38:57] I would like to put the decision in order.
[39:01] If you recall, on August 15th, we discussed the idea there, that I refer to the fact that this policy was not simply, and the new policy has been tried, was not simply a policy to stop the rise of the president.
[39:19] That's the last step to make the play.
[39:22] but that actually it was a three-layered school.
[39:24] You had first, we had to move on the inflation front.
[39:29] Second, we had to move on the job front, that's where the tax came in.
[39:37] And third, we had to move in here to the monetary fund, to get fair treatment for the dollar and the little money.
[39:43] And the latter, of course, would also bear very heavily on the job fund, and the long run, not the short run.
[39:50] Now, I think we can say that our goal on the price line, in phase one and now phase two, it is to see.
[39:58] I think we can say, as a result of the action of Congress, passing the tax bill,
[40:27] I think it is probably fair to say
[40:57] at this time, and that is on the international monetary front.
[41:03] Because in terms of jobs, for instance,
[41:10] And that will be a major impact in this intercept.
[41:14] We had to restore the competitive position of American goods in rural markets.
[41:18] That meant we had to get a fairer realignment of exchange rates.
[41:22] In terms of the short run, because first it's hard to understand the rest of this, and of course it's difficult.
[41:29] With regard to that, I will not get into too much of the Mexican factors.
[41:34] Let me say that we have three goals.
[41:38] As we look at the situation in regard to the past, Paul is informing me that we have had seven major monetary crises in the last ten years.
[41:50] Seven major.
[41:51] I know that we have had three during the past three years, but before that we had four.
[41:58] Err...
[42:00] It became indispensable that we got a new monetary system.
[42:03] We had a new approach.
[42:04] We had a mic that pulled.
[42:06] We had a situation where, no matter how strong the dollar went, that it would relieve us from other currencies around, that it caused fluctuation in monetary markets.
[42:17] And also, we were getting into positions where other currencies were being revalued at the expense of the dollar, whereas we were standing where we were, and they didn't let me.
[42:28] That's why we moved on the 15th.
[42:29] We moved from very, very tough medicine.
[42:33] We moved from drinking, therefore, to, as you know, less dollar flow.
[42:37] We moved also, saying that we had to get a better understanding with regard to burden sharing, and that we had to get some understanding with regard to trade, with particularly Europeans and the Japanese.
[42:53] Now, that's what has happened on those fronts.
[42:54] But Berger said he had to make sure that the last meeting, the European agreed for the billion dollar report, and our boss had agreed with the German, which was the best we could have, and that we had it correctly expected.
[43:09] The second, with regard to trade, and one of the essential parts of the agreement with Pompidou, is that now the Franks are going to support our position as to be the common market for Boris Johnson.
[43:27] The third, with regard to re-evaluation, in other words, the...
[43:31] With the monetary system, we have reached an understanding of the franc system as to what the relationship should be between the dollar and the franc.
[43:43] There is still, I should say, a lot of hard bargaining to be done, just as there was a lot of hard bargaining to be done with the franc.
[43:53] John Connolly will have a meeting with a group of ten this weekend.
[43:56] And then, of course, we have, to the extent that there are things to be bottomed up with the British, and the Germans, for me, and the Chinese, and the other things that are scheduled.
[44:10] But all in all, I would say that at this point, the French motorism was, in this past World War II, it was a breakthrough, after we feel very, very good about it.