Conversation 120-002

On May 2, 1973, President Richard M. Nixon, George P. Shultz, Herbert Stein, John T. Dunlop, I[lorwith] W. Abel, Frank E. Fitzsimmons, Pat Greathouse, Paul Hall, [Joseph] Lane Kirkland, Edward W. Carter, R. Heath Larry, Oscar A. Lundin, John F. O'Connell, and Walter B. Wriston met in the Cabinet Room of the White House at an unknown time between 8:11 am and 9:10 pm. The Cabinet Room taping system captured this recording, which is known as Conversation 120-002 of the White House Tapes.

Conversation No. 120-2

Date: May 2, 1973
Time: Unknown between 8:11 am and 9:10 pm
Location: Cabinet Room

George P. Shultz met with Herbert Stein, John T. Dunlop, I[lorwith] W. Abel, Frank E.
Fitzsimmons, Pat Greathouse, Paul Hall, [Joseph] Lane Kirkland, Edward W. Carter, R. Heath
Larry, Oscar A. Lundin, John F. O’Connell, and Walter B. Wriston; the White House
photographer and members of the press were present at the beginning of the meeting
[Recording begins while the conversation is in progress]

     Wholesale price index

The President entered at 3:21 pm

     Greetings and introductions
          -Participants

     [General conversation/Unintelligible -- Camera noise]

     Economic stabilization
         -Work of committees
               -Appreciation
                     -Labor and management
                     -Dunlop
               -Inflation
               -Wage and price controls
         -Food prices

     Labor-Management Advisory Committee
          -Meeting in Miami
               -Wages
          -Dunlop’s figures
          -Committee’s efforts
          -Action by administration
               -Wage and price freeze
          -Success
          -Problems
               -Auto workers and Henry E. Ford, II
               -American worker
                     -Wages

               -Need for reassurance

Economic stabilization
    -Public understanding
          -Rule of committee
          -Shultz
    -Price freeze
          -President’s view
                -Attractiveness
                -Public support
          -Extent
          -Wage settlements
          -Prices
          -Wages
                -George Meany
                -Steel settlement
          -Long-term problem
                -Wages
                      -Upcoming settlements
                      -Business attitudes
                      -Meany
    -Phase III
          -Forthcoming Presidential statement
          -Pre-notification
                -Problems for management
                -President’s justification
    -Shultz and Dunlop
          -Efforts
    -Freeze
          -Views of business
    -President’s program
          -Timing
          -Views of business
          -Public understanding
    -Current controls
          -Price increases
                -Success
          -Long-range solution
                -Business perception
                      -Wages and labor unions
                -Impact of inflation
                -Economy

           -Management
           -Cooperation between business and labor
           -Business views
                 -Lack of controls on interest rates and farm prices
                 -Outlook
           -Wage settlements
                 -Price controls
-Committee
     -Statements
           -Dunlop’s role
     -Investigations
           -Kirkland’s suggestions
           -Wage settlements
                 -Phase II
     -Employment costs
           -Effect on other prices
     -Differing views within the committee
-Business community
     -Compliance
-Construction industry
     -Dunlop’s efforts
     -Hall’s view
           -Need for time
-Freeze
     -Committee’s belief
           -Solution
           -Rollback
           -Dunlop and Shultz’s role
-Public perception
     -Dwight D. Eisenhower’s phrase “price-wage spiral
     -Phase I
           -Presidential authority
     -Cost of living figures
           -Stein
     -Public confidence
     -Phase II
           -Controls
                 -Cooperation between labor and business
     -Phase III
           -Increases
     -Forthcoming wage negotiations
           -Labor position

     -Rollback
           -Options
     -Freeze
           -Outlook for success
     -Steel negotiations
           -Imports
           -Cost of living increase
           -1959 negotiations
                 -President’s role
           -Strikes
                 -Arbitration
                 -Abel
           -Resolution
                 -Benefits

Labor-Management Advisory Committee
     -Efforts
          -Productivity
          -Statesmanship

National economy
     -Performance
     -Administration’s actions since 1971
           -Phases
     -Controls
     -Prices
           -Grocery prices
           -Family budget
           -Effect on low-income people
     -President’s reasoning

Labor-Management Advisory Committee
     -Work with administration
     -President’s position on arbitration
           -1959 strike
           -Australia
           -Voluntary participation
     -Australia
     -Management-labor talks
           -Committee’s suggestions
     -Need for popular reassurance
     -1971

                -Recession and inflation
                     -Effect of administration’s actions
                          -Economic growth

     National economy
          -Boom and inflation
                -Administration goals
                      -Inflation
          -Jobs
                -Brennan’s view
                -Effect on economy
                -President’s anti-inflation program
          -Administration’s goals
                -Employment
                -Price controls
          -Cost of Living Council
          -Administration’s goals
                -Employment
                -Economic growth
                -Inflation
          -President’s actions
          -Work of committee

The President left at 4:13 pm

     [Unintelligible]

Recording ends at an unknown time before 9:10 pm