Conversation 303-009

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How are you?

It was great.

I'm sorry about you.

Please don't get up.

I feel better over here.

A little flu?

Yes, sir.

I got over my bug and I feel good.

Well, let me start at the other end of the spectrum.

When do you leave?

I'm going to leave Thursday evening at 7 o'clock.

We have to be there Saturday to pick up our credential or reception one time or another.

So we're going to leave Thursday evening and arrive Saturday morning at 7 o'clock.

I was trying to think of one is that tomorrow we'll have that meeting tomorrow at 3 o'clock.

We will have

the meeting on the budget, the military budget.

I had that scheduled for today, a period of time back, and I want to get it here so that people will be able to see it.

Now, as far as that meeting is concerned, it really isn't anything new.

We'll see what the receptive problem is.

The problem is complicated in the fact that in developing political issues, developing not on the partisan side, not on the Democratic side,

on many of our basically what you call conservative people, is with regard to the accuracy of national defense, in particular with regard to the Soviet threat.

They see all these new holes that are being cut in the Soviet.

They see the arms control talks underway.

And they've been with the United States, and they've been with the Soviets, and here we go.

And they're where we are going.

Now, there are, first, let me say that there is a real problem in terms of what the Soviets are doing.

They're going like candybusters on their own.

This will build them.

This is not new.

We've known this all along.

And one of the goals of our meeting in Moscow, which will take place in May, and we are working for that goal now, is an arms limitation agreement which will cover our defensive and their defensive weapons and also will limit or freeze offensive missiles where they are.

Naturally, you kind of assume that that agreement is going to be made, and our critics on the right basically feel that, first, one, that no agreement may ever be made, but two, that in any event, the Soviet may be ahead and that we ought to get going and catch up and so forth and so on.

They watch for the National Security Guard.

When we boil it all down, here's my judgment as to what will happen.

The Soviets are aware of the fact that they now have caught us, and in terms of long-range missiles, are slightly ahead of us as far as numbers are concerned.

For that reason, they now are willing to have an arms limitation agreement.

They would like to limit only our defensive weapons and go ahead on their own offensive weapons.

But it is my belief that it is their intention, before we meet in May,

And probably, this we can say, probably could be finally culminating in a degree for offensive and defensive limitations, which incidentally would mean a rough parry.

It had a weakness in the sense that people say, how do you parry a parry?

Well, that's what people are aware of.

The alternative to that, of course, is to say, well, you can't believe these fellows.

Second, there's a great chance there won't be an agreement.

And then to go into the Congress and ask for authorizations for a greatly expanded American buildup.

Now, by breaking the expanded American build-up, here you run into the utter selfishness of the services.

And the interesting thing is that if we were to give them their figure of $80 billion, which is what they know and what they've asked for, and we're talking in terms of 79% percent, so this is our part.

But when you go to their Haiti work, what really gets down to it is that it really doesn't deal with this problem of clout.

It deals really with what the Air Force wants to continue to build to maintain fighter interceptors.

Now, you know goddamn well the Soviet Union isn't going to launch a attack on the United States with bombers.

with missiles.

So the is an area, for example, that we're coming back on some.

And as far as the Navy's case has made the bench, and there is a great deal to be said for that case, which again has to be with , but that deal with modernization, we should go ahead with a strong modernization program.

The Army's case is not particularly strong.

Frankly, it's just the old-time moment.

I mean, a lot of the good things are made in the Air Force.

We look into the future.

We all, the possibility of the use of our becoming engaged in Vietnam-type of exercise is, because basically of the American political situation, is remote.

It's so remote that you can't maintain a huge standing armed force to do it.

So, I'm just trying to give you the background on strategic action.

Yet, there still remains the political issue.

There is the issue, first, dealing with this country in a world, my gosh, in a period of civil unrest.

And second, that has built up too much

that may create an impression in the world over there among the people that the United States is slipping into a second position.

So what I want you to address yourself to

As this presentation is made, and it's from Schultz, who will be here quite a bit, I think I'll have him here earlier in the period, because he's got to stand up for what he thinks we need to do.

And Kissinger, that's all.

But here's what we really make.

We talked about it.

There's a page saying that Kissinger's one of the dogs, and I'm a little old man thing.

Thank you.

We have, and Kissinger, Kissinger and the NSC have agreed to a number.

Now, Larry's playing a game.

Larry's been talking about it for years now.

He used to be talking about reducing women in government by increasing them.

Now, part of it is internal politics with the services.

And as I said, part of it, of course, is Laird makes you play a little external politics in terms of catering to this strong feeling among a hell of a lot of people that speak for the interests of the United States.

So the question we've got to address ourselves is not only the question of the question, which is a tough one, and we can handle that, but whether, when, in view of what is happening,

Just frankly, from a political standpoint, we have to go for what would be an increase in the services budget.

Now, having said all that, let's suppose we did decide to do that from a political standpoint.

People would say, well, doesn't that detract from your talks with the Soviets?

And the answer is, of course, it would.

They're going ahead with that stuff.

And I don't think they're simply going ahead with it prior to them and have a larger commission.

If we do, however, go, let's say, over to 75,

that we do run into very substantial problems in terms of making our budget within the, not the traditional balance, but within the local balance.

So those are sort of the philosophical issues that you should think about, and I'd like for you to think

You know, you've heard of it.

I've had the defense people come over to do their stuff.

But I'd like to be a part of the political science here.

And when you finally come down to it, one way or the other, this is where we come to the heart of it.

You don't really have to go to the president's office.

You can go to the president's office.

So that's what we're asking.

So don't speak to it now, but just think to it.

We'd like to have an hour on that, 3 o'clock tomorrow.

The second point, before we get to the other things,

Do you have any thoughts about how we can handle this?

I'm not sure if you lost the vote.

Yes, I would immediately if I were you, I think.

I'm very disappointed.

what happened.

Second, I thought it was a spectacle exactly, but then she jumped up and down.

Third, I didn't see it.

I didn't see it.

Oh, they were out on the front row and they just jumped up and down like a damn football.

Yes.

Got on their show for the Flash of the Aces, please.

I know, but you're dead animals.

Third, I thought it was a disgrace.

It offends my sense of fairness and equity that you kick them out of the General Assembly.

I can see some justification for removing them from the Security Council.

But to expel them from the General Assembly is an outrage.

It's an outrage here in the country.

Regardless of how it was formed, it was formed a hell of a lot longer ago than some of these nations, as though we'd kept them out.

Got their independence already both here, formed, or split off or something else, so we didn't have to take them.

And that's where America came from.

I can say on this one, we certainly can't fall for it.

I mean, I sent messages to at least 20 heads of state.

I personally called the president of Mexico, who's got his vote, the king of Morocco, the prime minister, and the president.

We're ahead of the hunt in Argentina.

We got terrible.

So we get every damn thing.

I know that's funny, but those son of a bitching Africans, and that brings me to how we're breaking with other things about our international monetary organizations that we support.

Why are we having to change that?

I'd rather think that you ought to express your deepest regrets and just say that, frankly, at an appropriate time, that the United States is going to launch a conservative move to have the Nationalist China admitted, readmitted to the United Nations.

I don't know why they don't qualify as much as all of us in the world, 100,000 people in Suriname and Togo.

All the rest of these little church countries around the world, the 500, 700,000 population here at least is an island of 14 million people.

And I don't know why they should be ostracized from the World Organization if it's going to be one.

You're not now deciding who is the heir apparent to the 700, 800 million Chinese in the geography of mainland China.

You are recognizing that there are two infinite governments.

in Taiwan and mainland China.

And as you say, if they will apply, you will be very strong to support their membership in the United Nations.

It would be a very powerful, and I can kindly thank them.

If you would vote, you know, two-thirds, come on.

We have said, we have said that we are, you know, of course, we recognize that it's a very bad precedent for any nation to be expelled from the United Nations.

And it is.

I can see that I'm not trying to expel Portugal, because they're not going to be African, or Greece, because they don't have a good government, or, you know, South Africa.

That's right.

I can tell you by God, we're going to vote against you.

And the other thing, of course, is that we

What it really gets down to, John, is that we want people to take it out on the dot man United Nations.

What happened here is, you know, this vote on

This idea of admitting Red China and trying to avoid expelling nationalist China has been closer every year.

It was very close last year.

This year, before we announced our China mission, the Italians had switched.

And, of course, you add to that a few others.

And so the boat was lost before we got into it.

The only hope was to do what we did to have this sort of policy where we keep one, doesn't make an important function.

We could not win on the admission of Gretchen, but we thought we might be able to win on Expello and the other, and it was close enough.

But basically, what we really get down to here, and this gets us back to the point where we made a convert out of Rogers this time,

He said to me last night, or yesterday, when we were calling on these countries, he met with 95 foreign leaders and heads of government in the U.S.

He said, he was now convinced that our plan, our program of going forward with

supporting all the lateral financing agencies, was not in the interest of the United States.

He said, we do not have any struggle with these people.

He said, they don't give us any credit when they get money from them.

And he says, for example, the Chinese, economists, for example, and the goddamn French, who were working against us, they played on those, and the French were bouncing themselves.

But they would come in with some pipsqueak little, you know, a pinhorn program, and these countries would think they'd be getting something from them.

And when they got it from the international organization, where we furnished half the money, they didn't think they were getting anything from us.

Now this is where I was coming from.

I believe that, too.

And I believe we have got to start putting the screws on those damn things and cutting them back so that we can do another thing.

I am 100% certain that we

At first, as far as the United Nations is concerned, I don't think we're in that.

I think as we continue to admit these small countries, it's become less and less an organization of any significance in the world.

It's just a total pain in the ass to us.

Second, it's going to get its budget done.

And I can tell you, I am not planning to try to stop the budget.

I'm not modeling it.

We're just going to go through with it.

I don't have a motion or a statement on that.

The third thing is that it brings us back to the point that the United States has got to look after its own interests on a country-by-country basis.

The United States, all the lateral interests, we don't, we aid without conditions and all that.

That's gone.

That is utterly gone.

Now, another thing that came up to take the same thing, all they found out was that he's a nice fellow.

He sure is.

He came and he told me about, he said that one thing that the law wanted to put on them,

on the tax code, the only thing he was going to put in is possibly an amendment on expropriation.

I said, well, that would have bothered me.

And he said, well, this is what I've been told.

He said it would make it mandatory.

I said, well, maybe right now that might not be too bad.

You know what I'm getting at?

As you know, presently, it is not mandatory to expropriate.

When we come down to it, it seems to me that we are at one of those rather critical points, Larry, where on the one side, well, let's sort out the problems.

First, there is the much bigger game we've got to play.

We've got to play the game of the Soviet and the game of the Chinese.

For reasons that those who favor our going don't really understand, and those who oppose it don't understand.

We've got to play the war on it.

because it irritates the hell out of me, and it allows us to open up the game to chocolate and jack and maybe open up the game to a hell of a lot of other people.

Now, we play that game, however, with no illusions.

They're both our enemies.

They will continue to be, but that's the way that's going to be.

Secondly, having moved that far, in terms of our relations with other countries in the world, the United States now,

has got to stand up in various parts of the world and stand up very vigorously for its interests.

And whether it's with Chile on their expropriation or whether it's

a move like this, where we ask a lot of these goddamn Sniggan Africans, who've given, come and sucked around on everything, we've got to find ways where the United States can frankly throw its weight around in an effective way.

Now, this

However, having stayed in that position, you've got to realize that you have the international clique in the press and the rest who are giving us hell now because they say, well, maybe there's going to be a depression in Europe that will cause it.

And we ought to get busy and immediately work out this monetary situation and go back to something, to some more light-fueled system of arrest where we play a great responsibility.

And who are concerned always, well, who tend to put the blame on the United States for everything that goes wrong in every place in the world.

Somewhere in between there, there's maybe not a complete, but there's got to be an answer.

But I think in the context of what we have discussed now, that domestically, the American people very much want the United States to stand up.

Second, the American people are fed with the teeth, with internationalism, with, uh, with all the lateral organizations, like the U.N. and all the lateral demands of the nation.

the American people, not only want us to follow policies that keep us from taking things around, but policies that will look after our selfish interests against other countries.

All of them, they think, are looking after their selfish interests as against us.

Now, in the context of your trip, what's your Japanese name again?

Japan stood with us like a rock, and it was a hell of a difficult moment for them to win.

They were right next to China.

The Chinese were very good, efforts against them.

They have a very strong socialist party, all of whom are on the other side of this Japanese government, and much coercion on our part stood with us.

If we can split Japan off,

And particularly, I also had in mind the fact that they came around on a textile plant.

It wasn't just one.

Now they're just treating it as a second government.

And looking at the other side of the world, the NATO countries were a total disaster for us on this, and they'd all take this as a tale.

They'd even have got them to tag it as a thing, because of their guns and whatever it was.

The only country in Europe that's worth a bang for her is the Germans.

And so the Germans would be picked off.

I'm just talking about Afghanistan.

Third, the Mexicans, as a result of that, called the Mexicans a little bit.

The Mexicans, you know, were very vocal.

The Mexicans in Nigeria did it idly.

And most of the Latin Americans, the Argentines, the Brazilians did it directly.

Except for those goddamn Chileans, the two or three others, they were very, very good.

And, well, I don't think, I have no use for the Canadians, but for others, probably one of them, it seems to me that we ought to find a way to handle the Americas separately.

Now, if out of that grab bag, we can sort of develop something on, in terms of your own approaches to this, I don't know if you want to do it.

That's a lot of things on how strong you want to play this, on what your own ideas are, what is down the road.

But first let me say, I agree basically with everything you said.

Not only what the American people want, I think, at least in my view, you have accurately characterized the American people.

Now, and they're right when they say that

They think other nations look after their selfish interests to our benefit, and that we don't, that we've been sugar-dated to the world and taken the attitude that we're so big and so strong and so generous and so kind and passionate that we can do all these things for other people without a thought to our own well-being.

And that's all true.

I agree with that.

I think that's been our policy.

Without me stating what she said, I think we have to reshape our own approach to the economic, the monetary, and in a sense the political, the political objective that you have.

Your trip to Moscow is designed to make it intentional.

from Russia to the United States, Russia to the free world.

And that's the only way it's going to work.

It's going to work between the United States and Russia.

The idea, and I may hear you say something that you don't agree with, but the idea that you're going to encourage God and European countries to build up a defense force where they can maintain their own defense and their own security, I don't buy that.

I don't believe that.

I don't believe that's ever going to happen.

I think you're right.

As a matter of fact, I think the time has come, Michael,

I wouldn't breathe it out of this room at this point, because it would penetrate our firing position at the Russians.

I think the NATO thing has gone so wrong, and I think the goddamn Europeans are not about to do it, and I think they want to make a deal.

So we've got to make our own deal.

So we'll talk to them, we'll make them appear that we're trying to arrest them in order to have something to do with the Russians.

And you're exactly right.

And frankly, I think you ought to expand your mission to Moscow to not only military matters, but at the same time, let's form a trade relationship with Moscow.

Just jump right over here.

Let's look at trade between Russia

and the United States.

They're Caucasians.

They're no different from what we are.

They want to talk about that.

And let's jump over Russia.

I mean, let's jump over Europe from Russia.

Just completely.

In talking about these various problems,

I think we have to look, as Dean Adams said before, we have to look at Canada because she's our native.

She's got tremendous natural resources, and we ought to.

Mexico, we ought to look at.

In South America, we ought to look at.

I think we finished with Russia.

They're very pragmatic people, and they're very pragmatic, you know.

I think we finished with, it was tough.

I think by a matter of fact, I think we did a good job with China, with mainland China.

I don't think much.

No, they don't have anything to sell.

But in the future you can, because for the very reason you mentioned there, pragmatic as hell.

Sure.

Why don't the goddamn Europeans have the business?

Not at all.

No reason.

The Europeans are screwing us all around.

I think the... No question about it.

I'm getting to the point where I think the goddamn Europeans... Look at Europe.

They've been there.

This has been where two great wars have been fought.

That's a goddamn little place.

That's it right there.

That is Europe.

And it's caused 40 million deaths in two wars.

And then look at the rest of the world.

Look at the rest of the world.

We have got nothing but a human ass here at the shopping park.

What's nothing in it for them?

They were all racing for Peking.

And the fact we were going had nothing to do with it.

They had already done it.

They didn't ask us before.

The Italians didn't ask them before they recognized Peking.

The British, of course, recognized it many years ago.

The French didn't ask us before they did.

I mean, so, and the poor little pelicans and the rest and all that.

Last year, the European community, our great friends in NATO, the support, the underwrite, we did $16 million for the communist countries in Europe.

We did $250 million.

Well, that's a considerable difference.

Maybe over $16 million.

The truth of the matter is, Mr. President, we cannot, in my judgment, try to accommodate ourselves to the Europeans and survive in this world.

We just cannot do it.

We ought not to do it.

You do well to know, John, the attitude of our critics.

And it's now growing again.

You know, they leave new suns till we die, and that's the thing.

And now it's starting to come up again.

Now it's a, oh, well, the Earth's hanging up on us.

That's right.

We're all involved.

That's right.

And I understand.

So a lot of that's in this government, too.

Well, go on, Bill.

Well, what I mean, we've got to, before we finish this, I...

I want you to, I want to get George Shultz, because he's one that doesn't share this gun.

He's on our side.

Art is that way.

Hobart Rowan had the most gun damage of you and a cop.

I hope you agree with that.

I heard that.

But where he said, he said what Connelly and Nixon got through, don't they remember that it was protectionism that led to Hitler?

Now, for Christ's sakes, he is a Jew who knows goddamn well what came.

And if the Jews were to have been no Hitler, you know that.

Like that.

That's stating it perhaps a little too rough.

The Jews, you know damn well, you technically had to have a cause.

It wasn't protectionism.

Protectionism didn't have any damn thing to do with it.

They started on the area of Greece.

Why, of course.

That was the whole thing.

And the fact that we had a protectionist policy that never got in that country was what happened to us.

The Great Depression in Germany, the rest of this is a rally.

That's the international set, Tony.

That's correct.

And it's not going to prevail.

Believe me, it is not going to prevail in this country.

Well, not good.

This gets back now.

Again, if your visit, let me say, if your visit to Japan now takes on enormous significance, if you can be in a position to make a deal with it, I don't know, we can make a deal with it.

Well, just looking at the world, there's no reason on this earth why we can't, why we can't take the entire Western Hemisphere.

Sir?

Including Canada.

They don't like it.

They live on 70% of everything they export to the world market.

We take 70% of it.

60, 62, 30, 70 percent from Mexico, so it's about the same.

They're so tied to this American economy that there's no way they could divorce themselves.

And the truth of the matter is, we ought to start working to really organize, to really open the gates for these two countries.

We can't begin to dismantle all the barriers.

It may take us five years, but these are new initiatives that we ought to be developing.

But let me...

But let me go through this.

Just let me restate what you already said.

You take Canada, the United States, Mexico, and most of South America.

This is reserve Argentina, Colombia, the principal countries there.

We can take Australia.

Now, we don't have to ask them to invest themselves in the economy or whatever, but their economic ties with the United States and Japan, they want to be with us.

We can take them.

We can take Indonesia, 100 million people.

We can go right over and take Japan with these new overtures to China.

And let's face it, when you talk about the Jews, let me say this, with the Japanese, you realize that China makes them want to come to the United States.

Go ahead.

I just tossed out to the company of Japanese.

I said, Mr. Biden wants to accommodate himself to you all.

He said he sees the emergence of China as a great power and Russia as a great power.

On the other hand, the Europeans are solidifying and coalescing, and they're going to push Japan.

Europe on one side, Russia and China on the other.

They're going to push Japan and the United States closer and closer together.

Oh, hell, they agree with each other.

That's why I wanted to put this down on one of your thoughts.

I want you to discuss seriously making that SS deal with them.

Why not?

No reason.

You said speaking to the Jewish people.

Speaking to the Jewish people.

Of the 13, approximately 13.6 million Jews that live in this world,

About 5.6 million of them live here.

That's the largest.

The next largest number live in Russia.

Over 2.5 million.

And both of us have more than Israel.

So when you talk about this eastern seaboard, when you talk about this power of the press, when you talk about little things like this, if we can begin to accommodate, get an accommodation,

economic or social of any kind with Russia, to where they can be the least bright in their antipathy toward the Jews, you've got a whole new ballgame, so far as we're concerned.

You would put that on the agenda with the Russians?

Absolutely.

Not put them on the spot?

No, I don't want to put them on the spot.

I don't demand anything.

Right.

With that kind of a

With that kind of a union, see, we've got to break up this European domination of economic and monetary affairs.

Yeah, I agree.

Well, if we get Paul Volcker King back, and he sits in a meeting where these fellows have all gotten together in this so-called group of six, then you get the group of ten.

Well, who's in the group of ten?

Canada, Japan, and the United States are the only ones not in the European community.

And in this particular case, there, Canada and Japan are not with us on this realignment.

But we sit in a meeting where we're the only one, and all the rest of them here, the Netherlands and Belgium and Britain and France and Germany and Italy, and they put a solid front against us.

I said to Paul this morning, I said, now, let's begin to break this down.

I said, let's begin to sail these people.

Now, if you're going to be a single community, if you're going to be a European community, then we get into negotiations, whether it's economic, monetary, trade, military.

You send one man to talk to us.

We wanted them to, if y'all are one community, you're speaking with one voice, just send one man.

I said, don't send nine of you.

Talk about a nine to one.

Just say send one man.

He's going to speak to all these countries.

And if y'all didn't have a condo or a football field, yes sir.

And I said, we just started, we just started planting that right now.

And frankly, we ought to break down.

We ought to begin to break down

And the way to do it, I think, is to insist that we expand the group of 10, just to take a crack at it, and that we bring in Australia, Brazil, and Indonesia.

Let's start playing world politics and look at ourselves in these things.

We just take what is established and we go along with it and barrel, scurry, and scramble it.

We're over here, and frankly, we're not equipped, Mr. President, first thing, to get to the point of what I really want to say, we're not equipped to deal with these countries.

To cause the internal structure of the United States government.

In the first place, you don't really have enough power in terms of trade from the Congress.

We can get it.

We can get it now.

We probably ought to get it.

give you more freedom, protection of the position, quotas, tariffs, reduction of them, and so forth.

Beyond that, the state either has to have a transformation, or economic negotiations have to be pulled out of state.

And I mean, literally, not just in and out, but really pulled out, so that you can really speak with

with a single voice.

Now, we're just not quick.

We've never had to do it, so we've never structured our own government.

I agree with you wholly and completely.

I brought this up to you before, if you would recall.

I told Rogers this.

I said, you know, I said, John Connolly brought this up.

And he was on the other side of that.

He read it.

He went strong on it.

But you know what I mean?

That's the technical lie.

The Peterson, the Peterson committed and all the rest.

That's his family.

That's when I signed the goddamn law.

I accepted it.

Son of a bitch.

That's just the traditional malarkey that's in it.

And I'm sick of it.

I am goddamn sick of it.

We go down, we fight John for Ida and for all this other stuff.

Now, let's take, for example, even the, we've got Mack in America.

He's a good, he's an American.

And he has played our game.

But let's face it, why should we be giving so goddamn much to those people?

Now, what reason?

We don't control him.

None at all.

Who's this fellow, Schweitzer?

He's Pierre Paul Schweitzer, the International Monetary Fund.

Well, that son of a bitch is not our friend.

He's your enemy.

I thought when I met him, I considered him a snake.

If ever there was one, he is one.

The Inter-American Development Fund.

Well, hell we bet he is.

We were afraid to open our mouths over there for fear that we would be juried.

All the people we're giving money to.

Now, I said to the trailer people, now from a parochial standpoint, it's the state's interest to want it to operate on a bilateral basis.

from a parochial interest, it's to the treasurer's position to work supporting some more of the national organizations, because the treasury, under the statute, by delegation, we have the vote, and we control the vote.

But notwithstanding that, I said to our people months ago, I said, now I'm going to go through one more series of support, these hearings on Ida and all these other things, and I said, I don't agree with it.

I said, I don't agree with this policy at all.

I think we ought to retrench on the North National.

We ought not to fund them.

We ought not to commit to them.

I have held off.

Our people have been wanting to go and support the African Development Bank with $15 million.

I said, no.

The Asian Development Bank is just getting started.

And I said, no.

I said, I can't change the policy.

It's not my place to do that.

But I said, I'm not going to go all out for any of these.

And we'll go through this appropriation process without me raising hell about it with the President.

But I said, I want you to know that I want everybody in the Treasury to know I'm not for these multinational institutions.

I don't think it's in their higher interest to support them.

I think we ought to be putting up with whatever we have in bilateral negotiations.

You know, the interesting thing is that every year we have this fight over the poor.

And the Congress always cuts the guy down for one day.

you know, where it's bilateral.

And on the multinationals, they accrue it.

Well, that doesn't make any damn sense, though.

We could get Otto Fassman in here, and he'd play our game a hundred times.

He's shown me that big long list, you know, about how much aid you really are getting.

And he'd probably kind of like to cut their balls off.

Now, Mr. President, we ought to be doing that.

Well, one of the reasons they're going to send foreign aid is because it's handled most faithfully.

Now, we either, Bill's going to have to either, and I say this without any personal awareness at all, or I say you, you're going to have to either shake the State Department apart, restructure it,

or you're going to have the almost impossible task of trying to do what you really want to do at the time.

And you know that better than I do.

But that's why we have trouble with you, by the way.

Frankly, the Congress has helped us.

The Congress has helped us.

You're exactly right.

It's just that simple.

You're exactly right.

Now, please understand, I'm not trying to leg for any of that.

None at all.

I don't care if you put it in commerce or wherever, or even in state, providing them with restructuring statements where they can handle it.

Or they will.

But in the absence of that, I think we're going to be in trouble.

I think we're going to be political next year.

This is nothing new.

I was just talking about things in general.

You're in excellent shape right now.

You took the floor over this morning, over the last night, on this United Nations.

got hurt.

People are going to be confused.

They're not sure whether this is part of your new China policy or whether it isn't.

They'll be confused.

But the dead of it is, I think, we got hurt.

The last two weeks, everybody's known that Bill's gone all out.

Bush has.

He's done an excellent job.

The word was that he was going to win it when they thought it was impossible to win.

But we lost him.

Now, I don't think he's failed.

But nevertheless, it doesn't hurt, it doesn't help that.

But outside of that, you're an excellent chick in the country today, in my judgment.

But I get back to this old, old song that you can't, there's a basic unrest and a basic uneasiness in this country.

You give a horse to a tiger, and if I say, they don't trust the government.

And they don't.

And they're going to, there's a growing,

indication that they're going to throw everybody out.

It's in office.

Against the ends.

So you have to be against the system.

You may have to wind up being against Wilbur Mills and denouncing him next spring.

And against the Congress.

But you might be able to make a little bit of a level order.

I'm not sure yet.

Great to see you.

But you may have to run against the companies asking for it.

That's right.

Block out things.

And you take out all your programs that you try to do sometimes, you've got to run against the welfare.

They're not going to pass you welfare.

They never will.

And of course, you're not a strong party either.

But at least you can say with absolute sincerity, you try to put work provisions in.

And they won't pass it.

You try to get something in.

that would meet the basic needs of those who need help and yet try to force those who can work to work and you couldn't get it through.

But more than that, you're going to have to pick.

In a time of frustration and uncertainty and division within the country, you frequently, more often than not, drive home a position.

and a feeling and a support.

You arouse a support out of a negative position much more quickly than you can out of an affirmative position.

No point in you trying to defend what all is happening.

No point in trying to run on your record, so to speak.

You've got to run in terms of how you're going to change things.

You're going to kick the hell out of the Chileans or you're going to denounce the UN or you've got to get you some

some real enemies here.

China you can't have.

Russia you can't have.

They're not the enemies.

Communism ought not to be in the battle.

Not at this point.

And that's going to be true most of next year.

Because basically, that's something that we can...

sort of have them going for us in a way because it's so big that people understand it.

But I must say that on the other hand, you see, here's the problem with our state.

We don't have a war behind us in one way or another.

I'm speaking now by Mary Summers.

without the war lines.

We will have had some massive moves on the international front and so forth.

But those things will only wet the appetites in one of the moments in terms of picking on this frustration in other areas.

Africa is there.

There's no question about it.

But it's been, it's grown up through the last, let's face it, the last

In the 60s, there was a very great depression in the country.

I mean, mental, emotional depression, not emotional.

And there it is.

And this is exemplified in this bushing thing, and somehow you've got to give it all back.

You've got to give it all back.

Don't worry.

You'll get that and all that back.

Now, how do you do this?

How do you accomplish these things?

Well, it seems to me that if we can get our forces within the government together, we launch a whole new offensive, a whole new economic offensive along the lines that you talk about.

We go to Japan, we go to Canada, we go to Mexico, we go to Latin America, we go to even Africa, we go to Australia.

And I mean, you do it and you announce it.

You serve notice on the world.

that the European community is solidifying against us.

And they picked seven parties and said, we think that's fine.

We support them.

We want them to get together.

We want them to provide for their own security, for their own defense.

And the sooner we can be relieved of those, not say you're going to, just the sooner we can be relieved of some of these responsibilities, the better.

And looking for it that day, however near or however distant,

We recognize that we're going to have to form a trading bloc, and I don't know what to say.

We're going to have to form trading alliances throughout the world to compete well.

Consequently, we're going to make overtures to extra countries.

I don't know if you want to be that specific, but maybe you do.

And in the process, you say that the United States can no longer afford to be kicked around by other nations.

If you do, if you take the Affirmative Act...

The very thing I said in that speech, the Affirmative Act.

That's exactly right.

Of course you will.

And that's what you've got to keep hammering home.

That you've got to demand a fair deal.

I don't know anything that will, that will, both on the short run, add more to your political support, and at the same time, on the long run,

be more beneficial to the interests of the nation, because you can't just be a dead guy.

You can't be the charlatan.

You have to have some substance in what you're doing.

Well, sure.

But the point is that being the man you are, if you want to be alive, if you're really trying to do something, you want to be constructive.

You want to help.

You want to lead something decent.

On the other hand, it happens that what appeals to the visceral emotions of the American people at the present time probably is correct.

Yes.

I think I'm probably right.

It just happens that at this point, that the old internationalism just doesn't work.

that the United States has just got to work for one world and all that.

Hell, it never was one world.

It never will be.

There's a hell of a lot of them in the world, that's true.

And that's the thing that we've got to get across.

And somehow, we have to structure and devise, and of course you put the words in the plan, but we have to devise a new form of internationalism.

That's all.

Yeah.

Well, we can borrow this block.

We can sell that part of it.

We can hire someone who wants to shoot it if we want to build it.

But as a part of this, I will.

You can announce that you're diminishing your support of the modern medical institutions, you're running the police, you're violating the negotiations.

You can announce that you're abolishing the alliance department, which is basically the same thing.

Or you can announce the...

Put something else in place.

See, this gives you an opportunity.

That's right.

To have the initiative, but...

But to do all this, you've got to have some unsteady support.

You've got to have some imagination to make it go.

And it's got to come from the State Department.

You just can't do it without it.

It's the way this government is structured.

Now, you can do certain things.

You can set up certain trips.

But, well, Eddie Cohen said last week, with some of the Europeans,

Well, he said, my God, it's a three-way, three-way junction.

He said, Philip Trezias was in the meeting.

He said, I was astounded.

I said, I've never seen that before.

Trezias on the other side?

Yeah.

He said, my God, we've had more problems with Trezias than we were with the Europeans.

He said, I'm astounded.

Well, I bet you I know that's the way it works.

Now, this is the way it works.

Now, I'm not picking on him.

I do.

He's just symptomatic.

I don't want to think about it.

Well, I pick on him only because he's so symptomatic of what other typical state bureaucrat.

But I'm afraid I haven't given you an answer except to add to your problems.

Now, we can get a deal on the International Monetary Fund.

We can deal with the issue.

We can get a realignment right now.

Yeah, but it isn't going to be enough.

And I'm not sure it's a smart thing to do.

I don't want to do it because they want to go back to a fixed period.

Never.

The thing that I feel, I mean, before we get to that, because I want to get Schultz in to hear a little about this.

He has some ideas about that.

So that we see that we...

I think some of them are on the same line.

Before we get into that, let me talk a little about the, what we're doing on the, I talked about it this morning, the tax and things.

You're going to have this on tomorrow, right?

Tomorrow.

Well, we'll just take, we'll sign a government tax to lay them down.

Except one that they put H.R.

100 and things like that.

But just hope for the best.

They say this isn't Trump.

They can't get this.

I don't know.

Well, that's correct.

We ought to have, I know.

You play it, though, however you want.

To me, it's about, if they sugar it up a bit, we don't care.

But god damn it, I wish they'd show their own investment tax money.

They won't do that here.

It's possible.

Try.

We might get to 10%.

Try.

We're trying.

They intended something.

Now, the other thing is, I think that, uh, what was the other information?

Revenue Sheriff is dead.

You agree?

Yes.

Uh, welfare department is dead.

Now coming to this thing here.

However, all of it, as you know, pales in insignificance compared to what happens to the American economy.

We want that bank economy to move up, and it hasn't been, you know, going quite well in life, although I still think the prospects are good, and so do you, too.

But I just want to say that we come to the problem

There's only one thing we've suffered.

And I think me did a good job of trying to save the memorandum which you initiated, that we caved and gave in to later.

And for that reason, that's basically the reason the stock market's gone down.

That's basically the reason we have this uneasiness on the business community.

They think we're capitulating.

But I think time will cure that.

And Bolt's a very tough fellow.

He's very, he's a judge.

He's a great one.

And what will probably happen is the wage board may just go for a walk.

And if it does, then we'll have the issue.

Sure.

If you've got the issue, you can take labor on.

Then you can have a direct confrontation with the labor leaders.

That's right.

And then you can have a trade war.

There's a public number of government people.

You can have the same thing.

And you can do exactly the same thing, just a different composition of work.

You can follow the stream the day you want.

So you've run into a great risk.

I think you did precisely what had to be done.

We had to at least get, you know, no crowd.

You've got to have responsibility on this.

I know that's really important.

That's right.

But he's a smart girl.

He's on the bridge.

Now, if he doesn't perform, though, you at least have a little credit before you can attack him.

Otherwise, if he hadn't, if he hadn't at the beginning said, I won't play, then we would have been, we would have fallen flat on the box.

But anyway, anyway, with that in mind, the question then arises about our mutual friend, Art.

Now, have you seen him since you were back?

No.

Shultz has a bunch of money on him, I don't know what they call them.

But Archer is playing two or three games.

Well, it's a double game.

On the one hand, Shultz has told me this much.

He says that Archer has been supportive of everything that he's been doing on the wage price front, even though he disagreed with some of it.

He supports it once it's done.

On the other hand, the international market is still running around.

He's peddling a lot of this stuff that Europe may have a recession.

And that's our department.

He's told us that.

And that appears in the columns.

And frankly, I've heard Europe is not going to have a recession.

If it does, it's not our fault.

It's going to affect us like it used to.

Do you agree?

Yes, sir.

I agree.

I agree first.

We're not going to have a recession.

And the OECD came out with a report when they were over there, and they didn't make it public.

They gave it to the people.

Paul Grover said it's the most optimistic damn thing he ever saw.

He said he'd choose no recession.

He said he's probably a little optimistic.

He said he's a little optimistic.

Why in the hell is Archer pushing this line?

Well, Archer wants to get back to the fixed exchange rise.

Now, Archer's going on the gold, I mean, raise the price of gold.

I don't want to quote her much, but I just believe that they have to live in confidence on that sort of a case.

First, I think, first, it's going to work.

Second, Archer's line, although there's a mystique about gold, we ought to do it.

The difficulty is that even though ARC denies the disobedient element, so it's getting a little pregnant.

Why do you go back to it and then raise the prices a little?

Because you're really going to go back to the fixed-change rate or some sort of discorrectness to it.

On the other side of that, we just go back to a fixed-change rate, basically, largely based on Zoom and a convertible.

Well, we just are not going to do that.

In my view, and knowing as little about it as I do, I lean to the proposition

which is basically the Schultz brief and all that kind of thing, which is, well, while it's floating, let the goddamn thing float.

And after all, trade is not nearly as important to us as it is to a hell of a lot of other people.

It shouldn't make any difference whether we have an unfavorable balance of trade.

If we have an unfavorable balance of trade, it shouldn't affect our domestic political situation.

We shouldn't have to, because our balance of trade is four or five or six or seven billion dollars out of balance in a year, out of a trillion dollar economy, does that mean we have to cut our budget?

Does that mean we have to do this or that?

Say hello to them.

Or raise our interest rates, you know what I mean?

That's what I argue.

You see, that's what the...

So my view is that I think we ought to avoid that microflip.

That's my view.

And I know that now in the Treasury, you know, there's quite a school of thought that would want to go back to that.

I assume there is, because they help make paper gold and all that.

There is.

There is some treasury now.

There is some of these other funds.

I'm going to tell you, it's growing up in your own, in your own, why that's at some point, we, I mean, I'm going with them now.

Pete,

just keeps on going, the whole meeting, the whole meeting, the whole meeting, to write memos, write memos.

That went on for 27 pages long now, about, you know, the issues, and how you negotiate, and we had a meeting this morning, a breakfast meeting, and the whole thrust was, well, now it's time to move to get back to fixed exchange rates.

Well, I don't know how.

Fixed exchange rates.

Sure.

Well, now let me tell you something.

Now, let me tell you something.

All this is Peterson's right.

Peterson asked for a few months.

He does not know what the group was for.

Well, he does know.

Now, the point is, he isn't running this.

He isn't running this.

He's talking to the Lord.

He doesn't know me.

He knows more about it than I do, but he doesn't know enough about it.

But the point is, too, that he will listen inevitably because he comes from that group of the international set.

That's correct.

And we are not going to go that way.

And this is what's being reduced to writing.

I've got, all right, I've said this, I've walked that out.

I've said, hey, it's a 27-page secret document.

He says, well, the next thing is that we've got him painted.

But it is, in effect, the scenario for how you get back to fixed exchange rates and how we negotiate all these things.

I've been playing it loose and fair and dumb and ignorant and just saying, well, I don't know, just to buy a time.

Because I knew there, well, you didn't want to interact with the fixed exchange rate.

And they say, well, our inaction is forcing Europe to get together.

I say, OK, let them get together.

Well, they're going to have fixed exchange rates among themselves, and they'll float vis-a-vis the dollar.

I said, OK, that's what I think we'd like to have.

Let's do that.

Oh, well, we probably can't do that.

I said, why in the hell can't we do that?

I haven't tried to.

Hell, we can settle a thing.

Yeah, I understand.

Let's make a bad deal.

When I talk about deals, you understand, when I'm talking about deals with the Japanese and the Germans, I'm not talking about potentially shaming.

Maybe I don't understand it.

But I understand if you talk to the Japanese, the purpose of that is to get them to read that.

All right.

Tell me, how would you approach the Japanese?

What would be your name?

I would approach, I would approach the Japanese on what you want to do.

If I were done, I would first approach the Japanese on the basis of forming a training line with them.

Worldwide.

And maybe bring in, just as we've talked, bring in individuals from Australia and so forth.

I'd say, let's get us involved together.

Let's, Europe's interest is not our interest.

Europe needs raw materials.

Evidently, we're going to need competitors.

With China and Russia at your back door, you need us, we need you.

So let's lower these barriers.

Let's have free trade between Japan and the United States.

If you quit selling the Cadillac, we'll give you $22,000.

That's what we'll cost them then.

The Ford Mustang cost us $13,500 in Japan, just in the arm.

Go over and do some of these tariffs and quotas.

Let's have some trade here between the United States and Japan.

Let's knock down some of these tariffs.

Now, you're undervalued.

Your yen is undervalued.

And you've got to revalue.

Now, they'll go up to 15% this year.

They'll go another 10% next year, probably.

But they can't agree to that now because

Well, I couldn't agree to it because the wild speculation is an evaluation of the end.

But all that simply means is that that makes the dollar and the commodities of the United States more competitive with Japanese products.

It simply means that to yield them,

over here to the set of $2,000 they can sell for 15% of $2,000.

That's $2,300.

That could raise the price 15% of everything they sell in the American market.

Or conversely, ours would be 15% cheaper over there.

They'll do that.

I'm satisfied right now.

That's probably all we can expect.

Because they operate a different system.

They operate

almost solely on credit.

About 80 to 85% of all of their financing is on credit.

They have a damn little equity in any question.

And if we push them to the 25%, which is what the figures look like, if we had a real parity in relative values of currencies, it looks like they'd have to revalue again about 24%, 25%.

So, if we did that, it would break too down into other countries.

I think it would cause a wholesale bankruptcy.

I really believe that.

And they say that, and I believe it.

They say that they can rebate 15%.

And by doing it, they can still have a 5% growth next year in their domestic economy, and that they can stand that.

But over a two-year period,

they could probably go 20 years.

That's about the position they're in now.

I think they're willing, I think, to double their military procurement, say, a couple hundred million a year, five, well, that's a billion dollars a year.

Every little bit they can get will help.

If we can get some of their tariffs reduced, this will all help.

I don't think we can manage it permanently.

I think the only thing left is this particular form of retirement.

But I think what we need

perhaps with Japan, if she's willing to do it, is an agreement where we can remove the sanctions with respect to Japan.

Now, what do we do, though?

It's going to make Canada so bad or mad.

It's going to make Europe so mad that they're going to be climbing the wall.

But we ought to follow right on with Canada.

We ought to be negotiating with Canada next week and all that good stuff.

therefore can you you got anybody to negotiate yeah i'll negotiate when i get back and they'll do the preliminary work next week and our boys if you've got somebody let's get going with canada so that they know that they're on something and uh we think we ought to need it but obviously what about the latin americans if we ever break it when we lift it with respect to mexico south america

If we break Japan, sure.

If we break Japan and Canada, we lift it with respect to the whole Western Hemisphere.

But again, if we use it selectively, that means that this is playing a tough game, and we're going to get criticized for it.

Criticized means hell, but the point is we've got it, and let's use it.

Now, Ed, I might add, this is not the last time that you can do something like this, you know.

You can oppose it most any time.

Probably this, then, how about the Germans?

It doesn't take that long, does it?

The Germans are probably not going to go.

The Germans are not going to go because they think Christ must pray with France as they do with us, with France alone.

I see.

They're Gentile.

They're right to you, but I don't think they can.

But we can try.

But this means we break the European counterpart.

We break the European counterpart.

So it probably won't work, and they won't go for it.

So where does that leave us with Europe?

Well, I think, frankly, it puts more pressure on Europe.

It's probably going to drive Europe to coalesce even tighter and maybe get the exchange rate between their respective countries.

It would mean that we would arrive in Europe a little closer together, and then we would develop fixed parities and exchange rates between themselves.

and then perhaps fully against the dollar.

But I don't think that's fair.

Now, the answer is going to be that if we do that, or the charge is going to be that, they're going to retaliate.

Then it seems to me what we have to be prepared to do, and this is what, these are some of the basic decisions you have to make.

You have to be prepared to go to Congress if you have to, and it's awful good for domestic purposes, and say to Congress, I want authority, broad authority,

to impose tariffs or courts on any country or restrictions on any country that imposes restrictions on the United States, whether against our products, our people, our finances.

I want to be in a position where we can reply in kind so that countries begin retaliating

We're in a position to meet them tit for tat.

Of course, just saying, I want the authorities to negotiate bilateral arrangements that are fair and equitable.

I want to be prepared to be open, to be outgoing,

be as much of a free trader as any country in the world would permit us to be.

And because other countries have different problems and different governments and different philosophies, they obviously are all different.

So we can't have one common policy, and I would like authority to deal with countries on individual basis and be as free within as they are with us.

Basically.

Now, it's not going to work this way particularly, but

It damn sure is good for domestic consumption and basically would scare the hell out of other countries.

But Europe is going to be tough because of France.

Now France is a city that is basically immune.

France does very little trading with us.

And what she sells us, we want.

There's not a hell of a lot she can do about it.

10% surcharge won't just cost the American taxpayer more.

His brakes were P&P, no stock in American Williams.

He was buying French for him.

Or French wine.

You can make a costume for them.

But they're still going to buy it.

And France has a banking system that's totally unlike what we did.

They have a banking system that is completely controlled by the government.

Either directly or indirectly.

Indirectly meaning that they've taken people out of their treasury or their ministry of finance and out of their central banks and put them in charge of what few little so-called independent banks they have.

So that when they have a central bank, they control it all.

Literally.

They don't have the First National City or Chase Manhattan Bank.

They control it all.

So when they say to their central bank, we don't want any dollars, hell, they just don't take dollars.

So you can't

You can't flood them with dollars.

You can't make them.

They've got a two-tier system.

And they'll take dollars for financial transactions and for commercial transactions.

But they won't take dollars in any other area such as financial transactions.

Now, they'll take tourist dollars or they'll take commercial dollars.

Before you go over to the plant or where you find a French-made product, they'll take dollars.

But as far as speculating dollars, they don't think it's going to be better than the country.

So it's not a hell of a lot to live with.

That's going to be the hang-up in Europe.

And we can settle that deal.

As I said a moment ago, we can probably get the Germans to revalue 11 or 12 percent, which is within the ballpark.

We can get them.

France to go probably six, well, we get Britain and Italy to go six or seven percent.

France, what does this, what does all this have to do with getting back on, let's get back to a fixed exchange, which you don't want to do at all.

But I'm saying that it's, what about the Japanese that got put back to a fixed exchange?

Yes, just for them.

Now, they're willing to float, but they can't do it under their law.

Now, I'm not using all this to prove I didn't prior to that, but under their present law, they cannot float.

They say that if we, you know, if we go back to some kind of fixed rate, between the yen and the dollar, or instead of 300, instead of 300 yen to the dollar that they revalued, if we could, if we could get 45 yen to the dollar.

That'd just be between the United States and Japan.

Now, that could change every week if you wanted to, but it's not strict voting.

Now, they are saying that if we'll give them a year, that they'll change their laws in Japan to where they can vote.

They say legally, we can't vote.

Now, Europe doesn't want to vote.

Now, they said to the broker, they said, I'm going to get two runs out of it.

They said, they don't even talk about it.

I mean, the branch buying focus against the dollar and the dealer and so forth.

They said, the more you talk about what we do, the more we have to keep the surcharge on.

Then, we've got to keep the pressure on.

And you have to face the possibility of this deal.

The people, the local political parties, may leave with property, they may both leave with Willie Bryant, they may both denounce, all three of them denounce you.

Unless they get back and fix the changes.

Now, the truth of the matter is that what they want is to get back to the system they have for, in effect, the United States.

supports and sustains the International Monetary Fund and assures the economic viability of the international system to our detriment.

Now, that's what we want.

And this is why I don't want to get back to the fixed exchange rate.

But I think we can stand proof under it.

Now, it means that we're going to take tremendous punishment for it.

the internationalist crowd at home, and within the government, unless we take some new initiatives.

The Japanese would be what?

Canadians.

And then the Americans would be a second degree.

That's what you call the internationalists.

That's correct.

Well, and Canada?

You're completely justified.

Canada's floating.

Floating against the dollar.

Now, when they started floating, the Canadian dollar was worth 90 cents.

I checked the last four days, the last five days, the last week, it was worth 99.6 cents.

It had gone up.

So our competitive position had improved by approximately 10% versus 8%.

So their Canadian dollar is now almost an identical power of the United States dollar.

But in any event, they're floating.

It's not a pure float.

We could probably make, ease it up to where it could go up even more and give us competitive advantage.

But we ever are equal.

Except, listen, let me have a trade in this.

Let's get busy on, get your, get your, your people up there.

When you get back, you can make a deal with the Canadians.

My thinking at the present time, deal with them for reasons of .

One of the reasons that I want to keep Peterson out of some of this is that I

political considerations that they have no ideas about.

So I'd like to be able to let's go on that.

And then I'd like to be able to be nice to a Latin American.

And then we just back down the hatches and have to take the goddamn European on.

That's all there is to it.

I don't know where that's going to be.

But you say that the Jewish memorandum, in effect,

comes down on the side of going back to a fixed exchange.

Basically, you know.

Where the hell did he get the ideas from?

He's been meeting with a group of other secretaries.

Yeah, all over town.

He's been talking to a lot of the internationalists.

He's been meeting with Europeans.

We've got everybody in the building.

And I must say, it's in the normal course of their business.

The head of the European community was over here last week.

He met with Sam.

And then he came over and met with Peters.

My God, we just had media, that isn't good.

Well, we just had media for farmers in every department of this government almost for the last two months.

And Arthur Burns, incidentally, is really screwing us up on this international thing because he's got this, I told you, this fellow Zellström.

I was going around talking to the finance minister, she spoke to Baker before, and I told him, after the IMF meeting, I said, he brought up the subject, the one word they couldn't use as a,

as kind of a go-between between the European central bankers.

And I said, yes, I mean, that's good.

He's got all that confidence in him.

I said, I'm impressed.

The next thing I knew, he had anointed him not only to be a go-between between the central bankers, but all the finance members.

Is he a bad man?

Yeah, I'm sure he's a simple banker.

And I said to Carl, I said, this is not my understanding of what this man's supposed to be doing.

And hell, I even went so far as to tell Schiller.

He's damn sure carried an old portfolio from... Is he an artist, then?

No, he's a Belgian.

Christ says.

He's a Belgian.

He keeps going around seeing all the finance ministers in Europe.

Not just the central bankers, but the finance ministers.

The franchise from our Harvard?

Yeah.

That's right.

And so I'm going to write a letter.

The reason I'm telling you this, I'm probably going to write a letter to Arthur.

I'm probably going to write a letter to all the finance ministers.

saying in effect that he carries no mission as far as we're concerned.

And I'm going to refuse to see him.

And I provoked her not to see him.

You keep Volker playing a big part.

He is.

Don't let Volker.

I'm not Volker.

You know what I mean?

I don't want him to take it in with this other group.

Volker's fine, but you know what I mean?

He could be.

I'm saying that.

He'll do what you say.

He'll do what I say.

Yes, sir.

Okay, yes, sir.

He believes what I say.

Yes, he does.

No question.

But he does what you say.

Yes, I do.

But the thing is that these Europeans...

come over and meet, they pick us up and everyone's talking.

So that isn't worth one goddamn for us.

This is why I think you have to restructure your State Department.

Well, the reason they talked to everybody, you've got Peterson, you've got Samuels, you've got the Treasurer, you've got Bernhardt.

That's correct.

And you've got the Council of Economic Advice.

That is correct.

And we've just got too many people.

Now, ideally, I suppose you could say, well, they're confused.

And the White House staff actually can't do that.

No, this is basically so much of a Treasury responsibility.

You really ought to carry on these kind of negotiations in the White House.

Not over a long period of time.

Because on a spot basis you can, but you can't do it on a continuum basis because you can't sustain it.

Your view is that the way this ought to be handled is through a...

Frankly, I'll be out on the State Department if you haven't been set up over there.

Because they have, for the last several years, had the responsibility for both trade and economic negotiations.

State can't do this because they don't believe.

That's the problem that you have right now, so it'll have to be in creation.

I don't know, I don't think you can, I don't think you should.

You know, there's something to be said for the sanctity

of organization, you can't have the director of management.

No way.

Well, if you do, you've got to have, you ought to put it over a sector of credit.

On monetary affairs, see the problem is, you've got three different things we're talking about, and they don't fit anywhere.

Now, on strictly monetary affairs, this really ought to be credit.

On the economic affairs, it used to be credit 20 years ago, but it's been in state.

That could be in commerce.

If you ever got your reorganization, it probably ought to be in the economic administration, in this new department that you're setting up.

But that didn't happen.

Now, then you've got the defense matters.

Well, this either has to be in state, as it traditionally has been, or in defense.

But probably, now the truth of the matter is that we just, all I'm saying is we damn ill-equipped to carry on the type of battle that we need to carry on right now.

This is what I'm really calling your attention.

And I think in fairness,

I should say that there is more knowledge, probably, in the strictly monetary field, in the treasury, than in the other departments, but I will say that's true in the economic field.

Part of the other department states are probably better informed than we are.

What about Congress?

Well, they've not traditionally been a part of it, but they've got a lot of information on economic matters.

And I'll say that as far as you're interested, stay on time.

Stay on time.

Well, it was possible that we could take, it was possible, and I'll tell you what I would say.

This guy followed me.

I'm like, hey, if you need it,

Well, frankly, the round, the square face of Alcoa, I'm afraid, is that he's not a rich man.

I think that's part of the reason.

He has to be more and more involved, because I think he feels that he, you know, that that's his problem.

And yet, he is not equipped to move the monetary field.

crazy no he's not really including him and and and he said he's a bridge of all of them he's

much better than the Steelers' playing, playing that's got a tough, he's more like a stance, because the young person doesn't know about, you know, genius.

What is your view?

And if you need to bring a man in or something?

Well, I think probably what we ought to do

We've got, we haven't had mid-meetings.

We've set up, had a set up, had a good handle.

We're going to refuse to bring it into it, and we ought to bring it right.

Now we've got L.D.

Pryor.

Well, we've got Henry.

And, uh...

Well, you can't let him out there thinking he's doing something.

No, he probably has to bring him in.

But you can't let him come in and think he's running it.

That's the problem.

That's right.

You've got to have basically an executive secretary.

You've got a chair, and somebody's got to be the executive secretary.

I'm not sure you're on the wrong decision.

I think you ought to have...

Well, Mr. President, they just have, or they cut you off.

They have the contacts, they normally, and they've just got more damn stuff going on all the time.

And the sad part of it is that their counterparts in other countries are involved in all trade negotiations and defense.

We're not very heavy in those fields, and that's the thing.

We can leave with the state out.

on the theory that really is, when we talk about defense, we're not talking about .

Now, just so that you have it in perspective, all we're talking about on defense, I thought of defense and trade matters just to confuse, you know, just to make it more difficult, so we don't get right back to this little narrow monetary field of our fixed exchange rates.

But as I envision,

At least in the defense field, we're talking about an all set agreement with Germany.

We haven't gotten to negotiate with them for two years.

Well, we can get some kind of agreement, but it's a better agreement to give us something that will help us on a budget basis of a couple hundred million dollars a year.

On Canada, we've got an agreement with Canada.

They're just 10 years behind.

They just owe us 500 million dollars.

They're supposed to, in effect, buy about $50 million a year and stuff from us, maybe just 10 years behind.

So what we're saying, though, it's a little up-to-down agreement.

That's basically all we're talking about in Japan.

We, largely through the PXs and warpage and docs and so forth, we paid Japan around $620 million last year.

Well, this is for military perks.

Well, they're going to run a $2.5 billion surplus with this issue, so it's not unreasonable, along with everything else, to say, well, if you want to buy up to $100 billion worth of military equipment, whatever.

These are all, these are three countries.

That's all we're talking about.

It's just some kind of cloud issue.

Now, on trade matters,

We don't give a hell of a lot either.

On Canada, mainly it's the automobile industry.

We want to force them to do something.

On Japan, we want them to relax and bury everything.

So it's not that big of a deal.

And we get by without any of those things.

We have to.

But I keep pushing so that we don't.

get all of those things showing off of us and sitting there then with a demand that, well, we've got everything settled except just getting back to fixed exchange rates.

See?

Because that's where we are.

Yeah.

Before we get to Schultz, how do we handle the two things you wanted me to do first?

What about ferns?

Should there or should there not be a meeting in the quadriads before you leave?

And, or second, should there be a, as the Burns have been trying to get in, I'm not loving it.

Yes, sure, June, he and I, but I didn't mean to leave the corporate head.

Well, it's better to leave the corporate head.

All right.

I'm a resident of Arthur, you and I.

Just leave her right there.

Now, with Arthur, you know, there is this perennial money supply down.

On the other hand,

And also, we are holding over him, John, you know, these two of us.

And I've given him those.

I wouldn't even, I wouldn't give him a goddamn thing.

On the ground that I am, I just don't know yet who he might be.

But I thought, I thought that they were mad at us.

I talked to Greg Maddock last night.

And he could possibly have freed you.

Yeah, we can get Brimmer.

I've already worked that out with Rogers, but that job will open up, I understand, for two, three months or something like that.

I think that's the problem.

I think.

Anyway, I don't know what it is, but at least it will open up and then you'll get that job.

We'll still work.

Right.

And if that's being true, I'm actually afraid just to say, fine, we've had a breakfast this morning, I guess.

Just say, are those present ones who, he's not about to name one guy, because he gets all three of these fixed in his mind.

He knows he's going to have probably three here in the next two months, and he's got about, I believe, what, 81 men left.

He's going to put all of those in question.

Geography is in question.

You don't owe him that much.

Boy, I don't know what a goddamn thing.

I mean, they're your apartments and I want to use them because they're there for a long time, Mr. Perkins.

I know.

And I don't have hundreds in our groups.

Well, I, you know, he has many fine qualities.

Yes, he does.

I reckon he's smart and all that.

But the ego problem is so big there, John, that I'm not going to have a man on there that's like, you just beat a heart and a bird and stewed.

In other words, you're making mistakes too damn big.

I've got to have a few judges on there that are going to look at it that way and ask a few questions about it.

Correct?

Yes, sir.

I'm going to be candid.

Jesus Christ, there must be something more out there.

Mallory can work on it.

Yes, he can work on it.

And I told him he wanted me.

And I told him... A Texan?

No, this boy, Earl Cox, from York.

Oh, yeah, yeah, yeah, yeah.

Oh, I know the doctor here.

I met, I know you met the one he recommended.

Well, Tommy's a nice guy.

He'd be a video for him.

Who?

Tommy Thompson.

The guy he wants in Texas.

I don't know.

But he's a mild man.

He's very soft-spoken.

Not very aggressive.

He's a tough guy.

He's a boss.

He's a good rapper.

He's not going to get caught.

I basically would like people to take some direction or do whatever you want to do.

He's a Democrat.

I don't think he's the best.

He's a very conservative Democrat.

I don't think he's the best reformed man in the world.

He's had experience at the World Bank for about five or six years.

He understands it, and he's got guts.

He can stand up and talk to it.

Well, he would not be for...

He wouldn't be over...

He wouldn't be for saving the dollar at any cost.

No, sir.

Yes, sir.

If your man put lines in, if you told him that black was white, black would be white, he's that kind of a guy.

Just that simple.

And frankly, this whole thing...

And I don't mean to be critical, but it's because there were too many people with too many ideas of their own who were just engaged in self-promotion.

And it was for themselves.

Right.

They just all envisioned for themselves.

Have Schultz come up with the old email?

How is everything else going?

How are you looking at the U.N.?

Any further information?

Why don't you raise that with, uh, kind of see that?

So, why don't you raise him and, uh, I think, uh, we should, should come down.

There's no harm in that at all.

Yeah.

Well, uh, tell, uh, tell me what it is, and it's definitely, you know, and just, and it's, uh...

So we'll call, Duke will call us back.

I don't think, I'll be able to come down anyway.

But we can't, you see the Reagan idea is going on for a long time.

Yeah.

And we can't tell who's in charge.

They'd be attacking them.

And I don't think it's going to be an argumentation.

Yeah, yeah.

Well, that may be a problem.

Okay, all right.

Ready to do it.

This week, we're going to be submitting this proclamation.

Are you ready?

Because he wants to do something.

He wants to do something.

This can't do it.

Now it's different.

You can't do that.

You see, you've got to use it.

You may have to.

But you can't just...

But you don't have the responsibility.

You can have a lot of great ideas.

Sure.

But you, no you can't do that.

I do think you have to find, what did I say, what do you want me to do?

Go in the back and kick you out of the line.

I'm sure you're going to have some position.

You know, challenge you to get back in.

You know, that I would do except for the fact that

It can't work, you know what I mean?

If it had any credibility, I would do it for men.

But it has no credibility because the vote was on two to one.

The vote was on the crucial vote.

The part of the question is that they have to, once they cross that point,

Then they voted on whether or not they should be expelled from the studio.

Now, therefore, if you were to vote to get them back in, the two of us would be in the kitchen until she's gone.

That might be my visit.

There are those who will vote with us on the important questions who would not vote with us and have them back in.

Well, that's true.

It's a hell of a tough problem.

I adored my husband.

My husband was a champ.

I mean, not that it has to be a chance to win it, but it's got to be some indication of being other than something, an idle gesture.

Well, I don't know nothing about it, but I dare say they've never failed to take it to a country.

Huh?

I dare say they've never failed to give membership to a country.

The nation of China might not want to apply.

But they're expel now, they're not members.

And now, at such time as they might want to come back in and require new membership, well, I don't want to delay it.

But I don't, I dare say the United Nations has never turned down a nation.

I mean, I don't want to recognize them as a nation, but once they're part of a question vote, I decided, see, it's like a vote on the Hill.

Once they see how the thing's going, what my dad did to me, you know, in more honesty, lopsided.

And once that decision was made, once we lost the important question, well, then, of course, how are they all going?

Sure, they're two to one.

But I think in the aftermath of this thing, everybody's going to sit back and say, what the hell have we done?

We expelled the country.

The General Assembly, we just kicked them off the security line.

We kicked them out of the General Assembly.

And if they now reapply, they would be applying for security challenges too.

They would be applying for like potty, or ballroom, or care, and the rest of it.

I don't know.

I haven't even looked at it.

I don't know any other issues that you can take.

But you can ask me questions.

I think it's just a matter of law that needs to happen in the world and I need to reflect on it.

and almost uh being an insurgency uh around the world and this is going to be an environment and i think it's going to be tough but i just think you've got the greatest opportunity

And I suspect, I feel better about it, but you may have a way of talking to your partner and saying, hey, right now, we're in this country, and we're surviving.

But you've got this thing pretty shaken up now, don't you?

And frankly, I think the limits on you now are going to be strictly the limits of imagination and responsible thinking that comes up in the literature department from this point on.

It's so important that we get some constructive thinking from all of these agencies.

I literally think you can reshape this world

in a real sense for the next 25 years.

I really do.

I think you're going to have to be tough about it.

You're going to have to be bold about it, which you have been.

You've already done it.

Now people expect it of you.

And I vote on the political front, the Chinese and the Russian front.

And frankly, everybody approves of it.

Everybody approves of it.

Now you don't want to ever let it stop.

You want to keep this momentum going.

And so you lose the rest of us to try to feed you that idea.

Absolutely.

Which way we can do it.

To do it.

And this is why I think that if Bill Rogers is in the movement,

would you say, is to take a little bit, maybe you can get some things out of that, or bring out some good people to talk to.

And I think they all have some creative ideas.

Hello there, Doctor.

All right, sit down, sit down.

How are you?

Good to be here.

What was next?

Sir?

Pretty good.

We've got a lot of range of weather around here.

We've got a very good guy on the side.

Let's see.

.

Okay.

Very deep 7 o'clock right now.

Yeah.

See you later.

That gets us in there sad in the morning.

It's 7 o'clock.

We've got a lot of money.

Besides, I mean, we've got a lot of questions.

We've got a lot of questions.

John, use the plumbing if you like.

Would you rather I sit down here?

George, if you had a chance to read the piece in one of your papers, I'd love to get a look at it myself, because it's a great idea, and it's a great book.

Apparently, he just came all out from the current place of shame.

He came back from Europe and having made the, he said, I'm sure it's right, he had waited.

He doesn't, it's a hard sell, but he said he made two, two different runs at both of the chain rates.

And, uh, he didn't want to talk about it.

He said, also, it's a beauty store for him, you know, and, uh, he said, you know,

I was trying to bring it up.

I said, this has to be .

I find it on two different occasions.

In the media.

Obviously, I won't comment on that.

I won't go straight into it.

But you're regarding yourself, you're assuming yourself, you think that

I heard he said, it's trouble, or that you're willing, or that you need to see.

And I thought, I heard that you really were willing.

That's what I thought.

He said, he said, I don't know what he said.

He said, I don't know what he said.

.

He says that they only will accept it if the other part doesn't.

I think that we have to be closer together.

This last week, we talked about a statement I made on the sidelines, and I saw a story that came out in Germany, talking about the possibility of dealing with children in the United States a few days from now.

And the last paragraph that I talked about is,

Then there was a story about the conference there.

We had two stories.

One came out of Germany, but I saw it before I went there.

Then there was a story out of Haussmann, which is totally out of context, what I've said, but it didn't get there on the previous story.

It had come out of Germany.

about the fact that Sher and I have been discussing a possible deal that I'll probably be able to talk a little bit about this in a very short time.

You know, he said, oh, he's trying to assure that we're being partners and, you know, it wasn't meant to be.

They were trying to be on the side.

He said, if you tell us about it, you know, we'll be able to close it together.

So I thought, you know, we're going to do it in two years.

Probably for the first year, when he indicated that he was $2,000, he came over to $2,500, and he matched the year.

Yeah.

There's other commissioners who did most of the problems that were important.

And he said that they said, well, you didn't have to try to settle with them.

We don't have a question.

We don't have a problem.

We just want to fix and change things.

We thought it was going to be a big community home.

And we're going to do it.

We're going to do it.

... ... ... ... ... ... ...

But I'm more and more...

He's writing more and more memorandums.

There's more and more media.

There's more and more documents.

There's more and more print.

And I just don't think this is good.

I think it's smart.

We don't worry about what we're doing yet.

And I don't.

I don't think y'all do.

And I don't think y'all do.

We used to have a lot of stuff to write in.

That's just one part of the exact same thing.

All we need to do is figure it out.

The reason I haven't read it was it looks too far.

Well, all we need to do is let ourselves in with a bunch of goddamn pictures.

36 pages long and single-stakes.

That's the kind of document that I put aside.

Well, me too, I agree.

But all this does is build a fence around our actions and how we want them to be.

We want to be able to sit and talk with one another.

very, just very generally specific.

But, uh, he doesn't want to go back and fix it.

I have, uh, I think that there would be a good thing in the present.

I mean, you know, this guy, whoever's going to do the discovery,

.

I have, you know, I haven't been to the end of the world yet, you know.

And I'd like to get myself more out of the sea.

So I'm going to go out and get some of the stuff that I've got.

I'm going to go out and get some of the stuff that I've got.

I've tried to resolve the issue for a while, and I've got things more settled than I've ever done, and I'm excited for what I'm going to do.

I mean, I have to say, you actually shifted to a good shift, but I think it's the same kind of person who picks up the news, particularly up in your church in Japan, and quite a giant group of viewers.

.

We're working around the subject and we understand that many of us don't know what's going on.

It's a final hour and we have to get ourselves and pray to God that we are willing to deal with fear.

And we will.

And I would say to Clark, in this time of year, that it's for me.

Uh, we had a pretty good set up to do it, uh, with each of our heads, and we rationalized perfectly well that, uh, we should be willing to do it, and, uh, I think that the version of the thing that we're doing, the one with the foam cracking, would be a nice discussion.

Can't be anything else we're gonna do again.

They're going to create this kind of explosion of interest there.

But I don't think they're going to do that.

I don't think they're going to do that.

They have, they have, they have about 10% of the evaluation, and that's a lot.

And certainly that recognition of the fact that it's happening is the following thing.

It gives us a chance to reflect and say, you are, you recognize what happened, and you recognize some additional things.

.

There they are, folks.

Yes, right at that.

I appreciate it.

Send it to Canadians.

Send it to Canadians somewhere.

Another list.

More ice cream or coffee or tea or hot?

I'm going to have coffee.

Have you been able to discuss that ice cream?

We can discuss the organization side.

I mentioned this to George yesterday.

I think we have a problem on the organization side that we cannot look at and go away.

We can't have a situation where Pete Peterson, if he has a franchise, and then not having, having one that he shouldn't have because this doesn't work in this area.

We have a problem, for example, with one of the Europeans.

They come over here, you know, they oversee sangos, they go see pubes, they go see Arthur Berners, they go see Paul McCracken, they go see Will Spinozzi, they go to our concerts, they go to the National Wave around the show.

They speak with one voice and we speak with maybe four or five.

We have a situation where Davis and John have read his memorandum.

And the way he interprets it, I haven't.

I haven't.

And I think for very good reasons.

Probably because he's talking to that kind of people.

He's very much influenced by that set of beliefs and parodies of people.

build to some sort of fixed parity business again.

I mean, that's really what it comes down to, and he lays out all the options.

But, you know, that is the, that's really the dogma that runs through it.

I have to realize that's the State Department's position.

That's Arthur Vernon's position.

And if it becomes, say, the Peterson's position, it's got to face the voters.

And it's voters, too.

Now, so for your guidance, though, at this point, it is not John's position, it is not mine.

We both believe that at this particular time, and frankly, I think forever, myself, that we damn well are not going to go back to that.

We're not going to sit in responsibility.

We're not going to have an unfavorable balance of trade of even $10 billion a year, in fact, a trillion-dollar economy.

Therefore, it caused us to make massive decisions regarding our budget, regarding our so-called quote inflation, inflation which is not as bad as theirs, and so forth.

Now, we rolled out the raise to the price of gold, but it was getting a little pregnant.

Right, John?

I sure would.

Well, I didn't.

At least for the first time.

I just don't like that, period.

I know it means that we're afraid.

I think the ideal is, at the present time, looking at John to me as a person, as to what we do to teach.

They're probably ought to be on the Dominican front, having in mind the fact that we've got this vessel on this flight, where he's probably going to quadrate me before he leaves.

And so I would think that we might set that up for maybe Thursday afternoon.

That'd be all right with you?

That'd sound like it makes sense.

Yeah, but he's pregnant.

He's in surgery, too.

Well, that's... Yeah.

And you can... Well, the truck is a mate.

Then we have a quadrate.

How does that sound to you?

Come right over.

It wouldn't be fine, but let's get our over with.

I don't know about the money supplies and all the rest.

I would like to have this somewhat structured.

I don't know what the hell we want to have come out of it.

Well, I think we are spending a little time discussing that here, if we could.

And then I think we probably need to thrash around a little bit ourselves before we'll be ready.

I think we should just have a quick interview with you from scratch.

Well, I'll be ready.

Well, let me ask you this question.

Take one meeting, and I'll be ready whenever you're ready.

And then I'll come back.

What do you want to come out with?

What do you think we ought to take up there?

We ought to get this whole... Well, I think we certainly ought to have... We ought to review this legislation.

We ought to talk about...

these European meetings that we just had and revealed to everybody.

And to be sure we all are operating with the same information from the same place.

And we certainly seem to be able to talk about

whatever instructions you want to give me if you want to do it on this trip.

I would prefer not to have the opportunity to talk about that.

I don't want to discuss that.

I think the next thing we ought to discuss is the manner of the tactics now that we pursue.

But we don't want to talk about that.

Maybe we don't talk about what we do in Japan.

Well, let me say this.

On Japan,

on your neck.

It seems to me that if we can think this step through, I think you would know what I'm doing.

First of all, John, you know very well, if we start spreading out this business about what we're going to do with Japan through this goddamn government, it'll leak and have all sorts of problems.

And I think we ought to handle this very closely on the basis.

Now let me say what I believe at this point.

I believe at this point.

You remember, we sat in this room on a Monday, and we determined on a Monday, John, you recall, or I reminded him, I can just go back, we determined on a Monday that we'd go to Aunt David the following Sunday.

And then all the work was done, and we went there, and it was done, you know?

But three of us determined, you understand?

Now, in this instance, recently, it didn't work that way.

We know none of us are going to talk.

The way I feel about this is that, and I think I'm going to use the evidence.

First, I do not believe we should go back to a prosperity system under any circumstances.

I just believe we are.

With the birth of Whittleton, but that's what I mean.

That's the word.

I don't know how to describe it.

Second, that rules out the artist's business of raising the price of gold.

Third, I believe that at this point, the tactic should be, for reasons that transcend the monetary situation, I believe it's very important for you to try to make a deal with Japan.

Now, if you can make a deal that accomplishes any of the changes that have evolved on it,

And then, at the same time, if you can go forward at other levels with your own negotiators to negotiate with the Canadians, so that when you return, so that they will know this is done, when you return, we can lift the surcharge with regard to the Canadians, or basically, the Western Hemisphere.

Japan, the Western Hemisphere.

Now, that'll leave us there, sitting there, for the Europeans ready to kick us off.

But I think on that score,

We then, now my Westingham is there, maybe it had to include the underdeveloped countries, although while we've gotten that, I think we ought to include the academics, but none of us, that would mean much, but none of us, coming back to the, did that just matter, you just decided, coming back to the, coming back to the Westingham, coming back to the Europeans,

There you are up against, it seems, from what you have said, the Germans can't be split up.

We do face a united front.

And so we're just going to have to batten down the hatches after doing that and then see what happens.

Now, what I would like to see then is some kind of a program, some way that we can program ourselves to accomplish those goals.

In order to do that, that means that you've got to get Peterson

compartmentalized.

We've got to get our approach now, or at least silence, or muted, or whatever the hell it is.

One thing, for example, is George that Arthur's done.

He's got this Belgian running around talking not just to central bankers but to finance managers about what the hell we're going to do.

But now we're not going to have that sort of thing.

I mean, are you aware of that?

We are not going to have that.

Arthur raises hell.

He raises hell when John has a meeting with central bankers.

And now here, well, let us face it.

The chairman of the Fed is not the one that can make this kind of decision.

He's firing on the Fed.

This thing is fine.

And we want it because he's got this smart problem.

We need his cooperation.

But we want to remember that when we looked at the so-called new economic policy, it was the international aspect of it that Arthur fought to from NATO to the last.

Therefore, it is now time for us to move on this thing in our own way.

Now, I laid this out as a game plan, and I talked to John about it, and you critiqued it.

I'll tell you, the Japanese thing is important.

They made the Okinawa deal.

We want to give a little signal to the Chinese and recover from them.

And it also shows movement.

In other words, we are beginning to have movement.

The vulnerability there is that once we do break off the Japanese, and we've got to do the Canadians, of course, and the Americans at the same time, a lot of times.

We're sure as hell that John funds out on anti-Europeans, and that's the international set of New York-based methods.

On the other hand, that's just one of the costs of having a policy for people.

So there's where I stand.

Now, what this rules out of us is, at the moment at least, is the out-of-the-burner proposal, and frankly speaking, we ought to have a meeting.

the major European nations, Japan and the United States.

But the way I look at that sort of a meeting is that kind of a meeting inevitably will lead us back to mixed parity with the very low.

Inevitably, that is what they will end up with wanting us to do.

Now, we can break the Japanese off, and it's very much to our interest.

Now, John would not announce all this, and then he'd end the deal with Japan.

He wouldn't announce it while he was there.

So, you see what I mean?

Which gives us time to come back and make the deal with the Canadians and the rest of them.

Now, he negotiated.

Oh, John, I should tell you that you've got a couple of little kernels to give him on over now, and I told Dishy you have one.

If they raise that Voice of America station,

I think it's all solved, and kiss me directly on the amaranth for you.

If it isn't, we don't even know about that Voice of America station.

The other thing is that they, there are some, the opposition party, socialists in Japan, are raising hell about the amount of land around our bases that we are retaining in Okinawa.

This is a matter that I told Kishi was negotiable, and that you would be prepared to hear what they had to offer, and be prepared to negotiate with them on it.

I want you to do that.

I want you to discuss it toward them, but having in mind the fact that you're something we can make a deal on.

And I'll have Kissinger write a little memorandum on that, too.

One other thing I should say is that our ambassador in Japan is a very pleasant dummy, and you must, you must have meetings without his being present.

Do you see what I mean?

Your meetings must be without his being present.

If you take Sullivan along,

State Department person, I want you to be sure, I want you to, I just must emphasize this strongly, any meeting that is important with the job that you consider the vital importance, don't have the American ambassador position.

Is that clear?

Yes, sir.

Indonesia, no problem.

He's not a bad problem governor.

There's much, he, I think, will, his program.

But Maher doesn't know enough.

He's a reporter in the state and the whole government and the whole, but he's not the treasurer.

And there's the treasurer, first in Tokyo.

He's very good.

Well, you could take it.

Well, now I understand.

Don't take anybody that is going to go back and report to the embassy, John.

Let me say that I think your talks with the Japanese, you must tell them, are for my ears only.

And you want to say that the president's

practice is to talk with leaders alone and not to reveal them.

And that's why they talk freely.

And then you just sit there and talk with them.

But I just feel it's very important for you not to only have a trusted confidante.

So,

It's going over.

Of course, he's going to be for the Vietnamese, primarily.

Right.

But he may be with you the whole trip.

Frankly, no, I'm not going to let you have him.

Don't have him with you in a meeting.

Just say that, on this international monetary thing, these are matters that have to be discussed on a very private basis.

We just don't want to go down on it.

And thank you very much.

And you go out and see the Asian girls.

I'm an ego, not you.

Now, George, does that game plan make any sense to you?

What I said?

I can't say that I've read it word for word.

I have gone over it and I've looked through it for a long time.

And I think I have a pretty good idea of what's in it.

But independently of what you had, I thought I had come to a very similar conclusion.

And I guess I would add perhaps one

I don't know what to have to do with Europe.

But I think, hey, we just have to hold on to the health and security point.

That's really a pivot.

That it is time to try to get things settled.

But Japan has a button to start.

And we can apparently go on until we get a re-evaluation of about 50%.

somewhere John's probably talking about this yeah they put that signal around well you may and that may be an opener but we can recognize the things they have done

Yeah, and that's very important.

They supported us in the UN, like Iraq did.

And the goddamn Europeans did not.

They sure did not.

Boy, they were to a man against us.

We were quite aware of it.

I take it there's...

they are ready to be done with some kind of change in their procurement policies with respect to the rest of the project.

John, I think so.

I'm just thinking about things that we can get from them.

You mentioned something that I didn't know about.

We could do that.

Yeah.

Plus, we build a search yard, which means a great deal of things.

Yeah.

And that seems to be...

And that means we're saying that we're going to do these things bilaterally.

Well, I think there's a lot of countries that wouldn't.

The State Department doesn't like that, but I think they're willing to rationalize that.

Then, with respect to Canada, they have almost a clean flow now.

Maybe they do.

So they need that.

That's what jobs there are.

I understand.

I guess you can talk about this, John.

get some of your progress on the oil agreement and get that in motion.

I think what we want to do is basically set the agreement.

I think we mentioned earlier that a month ago, if some way or another we could crack into this oil issue, we'd have to do that kind of structure of that situation in a week.

What we want to have an assurance that as far as it was that we allowed them to bring into our market at the price of the real price,

will continue to flow our way, given there is a crisis.

And the problem is that they want to protect, of course, their eastern areas, which are getting their oil from Venezuela.

They're shipping cheap oil in by Venezuela.

And exporting oil from which they get a high price to us

So we say, all right, we'll take that deal, but we want to be sure we have a commitment to maintain that flow of oil.

That's the reason why we're running it there, particularly with land area.

Now, the State Department's been messing around with that for a year and a half, getting nowhere, and that seems to me to be something important for the standpoint of our national security, if you know what I mean.

Well, put your hand on that, John, and get that one, too.

I think we can, Mr. Perkins.

I don't know what kind of an ambassador we've got.

I don't know.

Well, probably not.

Flanagan is pretty good.

Yeah, Flanagan would be good in this.

Incidentally, I'm not trying to push it along.

But Flanagan is a bearcat if you put him on anything.

I agree.

He makes all kinds of enemies.

The dynamic gets it done.

Use him on anything that you want, John.

He's tenacious.

And he's very faithful to us.

If you want him to stop obeying your instructions, you better tell him, because he'll just keep doing it.

Well, anyway, it seems to me that today's thing could go.

And I agree that we could say...

that the search arts was put on because of problems created for us by some of our sites, like Japan and the rest of Europe.

But Latin America basically hasn't caused that problem, so we can just let go there.

There's nothing to be lost or gained.

Maybe with respect to other parts of the world,

come down to Europe, and then I was pretty wild-hearted in this process because I don't know quite how to handle South Africa, Australia, and New Zealand, but only advantageous to put them into our sphere of being forthcoming with them.

Then I have to respect the Europe that's coming along.

We could take the approach, I think.

are saying, well, Germany has been voting.

The mark has revalued by 10%.

And what else there may be in here to further share, I don't think I can.

There's discussions going on in that area.

So why couldn't we remove the surcharges with respect to Germany on the basis of what they have done is perhaps an understanding that there is a, there is any general move that they would go along with that too.

They don't have to

to do anything very much different than they've already done.

They've already behaved very differently from the French.

Well, it'd be better if we could do it with them, and it seems to me we might get going with them.

But what I would understand is that, as I was saying a moment ago, since the fungus section of Belgium is so oriented to the Netherlands and Germany, as opposed to the Walloon and the French organization,

the Belgians would be hard pressed.

In other words, I think there's some chance that we could make Clark a little bit bigger than the French did.

Good.

No question.

I want to screw the French and the British all the way.

Now, we could...

The Italians would help with that.

Doesn't matter.

We could then, with respect to some other things, put this thing back in the gas.

referring to the preferential arrangements that the Europeans have made very widely, and to their agricultural policies.

And they've pushed through the gap, and that we be served on all fours.

You're going to jump ahead a bit.

That's an idea for how to do this, to check.

There are also some ways in which we can handle the exchange rate

maneuvering in this kind of a system that wouldn't load us up with commitments that would put us over the barrel, I think.

And again, I think Bochum has some thoughts on this subject that we could use for development.

I think, to me, if we went through this, it wouldn't take all that long to do it.

that it would be timely, that John could work out...

Excuse me, if we went through this...

If we went... No, no, sir.

If we...

There's a battle...

I'm talking about this as a program that would go from John's trip to Japan, and I don't know how we would program Canada.

We'd have to...

But all these things refuse to say, this is what we want to do.

Then we can set to work and operate and have us do it.

Our people paying all of them to meet with the Canadians this week.

I've already told both of them to get up there next week and get all of the things that we possibly want saved.

And not to obviously agree to anything, but just test the water and see how near they are and give us, you know, ask for the money.

And so that's our program.

I think by the time I get back from Spain, hell, it's made.

There's no problem.

There's no problem at all.

I think we ought to really develop this thing.

In Mexico, we talked to the president.

That's right.

In Argentina, Brazil, and that president.

Give them a little credit.

They left it for Mexico a day in advance.

They left it with respect to Brazil.

They left it with respect to Argentina and Greece.

Let's think about it.

Then maybe we include all of Central America.

No, another way we could do it, rather than the man, I'd call them on the phone.

I'd call them on the phone to get their vote.

If I got it, I'd just call them on the phone and say, I appreciated that, and I want you to know that that's a search argument.

See my point?

We'll just go on this.

And that's what I want you to play with the Japanese, that we're starting to do things for people that do things for us.

We just can't live in this world where these goddamn cannibals determine our future.

And they may say, you know, what time do you get the president of Brazil, and are you doing it?

They don't have to have a few days in the clinic.

It's over.

It gets red.

So what?

You have to pay it again at the same time.

You have to go out.

I just think we ought to try to show them a little special recognition.

We're looking for the time.

I hope that we can break this Latin America thing, or I'd openly quit dealing with them as a, as a cop that can deal with them on a bilateral basis, country by country.

Which we ought to do.

I know, I know.

You can't treat Brazil the same way you treat Bolivia.

No, sir.

Or Peru.

That's right.

You just can't do it.

There's no way.

No way.

I agree totally.

The problem here is that, can I say with all of this knowledge that I've raised with John, let's try to hear him.

It's an organizational problem, and that's what's supposed to be your bag.

How in the hell do we work this out administratively?

And basically, it doesn't fit.

As John said, the previous statement by John,

State Department is totally unqualified because they look at the world as it was.

The United States being, in other words, we're the great international responsible.

They're going to do this and that.

They're not going to be that way anymore.

We're dealing with a bunch of selfish bastards.

I'm speaking in terms of other European countries.

And sometimes others, the Japanese, are quite a solution to what we're doing with China.

And don't think that's even having a hell of an effect on what they did on Texans.

But nevertheless, the state doesn't look at it the same way.

Now, the Peterson Organization, for reasons that I've already mentioned, does not work in this case.

I don't think this can be done from the...

from the White House.

It's not his fault, but it just isn't going to stay.

And so it is true.

Now, what John and I talked about with the possibility

But the danger with this, John, if you have a meeting, the whole thing leaps out.

And they'll start talking in the New York Times, and they'll be in Whispers and Newsweek, and all that sort of thing.

But John was suggesting that we add to the group of four, Peterson and Rodney.

But you don't keep Rodney.

I just said that on the first edition.

But let Kissinger do what we want to do in this state.

Well.

that the real problem is the Peterson one.

How the hell are we going to handle that?

We can't have him out free wheeler jumping.

He can't be.

You know, I mean, again,

He should be doing this.

We told him to.

He's doing exactly what he's saying.

You know, as he's met with his group, the undersecretary's group, now he feels that it's his job to advise the president as to what to do.

And then I'll let Kissinger.

We'll let everybody go off.

But it won't work that way.

I don't understand.

I don't understand what you're saying.

I think he has a compulsion to hold meetings with the right people.

We can't do that.

What we need to do, this has got to be kept close to the vest.

But how do we handle him?

That's really what you come back to.

The thing is that... Now look, we didn't have a leak out of Camp David because I locked those people up.

You remember we said don't make any more calls.

You put a group of five in there discussing the kind of thing, and it's gonna get out.

Just don't know what it was about.

I think what we ought to do is to go on this program, and I think what you ought to do, John, is first,

Let it shore and try to broker the soil.

You know what I mean?

By brokering, he finds out what the furriest people think.

You find out what the furriest people think.

And just sort of keep it in the family here.

Now that's just the way I prefer to operate on this thing.

I'm just afraid of a bigger need on this thing.

I don't mind gassing around on it a little bit to let people think they're contributed or what I think.

You see, you get in a meeting, you know what's going to happen.

Arger, if you put Brady up to the quality of that, which he was suggesting, well, for God's sakes, then Arger will come up with his convertible and raise the price to go, and Europe's going to have a recession.

Arger has convinced the Europeans now they're going to have a recession.

And incidentally, the OECD, John Cousney, they failed.

They put out a report over there that they showed all these movements.

It was a card vote.

He thought it was too obvious.

It showed the Germans flat.

It showed us having a hell of a good year next year and every other country over there having a hell of a good year.

Far from the crushing.

I don't know who's putting Arger out.

Is that that goddamn Schweizer putting him through this depression recession kick?

Arger gets all these kicks out.

Do you think you heard that?

You did have a comment, and I tried to, but I had all the...

But you didn't get into this.

And I wanted to know what his alleged strategy is on the money supply, but that, I mean, I was very optimistic, as you know, right along, and I looked at the structure of the situation.

Great.

But he pulls the string on that one.

It's just not going to go anywhere.

Well, it ruined us in 1960.

And Harvard was the one that came in in February of 1960 and told me that Bob Anderson and Steve Saunier and McChesney Martin, where the Fed was too tight, and George Humphrey was tight,

years later, say, well, he agreed with us, and by God, they were, and we had a call of a dip in the last part of the 60s, and it had an effect on the election.

Now, we're not going to let this happen this year, John.

Arthur cannot keep that damn money supply.

I mean, he's burned out.

And I'd like to have that discussion with the Quadrant, and I want some.

We can talk all we want about this inflation thing, but I'll take an inflation any time over uninflated.

Damn it, that's just the way it's going to be.

No question about it.

I'll take the...

I'll take the effort to include Arthur in the candidate discussion.

So I'll take it up and I'll take it as it is.

really fully public support for the whole thing.

He has given it his blessing.

I haven't seen much of it, I realize.

Well, he's certified.

He's supported it privately.

All right.

So it's been quite worthwhile.

On the domestic front.

Yeah, sure.

On the domestic front.

And so I think we're going to make effort whenever we can.

to include him in and to put him in the position where he should be supported.

And I don't see any reason why the State Department, for that matter, or Arthur, shouldn't be absolutely delighted with this program.

It's a good program.

Can you hear us about the search arms?

We'll get rid of the search arms.

They don't like bilateral dealings?

Well, that's too bad.

Well, I agree.

And I think in the long run, I agree with John, we ought to get ourselves in a federal line where we deal with countries by line.

Absolutely.

That's the way to deal with it.

And build our own bloc.

Yes, sir.

Now, John, let me say this.

I agree with you on that, but let me tell you what will destroy this.

What will destroy this is if the strategy leaps out in advance.

Japanese have everybody be kicked off and arrested and they get huckered.

I think the thing to do, I think the thing to do is for us private to decide in this field that we'll gas around a little bit and we've got to keep, you know, let's say, well, we want to think a little bit more and this and that, you know, keep this thing in development and all that.

I believe the thing to do is for us to decide now, almost on an ad hoc basis,

John will go on this thing.

We'll work on the Canadian thing, work out a scheme to do the Latin American and Mexican thing at the same time.

And I think the country by country, getting Mexico a day in advance, and it'll be Argentina and Brazil.

Mine, let's do it.

Let's play a little of that with K2.

And that's the rest of the world.

That's the rest of the Latin American task force.

If South Africa or, you know, you've all been there, now you're in South Africa.

Anything else you could bring in?

I mean, if you could have this worked out in a way that when you get back, you've got several ways that we can move to remove the surcharge.

Let's do it.

Fair enough.

Yes, sir.

I should agree with you on the problem.

I saw that, but I'm not sure if I'd make it work.

I'm not sure if it would work.

I don't know.

I don't know what they're... Well, we'd have to look at that in terms of this whole attitude.

The first place in the balance of trade for Australia is very good.

We ought to deal with Australia anyway.

Let's break them away from the British a little more.

Same with the New Zealanders.

They've been good folks.

And it seems to me all those under their lives, Indonesia, Thailand, and the rest of the country.

I don't know.

I think the back-to-serve relationship with Tom did a good job in that setting in following through on things.

I think my impression is that he did a pretty good job on the technical business at the end of the end, and I thought that was quite a strength, but he followed through well on that.

He does

I don't think that this process is any good for these major policy decisions

You get people who aren't going to really be totally involved, finally, and they just sort of gas around and they can't operate too much because they don't have a sense of direction.

He can't give it to them and he can't provide intellectual leadership.

Because if Henry does, it's his field.

He doesn't know that much about it.

You see, it would be a...

I agree, but then let's get... What do we do with Peterson now on this subject?

He wrote the memorandum, so we just study it.

That's fine.

We want to wait until it gets back.

That's really not quite as embarrassing.

No, I think that if we can... No, he shouldn't be told.

That's right.

That...

I know that they talk to people.

I think you've got a chance to present the act as you see fit.

Well, just so it doesn't take so long.

...in our Troika meeting, or if you have some, John, tomorrow, I don't know on your schedule.

John is, I mean, I'm going to test him.

He's tied up like Carol, and he's going to meet us at 3 o'clock in the morning.

3 o'clock in the morning, and he's leaving Thursday night.

Well, I could ask Pete to meet with me and call the traffic, calls around us, and we've got a chance to talk to him.

I'll get Solomon.

Why don't you do this, John?

Why don't you have George and Pete now handle it somewhat like we did on the other day?

You were working with them.

Well, actually, what you were saying is you were making studies for us.

Studies.

And without thinking the franchise, in other words, he just started saying, you know, let's see what all this is and try to get something that's understandable and so forth.

So we don't have any different way about Arthur, how we handle him.

Well, let's have a quadriad meeting and...

I think that's all we need.

And let's go over the...

I mean, we want to have him come out of that, John.

I'm going to lean hard on him on that money supply thing.

Okay.

And then let him talk a little bit about this.

But I agree to nothing.

I think the other part of it, you ought to also ask Paul McCracken to give you the counsel.

You put it very well.

You can't have him turn around.

They're very pessimistic about it in the last year.

Why are they so pessimistic?

They're reading the current statistics and they're seeing the third quarter was not a strong quarter and therefore instead of having a strong second, a stronger third and so on, we have a strong second.

That's the third, and so they say, well, what's going to happen?

And their answer is to provide a bigger budget deficit.

I think that a lot of the answers add right up.

It's apparent, and it was our show yesterday on Monday, July.

That's the six-month lag that's been back in there for a period of the same thing.

It's a striking, quite a striking thing.

I think if the money supply moves forward now, that's going to be good.

It's going to be good.

We're going to have a lot of black numbers.

It's going to be very uncomfortable next month or so.

It's going to be very uncomfortable.

The whole thing is kind of coming on its own.

But it's kind of coming, the business of the deferred wage increases and the retroactive pay and the labor, what they're insisting on, which we're, we seem to deserve giving them, but that's the meaning of having the fight for it and the pay for it, which is what we thought it would be.

And I don't know if we're frankly going to live on that now, or if we can't live on that.

I don't think we're going to live on that.

But I think that we're going to run like we've got that.

But nevertheless, if the money supply can get going, I think we're in a good budget position on the discussions we had last week.

I hope all of that can go around whenever we have a meeting.

I think we're going to get that going once we have a meeting.

See, we're just going to have to prepare to take that review.

About 60 days of tough sledding here.

Yeah, because of the business community's concern about the spiraling wage.

Right.

This is all we knew, that there's going to be this period in a couple of months when these preferred wage increases are going to be gained.

Correct.

And when somehow or other we're going to have to get settled and stop driving for a long time,

I don't know how we're going to do that.

I don't know.

But I know it's going to be expensive.

And it's the best way to lead to a lot of recrimination.

These labor people will get blamed for not being tougher.

And frankly, I don't know what they can do without the union leaders.

What the hell are they doing?

I don't know what the hell they're going to do.

I don't know.

We have an injunction down there in New Orleans and in Philadelphia we managed to get.

And that's our task, certainly on the West Coast, is going to get people to work.

Because it's the longshoremen, the coal miners, they're just the best people to deal with, and they'll just tell everybody to go now.

Well, look, we've got to take the 60 days, but the main thing is, let's just understand right here, that one of the problems with the council, because they recently, they said there is a

uh there's a tendency always to panic and not have we're not going to panic john we're just not going to do it and on this thing take some of this heat but this economy at the present time with everything we're putting into it as we do so we're going to go up next year i don't know what the hell there's just something something that we don't have any control of what do you think

What do you think, George?

You get a hell of a lot.

You talk about the council being bearish, and yet, John, you have your major economic analysts of Time, Newsweek, Fortune, et cetera, et cetera.

They're very bullish about the council.

Correct or am I wrong?

No, you're right.

You're right.

They think, however, that I believe they are thinking

The Fed is going to be fairly forthcoming on the budget supply.

Well, it's the Council that's on the ground, but the Fed will reason that you're just going to carry some machinery so we don't have to be so... Well, let me ask you this.

Yeah, on the Council, but also it has to do with the history.

On the...regarding the...regarding the Council, you mean that the best they can come up with is a bigger budget deficit?

Well, part of the Christ-sex memorandum of Paul McCracken that I'm coming out to give you, the great thing about it is that it doesn't bring out what's happened to the money supply anywhere in the memorandum.

No, I know that.

It doesn't mention it.

I know that.

I know Herb Stein is quite concerned about the money supply.

All right.

Are we all set?

Let's give them hell in the money supply, right?

Yes, sir.

Second, we'll listen to them and talk about raising the price of gold and that sort of thing.

But third, let us decide now.

Should we go on this battle plan, right?

Yes, sir.

You do what you can at Japan.

We'll break them off and get the Canadian thing and so forth.

You, George, or anybody you want, plan it.

How do we... You see what I mean?

You're going to be gone.

Yes, sir.

And so...

As it stands at the moment, we've got Volcker and Pei who have been negotiating with these Canadians.

I guess that's where we ought to be, except for this one thing.

I'm not sure they're working on the oil thing, but I guess it's a good time to do that.

Why don't we do this?

Why don't we let George mine the store?

And if you could have Volcker and Petty, and to the extent you want that, planting a company oil plant.

and let George sort of watch it, because he knows the main battle plan.

I would not go over and tell you the whole thing, just how we want to know what kind of deal we make with the Canadians.

But then in the meantime, let's see what we can do with the Latin Americans, get a battle plan on that, and all the rest of it.

When you come back, we can hit them all.

We can hit Japan, and then go.

Does that make a little sense for you?

Yes, sir.

I think Japan may...

We may be overly optimistic about what we do in Spain, but I don't think so.

I don't think so either.

They've shaped every indication that they're going to want to stay.

Part of the problem that I have with all of these countries is the presentation.

Sato may want to come to Egypt.

He may want to go to Africa.

I have the impression that they have

The Japanese program, you know, had all the simple things being done by Sato.

And then Sato left, and the lady wanted to go to the guy who gets the better forgetting thing, and he opened him up.

All right.

Well, I think that's the last word you can call me, and I don't...

Well, I think, as a matter of fact, though, you're quite free.

I'd like for you to spend, before you go, I would like you and Henry and me to get a little on the political side.

Fair enough.

Yes, sir.

I'll have him write you a little memorandum.

I mean, he's had a point or two about it.

And then put on the Japanese thing, with George as the president, and we kind of set it up.

Kishi, of course, was sort of Graham's, and the whole good things.

And I deliberately set it up much so that people sitting behind me knew what the hell we were doing.

so that they are expecting you to come there and negotiate something.

Right, George?

They're expecting John to be there in the command of our position.

That's right.

I say he will know.

He knows my thinking totally.

He'll be willing to talk.

He'll be willing to talk to me, and I put it all.

And I will write a letter to them.

I don't know.

Because if we subtract them in some way, either just in a way that I'm sure in some way, I think it could mean quite a lot to us.

No question about that.

I don't have a... Jerry Berry from the Germans.

Now, he thinks the Germans trade, as he says, three times as much, twice as much with France as they do with us.

So what the hell?

Well, that's why, really, you can't put the Germans further than they've gone.

You've got that.

The thing is, they've gone quite far already.

so maybe they haven't got much further to go you can recognize that fact just deal with the reality i'd love to do it i'd love to just well it's not and there's not much else you can ask ask germany except greater uh

or greater on the defense side.

That's one thing.

That makes you guess this.

The political bit comes in here.

I think you have to do that.

We've been associated with this offset.

Henry is totally aware of that and knows about the offset.

We have a long-term good ambassador there, too.

It would be helpful to me if you could include me in the

Is this all right with you as a modus operandi?

And then, as I say, though, play it very close to this.

I don't want you to tell Peterson about this shit.

Just tell him what he needs to know, and you do the same job with whoever you talk to.

Have them work like you did on the other thing, in compartments.

And by the time we go down there, we will change this world.

Have a little fun in the process.

Are you done?

Yes, sir.

All right.

Get off to your end.

Thank you very much.