On June 13, 1973, President Richard M. Nixon met in the President's office in the Old Executive Office Building at an unknown time between 7:17 pm and 8:27 pm. The Old Executive Office Building taping system captured this recording, which is known as Conversation 445-034 of the White House Tapes.
Transcript (AI-Generated)This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.
Good evening.
I want to tell you tonight about some strong actions I have ordered today with regard to the American economy.
Actions which will be important to you in terms of the wages you earn and the prices you pay.
And first, since we have been hearing so much in the past few months about what is wrong with our economy, let us look at some of the things that are right about that economy.
We can be proud that the American economy is by far the greatest, the strongest, and the most productive in the world.
It gives us the highest standard of living and work.
We are in the middle of one of the biggest, strongest brooms in the world.
More Americans have jobs today than ever before.
The average worker is earning more than ever before.
Your income buys more than ever before.
In August 1971, I announced an economic policy.
Since then, the nation's output has increased by an honorable 11.5 percent, a more rapid growth than any comparable period in 21 years.
Four and a half million new civilian jobs have been created, more than any comparable period in our whole history.
At the same time, we owe per capita disposable income.
That means what you have left to spend, after taxes and after inflation, has risen by seven and a half percent.
This means that in terms of what your money will actually buy, in the past year and a half, your annual income has increased by the equivalent of four weeks' pay.
When we consider these facts, therefore,
We see that in terms of jobs, of income, of growth, we are enjoying one of the best periods in our history.
We have every reason to be optimistic about the future, but there is one great problem that rightly concerns everyone.
This is rising prices, and especially rising food prices.
By the end of last year, we had brought the rate of inflation down to 3.4%.
That's the best record against inflation in 1972 at any major industrial nation.
But now prices are going up at an unacceptably high rate.
The greatest part of this increase is due to an increase in food prices.
This has been caused in large measure by increased demand from home and abroad, by crop traders abroad, and by some of the worst weather for crops and livestock we've ever had in America.
Whatever the reasons, every American family is confronted with a real and pressing problem of rising prices.
I have decided that the time has come to take strong and effective action to deal with this problem.
Immediately, in fact, before, I am ordering a freeze on prices.
This freeze will hold prices of levels no higher than those charged during the first eight days of June.
It will cover all prices paid by consumers.
The only prices not covered will be those of unprocessed agricultural products at the farm levels and rents.
Wages, interest, and dividends will remain under their present control systems during the freeze.
The reason I decided not to freeze wages is that the wage settlement freeze under the rules of Phase 3 has been a significant cause of the increase in prices.
As long as wage settlements continue to be responsible
non-inflationary, a wage freeze will not be imposed.
The freeze will last for a maximum of 60 days.
This time we'll use the development to put in place a new and more effective system of controls which will evolve the freeze.
This new Phase 4 set of programs, controls, will be designed to contain the forces that have sent prices so rapidly upward that it will involve higher savings, more mandatory compliance procedures,
they will recognize the need for wages and prices to be treated consistently with one another.
In addition to food prices, I have received reports from various parts of the country lately of many instances of sharp increases in the price of gasoline.
Therefore, I have specifically directed the Constitutional Council to develop new Phase 4 measures that will stabilize both food prices at the retail store and the price of gasoline at your local service station.
or one point on my own, besides everyone listening to me tonight.
Phase four that follows this brief will not be designed to get us permanently into a controlled economy.
On the contrary, it will be designed as a better way to get us out of a controlled economy, to return as quickly as possible to the free market system.
We're not going to put this great American economy into a straitjacket.
We're not going to control the boom in a way that will rain on the buses.
We're not going to follow the advice of those who propose actions that lead to a permanent system of price and wage troubles.
Such actions would bring good headlines tomorrow, and very bad headaches six months from now, for every American family, in terms of rationing black markets, and eventually a resale, which would lead to more unemployment.
It is your prosperity to speak.
It is your job.
The actions I have directed today are designed to deal with the rise in the cost of living without jeopardizing your prosperity or your job.
Because the key to cutting Kirby food prices lies in increasing supplies, I am not reading the price of unprocessed agricultural products into my mind.
This would reduce supply instead of increasing.
It would eventually result in even higher prices for the food you buy in the supermarket.
Beginning in 1972,
We embark on a comprehensive new program for increasing food prices.
For many other majors, this is including voting up 40 million more acres for production.
In the past and months ahead, as these new crops are harvested, they will help hold prices down.
But unfortunately, this is not helping in terms of the prices you pay at the supermarket today.
One of the major reasons for the rise in food prices at home
is that there is now an unprecedented demand abroad for the products of America's farm.
Over the long run, increased food exports will be a vital factor in raising farming and improving our balance of pay and supporting America's living in the world.
In the short-term order, when we have shortages and sharply rising prices of food at home, I have made this basic decision.
Allocating the products of America's farm between markets abroad and those at home, we must put the American consumer first.
Therefore, I decided that a new system for export controls our food products is needed.
A system designed to hold the price of animal feedstuffs and other grains in the American market to levels that make it possible to produce meat, eggs, milk, and prices you can afford.
I will ask the Congress on an urgent basis
to give me the need, the new, more flexible authority needed to oppose racism.
In exercise of such authority, this will be my policy.
We will keep the expert commitments with me as an agent.
We shall also consult with other countries to see if their cooperation is resolving the problem.
We're on the problem right now.
But we will not let foreign sales run.
but we will not let foreign sales price-beaten A's off the American table.
I have also taken another action today to stop the rise in the cost of goods.
I have ordered Tank Journal Revenue Service to begin immediately a thorough go-ahead of the books recovered, which has raised their prices more than 1.5% above their January receipts.
The purpose of the audit will be to find out whether these increases were justified by rising costs.
If they were not, the prices will be rolled back.
The battle against inflation is everybody's business.
I have told you about the administration.
There's also a vital role for Congress.
The most important single thing the Congress should do in holding down the cost of living is to hold down the cost of guns.
For my part, I should continue to lead those spending bills that we cannot afford, no matter how low-sounding their names may be.
If these budget busters become law,
The money would come out of your pocket, either in higher prices, higher wages, or possibly both.
There are several specific recommendations I've already made to the Congress that will be important in holding down prices in the future.
I again urge quick action on all of these proposals.
Congress should give the President the authority to reduce tariffs in selected cases in order to increase supplies of scarce goods and hold down their prices.
This action will help on such scarce items as wheat, pie, and corn.
In particular, the tariff on imported meat should be...
In particular, the tariff on imported meat should be removed.
Congress should provide authority to dispose of more surplus commodities held in government stockpiles.
Congress should let us go ahead and quit the Alaska pipeline so that we can combat the shortage of oil and gas.
I shall also soon send to the Congress a major new set of proposals on energy, building on new actions I believe are necessary to help us meet our energy needs and thereby lessen the preying on fuel prices.
In its consideration of new farm legislation, it is vital that the Congress put high production ahead of high prices.
so that farm prosperity will not be at the cost of higher prices for goods.
If the Congress sends me a farm bill or any other bill that I consider inflationary, I will leave no left out.
Beyond what the administration will do and what the Congress will do, there's also a great deal to learn.
The next 60 days can decide the question.
The question of whether we shall have a continuing inflation that leads to a recession.
on whether we deal responsibly with our present problems and so go forward with a vaporous prosperity and a swift return to a free market.
You can help by giving your senators and congressmen your support when they make it difficult for cities to hold back them on unnecessary government spending.
You can help by saying no to those who would impose a permanent system of control on this great productive economy of ours, the wonder of the world.
Let there be no mistake
Our economy is to remain dynamic.
We must never step at the temptation that they imagine, that in the long run, controls could be a substitute for a free economy, or permit us to escape the need for discipline, fiscal, and monetary policy.
We must not let controls become an archive.
We must not become a digital economy.
There are all sorts of cities and buildings that would give the appearance or offer the promise of controlling inflation.
but that would carry a dangerous risk of running on a recession, and it would not be effective in holding down prices.
Rigid, permanent controls always look better on current papers than they do in practice.
We must never go down that road, which would lead to economic collapse.
We have much to be thankful for here in Iowa.
We are the best clothed, best fed, best housed people in the world for ten feet of elevation.
This year, for the first time in 12 years, we are pleased with Vietnam, and all of our courageous prisoners of war have returned to their homes.
This year, for the first time in a generation, no young Americans are being drafted for the honor service.
This year, we find our products brighter than any time, modern human, for a lasting peace.
For they abide with prosperity and such peace are made possible.
Next Monday, I will meet at the summit here in Washington with General Secretary Graham of the Soviet Union.
Based on the months of our territory work that have been done to this meeting, and based on the extensive concentration of correspondence we've had, I can confidently predict tonight that out of our meetings will come major new progress toward reducing both the burden of arms and the nature of war, and toward a better and more rewarding relationship between the world and two most powerful nations.
Today in America, we have a magnificent opportunity.
We hold the future, our future, in our own hands.
By standing together, by working together, by joining in bold and sensible policies, we can meet our temporary problems without sacrificing our last few strands.
We can achieve what America has not had since recognizing the horrors of this office.
Bold prosperity, without war, and without oppression.
This is a great goal.
Working together, we can achieve that goal.
Thank you.