Conversation 462-013

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What?

How are you doing?

Arthur, how are you?

How are you?

Can I see you?

Come on in, sit down.

Well, I guess it's just the four of us today, huh?

Sit down, here.

Arthur, sit over here.

What did you see in the well last night?

What's that?

Did you see in the well last night?

Because sometimes it works, it's all going over their heads, so it's symbolic, but it was rather, it was an actual, you know, one of those cameras that said, these guys may not be going to shoot.

I think you got the quote across last night.

I mean, you put it right at the camera.

Yeah.

Well, I thought that this is one of our periodic meetings.

It's a pretty good time.

Paul, what we deliver, and that's what I'd like to ask all of you, we literally unstructure these meetings, which I think is...

I always say you have an agenda, and all of a sudden you always get into a lot of stuff that, I mean, some of us may think is irrelevant at the time.

I'd rather just have the four of us sit and talk.

Is that, do we agree?

Art, you've sat through these more than the rest of us.

Do you think that's the right thing to do, unstructured, or do you prefer to have a structured meeting instead?

I prefer to have a structured meeting than unstructured, otherwise...

But you know what I mean.

Everybody's setting anything up.

Everybody's reading papers and all of a sudden somebody reads the reading paper and then it's time to go to dinner.

So when I think of that, everybody knows the various things we want.

I always get what's coming up international problems in terms of the report on that .

and then hold a discussion.

And again, the other thing I should say, my reason I'm talking despite the job is due to these meetings and I'm relevant to them as a matter of fact.

And they vary with each other.

But I often believe ones where we can talk very frankly, which we didn't last time, and we just pop off and somebody doing wrong says so, and it's forgotten.

I mean, that's one of the good things about it.

I think it's, if we don't have Frank talking, it's going to be good for, it's certainly going to be good for me, and I think it's good for the rest of us.

So, we'd like to do that.

Anybody have any other views?

What do you think?

What about you?

I think you suggested that, as a matter of fact, that you should have a class meeting with Frank.

Well, let me go around the table with a couple of questions that I have on right there first.

It seems far away, but Rolls-Royce, according to my new summary, there's a chance maybe the link works or not.

I don't think so.

Where does it go?

It's not worse.

It's just not good enough.

I'll give you whatever you want.

That's just hell's free.

The Old Royal started out with, obviously, in fact, Rene on their agreement with Lockheed.

The British government got into it then and said, here's what we ain't going to cost you to deliver these engines.

The net of it was,

It would cost an additional amount of about $1.8 million, $1,800,000 additional per plane.

Well, that obviously was unacceptable.

I have not been in on this.

I'm sitting on the sidelines, and I just gathered information.

I've made no representations in behalf of you or this governor or anything else.

On the contrary, I've said to the British ambassador on three different occasions that when he comes to see me, we have no position.

We're not negotiating.

the Rolls Royce or the British.

That's down top.

The latest offer, which the British are going to publish this afternoon at any time, is going to be substantial to this.

They think that they're willing to put up an additional 60 million pounds for launching costs.

They want Lockheed to assume any cost above it.

This is research and development.

They think that they're talking about a total of between 90 and 100 million.

But they want an open-ended commitment on Lockheed's part that if it runs above that 60 figure, that Lockheed will prepare that.

Number two, with respect to production costs,

They're proposing that they first said that they had to have an additional 190,000 pounds per engine, which is roughly a million four for a plane set.

Well, they said, we're gonna compromise now.

We're gonna deal with you.

So they cut that to 140,000 pounds per engine.

But they're still talking about an increased price of a million dollars per plane.

In addition, they first said we have to have 150 pounds for contingencies.

Well, they said, well, we'll knock out contingencies.

They said, now, Lockheed has to forgive the transgressions on the weight of this engine, and the airlines have to do the same, that Lockheed has to forego all its penalties, that they have to accept at least a six-month delay and perhaps a nine-month delay.

with no penalty for six months and a very slight, if any, penalty for the following three months, up to nine months.

In addition, the Lockheed of the United States banks, or the United States government, has to warrant this cross-warrant.

The British will warrant that they will produce the engines, and we will warrant that Lockheed will stay in business, be a viable company, will not go to bankruptcy, will not take the receivership, and will produce the 1011s throughout the life of the engine contract.

And that's destiny and that's the way it is.

I think Dan Holt came back last night.

I've not talked to him since he got back.

I've talked to him twice for one.

And to talk to the airlines and banks today, I do not think this is an acceptable solution.

I don't think the airlines will buy it.

I don't think he can afford to do it.

He can't put up any more money.

He doesn't have it to put up.

He has no way to get it.

I don't think the banks are going very far with him.

I have not been an aggressor in this.

I'm sure I do have some tears in my eyes, but I'm listening primarily.

Well, you're not a single one of them.

I expressed your concern in the deepest of terms, but I have not made any kind of commitment.

I've been very careful with the American interests, the banks, the airlines, and Lockheed, as well as with Lord Palmer.

Each case, each time, we have a lot of issues.

We have a movement.

We're concerned and we want to follow it.

And that's where it's at.

And from the conversation I had with Charles Titting, I think he's about to back out.

Now, in one example, I had two hours with McDonald's to stay at lunch.

McDonald's.

He knows all about this deal.

We went into the background of the DC-10 versus the 10-11, and the pricing, and how McDonald bought these contracts with ECU, TWA, and so on.

The net of the conversation is simply this.

He sold to United First his DC-10 for $15.5 million a copy.

Lockheed can get into the business in a week's time to TWA Eastern and Delta and so we'll produce the 1011 at 14 million and a quarter if you cut the prices a million and a quarter per plane that got these contracts.

The truth of the matter is there is not enough business now or on the horizon to sustain the production of the 1011 and the DCT.

The dam is barely enough to sustain water.

But the important part of it is that McDonald's indicated

that he would consider taking over Lockheed.

But he said, I've got to be sure this is in accordance with the government decision.

I've got to be sure Dan Hall wants to do this and so forth and so on.

There's one thing we've got to understand here, and Arthur, we've discussed this when I went there once.

I don't know if you're federal or federal, but I'm sure there's some counsel around.

I think that on this kind of thing, we must

what's right here on Mitchell and McGuire, and by God, it was gonna save the company.

We saved the company.

And you know, John, I feel about that.

I'm like, you know what, George, you agree with this now, but I just think we've got to do it.

This would be great.

If he doesn't let out, I don't know what we can do, George.

I don't know what we can do.

Hello, Justice.

You know what we just did?

We have a case on that to take over.

We've been in all kinds of trouble.

Well, look, can I ask, can I have a follow-up in this respect?

My boy, who's keeping screw with us again?

We, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we, we,

Oh, it would take a lot, sure.

Like the radios and that kind of stuff.

Yeah.

He merged the two companies, but now he's about to try to start a disaster on them.

You know, now that he dropped the project on them, that doesn't necessarily save these square companies.

No, but in the process of merging, you obviously have to make some kind of deal with respect to the obligations of lock-in.

So now you can liquidate two companies.

Yes, yes.

I've heard the information for probably 50 cents on the dollar.

Well, it may be that the merger then would allow them to go to the subs.

And, you know, these subs, they work around this thing.

And also the airplane business is going to get bad.

I just don't believe it's going to be bad this year.

By God, if I were taking a long-term bet, I'd buy it.

That'd be pretty good.

I would buy it now and hold for five years.

What do you think?

I agree with you.

It looks terrible.

We're going to have to do something about it.

Well, that's the other thing.

I'm talking about wealth.

We haven't done anything yet, but we saw it in Seacore Brown.

We saw it in McLaurin.

We saw a great deal of it.

No, no.

He is not objecting to this treatment.

No.

Are you going to study the therapy?

I am.

I've got a plan.

No, Peter, this is a hell of a problem.

And he's in a lot of problems, too.

But I think the airline thing, as we said once before, is he's one guy.

He's not worried about anything but airlines.

And these airlines have gotten saved, and we've got to find out.

Now, for example, when we talk about a deal, say this big American deal,

or whatever the kind of deals they're talking about.

I can't have that coming here.

And so I can do with it, you know, where it falls apart.

And my main decision, the way I made that Brandon decision,

You know, in the early part of the administration, remember, I overruled the Johnson administration.

I did it on the basis of some, I mean, it was really a half-assed, you know, proposition.

But Paul, you were here.

You didn't know enough about it, but I said, well, I'm this guy and that guy and this guy and that guy, so I grew on it.

I think you need it.

I just think you need an airline expert.

I really do.

Now can we, what do you think of it?

Do you think that's, or is this bad?

Now I understand.

The department of transportation, you can't do that.

They don't have a man there.

They may have a man, but pull him out.

He's going, I'll take him as president.

I'm just kidding.

I haven't really thought about these figures, but I'll take the fellow.

I like to look at Clay, that's the kind of man, he may be too old for it, may not want to do it, he may have a lot of investments in it, I don't know what his situation is, but you really need, I think, somebody outside of the government.

You know, I'll follow that money builder, he would have great capability in this field, he'd do it.

I don't think Dewey's in airlines.

There's a very shrewd politician who understands the business man.

That's what you need.

That needs somebody like that, doesn't it?

Because there's so many things that have to be done.

You remember the first job, the first time you were talking, right after you were, just before you were

Before you came in, you said, I'm worried about the aircraft service.

And I was worried, yes, sir, damn right I am.

Mr. President, the banks have a billion, $800 million financing these airlines.

The insurance companies have over $3 billion.

And between those two, there's about $5 billion that's centralized.

It's about the same sum.

Now, just the insurance companies and the banks, by the way, they had loans.

Yes, sir.

And they're nervous.

So they're nervous about it, and they're uneasy about it.

And this is one of the reasons why this Lockheed deal's not going to sell.

Because I don't think the banks are going to run it right.

They're not going to give the guarantees.

But back on the airlines, they're all losing money.

I mean, my God, they could understand it when you viewed it, but the industry's changing when you see United and America, and when you get Eastern and the TFA, and when these big, these big fours pan in the big five, when they all start losing many millions of dollars, it's changing this country, and it's changing Wall Street.

Now, Tom Hicks, I mean, hell, he talks about it nearly every day when I talk to him here, but I know he does.

He's very concerned.

What I can suggest is this, that I would like to have set up a meeting on airlines on this thing.

We ought to really get at the thing.

Now, landing on this shop, the person in charge is working on it.

But it has to be more.

I just don't want to have that bunch of people that are getting in from the outside.

And then maybe we do need an outside guy to work with and give me an outside man.

Yes, sir, I really do.

Why doesn't that be outside?

Why not?

There's a brilliant young guy, incidentally, that's called McGruder, who's having the SSG as a real pistol.

You need somebody that banks respect, that airlines respect, that the insurance companies respect.

Frankly, you need somebody that won't invoke jurisdictional facts within the government.

You know, between CAB... How about a former chief executive officer, like a member of CROSS, or a Bob Tyson, sort of an athlete?

Sure.

It's not all that mysterious.

You see, Clay, I think he's too old.

I don't think he's too old, but he's too old.

He'd be perfectly fine ten years ago, but he's too old today.

I saw him recently, I think.

Dewey is still footballs, football games.

I don't know if that's a good thing, but I've got to do some other things.

He's a dead, very able, very smart, tall man.

Oh, I thought that a terrific job of him must be done.

What about Fred Miller?

The second point is I think that we have got to

to get the word over to or whatever is needed.

There is to be absolutely no roadblocks put in the way of now blocking anything that they want to go through.

Well, you've got this word, too.

But let's not, let me suggest whatever it is.

I don't think that's a problem yet.

We're going to have to take this one fairly easy.

All right.

Let me tell you this, in your private conversation, Tom, don't worry.

Don't be strange.

I understand, but I hope, I don't know how we assure them they don't worry.

That's the only problem I have.

I'll tell them I understand what you're saying.

Yeah, I want to say, I want him to pursue it.

He can pursue it.

I was saying, he can't say he doesn't know what we're going to do.

We know damn well we want to save Lockheed.

We've got to save Lockheed.

That's the point.

He doesn't get to worry.

That's my point.

We're going to get back to that often.

We're selling him out.

Hold on.

I hear you.

I see you.

So this is a very, very special contract that I negotiated.

I've got to be careful about the Justice Department.

That's exactly right.

John wouldn't be there.

You're so right.

Next subject.

All right, follow up on that.

What's the latest thing you'd like to report today?

Well, I understand it's got a little better council than it was before.

It never means anything, but it goes down.

It always means a hell of a lot when it goes up.

That's all right.

Well, it's 5.8, I understand.

5.8, yes.

It brings the total out of the climate picture more sort of into line with what seems to be happening on the shore out of the climate.

Although there is a signal adjustment question that I've been raised the last time.

Yeah.

But if we're getting a average temperature in the climate, our last meeting had already started down.

The work hours, the work week, when the array went down, this is what concerns me about the employment picture.

The unemployment rate, of course, went down.

It was handled as it has been when it was going up.

That may tend to get to play.

But we do have to bear in mind that the length of the work week went down, and the employment

in the aggregate and for most industrial lines, also the climate.

And the reason the on-farm went down is because of the less people who live aboard exactly.

Was there a holiday during the reporting week?

Yeah, no.

No, they share the, you see it's the week that contains

That would have been, the 15th was the holiday, which was the next Monday.

But the years were unbelievable.

You see, we had a decline in the length of the work week at four tenths of 1%.

That is an enormous decline for last year.

It's out of line with all the experience.

We haven't had any such deterioration in the economy.

I agree.

But it's like a holiday, too.

There's some statistical work, but I haven't yet had time to track it down.

But the problem is that when you look at payroll, the number of people on payroll,

That also went down and it's down for most of the investor lines.

However, the workforce changes.

Changes for what reasons?

And all that's based on a survey, which has some people are in the household or in the company or not in work, they're looking for work to do together.

Well, any event, any event, it is a, let's, we may think about it.

The only important thing is to make people think.

to make the best out of whatever figure you get because the worst is made out of the bad figures you get.

And is anybody any good to look good?

Because he said, well, this didn't mean anything.

And he may look good, but the effect of that is to make things worse for me.

Otherwise, it would be we all look bad.

So the whole proposition here is to

and say, well, this is what we're doing.

We don't think that it decides everything, but it's what we're doing.

I don't agree with that.

Well, let me say that this is going to be the way it's going to be for the expression of your opinion, but that's the way it's going to be.

I think these statements that have been made to the area statements about confidence and the rest only create less confidence.

And unless we start talking, I remember the 30s, and I recall at that time when we had 15 million unemployed, Roosevelt used to go on a radio address and he'd talk about confidence.

Confidence, confidence.

He didn't talk about lack of confidence.

Now, it makes me say, well, maybe each one of you look awful good to go out and say things are in a hell of a shape and we're not very confident.

And you look good in the history books.

And this administration will go down, too.

That's not what I'm talking about.

That's what I'm talking about.

Yeah, but I was thinking, we played a different role, Mr. President.

When Paul McCracken, for example, I thought you were addressing remarks to him.

Paul McCracken has to interpret these figures as a fundamental story of its credibility in the next moment.

No, makes no difference.

The idea that McCracken should always be honest, and Chelsea, and you, and all the rest, my point is that when you're looking at this, you've got to realize that in terms of the confidence factor,

that the very expressions of lack of confidence by top administration people create lack of confidence.

That's all that matters.

That's just my question about it.

And I go back again to the point that

It doesn't mean that Roosevelt's speech is only making people feel better.

They would be helping the economy a little.

But they did make them feel better.

But at least they didn't go get a hell of a lot worse.

Now, the point that I'm making now is that let's not make people feel worse simply because we've got to get out there and prove that we're credible.

I don't want anybody to lie.

I want people to lay the figures out.

But I think that you've got to get the key.

When the facts bear out, how do they come?

Let me tell you that when I get up and talk before a policy, I never lie.

I never have.

Virtually everybody here in this room with the accepting account thought my decision in Cambodia was wrong.

It was right.

I knew it was right at that time, or felt it was right.

And the reason I felt it was right was that I had looked at all the facts, and if we hadn't gone into Cambodia, that we would have had a massive assault on about 200,000 in the Third and Fourth War in Vietnam.

The purpose of it, as I indicated last night, was to cut American cash.

The purpose was also to guarantee our patrol service, start our patrol program.

So I thought 90% of the press and most of the Congress in the process would work.

Laos, it's terribly difficult to say.

Nobody really understands that this is what in the world is.

I mean, expand something to Laos, and that means they're gonna, that's gonna help you out.

If not, the answer is, of course, it's like saying that,

It has become common with great perspectives that this would be like, say, when Eisenhower landed in D-Day in Europe, that expanded the war into Europe, expanded the war into Europe, and shortened the war.

That's what this is all about, enemy-occupied territory.

Now, let me say on that score, I don't indicate that there isn't going to be hard fighting.

I don't indicate that there isn't, that we are absolutely sure how it's going to come out.

But I have to indicate, because it has an effect on the battle.

I have to indicate that we have confidence in those that are there, that it is, that they are doing well, which they are.

that they have fought well, which they are, and that they've already accomplished a great deal, which they have.

And I must indicate those things for two reasons.

One, because the great majority of the press, the great majority of the press, and I'll translate all this to the economy, do not want us to succeed there, and they don't want the economy to succeed.

And they're going to react to that.

So what we have to do is to balance the other way.

If you don't,

That's politics.

But it also, psychology, it's going to affect how this board is going to come out, and it's going to come out all right.

But I can only say that because I study it more than the rest.

I don't study your field, but I do know this, that as far as this confidence factor is concerned, we can talk all we want and say the way you can have confidence is have wage and price controls, whether that's right or not.

Maybe.

But the point that I make is that when you have from the top of the immigration people a constant series of statements, and they come from all departments,

And I understand them all.

I mean, some of them, again, what you get indicating uncertainty, etc., etc.

We're not sure these figures are right, etc.

The effect is, one, sure, you say credibility with the press.

First, let us remember, the press, the channel, the great majority, couldn't give one stinking damn about whether we were credible or not.

They just wanted to lose.

That's it.

Well, Bart Rove, let's get out of here.

I know these folks.

I got it.

And if you translate it, the foreign policy is exactly the same as the other one.

So they're going to pick up every little smidgen they can find of lack of confidence in the rest of you.

Now, so what we have to do, what we have to do is to be honest.

but to, in our demeanor, in our attitude, to express confidence in the fact that we're on the right course and that this economy is basically healthy and that it's going to come up.

Now, that will help it come up.

That in itself would not have come out if we were doing the wrong things.

And there are some wrong things in there.

I don't know if the way you guys verify that.

But I'd simply say that on the psychological factor, I go back to the fundamental point that unless within the administration you get better discipline on this matter of some degree of confidence, and this doesn't include who you are, of course, because you're independent and you say what you want.

Unless we get better discipline in the administration at this point,

I don't think the administration will criticize the fed

Give us hail privately.

Anyone.

Yeah, anyone within the White House.

Not publicly, because it stirs up articles in the press.

And then when you have articles appearing, such as have appeared recently, suggesting controversies, bitterness, which don't exist, rather.

They're differences.

They're alleged differences.

Well, that in itself, I think, weakens confidence.

People like to see a sense of unity.

Now, let the Fed be criticized up and down.

And obviously, we're human, we do our level best.

We always treat great what we're doing.

And any new criticism, we take most seriously, you know that.

But I told you about a year ago that we're going to have trouble.

And you advised that we carry out our discussions privately and not publicly.

Well, now, that rule has not been adhered to as well as it should be.

And what one is to blame?

I'm not going to say that I'm lazy, but the...

I think that's awfully important here tonight.

I agree.

Unity.

Unity is very difficult.

You can't, it's difficult, but you can't have a one-way street, or you can't have a friend criticizing the administration for the administration of many times.

But that is not personal.

I want to make, I want to clear this up.

I expect the independence of the Fed, and of course we all wish to respect particularly your enormous capacity in this field.

But I think as well, that's why I like this, I said these meetings will be unpretentious for the safety of the field, because, Arthur, you and I all know, we went through the eyes and our ears in May.

If we did have to talk about this, I think it would have been better back in, particularly in January 1961, if we just kicked that tax thing a little bit, or a manner of stuff, then we would have had a plan in October.

That's irrelevant.

And the vet was responsible.

That was the period that he made the call.

And everybody said that, well, nobody ever said anything about the vet.

Nobody said anything about the vet.

Everybody just put it on ice and the vet put us down to the tube.

Well, that's fair.

That's it.

You remember you said you'd only let the feds do the tight things.

And the fancy charge hungry was like the government at that time, who had been so wrong about so many things so often.

And later that year, the feds got a little early on, and you know it should have been.

Of course it's your fault.

You had a secretary on the treasury at the time.

Ashton.

Ashton was blind.

He told me there was no recession and there will be no recession.

Both Anderson and Saunders were blind.

Both were.

You and I and Jim Manning.

Not in this room, but in my little office.

And in the Occidental?

In the Occidental.

That's right.

We went over this whole thing in January, but I'm just saying so that we can see what the thing is.

So what we've got to do is to have some way that we all thank our stars every time we've got you in defense, because we know that you're going to give us some leadership, and that you're not going to sit there blindly simply trying to save the dollar and let the country go to hell.

Which is supposed to be a policy that has been too often in the past.

I mean, not to say that I couldn't, I could, but I can't disagree with it.

It hasn't been that bad, but I mean, the market has a lot of character, but sometimes character can be used for the wrong purposes.

I don't want to belittle this, but I want to get a fairly personal point.

Sure.

Comparatively.

I, as a representative of the fed, have made the two pronouncements of Dean Cowell's policy clear and good.

I hope you just recall that, too.

Yes, sir.

I understand that.

That didn't bother me.

Well, nothing else can be described as criticism.

No, no, no.

I think what the problem is, and what we really face, Arthur, is something that you, as the most, except for John, the most political man of the three,

For the fourth, you know politics, and you know every little smidgen we give these guys a hand and they kill us with, you know, that's the one.

You know it as well as I do.

Everybody watches you like a hawk, and so do I.

And I say, I say, look, if we're going to die on the sword, fine.

By God, let's not give it to the enemy.

I mean, that would be our own story, not theirs.

That's the handover law.

That's really what it gets down to.

But have no illusions about the press.

Now I know these guys.

Gee, I sometimes might catch people and say, gee whiz, they've had a long, great night.

The press was very pleased with me today, and I said, I don't tell them that, but boy, you really spelled that out in that voice.

The only time that I have a successful press conference is when they're climbing the wall, and they're climbing the walls today.

They know.

Because you talk to the country.

Successful press conference is one of them.

They call for you, and they make you say things you shouldn't say.

Simple as that.

You don't have a job.

You have no illusion.

All right.

Now, the thing is that the reason I'm on this, we all have such mutual respect for each other.

And I said, I was on a speech at Art Review with George, and there's always been some ugly transfers and the rest.

My God, Art, the leader of this group,

And for many years, we go back almost 20 years to the treaty.

And we've got to have this sort of delicate business where we come to your presence.

And now I see Arthur along.

Can you do that?

just as I'll see you in a moment.

But he understands that.

But the other part is that I think we have to understand that what I like to play, to work the game, like last night, they asked me about, you know, so I didn't sit back on the rockers.

And I said, well, it's a deep shot.

Well, that's me.

Rogers advises me, sure.

Rogers gives different advice than Ross and I get from Kissinger and I get from Laird.

We all have them in here this morning.

I have a little matter from an honor security announcement, just to read that, but we have to clear something that's not out there.

And it was gang bang.

One guy said this, one of the guys said that.

I have to decide.

But what we have to do is,

You, what we really want, is you maintaining your independence.

Gosh, we want you to maintain it.

We want George to get his best input.

We want Paul to get his best.

We want John and some of you to get out of one of those goddamn, excuse me, come out of here.

We want you to, too.

Are you sure?

I have three more in the next ten days.

All right.

Well, I don't believe it.

One of them is SST.

I get the word that you won't be in the demonstration room.

I'm for it.

I said, won't we go up and testify on the SST?

So I'm going for it.

I remember in this room, I remember very obviously, John, John, John, John, John.

I said, I don't know about the environment.

I don't know whether or not it will work.

I don't know this, but I do know that the United States of America is

Today, it without trying accepts this position of being second to the field of world transport, where it has been first.

And then something has happened to the spirit of America that I do not want to see happen.

And you said, you said, well, Mr. President, I disagree with the technical things.

He said, I'd like to hear you talk about it.

Remember?

Now that's the kind of talk we have.

Now watch on.

You'll get a little feeling how we talk around here before you get into it.

That's the way we want to go about it.

That's the way I want to go about it.

This is on the SST, George Maynard's old class.

What a decision.

Very, very, very persuasive.

Much better than last year.

Oh, he heard him already.

Oh, yeah.

He's carrying the subject matter.

And I'm going to send it to another one of God's corporations.

I'm going to send it to another one of God's corporations.

A lot of people don't know this.

What do you mean?

Like what?

Oh, he did.

He did.

Well, no, but he makes a lot of noise.

He said his attack on you, James Berger, was horrible.

Did you think so?

I'm so mad.

Well, everybody, everybody.

Let me tell you, let me tell you, he's a lightweight.

He's smart, by the way, but he really evaluated on his colleagues.

His colleagues did not consider him a heavyweight.

You know, it's a curious thing.

Curious thing.

He isn't nearly as smart as Wayne Marks.

Wayne Marks had a fine piece of metal machinery.

And Wayne could talk the...

But on the other hand, he's got the same kind of influence that William has got.

Except that any guy that can talk in that damn Senate can stop what you want, aren't they?

That's what I mean.

He can stop us.

That's what he did last time, John.

He stopped us from that damn talking.

You know, he ran a filibuster.

Now, we can't let him kill us this year.

We've got to go forward on this.

This means jobs and a few other things.

May I make an observation about this?

Yeah, go on.

I guess, Arthur, it's primarily your business.

I don't mean to bend you on your business, at least for everybody else here, but my business is your wealth.

So I have the need to drive this interest rate down.

I've been doing a little checking around.

I don't mean by that I run any big surveys or anything else.

But without getting to the money supply, which has been great in the last month, February, January, it looks like it's over 12%, 14%, and we have one.

It just goes up.

But without getting into that, I really think we've got to try to put enough pressure.

either through money or conversation or whatever, to drive these interest rates down, Mr. President, at least another three quarters or maybe a full percentage point, whereas that prime rate's down four quarters.

Now, the truth of the matter is that a prime rate of five, three quarters would have nobody against it except General Motors.

The average guy going into the bar of money is still paid a $75,000.

That's correct.

Now when you talk about long term money, they're still talking about $9,000.

Well, Marker's concerned about $400,000.

Well, $9,200.

$9,200.

Marker's has their endowments, understand?

Oh, God.

You need another percent here, okay?

Yes, sir.

What happened?

I've written it down.

You sure have.

And, uh, quietly, we have a set of words about how the Federal Reserve is in there by Ellen Bonds.

What is that?

What do you mean?

It's a lot longer here.

Is that driving term?

Well, you see, I'm trying to get the long-term interest rate.

How does that, uh, uh, you know, but don't tell me that.

Just so it doesn't tell you anything.

No, no, no.

What you had...

But he had, in the last good part, 40% of what we accomplished to drive his interest rates down, long-term rates down, and he has been wiped out for the past month.

In long-term corporate bond yields had risen a full percentage points during the last month.

That's great.

All right.

Nothing we could do to stop that.

We could make things worse by making one easy.

That's what Frank did.

I'm not making that immediately clear, but that's what happened.

We had a flood of new securities, new corporate securities.

To show you what that means, let me give you a little background.

You, public offerings, corporate bonds, 1965, per month, came to less than $500 million.

1966, less than $700 million.

1967, $1.2 billion.

1968, $900 million.

1969, $1 billion.

1972, $1 billion.

In fact, if you're writing these interest rates up,

Now in the first quarter of this year, two and a half billion, and in the month of March, the month we now face, the estimate is 3.2 billion.

And it's a huge concentration of dollars.

Well, why?

These are bonds.

Yes, bonds.

All right, now then, we can't control that.

As a matter of fact, the story that I get from a number of bankers, and I don't put this forward as a responsible, complete explanation, but it's possible.

They say that the expansionist policy that this administration has worked upon suggests to business and financial people, in view of the sharp decline that we had in interest rates, that the low point in interest rates has been just about reached.

Therefore, you ought to go in there and borrow now when interest rates are still relatively low.

I think that's precisely right.

And that's exactly why I said what I did.

That I think there's a general feeling in the business community, certainly the banking attorneys throughout the country, that 6,900, 6,900 trades will be backed up.

Yeah, but we're part of this.

But you're talking about the court.

If anybody gets the notion

If we are easing monetary policy further, that will intensify these fears of a rise in interest rates later on, because the expansion of the economy will become so vigorous and so on and so on.

This is a repetition of the difficulty we had in 68, 69, and the late 67s.

Now, what I can do quietly, we'll continue to do that, but what I'm afraid is just a drop in the bucket, is to keep on buying long-term government bonds.

We'll do that, we'll push that, push that party.

How much are you pushing?

The market is going to get a couple of hundred thousand.

But it all, it all .

I didn't want to argue specifics.

I just want to make the point which I've made that I .

I agree without thinking about it.

My friend's got a small bank and I said,

He said, we're good.

It's a consistent thing that I've got in mind for the open market.

We need to go long.

We can't have prosperity in this country.

And Chris Briggs, where have they been?

They still are.

You're still staying there?

Oh, yeah.

Every day, if I could share the country.

I'd like to see a report on it.

I'll let you reach like that.

It'd be good.

I'll say that when I testify next Wednesday.

Good.

What might be the stability of the system?

You see, we've written this about this a very long time.

You see, John's already said it.

If you two could be, it would be very important for you to appear to be in tandem on something.

We don't want to have...

I thought John's testimony was wonderful.

I don't see how he did it for us.

I know that.

I hear it so much.

I don't know how he had any time to think about what he was doing.

How did that bring that advance to him?

I think he just knew it.

All right, let me suggest one little thing.

I don't want you to conspire against the old man.

This is all new to you.

I'm just speaking out of character.

Uh, if we're talking, we always give her a cup.

That's one thing we do here.

No one had nothing to ever leave her for quite a while.

And talking to these guys, and you open the market, and they, uh, I don't know if this is an issue, it's a question of your own concern.

I just tossed this out, and they don't know why.

But you just said, I'm very concerned about the interest rates.

I've stated so many words, you really is, and I'm looking at this loan and taxing you.

I have a damn fool, a damn fool, that'll make us have a press conference.

And, well, he's got some very foolish people.

And you know about it.

You know about people under your board name.

Yeah.

You see, I drew up a set of rules.

One of the rules was that the administration is not to be criticized.

If it's quiet and internally, say any damn thing you like.

Say it to me.

I'll bring it to the cab drivers.

I'll bring it to the driver.

Not a word of public criticism.

We didn't get through that until Jesus was expelled.

And he said, and I said, worry, that's what I was referring to a moment ago.

They talk about the Fed.

He picked up the New York Times, and it says the Fed says this.

You know, they didn't know me with him, you know that.

They think he's talking about me.

I'm going to do just that.

You know, that'll shake my fishing well enough.

Sure.

You can do that.

Oh, yes.

I've got my little... Also, also, you just, just, uh, I, I, just copper a little.

But the, but now let's, now let's look at the practice.

You know, I give them hell.

Now let's look at the practical side.

The dry shore generates them.

They're all right.

You see?

That's it.

And it's dangerous to ride that down.

And as a long-term man, as a long-term man, I don't see what there is to do, except bought and bought issues.

We're going hand in hand.

I'm going to make sure we do more of that and we go pretty much as far as we can.

There's too much talk in the business world, the banking world, that the interest rates have bottomed out and they're going back up.

We all worry about it.

I just like driving down to another corner and saying, hey, what did you show the guy that day all wrong?

even a quarter of a quarter of a quarter of a quarter of a quarter of a quarter of a quarter

Is there anything you think we can do to drive down the long-term market?

Well, I think operating in the long-term market is about the only thing technically that we should do.

It would be very helpful in your testimony if it's good for you to make it into our operation.

And our group don't give any other lead.

You know how you, you know these guys better than anything.

Except for John and everybody else.

Give him that lead.

Give him that lead and make him use it.

He's clever.

No, he's not entirely smart.

Well, that's right.

They're both the same.

In politics.

I mean, smart in politics means clever.

I have two other things I want to bring up.

One of totally unrelated.

Last night I got involved in another problem which will disturb you.

Gus Lee, Goldman Sachs, Bonnie Lasker, chairman of the New York Stock Exchange,

Andre Meyer talked to me about the DuPont brokerage firm, which is the second largest brokerage firm on the street.

They're gonna go broke again?

Yeah, it is, yeah.

Unless Ross Perot keeps his $10 million in there.

Oh, God, I thought it was in it.

Is he trying to get out?

He's in it.

He's getting out.

I talked to him at a great length this morning.

About 30 minutes.

It's a high price.

And, uh...

So all I'm doing is alerting you.

There's nothing you need to do.

I just want you to do what you need to do.

That's what I'm saying.

Well, he was asking.

We talked about it.

I mean, it's quite good.

You see, this is a, between us, the higher price is the pay.

It was Ross who you say he gets in.

He said, well, here's your man.

Now then, what do we do for him?

He can put an end to it, but why does he want to get out?

Well, he just says he has his own stock.

It must all move.

I think he gets free with it.

Yes, he said trade is 76.

He's got almost 29 to 10 billion shares.

He's got about $750 million in his own.

Well, all I want to do is alert you that it was in the wind that they made the SEC make a move against the U.S. and said they could do this.

Well, I'm trying to pull that thing.

All right, fine.

I can guess one of them for you.

And I hate to do this.

I wish he would call Ross.

I would like to be one step further.

I appreciate it, Mark.

If you'd like to call him, I'm saying you privately talk to the president about it.

Well, if I may, can I hold that in reserve?

You have to.

All right.

What I'm going to say is, if you are here, you're talking.

Don't hesitate to say, you and I, we've all been chatting with you privately, and this is terribly important.

How about that kind of money?

He can afford to lose it.

And he won't lose it.

No, he won't lose it.

He's got a point or two, which I will belabor with you.

He said, he said, if I go into this, I don't know, I don't see how much interest there really is in this government.

He said, I don't see whether or not we can shorten some of these procedures and turn them into service to the SEC.

And I said, yes, we will be on your expedite.

We'll expedite your request for a ruling if that's what you want.

We haven't necessarily kicked you in the face, but I said, the SEC is leaderless at the moment.

And I said, you just get your man and your lawyers and get your applications filed and come up here and talk to the director and the various members.

We'll try to have everything.

What are you going to do?

You say you're going to appoint the SEC.

CIVIC is not going to go wild.

You and I can control it.

Right.

You're the man, I'm the civil one.

That's right.

My man is the CIVIC.

That's the security investor's protection.

That's the new insurance.

What you see here, the Treasury representative and the Fed representative.

I don't want them to go purist on us.

There's a time when I go curious myself.

You know, you take in the present time, banks all over the country are in violation of SEC and Federal Reserve rules.

Some of my people want to blow the lid and I'll blow their heads out of them.

Good, good.

Nothing.

Let them be in violation for a time.

Once the economy, you know, is moving up like- We've got to take care of it.

That's right.

We'll go about it.

We'll talk about it.

Well, Arthur, then could you, you mean, in other words, that CIFIC could take care of this problem?

Well, CIFIC could make problems for us in other brokerage firms.

It could intensify the difficulty of coupon by putting in new requirements with regard to caps.

That's correct.

This is not a time for reform.

That is a county, but the industry needs to be reformed, so the law is the industry.

All right, I'll tell the borough that we talked about it, and we will.

and to hire a man to hold his hand and do it.

We will follow through with every respect.

All right, I mean, this has never been a trade, but you know what I mean?

Yes, I understand.

But in other words, I'm telling you, it doesn't have to go that far.

I understand.

If it can go that far, then DuPont must be saved, like Lockheed must be saved, like Gallagher.

We couldn't save Penn Central, but, well, I just think that we're gonna save this, and we're gonna save Lockheed.

I just, I'll tell you, I want to go to, sometimes, oh, incidentally, George, are we having a, may I ask one question, parenthetically, which are your views, and you can't sit in on them.

I think, I think we, are we having that study made of antitrust?

You've had a few sent out a memorandum asking everybody what they thought the antitrust action laws were.

There's a domestic council, conventional, to review this whole area.

John has set up, you know, and that's the meeting.

But that's fine.

Now, let me come to the point.

It seems to me we're on that, on this whole matter.

And I trust we may want to consider this idea that

that people want to be, make heroes out of themselves, or to bust and trust.

This is no time to bust any trusts, or convolvents, or anything else.

At least that's my, it's a time, really, to allow, frankly, partners and so forth, which will have the effect of saving companies that otherwise could go down.

Yes, sir.

You agree, Arthur?

You're asking about the DuPont family.

They want to take $30 million out of DuPont.

Well, they can't.

They're not.

Ross can take his out first.

Under his agreement with him, he can take his $10 million out first, which he wants to do, he says, and get out with it.

But it's not always something.

We're bored into this.

See, what the New Yorker, what he's doing, he's leveraging this thing.

I'm going to be careful what I say.

He's leveraging this thing to say to the New York Stock Exchange,

that I want a 10-year contract to do all of your electronic data processing.

The old guy said, all right, I'm the second.

Oh, yeah, that's right.

Now, they've got a Stanford Institute studying it, a standard research institute.

They promised you.

They've already committed to it.

A million dollars a year of consulting fees for 10 years to stay in the company.

Which I think is an outrageous proposition.

Really, as a matter of fact, they ought to put it in there.

And then they do it.

But they just said, we just can't smear them without putting out bids and negotiating.

And prior to the time, Stanford Research reports on their analysis, we just can't make this kind of deal.

It's a gross plumb out of the tub.

So there's a lot of appeal in this thing.

So I'll be careful what I say, but I understand what you want me to do.

Is there another point?

Yes, there's another point.

I want to make a complete difference.

And this is our report of milk rice forage.

It's cheese and milk price support, and whether or not you said it's 85% parity or 81% parity, it's a good part of the business.

I get down to it, as I will continue to get into a lot of these things, because very frankly, this is probably the most important thing in the country and the world right now.

If you really want to do something, I may suggest you ought to have a world of meals down here.

and just say, you know, I want to ask you to tell me, you know, what about this support for us on, you know, products and so forth, anybody in the country.

And I will tell you about it.

He loved doing it.

I asked him, yes, yes, he loved it.

He ever talked to me, the president of my district.

But no, he said, I don't talk to anybody except when he asked me to.

Well, I knew a lot about it, Mr. President.

I knew a lot about it.

The Department of Agriculture doesn't recommend it.

The Department of Agriculture says it would cost $100 million.

I said to the department, yes.

I don't think it would cost that much.

Their figures, or Wilbur's figures, said it would be $38 to $40 million.

But anyway, that's beside the point.

This is the single most powerful group of foreign people in the country.

And the more people in this foreign colony, no question about it, they operate with a monolithic authority, and they're powerful as hell.

And this, they've got 100 people in town here.

And this touches lots of folks.

And all I'm saying is that I think you can cure everything except radical sharing with this.

I just keep banding around.

Everybody keeps doing it.

But I know that I entered the wheel bridge in this room.

Yeah, he's called me.

He's talking to me.

I tried to talk to him.

That's right.

George, let me ask you this.

We remember we talked about the cheese problem.

That's only part of it.

They're all related together.

I'm grateful for the cheese.

We purchased the cheese for our school program.

Let me say this.

We're going to support it.

If you support 85% parity, you don't have to worry about these other things.

You don't have to worry about the imports of cheese or the purchase of cheese in the school lunch programs, in my judgment.

That's what these people are now telling me, that really all they want is 85% parity support and that'll solve their problem.

I'll tell you, it's about 81% right now.

And you've got to support the House, but I think that's a very late one.

I mean, it's Land O'Lanterns.

Land O'Lanterns, Arizona.

That's the only outlet in the country that says, well, it cost you $100 million.

You don't need to do all that.

So our figures are that it will cost probably not in the order of that much money.

And that we will have higher bill prices.

That's another fact to think about.

And that we may very well wind up a year from now

with more milk than we know what to do with, and the need to cut back on the one hand, or plant more wood in on the other hand.

In other words, we're building a problem over a year from now.

Well, there are all sorts of things between figures that can't be talked about, but they do have the error to minus that on the same 5%, and I assure you.

I think I certainly agree with John that Mills feels very strongly about this.

I can't quite figure out why.

I don't know why.

And he feels strongly about this.

There are a lot of people around who go in front of Mills and who report that Mills doesn't care.

He's just an agent for the Speaker.

I can't believe that's true, because he keeps bringing it up to me, and he argues his points and so on.

It's obviously very much on his mind, and I don't quite see where he would have found that point.

There's another base that you can touch with great reward, because he's already bought it.

You can touch the base and hunt for your position.

You can get his help on revenue sharing and reorganization.

You probably can get anything out of Wilbur except total commitment on revenue sharing.

He'll go, he'll compromise.

That's right.

But he's just not ready to buy totally your general revenue.

You see, I think we did quite a bit when we showed Kermit, so it's mostly this up there.

Kermit was always going to be against it.

He came in a whole package.

That's right.

Organization.

What is the background of this gentleman?

Why does it mean so much to you?

Mills, George, this outfit puts up more damn money than anybody in the country.

They're smart, they're green, they have two generic money.

It's the best, it is the best and most effective lobby in America.

Beyond the area.

That's right.

I didn't know.

I never heard of the Tarnoff until this year.

They were very active in the 1970 campaign.

That's right.

They brought out a huge amount of money.

They put up, they don't put up as much as the CIO, but they basically, they put it all up in the conservative county.

They're very conservative.

They have to .

This is .

Conservative causes generally, and I mean conservative .

They support our 90%.

They support Mills because basically they consider Mills as conservative.

And they support a lot of .

But Mills has been, well, let's see, he's been on the two other doctorates for at least 20 years.

No, but he's great.

Oh, my God.

Look, Arthur, he is candidates in the House.

Whenever he needs help, he'll let him know.

Oh, Mills can get elected.

Mill's got a hell of a lot of years to go, man.

Mill's not going to get elected.

But he's got his clack.

He's got a clack, 50, 60 congressmen.

He's passed the point in the House right now.

And he's got four black senators that he killed that they know they owe their elections to Wilbur Mills or their dog, which you read on.

Yes, sir.

But this one, I just wanted to tell you how important it is.

And I know I got by that when I did this.

Well, this won't do all that much violence to you.

That's what Bill Price said.

What's interesting to me is that if we would go for this, would they give up the cheese and school golfing?

That's what they tell me as a gift.

That would be just as a matter of...

No, I think that's quite possible because she is in business.

It is partly a way of building up demand, that is, from the school mills, and partly a matter of cutting off supply by not allowing cheese to be imported so that you get the price up.

They get the price up directly by government price reports.

I suppose they don't care about these other ones.

I have not verified this.

They have a three point program helping the dairy farmers.

Dairy imports, cheese purchases through a lot of programs, and dairy price support.

I've got two kids there.

A man came by the CVS.

He said if you could do anything on dairy price support, you could get the other two.

And I've got to believe he knows what he's talking about.

It's a piddly little thing, I think, but it just irks me because we've got to go on the textbook.

And I just don't want to pave another wrong signal in this field if we can avoid it.

Have we already crossed the bridge on cheese?

No, sir.

Well, I remember our group has started to buy cheese for the school lunch program.

And we're sort of upset with the OMB about that.

There's no question for it.

But anyway, they have done that.

The breakpoint sheets question, which is about your tariff commission letter, that letter hasn't gone yet.

So that's still sitting here.

And the department, of course, doesn't need to make it.

further commitments on the school lunch program.

They had 10 book sheets for that for a gathering about 16 months.

Now they're going back into that market, but they don't have to stay there.

It's a rough deal.

I'll tell you how hard that is.

I do, I mean, I take it without, I don't express it on a political aspect, although it sounds very impressive.

If we can steer clear of the USA sending another wrong signal and trade over here, I still trade that.

John, just glancing at this, I can see that their ambitions exceed what's been under consideration.

They must price up to 535, the maximum we've been talking about.

So, what I'm saying is, I think if you,

We'll let you see him, I think he's .

They'll be back.

I don't know if anyone was wrong.

Let me ask what I think is an important question.

What could be the effect of all this?

Well, practically none.

They say there will be a small increase.

Cliff Harden says there will be one overproduction and he thinks there will be a diminishing consumption of milk in the country.

And the district is sad.

And because of the prices of milk.

You know, not because of prices, but people are not drinking as much milk.

They all got scared because of cholesterol and high drinking and so forth, and milk and peach and kind of butter.

They won't use as much butter for the same reason.

And that's, of course, the reason why they are so interested in making purchases.

I see.

Well, the part of the reason why the prices now goes up a cent a bottle, that is for utility.

I don't think that's the exact point.

I agree with you.

But if it's just a price of milk, it's not going to be effective.

It costs you money in the budget to give out that money.

Well, it's not just Wilbur.

Well, I don't know.

It's the barn, this barn broke.

It's the whole barn.

We have problems out there in the barn.

It's everybody right down the line.

No.

John, it's sugar-hungry, it's so heartless of a model.

Frankly, it's also, well, that's the point.

That's what you get out of the problem of the cost-to-price analogy.

That's the real thing.

Because on one side, you can't let that happen.

Well, can we say that we will try to work with this, following the principle that we're willing to spend money in the budget and figure out a way to affect the price?

I don't know quite what that is.

And also, the other side is I want to get off the cheeseburger.

If we do this, let's get off the cheeseburger and get off in the free month.

If we can, I'd like to get a couple things for it.

I think we might.

I don't think it means much to me.

But I think he'll get, I think he'll get back on it.

I think he'll get off each thing and everything.

And if he gets there, he doesn't get off anything.

They're two lousy programs.

We have to pay for this one.

The other thing I would see him say is this is a joke.

It will matter.

I have not talked to him over a tour.

It has been a big one.

It's not a way to come in.

You know, it's the old story.

I remember I first ran for Congress just on the TV.

I had to oversee an old summit at Galway.

He did the summit, and he was like, God.

So I came to Galway, Galway.

And I said, now, what advice can you give me?

And I was like, I don't know.

We only spent $50,000 on that whole thing.

It was enough.

And I said to a lot of people, you know, you go around and ask the advice of people you know, experienced people.

Never ask the advice of an older politician unless you're prepared to take.

So don't ask his advice unless we're prepared to take it.

That's exactly right.

And unless you do this, I wouldn't see him at all.

No, but you two better do it.

Or if he can satisfy himself, he can do it.

Then let him come in and explain it to you.

You just don't know.

That's it.

We're going to do it.

Then we bring him in.

Let him get the credit.

That's right.

And say, now look here.

And I don't mind you coming in on that and getting the credit, too.

I need to see that.

that, well, on this particular issue, but there will maybe be a little bit pro quo there, too.

There's an additional element here, I think, that was all set in the Ways and Means Committee, and that's John Burns,

I don't think it's fully supportive of this thing.

It's fully supportive all the way.

And he's very sensitive about the idea of here staying over middle school.

With that, I'm going to take you in mind.

Wilbur, you might have John there.

I see John Burns from Wisconsin.

Sorry.

I want to ask a question.

I'm going to go to yesterday.

that he can own some security and welfare reform together through next week.

He thinks he's going to have trouble after next week if we don't have drugs and guns.

Now, we think that's doable from our standpoint.

And they have worked through such things as cashing out the boost and various things of that kind.

We have one or two matters that we think are left.

But anyway, he has kind of the beginnings of a request to see you.

say next Thursday, or like that, or sometime next week.

He says that any day, he might go out and have a job where I can talk to him about it with him every time.

I think you ought to sit in one of those with him over, too.

What do you think?

That's fine.

You know, I guess put the old stroke in there.

Well, we've got an awesome rock color coming down today.

We were going up to this town and it got snowed out.

Apparently it blistered in Rochester, New York.

Heavy snow.

They called it an emergency.

Which is just why it's my favorite trip of the day.

Well, let me say that we appreciate that.

I want to also tell you one other thing, one more.

a very, very important subject over the last few, on the 16th of March, you will be receiving invitations to probably next year on the White House secretary's mind.

Most White House senators

And this will be a lot of fun, because I'm celebrating my wife's birthday at the White House.

And the head will be invited, and our leader will be invited.

after so long, but I think there might be some other amusing interest, if we have an amusing program for the Irish Senators of a full-number of Ireland, and the Irish Prime Minister is going to be there.

So you know, they ought to be a terrible match.

The Irish, you know, everybody.

The Irish will see.

That's horrible, so I'm not going to stand for it.

You ever taste an Irish whiskey?

I love it.

I do.

I'll have Irish whiskey.

You know, it's really like rye, isn't it?

It's more like rye.

It's a scotch.

It isn't like scotch.

It's a cross between rye and scotch and bourbon.

Sort of like a rye.

Don't you think so?

To me, it's a draw.

That's no city.

I'm not an authority.

I don't have a rule.

I don't get to be an authority.

It's like the people I say don't get to be an authority.

I would have to consider yourself 100% iron.

He's heard about this.

The British had a horrible policy toward Iraq.

Horrible.

But you know that potato family.

In 1849, they died.

That's when they all came to America.

You can see how the Irish felt that they did about America over so many years.

But now, boy, they've got it made.

They do well, though, don't they?

I might have closed on it.

But why not?

Here's another slightly more obvious thing to note.

new information on capillary temperature resistance.

These capillaries are not quite complete, but it looks as if the projected 1.5% increase for 1971, which came out of the last survey, is going to come out around 4.5%.

The one that will be coming out next week.

Brooklyn was the last one in November and December.

It's up to four.

The roof rate is nine percent.

Now it always has a little bit of a touch.

But this is important.

It's important to us because in our 1065 we had 400, 300.

If we go three and a half.

Who develops these figures?

The Congress Department.

They could.

I don't trust anyone's figures.

I don't even trust our figures when they're against us.

I mean, I don't know about monetary, but I think projections, I think it's all bad gas.

It is a question of confidence, but the main thing is we've got to talk confidence.

Not Pollyanna.

You've got to be credible.

But the other hand, you've got to be careful that the moment that you get too credible, the president says, gee, he's a very credible caller.

Wasn't that a great, honest, candid press conference?

He gave us the knife to stick right to the back of the president.

Now that's the president.

Oh, I love him.

I'm personally, I have beautiful relations.

You're so right.

You're just right.

At that time, if I were they, I'd be trying to give it to the other guy.

What are these figures?

Can I understand what you're saying?

Can you understand what I'm saying?

Is this a follow-up sheet or something?

Well, let's first, the last meeting you suggested we ought to spend some time

talking about the process whereby the money supply is built up, reduced, what the Federal Reserve can or cannot do about it.

And you suggested that I prepare a little paper.

And what goes into it, that certainly is.

This is not an easy subject to cover, a few pages.

Let me ask you this, if I read this thing,

You mark the passages, and then try to inspire them.

I understand that you'd be surprised by sometimes catching responses.

Is this something you prepared or AIDS?

I would like to study it because I'd like to know more about it.

Do you understand the challenge?

Paul does.

He does.

I do not understand it at all.

I mean, they've got this money supply thing, and I see 4%, 2%, 6%, and they say that's not the one.

There's three of them in here.

He's the one that's this one.

If he knew...

if that was any worth it.

Everybody has a different view of it.

But Mr. White's money supply is, I own it, except I know this more.

Well, that's all you really need to understand.

And basically, I don't know.

Now, you're so right.

I think, Mr. President, that you've been devoting too much time to the month-to-month figures.

That's all I looked at the last year.

I don't think your staff has served you well.

They're going to knock your stand.

They come running to you with weekly figures and so on.

They're running to make too many people busy themselves.

And Paul can keep you informed about assumptions.

Our meeting's largely silent.

I can have the video in.

Well, the man didn't kill John that, too.

These guys are going to catch hell with those bankers.

The bankers don't want more money supply.

They just want high interest rates and have everybody starved and they make money if you don't manage.

Not true?

No.

All right, go ahead.

I said everybody start.

I don't know lots of good bankers, at least one.

But now, but now, look, seriously though, the money supply thing, let's face it, I mean, we've got to be candid about this.

I, that's why I told that friend, and he perfectly handled it.

I've gotten around to using the kitchen here, and I, you know, a little whistling on this, but this argument around, you know, first, and this, and so I, good God, we're all working for the same country.

We're trying to do the right thing.

We don't always agree, but finally some poor guy's got to make a decision, and

And the point is, nobody's going to look good if the decision is wrong.

The guy said, somebody said, ah, I advise something else.

You notice how Clifford, for example, now trying to say he had a different policy.

He didn't.

I just looked it up.

In September of 1968, Clifford said, we cannot have any withdrawals from Vietnam until the latter part of 1970.

That was his position then.

Of course, there were others who said, well, I advise Johnson not to do this and that.

Humphrey now is trying to curl up, and I understand that.

Well, I really didn't support the policy, but I had to as a lawyer by the president.

Let me tell you, there is no way that any individual can look good if his team loses.

No way.

That's what we have to understand.

If your team loses, nobody's going to come out and say, oh, yeah, you can write a book.

That's all right.

That's fine.

Anybody can write a book.

None of you will end up speaking on the board of policy.

They write books and treatises and get an article by Scotty Reston or something like that that said the real hero of this was the man that stood up against these disastrous policies for the country.

I just read it.

I think that Churchill's fantastic writing on the First World War, which was the war in the East, you know, and how the Austrians, with a group who fought greatly, greatly, fought, followed up their battle of Boston-Lemburg against the Russians, how the Germans, how the Russians, that greatly, greatly, because of lousy leadership, a lot of just small detachments of Germans,

and so forth and so on.

And the whole point is, what did it all matter?

Ironsides wrote an Irish Greek treatise on the rights of the British, and Simonov, the Russian, wrote his great defense of himself.

Ludendorff wrote how he made every decision that was right in both the East and the West.

And Moldy wrote his.

And in the end, the Germans lost.

The Russians went down the tube for other reasons.

And so, how do they look?

Are they, my point is that if we could all, that we've got to understand that in this town, here, the thing about this world, everybody here is an adult man, fortunately, and the thing is, and I don't say it, I say it to others, you're all smart as hell.

I mean, you know what you're talking about.

Arthur, of course, Paul, George,

and John, and so, if we could just be, if we have feelings that people are carbon, I don't worry about these columnists.

I mean, to be perfectly frank, when I see a columnist say that bid is cutting us, and Schultz is cutting the Fed, or Krasnick is cutting the Fed, they're gonna be saying about you the reason.

And I don't believe it.

I never believe it about any of the people.

It's my friends who say, look here.

I say, come on.

To me, provided.

Within this room, if he's like this, we have a bit of talk.

If somebody thinks we're not saying the right thing, we'll say it.

So I say, uh, tell me anything you like.

Who was George?

George gets a crack at me more often because he sees me in much, much, may I say, more difficult problems than cheese.

Arthur, out of the comments about the monetary situation, I take it from your statement that our tax, as far as the administration comments are concerned, should be what John had to say.

I think we all felt that he expressed himself very well.

That was what you think our line ought to be.

I don't want to improve every word that John spoke.

No, I thought John handled the question quite well.

But, uh...

I didn't mean to object to it, see.

See, you've been trying to drive it to a fast rate of growth for money some time, but John hasn't tried to do that.

Well, I see, I see.

He said, that's why John, John handled this thing very well, and he said, look, I'm confident.

Provided, provided we have extra straits and money, right?

And that's the thing, that's fine.

Well, what I'm going to say to them, now that puts you on the spot.

And you say, oh, that is the problem.

I said, the other way through is great, it's the money.

The real problem there is that provided we can stop the way the prices are, and we all know that, look, we all know that.

Let me put it this way.

It's everything.

But the main thing I'm simply saying is that

As far as that package guy out there, with that huge amount of safety sitting there in the back, who's trying to determine what he's going to do is concerning.

I understand that there's wages and prices and fed and all the rest of it.

But, boy, he understands confidence.

And he sees Dr. Arthur Berger

making a statement, or the Secretary of the Treasury, John Collins, or the Chairman of the President's Council of Economic Affairs making a statement, and that guy says, gee, I think things are going to hell in a half.

If it's interpreted that way, that's what we've all got to avoid.

I have to avoid that.

I find that I'll sort of, you know, say something that sort of gives the impression that I'm concerned about this or that.

Zegers come in and say, are you concerned about this development?

And I say, yes, I am.

The point is, the point that I've got to address, the point of all this conversation is that what we're really talking about here is that in this whole field, the inspector, he got an enormous responsibility.

That's why when I say next week, when you go up there, you can just put out a couple of minutes about that, and there's great things.

I don't understand what John said, if that makes sense.

That would be great.

And then, John, if you could follow it up, and you praised the president, the chairman of the Fed, for it.

See what I mean?

That's the way to do it.

You don't want to do it?

No.

I got it right when we were talking about Donald Trump.

No, no, no, no, no.

No, I'm telling you why I want it.

Because somebody got a two-day story.

Oh.

Oh, no, no, no, no.

It's not personal.

Although I didn't intend to get a two-day story, too, but I did want to get a story that would help us.

Art, you're going to talk this way all the time.

Now, let me tell you this, but I can't give you a call about it.

I've got it signed by Dave.

Well, Rocky will be here at 3 o'clock.

He's going to give us a hell of a push again on graphic sharing and the organization he's devoted on all the way.

I might have to finish my meeting.

Of course, I'm going to see him tonight.

Oh, you want me in New York?

Oh, yeah, New York.

Wait a minute.

I mean, people wait on me.

I'm going to go to the range of playing in it.

You stay in it.

Let's talk about that on Rockies.

I have a little game.

All right.

Yes, sir.

We have a ball.

I'm not sure that that's the right thing to do.

I believe, I always believe we've got to make the best out of every paper.

The other point is that we've got to remember that we had Secretary of the Treasury, Alan Crocker,

As you know, the members of the cabinet are invited on the 6th of November.

She always stands up for the presidency.

Thank you very much.

She's done a good thing.

Let's hear it.

All right.

No, no, no, no.

But we have the members of the cabinet.

They're all invited.

Now, for reasons that are very important, part of it is that you can call him and invite him.

He's probably not on the list, but if you want him to invite him, call him, right?

Well, we may have some regrets, unfortunately, but we don't have your presence.

But there isn't.

I mentioned it this morning to all.

I'm recognizing it.

I did it because of John L. Archer.

It's going to be more than a few of you this evening.

I can assure you of that.

Nevertheless,

with these older concepts coming.

I visit these parties and we're young.

But let me tell you what.

Back first in the announcement, I went to visit Ralph Walrach, who's right on his own.

It's already out.

It's moving.

It hasn't grown.

It's been released from waiver.

Secretary Hodgson has, he is what I say.

But I didn't,

indicate that whoever would come out from the Quadrant would be coming out just to address themselves to the unemployment figures.

But they said to me, is there any report out of the Quadrant?

And I said, well, I wasn't able to get the meeting this morning.

I was tied up.

I said, maybe I could get someone from the meeting to come out and give you a brief fill.

I think on that basis, the Secretary of Treasury could walk out and say, we had a good meeting this morning, talked about the economy, we're optimistic.

The unemployment figures dropped this morning is another indicator that

There's a good spark in the economy, and we're going to be watching all of these indicators very carefully.

similar to the way you handled your testimony on the Hill, Mr. General Secretary.

Does that seem to be all right?

I think that's fine.

It can be done as a fill-out on this subject alone.

I don't want the Secretary to piddle away, well, anything on a monthly figure.

We're going to have to use him for something else.

I've got enough problems, really, to try and meld and blend into this administration and the personalities.

I don't need any more progress and possibly be doing better.

Well, I don't know about that, but I'm very sensitive to the fact

uh, frankly, uh, the part that is the, you're the big name, frankly.

And if you, if you were to go out and just say a word, he, he, he's the guy on the TV.

You simply say that, uh, you can say that, well, by one month, because, uh, I think you should have talked to me, you should have talked, I should have said we, we just saw a lot of the figures on one minute, and they, they're encouraging.

On the other hand, uh, we, uh, we,

Well, the way you handled your testimony, it was on television, it was very effective, because you indicated, well, the first quarter's a little bit behind what we thought, but the indicators look good.

We're optimistic.

It gives it a...

I think also it gives a little, a little, a little, a little, a little, a little on the plans, a little on the, on the, on the figures that we also, the preliminary figures on new plant equipment are higher than we had expected.

Right.

That's a very, that's a very important point.

We also have some preliminary figures.

The preliminary figures on new equipment indicate clearly that when they, they'll be out next week or higher than we anticipated.

I would say just that it looks to us from information we're getting that the plant equipment picture looks a little better than people had thought earlier, but I wouldn't make a reference to some particular figures because then they want to see those.

I think the thing that looks like that, you said we got a report on the equipment, but the figures there look better than what we had anticipated, without indicating any...

That's good.

And the thing that the Quadriads got, it's supposed to be private.

Yeah, well, it seems to me that a good thing that John could reject from the Quadriads meeting without seeking to report on the internal instruction is the sort of the spirit of the meeting, that people would say direct discussion and a general agreement.

to kind of get this noting that everybody does.

And it shows the administration working on the economic problems and optimistic.

We had a good discussion of all aspects of our economic policy, the monetary aspects, the fiscal aspects, the fiscal problems, and the economic prospects and so forth.

a very helpful meeting and so forth and so on.

The procedures, as well, we described in the actuary read are not, we do not disclose the specifics of such meetings, but that it is significant to note two points.

One, that you and everyone know the state .

And note also the state .

How's that?

That's fine.

All right, .

Yeah.

That's right.

I deliberately was putting it to him for a reason.

And he's been putting it to us all along.

And he is playing his game, and he can put it to us, but he really doesn't mean it, because I didn't intend to do it, but he does.

And he's doing it in private questions as well as the rest.

It's best for me to put it to him rather than to have George go, I don't want you to get in that thing.

So I want you to know what the game was.

I want, of course, you to see what it was.

By the same token, we have to realize that he's the guy we've got to deal with, and that we've got to bring him along.

But I thought that your point about interest rates could have been more effective.

That was very simple.

But I wanted you to know that my

appearance of being quite rough.

It was quite direct, quite deliberate.

But then, last week, I didn't think he did the right thing.

I thought he did.

Because he, see, my point is, he knows what a headline is.

I know a question about that.

When I said he's smart, he said he's clever.

I said he's smart, but he's very smart.

And then he knows his kind of hard work, and he's kind of loving care, and all that sort of thing.

But also, John, he doesn't know all the answers.

He doesn't know them all.

Everybody is.

and this little confidence factor and the rest of it.

Now, for example, one good thing has happened.

I think, as you know, we've had some pretty good stuff out of the construction trades.

The fact that the building trades got together didn't label it.

The industry of work for construction has signed an agreement that is very constructive.

I think that's that.

You see, that's a follow-up on what we did on Davis Bay.

Well, I don't think we can really claim that because... We won't say it publicly.

Yeah.

In fact, I think it's a response to the situation at the Davis Basin.

I think they're going to use some more of all of them, don't you?

I hope so.

I think they're going to have quite a little problem with their ranking file, but the message has just got to get on to that ranking file.

I must say, honestly,

threats and presence of demonstrations of one thing or another.

I'm just so thankful that we didn't wind up with a board and a wage of Christ for each and all that because they'd be stomping out all over the wire and we'd be wild and have a lot of hard time.

And it wouldn't have been good.

Now there are people on top and we'll have to do it.

But when we have to do it, we declare war.

We're going to declare it real good.

I think that's right.

Davis made it though, I think.

And I think you have to realize it's not going to solve all the problems.

You can do that when you do it.

And that's just like Arthur talked about,

You know, this is no secret that we've had it before.

It's not a new, novel idea.

You know it, and you understand it, and you don't want to do it.

So I think we ought to put a comment on that.

You know, so it's just that the way it's priced, it's a moot question.

You don't want it.

So I think what I advise you to do is keep out the decision.

You don't want it.

I don't mean to talk about it.

Okay.

On the transports question that John raised, I will get up some materials if I can today, or very fast, because Wilbur is pressing.

He wants an announcement soon, if he can.

But I'll try to get that up.

With the notion that we're willing to spend the budget dollars, and I think they're likely to be substantial, if we can figure out a way to deal with the price problem, whether we can or not, I don't know.

It's sort of a contradiction of terms, but you support that price up there, get it up there.

I don't have the price up there.

And then somehow, don't have it, but we'll work at that, and I'll get back to you.

Just have that make an announcement.

There's going to be an increase in price.

Well, if they're going to, you see, if they put federal money in there to support the price, then the price rises because we take the supply that isn't taken by the market.

And that's how, that's what happens.

And then we have to dispose of that in some form.

And that's when you start giving it away to the children in the form of cheese or...

or school milk programs and things of that kind.

So I think that there's gonna be some kind of price effect, but anyway, we'll work on it.

But I take it that you don't want the department to stand pat on where they are, that we are going to move on this.

I favor that, yeah.

This is a tough,

A very, it's one of those political issues, I mean, this comparison between Hanford and Portsmouth is, all of that put together at times is great.

I mean, it's political, but without question.

Well, enormous, enormous impact.

My understanding, Mr. President, I won't be the devil's advocate for it, but as long as you have it,

agree at least to the 6.5% or 6.28% increase in steel prices and wages and so forth going up.

And I think you can even cut the small increase in prices up.

My point is I will not agree for the milk producers, but the farmers in this country are the very backbone of your support.

And I recognize that next year is more important than this year.

But the farmers feel that.

that, first of all, their parity prices are, maybe not on a comparable basis, but at least in their book, in their publication, it's the lowest it's been since 1933.

Now, secondly, they feel, basically, we're talking about psychology, they think that this government,

uses agricultural commodities as a loss leader in order to help the industrial and manufacturing products of this country.

Now they think we give away foreign products to Europe or anywhere in the world we can get rid of them so that we can get some advantage for our manufacturing products.

Now that's what the average farmer thinks.

And this was actually great, and we've negotiated with the Great Britain right now.

So I just think, George, that I'm not trying to interfere.

I'm not trying to interfere.

And it's a heart-to-heart business, and I don't mean that.

And I told him yesterday, I talked to him, and he said, no, no, no.

what he was going to recommend.

So he told me, and I wouldn't lie to you, but I said, I feel very strong about it.

I want you to know I feel strong about it.

Well, I feel strong about it.

I don't believe so, sir.

Okay.

Well, we'll see what we can work out.

Get the chiefs out of there.

Get the thing out of there.

Let's make a hard deal on that.

That'll be good.

At least we won't fall under anything on that issue.

Yeah.

I'll see you at Rocky's meeting.

I think that we can at 3 o'clock.

Yes, that's a good one.

It's never been to George.

I asked him yesterday.

He said he talked about it.

The whole department.

I don't know how he talked in person.

George, he likes you and he thinks you get on well in this administration.

He's going to have to talk to you.

He talks the jokes of God.

Well, I understand.

Amen.

Which is which?

Well, I'm not going to say anything.

Thank you, Mr. President.

How are you feeling, John?

I feel great.

Everything's going all right.

Everything's fine.

Yes, sir.

I'm going to New York tonight.

And John will just have a little party at his home.

Great.

And I'm going to be there.

What do you think?

All right.