Conversation 500-016

On May 18, 1971, President Richard M. Nixon, John D. Ehrlichman, George P. Shultz, Alexander P. Butterfield, H. R. ("Bob") Haldeman, Joniece Frank, Thomas S. Kleppe, Peter M. Flanigan, Oliver F. ("Ollie") Atkins, John N. Frank, and Mrs. John N. Frank met in the Oval Office of the White House from 11:30 am to 12:16 pm. The Oval Office taping system captured this recording, which is known as Conversation 500-016 of the White House Tapes.

Conversation No. 500-16

Date: May 18, 1971
Time: 11:30 am - 12:16 pm
Location: Oval Office

The President met with John D. Ehrlichman and George P. Shultz.

     Supersonic Transport [SST]
          -Boeing
          -President's schedule
          -William E. Timmons' Senate vote projections
          -William M. Allen's previous testimony

          -Possible Boeing statement
                -Effect
     -Boeing
          -Contract position
     -Cost figures
          -Allen
     -Timmons
          -Senate
          -House of Representatives conferees
          -Senate
     -Boeing
          -George H. Mahon, Allen J. Ellender
          -Future contracts
                -Governor Daniel J. Evans
          -Future participation in SST program
     -Lockheed
          -Future
     -Boeing
          -Government and private efforts
                -Research and development
                -Sharing costs
                -707's and 727's
     -Gerald R. Ford
          -Efforts for SST
          -Forthcoming meeting with Ehrlichman
     -House of Representatives
     -Allen
          -Role

Boeing
     -Actions
          -President’s view
     -Future contracts
          -Prohibition
          -Tanker
     -Allen
          -Future meeting with Ehrlichman
                -A hydrofoil
     -Actions
     -Shultz's May 19, 1971 speech to aerospace industry meeting in Williamsburg

Senate
     -Peter H. Dominick
           -Health
                 -Kissinger
           -Statement regarding railroad strike
     -Action regarding railroad strike
     -Possible handling of policy matters
     -Clark MacGregor
           -Dominick
                 -Health

House of Representatives
    -[Thomas] Hale Boggs' action regarding debt amendment
          -Wilbur D. Mills
          -Effects
          -Mills and House Ways and Means Committee
    -Boggs' action regarding education bill
          -George H. Mahon
    -Leadership

Railroad strike
      -Possible Congressional action
           -President’s view

Boeing
     -Ehrlichman's meetings
     -Future
     -Ford
     -Robert P. Griffin

Railroad strike
      -Senate Labor Committee vote
           -Wage increase
           -Prospects in House
      -Unions
     -Timing of action
     -Pending legislation

President's schedule
     -Ambassador's presentation of credentials
            -Togo

           -Interview with businessmen magazine editors
                 -Herbert G. Klein
                 -Time, Fortune, Barron's, Forbes
                 -Shultz's possible role
                 -President's role
                 -Peterson

           -H.R. (“Bob”) Haldeman

Butterfield left at an unknown time before 12:10 pm.

           -Interview with businessmen magazine editors
                 -Shultz's role
                 -Railroad strike
                 -Shultz's role
                 -Maurice H. Stans and Paul W. McCracken
                 -Peterson's role
                 -Shultz's role

Haldeman entered at an unknown time after 11:30 am.

                -Ground rules
                     -Klein
                     -Fortune editors
                     -Klein

Haldeman left at an unknown time before 12:10 pm.

                -Themes
                      -State of economy in 1969
                            -Administration efforts
                                  -Rates of inflation
           -Quadriad meeting, May 21, 1971
                -John B. Connally, McCracken, and Arthur F. Burns
                      -Trip to Italy
                -Haldeman
                -Previous meeting
                -Date
                -President's role
                -Agenda, purpose

Economy
    -Interest rates
          -Burns and the Federal Reserve Board
          -Connally's testimony to Abraham A. Ribicoff's committee
    -Domestic compared with international economy
          -Federal Reserve
    -Talking paper for President
    -Connally, McCracken, and Burn trip
          -Peterson
          -Connally
          -Burns
          -Peterson

Social Security
     -Congressional vote
           -Family Assistance Plan
           -President's statement
                 -Purpose
           -Republican vote
     -Cost-of-living escalator
           -Budget outlay in Fiscal Year 1973

Economy
    -Possible June budget meeting
          -Location
          -Shultz's conversation with Connally and McCracken
          -Date
          -Second quarter estimates
          -Date
                -President's schedule
                      -Tricia Nixon's wedding
    -Fiscal Year 1973 budget
          -John N. Mitchell
          -Importance for 1972 Republican platform
    -Property tax
          -Possible tax revision
                -Connally
                -Importance
                      -Value-added tax
                      -Compared with revenue-sharing and government reorganization

          -Revenue-sharing connection
                 -View among state and local governments
     -Possible tax revision
          -Mills
          -Importance in 1972
                 -The poor
                 -Middle America
Domestic issues
    -Food stamps
          -Importance
          -President's speeches
    -Blacks
          -President's reply to the Black Caucus
    -A notebook
          -Constituencies
    -Hunger program, Family Assistance Plan
          -Importance
    -Tax credits
          -Tuition tax credits
          -Faculty salary subsidies
                -Massachusetts Institute of Technology [MIT]
    -Budget and economics review
    -Tax revision
          -Connally
                -Influences
                      -Paul A. Volcker, Charls E. Walker
    -Budget ceilings
          -Review
                -1970 review
    -Space program
          -Moon shots
          -Ehrlichman's May 17, 1971 meeting with James C. Fletcher of National
                Aeronautics and Space Administration [NASA]
                -NASA's mission
                -Future meeting(s)
    -Saline water
          -Possible NASA role
          -President's review of option paper
          -Importance
                -Florida, Texas, California
          -Option paper

Economy
    -Housing starts [?]
    -Inflation figures
    -Consumer Price Index [CPI]
    -Interest rates
          -Mortgage money
                      -Housing
    -Railroad strikes
    -Status
    -International situation
          -Causes
          -Connally's statement
          -Milton Friedman's article "The Mark Crisis" in Newsweek
          -Volcker's statement to President
                 -Stock Market

     -Treasury Department
          -Volcker
                -”Establishment”
     -Burns
          -Position on gold
     -Currency values
          -Shultz’s view
          -Effect of US trade
                -Exports
                -Japanese yen
     -Stock market
          -Effect of railroad strike

Domestic issues
    -Racial violence
          -May 17, 1971 Bedford-Stuyvesant incident
                -Cause
                     -Police action
                     -Unemployment
          -Prospects
          -Possible action
          -Effects
          -Possible action
          -May 17, 1971 incident

                       -Cause
                             -Police action
                       -John V. Lindsay's actions
                 -1960's riots, 1971 Washington, D.C. demonstrations
                 -Riot control
                       -Law Enforcement Assistance Administration [LEAA]
                       -1967 Washington, D.C. riots
     President's schedule
           -Meeting with National Small Businessman of the Year

      International trade statistics
            -Stans' work
John N. Frank, Mrs. John N. Frank, Joniece Frank, Thomas S. Kleppe, and Peter M. Flanigan
entered at 12:10 pm; Oliver F. (“Ollie”) Atkins was present the beginning of the meeting.

     Greetings

Ehrlichman and Shultz left at 12:10 pm.

     Introductions

     Republicans

     Photo arrangements

     Award

     Frank's business

     California, Oklahoma

     Gifts
             -Cuff links
             -Bow pins

     Frank's business

     President's family
           -Thelma C. (Ryan) (“Pat”) Nixon
                 -Decoration of Oval Office
          -Julie Nixon Eisenhower

                 -Needlework

The Franks and Kleppe left at 12:15 pm.

     Small business

     Business magazine editors meeting [?]
                -McCracken, Shultz, Peterson, [Unintelligible name], James D. Hodgson,
                      Rogers C. B. Morton, Stans
          -President's possible role

Flanigan left at 12:16 pm.

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.

Tim says we're down on SST 45 to 53 in the Senate.
The only thing that could get Stephen Bush to pull that out is the very strong statement by Gold refuting Allen's previous estimate.
They're not willing to do that.
We've been through it yesterday and again all morning.
And we've been through all the numbers and so on.
They're hung up on the horns of the dilemma.
They've got to negotiate a new contract with the government because their old contract's cancelled.
If they make a strong statement to the Congress, they've pretty well sunk their negotiating position with the government to get more money out of the new deal.
And so he sits up there and we piece him through the thing line by line, item by item.
He comes out just about the same place we did.
But then he backs off and says, yes, but, and then we go through a whole song and dance on a new engine and about the production prototypes versus experimental airplanes and so on and so forth.
And then he says, no, the best I can do is to say that,
It's very difficult to estimate and so on and so forth, and he does not come out with a forthright number.
Now, as a practical matter, where we end up, even with his numbers, it is only 130 million over the loss of the government.
But we're not going to get a good, strong statement out of Boeing, as I read it.
Is that what you're reading?
That's certainly the fact.
Now Bill says, he asked a good strong statement by Boeing, we're crazy to go out on the line.
That we can only hurt ourselves by trying to do any more with the sound that we've already done.
And our only chance is to try and work on the House concretes, and to try and win this thing in conference.
Send a vote, come back to the House, and get a motion in the House to concur with the Senate.
There's a very good chance to pass the House in the present mood, and there doesn't seem to be anything we can do about it.
Absolutely safe if we're going.
On the other hand, if somehow that motion were to be given to the House, and it went to conference,
We might be able to do something with the House.
But even then, the Senate could reject it.
The Senate could reject it.
It's an endless, endless purge.
The Boeing people have got guys like George Mann who have been strong supporters.
They're furious.
They feel as though they've been made hell-hurts at that moment.
I saw that.
Well, we took them down the primrose path.
You've got another contract, though, do you understand?
Well, that has to go without saying.
They're finished.
We just, uh, they're finished.
That's too bad.
And the governor out there acted like an ass, too, so they're both finished.
On Lockheed, now, I think we'll sink them, too.
So what the effectiveness would be on Lockheed is a separate proposition.
I don't think they necessarily entertain together, uh,
I would think that we ought to make the try on Lockheed.
We've got to have somebody in this country who can build these damn things.
That's very good of you, boy.
Well, at the rate they're going on a thing like this, we finally went into a discussion after you left, George, where he said, well, if all you're going to do is build this experimental plane, we shouldn't have to share any of the costs.
And I said, well, gee, I'm not embarrassed to ask you to share the cost because you guys get all the follow-ups.
We pay for all the research and development and all the techniques, all the tooling up and everything.
And then you start to build production models.
And you don't pay the government back anything.
I said, it just stands to reason that you should share the cost.
The whole aircraft industry, 707, 747, is on our bill.
Yeah.
on military research and development.
That's the first thing.
Well, anyway, I'm just sorry we did it to Ford.
That's all.
We really let him down.
Well, I would like to interview him.
I don't know.
I'd like to sit down with him and talk this through so that he understands what happened.
I want him to know what he did because he really went to battle.
I understand.
He went to Bat John.
So if you would spend a little time with Ford.
I'm just concerned about our guys in the house, turning around, trying to do their best.
I don't think they're confused about this.
I think they all recognize that Alan
went off away from the rest of us on this.
It's too bad, Colin.
It's a decent follow-up on what the Christy got into here.
They're very stiff-necked on this.
And I think, I think really what it is... What if we deny them now?
I'm going to deny them, understand?
I don't know.
We've got to get them over with.
Oh, no, no, no, no.
Wait a minute.
Wait a minute.
Oh, we've got to try that tanker thing.
We're working on that 47 tanker.
Yeah, which doesn't seem to be too possible anyway.
Just forget it.
Forget it.
A company that shows this little concern about the national understanding, put it down.
There is going to be no further negotiation going about any of those contracts.
Is that clear?
Absolutely nothing.
We may be able to give that signal to him very strongly.
When he left, he said he wanted to come back and talk to me about a hydrofoil that they're building.
That's another thing we've been working on.
Since a couple of months ago, we've been trying to get it out of the way.
Well, let me give him that signal this afternoon when he comes back.
Maybe that will wake him up on this.
That's right.
Well, we just, frankly, this is the way we want to play.
We've got to have companies that are willing to stick to the next stop.
Put the interests of the country up a little here.
You want to play your little Mickey Mouse game, be a little mini-producer?
Not the Hockey Club, not the other.
They want to play.
That's where it's going to be played.
It's kind of new to hear a little sort of off-the-record talk to the leaders of the aerospace industry down in Williamsburg tomorrow night.
They have an annual meeting.
Although they're going down.
You know, it's a hell of a time to go and speak to anybody, but maybe a little tough talk down there would be too bad.
You know, if I ever saw, to me, I guess,
Henry has a theory that he thinks of, he has a theory that somebody is a very serious operator, and then after that he's just the same.
I've never seen such a thing before at all.
It used to be as strong as God.
and say, well, the Senate, the Senate was the one that called the strike.
For Christ's sakes, what the hell is he talking about?
You know what I mean?
Here they are, the goddamn country's down on the strike, and the United States senators are spartan around over Asia.
Sure, they've got a right to do that, but there is...
There is no obligation on the part of the Senate.
Suppose we had to... suppose we were attacked.
Suppose that the... suppose that the... was in force.
What the hell, we gotta wait?
Oh, we can't.
We promised the Senate we wouldn't have a vote on Tuesday, so we wait till Wednesday.
You know, part of the background... Oh, I'm telling you, we've got a real bunch of clowns up there.
But... but... Dominion of OPM.
He's...
I've noticed him recently, just apparently...
You know, uh, Boggs forced me to move my house.
Uh, uh, it's anywhere around.
Boggs promised there would be no room for my house.
And, uh, Wilbur Mills ran over it.
and brought something off their boat.
I can't remember what it was.
Today?
No, this was two months ago.
Oh, yeah.
And it's got the box in terrible shape with a number of the heavy people in the house who were away.
Yeah.
And who wanted to be on record.
I guess it was Social Security.
It was... Something they locked up on the floor, I guess.
And the ability to...
of $10 billion being available for higher interest rates.
And Mills brought that out of the Ways and Means Committee.
And Boggs decided to go against his chairman.
And Mills is really furious.
And then a little bit later, he did the same thing to George May on an appropriations bill.
He mentioned that education bill.
The man was right with us on that one.
The leadership research, the appropriations are ways of peace.
This is the Cardinal's Senate now.
That's what the next one is.
But on the other hand, on the rail strike, for Christ's sake, I hope these guys at least had the guts to go out and talk firmly on that.
I don't know what we've done with our Boeing friends.
Well, with Boeing, it's done.
It's done.
And then they come back and it's cold ice.
Borden and Griffin are very tough on that sort of thing.
They've both done well.
And Borden is coming forward for years.
Borden's got a problem because of that election.
I understand that.
I'm sorry he has to face up to some of these topics.
But he's all right.
The Senate Labor Committee voted out 13 to 1 just a little while ago.
October 1st move, the one that I thought that they would when I was talking to the leadership with an increase in wages.
And my guess is that that's what will go in the House.
And we're trying to see just how fast it'll go.
And if it isn't going fast enough, then we'll come back to you with a suggestion for maybe bringing the union fee.
That is what we try to get them to do voluntarily.
If I get cast enough, do you just mark that as enough?
It's right on the edge of being fast enough.
So you ought to get this thing done today.
Well, is there anything we can do this afternoon?
I'll cancel anything.
I'll just have to be some goddamn ambassadors.
Credentials.
All right, we're from countries.
Togo.
Togo is what you call a shirt, isn't it?
Is that a country?
The way they spell it is.
Her client got a little mixed up, got a group of people, and I was not expecting, I told her just to get business magazine, business magazine editors, and I had a business editor in my guy, and a time following, fortune following, all of them, we've all seen, and so forth and so on.
And at the end of the day, he's got Barron's and three or four other magazines, Barron's, Forbes,
and so forth, but it's installed.
Anyway, I'm going to meet them at 5 o'clock today, and, uh, the, uh... Oh, I'm sorry.
I'm not going to have a hold.
I'm going to have a call.
I'd like for you to be there.
I don't want to talk too much, you know what I mean?
I'll, uh, I don't want to ask you questions.
I'll just take the...
I'm gonna, I'm gonna try to focus on eating the Peterson thing.
I'm sorry, I was trying to get Bob, and I ran out of help, I was just saying.
And so you'll be here, and you can, I don't think you're able to drive with me.
I don't know what the hell I'm saying, but I think that we should, I'll let you sort of give a little of the, you know, on the economy and so forth.
Now there's another reason I'm doing that.
I want to knock on his crap, but
Fortune 100, nice to meet you, sir.
Nice to meet you, sir.
And you'll be the only man here.
I'm not going to have stands or crack at these other people.
None of them are going to have anything anyway.
So you and I will be prepared to talk about Peterson.
I had a shot of him at night.
His old stands, his old crack.
I'm going to be there.
I'm only meeting with him on the outside.
And, uh... Back in the, uh...
of where we are, where we're going, where we think we are, and so forth.
We're not going to change the mind.
We are activists.
But you know one thing that I'm concerned about?
Oh, I wanted to tell you about the...
I want to find out clearly what I... My mind is a tool.
I don't think I've gone through it very clearly.
You see, what I mean is that I'm not giving these sons of bitches an interview.
A client who did go out and they were getting
See, that wasn't, he didn't tell them that, did he?
It was not supposed to happen.
It's never been set as anything except a completely off-the-record meeting.
It's a complete off-the-record meeting, just like I had with the Fortunate.
You know what I mean?
I want you to get a decline and say it's off-the-record now.
It's not in the evening.
I don't care what the hell they do with that, but I cannot invite any selected group like this.
Otherwise, I'll have to be prepared to be quoted about everything.
This is an off-the-record background.
Get a session just to chat a little with the president.
Get his thing or his thing.
But you didn't really want to tell mine that's what it is, right?
And if it's not going to be that, the meeting will not be held.
Fair enough.
I think it's a good thing to hit with that, uh,
The economy was in turmoil when you came in.
And the basic objective is to try to get it straightened out and onto a course that can be sustained over a long period of time.
And that's what we have to think about, the interests of the economy this year, next year, the year after that, the year after that.
That's the orientation we have to take.
Otherwise, we just get ourselves into that kind of proposition.
Yeah.
It was saving the term I was supposed to take a bite of.
You see, the difficulty is the high rates of inflation came after.
Well, they're sophisticated enough to know.
They were there.
All of the fire burned.
The lid just hadn't blown off yet.
And we came in there.
Did you suggest a quagmire?
Yes, sir, I did suggest that.
The Connelly, McCracken, and Burns are all heading for you.
They would like some marching orders and general orientation.
And then the last discussion we had was dominated by the international thing.
And the feeling is we should have a little assessment on the dimension.
I told Paul.
Friday afternoon, and if you could get a little sort of agenda so that we could host those meetings.
I'll call, I'll run it, but I need to know what the hell to focus on.
I need to come in with a stronger agenda in the meeting itself.
that these are matters we want to discuss.
Tell them in advance.
And they can raise it, and they can go to the order of the conclusion.
I think that's a good idea.
Not too long.
They say the purpose of this is to say, now one thing, for example, is that I want this.
But you think we ought to discuss this same interest rate problem?
It's a, what is this?
What's all this?
It's, aren't there, we're putting out this business, crime rates ought to be raised, and so forth.
Is that coming from the Fed?
I don't believe it is, although the Fed, I think, feels that way.
Not that the prime rate oughtn't to be raised, but they think that interest rates in general, they're worried about the differential in interest rates and its effect on the future of money.
From the standpoint of the economy, and John hit it pretty hard in his testimony yesterday before Rupert thought that, again, the theme that the domestic economy comes first,
And that's hard for it to get across to the Fed.
And I think one of the points to bear in mind for this meeting is these three fellows are going over there for this international meeting.
And I suppose any person gets into an atmosphere and tends to be weirded out by the fear in that atmosphere.
And they've got to stand up for themselves.
Give me a little talking paper of what you did.
In other words, just don't make it fancy.
It's not in the history, but just, you know, maybe all I need is a few rough notes
I can ride it for you.
Is there any advantage to Pete Peterson going on that trip?
There's an element.
Right.
John is very tough, too.
Yeah.
Arthur's very weak on this kind of thing.
Well, they were going with the banking group.
He's very much thousands, greats of the bankers, the central bankers as he calls them, because he's like, you know what I mean, and also an ego thing.
They work him over like he doesn't know what's his, because it hits him.
Peterson, they'll never work over that one.
He's too tough, and also he has his own ideas in mind, and then those thrust forward.
What we've got to do is we've got to sell that.
He would be in a position to come back from that, seeking authority on behalf of the president's position.
Let's try it.
It's fine with me.
But now, getting on to this, I see we have to kick on Social Security again.
They switched the vote.
They switched the vote.
We jumped right in with a statement saying, hey, this is wonderful.
Because we love these old posts.
Because it will also help us get through behind the assistance.
Well, no.
It was inevitable, and we decided to drag the race out of it.
And what we tried to do with your statement was to get on the side of the old posts and say, this is anticipating that these people are going to have problems in a short time, and we're all for them, and it's the kind of thing that our cost of living increased.
What did that do to our 10 Republicans that stood against it?
probably made us unhappy.
At the same time, it was just, you know, it was crazy politics for us to have tried to... Now we're postured in favor of which?
The thing that we have tried to maintain, though, is this cost of living idea and the importance of
The, uh, old folks, uh, maybe some of the log-out costs would be a good thing.
Ah, they might.
It could well happen.
The, uh, in terms of our budget figuring, if I can, uh, uh, suggest that, it's another $2 billion in fiscal 73, if that, that does.
What I would like to do, if it's agreeable to you, is, is, uh,
to get our first trip together by the middle of June and to see if we couldn't get a couple of days out of this particular, out of Washington, sometime in that vicinity, and have a general discussion on all this.
To get our Christmas up and free.
At the same time, we talked about this with Connolly and McCracken yesterday, that that's a time when we ought to have a very thoroughgoing, searching examination of what's going on in the economy, and we ought to have an attitude of questioning everything.
What date?
Well, the middle of June, or in that vicinity.
You don't want to go to the Senate?
You don't want to go to the Senate?
Well, the thing is that we will have, by that time, we'll have the second quarter preliminary estimates.
And we'll have the first kind of way they're going to be together.
The second quarter has still got 15 days to run, right?
They used the last month anyway.
We will have a figure available to us that will be within probably a couple of billion of what they'll have at the time.
I will not be able to do it.
John, I'm sure you'll be sure to go ahead and do it.
Well, to have the right numbers to get it.
Well, the following weekend would be the 19th.
We sure have our stuff in hand.
I think, John, I've talked a little bit about
the whole fiscal 73 budget picture with John Mitchell.
And the sense in which the fiscal 73 budget is by way of being a platform, really, is because it's programmed to put forth in its detail.
So, and he's very much interested in that.
I think, much as I think we really ought to move
We don't have anything on the meeting platform that we haven't even grabbed.
It's simple that I think it would be more effective than figuring that 75% of the people of this country, or 70% of the people of this country, approximately, do live with this property tax issue.
There's no way we can grab that without a tax revision.
And that's why I still come back to the necessity for the Treasury
I want him to be ready on something on that.
Do you know what I mean?
That's why it may be necessary for two reasons.
Money or anything else.
But you call it what you want.
It may be necessary because we need the money on it.
It may also be necessary so that we can have a tax revision.
And a tax revision in terms of raising the property tax.
There is nothing
There's a little discussion around that sense on the revenue sharing connecting it with the property tax in the sense that at least some people will take it that way and have it.
and relieve taxes.
I think if we can have a clear-cut tax issue, which Mills will never go forward with, we will run on that tax issue, a revision of the tax system, in my opinion, would be the best political solution I can say.
A revision of the tax system.
And go for our constituency.
In other words, the political standpoint, taking the poor off the tax rolls and all that sort of thing is all very well, but it lost its focus.
It's a disastrous political issue.
There's a lot of...
It's right, but it's wrong.
It's just a disaster politically.
Maybe we ought to talk a minute about the reply to the black protest.
I signed it this Saturday.
That notebook has...
all kinds of answers in there to all kinds of questions to the wrong constituency.
It's a very long, it's a very detailed job.
I understand the need for that job.
assistance, I'm simply saying that none of them are worth a damn politically.
They're dynamite politically.
And so we've got to get, we've got to get, let a few people go out and blab around a little about that.
If we think of votes, we have got to get on a different constituency.
Well, we'll be in shape also around that time to talk to you about upcoming
Well, for example, I really want to take a whack at the whole tax scheme, you know, this deduction or whatever you want, or tax credits or tuition.
It costs money, but for Christ's sakes, let's put some things in that help us.
They come in here and say, let's put in $480 more to subsidize the salaries of people at MIT.
Hell, that's fine.
That loses us folks.
And the more they get, the more they oppose us.
So for Christ's sakes, why don't we do something for one of our own people now.
We'll have a need for some additional time.
This budget and economic review is a sort of a foundation, right, for getting it to the end.
Think about some of the others.
But let's get Connolly.
I'm going to see Connolly who headed the sweep myself, and I'm going to hit him hard and attach him.
See, what happens when any secretary of the Treasury comes over there and becomes engulfed by that bureaucracy?
So, Connolly, here's the voters' problems, and here's the blockers' press, and so forth.
It's really a small company doing that.
I think there would be, at least from my standpoint, in trying to get guidance for this budget season, tremendous benefit from a fairly lengthy kind of considered going over of this would be similar to what we did in July or so last year, a little earlier.
and it helped us all the way through the season.
Sure, sure.
Did you get those moon shots?
Well, we're working on it.
We had Fletcher yesterday, and he is very susceptible to the suggestion of converting his agency to domestic province.
He has done some of this kind of work in his other life, and so he's right away going, I have three different incarnations of one.
He's well-to-do with NASA now.
And so we told him we could talk to him a little later on after you had had a chance to see the option paper on the saving water business.
And that's it now.
And some people don't think that's much of a playoff issue.
I think it is.
You can see it both ways in this paper, I think.
And I don't look at it solely as political.
I think it's an enormous, I do think it's enormously important, though it depends on where you are and where's the dam here.
You go down to Florida where people can't water their lawns.
You go to Texas where cattle are starving and having to sell off their reed stock.
You go to California.
People understand.
It's a local issue, but it's tremendously important.
I'll shoot this paper to you.
It's not terribly long, and it just fits the mountaintops.
What is the, how is the, George, what is the, on the economic side, how do you see the picture in a moment now?
With our, with the, I understand the inflation,
Not encouraging.
No, although we do have the consumer's price index first quarter was very satisfactory.
We'll be getting another reading on that today or tomorrow.
We'll get that CPI number, so we'll see where we're standing on that.
The stats have come in another million times, and that sustains that rate.
And so that's good.
I am indicating that that couldn't be sustained unless we did something about interest rates.
I'm very concerned about that.
And if interest rates start to rise and we begin to see a shutting off of this mortgage money, there are some programs, one in particular, that we didn't fund very heavily in the budget because it's essentially an interest subsidy.
that only operates when interest rates are high.
Interest rates were down below that, so we sort of moved.
If interest rates start to go up above that level, we can put a fair amount of money into that.
And so I think we can keep the housing thing going.
And we are working on that.
Well, the main thing is this.
I know that you follow these things like railroad strikes.
and so forth.
And of course, the general direction here, the general direction is sort of rough.
It's fundamentally sound.
I still think, as far as the international movement is concerned, a hell of a lot of that is due to these international gamblers and is overblown.
I really feel that.
Do you agree with that?
Yes, I completely agree with that.
And I think they talk a lot about it.
dollars exactly right.
Don't you agree?
I agree.
Milton Friedman wrote a clever little column, which he, and a clever part of it is the title.
And the title is The Mark Crisis.
You can see that.
It's a big Q&A on, in Newsweek this time, on what really took place here.
And he said, to the dollar, it's a German mark.
And then he tells why.
It's words on silver.
On inflation.
Tell us the program.
It's a pickle that the Germans got in.
He says, this is all about the German mark.
This isn't about the American mark.
But you see, all of our people here, Volker says.
Reflecting, Volker was just way off base in here when he told you the mark was going to be 300 points.
Also, the point is, Volker, one of the reasons that I would like to see a little shift around there is that George, Volker is hard.
of the treasury establishment that develops special drawing rights and two-tier and all that sort of stuff.
Now, maybe it's right, maybe it's wrong.
The main point is they have the best interest in sitting in that position.
If everything goes wrong, they blame us.
God damn it, that's, I have no confidence in them.
None.
And Art, frankly, doesn't know what the hell he's talking about in this field.
I can see that.
I don't think he does.
Because men, you know, I don't think so.
Because he's been on all sides of it.
He gets to come in and change this and that and the other thing.
And then when you finally get an argument, what did you do?
Well, we ought to see.
We ought to see.
What is it?
Buy gold?
No.
Raise the price of gold.
That's our reverse answer.
Maybe he's right.
Maybe he is right.
He is right.
You don't think he is, do you?
I think that we are well off to have these currencies floating and changing the relative values of the currencies.
It's going to be good for our exports and help restrict imports.
It's not a crisis for us.
If we could get the end of re-value, we'd be held a lot better off.
You know, it's interesting how the effect of this railroad has had on the stock market.
You know, it was simply a question of no buyer, not a hell of a lot of sellers.
The 14, 15 got it, but it does show how it works.
Not so bad.
One little indicator on the domestic side, they had a riot in Bedford-Stuyvesant last night.
And it resulted from a shooting of a criminal by a policeman.
We're undoubtedly going to see more racial violence this summer than we had last year.
Unemployment is part of it.
But we've just been a long time since one.
And I think that they're beginning to forget how it hurts.
And just everything that I can find out, and I'm trying to find out more, but everything that I can find out indicates that this may be a tough summer.
So now, I think we ought to just think through what we want to have happen in the course of this whole business.
And quite accordingly, well, maybe it's a good thing to have some measure of civil disturbance in that area.
I don't know.
But in terms of political long run, what are the consequences of this?
From the standpoint of the nation, it's a very bad thing, but there's not a whole lot you can do to prevent it.
Absolutely.
So then if we get into the northern areas, but I just want to drop this scene.
I think it's something we ought to talk about to serve in our leisure in terms of where we want to move.
I suppose it's a dead-line lesson for the riots.
No, no.
See, this one's very clearly associated with
a police action by the New York City Police.
And Lindsay ran into the police in a saturated area and damped it off.
There's been a lot of riot training.
It's a far different country than it was when we had the riot training.
Maybe a lot of people learned from the demonstration here.
And of course, LEAA has been financing riot control instructions.
in the last two and a half years, so that this riot that occurred here in 67 literally couldn't happen now in the sense of this riot.
But it's a, it's a time.
That's a big time for all businessmen of the year now.
Well, we've made money.
We've made a hell of a lot.
We have one, we have an issue going on, I guess, an issue having to do with international trade statistics.
Murray stands have been
are working on this for some time.
And we have had a fairly thorough review now.
Good to have you.
Yeah, I have a revision coming up over here.
Yes, we have one.
John, this is Mark Lee.
Yes.
Good to see you.
Good to see you.
I'm George.
Mr. President.
Yes, how are you?
I'm John.
John, right.
It's a small time of the year.
I see you're healthy.
I see you're fine.
This is Frank.
How are you?
This is Frank.
And your daughter, Jenny.
How are you?
Very nice.
And you've got business with the customers in 40 states, right?
50, my friend.
We've got 40 states.
That was great.
I had the great honor of designing a copy of that album with my mother, Katie.
Republicans might have trusted that.
Do you understand what I'm saying?
Yes, sir.
And I was designing that, so...
And, uh... Hey, Nancy.
Tulsa.
Wait a minute.
When we met you in Oklahoma City, weren't you right?
Uh, just back here.
What year was that?
Well, I don't know.
They back here.
Ha!
Everybody's got a picture here, so... You missed that, right?
I just want to say two things about these folks.
You didn't miss that.
All right.
You missed this.
How'd you do it?
How'd you order it?
What is that now?
Now, couldn't we tremendously appreciate this kind of genius?
That's the first thing.
And the second thing is, that with a man in a family like this, being the national smallest man in the world, this is proven to be something great about our system.
I appreciate it, sir.
I appreciate it.
Now, let's get out of here.
Don't you get out of here.
Don't you get out of here.
They don't need you in here, so I'm just glad to have you in here.
Oh, thank you very much.
You're, uh, you're, uh, you were off in the business, too?
Yes, quite a while ago.
Well, you know, I think they're going to give you a degree.
When they get an MD degree, they're going to come with a doctor of mine.
That's the way it's done.
I understand that way.
I've seen the, uh, I've seen it on California, of course, where they have a few people that make this sort of thing.
First, you only want to know if they're home.
I wrote four times getting there, too.
Now, this is going to do it all right.
That's the way it should be.
Mr. Brandon, the Lord bless you.
I want to give you a little message.
Oh, let's see.
We're going to give you a pair of presidential couplets.
Oh, that I appreciate.
That's the seal.
And I'll come last year, sir.
So you can't do that.
And you'll get the same thing, sir.
Oh.
This is only for sport people.
There, you get that.
Thank you, sir.
How do you like this, Paul?
Well, the next thing you do is you get out.
It's pretty nice that you understand all that stuff.
That's very good.
Whichever way, you have many people writing about it.
You just made it.
Well, we're glad to see you and wish you well.
Well, that means a great deal, and I just hope your business is good, and I'm sure you have a fine customer here.
We're going to get you a great life.
That is your reason.
Well, thank you.
Thank you.
Yeah, well, I'll tell her that.
She decorated this room.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
She did.
Thank you, Peter.
They come in every weekend.
The first group we brought in here didn't want to try this line that was stiff.
We recognized it wasn't very attractive.
We didn't want to give it to them.
But I think if they're here in an hour, we can just walk through that room.
We can force the pressure on them.
We can continue the pressure on these dead hands, everybody cuts their wrists, etc.
But we keep telling the people at that time, I'm sorry, but I'd like to recommend things to the members of the community that are tracking you.
But nevertheless, what is that is just a question.
Right.
What do you have on that day?
No, we have again on Thursday, and they are the best we have.
And they are the, they're the worst we've heard.
They're sitting there and they are grossed over.
And Paul will talk to them.
George will talk to them.
Peterson will talk to them.
And we should just walk with the chicken.
What is it, gentlemen?
I'm glad you're here.
We want to hear what you have to say.
It's good to see you.
Thank you for being out.
We're going to let you know real quick if we get the...
Go ahead.
Almost always, a graphic was good.
Either Shultz or Peterson, and Peterson
strikes a note with him, off the hammer, and, uh, right, Hodgson stands, does three of the, whatever you have, one, two, on a day when I happen to be free, I'll go, I'll pop through, you know, but that, you just do it on a handshake deal, that's fine.
I, I appreciate it.
Thank you very much.