Conversation 606-002

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It's better to get out of the car, excuse me.

All right.

I read that.

All right, all right, all right.

Well, I'm sure it's a tie and play, and the gun's true to the eye, isn't it?

Yeah, it's true to the eye.

It's better to figure out what the hell you're sure about.

All right, how are you?

Fine, how are you?

So comfortable.

You know, I was stuck in New York last night, or this morning, or this morning.

That's the ball.

And the plane was going to bring Patricia back to New York.

Brought me in, going back to Patricia.

Oh, is that right?

Well, yeah.

But you got back all right.

I'm running it this morning.

Patricia was in New York.

She was in New York.

I met a little boss in Boston.

She was doing some shopping.

Oh, I see, I see.

She's up at the Innsbruck dinner dinner.

You got her.

She's up at the Innsbruck dinner

I don't know what's happening.

I'm not asking for information.

All my friends in Texas say McCollum is

George Bush should be working in Texas.

I got it.

There was an important question thrown at me.

Now, we'll not vote for Taiwan, I guess.

I'm going to spell it out.

The vote, the key vote, as far as the very lady from the back was from, I said, I'm going to spell it out, 75-30.

We were, we were, we were in the 30th, of course.

If they didn't have to get it back, that's an award.

Because the other side of that, too, is if they bring it back, then they can't get it back.

those 14 million people were cut off.

Have you ever seen them over here?

Well, that's a great distinction between one of the two countries, New Orleans and the United States.

And they're lucky they don't have a problem with the network.

You know, this man in your right, Greg, those who were dancing, they moved next to, yes, South Africa.

Well, that's why I told Mark there's a matter

I don't know what you're talking about.

They told South Africa, certain Portugal would be a prime candidate to throw them out.

And you see, what will happen is all these terrorists from Africa will advance against South Africa and Portugal.

And all they need is a few Asian countries to take on them.

The Arabs need to serve noticeably.

That's right.

And they can never again bring up the important question.

Well, if Israel can easily be kicked out, I mean, there's no question about that.

Because we're, frankly, we can conquer Israel's own land.

Presence of orders.

So we hold a lot of power with Israel.

Israel has other assets that are going to be with us.

But on the other hand, the Arabs and the blacks, they're going to get all of Israel on their hands.

But at least our president, that's the only way we were able to sell this to people that were going to vote for Pete King.

And I don't know what you were supposed to say.

We're going to take a country out.

So we understand you're bringing that in.

You should take one out.

You just, you can take George, you can take all that.

He's going to get out there.

I don't know how old he wants us to be, but now he's getting the hell out because he's sitting there.

He's sitting there.

I'm just glad we don't have to support it anymore.

It's going to affect a lot of them, Mark.

A lot of them.

My example, what is it?

The ILO is my example of the worst and least productive bureaucracy in the world.

And you have to know that I've done many things.

I went there once individually, and I went there

It took three days to find that out.

But it's a lot of things.

Apparently, whoever was around, they were very tempted.

It must have taken them over a year, but he kind of blessed him out of the wall.

He was, of course, one of the few things.

Well, we didn't support him in public, but he just wants us to cover him.

I'd like to break this meeting into two parts.

The first part is Steve Peterson.

because they have a special interest in it, and that's on the international side.

And so we will, I'd like to spend one, particularly here, two, before John takes off on his trip, so that he can answer any opinions about what he's saying on this.

And then the second part, we will go to the domestic situation, on that we will have

almost monetary policy, so to speak.

So that way we can continue.

Starting on the international side, John, as you know, is going to be going to, well, as far as we're concerned, they may or may not be going to be in Japan.

But he will also be going to be

where this subject actually will be created in Saigon.

And these, in terms of ideas as to what they may not be, not of course compared to this one, but it will be a subject of very intensive negotiations.

So I think it would be helpful

I've sat with everybody here, and I haven't had the structure in any way.

Would you say God showed you that it would be well to hear from Pete?

I'd say that's sort of Pete who's done, as you know, a really good deal of work in the room and the work in the desk.

And I think it's useful to hear that.

Do you have anything you want to add, Paul?

The main purpose here is to...

to give us a feel of not just the magic that's on the Asian side, but the whole general picture.

So, Pete, I know you and Paris have already prepared me, but why don't you just pass it to me?

And also, Guy, you strongly urged that our discussion in this respect be held by you.

We just don't want to have a lot of speculation about what we need to discuss, because it will start

I think the most important question is timing and how urgently we feel we should come to a solution on the international side.

We've made great progress since August 15th.

I'm amused to see now what our Japanese friends think.

nearly 9% on the N, and the real issue now is how much, not whether.

Are they up to 8.6 or some such number that we can't?

Nine is very close.

I think it's the second that we have to go over.

The second major piece of progress that we can kind of agree on is 15.

Because we've been trying to have a little traffic, haven't we?

I don't know.

The second thing I think that's been the case since pre-office were a very important problem that we've been talking about in this country about whether we're encouraging our enemies to turn and so forth.

I think that John Connolly and John Connolly's efforts in the Instruction Act or Congress and the business community and so forth.

So I think now, if you were to go out and get a survey among a lot of defending leaders,

credibility in our firmness and equal treatment.

We're just way ahead of where we were in August 2009.

On the other hand, there are forces, I think, that suggest to me, at least, that we may, at the time now, adopt the option of phony.

We've gotten their attention.

and no experience.

But if we delay much longer, we may be creating problems in the economy.

So at least my opinion is the time is now to get moving vigorously on specific negotiations.

Where I know, Mr. President, I'm not only talking to foreigners, but it may surprise you, I don't know, but the rest of these men are many.

Many businessmen who, let's say in September and October, were feeling that

It was great internationally.

We're now calling, urging, let's see if we can't get this set up.

It's uncertain in the stock market.

We're early in it, we're early going.

So at least one major issue is do we, do we think we ought to push figures today?

My only view is the time is now to get very specific.

And so John and I are in Japan.

We're ready for a package in Canada.

John and I just had five seconds a few weeks in Canada.

What we want from Canada.

There's widespread agreement on that.

And on Europe, you recall your new SDR.

I think it's very well equipped to take up that negotiation on the trade side.

So I think in general we think we're ready to go, and there's something to be said for moving figures.

You should know about a very specific problem with the French.

Again, John, you and I have a chance to talk about this, but my sense of it is that we've got some problems with him where our leaders is not what I wish it were, but who are continuing to cause us problems.

Tom had sent a special messenger to see me, an old friend of mine who was his press secretary, saying that they couldn't stand in the way of our some kind of devaluation.

There were no circumstances where they were devaluing.

The surtax, unfortunately, only affects 4% of their exports.

It affects way over that in Germany, 9 or 10, plus this investment tax credit.

It affects some of our friends in Latin America, Mexico, you know, 40, 50% of other countries.

So France can kind of sit there and not spend much less.

Frankly, the more I get into this, who spent three hours with the top community officials on Friday, the clearer it becomes that France, at some magnanimity level, enjoys this German-France relationship.

Because you remember with their agriculture, which is so important, that flow hurts Germany and helps France.

And finally, it shows Gaul's proclivity about this kind of raised hell.

I was thinking that

in John's absence, maybe sit down with Henry and others and say what leverage we have on the French might be, you know, a useful exercise.

But because if they will not revet at all, and they say they won't, then John, obviously, either the whole average comes down to how much we can revet, or we kind of have to look at, whether we'll look at the Goldberg, and the French, Mr. President, are at the heart of this problem, in my opinion.

You've got the gold price question.

Many people saying that if you want to get the exchange rate alignment that we're looking for, and if the French won't do anything, then that brings the Germans way down and the Japanese way down and so forth.

Our decision has been we won't revalue, as you know.

I think it's premature not to decide until John's made the rounds.

There may be a way we should consider doing that if it's necessary, much less a legal game issue.

And there's a route that John's lawyers have felt threatened to deal with some of the people John is working on, where the IMF might be able to let them deal with it after it, but the IMF may have a decision not.

Convertibility is a very important issue.

These countries obviously would like us to convert during this period.

I'm speaking for myself.

I'm very concerned about getting on that, because it takes pressure on food to make the exchange rates as big as it's got to be, or they know they're going to be covered.

And it compromises us on what I think is the most important objective of all, which is monetary reform.

I mean, if we give that away, then we've given away something very important.

But we're going to be under great pressure, I'm sure,

during this interim period, what we call phase one, to convert in some way.

Most of us think we should not do it, or do it in a better, even, way.

The LDCs, I think, in this brief summary, are an issue we have to be thinking about over the next few.

We have the problem, Mr. President, where Mexico affects 52% of their exports, versus the poor, for instance, 36% of Taiwan, 41% of Korea.

And the irony of this is, if you step back and look at it, we don't really have a trade problem with them.

I mean, we have anything that's surplus.

But we don't have an exchange rate problem with them because they're, you know, flawless.

We don't have a legal problem with lifting them because the precedent has been set for, you know, through general exterior preferences and so forth to discriminate in favor of the LDCs.

Now, if you want a current opinion, the current opinion of most of us is we should not lift it now, because it may look as though we're yielding on the search action in general, but that we should make a quick round, you know, make it a serious effort to negotiate.

If we're successful, obviously, we cannot lift it with everybody else.

If we're successful with some,

And we decided to lift the surtax differentially.

You know, for some countries, but not others, we could obviously lift it at that time.

But I think the prevailing view is to do it right now is not right.

But maybe in 45 to 60 to 90 days, we might take a look at lifting from surtax.

This leaves us with the issue of what happens if we decide not to change the price of gold?

What happens if the French

or what happens if we can't negotiate a good deal.

Now, one alternative there, as you know, is to not convert and lift the surtax for those countries who cooperate.

Let's assume, for example, China's good luck in Japan and good luck in Canada, but we assume anywhere with the Europeans.

One of the scenarios is to lift the surtax for those countries for whom we made a good deal.

The problem with that, of course, it has some advantages, but the problem is that it probably means a straight-out confrontation with Europe.

And, you know, we have to subject it to foreign policy risks.

Something came out of the E.C.

that you should know about.

They are planning some meetings, perhaps, you know, early next year of all the heads of the French government, you know, the European governments.

I've tried and probed everywhere I could to find out why.

They say there are going to be two issues that they hope to get resolved.

One, to move toward monetary block much sooner than they otherwise would have.

B, to formulate proposals on burden sharing and defense with a new twist, at least that John and I have now heard discussed, and the new twist is.

And instead of talking about defense, they say we must talk about defense and AA together, because if you want to talk about burden-sharing, then we'd better talk about all burden-sharing.

A hint, and I don't know whether I'm reading more into this than I should, I think that they are looking at the division later as they put it on defense.

And several of them said the old idea that when Americans were to Europeans is...

you know, kind of going out the window with salt and, you know, the Berlin Agreement and so forth.

And maybe we'll be talking about that.

I took it from that, Jim.

They may be thinking about suggesting maybe as part of their settlement fewer U.S. troops.

I don't know.

But it, you know, sounded like that was the direction they were going.

Now, who said it?

It's just as the European community, almost the European community vice presidents of agriculture and...

economics and social economics about his son leaving this year.

As far as the next steps, as it is, it may have been under the age that I count all of their investments.

And some of it's pretty solid investments.

And they probably had made the calculation.

I haven't made it, but this was also that meeting.

That was my interpretation of the making of the calculation.

It came out looking good.

As far as the next question, I have a question too.

Before we go from here, John has the coordinating group's logo.

There's 95% agreement on Japan, at least what we think exists there.

Canada has been very well agreed to.

Here, our formulation, Mr. President, is to try to get a few third-term concessions on the trade side to really focus there on trying to do something about agriculture and really enter in some serious negotiations.

Our reasoning there is that, politically, in this country,

If we ever lose that block, either in 72 or for causing a trade legislation, it would later go in the way they have.

We're out of business.

And we think if we had number one priority in America, it would be to do something about that particular problem.

So the thought would be to build our idea that represents some of those trade negotiations.

I think we're ready to go if it comes to agreement.

And you're in agreement with that?

On the trade side, on the, with Europe, on the German offset agreement, which everybody's agreed to, you know, on the military, it's just that more than we agreed to on the offset side.

It's about another 80 men in genre or something like that.

Because they should have agreed to it, or if they agreed to it, we have agreed to that.

Well...

they want to agree with 914 million

And they wanted to compromise that, and I said, this is ridiculous.

We ought to be talking about a bid tonight.

We ought to be going up instead of coming down.

We've come down once, and they said, now we're coming down again, and they're still saying, well, let's make it nine.

So all important things, at least I agreed to it.

I don't want to be in a position to agree to that.

All right.

That doesn't even make any difference.

I still agree to it.

On the trade matter, I wish what you say were realistic.

I don't think it's realistic.

I'm sure we need to increase our export.

We need to increase our export of more and more.

It's important to our agriculture and it's important to us politically.

from a European point of view, they've got their political problems, and they've got to protect their agriculture, and they've got to be very stubborn about this.

Now, the point of my remark is that we don't have a chance with Europeans in agriculture unless they're willing to pay a very high price for it, and I'm not even sure of that.

And I'm talking here about short-term concessions because I agree with you.

I'm talking about parity in the negotiation.

Yeah, but if it's going to be, you see, if it's going to be of any use for 1972, then this will have to be concluded by, say, June or something like that, to have its effect.

Well, look, I'm all for trying, but I, I, I, I think we have to time this.

I think this is even the right for cultural problem.

That's what I'm saying to you, Mr. President.

I wouldn't pay it on this.

That's fine, go away.

I'm all for it, but I don't think you're going to get very far.

And we did have, this is a domestic problem, I think it's very serious, because we've got to carry those foreign states, and it's going to be difficult for other persons and traditions to carry.

Well, or I can say this.

Well, that's the only present condition.

I don't think the farm is hurt.

Well, the way the farm prices are down, the way the price of corn is not, it's a very bad situation.

That's what I gather.

If I don't spend my time on this, maybe somebody, maybe George, if he were to run that home, you know, everybody's always going to have a bunch

We have a neural supportus key there.

We have an injection there.

We've got to do it and go down there.

But that is disruptingly, should have been dead when I heard the current situation.

Well, the current situation is, as of course everybody knows, is that the defense always concedes.

In this instance, they expected to block the plan for it.

They had a very big crop, the growth price went up next year.

Over the top, the state reports of the price went up.

The buyers, the buyers of corn,

primarily in the states of Ohio, Indiana, Illinois, and Iowa.

These states are not taking any problems.

Those states are affecting them very important to us, but it's going to depend on what the price of corn is next year at this time, rather than now.

I would agree that now there are buyers

I say, well, the cart's too low, the hogs are too low.

That's their problem.

We may have a problem next year about the price of corn.

The price of hogs.

Because it depends on it.

Is it not true, Mr. President, that farming comes up and the price of corn is down?

There's been so much of it that the farm income hasn't come down.

The price hasn't come down to the extent that the corn price has come down.

But it's all very part politically to them.

Well, I have to say this, the Brandt family can do it a whole lot more than could an opposition party.

The opposition party, the Christian Democratic Party's major strength is in the agriculture and farming.

Brandt's major strength is among the socialists who are primarily sitting in work times.

And, of course, the sloth will bring it away.

So Brandt, though, tends not to be, by the 19th century,

Do you make a deal with the French, or with us, or with anybody else who remains in the scene, as far as the French are concerned?

You are absolutely right.

The problem we have there, we have no leverage on the French.

We just simply have time.

And we have, whether we develop some or remain in the scene, there's certainly not an economic side to find out.

But our problem with the French all the way around is that

They, whether it's toward the Middle East or toward Europe or anything else, they are a pair of self-sufficient.

And no longer, of course, having gotten out of the world, basically, and living within France, and even getting out of Europe, except from an economic standpoint, there isn't a hell of a lot we can do for the French or to them.

That's really our problem at the moment.

I don't know if we can make up some things.

The one-time thirst for relations are good.

I mean, talk-a-do.

Yes, I have a good thirst for relations.

He always protests me if he wants to be held to address.

But I, but nobody does anything against me, Mr. President.

But one other thing, I don't know if you should open up.

Do you understand the links that go through the front shoe?

Oh, I've got specifically to do what?

No, we need a big track.

They have four big...

4 billion in gold.

Now I know the size of the French economy.

It must be less than a tenth of an ounce.

And it is.

So this is an enormous amount.

This is built for it in large part by farmers and small-scale keepers.

And they imported this gold because they were encouraged by the French government to do so.

Now what has the French government over the years told these small farmers and shopkeepers, et cetera, to tell them the price of gold is going to go up?

Now if they were to, if they were to appreciate against the dollar without any change in the price of gold,

that would mean that the price of gold in terms of French francs would have to go down.

So that all of these people who were told that this is, you know, the great asset and it's the way you provide for your old age and for your future and so on, that would go down in nominal value.

That's a hell of a political problem to be done.

Now, they caused that problem for themselves.

We didn't cause it for them, but here they are.

Now, therefore, from their viewpoint, what they want to see is the increase in the price of gold in terms of U.S. dollars, which would make it unnecessary for them to lower the price of gold in terms of French francs.

Now, what they'd really like to see would be to have an increase in the price of gold in terms of French francs, but...

I am reasonably confident, and I've had very intimate conversations with them, that while they don't say so, I think they would settle for a stable price.

But that means a stable price in terms of French promise, which means, you see, some increase in price of gold in terms of U.S. dollars.

I want you to understand the French politics on this.

We can be

It's not just a gauze thing.

It's not just anti-American attitude or anything like that.

It's a very real domestic political problem.

Right there, how does the free market press go?

To what extent do they have access to free market press?

Well, I doubt if there is much linkage.

You see, it will be raised.

This is a normal thing because we're not going to have convertibility for a time ahead of us, certainly not in any early future.

So, you know, instead of calling it 35, we call it 37.

And the market price is 42 to 43, and I'm doubtful it would be less than that.

I wasn't thinking of it that way so much yet.

from the standpoint of the French political problem, a fellow who has control and wants to assess its value, doesn't he have access to the free market in gold, which is at a higher level?

Well, the sophisticated fellow, perhaps, which you've seen,

If you can see what the French journalists have done in arms the way we have, it will put up an official reduction in the price of gold in terms of France.

I forgot what you really have.

Here it seems to be three things, all of which work in the same direction.

You have the political problems in France.

You have the

the Gaullists, the impassivists, whatever you want to call them.

They have also a history, or a historical tradition, in practice, of wanting to run with an undervalued currency, and therefore, a very strong national position.

Now, all these things are not in the same direction, unless they tend to reinforce each other.

I agree with Pete.

I think we just have to take this as a fixed parameter in this problem, that the French will not appreciate their currency and accept the reduction in the price of gold, which is going to be applied in terms of francs.

Well, I would basically view that except I just don't think we ought to assume that any kind of position is necessary or is insensitive.

We've said we're not going to change the price of gold.

They all say, well, you don't mean that.

Sure, if you need to sell it, you can change the price of gold.

Now, my answer to this is gold is such a fetish for the French that they've got 11 million dollars of it.

And if we break the gold market, if we want to take it out of money...

We want to do it anyway.

We want to demonetize gold.

Then let's break the French market.

We can deal with everybody with France.

Let's say the market with his people.

Unless you don't like gold, we're going to have plenty of it available for you.

And you can buy it.

Because we're going to unload it.

And we're going to break the price of gold down by half of what it is versus the franc.

And you can do it.

The question I can tell you, all of you, so it's not, you're not out of the woods with me.

Those that hang out with us get lots of them.

And when it comes down to what the French are, we're saying that we don't want to change the price of gold.

That's our position.

The French are saying that they want us to raise prices across the internationally.

If they agree

to an unchanged price of gold in terms of French francs, that would be a concession in that market.

But that would imply an increase in the price of gold in terms of US dollars.

And I also, and I would say that it costs us, I think, nothing, really, from an economic point of view, it doesn't make any difference at all.

And if we can get a good settlement otherwise,

To start playing games with them and to get into an international strike would be a great mistake.

The question is, what can we get for it?

If we can get a really good and much better settlement, then I don't think we're going to be stuck in a gold field.

I don't even know.

What are you going to get for it?

What are you going to trade it for?

Well, I'm going to get it.

They just don't sit tight.

We're going to change the price.

Oh, that's what they told me.

They just told you.

Just start a spade and worms her.

They told me that they would be willing to see and appreciate.

They hitched it around.

and see what other countries have done to it, well, you can't blame them.

They'd be willing to see the Franks have appreciated in terms of the U.S. dollar by, oh, five percent, maybe six percent, which I interpret to mean that they have a little seven or eight.

Because he's a human, he's a blessed parent.

Even though this was a Frank conversation, providing in a novel sense, it consists of the Franks

I don't know about other countries.

Other countries are supporting the French in this position.

Oh, yes.

And Japan.

Now, I don't know whether they're supporting the French, because the British think so independently of the others.

I don't know.

Or because they feel we're not going to get the Greens.

Unless France goes along, they're probably supporting the French.

I don't know which it is.

I don't know.

Well, Arthur, in saying there are economic effects, you surely understand what those are.

All over it tells me that each percentage point is worth about $800 million if we raise the level by less than five or six.

So what we would get would be, if these assumptions were true, $4 or $5 million better pictured on our balance of payments.

The negative side of it, of course, I'm sure you'd be the first to say, is there some political price here that we'd have to think about in this country?

And there's the danger that giving on this subject sounds like you're moving toward a gold system.

This is a very critical system.

Now, on the other hand, if you set a zero convertibility, you see it's kind of a medium.

As we have it in your speech, it's kind of a rollback.

We have a political problem.

I recognize that.

But I think a settlement, a decent settlement, we've got to in terms of that.

On our political problem, it's a lot easier now with Royce, who's the leader of the anti-gold wing in the House coming out of the plastic.

He's no longer a post-jewish favorite.

He was a swooning priest with lots of gold.

Santa Claus has done that.

And my guess is, though, I think this would have to be checked out, my guess is the political problem today is nothing of the sort it would have been in 1907 or 1968 when, in the first place, people were talking about a doubling of the price of gold and all kinds of years of inflation instead of an increase of 5, 6, 17 percent, which is

what people are talking about now, these monetary conversations, and saying at that time the market price of gold was the same as the official price of gold, practically speaking.

Now with the two-tier system, the official price is $35, the market price is $42, $43.

Then, you see, if the price of gold went from $35 to $70, $67, people kept on saying, who would benefit from it?

All the bad people who are the racists of South Africa, the Russians in gold, the French in a lot of gold, speculators in gold, obviously very bad people.

Now, the market price is above the official price.

That already can be made.

So I think the political problem is very little for what it was.

Now, how serious it remains, I have no opinion on.

And this is certainly we'd have to check out before we take any steps.

What does it have to do with the price of gold?

Was that, in effect, the first drug?

going back and forth.

I know that isn't my thing, because it is my thing.

For about two years or so, you can't have convertibility, and everybody I've talked to, and I've talked to leading people on this problem, everybody in races can't have convertibility.

After that, what some people are talking about is harsh convertibility, and you go,

And, you know, this is something we might have to do.

I don't even want to do it.

We want to think about it pretty carefully.

There are still a lot of people in this world who value those parties and so on.

They allow the Indian banking to do their banking on their bodies, the way the Indian way would do it.

They have a lot of people still thinking about when they want to see some type of gold.

Now what kind of convertibility may mean is probably simply this.

Instead of having convertibility of dollars or other currencies into gold, you can have convertibility basically into this new more efficient unit, these SDRs, kind of paper.

If you have it at, say, $10.10, you have $10.

You want to convert it into something else.

You can't get $10 in gold any longer, the way you could up to now, up to August 15th.

But you can get, say, $9 or $9.50 in SDRs and $1.50.

in gold and this is the kind of thing that my guess is my guess is that in the end you can get a supplement on that to make it difficult to get something on anything else personally i'd like to see it will be monetized but i think it may be very difficult to be ranging because there's still some people in the world let's uh coming down to the specifics

as far as their concern.

The Chattanooga, you're not concerned about.

The British, you're not concerned about.

The British, because of the French.

No, in fact, in fact, the British, the French have the strongest profitability towards them.

The British, not nearly as strong as him, but as strong.

I think the British, I think it's fair to say that O'Brien, the central bank, the building of the central bank is real strong.

He has a racket, man.

Barber, even that's not what he's not.

He's just not.

I don't think it's fair to say that the British, all the British,

Well, Kevin Sunderland is.

No, no, I agree with your description, O'Brien, but John, at the British Treasury, was civil servant, if you will.

And the man, I mean, I think you're right.

Now, Barber, Barber is still human, he has an independent mind, but in the end, will it be his opinion or at least Treasury experts?

Well, I would assume that the other way, when he says what his position is, I assume that he's going to hold his ground and he's going to take somebody and say, Barber's not.

You may be right.

I want you to know how the experts of the treasury over the years have worked on us.

We've had, like I just stated, partly political forces as well.

I agree that we have something perhaps to lose by sounding them out.

There's no way we could do that.

Oh, why not, sir?

I'm not sounding out like we would be willing to.

I would say, I would stick to the old position that you've taken us, President, that John Connolly has taken a month after another.

We're not doing that, but you folks want to talk about the price of gold?

All right.

We won't even talk about any subject, but first things come first.

And we want to see what kind of green line we can get.

Mr. President, may I, at the risk of treating everybody here, may I suggest that we close this conversation for the last 30 minutes and direct it toward what we're going to give up.

And that's such a matter of very special in this government over the last 25 years.

What, we're going to give up nothing?

I think that's unfair.

I've been trying to say that we give up something.

Well, I'll tell you what I think we're going to get.

OK, I think that we have to get an average realignment between 10% and 15% and towards the upper range, if at all possible.

Is that all?

Well, we have to get something untraded, General.

Well, I don't think we have to wait until the last detail.

Untraded?

Well, Mar-a-Lago, we have to get some major... Who wants to settle this?

Who wants to get back?

Who thinks it ought to be settled?

Us or them?

Us and Frank, or us and Janet, or who thinks this fall will be so?

And I gather, Pete, that you about, it's the fall where you think, we've got to settle.

We're under pressure.

We're the ones that have to move.

Is that a pressure?

No, I'm saying this.

If we have the exchange rate line of magnitude, really take our balance papers and make sure, you know, positive forecast.

And again, I think if you read the paper, you'll see there's a whole bunch of trade stuff we're talking about.

That's why we get some trade stuff.

And if we can get some longer-term, really meaningful trade negotiations going on top of the short-term, I disagree.

That's my opinion.

I'd say that package warrants are making the deal.

They're relevant.

They're efficient.

The main reason, John, is that I think we're at the point

where if we don't make the deal, I mean, sometimes it's this kind of deal, I'm not saying any kind of deal, you're going to find increasingly serious foreign policy problems in Europe as they... Why do you say that?

I don't know.

Well, I'm just questioning.

Okay, so you say now is the time.

I said, why do you say that?

In Europe, and I'm looking at the meetings, and I said, let me explain why I asked that question.

Certainly, because the last meeting, the deputy's meeting, the deputy's meeting, he's written a group of ten deputies.

Very obviously, the European community, the people, were not particularly anxious.

They think they would.

On their own purpose, they didn't even talk about gold.

They assumed they weren't giving them gold.

They assumed we were going to de-magic the dollar in terms of gold.

Well, they better be straightened out on that.

That's right.

Paul Walker made two months out of being straightened out.

And then, affirmatively, he had to break it up to himself, just out of context, and say, I just want you all to understand.

You think.

You obviously don't want to talk about it.

But I'm telling you, if you think you're going to get anything out of the settlement based on the United States having agreed or being willing to agree to change the process, well, you're operating on a completely false premise.

I said it to them twice, once to the pressure brick, once to the tenor.

But they're going to leave the discussion because they think we can already kill them no matter what.

What I do get at this point, I think, is I've observed in the discussions I've had on the subject that the question of the price of gold in France's position on it

As you say, it becomes the center of discussion all the time.

After we have discussed a little bit, all of a sudden, this guest has to spend all our time talking about the price of coal.

And that happens meeting after meeting after meeting.

And we explore it.

And the IMF has this idea that they're working on one person or another and doing it.

And all that inevitably gets around.

And people know that that is the nature of discussion going on in the government.

And I wonder if we won't do most of this by just ruling that subject out.

We're not going to talk about it.

We're not going to explore it anymore.

We're going on to other things and seeing what alternatives there are.

I don't understand it.

We can't talk.

We're in the process of talking to one another and things get out.

There's something very, very seriously wrong.

We have more of a problem than I thought we had.

Well, we do have a problem.

We do.

Well, I... You get through talking this room, but it is true that you get...

Now, in one sentence, we should have said the staff is dead.

We should talk about these sentences.

That's what you meant.

We should.

There are at least 60 people in this government that have been in a discussion at one time or another with some member, somebody that's sitting here, who have been talking about the price of gold or another.

and all of that stirred up.

We can't use this to our advantage by just putting up with that.

But the president turned that off.

So let's just not bother with it anymore.

Let's hear about it.

The president, I think, I sympathize with this view that we did have a tough price of gold.

It seems to me the central issue that we have before us here is really, is that we want to put together a piece of what kind of a piece of what, what kind of a piece of what must be here and where we're aiming at.

I've been educated that there's a lot of time to talk.

There are these issues in the trade area, and we'll leave those aside for just a moment.

I don't mean to disregard them, but that's a key issue in the monetary trade, is are we going to move back toward, or move toward,

some kind of system of fixed exchange rates, but of course with a re-scaling of the exchange rate to take it down to 10 or 13%, as Arthur suggested?

Or are we going to try to operate with some kind of floating rate system?

Now, John floated the idea of a floating rate

But it seems to me that if there were one possible program of action, it would be to try to agree on some kind of initial hackage and trade.

Hackage and trade is an inadvertent sharing.

Negotiate some kind of new system of heritage in terms of the state of the race.

Now the gold, I would say the gold issue is sort of an incidental issue.

We don't know that we can't, we don't know for sure that we can't negotiate the kind of parity arrangements that is exchange rate change that we want without changing the price of gold that John indicated in his address.

The price of gold issue, that's not tackled anyway.

The key thing is to get the kind of adjustment of exchange rates which will rescale our cost level with the rest of the world.

That's the real thing of the game.

You can get that either by negotiating a new system of fixed parity, or, in principle, theoretically, of course, you could get it by some kind of flexible exchange rates, or floating rate, or rates just following up on the market.

Now, if you could, those can be, but these do imply somewhat different course of direction.

Now, in the trade area, I think that would be perhaps common.

to the two that is what you want.

So a new system of fixed rates for an already exploding wind system, we still have these great, important sharing conditions.

But it comes up with a lot of very problems.

Fixed rates for an explosion.

And in one case, we might just get still and try to let time bring the world to some kind of floating

If we want a system to take action ourselves, then beyond that, we've got some...

If you like, you can put $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

We need a fairly clear view as to what we're trying to move toward.

This isn't a new, but a fixed view.

We're looking at a fuller view, because those two provide a lot of different

Now, I would make a distinction between making a deal now, just on my own record, which I would be accused, if it didn't meet these criteria, versus our beginning serious negotiations.

Oh, yeah.

On that subject, and I want to hear a good argument on this, if anybody wants to discuss it.

that you mean that there has to be one total package deal, or can you bring up a partnership?

Well, I think that's the kind of thing I said to John when we were doing Japan.

And then we came to another decision.

No, we laid out what our requirements are.

What is it we're talking about specifically?

Because frankly, part of the problem, I think, if we don't present specific proposals very soon, is that they may conclude that we're different to solving the problem.

And in some ways, .

Let me try again.

The question is, do you feel that part of this could be broken off?

Or does it all have to go in one bag?

What are you going to do about it?

Can you raise it?

Somebody raise the fire here.

I'll see if everybody's paying up on it.

You're going to have to deal with Canadians.

I say Canadians as an example.

Japanese may be a special problem.

What's your view on that?

Well, I'd say the park should be broken up.

And I think it's really and practically the only way of doing it.

You would not oppose breaking off parks, sir?

You mean you would not vote race and opportunity to make the right kind of deal?

Yeah, but I'm glad you could say you can't make a deal with the Japanese on currency.

Well, the Japanese and I will be other countries in the future.

We don't stand a chance in the world.

I think what we can do, or I think we'll be able to satisfy them into that, instead of other countries in Germany, both Japanese and other Germany,

My guess is it wasn't yesterday.

It wasn't yesterday.

We were wondering.

But that's the people.

Now, I think what is doable, what we have to determine is doable.

There's still a spot, and we don't know what the other countries are willing to do.

But we have pretty fair guesses right now.

But we don't know the true point of near certainty.

Anyway, what we might be able to accomplish in the near future is a realignment of currency pairings, more or less acceptable to us.

An agreement that there will be no convertibility for a period of, say, two years, or at the maximum, convertibility for a small amount, say, add a billion or a billion into SDRs.

No convertible in integral, out of the question, for, say, two years.

Now, next, in this more immediate package, some agreement on trade.

There are some major principles of removing trade barriers.

The Japanese will have to agree before we conclude, I think, or should conclude.

to remove a good many of their tariff and quota barriers.

All right.

Now, we don't have to work it out in detail.

I'm asking you to bring it on first with them, with the Canadians.

I'd love to say, Mr. President, we ought to do that with the Europeans.

What troubles me is with the Europeans, the main problem is in agriculture.

and the europeans have their political problem with their farmers just as we have with our farmers so yeah we'd love to do it but can we i don't know now next agreement on on reducing

and we've seen very substantially, if not completely, the role of gold in a future monetary system, putting a much heavier emphasis on SDRs, and finally agreeing that the dollar will no longer be the sole vehicle currency as it has been, so we carry the burden.

Now, I think all this, in my judgment,

We can try to negotiate all this within the next few months, to work out the architecture of the international monetary system, to work out the details of trade readjustments, to work out the details of burden sharing now that they're confusing the picture by adding age to defense.

Well, I think that's going to take a long time.

No, I don't think so.

I don't think so.

It's a great education.

I just want to emphasize that I think the real key here is to get adequate enough exchanges for that.

Also, you put your finger on a philosophical point, too, that the question of whether or not we do go to, you know, I'm looking at convertibility, or whether or not that's...

In terms of, I just want to add on one comment that Professor Ruffalo said.

I agree with him wholeheartedly.

As a matter of theory, and not more than theory, as a matter of practice in the international monetary field, I have no question that as far as the domestic political situation is concerned, the real island of currency is much less important than two other things.

Number one, that whatever we do, the United States of the East and Prussia, we are not giving ground.

We're gaining ground.

And number two, that we do get some trade concessions.

Every fellow in this country doesn't understand the international monetary policy, and I couldn't care less.

But he sure understands this business of trade, and he understands this is where the United States is going to stand up and protect its interests.

That's why we ought to talk about defense burden sharing.

That's why we ought to talk about trade.

And if it's six months or a year down the road, we ought to have to realize until we get it.

Because he continues to take the pressure off it.

I still believe there's no more pressure than we're under.

I just believe it.

And I think we adopt the attitude that we're the guys being hurt, that we've got to get around, we've got to get this realignment, we've got now so much time we can get it.

I think it's insane.

I think it's a political mistake of major proportion for you.

Let me suggest this.

I think it would be very useful to .

As we continue to do, as far as the Canadian, I actually think that's a question on the European situation.

We have some other vision in private with Europe, but go beyond this.

I don't want to discuss it here.

It has to do with the soldier's son and all of the things.

Now, whether that will affect this remains to be seen.

uh whatever the case may be that has to be part of part of packaging i mean part of part of consideration um

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

Part of our problem with the French is they have an internal political problem.

If they, uh, if they discard this plan and... See, it's not too bad.

No, that's the problem.

That's what I said.

That's the problem.

And, uh, they know only so far that Pompidou gives them a little bit of leeway.

And he's not sure if Pompidou is the...

He has his own ideas too.

That's right, that's what I was saying.

When he talked to me, he was one of the few heads of government who spent most of his time talking about economics rather than about politics, which others don't like to talk about.

Alright, now, in the meantime,

I think, as well, that we keep our running room here and our houses open.

That's what we all want.

That's what our conversation should be.

Let's not let them think that we're in a box, that we have to do something right now.

I want that to be on.

I think that when John gets back, we will have a very good idea of just what the Japanese can do and what they will do, because he's going to meet them for four days.

those fellows around out there.

I'll just walk out.

I think that's the best thing to do.

I just want the two of us to move.

Because we want to build this up in Japan.

The fact that we've met, that John Connolly and I have met the day before we took office.

Where would you suggest we walk?

Please, sir.

I think Governor Roosevelt walked the respective way.

Then let him take a shot.

Now, let me suggest this in the meantime that John's

I'd like for, you know, the working process to go on, but on a very confidential issue.

And, uh, whenever you tell me something, there's no problem.

And, uh, when he returns, that we should meet again.

And when we meet again, we should know what the Canadian deal is.

We should know also

Now that's something I wish you would have done better.

That's how hard you work.

Go on.

And thus, in the meantime, all jobs are gone.

All jobs are gone.

We're too easy.

All jobs are gone.

We will not have another discussion at this level about this subject.

And I think we should just turn to that and put it out.

Well, everything's all right until the Secretary gets back.

Now that's what he's going to say.

But let's just keep it that way.

I think that gives our department, especially the Secretary, back.

And we're thinking about all of this.

But I do think it's important that they not deal with it because of the pressure here and the Wall Street crowd and the others and so forth.

We've become jerry and drop bad.

We feel we've got to go run over and make a deal.

But maybe the pressure may be just as much on them, if not more.

That's what I feel is such a doubt.

But we come right down to it.

This situation, of course, as we all know, and the marker, of course, would be particularly sensitive on this issue.

This is one where we've got to have the confidentiality expressed.

I mean, it's got to be kept more than anyplace else.

I do decide to go on a certain course.

So that's one of the reasons I want everything kept very closely held.

And as far as my own thinking is concerned, I think that all of you can report that you're all I do.

I didn't make a decision.

I had to prove it.

And I certainly have not fixed on anything at the present time.

I'm waiting for the secretary to report what he finds out.

Mr. Carson, I think, I want to be on record, I think John is absolutely right about getting concessions, and I think we'll get some to Japanese, John.

I've got the ambassador running around trying to find out what you want.

The Canadians, as you know, want to know what we want.

And I think, politically, we must get some trade concessions, not just negotiations.

But part of the reason that, from a domestic political standpoint, let me say, it is the trade area.

We all know that a monetary realignment is going to mean a hell of a lot more from a domestic point of view standpoint.

But they see, well, I take that 10% of that textual agreement.

Now, that textual agreement has been enormously beneficial to a lot of people.

We know that it means hardly a damn thing.

I don't think it does really good.

and the national people might think so, maybe to me more than I realize, but they think, well, now for once the United States has finally got us some out of these damn burgers.

That's what we see.

You see, that's what we've got to posture ourselves to do.

And John is right about this, that we must not just do, we want to do it right.

But as we approach it, like I said, we've already, we've already got to convince our people we're standing up for America.

One of the things, Jeff.

I'm sorry.

What did you try to get me to try to say?

Oh, yeah, that's good.

It's just wrong for a Cadillac to sell for $5,700,000 in Japan.

In hell, what does it tell me to get the track out?

It says 22, yes.

This rather emotional reaction that occurred in this country on the UN boat had very little to do with Taiwan.

It had to do with the really shameful conduct of these African nations, particularly Dix and the Jigs, shouting and screaming and so forth, and frankly, being

Enjoying the humiliation of the United States.

My God, people like Reagan with the other call, and they're just mad as hell as well.

I mean, we're going to lose the vote.

Well, we're catching up next year, not this year.

But here we see all of these spanking little companies around the world that we've invaded.

And so what do they do?

They just kick us right in the teeth.

Why?

Because the United States has always allowed itself to be given to people without doing anything in return.

Take one country to go to the other side.

Botswana.

Have you ever heard of Botswana?

You know what that is?

That damn place is something that was set up through the stupidity of the United States State Department.

We could have dated it in the action.

We could have heard it.

This is before we got here.

As sort of a bumper of an extra South Africa.

You know how many people have gotten it?

300,000.

There probably isn't a person in the whole goddamn place that doesn't even read.

And we did.

The last final vote is worth as much as New Mexico, who won't admit as a result of college and the presence of Mexico now.

Let me tell you that when we start building some things here, if we do something in this area, if we do something, huh?

We need the Mexico version on the list.

I mean, a couple days is fine.

You know, you've got to do something for your friends and the sisters.

And, uh, all right, I'm sorry, I'm sorry.

We will, we will return this part of the meeting to the police today.

The police are out.

And then I'll be back here.

All right.

We'll take a little walk.

It'll take you five minutes.

You can go to the, uh, press room there if you want.

I'll talk to you later.

I'm not, I'm not, I'm not, I'm not.

Y'all, you got to call me when you land tonight at 7 o'clock.

We're coming back.

We're coming back to work, pardon me.

Hold on.

We're coming back.

All right.

I've been writing things enough to change the entire psychology.

I do it one by one.

Good luck.

The, uh...

It's hard to make these small gifts.

Well, tomorrow this is a cannot-be-seen.

I can see your remarks in the customer.

It's time to buy.

Well, you know, I've done enough of this, honey.

What does it mean?

Well, it's a little study of your unusual thoughts, I have to tell you.

The last five months, as you know, the war of the last five months has been led to deductions.

But if you look at the sales,

And redemptions, which you might as well say are increasingly higher than they were last year, which is the spring season.

The increase of the redemptions.

Well, I don't know whether this is working or not, but I think it's pretty simple.

Run forward, and run forward for a long period of time.

And, well, there's actually both that you need to have a few chairs, and it works with the leg, which is the leg here, so it will get along with the other things, and so on, and how they're keeping the camera.

Zero zero zero zero zero.

And that's what's happening.

You know, I don't know if you've ever guessed it, but they heard us a few times.

They said, look, there's a sale.

It brings you back access to the mission that you made in the century.

And I don't know if you've ever heard of it.

It's a sale for me and your successful life.

I don't think that's the smart investor in that government.

I'm just saying, I'm not that short.

Well, the, um, I'm going to send you something else that we don't know.

I guess there's too many that we have to work out of these.

I mean, I was personally trying to do something else.

We decided at the time, we, because I was, because I was in the office, I was outside, we decided we were going to do something else.

Okay, I heard you, Mr. Hunter.

Are you off duty?

I'm leaving, sir.

I think you're supposed to be working.

Okay, we're supposed to be leaving.

I'm leaving, sir.

I'm not even close to the list.

I'm going to watch the site.

I'm not persuaded, but this is the time of us going to accomplish any good.

Well, I was waiting until the turn, of course.

Well, I would just emphasize what's happening.

I will try this.

All right.

Well, how do you help?

Well, isn't that what it was before?

Children.

So we could return them.

Well, I'm not suggesting that this will make a fundamental change, but it'll turn them perfect.

That's what it is for sure.

The, uh, on this issue, I...

This business is not on the very side of what I'm interested in.

I'm just walking.

And I think that's the principle of life.

That's the principle of life.

And I think that's the principle of life.

to give us our education directly in the first stage.

We want it.

to work on the other side of this car.

I thought we could send this to the message sign there.

I guess we'll start with Paul.

I think all of us have seen them.

I've seen figures on that.

Right.

You want to hear more about us?

No, I think they're more bearish than I would be, and they're more bearish than we are in trade.

I don't think we have sensed that.

I don't agree with this.

I invented those leading indicators.

It's my system.

So, that makes it helpful.

No, it's having lived with it.

You know, I did that.

I did that work.

So, I had me in here.

He was Secretary of the Presidency.

It was 1937.

And I lived with him.

and tell us that they were the very helpful gods.

But for heaven's sakes, don't get married to any indicator.

You just take the old constellation, a little ups and downs, you know.

You're not married to this, uh, this star.

Look, the TNT figure of Sarah Porter was disappointing.

It...

If you look at the whole system of our national income accounts and take out the inventory part in the GMP accounts and look at what economists call final sales, sales to consumers, to business enterprises, to government, the increase during the third quarter was exactly the same as during the second quarter.

It could be better, it should be better, but you know, it's not this sharp drop that publicized figures indicate.

That's what our people say, the financial news, what you were talking about, our inventory is going to sink.

That's what all your figures say.

Our inventory is still low.

The inventories are low.

and to leave it in the very acute place that it was very good.

There was this moment that I was, well, I think in terms of futures, that's a hopeful, that's a positive.

The, uh, the, uh,

As far as the real economy is concerned, there's this thing you said this morning, you want to know this?

Yeah.

If you read the history of business cycles in this country, and compare this present recovery that you've had towards the end of last year, look at it.

I have to tell you, we're just going to get out of this.

It's just like anything we've ever been through before.

If you compare this recovery, which began last year, with earlier recoveries from business cycle recessions, this one has to be put down thus far.

Taking a period, let's say last November or through the month of September, when we have data that has to be put down, that's a very selfish attempt.

But you've got to also know that it's something else, don't you?

I think it has a terrible effect.

The recovery system sometimes depends upon how much of the drama you want.

There's a good hell of a bit of drama in this case.

There was even arguments as to whether there was a recession.

There was one period, and that's true.

That's true.

But D is what comes down.

But D is a sluggish term.

It's a curse.

Now, we had a good pick-up.

The biggest part, confusing.

Unemployment, we had a sizable pick-up in the month of September.

And what was encouraging about that is it was spread out.

On the other hand, the length of the work week declined, and I can make no sense out of that.

What do you say about that, George?

I don't understand the work week.

How did they handle it?

The employment picture does offer some hope, I think, particularly when you look at the household survey.

I think you were referring to the payroll figures are there, which finally did last month show some signs of improvement.

But the household survey employment figures were very good, which was about a million, seasonally adjusted in a period of about four months.

Very high last year.

rather than in the third quarter of the second.

Now, the government purchases are relative to being in account for a lot more.

There's a little bit of private demand.

Private demand is weaker by quite a little in the third quarter.

If we hadn't had the surge relative to the second quarter, most governments would have been, again, they would have been very snatched.

In the weak part,

We've had a very sizeable, could have been better, or we would have liked it better, pick up in retail trade and consumer spending this year.

And we part of the economy is the business capital sector, and there's this historical fact, Mr. President, we've never had, under peace-time conditions, anything like full prosperity in this country when business capital investment has been rising.

He has been very sluggish, and continuous sluggish, and that's why, well, there's a proposal we've made of ten and five on the investment tax credit.

It would have been so helpful.

Yes, it would have been so helpful.

He long got it.

He never did.

Well, it would have been so helpful.

That's better than not voting.

I think the longer run is probably better.

The problem is we don't get any care here.

Well, Paul, you recommended additional official stimulus.

Despite that, there are a bunch of problems and all the rest.

Is that what I say you recommend?

Yes, I do.

I do.

I'm not sure to what extent there's a difference of opinion here as to...

I think we tend to think we all agree that certainly the third quarter is a sluggish quarter without regard to how your talent is going to deal with private demand or GMP or client demand.

We know that the unemployment rate is 6% and the quarterly average is 6% in each of the three quarters of this year.

There are some figures that are confusing.

Now, where do we go from here?

that just the 7% investment credit has ultimately is going to be helpful and will have some effect on this credit system, assuming that the legislation passes.

On the other hand, if you look at the experience of this, it does take time for an investment tax credit to start to previously be visible, in fact, in the economy.

By the time, it took maybe upwards of two years to get at a significant amount of strength in Catholic money.

Now, what this says to me is that I think we need to get still more gains in that

in consumer demand beyond what we're doing in the investment area already, in order to start to get a little more pressure on capacity, because that's the kind of thing that's going to start businesses into ordering new equipment.

That's where it's at.

And what would I do?

I think any kind of, any additional tax reductions or individuals who may come out of this kind of thing, beyond what you forget, I would not, I think we ought not to oppose.

I would, I think we ought to consider holding off on the increase in Social Security taxes in January.

both because of stipulating the economy, and of course it does have certain impacts on cost, too.

I was wondering about the flow-off.

Are there any increases in it for the end of the month?

What is the next increase?

The next increase is in the form of an increase in the amount of covered wages.

Yeah, so it really doesn't matter to myself until, say, May or so.

Because if you have that much weight, it's not required.

Doesn't that affect the pay envelope?

Well, I get it.

I'll get it.

January, which he did well, then there would be a step up in the race.

Because it's hard to put together the arithmetic of the kinds of figures he's passing, which it seems to me we ought to have.

Do you think of anything else?

No, we do.

We've been talking about that, asking for Congress to do this, you know.

It could be a very idle gesture at this point.

Yeah.

Well, it's not a possibility for you to be in this whole discussion right now.

I would recommend it for you.

Yeah.

I would recommend it otherwise.

John, what's your problem?

Before I ask you, let me ask Arden, what do you think Arden would do?

Well, the short answer is let us know.

I wish I could say to you, Mr. Brosnan, that it's the cancer that I give the great confidence in.

Now, let me give you some long answer.

Let's start from the business cap exchange.

I don't quite agree with Paul that more consumer spending, you see, is going to have a burly amount.

This was the implication.

It'll have some effect on capital spending, but ultimately it must, you see.

But will it have a large additional effect next year?

Which I take it isn't.

But all of us are.

We haven't said that explicitly what we're thinking of.

I doubt it very much.

No, I didn't mean it like that.

I didn't hear her.

Yeah.

In fact, I want to concentrate on the election.

I want to concentrate on that.

It's something on our minds.

And we, we want just to, uh, talk about reaching out for a little bit of life.

That and, of course, the oven.

The, uh,

Mr. President, there is a hard fact that somehow we keep denying to ourselves.

We don't want to leave it, but I think you better leave it.

We had an extraordinary investment boom in this country that lasted a long time.

We've had a period of substantial overinvestment.

We have excess capacity scattered through industry, and under these conditions, it's not easy to get every viable new business investment.

Now, just a hard fact, I'm afraid.

10 and 5 combinations, something like that.

Or you should have helped.

Would have helped us because you could have a bunch, you see, within a year.

You do it within a year, you get 10%.

You wait.

You want to get 5%.

All right, we're not going to get

What do we do?

If we wanted to stimulate the economy now through fiscal policy, I would do it, not by reducing taxes.

Congress is going to do more than you ask for anyhow.

My guess is it's quite enough.

But if we thought more was needed, I would do it through the spending group, because a dollar spent is a sure dollar.

And you just use taxes, and people are in a saving mood and are hesitating, and you don't know how much of that is going to be spent on it.

What worries me is, and that's the reason my show has served,

There's a lot of concern around the country in business and financial circles that this period of the freeze and the controls is just an opportunity for the government to spend a lot more, increase the money supply a lot faster, and then whip up across the basic forces of inflation, you see.

And these fears, which were quite strong, and which have diminished, but because of your action on the budget, this, what you did on the pay bills, has had a very statutory effect on the city.

My clue is just to deal with that matter.

The, what is it, it's,

I wouldn't do it, but I would not criticize, really.

I want to reach easily a different opinion, and I'm not prepared to say Paul is wrong.

But if you are going to do it, I'd come back to the point I made earlier.

Extend.

Extend and spend on agriculture.

Somehow try to get it into those areas, into the far east states.

the uh look at this point if the focus is on the on november then you have to ask yourself the question is where will the dollar expenditure do the most good now your fellows you've got a lot of them

We went very high on the

We're putting aside acreage for next year and thinking that our problem next year would be affected very much by that, and that's in place with our foot and arms.

I think the dock strike has hurt the price of corn, as I was saying earlier.

I think we are trying to get protection in that quarter of the world.

And it may be that we're best off just going for a total tax harming and judging

We've got a big hole in the east of the Gulf Coast.

Why not?

It doesn't really solve anything, but at least, you know, we've discovered that these doctors are totally impressed with the care that's supposed to be provided.

So if we can get, if we can get, we have, of course, open from Lake Charles West through Texas, I believe.

We can get to New Orleans, Florida, but we have Philadelphia over there.

You can do Florida, but New York really doesn't have all that much to do.

They took everything out.

They took everything out of hand.

They've got a few ships lying out there.

Basically, that doesn't constitute a problem.

We can't leave it in the world.

That's their proposition.

Although, what we have to have there is an adjudging against Australia.

And to get ahead of the workers at this point, I don't know how you can enter an independent court unless basically one of the ten parties promises it.

So, they're tired of it.

Let's leave that.

This will wait for a while.

We'll be right back.

I think our budget measure is still a unified budget test on the order of $27 billion or so, a full-fledged test on the order of $6 billion or so.

This is recognizing the fact that revenue sharing, which we carry in our published numbers,

almost sure not to pass, can be effective during fiscal year.

And that's sort of taken into account explicitly in these figures.

So that's a measure of how much fiscal stimulus, if you want to put it that way, we have.

If one wants to sort of ratchet that up by another zillion or two, that can be done, I guess, although we are pushing things out as fast as we can.

But it doesn't seem to be like the problem is kind of a $1 or $2 billion of extra outlets-type problem.

Even though that may be able to do some good in particular areas, you know, we're pushing California and so on, where we can on these outlets and in these critical states as well.

All you would leave for us to do

Not because I like deficits, but neither do I want to stop because I'm insecure.

Those are the choices we make.

So we can get a crack at that.

What is the situation?

The monetary situation, if you look at the...

If you look at the figure of what is basically called the money supply, which simply means currency in circulation and demand deposits in private hands, then during the months of August and September, there's been no change.

Now, on the other hand, if you look at what has been happening, what the Federal Reserve has been doing,

You look at time deposits.

It's another way of holding, you know, of holding money.

Here are time deposits.

In the month of commercial bank time and savings deposits, in the month of August, it rose 6.5%.

In the month of September, this is a manual rate, in the month of September, 15.8%.

Now, this is not quite a fair way of reading the figures because you're a large certificate of deposits or a money marketer, so we've got to take those out.

And we take common savings deposits, other than these large CDs.

The figures are 6.4% in August, 7.4% in September, a very respectable rate of increase.

If you look at the savings deposits and mutual savings lines in SNLs, it includes 8.4% in August, 13.4% in September.

And if you look at government deposits, you find the deposits of the U.S. government

They rose from a figure of $3.9 billion in June to $6.3 billion in, to $2.5 billion, roughly, at the end of September.

Now, so that, well, let me say something else.

What the Federal Reserve influences directly are member bank deposits in

In the banks that we control, the figure for August, 10.3%.

The figure for September, 8.5%.

Also, if you look at all commercial banks,

I'm going, Senator, and I'm laying the foundation for a little analysis.

I'm going to turn to these narrow lines in my figures presently.

If you look at loans and investments of all commercial banks, it's what they do with their money.

You find that in August, the rate of increase was 13.4%.

In September, 9.7%.

You have very substantial increases in every category of money, and money use, except one, you see, that which we call, commonly, the money supply.

That being demanding deposits of individuals, and currency circulation is primarily demanding deposits of individuals.

Am I out of business?

No, I'm sorry, I said individuals, I should have said private.

Now here's what happens, President, as I confess, thank God.

In the month of August, the end of the month of August, people had money.

Money buzzed at the banks.

Quite a few corporations decided to buy.

Marks and yen and other currency.

And the central banks, which acquired

that these dollars got special certificates from the U.S. Treasury, and Treasury cash went up, and private deposits were down.

That's what happened in August.

In the month of September, that happened on a small scale, but it wasn't a factor of any real consequence in the month of September.

But most of September, it appears now that individuals, individuals bought securities.

And in that way, in that way, they reduced their cash balances.

And this is something that we in the Federal Reserve System, we could have lost of it, you see.

then we could have prevented what happened in September, the amount of money that was held by individuals and corporations.

The only way to do that would have been for us to enter the market and to buy treasury bills on large scales and bring interest rates down.

Now, why didn't we do that?

First-interest rates were coming down gently, but quite significantly anyhow, with reductions since August 15th as very impressive.

I could have given this an extra push.

I deliberately decided not to do that.

And why?

Because if I gave it an extra push, and it was going down to the national courses,

and working in our favor at a time when the economy is really flooded with money anyhow.

If I get back, push the interest rates down, then I have to fix the unsavory tax of just watching them go up next year.

And my strategy, I don't understand a word, Mr. President.

I make no promise.

What I would like to do is to prevent, as much as I can, an increase in interest rates next year, especially with things working out as they are.

Interest rates coming down gradually.

Why should I push them down forever?

Now, if the economy, if the economy were short of money, look, you take the second and the third quarter together.

You see, these multi-month movements don't mean a thing.

But that period, that six-month interval, the narrow money, I said, Bob, and I was educating what's been happening to other parts of the world, and I said, well, I rose at 7.2%, very substantial.

Why don't we talk then, Arthur, and I hope he's been able to get very closely about liquidity, et cetera, and the crisis.

People are worried about the money supply except because they read the narrow papers.

What can I do?

You see, people cheat.

Well, they are right.

They are safe.

They don't need to be reflected in their attitude.

That affects the market.

Look, you're talking about some of your Treasury fellows.

You saw my Treasury fellows two months ago pretending we knew a wire about the fact.

You see, Lee, you know, that money supply wants a man.

Well, at least that's not cheating.

Well, Mr. President, they are, but it's for the certificate, is that right?

Oh, don't worry about that.

It'll be all right.

That part will be all right.

Now, the, well, look, the, uh, the, uh, that's a record, you see.

I'm watching the, uh, the, uh, we have nothing to talk about.

You see, the, uh,

And this is an advantage.

This is an advantage.

What is that?

Really?

Let me suggest this.

Why don't you go out to Wall Street and, uh...

I didn't.

No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no.

Paul does.

I know.

He says, look, what if the Fed's tightening up on the money?

That's what's bad.

Let's see whether it's true or not.

You know, Arthur, it's like they were saying at the time of August 15th.

It's their own.

If I see the people think of it, you've got to do something.

Well, most of the people...

Most of the people on Wall Street, Mr. President... Well, let me take that back.

The overwhelming majority of people...

In the past, all the government is saying that what we're doing to the fed is just right.

That's what they tell me.

And I, you know, I see them and I ask them for purposes and what do they have to suggest.

You're in the past.

We had a hell of a lot of money in 1970, which was not a good year for the country.

Now you want straight people, you have brokers and so on.

That is, that is in large part a very emotional problem.

You know, they get excited about this.

Now, I was down on a route, or I talked to a friend of Wall Street yesterday.

It was not on this subject I talked on here.

You know, I was saying, I think I made a few points.

This was a group of about 150.

You were at a place in Carroll Boulevard.

Oh, yeah.

I didn't talk about this, but maybe I will take on this subject.

I want to hear what you're talking about.

I actually don't pretend to be in this field.

But, you know, if you could read this stuff, and I'm so grateful that there's a good lady worried about the money supply and support for it, and I rely on it in any prison, but if you could go out there, and I don't do it, but all I want to ask is to get together the movers and changers and say, like, you guys are all nuts.

Okay, you can convince them.

I'll be very glad to do that.

And I will.

And I want you to suggest to me how to do it for a while.

I can take care of it.

I want you to be too narrow.

I want you to be the power.

You know what?

I'm going.

I'm going to ask you to broker to us.

Okay, Calvin.

Properly and equally.

Well, this will be an offer.

I think that's what I'm saying.

Also, what you're talking about, the policy itself, you've been very good on this.

It's very helpful to have some of this.

We don't want to whistle in the dark.

I'm not one of those who says, my God, we should say everything, but the majority of it isn't.

On the other hand, we all know that the economy has become a lot better off.

As you both have said, business is a lot better than sentiment about business.

John, isn't that your conviction?

Yes, sir.

and you go out of the country, and you were San Francisco or Texas, and I go out of the country, my people do it a lot better than it would be indicated by the educators here.

Mr. President, may I remind you of one thing?

That when this narrowly defined money supply, which is very misleading, aside from water, the rate of increase was another 0.3%.

This had two consequences.

First, a lot of people began talking about an irresponsible federal reserve system being pushed around on some edge, literally pushed around by the administration and inflation lines and so on.

We lost control and so forth and so on.

But this kind of fog, you see, and you find the First National City Bank,

They were very active here.

This kind of talk had an influence on the interest rates at the time.

People decided in the financial district, here's a very long while, and expectations of inflation increased.

And the inflation treatment filter going up.

Now, the Fed is pursuing a pretty stable course, Mr. President.

They're very responsive, of course, and in my judgment, what people will take these little ups and downs, and they worry one way, they worry another way, and they'll always be like that.

But this particular group, they're depressed now, psychologically, because of the decline in the stock market.

I'd like to talk to them, not only about the money supply, but I'd like to talk to them about the economy, about the new economic policy, and also what the money supply and the principles

I think we may be in a situation where we've had five, six years through Washington's cities, a highway of inflation, which was interpreted as a high degree of prosperity.

You had a high pocket profits.

You had a high employment.

You really had the whole country going to the place you need.

Service.

Low employment.

High employment.

Low employment.

Now, I'm not sure that if you had a good stable economy, I can make for a good harvest if you had it right today.

You can go for a good thing, don't you?

But everybody thinks, you know, my God, this is great.

Well, that's not what this is about.

Now, I've been listening to the corporate profits.

Now, next year, I think they're going to feel that.

The corporate profits were low last year.

They were low the year before.

The profit was squeezed.

I think two things.

That's one thing.

The corporate profits are up.

They're up this year.

They're up this year, enormously up this year.

Yes, sir, they are.

And I think that'll reflect next year.

It'll reflect an attitude.

I think it'll reflect even capital investment.

But in 69 and 70, the private property was way down to the 69.

They were in the speedier flow of employment than the very, very low private property.

See, let me tell you something about the corporate property, Mr. President.

We keep on publishing statistics on corporate property.

These bogus statistics on corporate profits include 3.9 billion in profit that the Federal Reserve System made last year.

I wouldn't take any pro-deficit step or give any kind of secret response until the pay board was out of standards and cracked everything to a price range.

I don't care what you do.

Okay, how much do you think you're going to spend and how much you're going to relieve in terms of that?

I just, until we pay for it, that's the standard.

It's the price of the mission system.

It's the standards, the criteria, some guys.

There's going to be a high degree of uncertainty in the country.

And people are going to wait and see.

I don't think it's a lack of confidence.

I don't determine if it's a lack of confidence.

I don't even say, it's not good.

They want to wait and see.

They just sit there.

Well, that's the worst thing.

That's not going to be a reassuring thing.

It's basically, oh, I can't put it back.

That's correct.

It's not going to be as bad as they think it's going to be.

It's going to be better than it was.

That's true.

It's not going to be very positive.

You know what is very important?

that the price commission is going to be tough on prices, and the pay board will not be as tough on it.

That's basically what I'm saying.

I told them that if I were to do that, I didn't do it.

for the first year.

And remember, as a result of what the Congress said, a year and a half, and they...

I mean, listen, you'll hear a report about seven and a half million, seven point two million.

What's that figure?

I've got to go for a Senate Transcommittee for a bigger... Are they going to goose up the personal exemption?

They probably will.

They'll probably give it.

We'll probably knock it out in the Congress.

Wilbur Hill's behind it.

That's it.

Probably the last time it's not very far away in terms of total distance.

It won't stay away from here.

No.

Because it's a little bit less than your original ratio.

You'll have to change it.

It's a lot less because it contains 10.

It contains 5.

That's right.

They know what they're doing.

They know why he was identified.

That's all the reason you didn't get it.

Don't you think that's absolute?

Do you apologize?

No question about it.

Mr. President, I want to know how you got so worried that you didn't try.

I know because of the Congress movement.

That's right.

I want to raise a question with you and John.

I'd like to get to others.

I've already mentioned this to George.

Here's what I'm thinking of, committing on interest and dividends.

I'm not going to bring up this is going to be on the interest problem.

Yeah.

But the, here's what I've been thinking of, dealing on dividends.

Number one, putting on a good, I agree promptly, specifying.

That increases up to 3%.

3% guideline.

That's it.

Now, we need a guideline, number one.

Why do I choose, why am I taking the 3%?

I'm taking to apply a certain moral credit.

Now,

I'm thinking of a low, modest pay there, with me just setting an example for them.

Now next, if we did that, even though we put out a very quiet matter-of-act statement, I don't know what press conference is, and I wouldn't in this case be there, but contrary to my

room, this might be a case where we could have a story or two with an interpretation.

Well, why don't you, why don't you, uh, recommend or suggest any increase in interest?

I'm sitting to say, uh, I'm going to get those down.

Well, you know, that's something else.

You know, there's an enormous interest.

Again, I don't want to start picking the idea pieces, but I say two percent instead of three, and my only reason for coming to that would be that we said the rate of inflation ought to be two to three, and every fellow in this country would associate two to the two, but maybe not.

I wouldn't argue a great deal with that.

Well, I've got to think of the other side of the coin, because there's a business community which is tolerant,

by and large, which is co-operative by and large, and to start then with a 2% rate, well, they are going to get a hell of a lot more from the best, under the best of circumstances, and that will create other problems so that we won't need to balance one against the other.

The way I think this problem is this,

You don't have to give me, I don't have, I don't have a record.

This is not a psychological, this is a psychological problem, and I don't know how much to do with it.

I don't know, I think that, of course, corporations are not going to do it.

Lawyers are not going to do it immediately.

But I'd like to do it, I think I'd like to do it early enough to set an example to the people before they grant me a 10%, you see.

And I hope this is not a good one.

I think it's got some, some impact.

I think the units will, on the whole, say that it's not really making any difference.

Whether they're paid out or not paid out, they're still held for a day.

But it's, it's, it's something that I have to tell my, my, uh, noticing on the number, I guess, would be, uh,

recognize John's point about the 2%.

Otherwise, that's so far down in comparison with any kind of standard that you talked about.

It's the way here that you can close it up to have it going down.

I mean, that's part of the thing.

The great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great, great.

First, I think it's important that a lot of people, those who are concerned about it, be reassured.

I don't know whether it can be done.

I think it will help for you to try to reassure them.

The second point is so that the mass here,

But there is concern, really.

There is concern about some of the people in television know about the money supply thing.

Because you've expressed concern about the job, Paul, and what you would do with it.

I guess that, George, I'd like to make a point or two on this, if I might.

To start, I recognize

fiscal and monetary policy is consistent with the post-freeze program working.

It is consistent.

Basically, there's no chance that the machinery was working.

It would undermine profits that it possibly could.

Having said that, I would register this concern.

The third quarter, when looked at from the standpoint of private demand, was very weak compared to the second quarter.

We really don't want to cover the tight economy.

What we want is the private side of the economy to expand.

It really didn't do very well in the third quarter.

I know it's private.

What didn't they private?

Private demand, which you were talking about, total demand, private demand.

Well, can we talk about demand for business services or demand for money?

Demand for business services.

I'm talking about the GMT.

We have that.

We can see that in the quarter.

Now, as you say, interest rates came down, in part, no doubt, because of the breeze and the confidence that something was going to be done about inflation.

Right.

In part, because people could see that, as judged by the conventional money supply, the Federal Reserve's policy, apparently, was extremely different.

from what it had been earlier in the year.

So that must have had an impact.

Did that bring the interest rates down?

That would give people the expectation.

Just as the earlier very rapid increase gave the expectation that we were going to have a big inflation.

In fact, the federal reserve had turned very tight.

Well, that's just by the, by the invention of money.

Why should you judge that when it isn't?

Well, do you know how we can correct that?

We can correct that by flooding the banks of the preserves, getting interest rates down sharply, and then move Washington up, and nothing in the world will stop it.

My concern is this kind of technically conventionalized supply that has an important aggregate that over the years people have looked at.

It's not perfect, but it's there.

The interest rates are gradually coming down.

You watch the interest rates.

They're coming down, so you don't need to put any more money

Why hasten that process?

To the extent that we have a weak private sector expansion, the lack of putting money in helps to bring that along and helps to keep it weak.

And that in turn means that unless you

to stimulate things more.

Interest rates will behave nicely.

And you won't have to put any money in.

And as a result of all this, we are careful that we don't get the expansion that we want, which would, of course, mean that there's pressure on interest rates to rise.

And so if there isn't any tendency for interest rates to rise, we should be a little more alert about it.

Because it means that we don't have the forces of expansion

George, there's two points.

First of all, putting money in.

In August, we put 14.7% in.

That was the rate of increase of reserves in September, 15.8%.

You list the bonds that I tried to make before.

Money has gone into government deposits.

It's gone into time and savings deposits.

and it's gone abroad, and that's something that I, the Federal Reserve System, has absolutely no air control.

Now we could have, as I stated before, we could have taken this narrowly defined money into the hands of individuals and corporations.

We could have, yes, we could have pumped that out by driving into the states very sharply.

And I decided, I decided along with my board not to do that, and I will stand by my decision as to the rightful in the circumstances.

Let me read this subject here so that we've got it in front of John.

It says, what we've heard from our leaders in some perspective, and I think we should come back to it in two weeks and a half.

I look at it in a certain sense of a historical perspective.

I remember a rather similar thing occurred in 1960.

The media act that Steele was trying to settle, in a special way, in this case the summit, there was a considerable, a lot of time.

I remember articles in Time, Life, and Fortunately, they call them the starting stages of the cover story, and a lot of people.

And I remember that early February of that year, that you are the director of Jim Mitchell University, now in the office, now in the White House.

And you would know about what occurred

for what was the current general economy, and you expressed concern about where the economy would be in October and November.

And you pointed out at that time that you thought that, despite the optimistic projections of the rest, and I remember you said, one, the Fed was too tight, too tight, had been holding down too much man.

I remember at that time, too, you suggested that we ought to go on a tax

Remember, we ought to do something in order to get some stimulus.

Well, of course, you were right.

October was the month where I went up by 400,000.

And where it went over 6%.

And it had considerable impact.

Anything could have changed close to the election.

And when it was only 112,000 votes out of 70, it didn't change the election.

I remember what happened at that point.

There was a very modest disagreement with the administration.

Bob Hanson, Secretary of the Treasury, Horace Sands, the director of the budget, Steve Sauget, Mitchell and I were the only ones arguing on the other side because you weren't in government.

Of course, you were in as a friend.

But we argued the case.

And they said, no, the great danger is not unemployment.

This has become the great danger is inflation.

We don't fight inflation.

And they won.

Eisenhower went along with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this, with this,

I'm quite aware of one very important fact politically.

It may be a change sometimes in the structure, but I've analyzed every election in history.

Many have been won or lost on the issue of unemployment.

None has been won or lost on the issue of inflation yet.

Could be this time.

But I don't mind that it's always been a bigger issue than it is now, and it's bigger than it's been at any other time in our history.

Because even though it's modest compared to other industrial countries, it is something that irritates Americans, because we've come to challenge that, too.

Except for the countries that we meet, we have World War II and we have World War I.

But in terms of elections,

We're trying to be in terms of election.

Remember, if we're running an error in the year 1973-2, the error should be made on the side of expanding the economy rather than on the side of, well, let's be damn sure that we don't have a question.

I realize that the two cannot be separated.

I realize that John has already implied what he has said, that if those that make decisions with regard to investment become

that were often an inflationary kick with a rated price bar, a lot of control, that that will greatly inhibit their decisions and would lead to a less expensive economy.

On the other side of the coin, however, that in terms of this more narrowing of the money supply in terms of the fiscal policy and the rest, I say that we've got to get, we should decide on the amount between now and the end of the year.

Let's remember to,

By February, we're past the point of no return.

But that's where we make our decisions, having in mind the fact that we want the economy to be moving up.

I don't know.

I have the slightest idea what those numbers mean, not the slightest.

And it may be that we're talking about an entirely different subject.

That was the case when the Chesapeake Martin was running for president.

We paid.

But I do know this.

I do know this.

There was a man who was as violently against the expatriate college as George Humphrey.

As conservative as he was.

I remember the last time I saw him, I saw him in Cleveland in 1984.

And he said, I hate him.

And he says, but the Fed kept a lid on him.

three months too long, like, to get out of the station.

You're right.

I think, I think you would agree with me on all of them.

When I was working for the Columns, yeah, you told me.

You told me.

I told you.

I told you what you were talking about.

We tried to tell each other to hit the tank.

So just remember that little bit of history.

But we only have about two weeks to get down to the port.

In the meantime, we will see you all later tonight.

So I'm glad to set up a date tomorrow.

I really want to see you all.

It's a pleasure.

Mr. President, on the island, I have already set up a date next week to be in Tokyo.

And I may or at least can drop in to see Mr. Misaki.

I see no problem in just describing the scene.

But the main thing is to talk generally about a problem.

The Secretary is coming there.

Discuss a great range of problems.

Serve all those like, you know.

Learn to get as far as he can.

And very friendly.

Very outgoing.

We appreciate what they've done sexually.

And now we've got to work together.

So forth and so on.

You know.

Follow by all means.

By all means.

We say, I tell you, a very close personal relation.

And we want to be as helpful as we can in this period.

You know, this is, you know, I'm trying to think about all that.

Anything else you'd say?

That's always good stuff.

All right.

Fine.

Thank you, gentlemen.

You have a long day here.

All right.

You've got 13, Mr. President.

I apologize, too.

But if you've got 13, I suppose you do it my way.

Before we leave this hour, George and I just thought it's important the next time we meet you all to make a point today.

We ought to make two points.

One, we ought to talk about James Brusco.

We ought to talk about him very much.

Everybody's here.

There isn't any question.

Why didn't they?

I did.

The doctors said, oh, I've been around everybody, and they've got something on record, and that's right.

Well, he already said it, but that's right.

Well, you really come down to it.

And I can't get to that.

I think there are brackets on the side of the variability, too.

I'm not sure, but I can't tell where he is.

Or I think it can be wherever we want, if we tell it.

Yeah, there isn't any question that our idea is we're going back to some system of convertibility.

Is that true or not?

Oh, that's true.

Yeah.

Now, let me say this.

I know what he's done.

He'll probably tell you about it tomorrow.

And I know this year.

He approached me about this fellow Silster, the former of the Netherlands.

How is he a smart, able guy?

And I got the impression, we were sitting out there at the table, and he said, what do you think about us using him as a go-getter to try to keep our central library in form and get little things out of it?

Any source of information about him?

Well, to make a long story short,

I found out before the IMF left town that he had a meeting with Senator Wackers.

I called Senator Wackers and, in effect, gave him a charter, not just to talk to Senator Wackers, but to, in effect, speak with the United States government, to speak with the Finance Ministry as well.

I called him at home and talked to him.

I said, now, listen, this isn't right.

I said, I didn't say this to the Finance Ministry.

I didn't say this to the Finance Ministry.

But that's what I'm telling you.

I had worked with him yesterday.

I said, now, do you want me to see him?

I said, no, I'm not going to see him.

I said, I'm not going to see him.

I said, I don't want to see him.

He's going around all over Europe.

I said, well, who's the operator?

Who's doing the brewing?

He said, well, I am.

I said, well, who the hell is the operator?

He said, well, you.

Now, the point is that you need to turn yourself along and accept that I think

What he's, what Arthur has done is created a block that he's indicated to Zephyr that, you know, we could give all this to him.

Because that's what Arthur wants, so Arthur's spending money on it.

Because Paul brings the story back to me, they won't even discuss it.

He said, no, but they don't even want to discuss it.

That's the one problem we're making.

I'll get ready another part, and I just want to pull one.

Well, if you go back to the exchange,

Here it is.

Part of it is some kind of convertibility.

Tell me this.

What would it be if it does better than air balloons?

What is the future?

Okay, Don.

Every day, by your way, we have to do it.

Now, is it simply reflected in the fact that the International...

I bet.

As a matter of fact, I'm not sure you don't want to go the other way.

Again, you talk about structuring this thing so politically you can use it.

It may be the worst thing in the world for us to get this thing settled.

You know, maybe even next spring, next summer, if you want to denounce the British and the Germans and everybody else, I reckon that we can run a hell of a lot of risk for the sake of our election.

And if our economy isn't doing well, it may be that we want to look for it.

Now, if we go back, even if we settle, even if we get the re-evaluation, even if we get what Paul Wilson, I'm not being critical of him,

Because I don't face the difficulty of the fallout.

We don't have a senior redaction next year.

See, that's something to remember.

We get no kick from it next year or whatever.

The only kick we're going to get is from the search charges we're getting.

Yeah.

Number one, it increases our revenue.

Number two, it decreases the amount of imports.

That's right.

So we increase the amount of money in the trade.

And we stop the imports, which helps our domestic economy some.

Basically, just about 15% across the board appreciates the other currencies.

Helps us not at all if we won't show up at the end of the year soon, I tell you.

Uh, at the end of the year, after the election in 1973, Gold had to begin to relax itself.

Sure.

That's why you're going to have some action from the trade front.

Sure.

This is why you can't trade away your position of leadership.

I have no intellectual commitment to any of these positions.

I go to SDR, I can change the price of gold 10% or 20% as far as the ideology is concerned.

What I want to make is I think you have to maintain, in addition to the political foreign policy weapons that you have, you have to maintain some weapons in your arsenal other than just the operations that would pay for the price of a machine.

You've got to have something that you don't buy from other countries.

You don't have it with you.

It's a 20% thing.

It doesn't matter if it's about 10%.

If you have a fire-related thing, you've got a fire-related 20%.

You might want to do that.

There was no damn proof, Senator.

I mean, I'm in French votes now.

So they say, oh, boy, can I preach to a French woman?

Now, I don't think you want to go that length, but it proves the point.

I tell you, we cannot.

We've been the international responsibles for a hell of a long time.

And that policy is...

Not something which makes me lose it all anyway, right?

That's right.

That's why they reacted to that UN thing.

Number one is the fact that you reacted as you did to the UN.

The fact is the Democratic Party

That's great.

He's doing as long as there is, though.

They've got 20% of the Democratic Party.

But you know what, that's the thing tonight.

This happened to you.

But don't you think I was the director of making that statement?

Well, absolutely.

No, I never talked to him.

We sat right here.

We didn't fight for everything.

It wasn't good.

We didn't do it our way.

We did it very coldly, all right?

And the guy said, take it to his father and say that.

And it was right in the middle of the house.

And he wasn't showing it on every move he had ever since you said it.

I said it last night.

I saw it six o'clock.

I saw it at 11 o'clock.

And he showed it all day long, and then he told me.

Everything he asked for, everything.

Except for the interesting thing that C.P.S.

had to do this.

If he had to, the president would check to do it.

And that showed me how they could have blown it.

And it should show the Negroes that we could see.

I think that's right.

I saw it in the N.F.

too.

A lot of people had seen him.

That's what happened to him, yeah.

That's not what the picture said.

I don't think that's the kid they, uh, they were talking about.

Yeah.

Okay.

Anyway, let's come to a few things about your trip, about this.

Do you want to use the phone?

No, sir.

All right.

Let's come to the...

Virtually, I can't talk very candidly about this.

Henry, if you may help me memorize a little bit more, and I'll send it to you, and I'll send it back.

Here's the situation.

I'm hoping all of them, as I told you the other day, I want you to go ahead and tell my next family.

This is a critical part of what they do with anything else.

We want to help them a little bit more so that they will not be a political liar.

There are two things that they're interested in.

The Voice of America Station, which we understand may have been worked out, but it isn't.

It's negotiated right under that.

But the way it is now, the Voice of America Station,

I don't know what I hate.

Now, the other is, with regard to the amount of land around the bases, we're willing to negotiate that.

I had told Mr. Drew that we wouldn't be in a position to talk.

Don't you need to make it up.

We'll send you a little talking paper, and we will.

For those two studies, correct?

To make one of those, the chat may want to be negotiated.

And you can tell us about it, that the treaty is now before the Senate, and that we're pushing it hard, and that you've got a good chance to get an issue, and that things would rather go out of the treaty, and that you would be safe, so that you didn't have to remember and escape, exactly the kind of a talk you made to me.

You'll be free.

You're still in there and talking.

The second point is that, in terms of your opinion of the very 17th century, I don't know

whether you have prepared anything in terms of this.

First of all, I think if not, you can have total confidence in Walker.

He has our total confidence, right?

Absolutely right.

With regard to Indonesia and Thailand, could I suggest, Henry, that you have not brought and able to, Henry,

I want him to get into political with this one or another man, for example, I want him.

Which is so hard.

They have been supplied by the Russians to speak to all of these aggressors now.

Right.

So they had trackers running out of equipment.

State had a group of $9 million of trackers that were retractable.

That is $25 million of equipment.

And if you could tell us a lot of the pressure to get out of the advance, a lot of pressure.

Let me say, that point should be made.

You put that down a little bit.

That one should occur.

Now, also listen to this.

the top papers are being considered in the nation.

If you want to reassure the D.C., if you want to reassure Thailand about the visit to China and so forth, now there's cover-all.

And you know what I'm trying to talk about.

Now, let me ask you, what is the way to stay out of documentation?

Am I mistaken?

Yes, I'm taking Sullivan, and then I'm taking Barker, who's in, he's one of those state department men that I'm saying, he's a lesser than I am in Sullivan.

But that's all.

But just my other thing, sir,

He is very attractive, very persuasive.

If you indicate what you want, duh, he will do it.

He will be very careful not to crush you.

But be sure that you need to handle the way that you act.

Don't tell him anything in confidence.

about your deal with the Japanese or Sahara.

Don't talk about the Sahara.

Sullivan must not be with you when you see Sahara.

And he must not be with you when you attend the Japanese conversations.

Here's your partner.

And here, in both those countries particularly, in those two countries particularly, I want you to see Sullivan and Sahara alone without our ambassador present.

Now, I want a letter prepared, Henry, too,

We'll fire off the soldiers and send them to my house.

And the Secretary has some matters of confidence in my house.

Now, the point is, though, what I'm saying is this.

Letters, I want a letter to Halloween, and I want you to take responsibility to keep those ambassadors off his back.

What happens in Vietnam is fine.

It doesn't matter that much in Thailand, does it?

Usually, but, uh, well, should we suggest that you see, uh, see, uh, Tanat alone or Tanat here?

No, it's, uh, the longer we all can, but, uh, but that, Thailand is the most important.

Just reassure Thais that we love them.

And they can count on us and all that sort of thing.

But the other two places, nothing special in Thailand.

Well, uh, the Thais feel...

The entire country worried that we were going to bug out of Southeast Asia.

And they had a military program, I apologize to the President for this, because it was such an excruciating course of state head-beats, squeezing them to their lives, and they ended up in a military assistance program.

Our land, the other way, and they having a big budget and a problem, how to account for it.

They can't get money back for it.

They need to be kind to us.

They need to be sweet to us.

But be that as it may, if you didn't settle by the time you get there, because you're not returning, tell them you are going to bring it back and you're going to get a decision to confirm it.

And I told you to repent of it.

I went over this paper myself that Neil sent to Victoria.

It was an independent paper with the Thais.

My personal relationship is very close to that.

I think it's from Canaan.

I think it's one of the great world states in the East.

Martin Scales speaks good English.

Canaan's a decent man.

And so, and all those laws out there, very economic, a little more, you know, a little more shirking.

All these fellows you meet here, their ties are destroyed.

But if you could just emphasize that the next doctor you meet is only about to say that he's not getting out, that we've got to stay, and that we're, as far as I've heard, that's one thing, and all of our conversations with Chinese or anybody else, that's not negotiable.

And we don't have the Chinese speed of influence.

We don't recognize the spirit of one of them.

They have a spirit of a soul.

We don't recognize exclusively the spirit of those who are not there, exclusively the spirit of those who have something that's not negotiable.

We are the civic power.

We have to continue to be.

They can count on us.

That's what they emphasize with that, absolutely.

And I want you to put that in Andrew's talk, you know, like you've heard me state for several nights, so that he can reflect that directly, too.

You know, he's going to have a massive hearing statement, too.

And they're going to maintain that, particularly before they get to a decision and at the end of the time.

They're going to maintain a presence, a presence, a military presence, as well as an economic presence.

I also think, of course, that now, another point I think is

Just a little guidance.

Bob, you've got total confidence.

You've got no problems there.

Just, Bob, what do you think he's going to hear from you as you talk to him?

Just take his guidance to him.

I mean, I think that's the...

I don't know.

I don't know what I'll do.

That's right.

about democratization being, uh, it's just too goddamn late.

It's too late, President.

It was evil.

Why?

Well, why?

You were the one that got an election.

I'm not the one who did it.

Actually, it turned out that he was running.

He was running.

Now, the matter of the foreign minister doesn't matter.

He's sort of jackass.

He's bright, but he's basically a neutralist.

So Harlow is potentially with us.

Potentially.

Well, he really is.

He is with us.

He's enlisted, but he's with us.

Now, the path that he's part of, though, he's going to hold on.

That's right.

I'm not going to have long.

I'm going to have about three hours on the map because I'm delayed getting in there until after their election, so I'm not going in until at night.

Well, the main thing there is just to listen.

Right.

I'd like to tell the business owners that you were intending to say that we're going to stay.

They will give you a shot at this.

They always do.

And you, of course, will find it totally, very attractive to the Marxists and all of the rest of our friends.

And they still are.

And the idea that, by God, at least if the president wanted you to go with this, basically, you're very disinterested, that he wanted a clear demonstration at this particular time that the United States

is not of the foundation.

And we're writing down Vietnam, but we have gone through the torture of doing this slowly in order to do it honorably, to save Vietnam, to protect it over time.

And that is what we're, that is the day that we're going to do for the balance of the nation.

I think that is the line that you can take.

Let's give a little treat on that.

The Japanese thing,

is one where I can get you, of course, there to go on and talk about your subjects.

And you just talk and come on there and just do the best you can.

And I personally can do everything, make any kind of appeal with that.

I just don't believe.

I don't mean to make a deal right now.

I just can't believe that our right to say, well, the Japanese won't make a deal, and Europe makes a deal.

I don't believe that.

Do you know?

No.

I think that we need more than Europe does.

Well, I think they can do both.

We don't have any vulnerability.

I think they can stand off the mark.

And I think we can make a deal today.

I want to get on with this.

Now, yes, what they're deeming, what they're deeming objections on your part, we just, it's probably not going into a victory in the teaching committee today, but to point out that with the consolidation and coalescence of the European community, that they're trying to become the number one economic power in the free world, the emergence of China, that this inevitably pushes us into the Pacific from an economic standpoint.

with the Japanese, and with the Thais, if you know what I mean.

And say, frankly, we think the group of 10, though, can be changed, perhaps.

They've got to be one voice.

They've got to operate with one policy, and they ought to have one vote, you know.

And if we are with America, we move forward.

That is the idea.

I thought I needed to meet you, maybe not in the United States, but in the United States, and particularly the present president of the United States, because he lives in the Pacific, he's been in the Pacific a lot, sees that we should have, the Pacific deserves far more attention in our whole economic thing, and we'd like to see what kind of deal we can make.

I think it's just a cold turkey's got to be.

And you're right.

Frankly said, I said, look, we live in the South American, we live in the South Pacific.

That's what I thought.

That, I think, was the exact...

And also with the Japanese, as I was saying too, I will talk to them, and they'll open the subject, I'll talk to them about it.

Frankly, I don't think I'm a direct major, but the SST did, and also anything we can do with the Japanese, if we assume that they lead like this, they will do.

Well, the project is the best, and I hope it plays out in Japan.

In China, we have to do this.

Well, yeah.

Well, you covered that on the talking paper.

That is the fact that we do not want it to appear like a cabal against China.

No.

Or it would, uh... What was it?

I just want to mention on the S.S.D., uh, you know...

I don't know how to get a grip on that.

But I think certainly the Chinese expect us to go up over and talk to the Japanese about the whole international issue.

Well, they do.

We've got to fill that hole, and we've got to do it.

We've got to play the Japanese.

Yes, the Chinese.

They don't do it.

That's one of the very good points of this visit coming after yours.

And one thing you might say, I'm seeing the Japanese ambassador tomorrow, and I'm going to get the brief rundown of my talks in the evening.

But you might have all the others that we made a specific point to discuss with the Chinese.

Not to discuss with the Chinese.

We have not done that.

Uh, if you ever discover anything else, you won't tell him about the shit.

You know, that is something that he might give you a little, a little bit of, you know, stuff that you would not admit that he, you know, they're gonna ask you about.

And it's better that he has something to say than to say he doesn't know.

But of course, that's the law.

We'll send you off on that.

that we, you know, that our ideas are not directly against the Russians.

But I think the first step, you know, I think it's very important.

I think you ought to say it.

That's what's happening because they wanted to make it technical, right?

That's right.

We can say all that.

I think we should also say that, you know, the usual thing is that third countries are not the same.

Third countries, this is not the first step that we recognize.

There are great differences between

between the two countries and this business is going to be solved and no condemnation is going to be resolved, but we have to start some discussions, et cetera, et cetera.

You know, that's getting a little, a little of that, because a little of that goes a long way with these people, Henry.

You know, okay, we'll do it.

Is it too much to say to, not only to Chu, but in Thailand and to Sephardi a little bit,

that you can be sure that there's no guilt on the part of the United States for so far as making you a sacrificial lamb?

Oh, yes, absolutely.

Absolutely.

No, on the contrary, you can say that as far as the President is concerned, he has stood.

for independence of Vietnam all the way through.

He resists the Senate, he resists the Congress, he resists the American public opinion, and he's not going to make it to the Senate that way.

It isn't a question of getting one man, but the independence of Vietnam, we are not going to make any deal with solving it down the river.

Absolutely.

Never.

As a matter of fact, if we were willing to do that, the war would have been over two years.

But I imagine what this new kind of thing is, they think, well, you're going to hold them all together.

The big thing we need for any of the congregations that we're doing is to keep you strong.

And that's the major reason why we all are so attractive, that you would go, because that's the best.

The things that we're standing by, and we're sending, but I can't say to anyone, any spokesman out there,

and it will have a very, very dramatic effect on our society.

But now if only one will even want you to get his paper out there.

Well, you'll have it in Saigon.

In Saigon.

Lottie's in Saigon.

You don't need it to go because in Saigon it's not going anywhere.

No, no, no.

You don't want to come here.

I'll have to get it first.

You'll have to get it.

I'll have to get it.

Saturday evening, it will be inside out, first thing Monday.

I'll wait a few more.

It's time, sir.

It's about 24 hours, plus about 36 hours.

All right.

We'll get it on the side of Saturday night.

Maybe we can get on.

Well, he could have had no later than Monday morning.

And he was working on the plane for the next job.

He was working on the plane for the next job.

He was

But till you saw it in 1716, it was the first time they had done it again.

They were doing exactly to Jew what they had done again.

Don't let Sullivan...

I don't think he'll dare to try it with you on this stuff.

You have to remember that he does.

I want you to tell Sullivan or Parker, if you want, that as far as... And let me say, this is a very important thing.

Personally, it's a very attractive and able man.

But remember,

I support and have supported the people all the way, and I support them now.

And I'm not gonna take any of that crap that, well, you should have done this to the asses.

Who's next?

They can't do this to the asses.

It's Phyllida who's next.

Guess I'm watching.

I know you feel that way anyway.

I'm sure I am.

And he pulls that way.

Just remember, you've been speaking very bluntly.

Such demonstrations have stopped.

All their stuff that the newspaper could pull up trying to make stuff that many people in the embassy could stop seeing opposition to the people.

Letters from me, I think, should go to, uh, particular, well, I think we should cover, uh, which, uh, I think we've got a lot of ties to, uh, to, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh, the, uh,

But I want the Secretary to have a private meeting with us, with Ambassador Preston, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh, and, uh,

It should also be in the same basis.

Thank you very much.

Bless your death today.

We've got to get you out of here.

We're grateful for all your help.

We hope you all have a good time.

That's it.

Back home.

She's going, but she woke up this morning and couldn't get out of bed.

She's trying to get up to stand by her.

She's been to the doctor.

Bless her.

I've got to go back to Taylor's.

Tell me, where are you stopping on the way?

Yesterday we were stopping on Elmendorf, a

I was talking to Elgar tonight, picking up Adam McCain and the riders to Tokyo.

We refuel there, and we go basically non-stop to Saigon.

You're going out to Tokyo, of course.

Yes.

That's what it says in the truth.

I see.

Well, so we'll be in that center this summer.

I'll tell her that.

When she gets down there and has that great Asian food, she'll go.

Goodbye.

Thank you.

I'm sorry to get in touch with him, but he gets it fast.

All you need to do is to give him the talking paper.

Just tell him what you want, and he'll just point him, and he'll go like hell that way.

I'm sorry that they wish Sullivan off on him, but that's all that's got to happen.

We warned him not to.

He's not going to go.

He won't be taken.

He doesn't want to.

He's not going to go down.

Ty, you've got a better... You've got a run.

Yeah, I know.

I know.

We've got to go.

It's 5 to 6.

Oh, no.

That's it.

I've got to go over to the top of it.

Oh, good.

Before we go.

I have to describe it.