Conversation 624-020

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You should not be in there.

You look, you look good, Tom.

Mark, if I got your dollars, I could sell them to you.

I could sell them to you.

Joe said, oh, you got the dollars.

He was wrong.

He said, what?

And if it was supposed to write, the Jews, if it was supposed to write, I'd accept it might be the same.

Sure.

But I can't hear you.

A dozen people came up to me, and they apologized for George Meany's behavior.

And every last one of them called 60 or 80 people directly on this.

And I didn't express it.

Full support for you.

I don't know how you're going to vote.

You'll probably vote the way that you always would.

But the arrogance of the trade unionists and your courage and your identity and your forcefulness go across those people.

Now, uh, I was saying a little thing to John that you might find a way.

George and me took a nose of ours when we joined that pay board.

He's glad that he lives.

Well, I say, well, not only have his faith, he's saying he won't cooperate.

Now, the American people are fundamentally a moral people.

And when you take an oath, you're expected to respect it before man, before God.

He's glad that he lives.

I mean, uh, the thing I want you to do, you're going to need to watch your, your, your, your, your, your, your, your, your, your, your, your,

And I want to get, before we leave, I want to get, I know you and John have had breakfast.

You're just one strategy piece, and we've got to follow one line here on this trip.

Now, you know our, our, our, there's a new ingredient that he announced on a couple trips in Utah that you know about on trips.

The French has announced that you know about these.

Well, this is, that's very important to me.

Today at 10 o'clock,

We announced that, uh, that I will meet with Montague on, uh, December the 8th, approximately.

In May, or December the 8th?

Well, it's approximately that period.

In that, well, uh, the Montague days, they had paid Rob this whole thing.

So it's not the 4th or the 3rd, the 4th of this week?

No, before your meeting.

Oh, hello.

In fact, we were meeting, I'm sorry, we were meeting at 7 after your meeting.

This is after the Willie Bryant Pompidou meeting.

No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

I'm going to meet with Ron in Florida.

Now, that means, I'm sure we will touch up the three major European countries.

The purpose of these meetings will be to consult with them regarding my two trips, of course.

And another subject will also be the monetary subject.

They will probably then bring their finances.

We're not saying that's the second, because we don't want to build up the idea that the purpose of this is to make a deal separately with each one of them.

So one of the reasons that it's very important for you to have this in mind, because we are going to make deals.

I mean, they, these leaders, may like to have a feeling that they play a part in making the decisions, rather than having it done at, say, a group of 10 people or something like that, you see?

And it's also in our interest if we're going to get to get something then up to the ground, and also if we're going to get

There's about where she stands.

So I don't expect her to go on those three times.

The countess will be present.

There has been no evidence.

We haven't had a possible variant.

I don't know if they're going to bring it back or not.

They are.

See, it's a government.

It's purely a last-ditch.

It's going to be pure no-go.

It's a wise thing.

That's

Just two days apart at work, which is good.

It's a situation where we're basically consulting with our allies before we meet with our potential allies.

In our case, this really is the motivation.

This was totally unrelated to the monetary thing.

Okay.

The purpose of this is consultation.

But the reason that I have a problem to have any work on business, he says, you can't have any meetings in the monetary system without us coming up.

And so for that reason, I said, all right, then it's going to come up.

Then I want to, they're going to have their, they're going to have their finance ministry come up here, too.

It started in that ballpark.

It didn't totally work out.

It didn't work out.

He probably didn't have it.

He wants his, whatever his name was.

That's also me.

He's trying to bring it down.

So you're off for that.

Now, he's got it on there.

He's, you know, he started it.

It's very delicate.

He started it.

And that's the result of being the driver.

He did not come up with any more environment for that.

At the turn, I should have.

For a legal reason.

I should have.

But he's rather close to France.

So I want to add to that argument.

The only one that's been announced is France.

The other two isn't.

That's a big secret.

But for your information, the British announcement will be made Friday.

The German announcement will be made either Sunday or Wednesday.

That way along.

Now, with the Chinese, we're handling that a little bit differently.

Of course, John's already talked about it there.

But we're keeping that very closely in touch with the whole thing.

So what I'm really getting at is that I want us to play a game here.

And I was, John, just as we were breaking up, said that you apparently had an idea that maybe we should play a pretty cautious line with regard to what we offer.

But I'd like for you and John

to indicate what kind of thing we should bargain for now.

We have to realize that we have, that there is basically going to be a difference with regard to the bargain goal problem, which of course, you know, it ain't got any standard regarding the variability.

And I know there's a difference of opinion among our own troops on that.

So I just think we ought to, I would prefer, you know, maybe we just branch that out.

At the present time, I think that you and John and I should get our tactic ready for the new luncheon so that we can all talk about it.

You also want to get him to speak.

He's not going to be at these meetings.

Would you like to have his meeting with John?

Well, I'm not sure.

Because you haven't talked to Henry.

No, I would like to have you talk to Henry.

But not about, since these meetings have been set, Henry will have maybe some input as to what the politics is.

So there's where she stands.

So do you want to start getting a report on where we stand today?

Let me talk about this.

the process of formulating our plans, I suggested to Arthur that in the light of the cost, before we could enter this new department on her side, to advance.

Yeah, I've heard plenty of that.

You had to not do it.

You know, the people on the side, or you have gone.

I've got my wife.

But you don't play, you know, you just don't bring courage.

Like I told the Redskins yesterday, I said, boy, what really improves whether you're a great team or not is not what you live up to.

You lose somebody, you come back.

I suggested to Arthur that in the light of all the circumstances surrounding this meeting,

and the concern of American businessmen, the colonists, the economists, and so forth, with respect to the continuation of the surcharge and our stubbornness and intractability and so forth, that we had two problems.

We had a problem, one, of trying to settle the realignment of the matter, and certainly we had, irrespective of that, we had a problem of public relation.

And because of the latter, I thought the other one was some kind of a

So Arthur, I think, wisely, and I suggested that we go and say we were trading, in effect, the surcharge for 17% realignment of the yen and 11 for the mark.

So Arthur, I think, wisely pointed out that he did not think we ought to specify a particular percentage or a particular currency that

So what we think we are prepared to suggest to you is that they're going to make us an offer.

It's not going to be enough.

They know about this offer.

Yes, ma'am.

There was a courier was coming.

He probably had his plan.

He's given me a preview of it, and we haven't changed it since then, but we'd love to know if it's right.

We then counter, not with a specific country by country, but an average, perhaps.

In other words, we said we're going to take an average of 11% or 12% to realign.

without specifying the end mark, rank, pound stroke, which one makes up that evaluation.

Give us that evidence so that we appear to be forthcoming without tying ourselves to particular procedures with respect to particular countries.

That's about the extent of our conversation this morning.

We agreed, I think, that at this stage of the game, you could not just go and write your own statements and your own affirmations

Well, I have a fact, too, that the subject has been called upon to do it.

Well, I'm sorry.

Well, let me just make two other things.

One, although that is true, there is, I think, a universal and unanimous statement of the countries in Europe that France is going to be immovable on the global question, that in order to settle this realignment, that in any way in the life of the realignment that we want,

that we hope they're going to have to give something on the go, that we're going to have to keep managing the dollar one way or the other in terms of gold.

That's one point.

The second point, that if we don't do it, we face two things.

we face an action in the International Monetary Fund itself where they can, in effect, change the special drawing right alignment to gold and have a de facto devaluation.

Or, if anything, we face the possibility of the European communities getting together and just say, well, we'll confront the United States.

We'll change the price of gold.

We'll see if they can make it go.

Now, if they raise the question about consolidators, those are possibilities.

I don't think either one of those will happen so long as we're making any kind of progress.

And I think the meeting,

in Rome has to indicate, in our own selfishness, has to indicate considerable progress.

Nobody anticipates that we're going to have a final solution, and we don't have to have a final solution, but I think we have to make progress, but that's the extent of my feelings about it.

Arthur.

You may recover.

I recovered very well, and let me, let me just restate this, because it's very important that you represent this present person.

I'm absolutely convinced, and I've carried on very detailed explorations, that we can't get a settlement without doing something about the price of gold.

No more.

Number two, we can do it through the IMF, and that, I think, will satisfy the other countries, and that we can delay going to the Congress, and perhaps delay that until after the election.

I mean, see how the IMF do that.

They change the price of gold.

You see, they have to value their assets.

And if gold is not being valued, that means you would not have to go to Congress.

That means that you would not have to go, but I've got to be careful about this.

How much of a delay it can have, you see, how much of a delay it can have, I can't say.

But the Europeans, on the basis of my present indications, would agree to having this done.

through the IOM.

Now, if we don't do something about the price of gold, let's say, in Rome or elsewhere, and don't give any indication of progress, then the IOM, in all probability, will do it on its own.

And we can't stop it.

Well, we probably can't stop it.

I agree.

Well, I'm not sure that I agree quite that they will.

I think the risk is there.

I think ultimately they will.

I don't think they will in the next 30 days.

We need some progress.

We'll make some progress in a little while.

I personally don't think we ought to change the price of gold.

by any machinations of the internet, either we're going to change the price of gold, it ought to be the deliberate decision that you make that is submitted to Congress for their affirmative action, or just face up to it.

I mean, if we try to shoot around it or try to be, uh, secure, there's a devious in our approach to it, and I think we're going to lose the spirit of it.

Having said that, let me, let me, let's cut out the converter the way I feel very strongly about that.

Yeah, John feels that this is one place where the two of you have basic disagreements.

Who do you know?

Well, I don't know if we do or not.

I think this may be true.

You're not frozen on it, are you?

Well, here you are.

Well, I will not say that.

I will not say that.

You're never frozen on it.

The term convertibility, you see, can be used one way or another way.

I am here alone, Mr. President, and we can't get an agreement unless we agree to make a modest amount of reserve passes available so that the IAEA can adopt it.

Now, I don't consider that to be very good.

Now, this, I think, is where Arthur and I may differ on our factual question.

Now, this really hasn't, so far as I know, this hasn't been made an issue of yet, and I think it will be.

I think we could get a realignment without

immediate commitments.

But immediately after we get the real item, they're going to be right in with us again.

Now, you can have a posture of committing some actions to let the item have function without having to convert it.

Let me give you an example.

That's what he's talking about.

My objection to that is, and I do have objections to it, it's found simply on the fact that I need suppression.

I need just one step closer to get us back to full vulnerability.

Now, let me give you an example of what I'm talking about.

Let's say Malaysia.

They have nothing but dollars.

Under the rules of the IMF, let's say they owe the fund, they owe the IMF $10 million that's coming up in January.

All they have are dollars.

Under the rules of the fund, they can't be paid dollars because the United States is in debt to the fund.

So they can't pay dollars in payments.

They've got too many dollars.

They have to have some other currency, more gold or SDR.

Malaysia is in a position where she can't live up to her commitments.

She wouldn't do it if she had dollars with no other currency.

So she comes to the United States and says, look, I'll trade you $10 million for special drawing rights and gold, or you buy marks, or you buy pounds of gold, or something.

Give me something for these dollars.

This is what I was talking about, because I understand it in terms of having this type of convertibility in order that the fund can continue and can function.

Now, this is not convertibility in the sense that we traditionally think of convertibility in terms of converting the dollar into gold and us being permitted to freely buy and sell whatever they want to, whatever they might make.

This would leave us the option on a case-by-case basis.

As to whether or not we would, we would, in fact, we need our, not only that, but we have a vision that we could live in the amount, not only, even if you're not standing where you're sitting right now, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who, who

making a sufficient amount of reserve assets available to permit the IMF to function.

Now, the...

I'm not going to be very honest.

We're going to get a gang of 700 million in SD cards.

We can say we'll make up to that amount of money.

I don't see that we're sacrificing anything.

If we get that agreement, there's no way to attract them to us.

They're going to have to stop us from sending a job on trade.

If he burned, I don't think I'd vote for him.

I don't think I'd vote for him.

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

That's an alternate position.

This is what I'm doing.

Tell me this is a very good idea.

John, that will come up at this meeting, I trust.

Yes, sir.

It has to, because politically, it's the only thing that's worth a damn about this.

We know that the most important thing is the real life.

I don't know what trade he's got.

It's nickels and dimes.

But politically, people understand real life, and they understand trade.

So anything we can get on that, I believe we can get it done.

Take a look at that.

Just get what you can.

I know they're coming here.

They're all in trouble.

We've got two.

We've got them there.

Is that what, otherwise our policy wasn't worth it.

If we don't get some of the trade.

And Henry's burden is mine.

It wasn't worth it to get a real one.

I understand that.

I worked on it.

Now on the trade, the only other thing I would say, and Henry may raise this, and if he doesn't, I want you to know my position.

On the offset thing, as I said, John, we must not be sick.

That's going to put about 50 million bucks on that.

We ought to be.

We ought to get something on that.

Well, we ought to, but let me say it.

I'd rather get some on the terms of trade and get it out of that.

See, I don't care where it comes from.

It gets into a hard political problem for that old Henry.

Speak to that.

I can't talk about it.

I just, I hope you politically can get something out of it.

On the defense area.

Well, we should have done it.

I think we can get what they want to do.

It's a question of how it's done.

They won't want to be in a position where they are paying for basically the barrier, the foreign force being stationed.

But they will do it in other ways.

And I think what we want to do is be very, very generous.

We should have learned about how they just get the dough.

Same with Japan.

Right, John?

Or is there a problem there as to how?

No, I don't care.

It's a sensitive political problem for these catfathers as to how they help.

Let's work it out and we'll sue their politics just so they get our money.

Good, I agree with you.

But they have, Japan, for instance, they have $644 million last year of net to inflow from our military community.

Well, that's half a billion.

Well over half a billion.

Then they got all the trade advantages.

Then they got all the currency advantages, too.

So, you know, we're just trying to keep all your options open, Mr. President.

I'm not frozen on it, Mr. President.

Except I just want you to know that I think we will let Henry speak to it.

Get Henry if it's raised.

By the way, we don't have to worry about them to see where I'm going.

They won't come, Mr. President.

We all know the problem.

The history report which is arriving today is supposed to contain some recommendation on what he's discussed with other governments.

Not Mr. Ross, it's just a couple of words.

Well, it's a positive thing that we can get.

We can't arrive at that point.

But we've got to do some things that are politically good for us right now.

And we need to get it better, you know what I'm saying?

All we've got to do is say that our key to mutualizing, let me tell you, what we want to do is to get an actor ID at the highest level we're going to see today.

So that's what I want you folks to do, is to keep everything, play a hard line, so that at the highest level we can get them.

I think hopefully we've made progress.

Let me say this.

That would have been one very good policy.

Everybody knows we're not going to meet without discussing this on accident.

I don't know the fact, but not only did I go with it, because I thought it would be part of the announcement.

It is.

It's already the French announcement you're taking today.

The French announcement could be on all three, but it would also play down.

for the wrong meeting, because it'll be honest, I think, to everybody that we're not going to make a final decision.

But on the other hand, I think that what you all want to do on the wrong meeting is to say that we, everybody knows we're meeting today, and they'll know that I've had lunch, this and that, and you'll say that it's snowing, first of all.

Everybody, and I wish you would say that in order to get it out to your press people and to get it out to your show.

You can say it back to the President.

The President feels it's very important now to have some priorism and some constructive movement in this field.

And you're going to have a fair talk with that spirit.

Fair enough.

Just have that talk.

It's what people think is going to happen.

I'd like to know if you want that to come up.

I was going to ask you, what's the deal?

And I'd say, well, we've had very helpful discussions here in Idaho.

And we believe the Rome meeting will be very positive in terms of making progress.

And actually, the meetings the president will have with the heads of government of the three major countries in Europe, or three of the major countries in Europe, will also

uh probably be helpful in this field sort of long timeline now the question that will come is it going to be settled in those three meetings i would say uh i would build up that it would be because i think we'll let them say oh no we're not suggesting that but that the uh certain principles might not be agreed upon his husband certainly isn't much better i guess it's not too higher or

Right.

I think you all can play that.

Well, obviously, no person of the right mind can expect it to be said that each is a dream.

So you have to see them all three.

Right.

But how?

I'm on the high side of that.

The only thing I want you to know is that you have told me you're doing it.

And I've got a direct problem that I have only is that I've got to tell people that talk to me that you've given me the insurance.

You can't have, you see, you can't have them.

The thing is that...

And I know that you feel that the White House is trying to pressure you on this.

It isn't that at all.

But we do have to reflect what the damn people were right to say.

We catch the heat.

We get notes from people and calls and so forth.

And what we're going to have to do is just send them over to you and let you respond to them.

That's what I mean.

Yeah, that's normal.

Let me tell you something.

Some of those running here are not very smart.

They've been talking, let me be specific, I have been talking to some of the people at Walters, asking them to write to me about the money supply, you know, a couple of them have done that.

I haven't gotten a letter.

He is the fault of all of our complaints come into on this subject.

And it's for, I think probably what happens is just go up and say, what is this for?

I don't, I don't, I can't imagine that he'd call people and try to sell that.

I have been told that there is a campaign on to write me letters.

I'm not objecting to that campaign, but I don't think it's smart.

I don't think it's, well, you're catching it here.

And we must be under, you must be no longer, what it's again, not what it is, but what it is.

And the issue is a key one.

You're catching it too, John.

I'm listening.

All I have told people, have you met me at times, not too many, on the letters that I refer all violence officers to respond to, but when we catch it,

What we've got to do, Art, is to tell them that you've made the assurance.

I've made the assurance, and I will send you a precise quote of what I told the stock exchange people that couldn't have been a stronger statement.

Oh, I know what you said there.

I just say what I mean.

They'll be, they'll be, they'll be, they'll be willing to tell me.

I haven't told them.

I haven't told them anything.

I've made good on my promises.

I have no doubt about it, but I just want to be sure that I'm not misreading you.

Worry about this and that the other thing

And I'll say, well, it burns.

It burns.

Let them forget.

Well, that's the point.

No, no, no.

I don't want to tell them to just kind of forget it.

Unless we have an absolute understanding.

That's the way you're going to move them.

There's no question about it.

Because I can keep them off.

I like to keep them off of your back and ours, too.

I told you I've already moved.

I know.

It's a process.

I want to tell you one thing more.

I hate to complain, Mr. President, but I don't come to you with complaints about what happens often.

Let me tell you what happens today.

We have a stock exchange that is in great trouble, no matter what the basic causes of it are or not.

There is one little thing that we at the Fed can do, and that is to lower mortgage requirements.

I came to the board.

I was running that board for my new boy.

I got them to do what I want them to do.

It takes me to, you know, to do consulting and travel, so I bring them around.

I brought them around, and I was ready today, you see, with my board, and we worked hard for the requirements.

I guess they think I made it around, but they just made it impossible.

Yeah.

Here is what came over the computer to read that second paragraph.

I don't think he had to say it.

You know, she didn't know.

You see, he just said, he didn't discuss the threat.

Yeah, of course, that made it impossible for me to know.

I know, and that's the way I interpreted it.

He was not discussing it.

He said, he was responding to what he had.

And they said, do you expect him to lower market requirements?

And he said, no.

No, he didn't say that.

He has no basis.

He doesn't know what the threat does.

To tell them no.

Because he was certain he was doing his little no comment.

That's what he liked me to do, to no comment any question.

But you think that he'd come out and say, well, you see, normally he would come out right after the campaign closes.

And here, here is the Federal Reserve acting under first year, well, I'm a brother to the secretary.

Well, I don't think we can do that.

But he says you're not going to do it.

Yeah, but I want you to do it.

Well, my part is he says no, and you can't.

And I wrote your independence.

No.

He said he did not think the meeting would focus primarily on the stock market.

What the hell?

I know.

Well, we're not going to do it, but we're doing it to each other.

Well, the point is, what would you have them say?

I would have them say that the Federal Reserve Board is very unimportant because of the law.

They actually kind of need a...

But it was supposed to be on a press conference.

What's the meeting going to focus on today?

Is the meeting going to focus on the crime stock?

What would you say about that?

It'll focus on economic questions in general.

I must say, I think the President's answer, no, certainly not even keeping Joe under pressure from the President or the Secretary of the

How the hell does he even know what the Federal Reserve Board is going to do?

Yes or no?

Well, he does have some business to do.

I know that.

What I mean is, I think the Federal Reserve Board is under control.

I think the Federal Reserve Board is under control.

I think the Federal Reserve Board is trying to cool the idea that we would have you in here for that purpose.

There's no question about it at all.

And he said no.

There's no question about it at all.

But I'm describing a punishment.

And the consequence is not good.

Well, I get a good eye on John and talk about Federal Reserve actions, and we should always fully bring a task against him.

But the minute it appears

Federal Reserve Board is under pressure.

I've got a stone wall in there, and I understand it, and I'll let my colleagues know.

Yeah, but you've got to pressure him the other way that you do it.

That's what I mean.

If anything, he says nothing's going to happen, and you do it all the time.

That's true.

He knows what's going to happen.

That's my point.

If he says that nothing is going to happen, then he has nothing to do with what the Federal Reserve Board is about.

Well, Brett's point is, what he's going to do is, it obviously proves he didn't know what it was.

That's right.

See?

He just really didn't know.

That's what he had to decide on.

I think he was trying to forgive himself.

I think that he was arguing.

He was arguing all the time.

He was arguing and discussing it.

He was trying to figure out how he could expect the answer.

I don't know what part of the floor it is.

The floor?

The floor

We're going to set it over there.

Thanks a lot.