Conversation No. 656-27

Date: January 26, 1972
Time: 2:00 pm - 3:20 pm
Location: Oval Office

The President met with John B. Connally.

     Greetings

     Agenda for forthcoming meeting
         -International monetary situation
         -Quadriad
         -Budget
               -Deficits
         -Inflation
         -Unemployment
         -Forthcoming report

[The President talked with the White House operator at an unknown time between 2:00 pm and
2:02 pm.]

[Conversation No. 656-27A]

     The President’s schedule

[End of telephone conversation]

     Trade
                                               42

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                         Tape Subject Log
                                           (rev. 10/06)
                                                                       Conv. No. 656-27 (cont.)



[The President talked with the White House operator at an unknown time between 2:00 pm and
2:02 pm.]

[Conversation No. 656-27B]

     Request to hold all telephone calls

[End of telephone conversation]

     Connally’s schedule

Arthur F. Burns, George P. Shultz, and Herbert Stein entered at 2:02 pm; Stephen B. Bull and
Oliver F. (“Ollie”) Atkins were present at the beginning of this meeting.

     Greetings

     Photographs

     [Pause]
          -Agenda

     The President’s speech of January 25, 1972
          -Connally’s telephone call to Henry A. Kissinger
          -Charles W. Colson’s request of Shultz to call Clark Kerr
               -Colson’s talk with the President and Kissinger
               -Kerr’s possible public statement
                      -Columbia Broadcasting System [CBS]
               -Kerr’s previous comments about the President’s unknown speech

     Kerr’s activities
          -Vietnam committee
                -Ceasefire
                -Political orientation

     Economic problems
         -Stein’s memorandum
         -Budget
         -Federal Reserve Board [FRB]
         -International monetary affairs
         -Economic forecast
                           43

         NIXON PRESIDENTIAL MATERIALS STAFF

                    Tape Subject Log
                      (rev. 10/06)
                                                   Conv. No. 656-27 (cont.)


-Congressional leadership meeting
-Federal spending
      -Increases
      -Revenue sharing
-Drop in economic indicators
      -Drop in retail sales
            -Reasons
            -Commerce Department
            -Automobiles
            -Durable orders
                  -Steel
            -Home building
      -M-1
      -Gross National Product [GNP]
-Expansionist fiscal policy
      -Reaction
            -Organization for Economic Cooperation and Development [OECD]
            -France’s concern
-Wage and price controls
      -Performance
      -Dock strike
            -Impact
            -Settlement
-Upward movement of economy
-Retail sales
      -Seasonal adjustments
-Monthly figures
      -Indications
-Projected rise
-Business
-Possible cyclical recovery
      -1971 indicators
            -Contracts
            -Orders for capital equipment
            -Capital expenditure appropriations
            -Durable goods
            -GNP
            -Retail figures
                  -Wall Street Journal survey of retailers
                        -Sears-Roebuck, unknown stores
                        -Christmas sales
                                            44

                         NIXON PRESIDENTIAL MATERIALS STAFF

                                    Tape Subject Log
                                      (rev. 10/06)
                                                                 Conv. No. 656-27 (cont.)


                                      -Commerce Department figures
                    -Labor market indicators
                          -Increased work week
                          -Unemployment and employment
                                -Prices
                                -Housing starts
                    -Leading economic indicators
                          -Forthcoming report
                          -Revision
              -Stein’s view
                    -Compared to Burns’s and Connally
              -Public expectations
              -Manufacturing layoffs compared to new hiring
                    -1969
              -Federal spending
          -Unemployment
              -Connally’s forthcoming study
                    -Cabinet meeting
                    -Stein’s office
                    -Commerce Department
                    -James D. Hodgson
                    -Identifying the unemployed
                          -Household heads
                          -Women
                          -Multi-jobs
                          -Eighteen year olds
                    -Timing
                    -Department of Health, Education and Welfare [HEW]
                    -Development
                          -Common sources
                          -Survey
              -Statistics
                    -Revision
                          -1967
                    -Survey question
                          -Phrasing

An unknown person entered at an unknown time after 2:02 pm.

     Unknown matter
                                              45

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/06)
                                                                Conv. No. 656-27 (cont.)


The unknown person left at an unknown time before 2:26 pm.

     Economy
         -Wording of unemployment studies
             -Effects
             -Statistical experts
                   -Politics

Ronald L. Ziegler entered at 2:26 pm.

     Photograph session
          -Quadriad meeting
               -Novelty
               -Congressional leadership meeting
               -Business magazines

Ziegler left at 2:27 pm.

     Economy
         -Budget
         -Federal spending
              -Gerald R. Ford
                    -Note to the President
                          -Department of Housing and Urban Development [HUD]
                                -Unused money
                                      -George W. Romney
                                      -Queens, Forrest Hills
                                -Check by administration
              -Housing
                    -Inner city public housing
                    -Forthcoming testimony by unknown person
                          -Camp David
                    -Water and sewer spending
                    -Press perception of administration
                          -Withholding and dumping funds
                                -1972 election
              -Withholding funds
                    -Deficits
                    -Office of Management and Budget [OMB]
              -Spending ceiling
              -OMB pressure on departments
                             46

          NIXON PRESIDENTIAL MATERIALS STAFF

                     Tape Subject Log
                       (rev. 10/06)
                                                      Conv. No. 656-27 (cont.)


-Timing
     -Effect on economy
-Spending ceiling
     -1973
-Congress
     -Intentions
     -Spending ceiling
-Defense spending
     -GNP
     -Employment
     -Past record
           -1969, 1970
     -Decline
     -Trends
-Rates
-Domestic agencies
     -Fiscal management
           -Compared to Defense Department
           -Information technology
                 -Rolling budget system
                       -OMB effort
     -Record keeping
           -Treasury Department
           -General Services Administration [GSA]
-Concerns for upcoming budget
     -Deficit
           -Handling
                 -Inflation
                 -Shultz’s and Connally’s comments at briefing
                       -Employment
                       -Economic expansion
                 -Fiscal year [FY] 1973 budget
                 -Spending ceiling
                 -FY 1974 budget
           -Spending ceiling
           -Probability of cuts
                 -Defense
                 -Domestic programs
                       -Congressional intentions
                            -Edmund S. Muskie
                            -Edward M. Kennedy
                                 47

              NIXON PRESIDENTIAL MATERIALS STAFF

                         Tape Subject Log
                           (rev. 10/06)
                                                       Conv. No. 656-27 (cont.)


                              -Largesse
                              -FY 1975
    -Congressional actions
          -Shultz’s efforts
                -Departments
                -Revenue sharing
    -Revenue sharing
          -Benefits
                -State and local spending
          -Ways and Means Committee action
                -Hearings
                -Timing
                      -House of Representatives
                      -State and local action
    -Shift from FY 1972 to FY 1973
          -Effect
          -Construction projects
          -Welfare payments
                -States
          -Revenue sharing
    -Rate of expenditure
    -Defense contracts
          -Employment
    -Congressional action
          -Timing of administration proposals
    -FY 1972
          -Cabinet
                -Recent meeting
                -Budget responsibilities
                -Unknown Defense Department official
-Money supply
    -M-1
          -Ability to control
                -Reserve control
                -Individual decisions
                      -Checking accounts
                      -Interest bearing accounts
    -Rates of increase
          -M-1
          -M-2
          -Savings deposits
                                         48

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/06)
                                                                 Conv. No. 656-27 (cont.)


                      -Certificates of deposit [CDs]
           -Individual decisions
                 -Liquid assets
                      -Form
           -Commercial bank reserves
                 -Administration action
                      -Reaction
           -New York Federal Reserve bank management
                 -Burns’s possible action
                 -Manager’s activities
                 -Administration links
           -FRB system
                 -Management personnel
                      -Salaries
                      -Burns’s possible action
                      -The President’s possible action
                            -Andrew F. Brimmer

Brimmer
    -United Nations [UN]
         -Under Secretary General
              -[Kurt Waldheim]
              -Dr. Ralph Bunche
              -Request of Burns to call William P. Rogers
                    -Possible ambassadorship

International economic situation
      -Trade negotiations
           -Status
           -European agreement
                 -Substance
                       -Preferential treatments
                       -Citrus
                       -Tobacco
                       -Grain (wheat, barley)
                             -Union of Soviet Socialist Republics [USSR]
                             -Pricing
                                   -France
                                   -Italy
                                          -Citrus, tobacco
                                                -France
                                  49

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/06)
                                                           Conv. No. 656-27 (cont.)


           -Japan
                -Tariffs
                      -Soybeans
                            -Sales value
                -Beef
                -Wheat
                -Citrus
                      -Oranges
                -US concessions
           -Canada
                -Status
                -Politics
                      -1973, 1972
                -US strategy
                      -Possible unilateral action
                      -Possible termination of automobile agreement
                      -Tourism
                      -Possible repeal of unknown act
                -The President’s forthcoming trip to USSR
                      -Substance
                      -State and Commerce Departments
                      -Pierre E. Trudeau
                      -Timing
                      -Trudeau’s visits with Soviets
                      -Benefits
                      -Possible reconsideration
                            -Kissinger
           -France
                -US responsibility
                      -Budget deficits
                      -European central bankers
-US stance on International Monetary Fund [IMF]
     -Convertibility
     -Paul A. Volcker, Bill Dale [?]
     -Moratorium
           -Ghana
                -Methods of payment
                      -Dutch guilders
                      -Belgian francs
           -US negotiating position
           -Effect on central bankers
                                   50

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/06)
                                                           Conv. No. 656-27 (cont.)


           -Great Britain
           -Ceylon [Sri Lanka]
           -West Germany
     -International confidence
           -US budget
           -The President’s message to Congress
           -Connally’s action on debt
-Trade
     -Surplus
           -Great Britain
           -Japan
                 -Revaluation
-US
     -Competitive position
           -Administrative, tariff barriers
     -Trade deficits
           -Expectations
-Common Market
     -Preferential trade ties
     -Power
-Convertibility
     -Feasibility
     -US trade policy
-Japanese decisions
-Canadian decisions
-[Common Market]
-Canada
     -US strategy
           -The President’s possible meeting with Connally, Kissinger, Rogers
           -Backchannels
           -State Department
                 -Attitude
           -Need for consistency
           -Trudeau
           -Aleksei N. Kosygin
           -Dinner
-Convertibility
     -Banking
     -Need for new plan
     -Exchange markets
     -Smithsonian Agreement
                                                 51

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/06)
                                                               Conv. No. 656-27 (cont.)


                -Gold
                     -Legislation
                -Trade negotiations
          -Fiscal and monetary policy
                -Location of money
                -Quantity of money
                     -Customers
          -US business confidence
                -Damage since 1965
                     -Vietnam
                     -Riots
                -Rebuilding
                     -Time required
          -Gold bill
                -Debt ceiling
                -Revenue sharing
                -Timing
                     -Trade negotiations
          -Need for confidence by bankers
                -Conally’s possible talks

     The President’s schedule
          -Quadriad meetings
               -Frequency
                      -H. R. (“Bob”) Haldeman
               -Timing

     Ziegler
          -Photograph session

Bull entered at an unknown time after 2:27 pm.

     Photograph session

Bull left at an unknown time before 3:20 pm.

     The Netherlands
          -Dutch Prime Minister [Barend W. Biesheuvel]
               -Recent meeting with the President
               -Travel to Indonesia
                     -State visit by Queen [Juliana]
                                                52

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                         (rev. 10/06)
                                                                         Conv. No. 656-27 (cont.)


           -Relations with Indonesia
                -The President’s 1953 trip
                      -Dutch tourists
                -Colonial legacy
                      -School, health systems, language, cultural ties

     Africa
          -US relations
          -Colonial powers
               -British, Dutch

Ziegler and members of the press entered at an unknown time after 2:27 pm.

     [Photograph session]
          -[General conversation]

Ziegler, et al. left at an unknown time before 3:20 pm.

     Brazil
          -Compared to the US
               -Alaska
          -Natural resources
               -Climate
               -Compared to US Midwest
          -Prospects
               -Population
               -Portugese
          -Government
               -The President’s previous conversation with Biesheuvel
                      -Latin needs
                            -French constitution
                            -Strong leaders
               -Italians
               -Spain
                      -Gen. Francisco Franco
               -Latin government
                      -Need for moderation, balance
               -French
                      -Gen. Charles A.J.M. De Gaulle
                            -Contributions
                                 -National spirit
                                                     53

                            NIXON PRESIDENTIAL MATERIALS STAFF

                                         Tape Subject Log
                                           (rev. 10/06)
                                                                       Conv. No. 656-27 (cont.)


                                    -Presidency
                                          -Parties
                 -Needs
                      -State Department
                            -US constitutional model

     The President’s telephone call to Wilbur D. Mills, January 24, 1972
          -Health
               -Mills’s schedule
          -Mother [Abbie L. (Daigh) Mills]
          -Granddaughter

Connally, et al. left at 3:20 pm.