Nixon, Connally & Ehrlichman on International monetary policy

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Yeah, I had a pretty good shake on him.

He's recovered from heart attack.

He looks good.

Oh, he looks great, man.

He started right off calling about the payboard.

Didn't thank you.

Not much.

He said he had the payboard about the long shot.

He's got to take it and go count the productivity.

That's right.

I've got to help increase the growth of the Japanese, so that's got to be considered to determine what you can do when it comes to the nation.

George Nelson was there to speak.

I think that's the toughest.

I don't know.

He's a tough character.

Well, I just want to have a few minutes to tell you, this morning, the money markets are quiet.

Yesterday morning, they were not.

Quite a bit of money was moving yesterday, and it's a different thing.

And it's not any great moment, but it's something that we're giving a lot of thought to.

We're thinking about two things that are fairly way out, and I'm not prepared to recommend them to you at all.

I really want to mention them to you.

I've had a little work done, and very much in secret, that I've talked about.

the possibility of calling in all of the United States currency.

Now, this is not primarily an error.

This would solve the international monetary problem, but it would have immediate effects.

First, it helps on the tax evasion detail.

Second, it could be posited as a move against the mafia, against organized crime, specifically against drugs.

By calling it in, you mean, in other words, you just call all the currencies and say, in exchange for new currency, you can issue a new dollar.

In other words, all these guys have got it snatched away.

And everyone talks about it.

Wherever you go in the world, you've got to produce it.

It's this idea that we've got to go about it.

We've got to go about it.

That's what he called it also.

Would you accompany that with a grant of any amnesty for people with disabilities?

Do you know what I mean?

Yep.

You would actually have to do that, wouldn't you?

Yeah, there are a lot of things we'd have to consider, and it'd be worth it.

I mean, see, we'd also have to consider, I've got to tell you, the common view of engraving training.

At least it's considered, I don't want to talk about coding and currency.

I'm just talking about issuing new currency that's coding somebody.

with some kind of metal or something in the paper where it should be electronically scanned for all the pisses you catch counting.

I don't think it's good, John, in terms of the complications for the purpose of getting into the kind of gangsters, the dope debaters, the nikes, they wouldn't mention mafia because that would drive people who would be up the wall with tax evasion and so forth.

This is a method of building who we're going to develop and we're accepting into the kind of currency.

Count it to their hand.

My God, I tell you, the appeal of many.

You see, there are two of them.

Now, we know the other ones.

They're eyes right there.

They're part of the Federal Reserve.

You see, we've been depending on how we support the regulation.

We said, well, we can make the banks report all of this foreign currency.

Who has it?

Who's having it?

See, this case is all just a list of lockboxes there.

I mean, they've got to go and get the money out of those lockboxes.

We give them certainly time to produce the money.

It's no good.

You can't change it.

But anyway, that's why this earthquake case has kind of brought that to mind.

Well, really what brought it to mind is a combination of things, not the least of which is the fact that the American companies have got to sandwich money over sheets.

And I've been trying to figure some way to get them to bring it home.

Now, this is not necessarily going to solve that problem.

But it'll make them bring the currency home.

It doesn't keep them just every day with some credits on the account.

They might have to bring the cash, though.

They've got to bring the cash home.

But anyway, this is just what I hadn't thought of, and I'm just going to show it with faith.

Now, second, when you visit, and this has direct implications on the international monetary field.

And before I get into it, let me explain to you what I think is happening, that I think has fairly serious implications for us.

I am convinced beyond any question that Pompidou and Giscard d'Estaing and the French general are doing everything they know how to do to humiliate and embarrass the United States.

Now, they've gone through all the torture.

they did in 68 when they had their money crisis and their devaluation, and they were humiliated.

Basically, they believe in control, which we don't believe in.

Thirdly, they believe in very strict, narrow margins.

They just believe in a fixed parity.

And these are all very strong philosophical views.

Now, we differ with all of them.

We differ with every one of them.

But the French are now in privacy with Europe.

As we've talked before, all that's false.

So what they're doing, they're driving home their philosophy and their ideas in the European community.

CompuDou, even this week, talked about that the American currency, the American dollar, could not be the preferred asset of the world without convertibility, and that this, in effect, left no choice but for the European community to build a common currency.

Now, so they're going to do two things.

Well, the French are doing three things.

First, in this position and time of strength, they're forcing their views on the British who won in that common market, of course.

And they're trying to force their views on Belgium and Holland and Italy and Germany.

And they're doing it very well.

They're doing what they can.

Secondary, they are set out, in my judgment, to really humiliate and embarrass the United States, to destroy the United States leadership in the world.

Now, there are people who are different, but I'm absolutely certain in my own mind, I believe that.

Now, thirdly, as a combination of these work together, they're using this period of uncertainty in the world of money markets, and they're using the criticism of the United States as a spur to their European partners to create a common European currency, because they want it.

And I don't know if that's bad.

I'm just saying that this is what they're doing.

Now, the bad part is that

That they just constantly, just constantly, heartily criticize the United States.

And the net effect of it is, what are they doing maliciously about it, besides the point?

The net effect of it is that they're trying to destroy the confidence of the world.

They're in denial.

No doubt about that.

None at all.

Everybody I know believes that.

So no matter what you use on specific items, we all agree that this is what the French are doing.

Now, this leads us to the next step.

They're talking about putting on control.

They're talking about a two-tier system, which they really have now.

And they're talking about recommending controls, strong controls in the European community to bar the United States dollar, to exclude the United States dollar, where they don't have to take the dollar in, in the markets of Europe.

This is a financial control that they're recommending.

They've got it now, but they're recommending it for the community.

Germany has always resisted controls.

They don't have, there's basically none.

They just take the dollars out of it.

They just take it and leave it in control.

It's like a magic control.

Europe, I mean, Great Britain has never really believed in them, but Great Britain now is following, just as they were, as well as France, just like they used to have in France.

Now, Italy's weak.

Italy doesn't really believe in control, but hell, she can't.

She's got no power.

So this week, France, Germany, Belgium and Holland,

They've got very strict controls anyway because they're parasites.

They're the financial parasites of the world, as is Switzerland.

So they have to be able to move, and they structure their financial arrangements where they can move.

They don't have to do anything they don't want to do.

The only bad part of this is that if things develop to the point where

The European communities, through regulations and through financial controls, are actually able to keep the dollars out of that market, out of that complete area of the world.

This has an enormous impact on the United States, on its influx, on the acceptability of the dollar, and all the development of the dollar.

This is a temporary aberration.

Up until three or four years ago, they were crying for dollars.

So was Canada.

The world was crying for dollars.

We need your capital.

We've got to have your capital.

We've got to build up.

We've got to build a plant.

The security capital of the world, and it still is.

There still is, and it just so happens that because of interest rates and things like that, there's been an accumulation of dollars in Europe, and they don't want them in this particular point in history.

Now, four years ago is a better story.

Two years might be a better story.

They'll want them again.

But anyway, this leads me to the consideration of an idea which I also have talked about, which I'm going to start talking about immediately.

that we ought to give some thought to putting on absolute patrols on export of capital from the United States.

It has to be, it has to be, and it will be a sweeping move in the international financial world as your August 15th was almost.

It won't be as comprehensive, it won't be as pervasive because of the fact that only those companies that were used internationally played an effect.

What we then are doing, the United States is controlling the flow of its own capital, short-term and long-term.

We're not letting Europe do it.

And we're doing it power of the time that they move to control the flow of dollars.

Now, I don't know if this is wise.

I just want you to know that we're thinking about it,

Well, let's assume that last year was probably a $20 billion outflow of capital from the United States, short-term and long-term.

Let's assume that we put on these controls.

Let's assume that they were fairly effective.

Let's just say that we stopped the outflow and reduced it to $5 billion.

Well, that keeps $15 billion out of the world market to keep it at home.

Now, more than you, you obviously are less in pressure from other governments to take that much of it than I'm going to.

It's been at home.

Now, what are these companies going to do with it at home?

They can't leave them sitting.

In my judgment, they've got to invest in them.

They've got to expand their plants.

They've got to expand their facilities.

They've got to invest in something.

But they can't leave them sitting.

And they're going to create jobs by doing it.

They're going to modernize their plants.

Now, this is directly contrary to everything that you've indicated.

This is contrary to everything you said about putting control over money.

But we have to remember that I've thought about that, and obviously it's something to be concerned with.

But at the same time, I'm not suggesting it as a permanent part of American life, although it would scare the hell out of some people that would be a continuing part of it, but we've controlled

to control pricing and control the wages and control the lot that we have.

And if it's important for the interests of the United States to control the outflow of dollars for, or regulate the outflow of dollars for a year or two, I don't know why they should be in charge.

That would be my argument.

But I'm not prepared to recommend this to you before I do.

I'll certainly talk to, we'll talk to George, and I'll talk to Mr. Arthur.

I talk to very few.

Well, I'm not going to talk to Lee.

Yes, I would not talk to him.

I mean, you could talk to George, but he'd keep it quiet, because I think it's so important that he has a sense of ramifications.

If it all had leaked out, you'd have one hell of a problem.

in terms of saying this is a recommendation that's been made, you know, that this is good, that some study groups have come up with it, what do they think of it, you know.

I could say, well, I don't think we need to even do that yet.

The only thing I want to say to you, I guess, this morning, that we're looking at, more than that, I think you've got a

More than just monetary problems in Europe.

I think you're seeing more and more.

You're seeing the political and the diplomatic problems in Europe.

Now, and I think what, at some point, Mr. President, you're, I don't know if you want to do that, but you're going to have to call in a particular state in defense.

And they're really going to have to face up to the fact that we're in a different world from what we've been in.

That's all there is to it.

And that we just can't go on doing the best we can.

Because it's not going to work.

And we can't just solve all these problems with just monetary maneuvers all the time.

And Treasury can't solve it.

The state's going to have to get tougher in their dealings.

The defense is going to have to get tougher in their dealings.

But every time you ask them to do something, they just say, well, we just can't do it.

We just can't do it.

We're involved in very intricate, dramatic moves with this and that.

That's the offense.

You know, two lines and so forth.

It's hard for them to adjust themselves to these.

the United States and the world's new economic situation.

And, frankly, as a result of the British move towards the market, what is going to be a new political situation?

Of course, fortunately, we have a few things.

We've opened up the nation.

We need to be at their mercy.

We didn't have these China-Soviet initiatives.

The China initiative, the Soviet initiative, particularly the Soviet, and all kinds of stuff that are out there,

plays a political game, balances it off a bit, but it's going to be a, but the Europeans, they're going to really get something out of that, you see.

And particularly the French now.

I know the negotiations and so forth, but I just don't know.

I get it.

Every strata of life, people who go there for a convention,

and everybody else.

And the Franks just have an utter hatred of them in the United States.

At all levels.

Now, the Danes don't.

The Belgians do.

The Belgians.

Good God.

That's right.

This is part of why I hate it.

Because we've saved them, you see.

This is one of the first things in nature, that we've not only saved them once, but we've saved them twice.

And the Dutch don't feel that way, I'm sure.

The Danes don't feel that way.

There's a lot of Europeans who don't feel that way.

The British are just in a box.

They're just the British in a box.

The Germans, the Germans are playing these wet scabs, and they're playing this.

That's correct.

Sure.

But their government is not any U.S. at all.

No, no, no, no.

I agree.

This is the attack.

I agree with that.

The Italians are just weak.

They want to be pro-U.S.

They want to be pro-U.S. and they're just so weak in their own government that they can't even stand on their feet.

So they're an ineffective force.

So the real problem we have is France.

But they're leading.

I just think you ought to be conscious every day that you're leading the formation of this European community and that they're trying to do things that are going to humiliate the president of the United States.

Let us keep this.

You work on the AECOM and on through the Schultz.

I guess that doesn't emerge as too dangerous, but I will follow.

Yes, I think he may want to push it back to him.

Well, he wants to end it, you know.

I had a long talk with him.

He's over in Ball this weekend.

He wants to go by the parish.

And I said, no.

I said, good.

Arden, don't go to the parish.

I said, you ought not to be talking to him.

And I said, wait a minute.

And we will keep this.

I will not discuss it with Henry at this point.

No, I won't.

Because that's going to get him all.

He's got a lot of things to do.

I understand the game.

And I think what we'll do, John, is to work out, to get started, to think it all through.

And then when we get our thoughts pretty well lined up, then we'll start selling it.

We need to be excited to go in a certain way.

Can I ask one question about the damn Canadians?

I've got to go see that son of a bitch in April.

They've done nothing.

And I don't think we ought to do anything.

I don't think we ought to trade with them at all.

They're not going to give us anything to be proud of.

There's really not a reason to go up there.

So, well, you go, and I think you don't give them a damn thing.

You never be as cool as you can if you don't fulfill a commitment, as we talked about some arrangements later.

I just think they're all over town.

They just said, oh, we have parties in there called the SDR, the defense, everybody except us.

I'm not going to take any kind of people with me for good or anything.

I mean, it's a private festival, but I'm not going to take anybody else just to be, just to let them know they're not going to have any goddamn parties.

But you agree, don't you?

I mean, I like that we did it, but we'll make it, that'll be one lesson.

When we went with the French, the others, we had to go and we played the big game.

But I'm not going to take anybody, I'm not going to let Kennedy go or anybody like that.

I think we should just make it a pure protocol visit.

Do you agree with that?

I should agree with that.

Now, the visit won't be in April.

Something may happen.

Well, something may happen, but I don't think so.

And you started something else, right?

Well, I'm here to put this in my validation that we may not have to do either of these things.

The money thing, calling in appeals to me.

It appeals to me because I know that people are concerned about rackets and the rest of it.

And if you could put it in terms, that way, if I got suggested that much money around this and that, if you think it would serve useful purposes, I thought, well, we'll let us step it out and stack it out and...

Let me be sure.

By the way, I don't mean any big stuff.

I mean the other, of course, is important.

But anything on the search of purpose, John, there is a lot of them.

For good money.

Las Vegas will practically go up in size.

That's correct.

And it should.

It's a loss of money.

That's correct.

And you, well, to the average person, when you talk about, when you talk about calling in all the women in the city today,

What do you think you start to talk in terms of dope, of crime, of tax evading, and so forth?

You're appealing to the American people.

You know, that's all you have to say.

We don't see what would happen if you called the money in.

Then you...

By that very act, we'd get the evidence to prosecute people.

Correct?

Sure.

But the guy shows up with $50,000.

Yeah.

And he has a K. And he has to pay the maximum $10,000 income a year.

We needed to trigger the IRS.

They go, Susan, we didn't get this K. You know, he didn't, you know, I mean, is that quite a good politician?

Oh, they got a lot of stock.

Oh, you got a lot.

I hadn't thought of that, but it would have been when you did.

Do you remember Borrow on G-9?

That repair got him purchased?

That's right.

Christy had $150,000 in the stock.

That's right.

What the hell did he do?

Of course, they got to turn it in.

They turned it in, and they said, well, we should have gone and played the races.

So it's all kind of in the kitchen.

Let me ask you something else.

I know, but you're going to be safe, or can you stay?

And would you mind staying for the busing day?

No, sir, I'll stay today.

And I'll do that.

Let me ask you a word.

I was thinking a moment ago, of course you know exactly what happened there, we all do.

We decided that in all cases we were not going to have business alone be the reason for this.

That was the decision.

In my case, they're called over.

He says, you know what the hell's the thing?

He says, there's been rains of testimony, very favorable to our side here, and the goddamn press isn't printing it.

And he even mentions the council party thinks maybe you ought to stick Agnew on them or something and get something done.

I'm not sure that's right.

But my point is that a pretty good example of it was yesterday where they put a witness on.

And I was thinking in my old days of investigating the Committee on American Activities, John

If ever, during the course of the investigation, we put on hearsay, we have editorials all over the country, this was hearsay fourth removing.

Unbelievable.

Where they said, and she went to get this man on and say, he said, the president called and said, take care of it.

Well, did he really say that?

No, she said that the president said, give him a fair sum.

Well, of course, I didn't call at all.

Mitchell wasn't in the goddamn case.

You know what I mean?

I don't know, but I mean...

I can't, I don't get the individual, I don't even have his financials.

They've got a letter apparently, you wrote some there, but did you know?

No, I don't.

They don't have it, but you know what I mean.

No, they wrote that he's thanking you or something for Europe because you were, this is in the SEC file.

There's all sorts of things like that.

Because how many, how much does it, but you know, what is your advice to what you,

I don't think we ought to, but we just can't.

Go ahead.

It's for the public mind, but it has, you know, the feeling on the Hill is, even among the Democrats, they say, oh, my God, you know, there's nothing here.

There's nothing here.

But they say, good God, we all know that, you know.

Well, of course, it's just too late now.

But they should have gone ahead and just, you know, just charged and said, sure, we settled it.

Yeah.

That's right.

Yeah, we met at the end of it, so.

Which they did, you know, which Riddell testified.

Yeah.

And so here's that, he said, three cases, and we couldn't have won them in the Supreme Court, you know.

He was appointed by a candidate, that's right.

And now, they had me kind of a little bit arguing.

I think that, frankly, it was poorly made a case.

Now, maybe it was fine as fine as they had made it, but the personal, I report, doesn't really make any sense to me, but I agree.

You're going to have these things.

You always do, don't you?

Well, nevertheless, I have not seen him on television now.

I just seen this Jack Anderson.

I did see McLaurin one time on television.

He did a good job.

Yeah.

But if they would come out of there every day and just, those cameras are waiting.

I know they're waiting.

Yeah.

And if the client needs McLaurin, every witness would just stand there on that, on that, you know.

Before that camera, they just hit him, hit him, hit him.

Why?

That's the only way you can do that.

Go on the attack.

You have to go on the attack.

But you would not have, you see, the White House would say, no, you wouldn't have that.

No, sir.

You're free at this point.

That wasn't supposed to have said that.

And I would not get into it.

And I wouldn't let him get into it.

Of course, you escalated it.

That's my point.

You escalated it.

You never know how big these stories are.

They're running for eight days.

He's got to die.

But you know the point is, as I said, John, it's so goddamn...

You know, when you start to purchase a settlement, it's a good settlement.

IT&T was not pleased with it, you know, because we made them divest.

I didn't know this, but they made them divest.

Their biggest thing was that, you know, the big food service outage, you know.

And they divested that, you see.

They had to get rid of that because they had to share it.

Well, they didn't get rid of me.

They just gave us a good guy.

So they got rid of us, and that's it.

Not a bad deal.

They got rid of me.

All they did was some bad, some bad thing about a silly country.

Well, who the hell cares, really?

Well, they got rid of you.

Well, then I think we should have said it.

So I don't know.

Maybe they didn't get rid of us.

Whatever's in mind.

They figured it out anyway.

They got rid of us.

They just told us they should have done it.

We got enough money to hold the convention.

How do you make this?

No, you're so sure about this, correct, Joe?

You're certainly still correct, yes.

I'm sure you all were out handling people right out of, considering the human vision line.

You did.

You always have done it.

So be it.

Well, I've got to work on that.

I'll see you in a minute, Joe.

I'll meet you at the cat park on Saturday.

I just wanted you to know that in this meeting, not only will the subject of Social Security come up, but they may hit you on prescription drugs under Medicare, which runs around $2 million a year.

I know you have, but they need to be raised.

And paid is $4.5 of your...

I just got this this minute, so I haven't read it.

I think so.

Well, that's very good.

It may be something that won't happen.

The cabinet committee has recommended favor.

The staff and George have recommended against it primarily because of cost.

It's $2 billion that we just don't have.

All right.

And so you've got a lot of... You did a talk to Connolly, right?

Yes, sir.

I did.

And I asked him to make the case for the Troika on the 20% Social Security.

Well, is it the case that neither Richardson or Fleming care about the budget, Senator?

Well, they argue that you have a trade-off here, which is the votes of the agent versus budgetary integrity.

And then maybe we just have to do a charter change.

Well, that, of course, that's the prick of position.

And they felt, and Elliott felt very strongly, that he was obliged to call your attention to political implications of this thing.

And that's the reason he pressed for this meeting.

Now, the reason Fleming is in here is that he has to go out and sell whatever it is that you decide to do.

And we should decide at this meeting.

No, no, no.

Our recommendation in here is that you listen, that you thank them, that you say that this is something you'd like to have the weekend on.

Yeah.

And that you'll certainly, that you have waited carefully, but if you do their arguments, you'll reconsider.

And that they'll hear from you the first of the week.

Is it your view that we should do a 20% increase?

No, it isn't.

Now, they're going to argue, though, that there's going to be a 20% increase and that you have to be prepared not only to oppose it but to veto it.

And my view is that that's not a bad position to be in.

to be for fiscal integrity.

We're catching merry hell from the conservatives and not just conservatives but moderates about our deficit.

And somehow or another we've got to reclaim our virtue here.

And this may be the way to do it.

It'll be at some political expense.

For the aging, my hunch is that the aging don't have any place else to go at this point, but maybe they do.

In any event, it's a damn tough call.

And so that's the reason for the half-hour meeting.

And the next meeting is going to be not only with the cabinet committee, but also with the lawyers on this busing business.

Because nobody except Michael, that was simply the very reason.

No, this is going to be the one where they deliver their report to you and explain, and it will take about an hour.

And you've got five top-notch lawyers in this thing.

One of them, the guy with the beard, is the hardliner of the bunch.

And, yeah.

Nixon, Connally & Ehrlichman on International monetary policy

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Nixon, Connally & Ehrlichman on International monetary policy

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Also recorded on March 10, 1972

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