Nixon, Kendall & Flanigan on Soviet-US Trade and Pepsico

2:04:49Well, I think in a way it's a blessing, Mr. President, because if he hadn't done that, we might have been sorely tempted.
2:04:54He claimed that he had an agreement that when Matt Samuels left, that he was going to be made alternate governor of the IMF.
2:04:59If there were any idea of doing that for him, this action here should be settled that night.
2:05:06Who?
2:05:06Who?
2:05:07When Matt Samuels is alternate governor, to me, the Secretary of the Treasury is the governor of the International Monetary Fund.
2:05:14All of him is Matt Samuels.
2:05:18Arthur said that he had an agreement with Kennedy and everybody in the Constitution.
2:05:21He doesn't quote you, but he said he had an understanding.
2:05:25When Matt Sandler left, he said he was going to succeed in Sandler's as alternate governor on the International Monetary Fund.
2:05:34And I, if it was ever any thought of doing that, this ought to kill that idea, because we ought not to be.
2:05:41He ought not to have any more authority or responsibility.
2:05:45He's not going to get a damn thing from me.
2:05:49It's nothing.
2:05:51George is not talking about it.
2:05:52George is not talking about it.
2:05:54He ought not to hear it.
2:05:54You saw what the economists gave us when we were there, George.
2:05:59They didn't say that, but I can tell you something.
2:06:02Penny's sculpture in the 1939 World Fair, and there's the whole story.
2:06:07I don't know what this certain thing is.
2:06:10That's America.
2:06:15This was given to us by .
2:06:16I want my burger at 430 .
2:06:17Are you ready to go now?
2:06:20Yeah.
2:06:21All right.
2:06:33All right.
2:06:34I'll go in at 9.30 in the morning and meet with you.
2:06:38I'm sorry.
2:06:38I'll set up the feed up thing.
2:06:40I told George the conference was later afterwards.
2:06:49George, I'm going in to see what you can do.
2:06:58Do you want me to...
2:07:08Well, Peter, I think he's going to Russia with his sister.
2:07:25I assume you like that.
2:07:27Well, it's too damn bad I'm not going, but... You don't own the bus, do you?
2:07:31The hell I don't.
2:07:32So you own somewhere, not your ghost.
2:07:35We own it.
2:07:36Yeah, I know.
2:07:37You bought the right to appear, but you haven't gotten the stuff yet.
2:07:42Yeah, we got the vodka deal.
2:07:43We haven't got the Pepsi deal yet.
2:07:45That's what I mean.
2:07:46The vodka thing can be very prompt.
2:07:48Well, if that isn't what I want, but we bought a wine company to get the vodka deal.
2:07:53I know you did.
2:07:54Because basically, you can't trade a Pepsi for vodka unless you go to the company, isn't that right?
2:08:03Well, actually, they were willing to work out.
2:08:05They weren't happy with it.
2:08:07The company Kosygin got, for some reason, very worked up on their vodka sales in this country.
2:08:13And that's how, I guess, I got him to react.
2:08:15And he's actually wrong, because until he gets most favored nation, he's not going to sell it.
2:08:20He can't sell vodka at $8 a bottle.
2:08:22Well, sure, there's 100% duty on it.
2:08:32Well, I mean, you can probably talk for about seven and make a hell of a profit and sell a lot of them.
2:08:37He's not thinking like that, Mr. President.
2:08:39He's just in his crowd.
2:08:40Oh, naturally.
2:08:42I mean, that's what the free enterprise system is all about.
2:08:45Have you forgotten?
2:08:46It goes well.
2:08:46Saturday for Austria.
2:08:47Sunday, Sunday there.
2:08:49And then Monday morning, we'll be in.
2:08:51Mr. President.
2:08:59I don't think Sagan will, he will participate in the plenary sessions that the Russian is now wearing the big pants, so he'll be doing the talks with me, at least the writing talks.
2:09:12I think Sagan may probably do some of the planning talks that will be done.
2:09:21He obviously runs the economic side.
2:09:23Oh, he does.
2:09:24He knows it.
2:09:24I mean, he's fantastic.
2:09:25He knows it much better than Gresham.
2:09:26You know, these kind of systems work.
2:09:29Eventually, one becomes the boss.
2:09:32Even though it's still collective leadership, Gresham is, in this case, indicating his prerogatives.
2:09:40That's true of all societies, isn't it?
2:09:42Somebody eventually becomes the boss.
2:09:45But he is.
2:09:45This is my conversation.
2:09:46It's my conversation.
2:09:59I don't know what you did to Patola Jeff when you saw him, but it sure worked.
2:10:06I just left, I just left Patola Jeff.
2:10:08I was with he and I'll keep him on, on the, I don't know.
2:10:13Yeah, he was here a couple of times.
2:10:16He's not a tough guy.
2:10:23He's no party guy, but he's not, he's not really.
2:10:27But he was very impressed.
2:10:30I just left him.
2:10:31Well, I guess it's mostly government.
2:10:37There's no business people have seen him at all.
2:10:53I had the whole land lease delegation up for a weekend.
2:10:55I had them in the house.
2:10:58And Okimaw, he's still here.
2:10:59He's not going back.
2:11:00And Okimaw, he's the vice deputy.
2:11:05There's Manzula and the two deputy ministers of Manzula and Okimaw, who are really the trade.
2:11:12The people are going to be involved in the trade discussions.
2:11:18But they're very happy with what's happening.
2:11:22Well, they had another discussion this morning.
2:11:27No, they told me they were.
2:11:30I don't know how much time you've got, but what I thought I would do is, if you'd like, is run through some observations I've got about them.
2:11:36I've got some suggestions of how I think you should deal with the Soviets.
2:11:42I think some of the things have already been started.
2:11:46I wouldn't do it because I think there are
2:11:53peculiar for you.
2:11:54I think personal relationships are very important.
2:11:59I don't think you can have people going in and out all the time.
2:12:01I think you've got to have the same basic, very high-level group, but you can't have one operation handling land lease and somebody else trade and somebody else credits and somebody else agriculture.
2:12:13And if they do, they're going to chop you up.
2:12:17But I'll tell you things that I saw.
2:12:20First of all, I want to say on
2:12:24The other night on television, I've been awfully proud of you for many years, but that was a high point.
2:12:31All of the little bully-livered ones, at least some in the White House, were scared.
2:12:39Oh, goodness me, the Soviet, the Chinese, all want to react back.
2:12:47I don't know how many people are ever going to grow up.
2:12:50Well, it was fine.
2:12:51Worse for businessmen.
2:12:52And, uh... Well, I... Well, I've never failed after a thing like that to have every one of them, with the exception that some of which would have come out 100% for us.
2:13:10I think we were treated as the top leagues.
2:13:19I mean, the top.
2:13:21No, that's not true.
2:13:24You've got a hell of a raft of telegrams in here.
2:13:26A lot of them, which I called up and asked and sent them in, so I know they've been in.
2:13:30Oh, you're friends, yeah.
2:13:31No, but I think it's harder for a business guy to step up.
2:13:34It's sort of a gut reaction kind of a thing.
2:13:36But if they start to think a lot, and they read the New York Times and the Washington Post, and they listen to Huntley, and they write Clayton Cromkite, say, it's too bad.
2:13:48The other thing that... Too much intelligence, I guess.
2:13:52No, but on our business, we've got a few fellows like Russ Reed on the letters, and they're strong source writers.
2:13:57You know, there are a lot of them that are strong.
2:14:02Let me tell you one thing about this business of dealing the other way, just to reassure you.
2:14:09That's a game, you know.
2:14:12We're having to run.
2:14:13I run all over the place.
2:14:15But the whole deal, I'm going to make with him.
2:14:19all in one package, because it's all tied together.
2:14:21And they're not going to get anything without something else tied to it.
2:14:24Because that's all we understand, and it's what they want, too.
2:14:28They have said themselves that, well, Gresham has said that the Americans think of economic good deals, they will tell us this.
2:14:39They'll try to sell us this.
2:14:41That's something that we should do as an end in itself, because we do not agree with that.
2:14:45It must have political and social objectives, too.
2:14:49Well, you've got to let them know.
2:14:50We couldn't agree more.
2:14:50You've got to let them know what the important things you want.
2:14:53What do you want?
2:14:54Do you want a grain deal?
2:14:55Do you want capsules?
2:14:56That's what you want.
2:14:57And they come tell you the important ones, and that's what you get.
2:14:59That's right.
2:15:00But you can't trade them all off.
2:15:02Oh, no, no, no.
2:15:04It's a tough, bold deal because there's some things we can't give and some things we can.
2:15:08Some things we can promise, some things we can't.
2:15:12The main thing we've got to, I think we'll have a three-minute, but we deliberately held off any close-in of these deals that we got there because we want to see it all on the table because they are tough partners, just as we are.
2:15:27I'll get into that part of it later.
2:15:28The other thing I wanted to say on...
2:15:31As you know, I've never been particularly admired of Rogers and his ability to speak.
2:15:39At the Business Council, he did a fantastic job on the Vietnam thing.
2:15:44It was absolutely sensational.
2:15:46He did something that nobody else could have done, including yourself, because you couldn't have said the things he did.
2:15:52He went through the rationale of the problem, but the big thing he said was that, you know, whether you believe it or not, you've got plenty of time to criticize the president after the convention.
2:16:02So let's keep everything calm and give him a chance to work this out.
2:16:06And he really got everybody in that room, even Paul Austin got up and shook hands with him.
2:16:12And you ought to...
2:16:14You ought to make a note of him and tell Philly, because he really was sensational.
2:16:19You were there?
2:16:21No, sir.
2:16:21No, he was.
2:16:22If he'd like to hear two sources, I'll be seeing him, of course, in the next couple of days.
2:16:26Anyway, I'll tell him.
2:16:28But really, you can line up, because he was fantastic.
2:16:32I've never seen him up here.
2:16:33In fact, I used to thought he was the opposite.
2:16:38On the U.S. of Zard, I'll tell you quickly my observations on it.
2:16:41the difference between 59 and now, which you've been back there.
2:16:46Remember the thing you said when we were there last time with Draft, that there was no change.
2:16:50Now there's color on the street.
2:16:51Those people have got money in their pockets.
2:16:53They've got cars.
2:16:54They've got money in the bank.
2:16:57It really is one of the greatest real changes.
2:16:59Well, it's not only a change, but I look at it from a different point of view.
2:17:02Well, I think it was a fantastic marketing opportunity because the people got money.
2:17:05That's good.
2:17:08You know, in Eastern Europe now, I told Pete,
2:17:12We're approaching a point to where our prophets are going to be greater out of Eastern Europe than they are out of Western Europe.
2:17:18Because you don't have to spend all the damn money in the bulk in the markets once you go in.
2:17:22With their assistance, we moved off the family.
2:17:24We're getting... Sure.
2:17:26By Romania, Yugoslavia?
2:17:28We're exclusive in Romania.
2:17:29We've got four plants in Yugoslavia.
2:17:31We're opening up Czechoslovakia.
2:17:33We're opening three more plants in Hungary this year.
2:17:35We've already got two.
2:17:36We're opening up two in Poland.
2:17:38Great.
2:17:39We've got good deals in the home.
2:17:40We've had to use a little ingenuity in barter and stuff like that.
2:17:43I'm working out a deal to sell bicycles in Montgomery Ward now.
2:17:48They're bicycles.
2:17:49Well, they make probably the best in the world, because they ride the damn things.
2:17:55But if you use ingenuity, it really is a fantastic market.
2:18:04I've got a bunch of notes that don't want to go through to make sure I don't miss things.
2:18:07The other thing that... Will be unfolded.
2:18:12Yes, I know.
2:18:12The other thing that...
2:18:13The greatness of Pepsi, please.
2:18:14You went...
2:18:15He asked me, do you want a Pepsi?
2:18:19I said, I want a Pepsi.
2:18:20I said, he wants it ready to get down.
2:18:22I said, he's not going to ask for one of these.
2:18:23I said, I don't have a bank.
2:18:24I said, I don't have a bank.
2:18:28I remember what it was.
2:18:32Well, you got it out.
2:18:34Yes.
2:18:34That'll buy a Pepsi in Russia from .
2:18:38The other thing is that I was convinced, and so was everyone else, and I don't know the configuration for this, but there is no question what they think.
2:18:45We've got the best management, the best technology.
2:18:47There are a lot of places that, as you know, have better technology there than we have in some fields, the Japanese and the Germans.
2:18:54They're convinced that the best is here, and I have never seen a group of people that want to do business with us so badly.
2:19:01And it's not whether it's Patola Jemper, whether it's Alkyl Mopper, Manzula, it's right down through the whole organization.
2:19:07Those people are, I've never seen an attitude like it.
2:19:11So that's one of the reasons I think that we can really do business together.
2:19:17The other thing, in the meeting that we had, Frank and
2:19:21And Germans and Japanese, they were all there.
2:19:25There was no one in the group that has ever had any bad experience with the Soviet Union on their commercial transactions.
2:19:31They've been scrupulous in living up to them.
2:19:34So I don't think that we're going to have problems with the credits that we've had in some of the other places.
2:19:42In the negotiations, the experience that I've had with them so far, you say they're tough.
2:19:47I think they are tough.
2:19:49They're good traders.
2:19:51But the thing that you can't do with them is that you can't talk a lot of philosophy and broad facts that you've got to get down to the details, you've got to dot the i's and cross the d's, and if you don't, it's like union negotiations.
2:20:08If it wasn't covered, it's not covered, and you may think you've got it covered, but unless you've got it spelled out, you haven't got any deal.
2:20:14In fact, I...
2:20:16probably the best training for somebody who's going to negotiate with the Soviets is to have been a guy in a company and had to negotiate with a teamster for somebody for about five years.
2:20:26Because it's the same type of thing.
2:20:28You've got to cover every damn point.
2:20:30You can't have a general understanding.
2:20:35I can hear a thing with Brecht, and I have a view.
2:20:42had some of the instructions you had, like with Sato, where you thought you had a philosophical understanding, and what you can do with a Japanese, and what you can do with a Chinese, and you can't do that with a Soviet.
2:20:56Ivanov made a statement to me that I think is invictable.
2:20:59He was talking about, he's the head of the Soviet faction, and he talked about Rostov, David Rostov.
2:21:06And he said, well, you know, David Rockefeller, he said, he's a great philosopher, but he said he doesn't know much about banking.
2:21:12Yeah.
2:21:14That must be true.
2:21:15Very great, Matthew.
2:21:17That's good.
2:21:18That's good.
2:21:21That's good.
2:21:24The other thing that I'm convinced of, and I think everybody else in the group was convinced of,
2:21:32And, you know, I've been back there twice since the original trip in December.
2:21:42This is from conversations with often-lost and very few-wanted.
2:21:46I don't think there's any question what there is a big group in the Soviet Union today that want to bring about economic relationships with us and they want to stop all this stuff that's been going on.
2:21:58That doesn't mean they're going to stop the spread of communism.
2:22:01They still believe in communism, their system.
2:22:03They're not going to change their system.
2:22:06But I think you're going to see more of the things of the Chile type take over, not the Cuba.
2:22:10You're not going to see a Cuba.
2:22:12They're not going to go in with force.
2:22:14They're going to do anything they can through political persuasions or support of that type, the same as we do.
2:22:19I mean, after all, we don't come trying to support people that are demonstrators.
2:22:22We're going to continue that, but there's not going to be any more confrontations.
2:22:28I'll be my second reason to show what I have to say.
2:22:32um alchemist said to me he said don he said we've got to stop this military he said every time your people go to congress he said our military people come and he said then they've got to have he said then i asked him up and he said there in years go back to congress and he said we're in a in a cycle i hit him on the thing on vietnam after this thing happened and he made a very honest enough race and i said why the hell do you give them all this sophisticated equipment he says well don he said sometimes you give people a vote but you don't expect them to put it in the water
2:23:05but uh obviously there's another group that um but i think this obviously a part of it is their competition with the chinese when you've also got guys like sussloff and that group are still there too but i think this new
2:23:30the economic group are getting more powerful.
2:23:34And that certainly is the impression that everything I saw is those are the people on the rise, and they're fighting like mad.
2:23:42That's why they don't want this thing to break up over Vietnam.
2:23:45You know, they were more scared of it than some of the people over here that was going to break up, because they've been working towards this.
2:23:54Now, on the...
2:23:56The team, what I would recommend you do is that you put a team together that does all the negotiating after you've finished up the summit.
2:24:06You're speaking about the business side.
2:24:10Well, all the things when you get through.
2:24:12You know, your grain transactions, your land lease, your camel river, all of the things.
2:24:19I mean, you're going to, I wouldn't assume you're going to do that.
2:24:24And what I would do there is I'd put a team together from the White House, the State Department, the Commerce Department, Agriculture.
2:24:30I wouldn't let separate teams go there.
2:24:32I'd have one team
2:24:34And I would have it, maybe rotate the camera by the expertise, but I would put that... Rotate it, sir.
2:24:41Pardon me?
2:24:42Rotate it, sir.
2:24:45Well, if you, I don't know what problems you've got with agriculture versus commerce versus... Well, I see what you mean.
2:24:51I've got to have it, Secretary.
2:24:53uh but you've got to have the same people during the work i mean if you're negotiating agriculture the commerce and let's say the same group to beat it i'm just saying if you wanted to make them happy to change chairman i wouldn't do it but i don't have political problems in our company
2:25:19If you send over a team, let's say that you move down to
2:25:27What's his name?
2:25:28Harold Scott's level.
2:25:30Let's see if you move to Willis and Scott's level.
2:25:33What's going to happen then is you're going to move down in that group, and the worst thing that can happen to you in the Soviet Union is to get down in the bureaucracy.
2:25:40They're worse than ours.
2:25:41And you will sit there untangled for months and months and months.
2:25:45But if you send over a cane, for example, and you've got a secretary that's ahead of it,
2:25:51In other words, if you've got Peterson or if you've got Rogers, I don't know anything about the butts, but somebody of that stature, then they are going to have that stature in the main, and you're going to accomplish what you want.
2:26:04Now, I did this on our deal, and Alkimov finally got it.
2:26:07I went back myself because I wanted to keep it out of the level.
2:26:11And Alkimov, on my second trip, he said, Don, you found out a lot about the Soviet Union very fast.
2:26:16He said, why did you come back?
2:26:18I said, because I didn't want to get down below.
2:26:21And if you get down there, you spend months.
2:26:25And then I'd have the same team so that they all become experts in the Soviet, and they establish the relationship, because again, I have never seen a country where relationships are so damn important.
2:26:35Because these people are a lot unconfident.
2:26:38So they believe in you, and you level with them, they respond.
2:26:43But they'll be tough while they're doing it.
2:26:47The other thing I would be very careful in doing on the team that you put up is that we...
2:26:56I'd be very careful on putting any, let me say, Jewish person who wears it on his sleeve
2:27:12And I'm not talking about Kissinger.
2:27:14They don't consider him a Jew.
2:27:15No, because he does not practice.
2:27:18But I'd be very careful.
2:27:19I couldn't agree more.
2:27:21It's not going to be any Jews going over there.
2:27:24It gets them the wrong way.
2:27:26They don't like it.
2:27:30the other thing i do is i change the ambassador as fast as i could i know uh i think this guy is
2:27:47I'll tell you what I'd do anyway.
2:27:49If I had a country where I didn't expect to do much, and our business was so-so, and I wanted somebody to just sort of hold the fort until I got ready to do something, I'd send Bean.
2:27:59But if I wanted to do something, I'd get somebody else.
2:28:01We'd like to.
2:28:02Because he's, I don't think he's got the help.
2:28:05He's got the help.
2:28:06He'll get us a call, I guess.
2:28:10On the agriculture, one thing that I think that you ought to consider, you talk to any banker like Flanagan, and he's going to tell you that you don't give credits on consumables, because they're all brought up in the financial community, and you give credits on capital goods and you don't on consumables.
2:28:29And any banker will tell you this, because you can repossess the capital and the life of the equipment lasts a long time, but a consumable is gone.
2:28:39On the grain thing, and you don't have to do it now, but what I would look for in the grain deal, the one thing we can really compete in this country is in the field of agriculture.
2:28:48We can compete with anybody in the world, and I think if you could get a 10-year commitment out of them, get a big commitment where you go out and plant for it,
2:28:56then I think it's worth giving medium-term credits of five or six years.
2:29:00But if you're talking a one-year, two-year, three-year deal, then I wouldn't give credits.
2:29:04But I would use the credit as a tool to get a long-range commitment where you know that you're going to sell X thousands of tons of grain each year to the Soviet Union, you plan for it.
2:29:17On the commercial credit side, I think you should avoid setting a set figure on credits.
2:29:26I would not come up and say, okay, we're going to allow $500 million.
2:29:31I would leave it at the XM bank level, and then I'd look at the quality of the deals that you make, and if the quality of the deals are good, then let it go like you do in most countries.
2:29:44Now, some countries you set, I mean, there are maximum sets for the president, but suddenly they're set by the machinery that's analyzed, and I think eventually...
2:29:55You can establish relationships with the Soviet Union to where you've got the kind of information that you need to judge those credits, which you can't get now because they're not a member of the International Monetary Fund, but I think you can get those key things.
2:30:08But I wouldn't set it if I were you.
2:30:09I would not.
2:30:10I'd leave that.
2:30:12You've got to give them XM credit, but I wouldn't set a limit on it.
2:30:19No, not an interest rate on the amount that it can go up.
2:30:23I wouldn't set an amount.
2:30:25All right.
2:30:29I'll leave it open then.
2:30:34The only other point on this is an amendment on the most favored nation.
2:30:40Obviously, they've got to have that, and you realize that, so I'm not going to go into that.
2:30:45But I will also say something to you, Mr. President, and I know you have
2:30:51disagreed with us, but I think this is one place where I wish you'd reconsider.
2:30:57The Soviet Union is one place, in my opinion, where it can make the difference in the political.
2:31:02Now, I know that you traditionally, and I know Henry feels this way, the commercial transactions are not that important and political then.
2:31:12Why is it important?
2:31:14This is a place, in my opinion, where they can be extremely important.
2:31:20And I think it can be just as useful as anything else that you can do, is if we get commercial transactions going and we get our people going back and forth, I think this is one country where you can really make a difference.
2:31:34And when I picked an ambassador to the Soviet Union, I would pick somebody that you had confidence in that can go over there, and he becomes a fox for the Soviet Union, and that means that everything goes through that chute.
2:31:46once you've got your arrangements made, so you haven't got a lot of different people after you get through your original negotiations that coordinates it all.
2:31:58But he's got to be a good one.
2:32:02The other suggestion I've got is that I think that if I didn't have confidence in him, and I happen to have confidence in him, but I did not call him out of courtesy anyway, do you know that
2:32:14You, Peterson, nobody has called him where he stands since he left that office about his trip to the Soviet Union?
2:32:22Nobody has.
2:32:28He has not?
2:32:30Pete Peterson hasn't talked to him?
2:32:32You haven't talked to him?
2:32:37Nobody's talked to him.
2:32:38Butts didn't talk to him?
2:32:39He reported to me when he came in.
2:32:42He reported to you.
2:32:43That's the last conversation he's had.
2:32:46I haven't talked to him since we started this series of discussions.
2:32:52Because he's really quite upset about it.
2:32:57I don't blame him.
2:32:59I mean, after all, he got the damn thing started.
2:33:04That is the commercial side of it.
2:33:06Well, Peterson's the one that's supposed to talk.
2:33:10What the hell's the matter with him?
2:33:13I see what you're saying.
2:33:14So they're stupid.
2:33:19That's all.
2:33:20Just stupid.
2:33:22I mean, can't you simply follow it up with an initiative that stands together?
2:33:25All right.
2:33:27It stands to give a party for 12 minutes here tonight.
2:33:35I thought you were all working together on this, sir.
2:33:38No, well, you've got Peterson's got it.
2:33:39I got it, sir.
2:33:42And I'm going to run the Commerce Department.
2:37:37You know, let me say, one of the reasons that I appreciate you
2:37:55And frankly, Bill Renshaw and the rest is that you're a different breed.
2:38:00But generally speaking, you have no doubt it's a tough thing.
2:38:03Maury Sands, good God, Maury was the best Secretary of Commerce around here a long time.
2:38:08But to them, the mainstream businessmen were for it.
2:38:12But what I mean, the business elite that we talk about, God damn, they don't stand up.
2:38:18They just bitch.
2:38:19Bitch, bitch, bitch, bitch, bitch.
2:38:20And they're never honest.
2:38:21They never come in.
2:38:22Sure, as I said, Rush, the young one, maybe, Weyerhaeuser, Kendall, I can name them on my hands, the ones I've ever heard drunk or in the school, they were in a sweat.
2:38:33But I always hear from Fitzsimmons and Meany and all these...
2:38:39These illiterate labor leaders, I understand that won't be, some of them will be with us in the election too.
2:38:43They're always with us when the country's in trouble.
2:38:47The businessmen aren't here to help.
2:38:50You just have to face that fact.
2:38:52The businessmen are linear players.
2:38:55The businessmen sit it out.
2:38:56The businessmen are thinking about their problems and the rest.
2:38:59And I understand that.
2:39:00But on the other hand, what you, what we've really got to do is try to get a few, you've probably got to build a new establishment, that's what it really gets down to.
2:39:12But you're going to find it's very difficult.
2:39:14Jim Roach is ready to dedicate stuff.
2:39:15Jim Roach is finally... Oh, Roach, Roach.
2:39:17Jim Roach.
2:39:18He came up, he thanked John Emerson.
2:39:19His exact world is a stale organization.
2:39:21We've got to do something about it.
2:39:23We've got to take the risk.
2:39:24Roach was a good one of our...
2:39:26He's gone now.
2:39:28I don't know who the successor is.
2:39:33I don't know.
2:39:34I met him.
2:39:35I met him.
2:39:36He is a fellow that's going to be a professional.
2:39:39Don, see, the trouble is that you've got so many professional business managers, Harvard School of Business.
2:39:46They came up through the chairs, and the sons of bitches are just like any bureaucrats.
2:39:51They understand that.
2:39:52That's what you're running into, aren't you?
2:39:55The West of California.
2:39:57San Francisco, Mr. President, I have called 14 of the leading businessmen in San Francisco, and I still never chairman.
2:40:05Well, San Francisco, we know the man.
2:40:08It's Los Angeles.
2:40:11I finally got Forrest, Shumway's signal.
2:40:13I mean, I got him though.
2:40:14I had to drag him, but I finally got him.
2:40:16He's one of the guys who stands up on foreign policy.
2:40:18That's why he's doing it.
2:40:20Shumway's a tough guy.
2:40:23Yeah, he stands up, but I'll tell you a lot of other ones after the woman and screaming.
2:40:30But I think so.
2:40:32I think that by no means that we will have...
2:40:37We've already, well, you can't, for Christ's sake.
2:40:40We've got to get to this.
2:40:41We've got to find a way to do it, because you can't let this country end up, you're not going to be here forever.
2:40:46And then are the liberals and the labor unions going to take the place over?
2:40:49That's the problem.
2:40:52That's the thing they've got to bear in mind.
2:40:54The businessmen and guys have learned to fight each other.
2:40:57Let me say it, in fact, you're a voice in the wilderness.
2:41:01That's what you're fighting out.
2:41:04You're a voice in the wilderness.
2:41:06I mean, you take, for example, let me give you an example.
2:41:08You're in the business council, right?
2:41:11Yeah, you put me in that.
2:41:12Let me tell you this.
2:41:13Let me tell you this.
2:41:14There are a lot of wonderful people with wonderful lives, of course, and they're there many, many times, and they always use the right force, and they drink the right way, and they're nice socially, and they play a nice game of golf, and free-agent tennis, and skiing, and so forth and so on, and they go to all the watering places every now and then at the right time, or they're up in...
2:41:33Bahawker at the right time, or Palm Springs at the right time, or Sun Valley at the right time, and all this and that thing.
2:41:40On that business council, despite what they cheer for, they'll cheer who's ever there, if it happens to be the big three.
2:41:47I know these people.
2:41:48I know them like the back of my hand.
2:41:50I've been through the bullets.
2:41:51You know how many on that council we can count?
2:41:57Ten.
2:41:57They're ten.
2:41:57The rest, now and then.
2:41:59They were supposed to be the top of the discussion.
2:42:02Let me tell you about a businessman that you've never met, and most of those guys you wouldn't spit on, who in terms of wealth, all of which he created and sold, who could buy and sell most of them, bought that one.
2:42:18He's only worth $150 million.
2:42:20All cash.
2:42:21Why don't they lie about them?
2:42:23Why doesn't he have nothing to do with them?
2:42:26I'll tell you why.
2:42:27Because he's not one of them.
2:42:29He thinks that they're a bunch of, frankly, dilettantes.
2:42:33And they are.
2:42:36Now that's my point.
2:42:37There just aren't enough guys like that or yourself.
2:42:39What the hell did you do?
2:42:40You came up that way, you all know.
2:42:42You started out in a truck, right?
2:42:44And then you fluctuated the truck.
2:42:47And what about these clients?
2:42:48So have no illusions about it.
2:42:52I think we've got to realize that we're talking in a long room there.
2:42:56We can't do those.
2:42:58Jim Roach, maybe.
2:42:59You can win him.
2:43:01But I, listen, I've done, going back, I'll never forget, when I was vice president, I went to that goddamn business council twice a year.
2:43:06I answered questions.
2:43:07I was a great favorite.
2:43:08Well, I held them because I was vice president.
2:43:12I never heard from one of them afterwards.
2:43:13The same, I'll be the same.
2:43:14I'll never hear from him again when I leave office.
2:43:19I understand.
2:43:23But you see, the reason is, you've got to understand that they are part of the establishment.
2:43:28The establishment is going to help this country.
2:43:31Who are the great press lords?
2:43:33Time, Newsweek, Live, all three networks, all of them are Jews, all to the left.
2:43:45That's the press establishment.
2:43:46And you can add in Los Angeles Times, same thing, with its editorial.
2:43:53What about the professors?
2:43:55Look at the Ivy League colleges.
2:43:57All of them came out.
2:43:58They couldn't wait to come out.
2:44:00Let me just say, one of the well-known in North Vietnam came on the campus president.
2:44:05I heard from a lot of college presidents.
2:44:07You know what kinds?
2:44:08Kinds that have five times the enrollment of Harvard and Yale.
2:44:14College of 35,000 out in western Texas.
2:44:18If you like that.
2:44:21Now this is a bunch of clowns.
2:44:23So you see, there's the establishment of those that was no matter.
2:44:26So what we have to remember is that
2:44:29The people jump down to you because you have risen in the business world, and I because I've been political, and Pete has always been in the business world.
2:44:40Basically, they are the people we would prefer to be with, generally speaking, from a social standpoint.
2:44:45They're the nice people.
2:44:47They're the people who know how to entertain.
2:44:49They're the ones who've been on the right parties, but in terms of guts, they aren't British shit.
2:44:54Now that's my attitude toward them, and that's the way they're going to be treated until they wake up.
2:44:59I'm not going to go suck around them.
2:45:02Well, I don't think you have to.
2:45:05I think that the group that I'm trying to put together are not necessarily that, because they won't stand up.
2:45:10No, the group you put together is a political group.
2:45:12I'll see that.
2:45:14But we're not going to see any more business.
2:45:15I'm just not going to take the position.
2:45:17We're going to give up on this.
2:45:18No, you'll see the group.
2:45:20I've reached, almost reached that point.
2:45:22We'll take the ones that you get together.
2:45:24But I must say, Pete and all the rest of them are urging me to go to the business council.
2:45:29He's got to go here.
2:45:30He's got to go there.
2:45:31How could it?
2:45:32Let them come here.
2:45:33We met a terrible money candidate in Texas.
2:45:36He can believe that, Mr. President.
2:45:38Well, they're also busy making money in Texas.
2:45:40What?
2:45:41We went to a half-bill over in Texas.
2:45:43You know, I finally got the guy in Texas.
2:45:45Oh.
2:45:45And he wasn't that son of a bitch that took it, made me mad.
2:45:48All right.
2:45:49Because he wouldn't do it until he checked with Connery to make sure that Connery really... Yeah.
2:45:52And he said...
2:45:56Oh, yes.
2:45:56He first of all, he first of all, he said about the time, he didn't think he had the time.
2:46:01Well, he was trying like mad to get a package job after he had plenty of time for that.
2:46:05And then he kept the land name, the land name, Chambers also.
2:46:10And so finally, Conley.
2:46:12It's Conley.
2:46:13Conley told me.
2:46:14No, he said Conley.
2:46:15Even three of John's candidates turned his down.
2:46:20Well, their lawyers were basically businessmen.
2:46:23Well, because they had lawyers, the lawyers were businessmen.
2:46:27But I, but Don, let me say, you have a labor of, it's a labor, it has to be a labor of patriotism that you're doing, and I appreciate it.
2:46:36But I, but have no illusions.
2:46:38Have no illusions about this new group that you're meeting now.
2:46:41They aren't very bad.
2:46:43They're not, they can't shine your shoes.
2:46:44They can't shine Bob, Bob, Bob Adler's shoes either.
2:46:46Even though they wouldn't invite him to dinner.
2:46:49And so he wouldn't invite him to dinner either.
2:46:53I need a better eye, because I sat in this damn house.
2:46:56But I'll have him now.
2:46:57Not very often.
2:46:58Not that I can help it.
2:47:01We'll go more safely than that.
2:47:02Thank you.
2:47:04I hope you're having fun.
2:47:06I'll be drinking no Pepsi over there.
2:47:07Well, you said that you were going to make a deal with us.
2:47:11No, I'm not.
2:47:12I'm going to hold it up.
2:47:15Here's your friend.
2:47:15He's got a franchise for China.
2:47:17For China.
2:47:18He wants me to go to China every month because it helps me.
2:47:22But you take me with you to go to China next time.
2:47:28I got some good notes here.
2:47:32Listen, John Hughes, when you get here, I just told him to get one thing done.
2:47:55have been very important, and which I want you to talk to Pete Hilligan on this yesterday.
2:48:02Don had the idea, you know, because of the game we're playing, I'm just going in the greatest of confidence here,
2:48:09That we were talking to the Russians through a number of various different channels and so forth.
2:48:14And if you don't know the right, I didn't know what the left hand was doing and all that sort of thing.
2:48:18Let me tell you, it's quite deliberate.
2:48:20We have to for reasons of our own bureaucracy.
2:48:23But the decisions aren't going to be made by these stepswitches.
2:48:27They think they're going to.
2:48:29They're going to be made and all pulled together in one place.
2:48:32Right?
2:48:32Absolutely.
2:48:32And the Russians don't understand.
2:48:35But our people don't.
2:48:36And don't you ever tell any of them that they aren't making the decision.
2:48:40When you get back, I want to organize.
2:48:44Joe will come out and take off with you.
2:48:46And you're going to get a set of gloves on.
2:48:49Listen, you've given me three.
2:48:51Now, this guy likes to go off those with the clothes.
2:48:55And later, as we got a slice of cook, he built a club that takes the damn thing out.
2:48:59Get out of here.
2:49:00I'm going to get you a golf ball.
2:49:02You get it to me first.
2:49:04I just wanted one thing to clear with you before I went to see the president.
2:49:11To hear about Wallace.
2:49:13I hope the crisis will recover and support him.
2:49:16Oh, sure, Wallace.
2:49:18No, no, no.
2:49:21I'm full, sir.
2:49:26Oh, that kind of violence, officer.
2:49:28Oh, it's a horror.
2:49:28Excuse me about that.
2:49:32Well, you remember we caught that Russian spy.
2:49:38And they've been making four personal appeals to you.
2:49:42I've talked to Klein-Deems.
2:49:43Klein-Deems is willing to deport him.
2:49:45He says, of course, the FBI and the Justice Department won't like it.
2:49:48They've got the case.
2:49:51But I think you could make a lot of brownie points besides they've got an American who we're smuggling Germans out of.
2:49:57Well, the way I put it to him, Mr. President, I said the President doesn't deal with human bodies.
2:50:06If he lets Malikov go, it will be on its own merits, and you have to know what you've got to do.
2:50:11They'll let him go, but it won't be a trade deal.
2:50:15They'll let him go within 48 hours.
2:50:16I just want to make you look...
2:50:21You know, I was going to tell you, yeah, so it's fine.
2:50:24But if you agree, well, I think it's a good move to be forced to do it anyway.
2:50:31But Don Campbell was saying, he met this Minister of Commerce, and says he'd walk around the clouds and hold the planning, and said, well, I don't know what he would after what I said to him and what we said to him this morning.
2:50:44And he said, I'm not sure.
2:50:46I just saw him in the middle.
2:50:48He said, they don't understand.
2:50:52They don't get what they're asking.
2:50:53So this is something that he was walking about because of his meeting here.
2:50:56Oh, good.
2:50:56That was a tremendous meeting.
2:51:00But the thing is that Ken was very speaking.
2:51:03He really, I think finding it probably doesn't know what our game is either.
2:51:07Well, I'm letting him in a little, but Flanagan isn't the closest man of himself.
2:51:12He's very loyal.
2:51:12I didn't realize he was going over there.
2:51:14I know that.
2:51:15Because he put a halt on it.
2:51:17He told me that you were going to plant in charge of all the economic negotiations.
2:51:22Not there, no, no, but...
2:51:23He isn't up to it.
2:51:25No, but he needs to go.
2:51:25He's perceived.
2:51:26Well, we've got to change that then.
2:51:29He isn't up to it now.
2:51:32Flanagan's not up to it.
2:51:33Are you?
2:51:34No.
2:51:35over there he'll do what he says with the deal that's going to be made he always goes of course the deal will be made by us you know what i mean oh yes at the highest level i wouldn't let him in on the meetings with krasner no i don't mean that i mean that but i don't want to give flanagan the responsibility of going out to negotiate a deal for example
2:52:04He says that you ought to give him credits on agriculture.
2:52:06He says, buts and blabbing and insisting on it.
2:52:08Peterson, one year on it.
2:52:10He says, a lot better.
2:52:11He says, give him credits if you can.
2:52:14He said, you can get a long-range, 10-year commitment to the Russians and get a lead out of them.
2:52:21I think we can't get much more than three years.
2:52:23Whatever it is, whatever it is.
2:52:25I think Kendall's thinking rightly.
2:52:27Oh, yes.
2:52:27But they need our stuff.
2:52:28And he said, here's a place where we can compete.
2:52:31He says, another thing that's very important is don't let any of this stuff get all the way out of your eyes.
2:52:42Don't let any of this get, don't let anything you want get in the lower of your brain.
2:52:47He says it all gets enmeshed just like it does in the arms.
2:52:51He said keep it up at the highest level.
2:52:58This whole point is that you need one team to go shoot all these things.
2:53:11I don't think, I don't think
2:53:16I think he's got the impression that Peterson's trying to go over there, and Buck's trying to go over there, and Flanagan's talking to him, and Eichel's is talking to him, and Beeman's talking to him, and God damn it.
2:53:29But we've got, actually, the best of them is Peterson on the direction, and he's taking direction beautifully because he's right.
2:53:35His instincts are bad.
2:53:35I don't trust him.
2:53:37I don't trust him, and he's got all these connections with the liberals.
2:53:44But...
2:53:45What we have set up is that we agree on an economic commission.
2:53:50We don't want to make the absolute, you should make the decision at the summit on credits and MFN and so forth, but leave the details to be negotiated in July so that they have to behave themselves in June.
2:54:03But I mean, if you tell them you're going to give them the credits, that's enough, and we can put it in the communique.
2:54:18But we are still working on acts with these characters, and we've got to make sure.
2:54:25Well, with regard to this business, the least of our concerns is on Soviet spy, very simply enough.

Nixon, Kendall & Flanigan on Soviet-US Trade and Pepsico

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