Conversation 724-004

TapeTape 724StartMonday, May 15, 1972 at 4:06 PMEndMonday, May 15, 1972 at 4:54 PMTape start time02:06:11Tape end time02:54:28ParticipantsNixon, Richard M. (President);  Kendall, Donald McI.;  Flanigan, Peter M.;  [Unknown person(s)];  Bull, Stephen B.Recording deviceOval Office

On May 15, 1972, President Richard M. Nixon, Donald McI. Kendall, Peter M. Flanigan, unknown person(s), and Stephen B. Bull met in the Oval Office of the White House from 4:06 pm to 4:54 pm. The Oval Office taping system captured this recording, which is known as Conversation 724-004 of the White House Tapes.

Conversation No. 724-4

Date: May 15, 1972
Time: 4:06-4:54 pm
Location: Oval Office

The President met with Donald McI. Kendall and Peter M. Flanigan.

Greetings

Trip to Soviet Union
      -Flanigan’s attendance

Soviet Union
     -Vodka Agreement
     -Pepsi Agreement
     -Trade
          -Pepsi for Vodka
          -Alexei N. Kosygin
                -Vodka sales in US
     -Most Favored Nation [MFN] status
          -Effect on price
     -Summit
          -President's departure
          -Itinerary
                -Austria
                -Moscow
          -Leonid I. Brezhnev
          -Kosygin
                -Presence at talks
                -Economic expertise
                      -Compared to Brezhnev
     -Leadership
          -Nature
          -Kosygin
          -Brezhnev
          -Nikolai V. Podgorny
     -Trade
          -Nikolai S. Patolichev
                -Meeting with the President
                -Kendall's meeting with Patolichev and Yuri [?] Ivanov
                -Identified
                -Kendall’s view
                -Other meetings
     -Vladimir Alkhimov
          -Identified
     -Alexei Manzhulo
          -Identified
     -An unknown person
     -Kendall's advice

           -Previous efforts
           -Importance of personal relationships
                 -Continuity
                 -Specialization
     -President's previous speech on the blockade
           -Support for the President's position
                 -Business
                 -Labor
                       -Frank E. Fitzsimmons
                       -George Meany
                       -Leonard Woodcock
                 -Business
                       -Telegrams
                       -Influences
                             -New York Times
                             -Washington Post
                             -Chet Huntley
                             -David Brinkley
                             -Walter L. Cronkite, Jr.
                       -The President’s view
                       -Rusty Young
     -Trade
           -Brezhnev
           -Soviet economic, political, and social objectives
           -US position
           -Soviet as bargainers

Vietnam
     -William P. Rogers
           -Speaking ability
                -Business Council speech
                     -Kendall’s assessment
                     -Content
                     -Paul Ostend [?]
                     -Assessment
                     -Feedback

Soviet Union
     -1959 compared with 1972
          -Differences
               -Consumer goods
               -Marketing opportunities for Pepsico
                     -Eastern Europe compared with Western Europe

                               -Romania
                               -Yugoslavia
                               -Czechoslovakia
                               -Hungary
                               -Poland
                          -Agreement to market bicycles
                               -Montgomery Ward
          -President's trip
                -Stop in Poland

An unknown person entered at an unknown time after 4:06 pm.

     Refreshment order

The unknown person left at an unknown time before 4:48 pm.

     Pepsi-Cola

     Soviet Union
          -Trade
               -Pepsico
                    -Soviet assessment
                    -Technology
                          -Japanese
                          -German
                          -US
                    -Soviet attitude
                          -Patolichev
                          -Alkhimov
                          -Manzhulo
               -Other countries' experiences
                    -French
                    -German
                    -Japanese
               -Commercial transactions
                    -Kendall’s view
                    -Credit
               -Negotiations
                    -Kendall’s view
                    -International Brotherhood of Teamsters
                          -Kendall’s experience
                    -Brezhnev
                    -Eisaku Sato

            -Ivanov
                  -Identified
                  -David Rockefeller
                        -Ivanov’s view
      -Relations with US
            -Alkhimov's comments
            -Change
-Philosophy of spreading communism
      -Chile
      -Cuba
      -Political persuasion
      -Alkhimov
-Summit
      -Preparations
-Military
      -Alkhimov's comments
      -Influenced by US expenditure
      -Supply of North Vietnam
            -Competition with People’s Republic of China [PRC]
      -Mikhail Suslov
-Economic interests
      -Growing power
-Summit
      -Effect on the President's Vietnam actions
      -Follow-up negotiating team
            -Business issues
                  -Grain
                  -Lend-Lease
                  -Kama River
            -Composition
                  -White House
                  -State Department
                  -Commerce Department
                  -Agriculture Department
            -Rotating chairmanship
            -Continuity
            -Problems
                  -Bureaucracy
                        -Williston Scott's level
                  -Department Secretary level
                        -Stature
                        -Peter G. Peterson
                        -Rogers

                                -Earl L. Butz
                     -Personal relationships
                          -Alkhimov's comments
                          -Continuity
                          -Importance
                     -Kendall’s view

Stephen B. Bull entered at an unknown time after 4:06 pm.

     President's schedule
          -George P. Shultz
          -Caspar W. Weinberger

Bull left at an unknown time before 4:46 pm.

     Soviet Union
          -Trade
               -Summit
                     -Follow-up negotiating team
                           -Jewish team members
                                -Henry A. Kissinger
                                      -Soviet attitude
                                -Soviet attitude
                                -Nathaniel Samuels
                                -Limitation of numbers
                                      -Kissinger
                                            -Soviet attitude
          -Ambassador from US
               -Change
                     -Jacob D. Beam
                           -New post
                           -Health
          -Agriculture
               -Credits on consumables
                     -Refusal
                     -Flanigan
               -Credits on capital goods
                     -Acceptance
                           -Reason
               -Grain
                     -Length of commitment
          -Commercial credit
               -Level

                    -Fixed
                    -Export-Import [Ex-Im] Bank
                    -Establishment
                    -International Monetary Fund [IMF]
                    -Advice from Kendall
                          -Amount
         -MFN status
              -Necessity
         -Trade with US
              -Importance
                    -Poltical impact
                          -Kendall's opinion
                          -President's and Kissinger's opinion
              -Role of new Ambassador
         -Maurice H. Stans
              -Trip to Soviet Union
                    -Communications
                          -The President
                          -Peterson
                          -Flanigan
                          -Butz
                          -The President
                          -Peterson
                                -Criticism
              -A party
              -Peterson

**********************************************************************

BEGIN WITHDRAWN ITEM NO. 2
[Personal Returnable]
[Duration: 3m 52s ]

END WITHDRAWN ITEM NO. 2

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    George C. Wallace
        -Assassination attempt
              -Condition

          -Attacker(s)

Support for the President
    -Businessmen
           -Kendall
           -Flanigan
           -William S. Renchard
           -Stans
                 -Service as Secretary of Commerce
                       -The President’s view
           -Complaints of elite
                 -Exceptions
                       -Young
                       -Frederick Weyerhauser
                       -Kendall
    -Labor leaders
           -Fitzsimmons
           -Meany
           -The President’s view
           -Election support
    -Businessmen
           -Compared with labor leaders
           -The President’s view
    -Need to build new establishment
           -Difficulty
           -James M. Roche
                 -Assessment of hippie culture
                 -Replacement of General Motors [GM]
                       -Richard Gerstenberg
           -The President’s view
                 -Harvard Business School
    -Problems
           -Chairman for San Francisco
                 -Number called
           -Chairman for Los Angeles
                 -Forest Shumway
                       -The President’s view
    -Future
           -Liberal-labor hegemony
           -Need for businessmen to unite
                 -Kendall as exception
    -Business Council
           -Membership

          -The President’s view
          -Fair-weather support
          -Number of supporters of the President
     -Robert H. Abplanalp
          -Attitude of other businessmen
          -Amount of holdings
          -Source of fortune
          -Attitude toward businessmen
     -Kendall
          -Background
     -Businessmen
          -Prospects of support for the President
          -Roche
          -Business Council
                -President's appearances when Vice President
                      -Follow-up
                -President's expectations for future

US establishment
     -Businessmen
     -Press
           -Time
           -Newsweek
           -Life
           -Three major television networks
           -Ownership
                 -Jewish
           -Philosophy
                 -Left-leaning
           -Los Angeles Times
     -Education leaders
           -Ivy League professors and presidents
                 -Position on Vietnam
           -Larger colleges
     -Social class
           -The President’s view
                 -Exceptions
                       -Kendall
                       -Flanigan
           -The President’s view
     -President's treatment of establishment
           -Kendall's attitude
           -Business Council

                        -Flanigan's suggestions
                        -President's attitude
             -Problems
                  -Texas chairman for the President
                        -William P. Clements, Jr.
                              -Kendall’s view
                              -John B. Connally
                              -Desire for David Packard's job
                              -Connally
                  -Lawyers
                        -Compared to businessmen
                              -The President’s view
             -Business leaders
                  -Kendall's efforts
                        -President's appreciation
                  -The President’s view
                        -Abplanalp
                  -President's invitations

     Pepsi

Henry A. Kissinger entered at 4:46 pm.

             -PRC
             -Women in PRC and Hong Kong
                  -The President’s view
             -Soviet market

     Soviet Union
          -Trade with US
               -Centralization of US decision making
                     -Role of lesser figures

     President's schedule
          -Golf with Joe Wolf

Kendall and Flanigan left at 4:48 pm.

     Soviet Union
          -Kissinger's meeting with Anatoliy F. Dobrynin

     Wallace
          -Shooting

          -Assailant
               -Suspected George S. McGovern supporter
     -Violence

Soviet Union
     -Captured Soviet spy
          -Appeals
          -Deportation
               -Richard G. Kleindienst position
               -Federal Bureau of Investigation [FBI] and Justice Department
               -Kissinger's recommendation
                     -Exchange
          -[Forename unknown] Malekov [?] release
               -Conditions
     -Trade
          -Kendall's meeting with Nikolai S. Patolichev
               -Effect of meeting with the President
                     -Kendall’s view
          -US policy
               -Kendall knowledge
               -Flanigan
                     -Knowledge
                     -Kissinger’s view
                     -Haldeman's recommendations
                     -The President’s view
               -Decision making
                     -High level
                     -President's meeting with Brezhnev
               -Responsibility for Flanigan
               -Agriculture credits
                     -Butz
                     -Flanigan
                     -Peterson
                     -Duration
                           -Kendall's recommendation
                           -Kissinger's recommendation
               -Benefits
                     -Lower level bureaucrats
                     -High level officials
               -Negotiating team
                     -Kendall's recommendation
                     -Kendall's impressions
                           -Peterson

                                 -Butz
                                 -Flanigan
                                 -Samuels
                                 -[Forename unknown] Dean
                           -Peterson
                                 -Kissinger’s view
                      -Decision on credits and MFN status
                           -Timing
                           -Reasons
                -Fragility
           -Soviet spy
                -Importance
                      -The President’s view

     Vietnam
          -Military action
                -Bastogne-Birmingham Road
                     -Reoccupation
                     -Previous reporting
                     -Current headline
                           -Washington Star

     Kissinger's schedule
          -East Room reception

Kissinger left at 4:54 pm.

This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.

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