Conversation 851-004

Transcript (AI-Generated)

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 Do not cite this transcript as authoritative.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.

Archer, how are you?

Come in.

President, I'm on.

Well, I'm sure you're probably okay.

I got a report that he's meeting us.

Oh, good.

He's going to roll an account.

In fact, I told you about it.

Sure, John.

He knows about it.

He does.

I will start by saying that God knows what he will do when he goes back and what he can deliver when he goes back.

And he is not going to overstate anything.

He's not going to say one thing and do another.

trade area.

We have a very, very difficult problem here.

And unless the Europeans start to be damn more cooperative, there's no way that we're going to be able to get any kind of trade that's going to move in the wrong direction.

And if I see this as something you could say that you don't think agriculture products

Everything is a reaction.

This is 2020.

I said, I'm going to the second chance election.

Now that you're in Europe, you realize that you can't just be in the United States.

But on the other hand, you're in Europe.

You're the only European statesman we think of.

And look outward rather than inwardly.

And I said, we're going right down the track.

And I talked to him.

I said, we're going down the track to a pretty rapid confrontation here, unless the Europeans start being a hell of a lot more cooperative.

So we prepared the way.

And George sat in for an hour or two with one of us on hand.

And we were in a chat converse.

And we discussed the situation.

But he is, one, aware of our problem and our concern.

Two, he is aware of the fact that we don't think the Europeans should be very cooperative in either the Cree area or the monetary area.

And three, he is aware of the fact that unless there is a change in the attitude of Europe, we are going to have a violent upsurge in the protectionist claims in this country, which we will not be able to stop.

We left it so that we got the bargaining position, I think.

You've got it with him, and he'll support you, but he doesn't have enough support in the government.

Barber is not really... Not a big man.

And his first assistant, Sir Douglas Pallon, I have a letter from him in which he tells me how everything is moving rapidly and beautifully in the International Monetary Fund.

Well, he doesn't have that.

Just out of touch with reality.

President, I have some good news for you before we turn to the bank.

Want to hear some good news?

What did you do to raise the discount rate?

These bank events.

You know these four banks which raised crime?

Yeah.

Oh, yeah.

Two of them are withdrawing.

The third probably will.

And we're working on the fourth right now.

That's great.

First time job on this work, and I know it.

Well, I'll tell you, it had to work today because I'm testifying on that old business tomorrow.

Yeah, they tested on it.

Oh, it's very interesting.

So that means before we get into the general situation, before you tell us more about Europe and talk about some long-range things, about your testimony, I was saying to George yesterday, the reason I thought we ought to talk today rather than tomorrow when we have a little more time, is that I'm going to shift something around.

uh everybody of course george said by another said yours is going to get the most attention you're going to get a hell of a lot of attention tomorrow in my opinion uh under those circumstances uh

I think you're probably going to get questions, for example, on Bill Martin's, Gower, and will be comments for the effect that the phase three wouldn't work and that the inflation was kind of up to 4.5%.

I think you may get some questions.

They're going to try to separate you as much as you can.

Let me say it.

We all know what our problems are here.

And of course, is Mills on that?

No.

No, this is Senate banking.

Yeah, I'm going to see Mills tomorrow.

Well, let's say, except for .

But I think it's very important.

What I meant is, I think it's very important that you know the minefields up there, but they're going to try.

Oh, I know.

The press is going to try to distort it.

Remember, like they did to you two years ago.

Oh, yeah.

I read your testimony.

You didn't say that one.

They said you said it all.

But I'm just going to say that I thought it was good that we could have a little talk before.

So you can say if you raise these questions.

No, I'm giving, I'm giving, well, sorry, I just didn't bring my statement down.

That's all right.

Give me a strong support to phase three, indicating, yes, sure, some people are expressing doubt, but don't make premature judgments and give it a fair chance to work.

Let me say another thing you can say in answer to a question that comes up.

You can say that you want to remember

that we've noted that there are concerns expressed as to whether or not there is a stake in the closet.

Well, you can say there sure is.

You can also say that not only is there a stake in the closet, but from the experience that you've had and from the conversations that you've had with the man in the White House, you have a man who's got a wheel that's staked.

There's no question about that.

I'd lay that out there hard, and we're not going to tolerate it.

If you'll say that, it'll help.

Well, I can't.

I don't think I ought to quote you.

Oh, I mean, well...

I think I ought to talk about... No.

Oh, no, not that.

I don't want to... You've got to keep your options open.

Yes, sir, I will.

No, what I can do in my conversations with the administration people, the chairman of the consulate, and the others on the council, there was a strong determination.

Why don't you say, if you could put it this way, I can say that in my conversation with the administration people, gentlemen, I can tell you this is the very highest level.

See that?

Use the term, the very highest level.

I don't know.

Because I want this word to be out there.

I have an interest in it.

If you want me to do that, I will.

Yes, sir.

Okay.

That isn't going to buy us anything.

Okay.

And I've got to do it.

That's good.

If you swear it, then I'll do it.

I swear it, then I'll do it.

Oh, fine.

Fine.

I'll do that.

And next.

But I think most of the questioning will be on interest rates because the bulk of my statement is devoted to management.

Well, they might.

They might.

Well, you're saying that you're...

I said, George, you're a good friend.

Yes, I have been.

You are...

You're testifying tomorrow.

Proxmire is on your committee, and he's also on my committee.

And I stopped and told you what I meant.

But George answered.

But George answered, I think, quite correctly.

But each of us will have Proxmire.

He'll go to one hearing, and I'll go to the other.

Well, so much for that.

I congratulate you.

I think he was on the second one.

Well, Mr. President, that's what's waiting for us to do.

We don't want it on the second one.

Well, there's all of these international volunteers who are in shape.

And they're going to be here.

I'm going to say just one other word, and then I'll let George proceed.

The interest rates are rising, and the money supply and past growth that we've had is at an end.

uh you know these are very jittery people and they take these week to week amongst among figures which there's just no way in the world that i know of control let me just say

But you know, Arthur, we, uh, much as we all respect Bill Martin, he was an up-and-down man, and he brought some stability in this damn place.

And I would, uh, if you were to...

I... You see, if you were to turn it around, like he did, it would raise all the hell.

I don't want to crunch.

I don't want to recession.

Right.

But now is the time to tighten it up some, do you think?

That's right.

You really think it is?

Yeah.

Yeah, we do.

Now then, now then, what...

It'll be done responsibly.

I'll be getting a guard this time.

It'll be done responsibly.

Don't worry about it.

That's a nice word, responsibly.

We didn't complain about that.

What do we have to do?

Well, we can tighten up now, and I'm going to wait and see for a while.

The treasurer has a plan, so we're going to rest for a while.

A couple of weeks to watch and see what the reports are.

But money supply will grow.

It must grow.

It has to, Mr.

Chair.

But not at the rather fast rate we had towards the end of last year.

Thank heaven you had it.

It was a good time to have it.

Well, we made your share.

You said you would.

Now we've got another year.

Well, we've got three more years.

Oh, yes, sure.

And also, we just don't want to have any more elections.

We've got three more years.

We've got three more years, and then this is a great country, and we're going to keep it that way beyond the creeds.

Just lay it out, see if you don't get out.

Well, now I was going to talk about something else, but

It was a trip to Japan, but that trip, in view of the foreign exchange problem, George is going to tell you about plans that we've been discussing.

It's been discussed with the Japanese, with Tanaka, with Sasaki, the head of the Central Bank.

They're waiting for words from me, and I will just tell them I will as soon as I can.

Let's hope you go.

I'll go later on, but

This isn't quite the time.

And I'll check with you before I go, because I want to be sure.

I was going to tell you, Henry is going to stop in Japan for a four hour, three or four hour visit.

We've been off on the way back, but he won't be going into this sort of thing.

The protection base will be over there sometime.

It will be useful.

I don't know if it's seven or eight.

Eight.

Before George gets going on the foreign exchange crisis that we face, let me give you just a few figures.

This is taking on very sizable proportions.

Since January 22nd, when it began, the outflow of dollars amounts to $4.3 billion.

And $2.6 of that has gone to Germany, and the rest is scattered.

So it's along, and today, today the Germans took in a billion and a half, so we can accelerate that.

Well, I think you might enjoy it.

Mr. President, we talked about this a little while ago.

We did agree to modest intervention.

Not so much on the grant.

We thought we should go out on that rather than we should have evidence that we had done our part to have things be stable.

And we've done that, although we still have not used up all of our $200 million that we decided to cap ourselves.

In fact, I think we've used about $37 million so far.

But...

We have had a number of meetings with Bob and Arthur, Herbstine, Pogover, myself, Bill Rogers.

Bill Casey has sat in on the most recent ones.

Peter Flanagan has been in our worship meeting.

We pretty much agree upon ourselves that this,

The speculative flurry that we now see, whether it passes or not, is based on reality.

The reality is that our trade deficit is very large, $6 billion or so this year.

It hasn't gone down as much as we expected it would go down next year.

But even so, the reality is we have a gigantic trade deficit.

and we have a very large balance of payment steps that however one wants to measure, we don't think that's going to go away in a hurry.

Therefore, we feel that there is this underlying situation that needs correction, and the Smithsonian agreement basically didn't do it, in part because it was large enough

in part because there are all sorts of offsets that countries have used, and in part because it's deteriorated.

That is, the British now have an exchange rate that is below where they started in the Smithsonian, so that they not only are back to where we started from, but below that.

So for all of those reasons, it seems to this group that we have a situation that's out of balance.

We have talked about a package of things that might be done that has the following ingredients and their variations on each one of these.

But I'll summarize the line that is certainly for the name of the view.

It would call for, first of all, a devaluation by the US on the order of 6.5% or so.

And then a special effort from the Japanese to get them to revalue by that amount so that the net for the Japanese would be 15% or 13%.

And with respect to the rest of the world, we would have the devaluation by the US.

This involves persuading the Europeans, particularly, to stand still and not try to

countering the move that we might make, as well as persuading the Japanese to revalue when we devalue.

We think that if that were done, if we made that effort, it would be harder to persuade the Japanese than it would be the Europeans, is certainly the assessment of the security.

But nevertheless, there is a reasonable prospect that that might happen.

We feel that if that were done just by itself,

Google might very well do that and say, well, you did that one.

It didn't seem to work very well.

So why are you just doing that again and not searching elsewhere for things that could be done?

And they might even point to our plan and say, in the plan, you can call us for revaluations and devaluations of this kind when that basic imbalance is clear.

But it also suggests that we should do other things than just change the exchange rates.

So we would put as a second part of this program and announcement that we do intend to go forward with trade law destruction before the Congress that would allow, would permit the U.S. President of the Authority to negotiate

in a manner that would help to expand world trade, but at the same time have very strong provisions in it that would protect our workers and our businesses and that would enable us to bargain for a fair deal in world trade.

It would also have in it a provision through which you could declare a balance of payments emergency and impose a surcharge.

We think that

We were in a position to tell, but he's not going to have quite

At any rate, we would have a trade package which could be stated in a speech in a general way.

And our thought on it is that if this comes rapidly, that we should say what we might say rather than immediately spell it all out.

that we're going to consult with members of Congress and the Labor and Business and so forth about our ideas before locking them in concrete and preserving them so that we would have a chance to rally support for it rather than just announcing them.

Although I would say

that we have made radio headlines since the last time you and I talked last week.

We've had, like, the Go Red Line.

We have a pretty good talking paper now.

We've gotten out that sells out reasonably well, but we haven't mined, so we're prepared.

There is concern about the implications of these moves for the gold market.

And to some extent, in a perverse way, I guess, both in particular fields, that people may suspect that somehow or other we are interested in getting the price of coal up, I guess because we have so much of it, and that we are afraid to sell it.

Of course, we're constrained by our

by our agreement with other central banks against the gold market.

And since our private position has been that we're willing to do this, if others agree, we should make that public and say that we're quite willing to win it if we think it's appropriate to sell gold on the private market.

If that's what other people want to do, we'll put ourselves in a position to talk with them about that.

And this would, on the one hand, show that we're not trying to hold onto this forever.

And at the same time, it probably would have the effect of not permitting a large increase in the price of gold.

And also, we were expecting an international agreement.

We'll do it only if we have this one.

I'm not going to do it by myself.

We might tail off of this, although this is a relatively minor item, but something we talked about in the Republican platform.

The right of privacy of the U.S. for that cell phone, that's something that the conservative community particularly is interested in.

But this is something we couldn't do if we didn't have a major in the package.

with respect to our capital control program that we've been struggling to get rid of what you promised to get rid of back in 1968 hard to do that we might say now we're trying to establish a

general equilibrium right here, and we are going to phase these controls out over a period of time, and now some end date, a year or two years from now, to put that forward as a program.

Now all of these things are broadly consistent with our international monetary and trade plans we've put forward, and this is behavior that is in accord with

what we said nations should do when there is indefinite evidence of an imbalance.

And we also said that not only should a nation under the front of the desk do something, but a nation under the front of the surplus should also do something to make that particularly strong with the Japanese.

So that is sort of the nature of the problem.

The immediate crisis may or may not pass.

What we think that it will recur and that perhaps this week or sometime very soon we should be prepared to take action that is in the nature of leadership of us.

What would be the time you'd all like to hear?

Like this week?

Tomorrow.

Next week?

Tomorrow.

No, no speech.

Oh, we have.

Oh, the action.

I may have it right now.

We have these things to do.

We have to try things like that right now.

We have to try it.

We have the Japanese to agree.

We think that's probably the first part of the call.

You can tell them the category, but I've decided to ask for legislation to oppose the search acts.

If you need to have something, that's one club.

And then...

right on the heels of the Japanese discussion with the European.

We think we should try to do this in the space of, like, three days or something like that, because there is a, I would say, quite a high probability that there will be leaks as this goes on.

I understand it's ridiculous that the Japanese seem to be very leaky.

And then we should be prepared to move ahead.

Well, let's come again now with regard to what you had in mind in terms of when congressional leaders, you see congressional leaders, a lot of them, George, are going to be taken off Thursday, you know, for this silly length of day in business.

Well, it's not silly, but they all take off.

You can get to them, but

Well, there are, in a sense, these timing points.

There's one point in time in which you decide, all right, let's do this.

Then there's an elapsed time while we try to get our trading partners to go along with it relatively short.

This is on the monetary side.

You're going to go ahead and demonstrate legislation whether they like that or not.

You're proposing this exchange rate realignment.

We're not convertible into gold, and we will announce what we think proper exchange values are, and they will have to struggle in their currency markets, and we won't have as many.

So that's a, that is a... Arthur, what is your feeling about getting rid of controls?

You know, about a year ago, you felt we should move on that.

Are you, do you feel we can now?

I'd phase them out.

You wouldn't announce a schedule, but I would do it over two or three years.

What about the gold thing?

Does that bother you?

No, the only thing that would...

I mean, the purchase of gold, right?

Oh, I think that's a silly business.

No, I wouldn't.

But I don't know that I would fight awfully hard against it.

It could, you see.

It's silly.

It could be counterproductive in a minor way because people might want to accumulate gold and would be importing gold and thereby worsen their balance of gains.

But if you saw some political advantage, I doubt, I think they would

You know, the number of people who worry about this, I don't think, I don't know.

Well, first of all, you understand it's very small.

One one-hundredth of one-hundredth.

Yeah.

Well, that's one of the main points.

Oh, yes.

central banks having now the power or willingness to sell off into private hands.

Because that means, you see, a gradual dismantling of gold in the international monetary system.

What we're talking about now, then, is a decision with regard to devaluation by 6.5%.

And the drive to get to Japan, as you mentioned.

You all agree this is what should happen, should be done.

Well, there's some...

On that, there is a variation on the theme that is not favored by the group, but which is an important variation.

And that is to say, and we've never consulted anybody about this, that we think the dollar is still overvalued and that exchange rates should change, and they should change by something like this amount.

And that's our view, and we're not going to engage in any intervention or whatnot.

In other words, more or less split the dog and try to force others to let us go.

Now, they don't like me.

I don't think they like that, so...

I don't know.

I'm not sure of that.

But after I... You would leave that with us, but not now.

I have my inclinations.

I think the...

The principal argument for it is that when you set another set of parities, then there is an implicit suggestion that you're going to defend those recently.

And our trade picture won't improve dramatically.

And we could come up against another crisis if people get in the habit of pushing us over.

So that just as the British had these successes and evaluations and were not too successful, they now have a flow which they regard as much more successful because the flow basically insulates you against this kind of speculative rate.

The rate just moves rather than there being an accumulation of dollars going in here or going out there.

So that is an advantage to the floating system.

I would have to say the basic plan that we put forward envisaged discrete exchange rate changes in a situation like ours where a country like us, so that the flow would not be fully consistent with our plan, even though we envisaged other countries possibly doing this.

The problem, too, was the creation of that.

It doesn't make great difference.

The way that it has to be presented, George, you understand, on this 6.5% and so forth.

You remember we got by with the August 15 thing by pointing out this doesn't affect the value of your dollars.

So the average person is now a damn amount.

The way it has to be presented is that the dollar at the present time, that we are doing this because American goods are at a disadvantage and an unfair advantage in the world market.

And that's due to the fact that the dollar is overvalued as against other currencies.

And so we're trying to, we're making this change in order to get again American goods and have a position.

You know, if you go back and read virtually the August 15th rhetoric, it was interesting.

The trade package should be one that should be in its rhetoric until the very heart of the protection.

And what we do, of course, until what we do, however, be as expansive as possible.

Because basically, I do not believe in a totally protective or moving.

And neither do you.

believe in protection for certain purposes, and the Congress doesn't, but if we have to move, if we can move other nations to trade, why, you know, we should move in that direction.

If they don't want it, they're going to protect both, and we've got to do something.

Well, that was, that's the way you managed that tone in your speech at the IMS, and that was followed in the plan, but I think we should, of course, lay that out heavier than this.

Another ingredient in any such statement would be a re-emphasis of the importance of curbing inflation and what we're doing about it.

Because this is perhaps the major weapon that we have for re-establishing our position in international trade.

We have price stability whereas other countries are inflating.

But we have price stability energy.

By then, it's the value of the capital, or the dollar of that.

Well, you know, we haven't had it long enough, and the difference between us and the other countries has not been so great.

So you accent the importance.

We use this opportunity, and maybe, maybe you can, maybe we can, at that time, want to announce something on the price front.

In any case, a...

a re-emphasis of your determination to curb inflation as a way of...

There is one small thing that we could announce that would not mean too much, but it's something that Congress has thought about a lot in England, a requirement that large firms and unions give 30 days notice before they change a wage or price.

That hasn't changed the structure of the system at all, except that it proposes an additional recording environment.

And that at least has the sound of a little tougher to deal with.

Have you been asked about that?

No, I didn't get one of the testimonies.

What would you say if you were asked a testimony?

This may come my way tomorrow.

I think that it is something that we can do within the framework of the law.

We would prefer to have it left as an open possibility.

We may do it or we may not.

If Congress wants to suggest that they'd like that idea, we'd be very interested in that.

We would be, once you put it this way, we'd be very interested to introduce the Congress on this.

I'll tell you something.

That we are, as far as the United Nations is concerned,

that is one of the many devices we have under consideration that we're all supposed to be interested in.

They all talk about wanting responsibility, but in the same way, maybe they think it's a good idea or not a good idea.

I think the thing we would want to avoid, though, is having them put it in the law as something not

Must the reporting just be for prices, I think?

Well, that's one of the things.

It leads to a gigantic paperwork burden, Chief.

And we are trying to wean the business community away from an attitude of over-dependence and reliance on government all the time.

But it is a certain extent of the price.

The paperwork on the price side, the wage side, you don't watch it on the price side.

We talked about it.

We thought about it.

I think you and I talked about it a little bit.

And so it was considered.

We felt we didn't want to do it.

But it isn't a big thing.

We could put something like that into speech.

The trouble with putting it in a speech like this is that it isn't a piece on a scale of these other pieces.

You understand what some of the

You could be criticized on the ground, but part of this plan is a repetition of what we did before.

Sure.

And therefore, your old policy didn't work, Vice President.

I think that's why you need this trade piece as part of the package.

A trade?

Yeah, that has to be a great emphasis.

That's the new part.

You mean the...

the trade aspect in terms of being able to stop the young horse.

Well, sure, the authority to the Protestant negotiate both ways, either to liberalize or to stiffen.

Whereas the other time, all we did was oppose the search-up.

That's right.

Which we then took off, and we were able to negotiate and maintain those change rates.

And in retrospect, in retrospect, we took it off a little too fast.

What?

But we couldn't have gotten the agreement without it.

What about an international?

Is the time ever going to come?

Three years, eleven months we have left here to have an international monetary arrangement.

the thing along in the sense that we are yes we are moving in this plan we are moving in parallel with what we proposed and to the extent that we are able to improve our balance of payments and trade and trade position

We're clearing up one of the greatest problems in the monetary system, namely the big overhang of the U.S. problem.

It has to get solved before you can put any machinery into place as sort of a stableman's proposition.

Mr. President, let me plant a thought in your mind.

I don't know how these conversations are going to go on trade.

I'm very much discouraged.

on monetary reform well proceeding at a snail's pace no no sense of urgency uh this crisis may give us a strong lever and we may move forward as a result but we can't be sure the way my thinking has been running is that

You know, you send the hebrides of this world, and then we hebride an individual, and then having that function, and they get together, and they wrestle, and they debate, and they just irritate one another and get nowhere.

I'm afraid that's the mood.

My own thinking has been running in this direction more and more, and that's trade, monetary reform, and defense.

international security will all have to be handled together and will have to be done at the summit level.

But to handle it at that level, we've got to be more fully prepared, I would say, than we are at the moment, because if you go into a summit conference,

You will want to be very sure as to precisely the point where you want to come out and then know the margin for it could be negotiated out.

But we want to try and work these things out.

You see, they're related.

But I would not be surprised if, in the end, it would have to be done that way.

And I just mention this as something you might want to keep in the back of your mind in the months ahead.

Or do you mean just the big six?

Japan, Italy, France, Germany, England, and the U.S.?

And maybe not even the big six.

Maybe the big four or five.

The rest will fall into place.

Japan, England, France, Germany, U.S.

Right.

That's it.

Well, you take the Smithsonian Conference.

It's a very good indication.

You're meeting with Pompidou, you know,

That really settled the thing.

Sure, a lot of things to work out after that, but they all fell into place.

Without that, we'd be lost.

The finance ministers would have met and continued meeting.

They would have gotten nowhere.

And I think our strongest card is that we don't have strong cards on trade, considering the way the world is organized.

for themselves.

Well, for themselves.

I think that's a better way of putting it.

And on the monetary side, our strong card is defense.

We are protecting the world, and they know it.

It's a hard card for you to play, and I know that, but this is something that you and you alone can best evaluate at the right time.

I would say, if you go forward, you're six and a half, six and a half business.

That's obvious, right?

You reached that decision too?

Yes, I've come that far today.

I've come that far.

I've served by nature in every market path that I have.

All right.

Well, that thing is responsible.

So we go six and a half, six and a half.

With the Japanese, use the stick-in-the-closet for the effect that I have decided to ask for legislation that will provide the imposition of a surcharge.

And also, the folks out there that you were talking about, if the market is flooded, the safeguard system, we've got to put that in there, too.

Yes.

Might as well stick it all in.

And then, beyond that, in terms of, you know, we'll do some consulting, is that right now, with congressional people, or have you done a lot of it already?

Well, you can't consult on this evaluation itself on the trade.

On the trade, that's what I meant, the trade.

On the devaluation, you've got a ticker on it right now.

On the trade, we... How are you going to handle the devaluation?

And we have a draft letter suggested for you to show to Tanaka.

That emphasizes your concern about this and dispatches whether or not to somebody else because one person can't go.

All of this over the next three or four days, right?

Could go immediately in the next three or four days, or we could lose leadership capacity when we wait.

Particularly if the crisis itself passes, then we have a little bit more running room.

Well, all right.

Let me say that on that decision, you follow through with this, Captain.

I think the objection would be better than mine.

There are no political problems involved.

It wasn't like it was, you know, we had the French story about the British story.

We don't give a damn about any of the Japanese sensitivities at all.

Let's go right ahead.

Well, I think the process of going around this way will make this much different from the other 16.

Why don't you be ready for the, why don't you be ready if you have to,

coming in from Japan on the 19th, Monday.

Well, somebody better get busy on that.

Well, or we may be able to move this in time.

I take it you would prefer to not to do it quite so fast, unless it is .

Well, I would prefer not to do it.

I would prefer not to go all out on the trade.

should be done.

But in terms of going out on a sort of a reckless basis next week and saying there's a brand new trade thing because of the crisis, I don't like the feel of that.

I'd prefer to do that in a more deliberate way.

But if it's necessary to do it next week in order to accomplish the monitoring, we'll do it next week.

That's what we have in mind.

We think there's a big advantage both to

the monetary move and to getting the trade business going right, putting them together in a package.

We need to do some consulting on the trade business.

George Meany called this morning and invited me down for this weekend as soon as I could come.

And I talked about Bill and he said, let that Bill come down.

What about their board?

Well, I'm not checking that.

I haven't got those dates yet.

George, why can't we carry on some conversations this week with the key congressman on the trade issue?

We can.

Trade issue?

We're in a position now.

We've got a reasonable agreement.

I think I'm seeing Merz tomorrow, possibly.

Is that what you recommend?

Or you did not know about them?

You mean bills?

Sorry.

I didn't know about that, but... We'll remember.

We'll remember.

Well, that's fine.

Yeah, I just want to be sure that we're ready to see them.

Did you suggest that we do it harder?

I had a suggestion.

I didn't, but I think it's a good idea.

I would like for us to be present if you're going to see them.

We have these tax problems that you'll want to talk about, and we haven't had a chance to get your thinking on that.

Probably fine.

When is the bill being expressed?

They're trying to set it up to set it up.

It'll be tomorrow afternoon sometime.

We'll test it because it'll be tested by the end of the morning.

And I understand that we're scheduled to talk about tax issues at the end of the day.

Yes, the three.

I don't think we have any answer to that.

That would be good.

I'd like to argue that we can't hold on to this independently.

I'll get this set up right away.

The meeting tomorrow on the tax thing is what time?

3 o'clock?

I'm sorry, I was thinking 3 o'clock.

3 o'clock, yes, sir.

And the mill is meeting at 10 of the week 4.

Yes, sir.

When I'm like George there...

Mr. President, do you see him with some frequency?

Will he be seen for five minutes or an hour?

He doesn't go on for too long.

I mean, he's very quick.

I mean, he will figure that out.

But I prefer to see him more often, not too often.

We won't figure it out.

Let me suggest, just so that we're not too rushed, because I've got to be out at 5 o'clock.

Let me suggest that we move to, if George can get out of his committee, that's why we're going to make it 2.30.

We've got lunch at 8 o'clock.

Well, provided we haven't done that.

I'm swearing in.

I thought it was schedule 3.

Well, we can meet at 2.30 and then have a swearing-in and first break for that, see?

That's in five minutes.

But we start the meeting with George and John at 2.30, figuring that we'll try to know how to do a mob swearing-in at 3.00.

And let's try to hit the middle so we can at 3.30, see?

3.30, which will give us a good hour and 15 minutes if necessary.

So what will happen if we get in the middle of something, we'll let him off.

Yes, sir.

Did you do that deliberately, or dieting, or just exercising, or both?

Neither.

Just eating a little less.

Terrible way.

Terrible way to live with it.

I have one, the other thing, if I could just take a minute.

Sure.

No problem.

Goodbye.

We'll see.

You're not coming tonight?

You were supposed to go Sunday.

No, I already was.

I paid for dinner.

You were paid dinner.

Right.

fairly high probability they will tomorrow night it's not for sure but it's reasonable that they will they are dickering around

and the union and the trustees both trying to rope the federal government into their problems.

And they're looking for a $600, $800 million subsidy or buy the railroad or something of that kind.

Now, one of their big problems, of course, is that a lot of money cannot be tracked.

We, I think, people who've been working on this thing,

It would be a healthy thing if we asked the board to then make a rhythm, not a quibble, that they would look in vain for any $600, $800 million from us, that we're just not going to support that.

But that we will support it very, very well.

There's pressure on the ICC in a method where there's perhaps some legislation that

The main traffic is actually quite a profitable line.

They can sell that to the railroad operations themselves.

from the $600 to $800 million, because it's solid.

It's just worn out.

The rattle is just down in the rattle hole.

But it's the union that's better at thinking about maybe the federal federal bailouts have tomorrow.

They're going to be here.

And so we have to say, no, we won't trust these two things.

Maybe we won't bail them.

That's their problem.

What will happen?

We don't bail them.

They go bust with the captain.

What happens?

We run under their bankruptcy.

What is most likely to happen, I think, is that the judge under which they are operating will say that this continued operation at a loss is not a proper way to handle this property in order that the property be sold.

Again, we have an issue with the ICC, but at least it might very well be that the property could be divided into segments and a good track, handle as a segment, other railroads would bid for it and be sold and would just be operated.

That is one possibility.

There is a problem with it.

If they have the strike, the strike was on for some time, they will be so...

resources that they'll have a hard time getting the railroad going again.

So a strike is a bad thing from the standpoint of the interruption of service.

It's also a bad thing from the standpoint of selling the line, because they've lost a lot of their customers.

We are asked what is, and if there is a strike, it will cause, no doubt, a considerable amount

The problem is, would it in any sense be an actual emergency that aren't being mined and so forth?

And the country would not suffer that way, suffer too badly, at least for a period of two, three weeks or so.

But the railroad might be, must kill her again if I don't account for it.

Well, you told that.

Sure.

We'll do everything we can to it.

get rid of the best that they should have done.

The ICC word at the end should have done long ago.

It certainly should have done long ago.

And particularly, again, the legislation you proposed and the regulations that have gone through and the best and so on and things that would happen.

With regard to the mills thing, we've got to be ready with the position that, well, when you and John and I meet, we will have to know what we're going to talk to the mills on the trade thing.

I think there we can...

We're in a good position, I'm familiar enough with it, and I'll let you sort of take this and chat a little about that.

He may want to bring up the health legislation, which, you know, he did in his committee, so that's why John was there to keep that up.

I heard John at the moment, but he's ready for it.

But do you think taxes is what he's most likely going to discuss?

He's having hearings now on taxes.

He's been taught it a lot.

that he's holding hearings and he's going to do anything he needs to say, he is.

We have, we don't want to give him any, we want to give him our tax plan after we, whatever would help him.

At some point, we have to start talking about what we're willing to do.

And I'm trying to tell you, there isn't something, and if you have, if you have John that has his mind,

But in our meeting, we would sort of get our ducks in a row if we were to talk about this.

I'd talk to John some about it, and I can't say that we've reached any major meeting of the mind.

So it was a very tough issue just to kick it around a bit.

And we'll want to get long into this.

He's very anxious to see you, and he's important too.

At some stage, I've talked to him,

Or you made any decisions why he wouldn't get a chance at you or at them.

And we might have to catch everything before we catch him on Thursday.

I'll try to see if they can work any other ball in.

Okay.

You have to testify Thursday also?

No, sir.

Tomorrow is my last day this week.

I bet.

Good.

Thank you, Mr. President.