Nixon, Ehrlichman & Shultz on International Monetary Policy

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I got your notes, and I think positioned George properly on this meeting today.

We're having a first meeting right afterwards.

So I think he will stick to the story.

And then he understands the present trade line and also the home front regulation line.

I've got a couple of odds and ends, and I'd like to hit with you, if you've got just a minute.

The thing about the .

I didn't frankly read his statement when he came in.

But what I think you're going to have to watch on him, John, is that he is almost totally apolitical.

Yeah.

That's his statement.

I'm totally left out there.

I mean, just one sentence is of some effective value.

Well.

And the other one, instead of putting first, we're going to have outgoing cravings.

The first thing is that we were going

Right.

And he had a press conference last night, and he did give you those points.

And the thought here was, as a matter of fact, that this thing was to be performed consumption, and by agreement, he read this thing.

And he did make a number of political points last night, which played, and they were playing in the news this morning.

Good, good.

I had so great concern.

I see your point.

I did say that.

Good.

Kathy Douglas.

Mr. Justice Douglas' wife has applied for a job with the Department of Justice.

My instinctive reaction is to tell him to freeze her out.

I just wonder if you have any adjustment on that.

Why should she have a job?

She wants to be an assistant, you know, U.S. attorney, local.

She's passed the bar.

Well, for Christ's sakes, why should we have to appoint her?

We would have to hire her.

I know, of course.

Okay.

Hold on.

Is there anything that... We've got other people who get the jobs.

I mean, there's no reason for us to hire somebody.

We've just got too many applicants.

I know Roger Morton saw you privately the other day, and I don't know what it was about, except that it was about his health.

Is there anything I need to get into?

No, no, no.

The city's not doing operations.

I said, fine.

It's okay.

No problem.

APR.

There is a seat open in the second circuit.

from Connecticut, which would be a real plumb for Gray, if you want to get him closer to that direction.

I was thinking we should talk about that.

Right.

I'm ready to go whenever you're ready.

The Gray thing is, I think we've got it decided.

The real problem, John, is that we

Let me leave you, I can leave you some biographies of people that I think you might want to consider as successors.

Well, yeah, there's a parlay with Henry Peterson that you might want to consider maybe.

And I don't know how familiar I am with him, but we do want to keep him tied into the .

Make Peterson the FBI director.

He's a career civil servant.

Totally apolitical.

I wonder if kicking the radio stairs is

frankly, it doesn't really look as if we're afraid of the water taking that.

Well, I don't wonder if we just should just raise it right through.

Newsweek had a big, big box feature on it yesterday.

Yeah, I heard that.

What I'm getting at is that everything is a matter of appearances and stacks.

And you could swear on a stack of Bibles and they say, oh, no, no, no, that isn't the way it was.

You just don't, why do you put them in the first place?

You've got to make the judge and so forth.

I mean, just be advocating the other point of view.

Well, when the time comes, we can talk about these.

I've got five names, including Greg.

Yeah, well, he'll decide.

We'll decide it, too.

You can think about it a bit, but it's just certain I'm right now.

I'm getting done.

Jerry Wilson, the police chief.

We're going to have to ask him over here, ask him to stay on in order to keep him.

You asked me to call your attention this month that you had asked Rockefeller to make a trip to Japan and Europe.

No, it just came up in my diary.

he'd like to do things but i don't i'd just like to drag you along that because the president spent the weekend with them this last weekend i probably won't take that long if you don't want to

He said now they're going to, Lasker's going to appeal it, but it can be solved by legislation.

And, uh, the, uh, leader changed, but we got a good chance.

Well, you've been doing pretty good about your, uh, your dirty teeth, George.

You, what did you buy yourself?

What's this, today?

That's today.

That's up to you on the point.

All right.

Thank you.

And then, Masterson.

There it is.

Not a change.

We went up the last two days.

But tell me, how do you feel about the current situation?

It's a wonder we have the next crisis.

That's the plan.

Well, as long as we don't have a reconstructed system, and as long as there are fixed rates that people try to defend in certain places, there's a certain crisis.

And it tends to get your paper.

We're going to shoot it here in the flesh today.

And it tends to move our chair a little bit.

We want to get this shot here.

And it tends to sit around the dollar, because the world is really on a dollar and a half measure.

And the dollar and a half measure is uncertainly what we have speculated.

You got your part of the building.

um

First, as I find out about the case, as far as the devaluation, this is something that's expected in the latest U.S. therapy, but I don't think it will.

As far as the dealings, it does not affect the value of the dollar.

What affects the value of the dollar is possible.

Thank you.

The other point is .

We are not talking about another round of lowering barriers.

That's only one hand of it.

But we're not talking about the other side as well.

In other words, we must go up and go down.

That's the only way to get a fair deal for America.

fair shake to the American products abroad.

This week, honestly, many negotiations abroad accomplished a lot of things in the last year, in which all we could do is negotiate down, whereas the other countries could negotiate up.

And we're going to have to focus on the right for our negotiators to be able to go up or down.

Only by being able to go up will we be able to get them down.

with some of the restrictions that we have.

I'm also late on this description.

You know, when we do point it out to some of our earlier discussions, it's a very, very pleasant to have a safe time.

But again, you're up in a flood of unrestricted markets.

It's not something someone would want to do.

They want to move into one of the U.S. markets.

The U.S. is the best market for it.

It's a foreign country.

So this is not something that's going to be...

in order to get a policy of free trade, we must always have in the background the possibility of protection.

In other words, you, I, all of us in the United States believe that the world is going to be better served in the U.S. economy, better served by lowering tariffs.

But it can't be we lower and they keep up.

So what we're simply suggesting here in order to get other nations

to get away from their discriminatory policies against us.

We have to be able to go to the part of the party that's going to pay legislation.

And I will speak to this.

But then I have to point out that we discussed all of this with both Chairman Walsh and Mel, and also the Secretary of Discussion with the Republican Committee, also with his library, and I discussed it with him, and he discussed it with others.

As far as .

That's what we were thinking about last week.

But we couldn't tell you .

And then we'll go on, Mr. President, as you instructed, to talk to people about the .

The devaluation of dollars in relation to other currencies is, at best, only a temporary solution to the problem.

That's why the trade is so important.

We have dealt with the

uh, results of the, of the imbalance with the devaluation.

But we have no illusions about the fact that in order to get a fundamental causes, we must have a free legislature.

Is that it?

Right.

And this just builds on the point that you made when you were speaking to the IMF, if you follow up with it in more detail, that the monetary system, the exchange rate system,

We can't carry the whole load that we see this as a link to what happens in the field of creation, what happens in the field of action, what happens in the field of aid, and so on.

All these things are part of that.

I have no picture, but I should have this one.

We haven't got it without us.

We're not supporting that.

We're heading that.

We're discussing this with the church.

I think people want to see us in a position where we are in a position to do something, not just sit around and ask other people to do something.

We take that to ourselves.

Thank you, thank you.

Don't take a strip of bronze, that's where it'll come from.

Sir, that's where it does come from.

You're keeping everybody aboard.

What do you think we can get?

Yes.

I think we want to take a look at that graph.

The draft is going to recast it.

Oh, I think you should recast it very briefly.

Just put in a paragraph on the trade thing.

I mean, that's very general in this one.

I have worked the draft over.

I've got the environment all over.

I've worked on that and sent it back for a couple of revisions.

And we'll get that, and I'll run that tomorrow.

Is that something?

Yes, sir.

I'd be ready to do this one.

If you'd like to load a couple, then I can do it here.

There's notes.

No, I mean, the natural resource has to write this week.

We'll do the other one first next week.

All right.

I'll be ready Sunday or whenever you're on.

Sure.

Why don't you look at that and get George's views in regard to the internationalists.

You've had your views before.

They're very general.

This is before.

I disagree.

But I didn't object.

It played right into what we wanted to do because it hit the Japanese and the rest of them.

They didn't know what we were thinking about the trade then.

You know, they had an option.

It was something to deal with.

We dragged it out and dragged it out.

Paul Logan is a very fine piece of work.

He has a great ability to sort of sustain his electrical energy over a long period of time.

And he behaved very effectively and responsibly.

He took the steps that we said he should take and the positions that he should take.

And then he came back and reported.

We had a good back and forth.

We discussed it generally, and on things like this, you know,

Where I always have the belief that in some areas I can add something to it.

Like, for example, you sent me a report on a conversation you had with Matt Montgomery about laws and so forth.

I sent a message yesterday.

It was very important that you have my view on it.

But in this case, you didn't.

You know what to do, in other words, in terms of you.

Just so you don't have, I should have, if it's a hell of a split with Arthur, I need to know, then I'll have to decide before you go.

Bring the two of you and Stein, the three of you together.

It's fine.

One of them is so technical, you see, it's really that.

Don't be concerned about having great power here.

I've kept Arthur, Bill Rogers, William Stein, all of course, involved.

And I kept meeting with them and reporting to them.

And then they went over our statement and meddled with us with it and so on.

And then when we had the press briefing last night, they all came.

They were all there.

So everybody could see them.

And then I described the process here as one in which we had the president calling the shots.

We had our negotiator out talking with people.

And we had this policy group that would be in the system.

And then we'd invite some youth.

And that was a process, a decision process that we had.

And I noticed the president picked that up.

Well, this little dialogue this morning, I was trying something entirely, and we never had a situation where we just sit and talk.

Right, right.

I think it's very good.

The dog had only showed up.

But, uh, see if Secretary Rogers saw him, it's no command, but if he could come over and be here by 1135 for that meeting with Scallop, because he was meeting with Scallop.

All right, sir.

I'm also in trouble.

The Secretary pulled this a little while ago.

He wanted to discuss the matter from Cuba with you.

Oh, the need of a hijacker?

Yes, sir.

The situation may not be fully prepared at this point.

Well, then let it go until we get it.

All right.

All right, sir.

All right.

OK. Then he better not come now.

They aren't prepared.

They're not ready to talk to me.

They haven't got it.

We're working together to see right now.

OK.

if they get it ready but it probably won't be ready for that well be interesting to see how this how this colloquy thing carries i suspect it'll carry very strictly well it's big news today and the uh evening news has not had a crack at it yet so they'll have to pick it up tonight

You know, Winfrey, speaking of that, made him one of the most, and I know he's granted it, but he got, you know, he always overstates things, which, of course, is what delights us all.

But when he put in something, the effect that, the reason we stopped him on him was that we had a shirt rejectable like that.

Ran out of hats.

Really?

You think that?

I couldn't believe the effect.

I don't know what to say.

It's all right.

I don't know.

I got a call.

One of you got a picture of him in Arizona.

You can't help.

Well, I would appreciate your advice on that and some other things.

Go ahead.

But anyway, Renfray, after a lengthy discussion, said that he's going on the CBS story.

So I suppose he can call me.

That's maybe fine.

I see.

He likes it and thinks it's a good package.

And he says what he likes about it is that it shows that the U.S. is determined to take some action itself.

And he likes that.

And I was, we have this treasury consultants group of economists that's been around forever and maybe from time to time.

So they were meeting this morning and I went up.

And two different people, both surprising to me, made the same point.

And coming from economists, you know, who also think that everything happens by the invisible hand.

The idea of saying, well, it's refreshing to have the U.S. step out and do something.

It was an interesting comment.

I think this trade business is going to go very big.

I like it very much.

Particularly if we can play with the double-edged sword.

To the foreigners, we say, look, we want to have barriers down.

To our own people, we say, we're going to protect in order to get a fair shake.

Well, that's fine.

That's the way to get it.

That's the way to be able to reduce this.

Extremely important key is going to be the labor movement.

And if they will come around and support our approach without trying to force it to be overdone, how long for a party bill?

Yeah.

That'll be strategic.

That's why the talk in the meeting would be helpful.

So I have a...

I mentioned it.

I talked to customers about it.

He's all for it.

Well, I have kind of a schedule.

On the one hand, there are a lot of requests for follow-ups on this, including Face the Nation, the Sunday, and things like that, which are important to do.

And second, Meany has been asking me to come to Florida, and I sort of have a hat on.

Florida?

What's the answer to that?

He's very excited about that.

And that is something I haven't wanted to do at all.

Why don't you call Fitz?

He'll be back with me on the plane next day.

We really buttered him up all we could.

And I think, John, you could give him a call.

Well, I did yesterday.

I laid the foundation in your office while you were talking to somebody else.

And I said, we need this man.

He's working on international monetary stuff.

The only problem is he'll be down in the city of Florida.

That's the problem.

What I'm saying is, you know, go down to Florida in the afternoon, come back tomorrow afternoon.

That's too hard to say.

I don't know.

What I'm going to tell Fitz, though, is this.

The president has agreed with Fitz on this, see?

And that's true.

I agree with you on it.

And so, therefore, the president has asked George Shultz to go down and read me on it.

See, Mike?

Thank you.

As you understand, that's the, you'll know that the President said he would read first.

I think we can, we'll cover things pretty easy for you.

But let John call.

He was in that room when I told him to.

And he would have to be worried, too, I believe.

What do you think about all these things like destination and so on?

Should we pour it out on them?

Yeah.

Make an asset out of the fact that we're going to fight for U.S.,

products that we're going to do and that our economy is good and we're going to move forward and we're all in phase two and phase three.

Do you think so?

I think that that type of program is a very good one for you.

It's a good subject for us right now.

It's a good thing.

leadership leadership now the idea i would emphasize is strong leadership it's like obviously the united states is to be traveled with uh the international and i put in this like these i like the name go back to the august that's what this a lot of this is we are not going to allow the american dollar to be hostage to international speculators

I think there are a lot of multinational corporations held back because they didn't want to be.

Just be a little bit, shall we say, jingoistic.

It's not right for the jobs that you talk to the labor leaders about.

On the other hand, you can say what you want.

very willing just to build a great wall around the United States because we're selling our farm products for the billions of dollars a month.

We want to continue this so that our agriculture can be.

Well, I'll tell Fitz that you specifically wanted me to go and face the nation suddenly, so I just have to be here this weekend.

Yep.

Well, you can tell him.

As I said, you can tell him to...

I'm just thinking of the fact that I didn't read him.

Why don't you just say that John, that's .

The President told me that he reads you on the trade legislation.

And therefore, he, that I, that he feels that I should, of course, .

And you're going to read him to get the same reading the President can do that's on this trade legislation .

Fair enough.

And that you've got to be here to face the nation to, to, uh, to, uh, on Sunday.

But you can't do that.

Sometimes you've got to play golf, Mr. President.

He's just a nut on Sunday.

He gave us butter yesterday.

Well, you shoved on that six-iron shot, I remember, on your own golf course.

A few shots, I think.

Sure, I'll be there.

I thought he'd be going out to Alaska for a year.

Come right on the plane and everything.

Except no one from the phone calls or his son on his birthday from the airplane.

They blew him.

Miller.

That's Miller, yeah.

He's in April, so.

He is a hit.

Yeah, I think that's rather long.

The base is a very good one.

There are a lot of able people in that unit.

It's very interesting.

Well, they were both wagging their tails when we got off.

They were great.

They were good out there.

They made the interesting points, which I really want you to follow up with.

They want us to do a statement that they did.

Oh, sure.

These guys want to be there.

As a matter of fact, we'll do that on a periodic basis.

The other thing that you mentioned, you mentioned the able, which is one of these things in Georgia, on a point of insurance.

One thing he did raise is the question of the adequacy of management representation.

on the labor management committee.

He said, look, he said, you have all the power here at labor.

He said, that's great.

So I mentioned the fact that we might ask, if we were considering expanding the task at the beginning of the job.

But frankly, he said, the management committee is able to do it for the people, but most of them have power.

And he said, don't put somebody on this committee who has brains but not power.

He said, I'm responsible.

Well, we're all being our events and voices.

He said, Roach has had it.

He said, he's retired.

He said, we need a guy from the auto industry who's a shaker, a mover like Woodcock.

He wants a chief executive officer who's a chief executive officer now.

He wants a chief executive officer from Steele.

Well, they had one from Steele.

He's Larry.

Larry is the one guy in there who knows labor elections.

But he is now a chief executive officer.

No, sir.

I didn't know it was...

Mostly he just sat there and said, you know, Mr. POW is coming home.

That's the greatest thing.

He said, I'm so moved by that.

That's our greatest day, says Mr. President.

And then he really laid it on the president.

And I'll tell you, I had a peculiar day yesterday because I've been off working so hard on this monetary business.

I haven't watched the television for days.

I'm sort of not paying attention.

I went home full of the monetary business, and my wife was waiting for me.

And she said, have you seen the television today?

I said, no.

She wouldn't pay any attention to the monetary business at all.

She said, I sat, and I watched, and I watched, and she said the tears were streaming down my face.

And she said, the most emotional moving thing I've seen on television for a long while.

Many people.

There will be, of course, you know, some bad apples in that vaccine.

You see that sign the guy was holding out on the bus window?

It says God Bless America and Nixon.

It was a star.

That's the indelible impression that's going to come out of this.

Well, I have this business council group Wednesday night, and they're a good group to hit on this.

Yep.

They will crack them up, so I'll get back to them.

Where are they?

Here in Washington, Wednesday night at 3, I guess.

Do you speak, or I'm their dinner speaker, Wednesday night at 4 o'clock?

So I'll give them a dose on phase three, and then I'll talk about this a little bit.

And they are anxious.

Dave Packard wants to have them work hard to promote exports.

Well, that's it.

And I thought I'd get a hold of Dave, who's going to speak the next day, and say, why don't you take that as your topic and get some operational things, particular things that they could do

Well, they don't understand exports.

The average American businessman doesn't understand how to do it.

One thing I was going to ask you, George,

I noticed this, I mentioned this to you the other day when we met, but I was reading some summaries over the weekend, and I noticed that the usual clack of our economic critics started to sway like a bug.

This is before the steel market.

They said the rosy prospects of the first year are now moving to a world of good kind.

uh is that the deal with most economists i don't know why you don't want us to kid ourselves but remember you went through the rigmarole where you said well the way you could write out the scenario there's going to be a credit crunch

And so forth and so on.

But on the other hand, as I look at the various things that are happening, the retail sales and so forth and so on, I don't see this either.

They say there's an enormous lack of confidence using our infrastructure.

And again, developing an economy.

I wonder if that lack of confidence is going to insult us this time.

You know, I hope our growth is going to bring a really negative sort of peace or something like that.

Well, yeah, I see.

Carter has all these discussions.

He is...

sort of reflect at this point of view a little bit, which I assume we're growing.

Well, just that there's uncertainty in the international financial system.

Most international corporations get unnerved by these crises.

And most of the corporations are very important in the United States.

So when your top executives start getting jittery, that has an impact.

Well, I bet there's something to that.

And I think that's why it was good to take a look at this thing itself and some of it.

Let me say one thing.

I'm going to get scalded on the Q&A this morning.

I told John.

that the way you handled this has been very reassuring.

I mean, you did it without, you know, coming in and saying, it's a hell of a crisis.

I mean, this is not the other thing.

We did it without a fanfare.

It's good.

In these particular areas, I really believe that it's too hard.

Once we've acted this way, let's do it.

Let's act precisely.

But I think there's a tendency in this area for people...

crisis because it's their way to be paid attention to.

I know this is the word Henry that is, he doesn't have some big thing like Vietnam or China.

But he comes in and says, Jesus, look what the Ecuadorians are doing to our fisheries.

It's a hell of a crisis.

He doesn't mean that he's looking, but it's a very human trait.

It's true of everybody in this country.

Somebody's going to say, Christ, I think it's crisis.

It's the fact that we didn't

clean up the rocks to Pismo Beach, and the hell of a land, and the birds are dying, and all that.

I just can't imagine what nobody gives a damn about the people of Pismo Beach.

But that all is, he's got to think that's terribly important.

Now, I realize International Monetary is a big deal, and the rest, but so is the big crisis.

How do you handle it?

The way to handle it is like, cool, have a game, fine.

Convince everybody, and then act.

And that's the way to do it, George.

And Yusuf, I want you to know we've got confidence here.

And you just go out there and assure them.

But it's the way to do business in this area.

Now, there's some areas where we have to be in confrontation on the budget.

The rest, if we don't confront the Congress and create the idea that this is a crisis, we lose the battle because they're out yelling at the strength and the rest.

But here, you're going out and saying, oh, God, everything's going to hell and coming in here and we can go to the stairs and this and that.

Everything won't change anything.

This is going to help us win.

Do you agree, John?

Yes, sir.

We've been through a lot.

I've been through a lot of things.

The way they get these, and John Collins, and the Pope, and the great people, all these people.

They all, each in its own way, get the...

I think perhaps, perhaps because they get it from everywhere else.

And this is a very strange field to live in.

So they're running a terribly exciting thing.

God, this is the end of the world.

In your case, you've seen all this stuff.

You've read about it.

You know that this is the end of the world.

You know that well.

We just ought to stand firm.

The fact that you're closed is open.

That's all there is in the world.

Because there can be crises, and people can be alienated, and so on and so forth.

We've got that window closed and they have to get a convertible.

Yeah.

We're, you know, you realize where we've been, George, is we've given up convertibility, you know, in our system.

We've never given an inch yet.

No, we've said that when the system is working right and it's in balance and so forth, then we can have convertibility.

The thing about it is that when people feel you need convertibility the most, it won't work.

And when you don't need it, it'll work.

And I suppose what it amounts to is that it is a kind of symbol of the fact that there's a general agreement that the system is working on.

He's already speaking out pretty well.

Good thing Henry isn't talking about the meeting.

He had to go right up the wall.

Right up the wall.

My better man needs to be scared, this is my hair.

She's a pretty real belligerent, no-compromise fan.

Damn, isn't that something?

I mean, her and Mrs. Ganga, yeah, that's quite a combination.

No, she's an architect of the United States, isn't she?

Yeah.

We have nothing to go off as an architect.

Architects are good.

What is their position?

No one's wrong.

Nothing.

Absolutely nothing.

It can't be that.

It can't be that position.

to say that he's not going to be one bad thing uh where are they running around in the world israel gets the weather no i don't know if you saw the bike tell you diane but then there were a bunch of american donors in israel somebody asked diane if he wasn't afraid that the oil shortage in the united states wasn't going to require a shift in american

policy in the Middle East.

He said, I can't believe America would be so short-sighted.

It would be finesse.

But it hit him right where he lived.

Yeah.

How do nations evolve in support of the United Nations?

Well, I don't know.

I don't know.

Well, I will.

Nixon, Ehrlichman & Shultz on International Monetary Policy

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Also recorded on February 13, 1973

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