Conversation 909-003

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How are you?

We don't have to have any guns, right?

Mr. President, we have the Economic Stabilization Act that you signed.

Yes, sir.

And we, uh, that's that, that there would be an assignment statement, subsequently, and people are- Right.

You'll be very- You know that what should be done, and we've had everyone else follow the discussion that we had last week on this subject, so- I read what was, uh, heard when we were in, so I had some idea what you all had been doing.

I think in the

We're in the process of discussion here.

A reasonable way to go about it might be for her to give us a little quick summary of where the economy is as we see it and what the output will be.

John, I can describe it to you.

Your wife is here.

We don't speak first.

I will.

That's all right.

He always brings a sense of younger.

Anyway.

Well, we're having very, we're having very strong inflation.

And I believe that most people believe that we are past the most rapid period of the boom, that the GNP is not going to go on rising.

As rapidly as the first quarter, the prices will not rise.

As rapidly as February, March, and April, the prices will not rise.

Thank you.

I think that's what everybody in the city is thinking about for the last couple of months, with a big rise in the general price index, generated by a bigger rate of increase of wages.

And the third aspect of our belief that the interest rate will go down is that the general buoyancy of the economy will abate them.

On the food side, I'm thinking in spite of the continued bad weather,

While our votes are not as strong as they were earlier, earlier we thought they were going to have a fairly substantial decline in farm prices, and we might have some period where retail food prices would not be rising at all at the same time.

We will see this temporarily in April.

Some preliminary evidence from the Department of Agriculture that food prices have retailed in April, so it's much less than in March.

We just haven't figured it out.

The prices received by farmers declined in April.

And wholesale prices of farm products will probably be up on very little.

What are those figures coming up here?

Well, wholesale, the prices of our farms have already gone up to about $2.

The wholesale price index will be up on Thursday, Friday, or Thursday.

So we think

The people who understand farming say, what's these fields going to have?

This is the equipment they have.

That's remarkable what the farmers do.

Mr. President, your wife is here.

We all speak first.

I will.

That's all right.

He always brings a sense of younger, Mr. Vice President.

So, anyway.

Well, we're having a very, we're having a very strong, very rapid inflation.

Most people believe us here.

Past the most rapid period of this movement, the GNP is not going to go on rising.

As rapidly as February, March, and the pre-office will not rise.

Continuing to rise as rapidly as the first quarter, then we will get the tail off.

is, uh,

I think that's what everybody in the city is thinking about for the last couple of months, with a rise in the general price index, generated by a bigger rate of increase of wages.

And the third aspect of our belief that the interest rate will go down is that the general buoyancy of the economy will abate them.

On the food side, I'm thinking in spite of the continued bad weather,

While our votes are not as strong as they were earlier, earlier we thought we were going to have a fairly substantial decline in farm prices, and we might have some period where retail food prices would not be rising at all in the second half of this year.

We will see this temporarily in April.

Some preliminary evidence from the Department of Agriculture, the food prices that retail in April was much less than in March.

We just haven't figured it out.

The prices received by farmers declined in April.

And wholesale prices of farm products will probably be up on very little.

How do those figures come up here?

Well, wholesale, the prices we see for our farm have already gone up to about a day or two ago.

The wholesale price index will be up on Thursday or Friday or Thursday.

So we think

The people who understand the environment say that once these fields dry out, the equipment they have, they can track it and find it.

It's remarkable what the farmers do.

They're always going to get out in the first round of the clock and they just start chipping out.

Council the other day suggested that at May 15th at that point we could tell whether they were really not going to be able to get rid of corn crops.

The other aspects of the crop have been improved by the but instead of May 15th as a critical day for reassessing the agricultural prospect of the field.

Um, we'll have to wait and see how much the challenge is going to bear for us.

In any case, we interpret the recent government settlement as being encouraging for the future wage increases that we're not going to get another upsurge.

Um, this settlement was made directly from the background of the victory of the CPI increase.

And, uh, as far as the general economy is concerned,

The discussion so far is evident on the fiscal restraint side and the operation that ours are showing on the monetary side.

You know, the economy as a whole can run away.

But anyway, that is the way it looks.

There's a lot of anxiety about all these things.

And, you know, it seems to me that we have a recovery, the discussions,

I make certain decisions that we're not going to change the control program radically, but we'll try to monitor it.

That we will not have tight fiscal monetary conditions.

I'm trying to hold to the lines that we've set, but I'm not going to tighten down that.

And this kind of derives from the proposition that I've made, and he made, probably the major concern is that

I'm sure about it, and also why it predicts something when the very fact it predicted it may, when it comes, make it look a lot worse than it really was.

Well, I think that's our basic report.

There's sort of a roundup of what we have.

This is sort of what we have tentatively agreed on.

This is where we want to go with it.

by reading it in a paper or through the informal contracts between our staff and companies within their day-to-day contract.

This way, we will know 30 days in advance of their intentions to raise prices.

We can call them in in a systematic way.

We can ask them to cost justify

proposal, we can call in other firms that would be affected by this and have discussions about that.

In essence, it's administrative.

I thought what you were referring to was the way the bargain meatpacking is.

Oh, I don't know that.

Oh, I see what you mean.

Well, I'm sorry, it was a short time.

What I meant is that one of the most difficult aspects of the meat situation, what the bargain is on meat,

And they, their contract expires on the 13th of April, and they produce about 25% of the meat in the country.

And I was very much worried that we'd have a strike, a bad industrial relations situation.

Fortunately, with Mr. Ossery, we've been able to work out not only this two weeks,

This will give us a basis to set a limit on the August 31st contract negotiations that apply to Armour, Swift, and all the rest of the meatpackers, and that's precisely why.

I've been threatened the idea of striking the biggest meatpacker, O'Brien, right now.

O'Brien.

But I think we have.

One of those situations where nobody really wanted it.

The union didn't want it, and the company didn't want it, and they were on a completely new course.

Why are they on that course?

Why are the engines being so restrained?

I was always concerned about this all year.

You know, I thought all these CPIs, I thought, my goodness.

has to do with relative wages, not so much even how much I get, but how much I get compared to the next home.

And that's very crucial in all bargaining.

Now it happens that as a result of the work of the Stabilization Program generally since 1971,

are less concerned about their relative position because it is an appropriate relationship on historical grounds.

I think that's a very strong element.

The second element is, I think, the very good industrial peace happens to.

In other words, we've had a period

He didn't put out any.

In fiscal 73, we estimate $5 billion higher than we had in January, $7 billion higher in fiscal 74.

So it brings the estimated deficit.

It's just not the assumption that the outlays remain unchanged.

We didn't put forward any view of the outlays.

We just decided to assume they are what they were.

It brings the $73 billion deficit down to about $20 billion.

and the 74 budget down to about $5.5 billion.

My own personal opinion is that our estimate on the increase in receipts is conservative.

We will probably have a slightly smaller estimate because Roy assured me that we're going to make that $250 billion.

Well, he didn't suit up his pants.

Well, but he will have to go the direction that I've been looking for.

I do regard fiscal 74 as a real problem because we have not gotten some key pieces of legislation on things like the Medicare payments and so on.

We do have sharply higher interest on the debt because interest rates have risen.

So there's a lot of pressure there, but we've got a very good atmosphere in Congress in the sense of the general feeling that the amount that you propose is plenty.

I can't help but feel, however, that the way this will play itself out is in terms of a tremendous amount of pressure on the defense budget.

That's sort of the residual claim.

All right.

What do you have to say, Roy?

Just turning in what has been said, I think, to the place before us, what we last discussed as well, with the optimal balance between what effective and evil have on racism, on psychology, on the cost of diversity, and what you don't want.

Thank you.

We've thought about it, and we've kicked it around, and we all realize it would be spectacular for, be a great headline for maybe a month, two or three weeks, but that may be a great consequence of that.

Right, Arthur?

I think that's what you came up with.

But it's good that we've thought about it.

At least let's understand we've all thought about it, and said it ends up now, not now.

You still think so much, Arthur.

Absolutely.

I think it's important for us to say, well, we considered this freeze and so on, and it's been rejected.

So that's that.

That's right.

We're not going to hold out on the idea that, well, will we consider this again?

Well, the moment after the freeze, it was thrown out, held out there.

All it does is it seems to me that's what it prices you.

We are in danger of having a runaway

Now that's very dangerous.

When you get a boom like that in capital and investment, it is virtually bound to be followed by some stagnation in capital and investment later on, which can and usually does bring on a recession.

We're doing a number of things to restrain the boom, but I think there's an additional proposal.

It's late now, but better late than never, or better now than later, and that is a proposal for a

three or two or zero, but that's not required.

Actually, the purpose is not to raise additional revenue.

The purpose is to stabilize the economy, and any additional revenue is entirely incidental.

Well, we talked about this in a meeting a couple of months ago, and I sent you a proposal on how this would go, and we're decision-making.

Yeah, that was it.

She felt this was not something that we should be pushing because of the tax increase implications.

I think there's also an additional point.

I've discussed this with Mills, and Arthur has also, I'm sure.

Well, this is where I've failed.

I've discussed many things with Wilbur, but not this one.

I'm sorry, Senator.

Well, at least in his, when I raised it and saw his views on this, he's quite against it.

He's against it because he is in favor, at least this is the way he's releasing it, he is basically in favor of having investment tax credits on the grounds that it is capital needs incentive.

And this is the one way in which the tax system

And if you open this issue up, what will happen is not a variable investment tax credit, but the elimination of it, because all the liberals on this committee are looking for some way to get out of it.

So it's a political proposition in this committee.

That is his judgment.

have ended their hearings on taxes.

And with some intermediaries, they're planning to take up trade next week.

In the middle of the week, they'll go to that until they finish, which they hope will be around the end of July, before the recess.

And then they'll return taxes.

And after Labor Day, that's their current schedule on this.

possibility in a press interview, and that led to a great speculation about, and he was totally misquoted in the press, but anyway, it led to a lot of speculation about a proposal for a tax increase, which we have knocked down, and said that what he was talking about was this possibility, which Arthur had testified yesterday, and Arthur had

What do you think about that?

I think except for the politics of it, I think I certainly agree it's a good thing to do.

The key here is the politics, not the economics.

The economics is perfect.

So, no.

Well, it will sell, or it will sell to the Western, you know.

I'm worried the direct building will sell.

I don't know.

I float it.

I think I've just read some of Margaret Fairman's about thinking about it.

She wants to say it's better to have this

I came to the more favorable view of that with respect to the present situation because

It seems to work more effectively on the city bank

with a year if we have the thing on the board now, but we have to wait until after the legislation to get us before the committee and so on.

We're not going to get anything on before the committee, Archer, before .

That is a problem.

Well, I think you could do this.

If Mills were in agreement with the proposal, which he is not, but if he were in agreement with it

you would ask your supporter that he announced his support and a date were set and the date on which it would become effective retroactively is the date of the announcement of your support then you could have some of the impact of it without having the law passed and people would not know that we have a right to walk on the main side of this way

not just in terms of what could we get this.

which suggests that

In other words, I think the problem with speculation about this thing isn't itself a part of the whole...

The other.

But

But May 15th had a critical day.

May 15th had a critical day for reassessing the agricultural prospectus.

For reassessing the agricultural prospectus here.

We'll have to wait.

is that in terms of the river settlement, the river settlement is encouraging for the future.

What it increases is that we're not going to get another upsurge on this side of the river.

We believe that with the success that so far is evident,

Thank you.

it seems to me that we have

will not have tight fiscal monetary conditions.

Well, it seems to me that we have, for example, a brief discussion.

I think we've been running around trying to try to hold to the lines that we've set, but not tight beyond that.

And this kind of derives from the proposition that I made, that he made.

He can't say what his tactics are about in these decisions.

I mean, it will stop the prosperity in the next 18 months or so.

And the price is moderate.

So I think, yeah, that we will not have a high fiscal monetary condition.

Of course, it's a choice that I'm looking to which advice to appear.

I'm not going to have to be prepared to change anything that's going to turn out different.

And this kind of proposal in the, with respect to the phase three program, which will be derived from the proposition that I made, that he may announce this as long as we can.

Probably the major concern is that we'll be announcing the statement today, and that will be elaborated further by the Council of the Council of the Council, the main point.

of the institutional pre-notification system for a certain kind of general course and price increases with a 30-day lag relative to which advice to appear.

And I'd like to add that we will inject a certain delay in terms of price rates in the process and things that we've been trying to do, but we've not given ourselves greater assurance in the price for the money.

And increases conform to the standard.

But we will have, we will, we have to write down and I have developed a thing that is a view from the track proposal in the, with respect to the, I suppose particularly in the business community.

But it has reprocessed.

That's a particular step in the track.

It will be announced that

sure sure well the consulate has really stated the proposal uh

500 large pre-notification systems that do more than 200 or more certain categories of pricing.

$250 per business would be required with a 30-day flag selected to report to the Postal Living Council to inject certain values that they intended to raise their prices by more than 1.5% to the price rating process and

And I think that this will be recognized, I suppose particularly in the business community,

Sure, sure.

Well, as I first stated, the proposal that we've developed earlier in our discussions is to provide that all of the 500 largest firms that do more than $250 million worth of business would be required to report to the Postal Living Council that they intend to raise their prices by more than 1.5%.

And in addition to that, we have... And in addition to that, we have... We'll be announcing...

we can not only look at the general handle, but asking smaller firms to keep in their files and send sorts of reports so that we find that a given type of industry seems to us to have concern every couple days, but we're able to, in two days, also get the information on the smaller companies in that particular sector.

So that, again, is an administrative device.

On, if I might, we can not only look at these larger companies, but in two days, also get the information on the smaller companies in that particular sector.

So that, again, is an administrative device, in fact, tightly to hold and watch during critical months.

Again, on, if I might be permitted to comment on the website, permitted to comment on the website, that will be fine, that will be fine.

I. I think it's very.

August, the end of August, the conversation with Simmons seems to think that it would be feasible.

And I know the only other large one is the auto trucking conversation with this September.

So with Simmons seems to think that it would be feasible.

And I know the moderate luck in this picture and hard work, I think that the auto trucking

started here in September.

So with moderate luck in this picture, why that's been very hard work, I think that seems to be going reasonably well.

Once in a row we show a kind of very great deal of absorbance, this is triggered, this is triggered a lot.

But it did jump here, I think, in sex relations.

It started here, why that's been

It's done well, although I think it's very...

I at least don't wish to express it to you publicly while we're in the middle of... Sure.

Sure.

It's done well, although I think it's quite...

There's something with...

The very fact that we predicted it...

When it comes, make it look a lot worse.

I really don't wish to express it.

Would you tell me why we're in the middle of this?

The pathos is difficult, that's for sure.

That's true.

I'm sure about it.

And also, why did Dick something that the very man who predicted it made when it comes make it look a lot worse than it really was?

sure sure

reading it in a paper or through the informal contact between our staff, reading it in a paper or through the informal contact between our staff and companies within their day-to-day, things within their day-to-day contact.

This way, we will know, 30 days in advance of their intentions to weigh, we will know

We can call it in a systematic way.

We can ask them to cost justify the end of the proposal.

We can call it in a systematic way.

We can call other firms that would be asking them to cost justify the proposal.

We can call them to do this and have discussions about that.

We can call other firms that would be asking them to administrate it.

Oh, I see.

Well, I'm sorry.

What I meant is that one of the most difficult aspects of

Well, I've had a meat situation quite before.

I'm sorry, it was a short time.

What I meant is Iowa beef, and their contract expired on the 13th of April, and we've given them one of the most difficult aspects of the meat situation.

They produce about 25% of what we bargain as Iowa beef, the meat in the country, and I was very much worried that we'd have a strike.

And they, their contract expires in a bad industrial situation.

Fortunately, by the 13th of April, they've produced about 75% of the meat.

We've been able to work out how to eat beef in the company in this two-week extension or three weeks.

I was very much worried.

This will give us a basis.

We've been able to work out not only to set a limit on two weeks on the extension or three weeks up to now, August 31st now, but an additional one contract negotiation that applies now with a fact-finding arm of SWIFT and all the rest of the arrangement.

So that, as we now think,

in front of the threat, the idea that it's possible.

This will give us a basis of striking the biggest meatpacker of one right now.

This is to set a limit on the August 31st of the contract negotiations that apply.

But I think the switch and all the rest of the meatpackers is one of those situations where nobody really wanted it.

That's precisely it.

Why are they?

It's one of those situations where nobody...

on the right, sir.

Everybody's thinking about wages because it's deeply concerned.

It has to do with relative wages, not so much even how much.

I suppose this gives you the theory as to how much of this group I get, but how much I get coming through when I expand that world along the way to the next level.

And that's very crucial in all of our...

I'm happy with this.

I think my...

not even how much I get, but how much I get compared to the next top, and that's very crucial in all markets.

Now it happens that as a result of the work of the Stabilization Program generally since 1971, wage relationships since 1971,

Therefore, people are less concerned about their relative position because it is an appropriate relationship on historical grounds.

I think that's a very strong element.

The second element is that's a very strong element.

The second element, I think, the very good industrial peace happens to.

In other words, we've had a period where peace happens to.

In other words, we've had a period of very bad relations, a period of very bad relations in many industries, many industries in the last three or four years, and people are genuinely seeking to find a better way as the French years, and people are genuinely seeking to find a better way, as the French, as the steel-finished products, and that the internatical impacts of

to look for a better way are a second and very important part.

Those two points are part of this disease.

The efforts to look for a better way are a second and very important part.

Those two points are part of this disease.

to last week.

Brings the, our revised receipts estimates for fiscal 73 and 74.

Brings our receipts for fiscal 73, we estimate $5 billion higher than we had in January.

$7 billion higher than fiscal 74.

So it brings the estimated deficit in higher fiscal 74.

It's just not the assumption that the outlays.

So it brings the estimated deficit.

It's just not that we're getting unchanged.

We didn't put forward any view of the outlays.

It's the assumption that the outlays exist.

of the outlays we just set to 7, they are $73,000 down to about $20,000, and the $74,000 down to about $5.5 billion.

My own brings the $73,000 down to about $20,000, and the $74,000 personal payment is our estimate on the increase in receipt

We will probably have a slightly spongy tap of about five and a half billion.

My own personal opinion is that our estimates are not in question because Roy assured me that we're going to make that 250 increases.

But even less in the other direction.

We will probably have a slightly smaller lesson because Roy assured me that we're going to make that $250 million.

Oh, that's right.

I do regard fiscal 74 for myself.

Because Roy's, uh, yeah, he's a veteran.

That's why he didn't get sued over his pants.

Well, but even less in the other direction.

That affects fiscal 74.

Oh, this is where I, I do regard pistol-setting for myself as a real problem, uh, because we, because, uh, I'll get into some better on this later on, but as a real problem, uh, because we, we have not gotten some, we have not gotten some key pieces of legislation, key pieces of legislation on things like, on things like the,

Yeah, that reminds me.

We counted on to save some money.

We do have... We counted on to save some money.

We do have sharply higher interest on... sharply higher interest on the debt.

The debt because interest rates have risen.

So there's a lot of pressure there.

But we've had a very good act since interest rates have risen.

So there's a lot of pressure there here in Congress in the sense of...

General feeling that the amount we've got a very good atmosphere that you proposed is plenty.

Congress, in the sense of the general feeling that the amount that you proposed is plenty.

I can't help but feel that what

The way this will apply is how loud it is in terms of...

What do you have to say, Roy?

Just turning in what has been said, I think, to the place before us.

What we last discussed is what will be the optimum balance between what effective and evil have.

We all realize it would be like a breeze and so forth, and we thought about it when we kicked it around.

We all spectacular for a great headline for maybe a month, two or three weeks, but

Fair enough.

to say, well, we considered this breach and so on.

The idea as well that we consider this, again, to include .

The prices are going to get frozen.

The figures are being revised.

that capital investment, we are in danger of having a runaway boom.

It is virtually bound to be followed by some stagnation in fixed capital investment, fixed capital investment later on, which can, even so, usually does, may only bring on a recession.

Now the, uh, you know, the figures are being revised upward all the time.

We're doing, we're doing a number of things to restrain the boom.

And now, according to the latest survey, but I think there's an additional proposal.

The business capital investment will be 19% late now, but better late than never.

or better late, better now than later, send it out to the mayor.

And that is, if you're posted, that's great too for a bigger interest.

four it is virtually bound to three or two follow nine two or zero but that's some stagnation

We ought to have it now.

We're doing a number of things to restrain the boom.

Let's reform the legislation.

The argument against it is, well, there's more than one argument, but I think there's an additional proposal.

better late, better now than later, and that is not to raise additional revenue.

Those who occur for a near-assisted investment tax realize the economy, but any additional revenue is entirely incidental.

So that you can lower it from the spread of seven to perhaps

Well, this 4, 3, or 2, or 0, that's deciding.

Well, we talked about this in a meeting a couple of months ago.

That's right.

And then later on, later on, this will go.

And we're decision-making.

If we get into native counties, you can go back to 7.

Yeah, that was it.

She felt this was not something.

I think there's also additional...

Well, at least in his, uh, when I raised him.

not to raise additional revenue.

The purpose is to stabilize the economy.

And the decision we got was that she felt this was not something that we should be pushing because of the tax increase implications.

I think there's also an additional point.

I've discussed this with Mills, and Arthur has also, I'm sure.

Well, this is where I've failed.

I've discussed many things with Wilbur, but not this one.

Well, at least in his, when I raised him and saw his views on this, he's quite against it.

He's against it because he is in favor, at least this is the way he's reasoning around it, he is basically in favor of having an investment tax credit on the grounds that it is capital needs incentive.

And this is the one way in which the tax system can be given and can't

Now, it's not a variable investment tax credit, but the elimination of liberals on this committee are looking for some way, Yahoo, or something like that, I should hide.

So, as a political proposition, this committee is looking for some way, Yahoo, or something like that, I should hide.

Now, in terms of where we are on a political proposition in this committee,

That is his judgment.

Now, in terms of where we are on that committee, we testified, I testified all day Monday, and I testified all day Monday, and all day Tuesday, and all day Tuesday, and all day Tuesday, and all day Tuesday, and all day Tuesday, and all day Tuesday, and all day Tuesday, and all day Tuesday,

But we will go with that until they finish, which they hope will be.

We will go with that until they finish around the end of July, before the recess.

Which they hope will be around the end of July, before they return to Texas.

And after Labor Day, that's their current.

And then they'll return to Texas, schedule a lot of this.

He was totally misquoted in the press, but anyway, that's a total outspokenly misquoted in the press, but anyway, a proposal for a tax increase.

Was this a possibility, which Arthur had not said, that what he testified yesterday about?

Was this a possibility, which Arthur had not testified yesterday about?

I think except for the politics of it, I think it's a good thing.

I certainly agree, it's a good thing.

I think except for the politics of it, I think a key here is that politics is certainly a great thing to do.

A key here is that politics is not the answer.

I came to the question about how is it happening.

I came to a more favorable view of that with respect to the present situation because I concluded that in a hard discussion, in a sad, sad, sad, in a period of

You might then get it in some other direction.

Next.

We're in agreement with the proposal.

We're in agreement with the proposal, which he was not.

He was not.

Because we were in agreement with the proposal.

And he could have, he could have, he could have, he could have, he could have, he could have, he could have, he could have, he could have, he could have,

the impact of it without having to look at the announcement of your support, then you could have some of the information.

I don't know if that happened.

I mean, you said it this way.

I don't know.

But let's be sure to just say, all right, that he can get off his tail and do it now.

Because that's what we're really talking about.

Maybe in terms of, we don't want something to be played or anything.

We're going to do it the other way.

And we need to be talking about it not in terms of what it is.

If we start running down this road, by the time we get it, we are careful, we won't run.

I have it reflected in George's point about the data already.

I met him yesterday morning.

He's the chairman of the board of the St. Louis Chamber of Commerce.

He told me that he had signed a contract today before yesterday for a $35, $40 million plan to come down because he was concerned about the fact that this tax credit wouldn't go away.

In other words, I think the problem with speculation is that

Be careful with those lights.

In other words, I think the problem