851–4

Conversation No. 851-4

Date: February 6, 1973
Time: 5:11 pm-6:10 pm
Location: Oval Office

The President met with Arthur F. Burns and George P. Shultz.

Greetings

Trade policy
-President’s meeting with Edward R. G. Heath
-Heath
-Negotiations with Europe
-Cooperation
-Agriculture products
-Monetary situation
-European attitudes
-Negative
-Heath’s role
-Shultz
-Role
-Change European attitudes
-Perfectionism
-Reaction to US position
-Sympathy
-Anthony P. L. Barber
-Support in Parliament
-Sir Douglas Allen
-International monetary situation
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)




Prime interest rates
-Discount rate
-Banks
-Testimony to Congress
-Questions on Phase III

Senate Banking Committee testimony
-Burns
-Attention
-Questions
-William McChesney Martin, Jr.
-Phase III
-Inflation
-Wilbur D. Mills
-Compared to previous testimony
-Burns's statement
-Phase III
-Support
-Questions
-Responses
-Support in government
-Violations
- -Support from President
-John T. Dunlop’s swearing-in
-Interest rates
-Questions
-Burns’s statement
-Shultz’s testimony
-William Proxmire
-Committee seats

Stephen B. Bull entered at an unknown time after 5:11 pm.

Message to Ronald L. Ziegler
-Burns's testimony
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)




Bull left at an unknown time before 6:11 pm.

Interest rates
-Rise
-Money supply
-End of fast growth
-Nervousness
-Martin
-Policies
-Burns’s goals
-Avoidance of recession
-Tightening money supply
-Impact
-Complaints
-Duration
-Start date
-Treasury Department [?]
-Money supply
-Growth
-Control
-Sustained prosperity
-Elections

Burns’s possible trip to Japan
-Foreign Exchange problem
-Shultz
-Plans
-Discussions
-Kakeui Tanaka
-Tadashi Sasaki [?]
-Central Bank
-Timing
-Henry A. Kissinger
-Meeting with Tanaka
-Timing
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)




Foreign Exchange crisis
-Outflow of dollars
-Germany
-Acceleration
-Administration’s actions
-Meetings of economic advisors
-Burns’s involvement
-Herbert Stein, Paul A. Volcker, Shultz, William P. Rogers,
William J. Casey, Peter M. Flanigan
-Agreement on problems
-“Speculative fury”
-Trade deficit
-Size
-Balance of payments
-Corrective measures
-Smithsonian agreement
-Effect
-Offsets
-Deterioration
-Great Britain’s exchange rate
-Solutions
-Devaluation
-Percentage
-Revaluation by Japan
-Percentage
-Europe
-Persuasion
-Efficacy of measures
-Compared to changing exchange rates
-Trade legislation
-President’s authority to negotiate
-Expansion of world trade
-Provisions
-Protection of businesses
-Balance of payments surcharge
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Impact on Japan
-Trade package
-Consultation with Congress, Labor, Business
-Announcement
-Gold market
-Impact of moves by the administration
-Volcker
-US actions on price of gold
-Private market
-International agreements
-Private market position
-Publicity
-Increase in price
-Private sales of gold
-Republican platform
-Serbian community [?] in US
-Capital control program
-President’s promise
-Equilibrium
-Domestic programs
-Phase out
-Consistency of international monetary plans
-Deficits
-Surpluses
-Japan
-Crisis
-Recurrence
-Japan
-Agreement on revaluation
-Legislation
-Surcharge
-Appeal to Europe
-Timing
-Leaks

Congressional leaders
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Leaders’ schedules
-Shultz’s statement
-President’s decision
-Negotiations with trade partners
-Trade legislation
-Exchange rate realignment
-Gold

Wage and price controls
-Burns’s view
-Phasing out
-Gold purchases by private citizens
-Imports
-Effect on balance of payments

International monetary situation
-Gold
-Central banks
-Powers
-Devaluation
-Percentage
-Japan
-Dollar value
-Exchange rate
-Floating dollar
-Smithsonian Agreement
-Trade
-Great Britain
-Exchange rates
-Changes
-“Economic belligerency”
-Devaluation
-Percentage
-Public perception
-Understanding
-US position in world markets
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Trade package
-Protectionism
-Dangers
-Encouragement to foreign nations
-President’s speech at International Monetary Fund [IMF]

Inflation
-International trade
-US position
-Price stability in US
-Announcement
-Determination to curb
-Congress
-Large films, unions
-Changes in wages and prices
-Announcement
-Congress
-Laws on reporting wage and price changes
-Testimony
-Paperwork
-Business overdependence on government

International monetary situation
-Speech
-Criticism
-Repetition of plans
-Trade
-Authority to negotiate
-Imports
-Compared to surcharges
-Removal
-Rate change
-Agreements
-Recurrent crises
-Administration’s actions on balance of trade, payments
-Trade
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Burns’s view
-Monetary reform
-Pace
-Crisis
-William D. Eberle
-Defense
-Summit talks
-Preparation
-Negotiations
-Japan, Italy, France, Germany, Great Britain, US
-Big Four
-Smithsonian Conference
-Meeting with Georges J. R. Pompidou
-Accomplishments
-US position
-Global security

Devaluation
-Percentage
-Japan
-Legislation on surcharge
-Safeguards on flooding
-Congressional relations
-Consulting
-Trade
-Handling
-Dealings with Japan
-Ambassadors
-Volcker
-Finance minister
-Tanaka
-Draft letter to Tanaka
-Great Britain, Germany
-Timing
-Delay
-Politics
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-France
-Great Britain
-Japan
-President’s statement
-California
-Kissinger
-Preparation
-Timing
-Monetary move
-Trade
-Recklessness
-Crisis
-Timing
-US advantages
-Trade
-George Meany
-Telephone call to Shultz
-Congressional relations
-Discussions
-Mills
-Meetings with President
-Tax problems

President’s schedule
-Meeting with Mills
-Shultz’s testimony
-Tax policy meeting

Bull entered at an unknown time after 5:11 pm.

-Tax policy meeting with Shultz, Ehrlichman
-Mills’s meeting
-Shultz
-Length
-Time
-Swearing-in ceremony for John T. Dunlop
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Time
-Mills
-Length of meeting
-Ehrlichman
-National Security Council [NSC] reading material
-[Hussein, King of Jordan] Hussein ibn Talal

Bull left at an unknown time before 6:03 pm.

Burns
-Monetary problems
-Health
-Weight
-State dinner invitations
-Health

Burns left at 6:03 pm.

Railroad subsidy
-Union trustees
-Amount
-Administration’s support
-Interstate Commerce Commission [ICC]
-Legislation
-Federal railway administrator
-Impact on trustees
-Waste
-Union
-Bailout
-Threat of bankruptcy
-Judge’s decision on sale of property
-Operating at a loss
-ICC
-Strike
-Impact
-Resources
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NIXON PRESIDENTIAL LIBRARY AND MUSEUM

Tape Subject Log
(rev. Mar.-09)
Conversation No. 851-4 (cont’d)



-Railroad
-Debts
-ICC
-Deregulation legislation

President’s meeting with Mills
-Ehrlichman
-Trade
-Health legislation
-Taxes
-Hearings
-Administration’s tax plan
-Meeting with Shultz and Ehrlichman
-Russell B. Long

Shultz’s testimony

Shultz left at 6:10 pm.