542–4

Conversation No. 542-4

Date: July 22, 1971
Time: 10:51 am - 11:36 am
Location: Oval Office

The President met with Paul W. McCracken.

Foreign policy
-The People's Republic of China [PRC]
-Recent US initiative
-William P. Rogers
-Henry A. Kissinger, the President
-Efforts
-Confidential nature of effort
-Secret channels
-Other foreign governments
-US-PRC relations and US-Union of Soviet Socialist Republics [USSR] relations
-Surprise element in breakthrough
-Absence of contact during past twenty years
-Great Britain, France
-Kissinger's conversation with Chou En-lai
-Kissinger’s conversations with the USSR
-PRC initiative
-Youth reaction
-Generation differences
-Future outlook
-Press coverage
-TV commentator
-Staff meeting
-Discussion of breakthrough
-The PRC
-Impact
-Position in the world
-Other Communist countries
-North Vietnam
-USSR
-Reasons for action

Manolo Sanchez entered at an unknown time after 10:51 am.

Refreshment
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)




Sanchez left at an unknown time before 11:36 am.

The economy
-John B. Connally (?)
-Council of Economic Advisors [CEA]
-Role
-McCracken's possible departure
-Timing
-Changes in policy
-July statistics
-Trends
-Possible action
-John Kenneth Galbraith's comments
-Wage and price controls
-Timing
-Projections for balance of 1971
-CEA
-McCracken's role
-Unemployment
-Defense Department manpower and defense industry
-Rate
-Inflation
-McCracken’s forthcoming resignation
-Rate of expansion
-Projection on increase
-Timing
-Possible action
-Tax initiative
-Wage and price controls
-Labor issues
-Steel strike settlement
-Winton M. (“Red”) Blount
-Postal strike
-McCracken, Herbert Stein, Ezra Solomon
-Psychological perceptions of economic situation
-Compared to reality of situation
-George Meany
-Connally, Arthur F. Burns
-McCracken's view of administration’s approach
-Recommended approach
-Tax action
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-International trade
-Effect of forthcoming PRC trip
-Need to improve US competitiveness
-Exchange rate of the US dollar
-Effectiveness of action
-Price of gold
-Fixed price
-Treasury Department Conv. No. 542-4 (cont.)
-Connally
-Paul A. Volcker
-Possible weakening of the dollar
-Comments at international economic conferences
-Timing
-Possible conversation between McCracken and Connally
-Volcker
-The Department of the Treasury
-Reluctance to change
-Staff’s backgrounds
-Burns
-Gold prices
-Exchange rates
-Ten percent change
-Balance of payments
-Elimination of trade barriers
-Technical aspects of dealing with the price of gold
-Impact of action
-Confidence in the dollar in financial markets
-Domestic impact
-Possible inflationary effect
-Labor unions
-Quotas
-Connally's view
-Yankee trader
-Action on taxes
-Value added tax [VAT]
-Burden of the middle income worker
-Tax structure
-VAT
-International context
-National sales tax advantage over national income tax
-Michigan example
 15

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



McCracken
-Effect of resignation
-Timing
-School semester at university
-Teaching job
-Proposed economic action

The economy Conv. No. 542-4 (cont.)
-Unemployment
-Effect of defense industries
-Vietnam troop withdrawals
-Southern California, Seattle
-Defense and aerospace jobs
-Michigan
-Other issues
-PRC initiative
-Vietnam
-International economic action
-Weakening of the dollar
-Financial crisis
-International trade
-International political position
-McCracken’s pending resignation
-Current situation
-Retail sales, inventories
-Gains in July statistics
-Frequency of McCracken's meetings with the President
-Stein, Solomon
-Connally, George P. Shultz

[The President talked with the White House operator at an unknown time between 10:51 am and
11:32 am]

[Conversation No. 542-4A]

[See Conversation No. 6-182]

[End of telephone conversation]

McCracken
-Role
 16

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



The PRC initiative
-Effect of action

[The President talked with Connally between 11:32 am and 11:35 am]

[Conversation No. 542-4B]

[See Conversation No. 6-183] Conv. No. 542-4 (cont.)

[End of telephone conversation]

Connally
-Forthcoming telephone call to McCracken

Solomon's schedule

Forthcoming 1972 election (?)
-Foreign policy
-Laos, Cambodia, Vietnam war

Donald H. Rumsfeld entered and the President left at 11:36 am.

McCracken’s staff

McCracken left at 11:36 am.