706–5

Conversation No. 706-5

Date: April 11, 1972
Time: 3:06 pm - 5:05 pm
Location: Oval Office

The President met with Peter G. Peterson, John D. Ehrlichman, Peter M. Flanigan, Kenneth R.
Cole, Jr. and Stephen B. Bull; the White House photographer was present at the beginning of the
meeting.

Greetings

John B. Connally
-Forthcoming meeting with the President
-Delay

Bull left at an unknown time before 3:48 pm.

Commerce Department
-Undersecretary
 37

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-James T. Lynn

Economy
-Foreign trade
-Commercial attaches
-Legislation before Congress

Manolo Sanchez entered at an unknown time after 3:06 pm.

Refreshment

Sanchez left at an unknown time before 3:48 pm.

Economic issues
-Commercial attaches
-Problems with pending legislation
-Foreign trade
-Foreign Service officers
-Indoctrination on economic issues
-State Department
-Lack of leadership on economic issues
-Undersecretaries
-Textiles
-Agriculture
-Foreign trade
-Leadership
-Attaches

US-Soviet Union relations
-Henry A. Kissinger
-Flanigan
-Trade
-Linkage
-Soviet needs
-Commercial deals
-Raw materials
-Capital demands
-Oil and gas
-Scope
-Return
-Soviet debts
 38

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Gradual increase
-Export-Import [Ex-Im]
-Most favored nation status [MFN]
-Raw materials
-Aleksei N. Kosygin
-US credits
-Soviet gains
-Resources
-Capital demands of Soviets
-Anatoliy F. Dobrynin
-Conversations with Peterson
-Peterson's meeting with Soviet Trade Minister, Nikolay S. Patolichev
-Arrangements
-Ex-Im and MFN status
-Talks
-Issues
-Ex-Im agreements
-Credits
-MFN status
-1972 election
-Congress

Foreign trade
-Poland
-Yugoslavia and Rumania
-US attitudes
-Kissinger
-Poland
-The President's forthcoming trip
-Poland, Yugoslavia and Rumania
-Visits to US
-Eastern European nations
-Contacts with US
-Soviet trade
-Peterson memorandum
-Recommendations
-Donald McI. Kendall
-Benefits to US
-US businessmen
-Sales
-Credit and investment guarantees
 39

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)



Energy
-Flanigan
-Ehrlichman
-Problems
-Long-range view
-Politics

Economy
-Maritime Administration
-Andrew E. Gibson
-Study of imports
-Maritime implications
-Energy
-Oil imports
-Percentage
-Maritime fleet
-Projected size
-Supertankers
-Japanese
-Economic advantages
-Dock facilities
-Political problems
-Delaware
-Problems
-Subsidies
-Domestic problems
-Incentives
-Environment
-Supertankers
-Ports of call
-Canada and the Bahamas
-Docking problems
-Japan
-Australia
-Recommendations
-George P. Shultz
-Budget problems
-Investment areas
-Welfare
-Hard and soft goods
 40

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Investments
-Welfare
-Summer youth programs
-Maurice H. Stans
-Day care centers
-Office of Economic Opportunity [OEO]
-Democratic political pressures
-Conflicts between business and welfare
-Energy
-Supertankers
-Shultz
-Docking problem
-Pacific Northwest
-Local resistance
-Maine
-Gulf states
-Louisiana and Texas
-Off-shore leasing

Energy
-Alaska
-Political problems
-Environment
-Costs to consumers
-Domestic ownership
-Petersons' job
-Budget
-Shultz
-Monitoring issue
-Cole
-Business representation
-Environment
-1972 election
-Public awareness
-Increase
-Publicity
-Business community
-Rogers C. B. Morton
-Testimony
-News summary
-Power shortages
 41

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Gibson
-Power stations
-Construction
-Objections
-Compared with Vietnam War
-Peterson's role
-1972 election
-Stans
-Links to liberals

Foreign trade
-US competitiveness
-Information gathering
-Steel output
-Japanese
-Japanese
-Strategic industries
-Studies
-Machine tools, steel
-Depreciation, write-offs
-Study program
-Commerce Department
-Connally
-Depreciation policies
-Strategic industries
-Foreign government support
-US tax reform bill
-Congress
-Connally
-1969 talk with the President at San Clemente
-Cattle
-Reform
-Connally's role
-Study program
-Depreciation policies
-Problems
-Housing
-ADR
-Investment tax credit
-German and Japanese policies
-Successes
 42

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-New jobs
-Speech
-Publicity for reform
-Study for Congress
-Investment tax credit
-Japanese
-Responsiveness
-Tax reforms
-Criticism
-Rich compared to poor
-Jobs
-Treasury conservatism
-Internal Revenue Service [IRS]
-Peterson's meeting with Connally
-Tax lawyers

Technology
-Industrial technology
-Study by Commerce Department
-Patents
-US government ownership
-Commercial production
-Review of policies
-Costs
-Research and development [R&D]
-Nonexclusive provisions
-Patent policies
-State of the Union address
-Incentives for technology
-Cost sharing
-Government patents
-Commercial production
-Government R&D
-Roadblocks
-William M. Magruder
-Commerce Department
-Aggressiveness
-Salesmanship
-1972 election
-Business
-Jobs
 43

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Prices
-Job creation
-R&D
-Emphasis on jobs
-Environment
-Necessity to sell
-Ehrlichman, Charles W. Colson and H. R. (“Bob”) Haldeman
-Image of business
-Administration's image
-International Telephone and Telegraph [ITT]

Environment
-National Industrial Pollution group
-Comments
-Growth
-Club of Rome study
-Quality of life programs
-Costs
-Office of Management and Budget [OMB]
-Health, welfare, mass transit
-Long-range costs
-Source of funds
-Projections
-Economic growth
-Zero-growth advocates

Economy
-Productivity Commission
-Shultz
-I[lworth] W[ilbur] Abel and Leonard Woodcock
-Membership
-Popular appeal
-Advertising Council
-Identification of the President with campaign
-Cost-wage push
-Range of problems
-Germany and France
-Productivity
-The President’s August 15, 1971 statement
-Popular appeal
-International problem
 44

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Bargaining system
-Phase II
-Businessmen's doubts
-Strikes
-Costs
-Strikers
-Benefits
-Food chains
-Meeting with Connally
-Bargaining system
-Reform
-Post-election changes
-Shultz's ideas
-Dangers
-Pre-election attacks against labor
-Minority economic development
-Appeal to voters
-Political appeal
-\"Bridge to dignity\"
-Problems
-Peterson’s speeches
-Chicago
-New York
-Lack of knowledge in public
-Bold steps
-Prominent blacks to sell program
-Stars
-Athletes
-Dinner
-New York
-Inner cities
-Deterioration
-Economic stimulation
-Unknown person's suggestion
-Focus on business
-1969 campaign theme
-[Forename unknown] Messig [sp?]
-Stans
-Productivity
-Peterson's recommendations
-Advertising Council
 45

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Wage-cost push
-Pre-election actions
-Peterson's meeting with Connally
-Date and location

Connally, Arthur F. Burns, Shultz and Frederic V. Malek entered at 3:48 pm.

Greetings

Connally
-Health

Economy
-Connally's meeting with Peterson
-International competition
-Productivity
-Environment

Peterson, Ehrlichman, Flanigan and Cole left at 3:49 pm.

[General conversation]

Federal Reserve Board [FRB]
-Vacancy
-Number
-Sherman J. Maisel
-Andrew F. Brimmer
-Ambassadorship
-Removal
-Black ambassadors
-Position security
-Election
-Rogers
-United Nations [UN]
-Secretary General
-Confirmation
-European post
-African post

Jerome H. Holland
-Background
 46

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-College
-Football
-Tenure
-Post
-Future

FRB
-Vacancy
-Candidates
-Names
-Districts and regions
-California
-Candidates
-List
-Jeffrey M. Bucher
-Ward C. Krebs
-Bucher and Krebs
-Origins
-Age
-Selection
-Criteria
-Compared with Supreme Court
-Age of justices
-Lewis F. Powell, Jr.
-William H. Rehnquist
-Youth
-Length of term
-Age
-Compared with Supreme Court justices
-Earl Warren
-Warren E. Burger
-Harry A. Blackmun
-Powell
-Bucher
-Aspirations
-Short-term
-Banking job
-Experience on board
-Krebs
-Duration of term
-Criteria
 47

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Banking background
-Krebs
-Experience in banking
-Bucher
-Youth
-Requirements
-Judgment
-Maturity
-Longevity
-Bucher
-Other positions in second term
-Krebs
-Bucher
-Longevity on board
-Burns's influence
-[John E. Sheehan]
-Bucher
-Potential
-Krebs
-Interview with Burns
-Compared with Bucher
-Bucher
-Harry J. Volk
-Asa V. Call and Charles D. (“Tex”) Thornton
-United California Bank
-Bank of America
-Security First National Bnak
-United California Bank
-Volk
-Prudential Insurance Company
-Robert H. Volk
-Burns's preference
-Ernest C. Arbuckle
-David Packard's work
-Background
-Stanford University
-Present position
-Krebs
-Candidate selection
-E. Penn James's and Malek's work
-Brimmer case
 48

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-James L. Robertson
-Possible resignation
-Robert C. Holland
-Position on board
-Political affiliations
-Respect in banking world
-Appointment
-Replacement for Robertson
-Pension
-Rules
-Age
-Robertson
-Meeting with the President
-Sheehan's swearing-in
-Possible retirement
-Populism
-Support for small banks
-Appointments
-Future make-up
-Candidates
-Krebs
-Bucher
-Youth
-Work with Burns
-Compatibility
-The President’s talk with Burger
-Conflicts within board
-Number of dissents
-Alfred Hayes
-Work with Burns
-Hayes's staff
-Candidates for vacancy
-Names
-Criteria

Malek left at 4:13 pm.

Budget
-Information for the President
-Money supply and interest rates
-Wage and prices
 49

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Deficit
-Decrease

Environment
-Commerce Department study
-Peterson
-Costs
-Quality of life programs
-Relation to economic growth
-Population
-World
-Daniel P. (“Pat”) Moynihan
-US
-Stabilization
-The President's meeting with Peterson
-Oil imports
-US needs
-Supertankers
-Docking facilities
-Local resistance
-Texas
-Quality of life programs
-Family assistance
-Day care centers
-Costs
-Budget
-Environmental field
-Regulatory activity
-Proposition in California
-Loss of jobs if passed
-Edgar F. Kaiser
-Steel plants
-Peterson
-Political implications
-Need for economic growth

Economy
-Welfare programs
-Family Assistance Program [FAP]
-Education and health programs
-Summer youth programs
 50

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-FRB
-Peterson
-Charles H. Percy
-Change of attitude
-Stans
-National Association of Businessmen [NAB]
-Optimism
-The President's meeting with Gordon E. Metcalf and John D. Harper
-Prices and stocks
-Rate

Burns and Shultz left at 4:20 pm.

Connally
-Health
-Illness
-Gen. Walter R. Tkach


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BEGIN WITHDRAWN ITEM NO. 9
[Personal Returnable]
[Duration: 3m 40s ]


END WITHDRAWN ITEM NO. 9

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Connally's schedule
-Trip to Texas
-Stansville [?]
-Dinner honoring Texas Supreme Court Chief Justice
-Speech
-Time off

Manolo Sanchez entered at an unknown time after 4:20 pm.

Refreshment
 51

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Tea
-Effects
-Type

Sanchez left at an unknown time before 4:46 pm.

Connally
-Reports
-World situation
-Trip to Camp David
-Idanell B. (“Nellie”) Connally
-The President's Canadian speech
-Transportation
-Rest
-Camp David
-Golf
-Work ethic
-Speech
-Health


*****************************************************************

BEGIN WITHDRAWN ITEM NO. 11
[Personal Returnable]
[Duration: 1m 1s ]


END WITHDRAWN ITEM NO. 11

*****************************************************************


-Work ethic

The President's schedule
-Vietnam
-Reports
-News summary
-Critical decisions
-Conversation with Haldeman
 52

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)



Vietnam
-Kissinger
-Air Force
-Naval gunfire
-North Vietnamese offensive
-Victory
-Impact on Soviet Summit
-Cancellation
-Impact on foreign policy
-India, Middle East and Europe
-Soviet Union

Treaty on biological warfare
-Effect
-Great power restraint
-The President's remarks at signing ceremony
-Arms control
-Great powers restraint
-Soviet's views on Summit
-Dobrynin

Vietnam
-Navy
-Fleet
-Shelling of roads in North Vietnam
-B-52 strikes
-Polls
-Critics
-Edward M. Kennedy
-Foreign policy


*****************************************************************

BEGIN WITHDRAWN ITEM NO. 13
[Personal returnable]
[Duration: 24s ]


END WITHDRAWN ITEM NO. 13
 53

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)



*****************************************************************


Economy
-Interest rates
-Burns's policies
-Burns's work
-Interest rates
-Money supply
-European problems
-Paul A. Volcker's meetings
-Press conferences
-The President's Canadian trip
-Trade negotiations
-Great Lakes agreement
-The President's speech draft
-Connally's review
-Pierre E. Trudeau
-Reelection
-Quebec
-Separatism
-Trudeau
-Reelection campaign
-Connally's speech in Chicago to national broadcasters
-Reaction
-Business leaders
-Location
-Continental Plaza Hotel
-Tourist Bureau
-Dallas and Houston
-Format
-Agenda
-Foreign policy, taxes, loopholes, productivity
-Taxes
-Loopholes
-Definition
-Major reforms
-Republican initiatives
-Eisenhower and the President
-Democratic interests
 54

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-George C. Wallace
-Loopholes
-Creation of jobs
-Home mortgage interests
-Abolition
-Opposition
-Purpose of loophole
-Municipal bonds
-Support of cities
-Abolition
-Failures
-Charitable contributions
-Abolition
-Impact
-Capital gains
-Dow-Jones Industrial Average
-Depletion allowance
-Energy crisis
-Abolition
-Disadvantages
-Casualty losses
-Estate taxes
-Peterson
-US competitive position
-Depreciation allowance
-Japanese and West German example
-Change of position
-Support for loopholes


*****************************************************************

BEGIN WITHDRAWN ITEM NO. 15
[Personal returnable]
[Duration: 6m 11s ]


END WITHDRAWN ITEM NO. 15

*****************************************************************
 55

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)



-ITT case
-Relations with ITT
-Vance Hartke

Taxation
-Overwithholding
-News summary
-Agents of Internal Revenue Service [IRS]
-Correction of problem
-Timing
-Public campaign
-W-4 exemptions
-Mailings
-Shultz
-Tax returns
-IRS aid to average taxpayer
-Publicity
-Announcement of task force
-IRS agents
-Number
-Customs Bureau in Florida
-Agents
-Sufficient number for job
-Number for searches
-Financing problems
-Customs Bureau
-Agents
-Increase
-Port officers
-Value of inspections
-Specific case
-[Recent heroin seizure]
-Budget and personnel cuts
-Customs
-IRS
-Agents
-Help for returns
-Political benefits
-Personnel available
-Returns
 56

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Johnnie M. Walters
-Survey of small professional preparers
-H&R Block
-Fraudulency rate
-Costs of delinquency

ITT case
-Edmund S. Muskie charge
-Corporate taxes
-Validity of claim

Economic policies
-Food prices
-Administration's actions
-Albert E. Sindlinger poll
-Support
-Offensive stance
-Sindlinger's conversation with Colson
-Administration statements
-Wholesale price index
-Graham Purcell's hearings
-News coverage
-Administration's image
-Farmers
-Middlemen
-Retailers
-Safeway
-Need for discussions
-Profits
-Actions before election
-Freeze on food prices
-Effect
-Risks
-Farm vote
-Packers and producers
-Current state of economy
-Unemployment
-Level
-Figures
-State in October
-Inflation
 57

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Agitation of issue
-Housewives
-Networks
-Public statements
-Frequency
-Connally
-White House staffers
-Marina von N. Whitman
-Mood of nation
-Florida
-Youth
-Tricia Nixon Cox's assessment
-Harvard University
-Nostalgia
-Stability and leadership
-Kennedy and Muskie
-Lack of support
-Unemployment
-Figures
-Analysis
-Youth
-New workers
-Creation of jobs
-Positive perspective
-Social changes
-Wives and youth
-Entrance into labor force
-Job seekers

Bull entered at an unknown time after 4:20 pm.

The President's meeting with Kissinger

Bull left at an unknown time before 5:05 pm.

Vietnam
-North Vietnamese offensive
-Aggression
-Analysis
-Compared with Laos and Cambodia
-US public reaction
 58

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/06)
Conv. No. 706-5 (cont.)


-Bombing of North Vietnam
-US troops
-Hanoi and Haiphong
-Bombing of other cities and railroads
-US countermeasures
-US choices
-Consequences of failure
-Credibility of foreign policy

The President and Connally left at 5:05 pm.