76–1

Conversation No. 76-1

Date: September 17, 1971
Time: Unknown after 2:30 pm until 4:24 pm
Location: Cabinet Room

John G. Tower, Wallace F. Bennett, William Proxmire, Allen J. Ellender, Milton R. Young, John
J. Sparkman, Norris Cotton, Harrison A. Williams, Jr., Jacob K. Javits, Herman E. Talmadge,
Jack R. Miller, Robert C. Byrd, Hugh Scott, Michael J. (“Mike”) Mansfield, Wright Patman,
George H. Mahon, Frank T. Bow, William L. Springer, Albert H. Quie, William R. Poage, Page
Belcher, [Thomas] Hale Boggs, Gerald R. Ford, Carl B. Albert, George P. Shultz, Herbert Stein,
Charls E. Walker, Clark MacGregor, and William E. Timmons met

[General conversation/Unintelligible]

The President entered at 2:38 pm

Schedule
-Meetings attendees
-Late arrivals

[General conversation/Unintelligible]

Meeting agenda
-The President’s briefing
-Shultz’s briefing
-Views on current developments
-Members of House and Senate present

Economic policy
-Meeting on post-freeze action
-Organized labor
-Business
-Agriculture
-State and local officials
-Consumer groups
-The President’s role
-Miscellaneous interest groups
-Cost of Living Council members
-Value of meetings
-Broad range of views on issues and options
-Representation of public view
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Labor, agriculture

John [B. Connally?] entered at an unknown time after 2:38 pm

Greetings

Economic policy
-Differing focus of each special interest group
-Need for wide base of support
-Wage-price freeze
-Phase II
-Input for post-free options
-September 30 through mid-October time frame
-Date for further action
-Purpose of present meeting
-Congressional concerns
-Tax package
-Freeze coverage
-Restraint
-Shultz’s overview
-Budget
-Economy
-Future action
-Questions
-The President’s announcement of the freeze
-Establishment of freeze
-Actions in field
-Cost of Living Council
-Administration of freeze
-Office of Emergency Preparedness
-General George A. Lincoln’s group
-Wage-price controls
-Supply of detailed personnel by the Internal Revenue Service [IRS]
-Agricultural Service County Agent System
-Other miscellaneous agencies
-Total personnel
-Questions
-Wage-price freeze
-Cost of Living Council
-Policy statements
-Public questions
-Interpretations
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Three principles
-Consistency of application across the board
-Wage, rent, price, salary situations
-Policy statements
-Cost of Living Council
-Support
-Stringency of applications
-Walker
-Exceptions
-Reasonableness
-Variations
-Support for freeze
-Letters
-Number of complaints
-Unnamed governor
-Unnamed business
-Dividends
-Wages, salaries, prices, rents
-Statistics on the effectiveness of the freeze
-August 1971
-Freeze’s effectiveness
-Post-freeze period
-General consensus
-Success
-Duration of freeze
-Long term freeze
-Effects
-Inequities
-Short term freeze
-90 days
-Freeze announcement
-Focus
-Phase II
-Public view
-Situation after freeze
-Greater comprehensiveness
-The President’s meetings with different groups
-Cost of Living Council meetings
-Acceptance of freeze
-Administration policy in meetings
-The President’s decision on Phase II
-Open discussion
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Program after freeze
-Labor
-Wages
-Prices
-Need for voluntary cooperation
-Government sanction
-Views of members of the Senate and House of Representatives
-Differences
-Views of labor organizations
-Application, organization
-Wages
-Views of agricultural groups
-Application, organization
-Wages
-Length of next phase
-90 days
-Indefinite period
-Present group’s views on the international economic situation
-Agriculture group’s questions
-Effect of international situation on agricultural exports
-Duration of surcharge
-Javits
-Previous leaders’ meeting
-Direction of administration policy
-Views and criticism of group present
-Wage-price freeze
-Focus of the House of Representatives
-Automatic deferral of federal employees benefits
-House Committee reports
-Post Office and Civil Service subcommittee
-Resolution
-Impeachment
-The French Revolution
-Congressman
-Sensitivity of issue
-The budget
-Administration’s position
-90-day freeze
-Effects on private industry
-September 16 meeting with governors, mayors, county executives
-Wage freeze application to mayors, county executives
-Effects on teachers
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Salaries of government employees
-General Schedule [GS] employees
-Yearly review
-Changes in GS
-Comparability standard
-Application to military personnel
-Blue collar employee Wage Grade [WG] system
-Adaptation of system
-Postponement of wage increase
-Comparability principle
-Phase I
-Private sector restraint
-Administration policy
-Employers and employees
-Private
-State and local
-Federal
-Low number of employees
-Goal
-Control over budget outlays
-Effects on fiscal and monetary policy
-Lack of controls
-Success
-Federal employees compared with private industry
-Government employees rights
-Strike job actions
-Increases
-Building trades
-State and local levels
-Number of employees
-New York City
-Wage demands
-Effects on cost of living
-The United States
-Albert and Boggs
-October announcement date for further action
-Tripartite board
-Voluntary controls
-Government controls
-Labor and management representatives
-Government employees and teachers
-Discrimination
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Representation of government
-Cost of Living Council
-Industrial labor spokesperson
-Inequities
-Representation of state and local governments
-Teachers, state and local employees
-Stein
-Views of teachers
-Representation by the American Federation of Labor-
Congress of Industrial Organizations [AFL-CIO]
-Relations with government employees
-Unrepresented, unorganized employees
-Management
-Small groups
-Farmers
-Government control
-Freeze or other type of control
-Price system
-Farm organization
-Black market
-Beef prices
-Hog prices
-Farm area representation
-Nationwide distribution
-Miller
-New York State
-Californians
-Communications with agricultural economic sector
-Effect of agricultural surcharge
-Effect on foreign countries
-US favorable balance with agricultural exports
-Long term developments
-Budget
-International monetary action
-Long term solutions
-International monetary crisis
-Unnamed New York banker
-Gold
-Short term solutions
-Recurring issues
-Connally
-Effects on competitors and the United States
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Adjustments
-Revaluation of currency
-Trade barriers
-Non-tariff barriers
-Europe and Asia
-Japan
-US role in the world
-US costs of defending the free world
-Surcharge
-Permanent solution option
-US products and investments
-Balance of payment
-International crisis
-Agriculture as beneficiary
-Revaluation of currency
-Competitiveness of US products
-Europe and Japan
-Balance of payments
-Short term view
-Connally
-Negotiations
-View of the world


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International economics

[To listen to the segment (2m20s) declassified on 02/28/2002, please refer to RC# E-556.]

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-Legislation
-Phase II
-Congressional action
-Economic Stabilization Act
-Legislative authority
-Arthur F. Burns
-Presidential power
-Guidelines
-Bipartisan action
 8

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Congressional action
-Comparison with World War II-era economic freeze
-Experience in Congress
-Inflation
-Equal law
-Equitable action
-Interest rate rise
-Price rise
-Wage rise
-Cooperation with the President
-Congress
-Effects of war and patriotic fervor
-Peacetime efforts
-Wages, prices
-Dangers of currency inflation
-Post-World War I example in Germany
-France
-Interest rates
-Shultz
-Dividend rates
-Excess profits
-Business bonuses
-Interest rate decline
-Meeting with Proxmire
-Current status
-Relation to wage-price action
-Housing
-Mortgage interest rates
-Consumer credit
-Borrowers
-Bankers
-Effect of ceiling in interest
-Loans
-Collateral
-Effects of forced low interest rates
-1932 comparison
-President Herbert C. Hoover
-Reconstruction Finance Corporation legislation
-Banks, railroads, insurance companies
-Loans
-Needed investment
-Views of economists
 9

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Excess profits tax
-Limit on profits
-Effectiveness of Phase II
-Business, labor, governors, mayors, agricultural interests
-Meetings with the President
-Profits question
-Discipline on costs
-Unemployment
-Industrial expansion
-5 million unemployment
-Industrial capacity
-Industrial economic stimulation
-Tax cut
-Social Security tax
-Welfare reform
-Profit freeze
-Wage increase
-Relation to productivity
-Price decrease
-Profit ceiling
-Profits as residue
-Phase II’s effects on gross profits
-Control of net profits
-Increased wages
-Excess profits control
-Labor
-Increased wages
-Excess profits
-Net profit basis
-Growth profit control
-Wage-price control
-Management ingenuity
-Mansfield
-Profits
-Dividends
-Profits

-New capital investment
-Creation of new jobs
-Expansion, profits
-Percentage of Federal government dollar
-Welfare reform
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Revenue sharing
-Economy’s status in relation to full capacity
-Increase capacity
-Investment tax credit
-Job development credit
-Depreciation allowance
-John F. Kennedy’s request for excess profit tax
-Investment tax credit
-US economy
-Tax revenue
-1961
-US economic capacity
-Less than 1971
-President Kennedy’s economic advisors
-US plant capacity
-Accelerated depreciation
-Efficiency
-Competition in world market
-Short range plans
-US industrial plant
-Comparisons
-Japan and Germany
-Steel plant locations [Japan?]
-Coal unloading
-Cleanliness of Japanese plant
-Effects of World War II
-US industries
-Germany’s and Japan’s new industry
-Governments
-Ludwig Erhard
-Stimulating plans for plant development
-Investments for world competition
-Creation of more jobs for the US
-Tax incentives
-Effects on business, general public
-White House business contacts
-Investment tax credit
-Job development credit
-Productivity Council
-Agriculture
-Productivity
-Modernizing plants
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Small business
-Modernizing workers
-Power
-Wartime
-No strike pledge from labor
-Local productivity council
-Workplace issues
-Absenteeism
-Alcoholism
-Rebuilding
-Labor
-Interest rates
-Causes
-Bankers
-Phase I
-Political effect
-Reason for 90-day freeze
-Duration
-The President’s voluntary program
-Competitors
-Wage freeze
-Options
-Support for the President
-Recommendations for subsequent legislation
-Announcement of Phase II
-Effect of politics
-Congressional leaders
-Mansfield
-Albert
-Ford
-Freeze announcement
-Timing
-International monetary issue
-Prior consultation
-Phase II announcement
-Cooperation of group
-April 30 deadline for law
-Duration of Phase II
-Extension of deadline
-Sparkman
-Ford and Albert
-Program need for legislation
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NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. 10/08)



-Revenue sharing
-Bills relating to controls
-Support for the President
-Byrd
-Legislation
-New legislation

Gifts

[General conversation/Unintelligible]

[General conversation/Unintelligible]

The President, et al. left at 4:24 pm