Date: March 3, 1973

Time: Unknown between 10:08 am and 11:50 am

Location: Oval Office

The President met with George P. Shultz.

Press conference

Paul A. Volcker

-Location

-Work on negotiations

-Meeting with President

-Participation in meeting

Arthur F. Burns, Roy L. Ash, Herbert L. Stein, and Paul A. Volcker entered at 10:08 am.

Treasury department

-British pound

-Dollar

Volcker

-Praise for work

US dollar

-Discussion

-Format

-Memorandum

-Stein

Meeting

-Council of Economic Advisors [CEA]

-Ezra Solomon

-Wives of officials

Business confidence

-Sense of anxiety

-Inflation

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-Rise

-Interest rates

-Rise

-International money markets

-Slowdown of growth

-Deflationary pressures

Inflation

-Phase III [voluntary wage and price controls]

-Food prices

-Devaluation

An unknown man entered at an unknown time after 10:08 am.

Refreshment

The unknown man left at an unknown time before 11:50 am.

Inflation

-Monetary supply

-Budget

-Balance

Burns’s statement

-Joint Economic Committee

Interest rates

-Question at press conference

-President’s answer

-Explanation of money supply

-Over inflation

-Economic growth

-Compared to fiscal year 1968, 1969

-Burns’s testimony

-Credit crunch

-Fear on Wall Street

-Federal Reserve

-Psychology of concern

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Inflation

-Phase III

-Supply and demand

-Rates

-Moderation

-Food prices

-Reasons for confidence

-Food prices

-Problems

-Cheese

-Memorandum

-Tariff Commission

-Letter

-Investigation

-Milk producers

-Influence on Wilbur D. Mills

-Mills

-Telephone call to President

-Dealing with administration

-Patrick J. Lucey

-Governor of Wisconsin

-Cheese

-Political problems

-Mills

-Talk with President

Interest rates

-Increases

-Continuation

-Dangers

-Overexpansion, recession

International monetary markets

-Sources of instability

-Domestic implications

-Avoidance of adverse consequences

-David M. Kennedy

-Compared to Burns

-Currency circulation

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-Investment [?]

-Future structure

Monetary policy

-Future expansion, slowdown

-New York

-Inventories

-Manufacturing, finished goods

-January 1973

-Demand

-Accumulation

-New business orders

-Slowdowns

-Dangers

-Shortfalls in money supply

-Unemployment

Administration’s policy

-Flexibility

-Fiscal policy

-Burns’s proposal

-Investment credit

Economy

-Compared with mid-1960’s

-Declining unemployment, rising inflation

-Money supply

-Inflation

-Tax reductions [1965]

-Personal and corporate income taxes

-Excise taxes

-Increased government spending

-“Great Society programs

-Expansionary money supply

-Vietnam War

-Inflation [1963]

-Raw materials

-Wholesale prices

-Overstimulation

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-Effects

-Budget deficits

-Current Economic situation

-Full employment

-Fiscal, monetary policy

-Moderation

Taxes

-Investment tax credit

-Power of presidency

-Role of Congress

-Problems

-Responsibility

-Actions on President’s proposals

-Modifications in President’s proposals

-Problems for buyers

-Speculation

-Delays until Congress acts

-Destabilization potential

Shultz

-Testimony before Congress

-Date

Tax rates

-Flexibility

-Personal income

-Congress procedures

-Presidential requests on tax changes

-Fast track

-Rates percentiles

-Requests to Congress

-Procedure

Ronald L. Ziegler entered at 10:32 am.

President’s conversation with Peter J. Brennan

-Accident

-Visit to site

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-Safety regulations

-Injuries, deaths

-Building collapse

Brennan

-Visit to high-rise apartment collapse

-Construction background

Ziegler left at 10:35 am.

Fiscal policy

-Investment tax credit

-Application

Credit

-Uncertainty

-Attacks by labor, liberals

-Administration’s position

-Slowdown of investment

-Increased taxes

Federal Reserve study

-Congressional request

-Housing market

-Instability, fluctuations

-Reasons for study

-Method of stabilization

-Construction

-Proposals

-Economic stabilization

-Release of funds

-Future problems in housing industry

Investment tax credit

-Political sensitivity

-Flexibility

-Economic stimulus

-Restraint

-Housing industry

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-Fiscal policy

-Tax increases

-Criticism of William Proxmire

-Economic expansion

-Fiscal policy

-Tax credit compared with increased social services

-Ceiling on credit to large corporations

-Job creation

-Implementation

-Opportune time

Fiscal, monetary policy

-Effects

-1972 compared to 1970

-Need for expansion in 1974

-President’s previous experience

-Overexpansion in 1969

-Budget

-Federal Reserve

-Credit supply reduction

-Mild recession

-Stein’s speech

-Compared to 1960

-Economy

-1969

-Unemployment

-Decline

-Budget measures

-Money supply

-William McChesney Martin, Jr.

-Restrictions

-Federal Reserve

-Pressure from Wall Street, international monetary situation

-Martin

-1954, 1958, 1960, 1970 recessions

-1972 economy

-Anticipation for 1974

-Credit supply reduction

-Present dangers

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-Federal Reserve

-Need for restrictions

-Concern about economic growth

-Bankers

-Profits from high interest rates

US economy

-Higher prime interest rate

-Bankers’ complaints

-Corporate profits

-Published figures compared to unpublished figures

-Federal Reserve profits

-Profits of subsidiaries of American corporations abroad

-Level of domestic, nonfinancial business

-Manufacturing, mining, construction trade

-1972 compared to 1966

-Relation with Gross National Product [GNP] growth

-Commercial banks

-Growth in profits 1972 compared to 1966

-Source of profits in 1972, 1971

-Foreign investments

-Corporate profits

-Low level

-Problems

-Investment

-Productivity

-Technology

-International competitiveness

-Exportation of quality capital

-Report by CEA

-Stein

-Necessity for reinvestment

-Long-term economic strength, prosperity

-Investment in US

-Foreign investment

-Encouragement

-Further discussion

-Cabinet meeting

-Secretaries of Commerce, Labor

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-Working paper

-Danger of over optimism

-Tumor metaphor

Long-term planning and implementation

-Foreign policy

-People’s Republic of China [PRC]

-Background of initiative

-US-Soviet Union relations

-Economy

-Budget for fiscal year 1974-1975

-Productivity

-Investment tax credit

Quadriad’s report

-Volcker

-Letter to Willy Brandt

Exchange rates change

-Realignment

-Devaluation

-Psychological impact

-Speculation

-Lack of confidence

-Administration’s responsibility

-Treasury Department, Federal Reserve’s response

-Lower discount lending rates

-Public statements

-Investors’ responses

-Currency speculation

-Swiss Franc, German Mark, gold

Fixed compared to floating currency regime

-Europe

-Fixed and floating exchange rates

-Floating regime

-Uncertainty

-President’s letter to Brandt

-Europe

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-Movement toward floating regime

-New trend

-Reluctance

-Floating regime

-Market reaction to change

-Weakness

-Speculation

-Fluctuation in exchange rates

-Domestic confidence

-Leadership

-Monetary reform

-Fluidity of situation

-Bolstering of US dollar

-Fixed exchange rate

-Possible future

-Problems

-Commitment to chosen policy

-President’s poker metaphor

-Fixed exchange rate regime

-US purchase of West German Marks

-Borrowing

-Exchange rate change

-Risk

-Guarantees

-West Germany’s position on floating regime

-Willy Brandt’s meeting with Edward R. G. Heath

-Statements

-Brandt’s letter to President

-Shultz’s conversation with Anthony P. L. Barber

-Joint floating of currency

-Heath

-Mark pegged to British pound

-Reluctance

-Europe’s stabilization

-Barber

-Meeting with European finance ministers

-Limited financial commitment to stabilization

-Impact of European float

-Limitations, difficulty

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European floating currency regime

-Two kinds

-Joint float

-Rigid exchange rates float against US dollar

-Individual float against US dollar

-Joint float

-Difficulty

-Disparity

-West Germany, France, Italy [?], Great Britain [?]

-European motives

-Unity

-Dollar reserves

Exchange rate system

-Changes since August 1971 exchange rate action

-Flexibility

-Floating of currencies

-Japan, Great Britain, Italy, Switzerland, Canada

-Pressure on others who don’t float

-Great Britain, Canada

-Effect on relations with US

-US exchange rate

-West German Mark

-Stabilization by intervention

-Small nations

-Europeans

-Inter-European trade

Compared to trade with US

-Importance

-Impact of joint float

-Stability

-US monetary policy

-Flexibility

-Support for joint float in Europe

-Problems at home

-Psychological, political, economic risks

-Joint float

-Impact if falls apart

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US intervention in currency exchange rate stabilization

-Recommendation

-Call from Alfred Hayes of New York Federal Reserve Bank

-West Germany

-Cooperation

-Attitude toward intervention

-Great Britain

-Support for floating exchange rates

-Heath

-France

-Support for fixed rates

-Japan

-Reaction

-New York bankers

-Preferences for fixed exchange rates

-West Germany

-Preferences

-Brandt

-US pressure

-Support

-Impact on international monetary situation

-Crisis

-Smithsonian Agreement

-Instability

-Foreign policy implications compared with domestic policy

-US leadership

-Recurrence of instability

-Pressures on US dollar convertibility

-Domestic situation

New international monetary system

-Breton Woods

-US leadership

-Flexibility, rules

-Maintenance of US exchange rate

-Condition

-Fixed compared to floating exchange rates

-Shultz

-Floating exchange rates

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-Burns

-US intervention

-Stabilization

-Speculators

-Risk

-Multinational declaration of rules

-Timing

Negotiations

-Foot dragging by other nations

-West Germany’s position

-US position

-Greater flexibility

-Transition to floating exchange rates

-Bubbles [?]

-US intervention

-Burns

-Long-term solution

-Europe

-Shultz

-Europe’s position

-France

-Europe’s independence

-US position

-Brandt

-Need for general rules

-Europe’s assumption

-US position at Paris meeting

-Non-intervention

-West Germany’s position

-US, France

-US Devaluation, pressure on Japan

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

BEGIN WITHDRAWN ITEM NO. 1

[National security]

[Duration: 8s]

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INTELLIGENCE

END WITHDRAWN ITEM NO. 1

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

-Europe’s view of US

-Source of monetary instability

-Unreliability

Monetary system

-Europe’s moves to reconstruct

-France

-US leadership

-Floating regime

-Smithsonian agreements

-Failure

-Europe’s reconstruction efforts

-US position

-Exchange rate

-Burns’s survey of economists

-Trends

-Inflationary pressures

-Economic downturn

-Ability to maintain exchange rate parity

-US intervention

-Necessity

-Prevention of further devaluation

-Method

-Borrowing from Treasury Department

-Benefits

-Dangers

-Devaluation

-Fixed exchange rate regime

-US leadership

-Europe’s position

-West Germany, Great Britain, France

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-Defense of parity

-Compared to flexible exchange regime

-US ability to maintain

-Massive US intervention

-Agreement on monetary reform

-Massive US intervention

-Risks

-West Germany

-Discussions with Europeans

US political relations with Europe

-Increase in contacts

-North Atlantic Treaty Organization [NATO]

-Mutual and Balanced Force Reductions [MBFR]

-European security conference

-Watershed period

-West Germany

-France

-Algeria, Vietnam

-Great Britain

-Europe’s domestic politics

-Left-wing pressures

-West Germany

-France

-Italy

-Great Britain

-Labour government

-Heath

-US relations with Union of Soviet Socialist Republics [USSR]

-Europe’s reaction

-Heath

-Discussions about US policies

-President’s trip to People’s Republic of China [PRC]

-Strategic arms talks

-Middle East

-British power

-European Union

-Europe’s relations with US

-Significance of US policy

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-Tendency to turn inward, isolationist

-Europe’s leaders

-Brandt

-Italy

-Administration’s goals in Europe

-European military strength

-Need for closer ties

-Preventing socialist, communist politics

-Economic partnership

US economic policies

-Review with Henry A. Kissinger

-Options

-President’s decisions

-Shultz’s viewpoint

-Speech at International Monetary Fund [IMF]

-Role of US

-Political implications

-President’s responsibilities

-Europe’s position

-France

US intervention in international monetary situation

-West Germany

-Great Britain

-France

-Brandt’s letter

-Answer

-West German finance minister’s meeting

Kissinger meeting with Quadriad

-Scheduling

-President

US intervention

-Other actions

-Eurodollar market, Treasury bonds

-Tightening

-Speculation

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-Controls

Kissinger meeting with Quadriad

The President talked with Kissinger at an unknown time between 10:35 am and 11:50 am.

Discussion of major monetary matters

-Meeting of Quadriad

-Letter to Brandt

-Meeting with President and Shultz

[End of telephone conversation]

Letter to Brandt

An unknown person entered at an unknown time after 10:35 am.

President’s meeting with Jack L. Dreyfus, Sr.

The unknown person left at an unknown time before 11:50 am.

Burns’s work

President’s message on welfare

-Need for reform

Shultz, et al., left at 11:50 am.

-Location

Swearing-in group for G. Bradford Cook

-Arrival

-Meeting with President

-Biography

Bull left at an unknown time before 12:01 pm.