Wednesday, May 12, 1971 - 9:51am - 10:12am
Richard Nixon, George Shultz, John Connally
White House Telephone

Operator: Mr. President, I have [Office of Management and Budget Director] Mr. [George P.] Shultz.

President Nixon: Yeah, yeah. Hello.

George Shultz: Good morning, Mr. President.

President Nixon: Hi, George. How are you.

Shultz: OK.

President Nixon: I was wondering whether you had given more thought to the possible stepping up the date of that thing due to the fact that it may leak before Friday and it won't be put out properly.

Shultz: Well, yes I have. I've--”

President Nixon: I don't want it to appear that--”I don't want us to juggle a thing, because we, I mean, we're not ones that, you know, our whole policy has been never to put anything out in advance or anything of that sort of thing. We want to be honest about it. But if they know the figures on Tuesday, they shouldn't be putting it out on Friday in my opinion.

Shultz: Yeah. Well, Friday is their scheduled date.

President Nixon: I see. Well . . .

Shultz: Now, I did call yesterday back through the statistical channels using this fellow, [OMB Chief Statistician] Jule Shiskin, who they all respect.

President Nixon: Yeah.

Shultz: And had him reinforce our policy that we don't sit on numbers.

President Nixon: Yeah.

Shultz: And that as soon as they . . . that then--”his instructions to them at this point are that they should get their material ready as fast as they can, and when they've got it ready, release it.

President Nixon: Right. Right.

Shultz: But let us know in advance what they're going to do.

President Nixon: Sure. Good.

Shultz: So it may be that they'll do it on Thursday.

President Nixon: Good. Good.

Shultz: See what we've got was--”and you remember, that was about 4:30 or so in the afternoon.

President Nixon: Yeah.

Shultz: Jule was the first person they called the minute they got that end number.

President Nixon: Yeah.

Shultz: And so I just brought it down to you and--”

President Nixon: Right.

Shultz: They now have to get all the component parts of this all set.

President Nixon: That number still will stand, won't it?

Shultz: Oh yeah. Sure.

President Nixon: Good. That's it. Good, good. Yeah.

Shultz: And get their release material ready so that--”people will want to know what was revised, what was revised up, what was revised down. Incidentally, inventories were revised down by quite a substantial amount, which is a very bullish thing in the sense that--”

President Nixon: Because they've got to now fill up.

Shultz: They've got to fill up. So--”

President Nixon: And what about the profits that [White House Chief of Staff H.R.] Bob Haldeman was telling me this morning?

Shultz: Profits went up by, on an annual rate basis, by 10 billion [dollars] from the fourth quarter. Now a lot of that is GM of course.

President Nixon: I see.

Shultz: GM being so huge. But it's still--”

President Nixon: Not bad.

Shultz: --”grounds for business to be feeling pretty good.

President Nixon: Now, one other thing that you might talk to [speechwriter] Bill Safire about: sometimes on a thing like this, the way to get a double bounce on it is to get an inspired leak on it. I'm not sure. I'm not sure it should be done that way. But why don't you just talk to Bill, because--”who's quite sophisticated in this area. Don't tell him to leak anything [laughs], but chat with him and the two of you decide to do anything you want. I don't want to know what you do. See what I mean?

Shultz: All right, my--”

President Nixon: You're feeling is to just let it come it's normal way. Is it?

Shultz: Well, I think we should have--”

President Nixon: Yeah. Probably so.

Shultz: We should have it come it's normal way, and we should have some comment on it. But we shouldn't kind of hail it as a great thing, but rather have the attitude that--”

President Nixon: Low key.

Shultz: --”--well, this is sort of what we expected.--

President Nixon: I agree, I agree. I couldn't agree more.

Shultz: --œSo we're not surprised. You guys are all surprised, but we're not surprised.--

President Nixon: Let me say . . . let me say what I was thinking about Bill is not--”and I'm sort of getting my thoughts in order--”not in terms of what we say. I don't think we ought to say a hell of a lot. My point is, though, but I would like this story to get a good play, see? I want the facts to get a good play and then let them say something about it. See my point?

Shultz: Yeah.

President Nixon: That if we say--”I couldn't agree more--”if we say a lot, they'll say, --œThe lady doth protest too much-- again. And I'd just let the story play. Now, they're all squealing around about that we had expected--”I was looking at a story here a couple weeks ago--”30 billion [dollars] or disappointed that it wasn't 30 billion. OK, well now it is. Right?

Shultz: Right.

President Nixon: 30.8 [billion dollars], so . . .

Shultz: It's going to be higher before they're through. I'm just sure of it.

President Nixon: Yeah. Right, right, right, right. OK, well, I think it's well. Just let it come out. And I imagine a few of the honest economists have just got to pick this figure up. Don't you think they'll pay some attention to it, or will they?

Shultz: Well, we should, sure. We should have somebody go out, I should think, with [White House Press Secretary] Ron Ziegler.

President Nixon: Yeah.

Shultz: And explain it. Because it's a big revision, $2½ billion. And people wonder, how did that come about? Where is the impact and so on? And somebody should answer that.

President Nixon: Good. Right, right, right. Good.

Shultz: OK.

President Nixon: Fine, George. Bye.

Original tape courtesy of the Nixon Library. This transcript is a working draft. Please let us know if you find important errors.