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This file contains:
Agreement of Trust by and between Richard M. Nixon, as Settlor and H.R. Haldeman, as Trustee, with attachments. 39 pages. [Financial Records], 8/14/1972
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WHSF: Returned, 9-5
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This file contains:
Agreement of Trust by and between Richard M. Nixon, as Settlor and H.R. Haldeman, as Trustee, with attachments. 39 pages. [Financial Records], 8/14/1972
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Richard Nixon Presidential Library
White House Special Files Collection
Folder List
Box Number
Folder Number
Document Date
Document Type
Document Description
9
5
08/14/1972
Financial Records
Agreement of Trust by and between Richard
M. Nixon, as Settlor and H.R. Haldeman, as
Trustee, with attachments. 39 pages.
Wednesday, June 17, 2009
Page 1 of 1
-
Copy No. 6
of 8 copies
AGREEMENT OF TRUST
by and between
RICHARD M. NIXON,
as Settlor
and
H. R. HALDEMAN,
as Trustee
Dated: August 14, 1972
MUDGE ROSE GUTHRIE & ALEXANDER
20 BROAD STREET, NEW YORK, NEW YORK
THIS AGREEMENT OF TRUST made the
day
of
august,
1972 by RICHARD M. NIXON, as Settlor and H. R. HALDEMAN, as
Trustee,
WHEREAS, RICHARD M. NIXON is presently the 37th
President of the United States of America and formerly acted
in the service of the United States of America as the 36th
Vice President, as a member of the United States Senate and
House of Representatives and as a member of the Armed Forces
of the United States; and
WHEREAS, by virtue of RICHARD M. NIXON's service to
the United States of America, there exist numerous books,
documents, papers, letters, correspondence, memoranda, pamph-
lets, pictures, photographs, plats, maps, films, television
tape recordings, motion pictures, sound recordings, both on
record and on tape, and other similar materials, as well as
numerous items which are commonly referred to as memorabilia,
including, without limitation, awards, plaques, medals, member-
ship or achievement certificates, gavels, symbolic currency,
keys and figurines, commemorative and personal photographs,
flags, banners, works of art, including sculptures, paintings,
etchings and drawings, books, both inscribed by the author or
donor and uninscribed, religious items, jewelry and clothing
which relate to the events of the official or personal life of
2
RICHARD M. NIXON or of his wife, PATRICIA R. NIXON, and have
historical or commemorative significance, all of which items
are hereinafter referred to collectively as "Materials"; and
WHEREAS, the Settlor desires, by this Agreement, to
create a trust, to be known as "The Irrevocable Literary Trust,"
the principal of which is to consist of Materials and cash,
securities or other property contributed by the Settlor, by the
Settlor's wife, PATRICIA R. NIXON, and possibly by others, and
the sole purpose of which is to provide a means for utilizing
such Materials and cash, securities or other property exclu-
sively for charitable, scientific, literary, educational or
public purposes, as herein provided, and generally in a manner
which will insure that contributions made to the trust created
under this Agreement, either inter vivos or by testamentary
disposition will, as appropriate, be deductible under Sections
170, 2055 and 2522 of the Internal Revenue Code of 1954, as
amended; and
WHEREAS, the Settlor desires to provide for the modi-
fication of the trust created under this Agreement as and when
modification may be deemed advisable in the interest of estab-
lishing or preserving the deductibility of contributions to said
trust under the Internal Revenue Code of 1954, as amended;
NOW, THEREFORE, THIS AGREEMENT OF TRUST WITNESSETH:
3
That, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable con-
siderations, the receipt of which is hereby acknowledged, the
Settlor has granted, conveyed, assigned, transferred, set over
and delivered, and by these presents does hereby grant, convey,
assign, transfer, set over and deliver unto the Trustee (which
term shall, whenever it is used in this Agreement, be deemed
to mean the original Trustee named above and any additional or
successor Trustee or Trustees at any time acting hereunder,
unless by express provision or necessary implication another
meaning is clearly intended), all of his right, title and in-
terest in and to the Materials listed and described in Schedule
A, annexed hereto and made a part hereof, the receipt of which
Materials the Trustee does hereby acknowledge, to have and to
hold the same, and any additional Materials and any cash, securi-
ties or other property as may hereafter be transferred and de-
livered to the Trustee in accordance with the terms of this
Agreement of Trust, in trust, nevertheless, for the following
uses and purposes, and subject to the terms, conditions, powers
and agreements hereinafter set forth:
FIRST: (A) The Trustee shall, through the facili-
ties of any public or private non-profit entity or entities or
institution or institutions, whether located within or outside
of the State of California, contributions to which are deducti-
4
ble under the provisions of Sections 170, 2055 and 2522 of the
Internal Revenue Code of 1954, as amended, including, without
limitation, any Presidential Library bearing said RICHARD M.
NIXON's name, or any facility held in the name of the United
States of America, make all or substantially all of the Materials
subject to the terms of this Agreement of Trust available for
public viewing, study or research, either by loan to or other
custodial arrangement with, such entity or entities or institu-
tion or institutions and subject to such restrictions, terms,
conditions or obligations relating to the use, care, preserva-
tion and maintenance of such Materials as the Trustee deems
necessary or advisable. The Trustee shall have the sole and
absolute power to make arrangements for the public viewing,
study or research of the Materials held hereunder and to impose
restrictions, terms, conditions or obligations relating to the
use, care, preservation and maintenance of such Materials, and
the selection by the Trustee of a particular entity or entities
or institution or institutions, as aforesaid, shall not be per-
manent or binding in any way, with the said Trustee also to have
the power at any time and from time to time to cause any Materials
being exhibited or held by any particular entity or entities or
institution or institutions to be removed therefrom and exhibited
by or deposited with another entity or entities or institution or
institutions.
(B) As to any property other than Materials
5
which is held as part of the principal of the trust created
hereunder, the Trustee shall hold and manage the same and shall
invest and reinvest the same and shall collect the rents, if any,
interest, dividends and other income therefrom and, after the
payment of all lawful charges therefrom (including the commis-
sions and/or compensation of the Trustee or Trustees at any time
acting hereunder and all expenses of administration of the trust),
shall pay over the balance of the net income therefrom, if any,
either to the United States of America, by transfer exclusively
for public purposes, either to the Administrator of General
Services to be used for any Presidential Library bearing said
RICHARD M. NIXON's name, subject, however, to those restrictions,
if any, imposed by the Trustee and agreeable to the Administrator
of General Services as to their use, or otherwise, or to one or
more corporations or trusts, selected by the Trustee, which meets
the description which appears in Sections 170 (c) (2), 2055 (a) (2)
and (3) and 2522 (a) (2) of the Internal Revenue Code of 1954, as
amended.
(C) The Trustee is authorized and empowered,
at any time and from time to time during the term of the trust
created under this Agreement, to make a permanent transfer of
ownership of some or all of the Materials or of any other property
held hereunder, subject to the terms of this Agreement (and in
6
the case of a transfer of all of the Materials and of the other
property held hereunder, to terminate the trust created under
this Agreement) either to the United States of America, by
transfer exclusively for public purposes, either to the Adminis-
trator of General Services for deposit in any Presidential
Library bearing said RICHARD M. NIXON's name, subject, however,
to those restrictions, if any, imposed by the Trustee and agree-
able to the Administrator of General Services as to their use,
or otherwise, or to one or more corporations or trusts, selected
by the Trustee, which meet the description which appears in
Sections 170 (c) (2), 2055 (a) (2) and (3) and 2522 (a) (2) of the
Internal Revenue Code of 1954, as amended.
(D) The Trustee shall, at all times, cause
the Materials and all other property and the income therofrom
subject to the terms of this Agreement of Trust to be held,
utilized and, if necessary, distributed, in a manner so as not
to subject the trust created hereunder to the tax on undistributed
income imposed by Section 4942 of the Internal Revenue Code of
1954, as amended, and in no event shall the Materials or any other
property and the income therefrom subject to the terms of this
Agreement of Trust be held or used for profit or to carry on
propaganda or to influence or attempt to influence legislation or
in connection with any political campaign on behalf of any candi-
date for public office. In addition, noither the Trustee, while
7
acting as Trustee, nor the trust created under this Agreement
shall engage in any act of self-dealing as defined in Section
4941 (d) of the Internal Revenue Code of 1954, as amended, or
retain any excess business holdings as defined in Section
4943 (c) of the Internal Revenue Code of 1954, as amended, or
make any investments in such manner as to incur tax liability
under Section 4944 of the Internal Revenue Code of 1954, as
amended, or make any taxable expenditures as defined in Section
4945 (d) of the Internal Revenue Code of 1954, as amended.
SECOND: Either the Settlor or the Trustee shall have
the power, exercisable at any time or from time to time during
the term of the trust created under this Agreement, to amend
this Agreement in any manner reasonably calculated to ensure the
deductibility of contributions to said trust under Sections 170,
2055 and 2522 of the Internal Revenue Code of 1954, as amended,
provided that no such amendment may authorize the Settlor or the
Trustee to divert any of the assets held in trust hereunder from
the charitable, scientific, literary, educational or public pur-
poses for which such trust was created.
THIRD: The Settlor and the Settlor's wife, PATRICIA
R. NIXON, or either of them, shall have the right at any time
and from time to time during the continued existence of the trust
8
created hereunder, to contribute Materials or cash, securities
and/or other property to the trust created under this Agreement
either by deed, assignment or other conveyance executed during
their, his or her lifetimes, and/or by devise or bequest by his
or her Last Will and Testament, or any Codicil thereto, duly
admitted to probate or duly established. The Trustee shall
also accept additions of Materials or cash, securities or other
property to the principal of the trust created hereunder made in
accordance with the terms and provisions of that certain Agree-
ment of Trust executed the same day as this Agreement of Trust
by and between RICHARD M. NIXON and PATRICIA R. NIXON, as Set-
tlors and RICHARD M. NIXON, as Trustee, pursuant to which a
trust, referred to in that Agreement of Trust as The Family and
Literary Properties Trust, was created. Any other person or
persons may, with the consent of the Trustee, at any time and
from time to time during the continued existence of the trust
created hereunder, similarly contribute Materials or cash,
securities or other property to the trust created under this
Agreement. Any such Materials or cash, securities or other prop-
erty thus contributed or added to the trust created under this
Agreement shall be held by the Trustee subject to and in accord-
ance with all of the terms and conditions of this Agreement of
Trust.
FOURTH: Unless otherwise expressly provided in this
9
Agreement, the Trustee at any time acting hereunder, including
any additional or successor Trustee or Trustees appointed under
the provisions hereof, in addition to any power conferred upon
the Trustee under any other provision of this Agreement of Trust
and in addition to general power or authority which such Trustee
would otherwise possess by law, is hereby given full power and
authority:
(A) As to any property other than Materials
at any time held as part of the principal of the trust created
hereunder:
(1) To sell, either by private con-
tract or at public auction, grant options
in respect of, exchange, mortgage or lease
for any term of years, or otherwise dispose
of any or all of the trust funds, whether
real or personal, of whatsoever nature or
kind and wheresoever the same may be situ-
ated, for such consideration, whether for
cash or upon credit or partly for cash and
partly upon credit, and upon such other
terms and conditions as deemed proper, and
to make, execute, acknowledge and deliver
any and all deeds, leases, assignments,
mortgages or other instruments, and to do
all acts deemed necessary and proper to
effectuate or in connection with any such
disposition of the trust funds; and in no
case shall any purchaser of property from
the Trustee or other persons dealing with
the Trustee be bound to see to the appli-
cation of the purchase money or other prop-
erty or fund under any of the provisions
of this Agreement;
(2) To manage, operate, repair, improve,
mortgage or lease (whether for a period longer
10
or shorter than ten years and whether expiring
before or after the termination of any trust
created hereunder) any real estate, whether
improved or unimproved, forming a part of the
trust funds;
(3) To adjust, compromise, compound and
settle any and all claims, debts or obliga-
tions due to or from the trust funds to such
extent and upon such terms and conditions as
the Trustee may deem advisable without first
bringing against the claimant or compelling the
claimant to bring any action at law, suit in
equity, or any other legal proceeding to es-
tablish any such claims, and to reduce the rate
of interest on, to extend or otherwise modify,
or to foreclose upon default or otherwise en-
force or to abstain from the enforcement of any
such right, claim, debt or obligation, and
to abandon, if deemed advisable, any property,
real or personal, constituting a part of the
trust funds; to execute and deliver to the
federal or any state or other taxing. authori-
ties instruments waiving any statutory or
other time limitations as to any tax matters
in any way relating to the trust funds; and to
execute all agreements, deeds, releases or
other documents necessary or proper in connec-
tion with any adjustment, compromise, compound-
ing, settlement or waiver, and said Trustee
shall not be held responsible for any losses
which may occur to the trust funds by reason
thereof;
(4) To submit to final arbitration any
matter of difference with others;
(5) To borrow money upon the security of
the trust funds or any part thereof for any pur-
pose or purposes deemed necessary or proper for
the management thereof, including, but without
limitation, the purchase of securitics or other
property for the account of the trust; and
this power to borrew money shall include
the power to borrow from any, corporate Trus-
tee at any time acting hereunder, on terms
no less favorable as to security, interest or
11
other matters related to such borrowing, than
those made available by it to borrowers gen-
erally who or which have credit standing com-
parable to that of the said trust, and such cor-
porate Trustee shall in no event be penalized
in any way on account of such borrowing,
whether by reason of self-dealing or otherwise;
and it is hereby provided that the said Trus-
tee shall, notwithstanding any rule of law
to the contrary, have the power to maintain a
margin account or accounts and to make such
pledges of and other undertakings with respect
to assets of the trust as shall in the judgment
of the Trustee be advisable in connection
with the establishment and maintenance of such
account or accounts;
(6) To continue the trust funds invested in
such stocks, bonds or other securities and prop-
crty delivered to the Trustee upon the execution
of this Agreement or hereafter acquired from any
additions to the trust funds, without any require-
ment for diversification and including the carry-
ing on of any business, joint venture or enter-
prise in which the funds represented by such
stocks, bonds and other securities or property
may be invested at the time the same are received;
(7) To invest and reinvest all or any
part of the trust funds in such manner and
in such securities and other property, real
or personal, as deemed advisable, without
being limited in such investments to that
property or those securities which otherwise
would alone be lawful for trustees' invest-
ments under any laws applicable thereto, and
without being required to diversify such
investments in any manner whatsoever; with-
out in any way limiting the power of invest-
ment and reinvestment herein conferred upon
the Trustee, the Settlors direct that the
foregoing provisions should be construed to
include a power to invest in securities of any
kind of corporation commonly known as an in-
vestment trust company or mutual fund;
(8) To vote in person or by proxy any
12
shares of stock in any corporation constitut-
ing a part of the trust funds at any meeting
of the stockholders of such corporation, to
deposit any stocks, bonds or other securities
with any committee under any plan of reorgan-
ization, recapitalization or readjustment of
any corporation, and generally, as to any
shares of stock, bonds, scrip or other secur-
ities which may at any time form a part of
the trust funds, to enjoy the same powers under
ordinary conditions and also in the case of a
merger, lease, consolidation or reorganization,
readjustment or recapitalization, sale of assets
or other corporate action as might be exercised
by an individual owner who is under no trust
obligation, including the acceptance and holding
thereafter of any securities which may be issued
as a result of such corporate action;
(9) To vote for an individual Trustee, or
for any officer or employee of a corporate Trus-
tee, or for either of them to be directors or a
director, officers or an officer, of any corpora-
tion in which the trust funds may be interested,
or to be members or a member of any committee
related in any way to such corporation, and any
Trustee or officer or employee of any corporate
Trustee may serve as such directors or director,
officers or officer, committee members or com-
mittee member, and receive proper remuneration
for such services, and may exercise free and
untrammelled discretion with respect to all
matters concerning the affairs of such corpora-
tion, and no Trustee or officer or employee of a
corporate Trustee so acting as a director or
officer or as a member of such committee shall
be accountable for his acts as such to any person
interested in the trust funds;
(10) To accept or substitute any stocks,
bonds, scrip or other securities in exchange for
any securities which may at any time constitute
any part of the trust funds, and to exercise any
powers incidental to any such acceptance or sub-
stitution; to pay all assessments, subscriptions
or other sums of money for the protection of
13
the Trustee's interests as holder of any stocks,
bonds or other securities, and to exercise any
option contained in any stocks, bonds or other
securities for the conversion of the same
into other securities, and thereafter to
hold any securities thus received;
(11) To cause to be registered in the
name of the Trustee hereunder any securities
which may from time to time comprise the trust
funds, or to take and keep them unregistered,
and to retain them or any part thereof in such
condition that they will pass by delivery; and
to hold securities or other property in the
Trustee's own name or in the name of a nominee
without disclosing any fiduciary relationship;
(12) To pay out of principal or income any
and all claims or demands which properly may
become payable from time to time against the
trust funds, and the Trustee's allocation of
any such charges against principal or income
or partly against principal and partly against
income shall be final and conclusive' and binding
upon all persons interested in the trust funds,
and the Trustee's discretion in making the same
shall not be questioned;
(13) In case of securities taken or pur-
chased at a premium, not to be bound to set
apart any portion of the income as a sinking
fund to restore or absorb such premium, but
the same may be done if deemed desirable;
(14) With respect to any and all stocks
and bonds at any time delivered to the Trus-
tee by the Settlors to treat as income any
dividends (except liquidating dividends) de-
clared but not yet paid on any such stocks and
any and all interest accrued on any bonds, at
the time of delivery of such stocks, bonds or
other securities to the Trustee by the Settlors;
and during the term of administration of each
trust created hereunder, to treat as income any
and all cash dividends (whether of the kind
sometimes described as "ordinary dividends" or
14
"extra-ordinary dividends") except liquidating
dividends, and to treat as principal (a) all
liquidating dividends and (b) all distributions
made in the shares of the corporation making
the same, whether in the form of a stock split
or a stock dividend or otherwise, and (c) all
warrants, and (d) all dividends or distribu-
tions made in the stock of a corporation other
than the one declaring the same, and (e) any
and all distributions made other than from
ordinary income by any investment trust company,
mutual fund or real estate investment trust;
and in connection therewith, to determine, in
the Trustee's discretion, whether any cash
dividend is or is not a liquidating dividend;
and to retain or distribute all such dividends
accordingly as herein provided;
(15) To allocate between principal and
income any and all rents from leaseholds and
any dividends or other distributions in respect
of any stock of oil, gas, mining or lumber
companies, and any and all distributions in
respect of the kind of property ordinarily known
as a wasting investment, constituting a part of
the trust fund at any time, in such manner
that there shall be allocated to income only
ordinary income and there shall be allocated
to principal any amounts representing deprecia-
tion, depletion, reserve, or other adjustments
which are necessary or proper to insure the
preservation as principal of the capital in-
vested in such stock or property;
(16) To effect the division of the prin-
cipal of the trust funds or to distribute the
same either in kind or in money or partly in
kind and partly in money, and for the purpose
of such allotment the judgment of the Trustee
concerning the propriety thereof and the form
of such division or distribution and the rela-
tive values for the purpose OF such division or
distribution of the securities or the real or
personal property so allotted shall be binding
and conclusive on all persons interested under
this Agreement;
(17) To delegate the power and discretions,
15
or any of them, to any one or more of the other
Trustee, with further power to revoke any such
delegations, and further, to appoint from time
to time, in the Trustee's discretion, an agent
or agents for the purpose of performing any act
which the Trustee is authorized, empowered or
directed to do, whether or not such act may re-
quire discretion on the part of such agent or
agents, and the acts of any such duly appointed
agent or agents shall in all respects be as lawful
and binding upon the trusts as if performed by the
Trustee and the Trustee shall not be personally
liable to any beneficiary hereunder or to any
other person by reason of any act done or omitted
by the agent or agents so appointed, whether such
act required discretion on the part of such agent
or agents or involved a delegation of discretion
by the Trustee;
(18) To commingle the assets of all or
any of the foregoing trust funds the one with
the other so that any one of said trust funds
may consist in whole or in part of an undivided
share or shares in assets, the remaining un-
divided share or shares in which constitute the
whole or a part of any other trust fund, and
to substitute at any time and from time to time
any investment or asset constituting a part or
the whole of any trust fund for any investment
or asset constituting a part or the whole of
any other trust fund;
(19) So long as there shall be no corpo-
rate Trustee acting under this Agreement, to
employ or retain any bank, corporation or other
institution to act as custodian of the assets
of the trust created hereunder, and to permit
said bank, corporation or institution to hold
said assets in its name, or in the name of its
nominee, and to pay to said bank, corporation
and/or institution its charges for acting as
such custodian, and to charge the same against
principal or income as the Trustee in the Trus-
tee's discretion, shall determine, and the
Trustee shall be entitled to reimbursement for
the same and for such necessary and proper
16
charges and expenses as may be incurred in con-
nection therewith. Any such bank, corporation
or institution which acts as such custodian
shall not be liable or responsible in any way to
any person interested in the trust created under
this Agreement, for any act performed by it in
accordance with the instructions of the Trustee,
or of any of the Trustee's duly appointed agents;
and
(-20) Without in any-way- affecting-the
right of any Trustee to act as such fiduciary,
or to receive compensation for so acting, to
employ counsel, investment advisers, brokers,
accountants, clerks and agents, and any firm of
which any individual Trustee may be/a partner or
with which any individual Trustee may be associated
and any corporation of which any individual Trus-
tee may be a director, officer, stockholder,
ployee or in any way interested, may be so employed
by the Trustee for such purpose, and to pay to any
such Firm or corporation such fees, commissions,
compensation and/or remuneration for services
rendered from principal or income as the Trustee
may deem proper; and to purchase and/or sell For
the account of any trust under this Agreement,
any real and/or personal property, stocks,
bonds and other securities or property from,
to or through any firm or corporation acting as
a principal without regard to the fact that
such corporation is a Trustee or that an in-
dividual Trustee may be a partner of such firm
or may be associated with such firm, or may be
a director, officer, stockholder, employee. of
or in any way interested in such corporation,
and, in the case of any such sale or purchase,
to accept such sales price, in the case of a
sale, or to pay such purchase price, in the
case of a purchase, as the Trustee may deem
proper.
(B) As to any Materials at any time held as
part of the principal of the trust created herounder:
(1) To adjust, compromise, compound and
settle any and all claims or disputes relating
17
to any Materials held hereunder to such extent
and upon such terms and conditions as the Trustee
may deem advisable without first bringing against
the claimant or compelling the claimant to bring
any action at law, suit in equity, or any other
legal proceeding to establish any such claims,
to execute and deliver to the federal or any
state or other taxing authorities instruments
waiving any statutory or other time limitations
as to any tax matters in any way relating to any
Materials held hereunder and to execute all agree-
ments, deeds, releases or other documents neces-
sary or proper in connection with any adjustment,
compromise, compounding, settlement or waiver, and
said Trustee shall not be held responsible for any
losses which may occur to the trust created here-
under by reason thereof;
(2) To submit to final arbitration any mat-
ter of difference with others;
(3) To retain any Materials delivered to
the Trustee upon the execution of this Agreement
or hereafter acquired from any additions to the
trust created hereunder, without requirement for
making the same produce any income; and
(4) To delegate the power and discretions,
or any of them, to any other Trustee or Trustees,
with further power to revoke any such delegations,
and further, to appoint from time to time, in the
Trustee's discretion, an agent or agents for the
purpose of performing any act which the Trustee
is authorized, empowered or directed to do, whe-
ther or not such act may require discretion on
the part of such agent or agents, and the acts of
any such duly appointed agent or agents shall in
all respects be as lawful and binding upon the
trust created hereunder as if performed by the
Trustee and the Trustee shall not be personally
liable to any beneficiary hereunder or to any
other person by reason of any act done or omitted
by the agent or agents so appointed, whether such
act required discretion on the part of such agent
or agents or involved a delegation of discretion
by the Trustee.
17a
(C) As to any Materials and any
other property at any time held as part of the principal
of the trust created hereunder:
Without in any way affecting the
right of any Trustee to act as such fiduciary
or to receive compensation for so doing, to
employ counsel, investment advisors, brokers,
accountants, clerks, secretaries, assistants
and agents, and to pay from income and/or
principal reasonable compensation therefor.
18
FIFTH: A majority of the Trustees at any time act-
ing hereunder or, if there shall only be one Trustee then
acting hereunder, such sole Trustee, shall have the power at
any time and from time to time (i) to appoint an additional
or successor Trustee or additional or successor Trustees to
act hereunder, such appointment or appointments to take effect
immediately or upon the happening of any future event specified
in the instrument or instruments by which the same is or are
made, (ii) to remove any Trustee or Trustees at any time acting
hereunder, and (iii) to revoke any contingent appointment of
any additional or successor Trustee made in accordance with the
provisions of this Article FIFTH. RICHARD M. NIXON, regardless
of whether or not he may be acting as a Trustee hereunder, shall
have the power to remove any Trustee or Trustees at any time act-
ing hereunder, to revoke any contingent appointment of a succes-
sor or an additional Trustee made by a majority of the Trustees
or the sole Trustee acting hereunder, and, in his discretion,
to appoint a successor Trustee or Trustees to act in the
place and stead of the Trustee or Trustees so removed or whose
contingent appointment has been revoked, or an additional Trustee
or additional Trustees to act herounder. In no event shall
there ever be more than five Trustees acting hereunder at any
one time and, if three or more Trustees shall at any time be
19
acting hereunder, one of said Trustees may be designated, by
a majority vote of the then acting Trustees, as Chairman of
the Board of Trustees, said Chairman to have an equal vote
with the remaining Trustees but to have general administrative
control over the actions of the Trustees hereunder. Each ap-
pointment of an additional or successor Trustee hereunder, and
any revocation of a contingent appointment, shall be made by an
instrument in writing, bearing the signature of the person or
persons authorized to make such appointment or revocation of a
contingent appointment. Each additional or successor Trustee
so appointed shall accept his or her appointment by an instru-
ment in writing, wherein he or she agrees to perform all the
duties of said office and to be bound by all of the terms and
covenants of this Agreement of Trust. Each additional or suc-
cessor Trustee appointed pursuant to this Article FIFTH shall
have all of the rights, powers, privileges, duties, exemptions
and discretions conferred upon the original Trustee under any
of the provisions of this Agreement of Trust.
SIXTH: During RICHARD M. NIXON's life, the original
Trustee named in this Agreement: of Trust shall not be entitled
to receive any commissions and/or compensation for acting as a
Trustee hereunder. From and after RICHARD M. NIXON's death,
said original Trustee, if he shall still be acting as a Trustee
20
hereunder, shall be entitled to receive such commissions or
compensation as shall be allowable by statute or custom to a
Trustee of an inter vivos trust under the law of the State of
California, as the same shall from time to time be in force
and effect, and at the times and intervals provided by statute
or custom. Any additional or successor Trustee appointed pur-
suant to the provisions of Article FIFTH of this Agreement
shall be entitled to receive such commissions or compensation
as shall be specified in the instrument appointing such suc-
cessor or additional Trustee. In no event shall any Materials
be sold, however, for the purpose of paying such commissions
and/or compensation to any Trustee at any time. acting hereunder
but such commissions and/or compensation shall be payable only
from other property from time to time held under this Agreement
of Trust.
SEVENTH: No Trustee acting hereunder, whether named
herein or appointed pursuant to any of the provisions hereof,
shall be required to give or file any bond or other security
for the faithful performance of his or her duties as such
Trustee in any jurisdiction whatsoever.
EIGHTH: Any Trustee acting hereunder may resign and
be discharged from the trust and obligations hereunder by giv-
ing written notice, duly executed and acknowledged, of his or
21
her resignation to RICHARD M. NIXON, if he shall then be living,
and to the other Trustees or Trustee then acting hereunder.
NINTH: No Trustee acting hereunder shall be respon-
sible for any error of judgment or mistake of fact or law, and
shall be fully protected for any action taken in good faith,
in accordance with the advice of counsel, or in reliance thereon.
No Trustee acting hereunder shall be responsible for the act,
default or omission of any other Trustee, nor for the default
or misconduct of any agent or attorney appointed by the Trustee
or Trustees, or any of them. Each Trustee shall be liable only
for his or her own willful misconduct or gross negligence.
TENTH: Wherever in this Agreement of Trust any ref-
erence is made by number and letter symbols to any provision of
the Internal Revenue Code of 1954, as amended, such reference
shall be construed to refer to any successor provision similar
in import to the one referred to herein, even though referred
to by other number and letter symbols in a succeeding Tax Law
of the United States.
ELEVENTH: Except as provided in Article SECOND hereof,
this Agreement of Trust and the trust created hereunder shall
be irrevocable.
TWELFTH: The Settlor and the first Trustee here-
22
under are domiciled in the State of California. Accordingly,
all questions pertaining to the construction, regulation,
validity and effect of this Agreement of Trust and/or of the
trust created hereunder shall, during the entire term thereof,
be determined in accordance with the law of the State of Cali-
fornia.
THIRTEENTH: Should any provision of this Agreement of
Trust be or become invalid or unenforceable, the remaining pro-
visions hereof shall be and shall continue to be fully effective
and enforceable.
FOURTEENTH: All powers of administration granted
under this Agreement shall be exercisable only in a fiduciary
capacity.
FIFTEENTH: The Trustee, by joining in the execution
of this Agreement of Trust, signifies his acceptance of the
trust.
IN WITNESS WHEREOF, RICHARD M. NIXON and H. R.
HALDEMAN have hereunto set their hands and seals the day and
year first above written.
Richard M. Nixon, Settior Hr.S.]
HR Haldeman
[L.S.]
H. R. Haldeman, Trustee
STATE
COUNTY OF
Hishupl OF of Plantice ) ) : SS.:
On the 11/16 day of , 1972, before me
personally appeared RICHARDM. NIXON and H. R. HALDEMAN,
to me known and known to me to be the persons described in
and who executed the foregoing Agreement of Trust, and they
duly acknowledged to me that they executed the same.
qee
W Consision Par 3' MITS
SCHEDULE A
Attached to and made a part of that certain
Agreement of Trust made and executed the 14th day of
throuse , 1972, at 11.C
,
by and between RICHARD M. NIXON, as Settlor, and H. R.
HALDEMAN, as Trustee.
Letter of July 27, 1972 from Arthur F. Burns to the President
enclosing a copy of statement he presented to the Joint
Economic Committee.
Richl Unita [L.S.]
Richard M. Nixon, Settlor
[L.S.]
H. R. Haldeman, Trustee
of
BOARD
GOVER
CHAIRMAN OF THE BOARD OF GOVERNORS
OF
THE
SYSTEM
STEM
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
FEDERAL
July 27, 1972
Dear Mr. President:
NM
I am enclosing a copy of a statement I
presented to the Joint Economic Committee.
It deals rather comprehensively with the economy.
As you will see, it also supports strongly your
fiscal policy.
Sincerely yours,
as
Arthur F. Burns
The Honorable Richard Nixon
The President of the United States
The White House
Washington, D. C.
Enclosure
P.S. Did you have + diance
To call my (ynt as
Like General ! ise like X tall
you bout in MA !
For release on delivery
Statement by
Arthur F. Burns
Chairman, Board of Governors of the Federal Reserve System
before the
Joint Economic Committee
July 26, 1972
I am pleased to report to this Committee once again the
views of the Federal Reserve Board on the state of the economy.
Since my appearance before this Committee in February,
evidence has accumulated of a significant strengthening in the pace
of economic expansion. The output of our Nation's factories and
mines has increased rapidly since last fall and now exceeds the
previous peak rate in September 1969.
Advancing levels of production and sales have resulted
in a larger demand for labor by manufacturing plants, distributive
firms, service establishments, and other places of business. Total
employment since June of last year has risen by 3 million and the
length of the workweek has generally increased.
The improvement of labor markets has encouraged substantial
numbers of women and younger workers to enter the labor force. The
ranks of job seekers have also been swelled by a sizable reduction
in the Armed Forces. As a consequence, unemployment has remained
high despite better job opportunities. Last month, however, unemploy-
ment did show a heartening decline.
A major source of the quickening tempo of economic activity
has been the recovery in business capital formation. Confidence of
the business community was bolstered by the governmental measures
adopted last year to moderate inflation and to stimulate employment
and output. With incentives to invest strengthened, contracts for
business construction and orders for machinery and equipment have
been rising vigorously.
-2-
Higher residential construction has also been a stimulating
factor. New housing starts have declined somewhat from the level
reached early in 1972, but the effects of the pronounced rise in new
housing starts last year are still ramifying. Sales of furniture and
appliances, for example, have been soaring this year.
Consumer buying generally has been on a marked uptrend
since the late summer of 1971. Spendable incomes of consumers have
risen steadily and substantially, as employment has increased and
the workweek has lengthened. After more than 5 years of stagnation,
average weekly earnings of production workers have increased signifi-
cantly in real terms since last summer. Confidence in the economic
outlook has improved, and consumers are now borrowing at record rates
to buy new autos and other durable goods.
In short, as we see the economic scene, the current
expansion is now exhibiting the characteristics typical of cyclical
recoveries. A strong revival of output in the durable goods trades
is under way, employment is rising rapidly, and more and more branches
of production are being caught up in the rising trend of activity.
There is good reason to expect this cumulative process of
business expansion to continue on into 1973. Inventory accumulation
should provide an upward thrust in the months immediately ahead.
Stocks have fallen to low levels in relation to sales, and it appears
that a pick-up in inventory building is already in process. Business
investment in fixed capital should continue to be a major expansive
factor, since new orders and contracts for plant and equipment have
-3-
been moving strongly upward for some time. If these categories of
business spending rise briskly, as now seems likely, growth rates of
employment and earnings will remain high. Disposable income will also
gain from a rise in social security benefits this fall and sizable tax
refunds next spring. With consumers in a more optimistic mood, these
additions to purchasing power should stimulate demand further.
Thus, when I consider the recent course of economic activity
and the prospects for the near-term future, I find reason for optimism.
The expansion in real output and employment has remained orderly and
well balanced. Most major sectors appear to be poised for a further
rise in activity. And it seems likely that unemployment will
diminish as real output continues to rise.
Progress has also been made in moderating the rate of
increase in wages and prices. Over the first half of this year,
average hourly earnings in the private nonfarm economy rose at an
annual rate of about 5-1/4 per cent, compared with 6-3/4 per cent
during the first 7 months of 1971. The control program has evidently
had a salutary effect, although competitive forces may also have
served to dampen the rise in wage rates.
Price indexes too indicate some reduction in the rate of
inflation. A comprehensive measure of price performance--the fixed-
weight index of prices of all private goods and services in the gross
national product--rose over the first three quarters of last year at
an annual rate of about 4.5 per cent. In the three most recent
quarters, the rate of increase has receded to about 3 per cent.
-4-
Other price indexes also show improvement. Thus, consumer
prices since last August have increased at an annual rate of 2.7 per
cent, compared with 3.8 per cent in the first 7 months of 1971. In
the last 4 months, the annual rate of increase averaged about 2 per cent.
The need for further progress in curbing inflationary pressures
remains great, however, particularly in view of potential developments
in 1973. Next year, collective bargaining agreements covering large
numbers of workers will be reopened in major industries. The negotia-
tions will take place in a climate of improving labor markets and
against the backdrop of a substantial increase in consumer prices over
the past several years. If wage rate increases should accelerate,
pressures on unit costs of production would intensify. And business
firms would probably take advantage of receptive product markets to
pass on cost increases to customers.
Greater success in our efforts to moderate inflation is
therefore vital. If costs are to be stabilized, the wage guidelines--
which now permit increases in wage rates well above long-term produc-
tivity gains--will need to be lowered. But any such wage development
will necessitate measures to assure workers that their real earnings
will not be eroded by continuing increases in consumer prices.
A tighter rein on inflation is needed not only to protect
the incomes and savings of our people; it is needed also to restore
equilibrium in our international accounts. Indeed, I seriously doubt
whether this external objective can be achieved without a stable price
level. The Smithsonian realignment of exchange rates last December
-5-
laid the basis for a substantial improvement in our competitive
position. But that potential will be dissipated if appreciable
increases in domestic costs and prices continue.
Our international accounts are still seriously out of
balance. Imports this year have increased substantially further, and
while exports have also risen, our trade deficit has deepened. Such
a development is not unusual in the months immediately following a
currency depreciation, and the more advanced stage of our economic
recovery relative to that of our major trading partners has undoubtedly
been an aggravating factor. With economic conditions abroad again
improving, the demand for our exports should rise more vigorously over
the near term. Past experience suggests, however, that 2 or 3 years
may need to elapse before the full benefit of last December's
exchange rate realignment is realized.
The over-all balance of payments was in substantial deficit
during the first quarter. But beginning in mid-March, the over-all
balance became more favorable, due principally to short-term capital
inflows. Indeed, we actually experienced a balance of payments surplus
between mid-March and June 23, when the British pound was floated.
In the weeks immediately following the British decision,
exchange markets around the world experienced renewed turmoil, and
a sizable shift of dollars into European central banks occurred.
Most recently, however, order has been re-established on the foreign
exchanges. The renewal of market confidence is due in no small measure
to the intervention in the exchange markets by the Federal Reserve in
collaboration with the Treasury.
-6-
The recent disturbances of exchange markets provide a clear
warning. If repetitive monetary crises are to be avoided and an
environment conducive to healthy expansion of foreign trade and
investment is to be preserved, international negotiations on
monetary reform must begin promptly. The recent disturbances are
also a warning that turmoil in international financial markets may
continue until the United States and its major trading partners find
ways to rid their economies of the inflationary sickness that is
plaguing us all.
0
Let me turn next to the course that our Nation's monetary
and fiscal policies must pursue to offer hope of solving our inflation
problem, and at the ame time facilitate growth in production and
employment.
Typically, expansions in economic activity are accompanied
by pronounced pressures in credit markets, reflecting larger credit
demands as well as more stringent monetary policies. Thus far, this
expansion has been rather free from such pressures. Inflows of
savings deposits to nonbank thrift institutions--though below earlier
peaks--remain abundant, and these funds are being used actively in
mortgage lending. Commercial banks, besides extending substantial
amounts of credit to businesses and consumers this year, have been
able to acquire a record volume of mortgages and to supply a major
part of the funds raised in credit markets by state and local govern-
ments. And although interest rates on short-term securities have
risen from their lows early this year, long-term rates of interest
-7-
have changed very little. Actually, interest rates on practically
all classes of loans and securities--including mortgages are distinctly
below their July 1971 levels.
A major reason for the relative stability of interest rates
was the substantial reduction in the size of the Federal deficit for
fiscal 1972 from earlier expectations. Moderation in business credit
demands was also a contributing factor. Retained earnings of corpora-
tions were augmented by the rise in business profits, the release of
funds by the investment tax credit and accelerated depreciation, and
the 4 per cent ceiling on dividends imposed by the Committee on
Interest and Dividends. Businesses were thus in a good position to
finance their needs for increased investment spending and working
capital from internal sources.
Monetary policy over this past year also contributed to
stability in credit markets. The Federal Reserve pursued a moderate
course of monetary expansion, so that fears of a new wave of infla-
tionary pressures would not be generated. But the Federal Reserve
also saw to it that the economic recovery would not suffer for want
of money or credit.
The moderate course of monetary policy is evidenced by the
major monetary aggregates. During the 12 months ending in June, the
narrowly defined money supply (currency plus demand deposits) increased
by 5 per cent, or less than the increase in the Nation's real output.
The money supply defined more broadly, so as to include time deposits
other than large-denomination certificates of deposit, rose faster as
consumers built up liquid assets by adding to their time and savings
accounts.
-8-
As this Committee knows, rates of monetary expansion have
recently varied considerably from one quarter to the next. The effects
of such variations on economic activity can easily be exaggerated.
Last fall, for example, growth in money balances slowed sharply, and
concern was voiced in some quarters that the economic expansion would
falter. Actually, there was no shortage of money or credit at that
time. The abundant supply provided in the first half of last year was
still there to meet the need of consumers and businesses. In fact, the
slowdown served a useful function. For it assured the public that
there was no intention to open the monetary spigot in a reckless effort
to stimulate expansion, while wages and prices were being held in
check with direct controls.
The Board recognizes, however, that fluctuations in growth
rates of money and bank credit have at times gone beyond our intentions.
To deal with this problem, techniques of implementing monetary policy
have recently been altered in ways that might permit us to minimize
undesired variations.
Early this year, the Federal Open Market Committee decided
that the pursuit of its monetary goals might be aided by focusing
less heavily on the Federal funds rate as an operating target and
instead giving more weight to the desired growth of the bank reserves
held against private deposits. This change in operating procedure did
not, of course, mean that money and capital market developments would
be disregarded. It merely meant that, in the Committee's judgment,
greater emphasis could be placed on the reserves needed to attain the
desired growth rates of the monetary aggregates, while still giving
-9-
attention to interest rates and other dimensions of financial markets.
Monetary developments since January seem to confirm that judgment,
but more time will be needed to evaluate properly the new operating
techniques.
At present, the Federal Reserve is in a favorable position
to continue pursuing a path of moderate monetary growth, for economic
expansion thus far has been orderly and supplies of real resources
are still ample. And if, as seems likely, private credit demands
advance at a temperate pace, interest rates near current levels could
continue to prevail in the months immediately ahead.
Whether or to what degree this desirable outcome is
realized will depend heavily on the state of the Federal budget. At
the time of the midyear budget review, the deficit projected for
fiscal 1973 was $27 billion. The recent passage of the social
security bill has raised that figure appreciably. Supplements to
defense spending not allowed for in the midyear budget review may add
further to the deficit. And there will be a temporary but potentially
dangerous bulge in the deficit next spring, when large refunds of over-
withheld taxes will add to disposable income. This concentrated fiscal
stimulus could have unfortunate consequences for prices.
I recognize that deficits are difficult to avoid when tax
revenues fall below the levels that would be produced by an economy
operating at full employment. But in fiscal 1973 the deficit may be
growing at a time when the economy is expanding briskly and the
margins of unused capacity are narrowing. Such a development would
-10-
add explosive fuel to the fires of inflation. I therefore see no
escape from the conclusion that the time has come when the Congress
must put our fiscal house in order.
We stand at a crossroads in our fiscal arrangements. Many
of our citizens are alarmed by the increasing share of their incomes
that is taken away by Federal, State, and local taxes. Meanwhile,
Federal expenditures have been rising at a rate well above the growth
rate of our national income and product. The propensity to spend more
than we are prepared to finance through taxes is becoming deep-seated
and ominous. An early end to Federal deficits is not now in sight.
Numerous Federal programs have a huge growth of expenditures built into
them and there are proposals presently before the Congress that would
raise expenditures by vast amounts in coming years.
The fundamental problem, therefore, is how to regain control
over Federal expenditures. I do not think this can be accomplished
without departing from our traditional methods of budgetary management.
I have long been an advocate of zero-base budgeting --
a procedure that would require careful scrutiny by the congressional
appropriations committees of the full expenditure requested for every
Government program, rather than just the increase in expenditures.
Such a procedure would help to weed out programs whose social usefulness
has diminished or ended. It would take considerable time, however, to
reform budgetary procedures along these lines even if the Congress
were ready to adopt it.
-ii-
To obtain immediate results, other steps are needed.
Recently, a bipartisan group of Congressmen advanced a proposal
that would prohibit consideration of any appropriation bills in the
House of Representatives until the House had approved a resolution
containing a comprehensive Federal budget. The proposal also would
require a two-thirds majority vote for any appropriation bill exceeding
the provisions of the over-all budget resolution. This is a highly
constructive suggestion. I hope the Congress will give it careful
study and at the same time consider the desirability of establishing
a Joint Committee of the Congress on Revenues and Expenditures.
Another proposal that could produce immediate beneficial
results has already been studied by many members of the Congress--
namely, the President's recommendation for a legislative ceiling on
this year's budget expenditures. I strongly support this recommenda-
tion in the hope that the ceiling would be a rigid one, that it would
admit of no escape hatches whatever, and that it would apply both to
the Executive and to the Congress.
Re-establishment of order in our Federal finances has
become a critical need in our Nation's struggle against inflation.
In the Board's judgment an enduring prosperity cannot be achieved
unless this need is attended to promptly and courageously by the
Congress.
Copy No. 6
of 8 copies
INSTRUMENT APPOINTING
SUCCESSOR TRUSTEE
AGREEMENT OF TRUST
by and between
RICHARD M. NIXON,
as Settlor
and
H. R. HALDEMAN,
as Trustee
Dated: August 14, 1972
MUDGE ROSE GUTHRIE & ALEXANDER
20 BROAD STREET, NEW YORK, NEW YORK
APPOINTMENT OF SUCCESSOR TRUSTEE
THIS INSTRUMENT, made the 14th day of August
1972, by H. R. HALDEMAN, as Trustee of that certain trust
known as The Irrevocable Literary Trust and created under an
Agreement of Trust made the 11/th day of August , 1972, by
and between said RICHARD M. NIXON, as Settlor and the under-
signed, as Trustee.
WITNESSETH:
WHEREAS, the undersigned possesses the power under
Article FIFTH of said Agreement of Trust made the 14th day
of August , 1972, by and between RICHARD M. NIXON, as
Settlor, and the undersigned, as Trustee, to appoint a successor
or successors to act in the place and stead of the undersigned
as Trustee or Trustees of the trust created under said Agreement
of Trust should the undersigned, for any reason, cease to act
as such;
NOW, THEREFORE, pursuant to the aforementioned power,
the undersigned does hereby appoint JOHN D. EHRLICHMAN as suc-
cessor Trustee to act in his place and stead should he, for any
reason whatsoever, cease to act as Trustee under said Agreement
of Trust.
H. R. Haldeman
ACCEPTANCE OF APPOINTMENT
The undersigned, JOHN D. EHRLICHMAN, does accept
the foregoing appointment as successor Trustee of that cer-
tain trust known as The Irrevocable Literary Trust and cre-
ated under an Agreement of Trust made the 11196 day of
August , 1972, by and between RICHARD M. NIXON, as Settlor,
and'H. R. HALDEMAN, as Trustee, should said H. R. HALDEMAN,
for any reason, cease to act as a Trustee of such trust, and
does agree, upon assuming the office of Trustee of such trust,
to perform the duties of said office and to be bound by all
of the terms and conditions of said Agreement of Trust.