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MEETINGS
August 21, 1970
Dear Jack:
A Liaison Committee meeting Friday
morning, 7:30 a.m., October 16, would be
fine.
Regards,
Paul W. McCracken
Mr. John W. Burke, Jr.
Executive Secretary
The Business Council
888 Seventeenth Street N.W.
Washington, D.C. 20006
Reproduced at the Richard Nixon Presidential Library
20 AUG 1970
PM
FRED J. BORCH
RUSSELL DeYOUNG
Chairman
Vice Chairman
JOHN W. BURKE, JR.
THE BUSINESS COUNCIL
PATRICK E. HAGGERTY
Executive Secretary
Vice Chairman
888 SEVENTEENTH STREET, N.W.
JOHN D. HARPER
WASHINGTON, D.C. 20006
Vice Chairman
Telephone
Area Code 202
BIRNY MASON, JR.
298-7650
Vice Chairman
ACTIVE MEMBERS
J. PAUL AUSTIN
FREDERICK B. DENT
J. K. JAMIESON
OTTO N. MILLER
WILLIAM M. BATTEN
RUSSELL DeYOUNG
EDGAR F. KAISER
HOWARD MORGENS
S. D. BECHTEL, JR.
C. DOUGLAS DILLON
GEORGE E. KECK
ROGER MILLIKEN
EUGENE N. BEESLEY
HENRY FORD II
J. WARD KEENER
W. B. MURPHY
BENJAMIN F. BIAGGINI
HENRY W. GADSDEN
DONALD M. KENDALL
T. F. PATTON
JAMES H. BINGER
A. H. GALLOWAY
JOHN R. KIMBERLY
JAMES M. ROCHE
FRED J. BORCH
EDWIN H. GOTT
JOSEPH L. LANIER
DAVID ROCKEFELLER
HARLLEE BRANCH, JR.
ELISHA GRAY II
RALPH LAZARUS
H. I. ROMNES
STUART T. SAUNDERS
WILLIAM S. BREWSTER
R. V. HANSBERGER
BARRY T. LEITHEAD
L. B. SMITH
DONALD C. BURNHAM
JOHN D. HARPER
EDMUND W. LITTLEFIELD
CHARLES H. SOMMER, JR.
HOWARD L. CLARK
ELLISON L. HAZARD
GEORGE H. LOVE
FRANK STANTON
JOHN T. CONNOR
WILLIAM A. HEWITT
MALCOLM MacNAUGHTON
CHARLES B. THORNTON
C. W. COOK
MILTON P. HIGGINS
S. M. McASHAN, JR.
LYNN A. TOWNSEND
JOHN E. CORETTE
JACK K. HORTON
CHARLES B. McCOY
THOMAS J. WATSON, JR.
BERT S. CROSS
AMORY HOUGHTON, JR.
GORDON M. METCALF
GEORGE H. WEYERHAEUSER
JOHN H. DANIELS
GILBERT W. HUMPHREY
IRWIN MILLER
HENRY S. WINGATE
August 19, 1970
The Honorable Paul W. McCracken, Chairman
Council of Economic Advisers
Executive Office Building, Room 312
Washington, D. C. 20506
Dear Paul:
It is good news to know that you will be with us in October and
you will be hearing a great deal more from us as the meeting date approaches.
I will arrange to have the Liaison Committee meet with you
at breakfast at 7:30 a. m. on the morning of Friday, October 16th, but,
if you would prefer Saturday, the 17th, please let me know.
With kindest personal regards,
Sincerely,
June John W. Burke, Jr.
Executive Secretary
Reproduced at the Richard Nixon Presidential Library
Bus. Council Mtg. Folder
November 10, 1970
Dear Mil:
Those were good comments in your letter of October 28,
and I appreciated your sending them along.
I certainly agree that the CPI was never intended to be
so accurate that changes of a few tenths of a percent would
be headline news. No one would pretend that such an amor-
phous thing as "the general price level" can even be measured
within that margin of accuracy. The greater emphasis on the
inter-relationships between productivity, costs, prices, and
real income is a sound idea. We are going to accent that a bit
more in our next Inflation Alert.
Regards,
Paul W. McCracken
Mr. W. M. Batten
Chairman of the Board
J. C. Penney Company, Inc.
1301 Avenue of the Americas
New York, New York 10019
Reproduced at the Richard Nixon Presidential Library
J.C. PENNEY COMPANY, INC.
1301 AVENUE OF THE AMERICAS, NEW YORK, N.Y. 10019
October 28, 1970
W.M. BATTEN
CHAIRMAN OF THE BOARD
Mr. Paul W. McCracken, Chairman
Council of Economic Advisers
Executive Office Building
Washington, D.C. 20506
Dear Paul:
Thank you for your letter of October 22 about
the Hot Springs visit. I greatly appreciated the oppor-
tunity to talk with you.
For the record, I would like to comment again
on a matter we discussed - the need for some device that
would provide an educational peg for the relationship
between productivity, wages and prices. Even the opponents
of the previous Guideposts, I believe, were in general
agreement that they had some educational value. We are
a nation of economic illiterates and I am not naive enough
to think that one small action is going to solve our problems,
but it might be of some help.
The CPI was not devised to be used as it is today.
While I am not qualified to comment on its validity, because
it is a technical matter, I have listened to many people
who claim we need a better index for measuring the changes
in cost of living.
When the CPI is released each month, it is a big
news item in the press, radio and TV. Its impact on the
thinking of the general public has been growing. It tends
to make everyone feel "poorer" even if their own personal
situation has not been significantly affected.
Paul, none of these comments is new. Perhaps my
rambling thoughts boil down to two points. One, an evaluation
of the CPI as presently constituted to determine its validity
Reproduced at the Richard Nixon Presidential Library
- 2 -
as a measure of the cost of living, and two, issuance on
a regular basis of information about productivity which
could then be used as an educational device.
I plan to meet with some of our key people to see
what we can do internally to create a better understanding
among our own associates on the relationship between
productivity, prices and wages.
Pardon the length of this letter.
With warmest regards.
Sincerely yours,
This
wmb ez
Reproduced at the Richard Nixon Presidential Library
Processors of agricultural products
pm
ADM
ARCHER DANIELS MIDLAND COMPANY DECATUR, ILLINOIS 62525 TELEPHONE 217/423-2571
CHAIRMAN OF THE BOARD
October 20, 1970
Dr. Paul W. McCracken
Chairman
Council of Economic Advisers
Washington, D. C.
Dear Dr. McCracken
Thank you for your thoughtful note about the meeting at The Homestead.
It is extremely interesting and stimulating for me to be a part of these
sessions. I look forward to our next meeting with great enthusiasm.
With all best regards
Sincerely
John H. John Daniels
JHD:lm
Reproduced at the Richard Nixon Presidential Library
FRED J. BORCH
pm
RUSSELL DeYOUNG
Chairman
Vice Chairman
JOHN W. BURKE, JR.
THE BUSINESS COUNCIL
PATRICK E. HAGGERTY
Executive Secretary
Vice Chairman
888 SEVENTEENTH STREET, N.W.
JOHN D. HARPER
WASHINGTON, D.C. 20006
Vice Chairman
Telephone
Area Code 202
BIRNY MASON, JR.
298-7650
Vice Chairman
ACTIVE MEMBERS
J. PAUL AUSTIN
FREDERICK B. DENT
J. K. JAMIESON
OTTO N. MILLER
WILLIAM M. BATTEN
RUSSELL DeYOUNG
EDGAR F. KAISER
HOWARD MORGENS
S. D. BECHTEL, JR.
C. DOUGLAS DILLON
GEORGE E. KECK
ROGER MILLIKEN
EUGENE N. BEESLEY
HENRY FORD II
J. WARD KEENER
W. B. MURPHY
BENJAMIN F. BIAGGINI
HENRY W. GADSDEN
DONALD M. KENDALL
T. F. PATTON
JAMES H. BINGER
A. H. GALLOWAY
JOHN R. KIMBERLY
JAMES M. ROCHE
FRED J. BORCH
EDWIN H. GOTT
JOSEPH L. LANIER
DAVID ROCKEFELLER
HARLLEE BRANCH, JR.
ELISHA GRAY =
RALPH LAZARUS
H. 1. ROMNES
WILLIAM S. BREWSTER
STUART T. SAUNDERS
R. V. HANSBERGER
BARRY T. LEITHEAD
L. B. SMITH
DONALD c. BURNHAM
JOHN D. HARPER
EDMUND W. LITTLEFIELD
CHARLES H. SOMMER, JR.
HOWARD L. CLARK
ELLISON L. HAZARD
GEORGE H. LOVE
FRANK STANTON
JOHN T. CONNOR
WILLIAM A. HEWITT
MALCOLM MacNAUGHTON
CHARLES B. THORNTON
C. W. COOK
MILTON P. HIGGINS
S. M. McASHAN, JR.
LYNN A. TOWNSEND
JOHN E. CORETTE
JACK K. HORTON
CHARLES B. McCOY
THOMAS J. WATSON, JR.
BERT S. CROSS
AMORY HOUGHTON, JR.
GORDON M. METCALF
GEORGE H. WEYERHAEUSER
JOHN H. DANIELS
GILBERT W. HUMPHREY
IRWIN MILLER
HENRY S. WINGATE
October 28, 1970
The Honorable Paul W. McCracken, Chairman
Council of Economic Advisers
Executive Office Building, Room 312
Washington, D. C. 20506
Dear Paul:
I am writing to thank you for quarterbacking the government
panelists during our panel discussion on the economy at this month's
session of The Business Council.
The format of a panel discussion was not new to the Council,
but this was the first time we had the entire government first-string
economic team on hand at one time. The main presentations by you
and Arthur Burns certainly stood out as highlights. I especially
appreciated the informativeness of your prepared remarks and the
insights offered in your comments regarding the limitations on govern-
ment action and the need for the business community to involve itself
at an early stage in problem areas.
I hope you share with me the belief that constructive dialogues
like the one which developed at the Saturday session are a useful tool in
winning a better understanding on the part of all of us regarding economic
problems and their solutions. Yours was certainly an effective contribution
to that understanding.
Sincerely
Fred Fred J. Borch
/lat
Chairman
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 29, 1970
Dear Steve:
Thank you for your letter of October 19 and the enclosed
notes.
The meeting at the Business Council was, I thought, an
interesting one, and the "Washington Listens" format is one
that undoubtedly ought to be used more. If I were to enter a
modest note of difsent, it would be that Washington is quite
aware of the wage-cost-price problem. The problem is to
find effective ways to get at it that are politically acceptable.
Your own paper is, however, constructive here.
Regards,
Paul W. McCracken
Mr. S. D. Bechtel, Jr.
President
Bechtel Corporation
Fifty Beale Street
San Francisco, California 94119
filed: MEETINGS
Reproduced at the Richard Nixon Presidential Library
55
Bechtel Corporation
Engineers - Constructors
pm
Stephen D. Bechtel, Jr.
Fifty Beale Street
President
San Francisco, CA 94119
October 19, 1970
Dr. Paul McCracken, Chairman
Council of Economic Advisors
Washington, D. C.
Dear Dr. McCracken:
I sincerely hope our discussions at the Business Council
meeting and at the White House last weekend led to better
understanding by all concerned of the crisis situation con-
cerning construction labor costs.
As you requested, I am attaching a copy of the paper from
which I spoke. In view of the time limit and the comments
of earlier speakers I did omit a few parts of it.
In light of the reports in the press referring to comments
on construction at the Business Council meeting, I would
like to be sure that everyone understands that I do not
advocate "union busting". There are some bad imbalances
in our present structure and severe abuses in labor prac-
tices on construction. Any practical solution to these
problems must be done in light of the proper role for
responsible labor unions in our society.
If you desire to have additional discussions with me con-
cerning the government's role and possible future action,
I would be most pleased to meet with you in Washington
or elsewhere at our earliest mutual convenience.
Respectfully,
S. D. Bechtel, Jr.
SDBJr:jmh
Reproduced at the Richard Nixon Presidential Library
OFF THE RECORD;
10/16/70
NOT FOR PUBLICATION
S. D. BECHTEL, JR. REMARKS TO BUSINESS COUNCIL
RE: CONSTRUCTION INDUSTRY PROBLEMS
OCTOBER 17, 1970
Introduction:
I welcome this opportunity to discuss the most important economic
problem of the construction industry, and perhaps of our total economy:
that is, construction-labor cost increases.
Construction, Inflation & The National Economy:
I will not take much time reiterating background, or proving the
strong tie between soaring construction labor costs and inflation in the
national economy.
Let me quickly give you some perspective on the magnitude and
severity of the problem:
First:
Construction, including maintenance and repair,
is the biggest single industry in the United States,
currently accounting for about 120 billion dollars
or thirteen percent of the GNP.
Second:
Labor settlements in the first six months of 1970
provided for average first-year increases, of wages
and fringes, of about nineteen percent, or about 88 cents
per hour. The average annual increase over the life of
the agreements is fifteen percent. About half of these
agreements are for three years.
Third:
You recall the great fragmentation of our industry:
-
With 900, 000 contractors,
-
10,000 local unions,
Reproduced at the Richard Nixon Presidential Library
- 2 -
-
and about 30, 000 different labor
agreements, most of which are
separately negotiated at the local
level between local contractor groups
and the "locals" of the unions.
Problem Areas
Now: Focusing on the specific problem areas, three factors
are the primary causes for the present run-away inflation in construction:
First:
The extremely large wage-rate increases,
Second:
The substantial decline in output by
building-trade workers,
Third:
The shortage of skilled construction
craftsmen.
While many of you are becoming aware of the excessively large
wage-rate increases, I suspect that most people do not realize the great
effect in the last couple of years on construction labor costs from reduced
productivity and shortages of skilled manpower. These two factors are at
least equal to, and perhaps bigger than, increasing wage rates as contribu-
tors to our industry's present inflationary spiral.
Possible Solutions:
With an eye on the clock I turn now to solutions: what are the
cures for this "sick situation"? Why have not we contractors already
cleaned up this mess ? Gentlemen, let's face the "facts of life":
The economic and political forces dominating
our industry pushed us to where we are now! !! The structure
of the industry with the great strength of the unions, with the
fragmentation of the contractors, with the local approach to
labor negotiations, and with the present legislation, the
damaging court decisions, and adverse administrative in-
terpretations, all make it impossible, for us alone, to solve
our major problems.
Corrective Efforts by Private Sector:
Some of us in the industry have been trying, however, and,
I think, are starting to bring about improvements. Some results are
finally being achieved to close ranks and develop an industry-wide
Reproduced at the Richard Nixon Presidential Library
-3-
cooperative approach to labor matters.
The Council of Construction Employers, which has representatives
from several contractor associations, is becoming more effective and now
meets regularly to review construction labor problems. We anticipate
further strengthening of this organization.
Two major contractor associations, the NCA and AGC, for
many years bitter rivals, are starting to work together and are active
participants in the Council of Construction Employers. Also, the AGC and
NCA are jointly sponsoring multi-employer legislation, for area bargaining
on a multi-trade basis, with common expiration dates, all of which would
consolidate and strengthen employer bargaining.
Another concrete program is an effort by a major contractor
association to negotiate a special agreement with the building trades unions,
to improve manpower supply and productivity and to control illegal strikes.
The agreement is in relatively final form and once signed by the Building
Trade presidents, all contractor associations will be able to become a party
to it. We are hopeful it will be concluded within the next few weeks.
On another front, last year many top business leaders recognized
the effect that construction wage-increases were having on wages across
many other industries. They also recognized the inability of construction
alone to correct the problems. They formed the "Construction Users Anti-
Inflation Roundtable". This group has already done some very good work,
and results are starting to show. Many of you here are members of the
Roundtable. I urge that you continue to support Roger Blough and the
Roundtable.
Government's Role:
Over the last year, our Federal Government has shown concern for
the problems in construction and their effect on the national economy. How-
ever, I understand, and I hope in error, that the Administration has recently
said, in effect, that it cannot, or will not, do much to help solve the labor
problems in construction
on the basis that the unions and manage-
....3
ment should correct the problems by the exercise of "reason", "moderation"
and "self-restraint".
I strongly subscribe to the theory of non-intervention by government
when the private sector is capable of resolving its own problems. However,
looking at the construction industry from a practical viewpoint, the record
is clear that, within its present structure, the private sector alone cannot
do the job.
Reproduced at the Richard Nixon Presidential Library
- 4 -
I refer again to the fragmented industry and the enormous,
concentrated and legally-sanctioned power of the Building Trade Unions.
It is essential that government provide help and leadership. As Roger
Blough has stated: "The Federal Government is clearly the largest con-
struction user and it also has a 'Governmental Obligation', a leadership
role which can not be delegated or deferred".
Government Actions Needed:
Turning directly to my assignment here this morning, "suggestions
for action by the government", the following are my observations:
First, I was particularly encouraged, last fall, by the Adminis-
tration's efforts to reduce its own direct impact on construction-industry
inflation by deferring government construction and minimizing overtime.
Cabinet Committee:
The establishment of the "Cabinet Committee on Construction" was
a most important step forward; and I fervently hope that this Committee,
with its top-level membership, will counsel for stronger and more effective
Administration policies and programs for construction.
Collective Bargaining Commission:
I believe the concept of the Construction Industry Collective
Bargaining Commission is good and I certainly endorse, in principle, the
Commission's "Nine Point Program". However, many people in our in-
dustry think this Commission is strictly an informal talking group and will
not result in much action. I hope this Commission will show more concrete
accomplishments in the near future.
Productivity Commission:
The National Productivity Commission focuses on one of the major
problems of all industry. With construction having some of the worse pro-
ductivity problems of any industry, I strongly urge that this Commission
give considerable attention specifically to construction-labor productivity
problems and their solution.
Multi-Employer Regional Bargaining:
I am greatly encouraged by the Secretary of I abor's recent
support for changing the bargaining concepts in our industry. I fully
endorse the multi-employer regional bargaining proposal; and I urge that
Reproduced at the Richard Nixon Presidential Library
- 5 -
the Administration join with the contractors' associations, who are supporting
this program, and push legislation for enactment at the earliest possible date.
Shortage of Manpower:
It is a mistake to conclude from the recent unemployment figures that
the entire construction industry has unemployment problems. To the
contrary, today, there is an acute shortage of skilled men for heavy and
industrial construction.
The proposed government programs for training armed-forces
personnel and minority groups, and for improved apprentice utilization
should be encouraged and expanded to include retraining of the currently
unemployed and specialty training in the construction trades for all of
these groups.
The barriers of the restricted hiring hall procedures must be
eliminated to facilitate freer hiring. More on this subject later.
Other Government Action:
Additional Federal Government action is necessary at this time.
I recommend the following:
First:
The Administration should actively and properly
enforce existing labor legislation which was intended
to eliminate the "Closed Shop". Make no mistake, - --
"union hiring halls", as presently operated in the
construction industry, result in "Closed Shop"
operations.
Second:
The N. L. R. B. administrative procedures should
be altered to speed relief in all cases of illegal strikes
and other violations of labor contracts.
Third:
In connection with the Davis-Bacon Act, at the very
least, the Administration should alter the guidelines
used by the Department of Labor so that wage rates
are no longer established on the basis of the highest
rates in "adjacent" areas.
Fourth:
The Administration should conduct a well-organized
campaign to modernize outmoded and often conflicting
building codes throughout the country. I understand
Reproduced at the Richard Nixon Presidential Library
- 6 -
that the Bureau of Standards has such an assign-
ment; but it needs a real push. Existing archaic
restrictions reduce the use of new technology and
must be eliminated.
Fifth:
Lastly, I suggest that the Administration aggressively
sponsor labor reform legislation relating strictly to
the construction industry. The size and nature of our
industry and its overall effect on the national economy
certainly justify a separate act; and many of the cor-
rective features urgently needed for construction are
not applicable or required for other industries. In
addition to a number of my previous recommendations,
such legislation should include the following provisions:
(A)
Identify and preserve management's rights,
including freedom of hiring and elimination
of supervision from existing collective
bargaining units.
(B)
Strengthen enforcement procedures and place
appropriate penalties for illegal strikes and
violations of labor agreements.
(C)
Eliminate the multitude of on-site feather-
bedding practices and restrictions against
off-site fabrication.
(D)
Return needed authority and responsibility
to the heads of the international unions to give
them the power necessary to control small
militant groups at the local union level who,
in violation of labor agreements, seriously
disrupt the orderly conduct of many construction
projects.
Conclusion:
Gentlemen, we have an extremely bad situation in construction
today. Some of us in the industry have been working to bring about im-
provements; however, without strong assistance from the balance of the
private sector and substantial corrective action by the Government, the
job will not get done.
Reproduced at the Richard Nixon Presidential Library
- 7 -
You, the leaders of our country, will have to make your own
judgment as to the severity of the construction labor problem and the
extent of its influence on the health of our national economy.
If you agree with me that the construction labor situation is an
economic crisis of major national importance, that it is intolerable, and
that it must be corrected; then I hope you also agree that the Federal
Government must inject itself, give strong leadership, and protect the
people of our country against the most cancerous source of inflation in
our national economy today.
Reproduced at the Richard Nixon Presidential Library
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
October 23, 1970
MEMORANDUM FOR DR. MC CRACKEN
FROM:
PETER FLANIGAN
PIUD
I presume that Bechtel sent you the attached. If not,
it occurs to me that as the Chairman of the Cabinet Committee
on Construction Costs this should be seen by you.
Reproduced at the Richard Nixon Presidential Library
Bechtel Corporation
Engineers - Constructors
Stephen D. Bechtel, Jr.
Fifty Beale Street
President
San Francisco, CA 94119
October 20, 1970
Mr. Peter Flanigan
Special Assistant to the President
White House Office
Washington, D. C.
Dear Peter:
I sincerely hope our discussions at the Business Council
meeting and at the White House last weekend led to better
understanding by all concerned of the crisis situation con-
cerning construction labor costs.
In the event further reference to my comments and sugges-
tions would be helpful, I am attaching a copy of the paper
from which I spoke. In view of the time limit and the
comments of earlier speakers, I did omit a few parts of it.
In light of the reports in the press referring to comments
on construction at the Business Council meeting, I would
like to be sure that everyone understands that I do not
advocate "union busting". There are some bad imbalances
in our present structure and severe abuses in labor prac-
tices on construction. Any practical solution to these
problems must be done in light of the proper role for
responsible labor unions in our society.
If you have any questions or suggestions, I would be
delighted to hear from you.
Sincerely,
S. D. Bechtel, Jr.
SDBJr:jmh
Reproduced at the Richard Nixon Presidential Library
OFF THE RECORD;
10/16/70
NOT FOR PUBLICATION
S. D. BECHTEL, JR. REMARKS TO BUSINESS COUNCIL
RE: CONSTRUCTION INDUSTRY PROBLEMS
OCTOBER 17, 1970
Introduction:
I welcome this opportunity to discuss the most important economic
problem of the construction industry, and perhaps of our total economy:
that is, construction-labor cost increases.
Construction, Inflation & The National Economy:
I will not take much time reiterating background, or proving the
strong tie between soaring construction labor costs and inflation in the
national economy.
Let me quickly give you some perspective on the magnitude and
severity of the problem:
First:
Construction, including maintenance and repair,
is the biggest single industry in the United States,
currently accounting for about 120 billion dollars
or thirteen percent of the GNP.
Second:
Labor settlements in the first six months of 1970
provided for average first-year increases, of wages
and fringes, of about nineteen percent, or about 88 cents
per hour. The average annual increase over the life of
the agreements is fifteen percent. About half of these
agreements are for three years.
Third:
You recall the great fragmentation of our industry:
-
With 900, 000 contractors,
-
10,000 local unions,
Reproduced at the Richard Nixon Presidential Library
- 2 -
-
and about 30, 000 different labor
agreements, most of which are
separately negotiated at the local
level between local contractor groups
and the "locals" of the unions.
Problem Areas
Now: Focusing on the specific problem areas, three factors
are the primary causes for the present run-away inflation in construction:
First:
The extremely large wage-rate increases,
Second:
The substantial decline in output by
building-trade workers,
Third:
The shortage of skilled construction
craftsmen.
While many of you are becoming aware of the excessively large
wage-rate increases, I suspect that most people do not realize the great
effect in the last couple of years on construction labor costs from reduced
productivity and shortages of skilled manpower. These two factors are at
least equal to, and perhaps bigger than, increasing wage rates as contribu-
tors to our industry's present inflationary spiral.
Possible Solutions:
With an eye on the clock I turn now to solutions: what are the
cures for this "sick situation"? Why have not we contractors already
cleaned up this mess ?? Gentlemen, let's face the "facts of life":
The economic and political forces dominating
our industry pushed us to where we are now! The structure
of the industry with the great strength of the unions, with the
fragmentation of the contractors, with the local approach to
labor negotiations, and with the present legislation, the
damaging court decisions, and adverse administrative in-
terpretations, all make it impossible, for us alone, to solve
our major problems.
Corrective Efforts by Private Sector:
Some of us in the industry have been trying, however, and,
I think, are starting to bring about improvements. Some results are
finally being achieved to close ranks and develop an industry-wide
Reproduced at the Richard Nixon Presidential Library
-3-
cooperative approach to labor matters.
The Council of Construction Employers, which has representatives
from several contractor associations, is becoming more effective and now
meets regularly to review construction labor problems. We anticipate
further strengthening of this organization.
Two major contractor associations, the NCA and AGC, for
many years bitter rivals, are starting to work together and are active
participants in the Council of Construction Employers. Also, the AGC and
NCA are jointly sponsoring multi-employer legislation, for area bargaining
on a multi-trade basis, with common expiration dates, all of which would
consolidate and strengthen employer bargaining.
Another concrete program is an effort by a major contractor
association to negotiate a special agreement with the building trades unions,
to improve manpower supply and productivity and to control illegal strikes.
The agreement is in relatively final form and once signed by the Building
Trade presidents, all contractor associations will be able to become a party
to it. We are hopeful it will be concluded within the next few weeks.
On another front, last year many top business leaders recognized
the effect that construction wage-increases were having on wages across
many other industries. They also recognized the inability of construction
alone to correct the problems. They formed the "Construction Users Anti-
Inflation Roundtable". This group has already done some very good work,
and results are starting to show. Many of you here are members of the
Roundtable. I urge that you continue to support Roger Blough and the
Roundtable.
Government's Role:
Over the last year, our Federal Government has shown concern for
the problems in construction and their effect on the national economy. How-
ever, I understand, and I hope in error, that the Administration has recently
said, in effect, that it cannot, or will not, do much to help solve the labor
problems in construction
on the basis that the unions and manage-
ment should correct the problems by the exercise of "reason", "moderation"
and "self-restraint".
I strongly subscribe to the theory of non-intervention by government
when the private sector is capable of resolving its own problems. However,
looking at the construction industry from a practical viewpoint, the record
is clear that, within its present structure, the private sector alone cannot
do the job.
Reproduced at the Richard Nixon Presidential Library
- 4 -
I refer again to the fragmented industry and the enormous,
concentrated and legally-sanctioned power of the Building Trade Unions.
It is essential that government provide help and leadership. As Roger
Blough has stated: "The Federal Government is clearly the largest con-
struction user and it also has a 'Governmental Obligation', a leadership
role which can not be delegated or deferred".
Government Actions Needed:
Turning directly to my assignment here this morning, "suggestions
for action by the government", the following are my observations:
First, I was particularly encouraged, last fall, by the Adminis-
tration's efforts to reduce its own direct impact on construction-industry
inflation by deferring government construction and minimizing overtime.
Cabinet Committee:
The establishment of the "Cabinet Committee on Construction" was
a most important step forward; and I fervently hope that this Committee,
with its top-level membership, will counsel for stronger and more effective
Administration policies and programs for construction.
Collective Bargaining Commission:
I believe the concept of the Construction Industry Collective
Bargaining Commission is good and I certainly endorse, in principle, the
Commission's "Nine Point Program". However, many people in our in-
dustry think this Commission is strictly an informal talking group and will
not result in much action. I hope this Commission will show more concrete
accomplishments in the near future.
Productivity Commission:
The National Productivity Commission focuses on one of the major
problems of all industry. With construction having some of the worse pro-
ductivity problems of any industry, I strongly urge that this Commission
give considerable attention specifically to construction-labor productivity
problems and their solution.
Multi-Employer Regional Bargaining:
I am greatly encouraged by the Secretary of Labor's recent
support for changing the bargaining concepts in our industry. I fully
endorse the multi-employer regional bargaining proposal; and I urge that
Reproduced at the Richard Nixon Presidential Library
- 5 -
the Administration join with the contractors' associations, who are supporting
this program, and push legislation for enactment at the earliest possible date.
Shortage of Manpower:
It is a mistake to conclude from the recent unemployment figures that
the entire construction industry has unemployment problems. To the
contrary, today, there is an acute shortage of skilled men for heavy and
industrial construction.
The proposed government programs for training armed-forces
personnel and minority groups, and for improved apprentice utilization
should be encouraged and expanded to include retraining of the currently
unemployed and specialty training in the construction trades for all of
these groups.
The barriers of the restricted hiring hall procedures must be
eliminated to facilitate freer hiring. More on this subject later.
Other Government Action:
Additional Federal Government action is necessary at this time.
I recommend the following:
First:
The Administration should actively and properly
enforce existing labor legislation which was intended
to eliminate the "Closed Shop". Make no mistake, --
"union hiring halls", as presently operated in the
construction industry, result in "Closed Shop"
operations.
Second:
The N. L. R. B. administrative procedures should
be altered to speed relief in all cases of illegal strikes
and other violations of labor contracts.
Third:
In connection with the Davis-Bacon Act, at the very
least, the Administration should alter the guidelines
used by the Department of Labor so that wage rates
are no longer established on the basis of the highest
rates in "adjacent" areas.
Fourth:
The Administration should conduct a well-organized
campaign to modernize outmoded and often conflicting
building codes throughout the country. I understand
Reproduced at the Richard Nixon Presidential Library
- 6 -
that the Bureau of Standards has such an assign-
ment; but it needs a real push. Existing archaic
restrictions reduce the use of new technology and
must be eliminated.
Fifth:
Lastly, I suggest that the Administration aggressively
sponsor labor reform legislation relating strictly to
the construction industry. The size and nature of our
industry and its overall effect on the national economy
certainly justify a separate act; and many of the cor-
rective features urgently needed for construction are
not applicable or required for other industries. In
addition to a number of my previous recommendations,
such legislation should include the following provisions:
(A)
Identify and preserve management's rights,
including freedom of hiring and elimination
of supervision from existing collective
bargaining units.
(B)
Strengthen enforcement procedures and place
appropriate penalties for illegal strikes and
violations of labor agreements.
(C)
Eliminate the multitude of on-site feather-
bedding practices and restrictions against
off-site fabrication.
(D)
Return needed authority and responsibility
to the heads of the international unions to give
them the power necessary to control small
militant groups at the local union level who,
in violation of labor agreements, seriously
disrupt the orderly conduct of many construction
projects.
Conclusion:
Gentlemen, we have an extremely bad situation in construction
today. Some of us in the industry have been working to bring about im-
provements; however, without strong assistance from the balance of the
private sector and substantial corrective action by the Government, the
job will not get done.
Reproduced at the Richard Nixon Presidential Library
- 7 -
You, the leaders of our country, will have to make your own
judgment as to the severity of the construction labor problem and the
extent of its influence on the health of our national economy.
If you agree with me that the construction labor situation is an
economic crisis of major national importance, that it is intolerable, and
that it must be corrected; then I hope you also agree that the Federal
Government must inject itself, give strong leadership, and protect the
people of our country against the most cancerous source of inflation in
our national economy today.
Reproduced at the Richard Nixon Presidential Library
pm
THE GOODYEAR TIRE & RUBBER COMPANY
AKRON, OHIO 44316
CHAIRMAN OF THE BOARD
October 19, 1970
The Honorable Paul W McCracken
Chairman, Council of Economic Advisers
Executive Office Building, Room 312
Washington, D C 20506
Dear Paul:
We of the Business Council are indeed grateful
for the time you have taken to be with us for
our program at Hot Springs.
You always do an outstanding job, and we are
very appreciative of your efforts.
Thanks again for being with us.
Sincerely,
Russ
Russell DeYoung
j
Reproduced at the Richard Nixon Presidential Library
MEETING FOLDER
October 22, 1970
Dear Mil:
This is just a quick note to extend to you my own personal
appreciation for the chance to have that discussion last Friday
at the Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. William M. Batten
Chairman
J. C. Penney Company, Inc.
1301 Avenue of the Americas
New York, New York 10019
filed: Meeting Folder
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21, 1970
Dear Jack:
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. John T. Connor
Chairman
Allied Chemical Corporation
61 Broadway
New York, New York 10006
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21, 1970
Dear John:
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. John H. Daniels
Chairman
Archer Daniels Midland Company
Box 1470
Decatur, Illinois 62525
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21, 1970
Dear Amory:
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. Amory Houghton
Honorary Chairman
Corning Glass Works
Corning, New York 14830
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21, 1970
Dear Howard:
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. Howard Morgens, President
The Proctor & Gamble Company
P. O. Box 599
Cincinnati, Ohio 45201
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21, 1970
Dear III : =
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. II. I. Romnes
Chairman
American Telephone &
Telegraph Company
195 Broadway
New York, New York 10007
Reproduced at the Richard Nixon Presidential Library
MEETINGS
October 21. 1970
Dear Ted:
This is just a quick note to extend to you
my own personal appreciation for the chance to
have that discussion last Friday morning at the
Homestead.
It was good to see you there.
Regards,
Paul W. McCracken
Mr. L. B. Smith
Chairman
A.O. Smith Corporation
3533 North 27th Street
Milwaukee, Wisconsin 53216
Reproduced at the Richard Nixon Presidential Library
October 21, 1970
Dear Birny:
This is just a quick note to extend to you
my deep appreciation for the opportunity to meet
with our CEA Liaison Committee Friday morning,
October 16. It was a most helpful discussion.
At the next Washington meeting I hope that
it will be possible to have you visit here at
the Council with all three of us.
Regards,
Paul W. McCracken
Mr. Birny Mason, Jr.
Chairman
Union Carbide Corporation
270 Park Avenue
New York, New York 10017
Reproduced at the Richard Nixon Presidential Library
THE BUSINESS COUNCIL
888 SEVENTEENTH STREET, N.W.
WASHINGTON, D. C. 20006
202/298-7650
MEMORANDUM
October 15th, 1970
TO: Dr. McCracken
The following members of the CEA Liaison Committee are scheduled
to meet with you at breakfast at 7:30 on Friday morning, October
16th:
Birny Mason, Jr. (Chairman of Committee)
William M. Batten Mil
John H. Daniels
John T. Connor
Jeesha
John
Amory Houghton, Jr.
1
Howard Morgens
157m
H. I. Romnes 1+1
L. B. Smith Ted
The meeting will be in the Hunt Room of The Homestead, which
is on the mezzanine floor.
John W. Burke, Jr.
Reproduced at the Richard Nixon Presidential Library
THE
- HOMESTEAD -
NO
SPRINGS. Virginia 24445
1. Bldg Trades vs People
Fortune 10/70
2. 3 factors
a) Large mage J's
b) Decline OPMH
c) Shortage Fahilled
3. Recommendations
a) Cab policies. inter stronger
b) Count mission and Cal Bay, Com-
c) nate Prod. good, Commission
d) adm. jain mich contrast,
togetmento
c)
f)
Reproduced at the Richard Nixon Presidential Library
THE
HOMESTEAD
NOT SPRINGS. Virginia 24445
2.
1.02)
11
S
Fed Dept Stores
Wages
Prices
1968
4.890 5.0%
1969 5.9
5.3
1970 7.4
3.9
Reproduced at the Richard Nixon Presidential Library
is
IL
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13
C+ I + G = 1
10
in
Y-a+I+G
11
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11 too
C=a+by
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13
Reproduced at the Richard Nixon Presidential Library
U. S. TRADE PICTURE: BLACK OR RED?
In order to assess the United States commercial balance of trade with other nations
it is necessary to recognize that different methods are used in computing trade statistics.
The widely published statistics issued by the U.S. Department of Commerce are the results
of imports. methods which overstate the value of U.S. exports while understating the value of U.S.
Total U.S. export values, as determined by the Commerce Department, include Govern-
ment financed exports -- military and economic aid exports and Public Law 480 surplus
agricultural exports. Total U.S. import values, as determined by the Commerce Department,
are based on the free-on-board (f.o.b.) method. The method of valuation of imports used
by most nations, and recommended by the United Nations, includes cost (or free-on-board)
plus insurance plus freight (c.i.f.). Elimination of government financed exports from the
export values, and the revaluation of imports to include insurance and freight can eliminate
a surplus and produce a deficit as shown on the attached graphs. Thus a favorable balance
in the black becomes an unfavorable balance in the red.
For the purpose of statistics, the difference in f.o.b. and c.i.f. values varies
widely. A tariff commission study showed a 10 per cent increase in c.i.f. values above
f.o.b. values with a notation that there are additional costs, aside from c.i.f., which
could run as high as an additional 10 per cent in import values. The International Monetary
Fund uses an increased value of 10 per cent for the c.i.f. method above the f.o.b. method.
For this discussion, an increased value of 6.3 per cent has been used. This is the
conservative estimate of the Bureau of Census -- the federal agency responsible for report-
ing imports -- of the difference in value between the c.i.f. method and the f.o.b. method.
For 1967, the Department of Commerce reported exports of $31.5 billion, imports of
$26.8 billion, and a trade surplus of $4.7 billion. The Department of Commerce identified
as a part of total exports military assistance exports of $592 million, economic aid exports
of $1.3 billion, and P.L. 480 exports of $1.2 billion, or a total of $3.1 billion. If this
amount is removed, total exports drop to $28.4 billion. If imports are revalued from the
f.o.b. basis to a c.i.f. basis, the $26.8 billion total becomes $28.5 billion. Thus a
1967 trade surplus of $4.7 billion becomes a trade deficit of $96 million.
For 1968, the Department of Commerce reported exports of $34.6 billion, imports of
$33.2 billion, and a trade surplus of $1.4 billion. If government financed exports are
removed and imports are restated from the f.o.b. value of imports to a c.i.f. basis, the
surplus becomes a deficit of $3.4 billion.
For 1969, the Department of Commerce reported exports of $38 billion, imports of
$36 billion, and a surplus of $2 billion. If government financed exports are removed and
imports are restated from the f.o.b. value of imports to a c.i.f. basis, the surplus
becomes a deficit of $3 billion.
For the first eight months of 1970, January 1 to August 31, the Commerce Department
reported exports of $28.6 billion, imports of $25.9 billion, and a surplus of $2.7 billion.
Using the best estimates available for government financed exports included, and
restating imports on a c.i.f. basis, the 1970 values show exports of $26.9 billion,
imports of $27.6 billion, and a deficit of $700 million.
U. S. MERCHANDISE TRADE
(Millions of Dollars)
I. U.S. Dept. of Commerce
1967
1968
1969
1970
Exports
$31,526.2
$34,635.9
$38,005.6
$28,614.2
Imports
26,812.3
33,226.3
36,042.8
25,954.7
+$ 4,713.9
+$ 1,409.6
+$ 1,962.8
+$ 2,659.5
II. U.S. Merchandise Trade: Imports (c.i.f.) and Exports Less Value of Government
Financed Exports.
1967
1968
1969
1970
Exports - U.S.D.C.
$31,526.2
$34,635.9
$38,005.6
$28,614.2
Less: Military Aid
592
573
674
365
Economic Aid
1,300
1,056
994
665
PL 480
1,229
1,178
1,018
680
Total
$28,405
$31,829
$35,320
$26,904
3,1
2.8
2.5
Imports (c.i.f.)
28,501
35,319
38,314
27,600
Balance
($
96)
($ 3,490)
($ 2,993)
($
696)
Source: U. S. Department of Commerce FT-990
Reproduced at the Richard Nixon Presidential Library
U.S. MERCHANDISE TRADE
(In Billions of Dollars)
Comparing the method used by the U. S. Dept. of Commerce with the
World Method as recommended by the United Nations.
Chart 1
IMPORTS
67
68
COMMERCE
DEPT.
69
METHOD
70*
EXPORTS
67
68
WORLD
METHOD
69
70*
0
$ 5
$10
$ 15
$ 20
$ 25
$ 30
$ 35
$ 40
*First eight months only.
Chart 2
+ $ 4
COMMERCE
DEPT.
METHOD
+ $ 2
SURPLUS
0
WORLD
- $ 2
METHOD
DEFICIT
- $ 4
67
68
69
70 *
*First eight months only.
Chart 3 (1970 Annual Data not Available)
COMMERCE DEPT. METHOD
WORLD METHOD
$ 40
$ 40
EXPORTS
SURPLUS
IMPORTS
DEFICIT
$ 35
$ 35
IMPORTS
EXPORTED
$ 30
$ 30
$ 25
$ 25
67
68
69
67
68
69
Reproduced at the Richard Nixon Presidential Library
THE BUSINESS COUNCIL
The Homestead
October 16th and 17th, 1970
Hot Springs, Virginia
EASTERN DAYLIGHT TIME
Tentative Agenda
Saturday, October 17th
E. D. T.
8:30 a.m.
Convene in Commonwealth Room
Report on the Domestic Economy
Birny Mason, Jr., Chairman
CEA Liaison Committee
8:50 a. m. to
Panel Discussion of Economic Problems
Adjournment
Government Speakers --
Business Council Speakers --
The Honorable David M. Kennedy
S. D. Bechtel, Jr.
The Secretary of the Treasury
Construction
The Honorable Maurice H. Stans
Donald C. Burnham
The Secretary of Commerce
Electrical Manufacturing
The Honorable George P. Shultz
Ellison L. Hazard
Director
Containers
Office of Management and Budget
Ralph Lazarus
The Honorable Arthur F. Burns
Retail
Chairman
Federal Reserve System
Roger Milliken
Textiles
The Honorable Paul W. McCracken
Chairman
James M. Roche
Council of Economic Advisers
Automotive
There will be a break for coffee from 10:05 a. m. to 10:20 a. m.
12:30 p.m.
ADJOURN
There will be no afternoon business session.
7:00 p.m.
Reception and Dinner - Black Tie
Commonwealth Room
Speaker -- The Honorable Herbert G. Klein
Director of Communications for the Executive Branch
Reproduced at the Richard Nixon Presidential Library
for orderly and sur
Whatan the ingredunts B TO John
/. W
2.
Reproduced at the Richard Nixon Presidential Library
1
Text Copy
THE CURRENT POSITION OF THE ECONOMY
1. The rate of inflation has declined appreciably, though cost pressures
under the price level remain. (The U.S. is closer to bringing
inflation under control than most of the other major industrial nations.)
2. In the near term the path for the economy will be quite disturbed by the
GM strike and its repercussions, though the next major move in the economy
will be upward.
3. There are some problem areas with significant implications for economic policy.
a.
Cost-price-profit relationships continue to be the most vexing
problems for economic policy. While compensation per man hour
for the whole private nonfarm economy is rising less rapidly,
the size of newly negotiated wage settlements is not diminishing.
b.
The return to reasonably full employment by mid-1972 will require
a vigorous pace for the economy in 1971 and 1972.
Reproduced at the Richard Nixon Presidential Library
2
PRICE-COST DEVELOPMENTS
Reproduced at the Richard Nixon Presidential Library
3
PRICE-COST DEVELOPMENTS
1.
The rate of inflation has decelerated appreciably.
Monthly Rise in Price Indexes, 1970
(Seasonally adjusted)
Month
CPI
Industrial WPI
January
.6%
.3%
February
.5
.2
March
.4
.2
April
.5
.5
May
.5
.4
June
.3
.2
July
.3
.3
.
August
.2
.2
September
(Available 10/21)
.3
Source: BLS
Reproduced at the Richard Nixon Presidential Library
4
PRICE-COST DEVELOPMENTS
2.
Compensation per man hour, productivity, and labor costs per unit of
output in the private nonfarm economy took a turn for the better in
the second quarter.
Annual Rate of Change over Preceding Quarter
Year and
Compensation
Output per
Unit Labor
Quarter
per man-hour
man-hour
costs
1969-1
5.5%
-1.5%
7.1%
2
5.8
-.4
6.3
3
7.3
.6
6.6
4
7.7
.3
7.3
1970-1
6.6
-2.9
9.8
2
5.6
3.3
2.2
Source: Bureau of Labor Statistics
Reproduced at the Richard Nixon Presidential Library
5
NEAR-TERM ECONOMIC PROSPECTS
Reproduced at the Richard Nixon Presidential Library
6
NEAR-TERM ECONOMIC PROSPECTS
The economy will mark time until the auto work stoppage is resolved. The next
major move in the economy should then be upward. Statistics coming out in
October and November will not, of course, be good reading.
1.
"Leading indicators", apart from the strike, are not ebullient, but
they appear to have passed their low point.
Leading Economic Indicators, 1970
Private
Manufacturing
Composite
Dow Jones
New Orders,
Housing
Length of
Month
Index
Industrials
Durable goods b/
Starts c/
Work Week
January
115.8
782.96
$29.0
1,059
40.3
February
116.5
756.21
29.4
1,306
39.9
March
114.9
777.62
28.9
1,392
40.2
April
115.0
771.65
28.4
1,224
40.0
May
113.8
691.96
30.0
1,242
39.8
June
114.0
699.30
30.0
1,393
39.8
July
115.8
712.80
31.4
1,591
40.1
August
115.4
731.97
30.6
1,431
39.8
September
(Available 10/27)
759.38
(Available 10/21)
(Available 10/16)
39.4
Source:
Business Conditions Digest, U.S. Dept. of Commerce. Seasonally
adjusted where relevant.
1967=100
b/
In billions
Reproduced at the Richard Nixon Presidential Library
c/ In thousands, annual rate.
7
NEAR-TERM ECONOMIC PROSPECTS
2.
Monetary policies have been expansionist since February. This contrasts
with the policy of restraint in 1969.
Rate of Monetary Expansion
(Seasonally adjusted annual rate)
Money
Bank
Period
Supply
Credit
12/66 - 6/68
6.8%
9.9%
6/68 - 12/68
7.1
15.5
12/68 - 6/69
4.4
4.2
6/69 - 2/70
0.2
0.9
2/70 - 9/70
5.7
9.6
Source: Federal Reserve
Reproduced at the Richard Nixon Presidential Library
8
NEAR-TERM ECONOMIC PROSPECTS
3.
Fiscal policy (the budget) has also become less restrictive than during 1969.
Federal Budget on a GNP Basis
(Billions, seasonally adjusted annual rates)
At full employment
Period
Expenditures
Receipts
Surplus
Receipts
Surplus
1967:
First half
$160.2
$148.2
-$12.0
$149.8
-$10.4
Second half
166.9
154.2
- 12.7
156.4
- 10.4
1968:
First half
177.5
167.6
- 9.8
168.0
- 9.4
Second half
185.7
183.2
- 2.6
183.4
- 2.4
1969:
First half
188.4
199.8
11.4
200.3
11.9
Second half
194.2
201.4
7.2
206.3
12.1
1970:
First half
204.3
196.3
- 8.0
209.3
5.0
Second half b/
210.2
194.4
- 15.8
212.2
2.0
1971: First half b/
220.0
207.6
- 12.4
225.2
5.2
Source: Commerce, OMB, and CEA
a/ These data should be interpreted as general orders of magnitude
b/ Projections
Reproduced at the Richard Nixon Presidential Library
9
NEAR-TERM ECONOMIC PROSPECTS
4.
GNP, according to a Commerce Department projection made last month,
rose $14-1/2 billion in the third quarter.
Improvements occurred in the growth of real GNP and in the rate of
inflation.
Percent change in
$ increase in GNP
Real GNP
GNP Deflator
Year-Quarter
(billions)
(annual rate)
1970-1
7.8
-2.9%
olo
6.4%
2
11.6
0.6
4.3
3 (projection)
14.5
1.8
4.2
Reproduced at the Richard Nixon Presidential Library
10
NEAR-TERM ECONOMIC PROSPECTS
5.
The U.S. international trade position has responded well to
measures of disinflation.
U.S. MERCHANDISE TRADE
(Monthly averages, seasonally adjusted, in millions)
Yr - Qtr
Exports
Imports
Surplus
1965
$2,229
$1,786
$444
1966
2,458
2,135
323
1967
2,586
2,241
345
1968
2,839
2,769
70
1969
3,111
3,004
107
1970 - 1
3,437
3,240
198
2
3,640
3,306
334
3a/
3,642
3,303
339
a/ July-August average.
Source: Department of Commerce
Reproduced at the Richard Nixon Presidential Library
11
SOME MAJOR PROBLEM AREAS FOR ECONOMIC POLICY
Reproduced at the Richard Nixon Presidential Library
12
PROBLEM-AREAS FOR ECONOMIC POLICY
1.
The cost-price profit situation and outlook, while showing some improvement
over all, leave much to be desired. While compensation per man-hour for
the whole private non-farm economy is rising less rapidly, no comparable
deceleration is evident for newly negotiated labor contracts.
Annual Rates of Increase
In Compensation Per Man-Hour and Wages
Compensation
New Bargaining Decisions b/
Yr. - Qtr.
Per Man-Hour
Mfg.
Construction
1969 - 1
5.5%
5.3%
6.1%
2
5.8
6.2
13.4
3
7.3
6.5
13.9
4
7.7
6.8
11.7
1970 - 1
6.6
5.5
13.1
2
5.6
6.6
14.6
Source: BLS
In the private nonfarm economy. Seasonally adjusted.
b/
Average yearly increase over life of contracts in major collective bargaining
decisions during the quarter.
Reproduced at the Richard Nixon Presidential Library
13
PROBLEM-AREAS FOR ECONOMIC POLICY
Profitability in the economy tends to be relatively low. A major concern is
that our strategy, which relies on general restraint to create markets inhospitable
to price increases, will squeeze profits to the point of damaging the capacity of
the economy for vigorous expansion.
Corporate Profits After Taxes
(Seasonally adjusted annual rates)
Yr. - Qtr.
Amount*
% GNP
1958
$22.33
4.99%
1961
27.24
5.24
1966
49.94
6.66
1967
46.64
5.87
1968
48.18
5.57
1969
48.54
5.21
1969 - 1
49.50
5.45
2
49.70
5.38
3
47.90
5.08
4
47.10
4.95
1970 - 1
44.60
4.65
2
43.90
4.52
Source: Department of Commerce
*
In billions
Reproduced at the Richard Nixon Presidential Library
14
PROBLEM-AREAS FOR ECONOMIC POLICY
2.
We also face a problem of achieving an expansion sufficiently vigorous to
regain reasonably full employment by, say, mid-1972.
Growth Required for Full Employment
Item
Percent
Two-years real growth in economy's capacity
8-1/2%
Plus: Present shortfall to make-up
4-1/2
Plus: Unavoidable two-year price slippage
6
Equals: Total needed two-year rise in GNP
19-20%
GNP would, therefore, need to rise from this year's second-quarter rate
of $971 billion to something like a $1,110 billion rate by the fourth
quarter of 1971, and to about $1,165 billion by the second quarter of
1972.
It is doubtful if this can be attained with our present fiscal and
monetary policies.
Reproduced at the Richard Nixon Presidential Library
15
PROBLEM-AREAS FOR ECONOMIC POLICY
If the money supply continues to increase at the 6 percent rate that has prevailed
since February, and the slow decline in the money supply relative to GNP continues
(ignoring strike distortions), a GNP of something like $1,085 billion might be
achieved by the end of next year. This would leave unemployment at about 5 percent
a year from now.
GNP, the Money Supply, and the Unemployment Rate,
with a Continuation of "Present Policy"
(Dollar amounts in billions, seasonally adjusted annual rates)
Money Supply
Year-Quarter
GNP
Amount
Percent GNP
Unemployment Rate
1970-1
$ 960
$200.6
20.9%
4.2%
2
971
203.6
20.9
4.8
3
985
206.5
20.9
5.2
4
995
209.4
21.0
5.5
1971-1
1,023
212.5
20.8
5.4
2
1,045
215.6
20.6
5.2
3
1,066
218.8
20.5
5.3
4
1,086
222.0
20.4
5.3
Note: GNP starting in third quarter 1970 affected by GM strike, which is
assumed to end November 15.
Source: Basic data from Departments of Commerce, Labor, and Federal Reserve.
Projections by CEA.
Reproduced at the Richard Nixon Presidential Library
16
PROBLEM-AREAS FOR ECONOMIC POLICY
Fiscal policy, with the present budget and prospective
tax changes, will be less expansionary in FY 1972 than
in FY 1971
Key Projected Budget Changes
(In billions, unified budget)
FY 1970
FY 1971
Item
- FY 1971
-FY 1972
Increase in outlays
$16
$14
Net reduction in revenue-producing
capacity of tax system
4
-
Total
20
14
Reproduced at the Richard Nixon Presidential Library
POLICY QUESTIONS
Reproduced at the Richard Nixon Presidential Library
18
POLICY QUESTIONS
1.
Should the basic objective of economic policy be to
regain roughly a 4 percent unemployment rate by mid-1972?
This rate of increase might well mean that, after a quiescent
period in 1971, the rate of inflation would be rising again.
A path that would assure a more stable price level, however,
will leave the unemployment rate in the 5 to 5-1/2 percent
zone.
Reproduced at the Richard Nixon Presidential Library
19
POLICY QUESTIONS
2.
There is a substantial measure of agreement that present
fiscal and monetary policies will not give us the economic
momentum needed in 1971 and early 1972 to bring unemploy-
ment back to the 4 percent zone.
a.
Should we alter our budget guidelines for
198 213.6 212 F.E.
FY 1972?
b.
How should the Administration give expression
to any interest it may have about monetary
policy?
Reproduced at the Richard Nixon Presidential Library
20
POLICY QUESTIONS
3.
Should the Administration develop a more activist price-cost policy?
a.
Key speeches could say more. The next "Inflation Alert" (scheduled
for mid-November) could articulate more pointedly the basic logic of
the relationship between wage increases, productivity, cost and price
increases, changes in real wages and incomes, and employment. The
next Economic Report could focus more sharply on this issue.
b.
The Productivity Commission could be given greater scope and impact
by an enlarged program and staff.
C.
The Regulations and Purchasing Review Board could be asked for a
tough and comprehensive program of recommended actions. (Almost every
item would have political and social sensitivity.)
d.
The Cabinet Committee on Construction could be reactivated and instructed
to bring back comprehensive recommendations for this industry, where
wage inflation has been severe. (Again the items will be sensitive.)
Reproduced at the Richard Nixon Presidential Library
AP 10/16/70 Hot Springs, Virginia
There is rising concern among the Nation's industrialists
that continuation of the General Motors strike may prevent an
otherwise expected upturn of the U.S. economy. Except for the
month-end strike by the United Auto Workers, members of the
prestigious Business Council say privately that they would look
for a business upswing by the end of the year.
About 100 council members, including the heads of scores
of the Nation's largest corporations, are in this Virginia resort
city for closed meetings with high administration officials. All
the members of President Nixon's economic high command are
scheduled to participate this weekend.
A widespread effect of the General Motor strike, now
beginning to spread its paralysis among supplier industries, was
seen as a strong key to the economy's health -- including un-
employment.
Council members generally felt the September jobless rate of
5.5% is about as high as unemployment will go, unless the General
Motors strike goes on for long.
"If the strike is not settled within a few weeks -- say by
Thanksgiving -- I think we will be going down hill by New Years,"
one manufacturing company president said privately.
Reproduced at the Richard Nixon Presidential Library
-2-
A settlement on the other hand, can do much to improve the
economic outlook by restoring the confidence of consumers, the
business leaders agreed. Buyers are sitting on their pocketbooks
because of uncertainty over jobs, prices, and the general state of
the economy, the head of one major retailing corporation said.
This executive expects an upturn in the next 2-3 months, but the
expectation is based on his belief that the present high rate of
consumer savings cannot be sustained much longer. The rate
averaged 7 1/2% this summer.
"If we could arrive at a situation of stability for a while,
with prices holding steady and no more job layoffs, people would
stop saving so much and start spending more, 11 a businessman
predicted.
A discussion of economic problems was scheduled for
Saturday's closed session of the Council, with the Government
represented by Cabinet Secretaries Kennedy and Stans, George
Shultz, CEA head McCracken and Art Burns of the Federal Reserve
Board.
########
Reproduced at the Richard Nixon Presidential Library
I. my remanhs side he the
fibred D two questions
A. what does the consrenh
emifonce idivate about
the forture conself the economy?
B. hat arethe Bay areas of
comern for policy
II. Evidence ananlale about
the vntcook
A. Certainly there are weak
aspects of the picture
1, Unimp, FRB.
2. Leading indinators are
for from chnllient.
3. With GMstrike, large
erratin manemente
B. GNP data do show a slow
improvement. 1, GNP D's, 1970
Qtr CurD 1TD Deflator
/
#7.8
-2.9%
4.4
2
10.6
0.6
4.3
3
14.1
1.4
4.4
(x stribe)3 14-17 2.5
4.1
2, In spite of 2 drags.
airs A +4.0bn
amigiabo's
b. San rate; 7.670, was
6,500 Reproduced at the Richard Nixon Presidential Library sides.
C. Economic policies have
been more expanision's
for some monhn
1,
s M ss M SS
Period
Person
4/69-2/70 6/49- 2/70
0.2%
2/70-9/70 2/70 - 9/70
5.7
Z. Fiscalpoling also
more
3. not grite in the zone
where munhof the
effect monddlie visible
III, Key issues for policy
AF. How rapod should plse
expansion he 1.
Short force
4½ To
> Capacity
4
B. W hat is aproper strategy
tignide final policy.
C. We where
meare to a more stable
costiprine lends
/, These are somne arom
phatments,
a, The CPI has de -
celerated
b. >Comp ./MH, put. non-
fam economy, has
hun declaring
Reproduced at the Richard Nixon Presidential Library
2, no comparatele decelera- -
tion in newly negotanted
mage
a, Lagon top sixes
b, Hardti make the
break ta lowesper
Reproduced at the Richard Nixon Presidential Library
OPTIONAL FORM NO. 10
MAY 1962 EDITION
GSA FPMR (41 CFR) 101-11.6
UNITED STATES GOVERNMENT
Memorandum
TO
: Paul McCracken
DATE: October 16, 1970
FROM : Marvin Kosters MK
SUBJECT: Seasonally adjusted State Insured Unemployment Rates
State insured weekly unemployment rates are presented below
for the past 10 weeks. The most recent available data are for the
week ending October 3.
State Increased Unemployment Rates
Week ending
Not seasonally adjusted
Seasonally adjusted
Aug. 1
3.4
3.9
8
3.3
3.8
15
3.3
3.9
22
3.2
3.9
29
3.1
3.9
Sept. 5
2.9
3.8
12
3.1
4.2
19
2.9
4. 0
26
3.0
4. 2
Oct. 3
3.1
4. 4
Seasonally adjusted rates were computed using unofficial seasonal
adjustment factors provided by BLS.
Buy U.S. Savings Bonds Regularly on the Payroll Savings Plan
5010-108
Reproduced at the Richard Nixon Presidential Library
NEWS
U.S. DEPARTMENT OF LABOR
OFFICE OF INFORMATION, WASHINGTON, D. C. 20210
FOR RELEASE: A.M. Editions
USDL - 11-368
Tuesday, August 4, 1970
Bureau of Labor Statistics
961-2158
PRODUCTIVITY, WAGES, AND PRICES
Second Quarter, 1970
Productivity, as measured by output per man-hour in the private
economy, improved markedly in the second quarter, after five quarters of
little gain or actual declines, the Labor Department's Bureau of Labor
Statistics reported today.
The BLS report--Review of Productivity, Wages, and Prices--shows
that output per man-hour increased at an annual rate of 3 percent during
the second quarter. Productivity rose because man-hours of work continued
to drop sharply, while output leveled off after a decline.
The gain in productivity meant a lessening of the pressure of
rising wages on costs. The increase in unit labor costs was about 2 percent
at an annual rate, or less than one-third of the average rise last year. The
uptrend in hourly compensation also slowed somewhat, reflecting such factors
as reduced overtime.
The average size of union contract settlements increased markedly
in the second quarter in nonmanufacturing industries, but in manufacturing
there was little change from recent quarters.
The rate of rise in prices slowed somewhat in the second quarter,
chiefly in agricultural items and industrial crude materials.
Reproduced at the Richard Nixon Presidential Library
U.S. DEPARTMENT OF LABOR
Bureau of Labor Statistics
Washington, D.C. 20212
August 3, 1970
REVIEW OF PRODUCTIVITY, WAGES, AND PRICES
Second Quarter, 1970
Summary
Productivity growth improved markedly in the second quarter,
thereby tending to lessen the pressure of rising wages on costs; the
increase in unit labor costs was substantially less than in recent
quarters. Increases in prices slowed somewhat in the second quarter,
although the slackening was much more in agricultural items and indus-
trial crude materials than in manufactured products.
The gain in output per man-hour in the private economy was 3.1
percent at an annual rate in the second quarter--about equal to the
postwar average--after five quarters of little change or actual de-
clines. It reflected a leveling off in output while cutbacks in man-
hours of work continued sharp. The rate of advance in unit labor costs
was 2 percent, or less than one-third of the average increase last
year.
Average hourly compensation of persons in the private economy
gained by 5.1 percent in the second quarter, somewhat less than in
any of the previous five quarters. Rising basic pay scales were off-
set to a degree by such factors as cutbacks in overtime work and dis-
proportionately heavy layoffs of workers in higher-paid industries.
Partly as a result, weekly earnings in the private sector declined
rather sharply in terms of real purchasing power in the first two quar-
ters of this year.
The size of union contract settlements increased markedly in the
second quarter, but these settlements, of course, affect only a fraction
of the work force.
Price rises slackened somewhat in the second quarter. The in-
crease in wholesale prices, seasonally-adjusted, was at an annual rate
of only 1 percent, for the smallest advance in two years. Slackening
was chiefly in livestock and meats and in industrial crude materials.
However, industrial commodities as a whole rose more than in the first
quarter because of sharper advances in intermediate materials, particu-
larly steel mill products. The consumer price rise was a little slower
than in three of the previous four quarters, mostly in food. The in-
crease in the GNP implicit price deflator was also somewhat smaller than
for several quarters past.
Reproduced at the Richard Nixon Presidential Library
- 2 -
Productivity and Unit Labor Costs
Private economy
Output per man-hour in the private economy increased at an
annual rate of 3.1 percent in the second quarter--about in line with
the postwar average--after five quarters of very small gains or actual
declines. (Table 1.) The sharp recovery resulted from a leveling
off in output after two quarters of declines, and an unusually large
reduction in man-hours of work, at an annual rate of 2.9 percent. This
cutback was primarily in employment rather than hours of work.
The rise in unit labor costs slackened in the second quarter to
an annual rate of 1.9 percent, compared with increases of 6 to 10 per-
cent for several quarters past. The slowing mostly reflected the
marked improvement in productivity; in addition, there was some modera-
tion in the strong uptrend in hourly compensation.
Two additional statistical series related to cost and price
movements are presented in this report--the GNP implicit price defla-
tor of the Department of Commerce and unit non-labor payments. (Non-
labor payments include profits, depreciation, interest, and indirect
taxes--those elements of the price deflator other than labor costs).
In the second quarter, the rate of rise in the price deflator slackened
only slightly, while the increase in unit labor costs lessened markedly,
so that a sizeable rise occurred in unit nonlabor payments, after two
quarters of decline. (Tables 1 and 2.)
Manufacturing
Output per man-hour in manufacturing increased at an annual rate
of 5.2 percent in the second quarter--the largest gain in more than a
year. (Table 3.) Although output again declined at a 4 percent rate,
the cutback in man-hours of work was more than 8 percent. Most of the
reduction of man-hours in the private economy took place in manufacturing.
With productivity improving sharply and hourly compensation rising
at about the same rate as in recent quarters, the increase in unit labor
costs in manufacturing slowed sharply to 1.7 percent in the second
quarter. This was the smallest advance in several years.
Wages, Salaries, and Benefits
Both average hourly compensation including fringe benefits of
persons in the private economy and average hourly earnings of employees
in the private nonfarm sector increased somewhat less in the second quarter
Reproduced at the Richard Nixon Presidential Library
- 3 -
than in any quarter of last year. (Table 4.) Two factors were import-
ant in this slowing down: The cutbacks in overtime work at premium
rates of pay; and the relatively heavier layoffs of workers and cut-
backs in working hours in high-paying durable goods lines, thereby
reducing the proportion of high-wage hours of work and employment in
the total.
Weekly earnings in the private nonfarm economy rose 3.1 percent
in the second quarter--about the same as in the first quarter, but less
than half the average quarterly rise last year. The slackening reflected
both a reduction in hours of work and the slower gain in hourly pay.
Weekly earnings in real' terms--adjusted for price increases--have de-
clined for the past three quarters.
Major union collective bargaining settlements were markedly
higher in the second quarter. For wages and benefits combined, they
averaged 10.9 percent annually over the life of the contract and 17.1
percent in the first year. The increase in size of settlements was mostly
in the nonmanufacturing sector. In manufacturing, on the other hand,
the size of wage settlements did not increase much from recent quarters.
(Table 6.) Current wage agreements, of course, cover only a small pro-
portion of all working people.
Prices
Prices, on a seasonally-adjusted basis, rose a little less on
the average in the second quarter this year than in the first, particu-
larly in farm products and foods. The wholesale price rise slowed from
an annual rate of 4 percent in the first quarter to 1 percent in the
second, the smallest rise in two years. The consumer price rise slack-
ened to a 5.7 percent annual rate in the second quarter, from 6.3 per-
cent in the preceding two quarters. (In July, wholesale price increases
of farm products and foods accelerated, but industrial commodity prices
rose at about the same rate as in June.)
The slackening in the wholesale rise came largely in crude indus-
trial materials, in addition to farm products and foods. (Table 9.) Some
slowing also occurred in producer finished goods and consumer durables.
Industrial commodity prices as a whole, however, rose somewhat more in
the second quarter than in the first, because of a sharper advance in
intermediate materials.
Farm product and food prices actually declined in the second
quarter, after seasonal adjustment, mainly in livestock, meats, and
poultry and eggs. The drop reflected an increase of supplies, combined
with rather slack demand because of a slow growth of wage income. The
trend in meat prices this year contrasts sharply with the second quarter
a year ago, when a steep rise occurred.
Reproduced at the Richard Nixon Presidential Library
-4-
The slowing in crude materials was largely in metals, where
supplies have been growing and demand from industry lessening. Rapidly
advancing metal prices were a major factor in the industrial price rise
last fall and winter. In June, nonferrous metal prices declined for
the first time in two years.
In prices of intermediate materials, the acceleration in the
second quarter chiefly reflected a significant rise in steel mill pro-
ducts. Other factors included an upturn in industrial chemicals, leather,
and plywood, which had declined through most of last year; and a smaller
decrease for lumber than in the four preceding quarters. At the end of
the second quarter, the industrial price rise appeared to be slackening
again.
In consumer prices, the slowing was chiefly in meats, poultry,
and eggs. (Table 8) Services also rose significantly less sharply than
in the first quarter, largely in public transportation charges and mortgage
interest rates. On the other hand, commodities other than food rose more
on the average than in the first quarter, mainly in used cars, gasoline,
and cigarettes. Used car prices often rise sharply in a period of economic
slack, when many buyers purchase used cars instead of new ones.
Reproduced at the Richard Nixon Presidential Library
Table 1. Output per Man-hour, Hourly Compensation, Unit Costs, and Prices
in the Private Economy, Seasonally Adjusted
(Indexes 1957-59=100)
Real
Year and
Output per
Compensa-
Unit labor
Unit non-
Implicit
compensa-
Output
Man-hours
man-hour
tion per
tion per
labor pay-
quarter
costs
price
man-hour 1/
man-hour 2/
ments 3/
deflator 4/
1969
1st
159.0
114.2
139.3
170.0
136.3
122.1
122.8
122.4
2nd
159.8
115.1
138.9
172.4
136.0
124.2
123.2
123.8
3rd
160.9
115.3
139.5
175.9
136.8
126.1
123.6
125.2
4th
160.4
114.8
139.7
179.6
137.8
128.6
123.3
126.6
Annual Ave.
160.0
114.9
139.3
174.5
136.8
125.3
123.2
124.5
1970
1st
159.2
114.7
138.9
182.6
138.0
131.5
122.7
128.3
2nd
159.3
113.8
139.9
184.9
137.5
132.2
125.2
129.5
5/
Percent Change Over Previous Quarter at Annual Rate
1969
1st
2.8
3.4
- 0.5
6.2
1.2
6.7
1.4
4.7
2nd
2.1
3.3
- 1.1
5.9
- 1.0
7.1
1.5
4.9
3rd
2.5
0.9
1.6
8.2
2.3
6.5
1.1
4.5
4th
- 1.0
- 1.8
0.8
8.8
3.0
7.9
- 0.8
4.7
6/
Ann. Ave.
2.9
2.2
0.7
7.2
1.8
6.5
1.2
4.5
1970
1st
- 3.0
- 0.5
- 2.5
6.8
0.5
9.6
- 2.0
5.3
2nd
0.1
- 2.9
3.1
5.1
- 1.3
1.9
8.2
4.1
Percent Change Over Previous Year
1970
2nd quarter 7/ - 0.3
- 1.1
0.8
7.2
1.1
6.4
1.6
4.6
See footnotes at end of table 3.
NOTE: Data have been revised to reflect new benchmarks.
Revisions of earlier data are shown on appendix
table 10.
Reproduced at the Richard Nixon Presidential Library
Table
2. Output per Man-hour, Hourly Compensation, Unit Costs, and Prices
in the Prívate Nonfarm Sector, Seasonally Adjusted
(Indexes 1957-59=100)
Real
Compensa-
Unit non-
Implicit
Year and
Output per
compensa-
Unit labor
Output
Man-hours
tion per
labor pay-
price
quarter
man-hour
tion per
costs
man-hour 1/
man-hour
2/
ments 3/
deflator 4/
1969
1st
161.1
120.1
134.1
163.9
131.5
122.2
123.0
122.5
2nd
162.4
121.2
134.0
166.2
131.1
124.1
123.0
123.7
3rd
163.4
121.7
134.2
169.2
131.6
126.1
123.5
125.1
4th
163.1
121.4
134.3
172.4
132.2
128.4
123.2
126.4
Annual Ave.
162.5
121.1
134.2
167.9
131.6
125.2
123.2
124.5
1970
1st
161.9
121.4
133.3
175.1
132.3
131.4
122.0
127.9
2nd
161.9
120.4
134.4
177.5
132.0
132.1
124.7
129.4
Percent Change Over Previous Quarter at Annual Rate 5/
1969
1st
2.6
4.2
- 1.5
5.5
0.5
7.1
1.1
4.8
2nd
3.1
3.6
- 0.4
5.8
- 1.0
6.3
0.0
3.9
3rd
2.5
1.9
0.6
7.3
1.4
6.6
1.5
4.7
4th
- 0.6
- 1.0
0.3
7.7
1.9
7.3
- 1.0
4.3
Ann. Ave.
6/
3.0
2.7
0.3
6.7
1.3
6.4
0.8
4.3
1970
1st
- 2.9
- 0.1
- 2.9
6.6
0.3
9.8
- 3.8
4.8
2nd
- 0.1
- 3.3
3.3
5.6
- 0.9
2.2
9.3
4.6
Percent Change Over Previous Year
1970
2nd quarter 7/ - 0.3
- 0.6
0.3
6.8
0.7
6.5
1.4
4.6
See footnotes at end of table 3.
NOTE:
Data have been revised to reflect new benchmarks.
Revisions of earlier data are shown on appendix
table 10.
Reproduced at the Richard Nixon Presidential Library
Table 3. Output per Man-hour, Hourly Compensation and Unit Labor Costs in the
Manufacturing Sector, Seasonally Adjusted, (Indexes 1957-59=100)
Year and
Man-hours 9/
Output per
Compensation per
Real compensation
Unit labor
Output 8/
quarter
man-hour 9/
man-hour 9/
per man-hour 2/, 9/
costs
1969
1st
170.8
122.2
139.8
157.8
126.5
112.9
2nd ...
172.8
123.4
140.0
159.5
125.8
113.9
3rd
173.9
123.4
140.9
162.8
126.6
115.6
4th
170.8
122.5
139.4
165.2
126.7
118.5
Annual Ave.
172.1
122.9
140.0
161.4
126.5
115.2
1970
1st
168.9
120.6
140.0
167.9
126.8
119.9
2nd
167.2
117.9
141.8
170.7
126.9
120.4
Percent Change Over Previous Quarter at Annual Rate 5/
1969
1st
1.9
0.9
1.4
6.2
1.2
4.7
2nd
4.8
3.8
0.6
4.6
- 2.2
3.6
3rd
2.6
0.1
2.6
8.5
2.5
6.1
4th
- 6.9
- 2.8
- 4.2
5.8
0.1
10.4
6/
Ann. Ave.
3.9
1.8
2.1
6.4
0.9
4.2
1970
1st
- 4.4
- 6.1
1.7
6.7
0.4
4.8
2nd
- 4.0
- 8.7
5.2
7.0
0.4
1.7
Percent Change Over Previous Year
1970
2nd quarter 7/ - 3.2
- 4.4
1.3
7.0
0.9
5.7
See footnotes at end of table.
NOTE:
Data have been revised to reflect new benchmarks.
Revisions of earlier data are shown on appendix
table 10.
Reproduced at the Richard Nixon Presidential Library
FOOTNOTES, TABLES 1 TO 3
Source: Output data from the Office of Business Economics,
U.S. Department of Commerce and the Federal Reserve Board. Com-
pensation and man-hours data from the Bureau of Labor Statistics,
U.S. Department of Labor and the Office of Business Economics.
1/ Wages and salaries of employees plus employers' contri-
butions for social insurance and private benefits plans. Also
includes an estimate of wages, salaries, and supplemental payments
for the self-employed.
2/ Compensation per man-hour adjusted for changes in the
Consumer Price Index.
3/ Nonlabor payments include profits, depreciation, interest,
rental income and indirect taxes.
4/ Current dollar gross product divided by constant dollar
gross product.
5/ Percent change compounded at annual rate from original
data.
6/ Percentage change of annual average.
7/ Current quarter divided by comparable quarter a year ago.
8/ Quarterly measures adjusted to annual estimates of output
(gross product originating) from the Office of Business Economics,
U.S. Department of Commerce.
9/ Employees only.
Reproduced at the Richard Nixon Presidential Library
Table 4. Quarterly trends in compensation, 1968-70
(Computed from seasonally adjusted quarterly data)
Percent change over previous quarter at annual rate
Measure
1968
1969
1970
June
Sept.
Dec.
March
June
Sept.
Dec.
March
June
Average hourly compensation:
All persons, total private
economy
5.9
8.5
8.5
6.1
5.8
8.4
8.7
6.9
5.1
All employees, private nonfarm
economy
5.7
7.0
8.7
5.5
5.8
7.3
7.7
6.6
5.6
Average hourly earnings, private
nonfarm economy 1/2/
6.9
6.2
6.7
6.5
7.9
6.8
7.1
3.9
6.1
Mining
4.1
6.2
6.9
11.3
5.4
7.3
7.6
7.3
4.3
Contract construction
5.1
7.2
7.8
6.3
12.8
9.0
10.9
8.0
7.7
Manufacturing
6.5
5.5
7.2
4.9
6.0
7.8
5.1
3.4
6.2
Excluding effects of overtime
and interindustry employment shifts
---
6.0
5.6
6.4
5.4
5.7
6.7
6.0
5.7
NA
Wholesale and retail trade
5,
7.6
6.9
6.2
5.5
5.6
8.2
7.3
5.3
4.6
Finance, insurance, and real estate
8.8
9.1
6.9
7.7
1.8
5.2
7.0
5.9
3/
Average hourly earnings, all Federal
executive branch employees 4/
.4
2.0
4.5
1.0
2.6
4.7
3.8
1.9
NA
Average union scales, building construction:
Wages and selected benefits
10.7
12.0
10.9
7.0
14.8
10.0
5.8
5.7
25.6
Hourly wage rates
7.4
9.8
10.4
7.0
12.4
8.9
5.8
5.7
22.8
Wage rates, hired farm labor
11.8
20.8
2.7
5.3
8.0
10.5
2.5
-2.5
10.2
Average weekly earnings, private nonfarm
economy: 1/
Current dollars
6.1
7.4
4.7
6.4
8.3
6.1
5.4
2.9
3.1
1957-59 dollars
2.2
2.8
-.6
1.0
1.5
.8
-.5
-4.1
-2.6
Real spendable earnings (worker and 3
dependents 1957-59 dollars)
.5
2.0
-1.7
-1.4
-.6
3/
-1.3
-1.0
-2.7
1/ Production and nonsupervisory workers.
2/ Includes industries not shown separately.
3/ Less than 0.05 percent.
4/ Computed from data that are not seasonally adjusted. Actual percent change rather than annual rate of
change is shown where change is affected by a general salary adjustment.
TE: Data for most recent quarter are prelimina
NA indicates data are not available.
Reproduced at the Richard Nixon Presidential Library
Table 5. Annual trends in compensation, 1968-70
(Computed from seasonally adjusted quarterly data)
Percent change over 4-quarter period 1/ ending in --
Measure
1968
1969
1970
June
Sept.
Dec.
March
June
Sept.
Dec.
March
June
Average hourly compensation:
All persons, total private economy
6.9
7.7
8.6
7.3
7.2
7.2
7.2
7.4
7.3
All employees, private nonfarm
economy
7.0
7.2
8.0
6.7
6.7
6.8
6.6
6.8
6.8
Average hourly earnings, private
nonfarm economy 2/3/
6.4
6.4
7.0
6.6
6.8
7.0
7.1
6.4
6.0
Mining
4.6
4.8
6.4
7.1
7.4
7.7
7.9
6.9
6.6
Contract construction
7.3
6.9
7.1
6.6
8.5
9.0
9.7
10.2
8.9
Manufacturing
6.4
6.5
7.1
6.0
5.9
6.5
5.9
5.6
5.6
Excluding effects of overtime and
interindustry employment shifts
6.0
6.2
6.5
5.9
5.8
6.1
6.0
6.0
NA
Wholesale and retail trade
6.9
7.2
7.4
6.5
6.0
6.4
6.6
6.6
6.3
Finance, insurance, and real estate
6.0
6.9
7.2
8.1
6.4
5.4
5.4
5.0
4.5
Average hourly earnings, all Federal
executive branch employees 4/
6.3
9.1
6.2
6.9
7.5
10.4
9.6
9.9
NA
Average union scales building construction:
Wages and selected benefits
5.9
7.5
9.7
10.1
11.1
10.6
9.3
9.0
11.8
Hourly wage rates
4.8
6.1
7.9
8.7
9.9
9.7
8.5
8.1
10.8
Wage rates, hired farm labor
6.6
9.4
10.9
9.9
9.0
6.6
6.5
4.5
5.1
Average weekly earnings, private nonfarm
economy: 2/
Current dollars
6.1
6.1
6:3
6.2
6.7
6.4
6.6
5.7
4.4
1957-59 dollars
1.8
1.7
1.6
1.3
1.2
.7
.7
-.6
-1.6
Real spendable earnings (worker and 3
dependents 1957-59 dollars)
.9
.7
.4
-.2
-.2
-.7
-.6
-.4
-1.3
Current quarter divided by comparable quarter a year earlier.
2/ Production and nonsupervisory workers.
3/ Includes industries not shown separately.
4/ Computed from data that are not seasonally adjusted.
NOTE: Data for June 1970 are preliminary. NA indicates data are not available.
Reproduced at the Richard Nixon Presidential Library
Table 6. Wage and benefit decisions, individual quarters, 1968-70
(mean adjustments)
Average percent change at annual rate in decisions during quarter ending in--
Measure
1968
1969
1970
March
June Sept. Dec. March June Sept. Dec. March June
Major collective bargaining
situations 2/--
Wage and benefit changes:
Over life of contract
6.1
6.8
6.5
6.4
6.7
10.3
7.8
9.0
8.0
10.9
First-year adjustment
9.0
8.5
8.5
9.0
8.9
12.9
11.6
13.3
10.9
17.1
Wage-rate changes in--
All industries:
Over life of contract
5.6
6.0
5.8
6.1
6.1
8.7
7.8
7.5
7.7
10.6
First-year adjustment
7.1
7.4
7.4
7.5
7.6
9.8
9.9
10.3
10.2
15.4
Manufacturing:
Over life of contract
5.1
5.7
5.0
5.4
5.3
6.2
6.5
6.8
5.5
6.6
First-year adjustment
6.7
7.6
7.0
6.7
6.4
8.4
8.7
8.2
8.2
8.4
Nonmanufacturing:
Over life of contract
6.3
6.2
6.9
7.1
7.1
10.6
9.8
8.5
10.7
11.8
First-year adjustment
7.6
7.3
8.1
8.9
9.2
10.7
11.8
12.8
12.8
17.4
Construction:
Over life of contract
7.3
8.1
10.2
9.0
6.1
13.4
13.9
11.7
13.1
14.6
First-year adjustment
8.6
8.2
10.0
9.3
7.6
12.8
14.8
13.2
15.5
18.2
Wage increases in manufacturing 3/:
All establishments
NA
NA
NA
NA
6.2
6.9
7.1
7.4
6.6
NA
Union establishments
NA
NA
NA
NA
6.7
7.6
7.9
7.5
7.6
NA
Nonunion establishments
NA
NA
NA
NA
5.5
5.8
6.2
7.2
5.2
NA
1/ Data exclude possible adjustments in wages under cost-of-living escalator clauses (except increases
guaranteed by the contract).
2/ Limited to private industry settlements affecting 1,000 workers or more (5,000 for wages and benefits
combined).
3/ Averages are limited to establishments in which there were decisions to make general wage rate increases.
Averages for major collective bargaining situations include, in addition to units deciding on general wage in-
creases, units agreeing to reduce wages or to leave wages unchanged.
NOTE: Data for 1970 are preliminary. NA indicates data are not available.
Reproduced at the Richard Nixon Presidential Library
Table
Wage and benefit decisions, annual periods, 1968-70 /
(mean adjustments)
Average percent change at annual rate in decisions during 4 quarters ending in--
Measure
1968
1969
1970
March
June
Sept.
Dec.
March
June
Sept.
Dec.
March
June
Major collective bargaining
situations 2/--
Wage and benefit changes:
Over life of contract
5.3
6.0
6.2
6.5
6.6
7.2
7.8
8.2
8.8
9.4
First-year adjustment
8.0
8.7
8.7
8.7
8.6
9.5
10.4
10.9
11.8
14.0
Wage-rate changes in--
All industries:
Over life of contract
NA
NA
NA
5.9
6.0
6.6
7.3
7.6
8.1
8.9
First-year adjustment
NA
NA
NA
7.4
7.5
8.1
8.8
9.2
10.0
12.3
Manufacturing:
Over life of contract
NA
NA
NA
5.2
5.3
5.4
5.8
6.0
6.2
6.3
First-year adjustment
NA
NA
NA
7.0
7.0
7.1
7.5
7.9
8.4
8.4
Nonmanufacturing:
Over life of contract
NA
NA
NA
6.5
6.6
8.2
9.0
9.3
10.2
11.0
First-year adjustment
NA
NA
NA
7.8
8.0
9.3
10.2
10.8
11.6
15.2
Construction:
Over life of contract
NA
NA
NA
8.6
8.6
12.1
13.1
13.1
13.4
13.9
First-year adjustment
NA
NA
NA
8.7
8.7
11.8
12.9
13.1
13.8
16.5
Wage increases in manufacturing 3/:
All establishments
NA
NA
NA
6.2
NA
NA
NA
6.8
7.0
NA
Union establishments
NA
NA
NA
6.5
NA
NA
NA
7.4
7.7
NA
Nonunion establishments
NA
NA
NA
5.8
NA
NA
NA
6.1
6.3
NA
1/ Data exclude possible adjustments in wages under cost-of-living escalator clauses (except increases
guaranteed by the contract).
2/ Limited to private industry settlements affecting 1,000 workers or more (5,000 for wages and benefits
combined).
3/ Averages are limited to establishments in which there were decisions to make general wage rate increases.
Averages for major collective bargaining situations include, in addition to units deciding on general wage in-
creases, units agreeing to reduce wages or to leave wages unchanged.
NOTE: Data for 1970 are preliminary. NA indicates data are not available.
Reproduced at the Richard Nixon Presidential Library
Table 8. Consumer Price Indexes for Selected Commodities and Services
Quarterly Percent Changes
Quarter ending--
June '69
Consumer Price Indexes
1969
1970
to
June '70
June Sept. Dec.
Mar. June
Seasonally adjusted
All items
1.5
1.3
1.5
1.5
1.4
6.0
All commodities
1.4
1.0
1.5
0.9
1.3
8.2
Food
2.0
1.5
2.5
1.3
0.3
4.7
Nondurables less food
1.2
0.9
1.0
0.6
1.2
5.7
Durables
0.2
0.5
1.2
0.7
2.0
8.1
Not seasonally adjusted
All items
1.6
1.3
1.5
1.4
1.5
6.0
Services
1.7
1.9
1.6
2.7
1.8
8.2
All commodities
1.5
1.0
1.6
0.7
1.4
4.7
Food
2.5
1.6
1.9
1.3
0.8
5.7
Food away from home
1.7
2.1
2.2
1.7
1.9
8.1
Food at home
2.8
1.5
1.8
1.3
0.5
5.1
Meats
8.7
2.8
-1.4
2.6
-0.2
3.9
Beef and veal
10.9
0.3
-3.3
2.3
1.3
0.5
Pork
8.3
6.0
-0.3
3.5 -2.5
6.6
Chicken, frying
3.8
4.6
-5.7
-1.2
-0.8
-3.3
All dairy products
0.8
1.2
1.7
1.4
0.6
5.0
Milk, grocery
0.5
1.2
1.8
1.4
-0.4
4.1
Cheese
2.9
1.6
2.4
2.6
0.6
7.4
Fruits and vegetables
2.5
-3.1
4.2
0.8
4.7
6.6
Fresh fruits and vegetables
3.8
-5.3
6.8
1.1
7.0
9.5
Processed fruits and vegetables
0.4
0.5
0.2
0.2
1.1
2.0
Cereals and bakery products
0.7
0.8
1.5
1.7
0.9
5.1
Bread, white
-0.2
1.3
1.8
1.8
0
4.9
Eggs
-14.7
23.0
23.6
-12.8 -25.0
-0.6
Nonalcoholic beverages
0.9
0.3
3.6
4.6
3.6
12.7
Durable Commodities
0.5
-0.1
1.8
0.4
2.3
4.5
New cars
-0.6
-2.3
5.4
-0.5
-0.6
2.0
Household durables
1.3
0.4
0.3
0.8
0.7
2.3
Nondurables less food
1.3
1.1
1.0
0.3
1.3
3.8
Apparel less footwear
1.7
1.3
1.8
-0.6
1.3
3.7
Women's and girls'
1.7
1.5
2.1
-1.5
1.2
3.3
Men's and boys'
1.7
1.2
1.5
0.2
1.4
4.4
Footwear
1.8
1.6
1.5
1.3
1.0
5.4
Fuel cill and coal
0.3
0.5
0.9
1.3
0.3
3.1
Services
1.7
1.9
1.6
2.7
1.8
8.2
Rent
0.9
1.0
1.1
1.1
0.9
4.1
Insurance and finance
2.6
2.9
3.0
5.1
2.4
13.9
Utilities and public transportation
0.7
0.6
1.3
2.7
0.8
5.5
Housekeeping and home maintenance
2.3
2.7
2.0
1.7
1.7
8.4
Medical care
2.0
1.8
0.3
2.4
2.0
6.8
Reproduced at the Richard Nixon Presidential Library
Reproduced at the Richard Nixon Presidential Library
Table 2. Wholesale Price Indexes for Selected Industrial Commodities
Quarterly Percent Changes
Quarter ending--
June '69
Wholesale Price Indexes
1969
1970
to
June '70
June Sept. Dec.
Mar. June
Seasonally adjusted
WPI, All Commodities
1.2
0.6
1.5
1.0
0.2
3.4
Farm products
3.0
-0.3
3.2
1.2
-4.0
0.1
Processed food and feeds
2.7
0.2.
2.1
2.1
-1.6
2.8
Industrial commodities
0.5
1.0
1.0
0.8
1.1
4.0
Crude materials except food
3.6
3.6
3.2
2.8
1.5
8.4
Intermediate materials except food
0.2
0.9
1.1
0.5
1.6
4.2
Finished goods:
Consumer nondurables except food
0.6
1.1
0.9
0.5
0.7
3.1
Consumer durables
0.5
0.3
0.8
0.8
0.6
2.4
Producers' goods
0.8
1.3
1.4
1.1
0.8
4.7
Not seasonally adjusted
WPI, all commodities
1.3
0.4
1.3
1.3
0.3
3.4
Industrial commodities
0.2
0.9
1.2
1.0
0.8
4.0
Textile products and apparel
0.1
1.7
0.2
0.3
-0.2
2.0
Cotton products
-0.1
1.3
0.2
-0.3
0.1
1.3
Wool products
0.8
0
-0.6
0.1
-1.5
-2.1
Manmade fiber products
0.7
-0.7
-0.1
-0.8
-1.5
-4.0
Apparel
0.4
2.6
0.6
0.9
0.4
4.5
Hides, skins, leather, and products
1.9
2.0
-1.4
0.2
0.4
1.3
Hides and skins
7.6
9.6
-15.4
-8.7
-5.5
-20.1
Leather
4.4
0.2
-1.7
-1.3
1.3
-1.4
Footwear
0.6
2.0
0.1
1.4
0.7
4.2
Fuels, related products, and power
0.8
-0.3
1.4
0.2
2.2
3.4
Crude petroleum
0.8
0
0
0
0
0
Refined petroleum
1.6
-1.5
0.4
-1.4
1.4
-1.1.
Chemicals and allied products
0.2
0.6
-0.1
1.2
0.5
2.2
Industrial chemicals
-0.9
1.2
-0.4
-0.5
0.7
1.0
Agricultural chemicals and products
-0.3
-5.1
-0.8
6.1
-0.2
-0.3
Rubber and rubber products
0.3
1.5
1.7
-0.1
-0.3
2.9
Crude rubber
0.9
1.0
-2.8
-0.6
-0.9
-3.2
Tires and tubes
0
3.0
2.5
0
0
5.6
Lumber and wood products
-13.2
-5.1
-0.6
-2.4
0.6
-7.4
Lumber
-13.5
-9.0
-1.0
-3.8
-0.3
-13.6
Millwork
5.6
-1.2
-2.0
-0.8
0.3
-3.6
Plywood
-35.9
0.2
2.6
-2.5
4.2
4.6
Pulp, paper, and products
0.8
0.5
0.6
2.4
0.1
3.7
Paper
0.8
-0.4
0.8
3.6
0.1
4.0
Converted paper and paperboard
1.0
1.0
0.8
2.0
0.6
4.5
Metal and metal products
1.8
3.2
1.7
2.6
1.7
9.5
Iron and steel
1.4
2.6
0.7
3.3
2.1
9.0
Nonferrous metals
4.3
5.9
4.6
2.2
1.0
14.4
Machinery and equipment
0.7
1.1
1.7
1.0
0.8
4.6
Nonelectrical machinery
0.9
1.2
2.2
1.1
0.8
5.3
Electrical machinery
0.5
0.7
0.8
0.9
0.9
3.4
Furniture and household durables
0.2
0.5
0.8
0.8
0.5
2.5
Household furniture
0.8
0.6
0.5
1.4
0.6
3.1
Floor covering
-1.8
-0.6
-0.1
0.3
-0.9
-1.4
Household appliances
0.1
0.1
0.6
1.2
0.2
2.1
Nonmetallic mineral products
0.8
0.6
0.9
2.4
0.5
4.5
Concrete ingredients
0.3
0.5
0.2
3.5
1.2
5.5
Concrete products
0.4
1.4
0.9
2.5
1.0
5.8
Transportation equipment
0.3
-0.3
2.7
0.5
0.1
3.0
Passenger cars, new
0
-1.0
3.2
0
0.5
2.1
Railroad equipment
1.5
2.3
1.1
2.6
0.5
6.7
Miscellaneous products
2.3
1.1
0.5
0.7
2.8
5.1
Tobacco products
5.6
0.5
0.2
0.1
6.6
7.4
Appendix Table 10.
Revised Indexes of Output per Man-hour, Hourly Compensation
and Unit Labor Costs, 1969 (Indexes 1957-59=100)
Seasonally Adjusted
Real
Output per
Compensa-
Year and
compensa-
Unit labor
Output
Man-hours
quarter
man-hour
tion per
man-hour 1/
tion per
costs
2/
man-hour
Total Private
1968
1st
152.4
111.3
136.9
158.5
133.3
115.8
2nd
155.1
112.3
138.1
160.8
133.7
116.5
3rd
156.7
112.9
138.8
164.1
134.7
118.2
4th
157.9
113.2
139.5
167.5
135.9
120.1
Annual Ave.
155.5
112.4
138.3
162.8
134.4
117.7
1969
1st
159.0
114.2
139.3
170.0
136.3
122.1
2nd
159.8
115.1
138.9
172.4
136.0
124.2
3rd
160.9
115.3
139.5
175.9
136.8
126.1
4th
160.4
114.8
139.7
179.6
137.8
128.6
Annual Ave.
160.0
114.9
139.3
174.5
136.8
125.3
Private Nonfarm
1968
1st
154.3
116.5
132.4
153.6
129.2
116.0
2nd
157.4
117.7
133.7
155.7
129.5
116.5
3rd
159.0
118.5
134.2
158.4
130.1
118.1
4th
160.1
118.9
134.6
161.7
131.3
120.2
Annual Ave.
157.7
117.9
133.7
157.4
130.0
117.7
1969
1st
161.1
120.1
134.1
163.9
131.5
122.2
2nd
162.4
121.2
134.0
166.2
131.1
124.1
3rd
163.4
121.7
134.2
169.2
131.6
126.1
4th
163.1
121.4
134.3
172.4
132.2
128.4
Annual Ave.
162.5
121.1
134.2
167.9
131.6
125.2
Manufacturing 8/, 9/
1968
1st
161.2
119.4
135.0
148.3
124.8
109.9
2nd
164.5
120.4
136.6
150.3
125.0
110.0
3rd
166.6
121.2
137.5
152.7
125.4
111.1
4th
170.0
122.0
139.3
155.4
126.2
111.6
Annual Ave.
165.6
120.7
137.1
151.7
125.3
110.6
1969
1st
170.8
122.2
139.8
157.8
126.5
112.9
2nd
172.8
123.4
140.0
159.5
125.8
113.9
3rd
173.9
123.4
140.9
162.8
126.6
115.6
4th
170.8
122.5
139.4
165.2
126.7
118.5
Annual Ave.
172.1
122.9
140.0
161.4
126.5
115.2
See footnotes at end of table 3.
Reproduced at the Richard Nixon Presidential Library
COUNCIL
OF
1
8
SEP
MONETARY
TRENDS
1970
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
MONTH
ENDING:
August 31, 1970
RELEASED:
September 16, 1970
The money stock increased at a 7 per cent annual rate from February
to August. From the first quarter to the three months ending in August this
magnitude rose at a 5 per cent rate. In contrast, growth was at a 1.6 per cent
rate from January 1969 to February 1970.
Other monetary aggregates increased rapidly from February to August.
Federal Reserve credit increased at a 7 per cent rate, total member bank reserves
at a 6.4 per cent rate, and the monetary base at a 7.2 per cent rate. Growth
rates of several monetary aggregates are compared for three recent periods in
the table at the bottom of this page.
Time deposits at commercial banks have grown rapidly since February
reflecting two relaxations of Regulation Q ceilings, and falling short-term
market interest rates. These deposits increased at a 15 per cent annual rate
from February to June and even more rapidly at a 37 per cent rate from June to
August. This latter period of rapid growth followed the second change in
Regulation Q, effective June 24, which suspended ceilings on some large CD's.
Short-term market interest rates fell in August continuing the
over-all decline since January. Yields on 4- to 6-month commercial paper
have declined from 9 per cent for the week ending January 2 to 7.4 per cent for
the week ending September 11. Over the same period, bankers' acceptances de-
clined from 8.75 per cent to 7.13 per cent and the three-month Treasury bill
rate from 8 per cent to 6.40 per cent. Most of the decline of these bill rates
occurred in the first quarter and have changed little on balance over the past
5 months.
Yields on the highest-grade corporate bonds for the week ending
September 11 were 8.13 per cent and were generally steady during August after
falling about 1/2 percentage point in July. On balance, yields on these bonds
are still slightly higher than at the beginning of the year.
Growth of Selected Monetary Aggregates
(Annual Rates of Change)
Jan. 1967
Jan. 1969
Feb. 1970
to
to
to
Jan. 1969
Feb. 1970
Aug. 1970
Federal Reserve Credit
10.3
2.7
7.0
Total Member Bank Reserves
8.8
-1.4*
6.4
Monetary Base
6.4
2.8
7.2
Money Stock
7.3
1.6
7.0
Demand Deposit Component
7.5
0.4
6.6
Currency Component
6.3
6.1
7.9
Time Deposits
12.3
-5.1
21.6
Bank Credit
10.9
1.5
9.8
*
Data are not completely comparable due to changes in Regulations M and D
effective October 16, 1969.
Reproduced at the Richard Nixon Presidential Library
2
MONEY STOCK
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
3.1
196.3
3-69
3.1
3.1
196.8
4-69
4.8
5.6
8.2
198.1
5-69
3.9
4.1
4.7
1.2
198.3
6-69
4.0
4.2
4.5
2.8
4.3
199.0
7-69
3.6
3.7
3.9
2.4
3.1
1.8
199.3
8-69
2.8
2.8
2.7
1.4
1.4
0.0
-1.8
199.0
9-69
2.5
2.4
2.2
1.1
1.1
0.0
-0.9
0.0
199.0
10-69
2.3
2.1
2.0
1.0
1.0
0.2
-0.4
0.3
0.6
199.1
11-69
2.1
2.0
1.9
1.0
1.0
0.4
0.0
0.6
0.9
1.2
199.3
12-69
2.1
2.0
1.9
1.1
1.1
0.6
0.4
0.9
1.2
1.5
1.8
199.6
1-70
2.7
2.7
2.6
2.0
2.1
1.8
1.8
2.6
3.2
4.1
5.5
9.4
201.1
2-70
1.6
1.5
1.4
0.7
0.7
0.2
0.0
0.3
0.4
0.3
0.0
-0.9
-10.2
199.3
3-70
2.5
2.4
2.4
1.9
1.9
1.7
1.7
2.2
2.5
2.9
3.3
3.9
1.2
14.1
201.5
4-70
3.1
3.0
3.0
2.6
2.8
2.6
2.7
3.3
3.7
4.3
4.9
5.7
4.4
12.7
11.3
203.3
5-70
3.1
3.1
3.1
2.7
2.8
2.7
2.8
3.3
3.7
4.2
4.7
5.2
4.2
9.6
7.4
3.6
203.9
6-70
2.8
2.8
2.8
2.4
2.5
2.3
2.4
2.8
3.1
3.4
3.7
4.0
3.0
6.6
4.2
0.9
-1.8
203.6
7-70
2.9
2.9
2.8
2.5
2.6
2.5
2.5
2.9
3.2
3.5
3.8
4.1
3.2
6.1
4.2
2.0
1.2
4.2
204.3
8-70
3.3
3.3
3.3
3.1
3.2
3.1
3.2
3.6
4.0
4.3
4.6
5.0
4.4
7.0
5.7
4.3
4.6
7.9
11.7
206.2
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
DEMAND DEPOSIT COMPONENT OF MONEY
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
1.6
152.5
3-69
1.2
0.8
152.6
4-69
4.5
6.0
11.6
154.0
5-69
3.0
3.5
4.8
-1.5
153.8
6-69
3.0
3.4
4.3
0.8
3.2
154.2
7-69
2.8
3.0
3.6
1.0
2.4
1.6
154.4
8-69
1.7
1.7
1.9
-0.4
0.0
-1.5
-4.6
153.8
9-69
1.4
1.4
1.4
-0.5
-0.2
-1.3
-2.7
-0.8
153.7
10-69
1.1
1.1
1.1
-0.5
-0.3
-1.2
-2.1
-0.8
-0.8
153.6
11-69
0.9
0.8
0.8
-0.7
-0.5
-1.2
-1.9
-1.0
-1.2
-1.6
153.4
12-69
1.0
0.9
1.0
-0.3
-0.1
-0.6
-1.1
-0.2
0.0
0.4
2.4
153.7
1-70
1.8
1.8
1.9
0.9
1.2
0.9
0.8
1.9
2.6
3.7
6.4
10.6
155.0
2-70
0.4
0.3
0.3
-0.8
-0.7
-1.2
-1.5
-1.0
-1.1
-1.2
-1.0
-2.7
-14.4
153.0
3-70
1.4
1.4
1.4
0.6
0.8
0.5
0.4
1.1
1.4
1.9
2.8
2.9
-0.8
15.1
154.8
4-70
2.0
2.1
2.2
1.4
1.7
1.6
1.6
2.3
2.8
3.4
4.4
5.0
3.1
13.2
11.4
156.2
5-70
1.9
1.9
2.0
1.3
1.6
1.4
1.4
2.1
2.4
2.9
3.7
3.9
2.3
8.6
5.6
0.0
156.2
6-70
1.7
1.7
1.7
1.1
1.3
1.1
1.1
1.6
1.9
2.3
2.8
2.9
1.4
5.8
2.9
-1.1
-2.3
155.9
7-70
1.7
1.7
1.8
1.1
1.3
1.2
1.2
1.7
2.0
2.3
2.8
2.8
1.6
5.1
2.7
0.0
0.0
2.3
156.2
8-70
2.3
2.4
2.5
1.9
2.2
2.1
2.2
2.7
3.1
3.4
4.0
4.2
3.3
6.6
5.0
3.5
4.7
8.4
14.7
158.0
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
Reproduced at the Richard Nixon Presidential Library
3
Money Stock
Ratio Scale
Ratio Scale
Billions of Dollars
Monthly Averages of Daily Figures
Billions of Dollars
230
Seasonally Adjusted
230
225
225
220
220
215
215
210
210
+7.0%
206.2
205
+0.2%
205
+4.0%
200
200
195
195
190
190
+7.3%
185
185
180
180
175
175
170
170
165
165
Jan.'67
Jan.69
June'69
Feb. 70
Aug. 70
160
160
1967
1968
1969
1970
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Demand Deposit Component of Money Stock
Ratio Scale
Monthly Averages of Daily Figures
Ratio Scale
Billions of Dollars
Seasonally Adjusted
Billions of Dollars
170
170
160
+6.6%
+3.0%
160
158.0
150
150
+7.5%
-1.2%
140
140
130
130
Jan. '67
Jan.
'69
June 69
Feb.70
Aug. 70
120
120
1967
1968
1969
1970
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
4
TIME DEPOSITS
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
-4.6
202.4
3-69
-2.6
-0.6
202.3
4-69
-1.8
-0.3
0.0
202.3
5-69
-2.2
-1.4
-1.8
-3.5
201.7
6-69
-2.8
-2.4
-2.9
-4.4
-5.2
200.8
7-69
-5.3
-5.5
-6.7
-8.8
-11.3
-17.0
197.7
8-69
-7.2
-7.7
-9.0
-11.1
-13.5
1
-17.4
-
-17.8
194.5
9-69
-6.6
-6.9
-7.9
-9.5
-10.9
-12.7
-10.4
-2.4
194.1
10-69
-6.3
-6.5
-7.3
-8.5
-9.5
-10.5
-8.2
-3.0
-3.6
193.5
11-69
-5.8
-5.9
-6.5
-7.4
-8.1
-8.6
-6.4
-2.2
-2.1
-0.6
193.4
12-69
-4.9
-4.9
-5.4
-6.0
-6.4
-6.6
-4.3
-0.6
0.0
1.9
4.4
194.1
1-70
-5.5
-5.5
-6.0
-6.7
-7.1
-7.3
-5.6
-2.9
-3.1
-2.9
-4.0
-11.7
192.1
2-70
-5.1
-5.1
-5.5
-6.1
-6.4
-6.5
-4.9
-2.6
-2.6
-2.3
-2.9
-6.3
-0.6
192.0
3-70
-3.8
-3.7
-4.0
-4.3
-4.4
-4.3
-2.6
-0.2
0.2
1.0
1.4
0.4
7.1
15.4
194.3
4-70
-2.1
-1.9
-2.0
-2.2
-2.1
-1.7
0.1
2.6
3.4
4.6
5.7
6.0
12.6
19.9
24.6
197.9
5-70
-1.3
-1.1
-1.1
-1.2
-1.0
-0.7
1.2
3.5
4.3
5.5
6.5
6.9
12.2
16.8
17.5
10.8
199.6
6-70
-0.8
-0.5
-0.5
-0.6
-0.3
0.1
1.8
4.0
4.8
5.9
6.8
7.2
11.5
14.7
14.5
9.8
8.7
201.0
7-70
1.2
1.6
1.7
1.8
2.2
2.8
4.7
7.0
8.0
9.3
10.7
11.6
16.0
19.6
20.7
19.5
24.1
41.5
206.9
8-70
2.6
3.0
3.3
3.5
3.9
4.6
6.5
8.8
9.9
11.4
12.8
13.9
18.1
21.6
22.9
22.4
26.5
36.5
31.7
211.7
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
MONEY STOCK PLUS TIME DEPOSITS
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
-0.9
398.7
3-69
0.2
1.2
399.1
4-69
1.4
2.6
4.0
400.4
5-69
0.8
1.3
1.4
-1.2
400.0
6-69
0.5
0.8
0.7
-0.9
-0.6
399.8
7-69
-1.0
-1.0
-1.6
-3.4
-4.4
-8.1
397.0
8-69
-2.4
-2.6
-3.3
-5.1
-6.3
-9.1
-10.1
393.5
9-69
-2.2
-2.4
-3.0
-4.3
-5.1
-6.5
-5.8
-1.2
393.1
10-69
-2.1
-2.3
-2.8
-3.9
-4.4
-5.3
-4.4
-1.4
-1.5
392.6
11-69
-1.9
-2.0
-2.4
-3.3
-3.6
-4.2
-3.2
-0.8
-0.6
0.3
392.7
12-69
-1.4
-1.5
-1.8
-2.5
-2.7
-3.0
-2.0
0.2
0.6
1.7
3.1
393.7
1-70
-1.5
-1.5
-1.8
-2.4
-2.5
-2.8
-1.9
-0.2
0.1
0.6
0.8
-1.5
393.2
2-70
-1.8
-1.9
-2.1
-2.7
-2.9
-3.2
-2.4
-1.1
-1.1
-1.0
-1.4
-3.6
-5.6
391.3
3-70
-0.7
-0.7
-0.8
-1.3
-1.3
-1.3
-0.5
1.0
1.4
2.0
2.4
2.2
4.0
14.7
395.8
4-70
0.4
0.5
0.5
0.2
0.3
0.4
1.4
2.9
3.6
4.4
5.3
5.8
8.4
16.2
17.7
401.2
5-70
0.8
1.0
0.9
0.7
0.9
1.0
2.0
3.4
4.0
4.8
5.6
6.1
8.1
13.1
12.3
7.1
403.5
6-70
1.0
1.1
1.1
0.9
1.1
1.2
2.1
3.4
3.9
4.6
5.3
5.6
7.1
10.5
9.2
5.2
3.3
404.6
7-70
2.0
2.2
2.3
2.2
2.4
2.6
3.6
4.9
5.6
6.4
7.1
7.7
9.4
12.6
12.1
10.3
12.0
21.4
411.2
8-70
3.0
3.2
3.3
3.3
3.6
3.9
4.8
6.2
6.9
7.8
8.6
9.4
11.0
14.1
13.9
13.0
15.1
21.4
21.4
417.9
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
Reproduced at the Richard Nixon Presidential Library
5
Time Deposits
Ratio Scale
Monthly Averages of Daily Figures
Ratio Scale
Billions of Dollars
Seasonally Adjusted
Billions of Dollars
220
220
211.7
210
+21.6%
210
+18.0%
200
200
190
-5.4%
190
+11.8%
180
180
170
170
160
160
Jan. '67
June '68
Dec. 68
Feb.70
Aug.70
150
150
1967
1968
1969
1970
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Money Stock Plus Time Deposits
Ratio Scale
Ratio Scale
Billions of Dollars
Monthly Averages of Daily Figures
Billions of Dollars
Seasonally Adjusted
430
430
420
417.9
420
+14.1%
410
+0.1%
410
400
400
390
390
-3.2%
380
380
+10.3%
370
370
360
360
350
350
340
340
330
330
320
320
310
Jan. 67
Dec. '68
June '69
Feb. 70 Feb.70
Aug. 70
310
300
300
1967
1968
1969
1970
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
6
TOTAL RESERVES
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
-3.4
28.06
3-69
-3.6
-3.8
27.97
4-69
-5.0
-5.8
-7.9
27.78
5-69
1.1
2.6
5.9
21.8
28.24
6-69
-0.7
0.0
1.3
6.2
-7.4
28.06
7-69
-4.3
-4.5
-4.6
-3.6
-14.2
-20.5
27.53
8-69
-4.5
-4.6
-4.8
-4.0
-11.4
-13.3
-5.5
27.40
9-69
-3.9
-4.0
-4.0
-3.3
-8.7
-9.1
-2.8
0.0
27.40
10-69
-3.7
-3.8
-3.8
-3.1
-7.4
-7.4
-2.6
-1.1
-2.2
27.35
11-69
-1.5
-1.3
-1.0
0.0
-3.2
-2.4
2.7
5.7
8.6
20.6
27.78
12-69
-0.8
-0.6
-0.2
0.8
-1.9
-0.9
3.5
5.9
8.0
13.4
6.7
27.93
1-70
-0.5
-0.2
0.1
1.1
-1.3
-0.4
3.4
5.3
6.7
9.9
4.8
3.0
28.00
2-70
-1.4
-1.2
-1.0
-0.3
-2.4
-1.8
1.2
2.3
2.8
4.1
-0.9
-4.4
-11.4
27.72
3-70
-1.3
-1.1
-0.9
-0.2
-2.2
-1.6
1.0
2.0
2.3
3.3
-0.6
-3.0
-5.9
0.0
27.72
4-70
0.2
0.5
0.8
1.6
-0.1
0.7
3.4
4.5
5.2
6.5
3.8
3.1
3.2
11.3
23.9
28.22
5-70
-0.7
-0.5
-0.2
0.4
-1.2
-0.7
1.6
2.4
2.7
3.4
0.8
-0.3
-1.2
2.5
3.7 13.2
27.89
6-70
-0.6
-0.4
-0.2
0.4
-1.1
-0.6
1.5
2.2
2.4
3.0
0.7
-0.2
-0.9
2.0
2.6
-6.6
0.4
27.90
7-70
-0.2
-0.1
0.2
0.7
-0.6
-0.1
1.9
2.6
2.8
3.4
1.4
0.7
0.3
2.8
3.5
-2.5
3.3
6.2
28.04
8-70
1.0
1.3
1.6
2.2
1.0
1.6
3.6
4.4
4.8
5.5
4.0
3.6
3.7
6.4
7.8
4.1
10.6
16.0
26.8
28.60
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
* Data encompassing changes for October, 1969
INITIAL MONTH
are not completely comparable because of changes
in Regulations M and D effective October 16, 1969.
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11. 1970
Reproduced at the Richard Nixon Presidential Library
7
Reserves of Member Banks L1
Ratio Scale
Ratio Scale
Billions of Dollars
Monthly Averages of Daily Figures
Billions of Dollars
Seasonally Adjusted
31
31
30
30
29
+1.1%
+4.0%
29
28.6
28
28
*
27
+8.8%
27
-8.7%
26
26
25
25
24
24
23
23
22
22
Jan. '67
Jan. Jan.'69 '69
May '69
Sept. '69
Nov. '69
Aug. '70
21
21
1967
1968
1969
1970
1 Data before May 1969 have been adjusted for estimated effect of reserve requirement
changes.
*Break in series due to changes in Regulations M and D effective October 16, 1969.
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
8
MONETARY BASE
COMPOUNDED ANNUAL RATES. OF CHANGE
TERMINAL
INITIAL MONTH
MILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
2.0
76,609
3-69
2.5
3.0
76,795
4-69
2.6
2.8
2.7
76,967
5-69
5.0
6.0
7.5
12.6
77,729
6-69
3.3
3.6
3.8
4.3
-3.3
77,515
7-69
2.1
2.1
1.8
1.5
-3.5
-3.8
77,263
8-69
2.5
2.5
2.4
2.4
-0.8
0.4
4.9
77,572
9-69
2.1
2.1
2.0
1.8
-0.7
0.1
2.2
-0.5
77,541
10-69
2.1
2.2
2.1
1.9
-0.1
0.8
2.3
1.1
2.6
77,710
11-69
2.8
2.9
2.9
2.9
1.4
2.3
3.9
3.6
5.7
8.8
78,257
12-69
2.7
2.8
2.7
2.7
1.4
2.2
3.5
3.1
4.3
5.2
1.7
78,365
1-70
3.0
3.1
3.1
3.2
2.1
2.8
4.0
3.8
4.9
5.7
4.2
6.8
78,793
2-70
2.8
2.9
2.9
2.9
1.9
2.5
3.5
3.2
4.0
4.3
2.9
3.4
0.2
78,809
3-70
3.0
3.1
3.1
3.2
2.3
2.9
3.8
3.6
4.3
4.6
3.6
4.3
3.0
5.9
79,188
4-70
3.6
3.8
3.8
3.9
3.2
3.8
4.7
4.7
5.5
5.9
5.4
6.3
6.2
9.3
12.7
79,983
5-70
4.0
4.1
4.2
4.3
3.7
4.3
5.2
5.2
6.0
6.4
6.1
7.0
7.0
9.4
11.1
9.5
80,592
6-70
3.6
3.7
3.7
3.8
3.2
3.7
4.4
4.4
4.9
5.2
4.7
5.2
4.9
6.1
6.2
3.1
-3.0
80,391
7-70
3.9
4.0
4.0
4.1
3.6
4.1
4.8
4.8
5.3
5.6
5.2
5.8
5.6
6.7
6.9
5.0
2.8
9.0
80,968
8-70
4.2
4.3
4.4
4.5
3.9
4.5
5.2
5.2
5.7
6.0
5.7
6.2
6.2
7.2
7.4
6.1
5.0
9.2
9.5
81,585
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
TOTAL FEDERAL RESERVE CREDIT
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
MILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
2.7
63,330
3-69
3.3
3.9
63,533
4-69
1.5
0.9
-2.1
63,423
5-69
4.6
5.3
6.0
14.7
64,151
6-69
5.4
6.1
6.8
11.5
8.5
64,587
7-69
3.2
3.3
3.2
5.0
0.4
-7.0
64,196
8-69
3.4
3.5
3.4
4.8
1.7
-1.5
4.4
64,428
9-69
3.4
3.5
3.4
4.5
2.2
0.1
3.9
3.4
64,608
10-69
3.6
3.8
3.7
4.7
2.9
1.5
4.5
4.6
5.7
64,909
11-69
4.8
5.0
5.1
6.2
4.9
4.2
7.2
8.1
10.5
15.5
65,692
12-69
5.0
5.3
5.4
6.4
5.3
4.8
7.3
8.0
9.6
11.6
7.9
66,111
1-70
3.4
3.5
3.5
4.1
2.8
2.0
3.6
3.5
3.5
2.8
-3.0
-12.9
65,355
2-70
2.7
2.7
2.6
3.1
1.9
1.1
2.3
1.9
1.6
0.6
-3.9
-9.3
-5.5
65,045
3-70
3.1
3.1
3.0
3.5
2.4
1.8
3.0
2.8
2.6
2.0
-1.1
-3.9
0.9
7.9
65,457
4-70
3.7
3.7
3.7
4.2
3.3
2.8
4.0
3.9
4.0
3.7
1.5
-0.0
4.7
10.2
12.6
66,106
5-70
4.2
4.3
4.4
4.9
4.1
3.7
4.8
4.9
5.1
5.0
3.3
2.4
6.6
11.0
12.6
12.7
66,769
6-70
3.5
3.6
3.5
4.0
3.2
2.8
3.7
3.6
3.6
3.4
1.8
0.8
3.7
6.2
5.7
2.4
-7.0
66,364
7-70
3.6
3.6
3.6
4.0
3.3
2.9
3.7
3.7
3.7
3.5
2.1
1.3
3.8
5.8
5.3
3.0
-1.5
4.3
66,596
8-70
4.0
4.1
4.1
4.5
3.9
3.6
4.4
4.4
4.5
4.4
3.2
2.7
5.1
7.0
6.8
5.4
3.1
8.6
13.1
67,282
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-7C
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
Reproduced at the Richard Nixon Presidential Library
9
Monetary Base and Federal Reserve Credit
Ratio Scale
Ratio Scale
Billions of Dollars
Monthly Averages of Daily Figures
Billions of Dollars
90
Seasonally Adjusted
90
85
85
+7.2%
+4.0%
81.6
80
+5.0%
80
75
+6.4%
-0.7%
75
Monetary Base L1
70
70
+7.0%
+1.6%
+2.2%
67.3
+4.6%
65
65
+10.3%
60
60
Federal Reserve Credit |2
55
55
50
50
Jan.'67
Jan. 69 May 69 Sept. 69 Feb. '70
Aug. '70
45
45
1967
1968
1969
1970
1
Uses of the monetary base are member bank reserves and currency held by the public
and nonmember banks. Adjustments are made for reserve requirement changes and
shifts in deposits among classes of banks. Data are computed by this bank.
2 Total Federal Reserve credit outstanding includes holdings of securities, loans, float,
and "other" assets. Adjustments are made for reserve requirement changes and
shifts in deposits among classes of banks. Data are computed by this bank.
Percentages are annual rates of change for periods indicated.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
10
TOTAL BANK CREDIT ALL COMMERCIAL BANKS - MONTHLY AVERAGE OF DAILY FIGURES*
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
1.6
389.9
3-69
4.1
6.7
392.0
4-69
8.6
12.3
18.2
397.5
5-69
5.3
6.6
6.6
-3.9
396.2
6-69
5.6
6.7
6.7
1.4
6.9
398.4
7-69
4.8
5.4
5.1
1.1
3.7
0.6
398.6
8-69
2.7
2.9
2.2
-1.5
-C.7
-4.3
-8.9
395.5
9-69
2.6
2.7
2.1
-0.9
-0.2
-2.4
-3.9
1.5
396.0
10-69
2.2
2.3
1.7
-0.8
-0.2
-1.9
-2.7
0.6
-0.3
395.9
11-69
2.5
2.6
2.2
0.0
0.7
-0.5
-0.8
2.1
2.4
5.3
397.6
12-69
2.7
2.9
2.5
0.6
1.3
0.4
0.4
2.8
3.3
5.1
4.9
399.2
1-70
2.3
2.4
2.0
0.3
0.8
0.0
-0.1
1.8
1.8
2.5
1.2
-2.4
398.4
2-70
1.5
1.5
1.1
-0.5
-0.1
-0.9
-1.2
0.2
-0.1
0.0
-1.7
-4.9
-7.3
395.9
3-70
2.6
2.7
2.4
1.0
1.5
1.0
1.0
2.5
2.7
3.3
2.8
2.1
4.4
17.7
401.3
4-70
3.6
3.8
3.6
2.4
3.0
2.7
2.9
4.5
4.9
5.8
5.9
6.1
9.1
18.4
19.1
407.2
5-70
3.4
3.5
3.3
2.2
2.7
2.4
2.5
3.9
4.2
4.9
4.8
4.8
6.6
11.7
8.8
-0.6
407.0
6-70
3.3
3.4
3.2
2.2
2.6
2.3
2.4
3.7
3.9
4.4
4.3
4.2
5.6
9.1
6.3
0.4
1.5
407.5
7-70
3.9
4.0
3.8
2.9
3.5
3.2
3.4
4.6
4.9
5.5
5.6
5.6
7.0
10.2
8.4
5.0
7.9
14.8
412.2P
8-70
4.1
4.2
4.1
3.3
3.8
3.5
3.8
4.9
5.2
5.8
5.8
6.0
7.2
9.8
8.3
5.8
8.0
11.4
8.1
414.9P
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
*ESTIMATED BY FEDERAL RESERVE BANK OF ST. LOUIS
P- PRELIMINARY
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
TOTAL LOANS ALL COMMERCIAL BANKS MONTHLY AVERAGE OF DAILY FIGURES*
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
10.2
259.8
3-69
12.7
15.3
262.9
4-69
15.8
18.6
22.0
267.3
5-69
12.1
12.7
11.5
1.8
267.7
6-69
11.8
12.2
11.2
6.2
10.8
270.0
7-69
11.1
11.2
10.3
6.6
9.1
7.3
271.6
8-69
8.5
8.2
6.9
3.4
3.9
0.7
-5.6
270.3
9-69
8.5
8.3
7.1
4.4
5.0
3.1
1.1
8.3
272.1
10-69
8.6
8.4
7.4
5.2
5.8
4.6
3.7
8.7
9.2
274.1
11-69
8.3
8.1
7.3
5.3
5.9
5.0
4.4
7.9
7.7
6.3
275.5
12-69
8.4
8.2
7.4
5.7
6.3
5.6
5.2
8.1
8.0
7.4
8.6
277.4
1-70
7.5
7.3
6.5
4.9
5.3
4.6
4.1
6.1
5.6
4.5
3.5
-1.3
277.1
2-70
6.6
6.3
5.5
4.0
4.2
3.4
2.9
4.3
3.6
2.2
0.9
-2.8
-4.2
276.1
3-70
7.2
6.9
6.3
4.9
5.3
4.7
4.3
5.8
5.4
4.7
4.3
2.9
5.1
15.3
279.4
4-70
7.3
7.1
6.5
5.3
5.6
5.1
4.9
6.3
6.0
5.5
5.3
4.5
6.5
12.3
9.4
281.5
5-70
6.4
6.1
5.5
4.3
4.6
4.0
3.7
4.8
4.3
3.7
3.2
2.2
3.1
5.6
1.1
-6.6
279.9
6-70
5.8
5.5
4.9
3.8
4.0
3.4
3.1
4.0
3.5
2.8
2.3
1.3
1.8
3.4
-0.3
-4.8
-3.0
279.2
7-70
6.5
6.3
5.7
4.7
4.9
4.5
4.3
5.2
4.9
4.5
4.2
3.6
4.5
6.3
4.1
2.4
7.3
18.6
283.2P
8-70
6.4
6.1
5.6
4.7
4.9
4.5
4.2
5.1
4.8
4.4
4.2
3.6
4.4
5.9
4.1
2.8
6.1
11.0
3.9
284.1P
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-7C
4-70
5-70
6-70
7-70
INITIAL MONTH
*ESTIMATED BY FEDERAL RESERVE BANK OF ST. LOUIS
P- PRELIMINARY
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
Reproduced at the Richard Nixon Presidential Library
11
Bank Credit*
All Commercial Banks
Ratio Scale
Ratio Scale
Billions of Dollars
Monthly Averages of Daily Figures
Billions of Dollars
Seasonally Adjusted
500
500
+9.8%
+6.2%
414.9
400
+11.4%
400
Total
+1.6%
-0.5%
300
+4.0%
+5.9%
300
+8.9%
+12.3%
284.1
+6.9%
+2.9%
Loans
200
200
+12.6%
+8.9%
+19.2%
Investments
+21.9%
130.8
-4.7%
+2.9%
-9.5%
100
100
90
0.9%
90
199.
80
Jan.62
Dec. '66'
Oct:67
Dec. '68
Feb.70
Aug 70
80
70
70
1962
1963
1964
1965
1966
1967
1968
1969
1970
*Data are estimated by the Federal Reserve Bank of St. Louis.
Percentages are annual rates of change for periods indicated.
Latest data plotted: August estimated
Prepared by Federal Reserve Bank of St. Louis
TOTAL INVESTMENTS ALL COMMERCIAL BANKS - MONTHLY AVERAGE OF DAILY FIGURES*
COMPOUNDED ANNUAL RATES OF CHANGE
TERMINAL
INITIAL MONTH
BILLIONS OF
MONTH
DOLLARS
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
2-69
-13.6
130.1
3-69
-11.3
-8.8
129.1
4-69
-4.5
0.5
10.7
130.2
5-69
-7.1
-4.8
-2.8
-14.6
128.5
6-69
-5.9
-3.9
-2.2
-8.0
-0.9
128.4
7-69
-7.0
-5.6
-4.8
-9.5
-6.8
-12.3
127.0
8-69
-8.3
-7.4
-7.1
-11.1
-9.9
-14.1
-15.7
125.2
9-69
-8.8
-8.0
-7.9
-11.2
-10.4
-13.3
-13.8
-11.8
123.9
10-69
-9.9
-9.4
-9.5
-12.5
-12.1
-14.6
-15.4
-15.2
-18.5
121.8
11-69
-8.7
-8.1
-8.0
-10.4
-9.7
-11.4
-11.1
-9.5
-8.4
3.0
122.1
12-69
-8.2
-7.6
-7.5
-9.5
-8.8
-10.0
-9.5
-7.9
-6.6
0.0
-2.9
121.8
1-70
-7.9
-7.4
-7.2
-9.0
-8.3
-9.3
-8.8
-7.3
-6.2
-1.6
-3.9
-4.8
121.3
2-70
-8.4
-7.9
-7.8
-9.5
-8.9
-9.9
-9.5
-8.4
-7.8
-4.8
-7.3
-9.5
-13.9
119.8
3-70
-6.4
-5.8
-5.6
-6.9
-6.1
-6.7
-6.0
-4.5
-3.2
0.2
-0.5
0.3
3.0
23.2
121.9
4-70
-3.7
-2.9
-2.4
-3.5
-2.4
-2.5
-1.4
0.6
2.5
6.5
7.2
9.9
15.3
33.4
44.5
125.7
5-70
-2.6
-1.8
-1.3
-2.2
-1.1
-1.1
0.1
2.0
3.9
7.6
8.4
10.8
15.0
26.7
28.5
14.2
127.1
6-70
-1.8
-1.0
-0.5
-1.3
-0.1
-0.1
1.1
3.0
4.8
8.1
8.9
11.0
14.4
22.8
22.7
13.1
11.9
128.3
7-70
-1.4
-0.6
-0.1
-0.7
0.3
0.4
1.6
3.3
5.0
8.0
8.6
10.3
13.1
19.4
18.5
10.9
9.3
6.7
129.0P
8-70
-0.4
0.4
0.9
0.3
1.4
1.6
2.8
4.5
6.1
8.9
9.6
11.3
13.8
19.2
18.4
12.7
12.2
12.3
18.1
130.8P
1-69
2-69
3-69
4-69
5-69
6-69
7-69
8-69
9-69
10-69
11-69
12-69
1-70
2-70
3-70
4-70
5-70
6-70
7-70
INITIAL MONTH
*ESTIMATED BY FEDERAL RESERVE BANK OF ST. LOUIS
P- PRELIMINARY
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
SEPTEMBER 11, 1970
Reproduced at the Richard Nixon Presidential Library
12
Money Market Rates
Ratio Scale
Ratio Scale
of Yields
Monthly Averages of Daily Figures
of Yields
9
9
8
7.948
7.20
7
7
4- to 6-Month
6.75
Prime Commercial Paper
6.41
6
6
5
5
Regulation Q Maxium Rate L1
Bankers' Acceptances
4
4
3-Month Treasury Bills
3
3
2
2
1962
1963
1964
1965
1966
1967
1968
1969
1970
|1 Rate on deposits in amounts of $100,000 or more maturing in 90-179 days.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
13
Yields on Highest-Grade Corporate Bonds
Per Cent
Per Cent
8.13
8
8
7
7
Nominal Rate of Return
(Corporate Aaa Bonds)
6
6
5
5
Real Rate of Return*
4
3.984
3
3
2
2
O
O
1962
1963
1964
1965
1966
1967
1968
1969
1970
*Estimates of "real" interest rates were obtained from statistical regressions of nominal interest rates
on current and lagged price changes and on variables thought to influence "real" interest rates
(i.e., the level of and changes in output and changes in the deflated money stock). See William P.
Yohe and Denis S. Karnosky, "Interest Rates and Price Level Changes, 1952-69," Review, Federal
Reserve Bank of St. Louis, December 1969.
Latest data plotted: August
Prepared by Federal Reserve Bank of St. Louis
Reproduced at the Richard Nixon Presidential Library
14
Recent Growth Rates in Monetary Aggregates
Compounded Annual Rates of Change and Percentile Rank
Length of Period Ending August 1970
Variable
3 months
6 months
9 months
12 months
Rate
Rate
Rate
Rate
of
of
of
of
Change
Percentile
Change
Percentile
Change
Percentile
Change
Percentile
Federal Reserve Credit
3.1
29
7.0
47
3.2
24
4.4
33
Total Member Bank Reserves
10.6
93
6.4
81
4.0
48
4.4
63
Monetary Base
5.0
74
7.2
100
5.7
90
5.2
85
Money Supply
4.6
73
7.0
94
4.6
79
3.6
59
Money Plus Time Deposits
15.1
100
14.1
100
8.6
85
6.2
63
Bank Credit
8.0
52
9.8
73
5.8
25
4.9
19
Based on all possible consecutive periods of the same length from January 1950 through August 1970 with the exception
of Total Member Bank Reserves and Bank Credit both of which are based on data from January 1959.
2/
Data used are averages of daily figures as on the bank credit "Triangle".
Illustration of Use: Monetary Base has risen at a 5.0 per cent annual rate in the three months ending August 1970.
This rate was as great or greater than 74 per cent of all other consecutive three-month
periods since January 1950.
Reproduced at the Richard Nixon Presidential Library
JULY 1970 REVISIONS
ouncil of Economic Advisers
1
Gross National Product or Expenditure, Selected Periods, 1961-70
Oct. 13
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
ross national product or expenditure
793.9
865.0
931.4
503.6
675.7
800.9
815.9
834.9
858.1
875.8
891.4
907.6
923.7
942.6
951.7
959.5
971.1
985.2
Personal consumption expenditures
492.1
535.8
577.5
328.4
427.9
495.5
502.5
519.7
529.1
543.8
550.8
561.8
573.3
582.1
592.6
603.1
614.4
6224
Durable goods
73.1
84.0
90.0
41.9
64.4
73.7
75.3
79.9
82.6
86.7
86.9
89.1
90.6
89.5
90.8
89.1
91.9
91.4
Nondurable goods
215.0
230.2
245.8
154.1
189.7
215.5
217.1
225.6
227.6
232.6
234.8
239.2
244.0
248.1
252.0
258.8
262.6
265.5
Services
204.0
221.6
241.6
132.4
173.8
206.3
210.1
214.2
218.9
224.5
229.0
233.5
238.7
244.5
249.8
255.2
259.9
2654
Gross private domestic investment
116.6
126.5
139.8
64.3
105.3
118.6
123.0
119.8
127.3
126.5
132.6
136.0
139.3
143.8
140.2
133.2
134.3
1368
Fixed investment
108.4
118.9
131.4
67.7
96.5
109.9
113.0
117.2
117.0
118.3
123.3
128.7
131.4
132.4
133.0
131.6
131.2
132.8
Nonresidential
83.3
88.7
99.3
46.0
69.5
83.3
84.1
88.3
86.4
88.3
91.6
95.7
97.5
101.5
102.6
102.6
102.8
1037
Structures
28.0
29.6
33.8
18.4
25.1
27.9
28.0
29.8
28.9
29.4
30.3
32.6
32.3
35.2
35.1
35.7
35.3
35.4
Producers' durable equipment.
55.3
59.1
65.5
27.6
44.4
55.4
56.2
58.5
57.5
59.0
61.3
63.1
65.2
66.3
67.5
66.9
67,5
68.4
Residential structures
25.1
30.3
32.0
21.7
27.0
26.6
28.8
28.8
30.6
29.9
31.7
33.0
33.9
31.0
30.4
29.1
28.4
29.1
Nonfarm
24.5
29.7
31.5
21.1
26.4
26.0
28.3
28.3
30.1
29.4
31.1
32.4
33.3
30.4
29.8
28.4
27.8
29.5
Farm
.6
.5
.6
.6
.5
.6
.6
.6
.6
.5
.5
.5
.6
.6
.6
.6
.6
.6
Change in business inventories
8.2
7.6
8.5
-3.5
8.9
8.7
10.0
2.6
10.4
8.2
9.3
7.4
7.9
11.3
7.2
1.6
3.1
4.0
Nonfarm
7.5
7.5
8.0
-3.7
8.1
7.8
8.5
2.5
10.3
8.1
9.3
7.3
7.6
10.8
6.5
.9
2.6
3.5
Farm
.7
.1
.4
.3
.8
.9
1.4
.2
.1
.1
.0
.1
:3
.5
.7
.7
.5
.5
Net exports of goods and services
5.2
2.5
1.9
6.6
8.1
5.6
4.0
1.8
3.4
3.4
1.4
1.3
1.3
2.6
2.6
3.5
4.1
47
Exports
46.2
50.6
55.5
28.6
40.8
46.3
46.8
47.7
50.7
53.2
50.9
47.8
57.2
58.3
58.8
61.1
62.8
63.5
Imports
41.0
48.1
53.6
22.0
32.7
40.7
42.8
45.9
47.3
49.8
49.5
46.5
55.9
55.6
56.2
57.6
58.7
58.8
Government purchases of goods and
services
180.1
200.2
212.2
104.3
134.4
181.3
186.5
193.6
198.3
202.1
206.7
208.5
209.9
214.1
216.3
219.6
218.4
221.3
Federal
90.7
99.5
101.3
55.4
65.5
91.4
93.6
96.4
98.9
100.7
101.9
100.9
99.8
102.5
102.1
102.3
99.7
99.0
National defense
72.4
78.0
78.8
46.9
49.2
73.0
74.7
76.3
77.8
78.6
79.2
78.6
77.9
79.8
78.8
79.3
76.8
752
Other
18.4
21.5
22.6
8.4
16.2
18.3
18.9
20.1
21.1
22.1
22.7
22.4
21.9
22.7
23.3
23.0
22.9
23.8
State and local
89.4
100.7
110.8
49.0
68.9
89.9
92.9
97.2
99.4
101.4
104.7
107.5
110.1
111.6
114.2
117.4
118.7
1224
Addendum:
Final sales
785.7
857.4
922.9
507.0
666.8
792.2
805.9
832,3
847.8
867.6
882.1
900.2
915.9
931.2
944.5
957.9
968.1
981.2
Note. Detail will not necessarily add to totals because of rounding.
15.7
15:3
13.3
13.4
10.2
13.1
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
2
act. 1 3
Relation of Gross National Product to National Income, Selected Periods, 1961-70
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
Gross national product
793.9
865.0
931.4
503.6
675.7
800.9
815.9
834.9
858.1
875.8
891.4
907.6
923.7
942.6
951.7
959.5
971.1
985.2
Less:
Capital consumption allow-
ances
68.9
74.0
78.9
44.1
59.2
69.5
71.0
72.3
73.7
74.6
75.5
77.0
78.2
79.4
80.7
82.1
83.6
85.0
Equals: Net national product
725.0
791.1
852.5
459.5
616.5
731.4
744.9
762.6
784.4
801.2
816.0
830.6
845.5
863.1
871.0
877.4
887.5
900.1
Less:
Indirect business tax and
nontax liability
70.4
78.1
85.2
46.1
62.1
71.3
72.9
75.5
77.4
79.2
80.4
82.1
84.3
86.6
87.7
89.3
91.1
930
Business transfer payments
3.1
3.3
3.5
2.0
2.7
3.1
3.2
3.2
3.3
3.4
3.5
3.5
3.5
3.5
3.5
3.6
3.6
3,6
Statistical discrepancy
-.7
-2.4
-4.7
.3
-3.9
.0
-1.4
-2.5
-1.6
-2.9
-2.6
-3.6
-5.3
-5.5
-4.3
-5.4
-3.4
Plus:
Subsidies less current
surplus of government
enterprises
1.4
.7
1.0
1.2
1.2
1.3
1.3
.8
.7
.7
.5
.8
1.1
1.0
1.2
1.6
1.5
1.9
Equals: National income
653.6
712.7
769.5
412.2
556.7
658.3
671.6
687.2
706.1
722.2
735.2
749.3
764.0
779.5
785.2
791.5
797.7
Note: Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
3
National Income by Type of Income, Selected Periods, 1961-70
Oct 13
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
Item
1967
1969
1968
1969
1970
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
National income
653.6
712.7
769.5
412.2
556.7
658.3
671.6
687.2
706.1
722.2
735.2
749.3
764.0
779.5
785.2
791.5
797.7
Compensation of employees
467.2
514.1
564.2
294.8
388.6
470.9
481.8
495.3
507.6
520.9
532.5
544.9
557.5
572.2
582.1
592.2
596.4
6038
Wages and salaries
423.1
464.8
509.0
270.9
354.0
426.4
436.2
447.9
458.9
471.0
481.4
491.6
502.9
516.4
525.3
534.4
537.4
543.4
Private
337.3
369.1
404.9
220.1
286.1
340.1
346.5
356.0
364.7
373.4
382.5
391.5
401.2
409.9
417.2
422.6
424.0
428.9
Government
85.8
95.7
104.1
50.8
67.9
86.3
89.7
92.0
94.3
97.6
98.9
100.0
101.7
106.5
108.1
111.8
113.4
114,5
Military
16.2
17.9
19.0
10.0
11.7
16.1
17.0
17.3
17.6
18.6
18.2
18.1
18.4
19.9
19.6
20.1
19.5
Civilian
69.5
77.8
85.1
40.8
56.3
70.3
72.7
74.7
76.6
79.0
80.7
81.9
83.4
86.6
88.5
91.7
93.9
Supplements to wages and salaries
44.2
49.3
55.1
23.9
34.6
44.5
45.6
47.4
48.7
49.9
51.1
53.3
54.6
55.8
56.8
57.9
59.0
60.4
Proprietors' income
62.1
64.1
66.8
47.4
56.9
62.9
62.9
62.9
63.8
64.4
65.2
66.0
66.7
67.5
67.2
67.6
67.8
67.8
Business and professional
47.3
49.1
50.5
34.6
41.8
47.9
47.7
48.5
49.2
49.2
49.4
49.9
50.5
50.9
50.6
50.6
51.2
Farm
51.7
14.8
15.0
16.4
12.8
15.1
14.9
15.2
14.4
14.6
15.3
15.8
16.2
16.2
16.6
16.6
17.0
16.5
161
Rental income of persons
21.1
21.3
22.0
15.9
18.9
21.3
21.3
21.3
21.3
21.3
21.3
21.6
22.0
22.1
22.3
22.5
22.6
22.7
Corporate profits and inventory
valuation adjustment
78.7
85.4
85.8
45.0
74.4
78.4
80.0
81.3
86.0
87.4
87.1
87.1
87.4
86.8
82.0
76.7
77.8
Corporate profits before taxes
79.8
88.7
91.2
45.0
76.5
78.8
83.3
86.7
88.6
88.4
91.3
93.0
93.4
89.9
88.5
82.6
82.3
Corporate profits tax lia-
bility
33.2
40.6
42.7
20.7
30.8
32.6
34.5
39.8
40.4
40.4
41.7
43.5
43.8
42.1
41.4
38.0
38.0
Corporate profits after taxes
46.6
48.2
48.5
24.4
45.7
46.2
48.9
46.9
48.3
48.0
49.6
49.5
49.7
47.9
47.1
44.6
44.3
Dividends
21.4
23.3
24.7
13.5
19.4
21.9
21.0
22.3
23.1
23.8
24.1
24.1
24.4
25.0
25.2
25.2
25.1
Undistributed profits
25.3
24.9
23.9
10.9
26.3
24.3
27.8
24.7
25.2
24.2
25.5
25.5
25.2
22.9
21.9
19.4
19.2
Inventory valuation adjustment
-1.1
-3.3
-5.4
-.1
-2.1
-.4
-3.3
-5.4
-2.6
-.9
-4.2
-5.9
-6.0
-3.2
-6.5
-5.8
-4.5
-5.8
Net interest
24.4
27.8
30.7
9.2
17.9
24.8
25.6
26.4
27.3
28.2
29.1
29.7
30.4
31.0
31.7
32.4
33.1
33.8
Addendum:
Compensation of general govern-
ment employees
85.1
94.9
103.6
49.5
66.5
85.8
88.9
91.1
93.7
96.9
98.0
99.4
101.4
106.0
107.7
111.0
112.8
113.9
Note Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
Disposition of National Income, Selected Periods, 1961-70
Oct 13
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
National income
653.6
712.7
769.5
412.2
556.7
658.3
671.6
687.2
706.1
722.2
735.2
749.3
764.0
779.5
785.2
791.5
797.7
Less:
Corporate profits and inven-
tory valuation adjustment
78.7
85.4
85.8
45.0
74.4
78.4
80.0
81.3
86.0
87.4
87.1
87.1
87.4
86.8
82.0
76.7
77.8
Contributions for social
insurance
42.4
47.1
53.6
20.9
29.3
42.7
43.7
45.5
46.7
47.7
48.7
51.9
53.1
54.2
55.1
56.0
56.7
576
Wage accruals less dis-
bursements
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
2.5
-2.1
-4
Plus:
Government transfer pay-
ments to persons
48.7
55.7
61.6
29.8
35.3
48.9
49.9
52.9
55.3
56.6
58.0
59.8
61.0
62.0
63.4
66.3
75.8
75.0
Interest paid by government
26.3
29.0
15.0
20.4
23.7
24.2
25.1
25.9
26.7
27.5
28.0
28.6
29.1
30.2
31.0
31.4
32.2
(net) and by consumers
23.6
Dividends
21.4
23.3
24.7
13.5
19.4
21.9
21.0
22.3
23.1
23.8
24.1
24.1
24.4
25.0
25.2
25.2
25.1
25.4
Business transfer payments
3.1
3.3
3.5
2.0
2.7
3.1
3.2
3.2
3.3
3.4
3.5
3.5
3.5
3.5
3.5
3.6
3.6
36
Equals: Personal income
629.3
688.7
748.9
406.6
530.8
634.7
646.3
664.0
680.9
697.6
712.5
725.8
741.1
758.1
770.5
782.3
801.3
807.1
Less:
Personal tax and nontax
payments
83.0
97.5
117.3
51.8
66.1
84.0
86.3
89.1
92.6
102.1
106.5
113.8
118.1
117.5
119.9
117.0
117.7
114.1
546.3
591.2
631.6
354.8
464.7
550.7
559.9
574.9
588.4
595.6
606.0
612.0
623.0
640.6
650.6
665.3
683.6
693.0
Equals: Disposable personal income
Less:
Personal outlays
506.0
550.8
593.9
336.4
439.7
509.4
516.6
534.1
543.8
559.1
566.4
577.7
589.7
598.7
609.6
620.5
632.1
640.5
Personal consumption
expenditures
492.1
535.8
577.5
328.4
427.9
495.5
502.5
519.7
529.1
543.8
550.8
561.8
573.3
582.1
592.6
603.1
614.4
6224
Interest paid by consumers.
13.2
14.3
15.7
7.6
11.2
13.2
13.5
13.8
14.1
14.5
14.9
15.3
15.6
15.8
16.1
16.4
16.8
172
Personal transfer payments
to foreigners
.7
.7
.8
.5
.7
.7
.6
.7
.7
.8
.7
.7
.8
.9
.8
.9
1.0
1.0
Equals: Personal saving
40.4
40.4
37.6
18.4
24.9
41.3
43.3
40.8
44.6
36.5
39.6
34.3
33.3
42.0
41.1
44.8
51.5
52.5
Addendum:
Personal saving as percent of
disposable personal income
7.4
6.8
6.0
5.2
5.4
7.5
7.7
7.1
7.6
6.1
6.5
5.6
5.3
6.5
6.3
6.7
7.5
7.6
Disposable personal income in
1958 prices ($ billions)
477.5
499.0
511.5
341.8
427.1
479.7
483.9
492.3
498.6
501.2
504.0
504.7
507.5
515.9
517.8
522.9
532.0
534.7
Note. Detaill will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
5
Federal Government Receipts and Expenditures in the National Income and
Product Accounts, Selected Periods, 1961-70
Qt.13.
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
Federal Government receipts
151.2
175.4
200.6
94.4
124.8
151.9
156.5
165.3
170.0
180.1
186.2
197.2
202.5
200.8
202.0
195.9
196.6
Personal tax and nontax receipts
67.5
79.3
95.9
44.2
54.4
68.4
70.1
71.9
74.6
83.4
87.2
93.7
97.3
95.6
96.9
93.4
93.5
89.4
Corporate profits tax accruals
30.7
37.5
39.2
19.5
28.8
30.2
31.9
36.7
37.3
37.3
38.5
39.9
40.2
38.6
38.1
34.8
34.8
Indirect business tax and nontax
accruals
16.3
18.0
19.1
12.9
16.8
16.4
16.8
17.4
17.8
18.2
18.4
18.5
19.0
19.5
19.3
19.3
19.4
20.0
Contributions for social insurance
36.7
40.7
46.5
17.8
24.9
36.9
37.7
39.3
40.3
41.2
42.0
45.1
46.0
47.0
47.7
48.4
48.9
49.7
Federal Government expenditures
163.6
181.6
191.3
99.3
120.2
165.0
168.8
174.5
180.5
184.2
187.2
187.7
189.1
192.5
195.9
197.7
210.9
207.7
Purchases of goods and services
90.7
99.5
101.3
55.4
65.5
91.4
93.6
96.4
98.9
100.7
101.9
100.9
99.8
102.5
102.1
102.3
99.7
99.0
Transfer payments
42.2
47.8
52.1
26.6
30.9
42.7
42.7
45.1
47.6
48.7
49.9
50.6
52.2
52.2
53.3
55.3
64.4
62.9
To persons
40.0
45.7
50.0
24.4
28.5
40.1
40.7
43.3
45.5
46.5
47.5
48.9
49.8
50.3
51.2
53.4
62.4
60.9
To foreigners (net)
2.2
2.1
2.1
2.1
2.4
2.6
2.0
1.8
2.0
2.2
2.4
1.8
2.5
1.9
2.1
1.9
2.0
1.9
Grants-in-aid to State and local
governments
15.8
18.4
20.2
7.2
10.9
16.2
17.4
17.7
18.3
18.6
19.0
19.3
19.6
20.0
21.8
23.0
25.1
25.1
Net interest paid
10.2
11.8
13.1
6.7
8.7
10.2
10.5
11.2
11.7
12.1
12.5
12.6
12.9
13.2
13.9
14.3
14.3
14.8
Subsidies less current surplus
of government enterprises
4.6
4.1
4.6
3.5
4.2
4.6
4.6
4.1
4.1
4.1
4.0
4.3
4.6
4.6
4.9
5.3
5.3
5.7
Less: Wage accruals less
disbursements
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
2.5
-2.1
4
Surplus or deficit (-), national
income and product accounts
-12.4
-6.2
9.3
-4.9
4.7
-13.1
-12.3
-9.2
-10.5
-4.1
-1.1
9.5
13.4
8.3
6.1
-1.7
-14.3
Note. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
6
State and Local Government Receipts and Expenditures in the National Income and
Product Accounts, Selected Periods, 1961-70
Oct 13,
August 12, 1970
(Billions of dollars; seasonally adjusted annual rates)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
127.3
State and local government receipts.
93.5
106.3
118.3
52.2
74.5
94.9
98.3
102.1
105.3
107.9
110.0
113.3
116.3
119.6
123.9
132.0
21.4
7.5
11.7
15.6
16.3
17.2
18.0
18.6
19.3
20.0
20.8
21.9
23.0
23.6
24.2
24.7
Personal tax and nontax receipts
15.5
18.3
Corporate profits tax accruals
2.4
3.1
3.5
1.2
2.0
2.4
2.5
3.1
3.1
3.1
3.2
3.6
3.6
3.4
3.3
3.2
3.2
Indirect business tax and nontax
58.0
59.5
61.0
61.9
63.6
65.3
67.1
68.4
70.0
71.7
73.0
accruals
54.1
60.1
66.1
33.1
45.4
54.9
56.1
Contributions for social insurance
5.7
6.4
7.1
3.1
4.4
5.8
6.0
6.2
6.3
6.5
6.7
6.8
7.0
7.2
7.4
7.5
7.7
7.9
19.6
20.0
21.8
23.0
25.1
25.1
Federal grants-in-aid
15.8
18.4
20.2
7.2
10.9
16.2
17.4
17.7
18.3
18.6
19.0
19.3
State and local government expend-
itures
95.1
107.4
118.9
52.7
73.3
95.7
99.0
103.7
106.0
108.3
111.9
115.1
117.9
119.8
122.9
126.8
128.7
132.9
Purchases of goods and services
89.4
100.7
110.8
49.0
68.9
89.9
92.9
97.2
99.4
101.4
104.7
107.5
110.1
111.6
114.2
117.4
118.7
122.4
6.8
8.8
9.2
9.6
9.8
10.2
10.5
11.0
11.2
11.7
12.2
12.9
13.5
14.1
Transfer payments to persons
8.7
10.0
11.5
5.3
Net interest paid
.2
.2
.1
.7
.5
.2
.2
.2
.2
.1
.1
.1
.1
.2
.2
.2
.3
.2
Less: Current surplus of govern-
3.5
3.5
3.6
3.6
3.7
3.7
3.8
3,8
ment enterprises
3.2
3.4
3.6
2.3
3.0
3.2
3.3
3.3
3.4
3.4
Surplus or deficit (-), national
income and product accounts
-1.6
-1.1
-.6
-.5
1.2
-.8
-.7
-1.6
-.7
-.4
-1.9
-1.8
-1.5
-.3
1.0
.5
3.3
Note. Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
7
Gross National Product or Expenditure in Constant Prices, Selected Periods, 1961-70
August 12, 1970
(Billions of dollars, 1958 prices, seasonally adjusted annual rates)
1961
1965
1967
Item
1968
1969
1967
1968
1969
1970
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
Gross national product or expenditure
675.2
707.2
727.1
482.6
610.4
678.9
683.6
693.5
705.4
712.6
717.5
722.1
726.1
730.9
729.2
723.8
724.9
727.5
Personal consumption expenditure
430.1
452.3
467.7
316.2
393.4
431.6
434.3
445.0
448.4
457.7
458.1
463.3
467.1
468.7
471.7
474.0
478.1
480.2
Durable goods
72.9
81.4
84.9
41.7
64.3
73.3
74.0
78.1
80.2
83.9
83.2
84.9
85.7
84.1
84.9
82.7
84.9
839
Nondurable goods
190.2
196.5
201.2
150.8
177.8
190.0
190.3
195.5
194.9
197.9
197.6
199.7
200.9
201.9
202.4
205.6
206.6
208.2
Services
167.0
174.4
181.6
123.7
151.3
168.3
169.9
171.3
173.2
175.9
177.4
178.7
180.5
182.7
184.4
185.8
186.6
1881
Gross private domestic investment
101.2
105.7
111.3
62.4
96.8
102.4
105.1
101.3
107.1
105.1
109.5
109.7
111.5
114.1
110.0
102.9
103.1
102.6
Fixed investment
93.5
98.8
104.1
65.8
88.5
94.2
95.9
98.9
97.6
97.7
101.0
103.6
104.8
104.2
103.9
101.5
100.1
99.5
Nonresidential
73.2
75.5
80.8
44.9
64.8
72.9
72.9
76.1
73.8
74.9
77.1
79.3
80.2
81.9
82.1
80.9
80.2
796
Structures
22.6
22.7
24.0
17.6
22.1
22.3
22.1
23.4
22.3
22.3
22.9
23.8
23.1
24.6
24.3
24.4
23.5
22.8
Producers' durable equipment.
50.6
52.7
56.9
27.3
42.7
50.6
50.8
52.7
51.5
52.6
54.3
55.4
57.0
57.3
57.8
56.5
56.7
56.8
Residential structures
20.4
23.3
23.3
20.9
23.7
21.3
23.0
22.9
23.8
22.8
23.9
24.3
24.7
22.3
21.8
20.7
20.0
19.9
Nonfarm
19.9
22.9
22.8
20.3
23.2
20.8
22.5
22.4
23.4
22.3
23.5
23.9
24.2
21.8
21.4
20.2
19.5
19.5
Farm
.5
.4
.4
.6
.5
.5
.5
.5
.4
.4
.4
.4
.4
.4
.4
.4
.4
.4
Change in business inventories
7.7
6.9
7.2
-3.4
8.3
8.3
9.2
2.4
9.5
7.4
8.5
6.1
6.6
9.9
6.1
1.3
2.9
3.2
Nonfarm
7.0
6.8
6.8
-3.6
7.5
7.4
7.8
2.2
9.4
7.3
8.4
5.9
6.3
9.3
5.4
.8
2.5
2.7
Farm
.7
.1
.4
.2
.8
.9
1.4
.2
.1
.1
.1
.1
.3
.6
.8
.6
.4
.4
Net exports of goods and services
3.6
.9
.2
6.4
7.0
4.2
2.1
.8
1.5
1.5
-.2
-.4
-.3
.8
.9
1.9
2.4
2.9
Exports
42.1
45.7
48.5
28.3
39.0
42.2
42.6
43.8
45.4
47.8
45.6
42.3
50.7
50.8
50.0
52.0
52.9
534
Imports
38.5
44.8
48.2
21.9
32.0
38.0
40.4
43.1
43.9
46.3
45.8
42.6
51.1
50.0
49.1
50.1
50.5
50.6
Government purchases of goods
and services
140.2
148.3
147.8
97.6
113.1
140.7
142.2
146.4
148.5
148.3
150.0
149.5
147.9
147.3
146.6
145.0
141.3
141.7
Federal
74.7
78.7
75.7
52.2
57.2
75.4
75.5
77.5
79.1
78.9
79.4
78.0
75.8
75.2
73.8
71.1
67.8
67,2.
State and local
65.5
69.6
72.1
45.4
56.0
65.3
66.7
68.9
69.4
69.4
70.6
71.5
72.1
72.1
72.9
73.8
73.5
74.5
Addendum:
Final sales
667.5
700.3
719.9
486.0
602.1
670.6
674.4
691.1
695.9
705.2
709.0
716.1
719.4
720.9
723.0
722.4
721.9
7243
Per capita disposable personal
income (dollars:
Current prices
2,744
2,939
3,108
1,942
2,392
2,761
2,800
2,868
2,928
2,956
2,999
3,023
3,070
3,148
3,188
3,252
3,333
3,369
1958 prices
2,398
2,480
2,517
1,871
2,198
2,405
2,419
2,456
2,482
2,488
2,495
2,493
2,501
2,535
2,537
2,556
2,594
2,599
Note Detail will not necessarily add to totals because of rounding.
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
Council of Economic Advisers
8
Implicit Price Deflators for Gross National Product, Selected Periods, 1961-70
August 12, 1970
(Index numbers 1958=100; seasonally adjusted)
1961
1965
1967
1968
1969
1970
Item
1967
1968
1969
I
II
III
IV
I
II
III
IV
I
II
III
IV
I
II
III
Gross national product
117.59
122.31
128.11
104.34
110.70
117.98
119.35
120.39
121.65
122.90
124.25
125.68
127.22
128.97
130.52
132.57
133.98
135.43
Personal consumption
expenditures
114.4
118.5
123.5
103.8
108.8
114.8
115.7
116.8
118.0
118.8
120.2
121.3
122.8
124.2
125.6
127.2
128.5
129.7
Durable goods
100.3
103.3
106.0
100.4
100.1
100.6
101.7
102.3
102.9
103.4
104.6
105.0
105.7
106.4
107.0
107.8
108.2
109.0
Nondurable goods
113.0
117.1
122.2
102.2
106.6
113.4
114.1
115.4
116.8
117.5
118.8
119.8
121.5
122.9
124.5
125.9
127.1
127.5
Services
122.2
127.1
133.1
107.1
114.9
122.6
123.7
125.0
126.4
127.6
129.1
130.6
132.3
133.8
135.5
137.3
139.3
141.1
Gross private domes-
tic investment
--
--
--
--
--
--
--
--
--
--
--
Fixed investment
115.9
120:4
126.2
102.9
109.0
116.7
117.9
118.4
119.9
121.1
122.1
124.2
125.4
127.1
128.0
129.6
131.0
133.5
Nonresidential
113.8
117.5
122.8
102.4
107.3
114.3
115.4
116.1
117.0
117.9
118.8
120.7
121.6
123.9
125.1
126.8
128.2
130.3
Structures
124.0
130.3
141.1
104.8
113.8
125.1
126.4
127.5
129.6
131.7
132.6
136.8
139.5
143.3
144.7
146.4
150.0
155.1
Producers'
durable
equipment
109.3
111.9
115.1
100.9
103.9
109.6
110.6
111.1
111.6
112.1
113.0
113.7
114.4
115.6
116.8
118.4
119.2
120.4
Residential
structures
123.1
129.7
137.7
104.1
113.7
124.8
125.6
126.0
128.6
131.5
132.5
135.5
137.4
138.9
139.3
140.6
142.4
146.1
Nonfarm
123.1
129.8
137.8
104.0
113.7
124.8
125.6
126.1
128.7
131.6
132.6
135.6
137.5
139.0
139.4
140.7
142.5
146.2
Farm
122.6
125.9
132.3
104.9
109.3
123.9
123.5
125.1
124.9
126.5
127.3
128.9
131.1
133.6
135.1
136.7
137.9
1418
Change in business
inventories
--
--
--
--
--
--
--
--
--
--
--
-
--
Net exports of goods
and services
--
--
--
--
--
--
Exports
109.7
110.9
114.6
100.7
104.6
109.6
109.9
108.9
111.8
111.2
111.5
113.0
112.7
114.6
117.7
117.5
118.8
Imports
106.5
107.5
111.1
100.1
102.2
106.9
105.9
106.6
107.8
107.5
108.1
109.0
109.5
111.2
114.5
114.9
116.2
116.2
Government purchases
of goods & services
128.5
135.0
143.5
106.9
118.9
128.9
131.2
132.2
133.5
136.3
137.8
139.5
141.9
145.4
147.5
151.5
154.6
156.20
Federal
121.5
126.4
133.9
106.2
114.5
121.2
123.9
124.4
125.0
127.6
128.4
129.5
131.7
136.3
138.4
143.8
147.0
147.3
State and local
136.4
144.7
153.7
107.8
123.1
137.7
139.3
141.1
143.3
146.1
148.3
150.4
152.6
154.9
156.7
158.9
161.5
1642
By major sector:
Private
114.79
118.92
124.22
103.6
108.8
115.20
116.28
117.22
118.38
119.37
120.66
122.08
123.55
124.90
126.32
127.96
129.24
130.66
General government
147.7
159.1
170.8
112.1
132.3
147.7
152.3
154.5
157.1
161.1
163.6
165.4
167.6
173.6
176.5
182.9
185.9
187.8
Source: Department of Commerce.
Reproduced at the Richard Nixon Presidential Library
TABLE A.
PROJECTED GROSS NATIONAL PRODUCT CONSISTENT WITH A 6% GROWTH
IN THE MONEY SUPPLY (M1).
DATE
PROJGNPS#
MONEY1#
MONEYTOGNP#
68: 1
834.900
183.367
0.219627
68: 2
858.100
186.700
0.217574
68: 3
875.800
190.667
0.217706
68: 4
891.400
193.400
0.216962
69: 1
907.600
196.300
0.216285
69: 2
923.700
198.467
0.214861
69: 3
942.600
199.1.00
0.211224
69: 4
951.700
199.333
0.209450
70: 1
959.500
200.633
0.209102
70: 2
971.100
203.600
0.209659
70: 3
985.570
206.472
0.209495
70: 4
1003.46
209.429
0.208707
71: 1
1026.38
212.464
0.207004
71: 2
1050.16
215.572
0.205275
71: 3
1068.11
218.750
0.204800
71: 4
1083.97
221.994
0.204797
72: 1
1099.51
225.302
0.204912
72: 2
1111.98
228.672
0.205643
?
Reproduced at the Richard Nixon Presidential Library
TABLE B.
RATIO OF MONEY SUPPLY (M1) TO THE OPTIMAL FEASIBLE PATH FOR
GNP. MONEY SUPPLY GROWS AT A 6% RATE PER ANNUM.
DATE
OFPGNP$#
MONEY1#
MONEYTOGNP#
68: 1
834.900
183.367
0.219627
68: 2
858.100
186.700
0.217574
68: 3
875.800
190.667
0.217706
68: 4
891.400
193.400
0.216962
69: 1
907.600
196.300
0.216285
69: 2
923.700
198.467
0.214861
69: 3
942.600
199.100
0.211224
69: 4
951.700
199.333
0.209450
70: 1
959.500
200.633
0.209102
70: 2
971.100
203.600
0.209659
70: 3
989.000
206.472
0.208769
70: 4
1007.00
209.429
0.207973
71: 1
1035.00
212.464
0.205279
71: 2
1063.00
215.572
0.202796
71: 3
1089.00
218.750
0.200872
71:4
1115.00
221.994
0.199098
72:1
1141.00
225.302
0.197460
72: 2
1167.00
228.672
0.195949
Ros
?
Reproduced at the Richard Nixon Presidential Library
TABLE C.
REQIRED MONEY SUPPLY (M1) TO ACHIEVE OPTIMAL FEASIBLE PATH
BY 1972-2.
DATE
PROJGNP$#
MONEY1#
MONEY1TOGNP#
68: 1
834.900
183.367
0.219627
68: 2
858.100
186.700
0.217574
68: 3
875.800
190.667
0.217706
68: 4
891.400
193.400
0.216962
69: 1
907.600
196.300
0.216285
69: 2
923.700
198.467
0.214861
69: 3
942.600
199.100
0.211224
69: 4
951.700
199.333
0.209450
70: 1
959.500
200.633
0.209102
70: 2
971.100
203.600
0.209659
70: 3
987.134
206.579
0.209271
70: 4
1008.08
209.732
0.208051
71: 1
1035.24
213.038
0.205786
71: 2
1063.88
216.483
0.203484
71:3
1089.58
220.259
0.202151
71: 4
1115.33
224.324
0.201128
72: 1
1142.28
228.646
0.200167
72: 2
1167.51
233.198
0.199740
?
Reproduced at the Richard Nixon Presidential Library
TABLE C ( CON'T ).
REQUIRED MONEY SUPPLY (M2) TO ACHIEVE OPTIMAL FEASIBLE PATH
BY 1972-2
DATE
PROJGNP$#
MONEY2#
MONEY2TOGNP#
68: 1
834.900
369.067
0.442049
68: 2
858.100
374.867
0.436857
68: 3
875.800
384.433
0.438951
68: 4
891.400
395.533
0.443721
69: 1
907.600
398.933
0.439548
69: 2
923.700
400.067
0.433113
69: 3
942.600
394.533
0.418559
69: : 4
951.700
393.000
0.412945
70: 1
959.500
393.433
0.410040
70: 2
971.100
403.100
0.415096
70: 3
987.134
424.238
0.429767
70: 4
1008.08
442.391
0.438846
71: 1
1035.24
458.678
0.443064
71: 2
1063.88
473.830
0.445380
71:3
1089.58
489.515
0.449871
71: 4
1115.33
505.679
0.453390
72: 1
1142.28
522.293
0.457238
72: 2
1167.51
539.340
0.461959
?
Reproduced at the Richard Nixon Presidential Library
TABLE D.
MONEY SUPPLY (M1) CONSISTENT WITH OPTIMAL FEASIBLE PATH GNP
ASSUMING A CONSTANT M1/GNP RATIO = .210
DATE
OFPGNPS#
M1#
MONEY1TOGNP#
68: 1
834.900
183.367
0.219627
68: 2
858.100
186.700
0.217574
68: 3
875.800
190.667
0.217706
68: 4
891.400
193.400
0.216962
69: 1
907.600
196.300
0.216285
69: 2
923.700
198.467
0.214861
69: 3
942.600
199.100
0.211224
69: 4
951.700
199.333
0.209450
70: 1
959.500
200.633
0.209102
70: 2
971.100
203.600
0.209659
70: 3
989.000
207.690
0.210000
70: 4
1007.00
211.470
0.210000
71: 1
1035.00
217.350
0.210000
71: 2
1063.00
223.230
0.210000
71: 3
1089.00
228.690
0.210000
71: 4
1115.00
234.150
0.210000
72: 1
1141.00
239.610
0.210000
72: 2
1167.00
245.070
0.210000
?
Reproduced at the Richard Nixon Presidential Library
TABLE E.
MONEY SUPPLY (M2) CONSISTENT WITH OPTIMAL FEASIBLE PATH GNP
ASSUMING A CONSTANT M2/GNP RATIO = .415
DATE
OFPGNP$#
M2#
MONEY2TOGNP#
68: 1
834.900
369.067
0.442049
68: 2
858.100
374.867
0.436857
68: 3
875.800
384.433
0.438951
68: 4
891.400
395.533
0.443721
69: 1
907.600
398.933
0.439548
69: 2
923.700
400.067
0.433113
69: 3
942.600
394.533
0.418559
69: 4
951.700
393.000
0.412945
70: 1
959.500
393.433
0.410040
70: 2
971.100
403.100
0.415096
70: 3
989.000
410.435
0.415000
70: 4
1007.00
417.905
0.415000
71: 1
1035.00
429.525
0.415000
71: 2
1063.00
441.145
0.415000
71: 3
1089.00
451.935
0.415000
71: 4
1115.00
462.725
0.415000
72: 1
1141.00
473.515
0.415000
72: 2
1167.00
484.305
0.415000 .
?
Reproduced at the Richard Nixon Presidential Library
TABLE F.
MONEY SUPPLY (M1) CONSISTENT WITH OPTIMAL FEASIBLE PATH GNP
ASSUMOING A DOWNWARD TREND IN THE M1/GNP RATIO. (TREND IS A
PROJECTION OF THE TREND OF THE LAST 10 QUARTERS.)
DATE
OFPGNP$#
M1#
MONEY1TOGNP#
68: 1
834.900
183.367
0.219627
68: 2
858.100
186.700
0.217574
68: 3
875.800
190.667
0.217706
68: 4
891.400
193.400
0.216962
69: 1
907.600
196.300
0.216285
69: 2
923.700
198.467
0.214861
69: 3
942.600
199.100
0.211224
69: 4
951.700
199.333
0.209450
70: 1
959.500
200.633
0.209102
70: 2
971.100
203.600
0.209659
70: 3
989.000
206.701
0.209000
70: 4
1007.00
209.456
0.208000
71: 1
1035.00
214.245
0.207000
71: 2
1063.00
218.978
0.206000
71: 3
1089.00
223.245
0.205000
71: 4
1115.00
227.460
0.204000
72: 1
1141.00
231.623
0.203000
72: 2
1167.00
235.734
0.202000
?
Reproduced at the Richard Nixon Presidential Library
TABLE G.
MONEY SUPPLY (M2) CONSISTENT WITH OPTIMAL FEASIBLE PATH GNP
ASSUMING A DOWNWARD THEND IN THE M2/GNP RATIO. (TREND IS A
PROJECTION OF THE TREND OF THE LAST 10 QUARTERS.)
DATE
OFPGNPS#
M2#
MONEY2TOGNP#
68: 1
834.900
369.067
0.442049
68: 2
858.100
374.867
0.436857
68: 3
875.800
384.433
0.438951
68: 4
891.400
395.533
0.443721
69: 1
907.600
398.933
0.439548
69: 2
923.700
400.067
0.433113
69: 3
942.600
394.533
0.418559
69: 4
951.700
393.000
0.412945
70: 1
959.500
393.433
0.410040
70: 2
971.100
403.100
0.415096
70: 3
989.000
407.468
0.412000
70: 4
1007.00
411.863
0.409000
71: 1
1035.00
420.210
0.406000
71: 2
1063.00
428.389
0.403000
71: 3
1089.00
435.600
0.400000
71: 4
1115.00
442.655
0.397000
72: 1
1141.00
449.554
0.394000
72: 2
1167.00
456.297
0.391000
?
Reproduced at the Richard Nixon Presidential Library
UNITED STATES DEPARTMENT OF
COMMERCE
OFFICE OF
BUSINESS
NEWS
ECONOMICS
WASHINGTON, D.C. 20230
FOR IMMEDIATE RELEASE THURSDAY, OCTOBER 15, 1970
Leo Bernstein: 967-3040
OBE 70-57
GROSS NATIONAL PRODUCT
PRELIMINARY REPORT FOR THE THIRD QUARTER 1970
Gross national product -- the market value of the Nation's output of
goods and services -- rose to a seasonally adjusted annual rate of $985-1/4
billion in the third quarter, an increase of $14 billion from the second
quarter, according to preliminary figures released today by the Commerce
Department's Office of Business Economics.
The advance amounted to 6 percent at an annual rate, and reflected
increases of about 1-1/2 percent in the physical volume of production and
almost 4-1/2 percent in prices. The GNP gain in the third quarter was
curtailed by the auto production loss resulting from the strike that began
in mid-September.
The Office of Business Economics emphasized that the July-September
quarter figures are based on preliminary and incomplete source data. The
estimate of inventory investment -- a volatile element of GNP -- is derived
from information for only the first 2 months of the quarter, and the data
on domestic and foreign trade and consumer prices are also incomplete at
this time. Revised estimates of GNP and its components based on more
comprehensive data are scheduled for release in mid-November.
/More/
Reproduced at the Richard Nixon Presidential Library
- 2 -
The average rise in prices of all goods and services -- as measured by
the GNP implicit price deflator -- was about the same as in the prior
quarter.
Final sales higher across the board
Final sales increased by $13 billion to account for virtually all the
third quarter GNP gain. This was an acceleration from the second quarter,
when final sales increased by $10-1/4 billion. Inventory investment increased
moderately for the second quarter in a row, rising by $1 billion compared
with $1-1/2 billion in the second quarter. Stock accumulation had declined
substantially in the two earlier quarters.
The advance in final sales was broadly based. Increases were registered
in consumer spending on nondurable goods and services, business fixed invest-
ment, residential construction, net exports, and State and local government
purchases. Small reductions occurred in consumer purchases of durable goods
and Federal Government spending.
Consumer spending and income up moderately
Personal consumption expenditures rose by $8 billion in the third quarter,
considerably less than the $11-1/4 billion increase recorded in the second
quarter. It was the smallest increase since the fourth quarter of 1968.
Contributing to slower growth were a reduction of $1/2 billion in outlays
for durable goods and a deceleration in the growth of nondurables spending,
which rose $3 billion in contrast to $4 billion in the spring. The smaller
increase in consumer nondurable outlays occurred in food, which increased
by only about $1 billion, compared with an average increase of $2-1/2 billion
in recent quarters.
Consumer spending on services rose $5-1/2 billion, somewhat more than
the rise in the second quarter.
The fractional dip in consumer spending on durable goods contrasted with
a $3 billion rise in the second quarter. Since the second quarter of 1969,
there has been an alternating pattern of increases and decreases in consumer
durable goods purchases. The dip in the third quarter centered in purchases
of furniture and household equipment, with auto buying about unchanged.
Disposable personal income rose by $9-1/2 billion, the smallest gain
since the first quarter of 1969. With incomes rising a little more than
consumer spending, the personal saving rate edged to 7.6 percent from
7.5 percent in the second quarter.
/More/
Reproduced at the Richard Nixon Presidential Library
- 3 -
Investment up
Fixed investment rose by $1-1/2 billion in the third quarter following
two quarters of decline. Business fixed investment, which showed little
change in the two preceding quarters, moved up $1 billion. The increase
occurred mainly in machinery and equipment. Residential construction outl
turned around with an increase of $3/4 billion after falling four consecut
quarters.
Business firms added inventories at an annual rate of $4 billion,
compared with $3 billion in the second quarter. The increase in accumulat
occurred chiefly in retail trade. The rate of accumulation in wholesale
trade and manufacturing appeared little changed.
Net exports rose by $1/2 billion, the same as in the second quarter, a
exports gained while imports showed little change. This marked tne third
consecutive quarter that net exports have gained.
Government purchases: Federal lower, State and local higher
Federal Government purchases of goods and services continued to trend
downward with a $3/4 billion reduction in the third quarter. Military sp
fell by almost $1-1/2 billion, but this was partly offset by a $1 billion
increase in nondefense spending, chiefly agricultural outlays.
State and local government purchases advanced by $3-3/4 billion after
relatively small $1-1/4 billion rise in the second quarter. A sharp pick
in State and local government construction activity accounted for the
acceleration.
GNP and personal income statistics for the third quarter are shown in
the accompanying table, together with comparative data for recent periods
Additional national income and product statistics will appear in the Octo
issue of the Survey of Current Business, monthly magazine of the Office o
Business Economics.
The Survey is available from Field Offices of the Department of Comme
or from the Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402, at an annual subscription price of $9, including
weekly supplements; single copy, $1.
/More/
Reproduced at the Richard Nixon Presidential Library
FORM BE-679
U.S. DEPARTMENT OF COMMERCE
(8-10-70)
GROSS NATIONAL PRODUCT AND DISPOSITION OF PERSONAL INCOME
OFFICE OF BUSINESS ECONOMICS
1969
1970
1969
1970
p
1967
1968
1969
p
GROSS NATIONAL PRODUCT
III
IV
I
II
III
1967
1968
1969
III
IV
I
II
III
Seasonally adjusted at annual rates
Seasonally adjusted at annual rates
Billions of current dollars
Billions of 1958 dollars
Gross national product (GNP)
793.9
865.0
931.4
942.6
951.7
959.5
971.1
985.2
675.2
707.2
727.1
730.9
729.2
723.8
724.9
727.5
Personal consumption expenditures
492.1
535.8
577.5
582.1
592.6
603.1
614.4
622.4
430.1
452.3
467.7
468.7
471.7
474.0
478.1
480.2
Durable goods.
73.1
84.0
90.0
89.5
90.8
89.1
91.9
91.4
72.9
81.4
84.9
84.1
84.9
82.7
84.9
83.9
Nondurable goods
215.0
230.2
245.8
248.1
252.0
258.8
262.6
265.5
109.2
196.5
201.2
201.9
202.4
205.6
206.6
208.2
Services.
204.0
221.6
241.6
244.5
249.8
255.2
259.9
265.4
167.0
174.4
181.6
182.7
184.4
185.8
186.6
188.1
Gross private domestic investment
116.6
126.5
139.8
143.8
140.2
133.2
134.3
136.8
101.2
105.7
111.3
114.1
110.0
102.9
103.1
102.6
Fixed investment.
108.4
118.9
131.4
132.4
133.0
131.6
131.2
132.8
93.5
98.8
104.1
104.2
103.9
101.5
100.1
99.5
Nonresidential
83.3
88.7
99.3
101.5
102.6
102.6
102.8
103.7
73.2
75.5
80.8
81.9
82.1
80.9
80.2
79.6
Structures
28.0
29.6
33.8
35.2
35.1
35.7
35.3
35.4
22.6
22.7
24.0
24.6
24.3
24.4
23.5
22.8
Producers' durable equipment.
55.3
59.1
65.5
66.3
67.5
66.9
67.5
68.4
50.6
52.7
56.9
57.3
57.8
56.5
56.7
56.8
Residential structures
25.1
30.3
32.0
31.0
30.4
29.1
28.4
29.1
20.4
23.3
23.3
22.3
21.8
20.7
20.0
19.9
Nonfarm.
24.5
29.7
31.5
30.4
29.8
28.4
27.8
28.5
19.9
22.9
22.8
21.8
21.4
20.2
19.5
19.5
Farm.
.6
.5
.6
.6
.6
.6
.6
.6
.5
.4
.4
.4
.4
.4
.4
.4
Change in business inventories
8.2
7.6
8.5
11.3
7.2
1.6
3.1
4.0
7.7
6.9
7.2
9.9
6.1
1.3
Nonfarm
7.5
10.8
.9
2.6
3.5
2.9
3.2
7.5
8.0
6.5
7.0
6.8
6.8
9.3
5.4
.8
2.5
Farm.
.7
.1
.4
.5
2.7
.7
.7
.5
.5
.7
.1
.4
.6
.8
.6
.4
4
Net exports of goods and services
5.2
2.5
1.9
2.6
2.6
3.5
4.1
4.7
3.6
.9
.2
.8
.9
Exports.
46.2
1.9
2.4
50.6
58.3
2.9
55.5
58.8
61.1
62.8
63.5
42.1
45.7
48.5
50.8
50.0
52.0
52.9
Imports
41.0
48.1
53.6
53.4
55.6
56.2
57.6
58.7
58.8
38.5
44.8
48.2
50.0
49.1
50.1
50.5
50.6
Government purchases of goods and services
180.1
200.2
212.2
214.1
216.3
219.6
218.4
221.3
140.2
148.3
147.8
147.3
146.6
Federal.
145.0
141.3
141.7
90.7
99.5
101.3
102.5
102.1
102.3
99.7
99.0
74.7
78.7
75.7
75.2
73.8
National defense
71.1
67.8
67.2
72.4
78.0
78.8
79.8
78.8
79.3
76.8
XXXXXX
XXXXXX
75.2
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Other.
18.4
21.5
22.6
22.7
23.3
23.0
22.9
23.8
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
State and local.
89.4
100.7
110.8
111.6
114.2
117.4
118.7
122.4
65.5
69.6
72.1
72.1
72.9
73.8
73.5
74.5
Addenda:
Final sales (GNP less change in business inventories)
785.7
857.4
922.9
931.2
944.5
957.9
968.1
981.2
667.5
700.3
719.9
720.9
723.0
722.4
721.9
724.3
Implicit price deflator, index numbers, 1958 = 100:
GNP.
117.59
122.31
128.11
128.97
130.52
132.57
133.98
135.43
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Private GNP (GNP less general government employee comp.)
114.79
118.92
124.22
124.90
126.32
127.96
129.24
130.66
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Change from preceding period, percent at annual rate:
GNP.
5.9
9.0
7.7
8.4
3.9
3.3
4.9
6.0
2.6
4.8
2.8
2.7
-.9
-2.9
.6
1.4
GNP implicit price deflator
3.2
4.0
4.7
5.6
4.9
6.4
4.3
4.4
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Private GNP implicit price deflator.
2.9
3.6
4.5
4.4
4.6
5.3
4.1
4.5
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
DISPOSITION OF PERSONAL INCOME
Personal income.
629.3
688.7
748.9
758.1
770.5
782.3
801.3
807.1
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Less: Personal tax and nontax payments
83.0
97.5
117.3
117.5
119.9
117.0
117.7
114.1
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Equals: Disposable personal income
546.3
591.2
631.6
640.6
650.6
665.3
683.6
693.0
477.5
499.0
511.5
515.9
517.8
522.9
532.0
Less: Personal outlays.
534.7
506.0
550.8
593.9
598.7
609.6
620.5
632.1
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
640.5
XXXXXX
XXXXXX
Equals: Personal saving
40.4
40.4
37.6
42.0
41.1
44.8
51.5
XXXXXX
52.5
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Personal saving as a percentage of disposable personal income.
7.4
6.8
6.0
6.5
6.3
6.7
7.5
7.6
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Per capita disposable personal income, dollars
2,744
2,939
3,108
3,148
3,188
3,252
3,333
3,369
2,398
2,480
2,517
2,535
2,537
2,556
2,594
2,599
Source: U.S. Department of Commerce, Office of Business Economics.
Preliminary.
USCOMM-DC 2230-P71
Reproduced at the Richard Nixon Presidential Library
THE WHITE HOUSE
WASHINGTON
October 15, 1970
MEMORANDUM FOR SECRETARY SHULTZ
SECRETARY KENNEDY
CHAIRMAN MC CRACKEN
SECRETARY STANS
In light of the subject that will be most on the minds
of the Business Council on Saturday, the attached from Wednesday's
"Wall Street Journal" may be of interest to you.
Peter M. Flanigan
Assistant to the
President
Dr. McCracken: Would it be too high a degree of propagandizing to
pass out a copy of this along with your most scholarly
packet?
Reproduced at the Richard Nixon Presidential Library
The index does not cover labor costs in ser-
Pay in Perspective
vice industries, where such measurements are
difficult to make. Other Government statistics,
however, suggest that service labor costs are
Labor Costs Increase
also rising more slowly. One index measures
overall labor costs per unit of gross national
More Slowly Despite
product, adjusted for price changes. This
index, which encompasses all segments of the
economy, rose only three-tenths of one percent
Fatter Union Pacts
in the second quarter, the latest period avail-
able. This was by far the smallest quarterly in-
crease in two years. In the second quarter of
Overtime Cutback, Hold-down
1969, the rise was four times as rapid.
Some economists forecast that these indexes
Of Nonumion Wages, Gain
may soon begin to drop. "I think we could very
well see a decline in unit labor costs" in com-
In Productivity Stem Rise
ing months, declares Nat Goldfinger, director
of economic research for the AFL-CIO. Mr.
Goldfinger's view is shared by John Myers,
director of economic research for the Confer-
Interpublic Slashes Salaries
ence Board, a management-oriented group
whose members include most big U.S. corpora-
tions. "Unit labor costs are not actually drop-
By ALFRED L. MALABRE JR.
Staff Reporter of THE WALL STREET JOURNAL
ping yet," says Mr. Myers, "but it could hap-
Labor costs aren't the Frankenstein mon-
pen."
ster they're often cracked up to be.
Pickup in Productivity
The recent slowing in the rise of labor costs,
Speechmakers from the executive suite fre-
quently portray the cost of labor as climbing
despite ever larger wage-rate increases, re-
flects a variety of factors. For one thing, the
utterly out of control, with ever-larger wage
settlements dooming the economy to ever-
productivity of most workers has recently
worse inflation. Typically, R. Heath Larry,
begun to rise, after a long period of no gain. In
the second quarter, the latest period available,
board vice president of U.S. Steel Corp., re-
cently complained to a group of Bridgeport,
output per man-hour of persons in private, non-
Conn., businessmen about the "fantastic rise"
farm jobs rose at an annual rate of 3.2%, and
in U.S. labor costs and worried gloomily
many economists estimate that a further in-
crease occurred in the third quarter. This rep-
whether this inflation-breeding "habit" could
ever be kicked.
resents a marked change. The productivity
level actually declined between the first quar-
Not mentioned in the speech: Labor costs,
ters of 1969 and 1970.
far from soaring, are only inching upward now-
adays. Some analysts, in fact, predict labor
Productivity gains, of course, tend to offset
costs may soon begin to decline.
pay increases. If a worker doubles his hourly
pay but also doubles his hourly production of
Admittedly, well-publicized developments in
washing machines, the cost of his labor per
collective bargaining suggest a very different
washing machine does not increase.
situation. In the first nine months of 1970, the
median first-year increase in hourly wage
The hourly pay of most workers has contin-
rates amounted to a record 27.9 cents, accord-
ued to increase faster than their productivity,
ing to preliminary results of a survey by the
so that unit labor costs have kept rising. But
Bureau of National Affairs, a Washington-
the disparity is much smaller than a glance at
based research organization. The survey cov-
wage rates might suggest. While increases in
ered more than 1,700 bargaining agreements,
hourly wage rates negotiated in collective bar-
each involving at least 50 workers. The com-
gaining have become larger, increases in ac-
parable wage increase in 1960 was 22.2 cents
tual hourly pay of workers generally have be-
and the rise in the 1968 period was 18.2 cents.
come smaller. Average hourly earnings of non-
farm workers rose at an annual rate of 5% in
Wage Rates Aren't Pay
the first half of this year, Government figures
Such figures, however, do not give a true
show, down from an increase of 7.2% in the
picture of the trend of labor costs. They show
comparable 1969 period.
only what has been happening to wage rates-
and then only to wage rates of unionized em-
ployes.
While wage-rate increases have been get.
ting bigger, labor-cost increases have been get.
ting smaller. The Government's index of manu-
facturing labor costs per unit of output has
risen only 1% since the start of this year. In
the first nine months of 1009, the index climbed
2.3%, and in the comparable 1908 period the in-
crease amounted to 4.1% In the last three
months, the index has barely budged, rising a
minuscule one-fifth of one percent.
THE WALL STREET JOURNAL, Wednesday, October 14, 1970
Reproduced at the Richard Nixon Presidential Library
Decline in Overtime Work
This decline in hourly pay gains partly re-
flects reduced premium-pay overtime work in
many industries, many analysts say. Another
factor in the pay slowdown, some economists
claim, is the disappearance of many high-skill
jobs in defense industries. "The jobs drying up
in defense tend to be better paying than new
ones that may open up in consumer indus-
tries," says a senior Labor Department econo-
mist.
Ever larger wage-rate increases in collec-
tive bargaining agreements have also obscured
the fact that wage increases of nonunion em-
ployes-more than three-quarters of the job
force-have been getting smaller. In the first
quarter, according to a recent Government
survey, wage rates in nonunion businesses rose
at an annual rate of 5.2%, down from 7.2% in
the previous quarter. The same survey shows
that wage rates in unionized businesses rose at
7.6% annually during the period, up from 7.5%
in the prior quarter.
The Wall Street area provides an extreme
example of what's been happening to the pay
of many nonunion personnel in recent months.
"There have been plenty of pay cuts on Wall
Street," declares John Kret, an employe of the
Please Turn to Page so, Column 1
Continued From Page One
dustries are beginning to settle for smaller pay
New York Stock Exchange who has been trying
boosts. An official of the Staff Officers Associa-
to organize employes in Wall Street-area se-
tion of America, which represents pursers and
curities firms. Mr. Kret notes, for instance,
pharmacist mates on U.S. steamships, reports
that Weis, Voisin, Cannon Inc., a sizable Big
his union settled for a pay increase of only 3%
Board firm slashed salaries 10% in July. Weis-
this year, half as much as in the union's pre-
Voisin's action is by no means unique. Many
vious contract. "We felt the U.S. steamship in-
Wall Street firms-none of them yet union-
dustry couldn't afford to go overboard," the of-
ized-have either reduced pay levels or ruled
ficial explains. "It was a case of hanging onto
out pay increases this year.
our jobs."
At least twice in recent months, union work-
"While union workers are winning big pay
hikes this year," says Sam Nakagama, chief
ers have actually passed up negotiated pay in-
economist of Argus Research Corp., an invest-
creases in order to keep their jobs.
ment advisory firm in the Wall Street area,
About 450 production workers at the Chilli-
cothe, Ohio, factory of Wear-Ever Aluminum
"the rest of the workers are generally getting
much smaller boosts or no increases at all."
Inc., a subsidiary of Aluminum Co. of America,
voted to forgo a third-year wage-and-benefit in-
The securities business isn't the only non-
crease due them. By SO doing, they headed off
union field where pay is being cut. Interpublic,
a move by Alcoa to close down the facility.
a New York-based advertising concern, this
About the same time, some 4,000 employes at a
month slashed salaries of all personnel earning
Naugatuck, Conn., plant of Uniroyal Inc.
more than $20,000 yearly. Those making from
agreed to forgo wage increases for three years.
$20,000 to $25,000 got 10% cuts, those from
In return, Uniroyal promised to keep the fac-
$25,000 to $40,000 got 15% reductions, and
tory running for at least four years. Wage
everyone above $40,000 had pay reduced 20%.
boosts were granted under a master labor con-
There are scattered signs that some mem-
tract between the company and some 18,000
bers of relatively small unions in troubled in-
Uniroyal workers in 19 other plants.
Reproduced at the Richard Nixon Presidential Library
For typing help contact:
Jean Clancy or Carol Segal
Reproduced at the Richard Nixon Presidential Library
The following is the schedule for Sunday, October 18:
11:15
Worship services in East Room of White House
Mr. and Mrs. McCracken
Immediately after services the ladies will go to the
reception; the men will go to the conference dining
room.
12 noon lunch in Conference Dining Room -- for men only (the
wives will be on their own after the reception)
1:15 pm Meeting with the President and the Business Council people
Reproduced at the Richard Nixon Presidential Library
THE WHITE HOUSE
WASHINGTON
October 12, 1970
MEMORANDUM FOR SECRETARY KENNEDY
SECRETARY STANS
DR. BURNS
GEORGE SHULTZ
PAUL McCRACKEN
Herewith a letter from Jack Burke giving the
Business Council's conclusions of last Thursday's meeting
regarding the Business Council meeting on October
17.
It has been agreed that the Administration's
half-hour introduction will be allocated to Paul McCracken
who will set forth the Administration's view on the economy.
The last third of the Administration's time, however, will
be given over to an independent exposition of the Fed's view
by Dr. Burns. It is expected that the two hours of
discussion, the first hour solely among the panelists and
the second hour thrown open to the floor, will be distributed
evenly among all the panelists.
I presume all of you have made the necessary
arrangements for transportation to and from Hot Springs.
If not, and if I can be of help, I would be happy to do so.
Peter JOND Flanigan
Assistant to the
President
Reproduced at the Richard Nixon Presidential Library
FRED J. BORCH
RUSSELL DeYOUNG
Chairman
Vice Chairman
JOHN W. BURKE, JR.
THE BUSINESS COUNCIL
PATRICK E. HAGGERTY
Executive Secretary
Vice Chairman
888 SEVENTEENTH STREET, N.W.
JOHN D. HARPER
Telephone
WASHINGTON, D.C. 20006
Vice Chairman
Area Code 202
BIRNY MASON, JR.
298-7650
Vice Chairman
ACTIVE MEMBERS
J. PAUL AUSTIN
FREDERICK B. DENT
J. K. JAMIESON
OTTO N. MILLER
WILLIAM M. BATTEN
RUSSELL DeYOUNG
EDGAR F. KAISER
HOWARD MORGENS
S. D. BECHTEL, JR.
C. DOUGLAS DILLON
GEORGE E. KECK
ROGER MILLIKEN
EUGENE N. BEESLEY
HENRY FORD "
J. WARD KEENER
W. B. MURPHY
BENJAMIN F. BIAGGINI
HENRY W. GADSDEN
DONALD M. KENDALL
T. F. PATTON
JAMES H. BINGER
A. H. GALLOWAY
JOHN R. KIMBERLY
JAMES M. ROCHE
FRED J. BORCH
EDWIN H. GOTT
JOSEPH L. LANIER
DAVID ROCKEFELLER
HARLLEE BRANCH, JR.
ELISHA GRAY II
RALPH LAZARUS
H. I. ROMNES
WILLIAM S. BREWSTER
R. V. HANSBERGER
BARRY T. LEITHEAD
STUART T. SAUNDERS
DONALD C. BURNHAM
JOHN D. HARPER
L. B. SMITH
EDMUND W. LITTLEFIELD
HOWARD L. CLARK
ELLISON L. HAZARD
CHARLES H. SOMMER, JR.
GEORGE H. LOVE
JOHN T. CONNOR
FRANK STANTON
WILLIAM A. HEWITT
MALCOLM MacNAUGHTON
CHARLES B. THORNTON
C. W. COOK
MILTON P. HIGGINS
S. M. McASHAN, JR.
LYNN A. TOWNSEND
JOHN E. CORETTE
JACK K. HORTON
CHARLES B. McCOY
THOMAS J. WATSON, JR.
BERT S. CROSS
AMORY HOUGHTON, JR.
GORDON M. METCALF
GEORGE H. WEYERHAEUSER
JOHN H. DANIELS
GILBERT W. HUMPHREY
IRWIN MILLER
HENRY S. WINGATE
October 9, 1970
The Honorable Peter M. Flanigan
Assistant to The President
The White House
Washington, D.C. 20500
Dear Peter:
After the meeting yesterday, The Business Council group met for dinner and,
for your planning purposes, here is the way we believe Saturday morning should run.
We will convene at 8:30 and presently are scheduled to have as our first speaker
Mr. Birny Mason, Jr., who normally makes a very short report based on the opinion
of The Business Council's economists as to the overall condition of the economy. This
is a ten-minute item, or less, and we are trying to change this to the Friday program,
if possible.
Following this, the Government speaker, or speakers, would take half-an-hour
for their own presentation and at the conclusion the six Business Council members will
speak for approximately ten minutes each in the following order and on the following
subjects:
1. Roger Milliken will discuss the necessity for realistic government data on
trade balances and he will also comment on the Mills Bill.
2. Ralph Lazarus will discuss productivity and prices in the service industry
and the necessity for the continuation of current fiscal and monetary policies.
PRESERVATION COPY
Reproduced at the Richard Nixon Presidential Library
THE BUSINESS COUNCIL
The Honorable Peter M. Flanigan - 2
October 9th, 1970
3. Ellison L. Hazard will discuss the spillover effect on other industries of
high construction wages and also the inflationary labor costs causing United States
management. to produce overseas in order to compete.
4. Donald C. Burnham will discuss the effect of inflation on the balance of
trade and the need for a massive approach to productivity improvement in the service
industries.
5. S. D. Bechtel, Jr. will discuss the construction industry's inflationary
labor cost crisis.
6. James M. Roche will discuss the necessity for the Administration to take
a public position in controlling inflation and achieving a better balance between wages
and productivity.
While these subjects do seem somewhat overlapping, it is felt that this will be no prob-
lem as it will be minor.
At the conclusion of their remarks, there will be a mid-morning coffee break
and upon reconvening the panel members will discuss the earlier remarks among
themselves for approximately an hour. As this portion is concluded, the entire sub-
ject will be open to questions and answers from the floor. This will leave about an
hour for this part of the program and we would hope to conclude around 12:30 p.m.
but will have to play the duration of the meeting by ear.
It was also agreed that Paul McCracken and Don Burnham would be the two
panel attendees at the press conference which is held immediately following the morning
session. This will eliminate the necessity for the other government and Business
Council members having to be present.
I am enclosing five copies of this which might be useful for your own internal
purposes.
I look forward to seeing you and your wife at Hot Springs.
Sincerely,
John Job W. Burke, Jr.
Executive Secretary
PRESERVATION COPY
Reproduced at the Richard Nixon Presidential Library
Mtg. Folder
September 30, 1970
Dear Jack:
This is in response to your letter of September 24
in regard to the change in plans for those October meetings.
Since I had participated in those San Clemente discussions
I was not surprised in this change in the game plan.
As for transportation, I am still hopeful that we can
drive. If there is any change in those plans I shall let
you know immediately.
Regards,
Paul W. McCracken
Mr. John W. Burke, Jr.
Executive Secretary
The Business Council
888 Seventeenth Street, N. W.
Washington, D. C. 20006
filed: Mtg. Folder
Reproduced at the Richard Nixon Presidential Library
FRED J. BORCH
RUSSELL DeYOUNG
Chairman
Vice Chairman
JOHN W. BURKE, JR.
THE BUSINESS COUNCIL
PATRICK E. HAGGERTY
Executive Secretary
Vice Chairman
888 SEVENTEENTH STREET, N.W.
JOHN D. HARPER
Telephone
WASHINGTON, D.C. 20006
Vice Chairman
Area Code 202
BIRNY MASON, JR.
298-7650
Vice Chairman
ACTIVE MEMBERS
J. PAUL AUSTIN
FREDERICK B. DENT
J. K. JAMIESON
OTTO N. MILLER
WILLIAM M. BATTEN
RUSSELL DeYOUNG
EDGAR F. KAISER
HOWARD MORGENS
S. D. BECHTEL, JR.
C. DOUGLAS DILLON
GEORGE E. KECK
ROGER MILLIKEN
EUGENE N. BEESLEY
HENRY FORD II
J. WARD KEENER
W. B. MURPHY
BENJAMIN F. BIAGGINI
HENRY W. GADSDEN
DONALD M. KENDALL
T. F. PATTON
JAMES H. BINGER
A. H. GALLOWAY
JOHN R. KIMBERLY
JAMES M. ROCHE
FRED J. BORCH
EDWIN H. GOTT
JOSEPH L. LANIER
DAVID ROCKEFELLER
HARLLEE BRANCH, JR.
ELISHA GRAY =
RALPH LAZARUS
H. I. ROMNES
WILLIAM S. BREWSTER
R. V. HANSBERGER
STUART T. SAUNDERS
BARRY T. LEITHEAD
DONALD C. BURNHAM
L. B. SMITH
JOHN D. HARPER
EDMUND W. LITTLEFIELD
HOWARD L. CLARK
CHARLES H. SOMMER, JR.
ELLISON L. HAZARD
GEORGE H. LOVE
FRANK STANTON
JOHN T. CONNOR
WILLIAM A. HEWITT
MALCOLM MacNAUGHTON
CHARLES B. THORNTON
C. W. COOK
MILTON P. HIGGINS
S. M. McASHAN, JR.
LYNN A. TOWNSEND
JOHN E. CORETTE
JACK K. HORTON
CHARLES B. McCOY
THOMAS J. WATSON, JR.
BERT S. CROSS
AMORY HOUGHTON, JR.
GORDON M. METCALF
GEORGE H. WEYERHAEUSER
JOHN H. DANIELS
GILBERT W. HUMPHREY
IRWIN MILLER
HENRY S. WINGATE
September 24, 1970
The Honorable Paul W. McCracken, Chairman
Council of Economic Advisers
Executive Office Building, Room 312
Washington, D. C. 20506
Dear Paul:
You were nice enough to agree to speak on our Friday morning program
on October 16th at Hot Springs, but we now find that we are making some shifts
in the schedule in order to devote one morning to the Economic Seminar requested
by the White House.
As you will recall, from the discussions at San Clemente, the President
wishes to have Business Council thinking in specific areas and our White House
Liaison Committee will be meeting with him on Sunday, October 18th, to report
on the results of our deliberations at Hot Springs. It was suggested that a seminar
on the economy be held at Hot Springs on Saturday morning, October 17th, and we
have been advised that Secretary Kennedy, Secretary Stans, Mr. Shultz, Dr. Burns
and yourself will be the Government participants. We will have the following Council
members to give reports in the industries as listed:
Donald C. Burnham
Electrical Mfg.
Ralph Lazarus
Retail
James M. Roche
Automotive
Roger Milliken
Textiles
S. D. Bechtel, Jr.
Construction
Ellison L. Hazard
Containers
Reproduced at the Richard Nixon Presidential Library
THE BUSINESS COUNCIL
September 24, 1970
The Honorable Paul W. McCracken
Page 2
It is my understanding that the Government representatives will not have
to prepare any speeches and that this seminar will be more of a round-table
discussion. We do plan to hear first from our Government guests, then follow
this with the Council members, and then devote the balance of the morning to
questions from the floor.
From all of this, then, you will see that we will not ask you to make any
separate remarks on the Friday morning program and I hope you have not already
spent time and effort in this direction.
We understand that there will be a preliminary meeting of all seminar parti-
cipants at 4:30 p.m. in the Roosevelt Room of the White House on October 8th, and
that we will be receiving from you some work papers which are to be distributed
to our members in ample time for their study prior to this meeting. I realize that
you are now in Europe, but if we could receive these papers at the very earliest
moment after your return, we will send them out special delivery to our men.
Although I realize that you will have only just returned from Europe, I plan on
calling you on Monday morning about this.
We will, of course, keep in close touch with you as things progress. Meantime,
perhaps your secretary could call and let me know how and when you and Mrs.
McCracken wish to go down to Hot Springs. We will, as usual, have airplanes flying
out on Thursday afternoon, October 15th, and I would suggest that you both go down
on one of these so as to arrive in plenty of time for the evening reception, and also
to insure that you are there for your 7:30 a. m. breakfast meeting on Friday, October
16th.
Just pick up the phone and call me if there are any questions.
Sincerely,
John Jar Burke, Jr.
Executive Secretary
Reproduced at the Richard Nixon Presidential Library
August 14, 1970
Dear Jack:
Thank you for your good letter of August 12 outlining
plans for the October meeting. Friday, October 16 is
free on my calendar, and I shall be glad to prepare some-
thing for the meeting.
Incidentally, I would also like very much to arrange
a breakfast meeting of our Liaison Committee. Do I
arrange this or is that taken care of through your office?
Regards,
Paul W. McCracken
Mr. John W. Burke, Jr.
Executive Secretary
The Business Council
888 Seventeenth Street, NW
Washington, D.C. 20006
Meeting Folder
Reproduced at the Richard Nixon Presidential Library
1
FRED J. BORCH
RUSSELL BeYOUNG
Chairman
Vice Chairman
JOHN W. BURKE, JR.
THE BUSINESS COUNCIL
PATRICK E. HAGGERTY
Executive Secretary
Vice Chairman
888 SEVENTEENTH STREET, N.W.
JOHN D. HARPER
WASHINGTON, D.C. 20006
Vice Chairman
Telephone
Area Code 202
BIRNY MASON, JR.
298-7650
Vice Chairman
ACTIVE MEMBERS
J. PAUL AUSTIN
FREDERICK B. DENT
J. K. JAMIESON
oTTo N. MILLER
WILLIAM M. BATTEN
RUSSELL DeYOUNG
EDGAR F. KAISER
HOWARD MORGENS
S. D. BECHTEL, JR.
C. DOUGLAS DILLON
GEORGE E. KECK
ROGER MILLIKEN
EUGENE N. BEESLEY
HENRY FORD II
J. WARD KEENER
W. B. MURPHY
BENJAMIN F. BIAGGINI
HENRY W. GADSDEN
DONALD M. KENDALL
T. F. PATTON
JAMES H. BINGER
A. H. GALLOWAY
JOHN R. KIMBERLY
JAMES M. ROCHE
FRED J. BORCH
EDWIN H. GOTT
JOSEPH L. LANIER
DAVID ROCKEFELLER
HARLLEE BRANCH, JR.
ELISHA GRAY II
RALPH LAZARUS
H. I. ROMNES
WILLIAM S. BREWSTER
STUART T. SAUNDERS
R. V. HANSBERGER
BARRY T. LEITHEAD
L. B. SMITH
DONALD C. BURNHAM
JOHN D. HARPER
EDMUND W. LITTLEFIELD
CHARLES H. SOMMER, JR.
HOWARD L. CLARK
ELLISON L. HAZARD
GEORGE H. LOVE
FRANK STANTON
JOHN T. CONNOR
WILLIAM A. HEWITT
MALCOLM MacNAUGHTON
CHARLES B. THORNTON
C. W. COOK
MILTON P. HIGGINS
S. M. McASHAN, JR.
LYNN A. TOWNSEND
JOHN E. CORETTE
JACK K. HORTON
CHARLES B. McCOY
THOMAS J. WATSON, JR.
BERT S. CROSS
AMORY HOUGHTON, JR.
GORDON M. METCALF
GEORGE H. WEYERHAEUSER
JOHN H. DANIELS
GILBERT W. HUMPHREY
IRWIN MILLER
HENRY S. WINGATE
August 12, 1970
The Honorable Paul W. McCracken, Chairman
Council of Economic Advisers
Executive Office Building, Room 312
Washington, D. C. 20506
Dear Paul:
It seems hard to believe that The Business Council is looking forward to its
meeting at Hot Springs October 15th to 18th and we are all so hopeful that you and
your nice wife will once again be our guests over this weekend.
We are all hoping that you would be willing to take 20 minutes or so on the
program of Friday morning, October 16th, to bring us up to date as to where we are
and where we are going. By this time, the results of the third quarter will have
begun to drift in and we may have a better look at the "bottoming out" process. I am
not giving your remarks any title and, if you can be with us, whatever title you might
want to use would look fine on our program. Please let me know at your convenience
whether or not you are free so that we can start to make the necessary arrangements
to button up our program.
Kindest personal regards,
Sincerely,
John W. Burke, Jr.
Executive Secretary
Reproduced at the Richard Nixon Presidential Library