—pretty good. Are we organized and doing everything we can to get your . . . interest thing, your homebuilder thing going up there [unclear]?[note 6] For more on this bill, see “Bill Sets 4.5% Ceiling on Bank Interest Rate,” Washington Post, 26 July 1966.

Yes, sir, I just talked to Senator [A. Willis] Robertson [D–Virginia], sent him a letter up this morning.[note 7] A. Willis Robertson was a U.S. representative [D–Virginia] from March 1933 to November 1946, and a U.S. senator [D–Virginia] from November 1946 to December 1966. And he’s convening his committee to, I think, work on it in executive session. And we’re all solidly organized with him.

Should we be talking to those senators and tell them that we’ve been piddling this damn thing now for two months, and the world’s on fire?

I think that this—[Joseph W.] Joe [Barr] is sitting here with me now.[note 8] Joseph W. “Joe” Barr was a U.S. representative [D–Indiana] from January 1959 to January 1961; U.S. under secretary of the treasury from 1965 to 1968; and U.S. secretary of the treasury from December 1968 to January 1969. We were just talking about this, if the senators on this committee are pretty well covered on this interest. Joe tells me they are pretty well covered.

[speaking over Fowler] Tell them if they’re not, then just—

We don’t anticipate any difficulty.

When are they going to have the—when are they going to try to report it?

[speaking aside to Barr] When are they going to try to report it?

[speaking in the background] The regulation bill, or the interest bill?

No, interest bill.

The regulation bill [unclear] tomorrow. [Unclear.]

[speaking to President Johnson] Tomorrow, they consider the interest bill. We would hope that they would get a—they would report it without—without too much of a hearing. They haven’t asked us to appear yet, and as, therefore, there is some possibility, I would hope, of getting it through without extensive hearings.

Wonder if you take that list of the committee and go down and call those senators yourself or let me call them—

No, I’ll—

—because I’m getting worried about this, and—

We’ll call them.

We started out with five, and then we—they moved it down to four and a half in the House, and then we agreed that we wouldn’t have any now. Isn’t that the way you want it, just leave it up to the Federal Reserve [Fowler acknowledges], who’s agreed to do it at five?

That’s right.

And I think we ought to try to get that thing through. They’re hammering us, and it’s hurting me. It’s hurting me out in the country. [Fowler acknowledges.] And I think if we could, we ought to do it. I’m willing to call every one of them, have them come down, go to see them, do any damn thing I need to just so we get a vote on it quick.

Well, suppose we see them all individually [President Johnson interrupts and begins speaking over Fowler] and then give you a report to tell you what the problem is?

[speaking over Fowler] They tell me [Howard W.] Judge Smith [D–Virginia] said . . . Has [John W.] McCormack [D–Massachusetts] made a real plea with Judge Smith on this?[note 9] Howard W. “Judge” Smith was a U.S. representative [D–Virginia] from March 1931 to January 1967, and chair of the House Rules Committee from January 1955 to January 1967. John W. McCormack was a U.S. representative [D–Massachusetts] from January 1928 to January 1971, and Speaker of the House of Representatives from January 1961 to January 1971.

Joe was up with McCormack yesterday for an hour. I think about an hour.

[speaking over Fowler] Yeah, I know, but what did McCormack do?

[aside, to Barr] What did McCormack do yesterday with Smith? [to President Johnson] Joe is on his way to go talk to the Judge today. McCormack said for him to do it, and that’s where she stands.

All right, tell him afterwards to go see McCormack, and then maybe he and McCormack call me and let me—and report to me what he does, what Smith says so I can talk to McCormack. I think we ought to blast this thing and move it. And they’ve got stuff stacked up there behind the ears. They got 36 measures that they’re not moving, and we’re just talking. We’re kind of like a car going uphill and spinning the wheels. We’re not moving. And then [J. W. Wright] Patman [D–Texas] reported his out with that four and a half thing, and I think it just caused another fight in a typical Patman operation.[note 10] J. W. Wright Patman was a U.S. representative [D–Texas] from March 1929 to March 1976, and chair of the House Banking and Currency Committee from January 1965 to January 1975. But I’m afraid if we don’t get some measure that . . . of some kind, that they’re really going to break loose on us pretty bad.

Now, do you think we ought to be having a troika meeting? Maybe y’all, you ought to be meeting with any of your Federal Reserve people and getting their views, and [John W.] Gardner’s, and any about what we do, whether we take a new look at our taxes and our controls, and things of that kind?[note 11] John W. Gardner was secretary of health, education and welfare from August 1965 to March 1968, and founder of Common Cause in August 1970. Is there something we ought to be doing there in your judgment?

Well, I think that—

I’ve been kind of waiting for you to get back from The Hague, [Fowler acknowledges] and I think that—

Well, [William McChesney] Bill Martin [Jr.], you know, has been in the hospital.[note 12] William McChesney “Bill” Martin Jr. was chair of the Board of Governors of the Federal Reserve System from April 1951 to January 1970. [President Johnson acknowledges.] He’s home now. I talked to Robertson yesterday. He was over here for about an hour or two with me. Uh . . . Of course, the play, as I indicated to you the other day on the phone, that we want to set up, it seems to me, is when you’ve got—when the supplemental is ready, is to go with that and go with a simple tax proposal and try to get the Fed to indicate that when the bill is enacted, they’re going to take a new look at monetary policy. Not any substantial change, but to moderate it . . . moderate its restrictiveness just somewhat.

Now, when what’s enacted?

When and if we go for a tax bill, Mr. President.

Yeah, all right, all right.

In other words, it’s a combination play.

[speaking over Fowler] Well, now, do you think we ought to . . do you think maybe you ought to quietly bring Wilbur [D. Mills] [D–Arkansas] down tonight or tomorrow night or some night when I’m free and let him . . . let us talk to him about some of these tax things?[note 13] Wilbur D. Mills was a U.S. representative [D–Arkansas] from January 1939 to January 1977, and chair of the House Ways and Means Committee from January 1958 to January 1975.

I think that, very much, it’s very important for you to have a talk with him, and with really nobody else around, except possibly me. But it might be even well if you could do it—

[speaking over Fowler] What would you think about just he and [Richard B. “Dick”] Russell [Jr.] [D–Georgia]?[note 14] Richard B. “Dick” Russell Jr. was a U.S. senator [D–Georgia] from January 1933 to January 1971; chair of the Senate Armed Services Committee from January 1951 to January 1953 and January 1955 to January 1969; and chair of the Senate Appropriations Committee from January 1969 to January 1971.

Well, I think you ought to see Wilbur alone on this. He likes that kind of treatment from you, and he doesn’t—he’s—when you got people around, Wilbur clams up, as you know. And I think that he’s back now from his primary. He won 5–1. He’s spent all day yesterday getting his calendar ready for the committee for the rest of the session. And the only noises he made [President Johnson snorts] was about reducing expenditures.

All right, now, we’ve got some kind of bill they had in here last night for me to check out that I think’s good. I told Joe. But I want y’all to be sure you get a good case and get it ready to roll and don’t get anything else hung on to it . . . on veterans that are out there fighting, these guys that are dying in Vietnam. Something about exempting some of their taxes somewhere or other. And y’all take a good look at it right quick, and let me know what you want to do about it. That’s number one.

And number two, I think you ought to try to get Wilbur to come by—talk to [W.] Marvin [Watson]—and probably, I’d say tomorrow night.[note 15] W. Marvin Watson was White House appointments secretary from February 1965 to April 1968, and U.S. postmaster general from April 1968 to January 1969.

All right.

I got a dinner tonight, and maybe [Fowler acknowledges]—or the next night, that I’d have him come by at, say, 6:30.

All right.

Ask him what time he goes home [Fowler acknowledges throughout] and tell him this is a good time to visit with me, relax, friendly like. And just the three of us. I think we might want to take the position that we ought to seriously take a look whether we ought to have a tax bill or not this session. I think he’ll be—buck his heels and point out why. But we’ll have that insurance that he’s against it. But we ought to explore that pretty fully.

Second thing we ought to explore, I don’t know what we’ll do about it, but you see what all these boys are demanding that we pull out the investment credit, at least now, so we don’t encourage planned expenditures next year and just make it inoperative till Vietnam’s over, by itself. You can throw that out for both of us to discuss without taking any decision. I’m sure I know what the answer will be, but I’d like to explore it in light of what they’re all hitting us at. That’s going to be the new gag, like a pause it looks like [Fowler acknowledges], that they’ll shove in there.

We might—I just don’t know how in the hell we’re going to hold this with these contracts. Labor is just going out of its mind, and that Joe Burns is going to get a big increase for the AT&T [workers].[note 16] “Joe Burns” is unidentified. And then General Electric’s coming along. And then all the big contracts, oil, chemical, rubber, autos, everything next year. So it—I just don’t know how we’re going to handle it, and I think that some pretty drastic steps are called for.

Now, when we go the economy route, first, there ain’t much you can say. There’s not much you can hold back, even where they’re considering their 3 to 6 billion[-dollar] increases. What I’m more concerned about than anything else now is that [Robert F.] Bobby Kennedy [D–New York], Martin Luther King [Jr.], that [Joseph W.] Joe Alsop, all the papers, New York Times—they’re getting on a hundred-billion-dollar jag for the cities.[note 17] Robert F. “Bobby” Kennedy was U.S. attorney general from January 1961 to September 1964, and a U.S. senator [D–New York] from January 1965 until his assassination in June 1968. Reverend Dr. Martin Luther King Jr. was a leader in the civil rights movement; pastor of the Dexter Avenue Baptist Church in Montgomery, Alabama, from 1954 to 1960; organizer of the Southern Christian Leadership Conference (SCLC) in 1957; co-pastor (with his father) of the Ebenezer Baptist Church in Atlanta, Georgia, from 1960 to 1968; and recipient of the Nobel Peace Prize in 1964. Joseph W. “Joe” Alsop was a prominent Washington journalist and syndicated columnist, and the brother of Stewart J. O. Alsop. In this passage, President Johnson referred to a still loosely organized set of policy ideas around the so-called Freedom Budget that had been developed in 1965 by civil rights leaders A. Philip Randolph and Bayard Rustin. Randolph had presented the Freedom Budget concept during his keynote address at a November 1965 White House Conference on Civil Rights (technically, a planning meeting for a full-scale conference in the spring of 1966), calling for a $100-billion program to eliminate ghettos throughout the urban United States. With the assistance of economist Leon Keyserling and other leading scholars (including Michael Harrington, whose 1961 book The Other America had at least indirectly helped inspire the War on Poverty), Rustin and Randolph would publish a more detailed, $185-billion plan in October 1966 under the title A Freedom Budget for All Americans. The completed version called for extensive public works projects, education programs, full employment budgeting, a guaranteed annual minimum income, and an increase in the minimum wage, among other proposals. Although Kennedy and King would endorse this version of the Freedom Budget, neither had yet done so publically in August of 1966. Johnson, however, appears to have merged the Freedom Budget dollar figure, at least, into his ideas about the goals that his liberal opponents had expressed for increased spending on poverty and urban problems. See also Conversation WH6608-09-10602-10603 for more examples of this theme. “Randolph Says: ‘Freedom Budget’ May End Poverty,” Chicago Defender, 5 November 1966; John D’Emilio, Lost Prophet: The Life and Times of Bayard Rustin (Chicago: University of Chicago Press, 2003), 423–24, 370–79; Thomas J. Sugrue, Sweet Land of Liberty: The Forgotten Struggle for Civil Rights in the North (New York: Random House, 2008), 375–77. For Johnson’s frustration with the failure of Martin Luther King and other civil rights leaders to support his legislative initiatives, including the Demonstration Cities bill, see Allan L. Otten, “Politics and People: Power to Burn,” Wall Street Journal, 21 July 1966. In early July, prominent Washington Post columnist Joseph Alsop had written a glowing profile of Robert F. Kennedy that noted how his popularity far surpassed Johnson’s in recent polls, and even suggested that many Democrats would prefer to see Kennedy in the White House. The column concluded that “we are pretty lucky to have Kennedy around.” Two weeks later, in a column that warned racial conflicts and violence in the urban North posed what “could easily prove the worst internal crisis this country has experienced since the Civil War,” Alsop again praised Kennedy, noting that “hardly any white leader, national or local, has been ringing the alarm bell in recent months except for Sen. Robert Kennedy.” Alsop concluded that “the liberal politicians have in the main been silent.” Alsop made no mention, though, of spending on the cities. Joseph Alsop, “Bobby!,” Matter of Fact, Washington Post, 1 July 1966; Joseph Alsop, “Since the Civil War,” Matter of Fact Washington Post, 20 July 1966.

Yeah.

And I’ve got a 2-billion-dollar bill that they won’t pass, but they want a hundred billion.[note 18] President Johnson referred here to his administration’s Demonstration Cities and Metropolitan Development Act of 1966, which had been stuck in the Senate Banking and Commerce Committee since April. The administration had proposed funding of $12 billion for the first year of local-level planning for the program, followed by $2.3 billion in funding for demonstration grants to selected cities over a six-year period. The House Banking and Currency Committee had reported the bill on 15 July, largely on the parameters proposed by the legislation. Senator Kennedy had not yet made a formal legislative proposal, although in a May speech to the NAACP Legal Defense Fund, he had called for a new program that would rely on private development corporations to redevelop inner city areas. This would become a major focus of Kennedy’s work over the following year. Congressional Quarterly Almanac, 1966, vol. 22, pp. 211, 217–18, 226, 1230; “Kennedy Offers Plan on Ghettos; Seeks Private Corporation to Rebuild Urban Areas,” New York Times, 19 May 1966. And that’s 10 billion [dollars] a year for ten years.[note 19] In addition to the Freedom Budget, OEO’s Office of Plans, Progress, and Evaluations had also proposed a $100-billion jobs, service, and negative income tax program in the summer of 1965. Thomas F. Jackson, From Civil Rights to Human Rights: Martin Luther King Jr. and the Struggle for Economic Justice (Philadelphia: University of Pennsylvania Press, 2007), 249. Now, if we got anything like that, we’d really be ruined. And I think that’s what they’re going to do with these riots. And I think they’re going to have enough riots going on. I think, just between us, that Bobby’s busy riding the labor people and riding the Negros so that he can provide the solution. [Snorts.] And that’s going on pretty good, so we may have to talk to our financial people and our business people, and see what they think they would join, recommend, and you better think about yourself, and we ought talk to Wilbur in a couple days, and we ought to talk to Russell, and we ought to talk to [Everett M.] Dirksen [R–Illinois] and McCormack, and have—every day I ought to be talking to some of them, so we can see where we’re going to put this ball, if at all, this session.[note 20] Everett M. Dirksen was a U.S. senator [R–Illinois] from January 1951 until his death in September 1969, and Senate Minority Leader from January 1959 to September 1969. If not, what we’re going to take this session, and what our play is going to be. But I would . . .

One of the first things I think we ought to set up is you and [Robert S. “Bob”] McNamara and Gardner and somebody from the Federal Reserve, and some of these other places, maybe [Nicholas] Nick [Katzenbach], you ought to kind of get you a good agenda worked out and meet with them and see what we do about how to hold these prices in labor.[note 21] Robert S. “Bob” McNamara was president of Ford Motor Company from November 1960 to January 1961; U.S. secretary of defense from January 1961 to February 1968; and president of the World Bank from April 1968 to July 1981. Nicholas “Nick” Katzenbach was assistant U.S. attorney general from 1961 to 1962; deputy U.S. attorney general from April 1962 to January 1965; acting U.S. attorney general from September 1964 to January 1965; U.S. attorney general from February 1965 to October 1966; and U.S. under secretary of state from October 1966 to January 1969. We ought to have something set up. Maybe we got to get a sense of Congress’s resolution like [Henry Hall] Wilson [Jr.] to hold prices and labor.[note 22] Henry Hall Wilson Jr. was a congressional liaison and White House aide from 1961 to 1967. Maybe we ought to ask for controls. I don’t know. I just know this: we haven’t got the weapons, we haven’t got the tools, and it looks to me like it’s really getting away from us.

Well, it’s, this . . . events over the last 24, 48 hours are certainly very serious, and I think this is the most important problem we have.[note 23] Fowler probably referred to a decision by the Inland Steel Company to raise prices, and to the International Association of Machinists’s decision to reject a contract settlement with the airline industry that the Johnson administration had helped negotiate. Robert A. Wright, “Inland Steel Co. Increases Prices 2.1% on 3 Lines,” New York Times, 3 August 1966. I think the tax and business is the second most important problem, coupled with your—with the supplemental. Now, the only shading of feeling I’m beginning to get about [President Johnson interjects] the tax thing is this—

[speaking over Fowler] What is the supplemental you’re talking about? What is this supplemental—

Well, the defense supplemental.

Oh, yeah. Whether we have one or not?

Yeah.

Yeah, all right.

And I think you’ve got to couple the tax thing with that. That’s what Wilbur will say, if you want to do it this session. [A television begins playing in the background.] And the other thing I’ve been thinking about, I don’t know whether you get this reaction or not, but seems to me with the way these big corporate profits are going, that we could afford to recommend a more substantial tax increase added on to the corporate income tax than we could the individual income tax.

All right, do that, do that.

In other words, we might put 7 percent on the individual and 12 percent on the corporation.

You just do that, and let’s talk about it.

All right, sir. I’ll have Wilbur over there tomorrow night at 6:30.

And get Joe to give me a rundown on senators [Fowler acknowledges] and the Rules Committee and keep me right up to date every night on this bill till we get it moved.

Right, sir, will do.