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^eeNFftBEWTiAIr'
THE CHAIRMAN OF JHE
COUNCIL OF ECONOMIC ADVISERS
WASHI NGT ON

June 14, 1971
MEMORANDUM FOR THE PRESIDENT
Subject: Quadriad Meeting - Monday, June 14, 1971
We have now reached a critical juncture in economic
policy. The economy is expanding, but the pace of the
.
expansion is sluggish. If the unemployment which has
risen slightly each month,from 5.8 percent in February,
to 6.2 percent in May, does not soon start to decline,
we shall need to consider even further measures to
encourage expansion. Indeed, you indicated a mid-year
review along these lines in your early-May press conference.
At the same time price developments have disturbing
aspects, and more expansionist policies will arouse further
fears about inflation. Raw materials prices have been
rising more rapidly, and some things recently helpful to the
CPI are temporary.
A more overt program to moderate the wage-price
problem would give us more elbow-room to pursue expansion
without tripping off fears of yet more inflation. The
elements of such a program might be as follows:
A. Request legislation that would make unlawful
the abuse or attempted abuse of economic power in InterĀ­
state Commerce. Abuse of economic power would mean price
or wage increases excessive in relation to market conditions.
(A proposal has been prepared by CEA and Justice.
) Even
if the Congress stalled, the Administration would have the
advantage of taking the initiative.
B. The Cabinet Committee on Economic Policy could be
directed to cover the wage-price base immediately working
with businesses and unions on wage and price decisions.
While review boards have had an undistinguished record
internationally, here in construction the record thus far
is better than had been expected.
C. With no joy, I have concluded that we must even
be prepared at a suitable time to invoke wage and price
controls.
DECLASSIFIED

By_j2kĀ£________ D a t e j j a i i i


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102