The President's News Conference

THE PRESIDENT. I have several announcements to make.

[1.] The United States has today tabled at Geneva an outline of basic provisions of a treaty on general and complete disarmament in a peaceful world. It provides a blueprint of our position on general and complete disarmament as well as elaboration of the nature, sequence, and timing of specific disarmament measures. This outline of a treaty represents the most comprehensive and specific series of proposals the United States or any other country has ever made on disarmament. In addition to stating the objectives and principles which should govern agreements for disarmament, the document calls for the grouping of individual measures in three balanced and safeguarded stages. We are hopeful through the give and take of the conference table this plan will have a constructive influence upon the negotiations now in progress. I want to stress that with this plan the United States is making a major effort to achieve a breakthrough on disarmament negotiations. We believe that the nations represented at Geneva have a heavy responsibility to lay the foundations for a genuinely secure and peaceful world starting through a reduction in arms.

[2.] Secondly, I believe it would be appropriate to say a few words to follow up last week's events concerning steel prices.

First, let me make it clear that this administration harbors no ill will against any individual, any industry, corporation, or segment of the American economy. Our goals of economic growth and price stability are dependent upon the success of both corporations, business, and labor and there can be no room on either side in this country at this time for any feelings of hostility or vindictiveness.

When a mistake has been retracted and the public interest preserved, nothing is to be gained from further public recriminations.

Secondly, while our chief concern last week was to prevent an inflationary spiral, we were not then and are not now unmindful of the steel industry's needs for profits, modernization, and investment capital. I believe, in fact, that this administration and the leaders of steel and other American industries are in basic agreement on far more objectives than we are in disagreement.

We agree on the necessity of increased investment in modern plant and equipment. We agree on the necessity of improving our industry's ability to compete with the products of other nations. We agree on the necessity of achieving an economic recovery and growth that will make the fullest possible use of idle capacity. We agree on the necessity of preventing an inflationary spiral that will lead to harmful restrictions on credit and consumption. And we agree on the necessity of preserving the Nation's confidence in free, private, collective bargaining and price decisions, holding the role of Government to the minimum level needed to protect the public interest.

In the pursuit of these objectives, we have fostered a responsible wage policy aimed at holding increases within the confines of productivity gains. We have encouraged monetary policies aimed at making borrowed capital available at reasonable cost; preparing a new transportation policy aimed at providing increased freedom of competition at lower costs; proposed a new trade expansion bill to gain for our industries increased access to foreign markets; proposed an 8 percent income tax credit to reward investment in new equipment and machinery; and proceeded to modernize administratively Treasury Department's guidelines on the depreciable lives of capital assets; and, finally, taken a host of other legislative and administrative actions to foster the kind of economic recovery which would improve both profits and incentives to invest.

I believe that the anticipated profits this year for industry in general--and steel in particular--indicate that these policies are meeting with some measure of success. And it is a fact that the last quarter of last year, and I think the first quarter of this year, will be the highest 'profits in the history of this country, and the highest number of people working, and the highest productivity. So that while there are serious economic problems facing us, nevertheless I believe that progress is being made and can be made and must be made in the future.

[3.] Third, the vast majority, as I stated, of our reservists have responded to the call of service in accordance with our best traditions. Unfortunately, the widespread publicity given to the complaints of a-small minority have subjected many of these men to unaccustomed pressures. Upon learning that a private first class faced a court-martial for writing a letter critical of my actions, I contacted the Secretary of the Army who has the difficult task of maintaining proper discipline, and he agreed with me that such offenses are more misguided than criminal in intent. Therefore, I have asked the Army to cancel the trial of Pfc. Larry D. Chidester at fort Lewis, Wash., and in the same spirit of the Easter Week I have directed the Army to remit the balance of the sentence of Pfc. Bernis G. Owen, at fort Polk, La.

[4.] Next, we are releasing today the reports submitted by the Presidential Commission on Campaign Costs.¹ I want to express my 'profound gratitude to this group made up of very experienced men representing those who've been active as students and as participants in the political process, fund-raisers, in both parties, who've come forward with a unanimous report which is now being examined by the administration, and will be the basis of legislative recommendations sent to the Congress which I think can provide a significant advancement of the public interest in this very vital field.

¹ "Financing Presidential Campaigns, Report of the President's Commission on Campaign Costs," dated April 1962 (Government Printing Office, 1962, 36 pp.).

[5.] And lastly, I am happy to announce that Mrs. Eisenhower has agreed to serve as honorary cochairman, with Mrs. Kennedy, of the National Cultural Center. The National Cultural Center, begun in the administration of President Eisenhower, is the most significant cultural undertaking in the history of Washington and is of enormous importance to the cultural life of our Nation as a whole.

I am gratified that Mrs. Eisenhower will be part of this undertaking which we hope to bring to success in the coming months.

[6.] Q. Mr. President, how does the change in the situation between last week and this affect the grand jury investigation in New York? There have been reports it will be soft-pedaled. Are these true or are the potential monopoly aspects still such as to warrant pressing the investigation?

THE PRESIDENT. Well, the grand jury has been called in order to investigate a possible violation of the law and this is a matter now before the grand jury. And of course in accordance with the procedures provided this matter will be brought to a--continue to see if such a violation occurred.

[7.] Q. Mr. President, does there remain any considerable doubt on your part as to the necessity for resuming atmospheric testing shortly, and if and when you do resume testing, do you intend to announce it in advance?

THE PRESIDENT. Well, I think the situation is the same as it was on March 2. The United States desires to achieve a responsible agreement to prevent future tests, providing for an effective inspection system. We stand ready now to conclude that test.

The response we received and that Prime Minister Macmillan received to his letter last week, would indicate that the chances of securing that agreement now for an effective inspection have--seem to be very negative; and if we do not get that agreement, then of course we shall proceed, as I stated on March 2.

In regard to any announcements to be made, they will be appropriately made at the time.

[8.] Q. Mr. President, there are reports that some of your top military advisers are urging the United States to help France with the development of its nuclear striking force. Have you given this problem any consideration, and what do you think about it, sir?

THE PRESIDENT. Well, I think that the policy of the United States, of course, continues to be that of being very reluctant to see the proliferation of nuclear weapons. We are attempting to, in our disarmament offers that we've made we are attempting, and in my speech last September before the United Nations I said that I thought it would be regrettable if nuclear weapons proliferated, or spread. So that our policy continues on that basis, and will continue unless we feel that security requirements suggest a change.

[9-] Q. Mr. President, there has been considerable speculation that the victory you have won in the steel situation will be of great assistance for the passage of your legislative program in Congress. Would you care to comment on that, sir?

THE PRESIDENT. Well, I hope it's of assistance in passing the tax credit, which is intended to provide, combined with price stability, a means for our industry to modernize itself, and in fact to encourage it. I'm hopeful--in my opinion if the rise in prices had been permitted to stand, it would be extremely difficult to secure the passage of this legislation. I think that the line that has been held provides a much better atmosphere, and I think that if this legislation is passed it will materially help the steel companies and industry in general. And I'm very strongly in support of it.

As far as the rest of the program, I think that that part of the program which is involved with the economy, I think will be helped by the fact that we've been able to maintain at this time a stable price level.

[10.] Q. Mr. President, you said several weeks ago that you would take another look to see if you should request a supplemental appropriation this year to revive the Federal flood Insurance Act of 1956. Have you reached any decision on that?

THE PRESIDENT. There is a meeting, as you know, of some of the Governors who were involved. It either has been in the last few hours or is today, and they're meeting with some of our Government officials. This is one of the matters being considered by the Governors and by the Federal Government.

[11.] Q. Mr. President, Mr. Rockefeller told me last night that he thought it was terrible that service wives, of which his daughter Mary is one, cannot join their service husbands abroad. So now we have not only gold and lonely hearts but also politics injected into this situation. And I'm wondering if now that steel prices aren't going up, the ban on service couples getting together might be lifted. It's been more than 7 months.

THE PRESIDENT. Yes, I understand, and I think I attempted in the last press conference to respond to the question. I stated we have a very serious problem involved in gold, that as I said last time, we're asking the Secretary of Defense to reduce our overseas expenditures by a billion dollars, and the responsibility fails very heavily upon him and upon all of us. We do not desire-obviously, it's against our national social interest to separate these families and we have done it to the extent that we have done it only because of a very serious crisis. Now, we-that crisis--at least that situation in regard to gold continues and Secretary McNamara is continuing to analyze the best way to provide for the saving of a billion dollars.

Q. Yes, I realize that, and I know that the gold situation is very serious, and I am wondering if you directed Secretary Dillon to look into the serious situation of American companies setting up plants abroad so often to escape American tax dollars or to take advantage of the cheaper labor abroad.

THE PRESIDENT. As you know, in the bill which passed the House of Representatives, there is a section which deals with the problem of companies established abroad in order to evade taxes, and that's a matter now before the Senate. And it is an attempt to discourage that drain on our--on the dollar and gold by tax policies, and so we are attempting to meet it in a whole variety of ways.

[12.] Q. Mr. President, two questions in the wake of last week's developments. First, assuming that a price increase in steel would eventually be necessary and justified, do you have any thoughts as to how this price increase should be reached? And secondly, if some major labor union made excessive demands for wage increases, would you move as sharply against that union as you did last week against steel?

THE PRESIDENT. Well, to take the second part first, we had worked very closely with the steel union in an attempt to persuade them that it was in their interest and the country's interest to meet the standards set by the Council of Economic Advisers, and it was done. And that is why this matter came into particularly sharp focus last week.

Now, as far as the first part, I think that my original statement discussed our general views on it. This is a free economy. These matters are reached by the process of competition and collective bargaining. What we are attempting to do is to try to have them consider the public interest, which after all is their interest--the problems involving price stability, national security, and all the rest. They're very much interrelated, and this is .particularly true in the basic industries. But the--our power is that--if the industry is competitive, prices are reached through the normal process of competition, and collective bargaining agreements are reached in the normal way. But we would like both labor and management to be very conscious of the public stake at this time, and that's what we are attempting to bring forth. We hope they'll--be conscious of it.

Q. Mr. President, I asked the first question specifically because the Wall Street Journal and some other spokesmen of business have accused you directly of having set the price in steel.

THE PRESIDENT. Well, I'm aware of the accusations. What we attempted to do was project before the steel companies the public interest. And it was a combination of the public interest placed upon the table in front of them, and competition which I think brought the price down, by the fact that several companies refused to increase prices, and therefore competition worked its will. We want to be sure that competition is an active force in our economy. But I would not accept the view of the Wall Street Journal in regard to at least my feeling of the description of my actions or of the public interest.

Q. Mr. President, Chairman Miller and other Republican leaders have focused a good deal of criticism on the nocturnal activities of the FBI. Could you shed any light on that, sir?

THE PRESIDENT. No, they were attempting to--reporters have called up a good many people in the middle of the night themselves--[laughter]. And I--all we were attempting to do was to find out so that we could decide about the grand jury meeting, whether the reports in regard to the quotations which said one thing, and then there was a statement that they were misquoted, and then the next day there was a clarification. We wanted to get the facts on this.

Now, both the reporters were cooperative; I didn't realize they would be woken up at the time they were. The decision was made early in the evening, and I suppose making the connection, the FBI followed ahead, and I--and as I say, all the reporters except that of the Wall Street Journal were most cooperative. But the intention was not to disturb the reporters. The intention was to get the information as quickly as possible so we could determine what action we would take before the grand jury, and as always the FBI carried out its responsibilities immediately.

[13.] Q. Mr. President, would you care to comment on developments in New Orleans where the Archbishop excommunicated three people for hindering school desegregation?

THE PRESIDENT. No, the action of the Archbishop related to private acts and private individuals, which did not involve public acts or public policy, so that carrying out the spirit of the Constitution which provides a separation between church and state, I think it would be inappropriate for me to comment on that.

[14.] Q. Mr. President, last week you stated that the administration had not asked for assurances from the steel industry that prices would be kept where they were when the contracts were ratified. I wonder if you can tell us whether you received such assurances, either directly or indirectly, and I am prompted to ask because the day the contracts were ratified you stated that the settlement was noninflationary.

THE PRESIDENT. That's correct--that's correct. I think we responded to this last week, when I stated that I did not ask, for the reasons which I gave, the steel companies to give a commitment that they would not increase prices. But I stated at the time that it was very clear that our whole effort was to secure a noninflationary settlement.

Q. But my question, Mr. President, was directed as to whether such assurances were given to you, regardless of--

THE PRESIDENT. No, I said last week--I said they were not. If you read last week's interview, you will see that they were not asked and they were not given.

Q. And not given, is that right?

THE PRESIDENT. That's correct. On the other hand, during the conversations which were held, it was made very clear the purpose of our attempting to persuade the steel union not to accept an inflationary settlement. And no statement was made during any of those conversations that a price increase would immediately follow the wage accord, particularly if that wage accord were noninflationary. So that while no request was made for a commitment, on the other hand no statement was made which would have indicated to us that if the union cooperated and accepted a very low increase, that on the other hand there would then still be an automatic price increase.

Q. Mr. President, you agree that it's important for the steel companies to modernize their plants. Does the Government have any ideas about helping steel to do this, that is, aside from the 8 percent tax credit?

THE PRESIDENT. And also the rewriting of schedule f, the depreciation allowances, and already a study has been on for some weeks. We've already done that in the textile industry and we are now analyzing steel and certain other basic industries in order to improve their depreciation position.

Secondly, I do want to say that in regard to profits that the last quarter, and as I said the first quarter, were the highest profits in the history of the United States and, therefore, I feel that while some particular companies and some industries may have special problems that the overall profit situation is not unsatisfactory.

[15.] Q. Mr. President, Mr. Tsarapkin, Soviet delegate to the disarmament conference in Geneva, told representatives of the Women's Strike for Peace that Russia would negotiate a nuclear test ban treaty with the United States if the United States would close down just one of its missile bases overseas as a gesture of good faith. When the women reported to Ambassador Dean he suggested they refer the proposal to you. Would you give us your view, sir?

THE PRESIDENT. Well, I've never heard that proposal made by the Soviet Union. In other words, they would agree, as suggested-well, now, I don't think you can read the letter of the Chairman to the Prime Minister and get that impression. There's no--I--we have never heard that they would agree to an effective test ban, an inspection system, if we would close down one base, and my judgment is that there's no evidence for believing they would.

Q. Well, this--they told this to these private people.

THE PRESIDENT. Well, at the conference at Geneva--and I'm sure that if there's--Mr. Dean will be glad to ask if that is so. But my judgment would be based on all the conversations which have gone on for many weeks and, in fact, the 3 years of negotiations. There is no evidence that they would do this. It's a lot different from saying we'll agree to negotiate about it if such an action is taken. They are now negotiating about it. We've been negotiating about it for 3 years. We were negotiating last August when they began testing. So I think that it indicates the long gap, as I said before, between an agreement to negotiate and negotiate an agreement.

Q. Sir, I would like to ask you if the reports from Geneva on the radio this morning about the U.S. disarmament proposal are correct, and that is that the U.S. proposes to scrap all armies and weapons and have a U.N. police force. I could not find out if this was the draft, because the drafts have not been made public to the American people or to all members of Congress yet.

THE PRESIDENT. Yes, they're being made public today, Mrs. McClendon, and the description you have given is not an accurate one of our proposal.

Q. You say it is not inaccurate?

THE PRESIDENT. Not--not an accurate one of our proposal.

Q. Would you tell us what it is?

THE PRESIDENT. Well, Mrs. McClendon, the treaty will be made available to the members of the press today and will describe the various stages upon which we propose that disarmament might be taken, what actions we will take during these various stages, what protections are given to the security of the United States, and I think that when you have read the entire treaty you will realize that my response--the description you have given is not--at least is not comprehensive.

[16.] Q. Mr. President, over the weekend, as you know, there has been somewhat of a flap over some proposals which the United States might make to the Soviets on Berlin. Could you tell us in this connection, sir, whether you would think it desirable to give the East Germans a technical voice in any international authority which might control access to West Berlin, provided it is part of an arrangement which guarantees our existing rights?

THE PRESIDENT. Well, I would have to examine that language again that you've just submitted to me. [Laughter] The question really is the status, the position, the authority of the East German regime in regard to any access authority. That really is one of the--that has been a basic issue since these discussions started. So that I could not attempt to respond to your question unless we had definitions of the technical commission, its power, the status of the East German regime in that authority, whether they had the authority or whether it was held by the four Powers, what were the means by which the four Powers exercised their rights--these are all the questions which are the subjects of negotiations between the Soviet Union and ourselves. This matter, however, certainly is one of the points which are now under discussion with the Soviet Union, how we can reconcile the problem of access, and maintain our position there. But I think as the Department of State has said, the government in West Germany has been kept informed and the proposals that we have talked about before, that we're talking about now, are in the general channel of previous proposals that have been discussed with the Soviet Union.

[17.] Q. Mr. President, some of your critics feel that you set prices or have gone into the field of price control by Executive fiat in the steel situation, and further that this sets a precedent which you have to follow in future situations. Do you feel that you have set a precedent, that as these situations arise you would again have to invoke this sort of power?

THE PRESIDENT. I think the steel--I've stated I think in our statement what I believe to be the general policy of this administration in regard to prices and wages. Everyone is quite aware of what the powers are of the Government, and the limitation on those powers, and what the presumptions are--that collective bargaining will be free, and that the competitive system, the competition within industry, will maintain prices at a reasonable level. I've attempted to state the public interest involved in all these negotiations and we will have to try to continue, as we have in the past, to bring these matters before labor and management in an attempt to provide the kinds of agreement which will maintain price stability. We're going to attempt to do that. But I have not suggested that our power--that we have powers to set or that those powers would be desirable to set prices or to set wages. But we can attempt, it seems to me, to bring before the parties in the most effective way possible, the public interest that is involved, and must be involved, particularly in these basic industries, when competition, our balance of payments all involve our national security and our military forces abroad. The interrelationship makes the public interest mandatory in these matters, and it's our responsibility to present it to those involved, which is what we tried to do in steel.

[18.] Q. In that connection, Mr. President, the next major round of negotiations appears to be with the aerospace and missile aircraft industry, with the two unions, the machinists and auto workers, already asserting that they want wage increases considerably above the formula laid down by the Council of Economic Advisers. And they point out that the Government is really a major party to these negotiations since they have the contracts. Would you assert the public interest in these negotiations?

THE PRESIDENT. I think the public interest is very definitely involved, but I--in asserting the public interest we have always recognized the proper limitations of that--of the power of the Government to enforce any collective bargaining agreement. We do not have that power. That power has not been given to us. But we will certainly attempt to describe to the people involved, particularly in a program which is so important to the national security, we will attempt to describe the public interest, which, after all, is their interest as well as that of the Nation. Now, whether these parties will be responsive, as the steel union was, and as, on Friday, the steel companies were, of course, is a matter that will be seen in the future.

[19.] Q. Following up the question on Berlin, sir, our negotiations with the Russians have been carried out in behalf of the other occupying powers as well. In view of the flurry he referred to over the weekend and in view of the definite French reservations, would you tell us a little bit about how we stand as, in effect, the spokesman for the four Powers at this moment?

THE PRESIDENT. Well, I think that Mr. Von Eckhart, speaking for the West Germans, made a statement that they had been in consultation with us, and that they had confidence in our efforts. The French have had reservations from the beginning in regard to these probes, and we are continuing these probes in order to determine whether there's an effective basis for high negotiations. And we shall continue. The United States--this is a very dangerous area, involving vital interests of both sides, which could--even though at this present time the temperature has been lowered--could blow up anytime. And I don't think that we are meeting our responsibilities to our own people if we do not make every effort, in addition to strengthening ourselves militarily, and indicating a determination to protect our vital interests, to see if an accord can be reached. Because we--obviously it would be in the international interest if this particular area which is so susceptible to pressure because of its geographical position could be--an agreement could be reached. So we're going to continue to do it. Now before any agreement is finally signed, if we ever get that far, of course, the French and the British and the West Germans would all be very much participants. But the stage we're at now is to see whether such an agreement can be reached.

Q. Can we take it, sir, that as of this moment, the West Germans as the party most directly affected support these proposals that we are putting forward?

THE PRESIDENT. I think that the West Germans are--should really speak for themselves. But f have no reason to believe that the West German Government does not support the efforts we are making to determine whether an accord can be reached. But as far as their own position on each particular matter, I think they would--should state that.

[20.] Q. Mr. President, in view of what you have called the very negative prospects for obtaining an effective nuclear test ban agreement with Russia, have you now set a specific date for the United States to resume testing in the atmosphere?

THE PRESIDENT. I think that the time was described in the March 2d speech.

[21.] Q. Mr. President, there has been a good deal said recently, and I think you have addressed yourself to the fact that

THE PRESIDENT. But in answer to your question, there's not a specific day been set, no.

Q.--that labor's gain should be tied to productivity and that their wage increases would be. Not much has been said as to whether the investor should also share in this productivity, and apparently they didn't in the recent steel negotiations.

THE PRESIDENT. Oh, the productivity. No, the owners of steel stocks have shared very much in the last 10 years. I don't think there's any question. I think there has been a split of--six times in the United States Steel stock since 1948-49, and they've been paid a very good dividend, and they have very strong equity. And what is true of U.S. Steel is true in even greater extent in other steel companies, and, as I've said, in industry in general. So that I think the shareholders--and the shareholders will do very well. For example, one of the problems is to increase the cost of steel at a time when you are only using 60, or 65, or 70 percent of your capacity. If you could--there would have been perhaps about a $260 or $270 million present capacity increase in profits of the steel companies, but if you could get the capacity of steel up to 85 or 90 percent, you would have had--you would have a $500 million increase in their profits at present prices. So the real problem in the steel industry is unused capacity. But in answer to your question, the shareholders have participated in increased productivity.

Reporter: Thank you, Mr. President.