The President's News Conference

THE PRESIDENT. Good morning.

[1.] I want to first of all express my regret at the information I've just received in regard to the death of our colleague in these press conferences and a fine newspaper man, Ed Koterba, who, I understand, was killed in a plane crash last night.

He was a most--he was an outstanding newspaperman who was associated with Scripps-Howard, and we want to express our sympathy to members of his family and also to the papers with which he was associated. I want to say personally that I'm extremely sorry to have heard the news.

[2.] Secondly, I should like to comment briefly on Germany and Berlin.

Soviet and East German leaders have followed the recent Soviet aide memoire with speeches Which were apparently designed to heighten tension. It is of the greatest importance that the American people understand the basic issues involved and the threats to the peace and security of Europe and of ourselves posed by the Soviet announcement that they intend to change unilaterally the existing arrangements for Berlin.

The "crisis" over Berlin is Soviet-manufactured.

The Soviets illegally blockaded the city in 1948 and lifted the blockade in the spring of 1949. From that time until November 1958, almost a decade, the situation in Berlin was relatively peaceful.

The peoples of West Berlin developed a thriving and vital city. We carried out our responsibilities and exercised our rights of access to the city without serious incident, although we were never completely free from irritating difficulties that were put in our way.

In November 1958, the Soviets began a new campaign to force the Allied Powers out of Berlin, a process which led up to the abortive summit conference in Paris of May last year.

Now they have revived that drive. They call upon us to sign what they call a "peace treaty," with the regime that they have created in East Germany. If we refuse, they say that they themselves will sign such a treaty.

The obvious purpose here is not to have peace but to make permanent the partition of Germany.

The Soviets also say that their unilateral action in signing a "peace treaty" with East Germany would bring an end to Allied rights in West Berlin and to free access for that city.

It is clear that such unilateral action cannot affect these rights, which stem from the surrender of Nazi Germany.

Such action would simply be a repudiation by the Soviets of multilateral commitments to which they solemnly subscribed and have repeatedly reaffirmed.

About the exercise of the rights of the principal powers associated in World War II: If the Soviets thus withdraw from their own obligations, it is clearly a matter for the other three allies to decide how they will exercise their rights and meet their responsibilities.

But the Soviets say that when we do so, we will be subject to the designs of the East German regime and that these designs will be backed by force.

Recent statements by leaders of this regime make it very plain that the kind of "free city" which they have in mind is one in which the rights of the citizens of West Berlin are gradually but relentlessly extinguished--in other words, a city which is not free.

No one can fail to appreciate the gravity of this threat. No one can reconcile it with the Soviet professions of a desire to coexist peacefully.

This is not just a question of technical legal rights. It involves the peace and the security of the peoples of West Berlin. It involves the direct responsibilities and commitments of the United States, the United Kingdom, and France. It involves the peace and the security of the Western world.

In the interests of our own vital security, we and other Western countries entered in a defense arrangement in direct response to direct Soviet moves following World War II.

These alliances are wholly defensive in nature. But the Soviets would make a grave mistake if they suppose that Allied unity and determination can be undermined by threats or fresh aggressive acts.

There is peace in Germany and in Berlin. If it is disturbed, it will be a direct Soviet responsibility.

There is danger that totalitarian governments not subject to vigorous popular debate will underestimate the will and unity of democratic societies where vital interests are concerned.

The Soviet Government has an obligation to both its own people and to the peace of the world to recognize how vital is this commitment.

We would agree that there is unfinished business to be settled as concerns Germany. For many years, the Western nations have proposed a permanent and peaceful settlement of such questions on the basis of self-determination 0f the German people.

Moreover, we shall always be ready to discuss any proposals which would give increased protection to the right of the people of Berlin to exercise their independent choice as free men.

The proposals which have now been placed before us move in the opposite direction and are so recognized throughout the world.

Discussions will be profitable if the Soviets will accept in Berlin, and indeed in Europe, self-determination which they profess in other parts of the world, and if they will work sincerely for peace rather than an extension of power.

[3.] I have a second statement. The Soviet Union's refusal to negotiate seriously on a nuclear test ban at Geneva is disheartening to all those who have held high hopes of stopping the spread of nuclear weapons and the pace of the arms race. It also raises a serious question about how long we can safely continue on a voluntary basis a refusal to undertake tests in this country without any assurance that the Russians are not now testing.

Consequently, I have directed that the President's Science Advisory Committee convene a special panel of eminent scientists to take a close and up-to-date look at the serious questions involved, including two questions in particular.

First, what is the extent of our information on whether the Soviet Union has been or could be engaged in secret testing of nuclear weapons?

Second, to the extent that certain types of tests can be concealed by the Soviet Union, what technical progress in weapons could be under way in that area without our knowledge?

These answers will be received and reviewed by myself, by the Joint Chiefs of Staff, and the National Security Council in the light of what they mean to the security of the free world.

In the meantime, our negotiating team will remain at Geneva, our draft treaty is on the table there, and I urge the leaders of the Soviet Union to end their intransigence and to accept a reasonable and enforceable treaty which is our wholehearted desire.

[4.] And lastly, Chairman Khrushchev has compared the United States to a worn-out runner living on its past performance and stated that the Soviet Union would out-produce the United States by 1970.

Without wishing to trade hyperbole with the Chairman, I do suggest that he reminds me of the tiger hunter who has picked a place on the wall to hang the tiger's skin long before he has caught the tiger. This tiger has other ideas.

Premier Khrushchev states that the Soviet Union is only 44 years old but his country is far older than that, and it is an interesting fact that in 1913, according to the best calculations I can get from governmental and private sources, the Russian gross national product was 46 percent of the United States gross national product.

Interestingly enough, in 1959 it was 47 percent. Because, while the Soviet Union was making progress and improving the material standards of her people in the ensuing years, so was the tired-out runner, and, on a per capita basis, the Soviet product in 1959 was only 39 percent of ours.

If both countries sustain their present rate of growth, 3 1/2 percent in the United States and 6 percent in the Soviet Union, Soviet output will not reach two-thirds of ours by 1970 and our rate will be far easier to sustain or improve than the Soviet rate, which starts from a lower figure.

Indeed, if our growth rate is increased to even 4 1/2 percent, which is well within our capability, it is my judgment that the Soviet Union will not out-produce the United States at any time in the twentieth century.

This faster growth rate is a primary object of the various measures I've submitted and will submit in the future, tax incentives, education, resource development, research, area redevelopment, and all the rest.

Mr. Khrushchev obviously sees the future differently than we do and he has urged his people to work hard to develop that future. We in the United States must work hard, too, to realize our potential.

But I believe that we can maintain our productive development and also our system of freedom. We invite the U.S.S.R. to engage in this competition which is peaceful and which could only result in a better living standard for both of our people.

In short, the United States is not such an aged runner and, to paraphrase Mr. Coolidge, "We do choose to run."

[5.] Q. Would you care to comment on recurrent reports that the administration is considering a partial mobilization to meet the threat in Berlin?

THE PRESIDENT. No such proposal has been placed before me at the present time. As you know this matter of what steps we would take to implement our commitments to Berlin have been a matter of consideration. Mr. Acheson, the former Secretary of State, was named to consider this matter in the middle of April. His report will be coming in--we're going to discuss it this week and we will be considering other proposals which might be put forward in order to make meaningful our commitment. But the proposals are still--have not still come to the White House officially and I'm therefore not able to comment because we have not seen any such proposal as you suggested at the present time, though of course we will be considering a whole variety of measures which might be taken.

[6.] Q. Mr. President, in some retrospect, how do you now view the Cuban tractor deal? It seems pretty well off. What's the next move there? How do you plan to get those prisoners out of there now?

THE PRESIDENT. Well, the tractors--the committee offered Mr. Castro, as I understand it, the 500 agricultural tractors which he mentioned in the original speech. Mr. Castro has not accepted these agricultural tractors but is insisting on a different kind of tractor--far larger, which could be used for other purposes besides agriculture. The committee has therefore felt that Mr. Castro is not interested in permitting these prisoners to be released in return for agricultural tractors and, unless he changes his view, the situation will remain as it is.

I wish the prisoners could be free. I wish that it had been possible to secure their release because they are, as I said at my first statement, men in whom we have great interest and who are devoted to the cause of freedom. But I think the committee did everything that reasonable men and citizens could do. They were motivated by humanitarian interests. I think that they demonstrated, by exploring with Castro in detail, exactly the nature of Castro's interest.

If the--our first response had been negative, it might have been possible for Mr. Castro to say that we had refused to send agricultural tractors in return for these men. This committee went to every conceivable length in order to demonstrate their good faith. Mr. Castro did not accept it.

[7.] Q. Mr. President, I think we'd like to hear you say how you are feeling now.

THE PRESIDENT. Very well, very well. I'm feeling better, even, than Pierre Salinger.

[8.] Q. Mr. President, with respect to the Cuban operation, would you tell us what General Taylor's findings were and what reorganization or adjustment in our intelligence activities you contemplate as a result of this report?

THE PRESIDENT. General Taylor made an oral report to me, which I asked him to make and which I think will be useful to me. In addition, of course, General Taylor has been--is now a member of the staff of the White House as our military representative with special responsibilities in the field of defense matters and intelligence and coordination in those areas.

[9.] Q. Mr. President, will you tell us about the reorganization plan, if any, with respect to our intelligence activities because of his appointment?

THE PRESIDENT. No, that matter will--has not been completely--completed. In addition, we--the Killian committee is looking at the same matter and when the Killian committee has finished its preliminary surveys, we may have some changes.

[10.] Q. Mr. President, approximately 200 Members of Congress have protested to you regarding the Department of State plan for distributing low-priced textile imports among other Western nations. They urge abandonment of the plan because they feel it commits the United States to an unreasonable high level of low-priced imports in the future. Could you tell us whether this State Department plan has your unqualified support or whether you would favor modifying it to meet congressional objections?

THE PRESIDENT. In the first place, there's no plan yet. No solution has been devised to this problem of how we're going to provide for an orderly flow of textiles from the newly emerging countries which concentrate on this kind of commodity and how we're going to provide for an orderly flow between those countries and the consuming countries so that we protect the interests of the producing countries and the consuming countries.

It's an extremely complicated task. No decision has been reached as to what the formula would be. It is proposed that we discuss the formula, and I think that the conference should go on and we should discuss it. If we come to any conclusion about What should be done, and we have not reached that conclusion, as yet, we will inform the American people and the members of the Congress.

I do want to point out that we do export nearly 7 million bales of cotton every year. We sell more cotton to Japan than we import in textiles from all over the world. This is not a matter on which we can say we'll take no imports and at the same time feel that we can continue to provide this tremendous outflow of cotton.

We export nearly 7 million bales of cotton every year. We import a total of about 600,000 bales of cotton, manufactured into textiles a year. So that we have to consider the economic interests of the United States as well as other people. We sell Japan--I think last year we sold them $150 million more than they bought from us, totally. So that while I'm concerned about, and I am concerned about the problem of the textile industry, which is one of the reasons why this conference was called, as a result of the protests which were made by members of Congress because the imports have increased in the textile industry, and it is hard hit. I think it came, it increased in recent months and recent years from around 41/2 to 7 percent and therefore the trend is against, has been sharply--has provided for increases.

I do feel that we ought to take into account that this is a balance matter. In addition, some of the States which sell cotton overseas which may be adversely affected by textile imports--we also export a lot of textiles. We also, for example, export tobacco, which is an export product, so that we have to consider the general economic interest. We cannot expect that we're going to be able to cut off completely the importation of textiles and then think that we're going to have anything but ruin for our cotton exporters.

So it all has to be balanced, and one of the ways that the economic interests of all can be balanced is in this conference, and I support it.

[11.] Q. Mr. President, without respect to the current maritime strike, do you plan to take any action on the American-owned flags of convenience, or runaway ships, as you once described them?

THE PRESIDENT. Well, we are concerned about the--as I have said before--about the problem of runaway ships in the sense that ships who are put by American owners under other flags in order to avoid paying the wage scale which we have for our American merchant marine, the United States Government pays a large share of the bill for important segments of the American merchant marine, including these wages. So when these ships leave us and compete against us, in a sense it affects not only the welfare of the seamen involved but also affects governmental policy and governmental obligations. So we are concerned about the matter.

But in regard to the actual details, I would prefer for the present to wait until the Cole committee makes its report in regard to Taft-Hartley. And we are also considering what we could do to see if we can work out some solutions which will ease the burden of the people involved.

There is also an obligation, let me say, on the representatives of the American merchant marine, an obligation of Mr. Curran and Mr. Hall to make sure that the problems of the American merchant marine in its competition with other areas are taken into consideration. They cannot merely consider it isolated. This is a competitive business. And we could very well find, instead of flags of convenience or so-called runaway ships, that the ships were actually put under the--which, and in those cases the American, the United States Government has some control over the ships. They could actually put them under the flags or have contractual relationship with the British or the Norwegians and then we would not have the control in case of a national emergency and we would still be being undercut.

So it's an extremely complicated question to which Secretary Goldberg and the Secretary of Commerce and the members of the committee are giving a good deal of attention.

[12.] Q. Mr. President, in considering the resumption of nuclear testing, have you requested or do you propose to request a report and recommendation from the Federal Radiation Council regarding the consequences of fallout that may result from such a resumption of tests?

THE PRESIDENT. All these matters, of course, would be considered before any decision were reached.

[13.] Q. Mr. President, how do you feel now in retrospect about summit meetings and do you foresee any more of them in the future?

THE PRESIDENT. Well I've never described the meeting in Vienna as a summit meeting. I think the meeting in Vienna was useful to--certainly to me in meeting my responsibilities, and perhaps it was also to Mr. Khrushchev. Because, as I've said from the beginning, these issues which we're now talking about are extremely serious issues which involve the well-being of a great many people besides even the people of the United States, and decisions have to be made on the basis of the best information we can get, and they involve the security of the United States and they involve also the peace of the world, and therefore if those decisions can be made more educated by such a meeting it was useful. Now there are no plans to have any further meetings that I know of.

[14.] Q. Mr. President, Vice President Nixon seems to be taking a dim view of your administration. He said in a speech yesterday that never in American history has a man talked so big and acted so little. Do you have anything to say about this?

THE PRESIDENT. No, I wouldn't comment on Mr. Nixon. He has been engaged and busy and I sympathize with the traveling problems he has and his other problems but--[laughter]--I don't have any response to make. We're doing the best we can and will continue to do so until 1964 and then we can see what the situation looks like. [Laughter]

[15.] Q. Mr. President, you said that if the United States can attain a rate of growth of 4 1/2 percent, that Russia will not catch up with us in the twentieth century. What is our rate of growth now, sir?

THE PRESIDENT. Well, culling it from 1953 to today, it's about 3 1/2 percent.

[16.] Q. What are we doing to attain a rate of growth?

THE PRESIDENT. Well, we're going to have a sharp--from the recession of 1960, winter of '61, we ought to have a substantial rate of increase. The big problem will be to sustain it over a period of time and that will require--I mentioned some of the things--a tax system which provides a stimulation to growth, education, and research, also the development of the natural resources of this country and also monetary and fiscal policies which will recognize the necessity of preventing a recurrence of these successive dips.

Now we had a recession in '54, we had a recession in '58, we had a recession in '60. The '60 recession came right on the heels of the '58 recession. Two of the reasons why it may have contributed--it was the movement from a $12 billion deficit in '58-59 to a prospective $4 billion surplus, which was a change of more than $16 billion in the potential receipts of the Government, which did have a restraining influence on the recovery.

Secondly, of course, the long-term interest rates were extremely high. Now we have to--the Federal Reserve will meet with Mr. Martin frequently. It's a very uncertain science, but we have to figure out what steps we can take--with this free economy--that will provide not only a recovery now, and we hope a reduced unemployment rate, but will also sustain it, not just through '62 but over a period of time. That we have to do if we're going to defeat Mr. Khrushchev, but it's within our potential and, therefore, I think, my judgment is that if the United States considers this problem and the people of the United States and the Government working together attempt to master this uncertain science in a more precise way, that we will remain not only ahead on a per capita basis but also on a national income basis in this century.

We have to recognize, of course, that the Soviet Union is working extremely hard and enjoys some advantages in being able to mobilize its resources for this purpose in the sense that a totalitarian society enjoys that advantage. What we wish was that they would do it under a system of freedom, but that is their decision.

[17.] Q. Mr. President, there's been some criticism of our handling of inter-American affairs, particularly on grounds that you have a multiplicity of advisers in the White House duplicating and sometimes overruling people in the State Department. I wonder if you could define for us the relationship of policymakers on your staff as against those in State and perhaps in the Pentagon?

THE PRESIDENT. Well, we have in the White House a number of people who have responsibilities in various areas. And one of the areas in which we're particularly interested is Latin America. Now I've read the--I think it's--I was sorry that we did not secure a replacement for Mr. Mann more quickly. I did talk to almost eight people. We had assurances in a number of cases which lasted some days, but we finally did not--in every case we were not successful. I think we were very fortunate to have Mr. Woodward and perhaps maybe we should have started with Mr. Woodward. That's the first point.

Secondly, we are particularly interested in Latin America. My experience in government is that when things are non-controversial, beautifully coordinated, and all the rest it may be that there isn't much going on. I've never heard of any criticism of--I do not hear any criticism of our organizational structure in several areas of the world which I know are rather inactive as far as anything being done. So if you really want complete harmony and good will, then the best way to do it is not to do anything.

Now we haven't done so much in Latin America in the last decade. It has not been a matter of great priority. We are attempting to do something about it. And we've been fortunate to have the services of Mr. Berle who is completing the work of his task force. Mr. Goodwin from the White House has given it a great deal of attention, particularly the meeting of the IAECOSOC in Montevideo through the end of July. The whole refinancing of the Brazil debt, which could have been a most serious crisis in that very vital country, was handled in cooperation between the Treasury, the White House, the State Department, the Export-Import Bank, Food for Peace and ICA. We've also given particular attention to the economic problems of Bolivia.

So we are attempting to do something about Latin America and there's bound to be a ferment. If the ferment produces useful results then it will be worthwhile. But I must say I don't think--my experience is you can't get very much done if--when things are very quiet and beautifully organized, I think it's the time to be concerned, not when there is some feelings and interest and concern.

In addition, Governor Stevenson went down and made a tour there as a prelude to our meeting at Montevideo, which I think was useful. So I would say we have given more thought in this administration to the problem of Latin America than on almost any matter involving our foreign policy.

In answer to your question, when Mr. Woodward comes here next week he will be the responsible officer in the State Department and will work closely, I'm sure, with the Secretary of State and with me.

[18.] Q. Do you feel that the Berlin threat is serious enough for you to plan a personal meeting with the British and French to map our strategy there if the situation becomes indeed very hot?

THE PRESIDENT. It is a matter which we discussed with General de Gaulle and Mr. Macmillan. In addition, they've had--Lord Home was here--the French Government has had a representative, as well as the British Government, talking about the response in the aide memoire. I've no doubt that we will have close exchanges with Mr. Macmillan and General de Gaulle and when the matter reaches a point where a meeting would be useful, we would have it.

[19.] Q. On your statement this morning about a committee to go into the extent of information on Soviet testing, is there any suggestion here, sir, that we have an intelligence gap in this field? Or to specify, did not the Eisenhower administration and does not your administration pretty well know what the Soviets have been doing in nuclear testing during this

THE PRESIDENT. No, there's--in what way?

Q. I just wondered if you had information about what testing they may have been doing.

THE PRESIDENT. No, we do not--this is a matter which the committee will look into. But in answer to your question, I have not seen any information, nor did the previous administration have any knowledge, which would state that the Soviet Union had been testing--information either by seismography or by any other means. What is of concern is, is it possible to test without those evidences being secured? Is it possible to test underground, for example, without a determination being made that such a test is being carried on? That's the matter which we wish to have explored. But it would be inaccurate to state that we have information that would indicate to us that the Soviet Union is now testing. What we're concerned about is that our information is quite incomplete and we want to know whether it's possible that they could be testing without our knowing and what the chances are that that might be true.

[20.] Q. It has been almost 6 weeks, sir, since the conference on Laos has been under way. There seems to have been little progress, at least little understanding, between the two sides. Do you consider it worthwhile to continue the conference?

THE PRESIDENT. Yes, the cease-fire is generally in operation. What we're now concerned about are the details of the ICC's power, and I'm hopeful that we can secure effective instruction for the ICC, so that it can meet its responsibilities. I would continue the conversations to see if that can be obtained.

[21.] Q. Realizing that the Acheson and other contingency reports have not yet been finished, could you, nevertheless, give us at least a hint this morning in what areas the public may be involved in supporting your strong stand on Germany? I ask that question against this background: that it's generally considered that your words to Mr. Khrushchev in Vienna were highly impressive, but it's necessary to follow them up with decisions and deeds.

THE PRESIDENT. Yes, well, that's the matter which is now engaging the attention of the United States Government; it is one of the matters which will be discussed at the Security Council tomorrow. But as of now, no report of the deliberations of the Pentagon and others as to what actions might be usefully taken have officially--have been finalized.

In addition, I would point out that we are talking about matters of extreme seriousness and I think that we should wait until a judgment has been reached as to what action we should take before it's useful to discuss it publicly. As of today, these considerations and recommendations have not yet come to the White House. One of the matters which will be discussed, as I say, tomorrow will be this matter at the Security Council.

[22.] Q. Mr. President, can something be done to require mortgage bankers to quit enriching themselves off of the FHA system of making loans? I refer to the many complaints that are coming in to FHA on this matter from widows and poor people who--buyers and sellers--who are losing, say, several hundred dollars on the sale of a small house to these mortgage bankers who laugh at the people and say FHA and your Government condones this system whereby we charge side payments for financing these loans.

THE PRESIDENT Well, I think--I will look into it and Mr. Salinger will have a statement to make on it by tomorrow afternoon.

Reporter: Thank you, Mr. President.