Remarks at a Question-and-Answer Session With a 10-Member Panel of the Economic Club of Detroit.

THE PRESIDENT. [I.] Mr. President, members of the Economic Club of Detroit, all of your distinguished guests who are with you here tonight, and all of those who are listening on national radio and also on television:

I first want to express my appreciation to this distinguished organization for inviting me back. I have appeared on two occasions in other capacities. I am honored to be here for the first time as President of the United States.

I particularly appreciated, too, the warm welcome that not only we have received in this hall, but as we drove in from the airport. The signs that we saw on some of the buildings, and all the other various activities that we witnessed, were something that we deeply appreciated.

Let me say, too, that having spoken to this club on other occasions, I have recognized that the usual format is for the speaker to speak awhile and then to answer questions. I know those members of the club, however, who greatly favor the questions and the answers, certainly the questions, more than they favor the speaking. So tonight I am following the format, a format that all of those listening on radio and television should know--you in the hall have already been informed--of making this an entire question period.

I will not take the time of the questioners except to pay tribute to some of those who have come from Michigan to Washington to work with this Administration and have made contributions to it. They have come with me on the plane tonight.

First, to the former Governor of this State, the Secretary of Housing and Urban Development George Romney, one of the trusted members of our Cabinet, a man who is one of my top advisers on domestic matters, and also one who is the driving spirit behind one of the greatest housing booms this country has ever had, with, incidentally, a new high this month as well.

Second, the Chairman of the Council of Economic Advisers, one of the architects of the new economic policy, Dr. Paul McCracken.¹

¹On November 24, 1971, the White House released the transcript of remarks by Press Secretary Ronald L. Ziegler, Dr. McCracken, and Dr. Herbert Stein, member, Council of Economic Advisers, announcing the resignation of Dr. McCracken and the designation of Dr. Stein as the new Chairman of the Council. The remarks are printed in the Weekly Compilation of Presidential Documents (vol. 7, P. 1561).

And third, from the Congress of the United States, first the Republican Leader of the House, Congressman Gerald Ford from Michigan, a man who has been of enormous assistance to this Administration in some of the very close and tough fights we have had on some legislation that seems to have been of great interest to the Nation as well as to the people of Michigan.

Then, on the other side of the Capitol, the man who has served as the whip, the second ranking Republican of the United States Senate on the Republican side, Senator Bob Griffin.

Since this is the motor capital of the world with some interest in what is going to happen to the excise tax on automobiles, I want this audience to know that of all of the people in the House and the Senate who talked to me about that--and some did quite often--he was the most influential of all. We give him the major credit.

Now I would also, of course, on this occasion point out that it would be hard to find from any State of the Union four men who have made a greater contribution to this Administration than those that I have just named from the State of Michigan.

We appreciate what the State of Michigan has done for this Administration and the Nation in the personage of these four men.

I also tonight would like to be able to thank the State of Michigan for sending us Alex Karras.² [Laughter] George Allen, incidentally, the coach of the Redskins and an old friend of mine from Los Angeles days, asked me to give him his regards; I didn't realize this was going to be a mixed audience, so I can't pass them on at this point.

²Alex Karras, defensive tackle for the Detroit Lions professional football team, had 2 years remaining on a no-cut contract when he was dropped from the playing squad. George Allen offered him a chance to play with the Washington Redskins professional football team, but Karras declined the offer.

But I do know this: that I noted with interest that before the game with St. Louis last Sunday, that Alex Karras pointed out that he didn't want to go to a team that was a noncontender and didn't have a passer. After what Washington did to St. Louis I can only say this: We have lost the Senators, but watch out for the Redskins !

Now, with that we will go to the questions.

QUESTIONS

POLICY ON WAGE-PRICE CONTROL

[2.] And I turn first to the right, to Mr. Aymond.

Q. Mr. President, this is the first question: It has been reported that you will announce the Administration position on Phase 2 of wage-price controls by mid-October. It does not seem appropriate to inquire into the nature of those controls at this time, but this question is concerned with longer term considerations.

What is the policy of your Administration as to the ultimate elimination of controls and return to the sort of free market economy we had prior to August 15, and when do you think this may be accomplished?

THE PRESIDENT. First, with regard to Phase 2, it will be announced well before, 30 days before the elapsing of the 90-day freeze.

Second, as I have indicated, it will be effective. It will cover the whole economy. It will have to concentrate primarily on those areas of the economy, major industries for example, where there is the greatest possibility of inflationary tendencies having effect on the balance of the economy, but all of the economy will be covered.

As far as the duration of Phase 2 is concerned, we are not going to set a limit on it because we believe that its duration should depend upon how effectively it deals with the problem. However, our commitment is to return to the free market forces as the most effective way to move this economy forward. But until we can deal with the problem of inflation, deal with the problem of wages and prices as they force up the cost of living for all Americans, and deal with it effectively, we believe that it is necessary to have controls with teeth, backed up by Government.

And in that respect, while it is going to be also necessary to have voluntary cooperation from management, from labor, and support from the American people, which we presently have in very great volume, it is also essential that there be Government sanctions to back it up and there will be.

But having said all these things, our major commitment in the long run is to return this economy--as soon as we have cooled the fires of inflation--to return it to those strong free forces that have brought us so far in the period that we have been a free economy.

AUTOMOTIVE SAFETY AND EMISSION STANDARDS

[3.] Q. Mr. President, this is a three-part question. You might call it a typically Detroit question. ]Do you think the automobile contribution is still a major part of the pollution problem and are the further required emission standards really worth the cost to the consumer, and what cost analysis is being made of automotive safety and emission standards, and why are such cost studies not made prior to the issue of regulations?

THE PRESIDENT. I quit beating my wife last week, too! [Laughter]

Mr. Boyd, the question is not only pertinent to Detroit, it is pertinent to the whole country, because when we look at the automobile industry, we realize that it provides one out of six jobs in this country. It also provides an enormous driving force for an economy as we are moving upward at this time.

Now, with regard to the emission standards, I understand that Mr. Ruckelshaus, working with industry in the Detroit area, will have an announcement in the next few days with regard to a new engine that in preliminary tests meets the very strict standards of the Clean Air Act.

Whether that is an indication that we will be able to go further along that line remains to be seen, because the 50,000 mile test has not yet been passed.

On the second point, it is vitally important that in this whole area of the environment, whether it is in the area of water pollution or air pollution or any other area, that more attention must be given to the cost factor as well as to the factor that we are all interested in--of cleaning up our air and cleaning up our water.

I believe that as far as this Administration is concerned, as a result of the direction I have given to the Environmental Protection Agency, that we are bringing more balance into that program. Let's just understand one thing: We all want clean air and clean water. Sometimes I have heard people say, "Wouldn't it be great if we could go back to the way America was in the beginning? Wouldn't it be great if we didn't have all of this great industrialization that pollutes our air and pollutes our water?" The answer is: Not at all.

I have been in countries that have no industrialization; I have been in countries that have very few automobiles. And let me say, I would rather live in the United States of America.

I think what we have to realize is that when the Congress, or an administration carrying out the will of the Congress, sets certain standards to clean up the air or clean up the water, we must weigh against that: How many jobs is it going to cost? And, if it is going to cost a disproportionate number of jobs; well, what good it is going to be able to accomplish--then we have to reevaluate the decision.

I have talked generally to your questions because it seems to me that it is important not to be more precise than that, since some of these matters, as you know, will be the subject of directives in the future.

I simply want you to know, however, that weighing these matters, balancing these things is very much in my mind and in the minds of those carrying out the policy of this Administration.

We are committed to cleaning up the air and cleaning up the water. But we are also committed to a strong economy, and we are not going to allow the environmental issue to be used sometimes falsely and sometimes in a demagogic way basically to destroy the system--the industrial system that made this the great country that it is.

THE ROLE OF PROFITS

[4.] Q. Mr. President, would it not be desirable for your Administration to launch a comprehensive campaign to educate the entire American public, including some politicians and perhaps some labor leaders, that the most effective creator of jobs is growth and corporation profits?

THE PRESIDENT. Incidentally, so that the members of our television audience and radio audience will know, we do have a labor leader here tonight and so we have both represented. And I realize that as I talk out there to the television audience in the Detroit area and to the radio audience across the country that there will be many who represent the areas from labor as well as those from management.

Now, to say anything for profits before this audience is like the preacher talking to the choir. And to be very candid with you, there are a lot more votes in being against profits, in being for controlling profits than there are in being for it.

But let me talk, if I may, not just to this panel and not just to this group of business leaders and some labor leaders and educational leaders here, but let me talk to those people in the Detroit area and across this country, who are thinking about how do we get more jobs in America, how does our system really work?

Now, first with regard to our freeze, when you control prices and costs there is automatically some control on profits. Second, when there is control of prices and costs, the only way that there can be more profits is for the industry involved to expand--and that means more jobs and we think that is good.

Now, the second point that should be borne in mind is who are those who get the profits, who benefits from profits? Well, first the Government is the major beneficiary. One dollar of every two in corporate profits goes to the Government. We would not have the money, for example, for education, to help the poor, the poverty programs, all the rest, unless it were the fact that we had profits of which 50 percent go to the Federal Government for its taxes.

Then there are 100 million Americans who share in profits, either as stockholders, as members of mutual funds, or who are beneficiaries of profits in one way or another. And beyond that, the major reason that profits are essential to a strong growing economy is this: Where are jobs going to come from? How is it going to be possible for the American worker who receives--and we hope this will always be the case--the highest wage in the world, real wage, approximately twice as much as his next competitor in the world, how is it going to be possible for him to compete with other workers in the world? Only if he has the equipment and the machinery, the organization that gives him a competitive advantage over those from abroad.

Where do we get that? It is only through profits that industry can buy the new plant, the new equipment that will make our workers more productive and therefore more competitive in the world.

And so putting it quite bluntly, let me say I am for profits because I believe that more profits means more jobs. And at this particular time we need more jobs.

It is very easy to say let's control profits, let's limit profits, let's have an excess profits tax, and, of course, the argument for saying that is that you are taking care of the big man and helping the little man. But when you really look at what makes this economy work, when you really look at what produces jobs, it comes from profits being plowed back into industry and making American workers thereby more competitive, and thereby producing more jobs.

And I am for that, and I think every American would be for it if he understood it that way.

PROFIT LIMITATION

[5.] I will turn to Mr. Younglove.

Q. Mr. President, I was told we could interrupt.

THE PRESIDENT. Sure.

Q. I would just like to say this: I am sure that the labor movement and the leaders of the labor movement want to see companies and corporations make good profits, but we are concerned about the corporations that make fantastic profits such as--let's take the finance industry. I don't know what productivity the finance industry gives to the American people except huge profits to themselves. And also take the drug industry. Again, here is an industry that makes fantastic profits, and I could go on with many other ones.

It just seems to me that this is where we are talking about--the labor movement feels that if there was going to be a freeze on wages, then there ought to have been a freeze in some of these areas, not cutting profits down to where companies couldn't modernize their plants and couldn't go forward, because I agree with you that if we don't have modern equipment then we can't compete with other people in other lands. And they certainly have got them. So I do feel that we are for it, but at the same time, I think we ought to look at the exorbitant profit areas.

THE PRESIDENT. Mr. Younglove, as a representative of the steel union, one of the strongest unions, as we know, I think that you have, of course, very properly recognized that the interests of a union leader, and of obviously his membership, is to deal with a profitable corporation.

I would say heaven help the labor leader that is trying to make a good contract with a corporation that is losing money. It is better to have one that is making profits.

Now, second, I think it is particularly helpful that you pointed up the need for profits being plowed back into business, so that we could be more competitive. For example, look at steel. We find that steel today, and you know this is the case, in Japan, in Germany, some of the most modern steel plants in the world--perhaps the most modern--are in Japan.

We should not resent that, but I say let's see that the American steel industry makes enough profits so that it can be competitive and your members can be competitive with the steel workers of Japan and Germany.

When we try to pick out this segment or that segment of the economy, you have named the finance industry--bankers, I presume--and that would be an easy one to be against because there are a lot more borrowers than there are bankers. But let me say, Mr. Younglove, let's talk about interest rates for a moment. Why don't we limit interest rates?

Well, if you have ever gone to a bank, it is sort of like you can drive the horse to water, but you can't make him drink. Applying that to a banker, you can limit the interest rate, but you can't make the banker loan the money.

So, when you come to this matter of interest rates, it isn't just a question of limiting the interest; it is a question of providing some system under which the money that is needed for a growing economy is forthcoming. Now, your great financial institutions, it is true, have made profits, but it is also true that since this freeze began, interest rates have come down, not a great deal, but they have come down. We want them to continue to come down.

As far as the general principle, however, of looking around the economy and once we see a very successful business making a profit, say: "Ah, because you are successful, we are going to penalize you by limiting your profit." I don't think that is good for America. I think we ought to reward success rather than to penalize it.

AID TO U.S. EXPORTERS

[6.] Q. Mr. President, your DISC proposal ³ will help American export of goods and, therefore, create and retain the jobs of American workers. But is this enough to restore our normal trade surplus in this competitive world today, or is additional help to our exports needed to balance the aid that other countries like Japan give to their exporters?

THE PRESIDENT. Mr. Gerstacker, this is a subject to which we have given a great deal of attention through Mr. Peterson's new council on international economic affairs which you are probably familiar with.

³ The Domestic International Sales Corporation proposal was incorporated into the Revenue Act of 1971 (Public Law 92-178, 85 Stat. 497), which was signed by the President on December 10, 1971.

First, let me refer to that section of our new economic policy which directly attacks this problem. We have applied a 10 percent surcharge on imports from abroad. Now, in applying that surcharge, however, I have indicated that we must not look upon it as being a permanent wall around the United States. A permanent wall of tariff barriers and of quotas around the United States would be good short-term policy and disastrous long-term policy. It would be bad for the consumers of this country by raising their prices. It would be bad for the producers of this country because we would not be competitive. The United States producer simply wants an equal shot, an equal chance.

Now, insofar as removing that surcharge is concerned, we are not going to be belligerent. We are not trying to declare war on the other great trading nations. The United States is proud of the role it has played over the past 25 years in proceeding to assist the whole system of international economic cooperation. But at this point the nations that were on their backs 25 years ago, our allies in Europe, as well as those who were against us, the Germans, are now on their feet and competing with us.

The same is true of the Japanese in Asia. We are glad that we helped to make it possible for them to compete with us. But at this point it is also essential that that competition be one where it is fair for American business, and where their business people will not have advantages that we do not have.

Now that means that we need a new approach to the problem of exchange rates. We need a new system. The other one was crisis-prone and that is one of the reasons why the surcharge will not be removed until we get action on that front. It means, also, that we need to reduce some of those impediments, artificial barriers to American goods abroad. All that we want there is fair and free trade for our goods, just as we hope we can provide fair and free trade for theirs.

We come finally to the basic point: Can American producers compete with others in the world without some subsidy? It may be necessary in some areas that there be subsidy, and we should consider that. We have got to see to it that the American workman, the highest paid workman in the world, is not driven out of competition because an unfair advantage is obtained by a workman abroad who is paid less because his government subsidizes him and our Government doesn't subsidize ours. It is subsidy only in that area that we would favor, but, generally, the hope of the future and the hope of America is in a new system which will be fair and which will be free through reducing barriers rather than to have more artificial barriers.

USE OF HIGHWAY TRUST FUND

[7.] Q. Mr. President, the American Institute of Architects is preparing recommendations for [a] national urbanization policy which we believe is compatible with your national growth policy. Central to our recommendations is the use of a national transportation system to implement such a policy.

Would you, Mr. President, feel disposed to support a proposal that the Highway Trust Fund expand into a general transportation fund in order to build such a national transportation system?

THE PRESIDENT. Mr. Hastings, as you are probably quite aware, you have hit upon about one of the most sensitive political issues we have in this country. I just met with a group of Governors, incidentally, enlisting their support, and we have their support in support of the wage price freeze.

If there is one sensitive issue, Governor Milliken will tell you in his State it is: "What are you going to do about that Highway Trust Fund?" The same is true with regard to the Congress.

On the other hand, looking toward the future, looking toward a comprehensive transportation policy for the country, I believe that we cannot be rigid with regard to the Highway Trust Fund. I believe that if the only effective way of solving our mass transit problems, our problems of congestion and the rest, is through some approach which would use some of these funds in other directions, I think we have to consider it.

I don't have a specific proposal before me and until I have one, I, of course, will not approve it. But I don't think we should enter this problem with a closed mind.

A BALANCED BUDGET?

[8.] Q. Mr. President, this question perhaps calls for an answer along the lines of the educational one suggested earlier. In your opinion, sir, is it impossible for the United States Government to limit its spending to the amount of its income and forget deficit budgeting as a way of life?

THE PRESIDENT. I would answer the question by saying that whenever our economy is producing at full capacity, we should under no circumstances spend more than what the tax system produces. In other words, we should always have a budget which is balanced when our economy is producing at full capacity.

When our economy is not producing at full capacity, however, it has been true at least in the last 25 years--and this was true even in the Eisenhower Administration in 1958 when we had a deficit of over $10 billion--it has been true that Government spending, to pick up the slack in the economy, can be justified.

Now, let us look at this Administration. In our first year, in our first 2 years as a matter of fact, we submitted budgets and lived within budgets that were relatively balanced or close to balanced.

This year and in the year 1972, fiscal 1972, our budgets are out of balance. They are out of balance in the conventional way, out of balance in the sense that we are spending more than we are getting in, in taxes. But on the other hand, they are balanced in another way.

We are limiting our spending, with the cooperation of the Congress, we hope, to what the tax system would produce if it were producing at full employment. And we believe that that kind of spending is not inflationary. If it goes beyond that, then it would be inflationary.

So, my answer to your question is that what we want to do---and I hope we achieve this goal soon--is to get this economy back to full capacity without war, to have full employment, and when we have that we can have a balanced budget in a conventional sense.

ACTIONS FOR MINORITY GROUPS

[9.] Q. Mr. President, what are your administrative policies and practices to combat discrimination and segregation in housing in cities and suburbs to do two things: first, to reduce the necessity of school busing, and secondly, to increase the employment of minority persons in suburban firms and factories through a rapid transit system?

THE PRESIDENT. Mr. Kornegay, we have a number of policies in this area which Governor Romney could perhaps describe in greater detail than I could on this program. You, of course, are aware of the fact that through the Philadelphia Plan and through a number of other initiatives, we have opened up job opportunities for minority groups that have not existed before.

We also have opened up business opportunities through our initiatives in the field of minority business that have not existed before.

With regard to housing, we have followed the practice, which we think is a proper one, of seeing that there is an equal opportunity for all individuals, regardless of race, to have a chance to move into any housing. We have enforced the law, and we will continue to enforce the law in that respect.

Now, when you go to a further point, the point I think that you suggest, or you may be suggesting, that we should use the power of the Federal Government to force so-called integrated housing, I would respectfully suggest that that kind of a program would not be workable, and it is not one that I think can be justified.

We will, of course, not subsidize through the Federal Government, and do not, housing that is segregated. But on the other hand, to go to the other extreme and to use the power of the Government to change housing patterns, change them forcibly, rather than to have those patterns change on a voluntary basis by having an open housing program in which any individual who has the opportunity can move where he wants, we believe that that kind of an approach, of a forced housing policy, is one that will not work.

INTEREST RATES

[10.] Mr. Richardson.

Q. Mr. President, all the questions submitted seem to have an inordinate preoccupation with the interest rates. So, the primary question here is: What will the policy of Phase 2 be with regard to interest rates?

THE PRESIDENT. As you know, interest rates are not covered in the freeze. With regard to Phase 2, the matter is still open, particularly with regard to loans affecting consumers. As you know, through the Federal Reserve there are some tools that are available in that respect.

We have not yet made a decision with regard to interest rates. I would say that what happens to interest rates for the balance of Phase 1, whether they continue to, shall we say, stay where they are or go down, will have a great deal of effect on whether we feel it is necessary to have the Federal Reserve move in with the power that they have, particularly at the consumer level, on interest rates in Phase 2.

THE WELFARE SYSTEM

[11.] Mr. Winkelman.

Q. Mr. President, as you know, the cities of our country have many critical problems, one of which is an antiquated welfare system that is very bad from everyone's point of view--the recipient, the caseworker, and the public. What could we look to as your role, and what action can we expect in resolving this problem in the frame of reference of your new economic program?

THE PRESIDENT. As you know, Mr. Winkelman, one of the major initiatives of this Administration, one that we have had before the Congress now for over a year-almost a year and a half has been a massive welfare reform.

The present welfare system is a national disgrace because it is a system which makes it more profitable for a man to go on welfare than to go to work. That is why the key to our welfare reform proposal is to provide for the working poor an opportunity for individuals to move off welfare, even to lower paid jobs. Rather than to have a disincentive to work, we want to remove the incentives to stay on welfare; we want to increase the incentives to get off welfare and to work.

We want to get away, too, from the present system--and that is what our family assistance program is also directed to--the present system, which I think is unconscionable, of having welfare snoopers going around to enforce what I think are the unenforceable provisions of the present welfare system.

Now, with regard to that welfare program, as far as the President is concerned, and the Administration, we have laid it before the Congress. I have emphasized it in every speech. I emphasized it again when I spoke to the Congress on September 9. It has passed the House. It is now before the Senate. I believe that before the Congress goes home for Christmas this year, they ought to move on the welfare program and do something about it.

INEQUITIES OF WAGE FREEZE

[12.] Q. Mr. President, it is estimated that Phase 1 of the freeze cost American working people more than $500 million just in wage increases that already were agreed upon through the collective bargaining process. Because of this freeze, this huge amount of money was retained by the companies. Also, many thousands of individuals have had their wages frozen at a time when they were already behind other wage earners, and many in the same industry. How will these inequities be resolved?

THE PRESIDENT. Mr. Younglove, one of the inevitable consequences of a freeze is that there are inequities, as you well recognize. Those inequities must be equally shared--equally shared during the period of the freeze.

One of the reasons that a freeze cannot be extended beyond 90 days--oh, possibly it could go for 120 days--is that those inequities will eventually blow it up. The massive public support for the freeze-and it runs about 70 percent, including over 60 percent among union members, as you know--that massive public support would tend to erode if the inequities such as the ones you have referred to, and teachers' salaries are another example, if they were allowed to sit there and fester.

Now, to answer your question as to what happens when the freeze is over, however, would not be appropriate. It is a matter we are considering as we look at Phase 2.

It is a matter which we, of course, will address ourselves to. One of the reasons that we have to move from a freeze which allows for no flexibility to a Phase 2 operation is to take care of such inequities as you have described.

Now we will go back to the right again. I don't mean you are on the left, understand. [Laughter]

THE STOCK MARKET

[13.] Q. Mr. President, you were correct a little over a year ago in saying it was a good time to buy stocks, and apparently a number of people are looking for a winning formula, because we have had a number of questions precisely as follows:

Would you put your money into the stock market at this time?

THE PRESIDENT. When I made that statement that we ought to buy stocks---and if anybody took that advice you wouldn't be here, you'd be out spending it right now, the money you would have made---but, in any event, when I made that statement, I got a lot of criticism from around the country because they said after all, people rely on what the President says, and then if stocks go down, it is going to be very detrimental to their interests and, of course, to the interests of the President as well.

Let me put it this way: An individual should buy stocks if he has confidence in the future of the American economy and confidence in the future of America. So I will answer your question by saying I am confident about the future of the American economy, and I am confident about the future of America. And you can judge from that that I would buy stocks for that reason, because of that confidence.

Let me tell you what I base it on. I base it on, first, what has happened to this economy since the first of the year: The leading indicators are up 15 percent since the first of the year; retail sales, as you know, Mr. Gerstacker, are up 15 percent since the first of the year, and running 8 to 9 percent above a year ago at the present time.

Automobiles--and, of course, I would have to admit that part of this may be due to the fact that some people are buying automobiles while the freeze is in effect--but on the other hand, it must not go without noting that automobiles are 25 percent higher in the month ending the 20th of September than they were a year ago.

We find also that as far as the economy generally is concerned, it moved up at the rate of 8 percent in real growth in the first quarter, at 5 percent in real growth in the second quarter; $33 billion in the first quarter, $22 billion in the second quarter.

I said at the first of this year that 1971 would be a good year and that 1972 would be a very good year. I will modify that to this extent: The last quarter of 1971 will be very good, and 1972 will also be, as I have indicated, a very good year.

Now, based on that, I would say that anybody that bets--and that is what you do when you buy stocks--long term, don't sell, don't go for those short-term gains, keep it for 6 months--but anybody who bets long term on the future of America and this economy is going to win his bet, in my opinion.

THE SUPREME COURT

[14.] Q. Mr. President, I think we had over 200 questions on this subject so I picked three here, and I will make it another three-part question: Now that there are two vacancies on the Supreme Court,⁴ do you think it timely for a woman to become a Supreme Court Justice; or do you believe that a nominee for the Supreme Court Justice should have substantial judicial experience, that we should in fact promote our best judges; or have you ever considered appointing Martha Mitchell?

THE PRESIDENT. Well, answering the third part first, Martha Mitchell is not a lawyer, but that is not, incidentally, an inhibition as far as appointments are concerned because the Constitution does not require the President to appoint a lawyer to the Supreme Court. So, she should-or could be considered, I should say, but her husband won't recommend her, so consequently that rules that out.

⁴ Statements by Press Secretary Ronald L. Ziegler on the retirement of Associate Justices Hugo L. Black, effective September 17, 1971, and John M. Harlan, effective September 23, were excerpted from Mr. Ziegler's regular news briefings at the White House on the above dates and are printed in the Weekly Compilation of Presidential Documents (vol. 7, P. 1310).

Second, with regard to women, I believe that a woman who is qualified should be appointed to any court--district court, circuit court, or Supreme Court. I have instructed the Attorney General, as he looks over the nominees that he is going to present to me, the recommendations, to be sure that qualified women are included if they meet the general standards that we have set.

Now, with regard to the qualifications, and answering the question very seriously now, that I am looking for, I am frankly looking for judges who--and you can always judge a man who is going to make an appointment on his track record--I am looking for men who will have a similar judicial philosophy as the Chief Justice of the United States, Mr. Burger, whom I appointed, and Mr. Justice Blackmun.

I believe that the Court at this time could well use two more judges, men with that judicial philosophy. I am more interested in the judicial philosophy than I am in what part of the country they come from and whether they are a woman or whether they are a man.

Now, is it a requirement, and should it be a requirement, that the judge or the nominee be one who has judicial experience? The answer is no. Mr. Justice Frankfurter was a teacher. He was one of the great judges; whether you agreed or not with his philosophy, he was a great judge.

Mr. Justice Brandeis, who was one of my heroes when I was in law school, one of the great dissenters along with Holmes, was a man who was a great practicing lawyer, a labor lawyer primarily, fighting great causes, but that did not mean that he did not become one of the great judges.

So teachers, legislators, for example, with great experience in the Judiciary Committee of the House or Senate, they are also good possibilities. That gives you an idea of where I am turning.

CHINA VISIT

[15.] Q. Mr. President, is news of current developments in Mainland China ⁵ likely to change any of your travel plans? And the second part of the question is, just what do you expect to realize from your proposed visit to Mainland China?

THE PRESIDENT. I do not expect the current developments to change our travel plans, and those plans will be announced, incidentally, at an appropriate time in due course.

⁵ During the previous 2 weeks, there had been speculation surrounding the disappearance of Lin Piao, who was Minister of National Defense, Vice Chairman of the Chinese Communist Party, and Mao Tse-tung's designated heir. His disappearance suggested a possible internal crisis in China. Further news reports of the crash in Mongolia 60 miles from the Soviet border of a Chinese plane whose occupants were believed to have been fleeing China, the grounding of the Chinese Air Force, and the virtual stoppage of all air traffic over the mainland added to the possibility of internal political strife.

With regard to what we intend to accomplish, I think it is important for us to put it in the context of what we cannot accomplish and do not expect. Some rather naive observers have assumed that because I was going to Mainland China, that the differences between Mainland China and its 800 million people and its Government and that of the United States--that those differences would evaporate. They will not.

There are very deep differences between the United States and the Government of Mainland China--the People's Republic of China. Premier Chou recognized those in his public statements and in more detail in his private meetings with Dr. Kissinger. Those differences, however, now will be discussed.

They will be discussed by the President of the United States and by the leader of the People's Republic of China. There have been no conditions on either side, but we have agreed to talk about those differences.

Now, let me tell you why I think that is important. Ten, 15 years from now, there will be between 900 million and a billion people in Mainland China. Ten or 15 years from now, they will be a very significant nuclear power.

For Mainland China and its 900 million or a billion people at that time to be out of the family of nations, isolated from the rest of the world, would be a danger to the rest of the world which any man who is President of the United States at this time should try to avert if he can. What I am trying to do is simply to open a dialogue, move toward more normal relations, so that these differences which will continue to exist between our two countries--so that we will talk about them and not fight about them, now or 15 years from now.

INTERNATIONAL BURDEN SHARING AND CAPITAL EXPORTS

[16.] Q. Mr. President, a two-part question on the value of the dollar and international problems: Why don't we make Europe and Japan pay the cost of their defense umbrella that we furnish to them, and not, Mr. President, by the purchase of our military equipment or our treasury bonds, but in those good old U.S. dollars that they say they have too many of and don't want any more?

The second part of the question is, after we properly floated our dollar, our U.S. controls on capital exports by banks and industry are now counterproductive. They help the foreign governments keep their currencies like the yen and the mark artificially cheap in relation to our dollar, and this hurts our American jobs.

Why don't we eliminate the capital export controls immediately, and, incidentally, then we would have some people we could put to work on the wage-price freeze?

THE PRESIDENT. First, with regard to the capital export controls, this is a matter that we have considered, and it is a goal to which we are dedicated. As we move from this temporary period with a surcharge, with the dollar floating, our goal is to move toward a new system with regard to international exchange rates which will be more responsive to the changing dynamic world scene in which we presently find ourselves. The old rigid pattern can't be patched up so that it will work again, and work effectively.

With regard to the burden sharing-which is the term usually used for the Japanese and the Europeans, for whom we provide a defense umbrella, assuming more of a share of the burden--with regard to burden sharing, this is a matter that is constantly under discussion between the United States and our friends in Japan and our friends in Europe.

I do not think, however, it would be helpful to answer the question in a way that would, in effect, be belligerent, that would put them on the spot from a domestic political standpoint at this time.

Just let me respond this way: We are going to meet with the International Monetary Fund next week. There will be other meetings in the future. The position of the United States is going to be strong and firm with regard to seeing that our American producers get a fair deal and fair trade throughout the world.

On the other hand, the position of the United States is going to be outward, not inward. We are going to try to build a new international monetary system under which we can all live and compete more effectively.

And the position of the United States, I think should also be interpreted as one which will recognize this fact: 25 years ago, the United States could afford to be very generous as it dealt with the nations that were on their backs; there was nobody in the world that could compete with us.

Today the United States has some difficult competitive problems, due to some artificial barriers that I have mentioned, due to unfair exchange rates which we will attempt to correct. As far as we are concerned, we say, therefore, we will not give up the surcharge as some have advocated in order to placate our friends who are concerned about it; we are not going to give up the surcharge, and we are not going to move precipitately with regard to the international monetary situation until we can be assured that we are building a permanent foundation for fair, free international trade in the future.

That is our goal and consistent with that goal, of course, would be getting rid of these capital controls to which you referred.

PROBLEMS of THE CITIES

[17.] Mr. Hastings.

Q. Mr. President, we are all terribly concerned about the deterioration of cities and the tendency for our policies or lack of policy to turn the cities over to the lower income people in our society.

Do you see any moves that we can make that would make it more economically attractive for developers to rebuild our cities and revitalize our cities instead of continuing the westward ho philosophy of moving on and using up our raw land indiscriminately in urban sprawl?

THE PRESIDENT. Mr. Hastings, the problem here is one that simply cannot be solved by Washington. That is something which I am glad to note the people of Detroit recognize. You have your New Detroit Committee, of course, which has been very effective in dealing with some of the problems that are not only Detroit's problems, but the problems of cities generally. You have the Detroit Renaissance Committee which is working on the problem of rebuilding the downtown area.

Now, in this particular case, I think what is perhaps indispensable to a new approach to the problem of cities is that kind of civic responsibility on the part of the cities involved.

No city can be saved by Washington. A city can only be saved by the residents of that city, if they determine to do it.

REVENUE SHARING

[18.] Q. A quick question, Mr. President: Detroit is numbered among those great metropolitan areas facing critical financial problems. What are the prospects for revenue sharing this year? Detroit desperately needs this help.

THE PRESIDENT. I said a moment ago that I didn't think the Congress should go home for Christmas unless it passed welfare reform. Revenue sharing is in exactly the same position. Revenue sharing has the support of over 70 percent of the people of this country. It has the support of most of the Governors, most of the mayors, most of the county officials. And it is time for the Congress to start reflecting what the country feels and to pass revenue sharing and help the cities.

TAX CREDIT FOR HIRING UNEMPLOYED

[19.] Mr. Kornegay.

Q. Mr. President, has your Administration discounted the plan to give tax credit to firms which hire the unskilled and hard-core unemployed?

THE PRESIDENT. No, we have not discounted that plan. As a matter of fact, Mr. Kornegay, we are, in our Domestic Council within the Cabinet, we are considering every possible method that we can devise to see that the groups that are left behind are brought back into the mainstream of our society. That is one method, of course, that could be effective.

Q. Mr. President, I think our time has expired. I have received the signal from our TV director down here. So we thank you very much for your time and the privilege of being with you here this evening.

THE PRESIDENT. Well, I regret that we couldn't have more questions, but let me just say in conclusion that I have appreciated this opportunity to meet with the distinguished members of the panel. I wish that we had a chance to answer many more of the questions that I see piled up here.

Let me suggest this: Write me a letter, I just might answer it.

Thank you.