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This morning, we have a certain push to do something at all, particularly those who plan to save folks.

But, you know, we've got all those various programs with regards to the president's care, and the staff, and the president's care.

Thank you.

A lot of people who live in what is called rural America, and that's more than 500 people.

It's about 340,000 Americans.

In fact, here in the state, less than 2 million people are being classified as farmers.

It's a identification.

Multiply that by 5 million, it's 7 million voters.

Hey, wait a minute.

They feel that not simply because of the reduction of farm prices, but because of the emphasis that not only this administration, but the previous administration, everybody in this city, problems in the ghetto, and so forth, nobody cares anymore about the farmers, and the farm, and rural America, and so forth, which has enormous problems.

I need to say one thing about the poor education, poor housing, poor college.

I didn't want that senator or senator to exist in rural America.

Of course, it's in fact two-thirds of the counties in America in the last century has lost population.

People are moving out of that part of the country.

They're moving into cities and approximately half the people of this country by the next 18 years of living in the great metropolitan areas of Boston, Washington, Chicago, Pittsburgh, and San Francisco and San Diego.

Whether that's good or not, it doesn't have to be seen like it is.

But whatever the situation,

There is, on that part of the country, there is a feeling of wealth, as the administration is saying, and that might be the weekend.

But remember, this has been, in truth, our hard line.

In fact, the amounts that are in this budget for what we call rural development are 30% more than last year.

And we put a kicker in their direction.

The problem is that after a long last there is some beginning to recognize that there is a special problem in this part of the country.

That's really what this is all about.

And I see folks like Bobby Griffin here, and Hugh Scott, and others who like to get themselves to be represented in urban America.

I believe this is something we all need to listen about here in central Pennsylvania, rural America, and much more rural America.

Most important, it's a very, very essential part of the country in terms of disparities.

I don't like to see it destroyed.

That's why we have set up the rural affairs council as one of the regions.

It's on a very, very standpoint, but more important in the standpoint of what we do and pay attention to what happens in this part of the country.

It's hard to make that presentation and ask you questions that people like.

And I had a forum over around 9 o'clock to give an update to you.

It's on the station, which I thought you'd like to have.

And I give one every morning.

I'm going to let you have it this morning so that you can notice it.

It's a great job.

I'm one of those folks that does a very good job.

Thank you.

Is that part of the question?

Mr. President, I have one question.

What was your reaction when you visited rural America at a good point at the end of the day?

Well, very, very good.

I guess the Iowa legislature also, and the governors, and the others, I...

I feel that what is speaking more than anything else is just a lot of growth.

We know they're there, and we care about them.

It's just the attitude of all these things.

The idea that we have programs and policies that we care about.

As I said, there's a real bunch that does it to me.

Whether it's the media, whether it's the episode, and so forth.

All eyes are on the city now.

We have done a lot, but the general reaction was great, great appreciation for the fact that you came.

We have a program, and they said, well, it's about time.

We're glad to hope you made it.

Mr. President, we hope to come back to Rochester when the sun's shining.

Yeah, but we figured that what we would do would be,

We set that, perhaps, a lot of part of the goal.

About a month away, the latter part of the team had now had to go after Easter, after Easter, because we were still going to have the meeting in Rochester.

Having picked that before, we had it all set up.

Yes, there are great people out there.

I'm glad to give you the opportunity, President, because I went on from Des Moines to Kansas City and spent the day there.

I came back to Washington and read the papers.

And I couldn't believe that people who reported from the local papers had even been there.

It didn't sound like the same meeting.

And believe you me, there was great excitement out in Midwest as a result of the visit.

I think it was a highly successful endeavor, and I just can't understand why some of the people from here were out there, but the rest of them didn't catch some of the spirit of it, rather than the little sideshow that they did report and give headlines.

Would you spend a moment to tell them logistically what we did?

You see, I first went out and spoke to the legislature, and to all the governors and presentenaries in the area, and those congressmen, and people like Kyle and others who were present, and also then opened the media briefing.

That was my anticipation, about four hours.

But in addition to that, I hope everybody else had a whole day to get out.

It's not a day before, it's a very bad next day, and the next day as well.

Very good, you mentioned it when we talked to the legislature, which always says a great deal about the next day, the next day and a half that I heard.

But then, the meeting with the four governors, which was the second meeting of this group, Illinois, Wisconsin, Missouri, and Iowa, with their staffs, on the area of rural development, all of them, and these are states that are somewhat developed pretty well, encompass all the problems, urban and rural, because you have tremendous metropolitan centers in three of those states,

So the governors were aware of the mayor big city problems as well as the rural problems.

All of them have big rural areas.

And the thing that impressed me with this meeting after following the one in Springfield in October was that we didn't have to be entirely preliminary, but we got right into the guts of the issues.

And I thought we made great progress with this group.

Then we went in and had 85 members of the agricultural press.

These are the members of the farm magazines, Successful Farming and Farm Journal, and the state publications.

The radio TV people, the leaders of...

It was indeed.

A chance to get a real feel for their views because they were quite candid and twidal when the entire atmosphere produced, well, encouraged them to ask the tough questions and gave us a chance to discuss them with equal candor.

But I feel we'll get some good stories from this as the publications come out in the next weeks, and if you have a delay on that kind of reaction.

But it just can't help but be good.

Then I went on to Kansas City for a series of TV and radio appearances and talked to the Midwest Dairymen.

Sands went on to the Twin Cities for a schedule of events.

Morten went to Denver, and Romsfeld went to Memphis, and Romney came back here for a series of meetings, but he's got to get them all there, and in every place I think you should know that our cabin people go in.

We have this program set up.

in which they just don't go in and make any speech, you know.

They do chicken dinner business, but they hit the media.

They talk shows, they meet with the movers and shakers, and then of course with the special interest groups and so forth.

In fact, I saw your schedule last year.

A 16-hour day there in Kansas City.

Yeah, I had a bit of fun.

Now these are the types of things that you kind of get through, because if you can get several different groups, and all of the media, one after another, it seems to me it has more impact, because other people get some playback from a variety of sources all at once.

But, looking at the whole area of rural development, this is a matter that you fellows,

I don't like you, Mr. Ray, to speak to a problem here.

There's been too, a lot of a tendency for, as I said earlier, to look upon rural Americans as being farmers, and then point out that the farm population goes down and down and down, the personal size of the American, which is to the great credit for the productivity of the farm population.

It's the most productive part of the American.

It's the greatest increase in productivity in all of America occurs not in chemicals,

Not in automation, but in farming.

So that's what inspires us.

On the other hand, rural America is about 40% as we've been saying.

We take a certain figure, you can get the figure of about 50,000, a town of 50,000 or less, or a county which has a density of population of 1 per 100,000.

With the county of 2000, if the county of 2000 is in the county of 1 for 100, that will be classified rural America, because those people tend to identify their problems and treat it that way.

Take for example the part, Margaret, the country that you come from, Norris County.

New England is really rural America now, except for Boston.

Maine, Vermont, Hampshire, much of that part of the country, you know, has its problems primarily more related to what you're talking about now, smaller towns rather than the big cities.

You can have a Delaware, right, the middle of Pennsylvania, your farmers, of course, southern Illinois, of course.

I think that we all have to realize that if you take California, Smitty, Central Valley, is now key to the election of anybody in California, right?

And that's rural America.

That's Fresno, Bakersfield.

That's something you've never heard about.

The point that I wanted to make for this background, these remarks, is that all the 20 odd years that this has been discussed,

This is the first time that the President of the United States has articulated the problem and indicated that something should be done about it.

And after maybe two years around the town, I have a permanent conviction that not a lot of things are important to ever get done unless the President himself endorses them.

This is the first time that has happened.

And I believe as we go around the country, this is a point that we can't make.

President Nixon has spoken out strongly.

He's gone into the country.

He's talked about the problem of the farmers, he's talked about the problems of rural America, and they go together.

They're part of the problem of rural America, totally.

The stagnation that includes, as the president says, about 30 people, nearly half the poor people of the nation, those below the poverty line, over half of the substandard housing in the nation.

Now, another thing that's important.

Among the states that have lost population, or have failed to hold their natural increase, and there are a huge number of them over half the counties, there are growth centers that have grown as rapidly as the metropolitan centers.

That's a trend we want to accentuate, to promote more growth centers, more small towns and small cities, becoming part of the modern growth of this country, as a part of the total program then of balanced growth of the nation.

Income.

Farm income, income of farm families, has closed with urban income a bit over the past ten years.

But it's still running at a level close to three-fourths of urban income.

It's also true of returns for capital invested and returns to labor.

If we take then the next group, all rural families, and include those in towns of 250,000,

We find that family income, totally, is now this past year 78% of global urban income.

It was 55% ten years ago.

Again, the gap is closing, but not enough.

Again, then, let's accentuate the trend that is underway and make it move more rapidly.

States are in much better shape to deal with this from their standpoint than they were any time in the past.

The competence of staffs around the governor's offices are uneven, but at a much higher degree of competence and knowledge and ability to move than has been true before, and they're changing very rapidly because we do now have their interest.

The programs that will have impact in rural America come from almost well over half the agencies and departments of the government.

It's not just the Department of Agriculture program, although we perhaps have a higher percent of our programs that are involved than any other of the existing departments of government.

Revenue sharing then, and I don't need to go into the philosophy of this, we've had that before, but the rural revenue package, one of the six in the special category, includes a group of programs that are underway, extension service, the Economic Development Administration in commerce, the ACPR program in agriculture, then a group of smaller ones, the Great Plains program, the grants for sewers and water systems,

Pre-replanting, Forest Service, and things of this sort, grouped together with an additional amount of free money, charged $150-some-odd million, that goes with this package bringing into a total of $1.1 billion, that then will go to the states for their use in...

for use in the areas defined in the proposed act that are the cities of less than 50,000 or counties with populations of less than...

So that is the program.

People have asked as we move around the country, when are you going to have a road development package?

I think it is important to point out that it's really not a single program.

It's a process.

It's a process of the federal establishment responding to state and local initiatives, and particularly local community initiatives,

Working with those communities that are willing to do those things that will permit them to move, and then perhaps the federal programs can come in and make the difference.

And then with the revenue package, giving the states the flexibility, they may want to put more of their resources into some of the things that have been under the Intercultural Conservation Program, or they may wish to put less.

They may wish to add more resources to the Extension Service,

And they can't do this with the extra monies that are made available.

There is some apprehension, and some of you may have heard it from the land grant college people, about putting the extension service in this package.

I've had a great deal of mail, public, telephone calls.

I think it's well to remember that this is a program that's been underway for a good many years.

There has been a state matching requirement, matching the federal laws.

In all the 50 states, the state, all of them, individually, have matched the federal funds and appropriated a great deal more money, state money, than is required by federal statute, as an indication that they're not about to abolish the extension service and do something else.

I think this is a very important point.

I can't believe that this will happen, because this is the basis for the campaign.

There has been a concern among the county agents, the home agents, the 4-H agents, and others, that they're part of civil service retirement, and this would be cut off.

The law that has been proposed protects all of these people's free benefit programs, including retirement.

It permits this to be continued with payments being made from the states, from the revenue-sharing package.

I really should try to think of a good place to stop her.

And I think Mr. Harper and Mr. Price have the details on how the functions work.

Yeah, would you like to take a look at this?

Very fascinating charts sometimes are hard to understand.

This will be the most complicated one you've ever seen.

Okay, go ahead.

Would you like to do the chart, John?

Well, I don't want to say any words about the math and all the complicated charts.

All right, John, you can start.

Thank you.

Go ahead.

I remember the chart you put up in your mind with all those circles, and I just wanted you to be sure to show them what you think, and things that try to make us understand.

Mr. President, Senator Smith, and gentlemen.

The counties which are marked in red on this map are counties which during that 10-year period lost 10% of their population in World War I.

while at the same time the other extreme, the counties in blue, are counties which picked up 14% of the war population.

So what you see is really an emptying out of this part of the country to either coast and to the Great Lakes region.

When we were briefing some of the Senate members of Agriculture and Public Works committees the other day, Senator Curtis, I think it was, on looking at the map, shook his head, and he said, you know, and I don't see a governor's micro persuasion anywhere from Canada to the Gulf of Mexico in that area either.

But I am not one of those who is bored by the subject at all.

I'm what the pioneer seat court people would call a hybrid, since I've spent my life in a mix between the New York metropolitan area and Iowa.

And what I'm happy to see is the recognition now at Law Lab of the interrelationship between the problems of rural areas and the problems of urban areas.

And the need, as Secretary Harden pointed out, for better balance in our patterns of growth.

Now the reasons for the move are very obvious from what the Secretary pointed out on income figures.

Very typically, the people who have left these counties, who have left the upper peninsula of Michigan, are people who are slightly better educated, who have slightly higher incomes than the average of the counties they live in.

They are the opportunity seekers, and that's why they've gone to more urban areas, because that's frankly where the jobs have been, and that's where higher median incomes have been achievable.

That's accounted for what's been happening.

But at the same time, again as Secretary Hart has pointed out to you, looking at virtually any portion of the country which has suffered this attrition, you'll still see little marks of blue, namely points of growth, whether it's in Malaysia, or the upper Great Plains, or the mountain states.

What this means is that in each stage there is some sort of hub of activity, or center of industry, or services, or perhaps it's a defense installation, or there's some reason why that has been a magnet for people leaving the more remote rural counties, but it's been able to hold them there, or to attract people from entirely other parts of the country.

Now these are what we've taken to call growth centers.

The Secretary pointed out that the tension or interest in rural development is not renewed, at least below the presidential level.

But in the past, our efforts at the creation of job opportunities in rural America have, we came to feel, been misdirected.

Typically, the programs like the Economic Development Administration, the Appalachian Commission, and the so-called Title Vs, Title V regional commissions,

have isolated those counties which really were the worst off for attention.

That is, they picked out usually the red counties.

though not in this part of the country, interestingly enough.

None of the federal programs which are mentioned qualify the upper Midwest for assistance, neither EDA, nor the Title V commissions, nor certainly Amalasia.

So what you've had is federal attention maybe to the wrong sector of the rural problem.

What's been happening with EDA is that it's been putting money into attempts to lure industry to counties

where there really is nothing there.

There's no tax base because the population left behind is aged and poor.

There are few services.

Doctors have not been attracted to the area.

There are no community colleges in those counties.

So that, in our opinion, in this Cabinet Committee on National Growth Policy and Rural Development, past federal efforts were not targeted on the right areas.

We came to feel that a much more appropriate effort would be built around growth points or growth centers.

The reason was that usually these centers not only have a growing population and jobs,

But they also are a hub.

They are a commuter center.

People drive 35-50 miles each way each day to work in this kind of area.

But frankly, we thought about and then dismissed the idea of targeting these resources only on growth centers that we thought we could identify.

The reason was that having set up federal programs for rural development in the past, which we now feel are not targeted properly, we were wary of saying, let's lay down strict federal criteria about what areas are going to get aid.

We didn't want to make the same mistake all over again, having constraints in federal law, which wound up not letting the states do what turned out to be best for rural development.

So at the same time that the president was moving toward his decision on revenue sharing, this cabinet committee, headed by Secretary Hutch, was headed toward a block grant for revenue sharing approach to the states,

for rural development purposes, and that's where we've wound up with the rural development grant that Ed Harper will describe here.

What we are going to do is to exhort the states to plan in terms of using the trends that we see here as a way of holding people in the rural states, and perhaps in the long run, more importantly, attracting people who otherwise would settle in the most congested areas

into the middle part of the country and the smaller cities wherever they occur in the country.

So we will, as I say, exhort the states to build around this, but we will not in any way hobble them.

They're probably a lot better than we are at deciding which areas have the potential to grow, and we would be very reluctant as federal government to get into that choice.

So now, Ed Parker will describe to you, not alone the billion and one hundred billion revenue sharing for the world development, but the way in which all the other revenue sharing, some 16.2 billion dollars, will, in some way or another, be brought to bear on the problems that we're in right now.

You pointed out, Mr. President, you pointed out what the red wasn't until it was utterly striking in 2019.

There are varying degrees of one trend or the other.

The shaded red is a county which has lost less than 10%, but it's still a lost population.

The shaded blue is a county that gained less than 14%.

President, I think you'll find my charts today a little less complex, because I think that a large part of the complexity of the charts I displayed in Des Moines was due to my penmanship, since the charts in Des Moines were freehand.

This morning we've heard a lot about the concepts behind rural development at one point that has been stressed.

The fact that rural development is not just one thing, it's a capital phrase that describes a number of different kinds of activities.

Because there's not just one thing that rules it all.

What it is, very often, is a strategy to build a base which attracts industry, that creates jobs.

Essentially, the process that's involved is planning to take advantage

of opportunities that develop in the private sector, because in the private sector is where the jobs are.

This is one way of keeping a look at the different kinds of things that are involved in rural development.

Of course, the most important point in any development strategy is people.

That's the base you have, their educational background.

They're specialized in training for industrial purposes.

The health of that labor force is also critically important.

And it's important that the disadvantaged in that population do not become a drug upon the labor force.

It's important for them to take care of the disadvantaged, the elderly, the disabled.

Whereas you have to link...

from transportation, your labor force, to resources and to markets for their work.

We also need to have the public sector infrastructure to support industry through water and sewer programs,

which are indicated here.

Of course, the environment is becoming more and more in consideration in industrial locations around the country.

And finally, of course, there's the need for adequate housing, not only for the executives of any company, which might move into an area as well, for people in these areas.

We are familiar with the fact that there is considerably more substandard housing in rural areas

That there is in urban areas.

And here, on this overlay, I'll take you to that.

Yes.

For example, when we're out there with governors and so forth, they often think, we've got seven agencies, where do we go?

And particularly for the smaller towns and the smaller communities, we don't have a council or that sort of thing, we have the slightest ideas.

How to get a grant.

The congressman or the senator, or whatever the case might be, and then the congressman or the senator, because he always doesn't work well.

Don't ask me.

And you can probably give them... Well, there's only three, that'll help.

The FHA, the Department of Tourism has traded with one.

The High Basin Sewer and Water Program is another.

The Urban Renewal provides the sewer program.

The Naval Development Program has sewer authority in it.

The Model Cities Program has sewer authority in it.

And there are a couple of other programs.

EDA has their authority, and Appalachia has their authority as well.

They've had it in a couple of other areas.

I think there's another one.

These are the different ones.

The president is

made proposals to Congress with respect to each of these areas.

You find in education, the special revenue sharing program, in math power, another specialized revenue sharing program.

Within the field of health, President's recent message has emphasized targeting health resources in scarce areas.

One way that he's done this is to suggest a loan forgiveness proposal for young doctors during their education years in located areas that are scarce,

In terms of doctors, parts of the cost of their education would be forgiven.

Also, incentives for health management for organizations with new health services delivery mechanisms would be located in scarce areas.

Also, health education centers would be located in areas that are short in supply for personnel.

For the disadvantage here, the welfare program comes into play, and we expect about $2 billion of that would be targeted on rural areas, whereas formerly, if you lived in an urban area, then you had a good chance of getting whatever your fair share of the welfare program might be.

In transportation, the president will shortly be sending to the Congress a new special revenue-sharing program there.

His budget for fiscal 1972 proposes a 60% increase in the outlays for the rural sewer and water program.

In the area of the environment, waste treatment outlays go up 100% for fiscal 1972.

He has proposed environmental finance and authority, which in particular helps smaller towns finance their municipal waste treatment programs.

And also, this year, the environmental message proposed a new land use planning grant program of $20 million a year for the next five years.

And finally, in the area of housing, loans for low- and moderate-income families will go up 64%.

Off the slide.

So this is what the president has proposed aside from the special revenue sharing program for rural development.

And it provides the kind of flexibility which will allow you to bring together all of the factors that we see here on the chart into a coordinated and effective strategy for development, for creating income opportunities, for bringing into rural areas, to cultural, educational,

recreational and health opportunities that are going to make rural America a better place to live in.

Now, as the Secretary briefly touched upon, a number of the present programs will be combined into the Rural Development Special Revenue Insurance Program.

Here I've displayed them more or less by where they come from.

You see, first of all, more or less the general categories of programs that are currently covering a broad spectrum of authorities in the rural development field.

The new money, untied in Japan's history, is $179 million in new life authority.

First full year.

I apply regional commissions, Appalachia, the EDA, the Education and Extension Service, water and sewer, rural water and waste, and the environment and several programs there.

One of the reasons I wanted to display the programs in this manner is to point out the kinds of flexibility that would be available in the use of the Rural Development Funds.

All of the authorities you see represented in these programs would be authorized for the use of the Rural Development Special Revenue Sharing Funds.

In addition, because we'll have a number of small communities in here, we will also ensure that the authority is available for programs like model city urban renewal, but also be available to our smaller cities and to rural areas in promoting what would be in their mind the most effective developmental strategy.

Finally, just go on to one last chart, one that summarizes my part of the presentation.

We're talking about $1.1 billion for the purpose of rural development.

The purposes are briefly sketched out there.

The benefits are 100% for rural areas, as we've defined them.

Towns under 50,000, counties anywhere with populations of less than 100 per square mile.

The distribution formula in this special revenue sharing program, as in all of the special revenue sharing programs, is problem-oriented.

And you'll see here that we are, in this program, dealing with three indications of the problem.

One of these is rural population.

That here we compare the state's rural population with the rural population of the nation as a whole.

That's been one of the factors determining individual states' share of the rural development funds.

Secondly, it's rural out-of-migration.

We call John Price's map with all the red counties on it.

That gives a heavy out-of-migration.

We have focused funds there for two reasons in that state.

One, because if there's out-of-migration, there's either a problem there or there isn't a good reason to stay there.

And so we ought to be focusing on the problems of the individuals there.

Secondly, from a national perspective, in terms of the population trends, which the President pointed out earlier, and John Price pointed out earlier, there's good reason to make this kind of investment.

And finally, we talk about per capita rural income, and we compare the per capita income of a particular state with the per capita rural income of the nation.

And these are the three

Rural population, rural out migration, or...

or growth rates below the national average as well, and growth per capita income.

In terms of federal restrictions on these funds, there would be no requirements for manning or maintenance record by the states.

There would be no federal prior approval of plans or projects.

The only process to not refer to these funds is no strings attached, because there would be two important strings.

One of them is guaranteeing that the Civil Rights Protection Act would accompany our present categorical grant funds, would accompany these funds, and secondly, that there would be proper auditing provisions to make sure that funds for rural golf are used for proper public purposes.

Thank you.

I think it might be well to take a little look at the history.

Back before the turn of the century, the Congress did establish federal funds for the agricultural experiment stations and made them available to the states for this purpose on a formula basis.

Some money for all the states.

This has been modified and increased through the years.

This has been the bedrock under which this great increase in agricultural productivity has taken place in all the states.

We have the very strong, professionally competent research programs in 50 states today.

Now, the alternative to that would have been to have, in fact, in the time of World War I or any time since, to have concentrated these funds in what might have been called centers of actions.

In that case, most of the funds would have gone to three or four states, New York State, Cornell, or Wisconsin, or a later date, California, and others.

and we would not have had this broad development in agriculture that is unique in the world.

Now we came along in World War II,

And under the pressure of war, it followed a wise decision that our initiative and so forth was intended to invest in the centers of excellence.

And this had a tremendous impact on economic development.

And the patterns of population as the country had grown, even at that time, we had a bit more leisure.

And the funds have been spread like the agricultural funds have been spread.

It's my feeling that we would have had a more uniform balance growth across the nation, and the heartland in the south would be in better shape today.

Now, back to the funds.

I'm sure in the early days some of these funds were not used well.

But through the years, they did develop competence, whether it was professional pride or institutional pride, state pride, or just getting on with the job.

Competence did develop as the funds remained available.

And I think we have to trust that the state people, that with these kinds of programs, likewise, as time goes along, they don't have it today, will develop the competence, they will respond to the problems, they will get the work done.

Yes, John.

Mr. President, Secretary Hardin has just addressed himself to the question of competence.

It occurs to me that one other question may be raised, because in the general formula, or in the formula for general revenue sharing, we have included, as I recall it in the memorandum of action that's used to determine the state that each share gets, an element which reflects the tax effort of the state.

Now, as I understand it, from the explanation I was given, we do not consider either tax effort or maintenance of existing tax effort in deciding on the allocation of these funds.

How do we do that?

We argue that we don't really thereby give the states the incentive to do what they should be doing, as well as the federal government.

Ed, do you want to respond to that?

Well, that...

With respect to maintenance of effort first, one of the basic considerations of the revenue sharing approach is that the state and locality be able to determine their own priorities.

To impose the maintenance of effort restrictions upon the state and locality takes away from them an important measure of determining their own priorities.

With respect to the maintenance of tax effort, as has been pointed out in various forums, in some places perhaps the most appropriate use of additional funds, especially with general revenue sharing, perhaps in other places as well, might in fact be a reduction in taxes.

It would just arbitrarily apply the principle of maintenance and tax admission.

It would arbitrarily, in fact, just pour more money into the existing tax, rather than to allow flexibility in terms of what the tax is.

That's our philosophy.

Mr. President, last week,

We had the committee of agriculture members down.

There were several that came from the Appalachian area that indicated some concern and apprehension.

In those particular instances, as I recall, Ed or...

Somebody was going to take a look at some way of protecting some of their programs by state plans or regional plans.

Was anything developed in that regard?

The specific point was the highway.

I explained the route here.

that with respect to some of the special revenue insurance programs, we have an intrastate distribution formula.

If I can just briefly refer to John Price's match, one of the problems with an intrastate distribution formula with respect to rural development is need to aggregate funds.

If you just have a formula, let's say, for the state of North Dakota,

That would arbitrarily distribute a certain amount of funds to each one of the counties.

Each individual county would like to choose to decide to try to build an industrial park with its few dollars that it would get out of an intrastate distribution formula.

When in fact, from really the perspective of all the people of the state of North Dakota, they'd be better off if they aggregated and concentrated

The funds they got for rural development, as they perhaps in these more rapidly growing areas, in fact, an investment there might well benefit a number of the red counties surrounding the growth center at this particular time.

That's why we are reticent to get involved in the intrastate distribution formula.

If we don't have an interstate distribution formula, how do we ensure a fair distribution of the state?

There, we were examining different processes by which a state plan would be prepared.

Here, one of the chief concerns is accountability.

If you use it too greatly within the state, then nobody knows it's responsible for the plan.

In the eyes of some, the plan doesn't have a gigantic log-rolling operation, and then again wind up with the economy more or less disproved within the state on a practical basis, with no significant advance in rural development being accomplished.

So the governor probably will have to play a key role.

We are right now studying what alternatives we have with respect to involving state legislation more thoroughly in this,

as well as ensuring some kind of consultation perhaps with cities and counties in rural areas.

So the sessions last week with the National Republican members of the House and Senate were very valuable.

We are following through on those.

We haven't come to a final recommendation from the President on that yet.

Hugh, would you like to give us a brief report as to where you all stand in the Senate?

We're not your rules.

Yes, you're not very much to say.

We are voting on the report at 1 o'clock today on the fourth closure petition.

Jack Miller has an amendment to it at this time, one which needs to serve the favor.

And the church's suggestion of accepting it, the proposal is to retain the two-thirds of any changes to rules.

Three-fifths, otherwise, if a majority of each party are recorded as favoring three-fifths, it could pick up anywhere from two to five votes, yet assuming possibly in the 57-59 area, it will not be sufficient.

This may hold me down.

Meanwhile, this may be the end of it.

There is some talk of continuing.

Meanwhile, we will tomorrow begin the discussion of the constitutional amendment, the 18-year-old vote, and other than federal elections.

And we have little else except that I understand from that.

Thank you for watching!

Mr. President, may I ask you a question?

I read in a paper this morning that at the hearing yesterday, Long indicated there may be some problem on this four and a quarter percent amendment.

Is that just newspaper talk, or is that just...

I don't know.

I thought you had any questions.

Four and a quarter percent amendment.

Well, we...

We have two bills up this week.

Extension of the interest equalization measure, which I don't think is going to have any difficulty.

There wasn't any problem in the rules committee.

And then we have the extension recommended by the banking and currency committee on wage and price control authority and the credit control authority.

There will be any opposition of significance there.

They're hell-bent on getting this authority through, and I think they make capital out of it, but they didn't seem to on that point last fall, so in light of what the Secretary of the Treasury testifies for the Joint Economic Council,

There was no objection to the extension of the story, you know, and the top of the question was repeated at this point, but both measures were voted without understanding.

I would say this, Mr. President, that probably next, tomorrow, the week from Wednesday, we're going to take up the Department of Transportation appropriation bill, which is, of course, highlighted by the controversy over the SST subcommittee that imported it out of appropriations.

There's a 72 vote that comes before the full committee Thursday of this week, and it will be on the floor next Wednesday, and it will probably be Wednesday in terms of the vote.

With regard to the SSP, recognizing the differences there are on the side here, I want to reiterate.

It's at least 150,000 jobs.

That's probably, probably...

Hei!

If you were to poll people, you'd probably find about 70% of them against you.

The reason is that we're not here to follow people when people don't know the facts, but we're here to lead the people.

And sometimes people don't know the facts.

It's just that we always follow the people, and I might say we never built the airplane in the first place.

It was a matter of fact that we would have done it before we did it.

It's a major breakthrough in terms of the inevitable, it's inevitable that people, whether it's the deal with government or it's your law, it's true.

Let's understand there's some that have bought it through, considered all the fact that you're trying to respect them.

I'll see how he does it in person.

Mr. President, gentlemen, as a background to the briefing of the two key operations that are now underway, I think it would be helpful to give you the general overview of the situation in Southeast Asia, and to show you why these two operations are employed.

I'm very sure you recall last May, after the cross-border operations were ordered by the president, and still there was spoilers, but you can see that two very important things happened.

One, the North Vietnamese operating along these Tanksbury areas lost access to this port.

Two, they also lost a very large amount of supplies of various types.

This meant that an interdiction

All the supplies brought down for their actions in South Vietnam as well as in Cambodia, and all the supplies which would be required to replace those that were destroyed here must come down from the Haiphong area down through the North Vietnam, then cross the passes, the Gia, Bangkorai, and the Ravang, into Laos,

pass down through the Ho Chi Minh Trail, where they would then be distributed at intervals into South Vietnam.

The North Vietnamese recognized this decision.

As a matter of fact, last fall during the wet season, they immediately began to reinforce their transportation capability in this very critical area right here just south of the DMZ.

Now I think I might just take one second to explain to you the nature of what is called a Ho Chi Minh Trail.

In the first place, it's not a trail.

It's a series of interconnecting links and roads all the way through this particular area.

The key transportation group that manages all this transportation is called the 569th group.

This is because it was established in May of 1959.

That will give you some idea of how long the communists have been freely operating in this area without any interruption from any source.

In other words, they've had a complete sanctuary down through this very critical period.

These supplies are managed by what they call benchmarking.

And they assemble a series of little substations a few miles apart, distributed all the way north and south down the OGMN trail.

And each tent tram is responsible for moving from point A to point B.

The point I'm trying to make is that they do not load a truck in North Vietnam and drive it all the way down to Saigon.

The supplies are frequently offloaded, cached away, then picked up again by another group of trucks, and it's kind of shuttled down in that fashion.

They use trucks.

They use Russian trucks that carry about four tons of material.

They use just the A-frame.

They used bicycles, they stopped being able to catch hundreds of bicycles, and they used a pipeline.

They had a four-way pipeline running from North Vietnam down into this area to about this point, and they had spores off of it like that, which would go into the way stations where the trucks would stop and refuel.

Now, there's another interesting feature of the old G-Man trailer, mainly the weather.

Only about six months out of the year when it is usable.

This is from about 1 October to 1 May as a matter of fact.

The roads only become roadable for heavy trucks beginning in January and February.

So this means that the major health must be forced through in a matter of just a few months.

And this is what the North Vietnamese began to prepare for as soon as they realized what had happened down here and lost access to this port.

They sent in large numbers of road builders and truck repairmen and so on together with the personnel to protect them.

And they even went so far as to withdraw some of their combat forces from South Vietnam back into this area in order to provide security for the forces that they had in there to ensure, through this bottleneck right here, that they could keep the Ho Chi Minh Trail open.

Now we began in October a very heavy air interdiction program against this movement.

And we have been very successful in destroying trucks.

Well over 3,000 trucks have been destroyed.

Last night over about 120 were destroyed in this area from just about here all the way south and down here.

A very large number, over half of them,

right north of the Chupona area, which is in the ocean at this point.

So, faced with this situation and realizing that unless these supplies could be transported at a high rate, the South Asian meetings began to look at ways and means of doing something about this area, as well as this area down here, which contained the remnants of the forces that were left from the cross-border operations.

last year.

I think you've got to realize that at the same time that the Capitolian operations were conducted, another very important thing happened.

And that is that the South Asian media became amazed that this means that they now have the capability of planning and conducting their own operations.

And don't go away and look at it to the feasibility of conducting operations of this nature.

With that in mind, then they laid on tunes

Key operations.

One up here that we call Lansan, which is in the lounge from just south of the DMZ.

The other one down here in the vicinity of what is called the Juklanation, which is north-east of Mount Denton.

The president authorized the use of American air power to support this operation.

This air power includes B-22s, tactical air, as well as helo-lift, helo-gunships, and helo-metabank.

However, there are no American ground forces in either one of these operations, and anyone that says otherwise is just wrong.

Now I will brief each operation in turn.

This operation in Laos is called Lam Son 719.

It's named after a town where a very heavy battle was fought in 1432, I think, where the Vietnamese defeated the Chinese.

But you will note that all of these operations have South Vietnamese names.

Now, let me just show you in general what the scheme and the plan has been for this operation.

First, this is a very steep highway.

It's Highway 9.

It goes all the way across the northern part of South Vietnam, across Laos, and it actually goes into Thailand.

This, as you recognize, is the DMC.

This is the border between North Vietnam and Laos, and between South Vietnam and Laos.

And this general area here is known as Military Region 1.

Now, the plan was for U.S. forces to provide security in South Vietnam, particularly with respect to this road.

And you see these little symbols here indicate what we call blocking forces that are put up there simply as a precaution to any kind of action on the part of the North, East and East across the DNC.

At least I don't think that there's any...

Prospects of this, but nevertheless, the North Vietnamese have put forces in this general area, and they do, on occasion, make SAFA attacks and a few Barati mortar attacks in an effort to cut the transportation that goes along this highway.

About 600 trucks a day now giving support.

And in the supply situation, so far as the South Asian media is concerned, and the U.S. concerned, it's in good shape.

I just talked to a gentleman not less than 30 minutes ago.

He said they have 15 days of suppliers, and in fact, what they have to watch is that they don't get too much involved and put it in jeopardy.

But the supply situation is in good shape.

Now, with the use of the United States forces supporting the South Vietnamese and providing security for this role, a very large qualification was established at Khe Sanh.

You all have heard of that.

No way it is.

Which was permitted to bring in air supply as well as truck supply.

and also provide a jumping-off place, you might say, for the helicopters that then put the South Vietnamese into the area.

As you record, it was on 8 February that they actually crossed the border and then went again.

At that time, the North Vietnamese had about 14,000 or 15,000 troops,

In the area of the...

...next town of Schiphol, and the Schiphol River, which runs out here.

And I would like to say right now that Schiphol, per se, is not an objective.

It does not have any military significance.

It's just a tiny little deserted village.

What we understand is, of course, the area around Schiphol, where not only do we find very large caches, but also where the North Vietnamese run their trucks.

endeavour to go around this area, which in fact is the old Ho Chi Minh Trail, and we call it Highway 92.

What does that mean when they begin to establish what they call five support bases?

And here again, the idea was to provide on the flanks here security so that the penetration in through here could contain.

And I should say that there was never any intent of digging in and stinging in one place.

The idea here was to take full advantage of our mobility and our firepower from the airstrike artillery and so on, which would keep the North Vietnamese off balance, force them to more or less concentrate at one particular place, and thereby provide very innovative air targets, and this is exactly what has happened.

There have been over 7,000 now of these troops killed in this operation.

And we don't really know how many have been killed because as often we don't know what the effect of their operations are.

And I don't think we'll ever know exactly what their casualties have been.

But nevertheless, General Engels estimates that four regiments have been very badly hurt already.

The North Vietnamese react to this operation very strongly.

They have just about doubled the number of fragments they have in the area.

And they have, we estimate now, if they still have the caches, they could have about 30,000, which would be followed down to about 16,500 South Vietnamese that are in this area operating.

In general, I have color-coded the way the areas are colored.

The green is the responsibility of the very famous and best French Army Division, which during the entire war has operated here along the DMZ.

The yellow is manned by the Army Airborne Troops.

They were the ones that went in first and got so much publicity in what was called Minus Support Base 30 and Minus Support Base 31.

I point out again that these were simply forts that they had temporarily occupied.

They were high forts, listed in the MRE law, and although there was much to be told in the paper, the facts are that the northeast of these suffered about six to one casualties.

In that engagement, suddenly South-Eastern East joined up with the tank forces, which are represented by this orange color here.

This is where they are operating, and they regained the area, and they've been there ever since.

I would just like to say in this connection that we do not expect the South-Eastern East to win every battle, not by any means.

This is the first time they've ever been on their own, and they're doing very, very well indeed.

And thus was the military effect.

of this overall operation, so far as the characters and so on are concerned, must be viewed in the terms of the cumulative effect of a series of almost continuous, sharp clashes throughout this entire area.

In the blue area here, just around out the location of the Army forces, we have the Marines, the Army Marines.

During last night they had the most fighting.

You have to realize that the...

A force up into this area, south of the line, where they are doing their best to keep the one remaining road, which we call Highway 914, which comes down from the Chippewa area and gets back on the main avenue's transport down through here.

And you know that I might talk about these roads in a little bit.

Of course, the primary objective that the president set for this operation was disruption

of the flow of supplies during a period when the flow of supplies is at its peak.

And this has been accomplished to a very high degree already.

We've had all kinds of intelligence indicating that some of the units are out of ammunition.

One of them was told to fight with explosives only, despite the fact he didn't have any ammunition.

These mid-trams are moving out and having to reposition themselves

And so on.

And so the fact is, it might be very heavy, it will be long range, we will not know in total what's happened until we've had a chance to completely analyze the thing after it's all over.

Now let me just describe these roles a little bit, because as I said,

This highway 92, which comes down through here, and then continues on south, is the key avenue through which they pass their supplies.

In addition to that, they go over into the Chapone area, and can come down through here on highway 914, and continue on down, and then move into the way area of south Vietnam through this road we call 922.

As I said earlier, all of these roads have been under attack, and just last night, about 60 trucks were destroyed in this area.

They are still pressing ahead on their people to do better, and to do what you can to transport supplies,

But they have a very difficult time.

They have supplies backed up here in this northern area along where the taxes permit them to move from north Vietnam into south Vietnam.

So this is the general road complex that we are interested in in this destruction process.

We know that in this general area here, this is perhaps one of the largest base areas that exists along the entire Laotian, Cambodian, South Vietnamese border, and the South Vietnamese are working on that.

I heard this morning on the radio that they had resumed normal transportation style, but I can assure you that this is not the fact.

Now, as of this moment, we have, as you probably read the paper over the weekend, the great division is in the general vicinity of the Chippewa area, and there's nothing in Chippewa.

They've been through Chippewa.

It's not a matter of seeking and holding a point, anything of that kind.

There are no B2Bs in Chippewa now.

They've killed them all.

They've found very large caches, 2,000...

Rounds of 82 millimeters, several hundred rounds of 122 millimeters.

They found overall well over about 2,500,000 pounds of food.

They have 134,000 gallons of fuel, and they cut this pipeline, which I show here, coming down through this, and cut many, many places.

It extended all the way down to this point, and now they are being forced to transport the fuel by truck.

And this, of course, would consume space that otherwise would be occupied by ammunition and supplies.

So the operation continued last night, which was that daytime.

The weather was not too good, but nevertheless there were several operations in this general area, just contacts.

In addition to that, the South Vietnamese continued to find large numbers of bodies that were killed by air attack as they moved around in that general area.

The sharpest fight was conducted by the Marines here in this area where they managed to dispose of a couple hundred of the...

So the plans now are for these operations, these, which aim, as I said, primarily at the drugs and to contain.

Now that the South Vietnamese

pretty well situated in this very key area.

Now, there's been some talk about, there has been talk about bypassing the operation to the west.

This is highway 23, and I don't show you all of it.

I should have pointed it out on the other chart.

It turns around and comes back down here and goes on south.

But the point is that there's no road suitable for truss that will permit the north-eastern majors from coming down this road and then getting back on the main highway again.

And so that, although there has been some truck traffic observed here, very minor, 10 trucks a day or something like that, sometimes each with soldiers in it, we don't think that the transport that can be moved over Highway 23 will be too significant.

So, there's another aspect of this operation which I think is best noted, and that is that the North Vietnam have been firing missiles from North Vietnam into Laos, and from North Vietnam, on one occasion at least, they fired a couple across the DMZ.

In addition to that, in this general area of Chiffon River, they fired some unguided rockets one night, and caused quite a bit of discussion on the part of the pilots nationally, because a rocket at night is quite a spectacular event, particularly if it's hit towards you.

But we determined that...

These were not guided rockets.

They were simply unguided rockets, and they were just 140mm sawed, and I guess they were fired in desperation.

But of course, so far, fortunately, we've had no planes hit.

Right inside the Baskerville Pass, which is just here, they established for the first time a rocket site in the Lameb House, and...

This was possibly hit by a tactical aircraft and was made an inspection.

I should also point out another interesting feature, and that is the use of tanks.

The North Vietnamese have brought a large number of tanks down into this area.

They have three kinds of tanks.

They have what they call the PT-76, the T-34, and the T-54.

The PT-76 is nothing more than an armored amphibious vehicle.

The T-34 and the T-54 are heavily armed tanks.

However, the South Vietnamese have also put their...

N41 tanks in here, and the tactical aircraft have done a great job on these tanks.

So far, the North Vietnamese have lost 93 tanks, and tank operations have intention to thank them.

So I can certainly say that the operation is certainly going well, bearing in mind that the South Vietnamese are fighting in an area in which the enemy has been located for about 11 years.

They are out on their own for the very first time.

They have no American advisors, so they have to make their own decisions.

And they have it without exception, off-well and off-IUL.

Again, we don't expect them to win ever gravel, and you'll probably see a couple of crises and a headline for the big one.

But I want to point out to you that the way this terrain is formed, and I'll show you a topographical chart in just a minute, it's clear that there's not going to be any such thing as a dead man's food.

That really is ridiculous, because, again, it's just a series of strong points

They occupy it for a while until they serve their purpose, and then they move on to the next one, using this key load lift.

We expect continued harassment of this road.

This took place last night.

For instance, we have had trucks fired upon.

and normal type of ambushes, but we feel they can handle that.

We've spent rocket fire on Kinshaw.

There's already been a small amount.

Nevertheless, General Abrams and General Sullivan, who's in command of this area, are well aware of this.

They've been up there a long time, and they've taken, in my view, every precaution that a true military commander can take.

So, the idea here is to continue the operation.

The South Vietnamese will decide, as the president chooses that, the limit, the scope.

Of course, as a practical matter, he will be limited by wealth, because, something good to me, this area particularly here gets to be nothing more than a quagmire.

I know the area down in here remains dry longer than it does up here because the weather in this area is most peculiar in the sense that it makes a depth shift back and forth, and the South Vietnamese will probably withdraw back through this area, at least some of them will, in order to, again, contain and disrupt the supplies that might have been put here before this operation was conducted.

So much for the Lansan operation.

As I said last evening, the activity was widespread, but not too loud, except for this one place right here where the Marines are fighting.

If you would like some statistics, I'll be happy to list some, in the sense that recognizing that, of course, these are subject to confirmation and are continually updated, but...

By and large, as I said, there are 7,044 reported killed against 455 of the South African nations.

They have lost 2,443 weapons, 2,869,000 pounds of rice and food, 134,000 gallons of water.

They have lost some 95 tanks, and the South Vietnamese have lost 8.

Most of the tanks have been lost by the North Vietnamese have been due to tactical death threats.

There's been quite a bit in the papers about the loss of helos, because the helos have been operating in a very difficult environment from an AAS point of view.

But I just had some figures

and reached the proportions that one would, beyond which one would expect an operation of this kind, and beyond the experience we've had in the past, understanding the circumstances.

Fortunately, in most cases, the crews have been rescued.

And therefore, there's been a very little loss of life, relatively speaking.

So...

As I said before, this operation will continue on that vein with the objective of disrupting this flow of supplies, and we feel, and we are confident this will have a very serious impact on the capability of the Southeast and the East to conduct operations this year and next year, too.

And consequently, it should and will serve to facilitate our plan for reducing U.S. involvement and withdrawing U.S. forces from Southeast Vietnam as the visualization program, or that is, as the strength of the Southeast Vietnamese continues to grow.

And that's what this operation is all about, gentlemen.

And in my view, it is well aware of the evidence, and well conceived, and...

I think that history will show that this was a very useful operation.

Now I may turn down to Cambodia.

This operation hasn't been getting anything like the publicity that this one has, simply because all of the 150 or so reporters in South Vietnam dashed madly up to military Region 1.

When both of these operations started at the same time, they hadn't seen fit to sit down and take a look.

But here again, to orient you, this is the main front row.

Right here.

And this is the South Beach community Cambodian border.

This is the famous Parris Beach where we conducted the operation last May and June.

This is the fishhook that you heard quite a bit about about eight or nine months ago.

And this is what is known as Highway 7.

There are generally seven highways in Cambodia that revolve around South Bend.

And they go clockwise 1, 2, 3, 4, 5, 5, 6 going to Thailand.

And you get around here to 7 coming over to the northern part of South Vietnam.

And this is a very active area for the North Vietnamese.

As a matter of fact, after we conducted the cross-border operations here in the Fisher area, three of their key divisions pulled back,

...into this general area, in and north each of what is called the Chuk plantation.

This is the biggest rubble plantation in Cambodia.

and the divisions of the 5th, 7th, and 9th.

And they have been there ever since the Cambodian operations were conducted last year.

They haven't been too inactive.

They have conducted some veronic mortifying, things like that, against the Phnom Penh airfield, for instance, and against Khong Phong Cham, a little city right here.

But by and large they've been inactive, I guess because they're waiting

for every spike to come down through the whole G-men trade.

And consequently, the South-East Namese decided to mount this operation to sweep out and clear out this area, so that they would then eliminate this threat of the North-East region coming across the South-East Namese waters, moving back, coming back, and making strikes against our forces and our facilities in this general area of what is called military region,

3.

This is Saigon right here.

This is Mount Penn.

Highway 1 is the key road that goes from Saigon to Mount Penn.

So the southeast main mountain operation, which is a consent of about 17,000 men.

They have been operating along Highway 7, and they have been all the way up to Geelong.

I think when this operation is over, it will probably extend several more weeks that these divisions will be...

...severely hurt, and their logistics posture will be severely hurt, and this again will contribute to the safety of our forces in South Vietnam.

So, ladies and gentlemen, that's what these operations are all about.

They're being conducted on the ground solely by the South Asian East.

The South Asian East have gotten the best of practically every fight that they've been in, in this operation and also in the Lamsan operation.

And I think that there's no question about the fact that the...

And that long-range effect will be to certainly improve the security of our forces, facilitate the withdrawal program, and contribute to the strength of the South Vietnamese so that they can stand on their own two feet.

And things are going...

Mr. President, should I ask a question?

Our old news media admiral keeps talking about the number of US helicopters lost,

I have heard it put in proper perspective relating to the number of sorties.

I mean, you said there were 47 lost and lost 54 overall.

How does that relate to the number?

I think it's .56 to 1,000 sorties.

I don't get those exact figures for it.

But as I point out here, if one looks at the numbers of sorties...

No loss, of course, in distress, but look at it from a point of view of what one might expect.

They're actually alone.

They made thousands and thousands of tortillas in this operation.

Mr. President, I have a further question about the rescue crews.

Could you give any ballpark percentage or anything like that of how many of the percentage of the crew were rescued?

Well, not only are the crews rescued, but also the aircraft themselves are frequently rescued.

As you know, we have these flying crane aircraft that recover the helos.

Now, so far, I'm running a show that we...

have lost 32 Americans and eco-crews in Laos.

Just yesterday we had seven missing.

They turned up in good shape and they were all repelled with no injuries.

So this is a fluid situation and we have to conduct these rescue operations.

By and large, I would say that something like

Well, I wasn't going to give you a double, but I'll get you one.

I was going to estimate 15% or something like that.

15% are lost.

Yeah.

If that was your question, 15%, I'd lay it to the total number of people.

But I don't think it's high.

You must remember that the North Indian media has been there a long time.

They have not only have their own anti-aircraft organization, but for this operation they've directed everyone to get a gun, so to speak.

And this is why I think it's the, because we went down the...

I'd like to pass this around, if you'd like to look at it, because...

You see, it shows how rough this country really is.

And it shows that, you see, the South Beach communities have established these fire support bases along these high points here.

Now this is the Chiffon area, right here.

This is the intersection of Highway 92, which is really the mainstream of the Ho Chi Minh Trail.

This is the Highway 9 that I saw you coming out of South Beach now, and moving across Laos into Thailand.

And this juncture hill of Highway 9 and 92 is a very important point.

And so far, of course, the South Beach Bay has completely cut that.

There's no trucks.

Going down this way, there's no trucks on this road at all.

Now, the South Vietnamese are now moving down into this road, we call 914, and they're just gradually squeezing this whole thing off.

And this is the Highway 23 that I mentioned to you.

It goes out to the left, but as I mentioned, there's no access by vehicles from here over to here.

When they get down there, they get down there into the Saravane area, Boulderman Flat Coat,

And that's it.

That's as far as they go.

And then they have to hand over the material over to the distributors further south, into South Vietnam.

Mr. President, once this is done, if you chose to visit an audience, I mean, if it was ready to be, if it was going to increase their age, if it was going to be a first sectional, if it was going to be a second,

Teksting av Nicolai Winther

Black heavy furniture and a very small table.

And they were all sitting around on the outside.

So the president gave the table here first and now they give it to me.

They order another chair.

No, I can't.

I tell you how fabulous this city is.

I love this.

Oh, this is arriving.

Yes, this is what happens.

See, they have the

I want to entertain them, but this isn't an official state visit so they can have an official state dinner.

Most appreciative of what the government has done.

Family and the other people involved.

Half of us didn't get to talk to each other.

Mr. President, that connection I noticed was that somebody who showed us a story from a Boston paper criticizing what the president was saying, that we had decided to put the passengers on the plane, but it's absolutely false.

I don't think anything could have been handled more appropriately.

Mr. Young made the decision, but the plane is laid down, and the plane is laid back.

We got in touch with her right away.

We got Barbara Watson, the Bible notifier, saying about her death and that she was affected by it, so it was a nice shock.

But I think the third thing I've seen is that it will come on absolutely.

In fact, that's the reflection.

And I think any criticism we get about it will stop right away because it's true people think that.

Yes, we will.

I just thought it was a disaster.

I was just stood by a lost neighbor.

Just said that Nancy Clark was stupid about the way we handled it.

She did?

She did.

Sounds like we did well.

He was an honest reporter.

Yeah.

Well, that's it.

We're here at 30 minutes for Mr. Dolp on that subject.

That's right.

No, I did it.

All right.

Well, I do want to enjoy it.

Well, there's a great effort going on in this government, sir.

And if your case is about to recover that, you know.

This week, 119 different administration officials will be talking to different groups, one person to the other.

As you take a look at the basic situation, you have a majority of members of Congress still sitting on the fence.

You don't have many against, but you don't have a majority for.

A majority are still sitting on the fence in both houses.

I think the...

The basic problem is the number of minority groups, and I include the economic groups as well as the racial groups, are inclined to oppose and some of them in active opposition.

The problem is going to be to reduce their opposition as much as possible by the way in which these special revenue sharing bills are finally formulated.

And then to go out with a massive public campaign to develop public support, because as far as I can see, the one way to overcome the resistance of those who benefited from these categorical assistance programs in their national administration is to build up that massive public support to register with Congress.

Unfortunately, the National Governors Conference has taken the lead in helping to set up this National Citizens Committee, headed by Governor Strandman, former Governor Brewer of Alabama.

Unfortunately, this National Citizens Committee, which is a very represented group, including mayors like Stokes of Cleveland,

has received very little petty attention.

I didn't know about it until I went over here to talk with Morgan and the fellows that worked to help get this set up.

But the National Citizen Committee was set up at a meeting called by Governor Scott of North Carolina and then, you know, Fulton of Virginia.

And the purpose there is to get the governors through the

country and the mayors to set up citizens groups in each state to go to work, to develop public support, and to educate people with expected sums and programs.

Thus far, only two state citizens committees have been created, but other governments have indicated they're going to establish them.

They have created a staff, and the

The staff man who's here in Washington is the former Veterans Administration head under Eisenhower, a competent man.

And he and the governor's conference, the staff man, are following up with the governor.

They've provided them up to get these citizens committees organized.

I think we need to do everything we can to encourage mayors and other local officials to vote for these citizens committees and then to make them as effective as we can in getting public support.

Now, the congressional liaison people are undertaken to identify the position of each member of Congress so that there can be a determination of the states where the greatest effort needs to be put forth in order to influence the position of the congressional delegation.

And with the help of Deb Mori and his staff, the strategy is being developed both with respect to the general record-sharing program and achieving it, and also the special record-sharing program.

So I think at this stage, a good deal of effort is being put into it, but it's going to take a tremendous public selling card, in my opinion, and the expression of public support to overcome some of these resistances of the expression of selling today.

We don't see an alternative plan listed as impossible.

The alternative that they have is to spend the money like...

I wonder if there's enough steam behind the whole idea of general revenue sharing to resist having to go to other means?

No, at this point, that's not certain.

As a matter of fact, the indication is that Mills himself has made them out with a combination that would consist of family assistance, and a couple with some from the General Revenue Service.

That would be a two-fold approach.

But he's working on it.

And of course, there are odds that...

I think one of the most significant things that's happened is this shift in position on the part of Burns in Missouri.

as a result of your meeting in Des Moines.

He had previously been advocating support for the welfare approach of mills.

He talked to mills when it was done.

After hearing what mills had in mind, and after hearing of the programs in Des Moines, he came out publicly for revolution.

But if you take a look at these various alternatives, including the one that John Burns set out today, he talked about tax credits.

Well, the problem with tax credit is that a number of states can't tell you how bad the tax credit is, of course.

It would be some time before states or cities, in most cases, obtain any relief.

So, from a realistic standpoint, I think the revenue sharing approach is the sound approach, which is what I think is going to happen.

I'm going to ask George to be among any opposition anywhere in the country.

I've been in Atlanta, St. Paul, Minneapolis, Cleveland.

I've talked to...

Editorial boards, law papers, business groups.

I didn't find any one individual among all those I talked to who said they wouldn't support it after they heard it explained fully.

Well, you've got groups like this.

You've got the labor groups like this.

You've got some minority groups that are fighting aspects of the programs.

In the case of agriculture, you've got the extension service people still uncertain as to whether they're going to fight it or whether they're going to support it.

And this gets back to the way in which their programs are dealt with.

If they're left at the mercy of the states...

They're likely to fight it.

But if they can get assurance, such as we've given cities and minority groups, that they're going to be held harmless, then I think we'll have the extension service with us.

I think it's very important to have the extension service people with us, because they're really grassroots of the country.

I agree with Murray, that whenever you spell it out, you get support.

And I think public service support can be built up.

I think as far as members of Congress are concerned, there are a lot of members of Congress who are uncertain as to how this is going to get their particular area.

In the case of our program, for example, Shirley of Iowa, he became concerned because he thought that Council Bluffs in his district might get less money than they've been getting under

model cities for urban renewal and all these other programs they've benefited from.

We haven't yet perfected the formula for all these cities who've been getting special treatment, because there are a lot of cities getting special treatment.

Take a look at it.

All them harm us at the same time treat the other cities fairly.

Now we think we're just about home, but until we can do that, and until we can present the

At that appropriate to the cities and the mayors that makes it clear that they're going to be held harmless in the case where they've had urban and urban model cities and so on, and that the others are going to be treated better than they have been like, we're not going to be able to convince them that they are.

I think Mr. President would be very helpful if you could meet with some of these mayors in the very near future, because they're making a good deal out of the fact that they've been trying to see you, and haven't been able to see you in some months, and they're getting a good deal of publicity on that basis.

I know that a member I haven't gone in to, he was recommending that while they're here next week, the mayor's going to be here Monday and Tuesday next week.

Which group is this?

Well, it's both groups.

I met with the Congress of Mayors.

I met with Lugar and all that group.

The suggestion is that Lugar, who's chairman of the Cleveland Cities, and Dave, who's chairman of the Congress of Mayors, jointly asked to designate 560 to come in and visit with you during the course of their conference.

Because they need to be...

I agree with Morrison that the more we can get out and explain the program

I think the press of these state and citizen committees can be a vocal partner to develop that support.

The press is very important, and meeting with the editorial boards seems to be a very satisfying thing, because it's evident in every case that they didn't know what we were talking about until it was explained.

And then they're responding in favor of us.

I think furthermore...

Those of us who have special revenue sharing programs need to get up on the hill and meet with our committees as soon as possible and spell out how the programs are going to operate and make certain to get theirs.

I know John's been up there.

He spent five hours yesterday afternoon here at the White House with six different committees.

It's a very good assessment of public risk.

I think it's clear that we need to press forward to get action this year because

We're not as likely to get access to these licenses.

So we could get this here, or else it's classical.

I'm not sure what you're feeling.

Do you feel about this as you did about the way you came up with the captain, the government, the organization?

Yes, sir.

I think that's all there is to be lost present to you.

Unfortunately, we have both the leaders of the committee handling the legislation.

They're both good.

This is a tough combination.

It's a little smart.

It's a little knowledgeable.

And I don't know if it's hopeful.

We can achieve everything we want, but I don't have any choice.

In other words, I have no choice but to keep at it as long as we can.

I think beyond any question, they're going to come with some kind of a substitute plan.

But the amount of pressure that's put on them probably will determine the type of substitute they come with.

So I don't have a choice.

I don't have a choice.

The point is to ask them about Joe and Sonny taking that extra $3 billion in Social Security and saying, that's a big chunk of revenue sharing.

He's allowed to do precisely that.

Then the problem with what we're discussing here is that we send the signal out to the mayors and the other interest groups and have pound mills on that point.

There's a two or three percent of time for that.

We're going to start.

By the time you get the word out and get the word back, it'll be time to hit him.

It's not an instantaneous reaction.

Today it would be too early to hit him.

But by the time you talk to the mayor, by the time they kick it around and decide what they're going to do, and begin to apply pressure back up here, by the time it would be about right that you hit him.

But he's turned into very much of a political animal this year.

He's as bad as he's going to be next year.

So if you're Rex Bach, you probably know, or some of you know better than I, but I'd say Bill is acting very, very much like this was an election year this year.

I don't think there's any question about it.

Do you disagree with that?

No, I don't.

George Bush, I live with him.

I think he's playing far golf on the political course.

No question.

It's not going to change.

You put enough pressure, and he's going to have to come up with some kind of a substitute, George, just like you're talking about.

How good the substitute is, how acceptable it will be, will depend on how much pressure he has on it.

You disagree with that at all?

No, Mr. Secretary, I do not.

I think he's coming to us with the additional 3.7 billion dollars in the Social Security package tied to the debt ceiling increase, and he's going to come at us, not directly, but supporting the Democrats to maneuver on accelerated public works, and then he's going to come at us and take away the cost of the aged, blind, and disabled under Social Security.

He's going to spend all your money, Mr. President, on the law.

General Revenue Sheriff, he's going to spend that $5,000 that he's going to give you the choice of continuing to press for a General Revenue Sheriff by breaking the line on your bullet department button or cutting other things out of the place which he doesn't think you're in a position to do.

That's what you're trying to do.

For health, good.

For good.

For position, Mr. President, I think the groups I've talked to, and I've talked to a lot of them,

All those conservation groups and the cattle groups, land people.

I think as far as the natural resources area is, there's a big groundswell for it.

Rural America.

I can't tell you about the other areas because I haven't gotten any real exposure to them.

But there really is a feeling that this will improve.

I had planned, primarily, to visit Southeast Asia, where we have post-Federal Aviation Service people who are working in South Vietnam and Southeast Asia, as well as the United States Coast Guard.

I requested the President to convene over and lead the American delegation to the Oils Dose Conference at the NATO CCMS meeting,

This question, and the date was just about the time I was to leave for this trip.

The question was, I keep on going that way, or come back and go back the other way, and we decided to keep on going, and so went around the world.

I have a little better appreciation of some of my colleagues that have to do an awful lot more traveling than I do, because we touched down in 15 countries in 21 days.

We actually visited twice.

The...

The oil spill conference, which I keynoted, was a very successful meeting.

We proposed at that conference that by mid-decade, intentional oil spills would be stopped, as the oil spillage could get from the houses and so forth, and ships, and the success of that was measured by the fact that the resolution was passed.

At that point, I myself pretended to be the first of the day, and

and then we went on about other activities and led with Cook at Maine, and we did get a resolution passed along these lines, and the International Maritime Organization is working along these lines for the present time, so we got a very successful meeting.

In addition to this meeting, of course, as long as we were going to go around in one direction,

We decided that inasmuch as we were doing a great deal of cooperative research work with quite a few nations, that it would be desirable to stop in some of those nations, whose either ministers of transport, or in some cases as in India, the Speaker of the Parliament has visited with me, to stop in those nations and develop a better understanding.

We were able to share information and approaches both in the areas of aviation security, which was used primarily at that time, as well as automobile safety and social security, together with particularly public transportation, which we have been pressing and regional planning.

The visit really allowed us, in the field of automobile safety,

to actually nail down in a probably quicker period, and I think that any international agreement, even bilateral, hasn't been accomplished, and that is that we were able to sign on this trip, and all the fact that we have established a fine relationship with the Minister of Transport, particularly in Germany, would indicate that we need to try to get an agreement ready for me as a Christmas present.

I notified him in mid-October I was going to be there on the 2nd of October, but he advanced that Christmas present the 2nd or 3rd of November.

He said that was quite an honor, but he tried, and sure enough he did.

We did sign an agreement there, providing for the building of an experimental safety vehicle in the 2,000-pound class.

We already have an order for three contractors in this country for the construction of 14 experimental safety vehicles in the 4,000-pound class, which is the class that we use mostly here.

We also were able to sign an experimental safety agreement with Japan.

So both of those countries are now working on experimental safety vehicles.

I'm very hopeful that we can sign three additional contracts with three other countries, European countries, within approximately a couple of six weeks.

in which we will be then exchanging the safety information we develop, so that they won't feel that we're trying to ram something down their throats by way of developing safety standards which they can't possibly meet, and then be unable to compete in the market here, for the same token they could very easily turn around and say, OK, General Motors, get out of here.

We have a goal, and what we're shooting for, NEO has a goal, and that's

Yes, by 1975, we're hoping that we'll be able to have a car, or 76, we'll have a car that's 30 miles an hour, you can crash into anything you want to crash into, and walk out of that vehicle without having anything but a few crashes.

By the interchange of information,

We're not duplicating the research that Jim and Japan are doing with the same program.

They're not duplicating it.

Five years later is something we'll have on the Google.

Fifty miles an hour, five years later.

We have a very, very... And this is not just a rule of law report.

This is not just a relevant possibility.

This is a very, very common possibility.

And then to encourage drunk drivers.

Because we're spending a good deal of additional money this year on our combination program.

One of the other things that we did...

I had General Davis with me, and we visited, of course, many airports.

We visited twelve major airports in addition to the six we had already visited when we took our trip with you to Italy.

And spectacular results and exchange information on air security, on anti-hydration measures.

And it was as a result of that trip that we had such a very successful conference at the State Department, in which the State Department was very, very helpful

having 81 nations represented, and even the Soviet Union coming into the meeting, finally at the last moment, more delegates, and they have now joined the International Civil Aviation Organization, which up until this time, they had refused to do.

So, I think that was extremely helpful.

We were able to meet with the heads of state, both in Thailand and South Vietnam, Philippines and Japan.

And I'd like just to take a moment about our visit to South Vietnam, which I think was very important.

I might say first, however, that there is a regional planning survey being conducted by eight nations in Southeast Asia.

Some of these nations, and I'm sure Bill will say much better than I can, in the past of having talked to each other.

As a result of one million dollars from the South East Development Bank,

And a million dollars they put up themselves.

A three million dollar transportation, regional transportation service.

Those people have been talking to each other now.

They're developing a plan to work with each other.

And this is the kind of thing which I think we are encouraging as a Nixon doctrine.

And frankly, the do-it-yourself proposition is really catching on there.

Because they understand that we're not just going to continue to feed them to...

Direct the way and everything else.

We're going to try to get people to see money, give directions and so forth, but in the final analysis, they've got to do the job themselves.

And they buy it as long as they deal.

We're not just retiring and pulling on people.

Southeast Vietnam, just for a moment, by May, I had lunch with General Abrams in Hawaii, and I went out to see my old outfitted CVs, and I talked with 28 Massachusetts boys, enlisted men,

And there are good and many other people there, not just the brats.

And this was about six months, seven months after Cambodia started.

It was, what, three, four months after it ended.

And the general reaction of the boys, and the generals as well, particularly the boys, thought it was, well, we found out before Cambodia we were fighting with two hands tied behind our back.

At least now we're fighting with only one hand tied behind our back.

The morale that they claimed, as far as I saw, was just so much higher as a result of the fact that they knew that at least those sanctuaries were the hell out of the way, and confirmed what I had learned from one of the Democratic governors that I was asked to call on the day we invaded Kempoli, and that was that one of the generals, the last day he was there, indicated, going 38 miles from where we're standing right now, the governor,

There is a sanctuary, there are four more just like it along the border.

And until we wipe out those sanctuaries, we're going to continue to kill American boys.

And this war is just never going to end.

So that was certainly, if I needed any further confirmation, confirmation of the wiseness of your decision and the very courageous action which you took there.

So I came away from South Vietnam with a feeling that we were on the right track, that the

Laos operation is another one of those things I think took also some courage, but on the other hand, if we are stopping the offensive which they would have undertaken, and are able to prevent our boys from being attacked as they would have been had this not taken place, I think that would do the job.

I would only hope, Mr. President, that not only would we be able to meet the deadline of 284,000 by the 1st of May, but maybe even down to

I happened to be speaking with a dove today from the Senate on the way back from New York.

He hoped very much that if we get it down to 250,000, he might have some very kind words to say about us.

If we get it down to 250,000 instead of 284,000.

It was a very wonderful trip.

I can't say enough about the splendid cooperation we had.

Wherever we went, we were very, very proud of some of the impacts, particularly right there in Southeast Asia.

How long did you go?

I was gone 21 days, sir, 12 countries that we acted as visitors, so it was no vacation, Mr. Frederick.

You don't know.

You get home, you don't know how to go to bed.

For a week afterwards, I didn't know which night of the day I should go to the bathroom, or eat, or anything like that.

Mr. Frederick, can I say just one word after Pope John's last remarks?

Yesterday I spent about an hour in the Pentagon in Greece, and the thing that, I think this has been overlooked, but last...

in all the discussion, is that there is no fighting in South Vietnam now, to speak of.

There just isn't any.

And Cambodia hasn't been involved in combat at all since Laos.

All the Cambodian fighting has been done by the South Vietnamese.

So, whereas a month ago everyone was concerned about was the Cambodian government going to survive, and what about now, and so forth, there just hasn't been any fighting in Cambodia by the Cambodian forces.

And in South Vietnam,

This is the time of year the enemy would normally make attacks on armed forces and on something.

So in addition to the things that the president said in his press conference, this is a very substantial benefit.

And it's overlooked.

We'll talk about what trails that he disrupted and what the cash issue was.

It's been very good.

Well, I think that's right.

One thing, though, we've got to keep in mind, and that is that they are still maintaining their level of terrorism.

Assassinations and abductions in the cities and villages have not been very much as severe as last year.

So we'll talk about the military title and overlook that and keep that in mind as well.

That'll continue indefinitely, you know, long after we leave.

The point I want to express, and we have not made enough of, and that is that while I was there, the things I was given, 562 village and hamlet chiefs, teachers, nurses, nuns, social workers have been killed, and 6,000 abducted.

You never see this in the American press.

All we see is me lie, or, you know, some of the things that supposedly our boys had done.

But what the other side has done is just unbelievable, and yet we never see about it.

I had two trips in December.

One was your invitation to Nicaragua.

The interesting thing about that is it would have been successful without any effort because the main thing that came over the line was the display of someone from the United States in this country.

He was negotiating at the time with the political opposition for some kind of arrangement to modify the fact that he could no longer under the Constitution run for re-election.

Some of our discussion was on that.

Most of his actual business problems relate to the Central American Common Market.

which then was in a tenuous state and since then had gotten worse and worse because Honduras had withdrawn because of their fight with El Salvador.

I told him that there was no way in which we could take his side against any other country that could support the central company in our common market.

And he encouraged it, gave it technical help, but he had to fight his own battles with his neighboring country, and he understood them pretty well.

The basic...

conclusions I would get out of that is that Nicaragua is probably closer in its thinking and its relationship with the United States than any other country in Central America or Latin America.

Their investment policies are open, their trade policies are about liberal and open as they can be, and Somoza has an interesting approach to his economic development, which is somewhat different from what I saw in most of the other countries.

looking totally at industry and export trade, he's been trying to build a diversified agriculture and has introduced seven or eight very significant crops in substantial quantities for export.

So the idea that if we can develop a diversified agriculture first,

and then induce industry to come into the country, he will keep the masses of people from swarming on the cities, because there will be a good way of making a living on the farms.

And he seems to be making it work, because the cities have not grown, and the per capita income on the farms has gone up very materially.

Beyond that, the only point I want to mention is, I learned yesterday that he's going to be here in June, which is the 25th anniversary of West Point, for his graduation.

And, well, it doesn't work out for Washington.

His 25th.

The second trip I took was to Kenya over the Christmas holidays, with a stop in Spain, scheduled on the way back, which I was forced to cancel for personal reasons.

Bill was in Kenya last year, so he knows the current situation.

I think what I might say would be of interest only because I was there also 23 years ago and several times in between.

I have a feel of the change there.

I was obviously there before Mau Mau and before independence.

And I would say that in one generation it is an incredible thing to see how much a country can change because 23 years ago

Nairobi was a small town and hyenas came in at night to eat the garden.

Ten miles out of town there were wild animals all over.

And driving up the road north from Nairobi was a dirt road, only passable part of the year.

You could see animals on both sides of the road all the way.

Now Nairobi is a big modern city.

A beautiful, beautiful city with Hilton and all the other hotels there.

The peculiar huts have been exchanged for concrete houses of various types.

Buildings have become cities, and the economic development is very impressive.

North of Nairobi today, you go for 100 miles alongside tremendous wheat fields as far as the eye can see.

They have developed a very substantial agriculture, and are in a position where they'll soon be able to export agricultural products.

Five years ago, there was no United States capital in Kenya at all.

Today, there's $80 million, and much more coming in.

I was there to dedicate my mother to a firestone plant where they're putting in $50 million.

Education is... Well, that is owned by Kenyans, too.

As far as I know, they've done a very good job in providing stock options.

They've provided minority ownership where the local people can raise the capital.

Education is almost general now, except in the very remote areas.

I was in the most remote part of the country, around Lake Gruden, for a while.

And up there, it's still primitive, and there's no institutions.

The input mortality among the Turkanas is 70%, and it is just as primitive as it ever was in history.

But the rest of the country is getting education, is getting higher.

The road north of Nairobi is paved now for 150 miles.

The government's commercial policies are very open.

They want a great deal of trade.

We are a good customer of theirs, and they're buying more and more from us.

Their investment policies are very free.

They want capital on almost any terms, and they even give incentives for the capital to come in.

One of the impressions I had is that the caliber of the ministers is extremely high, and they're for it.

They are very high-quality people, and extremely able.

Most of them are Kukuyas.

Compared with the other East African countries, and I visited a lot of them in recent years, they're far ahead of any of the others.

Tanzania, of course, is communist.

Uganda just kicked out the communist government.

Ethiopia professes to believe in the same things that Kenya does, that their administration, their red tape, is so cumbersome that it takes a

two years to get a decision in Ethiopia that you could get in three months in Kenya.

The result is that American business is very slow in going to Ethiopia.

When I was in Ethiopia a year ago at Christmas, they were talking about a plan to set up an investment and trade center in the center of Nairobi as a joint venture between the Chamber of Commerce and the Ministry of Commerce so that foreign businessmen could come in on a one-stop basis

And the government officials would send people to meet with him right there.

A great idea.

But they're still debating it 15 months later, and they haven't been able to agree on where it should be, or who should run it, or how it should go.

There's one incident I'd like to tell about, because it indicates something more about the country, I think, than anything else I could say.

One of the stops I went to overnight to visit an American missionary that has a boy's town was Juryssen.

where they have 160 boys that are orphans of the Somali invasions.

And in the evening the district commissioner had a dinner for me at the Carissa Club.

About 95% of the people were blacks from the government agencies at one time and another.

And there were quite a number because it was the regional center for a very large region.

After the dinner I got into discussion with some of the local government people

These were local administrators, local agricultural people, local irrigation people and so forth.

The caliber of the questions and the world knowledge they had was unbelievable in a place where 20 years ago there was no education.

One of the questions that had interesting overtones that I was asked was, in view of the troubles which the United States is having with Libyan oil, is it going to affect its self-sufficiency in oil?

What are the priorities by which the United States achieves its economic development programs?

I told them they were still debating them here.

What are you doing in the United States to prevent the migration to the city?

Because this is one of our great problems as Kenyans.

How would you rationalize the differences between the parliamentary and the congressional system?

This is from clerks out in the country, which indicates they're not only well-educated, but they have very progressive attitudes and an outward look, and I think some of these fellows of the type that I met are probably going to be future leaders in the government.

As Bill knows, the great uncertainty that people talk about in Kenya is what's going to happen after Kenyatta.

My own judgment, and you may or may not agree, is that the level of the government officials is such, and the predominance of the Kikuyu tribe is so great, that they can surmount Kenya's departure, and still have good effective leadership under their one-party system over there.

Now, the last incident of my trip was with regard to Spain.

I found out that you could still get the old collywobbles in Africa.

I got them on the last day of my trip at Lake Google.

Flew to Nairobi and was so weak there that I had to send a cable to Bob Hill in Spain saying I can't take it.

I had these appointments scheduled for one day in Spain.

Bob sent a very pathetic cable back saying you've got to come no matter how weak you are.

The Spanish are very sensitive because of the trials.

The French minister canceled out.

The British canceled out some official visits.

And if you don't come, they'll think it's deliberate.

So I took a commercial plane to Athens.

The Air Force plane met me there and took me to Madrid.

I stayed in the Air Force hospital overnight.

I met the Minister of Commerce to let him know that I was really sick.

And then flew back to Lauderdale Hospital.

Mr. President, I wanted to say a word about politics.

You'll all be making, a lot of you will be making trips outside the country.

And I think it's very difficult politically to get credit for the various things that the Democrats have been saying, complimentary things about you and your ship.

I noticed Hale-Mogg and his press conference the other day, and he made a few.

We can't do anything to prevent the charge being made, except...

This is what I would like to suggest you to do.

It has to be done suddenly, otherwise you look like Jack Melendi.

But I think so.

The fact is that the president is considered the outstanding leader of the world.

Everybody you talk to will tell you that if you ask them.

And I think when we come back, if we can...

in our discussions with the public.

So we'll get that idea across.

Not that it's our idea, this is what we were told.

It's made quite an impression on us.

That sort of thing.

Because if we can develop it, it's a positive advantage.

If we can get it, now it's very difficult to go out and say it, because that's what my abortion was back when I was 10 weeks old.

I got kidded about that, about the sluggishness of it.

But I think in this case, if, on a return trip, we point that out, that that was vigorous, and it was understood by all of us, the president and the other giants, and Don, and all of us, that it's got to be done in a certain amount of subtlety, but if we can do it between now and the next election, I think it would be a great asset.

I think the tendency is, when you take a trip abroad, everybody gets a fancy view of the United States,

Rabin, the Israeli ambassador, made the strongest pitch for what we're doing in Laos, that I just wish it could have been public.

I got second hand, I wasn't there.

He was selling Arthur Sulzberger, Si Sulzberger, Woodwicker, Max Frankl, on our policy and what it meant to the Middle East.

Now, I would think that maybe that, without quoting Rabin, would be a useful thing for those who are talking...

I think that's a good point.

I do think we have to keep in mind that foreign policy is tough to sell.

An individual is not so tough.

And in this case, it's true.

Because, you know, oh, if six months from now things go bad, at least you can't be saying this down to somebody.

One thought to the President's outstanding world leaders.

It would be a great significance to the question.

Report on food structural packets.

I'd like to go back to George's comments.

I think I'm running sharing because I've been out around the country, particularly in the West.

Here I've gotten pretty bleak because two of my major constituencies, labor unions and minority groups,

I have very good friends here in Washington, but Bob James is great.

I had meetings with Los Angeles Times editorial board, supervisors of all counties in Southern California, and then a group of leading mayors.

When you talk with them,

It's an entirely different thing, and that's the place that we've got to invest our attention out there and get that back in here because these fellows are in the headquarters of the minority movements and headquarters of the union movements.

They've just invested too much attention here in Washington for too many years to make their anything except the old federal system as being the best way to do it.

We've got change going, giving an end right around it.

So much for that.

And the construction thing, I think that we're going to be coming to you in the next day or so with an idea of a subsequent step.

We certainly got their attention the way you get Neil's attention with a 4x4.

They picketed me in Illinois, they picketed me in Delcourt, and there's no question, but we've got them excited now that we can find some way to take advantage of that.

Harvey, I've still got what we want, but moderate weight increases would be a step in the path that everyone takes.

Yeah, it will have to be a voluntary action on their part.

It never would have taken them unless we'd done something like this.

What we have to have in mind is this, that I'm proud of, and I listen to what I love to hear.

Economics.

Six dollars an hour.

We're concerned about the economics.

The economics, particularly in what you might call the marginal areas where the non-union has a chance to compete in these big cities.

Big cities all the time.

One of the real problems that we have is that

an addition of $2 per hour for three years, or $6 per hour on top of the $7 an hour.

I think it was Omaha and Nebraska that just came out with that, asking for a $6 an hour increase over a three-year period.

Yeah, it's a jolly hell of a lot, $13 an hour.

Mr. President, I don't know what they, if I might be concerned, I can roll it out.

That's not a fact that the wages are going from six dollars an hour back to three dollars and a half an hour.

They may talk about that being a constraint, but that's not a fact at all.

I think it's a threat.

It's very likely.

It's just what they have stirred up, what they have stirred up, you know, they put a rumor around, but it doesn't mean a thing as far as the fact is concerned.

Although I think...

The safeguard base that you're planning to build out in is a common laborer.

A common laborer out there will make $35,000 a year.

Now this will be a 16-hour-a-week job because of the construction schedule, but with the overtime and with the hazard pay, $35,000 a year for a common laborer.

Well, the interesting thing to me about the meeting that Jim had with the Instruction Commission is that the employer is just as concerned about the union, as the union, about this action on state to state, and really concerned about competition.

In the case of labor, it's opened them up for some of this non-union competition, and the same thing with employers.

There's a lot of non-union contractors who are going to be bidding on these contracts.

And one of the disturbing things is, as far as I know, Jim, the wage settlements are just as high upon the level higher than they were last year.

Of the 15 wage settlements that have occurred so far this year, they've already been a percent more than last year.

That is 19% in the first year, 16% in the second year.

Last year it was 18%.

And the impact is spreading.

I talked, it was at a meeting where the president of the food fair was present, and he indicated that their clerks had been getting $120 a week.

They offered them a $55 increase over 18 months, which was turned down.

And on the premise that the teachers got more and the building credit got more.

And he said, I don't know that you can come.

It's plain that they're refusing because the other groups are getting one.

They don't know exactly where things are going.

So what we're talking about here in terms of getting some action is important.

And I do think this Davis-Bacon situation has created, interestingly, a greater possibility of action through your group than even the wage price freeze might have done.

A greater climate.

Yeah, a greater climate to get action.

Difficult with the wage price freeze.

There was nothing to follow up with.

You could follow up the wage price freeze with the legislative program and leave it on until the legislative program will pass.

And then deal with the structural problems in the industry.

And they say this is a hell of a courageous thing to take on the David Bacon.

There's no doubt the president would have been more than to take it on.

It was an emotional kind of thing.

We made a careful analysis of everything that's been said in the public press about this, and there hasn't been a thing in the public press negative about this.

It's always there.

What happened to the weight increases, and as you pointed out, it's still going up.

Well, we have a... That's the point, though, that there's...

Mr. President, you're talking about the NCA agreement.

That's all sham.

Those white rules have been in existence since 1958.

I would refer to those in charge as they relate to this next step that she's talking about.

What we've been trying to get them all along is to agree to get management later to come up with their own volunteer.

If you can follow that, this is pretty much the same thing.

I guess if you're licensed now, I've got some hopes.

Well, thank you very much.

We'll see most of you again, I guess.

I trust that each of you will...

Consider what I say in the light of the fact that the SSC would mean, or doesn't mean, per se, a single-handedly person.

But I ask that each of you consider, particularly on this side, whether your support, whether your colleagues, or your non-support of the SSC,

Simply on the basis of the merits of this particular program, I hope not on your issue.

I trust that you believe that the Department of Transportation and the Secretary will spend a few hours in this last couple of years trying to work out your request.

I don't believe you ought to support the SST program because it's not a good job to try to be helpful.

I certainly want to express my appreciation to all the people from the men and staff that you made during this last year when we passed practically every one of the president's transportation programs which we believe were vital to the success of this administration of nations.

I couldn't be just touching on, I think, the three major issues that we have to confront as far as this SST is concerned, which has become such an important issue.

First of all, let's take the environment.

And I notice that the opposition primarily is shifting from environmental issues.

Nevertheless, may I just say that you have one of the signs for it.

This issue should be removed now.

There are no flights going to fly over the land.

They can fly subsonicly just as well as subsonicly.

And as a matter of fact, the axle plane, the first plane coming down that runway in late 77 or 78,

They'll have every job they can do to try to furnish enough planes for five or six years just for trans-oceanic groups without having to fly over land.

But the president has made the statement, I have made the statement, and that's the rule, as a matter of fact, we need to have it in Congress that it will not be allowed to fly over land as long as we have any sign-point problems.

Second, you have engine noise.

When I first came aboard over two years ago, they were talking about 116 decibels.

I won't try to explain the decibels, you know, it's the noise factor in connection with planes or anything else that you have to listen to day in and day out.

So I'm with this detector, and we have a...

It's a little film that shows the noise from various sorts of things.

The bands that you and I hear, the detectives, they seem to be a lot higher than an SST plane or anything else.

It's one of those things where nevertheless we felt that it had to be brought down.

We decided that it ought to be brought down from 116 to 112.

When I got it down to 112, I said, well, I'm one of those perfectionists.

By that time we had decided we would establish 108 decibels for the new level 4 subsonic plane.

And I said it was good enough for the sub-sonic planes, then we just got to get it down to 180 for the supersonic planes.

Totally couldn't be done.

Just absolutely couldn't be done.

Well, they just worked like everything else.

If you try hard enough, then you have enough technology applied to it.

They did get it down to 180.

It was only six weeks ago that we were able to get down to the point where we now can say you can build a supersonic plane that will meet the same requirements that we've established for the

sub-side planes.

And that's not just our thing, and that's the Verning Committee, that's composed of scientists from NASA, from all kinds of organizations who have worked together to develop the fact that we can and will produce an engine that will get down to 180 decibels.

You've heard a great deal about the possible effects on the climate of this SST plane.

Gentlemen, I was surprised, tremendously surprised, when I spoke with two different groups of freshman congressmen, one about the 21 and one about the 23.

You know, they thought, when you ask them, you know, well, how many planes do you think this involves?

One fellow said 100, another fellow said 200, another fellow said 300.

As would you believe if I said there's only two planes involved, and two planes can affect the climate.

Two planes can affect skin cancer.

There's so much that's been said about this,

And as Bill Maguta said on the Big Cat show last night, there isn't a single scientist in this nation who has said it will produce skin cancer.

He thinks it might produce skin cancer.

Well now the fact is that I'm sure that you would know that neither President Nixon, myself or anybody else would for one moment

allow a plane to go that would kill one person from skin cancer to save nothing but about 10,000 per year as some people have claimed.

The fact is that we have a climatic impact assessment program that is going on in parallel with the production of these prototypes

and that is composed of people from the Hong Kong Environmental Fund, NOAA, NASA, National Science Foundation, you name it, so that we can be absolutely certain as we develop these prototypes

that it just is not going to do any of these things.

And I can assure you, the president has assured me, and I'm sure will assure you, that if there is the slightest doubt about skin cancer or a climatic change or anything else, we have to certify that claim within our department, through our Federal Aviation Administration,

And if for a moment we believe that it doesn't meet all those criteria, all we have to do is say, the plane will not be certified, period.

And that will be it.

Now, that is also, that position, by the way, if some of you haven't seen the statement of the American Institute of Air and Arts and Astronautics, is well documented and just as clear as it fell as far as I'm concerned.

Now, secondly, may I just talk a moment about

Talk about the word leadership, preeminence in aviation field.

Per se, you know, what does leadership mean?

To me it means a great deal, but on the other hand, what it really means is that we either do or do not want to

continue to be the leader in advanced technology, both in aviation and aeronics and in aerospace and electronics and the related fields.

You know, we've been trying to do this job here.

It's taken us many, many years in order to develop this tremendous capacity that we have now that sells 83 to 84%.

of the jet planes in the world.

Now, that didn't come just because we wanted it.

It happened because we developed a tremendous amount of technology and a good deal of it spent with defense funds, by the way.

And when anybody tells you, why any subsidizers?

Every one of the planes we're now using was subsidized in one way or another from the military spin-off.

Here we don't have the military spin-off.

We learned a few things from some of the superpowers.

military planes, but nothing compared to what is needed in order to do the job.

Now, I have said, I haven't mentioned the airline.

I didn't mention this wrong.

The president of LL Airlines

The Irish airline was in my office just a little over a month ago.

I didn't ask him for this statement.

He volunteered it.

And we were talking about some other matters, and all of a sudden he jumped on the SST.

And he told me of a statement that he made at a press conference in Paris.

Here's where he was at.

He was asked whether or not he would buy the French Concorde.

And he said, no, I will not buy, because it's right in Paris now, I will not buy the French Concorde.

And he paused, and he said, unless the United States does not build an SST, well, why wouldn't you buy a Concorde?

Because I want to buy my planes, all of my planes.

from the same nation and preferably from the same firm.

I don't have to explain the reason for that, the maintenance, the parts and everything else.

It would be much more costly for an organization, an airline, to have to have parts and all the other things that are necessary from two or three different organizations.

And the fact is that if we could start at this particular point,

We would be in one heckish international mess if the fire was telling both the English and the French and the Russians as well that you can't land in the United States with your SST without our having proceeded to build and test these two experimental test planes.

Yet we have built them, and we have tested them.

Then we're in a position to say, look, we've used our best brains, and we haven't been able to build a plane that is safe environmentally, and we feel can land or should land in this country.

The fact is that if we do this, I only do this chance, maybe just one chance at a hundred.

After all, the airframe manufacturers have now put, together with GE and others,

$250 million for this program.

By the time it's through, they will have put in $403 million.

Our competition is an entirely nationalized proposition.

England, France and Russia is entirely government money.

In our case, industry is putting in 400 million out of the 1.7 billion that it will cost to put this program across.

And the fact is that we would have a tremendous international bureau if we were to say, without all the facts that we could use if we had built and tested planes, that you just can't land in America.

I needn't talk about balance of payment.

You've heard about it.

It's $22 billion over the course of the program, and you know how hard we fought to try to bring that balance of payment up.

The president has been very, very successful in bringing that around, plus figures instead of minus figures.

Now may I just, for a moment, say that there are those who say, well, let's put this off for a while.

Why don't we just, you know, wait, see what the French do, see what they do.

The Russians now have a plane they're going to have for sale at the Paris Airshow.

They're not just dreaming about it.

Some of you may have seen a film which shows the SST.

They're going to have it at the Paris Airshow.

They've advertised an aviation weekly full two-page ad over on their whole family of planes as well as the SST alone.

We're now three to five years behind.

All we do is get further behind and make it impossible, possibly, for us to sell as many planes as are needed in order for us to get back the royalties which we now expect to get back.

This plane, if we produce and sell the 500 planes which are now anticipated,

will return a billion dollars in royalties.

It starts with the first plane we sell, and of course the royalties continue to go up as we build it.

Now, some people say that, you know, what happens if you just do get behind all of that?

The fact is you can't dismantle the group of over 15,000 people that have been assembled, who are highly scientifically oriented technicians of all types, and fields that will be able to reassemble that gang.

I know the construction of a building.

If I have to stop the construction of that building after I've taken together a superintendent, I've gathered foremen of all types and so forth,

Which is very, very simple as compared to building a supersonic transport.

And yet, if I have a strike or something that stops that job for a couple of months, I've lost the momentum.

I just take an awful long time when I start to try to gear up again to get that job going.

And you dismantle a team of this type, it's a very, very different program from not dismantling, but slowing down a highway program, or slowing down some other program,

which doesn't dismantle a great deal, but here you're dismantling a group of people that have been very, very carefully assembled, and it will almost be impossible to put it back together again.

Now let me just say that we're almost ten years down to 12-year-olds.

It's been approved by four presidents.

If we stop now, we've got to pay termination costs.

When we get through, what do we have?

We have practically nothing.

If we continue, and all that costs 134 million dollars, only 134 million to me, a million dollars is a lot of money, but here in Washington, 134 million by comparison with overall budgets, isn't a tremendous sum that I would think it would be back in Massachusetts.

But 134 million this year, 235 next year, 96 the following year, and 16 million dollars the following year, and you're all through.

Now, those who tell you that you're going to have to spend another two or three million dollars, it's going to be a tremendous overrun, you just look at the figures on this program, and I am extremely proud of the fact...

that this is probably one of the only programs that, going back for four or five years, you've had a very small increment of increase over the course of these years as contrasted to some of the other programs you and I have seen that have doubled or tripled in some cases the cost of eating pork brussels.

So I would hope that you recognize that this plane is not only essential because we feel that we've got to meet the competition for it,

But the fact is that the technological spin-off from this point is just impossible to try to develop.

And I probably would feel that maybe as important as anything here is the employment pictures.

There are 15,000 to 15,000 jobs, as Derek Brooks so well said in the final House debate,

that you just give the ticket to.

Now, that is a guessing, gentlemen, ladies and gentlemen.

That is an absolute fact.

The Boeing company in general record,

Can't keep these people for other things.

Aerospace and the airframe industry is going downhill.

And this would be a blow for which I think it would have to recover.

Now, that's only 15,000 jobs.

The fact is that you have a situation here where in five to seven years, if you don't have the whole family of planes,

You could be basing as many as a quarter of a million or a half million jobs if we go down the drain.

Not 15,000 jobs because we wouldn't be able to sell the full family of plants.

Now, I have had my gang just add up very quickly, and it was challenging to find somebody else with it.

But you try and figure out what you have to pay by way of the unemployment insurance, the loss of personal income taxes, the loss of corporate income taxes, both in direct employment, the loss of corporate and personal income taxes in the indirect jobs that are involved here.

And you can't get well above the $470 million that will be needed to build and test these two planes.

And after all, it's these taxes that support some of these priority programs like health and education that all of us are concerned about.

Let me finish by just chucking straight pockets for a moment.

The president has worked and worked extremely hard to try to turn this situation around.

We're starting to make some progress, but we've got a long way to go.

Gentlemen, I've been a Republican.

I'd like to see the president re-elected next year.

I hope he runs.

I would like to see more Republicans elected in the Congress next year, but I very frankly say to you that if we start to see the undermining of confidence in the ability to get jobs, and we start to see a slide here, which means fewer and fewer jobs in an industry where we now have the expertise and the leadership,

This could trigger a real downhill slide, and I have one hope that we just don't do that, because 1972 for us has got to be a good year and not a bad year.

I could say a great deal more, gentlemen, but all I can say is that I have given everything I have to this program, to the rest of the program, to this department.

I only hope that you realize what is involved here.

It isn't getting a jet set to

London that much faster.

It's a productivity proposition.

The British and the French and the Russians are going to have a plane that will be much more productive than we will have.

And that's the name of the game.

If you have a productive plane, you are now paying 5% less for costs in some plane rides than we spent 25 years ago because you produce more and more productive planes.

If we had stayed with a DC-3,

Instead of 3,000 planes in the sky for the United States today, you would have 43,000 planes.

And the fact is that, you know, that these planes do produce some exhaust emissions.

We've done a great job at bringing those down.

We're going to continue to do so.

And I just urge and hope that each of you will feel that this is a program that we've got to save.

And I hope that in the Senate tomorrow that we will see a favorable vote, and that when it goes back into the House through conference, that it will be present.

That's my message.

Could I ask a question?

What is the present decibel?

I would have heard differently.

The claims that you see running around now as the vice president in many cases are running 109, 110, 112.

You're talking about 108.

We're talking about 108, which is what we have now set already for a new standard for all of the new subsonic claims.

And by way of obligations, by the way, and by the way of priorities, there are those who say we've got our priorities wrong.

Let me say to you that in 71 and fiscal 72, we will put more money into urban mass transportation than was put in in the previous seven years.

A billion dollars in each two years has contrasted with 741 billion dollars in the previous seven years.

So we don't have our priorities wrong.

I think we've got our priorities right.

We're going to continue with the demand strategy because the president feels very strongly about unsniling some of the congestion and making possible transportation for those who can't afford a lot of business.

Thank you very much.

John, thank you very much.

I want to say first that I appreciate you.

It's a very controversial issue.

It's a hard battle in my house.

I appreciate you for that.

I know the purpose of this is not to go to heaven.

I believe now, if it is lost in the Senate, I will continue to say it strongly.

First, there are four arguments.

One is the environment.

The environment argument is one that is very deeply held.

It is one, for example, that influences a man like Buckley, who would normally be voting for this national vote, but who is influenced because environment is a big issue in the state of New York, it's a big issue across the country.

The environment argument will increasingly be used, sometimes in very legitimate places, but sometimes

It's not for the sake of the environment, but because of simply an urge to knock down the system in every industrial advance in this country.

So in examining the environment argument, it's very important, not only in this case, but in every other case, to see if the real part of it isn't the environment, it's the system, of course, the system.

As far as the environment argument, however, is concerned, having raised that point, which is indeed a concern of mine, because I cannot see the United States making a mistake, we must not see it making a mistake, giving up on industrial progress because of our concern about the environment.

If we do, we'll go back to the good old days when we all lived in the trees.

As far as this particular matter is concerned, it's a good question.

There is no environmental issue.

We are building prototypes.

And in building prototypes, the decision with regard to whether we go on and then build 5, 10, 15, 20, 25, will then be made.

If the prototypes indicate environmental problems, then we will not go forward with the program.

So we begin with that.

Oh, I know the answers are, you know, to start with prototypes, how can we put all this together, and so forth.

But I can say that is policy.

So if you were concerned about the environment...

The answer to all that is very simple.

It will be a motor project now.

You can argue with both sides.

I don't make the arguments on the environment.

I looked them all over a year ago and found nothing really to back them up.

Nothing really very serious.

And then again, this ridiculous skin cancer thing, that of course shows how stupid they were.

You can raise such a question, but be that as it may, on the environment thing,

It is a good question.

The second point is the economics of the program.

Now this is a legitimate argument.

It was a legitimate argument when the DC-3 was a problem.

It was a legitimate argument when we went from there to the planes that I used to fly to California.

That was the DC-6s.

I remember when the jets came along that

who were really very fanatical at that time, and Hannes, sort of looked at the British flying of jets across down to India, and didn't think I was going to make much, but I blew up in the air, and we were going to go forward with the jets, but we did, we caught up, and many of the same arguments were made about the jets, were made about this, all that sort of thing.

Go ahead.

So we went to Jets, and now we have 87% of the business in the world, as we know.

On the economics, we've looked at that right here.

It is a closer question.

In my opinion, the environment issue has moved, for the reason I mentioned.

The economics question can be argued.

Is it economically feasible?

On that, all that I can say is that, generally speaking,

Every foreign line is subsidized, every flag by the government.

Every foreign country that is in this business, the British, the French, and the Germans, and the Russians, will be subsidizing by huge government companies, and in the case of the Russians, a total government subsidy, to build for this plane.

And so when you compare that with the economics of our situation, it's pretty tough.

What we are saying here is that the starting cost is one that government at least ought to do, and from then on, this bird will fly, it's going to be able to fly, and it's going to make some money.

We've looked into it.

and that the Council of Economic Advisers studied, and that even the Science Advisory Committee studied, despite reports of the contrary.

The opinion now within this government is, across the board, is that economically, this is a good bet.

Otherwise, we would not have approved it.

We would have taken all political flak we think put this out.

The third point is that here is a real tough political problem.

Why put it in the SSD?

You've got all this money.

You've got the poor people.

You've got the hungry people.

You've got the situation about, which is in mass transit.

And what are you going to do for my city?

And how about the main project west to the south, wherever the peace might be?

That is a political point.

I accept that as one.

And if anybody wants to vote on that basis, I understand.

And I know that most votes are cast for those reasons.

I do not think, however, that if you think that true, that you will come up on that side for this reason.

We all want to help the poor.

We have enormous, enormous amounts.

I take food stamps, for example.

You know, if you talk about this administration, what we have done and what we haven't done in the field of hunger, there were three days of getting food stamps a week, and now there are 90 days.

And we go on and on and on as to what we're doing.

But...

I tell you again a little story about the Prime Minister of Bergen, 1953, Prime Minister Juno.

He was a wonderful man, still is.

He's now in a monastery, having been thrown out, but still a wonderful man.

I remember he took me into his office.

Here was Bergen, just got his independence.

He was indeed a believing socialist.

They showed me all the plans for the future of Burma.

They were going to raise, they were going to give a minimum income for all the people of the country.

They were going to provide health standards, they were going to provide schools, they were going to rebuild all the highways, they were going to do all these things, everything for people and so forth.

Here they were all in the space of five years.

And I said, Mr. Prime Minister, how?

Oh, he said, we're going to just budget appropriately.

Where are we going to get it?

All of us want to do good things for the poor, for mass transit, for the cities, for the countries, for the houses, for the rest.

We have to remember that it is.

We've got to face the cold fact.

Where are we going to get the dough?

It has to come out of something where the United States...

as a great, economic, powerful instrumentality, produces the wealth to win the tax money where we can do the job.

Now, let's look at this trillion dollar economy of ours.

Where does that come from?

Well, we have to remember that five or six of it comes from what people do in private enterprise and not in government.

Now, what we're really talking about here is that in order for us to have a $200 billion budget for defense, or all the other good things that we want to do more and more and more, we have to realize that we simply can't stand still in terms of industrial progress and in going forward on some gambles that may produce more wealth that will enable us to have more taxes,

John mentioned balance of payments.

What I am more concerned about is this.

When this plane flies, because I believe it will, and I hope we fly, and we're not flying around in Russian planes or French planes, and this is a takeaway for a moment, when it flies, it will mean a minimum of 10 to 12 billion dollars in tax revenue every year for all these good things.

The question is, where else are you going to go?

So, on the environment, it's a moving question.

But regarding the economics, better brains and minds are the economic brains that convince me that economically it will go.

Although it's arguable, and I can understand people getting on the other side of it.

And,

There, from the standpoint of, well, we ought to appropriate this money for the poor rather than for this toy that we're going to fly around in the air a few years from now.

You can make that argument about every little thing.

You can make it about space.

You can make it about everything but everything else.

My point is, where are you going to get the money to help the poor unless you go forward in something that is going to produce wealth?

How do you come to the other point?

It's going to be a courageous vote for anybody in the Senate to vote for this, and it was very courageous for anybody in the House to vote for it.

I watched the polls in the SST.

Most people are against it.

They're also against going to Jets.

If they had been polled, they would have been against the Wright brothers, and they would have been against the VC3, and so forth.

Why would we need to go into all that argument?

Let me say this, that in terms of polls and arrests, we have, it seems to me, a much greater responsibility.

I live in the United States of America at the present time.

And I can be, perhaps, somewhat mistaken.

Thank you.

is the number one country in the world in air transport.

It's one of the areas that we are still number one in, and we must remember that in a number of other areas we are slipping behind.

In electronics, the Japanese have now passed us.

Another area where we are headed is in computers.

How do we get there?

Curiously enough, a spin-off from space

Here's all this money being spent on the one in the moment.

A spinoff that nobody expected at the time of the computer thing has given us an enormous true industry, which has made us, of course, competitive for our businesses.

But let's come to this.

At present time, due to the fact that we've already made streets in the moment, and all the magic and mystery is on it,

For the present time, there is an enormous problem with homes, budget problems, city problems, problems with floors, things that really tear our hearts apart.

There is a natural turning away from any ventures like SSP or space.

At the present time, it's interesting to note that a majority of the people would oppose the appropriations that I trust you're going to vote to continue the space program.

The majority of people in this country will oppose what you vote for for SST if you were to vote.

Let's look a little further down the line.

You look over the history of nations.

Whenever a great nation drops out of a race to explore the unknown, it ceases to be a great nation.

Not now, this year, not five years from now, not ten years from now, but inevitably it does.

Times past, it was crossing oceans.

Later on, it was going into wonderings.

As far as the United States is concerned, the reason that we are a great nation is that we have, somewhere within us, coming out of all this great marvelous movement of people that make up America, we have a drive to explore the unknown.

To be number one, maybe so.

Well, so what's wrong with that?

The point that I make is this.

By dropping out of this race, it's going to do something to the American spirit.

Well, you won't pay for it in elections.

As a matter of fact, you may get a little side benefit for doing it, because you'll be helping the poor, rather than going off in this highfalutin scheme.

On the other hand, I am utterly convinced, and this is the strongest reason I feel this way, that the United States in this area

Where a plane is going to be built, a plane that's going to bring the world closer together, I can go to arguments all the time too.

So why anybody should build a plane that's going to be built?

A plane that is a dramatic new breakthrough for human transportation.

The exploration of the United States of America, the first nation in the world, the first industrial nation, the first nation in air transport, simply shouldn't drop out of the race.

We're afraid because of the environment.

Or economically, we don't think it'll pay.

Or because of our problems at home, we can't afford it.

Or maybe, in some way, we're turning in and have lost our feel for greatness.

Thank you.

President, may I just, on the way out, tell you one story.

In 1488, the king of Spain, Queen Isabella, appointed six Spanish sages to look over Columbus's plans.

You say, why the hell did they choose Columbus?

Let me tell you, those six stages came back two years later and said... Those six stages came back two years later, giving them six impossible reasons why it couldn't be done.

Professor, could I give a later illustration from the New York Times, if you will?

One of the first accidents

When an automobile occurred in New York City, the New York Times advocated the abolition of the automobile.

It holds here since it's been spread.

That's a good idea.

Thank you, John.

Good to work.

Fine.

Secretary Connolly, you all have known us.

That's the job we've done before, for various periods.

Where I got to know him, as I generally remind you, was in the field of the organization for two years.

He worked in the Ash Council.

But we really had to come down to the tough decisions, whether we would go forward with this program, which recommends, shall we say, a streamlined cabinet.

and a reorganization of many other fields.

We would probably have said that if he were right in your chair, I remember at the edge council meeting, he looked across the table, and he made about a five-minute speech about why we ought to go forward.

It was the most eloquent thing I ever heard.

He convinced me, and now he's going to convince you.

Mr. President, would you like to say something about that?

Oh, yes.

I need all the help I can get.

I'm going to take a little butter over my feet.

I get your message about the time that I have, five minutes.

Hold on.

The president has already told you that in the spring of 1969 he created the Asian Council for the Progressive Legislative.

Many of the problems we've come through.

May I just remind you that on that council, chaired by Roy Ashton, president of Lipton Industries, was Fred Keppel, as many of you know, of AT&T, Dr. George Baker, the dean of the graduate school of Mississippi Harbor, Mr. Richard Patey, McCormick, Christensen, Patey, one of the really top management consultants in the United States, Mr. Walter Thayer, distinguished lawyer,

More recently, the publisher of the New York Herald Tribune and myself, the only six of us, we built a small staff.

We undertook the charge that the president had given us to really look at this government, to see what changes and suggestions we could make to him.

We were to operate without restrictions.

honest in any way, without political restrictions, without any mental limitation, without any guidelines or standards which he arbitrarily set.

We were free to explore whatever we wished.

In the inception, and I think it's important that you realize that we don't now claim that the ideas that are part of the Ag Council were all original with us.

They were not.

We went back and studied every reorganization report that has been made in this country that we could find during this entire century.

We studied them all, including the commission reports, the price report, the Hollywood report, the Rockefeller report, and so on.

There was a central theme that ran through each of these reports.

Keep in mind, of course, these studies were made in various periods of time.

The problems of the country were different.

The way of life in this country was different.

In the 20s and 30s, what it was in the 40s and 50s, was very different from what it is now in the 70s.

Nevertheless, all of these reports had a basic central theme, and they were first.

Contrary to the view of the Congress, every report fell to that.

The power of the president should be more easily administered.

I know the Congress feels like the president frequently has too much power.

But nevertheless, every one of these reports indicated that the president did not have the means to carry out his policy in accordance with the wishes of the Congress.

We looked at that.

We first suggested that in any reorganization, we ought to start

for the office of the president himself.

That was done.

Suggestions were made to the president.

He adopted many of those suggestions.

He changed some.

He instituted the changes in the creation of the Office of Management, Budget, and all that that concept implies.

He created the Domestic Council, and all that that means.

Those changes are now working through reorganization, as you know.

Beyond that, we looked at the broader aspects of government with several things in mind.

It is important that you understand that these motivations and the very basic assumptions that we made in looking at reorganization in the first place, and they were simply embodied in what the President said last night on the Howard K. Smith show.

Number one,

The government costs too much.

Number two, it is basically ineffective and inefficient.

And number three, people don't feel they can do anything about it, and probably more important, as part of that, they don't like it and they distrust it.

Howard K. Smith, as I recall, in one of his questions last night said, Mr. President, the poll showed seven out of ten people distrust government.

I think that's probably a low figure.

There's no question about it.

We're not talking about the federal government.

We're talking about all governments.

We're talking about local, state, as well as national governments.

Now, there's another basic assumption that you have to make, and that is that there's been no essential reorganization of this government in the last decade, or the last generation, for the past 20 years.

Yet, changes during this period of time have been enormous.

Just absolutely enormous.

We've gone from 9 to 12 departments of government, for one thing.

We've gone from 27 to 41 agencies during this same period of time.

We've gone from a budget of less than $40 million to over $200 million.

We've gone from 100, depending on how you split them out, but we've gone from 140 programs and subprograms to over 1,400 programs.

during this period of time without any central reorganization of the structure of government.

Now, many of you were here during this generation when many of these programs were passed, and you can answer for yourselves how much time you devoted to the basic structure of government through which these programs were going to be administered.

Given these basic assumptions and the feeling, a very strong feeling, that's me.

We were not going to concern ourselves with the concept of the programs themselves, but the administration and the execution of those programs, which in our judgment is what's killing it.

The program, this is what forms the basis of discontent, the dissatisfaction on the part of the American people with government, simply that they don't understand it, they don't know how to come to grips with it, and they don't know where to go to find out.

And I submit to you, there's not a man around this table who can explain it to them.

Not a single one of you can.

You can't tell them what programs there are or who has them or where they should go to find out.

And now that's basically what we were confronted with when we started talking about reorganization.

So in summary, I obviously can't go into this whole thing this morning.

Let me simply say to you that there was no...

There was no basic thought of politics involved in the concepts that we came up with and we recommended to the president.

We were reaching for a basic structure of government through which programs could be administered so that people might understand them, might benefit from them.

Now, we decided in the final analysis that in order to achieve the objectives, we basically had to reorient the administration of these programs on a functional basis.

You know better than I.

You've lived with it.

You don't have any different departments concerning the elements of education, of health, of manpower training.

You don't have any programs that are as safe as federal government administers.

I don't need to draw you horrible pictures of how bad this thing is.

We did do one study out here, a little town on the border of two of our states nearby.

And here's the mayor of a town of less than 5,000 people who was trying to understand what was happening to him and to his community and how he could best serve his people.

So he made a survey and when he finished he found that he had, among other things, 12 different planning agencies that he had to work through.

12 of them.

He had no staff to do it.

No way he could utilize them.

All the planning was available to him, much less the programs.

He couldn't even keep up with the planning that was going on.

Now this is happening all over the United States.

It happens to mayors, it happens to governors.

I know, I built a staff of twice as large as any governor in my state had ever had before, and I couldn't begin to keep up with what was going on.

I didn't know then, and I don't know now.

What programs are available.

I was as much in the dark as members of Congress are.

Or even today.

And I say this very kindly, and I don't say it critically.

I just don't think it's one of the years that knows.

I think we have to face up to the fact that when you go home, you don't know who to tell to even go see.

You can't tell them to go see your governor, your county judge, or any federal office.

You can't, because no office can tell us who handles one problem and who handles another.

And in one case, your regional headquarters for one agency will be in Dallas, Texas, and another agency in the same region will be in Denver, Colorado Center.

And not many people take it forward to travel all over this country to try to find an answer to a problem that they have.

So we decided that the only thing in place

The thing that made the most sense was to try to break it down on a functional basis.

So the matter is that some of the major departments of government, the key four departments of government, we think it makes sense.

I won't attempt to go into all of the details of it this morning.

Let me say at the outset that I will be the last person to tell you this.

that when we tried to make these divisions, what would go into the Department of Community Development, Department of Natural Resources and so forth, that we weren't endowed with infinite wisdom, that we can't say that every single element, every single sub-agency, every single program that we put in these four major categories was heavenly ordained to be at that particular location at this particular time.

But we did at least make the best approach that we possibly could.

We submitted it to the president.

He made some fundamental changes in it.

We spent hours going over it with him to attempt to answer his questions, which were many.

He has, with this modified program, sent it to Congress to look at.

We know full well that it crosses a lot of party lines in terms of, not political party lines, it crosses a lot of party lines in terms of special interests.

We know that it's going to cause some concern among many of you who serve on the various committees.

You're going to be concerned about whether or not this does disrupt your committee work.

It does cause some concern among the various interests that are served by programs, for instance,

I know one classic that I can give you, the Extension Service, is very, very disturbed by all their county agents now, riding around the country as they're disturbed by what's going to happen to the Extension Service, both in revolutionary reorganization.

And they manifest, I think, a concern that a great many people are going to feel.

And anytime you reorganize anything, you know better than I that you're going to get some squeals from people.

Because after so long time, no matter how bad the program is, there are a certain number of people in this country that want to protect the status quo.

And this really gets us to the heart of the argument behind this reorganization.

You can't be in a position to protect the status quo.

Now, I have to believe that there's a very fundamental thing involved in this country.

Just as the President is talking about

The fundamental duty and obligation that you have with respect to the SST and White Leans, not for today and tomorrow, but for decades ahead.

You have a very fundamental responsibility here in trying to reorganize this government to where it becomes an acceptable, intimate outcome.

Now, we're in a time of transition, we're in a time of change, there's no question about that.

You see it on every hand you have here, and I don't want to inject myself into the SST, but it's absolutely inconceivable to me, unbelievable, that this democracy would not support two prototypes in the SST.

Unbelievable.

At a time when we're sitting over here right across the lawn in the Treasury Department worrying about the balance of payments, when you sit here and see over the period of the life of the production of this plane, you have a net gain of $22 billion, and when we sit over there facing a $10 billion deficit, last year the official settlements from the bankers that sent from Europe are worried about what kind of a government we're going to have.

These are the very fundamental...

...facing a $10 billion deficit.

Last year, the official settlements from the bankers in Central Europe are worried about what kind of a government we're going to have.

These are the very fundamental... ...don't even go to sleep...

You can't tell them to go see your governor, your county judge, or any federal office.

Because no office can tell them who handles one problem and who handles another.

And in one case, your regional headquarters for one agency will be in Dallas, Texas, and another agency in the same region will be in Denver, Colorado, Senator.

And not many people think they can afford to travel all over this country to try to find an answer to a problem that they have.

So we decided that the only thing that made the most sense was to try to break it down on a functional basis.

So the matter is that some major departments of government, the key four departments of government, we think it makes sense.

I won't attempt to go into all of the details of it this morning now.

Let me say at the outset that I will be the last person to tell you that when we tried to make these divisions, what would go into the Department of Community Development, Department of Natural Resources and so forth, that we weren't endowed with infinite wisdom.

We can't say that every single sub-agency, every single program that we put in these four major categories,

It was heavenly ordained to be at that particular location at this particular time.

But we did at least make the best approach that we possibly could.

We submitted it to the president.

He made some fundamental changes in it.

We spent hours going over it with him to attempt to answer his questions, which were many.

He has, with this modified program, sent it to Congress to look at.

We know full well that it crosses a lot of party lines in terms of, not political party lines, it crosses a lot of party lines in terms of special interests.

We know that it's going to cause some concern among many of you who serve on the various committees.

You're going to be concerned about whether or not this does disrupt your committee work.

It does cause some concern among the various interests that are served by programs, for instance,

I know one class that I can give you, the extension service, is very, very disturbed.

All their county agents now are riding around the country.

They're disturbed about what's going to happen to the extension service, both the revenue sharing and reorganization.

They...

Manifest, I think you're concerned that a great many people are going to feel.

And anytime you reorganize anything, you know better than I that you're going to get some squeals from people.

Because after so long time, no matter how bad the program is, there are a certain number of people in this country that want to protect the status quo.

And this really gets us to the heart of the argument behind this reorganization.

You can't be in a position to protect the status quo.

Now, I have the ability

It's a very fundamental thing involved in this country.

Just as the president is talking about the fundamental duty and obligation that you have with respect to the SST and what it means not for today and tomorrow, but for decades ahead.

You have a very fundamental responsibility here in trying to reorganize this government to where it becomes an acceptable, intimate outcome.

Now, we're in a time of transition, we're in a time of change, there's no question about that.

You see it on every hand you have here, and I don't want to inject myself into the SST, but it's absolutely inconceivable to me, unbelievable, that this democracy would not support two prototypes in the SST.

Unbelievable.

At a time when we're sitting over here right across the lawn in the Treasury Department worrying about the balance of payments, when you sit here and see over the period of the life of the production of this plane, you have a net gain of $22 billion, and when we sit over there facing a $10 billion deficit, last year the official settlements from the bankers that sent from Europe are worried about what kind of a government we're going to have.

These are the very fundamental things.

That you have to concern yourself with.

This reorganization is a very fundamental thing.

And you can have a thousand reasons why you ought not to be part of it.

You can say, this little program and this little program, we think it ought to be here, we think it ought to be there.

If you approach it from that standpoint, reorganization is dead before it starts.

But if you will look at it from the standpoint of what is your responsibility?

What is the responsibility of government?

It's not just to conceive and pass programs.

It's to try to see that the effectiveness of those programs is of the highest order.

That the benefits reach the people for whom the programs were initiated in the first place.

And it's done in the most economical fashion.

That you do it in such a way that you build a basic trust for people in this country to tend their government.

If this trend continues, if we continue to have 7 out of 10 people or 8 out of 10 people who live in the United States who seriously question the integrity and the honesty and the capacity and the ability of their officials, local, state and national, I assure you, you're going to have some changes, all right.

You're going to have changes in the very structure of government, but it's not going to be brought about in an illogical, reasoned fashion that the president's trying to bring it about.

It's going to be brought about in a revolutionary way, but it's not going to be his type of revolution.

Because you can only exist when you have a government that is so distrustful, and in which there's so much dissatisfaction rampant throughout the country.

So what this reorganization plan does...

It simply puts you on the side of the angels, very frankly.

It says to your constituents and to the world that you're not happy with the way things are going.

You're not here tinkering with the concept of any program.

You're simply saying we're going to take this program, we're going to change it up, we're going to reorganize it, we can make it more efficient, we can make it more effective.

And we can put it on a functional basis to where we know who is responsible for manpower training.

We know who is responsible for education.

We know who is responsible for water resources development and so on.

Now you say, well, these departments will be too big.

This is not a problem.

Size is not a problem.

If you can structure it in such a way that you have the substructure over which you have some control,

Now, the final analysis is one of the whole that I want to touch on.

And that is simply looking at this government and looking at the executive branch of government.

I think there are certain very fundamental things that I'm concerned with.

Number one, you have to be concerned with this office, the office of the president.

It has to be able to function.

It has to be able to function in such a way that the policies of the president can be carried out.

It has to be organized in such a way that he can delegate authority with some knowledge that his policies are going to be faithfully executed.

Now, by the time any man becomes president, he's come up...

I don't remember the expression he used last night, but I thought it was quite graphic.

By the time he reached the top of the green pole, you've gone up and you've gone back.

You've taken a few steps forward and been pushed, or knocked a few steps back.

So any president has to be careful about what he does.

He knows he lives in a political jungle.

He knows that if he doesn't have people around him, he can trust that the structure of government, the mechanism of government is not such that he can delegate authority.

He's not going to do it.

The effectiveness of the presidency itself is at stake here in trying to provide a structure through which he can work and carry out the will of the Congress in administering these programs.

And it's that fundamental.

a problem that you are approaching when you talk about reorganization.

You have to provide a medium, a means, a mechanism through which your policies, your mandates executed by the president can reach the people of this country in an orderly fashion and in a fashion that all of you can be sure is constant with your concepts

and with the president's policies in Washington.

That's about the background of this whole problem of reorganization.

I don't know anything that you could concern yourself with more fundamentally than reorganization and that revenue sharing this year.

But when it comes up, I say to you, as I did a moment ago, that it's obviously something that you can put aside.

It's obviously something that you can find a thousand things wrong with.

But...

There are also some very, very good, sound, fundamental resources.