Conversation 114-001

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Thank you.

Don't worry.

If you go with me and follow what I say.

I'm going to stop and see my daughter at least a few times a month.

It was a hard night's work.

It was.

I know some.

They're on this side.

Oh, yes.

That's good.

We have today two items.

The first item has to do with the vice president's report.

What I'd like Ted to do is to give

The other thing that I think is important is

is for them to realize that they're very important to the economy, and that we have a very different economy in terms of really deciding how to make sure that we stand in order.

Without, of course, one minute of security material, it would just be an armistice.

in the press when it's over.

Well, let me say before you start, though, but I have to see.

So I encourage this.

I have to see a certain number of songs.

And I'll walk out and talk to him for 30 minutes.

And I'll be back in probably 20 minutes.

And you'll go ahead.

You'll follow this.

You'll remember a guy from our year.

Take it.

But I found this to be an extremely helpful report.

It's not going to lead you to say to the Vice President

So we didn't get a lot of display, but it was kind of a trip.

It was an armistice, but it reassured our friends, learning more and more and so on, learning what our problems are and so forth.

And as I did on the A11, they had to be taken at a time when it was necessary to be properly done.

So that's why we planned to get the executive back with.

I have a whole catalog here because it involves our future board, also relates to economic relations and a number of other things.

So that's cool.

The second part incidentally, the second part, Mr. Miller, is with regard to George Goldstein.

We'll try to look at the international situation

to us .

I always say this .

But then, the part that's particularly important to the camp is .

I just wanted to say that we got a family of course from every country where we visited.

343 had .

So I'll step up.

Okay.

So gentlemen, just to get this trip in the proper time frame and geographic context, it was about 12 days and included eight nations, all contracted in a rather small area of Southeast Asia.

There were five ASEAN countries, ASEAN being a confederation, a regional cooperative confederation,

mostly for economic purposes, involving Thailand, Malaysia, Singapore, Indonesia, and the Philippines, plus the three Indo-China countries, of course, excluding North Vietnam, South Vietnam, Laos, and Cambodia.

The way the trip was outlined, the itinerary turned out to be a very good one because we hit the countries that had been more or less ravaged by the war first and were able to, as we went through the ASEAN countries, those who are committing insurgency and some political upheaval in China, their economic situation, so as to resist that.

I was in a position to give them a very up-to-date overview of what was happening in Vietnam and West Cambodia, which they were very interested in.

The Vietnam stop was

quite encouraged.

As a matter of fact, I've never seen President Chu more optimistic and more flexible than he was.

I have visited him, I think, four times before, so I had a comparative basis to make that judgment on him.

He seemed confident in his ability to handle the situation there.

He, of course, is still not infatuated with the idea.

What we need to hear from .

I think that these negotiations that we're moving into are of enormous importance.

I see them as being of enormous importance in terms

of politics much more than a trade.

I mean, of course, something will come out of it in trade, which can prevail.

It's really important to talk about this politically, in that if we're on this bicycle, we've got to keep peddling along, and if we don't talk, if we stop, then this is going to be bad.

And we've got to ensure the important thing is that if we lose out on this politically, if this leads to a confrontation between Europe and the United States, then no one getting on the trade front could ever make up for that.

And this has got to come out politically right.

And this is the, it happens to be the groundwork of the dial that we're going to be having.

Now, after the Smithsonian agreement, it was agreed, as part of the Smithsonian agreement, that these mountain natural negotiations would open in the GATT, and they should be on a reciprocal basis.

Now, in my talks here, in the very short time that I've been here, I've a little bit got the impression that the hope of the viewer here is that you're going to start out asking for home indicators, but there are more than that.

Everything is not reciprocal, but unrequited, as it were, advantages because of adverse credit balance.

Now, it's not that we didn't talk about an adverse trade balance.

We've lived with an adverse trade balance long enough without the same reserves behind in the United Kingdom, without the same reserves behind us that you have, and we've had to live with them.

And how do we find our way out of it?

I suppose we have two alternative approaches.

One was to say to others, we've got an adverse trade balance.

We're carrying a lot of responsibility with our sterling balances around the world and our responsibilities to our power and commonwealth, which we then had.

And we turned to our industrialized partners and we said, now you've got to give us something to get us out of this.

You've got to enable us to get ourselves out of this.

That was one way.

It was a way we didn't take because we didn't think it was a realistic way.

What way did we change?

We said we've got to get out of our behinds, and we've got to get out and sell, and we've got to do better in the weather markets.

Now, I think that the difficulty sometimes is that we've got a customs setting in the weather markets.

We've had to export in order to live.

And I think that perhaps in the United States, if I may say so, Mr. President, that

In the immediate past four years, it all came very easy, exporting.

It was this great industrialized country, so much greater than any other industrialized country in the world, able to get great markets for itself, comparatively easily.

Others have since come along and come up and have found the markets and have won markets.

And exports have never really been a very great feature.

It's just that a small percentage of your residential product have never really been a very great feature of the American situation, and they are now becoming one.

And I think that this will be a very difficult

You know, I was actually told about this with Japan, and then, please, gentlemen, I'm going to misunderstand, but we've got these difficulties, too, with us.

With Europe, with us.

With Europe.

I'm going to give a couple minutes, if you would, about what the Japanese have done to other countries.

George, you know, you remarked how they moved into other countries, like in California, and how they kicked Jews around for us.

It's a fascinating story.

And they moved into Europe, President, over the last three years, and there was a century of increase of Japanese exports to Europe.

has increased alarmingly in the last few years.

How have they done it?

They're terrified of having the last thing they want to do is have measures taken, our measures taken against them.

So what do they do?

They take sections.

of the market in different countries.

And it's all controlled centrally by me.

And they picked on sites in Germany.

And they said, we will export these.

And they went into the market.

They did a market research.

And within 18 months, they killed sites.

They then turned to Denmark.

And they did a market research in heavy construction equipment.

And if there's a market for steps there, again, they moved in and they undercut all their competitors by 30% and within 18 months they captured that market.

And they take it all country by country and then they move on to another country and do another.

And they do this operation quickly so they don't report.

And so there's just one little section of industry that is taking the automobiles to that prince.

Now they're moving them with automobiles into manufacturing.

And we're going to have to face up to this problem.

We can't appear to be ganging up against it.

This wouldn't be right.

We can't let it go on here.

We can't let it go on in Europe.

And we don't want it to go on in the third world and take our export markets either.

And the only way that I see it here is to go on the offensive and to move into the Japanese market and of course then to enable us to move in.

This is what's necessary.

And we've got to be able to go in and get in and sell under the Japanese market.

And if they do that, well, then all sorts of trouble will actually come in.

But I think this is the only long-term solution to the Japanese problem.

I do hope that in the presentation of your bill on your attitudes and certain

The image which the United States gives, the United States administration gives about attitude towards the trade bill.

President's very kindly explained to me some of the difficulties I went through later in internal with Congress.

But then, and of course this has been adopted in the way you frame your bill and how you describe it, but I do have, it is basically a trade liberalization bill.

And of course it's understood that other things in the present situation have to be put in as well, safeguards and all the rest of it.

But I hope it still comes out looking.

I mean, in terms of what advice I can give you on European-United States relationships, I do hope the bill comes out looking like a trade liberalization bill, but with safeguards built into it, rather than a trade de-liberalization bill with a little liberalization put into it.

And this is the image that is hidden.

Now, where Europe is concerned, please, if I may say, think about what doors of the protest are open for, and not doors that have to be locked.

And we all have those doors, all over, we've all got them.

And let us identify these doors.

And this is a political job, and the negotiators will go in and fight, and they will have some tough times, and it is good, and it's an essential part of the scenario, and it should be this.

But my ministry out of it has got to come to improve relationships between the United States and Europe, and this, I believe, will be a valuable vehicle, very healthy in this amount.

Thank you very much.

Now, when you get back and talk to the nine, the other side, you can say that we do not move unilaterally and suddenly and so forth.

The Secretary of the Treasury advised me to move in the evaluation.

So, please recharge your batteries.

I think it's important for all of us to know that.

We in this country, as is the case in Europe, have to recognize that political leaders have, for varying and different reasons, a strong isolationist turning in their favor.

It's right throughout Europe and certainly strong in the United States.

for us to accept the standard of that and have a confrontation with Europe, with Japan for that matter.

Because for Europe and America to have a confrontation with Japan is not a long run.

It would not be in the interest of the world what it would, let alone a trade standpoint.

On the other hand,

We want you to know that the views, the type of views you express, we want to hear them.

We want to hear them to an extent we can respond to them, but we cannot respond.

We will present our case as you will present yours.

but just being the person who was around in this group.

President Eisenhower was president before that in the Congress 27 years ago and all this cooperation started recognizing that as world tensions to a certain extent

that the dialogue with the Soviet Union and the new dialogue that has begun with the People's Republic of China in the United States could never have occurred unless the European-American community has been strong economically, politically, and militarily.

And the same is true, of course, in Asia in a different way where the American commitment to its small allies has to be clearly understood.

Now, at this point,

There was nothing that could be more harmful

As we have started this dialogue, the Soviet Union becomes more intractable because it is supporting its political issues.

The same is true of the BRC and the United States.

It could not be more harmful that we would allow economic confrontation to become so violent

that it would lead to political and eventually military deterioration, so they'd pick us off if I wanted to.

We're aware of that.

And so we're glad you could make your presentation.

Thank you.

Well, Joe Barton, hard and solid.

Thank you so much.

oh yeah

I think that there may be some concern, but I think basically what they're saying is we've got to take care of the forest and the hills.

They know very well that we don't want to leave.

We can't leave.

It's a long time.

My particular is very true.

They're aware that we're cutting back.

They're going to cut us back.

But I think they know we're going to stay one day, just like this.

We just about, I finished my report and Bill has made some supplementary remarks and then there's some discourse that I need to hear to discuss.

We've got to discuss the argument on this and stuff.

Just kind of to take a moment on that.

Thank you.

I thought it would be useful to let a fellow like this, who was one of the more articulate of the mission, to well see our European and our British lives.

He's basically a British man.

He has .

Because we still think in parliamentary terms that we're going to, when you talk about legislation coming out, well, we keep calling it a liberalization bill.

It won't come out.

I told you.

I said, I don't know, but at least someone could do more .

We've got to realize that the intercultural lobby controls the United States Senate, and frankly, the only positive hopes that you have for trade liberalization happens to be in the intercultural lobby.

Labor is gone, as you know.

For the most part, labor is termed protections.

Some of business is termed protections.

And so unless they knew as a tree to try on agriculture, which would cost them very little, you could just see all those people representing the farm states going right out the window.

And so we've done it.

Mr. President, one of the advantages of Sir Christopher is that he's such a strong character and so well-regarded that at least he'll be someone we can deal with.

The China Commission before it was so many-headed to know who he could talk to.

Now he is going to be basically friendly to us, and he is strong enough so he can speak for them, and he's going to play that role.

And as you know, Mr. Keith spoke to you about that when he was here.

So I think from that standpoint, it's a very fortunate piece there.

Hi.

Mr. President, I might make a few comments on what Mr. Christopher had to say.

Also, in the session we had before he came in, we talked about our international monetary moves.

I think it is interesting to note, and I don't expect people to be studying ECs, but students see, that we deteriorate in history by a greater amount between 1971 and 1972 with respect to the EC than we did with respect to Japan.

So it isn't as though everything is just fine.

It's not a relationship.

It's easy as the Europeans would like to emphasize to us all the time.

Second, I think my discussions with Mr. Christopher yesterday used the same expression as it did here this morning about locked doors.

Well, their negotiating technique seems to be is to talk about how important it is politically to have good relationships.

Then they talk about the fact that for their political reasons they have these locked doors.

And when you look at the locked doors, well, as you said, they happen to be

All the products that we want to ship to them, agricultural products, they want to build up their aircraft industry.

So those are locked doors.

The point I tried to make then was, and I guess you did also, is that there are lots of doors.

I think a lesson from this incident that we've been through and others that we've had is that while the political construction of this is the overriding thing and the way in which these pieces have to be put together, the economic realities push at you all the time.

And they're relentless.

And unless they're dealt with, they'll push the situation over.

And so I think that one can

of actors of political agreements that are not based substantively on dealing with the realities and can really do that much good, because it's as well as they are very powerful.

And then finally, in connection with the discussions of the closer base in Southeast Asia,

There was a cartoon in the Wall Street Journal the other day that showed, I guess, a U.S. fellow giving a check to somebody from a developing country and complaining he won't pay today in U.S. dollars anymore.

And I think there's a point there that as rich as we are,

Asia, at least theoretically, is a grant of purchasing power to a developing country to buy things around the world to the extent that it is tied to U.S. purchases.

And if we don't have the foreign exchange, it isn't going to be that useful.

If we don't have it, we can't give it away in foreign exchange terms.

So there is no part of the world and the developing countries

that have more of a stake in seeing this balance of payments, the balance of trade, straightened out.

And we've been trying to say that to them in our negotiating sessions.

And I don't know that it's really penetrated, but it's very much true.

But let me say to you, brother, I hate my career.

It keeps me worthy of your opinions.

Two or three points I think he made, George, that we however should bear in mind.

One has to do with Secretary Connors and all of us.

I think Roy is a former head of a multinational corporation.

Because the United States is such a good and insured market, we have not been doing an adequate job of going around and selling around the world.

I want to, and it's an element that we should bring to the Secretary of Labor in office.

When you talk to those folks down there, your colleagues in the labor movement and so forth, they've got to realize they've got a stake in it.

having business try to sell abroad.

It isn't a question of exporting jobs abroad in this case, but jobs in the U.S. aren't created by selling abroad.

That's why labor is looser before the March fancy trade.

But this is something where we can allow lip service to this whole trade thing, but very little has been done.

I mean, we've got a few bald-headed, but unfortunately,

When we get to the Treasury, what happens is that too many of our companies do sign up for multinational corporations.

And instead of, say, manufacturing in the United States and selling abroad, they go abroad and get cheap labor and start up there.

And that's what drives labor right on the wall.

Mr. President, the first thing after the Swear of Need ceremony we did was to initiate a study by the Commerce Department of all export programs in order to pull it all together and reinvigorate it, redirect it if possible.

Well, I think that we need to hear George, and I were talking about it the other day, and I would say George's top priority is

I don't know what can be done by talking, by draw voting in this area to make something to get our legal grade companies to understand.

They don't understand it a lot.

They don't understand it.

They don't know how to do it.

And they don't know what the opportunities are.

Because they're going to be dead.

And also, we didn't have safeguards.

But the fundamental problem is

whether or not we do have companies and so forth who do have a vigorous, imaginative program of trade, whether or not our costs are competitive in the world.

That's what you really come down to because you're dealing with the chain that devaluates and with the safeguard and with raising the ability to raise tariffs and the risk.

You're only dealing with the symptoms and not the cause, right?

We've got to get in the cause here.

The other point that I think is very fundamental is what he said about the Japanese, how they broke the Zeiss thing, how they now have the heavy curtain.

And then the Japanese acting to bring enterprise economy a sense of it.

But everybody knows the big Japanese trading companies are all directly using the gold in Japan one way or another.

So what happens is that the Japanese looking around the world, in Vermont, lost either, not somebody else out of a bunch.

And every 10 years ago, Foster Dulles in 1957, 58,

expressed great concern about the possibility that the Russians would do that, because they did not have a private enterprise, and the Russians might around the world, as they became more industrialized, kick off various markets.

put themselves on a loss-seeker basis, which they could well do, gobble up the market, and that we ought to have some kind of a program.

You remember, we had a meeting right in 1957, about a year before he died.

Now, I don't know on the Japanese side, but we have a very dominant thing.

Somebody brought in something, so I should maybe review it.

This gentleman and I haven't received an ACA here, so we will probably do it sometime.

They have to have first aid visits and all the rest, so we'll probably do that.

All this business of the diplomatic talk and drinking sake or whatever, and so forth and so on, does not get away from the fundamental problem that Japan, in terms of the trade area, is not being a good partner.

And in fact, in terms, as far as Congress is concerned, of our international responsibilities, it's not being a good ally.

Now, what do you do about this?

Do you do it and just subvert it all over and toast the emperor?

No, you have to find ways to get it back so that in our whole deliberations here, without getting to be jingoistic with regard to Japanese or protecting with regard to Europeans,

We in this room have to understand that we're in a tough city game with both Europe and Japan.

Do you agree with that?

We used to talk about it.

I'm sure we can make, but we have to take it from the premise that it's a tough, tough battle.

The Japanese, if they had their way, would buy all the time they could with toasts and fiddling axes.

But it's funny that in this field, and here I am, I always say to George, he was the biggest free trader in the academy.

He had an estimation.

But the point is that the thing is that we must not, we must not be not falling because of this problem.

So we'll just have a currency to evaluate and that's going to make our .

And the radio will have a safeguard and this and that and the other thing.

And that's going to do it.

It's going to open up a market share for the stations.

unless our companies are going to get off their heels and be competitive, unless American business is competitive in American labor, we're not going to sell them.

And so to build a kind of a world economically, probably the US could get along as a Fortress America.

But if we become a Fortress America economically, we then become a Fortress America militarily and politically, and that's a choice.

So that's why this economic thing has got to be thrown into the political thing each time.

They have to have a mic in somewhere else.

We've got the best market in the world right here.

Somebody wants to invest in our country.

Because we have such a good market, so our business says, well, we've got the best market in the world.

Why should we want to go and fly to Nigeria or somewhere else?

Why don't we sell it?

So we only swap.

We depend on that.

Of course, only 4% of our business is Swiss.

And 25% is Swiss.

They have to.

How do we get the American industrial incentive to do what?

When it's so easy to sell their products here,

But that's clearly a part of our problem is that it is a big enough market and it's so satisfying, particularly for intermediate and smaller companies.

And particularly also since those intermediate and smaller companies don't even think internationally.

It's very comfortable to say, but it's still only there.

The larger companies have found their way around the world and are engaging in all the national business.

But what we need to do, and I have particular proposals I'll throw in here, but what we need to do is to

is to allow a big part of our industrial base, which is not in those small international companies, to themselves have the access to and methods of getting their foreign markets, help them out of their narrow view.

And narrow is acceptable to them because it's comfortable.

The labor's going on .

They say corporations are just a way of .

Well, actually, they send their products back to the United States.

Well, what's the alternative?

The alternative is some foreign-owned company would send those very products into the U.S.

The alternative is not to even get the benefit of the investment in those countries.

Well, that's the market of that.

One can give up a U.S. market to a foreign company, but one can also retain a U.S. market for at least parts of it, the marketing parts of it, the investment parts of it that are available to the multinational operations.

If we're going to lose the whole thing, let's at least pay it back.

In other words, you say that it would be better if Rolls-Royce, for example, is going to export agents to the United States.

It's better for America to own Rolls-Royce than to print on it.

Sure.

And to have the marketing organization, hey, if you want to have an animal for advice on it.

I've been in three or four very explicit experiences.

For the trace of a whole national company is to forget the business here because the foreign products are going to come in and take it over.

Just take the Japanese calculators, just as a good example.

Or alternatively, save half the loan.

and maintain our marketing organization, our control of what the products are and what's happening in calculators is that having gone with the tide when the Japanese took it over, now because technology has moved one step further and taken almost all labor out of it,

Now the product is being brought back in for U.S. manufacturers, rather than Japanese, because there's no labor left.

But in the meantime, U.S. companies control the market, control the product, control the technology, and from back now, again, making them in the U.S. And we give it up to Japanese that have no, and it just losses Japanese companies.

rather than U.S. owned or at least influenced Japanese companies.

So I think the reality, as the President was saying, the fundamental realities are our competitive costs relative to others.

And we're not going to maintain the U.S. business just because we declare it U.S. We're going to have to maintain it because we are fully competitive.

And we're going to lose businesses which we're not competitive, better to

save half of it by being a part of the Mullen National Company than to save none of it by really opening it up to more and more .

I wanted to ask you one question to follow up on this.

How much of our trouble, you were talking about technology, and that's what's kept us competitive, our superior technology improvement.

How much are we being affected in our competition with foreign corporations by the fact that so much of our technological effort has to go into considerations

that only means something at home and means nothing towards stimulating our sales abroad.

For example, anti-pollution devices and that sort of thing.

Isn't that siphoning off the kind of technological innovation that has kept us ahead because this really isn't relevant to selling things?

It may have an effective demarcation, but I don't really see myself as really fundamental.

I think, you know,

I would say that's what made me fundamental, is that technology is no longer something that is exclusive to us.

Not only have others their own, but the flow of technology world around us is pretty well inhibited by national barriers and borders, and it is knowledge.

And knowledge flows very freely with no tariffs on it going either way.

So the technology is equalizing around the world, as it always does.

The protection of patents for a short time.

Patents, the two-day sentence that takes the patentable and a tremendous amount of technology used in the real world is not really imposed on all of our patents.

We have an equalizing of technology world around.

The advantage that we once had is diminishing basically everybody else because of that flow of technology.

Let me say a couple, I'll make a couple points and get back to George here because I've got some, I'll give us our lines over here.

Well, I've been the first to make the point, Bill, that it's a trillion-dollar economy.

And also, we're going to have the stock market go down 50 points because we have six billion on our hands.

And there are six people on Wall Street who never owned anything.

But anyway, maybe I can say it.

But the point is that

When you talk about 4%, only 4% of our, when you look at the great corporations, 4% would be the cream.

In other words, don't, don't, don't, that's not, that's not too much the fact that our exports are only 4%.

When you got, as I understand, business, right, I guess, when you got it over, you get a 4% fall in sales, that can make it a hell of a year or a modest year.

Mr. Greb, I think industry, the last two years, they survived with their foreign business.

Right.

Yes, he's talking about exports being 4% of our gross national product.

Gross national product includes haircuts and a lot of things that aren't.

important in that comparison.

The important comparison is the percent of our production, including raw materials, and that exports are 19%.

So they are a significant percentage of our production as compared to some of the state-impaired, but that's a real problem.

Over 60,000 farmers have gone out of business.

The other thing I'd like to do, and I think there's related to this,

when you talk about that.

But the idea of whether or not putting that kind of device, a delusional device on a thing is going to affect our sales and our hours of work.

We should look into that.

I just think in another way, and I'm depending on this today, and Elliot, I really want the joint chiefs to take a darn hard look at this.

I do not share the view that it is not of interest to the United States.

where countries abroad, United States is a smaller country than Latin America and the rest of the world, are going to have some arms anyway, that we should let the Franks, the British, the Germans, or whoever the heck you can tell them to, in my view, for the United States, not because of the jobs it's supporting, but because

is very important in terms of our future relations.

It is something we should retain.

And we can talk all we want about what happened, why it happened, because it's not communist today.

One reason is that we had a time when Sukarno, who was a left-leaning, you know, greater man, a leader of the country at the time, he was ready to push it all over the Chinese and totally replace the rest of the Soviet Union.

And Sukarno lost over two and a half million Chinese at that time.

What did the balance was the Indonesian military.

Why were the Indonesian military pro-US?

Because we had resisted.

I was not in the government at that time, but I applauded for them.

We had resisted the argument that there should be no lead into the nation because the hard oaks, the carnival of such a time, we had continued it.

That meant the indigenous people of Germany had mentioned what small arms they did have.

It was from primary to the United States.

That is why it's the hard oaks today that will lead me the other way, which is our way.

And the Vice President has addressed this.

We've talked about it.

Now we're coming to the other point.

It seems to me that's a very great mistake for the United States and whatever arms program we have, and I think we do this a great deal, to get other nations like Peru, for example, to say, come on, get ready.

When they want jet air, what do they want?

They want the newest, most expensive kind of a jet that we have here that isn't first necessary or relevant for their own defense, whereas something else would be far more relevant.

Take, for example, the British missile.

Now, the sixth missile, as you recall, was the one that was used by the Egyptians to, and it's a little boat, a little boat, a sixth missile, knocked off an Israeli destroyer, just like that.

We don't have that kind of boat in our inventory today.

Why?

Because we're thinking about potentially only a war where it would not be relevant with the Russians, for example.

In fact, the smaller countries, you know, the smaller countries

They invade an entirely different mind's program than we do.

And as a matter of fact, listen to America's fusion and the event we've become involved in, brushed by our activities at rest, these jets that go faster than sound, they can be totally irrelevant.

I don't think our military, I think our military, first in terms of our own defense, second in terms of engaging in the kind of war that we've just played, but third in terms of our military assistance programs to countries abroad, we are so upgrading

their sights that they all meant that they got to have the kind of weapons that would only be relevant in case they were fighting the Soviet Union, rather than the kind of weapons.

Now, I therefore greatly applauded the decision, which I understand has been made, to develop a new tactical bomber, tactical fighter, which is less expensive than AA, but it's less expensive, isn't it?

But why do we put, why do we put, you see,

It's, to me, around the church, for example, where they're talking about, they want the kind of airplanes that we have.

They probably don't need the kind of airplanes that we've got.

So at least, I don't know, but I totally agree with you.

I got very...

I'm deeply convinced of everything you just said, that some Secretary of the Committee Chairman, when I was with Bill, he got into a lot of absurd problems of making sales reviews in Brazil, which forced the debtors to go to France, and they did the, you know, the whole debt you just described.

So I had a recent day before a review of, I just got a review of all the congressional restrictions, the legislative restrictions, it inhibited these sales,

And it was my thought that having these in view, I would then go to Bill and to Bill Timmons and other people and see if we could not organize some kind of a joint effort, which in the light of the balance of payments problem might give us some chance of getting lifted some of these restrictions.

which were told to always buy people who thought it was a terrible thing to be in the United States to be harming these countries with sophisticated weapons and letting them waste their products and weapons they don't need.

But you know, it doesn't work that way.

And they have to buy it.

And I'm sorry, it's quite often you aren't supporting those elements that are more stable and aren't pro-U.S. than the others.

They're going to buy it anyway.

If you're a self-respecting dictator in some black country, you've got to have them.

That addresses one part of the problem.

The other part of the problem is referred to when is our military going to get its sights down to what is really wrong, not only to the kind of order we completed, but the kind of individuality we need.

Why the hell is this all respecting dictators?

You have to have a supersonic jet with all the equipment that'll fly to Moscow when all he's concerned about is bombing the Uruguay.

We need to do this in our own industry, too.

I'm going to need to explore a shed that can support itself in the DAF.

It could be a good export product.

Well, now, something should be true.

Take that stick and make the Navy look good.

Okay, I'll get to it.

The Russians are sending them all around, and they tell me there's a little boat, very inexpensive, one missile.

They cannot destroy her up.

They contain an aircraft carrier ground.

Why not?

Why not instead of giving us south, the underneath for a 10-month period, probably sell a thousand of them?

There's still a little bit of risk.

But I think Roy and Peter just understood what I said.

Obviously, I understand the value of all the national programs.

And certainly, I understand the value of exploration.

What I was saying is that

The average small to medium-sized company doesn't sit around and say, how can we help the United States through the balance of payments?

or trade deficit, it says, where can we sell our goods?

Now, the best market in the world is the United States.

And what I ask is, how do you get businesses in this country to get more interested in selling in foreign markets when we've got the best market in the world?

That's what I ask, and that's a tough question.

Peter and I have talked about one way of doing it, and rather than spending everybody's time here, I think we ought to get this one back on the table, because we have a plan that

First, it has political appeal, and second, it may be substitutes in its contribution, but first it starts off with a domestic political appeal.

We do have a council on international economic policy and so forth, and I strongly, I would like to correct that that should be a matter of the highest priority of everybody's

have the cabinet represented on it.

Because it is a question that is highly relevant to the trading discussions associated with it.

With this kind of trade discussion, there should take place a narrow

an area of, well, we're going to go up here, and we're going to go down there, and the rest.

It's going to be a self-defeating exercise.

It does.

But we're a big nation.

We've got to see the world as it is.

We're one of the, we're probably the only nation in the free world who looks outward.

Unfortunately, there are two in the communist world who look outward.

Right now, they pause for a moment, but they will continue to move around.

The Soviet does in the time of the United States towards Edward now.

inward only, and who comes home, then God knows the rest of the world's going to be in terror, the rest of the free world.

That's what this thing's all about.

So, Jordan, go ahead.

We didn't mean to tell us more on these things.

Well, it's all very relevant to what happened, and I thought that I would describe what happened in this

I think the process that we went through was another example of what Bill described the other morning of the advantages you have when you have a policy which has been laid out

process through which you take out particularly best and try to mediate through to a result in terms of the basic policy.

The basic policy was made possible by changing it by the president's closing the gold window in August 1971.

And then as we went through the Smithsonian negotiations and as we went through subsequently

which was crystallized in the talk to the IMF last September, which I followed up on with additional details.

So we had laid out a basic plan, and we had said that when there is obvious disequilibrium in international payments, something should be done about it, and we didn't just sit around.

We said, second, that when there was a disequilibrium

You shouldn't just talk about somebody's deficit, but also somebody's surplus.

In other words, the world is symmetrical in that sense.

And so therefore, there should be a symmetrical solution.

One should work on both sides of it.

We pointed out, third, that you have to be aware of the link between the monetary system and the trading system and the aid system and the military system and so on.

These things are all a part of the same piece.

And the monetary system by itself can't carry the full load of adjustment.

It can make a big contribution, but it is not able to carry the whole load on its own.

We pointed out the need for more flexibility in the exchange rate system, and we took the position that we should try to get away as much as we could from controls of one kind or another on flows of trade and capital.

Well, with those elements in mind, as we approach this little crisis that we had last week,

We tried to behave and to seek a result that was as close to true to these basic ideas as we could.

In other words, we tried to put our policy into operation in the process of meeting an immediate crisis.

And we had a procedure set up in which the president was positioned to receive information and call shots.

We had a policy group consisting of Bill Rogers, Arthur Burns, Herb Stein, Peter Flanagan, and myself, who met very frequently.

heard what we knew there was and developed options for the President.

And then we had a negotiator who had one of Elliot's airplanes and we had him flying around and we had our various secure telephones and were able to position him in various capitals and conduct this negotiation.

I might say that our ambassador in Japan and our ambassador in Germany both were extremely helpful in all of this.

We, as we had a lot of problems, we had the options of doing nothing, and we wouldn't have been hurt too badly by that.

We had the option, as it was developed in Europe, of possibly flowing by the European countries,

which would have been all right with us.

And we had the option of taking an initiative ourselves, proposing something, doing something ourselves, and trying to point out the importance of some reciprocal action by others.

I felt the last was the best of the alternatives.

But the others were perfectly tolerable to us, mainly because the president had closed the gold window and nobody could really lay a butt on us.

So we sat there with a pat hand and we let other people squirm and wriggle and struggle.

And they basically came to our solution eventually, the Japanese particularly.

I found it difficult because they had to make a major adjustment, and I noticed in the papers yesterday that the prime minister of Japan said he didn't know anything about it.

He was devalued there.

He was devalued at the end and floated in North Earth.

I think the finance minister did it all.

In terms of the results, we figure that there is about an 8% change in exchange rates.

which is roughly the same as what came out of the Smithsonian agreement.

So that when you take these things and add them together, particularly you focus on Japan, and we haven't seen where the end is going to wind up as yet.

But with respect to Japan, we have had about 36 to 40% change in exchange rates.

with respect to Germany, with respect to the Europeans, brought up something on the order of about a 25% change.

These kinds of changes all get absorbed to some extent around the edges one way or another, and they don't represent quite as big a change as they look.

But they are very substantial, and they do give the prices of our ex-course

a benefit from competing in world markets, and they do give our domestic industries a better opportunity to compete in our home markets, and there just isn't any question about it.

So they will help.

How much?

It's hard to say, but they will help with the trade problems that we have.

I'd like to say just a word about our own domestic prices, because when you make your imports a little more expensive, obviously, to the extent that that's so, and you want it to be so, because making them more expensive enables the domestic goods to compete better.

You tend to raise the price level a little bit, and so you do have that effect.

We addressed that in our statement, which you have a copy of, and simply took the occasion to re-emphasize the importance of our domestic budget control, monetary policy, and the strength of our Phase III program, which is a very strong

but I think people will more and more see that it is.

But I would say beyond that, that as far as the typical average American is concerned,

The value of the dollar is what he can buy for it in the stores around where he lives.

That's what determines the value of the dollar as far as he's concerned.

And so the struggle to make our way to the price system work effectively, all of these are the key things as far as he is concerned.

And these international moves will help us in our trade problems, will help

and created as the preservation of jobs and businesses in the U.S. George, what is the total in the last year?

Well, the estimate for 1972 is about $55 billion.

$55 billion.

Okay.

That's important.

That's about $48 billion.

Right.

So we had about $7 billion in debt.

You can see that on these figures here.

Now, the President emphasized this trade link by stating that he does intend to introduce trade relations shortly, and by not going into detail about it, instructing us all to consult with people and get their ideas about it, but by suggesting some of the elements that will be in the picture.

They are consistent with the sort of thing that Sir Christopher said here.

The President has always emphasized the leadership by the U.S. and not turning inward and so on.

But they're also consistent with the obvious fact that if they're going to negotiate with me, well, if we're going to get them to change some of their practices, we have to have something to negotiate with.

We have to have some negotiating tools in our hands to say that you will

If you don't do anything about this, we will.

We can take direct action, and we can do X, Y, Z, whatever it may be.

And without going into all the details of the sort that is under consideration in the trade bill, I think that the general proposition is designed to put a great many more of those kinds of tools in the present table so that in the broad sweep of negotiations,

At the high political level, people know that the President has some power there that he can exercise, and which he now is going to have.

So overall, I would say that we had this crisis.

We had a set of policies.

We were able, in a sense, to turn the crisis to our advantage by moving

the reality of world monetary arrangements a little bit closer to what we think they ought to be.

And at the same time, we have not said this is the answer to all the problems.

It is a move in the right direction.

We think it will definitely be helpful to us.

We've talked to, you know, both Juan and Mills and some of them.

They probably will.

But I can just take a little feel about the trade then.

what the safeguard means, and what going up and down means, and so forth and so on, because that's what I thought.

I think I understand it now.

People around the table, not just the Secretary, but the Congress, the Patriots, you particularly, Peter, are going to take this into account.

Tell us a little about what we have in mind.

I mean, I understand we haven't got the legislation ready.

We've got to install it.

But the Congress, as you've chosen, needs to be seen.

But what's a safeguard, for example?

The British had to be confused about the British.

Europe has a safeguard system already.

Everybody has a safeguard, except us.

Except us.

And what does a safeguard mean?

And all I'm thinking is that we have a safeguard against the imitation of a particular market to buy products from one other or several other countries that simply wipes out in a rush

a whole bunch of businesses and jobs, and we say we favor expanded trade, but it has to have an actual pace of increase that doesn't become politically intolerable.

very bad for a segment of our population.

So in terms of what this means in a bill, it means that we have to have some criteria for how we figure out when that is happening.

We have to have a procedure for making that finding of that.

And then at least we believe that there should be put in the president's hands

some possibility of remedies so that the remedy can fit the particular situation.

The main thing there, George, as we know, is to have the procedure one that can move swiftly.

Right.

Terror commission moves like molasses on these things.

For the time they usually act, the business is gone.

Now, in regard to the right to move up and down, is that a temporary quota?

Well, you could do that.

You could work through a tariff.

You could work through a quota.

You could work through a combination of a tariff and a quota.

Or I think one might find that what something like this is actually in the law.

that you could also work with other countries by saying, well, this is going to happen unless you act a little bit differently.

I'll check the letter, which way it went.

One point to give you a number.

We had to go apply for surcharge in August the 15th of 1971, which were a while.

and it raised holy hell, with some people that we didn't want to raise, raising like, you've got my Latin Americans.

And frankly, we didn't care who the Latin Americans were.

The Latin Americans, they weren't virgins.

It was really Japan we were aiming at, and the lessons in Europe.

Now, under this system, what NERD is recommending, suggesting, as I understand it, is that we have, the president has the power to apply a certain charge.

Now, at the time, we didn't do that last time because we thought it was violating the Gantt.

But on the other hand, we have legislation that allows us to do that.

Is that right?

This is another section of the proposal that we've been discussing, namely to say that the president would have the authority to declare a balance of payments emergency under certain circumstances, so that he would have that finding.

Then, given that finding, he could apply, let's say, a surcharge across the board on all incoming products, which is what we did before.

or if there was a problem with one country or two countries and only that, then that could be spotlighted in the form of a search warrant.

Now, I might say that is completely consistent with the IMS speech that the president made and that I made and set forth the way in which we think the justice should take place.

So that would be another element of that.

We also are looking at ways of changing

Section 252 of the present act, which is essentially authority to retaliate.

and making that a little bit broader.

And that is in the sense of a kind of a rifle shot approach that can be taken where we feel we are just being shut out of markets unjustifiably and we want to make that point and make it with some muscle behind it and retaliate in that fashion.

We also have been working on ways in which the President would have the authority to negotiate about levels of tariffs and non-tariff barriers and be able to negotiate up or down, take actions up or down.

and do it bilaterally with respect to a country and also be in a position to negotiate multilaterally as Sir Christopher is looking for expanding the world trade, but not on the basis of just saying we're going to let go of everything and subject ourselves and our market to innovation in a way that couldn't work.

The present situation can't.

One thing we have to have in mind is that it is our goal not to use these things.

The whole purpose of this

to an apartment position where in these negotiations with the Europeans and the Japanese and those of us, that's all I'm recommending, the great industrial nations, we could say, look here, we've got this power.

If you want to play, we'll negotiate it, or we'll use it.

So it's really bargaining chips that we need at the present time.

And this is another example.

Some people say, well, are we going to have another Kennedy Round type of building?

And why is Kennedy Round services for purpose?

And it's time that we have this terrible problem.

But...

Is there a role to add to the present situation?

Because under the Kennedy round, the United States could go down, but those negotiations couldn't go up, not really, not realistically.

Now in order to get the British, more importantly the European community, and the Japanese to move,

They've got to figure there's a spin in the closet.

And if they don't move, you're going to go out.

So, now, while I think Solms was concerned about the statement I made and George made, too, when I said, in order to get free of trade, we've got to have the right to have protection.

Well, that was said quite deliberately.

We're trying to take a multiple on that one.

Our desire is not to err.

And I think this is very important for everybody to emphasize.

Our desire is not to build a protectionist wall around the United States and to have the world divided into warring trading blocs.

Our desire is to have a freer flow of trade and investment around the world.

This is really in our interest.

And in order to effect that in a way that does not jeopardize, here's the thing that George emphasized it much better than I did, and you can call it what you call it.

And indeed, it's not to jeopardize American jobs.

That's what's involved here, you know.

It's jobs that we're talking about.

It's businesses.

It's balance of trade.

But it's also jobs that are not to jeopardize American jobs.

We have got to have the right of the president, and that means, of course, his representatives, because the State Department and the Office of Trade and the COTO

to go in and bargain with our trading – our allies and friends abroad, but our competitors, bargain in a way that we get a fair trade for American products, for American labor, et cetera, et cetera.

Is that correct?

Is that the way – is that more?

I would like to say to my colleagues in the cabinet, Mr. President, that when they go in to see you, they should be alert, particularly if you decide that there should be, there's going to be a picture of the meeting, because they are likely to find themselves engaged in conversation about that.

There's a lot of care that will have to be taken, and I'm sure will be taken.

Because although on one hand you want that carrot, as a fellow who's labored for four years in the Commerce Department, I can tell you that they heat industry by industry.

When you've got the tools to use, it becomes incredible.

so that the more you have the stick in your negotiations abroad, the more you've opened the door for unilateral decisions by the President of the United States without the terror emissions fooling around, which was kind of a safeguard against industry by industry deluging you with the first sign of trouble.

So in the drafting, this becomes an extremely important exercise.

On the one hand, you can hold off an industry that really isn't being hurt that badly,

but still have that tool in the negotiation on the other, and that becomes a very, very nice point.

that what you're just doing is just putting a monkey on the back of the president and the White House and all this stuff without saying, as I talk about the tariff commission, there's many times, you know, people come in and say, we've got to save the human experience.

But the way you say, well, you go to the tariff commission, you say, that's like telling the Israelis to go to the U.S. past.

You can say, well, we want you to do it.

It's a little cowardly.

That's how it is.

You tell the Israelis that they should go to the U.S., they think you're telling them to go to hell.

But this is a matter which we all now have an understanding of, so we want to talk about our outward policy in the United States, and that's one of the things the last election was about.

We're not going to turn isolationists, not militarily, not diplomatically, not economically.

We're going to be leaders in the world, but we're going to be seeing to it that we're not picking.

We're going to be seeing to it that the United States and the end, but you can't take, I think this is one thing you've got to understand, you can't take a completely non-competitive industry in the United States and say, look, we're going to subsidize it, we're going to do everything we can, and you're going to say, those are the ones who come.

What we're really talking about are those industries that are basically truly competitive and opening up markets for them.

Well, in designing, I think Jim's observation is very much to the point.

And further, in designing the safeguard system, we have thought that you, so to speak, put in a safeguard and then you phase it out over a period of time with the expectation that the industry will do something about their problem in the meantime.

Everybody has to leave at the present time.

I'd like to spend just a couple minutes on one subject that you could have a line on.

You all know what the line is.

I covered it in my press conference a couple weeks ago, and Bill covered it extremely well, and he was gesturing it.

Bill, I want you to start doing what you said about the meeting.

As well as what you said on the Amnesty question, the Amnesty question, I think there must be some facts about, you know, what you've done.

You have to take out what you consider to be the biggest failure of all kinds of capital.

Now, that's whether they did or did not.

What you have here is a curious situation.

I remember 27 years ago, when we were trying to sell the Marshall Plan thing, I had a series of colleagues, and a lot of other isolated colleagues over the head to get them to support it, because then, curiously enough, when it was a question of aid in Germany,

as well as Western Europe.

In other words, our farmer attitude has killed down for a long time.

The P.W.

Derrick Marshall plan, the liberals all supported it, and the conservatives, basically, they were on the Republican side for the isolation.

They said, oh, no, we won't go.

We've got it true, however, the Indian Congress, which did some things that were good in most cases, which to its credit did support and overhauled this great initiative of Europe and Europe.

I mean, when we look at Europe and Japan, our two former great allies, at least they have channeled their efforts in the ways of meat today rather than the ways of water, and it would not have happened had we not helped rebuild them.

And that's, now, you look at this miserable country of North Vietnam, the situation is that people look at this, they see 40,000 white Americans killed, they see people who have just come back.

Some of them, of course, have stories from the developed world and mysteries.

And so they say, ah, we're not going to be sorting for it.

But the exact reverse is happening here.

Those of the extreme liberal wing, both Republican and Democratic parties, are now opposing a minority for the

with almost the same arguments, and I think Bryce will remember this, that the Republicans, conservative Republicans, some conservative Republicans, opposed aid to Germany and Europe, can't we, back in 1947.

They're saying, in effect,

that we aren't going to hate Europe, foreign countries, and then we used to say, or they used to say, I swear, unless, if it doesn't mean that I've got to build a dam in Colorado, or unless they're going to build a highway through my district, or whatever the case might be.

And that was the argument that was made.

It did not prevail then.

Now the argument that is made is that we're not going to hate it.

The part that we have to bear in mind is that

The old internationalists have become the new isolations in this country.

They're isolations on trade, they're isolations particularly on aid for us.

And interestingly enough, the old internationalists, the new isolations, looking at this war,

Those who banned the United States for being in the war, those who never said a word against North Vietnam, and some even, frankly, shall we say, perhaps felt the United States was wrong and North Vietnam was right in this war, are the ones that are opposing.

and it's taking the lead and imposing it.

Now that's what, you have that curious thing going on.

Now let's look at a culture that we're facing.

God knows nobody wants to spend a cent abroad.

We've got many problems at home.

The only money that we can justify spending abroad, except for pure humanitarian causes, like earthquake or something like that, which is the American tradition, is our detainers to the United States, who we serve.

The only basis on which we will eventually ask for some congressional assistance – I mean, for congressional approval for some kind of assistance program for our Vietnam, South Vietnam, and the rest of China will be that we have asserted our interest in a copy decree, and that – I love that part of that quote.

of peace is as unstable as it might be, which can last a while, so that the same kind of thing is repeated in the future.

It isn't a question of reparations.

Not at all.

I would be the last to support that.

It isn't a question of doing this for basically humanitarian reasons.

If somebody wants to vote for it for that, that's fine.

But that isn't the reason.

What motivates the United States in this instance

Here's what motivated us after World War II.

Why did we help our former enemies, Japan and Germany?

Because we felt then that it was far better for us to help them than to leave them weak, frustrated, and eventually easy targets for us to face in the comments.

And it was right.

And now if you look at this situation, why would we help them?

We've helped them because the United States, by helping them, will be in a position to draw them more toward their own progress so that they earn it.

And also, we will be in a position – we can't be sure of this – but we will be in a position to have some influence on that in the future.

If they decide that they want to

If we are not in education, or shall we say, if we have no leverage at all, we have no influence.

I'll just close this by saying, many will come and say, well, why don't you get the Chinese and the Russians to write on it?

We're working on it.

We can't say anything about it.

But God knows, if we talk to the Chinese, we talk to the Russians, and we tell them,

Look, if you'll be restrained, we'll be restrained.

I had that in my speech at the Council of Peace.

But that's something we can't talk about publicly because neither the Russians nor the Chinese can get caught.

So the polls have changed on the government.

And I think they do it for other reasons that have to do with each other and with us.

But looking at the United States and what we do for our Vietnam, as this issue comes down on the planet, and as you have your conversations,

with Republicans or some of our hawks and so forth have been out saying help and all that are supportive.

And frankly, to the extent we can with some of the old internationals, what we have to do is just say, all right, are you at peace?

Are you making a more stable world and so forth in that part of the world?

Then we ask for your support for this on that basis.

Bill, you want to add to that a little as to how

I remember him pounding the page with thousands and all the rest were supporting him.

Aren't you proud of him?

I think one thing we can do at the moment is just to say to them, don't make your mind up.

You don't even know what we're asking for yet.

And I think that maybe they don't know what we're asking for or why.

And I think I've got to testify to that.

We've spent about $25 billion dollars there, and it all goes down the drain now because we're not willing to resist.

And we've lost everything.

If we make a modest contribution, whatever it is, it's great for us.

Politically, I heard Jerry Ford last night at a press conference, and his line, he's making it look like he's just giving his own opinion.

If we Republicans, we're not going to support this, we've got to do it alone.

It's important that he made this peace-building argument, but to the degree we can have, you know, we're not alone in this project.

The Japanese have said they're going to help, and others, and even if you get some communist countries in there, the whole rebuilding of that, I think will get some of the hawks off the hook a little bit.

You can certainly tell, and, George, you can work on this.

I would like every member of this cabinet, in your individual conversations with these people, to take the line Bill suggested.

Don't try to win until nobody's going to be out there beating them.

Let's help our farmer animals.

They hit the bastards, as they could for what they did to our POWs, to the people they've killed.

Brutal, barbaric people.

The Nazis were pretty rough, too.

And furthermore, we're not sure what they're going to do.

We've got to be sure the disagreement works.

And if we start yelling now in favor of the North, it's a tough thing to sell.

But if they behave, well, first place, if they yell, we don't have a problem.

that the Soviets would do anything even nominally for South Vietnam.

I would doubt it.

We would try.

I mean, maybe we'd try.

I don't see, well, maybe for Southeast Asia, whether the Soviets might join a multilateral.

That's it.

Let me tell you, the multilateral thing, George, several of the countries, and Europe for that matter, have indicated a willingness or participated in it.

There are a number of them.

You could say that, but second, however,

Well, we would like them with as much, and we want to get the others in, all the lateral bases you want or whatever.

When we have these polar lateral deals, the United States always puts up about 50%.

And multilateral aid, and this is something that all these guys have got to understand, doesn't get any stroke.

I mean, so the United States, whether it comes from the World Bank or it comes from the Asian Development Fund or the rest, so we're helping the Japanese, we're helping the Germans, we're helping the rest.

As far as our influencing them, the stroke is much less.

So I think that talking to the founders and the senators shouldn't say, yes, we are going to provide.

Other countries are going to participate.

They're going to make their share.

But second, it is the interest of the United States

and this is true of all aid programs, for us to do something bilaterally so that we can have some influence on their policy.

That's exactly right.

I'd like to get back to your question.

Suppose that the Russians, all of a sudden, said we'd like to help the Soviet Union,

engaged in life assistance programs.

In the first place, the two would be scared to death.

We wouldn't want it.

We'd oppose it.

We'd be afraid that they might have too much influence.

Today, the Maricopa would go and fight you.

The Maricopa would go and go on to the rest.

That's our concern.

And that's what we're doing.

I don't know whether you noticed, but the EDC talked about giving aid to the PRG.

Did you see that?

The European community said they were going to give their aid to the PRT as well as to the two governments, split up in between.

Well, I think that you can say without any questions that there's going to be a lot of interest on the part of many nations to help, particularly on the part of Japan.

And all I have to say is let's wait and see.

We'll have a program later on.

And I have talked about it in terms of an Indo-China, Southeast Asia program in which all nations will bear and bear care.

But in terms of the United States, as they were saying, we've got to have some struggle in the North.

We can't talk about it, we can't talk about it out there, but let us oppose this.

Let us oppose this.

We've got to cease firing on us.

It's impossible.

Let us oppose it.

Actually, something happens.

We can't hold you against this.

Now, we're providing aid.

They need that.

Let us suppose that they decide to make a run at the officer, or himself, if not me.

What do you say to them?

You say, suppose if you make a run at you, we'll bomb you.

It's not a very good option at the moment.

But on the other hand,

they're going to have a very great interest in not cutting off the existence they're getting.

That's the real thing.

There's one other argument I think you ought to make, particularly you, Mr. President.

And that is, for those of us who want to sound awful, point out that in the agreement we've said that we would consider helping the whole area.

If we now say no to that, we may not get the business back.

We can't be shut up until we get the business back.

We've only got 60 days to go.

When we get the business back, then we can argue about what we're going to do and how much.

But my God, right at the time when we're pulling off exactly what the American people want, the prisoners are coming home.

Why don't they shut up?

Bill, if you could do it.

I think if you and your colleagues up there, if they individually came up, you would make that happen.

You could do that.

That would be very important.

Because he is exactly right.

We've got to support these prisoners back, and everybody is damn proud.

People are wearing the uniform and splitting their buttons.

But I suppose...

And as a result of this, I'll say, ah, the Americans are not going to help us and so forth.

And they're saying, but we're dealing with a maniacal and introverted bunch of people up there.

And this is an extremely dangerous situation.

I think that if you could also emphasize in 22, which we should just not do, this is not something that began with us.

Johnson, in 1965, and several occasions after that, Russ, speaking for Johnson, commended him and said that the United States, after the war, would assist in the reconstruction program for all of China.

And that is not a commitment that went through the Senate, but it began then.

I, at my first speech on it in May of 1969, said, we would assist in the reconstruction program.

I even said, how about it?

They broke it down.

They've been so frivolous and killed so many people and they wouldn't settle, et cetera, et cetera, et cetera.

But let me say, we have a lot that's staying here.

We've got to stay for the rest of it, because we've got at least 20 minutes left of that.

And now we've got about some time with that.

We've got to get some more reasonable ones to continue supporting it.

So that's about what it gets down to.

Mr. President, I had to apply one of the early points you made.

And clearly, anybody talking up in the Hill will find it.

And this is the question.

Where is the money coming from, domestic or foreign?

In testifying in press conferences, I'm sure it's a gap that I have had.

We've said, first, there's no agreement.

Second, we don't know how much.

Third, we don't know when.

Fourth, we don't know whether it's monolateral, bilateral.

We'll take into account all of that and make that decision and have allowed, kept ourselves open.

On the other hand, we continue to request more and more as to where it's coming from.

It might well be that when Henry gets here and comes back, he may want to at that time say, now we know more about it and

Let me say this on that point.

I don't want this to go out yet.

Next week I'm going to have to fight it properly.

But in my view, I think what we have to say is that the money for this decisions program is not going to be directly invested in programs in the United States.

That's the way it's going to have to be.

I know that the argument that the statement has been made on the defense budget can't be done anymore and so forth and so on.

But we can handle all of this in the whole national security complex.

So you can handle it in terms of the facts and because of the law and the truth.

Let's suppose you get a ceasefire in Laos.

Laos costs the general store profit about $300 million a year.

All right, this ceasefire in Laos.

You haven't taken into account possibly the ceasefire in Laos.

You have taken into account a ceasefire in Laos.

But I'm not suggesting it's going to be equal.

I'm not suggesting the defense department's going to like it or the other tornadoes.

It isn't will, domestically, in this country, in this Congress, to say, we're going to aid our Vietnam and cut our domestic budget.

So I simply say, if I could read those, no domestic program will be started until December 12th.

We're going to have to come out of our national security budget.

But I put it in national security rather than defense.

I'm trying to make an issue come down there, and I think that's where you should come down.

that we don't go out and give that away in any inadvertent discussions about where it's coming from.

We hold it to our decision, we'll make the whole decision, and then you at that point make it clean and clear.

And I think that can make a major change.

Of course it would.

They're also, though, going further.

They're going further.

They say, now that the war is over, whether we're going to be able to, you know, we have a great, great station, and certainly working with us in some ways here.

He comes out and says, well, now that the war is over, we can cut the defense budget by $16 billion.

Now, he knows damn well you can't cut the defense budget by $16 billion.

You see, that's the, it's just part of the business of putting the money on our back.

But as I often say, that's where the intensity picks up.

Oh, I wanted to tell you that, uh, you'll make a note that Bryce Harlow is there.

He also invited Clark Schrader.

Whenever we have matters that do involve sales, uh, rents and so forth, it's both Bryce and Clark who are the people who dealt with the Congress.

I guess when they're available, we're going to have them in, and they'll take a listen.

And they're welcome to contribute.

So in front of you, you will take your holo-lessons for the next meeting.

That's exactly what I'm saying.

If there's anything you need to do, I can do it for you.

Thank you, Doc.

Okay.

I'd love to talk to Frank about what you're doing.

I've got a little bit of time on my hands.

OK. We've got to go.

We're going to the next step.

They don't have any four o'clock.